SPG PROPERTIES INC/MD/, 10-K405, 2000-03-29

SPG PROPERTIES INC/MD/
10-K405, 2000-03-29
REAL ESTATE INVESTMENT TRUSTS

Previous: CYTEC INDUSTRIES INC/DE/, DEF 14A, 2000-03-29

Next: CNB HOLDINGS INC, 10KSB, 2000-03-29

<PAGE>

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

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM 10-K

[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1999

Commission file number 1-12618

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

SPG PROPERTIES, INC.
(Exact name of registrant as specified in its charter)

Maryland 35-1901999
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

115 West Washington Street
Indianapolis, Indiana 46204
(Address of principal executive (Zip Code)
offices)

Registrant's telephone number, including area code: (317) 636-1600

Securities registered pursuant to Section 12 (b) of the Act:

<TABLE>
<CAPTION>
Name of each exchange
Title of each class on which registered
------------------- -----------------------
<S> <C>
8 3/4% Series B Cumulative Redeemable Preferred Stock,
$.0001 par value New York Stock Exchange
</TABLE>

Securities registered pursuant to Section 12 (g) of the Act:

None

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

Substantially all of the Registrant's common stock is held by Simon Property
Group, Inc.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement in connection with its Annual
Meeting of Shareholders to be held on May 10, 2000 are incorporated by
reference in Part III.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

SPG PROPERTIES, INC.

ANNUAL REPORT ON FORM 10-K
December 31, 1999

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Item No. Page No.
-------- --------
<C> <S> <C>
PART I
1. Business.................................................. 3
2. Properties................................................ 8
3. Legal Proceedings......................................... 36
4. Submission of Matters to a Vote of Security Holders....... 36

PART II
5. Market for the Registrant's Common Equity and Related 36
Stockholder Matters.......................................
6. Selected Financial Data................................... 37
7. Management's Discussion and Analysis of Financial 38
Condition and Results of Operations.......................
7A. Quantitative and Qualitative Disclosure About Market 46
Risk......................................................
8. Financial Statements and Supplementary Data............... 46
9. Changes in and Disagreements with Accountants on 46
Accounting and Financial Disclosure.......................

PART III
10. Directors and Executive Officers of the Registrant........ 47
11. Executive Compensation.................................... 47
12. Security Ownership of Certain Beneficial Owners and 47
Management................................................
13. Certain Relationships and Related Transactions............ 47

PART IV
14. Exhibits, Financial Statements, Schedules and Reports on 48
Form 8-K..................................................
Signatures.......................................................... 84
</TABLE>

2
<PAGE>

PART 1

Item 1. Business

Background

SPG Properties, Inc. ("SPG Properties"), formerly Simon DeBartolo Group,
Inc. ("SDG"), is a substantially wholly-owned subsidiary of Simon Property
Group, Inc. ("SPG"). SPG Properties and SPG are both self-administered and
self-managed real estate investment trusts ("REITs") under the Internal Revenue
Code of 1986, as amended. SPG Properties and its substantially wholly-owned
subsidiary, SD Property Group, Inc., are general partners of, and hold a
noncontrolling partnership interest in, Simon Property Group, L.P. (the "SPG
Operating Partnership"), formerly Simon DeBartolo Group, L.P. ("SDG, LP"). The
interests in the SPG Operating Partnership ("Units") represent the sole assets
of SPG Properties and subsidiary. The SPG Operating Partnership is engaged in
the ownership, operation, management, leasing, acquisition, expansion and
development of real estate properties, primarily regional malls and community
shopping centers. SPG is the managing general partner of the SPG Operating
Partnership. Each share of common stock of SPG is paired with a beneficial
interest in 1/100th of a share of common stock of SPG Realty Consultants, Inc.
("SRC" and together with SPG, the "Companies").

The CPI Merger

For financial reporting purposes, as of the close of business on September
24, 1998, pursuant to the Agreement and Plan of Merger dated February 18, 1998,
SDG, Corporate Property Investors, Inc. ("CPI"), and Corporate Realty
Consultants, Inc ("CRC") combined their business operations (the "CPI Merger").
Pursuant to the terms of the CPI Merger, SPG Merger Sub, Inc., a substantially
wholly-owned subsidiary of CPI, merged with and into SDG with SDG continuing as
the surviving company. SDG became a majority-owned subsidiary of CPI and was
renamed SPG Properties, Inc. The outstanding shares of common stock of SDG were
exchanged for a like number of shares of CPI. Beneficial interests in CRC were
acquired for $14 million in order to pair the common stock of CPI with 1/100th
of a share of common stock of CRC, the paired share affiliate.

Immediately prior to the consummation of the CPI Merger, the holders of CPI
common stock were paid a merger dividend consisting of (i) $90 in cash, (ii)
1.0818 additional shares of CPI common stock and (iii) 0.19 shares of 6.50%
Series B convertible preferred stock of CPI per share of CPI common stock.
Immediately prior to the CPI Merger, there were 25,496,476 shares of CPI common
stock outstanding. The aggregate value associated with the completion of the
CPI Merger was approximately $5.9 billion including transaction costs and
liabilities assumed.

Also in connection with the CPI Merger, CPI was renamed "Simon Property
Group, Inc.", CRC was renamed "SPG Realty Consultants, Inc." and SDG, LP was
renamed "Simon Property Group, L.P."

Upon completion of the CPI Merger, SPG transferred substantially all of the
CPI assets acquired, which consisted primarily of 23 regional malls, one
community center, two office buildings and one regional mall under construction
(other than one regional mall, Ocean County Mall, and certain net leased
properties valued at approximately $153 million) and liabilities assumed
(except that SPG remains a co-obligor with respect to the Merger Facility (see
Note 9 to the financial statements of the SPG Operating Partnership)) of
approximately $2.3 billion to the SPG Operating Partnership or one or more
subsidiaries of the SPG Operating Partnership in exchange for 47,790,550 Units
and 5,053,580 preferred Units in the SPG Operating Partnership. The preferred
partnership interests carry substantially the same economic terms and equal the
number of preferred shares issued and outstanding as a direct result of the CPI
Merger.

For additional information concerning the CPI Merger, please see Note 4 to
the financial statements of the SPG Operating Partnership.

SPG Properties' outstanding publicly traded preferred stock was not impacted
by the above business combination. Prior to the CPI Merger, SPG Properties and
subsidiary accounted for their controlling interests in

3
<PAGE>

the SPG Operating Partnership using the consolidated method of accounting. As a
result of the CPI Merger, SPG Properties and subsidiary are accounting for
their noncontrolling interest in the SPG Operating Partnership using the equity
method of accounting.

General

As of December 31, 1999, the SPG Operating Partnership owned or held an
interest in 258 income-producing properties, which consisted of 167 regional
malls, 78 community shopping centers, four specialty retail centers, five
office and mixed-use properties and four value-oriented super-regional malls in
36 states (the "Properties") and five additional retail real estate properties
operating in Europe. The SPG Operating Partnership also owned interests in two
regional malls currently under construction and 11 parcels of land held for
future development, which together with the Properties are hereafter referred
to as the "Portfolio" or the "Portfolio Properties". The SPG Operating
Partnership also holds substantially all of the economic interest in M.S.
Management Associates, Inc. (the "Management Company"). The Management Company
manages certain of the Properties and certain other retail real estate
properties not owned by the SPG Operating Partnership, and also engages in
certain property development activities.

Operating Strategies

The SPG Operating Partnership's primary business objectives are to increase
cash generated from operations per Unit and the value of the Portfolio
Properties. The SPG Operating Partnership plans to achieve these objectives
through a variety of methods discussed below, although no assurance can be made
that such objectives will be achieved.

Leasing. The SPG Operating Partnership pursues an active leasing strategy,
which includes aggressively marketing available space; renewing existing leases
at higher base rents per square foot; and continuing to sign leases that
provide for percentage rents and/or regular or periodic fixed contractual
increases in base rents.

Management. Drawing upon the expertise gained through management of a
geographically diverse Portfolio nationally recognized as high quality retail
and mixed-use Properties, the SPG Operating Partnership seeks to maximize cash
flow through a combination of an active merchandising program to maintain its
shopping centers as inviting shopping destinations, continuation of its
successful efforts to minimize overhead and operating costs, coordinated
marketing and promotional activities directed towards establishing and
maintaining customer loyalty, and systematic planning and monitoring of
results.

E-Commerce. The Companies are actively developing several unique programs
designed to take advantage of new retail opportunities of the digital age.
Elements of the strategy include digitizing the existing assets of the
Properties by implementing internet web sites for each of the Properties,
creating products that leverage the digitalization of consumers and Simon
merchants through an enhanced broadband network called TenantConnect.net and
incubating concepts that leverage the physical and virtual worlds through a
venture creation subsidiary called clixnmortar.com.

Acquisitions. The SPG Operating Partnership intends to selectively acquire
individual properties and portfolios of properties that meet its investment
criteria as opportunities arise. Management believes, however, that due to the
rapid consolidation of the regional mall business, coupled with the current
status of the capital markets, that acquisition activity in the near term will
be a less significant component of the SPG Operating Partnership's growth
strategy.

Development. The SPG Operating Partnership's strategy is to selectively
develop new properties in major metropolitan areas that exhibit strong
population and economic growth. During 1999, the SPG Operating Partnership
opened one new regional mall, one specialty center, one value-oriented super-
regional mall and three new community shopping centers. These additions added
approximately 4.9 million square feet of GLA to the Portfolio at a cost to the
SPG Operating Partnership of approximately $505 million. The SPG Operating
Partnership also has two additional projects under construction, which are
scheduled to open in 2000.

4
<PAGE>

Strategic Expansions and Renovations. A key objective of the SPG Operating
Partnership is to increase the profitability and market share of the Properties
through the completion of strategic renovations and expansions. During 1999,
the SPG Operating Partnership invested approximately $277 million on
redevelopment projects and completed four major redevelopment projects. The SPG
Operating Partnership has a number of renovation and/or expansion projects
currently under construction, or in preconstruction development.

The SPG Operating Partnership also has direct or indirect interests in
eleven parcels of land being held for future development in eight states
totaling approximately 828 acres. Management believes the SPG Operating
Partnership is well positioned to pursue future development opportunities as
conditions warrant.

International Expansion. The SPG Operating Partnership's management believes
the expertise it has gained through the development and management of its
domestic Portfolio can be utilized in retail properties throughout the world.
The SPG Operating Partnership intends to continue pursuing international
opportunities on a selected basis to enhance the value of its Units.

Competition

The SPG Operating Partnership believes that it has a competitive advantage
in the retail real estate business as a result of (i) its use of innovative
retailing concepts, (ii) its management and operational expertise, (iii) its
extensive experience and relationship with retailers and lenders, (iv) the
size, quality and diversity of its Properties and (v) the mall marketing
initiatives of Simon Brand Ventures, ("SBV"), which the SPG Operating
Partnership believes is the world's largest and most sophisticated mall
marketing initiative. Management believes that the Properties are the largest,
as measured by GLA, of any publicly traded REIT, with more regional malls than
any other publicly traded REIT. For these reasons, management believes the SPG
Operating Partnership to be the leader in the industry.

All of the Portfolio Properties are located in developed areas. With respect
to certain of such properties, there are other properties of the same type
within the market area. The existence of competitive properties could have a
material adverse effect on the SPG Operating Partnership's ability to lease
space and on the level of rents the SPG Operating Partnership can obtain.

There are numerous commercial developers, real estate companies and other
owners of real estate that compete with the SPG Operating Partnership in its
trade areas. This results in competition for both acquisition of prime sites
(including land for development and operating properties) and for tenants to
occupy the space that the SPG Operating Partnership and its competitors develop
and manage.

Environmental Matters

General Compliance. Management believes that the Portfolio Properties are in
compliance, in all material respects, with all Federal, state and local
environmental laws, ordinances and regulations regarding hazardous or toxic
substances (see Item 3. Legal Proceedings). Nearly all of the Portfolio
Properties have been subjected to Phase I or similar environmental audits
(which generally involve only a review of records and visual inspection of the
property without soil sampling or ground water analysis) by independent
environmental consultants. The Phase I environmental audits are intended to
discover information regarding, and to evaluate the environmental condition of,
the surveyed properties and surrounding properties. The environmental audits
have not revealed, nor is management aware of, any environmental liability that
management believes will have a material adverse effect on the SPG Operating
Partnership. No assurance can be given that existing environmental studies with
respect to the Portfolio Properties reveal all potential environmental
liabilities; that any previous owner, occupant or tenant of a Portfolio
Property did not create any material environmental condition not known to
management; that the current environmental condition of the Portfolio
Properties will not be affected by tenants and occupants, by the condition of
nearby properties, or by unrelated third parties; or that future uses or
condition (including, without limitation, changes in applicable environmental
laws and regulations or the interpretation thereof) will not result in
imposition of additional environmental liability.

5
<PAGE>

Asbestos-Containing Materials. Asbestos-containing materials are present in
most of the Properties, primarily in the form of vinyl asbestos tile, mastics
and roofing materials, which are generally in good condition. Fireproofing and
insulation containing asbestos is also present in certain Properties in limited
concentrations or in limited areas. The presence of such asbestos-containing
materials does not violate currently applicable laws. The SPG Operating
Partnership will remove asbestos-containing materials in the ordinary course of
any renovation, reconstruction and expansion, and in connection with the
retenanting of space.

Underground Storage Tanks. Several of the Portfolio Properties contain or at
one time contained, underground storage tanks used to store waste oils or other
petroleum products primarily related to auto services center establishments or
emergency electrical generation equipment. All regulated tanks have been
removed, upgraded or abandoned in place in accordance with applicable
environmental laws. Site assessments have revealed certain soil and groundwater
contamination associated with such tanks at some of these Properties.
Subsurface investigations (Phase II assessments) and remediation activities are
either ongoing or scheduled to be conducted at such Properties. The cost of
remediation with respect to such matters has not been and is not expected to be
material.

Properties to be Developed or Acquired. Land held for shopping mall
development or that may be acquired for development may contain residues or
debris associated with the use of the land by prior owners or third parties. In
certain instances, such residues or debris could be or contain hazardous wastes
or hazardous substances. Prior to exercising any option to acquire any of the
optioned properties, the SPG Operating Partnership will conduct environmental
due diligence consistent with past practice.

Employees

The SPG Operating Partnership and its affiliates employ approximately 5,840
persons at various centers and offices throughout the United States, of which
2,940 are part-time. Approximately 1,000 employees are located at the SPG
Operating Partnership's headquarters in Indianapolis, Indiana.

Insurance

The SPG Operating Partnership has comprehensive liability, fire, flood,
extended coverage and rental loss insurance with respect to its Properties.
Management believes that such insurance provides adequate coverage.

Corporate Headquarters

Executive offices of SPG, SPG Properties and the SPG Operating Partnership
are located at National City Center, 115 West Washington Street, Indianapolis,
Indiana 46204, and its telephone number is (317) 636-1600.

6
<PAGE>

Executive Officers of the Registrant

The following table sets forth certain information with respect to the
executive officers of SPG and SPG Properties as of December 31, 1999.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Melvin Simon (1)........ 73 Co-Chairman
Herbert Simon (1)....... 65 Co-Chairman
David Simon (1)......... 38 Chief Executive Officer
Hans C. Mautner......... 61 Vice Chairman; Chairman, Simon Global Limited
Richard S. Sokolov...... 50 President and Chief Operating Officer
Randolph L. Foxworthy... 55 Executive Vice President--Corporate Development
William J. Garvey....... 60 Executive Vice President--Property Development
James A. Napoli......... 53 Executive Vice President--Leasing
John R. Neutzling....... 47 Executive Vice President--Property Management
James M. Barkley........ 48 General Counsel; Secretary
Stephen E. Sterrett..... 44 Treasurer
John Rulli.............. 43 Senior Vice President--Human Resources &
Corporate Operations
James R. Giuliano, III.. 42 Senior Vice President
Karen D. Corsaro........ 42 President, Simon Brand Ventures; Senior Vice
President of Marketing
Melanie Alshab.......... 36 President, clixnmortar.com; Senior Vice President
& Chief Information Officer
</TABLE>
- --------
(1) Melvin Simon is the brother of Herbert Simon and the father of David
Simon.

Set forth below is a summary of the business experience of the executive
officers of SPG and SPG Properties. The executive officers serve at the
pleasure of the Board of Directors and have served SPG Properties since its
formation in 1993, with the exception of Mr. Mautner, who has held his office
since the CPI Merger and Mr. Sokolov, Mr. Giuliano and Ms. Alshab who have held
their offices since the DRC Merger. For biographical information of Melvin
Simon, Herbert Simon, David Simon, Hans C. Mautner, and Richard Sokolov, see
Item 10 of this report.

Mr. Foxworthy is the Executive Vice President--Corporate Development. Mr.
Foxworthy joined Melvin Simon & Associates, Inc. ("MSA") in 1980 and has been
an Executive Vice President in charge of Corporate Development of MSA since
1986 and has held the same position with SPG Properties since 1993.

Mr. Garvey is the Executive Vice President--Property Development. Mr.
Garvey, who was Executive Vice President and Director of Development at MSA,
joined MSA in 1979 and held various positions with MSA.

Mr. Napoli is the Executive Vice President--Leasing. Mr. Napoli also served
as Executive Vice President and Director of Leasing of MSA, which he joined in
1989.

Mr. Neutzling is the Executive Vice President--Property Management. Mr.
Neutzling has also been an Executive Vice President of MSA since 1992
overseeing all property and asset management functions. He joined MSA in 1974
and has held various positions with MSA.

Mr. Barkley serves as General Counsel and Secretary. Mr. Barkley holds the
same position for MSA. He joined MSA in 1978 as Assistant General Counsel for
Development Activity.

Mr. Sterrett serves as Treasurer. He joined MSA in 1989 and has held various
positions with MSA.

Mr. Rulli holds the position of Senior Vice President--Human Resources and
Corporate Operations. He joined MSA in 1988 and has held various positions with
MSA.

7
<PAGE>

Mr. Giuliano has served as Senior Vice President since the DRC Merger. He
joined DRC in 1993, where he served as Senior Vice President and Chief
Financial Officer up to the DRC Merger.

Ms. Corsaro is President of Simon Brand Ventures and Sr. Vice President of
Marketing for SPG and SPG Properties. Ms. Corsaro joined MSA in 1983 and has
served in various business development positions.

Ms. Alshab is President of clixnmortar.com and the Senior Vice President &
Chief Information Officer of SPG and SPG Properties. She joined DRC in 1995.

Item 2. Properties

Portfolio Properties

The Properties primarily consist of two types: regional malls and community
shopping centers. Regional malls contain two or more anchors and a wide variety
of smaller stores ("Mall" stores) located in enclosed malls connecting the
anchors. Additional stores ("Freestanding" stores) are usually located along
the perimeter of the parking area. The 167 regional malls in the Properties
range in size from approximately 200,000 to 2.8 million square feet of GLA,
with all but five regional malls over 400,000 square feet. These regional malls
contain in the aggregate more than 17,000 occupied stores, including over 650
anchors which are mostly national retailers. As of December 31, 1999, regional
malls (including specialty retail centers and retail space in the mixed-use
Properties) represented 85.0% of total GLA, 79.9% of Owned GLA and 86.4% of
total annualized base rent of the Properties.

Community shopping centers are generally unenclosed and smaller than
regional malls. Most of the 78 community shopping centers in the Properties
range in size from approximately 100,000 to 400,000 square feet of GLA.
Community shopping centers generally are of two types: (i) traditional
community centers, which focus primarily on value-oriented and convenience
goods and services, are usually anchored by a supermarket, drugstore or
discount retailer and are designed to service a neighborhood area; and (ii)
power centers, which are designed to serve a larger trade area and contain at
least two anchors that are usually national retailers among the leaders in
their markets and occupy more than 70% of the GLA in the center. As of December
31, 1999, community shopping centers represented 10.6% of total GLA, 12.8% of
Owned GLA and 6.0% of the total annualized base rent of the Properties.

The SPG Operating Partnership also has joint venture interests in four
specialty retail centers, five office and mixed-use Properties and four value-
oriented super-regional malls. The specialty retail centers contain
approximately 1,272,000 square feet of GLA and do not have anchors; instead,
they feature retailers and entertainment facilities in a distinctive shopping
environment and location. The five office and mixed-use Properties range in
size from approximately 348,000 to 1,039,000 square feet of GLA. Two of these
Properties are regional malls with connected office buildings, two are located
in mixed-use developments and contain primarily office space and the remaining
one is solely office space. The value-oriented super-regional malls range in
size from approximately 1.2 million to 1.5 million square feet of GLA. These
Properties combine retail outlets, manufacturers' off-price stores and other
value-oriented tenants. As of December 31, 1999, value-oriented super-regional
malls represented 2.9% of total GLA, 4.7% of Owned GLA and 4.7% of the total
annualized base rent of the Properties.

As of December 31, 1999, approximately 90.6% of the Mall and Freestanding
Owned GLA in regional malls, specialty retail centers and the retail space in
the mixed use Properties was leased, approximately 95.1% of the Owned GLA in
the value-oriented super-regional malls was leased, and approximately 88.6% of
Owned GLA in the community shopping centers was leased.

Of the 258 Properties, 177 are owned 100% by the SPG Operating Partnership
and the remainder are held as joint venture interests. The SPG Operating
Partnership is the managing or co-managing general partner or member of all but
nine of the Properties held as joint venture interests.

8
<PAGE>

Additional Information

The following table sets forth certain information, as of December 31, 1999,
regarding the Properties:

<TABLE>
<CAPTION>
Ownership
Interest (Expiration Ownership Year Built or Total Anchors/Specialty
Name/Location if Lease) (1) Interest (2) Acquired GLA Anchors
------------- -------------------- ------------ ------------- --------- ------------------------
REGIONAL MALLS
<C> <C> <C> <C> <C> <C> <S>
1. Alton Square Fee 100.0 Acquired 639,640 Sears, JCPenney, Famous
Alton, IL 1993 Barr
2. Amigoland Mall Fee 100.0 Built 1974 558,707 Dillard's JCPenney,
Brownsville, TX Ward, Beall's
3. Anderson Mall Fee 100.0 Built 1972 634,542 Belk (3), JCPenney,
Anderson, SC Sears
4. Apple Blossom Mall Fee 49.1 Acquired 438,133 Belk, JCPenney, Sears
Winchester, VA 1999
5. Arsenal Mall Fee 100.0 Acquired 500,924 Ann & Hope, Marshall's
Watertown, MA 1999 (4)
6. Atrium Mall Fee 49.1 Acquired 216,147 Border Books & Music
Chestnut Hill, MA 1999
7. Auburn Mall Fee 49.1 Acquired 595,316 Filene's, Sears, Caldor
Auburn, MA 1999 (5)
8. Aurora Mall Fee 100.0 Acquired 1,014,019 JCPenney, Foley's (3),
Aurora, CO 1998 Sears
9. Aventura Mall(6) Fee 33.3 Built 1,922,783 Macy's Sears,
Miami, FL 1983 Bloomingdales, JCPenney,
Lord & Taylor, Burdines,
AMC Theatre
10. Avenues, Fee 25.0 Built 1,112,648 Belk, Dillard's,
The Jacksonville, FL 1990 JCPenney, Parisian,
Sears
11. Barton Creek Square Fee 100.0 Built 1,399,358 Dillard's (3), Foley's,
Austin, TX 1981 JCPenney, Sears, Ward,
General Cinema
12. Battlefield Mall Fee and Ground 100.0 Built 1,196,577 Dillard's Famous Barr,
Springfield, MO Lease (2056) 1970 Ward, Sears, JCPenney
13. Bay Park Square Fee 100.0 Built 665,323 Elder-Beerman, Kohl's,
Green Bay, WI 1980 Ward, Shopko
14. Bergen Mall Fee and Ground 100.0 Acquired 925,035 Off 5th-Saks Fifth
Paramus, NJ Lease (7) (2061) 1987 Avenue Outlet, Value
City Furniture, Stern's,
Marshall's
15. Biltmore Square Fee (8) 66.7 Built 494,811 Belk, Dillard's,
Asheville, NC 1989 Proffitt's, Goody's
16. Boynton Beach Mall Fee 100.0 Built 1,186,231 Macy's, Burdines, Sears,
Boynton, Beach, FL 1985 Dillard's (3), JCPenney
</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
Ownership
Interest (Expiration Ownership Year Built or Total Anchors/Specialty
Name/Location if Lease) (1) Interest (2) Acquired GLA Anchors
------------- -------------------- ------------ ------------- --------- ------------------------
<C> <C> <C> <C> <C> <C> <S>
17. Brea Mall Fee 100.0 Acquired 1,302,336 Macy's, JCPenney,
Brea, CA 1998 Robinsons-May,
Nordstrom, Sears
18. Broadway Square Fee 100.0 Acquired 619,600 Dillard's, JCPenney,
Tyler, TX 1994 Sears
19. Brunswick Square Fee 100.0 Built 786,961 Macy's, JCPenney,
East Brunswick, NJ 1973 Barnes & Noble,
Brunswick Square
Movies
20. Burlington Mall Ground Lease 100.0 Acquired 1,251,266 Macy's, Lord & Taylor,
Burlington, MA (2048) 1998 Filene's, Sears
21. Cape Cod Mall Ground Leases(7) 49.1 Acquired 718,410 Macy's, Filene's,
Hyannis, MA (2009-2073) 1999 Marshall's, Sears, Best
Buy, Barnes & Noble(9),
Hoyt's Cinemas
22. Castleton Square Fee 100.0 Built 1,455,078 Galyan's, LS Ayres,
Indianapolis, IN 1972 Lazarus, JCPenney,
Sears, Von Maur
23. Century III Mall Fee 100.0 Built 1,287,430 JCPenney, Sears, T.J.
Pittsburgh, PA 1979 Maxx, Kauufmann's(3),
Wickes Furniture
24. Charlottesville Ground Lease 100.0 Acquired 573,839 Belk(3), JCPenney,
Fashion Square (2076) 1997 Sears
Charlottesville, VA
25. Chautauqua Mall Fee 100.0 Built 440,688 Sears, JCPenney, Office
Jamestown, NY 1971 Max, Old Navy,
The Bon Ton
26. Cheltenham Square Fee 100.0 Built 636,441 Burlington Coat Factory,
Philadelphia, PA 1981 Home Depot, Value City,
Seaman's Furniture,
Shop Rite, United Artist
Theatre
27. Chesapeake Square Fee and Ground (8) 75.0 Built 800,176 Dillard's(3), JCPenney,
Chesapeake, VA Lease (2062) 1989 Sears, Ward, Hecht's
28. Cielo Vista Mall Fee and Ground 100.0 Built 1,193,037 Dillard's(3), JCPenney,
El Paso, TX Lease(10) (2027) 1974 Ward, Sears
29. Circle Centre Property Lease 14.7 Built 793,687 Nordstrom, Parisian,
Indianapolis, IN (2097) 1995 United Artists Theatre
30. College Mall Fee and Ground 100.0 Built 708,127 Sears, Lazarus, L.S.
Bloomington, IN Lease(10) (2048) 1965 Ayres, Target, JCPenney
31. Columbia Center Fee 100.0 Acquired 772,524 Sears, JCPenney,
Kennewick, WA 1987 Lamonts, Barnes &
Noble, The Bon Marche,
Regal Cinema
</TABLE>

10
<PAGE>

36. Crystal Mall Fee 74.6 Acquired 780,988 Macy's, Filene's,
Waterford, CT 1998 JCPenney, Sears

37. Crystal River Mall Fee 100.0 Built 425,885 JCPenney, Sears, Belk,
Crystal River, FL 1990 Kmart, Regal Cinema

38. Dadeland Mall Fee 50.0 Acquired 1,405,683 Saks Fifth Avenue,
Miami, FL 1997 JCPenney, Burdine's,
Burdine's Home Gallery,
Limited, Lord & Taylor

39. DeSoto Square Fee 100.0 Built 688,452 JCPenney, Sears,
Bradenton, FL 1973 Dillard's Burdines,
Regal Cinema

40. Eastern Hills Mall Fee 100.0 Built 997,894 Sears, JCPenney, The Bon
Buffalo, NY 1971 Ton, Kaufmann's,
Burlington Coat Factory

41. Eastland Mall Fee 50.0 Acquired 902,676 JCPenney, De Jong's,
Evansville, IN 1998 Famous Barr, Lazarus

42. Eastland Mall Fee 100.0 Built 707,974 Dillard's, JCPenney,
Tulsa, OK 1986 Mervyn's, Hollywood
Cinema, (11)

43. Edison Mall Fee 100.0 Acquired 1,044,562 Dillard's, JCPenney
Fort Meyers, Fl 1997 Sears, Burdines (3)

44. Emerald Square Fee 49.1 Acquired 1,006,803 Filene's, JCPenney,
North Attleborough, MA 1999 Lord & Taylor, Sears

45. Empire Mall (6) Fee and Ground 50.0 Acquired 1,044,564 JCPenney, Younkers,
Sioux Falls, SD Lease (7) (2013) 1998 Sears, Daytons, (11)
</TABLE>

11
<PAGE>

47. Florida Mall, The Fee 50.0 Built 1,633,929 Dillard's, JCPenney,
Orlando, FL 1986 Parisian, Saks Fifth
Avenue, Sears, Burdines

48. Forest Mall Fee 100.0 Built 474,127 JCPenney, Kohl's,
Fond Du Lac, WI 1973 Younkers, Sears, Staples

49. Forest Village Fee 100.0 Built 417,967 JCPenney, Kmart
Park Mall 1980
Forestville, MD

50. Fremont Mall Fee 100.0 Built 199,110 JCPenney, 1/2 Price
Fremont, NE 1966 Store

51. Golden Ring Mall Fee 100.0 Built 719,679 Hecht's, Ward, United
Baltimore, MD 1974 Artists, Caldor (5)

52. Granite Run Mall Fee 50.0 Acquired 1,022,984 JCPenney, Sears, Boscovs
Media, PA 1998

53. Great Lakes Mall Fee 100.0 Built 1,311,490 Dillard's (3),
Cleveland, OH 1961 Kaufmann's JCPenney,
Sears

54. Greendale Mall Fee and Ground 49.1 Acquired 430,769 (12) Best Buy, Marshall's,
Worcester, MA Lease (7) (2009) 1999 T.J. Maxx & More, (11)

55. Greenwood Park Mall Fee 100.0 Acquired 1,269,512 JCPenney, JCPenney Home
Greenwood, IN 1979 Store, Lazarus, L.S.
Ayres, Sears, Service
Merchandise, Von Maur

56. Gulf View Square Fee 100.0 Built 802,592 Sears, Dillard's, Ward,
Port Richey, FL 1980 JCPenney, Burdines

57. Gwinnett Place Fee 50.0 Acquired 1,248,363 Parisian, Macy's, Rich's
Atlanta, GA 1998 JCPenney, Sears

58. Haywood Mall Fee and Ground 100.0 Acquired 1,244,330 Rich's, Sears,
Greensville, SC Lease (7) (2017) 1998 Dillard's, JCPenney,
Belk Simpson

59. Heritage Park Mall Fee 100.0 Built 607,800 Dillard's, Sears, Ward
Midwest City, OK 1978

60. Highland Mall (6) Fee and Ground 50.0 Acquired 1,091,897 Dillard's (3), Foley's,
Austin, TX Lease (2070) 1998 JCPenney
</TABLE>

12
<PAGE>

62. Independence Center Fee 100.0 Acquired 1,022,477 Dillard's, Sears (3),
Independence, MO 1994 The Jones Store Co.

63. Indian River Mall Fee 50.0 Built 1996 747,614 Sears, JCPenney,
Vero Beach, FL Dillard's, Burdines, AMC
Theatre

64. Ingram Park Mall Fee 100.0 Built 1979 1,129,905 Dillard's (3), Foley's,
San Antonio, TX JCPenney, Sears, Beall's

65. Irving Mall Fee 100.0 Built 1,114,175 Foley's, Dillard's, Old
Irving, TX 1971 Navy, JCPenney,
Mervyn's, Sears, Barnes
& Noble, General Cinema

66. Jefferson Valley Mall Fee 100.0 Built 591,241 Macy's, Sears, United
Yorktown Heights, NY 1983 Artist Theatre, Home
Decor

67. Knoxville Center Fee 100.0 Built 981,354 Dillard's, JCPenney,
Knoxville, TN 1984 Proffitt's, Sears, Regal
Cinema, Service
Merchandise (5)

68. La Plaza Fee and Ground 100.0 Built 997,077 Dillard's, JCPenney,
McAllen, TX Lease (7) (2040) 1976 Foley's, Foley's Home
Store, Sears, Beall's,
Joe Brand-Lady Brand

69. Lafayette Square Fee 100.0 Built 1,165,508 JCPenney, LS Ayres,
Indianapolis, IN 1968 Sears, Lazarus, Home
Place, Burlington Coat
Factory

70. Laguna Hills Mall Fee 100.0 Acquired 868,144 Macy's, JCPenney, Sears
Laguna Hills, CA 1997

71. Lake Square Mall Fee 50.0 Acquired 561,077 JCPenney, Sears, Belk,
Leesburg, FL 1998 Target, AMC 6 Theatres

72. Lakeland Square (13) Fee 50.0 Built 900,551 Belk, Dillard's (3),
Lakeland, FL 1988 JCPenney, Sears,
Burdines

73. Lakeline Mall Fee 100.0 Built 1,102,242 Dillard's, Foley's,
N. Austin, TX 1995 Sears, JCPenney,
Mervyn's, Regal Cinema
</TABLE>

13
<PAGE>

75. Liberty Tree Mall Fee 49.1 Acquired 850,486 Ann & Hope, Marshall's,
Newton, MA 1999 Sports Authority,
Target, Loews Theatre

76. Lima Mall Fee 100.0 Built 743,480 Elder-Beerman, Sears,
Lima, OH 1965 Lazarus, JCPenney

77. Lincolnwood Town Fee 100.0 Built 441,162 JCPenney, Carson Pirie
Center Lincolnwood, IL 1990 Scott

78. Lindale Mall (6) Fee 50.0 Acquired 690,549 Von Maur, Sears, Yonkers
Cedar Rapids, LA 1998

79. Livingston Mall Fee 100.0 Acquired 984,752 Macy's, Sears, Lord &
Livingston, NJ 1998 Taylor

80. Longview Mall Fee 100.0 Built 616,505 Dillard's (3), JCPenney,
Longview, TX 1978 Sears, Service
Merchandise, Beall's

81. Machesney Park Mall Fee 100.0 Built 555,984 JCPenney, Kohl's,
Rockford, IL 1979 Seventh Avenue Direct,
Bergners, Kerasotes
Theatre

82. Mall at Rockingham Park Fee 24.6 Acquired 996,868 Macy's, Filene's,
Salem, NH 1999 JCPenney, Sears

83. Mall of America Fee (14) 27.5 Acquired 2,777,511 Macy's, Bloomingdales,
Minneapolis, MN 1999 Nordstrom, Sears,
Knott's Camp Snoopy,
General Cinema

84. Mall of Georgia Fee 50.0 Built 1,491,432 Lord & Taylor, Rich's
Gwinnett County, GA 1999 (9), Dillard's,
Galyan's, Haverty's,
JCPenney, Nordstrom (9),
Bed, Bath & Beyond,
Regal Cinema

85. Mall of New Hampshire Fee 49.1 Acquired 800,269 Filene's, JCPenney,
Manchester, NH 1999 Sears, Best Buy

</TABLE>

14
<PAGE>

87. McCain Mall Ground Lease 100.0 Built 776,918 Sears, Dillard's,
N. Little Rock, AR (15) (2032) 1973 JCPenney, M.M. Cohn

88. Melbourne Square Fee 100.0 Built 737,824 Belk, Dillard's (3),
Melbourne, FL 1982 JCPenney, Burdines

89. Memorial Mall Fee 100.0 Built 416,742 JCPenney, Kohl's, Sears
Sheboygan, WI 1969

90. Menlo Park Mall Fee 100.0 Acquired 1,292,897 Macy's(3), Nordstrom,
Edison, NJ 1997 (16) Cineplex Odeon

91. Mesa Mall(6) Fee 50.0 Acquired 856,258 Sears, Herberger's,
Grand Junction, CO 1998 JCPenney, Target,
Mervyn's

92. Metrocenter(17) Fee 50.0 Acquired 1,356,214 Macy's, Dillard's,
Phoenix, AZ 1998 Robinsons-May, JCPenney,
Sears, Harkins Theatres

93. Miami International Fee 60.0 Built 976,465 Sears, Dillard's,
Mall Miami, Fl 1982 JCPenney, Burdines(3)

94. Midland Park Mall Fee 100.0 Built 614,666 Dillard's(3), JCPenney,
Midland, TX 1980 Sears, Beall's

95. Miller Hill Mall Fee 100.0 Built 815,244 JCPenney, Sears,
Duluth, MN 1973 Younkers, Northstar Ford

96. Mounds Mall Ground Lease 100.0 Built 407,681 Elder-Beerman, JCPenney,
Anderson, IN (2033) 1965 Sears

97. Muncie Mall Fee 100.0 Built 659,879 JCPenney, L.S. Ayres,
Muncie, IN 1970 Sears, Elder Beerman,
(11)

98. Nanuet Mall Fee 100.0 Acquired 914,892 Macy's, Stern's, Sears
Nanuet, NY 1998

99. North East Mall Fee 100.0 Built 1,213,305 Saks Fifth Avenue(9),
Hurst, TX 1971 Nordstrom(9), Dillard's,
JCPenney, Ward, Sears
100. North Towne Square Fee 100.0 Built 749,070 Dillard's, Ward,(11)
Toledo, OH 1980

101. Northfield Square Fee (8) 31.6 Built 558,237 Sears, JCPenney,
Bradley, IL 1990 Cinemark Movies10,
Carson Pirie Scott(3)

102. Northgate Mall Fee 100.0 Acquired 1,097,163 Nordstrom, JCPenney,
Seattle, WA 1987 (18) Lamonts, The Bon Marche

</TABLE>

15
<PAGE>

104. Northpark Mall Fee 50.0 Acquired 1,040,868 Von Maur, Younkers,
Davenport, IA 1998 Ward, JCPenney, Sears

105. Northshore Mall Fee 49.1 Acquired 1,677,897 Macy's, Filene's,
Peabody, MA 1999 JCPenney, Lord & Taylor,
Sears

106. Northwoods Mall Fee 100.0 Acquired 668,122 Famous Barr, JCPenney,
Peoria, IL 1983 Sears

107. Oak Court Mall Fee 100.0 Acquired 852,085 Dillard's(3),
Memphis, TN 1997 (19) Goldsmith's

108. Orange Park Mall Fee 100.0 Acquired 929,179 Dillard's, JCPenney,
Jacksonville, FL 1994 Sears, Belk, AMC 24
Theatres

109. Orland Square Fee 100.0 Acquired 1,246,381 JCPenney, Marshall
Orland Park, IL 1997 Field, Sears, Carson
Pirie Scott

110. Paddock Mall Fee 100.0 Built 560,087 JCPenney, Sears, Belk,
Ocala, FL 1980 Burdines

111. Palm Beach Mall Fee 100.0 Built 1,016,396 Dillard's (9),
West Palm Beach, FL 1967 JCPenney, Sears, Lord &
Taylor, Burdines,
Borders Books & Music,
Barnes & Noble (9)

112. Phipps Plaza Fee 100.0 Acquired 821,275 Lord & Taylor, Parisian,
Atlanta, GA 1998 Saks Fifth Avenue, AMC
Theatres

113. Port Charlotte Ground (8) 80.0 Built 780,887 Dillard's, Ward,
Town Center Lease 1989 JCPenney, Sears,
Port Charlotte, FL (2064) Burdines, Regal Cinema

114. Prien Lake Mall Fee and Ground 100.0 Built 815,641 Dillards, JCPenney,
Lake Charles, LA Lease (7) (2025) 1972 Ward, Sears, The White
House

115. Raleigh Springs Mall Fee andGround 100.0 Built 901,397 Dillard's, Sears,
Memphis, TN Lease (7) (2018) 1979 JCPenney, Malco
Theatres, Goldsmith's

116. Randall Park Mall Fee 100.0 Built 1,580,417 Dillard's, Kaufmann's,
Cleveland, OH 1976 JCPenney, Sears,
Burlington Coat Factory,
Magic Johnson Theatres

</TABLE>

16
<PAGE>

118. Richmond Square Fee 100.0 Built 390,703 Dillard's, JCPenney,
Richmond, IN 1966 Sears, Office Max

119. Richmond Town Fee 100.0 Built 937,530 Sears, JCPenney,
Square 1966 Kaufmann's, Sony
Cleveland, OH Theatres (9), Barnes &
Noble (9), Old Navy

120. River Oaks Center Fee 100.0 Acquired 1,338,499 Sears, JCPenney, Carson
Calumet City, IL 1997 (20)Pirie Scott, Cineplex
Odeon, Marshall Field's

121. Rockaway Fee 100.0 Acquired 1,240,089 Macy's, Lord & Taylor,
Townsquare 1998 JCPenney, Sears
Rockaway, NJ

122. Rolling Oaks Mall Fee 100.0 Built 756,455 Sears, Dillard's,
North San Antonio, TX 1988 Foley's, Beall's

123. Roosevelt Field Mall Ground Lease (7) 100.0 Acquired 2,176,922 Macy's, Bloomingdale's,
Garden City, NY (2090) 1998 JCPenney, Nordstrom,
Stern's

124. Ross Park Mall Fee 100.0 Built 1,275,426 Lazarus, JCPenney,
Pittsburgh, PA 1986 Sears, Kaufmann's, Media
Play (9)

125. Rushmore Mall (6) Fee 50.0 Acquired 834,384 JCPenney, Sears,
Rapid City, SD 1998 Herberger's, Hobby
Lobby, Target

126. St. Charles Fee 100.0 Built 1,053,050 Sears, JCPenney, Kohl's,
Towne Center 1990 Ward, Hecht's
Waldorf, MD

127. Santa Rosa Plaza Santa Fee 100.0 Acquired 699,538 Macy's, Mervyn's, Sears
Rosa, CA 1998

128. Seminole Towne Center Fee 45.0 Built 1,153,761 Dillard's, JCPenney,
Sanford, FL 1995 Parisian, Sears,
Burdines
129. Shops at Mission Fee 100.0 Built 1,038,380 Macy's, Saks Fifth
Viejo Mall, 1979 Avenue, Robinsons--
The Mission May(3), Nordstrom
Viego, CA

130. Smith Haven Mall Fee 25.0 Acquired 1,332,770 Macy's, Sears, JCPenney,
Lake Grove, NY 1995 Sterns

</TABLE>

17
<PAGE>

132. Source, The Long Fee 25.0 Built 729,554 Off 5th-Saks Fifth
Island, NY 1997 Avenue, Fortunoff,
Loehmann's, Nordstrom
Rack, Old Navy, ABC
Home, Circuit City,
Virgin Megastore

133. South Hills Village Fee 100.0 Acquired 1,118,985 Sears, Kaufmann's,
Pittsburgh, PA 1997 Lazarus

134. South Park Mall Fee 100.0 Built 858,667 Dillard's, JCPenney,
Shreveport, LA 1975 Burlington Coat Factory,
Regal Cinema, Stage,
Ward (5)

135. South Shore Plaza Fee 100.0 Acquired 1,434,279 Macy's, Filene's, Lord &
Braintree, MA 1998 Taylor, Sears

136. Southern Hills Mall(6) Fee 50.0 Acquired 752,471 Younkers, Sears, Target,
Sioux City, IA 1998 Carmike Cinemas

137. Southern Park Mall Fee 100.0 Built 1,201,466 Dillard's, JCPenney,
Youngstown, OH 1970 Sears, Kaufmann's

138. Southgate Mall Fee 100.0 Acquired 321,564 Sears, Dillard's,
Yuma, AZ 1988 JCPenney, Hastings

139. SouthPark Mall Fee 50.0 Acquired 1,034,852 JCPenney, Ward,
Moline, IL 1998 Younkers, Sears, Von
Maur

140. SouthRidge Mall(6) Fee 50.0 Acquired 1,008,607 Sears, Younkers,
Des Moines, IA 1998 JCPenney, Target,
Carmike Cinemas, (11)

141. Square One Mall Fee 49.1 Acquired 848,186 Filene's, Sears, Service
Saugus, MA 1999 Merchandise, TJMaxx &
More

142. Summit Mall Fee 100.0 Built 694,332 Dillard's(3), Kaufmann's
Akron, OH 1965

143. Sunland Park Mall Fee 100.0 Built 923,251 JCPenney, Mervyn's,
El Paso, TX 1988 Sears, Dillard's(3),
General Cinemas
144. Tacoma Mall Fee 100.0 Acquired 1,270,949 Nordstrom, Sears,
Tacoma, WA 1987 JCPenney, The Bon
Marche, Mervyn's

145. Tippecanoe Mall Fee 100.0 Built 1973 856,114 Lazarus, Sears, L.S.
Lafayette, IN Ayres, JCPenney, Kohl's

146. Town Center at Fee 100.0 Acquired 1,228,330 Lord & Taylor, Saks
Boca Raton 1998 Fifth Avenue,
Boca Raton, FL Bloomingdale's, Sears,
Burdines, Nordstrom (9)

</TABLE>

18
<PAGE>

148. Towne East Square Fee 100.0 Built 1,148,431 Dillard's, JCPenney,
Wichita, KS 1975 Sears

149. Towne West Square Fee 100.0 Built 965,592 Dillard's, Sears,
Wichita, KS 1980 JCPenney, Ward, Service
Merchandise, (11)

150. Treasure Coast Square Fee 100.0 Built 783,513 Dillard's(3), Sears,
Jenson Beach, FL 1987 JCPenney, Burdines

151. Tyrone Square Fee 100.0 Built 1,123,147 Dillard's, JCPenney,
St. Petersburg, FL 1972 Sears, Borders, Burdines

152. University Mall Ground 100.0 Built 565,400 JCPenney, M.M. Cohn,
Little Rock, AR Lease (2026) 1967 Ward

153. University Mall Fee 100.0 Acquired 712,161 JCPenney, Sears,
Pensacola, FL 1994 McRae's, United Artists

154. University Park Mall Fee 60.0 Built 942,215 LS Ayres, JCPenney,
South Bend, IN 1979 Sears, Marshall Fields

155. Upper Valley Mall Fee 100.0 Built 751,682 Lazarus, JCPenney,
Springfield, OH 1971 Sears, Elder-Beerman

156. Valle Vista Mall Fee 100.0 Built 656,085 Dillard's, Mervyn's,
Harlingen, TX 1983 Sears, JCPenney,
Marshalls, Beall's

157. Valley Mall Fee 50.0 Acquired 482,370 JCPenney, Belk, Wal-
Harrisonburg, VA 1998 Mart, Peebles

158. Virginia Center Fee 100.0 Built 786,927 Dillard's(3), Hecht's,
Commons 1991 JCPenney, Sears
Richmond, VA

159. Walt Whitman Mall Ground 98.0 Acquired 1,028,086 Macy's, Lord & Taylor,
Huntington Station, NY Rent (2012) 1998 Bloomingdale's, Saks
Fifth Avenue

160. Washington Square Fee 100.0 Built 1,133,791 L.S. Ayres, Lazarus,
Indianapolis, IN 1974 Target, JCPenney, Sears

161. West Ridge Mall Fee 100.0 Built 1,042,349 Dillard's, JCPenney, The
Topeka, KS(21) 1988 Jones Store, Sears, Ward
162. West Town Mall Ground 50.0 Acquired 1,338,212 Parisian, Dillard's,
Knoxville, TN Lease (2042) 1991 JCPenney, Proffitt's,
Sears, Regal Cinema

</TABLE>

19
<PAGE>

164. Westminster Mall Fee 100.0 Acquired 1,081,961 Sears, JCPenney,
Westminster, CA 1998 Robinsons-May Home
Store, Robinsons-May

165. White Oaks Mall Fee 77.0 Built 903,013 Famous Barr, Ward,
Springfield, IL 1977 Sears, Bergner's

166. Windsor Park Mall Fee 100.0 Built 1,093,212 Ward, Dillard's (3),
San Antonio, TX 1976 JCPenney, Mervyn's,
Beall's

167. Woodville Mall Fee 100.0 Built 772,889 Sears, Elder-Beerman,
Toledo, OH 1969 Andersons, (11)

VALUE-ORIENTED REGIONAL MALLS

1. Arizona Mills (6) Fee 26.3 Built 1,233,884 Off 5th-Saks Fifth
Tempe, AZ 1997 Avenue Outlet, JCPenney
Outlet, Burlington Coat
Factory, Oshman's Super
Sport, Rainforest Cafe,
Game Works, Hi-Health,
Linens "N Things, Ross
Dress for Less, Group
USA, Harkins Theatre,
Marshalls, Last Call,
Off Rodeo, Virgin
Megastore, American
Wilderness Experience

2. Concord Mills (6) Fee 37.5 Built 1,281,240 Saks Fifth Avenue,
Concord, NC 1999 Alabama Grill, AMC, Bass
Pro, Bed, Bath & Beyond,
Books-A-Million,
Burlington Coat Factory,
Group USA, Jillian's,
T.J. Maxx, F.Y.E.,
Jeepers

3. Grapevine Mills (6) Fee 37.5 Built 1,323,407 Off 5th-Saks Fifth
Grapevine 1997 Avenue Outlet, JCPenney
(Dallas/Ft. Worth), TX Outlet, Books-A-Million,
Burlington Coat Factory,
Rainforest Cafe, Group
USA, Bed, Bath & Beyond,
Polar Ice, AMC Theatres,
GameWorks, American
Wilderness Experience
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
Ownership
Interest (Expiration Ownership Year Built or Total
Name/Location if Lease) (1) Interest (2) Acquired GLA Anchors
------------- -------------------- ------------ ------------- --------- ------------------------
<C> <C> <C> <C> <C> <C> <S>
4. Ontario Mills(6) Fee 25.0 Built 1,471,096 Off 5th-Saks Fifth
Ontario, CA 1996 Avenue Outlet, JCPenney
Outlet, AMC Theatres,
Burlington Coat Factory,
Marshall's, Sports
Authority, Dave &
Busters, Group USA,
American Wilderness
Experience, T.J. Maxx,
Foozles, Totally for
Kids, Bed, Bath &
Beyond, Off Rodeo,
Mikasa, Virgin
Megastore, Game Works

SPECIALTY RETAIL CENTERS

1. The Forum Shops Ground (22) Built 479,552 --
at Caesars Lease 1992
Las Vegas, NV (2050)

2. The Shops at Fee 37.5 Built 507,511 Niketown, Barnes &
Sunset Place 1999 Noble, Gameworks, Virgin
Miami, FL Megastore, Z Gallerie

3. The Tower Shops Space 50.0 Built 59,079 --
Las Vegas, NV Lease 1996
(2051)

4. Trolley Square Fee 90.0 Acquired 225,535 --
Salt Lake City, UT 1986

OFFICE AND MIXED USE PROPERTIES

1. Fashion Centre at Fee 21.0 Built 988,955 Macy's, Nordstrom, Sony
Pentagon City, 1989 (23) Theatres
The Arlington, VA

2. Lenox Building, Fee 100.0 Acquired 348,152 --
The Atlanta, GA 1998

3. New Orleans Fee and 100.0 Built 1988 1,039,229 Macy's, Lord & Taylor
Centre/CNG Ground (24)
Tower New Lease (2084)
Orleans, LA

4. O'Hare International Fee 100.0 Built 512,032 --
Center 1988 (25)
Rosemont, IL

5. Riverway Fee 100.0 Acquired 817,299 --
Rosemont, IL 1991 (26)

</TABLE>

21
<PAGE>

1. Arboretum, The Fee (27) 90.0 Acquired 212,391 Barnes & Noble, The
Austin, TX 1998 Arbor Theater

2. Arvada Plaza Fee 100.0 Built 96,831 King Soopers
Arvada, CO 1966

3. Aurora Plaza Ground 100.0 Built 150,209 King Soopers,
Aurora, CO Lease (2058) 1965 MacFrugel's Bargains,
Super Saver Cinema

4. Bloomingdale Court Fee 100.0 Built 598,561 Wal-Mart, Best Buy, T.J.
Bloomingdale, IL 1987 Maxx N More, Cineplex
Odeon, Frank's Nursery,
Marshalls, Office Max,
Old Navy, Service
Merchandise, Dress Barn

5. Boardman Plaza Fee 100.0 Built 652,400 Factory, Giant Eagle,
Youngstown, OH 1951 Michael's Linens-N-
Things, T.J. Maxx, (11)
AMES, Burlington Coat
6. Bridgeview Court Fee 100.0 Built 278,184 Dominick's (5), (11)
Bridgeview, IL 1988

7. Brightwood Plaza Fee 100.0 Built 41,893 Preston Safeway
Indianapolis, IN 1965

8. Buffalo Grove Fee 100.0 Built 187,359 Eagle County Market,
Towne Center 1988 Buffalo Grove Theatres
Buffalo Grove, IL
9. Celma Plaza Fee and Ground 100.0 Built 32,622
El Paso, TX Lease (28) (2027) 1978

10. Century Mall Fee 100.0 Acquired 415,324 Burlington Coat Factory,
Merrillville, IN 1982 Ward

11. Charles Towne Square Fee 100.0 Built 205,399 Ward, Regal Cinema
Charleston, SC (29) 1976

12. Chesapeake Center Fee 100.0 Built 299,604 Service Merchandise,
Chesapeake, VA 1989 Phar Mor, K-Mart

13. Cobblestone Court Fee and Ground 35.0 Built 265,603 Dick's Sporting Goods,
Victor, NY Lease (10) (2038) 1993 Kmart, Office Max

14. Countryside Plaza Fee and Ground 100.0 Built 435,532 Best Buy, Old Country
Countryside, IL Lease (10) (2058) 1977 Buffet, Kmart, (11)

</TABLE>

22
<PAGE>

<TABLE>
<CAPTION>
Ownership
Interest (Expiration Ownership Year Build or
Name/Location if Lease)(1) Interest(2) Acquired Total GLA Anchors
------------- -------------------- ----------- ------------- --------- ------------------------
<C> <C> <C> <C> <C> <C> <S>
15. Crystal Court Fee 35.0 Built 284,743 Cub Foods, Wal-Mart,
Crystal Lake, IL 1989 Service Merchandise,
(11)
16. Eastgate Consumer Fee 100.0 Acquired 465,694 Burlington Coat Factory
Mall 1981
Indianapolis, IN
17. Eastland Convenience Ground 50.0 Acquired 173,069 Service Merchandise,
Center Lease (2075) 1998 Marshalls, Kids "R" Us,
Evansville, IN Toys "R" Us

18. Eastland Plaza Fee 100.0 Built 188,229 Marshalls, Target, Toys
Tulsa, OK 1986 "R" Us

19. Empire East (6) Fee 50.0 Acquired 271,351 Kohl's, Target, Carmike
Sioux Falls, SD 1998 Cinemas

20. Fairfax Court Fee 26.3 Built 258,746 Burlington Coat Factory,
Fairfax, VA 1992 Circuit City Superstore,
Today's Man

21. Forest Plaza Fee 100.0 Built 413,886 Kohl's, Marshalls, Media
Rockford, IL 1985 Play, Michael's, Factory
Card Outlet, Office Max,
T.J. Maxx, Bed, Bath &
Beyond

22. Fox River Plaza Fee 100.0 Built 324,905 Big Lots, Builders
Elgin, IL 1985 Square (5), Kmart, (11)

23. Gaitway Plaza Fee 23.3 Built 229,973 Ward, Books-A-Million,
Ocala, FL 1989 Office Depot, T.J. Maxx

24. Glen Burnie Mall Fee 100.0 Built 456,372 Ward
Glen Burnie, MD 1963

25. Great Lakes Plaza Fee 100.0 Built 164,104 Circuit City, Best Buy,
Cleveland, OH 1976 Michael's, Cost Plus
World Market

26. Great Northeast Plaza Fee 50.0 Acquired 298,242 Scars, Phar Mor
Philadelphia, PA 1989

27. Greenwood Plus Fee 100.0 Built 188,480 Best Buy, Kohl's
Greenwood, IN 1979

28. Griffith Park Plaza Ground 100.0 Built 274,230 Kmart, Service
Griffith, IN Lease (2060) 1979 Merchandise, (11)

29. Grove at Lakeland Fee 100.0 Built 215,591 Wal-Mart, Sports
Square, The 1988 Authority
Lakeland, FL

</TABLE>

23
<PAGE>

31. Highland Lakes Center Fee 100.0 Built 478,014 Target, Marshalls, Bed,
Orlando, FL 1991 Bath & Beyond, Goodings
Food Festival, Ross
Dress for Less, Office
Max

32. Indian River Commons Fee 50.0 Built 264,690 HomePlace, Lowe's,
Vero Beach, FL 1997 Office Max, (11)

33. Ingram Plaza Fee 100.0 Built 111,518 --
San Antonio, TX 1980

34. Keystone Shoppes Ground 100.0 Acquired 29,140 --
Indianapolis, IN Lease (2067) 1997

35. Knoxville Commons Fee 100.0 Built 180,355 Office Max, Silk Tree
Knoxville, TN 1987 Factory, Circuit City

36. Lake Plaza Fee 100.0 Built 218,208 Pic"N Save, Home Owners
Waukegan, IL 1986 Buyer's Outlet, (11)

37. Lake View Plaza Fee 100.0 Built 388,594 Service Merchandise,
Orland Park, IL 1986 Best Buy (3), Marshalls,
Ulltra Cosmetics,
Factory Card Outlet,
Golf Galaxy, Linens-N-
Things (3), Pet Care
Plus, (11)

38. Lakeline Plaza Fee 100.0 Built 344,669 Old Navy, Best Buy, Cost
Austin, TX 1998 Plus World Market,
Linens-N-Things, Office
Max, Petsmart, Ross
Dress for Less, T.J.
Maxx, Party City, Ulta
Cosmetics

39. Lima Center Fee 100.0 Built 201,154 AMES, Hobby Lobby, Regal
Lima, OH 1978 Cinema

40. Lincoln Crossing Fee 100.0 Built 161,337 Wal-Mart, PetsMart
O"Fallon, IL 1990

41. Mainland Crossing Fee (8) 80.0 Built 390,987 Hobby Lobby, Sam's Club,
Galveston, TX 1991 Wal-Mart

42. Mall of Georgia Fee 50.0 Built 440,512 Target, Nordstrom Rack,
Crossing Gwinnett 1999 Best Buy, Staples, T.J.
County, GA Maxx N More, (11)

</TABLE>

24
<PAGE>

44. Martinsville Plaza Space 100.0 Built 102,162 Rose's
Martinsville, VA Lease (2036) 1967

45. Marwood Plaza Fee 100.0 Built 105,785 Kroger
Indianapolis, IN 1962

46. Matteson Plaza Fee 100.0 Built 275,455 Service Merchandise,
Matteson, IL 1988 Dominick's, Michael's
Arts & Crafts, Value
City

47. Memorial Plaza Fee 100.0 Built 131,177 Office Max, (11)
Sheboygan, WI 1966

48. Mounds Mall Fee 100.0 Built 7,500 Kerasotes Theater
Cinema Anderson, IN 1974

49. Muncie Plaza Fee 100.0 Built 172,651 Kohl's, Office Max, Shoe
Muncie, IN 1998 Carnival, T.J. Maxx

50. New Castle Plaza Fee 100.0 Built 91,648 Goody's
New Castle, IN 1966

51. North Ridge Plaza Fee 100.0 Built 367,282 Service Merchandise,
Joliet, IL 1985 Best Buy, Cub Foods,
Hobby Lobby, Office Max

52. North Riverside Park Fee 100.0 Built 119,608 Dominick's
Plaza North Riverside, IL 1977

53. Northland Plaza Fee and Ground 100.0 Built 209,515 Marshalls, Phar-Mor,
Columbus, OH Lease (7) (2085) 1988 Service Merchandise (5)

54. Northwood Plaza Fee 100.0 Built 209,374 Target, Cinema Grill,
Fort Wayne, IN 1974 (11)

55. Park Plaza Fee and Ground 100.0 Built 109,480 Walmart (5)
Hopkinsville, KY Lease (7) (2039) 1968

56. Plaza at Buckland Fee 35.0 Built 336,935 Toys "R" Us, Jo-Ann
Hills, The 1993 Etc., Kids "R" Us,
Manchester, CT Service Merchandise,
Comp USA,
Linens-N-Thing's, Party
City, Bolton's, The
Floor Store

</TABLE>

25
<PAGE>

58. Ridgewood Court Fee 35.0 Built 240,844 T.J. Maxx, Service
Jackson, MS 1993 Merchandise, (11)

59. Rockaway Convenience Fee 100.0 Acquired 135,283 Kids "R" Us, AMCE
Center 1998 Grocery, American Multi
Rockaway, NJ Cinema

60. Royal Eagle Plaza Fee 35.0 Built 199,118 Kmart, Stein Mart
Coral Springs, FL 1989

61. Shops at Northeast Fee 100.0 Built 226,611 Old Navy, Nordstrom
Plaza, The 1999 Rack, Bed, Bath &
Hurst, TX Beyond, Office Maxx,
Ultra Cosmetics, Best
Buy

62. St. Charles Fee 100.0 Built 432,860 Value City Furniture,
Towne Plaza 1987 T.J. Maxx, Ames, Jo Ann
Waldorf, MD Fabrics, CVS, Shoppers
Food Warehouse, (11)

63. Teal Plaza Fee 100.0 Built 101,087 Circuit City, Hobby-
Lafayette, IN 1962 Lobby, The Pep Boys

64. Terrace at The Fee 100.0 Built 332,980 Marshalls, Service
Florida Mall 1989 Merchandise, Target,
Orlando, FL Home Place, (11)

65. Tippecanoe Plaza Fee 100.0 Built 94,598 Best Buy, Barnes & Noble
Lafayette, IN 1974

66. University Center Fee 60.0 Built 150,548 Best Buy, Michaels,
South Bend, IN 1980 Service Merchandise

67. Village Park Plaza Fee 35.0 Built 503,070 Wal-Mart, Galyan's,
Westfield, IN 1990 Frank's Nursery, Jo-Ann
Fabrics, Kohl's, Marsh

68. Wabash Village Ground 100.0 Built 124,748 Kmart
West Lafayette, IN Lease (2063) 1970

69. Washington Plaza Fee 100.0 Built 50,107 Kids "R" Us
Indianapolis, IN 1976

</TABLE>

26
<PAGE>

<TABLE>
<CAPTION>
Ownership
Interest (Expiration Ownership Year Build or
Name/Location if Lease)(1) Interest(2) Acquired Total GLA Anchors
------------- -------------------- ----------- ------------- --------- ------------------------
<C> <C> <C> <C> <C> <C> <S>
70. Waterford Lakes Fee 100.0 Built 544,048 Super Target, T.J. Maxx,
Town Center 1999 Barnes & Noble, Regal
Orlando, FL 20-Plex, Ross Dress for
Less, PetsMart, Bed,
Bath & Beyond, (11)

71. West Ridge Plaza Fee 100.0 Built 237,729 Target, T.J. Maxx, Toy's
Topeka, KS 1988 "R" Us, Magic Forest

72. West Town Corners Fee 23.3 Built 384,988 Wal-Mart, Service
Altamonte Springs, FL 1989 Merchandise, Sports
Authority, PetsMart,
Winn Dixie

73. Westland Park Plaza Fee 23.3 Built 163,154 Burlington Coat Factory,
Orange Park, FL 1989 PetsMart, Sports
Authority

74. White Oaks Plaza Fee 100.0 Built 400,303 Kohl's, Kids "R" Us,
Springfield, IL 1986 Office Max, T.J. Maxx,
Toys "R" Us, Cub Foods

75. Wichita Mall Ground 100.0 Built 379,461 Ward, Office Max, (11)
Wichita, KS Lease (2022) 1969

76. Willow Knolls Court Fee 35.0 Built 382,377 Kohl's, Phar-Mor, Sam's
Peoria, IL 1990 Wholesale Club, Willow
Knolls Theaters 14

77. Wood Plaza Ground 100.0 Built 94,993 Country General
Fort Dodge, LA Lease (2045) 1968

78. Yards Plaza, The Fee 35.0 Built 273,054 Burlington Coat Factory,
Chicago, IL 1990 Ward, Dominick's (5)

PROPERTIES UNDER CONSTRUCTION
1. Arundel Mills Anne Fee 37.5 (31) 1,400,000 Sun & Ski Sports, For
Arundel, MD Your Entertainment,
Iguana Amerimex,
Jillian's, Bed, Bath &
Beyond

2. Orlando Premium Outlets Fee 50.0 (32) 433,000
Orlando, FL
</TABLE>
(Footnotes on Next Page)

27
<PAGE>

- --------
(1) The date listed is the expiration date of the last renewal option
available to the SPG Operating Partnership under the ground lease. In a
majority of the ground leases, the lessee has either a right of first
refusal or the right to purchase the lessor's interest. Unless otherwise
indicated, each ground lease listed in this column covers at least 50% of
its respective Property.
(2) The SPG Operating Partnership's interests in some of the Properties held
as joint venture interests are subject to preferences on distributions in
favor of other partners or the SPG Operating Partnership.
(3) This retailer operates two stores at this Property.
(4) Primarily retail space with approximately 105,800 square feet of office
space.
(5) Indicates anchor has closed, but the SPG Operating Partnership still
collects rents and/or fees under an agreement.
(6) This Property is managed by a third party.
(7) Indicates ground lease covers less than 15% of the acreage of this
Property.
(8) The SPG Operating Partnership receives substantially all of the economic
benefit of these Properties.
(9) Indicates anchor is currently under construction.
(10) Indicates ground lease(s) cover(s) less than 50% of the acreage of the
Property.
(11) Includes an anchor space currently vacant.
(12) Primarily retail space with approximately 119,900 square feet of office
space.
(13) The SPG Operating Partnership sold its 50% interest effective January 31,
2000.
(14) The SPG Operating Partnership is entitled to 50% of the economic benefits
of this property.
(15) Indicates ground lease covers all of the Property except for parcels
owned in fee by anchors.
(16) Primarily retail space with approximately 52,000 square feet of office
space.
(17) The SPG Operating Partnership assumed management effective January 1,
2000.
(18) Primarily retail space with approximately 69,900 square feet of office
space
(19) Primarily retail space with approximately 129,500 square feet of office
space.
(20) Primarily retail space with approximately 73,800 square feet of office
space.
(21) Includes outlots in which the SPG Operating Partnership has an 85%
interest and which represent less than 3% of the GLA and total annualized
base rent for the Property.
(22) The SPG Operating Partnership owns 60% of the original phase of this
Property and 55% of phase II.
(23) Primarily retail space with approximately 167,100 square feet of office
space.
(24) Primarily retail space with approximately 499,700 square feet of office
space.
(25) Primarily office space with approximately 12,800 square feet of retail
space.
(26) Primarily office space with approximately 24,300 square feet of retail
space.
(27) Effective January 1, 2000, the SPG Operating Partnership acquired the
remaining ownership interest in this property.
(28) Indicates ground lease covers outparcel only.
(29) The SPG Operating Partnership demolished the previously existing regional
mall, Charles Towne Square, and is in the process of rebuilding this
community center and a cinema on the land.
(30) The SPG Operating Partnership sold its interest effective February 18,
2000.
(31) Scheduled to open during the fall of 2000.
(32) Scheduled to open during the summer of 2000.

28
<PAGE>

Land Held for Development

The SPG Operating Partnership has direct or indirect ownership interests in
eleven parcels of land held for future development, containing an aggregate of
approximately 828 acres located in eight states. In addition, the SPG Operating
Partnership, through the Management Company, has interests in two parcels of
land in Mt. Juliet, Tennessee and Gwinnett County, Georgia totaling 243 acres,
which were previously held for development, but are now being marketed for
sale.

Joint Ventures

At certain of the Properties held as joint ventures, the SPG Operating
Partnership and its partners each have rights of first refusal, subject to
certain conditions, to acquire additional ownership in the Property should the
other partner decide to sell its ownership interest. In addition, certain of
the Properties held as joint ventures contain "buy-sell" provisions, which
gives the partners the right to trigger a purchase or sale of ownership
interest amongst the partners.

Mortgage Financing on Properties

The following table sets forth certain information regarding the mortgages
and other debt encumbering the Properties. All mortgage and property related
debt is nonrecourse, although certain Unitholders have guaranteed a portion of
the property related debt in the aggregate amount of $643.7 million.

29
<PAGE>

MORTGAGE AND OTHER DEBT ON PORTFOLIO PROPERTIES
(Dollars in thousands)

<TABLE>
<CAPTION>
Interest Face Amount Annual Debt Maturity
Property Name Rate at 12/31/99 Service Date
------------- -------- ----------- ----------- --------
<S> <C> <C> <C> <C>
Consolidated Indebtedness:
Secured Indebtedness
Simon Property Group, L.P. :
Anderson Mall--1 (1)........... 6.57% $ 19,000 $ 1,248(2) 3/15/03(4)
Anderson Mall--2 (1)........... 7.01% 8,500 596(2) 3/15/03(4)
Arboretum...................... 7.32%(3) 34,000 2,490(2) 11/30/03(4)
Arsenal Mall--1................ 6.75% 34,603 2,724 9/28/08
Arsenal Mall--2................ 8.20% 2,268 286 5/15/16
Battlefield Mall--1............ 7.50% 47,610 4,765 1/1/04
Battlefield Mall--2............ 6.81% 44,567 3,524 1/1/04
Biltmore Square................ 7.15% 25,765 2,795 1/1/01
Bloomingdale Court (5)......... 7.78% 29,879 2,578 10/1/09
Century III Mall--1............ 6.78% 66,000 4,475(2) 7/1/03
Chesapeake Center.............. 8.44% 6,563 554(2) 5/15/15
Chesapeake Square.............. 7.28% 46,739 4,883 1/1/01
Cielo Vista Mall--1 (6)........ 9.38% 54,502 5,672 5/1/07
Cielo Vista Mall--2 (6)........ 8.13% 1,731 156 11/1/05
Cielo Vista Mall--3 (6)........ 6.76% 38,584 3,039 5/1/07
CMBS Loan--Fixed Component
(7)........................... 7.31% 175,000 12,790(2) 12/15/07
CMBS Loan--Variable Component
(7)........................... 6.16%(8) 50,000 3,078(2) 12/15/07
College Mall--1 (9)............ 7.00% 41,598 3,908 1/1/09
College Mall--2 (9)............ 6.76% 11,883 935 1/1/09
Columbia Center................ 7.62% 42,326 3,225(2) 3/15/02
Crystal River.................. 8.82%(10) 15,292 1,349(2) 1/1/01
Eastgate Consumer Mall......... 6.82%(11) 22,929 1,564(2) 3/29/02(4)
Eastland Mall (OK)--1 (12)..... 6.81% 15,000 1,022(2) 3/15/03(4)
Florida Mall, The.............. 6.65% 90,000 5,985(2) 2/28/00
Forest Mall--1 (12)............ 6.57% 12,800 841(2) 3/15/03(4)
Forest Mall--2 (12)............ 6.81% 2,750 187(2) 3/15/03(4)
Forest Plaza (5)............... 7.78% 16,388 1,414 10/1/09
Forest Village Park Mall--1
(1)........................... 6.57% 20,600 1,353(2) 3/15/03(4)
Forest Village Park Mall--2
(1)........................... 7.01% 1,250 88(2) 3/15/03(4)
Forum Phase I--Class A-1....... 7.13% 46,996 3,348(2) 5/15/04
Forum Phase I--Class A-2....... 6.19%(13) 44,386 2,747(2) 5/15/04
Forum Phase II--Class A-1...... 7.13% 43,004 3,064(2) 5/15/04
Forum Phase II--Class A-2...... 6.19%(13) 40,614 2,514(2) 5/15/04
Golden Ring Mall (12).......... 6.57% 29,750 1,955(2) 3/15/03(4)
Great Lakes Mall--1............ 6.74% 52,632 3,547(2) 3/1/01
Great Lakes Mall--2............ 7.07% 8,489 600(2) 3/1/01
Greenwood Park Mall--1 (9)..... 7.00% 34,839 3,273 1/1/09
Greenwood Park Mall--2 (9)..... 6.76% 61,397 4,831 1/1/09
Grove at Lakeland Square, The.. 8.44% 3,750 317(2) 5/15/15
Gulf View Square............... 8.25% 37,064 3,652 10/1/06
Highland Lakes Center.......... 7.32%(3) 14,377 1,053(2) 3/1/02
Hutchinson Mall--1 (12)........ 8.44% 11,382 1,108 3/15/03(4)
Hutchinson Mall--2(12)......... 6.81% 4,500 306(2) 3/15/03(4)
Jefferson Valley Mall.......... 6.37%(14) 50,000 3,186(2) 1/12/00
</TABLE>

30
<PAGE>

<TABLE>
<CAPTION>
Interest Face Amount Annual Debt Maturity
Property Name Rate at 12/31/99 Service Date
------------- -------- ----------- ----------- --------
<S> <C> <C> <C> <C>
Keystone at the Crossing...... 7.85% 63,569 5,642 7/1/27
Lake View Plaza (5)........... 7.78% 21,785 1,880 10/1/09
Lakeline Mall................. 7.65% 72,180 6,300 5/1/07
Lakeline Plaza (5)............ 7.78% 23,883 2,061 10/1/09
Lima Mall--1.................. 7.12% 14,180 1,010(2) 3/1/02
Lima Mall--2.................. 7.12% 4,723 336(2) 3/1/02
Lincoln Crossing (5).......... 7.78% 3,298 285 10/1/09
Longview Mall--1 (1).......... 6.57% 22,100 1,452(2) 3/15/03(4)
Longview Mall--2 (1).......... 7.01% 5,500 386(2) 3/15/03(4)
Mainland Crossing............. 7.32%(3) 1,603 117(2) 3/31/02
Markland Mall (12)............ 6.57% 10,000 657(2) 3/15/03(4)
Matteson Plaza (5)............ 7.78% 9,593 828 10/1/09
McCain Mall--1 (6)............ 9.38% 25,450 2,721 5/1/07
McCain Mall--2 (6)............ 6.76% 17,809 1,402 5/1/07
Melbourne Square.............. 7.42% 38,869 3,374 2/1/05
Miami International Mall...... 6.91% 45,920 3,758 12/21/03
Midland Park Mall--1 (12)..... 6.57% 22,500 1,478(2) 3/15/03(4)
Midland Park Mall--2 (12)..... 6.81% 5,500 375(2) 3/15/03(4)
Muncie Plaza (5).............. 7.78% 8,294 716 10/1/09
Net Lease (Atlanta)........... 8.00% 868 263 12/1/02
Net Lease (Braintree)......... 9.75% 22 66 4/1/00
Net Lease (Chattanooga)....... 6.80% 625 274 5/31/02
North East Mall............... 7.20%(15) 73,636 5,300(2) 5/21/04(4)
North Riverside Park Plaza--
1............................ 9.38% 3,769 452 9/1/02
North Riverside Park Plaza--
2............................ 10.00% 3,617 420 9/1/02
North Towne Square (12)....... 6.57% 23,500 1,544(2) 3/15/03(4)
Northgate Shopping Center..... 7.62% 79,035 6,022(2) 3/15/02
Orland Square................. 7.74%(16) 50,000 3,871(2) 9/1/01
Paddock Mall.................. 8.25% 29,478 2,905 10/1/06
Palm Beach Mall............... 7.50% 49,419 4,803 12/15/02
Port Charlotte Town Center--
1............................ 7.28% 45,024 3,857 1/1/01
Port Charlotte Town Center--
2............................ 7.28% 7,075 591 1/1/01
Randall Park Mall--1.......... 7.33% 35,000 2,566(2) 7/11/08
Randall Park Mall--2.......... 7.33% 5,000 367(2) 7/11/08
Regency Plaza (5)............. 7.78% 4,497 388 10/1/09
Richmond Towne Square......... 6.82%(11) 45,898 3,131(2) 7/15/03(4)
River Oaks Center............. 8.67% 32,500 2,818(2) 6/1/02
Shops @ Mission Viejo......... 6.87%(17) 110,068 7,564(2) 9/14/03(4)
South Park Mall--1 (1)........ 7.25% 19,508 1,717 3/15/03(4)
South Park Mall--2 (1)........ 7.01% 6,876 570 3/15/03(4)
St. Charles Towne Plaza (5)... 7.78% 28,780 2,483 10/1/09
Sunland Park Mall (18)........ 8.63% 39,125 3,773 1/1/26
Tacoma Mall................... 7.62% 92,474 7,047(2) 3/15/02
Terrace at Florida Mall, The.. 8.44% 4,688 396(2) 5/15/15
Tippecanoe Mall--1 (9)........ 8.45% 45,485 4,647 1/1/05
Tippecanoe Mall--2 (9)........ 6.81% 15,845 1,253 1/1/05
Towne East Square--1 (9)...... 7.00% 54,998 5,167 1/1/09
Towne East Square--2 (9)...... 6.81% 24,758 1,958 1/1/09
Treasure Coast Square--1...... 7.42% 52,427 4,714 1/1/06
Treasure Coast Square--2...... 8.06% 11,992 1,127 1/1/06
</TABLE>

31
<PAGE>

<TABLE>
<CAPTION>
Interest Face Amount Annual Debt Maturity
Property Name Rate at 12/31/99 Service Date
------------- -------- ----------- ----------- --------
<S> <C> <C> <C> <C>
Trolley Square--1........ 5.81% 19,000 1,104(2) 7/23/00(19)
Trolley Square--2........ 7.32%(3) 4,641 340(2) 7/23/00
Trolley Square--3........ 7.32%(3) 3,500 256(2) 7/23/00
University Park Mall..... 7.43% 59,500 4,421(2) 10/1/07
Valle Vista Mall--1 (6).. 9.38% 33,707 3,604 5/1/07
Valle Vista Mall--2 (6).. 6.81% 7,916 626 5/1/07
Waterford Lakes.......... 7.22%(20) 30,336 2,191(2) 8/16/04(4)
West Ridge Plaza (5)..... 7.78% 5,796 500 10/1/09
White Oaks Mall.......... 7.41%(21) 16,500 1,223(2) 3/1/00
White Oaks Plaza (5)..... 7.78% 17,688 1,526 10/1/09
Windsor Park Mall--1..... 8.00% 5,694 544 6/1/00
Windsor Park Mall--2..... 8.00% 8,749 787 5/1/12
-----------
Total Consolidated Secured
Indebtedness.................... $ 3,087,077
===========
Unsecured Indebtedness
Simon Property Group, L.P.
:
Medium Term Notes--1..... 7.13% 100,000 7,125(22) 6/24/05
Medium Term Notes--2..... 7.13% 180,000 12,825(22) 9/20/07
Putable Asset Trust
Securities.............. 6.75% 100,000 6,750(22) 11/15/03
Unsecured Term Loan...... 6.62%(23) 150,000 9,934(2) 2/28/02(4)
Unsecured Notes--1....... 6.88% 250,000 17,188(22) 11/15/06
Unsecured Notes--2A...... 6.75% 100,000 6,750(22) 7/15/04
Unsecured Notes--2B...... 7.00% 150,000 10,500(22) 7/15/09
Unsecured Notes--3....... 6.88% 150,000 10,313(22) 10/27/05
Unsecured Notes--4A...... 6.63% 375,000 24,844(22) 6/15/03
Unsecured Notes--4B...... 6.75% 300,000 20,250(22) 6/15/05
Unsecured Notes--4C...... 7.38% 200,000 14,750(22) 6/15/18
Unsecured Notes--5A...... 6.75% 300,000 20,250(22) 2/9/04
Unsecured Notes--5B...... 7.13% 300,000 21,375(22) 2/9/09
Unsecured Revolving
Credit Facility--
(1.25B)................. 6.47%(24) 785,000 50,809(2) 8/25/02
Acquisition Facility--2
(1.4B).................. 6.47%(25) 450,000 29,126(2) 3/24/00
Acquisition Facility--3
(1.4B).................. 6.47%(25) 500,000 32,363(2) 9/24/00
Mandatory Par Put
Remarketed Securities... 7.00%(26) 200,000 14,000(22) 6/15/08
-----------
4,590,000
Shopping Center
Associates:
Unsecured Notes--SCA 1... 6.75% 150,000 10,125(22) 1/15/04
Unsecured Notes--SCA 2... 7.63% 110,000 8,388(22) 5/15/05
-----------
260,000
The Retail Property Trust:
Unsecured Notes--CPI 1... 9.00% 250,000 22,500(22) 3/15/02
Unsecured Notes--CPI 2... 7.05% 100,000 7,050(22) 4/1/03
Unsecured Notes--CPI 3... 7.75% 150,000 11,625(22) 8/15/04
Unsecured Notes--CPI 4... 7.18% 75,000 5,385(22) 9/1/13
Unsecured Notes--CPI 5... 7.88% 250,000 19,688(22) 3/15/16
-----------
825,000
-----------
Total Consolidated Unsecured
Indebtedness.................... $ 5,675,000
-----------
Total Consolidated Indebtedness
at Face Amounts................. $ 8,762,077
Net Premium on Indebtedness...... $ 6,764
-----------
Total Consolidated Indebtedness.. $ 8,768,841(27)
===========
</TABLE>

32
<PAGE>

<TABLE>
<CAPTION>
Interest Face Amount Annual Debt Maturity
Property Name Rate at 12/31/99 Service Date
------------- -------- ----------- ----------- --------
<S> <C> <C> <C> <C>
Joint Venture Indebtedness
(28):
Apple Blossom Mall............ 7.99% 40,926 3,874 9/10/09
Arizona Mills................. 7.12%(29) 142,216 10,129(2) 2/1/02(4)
Atrium at Chestnut Hill--1.... 7.29% 42,846 4,139 4/1/01
Atrium at Chestnut Hill--2.... 8.16% 11,725 1,125 4/1/01
Auburn Mall................... 7.99% 47,913 4,222 9/10/09
Aventura Mall--A.............. 6.55% 141,000 9,231(2) 4/6/08
Aventura Mall--B.............. 6.60% 25,400 1,675(2) 4/6/08
Aventura Mall--C.............. 6.89% 33,600 2,314(2) 4/6/08
Avenues, The.................. 8.36% 56,951 5,555 5/15/03
Cape Cod Mall................. 7.62%(30) 59,665 4,548(2) 4/1/03(4)
Circle Centre Mall--1......... 6.26%(31) 60,000 3,758(2) 1/31/04(4)
Circle Centre Mall--2......... 7.32%(32) 7,500 549(2) 1/31/04(4)
CMBS Loan--Fixed Component
(IBM) (33)................... 7.41% 300,000 22,229(2) 5/1/06
CMBS Loan--Floating Component
(IBM) (33)................... 6.32% 185,000 11,693(2) 5/1/03
Cobblestone Court............. 7.22%(34) 6,180 446(2) 11/30/05
Concord Mills................. 7.17%(35) 164,442 11,795(2) 12/2/03(4)
Coral Square.................. 7.40% 53,300 3,944(2) 12/1/00
Crystal Court................. 7.22%(34) 3,570 258(2) 11/30/05
Crystal Mall.................. 8.66% 49,235 5,384 2/1/03
Dadeland Mall................. 6.52%(36) 140,000 9,132(2) 12/10/00
Emerald Square Mall........... 9.16% 157,500 14,427(2) 4/1/00
Fairfax Court................. 7.22%(34) 10,320 745(2) 11/30/05
Gaitway Plaza................. 7.22%(34) 7,350 531(2) 11/30/05
Grapevine Mills--2............ 6.47% 155,000 10,029(2) 10/1/08
Great Northeast Plaza......... 9.04% 17,519 2,110 6/1/06
Greendale Mall................ 8.23% 42,000 3,457(2) 11/1/06
Gwinnett Place--1............. 7.54% 39,446 3,412 4/1/07
Gwinnett Place--2............. 7.25% 85,960 7,070 4/1/07
Highland Mall--1.............. 9.75% 7,453 1,655 12/1/09
Highland Mall--2.............. 8.50% 188 116 10/1/01
Highland Mall--3.............. 9.50% 1,822 607 11/1/01
Indian River Commons.......... 7.58% 8,399 637(37) 11/1/04
Indian River Mall............. 7.58% 46,602 3,532(37) 11/1/04
Lakeland Square............... 7.26% 51,840 4,368 12/22/03
Liberty Tree Mall--1.......... 7.32%(3) 47,319 4,176 10/1/01
Liberty Tree Mall--2.......... 9.98%(38) 8,377 925 10/1/01
Mall at Rockingham............ 7.79%(39) 100,000 7,793(2) 8/24/00
Mall of America............... 6.69%(40) 312,000 20,881(2) 11/19/03
Mall of Georgia............... 7.09% 200,000 14,180(2) 7/1/10
Mall of Georgia Crossing...... 7.25% 23,931 1,735(2) 6/10/06(4)
Mall of New Hampshire--1...... 6.96% 104,779 8,345 10/1/08
Mall of New Hampshire--2...... 8.53% 8,483 987 10/1/08
Metrocenter................... 8.45% 30,769 3,028 2/28/08
Montreal Forum................ 6.50%(41) 11,011 716(2) 1/31/02
Northfield Square............. 9.52% 23,753 2,575 4/1/00
Northshore Mall............... 9.05% 161,000 14,571(2) 5/14/04
Ontario Mills--4.............. 0.00%(42) 5,000 300(40) 12/28/09
Ontario Mills--5.............. 6.75% 143,594 11,042 11/2/08
Orlando Premium Outlets....... 7.32%(43) 20,845 1,526(2) 2/12/04(4)
</TABLE>

33
<PAGE>

<TABLE>
<CAPTION>
Interest Face Amount Annual Debt Maturity
Property Name Rate at 12/31/99 Service Date
------------- -------- ----------- ----------- --------
<S> <C> <C> <C> <C>
Plaza at Buckland Hills,
The........................ 7.22%(34) 17,680 1,276(2) 11/30/05
Ridgewood Court............. 7.22%(34) 7,980 576(2) 11/30/05
Royal Eagle Plaza........... 7.22%(34) 7,920 572(2) 11/30/05
Seminole Towne Center....... 6.88% 70,500 4,850(2) 1/1/06
Shops at Sunset Place, The.. 7.07%(44) 102,191 7,227(2) 6/30/02(4)
Smith Haven Mall............ 7.86% 115,000 9,039(2) 6/1/06
Solomon Pond................ 7.83% 96,250 8,564 2/1/04
Source, The--2.............. 6.65% 124,000 8,246(2) 11/6/08
Square One.................. 8.40% 105,825 10,138 12/1/01
Tower Shops, The............ 7.02%(45) 12,900 906 3/13/00
Town Center at Cobb--1...... 7.54% 50,205 4,347 4/1/07
Town Center at Cobb--2...... 7.25% 65,471 5,381 4/1/07
Village Park Plaza.......... 7.22%(34) 8,960 647(2) 11/30/05
West Town Corners........... 7.22%(34) 10,330 746(2) 11/30/05
West Town Mall.............. 6.90% 76,000 5,244(2) 5/1/08
Westchester, The--1......... 8.74% 150,849 14,478 9/1/05
Westchester, The--2......... 7.20% 53,674 4,402 9/1/05
Westland Park Plaza......... 7.22%(34) 4,950 357(2) 11/30/05
Willow Knolls Court......... 7.22%(34) 6,490 469(2) 11/30/05
Yards Plaza, The............ 7.22%(34) 8,270 597(2) 11/30/05
----------
Total Joint Venture Indebtedness at
Face Amounts....................... $4,499,174
Premium on Indebtedness............. $ 22,521
----------
Total Joint Venture Indebtedness.... $4,521,695(46)
==========
</TABLE>
- --------
(1) Loans secured by these four Properties are cross-collateralized and cross-
defaulted.
(2) Requires monthly payment of interest only.
(3) LIBOR + 1,500%.
(4) Includes applicable extension available at the SPG Operating Partnership's
option.
(5) These eleven Properties are cross-collateralized and cross-defaulted.
(6) These three Properties are cross-collateralized and cross-defaulted.
(7) Secured by cross-collateralized and cross-defaulted mortgages encumbering
seven of the Properties (Bay Park Square, Boardman Plaza, Cheltenham
Square, De Soto Square, Upper Valley Mall, Washington Square, and West
Ridge Mall).
(8) LIBOR + 0.365% through an interest rate protection agreement is
effectively fixed at an all-in-one rate of 6.16%.
(9) Loans secured by these four Properties are cross-collateralized and cross-
defaulted.
(10) LIBOR + 3.000%.
(11) LIBOR + 1.000%
(12) Loans secured by these seven Properties are cross-collateralized and
cross-defaulted.
(13) LIBOR + 0.300%, through an interest rate protection agreement is
effectively fixed at an all-in-one rate of 6.19%.
(14) LIBOR + 0.550% with LIBOR capped at 8.700% through maturity.
(15) LIBOR + 1.375%.
(16) LIBOR + 0.500%, with LIBOR swapped at 7.24% through maturity.
(17) LIBOR + 1.050%.
(18) Lender also participates in a percentage of certain gross receipts above a
specified base.
(19) July 23, 2000 is the earliest date on which the lender may call the bonds.
(20) LIBOR + 1.400%.
(21) LIBOR + 1.300%, with LIBOR set using a 90 day rate.

34
<PAGE>

(22) Requires semi-annual payments of interest only.
(23) LIBOR + 0.800%.
(24) $1,250,000 unsecured revolving credit facility. Currently, bears interest
at LIBOR + 0.650% and provides for different pricing based upon the SPG
Operating Partnership's investment grade rating. Two interest rate caps
currently limit LIBOR on $90,000 and $50,000 of this indebtedness to
11.53% and 16.77%, respectively. As of 12/31/99, $460,519 was available
after outstanding borrowings and letters of credit.
(25) LIBOR + 0.650%. Consists of two tranches of $450,000 and $500,000 due
03/24/00 and 09/24/00, respectively. Commitments have been received in
excess of $450,000 to refinance the first tranche for one year. SPG and
the SPG Operating Partnership are co-obligors of this debt.
(26) The MOPPRS have an actual maturity of June 15, 2028, but are subject to
mandatory tender on June 16, 2008.
(27) Includes minority interest partners' share of consolidated indebtedness of
$160,517.
(28) As defined in the accompanying consolidated financial statements, Joint
Venture Properties are those accounted for using the equity method of
accounting.
(29) LIBOR + 1.300%, with LIBOR capped at 9.500% through maturity.
(30) LIBOR + 1.800%.
(31) LIBOR + 0.440%, with LIBOR capped at 8.81% through maturity.
(32) LIBOR + 1.500%, with LIBOR capped at 7.75% through maturity.
(33) These Commercial Mortgage Notes are secured by cross-collateralized
mortgages encumbering thirteen Properties (Eastland Mall, Empire East,
Empire Mall, Granite Run Mall, Mesa Mall, Lake Square, Lindale Mall,
Northpark Mall, Southern Hills Mall, Southpark Mall, Southridge Mall,
Rushmore Mall, and Valley Mall). A weighted average rate is used for each
component. The floating component has an interest protection agreement
which caps LIBOR at 11.67%.
(34) The interest rate on this cross-collateralized and cross-defaulted
mortgage is fixed at 7.22% through November of 2000 and thereafter the
rate is the greater of 7.22% or 2.00% over the then current yield of a six
month treasury bill selected by lender.
(35) LIBOR + 1.350%.
(36) LIBOR + 0.700%.
(37) Loans require monthly interest payments only until they begin amortizing
November, 2000.
(38) LIBOR + 4.160%.
(39) LIBOR + 1.970%.
(40) LIBOR + 0.870%, with LIBOR capped at 8.130% through April 30, 2000.
(41) Canadian Prime.
(42) Beginning January 2000, this note will bear interest at 6.000%.
(43) LIBOR + 1.500%, rate may be reduced based upon project performance.
(44) LIBOR + 1.250%, rate may be reduced based upon project performance.
(45) LIBOR + 1.200%.
(46) Includes outside partners' share of indebtedness of $2,635,335 and
indebtedness of an affiliate of $37,097.

35
<PAGE>

Item 3. Legal Proceedings

Please refer to Note 13 of the attached audited financial statements of the
SPG Operating Partnership for a summary of material litigation.

SPG Properties and the SPG Operating Partnership are subject to routine
litigation and administrative proceedings arising in the ordinary course of its
business, none of which are expected to have a material adverse effect on its
financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

None.
PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters

Market Information

There is no established public trading market for SPG Properties common
stock, which is substantially wholly-owned by SPG. The following table sets
forth for the periods indicated, the distributions declared per share of SPG
Properties common stock:

<TABLE>
<CAPTION>
Declared
Distribution
------------
<S> <C>
1999
1st Quarter................................................ $ 0.5050
2nd Quarter................................................ $ 0.5050
3rd Quarter................................................ $ 0.5050
4th Quarter................................................ $ 0.5050
1998
1st Quarter................................................ $ 0.5050
2nd Quarter................................................ $ 0.5050
3rd Quarter................................................ $ 0.5050
4th Quarter................................................ $ 0.5050(1)
</TABLE>
- --------
(1) Includes a $0.4721 distribution declared in the third quarter of 1998, but
not payable until the fourth quarter of 1998, related to the CPI Merger,
designated to align the time periods of distribution payments of the merged
companies. The current annual distribution rate is $2.02 per share.

Holders

The number of holders of record of the shares of common stock of SPG
Properties was 109 as of March 13, 2000.

Unregistered Sales of Equity Securities

SPG Properties did not issue any equity securities that were not required to
be registered under the Securities Act of 1933, as amended during the fourth
quarter of 1999.

36
<PAGE>

Item 6. Selected Financial Data

The following table sets forth selected financial data for SPG Properties.
The financial data should be read in conjunction with the financial statements
and notes thereto and with Management's Discussion and Analysis of Financial
Condition and Results of Operations.

<TABLE>
<CAPTION>
As of or for the Year Ended December 3l,
------------------------------------------------------
1999(1) 1998(1) 1997(1) 1996 1995
---------- ---------- ---------- ---------- ----------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
OPERATING DATA(2):
Total revenue........... $ -- $ 932,619 $1,054,167 $ 747,704 $ 553,657
Equity in income of the
SPG Operating
Partnership(3)......... 137,764 44,313 -- -- --
Income before
extraordinary items.... 137,764 185,586 203,133 134,663 101,505
Net income available to
common shareholders.... $ 108,428 $ 116,509 $ 107,989 $ 72,561 $ 57,781
Distributions per common
share(4)............... $ 2.02 $ 2.02 $ 2.01 $ 1.63 $ 1.97
BALANCE SHEET DATA:
Cash and cash
equivalents............ $ 0 $ 0 $ 109,699 $ 64,309 $ 62,721
Total assets............ 2,072,186 2,108,291 7,662,667 5,895,910 2,556,436
Mortgages and other
indebtedness........... 0 0 5,077,990 3,681,984 1,980,759
Shareholders' equity.... $2,072,186 $2,108,291 $1,556,862 $1,304,891 $ 232,946
</TABLE>
- --------
(1) Notes 3, 4 and 5 to the accompanying financial statements of the SPG
Operating Partnership describe the CPI Merger, which occurred on September
24, 1998, and other 1999, 1998 and 1997 real estate acquisitions and
development.
(2) SPG Properties does not report earnings per share, because substantially
all of the common stock of SPG Properties is owned by SPG.
(3) See Note 2 to the accompanying financial statements of SPG Properties.
(4) Represents distributions declared per period, which, in 1996, includes a
distribution of $0.1515 per share declared on August 9, 1996, in connection
with the DRC Merger, designated to align the time periods of distributions
of the merged companies. The current annual distribution rate is $2.02 per
share.

37
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following discussion should be read in conjunction with the Selected
Financial Data, and all of the financial statements and notes thereto included
elsewhere herein. Certain statements made in this report may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of SPG Properties (see below) to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: general economic and business conditions, which
will, among other things, affect demand for retail space or retail goods,
availability and creditworthiness of prospective tenants, lease rents and the
terms and availability of financing; adverse changes in the real estate markets
including, among other things, competition with other companies and technology;
risks of real estate development and acquisition; governmental actions and
initiatives; substantial indebtedness; conflicts of interests; maintenance of
REIT status; and environmental/safety requirements.

Overview

As of December 31, 1999, SPG Properties, Inc. ("SPG Properties"), including
its consolidated subsidiary, held a 48.0% ownership interest in Simon Property
Group, LP (the "SPG Operating Partnership"). This investment is their sole
asset and represents their only source of income. For these reasons, management
has based the following discussion on the results of operations and financial
position of the SPG Operating Partnership. Prior to the September 24, 1998
acquisition, through merger, of Corporate Property Investors, Inc. ("CPI") (the
"CPI Merger") (see Note 4 to the financial statements of the SPG Operating
Partnership), SPG Properties (formerly Simon DeBartolo Group, Inc.) and
subsidiary accounted for their interests in the SPG Operating Partnership using
the consolidated method of accounting. As a result of the CPI Merger and
related transactions, SPG Properties and subsidiary began accounting for their
noncontrolling interests in the SPG Operating Partnership using the equity
method of accounting.

The SPG Operating Partnership is engaged primarily in the ownership,
operation, management, leasing, acquisition, expansion and development of real
estate properties, primarily regional malls and community shopping centers. As
of December 31, 1999, the SPG Operating Partnership owned or held an interest
in 258 income-producing properties in the United States, which consisted of 167
regional malls, 78 community shopping centers, four specialty retail centers,
five office and mixed-use properties and four value-oriented super-regional
malls in 36 states (the "Properties"), five additional retail real estate
properties operating in Europe and two properties currently under construction
(the "Portfolio" or the "Portfolio Properties"). The SPG Operating Partnership
also holds substantially all of the economic interest in M.S. Management
Associates, Inc. (the "Management Company"). See Note 8 to the attached
financial statements of the SPG Operating Partnership for a description of the
activities of the Management Company.

Operating results of the SPG Operating Partnership for the two years ended
December 31, 1999 and 1998, and their comparability to the respective prior
periods, have been significantly impacted by a number of Property acquisitions
and openings beginning in 1997. The greatest impact on results of operations
has come from the CPI Merger and the acquisition of Shopping Center Associates
(the "SCA Acquisition"), which included a series of transactions from September
29, 1997 to June 1, 1998 (see Note 5 to the financial statements of the SPG
Operating Partnership). In addition, the SPG Operating Partnership acquired
ownership interests in, or commenced operations of, a number of other
Properties throughout the comparative periods and, as a result, increased the
number of Properties it accounts for using the consolidated method of
accounting and sold interests in several Properties throughout the comparative
periods (together, the "Property Transactions"). Please refer to "Liquidity and
Capital Resources" for additional information on such 1999 activity and refer
to Note 5 to the financial statements of the SPG Operating Partnership for
information about acquisitions, dispositions and development activity prior to
1999.

38
<PAGE>

Results of Operations

Year Ended December 31, 1999 vs. Year Ended December 31, 1998

Operating income of the SPG Operating Partnership increased $212.7 million
or 33.2% in 1999 as compared to 1998. This increase is primarily the result of
the CPI Merger ($141.3 million) and the Property Transactions ($23.0 million).
Excluding these transactions, operating income increased approximately
$48.5 million, primarily resulting from an approximately $15.1 million increase
in consolidated revenues realized from marketing initiatives throughout the
Portfolio from the SPG Operating Partnership's strategic marketing division,
Simon Brand Ventures ("SBV"); a $39.1 million increase in minimum rents; a $6.3
million increase in gains from sales of peripheral properties; a $7.2 million
increase in interest income and a $4.3 million increase in lease settlement
income, partially offset by a $14.1 million increase in depreciation and
amortization and an $8.6 million decrease in fee income. The increase in
minimum rent primarily results from increased occupancy levels, the replacement
of expiring tenant leases with renewal leases at higher minimum base rents, and
a $7.9 million increase in rents from tenants operating under license
agreements. The increase in depreciation and amortization is primarily due to
an increase in depreciable real estate realized through renovation and
expansion activities.

Interest expense of the SPG Operating Partnership increased $159.6 million,
or 38.0% in 1999 as compared to 1998. This increase is primarily a result of
the CPI Merger ($124.9 million) and the Property Transactions ($18.0 million).
The remaining increase includes incremental interest resulting from the SPG
Operating Partnership's 1998 issuance of $1,075 million of public notes, the
proceeds of which were used primarily to pay down the Credit Facility (see
Liquidity and Capital Resources) ($4.5 million), and incremental interest on
borrowings under the Credit Facility to complete the NED Acquisition, and
acquire ownership interests in the IBM Properties and Mall of America ($6.3
million) (see Liquidity and Capital Resources and Notes 3 and 5 to the
financial statements of the SPG Operating Partnership).

Income from unconsolidated entities of the SPG Operating Partnership
increased $21.5 million in 1999, resulting from an increase in the SPG
Operating Partnership's share of income from partnerships and joint ventures
($22.6 million), partially offset by a decrease in its share of the income from
the Management Company ($1.1 million). The increase in the SPG Operating
Partnership's share of income from partnerships and joint ventures is primarily
the result of the joint venture interests acquired in the CPI Merger
($11.4 million), the IBM Properties ($3.2 million) and the NED Acquisition
($3.1 million). The decrease in Management Company income is primarily the
result of losses associated with interests in two parcels of land held by the
Management Company ($7.3 million), partially offset by increases in SBV
revenues ($2.9 million), construction services revenues ($1.3 million) and
increased earnings from a subsidiary captive insurance company ($1.1 million).

As discussed further in Note 13 to the financial statements of the SPG
Operating Partnership, the $12.0 million unusual item in 1999 of the SPG
Operating Partnership's consolidated statements of operations is the estimated
result of damages arising from the litigation surrounding the 1996 acquisition
through merger of DeBartolo Realty Corporation (the "DRC Merger"). The actual
amount of damages has not yet been determined by the courts.

39
<PAGE>

The $6.7 million extraordinary loss of the SPG Operating Partnership and
$7.1 million extraordinary gain in 1999 and 1998, respectively, are the net
results from refinancings, early extinguishments and/or forgiveness of debt.

Net income of the SPG Operating Partnership was $291.1 million during 1999,
an increase of $50.7 million over 1998, primarily for the reasons discussed
above, and was allocated to the SPG Operating Partnership's partners, including
SPG Properties, based upon their preferred Unit preferences and weighted
average ownership interests in the SPG Operating Partnership during the year.
During 1999, SPG Properties was allocated $108.4 million of income from the SPG
Operating Partnership for the Units it held in the SPG Operating Partnership
and an additional $29.3 million for its preferred unit preference in the SPG
Operating Partnership.

Year Ended December 31, 1998 vs. Year Ended December 31, 1997

Operating income of the SPG Operating Partnership increased $163.0 million
or 34.2% in 1998 as compared to 1997. This increase is primarily the result of
the CPI Merger ($60.3 million), the SCA Acquisition ($55.1 million), the
Property Transactions ($18.5 million) and approximately $12.9 million from SBV.
Excluding these transactions, operating income increased approximately $16.2
million, primarily due to a $20.2 million increase in minimum rent, and
increases in gains from sales of peripheral properties ($3.4 million) and
interest income ($2.8 million), partially offset by a $6.3 million increase in
depreciation and amortization and a $4.3 million increase in recoverable
expenses over tenant reimbursements. The increase in minimum rents results from
increased occupancy levels, the replacement of expiring tenant leases with
renewal leases at higher minimum base rents, and a $4.3 million increase in
rents from tenants operating under license agreements. The increase in
depreciation and amortization is primarily due to an increase in depreciable
real estate realized through renovation and expansion activities.

Interest expense of the SPG Operating Partnership increased $132.5 million,
or 46.0% in 1998 as compared to 1997. This increase is primarily a result of
the CPI Merger ($45.8 million), the SCA Acquisition ($59.1 million) and the
Property Transactions ($15.0 million) and incremental interest ($12.7 million)
on borrowings under the Credit Facility to acquire the IBM Properties (see Note
5 to the financial statements of the SPG Operating Partnership).

The $7.3 million loss on the sale of an asset in 1998 is the result of the
June 30, 1998 sale of Southtown Mall for $3.3 million.

The SPG Operating Partnership's income from unconsolidated entities
increased $9.0 million from $19.2 million in 1997 to $28.1 million in 1998,
resulting from an increase in the SPG Operating Partnership's share of income
from partnerships and joint ventures ($13.6 million), partially offset by a
decrease in the SPG Operating Partnership's share of income from the Management
Company ($4.6 million). The increase in the SPG Operating Partnership's share
of income from partnerships and joint ventures is primarily the result of the
addition of the IBM Properties ($14.5 million) and the CPI Merger ($6.8
million), partially offset by the increase in the amortization of the excess of
the SPG Operating Partnerships' investment over their share of the equity in
the underlying net assets of unconsolidated joint-venture Properties ($8.7
million). The decrease in Management Company includes a $6.0 million decrease
in development fee income.

The $7.1 million gain from extraordinary items in 1998 is the result of debt
forgiveness, partially offset by prepayment penalties and write-offs of
mortgage costs associated with early extinguishments of debt.

Net income of the SPG Operating Partnership was $240.4 million in 1998, as
compared to $203.2 million in 1997, reflecting an increase of $37.2 million,
for the reasons discussed above, and was allocated to the SPG Operating
Partnership's partners, including SPG Properties, based on their preferred unit
preferences and weighted average ownership interests in the SPG Operating
Partnership during the year. During 1998, SPG Properties was allocated $116.5
million of income from the SPG Operating Partnership for the Units it held in
the SPG Operating Partnership and an additional $29.3 million for its preferred
unit preference in the SPG Operating Partnership.

40
<PAGE>

Liquidity and Capital Resources

As of December 31, 1999, the SPG Operating Partnership's balance of
unrestricted cash and cash equivalents was $153.7 million, including $72.4
million related to the SPG Operating Partnership's gift certificate program,
which management does not consider available for general working capital
purposes. The SPG Operating Partnership has a $1.25 billion unsecured revolving
credit facility (the "Credit Facility") which had available credit of $461
million at December 31, 1999. The Credit Facility bears interest at LIBOR plus
65 basis points and has an initial maturity of August 2002, with an additional
one-year extension available at the SPG Operating Partnership's option. SPG and
the SPG Operating Partnership also have access to public equity and debt
markets.

Management anticipates that cash generated from operating performance will
provide the necessary funds on a short- and long-term basis for its operating
expenses, interest expense on outstanding indebtedness, recurring capital
expenditures, and distributions to Unitholders. Sources of capital for
nonrecurring capital expenditures, such as major building renovations and
expansions, as well as for scheduled principal payments, including balloon
payments, on outstanding indebtedness are expected to be obtained from: (i)
excess cash generated from operating performance; (ii) working capital
reserves; (iii) additional debt financing; and (iv) additional equity raised in
the public markets.

Sensitivity Analysis. The SPG Operating Partnership's future earnings, cash
flows and fair values relating to financial instruments are primarily dependent
upon prevalent market rates of interest, primarily LIBOR. Based upon
consolidated indebtedness and interest rates at December 31, 1999, a 0.25%
increase in the market rates of interest would decrease future earnings and
cash flows by approximately $5.8 million, and would decrease the fair value of
debt by approximately $170 million. A 0.25% decrease in the market rates of
interest would increase future earnings and cash flows by approximately $5.8
million, and would increase the fair value of debt by approximately $180
million.

Financing and Debt

At December 31, 1999, the SPG Operating Partnership had consolidated debt of
$8,769 million, of which $6,275 million was fixed-rate debt, bearing interest
at a weighted average rate of 7.3% and $2,494 million was variable-rate debt
bearing interest at a weighted average rate of 6.6%. As of December 31, 1999,
the SPG Operating Partnership had interest rate protection agreements related
to $438 million of consolidated variable-rate debt. The SPG Operating
Partnership's interest rate protection agreements did not materially impact
interest expense or weighted average borrowing rates in 1999.

The SPG Operating Partnership's share of total scheduled principal payments
of mortgage and other indebtedness, including unconsolidated joint venture
indebtedness over the next five years is $6,017 million, with $4,459 million
thereafter. The SPG Operating Partnership, together with SPG and the SRC
Operating Partnership (see Note 1 to the financial statements of the SPG
Operating Partnership), have a combined ratio of consolidated debt-to-market
capitalization of 58.1% and 51.2% at December 31, 1999 and 1998, respectively.
The increase is primarily the result of a decrease in the estimated value of
the Units.

The following summarizes significant financing and refinancing transactions
completed in 1999:

Financings Related to the NED Acquisition. The SPG Operating Partnership's
approximately $894 million share of the cost of the NED Acquisition (see below)
included the assumption of approximately $530.0 million of mortgage
indebtedness; $177.1 million in cash; the issuance of 1,269,446 Units valued at
approximately $36.4 million; the issuance of 2,584,227 7% Convertible Preferred
Units in the SPG Operating Partnership valued at approximately $72.8 million;
and 2,584,227 8% Redeemable Preferred Units in the SPG Operating Partnership
valued at approximately $78.0 million. The SPG Operating Partnership's share of
the cash portion of the purchase price was financed primarily using the Credit
Facility.

41
<PAGE>

In connection with the NED Acquisition, SPG borrowed $92.8 million from the
SPG Operating Partnership at 7.8% interest with a maturity of December 2009.
SPG used the proceeds to purchase a noncontrolling 88% interest in one of the
NED Properties. SPG contributed its interest in such Property to the SPG
Operating Partnership in exchange for 3,617,070 Units. The SPG Operating
Partnership then contributed its interest in such Property to Mayflower (see
Note 3 to the accompanying financial statements of the SPG Operating
Partnership) in exchange for an ownership interest in Mayflower.

Secured Indebtedness. During 1999, the SPG Operating Partnership refinanced
approximately $295 million of mortgage indebtedness on five of the Properties.
The SPG Operating Partnership's share of the refinanced debt is approximately
$270 million. The weighted average maturity of the indebtedness increased from
approximately 2.0 years to 7.4 years, while the weighted average interest rates
decreased from approximately 8.0% to 7.7%.

Credit Facility. During 1999, the SPG Operating Partnership obtained a
three-year extension on the Credit Facility to August 25, 2002, with an
additional one-year automatic extension available at the option of the SPG
Operating Partnership. The maximum and average amounts outstanding during 1999
under the Credit Facility were $785 million and $487 million, respectively.

Unsecured Notes. On February 4, 1999, the SPG Operating Partnership
completed the sale of $600 million of senior unsecured notes. The notes include
two $300 million tranches. The first tranche bears interest at 6.75% and
matures on February 4, 2004 and the second tranche bears interest at 7.125% and
matures on February 4, 2009. The SPG Operating Partnership used the net
proceeds of approximately $594 million to retire the $450 million initial
tranche of the $1.4 billion unsecured bridge loan, which financed the majority
of the cash portion of the CPI Merger (the "Merger Facility") and to pay $142
million on the outstanding balance of the Credit Facility. Following this
offering, the SPG Operating Partnership had $250 million remaining on its debt
shelf registration, under which debt securities may be issued.

In addition to these transactions, the SPG Operating Partnership has also
received commitments from various lending institutions totaling $550 million to
payoff the second $450 million tranche of the Merger Facility, which becomes
due March 24, 2000 and bears interest at LIBOR plus 65 basis points. The new
facility will mature March 2001 and also bears interest at LIBOR plus 65 basis
points.

Acquisitions and Disposals

The NED Acquisition. During 1999, the SPG Operating Partnership acquired
ownership interests in 14 regional malls from New England Development Company
(the "NED Acquisition"). The SPG Operating Partnership acquired one of the
properties directly and formed a joint venture with three partners
("Mayflower"), of which the SPG Operating Partnership owns 49.1%, to acquire
interests in the remaining properties. The SPG Operating Partnership assumed
management responsibilities for the portfolio, which includes approximately
10.7 million square feet of GLA.

Other Acquisitions. During 1999, in addition to the NED Acquisition, the SPG
Operating Partnership acquired the remaining interests in four Properties, and
50% of the economic benefits of Mall of America for a combined price of
approximately $318 million. The purchase price included the assumption of a
$134 million pro rata share of mortgage indebtedness with a weighted average
rate and maturity of 6.8% and 4.4 years, respectively; the issuance of
1,000,000 shares of 8% Redeemable Preferred Stock in SPG for $24 million and
$160 million in cash funded primarily from the Credit Facility. In exchange for
the 8% Redeemable Preferred Stock issued as consideration in the acquisition of
an interest in Mall of America, the SPG Operating Partnership issued preferred
Units to SPG with the same economic terms as the preferred stock.

See Note 5 to the financial statements of the SPG Operating Partnership for
1998 and 1997 acquisition activity.

42
<PAGE>

Management continues to review and evaluate a limited number of individual
property and portfolio acquisition opportunities. Management believes, however,
that due to the rapid consolidation of the regional mall business, coupled with
the current status of the capital markets, that acquisition activity in the
near term will be a less significant component of the SPG Operating
Partnership's growth strategy. Management believes that funds on hand, and
amounts available under the Credit Facility, together with the ability to issue
Units, provide the means to finance certain acquisitions. No assurance can be
given that the SPG Operating Partnership will not be required to, or will not
elect to, even if not required to, obtain funds from outside sources, including
through the sale of debt or equity securities, to finance significant
acquisitions, if any.

Disposals. During 1999, the SPG Operating Partnership sold land at an office
building and a hotel, and two community centers for a total of $47 million,
resulting in a net loss of $2 million. The net proceeds from these sales were
used primarily to reduce the outstanding balance on the Credit Facility.

In addition to the Property sales described above, as a continuing part of
the SPG Operating Partnership's long-term strategic plan, management continues
to pursue the sale of its remaining non-retail holdings and a number of retail
assets that are no longer aligned with the SPG Operating Partnership's
strategic criteria. These include interests in one regional mall and one
community center sold in the first quarter of 2000 and one regional mall and
four community centers, which are under contract for sale. Management expects
the sale prices of its non-core assets, if sold, will not differ materially
from the carrying value of the related assets.

Development Activity

New Developments. Development activities are an ongoing part of the SPG
Operating Partnership's business. During 1999, the SPG Operating Partnership
opened six new Properties aggregating approximately 4.9 million square feet of
GLA. In total, the SPG Operating Partnership invested approximately $400
million on new developments in 1999. With fewer new developments currently
under construction, the SPG Operating Partnership expects 2000 development
costs to be approximately $130 million.

Strategic Expansions and Renovations. A key objective of the SPG Operating
Partnership is to increase the profitability and market share of the Properties
through the completion of strategic renovations and expansions. During 1999,
the SPG Operating Partnership invested approximately $277 million on
redevelopment projects and completed four major redevelopment projects, which
added approximately 1.4 million square feet of GLA to the Portfolio. The SPG
Operating Partnership has a number of renovation and/or expansion projects
currently under construction, or in preconstruction development and expects to
invest approximately $270 million on redevelopment in 2000.

International Expansion. The SPG Operating Partnership and the Management
Company have a 25% ownership interest in European Retail Enterprises, B.V.
("ERE") and Groupe BEG, S.A. ("BEG"), respectively, which are accounted for
using the equity method of accounting. BEG and ERE are fully integrated
European retail real estate developers, lessors and managers. The SPG Operating
Partnership's total investment in ERE and BEG at December 31, 1999 was
approximately $41 million, with commitments for an additional $22 million,
subject to certain performance and other criteria, including the SPG Operating
Partnership's approval of development projects. The agreements with BEG and ERE
are structured to allow the SPG Operating Partnership to acquire an additional
25% ownership interest over time. As of December 31, 1999, BEG and ERE had
three Properties open in Poland and two in France.

Other

On September 30, 1999, the SPG Operating Partnership entered into a five
year contract with Enron Energy Services for Enron to supply or manage all of
the energy commodity requirements throughout the Portfolio. The contract
includes electricity, natural gas and maintenance of energy conversion assets
and electrical systems including lighting. This alliance is designed to reduce
operating costs for the SPG Operating Partnership's tenants, as well as deliver
incremental profit to the SPG Operating Partnership.

43
<PAGE>

Capital Expenditures on the SPG Operating Partnership's Consolidated
Properties

<TABLE>
<CAPTION>
1999 1998 1997
----- ---- ----
<S> <C> <C> <C>
New Developments.......................................... $ 226 $ 22 $ 80
Renovations and Expansions................................ 248 250 197
Tenant Allowances......................................... 64 46 38
Recoverable Capital Expenditures.......................... 27 18 13
Other..................................................... -- 12 4
----- ---- ----
Total................................................... $ 565 $348 $332
===== ==== ====
</TABLE>

Distributions

SPG Properties declared distributions on its common stock in 1999
aggregating $2.02 per share. On January 20, 2000, SPG Properties declared a
distribution of $0.5050 per share payable on February 18, 2000 to shareholders
of record on February 4, 2000.The current annual distribution rate is $2.02 per
share. Future distributions will be determined based on actual results of
operations and cash available for distribution. In addition, preferred
distributions of $2.19 per Series B preferred share and $3.95 per Series C
preferred share were declared during 1999.

Investing and Financing Activities

Cash used in investing activities by the SPG Operating Partnership during
1999 includes acquisitions of $339 million, capital expenditures of $489
million, loans to affiliates of $10 million, investments in unconsolidated
joint ventures of $83 million consisting primarily of development funding and
$47 million of investments in and advances to the Management Company. Capital
expenditures includes development costs of $86 million, renovation and
expansion costs of approximately $324 million and tenant costs, and other
operational capital expenditures of approximately $95 million. Acquisitions,
including transaction costs, includes $183 million for the NED Acquisition and
$156 million for the remaining interests in four existing Properties. These
uses of cash are partially offset by distributions from unconsolidated entities
of $222 million; net proceeds of $47 million from the sales of the SPG
Operating Partnership's interests in the land at a hotel and an office
building, and two community centers; a loan repayment from an affiliate of $21
million and cash of $83 million from the consolidations of the SPG Operating
Partnership's gift certificate program and four Properties. Distributions from
unconsolidated entities includes approximately $116 million resulting from
financing activities, with the remainder resulting primarily from those
entities' operating activities.

Cash provided by financing activities for the SPG Operating Partnership
during 1999 was $5 million and included net equity distributions of $552
million offset by net borrowings of $557 million.

Year 2000 Project

The SPG Operating Partnership undertook a project (the "Y2K Project") to
identify and correct problems arising from the inability of information
technology hardware and software systems to process dates after December 31,
1999. The SPG Operating Partnership's Y2K Project focused first upon the SPG
Operating Partnership's key information technology systems (the "IT Component")
and secondly upon the information systems of key tenants and key third party
service providers as well as imbedded systems within common areas of
substantially all of the Properties (the "Non-IT Component"). Among other
things, the Y2K Project assessed year 2000 readiness of all critical items and
developed and implemented replacement and contingency plans based upon the
information collected.

The SPG Operating Partnership experienced no disruptions in its key
information technology systems or in the operation of its Properties as a
result of any year 2000 occurrence, nor is the SPG Operating Partnership aware
that any of its key tenants or key suppliers experienced any year 2000 issues
which, in turn, have had any material adverse impact upon the SPG Operating
Partnership's results of operations.

44
<PAGE>

The SPG Operating Partnership is also aware that other dates may cause
similar problems for information technology hardware and software systems to
process dates thereafter. The SPG Operating Partnership believes that its Y2K
Project addressed those issues in the SPG Operating Partnership's IT Component
and Non-IT Component, but has put in place contingency plans substantially
similar to those designed for the Y2K Project to address information technology
issues that may arise on those future dates.

To date, the SPG Operating Partnership has expended $2.0 million on the Y2K
Project and anticipates expending an additional $180 thousand to complete the
implementation of any contingency and replacement plans in connection with its
Y2K Project. These cost estimates do not include costs expended by the SPG
Operating Partnership following the DRC Merger for software, hardware and
related costs necessary to upgrade its primary operating, financial accounting
and billing systems, which allowed those systems to, among other things, become
year 2000 ready.

Inflation

Inflation has remained relatively low during the past four years and has had
a minimal impact on the operating performance of the Properties. Nonetheless,
substantially all of the tenants' leases contain provisions designed to lessen
the impact of inflation. Such provisions include clauses enabling the SPG
Operating Partnership to receive percentage rentals based on tenants' gross
sales, which generally increase as prices rise, and/or escalation clauses,
which generally increase rental rates during the terms of the leases. In
addition, many of the leases are for terms of less than ten years, which may
enable the SPG Operating Partnership to replace existing leases with new leases
at higher base and/or percentage rentals if rents of the existing leases are
below the then-existing market rate. Substantially all of the leases, other
than those for anchors, require the tenants to pay a proportionate share of
operating expenses, including common area maintenance, real estate taxes and
insurance, thereby reducing the SPG Operating Partnership's exposure to
increases in costs and operating expenses resulting from inflation.

However, inflation may have a negative impact on some of the SPG Operating
Partnership's other operating items. Interest and general and administrative
expenses may be adversely affected by inflation as these specified costs could
increase at a rate higher than rents. Also, for tenant leases with stated rent
increases, inflation may have a negative effect as the stated rent increases in
these leases could be lower than the increase in inflation at any given time.

Seasonality

The shopping center industry is seasonal in nature, particularly in the
fourth quarter during the holiday season, when tenant occupancy and retail
sales are typically at their highest levels. In addition, shopping malls
achieve most of their temporary tenant rents during the holiday season. As a
result of the above, earnings are generally highest in the fourth quarter of
each year.

New Accounting Pronouncements

On June 15, 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133"). SFAS 133 establishes
accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be
recorded in the balance sheet as either an asset or liability measured at its
fair value. SFAS 133 requires that changes in the derivative's fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met. Special accounting for qualifying hedges allows a derivative's gains and
losses to offset related results on the hedged item in the income statement,
and requires that a company formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting.

45
<PAGE>

SFAS 133 will be effective for the SPG Operating Partnership beginning with
the 2001 fiscal year and may not be applied retroactively. Management is
currently evaluating the impact of SFAS 133, which it believes could increase
volatility in earnings and other comprehensive income.

On December 3, 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), which addressed certain revenue
recognition policies, including the accounting for overage rent by a landlord.
SAB 101 requires overage rent to be recognized as revenue only when each
tenant's sales exceeds their sales threshold. The SPG Operating Partnership
currently recognizes overage rent based on reported and estimated sales through
the end of the period, less the applicable prorated base sales amount. The SPG
Operating Partnership will adopt SAB 101 effective January 1, 2000. Management
is currently evaluating the impact of SAB 101 and expects to record a loss from
the cumulative effect of a change in accounting principle of approximately $13
million in the first quarter of 2000. In addition, SAB 101 will impact the
timing in which overage rent is recognized throughout the year, but will not
have a material impact on the total overage rent recognized in each full year.

Item 7A. Qualitative and Quantitative Disclosure About Market Risk

Reference is made to Item 7 of this Form 10-K under the caption "Liquidity
and Capital Resources".

Item 8. Financial Statements and Supplementary Data

Reference is made to the Index to Financial Statements contained in Item 14.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

46
<PAGE>

PART III

Item 10. Directors and Executive Officers of the Registrant

The information required by this item is incorporated herein by reference to
SPG Properties' definitive Proxy Statement for its annual meeting of
shareholders to be filed with the Commission pursuant to Regulation 14A and is
included under the caption "EXECUTIVE OFFICERS OF THE REGISTRANT" in Part I
thereof.

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management

Item 13. Certain Relationships and Related Transactions

47
<PAGE>

PART IV

Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K

(a)(1) Financial Statements

<TABLE>
<CAPTION>
Page No.
--------
<C> <S>
Report of Independent Public Accountants.......................................................... 49

SPG Properties, Inc.:

Consolidated Balance Sheets as of December 31, 1999 and 1998...................................... 50

Consolidated Statements of Operations for the years ended December 31, 1999, 1998 and 1997........ 51

Consolidated Statements of Shareholders' Equity for the years ended December 31, 1999,
1998 and 1997.................................................................................... 52

Consolidated Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997........ 53

Simon Property Group, L.P.:

Consolidated Balance Sheets as of December 31, 1999 and 1998...................................... 54

Consolidated Statements of Operations for the years ended December 31, 1999, 1998 and 1997........ 55

Consolidated Statements of Partners' Equity for the years ended December 31, 1999, 1998 and 1997.. 56

Consolidated Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997........ 57

Notes to Financial Statements..................................................................... 58

(2) Financial Statement Schedules

Report of Independent Public Accountants.......................................................... 86

Simon Property Group, L.P. Schedule III--Schedule of Real Estate and Accumulated Depreciation..... 87

Notes to Schedule III............................................................................. 94

(3) Exhibits

The Exhibit Index attached hereto is hereby incorporated by reference to this Item................ 95

(b) Reports on Form 8-K

None.
</TABLE>

48
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Simon Property Group, Inc.:

We have audited the accompanying consolidated balance sheets of SPG
Properties, Inc. (a Maryland corporation) and subsidiary as of December 31,
1999 and 1998, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1999. We have also audited the accompanying consolidated
balance sheets of Simon Property Group, L.P. (a Delaware limited partnership)
and subsidiaries as of December 31, 1999 and 1998, and the related statements
of operations, partners' equity and cash flows for each of the three years in
the period ended December 31, 1999. These financial statements are the
responsibility of management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of SPG
Properties, Inc. and subsidiary as of December 31, 1999 and 1998, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1999, and the consolidated
financial position of Simon Property Group, L.P. and subsidiaries as of
December 31, 1999 and 1998, and the consolidated results of their operations
and their cash flows for each of the three years in the period ended December
31, 1999, in conformity with accounting principles generally accepted in the
United States.

Arthur Andersen LLP

Indianapolis, Indiana
February 16, 2000.

49
<PAGE>

SPG PROPERTIES, INC. CONSOLIDATED

BALANCE SHEET
(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
ASSETS:

Investment in the SPG Operating Partnership........ $2,072,186 $2,108,291
========== ==========
COMMITMENTS AND CONTINGENCIES (See note 13 to the
financial statements of the SPG Operating
Partnership)

SHAREHOLDERS' EQUITY:
Series B and C cumulative redeemable preferred
stock, 12,200,000 shares authorized, 11,000,000
issued and outstanding............................ 339,597 339,329
Common stock, $.0001 par value, 400,000,000 shares
authorized, and 110,473,378 and 110,492,467 issued
and outstanding, respectively..................... 11 11
Class B common stock, $.0001 par value, 12,000,000
shares authorized, 3,200,000 issued and
outstanding....................................... 1 1
Class C common stock, $.0001 par value, 4,000
shares authorized, issued and outstanding......... -- --
Capital in excess of par value..................... 2,175,671 2,176,267
Accumulated deficit................................ (427,394) (387,656)
Unrealized gain (loss) on long-term investment..... (3,885) 89
Unamortized restricted stock award................. (11,815) (19,750)
---------- ----------
Total shareholders' equity....................... $2,072,186 $2,108,291
========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

50
<PAGE>

SPG PROPERTIES, INC. CONSOLIDATED

STATEMENTS OF OPERATIONS
(Dollars in thousands)

<TABLE>
<CAPTION>
For the Year Ended December 31,
--------------------------------------
1999 (Note 2) 1998 (Note 2) 1997
------------- ------------- ----------
<S> <C> <C> <C>
REVENUE:
Minimum rent........................ $ -- $565,294 $ 641,352
Overage rent........................ -- 22,766 38,810
Tenant reimbursements............... -- 283,805 322,416
Other income........................ -- 60,754 51,589
-------- -------- ----------
Total revenue..................... -- 932,619 1,054,167
-------- -------- ----------
EXPENSES:
Property operating.................. -- 155,822 176,846
Depreciation and amortization....... -- 177,710 200,900
Real estate taxes................... -- 90,341 98,830
Repairs and maintenance............. -- 35,953 43,000
Advertising and promotion........... -- 27,992 32,891
Provision for credit losses......... -- 1,599 5,992
Other............................... -- 16,983 18,678
-------- -------- ----------
Total operating expenses.......... -- 506,400 577,137
-------- -------- ----------
OPERATING INCOME...................... -- 426,219 477,030
INTEREST EXPENSE...................... -- 281,748 287,823
-------- -------- ----------
INCOME BEFORE MINORITY INTEREST....... -- 144,471 189,207
MINORITY INTEREST..................... -- (4,704) (5,270)
GAIN (LOSS) ON SALES OF ASSETS, NET... -- (7,283) 20
-------- -------- ----------
INCOME BEFORE UNCONSOLIDATED
ENTITIES............................. -- 132,484 183,957
EQUITY IN INCOME OF THE SPG OPERATING
PARTNERSHIP.......................... 137,764 44,313 --
INCOME FROM UNCONSOLIDATED ENTITIES... -- 8,789 19,176
-------- -------- ----------
INCOME BEFORE EXTRAORDINARY ITEMS..... 137,764 185,586 203,133
EXTRAORDINARY ITEMS................... -- 7,002 58
-------- -------- ----------
INCOME BEFORE ALLOCATION TO LIMITED
PARTNERS............................. 137,764 192,588 203,191
LESS--LIMITED PARTNERS' INTEREST IN
THE SPG OPERATING PARTNERSHIP........ -- 45,374 65,954
LESS--MANAGING GENERAL PARTNER'S
DIRECT INTEREST IN THE SPG OPERATING
PARTNERSHIP.......................... -- 1,369 --
-------- -------- ----------
NET INCOME............................ 137,764 145,845 137,237
PREFERRED DIVIDENDS................... (29,336) (29,336) (29,248)
-------- -------- ----------
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS......................... $108,428 $116,509 $ 107,989
======== ======== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

51
<PAGE>

SPG PROPERTIES, INC. CONSOLIDATED

STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in thousands)

<TABLE>
<CAPTION>
All Classes Unrealized Gain Unamortized Total
Preferred of Capital in Excess Accumulated (Loss) on Long-Term Restricted Shareholders'
Stock Common Stock of Par Value Deficit Investment Stock Award Equity
--------- ------------ ----------------- ----------- ------------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December
31, 1996............. $292,912 $10 $1,189,919 $(172,596) $ -- $ (5,354) $1,304,891
Common stock issued to
the public (5,858,887
shares).............. 1 190,026 190,027
Common stock issued in
connection with
acquisitions
(2,193,037 shares)... 70,000 70,000
Stock options
exercised (369,902
shares).............. 8,625 8,625
Other common stock
issued (82,484
shares).............. 2,268 2,268
Stock incentive
program (448,753
shares).............. 14,016 (13,262) 754
Amortization of stock
incentive............ 5,386 5,386
Series C Preferred
stock issued
(3,000,000 shares)... 146,072 146,072
Conversion of Series A
Preferred stock into
3,809,523 shares of
common stock......... (99,923) 99,923 --
Transfer out of
limited partners'
interest in the
Operating
Partnership.......... (82,869) (82,869)
Unrealized gain on
long-term
investment........... 2,420 2,420
Net income............ 137,237 137,237
Distributions......... (227,949) (227,949)
-------- --- ---------- --------- ------- -------- ----------
Balance at December
31, 1997............. 339,061 11 1,491,908 (263,308) 2,420 (13,230) 1,556,862
Common stock issued to
the public (2,957,335
shares).............. 1 91,398 91,399
Common stock issued in
connection with
acquisitions (519,889
shares).............. 17,176 17,176
Stock incentive
program (495,131
shares).............. 15,983 (15,983) --
Other (Accretion of
preferred stock and
81,111 shares
issued).............. 268 2,160 2,428
Amortization of stock
incentive............ 9,463 9,463
Adjustment to limited
partners' interest in
the SPG Operating
Partnership.......... 557,642 557,642
Distributions......... (270,193) (270,193)
-------- --- ---------- --------- ------- -------- ----------
Subtotal.............. 339,329 12 2,176,267 (533,501) 2,420 (19,750) 1,964,777
-------- --- ---------- --------- ------- -------- ----------
Other Comprehensive
Income:
Unrealized loss on
long-term
investment.......... (2,331) (2,331)
Net income........... 145,845 145,845
-------- --- ---------- --------- ------- -------- ----------
Total Comprehensive
Income:............. -- -- -- 145,845 (2,331) -- 143,514
-------- --- ---------- --------- ------- -------- ----------
Balance at December
31, 1998............. 339,329 12 2,176,267 (387,656) 89 (19,750) 2,108,291
Restricted stock
forfeitures (19,089
shares).............. (596) 333 (263)
Amortization of stock
incentive............ 7,602 7,602
Preferred stock
accretion............ 268 268
Adjustment to limited
partners' interest in
the SPG Operating
Partnership.......... 81,473 81,473
Distributions......... (258,975) (258,975)
-------- --- ---------- --------- ------- -------- ----------
Subtotal.............. 339,597 12 2,175,671 (565,158) 89 (11,815) 1,938,396
-------- --- ---------- --------- ------- -------- ----------
Comprehensive Income:
Unrealized loss on
long-term
investment.......... (3,974) (3,974)
Net income........... 137,764 137,764
-------- --- ---------- --------- ------- -------- ----------
Total Comprehensive
Income:............. -- -- -- 137,764 (3,974) -- 133,790
-------- --- ---------- --------- ------- -------- ----------
Balance at December
31, 1999............. $339,597 $12 $2,175,671 $(427,394) $(3,885) $(11,815) $2,072,186
======== === ========== ========= ======= ======== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

52
<PAGE>

SPG PROPERTIES, INC. CONSOLIDATED

STATEMENTS OF CASH FLOWS
(Dollars in thousands)

<TABLE>
<CAPTION>
For the Year Ended December
31,
--------------------------------
1999 1998 1997
-------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................. $137,764 $ 145,845 $ 137,237
Adjustments to reconcile net income to net
cash provided by operating activities--
Depreciation and amortization............. -- 185,798 208,539
Extraordinary items....................... -- (7,002) (58)
Loss (gain) on sales of assets, net....... -- 7,283 (20)
Limited partners' interest in the SPG
Operating Partnership.................... -- 45,374 65,954
Managing General Partner's Interest in the
SPG Operating Partnership................ -- 1,369 --
Straight-line rent........................ -- (5,892) (9,769)
Minority interest......................... -- 4,704 5,270
Equity in income of the SPG Operating
Partnership.............................. (137,764) (44,313) --
Equity in income of unconsolidated
entities................................. -- (8,789) (19,176)
Changes in assets and liabilities--
Tenant receivables and accrued revenue.... -- (5,280) (23,284)
Deferred costs and other assets........... -- (10,516) (30,203)
Accounts payable, accrued expenses and
other liabilities........................ -- 41,648 36,417
-------- ---------- ----------
Net cash provided by operating
activities............................. -- 350,229 370,907
-------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions................................ -- (1,881,183) (980,427)
Capital expenditures........................ -- (233,200) (305,178)
Cash from mergers, acquisitions and
consolidation of joint ventures, net....... -- 17,213 19,744
Cash held by deconsolidated investee........ -- (78,971) --
Change in restricted cash................... -- 6,868 (2,443)
Net proceeds from sale of assets............ -- 46,087 599
Investments in unconsolidated entities...... -- (28,726) (47,204)
Distributions from the SPG Operating
Partnership................................ 258,975 64,014 --
Distributions from unconsolidated
entities................................... -- 164,914 144,862
Investments in and advances to the
Management Company and affiliate........... -- (19,915) (18,357)
Other investing activities.................. -- -- (55,400)
-------- ---------- ----------
Net cash provided by (used in) investing
activities............................. 258,975 (1,942,899) (1,243,804)
-------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of common and preferred
stock, net................................. -- 92,629 344,438
Minority interest distributions, net........ -- (10,991) (219)
Preferred dividends and distributions to
shareholders............................... (258,975) (270,193) (227,949)
Distributions to the limited partners of
the SPG Operating Partnership.............. -- (104,139) (122,442)
Mortgage and other note proceeds, net of
transaction costs.......................... -- 3,305,199 2,976,222
Mortgage and other note principal
payments................................... -- (1,529,534) (2,030,763)
Other refinancing transaction............... -- -- (21,000)
-------- ---------- ----------
Net cash provided by (used in) financing
activities............................. (258,975) 1,482,971 918,287
-------- ---------- ----------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS................................. -- (109,699) 45,390
CASH AND CASH EQUIVALENTS, beginning of
period...................................... -- 109,699 64,309
-------- ---------- ----------
CASH AND CASH EQUIVALENTS, end of period..... $ -- $ -- $ 109,699
======== ========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

53
<PAGE>

SIMON PROPERTY GROUP, L.P. CONSOLIDATED

BALANCE SHEETS
(Dollars in thousands)

<TABLE>
<CAPTION>
December December
31, 1999 31, 1998
----------- -----------
<S> <C> <C>
ASSETS:

Investment properties, at cost..................... $12,640,146 $11,662,860
Less--accumulated depreciation..................... 1,093,103 709,114
----------- -----------
11,547,043 10,953,746
Cash and cash equivalents.......................... 153,743 124,466
Tenant receivables and accrued revenue, net........ 287,950 217,341
Notes and advances receivable from Management
Company and affiliate............................. 162,082 115,378
Mortgage note receivable from the SRC Operating
Partnership (Interest at 6%, due 2013)............ -- 20,565
Note receivable from the SRC Operating Partnership
(Interest at 8%, due 2009)........................ 9,848 --
Investment in partnerships and joint ventures, at
equity............................................ 1,512,671 1,303,251
Investment in Management Company and affiliate..... 6,833 10,037
Other investment................................... 41,902 50,176
Goodwill, net...................................... 39,556 58,134
Deferred costs and other assets.................... 249,168 227,684
Minority interest.................................. 35,931 32,138
----------- -----------
Total assets..................................... $14,046,727 $13,112,916
=========== ===========

LIABILITIES:

Mortgages and other indebtedness................... $ 8,768,841 $ 7,972,381
Notes payable to the SRC Operating Partnership
(Interest at 8%, due 2008)........................ -- 17,907
Accounts payable and accrued expenses.............. 477,780 410,445
Cash distributions and losses in partnerships and
joint ventures, at equity......................... 32,995 29,139
Other liabilities.................................. 213,874 95,243
----------- -----------
Total liabilities................................ 9,493,490 8,525,115
----------- -----------

COMMITMENTS AND CONTINGENCIES (Note 13)

PARTNERS' EQUITY:
Preferred units, 22,066,056 and 16,053,580 units
outstanding, respectively......................... 1,032,320 1,057,245
General Partners, 171,494,311 and 161,487,017 units
outstanding, respectively......................... 2,631,618 2,540,660
Limited Partners, 65,444,680 and 64,182,157 units
outstanding, respectively......................... 1,004,263 1,009,646
Note receivable from SPG (Interest at 7.8%, due
2009)............................................. (92,825) --
Unamortized restricted stock award................. (22,139) (19,750)
----------- -----------
Total partners' equity........................... 4,553,237 4,587,801
----------- -----------
Total liabilities and partners' equity........... $14,046,727 $13,112,916
=========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

54
<PAGE>

SIMON PROPERTY GROUP, L.P. CONSOLIDATED

STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)

<TABLE>
<CAPTION>
For the Year Ended December 31,
----------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
REVENUE:
Minimum rent............................. $1,134,297 $ 847,198 $ 641,352
Overage rent............................. 60,720 49,441 38,810
Tenant reimbursements.................... 578,752 427,921 322,416
Other income............................. 106,466 75,629 51,589
---------- ---------- ----------
Total revenue.......................... 1,880,235 1,400,189 1,054,167
---------- ---------- ----------
EXPENSES:
Property operating....................... 292,249 225,899 176,846
Depreciation and amortization............ 378,192 266,978 200,900
Real estate taxes........................ 185,340 133,038 98,830
Repairs and maintenance.................. 70,364 53,189 43,000
Advertising and promotion................ 65,216 50,521 32,891
Provision for credit losses.............. 8,367 6,599 5,992
Other.................................... 27,796 23,956 18,678
---------- ---------- ----------
Total operating expenses............... 1,027,524 760,180 577,137
---------- ---------- ----------
OPERATING INCOME.......................... 852,711 640,009 477,030
INTEREST EXPENSE.......................... 579,848 420,280 287,823
---------- ---------- ----------
INCOME BEFORE MINORITY INTEREST........... 272,863 219,729 189,207
MINORITY INTEREST......................... (10,719) (7,335) (5,270)
GAIN (LOSS) ON SALES OF ASSETS, NET....... (1,942) (7,283) 20
---------- ---------- ----------
INCOME BEFORE UNCONSOLIDATED ENTITIES..... 260,202 205,111 183,957
INCOME FROM UNCONSOLIDATED ENTITIES....... 49,641 28,145 19,176
---------- ---------- ----------
INCOME BEFORE UNUSUAL AND EXTRAORDINARY
ITEMS.................................... 309,843 233,256 203,133
UNUSUAL, ITEM (Note 13)................... (12,000) -- --
EXTRAORDINARY ITEMS--DEBT RELATED
TRANSACTIONS............................. (6,705) 7,146 58
---------- ---------- ----------
NET INCOME................................ 291,138 240,402 203,191
PREFERRED UNIT REQUIREMENT................ (69,323) (41,471) (29,248)
---------- ---------- ----------
NET INCOME AVAILABLE TO UNITHOLDERS....... $ 221,815 $ 198,931 $ 173,943
========== ========== ==========
NET INCOME AVAILABLE TO UNITHOLDERS
ATTRIBUTABLE TO:
General Partners
SPG.................................... $ 22,524 $ 14,243 $ --
SPG Properties and SD Property Group... 137,764 116,509 107,989
Limited Partners......................... 61,527 68,179 65,954
---------- ---------- ----------
Net income............................... $ 221,815 $ 198,931 $ 173,943
========== ========== ==========
BASIC EARNINGS PER UNIT:
Income before extraordinary items........ $ 0.98 $ 1.01 $ 1.08
Extraordinary items...................... (0.03) 0.04 --
---------- ---------- ----------
Net income............................... $ 0.95 $ 1.05 $ 1.08
========== ========== ==========
DILUTED EARNINGS PER UNIT:
Income before extraordinary items........ $ 0.98 $ 1.01 $ 1.08
Extraordinary items...................... (0.03) 0.04 --
---------- ---------- ----------
Net income............................... $ 0.95 $ 1.05 $ 1.08
========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

55
<PAGE>

SIMON PROPERTY GROUP, L.P. CONSOLIDATED

STATEMENTS OF PARTNERS' EQUITY
(Dollars in thousands)

<TABLE>
<CAPTION>
General Partners
----------------------
SPG
SPG Properties
(Managing and SD Unamortized Note Total
Preferred General Property Limited Restricted Receivable Partners'
Units Partner) Group Partners Stock Award from SPG Equity
---------- ---------- ---------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1996................... 292,912 -- 1,017,333 640,283 (5,354) -- 1,945,174
General Partner
Contributions
(6,311,273 units)...... 200,920 200,920
Units issued in
connection with
acquisitions (2,193,037
and 876,712,
respectively).......... 70,000 26,408 96,408
Stock incentive program
(448,753 units)........ 14,016 (13,262) 754
Amortization of stock
incentive.............. 5,386 5,386
Preferred units issued,
net of issuance costs
(3,000,000 units)...... 146,072 146,072
Conversion of 4,000,000
Series A preferred
units into 3,809,523
common units........... (99,923) 99,923 --
Adjustment to allocate
net equity of the SPG
Operating Partnership.. (82,869) 82,869 --
Distributions........... (29,248) (198,701) (122,442) (350,391)
---------- ---------- ---------- ---------- -------- -------- -----------
Subtotal................ 309,813 -- 1,120,622 627,118 (13,230) -- 2,044,323
Comprehensive Income:
Unrealized gain on
long-term
investments........... 2,420 1,365 3,785
Net income............. 29,248 107,989 65,954 203,191
---------- ---------- ---------- ---------- -------- -------- -----------
Total Comprehensive
Income................ 29,248 -- 110,409 67,319 -- -- 206,976
---------- ---------- ---------- ---------- -------- -------- -----------
Balance at December 31,
1997................... 339,061 -- 1,231,031 694,437 (13,230) -- 2,251,299
General Partner
Contributions
(2,957,335 units)...... 91,399 91,399
CPI Merger (Note 4):
Preferred Units
(5,053,580)........... 717,916 717,916
Units (47,790,550)..... 1,605,638 1,605,638
Units issued in
connection with
acquisitions (519,889
and 2,344,199 units,
respectively).......... 17,176 76,263 93,439
Stock incentive program
(495,131 units, net of
forfeitures)........... 15,983 (15,983) --
Amortization of stock
incentive.............. 9,463 9,463
Other (Accretion of
Preferred Units, 81,111
general partner Units
issued and 12,804
limited partner Units
redeemed).............. 268 340 2,160 (289) 2,479
Adjustment to allocate
net equity of the SPG
Operating Partnership.. (866,564) 557,642 308,922 --
Distributions........... (41,471) (1,746) (240,857) (136,551) (420,625)
---------- ---------- ---------- ---------- -------- -------- -----------
Subtotal................ 1,015,774 737,668 1,674,534 942,782 (19,750) -- 4,351,008
Comprehensive Income:
Net income............. 41,471 14,243 116,509 68,179 240,402
Unrealized loss on
long-term
investments........... 37 (2,331) (1,315) (3,609)
---------- ---------- ---------- ---------- -------- -------- -----------
Total Comprehensive
Income................ 41,471 14,280 114,178 66,864 -- -- 236,793
---------- ---------- ---------- ---------- -------- -------- -----------
Balance at December 31,
1998................... 1,057,245 751,948 1,788,712 1,009,646 (19,750) -- 4,587,801
General Partner
Contributions (82,988
units)................. 2,131 2,131
Preferred Unit
Conversion (5,926,440
units)................. (199,320) 198,787 (533)
Units issued to pay
dividend (153,890
units)................. 4,016 4,016
NED Acquisition (Note
3):
Preferred Units
(5,168,454)........... 149,885 149,885
Units (1,269,446)...... 36,180 36,180
Mall of America
acquisition (1,000,000
preferred units)....... 24,242 24,242
Units issued to SPG for
Note (3,617,070
Units)................. 92,825 (92,825) --
Stock incentive program
(537,861 units, net of
forfeitures)........... 14,183 (596) (12,990) 597
Amortization of stock
incentive.............. 10,601 10,601
Units purchased by
subsidiary (310,955)... (7,953) (7,953)
Other (Accretion of
Preferred Units, and
6,923 limited partner
Units redeemed)........ 268 (607) (339)
Adjustment to allocate
net equity of the SPG
Operating Partnership.. (111,227) 81,473 29,754 --
Distributions........... (69,323) (78,016) (258,975) (129,941) (536,255)
---------- ---------- ---------- ---------- -------- -------- -----------
Subtotal................ 962,997 866,694 1,610,614 945,032 (22,139) (92,825) 4,270,373
Comprehensive Income:
Net income............. 69,323 22,524 137,764 61,527 291,138
Unrealized gain on
long-term
investments........... (2,004) (3,974) (4,300) (10,278)
---------- ---------- ---------- ---------- -------- -------- -----------
Total Comprehensive
Income................ 69,323 20,520 133,790 57,227 -- -- 280,860
---------- ---------- ---------- ---------- -------- -------- -----------
Balance at December 31,
1999................... $1,032,320 $ 887,214 $1,744,404 $1,002,259 $(22,139) $(92,825) $ 4,551,233
========== ========== ========== ========== ======== ======== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

56
<PAGE>

SIMON PROPERTY GROUP, L.P. CONSOLIDATED

STATEMENTS OF CASH FLOWS
(Dollars in thousands)

<TABLE>
<CAPTION>
For the Year Ended December 31,
----------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................... $ 291,138 $ 240,402 $ 203,191
Adjustments to reconcile net income to
net cash provided by operating
activities--
Depreciation and amortization.......... 390,020 277,346 208,539
Extraordinary items.................... 6,705 (7,146) (58)
Loss (gain) on sales of assets, net.... 1,942 7,283 (20)
Straight-line rent..................... (17,666) (9,261) (9,769)
Minority interest...................... 10,719 7,335 5,270
Equity in income of unconsolidated
entities.............................. (49,641) (28,145) (19,176)
Changes in assets and liabilities--
Tenant receivables and accrued
revenue............................... (37,225) (13,316) (23,284)
Deferred costs and other assets........ (23,242) (7,289) (30,203)
Accounts payable, accrued expenses and
other liabilities..................... 47,100 76,454 36,417
---------- ---------- ----------
Net cash provided by operating
activities............................ 619,850 543,663 370,907
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions............................. (339,065) (1,942,724) (980,427)
Capital expenditures..................... (488,712) (345,026) (305,178)
Cash from mergers, acquisitions and
consolidation of joint ventures, net.... 83,169 16,563 19,744
Change in restricted cash................ -- 7,686 (2,443)
Proceeds from sale of assets............. 46,750 46,087 599
Investments in unconsolidated entities... (83,124) (55,523) (47,204)
Distributions from unconsolidated
entities................................ 221,509 195,497 144,862
Investments in and advances to the
Management Company and affiliate........ (46,704) (21,569) (18,357)
Mortgage loan payoff from the SRC
Operating Partnership................... 20,565 -- --
Loan to the SRC Operating Partnership.... (9,848) -- --
Other investing activities............... -- -- (55,400)
---------- ---------- ----------
Net cash used in investing activities.. (595,460) (2,099,009) (1,243,804)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Partnership contributions................ 1,463 92,570 344,438
Partnership distributions................ (538,807) (417,164) (350,391)
Minority interest distributions, net..... (14,923) (19,694) (219)
Loan payoff to the SRC Operating
Partnership............................. (17,907) -- --
Mortgage and other note proceeds, net of
transaction costs....................... 2,168,069 3,782,314 2,976,222
Mortgage and other note principal
payments................................ (1,593,008) (1,867,913) (2,030,763)
Other refinancing transaction............ -- -- (21,000)
---------- ---------- ----------
Net cash provided by financing
activities............................ 4,887 1,570,113 918,287
---------- ---------- ----------
INCREASE IN CASH AND CASH EQUIVALENTS...... 29,277 14,767 45,390
CASH AND CASH EQUIVALENTS, beginning of
period.................................... 124,466 109,699 64,309
---------- ---------- ----------
CASH AND CASH EQUIVALENTS, end of period... $ 153,743 $ 124,466 $ 109,699
========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

57
<PAGE>

SPG PROPERTIES INC.

NOTES TO FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)

1. Organization

SPG Properties, Inc. ("SPG Properties"), formerly Simon DeBartolo Group,
Inc. ("SDG"), is a substantially wholly-owned subsidiary of Simon Property
Group, Inc. ("SPG"). SPG Properties and SPG are both self-administered and
self-managed real estate investment trusts ("REITs") under the Internal Revenue
Code of 1986, as amended. SPG Properties and its substantially wholly-owned
subsidiary SD Property Group, Inc., are general partners of, and hold a
noncontrolling partnership interest in, Simon Property Group, L.P. (the "SPG
Operating Partnership"), formerly Simon DeBartolo Group, L.P. ("SDG, LP"), as
of December 31, 1999. On January 27, 2000, SD Property Group, Inc. merged with
and into SPG Properties, Inc. The SPG Operating Partnership is engaged in the
ownership, operation, management, leasing, acquisition, expansion and
development of real estate properties, primarily regional malls and community
shopping centers. SPG is the managing general partner of the SPG Operating
Partnership. Each share of common stock of SPG is paired with a beneficial
interest in 1/100th of a share of common stock of SPG Realty Consultants, Inc.
("SRC" and together with SPG, the "Companies"). At December 31, 1999 and 1998,
SPG Properties' direct and indirect ownership interest in the SPG Operating
Partnership was 48.0% and 50.4%, respectively.

As of December 31, 1999, the SPG Operating Partnership owned or held an
interest in 258 income-producing properties, which consisted of 167 regional
malls, 78 community shopping centers, four specialty retail centers, five
office and mixed-use properties and four value-oriented super-regional malls in
36 states (the "Properties") and five additional retail real estate properties
operating in Europe. The SPG Operating Partnership also owned an interest in
two properties currently under construction and 11 parcels of land held for
future development, which together with the Properties are hereafter referred
to as the "Portfolio Properties". The SPG Operating Partnership also holds
substantially all of the economic interest in M.S. Management Associates, Inc.
(the "Management Company"). See Note 8 to the financial statements of the SPG
Operating Partnership for a description of the activities of the Management
Company.

2. Basis of Presentation

The accompanying consolidated financial statements of SPG Properties include
accounts of all entities owned or controlled by SPG Properties. All significant
intercompany amounts have been eliminated. In connection with the CPI Merger
(see Note 4 to the financial statements of the SPG Operating Partnership), SPG
became the managing general partner of the SPG Operating Partnership. Since SPG
Properties no longer controls the SPG Operating Partnership, the accompanying
balance sheets as of December 31, 1999 and 1998 reflect SPG Properties'
interest in the SPG Operating Partnership utilizing the equity method of
accounting. Prior to the CPI Merger, SPG Properties and subsidiary accounted
for their interests in the SPG Operating Partnership using the consolidated
method of accounting. Because of the proximity of the change in control (as of
the close of business on September 24, 1998) to the period ended September 30,
1998, for purposes of the statements of operations and cash flows, the equity
method commenced effective October 1, 1998. The managing general partners'
interest during the period from September 25, 1998 through September 30, 1998
has been reflected as a reduction to SPG Properties' operating results in the
accompanying consolidated statements of operations. The accompanying
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles, which requires management to make
estimates and assumptions that affect the reported amounts of SPG Properties'
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and revenues and expenses during the
reported periods. Actual results could differ from these estimates.

Net operating results of the SPG Operating Partnership are allocated to its
partners based first on their preferred unit preference and then on their
remaining weighted average ownership interest in the SPG

58
<PAGE>

SPG PROPERTIES INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Operating Partnership during the period. SPG Properties' remaining weighted
average ownership interest in the SPG Operating Partnership for the years ended
December 31, 1999, 1998 and 1997 was 48.9%, 59.4% and 62.1%, respectively.

3. Equity Investment in the SPG Operating Partnership

The following table summarizes financial information of the SPG Operating
Partnership for the year ended December 31, 1998, and distinguishes between the
periods in which SPG Properties' interest in the SPG Operating Partnership was
accounted for using the consolidated method of accounting and the equity method
of accounting:

<TABLE>
<CAPTION>
Consolidated
Method Equity Method
(January 1 to (October 1 to
September 30, December 31,
1998) 1998) Total
------------- ------------- ----------
<S> <C> <C> <C>
Total Revenue....................... $932,619 $467,570 $1,400,189
Operating Expenses.................. 506,400 253,780 760,180
Net Income of the SPG Operating
Partnership........................ $148,275 $ 92,127 $ 240,402
Managing General and Limited
Partners' Share of the SPG
Operating Partnership's Net
Income............................. 46,743 47,814 94,557
-------- -------- ----------
SPG Properties' Share of the SPG
Operating Partnership's Net
Income............................. $101,532 $ 44,313 $ 145,845
======== ======== ==========
SPG Properties' Weighted Average
Ownership Interest................. 63.2% 50.4% 59.4%
======== ======== ==========
</TABLE>

4. Capital Stock

Under its Charter, as supplemented, SPG Properties is authorized to issue
650,000,000 shares, par value $0.0001 per share, of capital stock. The
authorized shares of capital stock consist of 9,200,000 shares of Series B
preferred stock, 3,000,000 shares of Series C preferred stock, 375,796,000
shares of common stock, 12,000,000 shares of Class B common stock, 4,000 shares
of Class C common stock, and 250,000,000 shares of excess stock.

In connection with the CPI Merger, all of the holders of SPG Properties'
common stock exchanged their shares in SPG Properties to SPG for a like number
of shares in SPG. The result is that SPG owns substantially all of the common
stock of SPG Properties.

Preferred Stock

SPG Properties has outstanding 8,000,000 shares of 8.75% Series B Cumulative
Redeemable Preferred Stock, which it may redeem any time on or after September
29, 2006, at a liquidation value of $25.00 per share, plus accrued and unpaid
dividends. The liquidation value (other than the portion thereof consisting of
accrued and unpaid dividends) is payable solely out of the sale proceeds of
other capital shares of SPG Properties, which may include other series of
preferred shares. The SPG Operating Partnership pays a preferred distribution
to SPG Properties equal to the dividends paid on the preferred stock. The
balance of the Series B Preferred Shares was $192,989 as of December 31, 1999
and 1998.

SPG Properties also has outstanding 3,000,000 shares of its 7.89% Series C
Cumulative Step-Up Premium Rate SM Preferred Stock (the "Series C Preferred
Shares") with a liquidation value of $50.00 per share. Beginning October 1,
2012, the rate increases to 9.89% per annum. Management intends to redeem the
Series C Preferred Shares prior to October 1, 2012. Beginning September 30,
2007, SPG Properties may redeem the

59
<PAGE>

SPG PROPERTIES INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Series C Preferred Shares in whole or in part, using only the sale proceeds of
other capital stock of SPG Properties, at a liquidation value of $50.00 per
share, plus accrued and unpaid distributions, if any, thereon. Additionally,
the Series C Preferred Shares have no stated maturity and are not subject to
any mandatory redemption provisions, nor are they convertible into any other
securities of SPG Properties. The SPG Operating Partnership pays a preferred
distribution to SPG Properties equal to the dividends paid on the preferred
stock. The balance of the Series C Preferred Shares was $146,608 and $146,340
as of December 31, 1999 and 1998, respectively.

5. Quarterly Financial Data (Unaudited)

Summarized quarterly 1999 and 1998 data is as follows:

<TABLE>
<CAPTION>
First Second Third Fourth Annual
Quarter Quarter Quarter Quarter Amount
-------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1999
Total revenue..................... $ -- $ -- $ -- $ -- $ --
Operating income.................. -- -- -- -- --
Equity in income of the SPG
Operating Partnership............ 30,862 32,594 34,256 40,052 137,764
Income before extraordinary
items............................ 30,862 32,594 34,256 40,052 137,764
Net income available to common
shareholders..................... $ 23,528 $ 25,260 $ 26,923 $32,717 $108,428
======== ======== ======== ======= ========
<CAPTION>
First Second Third Fourth Annual
Quarter Quarter Quarter Quarter Amount
-------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1998
Total revenue..................... $300,257 $310,375 $321,987 $ -- $932,619
Operating income.................. 133,667 145,226 147,326 -- 426,219
Equity in income of the SPG
Operating Partnership............ -- -- -- 44,313 44,313
Income before extraordinary
items............................ 45,124 43,514 52,635 44,313 185,586
Net income available to common
shareholders..................... $ 23,948 $ 27,467 $ 28,115 $36,979 $116,509
======== ======== ======== ======= ========
</TABLE>

Because substantially all of the common stock of SPG Properties is owned by
SPG, SPG Properties does not report earnings per share.

The footnotes summarizing the significant accounting policies of and other
matters pertinent to the SPG Operating Partnership follow and should be read in
conjunction with the financial statements and footnotes of SPG Properties and
subsidiary.

60
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS

(Dollars in thousands, except per unit amounts and where indicated as in
billions)

1. Organization

Simon Property Group, L.P. (the "SPG Operating Partnership"), a Delaware
limited partnership, is a majority owned subsidiary of Simon Property Group,
Inc. ("SPG"), a Delaware corporation. SPG is a self-administered and self-
managed real estate investment trust ("REIT") under the Internal Revenue Code
of 1986, as amended (the "Code"). Each share of common stock of SPG is paired
("Paired Shares") with a beneficial interest in 1/100th of a share of common
stock of SPG Realty Consultants, Inc., also a Delaware corporation ("SRC" and
together with SPG, the "Companies"). Units of ownership interest ("Units") in
the SPG Operating Partnership are paired ("Paired Units") with a Unit in SPG
Realty Consultants, L.P. (the "SRC Operating Partnership" and together with the
SPG Operating Partnership, the "Operating Partnerships"). The SRC Operating
Partnership is the primary subsidiary of SRC.

The SPG Operating Partnership, is engaged primarily in the ownership,
operation, management, leasing, acquisition, expansion and development of real
estate properties, primarily regional malls and community shopping centers. As
of December 31, 1999, the SPG Operating Partnership owned or held an interest
in 258 income-producing properties, which consisted of 167 regional malls, 78
community shopping centers, four specialty retail centers, five office and
mixed-use properties and four value-oriented super-regional malls in 36 states
(the "Properties") and five additional retail real estate properties operating
in Europe. The SPG Operating Partnership also owned an interest in two
properties currently under construction and 11 parcels of land held for future
development, which together with the Properties are hereafter referred to as
the "Portfolio Properties". The SPG Operating Partnership also holds
substantially all of the economic interest in M.S. Management Associates, Inc.
(the "Management Company"). See Note 8 for a description of the activities of
the Management Company.

The SPG Operating Partnership is subject to risks incidental to the
ownership and operation of commercial real estate. These include, among others,
the risks normally associated with changes in the general economic climate,
trends in the retail industry, creditworthiness of tenants, competition for
tenants and customers, changes in tax laws, interest rate levels, the
availability of financing, and potential liability under environmental and
other laws. Like most retail properties, the SPG Operating Partnership's
regional malls and community shopping centers rely heavily upon anchor tenants.
As of December 31, 1999, 335 of the approximately 977 anchor stores in the
Properties were occupied by three retailers. An affiliate of one of these
retailers is a limited partner in the SPG Operating Partnership.

2. Basis of Presentation

The accompanying consolidated financial statements include accounts of all
entities owned or controlled by the SPG Operating Partnership. All significant
intercompany amounts have been eliminated. The consolidated financial
statements reflect the CPI Merger (see Note 4) as of the close of business on
September 24, 1998.

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles, which requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and revenues and expenses during the reported period.
Actual results could differ from these estimates.

61
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Properties which are wholly-owned or owned less than 100% and are controlled
by the SPG Operating Partnership are accounted for using the consolidated
method of accounting. Control is demonstrated by the ability of the general
partner to manage day-to-day operations, refinance debt and sell the assets of
the partnership without the consent of the limited partner and the inability of
the limited partner to replace the general partner. The deficit minority
interest balance in the accompanying balance sheets represents outside
partners' interests in the net equity of certain Properties. Deficit minority
interests were recorded when a partnership agreement provided for the
settlement of deficit capital accounts before distributing the proceeds from
the sale of partnership assets and/or from the intent (legal or otherwise) and
ability of the partner to fund additional capital contributions. Investments in
partnerships and joint ventures which represent noncontrolling ownership
interests ("Joint Venture Properties") and the investment in the Management
Company (see Note 8) are accounted for using the equity method of accounting.
These investments are recorded initially at cost and subsequently adjusted for
net equity in income (loss), which is allocated in accordance with the
provisions of the applicable partnership or joint venture agreement, and cash
contributions and distributions. The allocation provisions in the partnership
or joint venture agreements are not always consistent with the ownership
interests held by each general or limited partner or joint venturer, primarily
due to partner preferences.

Net operating results of the SPG Operating Partnership are allocated after
preferred distributions (see Note 11), based on its partners' weighted average
ownership interests during the period. SPG's weighted average direct and
indirect ownership interest in the SPG Operating Partnership during 1999, 1998
and 1997 were 72.3%, 66.2% and 62.1%, respectively. At December 31, 1999 and
1998, SPG's direct and indirect ownership interest in the SPG Operating
Partnership was 72.4% and 71.6%, respectively.

3. NED Acquisition

During 1999, the SPG Operating Partnership acquired ownership interests in
14 regional malls from New England Development Company (the "NED Acquisition").
The SPG Operating Partnership acquired one of the Properties directly and
formed a joint venture with three partners ("Mayflower"), of which the SPG
Operating Partnership owns 49.1%, to acquire interests in the remaining
Properties. The total cost of the NED Acquisition is approximately $1.8
billion, of which the SPG Operating Partnership's share is approximately $894
million. The SPG Operating Partnership assumed management responsibilities for
the portfolio, which includes approximately 10.7 million square feet of GLA.
The SPG Operating Partnership's share of the cost of the NED Acquisition
included the assumption of approximately $530,000 of mortgage indebtedness;
$177,050 in cash; the issuance of 1,269,446 Paired Units valued at
approximately $36,400; the issuance of 2,584,227 7% Convertible Preferred Units
in the SPG Operating Partnership valued at approximately $72,800; and 2,584,227
8% Redeemable Preferred Units in the SPG Operating Partnership valued at
approximately $78,000. The SPG Operating Partnership's share of the cash
portion of the purchase price was financed primarily using the Credit Facility
(See Note 9).

In connection with the NED Acquisition, SPG borrowed $92.8 million from the
SPG Operating Partnership at 7.8% interest with a maturity of December 2009.
SPG used the proceeds to purchase a noncontrolling 88% interest in one of the
NED Properties. SPG contributed its interest in such Property to the SPG
Operating Partnership in exchange for 3,617,070 Paired Units. The SPG Operating
Partnership then contributed its interest in such Property to Mayflower in
exchange for an ownership interest in Mayflower. The note receivable from SPG
is recorded as a reduction of partners' equity.

4. CPI Merger

For financial reporting purposes, as of the close of business on September
24, 1998, the CPI Merger was consummated pursuant to the Agreement and Plan of
Merger dated February 18, 1998, among Simon

62
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

DeBartolo Group, Inc. ("SDG"), Corporate Property Investors, Inc. ("CPI"), and
Corporate Realty Consultants, Inc. ("CRC").The CPI Merger included the addition
of 23 regional malls, one community center, two office buildings and one
regional mall and one community center under construction.

As part of the merger consideration, immediately prior to the consummation
of the CPI Merger, the holders of CPI common stock were paid a merger dividend
consisting of (i) $90 in cash, (ii) 1.0818 additional shares of CPI common
stock and (iii) 0.19 shares of 6.50% Series B convertible preferred stock of
CPI per share of CPI common stock. Immediately prior to the CPI Merger, there
were 25,496,476 shares of CPI common stock outstanding. The cash portion of the
merger consideration was financed with borrowings of $1.4 billion on the Merger
Facility and $237,000 on the Credit Facility (See Note 9). The remaining merger
consideration was liabilities assumed of approximately $2.3 billion. The
aggregate value associated with the completion of the CPI Merger was
approximately $5.9 billion, including transaction costs and liabilities
assumed, in accordance with the purchase method of accounting. The value of the
consideration paid by SDG has been allocated to the estimated fair value of the
CPI assets acquired and liabilities assumed and resulted in goodwill of
$41,021, as adjusted. Goodwill is amortized over the estimated life of the
properties of 35 years.

In connection with the CPI Merger, CPI was renamed "Simon Property Group,
Inc." CPI's paired-share affiliate, Corporate Realty Consultants, Inc., was
renamed "SPG Realty Consultants, Inc." In addition SDG and Simon DeBartolo
Group, LP ("SDG, LP") were renamed "SPG Properties, Inc." and "Simon Property
Group, L.P.", respectively.

Upon completion of the CPI Merger, SPG transferred substantially all of the
CPI assets acquired (other than one regional mall, Ocean County Mall, and
certain net leased properties valued at approximately $153,100) to the SPG
Operating Partnership or one or more subsidiaries of the SPG Operating
Partnership in exchange for 47,790,550 Units and 5,053,580 preferred Units in
the SPG Operating Partnership. The preferred Units carry the same rights and
equal the number of preferred shares issued and outstanding as a direct result
of the CPI Merger. Likewise, the net assets of SRC, with a carrying value of
approximately $14,755, were transferred to the SRC Operating Partnership in
exchange for Units.

SDG, LP contributed $14,000 cash to CRC and $8,000 cash to the SRC Operating
Partnership on behalf of the SDG common stockholders and the limited partners
of SDG, LP to obtain the beneficial interests in common stock of CRC, which
were paired with the shares of common stock issued by SPG, and to obtain Units
in the SRC Operating Partnership so that the limited partners of the SPG
Operating Partnership would hold the same proportionate interest in the SRC
Operating Partnership that they hold in the SPG Operating Partnership. The cash
contributed to CRC and the SRC Operating Partnership on behalf of the partners
of SDG, LP was accounted for as a distribution to the partners.

5. Other Real Estate Acquisitions, Disposals and Developments

Acquisitions

During 1999, in addition to the NED Acquisition, the SPG Operating
Partnership acquired the remaining interests in four Properties and a
noncontrolling 27.5% ownership interest in the 2.8 million square-foot Mall of
America for a combined price of approximately $317,850, including the
assumption of $134,300 of mortgage indebtedness, 1,000,000 shares of 8%
Redeemable Preferred Stock in SPG issued at $24,242, and the remainder in cash,
financed primarily through the Credit Facility and working capital. The SPG
Operating Partnership is entitled to 50% of the economic benefits of Mall of
America, due to a preference.

On February 27, 1998, the SPG Operating Partnership acquired a
noncontrolling 50% joint venture interest in a portfolio of twelve regional
malls and two community centers (the "IBM Properties") comprising

63
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

approximately 10.7 million square feet of GLA. The SPG Operating Partnership's
$487,250 share of the purchase price included the assumption of indebtedness of
$242,500. The SPG Operating Partnership also assumed leasing and management
responsibilities for six of the regional malls and one community center. The
SPG Operating Partnership funded its share of the cash portion of the purchase
price using borrowings from an interim $300,000 unsecured revolving credit
facility, which was subsequently retired using borrowings from the Credit
Facility.

During 1998, in addition to the CPI Merger and the acquisition of the IBM
Properties, the SPG Operating Partnership acquired 100% of one Property, a 90%
interest in another Property and additional interests in a total of six
Properties for approximately $199,200, including the assumption of $62,100 of
indebtedness and 2,864,088 Units valued at approximately $93,500, with the
remainder in cash financed primarily through the Credit Facility and working
capital. These transactions resulted in the addition of approximately 1.1
million square feet of GLA to the portfolio.

During 1997, the SPG Operating Partnership completed its cash tender offer
for all of the outstanding shares of beneficial interests of The Retail
Property Trust ("RPT"), a private REIT and the acquisition of RPT's operating
partnership, Shopping Center Associates ("SCA"), which owned or had interests
in twelve regional malls and one community center (the "SCA Properties"). In a
series of subsequent transactions, the SPG Operating Partnership acquired the
remaining ownership interest in three of the SCA Properties and sold its
interest in four of the SCA Properties. The Property sales, which generated net
cash proceeds of $43,050, were accounted for as an adjustment to the allocation
of the purchase price. At the completion of these transactions (the "SCA
Acquisition"), the SPG Operating Partnership owns 100% of eight of the nine SCA
Properties, and a noncontrolling 50% ownership interest in the remaining
Property. The total cost for the SCA Acquisition of approximately $1.3 billion
included shares of common stock of SPG valued at approximately $50,000, Units
in the SPG Operating Partnership valued at approximately $25,300, the
assumption of $398,500 of consolidated indebtedness. The SPG Operating
Partnership's pro rata share of joint venture indebtedness of $76,750, with the
remainder comprised primarily of cash financed using the SPG Operating
Partnership's Credit Facility. On September 15, 1998, RPT transferred its
ownership interest in SCA to the SPG Operating Partnership in exchange for
27,195,109 Units in the SPG Operating Partnership.

Also in 1997, the SPG Operating Partnership acquired ownership interests in
four regional malls and one community center for an aggregate purchase price of
approximately $322,000. The purchase price included Units in the SPG Operating
Partnership valued at $1,100, common stock of SPG valued at approximately
$20,000 and the assumption of $64,772 of mortgage indebtedness, with the
remainder paid in cash primarily using proceeds from the Credit Facility, sales
of equity securities and working capital.

Disposals

During 1999, 1998 and 1997, the SPG Operating Partnership sold ownership
interests in two parcels of land and two properties; five properties; and one
property, respectively, at a combined sale price of $46,750, $120,000 and
$1,100, respectively. These sales generated net consolidated gains (losses) of
($1,942), ($7,283) and $20 in 1999, 1998 and 1997, respectively. The SPG
Operating Partnership is continuing to pursue the sale of its remaining non-
retail holdings, along with a number of retail assets that are no longer
aligned with the SPG Operating Partnership's strategic criteria. If these
assets are sold, management expects the sale prices will not differ materially
from the carrying value of the related assets.

Development Activity

Development of new retail assets is an ongoing part of the SPG Operating
Partnership's strategy. The SPG Operating Partnership's share of development
costs in 1999 was approximately $400,000. Six Properties

64
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

opened in 1999 aggregating approximately 4.9 million square feet of GLA. During
1998, the SPG Operating Partnership opened two new community center Properties
at a cost of approximately $102,000, with approximately 577,000 square feet of
GLA, and the SPG Operating Partnership opened four new Properties in 1997 at a
cost of approximately $230,000 with approximately 3,600,000 square feet of GLA.
Construction also continues on two other new projects at an aggregate
construction cost of approximately $340,000, of which approximately $140,000 is
the SPG Operating Partnership's share. These developments are funded primarily
with borrowings from the Credit Facility, construction loans and working
capital.

In addition, the SPG Operating Partnership strives to increase profitability
and market share of the existing Properties through the completion of strategic
renovations and expansions. During 1999, 1998 and 1997, the SPG Operating
Partnership invested approximately $277,000, $337,000 and $229,000,
respectively on renovation and expansion of the Properties. These projects were
also funded primarily with borrowings from the Credit Facility, construction
loans and working capital.

Pro Forma

The following unaudited pro forma summary financial information excludes any
extraordinary items and reflects the consolidated results of operations of the
SPG Operating Partnership as if the CPI Merger had occurred on January 1, 1998,
and was carried forward through December 31, 1998. Preparation of the pro forma
summary information was based upon assumptions deemed appropriate by
management. The pro forma summary information is not necessarily indicative of
the results which actually would have occurred if the CPI Merger had been
consummated on January 1, 1998, nor does it purport to represent the results of
operations for future periods.

<TABLE>
<CAPTION>
Year Ended
December 31,
1998
------------
<S> <C>
Revenue........................................................... $ 1,695,204
============
Net income(1)..................................................... 273,088
============
Net income available to Unitholders............................... 191,312
============
Basic net income per Unit(1)...................................... $ 0.85
============
Diluted net income per Unit....................................... $ 0.85
============
Basic weighted average number of Units............................ 224,041,500
============
Diluted weighted average number of Units.......................... 224,398,649
============
</TABLE>
- --------
(1) Includes net gains on the sales of assets of $37,973, or $0.17 on a basic
earnings per Unit basis.

6. Summary of Significant Accounting Policies

Investment Properties

Investment Properties are recorded at cost (predecessor cost for Properties
acquired from certain of the SPG Operating Partnership's unitholders).
Investment Properties for financial reporting purposes are reviewed for
impairment on a Property-by-Property basis whenever events or changes in
circumstances indicate that the carrying value of investment Properties may not
be recoverable. Impairment of investment Properties is recognized when
estimated undiscounted operating income is less than the carrying value of the
Property. To the extent an impairment has occurred, the excess of carrying
value of the Property over its estimated fair value is charged to income.

65
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Investment Properties include costs of acquisitions, development and
predevelopment, construction, tenant allowances and improvements, interest and
real estate taxes incurred during construction, certain capitalized
improvements and replacements, and certain allocated overhead. Depreciation on
buildings and improvements is provided utilizing the straight-line method over
an estimated original useful life, which is generally 35 years or the term of
the applicable tenant's lease in the case of tenant inducements. Depreciation
on tenant allowances and improvements is provided utilizing the straight-line
method over the term of the related lease.

Certain improvements and replacements are capitalized when they extend the
useful life, increase capacity, or improve the efficiency of the asset. All
other repair and maintenance items are expensed as incurred.

Capitalized Interest

Interest is capitalized on projects during periods of construction. Interest
capitalized during 1999, 1998 and 1997 was $19,641, $10,567 and $11,589,
respectively.

Segment Disclosure

The SPG Operating Partnership's interests in its regional malls, community
centers and other assets represents one segment as they have similar economic
and environmental conditions, business processes, types of customers (i.e.
tenants) and services provided, and because resource allocation and other
operating decisions are based on an evaluation of the entire portfolio.

Long-term Investment

Investments in securities classified as available for sale are reflected in
other investment in the balance sheets at market value with the changes in
market value reflected as comprehensive income in partners' equity.

Deferred Costs

Deferred costs consist primarily of financing fees incurred to obtain long-
term financing, costs of interest rate protection agreements, and internal and
external leasing commissions and related costs. Deferred financing costs,
including interest rate protection agreements, are amortized on a straight-line
basis over the terms of the respective loans or agreements. Deferred leasing
costs are amortized on a straight-line basis over the terms of the related
leases. Deferred costs of $137,133 and $127,022 are net of accumulated
amortization of $121,468 and $115,283 in 1999 and 1998, respectively.

Interest expense in the accompanying Consolidated Statements of Operations
includes amortization of deferred financing costs of $17,535, $11,835, and
$8,338, for 1999, 1998 and 1997, respectively, and has been reduced by
amortization of debt premiums and discounts of $5,707, $1,465 and $699 for
1999, 1998 and 1997, respectively.

Revenue Recognition

The SPG Operating Partnership, as a lessor, has retained substantially all
of the risks and benefits of ownership of the investment Properties and
accounts for its leases as operating leases. Minimum rents are accrued on a
straight-line basis over the terms of their respective leases. Certain tenants
are also required to pay overage rents based on sales over a stated base amount
during the lease year. Through December 31, 1999, overage rents were recognized
as revenues based on reported and estimated sales for each tenant through
December 31, less the applicable prorated base sales amount. Differences
between estimated and actual amounts are recognized in the subsequent year. As
described in Note 15, the SPG Operating Partnership's accounting for overage
rent will be modified effective January 1, 2000.

66
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Reimbursements from tenants for real estate taxes and other recoverable
operating expenses are recognized as revenue in the period the applicable
expenditures are incurred.

Allowance for Credit Losses

A provision for credit losses is recorded based on management's judgment of
tenant creditworthiness. The activity in the allowance for credit losses during
1999, 1998 and 1997 was as follows:

<TABLE>
<CAPTION>
Balance at Provision Accounts Balance
Beginning for Credit Written at End
Year Ended of Year Losses Off of Year
---------- ---------- ---------- -------- -------
<S> <C> <C> <C> <C>
December 31, l999..................... $14,476 $8,367 $(8,355) $14,488
======= ====== ======= =======
December 31, l998..................... $13,804 $6,599 $(5,927) $14,476
======= ====== ======= =======
December 31, l997..................... $ 7,918 $5,992 $ (106) $13,804
======= ====== ======= =======
</TABLE>

Income Taxes

As a partnership, the allocated share of income or loss for each year is
included in the income tax returns of the partners, accordingly, no accounting
for income taxes is required in the accompanying consolidated financial
statements. State and local taxes are not material.

The unaudited taxable income of the SPG Operating Partnership for the year
ended December 31, 1999, is estimated to be $483,500 and was $307,406 and
$172,943 for the years ended 1998 and 1997, respectively. Reconciling
differences between book income and tax income primarily result from timing
differences consisting of (i) depreciation expense, (ii) prepaid rental income
and (iii) straight-line rent. Furthermore, the SPG Operating Partnership's
share of income or loss from the affiliated Management Company is excluded from
the tax return of the SPG Operating Partnership.

Per Unit Data

In accordance with SFAS No. 128 Earnings Per Share, basic earnings per Unit
is based on the weighted average number of Units outstanding during the period
and diluted earnings per Unit is based on the weighted average number of Units
outstanding combined with the incremental weighted average Units that would
have been outstanding if all dilutive potential Units would have been converted
into Units at the earliest date possible. The weighted average number of Units
used in the computation for 1999, 1998 and 1997 was 232,569,029; 189,082,385;
and 161,022,887, respectively. The diluted weighted average number of Units
used in the computation for 1999, 1998 and 1997 was 232,706,031; 189,439,534;
and 161,406,951, respectively.

Preferred Units issued and outstanding during the comparative periods did
not have a dilutive effect on earnings per Unit. Paired Units held by limited
partners in the Operating Partnerships may be exchanged for Paired Shares, on a
one-for-one basis in certain circumstances. If exchanged, the Paired Units
would not have a dilutive effect. The increase in weighted average Units
outstanding under the diluted method over the basic method in every period
presented for the SPG Operating Partnership is due entirely to the effect of
outstanding stock options. Basic earnings and diluted earnings were the same
for all periods presented.

The SPG Operating Partnership accrues distributions when they are declared.
The SPG Operating Partnership declared distributions in 1999 and 1998
aggregating $2.02 per Unit, of which $1.07 and $0.97 represented a return of
capital measured using generally accepted accounting principles, respectively.
On a

67
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

federal income tax basis, 10% of the SPG Operating Partnership's 1999
distributions represented a capital gain and 38% represented a return of
capital. In 1998, 1% of the SPG Operating Partnership's 1998 distributions
represented a capital gain and 48% represented a return of capital.

Statements of Cash Flows

For purposes of the Statements of Cash Flows, all highly liquid investments
purchased with an original maturity of 90 days or less are considered cash and
cash equivalents. Cash equivalents are carried at cost, which approximates
market value. Cash equivalents generally consist of commercial paper, bankers
acceptances, Eurodollars, repurchase agreements and Dutch auction securities.

Cash paid for interest, net of any amounts capitalized, during 1999, 1998
and 1997 was $566,156, $397,545 and $270,912, respectively.

Noncash Transactions

Accrued and unpaid distributions were $876 and $3,428 at December 31, 1999
and 1998, respectively. Please refer to Notes 3, 4, 5 and 11 for additional
discussion of noncash transactions.

Reclassifications

Certain reclassifications have been made to the prior year financial
statements to conform to the current year presentation. These reclassifications
have no impact on net operating results previously reported.

7. Investment Properties

Investment properties consist of the following:

<TABLE>
<CAPTION>
December 31,
-----------------------
1999 1998
----------- -----------
<S> <C> <C>
Land................................................ $ 2,109,096 $ 2,066,461
Buildings and improvements.......................... 10,456,974 9,537,310
----------- -----------
Total land, buildings and improvements.............. 12,566,070 11,603,771
Furniture, fixtures and equipment................... 74,076 59,089
----------- -----------
Investment properties at cost....................... 12,640,146 11,662,860
Less--accumulated depreciation...................... 1,093,103 709,114
----------- -----------
Investment properties at cost, net.................. $11,547,043 $10,953,746
=========== ===========
</TABLE>

Investment properties includes $201,032 and $184,799 of construction in
progress at December 31, 1999 and 1998, respectively.

8. Investments in Unconsolidated Entities

Joint Venture Properties

From January 1, 1997 through December 31, 1999, the number of Properties the
SPG Operating Partnership accounted for using the equity method of accounting
has increased from 30 to 69. Please refer to Notes 3, 4 and 5.

68
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Summary financial information of the Joint Venture Properties and a summary
of the SPG Operating Partnership's investment in and share of income from such
Properties follows.

<TABLE>
<CAPTION>
December 31,
-----------------------
1999 1998
----------- -----------
<S> <C> <C>
BALANCE SHEETS
Assets:
Investment properties at cost, net................... $ 6,471,992 $ 4,265,022
Cash and cash equivalents............................ 169,763 171,553
Tenant receivables................................... 160,431 140,579
Other assets......................................... 165,303 126,112
----------- -----------
Total assets........................................ $ 6,967,489 $ 4,703,266
=========== ===========
Liabilities and Partners' Equity:
Mortgages and other notes payable.................... $ 4,484,598 $ 2,861,589
Accounts payable, accrued expenses and other
liabilities......................................... 291,213 223,631
----------- -----------
Total liabilities................................... 4,775,811 3,085,220
Partners' equity..................................... 2,191,678 1,618,046
----------- -----------
Total liabilities and partners' equity.............. $ 6,967,489 $ 4,703,266
=========== ===========
The SPG Operating Partnership's Share of:
Total assets......................................... $ 2,834,236 $ 1,905,459
=========== ===========
Partners' equity..................................... $ 887,219 $ 565,496
Add: Excess Investment............................... 592,457 708,616
----------- -----------
The SPG Operating Partnership's net Investment in
Joint Ventures...................................... $ 1,479,676 $ 1,274,112
=========== ===========
</TABLE>

<TABLE>
<CAPTION>
For the Year Ended December
31,
-------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
STATEMENTS OF OPERATIONS
Revenue:
Minimum rent................................ $ 570,902 $ 442,530 $ 256,100
Overage rent................................ 25,957 18,465 10,510
Tenant reimbursements....................... 276,223 204,936 120,380
Other income................................ 45,140 30,564 19,364
--------- --------- ---------
Total revenue.............................. 918,222 696,495 406,354
Operating Expenses:
Operating expenses and other................ 324,061 245,927 144,256
Depreciation and amortization............... 170,339 129,681 85,423
--------- --------- ---------
Total operating expenses................... 494,400 375,608 229,679
--------- --------- ---------
Operating Income.............................. 423,822 320,887 176,675
Interest Expense.............................. 235,179 176,669 96,675
Extraordinary Items--Debt Extinguishments..... (66) (11,058) (1,925)
--------- --------- ---------
Net Income.................................... $ 188,577 $ 133,160 $ 78,075
========= ========= =========
Third-Party Investors' Share of Net Income.... 116,399 88,242 55,507
--------- --------- ---------
The SPG Operating Partnership's Share of Net
Income....................................... $ 72,178 $ 44,918 $ 22,568
Amortization of Excess Investment............. 27,252 22,625 13,878
--------- --------- ---------
Income from Unconsolidated Entities........... $ 44,926 $ 22,293 $ 8,690
========= ========= =========
</TABLE>

69
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

As of December 31, 1999 and 1998, the unamortized excess of the SPG
Operating Partnership's investment over its share of the equity in the
underlying net assets of the partnerships and joint ventures acquired ("Excess
Investment") was $592,457 and $708,616, respectively, which is amortized over
the life of the related Properties. Amortization included in income from
unconsolidated entities for the years ended December 31, 1999, 1998 and 1997
was $27,252, $22,625 and $13,878, respectively. Included in the 1999
amortization is a $5,000 writedown on a joint venture investment.

The Management Company

The SPG Operating Partnership holds 80% of the outstanding common stock, 5%
of the outstanding voting common stock, and all of the 8% cumulative preferred
stock of the Management Company. The remaining 20% of the outstanding common
stock of the Management Company (representing 95% of the voting common stock)
is owned directly by Melvin Simon, Herbert Simon and David Simon. Because the
SPG Operating Partnership exercises significant influence over the financial
and operating policies of the Management Company, it is reflected in the
accompanying statements using the equity method of accounting. The Management
Company, including its consolidated subsidiaries, provides management, leasing,
development, project management, accounting, legal, marketing and management
information systems services and property damage and general liability
insurance coverage to certain Portfolio Properties. The SPG Operating
Partnership incurred costs of $75,697, $58,748 and $45,509 on consolidated
Properties, related to services provided by the Management Company and its
affiliates in 1999, 1998 and 1997, respectively. The Management Company also
provides certain of such services to Melvin Simon & Associates, Inc. ("MSA"),
and certain other nonowned properties for a fee. Fees for services provided by
the Management Company to MSA were $3,853, $3,301 and $3,073 for the years
ended December 31, 1999, 1998 and 1997, respectively.

The SPG Operating Partnership manages substantially all wholly-owned
Properties and 40 Properties owned as joint venture interests, and,
accordingly, it reimburses a subsidiary of the Management Company for costs
incurred relating to the management of such Properties. Substantially all
employees of the SPG Operating Partnership (other than direct field personnel)
are employed by such Management Company subsidiary. The Management Company
records costs net of amounts reimbursed by the SPG Operating Partnership.
Common costs are allocated using assumptions that management believes are
reasonable. The SPG Operating Partnership's share of allocated common costs was
$54,759, $42,457 and $35,341 for 1999, 1998 and 1997, respectively. As of
December 31, 1999 and 1998, amounts due from the Management Company for unpaid
interest receivable and unpaid accrued preferred dividends were not material to
the consolidated financial statements. Amounts due to the Management Company
under cost-sharing arrangements and management contracts are included in notes
and advances receivable from Management Company and affiliates.

Included in operating income of the Management Company for 1999 is a $7,290
loss resulting from interests in two parcels of land held for sale by the
Management Company, which were written down to their respective estimated fair
market values.

70
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Summarized consolidated financial information of the Management Company and
a summary of the SPG Operating Partnership's investment in and share of income
from the Management Company follows.

<TABLE>
<CAPTION>
December 31,
-------------------
1999 1998
--------- ---------
<S> <C> <C>
BALANCE SHEET DATA:
Total assets............................................. $ 184,501 $ 198,952
Notes payable to the SPG Operating Partnership at 11%,
due 2008, and advances.................................. 162,082 115,378
Shareholders' equity..................................... 21,740 7,279
The SPG Operating Partnership's Share of:
Total assets............................................. $ 172,935 $ 184,273
========= =========
Shareholders' equity..................................... $ 23,889 $ 10,037
========= =========
</TABLE>

<TABLE>
<CAPTION>
For the Year Ended December
31,
----------------------------
1999 1998 1997
--------- --------- --------
<S> <C> <C> <C>
OPERATING DATA:
Total revenue................................... $ 115,761 $ 100,349 $ 85,542
Operating Income................................ 5,573 8,067 13,766
Net Income Available for Common Shareholders.... $ 4,173 $ 6,667 $ 12,366
========= ========= ========
The SPG Operating Partnership's Share of Net
Income after intercompany profit elimination... $ 4,715 $ 5,852 $ 10,486
========= ========= ========
</TABLE>

European Investment

The SPG Operating Partnership and the Management Company have a 25%
ownership interest in European Retail Enterprises, B.V. ("ERE") and Groupe BEG,
S.A. ("BEG"), respectively, which are accounted for using the equity method of
accounting. BEG and ERE are fully integrated European retail real estate
developers, lessors and managers. The SPG Operating Partnership and the
Management Company's total combined investment in ERE and BEG at December 31,
1999 was approximately $41,000, with commitments for an additional $22,000,
subject to certain performance and other criteria, including the SPG Operating
Partnership's approval of development projects. The agreements with BEG and ERE
are structured to allow the SPG Operating Partnership to acquire an additional
25% ownership interest over time. As of December 31, 1999, BEG and ERE had
three properties open in Poland and two in France.

The financial statements of the SPG Operating Partnership's European
operations are measured utilizing the Euro and translated into U.S. dollars in
accordance with SFAS No. 52, Foreign Currency Translation. Accordingly, results
of operations are translated at the weighted average exchange rate for the
period. The translation adjustment resulting from the conversion of BEG and
ERE's balance sheets were not significant for the years ended December 31, 1999
and 1998.

71
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

9. Indebtedness

The SPG Operating Partnership's consolidated mortgages and other notes
payable consist of the following:

<TABLE>
<CAPTION>
December 31,
---------------------
1999 1998
---------- ----------
<S> <C> <C>
Fixed-Rate Debt
Mortgages and other notes, including $28 and $1,917 net
premiums, respectively. Weighted average interest and
maturity of 7.4% and 6.1 years......................... $2,304,325 $2,290,902
Unsecured notes, including ($275) and $7,992 net
(discounts) premiums, respectively. Weighted average
interest and maturity of 7.2% and 7.1 years............ 3,489,725 2,896,563
6 3/4% Putable Asset Trust Securities, including $913
and $1,111 premiums, respectively, due November 2003... 100,913 101,111
7% Mandatory Par Put Remarketed Securities, including
$5,214 and $5,273 premiums, respectively, due June 2028
and subject to redemption June 2008.................... 205,214 205,273
Commercial mortgage pass-through certificates. Five
classes bearing interest at weighted average rates and
maturities of 7.3% and 8.0 years....................... 175,000 175,000
---------- ----------
Total fixed-rate debt................................... 6,275,177 5,668,849
Variable-Rate Debt
Mortgages and other notes, including $884 and $1,275
premiums, respectively. Weighted average interest and
maturity of 7.0% and 3.1 years......................... $ 558,664 $ 352,532
Credit Facility (see below)............................. 785,000 368,000
Merger Facility (see below)............................. 950,000 1,400,000
Commercial mortgage pass-through certificates, interest
at 6.2%, due December 2007............................. 50,000 50,000
Unsecured term loans, interest at 6.6%, due February
2002................................................... 150,000 133,000
---------- ----------
Total variable-rate debt................................ 2,493,664 2,303,532
---------- ----------
Total mortgages and other notes payable, net............ $8,768,841 $7,972,381
========== ==========
</TABLE>

General. Certain of the Properties are cross-defaulted and cross-
collateralized as part of a group of properties. Under certain of the cross-
default provisions, a default under any mortgage included in the cross-
defaulted package may constitute a default under all such mortgages and may
lead to acceleration of the indebtedness due on each Property within the
collateral package. Certain indebtedness is subject to financial performance
covenants relating to leverage ratios, annual real property appraisal
requirements, debt service coverage ratios, minimum net worth ratios, debt-to-
market capitalization, and minimum equity values. Debt premiums and discounts
are amortized over the terms of the related debt instruments. Certain
mortgages and notes payable may be prepaid but are generally subject to a
prepayment of a yield-maintenance premium.

Mortgages and Other Notes. Certain of the Properties are pledged as
collateral to secure the related mortgage notes. The fixed and variable
mortgage notes are nonrecourse; however certain notes have partial guarantees
by affiliates of approximately $643,667. The fixed-rate mortgages generally
require monthly payments of principal and/or interest. Variable-rate mortgages
are typically based on LIBOR.

Unsecured Notes. Certain of the SPG Operating Partnership's unsecured notes
totaling $825,000 with weighted average interests and maturities of 8.0% and
8.1 years, respectively, are structurally senior in right of payment to
holders of other SPG Operating Partnership unsecured notes to the extent of
the assets and related cash flows of certain Properties. Certain of the
unsecured notes are guaranteed by the SPG Operating Partnership.

72
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

On February 4, 1999, the SPG Operating Partnership completed the sale of
$600,000 of senior unsecured notes. These notes include two $300,000 tranches.
The first tranche bears interest at 6.75% and matures on February 4, 2004 and
the second tranche bears interest at 7.125% and matures on February 4, 2009.
The SPG Operating Partnership used the net proceeds of approximately $594,000
to retire the $450,000 initial tranche of the Merger Facility (see below) and
to pay $142,000 on the outstanding balance of the Credit Facility (see below).

Credit Facility. The Credit Facility is a $1,250,000 unsecured revolving
credit facility. During 1999, the SPG Operating Partnership obtained a three-
year extension on the Credit Facility to August of 2002, with an additional
one-year extension available at the SPG Operating Partnership's option. The
Credit Facility bears interest at LIBOR plus 65 basis points, with an
additional 15 basis point facility fee on the entire $1,250,000. The maximum
and average amounts outstanding during 1999 under the Credit Facility were
$785,000 and $487,255, respectively. The Credit Facility is primarily used for
funding acquisition, renovation and expansion and predevelopment opportunities.
At December 31, 1999, the Credit Facility had an effective interest rate of
6.47%, with $460,519 available after outstanding borrowings and letters of
credit. The Credit Facility contains financial covenants relating to a
capitalization value, minimum EBITDA and unencumbered EBITDA ratios and minimum
equity values.

The Merger Facility. In conjunction with the CPI Merger, the SPG Operating
Partnership and SPG, as co-borrowers, closed a $1,400,000 medium term unsecured
bridge loan (the "Merger Facility"). The Merger Facility bears interest at a
base rate of LIBOR plus 65 basis points and $450,000 of the remaining balance
will mature on March 24, 2000, with the remaining $500,000 due on September 24,
2000. The Merger Facility is subject to covenants and conditions substantially
identical to those of the Credit Facility. Financing costs of $9,707, which
were incurred to obtain the Merger Facility, are amortized over 18 months.

Debt Maturity and Other

As of December 31, 1999, scheduled principal repayments on indebtedness were
as follows:

<TABLE>
<S> <C>
2000............................................................. $1,161,653
2001............................................................. 268,436
2002............................................................. 1,563,601
2003............................................................. 1,135,047
2004............................................................. 1,083,039
Thereafter....................................................... 3,550,301
----------
Total principal maturities....................................... 8,762,077
Net unamortized debt premiums.................................... 6,764
----------
Total mortgages and other notes payable.......................... $8,768,841
==========
</TABLE>

The Joint Venture Properties have $4,484,598 and $2,861,589 of mortgages and
other notes payable at December 31, 1999 and 1998, respectively. The SPG
Operating Partnership's share of this debt was $1,876,158 and $1,227,044 at
December 31, 1999 and 1998, respectively. This debt, including premiums of
$22,521 in 1999, becomes due in installments over various terms extending
through 2010, with interest rates ranging from 6.26% to 9.98% (weighted average
rate of 7.37% at December 31, 1999). The debt, excluding the $22,521 of
premiums, matures $502,705 in 2000; $226,374 in 2001; $268,646 in 2002;
$844,459 in 2003; $406,161 in 2004 and $2,213,732 thereafter.

73
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Interest Rate Protection Agreements

The SPG Operating Partnership has entered into interest rate protection
agreements, in the form of "cap" or "swap" arrangements, with respect to
certain of its variable-rate mortgages and other notes payable. Swap
arrangements, which effectively fix the SPG Operating Partnership's interest
rate on the respective borrowings, have been entered into for $248,000
principal amount of consolidated debt. Cap arrangements, which effectively
limit the amount by which variable interest rates may rise, have been entered
into for $190,000 principal amount of consolidated debt and cap LIBOR at rates
ranging from 8.7% to 16.77% through the related debt's maturity. Costs of the
caps ($1,338) are amortized over the life of the agreements. The unamortized
balance of the cap arrangements was $187 and $429 as of December 31, 1999 and
1998, respectively. The SPG Operating Partnership's hedging activity as a
result of interest swaps and caps resulted in net interest (expense) savings of
($1,880), $263 and $1,586 for the years ended December 31, 1999, 1998 and 1997,
respectively. This did not materially impact the SPG Operating Partnership's
weighted average borrowing rate.

Fair Value of Financial Instruments

The carrying value of variable-rate mortgages and other loans represents
their fair values. The fair value of consolidated fixed-rate mortgages and
other notes payable, was approximately $5,649,467 and $6,100,000 at December
31, 1999 and 1998, respectively. The fair value of the consolidated interest
rate protection agreements at December 31, 1999 and 1998, was $6,600 and
($7,213), respectively. At December 31, 1999 and 1998, the estimated discount
rates were 8.06% and 6.70%, respectively.

10. Rentals under Operating Leases

The SPG Operating Partnership receives rental income from the leasing of
retail and mixed-use space under operating leases. Future minimum rentals to be
received under noncancelable operating leases for each of the next five years
and thereafter, excluding tenant reimbursements of operating expenses and
percentage rent based on tenant sales volume, as of December 31, 1999, are as
follows:

<TABLE>
<S> <C>
2000............................................................. $ 950,438
2001............................................................. 890,852
2002............................................................. 831,762
2003............................................................. 753,945
2004............................................................. 658,211
Thereafter....................................................... 2,407,943
-----------
$ 6,493,151
===========
</TABLE>

Approximately 1.8% of future minimum rents to be received are attributable
to leases with an affiliate of a limited partner in the SPG Operating
Partnership.

11. Partners' Equity

Unit Issuances

As described in Note 3, as part of the consideration paid for the NED
Acquisition, the SPG Operating Partnership issued 1,269,446 Paired Units valued
at approximately $36,400; 2,584,227 7% Convertible Preferred Units in the SPG
Operating Partnership valued at approximately $72,800; and 2,584,227 8%
Redeemable Preferred Units in the SPG Operating Partnership valued at
approximately $78,000. In addition, as part of the NED Acquisition, the SPG
Operating Partnership issued 3,617,070 Paired Units to SPG in exchange for a
note receivable, which is recorded as a reduction of partners' equity.

74
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

During 1998, SPG issued 2,957,335 shares of its common stock in offerings
generating combined net proceeds of approximately $91,399. The net proceeds
were contributed to the SPG Operating Partnership in exchange for a like
number of Units. The SPG Operating Partnership used the net proceeds for
general working capital purposes.

On November 11, 1997, the SPG Operating Partnership issued 3,809,523 Units
upon the conversion of 4,000,000 8.125% Series A Preferred Units.

On September 19, 1997, SPG issued 4,500,000 shares of its common stock in a
public offering. SPG contributed the net proceeds of approximately $146,800 to
the SPG Operating Partnership in exchange for an equal number of Units. The
SPG Operating Partnership used the net proceeds to retire a portion of the
outstanding balance on the Credit Facility.

Preferred Units

The following table summarizes each of the series of preferred Units of the
SPG Operating Partnership:

<TABLE>
<CAPTION>
As of December 31,
----------------------
1999 1998
----------- ----------
<S> <C> <C>
Series A 6.5% Convertible Preferred Units, 209,249 units
authorized, 53,271 and 209,249 issued and outstanding,
respectively........................................... $ 68,073 $ 267,393
Series B 6.5% Convertible Preferred Units, 5,000,000
units authorized, 4,844,331 issued and outstanding..... 450,523 450,523
Series B 8.75% Cumulative Redeemable Preferred Units,
8,000,000 units authorized, issued and outstanding..... 192,989 192,989
Series C 7.89% Cumulative Step-Up Premium RateSM
Convertible Preferred Units, 3,000,000 units
authorized, issued and outstanding..................... 146,608 146,340
Series C 7.00% Cumulative Convertible Preferred Units,
2,700,000 units authorized and 2,584,227 and 0 issued
and outstanding, respectively.......................... 72,358 --
Series D 8.00% Cumulative Redeemable Preferred Units,
2,700,000 units authorized and 2,584,227 and 0 issued
and outstanding, respectively.......................... 77,527 --
Series E 8.00% Cumulative Redeemable Preferred Units,
1,000,000 units authorized, 1,000,000 and 0 issued and
outstanding, respectively.............................. 24,242 --
----------- ----------
$ 1,032,320 $1,057,245
=========== ==========
</TABLE>

Series A Convertible Preferred Units. During 1999, 155,978 Series A
Convertible Preferred Units were converted into 5,926,440 Paired Units. In
addition, another 153,890 Paired Units were issued to the holders of the
converted units in lieu of the cash dividends allocable to those preferred
units. Each of the Series A Convertible Preferred Units has a liquidation
preference of $1,000 and is convertible into 37.995 Paired Units, subject to
adjustment under certain circumstances. The Series A Convertible Preferred
Units are not redeemable, except as needed to maintain or bring the direct or
indirect ownership of the capital stock of SPG into conformity with REIT
requirements.

Series B Convertible Preferred Units. Each of the Series B Convertible
Preferred Units has a liquidation preference of $100 and is convertible into
2.586 Paired Units, subject to adjustment under circumstances identical to
those of the Series A Preferred Units. SPG may redeem the Series B Preferred
Units on or after September 24, 2003 at a price beginning at 105% of the
liquidation preference plus accrued dividends and declining to 100% of the
liquidation preference plus accrued dividends any time on or after September
24, 2008.

75
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Series B Cumulative Redeemable Preferred Units. SPG Properties, Inc. ("SPG
Properties"), a general partner of the SPG Operating Partnership, has
outstanding 8,000,000 shares of 8.75% Series B Cumulative Redeemable Preferred
Stock, which it may redeem any time on or after September 29, 2006, at a
liquidation value of $25.00 per share, plus accrued and unpaid dividends. The
liquidation value (other than the portion thereof consisting of accrued and
unpaid dividends) is payable solely out of the sale proceeds of other capital
shares of SPG Properties, which may include other series of preferred shares.
SPG Properties holds preferred units in the SPG Operating Partnership with
economic terms substantially identical to those of the Series B Preferred
Stock.

Series C Cumulative Step-Up Premium RateSM Preferred Units. SPG Properties,
Inc. also has outstanding 3,000,000 shares of its 7.89% Series C Cumulative
Step-Up Premium RateSM Preferred Stock (the "Series C Preferred Shares") with a
liquidation value of $50.00 per share. Beginning October 1, 2012, the rate
increases to 9.89% per annum. Management intends to redeem the Series C
Preferred Shares prior to October 1, 2012. Beginning September 30, 2007, SPG
Properties, Inc. may redeem the Series C Preferred Shares in whole or in part,
using only the sale proceeds of other capital stock of SPG Properties, Inc., at
a liquidation value of $50.00 per share, plus accrued and unpaid distributions,
if any, thereon. Additionally, the Series C Preferred Shares have no stated
maturity and are not subject to any mandatory redemption provisions, nor are
they convertible into any other securities of SPG Properties, Inc. SPG
Properties holds preferred units in the SPG Operating Partnership with economic
terms substantially identical to those of the Series B Preferred Stock.

Series C and D Preferred Units. In connection with the NED Acquisition, the
SPG Operating Partnership issued two new series of preferred Units during 1999
as a component of the consideration for the Properties acquired. The SPG
Operating Partnership authorized 2,700,000, and issued 2,584,227, 7.00%
Cumulative Convertible Preferred Units (the "7.00% Preferred Units") having a
liquidation value of $28.00 per Unit. The 7.00% Preferred Units accrue
cumulative dividends at a rate of $1.96 annually, which is payable quarterly in
arrears. The 7.00% Preferred Units are convertible at the holders' option on or
after August 27, 2004, into either a like number of shares of 7.00% Cumulative
Convertible Preferred Stock of SPG with terms substantially identical to the
7.00% Preferred Units or Paired Units at a ratio of 0.75676 to one provided
that the closing stock price of SPG's Paired Shares exceeds $37.00 for any
three consecutive trading days prior to the conversion date. The SPG Operating
Partnership may redeem the 7.00% Preferred Units at their liquidation value
plus accrued and unpaid distributions on or after August 27, 2009, payable in
Paired Units. In the event of the death of a holder of the 7.00% Preferred
Units, or the occurrence of certain tax triggering events applicable to a
holder, the SPG Operating Partnership may be required to redeem the 7.00%
Preferred Units at liquidation value payable at the option of the SPG Operating
Partnership in either cash (the payment of which may be made in four equal
annual installments) or Paired Shares.

The SPG Operating Partnership also authorized 2,700,000, and issued
2,584,227, 8.00% Cumulative Redeemable Preferred Units (the "8.00% Preferred
Units") having a liquidation value of $30.00. The 8.00% Preferred Units accrue
cumulative dividends at a rate of $2.40 annually, which is payable quarterly in
arrears. The 8.00% Preferred Units are each paired with one 7.00% Preferred
Unit or with the Paired Units into which the 7.00% Preferred Units may be
converted. The SPG Operating Partnership may redeem the 8.00% Preferred Units
at their liquidation value plus accrued and unpaid distributions on or after
August 27, 2009, payable in either new preferred units of the SPG Operating
Partnership having the same terms as the 8.00% Preferred Units, except that the
distribution coupon rate would be reset to a then determined market rate, or in
Paired Units. The 8.00% Preferred Units are convertible at the holders' option
on or after August 27, 2004, into 8.00% Cumulative Redeemable Preferred Stock
of SPG with terms substantially identical to the 8.00% Preferred Units. In the
event of the death of a holder of the 8.00% Preferred Units, or the occurrence
of certain tax triggering events applicable to a holder, the SPG Operating
Partnership may be required to redeem the 8.00%

76
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Preferred Units owned by such holder at their liquidation value payable at the
option of the SPG Operating Partnership in either cash (the payment of which
may be made in four equal annual installments) or Paired Shares.

Series E Cumulative Redeemable Preferred Units. As part of the consideration
for the purchase of ownership in Mall of America, SPG issued 1,000,000 shares
of Series E Cumulative Redeemable Preferred Stock for $24,242. The Series E
Cumulative Redeemable Preferred Stock is redeemable beginning August 27, 2004
at the liquidation value of $25 per share. SPG contributed the interest in Mall
of America to the SPG Operating Partnership in exchange for cash and the
preferred units with economic terms identical to the Series E Preferred Stock.

Notes Receivable from Former CPI Shareholders

Notes receivable of $27,168 from former CPI shareholders, which result from
securities issued under CPI's executive compensation program and were assumed
in the CPI Merger, are reflected as a deduction from partners' equity in the
accompanying consolidated financial statements. Certain of such notes totaling
$9,519 bear interest at rates ranging from 5.31% to 6.00% and become due during
the period 2000 to 2002. The remainder of the notes do not bear interest and
become due at the time the underlying shares are sold.

The Simon Property Group 1998 Stock Incentive Plan

The SPG Operating Partnership and SPG have a stock incentive plan (the "1998
Plan"), which provides for the grant of equity-based awards during a ten-year
period, in the form of options to purchase Paired Shares ("Options"), stock
appreciation rights ("SARs"), restricted stock grants and performance unit
awards (collectively, "Awards"). Options may be granted which are qualified as
"incentive stock options" within the meaning of Section 422 of the Code and
Options which are not so qualified. The Companies have reserved for issuance
6,300,000 Paired Shares under the 1998 Plan. Additionally, the partnership
agreements require the Companies to sell Paired Shares to the Operating
Partnerships, at fair value, sufficient to satisfy the exercising of stock
options, and for the Companies to purchase Paired Units for cash in an amount
equal to the fair market value of such Paired Shares.

Administration. The 1998 Plan is administered by SPG's Compensation
Committee (the "Committee"). The Committee, in its sole discretion, determines
which eligible individuals may participate and the type, extent and terms of
the Awards to be granted to them. In addition, the Committee interprets the
1998 Plan and makes all other determinations deemed advisable for the
administration of the 1998 Plan. Options granted to employees ("Employee
Options") become exercisable over the period determined by the Committee. The
exercise price of an Employee Option may not be less than the fair market value
of the Paired Shares on the date of grant. Employee Options generally vest over
a three-year period and expire ten years from the date of grant.

Director Options. The 1998 Plan provides for automatic grants of Options to
directors ("Director Options") of SPG who are not also employees of the SPG
Operating Partnership or its "affiliates" ("Eligible Directors"). Under the
1998 Plan, each Eligible Director is automatically granted Director Options to
purchase 5,000 Paired Shares upon the director's initial election to the Board
of Directors, and upon each reelection, an additional 3,000 Director Options
multiplied by the number of calendar years that have elapsed since such
person's last election to the Board of Directors. The exercise price of the
options is equal to the fair market value of the Paired Shares on the date of
grant. Director Options become vested and exercisable on the first anniversary
of the date of grant or at such earlier time as a "change in control" of SPG
(as defined in the 1998 Plan). Director Options terminate 30 days after the
optionee ceases to be a member of the Board of Directors.

77
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Restricted Stock. The 1998 Plan also provides for shares of restricted
common stock of the Companies to be granted to certain employees at no cost to
those employees, subject to growth targets established by the Committee (the
"Restricted Stock Program"). Restricted stock vests annually in four
installments of 25% each beginning on January 1 following the year in which the
restricted stock is awarded. During 1999, 1998 and 1997, a total of 537,861;
495,131 and 448,753 Paired Shares, respectively, net of forfeitures, were
awarded under the Restricted Stock Program and predecessor programs. Through
December 31, 1999 a total of 1,825,086 Paired Shares, net of forfeitures, were
awarded. Approximately $10,601, $9,463 and $5,386 relating to these awards were
amortized in 1999, 1998 and 1997, respectively. The cost of restricted stock
grants, which is based upon the stock's fair market value at the time such
stock is earned, awarded and issued, is charged to partners' equity and
subsequently amortized against earnings of the SPG Operating Partnership over
the vesting period.

The SPG Operating Partnership accounts for stock-based compensation programs
using the intrinsic value method, which measures compensation expense as the
excess, if any, of the quoted market price of the stock at the grant date over
the amount the employee must pay to acquire the stock. During 1999, the SPG
Operating Partnership awarded 159,000 additional options to directors and
employees. Director Options vest over a twelve-month period, while 62,500 of
the Employee Options granted during 1999 vest over two years, and 37,500 vested
immediately. The impact on pro forma net income and earnings per share as a
result of applying the fair value method, as prescribed by SFAS No. 123,
Accounting for Stock-Based Compensation, which requires entities to measure
compensation costs measured at the grant date based on the fair value of the
award, was not material.

The fair value of the options at the date of grant was estimated using the
Black-Scholes option pricing model with the following assumptions:

<TABLE>
<CAPTION>
December 31,
---------------------------------------
1999 1998 1997
------------- ------------- ---------
<S> <C> <C> <C>
Weighted Average Fair Value per
Option.............................. $ 3.27 $ 7.24 $ 3.18
Expected Volatility.................. 19.78--19.89% 30.83--41.79% 17.63%
Risk-Free Interest Rate.............. 5.25--5.78% 4.64--5.68% 6.82%
Dividend Yield....................... 5.32--6.43% 6.24--6.52% 6.9%
Expected Life........................ 10 years 10 years 10 years
</TABLE>

The weighted average remaining contract life for options outstanding as of
December 31, 1999 was 6.0 years.

78
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Information relating to Director Options and Employee Options from December
31, 1996 through December 31, 1999 is as follows:

<TABLE>
<CAPTION>
Director Options Employee Options
--------------------- -----------------------
Option Price Option Price
Options per Share(1) Options per Share(1)
------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Shares under option at December
31, 1996....................... 85,080 $ 24.49 1,622,983 $ 23.00
------- ------- --------- -------
Granted....................... 9,000 29.31 -- N/A
Exercised..................... (8,000) 23.62 (361,902) 23.29
Forfeited..................... -- N/A (13,484) 23.99
------- ------- --------- -------
Shares under option at December
31, 1997....................... 86,080 $ 24.12 1,247,597 $ 22.90
------- ------- --------- -------
Granted....................... -- N/A 385,000 30.40
CPI Options Assumed........... -- N/A 304,209 25.48
Exercised..................... (8,000) 26.27 (38,149) 23.71
Forfeited..................... (3,000) 29.31 (4,750) 25.25
------- ------- --------- -------
Shares under option at December
31, 1998....................... 75,080 $ 24.11 1,893,907 $ 24.82
======= ======= ========= =======
Granted....................... 59,000 26.79 100,000 25.29
Exercised..................... (5,000) 22.25 (77,988) 23.21
Forfeited..................... -- N/A (58,253) 23.48
------- ------- --------- -------
Shares under option at December
31, 1999....................... 129,080 $ 25.41 1,857,666 $ 24.95
======= ======= ========= =======
Options exercisable at December
31, 1999....................... 108,080 $ 24.69 1,636,833 $ 24.46
======= ======= ========= =======
</TABLE>
- --------
(1) Represents the weighted average price when multiple prices exist.

Exchange Rights

Limited partners in the Operating Partnerships have the right to exchange
all or any portion of their Paired Units for Paired Shares on a one-for-one
basis or cash, as selected by the Board of Directors. The amount of cash to be
paid if the exchange right is exercised and the cash option is selected will be
based on the trading price of the Companies' common stock at that time. The
Companies have reserved 65,444,680 Paired Shares for possible issuance upon the
exchange of Paired Units.

12. Employee Benefit Plans

The SPG Operating Partnership maintains a tax-qualified retirement 401(k)
savings plan. Under the plan, eligible employees can participate in a cash or
deferred arrangement permitting them to defer up to a maximum of 12% of their
compensation, subject to certain limitations. Participants' salary deferrals
are matched at specified percentages, and the plan provides annual
contributions of 1.5% of eligible employees' compensation. The SPG Operating
Partnership contributed $3,189, $2,581 and $2,727 to the plan in 1999, 1998 and
1997, respectively.

Except for the 401(k) plan, the SPG Operating Partnership offers no other
postretirement or postemployment benefits to its employees.

79
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

13. Commitments and Contingencies

Litigation

Triple Five of Minnesota, Inc., a Minnesota corporation, v. Melvin Simon,
et. al. On or about November 9, 1999, Triple Five of Minnesota, Inc. ("Triple
Five") commenced an action in the District Court for the State of Minnesota,
Fourth Judicial District, against, among others, Mall of America, certain
members of the Simon family and entities allegedly controlled by such
individuals, and the SPG Operating Partnership. Two transactions form the basis
of the complaint: (i) the sale by Teachers Insurance and Annuity Association of
America of one-half of its partnership interest in Mall of America Company and
Minntertainment Company to the SPG Operating Partnership and related entities
(the "Teachers Sale"); and (ii) a financing transaction involving a loan in the
amount of $312,000 obtained from The Chase Manhattan Bank ("Chase") that is
secured by a mortgage placed on Mall of America's assets (the "Chase
Mortgage").

The complaint, which contains twelve counts, seeks remedies of damages,
rescission, constructive trust, accounting, and specific performance. Although
the complaint names all defendants in several counts, the SPG Operating
Partnership is specifically identified as a defendant in connection with the
Teachers Sale.

The SPG Operating Partnership has agreed to indemnify Chase and other
nonparties to the litigation that are related to the offering of certificates
secured by the Chase Mortgage against, among other things, (i) any and all
litigation expenses arising as a result of litigation or threatened litigation
brought by Triple Five, or any of its owners or affiliates, against any person
regarding the Chase Mortgage, the Teachers Sale, any securitization of the
Chase Mortgage or any transaction related to the foregoing and (ii) any and all
damages, awards, penalties or expenses payable to or on behalf of Triple Five
(or payable to a third party as a result of such party's obligation to pay
Triple Five) arising out of such litigation. These indemnity obligations do not
extend to liabilities covered by title insurance.

The SPG Operating Partnership believes that the Triple Five litigation is
without merit and intends to defend the action vigorously. To that end, all
defendants have removed the action to federal court and have served a motion,
which is pending, to dismiss Triple Five's complaint in its entirety on the
grounds that the complaint fails to state a claim. The SPG Operating
Partnership believes that neither the Triple Five litigation nor any potential
payments under the indemnity, if any, will have a material adverse effect on
the SPG Operating Partnership. Given the early stage of the litigation it is
not possible to provide an assurance of the ultimate outcome of the litigation
or an estimate of the amount or range of potential loss, if any.

Carlo Angostinelli et al. v. DeBartolo Realty Corp. et al. On October 16,
1996, a complaint was filed in the Court of Common Pleas of Mahoning County,
Ohio, captioned Carlo Angostinelli et al. v. DeBartolo Realty Corp. et al. The
named defendants are SD Property Group, Inc., an indirect 99%-owned subsidiary
of SPG, and DeBartolo Properties Management, Inc., a subsidiary of the
Management Company, and the plaintiffs are 27 former employees of the
defendants. In the complaint, the plaintiffs alleged that they were recipients
of deferred stock grants under the DeBartolo Realty Corporation ("DRC") Stock
Incentive Plan (the "DRC Plan") and that these grants immediately vested under
the DRC Plan's "change in control" provision as a result of the DRC Merger.
Plaintiffs asserted that the defendants' refusal to issue them approximately
542,000 shares of DRC common stock, which is equivalent to approximately
370,000 Paired Shares computed at the 0.68 exchange ratio used in the DRC
Merger, constituted a breach of contract and a breach of the implied covenant
of good faith and fair dealing under Ohio law. Plaintiffs sought damages equal
to such number of shares of DRC common stock, or cash in lieu thereof, equal to
all deferred stock ever granted to them under the DRC Plan, dividends on such
stock from the time of the grants, compensatory damages for breach of the
implied covenant of good faith and fair dealing, and punitive damages. The
plaintiffs and the defendants each filed motions for summary judgment. On
October 31, 1997, the Court of Common Pleas entered a judgment in

80
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

favor of the defendants granting their motion for summary judgment. The
plaintiffs appealed this judgment to the Seventh District Court of Appeals in
Ohio. On August 18, 1999, the District Court of Appeals reversed the summary
judgement order in favor of the defendants entered by the Common Pleas Court
and granted plaintiffs' cross motion for summary judgement, remanding the
matter to the Common Pleas Court for the determination of plaintiffs' damages.
The defendants petitioned the Ohio Supreme Court asking that they exercise
their discretion to review and reverse the Appellate Court decision, but the
Ohio Supreme court issued an order changing jurisdiction. The case has been
remanded to the Court of Common Pleas of Mahoning County, Ohio, to calculate
Plaintiffs' damages and rule upon counterclaims asserted by the SPG Operating
Partnership. As a result of the appellate court's decision, the SPG Operating
Partnership recorded a $12,000 loss in 1999 related to this litigation in the
accompanying consolidated statements of operations as an unusual item.

Roel Vento et al v. Tom Taylor et al. An affiliate of the SPG Operating
Partnership is a defendant in litigation entitled Roel Vento et al v. Tom
Taylor et al., in the District Court of Cameron County, Texas, in which a
judgment in the amount of $7,800 was entered against all defendants. This
judgment includes approximately $6,500 of punitive damages and is based upon a
jury's findings on four separate theories of liability including fraud,
intentional infliction of emotional distress, tortious interference with
contract and civil conspiracy arising out of the sale of a business operating
under a temporary license agreement at Valle Vista Mall in Harlingen, Texas.
The SPG Operating Partnership appealed the verdict and on May 6, 1999, the
Thirteenth Judicial District (Corpus Christi) of the Texas Court of Appeals
issued an opinion reducing the trial court verdict to $3,364 plus interest. The
SPG Operating Partnership filed a petition for a writ of certiorari to the
Texas Supreme Court requesting that they review and reverse the determination
of the Appellate Court. The Texas Supreme Court has not yet determined whether
it will take the matter up on appeal. Management, based upon the advice of
counsel, believes that the ultimate outcome of this action will not have a
material adverse effect on the SPG Operating Partnership.

The SPG Operating Partnership currently is not subject to any other material
litigation other than routine litigation and administrative proceedings arising
in the ordinary course of business. On the basis of consultation with counsel,
management believes that such routine litigation and administrative proceedings
will not have a material adverse impact on the SPG Operating Partnership's
financial position or its results of operations.

Lease Commitments

As of December 31, 1999, a total of 35 of the consolidated Properties are
subject to ground leases. The termination dates of these ground leases range
from 2000 to 2090. These ground leases generally require payments by the SPG
Operating Partnership of a fixed annual rent, or a fixed annual rent plus a
participating percentage over a base rate. Ground lease expense incurred by the
SPG Operating Partnership for the years ended December 31, 1999, 1998 and 1997,
was $13,365, $13,618 and $10,511, respectively.

Future minimum lease payments due under such ground leases for each of the
next five years ending December 31 and thereafter are as follows:

<TABLE>
<CAPTION>
<S> <C>
2000............................................................... $ 7,544
2001............................................................... 7,645
2002............................................................... 7,925
2003............................................................... 7,864
2004............................................................... 7,407
Thereafter......................................................... 495,963
---------
$ 534,348
=========
</TABLE>

81
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Long-term Contract

On September 30, 1999, the SPG Operating Partnership entered into a five
year contract with Enron Energy Services for Enron to supply or manage all of
the energy commodity requirements throughout the SPG Operating Partnership's
portfolio. The contract includes electricity, natural gas and maintenance of
energy conversion assets and electrical systems including lighting. The SPG
Operating Partnership has committed to pay Enron a fixed percentage of the
Portfolio's historical energy costs for these services over the term of the
agreement.

Environmental Matters

Nearly all of the Properties have been subjected to Phase I or similar
environmental audits. Such audits have not revealed nor is management aware of
any environmental liability that management believes would have a material
adverse impact on the SPG Operating Partnership's financial position or results
of operations. Management is unaware of any instances in which it would incur
significant environmental costs if any or all Properties were sold, disposed of
or abandoned.

14. Related Party Transactions

In preparation for the CPI Merger, on July 31, 1998, CPI, with the
assistance of the SPG Operating Partnership, completed the sale of the General
Motors Building in New York, New York for approximately $800,000. The SPG
Operating Partnership and certain third-party affiliates each received a $2,500
fee from CPI in connection with the sale.

15. New Accounting Pronouncement

On December 3, 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), which addressed certain revenue
recognition policies, including the accounting for overage rent by a landlord.
SAB 101 requires overage rent to be recognized as revenue only when each
tenant's sales exceeds their sales threshold. The SPG Operating Partnership
currently recognizes overage rent based on reported and estimated sales through
the end of the period, less the applicable prorated base sales amount. The SPG
Operating Partnership will adopt SAB 101 effective January 1, 2000. Management
is currently evaluating the impact of applying SAB 101 and expects to record a
loss from the cumulative effect of a change in accounting principle of
approximately $13,000 in the first quarter of 2000. In addition, SAB 101 will
impact the timing in which overage rent is recognized throughout each year, but
will not have a material impact on the total overage rent recognized in each
full year.

82
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

16. Quarterly Financial Data (Unaudited)

Consolidated summarized quarterly 1999 and 1998 data is as follows:

<TABLE>
<CAPTION>
First Second Third Fourth Annual
Quarter Quarter Quarter Quarter Amount
------------- ------------- ------------- ------------- -------------
1999
- ----
<S> <C> <C> <C> <C> <C>
Total revenue........... $ 441,194 $ 453,419 $ 466,913 $ 518,709 $ 1,880,235
Operating income........ 194,706 208,491 212,878 236,636 852,711
Income before unusual
and extraordinary
items.................. 66,638 67,735 84,164 91,306 309,843
Net income available to
Unitholders............ 47,159 51,569 55,064 68,023 221,815
Net income before
extraordinary items per
Unit(1)................ $ 0.21 $ 0.22 $ 0.24 $ 0.31 $ 0.98
Net income per Unit(1).. $ 0.21 $ 0.22 $ 0.24 $ 0.29 $ 0.95
Weighted Average Units
Outstanding............ 227,879,830 232,231,002 232,636,887 236,713,575 232,569,029
Diluted net income
before extraordinary
items per Unit(1)...... $ 0.21 $ 0.22 $ 0.24 $ 0.31 $ 0.98
Diluted net income per
Unit(1)................ $ 0.21 $ 0.22 $ 0.24 $ 0.29 $ 0.95
Diluted weighted Average
Units Outstanding...... 228,061,703 232,498,343 232,707,718 236,729,515 232,706,031
</TABLE>

<TABLE>
<CAPTION>
First Second Third Fourth Annual
Quarter Quarter Quarter Quarter Amount
------------- ------------- ------------- ------------- -------------
1998
- ----
<S> <C> <C> <C> <C> <C>
Total revenue........... $ 300,257 $ 310,375 $ 321,987 $ 467,570 $ 1,400,189
Operating income........ 133,667 145,226 147,326 213,790 640,009
Income before
extraordinary items.... 45,124 43,514 52,635 91,983 233,256
Net income available to
Unitholders............ 37,790 43,204 44,539 73,398 198,931
Net income before
extraordinary items per
Unit(1)................ $ 0.22 $ 0.21 $ 0.25 $ 0.32 $ 1.01
Net income per Unit(1).. $ 0.22 $ 0.25 $ 0.25 $ 0.33 $ 1.05
Weighted Average Units
Outstanding............ 173,084,147 176,098,843 180,987,067 225,670,566 189,082,385
Diluted net income
before extraordinary
items per Unit(1)...... $ 0.22 $ 0.21 $ 0.25 $ 0.32 $ 1.01
Diluted net income per
Unit(1)................ $ 0.22 $ 0.25 $ 0.25 $ 0.32 $ 1.05
Diluted weighted Average
Units Outstanding...... 173,471,370 176,489,839 181,312,399 225,972,148 189,439,534
</TABLE>
- --------
(1) Primarily due to the cyclical nature of earnings available for Units and
the issuance of additional Units during the periods, the sum of the
quarterly earnings per Unit sometimes varies from the annual earnings per
Unit.

83
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) 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.

SPG PROPERTIES, INC.

/s/ David Simon
By __________________________________
David Simon
Chief Executive Officer

March 23, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----

<S> <C> <C>
/s/ David Simon Chief Executive Officer March 23, 2000
______________________________________ and Director (Principal
David Simon Executive Officer)

/s/ Herbert Simon Co-Chairman of the Board March 23, 2000
______________________________________ of Directors
Herbert Simon

/s/ Melvin Simon Co-Chairman of the Board March 23, 2000
______________________________________ of Directors
Melvin Simon

/s/ Hans C. Mautner Vice Chairman of the Board March 23, 2000
______________________________________ of Directors
Hans C. Mautner

/s/ Richard Sokolov President, Chief Operating March 23, 2000
______________________________________ Officer and Director
Richard Sokolov

/s/ Robert E. Angelica Director March 23, 2000
______________________________________
Robert E. Angelica

/s/ Birch Bayh Director March 23, 2000
______________________________________
Birch Bayh

/s/ Pieter S. van den Berg Director March 23, 2000
______________________________________
Pieter S. van den Berg

/s/ G. William Miller Director March 23, 2000
______________________________________
G. William Miller
</TABLE>

84
<PAGE>

<TABLE>
<S> <C> <C>
/s/ Fredrick W. Petri Director March 23, 2000
______________________________________
Fredrick W. Petri

/s/ J. Albert Smith Director March 23, 2000
______________________________________
J. Albert Smith

/s/ Philip J. Ward Director March 23, 2000
______________________________________
Philip J. Ward

/s/ M. Denise DeBartolo York Director March 23, 2000
______________________________________
M. Denise DeBartolo York

/s/ John Dahl Senior Vice President March 23, 2000
______________________________________ (Principal Accounting
John Dahl Officer)

Principal Financial Officers:

/s/ Stephen E. Sterrett Treasurer March 23, 2000
______________________________________
Stephen E. Sterrett

/s/ James R. Giuliano III Senior Vice President March 23, 2000
______________________________________
James R. Giuliano III
</TABLE>

85
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SCHEDULE

To Simon Property Group, Inc.:

We have audited in accordance with auditing standards generally accepted in
the United States, the consolidated financial statements of SIMON PROPERTY
GROUP, L.P. included in this Form 10-K and have issued our report thereon dated
February 16, 2000. Our audit was made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The schedule, "Schedule III:
Real Estate and Accumulated Depreciation", as of December 31, 1999, is the
responsibility of Simon Property Group, L.P.'s management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and
is not part of the basic financial statements. The schedule has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.

Arthur Andersen LLP

Indianapolis, Indiana,
February 16, 2000.

86
<PAGE>

SCHEDULE III

SIMON PROPERTY GROUP, L.P.

REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999

(Dollars in thousands)

<TABLE>
<CAPTION>
Cost Capitalized Gross Amounts At
Subsequent to Which Carried
Initial Cost Acquisition At Close of Period
-------------------- -------------------- -----------------------------
Buildings Buildings Buildings
and and and Accumulated
Name, Location Encumbrances Land Improvements Land Improvements Land Improvements Total(1) Depreciation(2)
-------------- ------------ ------- ------------ ------ ------------ ------- ------------ -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Regional Malls
Alton Square,
Alton, IL....... $ 0 $ 154 $ 7,641 $ 0 $11,835 $ 154 $ 19,476 $ 19,630 $ 3,142
Amigoland Mall,
Brownsville, TX.. 0 1,045 4,518 0 954 1,045 5,472 6,517 1,890
Anderson Mall,
Anderson, SC.... 27,500 1,712 18,122 1,363 4,506 3,075 22,628 25,703 5,918
Arsenal Mall,
Watertown, MA... 36,871 0 62,206 0 0 0 62,206 62,206 251
Arsenal Mall
HCHIP,
Watertown, MA... 0 0 3,922 0 0 0 3,922 3,922 14
Aurora Mall,
Aurora, CO...... 0 11,400 55,692 0 1,024 11,400 56,716 68,116 2,024
Barton Creek
Square, Austin,
TX.............. 0 4,414 20,699 771 31,860 5,185 52,559 57,744 10,939
Battlefield
Mall,
Springfield,
MO.............. 92,177 4,039 29,769 3,225 37,097 7,264 66,866 74,130 14,716
Bay Park Square,
Green Bay, WI... 24,848 6,864 25,623 362 2,653 7,226 28,276 35,502 2,706
Bergen Mall,
Paramus, NJ..... 0 11,020 92,541 0 6,888 11,020 99,429 110,449 9,320
Biltmore Square,
Asheville, NC... 25,765 10,908 19,315 0 1,117 10,908 20,432 31,340 2,164
Boynton Beach
Mall, Boynton
Beach, FL....... 0 33,758 67,710 0 5,288 33,758 72,998 106,756 7,327
Brea Mall, Brea,
CA.............. 0 39,500 209,202 0 1,394 39,500 210,596 250,096 7,506
Broadway Square,
Tyler, TX....... 0 11,470 32,439 0 3,862 11,470 36,301 47,771 5,447
Brunswick
Square, East
Brunswick, NJ... 0 8,436 55,838 0 11,570 8,436 67,408 75,844 5,827
Burlington Mall,
Burlington, MA.. 0 46,600 303,618 0 717 46,600 304,335 350,935 10,910
Castleton
Square,
Indianapolis,
IN.............. 0 44,860 80,963 2,500 28,145 47,360 109,108 156,468 9,540
Century III
Mall, West
Miffin, PA...... 66,000 17,251 117,822 0 1,758 17,251 119,580 136,831 25,684
Charlottesville
Fashion Square,
Charlottesville,
VA.............. 0 0 54,738 0 1,170 0 55,908 55,908 3,743
Chautauqua Mall,
Jamestown, NY... 0 3,257 9,641 0 13,740 3,257 23,381 26,638 2,309
Cheltenham
Square,
Philadelphia,
PA.............. 34,226 14,227 43,799 0 3,553 14,227 47,352 61,579 4,801
Chesapeake
Square,
Chesapeake, VA.. 46,739 11,534 70,461 0 2,737 11,534 73,198 84,732 7,045
Cielo Vista
Mall, El Paso,
TX.............. 94,817 1,307 18,512 608 18,507 1,915 37,019 38,934 11,034
College Mall,
Bloomington,
IN.............. 53,481 1,012 16,245 722 19,465 1,734 35,710 37,444 10,114
Columbia Center,
Kennewick, WA... 42,326 27,170 58,185 0 6,080 27,170 64,265 91,435 6,328
Cordova Mall,
Pensacola, FL... 0 18,800 75,880 (158) 1,335 18,642 77,215 95,857 4,395
Cottonwood Mall,
Albuquerque,
NM.............. 0 13,145 69,173 (981) (77) 12,164 69,096 81,260 9,351
Crossroads Mall,
Omaha, NE....... 0 884 37,293 409 28,715 1,293 66,008 67,301 8,850
Crystal River
Mall, Crystal
River, FL....... 15,292 11,650 14,252 0 3,569 11,650 17,821 29,471 1,713
<CAPTION>
Date of
Name, Location Construction
-------------- --------------
<S> <C>
Regional Malls
Alton Square,
Alton, IL....... 1993 (Note 3)
Amigoland Mall,
Brownsville, TX.. 1974
Anderson Mall,
Anderson, SC.... 1972
Arsenal Mall,
Watertown, MA... 1999 (Note 4)
Arsenal Mall
HCHIP,
Watertown, MA... 1999 (Note 4)
Aurora Mall,
Aurora, CO...... 1998 (Note 4)
Barton Creek
Square, Austin,
TX.............. 1981
Battlefield
Mall,
Springfield,
MO.............. 1970
Bay Park Square,
Green Bay, WI... 1996 (Note 4)
Bergen Mall,
Paramus, NJ..... 1996 (Note 4)
Biltmore Square,
Asheville, NC... 1996 (Note 4)
Boynton Beach
Mall, Boynton
Beach, FL....... 1996 (Note 4)
Brea Mall, Brea,
CA.............. 1998 (Note 4)
Broadway Square,
Tyler, TX....... 1994 (Note 3)
Brunswick
Square, East
Brunswick, NJ... 1996 (Note 4)
Burlington Mall,
Burlington, MA.. 1998 (Note 4)
Castleton
Square,
Indianapolis,
IN.............. 1996 (Note 4)
Century III
Mall, West
Miffin, PA...... 1999 (Note 4)
Charlottesville
Fashion Square,
Charlottesville,
VA.............. 1997 (Note 4)
Chautauqua Mall,
Jamestown, NY... 1996 (Note 4)
Cheltenham
Square,
Philadelphia,
PA.............. 1996 (Note 4)
Chesapeake
Square,
Chesapeake, VA.. 1996 (Note 4 )
Cielo Vista
Mall, El Paso,
TX.............. 1974
College Mall,
Bloomington,
IN.............. 1965
Columbia Center,
Kennewick, WA... 1996 (Note 4)
Cordova Mall,
Pensacola, FL... 1998 (Note 4)
Cottonwood Mall,
Albuquerque,
NM.............. 1996
Crossroads Mall,
Omaha, NE....... 1994 (Note 3)
Crystal River
Mall, Crystal
River, FL....... 1996 (Note 4)
</TABLE>

87
<PAGE>

SIMON PROPERTY GROUP, L.P.

REAL ESTATE AND ACCUMULATED DEPRECIATION--(Continued)
December 31, 1999

(Dollars in thousands)

<TABLE>
<CAPTION>
Cost Capitalized Gross Amounts At
Subsequent to Which Carried
Initial Cost Acquisition At Close of Period
------------------- ------------------ ----------------------------
Buildings Buildings Buildings
and and and Accumulated Date of
Name, Location Encumbrances Land Improvements Land Improvements Land Improvements Total(1) Depreciation(2) Construction
-------------- ------------ ------ ------------ ----- ------------ ------ ------------ -------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DeSota Square,
Bradeston, FL... 38,880 9,380 52,716 0 4,102 9,380 56,818 66,198 5,675 1996 (Note 4)
Eastern Hills
Mall, Buffalo,
NY.............. 0 15,444 47,604 12 3,626 15,456 51,230 66,686 5,140 1996 (Note 4)
Eastland Mall,
Tulsa, OK....... 15,000 3,124 24,035 518 6,625 3,642 30,660 34,302 6,700 1986
Edison Mall,
Fort Myers, FL.. 0 11,529 107,381 0 3,803 11,529 111,184 122,713 7,117 1997 (Note4)
Fashion Mall at
Keystone at the
Crossing,
Indianapolis,
IN.............. 63,569 0 120,579 0 2,041 0 122,620 122,620 6,974 1997 (Note 4)
Forest Mall,
Fond Du Lac,
WI.............. 15,550 728 4,498 0 5,979 728 10,477 11,205 2,399 1973
Forest Village
Park,
Forestville,
MD.............. 21,850 1,212 4,625 757 4,303 1,969 8,928 10,897 2,479 1980
Fremont Mall,
Fremont, NE..... 0 26 1,280 265 3,003 291 4,283 4,574 807 1966
Golden Ring
Mall, Baltimore,
MD.............. 29,750 1,130 8,955 572 8,691 1,702 17,646 19,348 5,588 1974 (Note 3)
Great Lakes
Mall, Cleveland,
OH.............. 61,121 14,607 100,362 0 4,265 14,607 104,627 119,234 10,386 1996 (Note 4)
Greenwood Park
Mall,
Greenwood, IN... 96,236 2,607 23,500 5,275 58,683 7,882 82,183 90,065 17,666 1979
Gulf View
Square, Port
Richey, FL...... 37,064 13,690 39,997 0 7,069 13,690 47,066 60,756 4,260 1996 (Note 4)
Haywood Mall,
Greenville, SC.. 0 11,604 133,893 0 252 11,604 134,145 145,749 11,174 1999 (Note 4)
Heritage Park,
Midwest City,
OK.............. 0 598 6,213 0 2,363 598 8,576 9,174 2,804 1978
Hutchinson Mall,
Hutchinson, KS.. 15,882 1,683 18,427 0 2,998 1,683 21,425 23,108 5,147 1985
Independence
Center,
Independence, MO.. 0 5,539 45,822 0 15,864 5,539 61,686 67,225 8,017 1994 (Note 3)
Ingram Park
Mall, San
Antonio, TX..... 0 820 17,163 169 14,644 989 31,807 32,796 9,468 1979
Irvin Mall,
Irving, TX...... 0 6,737 17,479 2,533 24,468 9,270 41,947 51,217 10,991 1971
Jefferson Valley
Mall, Yorktown
Heights, NY..... 50,000 4,868 30,304 0 4,409 4,868 34,713 39,581 8,690 1983
Knoxville
Center,
Knoxville, TN... 0 5,006 21,965 3,712 34,547 8,718 56,512 65,230 8,836 1984
Lakeline Mall,
N. Austin, TX... 72,180 14,948 81,568 0 210 14,948 81,778 96,726 7,342 1999 (Note 4)
La Plaza,
McAllen, TX..... 0 2,194 9,828 7,454 14,173 9,648 24,001 33,649 3,698 1976
Lafayette
Square,
Indianapolis,
IN.............. 0 25,546 43,294 0 9,361 25,546 52,655 78,201 5,184 1996 (Note 4)
Laguna Hills
Mall, Laguna
Hills, CA....... 0 28,074 55,689 0 3,239 28,074 58,928 87,002 3,818 1997 (Note 4)
Lenox Square,
Atlanta, GA..... 0 41,900 492,411 0 1,842 41,900 494,253 536,153 17,609 1998 (Note 4)
Lima Mall, Lima,
OH.............. 18,903 7,910 35,495 0 3,733 7,910 39,228 47,138 3,819 1996 (Note 4)
Lincolnwood Town
Center,
Lincolnwood,
IL.............. 0 11,197 63,490 28 1,286 11,225 64,776 76,001 14,756 1990
Livingston Mall,
Livingston, NJ.. 0 30,200 105,250 0 438 30,200 105,688 135,888 3,763 1998 (Note 4)
Longview Mall,
Longview, TX.... 27,600 270 3,602 124 7,138 394 10,740 11,134 2,684 1978
</TABLE>

88
<PAGE>

SIMON PROPERTY GROUP, L.P.

REAL ESTATE AND ACCUMULATED DEPRECIATION--(Continued)
December 31, 1999

(Dollars in thousands)

<TABLE>
<CAPTION>
Cost Capitalized Gross Amounts At
Subsequent to Which Carried
Initial Cost Acquisition At Close of Period
------------------- ------------------ ----------------------------
Buildings Buildings Buildings
and and and Accumulated Date of
Name, Location Encumbrances Land Improvements Land Improvements Land Improvements Total(1) Depreciation(2) Construction
-------------- ------------ ------ ------------ ----- ------------ ------ ------------ -------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Machesney Park
Mall, Rockford,
IL.............. 0 614 7,438 120 4,189 734 11,627 12,361 3,879 1979
Markland Mall,
Kokomo, IN...... 0 0 7,568 0 2,763 0 10,331 10,331 2,165 1968
Mc Cain Mall, N.
Little Rock,
AR.............. 43,259 0 9,515 0 8,099 0 17,614 17,614 5,950 1973
Melbourne
Square,
Melbourne, FL... 38,869 20,552 51,110 0 4,656 20,552 55,766 76,318 5,378 1996 (Note 4)
Memorial Mall,
Sheboygan, WI... 0 175 4,881 0 853 175 5,734 5,909 1,613 1969
Menlo Park Mall,
Edison, NJ...... 0 65,684 223,252 0 5,574 65,684 228,826 294,510 14,858 1997 (Note 4)
Miami
International
Mall, Miami,
FL.............. 45,920 13,794 69,701 8,942 4,105 22,736 73,806 96,542 21,944 1996 (Note 4)
Midland Park
Mall, Midland,
TX.............. 28,000 687 9,213 0 6,533 687 15,746 16,433 4,739 1980
Miller Hill
Mall, Duluth,
MN.............. 0 2,537 18,113 0 9,208 2,537 27,321 29,858 5,470 1973
Mission Viejo
Mall, Mission
Viejo, CA....... 110,068 9,139 54,445 5,613 117,736 14,752 172,181 186,933 6,877 1996 (Note 4)
Mounds Mall,
Anderson, IN.... 0 0 2,689 0 2,291 0 4,980 4,980 2,054 1965
Muncie Mall,
Muncie, IN...... 8,294 172 5,964 52 21,231 224 27,195 27,419 4,502 1970
Nanuet Mall,
Nanuet, NY...... 0 27,700 162,993 0 991 27,700 163,984 191,684 5,877 1998 (Note 4)
North East Mall,
Hurst, TX....... 73,636 1,347 13,473 2,961 119,444 4,308 132,917 137,225 5,349 1996 (Note 4)
North Towne
Square, Toledo,
OH.............. 23,500 579 8,382 0 2,072 579 10,454 11,033 4,730 1980
Northgate Mall,
Seattle, WA..... 79,035 89,991 57,873 0 18,920 89,991 76,793 166,784 6,984 1996 (Note 4)
Northlake Mall,
Atlanta, GA..... 0 33,400 98,035 0 149 33,400 98,184 131,584 3,502 1998 (Note 4)
Northwoods Mall,
Peoria, IL...... 0 1,203 12,779 1,449 26,976 2,652 39,755 42,407 9,719 1983 (Note 3)
Oak Court Mall,
Memphis, TN..... 0 15,673 57,304 0 1,666 15,673 58,970 74,643 3,901 1997 (Note 4)
Orange Park
Mall,
Jacksonville,
FL.............. 0 13,345 65,173 0 14,769 13,345 79,942 93,287 11,030 1994 (Note 3)
Orland Square,
Orland Park,
IL.............. 50,000 36,770 129,906 0 2,098 36,770 132,004 168,774 8,206 1997 (Note 4)
Paddock Mall,
Ocala, FL....... 29,478 20,420 30,490 0 4,743 20,420 35,233 55,653 3,366 1996 (Note 4)
Pain Beach Mall,
West Palm
Beach, FL....... 49,419 12,549 112,741 0 20,933 12,549 133,674 146,223 15,092 1998 (Note 4)
Phipps Plaza,
Atlanta, GA..... 0 19,200 210,783 0 1,783 19,200 212,566 231,766 7,583 1998 (Note 4)
Port Charlotte
Town Center,
Port Charlotte,
FL.............. 52,099 5,561 59,381 0 8,769 5,561 68,150 73,711 6,003 1996 (Note 4)
Prien Lake Mall,
Lake Charles,
LA.............. 0 1,893 2,829 3,091 35,256 4,984 38,085 43,069 4,153 1972
Raleigh Springs
Mall, Memphis,
TN.............. 0 9,137 28,604 0 7,014 9,137 35,618 44,755 3,068 1996 (Note 4)
Randall Park
Mall, Cleveland,
OH.............. 40,000 4,421 52,456 0 18,073 4,421 70,529 74,950 6,019 1996 (Note 4)
Richardson
Square, Dallas,
TX.............. 0 4,867 6,329 1,075 11,338 5,942 17,667 23,609 1,679 1996 (Note 4)
Richmond Towne
Square,
Cleveland, OH... 45,898 2,666 12,112 0 52,961 2,666 65,073 67,739 2,416 1996 (Note 4)
</TABLE>

89
<PAGE>

SIMON PROPERTY GROUP, L.P.

REAL ESTATE AND ACCUMULATED DEPRECIATION--(Continued)
December 31, 1999

(Dollars in thousands)

<TABLE>
<CAPTION>
Cost Capitalized Gross Amounts At
Subsequent to Which Carried
Initial Cost Acquisition At Close of Period
-------------------- ------------------- -----------------------------
Buildings Buildings Buildings
and and and Accumulated
Name, Location Encumbrances Land Improvements Land Improvements Land Improvements Total(1) Depreciation(2)
-------------- ------------ ------- ------------ ----- ------------ ------- ------------ -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Richmond Square,
Richmond, IN.... 0 3,410 11,343 0 9,037 3,410 20,380 23,790 2,055
River Oaks
Center, Calumet
City, IL........ 32,500 30,884 101,224 0 2,064 30,884 103,288 134,172 6,358
Rockaway
Townsquare,
Rockaway, NJ.... 0 50,500 218,557 0 2,479 50,500 221,036 271,536 7,843
Rolling Oaks
Mall, North San
Antonio, TX..... 0 2,647 38,609 (70) 1,788 2,577 40,397 42,974 10,877
Roosevelt Field,
Garden City,
NY.............. 0 165,006 702,008 2,096 3,657 167,102 705,665 872,767 25,156
Ross Park Mall,
Pittsburgh, PA.. 0 14,557 50,995 9,617 48,819 24,174 99,814 123,988 13,370
Santa Rosa
Plaza, Santa
Rosa, CA........ 0 10,400 87,864 0 815 10,400 88,679 99,079 3,186
South Hills
Village,
Pittsburgh, PA.. 0 23,453 125,858 0 708 23,453 126,566 150,019 7,629
South Park Mall,
Shreveport, LA.. 26,384 855 13,684 74 2,806 929 16,490 17,419 5,417
South Shore
Plaza,
Braintree, MA... 0 101,200 301,495 0 1,339 101,200 302,834 404,034 10,860
Southern Park
Mall,
Youngstown, OH.. 0 16,982 77,774 97 16,294 17,079 94,068 111,147 9,307
Southgate Mall,
Yuma, AZ........ 0 1,817 7,974 0 3,415 1,817 11,389 13,206 2,720
St Charles Towne
Center
Waldorf, MD..... 28,780 9,329 52,974 1,180 10,833 10,509 63,807 74,316 15,715
Summit Mall,
Akron, OH....... 0 23,742 42,769 0 13,191 23,742 55,960 79,702 5,914
Sunland Park
Mall, El Paso,
TX.............. 39,125 2,896 28,900 0 4,682 2,896 33,582 36,478 9,568
Tacoma Mall,
Tacoma, WA...... 92,474 39,263 125,826 0 10,289 39,263 136,115 175,378 13,015
Tippecanoe Mall,
Lafayette, IN... 61,330 4,187 8,474 5,517 33,545 9,704 42,019 51,723 11,774
Town Center at
Boca Raton, Boca
Raton, FL....... 0 64,200 307,511 0 17,927 64,200 325,438 389,638 10,560
Towne East
Square, Wichita,
KS.............. 79,756 9,495 18,479 2,042 11,626 11,537 30,105 41,642 9,189
Towne West
Square, Wichita,
KS.............. 0 972 21,203 76 7,947 1,048 29,150 30,198 8,264
Treasure Coast
Square, Jenson
Beach, FL....... 64,419 11,124 73,108 3,067 10,479 14,191 83,587 97,778 7,560
Tyrone Square,
St. Petersburg,
FL.............. 0 15,638 120,962 0 12,662 15,638 133,624 149,262 12,477
University Mall,
Little Rock,
AR.............. 0 123 17,411 0 1,117 123 18,528 18,651 5,488
University Mall,
Pensacola, FL... 0 4,741 26,657 0 3,506 4,741 30,163 34,904 4,648
University Park
Mall, South
Bend, IN........ 59,500 15,105 61,466 0 9,063 15,105 70,529 85,634 32,852
<CAPTION>
Date of
Name, Location Construction
-------------- -------------
<S> <C>
Richmond Square,
Richmond, IN.... 1996 (Note 4)
River Oaks
Center, Calumet
City, IL........ 1997 (Note 4)
Rockaway
Townsquare,
Rockaway, NJ.... 1998 (Note 4)
Rolling Oaks
Mall, North San
Antonio, TX..... 1998 (Note 4)
Roosevelt Field,
Garden City,
NY.............. 1998 (Note 4)
Ross Park Mall,
Pittsburgh, PA.. 1996 (Note 4)
Santa Rosa
Plaza, Santa
Rosa, CA........ 1998 (Note 4)
South Hills
Village,
Pittsburgh, PA.. 1997 (Note 4)
South Park Mall,
Shreveport, LA.. 1975
South Shore
Plaza,
Braintree, MA... 1998 (Note 4)
Southern Park
Mall,
Youngstown, OH.. 1996 (Note 4)
Southgate Mall,
Yuma, AZ........ 1988 (Note 3)
St Charles Towne
Center
Waldorf, MD..... 1990
Summit Mall,
Akron, OH....... 1996 (Note 4)
Sunland Park
Mall, El Paso,
TX.............. 1988
Tacoma Mall,
Tacoma, WA...... 1996 (Note 4)
Tippecanoe Mall,
Lafayette, IN... 1973
Town Center at
Boca Raton, Boca
Raton, FL....... 1998 (Note 4)
Towne East
Square, Wichita,
KS.............. 1975
Towne West
Square, Wichita,
KS.............. 1980
Treasure Coast
Square, Jenson
Beach, FL....... 1996 (Note 4)
Tyrone Square,
St. Petersburg,
FL.............. 1996 (Note 4)
University Mall,
Little Rock,
AR.............. 1967
University Mall,
Pensacola, FL... 1994 (Note 3)
University Park
Mall, South
Bend, IN........ 1996 (Note 4)
</TABLE>

90
<PAGE>

SIMON PROPERTY GROUP, L.P.

REAL ESTATE AND ACCUMULATED DEPRECIATION--(Continued)
December 31, 1999

(Dollars in thousands)

91
<PAGE>

SIMON PROPERTY GROUP, L.P.

REAL ESTATE AND ACCUMULATED DEPRECIATION--(Continued)
December 31, 1999

(Dollars in thousands)

<TABLE>
<CAPTION>
Cost Capitalized Gross Amounts At
Subsequent to Which Carried
Initial Cost Acquisition At Close of Period
------------------- ------------------- ----------------------------
Buildings Buildings Buildings
and and and Accumulated Date of
Name, Location Encumbrances Land Improvements Land Improvements Land Improvements Total(1) Depreciation(2) Construction
-------------- ------------ ------ ------------ ----- ------------ ------ ------------ -------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Glen Burnie
Mall, Glen
Burnie, MD...... 0 7,422 22,778 0 2,595 7,422 25,373 32,795 2,535 1996 (Note 4)
Great Lakes
Plaza,
Cleveland, OH... 0 1,028 2,025 0 3,366 1,028 5,391 6,419 663 1996 (Note 4)
Greenwood Plus,
Greenwood, IN... 0 1,350 1,792 0 3,757 1,350 5,549 6,899 950 1979 (Note 3)
Griffith Park
Plaza, Griffith,
IN.............. 0 0 2,412 0 135 0 2,547 2,547 792 1979
Grove at
Lakeland Square,
The, Lakeland,
FL.............. 3,750 5,237 6,016 0 1,031 5,237 7,047 12,284 791 1996 (Note 4)
Hammond Square,
Sandy Springs,
GA.............. 0 0 27 0 1 0 28 28 9 1974
Highland Lakes
Center, Orlando,
FL.............. 14,377 13,951 18,490 0 454 13,951 18,944 32,895 1,934 1996 (Note 4)
Ingram Plaza,
San Antonio,
TX.............. 0 421 1,802 4 21 425 1,823 2,248 670 1980
Keystone
Shoppes,
Indianapolis,
IN.............. 0 0 4,232 0 (7) 0 4,225 4,225 241 1997 (Note 4)
Knoxville
Commons,
Knoxville, TN... 0 3,731 5,345 0 1,787 3,731 7,132 10,863 1,355 1987
Lake Plaza,
Waukegan, IL.... 0 2,812 6,420 0 364 2,812 6,784 9,596 1,088 1986
Lake View Plaza,
Orland Park,
IL.............. 21,785 4,775 17,586 0 2,115 4,775 19,701 24,476 2,953 1986
Lakeline Plaza,
Austin, TX...... 23,883 5,929 25,732 0 5,696 5,929 31,428 37,357 1,208 1999 (Note 4)
Lima Center,
Lima, OH........ 0 1,808 5,151 0 123 1,808 5,274 7,082 509 1996 (Note)
Lincoln
Crossing,
O'Fallon, IL.... 3,298 1,047 2,692 0 192 1,047 2,884 3,931 449 1990
Mainland
Crossing,
Galveston, TX... 1,603 1,609 1,737 0 221 1,609 1,958 3,567 220 1996 (Note 4)
Markland Plaza,
Kokomo, IN...... 10,000 210 1,258 0 453 210 1,711 1,921 613 1974
Martinsville
Plaza,
Martinsville,
VA.............. 0 0 584 0 50 0 634 634 400 1967
Marwood Plaza,
Indianapolis,
IN.............. 0 52 3,597 0 107 52 3,704 3,756 842 1962
Matteson Plaza,
Matteson, IL.... 9,593 1,830 9,737 0 1,986 1,830 11,723 13,553 2,033 1988
Memorial Plaza,
Sheboygan, WI... 0 250 436 0 857 250 1,293 1,543 407 1966
Mounds Mall
Cinema,
Anderson, IN.... 0 88 158 0 1 88 159 247 60 1974
Muncie Plaza,
Muncie, IN...... 0 626 10,626 (163) (5) 463 10,621 11,084 644 1998
New Castle
Plaza, New
Castle, IN...... 0 128 1,621 0 645 128 2,266 2,394 725 1966
Shops at North
East Plaza, The
Hurst, TX....... 0 8,988 2,198 3,553 25,979 12,541 28,177 40,718 164
North Ridge
Plaza, Joliet,
IL.............. 0 2,831 7,699 0 451 2,831 8,150 10,981 1,442 1985
North Riverside
Park Plaza, N.
Riverside, IL... 7,386 1,062 2,490 0 644 1,062 3,134 4,196 983 1977
Northland Plaza,
Columbus, OH.... 0 4,490 8,893 0 1,034 4,490 9,927 14,417 1,523 1988
Northwood Plaza,
Fort Wayne, IN.. 0 302 2,922 0 584 302 3,506 3,808 1,015 1974
Park Plaza,
Hopkinsville,
KY.............. 0 300 1,572 0 211 300 1,783 2,083 457 1968
Regency Plaza,
St. Charles,
MO.............. 4,497 616 4,963 0 151 616 5,114 5,730 793 1988
</TABLE>

92
<PAGE>

SIMON PROPERTY GROUP, L.P.

REAL ESTATE AND ACCUMULATED DEPRECIATION--(Continued)
December 31, 1999

(Dollars in thousands)

<TABLE>
<CAPTION>
Cost Capitalized Gross Amounts At
Subsequent to Which Carried
Initial Cost Acquisition At Close of Period
----------------------- --------------------- -----------------------------------
Buildings Buildings Buildings
and and and Accumulated
Name, Location Encumbrances Land improvements Land Improvements Land Improvements Total(1) Depreciation(2)
-------------- ------------ ---------- ------------ -------- ------------ ---------- ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Rockaway
Convenience
Center,
Rockaway, NJ.... 0 2,900 12,500 0 0 2,900 12,500 15,400 446
St. Charles
Towne Plaza,
Waldorf, MD..... 0 8,779 18,993 0 183 8,779 19,176 27,955 3,369
Teal Plaza,
Lafayette, IN... 0 99 878 0 2,957 99 3,835 3,934 450
Terrace at the
Florida Mall,
Orlando, FL..... 4,688 5,647 4,126 0 1,025 5,647 5,151 10,798 710
Tippecanoe
Plaza,
Lafayette, IN... 0 265 440 305 4,967 570 5,407 5,977 1,106
University
Center, South
Bend, IN........ 0 2,388 5,214 0 339 2,388 5,553 7,941 4,796
Wabash Village,
West Lafayette,
IN.............. 0 0 976 0 204 0 1,180 1,180 348
Washington
Plaza,
Indianapolis,
IN.............. 0 941 1,697 0 167 941 1,864 2,805 976
West Ridge
Plaza, Topeka,
KS.............. 44,288 1,491 4,620 0 614 1,491 5,234 6,725 895
White Oaks
Plaza,
Springfield,
IL.............. 17,688 3,265 14,267 0 341 3,265 14,608 17,873 2,328
Wichita Mall,
Wichita, KS..... 0 0 4,535 0 1,746 0 6,281 6,281 2,014
Wood Plaza, Fort
Dodge, LA....... 0 45 380 0 867 45 1,247 1,292 333
Specialty Recall
Centers
The Forum Shops
at Caesars,
Las Vegas, NV... 175,000 0 72,866 0 59,130 0 131,996 131,996 21,738
Trolley Square,
Salt Lake City,
UT.............. 27,141 4,899 27,539 363 7,299 5,262 34,838 40,100 7,138
Office, Mixed-
Use Properties
and Other
Lenox Building,
Atlanta, GA..... 0 0 57,778 0 332 0 58,110 58,110 2,096
Net Lease
Properties,
Various......... 0 10,363 0 0 0 10,363 0 10,363 0
New Orleans
Center/CNG
Tower,
New Orleans,
LA.............. 0 3,679 41,231 0 6,223 3,679 47,454 51,133 4,249
O'Hare
International
Center,
Rosemont, IL.... 0 125 60,287 1 9,017 126 69,304 69,430 20,312
Riverway,
Rosemont, IL.... 0 8,739 129,175 16 7,121 8,755 136,296 145,051 39,949
Development
Projects
Bowie Town
Center, Bowie,
MD.............. 0 6,000 570 0 1,648 6,000 2,218 8,218 0
Indian River
Peripheral Vero
Beach, FL....... 0 790 57 0 0 790 57 847 0
Victoria Ward,
Honolulu, HI.... 0 0 1,400 0 729 0 2,129 2,129 0
Waterford Lakes,
Orlando, FL..... 30,336 0 1,114 9,662 46,704 9,662 47,818 57,480 137
Land, Garland,
TX.............. 0 0 0 12,002 0 12,002 0 12,002 0
Other........... 0 0 314 0 1,128 0 1,442 1,442 0
Corporate,
Indianapolis,
IN.............. 0 2,745 500 280 2,640 3,025 3,140 6,165 2,294
---------- ---------- ---------- -------- ---------- ---------- ----------- ----------- ----------
$2,995,561 $1,994,179 $8,874,693 $114,917 $1,582,281 $2,109,096 $10,456,974 $12,566,070 $1,066,200
========== ========== ========== ======== ========== ========== =========== =========== ==========
<CAPTION>
Date of
Name, Location Construction
-------------- -------------
<S> <C>
Rockaway
Convenience
Center,
Rockaway, NJ.... 1998 (Note 4)
St. Charles
Towne Plaza,
Waldorf, MD..... 1987
Teal Plaza,
Lafayette, IN... 1962
Terrace at the
Florida Mall,
Orlando, FL..... 1996 (Note 4)
Tippecanoe
Plaza,
Lafayette, IN... 1974
University
Center, South
Bend, IN........ 1996 (Note 4)
Wabash Village,
West Lafayette,
IN.............. 1970
Washington
Plaza,
Indianapolis,
IN.............. 1996 (Note 4)
West Ridge
Plaza, Topeka,
KS.............. 1988
White Oaks
Plaza,
Springfield,
IL.............. 1986
Wichita Mall,
Wichita, KS..... 1969
Wood Plaza, Fort
Dodge, LA....... 1968
Specialty Recall
Centers
The Forum Shops
at Caesars,
Las Vegas, NV... 1992
Trolley Square,
Salt Lake City,
UT.............. 1986 (Note 3)
Office, Mixed-
Use Properties
and Other
Lenox Building,
Atlanta, GA..... 1998 (Note 4)
Net Lease
Properties,
Various.........
New Orleans
Center/CNG
Tower,
New Orleans,
LA.............. 1996 (Note 4)
O'Hare
International
Center,
Rosemont, IL.... 1988
Riverway,
Rosemont, IL.... 1991
Development
Projects
Bowie Town
Center, Bowie,
MD..............
Indian River
Peripheral Vero
Beach, FL....... 1996 (Note 4)
Victoria Ward,
Honolulu, HI....
Waterford Lakes,
Orlando, FL.....
Land, Garland,
TX..............
Other...........
Corporate,
Indianapolis,
IN..............
</TABLE>

93
<PAGE>

SIMON PROPERTY GROUP, L.P.

NOTES TO SCHEDULE III AS OF DECEMBER 31, 1999
(Dollars in thousands)

(1) Reconciliation of Real Estate Properties:

The changes in real estate assets for the years ended December 31, 1999,
1998 and 1997 are as follows:

<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- ----------
<S> <C> <C> <C>
Balance, beginning of year................ $11,603,771 $ 6,814,065 $5,273,465
Acquisitions.............................. 475,166 4,676,634 1,238,909
Improvements.............................. 544,956 356,829 312,558
Disposals................................. (57,823) (126,454) (10,867)
Deconsolidation........................... -- (117,303) --
----------- ----------- ----------
Balance, close of year.................... $12,566,070 $11,603,771 $6,814,065
=========== =========== ==========
</TABLE>

The unaudited aggregate cost for federal income tax purposes as of December
31, 1999 was $8,585,753.

(2) Reconciliation of Accumulated Depreciation:

The changes in accumulated depreciation and amortization for the years ended
December 31, 1999, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
1999 1998 1997
---------- -------- --------
<S> <C> <C> <C>
Balance, beginning of year...................... $ 688,955 $448,353 $270,637
Acquisitions.................................... 32,793 25,839 --
Depreciation expense............................ 351,473 246,934 183,357
Disposals....................................... (7,021) (32,171) (5,641)
---------- -------- --------
Balance, close of year.......................... $1,066,200 $688,955 $448,353
========== ======== ========
</TABLE>

Depreciation of the SPG Operating Partnership's investment in buildings and
improvements reflected in the statements of operations is calculated over the
estimated original lives of the assets as follows:

Buildings and Improvements--typically 35 years
Tenant Inducements--shorter of lease term or useful life

(3) Initial cost represents net book value at December 20, 1993.

(4) Not developed/constructed by the SPG Operating Partnership or its
predecessors. The date of construction represents acquisition date.

94
<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibits Page
- -------- ----
<S> <C> <C>
2.1 Agreement and Plan of Merger among SPG, Sub and DRC, dated as of March 26,
1996, as amended (included as Annex I to the Prospectus/Joint Proxy
Statement filed as part of Form S-4 of Simon Property Group, Inc.
(Registration No. 333-06933)).

2.2 Amendment and Supplement to Offer to Purchase for Cash all Outstanding
Beneficial Interests in The Retail Property Trust (incorporated by
reference to Exhibit 99.1 of the Form 8-K filed by the SPG Operating
Partnership on September 12, 1997).

2.3 Agreement and Plan of Merger among SDG, CPI and CRC (incorporated by
reference to Exhibit 10.1 in the Form 8-K filed by SDG on February 24,
1998).

2.4 Agreement and Plan of Merger among SPG Properties, Inc. and SD Property
Group, Inc. 98

3.1(a) Amended and Restated Charter

3.2(a) Amended and Restated Bylaws, incorporated by reference to Annex VIII of
the Company's Schedule 14A on May 8, 1996.

3.3(a) Articles Supplementary with respect to the Series B Preferred Stock of the
Company to the Amended and Restated Charter.

3.4 Articles Supplementary with respect to the Series C Preferred Stock of the
Company to the Amended and Restated Charter (incorporated by reference to
Exhibit 4.1 of the Form 8-K filed by SPG Properties on July 8, 1997).

3.5 Articles Supplementary with respect to the conversion of the Series A
Preferred Stock of the SPG Properties into Common Stock (incorporated by
reference to Exhibit 3.5 of SPG Properties' 1997 Form 10-K).

10.1(b) Noncompetition Agreement dated as of December 1, 1993 between the Company
and each of Melvin Simon and Herbert Simon (Previously filed as Exhibit
10.3).

10.2(b) Noncompetition Agreement dated as of December 1, 1993 between the Company
and David Simon (Previously filed as Exhibit 10.4).

10.3(b) Restriction and Noncompetition Agreement dated as of December 1, 1993
among the Company and the Management Companies (Previously filed as
Exhibit 10.5).

21.1 List of Subsidiaries of SPG Properties. 96

23.1 Consent of Arthur Andersen LLP. 97
</TABLE>
- --------
(a) Incorporated by reference to the exhibit with the same number of SPG
Properties' 1996 Form 10-K.
(b) Incorporated by reference to the exhibit indicated of SPG Properties' 1993
Form 10-K.

<PAGE>

EXHIBIT 2.4

AGREEMENT OF MERGER

This Agreement of Merger is made as of January 27, 2000, by and between SPG
Properties, Inc., a Maryland corporation ("SPG"), and SD Property Group, Inc.,
an Ohio corporation ("SD").

Recitals

1. Each of the Boards of Directors of the parties hereto deem it advisable
that SD merge with and into SPG pursuant to Section 3-106 of the Maryland
General Corporation Law and Section 1701.80 of the Ohio General Corporation
Law, on the terms and conditions hereof (the "Merger")

Agreement

In consideration of the premises and mutual covenants set forth herein, the
parties hereto agree as follows:

1. Effective Time. The Merger shall be effective at the time and on the
date set forth in the Certificate of Merger to be filed with the State of Ohio
and in the Articles of Merger to be filed with the Maryland State Department
of Assessments and Taxation (the "Effective Time").

2. Effects of Merger. At the Effective Time, SD shall be merged with and
into SPG, and SD shall be deemed liquidated pursuant to Section 332 of the
Internal Revenue Code of 1986, as amended. SPG shall continue to be governed
by the laws of the State of Maryland. In addition, the Merger shall have such
other effects as are specified by applicable law.

3. Cancellation and Conversion of Shares. At the Effective Time, each of
the issued and outstanding shares of common stock of SD that are owned by SPG,
by virtue of the Merger and without any action on the part of the holder
thereof, shall be extinguished and canceled automatically, without any payment
or other distribution in respect thereof. At the Effective Time, each of the
issued and outstanding shares of common stock of SD that are owned by holders
other than SPG, by virtue of the Merger and without any action on the part of
the holder thereof, automatically shall be converted into and become the right
to receive the "Merger Consideration." The Merger Consideration shall be in
the amount of One Thousand and No/100 Dollars ($1,000.00).

4. Shares Held in Treasury. At the Effective Time, all shares of common
stock of SD held in the treasury of SD, if any, shall be canceled, without any
payment or other distribution in respect thereof.

5. Capital Stock of SD. The authorized capital stock of SD consists of
176,850,000 shares of common stock, of which 1,100,102 shares are issued and
outstanding, and 10,000,000 shares of preferred stock, of which no shares are
issued and outstanding. Of such shares of common stock of SD, 1,100,000 are
owned of record and beneficially by SPG.

6. Principal Office. The principal office of SPG in Maryland is located at
Corporation Trust, Inc., 300 East Lombard Street, Baltimore, Maryland 21202.

7. States of Constituent Corporations. SPG is a Maryland corporation. SD is
an Ohio corporation.

8. Appointment of Agent for Service. SPG agrees that it may be served with
process in the State of Ohio in any proceeding in the state of Ohio to enforce
against SPG any obligations of SD, or to enforce the rights of a dissenting
shareholder of SD, and hereby irrevocably appoints the Secretary of State of
the State of Ohio as its agent to accept service of process in any such suit
or other proceedings. It is requested that the Secretary of

98
<PAGE>

State of the State of Ohio mail a copy of any such process to the following
address:

SPG Properties, Inc.
115 West Washington Street
Indianapolis, Indiana 46204
Attention: General Counsel

9. SPG as Foreign Corporation in Ohio. SPG, which was qualified as a foreign
corporation in Ohio on December 1, 1993, desires to continue to transact
business in Ohio as a foreign corporation after the Merger.

10. Termination. Subject to applicable law, this Agreement of Merger may be
amended, modified, supplemented or abandoned by mutual consent of the parties
hereto, at any time prior to the filing of a Certificate of merger with the
State of Ohio and the filing of Articles of Merger with the Maryland State
Department of Assessments and Taxation.

11. Counterparts. This Agreement of Merger may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one agreement.

12. Governing Law. This Agreement of Merger shall be governed in all
respects, including, but not limited to, validity, interpretation, effect and
performance, by the internal laws of the State of Maryland without regard to
the principles of conflicts of law thereof, except to the extent that Ohio law
may apply to SD or the obligations of SD hereunder.

13. Section Headings. The section headings in this Agreement of Merger have
been inserted for convenience of reference only and shall not affect the
meaning of interpretation of this Agreement.

99
<PAGE>

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement of
Merger to be executed on its behalf.

SPG PROPERTIES, INC.

/s/ Randolph L. Foxworthy,
By:__________________________________
Randolph L. Foxworthy,
Executive Vice President

SD PROPERTY GROUP, INC.

/s/ Randolph L. Foxworthy,
By:__________________________________
Randolph L. Foxworthy,
Executive Vice President

100

<PAGE>

EXHIBIT 21.1

LIST OF SUBSIDIARIES OF THE REGISTRANT

<TABLE>
<CAPTION>
Subsidiary Jurisdiction
---------- ------------
<S> <C>
Simon Property Group, L.P.(1)................................... Delaware
</TABLE>
- --------
(1) As of December 31, 1999, the Registrant held a noncontrolling 48.0%
ownership interest in Simon Property Group, L.P.

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of
our reports included in this Form 10-K, into SPG Properties, Inc.'s (formerly
Simon DeBartolo Group, Inc.) previously filed Registration Statement File No.
333-43681.

Arthur Andersen LLP

Indianapolis, Indiana,
March 27, 2000.

<PAGE>

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,072,186<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
339,597
<COMMON> 12
<OTHER-SE> 1,732,577
<TOTAL-LIABILITY-AND-EQUITY> 2,072,186
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 137,764
<INCOME-TAX> 0
<INCOME-CONTINUING> 137,764
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 137,764
<EPS-BASIC> 0<F2>
<EPS-DILUTED> 0<F2>
<FN>
<F1>The Registrant's sole asset is an equity investment in Simon Property Group,
L.P
<F2>Because substantially all of the Registrant's common stock is held by an
affiliate, Simon Property Group, Inc., the Registrant does not report earnings
per share.
</FN>

</TABLE>