<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 June 30, 2000, 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 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 June 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. 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]
Page 5 of 42
<PAGE>
SIMON PROPERTY GROUP ECONOMIC OWNERSHIP STRUCTURE (1)
JUNE 30, 2000
[GRAPH]
Simon Property Group, Inc. (2)(3)(4)
Common Shareholders Shares %
------------------- ------ -
Public Shareholders 168,129,571 96.8%
Simon Family 4,293,311 2.5%
DeBartolo Family 32,206 0.0%
Executive Management(5) 1,280,680 0.7%
----------- -----
173,735,768(4) 100.0%
172,064,824 units
Simon Property Group, L.P.
237,501,238 units
65,436,414 units
Limited Partners
("Limited Partners")
Unitholders Units %
----------- ----- -
Simon Family 34,584,455 52.8%
DeBartolo Family 22,222,599 34.0%
Executive Management(5) 153,498 0.2%
Other Limited Partners 8,475,862 13.0%
---------- -----
65,436,414 100.0%
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 14.6%
DeBartolo Family 9.3%
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 6 of 42
<PAGE>
SIMON PROPERTY GROUP
Changes in Common Shares and Unit Ownership
For the Period from December 31, 1999 through June 30, 2000
<TABLE>
<CAPTION>
Operating Company
Partnership Common
Units(1) Shares(2)
----------- -----------
<S> <C> <C>
Number Outstanding at December 31, 1999.............. 65,444,680 173,165,255
Restricted Stock Awards (Stock Incentive Program),
Net................................................. -- 434,952
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........................ (8,266) --
---------- -----------
Number Outstanding at June 30, 2000.................. 65,436,414 173,735,768
========== ===========
Total Common Shares and Units Outstanding at June 30, 2000:
239,172,182(2)
Details for Diluted FFO Calculation:
Company Common Shares Outstanding at June 30, 2000... 173,735,768
Number of Common Shares Issuable Assuming Conversion
of:
Series A Preferred 6.5% Convertible................ 1,940,005
Series B Preferred 6.5% Convertible................ 12,490,773
Net Number of Common Shares Issuable Assuming Exer-
cise of Stock Options............................... 149,479
-----------
Diluted Common Shares Outstanding at June 30, 2000... 188,316,025
===========
</TABLE>
Fully Diluted Common Shares and Units Outstanding at June 30, 2000: 253,752,439
(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).
Page 7 of 42
<PAGE>
SIMON PROPERTY GROUP
Preferred Stock/Units Outstanding
As of June 30, 2000
($ in 000's)
<TABLE>
<CAPTION>
Number of Liquidation Ticker
Issuer Description Shares/Units Preference $ Symbol
------ ------------------------ ------------ ----------- -------- ------
<S> <C> <C> <C> <C> <C>
Preferred Shares:
Convertible
Simon Property Group, Series A Preferred 51,059 $1,000 $ 51,059 N/A
Inc.................... 6.5% Convertible (1)
Simon Property Group, Series B Preferred 4,830,057 $ 100 $483,006 SPGPrB
Inc.................... 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)
Simon Property Group, Series E Preferred 1,000,000 $ 25 $ 25,000 N/A
Inc.................... 8% Cumulative
Redeemable (5)
Preferred Units:
Simon Property Group, Series C 7% 2,584,227 $ 28 $ 72,358 N/A
L.P.................... Cumulative
Convertible Preferred (6)
Simon Property Group, Series D 8% 2,584,227 $ 30 $ 77,527 N/A
L.P.................... Cumulative
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
June 30, 2000, was $67.25 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 June 30, 2000, was $22.25 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. On or after August 27, 2004, the
Corporation may redeem the shares, in whole or in part, for cash at the
Liquidation Preference plus accrued and unpaid dividend, if any.
(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 8 of 42
<PAGE>
SIMON PROPERTY GROUP
Reconciliation of Income to Funds From Operations ("FFO")
As of June 30, 2000
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Six Months Ended
Ended June 30, June 30,
------------------ ------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
The Operating Partnership
Income Before Extraordinary Items and
Cumulative Effect of Accounting
Change............................... $ 75,912 $ 67,338 $147,048 $134,726
Plus: Real Estate Depreciation and
Amortization from Combined
Consolidated Properties........... 98,906 89,544 197,142 179,081
Plus: Simon's Share of Real Estate
Depreciation and Amortization and
Extraordinary Items from
Unconsolidated Affiliates......... 28,055 20,761 56,856 41,291
Plus: Gain (Loss) on Sale of Real
Estate, Net(1).................... (1,562) 9,308 (8,658) 9,308
Less: Minority Interest Portion of
Real Estate Depreciation and
Amortization...................... (1,475) (255) (2,955) (2,050)
Less: Preferred Distributions
(including those of subsidiary)... (19,368) (16,123) (38,740) (33,828)
FFO of the Simon Portfolio............ $180,468 $170,573 $350,693 $328,528
-------- -------- -------- --------
Percent Increase.................... 5.8% 6.7%
FFO of the Simon Portfolio............ $180,468 $170,573 $350,693 $328,528
Basic FFO per Paired Share:
Basic FFO Allocable to the Company.... $131,039 $125,099 $254,542 $239,359
Basic Weighted Average Paired Shares
Outstanding.......................... 173,672 173,342 173,448 171,177
Basic FFO per Paired Share............ $ 0.75 $ 0.72 $ 1.47 $ 1.40
-------- -------- -------- --------
Percent Increase.................... 4.2% 5.0%
Diluted FFO per Paired Share:
Diluted FFO Allocable to the Company.. $140,364 $134,356 $273,039 $259,569
Diluted Weighted Average Number of
Equivalent Paired Shares............. 188,316 188,259 188,090 187,872
Diluted FFO per Paired Share.......... $ 0.75 $ 0.71 $ 1.45 $ 1.38
-------- -------- -------- --------
Percent Increase.................... 5.6% (2) 5.1% (2)
</TABLE>
--------
(1) Net of asset write downs of $10.6 million for the three and six months
ended June 30, 2000.
(2) 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. If the Company's 1999 results
were restated to reflect the adoption of SAB 101, 1999 FFO would be reduced
and comparable growth from 1999 to 2000 would be as follows:
<TABLE>
<CAPTION>
Three Months Ended 6/30 Six Months Ended 6/30
------------------------------ ------------------------------
Impact to Adjusted Impact to Adjusted
1999 Amounts 1999 Comp 1999 Amounts 1999 Comp
due to SAB 101 Amounts Growth due to SAB 101 Amounts Growth
-------------- -------- ------ -------------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
FFO of the Simon Portfo-
lio.................... $(6,312) $164,261 9.9% $(11,350) $317,178 10.6%
Basic FFO Allocable to
the Company............ $(4,573) $120,526 8.7% $ (8,218) $231,141 10.1%
Basic FFO per Paired
Share.................. $ (0.03) $ 0.70 7.1% $ (0.05) $ 1.35 8.9%
Diluted FFO Allocable to
the Company............ $(4,674) $129,682 8.2% $ (8,398) $251,171 8.7%
Diluted FFO per Paired
Share.................. $ (0.02) $ 0.69 8.7% $ (0.04) $ 1.34 8.2%
</TABLE>
Page 9 of 42
<PAGE>
SIMON PROPERTY GROUP
Selected Financial Information
As of June 30, 2000
(In thousands, except as noted)
<TABLE>
<CAPTION>
As of or for the
Six Months Ended
June 30,
------------------
2000 1999 % Change
-------- -------- --------
<S> <C> <C> <C>
Financial Highlights of the Company
Total Revenue--Consolidated Properties......... $965,510 $900,099 7.3 %
Total EBITDA of Simon Portfolio................ $979,463 $838,908 16.8 %
Simon Share of EBITDA.......................... $757,307 $675,771 12.1 %
Net Income Available to Common Shareholders.... $ 69,255 $ 73,416 (5.7)%
Basic Net Income per Common Share.............. $ 0.40 $ 0.43 (7.0)%
Diluted Net Income per Common Share............ $ 0.40 $ 0.43 (7.0)%
FFO of the Simon Portfolio..................... $350,693 $328,528 6.7 %(5)
Basic FFO Allocable to the Company............. $254,542 $239,359 6.3 %(5)
Diluted FFO Allocable to the Company........... $273,039 $259,656 5.2 %(5)
Basic FFO per Common Share..................... $ 1.47 $ 1.40 5.0 %(5)
Diluted FFO per Common Share................... $ 1.45 $ 1.38 5.1 %(5)
Distributions per Common Share................. $ 0.5050 $ 0.5050 0.0 %
Operational Statistics
Occupancy at End of Period:
Regional Malls(1)............................ 90.0% 88.4% 1.6 %
Community Shopping Centers(2)................ 91.2% 90.9% 0.3 %
Average Base Rent per Square Foot:
Regional Malls(1)............................ $ 27.63 $ 26.15 5.7 %
Community Shopping Centers(2)................ $ 9.12 $ 7.84 16.3 %
Regional Malls:
Total Tenant Sales Volume, in
millions(3)(4).............................. $ 7,075 $ 5,953 18.8 %
Comparable Sales per Square Foot(4).......... $ 387 $ 368 5.2 %
Total Sales per Square Foot(4)............... $ 373 $ 351 6.3 %
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................................... 183.9 166.8 10.3 %
</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.
(5) See footnote 1 on page 9 for comparable growth rates.
Page 10 of 42
<PAGE>
SIMON PROPERTY GROUP
Selected Financial Information
As of June 30, 2000
(In thousands, except as noted)
<TABLE>
<CAPTION>
June 30, June 30,
2000 1999
----------- -----------
<S> <C> <C>
Equity Information
Limited Partner Units Outstanding at End of Period.... 65,436 64,176
Common Shares Outstanding at End of Period............ 173,736 173,456
----------- -----------
Total Common Shares and Units Outstanding at End of
Period............................................... 239,172 237,633
=========== ===========
Basic Weighted Average Paired Shares Outstanding...... 173,448 171,177
Diluted Weighted Average Number of Equivalent Paired
Shares(1)............................................ 188,090 187,872
<CAPTION>
June 30, December
2000 31, 1999
----------- -----------
<S> <C> <C>
Debt Information
Consolidated Debt..................................... $ 8,805,667 $ 8,768,951
Simon Group's Share of Joint Venture Debt............. $ 1,952,703 $ 1,886,360
Debt-to-Market Capitalization
Common Stock Price at End of Period................... $ 22.1875 $ 22.9375
Equity Market Capitalization(2)....................... $ 6,199,300 $ 6,320,891
Total Consolidated Capitalization..................... $15,004,967 $15,089,842
----------- -----------
Total Capitalization--Including Simon Group's Share of
JV Debt.............................................. $16,957,670 $16,976,202
=========== ===========
</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 11 of 42
<PAGE>
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data
As of June 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................ 96,726,134 30,333,972 27.5% 98.4% $ 3.78
--Mall Store............ 56,480,677 56,432,781 51.2% 89.8% $28.30
--Freestanding.......... 3,673,258 1,858,574 1.7% 94.9% $ 9.22
----------- ----------- ------
Subtotal.............. 60,153,935 58,291,355 52.9% 90.0% $27.63
=========== =========== ======
Regional Mall Total..... 156,880,069 88,625,327 80.4% 92.9% $19.02
=========== =========== ======
Community Shopping
Centers
--Anchor................ 12,636,498 7,908,251 7.2% 93.9% $ 7.48
--Mall Store............ 4,353,853 4,268,095 3.9% 86.1% 12.45
--Freestanding.......... 798,684 319,257 .2% 95.3% 9.01
----------- ----------- ------
Community Ctr. Total.... 17,789,035 12,495,603 11.3% 91.2% $ 9.12
=========== =========== ======
Office Portion of Mixed-
Use Properties......... 2,432,840 2,432,840 2.2% 90.5% $18.70
Value-Oriented Super-
Regional Malls......... 5,430,489 5,305,489 4.8% 92.9% $16.23
Other................... 1,415,180 1,391,176 1.3%
----------- ----------- ------
Grand Total............. 183,947,613 110,250,435 100.00%
=========== =========== ======
</TABLE>
Occupancy History
<TABLE>
<CAPTION>
Community
As of Regional Malls(1) Shopping Centers(2)
----- ----------------- -------------------
<S> <C> <C>
6/30/00 90.0% 91.2%
6/30/99 88.4% 90.9%
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%
</TABLE>
--------
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
Page 12 of 42
<PAGE>
SIMON PROPERTY GROUP
Rent Information
As of June 30, 2000
Average Base Rent
<TABLE>
<CAPTION>
Mall & Freestanding % Community %
As of Stores at Regional Malls Change Shopping Centers Change
----- ------------------------ ------ ---------------- ------
<S> <C> <C> <C> <C>
6/30/00................ $27.63 5.7% $9.12 16.3%
6/30/99................ 26.15 -- 7.84 --
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
</TABLE>
Rental Rates
<TABLE>
<CAPTION>
Base Rent(1) Amount of Change
----------------------------- ------------------
Store Openings Store Closings
Year During Period During Period Dollar Percentage
---- -------------- -------------- ------ ----------
<S> <C> <C> <C> <C>
Regional Malls:
2000 (YTD).................... $32.38 $29.71 $2.67 9.0%
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).................... $12.88 $10.62 $2.26 21.3%
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
</TABLE>
--------
(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 13 of 42
<PAGE>
SIMON PROPERTY GROUP
Lease Expirations(1)
As of June 30, 2000
<TABLE>
<CAPTION>
Avg. Base Rent
Number of Square per Square Foot
Year Leases Expiring Feet at 6/30/00
---- --------------- ---------- ---------------
<S> <C> <C> <C>
Regional Malls--Mall & Freestanding Stores
2000 (7/1-12/31)..................... 679 728,635 30.56
2001................................. 1,643 3,591,836 26.22
2002................................. 1,667 3,572,295 27.59
2003................................. 1,912 4,370,815 29.77
2004................................. 1,714 4,617,735 28.71
2005................................. 1,619 5,076,046 27.54
2006................................. 1,502 4,172,255 29.71
2007................................. 1,414 4,112,219 31.70
2008................................. 1,279 4,487,732 29.51
2009................................. 1,389 4,566,579 28.07
------ ----------
Totals............................... 14,818 39,296,147 $28.85
====== ==========
Regional Malls--Anchor Tenants
2000 (7/1-12/31)..................... 5 690,745 1.74
2001................................. 11 1,355,717 1.90
2002................................. 16 1,948,271 1.85
2003................................. 18 2,156,140 2.29
2004................................. 25 2,462,680 3.31
2005................................. 19 2,371,330 2.50
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............................... 148 17,315,399 $ 2.72
====== ==========
Community Centers--Mall Stores & Freestanding Stores
2000 (7/1-12/31)..................... 105 122,835 11.57
2001................................. 191 515,454 12.45
2002................................. 176 572,570 11.41
2003................................. 151 578,428 11.53
2004................................. 128 504,106 12.15
2005................................. 135 600,053 12.46
2006................................. 28 289,221 8.22
2007................................. 20 168,942 11.41
2008................................. 17 128,402 12.25
2009................................. 15 89,718 16.02
------ ----------
Totals............................... 966 3,569,729 $11.75
====== ==========
</TABLE>
--------
(1) Does not consider the impact of options that may be contained in leases.
Page 14 of 42
<PAGE>
SIMON PROPERTY GROUP
Lease Expirations(1)
As of June 30, 2000
<TABLE>
<CAPTION>
Avg. Base Rent
Number of Square per Square Foot
Year Leases Expiring Feet at 6/30/00
---- --------------- --------- ---------------
<S> <C> <C> <C>
Community Centers--Anchor Tenants
2000 (7/1-12/31)...................... 2 60,529 8.12
2001.................................. 12 451,080 4.36
2002.................................. 9 334,458 5.74
2003.................................. 12 545,297 4.81
2004.................................. 14 564,277 4.33
2005.................................. 14 642,128 6.15
2006.................................. 10 534,812 5.89
2007.................................. 11 466,173 6.28
2008.................................. 10 399,235 7.91
2009.................................. 15 689,636 6.75
--- ---------
Totals................................ 109 4,687,625 $5.84
=== =========
</TABLE>
--------
(1) Does not consider the impact of options that may be contained in leases.
Page 15 of 42
<PAGE>
SIMON PROPERTY GROUP
SPG's Share of Total Debt Amortization and Maturities by Year
As of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
SPG's Share of SPG's Share of SPG's Share of
Secured Unsecured Unconsolidated
Consolidated Consolidated Joint Venture SPG's Share of
Year Debt Debt Secured Debt Total Debt
---- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
2000.................... 0 35,306 500,000 125,144 660,451
2001.................... 1 252,971 450,000 117,521 820,492
2002.................... 2 418,460 500,000 90,791 1,009,251
2003.................... 3 646,347 1,255,000 329,481 2,230,828
2004.................... 4 357,923 700,000 186,209 1,244,133
2005.................... 5 155,226 660,000 218,822 1,034,048
2006.................... 6 132,603 250,000 328,495 711,099
2007.................... 7 495,129 180,000 111,842 786,971
2008.................... 8 43,761 200,000 294,046 537,807
2009.................... 9 330,385 450,000 39,124 819,509
Thereafter.............. 109,398 525,000 100,000 734,398
---------- ---------- ---------- -----------
Subtotal Face Amounts... $2,977,510 $5,670,000 $1,941,476 $10,588,986
---------- ---------- ---------- -----------
Premiums and Discounts
on Indebtedness, Net... 2,352 0 11,226 13,579
---------- ---------- ---------- -----------
SPG's Share of Total
Indebtedness........... $2,979,862 $5,670,000 $1,952,703 $10,602,565
========== ========== ========== ===========
</TABLE>
Page 16 of 42
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness
As of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
SPG's Weighted
Total Share of Weighted Avg. Avg. Years
Indebtedness Indebtedness Interest Rate to Maturity
------------ ------------ ------------- -----------
<S> <C> <C> <C> <C>
Consolidated Indebtedness
Mortgage Debt
Fixed Rate (1).......... 2,523,289 2,374,890 7.40% 6.0
Other Hedged Debt....... 51,000 51,000 8.93% 2.5
Floating Rate Debt...... 560,193 551,620 7.97% 3.2
--------- ---------- ----- ---
Total Mortgage Debt... 3,134,482 2,977,510 7.53% 5.4
Unsecured Debt
Fixed Rate.............. 3,790,000 3,790,000 7.17% 6.6
Floating Rate Debt...... 250,000 250,000 7.44% 1.9
--------- ---------- ----- ---
Subtotal.............. 4,040,000 4,040,000 7.19% 6.3
Acquisition Facility.... 950,000 950,000 7.29% 0.5
Revolving Corporate
Credit Facility........ 540,000 540,000 7.29% 3.2
Revolving Corporate
Credit Facility
(Hedged)............... 140,000 140,000 7.29% 3.2
--------- ---------- ----- ---
Total Unsecured Debt.. 5,670,000 5,670,000 7.22% 5.0
Adjustment to Fair Market
Value--Fixed Rate........ 513 1,679 N/A N/A
Adjustment to Fair Market
Value--Variable Rate..... 672 673 N/A N/A
--------- ---------- ----- ---
Consolidated Mortgages and
Other Indebtedness....... 8,805,667 8,649,862 7.33% 5.1
========= ========== ===== ===
Joint Venture Mortgage
Indebtedness
Fixed Rate.............. 2,949,220 1,295,294 7.57% 6.1
Other Hedged Debt....... 969,616 349,019 7.49% 3.7
Floating Rate Debt...... 726,115 297,164 7.96% 1.9
--------- ---------- ----- ---
Subtotal................ 4,644,951 1,941,477 7.62% 5.0
Adjustment to Fair Market
Value--Fixed Rate........ 19,479 11,226 N/A N/A
--------- ---------- ----- ---
Joint Venture Mortgages
and Other Indebtedness... 4,664,430 1,952,703 7.62% 5.0
========= ========== ===== ===
SPG's Share of Total
Indebtedness............. 10,602,565 7.38% 5.1
</TABLE>
--------
(1) Includes $185,000 of variable rate debt, of which $148,969 is SPG's share,
that is effectively fixed to maturity through the use of interest rate
hedges.
Page 17 of 42
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
SPG's Weighted Avg.
ropertyP Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
-------- -------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Consolidated
Indebtedness
Fixed Rate Mortgage
Debt:
Trolley Square--1....... (1) 7/23/00 5.81% 19,000 17,100
------- -------
Subtotal 2000......... 19,000 17,100 5.81%
Biltmore Square......... 1/1/01 7.15% 25,282 16,863
Chesapeake Square....... 1/1/01 7.28% 45,987 34,490
Port Charlotte Town
Center................. 1/1/01 7.28% 51,766 41,413
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
Windsor Park Mall--1.... 3/1/01 8.00% 5,653 5,653
Orland Square........... 9/1/01 7.74% 50,000 50,000
------- -------
Subtotal 2001......... 239,809 209,540 7.25%
Lima Mall--1............ 3/1/02 7.12% 14,180 14,180
Lima Mall--2............ 3/1/02 7.12% 4,723 4,723
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
River Oaks Center....... 6/1/02 8.67% 32,500 32,500
North Riverside Park
Plaza--1............... 9/1/02 9.38% 3,725 3,725
North Riverside Park
Plaza--2............... 9/1/02 10.00% 3,581 3,581
Palm Beach Mall......... 12/15/02 7.50% 48,862 48,862
Other................... 5/31/02 6.80% 508 508
Other................... 12/1/02 8.00% 770 770
------- -------
Subtotal 2002......... 322,684 322,684 7.72%
Principal Mutual
Mortgages--Pool 1...... (2) 3/15/03 6.79% 103,142 103,142
Principal Mutual
Mortgages--Pool 2...... (3) 3/15/03 6.77% 137,607 137,607
Century III Mall........ 7/1/03 6.78% 66,000 66,000
Miami International
Mall................... 12/21/03 6.91% 45,623 27,374
------- -------
Subtotal 2003......... 352,372 334,123 6.79%
Battlefield Mall--1..... 1/1/04 7.50% 47,003 47,003
Battlefield Mall--2..... 1/1/04 6.81% 44,310 44,310
Forum Phase I--Class A-
2...................... 5/15/04 6.19% 44,386 26,632
Forum Phase II--Class A-
2...................... 5/15/04 6.19% 40,614 22,338
Forum Phase I--Class A-
1...................... 5/15/04 7.13% 46,996 28,198
Forum Phase II--Class A-
1...................... 5/15/04 7.13% 43,004 23,652
------- -------
Subtotal 2004......... 266,313 192,132 6.91%
Tippecanoe Mall--1...... (4) 1/1/05 8.45% 45,076 45,076
Tippecanoe Mall--2...... (4) 1/1/05 6.81% 15,757 15,757
Melbourne Square........ 2/1/05 7.42% 38,620 38,620
Cielo Vista Mall--2..... 11/1/05 8.13% 1,619 1,619
------- -------
Subtotal 2005......... 101,072 101,072 7.80%
</TABLE>
Page 18 of 42
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
SPG's Weighted Avg
ropertyP Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
-------- -------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Treasure Coast Square--
1...................... 1/1/06 7.42% 52,009 52,009
Treasure Coast Square--
2...................... 1/1/06 8.06% 11,953 11,953
Gulf View Square........ 10/1/06 8.25% 36,762 36,762
Paddock Mall............ 10/1/06 8.25% 29,238 29,238
------- -------
Subtotal 2006......... 129,962 129,962 7.90%
Lakeline Mall........... 5/1/07 7.65% 71,784 71,784
Cielo Vista Mall--1..... (5) 5/1/07 9.38% 54,135 54,135
Cielo Vista Mall--3..... (5) 5/1/07 6.76% 38,366 38,366
McCain Mall--1.......... (5) 5/1/07 9.38% 25,279 25,279
McCain Mall--2.......... (5) 5/1/07 6.76% 17,709 17,709
Valle Vista Mall--1..... (5) 5/1/07 9.38% 33,511 33,511
Valle Vista Mall--2..... (5) 5/1/07 6.81% 7,841 7,841
University Park Mall.... 10/1/07 7.43% 59,500 35,700
CMBS Loan--Variable
Component.............. (6) 12/15/07 6.16% 50,000 50,000
CMBS Loan--Fixed
Component.............. 12/15/07 7.31% 175,000 175,000
------- -------
Subtotal 2007......... 533,125 509,325 7.64%
Arsenal Mall--1......... 9/28/08 6.75% 34,418 34,418
------- -------
Subtotal 2008......... 34,418 34,418 6.75%
College Mall--1......... (4) 1/1/09 7.00% 41,092 41,092
College Mall--2......... (4) 1/1/09 6.76% 11,816 11,816
Greenwood Park Mall--1.. (4) 1/1/09 7.00% 34,416 34,416
Greenwood Park Mall--2.. (4) 1/1/09 6.76% 61,052 61,052
Towne East Square--1.... (4) 1/1/09 7.00% 54,330 54,330
Towne East Square--2.... (4) 1/1/09 6.81% 24,620 24,620
Bloomingdale Court...... 10/1/09 7.78% 29,750 29,750
Forest Plaza............ 10/1/09 7.78% 16,318 16,318
Lake View Plaza......... 10/1/09 7.78% 21,691 21,691
Lakeline Plaza.......... 10/1/09 7.78% 23,780 23,780
Lincoln Crossing........ 10/1/09 7.78% 3,284 3,284
Matteson Plaza.......... 10/1/09 7.78% 9,552 9,552
Muncie Plaza............ 10/1/09 7.78% 8,258 8,258
Regency Plaza........... 10/1/09 7.78% 4,477 4,477
St. Charles Towne
Plaza.................. 10/1/09 7.78% 28,656 28,656
West Ridge Plaza........ 10/1/09 7.78% 5,771 5,771
White Oaks Plaza........ 10/1/09 7.78% 17,612 17,612
------- -------
Subtotal 2009......... 396,475 396,475 7.28%
Windsor Park Mall--2.... 5/1/12 8.00% 8,687 8,687
------- -------
Subtotal 2012......... 8,687 8,687 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%
</TABLE>
Page 19 of 42
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
SPG's Weighted Avg
ropertyP Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
-------- -------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Arsenal Mall--2......... 5/15/16 8.20% 2,211 2,211
--------- ---------
Subtotal 2016......... 2,211 2,211 8.20%
Sunland Park Mall....... 1/1/26 8.63% 38,922 38,922
--------- ---------
Subtotal 2026......... 38,922 38,922 8.63%
Keystone at the
Crossing............... 7/1/27 7.85% 63,238 63,238
--------- ---------
Subtotal 2027......... 63,238 63,238 7.85%
--------- --------- ----
Total Consolidated Fixed
Rate Mortgage Debt..... 2,523,289 2,374,890 7.40%
========= ========= ====
Variable Rate Mortgage
Debt:
Trolley Square.......... (1) 7/23/00 8.14% 8,141 7,327
--------- ---------
Subtotal 2000......... 8,141 7,327 8.14%
Crystal River........... 1/1/01 9.64% 15,292 15,292
White Oaks Mall......... 3/1/01 8.39% 16,500 9,062
--------- ---------
Subtotal 2001......... 31,792 24,354 9.18%
Highland Lakes Center... 3/1/02 8.14% 14,377 14,377
Eastgate Consumer Mall.. (7) 3/30/02 7.64% 22,929 22,929
Mainland Crossing....... 3/31/02 8.14% 1,603 1,282
Randall Park Mall--1.... (7) 12/11/02 8.74% 35,000 35,000
Randall Park Mall--2.... (7) 12/11/02 11.64% 5,000 5,000
--------- ---------
Subtotal 2002......... 78,909 78,588 8.49%
Jefferson Valley Mall... (7) 1/11/03 7.89% 60,000 60,000
Raleigh Springs Mall.... 2/23/03 8.29% 11,000 11,000
Richmond Towne Square... (7) 7/15/03 7.64% 55,494 55,494
Shops @ Mission Viejo... (7) 8/31/03 7.79% 133,820 133,820
Arboretum............... (7) 11/30/03 8.14% 34,000 34,000
--------- ---------
Subtotal 2003......... 294,314 294,314 7.84%
North East Mall......... (7) 5/20/04 8.02% 103,292 103,292
Waterford Lakes......... (7) 8/15/04 8.04% 49,745 49,745
--------- ---------
Subtotal 2004......... 153,037 153,037 8.03%
Brunswick Square........ (7) 6/12/05 8.14% 45,000 45,000
--------- ---------
Subtotal 2005......... 45,000 45,000 8.14%
--------- --------- ----
Total Variable Rate
Mortgage Debt.......... 611,193 602,620 8.05%
========= ========= ====
Total Consolidated
Mortgage Debt.......... 2,977,510 7.53%
========= ====
</TABLE>
Page 20 of 42
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
SPG's Weighted Avg
ropertyP Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
-------- -------- -------- ------------ ------------ -------------
<S> <C> <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>
Page 21 of 42
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
SPG's Weighted Avg
ropertyP Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
-------- -------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Variable Rate Unsecured
Debt:
Acquisition Facility--
3...................... 9/24/00 7.29% 500,000 500,000
--------- ---------
Subtotal 2000......... 500,000 500,000 7.29%
Acquisition Facility--
2...................... 3/24/01 7.29% 450,000 450,000
--------- ---------
Subtotal 2001......... 450,000 450,000 7.29%
SPG, L.P. Unsecured
Loan--1................ (7) 2/28/02 7.44% 150,000 150,000
SPG, L.P. Unsecured
Loan--2................ (7) 9/3/02 7.44% 100,000 100,000
--------- ---------
Subtotal 2002......... 250,000 250,000 7.44%
Corporate Revolving
Credit Facility........ (7) 8/25/03 7.29% 680,000 680,000
--------- ---------
Subtotal 2003......... 680,000 680,000 7.29%
--------- ---------
Total Unsecured Variable
Rate Debt.............. 1,880,000 1,880,000 7.31%
---------
Total Unsecured Debt.... 5,670,000 7.22%
=========
Net Premium on Fixed-
Rate Indebtedness...... 513 1,679 N/A
Net Premium on Variable-
Rate Indebtedness...... 672 673 N/A
Total Consolidated
Debt................... 8,649,862 7.33%
Joint Venture
Indebtedness
Fixed Rate Mortgage
Debt:
Coral Square............ 12/1/00 7.40% 53,300 26,650
--------- ---------
Subtotal 2000......... 53,300 26,650 7.40%
Atrium at Chestnut
Hill--1................ 4/1/01 7.29% 42,488 20,878
Atrium at Chestnut
Hill--2................ 4/1/01 8.16% 11,639 5,719
Highland Mall--2........ 10/1/01 8.50% 146 73
Highland Mall--3........ 11/1/01 9.50% 1,437 719
Square One.............. 12/1/01 8.40% 105,189 51,687
--------- ---------
Subtotal 2001......... 160,899 79,075 8.10%
Crystal Mall............ 2/1/03 8.66% 48,671 36,293
Avenues, The............ 5/15/03 8.36% 56,547 14,137
--------- ---------
Subtotal 2003......... 105,218 50,430 8.58%
Solomon Pond............ 2/1/04 7.83% 95,728 47,038
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........... 311,729 153,650 8.41%
</TABLE>
Page 22 of 42
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
SPG's Weighted Avg
ropertyP Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
-------- -------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Westchester, The--1..... 9/1/05 8.74% 150,078 75,039
Westchester, The--2..... 9/1/05 7.20% 53,356 26,678
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......... 303,434 133,042 8.07%
Seminole Towne Center... 1/1/06 6.88% 70,500 31,725
CMBS Loan--Fixed
Component.............. (8) 5/1/06 7.41% 300,000 150,000
CMBS Loan--Fixed
Component--2........... (8) 5/15/06 8.13% 57,100 28,550
Great Northeast Plaza... 6/1/06 9.04% 17,439 8,720
Smith Haven Mall........ 6/1/06 7.86% 115,000 28,750
Mall of Georgia
Crossing............... 6/9/06 7.25% 31,430 15,715
Greendale Mall.......... 11/1/06 8.23% 41,865 20,571
--------- ---------
Subtotal 2006......... 633,334 284,031 7.57%
Town Center at Cobb--1.. 4/1/07 7.54% 49,974 24,987
Town Center at Cobb--2.. 4/1/07 7.25% 65,177 32,589
Gwinnett Place--1....... 4/1/07 7.54% 39,224 19,612
Gwinnett Place--2....... 4/1/07 7.25% 85,642 42,821
--------- ---------
Subtotal 2007......... 240,017 120,009 7.36%
Metrocenter............. 2/28/08 8.45% 30,587 15,294
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% 104,283 51,242
Mall of New Hampshire--
2...................... 10/1/08 8.53% 8,455 4,155
Grapevine Mills......... 10/1/08 6.47% 155,000 58,125
Ontario Mills--5........ 11/2/08 6.75% 142,977 35,744
Source, The............. 11/6/08 6.65% 124,000 31,000
--------- ---------
Subtotal 2008......... 841,302 300,226 6.82%
Apple Blossom Mall...... 9/10/09 7.99% 40,783 20,040
Auburn Mall............. 9/10/09 7.99% 47,745 23,461
Highland Mall--1........ 12/1/09 9.75% 7,261 3,631
Ontario Mills--4........ 12/28/09 n/a 4,198 1,050
--------- ---------
Subtotal 2009......... 99,987 48,180 7.95%
Mall of Georgia......... 7/1/10 7.09% 200,000 100,000
--------- ---------
Subtotal 2010......... 200,000 100,000 7.09%
--------- --------- ----
Total Joint Venture
Fixed Rate Mortgage
Debt................... 2,949,220 1,295,294 7.57%
========= ========= ====
</TABLE>
Page 23 of 42
<PAGE>
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
SPG's Weighted Avg
ropertyP Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
-------- -------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Variable Rate Mortgage
Debt:
Mall at Rockingham...... 8/24/00 8.44% 100,000 24,569
Dadeland Mall........... 12/10/00 7.34% 140,000 70,000
--------- ----------
Subtotal 2000......... 240,000 94,569 7.63%
Tower Shops, The........ 3/13/01 7.84% 12,900 6,450
Liberty Tree Mall--1.... 10/1/01 8.14% 47,006 23,098
Liberty Tree Mall--2.... 10/1/01 10.80% 8,324 4,090
--------- ----------
Subtotal 2001......... 68,230 33,638 8.41%
Montreal Forum.......... 1/31/02 7.50% 11,011 3,923
Arizona Mills........... (7) 2/1/02 7.94% 142,216 37,425
Shops at Sunset Place,
The.................... (7) 6/30/02 7.89% 115,000 43,125
--------- ----------
Subtotal 2002......... 268,227 84,473 7.90%
Cape Cod Mall........... (7) 4/1/03 8.44% 64,935 31,907
CMBS Loan--Floating
Component.............. (8) 5/1/03 7.14% 184,500 92,250
Mall of America......... 11/19/03 7.15% 312,000 85,800
Concord Mills........... (7) 12/2/03 7.99% 177,737 66,651
--------- ----------
Subtotal 2003......... 739,172 276,609 7.50%
Circle Centre Mall--1... (7) 1/31/04 7.08% 60,000 8,802
Circle Centre Mall--2... (7) 1/31/04 8.14% 7,500 1,100
Orlando Premium
Outlets................ (7) 2/12/04 8.14% 39,202 19,601
--------- ----------
Subtotal 2004......... 106,702 29,503 7.83%
Emerald Square Mall..... (7) 3/31/05 8.13% 145,000 71,249
Arundel Mills........... (7) 4/30/05 8.29% 10,000 3,750
Northfield Square....... (7) 4/30/05 9.14% 37,000 11,692
--------- ----------
Subtotal 2005......... 192,000 86,691 8.27%
CMBS Loan--Floating
Component--2 (IBM)..... (8) 5/15/06 7.01% 81,400 40,700
--------- ----------
Subtotal 2005......... 81,400 40,700 7.01%
--------- ---------- ----
Total Joint Venture
Variable Rate Debt..... 1,695,731 646,183 7.71%
========= ========== ====
CMBS Loan--Fixed Premium
(IBM).................. 17,361 9,282
Net Premium on NED
Fixed-Rate
Indebtedness........... 2,118 1,944
Total Joint Venture
Debt................... 1,952,703 7.62%
SPG's Share of Total
Indebtedness........... 10,602,565 7.38%
</TABLE>
--------
(1) Refinanced July 13, 2000 with a new maturity of August 2010.
(2) 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.
(3) 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.
(4) This TIAA Pool is secured by cross-collateralized and cross-defaulted
mortgages encumbering these four Properties.
(5) This TIAA Pool is secured by cross-collateralized and cross-defaulted
mortgages encumbering these three Properties.
(6) Through an interest rate protection agreement, effectively fixed at an all-
in-one rate of 6.16%.
(7) Includes applicable extensions available at Simon Group's option.
(8) These Commercial Mortgage Notes are secured by cross-collateralized
mortgages encumbering thirteen of the Properties. A weighted average rate
is used.
Page 24 of 42
<PAGE>
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
Principal SPG SPG's Interest
Maturity Balance Ownership Share of Rate Terms of Terms of
Property Name Date 06/30/00 % Loan Balance 06/30/00 Variable Rate Interest Rate Protection Agreement
------------- -------- --------- --------- ------------ -------- -------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated
Properties:
Variable Rate Debt
Effectively Fixed
to Maturity:
LIBOR Swapped at 7.24% through
Orland Square....... 9/1/01 50,000 100.00% 50,000 7.742% LIBOR + 0.500% maturity.
Forum Phase I--Class 5/15/04 44,386 60.00% 26,632 6.190% LIBOR + 0.300% Through an interest rate
A-2................ protection agreement, effectively
fixed at an all-in-one rate of
6.19%.
Forum Phase II-- 5/15/04 40,614 55.00% 22,338 6.190% LIBOR + 0.300% Through an interest rate
Class A-2.......... protection agreement, effectively
fixed at an all-in-one rate of
6.19%.
CMBS Loan--Variable 12/15/07 50,000 100.00% 50,000 6.155% LIBOR + 0.365% Through an interest rate
Component.......... protection agreement, effectively
fixed at an all-in-one rate of
6.16%.
--------- ---------
185,000 148,969
========= =========
Other Hedged Debt:
Randall Park Mall-- 12/11/02 35,000 100.00% 35,000 8.742% LIBOR + 2.100% LIBOR Capped at a rate of 7.40%
1.................. through maturity.
Randall Park Mall-- 12/11/02 5,000 100.00% 5,000 11.642% LIBOR + 5.000% LIBOR Capped at a rate of 7.40%
2.................. through maturity.
Raleigh Springs 2/23/03 11,000 100.00% 11,000 8.292% LIBOR + 1.650% LIBOR Capped at a rate of 8.35%
Mall............... through September 10, 2001.
Unsecured Revolving 8/25/03 140,000 100.00% 140,000 7.292% LIBOR + 0.650% Subject to an 11.53% LIBOR cap on
Credit Facility-- $90M and a 16.77% LIBOR cap on
(1.25B--capped).... $50M.
--------- ---------
191,000 191,000
========= =========
Floating Rate Debt:
Trolley Square...... 11/12/00 8,141 100.00% 7,327 8.467% LIBOR + 1.825%
CPI Merger 9/24/00 500,000 100.00% 500,000 7.292% LIBOR + 0.650%
Facility--3
(1.4B).............
Crystal River....... 1/1/01 15,292 100.00% 15,292 9.642% LIBOR + 3.000%
White Oaks Mall..... 3/1/01 16,500 54.92% 9,062 8.391% LIBOR + 1.300%
CPI Merger 3/24/01 450,000 100.00% 450,000 7.292% LIBOR + 0.650%
Facility--2
(1.4B).............
SPG, L.P. Unsecured 2/28/02 150,000 100.00% 150,000 7.442% LIBOR + 0.800%
Loan--1............
Highland Lakes 3/1/02 14,377 100.00% 14,377 8.142% LIBOR + 1.500%
Center.............
Eastgate Consumer 3/30/02 22,929 100.00% 22,929 7.642% LIBOR + 1.000%
Mall...............
Mainland Crossing... 3/31/02 1,603 80.00% 1,282 8.142% LIBOR + 1.500%
SPG, L.P. Unsecured 9/3/02 100,000 100.00% 100,000 7.442% LIBOR + 0.800%
Loan--2............
Jefferson Valley 1/11/03 60,000 100.00% 60,000 7.892% LIBOR + 1.250%
Mall...............
Richmond Towne 7/15/03 55,494 100.00% 55,494 7.642% LIBOR + 1.000%
Square.............
Unsecured Revolving 8/25/03 540,000 100.00% 540,000 7.292% LIBOR + 0.650%
Credit Facility--
(1.25B)............
Shops @ Mission 8/31/03 133,820 100.00% 133,820 7.792% LIBOR + 1.150%
Viejo..............
Arboretum........... 11/30/03 34,000 100.00% 34,000 8.142% LIBOR + 1.500%
North East Mall..... 5/20/04 103,292 100.00% 103,292 8.017% LIBOR + 1.375%
Waterford Lakes..... 8/15/04 49,745 100.00% 49,745 8.042% LIBOR + 1.400%
Brunswick Square.... 6/12/05 45,000 100.00% 45,000 8.142% LIBOR + 1.500%
--------- ---------
2,300,193 2,291,620
========= =========
</TABLE>
Page 25 of 42
<PAGE>
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
SPG's
Principal SPG Share Interest
Property Maturity Balance Ownership of Loan Rate Terms of
Name Date 06/30/00 % Balance 06/30/00 Variable Rate
-------- -------- --------- --------- ------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Joint Venture
Properties:
Other Hedged
Debt:
Arizona Mills... 2/1/02 142,216 26.32% 37,425 7.942% LIBOR + 1.300%
CMBS Loan-- 5/1/03 184,500 50.00% 92,250 7.140% See Footnote (1)
Floating
Component......
CMBS Loan--
Floating
Component--2... 5/15/06 81,400 50.00% 40,700 7.011% See Footnote (1)
Circle Centre
Mall--1........ 1/31/04 60,000 14.67% 8,802 7.082% LIBOR + 0.440%
Circle Centre
Mall--2........ 1/31/04 7,500 14.67% 1,100 8.142% LIBOR + 1.500%
Emerald Square
Mall........... 3/31/05 145,000 49.14% 71,249 8.130% LIBOR + 1.488%
Mall of 11/19/03 312,000 27.50% 85,800 7.155% LIBOR + 0.513%
America........
Northfield
Square......... 4/30/05 37,000 31.60% 11,692 9.142% LIBOR + 2.500%
------- -------
969,616 349,019
======= =======
Floating Rate
Debt:
Mall at
Rockingham..... 8/24/00 100,000 24.57% 24,569 8.442% LIBOR + 1.800%
Arundel Mills... 4/30/05 10,000 37.50% 3,750 8.292% LIBOR + 1.650%
Dadeland Mall... 12/10/00 140,000 50.00% 70,000 7.342% LIBOR + 0.700%
Tower Shops,
The............ 3/13/01 12,900 50.00% 6,450 7.842% LIBOR + 1.200%
Liberty Tree
Mall--1........ 10/1/01 47,006 49.14% 23,098 8.142% LIBOR + 1.500%
Liberty Tree
Mall--2........ 10/1/01 8,324 49.14% 4,090 10.802% LIBOR + 4.160%
Montreal Forum.. 1/31/02 11,011 35.63% 3,923 7.500% Canadian Prime
Shops at Sunset
Place, The..... 6/30/02 115,000 37.50% 43,125 7.892% LIBOR + 1.250%
Cape Cod Mall... 4/1/03 64,935 49.14% 31,907 8.442% LIBOR + 1.800%
Concord Mills... 12/2/03 177,737 37.50% 66,651 7.992% LIBOR + 1.350%
Orlando Premium
Outlets........ 2/12/04 39,202 50.00% 19,601 8.142% LIBOR + 1.500%
------- -------
726,115 297,164
======= =======
<CAPTION>
Property
Name Terms of Interest Rate Protection Agreement
-------- ---------------------------------------------------
<S> <C>
Joint Venture
Properties:
Other Hedged
Debt:
Arizona Mills... LIBOR Capped at 9.50% through maturity.
CMBS Loan-- The Operating Partnership took assignment
Floating of an interest rate protection agreement (LIBOR
Component...... cap of 11.67%) relating to this debt.
CMBS Loan--
Floating
Component--2... 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 LIBOR Capped at 8.7157% through
America........ March 12, 2003.
Northfield
Square......... LIBOR Capped at 8.50% through maturity.
Floating Rate
Debt:
Mall at
Rockingham.....
Arundel Mills...
Dadeland Mall...
Tower Shops,
The............
Liberty Tree
Mall--1........
Liberty Tree
Mall--2........
Montreal Forum..
Shops at Sunset
Place, The..... Rate can be reduced based upon project performance.
Cape Cod Mall...
Concord Mills...
Orlando Premium
Outlets........ Rate can be reduced based upon project performance.
</TABLE>
-----
(1) Represents the weighted average interest rate.
Page 26 of 42
<PAGE>
SIMON PROPERTY GROUP
New Development Activities
As of June 30, 2000
<TABLE>
<CAPTION>
Non-Anchor
Simon Group's Projected Cost Sq. Footage
Ownership Actual/Projected (in millions) Leased/Committed GLA
Mall/Location Percentage Opening (1) (2) (sq. ft.)
------------- ------------- ---------------- -------------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Projects Recently Opened
Orlando Premium Outlets 50% 5/00 $91 97% 430,000
Orlando, FL
Anchors/Major Tenants: Versace Company Store, Bottega Veneta, Timberland, Nike Factory Store,
Liz Claiborne Shoes, Mikasa, Banana Republic Factory Store, Nautica,
Coach, Tommy Hilfiger, Dooney & Bourke, Polo Ralph Lauren Factory Store,
Bose, Westpoint Stevens, DKNY, JP Tod's
Projects Under
Construction
Arundel Mills 37.5% 11/00 $252 60% 1,300,000
Anne Arundel, MD
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
Waterford Lakes Town 100.0% 11/00 $84 100% 982,000
Center (Phase I & II) (Phase I)
Orlando, FL
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 67% 667,000
Annapolis, MD
Anchors/Major Tenants: Hecht's, Sears, Old Navy, Barnes & Noble, Bed Bath & Beyond, Zany
Brainy, Safeway
</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.
(2) Community Center leased/committed percentage includes owned anchor GLA.
(3) Leasing still in preliminary stage.
Page 27 of 42
<PAGE>
SIMON PROPERTY GROUP
Significant Renovation/Expansion Activities
As of June 30, 2000
<TABLE>
<CAPTION>
Simon Projected GLA New or
Group's Actual/ Cost Before Incremental
Ownership Projected (in millions) Renov/Expan GLA
Mall/Location Percentage Opening (1) (sq. ft.) (sq. ft.)
------------- ---------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Projects Under
Construction
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 (to
open 11/00)
North East Mall 100% 9/99, 9/00 $103 1,141,000 308,000
Hurst, TX & 3/01
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 (to open
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 & fall 2000
Project Description: JCPenney remodel (opened 11/99); mall renovation and new
Dillard's (opened 2/00); new Borders (opened 4/00), Old Navy
(to open 11/00), Designer Shoe Warehouse and Burdines
remodel (to open September 2000), Mars Music Store (to open
10/00)
Town Center at Boca 100% 10/99 $ 67 1,327,000 228,000
Raton & 11/00
Boca Raton, FL
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 (to open 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 28 of 42
<PAGE>
SIMON PROPERTY GROUP
Capital Expenditures
For the Six Months Ended June 30, 2000
(In millions)
<TABLE>
<CAPTION>
Joint Venture
Properties
--------------
Simon
Consolidated Group's
Properties Total Share
------------ ------ -------
<S> <C> <C> <C>
New Developments................................... $ 34.1 $115.2 $45.3
Renovations and Expansions......................... 100.6 10.9 4.6
Tenant Allowances.................................. 28.9 9.3 3.4
Capital Expenditures Recoverable from Tenants...... 11.5 1.8 .8
Other (1).......................................... -- .2 .1
------ ------ -----
Totals............................................. $175.1 $137.4 $54.2
====== ====== =====
</TABLE>
--------
(1) Primarily represents capital expenditures not recovered from tenants.
Page 29 of 42
<PAGE>
SIMON PROPERTY GROUP
Conference Call Text
August 3, 2000
Forward Looking Statement
Welcome to the Simon Property Group second quarter earnings conference call.
Please be aware that statements during this call that are not historical may be
deemed forward-looking statements. 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. We direct you to the Company's various filings with the Securities
and Exchange Commission for a detailed discussion of risks and uncertainties.
Participating in today's call will be David Simon (chief executive officer)
and Steve Sterrett (chief financial officer). Rick Sokolov (president and chief
operating officer) is out of the office, but is hooked in by phone and will be
available for questions at the end of the call. David will now provide opening
comments.
Opening Comments
Good afternoon everyone and thank you for joining us today. It was another
good quarter for SPG with strong operational and financial results as well as
continuing advancements on the technology front. During the second quarter:
. We grew FFO per share, on a comparable basis, 9% to $0.75.
. We increased occupancy in the regional mall portfolio by 160 basis
points to 90%.
. We grew comparable retail sales per square foot 5.2% to $387, while
total retail sales per square foot increased 6.3% to $373.
. We sold the Lenox Office Building in Atlanta, one small regional mall in
Nebraska and three neighborhood community centers in Indiana, Illinois
and Colorado, generating total proceeds of $92.1 million.
. We announced the launch of MerchantWired, bringing broadband extranet to
the mall industry with most of the industry-leading companies as
participants.
. And lastly, we announced our participation in Constellation Real Estate
Technologies, a cross-sector real estate technology initiative.
I will now ask Steve Sterrett to provide the details behind our results.
Financial and Operational Results
Our quarterly supplemental information package will be filed as a Form 8-K
on Monday. This filing is also available via mail or e-mail. If you would like
to receive the supplemental information via e-mail, please notify Shelly Doran
at [email protected].
As discussed during last quarter's call, 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.
To provide you with an "apples-to-apples" look at our results, we have
calculated the impact upon 1999 second quarter and six months' results,
assuming 1999 adoption of 101. For the quarter, the Company's share
Page 30 of 42
<PAGE>
SIMON PROPERTY GROUP
Conference Call Text
August 3, 2000
of 1999 FFO would have been reduced by approximately $4.7 million, or 2 cents
per share. Accordingly, our diluted FFO for the second quarter of 2000, on a
comparable, per share basis, increased 8.7%, from 69 cents per share to 75
cents per share.
For the six months, the Company's share of 1999 FFO would have been reduced
by approximately $8.4 million, or 4 cents per share. Therefore, our diluted FFO
for the first six months of 2000, on a comparable, per share basis, increased
8.2%, from $1.34 per share to $1.45 cents per share.
Highlights of our second quarter operating results are as follows:
. Occupancy increased 160 basis points from June 30, 1999 to 90% at June
30, 2000. We expect this positive trend to continue. Primary drivers of
this improved occupancy rate are: 1) malls redeveloped in recent years,
such as Mission Viejo and Richmond Town Square, are very well-leased and
occupied and 2) we have streamlined our in-house lease execution process
and are turning leases around at a much quicker pace, thereby getting
tenants open quicker and boosting occupancy.
. Comparable sales per square foot, i.e. sales of tenants who have been in
place for at least 24 months, increased 5.2% to $387.
. Total sales per square foot increased 6.3% to $373 per square foot.
. Average base rent increased 5.7% to $27.63.
. Average initial base rent for new mall stores opened in the first six
months of 2000 was $32.38 per square foot, versus average rents of
$29.71 for those tenants who closed or whose leases expired. This
releasing spread is lower than our historical spread due to five large-
space tenant leases executed year-to-date (four of those were in the
first quarter). Excluding these spaces, the average initial base rent
for new mall stores opened was $34.83 per square foot, for a re-leasing
spread or $4.35, or a 14.3% increase.
. Same property NOI growth was 4.5%, driven by rent increases, occupancy
gains and our SBV initiatives.
An additional note regarding sales--As you may be aware, the ICSC compiles
and reports sales data for regional malls. Recent increases reported by the
ICSC have been lower than the sales increases reported by the public mall
companies, resulting in some confusion over sales productivity in the industry.
SPG sends data on a subset of its regional mall portfolio to a third party
for compilation and calculation. Our data is compiled with several other mall
companies' data, both public and private. Due to that fact the data is
submitted to a third party and that it includes information gathered from many
companies, there is a couple of months' time lag between period-end and
reporting of the information.
There are obvious differences in methodology between the ICSC data and the
comparable sales growth data we and other public mall companies report.
1. For tenants open less than the full period being reported on, under
the ICSC methodology, no adjustment is made to weight the square footage of
that tenant to reflect the partial period of sales. That is, if a tenant
was open only 2 months of the year, the square footage they occupy would
still be included in the denominator for a full 12 months. This
artificially and incorrectly distorts the sales per square foot
productivity the ICSC reports. This is a significant flaw in the ICSC
methodology, especially for malls in a period of significant redevelopment
or releasing activity. The SPG calculation we report publicly each quarter
correctly weights the square footage in the base to match the period the
tenant's sales relate to.
Page 31 of 42
<PAGE>
SIMON PROPERTY GROUP
Conference Call Text
August 3, 2000
2. The ICSC calculation includes theaters' sales in its calculation.
While not a flaw per se, the lower productivity nature of theater spaces
can skew the overall results reported by the ICSC, especially to the extent
that theaters change as a component of the overall tenant mix. SPG's
quarterly reporting excludes theaters and includes only small shop tenants.
These methodology differences, coupled with the data-gathering and
compilation process (the accuracy of which we cannot verify) makes the ICSC
data, in our opinion, problematic at best. Why do we have this opinion? Besides
the above methodology issues, consider this. At 12/31/99, the ICSC reported
sales growth of 2.4%. SPG's growth rate in the ICSC data was 2.5%. For 2000,
the most recent ICSC data available is for April. The year-to-date growth of
2000 sales reported by the ICSC for the regional mall industry was 3.5%. The
growth rate for SPG data submitted to the ICSC was 2%. Having said that, we are
working 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. Mike
McCarty, our head of research, currently chairs the ICSC research committee
addressing this issue.
Liquidity and Capital Activities
The third tranche of our CPI debt facility is due in September of 2000 and
we are nearing completion of the refinancing of this $500 million obligation
with approximately six of our lead lenders for a one-year period. We expect
pricing on this refinancing to be consistent with the existing facility rate of
LIBOR plus 65 bps.
SPG's variable rate debt consists primarily of the remaining two tranches of
the CPI facility and borrowings under the Company's corporate credit facility.
Simon has finalized a transaction to sell its 8% equity investment in
Chelsea GCA Realty to an institutional investor in a private transaction. This
transaction will result in no gain or loss to SPG, and was completed with the
approval of Chelsea. As you know, SPG and Chelsea recently completed their
initial joint project, the Orlando Premium Outlets. Chelsea and Simon have a
wonderful working relationship, and are currently evaluating additional joint
development opportunities. Neither SPG nor Chelsea believe, however, that our
continuing ownership stake in Chelsea is necessary to the relationship. In no
way should this transaction be viewed as a commentary on the valuation of
Chelsea. Instead, it merely reflects our desire to monetize our investment in
Chelsea and recycle the $50 million of capital.
Dispositions
We continued to make progress on the disposition of non-core assets during
the second quarter:
. On May 1st, we sold the office building attached to Lenox Square in
Atlanta, Georgia, generating proceeds of approximately $71 million. This
transaction was completed at a cap rate of 8.25%. This sale was part of
our strategy to dispose of SPG's office assets.
. During the remainder of the quarter, the Company sold one small regional
mall and three small neighborhood community centers, generating proceeds
of $21 million. The blended cap rate for these transactions was 11.5%.
We continue to be active in the disposition of non-core assets. We have
ongoing interest in additional regional malls, as well as our remaining office
assets. We expect to complete additional transactions in the remainder of 2000.
Page 32 of 42
<PAGE>
SIMON PROPERTY GROUP
Conference Call Text
August 3, 2000
Development Activities
In May, we opened Orlando Premium Outlets in Orlando, Florida. This is our
first 50/50 joint venture with Chelsea GCA Realty to develop upscale
manufacturers' outlet shopping centers. This 430,000 square foot fashion-
oriented outlet center features 110 high-quality tenants such as Versace
Company Store, Bottega Veneta, Banana Republic Factory Outlet, Coach,
Timberland, Nike Factory Store, Bose, Polo Ralph Lauren Factory Store,
Westpoint Stevens, DKNY, JP Tod's and Cole-Haan, to name a few. The property
has opened very strong, and we are very pleased with the results. Orlando is
now 97% leased and committed.
We have three new developments currently under construction in the U.S.:
. Arundel Mills in Anne Arundel, Maryland is our fifth joint venture with
The Mills Corporation. This 1.3 million square foot value-oriented
super-regional mall will open in November of this year. The tenant line-
up here is representative of our other Mills developments and is
detailed in our press release.
. Waterford Lakes Town Center in Orlando, Florida will open Phase II in
November of this year. Phase I, which opened in November 1999, is now
100% leased and committed. Phase II anchors include OfficeMax, PetsMart
and Best Buy.
. Bowie Town Center in the Baltimore/Washington corridor commenced
construction in the spring of this year. This is a open-air regional
mall with a main street architecture design encompassing 667,000 square
feet of GLA--560,000 square feet of mall space; 107,000 square feet of
grocery retail. The center will be anchored by Hecht's and Sears and
will also feature Old Navy, Barnes & Noble, Bed Bath & Beyond, Zany
Brainy and Safeway.
We will also complete four major redevelopments in 2000:
. LaPlaza Mall in McAllen, Texas
. North East Mall in Hurst, Texas
. Palm Beach Mall in West Palm Beach, Florida
. Town Center at Boca Raton, Florida
The scope of these projects is included in the press release, and our
typical, detailed disclosure for new development and redevelopment activities
is provided in our 8-K, which will be filed on Monday.
Technology Initiatives
Let me now spend a couple of minutes talking about our technology
initiatives.
During the first quarter conference call we discussed the creation of
MerchantWired, a full-service retail infrastructure company that connects the
physical and virtual worlds in the retail industry by providing retailers
access to a high speed, highly reliable and secure coast-to-coast broadband
network. MerchantWired provides retailers in any property across the country
with the infrastructure to meet their specific communication needs.
MerchantWired has forged strategic technology partnerships with Cisco Systems,
Inc., IBM, Intermedia Communications and AT&T. A consortium of mall companies
currently owns MerchantWired, including Simon, Macerich, Rouse, Taubman, Urban
and Westfield. MerchantWired plans to enroll other property owners in the
program.
Page 33 of 42
<PAGE>
SIMON PROPERTY GROUP
Conference Call Text
August 3, 2000
MerchantWired is headquartered in Indianapolis and is led by President and
CEO James R. Giuliano, III. SPG currently owns approximately 50% of the
venture. We are extremely pleased with the lineup of mall industry leaders
participating in MerchantWired and with the spirit of cooperation achieved
among the partners in launching this exciting new venture.
We are pleased with the progress made since the announcement of
MerchantWired in May. Over 100 malls have been wired to date and we expect to
have over 350 malls fully wired and operational by October 31st. 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.
Because of our ownership level in MerchantWired, SPG is required to account
for its results using the equity method. As with any startup, MerchantWired
will be in a net loss position as it ramps up operations. We expect our share
of MerchantWired's results, plus our other technology initiatives, to
negatively impact SPG's FFO by three to five cents per share in the remainder
of 2000. Given the rapid rollout of MerchantWired, the impact on 2001 is a
little more difficult to project, but we would expect the impact to be about
the same as in 2000. This negative impact is the result of the flow-through of
MerchantWired's administrative and marketing expenses, which are typical for a
start-up organization, and necessary for long-term value creation.
On May 4th, we announced our joining with leading real estate companies from
a broad range of property sectors to form a real estate technology company,
Constellation Real Estate Technologies. The new company intends to form,
incubate and sponsor real estate-related Internet, e-commerce and broadband
enterprises; acquire interests in existing "best of breed" companies on a
synergistic basis; and act as an opportunistic consolidator across property
sectors in the emerging real estate technology area.
Since the initial announcement, Constellation has been getting organized and
working to expand membership. The group has also been completing due diligence
on potential initial investments. You will hear more from Constellation in the
coming months.
In the second quarter, we also rolled out an enhanced version of our mall
websites at shopsimon.com. 155 Simon malls now have personalized individual Web
sites where shoppers can:
1. check mall hours, location and directions
2. review upcoming mall events
3. obtain customer service information
4. review restaurant and theater listings
5. buy gift certificates on-line
6. sign up for MALLPeRKS and check point balances
7. apply for jobs at mall retailers on-line and
8. subscribe to "S" magazine on-line
9. find out about retailer sales and special promotions
10. customize the information they want to receive from us via e-mail on
sales, new stores, events, etc.
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SIMON PROPERTY GROUP
Conference Call Text
August 3, 2000
At our Mall of America website, we are also piloting an e-commerce feature.
It is populated with hundreds of merchandise offerings available for sale on-
line from 6 retailers.
At the end of August, shoppers will be able to review MALLPeRKS rewards on
line. At that time we will also kick-off our first on-line sweepstakes program.
At the end of September, we will unveil banner ad positions on the site for
sale and will offer multi-lingual support of the site in Spanish for certain
properties in Texas and Florida.
Regarding clixnmortar--we continue to progress toward introducing a "new and
improved" product for the Atlanta market in the 2000 holiday season. An
important recent investment that may prove integral to the development of clix
products, is SPG's investment in Found.com. Found.com 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 from an online "warehouse." This technology has
the potential to truly integrate on-line and physical shopping into a seamless
experience for the consumer. We made an initial equity investment in Found, and
are currently working to integrate the technology into the clix existing
infrastructure.
International
SPG has ownership interests in five operational assets in Europe:
. 3 in Poland--all one-level malls anchored by Carrefour, and
. 2 in France--one anchored by Carrefour and the other by Auchan
The projects are performing well, construction was completed within
budgetary expectations, and leasing has been good.
There are two projects under construction in Poland, both to be anchored by
Carrefour; and our list of potential projects includes several locations in
France, Poland and Switzerland.
Simon's international investment in BEG/ERE is $43.7 million to date.
Conclusion
In conclusion, I want reiterate that I am bullish about our company for the
following reasons:
. Our core business remains strong, as evidenced by continuing portfolio
sales growth and occupancy increases, healthy NOI growth, and continued
margin improvement.
. We have a strong balance sheet--no acquisition activity is planned, our
development activity is slowing, and we are actively recycling capital
through property dispositions and the sale of our investment in Chelsea.
. And this is an exciting time to be in the real estate business with the
multitude of opportunities offered by technology. And I firmly believe
that we are at the forefront of the movement to take advantage of
technology.
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