SPG: The Common Shares Are Our Preferred Choice, Though They Are No Longer A Bargain

Summary

• Simon Property Group's fundamentals remain solid, with increased leasing volumes, higher occupancy, and positive retail sales, but e-commerce competition and high interest rates pose risks.
• The company's online platform, ShopSimon, shows potential but requires significant growth to impact overall performance, currently lagging behind major e-commerce players.
• Simon's $4 billion development pipeline, including residential projects, and strategic tenant swaps aim to enhance long-term growth despite challenges in physical retail.
• Given current valuations and increased risks, Simon Property Group's common shares are rated "Hold," while preferred shares SPG-J are seen as overvalued.

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We have been long-time believers that high-quality brick-and-mortar retail has a place, and that the "mall apocalypse" was overdone. While we have acknowledged the risks from e-commerce and an overstretched consumer, investors took negativity too far with premium malls like those owned by

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling shares, you should do your own research and reach your own conclusion, or consult a financial advisor. Investing includes risks, including loss of principal.