On August 10, Simon Property Group (NYSE:SPG) reported results for the three months through June 30 and raised its full-year profit outlook once again. Real estate funds from operations (FFO), a cash-flow measure suited to landlords, hit $3.29 per share. Tenants are earning more from their stores, and management is confident enough to lift its guidance again. Yet the professionals who own the stock are heading the other way.
Shoppers Keep Showing Up
Start with the tenants, because they pay the rent. Reported retailer sales reached $838 per square foot over the year through June 30, up from $736 a year earlier, on June 30, 2025. Stronger sales tend to make higher rent easier to swallow, and base minimum rent per square foot did climb to $62.42 from $58.70.
That demand flowed through to profit. Real estate FFO rose to $3.29 per diluted share from $3.05, and net operating income at Simon’s domestic properties grew 8.5%. Management responded by lifting its full-year real estate FFO range to $13.20 to $13.30 per share, moving the midpoint up by $0.08.
Shareholders get paid while they wait. The board declared a third-quarter dividend of $2.25 per share, $0.10 more than a year ago, to be paid on September 30 to anyone on the books by September 9. Simon also put $211.4 million into buying back stock at an average of $205.10 per share, and it finished June with about $9.3 billion of liquidity.
Where the Shine Fades
Now the less flattering side. Net income for common stockholders was $483.1 million, or $1.49 per diluted share, versus $1.70 a year earlier. The 2025 quarter included a non-cash gain of $0.21 per share from investment activity, which flatters that comparison. Still, plain FFO followed the same path, slipping to $3.12 from $3.15.
The growth story has limits too. Occupancy was 96.0% on June 30, 2026, unchanged from a year earlier, so the rent gains came from higher prices rather than fuller malls. Management also credited acquisitions for part of the 7.9% growth in real estate FFO per share, which means some of it was bought rather than earned. Borrowing has a price as well: the $1.4 billion of secured loans completed in the quarter carried a weighted average rate of 5.36%. And the new net income guidance runs from $6.47 to $7.47 per share, a far wider spread than the earlier $6.61 to $6.76.
Big Money Is Backing Away
Hedge fund ownership fell to 34 funds in the most recent quarter from 48 in the prior one. That means a notable chunk of professional money trimmed or walked away. The forward P/E sits at 30.77 as of September 8, so the market is already paying up for earnings growth to continue. That leaves little cushion if a quarter disappoints. The tension is plain: the business is posting strong numbers while fewer big holders want to own it at that price.
Strong Malls, Big Multiple
Simon is running a busy shopping business and keeps nudging expectations higher, yet the stock carries a hefty multiple and fewer funds are willing to pay it. The bulls need tenant sales and rents to keep rising, with growth coming from the malls themselves rather than from purchases. The bears need flat occupancy and costlier borrowing to start showing up in earnings, which is where the price would really get tested. Until one side gets that proof, the earnings report and the ownership data will keep pointing in opposite directions.
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