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Simon Property plans to lift Saks Off 5th rents on vacated space
The mall REIT expects to raise rent by more than 144% on 1M square feet vacated by Saks Off 5th, turning $18M of prior rent into about $44M under new leases.
Simon Property Group said the loss of Saks Off 5th stores is set to boost its results, with plans to increase rents on about 1M square feet of mall space vacated by the retailer, according to Bisnow.
Before Saks shut nearly all of its Saks Off 5th locations following a Chapter 11 filing, Simon collected $18M in rent from the space. CEO Eli Simon told analysts the REIT will basically take that $18M and turn it into $44M, with rents expected to rise by more than 144% on the vacated area.
Simon reported that occupancy at its malls and premium outlets held at 96% at the end of the second quarter, unchanged from Q1, even with the 1M square feet left empty by Saks closures. The company also said initial base rent from new leases rose 17% year over year through the second quarter, and it has filled about half the vacated space, already recouping more than the $18M it lost.
Simon said the remaining vacated space is under discussion and near final deals. It also cited stronger leasing demand, plus increased traffic and retailer sales growth, as drivers of performance, with net operating income from North American properties up 8.5% to $1.5B in the second quarter and NOI up 7.6% to nearly $3B for the first half of 2026, while its retail segment posted an almost $53M net operating loss during the first half.