Summary: OVERPRICED
Score: 8/20
MOS: -177%
Share Price: $64
Sticker Price: $23
Is Simon Property Group a good buy?
What does the future of shopping malls look like? The real estate owners of malls are feeling the pain of vacancies and one of the biggest companies feeling that pain is Simon Property Group.
Simon is an American commercial real estate company, the largest retail real estate investment trust (REIT), and the largest shopping mall operator in the US. Simon operates five retail real estate platforms: regional malls, premium outlet centers, The Mills, community/lifestyle centers and international properties. It owns or has an interest in more than 325 properties comprising approximately 241,000,000 square feet of gross leasable area in North America and Asia. The company is headquartered in Indianapolis, IN and employs more than 5,000 people.
Recent news from Maslive.com has said more than a dozen Massachusetts malls could be converted in Amazon distribution centers. Amazon is specifically looking at vacant “anchor” stores including Sears and JCPenney.
This could be a big win for SPG. Although the deal with Amazon isn’t final, it’s certainly a great sign.
Due to the impact of COVID-19, commercial real estate companies need to get creative. How should they re purpose their empty space? The pending deal with Amazon may just be the tip of the iceberg. Other creative partnerships may come about in the coming months.
At the moment, the score of 8/20 makes this stock too risky. But, we should keep this stock on our watchlist. The evolution of commercial real estate is worth paying attention to.
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