Feb 4, 2011
Executives
Stephen Sterrett - Chief Financial Officer and Executive Vice President Richard Sokolov - President, Chief Operating Officer, Director and Member of Executive Committee Shelly Doran - Vice President of Investor Relations David Simon - Chairman, Chief Executive Officer and Chairman of Executive Committee
Analysts
Omotayo Okusanya - Jefferies & Company, Inc. Benjamin Yang - Keefe, Bruyette, & Woods, Inc.
Nathan Isbee James Sullivan - Cowen and Company, LLC Christy McElroy - UBS Investment Bank Carol Kemple - Hilliard Lyons Alexander Goldfarb - UBS Andrew Fenton - Cliffwood Partners Quentin Velleley - Citigroup Inc Ross Nussbaum - UBS Investment Bank Michael Bilerman - Citigroup Inc Jay Habermann - Goldman Sachs Michael Mueller - JP Morgan Chase & Co Cedric Lachance - Green Street Ki Bin Kim - Macquarie Research Equities David Harris - Gleacher & Company, Inc. Craig Schmidt - BofA Merrill Lynch Paul Morgan - Friedman, Billings, Ramsey & Co.
Operator
Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2010 Simon Property Group Inc. Earnings Conference Call.
My name is Lacey, and I'll be your coordinator for today. [Operator Instructions] I would now like to turn the presentation over to your host for today's call, Ms.
Shelly Doran, Vice President of Investor Relations. Please proceed.
Shelly Doran
Welcome to Simon Property Group's Fourth Quarter 2010 Earnings Conference Call. Please be aware that statements made during this call that are not historical may be deemed forward-looking statements.
Actual results may differ materially from those indicated by forward-looking statements due to a variety of risks and uncertainties. Please refer to our filings with the Securities and Exchange Commission for a detailed discussion of these risks and uncertainties.
Acknowledging the fact that this call may be webcast for some time to come, we believe it's important to note that today's call includes time-sensitive information that may be accurate only as of today's date, February 4, 2011. During today's call, we will discuss certain non-GAAP financial measures as defined by the SEC's Regulation G.
Reconciliations of these measures to the most directly comparable GAAP measures are included within the earnings release or the company's supplemental information package that was included in this morning's Form 8-K. This package is also available on the Simon website, in the Investors section under Financial Information, Quarterly Supplemental Packages.
Participating in today's call will be David Simon, Chairman and Chief Executive Officer; Rick Sokolov, President and Chief Operating Officer; and Steve Sterrett, Chief Financial Officer. I will now turn the call over to Mr.
Simon.
David Simon
Okay, thanks. Good morning, everybody.
We'll go through some highlights and then open it up for Q&A. First of all, FFO as adjusted without the impact of our non-cash impairment charge in the fourth quarter increased 8.4% from the fourth quarter one year ago, which was $1.66 to $1.80 per share.
We reported FFO of $1.78 per diluted share for the quarter, which exceeded the first call consensus estimate by $0.04, and I'm pleased with this performance, which was accomplished despite the following fourth quarter items. We recognized transaction expenses of $6.4 million or $0.02 per share.
We recorded an impairment charge of $8.2 million or $0.02 per share for an investment and a development project in Italy that opened in November of '07. And Opry Mills remains closed after the flood in 2010.
The negative impact to FFO for the quarter from Opry Mills was approximately $6.4 million or $0.02 per share and this loss will continue for the balance of 2011 for a loss of approximately $0.05 for the total of the year until we rebuild the center. FFO, as adjusted for the year, was $6.03 per share as compared to $6.01 in 2009.
We declared a quarterly dividend of $0.80 per share, which was 33% higher than the dividend at this time last year. I'll talk about NOI now.
Malls and Premium together which contribute approximately 90% of our domestic NOI, comparable sales, and I should say that these statistics do not include Prime Outlets to give you a sense of comparability. Comparable sales on a rolling 12-month basis were $494 per square foot, up 9.3% as it compared to $452 per square foot at '09 year end.
Occupancy at year-end 12/31/10 was 94.2%, which sequentially was 60 basis points higher than 9/30 and 80 basis points higher than a year ago. At year end, the releasing spread for 12 months was a positive $1.15 per square foot.
We continue to see gradual improvement in deal flow and in the pricing of our space. On a same-space basis, our 2010 releasing spread was a positive $2.71 per square foot.
Comparable property net operating income growth was 3.4% for the quarter, 2.9% for the year. And recall last year, we had a positive roughly 1% growth.
So we had growth on top of comparable NOI growth. Drivers of the increase in the NOI for the fourth quarter were higher occupancy and higher sales.
Our operating profit margin is 150 basis points improvement to 70.6%, which we continue to believe is the top of the industry. Just want to give you a quick update on Prime.
We closed on August 30. Operations in back-office functions have been successfully integrated.
The rebranding of the centers to Prime Outlet's name is complete, and the portfolio has continued to perform better than we expected. Occupancy for the properties was 95.4% at year end versus 94.7% at 9/30.
Sales were $423 per square foot at 12/31 versus $406 per square foot at 9/30. Capital markets, quickly, we closed in the fourth quarter four new mortgages totaling $662 million at a weighted average rate of 4.47% and a weighted average term of 9 1/2 years.
December 31, we had approximately $1.1 billion of cash on hand including our share of joint venture cash. Our availability on our corporate credit facility was $3 billion for a total liquidity position of approximately $4.1 billion.
We successfully and profitably deployed $3.2 billion of cash in 2010 to grow our business through acquisitions, redevelopment and new development, and strengthen our balance sheet by deleveraging and lengthening maturities. Development, quickly, again, we completed expansions at South Shore Plaza, the domain Houston Premium Outlets.
And Toki Premium Outlets started construction on new Premium Outlets in Merrimack, New Hampshire, South Korea and Malaysia, and opened two shopping centers in Italy. In addition, we completed more than 35 anchor/big-box replacements, all in 2010.
And we have been very successful on our efforts to re-tenant department store and big-box spaces and have 30 new approved anchor or big-box stores with openings scheduled in 2011 and 2012. Construction has or will commence in 2011 on six significant redevelopment projects, including Fashion Mall at Keystone in Indianapolis; Las Vegas Premium Outlets, South Pheasant Lane Mall, Southdale Center, Southridge Mall and the University Mall in Pensacola.
We have also reinstated our modernization program and have projects planned at up to 18 malls over the next two years. During 2011, projects will be completed at Coddingtown Mall, Fashion Valley, Great Lakes Mall, Orland Square and Plaza Carolina.
Our 2011 budgeted capital spend on new development, redevelopment and modernization projects in the U.S. and abroad is approximately $500 million.
Details on cost returns and timing of the projects, of course, are provided thoroughly in our 8-K reporting package. Guidance.
Let me just talk about that for a second. We provided 2011 FFO guidance of $6.45 to $6.60 per share.
At the midpoint of the range, this would represent growth of approximately $0.50 per share or over $175 million of additional FFO in 2011 as compared to 2010 FFO as adjusted. I know we are characterized as being conservative from time to time, but to put that number in perspective, well over half of the public REITs in the U.S.
generate less than $175 million of FFO on an annual basis. So one year of growth, and we are beating that number.
So I'd also like to point out we expect 2011 to result in an all-time high for SPG in terms of its earnings. And given all the capital raising and balance sheet activity that was completed in our industry over the last couple years, I believe that we are one of the few REITs that can make that statement.
Before I open it up for Q&A, I'd like to just add a few concluding comments and just give you the following thoughts. First of all, some of you have mentioned concern about our ability to continue to grow in light of our current size and certain transactional outcomes.
Let me emphasize, we are not concerned. No one in our industry has done a better job of growing their business than we have through good and bad economic cycles.
And I don't expect that to change. We are aggressive in our pursuit of opportunities to profitably grow our business.
Our financial strength affords us the luxury of pursuing transactions that most of our competitors cannot even contemplate. And we will continue to pursue opportunities that could enhance our franchise.
We've also demonstrated discipline. When the opportunity ceases to make sense for us, we can and will walk away.
We have been excellent stewards of shareholders' capital, having successfully completed $28 billion of acquisitions since our IPO in 1993. And during that period of time, we've delivered, on average, an 18.4% return to our shareholders.
In addition, let us not forget that we did close on a $2.3 billion acquisition of an Outlet portfolio just five months ago, the largest real estate transaction completed in 2009 and '10. Speaking of the Outlet business, there's been some market chatter that we should spin this business off or somehow break up the company.
And let me just give you these following thoughts. The multiple platforms of our business are very synergistic, as they enhance tenant relationships, result in cross-fertilization of tenants and lead to the best use of development land among other things.
I think this is best illustrated by sharing some numbers from our Outlet business pre and post the Chelsea transaction acquisition. In 2004, as we will recall, as a stand-alone public company, Chelsea was very well regarded by the Street and considered a best-in-class performer.
In the five years prior to our acquisition, Chelsea delivered an average comp NOI growth of 5% per year, average growth in base rent of 2% per year and positive releasing spreads of 13% per year. All of this was done with a corporate overhead spend of approximately over $50 million.
We have now owned the portfolio for six years. And during that period of time, comp NOI growth has accelerated to 7 1/2% annually.
Average base rent growth has grown 8% annually, and releasing spreads have averaged a positive 32% annually. We've developed 11 new Premium Outlets in the U.S.
and abroad and expanded several more. We have introduced many new retailers to the outlet sector.
We have increased sales at the center by enhancing the actual product, physical product and the tenant mix. Gross EBITDA of the portfolio has grown a factor of 2.7x since the acquisition, frankly, a remarkable feat in the real estate industry.
And our Outlet business overhead, about half of what it was six years ago. The value creation from Chelsea acquisition speaks for itself.
And this is attributable to the management expertise we brought to the business, as well as the resultant synergies in income and cost savings that we brought to the platform. And let us not forget that our regional malls delivered sector-leading NOI growth during this period of time.
With the addition of Prime, we expect our Outlet business to continue to grow and be synergistic with our other platforms. As we have said in the past, we consider ourselves a retail real estate company and not just a mall company.
We have articulated a well-developed and thoughtful strategy 17 years ago, when we went public, to own highly productive, high quality assets all along the retail real estate spectrum. We have stayed true to that strategy, and it's continued to serve us and it will continue to serve us well.
And finally, I'd just like to say we are more than happy to stack our record up as a public company against anyone, and we're very excited about our prospects for 2011 and beyond. And with that said, we'll open it up for questions.
Operator
[Operator Instructions] And our first question will come from the line of Quentin Velleley with Citi.
Michael Bilerman - Citigroup Inc
It's Michael Bilerman here with Quentin. David, I want to go on just on those comments about being a retail real estate company.
I can remember back to that initial merger call that you had on the Chelsea deal, and I think you billed yourself at that point that was the first time, of saying, we're a retail real estate company. And I think it came up on that call of how do you view the Shopping Center business, which you have a few billion dollars in the company today.
But how do you sort of see that fitting in with more limited opportunities on the Mall side, at least domestically, and already fully consolidated in the Outlet business, how does that next leg either grow or contract within the overall scheme?
David Simon
Well, interesting question in that -- it has not been a growth business for us. But there is benefits to being in that business, because there's still a significant amount of cross-fertilization with the retail community.
So in that sense, it's important to have a leg in that business. Additionally, the vast majority of those centers are in right near malls, adjacent to the malls that we own and/or in markets that we have a strong presence in, like Orlando or Austin or down on the border of Texas.
So we still consider it to be synergistic. We've never been that excited about growing it through acquisition.
I don't think that's going to change other than there maybe a couple here and there, because of our -- the regional fit with a center might make sense. And we also view ultimately it does provide us some optionality if we ever wanted to grow that business beyond what it is today.
Rick, I think you can add anything, if you'd like?
Richard Sokolov
The only thing that I would add is that we have certainly been opportunistic in that business and built a number of shopping centers that were incorporated into other projects we've done. And that's another important reason to keep that expertise within our platform, so we can take advantage of whatever development opportunities present themselves.
Michael Bilerman - Citigroup Inc
And I think David, the comments about the spinning off the Outlet business. I think when people look at your multiple and your multiple is below that of shopping centers and the lone outlet company that's there, and you're trading in line with the regional mall peers, there seems to be a sum-of-the-parts value that was not being captured in your valuation?
David Simon
Well, look, all we can do is continue to do what we do. I think if anybody should be given the benefit of the doubt, it's us.
I mean, the numbers that we were able to produce with the Outlet business as part of our franchise are unprecedented in real estate. And what can I tell you, we'll continue to do what we do.
But I don't see that business stand alone being able to produce the results that it can as part of our company.
Michael Bilerman - Citigroup Inc
Just one last thing on Capital Shopping Centres; after the vote, I think CEO David Fischel was quoted in the press as saying he was glad that the distraction is over, referring to Simon. So I guess even though he got a better deal for his shareholders, it didn't matter.
As you, as a shareholder now or still, can you just comment about what you're going to do with your stake?
David Simon
One of my friends in the industry sent me a bunny -- have you ever seen these bunny movies? They're basically done by a little animated bunnies, but they take a movie and do it in 30 seconds.
So I wrote some notes about CSC that I thought I would just share, because it was the lot of press, and with the takeover panel rules, you can't really talk to the press and the analytic community about it. So if I could, I'd like to just address it in totality.
And this will be, hopefully, I can do it in 30 seconds. But you can go on YouTube and do Bunny movies and pick your favorite movie and you could probably watch it in 30 seconds.
In any event, and that's not paid advertising, by the way. I have no idea who does Bunny movies.
But let me give you my 30-second summary of CSC. First of all, we've been a supportive passive shareholder for three years, despite their underperformance.
We always considered our stake as an option, if and when they decided to sell. The Trafford sale, we thought, had two problems, price and structure, in terms of issuing shares at a discount, which handed control to Whittaker.
We asked them to restructure the deal. They wouldn't, despite the market's poor reaction to the deal.
Based on our view that they were handing control to Whittaker, we decided to make an indicative offer that was subject to due diligence. We would have never bought the company without due diligence.
Management refused to provide due diligence regardless of whatever take-out price we would have come up with, which reinforced our view that they were completely entrenched. They responded with a restructure of the Trafford deal, which we forced, put out a ridiculous, indicative value range, further demonstrating management's focus on entrenchment.
The CEO and the press said that we were a nuisance, even though our presence forced a better deal with Trafford and benefited their shareholders. The Chairman said that the shareholders are one of many things they consider as fiduciaries, but not at the top of the list.
We never made a firm bid. The company relied on South Africa's shareholder base, which has many different agendas, given they're wanting exposure outside of South Africa.
And we're looking forward to them reaching their indicative value of 625p. It sounded like more than 30 seconds.
But in a nutshell, that's our view of CSC.
Michael Bilerman - Citigroup Inc
So you sold your share or you kept your share?
David Simon
We continue to own our shares, at this point.
Michael Mueller - JP Morgan Chase & Co
Just in terms of occupancy cost ratios, obviously, some of your peers have had a big focus on where their occupancy cost ratio is and how much upside or otherwise is in their portfolios. So can you give us, and breakout the Mall and the Outlet occupancy cost ratios for the year-end December 2010?
Quentin Velleley - Citigroup Inc
We have them, but we don't break out those statistics. And Rick is pointing to me the number for the combined portfolio is 12.9% at year-end 2010.
And year-end '09, it was 14.1%.
Operator
And our next question will come from the line of Paul Morgan with Morgan Stanley.
Paul Morgan - Friedman, Billings, Ramsey & Co.
On the guidance, I mean, can you give any more kind of details because I'm thinking about kind of where you might think same store NOI or lease spreads and occupancy evolving over the course of the year?
David Simon
Well, I think it's our nature to, obviously, the Milton Cooper view of the world is certainly our view. I would say that.
Second, the comp NOI growth that we are looking toward this year is comparable to what we had in '10. We do have this $0.05 problem with Opry Mills.
So it's not a huge thing. It's a temporary thing.
We do expect to rebuild that center and get it, not for '11 though, we hope to get it done by early '12. Look, in '10, we had some benefits of bad debt expense and so on.
But I think we're looking for a similar number.
Paul Morgan - Friedman, Billings, Ramsey & Co.
Because on the lease spreads, if I look at your, I guess, with Mall and kind of Chelsea expiring ramps at $33 this year versus what looked like kind of $38.50 last year. Is there anything that, or not -- is there any reason I shouldn't believe that your spreads are going to go up?
Or is there some non-comparability of kind of the type of space that is expiring in '11 versus '10?
David Simon
No, I think we're moving in trajectory for '11, I think, in the right direction above spreads. So I don't think there's anything unusual there.
Stephen Sterrett
Paul, this is Steve. I just have a couple of comments.
David mentioned bad debt. We had literally no bad debt experience or bad debt expense in '10 for a company with $4 billion of consolidated revenue.
I wouldn't expect that to recur in '11. I also think we have, David had mentioned in the call text, we improved our margin 150 basis points this year on top of an improvement last year.
Some of that was done at the operating expense line for sure. And I don't think that level of savings at the operating expense line is going to recur in '11.
And then the last thing I’d mention, while it's not part of the comp NOI, if you look at the other income schedule in the 8-K, we had a lot of lease settlement income in 2010. And we're just not planning for that to recur in '11.
We're looking at a more historical level.
Paul Morgan - Friedman, Billings, Ramsey & Co.
My other question is just maybe for Rick. As you're talking to retailers about 2011, I mean, how often and to what extent is their concerns about margin compression coming up in rent negotiations?
I mean, do you see this being -- how much of a headwind do you see this being, as that starts to bite later in the year?
Richard Sokolov
The rent negotiations with retailers haven't changed in 30 years. They're going to seize upon whatever facts are currently out there to argue for lower rent, and we're going to seize on whatever facts we can to argue for higher rents.
And right now, we're still seeing firming demand. There is very little new development to the extent that the retailers are looking to grow, and an increasing number of them are.
Given their cash flow generation and the profits, we're going to hopefully have an ability to increase our rents as our occupancy moves up. But that is certainly something they are focused on and, legitimately so, it’s out there.
Paul Morgan - Friedman, Billings, Ramsey & Co.
So you think it's just kind of too early to get a feel for how it might play out.
Richard Sokolov
Yes, I believe that they're going to have to deal with that on their cost of goods sold side of their margin, and we're going to be looking to increase our rents in line with how our sales have gone up.
Operator
And our next question will come from the line of Christy McElroy with UBS.
Christy McElroy - UBS Investment Bank
I'm on the line with Ross [Nussbaum] as well. We've seen a few more department store closings and floor plate reductions in the last six months or so.
And then with the changes at JCPenney and Dillard's, you have investors speculating about monetization of real estate in the department store space again. What would you say your appetite is for getting space back today, just sort of generally speaking?
I know every situation is different. And can you provide sort of your general thoughts about department store consolidation and expansion over the next few years?
Richard Sokolov
Let me unpack it. One, as David mentioned in his comments, the demand for our anchor and big-box spaces is accelerating.
If you look in our 8-K, we've listed all that we've added. We had a very robust program in '10.
We've shown you in the 8-K those that are currently totally nailed down for '11. We have almost double that amount in the pipeline.
And when we’re -- if we get spaces back, we're going to be in a position to bring in a number of retailers, and we've demonstrated a pretty broad array, including Bed Bath, Best Buy, Target, Kohl’s, theaters, health clubs. There's a lot of demand for space.
Again, there's not a lot of new development. I don't know that I would agree with your categorization of growing department store closures, because if you look at the announcements, Macy's, on their entire fleet, I think, announced three; Penney announced six, and these are minimal closures and very much reduced from the percentages of store fleet that we were looking at several years ago.
So we really don't see that coming down the pike. And the last thing I would tell you is historically, we have done a very good job of redeploying the department store space that we've gotten back from companies like Mervyns and the May-Macy's consolidation, Lord & Taylor, Parisian and we make them better.
David Simon
I just would add that I don't think there's any market at all that -- where a self-managed -- I have no inside knowledge of this, obviously, but I don't think there's any market at all about a self-managed, one-tenant REIT that's going to go access the public markets. I don't see that happening.
Christy McElroy - UBS Investment Bank
And then, just Rick, following up in your comments with regard to the $500 million of spending that you're projecting in 2011 on development and redevelopment expansions, what kind of returns are you underwriting?
Richard Sokolov
We're hoping that we're going to get in the low double-digit, high-single digit over all that.
Ross Nussbaum - UBS Investment Bank
David, when you think about external growth opportunities, how much more closer are you going to be looking at the JVs within your existing portfolio and buying out potential partners? That would seem like a easy potential avenue of growth for you.
David Simon
It can and has been historically. And it's a function of price and value, and we did some of that last year.
Ross, as you know, Houston and, unfortunately, Opry, it's a little unlucky with Opry. And the Great Mall of Bay Area, which is a very good asset.
So I do think there's opportunities there with time and it wouldn't surprise me.
Ross Nussbaum - UBS Investment Bank
Why, if I understood this correctly, why isn't there business interruption insurance at Opry?
David Simon
There is, but we're in the middle of a dispute with the insurance company, but we took a conservative approach to it.
Ross Nussbaum - UBS Investment Bank
And then finally your Italy JV debt is coming due later this year. What's the game plan there?
David Simon
Well, we've got enough equity value in coverages; we'll likely just simply refinance it.
Operator
And your next question will come from the line of Jay Habermann with Goldman Sachs.
Jay Habermann - Goldman Sachs
David or Rick, could you touch on the leasing spreads again? I know you've seen the rebound in tenant sales.
But do we need to see the retailers expanding again to really drive the spreads? Or can you comment a bit on it?
Do you think it's sales alone that can drive higher rents?
David Simon
It should, ultimately. I think, again, it gets to a little bit of the property type where the demand is.
But certainly, sales moving in the right direction help; the demand at the better properties is, obviously, fueling that. And hopefully, with the economic stability that seems to be in the system, I think the more moderate centers will have the ability to flatten the rent.
And when we did, there's no question we had a handful of centers that actually had negative rollovers due to the economic scenario. And we're starting to see a little bit more stability in that lower group of centers.
And that will be important because that does have some impact on our spreads.
Jay Habermann - Goldman Sachs
And then you mentioned, obviously, the firming economy, but if you think about external growth, do you rethink U.S. strategy versus looking internationally?
David Simon
Well, I think we've got a lot to do in the U.S. this year.
We're very excited about all that's going on with the properties in terms of redeveloping them, transforming a number of them. We are really busting hump on that effort.
So I'm very pleased with that effort, and we're making tremendous inroads. I mean, a couple that, frankly, a year ago, I didn't think we had a shot at doing, we're going to start this year.
A couple of them are The Mills malls, which includes Southdale and Southridge. So I think the effort is, really, I've been really happy that we're really humping on that front.
So we've got plenty of to do there. And Jay, and the bottom line is we'll always look both domestically and internationally.
Externally, we don't need to do anything to do a deal for a deal's sake. There's no one that's done more deals than us.
Yes, we haven't always gotten the deal, but sometimes we didn't get it because we didn't want to pay more, and sometimes, we didn't get it because we were dealing with entrenched team, and we didn't think it was worth a scorched-earth tactic to try and get it. We felt, well, fine, if that's what you want, we'll move on.
There's nothing that can keep us from growing. We don't have to do deals.
We've got plenty of properties here to make better, and we're very focused on doing that.
Jay Habermann - Goldman Sachs
And then just in terms of dispositions, I know it was asked earlier about shopping centers, but as you think about some of your B malls, do you see pricing as attractive and, I guess, given the capital that's out there today?
David Simon
Well, I don't think it's come yet, but it seems to be maybe around the corner that some of those assets, some of that market might be there. So I think '11 will be a developing year in that area.
I think, like many of our peer, I'm sure there's going to be a focus on narrowing the focus a little bit by culling the property portfolio. We'll participate in that, but we want to see a little bit more firming of values in that category.
And not yet, but it seems to be headed in that direction.
Jay Habermann - Goldman Sachs
And just finally, on The Gap, I know there's a new executive. Do you see any shift in strategy?
And, I guess, what sort of conversations have you had thus far?
Richard Sokolov
We have constantly monitored their performance for a very long period of time. They have been a net loser of square footage in closing underperforming stores.
It's obviously a big relationship, one that we are incredibly focused on, at David and my level, and spend a great deal of time on it. We obviously hope for them to be as productive and as good a retailer as they can be, because that only helps our properties.
David Simon
And look, all I can tell you is that their outlet business has been extremely strong. So with the new executive running The Gap, I think that's obviously a positive, at least based on what we've seen out of the Outlet business.
Operator
And our next question will come from the line of Craig Schmidt with Bank of America Merrill Lynch.
Craig Schmidt - BofA Merrill Lynch
In your supplemental, it mentioned that two centers are being de-malled, could you describe those efforts?
David Simon
Sure, one is University Mall in Pensacola. We're basically going to create a box environment with Sears and Penney as our lead anchors, continuing to be our lead anchors there.
The other one is in Nanuet, where again, we will be de-malling that and bringing in more the -- kind of the higher-end retailers. Still, we'll be anchored by Macy's and Sears.
We would hope to bring a high-end food provider, a supermarket, essentially, and some of the better specialty tenants.
Craig Schmidt - BofA Merrill Lynch
And do you have a sense of what the returns might be on that de-malling process?
David Simon
They'll both be double-digits. I mean, both of these are basically producing negative or de minimis cash flow right now.
So if we look at the incremental investment based upon and the return now, I think they'll both be double digits.
Craig Schmidt - BofA Merrill Lynch
And then I had a question, if you had any feedback from your Blackberry and iPhone apps for the malls and where you might be going with that program?
Stephen Sterrett
The feedback has been encouraging. Obviously, they're relatively new.
But that certainly is a very significant focus and highlights one of the remarks David made in his initial comment. We are a uniquely positioned to be able to dedicate both the human and the financial resources to be sector-leading in this.
But I think we have done so historically and we are committed to do so in the future. It’s a highly important component of how we manage, market and maintain our properties, and we're going to be devoting increasing time and money to introducing even more programs in that regard.
David Simon
And I would just say the people that do follow us on the social media side are our best customers. They really like the fact that we're able to talk to them about promotions and offerings from the retailers, and it's really influencing some behavior.
So this whole area, basically, our vision here, just like we had the vision of being a retail real estate company, our envision with the mall, is to really turn it into a smart box. One where technology can enhance the shopping experience, create more efficiency out of it.
And I think we're just on the cusp of that. We're working with a number of retailers that see the same vision that we do, obviously, trying to put all of the retailers on the same platform.
If you think about the mall, in a sense, what makes the mall great; it's all the retailers together in one platform. In that case, it's the physical.
We really want to move the mall environment, from a technology point of view, on that same platform, as customers interface with what's going on in the mall. And it's going to take time, but I think if we can show that value to the retailer, then by creating that platform, it's going to enhance the shopping experience for the consumer.
And that's what we're after, for sure.
Craig Schmidt - BofA Merrill Lynch
Yes, I guess I was also interested, because I read that 6x the amount of Internet sales were purchases that were influenced by the Internet, but still done at bricks and mortar.
David Simon
There's an undeniable link, I think the movement toward from your desktop to mobile is a great opportunity for the physical-based environment to take that mobile and enhance when they're walking the physical or adjacent or near the physical environment. So the fact that they've gone mobile and move toward mobile, if we can bridge that to the physical world, I think it's got a lot of benefits for us.
As an industry, it's not just us, but we're going to be pushing it hard.
Operator
And our next question will come from the line of Alex Goldfarb with Sandler O'Neill.
Alexander Goldfarb - UBS
Just circling back to capital for a minute. Just to help us, sort of domestic folks here, can you give us a sense of what the British and the South African shareholders were saying?
Were they more, like as you would talk to them, were they more NAV-focused or the equivalent rent that mark-to-market focus? Or was it more a sense of if we sell this, we're not sure where were going to reinvest the proceeds, and therefore, we'd rather just hang on to capital rather than having to deal with trying reinvesting?
What were the big pieces?
David Simon
Well, I think you got to really -- the U.K. shareholders were very similar to what that I would say the U.S.
shareholders look to. So there wasn't a great difference there.
And we, again, I mean, our feedback from the U.K. shareholders was they were disappointed that the company wouldn't give us due diligence to decide whether or not we wanted to make a firm offer.
And I think the U.K. shareholders have a very similar mindset to the U.S.
shareholders. And they viewed the Trafford deal, in many respects, as a change of control, and they wanted to look at their financial options.
The South African shareholders essentially started that way, but they were also highly influenced that there is a exemption that they get by owning Capital Shopping Centres. It's exempted from the limitation that they have in terms of being able to make investments outside of South Africa.
So there was some of that. On the other hand, some were more clinical.
Their mood ebbed and flowed. But clearly, having exposure outside of South Africa was important to a number of them.
Alexander Goldfarb - UBS
And then just moving to the Great White North. If you guys were --
David Simon
You mean Indianapolis?
Alexander Goldfarb - UBS
Exactly, well, we certainly have our fair share of snow here. As far as Canada, obviously, Kimco entered there a while back, and obviously, there's been another announcement more recently.
What do you think the challenges of entering that market? Or why you think we haven't seen more U.S.
retail REITs head up there? Is it just the returns?
Is it trying to get land? Is it maybe something in the leasing environment that it's a little bit different than here?
What are the challenges for up there?
David Simon
Look, I think, frankly, a number of retail REITs were just focused, the last couple of years have not been easy, right? So I think it's more of that.
I think the Canadian market certainly has developed more. It's more of an interest to our U.S.
-based retailers than it's used to be, but it's not huge. I mean, it's not pervasive.
It's not every U.S. retailer’s up there, but it's growing and growing.
And so I think it's just other priorities, Alex, primarily. I think demand has improved.
And then ultimately, I would just say, just from our perspective, because we reviewed the market for on and off for a number of years, finding the right site at the right value is not overly easy. And you want to start, if you're going to do it, you want to start in Toronto, essentially, would be the best place to start.
It's just not a lot of great sites at appropriate values to justify it. But it's, long term, I think it's a good market for potentially future retail development, including outlets.
Alexander Goldfarb - UBS
So as far as returns though, would you underwrite Canada to be the, is it the same returns as U.S. ?
Is it lower returns? Is it higher returns that you would want to see?
David Simon
I think land value there will be more expensive than land value here in the cities that you would want to build outlets in, and rents may be able to offset that. So you may end up with similar returns.
Operator
And our next question comes from the line of Ki Bin Kim with Macquarie.
Ki Bin Kim - Macquarie Research Equities
So I just had a couple of questions regarding your leasing strategy. So in light of pending sales per square foot increasing towards 500 and in conjunction, had low occupancy costs, can you give us a sense of how quickly can the occupancy cost go back to historical levels?
And when you're sitting down with a tenant and during leasing negotiations, do you typically sign or have in the mindset to sign a rent that is like 15% occupancy costs? Or do you actually embed any future growth in tenant sales?
Richard Sokolov
Let me just answer the first question. Obviously, we would very much hope that they are going to continue to move up, but we have a very nice problem in that our sales are growing at 9.4% a year.
Don't forget, we only roll a certain percentage of space every year. So it takes some time to make up that ground when you have good sales growth.
In terms of our negotiation. Every negotiation we have is driven by what's the quality of the mall?
What's the type of tenant use? And what is the quality of the space within that mall?
And those three things drive how we price our space, and we are constantly trying to get the appropriate market rent. When tenants complain to us that our rents are too high, we point out that we don't set the market, the tenants do.
And if you look at our occupancy, obviously, there are people that still believe they can make a lot of money at the rents we're charging, or we're going to constantly keep pushing that rent. And the other point I want to make because David emphasized it, all the capital we're spending in our portfolio, renovating properties, modernizing them, adding anchors, adding department stores, expanding them, are only making our properties more valuable to the retailer, because they're increasing the total sales we have and the productivity of all the other tenants.
So not only do we get the returns that David talked about, but we get the incremental benefit of having a much better shopping environment going forward, as we go to re-lease space rolling over there.
Alexander Goldfarb - UBS
And if I can follow up still, in your same store leasing stats, you mentioned that the uptick in leasing rent per square foot is $2.71 in the same space. What is that in a percentage term?
And last question, is your guidance for 2011 lowered by the impairment charges you’re -- that you expect in Opry?
David Simon
It is lowered. It's not impairment.
It’s basically we’re -- it's really we're incurring interest expense with no income. So we have no cash flow right now at Opry Mills.
So it's not an impairment charge. It's actually a negative cash flow drain until we rebuild it.
I'm not sure how much of the same -- what percent of our leasing spread or leasing data is just same space. Is that what you're asking?
Alexander Goldfarb - UBS
I think in your opening comments, you mentioned that the leasing spreads on the positive, it was positive $2.71 or so. It's all for the same space.
I was just wondering what that means in a percentage term.
David Simon
Same space is actually literally this space. A lot happens in malls, where you, our spreads, as we traditionally have done, it is just ending versus new in totality.
We try to narrow it down. I don't know if we have the exact percent of what same space is, but we certainly can get that to you, as I don't have that in front of me.
Alexander Goldfarb - UBS
Can you disclose what the tenant sales per square foot was in the quarter, not in 2010? Not the average for the year, but for the quarter.
Stephen Sterrett
Quarter-over-quarter, the sequential growth in the fourth quarter; it was 9%.
Operator
And our next question comes from the line of David Harris with Gleacher & Company.
David Harris - Gleacher & Company, Inc.
$500,000,000 of redevelopment is a pretty small beer on a company with a $60 billion gross asset base. Any comment there as to where you're going in the next few years?
David Simon
Well, that's what makes us unique, is we still care about $500,000,000. Look, again, remember just take it a step back, having lived through '08, '09 and a good chunk of '10.
We just have geared up on this. And so to create the deals that we're actually going to be able to spend that money, when it takes some time to get that going, is not a small feat.
And as Rick said, it is going to produce incremental NOI growth. It's not insignificant.
So in the scheme of things, it may not seem like a big percent of our total asset base, but it is extremely cash flow positive, plus all the other residual benefits of making a property better in the long run is very, very important. And I would hope that with time, we could crank this up.
But it's a very, very good, solid start to having essentially just rejuvenated this program in kind of mid to -- really in the early spring of '10. So it's a good start.
What the number is, I think it's going to be up to how creative we'll be. And I can't pinpoint it, other than we've got a lot on the drawing board that we're hopeful about, and I think we'll just see where it takes us.
David Harris - Gleacher & Company, Inc.
Is it typically a sort of 12-month lead in for this sort of stuff?
David Simon
It does, especially if you're trying to secure anchor involvement in it. And entitlements are not, they're not easy to get, even in today's environment.
David Harris - Gleacher & Company, Inc.
I've got a question for Rick. I looked at the TIs, Rick, in the 8-K and compared them to where they were for the 12 months ending December '09.
It looked like there was a pretty sharp increase. Is there something going on in terms of the leasing or where we’re at today?
It's had a fairly good run rate.
Richard Sokolov
Well, we, frankly, the most important happy fact is that we've leased dramatically more square footage. And as we are doing more and more deals, we're spending a little more and more allowance.
But when you look at that number, it is, on a per-square-foot basis, pretty consistent.
Stephen Sterrett
This is Steve. The only thing I'd say that might tweak that a little bit, and Rick and David both alluded to it earlier, we're doing a ton of box activity, where over the last couple years, there had not been as much.
So that may influence it some, as well. But I think Rick's right.
If you just think about the ordinary regular seven- to 10-year lease, the economics of that in terms of what the tenant allowance is hasn't really changed.
David Harris - Gleacher & Company, Inc.
And the boxes, Steve, is it higher or lower?
Stephen Sterrett
It's probably lower on a per-square-foot basis. But dollar amounts, because they're bigger spaces, it's more money.
David Simon
And if you look, I think Steve's 100% on. If you look at probably '09 box activities and '10, you'll see the dramatic uptick.
David Harris - Gleacher & Company, Inc.
One final question for you, Steve. A nice bond trade in '10, any chances of replicating that, as we look in to '11 and the refinancing market?
Stephen Sterrett
Well, I think, David, I would say this, I hope so. But if you recall, by virtue of the two tenders that we did in '10, we significantly cleaned out our bond maturities in '11 and '12.
And in fact, we've got under $400 million a year coming in each of those two years. So we can be very opportunistic.
We certainly are looking at the market. We're paying attention to it.
But the activity that we'll do in the bond market in 2011, if any, will be opportunistic.
David Harris - Gleacher & Company, Inc.
Run a slide rule over converts at all?
David Simon
I don’t see it right now.
Stephen Sterrett
I confess it may be the single largest file I have in my office, because of all the banking brethren sending us proposals, but I don't see it right now.
Operator
And our next question will come from the line of Carol Kemple with Hilliard Lyons.
Carol Kemple - Hilliard Lyons
I was just curious, why did other income fall year-over-year?
Stephen Sterrett
Well, you had a couple of things. You're talking about it looking at '10 as opposed to '09?
And are you looking at '09 to '10, are you looking it on a full-year basis?
Carol Kemple - Hilliard Lyons
Quarterly on the income statement.
Stephen Sterrett
Quarterly on the income statement, it was lease termination income in the fourth quarter of '09.
Carol Kemple - Hilliard Lyons
And then what retailers are wanting more space at this point?
Richard Sokolov
Well, the ones that are particularly active now are like Love Culture, Gymboree is rolling out, Crazy 8, ENCORE Shoes, Pandora. We're doing a lot of business with Sperry and Stride Rite that are divisions of Collective Brands, rue21 and Forever 21 remain very active.
And happily, we're also spending a lot of time with the restaurants. So we've got a number of California Pizza Kitchens opening in the portfolio and Red Robins.
And we've also been active with Ann Taylor Loft. So there's a very good core group of retailers that are still looking to aggressively grow.
Operator
And our next question will come from the line of Nathan Isbee with Stifel, Nicolaus.
Nathan Isbee
Just going back to Prime. You had a full quarter under your belt here.
Can you just talk about how much NOI growth potential you see out of the portfolio, both in '11 and maybe over the next few years?
David Simon
Well, I can tell you that what we -- we're going to exceed our underwriting.
Nathan Isbee
And what was that?
David Simon
These are tough questions.
Stephen Sterrett
Well, Nate, we told you it was a, going in, eight cap.
David Simon
We're going to exceed our underwriting, and I think the re-merchandising success that we’ve had with our other outlets will take some time. But we would hope to get it on with our other outlets.
So we see that opportunity for sure.
Nathan Isbee
Steve, I mean, you're looking at 5%, 7%, 10% growth in '11 from that?
David Simon
Well, certainly from our underwriting, we're above 5% and probably close to your other number.
Nathan Isbee
And then just looking back to the recent holiday season, a lot of talk was about the strength coming out of the luxury in the higher-end retailers? Can you talk about how that's playing out in your portfolio?
Richard Sokolov
We've seen the same trends. Obviously, some of that was just a function of rebounding off of depressed levels in '09.
But clearly, I just saw Estée Lauder reported yesterday, and their better brands had better performance than their more moderate brands. And I think you can see that across the landscape that the better consumer has come back stronger, and we're seeing that as well in our properties.
The other thing that's really been very apparent in our properties is that the centers that benefit from tourism are being incrementally benefited with above-portfolio sales growth, because the tourist is back substantially. And that obviously is also helping.
Nathan Isbee
And then just quickly, when you talked about Canada, having reviewed it, I'm sure you've been focusing on it for a while, how many centers do you see the country being able to support in terms of the quality of a Chelsea type of center?
David Simon
On the outlet side?
Nathan Isbee
Yes.
David Simon
It's hard to stay. I think the Vaughan Mills has been successful, so I do there, as an example.
Obviously, I think getting one or two built in kind of the major markets. They’re not many, but they're there.
That's got an option. I mean, It's hard to say, but certainly, more than a few.
And it really -- a lot of that just depends on how the early couple go, and whether they produce the results that they do. Now the fact is, the Canadians with the strong dollar love to come to the U.S.
to shop. And I do think that's still is an opportunity for them that may limit some of the potential growth, just because they do have that advantage vis-à-vis the U.S.
dollar.
Operator
And our next question comes from the line of James Sullivan with Cowen Group.
James Sullivan - Cowen and Company, LLC
I have two questions for you. First of all, on the same store NOI outlook.
When we looked back at the prior cycle, and I'm talking about a cyclical rebound in the economy post 2002, and it was pre- the premium acquisition and the converging all the reporting data, but when we looked at the mall sector on a multiyear basis, '02 to '07, same store NOI growth averaged about 5% and sales productivity was fairly comparable over that period of time, the sales productivity growth. I know there was a significant contribution from the growth of specialty leasing, the RMU phenomenon.
But looking at where you are now, historically, if we think about the cyclical rebound in the economy and retail sales, is there any secular reason why the growth rate would not match that kind of level going forward?
David Simon
Well, I think the answer to that is yes, and it's primarily because the shock to the system this time around has been dramatic, and it's impacted the consumer, probably, psyche more than the last downturn. And I think it's just going to take, it's going to be a very gradual ramp-up.
And the employment side is probably more tenuous here, though the better income side, the difference here though, the better income participant in the economy is more employed than maybe the last time around. But I just think the shock to the system’s a little bit, there's more uncertainty coming out of it, clearly, than there was last time.
So I would be a little more cautious. I don't think there's anything fundamental in the supply-and-demand scenario or anything else out there that could keep that from happening, but I just think the size of the economic dislocation here has been so great.
And there's still a lot of uncertainty. You've got state budget issues, you got the municipal markets, you still got unemployment, you got inflation may or may not be here.
So there's just a lot of noise here that I think may keep the recovery more muted than it might otherwise be.
James Sullivan - Cowen and Company, LLC
And the second question really revolves around a lot of the commentary about department stores and underutilization of department store pads. You addressed the one solution to that, which is the spin-off leaseback alternative.
Other people have talked about monetizing the square footage by converting the use to something else. Now the question I have, and it really is, I guess this is partly a legal question, but with the presence of operating covenants and reciprocal easements, doesn't that mean that any monetization of those pads that involves a conversion of use has to go through you guys?
Richard Sokolov
Yes.
James Sullivan - Cowen and Company, LLC
Have you had any discussions with any of the department stores on some of those underutilized, underproductive spaces?
Richard Sokolov
The company that has been making certain efforts in that regard has been Sears, where they've done a couple of areas where they've been able to do a partial use in part of their space. But again, as David alluded to earlier, the single best, most profitable use for these boxes is as a performing department store in a chain.
If you put the multiple of EBITDA on stock price, it usually dwarfs the real estate value of that box for any other use. And I think that's why you've seen historically over time relatively few closures, and why you see stores working now that the environment is more stable, working to find new opportunities to build stores.
And we are going to, hopefully, have a number of announcements over the next six months of department stores being added to our properties, because they're looking to grow. And that's a very productive way to growth their top line and their bottom line.
David Simon
And I would just say, Jim, the biggest discussion we have with them is what price we're willing to buy it and what price they want to sell it. They don't want to be -- very few of the, certainly, the department stores want, ultimately, be in the development business.
And that's where most of their boxes, if they're connected to a mall, they end up being in the development business. And that's not a core competency.
And in many of those, most of those cases, they're selling it to us or some other developer. And the landscape, frankly, is littered with some bad deals where they sold and the developers tried to buy it at certain prices, and they didn't get the right value.
We have not had that experience. We've actually been pretty good at what we bought and being able to recapitalize on it.
Operator
And our next question comes from the line of Ben Yang with Keefe, Bruyette, & Woods.
Benjamin Yang - Keefe, Bruyette, & Woods, Inc.
David, I have a question on the domestic outlook strategy. Clearly, the space is getting a bit crowded.
And it's kind of interesting to see what's happening in the Houston submarket with you, Tanger and even maybe Taubman competing to get an outlet center built there. And since we could see this happen going forward, can you talk about how retailers evaluate the different opportunities that they have?
Is it based on rents and location only? Or is there anything else that might differentiate your site from, say, Tanger's?
David Simon
I don't want to speak for the retailers. But let's assume, I think they, I'll say it very generically, they tend to go where they think the best site and/or development’s going to take place.
And I'll leave it at that.
Benjamin Yang - Keefe, Bruyette, & Woods, Inc.
I mean, is it going to be similar to what we saw with the Lifestyle centers where they tend to move as a group? And once you or Tanger has some of the key tenants, then it's pretty much a done deal on which site basically wins that market?
Is that your expectation?
David Simon
Yes, I think you'll see some of that, Ben. You'll also -- sometimes, sensitivity plays a role into it.
Certainly, in the outlet side with respect to where their full priced stores are located. So it's kind of location development, and they're certainly part of that.
When you get the momentum in a deal, the retailers see that, and they tend to go where they think the development's going to get done. But a lot of it’s the site.
But I will say this: I don't think you'll see, I think we're all very experienced developers. Houston is a good example with Taubman and Tanger and us, we're all looking in kind of a submarket.
I think we're all very competent developers. And my guess is whoever's successful, there's not going to be two of these.
There’ll ultimately be one. So I don't see it so much like the Lifestyle group, where you had a bunch built because there was so much money.
I think the guys that are in this business understand they may win some and lose some and go on to the next opportunity, as opposed to two going up at the same time. I don't see that happening.
Benjamin Yang - Keefe, Bruyette, & Woods, Inc.
And then at what point do you guys potentially bail on a project? I mean, is a high single-digit return still satisfactory for you guys, like a Galveston project?
Or is that too low, given what you've gotten in the past?
David Simon
I think it would be too low for us from a development point of view. If we're not in the double digits, we would not build.
Benjamin Yang - Keefe, Bruyette, & Woods, Inc.
Is it fair to say that's lower than like the mid-teens that you used to get just a few years ago?
David Simon
Well, it might be lower. We tend to look at most of our new stuff in phases.
So the initial phase could be the low double-digits and then, ultimately, if we build phase, we're in the mid-range. I don't think that's changed that much, but there is more competition.
So it may have some impact on that. But again, if we felt like we're building below low double-digits, we would not build.
Operator
And our next question will come from the line of Michael Mueller with JP Morgan.
Michael Mueller - JP Morgan Chase & Co
On the six major redevelopments you're talking about kicking off this year, what's a rough dollar cost of that?
David Simon
Well, I think, altogether, we're in the $500 million range. Those will be, again, a lot of this is going to be spread over '11 and '12.
But if you were just to look at -- I don't have those six right in front of me. We can certainly give that to you.
But overall when you look at everything, it's around $500 million, our share.
Michael Mueller - JP Morgan Chase & Co
And is that the spend or is that the total expected cost?
David Simon
That's just for spend this year. And a couple of those, clearly, will have carryover in '11, but we could get you those exact numbers.
And obviously, those will be in our 8-K when they start construction.
Michael Mueller - JP Morgan Chase & Co
Secondly, on guidance, I may have missed it. Did you mention what the occupancy assumption was to get to your same store guidance?
David Simon
We did not. We decided to be less granular on our guidance this year than the last several years.
You should not be worried about that. That doesn't mean that we don't have, obviously, all the confidence in the world at delivering that guidance, but we just felt like it was more important to look at the totality of it than any one particular statistic.
But I think, in generally speaking, occupancy is up marginally in our model.
Michael Mueller - JP Morgan Chase & Co
And then last question, I'm sure this isn’t in guidance, but are you expecting to put capital to work in terms of acquisitions this year?
David Simon
It's not in our guidance.
Michael Mueller - JP Morgan Chase & Co
Yes, sure, it's not in guidance, but is it the expectation that you're going to be able to find some acquisitions this year?
David Simon
You never know. I just would say you never know.
I'm sure there will be opportunities, but we'll just see how the year transpires.
Operator
And our next question will come from the line of Cedric Lachance with Green Street Advisors.
Cedric Lachance - Green Street
David, I think about a year ago, you talked about Lifestyle centers that you had looked at, probably, about three dozen, and you couldn't find, at the time, any that were worthy of an investment. With the environment having changed the way it has, do you think that any of those or any Lifestyle centers might turn out to be a decent investment going forward?
David Simon
We continue to scour that land, that mine field of broken Lifestyle centers. And frankly, we still are having a hard time finding a couple of crown jewels.
It's not to say there might not be one or two, but, Rick, I mean, we just haven't seen it. We just haven't seen it.
The demand there to go, you've got, Cedric, most of those are the ones that we look at are all in co-tenancy, all have kick outs, and they all need lease-up, and they're just not performing. And some may be good long-term real estate.
But the demand, frankly, for those kind of centers has not, as far as we can see, has really not really picked up. Rick, you.
. .
Richard Sokolov
I think that's right, the ones we've looked at, frankly, we've been seeing NOIs that are in the offering brochures. So when we underwrite it based on potential decreases of that NOI, because of sales levels and co-tenancy, we're coming up with fractions of the NOI even in the offering book.
Now maybe we're conservative, but we've got so much we can do at better returns in our portfolio. It's very difficult to take a reach and try and buy somebody else's problem.
Operator
And our next question will come from the line of Tayo Okusanya with Jefferies.
Omotayo Okusanya - Jefferies & Company, Inc.
In regards to 2011 guidance, could you give us a sense of how much in regards to using excess cash to pay down debt is built into those numbers, whether it's any outstanding debt in 2011 or any debt, any payoff early from 2012 or 2013?
Stephen Sterrett
Tayo, this is Steve. There really isn't any of that.
There, as I said, we have very little bonds coming due, and even our mortgage maturities we’re just essentially assuming that we're going to roll them over.
Operator
And our next question is a follow-up question from the line of David Harris of Gleacher & Company.
David Harris - Gleacher & Company, Inc.
Early days yet, but new management at GGP out of bankruptcy. Are you coming across them more as a competitive force in the marketplace?
Or is it really just maintenance of the status quo?
David Simon
Nothing, really. Nothing that I've seen.
Rick, what do you think?
Richard Sokolov
Look, they're now actively leasing and they have direction. But candidly, last year and the year before, they were trying to actively lease as well.
So we've competed with them for a very long time, and we'll be competing with them going forward. And we intend to, hopefully, continue outperforming them.
David Simon
We're happy to help them, too, if they need any help.
David Harris - Gleacher & Company, Inc.
Rick, if you look back over the last couple of years, now, obviously, we’re in the new chapter for general growth. Is there any sense that you have that they really did get distracted and lost some competitive status in the marketplace?
Or is that something we kind of view from 30,000 feet that we wonder about, operationally, it really didn’t make much of a difference?
Richard Sokolov
I couldn't really tell you that. Look, the last couple of years, we were all very focused on a lot of exterior forces.
We're just focused on trying to grow our business and really didn't spend a lot of time focusing on that.
David Harris - Gleacher & Company, Inc.
Is it in the new concept area that you kind of more act, not only just for general growth, but also with the other big competitors in the space? Is it really on the new leasing side?
It's not obviously on renewing existing leases in established centers that you're really going head-to-head with them.
David Simon
Well, actually, with general growth, we have very, very little property overlap. And I think we mostly, frankly, compete with our peer group in the eyes of the analysts and investors.
The competition at the property level is overblown for any of us. We certainly, I mean, we're all trying to get the fair share of retailers open to buys, but I'd say the biggest competition is frankly in the eyes of investors.
Not so much day-to-day warfare at the property level. Sure, there's some malls that we overlapped with, a few of our peer group, but it's mostly at the corporate level, not so much on the retail day-to-day level.
Operator
And our next question comes from the line of Andrew Fenton with Crédit Suisse.
Andrew Fenton - Cliffwood Partners
I just had a global question for you. It's interesting on Simon calls, it always seems like the questions lead to acquisitions.
And two, in your kind of two large-cap global peers, both Unibail and Westfield, actually shrank their balance sheets through two different transactions, and it kind of, in a view to increase their ROE. Have you ever thought of doing something like that?
David Simon
Well, I think there was some reference to it about maybe we should spin this off or that off. We actually like what we've built here.
We've had better growth. So I think part of the response that you may be seeing is that the growth profile of those companies may be different than ours.
We haven't had that issue. And we're also primarily focused in the U.S., whereas certainly Westfield has a couple of different footprints.
So we think we're different. We're in a little different boat than those are.
I do think, as we've said, we'll certainly look to sell assets over time, if the market gets better, that don't fit our long-term view. But beyond that, we don't see any real change or need to, given our growth profile.
Andrew Fenton - Cliffwood Partners
I guess their pitch is you get some assets that eventually get mature, and then you can get a much better return on the stuff that have some remaining redevelopment or potentially, as NOI upside, do you have any part of your portfolio where you feel like Simon’s kind of worked it and the upside isn't as big?
Richard Sokolov
Well, look, certainly, with the vast portfolio we have, we have a handful of centers like that. And like I said, I think if the market stabilized for those kind of centers from a value point of view, it's conceivable that we could sell more assets than we have.
We've actually, over the years, been a very -- we've never been afraid to sell assets. So we've sold a couple of billion dollars, if not more, assets over our period of time.
So I think if the market gets better, we'd certainly look to do that. I don't think that, that necessarily needs to take the form of some kind of corporate restructuring.
But it's always good to prune your portfolio, if you can.
Operator
Ladies and gentlemen, this concludes our question-and-answer portion of today's call. I would now like to turn the call back over to Mr.
David Simon, CEO, for any closing remarks.
David Simon
Okay, thank you for your interest. Obviously, 2010 was a really good year for the company, and we expect 2011 to be more of the same, and our passion for the business continues.
Thank you very much.
Operator
Thank you for your participation in today's conference. This concludes your presentation.
You may now disconnect. Good day, everyone.