Indianapolis-based Simon Property Group announced Monday it is purchasing more shopping centers in a multi-billion dollar deal. The move follows a recent string of announcements of major department stores closing brick-and-mortar stores.
The $3.6 billion purchase of Taubman Centers will expand Simon’s mall portfolio with additional locations worldwide.
Both companies believe this acquisition will be beneficial, at a time when Macy’s and several other long-standing retailers announced store closings.
Indiana University Kelley School of Business Center for Education and Research in Retail director John Talbott says that’s not the whole picture. In fact, he says retail grew 4 percent last year.
“The best malls are doing great and the kind of secondary, tertiary malls are not doing as well,” says Talbott. “And what we’re seeing in the brick-and-mortar world right now is a kind of consolidation of the less productive space into maybe alternative use cases.”
He says the announcement is a win for Simon and the state of Indiana.
“We happen to be home to the largest real estate investment trust in the world,” says Talbott. “And this just sort of emphasizes the strength they have in the business and I think is good for the long-term business climate within Indianapolis and Indiana.”
Michigan-based Taubman currently operates or manages 26 malls in the United States and Asia.