GENERAL GROWTH PROPERTIES INC
424B3, 1999-10-29
REAL ESTATE INVESTMENT TRUSTS
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<PAGE>   1

                                               FILED PURSUANT TO RULE 424(b)(3)
                                                     REGISTRATION NO. 333-88813


                                  PROSPECTUS
                                518,833 SHARES

                         GENERAL GROWTH PROPERTIES, INC.
                                  COMMON STOCK
                           (PAR VALUE $.10 PER SHARE)

         This Prospectus relates to our issuance of up to 518,833 shares of our
Common Stock to the holders of certain common units of limited partnership
interest in GGP Limited Partnership, a Delaware limited partnership. We are the
general partner of GGP Limited Partnership. GGP Limited Partnership issued the
common units in connection with its October 23, 1997 acquisition of a regional
shopping center located in Hickory, North Carolina. We may elect to deliver the
Common Stock to unit holders who wish to have their common units redeemed. This
registration does not necessarily mean that any of the common units will be
redeemed or that we will issue any of the Common Stock.

         We will not receive any cash proceeds from the issuance of the Common
Stock upon the tender of common units for redemption. However, we will acquire
the common units in exchange for Common Stock that we issue pursuant to this
Prospectus. With each such acquisition, our interest in GGP Limited Partnership
will increase.

         Our principal executive offices are located at 110 North Wacker,
Chicago, Illinois 60606, our telephone number is (312) 960-5000 and our web site
address is http://www.generalgrowth.com.

         Our Common Stock is listed on the New York Stock Exchange under the
symbol "GGP". The last reported sale price of the Common Stock on the New York
Stock Exchange on October 26, 1999, was $28 13/16 per share.

         There are certain restrictions on ownership of the Common Stock
designed to preserve our status as a real estate investment trust for federal
income tax purposes. See "Capital Stock -- Restrictions on Transfer of Capital
Stock" on page 7 for information about these restrictions. There are certain
potentially material consequences associated with a redemption of common units.
See "Redemption of Common Units -- Tax Consequences of Redemption" on page 14
and "Redemption of Common Units -- Potential Change in Investment upon
Redemption of Common Units" on page 14 for information about these
consequences.

                             ---------------------

         NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                             ---------------------

           The date of this Prospectus is October 27, 1999.
<PAGE>   2



         YOU SHOULD RELY ONLY ON INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION PROVIDED BY THE PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE
DATE ON THE FRONT OF THIS PROSPECTUS.


                                TABLE OF CONTENTS

<TABLE>

<S>                                                                                                               <C>
Where to Find More Information..................................................................................  3
Incorporation of Certain Documents by Reference.................................................................  3
Forward-Looking Statements......................................................................................  4
The Company.....................................................................................................  4
Recent Developments.............................................................................................  5
Capital Stock...................................................................................................  6
Summary of Partnership Agreement................................................................................ 11
Redemption of Common Units...................................................................................... 13
Comparison of Ownership of Common Units and Shares of Common Stock.............................................. 15
Certain Federal Income Tax Considerations....................................................................... 19
Use of Proceeds................................................................................................. 27
Plan of Distribution............................................................................................ 27
Legal Matters................................................................................................... 27
Experts......................................................................................................... 27
</TABLE>



                                        2

<PAGE>   3



                         WHERE TO FIND MORE INFORMATION

         We have filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Common Stock offered hereby. This Prospectus is a part of
the Registration Statement, but the Registration Statement also contains
additional information and exhibits.

         We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, we file
reports, proxy statements and other information with the Commission. You can
read and copy the Registration Statement and the reports, proxy statements and
other information at the Public Reference Room of the Commission, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at the Commission's regional
offices at Seven World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Also, you can obtain copies of such material from the Public Reference Room of
the Commission, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at
prescribed rates. You can obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. You can access such
materials electronically by means of the Commission's home page on the internet
at http://www.sec.gov. Our Common Stock is listed on the New York Stock Exchange
("NYSE") and you can inspect such materials at the offices of the NYSE, 20 Broad
Street, 17th Floor, New York, New York 10005.


                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         We file annual, quarterly and special reports, proxy statements and
other information with the Commission. The Commission allows us to "incorporate
by reference" the information we file with it, which means that we can disclose
important information to you by referring to those documents. The information
incorporated by reference is an important part of this Prospectus. Any statement
contained in a document which is incorporated by reference in this Prospectus is
automatically updated and superseded if information contained in this
Prospectus, or information that we later file with the Commission, modifies or
replaces this information.
We incorporate by reference the following documents:

             1. Our Annual Report on Form 10-K for the year ended December
         31, 1998, dated March 19, 1999.

             2. Our Quarterly Report on Form 10-Q for the quarter ended
         March 31, 1999, dated May 10, 1999.

             3. Our Quarterly Report on Form 10-Q for the quarter ended
         June 30, 1999, dated August 12, 1999.

             4. Our Current Report on Form 8-K, dated March 18, 1999.

             5. Our Current Report on Form 8-K, dated July 12, 1999.

             6. Our Current Report on Form 8-K, dated July 14, 1999.

             7. Our Current Report on Form 8-K, dated August 12, 1999.

             8. The portions of our Proxy Statement for our 1999 Annual
         Meeting of Stockholders that have been incorporated by reference into
         our Annual Report on Form 10-K.



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             9. The description of our 7.25% Preferred Income Equity
         Redeemable Stock, Series A, par value $100 per share ("PIERS"),
         contained in our Registration Statement on Form 8-A which was filed
         with the Commission on June 5, 1998, pursuant to Section 12(b) of the
         Exchange Act.

             10. The description of our Common Stock contained in our
         Registration Statement on Form 8-A which was filed with the Commission
         on January 12, 1993, pursuant to Section 12(b) of the Exchange Act.

             11. The description of our Common Stock contained in our
         Registration Statement on Form 8-A which was filed with the Commission
         on November 18, 1998, pursuant to Section 12(b) of the Exchange Act.

             12. All documents filed by us with the Commission pursuant to
         Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
         of this Prospectus and prior to the termination of the offering.

         To receive a free copy of any of the documents incorporated by
reference in this Prospectus (other than exhibits), call or write General Growth
Properties, Inc., 110 North Wacker, Chicago, IL 60606, Attention:
Director of Investor Relations, Telephone (312) 960-5000.


                           FORWARD-LOOKING STATEMENTS

         This Prospectus and those documents incorporated by reference herein
may contain certain "forward-looking information statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act,
including, without limitation, statements with respect to anticipated future
operating and financial performance, growth and acquisition opportunities and
other similar forecasts and statements of expectation. Words such as "expects,"
"estimates," "plans," "anticipates," "predicts," "intends," "believes," "seeks,"
and "should" and other similar expressions and variations of these expressions
are intended to identify forward- looking statements. Forward-looking statements
we make are based on our estimates, projections, beliefs and assumptions at the
time of the statements and are not guarantees of future performance. We disclaim
any obligation to update or revise any forward-looking statement based on the
occurrence of future events, the receipt of new information or otherwise.

         Actual future performance, outcomes and results may differ materially
from those expressed in forwardlooking statements we make as a result of a
number of risks, uncertainties and assumptions. Representative examples of these
factors include, without limitation, general industry and economic conditions,
interest rate trends, cost of capital and capital requirements, availability of
real estate properties, competition from other companies and venues for the
sale/distribution of goods and services, changes in retail rent rates in our
markets, shifts in customer demands, tenant bankruptcies, changes in operating
expenses, including employee wages, benefits and training, governmental and
public policy changes, changes in applicable laws, rules and regulations,
including changes in tax laws, the ability to obtain suitable equity and/or debt
financing, and the continued availability of financing in the amounts and on the
terms necessary to support our future business.


                                   THE COMPANY

         We are a self-administered and self-managed real estate investment
trust ("REIT") that owns, operates, manages, leases, acquires, develops, expands
and finances regional mall shopping centers in major and middle markets
throughout the United States. We were organized in 1986 to continue expanding
the Bucksbaum family business, which has been engaged in the shopping center
business since 1954.


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<PAGE>   5




         We conduct our business through GGP Limited Partnership, which holds
substantially all of our interests in properties. We own an approximate 72%
partnership interest in GGP Limited Partnership. The remaining approximate 28%
interest in GGP Limited Partnership is held by limited partners which include a
partnership comprised of trusts for the benefit of the Bucksbaum family and
others who have contributed properties to us. As of October 1, 1999, GGP Limited
Partnership owned or had an ownership interest in 87 regional mall shopping
centers in 35 states and had two mall shopping centers under development. Our
regional mall shopping centers have approximately 74 million square feet of
gross retail space, including anchor stores that may, in some cases, be owned by
the anchor retailer, freestanding stores and mall tenant areas.

         Specifically, as of October 1, 1999, GGP Limited Partnership owned:

         -        100% of 55 regional mall shopping centers, including two mall
                  shopping centers currently under development.

         -        51% of the outstanding common stock of GGP/Ivanhoe, Inc., a
                  Delaware corporation that has qualified as a REIT for federal
                  income tax purposes. GGP/Ivanhoe owns 100% of seven regional
                  mall shopping centers.

         -        51% of the common stock of GGP Ivanhoe III, Inc., a Delaware
                  corporation that has qualified as a REIT for federal income
                  tax purposes. GGP Ivanhoe III owns 100% of seven regional mall
                  shopping centers.

         -        50% of each of two regional mall shopping centers.

         -        50% of the outstanding common stock of GGP/Homart, Inc., a
                  Delaware corporation that has qualified as a REIT for federal
                  income tax purposes. GGP/Homart owns interests in 23 regional
                  mall shopping centers.

         -        A 100% non-voting preferred stock interest, representing 95%
                  of the equity interest, in General Growth Management, Inc.
                  Several of our officers hold all of the voting common stock of
                  GGMI, which represents 5% of the equity interest in GGMI.

         We are incorporated under the laws of the State of Delaware. We have
qualified as a REIT for federal income tax purposes. In order to maintain such
qualification, we must distribute at least 95% of our REIT taxable income (as
computed without regard to net capital gains or the dividends-paid deduction),
and of our after-tax net income from foreclosure property each year. Dividends
on any preferred stock, including PIERS, would be included as distributions for
this purpose.

         In this Prospectus, references to "we," "us" or "our" include those
entities which we own or control, including GGP Limited Partnership, unless the
context indicates otherwise.


                                  CAPITAL STOCK

GENERAL

         Our authorized capital stock consists of 210,000,000 shares of Common
Stock and 5,000,000 shares of preferred stock, par value $100 per share. The
following summary description of our capital stock does not purport to be
complete and is qualified by reference to our Second Amended and Restated
Certificate of Incorporation, as amended (the "Certificate"), the Certificate of
Designations, Preferences and Rights relating to PIERS, as amended (the
"Certificate of Designations"), which was filed on June 4, 1998 on Form 8-K and
any


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other certificate of designation which we will file with the Commission in
connection with any other offering of preferred stock.

         As of October 1, 1999, 51,677,425 shares of Common Stock were issued
and outstanding and 13,500,000 depositary shares (the "Depositary Shares"), each
representing 1/40 of a PIERS, were issued and outstanding. In addition, as of
such date, there were 19,798,192 common units outstanding, 518,833 of which were
issued in connection with the acquisition by GGP Limited Partnership on October
23, 1997 of a regional shopping center located in Hickory, North Carolina, to
which this Prospectus relates (the "Acquisition"). Our Common Stock is listed on
the NYSE under the symbol "GGP" and our Depositary Shares are listed on the NYSE
under the symbol "GGPPrA."


DESCRIPTION OF COMMON STOCK

         The holders of Common Stock exclusively possess all voting power,
except as otherwise required by law or provided in the Certificate of
Designations and any resolution adopted by the Board of Directors with respect
to any series of capital stock subsequently established. Each share of common
stock entitles the holder to one vote on all matters submitted to a vote of
stockholders, including elections of directors. The Certificate does not provide
for cumulative voting in the election of directors. Subject to any preferential
rights of any outstanding series of preferred stock (including PIERS), the
holders of Common Stock are entitled to such distributions as the Board of
Directors may declare from time to time from available funds and, upon
liquidation, are entitled to receive their proportionate share of all assets of
the REIT available for distribution. All Common Stock tendered upon the
redemption of your common units will be fully paid and nonassessable, and you
will not have preemptive rights.

SHAREHOLDER RIGHTS PLAN

         On November 18, 1998, we adopted a shareholder rights plan (the
"Plan"). Pursuant to the Plan, we declared a dividend of one preferred share
purchase right (a "Right") for each share of Common Stock outstanding on
December 10, 1998 to the stockholders of record on that date. Prior to becoming
exercisable, the Rights trade together with the Common Stock. The Rights become
exercisable when a person or group acquires or commences or announces a tender
or exchange offer for 15% or more of the Common Stock (or, in the case of
certain grandfathered stockholders described in the Plan, more than the
applicable grandfathered limit described in the Plan). Each Right initially
entitles the holder to purchase from us one one-thousandth of a share of
newly-created Series A Junior Participating Preferred Stock, par value $100 per
share, at an exercise price of $148 per one one-thousandth of a share, subject
to adjustment. In the event that a person or group acquires 15% or more of the
Common Stock, each Right will entitle the holder (other than the acquirer) to
purchase shares of Common Stock (or, in certain circumstances cash or other
securities) having a market value of twice the exercise price of a Right at such
time. Under certain circumstances, each Right will entitle the holder (other
than acquirer) to purchase Common Stock of the acquirer having a market value of
twice the exercise price of a Right at such time. In addition, under certain
circumstances, our Board of Directors may exchange each Right (other than those
held by the acquirer) for one share of Common Stock, subject to those
adjustments. The Rights expire on November 18, 2008, unless earlier redeemed by
our Board of Directors for $.01 per Right or such expiration date is extended.

DESCRIPTION OF PIERS AND DEPOSITARY SHARES

         Each owner of a Depositary Share is entitled to its proportionate share
of all the rights and preferences of PIERS represented thereby. The following is
a brief description of the dividend, voting, conversion, redemption and
liquidation rights, preferences and privileges applicable to PIERS.



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<PAGE>   7



         DIVIDENDS. Dividends are cumulative and payable in arrears quarterly on
or about the fifteenth day of January, April, July and October of each year,
commencing on October 15, 1998, in an amount per PIERS equal to the greater of
(i) 7.25% of the liquidation preference per annum (equivalent to $1.8125 per
annum per Depositary Share) and (ii) the cash dividends paid or payable
(determined on each of the dividend payment dates for PIERS) on that number of
shares of Common Stock equal to the number of shares of Common Stock (or portion
thereof) into which a PIERS is convertible. Dividends will accumulate whether or
not we have sufficient earnings, whether or not there are funds legally
available for the payment of such dividends, and whether or not such dividends
are declared.

         LIQUIDATION PREFERENCE AND CONVERSION RIGHTS. PIERS have a liquidation
preference of $1,000.00 per PIERS (equivalent to $25.00 per Depositary Share),
plus a proportionate amount equal to accrued and unpaid dividends on PIERS
(whether or not earned or declared).

         PIERS are convertible at any time, in whole or in part at the option of
the holder, unless previously redeemed, into shares of Common Stock, at an
initial conversion price of $39.70 per share of Common Stock (equivalent to a
conversion rate of 0.6297 shares of Common Stock per Depositary Share) (the
"Conversion Price"), subject to adjustment in certain circumstances.

         REDEMPTION. Except in certain circumstances relating to the
preservation of our status as a REIT for federal income tax purposes, PIERS and
the Depositary Shares are not redeemable prior to July 15, 2003. Under certain
circumstances, on and after July 15, 2003, we may redeem at our discretion PIERS
and the Depositary Shares, in whole or in part, for such number of shares of
Common Stock as are issuable at the Conversion Price (the "Stock Redemption
Right") (equivalent initially to a conversion rate of 0.6297 shares of Common
Stock per Depositary Share). In addition, on or after July 15, 2003, we may
redeem at our discretion PIERS and the Depositary Shares, in whole or in part,
initially at $1,032.22 per PIERS (equivalent to $25.8055 per Depositary Share)
and thereafter at prices declining to $1,000.00 per PIERS (equivalent to a price
of $25.00 per Depositary Share) on and after July 15, 2007, plus in each case
accrued and unpaid dividends, if any, to the redemption date.

         PIERS and the Depositary Shares are subject to mandatory redemption on
July 15, 2008, at a price of $1,000.00 per PIERS (equivalent to a price of
$25.00 per Depositary Share), plus accrued and unpaid dividends, if any, to the
redemption date.

         RANKING AND VOTING RIGHTS. PIERS will rank senior to the Common Stock
as to priority for receiving dividends and amounts upon our liquidation,
dissolution or winding-up. Holders of PIERS do not generally have any voting
rights, except as provided by applicable law. If dividends on PIERS are in
arrears for six or more quarterly periods, holders of PIERS (voting separately
as a class with all other series of preferred stock upon which like voting
rights have been conferred and are exercisable) will be entitled to vote for the
election of two additional directors to serve on the Board of Directors until
all dividend arrearages are eliminated.


RESTRICTIONS ON TRANSFER OF CAPITAL STOCK

         For us to remain qualified as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"):
             a) not more than 50% in value of our outstanding capital
         stock may be owned, directly or indirectly, by five or fewer
         individuals (as defined in the Code to include certain entities) at any
         time during the last half of a taxable year;



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             (b) the capital stock must be beneficially owned (without
         regard to any rules of attribution of ownership) by 100 or more persons
         during at least 335 days of a taxable year of 12 months or during a
         proportionate part of a shorter taxable year; and

             (c) certain percentages of a REIT's gross income must be from
particular activities.

Accordingly, the Certificate contains provisions, subject to certain exceptions,
which limit the number of shares of capital stock that may be owned by any
stockholder (the "Ownership Limit").

         The Ownership Limit provides that, subject to certain exceptions
specified in the Certificate, no stockholder (other than Martin Bucksbaum (now
deceased), Matthew Bucksbaum, their families and related trusts (collectively,
the "Bucksbaums")) may own, or be deemed to own by virtue of the applicable
attribution provisions of the Code, more than the Ownership Limit. The Ownership
Limit was originally set at 6.5% of the outstanding capital stock, and was
increased to 7.5% of the value of the outstanding capital stock as a result of
legislation passed in 1993. Our Board of Directors is authorized to further
increase the Ownership Limit to not more than 9.8%. The Certificate permits the
Bucksbaums to exceed the Ownership Limit. Currently, the Bucksbaums exceed such
limit. The Ownership Limit provides that the Bucksbaums may acquire additional
shares pursuant to certain rights granted to them in connection with our initial
public offering, which rights are described more fully below, or from other
sources so long as the acquisition does not result in the five largest
beneficial owners of capital stock holding more than 50% of the outstanding
capital stock.

         Our Board of Directors may waive the Ownership Limit if presented with
satisfactory evidence that such ownership will not jeopardize our status as a
REIT. As a condition of such waiver, our Board of Directors may require opinions
of counsel satisfactory to it and/or an undertaking from the applicant with
respect to preserving our REIT status. The Ownership Limit will not apply if the
Board of Directors and the holders of capital stock determine that it is no
longer in our best interests to attempt to qualify, or to continue to qualify,
as a REIT. If shares of Common Stock in excess of the Ownership Limit, or shares
which would cause us to be beneficially owned by fewer than 100 persons, are
issued or transferred to any person, such issuance or transfer shall be null and
void and the intended transferee will acquire no rights to such shares.

         The Certificate further provides that upon a transfer or other event
that results in a person owning (either directly or by virtue of the applicable
attribution rules) capital stock in excess of the applicable Ownership Limit
("Excess Shares"), such person (a "Prohibited Owner") will not acquire or retain
any rights or beneficial economic interest in such Excess Shares. Rather, the
Excess Shares will be automatically transferred to a person or entity
unaffiliated with and designated by us to serve as trustee of a trust for the
exclusive benefit of a charitable beneficiary to be designated by us within five
(5) days after the discovery of the transaction which created the Excess Shares.
The trustee shall have the exclusive right to designate a person who may acquire
the Excess Shares without violating the applicable ownership restrictions (a
"Permitted Transferee") to acquire all of the shares held by the trust. The
Permitted Transferee must pay the trustee an amount equal to the fair market
value (determined at the time of transfer to the Permitted Transferee) for the
Excess Shares. The trustee shall pay to the Prohibited Owner the lesser of (a)
the value of the shares at the time they became Excess Shares and (b) the price
received by the trustee from the sale of the Excess Shares to the Permitted
Transferee. The beneficiary will receive the excess of (a) the sale proceeds
from the transfer to the Permitted Transferee over (b) the amount paid to the
Prohibited Owner, if any, in addition to any dividends paid with respect to the
Excess Shares.

         The Ownership Limit will not be automatically removed even if the REIT
provisions of the Code are changed so as to no longer contain any ownership
concentration limitation or if the ownership concentration limitation is
increased. Except as otherwise described above, any change in the Ownership
Limit would require an amendment to the Certificate. Amendments to the
Certificate require the affirmative vote of holders owning a


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<PAGE>   9



majority of the outstanding capital stock. In addition to preserving our status
as a REIT, the Ownership Limit may preclude an acquisition of control over us
without the approval of our Board of Directors.

         All certificates representing capital stock will bear a legend
referring to the restrictions described above.

         All persons who own, directly or by virtue of the attribution
provisions of the Code, more than 7.5% of the outstanding capital stock must
file an affidavit with us containing the information specified in the
Certificate within 30 days after January 1 of each year. In addition, each
stockholder shall upon demand be required to disclose to us in writing such
information with respect to the direct, indirect and constructive ownership of
shares as our Board of Directors deems necessary to comply with the provisions
of the Code applicable to a REIT or to comply with the requirements of any
taxing authority or governmental agency. United States Treasury Regulations (the
"Regulations") currently require us to send annual written statements requesting
information as to the actual ownership of the capital stock from each record
holder of more than 1% of our outstanding capital stock. Depending upon the
number of record holders of the capital stock, the reporting threshold required
by the Regulations can fall as low as 0.5%. Record holders that fail to submit a
written statement in response to the request must attach to their federal income
tax returns specified information regarding the actual ownership of shares of
capital stock of which they are the record holder.


LIMITATION OF LIABILITY OF DIRECTORS

         The Certificate provides that a director will not be personally liable
for monetary damages to us or our stockholders for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to us or our stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii) for
paying a dividend or approving a stock repurchase in violation of Section 174 of
the Delaware General Corporation Law ("DGCL") or (iv) for any transaction from
which the director derived an improper personal benefit.

         While the Certificate provides directors with protection from awards
for monetary damages for breaches of their duty of care, it does not eliminate
such duty. Accordingly, the Certificate will have no effect on the availability
of equitable remedies such as an injunction or rescission based on a director's
breach of his or her duty of care. The provisions of the Certificate described
above apply only to officers who are also directors and are acting in their
capacity as directors. It does not apply to officers who are not directors.


INDEMNIFICATION AGREEMENTS

         We have entered into indemnification agreements with each of our
officers and directors. The indemnification agreements require, among other
things, that we indemnify our officers and directors to the fullest extent
permitted by law, and advance to them all related expenses, subject to
reimbursement if it is subsequently determined that indemnification is not
permitted. We must also indemnify and advance all expenses incurred by officers
and directors seeking to enforce their rights under the indemnification
agreements, and cover them under our directors' and officers' liability
insurance. Although the form of the indemnification agreement offers
substantially the same scope of coverage afforded by provisions in our
Certificate and bylaws, it provides greater assurance to the directors and
officers that indemnification will be available, because, as a contract, it
cannot be modified unilaterally in the future by the Board of Directors or by
stockholders to eliminate the rights it provides.




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<PAGE>   10



DELAWARE ANTI-TAKEOVER STATUTE

         We are a Delaware corporation subject to Section 203 of the DGCL. In
general, Section 203 prevents an "interested stockholder" (defined generally as
a person owning 15% or more of our outstanding voting stock) from engaging in a
"business combination" (as defined in Section 203) with us for three years
following the date that person becomes an interested stockholder unless:

             (a) before that person became an interested stockholder, our
         Board of Directors approved the transaction in which the interested
         stockholder became an interested stockholder or approved the business
         combination;

             (b) upon completion of the transaction that resulted in the
         interested stockholder's becoming an interested stockholder, the
         interested stockholder owned at least 85% of our voting stock
         outstanding at the time the transaction commenced (excluding stock held
         by directors who are also our officers and by employee stock plans that
         do not provide employees with the right to determine confidentially
         whether shares held subject to the plan will be tendered in a tender or
         exchange offer); or

             (c) following the transaction in which that person became an
         interested stockholder, the business combination is approved by our
         Board of Directors and authorized at a meeting of stockholders by the
         affirmative vote of the holders of at least two-thirds of our
         outstanding voting stock not owned by the interested stockholder.

         Under Section 203, these restrictions do not apply to certain business
combinations proposed by an interested stockholder following the announcement or
notification of one of certain extraordinary transactions involving us and a
person who was not an interested stockholder during the previous three years or
who became an interested stockholder with the approval of a majority of our
directors, if that extraordinary transaction is approved or not opposed by a
majority of the directors who were directors before any person became an
interested stockholder in the previous three years or who were recommended for
election or elected to succeed such directors by a majority of such directors
then in office.


                        SUMMARY OF PARTNERSHIP AGREEMENT

         The following summary of the partnership agreement of GGP Limited
Partnership is qualified by reference to the Second Amended and Restated
Agreement of Limited Partnership of GGP Limited Partnership, as amended (the
"Partnership Agreement"). The Partnership Agreement has been previously filed
with the Commission and is incorporated herein by reference.

MANAGEMENT AND OPERATIONS

         GGP Limited Partnership is a Delaware limited partnership. The
Partnership Agreement requires GGP Limited Partnership to be operated in a
manner that will enable us to continue to qualify as a REIT and to avoid any
federal income tax liability. The Partnership Agreement provides that the net
operating cash revenues of GGP Limited Partnership, as well as net sales and
refinancing proceeds, will be distributed from time to time as determined by us,
in our capacity as the sole general partner of GGP Limited Partnership (but not
less frequently than quarterly), proportionally in accordance with the partners'
percentage interests.

         Generally, pursuant to the Partnership Agreement, we, as the sole
general partner of GGP Limited Partnership, have exclusive and complete
responsibility and discretion in the management and control of GGP Limited
Partnership. The limited partners have no authority to transact business for GGP
Limited Partnership;


                                       10

<PAGE>   11



neither can they participate in the management activities or decisions we make
on its behalf as general partner. However, the following decisions require the
consent of a majority in interest of the limited partners:

         -   to amend the Partnership Agreement (other than in connection with
             the admission of additional limited partners),

         -   to terminate the Partnership Agreement,

         -   to make a general assignment for the benefit of creditors,

         -   to take a title to any property other than in the name of GGP
             Limited Partnership or a subsidiary partnership,

         -   to institute any proceeding for bankruptcy, or

         -   to dissolve GGP Limited Partnership.

In addition, without the written consent of a limited partner, the Partnership
Agreement may not be amended to materially adversely affect such limited
partner's rights to distributions or allocations except in connection with the
admission of additional limited partners or unless such amendment affects the
existing limited partners who are Bucksbaums in the same manner on a
unit-for-unit basis.

         The Partnership Agreement does not contemplate holding partnership
meetings, but limited partners are given notice of and are welcome to attend
annual and special meetings of our stockholders.


TRANSFERABILITY OF INTERESTS

         The Partnership Agreement provides that we may not voluntarily withdraw
from GGP Limited Partnership, or transfer or assign our interest in GGP Limited
Partnership, without the consent of a majority in interest of the limited
partners. As a limited partner and subject to certain conditions, you may
transfer your interest in GGP Limited Partnership to a transferee, provided that
such transferee assumes your obligations and, provided further, that such
transfer does not cause a termination of GGP Limited Partnership for federal
income tax purposes, does not disqualify us as a REIT, and satisfies certain
other general requirements specified in the Partnership Agreement.


BUCKSBAUM RIGHTS

         Pursuant to the terms of the Rights Agreement, dated as of July 27,
1993 (the "Rights Agreement"), the Bucksbaums hold certain rights (the
"Bucksbaum Rights") granted to them in connection with our initial public
offering. The Bucksbaum Rights enable them to convert a portion of their
interest in GGP Limited Partnership into shares of Common Stock (the "Exchange
Component") and to sell their remaining partnership interest to us (the "Sale
Component"). The Exchange Component enables the Bucksbaums to exchange a portion
of their interest in GGP Limited Partnership for shares of Common Stock until
they own up to 25% of the outstanding Common Stock. The Sale Component enables
the Bucksbaums to sell all or a portion of their remaining interest in GGP
Limited Partnership to us for cash or Common Stock, or a combination thereof, at
our election. The Sale Component can only be exercised if the Bucksbaums already
own 25% or more of the outstanding Common Stock.



                                       11

<PAGE>   12



         The Bucksbaum Rights may be exercised by the Bucksbaums from time to
time (although only once during any calendar year), in whole or in part, subject
to the limitations that in any calendar year the Sale Component may be exercised
only with respect to one-fourth of the percentage interest in GGP Limited
Partnership held by the Bucksbaums immediately after the Exchange Component is
fully exercised.

         The Bucksbaum Rights expire on April 16, 2023 if not exercised prior to
that date.


CAPITAL CONTRIBUTIONS

         The Partnership Agreement provides that if GGP Limited Partnership
requires additional funds at any time or from time to time in excess of funds
available to GGP Limited Partnership from borrowings or capital contributions,
we may borrow such funds from a financial institution or other lender and lend
such funds to GGP Limited Partnership on the same terms and conditions as are
applicable to our borrowing of such funds. As an alternative to borrowing funds
required by GGP Limited Partnership, we may raise such funds through the sale of
shares of Common Stock and contribute the amount of such required funds as an
additional capital contribution to GGP Limited Partnership. In such event, we
generally will receive additional common units equal to the number of shares of
Common Stock that we sell, and the partnership interests of the limited partners
will be decreased on a proportionate basis.


TAX MATTERS

         Pursuant to the Partnership Agreement, we are the tax matters partner
of GGP Limited Partnership. Accordingly, we have the authority to make tax
elections under the Code on behalf of GGP Limited Partnership.

         The net income or net loss of GGP Limited Partnership will generally be
allocated to us and the limited partners in accordance with percentage
interests, subject to compliance with the provisions of Sections 704(b) and
704(c) of the Code and the regulations promulgated thereunder and the terms of
the preferred units of limited partnership interest in GGP Limited Partnership.


DUTIES AND CONFLICTS

         The Partnership Agreement provides that all of our business activities,
including all activities pertaining to the acquisition and operation of shopping
center properties, must be conducted through GGP Limited Partnership (excluding
direct interests of up to 1% in subsidiaries of GGP Limited Partnership which we
own). The Partnership Agreement prohibits us from borrowing for the purpose of
making a distribution to stockholders unless we arrange such borrowing through
GGP Limited Partnership.

         Pursuant to the Partnership Agreement, the Bucksbaums cannot acquire
interests in shopping center properties or vacant land suitable for development
as a shopping center for a specified period of time. The Partnership Agreement
permits the Bucksbaums to own less than 5% of any publicly-traded entity (or any
subsidiary thereof) which invests in retail malls, provided that neither Matthew
Bucksbaum nor John Bucksbaum is actively involved in the management of such
entity by virtue of any such investment.


TERM

         GGP Limited Partnership will continue in full force and effect until
December 31, 2050, or until sooner dissolved upon our withdrawal, bankruptcy,
dissolution or termination (unless a majority in interest of the limited


                                       12

<PAGE>   13



partners elect to continue GGP Limited Partnership), the election by us and a
majority in interest of the limited partners, or the sale or other disposition
of all or substantially all the assets of GGP Limited Partnership.


PREFERRED UNITS

         In connection with the issuance of the Depositary Shares and in order
to enable us to comply with our obligations in respect of PIERS, the Partnership
Agreement was amended to issue to us preferred units which have rights,
preferences and other privileges, including distribution, liquidation,
conversion and redemption rights, that mirror those of PIERS. Accordingly, GGP
Limited Partnership will be required to make all required distributions on the
preferred units prior to any distribution of cash or assets to the holders of
other partnership interests in GGP Limited Partnership, including the holders of
common units.


                           REDEMPTION OF COMMON UNITS

GENERAL

         You may require GGP Limited Partnership to redeem your common units by
delivering a notice to GGP Limited Partnership. Your rights are described in
that certain Redemption Rights Agreement (the "Agreement") which was executed
and delivered in connection with the Acquisition. The summary of the terms of
the Agreement set forth below does not purport to be complete and is subject to
and qualified by reference to the Agreement. Subject to your rights described in
the next paragraph, upon redemption, you will receive, with respect to each unit
tendered, cash in an amount equal to the market value of one share of Common
Stock (subject to certain anti-dilution adjustments). The market value of the
Common Stock for this purpose will be equal to the average of the closing
trading prices of our Common Stock on the NYSE (or substitute information, if no
such closing price is available) for the five consecutive trading days ending on
the date on which a redemption notice is received by GGP Limited Partnership
(or, if such date is not a business day, the first business day thereafter).

         In lieu of GGP Limited Partnership redeeming common units tendered for
redemption, in our sole and absolute discretion, we have the right to elect to
assume the obligation of GGP Limited Partnership and satisfy your redemption
right by paying to you, with respect to each unit tendered, either (a) the cash
amount described in the preceding paragraph or (b) one share of Common Stock
(subject to certain anti-dilution adjustments). We anticipate that we generally
will elect to directly assume and satisfy any exercise of a redemption right
through the issuance of the Common Stock pursuant to this Prospectus, whereupon
we will acquire, and become the owner of, your common units. However, there can
be no assurance that we will make such election in any particular case. With
each exchange of common units for shares of Common Stock or cash, our ownership
interest in GGP Limited Partnership will increase. Such an acquisition will be
treated as a sale of the common units by you to us for federal income tax
purposes. Upon redemption, your right to receive distributions with respect to
the common units redeemed will cease (but if such right is exchanged for Common
Stock, you will have rights as a stockholder from the time of your acquisition
of the Common Stock), and if all of your common units are redeemed, you will
have withdrawn as a partner of GGP Limited Partnership and will no longer be a
party to the Partnership Agreement.

         You must notify GGP Limited Partnership of your desire to require GGP
Limited Partnership to redeem common units by sending a notice in accordance
with the terms of the Agreement. You must request the redemption of at least
1,000 common units (or all of the common units you hold, if you own fewer than
1,000 common units). The redemption will occur within 30 days following GGP
Limited Partnership's receipt of the notice and related documentation required
by the Agreement, except that no redemption can occur if the delivery


                                       13

<PAGE>   14



of Common Stock would be prohibited under the provisions of the Certificate
designed to protect our qualification as a REIT.


TAX CONSEQUENCES OF REDEMPTION

         "Certain Federal Income Tax Considerations" summarizes certain federal
income tax considerations that may be relevant to you if you want to tender your
common units in accordance with the terms of the Agreement. BECAUSE THE SPECIFIC
TAX CONSEQUENCES TO YOU WILL DEPEND UPON YOUR SPECIFIC CIRCUMSTANCES, YOU ARE
STRONGLY URGED TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE SPECIFIC FEDERAL,
STATE AND LOCAL TAX CONSEQUENCES UPON EXERCISE OF YOUR REDEMPTION RIGHTS.


POTENTIAL CHANGE IN INVESTMENT UPON REDEMPTION OF COMMON UNITS

         If you tender common units pursuant to the Agreement, you may receive
cash or Common Stock in exchange for such common units. To the extent that you
receive cash, you will no longer have any interest in GGP Limited Partnership or
us, will not benefit from any subsequent increases in the share price of the
Common Stock, and will not receive any future distributions from GGP Limited
Partnership or us (unless you currently own or acquire in the future additional
common units or shares of Common Stock). To the extent that you receive Common
Stock, you will become a stockholder rather than a holder of common units. See
"Comparison of Ownership of Common Units and Shares of Common Stock."


REGISTRATION OF SHARES

         We have registered the Common Stock under the Securities Act to satisfy
our registration obligations under the Agreement. Under the Agreement, we are
required to prepare and file with the Commission such amendments and supplements
to the Registration Statement (of which this Prospectus is a part) and to this
Prospectus, as may be necessary to keep the Registration Statement effective,
generally during the term in which the redemption rights exist for the Common
Stock, and to comply with the provisions of the Securities Act. See "Plan of
Distribution."

         Pursuant to the Agreement, we have agreed to pay all expenses of
effecting the above-described registration of the Common Stock under the
Securities Act prior to October 23, 2004. As a party to the Agreement, you have
agreed severally, in proportion to the number of common units you hold in
relation to the total number of shares of Common Stock covered by the
Registration Statement, to reimburse us for registration expenses which are
incurred thereafter.


       COMPARISON OF OWNERSHIP OF COMMON UNITS AND SHARES OF COMMON STOCK

         Although the nature of an investment in shares of Common Stock is
substantially equivalent economically to an investment in common units in GGP
Limited Partnership, there are certain differences between ownership of common
units and ownership of shares of Common Stock, some of which may be material to
investors.

         The information below highlights a number of the significant
differences between us and GGP Limited Partnership and compares certain legal
rights associated with the ownership of common units and Common Stock. These
comparisons are intended to assist you in understanding how your investment will
be changed if your common units are redeemed for Common Stock. THIS DISCUSSION
IS SUMMARY IN NATURE AND DOES NOT


                                       14

<PAGE>   15



CONSTITUTE A COMPLETE DISCUSSION OF THESE MATTERS. YOU SHOULD CAREFULLY REVIEW
THIS ENTIRE PROSPECTUS AND THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS
IS A PART FOR ADDITIONAL IMPORTANT INFORMATION ABOUT US.


FORM OF ORGANIZATION AND ASSETS OWNED

         GGP Limited Partnership is organized as a Delaware limited partnership.
We are a Delaware corporation. We have elected to be taxed as a REIT under the
Code and intend to maintain such qualification.


LENGTH OF INVESTMENT

         GGP Limited Partnership has a stated termination date of December 31,
2050, although it may be terminated earlier under certain circumstances. We have
a perpetual term and intend to continue our operations for an indefinite time
period.


ADDITIONAL EQUITY

         GGP Limited Partnership is authorized to issue additional common units
from time to time, as we determine as its general partner, in exchange for
contributions of cash or property. GGP Limited Partnership may issue additional
common units to us, generally as long as we issue a comparable amount of our
capital stock and that we contribute to GGP Limited Partnership proceeds raised
in connection with the issuance of such capital stock.

         Our Board of Directors may authorize the issuance, in its discretion,
of additional equity securities consisting of Common Stock or preferred stock,
provided that the total number of shares issued does not exceed the number of
authorized shares of capital stock set forth in the Certificate. As long as GGP
Limited Partnership is in existence, we generally will contribute the proceeds
that we raise from equity capital to GGP Limited Partnership in exchange for
common or preferred units in GGP Limited Partnership.


MANAGEMENT AND CONTROL

         Generally, pursuant to the Partnership Agreement, we, as the sole
general partner of GGP Limited Partnership, have exclusive and complete
responsibility and discretion in the management and control of GGP Limited
Partnership. The limited partners have no authority to transact business for GGP
Limited Partnership; neither can they participate in the management activities
or decisions we make on its behalf as general partner. However, certain
decisions, including those to amend the Partnership Agreement (other than in
connection with the admission of additional Limited Partners), to terminate the
Partnership Agreement, to make a general assignment for the benefit of
creditors, to take title to any property other than in the name of GGP Limited
Partnership or a subsidiary thereof, to institute any proceeding for bankruptcy
or to dissolve GGP Limited Partnership would require the consent of a majority
in interest of the limited partners. In addition, without the written consent of
a limited partner, the Partnership Agreement may not be amended to materially
adversely affect such limited partner's rights to distributions or allocations
except in connection with the admission of additional limited partners or unless
such amendment affects the existing limited partners who are Bucksbaums in the
same manner on a unit-for-unit basis.

         Our Board of Directors has exclusive control over our business and
affairs, subject only to the restrictions in the Certificate, our bylaws and the
Partnership Agreement. At each annual meeting of the


                                       15

<PAGE>   16



stockholders, the stockholders elect successor directors to our Board, replacing
(or extending the tenure of) those directors belonging to the class whose term
expires at such meeting. The policies our Board of Directors adopts may be
altered or eliminated without a vote of the stockholders. Accordingly, except
for their vote in the elections of directors, stockholders have no control over
our ordinary business policies. However, our Board of Directors cannot change
our policy of maintaining our status as a REIT without the approval of holders
of a majority of the outstanding shares of capital stock entitled to vote on
such matter.


FIDUCIARY DUTIES

         Under Delaware law, we are accountable to GGP Limited Partnership as a
fiduciary and, consequently, we are required to exercise good faith in all of
our dealings with respect to partnership affairs. The Partnership Agreement
provides, however, that we are not liable for monetary damages for losses
sustained or liabilities incurred as a result of our acts or omissions, provided
that we acted in good faith and in the belief that any such act or omission was
in the best interests of GGP Limited Partnership and, provided further, that we
were not guilty of fraud, misconduct or gross negligence.

         Under Delaware law, our directors must perform their duties in good
faith, in a manner that they reasonably believe to be in our best interests and
with the care of an ordinarily prudent person in a like position. Directors who
act in such a manner generally will not be liable to us or our stockholders for
monetary damages arising from their activities.


MANAGEMENT LIABILITY AND INDEMNIFICATION

         As a matter of Delaware law, we have liability for the payment of the
obligations and debts of GGP Limited Partnership unless limitations upon such
liability are stated in the document or instrument evidencing the obligation.
Under the Partnership Agreement, GGP Limited Partnership has agreed to indemnify
us and our "affiliates," as defined in the Partnership Agreement, and any
individual acting on our or their behalf, from and against all losses, damages,
claims or liabilities, including, but not limited to, reasonable attorneys' fees
and expenses, incurred in connection with any actions relating to the operations
of GGP Limited Partnership in which we, our affiliates, or any individual acting
on our or their behalf is involved, to the fullest extent permitted by Delaware
law (including any procedures set forth therein regarding advancement of
expenses to such indemnified party).

         The Certificate provides that a director will not be personally liable
for monetary damages to us or our stockholders for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to us or our stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii) for
paying a dividend or approving a stock repurchase in violation of Section 174 of
the DGCL or (iv) for any transaction from which the director derived an improper
personal benefit.

         We have entered into indemnification agreements with each of our
officers and directors. The indemnification agreements require, among other
things, that we indemnify our officers and directors to the fullest extent
permitted by law, and advance to the officers and directors all related
expenses, subject to reimbursement if it is subsequently determined that
indemnification is not permitted. We must also indemnify and advance all
expenses incurred by officers and directors seeking to enforce their rights
under the indemnification agreements, and cover officers and directors under our
directors' and officers' liability insurance. Although the form of the
indemnification agreement offers substantially the same scope of coverage
afforded by provisions in our Certificate and bylaws, it provides greater
assurance to directors and officers that


                                       16

<PAGE>   17



indemnification will be available because, as a contract, it cannot be modified
unilaterally in the future by our Board of Directors or by stockholders to
eliminate the rights it provides.


ANTITAKEOVER PROVISIONS

         Except in limited circumstances, we have exclusive management power
over the business and affairs of GGP Limited Partnership. We may not voluntarily
withdraw from GGP Limited Partnership, or transfer or assign our interest in GGP
Limited Partnership, without the consent of a majority in interest of the
limited partners. Additionally, other than as expressly provided in the
Partnership Agreement, no limited partner may withdraw from GGP Limited
Partnership without our prior written consent.

         Our Certificate and bylaws contain a number of provisions that could
delay or discourage an unsolicited proposal to acquire us or to remove incumbent
management. These provisions include, among others:

                  (a) a staggered Board of Directors;

                  (b) authorized capital stock that may be issued as preferred
         stock in the discretion of our Board of Directors, with superior voting
         rights to the Common Stock;

                  (c) a requirement that directors may be removed only for cause
         and only by a vote of holders of at least 75% of the outstanding Common
         Stock; and

                  (d) provisions designed to avoid concentration of share
         ownership in a manner that would jeopardize our status as a REIT under
         the Code.

In addition, we are subject to Section 203 of the DGCL which provides that,
subject to certain exceptions, no Delaware corporation may engage in any
"business combination" with an "interested stockholder" for a period of three
years following the date that such stockholder became an interested stockholder
unless, prior to such date, the board of directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder. See "Capital Stock --
Stockholder Rights Plan."


VOTING RIGHTS

         Under the Partnership Agreement, the limited partners have voting
rights only with respect to certain limited matters, including dissolution of
GGP Limited Partnership, amendments to the Partnership Agreement (other than to
reflect the admission of additional Limited Partners), making a general
assignment for the benefit of creditors, taking title to any personal or real
property other than in the name of GGP Limited Partnership or a subsidiary
thereof, and instituting any proceeding for bankruptcy on behalf of GGP Limited
Partnership. All matters submitted to a vote of limited partners require the
affirmative vote of a majority in interest of the limited partners. Otherwise,
we, as general partner, make all decisions relating to the operation and
management of GGP Limited Partnership.

         We are managed and controlled by a Board of Directors consisting of
three classes having staggered terms of office. One class of directors is
elected by the stockholders at each annual meeting. Delaware law requires that
certain major corporate transactions, including most amendments to a
corporation's certificate of incorporation, may not be consummated without the
approval of stockholders. Each share of Common Stock has one vote, and our
Certificate permits our Board of Directors to classify and issue preferred stock
in one or more series having voting power which may differ from that of the
Common Stock. PIERS have voting rights under certain circumstances. See "Capital
Stock -- Description of PIERS and Depositary Shares" above.


                                       17

<PAGE>   18





AMENDMENT OF THE PARTNERSHIP AGREEMENT OR THE CERTIFICATE OF INCORPORATION

         We may not, without the written consent of a majority in interest of
the limited partners, amend or modify the Partnership Agreement other than to
reflect the admission of additional limited partners.

         Amendments to our Certificate must be approved by a majority of the
Board of Directors and by the vote of at least majority of the votes entitled to
be cast at a meeting of our stockholders.


VOTE REQUIRED TO DISSOLVE GGP LIMITED PARTNERSHIP OR THE COMPANY

         Under the Partnership Agreement, we may elect to dissolve the
Partnership upon making a written election to that effect with the written
consent of a majority in interest of the limited partners.

         Under Delaware law, the Board of Directors must obtain approval of
holders of at least a majority of the outstanding capital stock in order to
dissolve us.


COMPENSATION, FEES AND DISTRIBUTIONS

         We do not receive any compensation for our services as general partner
of GGP Limited Partnership. As a partner of GGP Limited Partnership, however, we
have the right to receive allocations and distributions from GGP Limited
Partnership in respect of the preferred units and otherwise proportionally in
accordance with our percentage interest in GGP Limited Partnership. In addition,
we will be reimbursed by GGP Limited Partnership for all expenses incurred
relating to the ongoing operation of GGP Limited Partnership.

         Our directors and officers receive compensation for their services.


LIABILITY OF INVESTORS

         Under the Partnership Agreement and applicable state law, the liability
of the limited partners for GGP Limited Partnership's debts and obligations is
generally limited to the amount of their investment in GGP Limited Partnership.

         Under Delaware law, stockholders are not personally liable for our
debts or obligations.


POTENTIAL DILUTION OF RIGHTS

         We are authorized to cause GGP Limited Partnership to issue additional
common units from time to time in exchange for contributions of cash or property
to GGP Limited Partnership. The issuance of additional common units may result
in the dilution of the interests of the limited partners.

         Our Board of Directors may issue, in its discretion, additional shares
of Common Stock and has the authority to issue from the authorized capital stock
a variety of other equity securities with such powers, preferences and rights as
the Board of Directors may designate at the time of issuance. The issuance of
additional shares of either Common Stock or other similar equity securities may
dilute the interests of the stockholders. See "Summary of Partnership Agreement
- -- Preferred Units."



                                       18

<PAGE>   19




                    CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

TAX TREATMENT OF REDEMPTION OF COMMON UNITS

         REDEMPTION OF YOUR COMMON UNITS PURSUANT TO THE AGREEMENT WILL BE
TREATED AS A TAXABLE TRANSACTION FOR FEDERAL INCOME TAX PURPOSES. It is possible
that the amount of gain recognized (or even the tax liability resulting from
such gain) could exceed the amount of cash or the value of other property (i.e.,
Common Stock) received upon such exercise. In addition, your ability to sell a
substantial number of shares of Common Stock in order to raise cash to pay tax
liabilities associated with redemption of common units may be adversely affected
by fluctuations in the market price for the Common Stock. The price you receive
for such shares may not equal the value of your common units at the time of
redemption.

         If we assume and perform the redemption obligation, the Agreement
provides that the redemption will be treated as a sale of common units by you to
us at the time of such redemption. In that event, such sale will be fully
taxable to you. You will be treated as realizing for tax purposes an amount
equal to the sum of the cash or the value of the Common Stock received in the
exchange plus the amount of GGP Limited Partnership nonrecourse liabilities
allocable to the redeemed common units at the time of the redemption. The
determination of the amount of gain or loss is discussed more fully below.

         Although the matter is not free from doubt, if we do not elect to
assume the obligation to redeem your common units, GGP Limited Partnership will
be treated as redeeming your common units for cash. If GGP Limited Partnership
redeems common units for cash that we contributed to it to effect such
redemption, the redemption likely would be treated for tax purposes as a sale of
such common units to us in a fully taxable transaction. In that event, you would
be treated as realizing an amount equal to the sum of the cash received in the
exchange plus the amount of GGP Limited Partnership nonrecourse liabilities
allocable to the redeemed common units at the time of the redemption. The
determination of the amount of gain or loss in the event of sale treatment is
discussed more fully below.

         If, instead, GGP Limited Partnership chooses to redeem your common
units for cash that we have not contributed to effect the redemption, the tax
consequences would be the same as described in the previous paragraph, except
that if GGP Limited Partnership redeems less than all of your common units, you
would not be permitted to recognize any loss occurring on the transaction and
would recognize taxable gain only to the extent that the cash, plus the share of
GGP Limited Partnership nonrecourse liabilities allocable to the redeemed common
units, exceeded your adjusted basis in all of your common units immediately
before the redemption.


TAX TREATMENT OF DISPOSITION OF COMMON UNITS BY LIMITED PARTNERS GENERALLY

         If a common unit is redeemed in a manner that is treated as a sale of
the common unit, the determination of gain or loss from the sale will be based
on the difference between the amount considered realized for tax purposes and
the tax basis in such common unit. Upon the sale of a common unit, the "amount
realized" will be measured by the sum of the cash and fair market value of other
property (i.e. Common Stock) received plus the portion of GGP Limited
Partnership's nonrecourse liabilities allocable to the common unit sold. To the
extent that the amount of cash or property received plus the allocable share of
GGP Limited Partnership's nonrecourse liabilities exceeds your basis for the
common unit sold, you will recognize gain. It is possible that the amount of
gain recognized or even the tax liability resulting from such gain could exceed
the amount of cash and the value of any other property (i.e. Common Stock)
received upon such sale.

         Except as described below, any gain recognized upon a sale or other
disposition of common units will be treated as gain attributable to the sale or
disposition of a capital asset. To the extent, however, that the amount realized
upon the sale of a common unit attributable to your share of "unrealized
receivables" of GGP


                                       19

<PAGE>   20



Limited Partnership (as defined in Section 751 of the Code) exceeds the basis
attributable to those assets, such excess will be treated as ordinary income.
Unrealized receivables include, to the extent not previously included in GGP
Limited Partnership income, any rights to payment for services rendered or to be
rendered. Unrealized receivables also include amounts that would be subject to
recapture as ordinary income if GGP Limited Partnership had sold its assets at
their fair market value at the time of the transfer of a common unit.


BASIS OF COMMON UNITS

         In general, if you were deemed at the time of the Acquisition to have
received common units upon liquidation of a partnership, you have an initial tax
basis in your common units ("Initial Basis") equal to your basis in your
partnership interest at the time of such liquidation. Similarly, if, at the time
of the Acquisition, you contributed a partnership interest in exchange for
common units, you have an Initial Basis in the common units equal to your basis
in the contributed partnership interest. Your Initial Basis in your common units
generally is increased by:

         (i)   your share of GGP Limited Partnership taxable income, and

         (ii)  increases in your share of liabilities of GGP Limited Partnership
         (including any increase in your share of liabilities occurring in
         connection with the Acquisition).

Generally, your basis in your common units is decreased (but not below zero) by:

         (i)   your share of GGP Limited Partnership distributions,

         (ii)  decreases in your share of liabilities of GGP Limited Partnership
         (including any decrease in your share of liabilities occurring in
         connection with the Acquisition),

         (iii) your share of losses of GGP Limited Partnership, and

         (iv)  your share of nondeductible expenditures of GGP Limited
         Partnership that are not chargeable to capital.


   POTENTIAL APPLICATION OF THE DISGUISED SALE REGULATIONS TO A REDEMPTION OF
                                  COMMON UNITS

         There is a possibility that a redemption of common units issued in the
Acquisition might cause the original transfer of property to GGP Limited
Partnership in exchange for common units to be treated as a "disguised sale" of
property. The Code and the Regulations thereunder (the "Disguised Sale
Regulations") generally provide that, unless one of the prescribed exceptions is
applicable, a partner's contribution of property to a partnership and a
simultaneous or subsequent transfer of money or other consideration (including
the assumption of or taking subject to a liability) from the partnership to the
partner will be presumed to be a sale, in whole or in part, of such property by
the partner to the partnership. The Disguised Sale Regulations also provide,
however, that if two years have passed between the transfer of money or other
consideration and the contribution of property, the transactions will not be
presumed to be a sale unless the facts and circumstances clearly establish that
the transfers constitute a sale. There can be no assurance that the Internal
Revenue Service ("IRS") might not seek to contend that the Disguised Sale
Regulations apply here. The IRS could contend that the Acquisition itself was
taxable as a disguised sale under the Disguised Sale Regulations. Any gain
recognized thereby may be eligible for installment sale reporting under Section
453 of the Code, subject to certain limitations.



                                       20

<PAGE>   21




FEDERAL INCOME TAX CONSIDERATIONS TO HOLDERS OF CAPITAL STOCK

         This section is a summary of certain federal income tax matters of
general application pertaining to REITs and their stockholders under the Code.
The discussion is based on current law and does not purport to deal with all
aspects of federal income taxation that may be relevant to investors to whom
special treatment under federal income tax laws applies, such as investors to
whom the Employee Retirement Income Security Act of 1974, as amended, applies,
other tax exempt investors, dealers in securities or foreign persons. The
provisions of the Code pertaining to REITs are highly technical and complex and
sometimes involve mixed questions of fact and law. In addition, this section
does not discuss foreign, state or local taxation. If you are considering
exercising your redemption rights, you should consult, and must depend on, your
own tax advisors regarding the federal, state, local, foreign and other tax
consequences of holding and disposing of Common Stock.

         In the opinion of Neal, Gerber & Eisenberg, our tax counsel, beginning
with our taxable year ended December 31, 1993, we have been organized and
operated in a manner that has enabled us to qualify as a REIT under Sections 856
through 859 of the Code, and our proposed method of operation will enable us to
continue to so qualify. However, we might not so qualify or continue to so
qualify. Our ability to qualify as a REIT under the requirements of the Code and
the regulations promulgated under the Code depends upon our actual operating
results.

         To qualify as a REIT under the Code for a taxable year, we must meet
organizational and operational requirements, which generally require us to be a
passive investor in operating real estate and to avoid excessive concentration
of ownership of our stock. First, our principal activities must be real estate
related. Generally, at least 75% of the value of our total assets at the end of
each calendar quarter must consist of real estate assets, cash or governmental
securities. We may not own more than 10% of the outstanding voting securities of
any corporation; shares of qualified REITs and of wholly owned subsidiaries are
exempt from this prohibition. For each taxable year, at least 75% of a REIT's
gross income must be derived from specified real estate sources and 95% must be
derived from such real estate sources plus certain other permitted sources. Real
estate income for purposes of these requirements includes gains from the sale of
real property not held primarily for sale to customers in the ordinary course of
business, dividends on REIT shares, interest on loans secured by mortgages on
real property, qualified rents from real property and income from foreclosure
property. For rents to qualify, they may not be based on the income or profits
of any person, except that they may be based on a percentage or percentages of
gross income or receipts, and, subject to certain limited exceptions, the REIT
may not manage the property or furnish services to residents except through an
independent contractor which is paid an arm's-length fee and from which the REIT
derives no income.

         For us to remain qualified as a REIT, no more than 50% in value of our
outstanding capital stock, including in some circumstances stock into which
outstanding securities might be converted, may be owned actually or
constructively by five or fewer individuals at any time during the last half of
our taxable year. The Code defines "individuals" for purposes of the provision
described in the preceding sentence to include specified entities. Accordingly,
our Certificate contains provisions restricting the acquisition of shares of our
capital stock. See "Capital Stock -- Restrictions on Transfer of Capital Stock."

         So long as we qualify for taxation as a REIT and distribute at least
95% of the sum of (a) our REIT taxable income (as computed without regard to net
capital gains or the dividends-paid deduction) and (b) our after-tax net income
from foreclosure property for our taxable year to our stockholders annually,
will not apply to that portion of these kinds of income distributed to
stockholders. We will be taxed at regular corporate rates on all income not
distributed to stockholders. Our policy is to distribute at least 95% of the sum
of our REIT taxable income and net income from foreclosure property. REITs may
also incur taxes for other activities or to the extent distributions do not
satisfy other requirements.



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<PAGE>   22



         In the case of a REIT which is a partner in a partnership, such as us,
Regulations provide that the REIT will be deemed to own its proportionate share
of the assets of the partnership and will be deemed to earn the income of the
partnership attributable to such share. In addition, for purposes of satisfying
the asset and income tests described above, the character of the gross income
and assets in the hands of the partnership remains the same when allocated to
the REIT. Accordingly, our proportionate share of the assets, liabilities and
items of income of GGP Limited Partnership will be treated as our assets,
liabilities, and items of income for purposes of qualifying as a REIT.

         Our failure to qualify during any taxable year as a REIT could, unless
relief provisions were available, have a material adverse effect upon investors.
If disqualified for taxation as a REIT for a taxable year, we would also be
disqualified for taxation as a REIT for the next four taxable years, unless the
failure was due to reasonable cause rather than willful neglect and other
conditions are met. Federal income tax at corporate rates would apply to all of
our taxable income and we would not be able to deduct the dividends paid, which
could result in a discontinuation of or substantial reduction in dividends to
stockholders. The regular tax rules applicable to dividends received by
stockholders of corporations would also apply to our dividends. Should the
failure to qualify be determined to have occurred retroactively in one of our
earlier tax years, the imposition of a substantial federal income tax liability
on us attributable to the nonqualifying tax years may adversely affect our
ability to pay dividends. If we fail to meet the income tests of the tax law, we
may, generally, nonetheless retain our qualification as a REIT if we pay a 100%
tax on the amount by which we failed to meet the income tests so long as our
failure was due to reasonable cause and not willful neglect. Any taxes of this
kind would adversely affect our ability to pay dividends.


TAXATION OF TAXABLE DOMESTIC STOCKHOLDERS

         As used in this section, the term "U.S. Stockholder" means a holder of
our stock who, for United States federal income tax purposes is (i) a citizen or
resident of the United States, (ii) a corporation created or organized in or
under the laws of the United States or of any political subdivision of the
United States, (iii) an estate the income of which is subject to United States
federal income taxation regardless of its source, or (iv) a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons as defined in
section 7701(a)(30) of the Code have the authority to control all the
substantial decisions of the trust or if it has a valid election in effect under
applicable Regulations to be treated as a United States person.

         As long as we qualify as a REIT, distributions made to our U.S.
Stockholders out of current or accumulated earnings and profits (and not
designated as capital gain dividends) will be taxable to our U.S. Stockholders
as ordinary income. Corporate U.S. Stockholders will not be entitled to the
dividends-received deduction with respect to distributions by us. Distributions
that are designated as capital gain dividends will be taxable to U.S.
Stockholders as long-term capital gains (to the extent they do not exceed our
actual net capital gain for the taxable year) without regard to the period for
which the U.S. Stockholder has held its stock. With some limitations, capital
gains dividends received by an individual U.S. Stockholder may be eligible for
the 20% or 25% capital gains rates of tax. However, corporate U.S. Stockholders
may be required to treat up to 20% of capital gain dividends as ordinary income.
Distributions by us in excess of our current and accumulated earnings and
profits will not be taxable to a U.S. Stockholder to the extent that such
distributions do not exceed the adjusted basis of the U.S. Stockholder's shares,
but rather, will be a nontaxable reduction in a U.S. Stockholder's adjusted
basis in the shares to the extent of the adjusted basis and any amount of
distribution in excess of the adjusted basis will be taxed as capital gain.

         Any dividend declared by us in October, November or December of any
year payable to a U.S. Stockholder of record on a specified date in any of these
months will be treated as both paid by us and received


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<PAGE>   23



by the U.S. Stockholder on December 31 of that year, provided that the dividend
is actually paid by us during January of the following calendar year.

         U.S. Stockholders holding capital stock at the close of our taxable
year will be required to include, in computing their long-term capital gains for
the taxable year in which the last day of our taxable year falls, the amount
that we may designate in a written notice mailed to our stockholders. We may not
designate amounts in excess of our undistributed net capital gain for the
taxable year. Each U.S. Stockholder required to include a designated amount of
this kind in determining the stockholder's long-term capital gains will be
deemed to have paid, in the taxable year of the inclusion, the tax paid by us in
respect of the undistributed net capital gains. U.S. Stockholders to whom these
rules apply will be allowed a credit or a refund, as the case may be, for the
tax deemed to have been paid by the stockholders. U.S. Stockholders will
increase their basis in their capital stock by the difference between the amount
of such includible gains and the tax deemed paid by the stockholder in respect
of the gains.

         U.S. Stockholders may not include in their individual income tax
returns any of our net operating losses or capital losses. Instead, such losses
would be carried over by us for potential offset against our future income
(subject to certain limitations). Taxable distributions from us and gain from
the disposition of the capital stock will not be treated as passive activity
income and, therefore, U.S. Stockholders generally will not be able to apply any
"passive activity losses" (such as losses from certain types of limited
partnerships in which the U.S. Stockholder is a limited partner) against this
income. In addition, taxable distributions from us and gain from the disposition
of capital stock generally will be treated as investment income for purposes of
the investment interest limitations, except a gain taxed as long-term capital
gain will not be taken into account for purposes of the investment interest
limitation. We will notify the U.S. Stockholders after the close of our taxable
year as to the portions of the distributions attributable to that year that
constitute ordinary income, return of capital, and capital gain. In general, any
gain or loss realized upon a taxable disposition of the capital stock by a U.S.
Stockholder who is not a dealer in securities will be treated as long-term
capital gain if held for more than 12 months and otherwise as short-term capital
gain or loss. A maximum tax rate of 20% in respect of property held in excess of
12 months generally applies to long-term capital gain of an individual U.S.
Stockholder with respect to the sale of stock. However, any loss upon a sale or
exchange of capital stock by a U.S. Stockholder who has held such stock for six
months or less (after applying the relevant holding period rules) will be
treated as long-term capital loss to the extent of distributions from us
required to be treated by the U.S. Stockholder as long-term capital gain. All or
a portion of any loss realized upon a taxable disposition of the capital stock
may be disallowed if other shares of the capital stock are purchased within 30
days before or after the disposition.


BACKUP WITHHOLDING

         We will report to our U.S. Stockholders and to the IRS the amount of
dividends paid during each calendar year, and the amount of tax withheld, if
any. Under the backup withholding rules, a U.S. Stockholder may be subject to
backup withholding at the rate of 31% with respect to dividends paid unless the
holder: (a) is a corporation or comes within other exempt categories and when
required demonstrates this fact, or (b) provides a taxpayer identification
number, certifies as to no loss of exemption from backup withholding, and
otherwise complies with applicable requirements of the backup withholding rules.
The IRS may impose penalties on a U.S. Stockholder that does not provide us with
a correct taxpayer identification number. Any amount paid as backup withholding
will be creditable against the U.S. Stockholder's income tax liability. In
addition, we may be required to withhold a portion of capital gain distributions
to any U.S. Stockholders that fail to certify their non-foreign status to us.
See "--Taxation of Our Non-U.S. Stockholders" for more information about this
type of withholding.




                                       23

<PAGE>   24



TAXATION OF PENSION TRUSTS

         One of the requirements for us to qualify as a REIT for federal income
tax purposes is that, during the last half of each taxable year, not more than
50% in value of our capital stock can be owned by five or fewer individuals (as
defined in the Code to include certain entities). For purposes of the "five or
fewer" test described above, beneficiaries of a domestic pension trust that owns
shares of our capital stock generally will be treated as owning those shares in
proportion to their actuarial interests in the trust. In addition, amounts
distributed by us to a tax-exempt pension trust generally do not constitute
"unrelated business taxable income" to the trust unless the trust owns more than
ten percent of the capital stock, in which case a portion of the amounts
distributed may be treated as unrelated business taxable income.


TAXATION OF OUR NON-U.S. STOCKHOLDERS

         The rules governing United States federal income taxation of the
ownership and disposition of capital stock by persons that are, for purposes of
such taxation, nonresident alien individuals, foreign corporations, foreign
partnerships or foreign estates or trusts (which we refer to collectively as
"Non-U.S. Stockholders") are complex, and we do not attempt to provide more than
a brief summary of these rules in this section. Accordingly, the discussion does
not address all aspects of United States federal income tax and does not address
state, local or foreign tax consequences that may be relevant to a Non-U.S.
Stockholder in light of its particular circumstances. In addition, this
discussion is based on current law, which may change, and assumes that we
qualify for taxation as a REIT. Prospective Non-U.S. Stockholders should consult
with their own tax advisers to determine the impact of federal, state, local and
foreign income tax laws with regard to an investment in capital stock, including
any reporting requirements.

         Our distributions to a Non-U.S. Stockholder that are neither
attributable to gain from sales or exchanges by us of United States real
property interests nor designated by us as capital gains dividends will be
treated as dividends of ordinary income to the extent that they are made out of
our current or accumulated earnings and profits. Withholding of United States
federal income tax on a gross basis (that is, without allowance of deductions)
at a 30% rate or such lower rate as may be specified by an applicable income tax
treaty ordinarily will apply to these distributions, unless the dividends are
treated as effectively connected with the conduct by the Non-U.S. Stockholder of
a United States trade or business. Tax on a net basis (that is, after allowance
of deductions) at graduated rates, will apply to dividends that are effectively
connected with a United States trade or business, in the same manner as domestic
stockholders are taxed with respect to dividends of this kind. Withholding does
not generally apply to these dividends. An additional branch profits tax at a
30% rate or any lower rate that may be specified by an applicable income tax
treaty may also apply to any dividends of this kind received by a Non-U.S.
Stockholder that is a corporation. We expect to withhold United States income
tax at the rate of 30% on the gross amount of any distributions of this kind
made to a Non-U.S. Stockholder unless (i) a lower treaty rate applies and any
required form or certification evidencing eligibility for that reduced rate is
filed with us or (ii) the Non-U.S. Stockholder files an IRS Form 4224 with us
claiming that the distribution is effectively connected income.

         Distributions in excess of our current or accumulated earnings and
profits will not be taxable to a Non-U.S. Stockholder to the extent that they do
not exceed the adjusted basis of the stockholder's capital stock, but rather
will reduce the adjusted basis of such capital stock. To the extent that such
distributions exceed the adjusted basis of a Non-U.S. Stockholder's capital
stock, they will give rise to gain from the sale or exchange of its capital
stock, the tax treatment of which is described below. As a result of a
legislative change made by the Small Business Job Protection Act of 1996, it
appears that we will be required to withhold 10% of any distribution in excess
of our current and accumulated earnings and profits. Consequently, although we
intend to withhold at a rate of 30% or a lower applicable treaty rate on the
entire amount of any distribution, to the extent that we do not do so, any
portion of a distribution not subject to withholding at a rate of 30% (or a
lower


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<PAGE>   25



applicable treaty rate) will be subject to withholding at a rate of 10%.
However, the Non-U.S. Stockholder may seek a refund of these amounts from the
IRS if it subsequently determined that such distribution was, in fact, in excess
of our current or accumulated earnings and profits, and the amount withheld
exceeded the Non-U.S. Stockholder's United States tax liability, if any, with
respect to the distribution.

         United States federal income taxation generally will not apply to
distributions to a Non-U.S. Stockholder that are designated by us at the time of
distribution as capital gains dividends (other than those arising from the
disposition of a United States real property interest) unless (i) the investment
in the capital stock is effectively connected with the Non-U.S. Stockholder's
United States trade or business, in which case the same treatment will apply to
the Non-U.S. Stockholders as U.S. Stockholders with respect to such gain (except
that a stockholder that is a foreign corporation may also have to pay the 30%
branch profits tax, as discussed above), or (ii) the Non-U.S. Stockholder is a
nonresident alien individual who is present in the United States for 183 days or
more during the taxable year and has a "tax home" in the United States, in which
case the nonresident alien individual will have to pay a 30% tax on the
individual's capital gains.

         Under the Foreign Investment in Real Property Tax Act ("FIRPTA"),
distributions to a Non-U.S. Stockholder that are attributable to gain from sales
or exchanges by us of United States real property interests (whether or not
designated as a capital gain dividend) will cause the Non-U.S. Stockholder to be
treated as recognizing the gain as income effectively connected with a United
States trade or business. Non-U.S. Stockholders would thus generally be taxed at
the same rates applicable to U.S. Stockholders or have to pay a special
alternative minimum tax in the case of nonresident alien individuals. Also, a
30% branch profits tax might apply to a gain of this kind in the hands of a
Non-U.S. Stockholder that is a corporation, as discussed above. We are required
to withhold 35% of any distribution of this kind. That amount is creditable
against the Non-U.S. Stockholder's United States federal income tax liability.

         Although the law is not entirely clear on the matter, it appears that
amounts designated by us as undistributed capital gains in respect of
stockholders' shares would be treated with respect to Non-U.S. Stockholders in
the manner outlined in the preceding two paragraphs for actual distributions by
us of capital gain dividends. Under that approach, the Non-U.S. Stockholders
would be able to offset as a credit against their United States federal income
tax liability resulting therefrom their proportionate share of the tax paid by
us on such undistributed capital gains (and to receive from the IRS a refund to
the extent their proportionate share of such tax paid by us were to exceed their
actual United States federal income tax liability).

         United States taxation generally will not apply to gain recognized by a
Non-U.S. Stockholder upon the sale or exchange of capital stock unless the
shares constitute a "United States real property interest" within the meaning of
FIRPTA. The capital stock will not constitute a "United States real property
interest" so long as we are a "domestically controlled REIT." A "domestically
controlled REIT" is a REIT in which at all times during the specified testing
period less than 50% in value of its stock is held directly or indirectly by
Non-U.S. Stockholders. However, gain from the sale or exchange of capital stock
to which FIRPTA does not otherwise apply will be taxable to a Non-U.S.
Stockholder if the Non-U.S. Stockholder is a nonresident alien individual who is
present in the United States for 183 days or more during the taxable year and
has a "tax home" in the United States. In such case, a 30% United States
withholding tax will apply to the amount of the nonresident alien individual's
gain.

         We believe that we will continue to be a "domestically controlled
REIT," and therefore that the taxation under FIRPTA will not apply to the sale
of capital stock. However, because the capital stock is publicly traded, no
assurance can be given that we will continue to be a "domestically controlled
REIT." If we fail to qualify as a "domestically controlled REIT," United States
taxation under FIRPTA still would not apply to gain arising from the sale or
exchange by a Non-U.S. Stockholder of capital stock as a sale of a "United
States real property interest," if (i) the capital stock (as applicable) is
"regularly traded" (as defined by applicable Regulations) on an established
securities market (e.g., NYSE) and (ii) the selling Non-U.S. Stockholder held 5%
or less of the value


                                       25

<PAGE>   26



of the outstanding class or series of shares being sold at all times during a
specified testing period. If taxation under FIRPTA applied to gain on the sale
or exchange of capital stock, the Non-U.S. Stockholder would have to pay an
applicable alternative minimum tax and a special alterative minimum tax in the
case of nonresident alien individuals, and the purchaser of the capital stock
would be required to withhold and remit to the IRS 10% of the purchase price.

         Backup withholding tax and information reporting will generally not
apply to distributions paid to Non-U.S. Stockholders outside the United States
that are treated as (i) dividends subject to the 30% (or lower treaty rate)
withholding tax discussed above, (ii) capital gains dividends or (iii)
distributions attributable to gain from the sale or exchange by us of United
States real property interests. As a general matter, backup withholding and
information reporting will not apply to a payment of the proceeds of a sale of
capital stock by or through a foreign office of a foreign broker. Information
reporting (but not backup withholding) will apply, however, to a payment of the
proceeds of sale of capital stock by a foreign office of a broker that (a) is a
United States person, (b) derives 50% or more of its gross income for certain
periods from the conduct of a trade or business in the United States or (c) is a
"controlled foreign corporation" unless the broker has documentary evidence in
its records that the holder is a Non-U.S. Stockholder and other conditions are
met, or the stockholder otherwise establishes an exemption. A "controlled
foreign corporation" generally means a foreign corporation controlled by U.S.
Stockholders for United States tax purposes. Both backup withholding and
information reporting apply to payment to or through a United States office of a
broker of the proceeds of a sale of capital stock unless the stockholder
certifies under penalty of perjury that the stockholder is a Non-U.S.
Stockholder, or otherwise establishes an exemption. A Non-U.S. Stockholder may
obtain a refund of any amounts withheld under the backup withholding rules by
filing the appropriate claim for refund with the IRS.

         The United States Treasury Department has issued final regulations
regarding the withholding and information reporting rules discussed above. In
general, these regulations do not alter the substantive withholding and
information reporting requirements but unify certification procedures and forms
and clarify and modify reliance standards. These regulations generally are
effective for payments made after December 31, 2000, subject to certain
transition rules. A Non-U.S. Stockholder should consult its own advisor
regarding the effect of the new Regulations.


                                 USE OF PROCEEDS

         We will not receive any cash proceeds from the issuance of the Common
Stock upon the tender of your common units for redemption. However, we will
acquire your common units in exchange for Common Stock that we issue pursuant to
this Prospectus. With each such acquisition, our interest in GGP Limited
Partnership will increase.


                              PLAN OF DISTRIBUTION

         This Prospectus relates to our issuance of up to 518,833 shares of
Common Stock if and to the extent that you redeem your common units in
accordance with the terms of the Agreement and we, in our sole and absolute
discretion, elect to issue Common Stock in consideration for such common units.
We have registered the Common Stock for sale to provide the holders thereof with
freely tradeable securities, but registration of such shares does not
necessarily mean that we will issue any Common Stock.

         We will not receive any cash proceeds from the issuance of the Common
Stock; however, we will acquire one common unit (subject to certain
anti-dilution adjustments) in exchange for each share of Common Stock that we
issue pursuant to this Prospectus and will thereby increase our percentage
interest in GGP Limited Partnership.


                                       26

<PAGE>   27




         The Common Stock will be listed on the NYSE, subject to official notice
of issuance.


                                  LEGAL MATTERS

         The validity of the Common Stock offered hereby and certain federal
income tax matters will be passed upon for us by Neal, Gerber & Eisenberg of
Chicago, Illinois. Marshall E. Eisenberg, a partner of Neal, Gerber & Eisenberg,
is our Secretary.


                                     EXPERTS

         The consolidated financial statements incorporated in this Registration
Statement by reference to the Annual Report on Form 10-K for the year ended
December 31, 1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

         The combined statement of revenues and certain expenses of the Ala
Moana Properties for the year ended December 31, 1998, incorporated herein by
reference have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report which is incorporated herein by reference. This combined
statement of revenues and certain expenses has been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.








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