- Partnership between Simon Property Group and Amazon would allow vacant “anchor” stores to be converted to Amazon distribution centers
- Arrangement would guarantee steady rental income for malls while assisting with “last mile” delivery for the e-commerce giant
- Simon reports stable second quarter income despite COVID-19 shutdowns
Simon Property Group, a major developer and owner of shopping malls in the United States, is reportedly in talks with Amazon to covert its larger vacant retail spaces to distribution centers. This arrangement would help stabilize mall revenues by guaranteeing a steady tenant while helping to shorten “last mile” delivery time for e-commerce deliveries.
Malls have been hammered in recent years by several retail business closures, including the shuttering of large “anchor” department stores such as Sears and J.C. Penney at several locations. In a strategy that predated the pandemic, Simon began pursuing a strategy of acquiring ailing retailers to lift them out of bankruptcy, preserve rental income, and avoid unsightly vacancies at mall properties.
In a recent conference call, Simon chief executive David Simon says the company is continuing to make bids on retailers, and that this is a profitable strategy since inventory can be acquired at or below cost. In its second quarter earnings report, Simon acknowledged that profits have dropped due to pandemic-related shutdowns but that 91 percent of tenants had reopened in July. The occupancy rate stood at 92.9 percent at the end of June, and the company had $8.5 billion in liquidity at the end of the quarter.
In Connecticut, Simon owns the Clinton Crossings Premium Outlets as well as the Crystal Mall in Waterford. The latter location has maintained most of its anchors, though its Sears store closed in 2018.
