Simon Property Group is doubling down on its Orange County malls even while taxable sales plunge at its two key centers, Brea Mall and The Shops at Mission Viejo.
Both malls, owned by the Indianapolis-based firm, experienced a decline in taxable sales in the double digits over the 12 months ended June 30. The downturn comes as Simon accelerates major makeovers at each shopping center—aimed at reviving shopper interest with new outdoor plazas, restaurants and upgraded tenants.
Simon CEO David Simon is optimistic about the future of the company’s enclosed malls.
“The consumer is holding on,” Simon told analysts on the company’s second-quarter earnings call in August. “Retail demand is really ‘unabated.’ And the physical shopping environment continues to be the place to be.”
Simon also stated that it is experiencing strong tenant demand across its portfolio. It reported occupancy of 96% across its U.S. malls and premium outlets as of June 30.
Though enclosed malls are up to 50 years old, most are still putting up a good fight, he said.
That includes the Brea Mall and The Shops at Mission Viejo, two Orange County centers that Simon is currently redeveloping with a focus on adding outdoor space and refreshing the tenant lineup.
The Brea Mall recently completed its newest 119,000-square-foot outdoor plaza on the southwest side and is on the second phase of renovations, which includes building a Life Time Fitness gym and completing a 50,000-square-foot Dick’s Sporting Goods. AO of Orange is the key architect on the project.
In Mission Viejo, Simon broke ground this year on a 50,000-square-foot expansion that includes an outdoor “village” with new restaurants and stores such as Pacific Catch and Arhaus.
Brian McDade, chief financial officer, told investors during an August earnings call that Simon’s national strategy is to replace underperforming tenants.
“It’s really finding merchandise mix and finding tenants that make the properties better,” McDade said on the call.
Simon says the operator is not intimidated by the current retail headwinds.
“We’re quite bullish about what we’ve done, what we are doing, where we are going despite all of the headlines that are out there,” he said.
The Shops at Mission Viejo
The Shops at Mission Viejo reported a 24% drop to $263 million in taxable sales for the 12 months ended June 30. The company declined to comment on the decrease. The mall ranked the eighth largest by sales on the Business Journal’s annual list of shopping centers.
An additional 50,000 square feet of available space outdoors is under construction between the Old Navy and Macy’s women’s store on the southeast corner of The Shops. The mall counts 1.15 million square feet of gross leasable space as of October.
“Outdoor living plays an integral part in the Orange County lifestyle, and this additional open-air space adds a significant point of emphasis in our revitalization plans,” General Manager Patsy Sanquist told the Business Journal via email.
The Mission Viejo center features 150 stores and plans to add two full-service restaurants, Pacific Catch and North Italia, along with outdoor dining terraces in the new outdoor space.
The area’s new Arhaus store will span two stories, and Williams-Sonoma and Pottery Barn will relocate nearby into larger spaces as well.
“Retail in Orange County remains strong and malls are performing exceptionally well,” Patsy Sanquist said, adding that this year’s leasing activity at The Shops was strong also.
Most recently, new tenants such as Uniqlo, Sbarro, Iron King Mongolian BBQ, Mr. Inkwells Piercing Studio and Jamba Juice opened at the mall.
Sanquist also reaffirmed Simon’s take on tenant demand.
“The Shops at Mission Viejo has maintained a strong and robust mix of retail and dining options for our shoppers, and we’re continuing to see high demand for leasing space.”
Sanquist added that there’s still value in physical retail.
“While shopping online is convenient for some shoppers, we know people want to see, touch, and feel their purchases, especially for apparel, footwear, and high-value items.”
“We provide a delightful social experience that an online cart simply cannot match,” she said.
The outdoor area, along with the new tenants, is slated to open in late 2026, in time for the holiday season.
Brea Mall
In 2020, Simon Property Group set its sights on redeveloping a 15.5-acre portion of the Brea mall property.
Before the project, the Brea Mall had approximately 1.3 million square feet of gross leasable space and around 170 stores.
The multimillion-dollar redevelopment project adds more than 190,000 square feet of retail and dining space. Part of the makeover included the demolition of the former Sears space and the addition of new tenants, such as Rivian, Voluspa and Philz Coffee. Some stores, such as Pottery Barn and Lululemon, relocated to the expanded and higher-profile storefronts in the new outdoor area.
Between this year and 2026, Brea Mall will welcome over 27 new tenants from retail, dining and entertainment including Din Tai Fung.
“This project is a strategic investment to lead the competitive Northern Orange County market,” Director of Marketing and Business Development Nate Weirbach told the Business Journal.
Two of the larger additions, the 90,000-square-foot Life Time gym and Dick’s Sporting Goods, are slated for completion by spring 2026, according to Mayor Blair Stewart.
Simon also has plans to build a 377-unit apartment complex—following a trend in other OC malls that have added housing on site, including The Outlets at Orange and MainPlace Mall in Santa Ana.
The seven-story residential building, a collaboration with AMLI Residential, is the final phase of the redevelopment project.
Mayor Stewart said the mall wanted to ensure the retail component came first when it began the redevelopment in 2023.
“It’s important for the city to get that revenue started,” he told the Business Journal.
With the ongoing construction, Brea Mall’s performance took a hit over the past year.
The center recorded a 25% decrease in taxable sales to $405 million for the 12 months ended June 30. The center ranked No. 7 on the Business Journal’s annual list.
“Competing with the convenience of e-commerce is a challenge, but we focus on the advantages of the in-person experience and the things shoppers miss when they go online,” Weirbach said.
The mayor noted that the 74-acre mall is already experiencing a revenue increase following the recent additions.
“We’re adapting to consumer demand,” Weirbach added.
