Simon Property Group (SPG) Q2 2026 earnings call transcript

Thank you, Sherry, and thank you for joining us this evening. Presenting on today's call are Eli Simon, Chief Executive Officer, President and Chief Operating Officer, and Brian McBain, Chief Financial Officer. A quick reminder that statements made during this call may be due forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Report Act of 1995, and actual results made differ materially due to a variety of risks, uncertainties, and other factors. We refer you to today's press release and our SEC files for a detailed discussion of the risk factors relating to those forward with this data. Please note that this call includes information that may be accurate only as of today's date.

Reconciliations of non-GAAP measure measures and the most directly comparable GAAP measures are included within the press release and the supplemental information in today's Form 8K Both the press release and the supplemental information are available on our IR website at investors. simon. com. Our conference call this evening will be limited to one hour. For those who would like to participate in the question and answer session, we ask that you please respect the request to limit yourself to one question.

May I please introduce Eli Simon.

Good evening. We delivered excellent financial and operational results in the second quarter. Domestic property NOI and real estate FF growth accelerated in the quarter to 8.5% and 7.9% respectively. This was driven by continued leasing demand, disciplined execution across all platforms, and contributions from recent acquisitions. Shopper traffic accelerated in the quarter, and retailer sales volume again grew solidly year over year. further evidence that our portfolio is well positioned our properties of the places where shoppers and tenants want to be and with our recently declared dividend we'll have paid out over 50 billion dollars to shareholders since becoming a public company tenant demand continues to be widespread with no slowdown drawing from a broad mix of established and emerging retailers across categories, platforms, and geographies.

During the second quarter, we signed more than 1,200 leases totaling over 4.8 million square feet. The number of new deals signed in the quarter increased more than 20% compared to last year, and new deals represented approximately 28% of total lease square feet. Year-to-date through the second quarter, initial base minimum rent per square foot on new deals is up 17% year-over-year, while tenant allowance per square foot on new deals is down 12% year-over-year. We have completed more than 87% of our 2026 expirations and are ahead of where we were at this time last year as we continue to negotiate 2027 and 2028 expirations with many tenants. The pipeline of prospective deals continues to build, remaining well ahead of last year's pace, reflecting continued broad-based tenant demand.

Moving on to retailer sales, malls and premium outlets were $838 per square foot, up 13.9%. Importantly, total sales volume increased 6.6% over the trailing 12 months and 7.6% in the quarter, with comparable sales growth of 5.7% for the second quarter. We continue to host niche activations that highlight the incredible value our portfolio offers. Our fifth annual National Outlet Shopping Day produced another year of shopper traffic and retailer sales growth.

Along with a more than 25% increase in retailer participation compared to last year, with Simon Plus members enjoying exclusive rewards tied to the event. We also built on the momentum around the World Cup, running a coordinated activation strategy across our portfolio that features fan experiences, watch parties, retailer collaborations, and community programming. The shopper and retailer response to these types of events underscores Simon's offering, the ability to turn major moments into large-scale, real-world experiences that bring our consumers, brands, and communities together.

Turning now to development and redevelopment activity. At the end of the quarter, we had development projects underway across all platforms, with our share of the net cost totaling $1.07 billion at a blended yield of 9%. Approximately 50% of the net cost is for mixed-use projects.

Looking ahead, we expect projects representing more than $600 million of additional net cost to start construction the second half of this year. Our development pipeline remains robust with over $4 billion of projects, which we believe will generate attractive returns, enhance our properties, and support long-term growth in cash flow, FFO, and dividends per share. This is consistent with the results we have achieved on similar recently completed projects, such as Southdale Center in Edina, Minnesota, Brea Mall in Orange County, and Briarwood Mall in Ann Arbor, Michigan. Over the last four years, we have also committed more than $400 million to center enhancements that are either completed, underway, or recently approved, including common area upgrades, landscaping, lighting, and other amenities, creating a more elevated shopping experience.

These enhancements are noticed and appreciated by our customers, and particularly by our retailers, who value a landlord committed to the long-term success of their stores and the communities we serve. We remain focused on these enhancements alongside our broader development activity, and our balance sheet allows us to continue reinvesting in our portfolio for years to come.

With that, I'll turn it over to Brian, who will review our financial results from the second quarter in more detail and provide an update on our outlook for the remainder of the year.

Thank you, Eli. Real Estate FFO was $1.25 billion or $3.29 per share in the second quarter compared to $1.15 billion or $3.05 per share in the prior year period, an increase of 7.9%. Domestic and international operations both performed well and contributed 29 cents of growth, driven by increased lease income, disciplined cost management, and contribution from acquisitions. As anticipated, higher interest expense and lower interest income combined were a six-cent drag year-over-year. The reported FFO was $3.12 per share in the second quarter compared to $3.15 per share in the prior year period, which included a 21 cent per share non-cash after-tax pain primarily due to Catalyst Brand's deconsolidation of Forever 21.

Domestic property NOI increased 8.5% year over year for the quarter and 7.6% for the first half of the year. Approximately 120 basis points of growth for both the second quarter and first half of the year were attributable to our acquisition of the remaining 12% interest in CRG.

Portfolio NOI, which includes our international properties as constant currency, grew at 8.3% for the quarter and 7.5% for the first half of the year.

Malls and premium outlets occupancy at the end of the second quarter was 96%, flat compared to the first quarter and year over year. a result that reflects the depth of retail demand as he absorbed approximately 1 million square feet of retailer bankruptcy related space returned during the quarter and successfully successfully relapsed the mills occupancy was 98.8% average basement of rent for the malls and premium outlets increased 6.3% year over year while ADR for the mills increased 12.3 percent occupancy cost at the end of the quarter was 12 and a half percent shifting to return of capital today we announced our dividend of two dollars and 25 cents per share for the third quarter an increase of 10 cents or 4.7 percent year over year the dividend is payable on September 30th to shareholders of rent as of the record During the second quarter we repurchased approximately 793,000 shares of common stock and approximately 238,000 limited partnership units for a $211 million investment at an average purchase price of $2.205.10 per share.

On to the balance sheet. During the quarter we completed eight secured loan transactions totaling 1.4 billion at a weighted average interest rate of 5.36%. We issued 500 million euros of senior notes at a 3.65% rate for five years and we closed on a 460 million dollar five-year term loan priced at SOFR plus 70 basis points the proceeds of which were used to repay 460 million drawn under our revolving credit facility. We ended the quarter with approximately 9.3 billion in liquidity and our balance sheet remained incredibly robust with net debt even up below 5.0 times and fixed charge coverage of 4.7 times. This supports our strategy and our continued execution.

Finally, on to 2026 guidance. Given our results for the first half of the year and our current view for the remainder of the year, we are increasing our full year 2026 real estate SSO guidance to a range of $13.20 to $13.30 per share. That compares to $12.73 last year and is an 8 cent increase at the midpoint compared to the range previously provided. Thank you and we are now available for your questions.

Sure. So thanks for the question, Caitlin. So I think when I think about the – let's just talk about TIs first. That's a function of demand for the tenants and demand for the space and the supply of an available space. The reality is we're having a ton of conversations with retailers. Our pipeline today is up 26%, I think it is, so it's time last year, which is over 100 more deals. And when we have those conversations, rent's a component of it and TA's a component of it. And there are certain times where it might be a tenant that we want to start a new relationship with, but we're concerned potentially about the credit or about their long-term viability.

And so maybe we'll say, yeah, maybe it doesn't make sense to pay as much of the TA as what we might pay for someone else. We're more certain about what the performance could be. So I think it's really a function of mix over the long run. But the reality is supply and demand shows itself in two ways. It shows itself in rent growth, and it shows itself in TA. You know, stepping back as you look at funds available for distribution more broadly, I think for the year we're up 9% or over 9% year to date. You know, it's a focus of ours, right? Our focus is to grow cash flow growth and part of the cash flow growth is from the FFO and part of it is from the capital.

We spent, but what I do want to highlight or reiterate, which I said on the call or in that prepared remarks, is we are reinvesting back into our centers in a big way, and that is noticeable from the consumers and really from the retailers. And I've been to, I don't know, I think I've been to 12 states in the last three weeks and seen a bunch of our properties where we have done these transformations. And what I've seen is new leases being signed there, new retailers coming to these centers because they see a landlord that is reinvested into that space. and when you ask the general manager what's the customer perception been, they say, well, we've had people come up with that and realize this center was still here this center was still thriving so our job is to continue to reinvest back into our centers and to make them better from the customer perspective and from our retailer perspective But our job overall is to grow cash flow growth, grow dividends per share, and make our centers better.

And sort of we throw it all into the calculus. And I think the results have been obviously very impressive so far, and we're looking forward to the future. Thank you.

Sure. So if you look at year-to-date, I think we've signed new leases at $78 more or less. And, you know, but what you have to focus on those leases coming due is a large number of them will renew. They're great tenants. We have great relations with them. They're important for the center. And our renewal, historically speaking, and that's holding true now, is sort of in the mid-single digits.

And so we'll renew some and we'll replace some if we think that there are better retailers that can perform better and add more to the center. So it's not as simple as saying, you know, the 60, 65 goes to 78. But clearly, if you look at the trajectory of where new leases have been signed, obviously it's a positive story. The supply and demand story is positive. But it's not as simple as just saying take the 60, 65, the 78.

You know, but I think really the focus is what's the right retailer for each space? And, you know, there's no market rent really in our industry or how we think about it. is what's the market rent for that tenant based on how they're going to perform and what they're going to do with the rest of the center. So we think it's a positive story. I don't think it's quite the 65 to 78 in a year, but we look forward to continuing to upgrade the merchandise mix. In the pipeline, I think it's 483 deals, and a similar number of them are new deals or new tenants, as we've done year-to-date, which is 28%. So we feel very good about the timeline, and it's our job to continue to execute and continue to grow it over time.

Sure. So first off on occupancy, I think, you know, it's important to realize that we are at 96% occupied on the malls and outlet portfolio. we got a million square feet space back in mid-May and are at the same occupancy level as we were at the end of the first quarter. I think that's pretty impressive. I think speaks to the strength of the team and the strength of our portfolio. But when I think about the levers of growth, so to speak, occupancy does have a little bit more to go from here. I don't think we'd ever be at 100%. We wouldn't want to be. We want the ability to move around tenants, but there obviously is, you know, a little bit more from here.

I think, honestly, above where we finished last year is the team's goal, and I think we'll achieve that. The other piece, obviously, is re-tenanting, taking out lower performers who obviously pay lower rent and replacing them with new, better tenants that pay more rent, you know, given their increased productivity is obviously a focus. And the last piece is our development pipeline. We have a billion dollars in the ground today. We have hopefully 600 million plus that will be approved and start by the end of the year. We're generating 9% of return on those investments, which is obviously a very healthy number.

And again, when we quote those numbers, that is only on the capital worth spending on those developments. But if you look at what we've done at Southdale, look at what we've done at Brea, look at Briarwood, there's significant benefit to the rest of the center when we do those developments that are not reflecting those returns. And so that's another avenue of growth for us. But it's really continuing to do what we've been doing, which I think we've obviously done a good job so far, but we have more to go. We're going to continue to reinvest into our centers and continue to upgrade the merchandise mix. but there's a lot of factors that go into our growth, but we feel pretty good about where we sit today.

Sure. So the million square feet, basically all of that was the SACS office, right? Obviously a pretty public bankruptcy process that, again, we've leased, right? So we had, you know, effectively no skipping or no excuses for lower occupancy, right? We got back where we are. And again, at the end, it's a lie. We're at 96.3%. So we are above where we were. But if you look at stats, not dissimilar to what we talked about earlier this year, if you look at the boxes in the outlets, they were paying 18 million bucks in rent.

The deals we have signed today are already, which about half the space are already well in excess of that. And the rest are under discussions in near final deals. But we'll basically take the 18 million dollars and turn it into 44 million dollars. The only thing that, you know, I'd say is not reflected in 26, or I guess will be reflected in 26, is that we got those boxes back, frankly, later than we thought we would. We didn't get them back until I want to say it was May 15th or May 16th. And so by the time, you know, again, we hustled, we got a lease assigned, getting a lease assigned now, but that's really going to be a 27 story when those rents start hitting.

But, you know, again, it's a good news story for us. But that's really the vast, vast majority of that million square feet are the SACS office, which, again, not surprising that we got them back. And I think it's overall a good outcome. And the replacements have been, I don't want to use names, I don't know what's been publicly said or not, but great, great retailers, blue chip retailers, a number of expansions, frankly, that might have been elsewhere in the center, wanted more space, some carve-ups, but overall very, very good demand. A lot of them actually had options over who to replace them with, but it turned out to be a good news story for us.

Sure. So we are adding, frankly, across a variety of categories, across all geographies, across all platforms. I would say what is most exciting to me is our new and emerging brands, which are across a variety of sectors, includes technology companies, athleisure, home, jewelry, very big in the Gen Z, the teen consumer. We are adding a ton of new brands there that are, in many cases, unique to the market, unique to our center, and really differentiate one of our properties where we add these types of connectivity to other properties.

And so these brands are coming from online. They're coming from Europe. They're coming from Asia in the beauty space. A number of deals in the beauty space from Asian retailers are coming in the collectible space.

Athe leisure space obviously continues to grow with new entrants. And so that's, you know, very exciting. And when you walk one of our centers, you see something new. You see something that's differentiated. And I think it's resonating with customers. And when we add these types of retailers, we see increased traffic, and not just for the retailers we have, but for the retailers for the rest of the center. And what that's led to, frankly, is if you go and look at some of the legacy players in these spaces where we're adding the new emerging brands, they're reinvesting into their stores. Their stores look so much better. Their merchandise looks better. And it's really a great symbiotic relationship, which we're very proud of.

The other area of focus, I would say, would be in the restaurant space. We continue to upgrade the restaurants and continue to add restaurants. If you look, we have a number of, you know, high-profile developments and redevelopments that have started and will start over the next, you know, call it year or so. We're going to add probably $400 million to $500 million of incremental restaurant sales from some of the biggest names out there on a regional, on a national basis. And so, again, that's something that we can continue to do to create a fresh environment, an exciting environment, an environment that customers want to go to.

So that's really the focus, but the demand is from a variety of categories, a variety of retailers. On the watch list, it's in very good shape. Nothing close to material. Sort of normal course and the extent stuff happens, we handle an ordinary course of business. It's actually an opportunity for us, Greg. It's Friday. The watch list is at a low point, but as we've said now, the recapture of space doesn't provide us opportunity to bring in better merchants.

Thanks, Alex. So I don't know if you have access to my emails, I guess. I have a draft press release that I guess I can say now that will be launched in the next couple of weeks to launch Simon Media Network to really, in a more broad way, take advantage of the first party, you know, customer insights that we are getting. As you said, we have billions of visits a year, probably over $100 billion in our domestic portfolio.

And so there will be an announcement in the coming weeks. But yeah, we think there's a real opportunity here to take sort of our whole ecosystem of, you know, we have obviously our digital footprint with Simon Plus, with ShopSimon, with Simon Search, our in-house screen network. We have over 4,000 screens, the largest footprint of screens, I think, in the world that we continue to invest in. And then now to take the data we going to get into Simon Media Network and create something that really really interesting both for our endemic brands the retailers at our centers but also for non brands who want access to our consumer who has a high intent to shop and to shop and shop a lot.

And so it's something we are focused on. I don't know about the 200 to 800. I hope it's that. I hope it's more than that, frankly, but it's a business that's growing at double digits, mid-teens percent year over year. We're investing into it. We're adding screens. We're adding touch points at our centers. One is because we can make a really good return and have a one to two year payback period. But two is I think it looks good, frankly. I think when it's done right, I think it adds to our centers. We have our digital directories allowed to search for real-time inventory through Simon Church at our center, which gets great usage. And so it's something that we are focused on, I'm focused on.

We think there's a really big opportunity here. Clearly, malls, retail centers at large are having a cultural moment. People realize that they're not going away. Young people want to hang out here.

And there's an opportunity to, I think, really take advantage of that because we can provide to people who are looking to advertise something that really nobody else can. And so we're focused on it. Again, I don't know when we think about this over the long term, but we think there's tremendous opportunity to really grow this business. And obviously it's a great business today, but we really do think that there's an opportunity to make this business much bigger over time.

Thank you.

Sure. So on the retention side, it's a space-by-space decision, you know, that has so many different factors that go into it. It's a relationship with the tenant.

It's do we, you know, what's the replacement? And not just rent, but are they adding to the center? it's a complicated story, but it's something we focus on. The team is obviously very focused on downtime, right? We still are running. Yes, for long-term growth, we also have to focus on cash flow in the intermediate term as well.

So I wouldn't say it's materially changing, but to the extent that we think there's an opportunity to replace a tenant with someone who is going to perform better and add more to the center, add more traffic, and then obviously the rent would be higher as well, we'll look to do it. But it's not like we're going and making a blanket assumption or a blanket call on that. It's really space by space, tenant by tenant, center by center is how we think about that.

On the snow, yeah.

Juan, we're still trending around 310 basis points of signed but not open. And really that got backfilled by the million square feet of leases. So that's the only leases we backfilled with some of the work we've been doing since we captured the SACS outlet business.

Sure, Paul. So it's definitely broader than the top 50, right? It's a pretty broad story. Frankly, the sales trends are pretty similar to what we talked about last quarter, that luxury remains very strong on the full price side for sure. On the outlet side too, but most of the – or I would say most, but some of the strength of the luxury are pants that just don't have outlets.

Obviously, the jewelry side, the watch side, that remains very, very strong, continues to grow. No real sign of slowdown there. But if you look at the Junior's brand, which is targeting sort of the Gen Z customer, we've had 16 straight months of positive comps there, which is pretty staggering, obviously, given all the macro noise out there. And if you think about a customer group that could be hit, it would be that group. And that's continued to grow both new retailers or new entrants in that space, but obviously the legacy retailers as well. And so, you know, other trends are still holding. Restaurants, again, are a little bit softer than the rest of the portfolio.

I think maybe that's economic-based, but I think there's also other factors, right? Alcohol sales are down. You know, that's obviously, you know, something we can't control. but the story remains positive. Florida remains very, very strong, from Jacksonville and St. John's, obviously the greater Miami area and Boca, over to Naples, Orlando's remains very strong. Even the panhandle continues to grow.

That's been a good sign. The border's growing now, but a little bit less than the rest of the portfolio, which impacts the outlets more, given that we have more outlets on the borders than full price.

A couple of the better outlets, again, are growing, but a little bit lower than the overall, primarily due to the international travel, which, yes, it came here for the World Cup, but if you look at our Outlet portfolio Vegas is a key component of that, Orlando is a key component of that which obviously didn't have, both didn't have World Comp matches but Orlando also coming off of 12 months of 10 to 15% comp growth so that naturally slowed down a little but the reality is it's a broad day story you know that yes, the luxury is very strong, no doubt, but this is not 10, 15 centers carrying. This is malls, this is outlets, this is mills.

They're all positive comping and traffic's up across all of them too. So that's a good news story. It's obviously back to school, has hit probably two thirds of the country right now and in the remaining part as we speak. And so that's good news. And then we look to the holiday season from there.

Thanks, Dylan.

Sure. So we were as excited, more excited, continue to be excited, all of the above on TRG. So the EBITDA margin, you've increased the EBITDA margin on those assets that we managed. I remember there's a few of the assets that we don't manage as part of the portfolio. But the assets that we manage, we've increased the margin by 300% this year.

And I would say there's probably another couple hundred basis points. Sorry, 300 basis points. There's another couple hundred basis points to go. And that's everything from, you know, purchasing, you know, contracts, It's a parking, it's marketing, and sort of you name it, we're focused on it. Every dollar, we're incredibly focused on it. From a comp perspective, the 120 basis points Brian talked about, that's just surely we added 12% additional ownership. So that goes away in the next two quarters. And then that doesn't, you know, that obviously goes away, right? Because then we both, and then we'll have the remaining interest for over a year. Obviously, you get the deal at the end of October, so that narrows as the year goes on.

But we think there's a lot of upside over time. And again, we did not make that deal for the, you know, for the next year, for the next quarter. We made that deal for the long term to own really, really, really good assets. and then to do what we do, which is upgrade the merchandise mix, reinvest into them. We have some really exciting stuff going on at Green Hills that hopefully we can announce sooner than later, putting a significant amount of money into that center, both on a renovation, adding great, great tenants, really changing that center sort of like what we did with Southdale and Edina, but in, you know, one of the best, if not the best market in the country.

You know, International Plaza putting, you know, significant renovation to start soon. Cherry Creek, we just, you know, finalized our renovation plans there to continue to make the best asset in the market better. So it's a long-term story for us. The additional contribution from the 12% obviously goes away soon, but we look for those properties to have significant runway for growth into the future. We're very happy and we're very excited about the opportunity with those assets.

Hey, Mike. This is Brian. You know, we're focused as always on our balance sheet and preserving our liquidity. You know, we're active across a variety of markets. We've done two deals in Europe in the past quarter, certainly looking around the globe for interest opportunities. We've not yet accessed yen funding, but that's certainly what we're considering. There's a variety of other capital markets executions that are up there. So we have flexibility. Certainly, credit spreads are incredibly tight, obviously pricing off a higher base rate. But ultimately, there is plenty of capital in the world today to refinance our debt. but certainly we're still going to be up against a raising interest rate environment or a higher interest rate environment you know the beginning of the year we're going to be guided towards 25 to 30 cents of negativity of interest expense on this year we're about 10 cents into it so we've got about 20 cents to go for the balance of the year and that's under current interest rate kind of market environment and then we headed to next year to your point so you know we certainly are are being proactive about our interest expense and managing it appropriately.

Sure. So there's definitely opportunity. It's something we're always focused on. The great thing about the balance sheet that Brian mentioned is that we can do and will do all of the above. So to do development and continue to reinvest into our properties, we'll continue to evaluate buying back stock. We still, you know, love to own more of what we own, I guess is the best way to say it. And we know the embedded growth profile given that pipeline that you talked about, but we're also not gonna do something just to do it. you know, I think I said this last quarter and it remains true, is we'll buy stuff and look at acquisitions that's creative, that we think we can operate better on our platform, but it has to be at the right price.

And so we're not going to do something just to add scale. I don't think it's the right thing to do, but the reality is we have, you know, $9.3 billion of liquidity. We're in a business or on a balance sheet that's naturally deleveraging based upon our free cash flow generation. And so we'll continue to evaluate and if there are opportunities, the great thing is we know we can execute. We have the team to execute it.

You look at what we did with Brickell last year. we are the our year one yield there is over 100 basis points higher than our underwriting and that's because we bought really, really, really good real estate at a good price and also because we're operating it, we're leasing it very well and we're laser focused on it. So we'll continue to do transactions like that to the extent that they are out there, but we're not going to chase stuff. If others want to chase stuff, that's fine, but we love our portfolio. We love the assets we own. We'll continue to reinvest in them and continue to make those assets better. And if there are opportunities or when there are opportunities, we're ready to go and we can move quick and then add value that way.

But we look at it and we've grown NOI four plus percent for the last four or five years now, I guess. You know, we have a billion dollars in the ground in development. We have four billion behind it and much, much more behind that that we're actively working on sort of the, you know, shadow part two, I guess.

So we are, we're focused. We look to continue to grow cash flow, but we're going to do it smartly. and we're going to do it by adding great assets over time.

And, you know, if nothing is out there that we can transact on, that's fine. We'll do what we do and grow the cash flow of the existing assets.

Sure. So I would say we've seen no signs of a slowdown at all, frankly. In fact, traffic, which we had, traffic accelerated in July. And I don't think anybody asked about traffic, but traffic was up 2%, I think, in the quarter and 3.6% in July. good numbers so I feel like we should say it but you know so we have not seen any change in sales I would say that sales are the one thing that we cannot control obviously there's a lot of macro factors geopolitical political political right with the you know with an election in a couple of months that are out of our control.

And so I would say when we think about the guidance, I think it's fair to say that if the sales trends continue, we'll be above the range we guide.

But the reality is it's very hard to know how sales are going to perform. Clearly overage and sales-based rent is back-end weighted, obviously, as you go towards the holiday season.

And so the guidance effectively assumes a slowdown. If it stays like this, then we obviously will be above that range. But we don't really feel comfortable guiding the same growth just because it's something we can't control. We control leasing. We control how we manage expenses, but we can't control sales. And so although there's nothing that we've seen that would suggest the slowdown diminut, we thought it was prudent to die with some sort of sales moderation. But again, very strong numbers.

If you look at the six months, it's 6.3% comp growth. That's obviously very good. and there are tougher comps in the back half of the year. The malls, you know, really started their, you know, more positive upward trajectory this time last year. So there is a bit tougher comps too that we will see, but we are, you know, hopeful that the, you know, consumer is, you know, shown to be resilient.

Obviously, a stock market being at or near record highs, you know, is not insignificant, but that's sort of, I guess, the best way to summarize sales. I don't know, Brian, anything?

I think you covered it well, Eli. Ultimately, we would expect if the current conditions continue, that will be a further contribution beyond our New York I this year.

Sure. So I would say the jewelry space, frankly, for jewelry and watches, it's coming from a variety of price points.

It's clearly the luxury, the uber luxury, that's just, you know, there's honestly more demand than supply of those types of items. So that allows prices to go up and the consumer is there. But also there's been a lot of new entrants into the space on sort of more of the, I guess, more affordable price point. So there's a lot of new entrants in the space that we're doing business with that have great-looking stores, attract maybe that younger consumer.

And so it's a category that's important for us. I think, again, these things go in cycles. They change over time. But right now, that is a trend that we see, we're focused on. And so it's, you know, can we continue and expand the relationship and expand the stores with some of the more established players, the players in the luxury space that we have great relationships with and want to continue to do more and more business with. But also there's this new entrance, again, at a different price point, but they're creating really great stores, great environments, you know, that they're focused on, you know, getting that younger consumer in an environment that is, you know, Instagrammable, right, for lack of a better word.

And so it's sort of how we view all of our leases is that we want to go where the consumer goes. And we have a great team. We have boots on the ground across the country. We have a great team that's focused on new and emerging brands. So we go where the customers are and want to give them more of what they want. And so that's really what we're doing in that space.

I think you also see just given the outperformance of the U. S. relative to the rest of the globe, that you continue to see luxury retailers bringing their product here, their newest and greatest product, because this is where the action is. So as long as that continues, we think that the trend line will hold.

Sure. So it's obviously early days. I don't know if it's the first inning, third inning, but it's definitely early days. I would say from the SPG perspective, I think we've made leaps and bounds over the past several months, and there's so much more we can do, so much more we can do with our data.

We're seeing real efficiencies Efficiencies and insights from our, you know, think about it. We have, you know, I don't know, 29, 30,000 different leases, so many different REAs, so many different documents, joint venture documents, loan documents, et cetera. So we're seeing a lot we can do in that space to be quicker, to be more efficient. So much we can do on the marketing front.

Again, we have hundreds of centers, so many different retailers. And so the ability to create imagery that's quicker, that looks better, is meaningful for us. It's early days, and I'd say the retailers, again, you know, same thing, right, from what we're getting, is that everyone's starting the journey, they're focused on it, but it's not a – I don't think there's been a sea change in how anybody's operating. I think it's, you know, just stepping back bigger picture, I think it makes us more bullish on physical real estate, physical retail. I think, you know, we've seen it, the younger cohorts, the most excited to come to the mall, the most excited to shop in the mall, as, you know, individual websites tend to become harder to navigate to.

you know, from individual retailers, the physical real estate, the ability to have their brand representation becomes more and more important. And so that leads to more money being reinvested into the stores, creating a better, more unique experience. So we think it's great for us long-term, you know, but as far as adoption and anything like that, it's obviously early days. And, you know, we do, as I mentioned earlier, with the Simon Media Network, AI will be a big component of that and our ability, you know, to sort through our data better, right, which is a lot, as you can imagine, you know, with, you know, billions of visits a year and hundreds of billions, 100-plus billion dollars in sales.

It's a lot of data, a lot of leases, a lot of tenants. And so there's a lot we can do there to be, you know, with our Simon Media Network and, you know, related entities that's really getting up and running. But, you know, overall we look at this as, you know, as great for us long term. And our job is to continue to make our properties where retailers want to be and where customers want to be. And that's really what we're focused on.

Great. Thanks so much. Thank you. We have reached the end of our question and answer session.

Thank you, everybody, for your questions, and have a great week.

Thank you.