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 June 30, 2008

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

Delaware
(State of incorporation or organization)

33-11491
(Commission File No.)

34-1755769
(I.R.S. Employer Identification No.)

225
West Washington StreetIndianapolis, 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller 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 (Do not check if a smaller reporting company)

Smaller reporting company o


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.



---





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 June 30, 2008 and December 31, 2007


3Consolidated Statements of Operations and Comprehensive Income for the three months and six months ended June 30, 2008 and 2007


4Consolidated Statements of Cash Flows for the six months ended June 30, 2008 and 2007


5Condensed Notes to Consolidated Financial Statements


6Item 2.

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


15Item 3.

Qualitative and Quantitative Disclosure About Market Risk


29Item 4.

Controls and Procedures


29Part II  Other InformationItem 1.

Legal Proceedings


29Item 1A.

Risk Factors


29Item 5.

Other Information


29Item 6.

Exhibits


30Signatures


31


2

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

June 30,
2008

December 31,
2007(Unaudited)ASSETS:Investment properties, at cost

$
24,807,528

$
24,415,025Less  accumulated depreciation


5,716,139


5,312,09519,091,389


19,102,930Cash and cash equivalents


503,879


501,982Tenant receivables and accrued revenue, net


357,118


447,224Investment in unconsolidated entities, at equity


1,848,730


1,886,891Deferred costs and other assets


1,334,645


1,118,635Note receivable from related party


534,000


548,000Total assets

$
23,669,761

$
23,605,662LIABILITIES:Mortgages and other indebtedness

$
17,693,774

$
17,218,674Accounts payable, accrued expenses, intangibles, and deferred revenue


1,127,780


1,251,044Cash distributions and losses in partnerships and joint ventures, at equity


370,654


352,798Other liabilities, minority interest, and accrued distributions


188,288


180,644Total liabilities


19,380,496


19,003,160COMMITMENTS AND CONTINGENCIES7.75%/8.00% Cumulative Redeemable Preferred Units, 850,698 units issued and outstanding, respectively, at liquidation value


85,070


85,070PARTNERS' EQUITY:Preferred units, 18,151,075 and 19,611,057 units outstanding, respectively. Liquidation values $890,968 and $962,737, respectively


897,318


969,251General Partner, 225,042,887 and 223,034,282 units outstanding, respectively


2,635,661


2,816,775Limited Partners, 57,310,967 and 57,913,250 units outstanding, respectively


671,216


731,406Total partners' equity


4,204,195


4,517,432Total liabilities and partners' equity

$
23,669,761

$
23,605,662


The accompanying notes are an integral part of these statements.

3

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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 June 30,

For the Six Months
Ended June 30,2008

2007

2008

2007REVENUE:Minimum rent

$
566,199

$
522,086

$
1,116,881

$
1,032,951Overage rent


17,836


18,634


34,487


36,526Tenant reimbursements


259,803


237,984


510,051


468,597Management fees and other revenues


34,879


17,542


67,899


38,417Other income


44,230


59,686


88,927


131,582Total revenue


922,947


855,932


1,818,245


1,708,073EXPENSES:Property operating


111,911


112,122


224,672


221,349Depreciation and amortization


236,617


230,611


464,660


445,882Real estate taxes


85,450


79,063


169,970


158,245Repairs and maintenance


25,845


28,744


54,866


57,751Advertising and promotion


21,739


20,410


41,112


39,294Provision for credit losses


6,781


1,424


13,363


1,966Home and regional office costs


34,844


29,270


74,444


62,969General and administrative


5,095


6,119


10,397


10,018Other


15,259


14,618


33,397


28,082Total operating expenses


543,541


522,381


1,086,881


1,025,556OPERATING INCOME


379,406


333,551


731,364


682,517Interest expense


(232,335
)

(243,654
)

(462,252
)

(466,132
)Loss on extinguishment of debt


(20,330
)




(20,330
)

Minority interest in income of consolidated entities


(3,060
)

(3,136
)

(5,344
)

(6,046
)Income tax benefit (expense) of taxable REIT subsidiaries


(627
)

528


(604
)

(757
)Income (loss) from unconsolidated entities


(11,393
)

7,459


(4,252
)

29,232Gain on sale of interest in unconsolidated entity





500





500Income from continuing operations


111,661


95,248


238,582


239,314Results of operations from discontinued operations





20





(183
)Gain on disposal or sale of discontinued operations, net











NET INCOME


111,661


95,268


238,582


239,131Preferred unit requirement


(15,573
)

(19,900
)

(31,828
)

(39,545
)NET INCOME AVAILABLE TO UNITHOLDERS

$
96,088

$
75,368

$
206,754

$
199,586NET INCOME AVAILABLE TO UNITHOLDERS ATTRIBUTABLE TO:General Partner

$
76,572

$
59,917

$
164,505

$
158,298Limited Partners


19,516


15,451


42,249


41,288Net income

$
96,088

$
75,368

$
206,754

$
199,586BASIC EARNINGS PER UNITIncome from continuing operations

$
0.34

$
0.27

$
0.73

$
0.71Discontinued operations

$





$



Net Income

$
0.34

$
0.27

$
0.73

$
0.71DILUTED EARNINGS PER UNITIncome from continuing operations

$
0.34

$
0.27

$
0.73

$
0.71Discontinued operations

$





$



Net Income

$
0.34

$
0.27

$
0.73

$
0.71Net income

$
111,661

$
95,268

$
238,582

$
239,131Unrealized (loss) gain on interest rate hedges


18,536


3,208


(169
)

2,748Net income (loss) on derivative instruments reclassified from accumulated other comprehensive income (loss) into interest expense


(635
)

543


(3,225
)

1,015Currency translation adjustments


14,706


1,364


(7,688
)

1,515Other income (loss)


(4,087
)

(4
)

(5,342
)

(732
)Comprehensive Income

$
140,181

$
100,379

$
222,158

$
243,677


The accompanying notes are an integral part of these statements.

4

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

For the Six Months
Ended June 30,2008

2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income

$
238,582

$
239,131Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization


450,515


429,522Gain on sale of interest in unconsolidated entity





(500
)Straight-line rent


(18,324
)

(8,312
)Minority interest


5,344


6,046Minority interest distributions


(13,378
)

(61,770
)Equity in income of unconsolidated entities


4,252


(29,232
)Distributions of income from unconsolidated entities


49,990


37,147Changes in assets and liabilities Tenant receivables and accrued revenue, net


27,757


67,211Deferred costs and other assets


(37,466
)

(38,954
)Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities


42,274


(18,161
)Net cash provided by operating activities


749,546


622,128CASH FLOWS FROM INVESTING ACTIVITIES:Acquisitions





(153,130
)Funding of loans to related parties





(1,473,540
)Repayments of loans from related parties


14,000


940,960Capital expenditures, net


(461,563
)

(412,615
)Cash impact from the consolidation and de-consolidation of properties





4,073Investments in unconsolidated entities


(34,658
)

(467,825
)Purchase of marketable and non-marketable securities


(212,865
)

(12,655
)Distributions of capital from unconsolidated entities and other


65,119


112,568Net cash used in investing activities


(629,967
)

(1,462,164
)CASH FLOWS FROM FINANCING ACTIVITIES:Partnership contributions and issuance of units


5,357


2,282Purchase of preferred units and partnership units


(14,043
)

(27,615
)Preferred unit redemptions


(1,845
)

(250
)Minority interest contributions


1,539


Partnership distributions


(538,829
)

(511,746
)Mortgage and other indebtedness proceeds, net of transaction costs


3,022,365


2,967,406Mortgage and other indebtedness principal payments


(2,592,226
)

(2,138,226
)Net cash provided by (used in) financing activities


(117,682
)

291,851DECREASE IN CASH AND CASH EQUIVALENTS


1,897


(548,185
)CASH AND CASH EQUIVALENTS, beginning of year


501,982


929,360CASH AND CASH EQUIVALENTS, end of period

$
503,879

$
381,175


The accompanying notes are an integral part of these statements.

5

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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 as 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 (the "Code"). 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 Outlet® centers, The Mills®, and community/lifestyle
centers. As of June 30, 2008, we owned or held an interest in 323 income-producing properties in the United States, which consisted of 166 regional malls, 39 Premium Outlet centers, 69
community/lifestyle centers, 37 properties acquired in the 2007 acquisition of The Mills Corporation, or Mills, and 12 other shopping centers or outlet centers in 41 states and
Puerto Rico. Of the 37 properties acquired in the Mills portfolio, 17 of these properties are The Mills, 16 are regional malls, and four are community centers. We also own interests in three
parcels of land held in the United States for future development. Internationally as of June 30, 2008, we have ownership interests in 51 European shopping centers (France, Italy and
Poland); six Premium Outlet centers in Japan; one Premium Outlet center in Mexico; one Premium Outlet center in South Korea; and one shopping center in China.

2.     Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of all majority-owned subsidiaries, and all significant inter-company amounts
have been eliminated. Due to the seasonal nature of certain operational activities, the results for the interim periods ended June 30, 2008 are not necessarily indicative of the results that
may be obtained for the full fiscal 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 2007 Annual Report on Form 10-K.

As
of June 30, 2008, we consolidated 200 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 164 properties, or the joint venture properties, using the equity method of accounting. We manage the day-to-day operations of 94 of
the 164 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 Japan, Europe, and Asia comprise 60 of the remaining 70 properties that are managed by others. Additionally, we account for our investment in SPG-FCM
Ventures, LLC, or SPG-FCM, the joint venture which acquired 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

6

---



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 our partners' respective weighted average ownership. Simon Property owns a majority of our common units, or
units, and certain series of our preferred units. Simon Property's weighted average ownership interest in us was 79.6% and 79.3% for the six months ended June 30, 2008 and 2007, respectively.
As of June 30, 2008 and December 31, 2007, Simon Property's ownership interest in us was 79.7% and 79.4%, respectively. We adjust the limited partners' interest at the end of each period
to reflect their respective interests in the Operating Partnership.

Preferred
distributions of the Operating Partnership in the accompanying statements of operations and cash flows represent distributions on outstanding preferred units of limited
partnership interest.



We made certain reclassifications of prior period amounts in the financial statements to conform to the 2008 presentation. The
reclassifications were to amounts reported in the unaudited consolidated statement of cash flows and had no impact on previously reported operating results.

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 market value. Cash equivalents generally consist of commercial paper, bankers acceptances, Eurodollars, repurchase agreements, and
money markets. Cash and cash equivalents, as of June 30, 2008, includes a balance of $30.8 million related to our co-branded gift card programs which we do not consider
available for general working capital purposes.



We hold marketable securities that total $409.2 million at June 30, 2008, and are considered to have Level 1 fair
value inputs. In addition, we have derivative instruments, primarily interest rate swap agreements, with a gross liability balance of $0.8 million, which are classified as having Level 2
inputs.

4.     Per Unit Data

We determine basic earnings per unit based on the weighted average number of units outstanding during the period. 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

7

---



assuming
all dilutive potential common 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 June 30,

For the Six Months
Ended June 30,2008

2007

2008

2007Unitholders' Share of:Income from continuing operations, after preferred unit requirements

$
96,088

$
75,348

$
206,754

$
199,769Discontinued Operations





20





(183
)Net Income available to Unitholders  Basic & Dilutive

$
96,088

$
75,368

$
206,754

$
199,586Weighted Average Units Outstanding  Basic


282,382,491


281,282,172


281,803,492


281,083,829Effect of stock options of Simon Property


588,806


836,855


604,699


847,130Weighted Average Units Outstanding  Diluted


282,971,297


282,119,027


282,408,191


281,930,959


For
the six months ended June 30, 2008, potentially dilutive securities include options to purchase shares of Simon Property common stock and certain preferred units that are
exchangeable for common units. The only security that had a dilutive effect for the six months ended June 30, 2008, and 2007, were stock options of Simon Property. Common units may be exchanged
for shares of Simon Property common stock, on a one-for-one basis, in certain circumstances. We accrue distributions when they are declared. Distributions declared for the six
month period ended June 30, 2008 and 2007 were $1.80 per unit and $1.68 per unit, respectively.

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 104 properties in the United States as of June 30, 2008 and 103 as of December 31,
2007. We also held interests in two joint ventures which owned 51 European shopping centers as of June 30, 2008 and December 31, 2007. We also held an interest in six joint
venture properties under operation in Japan, one joint venture property in China, 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.



As previously disclosed, SPG-FCM, a 50/50 joint venture between an affiliate of the Operating Partnership and funds managed
by Farallon, completed its acquisition of Mills in April 2007. During 2007, we and Farallon each contributed $650.0 million to SPG-FCM to fund the acquisition. As part of the
transaction we also made loans to SPG-FCM and Mills that bore interest primarily at rates of LIBOR plus 270-275 basis points. These funds were used to repay loans and other
obligations of Mills, including the

8

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redemption
of preferred stock of Mills. All of the loans made to Mills were repaid in 2007. Our only remaining loan is to SPG-FCM which had a balance of $534.0 million at
June 30, 2008. During the first two quarters of 2008 and 2007, we recorded approximately $8.1 million and $25.2 million in interest income (net of inter-entity eliminations),
respectively, related to loans to SPG-FCM and Mills. We also recorded fee income, including fee income amortization related to up-front fees on loans made to
SPG-FCM and Mills, during the first two quarters of 2008 and 2007 of approximately $1.3 million and $9.8 million (net of inter-entity eliminations), respectively, for
providing refinancing services to the Mills portfolio and SPG-FCM. The loan facility to SPG-FCM bears an interest rate of LIBOR plus 275 basis points and matures on
June 7, 2009, with three available one-year extensions, subject to certain terms and conditions.



We conduct our international operations in Europe through two European joint ventures: Simon Ivanhoe S.à.r.l., or Simon
Ivanhoe, and Gallerie Commerciali Italia, or GCI. The carrying amount of our total combined investment in these two joint venture investments was $291.4 million and $289.5 million as of
June 30, 2008 and December 31, 2007, respectively, net of the related cumulative translation adjustments. As of June 30, we had a 50% ownership in Simon Ivanhoe and a 49%
ownership in GCI.

We
conduct our investment in the six international Premium Outlet operations in Japan through joint ventures with Mitsubishi Estate Co., Ltd. and Sojitz Corporation
(formerly known as Nissho Iwai Corporation). The carrying amount of our investment in these joint ventures was $269.2 million and $273.0 million as of June 30, 2008 and
December 31, 2007, respectively, net of the related cumulative translation adjustments. We have a 40% ownership in these joint ventures. We have a 50% ownership interest in one Premium Outlet
center in Mexico. The carrying amount of our investment in Mexico was $15.0 million and $16.6 million as of June 30, 2008 and December 31, 2007, respectively, net of the
related cumulative translation adjustments. On June 1, 2007, we opened Yeoju Premium Outlets, our first Premium Outlet Center in South Korea, in which we held a 50% ownership interest. Our
investment in this property was $24.6 million and $23.1 million as of June 30, 2008 and December 31, 2007, respectively, net of the related cumulative translation
adjustments.

Through
joint venture arrangements, we have a 32.5% ownership interest in five shopping centers in China. One center, located in Changshu, opened in June 2008 while the remaining four
centers are still under construction. Our share of the total equity commitment for these shopping centers is approximately $59.3 million. Our combined investment in the Chinese joint ventures
was approximately $38.2 million and $32.1 million as of June 30, 2008 and December 31, 2007, respectively, net of the related cumulative translation adjustments. We account
for our investments in these joint ventures under the equity method of accounting.

9

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Summary financial information (in thousands) of all of our joint ventures and a summary of our investment in and share of income from
such joint ventures follow. We condensed into separate line items major captions of the statements of operations for joint venture interests sold or consolidated. Consolidation occurs when we acquire
an additional interest in the joint venture and, as a result, gain unilateral control of the property or are determined to be the primary beneficiary. We reclassify these line items into "Discontinued
Joint Venture Interests" and "Consolidated Joint Venture Interests" on the balance sheets and statements of operations, if material, so that we may present comparative results of operations for these
joint venture properties held as of June 30, 2008.

June 30,
2008

December 31,
2007BALANCE SHEETSAssets:Investment properties, at cost

$
21,282,389

$
21,009,416Less  accumulated depreciation


3,537,869


3,217,44617,744,520


17,791,970Cash and cash equivalents


727,198


747,575Tenant receivables and accrued revenue, net


361,619


435,093Investment in unconsolidated entities, at equity


240,324


258,633Deferred costs and other assets


744,524


713,180Total assets

$
19,818,185

$
19,946,451Liabilities and Partners' Equity:Mortgages and other indebtedness

$
16,421,345

$
16,507,076Accounts payable, accrued expenses, intangibles and deferred revenue


1,085,200


972,699Other liabilities


818,125


825,279Total liabilities


18,324,670


18,305,054Preferred units


67,450


67,450Partners' equity


1,426,065


1,573,947Total liabilities and partners' equity

$
19,818,185

$
19,946,451Our Share of:Total assets

$
8,144,184

$
8,040,987Partners' equity

$
741,032

$
776,857Add: Excess Investment


737,044


757,236Our net Investment in Joint Ventures

$
1,478,076

$
1,534,093Mortgages and other indebtedness

$
6,541,944

$
6,568,403


10

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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 June 30,

For the Six Months
Ended June 30,2008

2007

2008

2007STATEMENTS OF OPERATIONSRevenue:Minimum rent

$
478,418

$
447,346

$
948,481

$
717,275Overage rent


26,813


20,323


45,529


37,591Tenant reimbursements


244,593


220,429


473,338


352,250Other income


37,427


47,299


83,518


88,866Total revenue


787,251


735,397


1,550,866


1,195,982Operating Expenses:Property operating


163,813


154,677


316,737


241,602Depreciation and amortization


207,770


157,053


379,469


239,831Real estate taxes


66,629


66,365


132,373


100,916Repairs and maintenance


30,165


30,139


60,503


53,019Advertising and promotion


14,826


15,340


29,122


23,040Provision for credit losses


2,795


6,712


7,828


6,723Other


47,628


42,651


85,605


68,359Total operating expenses


533,626


472,937


1,011,637


733,490Operating Income


253,625


262,460


539,229


462,492Interest expense


(234,837
)

(238,349
)

(483,710
)

(345,505
)Loss from unconsolidated entities


(4,150
)

(3
)

(4,129
)

(87
)Loss on sale of asset











(4,759
)Income from Continuing Operations


14,638


24,108


51,390


112,141Income (loss) from consolidated joint venture interests





(47
)




2,590Income from discontinued joint venture interests





159


47


176Gain on disposal or sale of discontinued operations, net





19





19Net Income

$
14,638

$
24,239

$
51,437

$
114,926Third-Party Investors' Share of Net Income

$
14,906

$
6,027

$
33,557

$
60,672Our Share of Net Income (Loss)


(268
)

18,212


17,880


54,254Amortization of Excess Investment


(11,125
)

(10,753
)

(22,132
)

(25,022
)Income (loss) from Unconsolidated Entities, Net

$
(11,393
)
$
7,459

$
(4,252
)
$
29,232


6.     Debt



Our unsecured debt currently consists of $10.9 billion of our senior unsecured notes and our $3.5 billion unsecured
credit facility, or Credit Facility.

11

---



On
May 19, 2008, we issued two tranches of senior unsecured notes totaling $1.5 billion at a weighted average fixed interest rate of 5.74% consisting of one
$700.0 million tranche with a fixed interest rate of 5.30% due May 30, 2013 and a second $800.0 million tranche with a fixed interest rate of 6.125% due May 30, 2018. We
used the proceeds from the offering to reduce borrowings on the Credit Facility, and for general working capital purposes.

On
June 16, 2008, we completed the redemption of the $200.0 million outstanding principal amount of its 7% MandatOry Par Put Remarketed Securities, or MOPPRS. The
redemption was accounted for as an extinguishment and resulted in a charge in the second quarter of 2008 of approximately $20.3 million.

During
the six months ended June 30, 2008, we drew amounts from the Credit Facility to fund the redemption of the MOPPRS. All other amounts drawn on the Credit Facility during the
period were for general working capital purposes. We repaid a total of $2.1 billion on the Credit Facility during the six months ended June 30, 2008. The total outstanding balance of the
Credit Facility as of June 30, 2008 was $817.7 million, and the maximum amount outstanding during the six months ended June 30, 2008 was approximately $2.6 billion. During
the six months ended June 30, 2008, the weighted average outstanding balance was approximately $1.8 billion. The outstanding balance as of June 30, 2008 includes
$572.7 million (U.S. dollar equivalent) of Euro and Yen-denominated borrowings.



Total secured indebtedness was $6.0 billion and $5.3 billion at June 30, 2008 and December 31, 2007,
respectively.

On
January 15, 2008, we entered into a swap transaction that effectively converted $300.0 million of our variable rate debt to fixed rate debt at a net rate of 3.21%.

On
March 6, 2008, we borrowed $705 million on a term loan that matures March 5, 2012 and bears interest at a rate of LIBOR plus 70 basis points. On May 27,
2008, the loan was increased to $735 million. This loan is secured by the cash flow distributed from six properties and has additional availability of $115 million through the maturity
date.

7.     Partners' Equity

Under the Simon Property Group, L.P. 1998 Stock Incentive Plan, or the Plan, on February 28, 2008, the Compensation Committee of Simon Property's
Board of Directors, or the Board, awarded 310,166 restricted shares of Simon Property common stock to employees at a fair market value of $85.79 per share. On May 8, 2008, the
non-employee Directors of Simon Property were awarded 7,770 restricted shares of Simon Property common stock under this plan at a fair market value of $101.35 per share. The fair market
value of the restricted stock awarded on February 28, 2008, is being recognized as expense over the four-year vesting service period. The fair market value of the restricted stock
awarded on May 8, 2008 is being recognized as expense over a one-year vesting service period. In accordance with our partnership agreement, we issued a like number of units to Simon
Property.

During
the first six months of 2008, five limited partners exchanged 1,558,109 of our units for a like number of shares of Simon Property common stock. These transactions increased Simon
Property's ownership interest in us.

On
July 26, 2007, the Board authorized a common stock repurchase program under which Simon Property may purchase up to $1.0 billion of its common stock over the following
twenty-four months. Simon Property may repurchase the shares in the open market or in privately negotiated transactions. No purchases have been made as part of this program in 2008. The
program has remaining availability of approximately $950.7 million.

12

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As
previously disclosed, for the quarter ending June 30, 2008, holders of Series I 6% Convertible Perpetual Preferred Units, or the Series I Units, and Simon
Property's Series I 6% Convertible Perpetual
Preferred Stock, or Series I Preferred Stock, could have elected to convert their securities during the quarter into our units and shares of Simon Property common stock, respectively. The
optional conversion is a result of the closing 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. If a holder of Series I Units converts them into units, then the holder may also elect to exchange those units into Simon Property common stock on a
one-for-one basis in accordance with our partnership agreement. During the six months ended June 30, 2008, 17,613 shares of Series I Preferred Stock were
converted into 13,957 shares of common stock and Simon Property converted a like number of its Series I Units into units. As of June 30, 2008, the conversion trigger price of
$78.30 had been met and the Series I Units are convertible into 0.798212 of a unit and the Series I Preferred Stock is convertible into 0.798212 of a share of Simon Property common stock
through September 30, 2008.

8.     Commitments and Contingencies



There have been no material developments with respect to the pending litigation disclosed in our 2007 Annual Report on
Form 10-K and no new material developments of litigation have arisen since those disclosures were made.

We
are involved in various other legal proceedings that arise in the ordinary course of our business. We believe that such routine 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.



Joint venture debt is the liability of the joint venture, and is typically secured by the joint venture property, which is
non-recourse to us. As of June 30, 2008, we have loan guarantees and other guarantee obligations of $140.4 million and $6.5 million, respectively, to support our total
$6.5 billion share of joint venture mortgage and other indebtedness in the event that the joint venture borrower defaults under the terms of the underlying arrangement. Mortgages
which are guaranteed by us are secured by the property of the joint venture and that property may be sold in order to satisfy the outstanding obligation.

9.     Real Estate Acquisitions and Dispositions

Effective January 1, 2008, we acquired an additional 1.8% interest in Oxford Valley Mall and Lincoln Plaza, assets that we have consolidated for all
periods presented, for $1.5 million (which gives us a combined ownership interest in those assets of 64.99%).

We
had no consolidated property dispositions during the six months ended June 30, 2008.

10.   Recent Financial Accounting Standards

In September 2006, the FASB issued Statement of Financial Accounting Standard, or SFAS, No. 157, "Fair Value Measurements", or SFAS 157.
SFAS 157 is definitional and disclosure oriented and addresses how companies should approach measuring fair value when required by GAAP; it does not create or modify any current GAAP
requirements to apply fair value accounting. SFAS 157 provides a single definition for fair value that is to be applied consistently for all accounting applications, and also generally
describes and prioritizes according to reliability the methods and inputs used in valuations. SFAS 157 prescribes various disclosures about financial statement categories and amounts which are
measured at fair value, if such disclosures are not already specified elsewhere in GAAP. The new measurement and

13

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disclosure
requirements of SFAS 157 were effective for us in the first quarter of 2008. The adoption of SFAS 157 did not have a significant impact on our financial position or results of
operations.

In
December 2007, the FASB issued SFAS No. 141(R), "Business Combinations", or SFAS 141(R), and SFAS No. 160, "Noncontrolling Interests in Consolidated Financial
Statements", or SFAS 160. SFAS 141(R) requires an acquirer to measure the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at their
fair values on the acquisition date, with goodwill being the excess value over the net identifiable assets acquired. SFAS 160 clarifies that a noncontrolling interest in a subsidiary should be
reported as equity in the consolidated balance sheet and the minority interest's share of earnings is included in consolidated net income. The calculation of earnings per share will continue to be
based on income amounts attributable to the parent. SFAS 141(R) and SFAS 160 are effective for financial statements issued for fiscal years beginning after
December 15, 2008. Early adoption is prohibited. We do not expect the adoption of SFAS 141(R) or SFAS 160 will have a significant impact on our results of operations or financial
position.

In
March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133."
This statement amends and expands the disclosure requirements of SFAS No. 133. This statement is effective for fiscal years beginning after November 15, 2008, and interim periods within
those fiscal years. We are in the process of determining the impact of adopting this statement.

14

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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 that are 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, primarily regional malls, Premium Outlet® centers, The Mills®, and community/lifestyle centers. As of
June 30, 2008, we owned or held an interest in 323 income-producing properties in the United States, which consisted of 166 regional malls, 39 Premium Outlet centers, 69 community/lifestyle
centers, 37 properties acquired in the 2007 acquisition of The Mills Corporation, or Mills, and 12 other shopping centers or outlet centers in 41 states plus Puerto Rico. Of the 37 properties in the
Mills portfolio, 17 of these properties are The Mills, 16 are regional malls, and 4 are community centers. We also own interests in three parcels of land held in the United States for future
development. In the United States, we have two new properties currently under development aggregating approximately 0.8 million square feet which will open during 2008 and 2009.
Internationally, we have ownership interests in 51 European shopping centers (France, Italy and Poland); six Premium Outlet centers in Japan; one Premium Outlet center in Mexico; one Premium
Outlet center in South Korea; and one shopping center in China.

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 the revenues of the property being managed.

We
seek growth in earnings, funds from operations, or FFO, 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:



15

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We
focus on high quality real estate across the retail real estate spectrum. We expand or renovate to enhance existing assets' profitability and market share 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. Lastly, we are selectively expanding our international presence. 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 increased $0.02 during the first six months of 2008, or 2.8%, to $0.73 from $0.71 for the same period last
year. The increase is due primarily to the full year effect of our 2008 and 2007 openings and expansion activities, the releasing of space at higher rates, and the additional management fees derived
from the Mills portfolio, which took effect in July 2007. This increase is offset somewhat by a reduced level of lease termination income, a reduced level of interest income derived on loans made to
SPG-FCM Ventures, LLC, or SPG-FCM, the joint venture we formed to acquire Mills, our 50% share of the additional depreciation expense related to the Mills portfolio, and
a $20.3 million loss on extinguishment of debt related to our redemption of the 7% MandatOry Par Put Remarketed Securities, or MOPPRS.

The
six month period ended June 30, 2007 included $25.0 million of consolidated lease settlement income, $19.0 million of which related to two department store
closures, as compared to the six month period ended June 30, 2008 included approximately $10.7 million of consolidated lease settlement income related to various tenant store closures
within the portfolio. The 2008 results for the six month period also included a $37.6 million loss related to our 50% ownership interest in the operating results of the Mills portfolio,
primarily as a result of additional depreciation expense as stated above.

Core
business fundamentals were stable during the second quarter of 2008. Regional mall comparable sales per square foot, or psf, continued to increase during the second quarter of 2008,
increasing 1.0% to $494 psf from $489 psf for the same period in 2007. Our regional mall average base rents increased 6.3% to $38.81 psf as of June 30, 2008, from $36.51 psf as of
June 30, 2007. Regional mall occupancy was 91.8% as of June 30, 2008, as compared to 92.0% as of June 30, 2007. In addition, our regional mall leasing spreads were $8.32 psf as of
June 30, 2008, representing a 23.1% increase over expiring rents. The operating fundamentals of the Premium Outlet centers also contributed to the improved operating results for the six month
period, with that portion of the portfolio nearly fully occupied at 98.3%, comparable sales psf increasing 6.5% to $519, and leasing spreads at $13.33, or 50.1% above expiring rents.

16

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During
the first six months of 2008, our effective overall borrowing rate for the six months ended June 30, 2008, decreased 39 basis points as compared to the six months ended
June 30, 2007. This was a result of a significant decreased in the base LIBOR rate applicable to a majority of our floating rate debt (2.46% at June 30, 2008, versus 5.32% at
June 30, 2007) and also favorable fixed rates available to
us upon issuance of new unsecured and secured debt. Our financing activities for the six months ended June 30, 2008, included:



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 three domestic platforms. We include acquired properties in this data beginning in the year of acquisition and remove properties sold in the year
disposed. We do not include any properties located outside of the United States. The following table sets forth these key operating statistics for:



17

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June 30,
2008

%/basis point
Change (1)

June 30,
2007

%/basis point
Change (1)Regional Malls:OccupancyConsolidated


92.0%


-20 b
ps

92.2%


+90 b
psUnconsolidated


91.4%


-30 b
ps

91.7%


-40 b
psTotal Portfolio


91.8%


-20 b
ps

92.0%


+40 b
psAverage Base Rent per Square FootConsolidated

$
37.70


5.9
%
$
35.60


2.8
%Unconsolidated

$
41.04


7.3
%
$
38.25


6.5
%Total Portfolio

$
38.81


6.3
%
$
36.51


4.0
%Comparable Sales Per Square FootConsolidated

$
468


-0.2
%
$
470


3.5
%Unconsolidated

$
552


4.9
%
$
527


6.7
%Total Portfolio

$
494


1.0
%
$
489


4.5
%Premium Outlet Centers:Occupancy


98.3%


-110 b
ps

99.4%


unchangedAverage base rent per square foot

$
26.66


6.2
%
$
25.11


5.6
%Comparable sales per square foot

$
519


5.5
%
$
492


8.6
%The Mills®:(2)Occupancy


94.4%








Average base rent per square foot

$
19.43








Comparable sales per square foot

$
380








Mills Regional Malls:(2)Occupancy


87.1%








Average base rent per square foot

$
37.23








Comparable sales per square foot

$
449








Community/Lifestyle Centers:OccupancyConsolidated


92.0%


+80 b
ps

91.2%


+430 b
psUnconsolidated


95.4%


-130 b
ps

96.7%


+50 b
psTotal Portfolio


93.2%


+30 b
ps

92.9%


+320 b
psAverage Base Rent per Square FootConsolidated

$
13.09


7.5
%
$
12.18


2.2
%Unconsolidated

$
11.89


1.3
%
$
11.74


6.0
%Total Portfolio

$
12.68


5.4
%
$
12.03


3.3
%


---

Occupancy Levels and Average Base Rent Per Square Foot.Occupancy and average base rent are based on mall GLA owned by us in the regional malls, all tenants at the
Premium Outlet centers, all tenants in
the Mills portfolio, and all tenants at community/lifestyle centers. Our portfolio has maintained stable occupancy and increased average base rents.

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

18

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reporting
tenants at the Premium Outlet centers and the Mills portfolio. 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.

International Property Data

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

June 30,
2008

%/basis point
Change

June 30,
2007

%/basis point
ChangeEuropean Shopping Centers:Occupancy


98.4%


+130 b
ps

97.1%


Comparable sales per square foot

€
427


7.0
%
€
399


5.4
%Average base rent per square foot

€
29.81


11.9
%
€
26.65


2.5
%International Premium Outlets(1)Occupancy


100.0%


+0 b
ps

100.0%


Comparable sales per square foot

¥
93,847


3.0
%
¥
91,101


2.6
%Average base rent per square foot

¥
4,644


-0.2
%
¥
4,654


0.2
%


---

Results of Operations

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



19

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



For
the purposes of the following comparison between the six months ended June 30, 2008, and 2007, 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 2008 and 2007.



Minimum rents increased $44.1 million during the period, of which the property transactions accounted for $12.0 million
of the increase. Comparable rents increased $32.1 million, or 6.3%. This was primarily due to the leasing of space at higher rents that resulted in an increase in minimum rents of
$25.3 million and a $6.2 million increase in comparable property straight-line rents and fair market value

20

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of
in-place lease amortization. In addition, rents from carts, kiosks, and other temporary tenants increased comparable rents by $0.6 million.

Overage
rents decreased $0.8 million or 4.3%, reflecting moderating tenant sales.

Tenant
reimbursements increased $21.8 million, of which the property transactions accounted for $5.1 million. The remainder of the increase of $16.7 million, or
7.0%, was in comparable properties and was due to our ongoing initiative of converting our leases to a fixed reimbursement with an annual escalation provision for common area maintenance costs. We are
effectively 70% converted to a fixed common area maintenance methodology.

Management
fees and other income increased $17.4 million principally as a result of additional management fees derived from managing the properties in the Mills portfolio and
additional leasing and development fees as a result of incremental property activity.

Total
other income decreased $15.5 million, and was principally the result of the following:



Depreciation
and amortization expense increased $6.0 million primarily due to the impact of our 2007 and 2008 acquisition and expansion and renovation activity and the accelerated
depreciation of tenant improvements for tenant leases terminated during the period.

Real
estate taxes increased $6.4 million from the prior period, $3.3 million of which is related to the property transactions, and $3.1 million from our comparable
properties due to the effect of increases resulting from reassessments, higher tax rates, and the effect of expansion and renovation activities.

Provision
for credit losses increased $5.4 million primarily due to an increase in bankruptcies and an increase in tenant delinquencies over the prior period. Given the current
challenges in the economic climate, we would expect this trend to continue for the duration of 2008.

Home
and regional office expense increased $5.6 million primarily due to increased personnel costs, primarily the result of the Mills acquisition, and the increased expense from
our incentive compensation plans.

Interest
expense decreased $11.3 million due principally to the impact of the significant reduction in the LIBOR rate on our consolidated variable rate debt portfolio and the
effect of our 2007 and 2008 refinancing activity, resulting in a lower effective borrowing rate.

We
recognized a loss on extinguishment of debt of $20.3 million in the second quarter of 2008 related to the redemption of the $200 million outstanding principal amount of
MOPPRS. We extinguished the debt because the remarketing reset base rate of the MOPPRS was above the rate for 30-year U.S. Treasury securities at the time of redemption.

Income
from unconsolidated entities decreased $18.9 million, due primarily to the impact of the Mills transaction (net of eliminations). On a net income basis, our share of income
from SPG-FCM decreased $21.2 million from the prior period due to additional depreciation and amortization expenses on asset basis step-ups in purchase accounting.

21

---



Preferred
unit distributions decreased $4.3 million as a result of Simon Property's redemption of its Series G preferred stock in the fourth quarter of 2007 and our related
redemption of Series G preferred units held by Simon Property.



Minimum rents increased $83.9 million during the period, of which the property transactions accounted for $30.5 million
of the increase. Comparable rents increased $53.4 million, or 5.3%. This was primarily due to the leasing of space at higher rents that resulted in an increase in minimum rents of
$49.6 million and a $3.2 million increase in comparable property straight-line rents and fair market value of in-place lease amortization. In addition, rents from
carts, kiosks, and other temporary tenants increased comparable rents by $0.3 million.

Overage
rents decreased $2.0 million or 5.6%, reflecting moderating tenant sales.

Tenant
reimbursements increased $41.5 million, of which the property transactions accounted for $13.5 million. The remainder of the increase of $28.0 million, or
6.0%, was in comparable properties and was due to our ongoing initiative to convert our leases to a fixed reimbursement with an annual escalation provision for common area maintenance costs.

Management
fees and other income increased $29.5 million principally as a result of additional management fees derived from managing the properties in the Mills portfolio, and
additional leasing and development fees as a result of incremental equity method property activity.

Total
other income decreased $42.7 million, and was principally the result of the following:



Depreciation
and amortization expense increased $18.8 million primarily due to the impact of our 2007 and 2008 acquisition, expansion and renovation activity and the accelerated
depreciation of tenant improvements for tenant leases terminated during the period.

Real
estate taxes increased $11.7 million from the prior period, $5.6 million of which is related to the property transactions, and $6.1 million from our comparable
properties due to the effect of increases resulting from reassessments, higher tax rates, and the effect of expansion and renovation activities.

Provision
for credit losses increased $11.4 million primarily due to an increase in tenant bankruptcies and tenant delinquencies over the prior year. This was reflected in the
total square feet lost to tenant bankruptcies of 151,000 during the first six months of 2008 as compared to the comparable period in 2007 of only 30,000 square feet. Given the current challenges in
the economic climate generally, we would expect this trend to continue for the duration of 2008.

Home
and regional office expense increased $11.5 million primarily due to increased personnel costs, primarily the result of the Mills acquisition, and the increased expense from
our incentive compensation plans.

Other
expenses increased $5.3 million due to increased consulting and professional fees, including legal fees and related costs.

22

---



Interest
expense decreased $3.9 million due to the savings that resulted from a significant reduction in the LIBOR rate and the effect of our financing activity discussed above in
the Results Overview section.

We
recognized a loss on extinguishment of debt of $20.3 million in the second quarter of 2008 related to the redemption of the $200 million outstanding principal of MOPPRS.
We extinguished the debt because the remarketing reset base rate of the MOPPRS was above the rate for 30-year U.S. Treasury securities at the date of redemption.

Income
(loss) from unconsolidated entities decreased $33.5 million, due primarily to the impact of the Mills transaction (net of eliminations). On a net loss basis, our share of
loss from SPG-FCM increased $32.2 million from the prior period due to a full six months of SPG-FCM activity in 2008 as compared to only three months of activity in 2007
and the loss is being driven by depreciation and amortization expenses on asset basis step-ups in purchase accounting.

Preferred
unit distributions decreased $7.7 million as a result of Simon Property's redemption of its Series G preferred stock in the fourth quarter of 2007 and our related
redemption of Series G preferred units held by Simon Property.

We
sold the following properties in 2007 on the indicated date. Due to the limited significance of these properties on our financial statements, the operating results are reflected in
our income from continuing operations.

Property

Date of DispositionLafayette Square

December 27, 2007University Mall

September 28, 2007Boardman Plaza

September 28, 2007Griffith Park Plaza

September 20, 2007Alton Square

August 2, 2007


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 by setting interest rates for each financing or
refinancing based on current market conditions. Floating rate debt currently comprises only approximately 11% 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 $601.8 million during the first six months of 2008. In addition, the Credit Facility provides an alternative source of liquidity as our cash needs vary from
time to time.

Our
balance of cash and cash equivalents increased $1.9 million during the first six months of 2008 to $503.9 million as of June 30, 2008. Our balance of cash and
cash equivalents as of June 30, 2008, and December 31, 2007, includes $30.8 million and $41.3 million, respectively, related to our co-branded gift card
programs, which we do not consider available for general working capital purposes. The increase in our deferred costs and other assets for the period include increases in our investments in marketable
and non-marketable securities of approximately $213.0 million.

On
June 30, 2008, the Credit Facility had available borrowing capacity of approximately $2.7 billion. During the first six months of 2008, the maximum amount outstanding
under the Credit Facility was $2.6 billion and the weighted average amount outstanding was $1.8 billion. The weighted average interest rate was 3.69% for the six months ended
June 30, 2008.

We
and Simon Property also have access to public equity and long term unsecured debt markets and access to private equity from institutional investors at the property level.

23

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Acquisition of The Mills Corporation by SPG-FCM

As previously disclosed, SPG-FCM, a 50/50 joint venture between an affiliate of the Operating Partnership and funds managed
by Farallon, completed its acquisition of Mills in April 2007. During 2007, we and Farallon each contributed $650.0 million to SPG-FCM to fund the acquisition. As part of the
transaction we also made loans to SPG-FCM and Mills that bore interest primarily at rates of LIBOR plus 270-275 basis points. These funds were used to repay loans and other
obligations of Mills, including the redemption of preferred stock of Mills. All of the loans made to Mills were repaid in 2007. Our only remaining loan is to SPG-FCM which had a balance of
$534.0 million at June 30, 2008. During the first two quarters of 2008 and 2007, we recorded approximately $8.1 million and $25.2 million in interest income (net of
inter-entity eliminations), respectively, related to loans to SPG-FCM and Mills. We also recorded fee income, including fee income amortization related to up-front fees on
loans made to SPG-FCM and Mills, during the first two quarters of 2008 and 2007 of approximately $1.3 million and $9.8 million (net of inter-entity eliminations),
respectively, for providing refinancing services to the Mills portfolio and SPG-FCM. The loan facility to SPG-FCM bears an interest rate of LIBOR plus 275 basis points and
matures on June 7, 2009, with three available one-year extensions, subject to certain terms and conditions.

Cash Flows

Our net cash flow from operating activities and distributions of capital from unconsolidated entities for the six months ended
June 30, 2008, totaled $814.7 million. In addition, we had net proceeds from all of our debt financing and repayment activities in this period of $430.1 million. These activities
are further discussed below in "Financing and Debt." 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 2008 and on a long-term basis. 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:



Financing and Debt



Our unsecured debt currently consists of $10.9 billion of our senior unsecured notes and the Credit Facility.

24

---



On
May 19, 2008, we issued two tranches of senior unsecured notes totaling $1.5 billion at a weighted average fixed interest rate of 5.74% consisting of a
$700.0 million tranche with a fixed interest rate of 5.30% due May 30, 2013 and a second $800.0 million tranche with a fixed interest rate of 6.125% due May 30, 2018. We
used proceeds from the offering to reduce borrowings on the Credit Facility and for general working capital purposes.

During
the six months ended June 30, 2008, we drew amounts from the Credit Facility to fund the redemption of the MOPPRS. All other amounts drawn on the Credit Facility during the
period were primarily for general working capital purposes. We repaid a total of $2.1 billion on the Credit Facility during the six months ended June 30, 2008. The total outstanding
balance of the Credit Facility as of June 30, 2008 was $817.7 million, and the maximum outstanding balance during the six months ended June 30, 2008 was approximately
$2.6 billion. During the first six months of 2008, the weighted average outstanding balance on the Credit Facility was approximately $1.8 billion. The outstanding balance as of
June 30, 2008 includes $572.7 million (U.S. dollar equivalent) in Euro and Yen-denominated borrowings.



Total secured indebtedness was $6.0 billion and $5.3 billion at June 30, 2008, and December 31, 2007,
respectively.

On
January 15, 2008, we entered into a swap transaction that effectively converted $300.0 million of variable rate debt to fixed rate debt at a net rate of 3.21%.

On
March 6, 2008, we borrowed $705 million on a term loan that matures March 5, 2012 and bears a rate of LIBOR plus 70 basis points. On May 27, 2008, the loan
was increased to $735 million. This loan is secured by the cash flow distributed from six properties and has additional availability of $115 million through the maturity date.



Our consolidated debt, adjusted to reflect outstanding derivative instruments, and the effective weighted average interest rates as of
June 30, 2008, and December 31, 2007, consisted of the following (dollars in thousands):

Debt Subject to

Adjusted Balance
as of
June 30, 2008

Effective
Weighted Average
Interest Rate

Adjusted Balance
as of
December 31, 2007

Effective
Weighted Average
Interest RateFixed Rate

$
15,761,559


5.79
%
$
14,056,008


5.88
%Variable Rate


1,932,215


3.36
%

3,162,666


4.73
%$
17,693,774


5.52
%
$
17,218,674


5.67
%


As
of June 30, 2008, we had interest rate cap protection agreements on approximately $92.9 million of consolidated variable rate debt. We also hold $300.0 million of
notional amount fixed rate swap
agreements that have a weighted average fixed pay rate of 3.21% and a weighted average variable receive rate of 3.02%. As of June 30, 2008, the net effect of these agreements effectively
converted $300.0 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 commitments
previously disclosed in our 2007 Annual Report on

25

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Form 10-K.
The following table summarizes the material aspects of our future obligations as of June 30, 2008, for the remainder of 2008 and subsequent years thereafter
(dollars in thousands):

2008

20092010

20112013

After 2013

TotalLong Term DebtConsolidated (1)

$
359,294

$
3,946,180

$
7,327,394

$
6,037,133

$
17,670,001Pro rata share of Long-Term Debt:Consolidated (2)

$
357,932

$
3,916,965

$
7,193,128

$
5,920,676

$
17,388,701Joint Ventures (2)


343,506


1,119,223


2,282,230


2,783,734


6,528,693Total Pro Rata Share of Long-Term Debt

$
701,438

$
5,036,188

$
9,475,358

$
8,704,410

$
23,917,394


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Our
off-balance sheet arrangements consist primarily of our investments in real estate joint ventures which are common in the real estate industry and are described in
Note 5 of the notes to
the accompanying financial statements. Joint venture debt is the liability of the joint venture, is typically secured by the joint venture property, and is non-recourse to us. As of
June 30, 2008, we had loan guarantees and other guarantee obligations of $140.4 million and $6.5 million, respectively, to support our total $6.5 billion share of joint
venture mortgage and other indebtedness presented in the table above.

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 best interest to
purchase our partner's interest and we believe we have adequate liquidity to execute the purchase without hindering our cash flows or liquidity, then we may initiate these provisions or elect to buy.
If we 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.The acquisition of high quality individual properties or portfolios of properties remain an integral component of our growth strategies. Effective
January 1, 2008 we acquired an additional 1.8% interest in Oxford Valley Mall and Lincoln Plaza (which gives us a combined ownership interest of 64.99%).

Dispositions.We continue to pursue the sale of properties that no longer meet our strategic criteria or that are not the primary retail venue within their trade
area. However, we did not dispose of any properties during the first six months of 2008.

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Development Activity

New U.S. Developments.The following describes certain of our significant new development projects, the estimated total cost, and our share of the estimated total
cost and our share of the construction in progress balance as of June 30, 2008 (dollars in millions):

Property

Location

Gross
Leasable
Area

Estimated
Total
Cost (a)

Our Share of
Estimated
Total Cost

Our Share of
Construction
in Progress

Estimated
Opening
DateUnder Construction:Cincinnati Premium Outlets

Monroe, OH


400,000

$
92

$
92

$
18

3rd Quarter 2009Jersey Shore Premium Outlets

Tinton Falls, NJ


435,000


157


157


88

4th Quarter 2008


---

We expect to fund these projects with available cash flow from operations, borrowings from our credit facility, or project specific construction
loans. We expect our share of total 2008 new development costs remaining for the year to be approximately $250 million.

Strategic Expansions and Renovations.In addition to new development, we also incur costs related to construction for significant renovation and/or expansion
projects at our properties. Included in these projects are the renovation and addition of Nordstrom at Northshore Mall and Ross Park Mall; expansions and life-style additions at Tacoma
Mall and University Park Mall; Phase II expansions at The Domain, Orlando Premium Outlets, and The Promenade at Camarillo; and the acquisition and renovation of several anchor stores previously
operated by Federated Department Stores.

We
expect to fund these capital projects with available cash flow from operations or borrowings from the Credit Facility. We have other renovation and/or expansion projects currently
under construction or in preconstruction development and expect to invest a total of approximately $325 million (our share) in expansion and renovation activities for the remainder of 2008.

International.Our international joint venture properties typically reinvest the net cash flow from the properties 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 Outlet joint ventures in Japan and Mexico where we
use Yen and Peso denominated financing. We expect our share of international development for 2008 to approximate $223 million.

Currently,
our net income exposure to changes in the volatility of the Euro, Yen, Peso and other foreign currencies is not material. Except for our share of the proceeds from the sale of
five properties owned by one of our European joint ventures described below, we do not expect to repatriate a significant amount of any foreign denominated earnings in the near term since cash flows
from operations are currently being reinvested in other development projects.

The
carrying amount of our total combined investment in Simon Ivanhoe and GCI as of June 30, 2008, net of the related cumulative translation adjustment, was $291.4 million.
We account for these investments using the equity method of accounting. Currently, three European developments are under construction, which will add approximately 1,091,000 square feet of GLA for a
total net cost of approximately €222 million, of which our share is approximately €53 million, or $83.8 million based on Euro:USD exchange rates at
June 30, 2008. Additionally, on July 5, 2007, Simon Ivanhoe sold its interest in five of the assets located in Poland, for which we recorded our share of the gain of
$90.2 million.

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As
of June 30, 2008, the carrying amount of our 40% joint venture investment in the six Japanese Premium Outlet centers, net of the related cumulative translation adjustment, was
$269.2 million. Currently, one property in Japan is under development which will add approximately 172,200 square feet of GLA for a total net cost of approximately
¥5.4 billion, of which our share is approximately ¥2.1 billion, or $20.2 million based on Yen:USD exchange rates at June 30, 2008.

Through
joint venture arrangements, we have a 32.5% ownership interest in five shopping centers in China. One center, located in Changshu, opened in June 2008 while the remaining four
centers are still under construction. Our share of the total equity commitment for these shopping centers is approximately $59.3 million. Our combined investment in the Chinese joint ventures
was approximately $38.2 million and $32.1 million as of June 30, 2008 and December 31, 2007 respectively, net of the related cumulative translation adjustments. We account
for our investments in these joint ventures under the equity method of accounting.

Distributions and Stock Repurchase Program

Simon Property's Board of Directors declared and we paid a distribution of $0.90 per unit in the second quarter of 2008. 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 actual results of operations, cash available for distributions, and the amount of distributions required to maintain Simon Property's status as a REIT.

On
July 26, 2007, Simon Property's Board of Directors authorized the repurchase of up to $1.0 billion of common stock over the following twenty-four months.
Simon Property may repurchase the shares in the open market or in privately negotiated transactions. During 2008, no purchases were made as part of this program. The program had remaining availability
of approximately $950.7 million at June 30, 2008.

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.

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Item 3.    Qualitative and Quantitative Disclosure 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 2007 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, 2007.

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 June 30, 2008.

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 June 30, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.

Part II  Other Information

Item 1.    Legal Proceedings

There have been no material developments with respect to the pending litigation disclosed in our 2007 Annual Report on
Form 10-K and no new material developments or litigation has arisen since those disclosures were made.

We
are involved in various other legal proceedings that arise in the ordinary course of our business. We believe that such routine 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 I,
Item 1: Business" of our 2007 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
Ernst & Young, LLP, the Company's independent registered public accounting firm, to perform certain international tax compliance services. 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.

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Item 6.    Exhibits

Exhibit
Number

Exhibit Descriptions3.1

Eighth Amended and Restated Agreement of Limited Partnership of Simon Property Group, L.P. dated May 8, 2008 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Simon
Property Group, Inc. on May 9, 2008).4.1

Form of Twentieth Supplemental Indenture to the Indenture dated as of November 26, 1996 between Simon Property Group, L.P. and The Bank of New York Trust Company, N.A. (as successor to The Chase Manhattan Bank), as Trustee
(incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by the Registrant on May 12, 2008).31.1

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.By Simon Property Group, Inc.,
General Partner/s/ Stephen E. Sterrett
Stephen E. Sterrett
Executive Vice President and Chief Financial OfficerDate: August 13, 2008


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