Poor affordability and rising inventory levels continue to constrain a recovery in housing, says @conorsen. The healing will be gradual at best (via @opinion) https://t.co/vYS1ZvxOEO ...

Financial Data and Key Metrics Changes - Real estate FFO was $2.95 per share in Q1 2025, compared to $2.91 in the prior year, indicating a slight increase [7] - Domestic and international operations contributed $0.14 of growth, driven by a 5% increase in lease income [8] - First quarter funds from operation were $1,000,000,000 or $2.67 per share compared to $1,330,000,000 or $3.56 per share last year, reflecting a decrease [9][10] - The company announced a dividend of $2.1 per share for Q2, a year-over-year increase of $0.10 or 5% [12] Business Line Data and Key Metrics Changes - The occupancy rate for malls and premium outlets was 95.9%, an increase of 40 basis points year-over-year, while mills occupancy was 98.4%, an increase of 70 basis points [8] - Average base minimum rents for malls and outlets increased by 2.4% year-over-year, and mills increased by 3.9% [9] - Domestic NOI increased by 3.4% year-over-year, while portfolio NOI, including international properties at constant currency, grew by 3.6% [9] Market Data and Key Metrics Changes - Retailer sales per square foot for the quarter was $7.33 [9] - Traffic through the quarter was slightly down, but year-to-date through April, it was up, indicating a mixed performance across different periods [33] Company Strategy and Development Direction - The company completed the acquisition of luxury outlet malls in Florence and San Remo, Italy, and opened its first outlet in Jakarta, Indonesia, as part of its strategy to enhance its retail real estate platform [5] - The company is maintaining a cautious approach to capital allocation and development, expecting construction costs to increase and being selective about new projects [77][78] - The development pipeline is expected to include approximately $500,000,000 in new starts, with a focus on mixed-use projects [11][83] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current operating environment, noting strong demand for leasing despite some uncertainties related to tariffs and inventory levels [22][56] - The company is reaffirming its full-year 2025 real estate FFO guidance range of $12.4 to $12.65 per share, reflecting a cautious outlook due to macroeconomic uncertainties [13] - Management indicated that while sales are currently flat, they expect to see improvements as inventory levels stabilize and consumer sentiment remains positive [55][60] Other Important Information - The company has a strong balance sheet with over $10 billion in liquidity and a net debt to EBITDA ratio of 5.2 times [6][12] - The company is actively refinancing $2.8 billion of debt, with lenders remaining comfortable with the asset class [129][130] Q&A Session Summary Question: Impact of tariffs on leasing - Management noted that only one European retailer was affected by tariffs, and overall demand for leasing remains strong [17][22] Question: Retailers' inventory levels and sales trends - Management indicated that retailers have about a month to decide on inventory from China, and while some are reducing exposure, demand remains stable [35][36] Question: Changes in approach to tenant negotiations - Management stated that it is business as usual, with strong demand and constrained supply, although they are attentive to specific tenant issues [41][42] Question: Performance of Forever 21 spaces - Over half of the Forever 21 spaces have been leased, with expectations to double the rent over the next two years [48][50] Question: Consumer sentiment and sales outlook - Management believes consumer sentiment is currently stable, but there is caution regarding tourism and its impact on sales [57][58] Question: OPI performance and tariff impacts - OPI showed improvement, with expectations for positive EBITDA despite uncertainties related to tariffs [66][70] Question: Macroeconomic uncertainty and capital plans - Management is taking a more cautious approach to capital plans but remains open to opportunities as they arise [77][80] Question: Trends in luxury tenant sales - Luxury tenants are performing well overall, with some brands updating their offerings, but sales growth has been relatively flat [120] Question: Potential for pull forward demand in Q3 - Management acknowledged the possibility of pull forward demand for the holiday season, which could impact margins positively [124]

Financial Data and Key Metrics Changes - Real estate FFO was $2.95 per share in Q1 2025, compared to $2.91 in the prior year, indicating a slight increase [5] - Domestic and international operations contributed $0.14 of growth, driven by a 5% increase in lease income [6] - First quarter funds from operation were $1 billion or $2.67 per share, compared to $1.33 billion or $3.56 per share last year [7][8] - The prior year results included $0.81 per share in after-tax net gains, primarily from the sale of the company's remaining ownership interest in ABG [8] Business Line Data and Key Metrics Changes - The occupancy rate for malls and premium outlets was 95.9%, an increase of 40 basis points year over year [6] - The mills occupancy was 98.4%, an increase of 70 basis points compared to the prior year [6] - Average base minimum rents for malls and outlets increased by 2.4% year over year, while mills increased by 3.9% [7] Market Data and Key Metrics Changes - Mall and premium outlet retailer sales per square foot were $7.33 for the quarter [7] - Domestic NOI increased by 3.4% year over year, while portfolio NOI, including international properties at constant currency, grew by 3.6% for the quarter [7] Company Strategy and Development Direction - The company completed the acquisition of luxury outlet malls in Florence and San Remo, Italy, and opened its first outlet in Jakarta, Indonesia [4] - Development projects underway have a net cost of $944 million with a blended yield of 9%, with approximately 40% being mixed-use projects [10] - The company announced a dividend of $2.1 per share for Q2, a year-over-year increase of 5% [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current operating environment, noting strong demand despite some uncertainties related to tariffs and inventory levels [20][21] - The company reaffirmed its full-year 2025 real estate FFO guidance range of $12.4 to $12.65 per share, expecting results to trend towards the middle of the range [12] - Management indicated that while there are uncertainties, the overall consumer sentiment remains stable, and they are cautiously optimistic about future sales [51][53] Other Important Information - The company completed 12 secured loan transactions totaling approximately $2.6 billion, with a weighted average interest rate of 5.73% [11] - The company is actively managing its capital allocation strategy to adapt to diverse macroeconomic cycles [5] Q&A Session Summary Question: What conversations are being had with retailers regarding leasing? - Management noted that only four deals were affected by tariff concerns from one European retailer, indicating strong overall demand [15][20] Question: What is the inventory perspective for retailers? - Retailers have about a month to decide on inventory sourcing from China, with many reducing exposure to Chinese imports [32][33] Question: How is the company approaching tenant negotiations amid uncertainty? - Management stated that it is business as usual, with strong demand and constrained supply, and they are not making significant changes to lease negotiations [39] Question: What is the outlook for department store closures? - Management does not expect major changes in department store closures, as it varies by retailer and their reliance on private label goods [95] Question: How is the luxury tenant market performing? - Management reported that luxury tenants are generally stable, with some brands performing well while others are updating their offerings [113]