<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): November 15, 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 39 Pages
<PAGE>
Item 5. Other Events
On November 15, 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 September 30, 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:
<TABLE>
<CAPTION>
Page Number in
Exhibit No. Description This Filing
- ----------- ----------- -----------
<S> <C> <C>
99 Supplemental Information 4
as of September 30, 1999
</TABLE>
Page 2 of 39 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: November 15, 1999
SIMON PROPERTY GROUP, INC.
By: /s/ Stephen E. Sterrett
-----------------------
Stephen E. Sterrett,
Treasurer
Page 3 of 39 Pages
<PAGE>
SIMON PROPERTY GROUP
SUPPLEMENTAL INFORMATION
Table of Contents
As of September 30, 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
Rent Information 13
Lease Expirations 14-15
Debt Amortization and Maturities by Year 16
Summary of Indebtedness 17
Summary of Indebtedness by Maturity 18-24
Summary of Variable Rate Debt and Interest Rate Protection Agreements 25-26
New Development Activities 27
Significant Renovation/Expansion Activities 28
Capital Expenditures 29
Gains on Land Sales 30
Teleconference Text - November 9, 1999 31-39
</TABLE>
4 of 39
<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.
At September 30, 1999, the Company, directly or through the Operating
Partnership, owned or had an interest in 253 properties which consisted of
regional malls, community shopping centers, and specialty and mixed-use
properties containing an aggregate of 177 million square feet of gross leasable
area (GLA) in 36 states and five assets in Europe. The Company, together with
its affiliated management companies, owned or managed approximately 187 million
square feet of GLA in retail and mixed-use properties.
Effective August 27, 1999, the Company completed the initial phase of its
acquisition of a regional mall portfolio from New England Development Company
(NED). A limited liability company comprised of SPG (49%), JPMorgan Investment
Management's Strategic Property Fund (11%), New York State Teachers Retirement
System (26%) and Teachers Insurance and Annuity Association (14%) acquired 10
malls and Simon assumed management responsibilities from NED's affiliated
management company. Subsequent to quarter end, two additional NED asset closings
were completed. SPG expects to complete the acquisition of the last two NED
assets by year-end.
This package was prepared to provide (1) ownership information, (2) certain
operational information, and (3) debt information as of September 30, 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; e-mail: [email protected]
5 of 39
<PAGE>
Simon Property Group Economic Ownership Structure (1)
September 30, 1999
Simon Property Group, L.P.
233,097,055 units
------------------------------------------
SD Property Group, Inc.(2)
%
-
SPG Properties, Inc. 99.99%
100 Individual Shareholders 0.01%
-----
100.00%
------------------------------------------
37,873,965 units
------------------------------------------
SPG Properties, Inc. (2)
%
-
Simon Property Group, Inc. 99.99%
100 Individual Shareholders 0.01%
-----
100.00%
------------------------------------------
75,803,913 units
<TABLE>
<CAPTION>
---------------------------------------------------------
Simon Property Group, Inc.(2)(3)(4)
Common Shareholders Shares %
------------------- ------ -
<S> <C> <C>
Public Shareholders 168,305,255 97.0%
Simon Family 3,988,511 2.3%
DeBartolo Family 32,567 0.0%
Executive Management (5) 1,153,377 0.7%
---------- ------
173,479,710(4) 100.00%
---------------------------------------------------------
</TABLE>
54,513,818 units
---------------------------------------------------------
Limited Partners
("Limited Partners")
Unitholders Units %
----------- ----- -
Simon Family 34,584,305 53.3%
DeBartolo Family 22,222,599 34.2%
Executive Management (5) 153,498 0.2%
Other Limited Partners 7,944,957 12.3%
----------- ----
64,905,359 100.0%
--------------------------------------------------------
- ----------------------------------------------------------------
Ownership of Simon Property Group, L.P.
Simon Property Group, Inc. %
-
Public Shareholders 70.1%
Simon Family 1.7%
DeBartolo Family 0.0%
Executive Management (5) 0.5%
----
Subtotal 72.2%
-----
Limited Partners
Simon Family 14.8%
DeBartolo Family 9.5%
Executive Management (5) 0.1%
Other Limited Partners 3.4%
-----
Subtotal 27.8%
-----
Total 100.0%
- -----------------------------------------------------------------
(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.
6 of 39
<PAGE>
SIMON PROPERTY GROUP
Changes in Common Shares and Unit Ownership
For the Period from December 31, 1998 through September 30, 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 - 541,361
Conversion of Series A Preferred Stock into Common Stock - 6,080,330
Conversion of units into cash (6,473) -
Issuance of Stock for Stock Option Exercises - 82,988
Issuance of Units for NED Acquisition 729,675 -
Number Outstanding at September 30, 1999 64,905,359 173,479,710
Total Common Shares and Units Outstanding at September 30, 1999: 238,385,069(2)
Details for Diluted FFO Calculation:
- ------------------------------------
Company Common Shares Outstanding at September 30, 1999 173,479,710
Number of Common Shares Issuable Assuming Conversion of:
Series A Preferred 6.5% Convertible 2,024,051
Series B Preferred 6.5% Convertible 12,527,686
Net Number of Common Shares Issuable Assuming Exercise of Stock Options 134,854
Diluted Common Shares Outstanding at September 30, 1999 188,166,301
</TABLE>
Fully Diluted Common Shares and Units Outstanding at September 30, 1999:
253,071,660
(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 39
<PAGE>
SIMON PROPERTY GROUP
Preferred Stock Outstanding
As of September 30, 1999
($ in 000's)
<TABLE>
<CAPTION>
Number Liquidation Ticker
Issuer Description of Shares Preference $ Symbol
Convertible:
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Simon Property Group, Inc. Series A Preferred 53,271 $1,000 $ 53,271 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)
- -------------------------------------------------------------------------------------------------------------------
Preferred Units:
- -------------------------------------------------------------------------------------------------------------------
Simon Property Group, L.P. Series C 7% Cumulative 1,485,409 $ 28 $ 41,591 N/A
Convertible Preferred(5)
- ------------------------------------------------------------------------------------------------------------------
Simon Property Group, L.P. Series D 8% Cumulative 1,485,409 $ 30 $ 44,562 N/A
Redeemable Preferred (6)
- ------------------------------------------------------------------------------------------------------------------
</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.
(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, 1999, was $74.00 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) 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 September 30, 1999, was $23.625 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%.
(5) Issued in connection with the New England Development Acquisition. Each
unit/share is convertible into 0.75676 shares of common stock on or after
August 27, 2004. Each unit/share is not redeemable prior to August 27,
2009.
(6) Issued in connection with the New England Development Acquisition. Each
unit/share is not redeemable prior to August 27, 2009.
8 of 39
<PAGE>
SIMON PROPERTY GROUP
Reconciliation of Income to Funds From Operations ("FFO")
As of September 30, 1999
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
The Operating Partnership 1999 1998 1999 1998
- ------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Income Before Unusual and Extraordinary Items $ 87,125 $ 52,851 $221,851 $141,489
Plus: Depreciation and Amortization from Consolidated Properties 93,182 60,877 272,263 177,038
Less: Minority Interest Portion of Depreciation, Amortization
and Extraordinary Items (1,516) (1,780) (3,566) (5,374)
Plus: Simon's Share of Depreciation, Amortization and Extraordinary
Items from Unconsolidated Entities 17,900 19,646 59,191 50,754
Plus: Losses on Sales of Assets - 64 9,308 7,283
Less: Preferred Dividends/Distributions (16,690) (8,074) (50,518) (22,742)
(including those of subsidiary)
-------- -------- -------- --------
FFO of the Simon Portfolio $180,001 $123,584 $508,529 $348,448
-------- -------- -------- --------
Percent Increase 45.7% 45.9%
FFO of the Simon Portfolio $180,001 $123,584 $508,529 $348,448
Basic FFO per Paired Share:
- ---------------------------
Basic FFO Allocable to the Company $130,865 $ 79,841 $370,224 $222,575
Basic Weighted Average Paired Shares Outstanding 173,471 117,150 171,950 112,957
Basic FFO per Paired Share $ 0.75 $ 0.68 $ 2.15 $ 1.97
======== ======== ======== ========
Percent Increase 10.3% 9.1%
Diluted FFO per Paired Share:
- -----------------------------
Diluted FFO Allocable to the Company $140,240 $ 80,632 $399,809 $223,593
Diluted Weighted Average Number of Equivalent Paired Shares 188,094 118,810 187,917 113,775
Diluted FFO per Paired Share $ 0.75 $ 0.68 $ 2.13 $ 1.97
======== ======== ======== ========
Percent Increase 10.3% 8.1%
</TABLE>
9 of 39
<PAGE>
SIMON PROPERTY GROUP
Selected Financial Information
As of September 30, 1999
(In thousands, except as noted)
<TABLE>
<CAPTION>
As of or for the
Nine Months Ended
September 30,
1999 1998 % Change
---- ---- --------
<S> <C> <C> <C>
Financial Highlights of the Company
- -----------------------------------
Total Revenue - Consolidated Properties $1,371,270 $932,970 47.0%
Total EBITDA of Simon Portfolio $1,287,660 $907,968 41.8%
EBITDA After Minority Interest $1,029,314 $702,777 46.5%
Net Income Available to Common Shareholders $ 115,851 $ 80,381 44.1%
Basic Net Income per Common Share $ 0.67 $ 0.71 -5.6%
Diluted Net Income per Common Share $ 0.67 $ 0.71 -5.6%
FFO of the Simon Portfolio $ 508,529 $348,448 45.9%
Basic FFO Allocable to the Company $ 370,224 $222,575 66.3%
Diluted FFO Allocable to the Company $ 399,809 $223,593 78.8%
Basic FFO per Common Share $ 2.15 $ 1.97 9.1%
Diluted FFO per Common Share $ 2.13 $ 1.97 8.1%
Distributions per Common Share $ 1.5150 $ 1.5150 0.0%
Operational Statistics
- ----------------------
Occupancy at End of Period:
Regional Malls (1) 88.5% 87.7% 0.8%
Community Shopping Centers (2) 90.2% 90.8% -0.6%
Average Base Rent per Square Foot:
Regional Malls (1) $ 26.75 $ 23.20 15.3%
Community Shopping Centers (2) $ 7.96 $ 7.47 6.6%
Regional Malls:
Total Tenant Sales Volume, in millions (3)(4) $ 9,624 $ 6,457 49.0%
Total Sales per Square Foot (4) $ 356 $ 320 11.3%
Comparable Sales per Square Foot (4) $ 371 $ 327 13.5%
Number of U.S. Properties Open at End of Period 253 241 5.0%
Total U.S. GLA at End of Period, in millions of square feet 177.2 164.9 7.5%
</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 39
<PAGE>
SIMON PROPERTY GROUP
Selected Financial Information
As of September 30, 1999
(In thousands, except as noted)
<TABLE>
<CAPTION>
September 30, September 30,
Equity Information 1999 1998
- ------------------ ---- ----
<S> <C> <C>
Limited Partner Units Outstanding at End of Period 64,905 64,182
Common Shares Outstanding at End of Period 173,480 166,778
----------- -----------
Total Common Shares and Units Outstanding at End of Period 238,385 230,960
=========== ===========
Basic Weighted Average Paired Shares Outstanding 171,950 112,957
Diluted Weighted Average Number of Equivalent Paired Shares (2) 187,917 113,500
September 30, December 31,
Debt Information 1999 1998
- ---------------- ---- ----
Consolidated Debt $ 8,541,721 $ 7,973,372
Simon Group's Share of Joint Venture Debt $ 1,647,025 $ 1,227,044
Debt-to-Market Capitalization
- -----------------------------
Common Stock Price at End of Period $ 22.4375 $ 28.5000
Equity Market Capitalization (1) $ 6,200,965 $ 7,608,188
Total Consolidated Capitalization $14,742,686 $15,581,560
Total Capitalization - Including Simon Group's Share of JV Debt $16,389,711 $16,808,604
</TABLE>
(1) Market value of Common Stock, Units and all issues of Preferred Stock of
SPG and SPG Properties, Inc.
(2) Diluted for purposes of computing FFO per share.
11 of 39
<PAGE>
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data
As of September 30, 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 92,663,482 29,032,403 27.4% 97.4% $ 3.78
- -Mall Store 53,082,536 53,034,638 50.1% 88.4% $27.43
- -Freestanding 3,628,341 1,907,848 1.8% 90.9% $ 9.34
----------- ---------- ----
Subtotal 56,710,877 54,942,486 51.9% 88.5% $26.75
Regional Mall Total 149,374,359 83,974,889 79.3% 91.6% $18.44
Community Shopping Centers
- --------------------------
- -Anchor 13,046,524 8,412,007 7.9% 94.4% $ 6.39
- -Mall Store 4,795,761 4,710,003 4.5% 81.8% 11.28
- -Freestanding 989,061 482,972 .5% 97.8% 7.44
----
Community Ctr. Total 18,831,346 13,604,982 12.9% 90.2% $ 7.96
Office Portion of
Mixed-Use Properties 2,755,781 2,755,781 2.6% 89.1% $19.47
Value-Oriented
Super-Regional Malls 5,186,172 5,044,577 4.8% 94.1% $17.39
Properties under
Redevelopment 1,004,897 534,946 0.5%
GRAND TOTAL 177,152,555 105,915,175 100.00%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Occupancy History
- ------------------------------------------------------------------------------------------------------
Community
As of Regional Malls(1) Shopping Centers(2)
--------------------------------------------------------------------------
<S> <C> <C>
9/30/99 88.5% 90.2%
9/30/98 87.7% 90.8%
--------------------------------------------------------------------------
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 39
<PAGE>
SIMON PROPERTY GROUP
Rent Information
As of September 30, 1999
Average Base Rent
<TABLE>
<CAPTION>
Mall & Freestanding % Community %
As of Stores at Regional Malls Change Shopping Centers Change
- ---------------- -------------------------- --------- ----------------- -------
<S> <C> <C> <C> <C>
9/30/99 $26.75 15.3% $7.96 6.6%
9/30/98 23.20 - 7.47 -
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>
Rental Rates
<TABLE>
<CAPTION>
Base Rent (2)
------------------------------ Amount of Change
Store Openings Store Closings --------------------------
Year During Period During Period Dollar Percentage
- ----------------------------- -------------- --------------- ------- -----------------
<S> <C> <C> <C> <C>
Regional Malls:
- ---------------
1999 (YTD) $30.27 $24.13 $ 6.14 25.4%
1998 27.33 23.63 3.70 15.7
1997 29.66 21.26 8.40 39.5
1996 23.59 18.73 4.86 25.9
Community Shopping Centers:
- ---------------------------
1999 (YTD) $ 9.32 $ 7.51 $ 1.81 24.1%
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.
13 of 39
<PAGE>
SIMON PROPERTY GROUP
Lease Expirations/(1)/
As of September 30, 1999
<TABLE>
<CAPTION>
Number of Square Avg. Base Rent
Year Leases Expiring Feet per Square Foot
at 9/30/99
Regional Malls - Mall & Freestanding Stores
- -------------------------------------------
<S> <C> <C> <C>
1999 (10/1 - 12/31) 249 463,021 31.01
2000 1,856 3,367,706 26.60
2001 1,551 3,404,296 25.95
2002 1,522 3,292,369 27.27
2003 1,667 4,053,030 27.48
2004 1,618 4,295,970 28.36
2005 1,381 4,499,880 26.74
2006 1,434 4,067,508 28.92
2007 1,333 3,932,019 30.64
2008 1,213 4,112,337 29.48
---------- ------------
TOTALS 13,824 35,488,136 $28.06
Regional Malls - Anchor Tenants
- -------------------------------
1999 (10/1 - 12/31) 3 443,441 3.08
2000 12 1,649,695 1.98
2001 14 1,847,473 1.95
2002 18 2,132,610 1.96
2003 17 2,048,693 2.41
2004 20 1,970,727 3.40
2005 15 1,794,426 2.70
2006 17 2,062,107 3.29
2007 7 816,448 1.82
2008 13 1,327,475 4.50
---------- ------------
TOTALS 136 16,093,095 $2.68
Community Centers - Mall Stores & Freestanding Stores
- -----------------------------------------------------
1999 (10/1 - 12/31) 12 46,241 6.99
2000 261 649,222 11.62
2001 190 543,615 12.17
2002 164 543,280 11.51
2003 132 564,938 11.13
2004 106 431,571 11.39
2005 54 333,301 10.11
2006 22 261,511 7.56
2007 18 164,142 11.11
2008 19 151,301 11.16
---------- ------------
TOTALS 978 3,689,122 $11.05
</TABLE>
(1) Does not consider the impact of options that may be contained in leases.
14 of 39
<PAGE>
SIMON PROPERTY GROUP
Lease Expirations/(1)/
As of September 30, 1999
<TABLE>
<CAPTION>
Number of Square Avg. Base Rent
Year Leases Expiring Feet per Square Foot
at 9/30/99
Community Centers - Anchor Tenants
- ----------------------------------
<S> <C> <C> <C>
1999 (10/1 - 12/31) 2 212,321 1.75
2000 7 271,642 5.83
2001 13 537,403 4.02
2002 9 334,458 5.74
2003 13 567,872 4.96
2004 12 339,901 5.76
2005 12 600,365 5.85
2006 9 511,812 5.62
2007 13 658,554 5.82
2008 10 399,235 7.74
--------------- ------------
TOTALS 100 4,433,563 $5.46
</TABLE>
(1) Does not consider the impact of options that may be contained in leases.
15 of 39
<PAGE>
SIMON PROPERTY GROUP
SPG's Share of Total Debt Amortization and Maturities by Year
As of September 30, 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>
1999........................... 0 9,535 0 17,153 26,688
2000........................... 1 400,445(1) 1,083,000 120,542 1,603,987
2001........................... 2 235,967 0 84,921 320,888
2002........................... 3 583,117 250,000 82,891 916,008
2003........................... 4 263,123 1,250,000 249,823 1,762,946
2004........................... 5 282,702 700,000 168,145 1,150,848
2005........................... 6 107,724 660,000 130,975 898,699
2006........................... 7 118,739 250,000 219,767 588,506
2007........................... 8 489,040 180,000 112,931 781,971
2008........................... 9 44,924 200,000 296,261 541,185
2009........................... 10 179,104 450,000 43,099 672,203
Thereafter 108,673 525,000 110,937 744,609
--------------- ------------- ------------- ---------------
Subtotal Face Amounts $ 2,823,093 $ 5,548,000 $ 1,637,446 $ 10,008,538
--------------- ------------- ------------- ---------------
Premiums and Discounts on Indebtedness, Net 2,676 7,057 9,580 19,312
--------------- ------------- ------------- ---------------
SPG's Share of Total Indebtedness $ 2,825,768 $ 5,555,057 $ 1,647,025 $ 10,027,850
============== ============= ============= ===============
</TABLE>
(1) $140,699 of this debt was refinanced on 10/15/99.
16 of 39
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness
As of September 30, 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 2,401,289 2,288,126 7.37% 5.9
Debt Swapped to Maturity 50,000 50,000 7.74% 1.9
Capped to Maturity, Currently "In the Money" 134,999 98,968 6.17% 6.4
Other Hedged Debt 50,000 50,000 5.95% 0.3
Floating Rate Debt 347,971 335,998 6.64% 3.2
------------- ------------ ------------ ----------------
Total Mortgage Debt 2,984,259 2,823,093 7.22% 5.5
Unsecured Debt
Fixed Rate 3,790,000 3,790,000 7.17% 7.4
Capped to Maturity, Currently "In the Money" 63,000 63,000 6.14% 0.3
Floating Rate Debt 70,000 70,000 6.05% 0.3
------------ ------------ ------------- ----------------
Subtotal 3,923,000 3,923,000 7.13% 7.1
CPI Merger Facility 950,000 950,000 6.03% 0.7
Revolving Corporate Credit Facility 535,000 535,000 5.99% 3.9
Revolving Corporate Credit Facility (Hedged) 140,000 140,000 5.99% 3.9
------------ ------------ ------------- ----------------
Total Unsecured Debt 5,548,000 5,548,000 6.80% 5.6
Adjustment to Fair Market Value - Fixed Rate 8,479 8,750 N/A N/A
Adjustment to Fair Market Value - Variable Rate 983 982 N/A N/A
------------ ------------ ------------ -----------------
Consolidated Mortgages and Other Indebtedness 8,541,721 8,380,825 6.94% 5.6
============ ============= ============= =================
Joint Venture Mortgage Indebtedness
- -----------------------------------
Fixed Rate 2,959,578 1,295,756 7.56% 6.7
Other Hedged Debt 394,714 139,827 6.12% 3.3
Floating Rate Debt 467,749 201,863 6.57% 2.6
------------ ------------ ------------ -----------------
Subtotal 3,822,041 1,637,446 7.32% 5.9
Adjustment to Fair Market Value - Fixed Rate 19,159 9,580 N/A N/A
------------ ------------ ------------ -----------------
Joint Venture Mortgages and Other Indebtedness 3,841,200 1,647,025 7.32% 5.9
============ ============ ============ =================
SPG's Share of Total Indebtedness 10,027,850 7.01% 5.7
============ ============ =================
</TABLE>
17 of 39
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 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>
Consolidated Indebtedness
Fixed Rate Mortgage Debt:
- -------------------------
Florida Mall, The 2/28/00 6.65% 90,000 90,000
Net Lease (Braintree) 4/1/00 9.75% 37 37
Windsor Park Mall - 1 6/1/00 8.00% 5,713 5,713
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% 876 876
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% 30,743 30,743
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 255,449 253,549 7.79%
Biltmore Square 1/1/01 7.15% 26,000 17,342
Chesapeake Square 1/1/01 7.28% 47,105 35,329
Port Charlotte Town Center 1/1/01 7.28% 52,262 41,810
Great Lakes Mall - 1 3/1/01 6.74% 52,632 52,632
Great Lakes Mall - 2 3/1/01 7.07% 8,489 8,489
Net Lease (Norfolk) 11/30/01 8.50% 183 183
------------ -----------
Subtotal 2001 186,671 155,784 7.07%
Lima Mall 3/1/02 7.12% 18,903 18,903
Columbia Center 3/15/02 7.62% 42,326 42,326
Northgate Shopping Center 3/15/02 7.62% 79,035 79,035
Tacoma Mall 3/15/02 7.62% 92,474 92,474
Net Lease (Chattanooga) 5/31/02 6.80% 682 682
River Oaks Center 6/1/02 8.67% 32,500 32,500
North Riverside Park Plaza - 1 9/1/02 9.38% 3,808 3,808
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% 103,428 103,428
Principal Mutual Mortgages - Pool 2 (2) 9/15/02 6.77% 137,718 137,718
Net Lease (Atlanta) 12/1/02 8.00% 915 915
Palm Beach Mall 12/15/02 7.50% 49,688 49,688
------------ -----------
Subtotal 2002 565,094 565,094 7.32%
Century III Mall -1 7/1/03 6.78% 66,000 66,000
Miami International Mall 12/21/03 6.91% 46,064 27,638
------------ -----------
Subtotal 2003 112,064 93,638 6.82%
Battlefield Mall - 1 1/1/04 7.50% 47,904 47,904
Battlefield Mall - 2 1/1/04 6.81% 44,688 44,688
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 182,593 144,442 7.15%
</TABLE>
18 of 39
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 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>
Tippecanoe Mall - 1 1/1/05 8.45% 45,684 45,684
Tippecanoe Mall - 2 1/1/05 6.81% 15,888 15,888
Melbourne Square 2/1/05 7.42% 38,990 38,990
Cielo Vista Mall - 2 11/1/05 8.13% 1,433 1,433
------------ ------------
Subtotal 2005 101,995 101,995 7.80%
Treasure Coast Square 1/1/06 7.42% 52,630 52,630
Gulf View Square 10/1/06 8.25% 37,211 37,211
Paddock Mall 10/1/06 8.25% 29,595 29,595
------------ ------------
Subtotal 2006 119,436 119,436 7.88%
Lakeline Mall 5/1/07 7.65% 72,372 72,372
Cielo Vista Mall - 1 5/1/07 9.38% 55,029 55,029
Cielo Vista Mall - 3 5/1/07 6.76% 38,692 38,692
McCain Mall - 1 5/1/07 9.38% 25,532 25,532
McCain Mall - 2 5/1/07 6.76% 17,858 17,858
Valle Vista Mall - 1 5/1/07 9.38% 33,817 33,817
Valle Vista Mall - 2 5/1/07 6.81% 7,937 7,937
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 485,737 461,937 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% 11,916 11,916
Greenwood Park Mall - 2 1/1/09 6.76% 61,565 61,565
College Mall - 1 1/1/09 7.00% 41,843 41,843
Greenwood Park Mall - 1 1/1/09 7.00% 35,046 35,046
Towne East Square - 1 1/1/09 7.00% 55,323 55,323
Towne East Square - 2 1/1/09 6.81% 24,826 24,826
------------ ------------
Subtotal 2009 230,519 230,519 6.90%
Windsor Park Mall - 2 5/1/12 8.00% 8,778 8,778
------------ ------------
Subtotal 2012 8,778 8,778 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% 39,223 39,223
------------ ------------
Subtotal 2026 39,223 39,223 8.63%
Keystone at the Crossing 7/1/27 7.85% 63,730 63,730
------------ ------------
Subtotal 2027 63,730 63,730 7.85%
------------ ------------ --------------
Total Consolidated Fixed Rate Mortgage Debt 2,401,289 2,288,126 7.37%
============ ============ ==============
</TABLE>
19 of 39
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 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 5.95% 50,000 50,000
Lakeline Plaza 2/28/00 6.20% 33,000 33,000
White Oaks Mall 3/1/00 6.80% 16,500 9,062
Eastgate Consumer Mall 3/31/00 6.40% 22,929 22,929
Trolley Square 7/23/00 6.90% 8,141 7,327
------------ ------------
Subtotal 2000 130,570 122,318 6.22%
Crystal River 1/1/01 7.40% 15,292 15,292
Orland Square 9/1/01 7.74% 50,000 50,000
------------ ------------
Subtotal 2001 65,292 65,292 7.66%
Highland Lakes Center 3/1/02 6.90% 14,377 14,377
Mainland Crossing 3/31/02 6.90% 1,603 1,282
------------ ------------
Subtotal 2002 15,980 15,659 6.90%
Richmond Towne Square (3) 7/15/03 6.40% 37,319 37,319
Shops @ Mission Viejo (3) 9/14/03 6.45% 84,622 84,622
Arboretum (3) 11/30/03 6.90% 34,000 30,600
------------ ------------
Subtotal 2003 155,941 152,541 6.53%
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
North East Mall (3) 5/21/04 6.90% 63,690 63,690
Waterford Lakes (3) 8/25/04 6.80% 16,498 16,498
------------ ------------
Subtotal 2004 165,187 129,157 6.62%
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 582,970 534,967 6.59%
============ ============ =============
------------ -------------
Total Consolidated Mortgage Debt 2,823,093 7.22%
============ =============
</TABLE>
20 of 39
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 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>
Fixed Rate Unsecured Debt:
Unsecured Notes - CPI 1 3/15/02 9.00% 250,000 250,000
------------ ------------
Subtotal 2002 250,000 250,000 9.00%
Unsecured Notes - CPI 2 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 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%
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 9/1/13 7.18% 75,000 75,000
------------ ------------
Subtotal 2013 75,000 75,000 7.18%
Unsecured Notes - CPI 5 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%
============ ============
</TABLE>
21 of 39
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 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 Unsecured Debt:
- ----------------------------
SPG, L.P. Unsecured Loan 1/31/00 6.05% 70,000 70,000
SPG, L.P. Unsecured Loan 1/31/00 6.14% 63,000 63,000
CPI Merger Facility - 2 (1.4B) 3/24/00 6.03% 450,000 450,000
CPI Merger Facility - 3 (1.4B) 9/24/00 6.03% 500,000 500,000
---------------- ----------------
Subtotal 2000 1,083,000 1,083,000 6.04%
Corporate Revolving Credit
Facility (3) 8/25/03 5.99% 675,000 675,000
---------------- ----------------
Subtotal 2003 675,000 675,000 5.99%
---------------- ----------------
Total Unsecured Variable Rate Debt 1,758,000 1,758,000 6.02%
================ ================
----------------
Total Unsecured Debt 5,548,000 6.80%
===============
Net Discount on Fixed-Rate Indebtedness 8,479 8,750 N/A
Net Premium on Variable-Rate Indebtedness 983 982 N/A
---------------- -----
Total Consolidated Debt 8,380,825 6.94%
================ =====
Joint Venture Indebtedness
Fixed Rate Mortgage Debt:
-------------------------
Greendale Mall - 1 12/1/99 8.15% 28,385 13,948
Greendale Mall - 2 12/1/99 8.00% 3,009 1,479
---------------- ----------------
Subtotal 1999 31,394 15,426 8.14%
Northfield Square 4/1/00 9.52% 23,831 7,531
Coral Square 12/1/00 7.40% 53,300 26,650
---------------- ----------------
Subtotal 2000 77,131 34,181 7.87%
Atrium at Chestnut Hill - 1 4/1/01 7.32% 43,078 21,167
Atrium at Chestnut Hill - 2 4/1/01 8.16% 11,780 5,788
Highland Mall - 2 10/1/01 8.50% 220 110
Highland Mall - 3 11/1/01 9.50% 2,122 1,061
Square One 12/1/01 8.40% 106,133 52,151
---------------- ----------------
Subtotal 2001 163,333 80,278 8.11%
Crystal Mall 2/1/03 8.66% 49,511 36,920
Avenues, The 5/15/03 8.36% 57,149 14,287
Lakeland Square 12/22/03 7.26% 51,989 25,995
---------------- ----------------
Subtotal 2003 158,649 77,201 8.13%
Solomon Pond 2/1/04 7.83% 96,504 47,420
Northshore Mall 5/14/04 9.05% 161,000 79,111
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 312,505 154,032 8.41%
</TABLE>
22 of 39
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 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>
Westchester, The - 1 9/1/05 8.74% 151,167 75,584
Westchester, The - 2 9/1/05 7.20% 53,806 26,903
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 304,973 133,812 8.07%
Seminole Towne Center 1/1/06 6.88% 70,500 31,725
CMBS Loan - Fixed Component (4) 5/1/06 7.40% 300,000 150,000
Great Northeast Plaza 6/1/06 9.04% 17,559 8,780
Smith Haven Mall 6/1/06 7.86% 115,000 28,750
----------- ----------
Subtotal 2006 503,059 219,255 7.45%
Town Center at Cobb -1 4/1/07 7.54% 50,396 25,198
Town Center at Cobb -2 4/1/07 7.25% 65,575 32,788
Gwinnett Place -1 4/1/07 7.54% 39,555 19,778
Gwinnett Place -2 4/1/07 7.25% 86,167 43,084
----------- ----------
Subtotal 2007 241,693 120,847 7.36%
Metrocenter 2/28/08 8.45% 30,910 15,455
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
Mall of New Hampshire - 1 10/1/08 6.96% 105,000 51,594
Mall of New Hampshire - 2 10/1/08 8.53% 8,500 4,177
Grapevine Mills - 2 10/1/08 6.47% 155,000 58,125
Ontario Mills - 5 11/2/08 6.75% 144,064 36,016
Source, The - 2 11/6/08 6.65% 124,000 31,000
----------- ----------
Subtotal 2008 843,474 301,034 6.82%
Apple Blossom Mall 9/10/09 7.99% 41,000 20,146
Auburn Mall 9/10/09 7.99% 48,000 23,586
Highland Mall - 1 12/1/09 9.75% 7,599 3,800
Ontario Mills - 4 (5) 12/28/09 0.00% 4,895 1,224
------------ -----------
Subtotal 2009 101,494 48,756 7.93%
Mall of Georgia Crossing 6/6/10 7.25% 21,873 10,936
Mall of Georgia 7/1/10 7.09% 200,000 100,000
------------ -----------
Subtotal 2010 221,873 110,936 7.11%
------------ ----------- --------
Total Joint Venture Fixed Rate Mortgage Debt 2,959,578 1,295,756 7.56%
============ ============ ========
</TABLE>
23 of 39
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 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:
Tower Shops, The 3/13/00 6.60% 12,900 6,450
Greendale Mall - 3 11/14/00 7.45% 8,310 4,083
Dadeland Mall (3) 12/10/00 6.10% 140,000 70,000
---------- -----------
Subtotal 2000 161,210 80,533 6.21%
Montreal Forum 1/31/02 6.25% 6,439 2,293
Arizona Mills (3) 2/1/02 6.70% 142,214 37,425
Shops at Sunset Place, The (3) 6/30/02 6.65% 97,773 36,665
---------- -----------
Subtotal 2002 246,426 76,383 6.66%
Cape Cod Mall (3) 4/1/03 7.20% 50,149 24,642
CMBS Loan - Floating Component (4) 5/1/03 5.90% 185,000 92,500
Concord Mills (3) 12/2/03 6.75% 146,879 55,080
---------- -----------
Subtotal 2003 382,028 172,222 6.36%
Circle Centre Mall - 1 (3) 1/31/04 5.84% 60,000 8,802
Circle Centre Mall - 2 (3) 1/31/04 6.90% 7,500 1,100
Orlando Premium Outlets (3) 5/20/04 6.90% 5,299 2,650
---------- -----------
Subtotal 2004 72,799 12,552 6.16%
--------- ----------- ---------
Total Joint Venture Variable Rate Debt 862,463 341,690 6.38%
========= =========== =========
CMBS Loan - Fixed Premium 19,159 9,580
-----------
Total Joint Venture Debt 1,647,025 7.32%
----------- ---------
SPG's Share of Total Indebtedness 10,027,850 7.01%
------------ -----------
</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) Includes applicable extensions available at Simon Group's option.
(4) This is $485 million of Commercial Mortgage Notes secured by cross-
collateralized mortgages encumbering thirteen of the Properties. Simon
Group's share is $242 million. A weighted average rate is used.
(5) Notes for purchase of land from Ontario Redevelopment Agency at 6%
commencing January 2000.
24 of 39
<PAGE>
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of September 30, 1999
(In thousands)
<TABLE>
<CAPTION>
Principal SPG SPG's
Property Maturity Balance Ownership Share of
Name Date 09/30/99 % Loan Balance
- -------------------------------------------- ------------- ------------------ ----------------------- --------------
<S> <C> <C> <C> <C>
Consolidated Properties:
Secured Debt:
Jefferson Valley Mall 1/12/00 50,000 100.00% 50,000
Lakeline Plaza 2/28/00 33,000 100.00% 33,000
White Oaks Mall 3/1/00 16,500 54.92% 9,062
Eastgate Consumer Mall 3/31/00 22,929 100.00% 22,929
Trolley Square 7/23/00 8,141 90.00% 7,327
Crystal River 1/1/01 15,292 100.00% 15,292
Orland Square 9/1/01 50,000 100.00% 50,000
Highland Lakes Center 3/1/02 14,377 100.00% 14,377
Mainland Crossing 3/31/02 1,603 80.00% 1,282
Waterford Lakes 8/25/04 16,498 100.00% 16,498
North East Mall - 2 5/21/04 63,690 100.00% 63,690
Richmond Towne Square 7/15/03 37,319 100.00% 37,319
Shops @ Mission Viejo 9/14/03 84,622 100.00% 84,622
Arboretum 11/30/03 34,000 90.00% 30,600
Forum Phase I - Class A-2 5/15/04 44,385 60.00% 26,631
Forum Phase II - Class A-2 5/15/04 40,614 55.00% 22,338
CMBS Loan - Variable Component 12/15/07 50,000 100.00% 50,000
---------------------- ----------------------
Total Consolidated Secured Debt 582,970 534,967
====================== ======================
Unsecured Debt:
SPG, L.P. Unsecured Loan 1/31/00 70,000 100.00% 70,000
SPG, L.P. Unsecured Loan 1/31/00 63,000 100.00% 63,000
CPI Merger Facility - 2 (1.4B) 3/24/00 450,000 100.00% 450,000
CPI Merger Facility - 3 (1.4B) 9/24/00 500,000 100.00% 500,000
Unsecured Revolving Credit Facility - (1.25B) 8/25/03 675,000 100.00% 675,000
---------------------- ----------------------
Total Consolidated Unsecured Debt 1,758,000 1,758,000
====================== ======================
Net Premium on Variable-Rate Indebtedness 983 982
---------------------- ----------------------
Consolidated Variable Rate Debt 2,341,953 2,293,949
====================== ======================
</TABLE>
<TABLE>
<CAPTION>
Interest
Property Rate Terms of Terms of
Name 09/30/99 Variable Rate Interest Rate Protection Agreement
- ------------------------------------------ ------------ ----------------- --------------------------------------------
<S> <C> <C> <C>
Consolidated Properties:
Secured Debt:
Jefferson Valley Mall 5.950% LIBOR + 0.550% LIBOR Capped at 8.70% through maturity
Lakeline Plaza 6.200% LIBOR + 0.800%
White Oaks Mall 6.802% LIBOR + 1.250% 90-day LIBOR set on August 30, 1999
Eastgate Consumer Mall 6.400% LIBOR + 1.000%
Trolley Square 6.900% LIBOR + 1.500%
Crystal River 7.400% LIBOR + 2.000%
Orland Square 7.742% LIBOR + 0.500% LIBOR Swapped at 7.24% through maturity
Highland Lakes Center 6.900% LIBOR + 1.500%
Mainland Crossing 6.900% LIBOR + 1.500%
Waterford Lakes 6.800% LIBOR + 1.400%
North East Mall - 2 6.900% LIBOR + 1.500%
Richmond Towne Square 6.400% LIBOR + 1.000%
Shops @ Mission Viejo 6.450% LIBOR + 1.050%
Arboretum 6.900% LIBOR + 1.500%
Forum Phase I - Class A-2 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 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 Component 6.155% LIBOR + 0.365% Through an interest rate protection agreement,
effectively fixed at an all-in-one rate of 6.16%
Total Consolidated Secured Debt
Unsecured Debt:
SPG, L.P. Unsecured Loan 6.050% LIBOR + 0.650%
SPG, L.P. Unsecured Loan 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 (1.4B) 6.033% LIBOR + 0.650%
CPI Merger Facility - 3 (1.4B) 6.033% LIBOR + 0.650%
Unsecured Revolving Credit Facility - (1.25B) 5.990% LIBOR + 0.650% Subject to an 11.53% LIBOR cap on $90M and a 16.77%
LIBOR cap on $50M.
Total Consolidated Unsecured Debt
Net Premium on Variable-Rate Indebtedness
Consolidated Variable Rate Debt
</TABLE>
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<PAGE>
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of September 30, 1999
(In thousands)
<TABLE>
<CAPTION>
Principal SPG SPG's Interest
Property Maturity Balance Ownership Share of Rate Terms of
Name Date 09/30/99 % Loan Balance 09/30/99 Variable Rate
-------- -------- -------- --------- ------------ -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Joint Venture Properties:
Tower Shops, The 3/13/00 12,900 50.00% 6,450 6.600% LIBOR + 1.200%
Greendale Mall - 3 11/14/00 8,310 49.14% 4,083 7.450% LIBOR + 2.050%
Dadeland Mall 12/10/00 140,000 50.00% 70,000 6.100% LIBOR + 0.700%
Montreal Forum 1/31/02 6,439 35.63% 2,294 6.250% Canadian Prime
Arizona Mills 2/1/02 142,214 26.32% 37,425 6.700% LIBOR + 1.300%
Cape Cod Mall 4/1/03 50,149 49.14% 24,642 7.200% LIBOR + 1.800%
Orlando Premium Outlets 5/20/04 5,299 50.00% 2,650 6.900% LIBOR + 1.500%
Shops at Sunset Place, The 6/30/02 97,773 37.50% 36,665 6.650% LIBOR + 1.250%
Concord Mills 12/2/03 146,879 37.50% 55,080 6.750% LIBOR + 1.350%
CMBS Loan - Floating Component 5/1/03 185,000 50.00% 92,500 5.898% See Footnote (1)
Circle Centre Mall -1 1/31/04 60,000 14.67% 8,802 5.840% LIBOR + 0.440%
Circle Centre Mall -2 1/31/04 7,500 14.67% 1,100 6.900% LIBOR + 1.500%
--------- ---------
Total Joint Venture Properties 862,463 341,690
========= =========
Total Variable Mortgage
and Other Indebtedness 3,204,416 2,635,639
========= =========
Property Terms of
Name Interest Rate Protection Agreement
-------- ------------------------------------------------------------------------
<S> <C>
Joint Venture Properties:
Tower Shops, The Two one-year extensions exist to extend maturity.
Greendale Mall - 3
Dadeland Mall
Montreal Forum
Arizona Mills LIBOR Capped at 9.50% through maturity.
Cape Cod Mall
Orlando Premium Outlets Rate can be reduced based upon project performance.
Shops at Sunset Place, The Rate can be reduced based upon project performance.
Concord Mills
CMBS Loan - Floating Component The Operating Partnership took assignment of an interest rate protection
agreement (LIBOR cap of 11.67%) relating to this debt.
Circle Centre Mall -1 LIBOR Capped at 8.81% through maturity.
Circle Centre Mall -2 LIBOR Capped at 7.75% through maturity.
Total Joint Venture Properties
Total Variable Mortgage
and Other Indebtedness
</TABLE>
Footnote:
(1) Represents the weighted average interest rate.
The following table summarizes variable rate debt:
<TABLE>
<CAPTION>
Total SPG Share
--------- ---------
<S> <C> <C>
Swapped debt 50,000 50,000
Capped debt "in the money" 197,999 161,969
Other hedged variable rate debt 584,714 329,827
Unhedged variable rate debt 2,371,703 2,093,843
--------- ---------
3,204,416 2,635,639
========= =========
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
SIMON PROPERTY GROUP
New Development Activities
As of September 30, 1999
Simon Non-Anchor
Group's Actual/ Projected Sq. Footage
Mall/ Ownership Projected Cost Leased/ GLA
Location Percentage Opening (in millions) Committed(1) (sq. ft.)
- -------------------------- ---------- --------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
Projects Recently Opened
- --------------------------
The Mall of Georgia 50% 8/99 $246 81% 1,600,000
Buford, Georgia
(Atlanta)
Anchors/Major Tenants: Nordstrom (3/00), Rich's (11/00), Dillard's, Lord & Taylor, JCPenney, Galyan's,
Bed Bath & Beyond, Haverty's, Regal 20 Cinemas, IMAX
- -------------------------- ----------------------------------------------------------------------------------------
The Mall of Georgia Crossing 50% 8/99 $ 38 96% 441,000
Buford, GA
(Atlanta)
Anchors/Major Tenants: Target, Nordstrom Rack (4/00), Best Buy, Staples, TJMaxx & More
- -------------------------- ----------------------------------------------------------------------------------------
Concord Mills 37.5% 9/99 $216 80% 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, John Q. Hammons, Embassy Suites Hotel,
Host Marriott Services food court
Projects Under Construction
- -------------------------- ----------------------------------------------------------------------------------------
The Shops at North East Mall 100% 11/99 $ 42 85% 341,000
Hurst, TX
Anchors/Major Tenants: Michaels, OfficeMax, PetsMart (2/00), TJMaxx, Bed Bath & Beyond, Just For
Feet, Nordstrom Rack (5/00); anchor tenants opening summer 2000: Noodle
Kidoodle, Ulta Cosmetics and Old Navy
- -------------------------- ----------------------------------------------------------------------------------------
Waterford Lakes Town Center 100% 11/99 and $ 84 91% 975,000
Orlando, FL 11/00 (Phase I)
Anchors/Major Tenants: Super Target, TJMaxx, Ross Dress for Less, Bed Bath & Beyond, Barnes & Noble,
Waves Music; anchor tenants opening summer 2000: Old Navy and Regal 20-
Plex Theatre; Phase II anchors include OfficeMax, PetsMart and Best Buy
- -------------------------- ----------------------------------------------------------------------------------------
Orlando Premium Outlets 50% Mid 2000 $ 91 (2) 433,000
Orlando, FL
Anchors/Major Tenants: To be announced
- -------------------------- ----------------------------------------------------------------------------------------
Arundel Mills 37.5% Fall 2000 $230 (2) 1,400,000
Anne Arundel, MD
Anchors/Major Tenants: Jillian's, Bed Bath & Beyond, Sun & Ski Sports, For Your Entertainment,
Iguana Amerimex
(1) Community Center leased/committed percentage includes owned anchor GLA.
(2) Leasing still in preliminary stage.
</TABLE>
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<PAGE>
SIMON PROPERTY GROUP
Significant Renovation/Expansion Activities
As of September 30, 1999
<TABLE>
<CAPTION>
Total New or
SPG Actual/ Projected Existing Incremental
Mall/ Ownership Projected Cost GLA GLA
Location Percentage Opening (in millions) (sq. ft.) (sq. ft.)
- --------------------------- ------------ ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Projects Recently Opened
- ---------------------------
The Shops at Mission Viejo 100% 9/99 $146 817,000 427,000
Mission Viejo, CA
Project Description: New Nordstrom, small shop expansion and renovation, new parking structure;
New Saks Fifth Avenue (11/99); Robinson-May expansion and remodel (spring
2000); food court addition (fall 2000); Macy's expansion and remodel (2001)
Projects Under Construction
- ---------------------------
Florida Mall 50% 11/99 $ 80 1,120,000* 608,000*
Orlando, FL *excludes Nordstrom
Project Description: Dillard's and JCPenney expansions, food court renovation (completed 1998);
new Burdines, small shop expansion and mall renovation; new Nordstrom
and additional small shops (spring 2002)
- --------------------------- ---------------------------------------------------------------------------------
LaPlaza Mall 100% 11/99, 3/00 $ 36 988,000 215,000
McAllen, TX & fall 2000
Project Description: Mall renovation; new Dillard's (3/00); JCPenney expansion and new small
shops retrofitted from the existing Dillard's store (fall 2000)
- --------------------------- ---------------------------------------------------------------------------------
North East Mall 100% 10/99, fall 200 $103 1,141,000 308,000
Hurst, TX & 3/01
Project Description: New Dillard's, mall expansion and parking deck; Montgomery Ward remodel
(10/99); JCPenney remodel and expansion and parking deck (11/99);
new Saks Fifth Avenue, Sears remodel, mall renovation and parking deck
(fall 2000); new Nordstrom (3/01)
- --------------------------- ---------------------------------------------------------------------------------
Palm Beach Mall 100% 11/99 $ 34 1,205,000 61,000
West Palm Beach, FL
Project Description: Mall renovation and JCPenney remodel; new Dillard's (2/00) and Borders (4/00);
Burdines remodel (summer 2000)
- --------------------------- ---------------------------------------------------------------------------------
Richmond Town Square 100% 12/99 $ 59 873,000 10,000
Cleveland, OH & 6/00
Project Description: New Kaufmann's, JCPenney remodel and mall renovation (opened 11/98); Sears
remodel and new food court; new Sony Cinema (12/99); new Barnes &
Noble (6/00)
- --------------------------- ---------------------------------------------------------------------------------
Town Center at Boca Raton 100% 10/99 $ 66 1,327,000 228,000
Boca Raton, FL & 11/00
Project Description: New, expanded and relocated Saks Fifth Avenue and new parking structure (10/99);
Bloomingdale's expansion (11/99); new Nordstrom, Lord & Taylor expansion, mall
expansion and renovation, food court renovation and new parking structure (11/00)
</TABLE>
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<PAGE>
SIMON PROPERTY GROUP
Capital Expenditures
For the Nine Months Ended September 30, 1999
(In millions)
<TABLE>
<CAPTION>
Joint Venture Properties
------------------------
Simon
Consolidated Group's
Properties Total Share
---------- ----- -----
<S> <C> <C> <C>
New Developments $209.0 $305.2 $133.7
Renovations and Expansions 172.3 37.5 17.2
Tenant Allowances-Retail 42.0 8.1 3.8
Tenant Allowances-Office .6 - -
Capital Expenditures
Recoverable from Tenants 3.5 11.5 5.3
Other (1) - - -
------ ------ ------
Totals $427.4 $362.3 $160.0
====== ====== ======
</TABLE>
(1) Primarily represents capital expenditures not recovered from tenants.
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<PAGE>
SIMON PROPERTY GROUP
Gains on Land Sales
For the Nine Months Ended September 30, 1999 and 1998
(In millions)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1999 1998
---- ----
<S> <C> <C>
Consolidated Properties $10.7 $5.6
Simon Group's Share of Unconsolidated Entities 4.6 0.7
----- ----
Totals $15.3 $6.3
===== ====
</TABLE>
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<PAGE>
SIMON PROPERTY GROUP
Conference Text
November 9, 1999
Forward Looking Statement
- -------------------------
Welcome to the Simon Property Group third 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 (David Simon)
- ------------------------------
We've had a very busy three months since our last earnings call and are pleased
with our accomplishments including:
. We met expectations and grew third quarter FFO per share 10.3% to $0.75.
. We increased occupancy in the regional mall portfolio to 88.5%, as of 9/30.
. We closed on the acquisition of 12 New England Development properties, and
acquired a 50% interest in Mall of America.
. We completed a three-year extension of our $1.25 billion unsecured corporate
credit facility.
. We opened 3 new development projects in Atlanta and Charlotte totaling 3.4
million square feet.
Financial and Operational Results (Steve Sterrett)
- --------------------------------------------------
Our financial and operational results for the period ended September 30, 1999
are as follows:
For the quarter...
. FFO on a fully diluted per share basis increased 10.3% to $0.75 per share in
1999 from $0.68 per share in 1998.
. FFO of the Simon Portfolio was $180 million, an increase of 46% or $56.4
million, over the $123.6 million reported in 1998.
. Total revenue increased 46% to $471.2 million.
For the nine months...
. FFO on a fully diluted per share basis increased 8.1% to $2.13 per share in
1999 from $1.97 per share in 1998.
. FFO of the Simon Portfolio was $508.5 million, an increase of 46% or $160.1
million, over the $348.4 million reported in 1998.
. Total revenue increased 47% to $1.4 billion.
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SIMON PROPERTY GROUP
Conference Text
November 9, 1999
Operating performance for the regional mall portfolio as of September 30, 1999
demonstrates continued health and vitality:
. Occupancy was 88.5%, an increase of 80 basis points over the same period in
1998.
. Average base rent was $26.75 per square foot, an increase of 15%.
. Total sales per square foot increased 11%, to $356 per square foot, as
compared to the prior year.
. Comparable sales per square foot, i.e. sales of tenants who have been in
place for at least 24 months, increased 13%, to $371. Comparable sales at
comparable properties increased 6.4%.
. Average initial base rent for new mall stores opened in 1999 was $30.27 per
square foot, an increase of $6.14, or 25% over the tenants who closed or
whose leases expired. We have had approximately 8 million square feet of
leasing activity year-to-date.
. Same property NOI growth for the nine months was 5.9%. Drivers of this growth
were increases in occupancy and rents as well as SBV initiatives. As a point
of reference, we do exclude all redevelopment activities from the computation
of our comparable property NOI number.
Liquidity and Capital Activities (Steve Sterrett)
- -------------------------------------------------
In August, we completed a three year extension of our existing $1.25 billion
unsecured corporate credit facility. The facility now matures in August 2002
and contains a one-year extension, at the Company's sole option. The facility's
interest rate continues to be LIBOR plus 65 basis points. The facility also
includes a money market competitive bid option program which has been quite
successful and allows the Company to hold auctions at lower pricing for short
term funds (30, 60 or 90 days) for up to $625 million.
There was ample interest in the three-year extension as lender commitments were
received from 31 financial institutions aggregating over $1.7 billion. We
believe that it is a testament to the financial strength and performance of SPG
that this line could be renewed for $1.25 billion at the same pricing and for up
to four years.
On October 18th, SPG refinanced a cross-collateralized and cross-defaulted debt
pool for 11 community center assets with MetLife. The new financing added one
community center, increased the loan amount from $140 to $170 million, extended
the maturity date from December 2000 to November 2009, and reduced the interest
rate from 8.75% to 7.78%. This transaction is accretive to FFO by more than $1
million annually.
Regarding debt maturities; we have no remaining 1999 debt maturities. The only
significant year 2000 maturity remaining for us is the two tranches of the CPI
facility ($450 million due March 24th and $500 million due September 24th). Our
current plan is to address these maturities through an unsecured debt offering,
probably early in 2000. Keep in
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SIMON PROPERTY GROUP
Conference Text
November 9, 1999
mind, however, that we have substantial financial flexibility in addressing
these maturities. We have approximately $600 million of available capacity on
our corporate credit facility. And we have over $750 million of EBITDA generated
annually from over 110 unencumbered assets, which would allow us to finance or
sell an asset to raise capital, if necessary.
Acquisition Activities (Steve Sterrett)
- ---------------------------------------
On August 30th, we announced the completion of the initial phase of the New
England Development acquisition. SPG holds a 49% interest in a limited
liability company that also includes JPMorgan Investment Management's Strategic
Property Fund at 11%, New York State Teachers Retirement System at 26% and
Teachers Insurance and Annuity Association at 14%. The joint venture acquired
10 malls and SPG assumed management responsibilities from NED's affiliated
management company.
In October, two additional NED closings were completed for Arsenal Mall in
Watertown, MA, and Emerald Square in North Attleboro, MA. SPG expects to
complete the acquisition of the last two NED assets by year-end: Liberty Tree
Mall in Danvers, MA, and The Mall Rockingham Park in Salem, NH. We believe the
financial impact from this acquisition will be consistent with our initial
expectations, and we are pleased to add these high-quality assets to our
portfolio and expand our presence in the Northeast, particularly in the Boston
metropolitan market. We expect CALPERS, which currently owns almost 100% of the
economics of the Mall at Rockingham Park, to remain invested in the mall as a
50% owner. Their continued involvement is a testament to the quality of the NED
assets.
In October, SPG acquired a 50% economic ownership interest in Mall of America
from Teachers Insurance and Annuity Association, which retains ownership of the
remaining 50% economic interest. SPG also acquired an interest in a 55 acre
parcel of land adjacent to the mall. Mall of America (MOA) is one of the most
recognized retail developments in the United States and comprises 2.8 million
square feet of GLA with a 7-acre amusement park in the center. The mall is
anchored by Nordstrom, Macy's, Bloomingdale's and Sears, and includes an area
for retail entertainment, including Knott's Camp Snoopy. We are very pleased to
add ownership of this highly productive mall of national and international
renown to SPG's portfolio. Its 44 million customer visits each year make it one
of the most visited malls in the world, creating unique opportunities for SPG
and its tenants. Mall of America currently has sales productivity in excess of
$500 per square foot.
Prior to our acquisition, a $312 million financing on Mall of America was
obtained, the net proceeds of which were distributed to Teachers. We paid $60.3
million in cash and issued $25 million of 8% perpetual preferred stock to
Teachers (plus the assumption of debt) for the acquisition of our 50% economic
ownership interest. We expect the return on our equity investment to be 17% in
the initial year of ownership.
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SIMON PROPERTY GROUP
Conference Text
November 9, 1999
The capitalization rate, based on in-place income at the date of acquisition of
over $45 million, was 9.5%. We expect it to increase to 10% in the first full
year of ownership. The transaction will be immediately accretive to SPG
earnings with significant future upside available as a result of:
. Lease rollovers--over 500,000 square feet of leases with embedded revenue
growth opportunities are scheduled to expire over the next four years.
Remember that MOA opened in 1992 and was initially leased during the retail
industry's turmoil of the early `90's.
. Future development potential exists through our ownership of 55 acres of
peripheral land adjacent to MOA, the site of the former Met Center.
. Implementation of additional SBV initiatives will generate incremental
revenues.
Dispositions (Steve Sterrett)
- -----------------------------
Progress continues on the disposition of our previously identified non-core
assets. During the first half of 1999, we attempted to find a single buyer,
without success, for an entire portfolio of 15 malls. In July, we began
marketing the assets individually in hopes of finding local or regional buyers
for the assets.
We have three separate transactions, encompassing a total of 6 properties,
currently in the works. All have letters of intent executed, and the buyers are
performing due diligence as we work toward definitive contracts. These
transactions will aggregate more than $130 million, and at least a couple could
close before year-end.
We also have under contract a portfolio of 6 community centers for sale which
will aggregate in excess of 30 million dollars.
We are also actively working with several buyers on the remainder of the
original 15 assets, as well as aggressively marketing our remaining office
assets.
If successful on all of these efforts, proceeds from dispositions could approach
$600 million.
New Development and Redevelopment Activities (Rick Sokolov)
- -----------------------------------------------------------
We had a productive quarter with three new developments opening, totaling 3.4
million square feet of GLA:
. The Mall of Georgia and The Mall of Georgia Crossing opened in August, and
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SIMON PROPERTY GROUP
Conference Text
November 9, 1999
. Concord Mills opened in September.
The Mall of Georgia is off to a great start hosting over 3 million shoppers
since the center opened. Based on the first several months, traffic projections
for the holiday season alone are at 6 million people. The mall has drawn a
significant tourist trade, including international tourism that was not
anticipated. 80-90% of the retailers are exceeding their plan. Disney was #4
in their chain on the East Coast, which includes New York City, and Old Navy has
been doing 3 to 4 times the volume of some of their freestanding stores in the
area. Finally, Mall of Georgia was #1 in the company for the quarter for
MALLPeRKS, with 7,000 newly enrolled, paid members. Nordstrom will open at Mall
of Georgia in March 2000, while Rich's will open in November 2000.
Concord Mills opened September 17th, and car and people counters in the first
month of business recorded over 500,000 cars with more than 1.5 million people.
Weekend traffic alone has been averaging over 250,000 people. Tenant sales have
been strong. Some of the better quality retailers such as Tommy Hilfiger, Polo
and Polo Jeans, Nautica and Banana Republic, opened for the first time with a
Mills grand opening, and all are producing very well. Banana Republic was in
the top 3 in the first month; Polo Jeans was in the top 2; and Ann Taylor Loft
was in the top 5. Concord has all three divisions of the Gap--Gap, Old Navy and
Banana Republic--and management is very pleased with how well they're doing.
The shoppertainment component--Jillian's, Nascar Silicon Speedway and Alabama
Grill--is also experiencing strong traffic and sales.
To finish out the year on the new development side, we will open The Shops at
North East Mall in Hurst, Texas, and the first phase of Waterford Lakes Town
Center in Orlando. Located adjacent to Simon's recently redeveloped North East
Mall, The Shops at North East Mall is approximately 85% leased. Phase I of
Waterford Lakes Town Center is 91% leased. Both centers are opening tenants
through out the month of November.
Our redevelopment program has had a very productive quarter, and significant
components have opened at The Shops at Mission Viejo. Nordstrom opened in
September, and Saks is opening November 18th. We have added almost 100,000
square feet of small shop space at Mission, and the entire center has been
renovated and is 100% leased. At Florida Mall, Burdines opened a 200,000 square
foot flagship store two weeks ago. And this week, we will open a 200,000 square
foot small shop expansion at Florida Mall that is 100% leased. Saks has opened
a new, expanded store at Town Center at Boca, which is doing very well. We will
open Nordstrom at Town Center at Boca in the fall of next year and then open
Nordstrom at Florida Mall in the spring of 2002. Our redevelopment program
continues to accelerate, and we have been producing substantial sales increases
at these properties.
Our typical, detailed disclosure for new development and redevelopment
activities will be provided in our 8-K that should be filed by the end of the
week.
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SIMON PROPERTY GROUP
Conference Text
November 9, 1999
International (Rick Sokolov)
As a logical next step in our international strategy, we have established a
London office. Hans Mautner, former CEO of Corporate Property Investors and
Vice Chairman of SPG, is the Chairman of Simon Global Limited, SPG's division
focused upon the pursuit of the Company's international initiatives, and has
relocated to London. Jim Giuliano is the President of Simon Global Limited and
will continue to be based out of Indianapolis.
We now have a total of 5 projects open and operating (3 in Poland and 2 in
France). Initial unlevered yields have been consistently in the 15% range. We
have invested $37.5 million in Europe to date, with SPG commitments for
additional funding totaling $25 million, subject to certain performance
criteria.
SPG is committed to bring to its international initiatives the same dedication,
creativity and professional expertise, which have made us the preeminent
shopping center company in the United States. We expect to be a significant
factor in the ongoing globalization of retailing and the shopping center
industry. To this extent, one of our strategies will be to pursue additional
external funding alternatives.
Simon Brand Ventures (David Simon)
Year-to-date growth in Simon Brand Ventures' income is in line with our
expectations. SBV has provided $31.4 million in income YTD in 1999 as compared
to $15.5 million for the first nine months of 1998. Some of this growth is due
to new SBV initiatives that have continued to rollout throughout 1998 and 1999,
and some growth is attributed to the implementation of existing SBV initiatives
in newly acquired properties.
The list of strategic initiatives and alliances continues to grow. In October,
we announced a $1.5 billion energy outsource agreement with Enron Energy
Services, a subsidiary of Enron, and a leading provider of energy outsourcing
services. Through the ten-year alliance, Enron will supply or manage all of the
energy commodity requirements throughout SPG's portfolio to deliver best-in-
class energy management services to our retailers and shoppers. We expect to
achieve significant cost savings and revenue increases in our energy operations
through Enron's ability to acquire energy on a lower cost basis, as well as
Enron's investment in updating equipment and technology.
We are also working on 2 major additional initiatives that we expect to be in a
position to announce before year-end.
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SIMON PROPERTY GROUP
Conference Text
November 9, 1999
Internet Initiatives (David Simon)
Last week we announced Simon's internet strategy, and I, personally, am very
excited about the opportunities available to us through the digital world. We
are fully committed to leading our retailers and shoppers to the next evolution
of commerce, blending the overwhelming brand importance and social experience of
mall shopping with the convenience of e-commerce. We have developed a
comprehensive, three-tier strategy to support our digital initiatives, and
Melanie Alshab, Simon's Chief Information Officer and President of
clixnmortar.com is here to explain.
Melanie Alshab
The three initial elements of our strategy address the following:
1. Digitizing the existing assets of Simon retail properties by implementing
web sites for all Simon properties;
2. Building new revenue streams, such as the wiring of the mall for broadband
capabilities; and
3. Incubating strategic ventures through clixnmortar.com, our venture creation
subsidiary.
The initial two tiers of Simon's digital initiatives will benefit Simon mall
properties across the country, as well as the thousands of retailers and the
millions of shoppers within our properties. Simon.com--the company's website
that was launched in 1997--has undergone numerous enhancements, including the
ability to purchase gift certificates and sign up for MALLPeRKS online.
Individual mall websites, which just went live last week, can be accessed from
the corporate website and offer community and mall events, sponsor information,
shopping forums, and general shopping tips and advice. When you're headed to
your favorite Simon mall, you can access the mall website to check for special
sales and shopping information specific to your destination. Simon mall web
sites are also e-commerce enabled by providing links to Simon Tenant web sites
from the mall directory, which means if you click on a mall retailer, it will
take you to that retailer's website.
We have also created an enhanced broadband network called TenantConnect.net that
is currently being beta tested in seven Simon malls with numerous retailers.
TenantConnect.net is a national retail Extranet that provides a cost effective,
reliable, enhanced broadband platform for applications such as tenant event
cybercasts, in-store multimedia presentations and Internet access, as well as
normal store system operations. TenantConnect provides the conduit in which
retailers can tie their physical and virtual capabilities, thereby enhancing the
shopping experience. TenantConnect.com is 100% owned by Simon.
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SIMON PROPERTY GROUP
Conference Text
November 9, 1999
Last week, we launched the most significant element of our digital strategy--
clixnmortar.com, a Simon subsidiary that leverages the company's physical mall
space, its 2.3 billion annual shopper visits, and its relationships with our
industry's foremost retailers--to provide consumers with connected and
continuous online and offline experiences.
Over the weekend, clixnmortar successfully test-launched FastFrog.com in Atlanta
at Gwinnett Place and Mall of Georgia. Teens loved it! It rides the wave of
technology with an exciting and hip product. This is how it works:
. Teens scan items from favorite retailers using a hand-held "ZapStick". They
can specify items for any gift-related occasion on a personalized Web site
and then email their list to friends, family, anybody who buys them gifts.
. The FastFrog.com experience represents the first time retail has accessed the
incredible purchasing power of teens by providing a customized retail
experience that is more fun or efficient than either e-commerce or physical
malls alone.
. Teens wield immense shopping power--their influence over their parents'
shopping habits will total more than $14 billion in 1999--and FastFrog takes
advantage of that potential.
. We have already built numerous alliances with leading retailers, including
Abercrombie & Fitch, American Eagle Outfitters, Foot Locker, and Camelot to
conduct this test.
Also test launching in Atlanta this winter is YourSherpa.com. Like FastFrog,
YourSherpa utilizes a sophisticated shopping tool that blends hand-held and
online wish list technology. YourSherpa will help busy adults shop in a more
efficient manner:
. First, shoppers scan their selected items from their favorite retailers.
. Payment is then made through a single channel--not with each individual
retailer.
. Finally, the labor intensive shopping fulfillment processes, like wrapping
and delivery, are outsourced to a trusted Sherpa Shopper.
. YourSherpa.com will be tested in Lenox Square.
Clixnmortar.com will become an important vehicle for incubating other ideas
blending "place and space." We are actively working on five such concepts and
have had over 100 concepts submitted to us. Additionally, last week we made an
equity investment in Piiq.com, a firm that aggregates online shopping.
All of these initiatives combine to take shopping to a new level--whether in-
mall or on-line--and provide a connection between our shoppers and retailers.
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SIMON PROPERTY GROUP
Conference Text
November 9, 1999
Conclusion (David Simon)
We have articulated a long-term strategy to you to increase the quality, scale
and major market presence of our portfolio. We believed this was the appropriate
course of action because:
. It increased our leverage with tenants
. It allowed for the creation of Simon Brand Ventures and accelerated its
growth
. We believe a high quality portfolio is recession resistant, and
. We believe a high quality portfolio is synergistic with our e-commerce
initiatives.
All of the elements of this long-term strategy are now in place. We have a
portfolio of unmatched size--over 180 million square feet--and quality, with
sales over $370 per square foot. We have major market penetration, with 75 malls
in the country's top 20 ADI markets. Our Simon Brand Ventures group is on pace
to produce over $40 million of net profits in 1999, and our newly announced
internet initiatives are off to a strong start.
All of this was also accomplished with an eye toward the balance sheet,
preserving our financial strength and enhancing our financial flexibility.
We look forward to 2000 and beyond with this unmatched platform for growth in
place.
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