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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2010

SIMON PROPERTY GROUP, L.P.(Exact name of registrant as specified in its charter)

Delaware
(State of incorporation or organization)

333-157794
(Commission File No.)

34-175576
(I.R.S. Employer Identification No.)

225
West Washington Street
Indianapolis, Indiana 46204
(Address of principal executive offices)

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

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

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to
submit and post such files). Yes o    No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý

Smaller reporting company o(Do not check if a smaller reporting company)


Indicate by check mark whether Registrant is a shell company (as defined by Rule 12b-2 of the Exchange
Act). Yes o    No ý

Registrant has no common stock outstanding.



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Simon Property Group,L.P. and Subsidiaries

Form 10-Q

INDEX



PagePart I  Financial InformationItem 1.

Consolidated Financial Statements (Unaudited)Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009


3Consolidated Statements of Operations and Comprehensive Income for the three months and nine months ended September 30, 2010 and 2009


4Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2009


5Condensed Notes to Consolidated Financial Statements


6Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations


22Item 3.

Qualitative and Quantitative Disclosures About Market Risk


35Item 4.

Controls and Procedures


35Part II  Other InformationItem 1.

Legal Proceedings


36Item 1A.

Risk Factors


36Item 5.

Other Information


36Item 6.

Exhibits


36Signatures


37


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Simon Property Group, L.P. and SubsidiariesUnaudited Consolidated Balance Sheets  (Dollars in thousands, except unit amounts)

September 30, 2010

December 31, 2009ASSETS:Investment properties, at cost

$
27,432,323

$
25,336,189Less  accumulated depreciation


7,468,070


7,004,53419,964,253


18,331,655Cash and cash equivalents


1,011,574


3,957,718Tenant receivables and accrued revenue, net


383,168


402,729Investment in unconsolidated entities, at equity


1,412,207


1,468,577Deferred costs and other assets


1,366,085


1,155,587Note receivable from related party


651,000


632,000Total assets

$
24,788,287

$
25,948,266LIABILITIES:Mortgages and other indebtedness

$
17,485,466

$
18,630,302Accounts payable, accrued expenses, intangibles, and deferred revenue


984,240


987,530Cash distributions and losses in partnerships and joint ventures, at equity


411,023


457,754Other liabilities and accrued distributions


214,009


159,345Total liabilities


19,094,738


20,234,931Commitments and contingenciesPreferred units, various series, at liquidation value, and noncontrolling redeemable interests in properties


85,687


530,373EQUITY:Partners' EquityPreferred units, 796,948 units outstanding. Liquidation value of $39,847


45,458


45,704General Partner, 292,901,883 and 285,748,271 units outstanding, respectively


4,759,598


4,412,433Limited Partners, 60,273,418 and 57,804,779 units outstanding, respectively


979,431


892,603Total partners' equity


5,784,487


5,350,740Nonredeemable noncontrolling deficit interests in properties, net


(176,625
)

(167,778
)Total equity


5,607,862


5,182,962Total liabilities and equity

$
24,788,287

$
25,948,266


The accompanying notes are an integral part of these statements.

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Simon Property Group, L.P. and SubsidiariesUnaudited Consolidated Statements of Operations and Comprehensive Income  (Dollars in thousands, except per unit
amounts)

For the Three Months
Ended September 30,

For the Nine Months
Ended September 30,2010

2009

2010

2009REVENUE:Minimum rent

$
605,146

$
570,100

$
1,756,913

$
1,709,147Overage rent


26,265


19,806


53,953


45,799Tenant reimbursements


274,013


268,611


785,634


784,905Management fees and other revenues


29,980


29,988


86,897


90,694Other income


43,871


36,427


154,515


116,491Total revenue


979,275


924,932


2,837,912


2,747,036EXPENSES:Property operating


115,647


113,815


315,649


326,798Depreciation and amortization


243,303


250,151


706,402


758,173Real estate taxes


86,680


79,854


255,067


251,173Repairs and maintenance


20,200


19,151


64,550


61,925Advertising and promotion


21,435


23,226


62,553


61,555(Recovery of) provision for credit losses


(3,096
)

(745
)

(2,060
)

19,336Home and regional office costs


28,640


26,899


72,699


79,732General and administrative


5,170


4,509


15,909


13,867Impairment charge











140,478Transaction expenses


47,585





62,554


Other


15,917


15,895


44,412


52,908Total operating expenses


581,481


532,755


1,597,735


1,765,945OPERATING INCOME


397,794


392,177


1,240,177


981,091Interest expense


(249,264
)

(257,881
)

(774,686
)

(728,360
)Loss on extinguishment of debt


(185,063
)




(350,688
)

Income tax benefit of taxable REIT subsidiaries


249


238


557


2,904Income from unconsolidated entities


22,533


4,655


50,729


15,694Gain upon acquisition of controlling interest, and on sale or disposal of assets and interests in unconsolidated entities, net


294,283





320,349


CONSOLIDATED NET INCOME


280,532


139,189


486,438


271,329Net income attributable to noncontrolling interests


2,119


2,700


7,342


8,064Preferred unit requirements


1,312


8,662


7,615


30,050NET INCOME ATTRIBUTABLE TO UNITHOLDERS

$
277,101

$
127,827

$
471,481

$
233,215NET INCOME ATTRIBUTABLE TO UNITHOLDERSATTRIBUTABLE TO:General Partner

$
230,624

$
105,547

$
392,501

$
191,555Limited Partners


46,477


22,280


78,980


41,660Net income attributable to unitholders

$
277,101

$
127,827

$
471,481

$
233,215BASIC EARNINGS PER UNITNet income attributable to unitholders

$
0.79

$
0.38

$
1.35

$
0.73DILUTED EARNINGS PER UNITNet income attributable to unitholders

$
0.79

$
0.38

$
1.35

$
0.73Consolidated net income

$
280,532

$
139,189

$
486,438

$
271,329Unrealized gain (loss) on interest rate hedge agreements


(12,475
)

4,883


7,505


(6,346
)Net loss on derivative instruments reclassified from accumulated other comprehensive loss into interest expense


(3,937
)

(3,769
)

(11,722
)

(10,816
)Currency translation adjustments


11,041


5,928


(12,469
)

695Changes in available-for-sale securities and other


57,216


38,362


(10,736
)

204,965Comprehensive income


332,377


184,593


459,016


459,827Comprehensive income attributable to noncontrolling interests


2,119


2,700


7,342


8,064Comprehensive income attributable to unitholders

$
330,258

$
181,893

$
451,674

$
451,763


The accompanying notes are an integral part of these statements.

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Simon Property Group, L.P. and SubsidiariesUnaudited Consolidated Statements of Cash Flows  (Dollars in thousands)

For the Nine Months Ended September 30,2010

2009CASH FLOWS FROM OPERATING ACTIVITIES:Consolidated net income

$
486,438

$
271,329Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization


731,393


765,325Loss on debt extinguishment


350,688


Impairment charge





140,478Gain upon acquisition of controlling interest, and on sale or disposal of assets and interests in unconsolidated entities, net


(320,349
)

Straight-line rent


(18,467
)

(20,376
)Equity in income of unconsolidated entities


(50,729
)

(15,694
)Distributions of income from unconsolidated entities


76,811


75,883Changes in assets and liabilities Tenant receivables and accrued revenue, net


39,692


83,518Deferred costs and other assets


(5,536
)

(38,415
)Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities


(4,469
)

79,236Net cash provided by operating activities


1,285,472


1,341,284CASH FLOWS FROM INVESTING ACTIVITIES:Acquisitions


(976,276
)

Funding of loans to related parties


(29,500
)

(120,000
)Repayments of loans from related parties


10,500


4,700Capital expenditures, net


(193,893
)

(313,124
)Cash from acquisitions and cash impact from the consolidation of properties


27,015


Net proceeds from sale of assets and interest in unconsolidated entities


301,425


Investments in unconsolidated entities


(185,959
)

(16,569
)Purchase of marketable and non-marketable securities


(14,939
)

(132,984
)Sale of marketable securities


26,175


44,446Distributions of capital from unconsolidated entities and other


165,304


162,827Net cash used in investing activities


(870,148
)

(370,704
)CASH FLOWS FROM FINANCING ACTIVITIES:Issuance of units


3,443


1,639,376Preferred unit redemptions


(10,994
)

(87,689
)Distributions to noncontrolling interest holders in properties


(16,971
)

(21,668
)Contributions from noncontrolling interest holders in properties


352


2,798Partnership distributions


(635,500
)

(136,880
)Loss on debt extinguishment


(350,688
)

Mortgage and other indebtedness proceeds, net of transaction costs


3,742,137


3,121,880Mortgage and other indebtedness principal payments


(6,093,247
)

(2,516,248
)Net cash (used in) provided by financing activities


(3,361,468
)

2,001,569(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS


(2,946,144
)

2,972,149CASH AND CASH EQUIVALENTS, beginning of period


3,957,718


773,544CASH AND CASH EQUIVALENTS, end of period

$
1,011,574

$
3,745,693


The accompanying notes are an integral part of these statements.

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Simon Property Group, L.P. and Subsidiaries
Condensed Notes to Consolidated Financial Statements
(Unaudited)

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

1.     Organization

Simon Property Group, L.P. is a Delaware limited partnership and the majority-owned subsidiary of Simon Property Group, Inc. In these condensed notes to
the unaudited consolidated financial
statements, the terms "Operating Partnership", "we", "us" and "our" refer to Simon Property Group, L.P. and its subsidiaries and the term "Simon Property" refers to Simon Property
Group, Inc. Simon Property, a Delaware corporation, is a self-administered and self-managed real estate investment trust, or REIT, under the Internal Revenue Code, as amended. According to our
partnership agreement, we are required to pay all expenses of Simon Property.

We
own, develop and manage retail real estate properties, which consist primarily of regional malls, Premium Outlets®, The Mills®, and community/lifestyle
centers. As of September 30, 2010, we owned or held an interest in 338 income-producing properties in the United States, which consisted of 161 regional malls, 42 Premium Outlets, 66
community/lifestyle centers, 36 properties acquired in the 2007 acquisition of The Mills Corporation, or the Mills acquisition, 21 properties acquired in the 2010 acquisition of Prime Outlets
Acquisition Company, or Prime, and 12 other shopping centers or outlet centers in 41 states and Puerto Rico. Of the 36 properties acquired in the Mills portfolio, 16 of these properties are The Mills,
16 are regional malls, and four are community centers. Internationally, as of September 30, 2010, we had ownership interests in 45 European shopping centers in Italy, eight Premium Outlets in
Japan, one Premium Outlet in Mexico, and one Premium Outlet in South Korea. On July 15, 2010, as discussed in Note 9, we and our joint venture partner, Ivanhoe Cambridge, Inc., or
Ivanhoe Cambridge, sold our collective interests in Simon Ivanhoe S.à.r.l., or Simon Ivanhoe, which owned seven shopping centers located in France and Poland.

2.     Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of all majority-owned subsidiaries, and all significant intercompany amounts
have been eliminated. Due to the seasonal nature of certain operational activities, the results for the interim period ended September 30, 2010 are not necessarily indicative of the results to
be expected for the full year.

These
consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by accounting
principles generally accepted in the United States (GAAP) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the
opinion of management, all adjustments necessary for fair presentation (including normal recurring accruals) have been included. The consolidated financial statements in this Form 10-Q should be read
in conjunction with the audited consolidated financial statements and related notes contained in our 2009 Annual Report on Form 10-K.

As
of September 30, 2010, we consolidated 218 wholly-owned properties and 19 additional properties that are less than wholly-owned, but which we control or for which we are the
primary beneficiary. We account for the remaining 156 properties, or the joint venture properties, using the equity method of accounting. We manage the day-to-day operations of 92 of the 156 joint
venture properties, but have determined that our partner or partners have substantive participating rights with respect to the assets and operations of these joint venture properties. Our investments
in joint ventures in Europe, Japan, Mexico, and Korea comprise 55 of the remaining 64 properties. The international properties are managed locally by joint ventures in which we share oversight
responsibility with our partner. Additionally, we account for our investment in SPG-FCM Ventures, LLC, or SPG-FCM, which acquired The Mills Corporation and its

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wholly-owned
subsidiary, The Mills Limited Partnership, collectively Mills, in April 2007, using the equity method of accounting. We have determined that SPG-FCM is not a variable interest entity
(VIE) and that Farallon Capital Management, L.L.C., or Farallon, our joint venture partner, has substantive participating rights with respect to the assets and operations of SPG-FCM pursuant to
the applicable partnership agreements.

We
allocate net operating results after preferred distributions based on partners' respective weighted average ownership. Simon Property owns a majority of our units of partnership
interest, or units, and certain series of our preferred units of partnership interest, or preferred units. Simon Property's weighted average ownership interest in us was 83.3% and 82.1% for the nine
months ended September 30, 2010 and 2009, respectively. As of September 30, 2010 and December 31, 2009, Simon Property's ownership interest in us was 82.9% and 83.2%,
respectively. We adjust the noncontrolling limited partners' interests at the end of each period to reflect their respective interests in us.

Preferred
unit requirements in the accompanying consolidated statements of operations and cash flows represent distributions on outstanding preferred units of partnership interests held
by limited partners and are recorded when declared.



We made certain reclassifications of prior period amounts in the consolidated financial statements to conform to the 2010 presentation.
These reclassifications had no impact on previously reported net income available to unitholders or earnings per unit.

3.     Significant Accounting Policies



We consider all highly liquid investments purchased with an original maturity of 90 days or less to be cash and cash equivalents. Cash
equivalents are carried at cost, which approximates fair value. Cash equivalents generally consist of commercial paper, bankers acceptances, Eurodollars, repurchase agreements, and money markets. Our
gift card programs are administered by banks. We collect gift card funds at the point of sale and then remit those funds to the banks for further processing. As a result, cash and cash equivalents, as
of September 30, 2010, include a balance of $39.3 million related to these gift card programs which we do not consider available for general working capital purposes. Financial instruments that
potentially subject us to concentrations of credit risk include our cash and cash equivalents and our trade accounts receivable. We place our cash and cash equivalents with institutions with high
credit quality. However, at certain times, such cash and cash equivalents may be in excess of FDIC and SIPC insurance limits.



Marketable securities consist primarily of the investments of our captive insurance subsidiaries, available-for-sale securities, our
deferred compensation plan investments, and certain investments held to fund the debt service requirements of debt previously secured by investment properties that have been sold.

The
types of securities included in the investment portfolio of our captive insurance subsidiaries typically include U.S. Treasury or other U.S. government securities as well as
corporate debt securities with maturities ranging from less than 1 to 10 years. These securities are classified as available-for-sale and are valued based upon quoted market prices or other observable
inputs when quoted market prices are not available. The amortized cost of debt securities, which approximates fair value, held by our captive insurance subsidiaries is adjusted for amortization of
premiums and accretion of discounts to maturity. Changes in the values of these securities are recognized in accumulated other comprehensive income (loss)

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until
the gain or loss is realized or until any unrealized loss is deemed to be other-than-temporary. We review any declines in value of these securities for other-than-temporary impairment and
consider the severity and duration of any decline in value. To the extent an other-than-temporary impairment is deemed to have occurred, an impairment charge is recorded and a new cost basis is
established.
Subsequent changes are then recognized through other comprehensive income (loss) unless another other-than-temporary impairment is deemed to have occurred.

Our
investment in shares of Liberty International PLC, or Liberty, was also accounted for as an available-for-sale security. Effective at the close of business May 7, 2010, Liberty
completed a demerger in which it was separated into two companies, Capital Shopping Centres Group PLC, or CSCG, and Capital & Counties Properties PLC, or CAPC. Liberty shareholders acquired the same
number of shares of CSCG and CAPC as they owned in Liberty. Our interests in CSCG and CAPC are adjusted to their quoted market price, including a related foreign exchange component. At
September 30, 2010, we owned 35.4 million shares of CSCG at a carrying cost of £3.03 per share, and 35.4 million shares of CAPC at a carrying cost of £0.94 per share.
The mark-to-market adjustment from June 30, 2010 through September 30, 2010 was a $55.0 million increase in the value of our investments with a corresponding adjustment in other
comprehensive income (loss). The market value of our investments in CSCG and CAPC was $205.5 million and $73.3 million, respectively, at September 30, 2010. Our aggregate net unrealized gain on
these investments was approximately $47.0 million at September 30, 2010. The carrying value of our investment in Liberty at December 31, 2009 was $290.0 million with an unrealized gain
of $58.2 million.

Our
insurance subsidiaries are required to maintain statutory minimum capital and surplus as well as maintain a minimum liquidity ratio. Therefore, our access to these securities may be
limited. Our deferred compensation plan investments are classified as trading securities and are valued based upon quoted market prices. The investments have a matching liability as the amounts are
fully payable to the employees that earned the compensation. Changes in value of these securities and changes to the matching liability to employees are both recognized in earnings and, as a result,
there is no impact to consolidated net income. As of September 30, 2010 and December 31, 2009, we also had investments of $25.1 million and $51.7 million, respectively, which must be
used to fund the debt service requirements of mortgage debt related to investment properties that previously collateralized the debt. These investments are classified as held-to-maturity and are
recorded at amortized cost as we have the ability and intent to hold these investments to maturity.

At
September 30, 2010 we had an investment of $72.4 million in a non-marketable security that we account for under the cost method. We regularly evaluate this investment for any
other-than-temporary decline in its estimated fair value.

Net
unrealized gains as of September 30, 2010 and December 31, 2009 were approximately $48.6 million and $59.4 million, respectively, and represented the valuation and
related currency adjustments for our marketable securities. As of September 30, 2010, we do not consider declines in value of any of our marketable and non-marketable securities to be an
other-than-temporary impairment, as these market value declines, if any, have existed for a short period of time, and, in the case of debt securities, we have the ability and intent to hold these
securities to maturity.



From time to time, we may make investments in mortgage loans or mezzanine loans of entities that own and operate commercial real estate
assets located in the United States. Mortgage loans are secured, in part, by mortgages recorded against the underlying properties. Mezzanine loans are secured, in part, by pledges of ownership
interests of the entities that own the underlying real estate. Loans held for investment are carried at cost, net of any premiums or discounts which are accreted or amortized over the life of the
related loan receivable utilizing the effective interest method. We evaluate the collectability of both interest and principal of each of our loans quarterly to determine whether the value has been

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impaired.
A loan is deemed to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the existing contractual terms.
When a loan is impaired, the amount of the loss accrual is calculated by comparing the carrying amount of the loan held for investment to its estimated fair value.

Subsequent
to the period ended September 30, 2010, we made investments in six mortgage and mezzanine loans with an aggregate carrying value of $356.1 million. These loans mature
at various dates through October 2012 with a weighted average maturity of approximately 13 months. Certain of these loans require interest-only payments while others require payments of interest and
principal based on a 30 year amortization. The weighted average interest rate on these loans is approximately 5.9% which approximates market rates for instruments of similar quality and duration.
Payments on each of these loans were current as of the date of our investment.



We hold marketable securities that totaled $474.3 million and $464.1 million at September 30, 2010 and December 31, 2009,
respectively, and are considered to have Level 1 fair value inputs. In addition, we have derivative instruments which are classified as having Level 2 inputs which consist primarily of interest rate
swap agreements and foreign currency forward contracts with a gross liability balance of $37.4 million and $13.0 million at September 30, 2010 and December 31, 2009, respectively, and
minimal asset value at September 30, 2010 and $0.3 million at December 31, 2009. We also have interest rate cap agreements with a minimal asset value. Level 1 fair value inputs are
quoted prices for identical items in active, liquid and visible markets such as stock exchanges. Level 2 fair value inputs are observable information for similar items in active or inactive markets,
and appropriately consider counterparty creditworthiness in the valuations. Level 3 fair value inputs reflect our best estimate of inputs and assumptions market participants would use in pricing an
asset or
liability at the measurement date. The inputs are unobservable in the market and significant to the valuation estimate. Note 6 includes a discussion of the fair value of debt.



In addition to noncontrolling redeemable interests in properties, we classify our 6% Series I Convertible Perpetual Preferred
Units, or Series I preferred units, and our 7.5% Cumulative Redeemable Preferred Units, or 7.5% preferred units, in temporary equity due to the possibility that we could be required to redeem
the securities for cash. Prior to their redemption, as further discussed in Note 7, the holders of the Series I preferred units had the ability to redeem this series of preferred units
for cash upon the occurrence of a change in control event, which included a change in the majority of the directors on Simon Property's Board of Directors, or the Board, that occurs over a two year
period. Such a change in Board composition could be deemed outside of our control. For the 7.5% preferred units, the redemption of preferred units requires the delivery of fully registered shares of
Simon Property common stock. The previous and current carrying amounts of both of these series of preferred units are equal to their liquidation value, which is the amount payable upon the occurrence
of any event that could potentially result in cash settlement.

Our
evaluation of the appropriateness of classifying the units held by Simon Property and limited partners within permanent equity considered several significant factors in determining
the appropriate classification of those units in the consolidated balance sheets. First, as a limited partnership, all routine decisions relating to our operations and distributions are made by Simon
Property, acting as our sole General Partner. The decisions of the General Partner are made by the Board and Simon Property's management. We have no other governance structure. Secondly, the sole
asset of Simon Property is its interest in us. As a result, a share of Simon Property common stock (if owned by us) is best characterized as being similar to a treasury share and thus not an asset of
the Operating Partnership.

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Limited
partners have the right under our partnership agreement to exchange their units for shares of Simon Property common stock or cash as selected by the General Partner. Accordingly,
we classify limited partner units in permanent equity because we have the unrestricted ability to issue shares of Simon Property common stock to limited partners exercising their exchange rights
rather than using cash or other assets. Under our partnership agreement, we are required to redeem units held by Simon Property only when Simon Property has redeemed shares of its common stock. We
classify units held by Simon Property in permanent equity because the decision to redeem those units would be made through our governance structure, with Simon Property making the decision on our
behalf.

Net
income attributable to noncontrolling interests (which includes nonredeemable noncontrolling interests in consolidated properties) is a component of consolidated net income. In
addition, the individual components of other comprehensive income (loss) are presented in the aggregate for both controlling and noncontrolling interests, with the portion attributable to
noncontrolling interests deducted from comprehensive income (loss) attributable to unitholders.

A
rollforward of noncontrolling nonredeemable interests is as follows:

For the Three Months
Ended September 30,

For the Nine Months
Ended September 30,2010

2009

2010

2009Noncontrolling nonredeemable deficit interests in properties, net  beginning of period

$
(172,913
)
$
(153,801
)
$
(167,778
)
$
(150,810
)Net income attributable to noncontrolling nonredeemable interests


2,119


2,700


7,342


8,064Distributions to noncontrolling nonredeemable interestholders


(5,832
)

(5,592
)

(16,542
)

(16,569
)Other


1


92


353


2,714Noncontrolling nonredeemable deficit interests in properties, net  end of period

$
(176,625
)
$
(156,601
)
$
(176,625
)
$
(156,601
)




We record all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on
the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the
criteria necessary to apply hedge accounting. We use a variety of derivative financial instruments in the normal course of business primarily to manage
or hedge the risks associated with our indebtedness and interest payments. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to
interest rate movements. To accomplish this objective, we primarily use interest rate swaps and caps. We require that hedging derivative instruments be highly effective in reducing the risk exposure
that they are designated to hedge. As a result, there was no significant ineffectiveness from any of our derivative activities during the period. We formally designate any instrument that meets these
hedging criteria as a hedge at the inception of the derivative contract. We have no credit-risk-related hedging or derivative activities.

As
of September 30, 2010, we had the following outstanding interest rate derivatives related to interest rate risk:

Interest Rate Derivative

Number of Instruments

Notional AmountInterest Rate Swaps


4

$
692.9 millionInterest Rate Caps


3

$
385.8 million


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The
carrying value of our interest rate swap agreements, at fair value, is included within other liabilities and was $24.8 million and $13.0 million at September 30, 2010 and
December 31, 2009, respectively. At December 31, 2009, we also had interest rate swaps with a carrying value of $0.3 million within deferred costs and other assets. The interest rate cap
agreements were of no net value at September 30, 2010 and December 31, 2009 and we generally do not apply hedge accounting to these arrangements. The total gross accumulated other
comprehensive loss related to our derivative activities, including our share of the other comprehensive loss from joint venture properties, approximated $56.6 million and $52.3 million as of
September 30, 2010 and December 31, 2009, respectively.

We
are also exposed to fluctuations in foreign exchange rates on financial instruments which are denominated in foreign currencies, primarily in Japan and Europe. We use currency forward
contracts to manage our exposure to changes in foreign exchange rates on certain Yen and Euro-denominated receivables and net investments. Currency forward contracts involve fixing the Yen-USD or
Euro-USD exchange rate for delivery of a specified amount of foreign currency on a specified date. The currency forward contracts are typically cash settled in US dollars for their fair value at or
close to their settlement date. We entered into Yen-USD forward contracts during 2009 for approximately ¥3 billion that we expect to receive through April 2011 at an average exchange rate
of 97.1 JPY:USD. We entered into Yen-USD forward contracts during 2010 for an additional ¥1.7 billion that we expect to receive through October 2012 at an average exchange rate of 89.0
JPY:USD. Approximately ¥1.9 billion remains as of September 30, 2010 for both the 2009 and 2010 contracts. The September 30, 2010 liability balance related to these forwards
was $1.6 million and is included in other liabilities and accrued distributions. We have reflected the changes in
fair value for these forward contracts in earnings. The underlying currency adjustments on the foreign-denominated receivables are also reflected in income and generally offset the amounts in earnings
for these forward contracts. During the third quarter of 2010, we entered into two Euro-USD forward contracts with an aggregate €200.0 million notional value maturing on
June 30, 2011 which were designated as net investment hedges. The September 30, 2010 liability balance related to these forwards was $11.0 million and is included in other liabilities
and accrued distributions. We apply hedge accounting and the changes in fair value for these forward contracts are reflected in other comprehensive income (loss). Changes in the value of these hedges
are offset by changes in the underlying hedged Euro-denominated joint venture investment.



We expense acquisition, potential acquisition and disposition related costs as they are incurred. During the three and nine months
ended September 30, 2010, we incurred costs for the acquisition of Prime as further discussed in Note 9. Additionally, during the three months ended September 30, 2010, we
settled, in cash, a transaction-related dispute and recorded a charge to earnings. These expenses are included within transaction expenses in the accompanying statements of operations and
comprehensive income and totaled $47.6 million and $62.6 million during the three and nine months ended September 30, 2010, respectively.

4.     Per Unit Data

We determine basic earnings per unit based on the weighted average number of units outstanding during the period and we consider any participating securities for
purposes of applying the two-class method. We determine diluted earnings per unit based on the weighted average number of units outstanding combined with the incremental weighted average units that
would have been outstanding

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assuming
all potentially dilutive units were converted into units at the earliest date possible. The following table sets forth the computation of our basic and diluted earnings per unit.

For the Three Months Ended
September 30,

For the Nine Months Ended
September 30,2010

2009

2010

2009Net Income Attributable to Unitholders  Basic & Dilutive

$
277,101

$
127,827

$
471,481

$
233,215Weighted Average Units Outstanding  Basic


352,003,179


338,766,765


348,896,394


318,198,075Effect of stock options of Simon Property


258,710


336,896


287,505


291,433Effect of contingently issuable units from unit distributions





850,185





1,544,458Weighted Average Units Outstanding  Diluted


352,261,889


339,953,846


349,183,899


320,033,966


For
the nine months ended September 30, 2010, potentially dilutive securities include options to purchase shares of Simon Property common stock, units granted under our long-term
incentive performance programs and preferred units that are convertible into units. The only securities that had a dilutive effect for the three and nine months ended September 30, 2010 were
stock options of Simon Property. For the three and nine months ended September 30, 2009, the only securities that had a
dilutive effect were stock options of Simon Property and contingently issuable units from unit distributions. We accrue distributions when they are declared.

5.     Investment in Unconsolidated Entities



Joint ventures are common in the real estate industry. We use joint ventures to finance properties, develop new properties, and
diversify our risk in a particular property or portfolio. We held joint venture ownership interests in 101 properties in the United States as of September 30, 2010 and 103 properties as of
December 31, 2009. We also held an interest in a joint venture which owned 45 European shopping centers as of September 30, 2010 and held an interest in two joint ventures which owned 51
European shopping centers as of December 31, 2009. At September 30, 2010, we also held interests in eight joint venture properties in Japan, one joint venture property in Mexico, and one
joint venture property in South Korea. We account for these joint venture properties using the equity method of accounting.

Substantially
all of our joint venture properties are subject to rights of first refusal, buy-sell provisions, or other sale or marketing rights for partners which are customary in real
estate joint venture agreements and the industry. Our partners in these joint ventures may initiate these provisions at any time (subject to any applicable lock up or similar restrictions), which
could result in either the sale of our interest or the use of available cash or borrowings to acquire a joint venture interest from our partner.

In
May 2010, Opry Mills Mall, a property in which we have a 50% interest through our SPG-FCM joint venture, sustained significant flood damage and remains closed. Insurance proceeds of
$50 million have been funded by the insurers and remediation work has been completed. The excess insurance carriers (those providing coverage above $50 million) have denied the joint venture's claim
for additional proceeds (of up to $150 million) to pay further amounts for restoration costs and business interruption losses. We believe recovery under the insurance coverage is probable, but no
assurances can be made in that regard.

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As part of the Mills acquisition, we made loans to SPG-FCM and Mills which were used by SPG-FCM and Mills to repay loans and other
obligations of Mills, including the redemption of preferred stock. As of September 30, 2010 and December 31, 2009, the outstanding balance of our remaining loan to SPG-FCM was $651.0
million and $632.0 million, respectively. During the nine months ended September 30, 2010 and 2009, we recorded approximately $7.4 million and $6.9 million in interest income (net of
inter-entity eliminations), related to this loan, respectively. The loan bears interest at a rate of LIBOR plus 275 basis points and matures on June 8, 2011, and can be extended for one year.



We account for all of our international joint venture investments using the equity method of accounting and we conduct our
international operations through joint venture arrangements.

European Joint Ventures.We have a 49% ownership interest in Gallerie Commerciali Italia, or GCI. The carrying amount of our
investment in GCI was
$314.5 million and $302.2 million as of September 30, 2010 and December 31, 2009, respectively, including all related components of accumulated other comprehensive income (loss). As
further discussed in Note 9, we sold our interest in Simon Ivanhoe on July 15, 2010.

Asian Joint Ventures.We conduct our international Premium Outlet operations in Japan through our 40% participation in a joint
venture with
Mitsubishi Estate Co., Ltd. The carrying amount of our investment in this joint venture was $324.7 million and $302.2 million as of September 30, 2010 and December 31, 2009,
respectively, including all related components of accumulated other comprehensive income (loss). As of September 30, 2010 and December 31, 2009, respectively, our investment in our
Premium Outlet in Korea, for which we hold a 50% ownership interest, approximated $30.3 million and $26.1 million including all related components of accumulated other comprehensive income (loss).

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A summary of our investments in joint ventures and share of income from such joint ventures follows. Consolidation occurs when we
acquire an additional interest in the joint venture and as a result, gain control of the property or become the primary beneficiary of a VIE. Balance sheet information for the joint ventures is as
follows:

September 30,
2010

December 31,
2009BALANCE SHEETSAssets:Investment properties, at cost

$
21,120,220

$
21,555,729Less  accumulated depreciation


4,941,621


4,580,67916,178,599


16,975,050Cash and cash equivalents


795,166


771,045Tenant receivables and accrued revenue, net


339,448


364,968Investment in unconsolidated entities, at equity


177,136


235,173Deferred costs and other assets


535,925


477,223Total assets

$
18,026,274

$
18,823,459Liabilities and Partners' Equity:Mortgages and other indebtedness

$
15,862,783

$
16,549,276Accounts payable, accrued expenses, intangibles, and deferred revenue


778,213


834,668Other liabilities


921,254


920,596Total liabilities


17,562,250


18,304,540Preferred units


67,450


67,450Partners' equity


396,574


451,469Total liabilities and partners' equity

$
18,026,274

$
18,823,459Our Share of:Partners' equity

$
235,502

$
316,800Add: Excess Investment


765,682


694,023Our net Investment in Joint Ventures

$
1,001,184

$
1,010,823


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"Excess Investment" represents the unamortized difference of our investment over our share of the equity in the underlying net assets of the joint ventures
acquired. We amortize excess investment over the life of the related properties, typically no greater than 40 years, and the amortization is included in the reported amount of income from
unconsolidated entities.

For the Three Months
Ended September 30,

For the Nine Months
Ended September 30,2010

2009

2010

2009STATEMENTS OF OPERATIONSRevenue:Minimum rent

$
478,869

$
488,052

$
1,457,987

$
1,445,618Overage rent


38,283


34,204


94,620


85,141Tenant reimbursements


234,769


243,201


699,384


719,845Other income


77,518


37,039


176,245


115,946Total revenue


829,439


802,496


2,428,236


2,366,550Operating Expenses:Property operating


167,653


178,291


477,386


489,616Depreciation and amortization


195,679


194,727


591,763


580,215Real estate taxes


61,080


57,262


191,779


190,036Repairs and maintenance


21,869


26,413


75,643


77,048Advertising and promotion


13,027


16,005


43,250


44,936(Recovery of) provision for credit losses


(721
)

3,523


718


18,910Other


50,507


43,487


155,688


131,680Total operating expenses


509,094


519,708


1,536,227


1,532,441Operating Income


320,345


282,788


892,009


834,109Interest expense


(218,238
)

(221,166
)

(653,419
)

(661,586
)(Loss) income from unconsolidated entities


(327
)

(3,170
)

(1,368
)

(2,383
)Gain on sale or disposal of assets (net) and interests in unconsolidated entities








39,761


Net Income

$
101,780

$
58,452

$
276,983

$
170,140Third-Party Investors' Share of Net Income

$
66,542

$
39,710

$
170,231

$
112,600Our Share of Net Income


35,238


18,742


106,752


57,540Amortization of Excess Investment


(12,695
)

(14,087
)

(35,676
)

(41,846
)Our Share of Gain on Sale or Disposal of Assets (net)


(10
)




(20,347
)

Income from Unconsolidated Entities

$
22,533

$
4,655

$
50,729

$
15,694


6.     Debt



Our unsecured debt currently consists of $10.0 billion of senior unsecured notes and $852.0 million outstanding under our
unsecured revolving credit facility, or the Credit Facility. The Credit Facility has a borrowing capacity of $3.9 billion and contains an accordion feature allowing the maximum borrowing
capacity to expand to $4.0 billion. The Credit Facility matures on March 31, 2013. The base interest on the Credit Facility is LIBOR plus 210 basis points and includes a facility fee of
40 basis points.

The
total outstanding balance of the Credit Facility as of September 30, 2010 was $852.0 million, and the maximum outstanding balance during the nine months ended
September 30, 2010 was $859.5 million.

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The
September 30, 2010 balance included $267.0 million (U.S. dollar equivalent) of Yen-denominated borrowings. Borrowings under the Credit Facility increased by
$352.0 million during the third quarter of 2010 primarily as a result of the acquisition of Prime partially offset by the repayment of €167.4 million (approximately
$215 million) principal balance on the Euro-denominated tranche of the Credit Facility as further discussed in Note 9. During the nine months ended September 30, 2010,
the weighted average outstanding balance on the Credit Facility was approximately $487.9 million.

On
January 12, 2010, we commenced a cash tender offer for any and all senior unsecured notes of ten outstanding series with maturity dates ranging from 2011 to March 2013. The
total principal amount of the notes accepted for purchase on January 26, 2010 was approximately $2.3 billion, with a weighted average duration of 2.0 years and a weighted average
coupon of 5.76%. We purchased the tendered notes with cash on hand and the proceeds from an offering of $2.25 billion of senior unsecured notes that closed on January 25, 2010. The
senior notes offering was comprised of $400.0 million of 4.20% notes due 2015, $1.25 billion of 5.65% notes due 2020 and $600.0 million of 6.75% notes due 2040. The weighted
average duration of the notes offering was 14.4 years and the weighted average coupon was 5.69%. We recorded a $165.6 million charge to earnings in the first quarter of 2010 as a result
of the tender offer.

On
March 18, 2010, we repaid a $300.0 million senior unsecured note, which had a fixed rate of 4.875%.

On
June 15, 2010, we repaid a $400.0 million senior unsecured note, which had a fixed rate of 4.60%.

On
August 16, 2010, we repaid a $400.0 million senior unsecured note, which had a fixed rate of 4.875%.

On
August 9, 2010, we commenced a cash tender offer for any and all senior unsecured notes of three outstanding series with maturity dates ranging from May 2013 to August 2014.
The total principal amount of the notes accepted for purchase on August 17, 2010 was approximately $1.33 billion, with a weighted average duration of 3.5 years and a weighted
average coupon of 6.06%. We purchased the tendered notes with cash on hand and the proceeds from an offering of $900.0 million of 4.375% senior unsecured notes that closed on August 16,
2010. The senior notes are due on March 1, 2021. We recorded a $185.1 million charge to earnings in the third quarter of 2010 as a result of the tender offer.



Total secured indebtedness was $6.6 billion at September 30, 2010 and December 31, 2009. During the nine months
ended September 30, 2010, we unencumbered five properties by repaying $1.1 billion in mortgage loans with a weighted average interest rate of 4.35%.

On
May 13, 2010, we acquired a property located in Barceloneta, Puerto Rico subject to an existing $75.2 million mortgage loan. The loan matures on May 1, 2014 and
bears interest at LIBOR plus 225 basis points with a LIBOR floor of 1.50%.

In
connection with our acquisition of Prime, we assumed existing mortgage loans of approximately $1.2 billion which bear interest at fixed rates ranging from 5.51% and 6.01% and
mature at various dates throughout 2016.



The carrying value of our variable-rate mortgages and other loans approximates their fair values. We estimate the fair
values of consolidated fixed-rate mortgages using cash flows discounted at current borrowing rates and other indebtedness using cash flows discounted at current market rates. We estimate
the fair values of consolidated fixed-rate unsecured notes using quoted market prices, or, if no quoted market prices are available, we use quoted market prices for securities with similar
terms and maturities. The book value of our consolidated fixed-rate mortgages and other indebtedness, excluding those with an

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associated
fixed to floating swap, was $14.8 billion and $16.1 billion as of September 30, 2010 and December 31, 2009, respectively. The fair values of financial
instruments and our related discount rate assumptions used in the estimation of fair value for our consolidated fixed-rate mortgages and other indebtedness as of September 30, 2010
and December 31, 2009 are summarized as follows:

September 30,
2010

December 31,
2009Fair value of fixed-rate mortgages and other indebtedness

$
16,361

$
16,580Weighted average discount rates assumed in calculation of fair value for fixed-rate mortgages


5.03
%

6.11
%


7.     Equity

During the first nine months of 2010, thirty-seven limited partners exchanged 192,122 of our units for an equal number of shares of Simon Property common stock.
These transactions increased Simon Property's ownership interest in us.

Holders
of the Series I preferred units had the right to convert their Series I preferred units into units or exchange the preferred units for shares of Simon Property's
Series I 6% Convertible Perpetual Preferred Stock from March 31, 2010 until the date the Series I preferred units were redeemed. The conversion right resulted from the closing
sale price of Simon Property's common stock exceeding the applicable
trigger price per share for a period of 20 trading days in the last 30 trading days of the prior quarter. Each Series I preferred unit was convertible into units at a conversion ratio of
..847495.

On
March 17, 2010, we announced that we would redeem all of the outstanding Series I preferred units on April 16, 2010. The redemption price was equal to the
liquidation value per unit plus accumulated and unpaid distributions through the redemption date or $50.4917 per unit.

Through
the redemption date of April 16, 2010, we issued 6,670,589 units as a result of the conversion of 7,871,276 Series I preferred units. In addition, we issued 862,292
units as a result of the conversion of 1,017,480 Series I preferred units into units at a conversion ratio of .847495.

On
May 13, 2010, we issued 77,798 units to the owners of Prime in connection with the acquisition of an outlet center located in Barceloneta, Puerto Rico.

On
August 30, 2010, we issued 1,720,671 units to the owners of Prime in connection with the acquisition of 20 outlet centers as discussed in Note 9.



Under the Simon Property Group, L.P. 1998 Stock Incentive Plan, or the Plan, on April 1, 2010 the Compensation Committee
of the Board awarded 1,449 restricted shares of Simon Property common stock to employees at a fair market value of $85.01 per share, and made a special award of 113,403 shares of restricted stock of
Simon Property to employees on March 16, 2010 at a fair market value of $84.18 per share. On May 6, 2010, Simon Property's non-employee Directors were awarded 8,137 shares of
restricted stock of Simon Property under this plan at a fair market value of $84.88 per share. The fair market value of the restricted stock awarded on March 16 and April 1, 2010 is
being recognized as expense over the four-year vesting service period. The fair market value of the restricted stock awarded on May 6, 2010 is being recognized as expense over a
one-year vesting service period. In accordance with our partnership agreement, we issued an equal number of units to Simon Property.

On
March 16, 2010, the Compensation Committee of the Board approved a Long-Term Incentive Performance Program, or LTIP Program, for certain of our senior executive
officers. Awards under the LTIP Program take the form of LTIP Units, a form of limited partnership interest issued by us. Awarded LTIP Units will be forfeited, in whole or in part, depending on the
extent to which Simon Property's total

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stockholder
return, or TSR, as defined, over the performance period exceeds certain performance targets. During the performance period, participants are entitled to receive 10% of the regular
quarterly distributions paid per unit. As a result, we account for these LTIP awards as participating securities under the two-class method of computing earnings per unit. Awarded LTIP
Units will be considered earned depending upon the extent to which the applicable TSR benchmarks are achieved during the performance period and, once earned, will become the equivalent of units after
a two year service-based vesting period, beginning after the end of the performance period. Units are exchangeable for shares of Simon Property's common stock on a one-for-one
basis, or cash, as selected by Simon Property.

The
Compensation Committee awarded LTIP Units under three LTIP Programs having one, two and three year performance periods, which end on December 31, 2010, 2011 and 2012. We refer
to these three programs as the one, two and three year 2010 LTIP Programs, or the 2010 LTIP Programs. After the end of each performance period, any earned LTIP Units will then be subject to
service-based vesting over a period of two years. One-half of the earned LTIP Units will vest on January 1 of each of the second and third years following the end of the applicable
performance period, subject to the participant maintaining employment with us through those dates.

The
awards made pursuant to the 2010 LTIP Programs have an aggregate grant date fair value, adjusted for estimated forfeitures and as determined in accordance with Financial Accounting
Standards Board Accounting Standards Codification Topic 718, of $7.2 million for the one-year program, $14.8 million for the two-year program and
$23.0 million for the three-year program. Grant date fair value was estimated based upon the results of a Monte Carlo model, and the resulting expense will be recorded regardless of
whether the TSR benchmarks are achieved. The grant date fair value is being amortized into expense over the period from the grant date to the date at which the awards, if any, become vested. During
the three months and nine months ended September 30, 2010, we recognized $3.1 million and $9.4 million, respectively, of compensation expense under the LTIP Programs.

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The following table provides a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to
partners and equity attributable to noncontrolling interests:

Preferred
Units

Simon Property
(Managing General
Partner)

Limited
Partners

Noncontrolling
interests

Total EquityBalance at January 1, 2010

$
45,704

$
4,412,433

$
892,603

$
(167,778
)
$
5,182,962Series I preferred units converted to units





393,564








393,564Series I preferred units converted to limited partner units








50,874





50,874Limited partner units converted to units





2,964


(2,964
)




Issuance of limited partner units








161,443





161,443Other


(246
)

4,759


7,179


353


12,045Adjustment to limited partners' interest from increased ownership in the Operating Partnership





99,097


(99,097
)




Distributions to limited partners, excluding preferred interests classified as temporary equity


(2,503
)

(522,957
)

(104,928
)

(16,542
)

(646,930
)Comprehensive income, excluding preferred distributions on temporary equity preferred units of $5,112


2,503


369,738


74,321


7,342


453,904Balance at September 30, 2010

$
45,458

$
4,759,598

$
979,431

$
(176,625
)
$
5,607,862


8.     Commitments and Contingencies



We are involved from time-to-time in various legal proceedings that arise in the ordinary course of our
business, including, but not limited to commercial disputes, environmental matters, and litigation in connection with transactions including acquisitions and divestitures. We believe that such
litigation, claims and administrative proceedings will not have a material adverse impact on our financial position or our results of operations. We record a liability when a loss is considered
probable and the amount can be reasonably estimated.



Our joint ventures typically fund their cash needs through secured debt financings obtained by and in the name of the joint venture
entity. The joint venture debt is secured by a first mortgage, is without recourse to the joint venture partners, and does not represent a liability of the partners, except to the extent the partners
or their affiliates expressly guarantee the joint venture debt. As of September 30, 2010, we guaranteed $61.3 million of the total joint venture related mortgage or other indebtedness of
$6.5 billion then outstanding.

9.     Real Estate Acquisitions and Dispositions

During the nine months ended September 30, 2010, we disposed of one regional mall, one community center, two other retail properties, and our interest in
eight international joint venture properties for an

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aggregate
net gain of $307.4 million. During the three months ended September 30, 2010, we also acquired a controlling interest in a previously unconsolidated regional mall which
resulted in a remeasurement of our previously held equity interest to fair value and corresponding gain of approximately $13.0 million. These gains are included in gain upon acquisition of
controlling interest and on sale or disposal of assets and interests in unconsolidated entities, net in the accompanying statements of operations and comprehensive income.

On
May 28, 2010, we acquired an additional interest of approximately 19% in Houston Galleria, located in Houston, Texas thereby increasing our noncontrolling interest from 31.5%
to 50.4%.

On
August 30, 2010, we completed our previously announced transaction to acquire 21 outlet centers from Prime, including a center located in Puerto Rico, which was acquired on
May 13, 2010. The transaction was valued at approximately $2.3 billion, including the assumption of existing mortgage indebtedness of $1.2 billion and the repayment of
$310.7 million of mortgage loans at closing.

We
paid aggregate consideration to Prime's owners of approximately $0.7 billion, comprised of 80% cash and 20% in units. We issued approximately 1.7 million units with an
issuance date fair value of approximately $154.5 million. We funded the cash portion of this acquisition through draws on our Credit Facility.

The
following table summarizes the amounts of assets acquired and liabilities assumed at the acquisition date:

Total(in millions)Investment properties

$
2,167Cash and cash equivalents


26Tenant receivables and accrued revenue, net


4Deferred costs and other assets (including intangibles)


234Total assets

$
2,431Mortgages and other indebtedness (including premium of $28)

$
1,270Accounts payable, accrued expenses, intangibles and other


29Other liabilities


18Total liabilities

$
1,317


Acquisition
related intangibles relate to in-place leases of $193.6 million and were recorded based on their estimated fair values and are reflected within deferred
costs and other assets in the accompanying financial statements. The weighted average useful life of these intangibles is approximately 6 years and is amortized over the remaining life of the
related leases on a straight-line basis and is included within depreciation and amortization in the consolidated statements of operations and comprehensive income.

We
recorded our acquisition of these 21 outlet centers using the acquisition method of accounting. Tangible and intangible assets and liabilities were established based on their
estimated fair values at the date of acquisition. The results of operations of the acquired properties have been included in our consolidated results from the date of acquisition. The purchase price
allocations are not finalized and are subject to change within the measurement period, not to exceed one year from the date of acquisition.

On
July 15, 2010, we and our partner in Simon Ivanhoe, Ivanhoe Cambridge, sold our collective interests in Simon Ivanhoe which owned seven shopping centers located in France and
Poland to Unibail-Rodamco. The joint venture partners received net consideration of €422.5 million for their interests after the repayment of all joint venture debt, subject to
certain post-closing adjustments. Our share of the gain on sale of our interests in Simon Ivanhoe was approximately $281 million. A portion of the proceeds was

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used
to repay the €167.4 million (approximately $215 million) principal balance on the Euro-denominated tranche of our Credit Facility.

10.   Recently Issued Accounting Pronouncement

On January 1, 2010, we adopted the amendment on the accounting and disclosure requirements for the consolidation of variable interest entities (VIEs). This
amendment requires an enterprise to perform a qualitative analysis when determining whether or not it must consolidate a VIE. The amendment also requires an enterprise to continuously reassess whether
it must consolidate a VIE. Additionally, the amendment requires enhanced disclosures about an enterprise's involvement with VIEs and any significant change in risk exposure due to that involvement, as
well as how its involvement with VIEs impacts the enterprise's financial statements. Finally, an enterprise will be required to disclose significant judgments and assumptions used to determine whether
or not to consolidate a VIE. The adoption of this amendment did not have a significant impact on our financial position, results of operations, or cash flows.

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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion in conjunction with the financial statements and notes thereto included in this report.

Overview

Simon Property Group, L.P. is a Delaware limited partnership and the majority-owned partnership subsidiary of Simon Property
Group, Inc. In this discussion, the terms
"Operating Partnership", "we", "us" and "our" refer to Simon Property Group, L.P. and its subsidiaries and the term "Simon Property" refers specifically to Simon Property Group, Inc.

We
own, develop, and manage retail real estate properties, which consist primarily of regional malls, Premium Outlets®, The Mills®, and community/lifestyle
centers. As of September 30, 2010, we owned or held an interest in 338 income-producing properties in the United States, which consisted of 161 regional malls, 42 Premium Outlets, 66
community/lifestyle centers, 36 properties acquired in the 2007 acquisition of The Mills Corporation, or Mills, 21 properties acquired in the 2010 acquisition of Prime Outlets Acquisition Company, or
Prime, and 12 other shopping centers or outlet centers in 41 states and Puerto Rico. Of the 36 properties in the Mills portfolio, 16 of these properties are The Mills, 16 are regional malls, and four
are community centers. Internationally, as of September 30, 2010, we had ownership interests in 45 European shopping centers in Italy, eight Premium Outlets in Japan, one Premium Outlet
in Mexico, and one Premium Outlet in South Korea. On July 15, 2010, we and our joint venture partner sold our collective interests in Simon Ivanhoe S.à.r.l., or Simon Ivanhoe,
which owned seven shopping centers located in France and Poland.

We
generate the majority of our revenues from leases with retail tenants including:



Revenues
of our management company, after intercompany eliminations, consist primarily of management fees that are typically based upon a percentage of the revenues of the property being
managed.

We
seek growth in earnings and cash flows by enhancing the profitability and operation of our properties and investments. We seek to accomplish this growth through the
following:



We
also grow by generating supplemental revenues from the following activities:



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We
focus on high quality real estate across the retail real estate spectrum. We expand or renovate to enhance profitability and market share of existing assets when we believe the
investment of our capital meets our risk-reward criteria. We selectively develop new properties in metropolitan areas that exhibit strong population and economic growth.

We
routinely review and evaluate acquisition opportunities based on their ability to complement our portfolio. Our international strategy includes partnering with established real estate
companies and financing international investments with local currency to minimize foreign exchange risk.

To
support our growth, we employ a three-fold capital strategy:





Diluted earnings per unit of limited partnership interest, or units, increased $0.62 during the first nine months of 2010, or 84.9%, to
$1.35 from $0.73 for the same period last year. Significant factors contributing to the year-over-year change included:



Core
business fundamentals during the first nine months of 2010 improved from the difficult economic environment that existed during the first nine months of 2009. Comparable sales per
square foot, or psf, increased to $483 psf, or 7.6%, for our Regional Malls and Premium Outlets. Average base rents increased 0.9% to $38.69 psf as of September 30, 2010, from $38.35 psf as of
September 30, 2009. Leasing spreads remained positive as we were able to lease available square feet at higher rents than the expiring rental rates resulting in a leasing spread of $1.13 psf as
of September 30, 2010, representing a 2.8% increase over expiring rents. Occupancy was 93.6% as of September 30, 2010, as compared to 92.8% as of September 30, 2009, an increase
of 80 basis points.

Our
effective overall borrowing rate at September 30, 2010 decreased two basis points to 5.60% as compared to 5.62% at September 30, 2009. This decrease was primarily due
to a $1.4 billion decrease in our portfolio of fixed rate debt ($15.5 billion at September 30, 2010 as compared to $16.9 billion at September 30, 2009) that was
offset in part by an increase in effective overall borrowing rate on variable rate debt of 82 basis points (1.93% at September 30, 2010 as compared to 1.11% at September 30, 2009) as a
result of increased borrowing spreads and LIBOR floors. At September 30, 2010, the weighted average

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years
to maturity of our consolidated indebtedness was approximately 5.9 years as compared to December 31, 2009 of approximately 4.1 years. Our financing activities for the nine
months ended September 30, 2010, included:



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The portfolio data discussed in this overview includes the following key operating statistics: occupancy, average base rent per square
foot, and comparable sales per square foot for our domestic assets. We include acquired properties in this data beginning in the year of acquisition and remove properties sold in the year disposed.
For comparative purposes, we separate the information below related to community/lifestyle centers, the Mills properties and Mills Regional Malls, from our other U.S. operations. We also do not
include any properties located outside of the United States. The following table sets forth these key operating statistics for:



September 30,
2010

September 30,
2009

%/basis point
Change(1)U.S. Regional Malls and Premium Outlets(2):OccupancyConsolidated


94.2
%

93.4
%

+80 bpsUnconsolidated


91.6
%

90.9
%

+70 bpsTotal Portfolio


93.6
%

92.8
%

+80 bpsAverage Base Rent per Square FootConsolidated

$
37.11

$
36.73


1.0
%Unconsolidated

$
43.50

$
43.18


0.7
%Total Portfolio

$
38.69

$
38.35


0.9
%Comparable Sales per Square FootConsolidated

$
474

$
443


7.0
%Unconsolidated

$
516

$
470


9.8
%Total Portfolio

$
483

$
449


7.6
%The Mills:Occupancy


92.9
%

92.4
%

+50 bpsAverage Base Rent per Square Foot

$
19.82

$
19.66


0.8
%Comparable Sales per Square Foot

$
382

$
369


3.5
%Mills Regional Malls:Occupancy


90.1
%

88.9
%

+120 bpsAverage Base Rent per Square Foot

$
35.03

$
35.64


-1.7
%Comparable Sales per Square Foot

$
400

$
388


3.1
%Community/Lifestyle Centers:Occupancy


91.7
%

88.9
%

+280 bpsAverage Base Rent per Square Foot

$
13.39

$
13.34


0.4
%


(1)Percentages
may not recalculate due to rounding. Percentages and basis point changes are representative of the change from the comparable prior period.(2)For
comparative purposes, U.S. Regional Malls and Premium Outlets statistical data do not include the 21 properties acquired from Prime. As of
September 30, 2010, the Occupancy rate of these properties was 94.7%, Average Base Rent per Square Foot was $24.52, and Sales per Square Foot were $406.


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Occupancy Levels and Average Base Rent per Square Foot.Occupancy and average base rent are based on gross leasable area, or GLA,
 owned by us in the
regional malls, all tenants at the Premium Outlets, all tenants in the Mills portfolio, and all tenants at community/lifestyle centers. Our portfolio has maintained stable occupancy while average base
rents have increased.

Comparable Sales per Square Foot.Comparable sales include total reported retail tenant sales at owned GLA (for mall and
freestanding stores with
less than 10,000 square feet) in the regional malls and all reporting tenants at the Premium Outlets and the Mills. Retail sales at Owned GLA affect revenue and profitability levels because sales
determine the amount of minimum rent that can be charged, the percentage rent realized, and the recoverable expenses (common area maintenance, real estate taxes, etc.) that tenants can afford to pay.



The following key operating statistics are provided for our international properties, which we account for using the equity method of
accounting.

September 30,
2010

September 30,
2009

%/basis point
ChangeEuropean Shopping Centers:(1)Occupancy


97.3
%

95.8
%

+150 bpsComparable Sales per Square Foot

€
386

€
406


-4.9
%Average Base Rent per Square Foot

€
26.60

€
31.66


-16.0
%International Premium Outlets:(2)Occupancy


99.2
%

99.7
%

-50 bpsComparable Sales per Square Foot

¥
89,351

¥
93,930


-4.9
%Average Base Rent per Square Foot

¥
4,792

¥
4,711


1.7
%


(1)The
September 30, 2010 statistics exclude the seven shopping centers located in France and Poland as a result of our July 15, 2010 sale of our
interest in Simon Ivanhoe.(2)Does
not include our centers in Mexico (Premium Outlets Punta Norte) or South Korea (Yeoju Premium Outlets).


Results of Operations

In addition to the activity discussed above in the "Results Overview" section, the following acquisitions, dispositions, property
openings and other activity affected our consolidated results from continuing operations in the comparative periods:



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In
addition to the activities discussed in "Results Overview," the following acquisitions, dispositions and property openings affected our income from unconsolidated entities in the
comparative periods:



For
the purposes of the following comparison between the three and nine months ended September 30, 2010 and 2009, the above transactions are referred to as the "property
transactions." In the following discussions of our results of operations, "comparable" refers to properties open and operating throughout the periods in both 2010 and 2009.



Minimum rents increased $35.0 million during the 2010 period, of which the property transactions accounted for
$21.2 million of the increase. Comparable rents increased $13.8 million, or 2.4%. This was primarily due to an increase in minimum rents of $11.5 million due to occupancy gains,
an increase in rents from carts, kiosks, and other temporary tenants of $1.7 million and a $1.4 million increase in straight-line rents, partially offset by a
$0.8 million decrease attributable to a decline in the fair market value of in-place lease amortization. Overage
rent increased $6.5 million, or 32.8%, as a result of an increase in tenant sales for the period as compared to the prior period.

Total
other income increased $7.4 million, and was principally the result of the following:



The
(recovery of) provision for credit losses decreased $2.4 million due to a reduction in the number of tenants in default and a decrease in the number of tenants in bankruptcy
proceedings compared to the

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third
quarter of 2009. We also had strong collections of receivables which we had previously established reserves for due to uncertainty of payment.

During
the quarter ended September 30, 2010, we incurred $47.6 million in transaction expenses related to acquisitions, potential acquisitions, and the settlement of a
transaction related dispute.

The
third quarter of 2010 included a loss on extinguishment of debt of $185.1 million related to the August 2010 unsecured note tender offer.

Income
from unconsolidated entities increased $17.9 million primarily due to the sale of a non-retail building and favorable results of operations over the prior
period, acquisition of additional interests in joint venture properties and opening and expansion activity.

We
recorded a gain upon acquisition of a controlling interest, and on the sale of interests in unconsolidated entities of $294.3 million primarily due to our share of the gain on
the sale of our interest in Simon Ivanhoe and the gain on the acquisition of a controlling interest in a regional mall previously accounted for under the equity method.

Preferred
unit distribution requirements decreased $7.4 million as a result of the redemption or conversion of the 6% Series I Convertible Perpetual Preferred Units, or
Series I preferred units, to units or cash during 2010 and 2009.



Minimum rents increased $47.8 million during the 2010 period of which the property transactions accounted for
$27.3 million of the increase. Comparable rents increased $20.5 million, or 1.2%. The increase in comparable minimum rents was primarily attributable to a $23.4 million increase
in base minimum rents and a $4.3 million increase in comparable rents from carts, kiosks, and other temporary tenants, partially offset by a $4.0 million decline in the fair market value
of in-place lease amortization and a $3.2 million decrease in straight-line rents. Overage rents increased $8.2 million, or 17.9%, as a result of an increase in
tenant sales for the period as compared to the prior year.

Management
fees and other revenues decreased $3.8 million principally as a result of decreased fee revenue due to the reduced level of development activity in 2010.

Total
other income increased $38.0 million, and was principally the result of the following:



Property
operating costs decreased $11.1 million, or 3.4%, primarily related to lower utility costs resulting from our cost control and reduction initiatives.

Depreciation
and amortization expense decreased $51.8 million due to the impact of the acceleration of depreciation in 2009 for certain properties scheduled for redevelopment,
offset by a slight increase as a result of openings and expansion activity and the acquisition of the Prime properties.

The
(recovery of) provision for credit losses decreased $21.4 million due to a reduction in the number of tenants in default and a decrease in the number of tenants in bankruptcy
proceedings compared to the same period in 2009. We also had strong collections of receivables which we had previously established reserves for due to uncertainty of payment.

Home
and regional office expense decreased $7.0 million primarily due to decreased personnel costs attributable to our cost control initiatives and a final payment for a
long-term incentive compensation plan.

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During
2009, we recognized a non-cash charge of $140.5 million representing the other-than-temporary impairment in the fair value of our
investment in Liberty.

During
the nine months ended September 30, 2010, we incurred $62.6 million in transaction expenses related to acquisitions, potential acquisitions, and the settlement of a
transaction related dispute.

Other
expenses decreased $8.5 million due to decreased professional fees, including legal fees and related costs, and a decrease in foreign currency losses related to receivable
revaluations due to fluctuations in exchange rates.

Interest
expense increased $46.3 million primarily related to our offerings of new series of unsecured notes totaling $3.2 billion in 2010 and $1.8 billion during
2009 and the result of new or refinanced debt at several properties including debt associated with the Prime acquisition, offset by the acquisition of unsecured notes tendered in the January and
August 2010 tender offers and mortgage loans which we repaid during the 2010 period.

During
2010, we incurred a loss on extinguishment of debt of $350.7 million related to the two unsecured note tender offers.

Income
from unconsolidated entities increased $35.0 million primarily due to favorable results of operations over the prior period, the sale of a non-retail building
in 2010, a property opening and expansion in Japan, a decrease in the provision for credit losses and interest savings.

We
recorded a gain upon acquisition of a controlling interest, and on the sale of interests in unconsolidated entities of $320.3 million primarily due to our share of the gain on
the sale of our interest in Simon Ivanhoe, the gain on the acquisition of a controlling interest in a regional mall previously accounted for under the equity method and the gain on sale of Porta di
Roma by GCI.

Preferred
unit distribution requirements decreased $22.4 million as a result of the redemption or conversion of the Series I preferred units to units or cash during 2010
and 2009.

Liquidity and Capital Resources

Because we generate revenues primarily from long-term leases, our financing strategy relies primarily on
long-term fixed rate debt. We manage our floating rate debt to be at or below 15-25% of total outstanding indebtedness. Floating rate debt currently comprises approximately
11.6% of our total consolidated debt. We also enter into interest rate protection agreements as appropriate to assist in managing our interest rate risk. We derive most of our liquidity from leases
that generate positive net cash flow from operations and distributions of capital from unconsolidated entities that totaled $1.5 billion during the nine months ended September 30, 2010.
In addition, our Credit Facility provides an alternative source of liquidity as our cash needs vary from time to time.

Our
balance of cash and cash equivalents decreased $2.9 billion during the first nine months of 2010 to $1.0 billion as of September 30, 2010 primarily due to the
use of cash to reduce indebtedness. Our balance of cash and cash equivalents as of September 30, 2010 and December 31, 2009, includes
$39.3 million and $38.1 million, respectively, related to our co-branded gift card programs, which we do not consider available for general working capital purposes.

On
September 30, 2010, we had available borrowing capacity of approximately $3.0 billion under the Credit Facility, net of outstanding borrowings of $852.0 million
and letters of credit of $33.3 million. For the nine months ended September 30, 2010, the maximum amount outstanding under the Credit Facility was $859.5 million and the weighted
average amount outstanding was approximately $487.9 million. The weighted average interest rate was 2.30% for the nine months ended September 30, 2010.

We
have historically had access to public unsecured debt markets and access to private equity from institutional investors at the property level.

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Our
business model requires us to regularly access the debt and equity capital markets to raise funds for acquisition and development activity, redevelopment capital, and to refinance
maturing debt. We believe we have sufficient cash on hand and availability under our corporate Credit Facility to address our debt maturities and capital needs through 2011.

As
discussed further in "Financing and Debt" below, we conducted two cash tender offers for several outstanding series of unsecured notes during 2010. On January 12, 2010, we
commenced a tender offer to purchase ten outstanding series of notes. We subsequently purchased $2.285 billion of notes on January 26, 2010. The purchase of the notes was primarily
funded with proceeds from the sale of $2.25 billion of senior unsecured notes issued on January 25, 2010. Additionally, on August 9, 2010, we commenced a tender offer to purchase
three outstanding series of notes. We subsequently purchased $1.328 billion of tendered notes on August 17, 2010. The purchase of the notes was primarily funded with proceeds from the
sale of $900.0 million of senior unsecured notes issued on August 16, 2010. As a result of the tenders, we extended the weighted average duration of our senior unsecured notes portfolio
from 6.8 years to 7.5 years and slightly decreased the weighted average interest rate.



As part of the Mills acquisition, we made loans to SPG-FCM Ventures, LLC, or SPG-FCM, and Mills which
were used by SPG-FCM and Mills to repay loans and other obligations of Mills, including the
redemption of preferred stock. As of September 30, 2010 and December 31, 2009, the outstanding balance of our remaining loan to SPG-FCM was $651.0 million and
$632.0 million, respectively. During the first nine months of 2010 and 2009, we recorded approximately $7.4 million and $6.9 million in interest income (net of inter-entity
eliminations), related to this loan, respectively. The loan bears interest at a rate of LIBOR plus 275 basis points and matures on June 8, 2011, and can be extended for one year.



Our net cash flow from operating activities and distributions of capital from unconsolidated entities for the nine months ended
September 30, 2010, totaled $1.5 billion. In addition, we had net repayments from all of our debt financing and repayment activities in this period of $2.4 billion and an
additional $350.7 million primarily related to premiums paid to par as a result of the note tender offers. These activities are further discussed below in "Financing and Debt." During the 2010
period, we also:



In
general, we anticipate that cash generated from operations will be sufficient to meet operating expenses, monthly debt service, recurring capital expenditures, and distributions
necessary to maintain Simon Property's REIT qualification for 2010. In addition, we expect to be able to obtain capital for nonrecurring capital expenditures, such as acquisitions, major building
renovations and expansions, as well as for scheduled principal maturities on outstanding indebtedness, from:



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We
expect to generate positive cash flow from operations in 2010, and we consider these projected cash flows in our sources and uses of cash. These cash flows are principally derived
from retail tenants, many of whom continue to experience financial distress. A significant deterioration in projected cash flows from operations could cause us to increase our reliance on available
funds from our Credit Facility, curtail planned capital expenditures, or seek other additional sources of financing as discussed above.

Financing and Debt



At September 30, 2010 our unsecured debt consisted of $10.0 billion of senior unsecured notes and $852.0 million
outstanding under our Credit Facility. The Credit Facility has a borrowing capacity of $3.9 billion and contains an accordion feature allowing the maximum borrowing capacity to expand to
$4.0 billion. The Credit Facility matures on March 31, 2013. The base interest on the Credit Facility is LIBOR plus 210 basis points and includes a facility fee of 40 basis points.

During
the nine months ended September 30, 2010, our borrowings under the Credit Facility increased primarily as a result of the acquisition of Prime partially offset by the
repayment of €167.4 million (approximately $215 million) principal balance on the Euro-denominated tranche of our Credit Facility on July 23, 2010. The
total outstanding balance of the Credit Facility as of September 30, 2010 was $852.0 million, and the maximum outstanding balance during the nine months ended September 30, 2010
was $859.5 million. During the nine months ended September 30, 2010, the weighted average outstanding balance on the Credit Facility was approximately $487.9 million. The
outstanding balance as of September 30, 2010 includes $267.0 million (U.S. dollar equivalent) of Yen-denominated borrowings.

On
January 12, 2010, we commenced a cash tender offer for any and all senior unsecured notes of ten outstanding series with maturity dates ranging from 2011 to March 2013. The
total principal amount of the notes accepted for purchase on January 26, 2010 was approximately $2.3 billion, with a weighted average duration of 2.0 years and a weighted average
coupon of 5.76%. We purchased the tendered notes with cash on hand and the proceeds from an offering of $2.25 billion of senior unsecured notes that closed on January 25, 2010. The
senior notes offering was comprised of $400.0 million of 4.20% notes due 2015, $1.25 billion of 5.65% notes due 2020 and $600.0 million of 6.75% notes due 2040. The weighted
average duration of the notes offering was 14.4 years and the weighted average coupon was 5.69%. We recorded a $165.6 million charge to earnings in the first quarter of 2010 as a result
of the tender offer.

On
March 18, 2010, we repaid a $300.0 million senior unsecured note, which had a fixed rate of 4.875%.

On
June 15, 2010, we repaid a $400.0 million senior unsecured note, which had a fixed rate of 4.60%.

On
August 9, 2010, we commenced a cash tender offer for any and all senior unsecured notes of three outstanding series with maturity dates ranging from May 2013 to August 2014.
The total principal amount of the notes accepted for purchase on August 17, 2010 was approximately $1.33 billion, with a weighted average duration of 3.5 years and a weighted
average coupon of 6.06%. We purchased the tendered notes with cash on hand and the proceeds from an offering of $900.0 million of 4.375% senior unsecured notes that closed on August 16,
2010. The senior notes are due on March 1, 2021. We recorded a $185.1 million charge to earnings in the third quarter of 2010 as a result of the tender offer.

On
August 16, 2010, we repaid a $400.0 million senior unsecured note, which had a fixed rate of 4.875%.

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Total secured indebtedness was $6.6 billion at September 30, 2010 and December 31, 2009. During the nine months
ended September 30, 2010, we unencumbered five properties by repaying $1.1 billion in mortgage loans with a weighted average interest rate of 4.35%.

On
May 13, 2010, we acquired a property in Barceloneta, Puerto Rico subject to an existing $75.2 million mortgage loan. The loan matures on May 1, 2014 and bears
interest at LIBOR plus 225 basis points with a LIBOR floor of 1.50%.

On
August 30, 2010, we completed our acquisition of Prime, subject to the assumption of existing mortgage loans of approximately $1.2 billion. These loans bear interest at
fixed rates ranging from 5.51% to 6.01% and mature at various dates throughout 2016.



Our consolidated debt, adjusted to reflect outstanding derivative instruments, and the effective weighted average interest rates as of
September 30, 2010, and December 31, 2009, consisted of the following (dollars in thousands):

Debt Subject to

Adjusted Balance
as of September 30, 2010

Effective
Weighted Average
Interest Rate

Adjusted Balance
as of
December 31, 2009

Effective
Weighted Average
Interest RateFixed Rate

$
15,489,398


6.07
%
$
16,814,240


6.10
%Variable Rate


1,996,068


1.93
%

1,816,062


1.19
%$
17,485,466


5.60
%
$
18,630,302


5.62
%


As
of September 30, 2010, we had $692.9 million of notional amount fixed rate swap agreements that have a weighted average fixed pay rate of 2.79% and a weighted average
variable receive rate of 0.52%. As of September 30, 2010, the net effect of these agreements effectively converted $692.9 million of variable rate debt to fixed rate debt.

Contractual Obligations and Off-Balance Sheet Arrangements.There have been no material changes to our outstanding capital
expenditure
and lease commitments previously disclosed in our 2009 Annual Report on Form 10-K.

In
regards to long-term debt arrangements, the following table summarizes the material aspects of these future obligations on our consolidated indebtedness as of
September 30, 2010, for the remainder of 2010 and subsequent years thereafter (dollars in thousands) assuming the indebtedness remains outstanding through initial maturities:

2010

2011-2012

2013-2015

After 2015

TotalLong-Term Debt(1)

$
78,939

$
2,784,361

$
5,872,232

$
8,742,254

$
17,477,786Interest Payments(2)

$
244,974

$
1,810,535

$
2,065,398

$
2,060,530

$
6,181,437


(1)Represents
principal maturities only and therefore, excludes net premiums of $7,680.(2)Variable
rate interest payments are estimated based on the 1-month LIBOR rate at September 30, 2010.


Our
off-balance sheet arrangements consist primarily of our investments in joint ventures which are common in the real estate industry and are described in Note 5 of
the notes to the accompanying financial statements. Our joint ventures typically fund their cash needs through secured debt financings obtained by and in the name of the joint venture entity. The
joint venture debt is secured by a first mortgage, is without

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recourse
to the joint venture partners, and does not represent a liability of the partners, except to the extent the partners or their affiliates expressly guarantee the joint venture debt. As of
September 30, 2010, we had guaranteed $61.3 million of the total joint venture related mortgage or other indebtedness of $6.5 billion then outstanding. We may elect to fund cash
needs of a joint venture through equity contributions (generally on a basis proportionate to our ownership interests), advances or partner loans, although such fundings are not required contractually
or otherwise.

Acquisitions and Dispositions

Buy-sell provisions are common in real estate partnership agreements. Most of our partners are institutional investors who
have a history of direct investment in retail real estate. Our partners in our joint venture properties may initiate these provisions at any time. If we determine it is in our unitholders' best
interests for us to purchase the joint venture interest and we believe we have adequate liquidity to execute the purchase without hindering our cash flows, then we may initiate these provisions or
elect to buy. If we decide to sell any of our joint venture interests, we expect to use the net proceeds to reduce outstanding indebtedness or to reinvest in development, redevelopment, or expansion
opportunities.

Acquisitions.During the three months ended September 30, 2010, we acquired a controlling interest in a regional mall which
resulted in a
remeasurement of our previously held equity interest to fair value and corresponding gain of approximately $13.0 million. This gain is included in gain upon acquisition of controlling interest
and on sale or disposal of assets and interests in unconsolidated entities, net in the accompanying statements of operations and comprehensive income.

On
May 28, 2010, we acquired an additional interest of approximately 19% in Houston Galleria, located in Houston, Texas thereby increasing our interest from 31.5% to 50.4%.

On
August 30, 2010, we completed our previously announced transaction to acquire 21 outlet centers from Prime, including a center located in Puerto Rico, which was acquired on
May 13, 2010. The
transaction was valued at approximately $2.3 billion, including the assumption of existing mortgage indebtedness of $1.2 billion and the repayment of $310.7 million of preexisting
mortgage loans at closing.

We
paid aggregate consideration to Prime's owners of approximately $0.7 billion, comprised of 80% cash and 20% in units. We issued approximately 1.7 million units with an
issuance date fair value of approximately $154.5 million. We funded the cash portion of this acquisition through draws on our Credit Facility.

Dispositions.We continue to pursue the disposition of properties that no longer meet our strategic criteria or that are not the
primary retail venue
within their trade area. During the nine months ended September 30, 2010, we disposed of one regional mall, one community center, two other retail properties, and our interest in eight
international joint venture properties for an aggregate net gain of $307.4 million.

On
July 15, 2010, we and our partner in Simon Ivanhoe, Ivanhoe Cambridge, sold our collective interests in Simon Ivanhoe which owned seven shopping centers located in France and
Poland to Unibail-Rodamco. The joint venture partners received net consideration of €422.5 million for their interests after the repayment of all joint venture debt, subject to
certain post-closing adjustments. Our share of the gain on sale of our interests in Simon Ivanhoe was approximately $281 million. A portion of the proceeds was used to repay the
€167.4 million (approximately $215 million) principal balance on the Euro-denominated tranche of our Credit Facility.

Development Activity

New Domestic Development, Expansions and Renovations.Given the downturn in the economy, we have substantially reduced our
development spending as
well as strategic expansions and renovation from historical levels. As economic conditions have improved, we have modestly increased the pace of our development and redevelopment activity. Our share
of the cost of new development, renovation or

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expansion
projects that we expect to initiate or complete in 2010 is approximately $200 million. We expect to fund these capital projects with cash flow from operations.

International Development Activity.We typically reinvest net cash flow from our international investments to fund future
international development
activity. We believe this strategy mitigates some of the risk of our initial investment and our exposure to changes in foreign currencies. We have also funded our European investments with
Euro-denominated borrowings that act as a natural hedge against local currency fluctuations. This has also been the case with our Premium Outlets in Japan, Korea, and Mexico where we use
Yen, Won, and Peso denominated financing, respectively. Currently, our consolidated net income exposure to changes in the volatility of the Euro, Yen, Won, Peso and other foreign currencies is not
material. We expect our share of international development costs for 2010 will be approximately $60 million.

The
carrying amount of our investment in GCI, as of September 30, 2010, including all related components of other comprehensive income, was $314.5 million. Our investment
in GCI is accounted for using the equity method of accounting, and we had a 49% ownership interest in GCI as of September 30, 2010. In March 2010, two European developments opened, adding
approximately 942,000 square feet of GLA for a total net cost of approximately €221 million, of which our share was approximately €53 million, or
$64.8 million based on applicable Euro:USD exchange rates. Although we sold our joint venture interest in Simon Ivanhoe on July 15, 2010, we and Ivanhoe Cambridge have the right to
participate with Unibail-Rodamco in the potential development of up to five new retail projects in the Simon Ivanhoe pipeline, subject to customary approval rights. We own a 25% interest in any of
these projects in which we agree to participate.

As
of September 30, 2010, the carrying amount of our 40% joint venture investment in the eight Japanese Premium Outlets including all related components of other comprehensive
income was $324.7 million. On July 14, 2010 Toki Premium Outlets Phase III, a 62,000 square foot expansion to the Toki Premium Outlet located in Toki, Japan, opened to the public.
Currently Tosu Premium Outlets Phase III, a 52,000 square foot expansion to the Tosu Premium Outlet located in Fukuoka, Japan, is under construction. The combined projected net cost of these
projects is JPY 5.3 billion, of which our share is approximately JPY 2.1 billion, or $25.4 million based on applicable Yen:USD exchange rates.

As
of September 30, 2010, the carrying amount of our 50% joint venture investment in Shinsegae Chelsea Korea including all related components of other comprehensive income was
$30.3 million. Currently, Paju Premium Outlets, a 328,000 square foot center located in Seoul, South Korea, is under construction. The projected net cost of this project is KRW
121.3 billion, of which our share is approximately KRW 60.6 billion, or $53.2 million based on applicable KRW:USD exchange rates.

Prior
to May 7, 2010 we held a minority interest in Liberty, a U.K. Real Estate Investment Trust that operated regional shopping centers and owned other prime retail assets
throughout the U.K. Effective at the close of business May 7, 2010, Liberty completed a demerger in which it was separated into two companies, Capital Shopping Centres Group PLC, or
CSCG, and Capital & Counties Properties PLC, or CAPC. Liberty shareholders acquired the same number of shares of CSCG and CAPC as they owned in Liberty. CSCG operates regional shopping
centers and is the owner of other retail assets primarily located in the United Kingdom. CAPC is predominantly focused on property investment and development in central London. Our interest in CSCG
and CAPC is adjusted to their quoted market price, including a related foreign exchange component.

Distributions

We paid a distribution of $0.60 per unit in the third quarter of 2010. Our distributions typically exceed our net income generated in
any given year primarily because of depreciation, which is a "non-cash" expense. Our future distributions will be determined by Simon Property's Board of Directors based on

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actual
results of operations, cash available for distributions, cash reserves as deemed necessary for capital and operating expenditures, and the amount required to maintain Simon Property's status as
a REIT.

Forward-Looking Statements

Certain statements made in this section or elsewhere in this report may be deemed "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance
that our expectations will be attained, and it is possible that our actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and
uncertainties. Such factors include, but are not limited to: our ability to meet debt service requirements, the availability of financing, changes in our credit rating,
changes in market rates of interest and foreign exchange rates for foreign currencies, the ability to hedge interest rate risk, risks associated with the acquisition, development and expansion of
properties, general risks related to retail real estate, the liquidity of real estate investments, environmental liabilities, international, national, regional and local economic climates, changes in
market rental rates, trends in the retail industry, relationships with anchor tenants, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks relating to
joint venture properties, costs of common area maintenance, competitive market forces, risks related to international activities, insurance costs and coverage, terrorist activities, changes in
economic and market conditions and maintenance of Simon Property's status as a real estate investment trust. We discussed these and other risks and uncertainties under the heading "Risk Factors" in
our most recent Annual Report on Form 10-K. We may update that discussion in our Quarterly Reports on Form 10-Q, but otherwise we undertake no duty or obligation
to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

Item 3.    Qualitative and Quantitative Disclosures About Market Risk

Sensitivity Analysis.We disclosed a comprehensive qualitative and quantitative analysis regarding market risk in the
Management's Discussion and
Analysis of Financial Condition and Results of Operations included in our 2009 Annual Report on Form 10-K. There have been no material changes in the assumptions used or results
obtained regarding market risk since December 31, 2009.

Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures.We carried out an evaluation under the supervision and with participation of
management, including
the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our "disclosure controls and procedures" (as defined in Rule 13a-15(e)
under the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2010.

Changes in Internal Control Over Financial Reporting.There have not been any changes in our internal control over financial
reporting (as defined in
Rule 13a-15(f)) that occurred during the quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

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Part II  Other Information

Item 1.    Legal Proceedings

We are involved from time-to-time in various legal proceedings that arise in the ordinary course of our
business, including, but not limited to commercial disputes, environmental matters, and litigation in connection with transactions including acquisitions and divestitures. We believe that such
litigation, claims and administrative proceedings will not have a material adverse impact on our financial position or our results of operations. We record a
liability when a loss is considered probable and the amount can be reasonably estimated.

Item 1A.    Risk Factors

Through the period covered by this report, there were no significant changes to the Risk Factors disclosed in "Part 1: Business"
of our 2009 Annual Report on Form 10-K.

Item 5.    Other Information

During the quarter covered by this report, the Audit Committee of Simon Property Group, Inc.'s Board of Directors approved
certain audit-related, tax compliance and due diligence services to be provided by Ernst & Young, LLP, our independent registered public accounting firm. This disclosure is made pursuant
to Section 10A(i)(2) of the Securities Exchange Act of 1934, as added by Section 202 of the Sarbanes-Oxley Act of 2002.

Item 6.    Exhibits

Exhibit
Number

Exhibit Descriptions31.1

Certification by the Chief Executive Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2

Certification by the Chief Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32

Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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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.

SIMON PROPERTY GROUP, L.P./s/ STEPHEN E. STERRETT Stephen E. Sterrett
Executive Vice President and
Chief Financial Officer of
Simon Property Group, Inc., General PartnerDate: November 12, 2010


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