Simon Property Group is a REIT. There are many REITs in the Country and some invest in a variety of assets while others specialize. Simon specializes in outlet shopping centers. With over 251 million square feet under their ownership, Simon is not only the largest outlet mall owner in the U.S., it is the largest shopping center owner in the U.S. The competition could best be described as Perfect Competition, since there are small barriers to entry and there are many competitors.
With that being said, there are also many threats Simon must overcome if it wishes to remain on top. 1) Threat of rivalry. Simon has built relationships with many retailers and can utilize its size and power to stronghold retailers into not opening up shops in competing nearby malls. Example: Ralph Lauren wishes to move its store from Small Town Outlets to Urban Outlets (hypothetical names), however Simon does not own Urban Outlets and tells Ralph Lauren that if it wishes to vacate their space there may be repercussions in the 47 other leases it has with Simon Property Group. Since Simon is so large it is very difficult for a small (or large) investor to make fast and impactful moves against the company, however there really isn’t anything stopping another REIT from entering and making a dent in Simons earnings.
Another threat is the Threat of Substitutes. Right now the average normal shopping mall is crumbling as we speak. Vacancy is at an all-time high and there is no end in sight due to online shopping. Appraisers have dubbed a term known as “dark store” that depicts large big box retail stores closing and remaining “dark” for long periods of time with their highest and best use being alternative retail (i.e. a church, charter school, storage units, etc.). Online shopping crumbled the average retailer but outlet retailers have squeezed by relatively untouched….for now.
There is nothing out there that prohibits Amazon from selling the exact same items the retail tenants in a Simon mall are selling. In fact, sometimes they do. The term “outlet” sounds nice, and inexpensive, and a deal. Is that the reason they remain successful? It may be, or possibly the real reason truly is Simon management and knowing how to continue to attract customers and foot traffic. Regardless, the threat of substitute is extremely high in retail real estate and I am sure Simon is working on how to combat that with shopping experiences, which is something you won’t get when clicking on “buy” from an online retailer.
Chapter 3 essentially goes over Porter’s 5 forces model and the two I feel are most relevant to Simon Property Group are Threats of Entry and Threats of Substitutes. I believe I have explained how these relate to Simon and where they should be paying attention to prevent a decline in revenue as a result of the threats.
Simon Property Group 
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