Shares of Simon Property Group SPG have rallied 34.3% over the past year compared with the industry's 22.8% gain.
The company owns a diversified portfolio of premium retail assets in some of the key markets across the United States and globally. Solid demand is driving healthy leasing activity, aiding rent growth. A focus on supporting omnichannel retailing and developing mixed-use assets is encouraging. Accretive buyouts and redevelopment efforts augur well for long-term growth. A healthy balance sheet will likely aid growth endeavors.
Analysts seem bullish on this Zacks Rank #2 (Buy) stock. The Zacks Consensus Estimate for 2026 AFFO per share has been revised marginally northward to $13.17 over the past week.
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Factors Behind SPG Stock’s Price Surge
In an improving leasing environment, Simon Property is poised to benefit from its superior assets at premium locations. For 2025, SPG signed above 4,600 leases for more than 17 million square feet. As of Dec. 31, 2025, ending occupancy for the U.S. Malls and Premium Outlets portfolio was 96.4%. Ending occupancy for the Mills portfolio came in at 99.2%. The company expects to drive higher occupancy for these assets as they execute on its leasing strategy.
Simon Property’s adoption of an omnichannel strategy and successful tie-ups with premium retailers have paid off well in recent years. Particularly, the company’s online retail platform, woven with an omnichannel strategy, looks positioned for its long-term growth. This will eventually augur higher revenue generation for several such brands and drive demand for Simon’s properties. SPG is focused on creating mixed-use destinations. In 2025, mixed-use developments featured additions such as a hotel at Northgate Station and a residential asset at Lakeline Mall.
The company has been restructuring its portfolio, aiming at premium acquisitions and transformative redevelopments. In November 2025, Simon Property acquired Phillips Place, an open-air retail center spanning nearly 134,000 square feet of space, in the heart of the SouthPark neighborhood of Charlotte, NC. The company completed more than 20 significant redevelopment projects in 2025, including retail and experiential additions at Southdale Center, Stanford Shopping Center, King of Prussia and The Forum Shops at Caesars.
Simon Property is making efforts to bolster its financial flexibility. This enabled the company to exit the fourth quarter of 2025 with $9.1 billion of liquidity. As of Dec. 31, 2025, Simon Property’s total secured debt to total assets was 16%, while the fixed-charge coverage ratio was 4.7, ahead of the required level. The company enjoys a corporate investment-grade credit rating of A (stable outlook) from Standard and Poor's and a senior unsecured rating of A3 (stable outlook) from Moody’s. With solid balance sheet strength and available capital resources, it remains well-poised to bank on growth opportunities.
Solid dividend payouts are the biggest enticements for REIT investors, and Simon Property is committed to boosting shareholder wealth. This retail REIT has increased its dividend 14 times in the last five years. Given the company’s solid operating platform, opportunities for growth and a decent financial position compared with the industry, this dividend rate is expected to be sustainable over the long run.
Risks Likely to Affect SPG’s Positive Trend
Growing e-commerce adoption and high debt burden raise concerns for Simon. Macroeconomic uncertainty can result in strain on retailers' balance sheets, leading to bankruptcies.
Other Stocks to Consider
Some other top-ranked stocks from the broader REIT sector are Federal Realty Investment Trust FRT and Kimco Realty KIM, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for FRT’s 2026 FFO per share has been revised northward marginally over the past two months to $7.45.
The consensus estimate for KIM’s 2026 FFO per share has been revised upward marginally to $1.81 over the past two months.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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This article originally published on Zacks Investment Research (zacks.com).