Simon Property Plans $2B Retail Development Pipeline

Bisnow reports that Simon Property Group is ramping up development activity as the retail REIT enters a new leadership era under CEO Eli Simon. During his first earnings call since succeeding longtime CEO David Simon in March, Simon outlined a pipeline that includes more than $2B in near-term projects and another $3B in future redevelopment opportunities.

The Indianapolis-based mall owner said its pipeline comes as retail fundamentals remain unusually tight. Just 4.7M SF of retail space delivered nationally in Q1 2026, while retail availability stayed below 5%, according to comments made during the earnings call.

A Leadership Transition With Expansion Plans

Eli Simon stepped into the CEO role following the death of David Simon, who led the company for decades and helped shape Simon Property into the country’s largest mall owner. Simon told analysts the company remains in “business as usual” mode despite the leadership change, with management focused on executing existing strategy and expanding redevelopment activity.

The company’s development strategy centers less on traditional ground-up malls and more on repositioning existing properties. Simon said many projects involve converting vacant anchor boxes into higher-performing retail, restaurant, hotel, or multifamily uses.

The Development Pipeline

Simon Property Group currently has more than $1B in projects under construction and another $1B that could begin construction before year-end, according to management. Beyond that, the REIT identified roughly $3B in additional projects that may move forward over the next several years.

Executives said the projects will largely be funded internally through cash flow generated by the company’s existing portfolio. Simon also noted the company’s redevelopment potential extends beyond the announced pipeline because it does not yet control all adjacent parcels needed for some future expansions.

Operational performance continues to support that investment strategy. Portfolio occupancy at Simon malls and premium outlets reached 96% in Q1 2026, while rents climbed more than 5% year over year to nearly $62 per SF. Tenant sales also rose nearly 12% to $819 per SF for the trailing 12-month period ending March 31.

Gen Z And Luxury Shoppers Fuel Mall Demand

Simon executives pointed to luxury consumers and Gen Z shoppers as key drivers behind recent sales growth. CFO Brian McDade said the REIT has actively marketed to Gen Z consumers for more than two years as younger shoppers continue to show a preference for in-person retail experiences.

That trend aligns with findings from ICSC, which reported that Gen Z consumers visit physical stores at roughly the same frequency as baby boomers and more often than millennials or Gen X shoppers. The strong consumer demand is also helping support Simon’s leasing momentum and higher FFO expectations as the company continues pushing occupancy and rent growth across its portfolio.

Leasing activity also remained strong during the quarter. Simon signed more than 1,100 leases totaling 4.7M SF, with roughly one-quarter representing new deals rather than renewals. Management said it could likely push occupancy as high as 97% to 97.5%, but the company prefers to stay selective with remaining space availability.

Why It Matters

Simon Property’s development push highlights how major mall owners are leaning into redevelopment instead of new construction as retail supply tightens nationwide. According to Cushman & Wakefield’s 2026 retail market data, new retail deliveries remain near historic lows, giving established owners more pricing power and flexibility to reconfigure aging centers.

The strategy also reflects a broader shift toward mixed-use retail environments that combine shopping with apartments, hotels, dining, and entertainment. For large REITs like Simon, redeveloping existing land holdings can generate higher returns than building entirely new retail projects.

What’s Next

Simon Property raised its full-year FFO guidance following stronger-than-expected Q1 results and increased its quarterly dividend more than 7% year over year to $2.25 per share. The REIT also repurchased $175M in stock during the quarter.

Investors will likely watch how quickly Simon converts its broader $3B redevelopment pipeline into active construction starts, particularly as retailers continue expanding footprints despite limited new supply. The company’s ability to sustain rent growth and maintain occupancy above 95% could determine how aggressively it pursues future mixed-use expansion projects.