Simon Property Group, Inc. Simon Property Group, L.P. Notes to Schedule III as of December 31, 2025 (Dollars in thousands)
(1) Reconciliation of Real Estate Properties: The changes in real estate assets for the years ended December 31, 2025, 2024, and 2023 are as follows: 2025 2024 2023 Balance, beginning of year. . . . . . . . . . . . $ 39,711,997 $ 38,784,918 $ 37,879,778 Acquisitions and consolidations (7) .. 9,465,165 589,501 78,410 Improvements ................... 935,200 744,574 823,705 Disposals and consolidations ....... (119,324) (285,998) (55,593) Currency Translation Adjustment ... 309,511 (120,998) 58,618 Balance, close of year ............... $ 50,302,549 $ 39,711,997 $ 38,784,918 The unaudited aggregate cost of real estate assets for U.S. federal income tax purposes as of December 31, 2025 was $29,284,589. Reconciliation of Accumulated Depreciation: The changes in accumulated depreciation for the years ended December 31, 2025, 2024, and 2023 are as follows: 2025 2024 2023 Balance, beginning of year ............. $ 18,663,586 $ 17,351,320 $ 16,224,050 Depreciation expense (7) . . . . . . . . . . . . 1,481,880 1,118,198 1,193,391 Disposals and consolidations. . . . . . . . . 159,272 164,761 (53,489) Currency Translation Adjustment ..... (70,272) 29,307 (12,632) Balance,closeofyear................. $ 20,234,466 $ 18,663,586 $ 17,351,320 Depreciation of our investment in buildings and improvements reflected in the consolidated statements of operations and comprehensive income is calculated over the estimated original lives of the assets as noted below. • Buildings and Improvements — typically 10-35 years for the structure, 15 years for landscaping and parking lot, and 10 years for HVAC equipment. • Tenant Allowances and Improvements — shorter of lease term or useful life. (2) (3) Initial cost generally represents net book value at December 20, 1993, except for acquired properties and new developments after December 20, 1993. Initial cost also includes any new developments that are opened during the current year. Costs of disposals and impairments of property are first reflected as a reduction to cost capitalized subsequent to acquisition. (4) Not developed/constructed by us or our predecessors. The date of construction represents the initial acquisition date for assets in which we have acquired multiple interests. (5) Initial cost for these properties is the cost at the date of consolidation for properties previously accounted for under the equity method of accounting. (6) Encumbrances represent face amount of mortgage debt and exclude any premiums or discounts and deferred financing costs.
(7) Represents the original cost and does not include subsequent currency translation adjustments.
(8) Represents preliminary values related to the TRG Acquisition, as discussed in Note 4.
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