---- — INDIANAPOLIS — Mall operator Simon Property Group Inc. plans to spin off to its shareholders a business that operates strip malls and smaller enclosed malls so it can focus on bigger malls and premium outlets.
The Indianapolis company’s shares rose more than 3 percent in morning trading Friday.
Simon said the new, publicly traded real estate investment trust is expected to own or have an interest in 54 strip malls and 44 smaller enclosed malls. Its portfolio will total 53 million square feet in 23 states.
It estimates the new company will generate about $300 million in funds from operation, or FFO. FFO is the preferred profit measure of real estate investment trusts like Simon Property. It adds back charges that measure the costs and declining values of equipment and property back to net income.
Simon President and Chief Operating Officer Richard Sokolov will become chairman of the new company, and Simon Chairman and CEO David Simon will serve on its board of directors. Simon Property shareholders and limited partners get stakes in the new company.
Simon currently owns or has an interest in more than 325 retail real estate properties in North America and Asia.
Its shares rose $5.26, or 3.6 percent, to $153.63 in morning trading. The stock was down more than 6 percent so far this year, as of Thursday.