<PAGE>
Exhibit 99.1
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, 2000, the Company, directly or through the Operating
Partnership, owned or had an interest in 251 properties which consisted of
regional malls, community shopping centers, and specialty and mixed-use
properties containing an aggregate of 184 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 190 million
square feet of GLA in retail and mixed-use properties.
This package was prepared to provide (1) ownership information, (2) certain
operational information, and (3) debt information as of September 30, 2000, 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. Readers are cautioned that
forward-looking statements involve risks and uncertainties, which may affect the
business and prospects of the Company and the Operating Partnership. We direct
you to the Company's various filings with the Securities and Exchange Commission
including Form 10-K and Form 10-Q for a detailed discussion of risks and
uncertainties.
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]
<PAGE>
Simon Property Group Economic Ownership Structure/(1)/
September 30, 2000
-------------------------------------------------------------------
Simon Property Group, Inc./(2)//(3)//(4)/
Common Shareholders Shares %
------------------- ------ -
Public Shareholders 166,520,021 96.9%
Simon Family 4,293,311 2.5%
DeBartolo Family 32,206 0.0%
Executive Management /(5)/ 1,089,180 0.6%
----------- -------
171,934,718/(4)/ 100.0%
----------- -------
-------------------------------------------------------------------
170,263,774 units
------------------------------
Simon Property Group, L.P.
235,230,000 units
------------------------------
64,966,226 units
------------------------------------------------------------------
Limited Partners:
("Limited Partners")
Unitholders Units %
----------- ----- -
Simon Family 34,584,455 53.2%
DeBartolo Family 21,759,328 33.5%
Executive Management/(5)/ 153,498 0.2%
Other Limited Partners 8,468,945 13.1%
---------- ------
64,966,226 100.0%
---------- ------
------------------------------------------------------------------
-------------------------------------------------
Ownership of Simon Property Group, L.P.
Simon Property Group, Inc. %
-
Public Shareholders 70.1%
Simon Family 1.8%
DeBartolo Family 0.0%
Executive Management/(5)/ 0.5%
-----
Subtotal 72.4%
-----
Limited Partners
Simon Family 14.7%
DeBartolo Family 9.2%
Executive Management/(5)/ 0.1%
Other Limited Partners 3.6%
-----
Subtotal 27.6%
Total -----
100.0%
------
-------------------------------------------------
(1) Schedule excludes preferred stock (see "Preferred Stock/Units
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 1,670,944.
This is the result of the direct ownership of Ocean County Mall by SPG,
partially offset by units issued to SPG in exchange for Northshore
Mall.
(5) Executive management excludes Simon family members.
<PAGE>
SIMON PROPERTY GROUP
Changes in Common Shares and Unit Ownership
For the Period from December 31, 1999 through September 30, 2000
<TABLE>
<CAPTION>
Operating
Partnership Company
Units/(1)/ Common Shares/(2)/
----------- ------------------
<S> <C> <C>
Number Outstanding at December 31, 1999 65,444,680 173,165,255
Restricted Stock Awards (Stock Incentive Program), Net - 421,502
Issuance of Stock for Stock Option Exercises - 13,360
Conversion of Series A Preferred Stock into Common Stock - 85,288
Conversion of Series B Preferred Stock into Common Stock - 36,913
Conversion of Units into Cash (478,454) -
Stock Purchased as Treasury Stock - (1,596,100)
Stock Purchased by Affiliated Captive Insurance Company - (191,500)
Number Outstanding at September 30, 2000 64,966,226 171,934,718
</TABLE>
------------------------------------------------------------------------------
Total Common Shares and Units Outstanding at September 30, 2000:
236,900,944/(2)/
------------------------------------------------------------------------------
Details for Diluted FFO Calculation:-
--------------------------------------
<TABLE>
<S> <C>
Company Common Shares Outstanding at September 30, 2000 171,934,718
Number of Common Shares Issuable Assuming Conversion of:
Series A Preferred 6.5% Convertible/(3)/ 1,940,005
Series B Preferred 6.5% Convertible/(3)/ 12,490,773
Net Number of Common Shares Issuable Assuming Exercise of Stock Options 107,214
Diluted Common Shares Outstanding at September 30, 2000 186,472,710
</TABLE>
-----------------------------------------------------------------------------
Fully Diluted Common Shares and Units Outstanding at September 30, 2000:
251,438,936
-----------------------------------------------------------------------------
(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).
(3) Conversion terms provided in footnotes (1) and (2) on page 8 of this
document.
<PAGE>
SIMON PROPERTY GROUP
Preferred Stock/Units Outstanding
As of September 30, 2000
($ in 000's)
<TABLE>
<CAPTION>
Number of Liquidation Ticker
Issuer Description Shares/Units Preference $ Symbol
Preferred Shares:
Convertible
----------------------------- ------------------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Simon Property Group, Inc. Series A Preferred 51,059 $1,000 $ 51,059 N/A
6.5% Convertible /(1)/
----------------------------- ------------------------- ----------- ----------- ----------- ----------
Simon Property Group, Inc. Series B Preferred 4,830,057 $100 $483,006 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 7.89% 3,000,000 $50 $150,000 N/A
Perpetual/(4)/
----------------------------- ------------------------- ----------- ----------- ----------- ----------
Simon Property Group, Inc. Series E Preferred 8% 1,000,000 $25 $25,000 N/A
Cumulative
Redeemable/(5)/
----------------------------- ------------------------- ----------- ----------- ----------- ----------
Preferred Units:
----------------------------- ------------------------- ----------- ----------- ----------- ----------
Simon Property Group, L.P. Series C 7% Cumulative 2,584,227 $28 $72,358 N/A
Convertible
Preferred/(6)/
----------------------------- ------------------------- ----------- ----------- ----------- ----------
Simon Property Group, L.P. Series D 8% Cumulative 2,584,227 $30 $77,527 N/A
Redeemable
Preferred/(7)/
----------------------------- ------------------------- ----------- ----------- ----------- ----------
</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, 2000, was $70 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.
(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, 2000, was $24.125 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 Mall of America acquisition. Simon Property
Group, Inc. Series E Preferred 8% Cumulative Redeemable Stock is not
redeemable prior to August 27, 2004.
(6) 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 if certain conditions are met. Each unit/share is not
redeemable prior to August 27, 2009.
(7) Issued in connection with the New England Development Acquisition. Each
unit/share is not redeemable prior to August 27, 2009.
<PAGE>
SIMON PROPERTY GROUP
Reconciliation of Income to Funds From Operations ("FFO")
As of September 30, 2000
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
The Operating Partnership 2000 1999 2000 1999
------------------------- -------- -------- --------- ----------
<S> <C> <C> <C> <C>
Income Before Extraordinary Items and Cumulative Effect $77,434 $87,125 $224,482 $221,851
of Accounting Change
Plus: Real Estate Depreciation and Amortization from 105,600 93,182 302,742 272,263
Combined Consolidated Properties
Plus: Simon Group's Share of Real Estate Depreciation and
Amortization and Extraordinary Items from
Unconsolidated Affiliates 30,395 17,900 87,251 59,191
Less: Unusual Item (1) - (12,000) - (12,000)
Less: (Gain) Loss on Sale of Real Estate, Net (2) (151) - (8,809) 9,308
Less: Minority Interest Portion of Real Estate Depreciation and
Amortization (1,491) (1,516) (4,446) (3,566)
Less: Preferred Distributions (including those of subsidiary) (19,334) (16,690) (58,074) (50,518)
-------- -------- -------- --------
FFO of the Simon Group Portfolio $192,453 $168,001 $543,146 $496,529
-------- -------- -------- --------
Percent Increase 14.6% 9.4%
===============================================================================================================================
FFO of the Simon Portfolio $192,453 $168,001 $543,146 $496,529
Basic FFO per Paired Share:
--------------------------
Basic FFO Allocable to the Company $139,472 $122,205 $394,021 $361,564
Basic Weighted Average Paired Shares Outstanding 172,759 173,471 173,216 171,950
Basic FFO per Paired Share $0.81 $0.70 $2.27 $2.10
======== ======== ======== ========
Percent Increase 15.7% 8.1%
Diluted FFO per Paired Share:
----------------------------
Diluted FFO Allocable to the Company $148,962 $131,364 $421,997 $390,933
Diluted Weighted Average Number of Equivalent Paired Shares 187,293 188,094 187,803 187,917
Diluted FFO per Paired Share $0.80 $0.70 $2.25 $2.08
======== ======== ======== ========
Percent Increase 14.3% (3) 8.2% (3)
===============================================================================================================================
</TABLE>
(1) Relates to litigation filed by former employees/shareholders of DeBartolo
Realty Corporation (purchased by SPG in 1996) regarding stock incentive
plan shares. Judgment was rendered in favor of SPG in district court, but
reversed by appellate court on August 18, 1999.
(2) Net of asset write downs of $10.57 million for the nine months ended
September 30, 2000.
(3) On January 1, 2000, the Company adopted Staff Accounting Bulletin 101 ("SAB
101"), which addresses certain revenue recognition policies, including the
accounting for overage rent by a landlord. In addition, the Company adopted
NAREIT's FFO definition clarification, which requires inclusion in FFO of
the effects of non-recurring items. 1999 results include a charge related
to litigation. If the Company's 1999 results were restated to reflect the
adoption of SAB 101 and to add back the non-recurring charge, 1999 FFO
would be reduced and comparable growth from 1999 to 2000 would be as
follows:
<TABLE>
<CAPTION>
Three Months Ended 9/30 Nine Months Ended 9/30
--------------------------------- ---------------------------------
Adjusted Adjusted
Impact to 1999 Comp Impact to 1999 Comp
1999 Amounts Amounts Growth 1999 Amounts Amounts Growth
------- ------ ------------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
FFO of the Simon Portfolio $ 9,400 $177,401 8.5% $ (1,950) $ 494,579 9.8%
Basic FFO Allocable to the Company $ 6,760 $128,965 8.1% $ (1,458) $ 360,106 9.4%
Basic FFO per Paired Share $ 0.04 $ 0.74 9.5% $ (0.01) $ 2.09 8.6%
Diluted FFO Allocable to the Company $ 6,876 $138,240 7.8% $ (1,522) $ 389,411 8.4%
Diluted FFO per Paired Share $ 0.04 $ 0.74 8.1% $ (0.01) $ 2.07 8.7%
</TABLE>
<PAGE>
SIMON PROPERTY GROUP
Selected Financial Information
As of September 30, 2000
(In thousands, except as noted)
<TABLE>
<CAPTION>
As of or for the
Nine Months Ended
September 30,
2000 1999 % Change
----------- ----------- ---------
<S> <C> <C> <C>
Financial Highlights of the Company
------------------------------------
Total Revenue - Consolidated Properties $1,459,436 $1,371,270 6.4%
Total EBITDA of the Simon Group Portfolio $1,506,114 $1,287,660 17.0%
Simon Group's Share of EBITDA $1,160,380 $1,029,314 12.7%
Net Income Available to Common Shareholders $ 111,280 $ 115,851 -3.9%
Basic Net Income per Common Share $ 0.64 $ 0.67 -4.5%
Diluted Net Income per Common Share $ 0.64 $ 0.67 -4.5%
FFO of the Simon Group Portfolio $ 543,146 $ 496,529 9.4% (1)
Basic FFO Allocable to the Company $ 394,021 $ 361,564 9.0% (1)
Diluted FFO Allocable to the Company $ 421,997 $ 390,933 7.9% (1)
Basic FFO per Common Share $ 2.27 $ 2.10 8.1% (1)
Diluted FFO per Common Share $ 2.25 $ 2.08 8.2% (1)
Distributions per Common Share $ 1.5150 $ 1.5150 0.0%
</TABLE>
(1) See footnote 3 on page 9 for comparable growth rates.
<PAGE>
SIMON PROPERTY GROUP
Selected Financial Information
As of September 30, 2000
(In thousands, except as noted)
<TABLE>
<CAPTION>
As of or for the
Nine Months Ended
September 30,
2000 1999 % Change
----------- ----------- ---------
<S> <C> <C> <C>
Operational Statistics
----------------------
Occupancy at End of Period:
Regional Malls /(1)/ 90.5% 88.5% 2.0%
Community Shopping Centers /(2)/ 91.8% 90.2% 1.6%
Average Base Rent per Square Foot:
Regional Malls /(1)/ $ 27.97 $ 26.75 4.6%
Community Shopping Centers /(2)/ $ 9.22 $ 7.96 15.8%
Regional Malls:
Total Tenant Sales Volume, in millions /(3)(4)/ $ 10,842 $ 9,624 12.7%
Comparable Sales per Square Foot /(4)/ $ 385 $ 371 3.8%
Total Sales per Square Foot /(4)/ $ 375 $ 356 5.3%
Number of U.S. Properties Open at End of Period 251 253 -0.8%
Total U.S. GLA at End of Period, in millions of square feet 184.1 177.2 3.9%
</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.
<PAGE>
SIMON PROPERTY GROUP
Selected Financial Information
As of September 30, 2000
(In thousands, except as noted)
<TABLE>
<CAPTION>
September 30, September 30,
Equity Information 2000 1999
------------------ ------------ ------------
<S> <C> <C>
Limited Partner Units Outstanding at End of Period 64,966 64,905
Common Shares Outstanding at End of Period 171,935 173,480
------------ ------------
Total Common Shares and Units Outstanding at End of Period 236,901 238,385
============ ============
Basic Weighted Average Paired Shares Outstanding 173,216 171,950
Diluted Weighted Average Number of Equivalent Paired Shares/(1)/ 187,803 187,917
<CAPTION>
September 30, December 31,
Debt Information 2000 1999
---------------- ------------ ------------
<S> <C> <C>
Consolidated Debt $ 8,792,597 $ 8,768,951
Simon Group's Share of Joint Venture Debt $ 1,993,834 $ 1,886,360
Debt-to-Market Capitalization
-----------------------------
Common Stock Price at End of Period $ 23.4375 $ 28.5000
Equity Market Capitalization/(2)/ $ 6,473,316 $ 7,608,188
Total Consolidated Capitalization $15,265,913 $16,377,139
Total Capitalization - Including Simon Group's Share of JV Debt $17,259,747 $18,263,499
</TABLE>
(1) Diluted for purposes of computing FFO per share.
(2) Market value of Common Stock, Units and all issues of Preferred Stock of
SPG and SPG Properties, Inc.
<PAGE>
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data
As of September 30, 2000
<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 96,575,642 30,444,839 27.6% 98.2% $3.82
-Mall Store 56,201,358 56,153,462 50.9% 90.3% $28.63
-Freestanding 3,687,522 1,856,074 1.7% 94.7% $9.68
---------- ---------- ----
Subtotal 59,888,880 58,009,536 52.6% 90.5% $27.97
Regional Mall Total 156,464,522 88,454,375 80.2% 93.1% $19.25
Community Shopping Centers
--------------------------
-Anchor 12,751,887 8,064,890 7.4% 94.7% $7.57
-Mall Store 4,215,754 4,129,996 3.7% 86.2% 12.79
-Freestanding 803,598 314,588 .3% 92.0% 8.99
---------- --------- ---
Community Ctr. Total 17,771,239 12,509,474 11.4% 91.8% $9.22
Office Portion of
Mixed-Use Properties 2,460,760 2,460,760 2.2% 90.1% $18.80
Value-Oriented
Super-Regional Malls 5,457,574 5,332,574 4.8% 94.3% $16.38
Other 1,980,520 1,495,170 1.4%
GRAND TOTAL 184,134,615 110,252,353 100.00%
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Occupancy History
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Community
As of Regional Malls(1) Shopping Centers(2)
----- -------------- ----------------
------------------------------------------------------------------------------------
9/30/00 90.5% 91.8%
9/30/99 88.5% 90.2%
------------------------------------------------------------------------------------
12/31/99 90.6% 88.6%
12/31/98 90.0% 91.4%
12/31/97 87.3% 91.3%
12/31/96 84.7% 91.6%
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
</TABLE>
9
<PAGE>
SIMON PROPERTY GROUP
Rent Information
As of September 30, 2000
------------------
Average Base Rent
------------------
Mall & Freestanding % Community %
As of Stores at Regional Malls Change Shopping Centers Change
-----------------------------------------------------------------------------
9/30/00 $27.97 4.6% $9.22 15.8%
9/30/99 26.75 - 7.96 -
-----------------------------------------------------------------------------
12/31/99 $27.33 6.3% $8.36 8.9%
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
---------------
Rental Rates
---------------
Base Rent/(1)/
---------
Store Openings Store Closings Amount of Change
-----------------
Year During Period During Period Dollar Percentage
---- ------------- ------------- ------ ----------
Regional Malls:
------------------------------------------------------------------------
2000 (YTD) $33.78 $30.10 $3.68 12.2%
------------------------------------------------------------------------
1999 31.25 24.55 6.70 27.3
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:
---------------------------
------------------------------------------------------------------------
2000 (YTD) $13.06 $11.00 $2.06 18.7%
------------------------------------------------------------------------
1999 10.26 7.44 2.82 37.9
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
(1) 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.
<PAGE>
SIMON PROPERTY GROUP
Lease Expirations/(1)/
As of September 30, 2000
Number of Square Avg. Base Rent
Year Leases Expiring Feet per Square Foot
at 9/30/00
------------------------------------------------------
Regional Malls - Mall & Freestanding Stores
------------------------------------------------------
2000 (10/1 - 12/31) 502 387,951 $ 32.48
2001 1,604 3,529,423 26.28
2002 1,675 3,542,096 27.84
2003 1,922 4,371,615 30.11
2004 1,722 4,616,650 29.00
2005 1,651 5,097,655 27.85
2006 1,523 4,224,064 29.74
2007 1,418 4,117,273 31.85
2008 1,281 4,463,435 29.79
2009 1,376 4,533,030 28.19
--------- ----------
TOTALS 14,674 38,883,192 $ 29.06
---------------------------------
Regional Malls - Anchor Tenants
---------------------------------
2000 (10/1 - 12/31) 1 210,737 $ 2.71
2001 10 1,117,830 1.96
2002 16 1,948,271 1.85
2003 18 2,156,140 2.29
2004 25 2,462,680 3.31
2005 20 2,567,106 2.36
2006 18 2,177,104 3.28
2007 6 766,048 1.77
2008 14 1,400,573 4.81
2009 16 1,986,791 2.82
--------- ----------
TOTALS 144 16,793,280 $ 2.76
-------------------------------------------------------
Community Centers - Mall Stores & Freestanding Stores
-------------------------------------------------------
2000 (10/1 - 12/31) 69 39,126 $ 15.92
2001 163 416,189 12.80
2002 170 555,526 11.58
2003 151 567,207 11.98
2004 125 445,833 13.29
2005 191 744,567 16.61
2006 44 255,255 13.06
2007 33 238,387 15.81
2008 15 110,145 13.27
2009 15 89,718 16.02
--------- ----------
TOTALS 976 3,461,953 $ 13.70
(1) Does not consider the impact of options to renew that may be contained in
leases.
<PAGE>
SIMON PROPERTY GROUP
Lease Expirations/(1)/
As of September 30, 2000
Number of Square Avg. Base Rent
Year Leases Expiring Feet per Square Foot
at 9/30/00
------------------------------------------
Community Centers - Anchor Tenants
------------------------------------------
2000 (10/1 - 12/31) 1 20,929 $ 8.34
2001 8 282,837 4.69
2002 8 234,940 6.89
2003 14 570,752 4.87
2004 12 410,586 5.03
2005 16 728,911 6.40
2006 13 571,379 5.90
2007 11 466,173 6.28
2008 9 237,172 10.94
2009 15 689,636 6.92
---------- ---------
TOTALS 107 4,213,315 $ 6.26
(1) Does not consider the impact of options to renew that may be c ontained in
leases.
<PAGE>
SIMON PROPERTY GROUP
SPG's Share of Total Debt Amortization and Maturities by Year
As of September 30, 2000
(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 Debt Debt
------------------------------------------ -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
2000 0 5,599 0 72,226 77,825
2001.................. 1 253,103 925,000 113,454 1,291,557
2002.................. 2 395,697 522,929 90,716 1,009,342
2003.................. 3 651,291 1,220,000 330,281 2,201,572
2004.................. 4 601,478 728,200 199,890 1,529,568
2005.................. 5 155,445 660,000 233,485 1,048,930
2006.................. 6 132,843 250,000 330,192 713,035
2007.................. 7 270,392 180,000 137,036 587,428
2008.................. 8 44,042 200,000 294,634 538,676
2009.................. 9 330,700 450,000 39,857 820,557
Thereafter 134,107 525,000 140,838 799,945
-------------- -------------- ------------- -------------
Subtotal Face Amounts $2,974,697 $5,661,129 $1,982,608 $10,618,434
-------------- -------------- ------------- -------------
Premiums and Discounts on Indebtedness, Net (1,379) 2,278 11,226 12,125
-------------- -------------- ------------- -------------
SPG's Share of Total Indebtedness $2,973,318 $5,663,407 $1,993,834 $10,630,559
============== ============== ============= =============
</TABLE>
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness
As of September 30, 2000
(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 (1) 2,528,409 2,379,211 7.43% 5.5
Other Hedged Debt 51,000 51,000 8.90% 2.2
Floating Rate Debt 552,245 544,486 7.96% 3.1
------------ ------------- ------------ -----------
Total Mortgage Debt 3,131,654 2,974,697 7.55% 5.0
Unsecured Debt
Fixed Rate (1) 3,818,200 3,818,200 7.17% 6.3
Floating Rate Debt 272,929 272,929 7.42% 1.6
------------ ------------- ------------ -----------
Subtotal 4,091,129 4,091,129 7.19% 6.0
Acquisition Facility 925,000 925,000 7.27% 0.7
Revolving Corporate Credit Facility 505,000 505,000 7.27% 2.9
Revolving Corporate Credit Facility (Hedged) 140,000 140,000 7.27% 2.9
------------ ------------- ------------ -----------
Total Unsecured Debt 5,661,129 5,661,129 7.21% 4.8
Adjustment to Fair Market Value - Fixed Rate (717) 366 N/A N/A
Adjustment to Fair Market Value - Variable Rate 531 533 N/A N/A
------------ ------------- ------------ -----------
Consolidated Mortgages and Other Indebtedness 8,792,597 8,636,725 7.33% 4.9
============ ============= ============ ===========
Joint Venture Indebtedness
Mortgage Debt
Fixed Rate 3,096,989 1,341,229 7.43% 5.6
Other Hedged Debt 969,616 349,019 7.46% 3.4
Floating Rate Debt 666,492 288,232 7.88% 2.0
------------ ------------- ------------ -----------
Subtotal 4,733,097 1,978,480 7.50% 4.7
Unsecured Floating Rate Debt 8,400 4,128 9.12% 1.8
Adjustment to Fair Market Value - Fixed Rate 18,326 11,226 N/A N/A
------------ ------------- ------------ -----------
Joint Venture Mortgages and Other Indebtedness 4,759,823 1,993,834 7.50% 4.7
============ ============= ============ ===========
SPG's Share of Total Indebtedness 10,630,559 7.36% 4.8
============= ============ ===========
</TABLE>
(1) Includes $213,200 of variable rate debt, of which $177,169 is SPG's
share, that is effectively fixed to maturity through the use of interest
rate hedges.
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 2000
(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:
------------------------
Biltmore Square 01/01/2001 7.15% 25,033 16,697
Chesapeake Square 01/01/2001 7.28% 45,600 34,200
Port Charlotte Town Center 01/01/2001 7.28% 51,594 41,275
Great Lakes Mall - 1 03/01/2001 6.74% 52,632 52,632
Great Lakes Mall - 2 03/01/2001 7.07% 8,489 8,489
Windsor Park Mall - 1 03/01/2001 8.00% 5,631 5,631
Orland Square 09/01/2001 7.74% 50,000 50,000
------- -------
Subtotal 2001 238,979 208,924 7.25%
Lima Mall - 1 03/01/2002 7.12% 14,180 14,180
Lima Mall - 2 03/01/2002 7.12% 4,723 4,723
Columbia Center 03/15/2002 7.62% 42,326 42,326
Northgate Shopping Center 03/15/2002 7.62% 79,035 79,035
Tacoma Mall 03/15/2002 7.62% 92,474 92,474
River Oaks Center 06/01/2002 8.67% 32,500 32,500
North Riverside Park Plaza - 1 09/01/2002 9.38% 3,703 3,703
North Riverside Park Plaza - 2 09/01/2002 10.00% 3,562 3,562
Palm Beach Mall 12/15/2002 7.50% 48,574 48,574
Other 05/31/2002 6.80% 448 448
Other 12/01/2002 8.00% 719 719
------- -------
Subtotal 2002 322,244 322,244 7.72%
Principal Mutual Mortgages - Pool 1 (1) 03/15/2003 6.79% 103,043 103,043
Principal Mutual Mortgages - Pool 2 (2) 03/15/2003 6.77% 137,568 137,568
Century III Mall 07/01/2003 6.78% 66,000 66,000
Miami International Mall 12/21/2003 6.91% 45,471 27,283
------- -------
Subtotal 2003 352,082 333,894 6.79%
Battlefield Mall - 1 01/01/2004 7.50% 46,691 46,691
Battlefield Mall - 2 01/01/2004 6.81% 44,183 44,183
Forum Phase I - Class A-2 05/15/2004 6.19% 44,386 26,632
Forum Phase II - Class A-2 05/15/2004 6.19% 40,614 22,338
Forum Phase I - Class A-1 05/15/2004 7.13% 46,996 28,198
Forum Phase II - Class A-1 05/15/2004 7.13% 43,004 23,652
CMBS Loan - Variable Component (5) 12/15/2004 6.16% 50,000 50,000
CMBS Loan - Fixed Component 12/15/2004 7.31% 175,000 175,000
------- -------
Subtotal 2004 490,874 416,693 6.98%
Tippecanoe Mall - 1 (3) 01/01/2005 8.45% 44,865 44,865
Tippecanoe Mall - 2 (3) 01/01/2005 6.81% 15,712 15,712
Melbourne Square 02/01/2005 7.42% 38,492 38,492
Cielo Vista Mall - 2 11/01/2005 8.13% 1,562 1,562
------- -------
Subtotal 2005 100,631 100,631 7.79%
Treasure Coast Square - 1 01/01/2006 7.42% 51,794 51,794
Treasure Coast Square - 2 01/01/2006 8.06% 11,918 11,918
Gulf View Square 10/01/2006 8.25% 36,606 36,606
Paddock Mall 10/01/2006 8.25% 29,114 29,114
------- -------
Subtotal 2006 129,432 129,432 7.90%
</TABLE>
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 2000
(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>
Lakeline Mall 05/01/2007 7.65% 71,581 71,581
Cielo Vista Mall - 1 (4) 05/01/2007 9.38% 53,945 53,945
Cielo Vista Mall - 3 (4) 05/01/2007 6.76% 38,254 38,254
McCain Mall - 1 (4) 05/01/2007 9.38% 25,190 25,190
McCain Mall - 2 (4) 05/01/2007 6.76% 17,657 17,657
Valle Vista Mall - 1 (4) 05/01/2007 9.38% 33,394 33,394
Valle Vista Mall - 2 (4) 05/01/2007 6.81% 7,818 7,818
University Park Mall 10/01/2007 7.43% 59,500 35,700
------- -------
Subtotal 2007 307,339 283,539 8.11%
Arsenal Mall - 1 09/28/2008 6.75% 34,364 34,364
------- -------
Subtotal 2008 34,364 34,364 6.75%
College Mall - 1 (3) 01/01/2009 7.00% 40,833 40,833
College Mall - 2 (3) 01/01/2009 6.76% 11,782 11,782
Greenwood Park Mall - 1 (3) 01/01/2009 7.00% 34,199 34,199
Greenwood Park Mall - 2 (3) 01/01/2009 6.76% 60,875 60,875
Towne East Square - 1 (3) 01/01/2009 7.00% 53,987 53,987
Towne East Square - 2 (3) 01/01/2009 6.81% 24,550 24,550
Bloomingdale Court 10/01/2009 7.78% 29,684 29,684
Forest Plaza 10/01/2009 7.78% 16,282 16,282
Lake View Plaza 10/01/2009 7.78% 21,643 21,643
Lakeline Plaza 10/01/2009 7.78% 23,727 23,727
Lincoln Crossing 10/01/2009 7.78% 3,276 3,276
Matteson Plaza 10/01/2009 7.78% 9,530 9,530
Muncie Plaza 10/01/2009 7.78% 8,240 8,240
Regency Plaza 10/01/2009 7.78% 4,467 4,467
St. Charles Towne Plaza 10/01/2009 7.78% 28,592 28,592
West Ridge Plaza 10/01/2009 7.78% 5,758 5,758
White Oaks Plaza 10/01/2009 7.78% 17,572 17,572
------- -------
Subtotal 2009 394,997 394,997 7.28%
Trolley Square 08/01/2010 9.03% 29,741 26,767
------- -------
Subtotal 2010 29,741 26,767 9.03%
Windsor Park Mall - 2 05/01/2012 8.00% 8,657 8,657
------- -------
Subtotal 2012 8,657 8,657 8.00%
Chesapeake Center 05/15/2015 8.44% 6,563 6,563
Grove at Lakeland Square, The 05/15/2015 8.44% 3,750 3,750
Terrace at Florida Mall, The 05/15/2015 8.44% 4,688 4,688
------- -------
Subtotal 2015 15,001 15,001 8.44%
Arsenal Mall - 2 05/15/2016 8.20% 2,183 2,183
------- -------
Subtotal 2016 2,183 2,183 8.20%
Sunland Park Mall 01/01/2026 8.63% 38,817 38,817
------- -------
Subtotal 2026 38,817 38,817 8.63%
</TABLE>
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 2000
(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>
Keystone at the Crossing 07/01/2027 7.85% 63,068 63,068
------------ ------------
Subtotal 2027 63,068 63,068 7.85%
------------ ------------ ---------
Total Consolidated Fixed Rate
Mortgage Debt 2,528,409 2,379,211 7.43%
============ ============ =========
Variable Rate Mortgage Debt:
---------------------------
Crystal River 01/01/2001 9.62% 15,292 15,292
White Oaks Mall 03/01/2001 8.39% 16,500 9,062
------------ ------------
Subtotal 2001 31,792 24,354 9.16%
Highland Lakes Center 03/01/2002 8.12% 14,377 14,377
Mainland Crossing 03/31/2002 8.12% 1,603 1,282
Randall Park Mall - 1 (6) 12/11/2002 8.72% 35,000 35,000
Randall Park Mall - 2 (6) 12/11/2002 11.62% 5,000 5,000
------------ ------------
Subtotal 2002 55,980 55,659 8.81%
Jefferson Valley Mall (6) 01/11/2003 7.87% 60,000 60,000
Raleigh Springs Mall 02/23/2003 8.27% 11,000 11,000
Richmond Towne Square (6) 07/15/2003 7.62% 56,259 56,259
Shops @ Mission Viejo (6) 08/31/2003 7.77% 137,816 137,816
Arboretum (6) 11/30/2003 8.12% 34,000 34,000
------------ ------------
Subtotal 2003 299,075 299,075 7.82%
North East Mall (6) 05/20/2004 7.99% 119,905 119,905
Waterford Lakes (6) 08/15/2004 8.02% 51,493 51,493
------------ ------------
Subtotal 2004 171,398 171,398 8.00%
Brunswick Square (6) 06/12/2005 8.12% 45,000 45,000
------------ ------------
Subtotal 2005 45,000 45,000 8.12%
------------ ------------ -------
Total Variable Rate Mortgage Debt 603,245 595,486 8.04%
============ ============ =======
------------ -------
Total Consolidated Mortgage Debt 2,974,697 7.55%
============ =======
Fixed Rate Unsecured Debt:
-------------------------
Unsecured Notes - CPI 1 03/15/2002 9.00% 250,000 250,000
------------ ------------
Subtotal 2002 250,000 250,000 9.00%
Unsecured Notes - CPI 2 04/01/2003 7.05% 100,000 100,000
SPG, LP (Bonds) 06/15/2003 6.63% 375,000 375,000
SPG, LP (PATS) 11/15/2003 6.75% 100,000 100,000
------------ ------------
Subtotal 2003 575,000 575,000 6.72%
SCA (Bonds) 01/15/2004 6.75% 150,000 150,000
Simon ERE Facility (6) 07/31/2004 7.75% 28,200 28,200
SPG, LP (Bonds) 02/09/2004 6.75% 300,000 300,000
SPG, LP (Bonds) 07/15/2004 6.75% 100,000 100,000
Unsecured Notes - CPI 3 08/15/2004 7.75% 150,000 150,000
------------ ------------
Subtotal 2004 728,200 728,200 6.99%
</TABLE>
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 2000
(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>
SCA (Bonds) 05/15/2005 7.63% 110,000 110,000
SPG, LP (Bonds) 06/15/2005 6.75% 300,000 300,000
SPG, LP (MTN) 06/24/2005 7.13% 100,000 100,000
SPG, LP (Bonds) 10/27/2005 6.88% 150,000 150,000
---------- ----------
Subtotal 2005 660,000 660,000 6.98%
SPG, LP (Bonds) 11/15/2006 6.88% 250,000 250,000
---------- ----------
Subtotal 2006 250,000 250,000 6.88%
SPG, LP (MTN) 09/20/2007 7.13% 180,000 180,000
---------- ----------
Subtotal 2007 180,000 180,000 7.13%
SPG, LP (MOPPRS) 06/15/2008 7.00% 200,000 200,000
---------- ----------
Subtotal 2008 200,000 200,000 7.00%
SPG, LP (Bonds) 02/09/2009 7.13% 300,000 300,000
SPG, LP (Bonds) 07/15/2009 7.00% 150,000 150,000
---------- ----------
Subtotal 2009 450,000 450,000 7.08%
Unsecured Notes - CPI 4 09/01/2013 7.18% 75,000 75,000
---------- ----------
Subtotal 2013 75,000 75,000 7.18%
Unsecured Notes - CPI 5 03/15/2016 7.88% 250,000 250,000
---------- ----------
Subtotal 2016 250,000 250,000 7.88%
SPG, LP (Bonds) 06/15/2018 7.38% 200,000 200,000
---------- ----------
Subtotal 2018 200,000 200,000 7.38%
---------- ----------
Total Unsecured Fixed Rate Debt 3,818,200 3,818,200 7.17%
========== ==========
Variable Rate Unsecured Debt:
----------------------------
Acquisition Facility - 2 03/24/2001 7.27% 450,000 450,000
Acquisition Facility - 3 09/24/2001 7.27% 475,000 475,000
---------- ----------
Subtotal 2001 925,000 925,000 7.27%
SPG, L.P. Unsecured Loan - 1 (6) 02/28/2002 7.42% 150,000 150,000
SPG, L.P. Unsecured Loan - 3 (8) 03/30/2002 7.62% 22,929 22,929
SPG, L.P. Unsecured Loan - 2 (6) 08/28/2002 7.42% 100,000 100,000
---------- ----------
Subtotal 2002 272,929 272,929 7.43%
Corporate Revolving Credit
Facility (6) 08/25/2003 7.27% 645,000 645,000
---------- ----------
Subtotal 2003 645,000 645,000 7.27%
---------- ----------
Total Unsecured Variable Rate Debt 1,842,929 1,842,929 7.29%
========== ==========
----------
Total Unsecured Debt 5,661,129 7.21%
==========
</TABLE>
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 2000
(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>
Net Premium on Fixed-Rate Indebtedness (717) 366 N/A
Net Premium on Variable-Rate Indebtedness 531 533 N/A
------------- --------
Total Consolidated Debt 8,636,725 7.33%
------------- --------
Joint Venture Indebtedness
Fixed Rate Mortgage Debt:
------------------------
Atrium at Chestnut Hill - 1 4/1/01 7.29% 42,305 20,788
Atrium at Chestnut Hill - 2 4/1/01 8.16% 11,594 5,697
Highland Mall - 2 10/1/01 8.50% 119 60
Highland Mall - 3 11/1/01 9.50% 1,199 600
Square One 12/1/01 8.40% 104,861 51,526
------------ -------------
Subtotal 2001 160,078 78,670 8.10%
Crystal Mall 2/ 1/03 8.66% 48,369 36,068
Avenues, The 5/15/03 8.36% 56,345 14,086
------------ -------------
Subtotal 2003 104,714 50,154 8.58%
Solomon Pond 2/1/04 7.83% 95,459 46,906
Northshore Mall 5/14/04 9.05% 161,000 79,111
Indian River Commons 11/01/04 7.58% 8,399 4,200
Indian River Mall 11/01/04 7.58% 46,602 23,301
------------ -------------
Subtotal 2004 311,460 153,518 8.41%
Westchester, The - 1 9/1/05 8.74% 149,872 74,936
Westchester, The - 2 9/1/05 7.20% 53,241 26,621
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 303,113 132,882 8.07%
Seminole Towne Center 1/1/06 6.88% 70,500 31,725
CMBS Loan - Fixed Component (7) 5/1/06 7.41% 300,000 150,000
CMBS Loan - Fixed Component - 2 (7) 5/5/06 8.13% 57,100 28,550
Great Northeast Plaza 6/1/06 9.04% 17,396 8,698
Smith Haven Mall 6/1/06 7.86% 115,000 28,750
Mall of Georgia Crossing 6/9/06 7.25% 33,733 16,867
Greendale Mall 11/1/06 8.23% 41,800 20,539
------------ -------------
Subtotal 2006 635,529 285,129 7.57%
</TABLE>
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 2000
(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>
Town Center at Cobb - 1 4/1/07 7.54% 49,830 24,915
Town Center at Cobb - 2 4/1/07 7.25% 65,037 32,519
Gwinnett Place - 1 4/1/07 7.54% 39,110 19,555
Gwinnett Place - 2 4/1/07 7.25% 85,460 42,730
Mall at Rockingham 1 8/1/07 7.88% 100,000 24,569
------------ -------------
Subtotal 2007 339,437 144,287 6.10%
Metrocenter 2/28/08 8.45% 30,474 15,237
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% 104,049 51,127
Mall of New Hampshire - 2 10/1/08 8.53% 8,443 4,149
Grapevine Mills 10/1/08 6.47% 155,000 58,125
Ontario Mills - 5 11/2/08 6.75% 142,620 35,655
Source, The 11/6/08 6.65% 124,000 31,000
------------ -------------
Subtotal 2008 840,586 299,959 6.82%
Apple Blossom Mall 9/10/09 7.99% 40,713 20,005
Auburn Mall 9/10/09 7.99% 47,664 23,421
Highland Mall - 1 12/1/09 9.75% 7,142 3,571
Ontario Mills - 4 12/28/09 n/a 4,198 1,050
------------ -------------
Subtotal 2009 99,717 48,047 7.95%
Mall of Georgia 7/1/10 7.09% 200,000 100,000
Coral Square 10/1/10 8.00% 90,000 45,000
------------ -------------
Subtotal 2010 290,000 145,000 7.37%
Polska Shopping Mall 12/31/11 6.49% 12,355 3,583
------------ -------------
Subtotal 2011 12,355 3,583 6.49%
------------ ------------- ----
Total Joint Venture Fixed Rate Mortgage Debt 3,096,989 1,341,229 7.43%
============ ============= ====
Variable Rate Mortgage Debt:
---------------------------
Dadeland Mall 12/10/00 7.32% 140,000 70,000
------------ -------------
Subtotal 2000 140,000 70,000 7.32%
Tower Shops, The 3/13/01 7.82% 12,900 6,450
Liberty Tree Mall 10/1/01 8.12% 46,843 23,017
------------ -------------
Subtotal 2001 59,743 29,467 8.05%
Montreal Forum 1/31/02 7.50% 11,011 3,923
Arizona Mills (6) 2/1/02 7.92% 142,216 37,425
Shops at Sunset Place, The (6) 6/30/02 7.87% 114,608 42,978
------------ -------------
Subtotal 2002 267,835 84,326 7.87%
Cape Cod Mall (6) 4/1/03 8.42% 65,912 32,387
CMBS Loan - Floating Component (IBM) (7) 5/1/03 7.12% 184,500 92,250
Mall of America 11/19/03 7.13% 312,000 85,800
Concord Mills (6) 12/2/03 7.97% 177,379 66,517
------------ -------------
Subtotal 2003 739,791 276,954 7.48%
</TABLE>
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of September 30, 2000
(In thousands)
<TABLE>
<CAPTION>
------------- --------------
------------------------------------------ --------- --------- ------------- SPG's Weighted Avg
Property Matarity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
------------------------------------------ --------- -------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Circle Centre Mall - 1 (6) 1/31/04 7.06% 60,000 8,802
Circle Centre Mall - 2 (6) 1/31/04 8.12% 7,500 1,100
Orlando Premium Outlets (6) 2/12/04 8.12% 50,158 25,079
------------ -------------
Subtotal 2004 117,658 34,981 7.85%
Emerald Square Mall (6) 3/31/05 8.11% 145,000 71,249
Arundel Mills (6) 4/30/05 8.27% 47,681 17,880
Northfield Square (6) 4/30/05 9.12% 37,000 11,692
------------ -------------
Subtotal 2005 229,681 100,822 8.25%
CMBS Loan - Floating Component - 2 (7) 5/15/06 6.99% 81,400 40,700
------------ -------------
Subtotal 2006 81,400 40,700 6.99%
------------ ------------- ----
Total Joint Venture Variable Rate Debt 1,636,108 637,251 7.65%
============ ============= ====
Unsecured Debt:
--------------
Mayflower Realty Credit Facility 07/12/02 9.12% 8,400 4,128
------------ -------------
Subtotal 2002 8,400 4,128 9.12%
CMBS Loan - Fixed Premium 16,745 9,282
Net Premium on NED Fixed-Rate Indebtedness 1,581 1,944
------------- ----
Total Joint Venture Debt 1,993,834 7.50%
------------- ----
------------- ----
SPG's Share of Total Indebtedness 10,630,559 7.36%
------------- ----
</TABLE>
(1) This Principal Mutual Pool 1 loan is secured by cross-collateralized
and cross-defaulted 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. Includes
applicable extensions available at Simon Group's option.
(2) This Principal Mutual Pool 2 loan is secured by cross-collateralized
and cross-defaulted 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. Includes applicable extensions available at Simon
Group's option.
(3) This Pool is secured by cross-collateralized and cross-defaulted
mortgages encumbering these four Properties.
(4) This Pool is secured by cross-collateralized and cross-defaulted
mortgages encumbering these three Properties.
(5) Through an interest rate protection agreement, effectively fixed at
an all-in-one rate of 6.16%.
(6) Includes applicable extensions available at Simon Group's option.
(7) These Commercial Mortgage Notes are secured by cross-collateralized
mortgages encumbering thirteen Properties. A weighted average rate
is used.
(8) This unsecured loan was previously secured by a mortgage of Eastgate
Consumer Mall. The maturity date includes all applicable extensions
available at Simon Group's option.
<PAGE>
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of September 30, 2000
(In thousands)
<TABLE>
<CAPTION>
------------------------------------------ --------- ------------- -------- ------------- ---------- --------------
Principal SPG SPG's Interest
Property Maturity Balance Ownership Share of Rate Terms of
Name Date 09/30/00 % Loan Balance 09/30/00 Variable Rate
------------------------------------------ --------- ------------- -------- ------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Consolidated Indebtedness:
Variable Rate Debt Effectively Fixed to Maturity:
Orland Square 09/01/2001 50,000 100.00% 50,000 7.742% LIBOR + 0.500%
Forum Phase I - Class A-2 05/15/2004 44,386 60.00% 26,632 6.190% LIBOR + 0.300%
Forum Phase II - Class A-2 05/15/2004 40,614 55.00% 22,338 6.190% LIBOR + 0.300%
Simon ERE Facility 07/31/2004 28,200 100.00% 28,200 7.750% EURIBOR + 0.600%
CMBS Loan - Variable Component 12/15/2004 50,000 100.00% 50,000 6.155% LIBOR + 0.365%
---------- ----------
213,200 177,169
========== ==========
Other Hedged Debt:
Randall Park Mall - 1 12/11/2002 35,000 100.00% 35,000 8.718% LIBOR + 2.100%
Randall Park Mall - 2 12/11/2002 5,000 100.00% 5,000 11.618% LIBOR + 5.000%
Raleigh Springs Mall 02/23/2003 11,000 100.00% 11,000 8.268% LIBOR + 1.650%
Unsecured Revolving Credit Facility - (1.25B-capped) 08/25/2003 140,000 100.00% 140,000 7.268% LIBOR + 0.650%
---------- ----------
191,000 191,000
========== ==========
Floating Rate Debt:
Crystal River 01/01/2001 15,292 100.00% 15,292 9.618% LIBOR + 3.000%
White Oaks Mall 03/01/2001 16,500 54.92% 9,062 8.391% LIBOR + 1.300%
CPI Merger Facility - 2 (1.4B) 03/24/2001 450,000 100.00% 450,000 7.268% LIBOR + 0.650%
CPI Merger Facility - 3 (1.4B) 09/24/2001 475,000 100.00% 475,000 7.268% LIBOR + 0.650%
SPG, L.P. Unsecured Loan - 1 02/28/2002 150,000 100.00% 150,000 7.418% LIBOR + 0.650%
Highland Lakes Center 03/01/2002 14,377 100.00% 14,377 8.118% LIBOR + 1.500%
SPG, L.P. Unsecured Loan - 3 03/30/2002 22,929 100.00% 22,929 7.618% LIBOR + 0.650%
Mainland Crossing 03/31/2002 1,603 80.00% 1,282 8.118% LIBOR + 1.500%
SPG, L.P. Unsecured Loan - 2 08/28/2002 100,000 100.00% 100,000 7.418% LIBOR + 0.650%
Jefferson Valley Mall 01/11/2003 60,000 100.00% 60,000 7.868% LIBOR + 1.250%
Richmond Towne Square 07/15/2003 56,259 100.00% 56,259 7.618% LIBOR + 1.000%
Unsecured Revolving Credit Facility - (1.25B) 08/25/2003 505,000 100.00% 505,000 7.268% LIBOR + 0.650%
Shops @ Mission Viejo 08/31/2003 137,816 100.00% 137,816 7.768% LIBOR + 1.150%
Arboretum 11/30/2003 34,000 100.00% 34,000 8.118% LIBOR + 1.500%
North East Mall 05/20/2004 119,905 100.00% 119,905 7.993% LIBOR + 1.375%
Waterford Lakes 08/15/2004 51,493 100.00% 51,493 8.018% LIBOR + 1.400%
Brunswick Square 06/12/2005 45,000 100.00% 45,000 8.118% LIBOR + 1.500%
---------- ----------
2,255,174 2,247,415
========== ==========
<CAPTION>
------------------------------------------ ------------------------------------------------------
Property Terms of
Name Interest Rate Protection Agreement
------------------------------------------ ------------------------------------------------------
<S> <C>
Consolidated Indebtedness:
Variable Rate Debt Effectively Fixed to Maturity:
Orland Square LIBOR Swapped at 7.24% through maturity.
Forum Phase I - Class A-2 Through an interest rate protection agreement, effectively fixed
at an all-in-one rate of 6.19% .
Forum Phase II - Class A-2 Through an interest rate protection agreement, effectively fixed
at an all-in-one rate of 6.19% .
Simon ERE Facility Through a cross-currency swap, the balance at maturity is fixed at $28.2M
and the rate is fixed at 7.75% through 7/31/03.
CMBS Loan - Variable Component Through an interest rate protection agreement, effectively fixed
at an all-in-one rate of 6.16% .
Other Hedged Debt:
Randall Park Mall - 1 LIBOR Capped at a rate of 7.40% through maturity.
Randall Park Mall - 2 LIBOR Capped at a rate of 7.40% through maturity.
Raleigh Springs Mall LIBOR Capped at a rate of 8.35% through September 10, 2001.
Unsecured Revolving Credit Facility - (1.25B-capped) Subject to an 11.53% LIBOR cap on $90M and a 16.77% LIBOR cap on $50M.
Floating Rate Debt:
Crystal River
White Oaks Mall 90-day LIBOR set on August 31, 2000.
CPI Merger Facility - 2 (1.4B)
CPI Merger Facility - 3 (1.4B)
SPG, L.P. Unsecured Loan - 1
Highland Lakes Center
SPG, L.P. Unsecured Loan - 3
Mainland Crossing
SPG, L.P. Unsecured Loan - 2
Jefferson Valley Mall
Richmond Towne Square
Unsecured Revolving Credit Facility - (1.25B)
Shops @ Mission Viejo
Arboretum
North East Mall
Waterford Lakes
Brunswick Square
</TABLE>
<PAGE>
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of September 30, 2000
(In thousands)
<TABLE>
<CAPTION>
--------------------------------------- --------- ------------- -------- ------------- ---------- --------------
Principal SPG SPG's Interest
Property Maturity Balance Ownershi p Share of Rate Terms of
Name Date 09/30/00 % Loan Balance 09/30/00 Variable Rate
--------------------------------------- --------- ------------- -------- ------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Joint Venture Indebtedness:
Other Hedged Debt:
Arizona Mills 02/01/2002 142,216 26.32% 37,425 7.918% LIBOR + 1.300%
CMBS Loan - Floating Component (IBM) 05/01/2003 184,500 50.00% 92,250 7.116% See Footnote (1)
CMBS Loan - Floating Component - 2 (IBM) 05/15/2006 81,400 50.00% 40,700 6.987% See Footnote (1)
Circle Centre Mall - 1 01/31/2004 60,000 14.67% 8,802 7.058% LIBOR + 0.440%
Circle Centre Mall - 2 01/31/2004 7,500 14.67% 1,100 8.118% LIBOR + 1.500%
Emerald Square Mall 03/31/2005 145,000 49.14% 71,249 8.106% LIBOR + 1.490%
Mall of America 11/19/2003 312,000 27.50% 85,800 7.130% LIBOR + 0.513%
Northfield Square 04/30/2005 37,000 31.60% 11,692 9.118% LIBOR + 2.500%
--------- ---------
969,616 349,019
========= =========
Floating Rate Debt:
Arundel Mills 04/30/2005 47,681 37.50% 17,880 8.268% LIBOR + 1.650%
Dadeland Mall 12/10/2000 140,000 50.00% 70,000 7.318% LIBOR + 0.700%
Tower Shops, The 03/13/2001 12,900 50.00% 6,450 7.818% LIBOR + 1.200%
Liberty Tree Mall 10/01/2001 46,843 49.14% 23,017 8.118% LIBOR + 1.500%
Montreal Forum 01/31/2002 11,011 35.63% 3,923 7.500% Canadian Prime
Shops at Sunset Place, The 06/30/2002 114,608 37.50% 42,978 7.868% LIBOR + 1.250%
Mayflower Realty Credit Facility 07/12/2002 8,400 49.14% 4,128 9.118% LIBOR + 2.500%
Cape Cod Mall 04/01/2003 65,912 49.14% 32,388 8.418% LIBOR + 1.800%
Concord Mills 12/02/2003 177,379 37.50% 66,517 7.968% LIBOR + 1.350%
Orlando Premium Outlets 02/12/2004 50,158 50.00% 25,079 8.118% LIBOR + 1.500%
--------- ---------
674,892 292,360
========= =========
<CAPTION>
------------------------------------------ ------------------------------------------------------
Property Terms of
Name Interest Rate Protection Agreement
------------------------------------------ ------------------------------------------------------
<S> <C>
Joint Venture Indebtedness:
Other Hedged Debt:
Arizona Mills LIBOR Capped at 9.50% through maturity.
CMBS Loan - Floating Component The Operating Partnership took assignment of an interest rate protection
agreement (LIBOR cap of 11.67%) relating to this debt.
CMBS Loan - Floating Component LIBOR Capped at 11.83% through maturity.
Circle Centre Mall - 1 LIBOR Capped at 8.81% through maturity.
Circle Centre Mall - 2 LIBOR Capped at 7.75% through maturity.
Emerald Square Mall LIBOR Capped at 7.73% through maturity.
Mall of America LIBOR Capped at 8.7157% through March 12, 2003.
Northfield Square LIBOR Capped at 8.50% through maturity.
Floating Rate Debt:
Arundel Mills
Dadeland Mall
Tower Shops, The
Liberty Tree Mall
Montreal Forum
Shops at Sunset Place, The Rate can be reduced based upon project performance.
Mayflower Realty Credit Facility
Cape Cod Mall
Concord Mills
Orlando Premium Outlets Rate can be reduced based upon project performance.
</TABLE>
Footnote:
(1) Represents the weighted average interest rate.
<PAGE>
SIMON PROPERTY GROUP
New Development Activities
As of September 30, 2000
<TABLE>
<CAPTION>
Simon Projected Non-Anchor
Group's Actual/ Cost Sq. Footage
Mall/ Ownership Projected (in millions) Leased/ GLA
Location Percentage Opening (1) Committed (2) (sq. ft.)
------------------------------------ ------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Projects Under Construction
Arundel Mills 37.5% 11/17/00 $252 81% 1,300,000
Anne Arundel, MD (total center)
Anchors/Major Tenants: Jillian's, Bed Bath & Beyond, Sun & Ski Sports, Muvico, Books-A-Million,
Off Broadway Shoes, For Your Entertainment, Off 5th-Saks Fifth Avenue
TJMaxx, Burlington Coat Factory, Old Navy
------------------------------------ ----------------------------------------------------------------------------
Waterford Lakes Town Center 100.0% 11/00 $84 97% 982,000
Orlando, FL (Phase I & II) (Phase I)
Anchors/Major Tenants: Phase I opened 11/99 - 562,000 sq. ft. - anchor tenants: Super Target,
TJMaxx, Ross Dress for Less, Bed Bath & Beyond, Barnes & Noble,
Old Navy, Regal 20-Plex Theatre, Zany Brainy and Dress Barn.
Phase II to open 11/00 - 420,000 sq. ft. - anchor tenants: OfficeMax,
PetsMart and Best Buy
------------------------------------ ----------------------------------------------------------------------------
Bowie Town Center 100.0% 10/01 $66 80% 667,000
Annapolis, MD
Anchors/Major Tenants: Hecht's, Sears, Old Navy, Barnes & Noble, Bed Bath & Beyond, Safeway
(1) Includes soft costs such as architecture and engineering fees, tenant
costs (allowances/leasing commissions), development, legal and other
fees, marketing costs, cost of capital, and other related costs.
(2) Community Center leased/committed percentage includes owned anchor GLA.
</TABLE>
<PAGE>
SIMON PROPERTY GROUP
Significant Renovation/Expansion Activities
As of September 30, 2000
<TABLE>
<CAPTION>
Projected GLA New or
Simon Group's Actual/ Cost Before Incremental
Mall/ Ownership Projected (in millions) Renov/Expan GLA
Location Percentage Opening (1) (sq. ft.) (sq. ft.)
------------------------------------ ---------------- -------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
------------------------------------
Projects Recently Completed
------------------------------------
LaPlaza Mall 100% 11/99, 3/00 $35 988,000 215,000
McAllen, TX & 11/00
Project Description: Mall renovation (opened 11/99); new Dillard's (opened 3/00); JCPenney
expansion, new small shops retrofitted from the existing Dillard's store,
and new Foley's Home Store (opened 11/00)
------------------------------------ ----------------------------------------------------------------------------------
North East Mall 100% 9/99, 9/00 $103 1,141,000 308,000
Hurst, TX & 2001
Project Description: New Dillard's, mall expansion and parking deck (opened 9/99); Montgomery
Ward remodel (opened 10/99); JCPenney remodel and expansion and
parking deck (opened 11/99); new Saks Fifth Avenue, mall renovation and
parking deck (opened 9/00); new Nordstrom (to open 3/01); new Foleys
(to open Fall 2001)
------------------------------------ ----------------------------------------------------------------------------------
Palm Beach Mall 100% 2/00 $33 1,205,000 61,000
West Palm Beach, FL & 10/00
Project Description: JCPenney remodel (opened 11/99); mall renovation and new Dillard's
(opened 2/00); new Borders (opened 4/00), Old Navy, Mars Music Store,
Designer Shoe Warehouse and Burdines remodel (opened 10/00)
------------------------------------ ----------------------------------------------------------------------------------
The Shops at Mission Viejo 100% 9/99 $146 817,000 427,000
Mission Viejo, CA & 12/00
Project Description: New Nordstrom, small shop expansion and renovation, new parking structure;
new Saks Fifth Avenue (opened 9/99); Robinson-May expansion and remodel,
food court addition (opened 10/00); Old Navy, PF Chang's and California
Cafe (to open 12/00); Macy's expansion (to open 8/01)
------------------------------------ ----------------------------------------------------------------------------------
Town Center at Boca Raton 100% 10/99 $67 1,327,000 228,000
Boca Raton, FL & 11/00
Project Description: New, expanded and relocated Saks Fifth Avenue and new parking structure
(opened 10/99); Bloomingdale's expansion (opened 11/99); new Nordstrom,
Lord & Taylor expansion, mall expansion and renovation, food court renovation
and new parking structure (opened 11/00)
</TABLE>
(1) Includes soft costs such as architecture and engineering fees, tenant costs
(allowances/leasing commissions), development, legal and other fees,
marketing costs, cost of capital, and other related costs.
<PAGE>
SIMON PROPERTY GROUP
Capital Expenditures
For the Nine Months Ended September 30, 2000
(In millions)
Joint Venture Properties
------------------------
Simon
Consolidated Group's
Properties Total Share
---------- ----- -----
New Developments $ 43.3 $223.6 $83.6
Renovations and Expansions 158.5 15.9 6.9
Tenant Allowances 39.5 16.1 5.6
Capital Expenditures
Recoverable from Tenants 17.1 3.4 1.7
Other (1) - 1.9 .7
------ ------ ------
Totals $258.4 $260.9 $98.5
====== ====== ======
(1) Primarily represents capital expenditures not recovered from tenants.
<PAGE>
SIMON PROPERTY GROUP
Conference Call Text
November 8, 2000
Forward Looking Statement
-------------------------
Welcome to the Simon Property Group third quarter earnings conference call.
Please be aware that statements made during this call that are not historical
may be deemed forward-looking statements. Although the Company believes the
expectations reflected in any forward-looking statements are based on reasonable
assumptions, it can give no assurance that its expectations will be attained,
and it is possible that our actual results may differ materially from those
indicated by these forward looking statements due to a variety of risks and
uncertainties. We direct you to the Company's various filings with the
Securities and Exchange Commission including Form 10-K and Form 10-Q for a
detailed discussion of risks and uncertainties.
The Company's quarterly supplemental information package will be filed as a Form
8-K on Friday. This filing is also available via mail or e-mail. If you would
like to receive the supplemental information via e-mail, please notify me,
Shelly Doran, at [email protected].
----------------
A comment regarding Regulation FD - As you are all aware, the Securities and
Exchange Commission has adopted Regulation FD, which is intended to restrict
selective disclosure of non-public information by public companies. Simon
Property Group has adopted a new disclosure policy consistent with the
requirements of Regulation FD that will impact certain of our communications
with the financial community. One such change is the implementation of a quiet
period beginning 10 business days prior to the announcement of quarterly and
annual results, during which we will not discuss earnings-related information.
Participating in today's call will be David Simon (chief executive officer),
Rick Sokolov (president and chief operating officer) and Steve Sterrett (chief
financial officer). Steve will now discuss financial and operational results.
Financial and Operational Results
---------------------------------
We increased FFO per share in the third quarter by 14%, to $0.80 versus $0.70 in
1999. There are two items, however, which impact comparability. As discussed in
previous calls, in January of this year we adopted, as required, the SEC's Staff
Accounting Bulletin 101, which addresses certain revenue recognition policies,
including the accounting for overage rent. We are now precluded from recording
any overage rent from a tenant until that tenant's sales have exceeded their
---
lease year breakpoint. Previously, we would estimate a tenant's annual overage
rent, and then record it ratably during the year. The adoption of SAB 101 is not
expected to impact our full year income, but will make our overage rent
revenues, and thus our FFO, more "back-end" weighted to the 4th quarter. Had we
adopted SAB 101 in 1999, our third quarter FO would have been reduced by $0.01
per share.
Comparability of results was also complicated this quarter as a result of an
unusual, non-recurring charge recognized in the third quarter of 1999, when we
reserved $12 million related to litigation filed by former employees of
DeBartolo Realty Corporation. At the time, these types of items did not impact
FFO. Under NAREIT's FFO clarification, which went into effect in January of this
year, this charge is now to be reflected in FFO and, as a result, we have
restated 1999 FFO, reducing it by $0.05 per share for the third quarter and the
nine months.
To provide you with an "apples-to-apples" look at our results, we have
calculated the impact upon third quarter and nine months' results, assuming 1999
adoption of 101 as well as the impact of the litigation charge. For the quarter,
the Company's 1999 FFO would have increased by 4 cents per share. Accordingly,
our diluted FFO for the third quarter of 2000, on a comparable, per share basis,
increased 8%, from 74 cents per share to 80 cents per share.
For the nine months, 1999 FFO would have decreased by a penny. Therefore, FFO
for the first nine months of 2000, on a comparable, per share basis, increased
9%, from $2.07 per share to $2.25 per share.
<PAGE>
Highlights of our third quarter operating results are as follows:
. Occupancy increased 200 basis points from September 30, 1999 to 90.5% at
September 30, 2000. Primary drivers of this improved occupancy rate are:
1. Tenant demand for mall space remains very robust
2. Both the quality of our portfolio and its overall sales per square
foot have greatly improved over recent years which has increased the
demand for space in our centers.
3. We have streamlined our in-house lease execution process, making the
legal, tenant construction and tenant coordination efforts more
efficient and getting tenants open quicker.
4. We have been proactive in anticipating tenant fallout in our centers
and are poised to replace the vacancies quickly.
. Comparable sales per square foot, i.e. sales of tenants who have been in
place for at least 24 months, increased 3.8% to $385.
. Total sales per square foot increased 5.3% to $375 per square foot.
. Average base rent increased 4.6% to $27.97.
. The average initial base rent for stores opened during the third quarter
was $38.31 per square foot, versus average rents of $31.29 for those
tenants who closed or whose leases expired, for a spread of $7.02. The
year-to-date releasing spread was $3.68, which is lower than our historical
spread due to five large-space tenant leases executed during the first 6
months of the year. Excluding those big box tenants, the year-to-date
spread would be $5.53.
. Same property NOI growth was 5%, driven by occupancy gains, rent increases
and our SBV and SBN initiatives.
Year-to-date sales growth reported by the ICSC through July of 2000 was 1.6%.
Remember that the ICSC results lag by a couple of months. The growth rate for
the SPG properties submitted to the ICSC (not all properties) was 1%. We
continue to work with the ICSC to modify its methodology to more closely reflect
the methodology used by the public mall companies, as we believe that data,
including SPG's, to be much more reflective of actual mall productivity.
One final note regarding sales... tenant sales reported in our portfolio for the
third quarter are consistent with the trends retailers have reported nationally.
Sales growth in our portfolio did slow in the quarter. We still see healthy
increases for the year-over-year period, even with the slowdown. This slowing of
sales, however, has not affected retailers' demand for space, as demonstrated by
our strong occupancy increases, and our business fundamentals remain strong.
Liquidity and Capital Activities
--------------------------------
We completed the refinancing of the $500 million third tranche of our CPI debt
facility in September. This tranche was paid off with proceeds from a new $475
million term loan with six of our lead lenders priced at the existing facility
rate of LIBOR plus 65 basis points and has a maturity of 9/24/01.
We continue to maintain significant financial flexibility and strong liquidity
with over $600 million available on our corporate credit facility and over $800
million of EBITDA generated annually from properties that are unencumbered.
In July, Simon sold its 8% equity investment in Chelsea GCA Realty to an
institutional investor in a private transaction. This transaction resulted in no
gain or loss to SPG and was completed with the approval of Chelsea. We would
like to reiterate that, in no way, should this transaction be viewed as a
commentary on the valuation of Chelsea. As you know, we recently opened a
project developed with Chelsea in Orlando - Orlando Premium Outlets - which has
performed very well, and are currently evaluating additional joint development
opportunities.
<PAGE>
Dispositions
------------
During the third quarter of 2000, we sold Aurora Plaza in Aurora, Colorado, in
conjunction with our ongoing strategy to dispose of non-core assets. Subsequent
to quarter end, our interest in the Tower Shops in Las Vegas was sold. Total
proceeds from these two transactions of approximately $18 million were utilized
to repay indebtedness.
Proceeds to date from Simon's disposition of non-core assets in 1999 and 2000
total $263 million - $75 million has been utilized to repurchase SPG common
stock and units, with the remaining balance of $188 million used to pay down
debt.
We currently have seven additional properties under contract for sale which
could close by year-end, generating another $90 million in proceeds.
Development Activities
----------------------
As a result of our disciplined approach in the pursuit of new developments, we
currently have only three projects under construction with two of those
scheduled for completion this year:
. Arundel Mills in Anne Arundel, Maryland is our fifth joint venture with The
Mills Corporation and will open November 17th. This 1.3 million square foot
value-oriented super-regional mall is strategically positioned to capture
both the Baltimore and the northern and eastern Washington, D.C.
metropolitan areas and is located approximately 5 minutes from the
Baltimore/Washington International Airport. Arundel's demographics compare
favorably with existing Mills' projects. In 1998, population within a
40-mile radius was 5.9 million with an average household income of nearly
$73,000. Coupled with the proximity to BWI Airport and the tourism in the
area, we believe Arundel will be one of the strongest Mills projects.
Major tenants include: Jillian's, Bed Bath & Beyond, Sun & Ski Sports,
Muvico, Books-A-Million, For Your Entertainment, OFF 5TH-Saks Fifth Avenue,
Burlington Coat Factory, TJMaxx and Old Navy.
. Waterford Lakes Town Center in Orlando, Florida will have a staggered
opening with certain tenants already open and others following later this
month. Phase I, which opened in November 1999, is 97% leased and committed.
Phase II anchors include OfficeMax, PetsMart and Best Buy. This power
center is the largest in the SPG portfolio with nearly one million square
feet of GLA and it serves the rapidly growing east Orlando market.
Construction continues on one additional new development scheduled to open in
2001:
. Bowie Town Center in the Baltimore/Washington corridor is scheduled to open
in October 2001. This is an open-air regional mall with a main street
architectural design encompassing 667,000 square feet of GLA - 560,000
square feet of mall space or the main street core will be anchored by
Hecht's and Sears and will also feature Old Navy, Barnes & Noble, and Bed
Bath & Beyond. The 107,000 square feet neighborhood component consisting of
grocery retail will be anchored by Safeway. Retailer interest in Bowie has
been very strong, as it is already 80% leased and committed.
In other development activity, the fifth department store at Mall of Georgia
opened on October 30th. Rich's joins Nordstrom, Dillard's, Lord & Taylor and
JCPenney at this 1.7 million square foot super regional mall which opened in
August of 1999. Sales at this center are approaching $400 per square foot.
Over the past four years, we have spent $1 billion redeveloping our mall
portfolio. Over 75% of the Simon malls have been newly constructed, expanded or
redeveloped since our IPO in 1993. Therefore, most of our significant
redevelopment activity is now behind us, and we are just beginning to reap the
benefits of this invested capital. Our
<PAGE>
discretionary cash flow (cash flow after dividends and cap ex) will
significantly increase in 2001 due to this reduction in our redevelopment
spending.
The Company has completed five significant redevelopments this year:
. LaPlaza Mall in McAllen, Texas hosted its re-grand opening on November
2nd. The redevelopment includes a mall renovation, the addition of
Foley's Home Store and the expansion of small shops and JCPenney. A new
Dillard's also opened at this center in March.
. In September, we completed a mall renovation and added Saks Fifth Avenue at
North East Mall in Hurst, Texas. A new Dillard's and small shop expansion
had already opened in September 1999. Nordstrom and Foley's are scheduled
to open in March 2001 and fall 2001, respectively.
. Old Navy, Designer Shoe Warehouse and Mars Music Store opened in the newly
renovated Palm Beach Mall in West Palm Beach, Florida in October. Dillard's
and Borders opened earlier this year in February and April, respectively.
. Town Center at Boca Raton, Florida hosted its re-grand opening on November
3/rd/ featuring a new Nordstrom, Lord & Taylor expansion, mall expansion
and renovation and a new parking structure. Saks Fifth Avenue and
Bloomingdale's opened during the fourth quarter of 1999.
. We will also re-grand Ross Park Mall this Friday, November 10/th/. Ross
Park is the best mall in Pittsburgh and is highly productive with sales in
excess of $400 per square foot. The mall has been completely renovated and
the tenant mix has been substantially upgraded.
One last redevelopment note - the final phase of our redevelopment of The Shops
at Mission Viejo is nearly complete with the recent opening of the food court
and the openings next month of Old Navy, California Cafe and P.F. Chang.
Our typical, detailed disclosure for new development and redevelopment
activities is provided in our 8-K, which will be filed on Friday.
Theaters
--------
We'd like to comment briefly on the state of the world of theaters and our
exposure. We believe that we are as well positioned as we can be because we have
spread our risk among several operators. The vast majority of our theater
locations will be net survivors because of their multiple screen formats and
their market positions. There are currently 110 theaters in the Simon portfolio
with 1,000 screens. To date, only one theater location has closed in our
portfolio due to bankruptcy. We have analyzed every theater location in our
portfolio one-by-one and have determined that, under a "worst case scenario," we
could lose $4 million in annual rent (or a penny and a half per share) for the
locations at risk if we could not re-let the spaces. We are also fully reserved
for all receivables due to us from all theater operators that have filed
bankruptcy. If any of these leases are not rejected, the receivables associated
with those leases should be recoverable.
Technology Initiatives
----------------------
Let me spend a couple of minutes talking about our technology initiatives.
In 2000, we created MerchantWired, a full-service retail infrastructure company
that provides retailers across the country access to a high speed, highly
reliable and secure coast-to-coast broadband network. A consortium of mall
companies currently owns MerchantWired, including Simon, Macerich, Rouse,
Taubman, Urban and Westfield.
<PAGE>
We are pleased with the progress made since the announcement of MerchantWired in
May. Over 300 malls have been wired to date and are fully operational. We
believe that MerchantWired will become the industry standard for our retailers'
broadband communication needs. MerchantWired is currently in the midst of an
aggressive marketing effort to tenants, and the response to date from the
retailers has been strong and growing. Ten national retailers have now signed
letters of intent and/or network contracts and both American Eagle Outfitters
and Finish Line have announced the selection of MerchantWired as the national
broadband infrastructure provider for all of their retail locations - with a
---
combined total of nearly 1,000 stores nationwide.
In May, we announced our strategic collaboration with leading real estate
companies from a broad range of property sectors to form a real estate
technology company, Constellation Real Technologies. In September, Constellation
announced its initial investment of $25 million in FacilityPro.com, a
business-to-business electronic marketplace designed for the efficient
procurement of facilities products and services. SPG's share of this investment
was $2.5 million. SPG is already implementing the FacilityPro platform in the
Simon Business Network, and expects to be the first Constellation member to be
operational with FacilityPro.
We continue to identify and implement new revenue opportunities within the Simon
Business Network as demonstrated by the following:
1. Our tenant facilities services or TFS program continues to expand by
increasing the services offered. For example, we anticipate a significant
increase in the sale of tenant construction services in 2001.
2. We continue to expand the opportunities offered by our strategic alliance
with Enron. For example, we are currently developing an environmental
offering for retailers which will improve margins for Enron and Simon. We
also expect SPG's malls to play a critical role as Enron markets its new
residential energy offering to consumers.
On the consumer side, SBV was also active. We re-signed Pepsi as a key sponsor
for an additional two years, at enhanced economics to SPG. As you know, Pepsi
was one of the original SBV sponsors, and we believe their renewal is a
testament to the SPG portfolio as a marketing medium.
Additionally, we signed a deal with Cingular, the cellular arm of Bell
South/SBC, to market their product in SPG malls during the 2000 holiday shopping
season.
Regarding clixnmortar - we continue to progress toward introducing a "new and
improved" product. SPG has formed an alliance with Found, Inc., a company that
has created software that will help us build an infrastructure for our retailers
where shoppers on-line can identify merchandise actually in inventory at an
individual retailer's store at the mall. If not available at the mall, the
consumer can be redirected to a nearby store or order it on-line. This
technology has the potential to truly integrate on-line and physical shopping
into a seamless experience for the consumer. Found and clixnmortar will develop
a single wishlist product, which will combine the best of our FastFrog and
YourSherpa initiatives. The new product is scheduled to launch in 2001.
We believe that these various technology initiatives will add value to our
company and are pleased with our progress to date. However, rest assured that we
are not diverting attention from our core business. The ownership and management
---
of retail real estate continues to be our #1 priority and our investment in
technology initiatives continues to be very selective.
Conclusion
----------
Before I open the call up for Q & A, let me offer a few concluding thoughts. The
markets have clearly been nervous recently about retail, and retail REITs have
been caught up in this concern. The Bloomberg Retail Index is down over 20%
year-to-date, and the mall REITs generally trade at multiples 300 to 400 basis
points below other REIT sectors.
<PAGE>
The fundamentals in our business, however, don't support this concern. Sales are
up, even if slowing. Occupancy is high and growing, with no signs of tenant
demand slowing. Rent spreads remain strong, even as occupancy increases. And
except for theaters, the financial health of our retailers is generally very
good. Couple these strong fundamentals with record low unemployment and a
reasonable level of consumer confidence, and we think the concern about retail
is way overblown. For decades, among all real estate types, regional malls have
provided the most stable income stream through all economic cycles. The private
market valuations for high-quality regional malls, which have always been high,
support this stability.
Ours is a tough business....there is no denying that. When our tenants fail,
it's usually page-one news in the Journal.
Tenants have failed and we've been replacing them for 40 years now.
For every tenant that goes bankrupt, there are two new retail concepts ready to
take up the available space. Remember Kinney Shoes? Petri Stores, Stuart's and
Marianne's? Merry-Go-Round, DJ's for Men and Cignal? Edison Brothers, Jeans
West, J. Riggins, Coda, Wild Pair, Sascha and Oaktree? Cacique? Just for Feet?
The list goes on and on. All strong retailers a decade ago, but now long gone.
They have been replaced with newer concepts and stronger tenants like Abercombie
& Fitch, Abercrombie Kids, Gap Body, Rampage, Hollister, Old Navy, Pottery Barn,
Arden B, Hot Topic & White Barn Candle. And along the way, we consistently
increased our portfolio sales productivity, rents, and occupancy.
We feel confident about our business fundamentals. And with our new revenue
streams from SBV and SBN, we're making money in ways we never dreamed of before.
We're excited about our business and what the future holds.
