Jim Cramer on Simon Property (SPG) and Federal Realty (FRT): “Both of Them Are Excellent”

On the September 8 episode of Mad Money, financial commentator Jim Cramer enthusiastically recommended two real estate investment trusts (REITs) to listeners: Simon Property Group (SPG) and Federal Realty Investment Trust (FRT). Cramer praised SPG's 4.25% yield, highlighting its strong financial performance. The REIT reported a 7.9% increase in real estate funds from operations (FFO) per share year-over-year and a 13.9% rise in retailer sales per square foot.

SPG raised its 2026 real estate FFO guidance to $13.20-$13.30 per share, implying a forward price-to-FFO multiple of approximately 16x at the stock's closing price of $211.88. Federal Realty, on the other hand, offers a different retail exposure through shopping centers, with a 6.8% year-over-year increase in core FFO and a 93.8% portfolio occupancy rate.

The company raised its 2026 Core FFO guidance to $7.48-$7.56 per share, reflecting a forward price-to-FFO multiple of around 15.6x at its closing price of $117.09. Both REITs face the risk of prolonged high interest rates, which could increase refinancing costs and diminish their appeal compared to bonds. Despite this common risk, SPG is larger in scale and provides a higher yield, while FRT has maintained stable hedge-fund ownership and demonstrated robust leasing results.

Insider Monkey's data shows a slight decrease in hedge fund holdings for SPG and a slight increase for FRT over the past two quarters. However, the commentator believes that certain AI stocks offer greater upside potential and carry less downside risk, and suggests exploring their free report on the best short-term AI stock.