The Journal Gazette
 
 
Tuesday, February 11, 2020 1:00 am

Simon set to buy rival Taubman

Nation's largest mall operator agrees to $3.6 billion purchase

MICHELLE CHAPMAN and ANNE D'INNOCENZIO | Associated Press

As mall-based retailers struggle to compete with the onslaught from online shopping, the companies that own and manage the malls are finding their own business models severely challenged.

For the second time in as many weeks, there is a major agreement involving mall operators.

The Simon Property Group will buy mall operator Taubman Realty in a deal valued at around $3.6 billion.

Simon Property Group Inc. is the country's largest mall operator. It said Monday that its operating partnership, Simon Property Group LP, will buy all of Taubman stock for $52.50 per share. The Taubman family will sell about one-third of its ownership stake at the transaction price and remain a 20% partner in Taubman Realty Group LP.

Taubman Realty owns, manages or leases 26 shopping centers in the U.S. and Asia, including The Mall at Short Hills in New Jersey, and Waterside Shops in Naples, Florida. Simon owns or has a stake in 204 properties in the U.S., including premium outlets as of last year.

“By joining together, we will enhance the ability of (Taubman) to invest in innovative retail environments that create exciting shopping and entertainment experiences for consumers, immersive opportunities for retailers and substantial new job prospects for local communities,” said David Simon, Simon's chairman, CEO and president, in a statement.

Malls have struggled with retail bankruptcies and store closings after a vast shift in the way Americans shop.

Since 2015, only nine malls have been built, a dramatic fall from their peak construction in 1973 of 43, according to CoStar Group, a real estate research firm.

Vacancy rates at malls are hoovering around 4% on average, says CoStar, though struggling malls are closer to 7% vacant.


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