Indianapolis-based Simon Property Group (NYSE: SPG) is reporting results for the first quarter as well as updates to operations. The Real Estate Investment Trust is reporting Funds from Operations of $980 million, down from $1.1 billion during the same period last year. Simon attributes the slight decrease to store closures as a result of COVID-19.
Simon says comparable property Net Operating Income for the first quarter was flat and portfolio NOI declined 0.2%. The company says it took certain steps to increase financial flexibility during the quarter.
Chief Executive Officer David Simon says, “Business was off to a good start in January and February, with shopper traffic, tenant demand, reported retailer sales and other underlying portfolio fundamentals trending at or above our expectations. In March, we quickly pivoted to address the rapid spread of COVID-19, temporarily closing U.S. properties, reducing operating costs and increasing financial resources. We are beginning to reopen properties and are encouraged by the consumer response thus far.”
Simon has reopened 77 of its U.S. retail properties in markets where local and state orders have been lifted and retail restrictions have been eased. As part of the reopening process, the company published its comprehensive “COVID-19 Exposure Control Policy” in an effort to provide elevated safety standards at its properties.
As it developed and implemented its response to the impact of COVID-19, Simon says its primary focus has been on the health and safety of its employees, shoppers, and the communities in which it serves.
The company says it has significantly reduced all non-essential corporate spending and property operating expenses, as well as implemented a temporary furlough of certain corporate and field employees, and on the company hiring efforts, among others.
The company says it has also suspended or eliminated more than $1 billion of new development and redevelopment projects. The company plans to re-evaluate its suspended projects over time.