Simon Property Group Forms $300M Blank Check Company

Simon Property Group is the latest commercial real estate company to enter the SPAC frenzy with the formation of a $300 million blank check company targeting innovative retail companies. 

Simon Property Group Acquisition has filed paperwork with the Securities & Exchange Commission to raise up to $300 million in an initial public offering by offering 30 million units—which each will consist of one share of common stock and one-fourth of a warrant exercisable at $11.50—at a price of $10 per unit.  It has the potential to reach a $345 million valuation if underwriter Goldman Sachs elects to exercise options on an additional 4.5 million units. 

A SPAC, also known as a special purpose acquisition company or blank check company, is a publicly-traded shell company formed to pursue private sector deals by raising cash in an IPO and then seeking acquisition targets. The acquired companies then use the SPAC to sell shares publicly, a process that bypasses the typical initial public offering framework.

Simon’s SPAC does not have a specific target and is instead focused on “innovative business with the potential to disrupt various aspects of the retail industry and make a transformative impact on in-person and/or online experiences,” according to the company’s SEC filing.  Simon’s SPAC is the latest in a spate of CRE-focused blank check companies that are fast becoming the preferred investment vehicle for large investors: 2020 saw the launch of several CRE SPACs, with firms like CBRE, Property Solutions Acquisition, and Tishman Speyer making announcements  in rapid succession. Their acquisition targets range from proptech companies to industrial assets.  

Simon’s SPAC, not surprisingly, is focused on the retail space. “We are well positioned to identify and execute an acquisition with a company that will benefit from SPG’s industry expertise, access, scale and broad network of client and supplier relationships, which a financial sponsor could not easily replicate,” the company said in its SEC filing. “We intend to utilize SPG’s relationships with and ownership of brands, retailers and operating businesses, and its broader network of connections in real estate, retail, finance, media, and entertainment.”

Simon Property Group Acquisition is led by David Simon, the REIT’s CEO and Chairman, Eli Simon, SVP of Corporate Investments, and CFO Brian McDade.