SimonPropertyGroup

Contact:Jianhao Michael ZengM.S. in Real Estate FinanceClass of 2015NYUSchack Institute of Real Estate

michael.j.zeng@nyu.edu347-997-0664

SPG Overview• Largest REIT in World by both Market Cap ($64.9b)

and Total Cap ($92.7b)

• 1,915% Total Return since IPO in 1993

• Interest in More than 350 Properties

• Located in North America, Europe & Asia

Globally Recognize Management Team

Costs of Asset Classes

Debt Preferred Stock

Common Stock

WACC0.00%1.00%2.00%3.00%4.00%5.00%6.00%7.00%8.00%

4.78%

7.25%6.75%

6.13%

Corporate Debt

- Rated AA- Weighted Average Interest of Debt – 4.78%- Weighted Average Years to Maturity – 5.5

22%

51%

27%EquitySecured Debt (Mortgage)Unsecured Debt (Corporate Debt)

Debt Maturity Schedule (In thousand)

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

After

2024

0500,000

1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,0005,000,000

Total Secured Debt ExpirationTotal Unsecured Debt Expiration

2010 Bond Issuance• Trades at a Premium - $116

• 5.62% Annual Coupon

• Matures in 2020

• Absolute Spread over 5-YR Treasury – 389 bps

• Relative Spread over 5-YR Treasury – 225 bps

New Price (IRR) – 50 BPS• Current Spread – 76 bps

• New Required Return – 2.99%

• New Price of Bond - $113.25

New Price (Duration) – 50 BPS• Formula = (126.32-114.67)/(2*116*.0005)

• Duration is 10 (I-Rate Risk)

• 50 BPS Increase – 5% Drop in Price

Preferred Shares• Only 255k of Preferred Shares Outstanding

• Less than 1% of SPG’s Capital Structure

• Redemption Price - $100

• Issue Quarterly Distributions @ 7.5% Annual Rate

Development & Redevelopment• Spend $500m to $1b Annually

0%6%

12%18%

7%12% 10%

19%

Projected IRR for each type of invesment

Asia Investment

• JV with Mitsubishi Estate Co. in Japan

• JV with Shinsegae in South Korea

Macerich• Simon has disclosed that it accumulated a 3.6% stake or

5.71M shares in Macerich and noted that it "may" request that Macerich waive its excess share provision of 5%.

• Macerich disclosed on 11/17 that it had waived that provision for Ontario Teachers’ Pension Plan (OTPP) in connection with Macerich's acquisition of Ontario Teachers' 49% stakes in five major malls.

• After the deal between OTPP and Macerich, SPG share is 3.39% and now with the 5% excess share provision from MAC, SPG will have the opportunity to acquire 8.417 million shares before triggering the excess share provision.

Klepierre • 21% ownership stake• 300 shopping centers in over 15 countries• Investing in emerging markets i.e. Poland, Czech

Republic, Slovakia, Slovenia & Hungary• Divesting away from Southern Europe• Formed strategic partnerships with Zara, Mango,

H&M and Sephora

Retail Sector• Forecasted to improve throughout the end of 2014

and into 2015• Strong organic growth through higher occupancies

and increasing rents• Retailers efficiently utilizing space• Total portfolio sales increased 3.5% y-o-y

WPG Spin-Off• Spun-Off all of its 98 strip-center businesses• New REIT – Washington Prime Group• Only contributed 3.5% of NOI• Majority of locations in depressed markets• Since Spin-Off, stock price fell by more than 25%

Mergers & Acquisitions

• SPG has engaged in M &A with a number of companies including:

Gallerie Commerciali Italia S.p.A. Silver Sands Factory Stores Paragon Outlets Grand Prairie Paragon Outlets Livermore Valley Arizona Mills Klepierre

JV and Accessing Capital• In 2007, SPG accessed capital from Farrallon Capital

to acquire a stake in Mills Corp, REIT.• Engaged in atleast 6 Joint Ventures that both

acquire and develop new properties MacAruthurGlen Klepierre Auchin S.A. Institutional Mall Investors (IMI) Mitsubishi Estate Co. Ltd. Shinsegae International Co.

FFO• FY13 - $3.2b (increase from $2.8b FY12)• FFO – $689m in 3Q14• 14% increase y-o-y after debt retirement• FY13 FFO/share – $8.85, record for REIT industry!• FY14 FFO/share - $9.25

Annual FFO Growth• Year 2018 forecasted to be 25% higher than 2014

2014 2015 2016 2017 2018$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$3,357,696 $3,536,561$3,930,483 $4,021,903 $4,189,873

Forecast FFO (in thousand)

AFFO/CAD• FY13 - $2.8b• FY14 - $3.1b• FY14 AFFO/share - $8.50• FY16 AFFO/share - $10.11

Annual ROA • SPG purchasing and developing profitable

properties• Able to increase net income in greater proportion to

value of assets

2014

2015

2016

2017

2018

19.00% 19.50% 20.00% 20.50% 21.00% 21.50% 22.00% 22.50% 23.00%

Annual ROA forecast

Debt/Total Capital• FY14 Debt/Cap – 29%• Dramatically decreasing from 2014 to 2018• Retirement of two largest debt issuance (2016 and

2018) serve as catalyst

IRR Comparison• YTD Return:

• Total XIRR if purchased on Mar 09, 2009 SPG: 44.09% GGP: 157.45%

YTD Return37.40%

36.27%

GGP SPG

More Return Comparison

Dividend; 11.36%

Capital Gain; 88.64%

SPG

Dividend Capital Gain

Dividend; 7.86%

Capital Gain; 92.71%

GGP

Dividend Capital Gain

Comparable

SPG GGP0.00%0.50%1.00%1.50%2.00%2.50%3.00%3.50%

Dividend Yield

Debt/Capital

Dividend Payout Ratio

Y-O-Y Total Return

0% 10% 20% 30% 40% 50% 60%

29.00%

52.53%

32.00%

45.00%

46.15%

33.00%

SPG GGP

FY14 FFO/Share $8.85 $1.30

P/FFO 19.6x 20.7x

Trading to NAV 1.54% -4.96%

Analyst Opinion

Three Months Ago Two Months Ago Last Month Current Month0

2

4

6

8

10

12

14

1614

13 1314

Analyst Opinion about SPG

Strong Buy BuyHold Underperform/Sell

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Conclusion• P/FFO multiple of 19.6x vs. 18.8x• Predominant Institutional Ownership i.e. Cohen &

Steers, Fidelity, T. Rowe Price