The Saks Global bankruptcy means disruption across the retail landscape, but from the Simon Property Group‘s point of view, there’s also upside.

According to David Simon, the chairman, chief executive officer and president of the real estate giant, retailers that don’t make it can be replaced with more productive stores at higher rents.

“With Off Fifth, their productivity and rents are just so cheap that there’s a tremendous amount of upside,” said Simon, on a conference call after the company reported strong fourth-quarter figures including gains from operations and increasing rents, and robust leasing activity.

“In the spring sometime, we get space back,” Simon said, regarding Off 5th. “Maybe there’s a few that we can get in the fourth quarter, but most of it will show up in ’27.” Saks Off 5th is closing 57 stores and keeping 12 open.

The real estate veteran said the company had previous experience in the area, having repurposed closed Sears and JCPenney stores.

“We’re very capable of reimagining the real estate and the boxes,” he said.

Simon also said that darkening retail doors can be filled by growing businesses as Life Time health clubs, House of Sports, which is a relatively new concept from Dick’s Sporting Goods, and space can be repurposed to mixed uses, including outdoor uses.

“It really runs the spectrum,” Simon said.

He spelled out the details of the $150 million investment Simon made to help fund Saks Global’s acquisition of the Neiman Marcus Group in December 2024. “As part of that, we decided we were not going to make that investment unless we got compensated for it. So in case it blew up, we would be home.…We got the right to terminate two leases. We got two buildings.” That would be Neiman Marcus in the Stanford Shopping Center as well as Off 5th at the Woodbury Common Premium Outlets.

“Throughout the entire portfolio with Saks, Neiman’s and Off Fifth, we got the right to build what we want, so we don’t have to get their approval,” Simon said. “In addition, we got the right to take that investment [$150 million] and convert it into a company run by Authentic Brands Group that owns the IP — not e-commerce, not stores — but owns the IP for Saks, Neiman’s and Bergdorf’s. At the end of the day, we felt we made a good trade. With that said, we’ve written off our investment at the end of the fourth quarter. But again, we’ve got the right to build.…In my personal belief, we’re ahead of the game.

“We’re optimistic we’ll continue to do business with Saks/Neiman’s and that they will reorganize and live a better life with a better balance sheet,” Simon said.

On Monday afternoon, the company posted a strong fourth-quarter report citing momentum in leasing activity, increased funds from operations, higher rents and a robust pipeline of redevelopment.

“I am very pleased with our fourth-quarter results, which caps another impressive year of performance for our company,” Simon said. “In 2025, we generated record real estate funds from operations of $4.8 billion and returned a remarkable $3.5 billion to our shareholders. We executed over 17 million square feet of leases, opened a new Premium Outlet in Indonesia, completed 23 significant redevelopment projects and acquired $2 billion of high-quality retail properties. We remain focused on disciplined, value-creating investment activity and operational excellence that will drive sustainable growth in cash flow, FFO and dividends per share.”

Also on the call was Eli Simon, chief operating officer and David’s son, who spoke on the numerous projects happening or soon to happen including those at Brea Mall, Northgate Station, Briarwood Mall, Tacoma Mall, Town Center at Boca Raton and Woodbury Common Premium Outlets, among others. “We also plan to enhance the merchandise mix and invest in meaningful capital upgrades at former [Taubman] assets, including the Mall at Green Hills, International Plaza and Cherry Creek Shopping Center,” he said.

“At year-end, our share of the net cost of developments across all platforms totaled approximately $1.5 billion with a blended yield of 9 percent; approximately 45 percent of net costs are from mixed-use projects,” he continued. “Our pipeline of new development and redevelopment opportunities continues to grow and now exceeds $4 billion.”

For the fourth quarter ended Dec. 31, Simon reported net income attributed to common stockholders was $3 billion, or $9.35 per diluted share, as compared with $667.2 million, or $2.04, a year earlier. Net income includes a noncash gain of $2.89 billion primarily related to the acquisition of the remaining interest in Taubman Realty Group.

Real estate funds from operations increased 4.2 percent to $1.3 billion. 

Base minimum rent per square foot was $60.97 at Dec. 31, compared to $58.26 a year earlier, an increase of 4.7 percent. 

Reported retailer sales per square foot rose 8.1 percent to $799 for the trailing 12 months compared to $739 the year before.

For 2026, the company currently estimates net income in the range of $6.87 to $7.12 per diluted share and real estate FFO in the range of $13 to $13.25 per diluted share.

While Simon Properties continues to show momentum, tariffs remain worrisome.

“Tariffs are clearly having an effect on retailers,” David Simon said. “It’s definitely putting more pressure on them. Not the big guys — Costco and Walmart and of course, Amazon. It’s the rest of us who are feeling the pinch. Retailers dealt with it successfully this year, but the full impact will really be ’26,” Simon said. “We’re still waiting for the Supreme Court to rule, which could be a small victory for our clients, but no one really knows.” The Supreme will rule on whether U.S. President Donald Trump has the authority to implement tariffs via executive orders that he issued last year.

Tariffs, Simon said, will take “a couple of hundred million dollars of EBITDA away from Catalyst to pay the government,” Simon said. Catalyst Brands was formed last year by combining Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand and Nautica brands, which comprised Simon’s and ABG’s SPARC venture, with JCPenney.

Trump’s authority to impose broad tariffs through a series of executive orders that he issued in 2025 is being addressed by the Supreme Court.