Good day, and thank you for standing by. Welcome to the first quarter 2021 Simon Property Group earnings conference call. At this time all participants is now in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. And if you require any further assistance, please press star zero. And please be advised that todays conference is being recorded. I would now like to hand the conference over to your speaker today, Tom Ward, Senior Vice President, Investor Relations. Please go ahead. Thank you, Laurie. Thank you all for joining us this evening. Presenting on today's call is David Simon, Chairman, Chief Executive Officer, and President. Also on the call are Brian McDade, Chief Financial Officer, and Adam Reuille, Chief Accounting Officer. Before we begin, a quick reminder that statements made during this call may be deemed forward-looking statements within the meaning of the Safe Harbor of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of risks, uncertainties, and other factors. We refer you to today's press release and our SEC filings for a detailed discussion of the risk factors relating to those forward-looking statements. Please note that this call includes information that may be accurate only as of today's date. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included within the press release and the supplemental information in today's Form 8-K filing. Both the press release and the supplemental information are available on our IR website at investors.simon.com. For those who would like to participate in the question and answer session, we ask that you please respect our request to limit yourself to one question and one follow-up question so we might allow everyone the opportunity to participate. For our prepared remarks, I'm pleased to introduce David Simon. Good evening. I'm pleased to report that our business has significantly improved after having addressed the impacts from COVID-19, including the restrictive governmental orders that have forced us to shut down as well as reduce our operating capacity. Thankfully, those restrictions are now being lifted. I'm pleased to report our continued improvement in our profitability and cash flow generated for the first quarter. First quarter funds from operation was $934 million or $2.48 per share. FFO increased approximately $150 million or $0.31 per share compared to the fourth quarter of 2020. Our international operations continued to be affected by governmental closure orders and capacity restrictions, and in fact, the quarter was negatively impacted by approximately $0.08 per share compared to our expectations given the closures that have occurred internationally. We also recorded additional COVID impacts in the first quarter of approximately $0.07 per share based upon basically domestic rent abatements and uncollectible rents. We generated $875 million in cash from operations in the quarter, which was an increase of 18% compared to the prior year period. We collected over 95% of our net billed rents for the first quarter, and our in-line tenant collections are back to pre-COVID levels in the approximate 98% range. Our operating metrics in the period were as follows. Mall and outlet occupancy at the end of the first quarter was 90.8%, down 50 basis points compared to the fourth quarter of 2020. This 50 basis point decline for the quarter is approximately 75 basis points less than the average historical seasonal decline from the fourth quarter to the first quarter. Average base rents was $56.07, up 60 basis points year-over-year. Leasing spread declined for the trailing 12 months, primarily due to the mix of deals that have fallen out of the spread calculation that have resulted in an increase to the average closing rate by approximately $8 per sq ft for the trailing 12 months. Pricing continues to improve with the average opening rate per sq ft for the trailing 12 months of approximately $60 per ft. As you can see in the lease expiration schedule included in our supplemental, our expiring rents for the next few years are less than $60 per sq ft. Keep in mind that the opening rate included in our spread calculation does not include any estimates for variable lease income based on sales. In certain circumstances in addressing tenant COVID negotiations last year. We, in certain cases, agreed to lower our initial base rent in exchange for lower unnatural sales breakpoints, allowing us to participate in the improved sale performance as the economy recovers. We think that will end up being a very smart move on our behalf. Those deals are included in the average opening rate at the lower base minimum rent and does not include our estimation of what the percentage rent could be. We'll obviously believe those contributions in time will add to our cash flow. Leasing momentum has continued across our portfolio. We signed 1,100 leases for approximately 4.4 million sq ft. We have significant number of leases in our pipeline. Our leasing volume in both number of leases and square feet was greater than the volume in each of the first quarter of 2020 and 2019. The improving domestic economic environment, shopper sentiment have increased shopper foot traffic and sales across our portfolio. As I mentioned, increased in traffic for our open air and suburban centers has been very encouraging, and retail sales continue to improve across the portfolio with higher sales volumes in March compared to 2019 levels. We opened West Midlands Designer Outlet, our second outlet in the United Kingdom, in early April. This was behind schedule. It was supposed to open in the fall of 2020, but was delayed due to COVID restrictions. We're pleased that this has now been lifted, and we're now able to open and serve the shoppers. During the first quarter, we started construction of our fifth premium outlet in South Korea. We're excited about that opportunity. Hopefully by now, with respect to our brand and retailer investments, you've seen that we've been able to add significant value there. Our global brands within SPARC outperformed their plans in March and April on both sales and gross margin, led by Forever 21 and Aéropostale. For the two months combined, SPARC outperformed the sales plan by more than $135 million and our gross margin plan by more than $75 million. We're also very pleased with the JCPenney early results. They continue to be above our plan. Our company's liquidity position at Penney is strong at $1.2 billion, and balance sheet is in very good shape with leverage of less than 1.2 times net debt to projected EBITDA. We continue to add new brands to the JCPenney portfolio. We expect growth to be our focus going forward. Just a quick update on Taubman. We're very pleased with our partnership and the results in the first quarter. Our teams have collectively shared and implemented many best practices and are adding value to the assets. We expect to step up redevelopment plans with mixed-use opportunities throughout their TRG portfolio. Capital markets, very similar to what we always do. We're very active. We completed $1.5 billion at senior note offering at 1.96% weighted average term of 8.4 years. We also completed a EUR 750 million Euro note, shouldn't say dollar, at 1.8% coupon at a term of 12 years. We used those proceeds to completely repay the $2 billion unsecured term facility associated with the Taubman deal, as well as pay off our $550 million senior notes. We've also refinanced six mortgages for $1.3 billion, our share of which is $589 at an average interest rate of 3.36%. That market is continuing to improve. At the end of the quarter, with all this activity, we have $8.4 billion of liquidity, consisting of $6.9 billion available on our credit facility, $1.5 billion of cash, including our share of JV cash. Reminder, that is net of $500 million of U.S. commercial paper outstanding at quarter end. We paid $1.30 per share in cash in terms of our dividend on April 23rd. Finally, as you've seen, given our first quarter results, we are increasing our full year 2021 FFO guidance from $9.50-$9.75 per share to $9.70-$9.80 per share. This is an increase of $0.20 per share at the bottom end of the range and $0.05 at the top end of the range, or a $0.13 increase at midpoint, and that represents a 6.5%-7.6% growth rate compared to our 2020 results. In conclusion, pleased with the results, encouraged with what we're seeing in terms of sales, traffic, retail demand, and we continue to increase our performance and our profitability. Ready for questions. Our first question is from Rich Hill of Morgan Stanley. Your line is open. Hey, David. Good afternoon. Had a quick question on the guide. Look, we've argued that the guide looks pretty conservative because I think if you assume no NOI growth versus 2020, you can sort of get to the high end of the prior range. The revision looks fairly conservative to us. I recognize there was some lease termination benefits in this quarter. Maybe you can just walk us through how you think about the cadence of that guide in 2Q, 3Q, and 4Q. Well, Rich, you can't blame us for being conservative, can you? No, sir. After what we've dealt with. No, sir. for 14 months. Just a couple things. The lease settlement income was kind of in our plan, one. On the other hand, when we gave our initial guidance, we did not expect the negative results that we saw in Europe, primarily of $0.08. That hurt us by $0.08, and that's still going to underperform given the restrictions for the rest of the year, because that lockdown amazingly took a lot longer and lasted a lot longer. Unfortunately in Europe, they're still dealing with COVID. That will have an impact. I would say, as you know in the first quarter, we did still have some abatement and some bad debt, so to speak, that also affected us to $0.07. We still think there may be some further activity in that. We don't know. It's pretty much behind us at this point. We're conservative. We've got Europe. I think the comp NOI, we didn't give you a number, but we expect in the U.S. to do better than what we initially thought. I hope you're right. I hope we're conservative, and I hope we do better than what we're guiding to. It's just been a traumatic time for this company and our folks, and you can't blame us. Understood. Hopefully I'm not putting words in your mouth, I think on the last earnings call, you had talked about total core portfolio ex Taubman being in the 3%-4% range for 2021. I note that total portfolio was +4 in this quarter, including Taubman, if I read it correctly. How should we think about the total portfolio growth going forward, recognizing you haven't guided? Is that 3%-4% still accurate, meaning that there should be a pretty significant ramp over the next several quarters? Well, let's separate the two. I think when we talked about our comparable, we thought we were gonna be in the four-ish range. Just comp. Just comparable, excluding Taubman. To be clear, at least that's what my intent was when we had our year-end call. We expect to be a little bit above that. We still don't know, as I mentioned to you, because of COVID and some of the negotiations with retailers, we're betting a little bit more, so to speak, on the come because of the sales aspect of it. We would hope to be around 5% on that, as we look at it. Then Taubman, we're just putting that in based on our plan. They're off to a pretty good start. That's where you get the portfolio number. The comparable NOI, should be in the 4%-5%, hopefully on the high end of that range. Then we itemized Taubman because we didn't want to confuse people, and we're just gonna show you those results. Next year, 2022, we'll just have the TRG portfolio and our comparable. You'll see Taubman the rest of the year the way it's outlined. Did that help, Rich? It does. I can follow up with Brian and Tom offline on some wonky accounting questions, but that's helpful color. I'll get back with you. Okay. Well, I pride myself in being a wonk. If you're ever bored, you can call me anytime. All right, sir. Thank you. Talk soon. Take care. Our next question is from Steve Sakwa of Evercore ISI. Your line is open. Thanks. Good afternoon. David, I was wondering if you could just comment a little bit more on kind of the leasing momentum, and you talked about the 4.4 million ft done in Q1. Maybe just give us a little bit more color, kind of what the pipeline sort of looks like. What types of tenants are you seeing? Is there a focus, whether it be food, whether it be on apparel, whether it be on entertainment? Just what are you seeing on the leasing today? Well, keep my fingers crossed, we're actually seeing really good demand across the board. Very interestingly, the restaurants demand is at the very high level. We're seeing a lot of restaurateurs that for some of the space that was vacated, they want to come in, retrofit it, get open quicker. We're seeing really good demand there. I think some of the strong retailers are growing their business significantly. American Eagle is a great example. Urban Outfitters is another great example of two companies that just pop to mind that we have multiple deals in the works on. We're probably 80% done, Steve, on our renewals thus far. I'd say we generally feel pretty good and much better than we felt in a long time. I just think we're seeing a resurgence in brands. Let's take a great example of a company, Crocs. Crocs was hot a decade ago. People thought it lost its mojo. Maybe it had. It's now killing it. We're seeing footwear, we're seeing apparel. We're seeing a lot of brands that are new, that want great retail real estate. I'm seeing basically a resurgence across the board, and our team is very active. We're also seeing demand from entrepreneurs, local, regional. Pretty good results are coming that I think you'll start to see in the upcoming quarters. Okay, thanks. I guess that sort of dovetails into sort of my follow-up when you think about kind of the occupancy trend, I appreciate your comments that the drop sequentially was maybe less than what you'd normally see seasonally. Do you feel like occupancy at this point is now at the bottom and you start to see that kind of improve throughout this year into next year? Same with kind of leasing spreads. Does this kind of mark the bottom here on leasing spreads? Again, I think we gave a rather lengthy explanation on leasing spreads. The thing I would focus on, it is mix driven. That's the first point. The other thing is, as part of COVID, we were doing renewals where we had lower base rents and more unnatural breakpoints, which I think hopefully based on sales trends, we're going to actually have made a pretty good bet on that. I don't think you'll see that as the mix changes and gets more stable, and that's why we pointed out the kind of what you see expiring. I would hope for that you'd see essentially that decrease go away with time as that goes out. That's the first point. I think occupancy, I would think we would see improvement clearly where we were at the end of last year by the time we get back up to year end. I would expect a reasonable improvement on 2020 versus 2021. We're not going to get back to 2019 levels in 2021. We look kind of more at 2022, 2023 level. That's a little bit of a guesstimate. The demand, frankly, I don't want to oversell it. That's not my style. I don't like naming names, but even though I named two already, we're just making deals across the board with a bunch of people. We do still have some difficult relationships and negotiations that we're dealing with. Again, I won't name names, but so to the extent, the occupancy uptick is not as robust as you think. It's primarily because we've taken the tactical response that, look, if they're not paying what we think is fair, we'll just rather sit on empty space. That's a judgment that I hope investors will appreciate that having done this for quite some time, we're not always going to get it right. The fact of the matter is. We're going to try and do fair deals, but to the extent that it's too one-sided, we'll sit on the space. We still have a few of those kind of scenarios that will probably play out in 2021. Great. That's it for me. Thanks. Thank you, Steve. Our next question is from Caitlin Burrows of Goldman Sachs. Your line is open. Hi there. Maybe just following up on the occupancy point. Lease termination fees were significant in the quarter, and I think you mentioned that was kind of your plan. What makes you comfortable allowing this tenant or multiple tenants to move out early and Simon take that termination income rather than keeping them in occupancy? Yeah, that's a really good question. It's really an art versus science. It's really a function. We don't really like to do it, but, in some cases, we think the space is really good and we'll be able to ring the bell on the lease termination income and then lease it up. We get the benefit of both. If I get the present value of that lease stream, more or less, and then I have the space to lease, that's pretty good business for us to do. That's the case. That's what we saw in Q1. We basically, in a lot of cases, took near 100% of the net present value of that lease, got the money, got the cash, then we have the space, and then we'll lease it up. That's pretty good, Caitlin. That's pretty smart to do, pretty thoughtful to do. Our space isn't going anywhere. Our malls aren't going anywhere. They're still great real estate. Demand is picking up. In some cases, that's the kind of trade we'll make. We're not taking real discounts in NPV. Obviously, we're very sophisticated in running the math to see what the fair deal is. Mm-hmm. Okay. Maybe on the acquisition front, Simon raised equity later in 2020, and I think some of it was earmarked for possible property acquisition. Just wondering what you're seeing in terms of opportunity and, I guess, willing sellers. Is there any commentary on whether you're more interested in potential U.S. or international properties? Well, I think we have built a great portfolio over a long period of time. We don't need anything to continue to run profitably and grow earnings now after having dealt with 14, 15 months of COVID. On the other hand, if there's some few properties here and there that make strategic sense, we're willing, able buyers of that. The sellers, they ebb and they flow, and sometimes their expectations aren't where we think they should be. Obviously, we're very active with Taubman. We think that's going to turn out to be a very good deal for everybody involved. It's not like we haven't just done a significant transaction. We think there's lots of upside in the portfolios. We work with the Taubmans to recover from COVID. We've got our eye out. We've got a great network. We can always enhance it. We also are looking at content. What do I mean by content? You'll see as we point out to the value creation in some of our content deals over this year or next, you'll see our ability to create significant value off balance sheet, that I think helps us with content and what we're trying to do in terms of positioning our real estate for the future. Okay. Thank you. Sure. Our next question is from Alexander Goldfarb of Piper Sandler. Your line is open. Hey, good afternoon, David. How are you? Good. How you doing? Oh, fabulous. It's earnings. We got a bunch of stuff still going on. Life is good. Two questions here. Saw the Eddie Bauer news, and if my ability to read English is correct, it looks like you did that in the traditional ABG investment wrapper, not in the SPAC. A two-parter for my first question, just I know last time on the call you said the SPAC will do a lot more than just traditional retail, but maybe just walk through thoughts on just remind us how stuff goes into the ABG wrapper versus the SPAC. Two, the disclosure on page 16, which you guys have had for a while, but it does show the benefit from these retail investments starting to come through, which really shows that, hey, these things are making money. To that point, just sort of curious. How much of the brand's NOI is coming from Simon centers versus coming from non-Simon centers? We don't really go through that. No, these are retailers that have essentially a very broad portfolio, they get a lot of their profitability from stores and e-commerce outside of our portfolio. Just to touch on your last one. Just a quick note on Eddie Bauer. Eddie Bauer, we will partner with ABG to buy the IP, which we think is terrific. It's been around 100 years, celebrating 100-year anniversary, I think last year. It was the first company to create the down jacket, in 2019 it did $786 million in sales. We are buying the IP at a fraction, a lot less than one times. If you look at where brands are being priced, you will have noticed that we'll do a great deal. In addition, SPARC will buy the operating company, which we're partners with ABG on, for essentially the working capital. They'll operate the stores, and we think again, they're going to add $30 million-$40 million of EBITDA to SPARC. SPARC this year projected will do about $130 million of EBITDA. That doesn't really come through because we have depreciation. We don't add that back for FFO and the like. SPARC is doing fantastic. Eddie Bauer, adding that to SPARC will be really beneficial. We're beginning to create kind of a whole outdoor apparel with the brands that we have with Nautica and so on. I think the IP of Eddie Bauer will have growth associated with it under the ABG umbrella. As far as your thoughts of this going into there, is the SPAC really just for more technology or efficiency cost investments, not retail? Well, this is not in the SPAC. The SPAC is available to do kind of what we told the market, things outside. This is like a core ABG SPARC transaction that the synergies associated with folding this into SPARC, following the same game plan that we've done with all the other brands we bought, is essentially a no-brainer. Okay. Second question is, David, ESG, certainly a growing investment outlook and a lot of funds looking for it. There's more talk in retail about the efficiencies of physical versus online. Clearly, individual boxes being shipped, intuitively doesn't make sense, driving trucks, whether gas or electric, through neighborhoods, doesn't compete versus bulk shipment to the malls and shopping centers. What are you guys doing to address this, not just on the white paper you did a few years ago, but more collectively, whether individually or in industry, to really highlight and showcase the environmental benefits of physical retail to the investment community and to the local communities as a whole versus just what the industry has done before, which, as I say, you've done the white paper, et cetera? Well, Alex, this reminds me of if you can sense hesitation, it's because you can sense frustration. Physical shopping unquestionably is better for the environment than e-commerce. We have written studies on it. We have discussed it. Right now, nobody cares. It's our job to have the communities care. I think part of why people cared less was obviously because of COVID and priorities were focused elsewhere. I think it's a real focus for us in the future to explain the merits of our physical footprint, and what it means for carbon footprint of physical stores vis-a-vis e-commerce. Not to mention all of the energy costs, server costs, et cetera, packaging. You can go on and on and on about the cost associated, the carbon footprint of e-commerce compared to physical. I will refute anyone, and I think others have tried, to say that e-commerce has a less carbon footprint. That just is not true. We have our job to do. It reminds me, we got to get the governments to care. We got to get governments to act. It reminds me that I've been around enough to know that e-commerce, internet sales taxation, we talk, we talk, we talk. Everybody said, "You're right, you're right, you're right." Nobody did anything until, thankfully, the Supreme Court overturned the Quill decision to level the playing field. There is no reason, in addition to that retail real estate should be taxed 10x what warehouse and distribution facilities are taxed. 10x. Hopefully, when we give our pitch to local jurisdictions, real estate assessors, government authorities, and so on, they will care. We do. I'm open to ideas on how to get the message out. The message is clear to me. Hopefully, people will care. Okay. Thanks, David. Thank you. Our next question is from Michael Bilerman of Citi. Your line is open. Great. Good afternoon, David. David, I wanted to ask you about sort of development and redevelopment spending. You're obviously, I think, enthusiastic, as all of us are, about the recovery and everything that's happening. How do you think about increasing the deployment of capital, either into new assets or into existing assets? If you look on page 25 of the supplemental, I think that $430 million may be the lowest I've seen in years. I think back, I think over the last decade, David, you've put like $8 billion to work in your assets. How should we think about deployment of capital over the next couple of quarters? Or at least announcements of investing more capital, when you also think about the investments you can make in Taubman's assets, which I think the schedule excludes. Yeah. It's absolutely a very valid observation. With COVID, we shut things down. We frankly stopped construction, certain projects in midstream. One is because we had to because governmental orders. Two is, we didn't necessarily see any light at the end of the tunnel when you basically have 230 properties shut down across the country. The good news is we were able to do it. We did it without incident. We did it justly, fairly, appropriately. Now we're starting back up, Michael. We're still a little conservative on that front. Primarily, we still have concerns. We just want to make sure we're through the COVID crisis that we've all had to deal with. It is a goal of ours and a focus of ours to crank this up. Now, the good news, it's there, it's ready. We've rethought some projects. I think I mentioned this last time. A couple of the California projects, we had more retail than we probably will now. We're evaluating supply and demand when it comes to other mixed-use components of it. The good news is, without question, the silver lining in surviving this very tough time for all of us has been that it wasn't too long ago, and it's like clocks. It wasn't too long ago where suburbia was like, forget about it, right? To me, and I mentioned this, I don't know, two calls ago, suburbia is hot. Suburbia is the place to be. We just happen to have a lot of great, well-located suburban real estate that we'll tend to take advantage of. I don't think this is a short-term scenario. I think this will play out for several years. We've got some really good stuff, and the redevelopment pipeline will pick up. I think our experience and knowledge and execution will clearly help. The Taubman portfolio is great suburban real estate, more or less. There'll be great opportunities to add to that. We're already working on, as an example, they have a big development in Cherry Creek, which will end up being a major mixed-use opportunity for TRG that we're there to help the partners sort through as it develops. When we're thinking about this slide at the end of the year, do you think it could easily be at, let's say, a $2 billion run rate when you include Taubman in all the projects that you're accelerating? I'm just trying to get a sense of how much, and also just given your overall enthusiasm about the results and where you see traffic and sales and leasing, I'm just trying to get a sense of how much that will translate into incremental capital above and beyond what you've already identified here. Well, again, all valid questions. I would say to you by year-end, and this is a guess, and Brian is looking at me shaking his head no, but we've got a couple things in Europe that we'll probably do. When you put it all together, I would say, again, the spend will be over a year plus, we'll end up having a pipeline probably at about $1 billion of stuff, that we'll have committed to by year-end. Don't hold me to that number, but that would be kind of my gut feel. Yeah. There'll be stuff that we'll sell too, Michael, so don't forget about that piece of it. Yeah. There'll be projects that get delivered through the year that will ultimately reduce that number. Right. Just as a follow-up, clearly there's a lot of people going out and doing things, and I don't know if it's revenge shopping or stimulus shopping, but there are certainly much more people going out and shopping. How are you able to discern how much of this is just that? Just like we've been stuck around for so long, I just need to get out and do something. I want to go shop versus something that's longer lasting. Are you able to sort of tease out anything from the data analytics in terms of dwell times or conversion rates or any certain retail categories that are seeing more long-lasting benefits than maybe one type of shot in the arm? Well, I think that's the big question, right? That's why we continue to be conservative because, between being cooped up, between being locked down, between the stimulus, between celebrating that the country's still around and we're still going to try to get back to normal. There's clearly some level of euphoria around that. It would be impossible for me to tell you what percent that is. That's why we're being conservative. On the other hand, we're still seeing pockets of the country that haven't really seen that yet. Who? California's a great example. Parts of the New York region. There's still no international tourism, which we would expect to see in 2022. Even if it kind of stabilizes or just kind of normalizes, there'll be other pockets that I think will pick up as the entire country reopens. Let's take California versus Florida. Disney World's been open nine months and Disneyland, I think, just opened, right? Yep. California has a nine-month lag, and we've got real presence in California, as you know, that we'll see the benefits of. Don't underestimate, I do believe, assuming, and this is a global issue, but I do think people are going to start to travel again globally. Probably won't happen much until end of this year or certainly in 2022. We're going to see a pickup of that. We might see that in Europe just because the Chinese have stayed at home. If the Chinese come here, we could see that here. There are elements that will pick up the slack to the extent that the last couple of months have been really nice to see. Yeah. Okay. Thanks for the color, David. Sure. Our next question is from Derek Johnston of Deutsche Bank Securities. Your line is open. Hi, everybody. Thank you. Hi, David. We touched on this a bit, but our store checks are pointing to a pretty high level of online order fulfillment from the mall or the retail store itself. Is this a tenant last mile approach that you're seeing gaining any type of traction? Especially since distribution space has gotten so costly, are retailers talking about this? Could there be a growing trend at work here, kind of the merger between online and in-store? There's no question that most of the sophisticated retailers really want to be, I don't want to use all the buzzwords, but seamless between online and ship from store, pick up in store, all of that stuff. It's interesting, when we talk to retailers, the majority want to do that. Some like to fulfill it still in the distribution facility. It's not uniform across the board, but they all want a seamless experience. They want to be able to offer clearly pick up in store or deliver from store. In a lot of cases with shipping and delays, that's much more advantageous to them. A handful would prefer to execute out of their distribution facilities. I'd say the vast majority are moving toward seamless pickup, ship from store, using that as, so to speak, an ability to fulfill from the physical store is a real advantage to them in terms of delivery cost and so on. Yes, though there's a few that find it more efficient to do otherwise. It's like everything else in retailing. There's not one size fits all. It's a good trend, and I think they need their footprint. With the connection for the retailer, lots of retailers will tell you that, not to be repetitive, but as we've said and others have said, look, when they close a store and that's their store in that marketplace, they lose the e-commerce business or vice versa. When they open a store, their e-commerce business goes up. They look at it in totality. I think with all the ability now to study the consumer better with all the data, they're able to do a much better job. Yeah, thank you. That makes sense. Could you expand on some of the early reads from the JCPenney investment? I know you spent some time on Forever 21 and Aéropostale and even called out JCPenney briefly. What are you seeing importantly at JCPenney? How have the trends held up there? Are there any re-merchandising wins or early successes that you'd like to expand on? I think we've been mostly like all of our deals when we buy a retailer out of bankruptcy, we're in the stabilization mode, and the capital preservation mode. We've accomplished both of those already. As I mentioned to you in the call, we've got a $1.2 billion of liquidity, and undrawn ABL. We're in good shape. We are bringing new merchandise brands to it. Importantly, some of the other brands that were nervous about us, when I say nervous, not about Simon and ABG, but nervous when you go through a bankruptcy, reestablishing those relationships, and giving the vendors comfort that we're going to be around and able to pay for the goods, has been really rewarding and we're seeing more and more confidence from the vendor community. When you go through bankruptcy, not only landlords get burned, but vendors get burned. It's very important for us as new owners taking JCPenney out of bankruptcy, that we give the vendors comfort that we're going to be around to do it. Now, the ultimate move toward growth is the future of what we're working on. We're not there yet. We've stabilized it. We are bringing in new brands. We've got lots of ideas in what to do there. The first goal is to right size the company, strengthen the financial capabilities, repair any vendor relationships that we need to do, stabilize the morale and so on. Obviously, that's harder to do in COVID when people are working remotely. I've been proud of the execution, and so far the results are planned as above where we thought it was going to be. That's very encouraging. In order to turn JCPenney into a 21st century retailer, that's still work in progress. Understood. Thanks, David. Thank you. Our next question is from Craig Schmidt of Bank of America. Your line is open. Thank you. I'm thinking about sales per square foot. If you were to annualize 1Q sales, are you within spitting distance of your pre-COVID sales per square foot, or is there still a ways to go? Well, the best, I would say, depends how far you spit, Craig. Okay? Okay. It depends if you played baseball or not, and, what do they call that when they have their What is it? Stacked comp? Stacked comp. Stacked comp, that's the word I'm looking for. Just to give you a sense of the best way for us to look at it is March of 2019 to March of 2021. We're way over March of 2020. We're 130% above March of 2020. Put that aside because that I would say to you, when you put it all together in March of 2021 compared to March of 2019, comparable, so same basically stores. We're minus 7%-8%. Okay. When you look at April and March together, I think we're going to be ahead of sales for April, March of 2019, April, March of 2021. Okay. Is that helpful? Yes. That's very helpful. I think that's the way to do it. Yeah, I think we're in spitting distance, I think we'll be ahead as April sales come rolling in, if you put the two months together, we'll be ahead. Great. I know you were talking earlier about possibly ramping up redevelopment and developments. Would you think more would be spent on mixed use efforts or anchor repositionings? I think we'll end up, given the move toward the suburbs and what's happening there and away from CBDs, I actually again, this is just a gut feel, so I actually think they'll probably be more toward mixed use. I really do. Okay, just finally, are you planning to introduce a lot of your SPARC brands into JCPenney? Like, can we see Eddie Bauer department in JCPenney's future? I think it's not just SPARC brands, but it could be ABG brands. Remember, ABG owns. They have the IP for a lot of different brands. The answer is, without question, it takes time, obviously, to design it, manufacture it, and get it in there. I would think in 2022, maybe even late 2021, we'll start to see a lot of the ABG brands end up in JCPenney. Okay. That's it for me. Thanks. Thank you. Our next question is from Floris van Dijkum of Compass Point Research & Trading. Your line is open. Afternoon, guys. Thanks for taking my question. David Simon, obviously, very encouraging so far, talking about comparable sales of 4%-5% this year for your historical SPG portfolio. Presumably, Taubman is going to see something similar. Are you working on any initiatives in the TRG portfolio? I'm thinking more of one of the things that sets SPG apart from some of its peers is your focus on specialty leasing, kiosks, things like that. Is that going to be more of an element in the TRG portfolio, or are they going to remain a more traditional high-end retailer? Or where do you see the revenue opportunities in TRG in particular? Could that same store growth actually be higher as a result of not having some of these things that SPG has had in the past? Yeah, I think that the short answer is without question. First of all, you can execute any program we have and still maintain a high-end mall. Put that aside, we have a lot of resources to bear. We've got a big field operation. We're basically in most all of their markets. I think by doing local leasing, specialty leasing, sponsorship at the rate and at the level that we do, we're going to see significant upside in TRG. In fact, we basically implemented, in many cases, the existing SPG sales force, for no better word, to start selling our product to that portfolio. That's actually been implemented, and we're at work on it. The working relationship to execute that was honestly great and a lot easier than when I had to deal with Chelsea folks. The relationship, the coordination on leasing and development, me and Rick and the Taubmans, doing all of that stuff has been excellent. Yes, the short answer is there is upside, and they were limited in resources, frankly, to do it, not out of neglect or out of a different point of view. They just didn't have the people, the scale to do it. Here we go. We're ready. We're doing things like insurance that we have more scale to bear. There's all sorts of those things that we're bringing to bear with open arms on both sides. I do think that portfolio will have a little bit higher uptick with time than probably us, because we already do it and they don't. We'll hope to see some of the benefit of that in the future. Great. Thanks. Maybe one follow-up. If you could maybe comment, you're now on both sides of the table, if you will. You're the landlord, and yet you also own these retailers. Does your confidence that you're exuding in this call partly stem from the uptick that you're seeing in the retailers that you've made an investment in? Maybe if you could share some of the growth in maybe sales for those retailers. You sort of commented a little bit about that, but also the growth in EBITDA that you potentially see going forward for the retailer part of your business. Obviously that's data that helps us. I mentioned in the call, Floris, that literally just two brands in SPARC, Forever 21 and Aéropostale, are literally $135 million over their plan already. Now, their February wasn't as great. As you know, remember February had a lot of uptick in COVID. It's short. It's a great reference point and it does give us confidence. We're seeing similar good results in JCPenney. Importantly, our guys across the board talk to all sorts of retailers, from luxury to moderate to department stores. People are feeling pretty good. Look at the retail stocks. The retail stocks have blown past us. I had Tom Ward do a thing for me. We're still below our pre-COVID price, yet the retailers are, in many cases, 200% higher than what they were. The answer is yes, we have a lot of data. We understand the consumer better than ever. Importantly, we have content now that allows us flexibility and knowledge that we didn't necessarily have before. Thanks, David. Sure. Our next question is from Michael Mueller of JPMorgan. Your line is open. Yeah. Hi. In terms of the $0.07 of COVID reserves and abatements, was there any prior period collections that were positive offset within it that may not repeat? Nothing material. We did collect deferred rent of how much, Brian? The deferrals, we collected $100 million of previously deferred rents. But that was earnings that we recognized last year. It was simply working capital adjustment, Michael. That didn't flow through the P&L, but it's always good to see a collection of deferred rent. No, not anything noteworthy at all there, Michael. Okay. That was it. Thank you. Thanks. Our next question is from Linda Tsai of Jefferies. Your line is open. Hi. Just looking at your NOI overview disclosure on page 16. It looks like your share of NOI from retailer investments and also corporate and other NOI sources were down a bit sequentially. What was driving that? Well, Linda Tsai, it's Brian McDade. With respect to the NOI from retailers, you got to remember the seasonality of the retail business. Typically, first quarter is the low mark. You're actually seeing a positive contribution here relative to historical. Sequentially versus fourth quarter, you would be down because the fourth quarter is obviously the biggest point in the year. With respect to corporate and other NOI sources, we do provide the breakdown of that. What you see coming through that line is an increase in lease settlement income. Offsetting that is some further reductions from our auxiliary lines of business in the first quarter relative to the first quarter of last year. Simon Business Ventures, those kind of businesses were down relative to a full quarter last year. Thanks. Just in terms of the strength in 1Q leasing, can you just talk about who the backfill options are? Are they existing retailers or more new to market? I missed the question. What? Backfill options in leasing. Well, there's a lot. I hate naming names, but you've got a lot of the D2C guys that are growing their business. I mentioned to you, American Eagle is growing their business. Urban Outfitters is growing their business. It's really across the board. Restaurants, the luxury folks, Prada, Gucci, Louis Vuitton. It really is encouraging. It is really encouraging to see it not in one particular category, but across the board. Levi's, rue21, Lucky Brand, I mentioned Aerie, Marc Jacobs, Bottega Veneta, Saint Laurent. SPARC is growing some opportunities. We had a Golden Goose open, Warby Parker. Craghoppers, a U.K. outerwear brand. I really miss Rich when this happens. Okay? I'm going to have him come in for a cameo. Okay? I don't do as good a job as Rich, but when it comes to that. It is across the board. Thanks for that. Sure. Our next question is from Haendel Emmanuel St. Juste from Mizuho Securities. Your line is open. I guess that's me. Thank you for taking the question. Hi, David. How are you doing? I'm doing well, sir. Hope you are too. Yes, thank you. Question on occupancy. You talked a bit earlier about rebuilding the occupancy, the timeline, I guess I was more curious specifically from a cash paying perspective. I think you said you could be back in 2019 occupancy levels by perhaps 2022 or 2023, what do you think we'll see the cash flow impact of that? Is that another year out, so maybe this is more like 2023? Well, there's clearly a lag impact, yeah. I think that's a fair statement. Look, we've run lots of numbers. When do we get past our 2019 numbers? We're certainly not going to get there this year. We're certainly not going to get there next year. Could it be 2023, 2024? Look, it's so dependent upon the economy and what's out there. I think the ability to see that closer than what we thought a few months ago is there. That's the goal. Every day, we're grinding to make that happen. Fair enough. Thank you for that. Just a couple of follow-ups on the guide. I understand the restrictions are still ongoing and beyond your control in the international portfolio, but I was curious, maybe you could talk a bit about what's implied in the guidance for international this year. You mentioned the $0.08 drag in the first quarter. Is that a level we should expect again in second quarter, and when do you expect that to improve? Also one for Brian, I was curious about the level of bad debt reserves you're carrying at the end of the first quarter here, and perhaps maybe speaking to the broad industry exposure or probability of recovery of some of that and anything implied in the guide. Thank you. Well, I'll do Europe. Europe, we will see a further impact in Europe Q2 against our plan. My guess is probably in the $0.04-$0.05 range, if I had to guess. I'm hopeful we'll be on plan the rest of Q3 and Q4 as it picks up. Now, to the extent that there's anything like the U.S. where there's some pent-up demand, we may see a little bit of outperformance in Q3 and Q4. We're not anticipating it. Clearly, we're going to see in the $0.04-$0.05 range compared to our plan and our guidance. When I talk about international, it's really Japan is the squishiest because of COVID and their caution, obviously, with the Olympics coming up. That could be another $0.02 internationally. Haendel, with respect to your other question about recoverability of the reserves. At year quarter-end, we were appropriately reserved. As you heard us say, that we did not get any positive impact in the first quarter from that, and that's our expectation from the balance of the year. The reserves that we're establishing, we expect to be true reserves and write-offs, not a recovery. Okay. That level again? Sorry, what was that at the end of the first quarter? It was consistent with prior years, but we're not giving out individual levels. Okay. Fair enough. Thank you. Our next question is from Ki Bin Kim of Truist. Your line is open. Thank you. Good evening. Just going to your top five tenant list, noticed some decreases in store counts at least for your top five. Just a little bit of an open-ended question here, but just curious if you can provide any color, and should we expect some further fallout? Well, look, I think all of the retailers were very conservative in dealing with COVID. If these leases happen to expire during that awful shutdown and the restrictions and all of that, they closed stores. Like I said earlier, there's going to be a few retailers that we're not going to be able to find a happy medium with, and we may lose their entire fleet. We're ready for it, and a lot of our expectations are already in those numbers. We'll see. Yeah, I think, for some of the big retailers, they've announced public store closings. I don't want to get into which. All of that's out there if they're public. They're all thinning their fleet, and the fact of the matter is, if they do, they do. We're used to leasing up space. Okay. Can you just comment about some of the lease clauses and language that's being used today for the new lease deals? I'm just, in particular, more curious about if tenants have more outs. I know you mentioned more percentage rent deals as they hit breakpoints, but I'm just curious if there's some other language with regard to future pandemics or things like that might create some variability. Not really. There's always a lease here or there with 20,000+ leases. There's always some variability. The reality is, during the COVID renewals, those were difficult discussions. Everybody was under enormous pressure. In some of those cases, like I said earlier, we reduced our base rent to bet on sales. We'll see. Maybe we did a better deal than what we thought we had done at that time, okay? Believe me, I'd prefer to have had the higher base rent. There's very few very focused on pandemic language. At this point, there's no material or even meaningful trend in that language. I would say, generally, lease terms, it depends on the retailer. Maybe in some cases, they're very similar to what they've been. We're very focused on lease terms. We don't willy-nilly just do a deal to do a deal. There's a lot of give and take. I would say there's no real super trend that's going on in lease terms. There's always a give and take, but nothing of note that I think we should share at this point. Okay. Thank you. Sure. Our next question is from Vince Tibone of Green Street. Your line is open. Hi, good evening. How sensitive is your NOI this year to tenant sales? It would be helpful if you could provide some guideposts there. For example, just if tenant sales this year came in at 2019 levels, how different would it be if, let's say, tenant sales were 10% higher this year than 2019? Well, it's very complicated. It's very complicated because it's lease by lease. It's where their natural or unnatural break is. It's when it hits. It's what they tell us, what we audit. Sure. The simple answer, Vince, as much as I'd like to tell you, we don't really guide to that. We do it in our own budgets. We're a big company, sophisticated company, lots of ins and outs. I think that's how we want people to think about us as opposed to what the percent rent is here versus there. It kind of ebbs and flows. We'd like people to think about us a little bit in a more broader context. That's fair. Any rough ballpark? Is it a 20 basis points impact if that 10% swing in sales or is it 2% or 3%? Any kind of rough sense, because tenant sales, obviously, one of the big markers we're following, but just trying to get a sense of how much it truly matters for FFO or NOI this year. Well, I'd say simply, if we end up at 2019 sales, we'd be happy. How's that? Okay, fair. is smiling, okay? Okay, fair enough. Tom does not smile. It takes him a lot to smile. One more for me. It looks like temporary tenants continue to take more space in the portfolio. Could you discuss the overall strategy as it relates to backfilling space with these lower rent-paying temporary tenants? Just whether you expect the square footage leased to these temporary tenants to move higher or lower from here. Well, frankly, Vince, we have more space because we've lost space. Remember, as you know, we don't add that into our occupancy unless it's a year lease. Again, we like doing business with local and regional entrepreneurs that are bootstrapping their way up to try and build a business. Our most famous retailer in that is Finish Line, when they came in and Finish Line's from Indianapolis. Those guys started with one store and they grew. Obviously, they were just bought by JD Sports, we don't know who the next Finish Line is. We did the same thing with Lids, where they started with one or two stores. You never know. We like that business. It also creates a uniqueness to the real estate and the local. I was actually just reviewing the book that our specialty leasing folks put together for me every quarter. The mix and the customer care that these people have with their communities is great. The product's getting better and better. It's an important part of our business. We have more space to fill because of either bankruptcies or some of the larger folks because of COVID reducing their store counts. We're proud of that business. We like working with entrepreneurs. We like finding the next Finish Line, the next Lids. We don't know where it'll be, but that's what our people try and do. It also makes the real estate look and feel better than a vacancy. If you walk one of our centers, I hope you feel like. Obviously, there's frictional vacancy because if you're building out a store, somebody's moving in or out. I want people to feel like it's full. The last thing you want to do is, you walk down Madison Avenue, you know there's kind of a problem there, right? When they walk a mall, I want them to feel like it feels good. It's just a good, solid part of our business. I'm proud of what we do there, proud of the people that we lease to. That's a business we'll continue to foster. Again, it doesn't always work out for the entrepreneur and for us, but it's something that we like to focus on. Makes sense. Thank you for the time. Thank you, Vince. Our next question is from Juan Sanabria of BMO Capital Markets. Your line is open. Hi, good evening. I was just hoping to touch on Michael Bilerman's earlier question on the development and redevelopment schedule, and just saw the expected yields come down a tick on a couple of the different buckets, and I was just curious if that was more of a mix issue or if the underwriting has changed on expected rents or the timeframes have widened out as a result of COVID? If you could provide any color, that'd be helpful. Hey, Juan, it's Brian. This is simply mix. Every time we produce a schedule every quarter, there's projects that come in and out, and so it's a mix change over time from the fourth quarter. Great. Then, a second question is just on the retailer EBITDA contribution. I believe you spoke to a $260 million number for 2021. Just curious on what your sense for that number is now, kind of pre Eddie Bauer, if you have it handy. Well, Eddie Bauer won't close. It'll be higher, but Eddie Bauer won't close probably until two months. Yeah. It'll be higher. How's that? Is that helpful? I think the $260 included our share of everything, including JCPenney. Yes. We're above that now. Hopefully, again, retail does have its ebbs and flows, but we're projecting to be greater than that already without Eddie Bauer. Then I think Eddie Bauer, once it closes, will clearly add to that. It's going to be a very good deal for SPARC there. I'm a little nervous because my guys at SPARC have done a great job. Marc Miller, CEO, Dave Dick, CFO, are thoughtful, conservative, great stewards of the brands, great partners of me and Jamie Salter of ABG. I'm just nervous because they were really excited about Eddie Bauer, and I'm like, "You guys are never excited about anything. Now I'm nervous," okay? No. They think it's going to be a great addition. Hey, Juan, just one thing to point out, obviously, is relative to our retail investments, we don't add back depreciation and amortization, so the FFO contribution is much less than the EBITDA contribution. Yep. Got it. Thank you very much. Thank you. Of course. Our next question is from Greg McGinniss of Scotiabank. Your line is open. Hey, David. Just to maybe touch on that last question a little bit differently. On the last call, it was a $0.15-$0.20 contribution FFO from the retail investments. Is it fair now that there's a higher number assumed for the contribution to guidance? Yeah, I think that's to say. I don't know, Greg, what the number is off the top of my head, but hopefully it will outperform our initial budget. Okay. Just kind of grounding out the guidance questions. Could you tell us what's built in regarding additional lease cancellation income? Nothing material. For the balance of the year, nothing material, Greg. Yeah. Nothing really on our radar. Okay. Thank you very much. Thank you. Thanks, Greg. There are no further questions on queue. I will turn the call over back to David Simon for any closing remarks. Thank you. Thanks for your interest and all your questions. Look forward to talking to you soon. Take care. Ladies and gentlemen, this concludes today's conference call. You may all disconnect. Thank you.