![]() ![]() The knock on outlets at the time was that no sooner would one open on the outskirts of some metropolis than a rival would build a few miles away and cannibalize its business. , an owner and developer of outlet malls, which were out of favor among real estate investors. Having unloaded the glitzy property for far more than his expected price, Simon went on to turn the two dozen shopping malls that came along with it into a highly profitable piece of his retail empire.īy 2004 Simon was growing wary of rising shopping mall prices, and shifted gears. He outbid a host of other prospective buyers, acquired Corporate Property Investors for $5 billion in 1998 and quickly flipped its most famous landmark, the gm Building on Manhattan's Fifth Avenue, for $800 million to Donald Trump and insurer Simon, 47, owes his good fortune not only to his conservative midwestern streak but also to skills honed as a relentless opportunist. "Simon appears to be among the best equipped to emerge unscathed." "This is an unfriendly credit market and what looks like a 100-year for consumer spending," says Green Street Advisors analyst James Sullivan. As General Growth and the other highly leveraged mall owners struggle to survive, Simon may thrive by picking up some of their assets on the cheap. At that level, bankers and bond investors are still willing to lend Simon money. Thus Simon's $24 billion debt load represents a loan-to-value ratio of just 58%. "Dealing with that environment created a certain level of prudence around here." "When I came to Indianapolis, the real estate business was a basket case," he recalls. Simon, who left a job with New York investment bank Wasserstein Perella in 1990 to go to work for his family's company, retains a healthy fear of how high leverage ruined commercial property owners during the last bust. Chairman John Bucksbaum is struggling to avert a bankruptcy filing. Its stock has tumbled from $65 two years ago to 52 cents recently. General Growth is desperate to roll over $3 billion in debt but has been able to get banks to extend it credit for only a few weeks at a time. Pennsylvania Real Estate Investment TrustĮach are laboring under debts equal to 80% to 90% of the value of their properties. What makes Simon a standout is not that its day-to-day operations are that much more profitable than those if its rivals. "We were up 8.8% last year, and that was after we took writedowns for developments we shut down." He expects earnings per share to reach at least the same level in 2009 as last year. "Look at the earnings power of this company," says Simon in his office across from the state capitol in downtown Indianapolis. The 12% of the namesake firm owned by David Simon, his father and his uncle, the company's founders, has lost $2.9 billion in value. The REIT's stock, at $36, is scarcely a third of what it was two years ago. This year Simon Properties' adjusted funds from operations (net income plus amortization and depreciation in excess of necessary fix-ups) are likely to only inch ahead from 2008's $5 a share. The value of Simon's 386 properties-large shopping malls plus a few dozen outlet centers-has fallen 30% over the past two years to a recent $42 billion. consumers to the endangered species list poses problems. Simon was recognized as one of the World’s Best CEOs by Barron’s Magazine.No question, the addition of U.S. Simon as one of the world’s best-performing CEOs. In 2010, 20, the Harvard Business Review recognized Mr. ![]() Simon has received numerous industry honors, and in 2000, he was inducted into the Indiana University Kelley School of Business Academy of Alumni Fellows. Simon is also a member and former chairman of the National Association of Real Estate Investment Trusts (NAREIT) board of governors and is a former trustee of the International Council of Shopping Centers (ICSC). Simon also serves as Chairman of the Supervisory Board of Klépierre, a publicly-traded, Paris-based retail real estate company. In the past five years, he previously served as a director of Washington Prime Group (formerly WP Glimcher). ![]() Simon served as the Vice President of Wasserstein Perella & Company from 1988 to 1990 and an Associate at First Boston Corp. ![]() Simon was President of Simon Property Group from 1993 to 1996, beginning his term in 1993 by leading the efforts to take Simon Property Group public with the largest IPO as a real estate stock offering at the time. Simon has served as the Chairman of the Board of Directors of Simon Property Group since 2007, and has been the CEO of Simon Property Group since 1995. Cornell University’s Center for Real Estate and Finance is pleased to feature David Simon as one of this year’s panelists for the 2 nd Annual Titans of Real Estate conference. ![]()
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