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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) : May 14, 1996
SIMON PROPERTY GROUP, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-12618 35-1901999
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
115 WEST WASHINGTON STREET
INDIANAPOLIS, INDIANA 46204
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 317.636.1600
Not Applicable
(Former name or former address, if changed since last report)
<PAGE> 01
Item 5. Other Events
On May 14, 1996 the Registrant made available additional ownership and
operation information concerning the Registrant, Simon Property Group, L.P.,
and the properties owned or managed by it as of March 31, 1996, in the form of
a Supplemental Information package, a copy of which is included as an exhibit
to this filing. The Supplemental Information package is available upon request
as specified therein.
Item 7. Financial Statements and Exhibits
Financial Statements:
None
Exhibits:
Page Number in
Exhibit No. Description This Filing
99 Supplemental Information 4
as of March 31, 1996
<PAGE> 02
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 14, 1996
SIMON PROPERTY GROUP, INC.
By: /s/ Dennis Cavanagh
Dennis Cavanagh,
Senior Vice President,
Financial Services
<PAGE> 03
SUPPLEMENTAL INFORMATION
Table of Contents
As of March 31, 1996
Information
Overview
Ownership Structure
Reconciliation of Net Income to Funds from Operations ("FFO")
Selected Financial Information
Portfolio GLA, Occupancy & Rent Data
Rent Information
Lease Expirations
Scheduled Debt Amortization and Maturities
Summary of Mortgage Indebtedness by Maturity
Summary of Variable Rate Debt and Interest Rate Protection Agreements
Development Activities
Capital Expenditures
Gains on Sales of Peripheral Land
Teleconference Text - May 1, 1996
<PAGE> 04
SIMON PROPERTY GROUP
Overview
The Company
Simon Property Group, Inc. (the "Company") is the sole general partner of,
and owns a controlling 61.1% interest in, Simon Property Group, L.P. ("SPG")
which owns, develops, manages, leases, expands and acquires regional malls and
community centers throughout the United States. SPG currently owns or has an
interest in 122 properties which consist of existing regional malls, community
shopping centers and specialty and mixed-use properties containing an aggregate
of approximately 62 million square feet of GLA in 28 states, of which
approximately 37 million square feet is owned by SPG ("Owned GLA"). SPG has
four new developments under construction: Cottonwood Mall - a 970,000 square
foot super-regional mall in Albuquerque, New Mexico; The Source - a 730,000
square foot mall in Westbury, Long Island, New York; Ontario Mills - a 1.4
million square foot super-regional, value-oriented mall in Ontario (Los
Angeles), California; and Tower Shops at Stratosphere - a 122,000 square foot
retail project in Las Vegas, Nevada. The Company also has a 250,000 square
foot expansion project under construction at The Forum Shops at Caesars in Las
Vegas. SPG, together with its affiliated management company, currently manages
over 75 million square feet of GLA in retail and mixed-use properties.
In December 1993, the Company completed its Initial Public Offering in
which it sold 43.4 million shares of common stock at $22.25 per share. In
April 1995, the Company completed an add-on offering of six million shares at
$24.125 per share. On May 17, 1995, an additional 241,854 shares were sold
pursuant to the underwriters' exercise of their over-allotment option. In
October 1995, the Company issued 4 million convertible preferred shares at
$25.00 per share. The terms of the preferred shares are summarized in the
Company's December 31, 1995 Form 10-K - footnote 11 to the financial
statements. The Company is a real estate investment trust. It is self-
administered and self-managed and the common stock trades on the New York Stock
Exchange under the symbol SPG.
In March 1996, Simon Property Group and DeBartolo Realty Corporation (NYSE:EJD)
announced a plan to merge the two companies. The merger is expected to be
completed during the summer and is subject to the approval of shareholders of
both companies and customary regulatory and other conditions.
The Purpose of This Package
In this Supplemental Package, we have attempted to address the topics on
which we receive the most questions. We believe the key benefits from
providing a supplemental information package are as follows:
* It summarizes key information in one location.
* It provides debt information in a format that should be more useful
to users.
* It should be especially useful for any new shareholders or analysts
attempting to learn about SPG or setting up financial models.
We hope you find this Supplemental Package beneficial. Any questions, comments
or suggestions should be directed to: Shelly J. Doran, Director of Investor
Relations-Simon Property Group, P.O. Box 7033, Indianapolis, IN 46207 (317) 685-
7330.
<PAGE> 05
SIMON PROPERTY GROUP
OWNERSHIP STRUCTURE
As of March 31, 1996
SIMON PROPERTY GROUP, L.P. (the "Operating Partnership")
Total Common Shares and Units Outstanding = 95,842,853 (1)
Operational Assets:
62 Regional Malls
55 Community Shopping Centers
2 Specialty Retail Centers
3 Mixed-Use Properties
Partners: %
Simon Property Group, Inc.
Public Shareholders 57.5%
Simon Family and Executive Management 3.6%
Limited Partners
Simon Family and Executive Management 35.7%
Other 3.2%
100.0%
Simon Property Group, Inc. (the "Company")
61.1% General Partner of Operating Partnership
Common Shareholders Shares %
Public Shareholders 55,117,859 94.1%
Simon Family and Executive Management 3,442,366 5.9%
58,560,225 100.0%
Limited Partners ("Limited Partners")
38.9% Limited Partners of Operating Partnership
Unitholders Units %
Simon Family and Executive Management 34,204,708 91.7%
Other Limited Partners 3,077,920 8.3%
37,282,628 100.0%
(1) Excludes 4 million shares of preferred stock issued on October 27, 1995.
<PAGE> 06
SIMON PROPERTY GROUP
Changes in Common Stock and Unit Ownership
For the Period from December 31, 1995 through March 31, 1996
SPG, L.P. SPG, Inc.
Units Common Shares
Number Outstanding at December 31, 1995 37,282,628 58,360,195
March 22 Award of Restricted Stock - 200,030
(Stock Incentive Program)
Number Outstanding at March 31, 1996 37,282,628 58,560,225
Total Common Shares and Units Outstanding at March 31, 1996:
95,842,853
<PAGE> 07
<TABLE>
SIMON PROPERTY GROUP
Reconciliation of Net Income to Funds From Operations ("FFO") (1)
As of March 31, 1996
(In thousands, except per share data)
Three Months Ended
March 31,
<S> <C> <C>
Simon Property Group, L.P. (the "Operating Partnership") 1996 1995
Income of the Operating Partnership before Extraordinary Items $23,832 $22,207
Plus: Real Estate Depreciation and Amortization from Consolidated
Properties 24,537 20,991
Less: Minority Interest Portion of Real Estate Depreciation, Amortization (690) (558)
and Extraordinary Item
Plus: SPG's Share of Real Estate Depreciation and Amortization from
Unconsolidated Affiliates 3,032 1,646
Less: Preferred Dividends (2,031) -
Less: Gain on Sale of Asset - (2,350)
Funds from Operations of Operating Partnership $48,680 $41,936
Percent Increase 16.1%
Weighted Average Common Shares and Units Outstanding 95,665 86,758
FFO per Share/Unit $0.51 $0.48
Percent Increase 6.3%
Simon Property Group, Inc. (the "Company")
FFO Allocable to SPG, Inc. $29,727 $23,882
Percent Increase 24.5%
Weighted Average Common Shares Outstanding 58,382 49,378
FFO per Share $0.51 $0.48
Percent Increase 6.3%
Distributions per Common Share/Unit $0.4925 $0.4925
(1) FFO amounts were calculated in accordance with the National
Association of Real Estate Investment Trust's revised definition of FFO.
</TABLE>
<PAGE> 08
<TABLE>
SIMON PROPERTY GROUP
Selected Financial Information
As of March 31, 1996
(In thousands, except as noted)
Three Months Ended
March, 31
<S> <C> <C> <C>
Financial Highlights 1996 1995 % Change
Total Revenues - Consolidated Properties $139,444 $129,490 7.7%
Total EBITDA of Portfolio Properties $115,741 $101,786 13.7%
EBITDA After Minority Interest $ 91,216 $ 85,123 7.2%
Net Income Available to Common Shareholders $ 13,154 $ 12,647 4.0%
Net Income Available to Common Shareholders per Share $ 0.23 $ 0.26 (11.5)%
Funds from Operations of the Operating Partnership $ 48,680 $ 41,936 16.1%
Funds from Operations Allocable to Simon Property
Group, Inc. $ 29,727 $ 23,882 24.5%
Funds from Operations per Common Share $ 0.51 $ 0.48 6.3%
Common Stock Distributions Declared, per Common share $ 0.4925 $ 0.4925 -
Occupancy at End of Period:
Regional Malls (1) 83.0% 84.3% (1.3)%
Community Shopping Centers (2) 93.1% 94.0% (0.9)%
Average Base Rent per Square Foot:
Regional Malls (1) $ 19.70 $ 17.79 10.7%
Community Shopping Centers (2) $ 7.36 $ 7.21 2.1%
Total Tenant Sales Volume, in millions (3)
Regional Malls (4) $ 766 $ 658 16.4%
Community Shopping Centers (2) $ 266 $ 267 (0.4)%
Number of Properties Open at End of Period 122 119 2.5%
Units Outstanding at End of Period 37,283 37,285 -0.0%
Common Shares Outstanding at End of Period 58,560 50,794 15.3%
Total Common Shares and Units Outstanding at End of 95,843 88,079 8.8%
Period
Weighted Average Units Outstanding 37,283 37,380 (0.3)%
Weighted Average Common Shares Outstanding 58,382 49,378 18.2%
Weighted Average Common Shares and Units Outstanding 95,665 86,758 10.3%
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
(3) Represents only those tenants who report sales.
(4) Based upon the new standard definition of sales for regional
malls adopted by the International Council of Shopping Centers
which includes only mall and freestanding stores.
</TABLE>
<PAGE> 09
<TABLE>
SIMON PROPERTY GROUP
Selected Financial Information
As of March 31, 1996
(In thousands, except as noted)
March 31, December 31,
Selected Balance Sheet Information and Statistics 1996 1995
<S> <C> <C>
Total Assets $2,532,548 $2,556,436
Consolidated Debt $1,995,620 $1,980,759
Joint Venture Debt $ 420,872 $ 410,652
SPG Share of Joint Venture Debt $ 170,801 $ 167,644
Common Stock Price at End of Period $ 23.125 $ 24.375
Equity (1) $2,316,366 $2,431,294
Total Capitalization - Consolidated Debt Only $4,311,986 $4,412,053
Debt-to-Market Capitalization - Consolidated Only 46.3% 44.9%
Total Capitalization - Including SPG Share of JV Debt $4,482,787 $4,579,697
Debt-to-Market Capitalization - Including SPG Share of JV Debt 48.3% 46.9%
(1) Market value of common stock and partnership units plus book value of preferred stock.
</TABLE>
<PAGE> 10
<TABLE>
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data
As of March 31, 1996
% of Average
Owned Annualized
GLA Base Rent
Total % of Which per Leased
Type of GLA Owned Owned is Sq. Ft. of
Property Sq. Ft. GLA GLA Leased Owned GLA
Regional Malls
<S> <C> <C> <C> <C> <C>
- -Anchor 30,553,630 9,712,819 26.0% 97.4% $3.02
- -Mall Store 17,316,141 17,316,141 46.5% 82.7% 20.11
- -Freestanding 1,023,334 458,264 1.2% 95.4% 6.55
Subtotal 18,339,475 17,774,405 47.7% 83.0% $19.70
Regional
Mall Total 48,893,105 27,487,224 73.7% 88.1% $13.06
Community Shopping Centers
- -Anchor 8,102,878 5,127,735 13.7% 93.9% $5.96
- -Mall Store 3,031,033 2,949,943 7.9% 91.0% 9.89
- -Freestanding 741,224 281,209 0.8% 100.0% 7.04
Community
Center Total 11,875,135 8,358,887 22.4% 93.1% $7.36
Mixed-Use Properties
- -Office Portion 1,450,870 1,450,870 3.9% 91.6% $20.40
GRAND TOTAL 62,219,110 37,296,981 100.0% 89.3% $12.01
</TABLE>
<TABLE>
Occupancy History
--------------------------------------------------------
Community
As of Regional Malls(1) Shopping Centers(2)
<C> <C> <C>
3/31/96 83.0% 93.1%
3/31/95 84.3% 94.0%
12/31/95 86.4% 95.1%
12/31/94 86.2% 94.6%
12/31/93 85.6% 89.3%
12/31/92 84.6% 89.3%
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
</TABLE>
<PAGE> 11
<TABLE>
SIMON PROPERTY GROUP
Rent Information
As of March 31, 1996
Average Base Rent
Mall &
Freestanding Community
Stores at % Shopping %
As of Regional Malls Change Centers Change
- ------- -------------- ------ --------- ------
<C> <C> <C> <C> <C>
3/31/96 $19.70 10.7% $7.36 2.1%
3/31/95 17.79 - 7.21 -
12/31/95 18.68 7.2 7.27 2.5
12/31/94 17.43 3.1 7.09 3.1
12/31/93 16.91 4.8 6.88 1.5
12/31/92 16.14 7.9 6.78 8.1
</TABLE>
<TABLE>
Rental Rates
Base Rent (1)
Store Openings Store Closings Amount of Change
Year During Period During Period Dollar Percentage
<C> <C> <C> <C> <C>
Regional Malls:
1996 (YTD) $21.45 $15.44 $6.01 38.9%
1995 21.92 16.54 5.38 32.5
1994 18.67 13.35 5.32 39.9
1993 21.45 15.18 6.27 41.3
1992 20.09 14.21 5.88 41.4
Community Shopping Centers:
1996 (YTD) $7.66 $7.29 $0.37 5.1%
1995 10.00 8.78 1.22 13.9
1994 10.43 11.33 (0.90) (7.9)
1993 11.66 9.59 2.07 21.6
1992 9.40 9.08 0.32 3.5
(1) Represents the average base rent in effect during the period for those
tenants who signed leases as compared to the average base rent in effect
during the period for those tenants who closed or whose leases expired.
</TABLE>
<PAGE> 12
SIMON PROPERTY GROUP
Lease Expirations (1)
As of March 31, 1996
Number of Square Avg. Base Rent
Year Leases Expiring Feet per Square Foot
at 3/31/96
Regional Malls - Mall & Freestanding Stores
1996 (4/1 - 12/31) 117 296,141 $14.64
1997 676 1,589,254 17.55
1998 604 1,014,981 20.65
1999 579 1,347,629 20.45
2000 539 1,234,255 22.03
2001 498 1,309,994 19.38
2002 312 973,347 20.92
2003 338 995,329 21.23
2004 357 1,127,786 20.61
2005 330 1,207,064 19.10
2006 478 1,513,173 21.68
TOTALS 4,828 12,608,953 $20.17
Regional Malls - Anchor Tenants
1996 (4/1 - 12/31) 3 231,015 $1.77
1997 6 592,036 1.59
1998 6 871,029 1.68
1999 9 1,167,207 1.85
2000 6 723,869 2.56
2001 8 924,778 2.18
2002 2 222,540 1.78
2003 3 255,227 3.54
2004 9 715,572 4.54
2005 6 675,033 2.31
2006 6 670,684 4.01
TOTALS 64 7,048,990 $2.50
Community Centers - Mall Stores & Freestanding Stores
1996 (4/1 - 12/31) 18 49,160 $8.11
1997 121 328,962 10.51
1998 125 342,659 11.11
1999 106 361,605 10.70
2000 112 493,296 9.13
2001 66 212,630 11.13
2002 25 131,150 8.74
2003 23 165,286 9.00
2004 21 134,052 10.93
2005 23 210,946 7.76
2006 8 102,185 8.71
TOTALS 648 2,531,931 $9.88
Community Centers - Anchor Tenants
1996 (4/1 - 12/31) 4 114,876 $4.77
1997 10 291,550 5.55
1998 1 55,695 5.49
1999 7 263,019 4.39
2000 5 217,813 4.43
2001 9 361,636 4.02
2002 3 142,572 6.20
2003 7 248,553 6.57
2004 6 150,943 5.80
2005 9 437,915 7.01
2006 7 460,400 5.95
TOTALS 68 2,744,972 $5.57
(1) Does not consider the impact of options that may be contained in leases.
<PAGE> 13
<TABLE>
SIMON PROPERTY GROUP
Scheduled Debt Amortization and Maturities
As of March 31, 1996
(In thousands)
Year Scheduled Scheduled Total SPG's Share SPG's Share Total
Amortization Maturities of Scheduled of Scheduled
Amortization Maturities
Consolidated
Properties
<S> <C> <C> <C> <C> <C> <C>
1996 $ 5,400 $ 63,079 $ 68,479 $ 5,400 $ 63,079 $ 68,479
1997 11,823 107,200 119,023 11,823 107,200 119,023
1998 10,104 225,880 235,984 10,104 218,441 228,545
1999 12,674 243,703 256,377 12,674 243,703 256,377
2000 14,219 326,006 340,225 14,219 283,292 297,511
2001 15,299 0 15,299 15,299 0 15,299
2002 14,278 86,144 100,422 14,278 86,144 100,422
2003 8,486 275,149 283,635 8,486 275,149 283,635
2004 3,746 161,256 165,002 3,746 161,256 165,002
2005 4,092 0 4,092 4,092 0 4,092
Thereafter 0 211,082 211,082 0 211,082 211,082
$ 100,121 $ 1,699,499 $ 1,799,620 $ 100,121 $ 1,649,346 $ 1,749,467
Short Term
Credit Facilities
1996 0 0 0 0 0 0
1997 0 0 0 0 0 0
1998 0 196,000 196,000 0 196,000 196,000
Total Consolidated Debt $ 100,121 $ 1,895,499 $ 1,995,620 $ 100,121 $ 1,845,346 $ 1,945,467
Joint Ventures
1996 166 5,000 5,166 83 2,500 2,583
1997 241 0 241 120 0 120
1998 267 60,000 60,267 134 29,940 30,074
1999 295 108,763 109,058 148 38,475 38,623
2000 119 21,639 21,758 36 10,820 10,855
2001 2,221 0 2,221 775 0 775
2002 2,384 0 2,384 832 0 832
2003 2,559 0 2,559 892 0 892
2004 2,747 0 2,747 958 0 958
2005 0 160,471 160,471 0 58,144 58,144
Thereafter 0 54,000 54,000 0 26,946 26,946
Total Joint Venture Debt $ 10,999 $ 409,873 $ 420,872 $ 3,977 $ 166,824 $ 170,801
/TABLE
<PAGE> 14
<TABLE>
SIMON PROPERTY GROUP
Summary of Mortgage Indebtedness By Maturity
As of March 31, 1996
(In thousands)
Principal SPG Share Weighted Average
Property Maturity Interest Balance of Interest Rate
Name Date Rate 3/31/96 Loan Balance by Year
<S> <C> <C> <C> <C> <C>
Consolidated Properties:
Fixed Rate Debt:
Subtotal 1996-1997 0 0
White Oaks Mall 03/01/98 7.70% 16,500 9,061
Subtotal 1998 16,500 9,061 7.70%
West Ridge Mall 06/01/99 8.00% 50,430 50,430
Ingram Park Mall 11/01/99 9.63% 7,000 7,000
Ingram Park Mall 12/01/99 8.10% 49,553 49,553
Barton Creek Square 12/30/99 8.10% 64,128 64,128
La Plaza Mall 12/30/99 8.25% 50,898 50,898
Subtotal 1999 222,009 222,009 8.16%
Windsor Park Mall 06/01/00 8.00% 6,059 6,059
Trolley Square 07/23/00 5.81% 19,000 17,100
Bloomingdale Court 12/01/00 8.75% 29,009 29,009
Forest Plaza 12/01/00 8.75% 17,354 17,354
Fox River Plaza 12/01/00 8.75% 12,654 12,654
Lake View Plaza 12/01/00 8.75% 22,169 22,169
Lincoln Crossing 12/01/00 8.75% 997 997
Matteson Plaza 12/01/00 8.75% 11,159 11,159
Regency Plaza 12/01/00 8.75% 1,878 1,878
St. Charles Towne Pl 12/01/00 8.75% 30,887 30,887
West Ridge Plaza 12/01/00 8.75% 4,612 4,612
White Oaks Plaza 12/01/00 8.75% 12,345 12,345
Subtotal 2000 168,123 166,223 8.39%
Subtotal 2001 0 0
Crossroads Mall 07/31/02 7.75% 41,440 41,440
North Riverside Park 09/01/02 9.38% 4,170 4,170
North Riverside Park 09/01/02 10.00% 3,711 3,711
Hutchinson Mall 10/01/02 8.44% 11,523 11,523
Markland Mall 12/15/02 6.75% 10,000 10,000
Muncie Mall 12/15/02 6.75% 24,000 24,000
Subtotal 2002 94,844 94,844 7.64%
Battlefield Mall 06/01/03 7.50% 51,499 51,499
South Park Mall 06/15/03 7.25% 24,748 24,748
Anderson Mall 12/15/03 6.74% 19,000 19,000
Forest Mall 12/15/03 6.74% 12,800 12,800
Forest Village Park 12/15/03 6.16% 20,600 20,600
Golden Ring Mall 12/15/03 6.74% 29,750 29,750
Longview Mall 12/15/03 6.16% 22,100 22,100
Midland Park Mall 12/15/03 6.31% 22,500 22,500
Miller Hill Mall 12/15/03 6.74% 34,500 34,500
North Towne Square 12/15/03 6.31% 23,500 23,500
Towne West Square 12/15/03 6.16% 40,250 40,250
Subtotal 2003 301,247 301,247 6.69%
Cielo Vista Mall 07/01/04 8.13% 2,413 2,413
College Mall 07/01/04 7.00% 43,851 43,851
Greenwood Park Mall 07/01/04 7.00% 36,727 36,727
Tippecanoe Mall 07/01/04 8.45% 48,060 48,060
Towne East Square 07/01/04 7.00% 57,977 57,977
Subtotal 2004 189,028 189,028 7.38%
Subtotal 2005-2006 0 0
Cielo Vista Mall 05/01/07 9.25% 56,692 56,692
Irving Mall 05/01/07 9.25% 43,655 43,655
McCain Mall 05/01/07 9.25% 26,474 26,474
Valle Vista Mall 05/01/07 9.25% 35,061 35,061
Subtotal 2007 161,882 161,882 9.25%
Subtotal 2008-2011 0 0
Windsor Park Mall 05/01/12 8.00% 9,027 9,027
Subtotal 2012 9,027 9,027 8.00%
O'Hare International 12/31/13 7.50% 27,500 27,500
Subtotal 2013 27,500 27,500 7.50%
Subtotal 2014-2025 0 0
Sunland Park Mall 01/01/26 8.63% 40,398 40,398
Subtotal 2026 40,398 40,398 8.63%
Total Consolidated Fixed
Rate Debt 1,230,558 1,221,219 7.81%
Variable Rate Debt:
Lincolnwood Town Ctr 12/27/96 6.06% 63,079 63,079
Subtotal 1996 63,079 63,079 6.06%
Eastland Mall 11/01/97 6.65% 30,000 30,000
St. Charles Towne Ctr 12/31/97 6.37% 77,200 77,200
Subtotal 1997 107,200 107,200 6.45%
East Towne Mall 09/29/98 6.56% 55,000 55,000
Eastgate Consumer 12/31/98 6.13% 25,429 25,429
Riverway 12/31/98 6.38% 85,571 85,571
Riverway 12/31/98 6.38% 45,879 45,879
Subtotal 1998 211,879 211,879 6.39%
Cottonwood Mall (1) 02/01/99 7.40% 28,763 28,763
Subtotal 1999 28,763 28,763 7.40%
Jefferson Valley Mall 01/12/00 5.93% 50,000 50,000
The Forum Shops 02/23/00 6.31% 100,000 59,525
Trolley Square 07/23/00 6.81% 4,641 4,177
Trolley Square 07/23/00 6.81% 3,500 3,150
Subtotal 2000 158,141 116,852 6.22%
Total Consolidated Variable Rate Debt 569,062 527,773 6.37%
Total Consolidated Properties 1,799,620 1,748,992 7.35%
Joint Venture Properties:
Fixed Rate Debt:
The Source 12/21/96 N/A 5,000 2,500
Subtotal 1996 5,000 2,500
Subtotal 1997 0 0
Ross Park Mall 08/15/98 6.14% 60,000 29,940
Subtotal 1998 60,000 29,940 6.14%
Subtotal 1999 0 0
North East Mall 09/01/00 10.00% 22,608 11,304
Subtotal 2000 22,608 11,304 10.00%
Subtotal 2001-2004 0 0
Cobblestone Court 11/30/05 7.22% 6,180 2,163
Crystal Court 11/30/05 7.22% 3,570 1,249
Fairfax Court 11/30/05 7.22% 10,320 2,709
Gaitway Plaza 11/30/05 7.22% 7,350 1,715
Ridgewood Court 11/30/05 7.22% 7,980 2,793
Royal Eagle Plaza 11/30/05 7.22% 7,920 2,772
The Plaza at Buckland 11/30/05 7.22% 17,680 4,641
The Yards Plaza 11/30/05 7.22% 8,270 2,895
Village Park Plaza 11/30/05 7.22% 8,960 3,136
West Town Corners 11/30/05 7.22% 10,330 2,411
Westland Park Plaza 11/30/05 7.22% 4,950 1,155
Willow Knolls Court 11/30/05 7.22% 6,490 2,272
Seminole Towne Center 12/27/05 6.88% 70,500 31,725
Subtotal 2005 170,500 61,636 7.08%
Subtotal 2006-2016 0 0
Ross Park Mall 01/01/17 10.07% 54,000 26,946
Subtotal 2017 54,000 26,946 10.07%
Total Joint Venture Fixed Rate Debt 312,108 132,326 7.51%
Variable Rate Debt:
Subtotal 1996-1998 0 0
Lakeline Mall 05/16/99 5.75% 63,703 31,852
Circle Centre (2) 08/29/99 7.81% 45,061 6,624
Subtotal 1999 108,764 38,475 6.60%
Total Joint Venture Variable Rate Debt 108,764 38,475 6.60%
Total Joint Venture Properties 420,872 170,801 7.28%
Total Mortgage Debt 2,220,492 1,919,793 7.34%
Short Term Credit Facilities:
Variable Rate Debt:
SPG, LP 08/07/98 6.68% 196,000 196,000
Subtotal 1998 196,000 196,000 6.68%
Short Term Credit Facilities 196,000 196,000 6.68%
(1) Option exists to extend maturity one year.
(2) Two one-year options exist to extend maturity.
</TABLE>
<TABLE>
Reconciliation to Balance Sheets at March 31, 1996
Principal SPG Share
Balance of Weighted Average
3/31/96 Loan Balance Interest Rate
<S> <C> <C> <C>
Consolidated Fixed Rate Debt 1,230,558 1,221,219 7.81%
Consolidated Variable Rate Debt 569,062 527,773 6.37%
Short-Term Credit Facilities 196,000 196,000 6.68%
Subtotal 765,062 723,773 6.45%
Mortgage and Other Notes Payable
Consolidated Balance Sheets 1,995,620 1,944,992 7.29%
Joint Venture Fixed Rate Debt 312,108 132,326 7.51%
Joint Venture Variable Rate Debt 108,764 38,475 6.60%
Mortgage and Other Notes Payable
Partnerships and Joint Ventures 420,872 170,801 7.28%
</TABLE>
<PAGE> 15
<TABLE>
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of March 31, 1996
(In thousands)
Simon Terms of
Ownership SPG Interest
Principal % of Share of Interest Terms of Rate
Property Maturity Balance Joint Loan Rate Variable Protection
Name Date 3/31/96 Ventures Balance 3/31/96 Rate Agreement
<S> <C> <C> <C> <C> <S> <S>
Consolidated
Properties:
Variable Rate
Debt:
Lincolnwood 12/27/96 63,079 63,079 6.06% LIBOR + 1.25% LIBOR swapped at
Town Ctr 4.81% through
maturity
Eastland Mall 11/01/97 30,000 30,000 6.65% LIBOR + 1.50% LIBOR swapped at
5.15% through
maturity; lender
has right to
cancel swap
effective 1/1/97
St. Charles 12/31/97 77,200 77,200 6.37% LIBOR + 1.25% $62,238 of loan
Towne Ctr balance is LIBOR
swapped at 5.12%
through maturity;
lender has right
to cancel swap
effective 1/3/97
East Towne
Mall 09/29/98 55,000 55,000 6.56% LIBOR + 1.125%
Eastgate 12/31/98 25,429 25,429 6.13% LIBOR + 1.50% LIBOR capped at
Consumer 5.0% through
maturity
Riverway 12/31/98 85,571 85,571 6.38% LIBOR + 1.375% LIBOR capped at
5.0% through
maturity
Riverway 12/31/98 45,879 45,879 6.38% LIBOR + 1.375% LIBOR capped at
5.0% through
maturity
Cottonwood 02/01/99 (1) 28,763 28,763 7.40% Prime + .25%
Mall or LIBOR +
2.00%
Jefferson 01/12/00 50,000 50,000 5.93% LIBOR + .55% LIBOR capped at
Valley Mall 8.7% through
maturity
The Forum
Shops 02/23/00 100,000 60.0% 59,525 6.31% LIBOR + 1.0% See Footnote #2
Trolley
Square 07/23/00 4,641 90.0% 4,177 6.81% LIBOR + 1.50%
Trolley
Square 07/23/00 3,500 90.0% 3,150 6.81% LIBOR + 1.50%
Total
Consolidated
Properties 569,062 527,773
Short Term
Credit
Facilities:
SPG, L.P. 08/07/98 196,000 196,000 6.68% LIBOR + 1.325% On March 13, 1995,
the Operating Partnership
Total Short entered into a two-
Term Credit year cap agreement
Facilities 196,000 196,000 in the amount of
$100 million. The
Operating
Partnership may
elect to use this
cap on any wholly
owned variable-
interest-rate
debt. The LIBOR
cap may fluctuate
through March 13,
1997. LIBOR is
initially capped
at 7.5% through
maturity, however,
if LIBOR should
equal or exceed
8.75% between
monthly reset
dates, then LIBOR
would be capped at
8.5% for that
period only.
Joint Venture
Properties:
Variable Rate
Debt:
Lakeline Mall 5/16/99 63,703 50.0% 31,852 5.75% LIBOR + .375%
Circle Centre 8/29/99(3) 45,061 14.7% 6,624 7.81% LIBOR + 2.375%
Total Joint
Venture
Properties 108,764 38,475
Total
Variable
Mortgage and
Other
Indebtness 873,826
Footnotes:
(1) Option exists to extend maturity one year.
(2) On February 23, 1996, the Operating Partnership borrowed the initial $100,000 tranche
from a $184,000 two tranche loan facility for Forum and retired the existing $89,701
mortgage debt for Forum. The initial funding bears interest at LIBOR plus 100 basis points and
matures in February 2000. The initial $100,000 tranche provides $90,500 for Phase I of which
SPG's ownership percentage is 60% and the remaining $9,500 for Phase II(expansion) of which SPG's
ownership percentage is 55%. The remaining proceeds of the total $184,000 two tranche loan will
be used to provide funds for the approximately 250,000-square-foot expansion of this Property.
Cap agreement made on $89,000 of total loan balance; LIBOR capped @ 7% through 12/23/96; however
if LIBOR should increase more than 0.6% between monthly reset dates, the cap will be increased by
0.25%, but shall not exceed 8.25%.
(3) Two one-year options exist to extend maturity.
</TABLE>
<PAGE> 16
<TABLE>
SIMON PROPERTY GROUP
Development Activities
As of March 31, 1996
Non-Anchor Projected
SPG Sq. Footage Anchors/ Actual/ Development
GLA Ownership Leased/ Major Projected Cost (in
Mall/Location (sq. ft.) Percentage Committed(1) Tenants Opening millions)
Under Construction
<S> <C> <C> <C> <S> <C> <C>
Cottonwood Mall 970,000 100% 85% Dillard's 07/31/96 $75
Albuquerque, NM Foley's
JCPenney
Mervyn's
Montgomery Ward
Entertainment Complex
Tower Shops at 122,000 50% 73% Rainforest Cafe Summer 1996 Phase I $42
Stratosphere Stratosphere Casino (2) Fall 1996 Phase II
Las Vegas, NV
Ontario Mills 1,400,000 25% 74% AMC Theatres 11/96 $165
Ontario, CA Marshalls
Totally 4 Kids
Sports Authority
TJMaxx
Burlington
Bed Bath & Beyond
Mikasa
Off 5th-Saks Fifth
Avenue Outlet
JCPenney Outlet
American Wilderness
Experience
The Source 730,000 50% (3) Fortunoff 8/97 $145
Long Island, NY Nordstrom Rack
Off 5th-Saks Fifth
Avenue Outlet
Expansion of 250,000 55% 95% Virgin Records 9/97 $90
Forum Shops at FAO Schwarz
Caesars Palace Cheesecake Factory
Las Vegas, NV NikeTown
(1) As of May 1, 1996.
(2) Not a tenant per se; directly connected to the Tower Shops at Stratosphere.
(3) Leasing still in preliminary stage since project will not open until 1997.
</TABLE>
<PAGE>17
SIMON PROPERTY GROUP
Capital Expenditures
As of March 31, 1996
(In millions)
Joint Venture Properties
Consolidated SPG's
Properties Total Share
New Developments $11.2 $19.6 $10.1
Renovations and Expansions 7.9 0.1 -
Tenant Allowances-Retail 5.3 0.7 0.3
Tenant Allowances-Office 3.9(1) - -
Capital Expenditures
Recovered from Tenants 0.4 0.1 -
Other(2) 0.3 - -
Totals $29.0 $20.5 $10.4
(1)Includes $3.3 million in tenant improvements to be paid over a 7-year
period: $500,000/year from 1996 - 2000 and $400,000 to be paid in 2001 and
2002.
(2)Primarily represents capital expenditures not recovered from tenants.
<PAGE> 18
SIMON PROPERTY GROUP
Gains on Sales of Peripheral Land
As of March 31, 1996
(In millions)
Three Months Ended
March 31,
1996 1995
Consolidated Properties $0.3 $0.8
SPG's Share of Joint Venture Properties 0.8 0.1
---- ----
Totals $1.1 $0.9
==== ====
<PAGE> 19
SIMON PROPERTY GROUP
Teleconference Text
May 1, 1996
Good afternoon and welcome to our first quarter earnings teleconference.
I assume that all of you have copies of the press release issued this morning,
and in the interest of time, I will not go into the details included in that
release. Rather, I prefer to take this opportunity to discuss trends noted
during the quarter and to update you on the status of our planned merger with
DeBartolo Realty Corporation.
We adopted the new NAREIT FFO definition effective January 1, 1996. Funds from
Operations for the first quarter of 1996, under the new definition, were $0.51
per share. This represented an increase of 6.3% from the $0.48 per share for
the same period in 1995, restated to the new method. We were able to
accomplish this increase for the quarter in spite of a 9 million share increase
in our average number of shares and units outstanding which resulted primarily
from our add-on offering in April of 1995. FFO in gross dollars increased
16.1% to $48.7 million in the first quarter.
As we have noted previously, we expect the new definition to decrease 1996 FFO
by $0.10 or $0.11 per share. $0.07 of this is directly tied to IPO and public
company formation costs.
Had we reported under the old method, FFO would have been $0.54 per share for
the first quarter of 1996.
Let me now turn to some of the operational highlights of the first quarter:
Small shop occupancy at March 31 in the regional mall segment was down 1.3
percentage points to 83.0% from 84.3% one year earlier. The driving factor
behind this decline was bankruptcies. Bankruptcies caused occupied square
footage to decrease 400,000 square feet (2.2%) in the first quarter of 1996, as
compared to a loss of .9% in the first quarter of 1995. While we are somewhat
disappointed at the occupancy decline, there are 4 points I would like to
communicate to you:
1) The average base rent of those tenants lost due to bankruptcy was only
$13.54, a full 31% below the $19.70 average base rent of our mall portfolio,
and we firmly believe that the space will be re-leased at significantly higher
rents. First quarter 1995 base rent for new leases signed in the regional mall
properties was $21.45.
2) The square footage recaptured from bankruptcies was all very good "30 yard
line" space in primarily solid centers, and our leasing staff is quite
optimistic about the re-leasing effort. Approximately 151,000 square feet of
the space has already been executed or the leases are out for signature. We
believe that the vast majority of this space will be re-leased by year-end.
3) Looking to the remainder of 1996, we believe that our leasing activities
will recoup all of this occupancy shortfall. At 3/31 we had leases out for
signature for over 850,000 square feet of space in the regional mall portfolio,
excluding centers under development. Nearly 500,000 square feet of this space
represents new tenant square footage. Current leasing efforts also include the
integration of big box tenants into certain regional mall locations.
4) We are actively de-leasing two centers, Charles Towne Square and Southtown
Mall, in anticipation of de-malling these properties. The SPG regional mall
portfolio occupancy excluding these centers is 84.3%, as compared to the
reported 83.0%. This also contributed to 0.3% of the decline from quarter to
quarter.
There may be a little more retail fall-out in 1996 due to bankruptcies or
restructurings, but we think that we have dealt with the most significant
tenants in question. We are closely monitoring other tenants at this time, but
have not as yet had, nor do we have any reason to believe that in the near
future there will be, any material bankruptcies or store closings.
Average base rent at March 31, 1996 was $19.70 for the regional malls, up
$1.91, or 10.7%, from $17.79 at March 31, 1995. Excluding the impact of the
three malls opened in the fall of 1995 and Smith Haven Mall on Long Island
which was acquired in December of 1995, average base rent was $18.93, for a
6.6% increase over the 1995 level.
Utilizing the new standard ICSC definition of sales for regional malls which
excludes anchors, sales volume for the quarter was up 16.4%, to $766 million in
1996 from $658 million in the first quarter of 1995. Excluding the four new
centers, the volume was $688 million, for an increase of 4.4%. We view this as
a very positive trend, especially in light of the harsh winter experienced in
many parts of the country as well as the tenant loss due to bankruptcy.
Comparable sales on a per square foot basis within the regional mall portfolio
were up 7.6% over the first quarter of 1995. Smith Haven has skewed this
number upward because of its high sales per square foot. Excluding Smith
Haven, the increase is 5.8%. Strong growth was noted in the following tenant
categories within our portfolio: gifts, jewelry, shoes, mens and womens wear,
family wear, children's wear, and ladies' specialty.
There was also an improvement of $6 million in sales volume for mall and
freestanding stores at our properties located along the Texas border. Sales
growth in the first quarter of 1996 over first quarter of 1995 for these
properties was as high as 17.5%. In 1995, we experienced a $.02 decline in FFO
as a result of the Mexican peso devaluation, primarily as a result of lower
percentage rents at those five properties. Although we are clearly not back to
pre-devaluation 1994 sales levels, we are encouraged by the improvement and
optimistic about the upward trending of sales for the remainder of 1996.
Development and Acquisition Activities
Let me turn now to development and acquisition activities of recent months:
SPG and The Gordon Company are developing The Tower Shops at Stratosphere, the
122,000 square foot retail complex at The Stratosphere. The Stratosphere is a
major casino and hotel complex featuring attractions and shops, majority owned
by Grand Casinos, Inc. The Tower Shops at Stratosphere will give visitors
access to specialty restaurants such as The Rain Forest Cafe, a child-care and
entertainment center, retail and gift shops and other amusements.
The 1,149-foot Stratosphere Tower, with a roller coaster above and casinos
beneath, is expected to be a major draw for tourists in Las Vegas. The Tower
Shops is strategically situated to capitalize on traffic to and from
Stratosphere attractions.
The Tower Shops is scheduled to open in two phases: the 70,000-square-foot
phase I opening is planned for the summer of 1996 and the 52,000-square-foot
phase II opening is planned for October 1996, at a total anticipated cost of
approximately $40 million. SPG owns 50% of the joint venture and will develop,
manage and lease the project. We expect The Tower Shops to be fully leased by
the end of 1996, at pro forma rents approaching $100 per square foot. Our
current pro forma projects an unlevered return approaching 20% for this
project.
On February 2, we broke ground on The Source, a 730,000-square-foot value-
oriented retail center scheduled to open in 1997 in Westbury, Long Island. SPG
owns 50% of this joint venture which has a projected development cost of $145
million. Our partner is Fortunoff who has a 200,000 square-foot existing store
generating $165 million in annual sales volume which will be incorporated into
the center.
Construction of the infrastructure has commenced and during the first quarter
we closed on the financing for the expansion of The Forum Shops at Caesars.
This 250,000 square foot addition is nearly 100% leased or committed and has a
projected opening in 1997.
We have begun demolition of the existing Bakery Centre in South Miami, Florida
in preparation for the development of The Shops at Sunset Place. We are
continuing pre-development efforts for this 550,000-square-foot retail and
entertainment center.
Progress continues on Cottonwood Mall in Albuquerque, New Mexico, a 1.1 million
square-foot super-regional mall scheduled to open on July 31. The small shops
are approximately 85% leased and committed at this 100% SPG-owned project which
will include a theater and entertainment complex.
Ontario Mills near Los Angeles, a joint venture development with The Mills
Corporation, is scheduled to open this November. It is over 75% leased and
committed. SPG owns 25% of this project.
In March a venture was formed between Taubman, Mills and SPG to jointly develop
one value-oriented retail project in the Phoenix market. SPG conceived a
strategy which permitted the combination of the three companies who will now
work together to ensure the developement of a single, 1.2 million square foot
"Mills" type project. The project, to be known as Arizona Mills, will be
located in Tempe on the site previously controlled by Taubman. SPG will own
25% of this project which has an anticipated opening in late 1997.
On the acquisition front, in April, SPG acquired the remaining third party
ownership interest in Ross Park Mall, a 1.3 million square foot super-regional
mall in Pittsburgh, Pennsylvania. The acquisition price was $44 million plus
the assumption of the joint venture partner's share of existing debt. A $54
million mortgage on the property was retired concurrent with the acquisition.
Funds from SPG's unsecured line of credit were utilized for these transactions.
Since its opening in 1986, Ross Park Mall has been the dominant mall in its
trade area. It is one of the best-performing malls in the SPG portfolio. In
1995, mall sales per square foot approached $400, and at March 31, 1996 the
mall stores were 96% leased. The acquisition is accretive to SPG annual FFO.
SPG/EJD Merger
We are progressing nicely on the merger of Simon Property Group and DeBartolo
Realty Corporation on several fronts:
-We plan to file certain materials with the SEC within the next few days.
-It has been determined that no Hart Scott Rodino filings are necessary for
the merger of the REITs or the combination of our respective Operating
Partnerships. However, a filing is required for our acquisition of DeBartolo's
affiliated management company. This filing will be made with the FTC shortly.
-Several strategy sessions have been conducted between the two companies'
related departments, such as Leasing, Development and Management Information
Systems. Our leasing staffs are coordinating their efforts at ICSC to maximize
all leasing opportunities.
-Senior management continues to meet regularly to develop and implement the
plan for combining the two companies.
-We are developing a better understanding of each other's portfolios and
core business strategies and formulating a means for the identification of
"best business practices" of each organization.
We are still on track for a summer closing, pending approval of the
shareholders of both companies and customary regulatory and other conditions.
The response to our planned merger has been overwhelmingly positive. We remain
convinced of the viability and profitability of the transaction and look
forward to its speedy completion.
This concludes my prepared remarks for this conference call. We are now ready
to take questions from the participants.
<PAGE> 20
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