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 March 31, 2001  SIMON PROPERTY GROUP, INC.
  SPG REALTY CONSULTANTS, INC.(Exact name of registrant as specified in
  its charter)
  (Exact name of registrant as specified in
  its charter)Delaware
  Delaware(State of incorporation or organization)
  (State of incorporation or organization)001-14469
  001-14469-01(Commission File No.)
  (Commission File No.)046268599
  13-2838638(I.R.S. Employer Identification No.)
  (I.R.S. Employer Identification No.)National City
  Center
  National City
  Center115 West Washington
  Street, Suite 15 East
  115 West Washington
  Street, Suite 15 EastIndianapolis,
  Indiana  46204
  Indianapolis,
  Indiana  46204(Address of principal executive offices)
  (Address of principal executive offices)(317) 636-1600
  (317) 636-1600(Registrant's telephone number, including
  area code)
  (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   x     NO    o As
of May 1, 2001, 171,332,320 shares of common stock, par value $0.0001 per
share, 3,200,000 shares of Class B common stock, par value $0.0001 per share,
and 4,000 shares of Class C common stock, par value $0.0001 per share of Simon
Property Group, Inc. were outstanding, and were paired with 1,745,363 shares of
common stock, par value $0.0001 per share, of SPG Realty Consultants, Inc.   SIMON PROPERTY GROUP, INC. AND
SPG REALTY CONSULTANTS, INC.

FORM 10-Q

INDEX



Part I - Financial InformationItem 1:  Financial StatementsSimon Property Group, Inc.
  and SPG Realty Consultants, Inc.:Condensed
  Combined Balance Sheets as of March 31, 2001 and December 31, 2000Condensed
  Combined Statements of Operations for the three-month periods ended March 31,
  2001 and 2000Condensed
  Combined Statements of Cash Flows for the three-month periods ended March 31,
  2001 and 2000Simon Property Group, Inc.:Condensed
  Consolidated Balance Sheets as of March 31, 2001 and December 31, 2000Condensed
  Consolidated Statements of Operations for the three-month periods ended March
  31, 2001 and 2000Condensed
  Consolidated Statements of Cash Flows for the three-month periods ended March
  31, 2001 and 2000SPG Realty Consultants, Inc.:Condensed
  Consolidated Balance Sheets as of March 31, 2001 and December 31, 2000Condensed
  Consolidated Statements of Operations for the three-month periods ended March
  31, 2001 and 2000Condensed
  Consolidated Statements of Cash Flows for the three-month periods ended March
  31, 2001 and 2000Notes
  to Unaudited Condensed Financial StatementsItem
  2:  Management's Discussion and
  Analysis of Financial Condition and Results of OperationsItem
  3: Qualitative and Quantitative Disclosure About Market RiskPart II - Other InformationItems
  1 through 6Signature

Simon Property Group, Inc. and SPG Realty Consultants, Inc.Condensed Combined
Balance Sheets

(Dollars
in thousands, except per share amounts)

March
  31, 2001
  December
  31, 2000ASSETS:Investment properties, at cost
  $13,041,586
  $13,045,133Less  accumulated depreciation
  1,548,991
  1,480,71911,492,595
  11,564,414Cash and cash equivalents
  135,017
  223,111Tenant receivables and accrued revenue,
  net
  257,658
  302,198Notes and advances receivable from
  Management Company and affiliates
  214,584
  182,401Investment in unconsolidated entities, at
  equity
  1,328,507
  1,315,836Goodwill, net
  38,091
  38,384Deferred costs and other assets, net
  253,731
  269,867Minority interest, net
  44,211
  41,734$13,764,394
  $13,937,945LIABILITIES:Mortgages and other indebtedness
  $8,747,218
  $8,728,582Accounts payable and accrued expenses
  418,412
  451,207Cash distributions and losses in
  partnerships and joint ventures, at equity
  47,156
  44,634Accrued dividends
  19,293
  18,266Other liabilities
  141,246
  227,552Total liabilities
  9,373,325
  9,470,241COMMITMENTS AND
  CONTINGENCIES (Note 9)LIMITED PARTNERS'
  INTEREST IN THE OPERATING PARTNERSHIPS
  892,560
  913,482LIMITED PARTNERS'
  PREFERRED INTEREST IN THE SPG OPERATING PARTNERSHIP
  150,852
  149,885PREFERRED STOCK OF
  SUBSIDIARY (Liquidation value $350,000)
  339,933
  339,866SHAREHOLDERS' EQUITY:CAPITAL STOCK OF SIMON PROPERTY GROUP,
  INC. (750,000,000 total shares authorized, $.0001 par value, 237,996,000
  shares of excess common stock):All series of preferred stock,
  100,000,000 shares authorized, 5,881,116 issued and outstanding.  Liquidation values $559,065
  538,736
  538,684Common stock, $.0001 par value,
  400,000,000 shares authorized, 171,330,445 and 170,840,315 issued and
  outstanding, respectively
  17
  17Class B common stock, $.0001 par
  value, 12,000,000 shares authorized, 3,200,000 issued and outstanding
  1
  1Class C common stock, $.0001 par
  value, 4,000 shares authorized, issued and outstanding
  --
  --CAPITAL STOCK OF SPG REALTY CONSULTANTS,
  INC.:Common stock, $.0001 par value,  7,500,000 shares authorized, 1,745,344 and
  1,740,443 issued and outstanding, respectively
  --
  --Capital in excess of par value
  3,324,861
  3,313,557Accumulated deficit
  (766,764)
  (715,288)Accumulated other comprehensive income
  (7,441)
  --Unamortized restricted stock award
  (29,168)
  (19,982)Common stock held in treasury at cost,
  2,098,555 shares.
  (52,518)
  (52,518)Total shareholders' equity
  3,007,724
  3,064,471$13,764,394
  $13,937,945The accompanying notes are an integral part of these
statements.


Simon Property Group,
Inc. and SPG Realty Consultants, Inc.Condensed Combined
Statements of Operations



(Dollars
in thousands, except per share amounts)



For the Three Months Ended March 31,2001
  2000REVENUE:Minimum rent
  $307,131
  $296,462Overage rent
  9,883
  12,038Tenant reimbursements
  148,514
  144,844Other income
  25,148
  24,507Total
  revenue
  490,676
  477,851EXPENSES:Property operating
  78,774
  76,982Depreciation and amortization
  106,515
  98,488Real estate taxes
  52,792
  48,422Repairs and maintenance
  19,727
  19,565Advertising and promotion
  13,806
  16,010Provision for credit losses
  2,904
  2,131Other
  6,785
  9,109Total operating expenses
  281,303
  270,707OPERATING
  INCOME
  209,373
  207,144INTEREST
  EXPENSE
  157,924
  158,659INCOME
  BEFORE MINORITY INTEREST
  51,449
  48,485MINORITY
  INTEREST
  (2,116)
  (2,434)GAIN
  ON SALES OF ASSETS, NET
  2,711
  7,096INCOME
  BEFORE UNCONSOLIDATED ENTITIES
  52,044
  53,147INCOME
  FROM UNCONSOLIDATED ENTITIES
  11,731
  17,989INCOME
  BEFORE EXTRAORDINARY ITEMS AND CUMULATIVE    EFFECT OF ACCOUNTING CHANGE
  63,775
  71,136EXTRAORDINARY
  ITEMS - DEBT RELATED TRANSACTIONS
  (25)
  (440)CUMULATIVE
  EFFECT OF ACCOUNTING CHANGE (Note 5)
  (1,638)
  (12,342)INCOME
  BEFORE ALLOCATION TO LIMITED PARTNERS
  62,112
  58,354LESS:LIMITED PARTNERS' INTEREST IN THE OPERATING
  PARTNERSHIPS
  11,742
  10,739PREFERRED DISTRIBUTIONS OF THE SPG
  OPERATING PARTNERSHIP
  2,912
  2,817PREFERRED DIVIDENDS OF SUBSIDIARY
  7,334
  7,334NET
  INCOME
  40,124
  37,464PREFERRED
  DIVIDENDS
  (9,185)
  (9,221)NET
  INCOME AVAILABLE TO COMMON SHAREHOLDERS
  $30,939
  $28,243BASIC
  AND DILUTED EARNINGS PER COMMON PAIRED SHARE:Income before extraordinary items and
  cumulative effect of accounting change
  $0.19
  $0.21Net income
  $0.18
  $0.16Net Income
  $40,124
  $37,464Cumulative effect of accounting change
  (1,995)
  -Unrealized loss on interest rate hedge
  agreements
  (6,204)
  -Net losses on derivative instruments
  reclassified from accumulatedother comprehensive income into
  interest expense
  758
  -Unrealized loss on investment
  -
  (780)Comprehensive Income
  $32,683
  $36,684Simon Property Group, Inc. and
SPG Realty Consultants, Inc.Condensed Combined
Statements of Cash Flows

(Dollars
in thousands)

For the Three Months Ended March 31,2001
  2000CASH FLOWS FROM
  OPERATING ACTIVITIES:Net income
  $40,124
  $37,464Adjustments to reconcile net income to
  net cash provided by operating activitiesDepreciation and amortization
  109,148
  101,844Extraordinary items
  25
  440Cumulative effect of accounting change
  1,638
  12,342Gain on sales of assets, net
  (2,711)
  (7,096)Limited partners' interest in
  Operating Partnerships
  11,742
  10,739Preferred dividends of Subsidiary
  7,334
  7,334Preferred distributions of the SPG Operating Partnership
  2,912
  2,817Straight-line rent
  (3,285)
  (4,515)Minority interest
  2,116
  2,434Equity in income of unconsolidated
  entities
  (11,731)
  (17,989)Changes in assets and liabilitiesTenant receivables and accrued revenue
  47,420
  50,371Deferred costs and other assets
  (10,265)
  8,192Accounts payable, accrued expenses and
  other liabilities
  (96,076)
  (93,163)Net cash provided by operating
  activities
  98,391
  111,214CASH FLOWS FROM
  INVESTING ACTIVITIES:Capital expenditures
  (74,837)
  (109,858)Net proceeds from sale of assets
  19,550
  19,217Investments in unconsolidated entities
  (13,591)
  (71,344)Distributions from unconsolidated
  entities
  41,107
  72,837Investments in and advances (to)/from
  Management Company and affiliate
  (32,183)
  10,002Net cash used in investing activities
  (59,954)
  (79,146)CASH FLOWS FROM
  FINANCING ACTIVITIES:Proceeds from sales of common and
  preferred stock, net
  559
  --Minority interest distributions, net
  (4,072)
  (4,345)Preferred dividends of Subsidiary
  (7,334)
  (7,334)Preferred distributions of the SPG
  Operating Partnership
  (2,912)
  (2,817)Preferred dividends and distributions to
  shareholders
  (95,276)
  (97,705)Distributions to limited partners
  (32,792)
  (33,022)Mortgage and other note proceeds, net of
  transaction costs
  577,540
  693,175Mortgage and other note principal
  payments
  (562,244)
  (615,540)Net cash used in financing activities
  (126,531)
  (67,588)DECREASE IN CASH AND
  CASH EQUIVALENTS
  (88,094)
  (35,520)CASH AND CASH
  EQUIVALENTS, beginning of period
  223,111
  157,632CASH AND CASH
  EQUIVALENTS, end of period
  $135,017
  $122,112The accompanying notes are an integral part of these
statements.



Simon Property Group, Inc.Condensed Consolidated
Balance Sheets

(Dollars
in thousands, except per share amounts)

March
  31,
  December
  31,2001
  2000ASSETS:Investment properties, at cost
  $13,034,425
  $13,037,506Less  accumulated depreciation
  1,547,632
  1,479,37811,486,793
  11,558,128Cash and cash equivalents
  128,312
  214,404Tenant receivables and accrued revenue,
  net
  257,267
  296,785Notes and advances receivable from
  Management Company and affiliates
  214,584
  182,401Note receivable from the SRC Operating
  Partnership (Interest at 8%, due 2009)
  1,432
  29,425Investment in unconsolidated entities, at
  equity
  1,321,520
  1,308,838Goodwill, net
  38,091
  38,384Deferred costs and other assets, net
  250,606
  240,665Minority interest, net
  44,211
  42,377$13,742,816
  $13,911,407LIABILITIES:Mortgages and other indebtedness
  $8,747,218
  $8,728,582Accounts payable and accrued expenses
  415,727
  439,190Cash distributions and losses in
  partnerships and joint ventures, at equity
  47,157
  44,634Accrued dividends
  19,293
  18,266Other liabilities
  141,611
  227,481Total liabilities
  9,371,006
  9,458,153COMMITMENTS AND
  CONTINGENCIES (Note 9)LIMITED PARTNERS'
  INTEREST IN THE SPG OPERATING PARTNERSHIP
  887,255
  909,491LIMITED PARTNERS'
  PREFERRED INTEREST IN THE SPG OPERATING PARTNERSHIP
  150,852
  149,885PREFERRED STOCK OF SUBSIDIARY
  (Liquidation value $350,000)
  339,933
  339,866SHAREHOLDERS' EQUITY
  (750,000,000 total shares authorized, $.0001 par   value, 237,996,000 shares of excess
  common stock):All series of preferred stock,
  100,000,000 shares authorized, 5,881,116 issued      and outstanding.  Liquidation values $559,065
  538,736
  538,684Common stock, $.0001 par value,
  400,000,000 shares authorized, 171,330,445and 170,840,315 issued and
  outstanding, respectively
  17
  17Class B common stock, $.0001 par value,
  12,000,000 shares authorized, 3,200,000 issued and outstanding
  1
  1Class C common stock, $.0001 par value,
  4,000 shares authorized, issued and outstanding
  
  Capital in excess of par value
  3,312,158
  3,299,016Accumulated deficit
  (768,204)
  (711,395)Accumulated other comprehensive income
  (7,441)
  Unamortized restricted stock award
  (29,168)
  (19,982)Common stock held in treasury at cost,
  2,098,555 shares
  (52,329)
  (52,329)Total shareholders' equity
  2,993,770
  3,054,012$13,742,816
  $13,911,407The accompanying notes are an
integral part of these statements.



Simon Property Group, Inc.Condensed Consolidated
Statements of Operations

(Dollars
in thousands, except per share amounts)

For the Three Months Ended March 31,2001
  2000REVENUE:Minimum rent
  $307,151
  $296,478Overage rent
  9,883
  12,038Tenant reimbursements
  148,514
  144,844Other income
  24,267
  22,832Total revenue
  489,815
  476,192EXPENSES:Property operating
  78,626
  75,232Depreciation and amortization
  106,492
  98,465Real estate taxes
  52,787
  48,385Repairs and maintenance
  19,727
  19,565Advertising and promotion
  13,806
  16,064Provision for credit losses
  2,904
  2,131Other
  6,896
  7,625Total operating expenses
  281,238
  267,467OPERATING
  INCOME
  208,577
  208,725INTEREST
  EXPENSE
  157,925
  158,684INCOME
  BEFORE MINORITY INTEREST
  50,652
  50,041MINORITY
  INTEREST
  (2,238)
  (2,434)GAIN
  ON SALES OF ASSETS, NET
  2,711
  7,096INCOME
  BEFORE UNCONSOLIDATED ENTITIES
  51,125
  54,703INCOME
  FROM UNCONSOLIDATED ENTITIES
  11,742
  17,330INCOME
  BEFORE EXTRAORDINARY ITEMSAND CUMULATIVE EFFECT OF ACCOUNTING
  CHANGE
  62,867
  72,033EXTRAORDINARY
  ITEMS - DEBT RELATED TRANSACTIONS
  (25)
  (440)CUMULATIVE
  EFFECT OF ACCOUNTING CHANGE (Note 5)
  (1,638)
  (12,342)INCOME
  BEFORE ALLOCATION TO LIMITED PARTNERS
  61,204
  59,251LESS:LIMITED PARTNERS' INTEREST IN THE SPG
  OPERATING PARTNERSHIP
  11,491
  10,987PREFERRED DISTRIBUTIONS OF THE SPG
  OPERATING PARTNERSHIP
  2,912
  2,817PREFERRED DIVIDENDS OF SUBSIDIARY
  7,334
  7,334NET
  INCOME
  39,467
  38,113PREFERRED
  DIVIDENDS
  (9,185)
  (9,221)NET
  INCOME AVAILABLE TO COMMON SHAREHOLDERS
  $30,282
  $28,892BASIC
  AND DILUTED EARNINGS PER COMMON SHARE:Income before extraordinary items and
  cumulative effect of accounting change
  $0.19
  $0.22Net income
  $0.18
  $0.17BASIC
  WEIGHTED AVERAGE SHARES OUTSTANDING
  172,001
  173,223DILUTED
  WEIGHTED AVERAGE SHARES OUTSTANDING
  172,178
  173,268Net Income
  $39,467
  $38,113Cumulative effect of accounting change
  (1,995)
  -Unrealized loss on interest rate hedge
  agreements
  (6,204)
  -Net losses on derivative instruments
  reclassified from       accumulated other comprehensive
  income into interest expense
  758
  -Unrealized loss on investment
  -
  (780)Comprehensive Income
  $32,026
  $37,333Simon Property Group, Inc.Condensed Consolidated
Statements of Cash Flows

(Dollars in thousands)

For the Three Months Ended March 31,2001
  2000CASH FLOWS FROM
  OPERATING ACTIVITIES:Net income
  $39,467
  $38,113Adjustments to reconcile net income to
  net cash provided by operating activitiesDepreciation and amortization
  109,126
  101,822Extraordinary items
  25
  440Cumulative effect of accounting change
  1,638
  12,342Gain on sales of assets, net
  (2,711)
  (7,096)Limited partners' interest in
  Operating Partnership
  11,491
  10,987Preferred dividends of Subsidiary
  7,334
  7,334Preferred distributions of the SPG
  Operating Partnership
  2,912
  2,817Straight-line rent
  (3,285)
  (4,515)Minority interest
  2,238
  2,434Equity in income of unconsolidated
  entities
  (11,742)
  (17,330)Changes in assets and liabilitiesTenant receivables and accrued revenue
  46,731
  52,672Deferred costs and other assets
  (10,172)
  8,217Accounts payable, accrued expenses and
  other liabilities
  (96,596)
  (98,884)Net cash provided by operating
  activities
  96,456
  109,353CASH FLOWS FROM
  INVESTING ACTIVITIES:Capital expenditures
  (75,018)
  (103,719)Cash from mergers, acquisitions, property
  sales and consolidation of joint ventures, net
  41
  Proceeds from sale of assets
  19,550
  19,217Investments in unconsolidated entities
  (13,591)
  (71,344)Distributions from unconsolidated
  entities
  41,107
  71,607Investments in and advances (to)/from
  Management Company and affiliate
  (32,183)
  10,002Loan to the SRC Operating Partnership
  4,121
  (4,641)Net cash used in investing activities
  (55,973)
  (78,878)CASH FLOWS FROM
  FINANCING ACTIVITIES:Proceeds from sales of common and
  preferred stock, net
  515
  Minority interest distributions, net
  (4,072)
  (4,345)Preferred dividends of Subsidiary
  (7,334)
  (7,334)Preferred distributions of the SPG
  Operating Partnership
  (2,912)
  (2,817)Preferred dividends and distributions to
  shareholders
  (95,276)
  (97,705)Distributions to limited partners
  (32,792)
  (33,022)Mortgage and other note proceeds, net of
  transaction costs
  577,540
  693,175Mortgage and other note principal
  payments
  (562,244)
  (615,430)Net cash used in financing activities
  (126,575)
  (67,478)DECREASE IN CASH AND
  CASH EQUIVALENTS
  (86,092)
  (37,003)CASH AND CASH
  EQUIVALENTS, beginning of period
  214,404
  154,924CASH AND CASH
  EQUIVALENTS, end of period
  $128,312
  $117,921The accompanying notes are an
integral part of these statements.

SPG Realty Consultants, Inc.Condensed Consolidated Balance Sheets

(Dollars
in thousands, except per share amounts)

March
  31,
  December
  31,2001
  2000ASSETS:Cash and cash equivalents
  $6,705
  $8,707Accounts receivable (including $2,891 and
  $2,984 from related parties)
  3,280
  8,394Total current assets
  9,985
  17,101Investment properties, at cost, less
  accumulated depreciation of $1,360 and $1,341, respectively
  5,801
  6,286Investment in unconsolidated entities, at
  equity
  6,987
  6,998Investment in technology initiatives
  
  23,583Other noncurrent assets
  494
  2,896$23,267
  $56,864LIABILITIES:Accounts payable and accrued expenses
  (including $816 and $4,855 from related parties)
  $2,578
  $12,346Total current liabilities
  2,578
  12,346Note payable to the SPG Operating
  Partnership (Interest at 8%, due 2009)
  1,432
  29,425Minority interest
  
  643Total liabilities
  4,010
  42,414COMMITMENTS AND CONTINGENCIES
  (Note 9)LIMITED PARTNERS'
  INTEREST IN THE SRC OPERATING PARTNERSHIP
  5,305
  3,991SHAREHOLDERS' EQUITY:Common stock, $.0001 par value,  7,500,000 shares authorized, 1,745,344 and
        1,740,443 issued and
  outstanding, respectively
  
  Capital in excess of par value
  27,807
  29,647Accumulated deficit
  (13,666)
  (18,999)Less common stock held in treasury at
  cost, 20,986 shares.
  (189)
  (189)Total shareholders' equity
  13,952
  10,459$23,267
  $56,864The accompanying notes are an
integral part of these statements.



SPG Realty Consultants, Inc.Condensed Consolidated
Statements of Operations

(In
thousands, except per share amounts)

For the Three Months Ended March 31,2001
  2000REVENUE:Rental income
  $76
  $106Marketing and fee income
  
  1,788Insurance premiums
  517
  Other income
  118
  26Total
  revenue
  711
  1,920EXPENSES:Depreciation and amortization
  23
  23Technology initiatives startup costs
  90
  861Insurance losses
  486
  General and administrative expenses
  (including $0 and $463 to SPG/CPI)
  13
  2,322Total operating expenses
  612
  3,206OPERATING
  INCOME (LOSS)
  99
  (1,286)INTEREST
  EXPENSE (including $553 and $270 to SPG/CPI)
  553
  270MINORITY
  INTEREST
  122
  GAIN
  ON LAND SALES, NET
  1,251
  INCOME
  (LOSS) BEFORE UNCONSOLIDATED ENTITIES
  919
  (1,556)(LOSS)
  INCOME FROM UNCONSOLIDATED ENTITIES
  (11)
  659INCOME
  (LOSS) BEFORE ALLOCATION TO LIMITED PARTNERS
  908
  (897)LESSLIMITED
  PARTNERS' INTEREST IN THE SRC OPERATING PARTNERSHIP
  251
  (248)PREFERRED
  DIVIDENDS OF SUBSIDIARY
  
  NET
  INCOME (LOSS)
  $657
  $(649)BASIC
  AND DILUTED EARNINGS PER COMMON SHARE:Net (loss) income
  $0.38
  $(0.37)BASIC
  WEIGHTED AVERAGE SHARES OUTSTANDING
  1,720
  1,732DILUTED
  WEIGHTED AVERAGE SHARES OUTSTANDING
  1,722
  1,732The accompanying notes are an
integral part of these statements





SPG Realty Consultants, Inc.Condensed Consolidated
Statements of Cash Flows

(Dollars
in thousands)

For the Three Months Ended March 31,2001
  2000CASH FLOWS FROM
  OPERATING ACTIVITIES:Net income (loss)
  $657
  $(649)Adjustments to reconcile net income
  (loss) to net cash provided by operating activitiesDepreciation and amortization
  23
  23Gain on sales of assets, net
  (1,251)
  Limited partners' interest in SRC
  Operating Partnership
  251
  (248)Minority interest
  (122)
  Equity in income of unconsolidated
  entities
  11
  (659)Changes in assets and liabilitiesAccounts receivable
  689
  (2,325)Other non-current assets
  (93)
  Accounts payable and accrued expenses
  519
  5,720Net cash provided by operating
  activities
  684
  1,862CASH FLOWS FROM INVESTING
  ACTIVITIES:Investment in technology initiatives and
  other capital expenditures
  (115)
  (6,140)Cash included in transfer of assets to
  SPG Operating Partnership
  (152)
  Net proceeds from sales of assets
  1,658
  Distributions from unconsolidated
  entities
  
  1,230Net cash provided by (used in)
  investing activities
  1,391
  (4,910)CASH FLOWS FROM
  FINANCING ACTIVITIES:Proceeds from sales of common stock, net
  44
  Loan from the SPG Operating Partnership
  (4,121)
  4,641Mortgage and other note proceeds, net of
  transaction costs
  
  (110)Net cash (used in) provided by
  financing activities
  (4,077)
  4,531CHANGE IN CASH AND
  CASH EQUIVALENTS
  (2,002)
  1,483CASH AND CASH
  EQUIVALENTS, beginning of period
  8,707
  2,708CASH AND CASH
  EQUIVALENTS, end of period
  $6,705
  $4,191The accompanying notes are an integral part of these
statements.



SIMON PROPERTY GROUP, INC. AND
SPG REALTY CONSULTANTS, INC.

Notes to Unaudited Condensed
Financial Statements

(Dollars
in thousands, except per share amounts and where indicated as in billions)

Note 1  Organization

Simon
Property Group, Inc. ("SPG"), a Delaware corporation, is a
self-administered and self-managed real estate investment trust
("REIT") under the Internal Revenue Code of 1986, as amended (the
Code). Each share of common stock of SPG is paired (Paired Shares) with a
beneficial interest in 1/100th of a share of common stock of SPG
Realty Consultants, Inc., also a Delaware corporation (SRC and together with
SPG, the Companies).

Simon
Property Group, L.P. (the SPG Operating Partnership) is the primary
subsidiary of SPG. Units of ownership interest (Units) in the SPG Operating
Partnership are paired with a Unit in SPG Realty Consultants, L.P. (Paired
Units) (the SRC Operating Partnership and together with the SPG Operating
Partnership, the Operating Partnerships). The SRC Operating Partnership is
the primary subsidiary of SRC. The Companies together with the Operating
Partnerships are hereafter referred to as Simon Group.

SPG,
primarily through the SPG Operating Partnership, is engaged in the ownership,
operation, management, leasing, acquisition, expansion and development of real
estate properties, primarily regional malls and community shopping centers. As
of March  31, 2001, SPG and the SPG
Operating Partnership owned or held an interest in 250 income-producing
properties in the United States, which consisted of 164 regional malls, 72
community shopping centers, five specialty retail centers, four office and
mixed-use properties and five value-oriented super-regional malls in 36 states
(the Properties) and five additional retail real estate properties operating
in Europe. SPG and the SPG Operating Partnership also owned an interest in two
properties currently under construction and 11 parcels of land held for future
development, which together with the Properties are hereafter referred to as
the Portfolio Properties. At March 31, 2001 and December 31, 2000, the
Companies direct and indirect ownership interests in the Operating
Partnerships were 72.5% and 72.4% respectively. The SPG Operating Partnership
also holds substantially all of the economic interest in M.S. Management
Associates, Inc. (the Management Company).  
Effective January 1, 2001, the Management Company elected to become a
taxable REIT subsidiary (TRS).

SRC, primarily through the SRC
Operating Partnership, engages primarily in activities that capitalize on the
resources, customer base and operating activities of SPG, which could not be
engaged in by SPG without potentially impacting its status as a REIT. These
activities include a program launched in 1999 designed to take advantage of new
retail opportunities of the digital age. Through a subsidiary clixnmortar.com,
SRC formed an alliance with a third party
to build an infrastructure for retailers where shoppers can identify
merchandise on line that is actually in inventory at a store and initiate a
transaction either at the store or online. 
Minority interest on the SRC balance sheet as of December 31,
2000 represents an 8.3% outside ownership interest in clixnmortar.com. SRC also
has noncontrolling interests in two joint ventures which each own land held for
sale, which are located adjacent to Properties. Effective March 31, 2001, the
SPG Operating Partnership purchased clixnmortar.com from the SRC Operating
Partnership at its carrying value utilizing the intercompany note.  The SPG Operating Partnership subsequently
contributed clixnmortar.com to the Management Company in exchange for preferred
stock of the Management Company.  During
the second quarter of 2000, SRCs wholly-owned insurance subsidiary, Marigold
Indemnity, Ltd (Marigold), began providing general liability insurance
coverage to a third party that provides outsourcing services at certain
properties.  Marigold reinsures the
majority of the risk through a third party indemnity company.

Simon Group has recently formed
Simon Brand Ventures, LLC (SBV), a business to consumer initiative, and Simon
Business Network (SBN), a business to business initiative, to continue to
expand upon certain mall marketing initiatives to take advantage of Simon
Groups size and tenant relationships, primarily through strategic corporate
alliances. SBV is focused on leveraging Simon Groups 100 million unique
shoppers and their 2 billion annual shopping visits to contribute to Simon
Groups second-curve revenue strategy. 
The SBV concept and initiatives were started in 1997 to create a new
medium for connecting consumers with retailers and sponsors by developing a
combination of shopping, entertainment and community.  SBN is focused on leveraging Simon Groups assets to create new
businesses which will drive greater value to its Portfolio Properties,
retailers and other developers and generate new sources of revenue for Simon
Group.  SBNs strategy is to provide a
competitively valued, broad-based offering of products and services via a
unique and dominant business-to-business marketplace and service network
focused on the real estate industry and their tenants.  SBV has also entered into cost sharing
arrangements with the Management Company similar to those of the SPG Operating
Partnership.  Effective January 1, 2001
the SPG Operating Partnership purchased SBV from SRC at approximately its
carrying value utilizing the intercompany note.

Note 2 - Basis of Presentation

The accompanying condensed
financial statements are unaudited; however, they have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in conjunction with the rules and regulations of the Securities
and Exchange Commission. Accordingly, they do not include all of the
disclosures required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments necessary
for fair presentation, consisting of only normal recurring adjustments, have
been included. The results for the interim period ended March 31, 2001 are not
necessarily indicative of the results to be obtained for the full fiscal year.
These unaudited financial statements have been prepared in accordance with the
accounting policies described in the Companies combined annual report on Form
10-K for the year ended December 31, 2000, except for the change in accounting
policy discussed in Note 5, and should be read in conjunction therewith.

The accompanying condensed combined
financial statements include SPG and SRC and their subsidiaries. The
accompanying condensed consolidated financial statements for SPG and SRC
include SPG and its subsidiaries and SRC and its subsidiaries, respectively.
All significant intercompany amounts have been eliminated.

Net
operating results of the Operating Partnerships are allocated to the Companies
based first on the Companies' preferred unit preference, if applicable, and
then on their remaining ownership interests in the Operating Partnerships
during the period. The Companies remaining weighted average ownership
interests in the Operating Partnerships for both the three-month periods ended
March 31, 2001 and March 31, 2000 was 72.4%.

Certain
reclassifications of prior period amounts have been made in the financial
statements to conform to the 2001 presentation. These reclassifications have no
impact on the net operating results previously reported.

Note 3 -  Per Share
Data

Basic
earnings per share is based on the weighted average number of shares of common
stock outstanding during the period and diluted earnings per share is based on
the weighted average number of shares of common stock outstanding combined with
the incremental weighted average shares that would have been outstanding if all
dilutive potential common shares would have been converted into shares at the
earliest date possible. The following table sets forth the computation for the
Companies basic and diluted earnings per share.  The extraordinary items and cumulative effect of accounting
change amounts presented in the reconciliation below represent the common
shareholders pro rata share of these items.

For
  the Quarter Ended March 31,2001
  2000Common Shareholders
  share of income before extraordinary items and 
  cumulative effect of accounting change
  $32,143
  $37,495Common Shareholders
  share of extraordinary items
  (18)
  (318)Common Shareholders
  share of cumulative effect of accounting change
  (1,186)
  (8,934)Net Income available
  to Common Shareholders
  $30,939
  $28,243Weighted Average
  Shares Outstanding  Basic
  172,000,973
  173,222,954Effect of stock
  options
  176,954
  45,264Weighted Average
  Shares Outstanding  - Diluted
  172,177,927
  173,268,218

For
  the Quarter Ended March 31,2001
  2000Basic
  and Diluted Per Share:Common Shareholders
  share of income before extraordinary items and 
  cumulative effect of accounting change
  $0.19
  $0.21Common Shareholders
  share of extraordinary items
  --
  --Common Shareholders
  share of cumulative effect of accounting change
  (0.01)
  (0.05)Net Income available
  to Common Shareholders
  $0.18
  $0.16

Neither
series of convertible preferred stock issued and outstanding during the
comparative periods had a dilutive effect on earnings per share, nor did any of
the convertible preferred Units of the SPG Operating Partnership outstanding,
which are convertible into Paired Shares on or after August 27, 2004 if certain
conditions are met. Paired Units held by limited partners in the Operating
Partnerships may be exchanged for Paired Shares, on a one-for-one basis in
certain circumstances. If exchanged, the paired Units would not have a dilutive
effect.

Note 4 - Cash Flow Information

Cash
paid for interest, net of amounts capitalized, during the three months ended
March 31, 2001 was $149,349 as compared to $154,729 for the same period in
2000. See Notes 1 and 8 for information about non-cash transactions during the
three months ended March 31, 2001.

Note 5 - Cumulative Effect of Accounting Change

On
January 1, 2001 Simon Group adopted SFAS 133 
Accounting for Derivative Instruments and Hedging Activities, as amended
in June of 2000 by SFAS 138, Accounting for Derivative Instruments and Hedging
Activities.  SFAS 133, as amended,
establishes accounting and reporting standards for derivative instruments and
requires Simon Group to record on the balance sheet all derivative instruments
at fair value and to recognize certain non-cash changes in these fair values
either in the income statement or other comprehensive income, as appropriate
under SFAS 133.  SFAS 133 currently impacts
the accounting for Simon Groups interest rate and foreign currency rate risk
protection agreements.

On
adoption of SFAS 133, Simon group recorded the difference between the fair
value of the derivative instruments and the previous carrying amount of those
derivatives on its condensed consolidated combined balance sheets in net income
or other comprehensive income, as appropriate, as the cumulative effect of a
change in accounting principle in accordance with APB 20 Accounting
Changes.   On adoption, Simon Groups
net fair value of derivatives was ($2.0) million, of which $3.1 million was
recorded in other liabilities and $1.1 million was recorded in other assets. In
addition, $2.0 million of unrecognized loss was recorded in other comprehensive
income as a cumulative effect of accounting change and an expense of $1.6
million was recorded as a cumulative effect of accounting change in the
statement of operations, which includes Simon Groups $1.4 million share of
joint venture cumulative effect of accounting change.  The joint venture cumulative effect of accounting change was
recorded in investment in unconsolidated entities.

Within
the next twelve months, Simon Group expects to reclassify to earnings
approximately $2.8 million of expense of the current balance held in
accumulated other comprehensive income. 
Amounts included in these reclassifications attributable to joint
ventures and minority interests were not material.  The amount of hedge ineffectiveness recorded during the three
months ended March 31, 2001 was not material.

The
following table summarizes the notional and fair values of Simon Groups
derivative instruments as of March 31, 2001, in millions:

Notional
  InterestHedge
  Type
  Index
  Amount
  Rate
  Range
  Maturity
  Range
  Fair
  ValueConsolidated:Interest Rate Swaps
  1
  month LIBOR
  $100.0
  5.80%-7.24%
  9/01-12/04
  ($1.9)Interest Rate Caps
  1
  or 3 month LIBOR
  191.0
  6.40%-16.77%
  9/01-1/05
  0.0Interest Rate Cap -
  Collar
  3
  month LIBOR
  85.0
  5.89%
  5/04
  0.6Interest Rate Floor -
  Collar
  3
  month LIBOR
  85.0
  5.89%
  5/04
  (2.9)($4.2)Cross-Currency
  Interest Rate Swap
  1
  month EURIBOR and Euros
  30.0
  EUR
  7.75%
  / 0.94 EUR
  7/03
  ($3.4)($7.6)Joint Ventures:Interest Rate Caps
  1
  or 3 month LIBOR
  $930.9
  7.70%-11.83%
  1/02
   5/06
  0.2As
of March 31, 2001, Simon Group has recorded derivatives at their fair values of
$0.6 million included in other assets and $8.2 million included in other
liabilities.  Simon Groups exposure to
market risk due to changes in interest rates primarily relates to Simon Groups
long-term debt obligations. Through its risk management strategy, Simon Group
manages exposure to interest rate market risk by a combination of interest rate
protection agreements to effectively fix or cap a portion of variable rate debt
and by refinancing fixed rate debt at times when rates and terms are
appropriate. Simon Group is also exposed to foreign currency risk on financings
of certain foreign operations.  To
manage foreign currency exchange rate risk as part of its risk management
strategy, Simon Group has also entered into a foreign currency forward
contract. Simon Groups intent is to offset gains and losses that occur on the
underlying exposures, with gains and losses on the derivative contracts hedging
these exposures.  Simon Group does not
enter into either interest rate protection or foreign currency rate protection
agreements for speculative purposes.



Accounting
Policies for Derivatives

In
the normal course of business, Simon Group uses a variety of derivative
financial instruments to manage, or hedge, interest rate and foreign currency
risk and records all derivatives on the balance sheets at fair value.  Simon Group may enter into derivative
contracts relating to either wholly owned or joint venture properties.  Simon Group requires that hedging derivative
instruments are effective in reducing the risk exposure that they are
designated to hedge. For derivative instruments associated with the hedge of an
anticipated transaction, hedge effectiveness criteria also require that it be probable
that the underlying transaction occurs. 
Simon Group may hedge its exposure to the variability in future cash
flows for anticipated transactions over a maximum period of 12 months.  Any instrument that meets these hedging
criteria is formally designated as a hedge at the inception of the derivative
contract.  When the terms of an
underlying transaction are modified resulting in some ineffectiveness, the
portion of the change in the derivative fair value related to ineffectiveness
from period to period will be included in net income. If any derivative
instrument used for risk management does not meet the hedging criteria then it
is marked-to-market each period, however, Simon Group intends for all
derivative transactions to meet all the hedge criteria and qualify as hedges.

On
an ongoing quarterly basis, Simon Group adjusts its balance sheet to reflect
current fair market value of its derivatives. 
Changes in the fair value of derivatives are to be recorded each period
in earnings or comprehensive income, depending on whether the derivative is
designated and effective as part of a hedged transaction, and on the type of
hedge transaction.  To the extent that
the change in value of a derivative does not perfectly offset the change in
value of the instrument being hedged, the ineffective portion of the hedge is
immediately recognized in earnings. Over time, the unrealized gains and losses
held in accumulated other comprehensive income will be reclassified to
earnings.  This reclassification occurs
when the hedged items are also recognized in earnings.  Interest rate differentials that arise under
interest rate swap contracts are settled periodically based upon the terms of
the contract and are recognized in interest expense over the life of the
contracts.  Simon Group has a policy of
only entering into contracts with major financial institutions based upon their
credit ratings and other factors.

To determine the fair values of
derivative instruments, Simon Group uses a variety of methods and assumptions
that are based on market conditions and risks existing at each balance sheet
date.   For most derivatives, standard
market conventions and techniques such as discounted cash flow analysis, option
pricing models, and termination cost are used to determine fair value. All
methods of assessing fair value result in a general approximation of value, and
such value may never actually be realized.

Note 6 - Investment in Unconsolidated Entities

Summary
financial information of Simon Groups investment in partnerships and joint
ventures accounted for using the equity method of accounting and a summary of
Simon Groups investment in and share of income from such partnerships and
joint ventures follow:

March 31,
  December 31,BALANCE SHEETS
  2001
  2000Assets:Investment properties
  at cost, net
  $6,550,674
  $6,573,412Cash and cash
  equivalents
  197,862
  192,138Tenant receivables
  160,784
  165,918Other assets
  281,849
  276,975Total assets
  $7,191,169
  $7,208,443Liabilities and Partners'
  Equity:Mortgages and other
  notes payable
  $5,171,151
  $5,135,488Accounts payable,
  accrued expenses and other liabilities
  322,912
  347,733Total liabilities
  5,494,063
  5,483,221Partners' equity
  1,697,106
  1,725,222Total liabilities and partners'
  equity
  $7,191,169
  $7,208,443Simon Groups Share of:Total assets
  $2,927,605
  $2,929,647Partners equity
  $662,936
  $679,591Add: Excess Investment
  555,749
  558,675Simon Groups net
  Investment in Joint Ventures
  $1,218,685
  $1,238,266

For the three Months Ended March 31,STATEMENTS OF OPERATIONS
  2001
  2000Revenue:Minimum rent
  $198,518
  $180,799Overage rent
  5,807
  5,845Tenant reimbursements
  96,868
  91,534Other income
  11,621
  10,085Total revenue
  312,814
  288,263Operating Expenses:Operating expenses and other
  117,120
  109,111Depreciation and amortization
  60,499
  55,650Total operating expenses
  177,619
  164,761Operating Income
  135,195
  123,502Interest Expense
  94,760
  84,452Income Before Cumulative
  Effect of Accounting Change (IBC)
  40,435
  39,050Cumulative Effect of
  Accounting Change
  (2,883)
  (3,955)Net Income
  $37,552
  $35,095Third-Party Investors' Share
  of IBC
  26,425
  23,516Simon Groups Share of IBC
  $14,010
  $15,534Amortization of Excess
  Investment
  4,946
  5,273Income from Unconsolidated
  Entities
  $9,064
  $10,261Simon
Groups share of consolidated net income of the Management Company, after
intercompany profit eliminations, was $2,667 and $7,728  for the three-month periods ended March 31,
2001 and 2000, respectively.  Simon
Groups net investment in the Management Company was $62,666  and $32,936 as of March 31, 2001 and December
31, 2000, respectively.

Note 7 - Debt

At
March 31, 2001, of Simon Groups combined consolidated debt $6,574,674 was
fixed-rate debt and $2,172,544 was variable-rate debt. Simon Groups pro rata
share of indebtedness of the unconsolidated joint venture Properties as of
March 31, 2001 was $2,179,390.

On
January 11, 2001, Simon Group issued $500,000 of unsecured debt to
institutional investors pursuant to Rule 144A in two tranches.  The first tranche is $300,000 bearing an
interest rate of 7 3/8% due January 20, 2006 and the second tranche is $200,000
bearing an interest rate of 7 3/4% due January 20, 2011.  The net proceeds of the offering were used
to repay the remaining portion of the indebtedness under the CPI Merger
Facility due March 24, 2001 and to repay a portion of the CPI Merger Facility
due September 24, 2001.

Note 8  Shareholders Equity

On
March 26, 2001, 474,625 Paired Shares of restricted stock were deemed earned
and awarded under The Simon Property Group 1998 Stock Incentive Plan (the 1998
Plan) at a value of $25.85 per Paired Share. 
The cost of restricted stock grants is based upon the stocks fair
market value at the time such stock is earned, awarded and issued and is
charged to shareholders equity and subsequently amortized against earnings of
Simon Group over the vesting period.  In
addition, 1,032,583 stock options to purchase Paired Shares were granted under
the 1998 Plan on the same day.

Note 9 - Commitments and Contingencies

LitigationTriple Five of Minnesota,
Inc., a Minnesota corporation, v. Melvin Simon, et. al.On
or about November 9, 1999, Triple Five of Minnesota, Inc. (Triple Five)
commenced an action in the District Court for the State of Minnesota, Fourth
Judicial District, against, among others, Mall of America, certain members of
the Simon family and entities allegedly controlled by such individuals, and
Simon Group. Two transactions form the basis of the complaint: (i) the sale by
Teachers Insurance and Annuity Association of America of one-half of its
partnership interest in Mall of America Company and Minntertainment Company to
the SPG Operating Partnership and related entities (the Teachers Sale); and
(ii) a financing transaction involving a loan in the amount of $312,000
obtained from The Chase Manhattan Bank (Chase) that is secured by a mortgage
placed on Mall of Americas assets (the Chase Mortgage).

The
complaint, which contains twelve counts, seeks remedies of damages, rescission,
constructive trust, accounting, and specific performance. Although the
complaint names all defendants in several counts, Simon Group is specifically
identified as a defendant in connection with the Teachers Sale.

The
SPG Operating Partnership has agreed to indemnify Chase and other nonparties to
the litigation that are related to the offering of certificates secured by the
Chase Mortgage against, among other things, (i) any and all litigation expenses
arising as a result of litigation or threatened litigation brought by Triple
Five, or any of its owners or affiliates, against any person regarding the
Chase Mortgage, the Teachers Sale, any securitization of the Chase Mortgage or
any transaction related to the foregoing and (ii) any and all damages, awards,
penalties or expenses payable to or on behalf of Triple Five (or payable to a
third party as a result of such partys obligation to pay Triple Five) arising
out of such litigation. These indemnity obligations do not extend to
liabilities covered by title insurance.

Simon
Group believes that the Triple Five litigation is without merit and intends to
defend the action vigorously. Simon Group believes that neither the Triple Five
litigation nor any potential payments under the indemnity, if any, will have a
material adverse effect on Simon Group. Given the early stage of the litigation
it is not possible to provide an assurance of the ultimate outcome of the
litigation or an estimate of the amount or range of potential loss, if any.

Carlo Angostinelli et al. v. DeBartolo Realty Corp. et
al.On
October 16, 1996, a complaint was filed in the Court of Common Pleas of
Mahoning County, Ohio, captioned Carlo Angostinelli et al. v. DeBartolo
Realty Corp. et al. The named defendants are SD Property Group, Inc., an
indirect 99%-owned subsidiary of SPG, and DeBartolo Properties Management,
Inc., a subsidiary of the Management Company, and the plaintiffs are 27 former
employees of the defendants. In the complaint, the plaintiffs alleged that they
were recipients of deferred stock grants under the DeBartolo Realty Corporation
(DRC) Stock Incentive Plan (the DRC Plan) and that these grants immediately
vested under the DRC Plans change in control provision as a result of the
DRC Merger. Plaintiffs asserted that the defendants refusal to issue them
approximately 542,000 shares of DRC common stock, which is equivalent to
approximately 370,000 Paired Shares computed at the 0.68 exchange ratio used in
the DRC Merger, constituted a breach of contract and a breach of the implied
covenant of good faith and fair dealing under Ohio law. Plaintiffs sought
damages equal to such number of shares of DRC common stock, or cash in lieu
thereof, equal to all deferred stock ever granted to them under the DRC Plan,
dividends on such stock from the time of the grants, compensatory damages for
breach of the implied covenant of good faith and fair dealing, and punitive
damages. The plaintiffs and the defendants each filed motions for summary
judgment. On October 31, 1997, the Court of Common Pleas entered a judgment in
favor of the defendants granting their motion for summary judgment. The
plaintiffs appealed this judgment to the Seventh District Court of Appeals in
Ohio. On August 18, 1999, the District Court of Appeals reversed the summary
judgment order in favor of the defendants entered by the Common Pleas Court and
granted plaintiffs cross motion for summary judgment, remanding the matter to
the Common Pleas Court for the determination of plaintiffs damages. The
defendants petitioned the Ohio Supreme Court asking that they exercise their
discretion to review and reverse the Appellate Court decision, but the Ohio
Supreme Court did not grant the petition for review. The case was remanded to
the Court of Common Pleas of Mahoning County, Ohio, to conduct discovery
relevant to each plaintiffs damages and the counterclaims asserted by Simon
Group. The Trial Court referred these matters to a Magistrate. Plaintiffs filed
a Supplemental Motion for Summary Judgment on the question of damages.  The Magistrate ruled on the counterclaims
and found in Defendants favor on one of them. On December 27, 2000, the Trial
Court rendered judgment for the plaintiffs in the combined total amount of
approximately $12,000, which includes a set-off of approximately $2,000 with
impact to two of the plaintiffs. Defendants have appealed this judgment and
plaintiffs have cross-appealed.  The
judgment has accrued interest at 10% per annum from and after December 27,
2000.  Those appeals are pending before
the District Court of Appeals and there can be no execution upon the judgment
while the appeals are pending.  Simon
Group recorded a $12,000 loss in the third quarter of 1999 related to this
litigation as an unusual item.



Roel Vento et al v. Tom Taylor et al.An affiliate of Simon
Group is a defendant in litigation entitled Roel Vento et al v. Tom Taylor et
al., in the District Court of Cameron County, Texas, in which a judgment in the
amount of $7,800 was entered against all defendants. This judgment includes
approximately $6,500 of punitive damages and is based upon a jurys findings on
four separate theories of liability including fraud, intentional infliction of
emotional distress, tortious interference with contract and civil conspiracy
arising out of the sale of a business operating under a temporary license
agreement at Valle Vista Mall in Harlingen, Texas. Simon Group appealed the
verdict and on May 6, 1999, the Thirteenth Judicial District (Corpus Christi)
of the Texas Court of Appeals issued an opinion reducing the trial court
verdict to $3,364 plus interest. Simon Group filed a petition for a writ of
certiorari to the Texas Supreme Court requesting that they review and reverse
the determination of the Appellate Court. The Texas Supreme Court granted
certiorari and heard oral arguments on October 4, 2000.  On April 26, 2001, the Texas Supreme Court
rendered a unanimous 9-0 opinion against the Ventos and ordered that they take
nothing from the Simon defendants. Plaintiffs have the opportunity to file a
motion for reconsideration on or before May 11, 2001.  Plaintiffs have since filed a Request for Extension of Time,
which if granted by the court, would postpone the deadline until June 11,
2001.  The court has not yet ruled on
Plaintiff's request for an extension.

Simon
Group currently is not subject to any other material litigation other than
routine litigation, claims and administrative proceedings arising in the
ordinary course of business. On the basis of consultation with counsel,
management believes that such routine litigation, claims and administrative
proceedings will not have a material adverse impact on Simon Group's financial
position or its results of operations.

Note 10 -
Real Estate Disposals and Other

During
the first quarter of 2001, Simon Group sold its ownership interests in one
regional mall, one community center, and one office building for a combined
gross sales price of $20.3 million. 
These sales resulted in a net combined gain of $2.7 million.

On
December 28, 2000, Montgomery Ward LLC and certain of its related entities
(Ward) filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code.   In late February
2001, a limited liability company, Kimsward LLC (Kimsward), was formedto
designate persons or entities to whom the Ward real estate assets will be
sold.  These transactions are subject to
Bankruptcy Court approval.  The
Management Companys interest in Kimsward is 18.5% and its cash investment in
Kimsward was $9.2 million as of March 31, 2001.  No equity in earnings from Kimsward LLC were recognized during
the first quarter of 2001.  Subsequent
to March 31, 2001, an additional $2.8 million was invested in Kimsward.

Note 11 Merger  Subsequent Event

In
order to simplify the organizational structure of Simon Group, the Boards of
Directors of SPG and SPG Properties, Inc. ("Properties, Inc."), on
May 8, 2001 approved an agreement for the merger of Properties, Inc. into SPG.
SPG owns 99.999% of the common stock of Properties, Inc. Under the proposed
merger, shares of Properties, Inc.'s common stock (other than those held by SPG
or holders who exercise dissenters rights) will be converted into the right to
receive approximately $98 in total and outstanding shares of Properties, Inc.'s
preferred stock will be converted into shares of SPG preferred stock having
substantially identical terms. SPG has filed a registration statement which
contains an information statement relating to the transaction which has not yet
become effective. The merger is expected to close in the second or third
quarter.

If
completed, this merger will be accounted for under the purchase method of
accounting. The pro forma effect of the merger on the SPG's balance sheet will
be the reclassification of the entire carrying amount of SPGs preferred stock
of subsidiary to be included in the caption all series of preferred stock
within shareholders squity.  In addition,
the pro forma effect on the statement of operations will be the
reclassificaiton of preferred dividends of subsidiary to preferred
dividends.  All other pro forma impacts
associated with this transaction are immaterial.

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

SIMON PROPERTY
GROUP, INC. AND SPG REALTY CONSULTANTS, INC. COMBINED

You
should read the following discussion in conjunction with the financial
statements and notes thereto that are included in this Form 10-Q. Certain
statements made in this report may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause our actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.  These factors include, among others, the
following: general economic and business conditions, which will, among other
things, affect demand for retail space or retail goods, availability and
creditworthiness of prospective tenants, lease rents and the terms and
availability of financing; adverse changes in the real estate markets
including, among other things, competition with other companies and technology;
risks of real estate development and acquisition; governmental actions and
initiatives; substantial indebtedness; conflicts of interests; maintenance of
REIT status; and environmental/safety requirements.  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.

Overview

Who
we are - Simon Property Group, Inc. ("SPG"), a Delaware corporation,
is a self-administered and self-managed real estate investment trust
("REIT"). Each share of common stock of SPG is paired (Paired
Shares) with 1/100th of a share of common stock of SPG Realty
Consultants, Inc. (SRC and together with SPG, the Companies). Simon
Property Group, L.P. (the SPG Operating Partnership) is the primary
subsidiary of SPG. Units of ownership interest (Units) in the SPG Operating
Partnership are paired (Paired Units) with a Unit in SPG Realty Consultants,
L.P. (the SRC Operating Partnership and together with the SPG Operating
Partnership, the Operating Partnerships). The SRC Operating Partnership is
the primary subsidiary of SRC. In this Quarterly Report on Form 10-Q, the terms
we, us and our refer to the Companies and the Operating Partnerships.

The
following Property acquisitions and openings (the Property Transactions)
impacted our consolidated results of operations in the comparative periods. In
May 2000, we opened Orlando Premium Outlots and in November 2000, we opened
Arundel Mills.

Results of OperationsThree Months Ended
March 31, 2001 vs. Three Months Ended March 31, 2000

Operating
income increased $2.2 million or 1.1% in 2001 as compared to 2000.  This increase primarily resulted from a
$10.7 million increase in minimum rents excluding our business to business and
business to consumer initiatives and a $9.1 million increase in consolidated
revenues realized from our business to business and business to consumer
initiatives, partially offset by a $8.9 million increase in depreciation and
amortization, a $3.7 million decrease in operating income due to the impact of
property disposals, a $2.4 million decrease in miscellaneous income, and a $2.1
million decrease in overage rents.  The
increase in minimum rent primarily results from increased occupancy levels and
the replacement of expiring tenant leases with renewal leases at higher minimum
base rents.  The increase in business
initiative revenues include $5.6 million from a contract termination
payment.   The increase in depreciation
and amortization is primarily due to an increase in depreciable real estate
realized through renovation and expansion activities.

Income
from unconsolidated entities decreased $6.3 million in 2001, resulting from a
$5.1 million decrease in income from the Management Company and a $1.2 million
decrease in income from unconsolidated partnerships and joint ventures. The
decrease in Management Company income is primarily the result of a decrease in
fee revenues and income tax benefits. 
The decrease in joint venture income is primarily related to technology
start up activities of MerchantWired, LLC.

During the first quarter of 2001 we
recorded a $1.6 million expense as a cumulative effect of an accounting change,
which includes our $1.4 million share from unconsolidated entities, due to the
adoption of  SFAS 133  Accounting for Derivative Instruments and
Hedging Activities, as amended.  See
Note 5 of the Notes to Unaudited Condensed Financial Statements included in
Item 1 of this Form 10-Q for a discussion of the cumulative effect of
accounting change.  During the first
quarter of 2000 we recorded a $12.3 million expense as a cumulative effect of
an accounting change, which includes our $1.8 million share from unconsolidated
entities, due to the adoption of Staff Accounting Bulletin No. 101, which
addressed certain revenue recognition policies, including the accounting for
overage rent by a landlord.

The
$2.7 million net gain on the sales of assets in 2001 results from the sale of
our interests in one regional mall, one community center, and an office
building for a gross sales price of approximately $20.3 million. In 2000, we
recognized a net gain of $7.1 million on the sale of one regional mall.

Income
before allocation to limited partners was $62.1 million for the three months
ended March 31, 2001, which reflects a $3.7 million or 6.4% increase over 2000,
primarily for the reasons discussed above. 
Income before allocation to limited partners was allocated to the
Companies based on SPGs direct ownership of Ocean County Mall and certain net
lease assets, and the Companies preferred Unit preferences and weighted
average ownership interests in the Operating Partnerships during the period.

The
comparability between SRCs balance sheet as of March 31, 2001 and December 31,
2000 and results of operations for the three-months ended March 31, 2001 and
March 31, 2000 have been affected by the following:

            Effective March 31 2001 ownership of
clixnmortar.com transferred from SRC to the Management Company.  See Note 1 of the Notes to Unaudited
Condensed Financial Statements included in Item 1 of this Form 10-Q for a
discussion of the transfer.
Effective January 1, 2001 ownership of SBV transferred
from SRC to of the SPG Operating Partnership.Preferred distributions of the SPG
Operating Partnership represent distributions on preferred Units issued in
connection with the NED Acquisition. Preferred dividends of subsidiary
represent distributions on preferred stock of SPG Properties, Inc., a 99.999%
owned subsidiary of SPG.

Liquidity and Capital Resources

As
of March 31, 2001, our balance of unrestricted cash and cash equivalents was
$135.0 million, including $42.5 million related to our gift certificate
program, which we do not consider available for general working capital
purposes.  We have a $1.25 billion
unsecured revolving credit facility (the Credit Facility) which had available
credit of $598.5 million at March 31, 2001. The Credit Facility bears interest at
LIBOR plus 65 basis points and has an initial maturity of August 2002, with an
additional one-year extension available at our option. SPG and the SPG
Operating Partnership also have access to public equity and debt markets.  Our current corporate bond ratings are Baa1
by Moodys Investors Service and BBB+ by Standard & Poors.

We
anticipate that cash generated from operating performance will provide the
funds we need on a short- and long-term basis for operating expenses, interest
expense on outstanding indebtedness, recurring capital expenditures, and
distributions to shareholders in accordance with REIT requirements. Sources of
capital for nonrecurring capital expenditures, such as major building
renovations and expansions, as well as for scheduled principal payments,
including balloon payments, on outstanding indebtedness are expected to be
obtained from:

            excess cash generated from operating
performance            working
capital reserves            additional
debt financing and            additional
equity raised in the public marketsFinancing
and Debt

At
March 31, 2001, we had combined consolidated debt of $8.7 billion, of which
$6.6 billion was fixed-rate debt, bearing interest at a weighted average rate
of 7.3% and $2.1 billion was variable-rate debt bearing interest at a weighted
average rate of 6.2%. As of March 31, 2001, we had interest rate protection
agreements related to combined consolidated variable-rate debt with a total
carrying amount of $404.2 million. Our interest rate protection agreements did
not materially impact interest expense or weighted average borrowing rates for
the three months ended March 31, 2001 or 2000.

Our
share of total scheduled principal payments of mortgage and other indebtedness,
including unconsolidated joint venture indebtedness over the next five years is
$6.8 billion, with $4.0 billion thereafter. Our ratio of consolidated
debt-to-market capitalization was 55.5% and 57.0% at March 31, 2001 and
December 31, 2000, respectively.

See Note 7 of the Notes to
Unaudited Condensed Financial Statements included in Item 1 of this Form 10-Q
for a discussion of the unsecured debt issued on January 11, 2001.



Acquisitions
and Disposals

We
continue to review and evaluate a limited number of acquisition opportunities.
However, due to the rapid consolidation of the regional mall business and the
current status of the capital markets, we believe that acquisition activity in
the near term will be a less significant component of our growth strategy. We
believe funds on hand, and amounts available under the Credit Facility,
together with the ability to issue shares of common stock and/or Units, provide
the means to finance certain acquisitions. We cannot assure you that we will
not be required to, or will not elect to, even if not required to, obtain funds
from outside sources, including through the sale of debt or equity securities,
to finance significant acquisitions, if any.

Dispositions

During the first quarter of 2001, we sold our interests
in one regional mall, one community center, and one office building for a
combined gross sales price of $20.3 million, resulting in a net combined gain
of $2.7 million. The net proceeds of approximately $19.6 million, were used for
general working capital purposes.

In
addition to the Property sales described above, as a continuing part of our
long-term strategic plan, management continues to pursue the sale of its
remaining non-retail holdings and a number of retail assets that are no longer
aligned with our strategic criteria, including four community centers currently
under contract for sale. We expect the sale prices of its non-core assets, if
sold, will not differ materially from the carrying value of the related assets.

Development
Activity

New Developments.Development activities are
an ongoing part of our business. During 2000, we opened two new Properties
aggregating approximately 1.7 million square feet of GLA. In total, we invested
approximately $179.6 million on new developments in 2000. With fewer new
developments currently under construction, we expect 2001 development costs to
be approximately $76.2 million.

Strategic
Expansions and Renovations.One
of our key objectives is to increase the profitability and market share of the
Properties through the completion of strategic renovations and expansions.
During 2000, we invested approximately $201.6 million on redevelopment projects
and completed five major redevelopment projects, which added approximately 1.2
million square feet of GLA to the Portfolio. We have a number of renovation
and/or expansion projects currently under construction, or in preconstruction
development and expect to invest approximately $121.0 million on redevelopment
in 2001.

International
Expansion. The SPG Operating
Partnership and the Management Company have a 29% ownership interest in
European Retail Enterprises, B.V. (ERE) and Groupe BEG, S.A. (BEG),
respectively, which are accounted for using the equity method of accounting.
BEG and ERE are fully integrated European retail real estate developers,
lessors and managers. Our total cash investment in ERE and BEG at March 31,
2001 was approximately $46.3 million, with commitments for an additional $16.6
million, subject to certain performance and other criteria, including our
approval of development projects. The agreements with BEG and ERE are
structured to allow us to acquire an additional 25% ownership interest over
time. As of March 31, 2001, BEG and ERE had three Properties open in Poland and
two in France.

Technology Initiatives.We continue to evolve our technology initiatives through
our association with several third party participants.  Through our clixnmortar subsidiary, we have
formed an alliance with Found Inc. to build an infrastructure for retailers
where shoppers can identify merchandise on line that is actually in inventory
at a store and initiate a transaction either at the store or online.  Through MerchantWired LLC, we are creating,
along with all the other leading retail real estate developers, a full service
retail infrastructure company that provides retailers across the country access
to a high speed, highly reliable and secure broadband network.The
SPG Operating Partnership owns an approximately 53% noncontrolling interest in
MerchantWired LLC and accounts for it using the equity method of accounting. In
addition, in 2000 we joined with other leading real estate companies across a
broad range of property sectors to form Constellation Real Technologies, which
is designed to form, incubate and sponsor real estate-related Internet,
e-commerce and technology enterprises; acquire interests in existing best of
breed companies; and act as a consolidator of real estate technology across
property sectors.  In September 2000, Constellation announced its initial investment
of $25.0 million in FacilityPro.com, a business-to-business electronic
marketplace designed for the efficient procurement of facilities products and
services.  Our share of this investment
is $2.5 million.

These
activities may generate losses in the initial years of operation, while
programs are being developed and customer bases are being established.  We expect to continue to invest in these
programs over the next two years and together with the other members of
MerchantWired, LLC have guaranteed our pro rata share of equipment lease
payments up to $53.0 million.  We cannot
assure you that our technology programs will succeed.





Distributions.On May 8th, 2001, SPG declared a
common stock dividend of $0.525 per share which represents a 4% increase. The
current combined annual distribution rate is $2.10 per Paired Share.  SPG declared distributions on its common
stock in 2000 aggregating $2.02 per share. On February 6, 2001, SPG declared a
distribution of $0.5050 per Paired Share payable on February 28, 2001, to
shareholders of record on February 16, 2001. Future distributions will be
determined based on actual results of operations and cash available for
distribution.

Investing and Financing Activities

Cash
used in investing activities of $60.0 million for the three months ended March
31, 2001 includes capital expenditures of $74.8 million, investments in
unconsolidated joint ventures of $13.6 million, and advances to the Management
Company of $32.2 million.  Capital
expenditures include development costs of $13.0 million, renovation and expansion
costs of $45.1 million and tenant costs and other operational capital
expenditures of $16.8 million.  These
cash uses are partially offset by distributions from unconsolidated entities of
$41.1 million and net proceeds of $19.6 million from the sale of three
properties previously mentioned.

Cash
used in financing activities for the three months ended March 31, 2001 was
$126.5 million and includes net distributions of $141.8 million, partially
offset by net borrowings of $15.3 million.

EBITDAEarnings from Operating Results
before Interest, Taxes, Depreciation and Amortization

We believe that there are several
important factors that contribute to our ability to increase rent and improve
profitability of our shopping centers, including aggregate tenant sales volume,
sales per square foot, occupancy levels and tenant costs. Each of these factors
has a significant effect on EBITDA. We believe that EBITDA is an effective
measure of shopping center operating performance because:


  it is industry practice to evaluate
  real estate properties based on operating income before interest, taxes,
  depreciation and amortization, which is generally equivalent to EBITDA
  EBITDA is unaffected by the debt
  and equity structure of the property owner.

However, you should understand that
EBITDA:


  does not represent cash flow from
  operations as defined by accounting principles generally accepted in the
  United States
  should not be considered as an
  alternative to net income as a measure of operating performance
  is not indicative of cash flows
  from operating, investing and financing activities
  is not an alternative to cash flows
  as a measure of liquidity.

Total EBITDA for the Properties
increased from $484.8 million  for the
three months ended March 31, 2000 to $511.6 million for the same period in
2001, representing a 5.5% increase. This growth is primarily the result of
increased rental rates, increased tenant sales, improved occupancy levels,
effective control of operating costs and the addition of GLA to the Portfolio
through expansions. During this period, the operating profit margin increased
from 63.3% to 63.7%. There were no major acquisitions during 2001.

FFO-Funds from Operations

FFO
is an important and widely used measure of the operating performance of REITs,
which provides a relevant basis for comparison among REITs. FFO, as defined by
NAREIT, means consolidated net income without giving effect to real estate
related depreciation and amortization, gains or losses from extraordinary items
and gains or losses on sales of real estate, plus the allocable portion, based
on economic ownership interest, of funds from operations of unconsolidated
joint ventures, all determined on a consistent basis in accordance with
accounting principles generally accepted in the United States. However, FFO:


  does
  not represent cash flow from operations as defined by accounting principles
  generally accepted in the United States
  should
  not be considered as an alternative to net income as a measure of operating
  performance
  is
  not an alternative to cash flows as a measure of liquidity.

The
following summarizes our FFO and that of the Companies and reconciles our
combined income before extraordinary items and cumulative effect of accounting
change to our FFO for the periods presented:

For
  the Three MonthsEnded
  March 31,2001
  2000(In thousands)Our FFO
  $177,569
  $170,225Reconciliation:Income Before Extraordinary Items and
  Cumulative Effect of AccountingChange (1) (2)
  $63,775
  $71,136Plus:Depreciation and amortization from
  combined consolidated Properties
  106,166
  98,236Our share of depreciation and
  amortization from unconsolidated affiliates
  31,257
  28,801Less:Gain on sale of asset, net
  (2,711)
  (7,096)Minority interest portion of
  depreciation and amortization
  (1,487)
  (1,480)Preferred distributions (including
  preferred distributions of a subsidiary and to preferred unitholders)
  (19,431)
  (19,372)Our FFO
  $177,569
  $170,225FFO Allocable to the
  Companies
  $128,766
  $123,506Notes:

(1)     Includes gains on land sales of $1.2
million and $1.8 million for the three months ended March 31, 2001 and 2000,
respectively.(2)Includes
straight-line rent adjustments to minimum rent of $4.3 million and $5.0 million
for the three months ended March 31, 2001 and 2000, respectively.

Portfolio Data

Operating
statistics do not include those Properties located outside of the United
States.

Aggregate Tenant Sales Volume.
For the three months ended March 31, 2001 compared to the same period in 2000,
total reported retail sales at mall and freestanding GLA we own (Owned GLA)
in the regional malls increased $195 million or 9.2% from $2,134 million to
$2,330 million, primarily as a result of 
increased productivity of our existing tenant base and an overall
increase in occupancy. Retail sales at Owned GLA affect revenue and
profitability levels because they 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.) the tenants can afford to pay.

Occupancy Levels.
Occupancy levels for Owned GLA at mall and freestanding stores in the regional
malls increased from 89.5% at March 31, 2000, to 90.2% at March 31, 2001. Owned
GLA has decreased 0.5 million square feet from March 31, 2000, to March 31,
2001, primarily as a result of dispositions.

Average Base Rents.Average
base rents per square foot of mall and freestanding Owned GLA at regional malls
increased 3.9%, from $27.52 at March 31, 2000 to $28.60 at March 31, 2001.

Inflation

Inflation has remained relatively
low during the past four years and has had a minimal impact on the operating
performance of the Properties. Nonetheless, substantially all of the tenants
leases contain provisions designed to lessen the impact of inflation. These
provisions include clauses enabling us to receive percentage rentals based on
tenants gross sales, which generally increase as prices rise, and/or
escalation clauses, which generally increase rental rates during the terms of
the leases. In addition, many of the leases are for terms of less than ten
years, which may enable us to replace existing leases with new leases at higher
base and/or percentage rentals if rents of the existing leases are below the
then-existing market rate. Substantially all of the leases, other than those
for anchors, require the tenants to pay a proportionate share of operating
expenses, including common area maintenance, real estate taxes and insurance,
thereby reducing our exposure to increases in costs and operating expenses
resulting from inflation.

However, inflation may have a
negative impact on some of our other operating items. Interest and general and
administrative expenses may be adversely affected by inflation as these
specified costs could increase at a rate higher than rents. Also, for tenant
leases with stated rent increases, inflation may have a negative effect as the
stated rent increases in these leases could be lower than the increase in
inflation at any given time.

Seasonality

The shopping center industry is
seasonal in nature, particularly in the fourth quarter during the holiday
season, when tenant occupancy and retail sales are typically at their highest
levels. In addition, shopping malls achieve most of their temporary tenant
rents during the holiday season. As a result of the above, our earnings are
generally highest in the fourth quarter of each year.

Retail Climate and Tenant Bankruptcies

A
number of local, regional, and national retailers, including both in-line and
anchor tenants, have recently announced store closings or filed for
bankruptcy.  Some changeover in tenants
is normal in our business.  We lost 800,000
square feet of tenants in 2000 and 580,000 square feet in the first quarter of
2001 to bankruptcies.  Pressures which
affect consumer confidence, job growth, energy costs and income gains, however,
can affect retail sales growth and a continuing soft economic cycle may impact
our ability to retenant property vacancies resulting from these store closings
or bankruptcies.

The geographical diversity of our
portfolio mitigates some of our risk in the event of an economic downturn.  In addition, the diversity of our tenant mix
also is a factor because no single retailer represents neither more than 2.0%
of total GLA nor more than 3.5% of our annualized base minimum rent.  Bankruptcies and store closings may, in some
circumstances, create opportunities for us to release spaces at higher rents to
tenants with enhanced sales performance. 
Our previously demonstrated ability to successfully retenant anchor and
in line store locations reflects our resilience to fluctuations in economic
cycles.  While these factors reflect
some of the inherent strengths of our portfolio in a difficult retail
environment, successful execution of a releasing strategy is not assured.

Item
3. Qualitative and Quantitative Disclosure About Market Risk

Sensitivity
Analysis.Our combined future
earnings, cash flows and fair values relating to financial instruments are
dependent upon prevalent market rates of interest, primarily LIBOR. Based upon
consolidated indebtedness and interest rates at March 31, 2001, a 0.50%
increase in the market rates of interest would decrease annual future earnings
and cash flows by approximately $9.8 million, and would decrease the fair value
of debt by approximately $450.7 million. A 0. 50% decrease in the market rates
of interest would increase annual future earnings and cash flows by
approximately $9.8 million, and would increase the fair value of debt by
approximately $518.3 million.  We manage
our exposure to interest rate risk by a combination of interest rate protection
agreements to effectively fix or cap a portion of our variable rate debt and by
refinancing fixed rate debt at times when rates and terms are appropriate.

Part II - Other Information

Item
1:  Legal Proceedings

Please
refer to Note 9 of the combined financial statements for a summary of material
pending litigation.

Item
6:  Exhibits and Reports on Form 8-K

(a)
ExhibitsNone.(b)
Reports on Form 8-KOne
report on Form 8-K was filed during the current period.On
February 16, 2001 under Item 5 - Other Events, SPG reported that it made
available additional ownership and operational information concerning the
Companies, the Operating Partnerships, and the properties owned or managed as
of December 31, 2000, in the form of a Supplemental Information Package. A copy
of the package was included as an exhibit to the 8-K filing. In addition, SPG
reported that, on February 8, 2001, it issued a press release containing
information on earnings as of December 31, 2000 and other matters. A copy of
the press release was included as an exhibit to the filing.

SIGNATURE

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, INC. ANDSPG
  REALTY CONSULTANTS, INC./s/
  Stephen E. SterrettStephen
  E. Sterrett,Executive
  Vice President and Chief Financial OfficerDate:
  May 15, 2001