Financial Data and Key Metrics Changes - Real estate FFO increased to $3.22 per share in Q3 2025, up from $3.05 in the prior year, reflecting a 5.6% growth [8] - Domestic NOI rose by 5.1% year over year for the quarter and 4.2% for the first nine months of the year [8] - Total funds from operation were $1.23 billion, or $3.25 per share, compared to $1.07 billion, or $2.84 per share last year [10] - The company announced a dividend of $2.20 per share for Q4, a year-over-year increase of $0.10, or 4.8% [10] Business Line Data and Key Metrics Changes - The malls and premium outlets ended Q3 at 96.4% occupancy, an increase of 40 basis points sequentially and 20 basis points year over year [9] - Retailer sales per square foot for malls and premium outlets were $742 for the quarter, with total sales volumes increasing more than 4% [9] - The company signed over 1,000 leases totaling approximately 4 million square feet during the quarter, with about 30% representing new deals [8] Market Data and Key Metrics Changes - The portfolio has strong operating metrics, including 94.2% occupancy and average base minimum rent of $72.36 per square foot [5] - Retailer demand remains strong, with significant leasing activity across various categories, particularly luxury and athleisure [34] Company Strategy and Development Direction - The company completed the acquisition of the remaining 12% interest in Talbot Realty Group, enhancing operational efficiency and increasing NOI from the assets [5] - Development projects include new residential phases, hotel expansions, and retail additions across various locations, with a net cost of development projects totaling $1.25 billion and a blended yield of 9% [7] - The company is optimistic about future growth, particularly in 2026, driven by strong leasing activity and operational enhancements [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to produce comparable NOI growth in 2026, citing positive indicators from the portfolio [41] - Concerns were raised about the potential impact of tariffs on retailer behavior, but management remains optimistic about demand and leasing activity [50] - The company is focused on creating holistic shopping environments to adapt to changes in consumer behavior and technology [70][71] Other Important Information - The company has a strong liquidity position, ending the quarter with approximately $9.5 billion [10] - The full-year 2025 real estate FFO guidance range was increased to $12.60-$12.70 per share, reflecting a positive outlook [11] Q&A Session Summary Question: Operational efficiencies from Talbot assets - Management highlighted the potential for significant operational efficiencies and enhancements once the Talbot assets are fully integrated into their platform, expecting to improve yields by 50 basis points [17][18] Question: Cap rate and growth expectations - Management clarified that the implied cap rate for the final 12% of Talbot assets is around 7.25%, with expectations for operational synergies to push it above 8% over time [25][26] Question: Sales results and tenant performance - Management noted widespread increases in sales across the portfolio, with luxury and athleisure categories performing particularly well, although some tourist-oriented centers, like those in Las Vegas, are underperforming [34][36] Question: Capital allocation priorities - Management indicated that capital allocation priorities include growing dividends, buybacks, and development opportunities, with a focus on maintaining a strong balance sheet [90][92]

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]