SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) :
November 20, 1997
SIMON DeBARTOLO GROUP, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-12618 35-1901999
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
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 November 20, 1997 the Registrant made available additional
ownership and operation information concerning the Registrant, Simon
DeBartolo Group, L.P., Simon Property Group, L.P. and properties owned
or managed as of September 30, 1997, 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 September 30, 1997
<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: November 20, 1997
SIMON DeBARTOLO GROUP, INC.
By: /s/ Stephen E. Sterrett
Stephen E. Sterrett,
Treasurer
<PAGE> 03
SIMON DeBARTOLO GROUP
SUPPLEMENTAL INFORMATION
Table of Contents
As of September 30, 1997
Information Page
Overview 5
Ownership Structure 6-8
Reconciliation of Net Income to
Funds from Operations ("FFO") 9
Selected Financial Information 10-11
Portfolio GLA, Occupancy & Rent Data 12
Rent Information 13
Lease Expirations 14-15
Scheduled Debt Amortization and Maturities 16
Summary of Indebtedness 17
Summary of Indebtedness by Maturity 18-23
Summary of Variable Rate Debt and Interest Rate
Protection Agreements 24-25
New Development Activities 26
Renovation/Expansion Activities 27-28
Capital Expenditures 29
Gains on Sales of Peripheral Land 30
Teleconference Text - November 7, 1997 31-40
<PAGE> 04
SIMON DeBARTOLO GROUP
Overview
The Company
Simon DeBartolo Group, Inc. (the "Company" or "SDG") (NYSE:SPG) was
created as a result of the merger (the "Merger") on August 9, 1996, of
DeBartolo Realty Corporation ("DRC") into Simon Property Group, Inc.
("SPG").
Through its majority owned subsidiaries, Simon DeBartolo Group, L.P. and
Simon Property Group, L.P. (collectively, the "Operating Partnership"),
at September 30, 1997, the Company owned or had an interest in 200
properties which consist of existing regional malls, community shopping
centers and specialty and mixed-use properties containing an aggregate
of 128 million square feet of gross leasable area (GLA) in 33 states.
The Company, together with its affiliated management companies, owned or
managed approximately 144 million square feet of GLA in retail and mixed-
use properties.
On September 29, 1997, the Operating Partnership acquired interests in
12 regional malls and one community center comprising 12 million square
feet of GLA (the "RPT properties") as a result of the acquisition of The
Retail Property Trust.
This package was prepared to provide (1) ownership information, (2)
certain operational information, and (3) debt information as of
September 30, 1997, for the Company and the Operating Partnership.
Certain statements contained in this Supplemental Package may constitute
"forward-looking statements" made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Investors are
cautioned that forward-looking statements involve risks and
uncertainties which may affect the business and prospects of the Company
and the Operating Partnership, including the risks and uncertainties
discussed in other periodic filings made by the Company and the
Operating Partnership with the Securities and Exchange Commission.
We hope you find this Supplemental Package beneficial. Any questions,
comments or suggestions should be directed to: Shelly J. Doran,
Director of Investor Relations-Simon DeBartolo Group, P.O. Box 7033,
Indianapolis, IN 46207 (317) 685-7330.
<PAGE> 05
SIMON DeBARTOLO GROUP
ECONOMIC OWNERSHIP STRUCTURE(1)
September 30, 1997
SIMON DeBARTOLO GROUP, L.P. and Simon Property Group, L.P.
(the "Operating Partnership")
Total Common Shares and Units Outstanding = 164,673,493
Operational Assets:
-------------------
124 Regional Malls
66 Community Shopping Centers
10 Specialty and Mixed-Use Properties
Partners: %
--------- --
Simon DeBartolo Group, Inc.
Public Shareholders 60.7%
Simon Family 2.1%
DeBartolo Family 0.0%
Executive Management 0.2%
-----
63.0%
-----
Limited Partners of Simon
Simon Family 21.0%
DeBartolo Family 13.5%
Other Limited Partners 2.4%
Executive Management 0.1%
-----
37.0%
-----
100.0%
Simon DeBartolo Group, Inc. (the "Company")(2)
63.0% General Partner of Operating Partnership
Common Shareholders Shares %
------------------- --------- --
Public Shareholders 99,935,795 96.4%
Simon Family 3,329,821 3.2%
DeBartolo Family 24,832 0.0%
Executive Management 373,397 0.4%
---------- ------
103,663,845 100.0%
Limited Partners ("Limited Partners")
37.0% Limited Partners of Operating Partnership
Unitholders Units %
----------- ----- --
Simon Family 34,584,455 56.7%
DeBartolo Family 22,207,888 36.4%
Executive Management 153,498 0.2%
Other Limited Partners 4,063,807 6.7%
---------- ------
61,009,648 100.0%
(1) Schedule excludes preferred stock: 4 million shares of Series A
issued on 10/27/95, 8 million shares of Series B issued on 9/27/96, and
3 million shares of Series C issued on 7/9/97.
(2) General partner of Simon DeBartolo Group, L.P. and Simon Property
Group, L.P.
<PAGE> 06
SIMON DeBARTOLO GROUP
Changes in Common Stock and Unit Ownership
For the Period from December 31, 1996 through September 30, 1997
Operating
Partnership Company
Units(1) Common Shares
Number Outstanding at December 31, 1996 60,974,050 96,880,415
Award of Restricted Stock
(Stock Incentive Program) - 458,884
Issuance of Units in connection
with West Town Mall acquisition 35,598 -
Issuance of Stock in connection
with acquisition of Dadeland Mall - 658,707
Public Stock Offerings - 5,247,000
Issuance of Stock in connection with the Merger - 82,484
Issuance of Stock for Employee and Director
Stock Option Exercises - 336,355
Number Outstanding at September 30, 1997(2) 61,009,648 103,663,845
Total Common Shares and Units Outstanding at
September 30, 1997: 164,673,493(2)
(1) Excludes units owned by the Company (shown here as Company Common
Shares).
(2) Excludes preferred units relating to preferred stock outstanding
(see Schedule of Preferred Stock).
<PAGE> 07
SIMON DeBARTOLO GROUP
Preferred Stock Outstanding
($ in 000's)
Number of
$ Shares
Outstanding as of September 30, 1997
Series A Convertible Preferred
- private placement completed
on October 27, 1995(1) $100,000 4,000,000
Series B Cumulative Redeemable Preferred
- public offering completed
on September 27, 1996(2) $200,000 8,000,000
Series C Cumulative Redeemable Preferred
- public offering completed on $150,000 3,000,000
July 9, 1997(3) -------- ----------
$450,000 15,000,000
(1) Dividends are paid quarterly at the greater of 8.125% per annum or
the dividend rate payable under the underlying common stock. Holders
have the right to convert the stock into common stock after October 27,
1997 at an initial conversion ratio equal to 0.9524. The Company may
redeem the stock after five years upon payment of premiums that decline
to $25.00 per share over the following seven years. Holders are
entitled to vote on all matters submitted to a vote of the holders of
common stock. Simon DeBartolo Group, Inc. contributed the proceeds to
the Operating Partnership in exchange for preferred Units. The
Operating Partnership pays a preferred distribution to the Company equal
to the dividends paid on the preferred stock. On November 11, 1997, the
Company issued 3,809,523 shares of common stock upon the conversion of
all outstanding shares of the Series A preferred stock.
(2) Dividends are paid at 8.75% per annum. The Company may redeem the
stock on or after September 29, 2006. The shares are not convertible
into any other securities of the Company. Simon DeBartolo Group, Inc.
contributed the proceeds to the Operating Partnership in exchange for
preferred Units. The Operating Partnership pays a preferred
distribution to the Company equal to the dividends paid on the preferred
stock. The shares are traded on the New York Stock Exchange. The
closing price on September 30, 1997, was $26.75.
(3) The Cumulative Step-Up Premium Rate Preferred Stock was issued at
7.89%. Beginning October 1, 2012, the rate increases to 9.89%. The
shares are redeemable after September 30, 2007. The shares are not
convertible into any other securities of the Company. The Company
contributed the proceeds of the offering to the Operating Partnership in
exchange for preferred units, the economic terms of which are
substantially identical to the Series C preferred stock.
<PAGE> 08
SIMON DeBARTOLO GROUP
Reconciliation of Net Income to
Funds From Operations ("FFO") (1)
As of September 30, 1997
(Amounts in thousands, except per share data)
Nine Months Ended
September 30,
The Operating Partnership 1997 1996
- ------------------------- --------- ----------
Income of the Operating Partnership before
Extraordinary Items $153,161 $76,639
Plus: Depreciation and Amortization from
Consolidated Properties 127,667 88,507
Less: Minority Interest Portion of
Depreciation and Amortization and
Extraordinary Items (3,486) (2,251)
Plus: SDG's Share of Depreciation,
Amortization and Extraordinary Items from
Unconsolidated Affiliates 28,005 9,725
Less: Preferred Dividends (21,914) (6,286)
Plus: Merger Integration Costs - 7,236
Less: Gains on the Sales of Real Estate (20) (88)
--------- ----------
Funds from Operations of the Operating
Partnership $283,413 $173,482
Percent Increase 63.4%
Weighted Average Common Shares and Units
Outstanding 158,752 107,607
FFO per Share/Unit $1.79 $1.61
Percent Increase 11.2%
The Company
- -----------
FFO Allocable to the Company $174,581 $106,223
Percent Increase 64.4%
Weighted Average Common Shares Outstanding 97,766 65,833
FFO per Share $1.79 $1.61
Percent Increase 11.2%
Distributions per Common Share/Unit $1.5025 $1.1365 (2)
(1) FFO amounts were calculated in accordance with the National Association of
Real Estate Investment Trust's revised definition of FFO. Please see
detailed discussion of FFO in the Company's December 31, 1996, Form 10-K.
(2) Includes $0.1515 special distribution paid in connection with the Merger
of SPG and DRC, resulting in change in distribution payment cycle.
The regular quarterly distribution remained at $0.4925 per share/unit.
The distribution for the 3rd quarter was declared on October 10, 1996,
payable on November 22, 1996.
<PAGE> 09
SIMON DeBARTOLO GROUP
Selected Financial Information
As of September 30, 1997
(In thousands, except as noted)
As of or for the
Nine Months Ended
September 30,
1997 1996 % Change
Financial Highlights(1) ---- ---- --------
- ----------------------
Total Revenues - Consolidated
Properties $ 747,252 $485,640 53.9%
Total EBITDA of Portfolio Properties $ 649,514 $390,156 66.5%
EBITDA After Minority Interest $ 520,615 $313,201 66.2%
Net Income Available to Common
Shareholders Before Extraordinary
Items $ 80,683 $ 42,998 87.6%
Net Income Available to Common
Shareholders per Share Before
Extraordinary Items $ 0.83 $ 0.65 27.7%
Funds from Operations of the Operating
Partnership $ 283,413 $173,482 63.4%
Funds from Operations Allocable to the
Company $ 174,581 $106,223 64.4%
Funds from Operations per Common Share $ 1.79 $ 1.61 11.2%
Common Stock Distributions, per Common
Share $ 1.5025 $ 1.13657 -
Operational Statistics(8)
Occupancy at End of Period:
Regional Malls (3) 86.0% 84.3% 1.7%
Community Shopping Centers (4) 93.1% 92.1% 1.0%
Average Base Rent per Square Foot:
Regional Malls (3) $ 21.82 $ 20.18 8.1%
Community Shopping Centers (4) $ 7.78 $ 7.49 3.9%
Total Tenant Sales Volume, in
millions: (2)(5)
Regional Malls (6) $ 4,541 $ 4,313 5.3%
Community Shopping Centers (4) $ 990 $ 1,018 -2.8%
Number of Properties Open at End of
Period 200 183 9.3%
(1) Not adjusted to give effect to the Merger prior to August 9, 1996.
(2) Based upon the business and properties of SPG and DRC on a combined
basis to give effect to the Merger for all periods reported.
(3) Includes mall and freestanding stores.
(4) Includes all Owned GLA.
(5) Represents only those tenants who report sales.
(6) Based upon the standard definition of sales for regional malls adopted
by the International Council of Shopping Centers which includes
only mall and freestanding stores.
(7) Includes $0.1515 special distribution paid in connection with
the Merger of SPG and DRC, resulting in change in distribution payment
cycle. The regular quarterly distribution remained at $0.4925 per
share/unit. The distribution for the 3rd quarter was declared on
October 10, 1996, payable on November 22, 1996.
(8) Operating statistics do not include the impact of the RPT
properties.
<PAGE> 10
SIMON DeBARTOLO GROUP
Selected Financial Information
As of September 30, 1997
(In thousands, except as noted)
September 30, September 30,
Equity Information 1997 1996
- ------------------ ------------- --------------
Units Outstanding at End of Period 61,009 60,502
Common Shares Outstanding at End of
Period 103,664 96,507
------------- --------------
Total Common Shares and Units
Outstanding at End of Period 164,673 157,009
============= ==============
Weighted Average Units Outstanding for
the Period 60,986 41,774
Weighted Average Common Shares
Outstanding for the Period 97,766 65,883
------------- --------------
Weighted Average Common Shares and
Units Outstanding for the Period 158,752 107,607
============= ==============
September 30, December 31,
Selected Balance Sheet Information 1997 1996
- ---------------------------------- ------------- --------------
Total Assets $ 7,414,360 $ 5,895,910
Consolidated Debt $ 4,720,885 $ 3,681,984
SDG Share of Joint Venture Debt $ 681,671 $ 448,218
Debt-to-Market Capitalization
- -----------------------------
Common Stock Price at End of Period $ 33.00 $ 31.00
Equity Market Capitalization (1) $ 5,884,225 $ 5,193,488
Total Capitalization - Consolidated
Debt Only $ 10,605,110 $ 8,875,472
Debt-to-Market Capitalization -
Consolidated Only 44.5% 41.5%
Total Capitalization - Including SDG
Share of JV Debt (millions) $ 11,286,781 $ 9,323,690
Debt-to-Market Capitalization -
Including SDG Share of JV Debt 47.9% 44.3%
(1) Market value of Common Stock and Units plus book value of Preferred
Stock.
<PAGE> 11
SIMON DeBARTOLO GROUP
Portfolio GLA, Occupancy & Rent Data
As of September 30, 1997
Avg.
Annualized
Base Rent
% of Owned Per Leased
Type of Total % of GLA Which Sq. Ft. of
Property GLA-Sq. Ft. Owned GLA Owned GLA is Leased Owned GLA
Regional Malls
- -Anchor 60,078,707 19,854,923 26.4% 97.5% $3.27
- -Mall Store 32,981,338 32,981,340 43.9% 85.8% 22.23
- -Freestanding 1,645,042 801,297 1.1% 95.0% 7.16
---------- ----------
Subtotal 34,626,380 33,782,637 45.0% 86.0% 21.82
Regional Mall
Total 94,705,087 53,637,560 71.4% 90.3% $14.24
Community Shopping
Centers
- -Anchor 10,893,126 6,725,517 9.0% 95.7% $6.35
- -Mall Store 3,625,909 3,544,819 4.7% 87.7% 10.81
- -Freestanding 785,812 291,173 0.4% 98.6% 7.42
Community Ctr.
Total 15,304,847 10,561,509 14.1% 93.1% $7.78
Office Portion of
Mixed-Use
Properties 2,000,967 2,000,967 2.7% 96.9% $18.84
Mills-type
Properties and
Other 3,129,194 1,848,484 2.4%
RPT Properties 12,571,677 7,053,599 9.4%
GRAND TOTAL 127,711,772 75,102,119 100.0%
Occupancy History(5)
Community
As of Regional Malls(1) Shopping Centers(2)
9/30/97 86.0% 93.1%
9/30/96 84.3% 92.1%
12/31/96 84.7% 91.6%
12/31/95(3) 85.5% 93.6%
12/31/94(3) 85.6% 93.9%
12/31/93(3) 85.9% (4)
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
(3) On a pro forma combined basis giving effect to the Merger with DRC
for periods presented.
(4) Information not available as community shopping center statistics
for the properties formerly owned by DRC were not calculated prior
to 1994.
(5) Excludes RPT properties.
<PAGE> 12
SIMON DeBARTOLO GROUP
Rent Information(1)
As of September 30, 1997
Average Base Rent
Mall & Freestanding
Stores at % Community %
As of Regional Malls Change Shopping Centers Change
- ----- --------------------- -------- ---------------- ------
9/30/97 $21.82 8.1% $7.78 3.9%
9/30/96 20.18 - 7.49 -
12/31/96 20.68 7.8 7.65 4.9
12/31/95(2) 19.18 4.4 7.29 2.4
12/31/94(2) 18.37 3.8 7.12 N/A
12/31/93(2) 17.70 5.0 N/A N/A
Rental Rates
Base Rent (3)
Store Openings Store Closings Amount of Change
-------------- ------------- ----------------
Year During Period During Period Dollar Percentage
- ---- -------------- ------------- ------ ----------
Regional Malls:
1997 (YTD) $30.60 $20.45 $10.15 49.6% (4)
1996 23.59 18.73 4.86 24.9
Community Shopping Centers:
1997 (YTD) $8.33 $9.58 ($1.25) (13.0)%
1996 8.18 6.16 2.02 32.8
(1) Excludes RPT properties.
(2) On a pro forma combined basis giving effect to the Merger with DRC
for periods presented.
(3) Represents the average base rent in effect during the period for
those tenants who signed leases as compared to the average base rent
in effect during the period for those tenants whose leases
terminated or expired.
(4) Reflects the acquisition of Dadeland Mall and the openings of The
Source and the expansion of The Forum Shops. Excluding these
events, the spread was $2.85, or a 13.9% increase.
<PAGE> 13
SIMON DeBARTOLO GROUP
Lease Expirations(1)(2)
As of September 30, 1997
Number of Square Avg. Base Rent
Year Leases Expiring Feet per Square Foot
at 9/30/97
Regional Malls - Mall & Freestanding Stores
1997 (10/1 - 12/31) 148 207,571 29.21
1998 1,078 2,148,614 23.18
1999 1,099 2,408,751 23.20
2000 1,051 2,331,533 23.10
2001 943 2,350,029 21.02
2002 847 2,245,615 20.36
2003 737 2,018,584 23.21
2004 695 2,169,926 22.92
2005 666 2,342,168 20.84
2006 898 2,698,083 23.50
2007 574 1,638,987 26.03
--------------- -------------
TOTALS 8,736 22,559,861 $22.72
Regional Malls - Anchor Tenants
1997 (10/1 - 12/31) 1 202,812 1.22
1998 11 1,805,155 1.45
1999 12 1,620,140 1.74
2000 11 1,748,754 1.95
2001 11 1,644,947 2.09
2002 8 866,606 1.82
2003 5 617,254 3.69
2004 13 1,130,439 4.28
2005 9 1,177,471 2.73
2006 11 1,284,004 3.69
2007 5 484,095 2.61
-------------- -------------
TOTALS 97 12,581,677 $2.41
Community Centers - Mall Stores & Freestanding Stores
1997 (10/1 - 12/31) 12 47,336 7.05
1998 165 424,331 11.06
1999 162 481,188 11.10
2000 165 531,895 11.10
2001 121 404,552 11.09
2002 88 359,791 10.69
2003 37 217,319 10.27
2004 23 125,186 11.78
2005 26 176,877 10.29
2006 18 139,822 9.31
2007 8 101,785 8.23
--------------- -------------
TOTALS 825 3,010,082 $10.72
(1) Does not consider the impact of options that may be contained in leases.
(2) Excludes RPT properties.
<PAGE> 14
Community Centers - Anchor Tenants
1997 (10/1 - 12/31) 1 27,461 7.99
1998 2 63,195 4.59
1999 8 238,681 4.83
2000 7 266,438 5.13
2001 10 442,483 3.62
2002 7 255,618 6.32
2003 8 273,498 6.28
2004 8 201,992 7.09
2005 11 630,445 5.61
2006 9 520,910 5.77
2007 8 495,653 5.96
--------------- -------------
TOTALS 79 3,416,374 $5.56
(1) Does not consider the impact of options that may be contained in leases.
(2) Excludes RPT properties.
<PAGE> 15
Simon DeBartolo Group
Scheduled Debt Amortization and Maturities
As of September 30, 1997
(In thousands)
Scheduled Scheduled
Year Amortization Maturities Total
Consolidated
Mortgage Debt
1997 4,006 0 4,006
1998 17,146 301,880 319,026
1999 21,020 173,521 194,541
2000 23,246 263,496 286,742
2001 22,384 185,461 207,846
2002 19,959 299,473 319,432
2003 12,765 369,280 382,046
2004 8,386 565,883 574,269
2005 8,402 35,944 44,346
2006 7,253 112,159 119,412
Thereafter 9,512 217,609 227,121
$ 154,079 $2,524,706 $ 2,678,786
Corporate Credit
Facilities
1999 0 770,000 770,000
Unsecured Debt
1998 0 70,000 70,000
2000 0 63,000 63,000
2003 0 100,000 100,000
2004 0 250,000 250,000
2005 0 210,000 210,000
2006 0 250,000 250,000
Thereafter 0 330,000 330,000
Adjustment of
Indebtedness to
Fair Mkt Value, Net (900) 0 (900)
Total Consolidated Debt $ 153,179 $ 4,567,706 $ 4,720,885
Joint Ventures
Mortgage Debt
1997 993 5,989 6,982
1998 2,860 204,822 207,682
1999 3,104 60,244 63,348
2000 3,163 87,589 90,753
2001 5,522 210,517 216,039
2002 4,728 313,460 318,189
2003 3,792 172,444 176,236
2004 4,081 60,000 64,081
2005 1,443 313,971 315,414
2006 1,275 131,249 132,524
Thereafter 0 68,893 68,893
Total Joint Venture
Debt $ 30,961 $1,629,179 $ 1,660,140
<PAGE> 16
SIMON DeBARTOLO GROUP
Summary of Indebtedness
As of September 30, 1997
(In thousands)
<TABLE>
SDG's
Total Share of Weighted Avg
Indebtedness Indebtednes Interest
s Rate
<S> <C> <C> <C>
Consolidated Indebtedness
Mortgage Debt
Fixed Rate 2,206,355 2,116,125 7.60%
Capped to Maturity, Currently "In the 154,380 154,380 6.39%
Money"
Other Hedged Debt 181,000 142,763 6.14%
Floating Rate Debt 137,051 132,160 6.77%
Subtotal Mortgage Debt 2,678,786 2,545,428 7.40%
Unsecured Debt
Fixed Rate 990,000 990,000 7.03%
Capped to Maturity, Currently "In the 150,000 150,000 6.75%
Money"
Floating Rate Debt 903,000 903,000 6.44%
Subtotal Unsecured Debt 2,043,000 2,043,000 6.75%
Adjustment to Fair Market Value - Fixed (1,624) (1,624) N/A
Rate
Adjustment to Fair Market Value - 724 724 N/A
Variable Rate
Consolidated Mortgage and Other Notes 4,720,885 4,587,528 7.11%
Payable
Joint Venture Mortgage Indebtedness
Fixed Rate 922,020 406,523 7.95%
Debt Swapped to Maturity 125,000 50,000 7.77%
Other Hedged Debt 126,135 26,206 6.67%
Floating Rate Debt (1) 486,983 198,942 6.96%
Joint Venture Mortgage and Other Notes 1,660,138 681,671 7.60%
Payable
SDG's Share of Total Indebtedness 5,269,199 7.18%
(1) On October 8, 1997 a rate swap at 6.21% through maturity was obtained on $70 million of
Ontario Mills debt.
</TABLE>
<PAGE> 17
SIMON DeBARTOLO GROUP
Summary of Indebtedness
By Maturity
As of September 30, 1997
(In thousands)
<TABLE>
Weighted
SDG's Avg
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
Consolidated Indebtedness
Fixed Rate Mortgage Debt:
<S> <C> <C> <C> <C> <C>
White Oaks Mall - 55%/50% 3/1/98 7.70% 16,500 9,062
Ross Park Mall 8/15/98 6.14% 60,000 60,000
Subtotal 1998 76,500 69,062 6.34%
Great Lakes Mall - 2 3/1/99 7.07% 8,576 8,576
Ingram Park Mall - 2 11/1/99 9.63% 7,000 7,000
Ingram Park Mall - 1 12/1/99 8.10% 48,727 48,727
Barton Creek Square 12/30/99 8.10% 63,059 63,059
La Plaza Mall 12/30/99 8.25% 50,179 50,179
Subtotal 1999 177,541 177,541 8.15%
Windsor Park Mall - 1 6/1/00 8.00% 5,900 5,900
Trolley Square - 1 7/23/00 5.81% 19,000 17,100
North East Mall 9/1/00 10.00% 22,263 22,263
Bloomingdale Court 12/1/00 8.75% 29,009 29,009
Forest Plaza 12/1/00 8.75% 16,904 16,904
Fox River Plaza 12/1/00 8.75% 12,654 12,654
Lake View Plaza 12/1/00 8.75% 22,169 22,169
Lincoln Crossing 12/1/00 8.75% 997 997
Matteson Plaza 12/1/00 8.75% 11,159 11,159
Regency Plaza 12/1/00 8.75% 1,878 1,878
St. Charles Towne Plaza 12/1/00 8.75% 30,887 30,887
West Ridge Plaza 12/1/00 8.75% 4,612 4,612
White Oaks Plaza 12/1/00 8.75% 12,345 12,345
Subtotal 2000 189,777 187,877 8.61%
Biltmore Square 1/1/01 7.15% 27,739 27,739
Chesapeake Square 1/1/01 7.28% 49,819 49,819
Port Charlotte Town 1/1/01 7.28% 46,228 46,228
Center
Great Lakes Mall - 1 3/1/01 6.74% 53,657 53,657
Subtotal 2001 177,443 177,443 7.10%
Lima Mall - 1 3/1/02 7.12% 14,424 14,424
Lima Mall - 2 3/1/02 7.12% 4,805 4,805
Columbia Center 3/15/02 7.62% 42,997 42,997
Northgate Shopping Center 3/15/02 7.62% 80,287 80,287
Tacoma Mall 3/15/02 7.62% 93,938 93,938
Crossroads Mall 7/31/02 7.75% 41,440 41,440
North Riverside Park 9/1/02 9.38% 4,035 4,035
Plaza - 1
North Riverside Park 9/1/02 10.00% 3,668 3,668
Plaza - 2
Hutchinson Mall 10/1/02 8.44% 11,523 11,523
Subtotal 2002 297,117 297,117 7.69%
<PAGE> 18
Battlefield Mall 6/1/03 7.50% 49,990 49,990
South Park Mall 6/15/03 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 Mall 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
Markland Mall 12/15/03 6.74% 10,000 10,000
Midland Park Mall 12/15/03 6.31% 22,500 22,500
Miller Hill Mall 12/15/03 6.74% 34,500 34,500
Muncie Mall - 1 12/15/03 6.74% 24,000 24,000
Muncie Mall - 2 12/15/03 6.99% 20,000 20,000
North Towne Square 12/15/03 6.31% 23,500 23,500
Towne West Square 12/15/03 6.16% 40,250 40,250
Miami International Mall 12/21/03 6.91% 47,135 28,281
Subtotal 2003 400,873 382,019 6.72%
Forum - Class A-1 5/15/04 7.13% 90,000 51,763
Cielo Vista Mall - 2 7/1/04 8.13% 2,323 2,323
College Mall 7/1/04 7.00% 43,073 43,073
Greenwood Park Mall 7/1/04 7.00% 36,075 36,075
Tippecanoe Mall 7/1/04 8.45% 47,127 47,127
Towne East Square 7/1/04 7.00% 56,949 56,949
CMBS Loan - Fixed 11/1/04 7.18% 175,000 175,000
Component (1)
Subtotal 2004 450,547 412,310 7.26%
Melbourne Square 2/1/05 7.42% 39,945 39,945
Subtotal 2005 39,945 39,945 7.42%
Treasure Coast Mall 1/1/06 7.42% 54,129 54,129
Gulf View Square 10/1/06 8.25% 38,281 38,281
Paddock Mall 10/1/06 8.25% 30,446 30,446
Subtotal 2006 122,856 122,856 7.88%
Cielo Vista Mall - 1 5/1/07 9.38% 56,163 56,163
McCain Mall 5/1/07 9.38% 26,128 26,128
Valle Vista Mall 5/1/07 9.38% 34,605 34,605
University Park Mall 10/1/07 7.43% 59,500 35,700
Subtotal 2007 176,396 152,596 8.92%
Randall Park Mall 1/1/11 9.25% 33,469 33,469
Subtotal 2011 33,469 33,469 9.25%
Windsor Park Mall - 2 5/1/12 8.00% 8,952 8,952
Subtotal 2012 8,952 8,952 8.00%
Chesapeake Centre 5/15/15 8.44% 6,563 6,563
Grove at Lakeland Square, 5/15/15 8.44% 3,750 3,750
The
Terrace at Florida Mall, 5/15/15 8.44% 4,688 4,688
The
Subtotal 2015 15,001 15,001 8.44%
<PAGE> 19
Sunland Park Mall 1/1/26 8.63% 39,938 39,938
Subtotal 2026 39,938 39,938 8.63%
Total Consolidated Fixed
Rate Mortgage Debt 2,206,355 2,116,125 7.60%
Variable Rate Mortgage
Debt:
Eastland Mall 3/1/98 7.16% 30,000 30,000
Edison Mall (2) 3/19/98 6.31% 41,000 41,000
Eastgate Consumer Mall 12/31/98 6.50% 22,929 22,929
Riverway - 1 12/31/98 6.38% 85,571 85,571
Riverway - 2 12/31/98 6.38% 45,880 45,880
Subtotal 1998 225,380 225,380 6.48%
Jefferson Valley Mall 1/12/00 6.21% 50,000 50,000
Shops at Sunset Place, 6/30/00 6.91% 16,307 12,230
The
Trolley Square - 2 7/23/00 7.16% 4,641 4,177
Trolley Square - 3 7/23/00 7.16% 3,500 3,150
Subtotal 2000 74,448 69,557 6.43%
Crystal River 1/1/01 7.66% 16,000 16,000
Subtotal 2001 16,000 16,000 7.66%
Highland Lakes Center 3/1/02 7.16% 14,377 14,377
Mainland Crossing 3/31/02 7.16% 2,226 2,226
Subtotal 2002 16,603 16,603 7.16%
Forum - Class A-2 5/15/04 5.96% 85,000 48,887
Forum - Class A-3 5/15/04 5.96% 5,000 2,876
CMBS Loan - Floating 11/1/04 6.03% 50,000 50,000
Component (1)
Subtotal 2004 140,000 101,763 5.99%
Total Variable Rate 472,431 429,303 6.43%
Mortgage Debt
Total Consolidated 2,678,786 2,545,428 7.40%
Mortgage Debt
Fixed Rate Unsecured
Debt:
SDG, LP (PATS) 11/15/03 6.75% 100,000 100,000
Subtotal 2003 100,000 100,000 6.75%
SDG, LP (Bonds) 7/15/04 6.75% 100,000 100,000
Subtotal 2004 100,000 100,000 6.75%
SCA (Bonds) (2) 5/15/05 7.67% 110,000 110,000
SDG, LP (MTN) 6/24/05 7.13% 100,000 100,000
Subtotal 2005 210,000 210,000 7.41%
<PAGE> 20
SDG, LP (Bonds) 11/15/06 6.88% 250,000 250,000
Subtotal 2006 250,000 250,000 6.88%
SDG, LP (MTN) 9/20/07 7.13% 180,000 180,000
Subtotal 2007 180,000 180,000 7.13%
SDG, LP (Bonds) 7/15/09 7.00% 150,000 150,000
Subtotal 2009 150,000 150,000 7.00%
Total Unsecured Fixed 990,000 990,000 7.03%
Rate Debt
Variable Rate Unsecured
Debt:
SDG, L.P. Unsecured Loan 9/25/98 6.41% 70,000 70,000
Subtotal 1998 70,000 70,000 6.41%
Corporate Credit Facility-1 9/27/99 6.41% 480,000 480,000
Corporate Credit Facility-2 9/27/99 6.41% 275,000 275,000
SCA Corporate Credit
Facility - 3 (2) 12/23/99 8.50% 15,000 15,000
Subtotal 1999 770,000 770,000 6.45%
SDG, L.P. Unsecured Loan 1/31/00 6.41% 63,000 63,000
Subtotal 2000 63,000 63,000 8.50%
SCA (Bonds) (2) 1/15/04 6.75% 150,000 150,000
Subtotal 2004 150,000 150,000 6.75%
Total Unsecured Variable 1,053,000 1,053,000 6.49%
Rate Debt
Total Unsecured Debt 2,043,000 2,043,000 6.75%
Adjustment to Fair Market
Value - Fixed Rate (1,624) (1,624) N/A
Adjustment to Fair Market
Value - Variable Rate 724 724 N/A
Total Consolidated Debt 4,720,886 4,587,528 7.1134%
Joint Venture
Indebtedness
Fixed Rate Mortgage Debt:
Century III Mall - 2 12/1/97 7.00% 89 45
Subtotal 1997 89 45 7.00%
Northfield Square 4/1/00 9.52% 24,397 24,397
Coral Square 12/1/00 7.40% 53,300 26,650
Subtotal 2000 77,697 51,047 8.41%
<PAGE> 21
Fox Valley Center (2) 6/1/02 8.67% 47,500 23,750
River Oaks Center (2) 6/1/02 8.67% 32,500 16,250
Palm Beach Mall 12/15/02 8.21% 51,571 25,786
Subtotal 2002 131,571 65,786 8.49%
Avenues, The 5/15/03 8.36% 58,577 14,644
Century III Mall - 1 7/1/03 6.78% 66,000 33,000
Lakeland Square 12/22/03 7.26% 53,090 26,545
Subtotal 2003 177,667 74,189 7.26%
Westchester, The (2) 9/1/05 8.74% 153,500 76,750
Cobblestone Court 11/30/05 7.22% 6,180 2,163
Crystal Court 11/30/05 7.22% 3,570 1,250
Fairfax Court 11/30/05 7.22% 10,320 2,709
Gaitway Plaza 11/30/05 7.22% 7,350 1,715
Plaza at Buckland Hills, 11/30/05 7.22% 17,680 6,055
The
Ridgewood Court 11/30/05 7.22% 7,980 2,793
Royal Eagle Plaza 11/30/05 7.22% 7,920 2,772
Village Park Plaza 11/30/05 7.22% 8,960 3,136
West Town Corners 11/30/05 7.22% 10,330 2,411
Westland Park Plaza 11/30/05 7.22% 4,950 1,155
Willow Knolls Court 11/30/05 7.22% 6,490 2,272
Yards Plaza, The 11/30/05 7.22% 8,270 2,895
Seminole Towne Center 12/27/05 6.88% 70,500 31,725
Subtotal 2005 324,000 139,800 7.98%
Great Northeast Plaza 6/1/06 9.04% 17,845 8,923
Smith Haven Mall 6/1/06 7.86% 115,000 28,750
Subtotal 2006 132,845 37,673 8.14%
Lakeline Mall 5/1/07 7.65% 73,785 36,893
Subtotal 2007 73,785 36,893 7.65%
Ontario Mills - 4 (4) 12/28/09 0.00% 4,366 1,092
Subtotal 2009 4,366 1,092 0.00%
Total Joint Venture Fixed
Rate Mortgage Debt 922,020 406,523 7.95%
Variable Rate Mortgage
Debt:
Aventura Mall - 2 12/97 6.76% 5,900 1,967
Subtotal 1997 5,900 1,967 6.76%
Aventura Mall - 3 1/8/98 8.50% 29,822 9,941
Aventura Mall - 1 8/8/98 6.62% 100,000 33,333
Florida Mall, The 12/1/98 6.28% 75,000 37,500
Subtotal 1998 204,822 80,774 6.69%
<PAGE> 22
Tower Shops, The (3) 3/13/99 7.66% 15,755 7,878
Indian River Commons (5) 3/29/99 6.91% 6,792 3,396
Indian River Mall (5) 3/29/99 6.91% 37,697 18,849
Subtotal 1999 60,244 30,122 7.10%
Lakeline Plaza - 2 6/6/00 6.03% 10,500 5,250
Subtotal 2000 10,500 5,250 6.03%
Grapevine Mills (6) 4/25/01 7.31% 35,430 13,286
Source, The 7/16/01 7.36% 100,087 50,044
Hawthorn Center (2) 9/1/01 7.90% 25,000 12,500
Orland Square (2) 9/1/01 7.90% 50,000 25,000
Subtotal 2001 210,517 100,830 7.55%
Arizona Mills 2/1/02 6.96% 66,135 17,404
Ontario Mills - 1 (3) 5/7/02 7.37% 50,000 12,500
Ontario Mills - 2 (7) 5/7/02 6.66% 20,000 5,000
Ontario Mills - 3 (7) 5/7/02 6.91% 50,000 12,500
Subtotal 2002 186,135 47,404 7.02%
Circle Centre Mall 1/31/04 6.10% 60,000 8,802
Subtotal 2004 60,000 8,802 6.10%
Total Joint Venture
Variable Rate Debt 738,118 275,148 7.08%
Total Joint Venture Debt 1,660,138 681,671 7.60%
SDG's Share of Total 6,381,024 5,269,199 7.18%
Indebtedness
(1) New CMBS secured by six former DRC properties and West Ridge Mall.
(2) Represents debt assumed in connection with the acquisition of the RPT properties.
(3) Two one-year options exist to extend maturity.
(4) Notes for purchase of land from Ontario Redevelopment Agency at 6% commencing January
2000.
(5) On October 14, 1997, center permanently financed at fixed rate of 7.58% maturing
November 1, 2004.
(6) Grapevine Mills LIBOR spread reduced from .165% to .150% effective November 20, 1997.
(7) LIBOR was swapped through maturity at 6.21% effective October 8, 1997. Two one-year
options exist to extend maturity.
</TABLE>
<PAGE> 23
SIMON DeBARTOLO GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of September 30, 1997
(In thousands)
<TABLE>
Principal SDG SDG's Interest
Property Name Maturity Balance Owner- Share of Rate Terms of Terms of Interest Rate Protection
Date 9/30/97 ship Loan 9/30/97 Variable Agreement
Balance Rate
Consolidated
Properties:
<S> <C> <C> <C> <C> <C> <S> <C> <S> <C> <S>
Secured Debt:
Eastland Mall 3/1/98 30,000 100.00% 30,000 7.16% LIBOR +
1.500%
Edison Mall 3/19/98 41,000 100.00% 41,000 6.31% LIBOR + LIBOR Capped at 8.35% through
.650% maturity
Eastgate 12/31/98 22,929 100.00% 22,929 6.50% LIBOR + LIBOR Capped at 5.00% through
Consumer Mal 1.500% maturity
Riverway - 1 12/31/98 85,571 100.00% 85,571 6.38% LIBOR + LIBOR Capped at 5.00% through
1.375% maturity
Riverway - 2 12/31/98 45,880 100.00% 45,880 6.38% LIBOR + LIBOR Capped at 5.00% through
1.375% maturity
Jefferson Valley 1/12/00 50,000 100.00% 50,000 6.21% LIBOR + LIBOR Capped at 8.70% through
Mall .550% maturity
Shops at Sunset 6/30/00 16,307 75.00% 12,230 6.91% LIBOR +
Place, The 1.250%
Trolley Square - 7/23/00 4,641 90.00% 4,177 7.16% LIBOR +
2 1.500%
Trolley Square - 7/23/00 3,500 90.00% 3,150 7.16% LIBOR +
3 1.500%
Crystal River 1/1/01 16,000 100.00% 16,000 7.66% LIBOR +
2.000%
Highland Lakes 3/1/02 14,377 100.00% 14,377 7.16% LIBOR +
Center 1.500%
Mainland 3/31/02 2,226 100.00% 2,226 7.16% LIBOR +
Crossing 1.500%
Forum - Class A- 5/15/04 85,000 57.51% 48,887 5.96% LIBOR + LIBOR Capped at 9.50% through
2 .300% maturity
Forum - Class A- 5/15/04 5,000 57.51% 2,876 5.96% LIBOR + LIBOR Capped at 9.50% through
3 .300% maturity
CMBS Loan - 11/1/04 50,000 100.00% 50,000 6.03% LIBOR +
Floating .375%
Component
Total 472,431 429,303
Consolidated
Secured Debt
Unsecured Debt:
SDG, L.P. 9/25/98 70,000 100.00% 70,000 6.41% LIBOR +
Unsecured Loan .750%
SCA Corporate 12/23/99 15,000 100.00% 15,000 8.50% PRIME
Credit Facility
- - 3
Corporate Credit 9/27/99 480,000 100.00% 480,000 6.41% LIBOR +
Facility - 1 .750%
Corporate Credit 9/27/99 275,000 100.00% 275,000 6.41% LIBOR +
Facility - 2 .750%
SDG, L.P. 1/31/00 63,000 100.00% 63,000 6.41% LIBOR +
Unsecured Loan .750%
SCA (Bonds) 1/15/04 150,000 100.00% 150,000 6.75% Capped at 6.75% through maturity.
Total 1,053,000 1,053,000
Consolidated
Unsecured Debt
Adjustment of 724 724
Variable-Rate
Indebtedness to
FMV
Consolidated 1,526,155 1,483,027
Variable Rate
Debt
<PAGE> 24
Joint Venture
Properties:
Aventura Mall-3 8/1/97 29,822 33.33% 9,941 8.50% PRIME See Footnote (1)
Aventura Mall-2 8/7/97 5,900 33.33% 1,967 6.76% LIBOR +
1.100%
Aventura Mall-1 8/8/98 100,000 33.33% 33,333 6.62% Tokyo CD
Rate +
.900%
Florida Mall, 12/1/98 75,000 50.00% 37,500 6.28% Commerci
The al Paper
Rate +
.750%
Tower Shops, The 3/13/99 15,755 50.00% 7,878 7.66% LIBOR + Two one-year extensions exist to
2.000% extend maturity. See Footnote
(1).
Indian River 3/29/99 6,792 50.00% 3,396 6.91% LIBOR + Permanently financed at fixed rate
Commons 1.250% of 7.58% October 24, 1997.
Indian River 3/29/99 37,697 50.00% 18,849 6.91% LIBOR + Permanently financed at fixed rate
Mall 1.250% of 7.58% October 24, 1997.
Lakeline Plaza-2 6/6/00 10,500 50.00% 5,250 6.03% LIBOR +
.375%
Grapevine Mills 4/25/01 35,430 37.50% 13,286 7.31% LIBOR + Spread reduced from 1.65% to 1.50%
1.650% November 20, 1997.
Source, The 7/16/01 100,087 50.00% 50,044 7.36% LIBOR +
1.700%
Hawthorn Center 9/1/01 25,000 50.00% 12,500 7.90% LIBOR + LIBOR Swapped at 7.25% through
.650% maturity
Orland Square 9/1/01 50,000 50.00% 25,000 7.90% LIBOR + LIBOR Swapped at 7.25% through
.650% maturity
Arizona Mills 2/1/02 66,135 26.32% 17,404 6.96% LIBOR + LIBOR Capped at 9.50% through
1.300% maturity
Ontario Mills-1 5/7/02 50,000 25.00% 12,500 7.37% LIBOR + LIBOR Swapped at 6.37% through
1.000% maturity. See Footnote (1).
Ontario Mills-2 5/7/02 20,000 25.00% 5,000 6.66% LIBOR + A swap at 6.21% through maturity
1.000% was obtained on October 8, 1997.
Ontario Mills-3 5/7/02 50,000 25.00% 12,500 6.91% LIBOR + A swap at 6.21% through maturity
1.250% was obtained on October 8, 1997.
Circle Centre 1/31/04 60,000 14.67% 8,802 6.10% LIBOR + LIBOR Capped at 8.81% through
Mall .440% maturity
Total Joint
Venture 738,118 275,148
Properties
Total Variable
Mortgage and
Other 2,264,273 1,758,175
Indebtedness
Footnotes:
(1) Rate can be reduced based upon project performance.
(2) The following table summarizes variable rate debt:
Total SDG Share
Swapped debt 125,000 50,000
Capped debt "in the 304,380 304,380
money"
Other hedged 307,135 168,968
variable rate debt
Unhedged variable 1,527,758 1,234,827
rate debt
2,264,273 1,758,175
</TABLE>
<PAGE> 25
SIMON DeBARTOLO GROUP
New Development Activities
As of September 30, 1997
<TABLE>
Non-Anchor
SDG Actual/ Projected Sq. Footage
Mall/ Ownership Projected Cost Leased/ GLA
Location Percentage Opening (in millions) Committed (sq. ft.)
- ------------------ ------------ --------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C>
Projects Recently Opened
- ------------------------
The Source 50% 9/5/97 $153 90% 730,000
Long Island, NY (as of 11/5/97)
Anchors/Major Tenants: Fortunoff, Nordstrom Rack, Off 5th-Saks Fifth Avenue Outlet,
Cheesecake Factory, Rainforest Cafe, Just for Feet, Bertolini's,
Loehmann's, Old Navy, Virgin Megastore, Circuit City,
Brooklyn Diner, ABC Home Store, ABC Carpet Store
- --------------------------------------------------------------------------------------------
Projects Under Construction
- ---------------------------
Grapevine Mills 38% 10/30/97 $203 91% 1,500,000
Grapevine, TX (as of 11/5/97)
(Dallas/Ft. Worth)
Anchors/Major Tenants: Books-A-Million, Burlington Coat Factory, Off 5th-Saks, Fifth Avenue
Outlet, Group USA, Rainforest Cafe, Bed Bath & Beyond, AMC Theatres,
GameWorks, American Wilderness, Sports Authority, JCPenney Outlet,
Bernini Off Rodeo, Old Navy, Western Warehouse, Virgin Megastore,
Marshalls
- -----------------------------------------------------------------------------------------------
Arizona Mills 26% 11/20/97 $188 91% 1,200,000
Tempe, Arizona (as of 11/5/97)
Anchors/Major Tenants: Oshmans Supersport, Off 5th-Saks Fifth Avenue Outlet, Burlington
Coat Factory, Harkins Theater, Rainfores, Cafe, GameWorks,
Hi Health, JCPenney Outlet, Group USA, Linens 'N Things, IMAX,
Ross Dress for Less, American Wilderness, Virgin Megastore,
Marshalls
- -----------------------------------------------------------------------------------------------
Muncie Plaza 100% 4/98 $14 82% (1) 195,500
Muncie, IN (as of 11/11/97)
Anchors/Major Tenants: Kohl's, TJMaxx, OfficeMax, Shoe Carnival, Factory Card
- ------------------------------------------------------------------------------------------------
Shops at Sunset 75% 10/98 $149 86% 520,000
Place (as of 10/27/97)
South Miami, FL
Anchors/Major Tenants: AMC 24 Theatre, NIKETOWN, Barnes & Noble, IMAX Theatre, Virgin
Megastore, Z Gallerie, GameWorks
- ------------------------------------------------------------------------------------------------
Lakeline Plaza 50% Phase I - 5/98 $34 Phase I - 78%(1) 381,000
Austin, TX Phase II- 11/98 (as of 11/11/97)
Anchors/Major Tenants: Linens 'N Things, TJMaxx, Old Navy, Toys "R" Us, Office Max,
Party City
(1) Community Center leased/committed percentage includes owned anchor GLA.
<PAGE> 26
SIMON DeBARTOLO GROUP
Renovation/ Expansion Activities
As of September 30, 1997
Total
SDG Actual/ Projected Existing
Mall/ Ownership Anticipated Cost Year GLA
Location Percentage Completion (in millions) Built (sq. ft.)
- ------------------------- ------------ ---------------- ------------- ------- ----------
Projects Under Construction
- ---------------------------
Aventura Mall 33.3% 11/97(Bloomingdale's) $91 1983 987,000
Miami, FL 3/98 (All other)
(Expansion) 3/99 (Burdine's)
Scope of Construction: Additions of 252,000 sq. ft. Bloomingdale's, 225,000 sq. ft. Burdines,
255,000 sq. ft. of small shops, 77,950 sq. ft. AMC Theatre with 24
screens, new parking deck, Sears 37,000 sq. ft. expansion, Lord and
Taylor 28,000 sq. ft. expansion, JCPenney 60,000 sq. ft. expansion,
and Macy's 45,000 sq. ft. expansion
- -------------------------------------------------------------------------------------------------
Prien Lake Mall 100% 11/98 $30 1972 467,000
Lake Charles, LA
(Renovation/Expansion)
Scope of Construction: Addition of 157,000 sq. ft. Dillard's and 124,000 sq. ft. Sears,;
renovation of existing mall and JCPenney building and 68,000 sq. ft.
expansion of shops with food court
- ------------------------------------------------------------------------------------------------
The Florida Mall 50% Fall 1999 $85 1986 1,120,000
Orlando, FL
(Expansion)
Scope of Construction: Addition of 200,000 sq. ft. Burdines and 197,000 sq. ft. of shops with
expansions to Sears, JCPenney, Dillard's, and Gayfers
- --------------------------------------------------------------------------------------------------
Projects Under Development
- --------------------------
Mission Viejo Mall 100% Fall 1999 $150 1979 817,000
Mission Viejo, CA
(Renovation/Expansion)
Scope of Construction: Additions of 160,000 sq. ft. Nordstrom and two additional department stores,
130,000 sq. ft. of small shops, renovation with new food court, Macy's
60,000 sq. ft. expansion, Robinson-May 70,000 sq. ft. expansion
- ---------------------------------------------------------------------------------------------------------
North East Mall 100% Fall 2000 $110 1971 1,142,000
Hurst, TX
(Renovation/Expansion)
Scope of Construction: Additions of small shops, 160,000 sq. ft. Nordstrom and one additional
department store, expansions of Dillard's and JCPenney, renovations of
Sears and Montgomery Ward
- ---------------------------------------------------------------------------------------
</TABLE>
<PAGE> 27
SIMON DeBARTOLO GROUP
Other Renovation/Expansion Activities
Projects Under Construction as of September 30, 1997
SDG's
Project Name Location Scope of Project % Date
- -------------- -------------- -------------------------- ----- ------
Alton Square Alton, IL Addition of Sears and mall 100% 10/97
renovation
- -------------- -------------- -------------------------- ---- ------
Barton Creek Austin, TX Addition of Old Navy, 100% 3/98
Square Finish Line and cinema,
new food court and mall
renovation
- -------------- -------------- ------------------------- ---- ------
Charles Towne Charleston, SC Mall demolition and 100% 2/98
Square conversion to community
center; addition of Regal
Cinema and renovation of
Montgomery Ward
- -------------- -------------- -------------------------- ---- ------
Chautauqua Jamestown, NY Addition of JCPenney and 100% 11/97
Mall Bon Ton (scheduled to open
in 1998), new food court
and mall renovation
- -------------- -------------- ------------------------- ---- ------
Columbia Kennewick WA Addition of Barnes & Noble 100% 11/97
Center and ACT III Theater
- -------------- -------------- -------------------------- ---- ------
Crystal River Crystal River, Addition of Regal Cinema 100% 11/97
Mall FL
- -------------- -------------- -------------------------- ---- ------
Eastern Hills Buffalo, NY Phase I - Addition of 100% 3/98
Mall Burlington Coat
Phase II - Addition of 10/98
Silver Cinema
- -------------- -------------- -------------------------- ---- ------
Forest Mall Fond du Lac, Addition of Sears and 100% 3/98
WI Staples and mall
renovation
- -------------- -------------- -------------------------- ---- ------
Forest Village Forestville, Addition of cinema and 100% 11/98
Park Mall MD restaurants and mall
renovation
- -------------- -------------- -------------------------- ---- ------
Irving Mall Irving, TX Phase I - Addition of 100% 4/98
Barnes & Noble and Old
Navy
Phase II - Addition of 11/98
General Cinema
- -------------- -------------- -------------------------- ---- ------
Knoxville Knoxville, TN Regal Cinema expansion and 100% 11/97
Center mall renovation
(formerly East
Towne Mall)
- -------------- -------------- -------------------------- ---- ------
Northgate Mall Seattle, WA New food court and mall 100% 11/97
renovation
- -------------- -------------- -------------------------- ---- ------
Northwoods Peoria, IL Replace Montgomery Ward 100% Fall
Mall with Sears 1998
- -------------- -------------- -------------------------- ---- ------
Paddock Mall Ocala, FL New food court and mall 100% 11/97
renovation
- -------------- -------------- -------------------------- ---- ------
Port Charlotte Port Addition of Regal Cinema 100% 11/98
Towne Center Charlotte, FL
- -------------- -------------- -------------------------- ---- ------
Richardson Dallas, TX Addition of Steinmart and 100% 7/98
Square Mall Ross Dress for Less, new
food court and mall
renovation
- -------------- -------------- -------------------------- ---- ------
Richmond Richmond, IN Addition of Dillard's and 100% 11/97
Square mall renovation
- -------------- -------------- -------------------------- ---- ------
Smith Haven Long Island, Addition of Old Navy and 25% Summer
Mall NY theatre expansion and 1998
relocation
- -------------- -------------- -------------------------- ---- ------
Southern Park Youngstown, OH Small shop expansion, new 100% 11/97
Mall food court and mall
renovation
- -------------- -------------- -------------------------- ---- ------
Towne West Wichita, KS Addition of Petsmart 100% 9/98
Square
- -------------- -------------- -------------------------- ---- ------
Tyrone Square St. Addition of Borders, new 100% 5/98
Petersburg, FL food court and restaurants
and mall renovation
- -------------- -------------- -------------------------- ---- ------
Valle Vista Harlingen, TX Addition of OfficeMax 100% 5/98
Mall
- -------------- -------------- -------------------------- ---- ------
West Town Mall Knoxville, TN Addition of Regal Cinema 50% 5/98
and parking deck
- -------------- -------------- -------------------------- ---- ------
Windsor Park San Antonio, Addition of Burlington 100% 5/98
Mall TX Coat and cinema expansion
- -------------- -------------- -------------------------- ---- ------
(1) Total anticipated cost of the above projects is $200 million; SDG's
share is $190 million.
<PAGE> 28
SIMON DeBARTOLO GROUP
Capital Expenditures
For the Nine Months Ended September 30, 1997
(In millions)
Joint Venture Properties
Consolidated SDG's
Properties Total Share
Acquisitions $1,070.5 $352.0(1) $352.0
New Developments $60.0 $295.7 $124.9
Renovations and Expansions 131.1 48.3 18.8
Tenant Allowances-Retail 23.8 3.1 1.2
Tenant Allowances-Office .9 - -
Capital Expenditures
Recovered from Tenants 5.5 .4 .2
Other (2) 6.1 1.3 .6
------ ------ ------
Totals $1,297.9 $700.8 $497.7
======== ====== ======
(1) Represents the acquisitions of ownership interests in West Town
Mall ($70), Dadeland Mall ($128), and certain joint venture properties
included in the RPT acquisition ($154).
(2) Primarily represents capital expenditures not recovered from
tenants.
<PAGE> 29
SIMON DeBARTOLO GROUP
Gains on Sales of Peripheral Land
As of September 30, 1997
(In millions)
Nine Months Ended
September 30,
1997 1996(1)
Consolidated Properties $3.0 $1.0
SDG's Share of Joint
Venture Properties 2.2 1.6
---- ----
Totals $5.2 $2.6
===== =====
(1) Not adjusted to give effect to the Merger prior to August 9, 1996.
<PAGE> 30
Introduction (David Simon)
Welcome to our third quarter earnings conference call. We had another
great quarter, both in terms of our financial performance and the
activity level we are seeing on a number of fronts. What seems to get
lost sometimes when people look at our company is the multitude of
initiatives that SDG is involved in on all aspects of our business. I
don't believe there is another REIT that is capable of doing as many
things, creating value for their shareholders and growing their company,
as SDG is doing. During today's call, we will highlight many of the
initiatives. We may run just a bit longer than recent history, but I
believe it is important that you understand and get a feel for all the
great things that are happening with our Company. But before we get
into the detail, let me give a quick overview of third quarter
accomplishments.
* We grew FFO per share 12.3%, basically all generated without the
benefit of our recent acquisition activity in the third quarter of 1997.
* We acquired $1.4 billion real estate, including some of the
country's best malls.
* We opened two new projects and one significant expansion, adding
2.5 million square feet of GLA.
* We raised over $1 billion in well-timed capital market
transactions.
Financial and Operational Results (Steve Sterrett)
As you will recall, we acquired DeBartolo last August 9th, so this is
the last quarter that the comparison to prior year results aren't apples
to apples. DeBartolo operations are included only after August 9, 1996.
As the RPT acquisition was completed on September 29, 1997, it had no
impact on our third quarter results. For ease of comparison, we have
also excluded the RPT properties from all of our statistical
comparisons.
1. FFO of the Operating Partnership for the quarter was $102.2
million, an increase of 37.6% over the prior year.
2. The increase on a per share basis was 12.3%, to $0.64 a share
versus $0.57 in the prior year.
3. FFO of the Operating Partnership for the nine months was $283.4
million, an increase of 63.4% over the same period in 1996.
4. The increase on a per share basis was 11.2%, to $1.79 as compared
to a $1.61.
We are pleased with the level of growth which was fueled solely by
internal growth. A key element is the strong occupancy gains in both
the Simon and the former DeBartolo portfolios. Likewise, year to date
revenue from the cart and kiosk program in the DeBartolo portfolio is up
38% year to date, and should finish 1997 over $7 million above 1996
levels. Our total cart and kiosk program will gross over $65 million in
1997.
<PAGE> 31
In the overall portfolio:
1. Mall occupancy at September 30 was 86%, up 1.7 percentage points
from one year ago. We expect to end 1997 with at least a similar year
over year increase.
A.During the third quarter of 1997, we executed leases for over 1.1
million square feet of space in the regional mall portfolio.
B.Our projected 1997 leased square footage will be in excess of 5
million square feet which is 5% above our original 1997 estimates.
C.Leasing activity has been exceptional for the year and we head into
1998 with a lot of positive momentum which should bode well for
continued growth in occupancy.
2. Average base rent in the regional malls as of September 30 was
$21.82, up 8.1% from 1996. The average initial base rent for new
leases signed during the first nine months of 1997 was $30.60, an
increase of $10.15 over the tenants who closed or whose leases
expired. Both of these numbers have been skewed by the newly
acquired Dadeland Mall and the openings of The Forum Shops and The
Source.
3. Excluding Dadeland, The Forum Shops and The Source, our average base
rent was $21.44, which is still a healthy increase of 6.2%, and the
leasing spread was $2.85.
4. Sales volume in the regional malls was $4.5 billion, up 5.3 % from
the third quarter of 1996.
5. In the regional mall portfolio, total sales per square foot on a
rolling 12-month basis, increased 5.8% for the period ended September
30th, and comparable sales per foot were up 3.4%. Our comparable
sales are now tracking at $307 per square foot.
In the community center portfolio, occupancy increased 100 basis points
from a year ago, to 93.1%. Average base rent was $7.78 at September 30,
up 3.9% from $7.49 in 1996.
We are very pleased with the overall results for the quarter, which are
in line with the "street" expectations, and we remain on target with our
plan to meet expectations for the fourth quarter and the year.
One further note before I turn it over to Rick to discuss our
development activities. Last week, we received a favorable summary
judgment in the litigation brought against us by the group of former
DeBartolo employees. While the employee group may obviously appeal the
verdict, this judgment reinforces our belief that no material adverse
impact will come to the Company as a result of this lawsuit.
<PAGE> 32
Development Activity (Rick Sokolov)
We had a very productive third quarter. During this quarter we
celebrated the Grand Re-Opening of The Forum Shops at Caesars in Las
Vegas and the Grand Opening of The Source in Westbury, Long Island. We
also opened Grapevine Mills last week.
The Forum Shops
The Forum Shops, as you know, is one of the country's premier retail
centers with sales in excess of $1300 per square foot. The expansion
opened on August 29th and includes premier tenants such as NIKETOWN,
Cheesecake Factory, and the world's largest FAO Schwarz.
The Source
The Source opened on September 5th. This is a unique project where we
filled a market niche using one of the best demographic markets in the
United States. We have a mix of value-oriented quality tenants such as
Nordstrom Rack, Off 5th Saks Fifth Avenue Outlet, ABC Home Store, ABC
Carpet Store, plus our entertainment and restaurant tenants such as
Rainforest Cafe, Cheesecake Factory, Bertolini's and Brooklyn Diner.
Tenants' expectations have been exceeded with respect to both traffic
and sales volume. The center is currently 90% leased and committed.
Grapevine Mills
Grapevine Mills opened last Thursday, October 30th. Sales and traffic
were well in excess of projections with over 600,000 shoppers over the
weekend. The center is over 91% leased.
Other New Developments
Arizona Mills
We are opening Arizona Mills, in Tempe, Arizona, on November 20th. This
1.2 million square foot regional mall Mills project is 92% leased.
Shops at Sunset Place
We are currently under construction on the Shops at Sunset Place which
is opening October 1998 in South Miami, Florida. This is an
entertainment specialty center that will feature NIKETOWN, AMC 24
Theatre, Barnes & Noble,
<PAGE> 33
IMAX Theatre, Z Gallerie, GameWorks, and Virgin Megastore. The center is
not opening for another year, yet it's already over 84% leased and committed.
Muncie Plaza and Lakeline Plaza
We have two power centers under construction. Muncie Plaza in Muncie,
Indiana is located adjacent to our redeveloped Muncie Mall. The other
power center is Lakeline Plaza, which is also adjacent to our newly
opened Lakeline Mall, in Austin, Texas.
Redevelopment Activity
With respect to the redevelopment activity, our program continues to
gain momentum. We have 28 malls where construction is underway, and 27
of these 28 projects will open prior to December 31, 1998.
A full recap of development and redevelopment activity will be included
in our third quarter 8-K. We will discuss three of our most significant
projects.
Aventura Mall
Aventura Mall located in Miami, Florida, is opening the new
Bloomingdale's this week. When the expansion is complete, including the
addition of Burdine's, a new AMC Theatre, and small shop and four anchor
expansions, sales will be in excess of $725 million. Currently, sales
are over $550 per square foot.
Florida Mall
At Florida Mall in Orlando, Florida, we are adding Burdine's. This is a
center doing over $560 per square foot and will, when the expansion is
complete, have sales in excess $700 million.
Prien Lake Mall
We are adding Dillards, Sears and renovating and expanding Prien Lake
Mall, in Lake Charles, Louisiana. The renovation and expansion will be
complete in November 1998. Sales volume of the center is expected to
double.
Coming attractions
We are going to start next year on our expansions of Mission Viejo and
North East Mall. We are adding Nordstrom, additional small shop space
and additional department stores at both centers. We have announced the
800,000
<PAGE> 34
square foot expansion of the newly acquired Dadeland Mall with a
planned 1998 start construction. We are very excited about the
redevelopment program, and it is producing the anticipated results of
double digit returns, which is our hurdle for doing capital projects.
Acquisitions and Dispositions (David Simon)
At the beginning of the year, we told you that we expected to complete
anywhere between $500 million to $1 billion worth of acquisitions in
1997. Through September 30th of this year, we have completed three
acquisitions totaling $1.4 billion:
1. RPT Portfolio Acquisition
2. 50% interest in Dadeland Mall, and
3. An additional 48% interest in West Town Mall.
I would like to take a few minutes to briefly walk you through the RPT
transaction. The cost of the transaction was $1.2 billion. The initial
cap rate before applying the Simon initiatives was 8.1%.
This portfolio of twelve regional malls and one community center is over
90% occupied and generates annual sales in excess of $330 per square
foot. These centers have been continually invested in, and as a result,
very little incremental capital is required.
The majority of the properties acquired are located in major
metropolitan markets such as New York, Chicago, Los Angeles, and
Pittsburgh, which provides a great fit for SDG. As we have begun the
transition of our management responsibilities of the assets, we continue
to be very excited about this transaction.
We have also reached an agreement in principle that would acquire one of
our partner's interest in one of the portfolio properties. We expect
this to add to the transaction and look to close by year end.
We continue to believe that the positive FFO impact in its first year
will more than $.05 per share.
Tiering Effect
Through our acquisition activities, we have upgraded our portfolio with
the addition of several highly productive assets located in major
metropolitan markets. Over one-third of our regional malls and
specialty centers are located in the 20 largest metropolitan markets in
the United States. Our top 33 malls generate nearly 40% of EBITDA, are
<PAGE> 35
93% occupied and generate sales of $384 per square foot, probably
comprising the top group of properties of any other retail or private
retail ownership. The top half of our malls and specialty centers
generate two-thirds of our EBITDA, and also generate $342 in sales per
square foot and are 92% occupied.
As we continue to transform our Company from beyond just retail real-
estate into marketing and promotional initiatives, our upgraded
portfolio with major dominant assets will help us fuel that effort.
Dispositions
We continue to make progress on our dispositions and have a major sales
transaction in the works which we hope to close by year-end. We expect
overall to step up that effort given the availability of capital out
there. I think we will shed more light on that over the next 30 days.
We also believe the supply and demand of transactions available is
moving in our favor. There seems to be a number of portfolios or
individual assets out there that are for sale. We expect, contrary to
what people are hearing, the pricing levels, in terms of the cap rates
not to go down; but to remain where they are and in fact increase in
supply and demand. I think the available acquirers of many of these
assets is getting narrower and narrower, which will move to our benefit
as well.
Simon Brand Ventures (Karen Corsaro)
I am happy to report that Simon Brand Ventures is growing rapidly and
also pleased that the kinds of acquisitions that we are doing add to the
value that Simon Brand Ventures can deliver to SDG. You will recall
that SBV, Simon Brand Ventures, was based on the notion that we have 100
million shoppers coming from a trade area that includes about 28 million
households. And that we serve 17,000 retailers who employ more than 1
million people.
Simon Brand Ventures is a major national marketing initiative meant to
tap these various audiences. The flagship for our program is MallPerks.
It is the only national mall shopper loyalty program, and it continues
to grow at a pace of about 15,000 members per week; which should easily
put us at more than a million members by the end of this year.
There are several key initiatives that we will be announcing shortly.
One which we just confirmed yesterday with Resorts Condominium
International will make all of their 1.2 million members MallPerks
members. This came as a result of a pilot program that we undertook
recently with RCI, where they created offers that were included in the
MallPerks packet of offers and within a three week period received 440
calls related to time share vacations and purchases. So the kinds of
pilots that we are doing are working very nicely and are bringing
additional partnerships to us and should, over the long term, create
great value for our customer as well.
<PAGE> 36
The VISA alliance is working well. In a period of about a month we
distributed 1.3 million VISA rewards game pieces in our properties.
This is part of an NFL promotion. This went so exceptionally well that
the NFL has selected Simon DeBartolo to enhance and expand this
relationship in 1998. We are meeting with them next week to determine
exactly how that will work. VISA has also chosen to invest additional
dollars in our tourism and international efforts that are used to market
properties like The Forum Shops and Dadeland Mall, which allows us to
bring great value to these properties plus drive business on the VISA
card internationally and within our properties.
We have launched the credit card through our portfolio that is called
the Mall VIP VISA, and the card so far is attracting a younger
demographic and has been most successful in the more urban markets. It
is moving a little bit more slowly in some of the less urban areas. We
are encouraged by the kind of interest we see from the consumer in this
card, but we feel that is going to be a marathon not a sprint in order
to convince people that they need another credit card. So far Simon
leads the alliance with the most cards acquired to date, and we are
hoping to see the program continue to grow.
We are very excited about our ATM business. This is our electronic
concierge network. We currently have 200 machines in place throughout
the portfolio and will easily meet our goal for 300 machines in place in
1998. Just this month, in fact a few days ago, we began to pilot the
alternative media products including gift certificates and phone cards.
Assuming all this technology works as we want it to, next month we will
launch into a larger group, which will include the state of Florida,
with those products. In addition, we have secured interest from many
national advertisers who are looking forward to using this network
throughout our portfolio and will announce a deal shortly with a major
national brand who will introduce a new product on our network system in
a completely unique way that has never been done before with ATM.
In our relationship with SmarTalk, which is the fastest growing prepaid
phone card company, we have 260 SmarTalk vending machines in roll out as
we speak and will be fully operational with that business by
Thanksgiving. In addition, we have been able to negotiate added value
from SmarTalk in that they are providing us with 8,000 Santa story cards
free to be provided to our shoppers simply as a thank you gift for
shopping at Simon properties. We intend to use these both as a welcome
and thank you gift. In addition, we hope to use them as a MallPerks and
Mall VIP Credit card sign up incentive.
The Shopping Line, which is our automated phone answering system,
continues to grow and we are almost at full roll out throughout the
portfolio. We are still expecting an annualized rate of about 12
million calls network-wide,
<PAGE> 37
and we will begin marketing this system throughout the portfolio once
it is network-wide in 1998. We have pilot programs in place with HFS and
CUC to test travel offers on the system and so far that is looking very
hopeful.
The sponsorship category has been extremely active, and we are in the
documentation phase of three significant initiatives with three of the
top brands in the country. Those initiatives will all be announced
before the end of this year. The sponsors are most attracted by the
fact that we are the only developer that is able to couple both a very
large and growing traffic stream with secure, dependable national
marketing programs like MallPerks and The Savingtimes. And these
programs are delivering value to us uniquely as compared to other
developers.
These deals along with the continued growth of the initiatives we have
in place continue to confirm that we will deliver $8 to $10 million in
net revenues in 1997 and a minimum of $20 to $25 million in 1998.
Joint Venture Activities (David Simon)
As we look at the company in general, I think we have three major thrust
areas of growth. One is obviously the development and redevelopment of
existing and new products and that effort is going very well. We also
believe that we will be the leader in the consolidation of our business
which will fuel our growth opportunities. And the third area that we
are very excited about to fuel our growth as well is in the SBV area.
However, we do think that there are other opportunities beyond those
three major platforms that will add to our growth and that is why we
have chosen to do strategic joint ventures. Let me make a brief
statement as to where we stand on those.
DLJ
As many of you saw Tuesday, we announced the formation of a partnership
with DLJ Real Estate Capital Partners to acquire and develop
entertainment-oriented real estate projects.
We are excited about the prospects for this venture, which will focus
primarily on smaller projects, such as theater, restaurant and lifestyle
complexes, that might otherwise fall below the SDG radar screen as well
as other financing type projects that we will be able to participate in.
Our initial conversations with developers, owners and operators in this
area have been very exciting, and we would expect to begin acquiring and
developing product beginning this year and in 1998. I expect our equity
commitment in the next year or so to be approximately $100 million and
that will be invested as the product comes on screen.
<PAGE> 38
Chelsea
We have announced our first project with Chelsea in Houston and had a
very productive meeting yesterday going over various sites. We are very
excited about this relationship and the prospects that it will have for
future growth opportunities. The reputation and relationships that they
have in the business coupled with our overall retail strength should
lead to some very interesting product.
Mills
The Mills relationship continues to be very gratifying. Grapevine Mills
is turning out to be a terrific center, and Ontario Mills continues to
perform well. We have Arizona Mills opening this month, and Charlotte,
where we expect to begin construction in 1998 for a 1999 opening. We
are working on various other deals.
We will expect to continue to do strategic joint ventures which will
allow us to leverage our reputation and position in the industry and at
the same time not take our eye off the ball in our three major growth
fundamentals which is development, redevelopment, consolidating our
industry and the various Simon Brand Venture activities.
Financing Activity (Steve Sterrett)
We have been extremely busy in the capital markets and completed the
following major transactions during the quarter totaling $1 billion.
1. September 2 - Completed the refinancing of the former DeBartolo CMBS,
which resulted in the release of mortgages encumbering 18 of the
portfolio properties and added $5 million a year of cash flow.
2. September 10 - Completed the sale of $180 million of Medium -Term
Notes. The 10 year notes were priced at the then 10 year treasury
rate plus 86 basis points, which equates to 7.125%.
3. September 16 - Issued $25 million of common stock to Smith Barney,
Inc. for inclusion in their Equity Focus Trusts -REIT Portfolio
Series.
4. September 19 - Issued 4.5 million share common offering which raised
a net of $147 million.
5. September 26 - Obtained an additional unsecured revolving credit
facility in the amount of $500 million. The new credit facility has
the same terms as the existing facility which is a base volume rate
of 75 over LIBOR. It was used primarily to fund a portion of the
cost of the RPT acquisition.
6. October 17 - We have finalized a mortgage for West Town Mall of $76
million which bears interest at 6.9%.
7. October 27 - Completed a $150 million offering of 8-year unsecured
notes which pay interest at 6.875%. The notes were priced at 83
basis points over the 8-year treasury. We effectively reduced the
borrowing cost by 12 basis points through an interest rate hedge
agreement that we had in place.
<PAGE> 39
We will continue to be very active on the capital frontier this quarter
and early into 1998. We expect to make further progress on our balance
sheet to bring it more in line with our target capital structure. With
all of our capital activities, we are currently at a pace to have $350
million in unencumbered EBITDA by year end 1997. And we expect to be in
a position to announce within the next couple of weeks a rework of our
credit facility which will further improve our pricing in terms.
Summary (David Simon)
As you have heard, it was an extremely busy and gratifying quarter. But
that's business as usual for us. Whether it's growing our FFO double
digits, aggressively acquiring great assets, building exciting new
projects, enhancing our market dominant existing portfolio, forging
strategic alliances, creating an entirely new set of revenue streams or
aggressively managing our balance sheet, we continue to be focused on
growing our company profitably and enhancing shareholder value.
<PAGE> 40
