Mall merger creates largest retail landlord

Mike Troy
Editorial Director
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Two of the nation’s top shopping center operators are joining forces to create the industry’s largest retail landlord. Simon Property Group and Taubman Centers announced a deal in which Simon will acquire an 80% interest in The Taubman Realty Group (TRG) for $52.50 a share with the Taubman family retaining a 20% interest.

Simon owns or has an interest in 233 retail properties comprising 191 million square feet occupied by tenants who generate revenues of more than $60 billion. Taubman is considerably smaller, operating 26 regional shopping centers in the U.S. and Asia encompassing 25 million square feet.

Both companies regularly debunk the dying mall, retail apocalypse narrative by posting strong sales and occupany numbers which suggest demand for space is strong and productive. Simon noted in its fourth quarter financial results that occupancy rates at its properties was 95.1% at year end and retailer sales per square foot were $693. At Taubman properties, year end results show an occupancy rate of 94.3% and sale per square foot of $972.

“By joining together, we will enhance the ability of TRG to invest in innovative retail environments that create exciting shopping and entertainment experiences for consumers, immersive opportunities for retailers, and substantial new job prospects for local communities,” said David Simon, chairman and CEO of Simon Property Group.

Robert Taubman said Simon was the ideal partner to help his company build on the progress is has made.Taubman’s lead director, Myron Ullman, the former chairman and CEO of J.C. Penney, said the deal with Simon is a great outcome for all stakeholders.