Simon Property Group
Encyclopedia
Simon Property Group, Inc. is an American
commercial real estate company, ranked #1 in the United States
as the largest real estate investment trust
. Simon is a fully integrated real estate company which operates from five retail real estate platforms: regional malls, Premium Outlet Centers, The Mills, community/lifestyle centers and international properties. It currently owns or has an interest in 393 properties comprising 264000000 square feet (24,526,402.6 m²) of gross leasable area in North America, Europe and Asia. The company is headquartered in Indianapolis, Indiana
and employs more than 5,000 people worldwide, it is publicly traded on the NYSE under the symbol SPG and is part of the S&P 500
.
and Herbert Simon, was founded in 1960 in Indianapolis, Indiana, and had long been one of the top shopping center developers in the United States.
In 1996, Simon DeBartolo Group was created when Simon Property merged with former rival DeBartolo Realty Corp. This was shortly after DeBartolo Realty became a publicly traded company encompassing the shopping mall interests of the Edward J. DeBartolo Sr.
family, another leading developer. Simon DeBartolo rapidly acquired assets in the then-fragmented industry. Notable acquisitions included The Retail Property Trust and a group of properties held by IBM
's pension plan in 1997 and Corporate Property Investors
(CPI) in 1998. Following the CPI acquisition in 1998, the company announced it was reverting to its original name, Simon Property Group, as the DeBartolo family was resuming its private real-estate development operation, while retaining their interest in Simon.
Simon continued to be a prolific acquirer of shopping centers, including a portfolio from New England Development in 1999, several prime properties from Rodamco North America in 2002 (including Houston Galleria
in Houston, Texas
and SouthPark Mall
) in Charlotte, North Carolina
, several high-profile properties such as Dadeland Mall
, Fashion Valley Mall
, Copley Place
, Fashion Centre at Pentagon City
, and Stanford Shopping Center
, and in 2004, Chelsea Premium Outlets (now simply named "Premium Outlets"). In 2003, Simon became a co-owner of The Kravco Company, which became Kravco Simon. On April 3, 2007, a partnership including Simon agreed to acquire the Mills Corporation
.
In June of 2011, Simon Property Group entered into a partnership with Nintendo to provide complimentary 3DS Wi-Fi hotspots at nearly 200 of its malls.
reported that Simon may acquire its main rival General Growth Properties
, which was operating under Chapter 11 bankruptcy protection. Should GGP be acquired in its entirety, such deal would be worth up to $30 billion. Simon hired property investment firm Cohen & Steers, J.P. Morgan, as well as the Lazard
investment bank and the Wachtell Lipton Rosen & Katz law firm to explore the possibility of acquiring GGP.
On February 16, 2010, Simon announced that it placed a bid on February 8 to acquire General Growth Properties in a deal worth $10 billion. However, the bid was rejected by General Growth twice during the week it was announced. On February 19, 2010, one GGP shareholder filed suit (Young v. Bucksbaum) against the company's board of directors for rejecting Simon's bid, accusing chairman John Bucksbaum and six other board members of breaching their fiduciary duty to GGP's investors. The General Growth board favored an investment offer from Brookfield Asset Management
worth $2.6 billion.
On April 14, 2010, Simon Property Group announced a $2.5 billion equity investment offer which equaled the price per share of Brookfield's offer. Simon claimed that the deal was more favorable to GGP and its equity holders than Brookfield's offer stating that it would eliminate the highly dilutive warrants that GGP would issue to Brookfield, Pershing Square and Fairholme Capital. Simon's offer also includes a co-investment commitment by Paulson & Co worth $1 billion. However, Simon Property Group had not ruled out a full takeover of General Growth; Simon claims that their investment offer would give them more time to work out their differences concerning antitrust issues.
On May 7, 2010, Simon Property Group decided to withdraw its acquisition and recapitalization proposals for General Growth Properties.
, Houston Premium Outlets,Texas, San Marcos, Texas
and Hagerstown, Maryland
. In May 2010, Simon surprisingly acquired Prime Outlets-Puerto Rico in Barceloneta
in which was renamed "Puerto Rico Premium Outlets." However at the time, Simon did not acquire the whole portfolio, excluding Prime Outlet centers at St. Augustine
Florida
where Simon's Premium Outlet mall is already located. The deal was expected to finalize in summer 2010, but there is no word if the remaining Prime Outlet centers would be renamed as Premium Outlets once the transaction is completed.
Finally on August 30, 2010, Simon officially acquired the Prime Retail portfolio of twenty-one outlet malls, including the Barceloneta, Puerto Rico location acquired in May 2010. Three properties are not included which are the indoor St. Augustine, Florida property, and developments at Grand Prairie, Texas and Livermore Valley, California. The acquired properties received Premium Outlet branding just after the completion of the deal.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
commercial real estate company, ranked #1 in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
as the largest real estate investment trust
Real estate investment trust
A real estate investment trust or REIT is a tax designation for a corporate entity investing in real estate. The purpose of this designation is to reduce or eliminate corporate tax. In return, REITs are required to distribute 90% of their taxable income into the hands of investors...
. Simon is a fully integrated real estate company which operates from five retail real estate platforms: regional malls, Premium Outlet Centers, The Mills, community/lifestyle centers and international properties. It currently owns or has an interest in 393 properties comprising 264000000 square feet (24,526,402.6 m²) of gross leasable area in North America, Europe and Asia. The company is headquartered in Indianapolis, Indiana
Indianapolis, Indiana
Indianapolis is the capital of the U.S. state of Indiana, and the county seat of Marion County, Indiana. As of the 2010 United States Census, the city's population is 839,489. It is by far Indiana's largest city and, as of the 2010 U.S...
and employs more than 5,000 people worldwide, it is publicly traded on the NYSE under the symbol SPG and is part of the S&P 500
S&P 500
The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock...
.
History
Simon Property Group was formed in 1993 when the majority of the shopping center interests of Melvin Simon & Associates became a publicly traded company. Melvin Simon & Associates, owned by brothers Melvin SimonMelvin Simon
Melvin Simon was an American businessman and film producer, who co-founded the largest shopping mall company in the United States, the Simon Property Group, with his younger brother, Herbert Simon....
and Herbert Simon, was founded in 1960 in Indianapolis, Indiana, and had long been one of the top shopping center developers in the United States.
In 1996, Simon DeBartolo Group was created when Simon Property merged with former rival DeBartolo Realty Corp. This was shortly after DeBartolo Realty became a publicly traded company encompassing the shopping mall interests of the Edward J. DeBartolo Sr.
Edward J. DeBartolo Sr.
Edward John DeBartolo, Sr. was an American businessman who is widely regarded as the father of the American shopping mall...
family, another leading developer. Simon DeBartolo rapidly acquired assets in the then-fragmented industry. Notable acquisitions included The Retail Property Trust and a group of properties held by IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
's pension plan in 1997 and Corporate Property Investors
Corporate Property Investors
Corporate Property Investors was a privately held real estate investment company that, in 1982, wrote the largest mortgage to date on a New York office building...
(CPI) in 1998. Following the CPI acquisition in 1998, the company announced it was reverting to its original name, Simon Property Group, as the DeBartolo family was resuming its private real-estate development operation, while retaining their interest in Simon.
Houston Galleria
The Galleria, stylized theGalleria, is an upscale mixed-use urban development centrally located in the Uptown District of Houston, Texas, United States. The development consists of a retail complex, as well as the Galleria Office Towers complex, two Westin hotels, and a private health club...
in Houston, Texas
Houston, Texas
Houston is the fourth-largest city in the United States, and the largest city in the state of Texas. According to the 2010 U.S. Census, the city had a population of 2.1 million people within an area of . Houston is the seat of Harris County and the economic center of , which is the ...
and SouthPark Mall
SouthPark Mall (Charlotte, North Carolina)
SouthPark Mall is an upscale shopping mall located in Charlotte, North Carolina. With , SouthPark Mall is the largest mall in Charlotte and the Carolinas. It is the 10th largest on the East Coast and is the 28th largest in the United States. The area around SouthPark Mall is the most congested...
) in Charlotte, North Carolina
Charlotte, North Carolina
Charlotte is the largest city in the U.S. state of North Carolina and the seat of Mecklenburg County. In 2010, Charlotte's population according to the US Census Bureau was 731,424, making it the 17th largest city in the United States based on population. The Charlotte metropolitan area had a 2009...
, several high-profile properties such as Dadeland Mall
Dadeland Mall
Dadeland Mall is a large enclosed shopping mall located in the Miami suburb of Kendall, Florida, in the Dadeland district. The mall, originally developed by the Joseph Meyerhoff Company of Baltimore, opened October 1, 1962 as a , open-air complex of sixty stores and services...
, Fashion Valley Mall
Fashion Valley Mall
Fashion Valley Mall is an upscale, open-air shopping mall in Mission Valley in San Diego, California. The shopping center has over 1.7 million square feet of leasable floor area, making it the largest mall in San Diego and one of the largest in California. It is owned and managed by the Simon...
, Copley Place
Copley Place
Copley Place is an enclosed shopping mall, constructed in 1983, located in the Back Bay section of Boston, Massachusetts. It is owned by Simon Property Group, which acquired it in the 2002 breakup of the then-Dutch owned Urban Shopping Centers, Inc...
, Fashion Centre at Pentagon City
Fashion Centre at Pentagon City
The Fashion Centre at Pentagon City, also known as Pentagon City Mall, is an upscale shopping mall in Arlington, Virginia. It is situated in the Pentagon City neighborhood on the lower levels of the Washington Tower office building, former home of MCI's Consumer Markets headquarters, near...
, and Stanford Shopping Center
Stanford Shopping Center
Stanford Shopping Center is an upscale open air shopping mall located on El Camino Real at Sand Hill Road in Palo Alto, California. It is on the campus of Stanford University although the university only owns the land and not the actual buildings or stores...
, and in 2004, Chelsea Premium Outlets (now simply named "Premium Outlets"). In 2003, Simon became a co-owner of The Kravco Company, which became Kravco Simon. On April 3, 2007, a partnership including Simon agreed to acquire the Mills Corporation
Mills Corporation
The Mills Corporation was a publicly traded real estate investment trust headquartered in Arlington, Virginia, United States, acquired on April 3, 2007 by an investment group composed of Simon Property Group and Farallon Capital Management. The company developed, owned, and operated major...
.
In June of 2011, Simon Property Group entered into a partnership with Nintendo to provide complimentary 3DS Wi-Fi hotspots at nearly 200 of its malls.
General Growth Properties
On November 19, 2009, Financial TimesFinancial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
reported that Simon may acquire its main rival General Growth Properties
General Growth Properties
General Growth Properties, Inc. is a publicly traded real estate investment trust in the United States. It is based in Chicago, Illinois at 110 North Wacker Drive, a historic building designed by architectural firm Graham, Anderson, Probst & White...
, which was operating under Chapter 11 bankruptcy protection. Should GGP be acquired in its entirety, such deal would be worth up to $30 billion. Simon hired property investment firm Cohen & Steers, J.P. Morgan, as well as the Lazard
Lazard
Lazard Ltd is the parent company of Lazard Group LLC, a global, independent investment bank with approximately 2,300 employees in 42 cities across 27 countries throughout Europe, North America, Asia, Australia, Central and South America...
investment bank and the Wachtell Lipton Rosen & Katz law firm to explore the possibility of acquiring GGP.
On February 16, 2010, Simon announced that it placed a bid on February 8 to acquire General Growth Properties in a deal worth $10 billion. However, the bid was rejected by General Growth twice during the week it was announced. On February 19, 2010, one GGP shareholder filed suit (Young v. Bucksbaum) against the company's board of directors for rejecting Simon's bid, accusing chairman John Bucksbaum and six other board members of breaching their fiduciary duty to GGP's investors. The General Growth board favored an investment offer from Brookfield Asset Management
Brookfield Asset Management
Brookfield Asset Management Inc. is a Toronto, Ontario-based asset management company that manages a global portfolio of assets valued at over $150 billion...
worth $2.6 billion.
On April 14, 2010, Simon Property Group announced a $2.5 billion equity investment offer which equaled the price per share of Brookfield's offer. Simon claimed that the deal was more favorable to GGP and its equity holders than Brookfield's offer stating that it would eliminate the highly dilutive warrants that GGP would issue to Brookfield, Pershing Square and Fairholme Capital. Simon's offer also includes a co-investment commitment by Paulson & Co worth $1 billion. However, Simon Property Group had not ruled out a full takeover of General Growth; Simon claims that their investment offer would give them more time to work out their differences concerning antitrust issues.
On May 7, 2010, Simon Property Group decided to withdraw its acquisition and recapitalization proposals for General Growth Properties.
Prime Outlets
On December 8, 2009, Simon Property Group was offered the sale Prime Retail's Prime Outlets portfolio for $2.24 billion that includes centers at Williamsburg, VirginiaWilliamsburg, Virginia
Williamsburg is an independent city located on the Virginia Peninsula in the Hampton Roads metropolitan area of Virginia, USA. As of the 2010 Census, the city had an estimated population of 14,068. It is bordered by James City County and York County, and is an independent city...
, Houston Premium Outlets,Texas, San Marcos, Texas
San Marcos, Texas
San Marcos is a city in the U.S. state of Texas, and is the seat of Hays County. Located within the metropolitan area, the city is located on the Interstate 35 corridor—between Austin and San Antonio....
and Hagerstown, Maryland
Hagerstown, Maryland
Hagerstown is a city in northwestern Maryland, United States. It is the county seat of Washington County, and, by many definitions, the largest city in a region known as Western Maryland. The population of Hagerstown city proper at the 2010 census was 39,662, and the population of the...
. In May 2010, Simon surprisingly acquired Prime Outlets-Puerto Rico in Barceloneta
Barceloneta
Barceloneta may refer to:*Barceloneta, Puerto Rico, municipality in Puerto Rico.*Barceloneta, Barcelona, beach and a neighborhood in the Ciutat Vella district of Barcelona, Spain**Barceloneta...
in which was renamed "Puerto Rico Premium Outlets." However at the time, Simon did not acquire the whole portfolio, excluding Prime Outlet centers at St. Augustine
St. Augustine, Florida
St. Augustine is a city in the northeast section of Florida and the county seat of St. Johns County, Florida, United States. Founded in 1565 by Spanish explorer and admiral Pedro Menéndez de Avilés, it is the oldest continuously occupied European-established city and port in the continental United...
Florida
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
where Simon's Premium Outlet mall is already located. The deal was expected to finalize in summer 2010, but there is no word if the remaining Prime Outlet centers would be renamed as Premium Outlets once the transaction is completed.
Finally on August 30, 2010, Simon officially acquired the Prime Retail portfolio of twenty-one outlet malls, including the Barceloneta, Puerto Rico location acquired in May 2010. Three properties are not included which are the indoor St. Augustine, Florida property, and developments at Grand Prairie, Texas and Livermore Valley, California. The acquired properties received Premium Outlet branding just after the completion of the deal.
Capital Shopping Centres
At the end of 2010 Simon Property Group attempted to acquire UK based retail investment group Capital Shopping Centres (CSCG), after CSCG agreed a deal with Peel Group to acquire the Trafford Centre. This offer was later declined by Capital Shopping Centres shareholders in an EGM, with their Shareholders, many of whom are South African, voting instead for the deal with the Peel Group.See also
- Shopping property management firms