Is Simon Property Group a Bad Investment?

PHOTO CREDIT: Simon Property Group

OVERVIEW

Why You Should?

  1. Simon Property Group will benefit from a stronger global economy returning as people go out to malls and spend more money at these locations. Businesses will have the money in order to expand their presence and sign leases on Simon’s land. This will benefit the company and its investor base as well.

Why You Should Not?

  1. Having a storefront in a mall in order to conduct business is not the future of the retail landscape. Companies like Amazon, Shopify, and many others offer ways for businesses of all sizes to set up online storefronts. This is cheaper and more effective than having retail space in a mall. These new methods might hurt Simons's ability to gain new leases on their premier shopping centers in the future.
  2. Simon Property Group has seen falling earnings due to the lack of demand for leases in order to get a storefront at a mall. Though other companies have recovered, Simon has seen falling numbers ever since March. This comes to show the weakness of Simon’s core business. It may take Simon a long time in order to fully recover from this pandemic, not making it the best investment to make.
  3. Simon Property Group faces tough competition from other US companies as well as international property development companies. Some of these companies include Realty Income Corporation, Boston Properties, Toll Brothers, and many others. This tough competition might hurt the company’s future growth.

MY OPINION

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.