Hey, everyone. I'm Caitlin Burrows, and I cover REITs at Goldman, including Simon. And today we have Brian McDade, CFO of Simon, here to speak with us. I have a number of questions prepared, but if there are any audience questions, please raise your hand later so I can get a sense, and we'll take it from there, so Brian. Simon's had a great year, outperforming both the REIT index and the S&P 500. And as I think about the drivers, two major ones, and feel free to let me know if there's something I'm missing, are fundamental strengths, so strong demand and leasing, no new supply, increasing occupancy, rents, and same-store NOI, all great things, plus OPI monetization. So maybe starting with those two in the leasing side, leasing's been robust for a while now, and we can see it translating to occupancy.
So, can you describe the current leasing environment, the depth of that interest, and maybe how that compares to even the recent past?
Sure. Thank you, Caitlin. Thank you for everybody attending today. Certainly happy to touch upon that. But maybe just ahead of that, for those that maybe not know the company as well, Simon Property Group, been a public company now for almost 31 years to the day. We operate, you know, roughly 90% of our business is domestic here in the U.S., but we also have international businesses, about 10% of our business overall. As you think about the company, you know, we went public, you know, 31 years ago at a total enterprise value of about $3 billion. Today, through the considerable work of the organization, that now has grown to north of $100 billion. So the company is a large organization. We are the largest landlord, retail landlord around the world to the, you know, the growing retail community.
As we think about the business in our kind of structural advantage, I think we have to think back maybe for the past decade of where the company's kind of coming from. You know, there has been certainly a sea change from a retailer perspective. If you think about the past decade, growth really came from retailers throughout Asia, and that's certainly changed pretty dramatically in recent times. And so retailers have pivoted back to the United States as their growth market. You know, in addition, there's two other things that really have changed dramatically in the last decade. You mentioned, you know, no new supply.
What you're actually starting to see is kind of negative supply, as some of the more out-of-date assets, you know, are now starting to move through the system and kind of leaving the system as you've seen interest rates reset higher. You know, the last decade we've seen zero interest rates, which propped up capital-intensive businesses. We're starting to see that cleanse now, so capitalism is starting to work. And I think the other thing that's really kind of come to roost in the last decade is the idea that e-commerce was going to disintermediate physical retail. You know, the economics of the e-commerce business, quite honestly, are disadvantaged. And I think, you know, that has come home to roost, you know, whether it be the cost of returns, whether it be the cost of delivery.
You know, the store is the most profitable channel for retailers, and they've repivoted to that. Actually, you're starting to see retailers disincentivize, you know, this idea where you buy 10 things online and bring 9 back to the store. So you're really starting to see retailers focus on their stores. That's where the profitable channel is. And the facts and circumstances on the ground are as good as they've been for the past decade, or and they're accelerating. And that's certainly materializing in our results, our occupancy levels, our leasing demand. And as you think about leasing in the U.S., it's really coming across our real estate from a variety of places. As I mentioned, Asia is not the growth engine it once was, and that was really being driven by the luxury brands.
They have repivoted to the US and are looking to grow in the US in a meaningful way. In addition, their business model in the US has changed over time as well. They've historically distributed through department stores, and now, like every other business and retailer, they want to have a direct connection with their consumer. And so you're seeing the business model of luxury retailers to become direct-to-consumer and opening up stores throughout our portfolio. And so that is a major source of demand for new space. These retailers think over decades. They don't think month to month. And so they are looking to secure their very best locations in the retail real estate in the United States. You see it here in New York on Fifth Avenue, and it's proliferating throughout kind of our portfolio.
But in addition to luxury, we're seeing other cohorts of tenants looking to truly expand and improve their real estate position. You think of some of the bigger users of space out there across our business, the Dick's Sporting Goods of the world, the Primark of the world, Restoration Hardware. Those types of categories of tenants are looking to grow and access the type of real estate that we own. And so we're seeing outsized demand from those cohorts of tenants. In addition, you know, regular way retailers continue to look to grow, whether it be Abercrombie & Fitch, whether it be Mango, whether it be Lululemon, whether it be AloYoga, whether it be Skims. The retail community has reoriented themselves to the physical distribution channels and are looking to expand their store fleet with us specifically.
But broadly speaking, they're looking to access high-quality retail real estate in the U.S.
I guess, it seems like for maybe a year or two, it's been this, accelerating leasing environment. It sounds like, based on what you said, that's not slowing down. But, just given where kind of occupancy is and the tougher comps you have, like, do you think it can continue to accelerate?
We do. It, the structural differential in the U.S. over the past decade has advantaged us. And as we think about that leasing demand, which is unabated, you know, the quality of our assets from full-price regional malls all the way out to the value segment of our premium outlets, it gives us a competitive advantage to be able to meet the needs of retailers where they want to be, whether it be full price, whether it be value. And the geography, the geographic footprint we have is unmatched. So it's domestic in all of the major markets, but also internationally. And so, we do not see a slowdown. If you look back in history, the high watermark of occupancy of the company was about 97.1%, and that was in the 2014- 2015 timeframe.
We're just north of 96% today, so we do expect that there is still upward bias to occupancy overall, in addition, we've talked at length about this, but we've been very successful in converting some of our temporary occupancy into permanent occupancy, and we see a material uplift in rents when we do so. Order of magnitude, a temporary lease with us is in the context of about $20 per sq ft, and new leases with us are in the context of $60-$65 per sq ft on a permanent basis, so you're seeing a strong uplift in our cash flow growth by just simply converting some of our temporary tenants to permanent leases, and we do think there is still some runway to go in that process.
And I know you guys have also talked a lot about improving mix, which makes it seem like, kind of concentrating on the underperforming retailers and replacing them. I guess how much were you into that focus on mix rather than just lowering vacancy maybe at this point last year? And does that suggest that going forward you might target, like, a lower retention rate?
So look, I think we've always been focused on making sure we're creating a high-quality retailer mix in our offerings. So it's always been part and parcel to our strategy over time. I just think that you've seen with the lack of new product and some of the existing product going out of the system that we have a deeper roster of tenants looking to access the same number of spaces. And so it gives us the opportunity for us to rotate out some of the underperforming tenants or those that aren't performing up to our expectations and standards and bring in new and exciting retailers to really drive the offering.
While it's always been part and parcel to our strategy, I think it's really kind of come into more focus in the last year or so as we continue to calibrate the kind of facts and circumstances on the ground with the desires of retailers continuing to look at accessing, you know, the physical environment.
Maybe a little on the watch list. So two bankruptcies of this year were rue21 and Express. Rue21, I would assume, is off the watch list. I guess in terms of Express, I don't know how you think about, like, if they're on or still kind of, on there or if they're on or off. But then are there incremental tenants that you're newly concerned about, or how would you compare the size kind of today versus a year ago?
So the watch list has certainly shrunk, I think, to your point. The folks that we were paying attention to keenly at the beginning of the year or the end of last year have probably come to fruition for the most part, and you know, we're actively looking at replacing those tenants and have been for some time. I would tell you the watch list today, where it stands, is as low as it's been in a long time. Obviously, we're in a very important part of the holiday season where the material amount of profitability of retailers certainly manifests itself. And so we traditionally reevaluate that watch list in January, early February when results are known.
But as we stand today, I think we relatively feel good about the position of retailers and that we don't expect a material expansion of our watch list heading into next year, at least as of now.
You gave a little color on the pricing side. So I guess just sales at your properties have been, let's call it, flattish for, a little while now. I guess to what extent is that limiting your ability to increase rents, or how do new and renewal rents compare to the in-place ones?
So look, there's always a formula that goes in, and we want to, you know, be scientific about it. But there's just the practical reality that sales are certainly an important part of the componentry here, and the profitability of those sales matters as well, right? As I've mentioned, that the store channel is the most profitable channel for retailers. And so with the limited amount of new space being built and the current occupancy levels across retail assets, it is still supporting, you know, upward bias in pricing because while sales have been relatively flat, absent to, you know, major retailers that have different sales cycles, you know, they are still at elevated levels, and retailers are looking to access those elevated levels, you know, in across the real estate.
And so they're willing to pay, you know, the going rate to access that in our physical environment. If you kind of think about the proxy that traditionally is used as the metric here, which is occupancy cost ratio, you know, at the end of the third quarter, we were about 12.8%, which is still inside of our historical averages. So we do believe that there is upward bias in our pricing opportunities, as we look at what's maturing for 2025. There's about 10 million sq ft that is maturing in the context of about a $60 average base minimum rent. And new leases today that we're signing are in the context of $65-$66. So we do believe that, you know, this is across 10 million sq ft.
Not every space is the same, but we do believe that we should see some amount of pricing power carrying forward into 2025 and beyond.
And so I guess then, as we think about maybe the next step, which is same-store NOI growth, if you think of it then like roughly, I think it's 10% of the portfolio rolls at 10% spreads, which is basically what you were just describing. I know there's lease escalators on that. Like, does that make you feel like a 3% NOI growth is sustainable? I mean, it seems tougher now that your occupancy is higher, but how sustainable do you think that is?
Yeah, I think we're comfortable with it, and I think if you kind of look back over the course of the last, call it, 36 months and looked at our actual performance, it's justified. If you looked at 2022, we produced, you know, portfolio NOI growth of about 4.8%. Similarly, in 2023 and year to date, we're on a similar path. And so the momentum continues in the business. Certainly, there are other variables that interplay here. Certainly, you've talked about MIX, and as we improve our MIX, there are downtime elements of doing so, specifically in our full-price business. You know, the buildouts of those new spaces just take longer than in our outlet in our mills business, just from the nature of those buildouts, getting entitlements, the investment by the retailers.
So there's a tail here that would impact, you know, downtime would impact NOI growth kind of year over year. But as we think about the long term, it's going to propel it. You know, there's obviously costs that go into this as well, into the equation. So, you know, we have escalators on our fixed CAM in the context of 3%-4% a year, which does protect us from escalation. But there are costs that are out of our control: insurance expense, real estate taxes, some of those things that are non-controllable directly to us will have an impact. But moral of the story, we've been facing those impacts over the past three years and have still produced strong, strong NOI growth and would expect that momentum to continue well into 2025 and into 2026.
Okay. Back at the beginning, I said that I thought there were like two main drivers. One was like fundamental strength, and the other was on the OPI side. So, other platform investments, so we'll get into that. But first, maybe we'll talk about then the consumer, the retailers, and holiday sales.
Sure.
So, you mentioned before that you're the largest retail landlord in, I was going to say the country, but maybe the world. So what early comments or feedback can you share on how the holiday shopping season's going?
So, out of the gate, very strong. We actually put out a press release after Black Friday, which compared traffic, and traffic was up, you know, north of 6.5% across the business. I think the consumer was ready to put, quite honestly, the election behind them and reengage in the economy, and it was; it didn't matter your politics. It was just simply there was a resolution, and you've seen kind of the animal spirits of the U.S. consumer reengage in the economy in a meaningful way. You know, we continue to see strong traffic results thus far from Black Friday through just about today, you know, that has a strong corollary to ultimately the performance of the retailers in the fourth quarter, which is when the majority of the profitability in the sales occur from a retail perspective.
So I think we're cautiously optimistic, at least, on the holiday season. I think there are folks out there calling for 3.5%-4% growth, you know, based upon what we've seen the first couple of weeks after Black Friday. I think we feel relatively comfortable with those predictions.
And just in thinking about, like, how much do holiday sales matter to Simon? So you mentioned how important they are to the retailers and their own profitability. But yeah, how much does that end up mattering to Simon?
You know, most of our business is a fixed-rent business. We certainly do participate in the upside on a variable basis. As tenants do better from a sales perspective, their overage rent contributions go up. But we've, you know, 92% of our business is fixed, so we have limited exposure on the variable side. And that other 8% also includes recoveries of uncontrollable expenses, so insurance and real estate taxes. So as you think about our true exposure to a on a sales basis, it's about 5% of our revenues in a given year. So relatively small relative to the overall pie, but we do have some sensitivity to it in the fourth quarter.
Okay. Back to the other platform investments. So in 2023, which was just a year ago, you mentioned that you thought OPI was worth $3.5 billion. Simon's already monetized almost $2 billion, which I think was faster than anyone expected, which would then suggest $1.5 billion of value remaining. So I guess, would you say the remaining part of OPI is worth $1.5 billion, or has there been a change to your estimate?
Look, I don't think there's been a change to our estimate. I think, you know, maybe it's important to step back and understand OPI in totality first. There are four main businesses sitting inside of the OPI bucket that we talk about, JCPenney and SPARC, which are our retail-centric businesses. In addition, Rue La La and Gilt, our digital platform, is inside of, encapsulated in OPI, in addition to Jamestown, which is an asset manager that we bought into at the end of 2022. And so there's a variety of businesses sitting inside of OPI. From a retailer perspective, JCPenney and SPARC, I think it's important to understand that we've received the initial capital investment that we made in those businesses has been returned. And so on a $100 billion balance sheet, there is no capital investment remaining in those businesses.
In addition, as we think about the earnings of those businesses, we talked about in the third quarter that those JCPenney and SPARC underperformed our plans, and we are taking decisive actions to turn around the trajectory of those businesses and their operating performance. But again, overall OPI for the year, we talked about being a drag on earnings between $0.05 and $0.10, and that's relative to a midpoint FFO guidance of the year of 1285. So these are relatively small businesses inside a really large organization. We continue to see value in those businesses over time, but, you know, the first and foremost goal is to improve its financial performances, which will set it up better for, you know, potential monetizations in the future.
You know, we have other partners in those businesses, so this isn't simply just a decision that we can make on our own. But you know, over time, we would expect that you will see certainly a continued lessening of exposure to those businesses to our earnings profile for sure. And you know, over time, in a financial improvement, an improvement from a financial perspective, which should set itself up better for monetization in the future from an outcome perspective.
So I guess on the third quarter call, I know there was definitely a reference to a December or January, unclear exactly what was potentially happening in those time frames. So I guess, it sounds like you would like to monetize those businesses at some point. I guess, could you just give any more color on, like, is it a priority when on the earnings call you guys mentioned December or January, would that be for monetizing SPARC and/or JCPenney?
No, I think what we were trying to get across, convey on the earnings call is simply that the financial performance in the third quarter was not acceptable, and we are taking decisive operational activities to drive the financial performance, so there's no, that's what we were alluding to. We are taking steps to improve those two businesses. As you look at them, you know, collectively, there's great opportunity to drive revenue and/or cost synergies between the two of them that are available to us. And that's what we were foreshadowing more than anything. Now, certainly, you know, monetization and our continued reduced exposure, as you've seen over the past 24 months to those businesses, will likely continue, but that's not necessarily in our direct control. What's in our direct control is improving the financial performance of those businesses.
And maybe back to the merchandise mix focus. How much rent does the total of SPARC brands make up for Simon today? And maybe how has that changed in the past couple of years? Do you expect it to get lower?
Sure. Well, as we disclose in our supplement, you know, ultimately the top 10 payers are paying greater than 1% of base rent to the company. And SPARC is not on that list, so it's below the 1% kind of threshold here. I would expect that over time that probably continues to reduce. You know, ultimately, you know, as we said, merchandise mix, as we look at our businesses, including our SPARC businesses, if there's opportunity to replace some of those stores with better productivity retailers, we are going to do that. And, you know, ultimately that should continue over time, as we right-size those businesses to kind of their current environment, but also take into consideration the demand behind that for their space.
You know, generally those retailers that are inside of SPARC are legacy retailers that control great space in assets across the United States because of their history and legacy, and ultimately should allow us to, as a landlord, continue to improve the merchandise and mix in some of their stores.
Maybe switching gears, either from an OPI sale or just your retained cash, which you have a lot of, how would you prioritize Simon's use of excess cash?
So if you think about kind of some of the numbers I talked about earlier, you know, on an FFO basis, we're going to generate somewhere to the tune of about $4.7 billion this year. And if you look at our recent dividend and annualize it, it's about a $3 billion number. So after we pay our dividend, we generate about $1.5 billion of free cash flow available to reinvest in the business. The vast majority of that is going to fund our redevelopment and development pipeline. We are committed today for about $1.3 billion. There are a variety of projects that will be added to and taken away off of that list.
But ultimately, from a cash perspective, we probably in the construction cycle of the development and redevelopment business truly cash going out the door relative to that commitment is about $750 million-$800 million a year relative to the $1.5 billion of free cash flow. So after we invest in the projects in the back into the portfolio, we still have excess cash flow to delever and/or buy back shares depending upon the facts and circumstances at the time. From a focus perspective, our free cash flow is really driving being reinvested back into our business to drive continued outperformance. What's really interesting about Simon relative to the rest of our industry is that free cash flow. If you look at our competitor set, no one is generating nearly the type of free cash flow.
Quite honestly, for growth to come out of our competitor set, they have to source external capital. We have a natural funding source, which is allowing us to drive, you know, our current and our future results.
Maybe along those lines. So, you mentioned before, I think something about scale, but your scale and credit rating are two qualities that other mall and outlet owners don't have, that you do. I guess to what extent do you think that helps Simon, or in what ways the scale and credit rating?
I'll take the credit rating piece first. You know, as you think about our opportunity to fund our business, we have we're an A-rated credit. We have access to the unsecured markets globally. Here in the U.S., we are a big issuer, certainly, but issue in Europe and other jurisdictions. As you just think about the pricing advantage of capital today on the debt side, unsecured debt on a 10-year basis for us in the U.S. is in the context of 5.25%. If you look at the mortgage market in the U.S., it is materially wider than that, which is today mortgages will print in the seven to maybe 6.5%-7.5% range. So we have a durable advantage running from a cost of debt perspective.
We also have access to European and Asian markets where the fundamental cost of debt there is lower. We've accessed those markets in the past, and I would expect us to do so in the future. So as we think about the business that we operate in and our ability to fund it in a creative basis, you know, ultimately we have an advantage relative to the rest of the industry that's running 200 basis points on a cost of debt perspective. It gives us diversity, right? There's a wide opportunity set in the capital markets to fund ourselves on the unsecured. There's other products to consider too, exchangeables, converts, other things. But thus far we've not had to access those instruments for the most part, and funded ourselves regular way in the unsecured markets.
That could change over time as we look at options, and the flexibility of our balance sheet gives us that. Today, the balance sheet sits at about five times, 5.2 times net debt to EBITDA. If you look at where the rating agencies look at that, in an upward bound from a ratings trigger, you know, there's a turn to four turns of opportunity for us within the balance sheet today, to still maintain our rating and stay within our ratings category. The balance sheet is well positioned for growth, and, you know, ultimately the debt markets are supportive of what we're doing.
Now, pivoting back to your other question on scale, you know, as we think about, you know, our ability to interact with our customers, the retail community, having the ability to sit down and have a conversation with a retailer, whoever it is, about the U.S., about Europe, about Asia, about full price all the way down to the value segment, that is a unique proposition that we have that others don't. And when you couple our financing and our balance sheet strength with those relationships, you know, we are the preferred partner of retailers to grow their businesses over the globe, across the globe. And so we do see, you know, a slight advantage from an open-to-buy perspective that retailers are very comfortable with where we sit, where our real estate sits, where the balance sheet sits.
We're doing more business, more concentrated businesses with the retailers across the globe in a bigger way.
I just want to check, does anybody here have a question? I think you can speak and then I'll repeat it. Oh, actually she's coming, so.
Last 10 years, is the reason that people come to a mall changed at all? And I guess what I'm referring to is as some of these anchor big department stores have gone bankrupt and with the advent of online retail, you have to create more of an entertainment center, if you will, to attract people, you know, whether it's fancy or food courts or entertainment acts that come in. And is that happening and is it happening to you? And if it does happen, does that put a bigger demand on your capital spending or not?
Sure. Great question. And so what I would say is that, you know, let's talk about the first part of your question, which is department stores and traffic. 30 years ago, the department store was the traffic driver, okay? And that is why that most department stores pay $1 per sq ft rent, right? They're uneconomical, but they were the driver. That's reversed 180 degrees, if you would, in the last 30 years. And now the driver is truly the inline stores that you're offering to the community. Certainly experience matters, and we've been focusing in a big way on experience, food and beverage as a diversifying technique for our asset base. And so what you have seen is us recapture department stores.
Quite honestly, it is still one of the bigger growth vectors of the company: capturing that $1 per sq ft, you know, anchor box that is uneconomical, but more importantly, the land sitting underneath it. You know, most department stores sit on 20-30 acres of land next to some of the best assets in the world. What our opportunity is, is to recapture that and add new uses, whether those uses are entertainment and create vibrance that way, or there are alternative uses where it's with residential or hotels. Creating energy in our assets is very important, and we continue to focus on it.
And that is where our capital spend has really been focused on our full price business the past decade, is really the recapture of that and the regeneration and the reenergization of our assets for the community as the places to be.
Maybe on the acquisition side, so, you guys were historically very acquisitive. You bought Taubman in the beginning of the pandemic. I'm not sure if you've bought anything since then though, but it feels like on the earnings calls you guys have been talking about maybe evaluating deals. So how big is the universe of properties that you would be interested in, and what do you think would be the catalyst for those to transact?
So look, I think you should know that we look at everything that is out in the market at all times. And so, you know, we are certainly very focused on the evolution of that part of our business. If you look back over history, we've done about $50 billion worth of M&A in the 30-year history as a public company. You know, if you look at that, you know, in hindsight, you know, we've typically bought those assets at about 150 basis points in excess of our 10-year cost of funding. You know, operating leverage in our business is important to us. It's, and so, you know, we've traditionally bought with about 150 basis points of operating leverage as kind of a proxy.
As we look at the landscape of assets that are out there, both domestically, but globally as well, you know, it's really about buying assets that are going to make us better, not simply bigger. Is there an opportunity to drive value in those acquisitions through the size and scale of our business? Are we in a geographically advantaged area? So we certainly are very much attuned to what's going on in the market. I do think there's some small green shoots that have started to happen this year on the retail side. You started to see some smaller retail assets start to transact, you know, $75 million to $400 million or $500 million of value. You're starting to see institutional capital look at the sector again. I mean, the results kind of speak for themselves, right?
Capitalism is a unique structure where when results are starting to be seen, capital starts to form around and trying to look at access those results, and so the raw ingredients on the ground are positive. We do think that this momentum carries into 2025, so I would expect us to be acquisitive again in the future. I can't exactly tell you, you know, what date or when it's going to happen, but we are reactionary to the market, if we find an opportunity that we believe makes us better, we're certainly in a position from a capital and balance sheet perspective to move very quickly.
Maybe thinking big picture about earnings growth. So we met you, we were talking before about same-store NOI concept and that it could generally be in like the 3% plus range going forward. I guess as you think about the FFO growth, so same-store, if you were building or buying the external growth would add to that. You're a big company though, so it's tough to kind of move the needle. And then there's at different times, but now it's kind of interest rate headwinds. So as you think about like the growth of Simon versus other companies that are out there, like do you think you can reach 5% earnings growth or is just the situation right now prevent that from happening?
Well, look, I mean, I'm not, I'm not going to put guidance out there per se. We'll, we'll, we'll address that certainly in February. But I think as you look at the momentum the business has on an unlevered cash flow basis, you know, we do feel pretty strongly that that continues plus or minus for the foreseeable future. Certainly the headwind is debt cost, you know, interest is, it matters again. If you look at the debt profile of the company, you know, roughly $35 billion of pro rata share of debt, $20 billion of that is unsecured debt that has a weighted average term left of about nine years at a weighted average coupon of about 3.75%. So we have some time for that roll up of interest cost to continue to leak through kind of earnings.
On the other side is the secured side of our balance sheet, which has probably about a four-year weighted average and about a 4.25% average rate. So that will happen a little bit faster, but the rate of change is not as high because the base rate we're coming off of. So there will be interest headwinds, but you know, as we think about the unlevered cash flow, we do think that that continues at a pretty sizable clip as well. So, you know, we certainly look to grow earnings, appropriately. We do have to make long-term decisions. And so, you know, as I mentioned, you know, we are thinking about things in the context of years and decades, not necessarily quarter to quarter, but do think that there is momentum in our earnings as well.
Anybody else? Okay, I'll go. You were talking before about the department store opportunity you guys have had. I was going to ask about like how much more of that you think there is. I think you mentioned that it's still a large opportunity. So wondering if you could give a two-minute and 55-second synopsis of the department store opportunity today.
Look, there is it is in the early innings still, as we think about our full price business and the evolution of it. You know, certainly there is demonstrated evidence of what we have been doing. Phipps Plaza is probably the premier example of it. There was a Belk department store that was unproductive. We bought back the Belk department store, tore it down and replaced it with a Life Time Fitness, a curated dining hall, Nobu Hotel and restaurant and an office building in Atlanta and Phipps is sitting outside of Buckhead in Atlanta. So we have taken what was an uneconomical piece of real estate and really driven it to a much different place, both from a financial return perspective, but also as the place of gathering now in the community.
You know, we are probably in the second or third inning of that across our portfolio. Not all of them are going to look like Phipps Plaza. You know, there'll be some that'll just simply be replacements of a department store with a Primark and maybe a Burlington, or we'll reuse the existing infrastructure where we can. There'll be some that certainly we diversify away from retail. You know, a good example, Briarwood, a mall, outside of Ann Arbor, Michigan, University of Michigan. We're reinvesting in that and we've taken down a department store and we're going to build residential and additional retail. So we continue to see that across our, those opportunities across our portfolio. As I mentioned, we have about $1.3 billion of committed capital today of investment in development and redevelopment. We talked a little bit on our earnings call.
We think sitting behind that is about another $4 billion of investment available to us, both from a redevelopment of full price business, but also ground up development of new outlets in Asia and other jurisdictions. We do think that the taking what is antiquated real estate and really creating new energy, both on an individual and a halo basis for the overall asset is really an interesting growth profile for the company over the course of the next several years.
Okay, I think we'll stop there. Thanks everybody.
Thank you.