<PAGE>
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) : May 20, 1999
SIMON PROPERTY GROUP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 001-14469 046268599
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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 38 Pages
<PAGE>
Item 5. Other Events
On May 20, 1999, 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 March 31, 1999, 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 March 31, 1999
Page 2 of 38 pages
<PAGE>
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: May 20, 1999
SIMON PROPERTY GROUP, INC.
By: _____________________
Stephen E. Sterrett,
Treasurer
Page 3 of 38 pages
<PAGE>
SIMON PROPERTY GROUP
SUPPLEMENTAL INFORMATION
Table of Contents
As of March 31, 1999
<TABLE>
<CAPTION>
Information Page
----------- ----
<S> <C>
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 12-14
Rent Information 15
Lease Expirations 16-17
Debt Amortization and Maturities by Year 18
Summary of Indebtedness 19
Summary of Indebtedness by Maturity 20-25
Summary of Variable Rate Debt and
Interest Rate Protection Agreements 26-27
New Development Activities 28
Significant Renovation/Expansion Activities 29-30
Capital Expenditures 31
Gains on Land Sales 32
Teleconference Text - May 5, 1999 33-38
</TABLE>
4 of 38
<PAGE>
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 March 31, 1999, the Company, directly or through the Operating Partnership,
owned or had an interest in 243 properties which consisted of regional malls,
community shopping centers, and specialty and mixed-use properties containing an
aggregate of 166 million square feet of gross leasable area (GLA) in 35 states
and one asset in Europe. The Company, together with its affiliated management
companies, owned or managed approximately 180 million square feet of GLA in
retail and mixed-use properties.
In February, 1999, SPG announced that it entered into a definitive agreement to
acquire a portfolio of up to 14 regional malls from New England Development
Company (NED) and assume management responsibilities from NED's affiliated
management company, WellsPark Management LLC. The purchase price for this 10.6
million square foot portfolio is $1.725 billion, which includes ten properties
in Massachusetts, two in New Hampshire and one each in Connecticut and Virginia.
Completion of the transaction is contingent upon the satisfaction of certain
closing conditions and, if met, the transaction is expected to occur during the
third quarter of 1999.
This package was prepared to provide (1) ownership information, (2) certain
operational information, and (3) debt information as of March 31, 1999, 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.
Telephone: (317) 685-7330.
5 of 38
<PAGE>
Simon Property Group
Economic Ownership Structure (1)
March 31, 1999
<TABLE>
<CAPTION>
Partners: Units %
<S> <C> <C> <C> <C>
---------------------------------------------------------------- --------------------------------------------------------
SD Property Group, Inc.(2) SPG Properties, Inc. (2)
% %
SPG Properties, Inc. 99.99% Simon Property Group, Inc. 99.99%
100 Individual Shareholders 0.01% 100 Individual Shareholders 0.01%
----- ------
100.00% 100.00%
---------------------------------------------------------------- --------------------------------------------------------
37,873,965 units 75,814,592
--------------------------------------------------------------------
Common Shareholders Shares %
------------------- ----------- -----
Public Shareholders 168,529,304 97.3%
Simon Family 3,405,811 2.0%
DeBartolo Family 32,567 0.0%
Executive Management (5) 1,221,285 0.7%
----------- ----
173,188,967 100.0%
--------------------------------------------------------------------
54,212,396 units
---------------------
Simon Property Group
232,077,962 units
---------------------
---------------------------------------------------
Ownership of Simon Property Group, L.P.
--------------------------------------
Simon Property Group, Inc. %
Public Shareholders 70.4%
Simon Family 1.4%
DeBartolo Family 0.0%
Executive Management (5) 0.5%
-----
72.3%
-----
Limited Partners
Simon Family 14.9%
DeBartolo Family 9.6%
--------------------------------------------------- Executive Management (5) 0.1%
Limited Partners: Other Limited Partners 3.1%
Shareholders Units %
------------ ----- -- -----
Simon Family 34,584,455 53.9% 27.7%
DeBartolo Family 22,222,599 34.6% -----
Executive Management (5) 153,498 0.2% 100.0%
Other Limited Partners 7,216,457 11.3% ---------------------------------------------------
---------- ------
64,177,009 100.0%
---------------------------------------------------
</TABLE>
(1) Schedule excludes preferred stock (see "Preferred Stock Outstanding") and
units not convertible into common stock.
(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) The number of outstanding shares of common stock of SPG exceeds the number
of Simon Property Group, L.P. units owned by SPG by 5,288,014. This is the
result of the direct ownership of Ocean County Mall by SPG.
(5) Executive management excludes Simon family members.
Page 6 of 38
<PAGE>
SIMON PROPERTY GROUP
Changes in Common Shares and Unit Ownership
For the Period from December 31, 1998 through March 31, 1999
<TABLE>
<CAPTION>
Operating
Partnership Company
Units(1) Common Shares(2)
-------- ----------------
<S> <C> <C>
Number Outstanding at December 31, 1998 64,182,157 166,775,031
Restricted Stock Awards (Stock Incentive
Program), Net - 525,786
Conversion of Series A Preferred Stock
into Common Stock - 5,851,650
Conversion of units into cash (5,148)
Issuance of Stock for Stock Option Exercises - 36,500
Number Outstanding at March 31, 1999 64,177,009 173,188,967
</TABLE>
--------------------------------------------------
Total Common Shares and Units Outstanding at
March 31, 1999: 237,365,976(2)
--------------------------------------------------
(1) Excludes units owned by the Company (shown here as Company Common Shares)
and units not convertible into common shares.
(2) Excludes preferred units relating to preferred stock outstanding (see
Schedule of Preferred Stock Outstanding).
7 of 38
<PAGE>
SIMON PROPERTY GROUP
Preferred Stock Outstanding
As of March 31, 1999
($ in 000's)
<TABLE>
<CAPTION>
Number Liquidation Ticker
Issuer Description of Shares Preference $ Symbol
<S> <C> <C> <C> <C> <C>
Convertible:
- -----------------------------------------------------------------------------------------------------------------
Simon Property Group, Inc. Series A Preferred 59,249 $1,000 $ 59,249 N/A
6.5% Convertible/(1)/
- -----------------------------------------------------------------------------------------------------------------
Simon Property Group, Inc. Series B Preferred 4,844,331 $ 100 $484,433 SPGPrB
6.5% Convertible/(2)/
- -----------------------------------------------------------------------------------------------------------------
Perpetual:
- -----------------------------------------------------------------------------------------------------------------
SPG Properties, Inc. Series B Preferred 8,000,000 $ 25 $200,000 SGVPrB
8 3/4% Perpetual/(3)/
- -----------------------------------------------------------------------------------------------------------------
SPG Properties, Inc. Series C Preferred 3,000,000 $ 50 $150,000 N/A
7.89% Perpetual/(4)/
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(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. During the first
quarter of 1999, the largest shareholder of this issue elected to convert
their preferred stock to common stock (150,000 shares). This transaction
was completed effective February 26, 1999.
(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
March 31, 1999, was $76.94 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) SPG Properties, Inc. may redeem the stock on or after September 29, 2006.
The shares are not convertible into any other securities of SPG Properties,
Inc. or the Company. The shares are traded on the New York Stock Exchange.
The closing price on March 31, 1999, was $25.5625 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%.
8 of 38
<PAGE>
SIMON PROPERTY GROUP
Reconciliation of Income to Funds From Operations ("FFO")
As of March 31, 1999
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1999 1998
---- ----
<S> <C> <C>
Income Before Extraordinary Items $ 67,388 $ 45,124
Plus: Depreciation and Amortization from Consolidated 89,537 58,079
Properties
Less: Minority Interest Portion of Depreciation,
Amortization and Extraordinary Items (1,795) (1,766)
Plus: Simon's Share of Depreciation, Amortization and
Extraordinary Items from Unconsolidated Affiliates 20,530 14,804
Less: Preferred Dividends (including those of subsidiary) (17,705) (7,334)
--------- ----------
FFO of Simon Portfolio $ 157,955 $ 108,907
========= ==========
Percent Increase 45.0%
==========================================================================================
FFO of Simon Portfolio $ 157,955 $ 108,907
Basic FFO per Paired Share:
- ---------------------------
Basic FFO Allocable to the Company $ 114,260 $ 69,015
Basic Weighted Average Paired Shares Outstanding 168,987 109,684
Basic FFO per Paired Share $ 0.68 $ 0.63
========= ==========
Percent Increase 7.9%
Diluted FFO per Paired Share:
- -----------------------------
Diluted FFO Allocable to the Company $ 114,295 $ 69,104
Diluted Weighted Average Number of Equivalent Paired 169,168 110,071
Shares
Diluted FFO per Paired Share $ 0.68 $ 0.63
========= ==========
Percent Increase 7.9%
==========================================================================================
</TABLE>
9 of 38
<PAGE>
SIMON PROPERTY GROUP
Selected Financial Information
As of March 31, 1999
(In thousands, except as noted)
<TABLE>
<CAPTION>
As of or for the
Three Months Ended
March 31,
1999 1998 % Change
---- ---- --------
<S> <C> <C> <C>
Financial Highlights of the Company
- -----------------------------------
Total Revenue - Consolidated Properties
$ 446,093 $ 300,257 48.6%
Total EBITDA of Simon Portfolio $ 414,676 $ 282,400 46.8%
EBITDA After Minority Interest $ 333,427 $ 218,475 52.6%
Net Income Available to Common Shareholders $ 34,954 $ 23,948 46.0%
Basic Net Income per Common Share $ 0.21 $ 0.22 -4.5%
Diluted Net Income per Common Share $ 0.21 $ 0.22 -4.5%
FFO of the Simon Portfolio $ 157,955 $ 108,907 45.0%
Basic FFO Allocable to the Company $ 114,260 $ 69,015 65.6%
Diluted FFO Allocable to the Company $ 114,295 $ 69,104 65.4%
Basic FFO per Common Share $ 0.68 $ 0.63 7.9%
Diluted FFO per Common Share $ 0.68 $ 0.63 7.9%
Distributions per Common Share $ 0.5050 $ 0.5050 0.0%
Operational Statistics
- ----------------------
Occupancy at End of Period:
Regional Malls/(1)/ 88.6% 86.1% 2.5%
Community Shopping Centers/(2)/ 91.1% 90.6% 0.5%
Average Base Rent per Square Foot:
Regional Malls/(1)/ $ 25.95 $ 22.95 13.1%
Community Shopping Centers/(2)/ $ 7.78 $ 7.44 4.6%
Regional Malls:
Total Tenant Sales Volume,
in millions/(3)(4)/ $ 2,890 $ 2,051 40.9%
Total Sales per Square Foot/(4)/ $ 347 $ 314 10.5%
Comparable Sales per Square
Foot/(4)/ $ 360 $ 321 12.1%
Number of Properties Open at End of Period 243 217 12.0%
Total GLA at End of Period, in millions 167.0 140.2 19.1%
</TABLE>
(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.
10 of 38
<PAGE>
SIMON PROPERTY GROUP
Selected Financial Information
As of March 31, 1999
(In thousands, except as noted)
<TABLE>
<CAPTION>
March 31, March 31,
Equity Information 1999 1998
- ------------------ ---- ----
<S> <C> <C>
Limited Partner Units Outstanding at End of Period 64,177 64,060
Common Shares Outstanding at End of Period 173,189 109,695
------------ ------------
Total Common Shares and Units Outstanding at End of
Period 237,366 173,754
============ ============
Basic Weighted Average Paired Shares Outstanding 168,987 109,684
Diluted Weighted Average Number of Equivalent Paired
Shares/(2)/ 169,168 110,071
</TABLE>
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---- ----
<S> <C> <C>
Debt Information
- ----------------
Consolidated Debt $ 8,263,590 $ 7,973,372
Simon Group's Share of Joint Venture Debt $ 1,156,594 $ 1,227,044
Debt-to-Market Capitalization
- -----------------------------
Common Stock Price at End of Period $ 27.4375 $ 28.50
Equity Market Capitalization/(1)/ $ 7,316,212 $ 7,608,188
Total Consolidated Capitalization $15,579,802 $15,581,560
Consolidated Debt-to-Market Capitalization 53.0% 51.2%
Total Capitalization - Including Simon Group's Share
of JV Debt $16,736,396 $16,808,604
Debt-to-Market Capitalization - Including Simon Group's
Share of JV Debt 56.3% 54.7%
</TABLE>
(1) Market value of Common Stock, Units and all issues of Preferred Stock of
SPG and SPG Properties, Inc.
(2) The convertible preferred Series A and B shares are antidilutive
securities under the computation of diluted net income per share;
therefore, the securities have not been considered outstanding for purposes
of computing diluted FFO per share.
11 of 38
<PAGE>
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data
As of March 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Avg. Annualized
% of Owned Base Rent Per
Total % of GLA Which Leased Sq. Ft.
Type of Property GLA-Sq. Ft. Owned GLA Owned GLA is Leased of Owned GLA
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Regional Malls
- --------------
- -Anchor 87,462,546 27,085,630 27.4% 98.2% $ 3.65
- -Mall Store 49,194,113 49,146,217 49.8% 88.5% $26.62
- -Freestanding 3,360,955 1,819,837 1.8% 93.8% $ 9.17
----------- ---------- ---- ---- ------
Subtotal 52,555,068 50,966,054 51.6% 88.6% $25.95
Regional Mall Total 140,017,614 78,051,684 79.0% 92.0% $17.87
Community Shopping Centers
- --------------------------
- -Anchor 12,462,064 8,164,155 8.2% 95.9% $ 6.24
- -Mall Store 4,872,511 4,786,753 4.9% 82.1% 10.95
- -Freestanding 1,009,667 477,762 .5% 98.3% 7.45
----
Community Ctr. Total 18,344,242 13,428,670 13.6% 91.1% $ 7.78
Office Portion Of Mixed-Use
Properties 2,763,058 2,763,058 2.8% 88.0% $19.98
Value-Oriented Super-Regional
Malls 3,820,327 3,678,732 3.7% 98.1% $16.54
Properties under
Redevelopment 2,028,615 983,392 0.9%
GRAND TOTAL 166,973,856 98,905,536 100.00%
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Occupancy History
- -------------------------------------------------------------------------
Community
As of Regional Malls/(1)/ Shopping Centers/(2)/
----------------------------------------------------------
<S> <C> <C>
3/31/99 88.6% 91.1%
3/31/98 86.1% 90.6%
----------------------------------------------------------
12/31/98 90.0% 91.4%
12/31/97 87.3% 91.3%
12/31/96 84.7% 91.6%
12/31/95/(3)/ 85.5% 93.6%
</TABLE>
/(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").
12 of 38
<PAGE>
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data
As of March 31, 1999
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Avg. Annualized
% of Owned Base Rent Per
Type of Total % of GLA Which Leased Sq. Ft.
Property GLA-Sq. Ft. Owned GLA Owned GLA is Leased of Owned GLA
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Regional Malls
- --------------
- -Anchor 71,153,403 24,211,332 28.1% 98.6% $ 3.40
- -Mall Store 40,313,185 40,280,589 46.6% 87.9% $ 24.27
- -Freestanding 3,010,221 1,695,665 2.0% 95.5% $ 8.76
----------- ---------- -----
Subtotal 43,323,406 41,976,254 48.6% 88.2% $ 23.58
Regional Mall Total 114,476,809 66,187,586 76.7% 92.0% $ 15.76
Community Shopping Centers
- --------------------------
- -Anchor 12,441,135 8,143,226 9.4% 95.9% $ 6.23
- -Mall Store 4,770,315 4,684,557 5.4% 81.8% 10.98
- -Freestanding 997,509 477,762 .6% 98.3% 7.45
----
Community Ctr. Total 18,208,959 13,305,545 15.4% 91.0% $ 7.76
Office Portion
Of Mixed-Use Properties 2,278,153 2,278,153 2.6% 89.1% $ 19.41
Value-Oriented
Super-Regional Malls 3,820,327 3,678,732 4.3% 98.1% $ 16.54
Properties under
Redevelopment 2,028,615 983,392 1.0%
GRAND TOTAL 140,812,863 86,433,408 100.00%
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Occupancy History
- -----------------------------------------------------------------------------------------------
Community
As of Regional Malls(1) Shopping Centers(2)
----- ----------------- -------------------
<S> <C> <C>
-----------------------------------------------------
3/31/99 88.2% 91.0%
3/31/98 86.1% 90.6%
-----------------------------------------------------
12/31/98 89.5% 91.4%
12/31/97 87.3% 91.3%
12/31/96 84.7% 91.6
12/31/95(3) 85.5% 93.6%
</TABLE>
(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.
13 of 38
<PAGE>
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data
As of March 31, 1999
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Avg. Annualized
% of Owned Base Rent Per
Type of Total % of GLA Which Leased Sq. Ft.
Property GLA-Sq. Ft. Owned GLA Owned GLA is Leased of Owned GLA
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Regional Malls
- --------------
- -Anchor 16,309,143 2,874,298 23.0% 94.6% $ 6.08
- -Mall Store 8,880,928 8,865,628 71.1% 91.2% $ 36.63
- -Freestanding 350,734 124,172 1.0% 70.8% $ 16.76
---------- ---------- ----
Subtotal 9,231,662 8,989,800 72.1% 90.9% $ 36.42
Regional Mall Total 25,540,805 11,864,098 95.1% 91.8% $ 29.72
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 0 0.0% 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% 82.8% $ 22.82
GRAND TOTAL(4) 26,160,993 12,472,128 100.00%
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Occupancy History
- -----------------------------------------------------------------------------------------------
Community
As of Regional Malls(1) Shopping Centers(2)
----- ----------------- -------------------
<S> <C> <C>
---------------------------------------------
3/31/99 90.9% 97.0%
3/31/98 91.3% (3)
---------------------------------------------
12/31/98 92.0% 97.0%
12/31/97 94.0% (3)
12/31/96 90.4% (3)
12/31/95 93.1% (3)
</TABLE>
(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.
14 of 38
<PAGE>
SIMON PROPERTY GROUP
Rent Information (Including CPI Portfolio)
As of March 31, 1999
<TABLE>
<CAPTION>
- ------------------
Average Base Rent
- ------------------
Mall & Freestanding % Community %
As of Stores at Regional Malls Change Shopping Centers Change
-- -- ------------------------ ------ ---------------- -------
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3/31/99 $ 25.95 13.1% $ 7.78 4.6%
3/31/98 22.95 - 7.44 -
- --------------------------------------------------------------------------------------------
12/31/98 $ 25.70 8.7% $ 7.68 3.2%
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
</TABLE>
<TABLE>
<CAPTION>
- -------------
Rental Rates
- -------------
Base Rent /(2)/
---------
Store Openings Store Closings Amount of Change
-----------------
Year During Period During Period Dollar Percentage
- ---- ------------- ------------- ------ ----------
<S> <C> <C> <C> <C>
Regional Malls:
- ---------------
- ---------------------------------------------------------------------------------------------
1999 (YTD) $ 30.16 $ 23.17 $ 6.99 30.2%
- ---------------------------------------------------------------------------------------------
1998 27.33 23.63 3.70 15.7
1997 29.66 21.26 8.40/(3)/ 39.5/(3)/
1996 23.59 18.73 4.86 25.9
Community Shopping Centers:
- ---------------------------
- ---------------------------------------------------------------------------------------------
1999 (YTD) $ 9.55 $ 8.52 $ 1.03 12.1%
- ---------------------------------------------------------------------------------------------
1998 10.43 10.95 (0.52) (4.7)
1997 8.63 9.44 (0.81) (8.6)
1996 8.18 6.16 2.02 32.8
</TABLE>
(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.
15 of 38
<PAGE>
SIMON PROPERTY GROUP
Lease Expirations(1)
As of March 31, 1999
<TABLE>
<CAPTION>
Avg. Base Rent per
Number of Square Square Foot
Year Leases Expiring Feet at 3/31/99
<S> <C> <C> <C>
- -------------------------------------------
Regional Malls - Mall & Freestanding Stores
- -------------------------------------------
1999 (4/1 - 12/31) 787 1,412,549 28.52
2000 1,734 3,446,070 26.09
2001 1,474 3,339,486 25.24
2002 1,448 3,291,180 25.80
2003 1,611 3,931,462 26.90
2004 1,436 3,932,669 27.22
2005 1,280 4,040,768 26.58
2006 1,413 4,028,037 28.26
2007 1,211 3,521,560 30.50
2008 1,113 3,825,985 29.15
-------- -----------
TOTALS 13,507 34,769,766 $27.41
- -------------------------------
Regional Malls - Anchor Tenants
- -------------------------------
1999 (4/1 - 12/31) 8 1,122,732 2.21
2000 14 2,031,903 1.88
2001 12 1,544,673 2.03
2002 13 1,564,338 1.99
2003 16 2,013,311 2.41
2004 22 2,062,694 3.50
2005 13 1,429,815 3.02
2006 17 2,062,107 3.29
2007 7 636,374 2.79
2008 11 1,202,085 4.42
-------- -----------
TOTALS 133 15,670,032 $ 2.73
- -----------------------------------------------------
Community Centers - Mall Stores & Freestanding Stores
- -----------------------------------------------------
1999 (4/1 - 12/31) 63 171,550 10.50
2000 284 769,661 11.30
2001 191 535,880 12.04
2002 146 504,389 11.47
2003 131 567,124 11.27
2004 78 374,313 10.13
2005 39 270,679 9.77
2006 21 259,848 7.42
2007 18 164,142 11.07
2008 19 151,301 11.16
-------- -----------
TOTALS 990 3,768,887 $10.87
</TABLE>
(1) Does not consider the impact of options that may be contained in leases.
16 of 38
<PAGE>
SIMON PROPERTY GROUP
Lease Expirations/(1)/
As of March 31, 1999
Number of Square Avg. Base Rent
Year Leases Expiring Feet per Square Foot
at 3/31/99
-------------------------------------
Community Centers - Anchor Tenants
-------------------------------------
1999 (4/1 - 12/31) 4 275,018 2.35
2000 8 316,642 5.22
2001 13 537,403 4.02
2002 8 355,136 5.47
2003 10 299,248 7.00
2004 11 265,417 6.35
2005 11 630,445 5.61
2006 10 660,361 5.46
2007 14 746,056 6.05
2008 10 399,376 7.73
-- ---------
TOTALS 99 4,485,102 $ 5.58
(1) Does not consider the impact of options that may be contained in leases.
17 of 38
<PAGE>
SIMON PROPERTY GROUP
SPG's Share of Total Debt Amortization and Maturities by Year
As of March 31, 1999
(In thousands)
<TABLE>
<CAPTION>
-------------- -------------- -------------- --------------
SPG's Share of SPG's Share of SPG's Share of
Secured Unsecured Unconsolidated SPG's Share of
Consolidated Consolidated Joint Venture Total
- ------------------------------
Year Debt Debt Secured Debt Debt
- ------------------------------ -------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
1999........................... 1 182,820 341,000 9,126 532,945
2000........................... 2 367,566 1,083,000 123,595 1,574,161
2001........................... 3 268,042 0 4,311 272,353
2002........................... 4 615,190 250,000 76,308 941,498
2003........................... 5 222,727 575,000 173,347 971,073
2004........................... 6 427,514 700,000 39,091 1,166,605
2005........................... 7 107,724 660,000 129,306 897,030
2006........................... 8 118,739 250,000 217,924 586,663
2007........................... 9 264,041 180,000 40,750 484,791
2008........................... 10 44,924 200,000 246,016 490,939
Thereafter 287,774 975,000 86,669 1,349,443
------------- ------------- -------------- --------------
Subtotal Face Amounts $2,907,061 $5,214,000 $1,146,441 $9,267,502
------------- ------------- -------------- --------------
Premiums and Discounts on
Indebtedness, Net 3,297 9,460 10,154 22,911
------------ ------------- -------------- --------------
SPG's Share of Total
Indebtedness $2,910,358 $5,223,460 $1,156,595 $9,290,413
============ ============= ============== ==============
</TABLE>
18 of 38
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness
As of March 31, 1999
(In thousands)
<TABLE>
<CAPTION> ------------
SPG's
------------ ------------- -------------------
Total Share of Weighted Avg. Weighted Avg. Years
Indebtedness Indebtedness Interest Rate to Maturity
------------ ------------ ------------- -------------------
<S> <C> <C> <C> <C>
Consolidated Indebtedness
- -------------------------
Mortgage Debt
Fixed Rate 2,576,125 2,493,736 7.42% 5.5
Debt Swapped to Maturity 50,000 50,000 7.74% 2.7
Capped to Maturity, Currently "In 134,999 98,969 6.17% 7.2
the Money"
Other Hedged Debt 50,000 50,000 5.49% 1.0
Floating Rate Debt 226,009 214,357 6.07% 3.6
--------- --------- ----- ---
Total Mortgage Debt 3,037,133 2,907,062 7.25% 5.3
Unsecured Debt
Fixed Rate 3,790,000 3,790,000 7.17% 7.9
Capped to Maturity, Currently "In
the Money" 63,000 63,000 6.14% 1.1
Floating Rate Debt 70,000 70,000 5.59% 1.1
--------- --------- ----- ---
Subtotal 3,923,000 3,923,000 6.07% 7.6
CPI Merger Facility 450,000 450,000 5.59% 1.2
CPI Merger Facility (Swapped) 500,000 500,000 5.68% 1.7
Revolving Corporate Credit Facility 201,000 201,000 5.51% 0.7
Revolving Corporate Credit Facility
(Hedged) 140,000 140,000 5.51% 0.7
--------- --------- ----- ---
Total Unsecured Debt 5,214,000 5,214,000 6.75% 6.0
Adjustment to Fair Market Value -
Fixed Rate 11,279 11,571 N/A N/A
Adjustment to Fair Market Value -
Variable Rate 1,178 1,186 N/A N/A
--------- --------- ----- ---
Consolidated Mortgages and Other
Indebtedness 8,263,590 8,133,819 6.92% 5.6
========= ========= ===== ===
Joint Venture Mortgage Indebtedness
- -----------------------------------
Fixed Rate 2,107,704 879,462 7.48% 7.5
Other Hedged Debt 385,984 138,403 5.65% 4.0
Floating Rate Debt 291,736 128,576 5.90% 2.8
--------- --------- ----- ---
Subtotal 2,785,424 1,146,441 7.02% 6.5
Adjustment to Fair Market Value -
Fixed Rate 20,307 10,154 N/A N/A
--------- --------- ----- ---
Joint Venture Mortgages and Other
Indebtedness 2,805,731 1,156,594 7.02% 6.5
========= ========= ===== ===
SPG's Share of Total Indebtedness
--------- ----- ---
9,290,413 6.93% 5.7
--------- ----- ---
</TABLE>
19 of 38
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of March 31, 1999
(In thousands)
<TABLE>
<CAPTION>
- ----------------------------------- ----------- ----------- ------------ ------------ -------------
SPG's Weighted Avg
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- ----------------------------------- ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Consolidated Indebtedness
Fixed Rate Mortgage Debt:
- -------------------------
Ingram Park Mall - 2 12/30/99 9.63% 7,000 7,000
Ingram Park Mall - 1 12/30/99 8.10% 47,794 47,794
Barton Creek Square 12/30/99 8.10% 61,853 61,853
La Plaza Mall 12/30/99 8.25% 49,325 49,325
------------ ------------
Subtotal 1999 165,972 165,972 8.21%
Florida Mall, The - 2 2/28/00 6.65% 90,000 90,000
South Shore (3) 4/1/00 9.75% 67 67
Windsor Park Mall - 1 6/1/00 8.00% 5,753 5,753
Trolley Square - 1 7/23/00 5.81% 19,000 17,100
Bloomingdale Court 12/1/00 8.75% 27,359 27,359
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 255,639 253,739 7.79%
Biltmore Square 1/1/01 7.15% 26,458 26,458
Chesapeake Square 1/1/01 7.28% 47,818 47,818
Port Charlotte Town Center - 1 1/1/01 7.28% 52,578 52,578
Great Lakes Mall - 1 3/1/01 6.74% 52,429 52,429
Great Lakes Mall - 2 3/1/01 7.07% 8,458 8,458
J.C. Penney/Net Leased (Norfolk) (3) 11/30/01 8.50% 856 856
------------ ------------
Subtotal 2001 188,596 188,596 7.11%
Lima Mall 3/1/02 7.12% 18,834 18,834
Columbia Center 3/15/02 7.62% 42,184 42,184
Northgate Shopping Center 3/15/02 7.62% 78,771 78,771
Tacoma Mall 3/15/02 7.62% 92,164 92,164
J.C. Penney/Net Leased
(Chattanooga) (3) 5/31/02 6.80% 793 793
River Oaks Center 6/1/02 8.67% 32,500 32,500
North Riverside Park Plaza - 1 9/1/02 9.38% 3,883 3,883
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% 103,609 103,609
Principal Mutual Mortgages - Pool 2 (2) 9/15/02 6.77% 137,789 137,789
Northlake Mall (3) 12/1/02 8.00% 1,008 1,008
Palm Beach Mall (4) 12/15/02 7.50% 50,215 50,215
------------ ------------
Subtotal 2002 565,367 565,367 7.32%
Century III Mall -1 7/1/03 6.78% 66,000 66,000
Miami International Mall 12/21/03 6.91% 46,346 27,807
------------ ------------
Subtotal 2003 112,346 93,807 6.82%
</TABLE>
20 of 38
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of March 31, 1999
(In thousands)
<TABLE>
<CAPTION>
- ----------------------------------- ----------- ----------- ------------ ------------ -------------
SPG's Weighted Avg
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- ----------------------------------- ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Battlefield Mall - 1 1/1/04 7.50% 48,478 48,478
Battlefield Mall - 2 1/1/04 6.81% 44,923 44,923
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
------------ ------------
Subtotal 2004 183,402 145,251 7.15%
Tippecanoe Mall - 1 1/1/05 8.45% 46,066 46,066
Tippecanoe Mall - 2 1/1/05 6.81% 15,973 15,973
Melbourne Square 2/1/05 7.42% 39,225 39,225
Cielo Vista Mall - 2 11/1/05 8.13% 1,775 1,775
------------ ------------
Subtotal 2005 103,039 103,039 7.80%
Treasure Coast Square 1/1/06 7.42% 53,026 53,026
Gulf View Square 10/1/06 8.25% 37,495 37,495
Paddock Mall 10/1/06 8.25% 29,821 29,821
------------ ------------
Subtotal 2006 120,342 120,342 7.88%
Cielo Vista Mall - 1 5/1/07 9.38% 55,134 55,134
Cielo Vista Mall - 3 5/1/07 6.76% 38,899 38,899
Lakeline Mall 5/1/07 7.65% 72,746 72,746
McCain Mall - 1 5/1/07 9.38% 25,691 25,691
McCain Mall - 2 5/1/07 6.76% 17,953 17,953
Valle Vista Mall - 1 5/1/07 9.38% 34,028 34,028
Valle Vista Mall - 2 5/1/07 6.81% 7,979 7,979
University Park Mall 10/1/07 7.43% 59,500 35,700
CMBS Loan - Fixed Component 12/15/07 7.31% 175,000 175,000
------------ ------------
Subtotal 2007 486,931 463,131 7.81%
Randall Park Mall - 2 7/11/08 7.33% 35,000 35,000
------------ ------------
Subtotal 2008 35,000 35,000 7.33%
College Mall - 2 1/1/09 6.76% 11,979 11,979
Greenwood Park Mall - 2 1/1/09 6.76% 61,893 61,893
College Mall - 1 1/1/09 7.00% 42,210 42,210
Greenwood Park Mall - 1 1/1/09 7.00% 35,352 35,352
Towne East Square - 1 1/1/09 7.00% 55,807 55,807
Towne East Square - 2 1/1/09 6.81% 24,957 24,957
------------ ------------
Subtotal 2009 232,199 232,199 6.90%
Windsor Park Mall - 2 5/1/12 8.00% 8,835 8,835
------------ ------------
Subtotal 2012 8,835 8,835 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% 39,413 39,413
------------ ------------
Subtotal 2026 39,413 39,413 8.63%
Keystone at the Crossing 7/1/27 7.85% 64,042 64,042
------------ ------------
Subtotal 2027 64,042 64,042 7.85%
------------ ------------ -------------
Total Consolidated Fixed Rate Mortgage Debt 2,576,125 2,493,736 7.42%
============ ============ =============
</TABLE>
21 of 38
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of March 31, 1999
(In thousands)
<TABLE>
<CAPTION>
-----------------------------------
SPG's Weighted Avg
- -------------------------------------- ------------- ---------- ----------------
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- -------------------------------------- ------------- ---------- ---------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
Variable Rate Mortgage Debt:
- ---------------------------
Jefferson Valley Mall 1/12/00 5.49% 50,000 50,000
White Oaks Mall 3/1/00 6.28% 16,500 9,062
Eastgate Consumer Mall 3/31/00 5.94% 22,929 22,929
Trolley Square 7/23/00 6.44% 8,141 7,327
---------------- --------------
Subtotal 2000 97,570 89,318 5.76%
Crystal River 1/1/01 6.94% 15,292 15,292
Orland Square 9/1/01 7.74% 50,000 50,000
---------------- --------------
Subtotal 2001 65,292 65,292 7.55%
Highland Lakes Center 3/1/02 6.44% 14,377 14,377
Mainland Crossing 3/31/02 6.44% 2,226 2,226
Lakeline Plaza - 1 6/6/02 5.31% 31,000 31,000
---------------- --------------
Subtotal 2002 47,603 47,603 5.70%
Richmond Towne Square (7) 7/15/03 5.94% 21,296 21,296
Shops @ Mission Viejo (7) 9/14/03 5.99% 60,249 60,249
Arboretum (7) 12/1/03 6.44% 34,000 30,600
---------------- --------------
Subtotal 2003 115,545 112,145 6.10%
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
---------------- --------------
Subtotal 2004 84,999 48,969 6.19%
CMBS Loan - Variable Component 12/15/07 6.16% 50,000 50,000
---------------- --------------
Subtotal 2007 50,000 50,000 6.16%
---------------- -------------- -----------------
Total Variable Rate Mortgage Debt 461,008 413,326 6.23%
---------------- -------------- -----------------
-------------- -----------------
Total Consolidated Mortgage Debt 2,907,062 7.25%
-------------- -----------------
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%
Unsecured Notes - CPI 2 (3) 4/1/03 7.05% 100,000 100,000
SPG, LP (Bonds) 6/15/03 6.63% 375,000 375,000
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
SPG, LP (Bonds) 2/9/04 6.75% 300,000 300,000
SPG, LP (Bonds) 7/15/04 6.75% 100,000 100,000
Unsecured Notes - CPI 3 (3) 8/15/04 7.75% 150,000 150,000
---------------- --------------
Subtotal 2004 700,000 700,000 6.96%
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 (MTN) 6/24/05 7.13% 100,000 100,000
SPG, LP (Bonds) 10/27/05 6.88% 150,000 150,000
---------------- --------------
Subtotal 2005 660,000 660,000 6.98%
</TABLE>
22 of 38
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of March 31, 1999
(In thousands)
<TABLE>
<CAPTION>
-----------------------------------
SPG's Weighted Avg
- -------------------------------------- ------------- ---------- ----------------
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- -------------------------------------- ------------- ---------- ---------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
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 (MOPPRS) 6/15/08 7.00% 200,000 200,000
---------------- --------------
Subtotal 2008 200,000 200,000 7.00%
SPG, LP (Bonds) 2/9/09 7.13% 300,000 300,000
SPG, LP (Bonds) 7/15/09 7.00% 150,000 150,000
---------------- --------------
Subtotal 2009 450,000 450,000 7.08%
Unsecured Notes - CPI 4 (3) 9/1/13 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%
---------------- --------------
Total Unsecured Fixed Rate Debt 3,790,000 3,790,000 7.17%
================ ==============
Variable Rate Unsecured Debt:
- ----------------------------
Corporate Revolving Credit Facility 9/27/99 5.51% 341,000 341,000
---------------- --------------
Subtotal 1999 341,000 341,000 5.51%
SPG, L.P. Unsecured Loan (6) 1/31/00 5.59% 70,000 70,000
SPG, L.P. Unsecured Loan 1/31/00 6.14% 63,000 63,000
CPI Merger Facility - 2 Chase (5) 3/24/00 5.59% 450,000 450,000
(1.4B)
CPI Merger Facility - 3 Chase (5) 9/24/00 5.68% 500,000 500,000
(1.4B)
---------------- --------------
Subtotal 2000 1,083,000 1,083,000 5.66%
---------------- --------------
Total Unsecured Variable Rate Debt 1,424,000 1,424,000 5.63%
================ ==============
--------------
Total Unsecured Debt 5,214,000 6.75%
==============
Net Discount on Fixed-Rate 11,279 11,571 N/A
Indebtedness
Net Premium on Variable-Rate 1,178 1,186 N/A
Indebtedness
-------------- -----------------
Total Consolidated Debt 8,263,590 8,133,819 6.92%
-------------- -----------------
Joint Venture Indebtedness
Fixed Rate Mortgage Debt:
- ------------------------
Northfield Square 4/1/00 9.52% 23,983 23,983
Coral Square 12/1/00 7.40% 53,300 26,650
---------------- --------------
Subtotal 2000 77,283 50,633 8.40%
Highland Mall - 2 (3) 10/1/01 8.50% 270 135
Highland Mall - 3 (3) 11/1/01 9.50% 2,552 1,276
---------------- --------------
Subtotal 2001 2,822 1,411 9.40%
</TABLE>
23 of 38
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of March 31, 1999
(In thousands)
<TABLE>
<CAPTION>
------------ -------------
SPG's Weighted Avg
- ---------------------------------------- -------- -------- ------------
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- ---------------------------------------- -------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Crystal Mall (3) 2/1/03 8.66% 50,133 25,066
Avenues, The 5/15/03 8.36% 57,509 14,377
Lakeland Square 12/22/03 7.26% 52,279 26,140
--------- -------
Subtotal 2003 159,922 65,583 8.04%
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% 205,805 102,902
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% 17,680 6,055
Ridgewood Court 11/30/05 7.22% 7,980 2,793
Royal Eagle Plaza 11/30/05 7.22% 7,920 2,772
Village Park Plaza 11/30/05 7.22% 8,960 3,136
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 305,805 134,227 8.39%
Seminole Towne Center 1/1/06 6.88% 70,500 31,725
CMBS Loan - Fixed Component (8) 5/1/06 7.40% 300,000 150,000
Great Northeast Plaza 6/1/06 9.04% 17,636 8,818
Smith Haven Mall 6/1/06 7.86% 115,000 28,750
--------- -------
Subtotal 2006 503,136 219,293 7.45%
Town Center at Cobb (3) 4/1/07 7.54% 50,663 25,332
Gwinnett Place (3) 4/1/07 7.54% 39,765 19,882
--------- -------
Subtotal 2007 90,428 45,214 7.54%
Metrocenter (3) 2/28/08 8.45% 31,115 15,558
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
Ontario Mills - 5 11/2/08 6.75% 144,624 36,156
Source, The - 2 11/6/08 6.65% 124,000 31,000
--------- -------
Subtotal 2008 730,739 245,505 6.76%
Highland Mall - 1 (3) 12/1/09 9.75% 7,808 3,904
Ontario Mills - 4 (9) 12/28/09 0.00% 4,762 1,190
--------- -------
Subtotal 2009 12,570 5,095 7.47%
Mall of Georgia (3) 7/1/10 7.09% 170,000 85,000
--------- -------
Subtotal 2010 170,000 85,000 7.09%
--------- ------- -----
Total Joint Venture Fixed Rate 2,107,705 879,462 7.48%
--------- ------- -----
Mortgage Debt
</TABLE>
24 of 38
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of March 31, 1999
(In thousands)
<TABLE>
<CAPTION>
------------ -------------
SPG's Weighted Avg
- ---------------------------------------- -------- -------- ------------
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- ---------------------------------------- -------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Variable Rate Mortgage Debt:
- ---------------------------
Dadeland Mall (7) 12/10/00 5.64% 140,000 70,000
------- ---------
Subtotal 2000 140,000 70,000 5.64%
Tower Shops, The (6) 3/13/01 6.14% 13,400 6,700
------- ---------
Subtotal 2001 13,400 6,700 6.14%
Arizona Mills 2/1/02 6.24% 140,984 37,101
Shops at Sunset Place, The (7) 6/30/02 6.19% 93,796 35,173
------- ---------
Subtotal 2002 234,780 72,274 6.21%
CMBS Loan - Floating Component (8) 5/1/03 5.44% 185,000 92,500
Concord Mills (7) 12/2/03 6.29% 44,540 16,703
------- ---------
Subtotal 2003 229,540 109,203 5.57%
Circle Centre Mall 1/31/04 5.38% 60,000 8,802
------- ---------
Subtotal 2004 60,000 8,802 5.38%
Total Joint Venture Variable Rate ------- --------- --------
Debt 677,720 266,979 5.77%
======= ========= --------
CMBS Loan - Fixed Premium 20,307 10,154
--------- -----
Total Joint Venture Debt 1,156,594 7.02%
--------- -----
--------- -----
SPG's Share of Total Indebtedness 9,290,413 6.93%
--------- -----
</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) This Facility consist of (i) a $450 million 18-month term loan, and
(ii) a $500 million 24-month term loan. Interest rate protection
agreements relating to $500 million of the $1.4 billion were obtained
on September 24, 1998. Under these agreements LIBOR is swapped at a
weighted average rate of 5.057%.
(6) A one-year options exists to extend maturity.
(7) Includes applicable extensions available at Simon Group's option.
(8) 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 Simon Group's share is $242 million. A weighted
average rate is used.
(9) Notes for purchase of land from Ontario Redevelopment Agency at 6%
commencing January 2000.
25 of 38
<PAGE>
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of March 31, 1999
(In thousands)
<TABLE>
<CAPTION>
- ------------------------- ----------- ------------ ------------- ----------- ------------ ------------- ----------------------------
SPG's
Principal SPG Share of Interest Terms of Terms of
Property Maturity Balance Owner-ship Loan Rate Variable Interest Rate Protection
Name Date 03/31/99 % Balance 03/31/99 Rate Agreement
- ------------------------- ----------- ------------ ------------- ----------- ------------ ------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated Properties:
Secured Debt:
Eastgate Consumer Mall 3/31/00 22,929 100.00% 22,929 5.937% LIBOR + 1.000%
White Oaks Mall 3/1/00 16,500 54.92% 9,062 6.276% LIBOR + 1.250% 90-day LIBOR set on
February 26, 1999
Jefferson Valley Mall 1/12/00 50,000 100.00% 50,000 5.487% LIBOR + 0.550% LIBOR Capped at
8.70% through maturity
Trolley Square 7/23/00 8,141 90.00% 7,327 7.219% LIBOR + 1.500%
Crystal River 1/1/01 15,292 100.00% 15,292 6.937% LIBOR + 2.000%
Richmond Towne Square 7/15/03 21,296 100.00% 21,296 5.937% LIBOR + 1.000%
Orland Square 9/1/01 50,000 100.00% 50,000 7.742% LIBOR + 0.500% LIBOR Swapped at
7.24% through maturity
Shops @ Mission Viejo 9/14/03 60,249 100.00% 60,249 5.987% LIBOR + 1.050%
Arboretum 12/1/03 34,000 90.00% 30,600 6.437% LIBOR + 1.500%
Highland Lakes Center 3/1/02 14,377 100.00% 14,377 6.437% LIBOR + 1.500%
Lakeline Plaza - 1 6/6/02 31,000 100.00% 31,000 5.312% LIBOR + 0.375%
Mainland Crossing 3/31/02 2,226 100.00% 2,226 6.437% LIBOR + 1.500%
Forum Phase I - Class A-2 5/15/04 44,385 60.00% 26,631 6.190% LIBOR + 0.300% Through an interest
rate protection
agreement, effectively
fixed at an
all-in-one rate
of 6.19%
Forum Phase II - Class A-2 5/15/04 40,614 55.00% 22,338 6.190% LIBOR + 0.300% Through an interest
rate protection
agreement, effectively
fixed at an
all-in-one rate of
6.19%
CMBS Loan - Variable 12/15/07 50,000 100.00% 50,000 6.155% LIBOR + 0.365% Through an interest
Component rate protection
agreement, effectively
fixed at an
all-in-one rate of
6.16%
Total Consolidated
--------- ---------
Secured Debt 461,008 413,326
========= =========
Unsecured Debt:
SPG, L.P. Unsecured Loan 1/31/00 70,000 100.00% 70,000 5.587% LIBOR + 0.650%
SPG, L.P. Unsecured Loan 1/31/00 63,000 100.00% 63,000 6.140% LIBOR + 0.650% Through an interest
rate protection
agreement, effectively
fixed at an
all-in-one rate of
6.14%
CPI Merger Facility - 2
Chase (1.4B) 3/24/00 450,000 100.00% 450,000 5.589% LIBOR + 0.650%
CPI Merger Facility - 3
Chase (1.4B) 9/24/00 500,000 100.00% 500,000 5.680% LIBOR + 0.650% LIBOR Swapped at an
all-in-one weighted
average rate of 5.68%.
Unsecured Revolving
Credit Facility - UBS
(1.25B) 9/27/99 341,000 100.00% 341,000 5.509% LIBOR + 0.650% See Footnote (1)
Total Consolidated
--------- ---------
Unsecured Debt 1,424,000 1,424,000
========= =========
Net Premium on
Variable-Rate
Indebtedness 1,178 1,186
Consolidated Variable
--------- ---------
Rate Debt 1,886,186 1,838,512
========= =========
</TABLE>
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<PAGE>
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of March 31, 1999
(In thousands)
<TABLE>
<CAPTION>
--------- ------------ -------- --------- ------------------------
Principal SPG's Interest Terms of Terms of
-------- -------- ------------
Property Maturity Balance SPG Share of Rate Variable Interest Rate Protection
Name Date 03/31/99 Owner-ship % Loan Balance 03/31/99 Rate Agreement
-------- -------- --------- ------------ ------------ -------- --------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Joint Venture Properties:
Tower Shops, The 3/13/01 13,400 50.00% 6,700 6.137% LIBOR + Two one-year extensions
1.200% to extend maturity.
Dadeland Mall 12/10/00 140,000 50.00% 70,000 5.637% LIBOR +
0.700%
Shops at Sunset Place, 6/30/02 93,796 37.50% 35,173 6.187% LIBOR + See Footnote (2)
The 1.250%
Arizona Mills 2/1/02 140,984 26.32% 37,101 6.237% LIBOR + LIBOR Capped at 9.50%
1.300% to maturity
Concord Mills 12/2/03 44,540 37.50% 16,703 6.287% LIBOR +
1.350%
CMBS Loan - Floating 5/1/03 185,000 50.00% 92,500 5.435% See The Operating Partner-
ship took assignment of
Component
Circle Centre Mall 1/31/04 60,000 14.67% 8,802 5.377% LIBOR + LIBOR Capped at 8.81%
0.440% through maturity
--------- ---------
Total Joint Venture
Properties 677,720 266,979
========= =========
Total Variable Mortgage
========= =========
and Other Indebtedness 2,563,906 2,105,491
========= =========
</TABLE>
Footnotes:
(1) Subject to an 11.53% LIBOR cap on
$90M and a 16.77% LIBOR cap on $50M.
(2) Rate can be reduced based upon
project performance.
(3) Represents the weighted average interest rate.
The following table summarizes variable rate debt:
<TABLE>
<CAPTION>
Total SPG Share
---------------- ----------------
<S> <C> <C>
Swapped debt 550,000 550,000
Capped debt "in the money" 197,999 161,969
Other hedged variable rate debt 575,984 328,403
Unhedged variable rate debt 1,239,923 1,065,119
2,563,906 2,105,491
================ ================
</TABLE>
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<PAGE>
SIMON PROPERTY GROUP
New Development Activities
As of March 31, 1999
<TABLE>
<CAPTION>
Simon Projected Non-Anchor
Group's Actual/ Cost Sq. Footage
Mall/ Ownership Projected (in millions) Leased/ GLA
Location Percentage Opening Committed/(1)/ (sq. ft.)
- ------------------------ ---------- --------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
- ------------------------
Projects Recently Opened
- ------------------------
Shops at Sunset Place 37.5% 1/99 $ 150 95% 510,000
South Miami, FL
Anchors/Major Tenants: AMC 24 Theatre, NIKETOWN, Barnes & Noble, IMAX 3D Theatre, Z Gallerie,
Virgin Megastore, GameWorks, FAO Schwarz, Old Navy, Urban Outfitters
- ------------------------ ---------------------------------------------------------------------------
- ---------------------------
Projects Under Construction
- ---------------------------
The Mall of Georgia 50% 8/99 $ 246 80% 1,600,000
Buford, Georgia
(Atlanta)
Anchors/Major Tenants: Nordstrom (opening 3/00), Dillard's, Lord & Taylor, JCPenney, Galyan's, Bed
Bath & Beyond, Haverty's, Barnes & Noble, Regal Theatre, IMAX
- ------------------------ ---------------------------------------------------------------------------
The Mall of Georgia 50% 8/99 $ 38 95% 441,000
Crossing
Buford, GA
(Atlanta)
Anchors/Major Tenants: Target, Nordstrom Rack, Best Buy, Uptons, Staples, TJMaxx & More
- ------------------------ ---------------------------------------------------------------------------
Concord Mills 37.5% 9/99 $ 216 70% 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, Jillian's, Alabama Grill, Group USA, Sun
& Ski, For Your Entertainment, Embassy Suites Hotel, Host Marriott Services
- ------------------------ ---------------------------------------------------------------------------
The Shops at 100% 11/99 $ 42 72% 341,000
Northeast Mall
Hurst, TX
Anchors/Major Tenants: Michaels, OfficeMax, PetsMart, TJMaxx, Bed Bath & Beyond, Party City, Just
For Feet, Nordstrom Rack, Logan's Roadhouse
- ------------------------ ---------------------------------------------------------------------------
Waterford Lakes Town 100% 11/99 and $ 84 84% 920,000
Center 11/00 (Phase I)
Orlando, FL
Anchors/Major Tenants: Regal 20-Plex Theatre, Super Target, TJMaxx, Ross Dress for Less, Barnes &
Noble, Waves Music, Party City, Bed Bath & Beyond, OfficeMax
- ------------------------ ---------------------------------------------------------------------------
Orlando Premium 50% Summer 2000 $ 91 (2) 433,000
Outlets
Orlando, FL
Anchors/Major Tenants: To be announced
</TABLE>
(1) Community Center leased/committed percentage includes owned anchor GLA.
(2) Leasing still in preliminary stage.
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<PAGE>
SIMON PROPERTY GROUP
Significant Renovation/Expansion Activities
As of March 31, 1999
<TABLE>
<CAPTION>
Projected Total New or
SPG Actual/ Cost Existing Incremental
Mall/ Ownership Projected (in GLA GLA
Location Percentage Opening millions) (sq. ft.) (sq. ft.)
- -------------------- ---------- --------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Brunswick Square 100% 11/99 $ 19 736,000 55,000
East Brunswick, NJ
Project Description: New Barnes & Noble, MEGA Movies Theatre expansion and police substation,
Big Box GLA expansion, renovation with new food court, Macy's covenant
extension
- -------------------- ---------- --------- --------- ---------- -----------
Florida Mall 50% 11/99 $ 80 1,120,000 608,000
Orlando, FL
Project Description: New Burdines plus one future anchor, mall GLA expansion and renovation,
food court renovation, expansions of Dillard's, Parisian and JCPenney
- -------------------- ---------- --------- --------- ---------- -----------
LaPlaza Mall 100% 11/99 $ 36 988,000 215,000
McAllen, TX and 11/00
Project Description: Renovation of existing center (opening 11/99); expansion of mall GLA and
new Dillard's store; JCPenney expansion and new small shops retrofitted
from the existing Dillard's store
- -------------------- ---------- --------- --------- ---------- -----------
The Shops at 100% 11/99 $146 817,000 427,000
Mission Viejo
Mission Viejo, CA
Project Description: New Saks Fifth Avenue and Nordstrom; Robinson-May expansion; new parking
structure and renovation of the existing parking structure; small shop
expansion; mall renovation and food court addition (opening 9/00)
- -------------------- ---------- --------- --------- ---------- -----------
North East Mall 100% 11/99 $103 1,141,000 308,000
Hurst, TX
Project Description: Mall expansion and renovation; JCPenney remodel and expansion; recapture
two Dillard's pads and replace with new Nordstrom and Saks Fifth Avenue;
new Dillard's and one additional anchor
- -------------------- ---------- --------- --------- ---------- -----------
Palm Beach Mall 100% 11/99 $ 34 1,205,000 61,000
West Palm Beach, FL
Project Description: New Dillard's (to open 3/00); operating covenant extensions and renovations
of Burdines, JCPenney and Sears; new Borders and small shops; new Old Navy
and mall renovation
- -------------------- ---------- --------- --------- ---------- -----------
Richmond Town Square 100% 11/99 $ 59 873,000 10,000
Cleveland, OH
Project Description: New Kaufmann's, JCPenney remodel and renovation (opened 11/98); new Sony
Cinema, Sears remodel and new food court
- -------------------- ---------- --------- --------- ---------- -----------
</TABLE>
29 of 38
<PAGE>
<TABLE>
<CAPTION>
Projected Total New or
SPG Actual/ Cost Existing Incremental
Mall/ Ownership Projected (in GLA GLA
Location Percentage Opening millions) (sq. ft.) (sq. ft.)
- -------------------- ---------- --------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Tacoma Mall 100% 11/99 $ 12 1,286,000 N/A
Tacoma, WA
Project Description: Mall renovation with new food court
- -------------------- ---------- --------- --------- ---------- -----------
Town Center at Boca 100% 11/00 $ 66 1,327,000 228,000
Raton Boca Raton, FL
Project Description: New Nordstrom, relocation of Saks Fifth Avenue into old Mervyn's, Lord &
Taylor and Bloomingdale's expansions; mall renovation with small shop
expansion; two new parking structures
</TABLE>
30 of 38
<PAGE>
SIMON PROPERTY GROUP
Capital Expenditures
For the Three Months Ended March 31, 1999
(In millions)
<TABLE>
<CAPTION>
Joint Venture Properties
------------------------
Simon
Consolidated Group's
Properties Total Share
---------- ----- -----
<S> <C> <C> <C>
New Developments $18.9 $53.7 $39.4
Renovations and Expansions 55.7 15.7 6.8
Tenant Allowances-Retail 13.9 3.7 1.8
Tenant Allowances-Office .4 - -
Capital Expenditures
Recoverable from Tenants .5 .3 .1
Other /(1)/ - .3 .1
----- ----- -----
Totals $89.4 $73.7 $48.2
===== ===== =====
</TABLE>
(1) Primarily represents capital expenditures not recovered from tenants.
31 of 38
<PAGE>
SIMON PROPERTY GROUP
Gains on Land Sales
For the Three Months Ended March 31, 1999 and 1998
(In millions)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1999 1998
----- -----
<S> <C> <C>
Consolidated Properties $ 4.6 $ 0.3
Simon Group's Share of
Unconsolidated Entities 2.9 -
----- -----
Totals $ 7.5 $ 0.3
===== =====
</TABLE>
32 of 38
<PAGE>
SIMON PROPERTY GROUP
Conference Text
May 5, 1999
Forward Looking Statement
- -------------------------
Good morning and welcome to the Simon Property Group first quarter 1999 earnings
teleconference call.
Please be aware that statements in this teleconference call that are not
historical may be deemed forward-looking statements within the meaning of the
federal securities laws. Although the Company believes that 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
- ----------------
Good morning. We are very pleased with our accomplishments for the first
quarter, highlighted by the following activities:
. We grew FFO per share 8% to $0.68.
. We increased occupancy in the regional mall portfolio by 250 basis points to
88.6%, as compared to 86.1% at March 31, 1998.
. We opened a unique highly successful specialty center, The Shops at Sunset
Place in South Miami, Florida.
. We announced strategic alliances with Time Inc. Custom Publishing and AT&T as
continuation of our Simon Brand Venture initiatives.
. We launched our branding campaign.
. We announced the $1.725 billion acquisition of New England Development; and
. We continued construction on 5 million square feet of exciting new
development projects, including new projects in Charlotte, Orlando and
Atlanta.
Financial and Operational Results
- ---------------------------------
Our financial and operational results for the quarter ended March 31, 1999 are
as follows:
For the quarter...
. FFO on a per share basis increased 8% to $0.68 per share in 1999 from $0.63
per share in 1998.
33 of 38
<PAGE>
SIMON PROPERTY GROUP
Conference Text
May 5, 1999
. FFO of the Simon Portfolio was $158.0 million, an increase of 45% or $49.1
million, over the $108.9 million reported in 1998.
. Total revenue increased 49% to $446.1 million as compared to $300.3 million in
1998.
Operating statistics for the regional mall portfolio for the quarter ended March
31, 1999 are as follows:
. Occupancy was 88.6%, an increase of 250 basis points over the same period in
1998.
. Average base rent was $25.95 per square foot, an increase of 13%.
. Total sales per square foot for the first quarter increased 11%, to $347 per
square foot as compared to the prior year. The increase for "comparable
properties," that is properties owned for at least one year, was 4%.
. Comparable sales per square foot, i.e. sales of tenants who have been in place
for at least 24 months, increased 12%, to $360. The increase for "comparable
properties" was 5%.
. The average initial base rent for new mall stores opened in 1999 was $30.16
per square foot, an increase of $6.99, or 30% over the tenants who closed or
whose leases expired.
Two significant capital market transactions impacted FFO in the first quarter:
. In February, the Company sold $600 million of fixed rate senior unsecured
notes. The two tranches--at $300 million each--mature in 2004 and 2009 and
bear interest at 6 3/4% and 7 1/8%, respectively. Proceeds were used primarily
to pay down the acquisition and revolving credit facilities.
. Effective in late February, PGGM (a Dutch pension fund) converted their 6.5%
Series A convertible preferred stock into SPG common stock. This conversion
resulted in the issuance of 5.7 million shares of common stock to PGGM. PGGM
is now one of SPG's largest common shareholders and we look forward to a long
and mutually beneficial relationship.
Both of these are positive events. We took advantage of favorable debt market
conditions to fully retire the initial tranche of our $1.4 billion CPI
acquisition facility five months early, and PGGM demonstrated their belief in
the long-term potential of the Company by converting their ownership position to
common stock. The cumulative impact of these events was over $0.01 dilutive in
the first quarter.
Same property NOI growth for 1999 was approximately 6%. This growth rate was
positively impacted by growth in rents, occupancy, and tenant sales as well as
by our SBV initiatives and the positive effect of our redevelopment efforts.
34 of 38
<PAGE>
SIMON PROPERTY GROUP
Conference Text
May 5, 1999
Disposition Subsequent to Quarter-End
- -------------------------------------
On April 15th, the Company sold Three Dag Hammarskjold, the former CPI
headquarters building in New York City. This transaction is neutral to earnings
and is in keeping with the Company's strategy to dispose of non-core assets. We
are also proceeding with efforts to dispose of a 15 mall portfolio and our
remaining office assets.
New Development and Redevelopment Activities
- --------------------------------------------
In January we opened The Shops at Sunset Place in South Miami, Florida. This
510,000 square foot specialty center is currently 95% leased. Virtually all of
the anchor tenants--and many of the specialty tenants--are new to the South
Florida market. Z Gallerie is new to the market and doing very well. AMC
Theatres is in the top 64 in the country and was the #1 producer last week in
their region for AMC. GameWorks has fluctuated between #1 and #2 in their chain
since opening. Both FAO Schwarz and IMAX are performing substantially above
their plan.
The next new Simon development project scheduled to open in 1999 is the Mall of
Georgia. Opening in August, this project combines traditional mall anchors and
retailers with a 20 screen Regal Theatre complex, IMAX and big box retailers
such as Galyan's, Haverty's and Bed Bath & Beyond incorporated into the mall
structure. The open-air village component features specialty retailers such as
Barnes & Noble, Jillian's, Restoration Hardware and Harold's.
As part of this master planned retail complex, a 441,000 square foot power
center anchored by Target, Uptons, TJMaxx & More, Best Buy, Nordstrom Rack and
Staples will also open in August. The response from retailers regarding this
combination of mall and main street retailing has been very positive.
The size, scope and variety in type of projects included in our pipeline
demonstrates our commitment as a retail real estate developer and our capacity
to conceive and develop retail formats across all property types. In 1999 we
will place over five million square feet of GLA at new development projects into
service in one specialty center, one regional mall, one Mills value-oriented
super-regional mall and two power centers.
35 of 38
<PAGE>
SIMON PROPERTY GROUP
Conference Text
May 5, 1999
During the last five months of 1999 we will open The Mall of Georgia and The
Mall of Georgia Crossing in the Atlanta suburb of Buford; Concord Mills in the
Charlotte suburb of Concord; The Shops at North East Mall in Hurst, Texas; and
Waterford Lakes Town Center in Orlando, Florida.
The last five months of 1999 will be our most active period for development
openings since our IPO, especially when you factor in the completion of 5 major
redevelopment projects at: Florida Mall in Orlando, The Shops at Mission Viejo
in Mission Viejo, California, North East Mall in Hurst, Texas, Palm Beach Mall
in West Palm Beach, Florida, and Richmond Town Square in Cleveland, Ohio.
We're very excited about our development pipeline and the numerous projects that
will be opening in 1999 and 2000. All are proceeding on time and on budget and
are detailed in the press release.
Acquisition Activities
- ----------------------
In February, we announced our intent to acquire the New England Development
Company or NED. This portfolio consists of 14 regional malls--ten in
Massachusetts; two in New Hampshire; and one each in Connecticut and Virginia--
comprising 10.6 million square feet. Simon will also assume management
responsibilities for these properties.
This acquisition provides a strategic fit with Simon's existing ownership of
Burlington Mall and South Shore Plaza, giving us a preeminent franchise in the
Boston and New England markets. These are highly productive centers and we
expect this transaction to be accretive from day one.
We have signed a letter of intent regarding the formation of a joint venture to
acquire the NED portfolio. Simon's ultimate ownership percentage will be
between 30 and 50 percent. Integration and transaction activities are also well
underway and proceeding smoothly.
Completion of the acquisition is contingent upon the satisfaction of certain
closing conditions and if those conditions are met, the transaction is expected
to be completed during the third quarter.
In March, we purchased the remaining 50% of Century III Mall in Pittsburgh,
Pennsylvania. Century III is 89% leased and generates sales in excess of $300
per square foot. With this acquisition and our existing ownership of Ross Park
Mall and South Hills Village, Simon now owns 100% of three of the four regional
malls in Pittsburgh. The implied cap rate on this acquisition was approximately
10%.
36 of 38
<PAGE>
SIMON PROPERTY GROUP
Conference Text
May 5, 1999
Simon Brand Ventures
- --------------------
During the first quarter, we announced strategic alliances with two more
significant companies--Time Inc. Custom Publishing and AT&T.
Simon and Time Inc. have joined forces to publish "S", the first national
lifestyle magazine targeted to mall shoppers. "S" is now distributed monthly at
over 140 SPG properties, with an estimated circulation of 2.3 million copies per
month. "S" balances national and local lifestyle features, promotions and other
news useful to Simon shoppers. It is a significant way for us to communicate
directly to our customer and create loyalty.
We are also partnering with AT&T in a loyalty marketing alliance, whereby AT&T
residential customers can redeem their monthly long distance service, calling
card and local toll charges in exchange for MALLPeRKS shopper loyalty points.
AT&T will reach mall customers through the "S" magazine, in-mall signage and
consumer-driven events at the mall.
SBV continues to deliver value offerings from premier brands to the Simon
shoppers. Our strategic alliances are a testament to the fact that leading
brand marketers view the mall as a strategic marketing medium.
Branding
- --------
By now I hope you've all seen and heard the commercials from our branding
campaign. We believe that we have much to offer our more than 100 million Simon
shoppers across the country and that there will be long-term profitability in
the branding proposition for all when we succeed.
What I want to make sure everyone understands is that the cost for this branding
campaign is not an "added" expense to the Company. Our malls have always had
advertising and promotional expenses. With the branding campaign, the
properties' advertising monies have been consolidated at the corporate level.
We are still spending approximately the same dollars in the same markets, but
now the ads and themes are consistent.
37 of 38
<PAGE>
SIMON PROPERTY GROUP
Conference Text
May 5, 1999
Conclusion
- ----------
. We are pleased with our first quarter results.
. Business fundamentals are very strong--the portfolio is producing significant
increases in occupancy, sales and rent.
. Construction continues on time and on budget within our development and
redevelopment pipeline.
. SBV continues to generate additional revenue through its ever-increasing
number of strategic alliances.
. The launch of our nationwide branding campaign is spreading the word that
"Simon is simply the best shopping there is."
38 of 38
