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Previous: GRYPHON HOLDINGS INC, 10-K, 1997-03-27 |
Next: RENAISSANCE GOLF PRODUCTS INC, NT 10-K, 1997-03-27 |
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) : March 27, 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 File Number) Identification No.)
of 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 of 38
===============================================================================
Item 5. Other Events
On March 27, 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 December 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 December 31, 1996
<PAGE> 02 of 38
===========================================================================
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: March 27, 1997
SIMON DeBARTOLO GROUP, INC.
By: \s\ James M. Barkley
----------------------
James M. Barkley,
Secretary/General Counsel
<PAGE> 03 of 38
===========================================================================
SUPPLEMENTAL INFORMATION
Table of Contents
As of December 31, 1996
Information Page
Overview 5
Ownership Structure 6-7
Reconciliation of Net Income to Funds
from Operations ("FFO") 8
Selected Financial Information 9-10
Portfolio GLA, Occupancy & Rent Data 11-13
Rent Information 14-16
Lease Expirations 17-18
Scheduled Debt Amortization and Maturities 19
Summary of Mortgage Indebtedness 20
Summary of Mortgage Indebtedness by Maturity 21-26
Summary of Variable Rate Debt and Interest Rate
Protection Agreements 27-28
New Development Activities 29
Renovation/Expansion Activities 30-31
Capital Expenditures 32
Gains on Sales of Peripheral Land 33
Teleconference Text - February 19, 1997 34-38
<PAGE> 04 of 38
============================================================================
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..
Through its majority owned subsidiaries, Simon DeBartolo Group, L.P. and Simon
Property Group, L.P. (collectively, the "Operating Partnership"), the Company
owns or has an interest in 186 properties which consist of existing regional
malls, community shopping centers and specialty and mixed-use properties
containing an aggregate of 113 million square feet of gross leasable area in 33
states. The Company, together with its affiliated management companies,
manages approximately 129 million square feet of gross leasable area in retail
and mixed-use properties.
This package was prepared to provide (1) ownership information, (2) certain
operational information, and (3) debt information as of December 31, 1996, on
a combined basis for Simon DeBartolo Group. Certain operational information is
also provided for the SPG and DRC portfolios individually.
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 of 38
=============================================================================
SIMON DeBARTOLO GROUP
ECONOMIC OWNERSHIP STRUCTURE
As of December 31, 1996
SIMON DeBARTOLO GROUP, L.P. (the "Operating Partnership")
Total Common Shares and Units Outstanding = 157,854,465 (1)
Operational Assets:
-------------------
113 Regional Malls
65 Community Shopping Centers
3 Specialty Retail Centers
4 Mixed-Use Properties
1 Value-Oriented Super-Regional Mall
Partners: %
--------- --
Simon DeBartolo Group, Inc.
Public Shareholders 59.2%
Simon Family 2.1%
DeBartolo Family 0.0%
Executive Management 0.1%
-----
61.4%
-----
Limited Partners
Simon Family 21.9%
DeBartolo Family 14.1%
Other Limited Partners 2.5%
Executive Management 0.1%
-----
38.6%
-----
100.0%
Simon DeBartolo Group, Inc. (the "Company")(3)
61.4% General Partner of Operating Partnership
Common Shareholders Shares(2) %
------------------- --------- --
Public Shareholders 93,330,766 96.4%
Simon Family 3,315,101 3.4%
DeBartolo Family 32,585 0.0%
Executive Management 201,963 0.2%
---------- ------
96,880,415 100.0%
Limited Partners ("Limited Partners")
38.6% Limited Partners of Operating Partnership
Unitholders Units %
----------- ----- --
Simon Family 34,574,342 56.7%
DeBartolo Family 22,207,888 36.4%
Executive Management 153,498 0.3%
Other Limited Partners 4,038,322 6.6%
---------- ------
60,974,050 100.0%
(1) Schedule excludes preferred stock: 4 million shares of Series A issued on
10/27/95 and 8 million shares of Series B issued on 9/27/96.
(2) Comprised of 93,676,415 registered shares and 3,204,000 unregistered
shares - Simon Family 3,200,000 Class B common and DeBartolo Family 4,000
Class C common.
(3) General partner of Simon DeBartolo Group, L.P. and Simon Property Group,
L.P.
<PAGE> 06 of 38
=============================================================================
SIMON DeBARTOLO GROUP
Changes in Common Stock and Unit Ownership
For the Period from December 31, 1995 through December 31, 1996
Operating
Partnership Company
Units Common Shares
Number Outstanding at December 31, 1995 (SPG) 37,282,628 58,360,195
March 22 Award of Restricted Stock
(Stock Incentive Program) - 200,030
Common Shares and Units Issued in the Merger
with DRC 23,219,012 37,873,965
Class C Common Shares Issued in the Merger
with DRC - 4,000
Issuance of Stock to former DeBartolo Employees
in connection with the Merger - 70,074
Issuance of Stock for Employee Stock
Option Exercises - 367,151
September 4 Issuance of Stock for Director
Stock Option Exercise - 5,000
October 4 Issuance of Units for Increased
Ownership of North East Mall 472,410 -
Number Outstanding at December 31, 1996 60,974,050 96,880,415
Total Common Shares and Units Outstanding at December 31,
1996: 157,854,465
<PAGE> 07 of 38
===============================================================================
SIMON DeBARTOLO GROUP
Reconciliation of Net Income to Funds From
Operations ("FFO") (1)
As of December 31, 1996
(In thousands, except per share data)
Twelve Months Ended
December 31,
---------------------
The Operating Partnership 1996 1995
------- --------
Income of the Operating Partnership before
Extraordinary Items $134,663 $101,505
Plus: Depreciation and Amortization from
Consolidated Properties 135,226 92,274
Less: Minority Interest Portion of Depreciation
and Amortization (3,007) (2,900)
Plus: SDG's Share of Depreciation and
Amortization from Unconsolidated Affiliates 20,159 6,466
Plus: Merger Integration Costs 7,236 -
Less: Preferred Dividends (12,694) (1,490)
Less: SDG's Share of Gains and Losses from Sale of
Assets (88) 2,054
Funds from Operations of the Operating
Partnership $281,495 $197,909
Percent Increase 42.2%
Weighted Average Common Shares and Units
Outstanding 120,182 92,666
FFO per Share/Unit $2.34 $2.14
Percent Increase 9.3%
Simon DeBartolo Group, Inc.
FFO Allocable to SDG, Inc. $172,468 $118,376
Percent Increase 45.7%
Weighted Average Common Shares Outstanding 73,586 55,312
FFO per Share $2.34 $2.14
Percent Increase 9.3%
Distributions per Common Share/Unit $1.63 (2) $1.97
(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) Represents distributions declaration in 1996, which includes a
distribution of $0.1515 per share declared on August 1996, in connection
with the Merger, designated to align the time periods of
distributions of the merged companies. On January 23, 1997, the Company
declared a distribution of $0.4925 per share payable on
February 21, 1997, to shareholders of record on February 7, 1997.
The current annual distribution rate is $1.97 per share.
<PAGE> 08 of 38
===============================================================================
SIMON DeBARTOLO GROUP
Selected Financial Information
As of December 31, 1996
(In thousands, except as noted)
Twelve
Months
Ended
December %
31, 1996 1995 Change
Financial Highlights(1)
Total Revenues - Consolidated Properties
$747,704 $553,657 35.0%
Total EBITDA of Portfolio Properties
$615,322 $437,548 40.6%
EBITDA After Minority Interest
$497,215 $357,158 39.2%
Net Income Available to Common
Shareholders $72,561 $57,781 25.6%
Net Income Available to Common
Shareholders per Share $0.99 $1.04 -4.8%
Funds from Operations of the Operating
Partnership $281,495 $197,909 42.2%
Funds from Operations Allocable to Simon
DeBartolo Group, Inc. $172,468 $118,376 45.7%
Funds from Operations per Common Share $2.34 $2.14 9.3%
Common Stock Distributions Declared, per
Common share $1.63 $1.97 -
(2)
Operational Statistics(3)
Occupancy at End of Period:
Regional Malls (4) 84.7% 85.5% -0.8%
Community Shopping Centers (5) 91.6% 93.6% -2.0%
Average Base Rent per Square Foot:
Regional Malls (4) $20.68 $19.18 7.8%
Community Shopping Centers (5) $7.65 $7.29 4.9%
Total Tenant Sales Volume, in millions:
(6)
Regional Malls (7) $ 6,470 $ 6,098 6.1%
Community Shopping Centers (5) $ 1,451 $ 1,551 -6.4%
Regional Malls:
Total Sales per Sqaure Foot (8) $ 290 $ 274 5.9%
Comparable Sales per Square Foot (8) $ 298 $ 278 7.2%
Cost of Occupancy (8) 11.4% 11.6% -0.2%
Number of Properties Open at End of
Period 186 184 1.1%
(1) Not adjusted to give effect to the Merger prior to August 9, 1996.
(2) Represents distributions declaration in 1996, which includes a
distribution of $0.1515 per share declared on August 9, 1996, in
connection with the Merger, designated to align the time periods of
distributions of the merged companies. On January 23, 1997, the
Company declared a distribution of $0.4925 per share payable on
February 21, 1997, to shareholders of record on February 7, 1997.
The current annual distribution rate is $1.97 per share.
(3) Based upon the business and properties of SPG and DRC on a combined
basis to give effect to the Merger for all periods reported.
(4) Includes mall and freestanding stores.
(5) Includes all Owned GLA.
(6) Represents only those tenants who report sales.
(7) 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.
(8) Based upon the standard definition of sales for regional malls adopted by
the International Council of Shopping Centers which excludes large space
users.
<PAGE> 09 of 38
=============================================================================
SIMON DeBARTOLO GROUP
Selected Financial Information
As of December 31, 1996
(In thousands, except as noted)
December 31, December 31,
Equity Information and Statistics (1) 1996 1995
----------- ----------
Units Outstanding at End of Period 60,974 37,283
Common Shares Outstanding at End of
Period 96,880 58,360
----------- ----------
Total Common Shares and Units Outstanding
at End of Period 157,854 95,643
=========== ==========
Weighted Average Units Outstanding 46,596 37,354
Weighted Average Common Shares
Outstanding 73,586 55,312
----------- ----------
Weighted Average Common Shares and Units
Outstanding 120,182 92,666
=========== ==========
Common Stock Price at End of Period $ 31.00 $ 24.375
Equity Market Capitalization(2) $ 5,193,488 $2,431,294
Total Capitalization - Consolidated Debt $ 8,875,472 $4,412,053
Only
Debt-to-Market Capitalization -
Consolidated Only 41.5% 44.9%
Total Capitalization - Including SDG
Share of JV Debt (millions) $ 9,322,144 $4,579,697
Debt-to-Market Capitalization - Including
SDG Share of JV Debt 44.3% 46.9%
December 31, December 31,
Selected Balance Sheet Information 1996 1995(1)
Total Assets $ 5,895,910 $2,556,436
Consolidated Debt $ 3,681,984 $1,980,759
Joint Venture Debt $ 1,121,804 $ 410,652
SDG Share of Joint Venture Debt $ 448,218 $ 167,644
(1) Not adjusted to give effect to the Merger prior to August 9, 1996.
(2) Market value of Common Stock and Units plus book value of Preferred Stock.
<PAGE> 10 of 38
==============================================================================
SIMON DeBARTOLO GROUP
Portfolio GLA, Occupancy & Rent Data
As of December 31, 1996
% of Avg Annualized
Total % of Owned Base Rent Per
GLA Owned Owned GLA Which Leased SqFt
Type/Property Sq. Ft. GLA GLA is Leased Owned GLA
Regional Malls
- -Anchor 59,512,851 19,553,426 29.0% 98.7% $3.19
- -Mall Store 32,353,889 32,353,889 48.1% 84.5% 21.06
- -Freestanding 1,613,271 803,652 1.2% 90.1% 7.08
Subtotal 33,967,160 33,157,541 49.3% 84.7% $20.68
Regional Mall
Total 93,480,011 52,710,967 78.3% 89.9% $13.37
Community
Shopping Centers
- -Anchor 10,452,601 6,359,682 9.5% 92.6% $6.32
- -Mall Store 3,886,049 3,804,959 5.6% 89.3% 9.99
- -Freestanding 804,023 316,084 0.5% 98.7% 7.38
Community Ctr.
Total 15,142,673 10,480,725 15.6% 91.6% $7.65
Office Portion
of Mixed-Use
Properties 2,003,437 2,003,437 3.0% 94.7% $18.78
Mills-type
Properties
and Other 2,653,529 2,119,754 3.1%
GRAND TOTAL 113,279,650 67,314,883 100.0%
Occupancy History
Community
As of Regional Malls(1) Shopping Centers(2)
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)
12/31/92(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
DRC Portfolio were not historically calculated prior to 1994.
<PAGE> 11 of 38
=========================================================================
SIMON PORTFOLIO
GLA, Occupancy & Rent Data
As of December 31, 1996
% % Owned Avg Annualized
Total of GLA Base Rnt Per
Owned Owned Which Leased Sq Ft
Type of PropertyGLA-Sq. Ft. GLA GLA is Leased of Owned GLA
Regional Malls
- -Anchor 30,368,592 9,292,645 23.9% 99.1% $2.99
- -Mall Store 17,211,558 17,211,558 44.3% 87.0% 20.50
- -Freestanding 1,110,825 448,738 1.2% 95.3% 6.67
Subtotal 18,322,383 17,660,296 45.5% 87.2% $20.10
Regional Mall
Total 48,690,975 26,952,941 69.4% 91.3% $13.52
Community Shopping Centers
- -Anchor 8,087,158 5,060,765 13.0% 93.6% $6.42
- -Mall Store 3,047,073 2,965,983 7.6% 89.7% 9.98
- -Freestanding 778,124 304,765 0.8% 100.0% 6.99
Community Ctr.
Total 11,912,355 8,331,513 21.4% 92.4% $7.67
Office Portion
of Mixed-Use
Properties 1,446,136 1,446,136 3.7% 94.7% $20.34
Mills-type
Properties
and Other 2,653,529 2,119,754 5.5%
GRAND TOTAL 64,702,995 38,850,344 100.0%
Occupancy History
Community
As of Regional Malls(1) Shopping Centers(2)
12/31/96 87.2% 92.4%
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.
<PAGE> 12 of 38
=========================================================================
DeBARTOLO PORTFOLIO
GLA, Occupancy & Rent Data
As of December 31, 1996
% of Avg Annualized
Total % of Owned GLA Base Rent Per
GLA Owned Owned Which Leased Sq Ft
Type/Property Sq. Ft. GLA GLA is Leased of Owned GLA
Regional Malls
- -Anchor 29,144,259 10,260,781 36.1% 98.4% $3.38
- -Mall Store 15,142,331 15,142,331 53.2% 81.7% $21.74
- -Freestanding 502,446 354,914 1.2% 83.6% 7.70
Subtotal 15,644,777 15,497,245 54.4% 81.7% $21.41
Region Mall
Total 44,789,036 25,758,026 90.5% 88.4% $13.21
Community
Shopping
Centers
- -Anchor 2,365,443 1,298,917 4.6% 88.5% $5.93
- -Mall Store 838,976 838,976 3.0% 88.1% 10.03
- -Freestanding 25,899 11,319 0.0% 63.2% 24.00
Community Ctr.
Total 3,230,318 2,149,212 7.5% 88.2% $7.57
Mixed-Use
Properties
- -Office Portion 557,301 557,301 2.0% 94.7% $14.76
GRAND TOTAL 48,576,655 28,464,539 100.0%
Occupancy History
Community
As of Regional Malls(1) Shopping Centers(2)
12/31/96 81.7% 88.2%
12/31/95 84.4% 87.6%
12/31/94 85.0% 91.1%
12/31/93 86.2% (3)
12/31/92 87.2% (3)
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
(3) Information not available as community shopping center statistics
were not historically calculated.
<PAGE> 13 of 38
=========================================================================
SIMON DeBARTOLO GROUP
Rent Information
As of December 31, 1996
Average Base Rent
Mall and Community
Freestanding Stores % Shopping %
As of Regional Malls Change Centers Change
12/31/96 $20.68 7.8% $7.65 4.9%
12/31/95(1) 19.18 4.4 7.29 2.4
12/31/94(1) 18.37 3.8 7.12 N/A
12/31/93(1) 17.70 5.0 N/A N/A
12/31/92(1) 16.85 N/A N/A N/A
Rental Rates
Base Rent (2)
Store Openings Store Closings Amount of Change
Year During Period During Period Dollar Percentage
--------------- ------------- --------- ---------
Regional Malls:
1996 $23.59 $18.73 $4.86 25.9%
Community Shopping Centers:
1996 $8.18 $6.16 $2.02 32.8%
(1) On a pro forma combined basis.
(2) Represents the average base rent in effect during the period for those
tenants who signed leases as compared to the average base rent in effect
during the period for those tenants whose leases terminated or expired.
<PAGE> 14 of 38
=========================================================================
SIMON PORTFOLIO
Rent Information
As of December 31, 1996
Average Base Rent
Mall and Community
Freestanding Stores % Shopping %
As of at Regional Malls Change Centers Change
12/31/96 $20.10 7.6% $7.67 5.5%
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
Rental Rates
Base Rent (1)
Store Openings Store Closings Amount of Change
Year During Period During Period Dollar Percentage
Regional Malls:
1996 $23.54 $17.24 $6.30 36.5%
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 $7.90 $5.82 $2.08 35.7%
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 whose leases terminated or expired.
<PAGE> 15 of 38
=========================================================================
DeBARTOLO PORTFOLIO
Rent Information
As of December 31, 1996
Average Base Rent
Freestanding Stores % Community %
As of at Regional Malls Change Shopping Centers Change
12/31/96 $21.41 8.2% $7.57 3.1%
12/31/95 19.78 2.0 7.34 1.2
12/31/94 19.39 4.6 7.25 N/A
12/31/93 18.49 5.1 N/A N/A
12/31/92 17.54 6.5 N/A N/A
Rental Rates
Base Rent(1)
Store Openings Store Closings Amount of Change
Year During Period During Period Dollar Percentage
Regional Malls:
1996 $23.66 $20.39 $3.27 16.0%
1995 25.10 20.46 4.64 22.7
1994 23.01 18.69 4.32 23.1
1993 23.06 17.08 5.98 35.0
1992 21.03 15.86 5.17 32.6
Community Shopping
Centers:
1996 $8.99 $7.91 $1.08 13.7%
1995 10.94 10.45 0.49 4.7
1994 8.09 8.17 (0.08) -1.0
1993 5.62 5.97 (0.35) -5.9
1992 9.61 9.40 0.21 2.2
(1) For periods prior to 1996, represents average rent for new leases versus
rent for prior tenants in same units, regardless of when prior leases
terminated. 1996 methodology was modified to conform with the Simon
Property method.
<PAGE> 16 of 38
=========================================================================
SIMON DeBARTOLO GROUP
Lease Expirations (1)
As of December 31, 1996
Number of Square Avg. Base Rent
Leases Feet per Square
Year Expiring Foot
at 12/31/96
Regional Malls -
Mall &
Freestanding Stores
1997 1,031 2,217,510 19.79
1998 1,050 2,038,377 23.15
1999 1,047 2,344,286 21.39
2000 1,029 2,317,013 22.30
2001 960 2,447,526 20.22
2002 705 2,155,803 19.96
2003 711 2,039,247 22.02
2004 688 2,160,114 21.99
2005 650 2,282,666 20.26
2006 893 2,693,455 23.07
TOTALS 8,764 22,695,997 $21.44
Regional Malls -
Anchor Tenants
1997 7 840,100 1.43
1998 13 2,073,955 1.66
1999 12 1,620,140 1.74
2000 11 1,748,754 1.95
2001 12 1,709,665 2.15
2002 4 480,856 1.92
2003 5 478,440 3.90
2004 13 1,130,439 4.37
2005 10 1,213,825 2.77
2006 12 1,397,123 3.51
TOTALS 99 12,693,297 $2.41
Community Centers -
Mall Stores &
Freestanding Stores
1997 117 319,470 10.40
1998 174 497,197 10.59
1999 169 528,947 10.42
2000 146 582,998 9.59
2001 111 380,076 10.76
2002 57 282,634 9.37
2003 24 175,029 9.18
2004 22 134,600 11.18
2005 29 248,208 8.28
2006 17 138,809 9.28
TOTALS 866 3,287,968 $10.01
(Page) 17 of 38
========================================================================
Community Centers
- Anchor Tenants
1997 7 182,999 7.24
1998 2 63,195 5.48
1999 7 207,706 5.16
2000 5 178,733 6.24
2001 10 442,483 3.62
2002 5 199,760 6.80
2003 8 273,486 6.64
2004 7 183,317 6.43
2005 9 556,945 5.74
2006 10 592,910 5.90
TOTALS 70 2,881,534 $5.75
(1) Does not consider the impact of options that may
be contained in leases.
<PAGE> 18 of 38
=========================================================================
SIMON DeBARTOLO GROUP
Scheduled Debt Amortization
and Maturities
As of December 31, 1996
(In thousands)
Scheduled Scheduled
Year Amortization Maturities Total
Consolidated
Properties
Mortgage Indebtedness
1997 19,829 30,000 49,829
1998 18,819 348,880 367,699
1999 22,847 223,408 246,255
2000 25,242 369,905 395,147
2001 23,156 636,794 659,950
2002 19,909 407,334 427,243
2003 12,721 369,280 382,001
2004 8,950 160,280 169,230
2005 8,360 35,944 44,304
2006 8,085 48,048 56,133
Thereafter 0 291,734 291,734
$167,918 $2,921,607 $3,089,525
Corporate Credit
Facility
1999 0 230,000 230,000
Unsecured Debt
2003 0 100,000 100,000
2006 0 250,000 250,000
Adjustment of
Indebtedness to
Fair Mkt Value, Net 0 12,459 12,459
Total Consolidated Debt $167,918 $3,514,066 $3,681,984
Joint Ventures
1997 2,461 12,763 15,224
1998 2,168 175,000 177,168
1999 2,357 259,623 261,980
2000 2,357 77,089 79,446
2001 4,651 62,032 66,683
2002 3,789 47,324 51,113
2003 2,777 172,444 175,221
2004 2,986 0 2,986
2005 262 160,471 160,733
2006 0 131,250 131,250
Thereafter 0 0
Total Joint Venture Debt $23,808 $1,097,996 $1,121,804
<PAGE> 19 of 38
=========================================================================
<TABLE>
SIMON DEBARTOLO GROUP
Summary of Mortgage Indebtedness By Maturity
As of December 31, 1996
(In thousands)
Principal SDG's Weighted
Balance Share of Average
12/31/96 Loan Balance Interest Rate
<S> <C> <C> <C>
Consolidated Fixed Rate Debt 2,441,990 2,389,852 7.76%
Unsecured Fixed Rate Debt 350,000 350,000 6.84%
Adjustment of Indebtedness to Fair
Market Value & Other, Net - Fixed
Rate Debt 12,721 12,721 N/A
--------- -------------- --------------
Subtotal 2,804,711 2,752,573 7.60%
Consolidated Variable Rate Debt 647,535 596,024 6.41%
Corporate Credit Facility
Variable Rate Debt 230,000 230,000 6.43%
Adjustment of Indebtedness to Fair
Market Value & Other, Net - Variable
Rate Debt (262) (262) N/A
--------- -------------- --------------
Subtotal 877,273 825,762 6.41%
Mortgage and Other Notes Payable
Consolidated Balance Sheets 3,681,984 3,578,335 7.33%
========= ============== ==============
Joint Venture Fixed Rate Debt 614,885 253,744 7.67%
Joint Venture Variable Rate Debt 506,919 194,474 6.71%
--------- -------------- --------------
Mortgages and Other Notes
Payable Partnerships and Joint
Ventures 1,121,804 448,218 7.26%
========= ============== ==============
</TABLE>
<PAGE> 20 of 38
=========================================================================
<TABLE>
SIMON DEBARTOLO GROUP
Summary of Mortgage Indebtedness By Maturity
As of December 31, 1996
(In thousands)
Weighted
Principal SDG's Average
Property Maturity Interest Balance Share Interest Rate
Name Date Rate 12/31/96 of Loan by Year
Balance
<S> <C> <C> <C> <C> <C>
Consolidated Properties
Fixed Rate Debt:
Subtotal 1997 0 0
White Oaks Mall 03/01/98 7.70% 16,500 9,061
Ross Park Mall 08/15/98 6.14% 60,000 60,000
--------- --------------
Subtotal 1998 76,500 69,061 6.34%
Great Lakes Mall 03/15/99 7.07% 8,719 8,719
West Ridge Mall 06/01/99 8.00% 50,005 50,005
Ingram Park Mall 11/01/99 9.63% 7,000 7,000
Ingram Park Mall 12/01/99 8.10% 49,107 49,107
Barton Creek Square 12/30/99 8.10% 63,549 63,549
La Plaza Mall 12/30/99 8.25% 50,526 50,526
--------- --------------
Subtotal 1999 228,906 228,906 8.12%
Windsor Park Mall 06/01/00 8.00% 6,009 6,009
Trolley Square 07/23/00 5.81% 19,000 17,100
North East Mall 09/01/00 10.00% 22,442 22,442
Bloomingdale Court 12/01/00 8.75% 29,009 29,009
Forest Plaza 12/01/00 8.75% 16,904 16,904
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 190,065 188,165 8.61%
Biltmore Square 01/01/01 7.15% 28,265 28,265
Chesapeake Square 01/01/01 7.28% 52,576 52,576
Port Charlotte 01/01/01 7.28% 46,548 46,548
Great Lakes Mall 03/15/01 6.74% 54,137 54,137
Securitized Debt Fin (1) 03/01/01 8.12% 366,346 366,346
--------- --------------
Subtotal 2001 547,872 547,872 7.78%
Gulf View Square 01/01/02 8.25% 38,600 38,600
Paddock Mall 01/01/02 8.25% 30,700 30,700
Columbia Shopping Ct 03/15/02 7.62% 43,369 43,369
Lima Mall 03/15/02 7.12% 19,412 19,412
Northgate Mall 03/15/02 7.62% 80,983 80,983
Tacoma Mall 03/15/02 7.62% 94,752 94,752
Crossroads Mall 07/31/02 7.75% 41,440 41,440
North Riverside Park 09/01/02 9.38% 4,117 4,117
North Riverside Park 09/01/02 10.00% 3,668 3,668
Hutchinson Mall 10/01/02 8.44% 11,523 11,523
--------- --------------
Subtotal 2002 368,564 368,564 7.80%
Battlefield Mall 06/01/03 7.50% 50,724 50,724
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
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 12/15/03 6.99% 20,000 20,000
Muncie Mall 12/15/03 6.74% 24,000 24,000
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 12/21/03 6.91% 47,500 28,500
--------- --------------
Subtotal 2003 401,972 382,972 6.72%
Cielo Vista Mall 07/01/04 8.13% 2,323 2,323
College Mall 07/01/04 7.00% 43,429 43,429
Greenwood Park Mall 07/01/04 7.00% 36,374 36,374
Tippecanoe Mall 07/01/04 8.45% 47,556 47,556
Towne East Square 07/01/04 7.00% 57,419 57,419
--------- --------------
Subtotal 2004 187,101 187,101 7.38%
Melbourne Square 02/01/05 7.42% 40,214 40,214
--------- --------------
Subtotal 2005 40,214 40,214 7.42%
Treasure Coast Sq 01/01/06 7.42% 54,581 54,581
--------- --------------
Subtotal 2006 54,581 54,581 7.42%
Cielo Vista Mall 05/01/07 9.25% 56,329 56,329
Irving Mall (2) 05/01/07 9.25% 43,375 43,375
McCain Mall 05/01/07 9.25% 26,304 26,304
Valle Vista Mall 05/01/07 9.25% 34,837 34,837
University Park Mall 10/01/07 7.43% 59,500 35,700
--------- --------------
Subtotal 2007 220,345 196,545 8.92%
Subtotal 2008-2010 0 0
Randall Park 01/01/11 9.25% 34,269 34,269
--------- --------------
Subtotal 2011 34,269 34,269 9.25%
Windsor Park Mall 05/01/12 8.00% 8,951 8,951
--------- --------------
Subtotal 2012 8,951 8,951 8.00%
O'Hare International 12/31/13 7.50% 27,500 27,500
--------- --------------
Subtotal 2013 27,500 27,500 7.50%
Subtotal 2014 0 0
Terrace @ Florida Mall 05/15/15 8.44% 4,688 4,688
Chesapeake Center 05/15/15 8.44% 6,563 6,563
Grove @ Lakeland Sq 05/15/15 8.44% 3,750 3,750
--------- --------------
Subtotal 2015 15,001 15,001 8.44%
Subtotal 2016-2025 0 0
Sunland Park Mall 01/01/26 8.63% 40,149 40,149
--------- --------------
Subtotal 2026 40,149 40,149 8.63%
--------- -------------- --------------
Total Consolidated
Fixed Rate Debt 2,441,990 2,389,852 7.76%
========= ============== ==============
Consolidated Properties
Variable Rate Debt:
Eastland Mall 11/01/97 6.94% 30,000 30,000
--------- --------------
Subtotal 1997 30,000 30,000 6.94%
Lincolnwood Town Ctr 01/31/98 6.91% 63,000 63,000
East Towne Mall 09/29/98 6.79% 55,000 55,000
Eastgate Consumer 12/31/98 6.50% 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 274,879 274,879 6.59%
Subtotal 1999 0 0
Jefferson Valley Mall 01/12/00 6.05% 50,000 50,000
The Forum Shops 02/23/00 6.56% 100,000 59,525
The Forum Shops 02/23/00 7.59% 22,716 12,494
Trolley Square 07/23/00 7.03% 4,641 4,177
Trolley Square 07/23/00 7.03% 3,500 3,150
--------- --------------
Subtotal 2000 180,857 129,346 6.49%
Crystal River 01/01/01 6.75% 16,000 16,000
Securitized Debt Fin (1) 03/01/01 5.31% 87,200 87,200
Mainland Peripheral 12/31/01 6.75% 1,290 1,290
--------- --------------
Subtotal 2001 104,490 104,490 5.55%
Mall of the Mainland 03/31/02 6.75% 40,706 40,706
Highland Lakes Plaza 03/31/02 6.25% 14,377 14,377
Mainland Crossing 03/31/02 6.25% 2,226 2,226
--------- --------------
Subtotal 2002 57,309 57,309 6.61%
--------- -------------- --------------
Total Consolidated
Variable Rate Debt 647,535 596,024 6.41%
========= ============== ==============
Total Consolidated
Properties 3,089,525 2,985,876 7.49%
========= ============== ==============
Joint Venture Properties
Fixed Rate Debt:
Aventura Mall 05/01/97 7.00% 2,500 833
Century III Mall 12/01/97 7.00% 519 260
--------- --------------
Subtotal 1997 3,019 1,093 7.00%
Subtotal 1998-1999 0 0
Northfield Square 04/01/00 9.50% 24,596 24,596
Coral Square 12/01/00 7.40% 53,300 26,650
--------- --------------
Subtotal 2000 77,896 51,246 8.41%
Subtotal 2001 0 0
Palm Beach Mall 12/15/02 8.21% 52,179 26,090
--------- --------------
Subtotal 2002 52,179 26,090 8.21%
The Avenues 05/15/03 8.36% 59,051 14,763
Century III Mall 07/01/03 6.78% 66,000 33,000
Lakeland Square 12/22/03 7.26% 53,300 26,650
--------- --------------
Subtotal 2003 178,351 74,413 7.27%
Subtotal 2004 0 0
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
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 6,188
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 63,183 7.05%
Great Northeast Plaza 06/01/06 9.04% 17,940 8,970
Smith Haven Mall 06/17/06 7.86% 115,000 28,750
--------- --------------
Subtotal 2006 132,940 37,720 8.14%
Subtotal 2007-2016 0 0
--------- -------------- --------------
Total Joint Venture
Fixed Rate Debt 614,885 253,744 7.67%
========= ============== ==============
Joint Venture Properties
Variable Rate Debt:
Aventura Mall 03/01/97 8.25% 3,563 1,188
Aventura Mall 05/01/97 9.50% 6,700 2,233
--------- --------------
Subtotal 1997 10,263 3,421 9.07%
Aventura Mall 08/08/98 6.43% 100,000 33,333
Florida Mall 12/01/98 5.72% 75,000 37,500
--------- --------------
Subtotal 1998 175,000 70,833 6.05%
Stratosphere (3) 03/13/99 7.62% 15,749 7,874
Indian River Mall 03/29/99 7.29% 37,723 18,862
Ontario Mills (3) 05/07/99 8.20% 77,637 19,409
Lakeline Mall 05/16/99 6.03% 68,515 34,257
--------- --------------
Subtotal 1999 199,624 80,402 7.01%
Subtotal 2000 0 0
The Source 07/16/01 7.32% 62,032 31,016
--------- --------------
Subtotal 2001 62,032 31,016 7.32%
Subtotal 2000 0 0
Circle Centre 12/05/03 6.31% 60,000 8,802
--------- --------------
Subtotal 2003 60,000 8,802 6.31%
--------- -------------- --------------
Total Joint Venture
Variable Rate Debt 506,919 194,474 6.71%
========= ============== ==============
Total Joint Venture
Properties 1,121,804 448,218 7.26%
========= ============== ==============
Total Mortgage Debt 4,211,329 3,434,094 7.46%
========= ============== ==============
Unsecured Debt
Fixed Rate Debt:
SDG, LP (PATS) 11/15/03 6.75% 100,000 100,000
--------- --------------
Subtotal 2003 100,000 100,000 6.75%
SDG, LP (Bonds) 11/15/06 6.88% 250,000 250,000
--------- --------------
Subtotal 2006 250,000 250,000 6.88%
--------- -------------- --------------
Total Unsecured Fixed Rate Debt 350,000 350,000 6.84%
========= ============== ==============
Corporate Credit Facility
Variable Rate Debt:
SPG, LP 09/27/99 6.43% 230,000 230,000
--------- --------------
Subtotal 1999 230,000 230,000 6.43%
--------- -------------- --------------
Total Corporate Credit
Variable Rate Debt 230,000 230,000 6.43%
========= ============== ==============
(1) Secured by 17 DRC Portfolio centers.
(2) Paid January 31, 1997.
(3) Two one-year options exist to extend maturity.
</TABLE>
<PAGE> 21-26 of 38
=========================================================================
<TABLE>
SIMON DeBARTOLO GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of December 31, 1996
(In thousands)
Terms of
Combined Interest
Principal Combined Share of Interest Terms of Rate
Property Maturity Balance Ownership Loan Rate Variable Protection
Name Date 12/31/96 % Balance 12/31/96 Rate Agreement
- -------------------------- -------- --------- --------- -------- -------- -------------- ------------------
<S> <C> <C> <C> <C> <C> <S> <C> <S> <C> <C>
Consolidated Properties
Variable Rate Debt:
Eastland Mall 11/01/97 30,000 100.0% 30,000 6.94% LIBOR + 1.50% LIBOR swapped at 5.15%
through maturity; lender
has right to cancel swap
effective 1/1/97 (Lender
cancelled swap effective
1/1/97)
Lincolnwood Town Ctr 01/31/98 63,000 100.0% 63,000 6.91% LIBOR + 1.25%
East Towne Mall 09/29/98 55,000 100.0% 55,000 6.79% LIBOR + 1.125%
Eastgate Consumer 12/31/98 25,429 100.0% 25,429 6.50% LIBOR + 1.50% LIBOR capped at 5.0%
through maturity
Riverway 12/31/98 85,571 100.0% 85,571 6.38% LIBOR + 1.375% LIBOR capped at 5.0%
through maturity
Riverway 12/31/98 45,879 100.0% 45,879 6.38% LIBOR + 1.375% LIBOR capped at 5.0%
through maturity
Jefferson Valley Mall 01/12/00 50,000 100.0% 50,000 6.05% LIBOR + .55% LIBOR capped at 8.7%
through maturity
The Forum Shops 02/23/00 100,000 59.5% 59,525 6.56% LIBOR + 1.00% See Footnote 2
The Forum Shops 02/23/00 22,716 55.0% 12,494 7.59% LIBOR +
1.8125%
Trolley Square 07/23/00 4,641 90.0% 4,177 7.03% LIBOR + 1.50%
Trolley Square 07/23/00 3,500 90.0% 3,150 7.03% LIBOR + 1.50%
Crystal River 01/01/01 16,000 100.0% 16,000 6.75% LIBOR + 2.00% See Footnote 3
Securitized Debt Fin 03/01/01 87,200 100.0% 87,200 5.31% LIBOR + .56% See Footnote 3
Mainland Peripheral 12/31/01 1,290 100.0% 1,290 6.75% LIBOR + 2.00% See Footnote 3
Mall of the Mainland 03/31/02 40,706 100.0% 40,706 6.75% LIBOR + 2.00% See Footnote 3
Highland Lakes Plaza 03/31/02 14,377 100.0% 14,377 6.25% LIBOR + 1.50% See Footnote 3
Mainland Crossing 03/31/02 2,226 100.0% 2,226 6.25% LIBOR + 1.50% See Footnote 3
--------- --------
Total Consolidated
Properties 647,535 596,024
========= ========
Corporate Credit Facility:
SPG, L.P. 09/27/99 230,000 230,000 6.43% LIBOR + .90% On March 13, 1996, the
--------- -------- Operating Partnership entered
into a two-year cap agreement
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.
Total Corporate Credit
Facility 230,000 230,000
========== =======
Joint Venture Properties:
Aventura Mall 03/01/97 3,563 33.3% 1,188 8.25% Prime Rate (1)
Aventura Mall 05/01/97 6,700 33.3% 2,233 9.50% Prime + 1.25%
Aventura Mall 08/08/98 100,000 33.3% 33,333 6.43% Bank of Tokyo See Footnote 3
CD rate + .90%
Florida Mall 12/01/98 75,000 50.0% 37,500 5.72% 30-day See Footnote 3
Commercial
paper rate +
0.75%
Stratosphere 03/13/99 (4) 15,749 50.0% 7,874 7.62% LIBOR + 2.00% (1)
Indian River Mall 03/29/99 37,723 50.0% 18,862 7.29% LIBOR + 1.25%
Ontario Mills 05/07/99 (4) 77,637 25.0% 19,409 8.20% LIBOR + 2.75% (1)
Lakeline Mall 05/16/99 68,515 50.0% 34,257 6.03% LIBOR + .375%
The Source 07/16/01 62,032 50.0% 31,016 7.32% LIBOR + 1.7%
Circle Centre 12/05/03 60,000 14.7% 8,802 6.31% LIBOR + 0.7% (Loan refinanced 2/18/97 at
LIBOR + .44% with a maturity
of 1/31/2004)
--------- --------
Total Joint Venture
Properties 506,919 194,474
========= ========
Total Variable Mortgage
and Other Indebtedness 1,384,454 1,020,498
========= ========
Footnotes:
(1) Rate can be reduced
based upon project
performance.
(2) Cap agreement was
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) There exists a swap
with the following
terms: LIBOR fixed
at 4.75% on
approximately $218
million of debt
through April 1997;
LIBOR fixed at
5.71% on $87.2
million of debt
from May 1997
through April 2001.
These swaps have a
maximum protection
on LIBOR of 8.44%.
To obtain the swap,
the Company
"assigned" existing
interest rate caps
(all expiring in
April 1997) to an
unrelated third
party. An interest
rate cap was also
purchased which
limits LIBOR to
8.44% on $87.2
million of debt
from May 1996
through March 2001
in order to provide
protection in the
event LIBOR exceeds
8.44%.
(4) Two one-year
options exist to
extend maturity.
(5) The following table
summarizes variable
rate debt as
follows:
</TABLE>
Total SDG Share
--------- ---------
Swapped debt 248,000 248,000
Capped debt "in the money" 156,879 156,879
Other hedged variable rate debt 239,000 202,955
Unhedged variable rate debt 740,575 412,664
--------- ---------
1,384,454 1,020,498
========= =========
<PAGE> 27-28 of 38
=========================================================================
SIMON DeBARTOLO
GROUP
New Development
Activities
As of December 31,
1996
Non-Anchor
SDG Actual/ Projected Sq.Footage
Mall/ Ownership Projected Cost (in Leased/ GLA
Location Percentage Opening millions) Committed (sq.ft.)
(1)
Projects Under
Construction
Indian River 50% 3/97 $8 97% 265,000
Commons
Vero Beach, FL
Anchors/Major Tenants: Home-Place, Lowe's, Office Max, Service Merchandise
The Mall at the 50% 8/97 $150 73% 730,000
Source
Long Island, NY
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
Arizona Mills 25% (3) 11/97 $184 (2) 1,230,000
Tempe, Arizona
Anchors/Major Tenants: Oshmans Supersport, Off 5th-Saks Fifth Avenue
Outlet, Burlington Coat Factory, Harkins
Theater, Mikasa, JCPenney Outlet, Linens'N
Things, Rainforest Cafe, GameWorks, Hi Health
Grapevine Mills 38% 10/97 $202 (2) 1,480,000
Grapevine, TX
(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,
JCPenney Outlet
Shops at Sunset 75% 9/98 $143 (2) 500,000
Place
South Miami, FL
Anchors/Major Tenants: AMC 24 Theatre, NIKETOWN, Barnes & Noble,
IMAX Theatre, Virgin Megastore Z Gallerie
Twin Palms, GameWorks
Projects Under
Development
Lakeline Plaza 50% Phase I- $39 (2) 391,000
Austin, TX 5/98
Phase II-
11/98
Anchors/Major Tenants: Office Max, Toys "R" Us, Linens'N Things, TJMaxx,
Old Navy
Muncie Plaza 100% Spring $15 (2) 200,000
Muncie, IN 1998
Anchors/Major Tenants: Kohl's, TJMaxx, Office Max
(1) As of February 28, 1997.
(2) Leasing still in preliminary stage.
(3) In January 1997, SDG acquired an additional 1.3% interest
in Arizona Mills.
<PAGE> 29 of 38
=========================================================================
SIMON DeBARTOLO
GROUP
Renovation/Expansion
Activities
As of December 31,
1996
Total
SDG Projected Existing
Mall/ Ownership Anticipated Cost Year GLA
Location Percentage Completion (in Built (sq. ft.)
millions)
Projects Under
Construction
The Florida Mall 50% 11/96 $104 1986 1,119,726
Orlando, FL (Phase I)
(Expansion) Winter 1998
(Phase II)
Scope of Phase I
Construction: includes
the
addition of
Saks Fifth
Avenue;
Phase II
includes
addition of
200,000 sq.
ft.
Burdines
and 180,000
sq. ft. of
shops with
expansions
to Sears,
JCPenney,
Dillard's,
and Gayfers
The Forum Shops at 55% 8/97 $89 1992 242,031
Caesars
Las Vegas, NV
(Expansion)
Scope of Addition of
Construction: 235,000 sq.
ft.
(including
mezzanine),
95% leased
and
committed;
tenants
include
Virgin
Records,
FAO
Schwarz,
Cheesecake
Factory and
NIKETOWN
Aventura Mall 33.3% 12/97 $91 1983 987,294
Miami, FL
(Expansion)
Scope of Additions
Construction: of 252,000
sq. ft.
Bloomingdal
e's,
255,000 sq.
ft. of
small
shops,
77,948 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
Projects Under
Development
North East Mall 100% 1999 $150 1971 1,141,585
Hurst, TX
(Renovation/Expansion)
Scope of Additions
Construction: of second
level
consisting
of 200,000
square foot
small shop
expansion,
160,000 sq.
ft.
Nordstrom
and one
additional
department
store.
Anchor
expansions/
renovations
of
Dillard's,
Sears,
Montgomery
Ward, and
JCPenney
and
addition of
a
freestandin
g
entertainme
nt complex.
Mission Viejo Mall 100% 1999 $100 1979 816,815
Mission Viejo, CA
(Renovation/Expansion)
Scope of Additions
Construction: of 180,000
sq. ft.
Nordstrom,
130,000 sq.
ft. of
small
shops,
renovation
with new
food court,
Macy's
60,000 sq.
ft.
expansion,
Montgomery
Ward
recapture
<PAGE> 30 of 38
=========================================================================
SIMON DeBARTOLO GROUP
Other Renovation/Expansion Activities
Projects Under Construction
Anticipated
Name/Location Completion Scope of Construction
Smith Haven Mall 3/97 JCPenney will replace Steinbachs
Long Island, NY
St. Charles Towne 4/97 Kohl's 100,000 sf addition
Center
Waldorf, MD
Lafayette Square 7/97 Remodel with new food court; new
Indianapolis, IN Waccamaw; L.S. Ayres expansion
Orange Park Mall 8/97 24 screen theatre addition
Jacksonville, FL
Alton Square 10/97 New Sears; renovation
Alton, IL
Chautauqua Mall 11/97 Remodel with new food court;
Jamestown, NY Woolworth recapture; new JCPenney
and Bon-Ton
East Towne Mall 11/97 Renovation of "O" section and
Knoxville, TN expansion of existing cinema
Northgate Mall 11/97 Renovation with new food court
Seattle, WA
Richmond Square 11/97 New Dillard's; food cluster and
Richmond, IN renovation
Southern Park 11/97 Remodel with new food court; GLA
Mall expansion; new cinema
Youngstown, OH
West Town Mall 3/98 New cinema; new parking deck
Knoxville, TN
(1) Total anticipated cost of the above projects is $112 million.
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SIMON DeBARTOLO GROUP
Capital Expenditures
For the Year Ended December 31, 1996(1)
(In millions)
Joint Venture Properties
Consolidated SDG's
Properties Total Share
Acquisitions $56.1 $4.1 -
New Developments 80.1 215.0 $88.5
Renovations and Expansions 86.3 10.8 6.2
Tenant Allowances-Retail 24.0 2.9 0.9
Tenant Allowances-Office 6.1(2) - -
Capital Expenditures
Recovered from Tenants 11.4 1.1 0.3
Other (3) 3.5 1.0 0.3
Totals $267.5 $234.9 $96.2
(1)Not adjusted to give effect to the Merger prior to August 9, 1996, i.e.
includes only SPG costs prior to Merger.
(2)Includes $3.3 million in tenant improvements to be paid over a 7-year
period: $500,000/year from 1996 to 2000 and $400,000 to be paid in 2001
and 2002.
(3)Primarily represents capital expenditures not recovered from tenants.
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SIMON DeBARTOLO GROUP
Gains on Sales of Peripheral Land
As of December 31, 1996(1)
(In millions)
Year Ended
December 31,
1996 1995
Consolidated Properties $7.2 $2.8
SDG's Share of Joint Venture
Properties 2.0 1.5
Totals $9.2 $4.3
(1) Not adjusted to give effect to the Merger prior to August 9, 1996, i.e.
includes only SPG gains prior to Merger.
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David Simon:
Welcome to our year-end earnings teleconference. With me are Rick Sokolov and
Steve Sterrett. Today we are going to give a brief overview of year-end
operational and financial results. We will update you on the projects that
opened during the fourth quarter and the current status of our development and
redevelopment activities. We will also provide a brief overview of financing
activities.
First let me state that, given the activity level we encountered last year, we
are very pleased with our results. It was a yeomen's effort on behalf of the
company to not only hit our numbers, but to also successfully manage
integration. We were also able to maintain our development and redevelopment
schedule without missing a beat. Overall, we are very pleased as to where the
company is positioned, not only for 1997, but for the future.
The company's share of FFO for the year was $172.5 million, an increase of 46%
over 1995. The increase on a per share basis was 9.3%, to $2.34 per share from
$2.14, based upon the new definition of FFO. The company's share of FFO for
the quarter was $66.2 million, an increase of 79.4%. This was a 9.5% increase
on a per share basis from $0.63 in the fourth quarter of 1995, to $0.69 in the
fourth quarter of 1996. On a per share basis, the sum of our quarterly results
exceeded our annual results by $0.04. This is due to the relationship between
the seasonal nature of the income stream in the regional mall business and our
issuance of additional shares in 1996 to consummate the merger.
The following operational statistics are reported on a combined basis for the
Simon and DeBartolo portfolios. We will be issuing our traditional 8-K which
will provide the Simon and DeBartolo portfolio information separately and on a
combined basis. This information will be forthcoming in the next couple of
weeks.
Our regional mall occupancy was 84.7%, down eight tenths of one percent from a
year ago. Again, the major factor influencing this was the fallout from 1995
and 1996 tenant bankruptcies. We lost 1.2 million square feet (approximately 4%
of our small shop GLA) due to bankruptcies. For 1997, we anticipate a lower
loss of square footage due to bankruptcies than was incurred in 1995 and 1996.
We are very pleased with our overall leasing activity in 1996. We leased over
5 million square feet in the combined portfolio. We have a very strong backlog
in our system today, and I think that as we begin to process more leases and
continue to integrate the Simon and DeBartolo leasing personnel, there is more
productivity that we can expect, above and beyond the 5 million square foot
level experienced in 1996.
There are many benefits available to us as our redevelopment projects are
completed. Tenant allowances paid on the operational side of the total
portfolio went from $24 million in 1995 to $28 million in 1996, even though we
had 5 million square feet of productivity. We were able to significantly
increase our leasing productivity without materially increasing our tenant
allowance numbers. Our average base rent grew in the regional mall portfolio
to $20.68, up 7.8% from $19.18 one year ago. Our releasing spreads were just
short of $5.00 at $4.86, which represents a 25.9% spread. Our occupancy cost
decreased slightly to 11.4% which we believe was primarily a factor of the
tremendous growth in sales in our malls. Total sales volume in our regional
malls was $6.47 billion, up 6.1% from $6.1 billion in 1995. On a per square
foot basis, we averaged $290 per square foot, an increase of 5.9%, which had a
tremendous impact on our ability to maintain occupancy costs. At the same
time, we were able to increase our base rents.
We had very impressive growth of 7.2% in our comparable sales per square foot.
We believe these sales gains are among the strongest in the industry and are
reflective of our retenanting efforts which focus on strong growth performers
and the elimination of poor performing tenants. We have been doing a lot of
business with the Gap, The Buckle, Gadzooks, Pacific Sunwear, Bath and Body,
Finish Line and Victoria's Secret, which are among the highest producing
tenants. This sales momentum will translate to leasing momentum going into
1997.
On the 1996 operational side, we maintained our occupancy cost level and
completed a significant amount of leasing activity. While we did have a set-
back in occupancy as a result of bankruptcies, I think we are poised to make it
up in 1997 and increase our occupancy. Our redevelopment activity is moving
forward and the integration process is virtually complete, except for certain
back office functions that will be integrated by the end of the second quarter.
I am pleased with our position going forward. With that said, I'll turn it
over to Rick to give you an update on the development side.
Rick Sokolov
We tried to give you a substantial amount of detail in the press release and
will give you still more detail in the 8-K. The 4th quarter of 1996 was very
active. We opened our first venture with Mills in Ontario (Los Angeles). This
1.3 million square foot mall has been very well received. We are very excited
about our Mills ventures, and I think you'll see that we are expanding that
relationship.
On November 15, 1996, we opened Indian River Mall in Vero Beach. This 860,000
square foot super regional mall is anchored by Burdines, Dillards, Sears,
JCPenney and a 24 screen AMC Theater that is opening in March of this year.
This continues our very strong belief in the state of Florida and our
commitment to that state. We are now the owners or managers of 30 malls and
community centers in this high growth state. Indian River is performing to our
expectations and was approximately 85% leased and committed at December 31.
The third project opened in the last quarter was the Tower Shops. This is the
retail component of the Stratosphere, distinct from the casino and hotel
complex. Obviously there have been documented troubles of the overall project,
but our small retail component has been very successful. Sales were trending
at $540 per square foot, and it is 94% leased. The recent prepackaged
bankruptcy of Stratosphere Corporation had no adverse impact on our project,
and we're hopeful that Tower Shops will help revitalize the overall project.
The new development pipeline continues to be very strong. In 1997, we will
open Indian River Commons which is right next to our new mall in Vero Beach.
This 265,000 square foot community center is anchored by Lowes. We have the
Source opening in Long Island, which is a 730,000 square foot specialty center
being built adjacent to a highly productive Fortunoff. We will open two Mills
projects: Arizona Mills in Tempe and Grapevine Mills in the suburbs of
Dallas/Fort Worth, expanding on our relationship with The Mills Corporation.
The pre-leasing activity on all projects has been very encouraging.
In 1998, we are opening the Shops at Sunset Place. This is a 500,000 square
foot specialty center in South Miami, which was also substantially pre-leased
before construction started. It features marquis restaurants, a large theater
and signature retailers.
Finally, we've got three community and power centers in the final stages of
predevelopment in Austin, Texas; Muncie, Indiana; and Hurst, Texas. Each of
these is adjacent to our existing regional malls.
We continue to spend a lot of capital in making our portfolio better by
increasing the market share of our properties. We have over 30 projects under
construction or in the final stages of pre-construction development at this
time. Rather than going into detail on all of them, I just wanted to highlight
several of the major ones that are happening in premier centers in the United
States.
* The Forum Shops at Caesars is being expanded by 235,000 square feet,
opening in September.
* At Florida Mall in Orlando, we're opening an additional department
store, 180,000 square feet of small shops and all of our department
stores are expanding. This expansion activity follows the opening of
Saks which opened in November of last year.
* We're in the process of adding Bloomingdale's at Aventura Mall in
Miami, along with 255,000 square feet of small shops, a 24 screen AMC
theater, plus expansions of Macy's, JCPenney, Lord & Taylors, and
Sears. Again, this is a mall with sales in excess of $550 per square
foot.
* Two other projects that are going to commence development in 1997 for
openings in 1999 are: Mission Viejo Mall, in Mission Viejo,
California, where we've already announced the addition of Nordstrom and
substantial additional GLA, and North East Mall in the Dallas suburb of
Hurst, where we are adding Nordstrom and another department store. It
is important to point out that both North East and Mission Viejo have
been substantially de-leased. Their occupancy and sales figures are
below our mall portfolio averages in anticipation of substantial
retenanting and remerchandising of these projects into dominant
regional malls.
I'll go back to David to give you a little more information on our financing
activities in the last quarter.
David Simon
As you know, we've been very active in 1996 with respect to our financing plan.
I think that we've been the cognoscente of balancing balance sheet and growth.
We issued $350 million of unsecured debt as well as $200 million of perpetual
preferred stock. Both of these offerings were extremely well-received, and we
were very aggressive in pricing hurdles.
We also continue to be very aggressive in refinancing our existing secured
debt. Given our position and size in the industry, we have significant avenues
of access to capital that we think are unequaled in the industry. We are
currently in the final stages of implementing a $300 million medium-term note
program that should be in place at the end of February. We will look to
complete two major financings in 1997, both of which are in the several hundred
million dollar range and will add to our overall FFO growth.
Before I open the call to questions, let me just say that 1996 was a very
gratifying year. A very hard year in terms of work efforts, but we are very
pleased with the performance both financially and in our operating performance.
Obviously, we did take a hit in occupancy as a direct result of the bankruptcy
situation, which was not uncommon in the industry. However, we believe that
with our 1997 focus and our momentum in terms of sales growth, we'll be able to
increase occupancy from 1996 levels.
Now that we've had seven months of operations after the merger, we're firmly
convinced that this was a transaction that will add significant value to our
shareholders; and we expect solid returns in the future as we continue to
finalize the integration and increase the performance at the portfolio level.
As I said , we are virtually finished with all of the integration activities,
except for certain support functions that will be completed in the second
quarter of 1997. We did this at a record pace, given the size of the
transaction.
I think we will also see less turbulence in the retail world as compared to the
1995 and 1996 levels. There are many tenants that are in a major growth stage.
I think the mall environment also has regained a tremendous amount of
receptivity from big box tenants and theaters and entertainment resources. As
you know, we have been the absolute leader in that whole area, and we will
continue to take advantage of our position. We are working on several
acquisition opportunities, and I think that you'll see certain announcements
from us in that area in the future. We have also taken an aggressive review of
certain assets that are no longer core and have certain assets that are in the
process of being disposed. I think you'll see a narrowing of our focus and a
sale of certain non-core assets.
Size in our business, we believe, continues to be an absolute distinct
competitive advantage. It gives us access to capital, it creates portfolio
diversity, our risk is minimized in terms of any particular problems coming
from one particular property. It solidifies and reinforces our tenant
relationships because we are the largest landlord of most retailers in the mall
industry, and it allows us to take advantage of certain strategic initiatives
that we'll be able to capitalize on and generate income from in a meaningful
way based upon our 1.4 billion annual shopper visits. There are a number of
models out there, outside of the traditional real estate industry, that I think
you'll see SDG take advantage of given our purchasing power, as well as the
ability to market directly to the ultimate consumer. We think that with our
size and our strategy, we helped pioneer other efforts in our business that are
being validated. We continue to see REIT's in other sectors look to size as an
opportunity to grow shareholder value with examples being EQR in their
acquisition of Wellsford, Beacon in the office sector, and Starwood in lodging.
I also think the industry logic of size continues to be reinforced in corporate
America. We expect to be the leader in that area again given the fact that 80%
of our customer base, for all intensive purposes, comes from national accounts.
We are happy with where we are and are poised to continue to grow the overall
portfolio through better leasing and better redevelopment opportunities that
exist and are embedded in our portfolio. We have a lot of initiatives in
place, and we expect to continue the momentum.
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