<PAGE> 1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): Commission File Number:
- ----------------------------------------------- -----------------------
September 30, 1997 1-12994
THE MILLS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-1802283
------------ ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1300 Wilson Boulevard, Suite 400, Arlington, Virginia 22209
-----------------------------------------------------------
(Address of principal executive offices - zip code)
(703)526-5000
-------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
(former name or former address, if changed since last report)
Not Applicable
- --------------------------------------------------------------------------------
<PAGE> 2
THE MILLS CORPORATION
FORM 8-K
INDEX
-----
ITEM 5. OTHER EVENTS
The Registrant made available additional operational information
concerning the Registrant, The Mills Corporation, and the properties
owned or managed by it as of September 30, 1997, in the form of a
Supplemental Information Package, a copy of which is included as an
exhibit to this filing. The Supplemental Information package is
available upon request as specified therein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements
NONE.
<TABLE>
<CAPTION>
Exhibits:
Page Number in
Exhibit No. Description Filing
- ------------ ----------- ------
<S> <C> <C>
99.1 Supplemental Information as 4
of September 30, 1997
</TABLE>
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated: January 8, 1998
THE MILLS CORPORATION
By: /s/ Kenneth R. Parent
-------------------------------
Kenneth R. Parent
Senior Vice President,
Chief Financial Officer, and
Treasurer (Principal Financial
and Accounting Officer)
<PAGE> 1
THE MILLS CORPORATION
SUPPLEMENTAL INFORMATION
TABLE OF CONTENTS
AS OF SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
INFORMATION PAGE
------------ ----
<S> <C>
Overview 5-6
Summary of Properties 7-8
Supplemental Financial Data 9
Property Operating Income 10-13
Occupancy Analysis 14
Lease Expiration Schedule 15-16
Rental Rate Analysis 17
Summary of Outstanding Consolidated Indebtedness 18
Mills Gross Sales 19
Capital Expenditures 20-22
</TABLE>
<PAGE> 2
THE MILLS CORPORATION
OVERVIEW
THE COMPANY
The Mills Corporation (the "Company") is a fully integrated, self-managed real
estate investment trust ("REIT") .
The Company, which conducts all of its business through The Mills Limited
Partnership ("the Operating Partnership"), in which it owns, as of September
30, 1997, a 1% interest as the sole general partner and a 57.9% interest as a
limited partner. The Company, through the Operating Partnership, is engaged
primarily in the ownership, development, redevelopment, leasing, acquisition,
expansion, and management of super-regional, value and entertainment-oriented
outlet malls (the "Mills") and community shopping centers (the "Community
Centers"). As of September 30, 1997, the Operating Partnership owns or holds
an interest in the following operating properties:
<TABLE>
<CAPTION>
Mills Location
----- --------
<S> <C>
Franklin Mills Philadelphia, PA
Gurnee Mills Gurnee, IL (Chicago)
Potomac Mills Woodbridge, VA (Washington, DC)
Sawgrass Mills Sunrise, FL (Ft. Lauderdale)
Ontario Mills Ontario, CA (Los Angeles)
Community Centers Location
----------------- --------
Butterfield Plaza Downers Grove, IL
Coopers Plaza Voorhees, NJ
Crosswinds Center St. Petersburg, FL
Fashion Place Columbia, SC
Germantown Commons Shopping Center Germantown, MD
Gwinnett Marketfair Duluth, GA
Liberty Plaza Philadelphia, PA
Montgomery Village Off-Price Center Gaithersburg, MD
Mount Prospect Plaza Mount Prospect, IL
West Falls Church Outlet Center Falls Church, VA
Western Hills Plaza Cincinnati, OH
</TABLE>
In addition to the operating properties, the Company is actively involved in
the development of a number of new Mills, including Grapevine Mills (Dallas, TX
- -project opened October 30, 1997), Arizona Mills (Tempe, AZ - opened November
20, 1997), Mills City at Orange (Orange, California), Katy Mills (Houston,
TX), Meadowland Mills (Carlstadt, NJ), Concord Mills (Charlotte, NC),
Candlestick Mills (San Francisco, CA), and Opry Mills (Nashville, TN).
PURPOSE OF FILING
The purpose of this supplemental information package is to provide supplemental
information regarding the operations, assets and liabilities as of September
30, 1997 for the Company and Operating Partnership.
5
<PAGE> 3
THE MILLS CORPORATION
OVERVIEW
CAUTIONARY STATEMENT
Certain matters discussed in this form 8-K and the information incorporated by
reference herein contain "forward-looking statements" for purposes of Section
27A of the Securities Act of 1933, as amended (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") relating to, without limitation, future economic performance, plans and
objectives of management for future operation and projections of revenue and
other financial items, demographic projections and federal income tax
considerations, which can be identified by the use of forward-looking
terminology such as "may", "will", "except", "anticipate", "estimate" or
"continue" or the negative thereof or other variations thereon or comparable
terminology. Such forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
described in such forward-looking statements.
6
<PAGE> 4
THE MILLS CORPORATION
SUMMARY OF PROPERTIES
The following table sets forth certain information with respect to the
Properties and the Mills under development as of September 30, 1997:
<TABLE>
<CAPTION>
1996
Approx. No. of Speciality
Metropolitan Year GLA Percent Anchor Store Sales
Name/Location Area Serviced Opened (Sq. Ft.) (1) Leased (2) Stores (3) Per Sq. Ft.
- --------------------------- ------------- ------ ------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
MILLS
Potomac Mills........... Washington D.C./ 1985 1,638,042 95% 17 $ 289
Woodbridge, VA Baltimore
Franklin Mills ......... Philadelphia/ 1989 1,661,279 93% 18 254
Philadelphia, PA Wilmington
Sawgrass Mills.......... Fort Lauderdale, FL/ 1990 1,878,577 98% 21 407
Sunrise, FL Miami/Palm Beach
Gurnee Mills............ Chicago/Milwaukee 1991 1,517,409 94% 15 252
Gurnee, IL
Ontario Mills............ Los Angeles 1996 1,329,775 (4) 97% 17 N/A (5)
Ontario, CA
------------ --------
MILLS TOTALS/WEIGHTED AVERAGES..................... 8,025,082 95% 88 $ 307 (5)
============ ========
COMMUNITY CENTERS (11 CENTERS) 2,220,077 88% 30 184
============ ========
</TABLE>
(1) Includes 959,923 square feet of GLA owned by certain anchor store tenant as
follows: Potomac Mills-80,000 square feet of GLA; Franklin Mills-208,602
square feet of GLA; Sawgrass Mills-281,774 square feet of GLA; Gurnee
Mills-250,806 square feet of GLA; Liberty Plaza - 13,741 square feet of GLA
and Ontario Mills - 125,000 square feet of GLA.
(2) Percent Leased is defined as all space leased and for which rent is being
paid as of September 30, 1997, excluding tenants with leases having a term
of less than 1 year plus GLA owned by anchor store tenants.
(3) Anchor stores include all stores occupying more than 20,000 square feet and
tenant owned anchors described in footnote (1).
(4) Ontario Mills will contain approximately 1.7 million square feet of GLA,
including GLA owned by certain anchor store tenants, upon completion.
(5) 1996 Sales Per Square Foot information is not available for Ontario Mills
which commenced business in November 1996.
7
<PAGE> 5
THE MILLS CORPORATION
SUMMARY OF PROPERTIES
MILLS UNDER DEVELOPMENT
<TABLE>
<CAPTION>
Actual/
Anticipated Anticipated Approx.
Metropolitan Construction Opening GLA
Name/Location Area Serviced Start Date (1) Date (1) (Sq. Ft.)
- ------------------------ -------------------- -------------- ------------ ------------
<S> <C> <C> <C>
Grapevine Mills Dallas/Fort Worth 3rd Q '96 4th Q '97 (3) 1,500,000
Grapevine, TX
Arizona Mills Phoenix 3rd Q '96 4th Q '97 (3) 1,200,000
Tempe, AZ
Mills City at Orange Los Angeles/ 2nd Q '97 4th Q '98 800,000
Orange, CA Orange County
Sawgrass Phase III Expansion Fort Lauderdale, FL/ 4th Q '97 4th Q '98 300,000
Sunrise, FL Miami/Palm Beach
Katy Mills Houston 1998 1999 1,600,000
Houston, TX
Concord Mills Charlotte 1998 1999 1,400,000
Concord, NC
Opry Mills Nashville 1998 (6) 1,100,000
Nashville, TN
Candlestick Mills San Francisco 1999 (6) 1,400,000
San Francisco, CA
Meadowlands Mills New York City/ 1999 (6) 1,700,000
Carlstadt, NJ Northern New Jersey
<CAPTION>
Estimated Anchor
Aggregate Store
Company Project Tenant
Name/Location Ownership Cost (2) Commitments
- ------------------------ --------- ---------- -----------
(millions)
<S> <C> <C> <C>
Grapevine Mills 37.5% 216 18
Grapevine, TX
Arizona Mills 36.8% 188 16
Tempe, AZ
Mills City at Orange 50.0% 181 7
Orange, CA
Sawgrass Phase III Expansion 50.0% 65 3
Sunrise, FL
Katy Mills 75.0% (4) 200 4
Houston, TX
Concord Mills 50.0% (4) 220 7
Concord, NC
Opry Mills (6) (6) N/A (5)
Nashville, TN
Candlestick Mills (6) (6) N/A (5)
San Francisco, CA
Meadowlands Mills (6) (6) 18
Carlstadt, NJ
</TABLE>
(1) Anticpated Construction Start Dates and Opening Dates may be subject to
adjustment as a result of factors inherent in the development process, some
of which may not be under the direct control of the Company.
(2) Estimated Aggregate Project Cost is based on the Company's best estimate of
the underlying components, many of which may not be under the direct
control of the Company.
(3) Grapevine Mills and Arizona Mills opened on October 30, 1997 and November
20, 1997, respectively.
(4) Proposed ownership structure.
(5) Leasing activity has not yet commenced on these projects.
(6) The opening dates, ownership structure and/or budgets for these properties
have not yet been determined.
8
<PAGE> 6
THE MILLS CORPORATION
SUPPLEMENTAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AND PER SQUARE FOOT DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
1997 1996 1997 1996
------- ------- -------- --------
<S> <C> <C> <C> <C>
REVENUES:
Minimum rent 24,377 23,847 71,395 70,179
Percentage rent 1,043 1,144 3,165 3,449
Recoveries from tenants 11,952 11,227 34,924 34,146
Other property revenue 2,287 1,220 4,919 3,657
Fee income 2,056 1,489 6,417 3,276
Interest income 531 608 2,166 1,801
------- ------- -------- --------
Total rental revenues 42,246 39,535 122,986 116,508
EXPENSES:
Recoverable from tenants 10,842 10,044 31,531 30,708
Other operating 1,498 1,264 4,699 4,792
General and administrative 2,499 1,888 6,736 6,077
Interest expense 9,424 11,196 31,468 33,915
Depreciation and amortization 9,151 8,620 25,998 28,216
------- ------- -------- --------
Total expenses 33,414 33,012 100,432 103,708
Other income 181 413 384 2,629
Equity in earnings of unconsolidated joint ventures 421 - 1,422 -
------- ------- -------- --------
Income before extraordinary item and minority interest 9,434 6,936 24,360 15,429
Extraordinary loss on debt extinguishment - - (8,060) (983)
------- ------- -------- --------
Income before minority interest 9,434 6,936 16,300 14,446
Minority interest (3,820) (3,408) (6,999) (7,098)
------- ------- -------- --------
Net income $ 5,614 $ 3,528 $ 9,301 $ 7,348
======= ======= ======== ========
Income per common share before extraordinary item $ 0.24 $ 0.21 $ 0.65 $ 0.46
======= ======= ======== ========
Net income per common share $ 0.24 $ 0.21 $ 0.43 $ 0.43
======= ======= ======== ========
FUNDS FROM OPERATIONS:
Income before extraordinary item and minority interest $ 9,434 $ 6,936 $ 24,360 $ 15,429
Adjustments:
Add: Depreciation and amortization of real estate assets 8,370 7,187 23,817 24,049
Add: Loss on sale of furniture, fixtures, and equipment - - - 776
Add: Real estate depreciation and amortization
of unconsolidated affiliates 930 - 2,576 -
Add: Extraordinary loss on debt extinguishment
of unconsolidated affiliates - - 397 -
------- ------- -------- --------
$18,734 $14,123 $ 51,150 $ 40,254
======= ======= ======== ========
Weighted Average Shares 23,450 16,906 21,516 16,906
Weighted Average Shares and Units 39,404 33,238 37,708 33,238
</TABLE>
- --------------------------------------------------------------------------------
(1) The company generally considers Funds from Operations, a widely used and
appropriate measure of performance for an equity REIT, which provides a
relevant basis for comparison among REITs. Funds from Operations ("FFO") as
defined by the National Association of Real Estate Investment Trusts
("NAREIT") means net income (loss) (computed in accordance with generally
accepted accounting principals ("GAAP")) excluding gains (or losses) from
debt restructuring and sale of property, plus real estate related
depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures. FFO is presented to assist investors in
analyzing performance of the Company. The Company's method of calculating
FFO may be different from methods used by other REITs. FFO (i) does not
represent cash flow from operations as defined by GAAP, (ii) is not
indicative of cash available to fund cash flow needs and liquidity and
(iii) should not be considered as an alternative to net income for purposes
of evaluating the Company's operating performance.
9
<PAGE> 7
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (I.E.THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY
CENTERS. THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE
ITEMS WITHIN THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 9 AND IS NOT INTENDED
TO BE A REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
WHOLLY OWNED PROPERTIES
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
Minimum rent $ 15,534 $ 11,952 $ 18,479 $ 11,440 $ 1,035 $ 12,955 $ 71,395
Percentage rent 290 308 1,836 191 102 438 3,165
Recoveries from tenants 6,005 8,353 9,852 6,750 39 3,925 34,924
Other revenue 736 936 1,781 1,014 319 133 4,919
------------------------------------------------------------------------------
Total rental revenues 22,565 21,549 31,948 19,395 1,495 17,451 114,403
PROPERTY OPERATING COSTS:
Recoverable from tenants 5,133 7,120 8,983 6,132 0 4,163 31,531
Other operating 509 912 505 915 1,201 657 4,699
------------------------------------------------------------------------------
Total property operating costs 5,642 8,032 9,488 7,047 1,201 4,820 36,230
------------------------------------------------------------------------------
PROPERTY OPERATING INCOME $ 16,923 $ 13,517 $ 22,460 $ 12,348 $ 294 $ 12,631 $ 78,173
==============================================================================
</TABLE>
UNCONSOLIDATED JOINT VENTURES
<TABLE>
<CAPTION>
Ontario
-------
RENTAL REVENUES:
<S> <C>
Minimum rent $ 13,122
Percentage rent 537
Recoveries from tenants 5,610
Other revenue 1,167
----------
Total rental revenues 20,436
PROPERTY OPERATING COSTS:
Recoverable from tenants 5,662
Other operating 931
----------
Total property operating costs 6,593
----------
PROPERTY OPERATING INCOME $ 13,843
==========
Mills Share (1) $ 5,698
==========
</TABLE>
(1) Based on Mills share of distributable cash flow for the nine months ended
September 30, 1997, excluding management fees.
10
<PAGE> 8
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (I.E.THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY
CENTERS. THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE
ITEMS WITHIN THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 9 AND IS NOT INTENDED
TO BE A REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
Minimum rent $ 15,176 $ 11,730 $ 17,649 $ 11,006 $ 959 $ 13,659 $ 70,179
Percentage rent 386 230 1,774 497 91 471 3,449
Recoveries from tenants 5,843 8,083 9,603 6,502 33 4,082 34,146
Other revenue 572 496 1,402 810 272 105 3,657
--------------------------------------------------------------------------------------
Total rental revenues 21,977 20,539 30,428 18,815 1,355 18,317 111,431
PROPERTY OPERATING COSTS:
Recoverable from tenants 5,077 6,807 8,679 5,689 0 4,456 30,708
Other operating 737 1,017 332 1,025 1,116 565 4,792
--------------------------------------------------------------------------------------
Total property operating costs 5,814 7,824 9,011 6,714 1,116 5,021 35,500
--------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME $ 16,163 $ 12,715 $ 21,417 $ 12,101 $ 239 $ 13,296 $ 75,931
======================================================================================
</TABLE>
11
<PAGE> 9
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (I.E.THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY
CENTERS. THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE
ITEMS WITHIN THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 9 AND IS NOT INTENDED
TO BE A REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997
WHOLLY OWNED PROPERTIES
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
Minimum rent $ 5,250 $ 4,138 $ 6,341 $ 3,907 $ 385 $ 4,356 $ 24,377
Percentage rent 100 104 626 68 45 100 1,043
Recoveries from tenants 2,026 2,915 3,324 2,302 15 1,370 11,952
Other revenue 395 482 735 456 135 84 2,287
---------------------------------------------------------------------------------
Total rental revenues 7,771 7,639 11,026 6,733 580 5,910 39,659
PROPERTY OPERATING COSTS:
Recoverable from tenants 1,707 2,451 3,030 2,104 - 1,550 10,842
Other operating 136 342 107 261 386 266 1,498
---------------------------------------------------------------------------------
Total property operating costs 1,843 2,793 3,137 2,365 386 1,816 12,340
=================================================================================
PROPERTY OPERATING INCOME $ 5,928 $ 4,846 $ 7,889 $ 4,368 $ 194 $ 4,094 $ 27,319
=================================================================================
</TABLE>
UNCONSOLIDATED JOINT VENTURES
<TABLE>
<CAPTION>
Ontario
-------
RENTAL REVENUES:
<S> <C>
Minimum rent $ 4,781
Percentage rent 77
Recoveries from tenants 2,108
Other revenue 383
---------
Total rental revenues 7,349
PROPERTY OPERATING COSTS:
Recoverable from tenants 2,071
Other operating 220
---------
Total property operating costs 2,291
---------
PROPERTY OPERATING INCOME $ 5,058
=========
Mills Share (1) $ 2,099
=========
</TABLE>
(1) Based on Mills share of distributable cash flow for the quarter, excluding
management fees.
12
<PAGE> 10
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (I.E.THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY
CENTERS. THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE
ITEMS WITHIN THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 9 AND IS NOT INTENDED
TO BE A REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
Minimum rent $ 5,172 $ 3,819 $ 6,042 $ 3,838 $ 360 $ 4,616 $23,847
Percentage rent 108 71 614 137 42 172 1,144
Recoveries from tenants 1,803 2,689 3,172 2,295 13 1,255 11,227
Other revenue 245 155 450 228 120 22 1,220
---------------------------------------------------------------------------------
Total rental revenues 7,328 6,734 10,278 6,498 535 6,065 37,438
PROPERTY OPERATING COSTS:
Recoverable from tenants 1,537 2,257 2,834 2,115 - 1,301 10,044
Other operating 95 201 116 341 375 136 1,264
---------------------------------------------------------------------------------
Total property operating costs 1,632 2,458 2,950 2,456 375 1,437 11,308
---------------------------------------------------------------------------------
PROPERTY OPERATING INCOME $ 5,696 $ 4,276 $ 7,328 $ 4,042 $ 160 $ 4,628 $26,130
=================================================================================
</TABLE>
13
<PAGE> 11
THE MILLS CORPORATION
OCCUPANCY ANALYSIS
<TABLE>
<CAPTION>
GROSS LEASED & OCCUPIED GROSS LEASED & OCCUPIED AREA,
AREA (S.F.) (1) NET OF ANCHORS (S.F) (2) TOTAL VACANT S.F.
GLA Occupied (3) Total Small GLA Occupied (3) Vacancies
Project Total GLA at 9/97 % Shop GLA at 9/97 % Anchor Small Shop Total
- ------- --------- ------- - -------- ------- - ------ ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Potomac Mills 1,638,042 1,561,915 95.35% 631,712 591,115 93.57% 35,530 40,597 76,127
Franklin Mills 1,661,279 1,540,744 92.74% 607,781 510,500 83.99% 23,254 97,281 120,535
Sawgrass Mills 1,878,577 1,837,776 97.83% 684,594 663,793 96.96% 20,000 20,801 40,801
Gurnee Mills 1,517,409 1,419,664 93.56% 633,302 569,816 89.98% 34,259 63,486 97,745
------------------------------------ ------------------------------------- -------------------------------
Total Mills 6,695,307 6,360,099 94.99% 2,557,389 2,335,224 91.31% 113,043 222,165 335,208
Butterfield 114,610 99,560 86.87% 72,677 57,627 79.29% 0 15,050 15,050
Coopers Crossing 173,509 173,509 100.00% 14,953 14,953 100.00% 0 0 0
Crosswinds 144,119 138,356 96.00% 23,298 17,535 75.26% 0 5,763 5,763
Fashion Place 147,950 126,568 85.55% 74,692 53,310 71.37% 0 21,382 21,382
Germantown 177,097 163,241 92.18% 130,341 116,485 89.37% 0 13,856 13,856
Gwinnett 194,719 189,469 97.30% 97,172 91,922 94.60% 0 5,250 5,250
Liberty Plaza 314,879 153,629 48.79% 24,365 8,953 36.75% 145,838 15,412 161,250
Montgomery Village 117,391 100,939 85.99% 80,986 64,534 79.69% 0 16,452 16,452
Mt. Prospect 298,483 296,823 99.44% 125,888 124,228 98.68% 0 1,660 1,660
West Falls Church 87,824 83,410 94.97% 47,743 43,329 90.75% 0 4,414 4,414
Western Hills 449,496 434,596 96.69% 134,980 120,080 88.96% 0 14,900 14,900
------------------------------------ ------------------------------------- -------------------------------
2,220,077 1,960,100 88.29% 827,095 712,956 86.20% 145,838 114,139 259,977
------------------------------------ ------------------------------------- -------------------------------
Total Wholly Owned 8,915,384 8,320,199 93.32% 3,384,484 3,048,180 90.06% 258,881 336,304 595,185
==================================== ===================================== ===============================
Joint Ventures:
Ontario Mills 1,329,775 1,285,255 96.65% 525,305 480,785 91.52% 0 44,520 44,520
------------------------ ----------- ------------------------------------- -------------------------------
Total Joint Ventures 1,329,775 1,285,255 96.65% 525,305 480,785 91.52% 0 44,520 44,520
======================== =========== ===================================== ===============================
Total Wholly Owned
and Joint Venture 10,245,159 9,605,454 93.76% 3,909,789 3,528,965 90.26% 258,881 380,824 639,705
==================================== ===================================== ===============================
</TABLE>
(1) Includes 959,923 square feet of GLA owned by certain anchor tenants as
follows: Potomac Mills-80,000 square feet of GLA; Franklin Mills-208,602
square feet of GLA; Sawgrass Mills-281,774 square feet of GLA; Gurnee
Mills-250,806 square feet of GLA, Liberty Plaza-13,741 square feet of GLA,
and Ontario Mills-125,000 square feet of GLA. A ground lease at Franklin
Mills of 152,370 square feet is also included.
(2) Anchor stores include all stores occupying more than 20,000 square feet.
(3) GLA occupied is defined as all space leased (including GLA owned by certain
anchor store tenants) and for which rent is being paid as of September 30,
1997, excluding tenants with leases that have a term of less than 1 year.
14
<PAGE> 12
THE MILLS CORPORATION
LEASE EXPIRATION SCHEDULE
The following table shows lease expirations assuming that none of the tenants
exercise renewal options. Except as described in footnote (1), the minimum rent
is the monthly contractual minimum rent of the expiring leases as of September
30, 1997 multiplied by 12.
<TABLE>
<CAPTION>
1997 (1) 1998 1999
Annualized Annualized Annualized
Sq Ft Min. Rent psf Sq Ft Min. Rent psf Sq Ft Min. Rent psf
----- --------- --- ----- --------- --- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchors - $ - $ - - $ - $ - - $ - $ -
Majors - - - 37,960 341,640 9.00 42,212 316,590 7.50
Specialty 40,435 746,267 18.46 68,910 2,067,656 30.01 69,284 1,417,491 20.46
Food Court - - - 1,567 85,208 54.38 - - -
------------------------------------ -------------------------------- -----------------------------------
40,435 $ 746,267 $18.46 108,437 $2,494,504 $23.00 111,496 $1,734,081 $15.55
Franklin Mills:
Anchors - $ - $ - - $ - $ - 100,200 $ 547,725 $ 5.47
Majors - - - 25,127 162,069 6.45 40,232 370,134 9.20
Specialty 44,828 628,899 14.03 43,409 839,010 19.33 89,093 2,097,748 23.55
Food Court - - - - - - 6,229 365,562 58.69
------------------------------------ -------------------------------- --------------------------------
44,828 $ 628,899 $14.03 68,536 $1,001,079 $14.61 235,754 $3,381,169 $14.34
Sawgrass Mills:
Anchors - $ - $ - - $ - $ - - $ - $ -
Majors - - - - - - 28,152 422,280 15.00
Specialty 13,103 360,242 27.49 41,525 985,139 23.72 10,958 387,195 35.33
Food Court - - - - - - 1,206 80,500 66.75
------------------------------------ -------------------------------- --------------------------------
13,103 $ 360,242 $27.49 41,525 $ 985,139 $23.72 40,316 $ 889,975 $22.07
Gurnee Mills:
Anchors - $ - $ - - $ - $ - - $ $ -
Majors - - - 40,752 262,850 6.45 - - -
Specialty 60,753 894,564 14.72 79,979 1,385,411 17.32 54,170 1,045,429 19.30
Food Court - - - - - - - - -
------------------------------------ -------------------------------- --------------------------------
60,753 $ 894,564 $14.72 120,731 $1,648,261 $13.65 54,170 $1,045,429 $19.30
Total without Ontario:
Anchors - $ - $ - - $ - $ - 100,200 $ 547,725 $ 5.47
Majors - - - 103,839 766,559 7.38 110,596 1,109,004 10.03
Specialty 159,119 2,629,972 16.53 233,823 5,277,216 22.57 223,505 4,947,863 22.14
Food Court - - - 1,567 85,208 54.38 7,435 446,062 59.99
------------------------------------ -------------------------------- --------------------------------
159,119 $2,629,972 $16.53 339,229 $6,128,983 $18.07 441,736 $7,050,654 $15.96
==================================== ================================ ================================
</TABLE>
<TABLE>
<CAPTION>
After 1999 Total
Annualized Annualized
Sq Ft Min. Rent psf Sq Ft Min. Rent psf
----- --------- --- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchors 530,633 $ 2,958,997 $ 5.58 530,633 $ 2,958,997 $ 5.58
Majors 279,995 2,395,778 8.56 360,167 3,054,008 8.48
Specialty 403,011 9,508,596 23.59 581,640 13,740,010 23.62
Food Court 7,908 499,837 63.21 9,475 585,045 61.75
-------------------------------- ---------------------------------
1,221,547 $15,363,208 $12.58 1,481,915 $20,338,060 $13.72
Franklin Mills:
Anchors 259,766 $ 1,415,049 $ 5.45 359,966 $ 1,962,774 $ 5.45
Majors 243,947 2,259,754 9.26 309,306 2,791,957 9.03
Specialty 321,720 6,475,901 20.13 499,050 10,041,558 20.12
Food Court 5,221 209,976 40.22 11,450 575,538 50.27
-------------------------------- ---------------------------------
830,654 $10,360,680 $12.47 1,179,772 $15,371,827 $13.03
Sawgrass Mills:
Anchors 632,480 $ 4,021,417 $ 6.36 632,480 $ 4,021,417 $ 6.36
Majors 231,577 2,683,534 11.59 259,729 3,105,814 11.96
Specialty 571,470 13,752,706 24.07 637,056 15,485,282 24.31
Food Court 25,531 1,279,387 50.11 26,737 1,359,887 50.86
-------------------------------- ---------------------------------
1,461,058 $21,737,044 $14.88 1,556,002 $23,972,400 $15.41
Gurnee Mills:
Anchors 397,784 $ 2,392,255 $ 6.01 397,784 $ 2,392,255 $ 6.01
Majors 160,506 1,742,631 10.86 201,258 2,005,481 9.96
Specialty 356,922 6,991,191 19.59 551,824 10,316,595 18.70
Food Court 17,992 973,694 54.12 17,992 973,694 54.12
-------------------------------- ---------------------------------
933,204 $12,099,771 $12.97 1,168,858 $15,688,025 $13.42
Total without Ontario:
Anchors 1,820,663 $10,787,718 $ 5.93 1,920,863 $11,335,443 $ 5.90
Majors 916,025 9,081,697 9.91 1,130,460 10,957,260 9.69
Specialty 1,653,123 36,728,394 22.22 2,269,570 49,583,445 21.85
Food Court 56,652 2,962,894 52.30 65,654 3,494,164 53.22
-------------------------------- ---------------------------------
4,446,463 $59,560,703 $13.40 5,386,547 $75,370,312 $13.99
================================ =================================
</TABLE>
(1) The 1997 amounts represent the total square footage and total annualized
minimum rent that will expire during the last three months of 1997.
15
<PAGE> 13
THE MILLS CORPORATION
LEASE EXPIRATION SCHEDULE
The following table shows lease expirations assuming that none of the tenants
exercise renewal options. Except as described in footnote (1), the minimum rent
is the monthly contractual minimum rent of the expiring leases as of September
30, 1997 multiplied by 12.
<TABLE>
<CAPTION>
1997(1) 1998 1999
Annualized Annualized Annualized
Sq Ft Min. Rent psf Sq Ft Min. Rent psf Sq Ft Min. Rent psf
----- --------- --- ----- --------- --- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ontario Mills:
Anchors - $ - $ - - $ - $ - - $ - $ -
Majors - - - - - - - - -
Specialty 2,739 115,628 42.22 - - - 9,915 261,900 26.41
Food Court - - - - - - - - -
-------------------------------- ------------------------------- -------------------------------
2,739 $ 115,628 $42.22 0 $ - $ - 9,915 $ 261,900 $26.41
Total with Ontario:
Anchors - $ - $ - - $ - $ - 100,200 $ 547,725 $ 5.47
Majors - - - 103,839 766,559 7.38 110,596 1,109,004 10.03
Specialty 161,858 2,745,600 16.96 233,823 5,277,216 22.57 233,420 5,209,763 22.32
Food Court - - - 1,567 85,208 54.38 7,435 446,062 59.99
-------------------------------- ------------------------------- -------------------------------
161,858 $2,745,600 $16.96 339,229 $6,128,983 $18.07 451,651 $7,312,554 $16.19
================================ =============================== ===============================
Community Centers:
Anchors - $ - $ - 56,949 $ 194,300 $ 3.41 - $ - $ -
Majors - - - 54,152 379,064 7.00 - - -
Specialty 51,075 690,131 13.51 95,503 1,242,628 13.01 86,897 1,268,021 14.59
Food Court - - - - - - - - -
-------------------------------- ------------------------------- -------------------------------
51,075 $ 690,131 $13.51 206,604 $1,815,992 $ 8.79 86,897 $1,268,021 $14.59
================================ =============================== ===============================
</TABLE>
<TABLE>
<CAPTION>
After 1999 Total
Annualized Annualized
Sq Ft Min. Rent psf Sq Ft Min. Rent psf
----- --------- --- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C>
Ontario Mills:
Anchors 286,023 $ 1,883,132 $ 6.58 286,023 $ 1,883,132 $ 6.58
Majors 393,447 4,640,544 11.79 393,447 4,640,544 11.79
Specialty 456,803 10,616,920 23.24 469,457 10,994,448 23.42
Food Court 11,328 553,155 48.83 11,328 553,155 48.83
-------------------------------- ----------------------------------
1,147,601 $17,693,751 $15.42 1,160,255 $18,071,279 $15.58
Total with Ontario:
Anchors 2,106,686 $12,670,850 $ 6.01 2,206,886 $13,218,575 $ 5.99
Majors 1,309,472 13,722,241 10.48 1,523,907 15,597,804 10.24
Specialty 2,109,926 47,345,314 22.44 2,739,027 60,577,893 22.12
Food Court 67,980 3,516,049 51.72 76,982 4,047,319 52.57
-------------------------------- ----------------------------------
5,594,064 $77,254,454 $13.81 6,546,802 $93,441,591 $14.27
================================ ==================================
Community Centers:
Anchors 395,679 $ 2,284,022 $ 5.77 452,628 $ 2,478,322 $ 5.48
Majors 724,383 4,985,922 6.88 778,535 5,364,986 6.89
Specialty 481,721 6,124,973 12.71 715,196 9,325,753 13.04
Food Court - - - - - -
-------------------------------- ----------------------------------
1,601,783 $13,394,917 $ 8.36 1,946,359 $17,169,061 $ 8.82
================================ ==================================
</TABLE>
(1) The 1997 amounts represent the total square footage and total annualized
minimum rent that will expire during the last three months of 1997.
16
<PAGE> 14
THE MILLS CORPORATION
RENTAL RATES(1)
The following table sets forth the average base rent per leased square foot of
store openings and closings for each property for the nine months ended
September 30, 1997.
<TABLE>
<CAPTION>
Anchor Stores
--------------------------------------------------------------------------------------------------------
Store Openings Store Closings Releasing
During Year During Year Spread(2)
----------------------------------- ------------------------------ -------------------------------
Average Average
Base Rent Total Base Rent Total
Per Sq. Ft. Sq. Ft. Per Sq. Ft. Sq. Ft.
---------------- ---------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills $ - - $ - - $ - -
Franklin Mills 10.79 61,818 7.99 61,818 2.80 35.02%
Gurnee Mills - - - - - -
Sawgrass Mills - - - - - -
---------------- ---------------- -------------- ------------- -------------- --------------
Total Mills $ 10.79 61,818 $ 7.99 61,818 $ 2.80 35.02%
================ ================ ============== ============= ============== ==============
Community Centers $ - - $ - - $ - -
================ ================ ============== ============= ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Specialty Stores
----------------------------------------------------------------------------------------------------
Store Openings Store Closings Releasing
During Year During Year Spread(2)
------------------------------ ------------------------------ --------------------------------
Average Average
Base Rent Total Base Rent Total
Per Sq. Ft. Sq. Ft. Per Sq. Ft. Sq. Ft.
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills $ 23.14 95,236 $ 22.01 90,846 $ 1.14 5.16%
Franklin Mills 20.64 89,777 19.53 82,587 1.11 5.66%
Gurnee Mills 21.71 80,368 18.97 97,330 2.73 14.40%
Sawgrass Mills 27.75 60,601 23.39 58,861 4.35 18.61%
------------- -------------- -------------- -------------- -------------- -------------
Total Mills $ 22.95 325,982 $ 20.74 329,624 $ 2.22 10.68%
============= ============== ============== ============== ============== =============
Community Centers $ 13.75 77,029 $ 15.34 75,183 $ (1.59)(3) -10.35%
============= ============== ============== ============== ============== =============
</TABLE>
(1) Ontario Mills is excluded from this analysis, due to it still being in its
initial lease up phase.
(2) The releasing spread is calculated as the difference between per square
foot openings and per square foot closings for the nine months ended
September 30, 1997. Openings and closings include renewals but exclude
exercised options.
(3) An alternative releasing spread matching the 77,029 sq ft openings with
previous tenant occupying said space would yield a releasing spread of
$(.25).
17
<PAGE> 15
THE MILLS CORPORATION
SUMMARY OF OUTSTANDING CONSOLIDATED INDEBTEDNESS
(DOLLARS IN THOUSANDS)
AS OF SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
Principal
Balance Annual Interest Maturity
Secured Property (000's) Term Rate Date
- ---------------- ------- ---- ---- ----
<S> <C> <C> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A $209,855 Fixed 6.905% 12/17/26 (1)
Tranche B 27,000 Fixed 7.021% 12/17/26 (1)
Tranche C 15,000 Fixed 7.235% 12/17/26 (1)
Tranche D 30,000 Fixed 7.701% 12/17/26 (1)
Franklin Mills and Liberty Plaza
Mortgage Loan 109,772 Fixed 7.882% 6/1/27 (3)
Mortgage Loan 20,000 Fixed 7.440% 6/1/27 (3)
Sawgrass Mills:
Tranche A 115,000 Fixed 6.450% 1/18/01
Tranche B 10,000 Variable with cap 85 bp over Libor (6) 1/18/01
Tranche C 20,000 Variable with cap 230 bp over Libor (6) 1/18/01
Sawgrass Mills - Phase II 12,000 Variable 235 bp over Libor 7/31/98
Western Hills 14,949 Fixed 7.675% 1/1/99
Nine Community Centers 72,522 Fixed 7.160% 1/31/01
Line of Credit(12) 12,000 Variable 300 bp over Libor 10/31/98
Other 3,600 Fixed 7% weighted ave.
--------------
Total $671,698
==============
</TABLE>
<TABLE>
<CAPTION>
Annual Earliest day
Interest at which debt
Secured Property (000's) can be repaid
- ---------------- ------- -------------
<S> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A $14,490 (2)
Tranche B 1,896 (2)
Tranche C 1,085 (2)
Tranche D 2,310 (2)
Franklin Mills and Liberty Plaza
Mortgage Loan 8,652 (4)
Mortgage Loan 1,488 (4)
Sawgrass Mills:
Tranche A 7,418 (5)
Tranche B 651 (7) (5)
Tranche C 1,591 (7) (5)
Sawgrass Mills - Phase II 961 (7) (8)
Western Hills 1,147 (9)
Nine Community Centers 5,193 (10)
Line of Credit(12) 1,039 (8)
Other 244 (11)
-----------
Total $48,165
===========
</TABLE>
(1) This indebtedness is a 30 year amortizing loan with an anticipated balloon
repayment on December 18, 2003. In the event the mortgage loan is not
repaid by the anticipated balloon repayment date, the annual interest rate
for each tranche will be increased by 2% per annum in excess of the stated
interest rate. In addition, excess cash flow available after payment of the
increased interest rate and scheduled amortization will be used to reduce
the principal balance of the loan. Principal repayments are based on the
scheduled amortization, assuming a 7% mortgage interest rate, over a 30
year period, with the monthly amortization payments being applied
sequentially, beginning with Tranche A to reduce the principal balance.
(2) Optional payments of principal are not permitted prior to December 17,
1999. After such date, prepayments, in whole or in part, are permitted upon
15 days notice. In addition, the Company is required to pay a prepayment
penalty equal to the greater of (i) 1% of the remaining principal balance
or (ii) a yield preservation payment. Generally, yield preservation
payments are intended to compensate the lender for the total amount of
interest it would have earned on the indebtedness but for the repayment,
less the amount of interest that the lender could earn if it invested the
repayment amount in United States Treasury obligations or other similar
securities from the date of the repayment through the maturity date of the
indebtedness.
(3) This indebtedness is a 30 year amortizing loan with an anticipated balloon
repayment on May 5, 2007. In the event the mortgage loan is not repaid by
the anticipated balloon repayment date, the annual interest rate will be
increased by 5% per annum in excess of the stated interest rate. In
addition, excess cash flow available after payment of the increased
interest rate and scheduled amortization will be used to reduce the
principal balance of the loan. The loan balance can be increased to
$165,000 through May 4, 1998, subject to certain financial requirements
relating to increases over $130,000. The loan amount was increased to
$130,000 on August 8, 1997.
(4) This indebtedness may be prepaid, without a prepayment penalty, beginning
180 days prior to May 5, 2007. Prior to that date, there is no right to
prepay the indebtedness, except that $12.5 million of the principal
balance, which has been allocated to the Liberty Plaza shopping center, may
be defeased through the establishment of defeasance collateral (which may
include government or agency securities that have the full faith and credit
of the United States government).
(5) Optional payments of principal on Tranche A of this indebtedness are not
permitted prior to June 20, 2000 other than in connection with certain
casualty or condemnation events occurring with respect to Sawgrass Mills.
On and after such date, Tranche A may be prepaid in full, but not in part,
without any prepayment penalty. Optional prepayments of Tranches B and C of
the indebtedness may be made, in whole or in part, at any time without any
prepayment penalty, but only if payments of interest are current with
respect to each outstanding Tranche and an event of default is not then
continuing.
(6) The loan agreement provides for a cap on LIBOR at 14% for the life of the
loan.
(7) Calculated using 30-day LIBOR at 5.66%, which was the rate at September 30,
1997.
(8) Prepayable at any time, in whole or in part, at any time without prepayment
penalty.
(9) Prepayable, in whole or in part, upon 30 days notice to the lender and the
payment of a prepayment penalty. The penalty percentage due on prepayment
at any time during the six months ending December 31, 1997 is 2.5% of the
outstanding principal amount. Thereafter, the penalty decreases by 0.5% per
six month period to a minimum of 1.5%. During the last three months of its
term, the indebtedness may be prepaid without penalty or premium.
(10) Prepayable, in whole or in part, at any time, upon 60 days prior notice to
the lender. Only in the case of a partial prepayment is the Company
required to pay a prepayment penalty equal to the greater of (i) 1% of the
principal balance, or (ii) a yield preservation payment.
(11) Primarily corporate debt with maturities under one year. Prepayable, in
whole or in part, at any time without prepayment penalty.
(12) The total commitment under the Line of Credit is $60,000. Funds are
available subject to certain performance measures and restrictive
covenants.
18
<PAGE> 16
THE MILLS CORPORATION
GROSS SALES
AS OF SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
Twelve Months ended September 30, 1997 Twelve Months ended September 30, 1996
---------------------------------------------- -----------------------------------------------
Sq Ft Sales psf Sq Ft Sales psf
----- ----- --- ----- ----- ---
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchor/Majors 963,272 $ 187,185,990 $ 194 971,585 $ 175,505,912 $ 181
Specialty 572,960 174,570,350 305 577,444 168,665,016 292
Temporary/Kiosk - 2,730,714 - - 3,222,576 -
---------------------------------------------- -----------------------------------------------
1,536,232 $ 364,487,054 $ 237 1,549,029 $ 347,393,504 $ 224
Franklin Mills:
Anchor/Majors 889,033 $ 164,123,740 $ 185 908,908 $ 161,412,048 $ 178
Specialty 492,636 138,991,640 282 498,763 124,367,449 249
Temporary/Kiosk - 5,767,447 - - 4,412,725 -
---------------------------------------------- -----------------------------------------------
1,381,669 $ 308,882,827 $ 224 1,407,671 $ 290,192,222 $ 206
Sawgrass Mills:
Anchor/Majors 1,172,066 $ 364,381,272 $ 311 1,164,858 $ 340,141,144 $ 292
Specialty 651,815 286,943,557 440 656,104 265,045,346 404
Temporary/Kiosk - 12,306,568 - - 12,262,444 -
---------------------------------------------- -----------------------------------------------
1,823,881 $ 663,631,397 $ 364 1,820,962 $ 617,448,934 $ 339
Gurnee Mills:
Anchor/Majors 658,445 $ 99,217,050 $ 151 644,692 $ 90,267,104 $ 140
Specialty 556,347 145,784,363 262 553,451 139,552,470 252
Temporary/Kiosk - 8,132,465 - - 5,877,233 -
---------------------------------------------- -----------------------------------------------
1,214,792 $ 253,133,878 $ 208 1,198,143 $ 235,696,807 $ 197
Total Mills
Anchor/Majors 3,682,817 $ 814,908,052 $ 221 3,690,043 $ 767,326,208 $ 208
Specialty 2,273,757 746,289,910 328 2,285,762 697,630,281 305
Temporary Kiosk - 28,937,194 - - 25,774,978 -
---------------------------------------------- -----------------------------------------------
5,956,574 $ 1,590,135,156 $ 267 5,975,805 $ 1,490,731,467 $ 249
============================================== ===============================================
</TABLE>
<TABLE>
<CAPTION>
Twelve Months ended December 31, 1996
----------------------------------------------
Sq Ft Sales psf
----- ----- ---
<S> <C> <C> <C>
Potomac Mills:
Anchor/Majors 988,700 $ 183,164,739 $ 185
Specialty 581,470 168,199,660 289
Temporary/Kiosk - 3,003,098 -
----------------------------------------------
1,570,170 $ 354,367,497 $ 226
Franklin Mills:
Anchor/Majors 906,949 $ 163,200,049 $ 180
Specialty 497,697 126,589,740 254
Temporary/Kiosk - 5,554,831 -
----------------------------------------------
1,404,646 $ 295,344,620 $ 210
Sawgrass Mills:
Anchor/Majors 1,172,016 $ 353,980,590 $ 302
Specialty 667,926 271,682,972 407
Temporary/Kiosk - 12,499,092 -
----------------------------------------------
1,839,942 $ 638,162,654 $ 347
Gurnee Mills:
Anchor/Majors 646,362 $ 96,374,480 $ 149
Specialty 561,913 141,852,985 252
Temporary/Kiosk - 6,082,243 -
----------------------------------------------
1,208,275 $ 244,309,708 $ 202
Total Mills
Anchor/Majors 3,714,027 $ 796,719,858 $ 215
Specialty 2,309,006 708,325,357 307
Temporary Kiosk - 27,139,264 -
----------------------------------------------
6,023,033 $ 1,532,184,479 $ 254
==============================================
</TABLE>
(1) Ontario Mills is excluded from this analysis since it did not open until
November 1996 and does not have 12 months of sales data for comparison.
(2) Anchor/Major sales have been adjusted to include sales from certain anchor
tenants that own their parcels.
19
<PAGE> 17
THE MILLS CORPORATION
CAPITAL EXPENDITURES
EXISTING MILLS AND EXISTING COMMUNITY CENTERS COMBINED
<TABLE>
<CAPTION>
Nine Months Ending
September 30, 1997 1996 1995
--------------------- --------------- ---------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES(1)
Costs $ 263,409 $ 328,974 $ 230,024
Per Square Foot(2) 0.03 0.04 0.03
RECURRING TENANT IMPROVEMENTS/LEASING COSTS(3)
Costs $ 2,140,599 $ 4,228,743 (4) $ 2,043,279
Per Square Foot Improved(5) 6.51 12.71 5.52
Per Square Foot(2) 0.27 0.52 0.25
TOTAL RECURRING COSTS
Costs $ 2,404,008 $ 4,557,717 $ 2,273,303
Per Square Foot(2) 0.30 0.56 0.28
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS(2)
Costs $ 4,433,740 $ 8,079,220 $ 1,093,624 (6)
Per Square Foot Improved(7) 40.79 44.93 17.10
Per Square Foot(2) - 0.99 0.23
WORK IN PROCESS(8)
Costs $ 19,356,857 (9) - -
Per Square Foot Improved(10) 27.31 - -
</TABLE>
(1) Recurring non-tenant capital expenditures include expenditures that are not
tenant related nor recoverable from tenants.
(2) Includes annual costs divided by total GLA (excluding space owned by certain
anchor store tenants) of the Properties (excluding Ontario Mills)
(3) Tenant Improvements/Leasing costs include tenant specific costs including
tenant improvements, tenant allowances and capitalized internal leasing
costs.
(4) Includes $1,487,754 incurred with respect to three significant tenants at
Potomac Mills totaling approximately 53,000 square feet of GLA. Without
these three tenants the per square foot improved and per square foot
Recurring Tenant Improvements/Leasing Costs would have totaled $9.80 and
$0.33, respectively.
(5) Calculated as Recurring Tenant Improvements/Leasing Costs divided by GLA
of all Recurring Store Openings (including spaces requiring no
expenditures).
(6) Sawgrass Phase II expansion costs have been excluded from this analysis.
(7) Calculated as Non-Recurring Tenant Improvements/Leasing Costs divided by GLA
of all Non-Recurring Store Openings.
(8) Work in process that will be shown as Recurring or Non-Recurring when the
work is completed.
(9) Includes expansion costs at Franklin Mills and Gurnee Mills.
(10) Calculated as Work In Process divided by GLA of all space with work in
process.
20
<PAGE> 18
THE MILLS CORPORATION
CAPITAL EXPENDITURES
EXISTING MILLS
<TABLE>
<CAPTION>
Nine Months Ending
September 30, 1997 1996 1995
------------------- ---------------- ---------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES(1)
Costs $ 231,187 $ 246,522 $ 191,613
Per Square Foot(2) 0.04 0.04 0.03
RECURRING TENANT IMPROVEMENTS/LEASING COSTS(3)
Costs $ 1,697,817 $ 3,549,312 (4) $ 1,488,391
Per Square Foot Improved(5) 6.77 12.94 4.85
Per Square Foot(2) 0.29 0.60 0.25
TOTAL RECURRING COSTS
Costs $ 1,929,004 $ 3,795,834 $ 1,680,004 (6)
Per Square Foot(2) 0.33 0.64 0.28
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS(3)
Costs $ 3,936,923 $ 7,746,906 $ 1,636,001
Per Square Foot Improved(7) 47.18 50.00 21.69
Per Square Foot(2) - 1.30 0.27
WORK IN PROCESS(7)
Costs $ 19,109,349 (9) - -
Per Square Foot Improved(10) 36.11 - -
</TABLE>
(1) Recurring non-tenant capital expenditures include expenditures that are
not tenant related nor recoverable from tenants.
(2) Includes annual costs divided by total GLA (excluding space owned by
certain anchor store tenants) of the Properties (excluding Ontario Mills)
(3) Tenant Improvements/Leasing costs include tenant specific costs including
tenant improvements, tenant allowances and capitalized internal leasing
costs.
(4) Includes $1,487,754 incurred with respect to three significant tenants at
Potomac Mills totaling approximately 53,000 square feet of GLA. Without
these three tenants the per square foot improved and per square foot
Recurring Tenant Improvements/Leasing Costs would have totaled $9.80 and
$0.33, respectively.
(5) Calculated as Recurring Tenant Improvements/Leasing Costs divided by GLA
of all Recurring Store Openings (including spaces requiring no
expenditures).
(6) Sawgrass Phase II expansion costs have been excluded from this analysis.
(7) Calculated as Non-Recurring Tenant Improvements/Leasing Costs divided by
GLA of all Non-Recurring Store Openings.
(8) Work in process that will be shown as Recurring or Non-Recurring when the
work is completed.
(9) Includes expansion costs at Franklin Mills and Gurnee Mills.
(10) Calculated as Work In Process divided by GLA of all space with work in
process.
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<PAGE> 19
THE MILLS CORPORATION
CAPITAL EXPENDITURES
COMMUNITY CENTERS
<TABLE>
<CAPTION>
Nine Months Ending
September 30, 1997 1996 1995
------------------- --------------- ---------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES(1)
Costs $ 32,222 $ 82,452 $ 38,411
Per Square Foot(2) 0.01 0.04 0.02
RECURRING TENANT IMPROVEMENTS/LEASING COSTS(3)
Costs $ 442,782 $ 679,431 $ 554,888
Per Square Foot Improved(4) 5.66 15.06 9.54
Per Square Foot(1) 0.20 0.31 0.25
TOTAL RECURRING COSTS
Costs $ 475,004 $ 761,883 $ 593,299
Per Square Foot(2) 0.22 0.35 0.27
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS(3)
Costs $ 496,816 $ 332,314 $ 267,622
Per Square Foot Improved(5) 19.68 13.35 7.46
Per Square Foot(2) - 0.15 0.12
WORK IN PROCESS(6)
Costs $ 247,508 - -
Per Square Foot Improved(7) 1.38 - -
</TABLE>
(1) Recurring non-tenant capital expenditures include expenditures that are not
tenant related nor recoverable from tenants.
(2) Includes annual costs divided by total GLA (excluding space owned by certain
tenants) of the Community Centers
(3) Tenant Improvements/Leasing costs include tenant specific costs including
tenant improvements, tenant allowances and capitalized internal leasing
costs.
(4) Calculated as Recurring Tenant Improvements/Leasing Costs divided by GLA
of all Recurring Store Openings (including spaces requiring no
expenditures).
(5) Calculated as Non-Recurring Tenant Improvements/Leasing Costs divided by GLA
of all Non-Recurring Store Openings.
(6) Work in process that will be shown as Recurring or Non-Recurring when the
work is completed.
(7) Calculated as Work In Process divided by GLA of all space with work in
process.
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