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Previous: MUNIHOLDINGS NEW YORK INSURED FUND II /NEW/, NSAR-B, 1998-11-25 |
Next: CONTIMORTGAGE HOME EQUITY TRUST 1998-2, 8-K, 1998-11-25 |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 25, 1998
SIMON PROPERTY GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-14469 046268599
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
115 WEST WASHINGTON STREET
INDIANAPOLIS, INDIANA 46204
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: 317.636.1600
Not Applicable
(Former name or former address, if changed since last report)
Page 1 of 43 Pages
<Page 01>
Item 5. Other Events
On November 25, 1998 the Registrant made available additional
ownership and operation information concerning the Registrant, SPG
Realty Consultants, Inc. (the Registrant's paired-share affiliate),
Simon Property Group, L.P., and properties owned or managed as of
September 30, 1998, in the form of a Supplemental Information package, a
copy of which is included as an exhibit to this filing. The
Supplemental Information package is available upon request as specified
therein.
Item 7. Financial Statements and Exhibits
Financial Statements:
None
Exhibits:
Page Number in
Exhibit No. Description This Filing
99 Supplemental Information 4
as of September 30, 1998
<Page 2>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: November 25, 1998
SIMON PROPERTY GROUP, INC.
By: \s\Stephen E. Sterret
Stephen E. Sterrett,
Treasurer
<Page 03>
SIMON PROPERTY GROUP
SUPPLEMENTAL INFORMATION
Table of Contents
As of September 30, 1998
Information Page
Overview 5
Ownership Structure 6-8
Reconciliation of Income to
Funds from Operations ("FFO") 9
Selected Financial Information 10-11
Portfolio GLA, Occupancy & Rent Data 12-13
Rent Information 14
Lease Expirations 15-16
Total Debt Amortization and Maturities by Year 17
Summary of Indebtedness 18
Summary of Indebtedness by Maturity 19-26
Summary of Variable Rate Debt and
Interest Rate Protection Agreements 27-28
New Development Activities 29
Significant Renovation/Expansion Activities 30-32
Capital Expenditures 33
Gains on Sales of Peripheral Land 34
Teleconference Text - November 11, 1998 35-43
<Page 04>
SIMON PROPERTY GROUP
Overview
The Company
Simon Property Group, Inc. ("SPG") (NYSE:SPG) is a self-administered and
self-managed real estate investment trust ("REIT"). Simon Property
Group, L.P. (the "Operating Partnership") is a subsidiary partnership of
SPG. Shares of SPG are paired with beneficial interests in shares of
stock of SPG Realty Consultants, Inc. ("SRC", and together with SPG, the
"Company"). The Company and the Operating Partnership (collectively the
"Simon Group") are engaged primarily in the ownership, operation,
management, leasing, acquisition, expansion and development of real
estate properties, primarily regional malls and community shopping
centers.
On September 24, 1998, the merger between Simon DeBartolo Group, Inc.
("SDG") and Corporate Property Investors, Inc. ("CPI"), a privately held
real estate investment trust and its "paired share" affiliate was
completed. The CPI merger added 22 high quality regional malls plus
three office buildings to the Simon Group portfolio.
At September 30, 1998, the Company, directly or through the Operating
Partnership, owned or had an interest in 241 properties which consisted
of regional malls, community shopping centers, and specialty and mixed-
use properties containing an aggregate of 165 million square feet of
gross leasable area (GLA) in 35 states. The Company, together with its
affiliated management companies, owned or managed approximately 180
million square feet of GLA in retail and mixed-use properties.
This package was prepared to provide (1) ownership information, (2)
certain operational information, and (3) debt information as of
September 30, 1998, for the Company and the Operating Partnership.
Certain statements contained in this Supplemental Package may constitute
"forward-looking statements" made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Investors are
cautioned that forward-looking statements involve risks and
uncertainties which may affect the business and prospects of the Company
and the Operating Partnership, including the risks and uncertainties
discussed in other periodic filings made by the Company and the
Operating Partnership with the Securities and Exchange Commission.
We hope you find this Supplemental Package beneficial. Any questions,
comments or suggestions should be directed to: Shelly J. Doran,
Director of Investor Relations-Simon Property Group, P.O. Box 7033,
Indianapolis, IN 46207 (317) 685-7330.
<Page 5>
SIMON PROPERTY GROUP
ECONOMIC OWNERSHIP STRUCTURE (1)(4)
SEPTEMBER 30, 1998
SIMON PROPERTY GROUP, L.P. 225,672,058 units
Partners: Units %
--------- ----- --
SD Property Group, Inc.(2)
SPG Properties, Inc. 99.99%
100 Individual Shareholders 0.01%
-----
37,873,965 100.00%
-----
SPG Properties, Inc. (2)
Simon Property Group, Inc. 99.99%
100 Individual Shareholders 0.01%
-----
75,825,562 100.00%
-----
Simon Property Group, Inc.(2)(3)(5)
Public Shareholders 97.6%
Simon Family 2.0%
DeBartolo Family 0.0%
Executive Management 0.4%
-----
47,790,550 100.00%
-----
Limited Partners:
Simon Family 34,584,455 53.9%
DeBartolo Family 22,222,599 34.6%
Executive Management 153,498 0.2%
Other Limited Partners 7,221,429 11.3%
---------- -----
64,181,981 100.0%
---------- -----
Ownership of Simon Property Group, L.P.
Simon Property Group, Inc.
Public Shareholders 69.9%
Simon Family 1.4%
DeBartolo Family 0.0%
Executive Management 0.3%
-----
71.6%
-----
Limited Partners
Simon Family 15.3%
DeBartolo Family 9.8%
Executive Management 0.1%
Other Limited Partners 3.2%
-----
28.4%
-----
100.0%
-----
Simon Property Group, Inc.(2)(3)(5)
Common Shareholders Shares %
------------------- --------- --
Public Shareholders 162,699,558 97.6%
Simon Family 3,318,421 2.0%
DeBartolo Family 31,623 0.0%
Executive Management 728,489 0.4%
---------- ------
166,778,091 100.0%
(1) Schedule excludes preferred stock; see "Preferred Stock
Outstanding."
(2) General partner of Simon Property Group, L.P.
(3) Shares of Simon Property Group, Inc. ("SPG") are paired with
beneficial interests in shares of stock of SPG Realty Consultants, Inc.
(4) Schedule excludes units not convertible into common stock.
(5) The number of outstanding shares of common stock of SPG exceeds the
number of Simon Property Group, L.P. units owned by SPG by approximately
5.29 million. This is the result of the direct ownership of Ocean
County Mall by SPG.
<Page 6>
SIMON PROPERTY GROUP
Changes in Common Stock and Unit Ownership
For the Period from December 31, 1997 through September 30, 1998
Operating
Partnership Company
Units(1) Common Shares(2)
Number Outstanding at December 31, 1997 61,850,762 109,643,001
Restricted Stock Awards
(Stock Incentive Program), Net - 498,191
Issuance of Stock and Units in Connection
with Acquisitions of Cordova Mall,
Lakeline Mall, The Westchester, and
Rolling Oaks Mall 2,336,699 519,889
Conversion of units into cash (2,580) -
Conversion of units into stock (2,900)
2,900
Shares Placed in Unit Investment Trusts - 2,957,335
Issuance of Stock in connection with
the DeBartolo Merger - 32,062
Issuance of Stock in connection with
the CPI Merger - 53,078,564
Issuance of Stock for Employee and
Director Stock Option Exercises - 46,149
Number Outstanding at September 30, 1998(3) 64,181,981 166,778,091
Total Common Shares and Units Outstanding at
September 30, 1998: 230,960,072(3)
(1) Excludes units owned by the Company (shown here as Company Common
Shares) and units not convertible into common shares.
(2) Common shares prior to the CPI acquisition reflected shares of
Simon DeBartolo Group, Inc.
(3) Excludes preferred units relating to preferred stock outstanding
(see Schedule of Preferred Stock).
<Page 7>
SIMON PROPERTY GROUP
Preferred Stock Outstanding
As of September 30, 1998
($ in 000's)
Number
of Liquidation Ticker
Issuer Description Shares Preference $ Symbol
Series A
Preferred
Simon Property 6.5% Convertible
Group, Inc. (1) 209,249 $1,000 $209,249 N/A
Series B
Preferred
Simon Property 6.5% Convertible
Group, Inc. (2) 4,844,331 $100 $484,433 SPGPrB
Series B
SPG Properties, Preferred
Inc. 8 _% Perpetual 8,000,000 $25 $200,000 SGVPrB
(3)
Series C
SPG Properties, Preferred 7.89%
Inc. Perpetual (4) 3,000,000 $50 $150,000 N/A
(1) Assumed in connection with the CPI merger. Each share is
convertible into a number of shares of common stock obtained by dividing
$1,000 by $26.319 (conversion price), which is subject to adjustment as
outlined below. The stock is not redeemable, except as needed to
maintain or bring the direct or indirect ownership of the capital stock
of the Company into conformity with the requirements of Section
856(a)(6) of the Code.
(2) Issued as part of the consideration for the CPI merger. Each share
is convertible into a number of shares of common stock of the Company
obtained by dividing $100 by $38.669 (the conversion price), which is
subject to adjustment as outlined below. The Company may redeem the
stock on or after September 24, 2003 at a price beginning at 105% of the
liquidation preference plus accrued dividends and declining to 100% of
the liquidation preference plus accrued dividends any time on or after
September 24, 2008. The shares are traded on the New York Stock
Exchange. The closing price on September 30, 1998, was $81.00 per share.
The conversion prices of the Series A and Series B Convertible
Preferred Stock are subject to adjustment by the Company in connection
with certain events including (i) any subdivision or combination of
shares of common stock of the Company or the declaration of a
distribution in the form of additional shares of common stock of the
Company, (ii) issuances of rights or warrants to the holders of common
stock of the Company, and (iii) any consolidation or merger to which
the Company is a party, any sale or conveyance to another person of all
or substantially all of the assets of the Company or any statutory
exchange of securities with another person.
(3) The Company may redeem the stock on or after September 29, 2006.
The shares are not convertible into any other securities of the Company.
The shares are traded on the New York Stock Exchange. The closing price
on September 30, 1998, was $26.375 per share.
(4) The Cumulative Step-Up Premium Rate Preferred Stock was issued at
7.89%. The shares are redeemable after September 30, 2007. Beginning
October 1, 2012, the rate increases to 9.89%.
<Page 8>
SIMON PROPERTY GROUP
Reconciliation of Income to Funds From Operations ("FFO")
As of September 30, 1998
(Amounts in thousands, except per share data)
Three Months Nine Months
Ended Ended
September 30 September 30,
1998 1997 1998 1997
Income Before Extraordinary Items $52,851 $54,286 $141,489 $145,761
Plus: Depreciation and Amortization
from Consolidated Properties 60,877 47,981 177,038 135,067
Less: Minority Interest Portion of
Depreciation and Amortization (1,780) (972) (5,374) (3,486)
Plus: Simon's Share of Depreciation,
Amortization and Extraordinary Items
from Unconsolidated Affiliates 19,646 9,995 50,754 28,005
Plus: (Gain) Loss on Sales of Assets 64 0 7,283 (20)
Less: Preferred Dividends (8,074) (9,101) (22,742) (21,914)
FFO of Simon Portfolio $123,584 $102,189 $348,448 $283,413
Percent Increase 20.9% 22.9%
FFO of Simon Portfolio $123,584 $102,189 $348,448 $283,413
Basic FFO per Paired Share:
Basic FFO Allocable to the Company $79,841 $63,173 $222,575 $174,581
Basic Weighted Average Paired Shares
Outstanding 117,150 98,786 112,957 97,766
Basic FFO per Paired Share $0.68 $0.64 $1.97 $1.79
Percent Increase 6.3% 10.1%
Diluted FFO per Paired Share:
Diluted FFO Allocable to the Company $79,920 $63,267 $223,106 $174,798
Diluted Weighted Average Number of
Equivalent Paired Shares 117,475 99,171 113,500 98,147
Diluted FFO per Paired Share $0.68 $0.64 $1.97 $1.78
Percent Increase 6.3% 10.7%
<Page 9>
SIMON PROPERTY GROUP
Selected Financial Information
As of September 30, 1998
(In thousands, except as noted)
As of or for the
Nine Months Ended
September 30,
1998 1997 % Change
---------- --------- ---------
Financial Highlights of the
Company
- ----------------------------
Total Revenue - Consolidated
Properties $932,970 $747,252 24.9%
Total EBITDA of Simon
Portfolio $907,968 $649,514 39.8%
EBITDA After Minority
Interest $702,777 $520,615 35.0%
Net Income Available to
Common Shareholders $80,381 $77,826 3.3%
Basic Net Income per Common
Share $0.71 $0.80 -11.3%
Diluted Net Income per
Common Share $0.71 $0.80 -11.3%
FFO of the Simon Portfolio $348,448 $283,413 22.9%
Basic FFO Allocable to the
Company $222,575 $174,581 27.5%
Diluted FFO Allocable to the
Company $223,106 $174,798 27.6%
Basic FFO per Common Share $1.97 $1.79 10.1%
Diluted FFO per Common Share $1.97 $1.78 10.7%
Common Stock Distributions,
per Common Share $1.5150 $1.5025 0.8%
Operational Statistics
- ----------------------------
Occupancy at End of Period:
Regional Malls (1) 87.7% 86.0% 1.7%
Community Shopping
Centers (2) 90.8% 93.1% -2.3%
<Page 22>
Average Base Rent per Square
Foot:
Regional Malls (1) $23.20 $21.82 6.3%
Community Shopping
Centers (2) $7.47 $7.78 -4.0%
Regional Malls:
Total Tenant Sales Volume,
in millions (3)(4) $6,457 $4,541 42.2%
Total Sales per Square
Foot (4) $320 $301 6.3%
Comparable Sales per Square
Foot (4) $327 $307 6.5%
Number of Properties Open at
End of Period 241 200 20.5%
Total GLA at End of Period,
in millions 164.9 127.7 29.1%
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
(3) Represents only those tenants who report sales.
(4) Based upon the standard definition of sales for regional malls
adopted by the International Council of Shopping Centers which includes
only mall and freestanding stores less than 10,000 square feet.
<Page 10>
SIMON PROPERTY GROUP
Selected Financial Information
As of September 30, 1998
(In thousands, except as noted)
September 30, September 30,
Equity Information 1998 1997
- ----------------------- ----- -----
Limited Partner Units Outstanding at
End of Period 64,182 61,009
Common Shares Outstanding at End of 166,778 103,664
Period ----------- ----------
Total Common Shares and Units 230,960 164,673
Outstanding at End of Period =========== ==========
Basic Weighted Average Paired Shares
Outstanding 112,957 97,766
Diluted Weighted Average Number of
Equivalent Paired Shares 113,500 98,147
September 30, December 31,
1998 1997
----- -----
Selected Balance Sheet Information
- ----------------------
Total Assets $13,043,273 $7,662,667
Consolidated Debt $7,745,917 $5,077,990
Simon Group's Share of Joint Venture
Debt $1,256,474 $770,776
Debt-to-Market Capitalization
- ----------------------
Common Stock Price at End of Period $29.75 $32.6875
Equity Market
Capitalization (1) $7,891,846 $5,966,702
Total Consolidated Capitalization $15,637,763 $11,044,692
Consolidated Debt-to-Market
Capitalization 49.5% 46.0%
Total Capitalization - Including
Simon Group's Share of JV Debt $16,894,237 $11,815,468
Debt-to-Market Capitalization -
Including Simon Group's Share of JV
Debt 53.3% 49.5%
(1) Market value of Common Stock, Units and both issues of Series B
Preferred Stock plus book value of Series C Preferred Stock and Series A
Convertible Preferred Stock.
<Page 11>
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data (Excluding CPI Portfolio)
As of September 30, 1998
Avg.
Annualized
Base Rent Per
Leased
Type of Total % of GLA Which Sq. Ft.
Property GLA-Sq. Ft. Owned GLA Owned GLA is Leased of Owned GLA
- -------------- ---------- ---------- --------- --------- -----------
Regional Malls
- --------------
- -Anchor 70,793,278 24,517,600 28.6% 96.7% $3.39
- -Mall Store 39,537,892 39,505,296 46.2% 87.4% $23.90
- -Freestanding 2,916,357 1,638,134 1.9% 95.5% $8.02
--------- --------- ----
Subtotal 42,454,249 41,143,430 48.1% 87.7% $23.20
Regional Mall
Total 113,247,527 65,661,030 76.7% 91.1% $15.48
Community Shopping Centers
- --------------------------
- -Anchor 12,261,026 7,912,433 9.3% 95.6% $6.04
- -Mall Store 4,640,955 4,555,197 5.3% 81.7% 10.53
- -Freestanding 979,669 454,562 .5% 98.2% 6.50
Community Ctr.
Total 17,881,650 12,922,192 15.1% 90.8% $7.47
Office Portion
Of Mixed-Use
Properties 2,257,923 2,257,923 2.6% 90.7% $19.16
Value-Oriented
Super-Regional
Malls 3,775,603 3,634,008 4.3%
Properties under
Redevelopment 1,920,070 1,108,851 1.3%
GRAND TOTAL 139,082,773 85,584,004 100.00%
Occupancy History
Community
As of Regional Malls(1) Shopping Centers(2)
----- ---------------- -----------------
9/30/98 87.7% 90.8%
9/30/97 86.0% 93.1%
12/31/97 87.3% 91.3%
12/31/96 84.7% 91.6%
12/31/95(3) 85.5% 93.6%
12/31/94(3) 85.6% 93.9%
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
(3)On a pro forma combined basis giving effect to the merger with
DeBartolo Realty Corporation ("DRC") for periods presented.
<Page 12>
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data (CPI Portfolio Only)
As of September 30, 1998
Avg.
Annualized
Base Rent Per
Leased
Type of Total % of GLA Which Sq. Ft.
Property GLA-Sq. Ft. Owned GLA Owned GLA is Leased of Owned GLA
- -------------- ---------- ---------- --------- --------- -----------
Regional Malls
- --------------
- -Anchor 16,039,059 2,874,298 23.1% 94.6% $6.41
- -Mall Store 8,887,290 8,871,990 71.5% 91.0% $35.95
- -Freestanding 315,938 64,884 0.5% 21.9% $19.75
------- ------ ----
Subtotal 9,203,228 8,936,874 72.0% 90.5% $35.92
Regional Mall
Total 25,242,287 11,811,172 95.1% 91.5% $30.34
Community Shopping Centers
- --------------------------
- -Anchor 20,929 20,929 0.2% 100.0% $8.35
- -Mall Store 102,196 102,196 0.8% 96.4% 9.91
- -Freestanding 12,158 00.0% N/A N/A
Community Ctr.
Total 135,283 123,125 1.0% 97.0% $9.64
Office Portion
Of Mixed-Use
Properties 484,905 484,905 3.9% 84.3% $23.42
GRAND TOTAL(4) 25,862,475 12,419,202 100.00%
Occupancy History
Community
As of Regional Malls(1) Shopping Centers(2)
----- ---------------- -----------------
9/30/98 90.5% 97.0%
12/31/97 94.0% (3)
12/31/96 90.4% (3)
12/31/95 93.1% (3)
12/31/94 92.4% (3)
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
(3) Historical data not available and not material.
(4) Excludes Palm Beach Mall, 50% owned by SPG prior to the CPI merger.
<Page 13>
SIMON PROPERTY GROUP
Rent Information (Excluding CPI Portfolio)
As of September 30, 1998
Average Base Rent
- ------------
Freestanding Mall &
Stores at % Community %
As of Regional Malls Change Shopping Centers Change
- ----- -------------- ------ ---------------- ------
9/30/98 $23.20 6.3% $7.47 -4.0%
9/30/97 21.82 - 7.78 -
12/31/97 $23.65 14.4% $7.44 -2.7%
12/31/96 20.68 7.8 7.65 4.9
12/31/95(1) 19.18 4.4 7.29 2.4
12/31/94(1) 18.37 3.8 7.12 N/A
Rental Rates
- --------
Base Rent (2)
-----------
Store Store
Openings Closings Amount of Change
During During -----------------
Year Period Period Dollar Percentage
- ---- ------ ------ ------ ----------
Regional Malls:
- ---------------
1998 (YTD) $24.59 $21.43 $3.16 14.7%
1997 29.66 21.26 8.40(3) 39.5(3)
1996 23.59 18.73 4.86 25.9
Community Shopping Centers:
- ---------------------------
1998 (YTD) $10.64 $10.67 $(0.03) (0.3)%
1997 8.63 9.44 ($0.81) (8.6)%
1996 8.18 6.16 2.02 32.8
(1)On a pro forma combined basis giving effect to the merger with DRC
for periods presented.
(2)Represents the average base rent in effect during the period for
those tenants who signed leases as compared to the average base rent
in effect during the period for those tenants whose leases
terminated or expired.
(3)Including the acquisitions of Dadeland Mall, The Fashion Mall at
Keystone at the Crossing, the RPT properties and the opening of The
Source. Excluding these events, the spread was $6.57, or a 30.9%
increase.
<Page 14>
SIMON PROPERTY GROUP
Lease Expirations(1) - (Including CPI Portfolio)
As of September 30, 1998
Number Avg. Base
Of Rent per
Leases Square Square Foot
Year Expiring Feet at 9/30/98
---- -------- ------- ----------
Regional Malls - Mall
& Freestanding Stores
- ---------------------
1998 (10/1 233 417,382 27.27
- 12/31)
1999 1,632 3,450,463 24.18
2000 1,654 3,239,965 25.83
2001 1,413 3,300,835 24.44
2002 1,396 3,201,775 24.74
2003 1,530 3,763,814 26.13
2004 1,289 3,618,287 26.58
2005 1,222 3,875,847 25.92
2006 1,319 3,816,328 27.40
2007 1,155 3,369,801 29.78
2008 951 3,347,216 28.54
----- ----------
TOTALS 13,794 35,401,713 $26.40
Regional
Malls -
Anchor
Tenants
- --------
1998 (10/1 -
12/31) - - -
1999 14 1,706,633 2.37
2000 14 2,031,903 1.88
2001 13 1,708,149 2.25
2002 11 1,222,162 1.70
2003 15 1,816,447 2.31
2004 19 1,729,095 3.58
2005 13 1,425,673 3.03
2006 16 1,944,240 3.30
2007 7 636,374 2.79
2008 11 1,209,859 4.40
----- ----------
TOTALS 133 15,430,535 $2.72
Community Centers -
Mall Stores &
Freestanding Stores
- ------------------
1998 (10/1- 24 50,428 11.13
12/31)
1999 158 469,609 11.31
2000 274 713,836 10.80
2001 185 549,624 11.46
2002 122 440,502 11.08
2003 118 537,465 10.67
2004 44 274,326 8.29
2005 31 233,611 9.39
2006 19 248,593 7.06
2007 11 114,974 8.71
2008 15 127,934 9.73
----- ---------
TOTALS 1001 3,760,902 $10.35
(Page 15)
Community
Centers -
Anchor
Tenants
- ----------
1998 (10/1-
12/31) - - -
1999 7 346,047 2.89
2000 10 339,367 5.26
2001 13 537,403 4.13
2002 9 365,636 5.57
2003 10 299,248 6.83
2004 9 232,700 6.64
2005 11 630,445 5.61
2006 10 660,361 5.46
2007 4 746,559 6.13
2008 9 363,603 6.79
----- ----------
TOTALS 102 4,521,369 $5.50
(1) Does not consider the impact of options that may be contained in
leases.
(Page 16)
SIMON PROPERTY GROUP
SPG's Share of Total Debt Amortization and Maturities by Year
As of September 30, 1998
(In thousands)
SPG's Share SPG's Share
of of SPG's Share of SPG's Share
Secured Unsecured Unconsolidated of
Consolidated Consolidated Joint Venture Total
Year Debt Debt Secured Debt Debt
1998 0 172,949 0 3,471 176,420
1999 1 201,066 513,000 100,881 814,947
2000 2 264,758 1,397,000 148,378 1,810,136
2001 3 280,517 0 37,470 317,987
2002 4 580,391 250,000 97,408 927,799
2003 5 78,531 575,000 190,363 843,895
2004 6 492,897 400,000 40,569 933,467
2005 7 43,655 660,000 92,737 796,392
2006 8 108,847 250,000 214,811 573,658
2007 9 131,066 180,000 95,308 406,374
2008 10 2,323 0 178,431 180,754
Thereafter 145,202 875,000 56,646 1,076,848
----------- ----------- -------------- ----------
$2,502,203 $5,100,000 $1,256,474 $8,858,677
========== ========== ============== ===========
Premiums and
Discounts on 17,254
Indebtedness,
Net
SPG's Share
of Total
Indebtedness $8,875,931
<Page 17>
SIMON PROPERTY GROUP
Summary of Indebtedness
As of September 30, 1998
(In thousands)
Weighted
SPG's Avg. Weighted Avg.
Total Share of Interest Years
Indebtedness Indebtedness Rate to Maturity
Consolidated
Indebtedness
Mortgage Debt
Fixed Rate 2,156,729 2,074,231 7.71% 5.8
Debt Swapped to Maturity 50,000 50,000 7.74% 2.9
Capped to Maturity,
Currently "In the Money" 289,379 253,349 6.26% 2.5
Other Hedged Debt 50,000 50,000 5.93% 1.3
Floating Rate Debt 82,875 74,623 6.82% 2.5
----------- ---------- -------- -----------
Total Mortgage Debt 2,628,983 2,502,203 7.50% 5.2
Unsecured Debt
Fixed Rate 3,190,000 3,190,000 7.21% 9.7
Capped to Maturity,
Currently "In the Money" 63,000 63,000 6.14% 0.3
Floating Rate Debt 70,000 70,000 6.03% 1.3
----------- ----------- -------- -----------
Subtotal 3,323,000 3,323,000 7.17% 9.4
Merger Corporate Bridge
Loan 900,000 900,000 6.24% 1.1
Merger Corporate Bridge
Loan (Swapped) 500,000 500,000 5.71% 2.0
Revolving Corporate
Credit Facility 237,000 237,000 6.34% 1.0
Revolving Corporate
Credit Facility (Hedged) 140,000 140,000 6.34% 1.0
---------- ---------- -------- -----------
Total Unsecured Debt 5,100,000 5,100,000 6.80% 6.6
Adjustment to Fair
Market Value - Fixed
Rate 15,556 15,875 N/A N/A
Adjustment to Fair
Market Value - Variable
Rate 1,378 1,379 N/A N/A
---------- --------- ------- -----------
Consolidated Mortgage
and Other indebtedness 7,745,917 7,619,457 7.01% 6.2
=========== ========== ======== ===========
Joint Venture Mortgage
Indebtedness
Fixed Rate 1,950,117 934,762 7.42% 7.0
Debt Swapped to Maturity 120,000 30,000 7.38% 3.6
Other Hedged Debt 385,001 138,144 6.08% 4.3
Floating Rate Debt 363,977 153,567 6.23% 1.9
----------- ---------- ------- -----------
Joint Venture Mortgages
and Other Indebtedness 2,819,095 1,256,474 7.13% 6.0
=========== ========== ======== ============
SPG's Share of Total
Indebtedness 8,875,931 7.03% 6.1
<Page 18>
<TABLE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 1998
(In thousands)
SPG's Weighted Av
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
Consolidated Indebtedness
Fixed Rate Mortgage Debt:
<S> <C> <C> <C> <C> <C>
Great Lakes Mall - 2 3/1/99 7.07% 8,520 8,520
Ingram Park Mall - 2 11/1/99 9.63% 7,000 7,000
Ingram Park Mall - 1 12/1/99 8.10% 48,116 48,116
Barton Creek Square 12/30/99 8.10% 62,271 62,271
La Plaza Mall 12/30/99 8.25% 49,621 49,621
Subtotal 1999 175,528 175,528 8.15%
South Shore (3) 4/1/00 9.75% 96 96
Windsor Park Mall - 1 6/1/00 8.00% 5,817 5,817
Trolley Square - 1 7/23/00 5.81% 19,000 17,100
North East Mall 9/1/00 10.00% 22,003 22,003
Bloomingdale Court 12/1/00 8.75% 29,009 29,009
Forest Plaza 12/1/00 8.75% 16,904 16,904
Fox River Plaza 12/1/00 8.75% 12,654 12,654
Lake View Plaza 12/1/00 8.75% 22,169 22,169
Lincoln Crossing 12/1/00 8.75% 997 997
Matteson Plaza 12/1/00 8.75% 11,159 11,159
Regency Plaza 12/1/00 8.75% 1,878 1,878
St. Charles Towne Plaza 12/1/00 8.75% 30,742 30,742
West Ridge Plaza 12/1/00 8.75% 4,612 4,612
White Oaks Plaza 12/1/00 8.75% 12,345 12,345
----------- ----------
Subtotal 2000 189,385 187,485 8.61%
Biltmore Square 1/1/01 7.15% 26,900 26,900
Chesapeake Square 1/1/01 7.28% 48,505 48,505
Port Charlotte Town Center 1/1/01 7.28% 52,883 52,883
J.C. Penney/Net Leased (North 991
Folk) 11/30/01 8.50% 991
Great Lakes Mall - 1 3/1/01 6.74% 52,831 52,831
----------- ----------
Subtotal 2001 182,110 182,110 7.11%
Lima Mall 3/1/02 7.12% 18,970 18,970
Columbia Center 3/15/02 7.62% 42,465 42,465
Northgate Shopping Center 3/15/02 7.62% 79,295 79,295
Tacoma Mall 3/15/02 7.62% 92,778 92,778
J.C. Penney/Net Leased (3) 5/31/02 6.80% 900 900
River Oaks Center 6/1/02 8.67% 32,500 32,500
North Riverside Park Plaza - 1 9/1/02 9.38% 3,953 3,953
North Riverside Park Plaza - 2 9/1/02 10.00% 3,617 3,617
Principal Mutual Mortgages -
Pool 1 (1) 9/15/02 6.81% 103,698 103,698
Principal Mutual Mortgages -
Pool 2 (2) 9/15/02 6.77% 137,823 137,823
Northlake Mall (3) 12/1/02 8.00% 1,097 1,097
Palm Beach Mall (4) 12/15/02 8.21% 50,700 50,700
----------- ------------
Subtotal 2002 567,796 567,796 7.39%
Battlefield Mall 6/1/03 7.50% 48,939 48,939
Miami International Mall 12/21/03 6.91% 46,618 27,971
----------- ----------
Subtotal 2003 95,557 76,910 7.29%
<Page 19>
Forum Phase I - Class A-1 5/15/04 7.13% 46,997 28,198
Forum Phase II - Class A-1 5/15/04 7.13% 43,004 23,652
Cielo Vista Mall - 2 7/1/04 8.13% 2,323 2,323
College Mall 7/1/04 7.00% 42,508 42,508
Greenwood Park Mall 7/1/04 7.00% 35,602 35,602
Tippecanoe Mall 7/1/04 8.45% 46,435 46,435
Towne East Square 7/1/04 7.00% 56,201 56,201
CMBS Loan - Fixed Component 12/19/04 7.27% 175,000 175,000
----------- ---------
Subtotal 2004 448,070 409,919 7.30%
Melbourne Square 2/1/05 7.42% 39,516 39,516
----------- -----------
Subtotal 2005 39,516 39,516 7.42%
Treasure Coast Square 1/1/06 7.42% 53,407 53,407
Gulf View Square 10/1/06 8.25% 37,777 37,777
Paddock Mall 10/1/06 8.25% 30,044 30,044
----------- -----------
Subtotal 2006 121,228 121,228 7.88%
Cielo Vista Mall - 1 5/1/07 9.38% 55,163 55,163
McCain Mall 5/1/07 9.38% 25,844 25,844
Valle Vista Mall 5/1/07 9.38% 34,229 34,229
University Park Mall 10/1/07 7.43% 59,500 35,700
---------- ---------
Subtotal 2007 174,736 150,936 8.91%
Randall Park Mall - 2 6/18/08 7.33% 35,000 35,000
----------- -----------
Subtotal 2008 35,000 35,000 7.33%
Windsor Park Mall - 2 5/1/12 8.00% 8,863 8,863
----------- -----------
Subtotal 2012 8,863 8,863 8.00%
Chesapeake Center 5/15/15 8.44% 6,563 6,563
Grove at Lakeland Square, The 5/15/15 8.44% 3,750 3,750
Terrace at Florida Mall, The 5/15/15 8.44% 4,688 4,688
----------- ---------
Subtotal 2015 15,001 15,001 8.44%
Sunland Park Mall 1/1/26 8.63% 39,596 39,596
----------- ------------
Subtotal 2026 39,596 39,596 8.63%
Keystone at the Crossing 7/1/27 7.85% 64,343 64,343
----------- ------------
Subtotal 2027 64,343 64,343 7.85%
Total Consolidated Fixed Rate
Mortgage Debt 2,156,729 2,074,231 7.71%
=========== =========== ============
<Page 20>
Variable Rate Mortgage Debt:
Eastgate Consumer Mall 12/31/98 6.00% 22,929 22,929
Riverway 12/31/98 6.38% 131,451 131,451
---------- ----------
Subtotal 1998 154,380 154,380 6.32%
White Oaks Mall 3/1/99 6.88% 16,500 9,062
---------- -----------
Subtotal 1999 16,500 9,062 6.88%
Jefferson Valley Mall 1/12/00 5.93% 50,000 50,000
Trolley Square 7/23/00 7.22% 8,141 7,327
---------- ---------
Subtotal 2000 58,141 57,327 6.05%
Crystal River 1/1/01 7.38% 16,000 16,000
Richmond Towne Square 7/15/01 6.38% 8,488 8,488
Mission Viejo Mall 9/14/01 6.43% 17,143 17,143
Orland Square 9/1/01 7.74% 50,000 50,000
---------- -----------
Subtotal 2001 91,631 91,631 7.30%
Highland Lakes Center 3/1/02 6.88% 14,377 14,377
Mainland Crossing 3/31/02 6.88% 2,226 2,226
---------- ----------
Subtotal 2002 16,603 16,603 6.88%
Forum Phase I - Class A-2 5/15/04 6.19% 44,385 26,631
Forum Phase II - Class A-2 5/15/04 6.19% 40,614 22,338
CMBS Loan - Floating Component (5) 12/19/04 6.16% 50,000 50,000
---------- -----------
Subtotal 2004 134,999 98,969 6.17%
Total Variable Rate Mortgage
Debt 472,254 427,971 6.49%
========== ========== ===========
Total Consolidated Mortgage Debt 2,627,992 2,502,203 7.50%
<Page 21>
Fixed Rate Unsecured Debt:
Unsecured Notes - CPI 1 (3) 3/15/02 9.00% 250,000 250,000
Subtotal 2002 250,000 250,000 9.00%
SPG, LP (Bonds) 6/15/03 6.63% 375,000 375,000
Unsecured Notes - CPI 2 (3) 4/1/03 7.05% 100,000 100,000
SPG, LP (PATS) 11/15/03 6.75% 100,000 100,000
----------- ----------
Subtotal 2003 575,000 575,000 6.72%
SCA (Bonds) 1/15/04 6.75% 150,000 150,000
Unsecured Notes - CPI 3 (3) 8/15/04 7.75% 150,000 150,000
SPG, LP (Bonds) 7/15/04 6.75% 100,000 100,000
---------- ----------
Subtotal 2004 400,000 400,000 7.13%
SCA (Bonds) 5/15/05 7.63% 110,000 110,000
SPG, LP (Bonds) 6/15/05 6.75% 300,000 300,000
SPG, LP (Bonds) 10/27/05 6.88% 150,000 150,000
SPG, LP (MTN) 6/24/05 7.13% 100,000 100,000
----------- ----------
Subtotal 2005 660,000 660,000 6.98%
SPG, LP (Bonds) 11/15/06 6.88% 250,000 250,000
---------- ----------
Subtotal 2006 250,000 250,000 6.88%
SPG, LP (MTN) 9/20/07 7.13% 180,000 180,000
----------- ----------
Subtotal 2007 180,000 180,000 7.13%
SPG, LP (Bonds) 7/15/09 7.00% 150,000 150,000
----------- ----------
Subtotal 2009 150,000 150,000 7.00%
Unsecured Notes - CPI 4 (3) 9/15/13 7.18% 75,000 75,000
----------- ----------
Subtotal 2013 75,000 75,000 7.18%
Unsecured Notes - CPI 5 (3) 3/15/16 7.88% 250,000 250,000
---------- -----------
Subtotal 2016 250,000 250,000 7.88%
SPG, LP (Bonds) 6/15/18 7.38% 200,000 200,000
---------- ---------
Subtotal 2018 200,000 200,000 7.38%
SPG, LP (MOPPRS) 6/15/28 7.00% 200,000 200,000
---------- -----------
Subtotal 2028 200,000 200,000 7.00%
Total Unsecured Fixed Rate Debt 9.7 years 3,190,000 3,190,000 7.21%
========== ===========
<Page 22>
Variable Rate Unsecured Debt:
Unsecured Merger Bridge Loan - (6)
1 Chase (1.4B) 6/24/99 6.24% 450,000 450,000
Subtotal 1999 450,000 450,000 6.24%
SPG, L.P. Unsecured Loan (7) 1/31/00 6.03% 70,000 70,000
SPG, L.P. Unsecured Loan (8) 1/31/00 6.14% 63,000 63,000
Corporate Revolving Credit
Facility (8) 9/27/00 6.34% 377,000 377,000
Unsecured Merger Bridge Loan -
2 Chase (1.4B) (6) 3/24/00 6.24% 450,000 450,000
Unsecured Merger Bridge Loan -
3 Chase (1.4B) (6) 9/24/00 5.71% 500,000 500,000
--------- ------------
Subtotal 2000 1,460,000 1,460,000 6.07%
Total Unsecured Variable Rate 1,910,000 1,910,000 6.11%
Debt
========== ==========
Total Unsecured Debt 5,100,000 5,100,000 6.80%
Net Discount on Fixed-Rate
Indebtedness 15,556 15,875 N/A
Net Premium on Variable-Rate
Indebtedness 1,378 1,379 N/A
Total Consolidated Debt 7,744,926 7,619,457 7.01%
<Page 23>
Joint Venture Indebtedness
Fixed Rate Mortgage Debt:
Florida Mall, The - 2 2/28/00 6.65% 90,000 90,000
Northfield Square 4/1/00 9.52% 24,126 24,126
Coral Square 12/1/00 7.40% 53,300 26,650
--------- -----------
Subtotal 2000 167,426 140,776 7.28%
Highland Mall - 2 (3) 10/1/01 8.50% 306 153
Highland Mall - 3 (3) 11/1/01 9.50% 2,896 1,448
--------- ----------
Subtotal 2001 3,202 1,601 9.40%
Crystal Mall (3) 2/1/03 8.66% 50,553 25,276
Avenues, The 5/15/03 8.36% 57,893 14,473
Century III Mall -1 7/1/03 6.78% 66,000 33,000
Lakeland Square 12/22/03 7.26% 52,560 26,280
----------- ----------
Subtotal 2003 227,006 99,030 7.62%
Indian River Commons 11/1/04 7.58% 8,399 4,200
Indian River Mall 11/1/04 7.58% 46,602 23,301
---------- ---------
Subtotal 2004 55,001 27,501 7.58%
Westchester, The 9/1/05 8.74% 152,396 76,198
Cobblestone Court 11/30/05 7.22% 6,180 2,163
Crystal Court 11/30/05 7.22% 3,570 1,250
Fairfax Court 11/30/05 7.22% 10,320 2,709
Gaitway Plaza 11/30/05 7.22% 7,350 1,715
Plaza at Buckland Hills, The 11/30/05 7.22% 17,990 6,161
Ridgewood Court 11/30/05 7.22% 7,980 2,793
Royal Eagle Plaza 11/30/05 7.22% 7,301 2,555
Village Park Plaza 11/30/05 7.22% 9,270 3,244
West Town Corners 11/30/05 7.22% 10,330 2,411
Westland Park Plaza 11/30/05 7.22% 4,950 1,155
Willow Knolls Court 11/30/05 7.22% 6,490 2,272
Yards Plaza, The 11/30/05 7.22% 8,270 2,895
----------- -----------
Subtotal 2005 252,396 107,521 8.30%
Seminole Towne Center 1/1/06 6.88% 70,500 31,725
IBM CMBS Loan - Fixed Component (9) 5/1/06 7.40% 300,000 150,000
Great Northeast Plaza 6/1/06 9.04% 17,708 8,854
Smith Haven Mall 6/1/06 7.86% 115,000 28,750
----------- -----------
Subtotal 2006 503,208 219,329 7.45%
<Page 24>
Town Center at Cobb (3) 4/1/07 7.54% 50,921 25,460
Gwinnett Place (3) 4/1/07 7.54% 39,967 19,983
Lakeline Mall 5/1/07 7.65% 73,106 58,485
----------- ----------
Subtotal 2007 163,993 103,929 7.60%
Metrocenter (3) 2/28/08 8.45% 31,278 15,639
Aventura Mall - A 4/6/08 6.55% 141,000 47,000
Aventura Mall - B 4/6/08 6.60% 25,400 8,467
Aventura Mall - C 4/6/08 6.89% 33,600 11,200
West Town Mall 5/1/08 6.90% 76,000 38,000
Grapevine Mills - 2 10/1/08 6.47% 155,000 58,125
----------- ----------
Subtotal 2008 462,278 178,431 6.79%
Highland Mall - 1 (3) 12/1/09 9.75% 7,978 3,989
Ontario Mills - 4 (10) 12/28/09 0.00% 4,628 1,157
---------- -----------
Subtotal 2009 12,606 5,146 7.56%
Mall of Georgia (3) 7/1/10 7.09% 103,000 51,500
---------- -----------
Subtotal 2010 103,000 51,500 7.09%
Total Joint Venture Fixed Rate
Mortgage Debt 1,950,117 934,762 7.42%
========== ========== ===========
Variable Rate Mortgage Debt:
Tower Shops, The (7) 3/13/99 6.58% 14,222 7,111
Dadeland Mall 12/10/99 6.08% 140,000 70,000
----------- ----------
Subtotal 1999 154,222 77,111 6.12%
Shops at Sunset Place, The (7) 6/30/00 6.63% 64,541 24,203
---------- ------------
Subtotal 2000 64,541 24,203 6.63%
Source, The (8) 7/16/01 6.58% 116,214 29,054
---------- ----------
Subtotal 2001 116,214 29,054 6.58%
Arizona Mills
Lakeline Plaza - 1 2/1/02 6.68% 140,001 36,842
Ontario Mills - 1 6/6/02 5.75% 29,000 23,200
Ontario Mills - 2 (7) 5/7/02 7.37% 50,000 12,500
Ontario Mills - 3 (7) 5/7/02 7.21% 20,000 5,000
Subtotal 2002 (7) 5/7/02 7.46% 50,000 12,500
----------- -----------
289,001 90,042 6.67%
<Page 25>
IBM CMBS Loan - Floating
Component (8) 5/1/03 5.87% 185,000 92,500
---------- ------------
Subtotal 2003 185,000 92,500 5.87%
Circle Centre Mall 1/31/04 5.82% 60,000 8,802
---------- ---------
Subtotal 2004 60,000 8,802 5.82%
Total Joint Venture Variable
Rate Debt 868,978 321,712 6.27%
========== ========== ============
Total Joint Venture Debt 2,819,095 1,256,474 7.13%
SDG's Share of Total Indebtedness 10,565,021 8,875,931 7.03%
</TABLE>
(1) This Principal Mutual Pool 1 loan is secured by cross-collateralized
mortgages encumbering four of the Properties (Anderson, Forest Village
Park, Longview and South Park). A weighted average rate is used for
these Pool 1 Properties.
(2) This Principal Mutual Pool 2 loan is secured by cross-collateralized
mortgages encumbering seven of the Properties (Eastland, Forest Mall,
Golden Ring, Hutchinson, Markland, Midland, and North Towne). A weighted
average rate is used for these Pool 2 Properties .
(3) Represents debt assumed in connection with the CPI merger.
(4) The Operating Partnership acquired the remaining 50% ownership
percentage as part of the CPI merger.
(5) An interest rate protection agreement, which effectively fixes the
interest rate at an all-in-one rate of 6.16%, was obtained on July 16,
1998.
(6) This Facility consist of (i) a $450 million nine-month term loan,
(ii) a $450 million 18-month term loan, and (iii) a $500 million 24-
month term loan. An interest rate protection agreement relating to $500
million of the $1.4 billion was obtained on September 24, 1998. Under
this agreement LIBOR is swapped at a weighted average rate of 5.057%.
(7) Two one-year options exist to extend maturity.
(8) Includes applicable extensions available at the Operating
Partnership's option.
(9) Represents debt assumed in connection with the acquisition of certain
Properties on February 27, 1998 by a joint venture in which the Simon Group
participated. This is $485 million of Commercial Mortgage Notes secured by
cross-collateralized mortgages encumbering thirteen of the Properties.
The Operating Partnership's share is $242 million. A weighted average
rate is used.
(10) Notes for purchase of land from Ontario Redevelopment Agency at 6%
commencing January 2000.
<Page 26>
<TABLE>
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of September 30, 1998
(In thousands)
Principal SPG SPG's Interest
Property Maturity Balance Ownership Share of Rate Terms of Terms of
Name Date 09/30/98 % Loan 09/30/98 Variable Interest Rate Protection
Balance Rate Agreement
Consolidated
Properties:
Secured Debt:
<S> <C> <C> <C> <C> <C> <C> <C>
LIBOR + LIBOR Capped at 5.00%
Eastgate Consumer Mall 12/31/98 22,929 100.00% 22,929 6.000% 1.000% through maturity
LIBOR + LIBOR Capped at 5.00%
Riverway 12/31/98 131,451 100.00% 131,451 6.375% 1.375% through maturity
LIBOR + 90-day LIBOR set on August
White Oaks Mall 3/1/99 16,500 54.92% 9,062 6.875% 1.250% 31, 1998
LIBOR + LIBOR Capped at 8.70%
Jefferson Valley Mall 1/12/00 50,000 100.00% 50,000 5.925% 0.550% through maturity
LIBOR +
Trolley Square 7/23/00 8,141 90.00% 7,327 7.219% 1.500%
LIBOR +
Crystal River 1/1/01 16,000 100.00% 16,000 7.375% 2.000%
LIBOR +
Richmond Towne Square 7/15/01 8,488 100.00% 8,488 6.375% 1.000%
LIBOR + LIBOR Swapped at 7.24%
Orland Square 9/1/01 50,000 100.00% 50,000 7.742% 0.500% through maturity
LIBOR +
Mission Viejo Mall 9/14/01 17,143 100.00% 17,143 6.425% 1.050%
LIBOR +
Highland Lakes Center 3/1/02 14,377 100.00% 14,377 6.875% 1.500%
LIBOR +
Mainland Crossing 3/31/02 2,226 100.00% 2,226 6.875% 1.500%
Through an interest rate
Forum Phase I - Class A- LIBOR + protection agreement,
2 5/15/04 44,385 60.00% 26,631 6.190% 0.300% effectively fixed
at an all-in-one rate of
6.19%
Through an interest rate
Forum Phase II - Class LIBOR + protection agreement,
A-2 5/15/04 40,614 55.00% 22,338 6.190% 0.300% effectively fixed
at an all-in-one rate of
6.19%
LIBOR Capped at 5.79%
CMBS Loan - Floating LIBOR + through maturity. See
Component 12/19/04 50,000 100.00% 50,000 6.155% 0.365% Footnote (1)
Total Consolidated
Secured Debt 472,254 427,971
========= ========
Unsecured Debt:
SDG, L.P. Unsecured LIBOR +
Loan 1/31/00 70,000 100.00% 70,000 6.025% 0.650%
A two year interest rate
protection agreement, which
SDG, L.P. Unsecured LIBOR + effectively fixes the
Loan 1/31/99 63,000 100.00% 63,000 6.140% 0.650% interest
rate at an all-in-one rate of
6.14% was obtained on January
15, 1998.
Unsecured Bridge Loan - LIBOR +
1 Chase (1.4B) 6/24/99 450,000 100.00% 450,000 6.244% 0.650%
Unsecured Bridge Loan - LIBOR +
2 Chase (1.4B) 3/24/00 450,000 100.00% 450,000 6.244% 0.650%
Unsecured Bridge Loan - LIBOR + LIBOR Swapped at a weighted
3 Chase (1.4B) 9/24/00 500,000 100.00% 500,000 5.707% 0.650% average rate of 5.06%.
Unsecured Revolving
Credit Facility - UBS LIBOR +
(1.25B) 9/27/00 377,000 100.00% 377,000 6.340% 0.650% See Footnote (2)
Total Consolidated
Unsecured Debt 1,910,000 1,910,000
======== =========
Net Premium on Variable-
Rate Indebtedness
1,378 1,379
Consolidated Variable
Rate Debt 2,383,632 2,339,350
========= ========
<Page 27>
Joint Venture
Properties:
LIBOR + Two one-year extensions exist
Tower Shops, The 3/13/99 14,222 50.00% 7,111 6.575% 1.200% to extend maturity.
LIBOR +
Dadeland Mall 12/10/99 140,000 50.00% 70,000 6.075% 0.700%
Shops at Sunset Place, LIBOR +
The 6/30/00 64,541 37.50% 24,203 6.625% 1.250% See Footnote (3)
LIBOR +
Source, The 7/16/01 116,214 25.00% 29,054 6.575% 1.200% See Footnote (4)
LIBOR + LIBOR Capped at 9.50%
Arizona Mills 2/1/02 140,001 26.32% 36,842 6.675% 1.300% through maturity
LIBOR Swapped at 6.37%
LIBOR + through maturity. See
Ontario Mills - 1 5/7/02 50,000 25.00% 12,500 7.370% 1.000% Footnote (5).
LIBOR + LIBOR Swapped at 6.21%
Ontario Mills - 2 5/7/02 20,000 25.00% 5,000 7.210% 1.000% through maturity
LIBOR + LIBOR Swapped at 6.21%
Ontario Mills - 3 5/7/02 50,000 25.00% 12,500 7.460% 1.250% through maturity
LIBOR +
Lakeline Plaza - 1 6/6/02 29,000 80.00% 23,200 5.750% 0.375%
See The Operating Partnership
IBM CMBS Loan - Footnote took assignment of an
Floating Component 5/1/03 185,000 50.00% 92,500 5.873% (6) interest rate protection
agreement (LIBOR cap of
11.67%) relating to the
Macerich debt assumed.
LIBOR + LIBOR Capped at 8.81%
Circle Centre Mall 1/31/04 60,000 14.67% 8,802 5.815% 0.440% through maturity
Total Joint Venture
Properties 868,978 321,712
========= ========
Total Variable Mortgage
and Other Indebtedness 3,252,610 2,661,062
</TABLE>
Footnotes:
(1) An interest rate protection agreement, which effectively fixes the
interest rate at an all-in-one rate of 6.16%, was obtained on July 20,
1998. The existing 16.77% LIBOR cap was transferred to the Unsecured
Revolving Credit Facility.
(2) A 11.53% LIBOR cap on $90M and a 16.77% LIBOR cap on $50M has been
transferred from Forum and CMBS Loan - Floating Component.
(3) Rate can be reduced based upon project performance.
(4) The Operating Partnership closed on $124 million of permanent
financing on November 16, 1998. The new non-recourse loan has a 10-year
term with a fixed rate of 6.65%.
(5) The Operating Partnership closed on $145 million of permanent
financing on October 26, 1998. The new non-recourse loan has a 10 year
maturity and bears interest at 6.75%.
(6) Represents debt assumed in the acquisition of certain Properties on
February 27, 1998 by a joint venture in which the Simon Group
participated. A weighted average rate is used..
The following table summarizes variable rate debt:
Total SDG Share
Swapped debt 670,000 580,000
Capped debt "in the money" 352,379 316,349
Other hedged variable rate
debt 575,001 328,144
Unhedged variable rate
debt 1,655,230 1,436,569
3,252,610 2,661,062
=========== ============
<Page 28>
SIMON PROPERTY GROUP
New Development Activities
As of September 30, 1998
Non-Anchor
Simon Projected Sq.
Group's Actual/ Cost Footage
Mall/ Ownership Projected (in Leased/ GLA
Location Percentage Opening millions) Committed (sq. ft.)
(1)
--------- --------- -------- --------- -------- ---------
Projects Under
Construction
- ------------
Shops at Sunset 38% 12/98 $150 95% 510,000
Place
South Miami, FL
Anchors/Major AMC 24 Theatre,
Tenants: NIKETOWN, Barnes & Noble, IMAX Theatre,
Virgin Megastore, Z Gallerie,
GameWorks, FAO Schwarz
The Mall of Georgia 50% 8/99 $246 (2) 1,500,000
Buford, Georgia
(Atlanta)
Anchors/Major
Tenants: Nordstrom (opening 3/00)
Dillard's, Lord & Taylor,
JCPenney, Galyan's, Bed Bath &
Beyond, Haverty's,
Barnes & Noble
Concord Mills 50% 9/99 $216 (2) 1,400,000
Concord, NC
(Charlotte)
Anchors/Major
Tenants: Books-A-Million,
Bed Bath & Beyond, TJMaxx,
Burlington Coat Factory,
Bass Pro Outdoor World,
AMC Theatres, Host Marriott
Services (food court)
The Shops at
Northeast Plaza 100% 11/99 $42 (2) 341,000
Hurst, TX
Anchors/Major
Tenants: Micheal's, OfficeMax, PetsMart,
Cost Plus, TJMaxx, Bed Bath &
Beyond, Just for Feet
<Page 30>
The Mall of Georgia
Crossing 50% 11/99 $38 (2) 444,000
Buford, GA
(Atlanta)
Anchors/Major
Tenants: Target, Nordstrom Rack,
Best Buy, Upton's, Staples
Projects Under
Development
- -----------
Waterford Lakes
Town Center 11/99 and
Orlando, FL 100% 11/00 $84 (2) 900,000
(1) Community Center leased/committed percentage includes owned anchor
GLA.
(2) Leasing still in preliminary stage.
<Page 29>
SIMON PROPERTY GROUP
Significant Renovation/ Expansion Activities
As of September 30, 1998
Simon
Group's Projected Total New or
Ownership Actual/ Cost Existing Incremental
Mall/ Percent- Anticipated (in GLA GLA
Location age Completion millions)(sq. ft.) (sq. ft.)
- --------- ---------- ------- --------- -------- ----------
Projects To Be
Completed in 1998
-----------------
Castleton Square 100% 11/98 $33 1,296,000 93,000
Indianapolis, IN
(Renovation/
Expansion)
Scope of
Construction: Remodel with new court;
L.S. Ayres expansion
with new parking deck;
Lazarus remodel, new
Galyan's and Von Maur
Independence
Center 100% 11/98 $14 1,018,000 N/A
Independence, MO
(Renovation/
Expansion)
Scope of
Construction: Renovation and Sears
expansion
Irving Mall 100% 12/98 $13 1,039,000 13,000
Irving, TX
(Expansion)
Scope of
Construction: Addition of Barnes & Noble,
Old Navy and General Cinema
Prien Lake Mall 100% 10/98 $38 455,000 351,000
Lake Charles, LA
(Renovation/
Expansion)
Scope of
Construction: Addition of Dillard's
and Sears; renovation
and small shop expansion
with food court
<Page 32>
Richmond Town 11/98 and
Square 100% 8/99 $57 873,000 10,000
Cleveland, OH
(Renovation/
Expansion)
Scope of
Construction: Addition of Kaufmann's,
JCPenney remodel and
renovation (opening 11/98);
addition of Sony Cinema,
Sears remodel and new
food court (opening 8/99)
Walt Whitman Mall 11/98 and
Huntington, NY 100% 3/99 $80 776,000 190,000
(Renovation/
Expansion)
Scope of
Construction: Addition of Lord & Taylor and
Bloomingdale's and renovation
(opening 11/98); addition of
Saks Fifth Avenue (opening 3/99)
West Town Mall
Knoxville, TN 50% 11/98 $13 1,338,000 77,000
(Expansion)
Scope of
Construction: Addition of Regal
Cinema and new
parking deck
<Page 30>
Projects To Be
Completed in 1999
- ------------------
---------
Barton Creek 4/99 and
Square 100% 10/99 $13 1,368,000 N/A
Austin, TX
(Expansion)
Scope of
Construction: Remodel, new food court and
new Finish Line (opened 5/98);
addition of General Cinema
(opening 4/99) and Old Navy
(opening 10/99)
Brunswick Square
East Brunswick, NJ 100% 10/99 $19 736,000 55,000
Expansion
Scope of
Construction: Renovation, addition of Barnes
& Noble and Theatre expansion
The Florida Mall 50% 11/99 $86 1,120,000 608,000
Orlando, FL
(Expansion)
Scope of
Construction: Addition of Burdine's;
mall GLA expansion and
renovation; Dillard's
expansion (opened 10/98),
JCPenney expansion
(opened 10/98)
LaPlaza Mall 11/99,
McAllen, TX 100% 3/00 $36 988,000 215,000
(Renovation/
Expansion) and 8/00
Scope of
Construction: Renovation of existing
center (opening 11/99);
expansion of mall GLA and
new Dillard's store (opening
3/00)
Mission Viejo Mall 100% 9/99 $146 817,000 427,000
Mission Viejo, CA
(Renovation/
Expansion)
Scope of
Construction: Addition of Nordstrom
and Saks Fifth Avenue;
Macy's and May- Robinson
expansions; small shop
expansion; mall renovation
and food court addition
(opening 9/00)
North East Mall 8/99 and
Hurst, TX 100% Fall 2000 $103 1,141,000 308,000
(Renovation/
Expansion)
Scope of
Construction: Addition of Nordstrom
and Saks Fifth Avenue;
mall expansion and
renovation; JCPenney
remodel and expansion;
addition of new expanded
Dillard's
Palm Beach Mall 100% 8/99 $35 1,205,000 61,000
West Palm Beach,
FL
(Renovation/
Expansion)
Scope of
Construction: Addition of Dillard's
(opening 11/99); renovations
of Burdine's, JCPenney and Sears;
addition of Borders and mall
renovation
<Page 31>
Projects To Be
Completed in 2000
- ------------------
Town Center at
Boca Raton 100% 11/00 $63 1,330,000 372,000
Boca Raton, FL
(Renovation/
Expansion)
Scope of
Construction: New, expanded Saks Fifth Avenue
(opening 9/99); addition of
Nordstrom; expansions of Lord &
Taylor and Bloomingdale's;
small shop expansion and mall
renovation (opening 11/00)
<Page 32>
SIMON PROPERTY GROUP
Capital Expenditures
For the Nine Months Ended September 30, 1998
(In millions)
Joint Venture Properties
------------------------
Simon
Consolidated Group's
Properties Total Share
---------- ----- -----
New Developments $53.8 $130.6 $51.6
Renovations and Expansions 141.2 45.6 17.1
Tenant Allowances-Retail 32.7 16.2 4.9
Tenant Allowances-Office 1.3 - -
Capital Expenditures
Recoverable from Tenants 9.8 1.9 0.7
Other (1) 5.6 1.4 0.3
------ ------ ------
Totals $244.4 $195.7 $74.6
====== ====== ======
(1) Primarily represents capital expenditures not recovered from
tenants.
<Page 33>
SIMON PROPERTY GROUP
Gains on Sales of Peripheral Land
For the Nine Months Ended September 30, 1998 and 1997
(In millions)
Nine Months Ended
June 30,
1998 1997
---- ----
Consolidated Properties $5.6 $3.0
Simon Group's Share of
Joint Venture Properties 0.7 2.2
---- ----
Totals $6.3 $5.2
===== =====
<Page 34>
Forward Looking Statement (Shelly Doran)
Good afternoon and welcome to the Simon Property Group third quarter
earnings teleconference call.
Before we begin, I'd like to let you know that statements in this
teleconference call which are not historical may be deemed forward-
looking statements within the meaning of the federal securities laws.
Although the Company believes the expectations reflected in any forward-
looking statements are based on reasonable assumptions, it can give no
assurance that its expectations will be attained. The listener is
directed to the Company's various filings with the Securities and
Exchange Commission, including quarterly reports on Form 10-Q, reports
on Form 8-K and annual reports on Form 10-K for a discussion of such
risks and uncertainties.
Opening Comments (David Simon)
Good afternoon. We are pleased with our accomplishments for the third
quarter, highlighted by the following:
* On an "apples to apples" basis, not taking into account the recent
change in the FASB pronouncement, we increased FFO per share in the 3rd
quarter by 10.9% and 12.4% year-to-date.
* We increased occupancy in the regional mall portfolio by 170 basis
points.
* SBV, our strategic marketing division, continued its active pace,
forming alliances with Visa U.S.A. and the NFL, JCDecaux-the world's
largest streetscape advertiser, U.S. RealTel, and GoldCan Recycling.
* And finally, we capped off the quarter with the closing of the
Corporate Property Investors acquisition, adding 22 regional mall assets
and increasing our market capitalization to approximately $17 billion.
* We believe ultimately there are two elements critical to the long-
term success of a retail real estate company-scale of operations and
quality of assets. On both, we believe we are unrivaled in our
industry.
<Page 35>
The CPI Merger (David Simon)
I'd like to give you a brief business update on the CPI acquisition:
* The merger was completed on September 24th. This was 60-90 days
later than our original plan, due primarily to the legal and regulatory
complexities involved in preserving the CPI "paired share" structure.
* Financing of the transaction has been completed.
$2.4 billion of new common and preferred convertible equity was
issued to existing CPI shareholders; the common stock was issued at $33
5/8 per share; the preferred stock has a coupon of 6.5% and converts
into common at $38.669.
Our $1.075 billion senior unsecured offering was completed at an
average rate of 6.8%.
A $1.4 billion acquisition facility was fully syndicated at LIBOR +
65 basis points with an ultimate maturity date of September 2000.
With respect to the financing of this transaction, I am pleased to
report that we closed this $1.4 billion revolver, fully syndicated,
despite the dislocation that has occurred in the capital markets. We
had no one drop out of our facility, and we closed that transaction as
planned. I don't think a company in our industry could have done that
without the kind of integrity and reputation that our company has.
* We sold the GM Building for net proceeds of $800 million.
* The organizational integration will be complete by year-end.
The back office will be fully integrated in Indianapolis.
The revenue generating functions-leasing, development and property
management-have been restructured and staff are transitioning to their
new assignments.
* Implementation of cost savings has begun.
* We also assumed management of the Gwinnett and Cobb centers in
Atlanta on November 1st. These centers had not been managed by CPI.
Things are looking good in this transaction and we remain very
comfortable that this was the right thing for our company to proceed
upon.
<Page 36>
Financial and Operational Results (Steve Sterrett)
Our financial and operational results for the quarter and nine months
ended September 30, 1998 are as follows:
For the quarter.
* FFO on a per share basis increased 6.3% to $0.68 per share in 1998
from $0.64 per share in 1997, under both the basic and diluted
computation method.
* FFO of the Simon Portfolio was $123.6 million, an increase of 20.9%
or $21.4 million over the same period in 1997.
* Total revenue increased 24.1% to $322.3 million as compared to
$259.8 million over the same period in 1997.
Results for the quarter do include the adoption of Emerging Issues Task
Force Pronouncement 98-9, as of May 22, 1998, regarding the recording of
percentage rents. The impact to our results for the third quarter is a
negative $0.03 per share. If the pronouncement had not been adopted,
diluted FFO per share would have increased by 10.9% for the quarter. We
currently expect $0.02 of this to be recovered during the fourth
quarter, resulting in a net negative impact of approximately $0.01 per
share for 1998. The remaining $0.01 is expected to be recovered in the
first quarter of 1999. Several of our tenant leases end on January 31
and the sales breakpoints for certain of these tenants are not fully
achieved until January.
For the nine months.
* Diluted FFO per share increased 10.7% to $1.97 per share in 1998
from $1.78 per share in 1997. Without EITF 98-9, the FFO per share
would have been $2.00 and our growth rate 12.4%.
* FFO of the Simon portfolio was $348.4 million, an increase of 22.9%
or $65 million over the same period in 1997.
* Total revenue for the nine months increased 24.8% to $933 million
as compared to $747.3 million in 1997.
<Page 37>
As is our customary practice after the completion of large transactions,
operating statistics will be separately disclosed for both the SPG
portfolio and the CPI portfolio. Details will be provided in our 8-K
package. Operating statistics for the "old" SPG portfolio at 9/30/98
are as follows:
* Occupancy at September 30, 1998, was 87.7%, an increase of 170
basis points over the same period in 1997.
* Average base rent in the regional mall portfolio was $23.20 per
square foot as compared to $21.82 one year ago, for an increase of 6.3%.
This increase has slowed from recent quarters because Dadeland Mall was
acquired and The Source and Forum Shops expansion opened in the third
quarter of last year. All three of these high rent-producing projects
appeared in our operating statistics for the first time in the third
quarter of 1997. In addition, several big box tenants opened in the
portfolio with lower than portfolio average rents, slowing the rent
growth.
* Total sales volume in the portfolio for the first nine months of
the year was $6.457 billion at September 30, up 42.2% from $4.541
billion in 1997.
* Total sales per square foot for the twelve months ended 9/30/98
increased 6.3%, to $320 per square foot as compared to the prior year.
The increase for "comparable properties", that is properties owned for
at least one year, was 6.0%.
* Comparable sales per square foot for tenants who have been in place
for at least 24 months, increased 6.5%, to $327.
* This sales growth was achieved in spite of the adverse impact of
emergency September mall closings predicated by Hurricane George. Our
Florida region experienced a 2.5% decrease in sales in September due to
the impact of the hurricane.
* The average initial base rent for new leases signed in 1998 was
$24.59 per square foot, an increase of $3.16, or about 15% over the
tenants who closed or whose leases expired. This spread is below our
historical $5-$6 per square foot average due to the inclusion of Big Box
tenants that averaged rent of $13.66 per square foot. Excluding these
big box users, the releasing spread at 9/30/98 would be $5.36.
Same property NOI growth for the nine months as compared to last year
was approximately 7%. This growth rate is positively impacted by our
SBV initiatives that we have implemented and by the positive impact of
our redevelopment efforts.
The CPI portfolio's 9/30/98 operating statistics are as follows:
* Occupancy at September 30, 1998, was 90.5%.
* Average base rent in the regional mall portfolio was $35.92 per
square foot.
* Total sales volume in the portfolio for the first nine months of
the year was $1.886 billion.
* Total sales per square foot were $420 and comparable sales per
square foot were $428 for the period ended September 30. As we have
previously communicated to you, CPI reported 1997 sales per square foot
of $388.
<Page 38>
The CPI portfolio remains on track to meet its original 1998 budget.
Financing Activities (Steve Sterrett)
Despite the turmoil in the capital markets, we have been able to
continue to execute financing transactions on favorable terms:
In August, we closed on permanent financing for Grapevine Mills. The
new $155 million, non-recourse loan bears interest at 6.47% and replaced
a construction loan at LIBOR plus 120 basis points.
In September, we closed on construction financing for Mission Viejo Mall
in Mission Viejo, California. This $162 million loan bears interest at
LIBOR + 105 basis points.
Last week, we closed on $145 million of permanent financing for Ontario
Mills. The new non-recourse loan has a 10-year term with a fixed rate
of 6.75%. The previous loan matured February 2002 and had an average
fixed rate of 7.38%.
Also last week, we closed on $124 million of permanent financing for The
Source. This non-recourse loan has a 10 year maturity and bears
interest at 6.65% and replaced a construction loan at LIBOR + 120 basis
points.
In August, we brought in an equity partner at The Shops at Sunset.
Rosche, a German based syndicator, invested $42.8 million for half of
our 75% interest in The Shops and completely returned all the equity
that SPG had invested in the project. SPG's ownership interest is now
37.5%. This transaction is similar to the one completed in the first
quarter on The Source.
We think these transactions are reflective of a top tier company's
ability to access the capital markets on favorable terms.
The Company's balance sheet is in excellent shape:
* We have minimal near term debt maturities.
* Our significant construction projects already have construction
loans in place.
* We have $900 million of available capacity on our current corporate
credit facility.
* We have strong fixed charge and interest coverage as evidenced by
the upgrade we received from S&P on our senior unsecured debt to BBB+.
<Page 39>
* And in 1999, we should generate over $200 million of "retained"
cash flow after payment of dividends.
All of these items are a testimony to the continued financial strength
of our company.
Disposition Activity (Steve Sterrett)
In a strategy that was articulated to you earlier this year, long before
the current credit crunch, we are continuing with our efforts to dispose
of our remaining office assets and a selected number of non-core
regional mall assets that do not fit our growth profile going forward.
Development Activities (Rick Sokolov)
As outlined in the press release, we have five new development projects
proceeding on plan for 1998 and 1999 openings. We also have another new
development scheduled to start construction this year.
* Waterford Lakes Town Center in Orlando, Florida, will be built in
two phases opening in November of 1999 and November 2000. When
completed, this open-air center will be over 800,000 square feet, and
blend the best retail, recreation, entertainment, restaurant and
specialty users. We are very pleased to be able to pursue this
development, since this part of Orlando is the fastest growing market
segment in the metropolitan area. Population within a 10 mile radius is
approximately 412,000 with average household income of nearly $56,000.
Our redevelopment activity continues its active pace. We completed two
projects during the third quarter-the redevelopment of Richardson Square
in Dallas, Texas, where we added Barnes & Noble, Old Navy, Ross Dress
for Less, Stein Mart and renovated the property and added a food court.
At Tyrone Square in St. Petersburg, Florida, we added a new food court,
renovated the property, and have Borders under construction for an
opening next year.
In October, we completed the major renovation and expansion of Prien
Lake Mall in Lake Charles, Louisiana. The expansion included the
addition of national specialty stores, a food court, Dillard's and
Sears. This redevelopment solidifies Prien Lake Mall's position as the
only regional mall in southwest Louisiana.
In our press release, we also detailed a number of projects that are
opening in the fourth quarter of 1998.
<Page 40>
At Castleton Square in Indianapolis, Indiana, we just opened with a new
Galyan's, food court, a renovated property, Von Maur in Montgomery
Ward's previous location, and an expanded L.S. Ayres.
At Irving Mall in Irving, Texas, we added a Barnes & Noble and Old Navy,
and General Cinema is opening a brand new stadium seating complex in the
spring.
Independence Center in Independence, Missouri, is a totally remodeled
center. At Richmond Towne Square in Cleveland, Ohio, this quarter we
are opening Kauffmann's with a renovated mall; and in the spring of next
year, we are opening a renovated Sears, JCPenney, a brand new Sony
Theatre and a food court.
Walt Whitman Mall in Huntington, New York, is a very exciting
redevelopment project we took over from CPI. We have a brand new
Bloomingdales that opened this quarter along with Lord & Taylor. In the
spring Saks is opening in a completely renovated property.
The Company's commitment to reinvest in its already market dominant
assets is evident in our aggressive redevelopment program and the number
of projects currently under construction. We've been talking about
these projects so I won't go into any detail, but I'd like to point out
two new projects that are discussed in the press release. At LaPlaza
Mall, in McAllen, Texas, we are adding a new Dillard's to supplement a
brand new Foley's that opened last year. The mall will be completely
renovated and expanded. And at Palm Beach Mall in West Palm Beach,
Florida we are adding a new Dillard's, Borders Books and completely
renovating this property in order for it to maintain its dominant market
position well into the next century.
Our redevelopment program is producing NOI results. We are increasing
the strength of assets thereby making it difficult for competitors in
the markets where we are already dominant. We are also able to
incorporate the retailers that are making a difference in today's
environment, tenants such as Barnes & Noble and Old Navy, so we can stay
current with our product offering.
<Page 41>
International Expansion (David Simon)
Our expansion into Europe has materialized with the Phase I opening of a
development in Krakow, Poland at the end of October. Phase I is 100%
leased and committed and features 390,000 square feet of selling space
including a 120,000 square foot Carrefour Hypermarket. Phase II of the
project will feature a variety of entertainment venues contained in an
historical building with a Cineplex Theatre on the periphery. Total net
costs of the project are estimated at $25 million with an initial
unleveraged return of 15% on cost.
To refresh your memories, SPG has completed the initial $15 million
funding related to a 22% interest in Groupe BEG. Argo II (J.P. Morgan)
and Harvard Private Capital have also closed on a 22% investment. SPG
and Argo/Harvard will gradually acquire a majority controlling interest
in the Groupe pursuant to an earn out formula as the company moves
forward.
We believe Groupe BEG is set to capitalize on its retail relationships
and development expertise to become a major Pan-European player.
In addition, Groupe BEG has also negotiated a development protocol with
Carrefour in Poland, whereby they have the right of first refusal on
developments identified by Carrefour.
We continue to feel that this is a good opportunity for us to make an
investment with very creative returns in an area in need of new retail
space.
Simon Brand Ventures (David Simon)
SBV continues the active implementation of initiatives, and we have
recently augmented the staff to enable our organizational structure to
support the pace of this division.
Joining SBV are Drew Sheinman as senior vice president of marketing and
business development and Stephen G. Magrill as vice president of
affinity marketing.
Sheinman's key charge will be to effectively position the SPG portfolio
of 241 properties among brand marketers as a live interactive media
network that is a powerful marketing vehicle. Drew comes to us with 18
years of experience in marketing development within the entertainment,
sports and lifestyle industries. Most notably, he worked for The Coca-
<Page 42>
Cola Company where he was executive producer of Coca-Cola Olympic City,
an unprecedented $30 million, 12-acre theme park for the Centennial
Olympic celebration that occurred in Atlanta.
Stephen Magrill will be responsible for developing value-added
programming for the key consumer segments within SPG's market-dominant
shopper base. He will also work to integrate brand marketers into
partner programs such as MALLPeRKS, the only national mall-based shopper
loyalty program. Prior to joining SBV, Stephen was vice president,
marketing/strategic planning of Interval International where he was
responsible for the development and management of marketing activities
for Interval's base of over 1,600 resorts and 900,000 members worldwide
including Marriott, Disney, Hyatt and Four Seasons.
We're excited about the addition of these two professionals to our SBV
staff.
I'd like to briefly talk about our recent announcement regarding
JCDecaux, the world's largest streetscape advertising company. JCDecaux
will spearhead Simon MallScape 2000, an indoor-based advertising medium
that will feature collections of attractive and discreet mall
advertising furniture in which brand marketers can target SPG shoppers.
For those of you who were at NAREIT's Institutional Investors Conference
in June of 1998, you were exposed to the best example of JCDecaux in the
furniture/advertising fixtures lining the streets of San Francisco. We
are excited about the combination of Simon and JCDecaux and look forward
to bringing to our tenants and our shoppers this elegant platform for
advertising and communication.
Conclusion (David Simon)
In summary, I would like to say we are very pleased with our year-to-
date results.
* The Company's existing portfolio continues to exhibit strong
performance in terms of occupancy, sales and rental growth.
* The addition of the CPI portfolio solidifies Simon Property Group
as the clear cut industry leader, and we look forward to the new
opportunities presented with the CPI properties.
* The Company's active development and redevelopment pipeline
continues to fuel our growth. We see many opportunities ahead in that
area.
* International investment is expanding SPG's market opportunities,
taking advantage of our brand name, recognition throughout the world and
provides us with another vehicle in which to grow our business.
* And SBV continues its active pace, announcing three new initiatives
in October.
<Page 43>
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