Simon Property (SPG) Q2 2026: Real Estate FFO +7.9%, EPS −12%, Guidance Raised
Simon Property Group's headline numbers went backwards this quarter — earnings per share fell to $1.49 from $1.70, and total FFO per diluted share slipped to $3.12 from $3.15 — but the mall business itself did not. Portfolio NOI rose 8.3% year over year (domestic property NOI rose 8.5%), and Real Estate FFO per share, which strips out Simon's non-property ventures, climbed 7.9% to $3.29. Management backed that read by raising full-year 2026 Real Estate FFO guidance to $13.20–$13.30 per diluted share, up $0.08 at the midpoint, and declaring a third-quarter dividend of $2.25, an increase of $0.10 or 4.7% year over year. Most of the gap between FFO and Real Estate FFO is Simon's non-property ventures — its retail operating stakes and other platform investments — though the measure also excludes gains and losses on disposals or revaluations of equity interests and unrealized marks on publicly traded equity and derivative instruments. The separate EPS decline is where the purchase accounting from the October 31, 2025 Taubman consolidation shows up, not in the rent roll. That distinction matters because Simon is the largest U.S. mall REIT and a bellwether for whether the physical-retail recovery is still compounding: U.S. occupancy held at 96.0% and average base minimum rent rose 6.3% to $62.42 per square foot from $58.70, both of which say it is.
All figures are from Simon's Q2 2026 Form 10-Q and the accompanying earnings release unless otherwise noted.
1. Consolidated Balance Sheet
1-1. Key asset movements
| Item | Dec 31, 2025 ($K) | Jun 30, 2026 ($K) | Change |
|---|---|---|---|
| Cash and cash equivalents | 823,147 | 1,019,091 | +23.8% |
| Tenant receivables and accrued revenue, net | 934,077 | 884,241 | −5.3% |
| Investment properties, net | 30,244,557 | 29,712,452 | −1.8% |
| Investment in other unconsolidated entities | 4,362,339 | 4,012,480 | −8.0% |
| Investment in Klépierre | 1,505,377 | 1,377,318 | −8.5% |
| Right-of-use assets, net | 755,934 | 731,200 | −3.3% |
| Total assets | 40,606,466 | 39,709,266 | −2.2% |
The balance sheet shrank even as the income statement grew almost 20% — and the contraction is principally depreciation, not a portfolio being sold down. Gross investment properties barely moved (+0.3% to $51.09 billion) while accumulated depreciation rose $681 million to $21.38 billion, now 41.8% of gross cost; that single line accounts for roughly three-quarters of the $897 million decline in total assets. Under U.S. GAAP, real estate is carried at historical cost with no revaluation permitted, so book value systematically understates a portfolio of this vintage. The Klépierre stake makes the point explicitly: Simon's 20.7% holding of 59,280,541 shares is carried at $1.38 billion, but Klépierre closed the quarter at €36.54 per share on Euronext Paris — about $41.73 at the quarter-end exchange rate, or roughly $2.47 billion in total. That is a $1.10 billion spread that equity-method accounting never recognizes, inside a single line item.
