Simon says occupancy rates will rise despite store closings Bloomberg News Simon Property Group Inc., the world's largest shopping mall owner, expects its occupancy rates to rise this year even as a slowing economy prompts retailers to close stores or file for bankruptcy protection, a company official said. The locally based company expects its occupancy rate to rise to more than 92 percent, from 91.8 percent in 2000 and 90.6 percent in 1999, Stephen Sterrett, chief financial officer, said at a real estate conference in New York sponsored by Credit Suisse First Boston. This is the season retailers close stores.
Weak retailers try to hang on through the holidays in an attempt to pull a rabbit out of the hat.
After retail sales boosted their profits in the late 1990s, shopping mall owners experienced the worst December sales season since 1969 last year. Simon, by contrast, focuses on the high-end of the business, with an estimated 26 percent market share of the top 200 malls in the United States by sales. General Growth Properties Inc. Simon's properties include the Mall of America in Bloomington, Minn., the nation's largest shopping mall, and the Forum Shops at Caesars in Las Vegas, which is the most profitable mall in the country based on sales per square foot. Even so, sales at stores open at least a year in Simon's properties rose 2 percent in the fourth quarter, down from 9 percent a year earlier. Sales volume is a closely watched figure for retail property owners because they are typically entitled to a portion of those sales in addition to base rental income.