Floris van Dijkum: Hey David. Thanks for taking my question. So I was curious on TRG. So I noticed the occupancy dipped a little bit. You essentially — you want to, increasing your ownership by 4% by issuing some OPUs. What price was the stock issued at and what yield are you buying? What’s the implied cap rate on the TRG business and how should we think about that also as it relates to other potential opportunities in the market and how much flexibility was there and then maybe I guess in terms of the timing of the next sort of puts or hurdles that you have for increasing your interest in that business going forward?
David Simon: Yeah, let me — I’ll just talk about the exchange a little bit, and then Brian can give you an idea. The occupancy is no big deal, but I’ll let Brian go through that. So Taubman has the right to put their interest, their 4% interest for the next five years and it’s basically at essentially appraised value. It’s either a negotiation or we get appraisal firms. We decided to negotiate in good faith. We made a deal and then we issued the stock. And, I mean the reality is we’re trading, Simon Property Group unequivocally is trading below appraised value. So one of the reasons we bought our stock back was, I’m not a big fan of issuing stock at this moment in time, so we’ll use our capital to basically get rid of the dilution that we did issue.
Now, Taubman had that right. They exercised it appropriately. We had a good faith negotiation, made a deal, and it was more or less at their appraised value. And to put it in perspective, for today’s value, it’s probably pretty close to where we negotiated our deal with Taubman pre-COVID and then obviously we got the COVID adjustment, but it was in that range, kind of where the deal was announced publicly. And so we’re going to quarterize that dilution by buying our stock back. We started that once we made the deal. And I think the family’s pretty smart. They said, Simon Property Group stock’s undervalued, and I like the dividend, and why not? So I think, I don’t know what will happen next year. It could be the same thing, but at this point they have 16% left in TRG.
We’re happy to own 100% of TRG. I think they’re happy, to do what they’re doing and we’ll deal with it as time goes on. But nothing can happen the rest of this year and it’s sometime next year that this all recycles. So with that said, I hope that answers that, but I’ll –Brian, if you want to add anything to that, please.
Brian McDade: Nothing on that, but, Floris, on your question about their occupancy, it is back 110 basis points. There were really two major spaces that they had to take out of commission that they come back online in the fourth quarter. So you will see that come back on and then some in the fourth quarter, it’s just simply timing.
Floris van Dijkum: Got it. And if I may — if you don’t mind, the — if I recall correctly after you look at my notes but the cap rate at the time that you did the deal was, it had a six handle on it. Is that the right way to think about the appraised value for TRG?
David Simon: Well, again, this was a negotiated deal. Their view of appraised value started much higher than that with all due respect for us, which you might imagine. But we settled on a deal that today, if you go back in time to — Taubman pre-COVID would have attributed Taubman’s per share number in the $51 range. So somewhere in that range, we ended up, if you remember, doing COVID at $43 a share. I will tell you that their NOI today is higher than it was in ‘19. Portfolios change here and there, so it’s really hard to do an apple on apple, but at the end of the day, that gives you the sense of things. But you’re not that far off. I think that’s a reasonable estimate. But that kind of puts all the metrics out there. And again, not a huge deal in the scheme of things, under a couple hundred million today.
