SPG - NYSE

Greetings. Welcome to Simon Property Group Second Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Tom Ward, Senior Vice President, Investor Relations. Thank you, sir. You may begin.

Thank you, Sherry. Thank you for joining us this evening. Presenting on today's call are David Simon, Chairman, Chief Executive Officer and President; and Brian McDade, Chief Financial Officer. 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, and 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 related 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. Our conference call this evening will be limited to 1 hour. 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. I'm pleased to introduce David Simon.

Good evening, everyone. We delivered robust financial and operational results yet again for the second quarter. Occupancy gains, increased shopper traffic and higher retail sales volumes contributed to strong cash flow growth. We continue to enhance our retail real estate platforms through development, redevelopment and acquisitions, including the purchase of our partners' interest in Brickell City Centre, a premier mixed-use property in Miami and its rapidly growing Central Business District. Our focus remains on creating long-term value through disciplined investments and operational excellence that drive growth in cash flow, funds from operation and dividends per share which, yet again, we raised. I'm now going to turn it over to Brian, who will cover our second quarter results in more detail.

Good evening, and thank you, David. Real estate FFO was $3.05 per share in the second quarter compared to $2.93 in the prior year, 4.1% growth. Domestic and international operations had a very good quarter and contributed $0.21 of growth, driven by a 5% increase in lease income. As anticipated, lower interest income and higher interest expense combined for a $0.07 drag year-over-year. Domestic property NOI increased 4.2% year-over-year for the quarter and 3.8% for the first half of the year. Portfolio NOI, which includes our international properties at constant currency, grew 4.7% for the quarter and 4.2% for the first half. We signed approximately 1,000 leases for more than 3.6 million square feet in the quarter, with approximately 30% of our leasing activity for the quarter on new deals. Nearly 90% of our leases expiring through 2025 are complete, ahead of this time last year. The Malls and Premium Outlets ended the second quarter at 96.0% occupancy, up 10 basis points sequentially and 40 basis points year-over-year. The Mills achieved a record 99.3% occupancy, an increase of 90 basis points sequentially and 110 basis points from the prior year. Occupancy remained strong across the portfolio, overcoming retailer bankruptcies of approximately 1.8 million square feet this quarter. Average base minimum rent for the Malls and Outlets increased 1.3% year-over-year and the Mills increased 0.6%. Sales for Malls and Premium Outlets per square foot were $736 for the quarter. And occupancy costs at the end of the quarter were 13.1%, flat sequentially from Q1 of '25. Second quarter funds from operation were $1.19 billion or $3.15 per share compared to $1.09 billion or $2.90 per share last year, 8.6% growth. Second quarter results include a $0.21 per share noncash after-tax gain, primarily due to Catalyst Brands' deconsolidation of Forever 21, in addition, better operational performance at Catalyst Brands compared to last year. And lastly, a $0.13 per share noncash loss from the unrealized mark-to-market adjustment on our exchangeable bonds due to the outperformance of Klepierre's share price, which increased 8% during the second quarter. Now turning to development. At the end of the quarter, development projects were underway across all platforms with our share of net cost of $1 billion at a blended yield of 9%. Approximately 40% of net costs are for mixed-use projects. As David mentioned, we acquired our partner's interest in Brickell City Centre. Our $512 million investment includes the retail and parking components and is accretive. We now wholly own and manage this highly productive center and look forward to enhancing operations with efficiencies in our leasing and management expertise to drive NOI growth. Turning to the balance sheet and liquidity. During the first half of the year, we completed 21 secured loan transactions totaling approximately $3.8 billion. The weighted average interest rate on these loans was 5.84%. And we ended the quarter with over $9 billion of liquidity. Turning to the dividend. Today, we announced our dividend of $2.15 per share for the third quarter, a year-over-year increase of $0.10 or 4.9%. The dividend is payable September 30. Now moving on to guidance. We are increasing our full year 2025 real estate FFO guidance range to $12.45 to $12.65 per share compared to $12.24 last year. This is an increase of $0.05 at the bottom end of the range and $0.03 at the midpoint. With that, thank you, and David and I are now available for your questions.

[Operator Instructions] Our first question is from Jeff Spector with Bank of America.

Given them first, I'll keep it high level. So just given all the uncertainty, ICSC to today, I guess, could you describe for us the leasing velocity you're seeing, some of the demand may be a peak in to your last leasing meeting in terms of quantity, deal flow and quality of the deals, please?

Unabated. So you're right, Jeff, in the sense that the whole world and -- is uncertain, a lot of geopolitical stuff going on, obviously, a lot of domestic political stuff going on. New York City, thankfully, we're not an investor in New York City, but obviously, a lot of political uncertainty in New York City. Tariff swings back and forth, interest rate uncertainty, you can name it. However, you have unbelievable stewards that are -- in particular, they are able to manage that. And in addition, retail demand is really unabated. And the physical shopping environment continues to be the place to be. So we're quite bullish about what we've done, what we are doing, where we are going despite all of the headlines that are out there. So unabated. And if you look at our 33-year almost track record, I kind of laugh -- not just -- I guess, not to segue, but to segue. Now I kind of chuckle to myself in that some of our -- you read all these companies that are restructuring, well, now they're going to lease their properties better. Now they're going to manage their balance sheet better. Now they're going to bring in new management and be better. Now if you look at our particular little niche, we've had bankruptcies, we've had people that have bought companies that have overpaid that had to restructure their operations, wholesale management changes, restructuring of operations, just that the other. There's one group that's never done that, and that's us. And all we've done is run our business appropriately, and we'll continue to do so. And it's something that I think investors and analysts in particular, Jeff, should point that out, you've never read about a Simon Property Group restructuring. Yes, we had to do some certain drastic things to deal with COVID and to deal with great financial crisis, but there's been no restructuring of this company, only things that have benefited shareholders. So the headline risks that are out there, they're real. And the tenant demand is unabated. Traffic is up, sales are holding their own and our properties are continuing to get better.

Our next question is from Michael Griffin with Evercore ISI.

Maybe just diving into that tenant demand piece a bit more. It probably seems like the national retailers and concepts have a greater footing or clarity around their real estate footprint needs. But for maybe some of those smaller tenants, maybe those mom-and-pop local concepts, are you still seeing strong demand from those as well? David, you touched about kind of across the board demand, but just curious if you can kind of bifurcate those 2 pieces.

Yes. Yes. You're right. Last quarter, I did express my concern about that segment given how tariffs might affect them and their cost of goods. But it's -- they're doing -- they're beating their plans so far this year. So it's all systems go there. I'm sure there's trepidation, but they're -- I think they're managing it as best they can. I still think the full story, obviously, given the volatility has not been written, but we're not seeing it in demand. And that particular business that is sensitive to moms-and-pops continues to perform well. So we're more optimistic about that segment than I was last quarter. But like I said, it is something that we're watching closely.

Our next question is from Caitlin Burrows with Goldman Sachs.

Maybe just on the acquisition side. You guys were active in the first half with acquisitions, which was exciting to see. So I was wondering if you could talk a little bit more about the upside you see at Brickell. And then more broadly, to what extent other acquisition opportunities seem to exist for Simon today, either from JV partners or otherwise?

Sure. Well, Brickell is a really good asset that long term will be great. Miami, Caitlin, I'm sure you're familiar with it. We're in the Central Business District. There's no real retail that can be built in that. Because of the traffic of Miami, it's kind of its own submarket. And even though there's a lot of retail generally in Miami, just because of the traffic and the population density and the tourism, it is really -- you can have a number of properties that flourish. And Central Business District, you see what [ Citadel ] is doing there. I still think you'll see a continuation of New York and Chicago companies moving there. So the job prospects are great. And Brickell in itself deals and attracts a lot of international customers and tourisms, it's got the hotels, it's got the nightlife. And we just think the asset is going to get better and better, and there will be more development around it that will continue to fuel its growth. And we bought it on a very accretive basis. We bought it at a higher cap rate than the strip centers that are being sold today, strip centers that are subject to probably easier competition, easier to build. And Brickell, we bought it at below its replacement cost by far. It hasn't even had its first rollovers of rents. And again, I think we'll do -- now this is our core business. So I think we'll do better leasing and managing the asset. So we're very excited about Brickell as we are with the mall. And we're working on a few other things that we're able to do, and I mentioned this before, we're working on some other interesting things that we're able to do because we've never gone through a restructuring. Oh, great -- it's great to buy a mall because you haven't bought anything in a decade. Well, that's never been us. And -- so we'll keep finding opportunities where we can grow our platform, but we're going to be picky on what we buy and what we want to do. But we're able to do it because this company doesn't need to sell a bunch of assets, doesn't need to bring in a new management team. It doesn't need to downsize its platform. It doesn't need to do it because it's outperformed over a 30-plus year period that no one else has done. So we're hopeful that a couple of more things will get announced this year, and they'll be accretive. They'll add to our platform and that we'll be able to manage them better, so we'll be able to grow our cash flow.

Our next question is from Alexander Goldfarb with Piper Sandler.

Just continuing on...

We're actually in New York City. That's why I brought up the New York City comment.

Okay. Well, then you're just down the train line from us here in Greenwich. So hopefully, you're enjoying in the city. So a question, just following up on Caitlin's question on externals. For quite a long time, you've been reiterating to us that you see more investment potential in your existing portfolio versus externally. So if Tom will forgive me for a two-parter. One, what is the return threshold, the gap that you need when you go externally versus ability to reinvest internally in your existing? And two, it does seem like we're on the cusp of a mall transaction wave where capital is starting to flow back to malls across the spectrum. And just sort of curious if, in your view, this is going to set up like a repeat that we had in the, I guess, late '90s, early 2000s when there was suddenly within a few years, this massive mall trade. So wondering if you're foreseeing that. So that's my two-parter. Forgive me, Tom.

Well, you don't have to -- you don't have to ask for forgiveness from Tom. He's a very nice man. He'll give you a free pass, Alex. So look, I don't -- I think a lot goes into acquisitions. And it's not an either/or thing. I think we have, as you know, Alex, the balance sheet, the firepower to do both. And the development process, i.e., or the redevelopment process takes years to do, right? So take Brea that is under construction, and we had to buy the Sears store, we had to get approvals. We had to build -- we're about to start on the multifamily. That's over a 3-year process. So it's not like suddenly the money just goes out day 1. So we've never had this dilemma that you're suggesting where it's an either/or. And I think from a math point of view, we look at it kind of the similar basis, do we -- are we buying it or are we redeveloping or developing or are we creating net asset value? So if it's a mall, is the redevelopment yield higher than where that asset might trade? And what does it do to the overall asset's growth rate of cash flow? A lot goes into that, but that's the basics. Then on an acquisition, it's a little bit of the same thing with our expertise. What does it do for the platform? Does it deepen our relationships with the retailers? Are we buying it under replacement costs? And when we look back, will it be accretive to NAV? And so you have to take a little bit longer-term view on that. But it's not -- it has not created this situation where we can't do both. And so our goal is to continue to do both and to push to do both. And the reason we haven't done as many acquisitions is we really have been product and price sensitive, and we'll continue to be product and price sensitive because we can't create NAV without focusing on the product and the price sensitivity. So as my -- I'm on the Board of Apollo and not to quote Marc Rowan, but I'll go ahead and quote him, purchase price matters, okay? So it does. So -- and we're very focused on that. So rest assured, when we buy something, we vetted the price, really vetted the price. So going to your next thing, I'm not sure about whether there's going to be the huge mall transactions. I think you'll have other players come in buying maybe not necessarily "A" properties, but a lot of Bs -- because the reality is you can make -- you can -- you're stable and you can create a nice arbitrage and manage them and lease them and improve them. And they are a lot stickier than people believe because most malls, Alex, I hate to break it to you, but most enclosed malls are 30 to 50 years old. And yet despite the media, the naysayers, they've -- and that's not to say there hasn't been a significant amount of obsolescence. But most of them are here today still fighting a pretty good battle. And despite a lot of things not going their way. So I think there'll be more trades, but I don't -- I'm not sure it will just be this huge wave of transactions. I don't know, Brian, you can weigh in if you want, but that's kind of just some random rambling thoughts, Alex. You can comment. I will let Tom give you another pass. You can comment on my comments while Brian is contemplating whether he will want to add anything to it. So your turn...

No, I'm going to defer to others who want to ask. That was very thorough.

Brian?

Nothing to add. You covered it.

Our next question is from Craig Mailman with Citi.

I wanted to maybe circle back on some of the themes of the earlier questions, David, just a lot has happened in the last 90 days and last quarter. Your message was a little bit more realistic, I think, in the face of uncertainty and Brian kind of focused us to the midpoint of guidance. Fast forward 90 days, maybe there's been a little bit less fallout than would have expected, you guys raised the low end. Would you still kind of point us to that midpoint of guidance? Maybe update us on your views today of how you're feeling about the macro? And are you concerned about any lingering effect of policy or geopolitical happenings kind of weighing on 2026 growth?

Well, I'll let Brian kind of -- I'll be less [ robust ] than I was with Alex. I will say unquestionably, even though we raised the bottom end -- I mean, we're still very cautious about the economic environment. We have to, right? I mean tariffs are a real cost of doing business. And they're changing consistently, right? The only consistent thing about tariffs is that they've been consistently changing, right? So -- and it's a cost to do business. Now ultimately, who pays that cost? Is it the consumer? No, there's only -- first of all, it's the domestic company that imports, right? So they start with the cost pain, and you can see it by Ford and a number of other companies that say it's going to cost me $800 million or $1 billion. And then the next question is, can the suppliers chip in and then ultimately the consumer? And I think most companies are kind of working that next step or two through. So in that scenario, it is hard for us not to be cautious. And obviously, from just pure retail, are they going to be more cautious on buying than they might not otherwise be for tariffs. At the same time, the U.S. economic landscape looks -- I mean, I don't have to tell you how much money and capital is planning to be spent in the U.S. That's a huge driver of GDP. I don't think it will be all that's out there, all that's announced, but there's going to be a huge driver of GDP growth. The ultimate ramifications of those investments are uncertain, but that's several years down the road, I believe. So we're optimistic about the growth profile of the U.S., but I mean it's -- there's a lot of variabilities that all companies are dealing with. So again, I said I wouldn't be long-winded. It turns out that I was. But -- so I think the bottom line is we're being a little more cautious. I think '26 actually, to me, might feel better only because by then, you'll know the tariffs. The tariffs could be a onetime cost at that time between the suppliers and the vendors or the importers, you've kind of figured out who's going to pay for it, and it will surface and then you'll be able to go forward and operate the business. So I don't think '26 will have this kind of volatility from the tariff scenario, and it actually could look better. Brian?

Craig, I guess all I would add to that is as you look at kind of what we did for guidance, certainly looking back in our history, it is not -- we traditionally will bring up the bottom end of our range at this point in the year after seeing the first 6 months, occupancy is up, FFO is up. So I think we're cautiously optimistic to David's point for the balance of the year.

Our next question is from Michael Goldsmith with UBS.

David, I think you've mentioned increased shopper traffic on the call twice now. So are you able to quantify what you're seeing? And is there any difference in the traffic growth between mall and outlet or any other way that you can segregate it with the goal of trying to understand if the consumer is -- if there's any trends for the consumer at different price points?

Yes. It's -- our traffic is up 1.5%. So that's the number. I would still -- we're not operating on all cylinders and where we see a little bit of sales and traffic weakness are border -- these assets are still great, so don't get me wrong. But generally, they provide pretty healthy sales growth. And right now, they're relatively flat. But I would say the softness at least based upon historical results has been assets on -- and it doesn't really matter whether it's an outlet or a full-price mall, but it's assets that are on the border north or south, okay? It's almost irrelevant, whether it's Canadian border or the Mexican border. And so from a sales and traffic point of view, we're not hitting on all cylinders because those -- that freedom of going back and forth to shop or whatever is restricted. And I would also say we're not seeing the benefit that normally you might see from a weaker U.S. dollar vis-a-vis the euro or certain other currencies as the international tourists is not growing or flatlining in terms of people the way you might see historically. So those kind of tourist-oriented centers are not -- again, they're great centers. So they have a high bar to achieve. But they're not -- hopefully being articulate, but they're not outperforming like they always do for us. They're kind of in line. So therefore, we're not, in my opinion, not performing at the highest level because those great properties border, North-South tourism are kind of operating within the normal portfolio performance. Makes sense? Do you understand what I'm saying?

Absolutely.

Our next question is from Floris Van Dijkum with Ladenburg Thalmann.

David, maybe if you could comment on last -- I think last quarter, I asked about your [ S&O ] pipeline of being around 300 basis points. And as I look at your portfolio, your Mills assets are 99.3% leased or something like that. Is this getting to be the new normal on the supply-constrained market? I did notice your TRG assets saw a drop, but the [ rents ] were up markedly. Maybe if you can talk a little bit about where the greatest growth potential is in your view in -- between the various segments of your portfolio. If you could maybe expand on that and then maybe talk -- update on the S&O pipeline as well, please?

So Floris, I'll start with the S&O. It's at 340 basis points at the end of the quarter. As we think about and you've heard us talk about occupancy, it's the optimization of that occupancy is where we're kind of [ at, Floris, ] in the cycle now. And so it's really finding merchandise mix and finding tenants that make us -- the properties better. And so there will be more of that replacement of existing tenants with new tenants going forward that's really going to drive the performance of the portfolio. And it's across all of our asset classes. So the Mills is still even in a high occupancy, the tenant demand is still strong and we're able to replace underperforming tenants. And I think you said the same across the Outlet and the Mills businesses -- I mean, excuse me, the Outlet and the Malls businesses as well.

Yes. And [indiscernible], there's no -- TRG, no real -- it's a smaller portfolio, so a swing here and there has a bigger impact, a couple of Forever 21. So as Brian mentioned in the text, we 1.8 million square feet in bankruptcy, 1.7 million of that was Forever 21, that has a bigger impact on a smaller portfolio. And that's really what transpired at the TRG level.

And in terms of occupancy, is 99% your goal now internally? Do you think you can [indiscernible] other platforms as well?

I mean I don't want every space leased with the highest productive tenant. I think it's an interesting tidbit, 99.3%. I don't get excited about it one way or another. Next quarter, it could be 99.5% or it could be 99.1%. I think it's neither here nor there, okay? We're doing -- the team is doing a good job, though. I'll give them a pat on the back.

Our next question is from Vince Tibone with Green Street Capital Markets.

I was a bit surprised Simon was not more active acquiring JCPenney boxes from Copper Property Trust. So like just big picture, can you discuss how you're currently thinking about the importance of owning and controlling additional anchor boxes at your centers and how that -- how your appetite to acquire these may vary based on center quality, near-term redevelopment prospects. I just love to pick your brain on that topic.

Yes. Well, again, this is a complicated matter, so I'm not going to talk about it specifically, but it's really up to Catalyst. We don't have any particular right to buy it. It's really up to Catalyst to -- may or -- it has the right to buy it, I'm not going to really get into that scenario, what happens. We've been very active on buying boxes and redeveloping our centers. I think everybody knows that. But as I said earlier, purchase price matters, and we are very focused on paying the right price on any given particular scenario. But again, you got to be careful, Vince, going from what PropCo is selling to Simon Property Group. There's a company called Catalyst that operates those stores. We're a shareholder in it, and it's a complex matter. And beyond that, other than to say we've been very active in buying boxes since all the various restructurings that have been going on, but we're going to pay the right price.

No, that's -- just maybe to summarize and confirm, is it kind of fair to summarize that it seems like there's probably more complexities in this structure versus this is not an indication that Simon is less interested in buying anchor boxes or the appetite has changed. I mean that's kind of what I've read through, but I just want to kind of confirm that's a fair categorization.

You can confirm, first of all, it's -- PropCo has a relationship with OpCo, which is Catalyst. We have no relationship. We, Simon Property Group, has no relationship with PropCo, none. So we have a relationship with Catalyst because they're -- in some cases, they're a tenant to us. In some cases, they're not a tenant to us, but they operate a JCPenney store in our malls. So you can't go from whatever the name of that, Copper Retail to Simon Property Group. You can't make that link and say, oh, Simon is not interested in the boxes. Would I be interested in all the OpCo boxes? No, not necessarily. Would I be interested in the Simon boxes? Potentially, sure, but then I would fall back on what the right price is. You follow what I'm saying, Vince? It's not -- you can't go from there to Simon Property Group. There's a step function in there. So -- but the simple answer to your question is do not read -- you're right, do not read any intent from Simon Property Group due to that transaction. And we'll see if it even closes. Deals get announced, but they don't close. Tariffs get announced, but they don't close. Let's see what closes when and how, and we'll take it from there.

Our next question is from Haendel St. Juste with Mizuho Securities.

David, I guess I was intrigued by your commentary earlier that the cap rate for the Brickell asset was higher than recent open-air strip asset cap rates. So I guess, I'm curious if that's more of a unique dynamic to this transaction because you were, I guess, the only logical bidder here or perhaps you have some additional color or thoughts you'd like to share on the asset pricing for top quality malls versus quality open air? And then any thoughts on what you see as the long-term opportunity either from a mark-to-market or densification opportunity at Brickell?

Yes. I just think we're great at finding opportunities. And we don't participate -- rarely do we participate in auctions. Auctions get when our friends [indiscernible] or what are some of the other [indiscernible]. When they run a process, man, they're going to find -- usually, it's pretty tough. We like to find opportunities, and I have all the respect in the world for those guys who are doing their job. But we like to figure out how to do it without that. And I think the market does not recognize the value of something like Brickell. Brickell should have been sold at an auction at a higher price than what we paid. But the market is mispriced when it comes to high quality and Brickell is not eclosed by any stretch of imagination. But if the market misprices big retail -- in this case, it has a roof, that's a moving roof, so got all sorts of stuff to it, but the market misprices which is good for us because we can take advantage of it. And I'm letting the cat out of the bag, which is probably pretty stupid. But the market absolutely unequivocally misprices big enclosed centers, shopping centers. Because if you look at the cash flow growth and the longevity, forget about it. But that's fine with us, and it's good for us.

Our next question is from Ron Kamdem with Morgan Stanley.

Just coming back to domestic property NOI. I see 3.8% year-to-date. I think you talked about at least 3% for the year. And then you made some interesting comments about how -- whether it's tariff or the strong dollar may be holding back some of the centers. Just wondering if you could just comment on how you guys see that shaping for the rest of the year? And if there's any way to quantify what sort of this headwind is doing to that number, so we get a sense what a true run rate can be?

Yes. Look, we're outperforming our year-to-date even with the volatility of the tariffs that were announced in April. The consumer is holding on. We don't update our guidance for comp NOI. There's a lot that goes into it. But we're very confident we're going to beat that number and have a very strong year. And like I said, I think leasing demand continues unabated. Sales is always a little bit out of our control, but we'll have to see how that evolves. And the -- we're seeing pretty good sales results even up to today and a pretty good back-to-school season. So we'll see how the rest of the year shapes out.

Our next question is from Linda Tsai with Jefferies.

I think it was in response to Alex's question earlier, you were discussing acquisitions in the context of deepening relationships with retailers. What are some of examples of this because I would think that you have a lot of negotiating power with the majority of retailers?

Well, we really -- I mean retailers have all the power because they can go across the street or close the store or go online, leave the market. So it's -- but the more product you have available to them, the better the relationship. So it's just a commercial relationship. If IBM sell -- if Microsoft sells Outlook to a big company, they're going to be able to sell other products to that company. So it's no different. We're -- we could talk about 20 things as opposed to 3 things, it just means we'll have a longer meeting. And maybe -- and if they have confidence in our ability to deliver a good product, maybe we'll have 21 things. But don't [ cinch ] yourself. These retailers have all the leverage because they can close stores and go across the street or leave the market or do their business online. And that's -- and we're the one begging for the new business. So I just think the more products you have, the better you are and the more likely you are to have more senior focus from that retailer, just like if you're selling widgets, if you have a bigger portfolio, you're able to spend more time with the customer. That's just commercial common sense. And that's -- they have safe in our ability to deliver a good product and have confidence that we'll operate the center appropriately, and that's why we're able to do a lot of repeat business. There's no -- there's nothing more to that than that. But believe me, they got the leverage because they don't have to operate the store.

Our next question is from Hong

David, I mean, you've talked about how you expect Brickell to be great because people are moving from New York and Chicago over to the area. I guess, have you seen the opposite impact in your New York centers, like say, Westchester or Roosevelt Field.

Well, first of all, Brickell is really, really good. So just to -- this is not a troubled asset, right? Because -- so I just want to make sure you understand that. Your second part of -- your second part?

I guess, are you seeing a negative impact in your New York assets like Roosevelt Field and Westchester if people are migrating outside of -- out of New York?

I don't think it's going to affect Long Island. I think New York City, I'd be nervous about -- urban environment. Yes. I mean I do -- there's a lot of great stuff in New York City, but I think the suburbs -- by the way, we've seen the suburbs have a renaissance primarily due to COVID, right? So I think -- and I think that the suburbs of New York City and suburb in New Jersey, Jersey City Long Island, Westchester County, all could benefit depending on the -- what happens with the City. But I don't think it's -- I don't know if this is a New York issue more, I'd say it's more of a New York City issue.

Our next question is from Tayo Okusanya with Deutsche Bank.

I am curious about the secured loan transactions this quarter. Again, you guys have an A- credit. A lot of your peers are kind of doing unsecured around 5%. Curious why you guys decided the best thing to do was the secured loans at 5.84%. I don't know whether that's a duration thing, I'm just curious.

[indiscernible] mortgage finance.

Yes, that's the mortgage...

Yes, the mortgage finance...

Yes. It's with a JV partner. So we wouldn't want to use our balance sheet for a JV partner.

I mean 10-year unsecured debt for us today is right around 5%. So on the unsecured market, we're right on top of the market where others are issuing.

It should be -- I agree with -- I agree, it should be 4%, by the way. I agree with President Trump. Interest rates should be lower.

We have reached the end of our question-and-answer session. I would like to turn the floor back over to Chairman, Dave Simon for closing remarks.

All right. Thank you. Hope you enjoyed our call. And I know Tom and Brian are available for follow-ups. Thank you.

Thank you.

Thank you.