Simon Property Group, Inc.

Operator: Greetings. Welcome to Simon Property Group's First Quarter 2026 Earnings conference call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Tom Ward, Senior Vice President, Investor Relations. Thank you. You may begin. Thomas Ward: Thank you, Sherry, and thank you all for joining us this evening. Presenting on today's call are Eli Simon, Chief Executive Officer, President, Chief Operating Officer; and Brian McDade, Chief Financial Officer. A quick reminder that statements made during this call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially due to a variety of risks, uncertainties and other factors. We refer you to today's press release and our SEC filings for a detailed discussion of the risk factors related to those forward-looking statements. Please note that this call includes information that may be accurate only as of today's date. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included within the press release and the supplemental information in today's Form 8-K filing. 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 1 hour. For those who would like to participate in the question-and-answer session, we ask that you please respect our request to limit yourself to one question. I am pleased to introduce Eli Simon. Eli Simon: Good evening. I want to start by thanking all those who sent kind notes following my father's passing. His impact on our company and our industry is truly powerful. Turning to the quarter. We are off to a very good start for 2026 with first quarter results that exceeded our plan. Occupancy gains, increased shopper traffic and higher retailer sales drove strong cash flow growth in the quarter. reflecting solid fundamentals across all our platforms, the resilience of the consumer and the strength and breadth of tenant demand we have for our centers. Retailer demand remains broad-based spanning new and legacy retailers across a wide range of categories in all of our platforms and geographies. During the first quarter, we signed more than 1,100 leases totaling over 4.7 million square feet. Approximately 25% of our leasing volume in the quarter was new deals. We have completed more than 75% of our 2026 expirations and are ahead of where we were at this time last year. We have a robust and expanding pipeline of deals that are significantly larger than this time last year, reflecting continued demand from a diverse mix of tenants. Now turning to development and redevelopment activity. We have projects under construction at 29 centers with our share of net cost of $1.06 billion at a blended yield of 9%. Approximately 50% of the net cost is for mixed-use projects including approximately 1,200 units of multifamily residential at Brea Mall, Briarwood Mall, and Northgate and more than 400 hotel keys at Northshore Mall, Roosevelt Field and the domain. We also have exciting redevelopment of former anchor boxes underway at Brea Mall, and the Fashion Mall at Keystone, where we'll be adding more productive new retail restaurants, entertainment and fitness uses. We have an additional $1 billion of projects, so we'll have the ability to start construction this year, including new developments, anchor redevelopments and international redevelopments and expansions. Beyond that, we have approximately $3 billion of projects in our pipeline that could start over the next several years. Investments that will make our great centers even better. All of these projects will be funded from internally generated cash flow, and we will maintain our track record of discipline in how we allocate capital, rigorously evaluating each project against our return thresholds. We have complete flexibility in our development pipeline. We can be patient and adjust timing depending on construction costs or market conditions. We can also invest countercyclically, delivering product when others can't. These accretive development and redevelopment activities deliver strong yields, enhance our portfolio and drive long-term growth in cash flow, FFO and dividends per share. Moving on now to retailer sales. Malls and Premium Outlets were $819 per square foot in the quarter, up 11.8%. More importantly, sales growth accelerated. Total sales volume increased 5.6% over the trailing 12 months and 8.8% in the quarter, with comparable sales growth of 6.5% for the first quarter. Our remerchandising efforts are clearly showing through in total sales volumes with strong growth across our portfolio and across categories such as luxury, jewelry, athleisure and juniors. With that, I will now turn it over to Brian who will review our financial results from the first quarter in more detail and provide an update on our outlook for the remainder of the year. Brian McDade: Thank you, Eli. Real estate FFO was $1.2 billion or $3.17 per share in the first quarter compared to $1.1 billion or $2.95 per share in the prior year period, growth of 7.5%. Domestic and international operations both performed well and contributed $0.27 of growth, driven by increased lease income along with disciplined cost management. As anticipated, higher interest expense and lower interest income combined were a $0.05 drag year-over-year. Reported FFO of $2.91 per share includes $40 million or $0.10 per share of accelerated stock compensation expense which reduced real estate FFO by $0.02 per share and other platform investments net of tax by $0.08 per share. Domestic property NOI growth was strong and increased 6.7% year-over-year for the quarter with approximately 120 basis points of that growth attributable to our acquisition of the remaining TRG interests. Portfolio NOI, which includes our international properties at constant currency, also grew 6.7% for the quarter. Malls and Premium Outlet occupancy at the end of the first quarter was 96%, an increase of 10 basis points year-over-year. The Mills occupancy was 99.2%, an increase of 80 basis points year-over-year. Average base minimum rent for the malls in the Premium Outlets increased 5.2% year-over-year and The Mills increased 9.1%. Occupancy cost at the end of the quarter was 12.7%. Shifting to return of capital. Today, we announced our dividend of $2.25 per share for the second quarter an increase of $0.15 or 7.1% year-over-year. The dividend is payable on June 30. Also, in the first quarter, we repurchased approximately 965,000 shares of our common stock for an investment of $175 million at an average purchase price of $181.59. Turning to the balance sheet. During the first quarter, we were active. We completed 10 secured loan transactions totaling approximately $2.3 billion at a weighted average interest rate of 5.25%. We also issued $800 million of senior notes that we used to repay proceeds from to repay our $800 million of notes that matured on January 15. We also amended, restated and extended our $5 billion revolving credit facility at a 15 basis point lower pricing grid, and we ended the quarter with approximately $8.7 billion of liquidity. Subsequent to the end of the quarter, we closed on the refinancing of the Shops at Crystals via a 5-year. CMBS loan that was priced at 4.83%, the lowest retail fixed rate coupon CMBS financing completed over the last 4 years. Turning to Kl pierre exchangeable bonds. During the quarter, we settled the conversion of approximately $174 million of outstanding bonds by exchanging 4.1 million shares of Kl pierre and EUR 79 million of cash. As part of that, we recognized a noncash non-FFO gain of $64 million in the quarter on the exchange of the n Kl pierre shares. Subsequent to the end of the quarter, we settled additional conversions of $374 million of the exchangeable bonds. Following the exchanges, there are approximately $188 million of bonds outstanding that will mature in November. We currently own approximately 59 million shares of n Kl pierre's common stock which represents approximately 20.7% ownership. At the end of the quarter, our balance sheet remains strong with net debt to EBITDA of 5.0x and a fixed charge coverage ratio of 4.6x, supporting our strategy and continued execution. And finally, on to guidance for 2026, given our results for the first quarter and our current view for the remainder of the year, we are increasing our full year 2026 real estate FFO guidance to a range of $13.10 to $13.25 per share. That compares to $12.73 per share last year of real estate FFO and is a 5% increase at the midpoint. Thank you. We are now available for your questions. Operator: [Operator Instructions] Our first question is from Samir Khanal with Bank of America. Samir Khanal: Eli, I guess, as it relates to retailer demand, you mentioned it's very strong, and I assume you have a lot of leverage on negotiations with the tenants here. Maybe talk about the pricing power you have in this environment. I know you spoke about addressing sort of upcoming expirations into '27? So talk about kind of that growth momentum over the next, let's call it, 12 months? Eli Simon: Sure. So first, we don't have any leverage over the retailers. The retailers can go a lot of places. They can open stores, not open stores, go online, go on Amazon. So I would -- really the first part of the question that we have any leverage or real pricing power over the retailers. But I would like, I guess, on the second part, on the pipeline. So the pipeline is significant. And what's interesting is the way I look about it, it's really up across all different categories that we're leasing it today. So that's the legacy brand, that's our new business leasing, which are first to mall, first to our portfolio from either DTC online or from Asia, from Europe, et cetera, Luxury brands, that pipeline is up, restaurants are up and the local and regional business is up. So we're really seeing broad-based demand across all our centers, not just sort of the top fortress centers, but really across the portfolio. And I think I attribute that to the fact that we're making our centers better. We're making them more relevant and the customers, particularly the Gen Z customer wants to come to our centers and you're seeing that in traffic growth, and you're seeing it in the retailer sales. So we're not going to talk about pricing power, have no leverage, but we feel very good about the pipeline and about our conversations with tenants. And then on the future expirations. So I guess a couple of things. One is we are above where we are in our '26 expirations. It's around 200 basis points or so more than this time last year. But what's interesting when talking to the leasing team is retailers are now willing to talk about their '27, '28, '29 expirations, which historically might have been more of a luxury tenant phenomenon who think much like we do in terms of decades, not quarter-to-quarter, but we're actually hearing from legacy retailers in our existing portfolio non-luxury that actually want to start having those conversations because I think they understand this pipeline, too, and the interest in our space. And so we like having those conversations, and I think they've been productive so far. Operator: Our next question is from Caitlin Burrows with Goldman Sachs. Caitlin Burrows: Maybe just big picture, wondering if you could go through considering the leadership transition, do you expect any changes to Simon's strategy and execution? And is there any change to capital allocation priorities between call it, acquisitions, share repurchases versus buyback, the deep redevelopment pipeline and dividend growth? I know you've been active on all fronts recently. Eli Simon: Sure. As far as leadership changes, this is -- we're operating business as usual. We have the best-in-class team and we're continuing to execute on our business plan. So no change there, and everyone is excited for the future and excited to keep doing what we're doing. With regards to capital allocations, we look at all of it always. And I guess I'll just go through the different pieces. And so starting off on our development, redevelopment pipeline, which I mentioned. So the current projects underway is about $1 billion. We have about $1 billion that we'll have the ability to start later this year and then at least $3 billion behind that, that we can start over the next several years. And so we look at that each project on a project-by-project basis, incredibly -- meticulously incredibly detailed, and we evaluate the market conditions at that time, the retailer demand. Do we think it's the appropriate return? And today, we're seeing very good returns there. And doing what we're able to do in this pipeline at 9% plus, we feel very good about adding density, adding mixed uses to our centers, and so we'll continue to do that. But if market conditions change, if costs arise from a construction perspective, we obviously have the ability to stop, to pause this is land we own, and we're going to own forever and so we'll do it at the right time. Next area is acquisitions. Obviously, there's been more transactions in the retail market, which I think overall is great, more capital coming into the sector. When I think about acquisitions sort of -- and I've said this before, but it's 3 key criteria as to make our portfolio better. It has to be brand accretive. It has to be an asset that we can -- or a portfolio that we can add real value, utilize our skills to operate better and it has to be at the right price. And so last year, if you put aside the remaining stake in TRG, we did 3 transactions the mall outlets in Italy, Brickell City Centre. obviously, in Miami and Phillips Place in Charlotte. And all 3 of those hit those criteria and frankly, outperforming even what we thought and are very excited about those future prospects. Next, I guess, you could go to share buybacks obviously, a slightly slower pace in the last quarter. Then a little geopolitical unrest, a little choppiness in the market. And so we are prudent and waited but as we said last year, we issued a little over 5 million shares to do the last 12% of the Taubman transaction, and we fully expect to buy those back. And so I would expect us to continue to be active. But again, if we do it now great. If we wait because we think it's prudent, that's fine as well. And then on the dividend, obviously, the dividend increased. It's been growing at a nice rate. It's something we take tremendous pride in. I'm pretty sure looking at Brian, I think in the third quarter, we should be passing $50 billion paid as a public company, which is a pretty big number. And so that's obviously incredibly important to us. But at the end of the day, if you think about the business, we're generating $1.6 billion or so of free cash flow after dividends. And so we have tremendous opportunities and tremendous things to do with that. And if we continue to naturally deleverage because we don't like the opportunities, that's fine, too, which we've been doing. So I guess that was a long winded -- long-winded way to answer, but really, no change in our capital allocation. We continue to evaluate all ideas and all opportunities, and we'll do what's best at that at any given time, which could be all or could be none. Operator: Our next question is from Michael Goldsmith with UBS. Michael Goldsmith: Eli, you mentioned the resilience of the consumer. What are you seeing from the consumer specifically? Or is there any way that they are changing the way they shop or spend at the centers? And then also, if you have any data on the Gen-Z consumer and how they may be different than some of the other cohorts that would be helpful. Eli Simon: Sure. So I would say the sales growth is really broad-based. right, 6.5% comp for the quarter is a very healthy number. And it's really across category. Clearly, the upper end consumer is doing very well. You could look at the stock market, that should not be a surprise. And so you're obviously seeing that in the luxury business with some of the brands, frankly, that might have been a little bit softer in the past couple of years now having -- starting to see some rebound. But really, you're seeing it in the hard luxury and jewelry and watches, really, really solid growth. But we're also seeing it in the juniors business, which hits that Gen Z customer, both new juniors brands, legacy juniors brands, all really firing on all cylinders. And I think that's an example of competition is great because some of these legacy brands needed to innovate, needed to be able to compete with the new -- with some of these new brands. I was at the Catalyst office, I guess, last week or the week before and Aero, which is now competing with some new entrants in that space are doing new things with new influencers that, frankly, I had no idea who they were. But I think for the customer they're targeting, it's working. And so we are definitely seeing that across the portfolio. The only thing I would say that is a touch softer is on the food and beverage side, which is basically was flat from a comp perspective. And so that's probably not surprising seeing some of the earnings from the restaurant groups out there. But whether it's a trading down effect, maybe one less trip out, that is -- that's the only place we're seeing it, but the rest of it is broad-based growth. Obviously, athleisure is still very strong across the portfolio. The only other thing, I guess, I could say on sales is the tourist markets that really rely on the European and Canadian international traveler. That is a touch softer. If you look at Woodbury, Woodbury, I think, comp was, call it, 2.5% versus 6.6%. That's atypical, right? Woodbury, normally, you would say, is going to be performing well above average. And that obviously is less European international travel into the U.S. and Canadian is a big part of that. But the flip side is you go to Florida, and it is from South Florida, Panhandle, the West side with Tampa and what we have at International Plaza or Waterside in Naples, and obviously, Orlando, which has probably been the best market over the past year, very, very strong growth there. And then on the Gen Z customer, I guess, look out in the future, we have some things coming there. But I think the way I look at it is you can see it in the sales, you can see it in these customers or in these retailers that are targeting. They are all growing. They want more space and their sales are proving that they're resonating with that customer. Brian McDade: Michael, this is Brian. I guess the only thing I would add on the Gen Z customer is they were really the centerpiece of our Meet Me at the Mall campaign that we launched with our marketing team 2 years ago. We identified this as being a growing cohort. And we've been investing. We've been bringing the brands to bear that the Gen Z cohort is looking for. And most of our activations and social aspects are geared towards them as well. And so big lean in from us. It's been about 2 years, and we continue to see great progress with that consumer. Operator: Our next question is from Michael Griffin with Evercore ISI. Michael Griffin: Eli, just curious if you can give us maybe some color on whether it's new or renewal lease spreads and maybe how that compares relative to this time last year? And then if you look at the portfolio right now, north of 96% leased, are we reaching sort of that structural occupancy? Could we see it go to 96.5%, 97%? Just curious if you can give some commentary there as well. Eli Simon: Sure. So on spreads, I think, is not necessarily the most relevant metric. But what I would -- but I would say on renewals, historically, over the last number of years, we're sort of in the mid-single digits increases on renewals, bounces around up and down a little bit from that number depending on what package of renewals is signed in any given quarter. But that's holding true, and we don't see any real change there. And as I said, we're looking at renewals further into the future. retailers are asking us about that. And obviously, we're only going to do those renewals if it makes sense for us as well. On the new deals, what I look at is the new leases we are signing are 20-plus percent, 20%, 25% above new leases last year. And that is -- obviously, there's -- mix is part of that. But really, it's -- the brands understand the importance of having a great physical representation and our centers are that. And so we're proud of that. And the other thing we're probably more proud of, frankly, is what we call our new business brands are outperforming that increase by, call it, another 10% plus on that. So the best of the best brands, whether it's some of these beauty brands coming from Asia, we just opened a Google store at Fashion Valley I guess this weekend. New athleisure brands, new home furnishing brands. We're able to have rents there that they are able to pay because they're doing the business and because they're generating the traffic and they know that it's great for them, and it's going to help their business grow. So hopefully, that answers the first part on spreads. On occupancy, it's interesting. If we wanted to, we could lease up to 97%, 97.5%. I have no doubt about that. But I think for us, we look at this not a metric quarter-to-quarter or even a year-end metric, but really what's the right decision long term for these assets. And so sometimes that might be holding space for another retailer that's coming. It might be taking a little bit of downtime, which, again, we don't like to do, and we have an incredible short-term leasing program that keeps the occupancy at a good number. But we honestly don't focus if it's -- what it's 96% now, 96.4% at the end of the year, if it's 96.2% or 96.6%. That's not what I'm focused on. I'm focused on excluding the Taubman 12%, we grew NOI 5.5% year-over-year, and we've grown it at north of 4% for the last 4 years. So that's more important than 20 basis points on the margin. But the answer is yes. There is room to increase occupancy here, but it's not the be all and end all for us. It's really let's grow cash flow. Operator: Our next question is from Alexander Goldfarb with Piper Sandler. Alexander Goldfarb: Eli, just a question on data centers. You guys in the past year or so have spoken about how the B malls have rebounded strong in centers that a number of years ago, you would have sort of used for cash flow now have a second life because of the demand from retailers and there's a renewed vibrancy to them. But as you look at the demand for data centers and presumably some of your centers have excess power, utilities or what have you, do you see opportunity where whether they're mini data centers or maybe even converting the entire site to data center, do you see it as an opportunity for any of the excess holdings? Or as you look at the portfolio, all the malls because of this lack of supply are really their highest and best uses either as a mall or mixed-use venue? Eli Simon: Sure. So I would say the answer to the first part is probably 18 months ago or so, we really scoured our portfolio, as you said, both the combination of -- again, we don't really use A or B malls, but malls that might have had a lower growth profile or potentially excess land at some other malls to see is there anywhere that makes sense for a data center. We talked to various data center operators. And we couldn't find anything that made sense. And then honestly, the power is less available than you would think, especially, obviously, if it's an existing mall that would stay in place. And so it's something we -- with our team, we look at relatively frequently. But to date, we have not found anything. But to answer the second part, at the end of the day, we're economic animals. And if there is a higher and better use for the data center that we thought we could sell something and take cash and reinvest it elsewhere more accretively, we would do that 100%. We haven't seen that to date. And as you mentioned, we're excited about the growth prospects there. So it's not like we're actively trying to shed any assets in that regard or try to find alternative uses. We are doing what we said we were going to do. If you look at Smith Haven, for example, we signed a very important retailer there and put in capital to renovate. And now we've seen good growth and good demand. So we'll continue to evaluate, but the demand is there from the retailers really up and down the portfolio. And so we will continue to operate. But again, if someone comes and says, here's a big price for an asset and we look at it and say there's a better use of that cash, we won't hesitate to sell. It just hasn't happened yet. Operator: Our next question is from Greg McGinniss of Scotiabank. Greg McGinniss: I was just curious on the integration with Taubman, how that's going, what synergies you're finding and where you see the best opportunities for reinvesting into that platform? That's now your platform? Eli Simon: Great. Thanks for asking that. So I'd say from a corporate integration perspective, it's gone according to plan, effectively fully completed all the corporate integration by the end of April. So that's done, and it was well done by the team. And so we're excited how that turned out. And so now on to the assets, we're honestly probably more excited than we were in November or October, I guess, when we finished. And it's a combination of sort of using our ability to operate centers at a level that increases margin. And that's from an operating expense perspective, that's from a marketing perspective, that's ancillary income, that's parking. Obviously, our short-term leasing program, which I mentioned earlier, to be able to be fully integrated there has been helpful. And then our leasing department able to lease these centers, which, again, obviously, the Taubman team did a great job, but they were leasing these centers for the past 6 years of the transaction. So now we're able to do that. But more importantly or most importantly, I should say, is our ability now with our balance sheet to reinvest into these centers. And that's frankly what I'm most excited about. And so if you look last quarter, I think a day or 2 after earnings, we put out a press release, and I'll just highlight 3 assets briefly that we mentioned, but in Nashville at Green Hills and Tampa at International Plaza and at Cherry Creek in Denver, we're going to invest over $250 million into those centers starting later this year to really make them, again, great assets performing great, tenant sales strong and leasing strong, but to make them even better to freshen them up to make them look the same that the -- fitting as for the performance of the retailers. And so we have renderings that I've shared with some of the retailers, especially the luxury retailers all very, very excited. And so now it's our job to go execute that to sort of take the vision and to do the redevelopments or do the renovations, which we're in the process of starting very soon. And then obviously, to lease to those tenants that we think should be in these centers. And so no different at Green Hills than we did at Southdale and at Edina, Minnesota, which I don't know if you've been up there, but what we did was sort of revitalize the whole mall. And these malls weren't -- are not in the position that Southdale was in. They're in a much better position, but we think we can have an equally strong impact from these programs. International Plaza will be an expansion and probably an outdoor expansion, revitalize Bay Street, which has great restaurants, and we think we can upgrade the restaurant mix. So sort of doing what we've been doing across the rest of our portfolio, now we're able to do it on these great assets. And so it's a big focus of ours sort of a whole of company approach, and that's what we've been telling retailers, and it's true because these assets should be and will be better, and that's something that's very exciting for us. Operator: Our next question is from Ronald Kamdem with Morgan Stanley. Ronald Kamdem: Just wondering if you can provide an update on sort of the other platform investment and some of the retail investments, how they've been performing relative to expectations and your thinking in terms of monetization of that platform. And the follow-up would be, I think part of the thinking was getting a lot of data from the retailers would be valuable. Just maybe can you talk about how that's been sort of helpful in this sort of new age where everybody is focused on AI. Eli Simon: Sure. So I guess if you think about OPI today, it's basically comprised of 3 pieces. It's Catalyst, which is obviously the former SPARC and JCPenney businesses. It's RueLaLa and Gilt, which has Shop Simon in it, and it's Jamestown. All 3 are performing at or above plan for the first quarter of the year. I think the teams -- they all have obviously independent management teams. They're doing great. And so from an operating perspective, I'd say it's business as usual, and they're continuing to execute on their business plans. But again, quarter to -- or year-to-date, they've all been effectively at plan. From a monetization perspective, we're opportunistic sellers. We're not planning on anything. If there's an opportunity and we think it's in the best interest of shareholders, would we do it? Of course. But if not, they're all properly capitalized, have proper liquidity amounts and the ability to run themselves. And so that's what we expect to happen. But if something occurs, that's great, too, and we will not hesitate to monetize if it's in the best interest of shareholders, which obviously we did with our Authentic Brands stake a couple of years ago. As far as data, I'd say less data -- hard data specifically because obviously, you have privacy issues and whatnot with that, but really on best practices and learnings. And if you think about a couple of departments from our marketing department, it's incredibly interesting and our marketing team talks often to the marketing team from Rue La La and Gilt and from Catalyst to learn how they're attracting customers, where they're seeing the most efficacy of their ad buys, whether it's TikTok or Meta or Rue La La and Gilt has big connected TV business, et cetera. And so that's what I would say is we're more focus on. I think it's interesting from a brand perspective, helps us think like a retailer. So for example, the tariff situation, we're able to understand how Catalyst, which is no different than hundreds and hundreds or thousands and thousands, frankly, of retailers in the country are dealing with the tariff refunds and how they're planning for the year. And so I think it gives us insights and data from that perspective, but not necessarily hard data that we can monetize because there's real legal implications there that make it tricky. But as you mentioned AI, we're learning from them, too, and I think they're learning from us. We're comparing, again, different tools to use, different programs, how can we provide more customization for the consumer because these retailers, especially Rue La La and Gilt, are really good at that. And so we can learn from that. So for us, we look at it as a symbiotic relationship. Hopefully, we can add some value to those companies. They can add value to us. And we're happy shareholders of those companies, and we continue to -- or we expect to continue to be for a while. But if something comes up, then we won't hesitate to do something that's in the best interest of the company. Operator: Our next question is from Floris Van Dijkum with Ladenburg Thalmann. Floris Gerbrand Van Dijkum: Question on the redevelopment pipeline. Obviously, 9% direct returns appear very attractive. You've got an ongoing pipeline of $1 billion and another $1 billion down the pike, but it's 1% to 2% of your overall portfolio value or even less actually. Could you maybe talk about what percentage of the portfolio you still have left that is yet to receive capital? And then maybe the follow-on or the add-on is if the direct returns are 9%, what are the actual returns once you redeveloped and you see the benefits in other parts of the center, for example, when you add or rejuvenate a wing, what kind of returns have you typically seen in addition to the immediate incremental returns? Eli Simon: Thanks for the question. So I would say we're investing capital in basically every center every year, frankly. And so as far as large transformational projects, sort of that -- if you put aside the $1 billion that's actively under development today and you call it the $4 billion to $5 billion shadow pipeline, that's on, I don't know, probably 20, 25 centers we're developing at, I think I said 29 centers today. There's, for sure, others that are not in there. I don't have an exact number, but we -- some of it is because we don't control the real estate that we would want to control to do the redevelopment or do the densification or the mixed-use addition or whatnot or whatever makes sense for that center. So I don't have an exact number, but if sort of the fear is that we are running out of things to do, we're not even scratching the surface. And again, there will be more opportunities across the portfolio over time. We're not going to go to the extent we don't control a piece of real estate that we want to develop. We're not going to go and buy it just to buy it to be able to do it today, even though we could. It's just not the way we think about it. As far as the other benefits, it's interesting. It's a question that, frankly, I talk with the team about often is that we do not underwrite it. And the reason is we really need to be intellectually honest with ourselves and say, if we're doing a redevelopment -- I'm in Indianapolis today, so at Keystone, redeveloping the Saks box or the former Saks box, which just started there will be an impact, no doubt. But we have to look at it and say, okay, for the new money we're putting in, what are we earning knowing that there's going to be a benefit. What I look at is less the incremental, okay, we got $5 of new rent in this tenant or that tenant because that's sort of day-to-day business and how do you quantify that? It's hard. I look at sort of say, what are the customers saying? And so if you look at new projects we opened in Southdale last year and in Brea, just 2, for example, both fairly fully open. I think the last tenant at Southdale was Tiffany's, which I want to say opened in February. Brea, Dick's did not open until April, just opened recently and LIFETIME isn't open. And I want to say 1 or 2 of the restaurants are not open. And those 2 centers on a like-for-like basis are performing 1,000, 1,500 basis points above where those similar comp brands are performing across our portfolio. And so that's sort of, to me, the more important metric because they're showing that the money we're putting in, the development we're doing, yes, we're earning the 9%, but we're making the center more relevant. If we make the center more relevant, more customers come, retail sales grow, we're going to add new retailers. And how do you draw the line and cut the line and say, well, this counts in the return, this doesn't. It's really hard. And so that's why we don't include it. But we know it's there, and it's something that gives us comfort as we look at some of these bigger projects that will start over the next year, whether it's Boca or Ross Park or Fashion Valley or what have you. So I appreciate the question. I wish I had a really good number to show you, but we know it's important. And that's why we're excited about the pipeline. That's why we mentioned on the call is this is an important avenue of growth for us. And I think we've shown we have the ability to execute it. And now we just have to keep doing that in the years ahead. Brian McDade: And Floris, all I would add was that the investment in a project, there are multiple projects over time at properties. And so Roosevelt Field is a great example. We could go down the list of assets that we've redeveloped multiple times over the years and continue to get the appropriate kind of return and the halo effect in the regular part of the shopping center. Operator: Our next question is from Vince Tibone with Green Street Advisors. Vince Tibone: Eli, I'm curious where purchasing vacant anchor boxes at your centers that you don't currently own rank in terms of capital priorities? And ultimately, how are you thinking about the value of control of those spaces and being able to get the best use in that space from a tenant and redevelopment perspective to unlock all the benefits you just talked about versus letting a third-party owner re-lease that, that presumably only cares about the highest unit economics and less about the mall ecosystem. So I know Simon has been pretty patient and price-sensitive purchasing some of these spaces historically. So just kind of curious how you're thinking about it. Eli Simon: Sure. So I guess on the second part, obviously, I don't want to say every mall, but most of these malls have REAs. We have approval rights. So it has to be consistent with -- again, not to go through the legal language of each one. But so that's in our mind. But really, we just look at it as what's the price. And we evaluate each one independently and say, what would we do here? Do we want it back? Do we have leasing demand? We have leasing demand, okay, how do we lay it out? We lay it out? How do we -- what's the construction cost of that? What's the return? Do we think it does anything to the rest of the mall, sort of the halo effect Brian mentioned and I was just talking about. And so if there's something we really want, we can go and make a call and buy it. But typically, we've seen is we sort of can sit and buy it at the right price. And if you look at the price of some of these boxes that we've been able to get, we're very pleased with them. And obviously, then when we run the return analysis, we're very pleased. And so I don't prioritize anything really from a capital allocation perspective besides does it -- do we have liquidity for it? Yes. But does it fit with our objectives. And so it's something we will continue to do, obviously, is acquire boxes over time. But we're only going to do it at the right price and sometimes the right price might be a lot higher than somebody else might have and sometimes the right price might be a lot lower than somebody else might have, and that's fine. And we'll make a decision, are we okay if somebody else does it. And sometimes we are okay and sometimes we're not okay. And then we'll figure out if there's a meeting of the minds and there's a price that we can buy it. So it's something we sort of do day in, day out, no special project, just sort of ordinary course business. And so to the extent we have opportunities to buy it at good prices and have redevelopment plans, we'll buy it for sure. And if you look at some of the projects that hopefully we announce over the next year or so, a number of them will be in boxes that we bought that we think we bought at an attractive price and allowed these redevelopments to pencil. And so that's what we're focused on. And we're in this business for a long time. And so if we get them today or if we get them in a year, 2 years, 5 years, we'll be -- we'll do the right decision for the mall and for the capital -- for our capital allocation. Operator: Our next question is from Craig Mailman with Citigroup. Craig Mailman: Clearly, it doesn't feel like you guys have capital constraints here with the liquidity and the free cash flow. Just kind of curious from the platform. How much development do you think you could handle at one time and continue to source new entitlements and new opportunities? Like is there a limit in the near term or do you guys have significant excess capacity? Eli Simon: Yes. I mean from a capital perspective, significant excess capacity for sure. From a resources perspective, at the end of the day, these are all highly local processes, which often involve outside counsel, outside advisers, et cetera. And so the team is doing a great job. We have a number of projects I don't feel that's an issue at all. To the extent we thought it was an issue, we can add human resources highly accretively given what we're talking about, the potential EBITDA or NOI creation from these assets. And so we feel very good about the pipeline. I'd say the only thing that's out of our control or we're dealing with local municipalities and villages or townships depending on what the -- where the mall is located, that's out of our control. So if we could find a way to do that faster, that would be great. But unfortunately, you're dealing with elected officials, appointed officials, what have you. And so that's the one thing that's out of our control. The rest of it is in our control, and I feel very good that we can execute on that. And then obviously, the last piece is we always have the ability to bring in partners on some of the stuff if we want to. We've done it on multifamily projects. We've done it on a few hotels. We financed some with construction financing. But I look at it and say, as I said, we're generating $1.6 billion of free cash flow after dividends and this stuff takes time to build and doesn't start at the same time. So -- and plus, we're basically under 5x levered now, too. So 1 turn of leverage is $6-plus billion of capacity. So the -- so that is like not close to a thought in my mind. Brian, anything? Brian McDade: No, look, we're accelerating at the end of the day, Craig, you can see it. You heard Eli talk about it. We have great opportunities ahead of us. And so you should expect us to continue to realize and accelerate on those investment opportunities. We can do things that others can't and quite honestly, aren't. And so what we're delivering today is new product. There is no new product being built, and we believe that's a durable competitive advantage. Operator: Our next question is from Haendel St. Juste with Mizuho Securities. Haendel St. Juste: I've got a quick 2-parter on the core portfolio. First, on same-store NOI, up a robust 6.7% in the first quarter. So I guess I'm curious if there's any change to the initial guide of at least 3%. It seems to imply some clear decel here over the next few quarters or maybe we're not appreciating something there. And then maybe can you share some color on the current SNO pipeline right now? What's the embedded NOI? And when do you expect that to come online? Eli Simon: So I'll just do the first part. So the same-store NOI, we don't call it that. It's domestic NOI. And so that 6.7% for the quarter, as Brian said, is really, call it, 120 basis points of that is from the 12% stake we bought in Taubman last, I guess, November 1. And so that will obviously play through our results for the second quarter and the third quarter and a little bit a little bit less, obviously, in the fourth quarter. And so we'll probably have, call it, plus or minus 100 basis points impact on the year. We don't update guidance. We guided to at least 3%. I think we've guided to at least 3% for a number of years now. Our job is to outperform that. Obviously, we have a good start to the year. And so we'll just continue doing what we're doing. But we really don't update that guidance besides, obviously, I just wanted to clarify about the Taubman or the former Taubman stake and then Brian, on the SNO. Brian McDade: Yes. No, SNO at the end of the quarter was 310 basis points, Haendel. Usually, you see an increase in our business in the first quarter and then it dissipates as the quarter goes down as tenants open. But 310 basis points, which was consistent with first quarter '25 type of level. Operator: Our next question is from Mike Mueller with JPMorgan. Michael Mueller: Actually, I have a follow-up on the prior question. How much of an impact did the buyout have -- TRG buy out on your operating stats like the year-over-year sales comps and the 5% base minimum rent growth? Eli Simon: Yes. So honestly, we don't look at it. We look at it and say these -- I guess, it's 18 assets domestically, right? There are assets, they're Simon assets. Besides the NOI growth, which -- or the domestic property NOI, which is a little skewed from the 12% stake. We don't -- honestly, we don't look at it. I don't know. We don't they're all SPG assets. And so that's the way we operate them. That's the way we lease them. That's the way we account for them. That's the way we think about them. So the honest answer is, I don't know, did it increase it? I guess, maybe, but we don't really think it matters. We think it matters that they're assets that we're operating and they're part of our cash flow, and we're growing the cash flow. Operator: Our final question is from Rich Hightower with Barclays. Richard Hightower: Maybe one for Brian to go back to the Crystals CMBS financing. And as I kind of look through the debt schedule, obviously, you've got a number of secured debt financings kind of coming due over the course of '26 and '27. So maybe just fill us in with color on the market spreads, proceeds and maybe what the -- I'm assuming it's another interest expense headwind as you think about refinancing over the next couple of years given the rates on a lot of these loans. So just help us understand the moving parts. Brian McDade: Sure, Rich. No problem. Great question. We -- Crystals was a great execution, 5-year CMBS, 4.80% coupon, which was incredible, probably the tightest coupon we've seen in the last 4 years, but we're pricing off of a higher base rate. So even with that incredible coupon, we're rolling up that interest expense about 60-plus basis points. The rest of the balance of the portfolio refinancing we did on average, the coupons up are about 50 basis points relative to maturing. So we are still seeing interest expense headwinds as we anticipated. While spreads are at record tights, we are still seeing impacts from base rates. But markets are wide open. We've been active in the CMBS market. We've been active in the life market. We've obviously been active in the unsecured market, and we expect to continue for the balance of the year. But the original $0.25 to $0.30 headwind that we expected between higher interest expense and lower interest income is still there. It probably is gravitating closer to the $0.25 versus the $0.30 today where rates are, but there's definitely still a headwind ahead of us for the balance of the year. Operator: With no further questions, I would like to turn the conference back over to Eli Simon for closing remarks. Eli Simon: Thank you, everybody, for the time today and look forward to hopefully seeing many of you in Vegas or in New York in the coming weeks. Operator: Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.