The head of Simon Property Group — which owns Rockaway Townsquare in Morris County near Route 80 and The Shops at Riverside off Route 4 in Hackensack — downplayed the impact of President Donald Trump’s new tariffs against China on the real estate giant’s operations, though he admitted that some costs may get passed on to shoppers.
Trump’s 10% tariffs on imports coming from China began on Tuesday.
Tariffs are essentially a tax on foreign goods paid by businesses importing those raw materials and manufactured products.
Imports from China to New Jersey were valued at $13.6 billion in 2023, said China’s consulate in New York.
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And China ships the largest volume of goods by far to the Port of New York and New Jersey. It sent more than 1 million TEUs, or 20-foot equivalent units, of products in 2023, well ahead of India’s 320,000. TEU is the generic unit of cargo capacity, basically the size of a standard 20-foot-long shipping container.
Catalyst — a partnership between JCPenney and the parent company of Brooks Brothers — sources 20% of its goods from China, said David Simon, the chairman, president and chief executive officer of Simon Property Group. Simon is one of the key investors in Catalyst.
JCPenney has a location at Rockaway Townsquare, and Brooks Brothers has a store at The Shops at Riverside.
“Their view of it is — with respect to China — that they’ll pass some of it on to the consumer, but also hope that the supplier tightens up the cost of goods sold,” he said during a quarterly earnings call.
“Many, many retailers have moved a lot of production out of China over the last several years,” he continued.
Prospect of tariffs against Mexico, Canada has sown anxiety in NJ
Still, tariffs on imports from China and the prospect of tariffs on imports from Canada and Mexico has sown anxiety among New Jersey businesses. Trump on Monday halted for a month his plan to impose 25% tariffs on imports from Canada and Mexico as the two nations duke out negotiations with the U.S. over border security.
Kearny-based Mac Products, which makes electrical distribution and transmission products, stockpiled raw materials from China in between Trump’s November victory and his Jan. 20 inauguration, said owner Eddie Russnow.
“As a businessperson, how do you plan if the three largest trading partners of ours — Canada, Mexico and China — are almost being cut off from our ability to be able to plan?” he said. “It’s stressful and it’s very frustrating.”
Tariffs would increase the cost of goods whether they’re bought directly from manufacturers in China or they’re raw materials used for manufacturing in the U.S., said Neil Saunders, a retail analyst at the research and analytics firm GlobalData.
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But that assumes a worst-case scenario — that is, the entire 10% increase in tariffs is passed on to consumers, said Jeffrey Otteau, managing partner and chief economist for the Otteau Group, a real estate consultant in Old Bridge.
A company might decide to increase the price of a product 5% and eat the rest of the tariff increase, Otteau said.
Other takeaways from Tuesday’s earnings call
Simon Property Group ended 2024 with $4.9 billion in revenue, public filings show, compared with $4.7 billion in 2023.
The company saw occupancy at its malls hit an eight-year high, Simon said.
And Simon may shift its focus toward tier “B” malls, such as the Smith Haven Mall on Long Island, that see less foot traffic and make less money than higher-performing “A” malls.
“When people talk ‘B,’ they always think ‘malls,’ but for us it’s across our entire domestic portfolio,” Simon told investors and analysts Tuesday.
A spokesperson for Simon Property Group did not respond to an email on whether any New Jersey malls would be part of that endeavor.
But Charles Cristella, senior vice president of leasing at JLL, a real estate services firm in Trenton, doubted any New Jersey properties would be affected.
“Simon has already focused on the New Jersey markets. They’ve done their renovations,” he said. “A ‘B’ center to Simon is an ‘A’ center to a lot of people.”
What are Simon’s New Jersey malls?
Simon Property Group has 12 malls and centers in New Jersey:
- Gloucester Premium Outlets, Blackwood.
- Jackson Premium Outlets, Jackson.
- Jersey Shore Premium Outlets, Tinton Falls.
- Menlo Park Mall, Edison.
- Newport Centre, Jersey City.
- Newport Crossing, Jersey City.
- Newport Plaza, Jersey City.
- Ocean County Mall, Toms River.
- Quaker Bridge Mall, Lawrenceville.
- Rockaway Townsquare, Rockaway.
- The Mills at Jersey Gardens, Elizabeth.
- The Shops at Riverside, Hackensack.
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.
Email: munozd@northjersey.com; Twitter:@danielmunoz100 and Facebook
