Simon Property to More Than Double $18M in Lost Saks Rents

Key Takeaways

• Simon Property Group is connected way to person $18M successful yearly Saks Global rents into $44M — a 144% summation — by re-leasing the 1 cardinal quadrate feet vacated erstwhile Saks Off 5th shuttered aft filing for Chapter 11 bankruptcy, CEO Eli Simon told analysts connected the Q2 2026 net call.

• Simon has already filled astir fractional of the vacant Saks abstraction and recovered much than the $18M it lost; archetypal basal rent from caller leases roseate 17% year-over-year done Q2 2026, with remaining abstraction successful last stages of negotiation.

• Saks Global exited bankruptcy successful June arsenic Exemplar Luxury Group with a two-thirds smaller store number — conscionable 49 locations — aft its $2.7 cardinal acquisition of Neiman Marcus successful 2024 near it incapable to work $2 cardinal successful debt.

Simon Property Group is turning 1 of the retail sector's astir salient bankruptcies into a leasing windfall, arsenic reported by Bisnow. The REIT expects to person the $18 cardinal successful yearly rent it mislaid from Saks Global's Chapter 11 filing into $44 cardinal — a 144% summation — by re-leasing the 1 cardinal quadrate feet vacated crossed its promenade portfolio. "We'll fundamentally instrumentality the $18M and crook it into $44M," CEO Eli Simon told analysts connected the Q2 2026 net call.

How Saks Arrived Here

Saks Global filed for bankruptcy successful mid-January 2026 aft failing to work indebtedness taken connected during its $2.7 cardinal acquisition of Neiman Marcus successful 2024. The conglomerate took connected $2 cardinal successful indebtedness and missed a $100 cardinal indebtedness work outgo successful December. It exited bankruptcy successful June nether a caller sanction — Exemplar Luxury Group — having reduced its indebtedness by astir 75% and chopped its store number by two-thirds, from astir 150 locations to 49.

The Details

Simon has already leased astir fractional of the 1 cardinal quadrate feet vacated by Saks and has recovered much than the $18 cardinal it was collecting annually earlier the closures. Initial basal rent from caller leases roseate 17% year-over-year done the 2nd quarter, per Simon's Q2 2026 net report. The remaining abstraction is nether progressive treatment and adjacent last deals, Simon told analysts. The re-leasing mathematics — $18 cardinal becoming $44 cardinal — reflects some the spot of Simon's promenade portfolio and the grade to which Saks was a below-market tenant.

A Tale of Two Segments

Not each of Simon's retail-related vulnerability is performing arsenic well. The REIT's retail concern conception — which includes stakes successful Catalyst Brands and e-commerce institution Rue Gilt Groupe — recorded a astir $53 cardinal nett operating nonaccomplishment successful the archetypal fractional of 2026. Net operating income from that conception dropped 24% successful Q2 to $31.8 million, a reminder that owning equity stakes successful struggling retailers carries a fundamentally antithetic hazard illustration than owning the existent property beneath them.