Simon Property Group has negotiated to purchase an 80% stake in the Taubman Realty Group for $3.6 million in cash, expecting to close in mid-2020. Simon will be acquiring Taubman’s common stock for $52.50 per share and one-third of its ownership interest, with Taubman still remaining a 20% partner. Taubman’s property portfolio will continue to be managed by its existing executive team being led by the CEO Robert S. Taubman. Simon Properties claims to enhance Taubman Realty Group’s ability to invest in innovative retail environments that will create a thrilling shopping and entertainment experience for each customer, increased opportunities for retailers, and also new jobs for local communities.
The value is in the underlying real estate. With the acquisition of Taubman, Simon is making a long-term play on the underlying real estate and opportunity to repurpose the property in the future. Over time, I expect that Simon will do like what Kimco is doing with some of their urban infill shopping centers assets by creating mixed use projects. Development projects that create a nucleus for a live, work, play environment that organically create synergies and has built in traffic are sustainable. The options are endless! The mall of the past is not the mall of the future and it will be interesting as to how mall assets will be transformed over the next 10-20 years.