SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 17, 1999
SIMON PROPERTY GROUP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 001-14469 046268599
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
115 WEST WASHINGTON STREET
INDIANAPOLIS, INDIANA 46204
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 317.636.1600
------------
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Page 1 of 38 Pages
Item 5. Other Events
On August 17, 1999, the Registrant made available additional ownership and
operation information concerning the Registrant, SPG Realty Consultants, Inc.
(the Registrant's paired-share affiliate), Simon Property Group, L.P., and
properties owned or managed as of June 30, 1999, in the form of a Supplemental
Information package, a copy of which is included as an exhibit to this filing.
The Supplemental Information package is available upon request as specified
therein.
Item 7. Financial Statements and Exhibits
Financial Statements:
None
Exhibits:
Page Number in
Exhibit No. Description This Filing
- ------------ ----------- -----------
99 Supplemental Information 4
as of June 30, 1999
Page 2 of 38 Pages
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 17, 1999
SIMON PROPERTY GROUP, INC.
By: /s/ Stephen E. Sterrett
-----------------------
Stephen E. Sterrett,
Treasurer
Page 3 of 38 Pages
SIMON PROPERTY GROUP
SUPPLEMENTAL INFORMATION
Table of Contents
As of June 30, 1999
Information Page
------------ -----
Overview 5
Ownership Structure 6-8
Reconciliation of Income to Funds from Operations ("FFO") 9
Selected Financial Information 10-11
Portfolio GLA, Occupancy & Rent Data 12-14
Rent Information 15
Lease Expirations 16-17
Debt Amortization and Maturities by Year 18
Summary of Indebtedness 19
Summary of Indebtedness by Maturity 20-25
Summary of Variable Rate Debt and Interest Rate Protection Agreements 26-27
New Development Activities 28
Significant Renovation/Expansion Activities 29-30
Capital Expenditures 31
Gains on Land Sales 32
Teleconference Text - August 10, 1999 33-38
Page 4 of 38
SIMON PROPERTY GROUP
Overview
The Company
- -----------
Simon Property Group, Inc. ("SPG") (NYSE:SPG) is a self-administered and self-
managed real estate investment trust ("REIT"). Simon Property Group, L.P. (the
"Operating Partnership") is a subsidiary partnership of SPG. Shares of SPG are
paired with beneficial interests in shares of stock of SPG Realty Consultants,
Inc. ("SRC", and together with SPG, the "Company"). The Company and the
Operating Partnership (collectively the "Simon Group") are engaged primarily in
the ownership, operation, management, leasing, acquisition, expansion and
development of real estate properties, primarily regional malls and community
shopping centers.
On September 24, 1998, the merger between Simon DeBartolo Group, Inc. ("SDG")
and Corporate Property Investors, Inc. ("CPI"), a privately held real estate
investment trust and its "paired share" affiliate was completed. The CPI merger
added 22 high quality regional malls plus two office buildings to the Simon
Group portfolio, with one office building sold in 1999.
At June 30, 1999, the Company, directly or through the Operating Partnership,
owned or had an interest in 241 properties which consisted of regional malls,
community shopping centers, and specialty and mixed-use properties containing an
aggregate of 167 million square feet of gross leasable area (GLA) in 35 states
and one asset in Europe. The Company, together with its affiliated management
companies, owned or managed approximately 179 million square feet of GLA in
retail and mixed-use properties.
In February, 1999, Simon Group entered into a definitive agreement with New
England Development (NED) to acquire and assume management responsibilities for
NED's portfolio of up to 14 regional malls aggregating approximately 10.6
million square feet of GLA. The purchase price for the portfolio is
approximately $1.7 billion. On April 15, 1999, Simon Group executed a letter of
intent to form a joint venture to acquire the portfolio, with Simon Group's
initial ownership to be approximately 50%. The joint venture intends to complete
the purchase of ten of such regional malls in August of 1999 and up to four more
by the end of 1999.
This package was prepared to provide (1) ownership information, (2) certain
operational information, and (3) debt information as of June 30, 1999, for the
Company and the Operating Partnership.
Certain statements contained in this Supplemental Package may constitute
"forward-looking statements" made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Investors are cautioned that
forward-looking statements involve risks and uncertainties which may affect the
business and prospects of the Company and the Operating Partnership, including
the risks and uncertainties discussed in other periodic filings made by the
Company and the Operating Partnership with the Securities and Exchange
Commission.
We hope you find this Supplemental Package beneficial. Any questions, comments
or suggestions should be directed to: Shelly J. Doran, Director of Investor
Relations-Simon Property Group, P.O. Box 7033, Indianapolis, IN 46207.
Telephone: (317) 685-7330.
Page 5 of 38
SIMON PROPERTY GROUP
ECONOMIC OWNERSHIP STRUCTURE(1)
JUNE 30, 1999
SD Property Group, Inc./(2)/
%
--
SPG Properties, Inc. 99.99%
100 Individual Shareholders 0.01%
-------
100.00%
37,873,965 # units
SPG Properties, Inc./(2)/
%
--
Simon Property Group, Inc. 99.99%
100 Individual Shareholders 0.01%
-------
100.00%
75,812,264
Simon Property Group, L.P.
232,344,719 units
Simon Property Group, Inc./(2)(3)(4)/
Common Shareholders Shares %
- ------------------- ------ -
Public Shareholders 168,796,736 97.3%
Simon Family 3,405,811 2.0%
DeBartolo Family 32,567 0.0%
Executive Management/(5)/ 1,221,285 0.7%
----------- -------
173,456,399/(4)/ 100.00%
54,482,156 # units
Limited Partners
("Limited Partners")
Unitholders Units %
- ----------- ----- -
Simon Family 34,584,455 53.9%
DeBartolo Family 22,222,599 34.6%
Executive Management/(5)/ 153,498 0.2%
Other Limited Partners 7,215,782 11.3%
---------- ------
64,176,334 100.0%
Ownership of Simon Property Group, L.P.
Simon Property Group, Inc. %
Public Shareholders 70.5%
Simon Family 1.4%
DeBartolo Family 0.0%
Executive Management/(5)/ 0.5%
------
Subtotal 72.4%
------
Limited Partners
Simon Family 14.9%
DeBartolo Family 9.5%
Executive Management/(5)/ 0.1%
Other Limited Partners 3.1%
------
Subtotal 27.6%
------
Total 100.0%
(1) Schedule excludes preferred stock (see "Preferred Stock Outstanding") and
units not convertible into common stock.
(2) General partner of Simon Property Group, L.P.
(3) Shares of Simon Property Group, Inc. ("SPG") are paired with beneficial
interests in shares of stock of SPG Realty Consultants, Inc.
(4) The number of outstanding shares of common stock of SPG exceeds the number
of Simon Property Group, L.P. units owned by SPG by 5,288,014. This is the
result of the direct ownership of Ocean County Mall by SPG.
(5) Executive management excludes Simon family members.
Page 6 of 38
SIMON PROPERTY GROUP
Changes in Common Shares and Unit Ownership
For the Period from December 31, 1998 through June 30, 1999
Operating
Partnership Company Common
Units(1) Shares(2)
----------- ---------------
Number Outstanding at December 31, 1998 64,182,157 166,775,031
Restricted Stock Awards (Stock Incentive Program), Net - 523,050
Conversion of Series A Preferred Stock into Common Stock - 6,080,330
Conversion of units into cash (5,823) -
Issuance of Stock for Stock Option Exercises - 77,988
Number Outstanding at June 30, 1999 64,176,334 173,456,399
Total Common Shares and Units Outstanding at June 30, 1999:
237,632,733(2)
Details for Diluted FFO Calculation:
- ------------------------------------
Company Common Shares Outstanding at June 30, 1999 173,456,399
Number of Common Shares Issuable Assuming Conversion of:
Series A Preferred 6.5% Convertible 2,024,051
Series B Preferred 6.5% Convertible 12,527,686
Net Number of Common Shares Issuable Assuming
Exercise of Stock Options 218,361
Diluted Common Shares Outstanding at June 30, 1999 188,226,497
Fully Diluted Common Shares and Units Outstanding at June 30, 1999:
252,402,831
(1) Excludes units owned by the Company (shown here as Company Common Shares)
and units not convertible into common shares.
(2) Excludes preferred units relating to preferred stock outstanding (see
Schedule of Preferred Stock Outstanding).
Page 7 of 38
SIMON PROPERTY GROUP
Preferred Stock Outstanding
As of June 30, 1999
($ in 000's)
Number Liquidation Ticker
Issuer Description of Shares Preference $ Symbol
Convertible:
- ----------------------------------------------------------------------------------------------------------
Simon Property Group, Inc. Series A Preferred 53,271 $1,000 $ 53,271 N/A
6.5% Convertible/(1)/
- ----------------------------------------------------------------------------------------------------------
Simon Property Group, Inc. Series B Preferred 4,844,331 $ 100 $484,433 SPGPrB
6.5% Convertible/(2)/
- ----------------------------------------------------------------------------------------------------------
Perpetual:
- ----------------------------------------------------------------------------------------------------------
SPG Properties, Inc. Series B Preferred 8,000,000 $ 25 $200,000 SGVPrB
8 3/4% Perpetual/(3)/
- ----------------------------------------------------------------------------------------------------------
SPG Properties, Inc. Series C Preferred 3,000,000 $ 50 $150,000 N/A
7.89% Perpetual/(4)/
- ----------------------------------------------------------------------------------------------------------
(1) Assumed in connection with the CPI merger. Each share is convertible into a
number of shares of common stock obtained by dividing $1,000 by $26.319
(conversion price), which is subject to adjustment as outlined below. The
stock is not redeemable, except as needed to maintain or bring the direct
or indirect ownership of the capital stock of the Company into conformity
with the requirements of Section 856(a)(6) of the Code. During the first
quarter of 1999, the largest shareholder of this issue elected to convert
their preferred stock to common stock (150,000 shares). This transaction
was completed effective February 26, 1999.
(2) Issued as part of the consideration for the CPI merger. Each share is
convertible into a number of shares of common stock of the Company obtained
by dividing $100 by $38.669 (the conversion price), which is subject to
adjustment as outlined below. The Company may redeem the stock 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.
The shares are traded on the New York Stock Exchange. The closing price on
June 30, 1999, was $77.00 per share.
The conversion prices of the Series A and Series B Convertible Preferred
Stock are subject to adjustment by the Company in connection with certain
events including (i) any subdivision or combination of shares of common
stock of the Company or the declaration of a distribution in the form of
additional shares of common stock of the Company, (ii) issuances of rights
or warrants to the holders of common stock of the Company, and (iii) any
consolidation or merger to which the Company is a party, any sale or
conveyance to another person of all or substantially all of the assets of
the Company or any statutory exchange of securities with another person.
(3) SPG Properties, Inc. may redeem the stock on or after September 29, 2006.
The shares are not convertible into any other securities of SPG Properties,
Inc. or the Company. The shares are traded on the New York Stock Exchange.
The closing price on June 30, 1999, was $25.00 per share.
(4) The Cumulative Step-Up Premium Rate Preferred Stock was issued at 7.89%.
The shares are redeemable after September 30, 2007. Beginning October 1,
2012, the rate increases to 9.89%.
Page 8 of 38
SIMON PROPERTY GROUP
Reconciliation of Income to Funds From Operations ("FFO")
As of June 30, 1999
(Amounts in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
The Operating Partnership 1999 1998 1999 1998
- ------------------------- ---- ---- ---- ----
Income Before Extraordinary Items $ 67,338 $ 43,514 $134,726 $ 88,638
Plus: Depreciation and Amortization from
Consolidated Properties 89,544 58,082 179,081 116,161
Less: Minority Interest Portion of Depreciation,
Amortization and Extraordinary Items (255) (1,828) (2,050) (3,594)
Plus: Simon's Share of Depreciation, Amortization
and Extraordinary Items from Unconsolidated Entities 20,761 16,304 41,291 31,108
Plus: Losses on Sales of Assets 9,308 7,219 9,308 7,219
Less: Preferred Dividends (including those of subsidiary) (16,123) (7,334) (33,828) (14,668)
--------- -------- -------- --------
FFO of Simon Portfolio $170,573 $115,957 $328,528 $224,864
========= ======== ======== ========
Percent Increase 47.1% 46.1%
FFO of Simon Portfolio $170,573 $115,957 $328,528 $224,864
Basic FFO per Paired Share:
- ---------------------------
Basic FFO Allocable to the Company $125,099 $ 73,719 $239,359 $142,734
Basic Weighted Average Paired Shares Outstanding 173,342 111,955 171,177 110,826
Basic FFO per Paired Share $ 0.72 $0.66 $ 1.40 $1.29
======== ======== ======== ========
Percent Increase 9.1% 8.5%
Diluted FFO per Paired Share:
- -----------------------------
Diluted FFO Allocable to the Company $134,356 $ 73,857 $259,569 $142,961
Diluted Weighted Average Number of Equivalent Paired 188,259 112,382 187,872 111,215
Shares
Diluted FFO per Paired Share $ 0.71 $0.66 $ 1.38 $1.29
========= ======== ======== ========
Percent Increase 7.6% 7.0%
=============================================================================================================================
Page 9 of 38
SIMON PROPERTY GROUP
Selected Financial Information
As of June 30, 1999
(In thousands, except as noted)
As of or for the
Six Months Ended
June 30,
1999 1998 % Change
---- ---- --------
Financial Highlights of the Company
- -----------------------------------
Total Revenue - Consolidated Properties $900,099 $610,632 47.4%
Total EBITDA of Simon Portfolio $838,908 $591,258 41.9%
EBITDA After Minority Interest $675,771 $456,143 48.1%
Net Income Available to Common Shareholders $ 73,416 $ 51,415 42.8%
Basic Net Income per Common Share $ 0.43 $ 0.46 -6.5%
Diluted Net Income per Common Share $ 0.43 $ 0.46 -6.5%
FFO of the Simon Portfolio $328,528 $224,864 46.1%
Basic FFO Allocable to the Company $239,359 $142,734 67.7%
Diluted FFO Allocable to the Company $259,656 $142,961 81.6%
Basic FFO per Common Share $ 1.40 $ 1.29 8.5%
Diluted FFO per Common Share $ 1.38 $ 1.29 7.0%
Distributions per Common Share $ 0.5050 $ 0.5050 0.0%
Operational Statistics
- ----------------------
Occupancy at End of Period:
Regional Malls/(1)/ 88.4% 87.0% 1.4%
Community Shopping Centers/(2)/ 90.9% 90.5% 0.4%
Average Base Rent per Square Foot:
Regional Malls/(1)/ $ 26.15 $ 23.10 13.2%
Community Shopping Centers/(2)/ $ 7.84 $ 7.47 5.0%
Regional Malls:
Total Tenant Sales Volume,
in millions/(3)(4)/ $ 5,953 $ 4,200 41.7%
Total Sales per Square Foot/(4)/ $ 351 $ 318 10.4%
Comparable Sales per Square
Foot/(4)/ $ 368 $ 328 12.2%
Number of Properties Open at End of Period 241 216 11.6%
Total GLA at End of Period, in millions of square feet 166.8 139.0 20.0%
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
(3) Represents only those tenants who report sales.
(4) Based upon the standard definition of sales for regional malls adopted by
the International Council of Shopping Centers which includes only mall and
freestanding stores less than 10,000 square feet.
Page 10 of 38
SIMON PROPERTY GROUP
Selected Financial Information
As of June 30, 1999
(In thousands, except as noted)
June 30, June 30,
Equity Information 1999 1998
- ------------------ ---- ----
Limited Partner Units Outstanding at End of Period 64,176 64,183
Common Shares Outstanding at End of Period 173,456 113,678
-------- --------
Total Common Shares and Units Outstanding at End of Period 237,633 177,861
======== ========
Basic Weighted Average Paired Shares Outstanding 171,177 110,826
Diluted Weighted Average Number of Equivalent Paired Shares(2) 187,872 111,215
June 30, December 31,
1999 1998
---- ----
Debt Information
- ----------------
Consolidated Debt $ 8,274,608 $ 7,973,372
Simon Group's Share of Joint Venture Debt $ 1,250,367 $ 1,227,044
Debt-to-Market Capitalization
- -----------------------------
Common Stock Price at End of Period $ 25.3750 $ 28.5000
Equity Market Capitalization(1) $ 6,821,510 $ 7,608,188
Total Consolidated Capitalization $15,096,118 $15,581,560
Consolidated Debt-to-Market Capitalization 54.8% 51.2%
Total Capitalization - Including Simon Group's Share of JV Debt $16,346,485 $16,808,604
Debt-to-Market Capitalization - Including Simon Group's Share of JV Debt 58.3% 54.7%
(1) Market value of Common Stock, Units and all issues of Preferred Stock of SPG
and SPG Properties, Inc.
(2) Diluted for purposes of computing FFO per share.
Page 11 of 38
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data
As of June 30, 1999
- ----------------------------------------------------------------------------------------------------
Avg.
Annualized
Base Rent
% of Per
Owned GLA Leased
Which Sq. Ft.
Type of GLA- Total % of is of Owned
Property Sq. Ft. Owned GLA Owned GLA Leased GLA
- ----------------------------------------------------------------------------------------------------
Regional Malls
- --------------
- -Anchor 87,493,288 27,165,426 27.5% 98.3% $ 3.66
- -Mall Store 49,378,919 49,331,021 49.9% 88.2% $26.83
- -Freestanding 3,350,755 1,812,937 1.8% 93.9% $ 9.19
----------- ---------- ----- ---- ------
Subtotal 52,729,674 51,143,958 51.7% 88.4% $26.15
Regional Mall
Total 140,222,962 78,309,384 79.2% 91.9% $17.96
Community Shopping Centers
- --------------------------
- -Anchor 12,442,152 8,156,359 8.2% 95.2% $ 6.25
- -Mall Store 4,703,260 4,617,502 4.7% 82.5% 11.18
- -Freestanding 986,561 477,762 .5% 98.3% 7.45
-----
Community Ctr.
Total 18,131,973 13,251,623 13.4% 90.9% $ 7.84
Office Portion
Of Mixed-Use
Properties 2,635,614 2,635,614 2.7% 88.9% $19.88
Value-Oriented
Super-Regional
Malls 3,820,318 3,678,723 3.7% 97.2% $17.51
Properties under
Redevelopment 2,028,615 983,392 1.0%
GRAND TOTAL 166,839,482 98,858,736 100.00%
- ------------------------------------------------------------------------------------------
Occupancy History
- ------------------------------------------------------------------------------------------
Community
As of Regional Malls(1) Shopping Centers(2)
----- ----------------- -------------------
--------------------------------------------------
6/30/99 88.4% 90.9%
6/30/98 87.0% 90.5%
--------------------------------------------------
12/31/98 90.0% 91.4%
12/31/97 87.3% 91.3%
12/31/96 84.7% 91.6%
12/31/95(3) 85.5% 93.6%
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
(3) On a pro forma combined basis giving effect to the Merger with DeBartolo
Realty Corporation ("DRC").
Page 12 of 38
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data (Excluding CPI Portfolio)
As of June 30, 1999
- ------------------------------------------------------------------------------------------------
Avg.
Annualized
Base Rent
% of Per
Owned GLA Leased
Which Sq. Ft.
Type of GLA- Total % of is of Owned
Property Sq. Ft. Owned GLA Owned GLA Leased GLA
- ------------------------------------------------------------------------------------------------
Regional Malls
- --------------
- -Anchor 71,184,145 24,291,128 28.1% 98.8% $ 3.40
- -Mall Store 40,443,244 40,410,646 46.7% 87.6% $24.46
- -Freestanding 3,000,021 1,688,765 2.0% 95.9% $ 8.81
----------- ---------- ---- ---- ------
Subtotal 43,443,265 42,099,411 48.7% 87.9% $23.76
Regional Mall
Total 114,627,410 66,390,539 76.8% 91.9% $15.82
Community Shopping Centers
- --------------------------
- -Anchor 12,421,223 8,135,430 9.4% 95.2% $ 6.24
- -Mall Store 4,601,064 4,515,306 5.2% 82.1% 11.22
- -Freestanding 974,403 477,762 .6% 98.3% 7.45
----------- ---------- ---- ---- ------
Community Ctr.
Total 17,996,690 13,128,498 15.2% 90.8% $ 7.82
Office Portion
Of Mixed-Use
Properties 2,287,462 2,287,462 2.6% 89.7% $19.59
Value-Oriented
Super-Regional
Malls 3,820,318 3,678,723 4.3% 97.2% $17.51
Properties under
Redevelopment 2,028,615 983,392 1.1%
GRAND TOTAL 140,760,495 86,468,614 100.0%
- ------------------------------------------------------------------------------------------------
Occupancy History
- ------------------------------------------------------------------------------------------------
Community
As of Regional Malls(1) Shopping Centers(2)
------------------------------------------------------------
6/30/99 87.9% 90.8%
------------------------------------------------------------
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
13 of 38
SIMON PROPERTY GROUP
Portfolio GLA, Occupancy & Rent Data (CPI Portfolio Only)
As of June 30, 1999
- --------------------------------------------------------------------------------------------------------
Avg. Annualized
% of Owned Base Rent Per
Total % of GLA Which Leased Sq. Ft.
Type of Property GLA-Sq. Ft. Owned GLA Owned GLA is Leased of Owned GLA
- --------------------------------------------------------------------------------------------------------
Regional Malls
- --------------
- -Anchor 16,309,143 2,874,298 23.2% 94.6% $ 6.18
- -Mall Store 8,935,675 8,920,375 72.0% 91.1% $36.78
- -Freestanding 350,734 124,172 1.0% 67.2% $16.62
---------- ---------- ----
Subtotal 9,286,409 9,044,547 73.0% 90.7% $36.58
Regional Mall Total 25,595,552 11,918,845 96.2% 91.7% $29.89
Community Shopping Centers
- --------------------------
- -Anchor 20,929 20,929 0.2% 100.0% $ 8.35
- -Mall Store 102,196 102,196 0.8% 96.4% 9.96
- -Freestanding 12,158 0 0.0% N/A N/A
---------- ----
Community Ctr. Total 135,283 123,125 1.0% 97.0% $ 9.68
Office Portion of
Mixed-Use Properties 348,152 348,152 2.8% 83.4% $21.86
GRAND TOTAL(3) 26,078,987 12,390,122 100.00%
- ---------------------------------------------------------------------------------------
Occupancy History
- ---------------------------------------------------------------------------------------
Community
As of Regional Malls(1) Shopping Centers(2)
---------------------------------------------------------------------------------
6/30/99 90.7% 97.0%
---------------------------------------------------------------------------------
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
(3) Excludes Palm Beach Mall, 50% owned by SPG prior to the CPI merger.
14 of 38
SIMON PROPERTY GROUP
Rent Information (Including CPI Portfolio)
As of June 30, 1999
- -----------------
Average Base Rent
- -----------------
Mall & Freestanding % Community %
As of Stores at Regional Malls Change Shopping Centers Change
----- ------------------------ ------ ---------------- ------
- --------------------------------------------------------------------------------
6/30/99 $26.15 13.2% $7.84 5.0%
6/30/98 23.10 - 7.47 -
- --------------------------------------------------------------------------------
12/31/98 $25.70 8.7% $7.68 3.2%
12/31/97 23.65 14.4 7.44 -2.7
12/31/96 20.68 7.8 7.65 4.9
12/31/95/(1)/ 19.18 4.4 7.29 2.4
- ------------
Rental Rates
- ------------
Base Rent/(2)/
-------------- Amount of Change
Store Openings Store Closings ----------------
Year During Period During Period Dollar Percentage
- ---- -------------- -------------- ------ ----------
Regional Malls:
- ---------------
- --------------------------------------------------------------------------------
1999 (YTD) $29.51 $24.32 $ 5.19 21.3%
- --------------------------------------------------------------------------------
1998 27.33 23.63 3.70 15.7
1997 29.66 21.26 8.40 39.5
1996 23.59 18.73 4.86 25.9
Community Shopping Centers:
- ---------------------------
- --------------------------------------------------------------------------------
1999 (YTD) $10.84 $ 8.95 $ 1.89 21.1%
- --------------------------------------------------------------------------------
1998 10.43 10.95 (0.52) (4.7)
1997 8.63 9.44 (0.81) (8.6)
1996 8.18 6.16 2.02 32.8
/(1)/ On a pro forma combined basis giving effect to the merger with DRC for
periods presented.
/(2)/ Represents the average base rent in effect during the period for those
tenants who signed leases as compared to the average base rent in effect
during the period for those tenants whose leases terminated or expired.
Page 15 of 38
SIMON PROPERTY GROUP
Lease Expirations/(1)/
As of June 30, 1999
Number of Square Avg. Base Rent
Year Leases Expiring Feet per Square Foot
at 6/30/99
Regional Malls - Mall & Freestanding Stores
- ------------------------------------------------------------------------------
1999 (7/1 - 12/31) 412 781,560 29.94
2000 1,866 3,434,433 26.53
2001 1,492 3,354,203 25.18
2002 1,476 3,252,564 26.50
2003 1,615 3,888,267 27.31
2004 1,477 3,970,816 27.41
2005 1,310 4,119,668 26.53
2006 1,386 3,941,453 28.37
2007 1,218 3,520,820 30.60
2008 1,111 3,817,938 29.09
-------------- -------------
TOTALS 13,363 34,081,722 $27.60
Regional Malls - Anchor Tenants
- -----------------------------------------------------
1999 (7/1 - 12/31) 7 1,065,618 2.21
2000 13 1,681,403 1.97
2001 12 1,544,673 2.03
2002 13 1,600,513 1.95
2003 16 2,013,311 2.41
2004 21 2,002,694 3.48
2005 14 1,691,811 2.78
2006 17 2,062,107 3.29
2007 7 636,374 2.79
2008 11 1,202,085 4.42
-------------- -------------
TOTALS 131 15,500,589 $ 2.73
Community Centers - Mall Stores & Freestanding Stores
- ------------------------------------------------------------------------------
1999 (7/1 - 12/31) 32 94,322 9.19
2000 281 753,153 11.57
2001 188 541,777 12.11
2002 150 504,936 11.64
2003 131 571,200 11.27
2004 93 375,372 11.47
2005 40 269,672 9.59
2006 22 261,511 7.52
2007 18 164,142 11.07
2008 19 151,301 11.16
-------------- -------------
TOTALS 974 3,687,386 $11.06
(1) Does not consider the impact of options that may be contained in leases.
Pages 16 of 38
SIMON PROPERTY GROUP
Lease Expirations(1)
As of June 30, 1999
Number of Square Avg. Base Rent
Year Leases Expiring Feet per Square Foot
at 6/30/99
- ----------------------------------
Community Centers - Anchor Tenants
- ----------------------------------
1999 (7/1 - 12/31) 5 299,930 2.55
2000 8 316,642 5.38
2001 13 537,403 4.02
2002 7 313,388 5.57
2003 10 299,248 7.00
2004 11 315,200 5.85
2005 11 630,445 5.61
2006 9 610,361 5.43
2007 13 658,554 5.82
2008 10 399,376 7.73
-------------- -------------
TOTALS 97 4,380,547 $ 5.52
(1) Does not consider the impact of options that may be contained in leases.
Page 17 of 38
SIMON PROPERTY GROUP
SPG's Share of Total Debt Amortization and Maturities by Year
As of June 30, 1999
(In thousands)
-------------- -------------- -------------- --------------
SPG's Share of SPG's Share of SPG's Share of
Secured Unsecured Unconsolidated SPG's Share of
- ------------------------------------------- Consolidated Consolidated Joint Venture Total
Year Debt Debt Secured Debt Debt
- ------------------------------------------- -------------- -------------- -------------- --------------
1999................................ 0 176,884 (1) 324,000 (2) 2,085 502,966
2000................................ 1 400,445 1,083,000 130,575 1,614,019
2001................................ 2 268,042 0 4,955 272,997
2002................................ 3 601,211 250,000 80,002 931,214
2003................................ 4 239,334 575,000 174,096 988,430
2004................................ 5 202,514 700,000 40,581 943,096
2005................................ 6 107,724 660,000 130,056 897,780
2006................................ 7 118,739 250,000 218,731 587,470
2007................................ 8 489,040 180,000 111,757 780,797
2008................................ 9 44,924 200,000 245,907 490,831
2009................................ 10 179,104 300,000 1,635 480,739
Thereafter.......................... 108,673 675,000 100,118 883,791
-------------- -------------- -------------- --------------
Subtotal Face Amounts $ 2,936,634 $ 5,197,000 $ 1,240,498 $ 9,374,129
-------------- -------------- -------------- --------------
Premiums and Discounts on Indebtedness, Net 2,991 8,257 9,869 21,117
-------------- -------------- -------------- --------------
SPG's Share of Total Indebtedness $ 2,939,625 $ 5,205,257 $ 1,250,367 $ 9,395,246
============== ============== ============== ==============
(1) $165,000 of this debt was retired on 7/1/99.
(2) Represents the outstanding balance on Simon Property Group's $1.25 billion
Unsecured Credit Facility. Commitments have been obtained to extend the
maturity of the facility to August 2002.
18 of 38
SIMON PROPERTY GROUP
Summary of Indebtedness
As of June 30, 1999
(In thousands)
------------ ------------ -------------- -------------------
SPG's
Total Share of Weighted Avg. Weighted Avg. Years
Indebtedness Indebtedness Interest Rate to Maturity
------------ ------------ -------------- -------------------
Consolidated Indebtedness
- -------------------------
Mortgage Debt
Fixed Rate 2,569,948 2,487,615 7.42% 5.3
Debt Swapped to Maturity 50,000 50,000 7.74% 2.2
Capped to Maturity, Currently "In the Money" 134,999 98,968 6.17% 6.7
Other Hedged Debt 50,000 50,000 5.79% 0.5
Floating Rate Debt 261,702 250,050 6.41% 3.0
--------- --------- ----- ---
Total Mortgage Debt 3,066,649 2,936,633 7.27% 5.0
Unsecured Debt
Fixed Rate 3,790,000 3,790,000 7.17% 7.6
Capped to Maturity, Currently "In the Money" 63,000 63,000 6.14% 0.6
Floating Rate Debt 70,000 70,000 5.89% 0.6
--------- --------- ----- ---
Subtotal 3,923,000 3,923,000 6.07% 7.4
CPI Merger Facility 700,000 700,000 5.71% 0.5
CPI Merger Facility (Swapped) 250,000 250,000 5.67% 1.2
Revolving Corporate Credit Facility 184,000 184,000 5.51% 0.2
Revolving Corporate Credit Facility (Hedged) 140,000 140,000 5.51% 0.2
--------- --------- ----- ---
Total Unsecured Debt 5,197,000 5,197,000 6.77% 5.8
Adjustment to Fair Market Value - Fixed Rate 9,875 10,159 N/A N/A
Adjustment to Fair Market Value - Variable Rate 1,083 1,089 N/A N/A
--------- --------- ----- ---
Consolidated Mortgages and Other Indebtedness 8,274,607 8,144,882 6.94% 5.4
========= ========= ===== ===
Joint Venture Mortgage Indebtedness
- -----------------------------------
Fixed Rate 2,288,025 969,670 7.41% 7.3
Other Hedged Debt 394,714 139,827 5.94% 3.6
Floating Rate Debt 297,582 131,002 6.20% 2.2
--------- --------- ----- ---
Subtotal 2,980,321 1,240,499 7.12% 6.4
Adjustment to Fair Market Value - Fixed Rate 19,737 9,869 N/A N/A
--------- --------- ----- ---
Joint Venture Mortgages and Other Indebtedness 3,000,058 1,250,367 7.12% 6.4
========= ========= ===== ===
--------- ----- ---
SPG's Share of Total Indebtedness 9,395,249 6.97% 5.5
--------- ----- ---
19 of 38
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 1999
(In thousands)
- ----------------------------------------- -------------- ---------- -------------- -------------- ---------------
SPG's Weighted Avg.
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- ----------------------------------------- ---------- ---------- -------------- -------------- ---------------
Consolidated Indebtedness
Fixed Rate Mortgage Debt:
- -------------------------
Ingram Park Mall - 2 (1) 12/30/99 9.63% 7,000 7,000
Ingram Park Mall - 1 (1) 12/30/99 8.10% 47,626 47,626
Barton Creek Square (1) 12/30/99 8.10% 61,637 61,637
La Plaza Mall (1) 12/30/99 8.25% 49,172 49,172
---------- ----------
Subtotal 1999 165,435 165,435 8.21%
Florida Mall, The 2/28/00 6.65% 90,000 90,000
Net Lease (Braintree) 4/1/00 9.75% 52 52
Windsor Park Mall - 1 6/1/00 8.00% 5,733 5,733
Trolley Square - 1 7/23/00 5.81% 19,000 17,100
Bloomingdale Court 12/1/00 8.75% 27,359 27,359
Forest Plaza 12/1/00 8.75% 16,904 16,904
Fox River Plaza 12/1/00 8.75% 12,654 12,654
Lake View Plaza 12/1/00 8.75% 22,169 22,169
Lincoln Crossing 12/1/00 8.75% 876 876
Matteson Plaza 12/1/00 8.75% 11,159 11,159
Regency Plaza 12/1/00 8.75% 1,878 1,878
St. Charles Towne Plaza 12/1/00 8.75% 30,742 30,742
West Ridge Plaza 12/1/00 8.75% 4,612 4,612
White Oaks Plaza 12/1/00 8.75% 12,345 12,345
---------- ----------
Subtotal 2000 255,483 253,583 7.79%
Biltmore Square 1/1/01 7.15% 26,231 26,231
Chesapeake Square 1/1/01 7.28% 47,465 47,465
Port Charlotte Town Center 1/1/01 7.28% 52,421 52,421
Great Lakes Mall - 1 3/1/01 6.74% 52,223 52,223
Great Lakes Mall - 2 3/1/01 7.07% 8,426 8,426
Net Lease (Norfolk) 11/30/01 8.50% 786 786
---------- ----------
Subtotal 2001 187,552 187,552 7.10%
Lima Mall 3/1/02 7.12% 18,764 18,764
Columbia Center 3/15/02 7.62% 42,040 42,040
Northgate Shopping Center 3/15/02 7.62% 78,501 78,501
Tacoma Mall 3/15/02 7.62% 91,848 91,848
Net Lease (Chattanooga) 5/31/02 6.80% 737 737
River Oaks Center 6/1/02 8.67% 32,500 32,500
North Riverside Park Plaza - 1 9/1/02 9.38% 3,846 3,846
North Riverside Park Plaza - 2 9/1/02 10.00% 3,617 3,617
Principal Mutual Mortgages - Pool 1 (2) 9/15/02 6.81% 103,520 103,520
Principal Mutual Mortgages - Pool 2 (3) 9/15/02 6.77% 137,754 137,754
Net Lease (Atlanta) 12/1/02 8.00% 962 962
Palm Beach Mall 12/15/02 7.50% 49,954 49,954
---------- ----------
Subtotal 2002 564,043 564,043 7.32%
Century III Mall -1 7/1/03 6.78% 66,000 66,000
Miami International Mall 12/21/03 6.91% 46,206 27,724
---------- ----------
Subtotal 2003 112,206 93,724 6.82%
20 of 38
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 1999
(In thousands)
- --------------------------- ---------- ------------ ------------ ------------ -------------
SPG's Weighted Avg
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- --------------------------- ---------- ------------ ------------ ------------ -------------
Battlefield Mall - 1 1/1/04 7.50% 48,194 48,194
Battlefield Mall - 2 1/1/04 6.81% 44,806 44,806
Forum Phase I - Class A-1 5/15/04 7.13% 46,997 28,198
Forum Phase II - Class A-1 5/15/04 7.13% 43,004 23,652
----------- -----------
Subtotal 2004 183,001 144,850 7.15%
Tippecanoe Mall - 1 1/1/05 8.45% 45,877 45,877
Tippecanoe Mall - 2 1/1/05 6.81% 15,931 15,931
Melbourne Square 2/1/05 7.42% 39,109 39,109
Cielo Vista Mall - 2 11/1/05 8.13% 1,608 1,608
----------- -----------
Subtotal 2005 102,525 102,525 7.80%
Treasure Coast Square 1/1/06 7.42% 52,830 52,830
Gulf View Square 10/1/06 8.25% 37,354 37,354
Paddock Mall 10/1/06 8.25% 29,709 29,709
----------- -----------
Subtotal 2006 119,893 119,893 7.88%
Lakeline Mall 5/1/07 7.65% 72,561 72,561
Cielo Vista Mall - 1 5/1/07 9.38% 55,082 55,082
Cielo Vista Mall - 3 5/1/07 6.76% 38,796 38,796
McCain Mall - 1 5/1/07 9.38% 25,613 25,613
McCain Mall - 2 5/1/07 6.76% 17,906 17,906
Valle Vista Mall - 1 5/1/07 9.38% 33,923 33,923
Valle Vista Mall - 2 5/1/07 6.81% 7,959 7,959
University Park Mall 10/1/07 7.43% 59,500 35,700
CMBS Loan - Fixed Component 12/15/07 7.31% 175,000 175,000
----------- -----------
Subtotal 2007 486,340 462,540 7.81%
Randall Park Mall - 2 7/11/08 7.33% 35,000 35,000
- ---------------------- ----------- -----------
Subtotal 2008 35,000 35,000 7.33%
College Mall - 2 1/1/09 6.76% 11,948 11,948
Greenwood Park Mall - 2 1/1/09 6.76% 61,730 61,730
College Mall - 1 1/1/09 7.00% 42,057 42,057
Greenwood Park Mall - 1 1/1/09 7.00% 35,225 35,225
Towne East Square - 1 1/1/09 7.00% 55,605 55,605
Towne East Square - 2 1/1/09 6.81% 24,892 24,892
----------- -----------
Subtotal 2009 231,457 231,457 6.90%
Windsor Park Mall - 2 5/1/12 8.00% 8,806 8,806
---------- ----------
Subtotal 2012 8,806 8,806 8.00%
Chesapeake Center 5/15/15 8.44% 6,563 6,563
Grove at Lakeland Square, The 5/15/15 8.44% 3,750 3,750
Terrace at Florida Mall, The 5/15/15 8.44% 4,688 4,688
---------- ----------
Subtotal 2015 15,001 15,001 8.44%
Sunland Park Mall 1/1/26 8.63% 39,319 39,319
---------- -----------
Subtotal 2026 39,319 39,319 8.63%
Keystone at the Crossing 7/1/27 7.85% 63,887 63,887
---------- -----------
Subtotal 2027 63,887 63,887 7.85%
----------- ----------- --------------
Total Consolidated Fixed Rate Mortgage Debt 2,569,948 2,487,615 7.42%
=========== =========== ==============
21 of 38
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 1999
(In thousands)
- --------------------------- ---------- ------------ ------------ ------------ -------------
SPG's Weighted Avg
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- --------------------------- ---------- ------------ ------------ ------------ -------------
Variable Rate Mortgage Debt:
- ----------------------------
Jefferson Valley Mall 1/12/00 5.79% 50,000 50,000
Lakeline Plaza 2/28/00 6.04% 33,000 33,000
White Oaks Mall 3/1/00 6.28% 16,500 9,062
Eastgate Consumer Mall 3/31/00 6.00% 22,929 22,929
Trolley Square 7/23/00 6.74% 8,141 7,327
----------- -----------
Subtotal 2000 130,570 122,318 5.99%
Crystal River 1/1/01 7.24% 15,292 15,292
Orland Square 9/1/01 7.74% 50,000 50,000
----------- -----------
Subtotal 2001 65,292 65,292 7.62%
Highland Lakes Center 3/1/02 6.74% 14,377 14,377
Mainland Crossing 3/31/02 6.74% 1,603 1,603
----------- -----------
Subtotal 2002 15,980 15,980 6.74%
Richmond Towne Square (4) 7/15/03 6.24% 27,818 27,818
Shops @ Mission Viejo (4) 9/14/03 6.29% 70,333 70,333
Arboretum (4) 12/1/03 6.74% 34,000 30,600
----------- -----------
Subtotal 2003 132,151 128,751 6.38%
Forum Phase I - Class A-2 5/15/04 6.19% 44,385 26,631
Forum Phase II - Class A-2 5/15/04 6.19% 40,614 22,338
North East Mall - 2 (4) 5/21/04 6.74% 17,709 17,709
----------- -----------
Subtotal 2004 102,708 66,678 6.34%
CMBS Loan - Variable Component 12/15/07 6.16% 50,000 50,000
----------- -----------
Subtotal 2007 50,000 50,000 6.16%
----------- ----------- -------------
Total Variable Rate Mortgage Debt 496,701 449,019 6.44%
=========== =========== =============
----------- -------------
Total Consolidated Mortgage Debt 2,936,633 7.27%
=========== =============
Fixed Rate Unsecured Debt:
- --------------------------
Unsecured Notes - CPI 1 3/15/02 9.00% 250,000 250,000
----------- -----------
Subtotal 2002 250,000 250,000 9.00%
Unsecured Notes - CPI 2 4/1/03 7.05% 100,000 100,000
SPG, LP (Bonds) 6/15/03 6.63% 375,000 375,000
SPG, LP (PATS) 11/15/03 6.75% 100,000 100,000
----------- ----------
Subtotal 2003 575,000 575,000 6.72%
SCA (Bonds) 1/15/04 6.75% 150,000 150,000
SPG, LP (Bonds) 2/9/04 6.75% 300,000 300,000
SPG, LP (Bonds) 7/15/04 6.75% 100,000 100,000
Unsecured Notes - CPI 3 8/15/04 7.75% 150,000 150,000
----------- ----------
Subtotal 2004 700,000 700,000 6.96%
SCA (Bonds) 5/15/05 7.63% 110,000 110,000
SPG, LP (Bonds) 6/15/05 6.75% 300,000 300,000
SPG, LP (MTN) 6/24/05 7.13% 100,000 100,000
SPG, LP (Bonds) 10/27/05 6.88% 150,000 150,000
----------- ----------
Subtotal 2005 660,000 660,000 6.98%
22 of 38
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 1999
(In thousands)
------------ -------------
- --------------------- ------------- -------- ------------ SPG's Weighted Avg.
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- --------------------- ------------- -------- ------------ ------------ -------------
SPG, LP (Bonds) 11/15/06 6.88% 250,000 250,000
--------- ---------
Subtotal 2006 250,000 250,000 6.88%
SPG, LP (MTN) 9/20/07 7.13% 180,000 180,000
--------- ---------
Subtotal 2007 180,000 180,000 7.13%
SPG, LP (MOPPRS) 6/15/08 7.00% 200,000 200,000
--------- ---------
Subtotal 2008 200,000 200,000 7.00%
SPG, LP (Bonds) 2/9/09 7.13% 300,000 300,000
SPG, LP (Bonds) 7/15/09 7.00% 150,000 150,000
--------- ---------
Subtotal 2009 450,000 450,000 7.08%
Unsecured Notes - CPI 4 9/1/13 7.18% 75,000 75,000
--------- ---------
Subtotal 2013 75,000 75,000 7.18%
Unsecured Notes - CPI 5 3/15/16 7.88% 250,000 250,000
--------- ---------
Subtotal 2016 250,000 250,000 7.88%
SPG, LP (Bonds) 6/15/18 7.38% 200,000 200,000
--------- ---------
Subtotal 2018 200,000 200,000 7.38%
--------- ---------
Total Unsecured Fixed Rate Debt 3,790,000 3,790,000 7.17%
========= =========
Variable Rate Unsecured Debt:
Corporate Revolving Credit Facility (5) 9/27/99 5.51% 324,000 324,000
--------- ---------
Subtotal 1999 324,000 324,000 5.51%
SPG, L.P. Unsecured Loan 1/31/00 5.89% 70,000 70,000
SPG, L.P. Unsecured Loan 1/31/00 6.14% 63,000 63,000
CPI Merger Facility - 2 Chase (1.4B) (6) 3/24/00 5.71% 450,000 450,000
CPI Merger Facility - 3 Chase (1.4B) (6) 9/24/00 5.69% 500,000 500,000
--------- ---------
Subtotal 2000 1,083,000 1,083,000 5.74%
--------- ---------
Total Unsecured Variable Rate Debt 1,407,000 1,407,000 5.68%
========= =========
---------
Total Unsecured Debt 5,197,000 6.77%
=========
Net Discount on Fixed-Rate Indebtedness 9,875 10,159 N/A
Net Premium on Variable-Rate Indebtedness 1,083 1,089 N/A
--------- -----
Total Consolidated Debt 8,144,882 6.94%
--------- -----
Joint Venture Indebtedness
Fixed Rate Mortgage Debt:
Northfield Square 4/1/00 9.52% 23,908 23,908
Coral Square 12/1/00 7.40% 53,300 26,650
--------- ---------
Subtotal 2000 77,208 50,558 8.40%
Highland Mall - 2 10/1/01 8.50% 244 122
Highland Mall - 3 11/1/01 9.50% 2,339 1,170
--------- ---------
Subtotal 2001 2,583 1,292 9.41%
23 0f 38
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 1999
(In thousands)
------------ -------------
- --------------------------- ---------- ------------ ------------ SPG's Weighted Avg
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- --------------------------- ---------- ------------ ------------ ------------ -------------
Crystal Mall 2/1/03 8.66% 49,781 24,891
Avenues, The 5/15/03 8.36% 57,331 14,333
Lakeland Square 12/22/03 7.26% 52,135 26,068
----------- -----------
Subtotal 2003 159,247 65,291 8.04%
Indian River Commons 11/1/04 7.58% 8,399 4,200
Indian River Mall 11/1/04 7.58% 46,602 23,301
----------- -----------
Subtotal 2004 55,001 27,501 7.58%
Westchester, The - 1 9/1/05 8.74% 151,415 75,708
Westchester, The - 2 9/1/05 7.20% 54,000 27,000
Cobblestone Court 11/30/05 7.22% 6,180 2,163
Crystal Court 11/30/05 7.22% 3,570 1,250
Fairfax Court 11/30/05 7.22% 10,320 2,709
Gaitway Plaza 11/30/05 7.22% 7,350 1,715
Plaza at Buckland Hills, The 11/30/05 7.22% 17,680 6,055
Ridgewood Court 11/30/05 7.22% 7,980 2,793
Royal Eagle Plaza 11/30/05 7.22% 7,920 2,772
Village Park Plaza 11/30/05 7.22% 8,960 3,136
West Town Corners 11/30/05 7.22% 10,330 2,411
Westland Park Plaza 11/30/05 7.22% 4,950 1,155
Willow Knolls Court 11/30/05 7.22% 6,490 2,272
Yards Plaza, The 11/30/05 7.22% 8,270 2,895
----------- -----------
Subtotal 2005 305,415 134,033 8.07%
Seminole Towne Center 1/1/06 6.88% 70,500 31,725
CMBS Loan - Fixed Component (7) 5/1/06 7.40% 300,000 150,000
Great Northeast Plaza 6/1/06 9.04% 17,599 8,800
Smith Haven Mall 6/1/06 7.86% 115,000 28,750
----------- -----------
Subtotal 2006 503,099 219,275 7.45%
Town Center at Cobb - 1 4/1/07 7.54% 50,531 25,266
Town Center at Cobb - 2 4/1/07 7.25% 65,730 32,865
Gwinnett Place - 1 4/1/07 7.54% 39,662 19,831
Gwinnett Place - 2 4/1/07 7.25% 86,370 43,185
----------- -----------
Subtotal 2007 242,293 121,147 7.36%
Metrocenter 2/28/08 8.45% 31,013 15,507
Aventura Mall - A 4/6/08 6.55% 141,000 47,000
Aventura Mall - B 4/6/08 6.60% 25,400 8,467
Aventura Mall - C 4/6/08 6.89% 33,600 11,200
West Town Mall 5/1/08 6.90% 76,000 38,000
Grapevine Mills - 2 10/1/08 6.47% 155,000 58,125
Ontario Mills - 5 11/2/08 6.75% 144,396 36,099
Source, The - 2 11/6/08 6.65% 124,000 31,000
----------- -----------
Subtotal 2008 730,409 245,397 6.76%
Highland Mall - 1 12/1/09 9.75% 7,707 3,854
Ontario Mills - 4 (8) 12/28/09 0.00% 4,828 1,207
---------- -----------
Subtotal 2009 12,535 5,061 7.42%
Mall of Georgia Crossing 6/6/10 7.25% 236 118
Mall of Georgia 7/1/10 7.09% 200,000 100,000
---------- -----------
Subtotal 2010 200,236 100,118 7.09%
---------- ----------- --------
Total Joint Venture Fixed Rate Mortgage Debt 2,288,026 969,670 7.41%
========== =========== ========
24 of 38
SIMON PROPERTY GROUP
Summary of Indebtedness By Maturity
As of June 30, 1999
(In thousands)
------------ -------------
- ------------------------------------------------ -------- -------- ------------ SPG's Weighted Avg
Property Maturity Interest Total Share of Interest Rate
Name Date Rate Indebtedness Indebtedness by Year
- ------------------------------------------------ -------- -------- ------------ ------------ -------------
Variable Rate Mortgage Debt:
- ----------------------------
Tower Shops, The (4) 3/13/00 6.44% 12,900 6,450
Dadeland Mall (4) 12/10/00 5.94% 140,000 70,000
----------- -----------
Subtotal 2000 152,900 76,450 5.98%
Arizona Mills (4) 2/1/02 6.54% 142,214 37,425
Orlando Premium Outlets 5/20/02 6.74% 2,369 1,185
Shops at Sunset Place, The (4) 6/30/02 6.49% 97,773 36,665
----------- -----------
Subtotal 2002 242,356 75,274 6.52%
CMBS Loan - Floating Component (7) 5/1/03 5.73% 185,000 92,500
Concord Mills (4) 12/2/03 6.59% 44,540 16,703
----------- -----------
Subtotal 2003 229,540 109,203 5.86%
Circle Centre Mall - 1 (4) 1/31/04 5.68% 60,000 8,802
Circle Centre Mall - 2 (4) 1/31/04 5.68% 7,500 1,100
----------- -----------
Subtotal 2004 67,500 9,902 5.68%
----------- ----------- -----------
Total Joint Venture Variable Rate Debt 692,296 270,829 6.07%
=========== =========== ===========
CMBS Loan - Fixed Premium 19,737 9,869
-----------
----------- -----------
Total Joint Venture Debt 1,250,367 7.12%
----------- -----------
----------- -----------
SPG's Share of Total Indebtedness 9,395,249 6.97%
----------- -----------
(1) Loans were paid off and properties were unencumbered on July 1, 1999.
(2) This Principal Mutual Pool 1 loan is secured by cross-collateralized
mortgages encumbering four of the Properties (Anderson, Forest
Village Park, Longview and South Park). A weighted average rate is
used for these Pool 1 Properties.
(3) This Principal Mutual Pool 2 loan is secured by cross-collateralized
mortgages encumbering seven of the Properties (Eastland, Forest Mall,
Golden Ring, Hutchinson, Markland, Midland, and North Towne). A
weighted average rate is used for these Pool 2 Properties.
(4) Includes applicable extensions available at Simon Group's option.
(5) Commitments to extend the maturity of this Unsecured Credit Facility
to August 2002 have been obtained.
(6) This Facility consists of (i) a $450 million nine-month term loan,
(ii) a $450 million 18-month term loan, and (iii) a $500 million
24-month term loan. Interest rate protection agreements relating to
$250 million of the $1.4 billion expire on September 28, 1999. Under
these agreements LIBOR is swapped at a weighted average rate of
5.018%.
(7) This is $485 million of Commercial Mortgage Notes secured by cross-
collateralized mortgages encumbering thirteen of the Properties. The
Simon Group's share is $242 million. A weighted average rate is used.
(8) Notes for purchase of land from Ontario Redevelopment Agency at 6%
commencing January 2000.
25 of 38
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of June 30, 1999
(In thousands)
Principal SPG SPG's
Property Maturity Balance Ownership Share of
Name Date 06/30/99 % Loan Balance
-------- -------- --------- --------- ------------
Consolidated Properties:
Secured Debt:
Jefferson Valley Mall 1/12/00 50,000 100.00% 50,000
Lakeline Plaza 2/28/00 33,000 100.00% 33,000
White Oaks Mall 3/1/00 16,500 54.92% 9,062
Eastgate Consumer Mall 3/31/00 22,929 100.00% 22,929
Trolley Square 7/23/00 8,141 90.00% 7,327
Crystal River 1/1/01 15,292 100.00% 15,292
Orland Square 9/1/01 50,000 100.00% 50,000
Highland Lakes Center 3/1/02 14,377 100.00% 14,377
Mainland Crossing 3/31/02 1,603 100.00% 1,603
North East Mall - 2 5/21/04 17,709 100.00% 17,709
Richmond Towne Square 7/15/03 27,818 100.00% 27,818
Shops @ Mission Viejo 9/14/03 70,333 100.00% 70,333
Arboretum 12/1/03 34,000 90.00% 30,600
Forum Phase I - Class A-2 5/15/04 44,385 60.00% 26,631
Forum Phase II - Class A-2 5/15/04 40,614 55.00% 22,338
CMBS Loan - Variable Component 12/15/07 50,000 100.00% 50,000
--------- ---------
Total Consolidated Secured Debt 496,701 449,019
========= =========
Unsecured Debt:
SPG, L.P. Unsecured Loan 1/31/00 70,000 100.00% 70,000
SPG, L.P. Unsecured Loan 1/31/00 63,000 100.00% 63,000
CPI Merger Facility - 2 Chase (1.4B) 3/24/00 450,000 100.00% 450,000
CPI Merger Facility - 3 Chase (1.4B) 9/24/00 500,000 100.00% 500,000
Unsecured Revolving Credit Facility - UBS (1.25B) 9/27/99 324,000 100.00% 324,000
--------- ---------
Total Consolidated Unsecured Debt 1,407,000 1,407,000
========= =========
Net Premium on Variable-Rate Indebtedness 1,083 1,089
--------- ---------
Consolidated Variable Rate Debt 1,904,784 1,857,108
========= =========
Interest
Property Rate Terms of Terms of
Name 06/30/99 Variable Rate Interest Rate Protection Agreement
-------- -------- ------------- ----------------------------------
Consolidated Properties:
Secured Debt:
Jefferson Valley Mall 5.786% LIBOR + 0.550% LIBOR Capped at 8.70% through maturity
Lakeline Plaza 6.036% LIBOR + 0.800%
White Oaks Mall 6.276% LIBOR + 1.250% 90-day LIBOR set on May 29, 1999
Eastgate Consumer Mall 6.000% LIBOR + 1.000%
Trolley Square 7.219% LIBOR + 1.500%
Crystal River 7.236% LIBOR + 2.000%
Orland Square 7.742% LIBOR + 0.500% LIBOR Swapped at 7.24% through maturity
Highland Lakes Center 6.736% LIBOR + 1.500%
Mainland Crossing 6.736% LIBOR + 1.500%
North East Mall - 2 6.736% LIBOR + 1.500%
Richmond Towne Square 6.236% LIBOR + 1.000%
Shops @ Mission Viejo 6.286% LIBOR + 1.050%
Arboretum 6.736% LIBOR + 1.500%
Forum Phase I - Class A-2 6.190% LIBOR + 0.300% Through an Interest rate protection
agreement, effectively fixed at an
all-in-one rate of 6.19%
Forum Phase II - Class A-2 6.190% LIBOR + 0.300% Through an Interest rate protection
agreement, effectively fixed at an
all-in-one rate of 6.19%
CMBS Loan - Variable Component 6.155% LIBOR + 0.365% Through an Interest rate protection
agreement, effectively fixed at an
all-in-one rate of 6.16%
Unsecured Debt:
SPG, L.P. Unsecured Loan 5.886% LIBOR + 0.650%
SPG, L.P. Unsecured Loan 6.140% LIBOR + 0.650% Through an Interest rate protection
agreement, effectively fixed at an
all-in-one rate of 6.14%
CPI Merger Facility - 2 Chase (1.4B) 5.710% LIBOR + 0.650%
CPI Merger Facility - 3 Chase (1.4B) 5.689% LIBOR + 0.650% Through interest rate protection
agreements, $250m of this $500m
tranche is swapped at a weighted
average LIBOR rate of 5.018%
Unsecured Revolving Credit Facility
- UBS (1.25B) 5.509% LIBOR + 0.650% Subject to an 11.53% LIBOR cap on $900M
and a 16.77% LIBOR cap on $50M.
SIMON PROPERTY GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of June 30, 1999
(In thousands)
Principal SPG SPG's
Property Maturity Balance Ownership Share of
Name Date 06/30/99 % Loan Balance
-------- -------- --------- --------- ------------
Joint Venture Properties:
Tower Shops, The 3/13/00 12,900 50.00% 6,450
Dadeland Mall 12/10/00 140,000 50.00% 70,000
Arizona Mills 2/1/02 142,214 26.32% 37,425
Orlando Premium Outlets 5/20/02 2,369 50.00% 1,185
Shops at Sunset Place, The 6/30/02 97,773 37.50% 36,665
Concord Mills 12/2/03 44,540 37.50% 16,703
CMBS Loan - Floating Component 5/1/03 185,000 50.00% 92,500
Circle Centre Mall - 1 1/31/04 60,000 14.67% 8,802
Circle Centre Mall - 2 1/31/04 7,500 14.67% 1,100
--------- ---------
Total Joint Venture Properties 692,296 270,829
========= =========
Total Variable Mortgage
and Other Indebtedness 2,597,080 2,127,936
--------- ---------
Footnote:
(1) Represents the weighted average interest rate.
The following table summarizes variable rate debt:
Total SPG Share
--------- ----------
Swapped debt 300,000 300,000
Capped debt "in the money" 197,999 161,969
Other hedged variable rate debt 584,714 329,827
Unhedged variable rate debt 1,514,367 1,336,141
--------- ---------
2,597,080 2,127,936
========= =========
Interest
Property Rate Terms of Terms of
Name 06/30/99 Variable Rate Interest Rate Protection Agreement
-------- -------- ------------- ----------------------------------
Joint Venture Properties:
Tower Shops, The 6.436% LIBOR + 1.200% Two one-year extensions exist to
extend maturity.
Dadeland Mall 5.936% LIBOR + 0.700%
Arizona Mills 6.536% LIBOR + 1.300% LIBOR Capped at 9.50% through maturity.
Orlando Premium Outlets 6.736% LIBOR + 1.500% Rate can be reduced based upon project
performance.
Shops at Sunset Place, The 6.486% LIBOR + 1.250% Rate can be reduced based upon project
performance.
Concord Mills 6.586% LIBOR + 1.350%
CMBS Loan - Floating Component 5.734% See Footnote (1) The Operating Partnership took
assignment of an interest rate
protection agreement (LIBOR cap of
11.67%) relating to this debt.
Circle Centre Mall - 1 5.676% LIBOR + 0.440% LIBOR Capped at 8.81% through maturity.
Circle Centre Mall - 2 5.676% LIBOR + 0.440% LIBOR Capped at 7.75% through maturity.
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SIMON PROPERTY GROUP
New Development Activities
As of June 30, 1999
Simon Non-Anchor
Group's Actual/ Projected Sq. Footage
Mall/ Ownership Projected Cost Leased/ GLA
Location Percentage Opening (in millions) Committed(1) (sq. ft.)
- ---------------------------- ---------- --------- ------------- ------------ ---------
- ----------------------------
Projects Under Construction
- ----------------------------
The Mall of Georgia 50% 8/99 $246 83% 1,600,000
Buford, Georgia
(Atlanta)
Anchors/Major Tenants: Nordstrom (opening 3/00), Dillard's, Lord & Taylor, JCPenney, Galyan's,
Bed Bath & Beyond, Haverty's, Regal 20 Cinemas, IMAX
- ---------------------------- -------------------------------------------------------------------------
The Mall of Georgia Crossing 50% 8/99 $ 38 97% 441,000
Buford, GA
(Atlanta)
Anchors/Major Tenants: Target, Nordstrom Rack, Best Buy, Staples, TJMaxx & More
- ---------------------------- -------------------------------------------------------------------------
Concord Mills 37.5% 9/99 $216 80% 1,400,000
Concord, NC
(Charlotte)
Anchors/Major Tenants: Books-A-Million, Bed Bath & Beyond, TJMaxx, Burlington Coat Factory, Bass
Pro Outdoor World, AMC Theatres, Jillian's, Alabama Grill, Group USA, Sun
& Ski, For Your Entertainment, John Q. Hammons, Embassy Suites Hotel,
Host Marriott Services food court
- ---------------------------- -------------------------------------------------------------------------
The Shops at North East Mall 100% 11/99 $ 42 80% 341,000
Hurst, TX
Anchors/Major Tenants: Michaels, OfficeMax, PetsMart, TJMaxx, Bed Bath & Beyond, Noodle Kidoodle,
Just For Feet, Nordstrom Rack, Ulta Cosmetics, Logan's Roadhouse
- ---------------------------- -------------------------------------------------------------------------
Waterford Lakes Town Center 100% 11/99 and $ 84 88% 920,000
Orlando, FL 11/00 (Phase I)
Anchors/Major Tenants: Regal 20-Plex Multi-Cinema, Super Target, TJMaxx, Ross Dress for Less,
Barnes & Noble, Waves Music, Old Navy, Bed Bath & Beyond, OfficeMax
- ---------------------------- -------------------------------------------------------------------------
Orlando Premium Outlets 50% Summer 2000 $ 91 (2) 433,000
Orlando, FL
Anchors/Major Tenants: To be announced
- ---------------------------- -------------------------------------------------------------------------
Arundel Mills 37.5% Fall 2000 $230 (2) 1,400,000
Anne Arundel, MD
Anchors/Major Tenants: Jillian's, Bed Bath & Beyond, Sun & Ski Sports, For Your Entertainment,
Iguana Amerimex
(1) Community Center leased/committed percentage includes owned anchor GLA.
(2) Leasing still in preliminary stage.
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SIMON PROPERTY GROUP
Significant Renovation/Expansion Activities
As of June 30, 1999
Total New or
SPG Actual/ Projected Existing Incremental
Mall/ Ownership Projected Cost GLA GLA
Location Percentage Opening (in millions) (sq. ft.) (sq. ft.)
- -------------------------------------------------------- ---------- ------------ ------------- --------- -----------
Brunswick Square 100% 11/99 $19 736,000 55,000
East Brunswick, NJ
Project Description: New Barnes & Noble (opened 7/99), MEGA Movies Theatre expansion; mall
renovation (Spring 2000); Macy's remodel (2000)
- -------------------------------------------------------- -----------------------------------------------------------------------
Florida Mall 50% 11/99 $80 1,120,000* 608,000*
Orlando, FL *excludes Nordstrom
Project Description: Dillard's and JCPenney expansions, food court renovation (completed
1998); new Burdines, small shop expansion and mall renovation; new
Nordstrom
- -------------------------------------------------------- -----------------------------------------------------------------------
LaPlaza Mall 100% 11/99, $36 988,000 215,000
McAllen, TX 3/00 & 11/00
Project Description: Mall renovation; new Dillard's and Foley's Furniture (3/00); JCPenney
expansion and new small shops retrofitted from the existing Dillard's
store (11/00)
- -------------------------------------------------------- -----------------------------------------------------------------------
The Shops at Mission Viejo 100% 9/99 $146 817,000 427,000
Mission Viejo, CA
Project Description: New Nordstrom and Saks Fifth Avenue (11/99); small shop expansion and
renovation, new parking structure and renovation of existing parking
structure; Robinson-May expansion (11/99); food court addition (fall
2000); Macy's expansion and remodel (2001)
- -------------------------------------------------------- -----------------------------------------------------------------------
North East Mall 100% 9/99 $103 1,141,000 308,000
Hurst, TX
Project Description: New Dillard's, mall expansion and parking deck; Montgomery Ward remodel
(10/99); JCPenney remodel and expansion and parking deck (11/99); new
Saks Fifth Avenue, Sears remodel, mall renovation and parking deck
(Fall 2000); new Nordstrom (3/01); one additional anchor
- -------------------------------------------------------- -----------------------------------------------------------------------
Palm Beach Mall 100% 11/99 $34 1,205,000 61,000
West Palm Beach, FL
Project Description: Mall renovation and JCPenney remodel; new Dillard's and Borders (3/00)
and Old Navy; Burdines remodel (Summer 2000)
- -------------------------------------------------------- -----------------------------------------------------------------------
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SIMON PROPERTY GROUP
Significant Renovation/Expansion Activities
As of June 30, 1999
Total New or
SPG Actual/ Projected Existing Incremental
Mall/ Ownership Projected Cost GLA GLA
Location Percentage Opening (in millions) (sq. ft.) (sq. ft.)
- -------------------------------------------------------- ---------- ------------ ------------- --------- -----------
Richmond Town Square 100% 11/99 $59 873,000 10,000
Cleveland, OH
Project Description: New Kaufmann's, JCPenney remodel and mall renovation (opened 11/98);
Sears remodel and new food court; new Sony Cinema (12/99); new Barnes &
Noble (6/00)
- -------------------------------------------------------- -----------------------------------------------------------------------
Tacoma Mall 100% 11/99 $12 1,286,000 N/A
Tacoma, WA
Project Description: Mall renovation; new food court (4/00)
- -------------------------------------------------------- -----------------------------------------------------------------------
Town Center at Boca Raton 100% 11/00 $66 1,327,000 228,000
Boca Raton, FL
Project Description: New, expanded and relocated Saks Fifth Avenue (10/99); Bloomingdale's
expansion and new parking structure (11/99); new Nordstrom, Lord &
Taylor expansion, mall expansion and renovation, food court renovation
and new parking structure (11/00)
Page 30 of 38
SIMON PROPERTY GROUP
Capital Expenditures
For the Six Months Ended June 30, 1999
(In millions)
Joint Venture Properties
------------------------
Simon
Consolidated Group's
Properties Total Share
------------ ----- -------
New Developments $ 55.9 $132.6 $82.8
Renovations and Expansions 138.5 25.0 11.3
Tenant Allowances-Retail 21.4 5.8 2.7
Tenant Allowances-Office .3 - -
Capital Expenditures
Recoverable from Tenants 2.7 .6 .2
Other (1) - 8.8 4.2
------ ------ -----
Totals $218.8 $172.8 $101.2
====== ====== ======
(1) Primarily represents capital expenditures not recovered from tenants.
Page 31 of 38
SIMON PROPERTY GROUP
Gains on Land Sales
For the Six Months Ended June 30, 1999 and 1998
(In millions)
Six Months Ended
June 30,
1999 1998
---- ----
Consolidated Properties $ 7.8 $0.9
Simon Group's Share of Unconsolidated Entities 2.9 0.4
----- ----
Totals $10.7 $1.3
===== ====
Page 32 of 38
SIMON PROPERTY GROUP
Conference Text
August 10, 1999
Forward Looking Statement
- -------------------------
Welcome to the Simon Property Group second quarter 1999 earnings teleconference
call. Please be aware that statements in this teleconference call that are not
historical may be deemed forward-looking statements within the meaning of the
federal securities laws. Although the Company believes that the expectations
reflected in any forward-looking statements are based on reasonable assumptions,
it can give no assurance that its expectations will be attained. The listener is
directed to the Company's various filings with the Securities and Exchange
Commission, including quarterly reports on Form 10-Q, reports on Form 8-K and
annual reports on Form 10-K for a discussion of such risks and uncertainties.
Opening Comments (David Simon)
- ------------------------------
Good morning. We are very pleased with our accomplishments for the second
quarter, highlighted by the following:
. We met expectations and grew FFO per share 8% to $0.71.
. We increased occupancy in the regional mall portfolio by 140 basis points
to 88.4%, as compared to 87.0% at June 30, 1998.
. We made significant progress toward the closing of our acquisition of New
England Development, including obtaining commitments from three
institutional partners for $345 million.
. We obtained commitments to extend our $1.25 billion unsecured credit
facility for 3 additional years; and
. We continued or started construction on over 6 million square feet of new
development projects in Charlotte, Orlando, Atlanta and the Baltimore-
Washington metroplex and major redevelopment programs in Orlando, southern
California, southern Florida and Ft. Worth, all opening in 1999 or 2000.
Financial and Operational Results (Steve Sterrett)
- --------------------------------------------------
Our results for the quarter and year-to-date reflect the adoption of NAREIT's
Best Practice Guideline for Reporting Performance on a Per Share Basis, taking
into account the FFO dilution from our Series A and Series B convertible
preferred stock. As you may know, we had previously excluded these series from
the computation of FFO per share because they were anti-dilutive in the
computation of net income per share. This change has reduced our diluted FFO per
share by approximately $.01 in the second quarter and by $.02 year to date. The
full year impact in 1999 will be $.04.
Our financial and operational results for the period ended June 30, 1999 are as
follows:
For the quarter:
. FFO on a per share basis increased 8% to $0.71 per share in 1999 from $0.66
per share in 1998.
Page 33 of 38
SIMON PROPERTY GROUP
Conference Text
August 10, 1999
. FFO of the Simon Portfolio was $170.6 million, an increase of 47% or $54.6
million, over the $116.0 million reported in 1998.
. Total revenue increased 46% to $454.0 million.
For the six months:
. FFO on a per share basis increased 7% to $1.38 per share in 1999 from $1.29
per share in 1998.
. FFO of the Simon Portfolio was $328.5 million, an increase of 46% or $103.6
million, over the $224.9 million reported in 1998.
. Total revenue increased 47% to $900.1 million.
Operating statistics for the regional mall portfolio as of June 30, 1999
demonstrate continued strong internal growth and are as follows:
. Occupancy was 88.4%, an increase of 140 basis points over the same period
in 1998. Occupancy within the comparable properties, that is, excluding the
CPI assets, was 90 basis points higher at 6/30/99 than at 6/30/98. This was
accomplished despite the loss of approximately 50 basis points of occupancy
in 1999 due to store closings by retailers such as County Seat, Edison
Brothers and Garden Botanika. We are actively re-leasing this space to new
tenants at substantially higher rents.
. Average base rent was $26.15 per square foot, an increase of 13%.
. Total sales per square foot increased 10%, to $351 per square foot as
compared to the prior year.
. Comparable sales per square foot, i.e. sales of tenants who have been in
place for at least 24 months, increased 12%, to $368.
. The average initial base rent for new mall stores opened in 1999 was $29.51
per square foot, an increase of $5.19, or 21% over the tenants who closed
or whose leases expired.
. Same property NOI growth for the six months was over 5%. Drivers of this
growth were increases in occupancy and rents as well as SBV initiatives. As
a point of reference, we do exclude all redevelopment activities from the
computation of our comparable property NOI number.
Liquidity and Capital Activities (Steve Sterrett)
- -------------------------------------------------
We are pleased to report that we have substantially completed an extension for
our $1.25 billion unsecured revolving credit facility, which we expect to close
by the end of August. The current facility, which initially expires on September
27th (it contains a one-year extension option, at our sole election), will be
extended for three years, with another one-year
Page 34 of 38
SIMON PROPERTY GROUP
Conference Text
August 10, 1999
extension, again, exercisable solely at our option. Pricing for this facility is
the same as for our existing line. Given our current debt ratings, we will
borrow at LIBOR plus 65 basis points and a 15 basis point facility fee.
There was strong interest in the three-year extension as lender commitments were
received from 31 financial institutions aggregating over $1.7 billion. We
believe that it is a testament to the financial strength and corporate
performance of SPG that this line could be renewed for $1.25 billion at the same
pricing and for up to four years.
Regarding near-term debt maturities; we have no remaining 1999 debt maturities,
having already refinanced three significant assets six months before maturity
and as soon as prepayment was available to us at par.
Year 2000 maturities:
. The only significant year 2000 maturity for us is the remaining two
tranches of the CPI facility ($450 million due March 24th and $500 million
due September 24th). We plan to issue senior unsecured notes by early 2000
to term-out this debt. If that option is not available to us, we have
sufficient unused capacity on our credit facility to repay this debt.
. $140 million is due by December 1, 2000 to MetLife on a 10 community center
debt pool. We have obtained approval and documentation has commenced for
this 10 year fixed rate refinancing with MetLife (at a lower rate) which is
planned to close during the fourth quarter of this year.
. Ten additional non-recourse mortgage loans aggregating approximately $330
million should provide no problems in refinancing as the related assets
cover interest expense by three times.
As of June 30, 1999, 86% of our debt is fixed or hedged. We have always taken a
prudent approach to financing the Company's capital growth while proactively
evaluating all financing opportunities well in advance of existing debt
maturities. Given our long-term view of the business, we will continue this
strategy.
One of the other hallmarks of our financing strategy is our philosophy of
maintaining a significant pool of unencumbered assets. Over $750 million of
EBITDA is generated annually from this pool, which includes some of the
country's best regional malls such as Roosevelt Field on Long Island, Phipps
Plaza and Lenox Square in Atlanta, and the Town Center in Boca Raton.
Dispositions (Steve Sterrett)
- -----------------------------
During the second quarter, we completed three asset dispositions as part of our
strategy to dispose of non-core assets, generating $54 million of proceeds:
Page 35 of 38
SIMON PROPERTY GROUP
Conference Text
August 10, 1999
. On April 15th, we sold Three Dag Hammarskjold, the former CPI headquarters
building in New York City.
. On May 20th, we sold Cohoes Commons, a 264,000 square foot community center
in Rochester, New York.
. In June, we sold our property and partnership interest in the Charles Hotel
in Cambridge, Massachusetts.
Progress continues on the disposition of our previously identified non-core
assets. We expect to report additional sale transactions prior to year-end.
Acquisition Activities (Steve Sterrett)
- ---------------------------------------
We are progressing on our acquisition of New England Development. As disclosed
in earlier announcements, this portfolio consists of 14 regional malls-ten in
Massachusetts; two in New Hampshire; and one each in Connecticut and Virginia-
comprising 10.6 million square feet of GLA. We currently expect to complete the
first phase of the transaction, for 10 of the assets, by August 31st. The
remaining four property acquisitions should close during the remainder of the
third and fourth quarters. As we approach closure on this acquisition, and based
upon our validation of the transaction underwriting, we believe the financial
impact will be consistent with our initial announcement and expectations.
When we announced this transaction in February, we stated that we would form a
joint venture with institutional investors to acquire the portfolio, with our
ownership percentage ranging between 30 and 50 percent. We have obtained
commitments from JPMorgan Investment Management's Strategic Property Fund,
NYSTRS and Teachers (TIAA) for an aggregate $345 million of equity participation
in such a joint venture. Our initial ownership percentage will approximate 50%.
We look forward to completion of the transaction, adding these high-quality
assets to our portfolio and expanding our presence in the Northeast,
particularly in the Boston metropolitan market.
In June, we purchased the remaining 50% of Haywood Mall in Greenville, South
Carolina for $69 million. Haywood is a 1.2 million square foot super-regional
mall anchored by Belk-Simpson, Dillard's, JCPenney, Rich's and Sears. The mall
opened in 1980 and was expanded in 1996 with the addition of Dillard's and small
shop space. Haywood Mall was 93% leased at June 30th and generates sales in
excess of $390 per square foot and annual total sales in excess of $270 million.
It is clearly the dominant mall in its market place. The transaction will be
slightly accretive in the initial year of ownership and was completed at an
initial yield to SPG of 9.1%.
New Development and Redevelopment Activities (Rick Sokolov)
- -----------------------------------------------------------
On Friday we will open the 1.6 million square foot Mall of Georgia and adjacent
441,000 square foot power center, The Mall of Georgia Crossing. Mall of Georgia
will feature Dillard's, JCPenney, and Lord & Taylor, all of which will open
36 of 38
SIMON PROPERTY GROUP
Conference Text
August 10, 1999
this week. Nordstrom will open at the mall in March of 2000. Nordstrom Rack,
Target, TJMaxx, Best Buy and Staples will anchor Mall of Georgia Crossing.
Immediately adjacent to the mall is a 140,000 square foot village that will
feature lifestyle tenants and restaurants such as Barnes & Noble, P.F. Chang,
California Cafe, Restoration Hardware and Harold's. A 500-seat amphitheater and
children's play area are part of the pedestrian-oriented outdoor streetscape of
the village.
Specialty anchors complement the mall and village and include Bed Bath & Beyond,
the state's first Galyan's, Haverty's Furniture, a 20-screen stadium seating
Regal Cinema and a 7-story Imax 3D Theater complex. Approximately 100 stores
will be open at grand opening with small shop occupancy projected in the range
of 80-85% going into the holidays with the balance of the tenants opening in
conjunction with the Nordstrom opening in March 2000.
These complementary centers are ideally located near I-85, I-985, SR 20 and
Atlanta's proposed outer loop. More than 185,000 cars pass the site daily in
Gwinnett County, a leading county in the metropolitan area in terms of
population growth. Gwinnett County also leads the metro area in job growth;
leads the entire state of Georgia in new-home construction; and is ranked first
among the 333 largest counties in the nation in terms of economic strength. We
are very excited about this project and its embedded growth opportunities.
Also opening third quarter is Concord Mills in Concord, North Carolina, a suburb
of Charlotte. This 1.4 million square foot value-oriented super regional mall
will open its doors on September 16th and feature typical "Mills-type" anchors,
which are listed in the press release. SPG has a 37.5% interest in Concord Mills
along with The Mills Corporation and Kan Am.
We recently added another new project to our pipeline in our fifth joint venture
with The Mills Corporation-Arundel Mills in Anne Arundel County, Maryland.
Arundel Mills is strategically positioned to capture both the Baltimore and the
northern and eastern Washington, D.C. metropolitan areas. Groundbreaking on this
1.4 million square foot project occurred July 15th, with a projected opening by
fall 2000. Arundel Mills will be located at Maryland Route 100 and the
Baltimore/Washington Parkway in Anne Arundel County. We will take a 37.5%
interest in this project while Mills will own 37.5% and Kan Am 25%.
Our major redevelopment opening at The Shops at Mission Viejo is scheduled for
September 1st. The small shop GLA leasing has been very successful for this
project and we expect over 80% of the tenants to open on the first. By November,
over 90% will be open. Exciting new tenants added to this center include
Cheesecake Factory, Restoration Hardware, Z Gallerie, Pottery Barn, Coach,
Williams-Sonoma, Cole Haan and all divisions of The Gap in addition to Nordstrom
and Saks.
37 of 38
SIMON PROPERTY GROUP
Conference Text
August 10, 1999
We're very excited about all of the projects in our development pipeline and the
numerous projects that will be opening in 1999 and 2000. All are proceeding on
time and on budget and are detailed in the press release.
Simon Brand Ventures (Rick Sokolov)
- -----------------------------------
Year-to-date growth in Simon Brand Ventures' income is in line with our
expectations. SBV has provided $19.6 million in income YTD in 1999 as compared
to $8.1 million for the first six months of 1998. Drivers of this growth are new
program rollouts that have occurred throughout 1998 and 1999, as well as the
effect of an expanded portfolio.
New programs that are underway and expected to commence this year include the
initial rollout of the MALLPeRKS Marketplace with 50 malls by year-end and most
of the remaining malls in 2000, and the rollout of the JCDecaux mall fixture
advertising program with three malls by this year-end and 40 additional malls in
2000.
Conclusion (David Simon)
- ------------------------
Throughout the second quarter we continued to transition or "Simonize" the CPI
assets and are very pleased with our progress, but the biggest benefits of our
ownership of these properties won't be recognized until 2000 and beyond.
The third and fourth quarters of this year will include the closing of the New
England acquisition and new project openings in Atlanta, Charlotte, Orlando and
Ft. Worth as well as major redevelopment projects in Florida, Texas and
California. SPG's share of new development projects coming on line is $325
million while our share of redevelopment projects is approximately $300 million.
We expect returns of 10 to 12% on these projects, but once again, won't really
see the impact until 2000.
In conclusion, we are pleased with our year-to-date results and look forward to
an eventful second half of 1999. Our balance sheet is in excellent shape, and we
are in a position to profitably grow the company in 2000 and beyond.
38 of 38
