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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) : August 14, 1997
SIMON DeBARTOLO GROUP, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-12618 35-1901999
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
115 WEST WASHINGTON STREET
INDIANAPOLIS, INDIANA 46204
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 317.636.1600
Not Applicable
(Former name or former address, if changed since last report)
<PAGE> 01
Item 5. Other Events
On August 14, 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 June 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 June 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: August 14, 1997
SIMON DeBARTOLO GROUP, INC.
By: \s\ Stephen E. Sterrett
--------------------
Stephen E. Sterrett,
Senior Vice President and Treasurer
Principal Financial Officer
<PAGE> 03
SIMON DeBARTOLO GROUP
SUPPLEMENTAL INFORMATION
Table of Contents
As of June 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 Mortgage 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 - July 31, 1997 31-36
<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.
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 114 million square feet of gross leasable area (GLA)
in 33 states. The Company, together with its affiliated management companies,
manages approximately 130 million square feet of GLA in retail and mixed-use
properties.
This package was prepared to provide (1) ownership information, (2) certain
operational information, and (3) debt information as of June 30, 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)
June 30, 1997
SIMON DeBARTOLO GROUP, L.P. and Simon Property Group, L.P.
(the "Operating Partnership")
Total Common Shares and Units Outstanding = 158,630,665
Operational Assets:
-------------------
114 Regional Malls
65 Community Shopping Centers
7 Specialty and Mixed-Use Properties
Partners: %
--------- --
Simon DeBartolo Group, Inc.
Public Shareholders 59.3%
Simon Family 2.1%
DeBartolo Family 0.0%
Executive Management 0.2%
-----
61.6%
-----
Limited Partners of Simon
Simon Family 21.8%
DeBartolo Family 14.0%
Other Limited Partners 2.5%
Executive Management 0.1%
-----
38.4%
-----
100.0%
Simon DeBartolo Group, Inc. (the "Company")(2)
61.6% General Partner of Operating Partnership
Common Shareholders Shares %
------------------- --------- --
Public Shareholders 93,933,565 96.2%
Simon Family 3,329,821 3.4%
DeBartolo Family 19,832 0.0%
Executive Management 373,397 0.4%
---------- ------
97,656,615 100.0%
Limited Partners ("Limited Partners")
38.4% 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 0.3%
Other Limited Partners 4,028,209 6.6%
---------- ------
60,974,050 100.0%
(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 June 30, 1997
Operating
Partnership Company
Units(1)Common Shares
Number Outstanding at December 31, 1996 60,974,050 96,880,415
March 26 Award of Restricted Stock (Stock
Incentive Program) - 507,549
Issuance of Stock in connection with the Merger - 50,422
Issuance of Stock for Employee Stock Option
Exercises - 218,229
Number Outstanding at June 30, 1997 60,974,050 97,656,615
Total Common Shares and Units Outstanding at June 30, 1997:
158,630,665(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
Number of
Offering Shares
------- ------
Outstanding as of June 30, 1997
- -------------------------------
Series A - private placement completed on
October 27, 1995(1) $100,000,000 4,000,000
Series B - public offering completed on
September 27, 1996(2) $200,000,000 8,000,000
Issued Subsequent to June 30, 1997
- ----------------------------------
Series C - public offering completed on
July 9, 1997(3) $150,000,000 3,000,000
(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.
(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 June 30, 1997, was $25.875.
(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
Shares.
<PAGE> 08
SIMON DeBARTOLO GROUP
Reconciliation of Net Income to Funds From
Operations ("FFO") (1)
As of June 30, 1997
(In thousands, except per share data)
Six Months Ended
June 30,
The Operating Partnership 1997 1996
- ------------------------- ------ ------
Income of the Operating Partnership before
Extraordinary Items $91,475 $47,800
Plus: Depreciation and Amortization from
Consolidated Properties 87,086 51,038
Less: Minority Interest Portion of Depreciation
and Amortization and Extraordinary Items (2,514) (1,514)
Plus: SDG's Share of Depreciation, Amortization
and Extraordinary Items from Unconsolidated
Affiliates 18,010 5,950
Less: Preferred Dividends (12,813) (4,062)
Less: Gain on the Sale of Real Estate (20) -
Funds from Operations of the Operating Partnership $181,224 $99,212
Percent Increase 82.7%
Weighted Average Common Shares and Units
Outstanding 158,261 95,754
FFO per Share/Unit $1.15 $1.04
Percent Increase 10.6%
The Company
FFO Allocable to the Company $111,408 $60,619
Percent Increase 83.8%
Weighted Average Common Shares Outstanding 97,287 58,471
FFO per Share $1.15 $1.04
Percent Increase 10.6%
Distributions per Common Share/Unit $0.9975 $0.9850
(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.
<PAGE> 09
SIMON DeBARTOLO GROUP
Selected Financial Information
As of June 30, 1997
(In thousands, except as noted)
Six Months Ended
June 30,
1997 1996 % Change
-------- --------
Financial Highlights(1)
- -----------------------
Total Revenues - Consolidated Properties $487,469 $283,204 72.1%
Total EBITDA of Portfolio Properties $419,188 $231,981 80.7%
EBITDA After Minority Interest $338,957 $184,936 83.3%
Net Income Available to Common
Shareholders Before Extraordinary Items
$48,175 $26,663 80.7%
Net Income Available to Common
Shareholders per Share Before
Extraordinary Items $ 0.50 $ 0.45 11.1%
Funds from Operations of the Operating
Partnership $181,224 $99,212 82.7%
Funds from Operations Allocable to the
Company $111,408 $60,619 83.8%
Funds from Operations per Common Share $ 1.15 $ 1.04 10.6%
Common Stock Distributions, per Common
Share $0.9975 $0.9850 1.3%
Operational Statistics(2)
- -------------------------
Occupancy at End of Period:
Regional Malls (3) 85.2% 83.4% 1.8%
Community Shopping Centers (4) 92.4% 91.8% 0.6%
Average Base Rent per Square Foot:
Regional Malls (3) $ 20.94 $ 20.18 3.8%
Community Shopping Centers (4) $ 7.75 $ 7.44 4.2%
Total Tenant Sales Volume, in millions: (5)
Regional Malls (6) $ 2,902 $ 2,785 4.2%
Community Shopping Centers (4) $ 652 $ 668 -2.4%
Number of Properties Open at End of Period 186 183 1.6%
(1) Not adjusted to give effect to the Merger prior to August 9, 1996.
(2) Based upon the business and properties of Simon Property Group and DRC on
a combined basis to give effect to the Merger.
(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.
<PAGE> 10
SIMON DeBARTOLO GROUP
Selected Financial Information
As of June 30, 1997
(In thousands, except as noted)
June 30, June 30,
Equity Information (1) 1997 1996
- ---------------------------- --------- -----------
Units Outstanding at End of Period 60,974 37,283
Common Shares Outstanding at End of
Period 97,657 58,560
--------- -----------
Total Common Shares and Units Outstanding
at End of Period 158,631 95,843
========= =========
Weighted Average Units Outstanding for
the Period 60,974 37,283
Weighted Average Common Shares
Outstanding for the Period 97,287 58,471
--------- -----------
Weighted Average Common Shares and
Units Outstanding for the Period 158,261 95,754
========= =========
June 30, December 31,
Selected Balance Sheet Information 1997 1996
- --------------------------------------- --------- -----------
Total Assets $6,046,434 $5,895,910
Consolidated Debt $3,928,662 $3,681,984
Joint Venture Debt $1,274,586 $1,121,804
SDG Share of Joint Venture Debt $ 498,726 $ 448,218
Debt-to-Market Capitalization
- ----------------------------------------
Common Stock Price at End of Period $ 32.00 $ 31.00
Equity Market Capitalization (2) $5,376,181 $5,193,488
Total Capitalization - Consolidated Debt
Only $9,304,843 $8,875,472
Debt-to-Market Capitalization -
Consolidated Only 42.2% 41.5%
Total Capitalization - Including SDG
Share of JV Debt (millions) $9,803,569 $9,323,690
Debt-to-Market Capitalization - Including 45.2% 44.3%
SDG Share of JV Debt
(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> 11
SIMON DeBARTOLO GROUP
Portfolio GLA, Occupancy & Rent Data
As of June 30, 1997
Avg. Annualized
% of OwnedBase Rent Per
Total % of GLA WhichLeased Sq. Ft.
Type of Property GLA-Sq. Ft. Owned GLA Owned GLA is Leased of Owned GLA
Regional Malls
- -Anchor 59,687,742 19,927,154 29.3% 97.2% $3.20
- -Mall Store 32,431,694 32,431,696 47.8% 85.0% 21.35
- -Freestanding 1,653,556 813,811 1.2% 95.0% 7.00
---------- ---------- -----
Subtotal 34,085,250 33,245,507 49.0% 85.2% $20.94
Regional Mall Total 93,772,992 53,172,661 78.3% 89.7% $13.60
Community Shopping Centers
- -Anchor 10,907,597 6,685,931 9.9% 94.4% $6.31
- -Mall Store 3,621,162 3,540,072 5.2% 88.4% 10.72
- -Freestanding 787,223 292,584 0.4% 97.1% 7.34
Community Ctr. Total 15,315,982 10,518,587 15.5% 92.4% $7.75
Office Portion of
Mixed-Use Properties 2,002,188 2,002,188 3.0% 93.5% $18.98
Mills-type Properties
and Other 2,723,020 2,191,237 3.2%
GRAND TOTAL 113,814,182 67,884,673 100.0%
Occupancy History
Community
As of Regional Malls(1) Shopping Centers(2)
----- ----------------- -------------------
6/30/97 85.2% 92.4%
6/30/96 83.4% 91.8%
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.
<PAGE> 12
SIMON DeBARTOLO GROUP
Rent Information
As of June 30, 1997
Average Base Rent
- --------------
Mall & Freestanding % Community %
As of Stores at Regional Malls Change Shopping Centers Change
- ------- ----------------------- ----- ---------------- ------
6/30/97 $20.94 3.8% $7.75 4.2%
6/30/96 20.18 - 7.44 -
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
Rental Rates
Base Rent (2)
-------------
Store Openings Store Closings Amount of Change
Year During Period During Period Dollar Percentage
- ---- ------------- ------------- ------ ----------
Regional Malls:
- ---------------
1997 (YTD) $22.93 $19.62 $3.31 16.9%
1996 23.59 18.73 4.86 25.9
Community Shopping Centers:
- ---------------------------
1997 (YTD) $8.81 $9.86 ($1.05) (10.6)%
1996 8.18 6.16 2.02 32.8
(1) On a pro forma combined basis giving effect to the Merger with DRC for
periods presented.
(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> 13
SIMON DeBARTOLO GROUP
Lease Expirations(1)
As of June 30, 1997
Number of Square Avg. Base Rent
Year Leases Expiring Feet per Square
Foot
at 6/30/97
Regional Malls -
Mall &
Freestanding
Stores
1997 (7/1 - 12/31) 219 432,823 19.62
1998 1,081 2,173,171 22.65
1999 1,074 2,314,406 21.98
2000 1,032 2,309,445 22.93
2001 943 2,377,268 20.72
2002 722 2,155,270 20.27
2003 715 1,981,029 22.68
2004 683 2,171,562 22.22
2005 650 2,250,693 20.48
2006 892 2,692,795 23.22
2007 489 1,429,993 24.26
TOTALS 8,500 22,288,455 $22.04
Regional Malls -
Anchor Tenants
1997 (7/1 - 12/31) 2 308,212 1.17
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 7 761,206 1.92
2003 6 697,254 3.61
2004 13 1,130,439 4.28
2005 9 1,177,471 2.73
2006 11 1,284,004 3.69
2007 3 282,487 3.03
TOTALS 96 12,460,069 $2.42
Community Centers
- Mall Stores &
Freestanding
Stores
1997 (7/1 - 12/31) 26 70,044 9.51
1998 176 489,175 10.64
1999 167 495,091 11.07
2000 158 521,924 10.96
2001 117 397,002 11.03
2002 81 338,317 10.33
2003 27 159,432 10.99
2004 23 132,943 11.79
2005 27 174,708 10.19
2006 17 138,809 9.25
2007 8 101,785 8.12
TOTALS 827 3,019,230 $10.65
<PAGE> 14
Community Centers
- Anchor Tenants
1997 (7/1 - 12/31) 2 52,373 6.45
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 6.31
2003 9 298,498 6.36
2004 7 183,317 6.49
2005 11 630,445 5.61
2006 9 520,910 5.77
2007 8 495,653 5.88
TOTALS 80 3,447,611 $5.51
(1) Does not consider the impact of options that may be contained in leases.
<PAGE> 15
Simon DeBartolo Group
Scheduled Debt Amortization and Maturities
As of June 30, 1997
(In thousands)
Scheduled Scheduled
Year Amortization Maturities Total
Consolidated
Mortgage Debt
1997 8,925 30,000 38,925
1998 18,421 293,880 312,301
1999 22,410 221,180 243,591
2000 24,763 434,876 459,639
2001 22,631 634,486 657,117
2002 19,334 407,335 426,669
2003 12,090 369,280 381,371
2004 8,259 160,279 168,539
2005 7,602 35,944 43,546
2006 7,253 48,048 55,301
Thereafter 9,512 245,084 254,596
$ 161,201 $2,880,392 $3,041,595
Corporate Credit
Facility
1999 0 370,000 370,000
Unsecured Debt
2003 0 100,000 100,000
2005 0 100,000 100,000
2006 0 305,000 305,000
Adjustment of
Indebtedness to
Fair Mkt Value, Net 12,067 0 12,067
Total Consolidated Debt $ 173,268 $3,755,392 $3,928,662
Joint Ventures
Mortgage Debt
1997 1,155 31,696 32,851
1998 2,168 175,000 177,168
1999 2,357 134,244 136,601
2000 2,357 85,089 87,446
2001 4,651 141,050 145,701
2002 3,789 216,559 220,348
2003 2,778 172,444 175,222
2004 2,986 0 2,986
2005 262 160,471 160,733
2006 0 131,249 131,249
Thereafter 0 4,282 4,282
Total Joint Venture
Debt $ 22,503 $1,252,084 $1,274,586
<PAGE> 16
SIMON DeBARTOLO GROUP
Summary of Indebtedness
As of June 30, 1997
(In thousands)
Total SDG's
Principal Share of Weighted
Avg
Balance Loan Balance Interest
Rate
Consolidated Indebtedness
Mortgage Debt
Fixed Rate 2,476,588 2,386,338 7.71%
Variable Rate 565,007 524,034 6.61%
Subtotal Mortgage Debt 3,041,595 2,910,372 7.52%
Unsecured Debt
Fixed Rate 450,000 450,000 6.91%
Variable Rate 425,000 425,000 6.57%
Subtotal Unsecured Debt 875,000 875,000 6.74%
Adjustment to Fair Market Value - 11,568 11,568 N/A
Fixed Rate
Adjustment to Fair Market Value - 499 499 N/A
Variable Rate
Consolidated Mortgage and Other Notes 3,928,662 3,797,439 7.31%
Payable
Joint Venture Mortgage Indebtedness
Fixed Rate 615,415 253,254 7.64%
Variable Rate 659,170 245,473 6.77%
Joint Venture Mortgage and Other Notes 1,274,586 498,726 7.21%
Payable
SDG's Share of Total Indebtedness 4,296,165 7.30%
<PAGE> 17
SIMON DeBARTOLO GROUP
Summary of Indebtedness By Maturity
As of June 30, 1997
(In thousands)
<TABLE>
Total SDG's Weighted
Avg
Property Maturity Interest Principal Share of Interest
Rate
Name Date Rate Balance Loan by Year
Balance
<S> <C> <C> <C> <C> <C>
Consolidated
Indebtedness
Fixed Rate Mortgage
Debt:
White Oaks Mall - 3/1/98 7.70% 16,500 9,075
Ross Park Mall 8/15/98 6.14% 60,000 60,000
Subtotal 1998 76,500 69,075 6.34%
West Ridge Mall 6/1/99 8.00% 47,777 47,777
Ingram Park Mall - 2 11/1/99 9.63% 7,000 7,000
Ingram Park Mall - 1 12/1/99 8.10% 48,872 48,872
Barton Creek Square 12/30/99 8.10% 63,246 63,246
La Plaza Mall 12/30/99 8.25% 50,311 50,311
Subtotal 1999 217,206 217,206 8.16%
Windsor Park Mall - 1 6/1/00 8.00% 5,941 5,941
Trolley Square - 1 7/23/00 5.81% 19,000 17,100
North East Mall 9/1/00 10.00% 22,324 22,324
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 189,878 187,978 8.61%
Biltmore Square 1/1/01 7.15% 27,939 27,939
Chesapeake Square 1/1/01 7.28% 50,087 50,087
Port Charlotte Town 1/1/01 7.28% 46,309 46,309
Center
Great Lakes Mall - 1 3/15/01 6.74% 53,779 53,779
Great Lakes Mall - 2 3/15/01 7.07% 8,665 8,665
DCP - Securitized Debt (1) 3/1/01 8.12% 365,864 365,864
Fixed
Subtotal 2001 552,643 552,643 7.77%
Lima Mall - 1 3/1/02 7.12% 14,471 14,471
Lima Mall - 2 3/1/02 7.12% 4,821 4,821
Columbia Center 3/15/02 7.62% 43,123 43,123
Northgate Shopping 3/15/02 7.62% 80,524 80,524
Center
Tacoma Mall 3/15/02 7.62% 94,215 94,215
Crossroads Mall 7/31/02 7.75% 41,440 41,440
North Riverside Park 9/1/02 9.38% 4,067 4,067
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 297,852 297,852 7.69%
Battlefield Mall 6/1/03 7.50% 50,239 50,239
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% 47,219 28,331
Subtotal 2003 401,207 382,319 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% 43,209 43,209
Greenwood Park Mall 7/1/04 7.00% 36,188 36,188
Tippecanoe Mall 7/1/04 8.45% 47,290 47,290
Towne East Square 7/1/04 7.00% 57,127 57,127
Subtotal 2004 276,138 237,901 7.33%
Melbourne Square 2/1/05 7.42% 40,014 40,014
Subtotal 2005 40,014 40,014 7.42%
Treasure Coast Mall 1/1/06 7.42% 54,244 54,244
Gulf View Square 10/1/06 8.25% 38,402 38,402
Paddock Mall 10/1/06 8.25% 30,543 30,543
Subtotal 2006 123,189 123,189 7.88%
Cielo Vista Mall - 1 5/1/07 9.25% 56,449 56,449
McCain Mall 5/1/07 9.25% 26,195 26,195
Valle Vista Mall 5/1/07 9.25% 34,694 34,694
University Park Mall 10/1/07 7.43% 59,500 35,700
Subtotal 2007 176,839 153,039 8.83%
Randall Park Mall 1/1/11 9.25% 33,775 33,775
Subtotal 2011 33,775 33,775 9.25%
Windsor Park Mall - 2 5/1/12 8.00% 8,952 8,952
Subtotal 2012 8,952 8,952 8.00%
O'Hare International 12/31/13 7.50% 27,376 27,376
Center
Subtotal 2013 27,376 27,376 7.50%
Chesapeake Centre 5/15/15 8.44% 6,563 6,563
Grove at Lakeland 5/15/15 8.44% 3,750 3,750
Square, The
Terrace at Florida Mall, 5/15/15 8.44% 4,688 4,688
The
Subtotal 2015 15,000 15,000 8.44%
Sunland Park Mall 1/1/26 8.63% 40,019 40,019
Subtotal 2026 40,019 40,019 8.63%
Total Consolidated Fixed 2,476,588 2,386,338 7.71%
Rate Mortgage Debt
Variable Rate Mortgage
Debt:
Eastland Mall 11/1/97 7.19% 30,000 30,000
Subtotal 1997 30,000 30,000 7.19%
Lincolnwood Town Center 1/31/98 6.94% 63,000 63,000
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 217,380 217,380 6.55%
Jefferson Valley Mall 1/12/00 6.24% 50,000 50,000
Shops at Sunset Place, 6/30/00 6.94% 7,687 5,765
The
Trolley Square - 2 7/23/00 7.19% 4,641 4,177
Trolley Square - 3 7/23/00 7.19% 3,500 3,150
Subtotal 2000 65,828 63,092 6.41%
Crystal River 1/1/01 7.69% 16,000 16,000
DCP - Securitized Debt (1) 3/1/01 6.27% 87,200 87,200
Floating
Mainland Peripheral 12/31/01 7.69% 1,290 1,290
Subtotal 2001 104,490 104,490 6.50%
Highland Lakes Center 3/1/02 7.19% 14,377 14,377
Mainland Crossing 3/31/02 7.19% 2,226 2,226
Mall of the Mainland 3/31/02 7.69% 40,706 40,706
Subtotal 2002 57,309 57,309 7.54%
Forum - Class A-2 5/15/04 5.99% 85,000 48,887
Forum - Class A-3 5/15/04 5.99% 5,000 2,876
Subtotal 2004 90,000 51,763 5.99%
Total Variable Rate 565,007 524,034 6.61%
Mortgage Debt
Total Consolidated 3,041,595 2,910,372 7.52%
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 (MTN) 6/24/05 7.13% 100,000 100,000
Subtotal 2005 100,000 100,000 7.13%
SDG, LP (Bonds) 11/15/06 6.88% 250,000 250,000
Subtotal 2006 250,000 250,000 6.88%
Total Unsecured Fixed 450,000 450,000 6.91%
Rate Debt
Variable Rate Unsecured
Debt:
SDG, L.P. Unsecured Loan 9/25/98 6.44% 55,000 55,000
Subtotal 1998 55,000 55,000 6.44%
Corporate Credit 09/27/99 6.59% 370,000 370,000
Facility
Subtotal 1999 370,000 370,000 6.59%
Total Unsecured Variable 425,000 425,000 6.57%
Rate Debt
Total Unsecured Debt 875,000 875,000 6.74%
Adjustment to Fair 11,568 11,568 N/A
Market Value - Fixed
Rate
Adjustment to Fair 499 499 N/A
Market Value - Variable
Rate
Total Consolidated Debt 3,928,662 3,797,439 7.31%
Joint Venture
Fixed Rate Mortgage
Debt:
Century III Mall - 2 12/1/97 7.00% 233 117
Subtotal 1997 233 117 7.00%
Northfield Square 4/1/00 9.52% 24,497 24,497
Coral Square 12/1/00 7.40% 53,300 26,650
Subtotal 2000 77,797 51,147 8.42%
Palm Beach Mall 12/15/02 8.21% 51,778 25,889
Subtotal 2002 51,778 25,889 8.21%
Avenues, The 5/15/03 8.36% 58,729 14,682
Century III Mall - 1 7/1/03 6.78% 66,000 33,000
Lakeland Square 12/22/03 7.26% 53,217 26,609
Subtotal 2003 177,946 74,291 7.26%
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 170,500 63,050 7.05%
Great Northeast Plaza 6/1/06 9.04% 17,878 8,939
Smith Haven Mall 6/1/06 7.86% 115,000 28,750
Subtotal 2006 132,878 37,689 8.14%
Ontario Mills -1 (3) 12/28/09 0.00% 4,282 1,071 0.00%
Subtotal 2009 4,282 1,071
Total Joint Venture 615,415 253,254 7.64%
Fixed Rate Mortgage
Debt
Variable Rate Mortgage
Debt:
Aventura Mall - 3 8/1/97 8.50% 25,496 8,499
Aventura Mall - 2 8/7/97 9.75% 6,200 2,067
Subtotal 1997 31,696 10,565 8.74%
Aventura Mall - 1 8/8/98 6.65% 100,000 33,333
Florida Mall, The 12/1/98 5.93% 75,000 37,500
Subtotal 1998 175,000 70,833 6.27%
Tower Shops, The (2) 3/13/99 7.69% 15,755 7,877
Indian River Commons 3/29/99 6.94% 6,792 3,396
Indian River Mall (2) 3/29/99 6.94% 37,697 18,849
Lakeline Mall 5/16/99 6.06% 73,947 36,974
Subtotal 1999 134,191 67,096 6.54%
Lakeline Plaza - 2 6/6/00 6.06% 8,000 4,000
Subtotal 2000 8,000 4,000 6.06%
Circle Centre Mall 1/31/01 6.13% 60,000 8,802
Grapevine Mills 4/25/01 7.34% 6,207 2,297
Source, The 7/16/01 7.39% 81,050 40,525
Subtotal 2001 147,257 51,624 7.17%
Arizona Mills 2/1/02 6.99% 45,328 11,930
Ontario Mills (2) 2/6/02 7.08% 117,700 29,425
Subtotal 2002 163,028 41,355 7.05%
Total Joint Venture 659,170 245,473 6.77%
Variable Rate Debt
Total Joint Venture Debt 1,274,586 498,726 7.21%
SDG's Share of Total 5,203,247 4,296,165 7.30%
Indebtedness
(1) Secured by 17 centers previously owned by DRC.
(2) Two one-year options exist to extend maturity.
(3) Notes for purchase of land from Ontario Redevelopment Agency at 6%
commencing January 2000.
</TABLE>
<PAGE> 18-23
SIMON DeBARTOLO GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of June 30, 1997
(In thousands)
<TABLE>
Principal SDG SDG's Interest
Property Maturity Balance Ownership Share of Rate Terms of Terms of
Name Date 6/30/97 % Loan 6/30/97 Variable Interest Rate Protection
Balance Rate Agreement
<S> <C> <C> <C> <C> <C> <S>
Consolidated
Properties:
Secured Debt:
Eastland Mall 11/1/97 30,000 100.00% 30,000 7.19% LIBOR +
1.50%
Lincolnwood Town 1/31/98 63,000 100.00% 63,000 6.94% LIBOR +
Center 1.25%
Eastgate 12/31/98 22,929 100.00% 22,929 6.50% LIBOR + LIBOR capped at 5.0%
Consumer Mall 1.50% through maturity
Riverway - 1 12/31/98 85,571 100.00% 85,571 6.38% LIBOR + LIBOR capped at 5.0%
1.375% through maturity
Riverway - 2 12/31/98 45,880 100.00% 45,880 6.38% LIBOR + LIBOR capped at 5.0%
1.375% through maturity
Jefferson Valley 1/12/00 50,000 100.00% 50,000 6.24% LIBOR + LIBOR capped at 8.7%
Mall .55% through maturity
Shops at Sunset 6/30/00 7,687 75.00% 5,765 6.94% LIBOR +
Place, The 1.25%
Trolley Square 7/23/00 4,641 90.00% 4,177 7.19% LIBOR +
1.50%
Trolley Square 7/23/00 3,500 90.00% 3,150 7.19% LIBOR +
1.50%
Crystal River 1/1/01 16,000 100.00% 16,000 7.69% LIBOR +
2.00%
DCP - 3/1/01 87,200 100.00% 87,200 6.27% LIBOR + See Footnote (1).
Securitized Debt .56%
Floating
Mainland 12/31/01 1,290 100.00% 1,290 7.69% LIBOR +
Peripheral 2.00%
Highland Lakes 3/1/02 14,377 100.00% 14,377 7.19% LIBOR +
Center 1.50%
Mainland 3/31/02 2,226 100.00% 2,226 7.19% LIBOR +
Crossing 1.50%
Mall of the 3/31/02 40,706 100.00% 40,706 7.69% LIBOR +
Mainland 2.00%
Forum - Class A-2 5/15/04 85,000 57.51% 48,887 5.99% LIBOR + LIBOR Capped at 9.5%
.30% through maturity.
Forum - Class A-3 5/15/04 5,000 57.51% 2,876 5.99% LIBOR + LIBOR Capped at 9.5%
.30% through maturity.
Total
Consolidated
Secured Debt 565,007 524,034
Unsecured Debt:
Unsecured Loan 9/25/98 55,000 100.00% 55,000 6.44% LIBOR +
.75%
Revolving Credit 9/27/99 370,000 100.00% 370,000 6.13% LIBOR + Interest rate was reduced
Facility .75% to LIBOR plus 75 basis
points on April 14, 1997.
Total 425,000 425,000
Consolidated
Unsecured Debt
Adjustment of 499 499
Variable-Rate
Indebtedness to
FMV
Consolidated 990,506 949,533
Variable Rate
Debt
<PAGE> 24
Joint Venture
Properties:
Aventura Mall - 8/1/97 25,496 33.33% 8,499 8.50% Prime See Footnote (2).
Rate
Aventura Mall 8/7/97 6,200 33.33% 2,067 9.75% Prime +
1.25%
Aventura Mall 8/8/98 100,000 33.33% 33,333 6.65% Bank of
Tokyo CD
rate +
.90%
Florida Mall, 12/1/98 75,000 50.00% 37,500 5.93% 30-day
The Commerci
al paper
rate +
0.75%
Tower Shops, The 3/13/99 15,755 50.00% 7,877 7.69% LIBOR + Two one-year extensions
2.00% exist to extend maturity.
See Footnote (2).
Indian River 3/29/99 6,792 50.00% 3,396 6.94% LIBOR +
Commons 1.25%
Indian River 3/29/99 37,697 50.00% 18,849 6.94% LIBOR +
Mall 1.25%
Lakeline Mall 5/16/99 73,947 50.00% 36,974 6.06% LIBOR +
.375%
Lakeline Plaza - 6/6/00 8,000 50.00% 4,000 6.06% LIBOR +
.375%
Circle Centre 1/31/01 60,000 14.67% 8,802 6.13% LIBOR + LIBOR is capped at 8.81%.
Mall .44%
Grapevine Mills 4/25/01 6,207 37.00% 2,297 7.34% LIBOR +
1.65%
Source, The 7/16/01 81,050 50.00% 40,525 7.39% LIBOR +
1.70%
Arizona Mills 2/1/02 45,328 26.32% 11,930 6.99% LIBOR + LIBOR is capped at 9.5%.
1.30%
Ontario Mills -1 2/6/02 50,000 25.00% 12,500 7.37% LIBOR + LIBOR swapped at 6.37% on
1.00% the first 50,000 only.
See Footnote (2).
Ontario Mills -2 2/6/02 20,000 25.00% 5,000 6.69% LIBOR +
1.00%
Ontario Mills -3 2/6/02 47,700 25.00% 11,925 6.94% LIBOR +
1.25%
Total Joint
Venture
Properties 659,170 245,473
Total Variable
Mortgage and
Other
Indebtedness 1,649,676 1,195,005
</TABLE>
Footnotes:
(1) LIBOR is swapped at 5.71% on $87.2 million of debt from May 1997 through
April 2001. An interest rate cap was also purchased which limits LIBOR to
8.44% on $87.2 million of debt through March 2001 in order to provide
protection in the event LIBOR exceeds 8.44%.
(2) Rate can be reduced based upon project performance.
(3) The following table summarizes variable rate debt:
Total SDG Share
Swapped debt 87,200 87,200
Capped debt "in the money" 154,380 154,380
Other hedged variable rate debt 295,328 134,995
Unhedged variable rate debt 1,112,770 818,431
1,649,676 1,195,005
<PAGE> 25
<TABLE>
SIMON DeBARTOLO GROUP
New Development Activities
As of June 30, 1997
Non-Anchor
SDG Actual/ Projected Sq. Footage
Mall/ Ownership Projected Cost Leased/ GLA
Location Percentage Opening (in millions) Committed(2) (sq. ft.)
Projects Under
Construction
<S> <C> <C> <C> <C> <C>
The Source 50% 9/97 $153 93% 730,000
Long Island, NY
Anchors/Major Fortunoff,
Tenants: 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
Arizona Mills 26% 11/97 $188 88% 1,216,000
Tempe, Arizona
Anchors/Major Oshmans
Tenants: Superspor
t, Off
5th-Saks
Fifth
Avenue
Outlet,
Burlingto
n Coat
Factory,
Harkins
Theater,
Rainfores
t Cafe,
GameWorks
, Hi
Health,
JCPenney
Outlet,
Group
USA,
Linens 'N
Things,
IMAX,
Ross
Dress for
Less
Grapevine Mills 38% 10/97 $203 76% 1,396,000
Grapevine, TX
(Dallas/Ft. Worth)
Anchors/Major Books-A-
Tenants: Million,
Burlingto
n Coat
Factory,
Off 5th-
Saks
Fifth
Avenue
Outlet,
Group
USA,
Rainfores
t Cafe,
Bed Bath
& Beyond,
AMC
Theatres,
GameWorks
,
American
Wildernes
s, Sports
Authority
,
JCPenney
Outlet
Bernini Off Rodeo,Old
Navy
Muncie Plaza 100% 4/98 $14 74% (1) 195,500
Muncie, IN
Anchors/Major Kohl's,
Tenants: TJMaxx,
OfficeMax
, Shoe
Carnival
Shops at Sunset
Place 75% 9/98 $149 82% 500,000
South Miami, FL
Anchors/Major AMC 24
Tenants: Theatre,
NIKETOWN,
Barnes &
Noble,
IMAX
Theatre,
Virgin
Megastore
, Z
Gallerie,
GameWorks
Lakeline Plaza 50% Phase I - $34 Phase I - 381,200
5/98 64%
Austin, TX Phase II-
11/98
(commenced
construction 7/97)
Anchors/Major Linens 'N
Tenants: Things,
TJMaxx,
Toys "R"
Us,
Office
Max
(1) Community Center leased/committed percentage includes owned anchor GLA.
(2) As of July, 1997.
</TABLE>
<PAGE> 26
<TABLE>
SIMON DeBARTOLO GROUP
Renovation/ Expansion Activities
As of June 30, 1997
Total
SDG Projected Existing
Mall/ Ownership Anticipated Cost Year GLA
Location Percentage Completion (in Built (sq. ft.)
millions)
Projects Under
Construction
<S> <C> <C> <C> <C> <C>
The Forum Shops at 55% 8/97 $89 1992 242,000
Caesars
Las Vegas, NV
(Expansion)
Scope of Construction: Addition
of 235,000
sq. ft.
(including
mezzanine)
, 97%
leased/com
mitted;
tenants
include
Virgin
Records,
FAO
Schwarz,
Cheesecake
Factory
and
NIKETOWN
Aventura Mall 33.3% 12/97 $91 1983 987,000
(Bloomingdale's)
Miami, FL 3/98 (All
other)
(Expansion) 3/99
(Burdine's)
Scope of Construction: Additions
of 252,000
sq. ft.
Bloomingda
le's,
225,000
sq. ft.
Burdines,2
55,000 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
started constr. 7/97)
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 67,000
sq. ft.
expansion
of shops
with food
court
The Florida Mall 50% 1999 $79 1986 1,120,000
Orlando, FL
(Expansion)
Scope of Construction: Addition
of 200,000
sq. ft.
Burdines
and
180,000
sq. ft. of
shops with
expansions
to Sears,
JCPenney,
Dillard's,
and
Gayfers
Projects Under
Development
North East Mall 100% 1999 $150 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,
renovation
s of Sears
and
Montgomery
Ward
Mission Viejo Mall 100% 1999 $150 1979 817,000
Mission Viejo, CA
(Renovation/Expansion)
Scope of Construction: Additions
of 160,000
sq. ft.
Nordstrom,
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
</TABLE>
<PAGE> 27
SIMON DeBARTOLO GROUP
Other Renovation/Expansion Activities
Projects Under Construction as of June 30, 1997
Anticipated
Name/Location Completion Scope of
Construction
Lafayette Square 7/97 Remodel with new food court; new Waccamaw;
Indianapolis, IN L.S. Ayres
expansion
Orange Park Mall 8/97 Addition of an AMC 24 screen theatre
Jacksonville, FL
Tippecanoe Plaza 9/97 New Service Merchandise and Barnes & Noble
Lafayette, IN
Alton Square 10/97 New Sears; renovation
Alton, IL
Paddock Mall 10/97 Remodel with new food court
Ocala, FL
Chautauqua Mall 11/97 Remodel with new food court; Woolworth
Jamestown, NY recapture;new JCPenney and Bon-Ton
Crystal River Mall 11/97 New Regal Cinema
Crystal River, FL
Knoxville Center 11/97 Renovation of "O" section and expansion of
(East Towne Mall) existing Regal Cinema
Knoxville, TN
Northgate Mall 11/97 Renovation with new food court
Seattle, WA
Richmond Square 11/97 New Dillard's and OfficeMax; food cluster
and
Richmond, IN renovation
Southern Park Mall 11/97 Remodel with new food court; GLA expansion
Youngstown, OH
Barton Creek Square 3/98 Additions of Old Navy and Finish Line;
cosmetic
Austin, TX remodel with new food court
Columbia Center 3/98 New ACT III Theater and Barnes & Noble
Kennewick, WA
Forest Mall 3/98 New Sears and Staples; renovation of "O"
Fond du Lac, WI section
Port Charlotte Town 3/98 New Cobb Theater
Center
Port Charlotte, FL
West Town Mall 3/98 New Regal Cinema; new parking deck
Knoxville, TN
(1) Total anticipated cost of the above projects is $148 million; SDG's share
is $142 million.
<PAGE> 28
SIMON DeBARTOLO GROUP
Capital Expenditures
For the Six Months Ended June 30, 1997
(In millions)
Joint Venture Properties
------------------------
Consolidated SDG's
Properties Total Share
---------- ----- -----
Acquisitions - - -
New Developments $42.2 $152.6 $63.1
Renovations and Expansions 78.6 37.0 11.9
Tenant Allowances-Retail 18.8 2.4 1.0
Tenant Allowances-Office .6 - -
Capital Expenditures
Recovered from Tenants 1.6 .6 -
Other (1) 4.3 .1 .3
------ ----- ------
Totals $146.1 $192.7 $76.3
====== ===== ======
(1) Primarily represents capital expenditures not recovered from tenants.
<PAGE> 29
SIMON DeBARTOLO GROUP
Gains on Sales of Peripheral Land
As of June 30, 1997
(In millions)
Six Months Ended
June 30,
1997 1996(1)
---- -------
Consolidated Properties $2.6 $1.0
SDG's Share of Joint Venture Properties 1.5 1.6
---- ----
Totals $4.1 $2.6
==== ====
(1) Not adjusted to give effect to the Merger prior to August 9, 1996.
<PAGE> 30
SIMON DeBARTOLO GROUP
Teleconference Text
July 31, 1997
Conference Call Leader: David Simon
Chief Executive Officer of Simon DeBartolo Group
Welcome to our second quarter earnings teleconference. We will provide a brief
overview of financial and operational results, an overview of certain financing
activities, an update on the development activities, and then we'll open the
call to questions.
Financial and Operational Results
- ---------------------------------
We are very pleased with our financial results. FFO of the Operating
Partnership for the quarter was $93.3 million, an increase of 84.8% over
1996. This translated to an increase on a per share basis of 11.3%, to $0.59
per share in 1997 from $0.53 in 1996.
FFO of the Operating Partnership for the six months was $181.2 million, an
increase of 82.7% for the same period in 1996. The increase on a per share
basis for the first six months has been close to 11%, at 10.6%, to $1.15 per
share from $1.04 per share in 1996.
We are pleased with this growth level, which was fueled by certain cost savings
from our merger with DeBartolo, occupancy gains within the portfolio and
positive returns from our redevelopment activities. It is important to note
that this growth level was achieved in a 6 month period in which SDG completed
no acquisition activity. This growth rate was basically fueled by internal
growth, and as we increase our acquisition activity, we expect to add to our
growth component. Also on a positive note, our profit margin year-to-date is
64.1% as compared to 62.3% a year ago.
Operational statistics are on the rise. Mall occupancy at June 30 was 85.2%,
up 1.8 percentage points from one year ago. This is primarily the result of
our continued aggressive leasing efforts, particularly as we gain more
knowledge and exert Simon leasing influence on the former "DeBartolo"
properties. We have had good occupancy gains in the former "Simon" portfolio.
We are also seeing less bankruptcies in the small shop sector and we have a
very significant momentum throughout our entire leasing organization. We
executed leases for 1.45 million sq. ft. of space in our regional mall
portfolio during the second quarter, which comprised over 500 leases. We have
lawyers working around the clock to execute leases for the remainder of the
year. We expect this favorable trend to continue, and we hope to bring in year-
end occupancy 150 to 200 basis points favorable from last year.
Average base rent in the regional malls was $20.94 at June 30, up 3.8% from
$20.18 one year ago. The average base rent for new leases signed during the
first six months was $22.93, an increase of $3.31 or 17% over the tenants who
closed or whose leases expired. As we highlighted to you last quarter, this
spread is lower than previous annual trends, primarily as a result of six large-
space leases executed year-to-date. These six leases represent 170,000 square
feet and were leased at an average rent of $14.27 per square foot.
Sales volume in the regional malls was $2.9 billion, up 4.2% from $2.785
billion in the second quarter of 1996. On a per square foot basis, total sales
increased 3.4%.
We continue to see above industry-average sales growth, consistent with our
1996 year-end trend. We believe that this is a function of our redevelopment
efforts and our aggressive leasing focus on better-performing, more-productive
small shop tenants. In addition, a number of properties where we have
completed redevelopments or are in the final stages of completing a
redevelopment are showing strong sales growth, including Alton Square, Bay Park
Square, Bergen Mall, Coral Square, Lafayette Square, Midland Park Mall, Muncie
Mall, Smith Haven Mall and Summit Mall.
In summary, we are pleased with our overall results for the quarter.
Everything is on plan for 1997, and we remain very optimistic for the last six
months of the year.
Financing Activities
- --------------------
Our company has demonstrated its unparalleled strength given our activity in
the capital markets recently.
On June 24, we issued the initial $100 million of medium term notes from our
$300 million medium term note shelf. The single tranche, eight year Notes pay
interest semi-annually and were fixed at the then 8-year Treasury rate plus 69
basis points on a bond equivalent basis of 7.125%.
We also issued 3 million Step-Up Premium Rate Preferred Shares at a rate of
7.89% for a total of $150 million.
As the bond market continued to rally, we reentered the capital markets and
completed the sale of a two-tranche senior unsecured debt offering of $250
million. The first $100 million tranche of 7-year notes pays interest at 6.75%
semi-annually and were priced at the then 7 year treasury rate plus 65 basis
points. We also issued 12-year securities for a total of $150 million which
pay interest semi-annually at 7.00%. These bonds were priced at the then 10
year treasury rate plus 90 basis points.
Proceeds from these offerings were used to repay existing indebtedness and for
general corporate working capital purposes, as well as future property
acquisitions.
We have been pleased with the pricing on the $500 million raised in the last
month, as it provides the opportunity to reequitize our balance sheet and
position the Company for future growth. No other company in our peer group can
raise capital as quickly and as powerfully as we can. We believe this is one
of our long term strategic competitive advantages.
Post merger, we have been able to significantly re-work our balance sheet,
extending maturities and taking advantage of the current interest rate
environment. In the last 10 months, we have issued $700 million of unsecured
debt and $350 million of perpetual preferred stock. We expect, certainly on
the unsecured debt level, for this activity to proceed and to continue to lock
in historically low interest rates.
Development Activity
New Developments
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We have a development record that is unsurpassed in our business. Four major
new projects are under construction, on time and according to plan, three of
which, totaling over 3 million square feet, will open in the next few months.
The Source which is a specialty center in Westbury, Long Island will open on
September 5th. Grapevine Mills, a 1.5 million square foot value-oriented super
regional mall in the Dallas suburb of Grapevine, will open October 30th.
Arizona Mills, 1.2 million square feet, is scheduled to open November 20th in
Tempe, Arizona. The progress on the Shops at Sunset Place, a 500,000 square
foot specialty center in South Miami, is continuing on schedule.
Recently, we agreed to jointly develop a super regional value-oriented project
with the Mills Corporation in Charlotte, North Carolina. This is a 50/50 joint
venture with Mills. Land was purchased at a total cost of approximately $25
million. This project is scheduled to start in early 1998 for a 1999 opening.
It will be 1.5 million square feet and will be located at Interstate 85 and
King's Grant Boulevard in Concord, just outside of Charlotte and near in
proximity to the Charlotte Motor Speedway. We have commitments from Burlington
Coat Factory, Sports Authority, Bed Bath & Beyond, Marshall's, TJMaxx,
Rainforest Cafe, and Off 5th-Saks Fifth Avenue Outlet, Books-A-Millions, and a
major theater/entertainment center. This is a site where we originally looked
at developing a traditional regional mall. Given our strategy to be a broad
retail real estate company, we decided the best use was to build a Mills
project there, so we pursued that in partnership with the Mills Company.
Our new community centers being developed in Austin, Texas and Muncie, Indiana
are both under construction and total approximately 600,000 square feet, with
both centers due to open in 1998.
Renovations and Expansions
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We continue to be a leader in renovation and expansion activity. Our program
is ambitious, and we expect to expand several malls in our portfolio. We are
on track to spend over $275 million in 1997, improving our existing portfolio,
with returns averaging in double-digits. Included is one of our most exciting
expansions, The Forum Shops at Caesars in Las Vegas, which will open a 235,000
square foot expansion over Labor Day weekend this year. The Company will host
an analyst/investor conference in connection with the opening of this expansion
on August 27th and 28th. Twelve other redevelopment projects are slated for
opening in 1997 and are looking very promising. Details of the projects will
be disclosed in our 8-K.
Acquisition Activities
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We announced the formation of a strategic alliance with Chelsea GCA Realty to
develop and acquire high-end outlet centers in major metropolitan market places
with GLA of 500,000 square feet or more. In connection with the joint venture
formation, we purchased 1.4 million shares of Chelsea common stock at $35.50
per share. So far we have made good progress on that relationship. We are
working on several opportunities and will have more details as these deals
progress. On another positive note, the stock is currently trading at $39.50
per share, and we have earned an 11.3% return on our investment in just 45
days.
On July 10th, we announced the acquisition of an additional 48% ownership of
West Town Mall in Knoxville, Tennessee, boosting our ownership percentage to
50%. West Town is a terrific asset. It is 1.3 million square feet and is
currently 92% occupied with sales in the $340 per square foot range. It was
renovated and expanded in 1995. We believe the mall has significant upside
potential through improved occupancy and future redevelopment, examples of
which include adding an entertainment/theatre complex. Cost of the acquisition
was $70 million. The implied cap rate was 8.7%, which we believe to be very
opportunistic for us given the quality of the asset.
We continue to pursue and evaluate several other acquisition opportunities, and
we expect to make an announcement shortly on a major acquisition. We expect to
have a very active third and fourth quarter in the acquisition area.
In summary, the quarter was very pleasing. We believe that we have real
momentum in our business. Everything that we thought existed with the merger
is coming through for us. We continue to see positive benefits in our leasing
and redevelopment efforts in the DeBartolo portfolio. We continue to improve
our margins through the ringing out of excess costs and economies of scale.
Our redevelopment and development pipeline is as active and robust as any in
the industry with approximately three to four million square feet of new
development both under construction and contemplated. We will be able to share
more detail on both new development and redevelopment activity through our
filings and our investor/analyst conference.
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