UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                   FORM 10-K/A

                                (AMENDMENT NO. 2)

       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
  EXCHANGE ACT OF 1934
       For the fiscal year ended December 31, 1997
                        Commission file number 1-12618

                          SIMON DEBARTOLO GROUP, INC.
            (Exact name of registrant as specified in its charter)
                                       
               MARYLAND                              35-1901999
      ---------------------------               -------------------
     (State or other jurisdiction                 (I.R.S. Employer
   of incorporation or organization)            Identification No.)
                                                          
      115 WEST WASHINGTON STREET                          
         INDIANAPOLIS, INDIANA                         46204
  -----------------------------------               -----------
(Address of principal executive offices)             (Zip Code)
                                       
      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (317) 636-1600
                                       
         SECURITIES REGISTERED PURSUANT TO SECTION 12 (B) OF THE ACT:
     
                                               NAME OF EACH EXCHANGE
  TITLE OF EACH CLASS                           ON WHICH REGISTERED
  Common stock, $0.0001 par value             New York Stock Exchange
  8 3/4% Series B Cumulative Redeemable
  Preferred Stock, $.0001 par value          New York Stock Exchange

       SECURITIES REGISTERED PURSUANT TO SECTION 12 (G) OF THE ACT: NONE
     
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   [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.     [X]

The aggregate market value of voting stock held by non-affiliates of the
Registrant was approximately $3,258 million based on the closing market price
on the New York Stock Exchange for such stock on March 6, 1998. As of March 6,
1998, 106,484,009; 3,200,000 and 4,000 shares of common stock, Class B common
stock and Class C common stock were outstanding, respectively.

                      Documents Incorporated By Reference

NONE.

<PAGE>                                                           
Simon DeBartolo Group, Inc. hereby amends its Annual Report on Form 10-K for
the year ended December 31, 1997, to include supplementary disclosure to the
funds from operations discussion on page 45, footnotes 4 and 11 of the
consolidated financial statements on pages 69 and 81, respectively, and the
Notes to Schedule III on page 91.

                                   SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this amended report to be signed on its behalf by
the undersigned, hereunto duly authorized.


                                         SIMON DEBARTOLO GROUP, INC.
                                         By: /s/ James M. Barkley
                                            ---------------------
                                            James M. Barkley,
                                            Secretary/General Counsel
<PAGE>
                                    PART I

ITEM 1. BUSINESS

     BACKGROUND
     
     Simon DeBartolo Group, Inc. (the "Company"), a Maryland corporation,
formerly known as Simon Property Group, Inc., is a self-administered and self-
managed real estate investment trust ("REIT") under the Internal Revenue Code
of 1986, as amended (the "Code"). The Company's majority owned subsidiary
partnership is Simon DeBartolo Group, L.P. ("the Operating Partnership"). The
Company, through the Operating Partnership, is engaged primarily in the
ownership, operation, management, leasing, acquisition, expansion and
development of real estate properties, primarily regional malls and community
shopping centers.

     As of December 31, 1997, the Operating Partnership owns or holds an
interest in 202 income-producing properties, which consist of 120 regional
malls, 72 community shopping centers, three specialty retail centers, four
mixed-use properties and three value-oriented super-regional malls located in 33
states (the "Properties"). The Operating Partnership also owns interests in one
specialty retail center and two community centers currently under construction
and nine parcels of land either in preconstruction development or held for
future development (collectively, the "Development Properties", and together
with the Properties, the "Portfolio Properties"). The Operating Partnership
also holds substantially all of the economic interest in M.S. Management
Associates, Inc. (the "Management Company"), while substantially all of the
voting stock is held by Melvin Simon, Herbert Simon and David Simon. The
Management Company manages Properties generally not wholly-owned by the
Operating Partnership and certain other properties, and also engages in certain
property development activities. The Operating Partnership also holds
substantially all of the economic interest in, and the Management Company holds
substantially all of the voting stock of, DeBartolo Properties Management, Inc.
("DPMI"), which provides architectural, design, construction and other services
to substantially all of the Portfolio Properties, as well as certain other
regional malls and community shopping centers owned by third parties. At
December 31, 1997, 1996 and 1995, the Company's ownership interest in the
Operating Partnership was 63.9%, 61.4%, and 61.0%, respectively.

     THE DRC MERGER

     On August 9, 1996, the Company acquired the national shopping center
business of DeBartolo Realty Corporation ("DRC") for an aggregate value of $3.0
billion (the "DRC Merger"). The acquired portfolio consisted of 49 regional
malls, 11 community centers and 1 mixed-use Property. These Properties included
47,052,267 square feet of retail space gross leasable area ("GLA") and 558,636
of office GLA. Pursuant to the DRC Merger, the Company issued a total of
37,873,965 shares of common stock, to the DRC shareholders. DRC became a 99.9%
subsidiary of the Company. The Company changed its name to Simon DeBartolo
Group, Inc. In addition, the Management Company purchased from The Edward J.
DeBartolo Corporation all of the voting stock of DPMI, for $2.5 million in
cash.

     For additional information concerning the DRC Merger, please see Note 3 to
the consolidated financial statements.

     THE PARTNERSHIP MERGER

     On December 31, 1997, Simon Property Group, L.P., a Delaware limited
partnership ("SPG, LP"), merged (the "Partnership Merger") into the Operating
Partnership. Prior to the Partnership Merger, the Operating Partnership and the
Company held all of the partnership interests of SPG, LP, which held interests
in certain of the Portfolio Properties. As a result of the Partnership Merger,
the Operating Partnership now directly or indirectly owns or holds interests in
all of the Portfolio Properties and directly holds substantially all of the
economic interest in the Management Company. Prior to the DRC Merger,
references to the Operating Partnership refer to SPG, LP only.

     DEFINITIVE MERGER AGREEMENT

     The Company, Corporate Property Investors ("CPI") and Corporate Realty
Consultants, Inc. ("CRC") entered into an Agreement and Plan of Merger, dated
as of February 18, 1998 (the "Merger Agreement") , pursuant to which a
subsidiary of CPI shall be merged with and into the Company (the "Merger").
Upon consummation of the Merger, CPI will be renamed and holders of the
Company's common stock will receive shares of CPI common stock on a one-for-one
<PAGE>
basis and beneficial interests in shares of CRC common stock. Based upon the
capitalization of the Company and CPI as of December 31, 1997, the Company's
stockholders would own in the aggregate approximately 67% of the outstanding
shares of the new entity's common stock. Even though the Company's
stockholders will receive shares of common stock of a new entity, substantially
all the members of the current Board of Directors and senior management of the
Company will be members of the new Board of Directors and senior management of
the new entity. All of the Company's policies, including investment and
financing policies, and practices are expected to continue as the new entity's
policies and practices.

     The Merger Agreement provides that prior to the Merger each holder of CPI
common stock will receive consideration of $179 per share, consisting of a
dividend of : (i) the Cash Amount (as defined below) ; (ii) 1.0818 shares of
CPI common stock; and (iii) 0.19 shares of CPI 6.5% convertible preferred
stock. The "Cash Amount" is equal to $90.00 per share of CPI common stock,
subject to adjustment as follows: (i) if the Market Price (as defined below)
for the Company's common stock at the effective time of the Merger exceeds
$38.67, then the Cash Amount shall be reduced by an amount equal to such excess
multiplied by 2.0818 and (ii) if the Market Price for the Company's common
stock at the effective time of the Merger is less than $28.58, then the Cash
Amount shall be increased by an amount equal to such deficiency multiplied by
2.0818. The "Market Price" shall be the average of the closing prices per share
for the Company's common stock on the New York Stock Exchange for the 20
consecutive trading days ending on the fifth trading day prior to the effective
time of the Merger.

     The transaction is expected to be consummated during the third quarter of
1998 and is subject to the approval of the Company's stockholders, as well as
customary regulatory and other conditions. The requisite number of CPI
stockholders already have agreed to approve the transaction. The foregoing
description of the Merger Agreement does not purport to be complete and is
qualified in its entirety by reference to the Merger Agreement, which appears
as Exhibit 10.1 to the Company's Form 8-K dated February 19, 1998 and is
incorporated herein by reference.

     GENERAL
     
     As of December 31, 1997, the Operating Partnership owned or held interests
in a diversified portfolio of 202 income-producing Properties, including 120
enclosed regional malls, 72 community shopping centers, three specialty retail
centers, four mixed-use Properties and three value-oriented super-regional
malls, located in 33 states. Regional malls, community centers and the
remaining portfolio comprised 82.8%, 8.3%, and 8.9%, respectively of total rent
revenues and tenant reimbursements in 1997. The value-oriented super-regional
malls are not included in consolidated rent revenues and tenant reimbursements
as they are each accounted for using the equity method of accounting. The
Properties contain an aggregate of approximately 128.8 million square feet of
GLA, of which 78.0 million square feet is owned by the Operating Partnership
("Owned GLA"). Approximately 3,600 different retailers occupy more than 14,000
stores in the Properties. Total estimated retail sales at the Properties
exceeded $25 billion in 1997.

     The Company and certain of its subsidiaries are taxed as REITs under
sections 856 through 860 of the Code, and applicable Treasury regulations
relating to REIT qualification. The Company is self-administered and self-
managed and does not engage or pay a REIT advisor. The Company provides
management, development, leasing, accounting, finance and legal, design and
construction expertise through its own personnel or, where appropriate, through
outside professionals.

     OPERATING STRATEGIES
     
     The Company's primary business objectives are to increase per share cash
generated from operations and the value of the Operating Partnership's
Properties and operations. The Company plans to achieve these objectives
through a variety of methods discussed below, although no assurance can be made
that such objectives will be achieved.

     Leasing. The Operating Partnership pursues an active leasing strategy,
     which includes aggressively marketing available space; renewing existing
     leases at higher base rents per square foot; and continuing to sign leases
     that provide for percentage rents and/or regular or periodic fixed
     contractual increases in base rents.

    Management. Drawing upon the expertise gained through management of
    approximately 140 million square feet of retail and mixed-use Properties,
    the Operating Partnership seeks to maximize cash flow through a
    combination of an active merchandising program to maintain its shopping
    centers as inviting shopping destinations, continuation of its successful
    efforts to minimize overhead and operating costs, coordinated marketing
    and promotional activities, and systematic planning and monitoring of
    results.
<PAGE>    
    Acquisitions. The Operating Partnership intends to selectively acquire
    individual properties and portfolios of properties that meet its
    investment criteria as opportunities arise. Management believes that
    consolidation will continue to occur within the shopping center industry,
    creating opportunities for the Operating Partnership to acquire additional
    portfolios of shopping centers and increase operating profit margins.
    Management also believes that its extensive experience in the shopping
    center business, access to capital markets, national operating scope,
    familiarity with real estate markets and advanced management systems will
    allow it to evaluate and execute acquisitions competitively. Additionally,
    the Operating Partnership may be able to acquire properties on a tax-
    advantaged basis for the transferors.
    
    During 1997, the Operating Partnership, through the acquisition of The
    Retail Property Trust ("RPT"), and other related transactions, acquired a
    portfolio of ten wholly-owned Properties and one 50%-owned Property
    comprising approximately twelve million square feet of GLA in eight
    states. RPT is also a REIT. In addition, the Operating Partnership made
    several other single-Property ownership acquisitions in 1997. The
    Operating Partnership acquired a 50% ownership interest in Dadeland Mall
    and an additional 48% ownership interest in West Town Mall, increasing its
    ownership in that Property to 50%. In addition, the Operating Partnership
    acquired The Fashion Mall at Keystone at the Crossing, a 597,000 square-
    foot regional mall, along with an adjacent community center. Also acquired
    in 1997 was the remaining 30% ownership interest in Virginia Center
    Commons. On December 29, 1997, the Operating Partnership formed a joint
    venture partnership with The Macerich Company ("Macerich") to acquire a
    portfolio of twelve regional malls comprising approximately 10.7 million
    square feet of GLA. This transaction closed on February 27, 1998, with the
    Operating Partnership assuming leasing and management responsibilities for
    six of the regional malls and Macerich assuming leasing and management for
    the remaining properties.

    Development. The Operating Partnership's focus is to selectively develop
    new Properties in major metropolitan areas that exhibit strong population
    and economic growth. During 1997, the Operating Partnership opened one new
    regional mall, two value-oriented super-regional malls and one new
    community shopping center. On September 5, 1997, the Operating Partnership
    opened The Source, a 730,000 square-foot regional mall in Westbury (Long
    Island), New York. On October 31, 1997 the Operating Partnership opened
    Grapevine Mills, a 1.2 million square feet value-oriented super-regional
    mall in Grapevine (Dallas/Fort Worth), Texas, and on November 20, 1997,
    the Operating Partnership opened Arizona Mills, a 1.2 million square-foot
    value-oriented super-regional mall in Tempe, Arizona. In March 1997, the
    Operating Partnership opened Indian River Commons, a 260,000 square-foot
    community shopping center in Vero Beach, Florida, which is immediately
    adjacent to an existing regional mall Property.
     
    Development activities are ongoing at several other locations including
    the following projects, which have an aggregate construction cost of
    approximately $200 million:
     * The Shops at Sunset Place, a destination-oriented retail and
       entertainment project containing approximately 510,000 square feet of
       GLA is scheduled to open in October of 1998 in South Miami, Florida.
     * Muncie Plaza, a 196,000 square-foot community center project, is
       scheduled to open in April of 1998 in Muncie, Indiana, adjacent to
       Muncie Mall.
     * Lakeline Plaza, a 380,000 square-foot community center project, is
       scheduled to open in two phases in May and November of 1998 in Austin,
       Texas, adjacent to Lakeline Mall.
    
    The Operating Partnership also has direct or indirect interests in nine
    other parcels of land either in preconstruction development or being held
    for future development in eight states totaling approximately 677 acres.
    Management believes the Operating Partnership is well positioned to pursue
    future development opportunities as conditions warrant.
    
    The Operating Partnership is in the preconstruction development phase on
    one new value-oriented super-regional mall, a factory outlet center and
    one new community center project. Concord Mills, an approximately $200
    million development, is scheduled to open in 1999. This 1.4 million square-
    foot value-oriented super-regional mall development project is 50%-owned
    by the Operating Partnership. Houston Premium Outlets is a 462,000 square-
    foot factory outlet project in Houston, Texas. This approximately $89
    million project, of which the Operating Partnership has a 50% ownership
    interest in, is scheduled to begin construction in 1998 and open in 1999.
    The Shops at North East Mall, which is immediately adjacent to an existing
<PAGE>
    regional mall in the Company's portfolio, is an approximately $55 million
    development. This 391,000 square-foot wholly-owned development project is
    scheduled to open in Hurst, Texas, in 1999.
     
    Strategic Expansions and Renovations. A key objective of the Operating
    Partnership is to increase the profitability and market share of the
    Properties through the completion of strategic renovations and expansions.
    In 1997, the Operating Partnership completed construction and opened
    fourteen expansion and/or renovation projects: Alton Square in Alton,
    Illinois; Aventura Mall in Miami, Florida; Chautauqua Mall in Jamestown,
    New York; Columbia Center in Kennewick, Washington; The Forum Shops at
    Caesar's in Las Vegas, Nevada; Knoxville Center in Knoxville, Tennessee;
    La Plaza in McAllen, Texas; Muncie Mall in Muncie, Indiana; Northfield
    Square in Bradley, Illinois; Northgate Mall in Seattle, Washington; Orange
    Park Mall in Jacksonville, Florida; Paddock Mall in Ocala, Florida;
    Richmond Square in Richmond, Indiana; and Southern Park Mall in
    Youngstown, Ohio.
    
    The Operating Partnership has a number of renovation and/or expansion
    projects currently under construction, or in preconstruction development.
    The Operating Partnership expects to commence construction on many of
    these projects in the next 12 to 24 months.
     
     COMPETITION
     
     The Operating Partnership believes that it has a competitive advantage in
the retail real estate business as a result of (i) its use of innovative
retailing concepts, (ii) its management and operational expertise, (iii) its
extensive experience and relationship with retailers and lenders, (iv) the
size, quality and diversity of its Properties and (v) through the mall
marketing initiatives of Simon Brand Ventures, which the Company believes is
the world's largest and most sophisticated mall marketing initiative.
Management believes that the Properties are the largest, as measured by GLA, of
any publicly traded REIT, with more regional malls than any other publicly
traded REIT. For these reasons, management believes the Operating Partnership
to be the leader in the industry.
     
     All of the Portfolio Properties are located in developed areas. With
respect to certain of such properties, there are other properties of the same
type within the market area. The existence of competitive properties could have
a material effect on the Operating Partnership's ability to lease space and on
the level of rents the Operating Partnership can obtain.
     There are numerous commercial developers, real estate companies and other
owners of real estate that compete with the Operating Partnership in its trade
areas. This results in competition for both acquisition of prime sites
(including land for development and operating properties) and for tenants to
occupy the space that the Operating Partnership and its competitors develop and
manage.

     ENVIRONMENTAL MATTERS
     
     General Compliance. Management believes that the Portfolio Properties are
in compliance, in all material respects, with all Federal, state and local
environmental laws, ordinances and regulations regarding hazardous or toxic
substances (see Item 3. Legal Proceedings). Substantially all of the Portfolio
Properties have been subjected to Phase I or similar environmental audits
(which generally involve only a review of records and visual inspection of the
property without soil sampling or ground water analysis) by independent
environmental consultants. The Phase I environmental audits are intended to
discover information regarding, and to evaluate the environmental condition of,
the surveyed properties and surrounding properties. The environmental audits
have not revealed, nor is management aware of, any environmental liability that
management believes will have a material adverse effect on the Company. No
assurance can be given that existing environmental studies with respect to the
Portfolio Properties reveal all potential environmental liabilities; that any
previous owner, occupant or tenant of a Portfolio Property did not create any
material environmental condition not known to management; that the current
environmental condition of the Portfolio Properties will not be affected by
tenants and occupants, by the condition of nearby properties, or by unrelated
third parties; or that future uses or condition (including, without limitation,
changes in applicable environmental laws and regulations or the interpretation
thereof) will not result in imposition of additional environmental liability.

     Asbestos-containing materials. Asbestos-containing materials are present
in most of the Properties, primarily in the form of vinyl asbestos tile,
mastics and roofing materials, which are generally in good condition.
Fireproofing and insulation containing asbestos is also present in certain
<PAGE>
Properties in limited concentrations or in limited areas. The presence of such
asbestos-containing materials does not violate currently applicable laws.
Asbestos-containing materials will be removed by the Operating Partnership in
the ordinary course of any renovation, reconstruction and expansion, and in
connection with the retenanting of space.

     Underground Storage Tanks. Several of the Portfolio Properties contain or
at one time contained underground storage tanks used to store waste oils or
other petroleum products primarily related to the operation of auto service
center establishments. All such tanks had been removed or previously abandoned
in place and filled with inert materials in accordance with applicable
environmental laws. Site assessments have revealed seven Properties contain
certain soil and/or groundwater contamination associated with such tanks.
Subsurface investigations (Phase II assessments) and remediation work are
either ongoing or scheduled to be conducted at such Properties. The costs of
remediation with respect to such matters have not been and are not expected to
be material.

     Properties to be Developed or Acquired. Land being held for shopping mall
development or that may be acquired for development may contain residues or
debris associated with the use of the land by prior owners or third parties. In
certain instances, such residues or debris could be or contain hazardous wastes
or hazardous substances. Prior to exercising any option to acquire any of the
optioned properties, the Operating Partnership will conduct environmental due
diligence consistent with past practice.

     EMPLOYEES
     
     The Company, the Operating Partnership and its affiliates employ
approximately, 6,300 persons at various centers and offices throughout the
United States. Approximately 730 of such employees are located at the Company's
headquarters in Indianapolis, Indiana, and approximately 3,400 of all employees
are part-time.

     INSURANCE
     
     The Operating Partnership has comprehensive liability, fire, flood,
extended coverage and rental loss insurance with respect to its Properties.
Management believes that such insurance provides adequate coverage.

     CORPORATE HEADQUARTERS

     The Company's executive offices are located at National City Center, 115
West Washington Street, Indianapolis, Indiana 46204, and its telephone number
is (317) 636-1600.
<PAGE>
     EXECUTIVE OFFICERS OF THE REGISTRANT

     The following table sets forth certain information with respect to the
executive officers of the Company as of December 31, 1997.
         Name             Age                      Position
                                 
Melvin Simon (1)          71     Co-Chairman
Herbert Simon (1)         63     Co-Chairman
David Simon (1)           36     Chief Executive Officer
Richard S. Sokolov        48     President and Chief Operating Officer
Randolph L. Foxworthy     53     Executive Vice President - Corporate
                                  Development
William J. Garvey         59     Executive Vice President - Property
                                  Development
James A. Napoli           51     Executive Vice President - Leasing
John R. Neutzling         45     Executive Vice President - Property
                                  Management
James M. Barkley          46     General Counsel; Secretary
Stephen E. Sterrett       42     Treasurer
John Rulli                41     Senior Vice President - Human Resources &
                                  Corporate Operations
James R. Giuliano, III    40     Senior Vice President
                                 
(1) Melvin Simon is the brother of Herbert Simon and the father of David Simon.

     Set forth below is a summary of the business experience of the executive
officers of the Company. The executive officers of the Company serve at the
pleasure of the Board of Directors and have served in such capacities since the
formation of the Company in 1993, with the exception of Mr. Sokolov and Mr.
Giuliano who have held their offices since the DRC Merger. For biographical
information of Melvin Simon, Herbert Simon, David Simon, and Richard Sokolov,
see Item 10 of this report.

     Mr. Foxworthy is the Executive Vice President - Corporate Development of
the Company. Mr. Foxworthy joined Melvin Simon & Associates, Inc. ("MSA") in
1980 and has been an Executive Vice President in charge of Corporate
Development of MSA since 1986 and has held the same position with the Company
since its formation in 1993.

     Mr. Garvey is the Executive Vice President - Property Development of the
Company. Mr. Garvey, who was Executive Vice President and Director of
Development at MSA, joined MSA in 1979 and held various positions with MSA.

     Mr. Napoli is the Executive Vice President - Leasing of the Company. Mr.
Napoli also served as Executive Vice President and Director of Leasing of MSA,
which he joined in 1989.

     Mr. Neutzling is the Executive Vice President - Property Management of the
Company. Mr. Neutzling has also been an Executive Vice President of MSA since
1992 overseeing all property and asset management functions. He joined MSA in
1974 and has held various positions with MSA.

     Mr. Barkley serves as the Company's General Counsel and Secretary. Mr.
Barkley holds the same position for MSA. He joined MSA in 1978 as Assistant
General Counsel for Development Activity.

     Mr. Sterrett serves as the Company's Treasurer. He joined MSA in 1989 and
has held various positions with MSA.

     Mr. Rulli holds the position of Senior Vice President - Human Resources
and Corporate Operations. He joined MSA in 1988 and has held various positions
with MSA.

     Mr. Giuliano has served as Senior Vice President since the DRC Merger. He
joined DRC in 1993, where he served as Senior Vice President and Chief
Financial Officer up to the DRC Merger.

<PAGE>

ITEM 2. PROPERTIES

     PORTFOLIO PROPERTIES
     
     The Properties primarily consist of two types: regional malls and
community shopping centers. Regional malls contain two or more anchors and a
wide variety of smaller stores ("Mall" stores) located in enclosed malls
connecting the anchors. Additional stores ("Freestanding" stores) are usually
located along the perimeter of the parking area. The 120 regional malls in the
Properties range in size from approximately 200,000 to 1.6 million square feet
of GLA, with 116 regional malls over 400,000 square feet. These regional malls
contain in the aggregate nearly 11,600 occupied stores, including 480 anchors
which are mostly national retailers. As of December 31, 1997, regional malls
(including specialty retail centers, and retail space in the mixed-use
Properties) represented 81.8% of total GLA, 76.5% of Owned GLA and 81.5% of
total annualized base rent of the Properties.
     Community shopping centers are generally unenclosed and smaller than
regional malls. Most of the 72 community shopping centers in the Properties
range in size from approximately 100,000 to 400,000 square feet of GLA.
Community shopping centers generally are of two types: (i) traditional
community centers, which focus primarily on value-oriented and convenience
goods and services, are usually anchored by a supermarket, drugstore or
discount retailer and are designed to service a neighborhood area; and (ii)
power centers, which are designed to serve a larger trade area and contain at
least two anchors that are usually national retailers among the leaders in
their markets and occupy more than 70% of the GLA in the center. As of December
31, 1997, community shopping centers represented 13.5% of total GLA, 16.1% of
Owned GLA and 8.7% of the total annualized base rent of the Properties.
     The Operating Partnership also has an interest in three specialty retail
centers, four mixed-use Properties and three value-oriented super-regional
malls. The specialty retail centers contain approximately 760,000 square feet
of GLA and do not have anchors; instead, they feature retailers and
entertainment facilities in a distinctive shopping environment and location.
The four mixed-use Properties range in size from approximately 500,000 to
1,025,000 square feet of GLA. Two of these Properties are regional malls with
connected office buildings, and two are located in mixed-use developments and
contain primarily office space. The value-oriented super-regional malls are
each joint venture partnerships ranging in size from approximately 1.2 million
to 1.3 million square feet of GLA. These include Arizona Mills, Grapevine Mills
and Ontario Mills. These Properties combine retail outlets, manufacturers, off-
price stores and other value-oriented tenants. As of December 31, 1997, value-
oriented super-regional malls represented 2.9% of total GLA, 4.6% of Owned GLA
and 5.6% of the total annualized base rent of the Properties.
     As of December 31, 1997, approximately 87.3% of the Mall and Freestanding
Owned GLA in regional malls, specialty retail centers and the retail space in
the mixed use Properties was leased, approximately 93.8% of the Owned GLA in
the value-oriented super-regional malls was leased, and approximately 91.3% of
Owned GLA in the community shopping centers was leased.
     Of the 202 Properties, 154 are owned 100% by the Operating Partnership and
the remainder are held as joint venture interests. The Operating Partnership is
the managing or co-managing general partner of all but eight of the Properties
held as joint venture interests.

<PAGE>


                            Additional Information

     The following table sets forth certain information, as of December
31, 1997, regarding the Properties:
<TABLE>
<CAPTION>
                                         The Operating
                      Ownership          Partnership's
                 Interest (Expiration     Percentage         Year Built or        Total
  Name/Location      if Lease)(1)         Interest(2)          Acquired            GLA        Anchors/Specialty/Anchors

                                                                     
REGIONAL MALLS

<C> <S>                  <S>                 <C>                 <S>           <C>               <S>        <C>
1.  Alton Square          Fee                100.0               Acquired        641,145         Famous Barr, JCPenney,
    Alton, IL                                                      1993                          Sears
                                                             
2.  Amigoland Mall        Fee                100.0                 Built         560,318         Beall's, Dillard's, JCPenney,
    Brownsville, TX                                                1974                          Montgomery Ward
                                                             
3.  Anderson Mall         Fee                100.0                 Built         637,872         Gallant Belk, JCPenney,
    Anderson, SC                                                   1972                          Sears, Uptons
                                                             
4.  Aventura Mall(3)      Fee                 33.3                 Built       1,459,397         AMC Theatre (4), Bloomingdales,
    Miami, FL                                                      1983                          Burdines (4), JCPenney, Lord &
                                                                                                 Taylor, Macy's, Sears    
                                                                
5.  Avenues, The          Fee                 25.0                 Built       1,113,651         Dillard's, Gayfers,
    Jacksonville, FL                                               1990                          Sears, Parisian, JCPenney
                                                            
   
6.  Barton Creek          Fee                100.0                 Built       1,374,794         Dillard's (5), Foley's,
    Square                                                         1981                          JCPenney, Sears,
    Austin, TX                                                                                   Montgomery Ward
   
7.  Battlefield          Fee and Ground      100.0                 Built       1,156,592         Dillard's, Famous Barr,
    Mall                 Lease (2056)                              1970                          Montgomery Ward, Sears,
    Springfield, MO                                                                              JCPenney
                                                       
8.  Bay Park Square      Fee                 100.0                 Built         641,929         Kohl's, Montgomery Ward,
    Green Bay, WI                                                  1980                          Shopko, Elder-Beerman
                                                             
9.  Bergen Mall          Fee and Ground      100.0               Acquired      1,013,718         Value City, Stern's,
    Paramus, NJ          Lease (6)(2061)                           1987                          Marshall's, Off 5th-Saks Fifth
                                                                                                Avenue Outlet
                                                       
10. Biltmore Square      Fee              (7) 66.7                 Built         494,436         Belk, Dillard's, Proffitt's,
    Asheville, NC                                                  1989                          Goody's
                                                             
11. Boynton Beach Mall   Fee                 100.0                 Built       1,064,072         Burdines, Macy's, Sears,
    Boynton Beach, FL                                              1985                          Dillard's (4) (5)
                                                                                JCPenney
                
   
12. Broadway Square      Fee                 100.0               Acquired        571,429         Dillard's, JCPenney, Sears
    Tyler, TX                                                      1994               
   
13. Brunswick Square     Fee                 100.0                 Built         736,479         Brunswick Square Movies,
    East Brunswick, NJ                                             1973                          Macy's, JCPenney
    
    
   
14. Castleton Square     Fee                 100.0                 Built       1,352,729         LS Ayres, Lazarus, Montgomery
    Indianapolis, IN                                               1972                          Ward (8), JCPenney, Sears
                                                                                                 
<PAGE>
15. Century III Mall     Fee                  50.0                 Built       1,287,251       Lazarus, Kaufmann's, JCPenney
    Pittsburgh, PA                                                 1979                        Sears, T.J. Maxx, Wickes
                                                                                               Furniture

                                   


16. Charlottesville    Ground Lease           50.0          Acquired             573,614       Belk, JCPenney, Sears
    Fashion Square      (2076)                               1997                              Stone & Thomas 
    Charlottesville, VA                                           

17. Chautauqua Mall      Fee                 100.0           Built               428,285       The Bon Ton (4), Sears,
    Jamestown, NY                                            1971                              JCPenney, Office Max
                                                                   
18. Cheltenham Square    Fee                 100.0           Built               624,790       Burlington Coat Factory,
    Philadelphia, PA                                         1981                              Movies at Cheltenham, Home
                                                                                               Depot, Value City,
                                                                                               Seaman's Furniture, Shop Rite
19. Chesapeake Square    Fee and Ground    (7)75.0           Built               704,463       Dillard's, Belk, JCPenney, Sears,
    Chesapeake, VA       Lease (2062)                        1989                              Montgomery Ward
                                                              
                            
20. Cielo Vista Mall     Fee and Ground      100.0           Built             1,196,102       Dillard's (5), JCPenney, Montgomery
    El Paso, TX          Lease (9)(2027)                     1974                              Ward, Sears
                                 

21. Circle Centre        Property Lease       14.7           Built               793,234       Nordstrom, Parisian,
    Indianapolis, IN     (2097)                              1995                              United Artists
                             

22. College Mall         Fee and Ground      100.0           Built               707,220       JCPenney, Lazarus,
    Bloomington, IN      Lease (10)(2048)                    1965                              L.S. Ayres, Sears, Target
                                                           
                             
23. Columbia Center      Fee                 100.0         Acquired              772,894       Barnes & Noble,
    Kennewick, WA                                            1987                              The Bon Marche, Lamonts, 
                                                                                               JCPenney, Sears
24. Coral Square         Fee                  50.0           Built               941,370       Burdines (5), Dillard's,
    Coral Springs, FL                                        1984                              JCPenney, Sears
                                                                   
25. Cottonwood Mall      Fee                 100.0           Built             1,022,835       Dillard's, Foley's,
    Albuquerque, NM                                          1996                              JCPenney, Mervyn's,
                                                                                               Montgomery Ward
                                                                                               United Artists

26. Crossroads Mall      Fee                 100.0         Acquired              871,356       Dillard's, Sears,
    Omaha, NE                                                1994                              Younkers
                                                                   
27. Crystal River Mall   Fee                 100.0           Built               425,277       Belk, Kmart,
    Crystal River, FL                                        1990                              JCPenney, Regal Cinema, 
                                                                                               Sears
                                                                   
28. Dadeland Mall        Fee                  50.0         Acquired            1,403,416       Burdine's, Burdine's Home
    Miami, FL                                                1997                              Gallery, JCPenney, Limited
                                                                                               Lord & Taylor, Saks Fifth
                                                                                               Avenue
29. DeSoto Square        Fee                 100.0           Built               686,408       Burdines, JCPenney,
    Bradenton, FL                                            1973                              Sears, Dillard's
                                                                   
<PAGE>
30. Eastern Hills Mall   Fee                 100.0           Built               997,172       Sears, The Bon Ton,
    Buffalo, NY                                              1971                              JCPenney, Kaufmann's,
                                                                                               Burlington Coat Factory (4),
                                                                                               Waccamaw (11)
31. Eastland Mall        Fee                 100.0           Built               702,496       Dillard's, General Cinema,
    Tulsa, OK                                                1986                              JCPenney, Mervyn's,
                                                                                               Service Merchandise
32. Edison Mall          Fee                 100.0         Acquired              987,103       Burdines (5), Dillard's,
    Fort Meyers, FL                                          1997                              JCPenney, Sears
    
33. Fashion Mall at     Ground Lease         100.0         Acquired              651,671       Jacobsons, Parisian
    Keystone at the     (2067)                               1997                                
    Crossing, The                                  
    Indianapolis, IN         
    
34. Florida Mall, The    Fee                 50.0            Built              1,119,871      Burdines (4), Dillard's (5),
    Orlando, FL                                              1986                              Gayfers, JCPenney, Saks Fifth
                                                                                               Avenue, Sears
35. Forest Mall          Fee                100.0            Built                484,131      JCPenney, Kohl's,
    Fond Du Lac, WI                                          1973                              Younkers, Sears, Staples
    
36. Forest Village       Fee                100.0            Built                417,344      JCPenney, Kmart
    Park Mall                                                1980
    Forestville, MD                                                       
    
37. Fremont Mall         Fee                100.0            Built                199,266      1/2 Price Store, JCPenney
    Fremont, NE                                              1966
    
38. Golden Ring Mall     Fee                100.0            Built                719,625      Caldor, Hecht's,
    Baltimore, MD                                            1974                              Montgomery Ward,
                                                                                               United Artists
39. Great Lakes Mall     Fee                100.0            Built              1,295,872      Dillard's (5), Great Lakes
    Cleveland, OH                                            1961                              Mall Theatres, Kaufmann's,
                                                                                               JCPenney, Sears
40. Greenwood Park       Fee                100.0          Acquired             1,273,258      JCPenney, Lazarus,
     Mall                                                    1979                              L.S. Ayres, Sears,
    Greenwood, IN                                                                              Montgomery Ward (8),
                                                                                               Service Merchandise
41. Gulf View Square     Fee                100.0            Built                809,913      Burdines, Dillard's,
    Port Richey, FL                                          1980                              Montgomery Ward,
                                                                                               JCPenney, Sears
42. Heritage Park Mall   Fee                100.0            Built                634,178      Dillard's, Sears,
    Midwest City, OK                                         1978                              Montgomery Ward,
                                                                                               Service Merchandise
43. Hutchinson Mall      Fee                100.0            Built                525,702      Cinema 8, Dillard's,
    Hutchinson, KS                                           1985                              JCPenney,
                                                                                               Sears, Wal-Mart (12),
                                                                                               Service Merchandise
44. Independence Center  Fee                100.0           Acquired            1,030,462      The Jones Store Co.,
    Independence, MO                                          1994                             Dillard's, Sears
    
<PAGE>
45. Indian River Mall    Fee                 50.0            Built                749,613      AMC Theatre, Burdines, Sears,
    Vero Beach, FL                                           1996                              JCPenney, Dillard's
    
46. Ingram Park Mall     Fee                100.0            Built              1,133,183      Dillard's (5), Foley's,
    San Antonio, TX                                          1979                              JCPenney, Sears, Beall's
    
47. Irving Mall          Fee                100.0            Built              1,040,628      Barnes & Noble (4),
    Irving, TX                                               1971                              Dillard's, Foley's,
                                                                                               General Cinema (4) JCPenney,
                                                                                               Mervyn's, Sears,
48. Jefferson Valley     Fee                100.0            Built                 589,601     Macy's, Sears,
    Mall                                                     1983                              Service Merchandise
    Yorktown Heights, NY                      
    
49. Knoxville Center     Fee                100.0            Built                 970,673     Dillard's, JCPenney,
    Knoxville, TN                                            1984                              Proffitt's, Sears,
                                                                                               Service Merchandise
50. La Plaza            Fee and Ground      100.0            Built                 987,645     Dillard's, JCPenney, Beall's,
    McAllen, TX         Lease (6)(2040)                      1976                              Foley's, Sears,
                                                                                               Service Merchandise,
                                                                                               Joe Brand-Lady Brand
                             
51. Lafayette Square     Fee                100.0            Built               1,220,043     JCPenney, LS Ayres, Sears,
    Indianapolis, IN                                         1968                              Lazarus, Waccamaw,
                                                                                               Montgomery Ward (11)
52. Laguna Hills Mall    Fee                100.0           Acquired               812,581     JCPenney,
    Laguna Hills, CA                                          1997                             Macy's, Sears
    
53. Lakeland Square      Fee                 50.0            Built                 900,556     Belk, Burdines,
    Lakeland, FL                                             1988                              Dillard's (5),
                                                                                               JCPenney, Sears
54. Lakeline Mall        Fee                 50.0(14)        Built               1,102,670     Dillard's, Foley's, Sears,
    N. Austin, TX                                            1995                              JCPenney, Mervyn's, United
                                                                                               Artists
                                                                   
55. Lima Mall            Fee                100.0            Built                 753,127     Elder-Beerman, Sears,
    Lima, OH                                                 1965                              Lazarus, JCPenney
                                                                   
56. Lincolnwood Town     Fee                100.0            Built                 441,085     Carson Pirie Scott,
    Center                                                   1990                              JCPenney
    Lincolnwood, IL                             
    
57. Longview Mall        Fee                100.0            Built                 617,025     Dillard's (5), JCPenney,
    Longview, TX                                             1978                              Sears, Service Merchandise,
                                                                                               Beall's
58. Machesney Park Mall  Fee                100.0            Built                 555,860     Kohl's, JCPenney,
    Rockford, IL                                             1979                              Bergners, (13)
    
59. Markland Mall        Ground Lease       100.0            Built                 391,284     Lazarus, Sears,
    Kokomo, IN           (2041)                              1968                              Target
                             
60. McCain Mall          Ground Lease       100.0            Built                 776,516     Dillard's, JCPenney,
    N. Little Rock, AR   (15)(2032)                          1973                              M.M. Cohn, Sears
                             
                             
61. Melbourne Square     Fee                100.0            Built                 734,323     Belk, Burdines,
    Melbourne, FL                                            1982                              Dillard's (5), JCPenney
    
<PAGE>
62. Memorial Mall        Fee                100.0            Built                 416,698     JCPenney, Kohl's,
    Sheboygan, WI                                            1969                              Sears
    
63. Menlo Park Mall      Fee                100.0          Acquired              1,296,127     Macy's, Nordstrom,
    Edison, New Jersey                                       1997                     (16)     Cineplex Odeon
    
64. Miami                Fee                 60.0            Built                 972,296     Burdines (5), Sears,
    International Mall                                       1982                              Dillard's, JCPenney
    Miami, FL
    
65. Midland Park Mall    Fee                100.0            Built                 618,924     Dillard's (5), JCPenney,
    Midland, TX                                              1980                              Sears, Beall's
    
66. Miller Hill Mall     Fee                100.0            Built                 801,511     Glass Block, JCPenney,
    Duluth, MN                                               1973                              Montgomery Ward, Sears
    
67. Mission Viejo Mall   Fee                100.0            Built                 817,167     Macy's,
    Mission Viejo, CA                                        1979                              Robinsons - May (5),
                                                                                               Nordstrom (4)
68. Mounds Mall          Ground Lease       100.0            Built                 407,233     Elder-Beerman, JCPenney,
    Anderson, IN         (2033)                              1965                              Sears
                             
69. Muncie Mall          Fee                100.0            Built                 658,672     JCPenney, L.S. Ayres,
    Muncie, IN                                               1970                              Sears, Elder Beerman, (5)
    
70. North East Mall      Fee                100.0            Built               1,142,147     Dillard's (5), JCPenney,
    Hurst, TX                                                1971                              Montgomery Ward, Sears
    
71. North Towne Square   Fee                100.0            Built                 761,659     Lion, Montgomery Ward, (13)
    Toledo, OH                                               1980
    
72. Northfield Square    Fee              (7)31.6            Built                 558,420     Cinemark Movies 10, Carson
    Bradley, IL                                              1990                              Pirie Scott, JCPenney, Sears,
                                                                                               Venture
73. Northgate Mall       Fee                100.0          Acquired              1,123,787     The Bon Marche, Lamonts,
    Seattle, WA                                              1987                     (17)     Nordstrom, JCPenney
    
74. Northwoods Mall      Fee                100.0          Acquired                667,937     Famous Barr, JCPenney,
    Peoria, IL                                               1983                              Sears (4)
    
75. Oak Court Mall       Fee                100.0          Acquired                847,964     Dillard's (5), Goldsmith's
    Memphis, TN                                              1997                     (18)
    
76. Orange Park Mall     Fee                100.0          Acquired                916,174     AMC 24 Theatre, Dillard's,
    Jacksonville, FL                                         1994                              Gayfer's, JCPenney, Sears
    
77. Orland Square        Fee                100.0          Acquired              1,224,962     Carson Pirie Scott, JCPenney,
    Orland Park, IL                                          1997                              Marshall Field, Plitt
                                                                                               Theatres, Sears
78. Paddock Mall         Fee                100.0            Built                 559,414     Belk, Burdines,
    Ocala, FL                                                1980                              JCPenney, Sears
    
<PAGE>
79. Palm Beach Mall     Fee                  50.0            Built               1,200,692     JCPenney, Sears,
    West Palm Beach, FL                                      1967                              Lord & Taylor,
                                                                                               Dillards, Burdines
80. Port Charlotte      Ground Lease      (7)80.0            Built                 716,149     Burdines, Dillard's,
     Town Center        (2064)                               1989                              Montgomery Ward,
    Port Charlotte, FL                                                                         JCPenney, Regal Cinema (4),
                                                                                               Sears
81. Prien Lake Mall     Fee and Ground      100.0            Built                 455,550     Dillards (4), JCPenney,
    Lake Charles, LA    Lease (6)(2025)                      1972                              Montgomery Ward,
                                                                                               Sears (4), The White House
                            
                             
82. Promenade, The      Fee                 100.0          Acquired                600,437     Macy's, Macy's Home,
    Woodland Hills, CA                                       1997                              AMC Theatre
                                                                   
83. Raleigh Springs     Fee and Ground      100.0           Built                  907,976     Dillard's, Goldsmith's 
    Mall                Lease (6)(2018)                     1979                               JCPenney, Sears
    Memphis, TN                                                      
                             
                             
                             
84. Randall Park Mall   Fee                 100.0           Built                1,572,080     Dillard's, Kaufmann's,
    Cleveland, OH                                           1976                               LaSalle Interiors (5),
                                                                                               JCPenney, Sears,
                                                                                               Burlington Coat Factory
85. Richardson Square   Fee                 100.0           Built                  723,365     Barnes & Noble, Dillard's,
    Dallas, TX                                              1977                               Ross Dress for Less (4),
                                                                                               Sears, Stein Mart (4),
                                                                                               Montgomery Ward
86. Richmond Town      Fee                  100.0           Built                  872,989     JCPenney, Kaufmann's (4),
    Square                                                  1966                               Sears, Sony Theatres
    Cleveland, OH                                        
    
87. Richmond Square    Fee                  100.0           Built                  393,388     Dillard's, JCPenney,
    Richmond, IN                                            1966                               Sears, Office Max
    
88. River Oaks Center  Fee                  100.0         Acquired               1,341,165     Carson Pirie Scott,
    Calumet City, IL                                        1997                      (19)     Cineplex Odeon, JCPenney,
                                                                                               Marshall Field, Sears
89. Rolling Oaks Mall  Fee                   49.9           Built                   758,939    Dillard's, Foley's,
    North San Antonio, TX                                   1988                               Sears
    
90. Ross Park Mall     Fee               (7)100.0           Built                 1,274,883    Lazarus, JCPenney,
    Pittsburgh, PA                                          1986                               Kaufmann's, Sears,
                                                                                               Service Merchandise
91. St. Charles Towne  Fee                  100.0           Built                 1,053,244    Cineplex Odeon, Hecht's,  
    Center                                                  1990                               JCPenney, Kohl's, Sears,  
    Waldorf, MD                                                                                Montgomery Ward,
                                                                                               
                                                                                               
92. Seminole Towne     Fee                   45.0           Built                 1,153,861    Burdines, Dillard's,
     Center                                                 1995                               JCPenney, Parisian, Sears
    Sanford, FL                                                                                United Artists
    
93. Smith Haven Mall   Fee                   25.0         Acquired                1,341,959    Sterns, Macy's,
    Lake Grove, NY                                          1995                               Sears, JCPenney
    
<PAGE>
94. Source, The        Fee                   50.0           Built                   732,820    ABC Home, Cheesecake Factory,
    Long Island, NY                                         1997                               Circuit City, Fortunoff,
                                                                                               Loehmann's, Nordstrom Rack,
                                                                                               Off 5th- Saks Fifth Avenue,
                                                                                               Old Navy, Rainforest Cafe,
                                                                                               Virgin Megastore
95. South Hills        Fee                  100.0         Acquired                1,107,269    Carmike Cinemas, Kaufmann's,
    Village                                                 1997                               Lazarus, Sears 
    Pittsburgh, PA                                               
                                                                   
96. South Park Mall    Fee                  100.0           Built                   857,337    Burlington Coat Factory,
    Shreveport, LA                                          1975                               Dillard's, JCPenney,
                                                                                               Montgomery Ward,
                                                                                               Regal Cinema, Stage
97. Southtown Mall     Fee                  100.0           Built                   858,202    Kohl's, JCPenney (11),
    Ft. Wayne, IN                                           1969                               L.S. Ayres (11), Sears,
                                                                                               Service Merchandise (11)
98. Southern Park Mall Fee                  100.0           Built                 1,210,446    Dillard's, Kaufmann's,
    Youngstown, OH                                          1970                               JCPenney, Sears
    
99. Southgate Mall     Fee                  100.0         Acquired                  321,336    Albertson's (12), Sears,
    Yuma, AZ                                                1988                               Dillard's, JCPenney
                                                                   
100. Summit Mall       Fee                   100.0          Built                    717,774   Kaufmann's, Dillard's (5) (4)
     Akron, OH                                              1965               
    
101. Sunland Park Mall Fee                   100.0          Built                    920,882   General Cinemas, JCPenney,
     El Paso, TX                                            1988                               Mervyn's, Sears, Dillard's,
                                                                                               Montgomery Ward
102. Tacoma Mall       Fee                   100.0        Acquired                 1,280,841   The Bon Marche, Sears,
     Tacoma, WA                                             1987                               Nordstrom, JCPenney,
                                                                                               Mervyn's, Plitt Theatres
103. Tippecanoe Mall   Fee                   100.0          Built                    865,341   Kohl's, Lazarus, Sears,
     Lafayette, IN                                          1973                               L.S. Ayres, JCPenney
    
104. Towne East Square Fee                   100.0          Built                  1,152,772   Dillard's, JCPenney,
     Wichita, KS                                            1975                               Sears, Service Merchandise
    
105. Towne West Square  Fee                  100.0          Built                    938,536   Dillard's, Sears, JCPenney,
     Wichita, KS                                            1980                               Montgomery Ward,
                                                                                               Service Merchandise
106. Treasure Coast Square  Fee              100.0          Built                    884,720   Burdines, Dillard's (5),
     Jenson Beach, FL                                       1987                               Sears,
                                                                                               JCPenney
                                                                   
107. Tyrone Square          Fee              100.0          Built                  1,091,641   Burdines, Dillard's,
     St. Petersburg, FL                                     1972                               JCPenney, Sears
    
108. University Mall       Ground Lease      100.0          Built                    565,953   JCPenney, M.M. Cohn,
     Little Rock, AR      (20)(2026)                        1967                               Montgomery Ward
                                                                
                             
<PAGE>
109. University Mall          Fee           100.0         Acquired                  711,327    McRae's, JCPenney,
     Pensacola, FL                                          1994                               Sears, United Artists
    
110. University Park Mall     Fee            60.0          Built                    941,094    LS Ayres, JCPenney, Sears,
     South Bend, IN                                        1979                                Marshall Fields
    
111. Upper Valley Mall        Fee           100.0          Built                    751,062    Lazarus, JCPenney,
     Springfield, OH                                       1971                                Sears, Elder-Beerman
    
112. Valle Vista Mall         Fee           100.0          Built                    647,603     Dillard's, Mervyn's,
     Harlingen, TX                                         1983                                 Sears, JCPenney, Marshalls,
                                                                                                Beall's
113. Virginia Center          Fee          100.0           Built                    791,130     Belk, Dillard's, Hecht's,
     Commons                                               1991                                 JCPenney, Sears
     Richmond, VA
    
114. Washington Square        Fee          100.0           Built                  1,172,130     L.S. Ayres, Lazarus,
     Indianapolis, IN                                      1974                                 Montgomery Ward (11),
                                                                                                JCPenney, Sears
115. West Ridge Mall          Fee          100.0           Built                  1,040,337     Dillard's, JCPenney,
     Topeka, KS (21)                                       1988                                 Jones, Sears,
                                                                                                Montgomery Ward
                                                                   
116. West Town Mall           Fee            50.0         Acquired                 1,337,046    Dillard's, JCPenney,
     Knoxville, TN                                          1991                                Parisian, Proffitt's,
                                                                                                Regal Cinema (4), Sears
                                                                   
117. Westchester, The (3)     Fee            50.0          Acquired                  827,470    Neiman Marcus, Nordstrom
     (22)                                                    1997
     White Plains, NY
    
118. White Oaks Mall          Fee            77.0            Built                   904,127    Bergner's, Famous Barr,
     Springfield, IL                                         1977                               Montgomery Ward, Sears
    
119. Windsor Park Mall        Fee           100.0            Built                 1,095,248    Dillard's (5), JCPenney,
     San Antonio, TX                                         1976                               Mervyn's, Beall's,
                                                                                                Montgomery Ward
120. Woodville Mall           Fee          100.0            Built                    794,005    Andersons, Sears,
     Toledo, OH                                             1969                                Elder-Beerman, (13)
    
<PAGE>
VALUE-ORIENTED REGIONAL MALLS

1. Arizona Mills(3)           Fee           26.3            Built                  1,157,159    Burlington Coat Factory,
                                                            1997                                Harkins Theater, Mikasa,
                                                                                                Oshman's Supersport, Off 
                                                                                                5th- Saks Fifth Avenue Outlet,
                                                                                                JCPenney Outlet, Mikasa,          
                                                                                                Rainforest Cafe, GameWorks,
                                                                                                Hi Health, Linens `N Things
2. Grapevine Mills (3)        Fee           37.5            Built                  1,213,779    Books-A-Million,
   Grapevine (Dallas/Ft.                                    1997                                Burlington Coat Factory,
   Worth), TX                                                                                   Off 5th- Saks, Fifth Avenue
                                                                                                Outlet, JCPenney Outlet, 
                                                                                                Rainforest Cafe, Group USA, 
                                                                                                Bed, Bath & Beyond, AMC Theatres,
                                                                                                GameWorks, American 
                                                                                                 Wilderness (4) 
                                                                                                
3. Ontario Mills             Fee          25.0              Built                  1,326,284   
   (3)                                                      1996                                JCPenney Outlet,
   Ontario, CA                                                                                  Burlington Coat Factory, 
                                                                                                Marshall's, Sports
                                                                                                Authority, Dave & Busters,  
                                                                                                Group USA, IWERKS, American  
                                                                                                Wilderness Experience, T.J.Maxx, 
                                                                                                Foozles, Totally for Kids, Bed,  
                                                                                                Bath &  Beyond, Off Rodeo, Mikasa, 
                                                                                                Virgin, GameWorks, Off   
                                                                                                5th-Saks Fifth Avenue Outlet 

SPECIALTY RETAIL CENTERS
-------------------------
 1. Forum Shops at  Ground         (23)  Built     477,584    -
     Caesars, The   Lease                 1992
    Las Vegas, NV   (2050)
 2. Tower Shops,    Space          50.0  Built      59,810    -
     The            Lease                 1996
    Las Vegas, NV   (2051)
 3. Trolley Square  Fee and        90.0 Acquired   223,793    -
    Salt Lake City, Ground                1986
     UT             Lease (24)

<PAGE>
MIXED-USE PROPERTIES
--------------------
 1. Fashion Centre  Fee            21.0  Built     988,517    Lowe's Theatres,
     at Pentagon                          1989        (25)    Macy's,
     City, The                                                Nordstrom
    Arlington, VA
    
 2. New Orleans     Fee and       100.0    Built 1,023,690    Macy's,
     Centre/CNG     Ground                  1988      (26)    Lord & Taylor
     Tower          Lease
    New Orleans, LA (2084)
    
 3. O'Hare          Fee           100.0  Built     496,058    -
     International                        1988        (27)
     Center
    Rosemont, IL
    
 4. Riverway        Fee           100.0 Acquired   818,278    -
    Rosemont, IL                          1991        (28)
    
COMMUNITY SHOPPING CENTERS
--------------------------
 1. Arvada Plaza    Fee          100.0%  Built      96,831    King Soopers
    Arvada, CO                            1966
    
 2. Aurora Plaza    Ground        100.0  Built     150,209    King Soopers,
    Aurora, CO      Lease                 1965                MacFrugel's
                    (2058)                                    Bargains,
                                                              Super Saver
                                                              Cinema
 3. Bloomingdale    Fee           100.0  Built     598,521    Builders Square,
     Court                                1987                T.J. Maxx,
    Bloomingdale,                                             Cineplex Odeon,
     IL                                                       Frank's Nursery,
                                                              Marshalls,
                                                              Office Max, Old
                                                              Navy,
                                                              Service
                                                              Merchandise,
                                                              Wal-Mart, (13)
 4. Boardman Plaza  Fee           100.0  Built     651,181    Burlington Coat
    Youngstown, OH                        1951                Factory,
                                                              Giant Eagle,
                                                              Stein Mart,
                                                              T.J. Maxx,
                                                              Reyers Outlet
                                                              Hills
 5. Bridgeview      Fee           100.0  Built     280,299    Omni, Venture
     Court                                1988
    Bridgeview, IL
    
 6. Brightwood      Fee           100.0  Built      41,893    Revco Drug,
     Plaza                                1965                Safeway
    Indianapolis,
     IN
    
 7. Buffalo Grove   Fee            92.5  Built     134,131    Buffalo Grove
     Towne Center                         1988                Theatres
    Buffalo Grove,
     IL
    
 8. Celina Plaza    Fee and       100.0  Built      32,622    General Cinema
    El Paso, TX     Ground                1978
                    Lease (29)
                    (2027)
<PAGE>
 9. Century Mall    Fee           100.0 Acquired   415,245    Burlington Coat
     (30)                                 1982                Factory,
    Merrillville,                                             Montgomery Ward
     IN
    
10. Charles Towne   Fee           100.0  Built     130,399    Montgomery Ward,
     Square (31)                          1976                Regal Cinema (4)
    Charleston, SC
    
11. Chesapeake      Fee           100.0  Built     305,904    Movies 10, Phar
     Center                               1989                Mor,
    Chesapeake, VA                                            K-Mart, Service
                                                              Merchandise
12. Cobblestone     Fee and        35.0  Built     261,107    Dick's Sporting
     Court          Ground                1993                Goods,
    Victor, NY      Lease (10)                                Kmart, Office
                    (2038)                                    Max
13. Cohoes Commons  Fee and       100.0  Built     262,959    Bryant &
    Rochester, NY   Ground                1984                Stratton
                    Lease (6)                                  Business
                    (2032)                                    Institute,
                                                              Cohoes,
                                                              Xerox (32)
14. Countryside     Fee and       100.0  Built     435,543    Best Buy,
     Plaza          Ground                1977                Builders Square,
    Countryside, IL Lease (10)                                Frank's Nursery,
                    (2058)                                    Old Country
                                                              Buffet,
                                                              Venture, (13)
15. Crystal Court   Fee            35.0  Built     284,816    Cub Foods,
    Crystal Lake,                         1989                Wal-Mart,
     IL                                                       Service
                                                              Merchandise,
                                                              (13)
16. Eastgate        Fee           100.0 Acquired   462,510    Builder's
     Consumer Mall                        1981                Square,
     (30)                                                     Burlington Coat
    Indianapolis,                                             Factory, Cub
     IN                                                       Foods,
                                                              General Cinema
17. Eastland Plaza  Fee           100.0  Built     188,229    Marshalls,
    Tulsa, OK                             1986                Target,
                                                              Toys "R" Us
18. Fairfax Court   Ground         26.3  Built     249,305    Circuit City
    Fairfax, VA     Lease                 1992                Superstore,
                    (2052)                                    Montgomery Ward,
                                                              Today's Man
19. Forest Plaza    Fee           100.0  Built     422,689    Builders Square
    Rockford, IL                          1985                (12), Kohl's,
                                                              Marshalls,
                                                              Factory Card
                                                              Outlet, Office
                                                              Max,
                                                              T.J. Maxx
20. Fox River Plaza Fee           100.0  Built     324,956    Builders Square,
    Elgin, IL                             1985                Venture,
                                                              Service
                                                              Merchandise,
                                                              (13) (13)
21. Gaitway Plaza   Fee            23.3  Built     229,909    Books-A-Million,
    Ocala, FL                             1989                Montgomery Ward,
                                                              Office Depot,
                                                              T.J. Maxx
22. Glen Burnie     Fee           100.0  Built     459,219    Montgomery Ward,
     Mall (30)                            1963                Best Buy, Toys
    Glen Burnie, MD                                           "R" Us, Dick's
                                                              Clothing and
                                                              Sporting Goods
23. Great Lakes     Fee           100.0  Built     163,919    Best Buy,
     Plaza                                1976                Circuit City,
     Cleveland, OH                                            Home Place,
                                                              Michael's
24. Great Northeast Fee            50.0 Acquired   298,242    Sears, Phar Mor
     Plaza                                1989
    Philadelphia,
     PA
<PAGE>    
25. Greenwood Plus  Fee           100.0  Built     226,297    Best Buy, Cinema
    Greenwood, IN                         1979                I-IV,
                                                              Kohl's
26. Griffith Park   Ground        100.0  Built     274,230    General Cinema,
     Plaza          Lease                 1979                Service
    Griffith, IN    (2060)                                    Merchandise,
                                                              Venture
27. Grove at        Fee           100.0  Built     215,591    Lakeland Square
     Lakeland                             1988                10 Theatre,
     Square, The                                              Sports
    Lakeland, FL                                              Authority,
                                                              Wal-Mart
28. Hammond Square  Space         100.0  Built      87,705    Burlington Coat
    Sandy Springs,  Lease                 1974                Factory,
     GA             (2011)                                    Service
                                                              Merchandise
29. Highland Lakes  Fee           100.0  Built     477,324    Bed, Bath &
     Center                               1991                Beyond,
    Orlando, FL                                               Goodings,
                                                              Marshalls,
                                                              Ross Dress for
                                                              Less,
                                                              Movies 12,
                                                              Service
                                                               Merchandise,
                                                              Office Max,
                                                              Target
30. Indian River    Fee            50.0  Built     263,507    HomePlace,
     Commons                              1997                Lowe's,
    Vero Beach, FL                                            Office Max
                                                              Service
                                                              Merchandise
31. Ingram Plaza    Fee           100.0  Built     111,518    _
    San Antonio, TX                       1980
    
32. Keystone        Ground        100.0 Acquired    29,140    _
     Shoppes        Lease                 1997            
    Indianapolis,   (2067)
     IN
    
33. Knoxville       Fee           100.0  Built     180,463    Circuit City,
     Commons                              1987                Office Max, (13)
    Knoxville, TN
    
34. Lake Plaza      Fee           100.0  Built     218,208    Builders Square
    Waukegan, IL                          1986                (11),
                                                              Venture
35. Lake View Plaza Fee           100.0  Built     388,358    Best Buy (33),
    Orland Park, IL                       1986                Dominick's,
                                                              Ultra 3 (33),
                                                              Factory Card
                                                              Outlet,
                                                              Linens-N-Things
                                                              (33),
                                                              Marshalls,
                                                              Pet Care
                                                              Plus (33),
                                                              Service
                                                              Merchandise,
                                                              (13)
36. Lima Center     Fee           100.0  Built     201,154    Regal Cinema,
    Lima, OH                              1978                Hills,
                                                              Service
                                                              Merchandise
37. Lincoln         Fee           100.0  Built     161,337    PetsMart,
     Crossing                             1990                Wal-Mart
    O'Fallon, IL
    
38. Mainland        Fee             (7)  Built     390,986    Sam's Club, Wal-
     Crossing                      80.0   1991                Mart,
    Galveston, TX                                             Hobby Lobby
    
39. Maplewood       Fee           100.0  Built     130,780    Bag `N Save, Big
     Square                               1970                Lots
    Omaha, NE                                                 
<PAGE>    
40. Markland Plaza  Fee           100.0  Built     108,296    Service
    Kokomo, IN                            1974                Merchandise,
                                                              Spiece
41. Martinsville    Space         100.0  Built     102,162    Food Lion,
     Plaza          Lease                 1967                Rose's
    Martinsville,   (2036)
     VA
    
42. Marwood Plaza   Fee           100.0  Built     105,785    Kroger, Revco
    Indianapolis,                         1962                Drug
     IN
    
43. Matteson Plaza  Fee           100.0  Built     275,455    Dominick's,
    Matteson, IL                          1988                Michael's Arts &
                                                              Crafts, Kmart,
                                                              Service
                                                              Merchandise
44. Memorial Plaza  Fee           100.0  Built     129,202    Dunham's
    Sheboygan, WI                         1966                Sporting Goods,
                                                              Marcus Theatre,
                                                              Office Max
                                                              (13)
45. Mounds Mall     Fee           100.0  Built       7,500    Kerasotes
     Cinema                               1974                Theater
    Anderson, IN
    
46. New Castle      Fee           100.0  Built      91,648    Goody's
     Plaza                                1966
    New Castle, IN
    
47. North Ridge     Fee           100.0  Built     323,672    
     Plaza                                1985                Hobby Lobby, The
    Joliet, IL                                                TJX
                                                              Companies(12),
                                                              Service
                                                              Merchandise
48. North Riverside Fee           100.0  Built     119,608    Dominick's
     Park Plaza                           1977
    North
     Riverside, IL
    
49. Northland Plaza Fee and       100.0  Built     205,775    Marshalls,
    Columbus, OH    Ground                1988                Phar-Mor,
                    Lease (6)                                 Service
                    (2085)                                    Merchandise
50. Northwood Plaza Fee           100.0  Built     211,840    Kroger, Target,
    Fort Wayne, IN                        1974                (13)
    
51. Park Plaza      Fee and       100.0  Built     114,458    Wal-Mart (11)
    Hopkinsville,   Ground                1968
     KY             Lease (6)
                    (2039)
52. Plaza at        Fee            35.0  Built     337,966    Toys "R" Us,
     Buckland                             1993                Kids "R" Us,
    Hills, The                                                Service
    Manchester, CT                                            Merchandise,
                                                              Comp USA,
                                                              Linens-N-Thing',
                                                              Filene's
                                                              Basement, (13)
53. Regency Plaza   Fee           100.0  Built     277,521    Sam's Wholesale,
    St. Charles, MO                       1988                Wal-Mart
    
54. Ridgewood Court Fee            35.0  Built     240,843    Home Quarters,
    Jackson, MS                           1993                T.J. Maxx,
                                                              Service
                                                              Merchandise,
                                                              (13)
                                                              
55. Royal Eagle     Fee            35.0  Built     203,140    Kmart,
     Plaza                                1989                Stein Mart
    Coral Springs,
     FL
<PAGE>    
56. Sherwood        Fee           100.0 Acquired   187,000    _
     Gardens (34)                         1997
    Salinas, CA
    
57. St. Charles     Fee           100.0  Built     435,035    Ames, Hechinger,
     Towne Plaza                          1987                Jo Ann Fabrics,
    Waldorf, MD                                               CVS, T.J. Maxx,
                                                              Service
                                                              Merchandise,
                                                              Shoppers Food
                                                              Warehouse
58. Teal Plaza      Fee and       100.0  Built     100,831    Circuit City
    Lafayette, IN   Ground                1962                (4), Hobby-
                    Lease                                     Lobby, The Pep
                    (2007) (6)                                Boys (4)
59. Terrace at The  Fee           100.0  Built     332,980    J.J. Byrons
     Florida Mall                         1989                (11), Marshalls,
    Orlando, FL                                               Service
                                                              Merchandise,
                                                              Target, Waccamaw
60. Tippecanoe      Fee           100.0  Built      94,739    Barnes & Noble
     Plaza                                1974                Bookseller,
    Lafayette, IN                                             Service
                                                              Merchandise
61. University      Fee            60.0  Built     150,548    Best Buy,
     Center                               1980                Michaels,
    South Bend, IN                                            Service
                                                              Merchandise
62. Village Park    Fee            35.0  Built     503,052    Frank's Nursery,
     Plaza                                1990                Gaylan's,
    Westfield, IN                                             Jo-Ann Fabrics,
                                                              Kohl's,
                                                              Marsh, Regal
                                                              Cinemas,
                                                              Wal-Mart
63. Wabash Village  Ground        100.0  Built     124,748    Kmart
    West Lafayette, Lease                 1970
     IN             (2063)
    
64. Washington      Fee             (7)  Built      50,302    Kids "R" Us
     Plaza                         85.0   1976
    Indianapolis,
     IN
    
65. West Ridge      Fee           100.0  Built     237,650    Magic Forest,
     Plaza                                1988                Target,
    Topeka, KS                                                TJ Maxx, Toys
                                                              "R" Us
66. West Town       Fee            23.3  Built     384,832    PetsMart,
     Corners                              1989                Wal-Mart,
    Altamonte                                                 Service
     Springs, FL                                              Merchandise,
                                                              Sports
                                                              Authority, (13)
67. Westland Park   Fee            23.3  Built     163,154    Burlington Coat
     Plaza                                1989                Factory,
    Orange Park, FL                                           PetsMart, Sports
                                                              Authority
68. White Oaks      Fee           100.0  Built     389,063    Cub Foods, Kids
     Plaza                                1986                "R" Us,
    Springfield, IL                                           Kohl's, Office
                                                              Max,
                                                              T.J. Maxx, Toys
                                                              "R" Us
69. Wichita Mall    Ground        100.0  Built     379,461    Cinema III,
     (30)           Lease                 1969                Office Max,
    Wichita, KS     (2022)                                    Montgomery Ward
    
70. Willow Knolls   Fee            35.0  Built     383,230    Kohl's,
     Court                                1990                Phar-Mor,
    Peoria, IL                                                Sam's Wholesale
                                                              Club,
                                                              Willow Knolls
                                                              Theaters 14
71. Wood Plaza      Ground        100.0  Built      94,993    Country General
    Fort Dodge, IA  Lease                 1968
                    (2045)
72. Yards Plaza,    Fee            35.0  Built     273,097    Burlington Coat
     The                                  1990                Factory,
    Chicago, IL                                               Omni Superstore,
                                                              Montgomery Ward
<PAGE>
PROPERTIES UNDER CONSTRUCTION
-----------------------------
 1. Lakeline Plaza  Fee            50.0   (35)     381,000    Linens `N
    Austin, TX                     (14)                       Things, Office
                                                              Max, Old Navy,
                                                              Ross Dress for
                                                              Less, T.J. Maxx,
                                                              Party City, Toys
                                                              "R" Us
 2. Muncie Plaza    Fee           100.0   (36)     195,500    Factory Card
    Muncie, IN                                                Outlet, Kohl's,
                                                              OfficeMax, Shoe
                                                              Carnival,
                                                              T.J. Maxx
 3. Shops at Sunset Fee            75.0   (37)     500,000    Nike Town, AMC
     Place, The                                               Theatres Virgin
    Miami, FL                                                 Megastore,
                                                              Z Gallerie, IMAX
                                                              Theatre, Barnes
                                                              & Noble, Twin
                                                              Palms
</TABLE>
<PAGE>
 (1) The  date  listed  is  the  expiration date of  the  last  renewal  option
     available  to  the  Operating Partnership under the  ground  lease.  In  a
     majority  of  the ground leases, the lessee has either a  right  of  first
     refusal  or the right to purchase the lessor's interest. Unless  otherwise
     indicated, each ground lease listed in this column covers at least 50%  of
     its respective property.
 (2) The  Operating Partnership's interests in some of the Properties  held  as
     joint  venture  interests are subject to preferences on  distributions  in
     favor of other partners.
 (3) This property is managed by a third party.
 (4) Indicates anchor is currently under construction.
 (5) This retailer operates two stores at this property.
 (6) Indicates  ground  lease  covers less than 15%  of  the  acreage  of  this
     property.
 (7) The  Operating  Partnership receives substantially  all  of  the  economic
     benefit of these properties.
 (8) Retailer vacated subsequent to December 31, 1997 and the space was sold to
     Von Maur, which is scheduled to open in the fourth quarter of 1998.
 (9) Indicates two ground leases which taken together, cover less than  50%  of
     the acreage of the property
(10) Indicates  ground  lease  covers less than  50%  of  the  acreage  of  the
     property.
(11) Indicates anchor has closed, but the Operating Partnership still  collects
     rents and/or fees under an agreement
(12) Indicates  this  anchor  is  currently  subleasing  the  space  to   other
     retailers.
(13) Includes an anchor space currently vacant.
(14) Effective  January  30,  1998,  the  Operating  Partnership  acquired   an
     additional 15% interest in Lakeline Mall and Lakeline Plaza.
(15) Indicates ground lease covers all of the property except for parcels owned
     in fee by anchors.
(16) Primarily  retail space with approximately 54,884 square  feet  of  office
     space.
(17) Primarily  retail space with approximately 69,876 square  feet  of  office
     space.
(18) Primarily  retail space with approximately 126,190 square feet  of  office
     space.
(19) Primarily  retail space with approximately 70,991 square  feet  of  office
     space.
(20) Indicates one ground lease covers substantially all of the property and  a
     second ground lease covers the remainder.
(21) Includes  outlots in which the Operating Partnership has an  85%  interest
     and which represent less than 3% of the GLA and total annualized base rent
     for the property.
(22) The  Operating  Partnership  purchased the  management  contract  on  this
     property during 1998.
(23) The  Operating Partnership owns 60% of the original phase of this Property
     and 55% of phase II, which opened in August 1997.
(24) Indicates  a  ground lease covers a pedestrian walkway and steps  at  this
     property.  The Operating Partnership, as ground lessee, has the  right  to
     successive five-year renewal options, subject to specified exceptions.
(25) Primarily  retail space with approximately 167,150 square feet  of  office
     space.
(26) Primarily retail space with 486,723 square feet of office space.
(27) Primarily  office space with approximately 12,800 square  feet  of  retail
     space.
(28) Primarily  office space with approximately 24,300 square  feet  of  retail
     space.
(29) Indicates ground lease covers outparcel.
(30) Effective  December 31, 1997, Eastgate Consumer Mall,  Glen  Burnie  Mall,
     Century Mall and Wichita Mall have been reclassified as community centers.
     These  Properties  are  currently being operated and  marketed  to  tenant
     operations which are typically included in community centers.
(31) The  Operating  Partnership  demolished the previously  existing  regional
     mall,  Charles  Towne  Square, and is in the process  of  rebuilding  this
     community center and a cinema on the land.
(32) Lease was terminated subsequent to December 31, 1997.
(33) Subleased from TJX Companies.
(34) This Property was sold in 1998.
(35) Phase I is scheduled to open during May 1998 and phase II is scheduled  to
     open during November 1998.
(36) This  center is scheduled to open during April 1998, however the OfficeMax
     and T.J. Maxx opened in 1997.
(37) Scheduled to open during October 1998.

<PAGE>
     
     LAND HELD FOR DEVELOPMENT
     
     The Operating Partnership has direct or indirect ownership interests in
nine parcels of land either in preconstruction development or being held for
future development, containing an aggregate of approximately 677 acres located
in eight states, and, through the Management Company, interest in a mortgage on
a parcel of land held for development containing approximately 134 acres.
Management believes that the Operating Partnership's significant base of
commercially zoned land, together with the Operating Partnership's status as a
fully integrated real estate firm, gives it a competitive advantage in future
development activities over other commercial real estate development companies
in its principal markets.

     The following table describes the acreage of the parcels of land either in
preconstruction development or being held for future development in which the
Operating Partnership has an ownership interest, as well as the ownership
percentage of the Operating Partnership's interest in each parcel:

                                            OWNERSHIP
             LOCATION          ACREAGE    INTEREST (1)
         Bowie, MD               93.74        100%
         Concord, NC            187.48         50%
         Duluth, MN              11.17        100%
         Hurst, TX               36.09        100%
         Lafayette, IN           22.87        100%
         Little Rock, AR         97.00         50%
         Mt. Juliet, TN         109.26        100%
         Sanford, FL             77.24        22.5%
         Miami, FL               41.71         60%
                                676.56          

     (1)The Operating Partnership has a direct ownership interest in each
       parcel except Duluth, MN and Mt. Juliet, TN. The Operating Partnership
       has the option to acquire those parcels from the Management Company.

     The Management Company has granted options to the Operating Partnership
(for no additional consideration) to acquire for a period of ten years
(expiring December 2003) the Management Company's interest in the two parcels
of land held for development, indicated in footnote (1) to the above table, at
a price equal to the actual cost incurred to acquire and carry such properties.
The Management Company may not sell its interest in any parcel subject to
option through December 1998 without the consent of the Operating Partnership,
and thereafter, may only sell its interest subject to certain notice and first
purchase rights of the Operating Partnership.

     The Management Company also holds indebtedness secured by 134 acres of
land held for development, Lakeview at Gwinnett ("Lakeview") in Gwinnett
County, Georgia, in which Melvin Simon, Herbert Simon and certain of their
affiliates (the "Simons") hold a 64% partnership interest. In addition, the
Management Company holds unsecured debt owed by the Simons as partners of this
partnership. The Management Company has an option to acquire the Simons'
partnership interests in Lakeview for nominal consideration in the event the
requisite partner consents to such transfers are obtained. The Management
Company is required to fund certain operating expenses and carrying costs of
the partnership that are owed by the Simons as partners thereof. The Management
Company has granted to the Operating Partnership the option to acquire (i) the
Simons' partnership interests and the secured debt or (ii) the property, if the
Management Company forecloses the secured indebtedness, for nominal
consideration plus the amount of all advances and outstanding debt.

<PAGE>

     JOINT VENTURES

     At certain of the Properties held as joint-ventures, the Operating
Partnership and its partners each have rights of first refusal, subject to
certain conditions, to acquire additional ownership in the Property should the
other partner decide to sell its ownership interest. In addition, certain of
the Properties held as joint ventures contain "buy-sell" provisions, which
gives the partners the right to trigger a purchase or sale of ownership
interest amongst the partners.

     MORTGAGE FINANCING ON PROPERTIES


     The following table sets forth certain information regarding the mortgages
and other debt encumbering the Properties. All mortgage and property related
debt is nonrecourse, although certain Unitholders have guaranteed a portion of
the property related debt in the aggregate amount of $583.2 million.

<PAGE>
MORTGAGE AND OTHER DEBT ON PORTFOLIO PROPERTIES
(Dollars in thousands)
<TABLE>
<CAPTION>
                                                                                                       
                                                                                                         
                                                                              Annual                   
                                        Interest            Face Amount        Debt          Maturity
          Property Name                   Rate               @ 12/31/97       Service          Date       
--------------------------------        --------            -----------      ---------       --------    

Consolidated Properties:                                                                                
------------------------                                                                                
Secured Indebtness                                                                                      
                                                                                                       
<S>                                <C>     <C>              <C>         <C>   <C>      <C>   <C>
Anderson Mall                      (1)     6.57%              $  19,000       $  1,248 (2)   9/15/02    
Barton Creek Square                        8.10%                 62,868          5,867       12/30/99   
Battlefield Mall                           7.50%                 49,730          4,765       6/1/03     
Biltmore Square                            7.15%                 27,534          2,795       1/1/01     
Bloomingdale Court                 (3)     8.75%                 29,009          2,538 (2)   12/1/00    
Chesapeake Center                          8.44%                  6,563            554 (2)   5/15/15    
Chesapeake Square                          7.28%                 49,490          4,883       1/1/01     
Cielo Vista Mall - 1               (4)     9.38%                 55,615          5,828       5/1/07     
Cielo Vista Mall - 2                       8.13%                  2,323            189 (2)   7/1/04     
College Mall                       (5)     7.00%                 42,936          3,563       7/1/04     
Columbia Center                            7.62%                 42,867          3,789       3/15/02    
Crossroads Mall                            7.75%                 41,440          3,212 (2)   7/31/02    
Crystal River                              7.72% (6)             16,000          1,235 (2)   1/1/01     
Eastgate Consumer Mall                     6.00% (7)  (8)        22,929          1,376 (2)   12/31/98   
Eastland Mall                              7.22% (9)             30,000          2,166 (2)   3/1/98     
Edison Mall                                6.37% (10) (11)       41,000          2,611 (2)   3/19/98    
Forest Mall                        (1)     6.57%                 12,800            841 (2)   9/15/02    
Forest Plaza                       (3)     8.75%                 16,904          1,479 (2)   12/1/00    
Forest Village Park Mall           (1)     6.57%                 20,600          1,353 (2)   9/15/02    
Forum Phase I - Class A-1                  7.13%                 46,997          3,349 (2)   5/15/04    
Forum Phase I - Class A-2                  6.02% (12) (13)       44,385          2,671 (2)   5/15/04    
Forum Phase II - Class A-1                 7.13%                 43,004          3,064 (2)   5/15/04    
Forum Phase II - Class A-2                 6.02% (12) (13)       40,614          2,444 (2)   5/15/04    
Fox River Plaza                    (3)     8.75%                 12,654          1,107 (2)   12/1/00    
Golden Ring Mall                   (1)     6.57%                 29,750          1,955 (2)   9/15/02    
Great Lakes Mall - 1                       6.74%                 53,410          4,354       3/1/01     
Great Lakes Mall - 2                       7.07%                  8,608            724       3/1/99     
Greenwood Park Mall                (5)     7.00%                 35,960          2,984       7/1/04     
Grove at Lakeland Square, The              8.44%                  3,750            317 (2)   5/15/15    
Gulf View Square                           8.25%                 38,157          3,652       10/1/06    
Highland Lakes Center                      7.22% (9)             14,377          1,038 (2)   3/1/02     
Hutchinson Mall                    (1)     8.44%                 11,523            973 (2)   10/1/02    
Ingram Park Mall - 1                       8.10%                 48,580          4,533       12/1/99    
Ingram Park Mall - 2                       9.63%                  7,000            674 (2)   11/1/99    
Jefferson Valley Mall                      6.27% (14) (15)       50,000          3,134 (2)   1/12/00    
Keystone at the Crossing                   7.85%                 64,772          5,085       7/1/27     
La Plaza Mall                              8.25%                 50,044          4,677       12/30/99   
Lake View Plaza                    (3)     8.75%                 22,169          1,940 (2)   12/1/00    
Lima Mall - 1                              7.12%                 14,377          1,215       3/1/02     
Lima Mall - 2                              7.12%                  4,789            405       3/1/02     
Lincoln Crossing                   (3)     8.75%                    997             87 (2)   12/1/00    
Longview Mall                      (1)     6.57%                 22,100          1,452 (2)   9/15/02    
Mainland Crossing                          7.22% (9)              2,226            161 (2)   3/31/02    
Markland Mall                      (1)     6.57%                 10,000            657 (2)   9/15/02    
Matteson Plaza                     (3)     8.75%                 11,159            976 (2)   12/1/00    
McCain Mall                        (4)     9.38%                 26,059          2,721       5/1/07     
Melbourne Square                           7.42%                 39,841          3,374       2/1/05     
Miami International Mall                   6.91%                 47,009          3,758       12/21/03   
Midland Park Mall                  (1)     6.57%                 22,500          1,478 (2)   9/15/02    
North East Mall                           10.00%                 22,201          2,475       9/1/00     
North Riverside Park Plaza - 1             9.38%                  4,054            452       9/1/02     
North Riverside Park Plaza - 2            10.00%                  3,617            420       9/1/02     
North Towne Square                 (1)     6.57%                 23,500          1,544 (2)   9/15/02    
Northgate Shopping Center                  7.62%                 80,046          7,075       3/15/02    
Orland Square                              7.74% (16) (17)       50,000          3,871 (2)   9/1/01     
Paddock Mall                               8.25%                 30,347          2,905       10/1/06    
Port Charlotte Town Center                 7.28%                 46,102          3,857       1/1/01     
Randall Park Mall                          9.25%                 33,879          4,338       1/1/11     
Regency Plaza                      (3)     8.75%                  1,878            164 (2)   12/1/00    
River Oaks Center                          8.67%                 32,500          2,818 (2)   6/1/02     
Riverway - 1                               6.38% (18) (8)        85,571          5,455 (2)   12/31/98   
<PAGE>
Riverway - 2                               6.38% (18) (8)        45,880          2,925 (2)   12/31/98
Ross Park Mall                             6.14%                 60,000          3,684 (2)   8/15/98    
Shops at Sunset Place, The                 6.97% (19)            23,546          1,641 (2)   6/30/00    
South Park Mall                    (1)     7.25%                 24,748          1,794 (2)   6/15/03    
St. Charles Towne Plaza            (3)     8.75%                 30,742          2,690 (2)   12/1/00    
Sunland Park Mall                  (20)    8.63%                 39,855          3,773       1/1/26     
Tacoma Mall                                7.62%                 93,656          8,278       3/15/02    
Terrace at Florida Mall, The               8.44%                  4,688            396 (2)   5/15/15    
Tippecanoe Mall                    (5)     8.45%                 46,961          4,647       7/1/04     
Towne East Square                  (5)     7.00%                 56,767          4,711       7/1/04     
Treasure Coast Square                      7.42%                 53,953          4,714       1/1/06     
Trolley Square - 1                         5.81%                 19,000          1,104 (2)   7/23/00  (21)
Trolley Square - 2                         7.22% (9)              4,641            335 (2)   7/23/00  (21)
Trolley Square - 3                         7.22% (9)              3,500            253 (2)   7/23/00  (21)
University Park Mall                       7.43%                 59,500          4,421 (2)   10/1/07    
Valle Vista Mall                   (4)     9.38%                 34,514          3,604       5/1/07     
West Ridge Plaza                   (3)     8.75%                  4,612            404 (2)   12/1/00    
White Oaks Mall - 55%/50%                  7.70%                 16,500          1,271 (2)   3/1/98     
White Oaks Plaza                   (3)     8.75%                 12,345          1,080 (2)   12/1/00    
Windsor Park Mall - 1                      8.00%                  5,948            544       6/1/00     
Windsor Park Mall - 2                      8.00%                  8,863            811       5/1/12     
Cross - Collaterized Mortgages     (22)    7.27%                175,000         12,720 (2)   12/19/04   
Cross - Collaterized Mortgages     (22)    6.08% (23) (24)       50,000          3,042 (2)   12/19/04   
                                                             ----------                                 
Total Secured Indebtedness                                  $ 2,705,333                                 
                                                                                                        
Unsecured Indebtness                                                                                    
                                                                                                       
Simon DeBartolo Group, L.P.:                                                                            
Unsecured Revolving Credit                                                                     
  Facility                         (25)    6.56%                952,000         62,490 (2)   9/27/99
Unsecured Notes - 1                        6.88%                250,000         17,188 (26)  11/15/06   
Putable Asset Trust Securities             6.75%                100,000          6,750 (26)  11/15/03   
Medium Term Notes - 1                      7.13%                100,000          7,125 (26)  6/24/05    
Medium Term Notes - 2                      7.13%                180,000         12,825 (26)  9/20/07    
Unsecured Term Loan (Knoxville)            6.47% (27)            70,000          4,528 (2)   9/25/98    
Unsecured Term Loan (Lincolnwood)          6.47% (28)            63,000          4,075 (2)   1/31/99    
Unsecured Notes - 2A                       6.75%                100,000          6,750 (26)  7/15/04    
Unsecured Notes - 2B                       7.00%                150,000         10,500 (26)  7/15/09    
Unsecured Notes - 3                        6.88%                150,000         10,313 (26)  10/27/05   
                                                            -----------                                 
                                                              2,115,000                                 
                                                                                                        
Shopping Center Associates:                                                                             
Unsecured Notes - SCA 1                    6.75%                150,000         10,125 (26)  1/15/04    
Unsecured Notes - SCA 2                    7.63%                110,000          8,388 (26)  5/15/05    
                                                            -----------                                   
                                                                260,000                                   
                                                                                                         
Total Unsecured Indebtedness                                 $2,375,000                                 
                                                            -----------                                   
Total Indebtedness-Consolidated                              $5,080,333 (29)                            
                                                            ===========                                 
<PAGE>                                                                                                        
Joint Venture Properties (30):                                                                          
------------------------------                                                                          
                                                                                                       
Arizona Mills                              7.02% (31) (13)      121,991          8,562 (2)   2/1/02     
Aventura Mall - 1                          7.68% (32)           100,000          7,680 (2)   8/8/98     
Aventura Mall - 2                          9.75% (33)             5,500          1,678       8/8/98     
Aventura Mall - 3                          6.82% (34)            43,766          2,984 (2)   8/8/98     
Avenues, The                               8.36%                 58,408          5,555       5/15/03    
Century III Mall - 1                       6.78%                 66,000          4,475 (2)   7/1/03     
Circle Centre Mall                         6.16% (35) (36)       60,000          3,695 (2)   1/31/04    
Cobblestone Court                          7.22% (37)             6,180            446 (2)   11/30/05   
Coral Square                               7.40%                 53,300          3,944 (2)   12/1/00    
Crystal Court                              7.22% (37)             3,570            258 (2)   11/30/05   
Dadeland Mall                              6.42% (38)           140,000          8,986 (2)   12/10/99   
Fairfax Court                              7.22% (37)            10,320            745 (2)   11/30/05   
Florida Mall, The                          8.65% (39)            75,000          6,488 (2)   12/1/98    
Gaitway Plaza                              7.22% (37)             7,350            531 (2)   11/30/05   
Grapevine Mills                            7.07% (40)           112,096          7,924 (2)   4/25/01    
Great Northeast Plaza                      9.04%                 17,812          1,744       6/1/06     
Indian River Commons                       7.58%                  8,399            637 (41)  11/1/04    
Indian River Mall                          7.58%                 46,602          3,532 (41)  11/1/04    
Lakeland Square                            7.26%                 52,961          4,368       12/22/03   
Lakeline Mall                              7.65%                 73,620          6,300       5/1/07     
Lakeline Plaza - 1                         6.09% (42)            14,000            853 (2)   6/6/02     
Northfield Square                          9.52%                 24,330          2,575       4/1/00     
Ontario Mills - 1                          7.37% (7)  (43)       50,000          3,685 (2)   5/7/02     
Ontario Mills - 2                          7.21% (7)  (44)       20,000          1,442 (2)   5/7/02     
Ontario Mills - 3                          7.46% (19) (44)       50,000          3,730 (2)   5/7/02     
Ontario Mills - 4                          0.00% (45)             4,450              0 (2)   12/28/09   
Palm Beach Mall                            8.21%                 51,360          5,072       12/15/02   
Plaza at Buckland Hills, The               7.22% (37)            17,680          1,276 (2)   11/30/05   
Ridgewood Court                            7.22% (37)             7,980            576 (2)   11/30/05   
Royal Eagle Plaza                          7.22% (37)             7,920            572 (2)   11/30/05   
Seminole Towne Center                      6.88%                 70,500          4,850 (2)   1/1/06     
Smith Haven Mall                           7.86%                115,000          9,039 (2)   6/1/06     
Source, The                                7.07% (40)           108,428          7,665 (2)   7/16/01    
Tower Shops, The                           7.72% (6)             15,755          1,216 (2)   3/13/99    
Village Park Plaza                         7.22% (37)             8,960            647 (2)   11/30/05   
West Town Corners                          7.22% (37)            10,330            746 (2)   11/30/05   
West Town Mall                             6.90%                 76,000          5,244 (2)   5/1/08     
Westchester, The                           8.74%                153,234         14,478       9/1/05     
Westland Park Plaza                        7.22% (37)             4,950            357 (2)   11/30/05   
Willow Knolls Court                        7.22% (37)             6,490            469 (2)   11/30/05   
Yards Plaza, The                           7.22% (37)             8,270            597 (2)   11/30/05   
                                                            -----------                                 
Total Joint Venture Properties                                                                          
   Indebtedness                                              $1,888,512 (46)
                                                            ===========                                 
                                                                                                        
</TABLE>
                                                  
<PAGE>
<TABLE>
<C>   <S>       
                                                                                                            
 (1)  Loans secured by these ten properties are cross-collateralized and cross-defaulted.  The aggregate
        principal amount of the loans is $196,521, with an annual debt service of $13,295, and weighted 
        average interest rate of 6.77%.  The interest rate and maturity date of eight of these loans were 
        reset in October 1997 and all ten  require monthly payments of interest only.
 (2)  Requires monthly payments of interest only.
 (3)  These ten properties are cross-defaulted.
 (4)  On January 31, 1997, the Operating Partnership closed on a restructure of these loans, which included
        repaying the Irving Mall loan, paying $21,000 to remove the contingent interest feature and paying
        down a total of $3,900 on two other Property loans with the same lender.
 (5)  Loans secured by these four properties are cross-collateralized and cross-defaulted.  The aggregate
        principal amount of the loans is $182,624, with an annual debt service of $15,905, and an interest
        rate of  7.0% except for Tippecanoe Mall, which bears interest at 8.45%.  During the term of these
        loans, there is amortization of a portion of the principal amount.
 (6)  LIBOR + 2.000%.
 (7)  LIBOR + 1.000%.
 (8)  LIBOR Capped at 5.000%.
 (9)  LIBOR + 1.500%.
(10)  LIBOR + 0.650%.
(11)  LIBOR Capped at 8.350%.
(12)  LIBOR + 0.300%.
(13)  LIBOR Capped at 11.530%. On January 6, 1998, through an interest rate protection agreement, the
      interest rate was effectively fixed at an all-in-one rate of 6.19%.
(14)  LIBOR + 0.550%.
(15)  LIBOR Capped at 8.700%.
(16)  LIBOR + 0.500%.
(17)  LIBOR Swapped at 7.242%.
(18)  LIBOR + 1.375%.
(19)  LIBOR + 1.250%.
(20)  Lender also participates in a percentage of gross revenues above a 
      specified base.
(21)  July 23, 2000 is the earliest date on which the lender may call the bonds.
(22)  On September 2, 1997, a refinancing was completed of $453 million of 
      commercial mortgage pass through certificates and a $48 million mortgage
      loan, resulting in releases of mortgages encumbering 18 of the Properties.
      The refinancing was funded, in part, with the proceeds of this $225 
      million loan,  which is secured by cross-collateralized mortgages 
      encumbering seven of the Properties (Bay Park Square, Boardman Plaza, 
      Cheltenham Square, De Soto Square, Upper Valley Mall, Washington Square
      and West Ridge Mall).
(23)  LIBOR + 0.365%.
(24)  Minimum LIBOR Cap at 12.553%.
(25)  $1,250,000 unsecured revolving credit facility.  Currently, bears interest at LIBOR + 0.65% and
        provides for different pricing based upon the Operating Partnership's investment grade rating.  As of
        12/31/97 $284,300 was available, after outstanding borrowings and letters of credit.
(26)  Requires semi-annual payments of interest only.
(27)  LIBOR + 0.750%. In March of 1998, the interest rate was reduced to LIBOR + 0.65%.
(28)  LIBOR + 0.750%. In January 1998, through an interest rate protection agreement, the interest rate was
      effectively fixed at 6.14% through maturity.
(29)  Includes minority interest partners' share ($132,824) of total consolidated indebtedness.
(30)  As defined in the accompanying consolidated financial statments, Joint Venture Properties are those
        accounted for using the equity method of accounting.
(31)  LIBOR + 1.300%.
(32)  Bank of Tokyo CD Rate + 0.900%.
(33)  PRIME + 1.250%.
(34)  LIBOR + 1.100%.
(35)  LIBOR + 0.440%.
(36)  LIBOR Capped at 8.810%.
(37)  Rate is fixed at 7.22% through December 1998 and thereafter the rate is the greater of 7.22% or 2.0%
        over the then current yield of a six month treasury bill selected by the lender.
(38)  LIBOR + 0.700%.
(39)  Commercial Paper rate + 0.750%.
(40)  LIBOR + 1.350%.
(41)  Loans require monthly interest payments only until they begin amortizing November, 2000.
(42)  LIBOR + 0.375%.
(43)  LIBOR Swapped at 6.370%.
(44)  LIBOR Swapped at 6.210%.
(45)  Beginning January 2000, this note will bear interest at 6.00%.
(46)  Includes outside partners' share ($1,117,736) of indebtedness.
</TABLE>
<PAGE>
ITEM 3. LEGAL PROCEEDINGS

     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., a 99%-owned subsidiary of the
Company, and DPMI, and the plaintiffs are 27 former employees of the
defendants. In the complaint, the plaintiffs allege that they were recipients
of deferred stock grants under the 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 assert that the
defendants' refusal to issue them approximately 661,000 shares of DRC common
stock, which is equivalent to approximately 450,000 shares of common stock of
the Company computed at the 0.68 Exchange Ratio used in the DRC Merger,
constitutes a breach of contract and a breach of the implied covenant of good
faith and fair dealing under Ohio law. Plaintiffs seek 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 complaint
was served on the defendants on October 28, 1996. The plaintiffs and the
Company each filed motions for summary judgment. On October 31, 1997, the Court
entered a judgment in favor of the Company granting the Company's motion for
summary judgment. The plaintiffs have appealed this judgment and the appeal is
pending. While it is difficult for the Company to predict the ultimate outcome
of this action, based on the information known to the Company to date, it is
not expected that this action will have a material adverse effect on the
Company.

     Roel Vento et al v. Tom Taylor et al. An affiliate of the Company 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
$7.8 million has been entered against all defendants. This judgment includes
approximately $6.5 million of punitive damages and is based upon a jury's
findings on four separate theories of liability including fraud, intentional
infliction of emotional distress, tortuous 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. The Company is
seeking to overturn the award and has appealed the verdict. The Company's
appeal is pending. Although the Company is optimistic that it may be able to
reverse or reduce the verdict, there can be no assurance thereof. Management,
based upon the advice of counsel, believes that the ultimate outcome of this
action will not have a material adverse effect on the Company.

     Browning-Ferris Industries of Illinois, et al. v. Richard Ter Maat, et al.
v. Craig J. Cain, et al., Case No. 92 C 20259. On April 4, 1994, a third-party
action was filed by Richard Ter Maat and five other parties (collectively
referred to as "Third-Party Plaintiffs") named as defendants in the above
referenced litigation, which had begun in 1992, against Machesney Park
Associates (the "Affiliate") and approximately 74 other parties (collectively
referred to as "Third-Party Defendants"). That third-party action alleged
generally that the Third-Party Defendants are liable under the Comprehensive
Environmental response, Compensation and Liability Act of 1980, 42 U.S.C.
section 9601 et seq., and under Illinois statutory and common law for certain
response costs expended and to be expended by Third-Party Plaintiffs in
connection with the claims asserted by Browning-Ferris Industries of Illinois
and approximately 20 other parties (collectively referred to as "Plaintiffs")
against the Third-Party Plaintiffs. In the original lawsuit, Plaintiffs sought
reimbursement of response costs they allegedly incurred and will incur in
response to the release or threat of release of hazardous substances from the
M.I.G./Dewane Landfill located one mile east of the City of Belvidere, in Boone
County, Illinois (the "Site"), and declaratory judgment on liability against
Defendants for such response costs. To date, the Plaintiffs have alleged
response costs in excess of $5.0 million in connection with the Site. In
February 1996, the Affiliate settled this pending litigation by the payment
of $40,000 to the original Plaintiffs. Pursuant to that settlement, the
Company agreed that it would take part in a nonbinding arbitration or mediation
at sometime in the future to allocate expenses incurred in remediating the
Site. No such arbitration or mediation has yet been instituted. In addition,
the Company has made a demand upon its insurer for indemnification with respect
to the claims asserted against the Company in this matter. Management, based
upon the advice of counsel, believes that the ultimate outcome of this action
will not have a material adverse effect on the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.
                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
       MATTERS

     MARKET INFORMATION
     
     The Company's common stock trades on the New York Stock Exchange ("NYSE")
under the symbol "SPG". The quarterly price range for the shares on the NYSE
and the distributions declared per share for each quarter in the last two
fiscal years are shown below:
                                                     Declared
                    High        Low       Close    Distribution
                  ---------  ---------  ---------  -------------
        1996                                             
     -----------                                         
     1st Quarter   24 5/8     21 1/8     23 1/8       $0.4925
     2nd Quarter   24 3/4     22 1/8     24 1/2       $0.4925
     3rd Quarter   25 3/4     22 7/8     25 1/2       $0.1515 (1)
     4th Quarter     31       25 3/8       31         $0.4925

        1997                                             
     -----------                                         
     1st Quarter   32 3/4     28 3/8     30 1/4       $0.4925
     2nd Quarter     32       27 7/8       32         $0.5050
     3rd Quarter   34 3/8       29         33         $0.5050
     4th Quarter  33 15/16    28 7/8    32 11/16      $0.5050

     (1) Represents a distribution declared in the third quarter of 1996
       related to the DRC Merger, designated to align the time periods of
       distribution payments of the merged companies. The current annual
       distribution rate is $2.02 per share.

     There is no established public trading market for the Company's Class B
common stock or Class C common stock. Distributions per share of the Class B
and Class C common stock were identical to those for the Company's common
stock.

     HOLDERS
     
     The number of holders of record of the shares of common stock was 2,838 as
of March 6, 1998. The Class B common stock is held entirely by a voting trust
to which the Simons are parties and are exchangeable on a one-for-one basis
into common stock. The Class C common stock is held entirely by The Edward J.
DeBartolo Corporation and are also exchangeable on a one-for-one basis into
common stock.

     DISTRIBUTIONS
     
     The Company qualifies as a REIT under the Code. To maintain its status as
a REIT, the Company is required each year to distribute to its shareholders at
least 95% of its taxable income after certain adjustments.

     Future distributions paid by the Company will be at the discretion of the
Board of Directors and will depend on the actual cash flow of the Company, its
financial condition, capital requirements, the annual REIT distribution
requirements and such other factors as the Board of Directors of the Company
deem relevant.

     The Company has an Automatic Dividend Reinvestment Plan (the "Plan") which
allows shareholders to acquire additional shares of common stock by
automatically reinvesting cash dividends. Common stock is acquired pursuant to
the Plan at a price equal to the prevailing market price of such common stock,
without payment of any brokerage commission or service charge. Shareholders who
do not participate in the Plan continue to receive cash dividends, as declared.

     UNREGISTERED SALES OF EQUITY SECURITIES

     The Company did not issue any equity securities that were not required to
be registered under the Securities Act of 1933, as amended (the "Act") during
the fourth quarter of 1997, except as follows: On December 5, 1997, the Company
issued 1,534,330 shares of common stock to an institutional investor in
connection with a property acquisition. The foregoing transaction was exempt
from registration under the Act in reliance on Section 4 (2). 
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

     The following table sets forth selected consolidated financial data for
the Company and combined historical financial data of Simon Property Group (the
"Predecessor"). The financial data should be read in conjunction with the
financial statements and notes thereto and with Management's Discussion and
Analysis of Financial Condition and Results of Operations.

     Other data management believes is important in understanding trends in the
Company's business is also included in the table.
<TABLE>
<CAPTION>
                                                     THE COMPANY                            PREDECESSOR           
                            ------------------------------------------------------------    -----------           
                                                                               DECEMBER 20       
                                                                               TO DECEMBER   JANUARY 1
                                                                                   31,      TO DECEMBER
                                    FOR THE YEAR ENDED DECEMBER 31,                             19,
                            ------------------------------------------------   ----------   -----------
                             1997(1)      1996(1)      1995(1)       1994         1993         1993
                           -----------  -----------  -----------   ----------   ----------   ----------
OPERATING DATA:                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                        <C>           <C>           <C>          <C>            <C>         <C>
Total revenue               $1,054,167     $747,704     $553,657     $473,676      $18,424     $405,869
Income of the Operating                                                                                
Partnership before                                                                                     
extraordinary items            203,133      134,663      101,505       60,308        8,707        6,912
Net income (loss) available                                                                            
to common shareholders                                                                                 
                              $107,989      $72,561      $57,781      $23,377    $(11,366)      $33,101
                                                                                                       
BASIC EARNINGS PER COMMON                                                                              
SHARE (2):
Income before extraordinary                                                                            
items                            $1.08        $1.02        $1.08        $0.71        $0.11          N/A
Extraordinary items                 --       (0.03)       (0.04)       (0.21)       (0.39)          N/A
                           -----------  -----------  -----------   ----------   ----------             
Net income (loss)                $1.08        $0.99        $1.04        $0.50      $(0.28)          N/A
Weighted average shares                                                                                
outstanding                     99,920       73,586       55,312       47,012       40,950          N/A
DILUTED EARNINGS PER COMMON                                                                            
SHARE (2):
Income before extraordinary      $1.08        $1.01        $1.08        $0.71        $0.11          N/A
items
Extraordinary items                 --       (0.03)       (0.04)       (0.21)       (0.39)          N/A
                           -----------  -----------  -----------   ----------   ----------             
Net income (loss)                $1.08        $0.98        $1.04        $0.50      $(0.28)          N/A
Diluted weighted average                                                                               
shares outstanding             100,304       73,721       55,422       47,214       40,957          N/A
                                                                                                       
DISTRIBUTIONS PER COMMON                                                                               
SHARE (3)                        $2.01        $1.63        $1.97        $1.90            _          N/A
                                                                                                       
BALANCE SHEET DATA:                                                                                    
Cash and cash equivalents     $109,699      $64,309      $62,721     $105,139     $110,625          N/A
Total assets                 7,662,667    5,895,910    2,556,436    2,316,860    1,793,654          N/A
Mortgages and other                                                                                    
indebtedness                 5,077,990    3,681,984    1,980,759    1,938,091    1,455,884          N/A
Shareholders' equity        $1,556,862   $1,304,891     $232,946      $57,307      $29,521          N/A
                                                                                                       
OTHER DATA:                                                                                            
Cash flow provided by (used                                                                            
in):
Operating activities          $370,907     $236,464     $194,336     $128,023          N/A          N/A
Investing activities       (1,243,804)    (199,742)    (222,679)    (266,772)          N/A          N/A
Financing activities           918,287     (35,134)     (14,075)      133,263          N/A          N/A
Funds from Operations (FFO)                                                                            
of the Operating                                                                                       
Partnership (4)               $415,128     $281,495     $197,909     $167,761          N/A          N/A
FFO allocable to Company      $258,049     $172,468     $118,376      $92,604          N/A          N/A

NOTES
(1) Note 3 to the accompanying financial statements describes the DRC Merger,
    which occurred on August 9, 1996, and the 1997, 1996, and 1995 real estate
    acquisitions and development.
(2) Per share data is reflected only for the Company, because the historical
    combined financial statements of the Predecessor are a combined
    presentation of partnerships and corporations.
(3) Represents distributions declared per period. A distribution of $0.1515
    per share was declared on August 9, 1996, in connection with the DRC
    Merger, designated to align the time periods of distributions of the
    merged companies. The current annual distribution rate is $2.02 per share.
(4) Please refer to Management's Discussion and Analysis of Financial
    Condition and Results of Operations for a definition of Funds from
    Operations.
</TABLE>
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
 OF OPERATIONS

     The following discussion should be read in conjunction with the Selected
Financial Data, and all of the financial statements and notes thereto included
elsewhere herein. Certain statements made in this report may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Operating Partnership to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such 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; and environmental/safety requirements.

     OVERVIEW

     The financial results reported reflect the merger completed on August 9,
1996 (the "DRC Merger") of Simon Property Group, Inc. and DeBartolo Realty
Corporation ("DRC"), in accordance with the purchase method of accounting,
valued at $3.0 billion. The DRC Merger resulted in the addition of 49 regional
malls, 11 community centers and 1 mixed-use property. These properties included
47,052,267 square feet of retail space gross leasable area ("GLA") and 558,636
of office GLA. Of these properties, 40 regional malls, 10 community centers and
the mixed-use property are being accounted for using the consolidated method of
accounting. The remaining properties are being accounted for using the equity
method of accounting.

     On September 29, 1997, the Operating Partnership completed its cash tender
offer for all of the outstanding shares of beneficial interests of The Retail
Property Trust ("RPT"). RPT owned 98.8% of Shopping Center Associates ("SCA"),
which owned or had interests in twelve regional malls and one community center,
comprising approximately twelve million square feet of GLA in eight states.
Following the completion of the tender offer, the SCA portfolio was
restructured. The Operating Partnership exchanged its 50% interests in two SCA
properties to a third party for similar interests in two other SCA properties,
in which it had 50% interests, with the result that SCA now owns interests in a
total of eleven properties. Effective November 30, 1997, the Operating
Partnership also acquired the remaining 50% ownership interest in another of
the SCA properties. In addition, an affiliate of the Operating Partnership
acquired the remaining 1.2% interest in SCA. At the completion of these
transactions, the Operating Partnership directly or indirectly now owns 100% of
ten of the eleven SCA properties, and 50% of the remaining property.

     In addition, the Operating Partnership acquired ownership interests in or
commenced operations of several other Properties throughout the comparative
periods and, as a result, increased the number of Properties it accounts for
using the consolidated method of accounting (the "Property Transactions"). The
following is a listing of such transactions: On February 23, 1995, the
Operating Partnership acquired an additional 50% interest in White Oaks Mall,
increasing its ownership to 77%. On August 1, 1995, the Operating Partnership
purchased the remaining 50% ownership in Crossroads Mall. On September 25,
1995, the Operating Partnership acquired the remaining 55% ownership in
Knoxville Center. On April 11, 1996, the Operating Partnership acquired the
remaining 50% economic ownership interest in Ross Park Mall. On July 31, 1996,
the Operating Partnership opened the wholly-owned Cottonwood Mall in
Albuquerque, New Mexico. On August 29, 1997, the Operating Partnership opened
the 55%-owned, $89 million phase II expansion of The Forum Shops at Caesar's.
(See "Liquidity and Capital Resources" for additional information regarding
these transactions.)

RESULTS OF OPERATIONS
     
Year Ended December 31, 1997 vs. Year Ended December 31, 1996
     
     Total revenue increased $306.5 million or 41.0% in 1997 as compared to
1996. This increase is primarily the result of the DRC Merger ($234.1 million),
the RPT acquisition ($30.6 million) and the Property Transactions ($28.4
million). Excluding these transactions, total revenues increased $13.4 million,
which includes a $15.4 million increase in minimum rent and a $7.1 million
increase in tenant reimbursements, partially offset by a $7.5 million decrease
in other income. The $15.4 million increase in minimum rents results from
increased occupancy levels, the replacement of expiring tenant leases with
renewal leases at higher minimum base rents, and a $4.4 million increase in
<PAGE>
rents from tenants operating under license agreements. The $7.1 million
increase in tenant reimbursements is partially offset by a net increase in
recoverable expenses. The $7.5 million decrease in other income is primarily
the result of decreases in lease settlement income ($3.0 million), interest
income ($1.3 million) and gains from sales of peripheral properties ($1.7
million).

     Total operating expenses increased $160.9 million, or 38.7%, in 1997 as
compared to 1996. This increase is primarily the result of the DRC Merger
($113.5 million), the RPT acquisition ($15.9 million), the Property
Transactions ($17.3 million), and the increase in depreciation and amortization
($10.1 million), primarily due to an increase in depreciable real estate
realized through renovation and expansion activities.

     Interest expense increased $85.6 million, or 42.4% in 1997 as compared to
1996. This increase is primarily as a result of the DRC Merger ($61.1 million),
the RPT acquisition ($13.9 million) and the Property Transactions ($9.1
million).

     The $0.1 million gain from extraordinary items in 1997 is the net result
of gains realized on the forgiveness of debt ($31.1 million) and the write-off
of net unamortized debt premiums ($8.4 million), partially offset by the
acquisition of the contingent interest feature on four loans ($21.0 million)
and prepayment penalties and write-offs of mortgage costs associated with early
extinguishments of debt ($18.4 million). The $3.5 million extraordinary loss in
1996 is the result of write-offs of mortgage costs associated with early
extinguishments of debt.

     Income (loss) from unconsolidated entities increased from $9.5 million in
1996 to $19.2 million in 1997, resulting from an increase in the Operating
Partnership's share of M.S. Management Associates Inc.'s (the "Management
Company") income ($5.0 million) and an increase in its share of income from
partnerships and joint ventures ($4.6 million). The increase in Management
Company income is primarily the result of income realized through marketing
initiatives ($2.0 million) and the Operating Partnership's share of the
Management Company's gains on sales of peripheral property ($1.9 million). The
increase in the Operating Partnership's share of income from partnerships and
joint ventures is primarily the result of the DRC Merger ($4.9 million), the
RPT acquisition ($3.2 million), and the nonconsolidated joint-venture
Properties acquired or commencing operations during 1997 ($5.0 million),
partially offset by the increase in the amortization of the excess of the
Operating Partnership's investment over its share of the equity in the
underlying net assets of unconsolidated joint-venture Properties ($8.8
million).

     Income of the Operating Partnership was $203.2 million in 1997, as
compared to $131.1 million in 1996, reflecting an increase of $72.0 million,
for the reasons discussed above, and was allocated to the Company based on the
Company's preferred unit preference and ownership interest in the Operating
Partnership during the period.

     Preferred distributions increased by $16.6 million to $29.2 million in
1997 as a result of the Company's issuance of $200 million of 8 3/4% Series B
cumulative redeemable preferred stock on September 27, 1996 and $150 million of
7.89% Series C Cumulative Step-Up Premium RateSM Preferred Stock on July 9,
1997, partially offset by a reduction in preferred distributions ($2.0 million)
resulting from the conversion of the $100 million 8 1/8% Series A convertible
preferred stock into 3,809,523 shares of common stock on November 11, 1997.

Year Ended December 31, 1996 vs. Year Ended December 31, 1995
     
     Total revenue increased $194.0 million, or 35.0%, in 1996 as compared to
1995. Of this increase, $155.7 million and $37.7 million are attributable to
the DRC Merger and the Property Transactions, respectively. The remaining
increase includes net increases in minimum rent, lease settlements and
miscellaneous income of $9.3 million, $1.8 million and $2.3 million,
respectively, partially offset by a net decrease in tenant reimbursements of
$11.8 million. The minimum rent increase results from increases of $1.50 and
$0.36 in average base minimum rents per square foot for regional mall stores
and community shopping centers, respectively. Regional mall store leases
executed during 1996 were $4.86 per square foot greater than leases expiring;
community shopping center leases were $2.02 greater.
     Total operating expenses increased $113.7 million, or 37.6%, in 1996 as
compared to 1995. Of this increase, $85.1 million and $18.6 million are the
result of the DRC Merger (including $7.2 million of integration costs) and the
Property Transactions, respectively. The remaining $10.0 million increase is
primarily the result of a net increase in depreciation and amortization ($8.9
million).
     Interest expense increased $52.0 million, or 34.6%, to $202.2 million for
1996 as compared to $150.2 million for 1995. Of this increase, $41.1 million
and $15.4 million are attributable to the DRC Merger and the Property
Transactions, respectively. In addition, the Operating Partnership realized
incremental interest expenses in 1996 related to borrowings used to acquire
additional ownership interests in and/or make equity investments in
<PAGE>
unconsolidated joint venture properties of $4.9 million. Offsetting these
increases were interest savings realized as a result of restructuring the
Operating Partnership's credit facilities, from the proceeds of the Company's
6,000,000 share common stock offering on April 19, 1995, and from the proceeds
of the Series A preferred stock offering and a portion ($34.4 million) of the
proceeds of the Series B preferred stock offering, which were used to pay down
debt (described under "Financing and Debt").
     Income (loss) from unconsolidated entities increased from $1.4 million in
1995 to $9.5 million in 1996, primarily resulting from an increase in the
Operating Partnership's share of the Management Company income ($9.2 million),
partially offset by a decrease in its share of income from partnerships and
joint ventures ($1.1 million). The increase in Management Company income is
primarily the result of the DRC Merger ($4.4 million) and the Management
Company's losses in 1995 related to the settlement of a mortgage receivable
($3.9 million) and the liquidation of a partnership investment ($1.0 million).
     Extraordinary items of $3.5 million in 1996 and $3.3 million in 1995
result from write-offs of mortgage costs associated with early extinguishments
of debt.

     Income of the Operating Partnership increased from $98.2 million in 1995
to $131.1 million in 1996, an increase of $32.9 million, for the reasons
discussed above, and was allocated to the Company based on the Company's
ownership interest during the period.
     Preferred dividends increased by $11.2 million in 1996 as a result of the
Company's issuance of $100 million of
8 1/8% Series A convertible preferred stock on October 27, 1995, and $200
million of 8 3/4% Series B cumulative redeemable preferred stock on September
27, 1996.

     LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 1997, the Operating Partnership's balance of
unrestricted cash and cash equivalents was $109.7 million. In addition to its
cash balance, the Operating Partnership has a $1.25 billion unsecured revolving
credit facility (the "Credit Facility") which had $284.3 million available
after outstanding borrowings and letters of credit at December 31, 1997. The
Company and the Operating Partnership also have access to public equity and
debt markets. The Company has an equity shelf registration statement currently
effective, under which $950 million in equity securities may be issued. The
Operating Partnership has a debt shelf registration statement currently
effective, under which $850 million in debt securities may be issued.

     Management anticipates that cash generated from operating performance will
provide the necessary funds on a short- and long-term basis for its 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: (i) excess cash generated from operating performance; (ii)
working capital reserves; (iii) additional debt financing; and (iv) additional
equity raised in the public markets.

     Sensitivity Analysis. The Operating Partnership's future earnings, cash
flows and fair values relating to financial instruments is primarily dependent
upon prevalent market rates of interest, such as LIBOR. Based upon consolidated
indebtedness and interest rates at December 31, 1997, a 1% increase in the
market rates of interest would decrease future earnings and cash flows by
approximately $14 million, and would decrease the fair value of debt by
approximately $505 million. A 1% decrease in the market rates of interest would
increase future earnings and cash flows by approximately $14 million, and would
increase the fair value of debt by approximately $683 million.
     
     Financing and Debt
     
     At December 31, 1997, the Operating Partnership had consolidated debt of
$5,078.0 million, of which $3,467.6 million is fixed-rate debt bearing interest
at a weighted average rate of 7.4% and $1,610.4 million is variable-rate debt
bearing interest at a weighted average rate of 6.4%. As of December 31, 1997,
the Operating Partnership had interest rate protection agreements related to
$430.4 million of consolidated variable-rate debt. In addition, swap
arrangements on an additional $148 million of consolidated variable-rate debt
were obtained in January of 1998. The Operating Partnership's hedging activity
as a result of these interest rate protection agreements resulted in net
interest savings of $1.6 million for the year ended December 31, 1997. This did
not materially impact the Operating Partnership's weighted average borrowing
rates.
<PAGE>
     Scheduled principal payments of consolidated mortgage indebtedness over
the next five years is $2,638 million, with $2,442 million thereafter. The
Company's ratio of consolidated debt-to-market capitalization was 46.0% and
41.5% at December 31, 1997 and 1996, respectively.

The following summarizes significant financing and refinancing transactions
completed in 1997:

     Secured Indebtedness. On January 31, 1997, the Operating Partnership
completed a refinancing transaction involving debt on four wholly-owned
Properties. The transaction consisted of the payoff of one loan totaling $43.4
million, a restatement of the interest rate on the three remaining loans, the
acquisition of the contingent interest feature on all four loans for $21.0
million, and $3.9 million of principal reductions on two additional loans. This
transaction, which was funded using the Credit Facility, resulted in an
extraordinary loss of $23.2 million, including the write-off of deferred
mortgage costs of $2.2 million.

     On May 15, 1997, the Operating Partnership refinanced approximately $140
million in existing debt on The Forum Shops at Caesar's. The new debt consists
of three classes of notes totaling $180 million, with $90 million bearing
interest at 7.125% and the other $90 million bearing interest at LIBOR plus
0.30%, all of which will mature on May 15, 2004. Approximately $40 million of
the borrowings were placed in escrow to pay for construction costs required in
connection with the development of the expansion of this project, which opened
on August 29, 1997. As of December 31, 1997, $8.6 million remains in escrow.

     On June 5, 1997, the Operating Partnership closed a $115 million
construction loan for The Shops at Sunset Place. The loan initially bears
interest at LIBOR plus 1.25% and matures on June 30, 2000, with two one-year
extensions available.

     On September 2, 1997, the Operating Partnership completed a refinancing of
$453 million of commercial mortgage pass through certificates and a $48 million
mortgage loan, resulting in releases of mortgages encumbering 18 of the
Properties. The Operating Partnership funded this refinancing with the proceeds
of a $225 million secured loan and borrowings of $294 million under the Credit
Facility, which were later reduced with the proceeds from the sale of $180
million of notes issued on September 10, 1997, as described below.
Subsequently, on December 22, 1997, the Operating Partnership retired the $225
million secured loan with the net proceeds from a $225 million series of
multiclass mortgage pass-through certificates. This new facility includes six
classes of certificates cross-collaterallized by the same seven Properties as
the original $225 million secured loan and matures on December 19, 2004. Five
of the six classes covering $175 million bear fixed interest rates ranging from
6.716% to 8.233%, with the remaining $50 million class bearing interest at
LIBOR plus 0.365%.

     On September 4, 1997, the Operating Partnership transferred ownership of
one Property and paid $6.6 million to its lender, fully satisfying the
property's mortgage note payable of $42 million. This property no longer met
the Operating Partnership's criteria for its ongoing strategic plan. The
Operating Partnership recognized a gain on this transaction of approximately
$31.1 million in the third quarter of 1997.

     Credit Facility. During 1997, the Operating Partnership obtained several
improvements to its Credit Facility. The Credit Facility agreement was amended
to increase the borrowing limit to $1.25 billion and reduce the interest rate
from LIBOR plus 0.90% to LIBOR plus 0.65%. In addition, the Credit Facility's
competitive bid feature, which has further reduced interest costs, was
increased from $150 million to $625 million.

     Medium Term Notes. On May 15, 1997, the Operating Partnership established
a Medium-Term Note ("MTN") program. On June 24, 1997, the Operating Partnership
completed the sale of $100 million of notes under the MTN program. The notes
sold bear interest at 7.125% and have a stated maturity of June 24, 2005. The
net proceeds of this sale were used primarily to pay down the Credit Facility.
On September 10, 1997, the Operating Partnership issued an additional $180
million principal amount of notes under its MTN program, which mature on
September 20, 2007 and bear interest at 7.125% per annum. The Operating
Partnership used the net proceeds of this offering to pay down the borrowings
made under the Credit Facility.

     Equity Financings. On July 9, 1997 the Company sold 3,000,000 shares of
7.89% Series C Cumulative Step-Up Premium RateSM Preferred Stock (the "Series C
Preferred Shares") in a public offering at $50.00 per share. Beginning October
1, 2012, the rate increases to 9.89% per annum. The Company intends to redeem
the Series C Preferred Shares prior to October 1, 2012. The Company contributed
the net proceeds of this offering of approximately $146 million to the
Operating Partnership in exchange for preferred units. The Operating
Partnership used the net proceeds for the purchase of additional ownership
interest in West Town Mall, to pay down the Credit Facility and for general
working capital purposes.
<PAGE>
     During 1997, the Company and the Operating Partnership issued 8,051,924
additional shares of common stock and 876,712 additional Units, respectively,
in public and private offerings, at prices ranging from $30.09 to $33.25 per
share, and generating net proceeds of approximately $286 million. The proceeds
of such offerings were used primarily to acquire additional ownership interests
in Properties and to repay existing indebtedness.

     Unsecured Notes. On July 17, 1997, the Operating Partnership completed a
$250 million public offering, of two tranches of its seven-year and twelve-year
non-convertible senior unsecured debt securities. The first tranche was for
$100 million at 6 3/4% with a maturity of July 15, 2004. The second tranche was
for $150 million at 7% with a maturity of July 15, 2009. The notes pay interest
semi-annually, and contain covenants relating to minimum leverage, EBITDA and
unencumbered EBITDA ratios.

     On October 15, 1997, the SEC declared effective the Operating
Partnership's registration statement, which provides for the offering, from
time to time, of up to $1 billion aggregate public offering price of
nonconvertible investment grade unsecured debt securities of the Operating
Partnership. The net proceeds of such offerings may be used to fund property
acquisition or development activity, retire existing debt or for any other
purpose deemed appropriate by the Operating Partnership. Subsequently, on
October 22, 1997, the Operating Partnership completed the sale of $150 million
of its eight-year non-convertible senior unsecured debt securities under this
new $1 billion debt shelf registration. The notes bear interest at 6 7/8%, and
mature on October 27, 2005. The notes pay interest semi-annually, and contain
covenants relating to minimum leverage, EBITDA and unencumbered EBITDA ratios.
The Operating Partnership used $114.8 million of the net proceeds of
approximately $147 million, along with an escrow refund of approximately $4
million to retire existing mortgages on Miller Hill Mall, Muncie Mall, and
Towne West Square, with the remaining proceeds going to reduce the amount
outstanding on the Credit Facility.

     Other. During 1997, in connection with the RPT acquisition, the Operating
Partnership assumed consolidated mortgages of $123.5 million, unsecured debt
totaling $275.0 million and a pro-rata share of joint venture mortgage
indebtedness of $76.8 million.

     Acquisitions and Investment
     Management continues to actively review and evaluate a number of
individual property and portfolio acquisition opportunities. Management
believes that funds on hand, 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. No assurance can be given that the
Company 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.

     On June 16, 1997, the Operating Partnership purchased 1,408,450 shares of
common stock of Chelsea GCA Realty, Inc. ("Chelsea"), a publicly traded REIT,
for approximately $50 million using borrowings from the Credit Facility. The
shares purchased represent approximately 9.2% of Chelsea's outstanding common
stock, and had a market value of $53.8 million at December 31, 1997. In
connection with this transaction the Operating Partnership and Chelsea have
formed a strategic alliance to develop and acquire manufacturer's outlet
shopping centers with 500,000 square feet or more of GLA in the United States.

     On July 10, 1997, the Operating Partnership acquired an additional 48%
interest in West Town Mall in Knoxville, Tennessee for $67.4 million and 35,598
Units valued at approximately $1.1 million. This transaction increased the
Operating Partnership's ownership of West Town Mall to 50%.

     On August 8, 1997, a subsidiary of the Operating Partnership acquired a
50% interest in a trust that owns Dadeland Mall, a 1.4 million square-foot
super-regional mall in Miami, Florida for approximately $128 million. A portion
of the purchase price was paid in the form of 658,707 shares of the Company's
common stock, valued at approximately $20 million. The remaining portion of the
purchase price was financed using borrowings from the Credit Facility.

     As described previously, during 1997 the Operating Partnership completed
the purchase of RPT and its subsidiary SCA, which owned or had interests in
twelve regional malls and one community center, comprising approximately twelve
million square feet of GLA in eight states. The Operating Partnership exchanged
its 50% interests in two SCA properties to a third party for similar interests
in two other SCA properties, in which it had 50% interests, with the result
that SCA now owns interests in a total of eleven properties. Effective November
30, 1997, the Operating Partnership also acquired the remaining 50% ownership
interest in another of the SCA properties. The Operating Partnership now owns
100% of ten of the eleven SCA properties acquired, and a noncontrolling 50%
interest in the remaining property. The total cost for the acquisition of RPT
and related transactions is estimated at $1.3 billion, including shares of
<PAGE>
common stock valued at approximately $50 million, Units valued at approximately
$25.3 million, the assumption of $398.5 million of consolidated indebtedness
and the Operating Partnership's $76.8 million pro rata share of joint venture
indebtedness.

     On December 29, 1997, the Operating Partnership formed a joint venture
partnership with The Macerich Company ("Macerich") to acquire a portfolio of
twelve regional malls comprising approximately 10.7 million square feet of GLA.
This transaction closed on February 27, 1998 at a total purchase price of
$974.5 million, including the assumption of $485.0 million of indebtedness. The
Operating Partnership and Macerich were each responsible for one half of the
purchase price, including indebtedness assumed and each assumed leasing and
management responsibilities for six of the regional malls. The Operating
Partnership funded its share of the cash due at closing with a new six-month
$242.0 million unsecured loan which bears interest at 6.42%. The Operating
Partnership owns 50% of this joint venture.

     On December 30, 1997, the Operating Partnership acquired The Fashion Mall
at Keystone at the Crossing, a 651,671 square-foot regional mall, along with an
adjacent 29,140 square-foot community center, in Indianapolis, Indiana for
$124.5 million, including the assumption of a $64.8 million mortgage. These
Properties are wholly-owned by the Operating Partnership.

     On December 31, 1997, the Operating Partnership acquired the remaining 30%
ownership interest in Virginia Center Commons as well as the management
contract on that Property for a total of $2.3 million. The Operating
Partnership now owns 100% of this Property.

     On January 26, 1998, the Operating Partnership acquired Cordova Mall in
Pensacola, Florida for $87.3 million, which included the assumption of a $28.9
million mortgage and 1,713,016 Units, valued at approximately $55.5 million.
This 874,000 square-foot regional mall is wholly-owned by the Operating
Partnership.

     See Note 3 to the consolidated financial statements for 1996 and 1995
acquisition activity.

     Development Activity
     Development activities are an ongoing part of the Operating Partnership's
business. The Operating Partnership opened one new regional mall, two value-
oriented super-regional malls and one new community shopping center during
1997. On September 5, 1997, the Operating Partnership opened The Source, a
730,000 square-foot regional mall in Westbury (Long Island), New York. On
October 31, 1997 the Operating Partnership opened Grapevine Mills, a 1.2
million square feet value-oriented super-regional mall in Grapevine
(Dallas/Fort Worth), Texas, and on November 20, 1997, the Operating Partnership
opened Arizona Mills, a 1.2 million square-foot value-oriented super-regional
mall in Tempe, Arizona. In March 1997, the Operating Partnership opened Indian
River Commons, a 260,000 square-foot community shopping center in Vero Beach,
Florida, which is immediately adjacent to an existing regional mall Property.
The Operating Partnership has joint venture partners on each of these
Properties and accounts for them using the equity method of accounting.

     Construction also continues on the following projects:
* The Shops at Sunset Place, a destination-oriented retail and entertainment
  project containing approximately 510,000 square feet of GLA is scheduled to
  open in October of 1998 in South Miami, Florida. The Operating Partnership
  owns 75% of this $149 million project. Construction financing of $115 million
  closed on this property in June 1997. The loan initially bears interest at
  LIBOR plus 125 basis points and matures on June 30, 2000.
* Muncie Plaza, a 196,000 square-foot community center project, is scheduled
  to open in April of 1998 in Muncie, Indiana, adjacent to Muncie Mall. This
  approximately $14 million project is wholly-owned by the Operating
  Partnership.
* Lakeline Plaza, a 380,000 square-foot community center project, is
  scheduled to open in two phases in May and November of 1998 in Austin, Texas,
  adjacent to Lakeline Mall. On January 30, 1998, the Operating Partnership
  increased its ownership interest in this approximately $34 million project
  from 50% to 65%.

     In addition, the Operating Partnership is in the preconstruction
development phase on a new value-oriented super-regional mall, a factory outlet
center and a new community center project. Concord Mills, an approximately $200
million development, is scheduled to open in 1999. This 1,400,000 square-foot
<PAGE>
value-oriented super-regional mall development project is 50%-owned by the
Operating Partnership. Houston Premium Outlets is a 462,000 square-foot factory
outlet project in Houston, Texas. This approximately $89 million project, of
which the Operating Partnership has a 50% ownership interest in, is scheduled
to begin construction in 1998 and open in 1999. The Shops at North East Mall,
an approximately $55 million development, which is immediately adjacent to
North East Mall, an existing regional mall in the Company's portfolio, is
scheduled to open in Hurst, Texas, in 1999. This 391,000 square-foot
development project is wholly-owned by the Operating Partnership.

     Strategic Expansions and Renovations

     A key objective of the Operating Partnership is to increase the
profitability and market share of the Properties through the completion of
strategic renovations and expansions. In 1997, the Operating Partnership
completed construction and opened fourteen major expansion and/or renovation
projects: Alton Square in Alton, Illinois; Aventura Mall in Miami, Florida;
Chautauqua Mall in Jamestown, New York; Columbia Center in Kennewick,
Washington; The Forum Shops at Caesar's in Las Vegas, Nevada; Knoxville Center
in Knoxville, Tennessee; La Plaza in McAllen, Texas; Muncie Mall in Muncie,
Indiana; Northfield Square in Bradley, Illinois; Northgate Mall in Seattle,
Washington; Orange Park Mall in Jacksonville, Florida; Paddock Mall in Ocala,
Florida; Richmond Square in Richmond, Indiana; and Southern Park Mall in
Youngstown, Ohio.

     The Operating Partnership currently has four major expansion projects
under construction, and is in the preconstruction development stage with two
additional major expansion projects. The aggregate cost of the projects is
approximately $208 million.

* A 255,000 square-foot small shop expansion and the addition of a 24-screen
  AMC Theatre complex to Aventura Mall in Miami, Florida, are scheduled to open
  in March 1998. Lord & Taylor, Macy's, JCPenney and Sears are also expanding
  at this Property. In addition, the Operating Partnership added a Bloomingdales
  to this project in November of 1997. The Operating Partnership has a 33%
  ownership interest in this project.

* A 180,000 square-foot small shop expansion of The Florida Mall in Orlando,
  Florida, as well as the addition of Burdines, is scheduled for completion in
  the winter of 1999. The Operating Partnership has a 50% ownership interest in
  this project. Dillard's, Gayfers, JCPenney and Sears are also expanding.

* A 68,000 square-foot small shop expansion of Prien Lake Mall in Lake
  Charles, Louisiana, as well as the addition of Dillard's and Sears, is
  scheduled for completion in the winter of 1998. The Operating Partnership owns
  100% of Prien Lake Mall.

     The Operating Partnership has a number of smaller renovation and/or
expansion projects currently under construction aggregating approximately $105
million, of which the Operating Partnership's share is approximately $100
million. In addition, preconstruction development continues on a number of
project expansions, renovations and anchor additions at additional properties.
The Operating Partnership expects to commence construction on many of these
projects in the next 12 to 24 months.

     It is anticipated that these projects will be financed principally with
access to debt and equity markets, existing corporate credit facilities and
cash flow from operations.

     Capital Expenditures

     Capital expenditures, excluding acquisitions, were $330.9 million, $211.4
million and $102.9 million for the periods ended December 31, 1997, 1996 and
1995, respectively.
                                               1997        1996       1995
                                              -----       -----      ----- 
        New Developments                      $79.9       $80.1      $29.7
        Renovations and Expansions            196.6        86.3       38.9
        Tenant Allowances--Retail              36.7        24.0       17.2
        Tenant Allowances--Offices              1.2         6.1        4.3
        Capital Expenditures
        Recoverable from Tenants               12.9        11.4        8.0
        Other                                   3.6         3.5        4.8
        Total                                $330.9      $211.4     $102.9

<PAGE>
     Distributions

     The Company declared distributions on its common stock in 1997 aggregating
$2.01 per share. On January 23, 1998, the Company declared a distribution of
$0.5050 per share of common stock payable on February 20, 1998, to shareholders
of record on February 6, 1998. The current annual distribution rate is $2.02
per share of common stock. For federal income tax purposes, 35% of the 1997
common stock distributions and 64% of the 1996 common stock distributions
represented a return of capital. 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 for the year ended December 31, 1997 of
$1,243.8 million is primarily the result of acquisitions of $980.4 million,
$305.2 million of capital expenditures, advances to the Management Company of
$18.4 million and other investing activities of $55.4 million, including $50.0
million for the purchase of Chelsea stock, partially offset by net
distributions from unconsolidated entities of $97.7 million and cash received
from the acquisition of RPT of $19.7 million. Cash paid for acquisitions
includes $745.5 million for the RPT acquisition and related transactions,
$108.0 million for Dadeland Mall, $66.3 million for West Town Mall and $60.6
million for the acquisition of The Fashion Mall at Keystone at the Crossing and
Keystone Shoppes. Capital expenditures includes development costs of $62.6
million, including $31.0 million at The Shops at Sunset Place, $11.3 million at
Muncie Plaza, $7.0 million at Cottonwood Mall and $11.2 million for the
acquisition of the land ($9.2 million) and other development costs ($2.0
million) at The Shops at North East Mall. Also included in capital expenditures
is renovation and expansion costs of approximately $191.6 million, including
$34.7 million, $15.6 million, $15.1 million, $12.2 million, and $10.6 million
for the phase II expansion of Forum Shops at Caesar's, Miami International
Mall, Northgate Mall, Charles Towne Square and Knoxville Center, respectively,
and tenant costs and other operational capital expenditures of approximately
$51.0 million. Net distributions from unconsolidated entities is primarily due
to reimbursements of $70.1 million and $38.8 million from Dadeland Mall and
West Town Mall, respectively, as a result of mortgages obtained on those
Properties during 1997.

     Cash received from financing activities for the year ended December 31,
1997 of $918.3 million includes net proceeds from the sales of the Company's
common stock and Series C preferred stock of $344.4 million and net borrowings
of $945.5 million, partially offset by distributions to shareholders and
limited partners of $350.4 million and $21.0 million for the retirement of a
contingent interest feature on four mortgage loans. Net borrowings were used
primarily to fund the acquisition of RPT and the related transactions ($757.0
million), other acquisitions ($180.0 million) and development and investment
activity.
<PAGE>
     EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA")
     
     Management believes that there are several important factors that
contribute to the ability of the Operating Partnership to increase rent and
improve profitability of its 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. Management believes that EBITDA is
an effective measure of shopping center operating performance because: (i) 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; and (ii) EBITDA is unaffected by the debt and
equity structure of the property owner. EBITDA: (i) does not represent cash
flow from operations as defined by generally accepted accounting principles;
(ii) should not be considered as an alternative to net income as a measure of
the Company's operating performance; (iii) is not indicative of cash flows from
operating, investing and financing activities; and (iv) is not an alternative
to cash flows as a measure of the Company's liquidity.

     Total EBITDA for the Properties increased from $346.7 million in 1993 to
$940.0 million in 1997, representing a compound annual growth rate of 28.2%. Of
this growth, $336.8 million, or 56.8%, is a result of the DRC Merger and $34.5
million or 5.8% is a result of the RPT acquisition. The remaining growth in
total EBITDA reflects the addition of GLA to the Portfolio Properties through
property acquisitions, developments and expansions, increased rental rates,
increased tenant sales, improved occupancy levels and effective control of
operating costs. During this period, the operating profit margin increased from
58.6% to 64.4%. This improvement is also primarily attributable to aggressive
leasing of new and existing space and effective control of operating costs.
     The following summarizes total EBITDA for the Portfolio Properties and the
operating profit margin of such properties, which is equal to total EBITDA
expressed as a percentage of total revenue:

                                For the Year Ended December 31,
                                1997       1996      1995      1994       1993
                                                (in thousands)
EBITDA of consolidated                                                          
Properties                     $677,930   $467,292  $343,875  $290,243  $244,397
EBITDA of unconsolidated                                                        
Properties                      262,098    148,030    93,673    96,592   102,282
Total EBITDA of Portfolio                                                       
Properties (1)                 $940,028   $615,322  $437,548  $386,835  $346,679
EBITDA after minority                                                           
interest (2)                   $746,842   $497,215  $357,158  $307,372  $256,169
Increase in total EBITDA                                                        
from prior period                 52.8%      40.6%     13.1%     11.6%      9.5%
Increase in EBITDA after                                                        
minority interest from                                                          
prior period                      50.2%      39.2%     16.2%     20.0%     12.4%
Operating profit margin of                                                      
the Portfolio Properties                                                        
                                  64.4%  62.5% (3)     63.1%     61.9%     58.6%

    (1) On a pro forma basis, assuming the DRC Merger and the RPT acquisition
      and related transactions had occurred on January 1, 1996, EBITDA would
      be $1,019 million and $911 million in 1997 and 1996, respectively,
      representing an 11.8% growth.
    
    (2) EBITDA after minority interest represents earnings before interest,
      taxes, depreciation and amortization for all Properties after
      distribution to the third-party joint ventures' partners.
    
    (3) The 1996 operating profit margin, excluding the $7.2 million merger
      integration costs, is 63.2%.

<PAGE>

     FUNDS FROM OPERATIONS ("FFO")

     FFO, as defined by NAREIT, means the consolidated net income of the
Operating Partnership and its subsidiaries without giving effect to real estate
related depreciation and amortization, gains or losses from extraordinary
items, gains or losses on sales of real estate, gains or losses on investments
in marketable securities and any provision/benefit for income taxes for such
period, plus the allocable portion, based on the Operating Partnership's
ownership interest, of funds from operations of unconsolidated joint ventures,
all determined on a consistent basis in accordance with generally accepted
accounting principles. Management believes that FFO is an important and widely
used measure of the operating performance of REITs which provides a relevant
basis for comparison among REITs. FFO is presented to assist investors in
analyzing the performance of the Company. The Operating Partnership's method
of calculating FFO may be different from the methods used by other REITS.
FFO: (i) does not represent cash flow from operations as defined by generally
accepted accounting principles; (ii) should not be considered as an alternative
to net income as a measure of the Company's operating performance or to cash
flows from operating, investing and financing activities; and (iii) is not an
alternative to cash flows as a measure of the Company's liquidity. In March
1995, NAREIT modified its definition of FFO. The modified definition provides
that amortization of deferred financing costs and depreciation of nonrental
real estate assets are no longer to be added back to net income in arriving at
FFO. This modification was adopted by the Company beginning in 1996.
Additionally the FFO for prior periods has been restated to reflect the
modification in order to make the amounts comparative. Under the previous
definition, FFO for the year ended December 31, 1995 was $208.3 million.

     The following summarizes FFO of the Operating Partnership and the Company
and reconciles income of the Operating Partnership before extraordinary items
to FFO for the periods presented:

                                        For the Year Ended December 31,
                                           1997        1996      1995
                                                  (in thousands)
FFO of the Operating Partnership           $415,128   $281,495   $197,909
                                          =========  =========  =========
Increase in FFO from prior period             47.5%      42.2%      18.0%
                                          =========  =========  =========
Reconciliation:                                                          
Income of the Operating Partnership                                     
before extraordinary items                $203,133   $134,663   $101,505
Plus:                                                                   
Depreciation and amortization from                                      
consolidated properties                    200,084    135,226     92,274
The Operating Partnership's share of                                    
depreciation and amortization and                                       
extraordinary items from                                                
unconsolidated affiliates                   46,760     20,159      6,466
Merger integration costs                        --      7,236         --
The Operating Partnership's share of                                    
(gains) or losses on sales of real                                      
estate                                        (20)       (88)      2,054
Less:                                                                   
Minority interest portion of                                            
depreciation, and amortization and                                      
extraordinary items                        (5,581)    (3,007)    (2,900)
Preferred dividends                       (29,248)   (12,694)    (1,490)
                                         ---------  ---------  ---------
FFO of the Operating Partnership          $415,128   $281,495   $197,909
                                         =========  =========  =========
FFO allocable to the Company              $258,049   $172,468   $118,376
                                         =========  =========  =========

     PORTFOLIO DATA

     Operating statistics give effect to the DRC Merger and are based upon the
business and properties of the Operating Partnership and DRC on a combined
basis for all periods presented. The purpose of this presentation is to provide
a more comparable set of statistics on the portfolio as a whole. The following
statistics exclude Charles Towne Square, Richmond Town Square and Mission Viejo
Mall, which are all undergoing extensive redevelopment. The value-oriented
super-regional mall category consists of Arizona Mills, Grapevine Mills and
Ontario Mills.

     Aggregate Tenant Sales Volume and Sales per Square Foot. From 1994 to
1997, total reported retail sales at mall and freestanding GLA owned by the
Operating Partnership ("Owned GLA") in the regional malls and value-oriented
super-regional malls, and all reporting tenants at community shopping centers
<PAGE>
increased 25.3% from $7,611 million to $9,539 million, a compound annual growth
rate of 7.8%. 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.

     The following illustrates the total reported sales of tenants at Owned
GLA:

                                     Total Tenant         Annual
                                       Sales (in        Percentage
      Year Ended December 31,          millions)         Increase
     -------------------------      --------------    --------------
               1997                     $9,539            20.4%
               1996                       7,921            3.6
               1995                       7,649            0.5
               1994                       7,611            4.7
  
     Regional mall sales per square foot increased 8.8% in 1997 to $315 as
compared to $290 in 1996. In addition, sales per square foot of reporting
tenants operating for at least two consecutive years ("Comparable Sales")
increased from $298 to $318, or 6.7%, from 1996 to 1997. The Company believes
its strong sales growth in 1997 is the result of its aggressive retenanting
efforts and the redevelopment of many of the Properties. Sales per square foot
at the community shopping centers decreased in 1997 to $183 as compared to $187
in 1996. Sales statistics for value-oriented super-regional malls are not
provided as this category is comprised of new malls with insufficient history
to provide meaningful comparisons.

     Occupancy Levels. Occupancy levels for regional malls increased from 84.7%
at December 31, 1996, to 87.3% at December 31, 1997. Occupancy levels for value-
oriented super-regional malls was 93.8% at December 31, 1997. Occupancy levels
for community shopping centers decreased slightly, from 91.6% at December 31,
1996, to 91.3% at December 31, 1997. Owned GLA has increased 10.7 million
square feet from December 31, 1996, to December 31, 1997, primarily as a result
of the RPT acquisition, the acquisitions of Dadeland Mall, The Fashion Center
at Keystone at the Crossing, and Keystone Shoppes and the 1997 Property
openings.

                                           Occupancy Levels
                                                   
                          --------------------------------------------------
                                            Value-Oriented      Community
                              Regional         Regional          Shopping
       December 31,            Malls             Malls           Centers
       -------------        -----------     --------------     -----------
           1997                 87.3%            93.8%             91.3%
           1996                 84.7              N/A              91.6
           1995                 85.5              N/A              93.6
           1994                 85.6              N/A              93.9

     Tenant Occupancy Costs. Tenant occupancy costs as a percentage of sales
increased slightly from 11.4% in 1996 to 11.5% in 1997 in the regional mall
portfolio, excluding the SCA Properties. A tenant's ability to pay rent is
affected by the percentage of its sales represented by occupancy costs, which
consist of rent and expense recoveries. As sales levels increase, if expenses
subject to recovery are controlled, the tenant can pay higher rent. Management
believes the Operating Partnership is one of the lowest-cost providers of
retail space, which has permitted the rents in both regional malls and
community shopping centers to increase without raising a tenant's total
occupancy cost beyond its ability to pay. Management believes continuing
efforts to increase sales while controlling property operating expenses will
continue the trend of increasing rents at the Properties.

     Average Base Rents. Average base rents per square foot of mall and
freestanding Owned GLA at regional malls increased 28.7%, from $18.37 in 1994
to $23.65 in 1997. Average base rents per square foot of Owned GLA at value-
oriented super-regional malls was $16.20 in 1997. In community shopping
centers, average base rents of Owned GLA increased 4.5%, from $7.12 in 1994 to
$7.44 in 1997.
<PAGE>
     The following highlights this trend:

                                Average Base Rent per Square Foot             

                       Mall and Freestanding Stores at:                 
                     -------------------------------------
                                         Value-                          
                                        Oriented           Community
     Year Ended      Regional      %    Regional      %    Shopping      %
    December 31,       Malls    Change    Malls    Change   Centers   Change
   --------------    --------   ------- ---------  ------- ---------  -------
        1997           $23.65    14.4%   $16.20      N/A     $7.44     (2.7%)
        1996            20.68     7.8      N/A       N/A      7.65      4.9
        1995            19.18     4.4      N/A       N/A      7.29      2.4
        1994            18.37     3.8      N/A       N/A      7.12      N/A

     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. Such provisions include clauses
enabling the Operating Partnership 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 the Operating Partnership 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 the Operating Partnership's
exposure to increases in costs and operating expenses resulting from inflation.

     However, inflation may have a negative impact on some of the Operating
Partnership's 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.

     YEAR 2000 COSTS

     Management continues to assess the impact of the Year 2000 Issue on its
reporting systems and operations. The Year 2000 Issue exists because many
computer systems and applications abbreviate dates by eliminating the first two
digits of the year, assuming that these two digits would always be "19". Unless
corrected, this shortcut would cause problems when the century date occurs. On
that date, some computer programs may misinterpret the date January 1, 2000 as
January 1, 1900. This could cause systems to incorrectly process critical
financial and operational information, or stop processing altogether.

     To help facilitate the Operating Partnership's continued growth,
substantially all of the computer systems and applications in use in its home
office in Indianapolis have been, or are in the process of being,
upgraded and modified. The Operating Partnership is of the opinion that, in
connection with those upgrades and modifications, it has addressed applicable
Year 2000 Issues as they might affect the computer systems and applications
located in its home office. The Operating Partnership continues to evaluate
what effect, if any, the Year 2000 Issue might have at its Portfolio Properties.
The Operating Partnership anticipates that the process of reviewing this issue
at the Portfolio Properties and the implementation of solutions to any Year 2000
Issue which it may discover will require the expenditure of sums which the
Operating Partnership does not expect to be material. Management expects to have
all systems appropriately modified before any significant processing
malfunctions could occur and does not expect the Year 2000 Issue will materially
impact the financial condition or operations of the Operating Partnership.

     DEFINITIVE MERGER AGREEMENT

     On February 19, 1998, the Company and Corporate Property Investors ("CPI")
signed a definitive agreement to merge the two companies. The merger is
expected to be completed in the third quarter of 1998 and is subject to
approval by the shareholders of the Company as well as customary regulatory and
other conditions. A majority of the CPI shareholders have already approved the
transaction. Under the terms of the agreement, the shareholders of CPI will
receive, in a reverse triangular merger, consideration valued at $179 for each
share of CPI common stock held consisting of $90 in cash, $70 in the Company's
common stock and $19 worth of 6.5% convertible preferred stock. The common
stock component of the consideration is based upon a fixed exchange ratio using
the Company's February 18, 1998 closing price of $33 5/8 per share, and is
subject to a 15% symmetrical collar based upon the price of the Company's
<PAGE>
common stock determined at closing. In the event the Company's common stock
price at closing is outside the parameters of the collar, an adjustment will be
made in the cash component of consideration. The total purchase price,
including indebtedness which would be assumed, is estimated at $5.8 billion.

     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, earnings are generally highest in the fourth quarter of
each year.

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

   Reference is made to Item 7 of this Form 10-K under the caption "Liquidity
   and Capital Resources".

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

   Reference is made to the Index to Financial Statements contained in Item 14.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
  
       None.
<PAGE>

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    DIRECTORS

    The following twelve persons are the directors of the Company as
    of March 31, 1997:

    Birch Bayh, 70, has been a director of the Company since 1993.  He has been
the senior partner in the Washington, D.C. law firm of Bayh, Connaughton, &
Malone, P.C. for more than five years.  He served as a United States Senator
from Indiana from 1963 to 1981.  Mr. Bayh also serves as a director of
ICN Pharmaceuticals, Inc. and Acordia, Inc.

    William T. Dillard, II, 53, has been a director of the Company since 1993.
He is President and Chief Operating Officer of Dillard's, Inc., a retailing
chain,  a position he has held since 1977.  Mr. Dillard also serves as a
director of Dillard's, Inc., Chase Bank of Texas, N.A., Acxiom Corporation and
Barnes & Noble, Inc.

    G. William Miller, 73, has been a director of the Company since the DRC
Merger.  He has been Chairman of the Board and Chief Executive Officer of
G. William Miller & Co. Inc., a merchant banking firm, since 1983.  He is a
former Secretary of the U.S. Treasury and a former Chairman of the Federal
Reserve Board.  From January 1990 until February 1992, he was Chairman and
Chief Executive Officer of Federated Stores, Inc., the parent company of
predecessors to Federated Department Stores, Inc.  Mr. Miller is Chairman of
the Board and a director of Waccamaw Corporation.  He is also a director of
GS Industries, Inc., Kleinwort Benson Australian Income Fund, Inc. and Repligen
Corporation.

    Fredrick W. Petri, 51, has been a director of the Company since the DRC
Merger.  He is a partner of Petrone, Petri & Company, a real estate investment
firm he founded in 1993, and an officer of Housing Capital Company since its
formation in 1994.  Prior thereto, he was an Executive Vice President of Wells
Fargo Bank, where for over 18 years he held various real estate positions.
Mr. Petri is currently a trustee of the Urban Land Institute and a director of
Storage Trust Realty.  He previously was a member of the Board of Governors and
a Vice President of the National Association of Real Estate Investment Trusts
and a director of the National Association of Industrial and Office Park
Development.  He is a director of the University of Wisconsin's Real Estate
Center.

    Terry S. Prindiville, 62, has been a director of the Company since 1993.
He retired as Executive Vice President and Director of Support Services of
J.C. Penney Company, Inc., a retailing chain, a position he held from 1988
until 1995.  He was also the Chairman of the Board of Directors of JCP Realty,
Inc., a wholly-owned subsidiary of J.C. Penney Company, Inc. which is a Unit
holder, and a director of Eckerd Corporation.

    David Simon, 36, is the Chief Executive Officer of the Company and has been
a director since the Company's incorporation.  Mr. Simon served as President of
the Company from the Company's incorporation until 1996 and was appointed Chief
Executive Officer on January 3, 1995.  In addition, he has been Executive Vice
President, Chief Operating Officer and Chief Financial Officer of MSA since
1990.  From 1988-1990, Mr. Simon was Vice President of Wasserstein Perella &
Company, a firm specializing in mergers and acquisitions. In addition,
Mr. Simon serves as a member of the Board of Governors of the National
Association of Real Estate Investment Trusts, Inc. ("NAREIT") and the Urban
Land Institute and is a trustee and member of the International Council of
Shopping Centers.  He is the son of Melvin Simon, the nephew of Herbert Simon
and a director of Healthcare Compare Corp.

    Herbert Simon, 63, is the Co-Chairman of the Board of the Company and has
been a director since the Company's incorporation.  Mr. Simon served as Chief
Executive Officer from the Company's incorporation through January 2, 1995,
when he was appointed Co-Chairman of the Board.  In addition, Mr. Simon is the
Co-Chairman of the Board of MSA.  Mr. Simon is also a director of Kohl's
Corporation, a specialty retailer.

    Melvin Simon, 71, is the Co-Chairman of the Board of the Company and has
been a director since the Company's incorporation.  In addition, he is the
Co-Chairman of the Board of MSA, a company he founded in 1960 with his brother,
Herbert Simon.

<PAGE>

    J. Albert Smith, Jr., 57,  has been a director of the Company since 1993.
He is the President of Bank One, Indiana, NA, a commercial bank, a position he
has held since September 30, 1994.  Prior to his current position, he was the
President of Banc One Mortgage Corporation, a mortgage banking firm, a position
he held since 1975.

    Richard S. Sokolov, 48, has been a director of the Company since the DRC
Merger.  He served as the President and Chief Executive Officer and a director
of DRC from its incorporation until the DRC Merger.  Prior to that he had
served as Senior Vice President, Development of EJDC since 1986 and as Vice
President and General Counsel since 1982.  In addition, Mr. Sokolov is a
trustee, member and the incoming Chairman (commencing in May of 1998) of the
Executive Committee of the International Council of Shopping Centers.

    Philip J. Ward, 49, has been a director of the Company since the DRC
Merger.  He is Senior Managing Director, Head of Real Estate Investments, for
CIGNA Investments, Inc., a wholly-owned subsidiary of CIGNA Corporation.  He is
a member of the International Council of Shopping Centers, the Urban Land
Institute, the National Association of Industrial and Office Parks and the
Society of Industrial and Office Realtors.  He is a director of the Connecticut
Investment Fund and Wyndham Hotel Corporation.

    Denise DeBartolo York, 47, has been a director of the Company since the DRC
Merger.  She served as a director of DRC from its incorporation until the DRC
Merger.  She serves as Chairman of the Board and Chief Executive Officer of
EJDC and DeBartolo, Inc.  Ms. DeBartolo York previously served EJDC as
Executive Vice President of Personnel/Communications and has been associated
with EJDC in an executive capacity since 1975.  She is the daughter of the late
Edward J. DeBartolo.

    Melvin Simon, Herbert Simon, David Simon and Richard Sokolov are the four
persons elected as directors by the holders of the Class B Common Stock. M.
Denise DeBartolo York was elected by the holder of the Class C Common Stock.
In addition, there is one vacancy on the board of directors, which will be
filled at the next Annual Meeting of Shareholders by the holders of the Class B
Common Stock.

Executive Officers

    The information required by this item with respect to executive officers is
included in Part 1 of this report under the caption "Executive Officers of the
Company."

SECTION 16(A) REPORTING


     Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and beneficial owners of more than
10% of the Company's capital stock to file reports of ownership and changes of
ownership with the Securities and Exchange Commission and the New York Stock
Exchange.  Based solely on its review of the copies of such forms received by
it, and/or written representations from certain reporting persons, the Company
believes that, during the year ended December 31, 1997, its directors,
executive officers and beneficial owners of more than 10% of the Company's
Common Stock have complied with all filing requirements applicable to them.
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

    The following table sets forth information concerning the compensation for
services in all capacities to the Company for the year ended December 31, 1997,
for the Chief Executive Officer and the four other most highly compensated
executive officers of the Company for the year ended December 31, 1997 (the
"Named Executives"):

                          SUMMARY COMPENSATION TABLE
                                       
                                       
                                 Annual              Long-Term            
                              Compensation         Compensation
                           ------------------- ---------------------
    Name and                                   Restricted Securities  All Other
    Principal                                   Stock     Underlying   Compen-
    Position      Year      Salary     Bonus   Awards (1)  Options   sation (2)
----------------- -----    --------   -------- ---------- ---------- -----------
David Simon       1997     $600,000(3)     (4)         --         --     $11,012
Chief Executive   1996      400,000   $300,000         --         --      11,056
Officer           1995      400,000    102,735 $1,365,000         --      10,996

Richard S.        1997     $515,083        (4)         --         --    $  8,302
Sokolov (5)       1996      202,134   $175,000         --         --          --
President and
Chief
Operating Officer

William J. Garvey 1997     $395,833   $100,000         --         --     $15,563
Executive Vice    1996      375,000     85,000         --         --      12,362
President-        1995      353,846     75,000 $1,365,000         --      12,450
Property
Development

James A. Napoli   1997     $365,833   $125,000         --         --     $12,807
Executive Vice    1996      316,154    110,000         --         --      11,684
President-Leasing 1995      300,000    100,000 $1,365,000         --      11,773

James M. Barkley  1997     $291,667   $115,000         --         --     $11,463
General Counsel   1996      246,154    100,000         --         --      11,660
and Secretary     1995      228,269     75,000 $  830,000         --      11,468
  
----------------------
(1)    Pursuant to the Company's five-year Stock Incentive Program, a total of
  1,000,000 restricted shares of Common Stock were allocated to certain key
  employees of the Company on March 22, 1995, having a total value at the date
  of grant of $25.0 million.  A portion of the restricted shares allocated are
  awarded and earned only if the Company attains annual and cumulative targets
  for growth in Funds From Operations.  See "_Employee Plan_Stock Incentive
  Program," below.  The amounts indicated in the table represent the total
  amount of restricted shares allocated to the Chief Executive Officer and
  other named executive officers, which are subject to performance-based
  conditions before they are awarded and earned, and to subsequent vesting
  requirements.  Dividends are paid on restricted shares that are earned.
  Earned shares vest in four equal annual installments beginning on January 1
  of the year following the year in which the restricted shares are deemed
  earned and awarded; provided that the participant remains an employee
  immediately prior to the vesting date.  At December 31, 1997, the total
  number of restricted shares (and value at such date) that have been earned by
  the persons named in the table were as follows:  David
  Simon-32,760 restricted shares ($1,070,843); William J.
  Garvey-32,760 restricted shares ($1,070,843); and James A.
  Napoli-29,560 restricted shares ($966,243); James M. Barkley- 29,920
  restricted shares ($978,010); and Richard S. Sokolov-24,163 restricted shares
  ($789,828).

(2)    Represents annualized amounts of (i) employer paid contributions to the
  Company's 401(k) retirement plan and (ii) Company paid employee and dependent
  life insurance premiums.  Employer contributions to the 401(k) retirement
  plan become vested 30% after completion of three years of service, 40% after
  four years and an additional 20% after each additional year until fully
  vested after seven years.

(3)    Effective May 1, 1997, the Compensation Committee approved an annual
  salary for Mr. Simon of $600,000.  Mr. Simon elected not to accept payment of
  this increased salary in 1997, and therefore received an annual salary of
  $400,000.

(4)    Bonus awards are accrued in the year indicated, but paid in the
  following year.  The Compensation Committee is reviewing David Simon and
  Richard Sokolov's compensation, and, as part of that review, may determine to
  award cash bonus compensation to them based on the Company's 1997
  performance.

(5)    Does not include compensation paid by DRC prior to the DRC Merger.


<PAGE>

OPTION EXERCISES AND YEAR-END VALUES

     The following table sets forth information with respect to the unexercised
stock options granted to the Named Executives under the Employee Plan and held
by them at December 31, 1997.  No stock options were granted to the Named
Executives in 1997.

                   Shares             Number of Securities  Value of Unexercised
                  Acquired                 Underlying       In-the-Money Options
                     on       Value    Unexercised Options  at December 31, 1997
     Name         Exercise  Realized  at December 31, 1997          (1)
---------------  --------- ---------  -------------------- ---------------------
                                      Exercis- Unexercis-   Exercis-  Unexercis-
                                        able      able        able       able
                                      -------  ----------- ----------  ---------
David Simon             --        --  200,000          --  $2,087,500         --

William J. Garvey   20,000  $180,000   55,000          --     574,063         --

James A. Napoli         --        --   50,000          --     521,875         --

James M. Barkley        --        --   75,000          --     782,813         --

Richard S. Sokolov      --        --       --          --          --         --
____________
(1)The closing price of the Company's Common Stock as reported by the New York
   Stock Exchange on December 31, 1997 was $32.6875.  Value is calculated on
   the basis of the difference between the exercise price and $32.6875,
   multiplied by the number of shares of Common Stock underlying "in-the-money"
   options.


EMPLOYEE PLAN

    General.  Under the Operating Partnership's Employee Stock Plan (the
"Employee Plan") a maximum of 4,595,000 shares of Common Stock (subject to
adjustment) are available for issuance to eligible officers and key employees.
The Employee Plan is administered by the Compensation Committee of the Board of
Directors (the "Committee") which consists of persons not eligible to
participate in the Employee Plan.  During the ten-year period following the
adoption of the Employee Plan, the Committee may, subject to the terms of the
Employee Plan, grant to key employees (including officers and directors who are
employees) of the Operating Partnership or its "affiliates" (as defined in the
Employee Plan) the following types of awards:  incentive stock options ("ISOs")
within the meaning of section 422 of the Code, "nonqualified stock options"
("NQSOs"), stock appreciation rights ("SARs"), performance units and shares of
restricted or unrestricted Common Stock.

    Any stock option granted under the Employee Plan may be exercised over a
period determined by the Committee in its discretion.  The exercise price of an
option (the "Option Price") may not be less than the fair market value of the
shares of the Common Stock on the date of grant.  The Committee may, in its
discretion, with the grantee's consent, amend, cancel, substitute, accelerate
the exercisability of or extend the scheduled expiration date of any grant,
provided however, that no option may be exercisable more than ten years after
the date of grant.  The Board of Directors of the Company in its capacity as a
general partner of the Operating Partnership may amend, suspend or discontinue
the Employee Plan at any time.  Certain specified amendments must be approved
by shareholders.

    Option Grants.  No options were granted under the Employee Plan during
1997.  All options granted to date under the Employee Plan are exercisable at
the fair market value of the Common Stock on the date of grant, have a ten-year
term, generally vest 40% on the first anniversary of the grant date and an
additional 30% on the second anniversary of the grant date, and generally
become 100% vested three years after the grant date.
<PAGE>
    Stock Incentive Program.

Two stock incentive programs are currently in effect.

     In October 1994, under the Employee Plan of the Company and the Operating
Partnership, the Company's Compensation Committee approved a five-year stock
incentive program (the "Stock Incentive Program"), under which shares of
restricted common stock of the Company were granted to certain employees at no
cost to those employees. A percentage of each of these restricted stock grants
can be earned and awarded each year if the Company attains certain growth
targets measured in Funds From Operations, as those growth targets may be
established by the Company's Compensation Committee from time to time. Any
restricted stock earned and awarded vests in four installments of 25% each on
January 1 of each year following the year in which the restricted stock is
deemed earned and awarded.

     In 1994, and prior to the DRC Merger, DRC also established a five-year
stock incentive program (the "DRC Plan") under which shares of restricted
common stock were granted to certain DRC employees at no cost to those
employees.  The DRC Plan also provided that this restricted stock would be
earned and awarded based upon DRC's attainment of certain economic goals
established by the Compensation Committee of DRC's Board of Directors. At the
time of the DRC Merger, the Company and the Operating Partnership agreed to
assume the terms and conditions of the DRC Plan and the economic criteria upon
which restricted stock under both the Stock Incentive Program and the DRC Plan
would be deemed earned and awarded were aligned with one another. Further,
other terms and conditions of the DRC Plan and Stock Incentive Program were
modified so that beginning with calendar year 1996, the terms and conditions of
these two programs are substantially the same. It should be noted that the
terms and conditions concerning vesting of the restricted stock grant to the
Company's President and Chief Operating Officer, a former DRC employee, are
different from those established by the DRC Plan and are specifically set forth
in the employment contract between the Company and such individual.

     In March 1995, an aggregate of 1,000,000 shares of restricted stock was
granted to 50 executives pursuant to the Stock Incentive Program, subject to
the performance standards, vesting requirements and other terms of the Stock
Incentive Program. Prior to the DRC Merger, 2,108,000 shares of DRC common
stock were deemed available for grant pursuant to the DRC Plan to certain
designated employees of DRC, also subject to certain performance standards,
vesting requirements and other terms of the DRC Plan. During 1997, 1996 and
1995, a total of 448,753; 200,030; and 144,196 shares of common stock of the
Company, respectively, net of forfeitures, were deemed earned and awarded under
the Stock Incentive Program and the DRC Plan.

INCENTIVE BONUS PLAN

    The Incentive Bonus Plan (the "Bonus Plan") is intended to provide senior
executives and key employees with opportunities to earn incentives based upon
the performance of the Company, the participant's business unit and the
individual participant.  At the beginning of a year, the Committee specifies
the maximum incentive pool available for distributions and approves performance
measures for each participant and three levels of performance that must be
attained in order to trigger the award of the bonuses.  Each participant's
bonus award for the year is expressed as a percentage of base salary, a fixed
dollar amount, or a percentage of the available incentive pool.  Bonus amounts
for each year are determined in the following February with disbursement in
March.

DEFERRED COMPENSATION PLAN

    The Operating Partnership has a non-qualified deferred compensation plan
(the "Deferred Compensation Plan") that provides deferred compensation to
certain executives and key employees.  Under the Deferred Compensation Plan, a
participant may defer all or a part of his compensation.  The Company, at its
discretion, may contribute a matching amount equal to a rate selected by the
Company, and an additional incentive contribution amount on such terms as the
Company may specify.  All participant deferrals and Company matching and
incentive contributions are credited to a participant's account and remain
general assets of the Company.  A participant's elective deferrals are fully
vested.  Except in the case of death or disability of the participant or
insolvency or a change in control of the Company, a participant becomes vested
in Company matching and incentive contributions 20% after one year of service
and an additional 20% for each year thereafter.  Upon death or disability of
the participant or insolvency or a change in control of the Company, a
participant becomes 100% vested in his account.
<PAGE>
    All contributions under the Deferred Compensation Plan are deposited in
what is commonly referred to as a "rabbi trust" arrangement pursuant to which
the assets of the trust are subject to the claims of the Company's general
creditors in the event of the Company's insolvency.  The trust assets are
invested by the trustee in its sole discretion.  Payments of a participant's
elective deferrals and vested matching contributions are made as elected by the
participant.  These amounts would be paid earlier in the event of termination
of employment or death of the participant, an unforeseen emergency affecting
the participant or a change in control of the Company.

OTHER RETIREMENT PLANS

    The Operating Partnership and certain related entities maintain a tax-
qualified retirement savings plan for eligible employees which contains a cash
or deferred arrangement described in section 401(k) of the Code. Under the
plan, eligible employees may defer up to a maximum of 12% of their compensation
(as defined in the plan), subject to certain limits imposed by the Code.
Participants' salary deferrals are matched by participating employers in an
amount equal to 100% of the first 2% of such deferrals and 50% of the next 4%
of such deferrals.  In addition, participating employers contribute annually 3%
of eligible employees' compensation (as defined in the plan).  Amounts deferred
by employees are immediately vested; amounts contributed by participating
employers become vested 30% after the completion of three years of service, 40%
after the completion of four years of service and an additional 20% after the
completion of each additional year of service until 100% vested after the
completion of seven years of service.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
                                       
     No member of the Compensation Committee during 1997 was an officer,
employee or former officer of the Company or any of its subsidiaries or had any
relationship requiring disclosure herein pursuant to regulations of the
Securities and Exchange Commission.  No executive officer of the Company served
as a member of a compensation committee or a director of another entity under
circumstances requiring disclosure herein pursuant to regulations of the
Securities and Exchange Commission.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock, Class A Common Stock and
Class C Common Stock ("Voting Stock") and the units of limited partnership
interest ("Units") of the Company's majority-owned subsidiary, Simon
DeBartolo Group, L.P. (the "Operating Partnership") as of March 31, 1998
by (1) each director and nominee for director, (2) the executive officers named
in the Summary Compensation Table and (3) the directors and executive officers
of the Company, as a group.  Unless otherwise indicated in the footnotes,
shares or Units are owned directly, and the indicated person has sole voting
and investment power.

                      Number of                                          
                      Shares of        Percent of    Number of      Percent of
                     Voting Stock     Voting Stock     Units          Units
     NAME OF         Beneficially     Beneficially Beneficially    Beneficially
BENEFICIAL OWNER    Owned(1)(2)(3)     Owned (4)       Owned        Owned (5)
-----------------   --------------    ------------ ------------    -----------
Birch Bayh                  17,000               *           --             --

William T.                  20,200 (7)           *           --             --
 Dillard, II

G. William Miller           10,440               *           --             --

Fredrick W. Petri           14,520               *           --             --

Terry S.                    13,000               *           --             --
 Prindiville

David Simon              2,250,420 (8)         2.0    2,013,010           1.3%

Herbert Simon            5,597,851 (9)         4.9    5,554,250 (9)       3.5%

Melvin Simon             7,153,795 (9)         6.1    7,116,385 (9)       4.5%

J. Albert Smith, Jr.        15,000               *           --              -

Richard S. Sokolov         191,960               *       60,835              *

Denise DeBartolo York    1,318,062 (6)         1.2    1,290,439 (6)          *

Philip J. Ward               6,802               *           --             --

James M. Barkley           104,920               *           --             --

William J. Garvey          111,130               *       21,200              *

James A. Napoli             79,560               *           --             --

All directors and
executive                                                                     
officers as a                                                                 
group (10)                                                                    
(20 persons)            51,403,696           32.7%   46,932,423          29.6%
__________
 *  Less than one percent

(1) Includes the following shares of Common Stock that may be purchased pursuant
    to stock options that are exercisable within 60 days: Birch Bayh-17,000; 
    William T. Dillard, II-14,000; G. William Miller-6,360; Fredrick W. 
    Petri-6,360; Terry S. Prindiville-11,000; David Simon-200,000; Denise
    DeBartolo York-3,000; J. Albert Smith, Jr.-14,000; Philip J. Ward-6,360;
    William J. Garvey-55,000; James A. Napoli-50,000; James M. Barkley-75,000;
    and all directors and executive officers as a group-680,580.
(2) Includes the following shares of Common Stock that may be received upon
    exchange of Units held by the following persons on March 31, 1998: David
    Simon-2,013,010; Melvin Simon-7,116,385; Herbert Simon-5,554,250; Richard S.
    Sokolov-60,835; Denise DeBartolo York-1,290,439; William J. Garvey
    -21,200; and all directors and executive officers as a group-46,932,423.  
    Units held by limited partners are exchangeable either for shares of Common 
    Stock (on a one-to-one basis) or for cash as selected by the independent d
    directors.
(3) Includes the following restricted shares which are subject to vesting
    requirements: David Simon-32,760; William J. Garvey-32,760; James A.
    Napoli-29,560; James M. Barkley-29,920; Richard S. Sokolov-24,163; and all
    directors and executive officers as a group-291,443.
(4) At March 31, 1998, there were 106,484,009 shares of Common Stock,
    3,200,000 shares of Class B Common Stock, and 4,000 shares of Class C Common
    Stock. Upon the occurrence of certain events, shares of Class B Common Stock
    and Class C Common Stock convert automatically into Common Stock (on a
    share-for-share basis).  The percentages in this column assume the 
    exercise of stock options and exchange of Units for shares of Common Stock.
(5) At March 31, 1998, there were 173,747,714 outstanding Units of which the
    Company owned, directly or indirectly, 109,688,009 or 63.1%.  The 
    percentages in this column assume that no Units are exchanged for shares of
    Common Stock.
(6) Does not include shares of Voting Stock and Units held by DeBartolo, Inc.
    and certain related persons and entities.  See "PRINCIPAL SHAREHOLDERS."
(7) Does not include 10,000 shares of Common Stock owned by Mr. Dillard's spouse
    who has sole voting and investment power of such shares.
(8) Includes Units owned by trusts of which David Simon is a beneficiary.
(9) Does not include shares of Voting Stock and Units held by Melvin Simon &
    Associates, Inc.  See "PRINCIPAL SHAREHOLDERS."
(10)Includes shares of Voting Stock and Units held by DeBartolo, Inc. and Melvin
    Simon & Associates, Inc.  See "PRINCIPAL SHAREHOLDERS."
<PAGE>                                       
                            PRINCIPAL SHAREHOLDERS
                                       
     The following table sets forth certain information concerning each person
(including any group) known to the Company to beneficially own more than five
percent (5%) of any class of Voting Stock as of March 31, 1997.  Unless
otherwise indicated in the footnotes, shares are owned directly, and the
indicated person has sole voting and investment power.


                                           Amount and      Percent of
       Name and Address of                  Nature of    Voting Stock
         Beneficial Owner                  Beneficial     Beneficially
                                          Ownership (1)     Owned (2)
  ----------------------------            --------------  ------------
  DeBartolo, Inc. et al. (3)              19,357,260 (4)        15.7%
  7620 Market Street
  Youngstown, OH  44513

  Melvin Simon & Associates, Inc.(5)      14,651,581 (6)        12.1%
  115 W. Washington Street
  Indianapolis, IN 46204

  Princeton Services, Inc.                 9,059,375 (7)         8.3%
  800 Scudders Mill Road                  
  Plainsboro, New Jersey 08536

  Stichting Pensionfonds ABP               6,107,192 (8)         5.6%
  P.O. Box 2889                          
  6401 D J Harleen
  The Netherlands

    (1)  Voting Stock includes shares of Common Stock, Class B Common Stock and
 Class C Common Stock.  Upon the occurrence of certain events, shares of Class
 B Common Stock and Class C Common Stock convert automatically into Common
 Stock (on a share-for-share basis).  The amounts in the table also include
 shares of Common Stock that may be issued upon the exchange of Units.  Units
 held by limited partners are exchangeable either for shares of Common Stock
 (on a one-to-one basis) or for cash as selected by the independent directors.

    (2)  The percentages in this column assumes the exercise of stock options
 and exchange of Units for shares of Common Stock.

    (3)  According to a Schedule 13D dated August 9, 1996, the beneficial owners
 of the securities are DeBartolo, Inc. ("DI"), certain subsidiaries of DI,
 held directly or indirectly through The Edward J. DeBartolo Corporation, the
 estate of the late Edward J. DeBartolo, members of the DeBartolo family,
 including Edward J. DeBartolo, Jr. and M. Denise DeBartolo York, or trusts
 established for the benefit of members of the DeBartolo family or
 partnerships in which the foregoing persons hold partnership interests.

    (4)  Includes 22,207,888 shares of Common Stock issuable upon exchange of
 Units and 4,000 shares of Class C Common Stock.

    (5)  Melvin Simon & Associates, Inc., is owned 69% by Melvin Simon and 31%
 by Herbert Simon.

    (6)  Includes 11,451,581 shares of Common Stock issuable upon exchange of
 Units and 3,200,000 shares of Class B Common Stock.

    (7)  According to a Schedule 13G dated January 26, 1998, the reporting
 person, who is the managing general partner of Merrill Lynch Asset
 Management, L.P. and Fund Asset Management, L.P., owns 9,059,375 shares of
 Common Stock.

    (8)  According to a Schedule 13G filed for the period ended December 31,
 1997, the reporting person beneficially owns 6,107,192 shares of Common
 Stock.
 <PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS WITH THE SIMONS

     The Company has entered into noncompetition agreements with Melvin Simon,
Herbert Simon and David Simon (collectively, the "Simons"), all of whom are
executive officers of the Company.  Pursuant to such agreements and except as
set forth below, Melvin Simon and Herbert Simon are prohibited from engaging in
the shopping center business in North America other than through the Company or
as passive investors until the later of (i) December 20, 2003, or (ii) the date
that they are no longer directors or officers of the Company, and David Simon
is prohibited from engaging in the shopping center business in North America
other than through the Company and, with certain exceptions, for two years
thereafter if he resigns or is terminated for cause.  The foregoing
restrictions will not prohibit Melvin Simon, Herbert Simon or David Simon from
having an ownership interest in the properties in which the Simons previously
owned an interest that were not contributed to the Company or Simon Property
Group, L.P. ("SPG, LP") (the "Excluded Properties") and in M.S. Management
Associates, Inc. (the "Management Company"), and serving as directors and
officers of the Management Company.  It is anticipated that such commitments
will not, in the aggregate, involve a material amount of time, but no assurance
can be given in this regard.  In addition, Melvin Simon and Herbert Simon may
pursue other investment activities in which they are currently engaged.

     The Simons continue to own, in whole or in part, the Excluded Properties.
The Management Company has entered into management agreements with the
partnerships that hold the Excluded Properties, some of which agreements were
not negotiated on an arms-length basis.  Management believes, however, that the
terms of such management agreements are fair to the Company.

     In connection with the use of the aggregate proceeds of the initial public
offering and related financing to repay certain indebtedness encumbering the
Operating Partnership's properties, the Company repaid approximately
$180 million of indebtedness owed to the Simons, which represented loans made
by the Simons in lieu of third-party financing.  Of this amount, approximately
$110 million was used by the Simons to pay income taxes and other third-party
obligations associated with their real estate business.  In addition, the
Simons were released from personal liability under guaranties provided by the
Simons by substituting guaranties by the Company, or the provision by the
Company of back-up guaranties in favor of the Simons, on approximately $111
million of such debt.

MANAGEMENT COMPANY

     The Management Company manages regional malls and community shopping
centers not wholly-owned by the Operating Partnership and certain other
properties and also engages in certain property development activities.  Of the
outstanding voting common stock of the Management Company, 95% is owned by the
Simons, which will enable the Simons to control the election of the board of
directors of the Management Company.  The Operating Partnership owns common
stock representing 80% of the value of the outstanding stock of the Management
Company, all of the outstanding participating preferred stock of the Management
Company and a mortgage note of the Management Company, which entitles the
Company to more than 90% of the anticipated after-tax economic benefits, in the
form of dividends and interest, of the Management Company.  The Management
Company must receive the approval of a majority of the Independent Directors in
order to provide services for any property not currently managed by the
Management Company unless the Company owns at least a 25% interest in such
property.  The Management Company has agreed with the Company that, if in the
future the Company is permitted by applicable tax law and regulations to
conduct any or all of the activities that are now being conducted by the
Management Company, the Management Company will not compete with the Company
with respect to new or renewal business of this nature.

RELATIONSHIP WITH BAYH, CONNAUGHTON & MALONE, P.C.

     During 1997, the Company engaged the Washington, D.C. law firm of Bayh,
Connaughton & Malone, P.C. to provide certain legal services.  Birch Bayh, a
director of the Company, is a shareholder of such firm.  As of April 1, 1998,
such firm merged with another law firm and is now known as Oppenheimer, Wolff,
Donnelly & Bayh, LLP.
<PAGE>

OTHER TRANSACTIONS
<PAGE>

     Phillip J. Ward, a director of the Company is the Head of Real Estate
Investments for CIGNA Investments, Inc., which has, or its affiliates have,
made mortgage loans to the Company or its affiliates totaling approximately
$290 million.  These loans are considered to be arm's length agreements.

     An affiliate of the Company is a general partner in Lakeline Developers
and Lakeline Plaza Developers, both Texas general partnerships in which
Dillard's, Inc. is the other general partner.  Mr. William Dillard II, a member
of the Company's Board of Directors, is an officer, director and shareholder of
Dillard's, Inc.  On January 31, 1998, Dillard's, Inc. contributed a fifteen
percent (15%) interest in both Lakeline Developers and Lakeline Plaza
Developers to the Operating Partnership in exchange for 191,634 Units.
<PAGE>                                       
                                    PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

       Reports on Form 8-K

       Four Forms 8-K were filed during the fourth quarter ended
       December 31, 1997.
       
       On October 14, 1997. Under Item 5 - Other Events, the
       Company reported that its primary operating partnership and
       subsidiary, Simon DeBartolo Group, L.P., had completed its
       cash tender offer to purchase all of the outstanding
       beneficial interests in The Retail Property Trust. In
       addition, under Item 7 - Financial Statements and Exhibits,
       the Company included, as an exhibit, a press release which
       outlined additional information regarding the offer.
       
       On November 21, 1997. Under Item 5 - Other Events, the
       Company reported that it made available additional
       ownership and operational information concerning the
       Company, Simon DeBartolo Group, L.P. and the properties
       owned or managed as of September 30, 1997, in the form of a
       Supplemental Information package. A copy of the package was
       included as an exhibit to the 8-K filing.
       
       On November 24, 1997. Under Item 5 - Other Events, the
       Company announced the sale of 310,000 shares of its common
       stock to an institutional investor for $33.125 per share.
       In addition, under Item 7 - Financial Statements and
       Exhibits, the Company made available, in the form of
       exhibits, certain documents relating to the sale.
       
       On December 23, 1997. Under Item 5 - Other Events, the
       Company announced the sale of 301,887 shares of its common
       stock to Legg Mason Wood Walker, Incorporated for $31.6344
       per share. In addition, under Item 7 - Financial Statements
       and Exhibits, the Company made available, in the form of
       exhibits, certain documents relating to the sale.
       
<PAGE>
            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Board of Directors of
Simon DeBartolo Group, Inc.:

We have audited the accompanying consolidated balance sheets of SIMON DeBARTOLO
GROUP, INC. (a Maryland corporation) and subsidiaries as of December 31, 1997
and 1996, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Simon DeBartolo
Group, Inc. and subsidiaries as of December 31, 1997 and 1996, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles.



                                                  /s/ ARTHUR ANDERSEN LLP
                                                  ARTHUR ANDERSEN LLP
Indianapolis, Indiana
February 17, 1998
<TABLE>
Balance Sheets
 Simon DeBartolo Group, Inc. Consolidated

(Dollars in thousands, except per share amounts)
<CAPTION>
                                                                    December 31,  December 31,
                                                                         1997         1996
                                                                     -----------   -----------
<S>                                                                   <C>           <C>
ASSETS:                                                                                            
  Investment properties, at cost                                      $6,867,354    $5,301,021
    Less - accumulated depreciation                                      461,792       279,072
                                                                     -----------   -----------
                                                                       6,405,562     5,021,949
  Cash and cash equivalents                                              109,699        64,309
  Restricted cash                                                          8,553         6,110
  Tenant receivables and accrued revenue, net                            188,359       166,119
  Notes and advances receivable from Management Company                                            
      and affiliate                                                       93,809        75,452
  Investment in partnerships and joint ventures, at equity               612,140       394,409
  Investment in Management Company and affiliates                          3,192             -
  Other investment                                                        53,785             -
  Deferred costs and other assets                                        164,413       138,492
  Minority interest                                                       23,155        29,070
                                                                     -----------   -----------
       Total assets                                                   $7,662,667    $5,895,910
                                                                     ===========   ===========
LIABILITIES:                                                                                       
  Mortgages and other indebtedness                                    $5,077,990    $3,681,984
  Accounts payable and accrued expenses                                  245,121       170,203
  Cash distributions and losses in partnerships and joint                                          
      ventures, at equity                                                 20,563        17,106
  Investment in Management Company and affiliates                              -         8,567
  Other liabilities                                                       67,694        72,876
                                                                     -----------   -----------
       Total liabilities                                               5,411,368     3,950,736
                                                                     -----------   -----------
                                                                                              
COMMITMENTS AND CONTINGENCIES (Note 13)                                                            
                                                                                              
LIMITED PARTNERS' INTEREST IN THE OPERATING PARTNERSHIP                  694,437       640,283
                                                                                              
SHAREHOLDERS' EQUITY:                                                                              
                                                                                              
  Series A convertible preferred stock, 0 and 4,000,000 shares                                     
      issued and outstanding, respectively                                     -        99,923
                                                                                              
  Series B cumulative redeemable preferred stock, 9,200,000 shares                                 
      authorized, 8,000,000 issued and outstanding                       192,989       192,989
                                                                                              
  Series C cumulative redeemable preferred stock, 3,000,000 and 0,                                 
      shares authorized issued and outstanding, respectively             146,072             -
                                                                                              
  Common stock, $.0001 par value, 375,796,000 and 374,796,000,                                     
      shares authorized and 106,439,001 and 93,676,415 issued and                                  
      outstanding, respectively                                               10             9
                                                                                              
  Class B common stock, $.0001 par value, 12,000,000 shares                                        
      authorized, 3,200,000issued and outstanding                              1             1
                                                                                              
  Class C common stock, $.0001 par value, 4,000 shares authorized,                                 
      issued and outstanding                                                   -             -
                                                                                              
  Capital in excess of par value                                       1,491,908     1,189,919
  Accumulated deficit                                                  (263,308)     (172,596)
  Unrealized gain on long-term investment                                  2,420             -
  Unamortized restricted stock award                                    (13,230)       (5,354)
                                                                    ------------  ------------
       Total shareholders' equity                                      1,556,862     1,304,891
                                                                    ------------  ------------
       Total liabilities, limited partners' interest and                                           
           shareholders' equity                                       $7,662,667    $5,895,910
                                                                    ============  ============

                                                                                              
                                                                                              
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
 Simon DeBartolo Group, Inc. Consolidated

(Dollars in thousands, except per share amounts)
                                                                             
<CAPTION>
                                                                             
                                                   For the Year Ended December 31,
                                                    1997        1996       1995
<S>                                              <C>          <C>        <C>
REVENUE:                                                                         
  Minimum rent                                    $641,352    $438,089   $307,857
  Overage rent                                      38,810      30,810     23,278
  Tenant reimbursements                            322,416     233,974    192,994
  Other income                                      51,589      44,831     29,528
                                                 ---------   ---------   --------
       Total revenue                             1,054,167     747,704    553,657
                                                 ---------   ---------   --------
                                                                                 
EXPENSES:                                                                        
  Property operating                               176,846     129,094     96,851
  Depreciation and amortization                    200,900     135,780     92,739
  Real estate taxes                                 98,830      69,173     53,941
  Repairs and maintenance                           43,000      31,779     24,614
  Advertising and promotion                         32,891      24,756     18,888
  Merger integration costs                               0       7,236          0
  Provision for credit losses                        5,992       3,460      2,858
  Other                                             18,678      14,914     12,630
                                                 ---------   ---------   ---------
       Total operating expenses                    577,137     416,192    302,521
                                                 ---------   ---------   ---------
                                                                                 
OPERATING INCOME                                   477,030     331,512    251,136
                                                                                 
INTEREST EXPENSE                                   287,823     202,182    150,224
                                                 ---------   ---------   ---------
INCOME BEFORE MINORITY INTEREST                    189,207     129,330    100,912
                                                                                 
MINORITY INTEREST                                  (5,270)     (4,300)    (2,681)
GAINS ON SALES OF ASSETS, NET                           20          88      1,871
                                                 ---------   ---------   ---------
INCOME BEFORE UNCONSOLIDATED ENTITIES              183,957     125,118    100,102
                                                                                 
INCOME FROM UNCONSOLIDATED ENTITIES                 19,176       9,545      1,403
                                                 ---------   ---------   ---------
INCOME BEFORE EXTRAORDINARY ITEMS                  203,133     134,663    101,505
                                                                                 
EXTRAORDINARY ITEMS                                     58     (3,521)    (3,285)
                                                 ---------   ---------   ---------
INCOME OF THE OPERATING PARTNERSHIP                203,191     131,142     98,220
                                                                                 
LESS--LIMITED PARTNERS' INTEREST IN                                              
    THE OPERATING PARTNERSHIP                       65,954      45,887     38,949
                                                 ---------   ---------   ---------
                                                                                 
NET INCOME                                         137,237      85,255     59,271
                                                                                 
PREFERRED DIVIDENDS                               (29,248)    (12,694)    (1,490)
                                                 ---------   ---------   ---------
                                                                                 
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS       $107,989     $72,561    $57,781
                                                 =========   =========   =========
                                                                                 
BASIC EARNINGS PER COMMON SHARE:                                                 
  Income before extraordinary items                  $1.08       $1.02      $1.08
  Extraordinary items                                 0.00      (0.03)     (0.04)
                                                 ---------   ---------   ---------
  Net income                                         $1.08       $0.99      $1.04
                                                 =========   =========   =========
                                                                                 
DILUTED EARNINGS PER COMMON SHARE:                                               
  Income before extraordinary items                  $1.08       $1.01      $1.08
  Extraordinary items                                 0.00      (0.03)     (0.04)
                                                 ---------   ---------   ---------
  Net income                                         $1.08       $0.98      $1.04
                                                 =========   =========   =========
                                                                          
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Shareholders' Equity
 Simon DeBartolo Group, Inc. Consolidated

 (Dollars in thousands)
                           
<CAPTION>
                                                           All                                Unrealized                    
                                                       Classes of   Capital in                 Gain on    Unamortized     Total
                                            Preferred    Common      Excess of   Accumulated  Long-Term   Restricted  Shareholders'
                                              Stock       Stock      Par Value     Deficit    Investment  Stock Award    Equity
                                           ----------- -----------  -----------  -----------  ----------- -----------  ------------
                                                                                                                      

<S>                                        <C>         <C>          <C>          <C>          <C>         <C>          <C>  
Balance at December 31, 1994                        $-          $6     $135,565    ($78,264)           $-          $-       $57,307
                                                                                                                                    
 Stock options exercised (6,876 shares)                                     164                                                 164
 Common stock issued, net                                                                                                           
   of issuance costs (9,797,563 shares)                          1      221,416                         -                   221,417
 Series A Preferred stock issued, net of                                                                                            
   issuance costs (4,000,000 shares)            99,923                                                                       99,923
 Stock incentive program (143,311 shares)                                 3,608                               (3,605)             3
 Amortization of stock incentive                                                                                  918           918
 Transfer out of limited partners' interest                                                                                        
    in the Operating Partnership                                       (94,035)                                            (94,035)
 Net income                                                                           59,271                                 59,271
 Distributions                                                                     (112,022)                              (112,022)
                                           ----------- -----------  -----------  -----------  ----------- -----------  ------------
Balance at December 31, 1995                    99,923           7      266,718    (131,015)            -     (2,687)       232,946
                                                                                                                                    
 Stock options exercised (372,151 shares)                                 8,677                                               8,677
 Common stock issued in connection                                                                                                 
   with DRC Merger (37,873,965 shares)                           3      922,276                                             922,279
 Class C Common stock issued in                                                                                                    
   connection with DRC Merger (4,000 shares)                                100                                                 100
 Common stock issued in connection with                                                                                            
   severance program (70,074 shares)                                      1,841                                               1,841
 Series B Preferred stock issued, net of                                                                                           
   issuance costs (8,000,000 shares)           192,989                                                                      192,989
 Stock incentive program (200,030 shares)                                 4,751                               (4,751)             -
   Amortization of stock incentive                                                                              2,084         2,084
 Transfer out of limited partners' interest                                                                                        
    in the Operating Partnership                                       (14,382)                                            (14,382)
 Net income                                                                           85,255                                 85,255
 Distributions                                                                     (126,836)                              (126,836)
 Other                                                                     (62)                                                (62)
                                           ----------- -----------  -----------  -----------  ----------- -----------  ------------
Balance at December 31, 1996                   292,912          10    1,189,919    (172,596)            -     (5,354)     1,304,891
                                                                                                                            
 Common stock issued to the public                                                                                    
   (5,858,887 shares)                                            1      190,026                                             190,027
 Common stock issued in connection                                                                                                 
   with acquisitions (2,193,037 shares)                                  70,000                                              70,000
 Stock options exercised (369,902 shares)                                 8,625                                               8,625
 Other common stock issued(82,484 shares)                                 2,268                                               2,268
 Stock incentive program (448,753 shares)                                14,016                              (13,262)           754
 Amortization of stock incentive                                                                                5,386         5,386
 Series C Preferred stock issued                                                                                                   
   (3,000,000 shares)                          146,072                                                                      146,072
 Conversion of Series A Preferred stock                                                                                            
   into 3,809,523 shares of common stock      (99,923)                   99,923                                                   -
 Transfer out of limited partners' interest                                                                                        
   in the Operating Partnership                                        (82,869)                                            (82,869)
 Unrealized gain on long-term investment                                                            2,420                     2,420
 Net income                                                                          137,237                                137,237
 Distributions                                                                     (227,949)                              (227,949)
                                           ----------- -----------  -----------  -----------  ----------- -----------  ------------
Balance at December 31, 1997                  $339,061         $11   $1,491,908   ($263,308)       $2,420   ($13,230)    $1,556,862
                                           =========== ===========  ===========  ===========  =========== ===========  ============
                                                                        
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Cash Flows
 Simon DeBartolo Group, Inc. Consolidated

 (Dollars in thousands)

<CAPTION>
                                                                                                  
                                                                     For the Year Ended December 31,
                                                                     1997          1996         1995
                                                                 -----------   -----------  -----------
<S>                                                              <C>            <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                                              
  Net income                                                       $137,237      $85,255      $59,271
    Adjustments to reconcile net income to net cash                                                     
     provided by operating activities_                                                                  
      Depreciation and amortization                                 208,539      143,582      101,262
      Extraordinary items                                               (58)       3,521        3,285
      Gains on sales of assets, net                                     (20)         (88)      (1,871)
      Limited partners' interest in Operating Partnership            65,954       45,887       38,949
      Straight-line rent                                             (9,769)      (3,502)      (1,126)
      Minority interest                                               5,270        4,300        2,681
      Equity in income of unconsolidated entities                   (19,176)      (9,545)      (1,403)
    Changes in assets and liabilities_                                                                
      Tenant receivables and accrued revenue                        (23,284)      (6,422)       5,502
      Deferred costs and other assets                               (30,203)     (12,756)     (14,290)
      Accounts payable, accrued expenses and other                                                      
        liabilities                                                  36,417      (13,768)       2,076
                                                                  -----------  -----------  -----------
  Net cash provided by operating activities                         370,907      236,464      194,336
                                                                  -----------  -----------  -----------
                                                                                                  
CASH FLOWS FROM INVESTING ACTIVITIES:                                                                   
  Acquisitions                                                     (980,427)     (56,069)     (88,272)
  Capital expenditures                                             (305,178)    (195,833)     (98,220)
  Cash from DRC Merger, acquisitions and consolidation                                                  
    of joint ventures, net                                           19,744       37,053        4,346
  Change in restricted cash                                          (2,443)       1,474            0
  Proceeds from sale of assets                                          599          399        2,550
  Investments in unconsolidated entities                            (47,204)     (62,096)     (22,180)
  Distributions from unconsolidated entities                        144,862       36,786        6,214
  Investments in and advances (to)/from Management                                                      
    Company                                                         (18,357)      38,544      (27,117)
  Other investing activities                                        (55,400)           0            0
                                                                  -----------  ----------- ------------
Net cash used in investing activities                            (1,243,804)    (199,742)    (222,679)
                                                                 ------------  ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                   
  Proceeds from sales of common and preferred                                                           
    stock, net                                                      344,438      201,704      242,377
  Minority interest distributions, net                                 (219)      (5,115)      (3,680)
  Distributions to shareholders                                    (227,949)    (166,640)    (104,785)
  Distributions to limited partners                                (122,442)     (90,763)     (72,941)
  Mortgage and other note proceeds, net of                                                              
     transaction costs                                            2,976,222    1,293,582      456,520
  Mortgage and other note principal payments                     (2,030,763)  (1,267,902)    (531,566)
  Other refinancing transaction                                     (21,000)           0            0
                                                                 ------------  -----------  -----------
  Net cash provided by (used in) financing activities               918,287      (35,134)     (14,075)
                                                                 ------------  -----------  -----------
                                                                                                        
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      45,390       1,588      (42,418)
                                                                                                  
CASH AND CASH EQUIVALENTS, beginning of period                        64,309      62,721      105,139
                                                                 ------------  -----------  -----------
CASH AND CASH EQUIVALENTS, end of period                            $109,699     $64,309      $62,721
                                                                 ============  ===========  ===========
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>

                          SIMON DEBARTOLO GROUP, INC.
                         NOTES TO FINANCIAL STATEMENTS
                                       
               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


1. ORGANIZATION

     Simon DeBartolo Group, Inc. (the "Company"), formerly known as Simon
Property Group, Inc., is a self-administered and self-managed real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as amended
(the "Code"). On August 9, 1996, the Company acquired the national shopping
center business of DeBartolo Realty Corporation ("DRC"), The Edward J.
DeBartolo Corporation and their affiliates as the result of the DRC Merger.
(see Note 3)

     Simon DeBartolo Group, L.P. ("the Operating Partnership") is a subsidiary
partnership of the Company. The Company, through the Operating Partnership, is
engaged primarily in the ownership, operation, management, leasing,
acquisition, expansion and development of real estate properties, primarily
regional malls and community shopping centers. On December 31, 1997, Simon
Property Group, L.P., a Delaware limited partnership ("SPG, LP"), merged (the
"Partnership Merger") into the Operating Partnership. Prior to the Partnership
Merger, the Operating Partnership and the Company held all of the partnership
interests of SPG, LP, which held interests in certain of the Portfolio
Properties (as defined below). As a result of the Partnership Merger, the
Operating Partnership now directly or indirectly owns or holds interests in all
of the Portfolio Properties and directly holds substantially all of the
economic interest in the Management Company (described below).

     As of December 31, 1997, the Operating Partnership owns or holds an
interest in 202 income-producing properties, which consist of 120 regional
malls, 72 community shopping centers, three specialty retail centers, four
mixed-use properties and three value-oriented super-regional malls in 33 states
(the "Properties"). The Operating Partnership also owns interests in one
specialty retail center and two community centers currently under construction
and nine parcels of land held for future development (collectively, the
"Development Properties", and together with the Properties, the "Portfolio
Properties"). At December 31, 1997 and 1996, the Company's ownership interest
in the Operating Partnership was 63.9% and 61.4%, respectively. The Operating
Partnership also holds substantially all of the economic interest in M.S.
Management Associates, Inc. (the "Management Company"). See Note 7 for a
description of the activities of the Management Company.

     The Operating Partnership is subject to risks incidental to the ownership
and operation of commercial real estate. These include, among others, the risks
normally associated with changes in the general economic climate, trends in the
retail industry, creditworthiness of tenants, competition for tenants, changes
in tax laws, interest rate levels, the availability of financing, and potential
liability under environmental and other laws. Like most retail properties, the
Operating Partnership's regional malls and community shopping centers rely
heavily upon anchor tenants. As of December 31, 1997, 248 of the approximately
715 anchor stores in the Properties were occupied by three retailers. An
affiliate of one of these retailers is a limited partner in the Operating
Partnership and  the Chief Operating Officer of another of these retailers is a
director of the Company.

2. BASIS OF PRESENTATION

     The accompanying consolidated financial statements of the Company include
all accounts of the Company, its wholly-owned qualified REIT subsidiaries and
its majority-owned subsidiary, the Operating Partnership. All significant
intercompany amounts have been eliminated. The accompanying consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles, which requires management to make estimates and
assumptions that affect the reported amounts of the Company's assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and revenues and expenses during the reported periods.
Actual results could differ from these estimates.

     Properties which are wholly-owned ("Wholly-Owned Properties") or owned
less than 100% and are controlled by the Operating Partnership ("Minority
Interest Properties") are accounted for using the consolidated method of
accounting. Control is demonstrated by the ability of the general partner to
manage day-to-day operations, refinance debt and sell the assets of the
partnership without the consent of the limited partner and the inability of the
limited partner to replace the general partner. Investments in partnerships and
joint ventures which represent noncontrolling 14.7% to 50.0% ownership
interests ("Joint Venture Properties") and the investment in the Management
<PAGE>
Company (see Note 7) are accounted for using the equity method of accounting.
These investments are recorded initially at cost and subsequently adjusted for
net equity in income (loss) and cash contributions and distributions.

     Net operating results of the Operating Partnership are allocated after
preferred distributions (see Note 11), based on its partners' ownership
interests. The Company's weighted average ownership interest in the Operating
Partnership during 1997, 1996 and 1995 was 62.1%, 61.2% and 60.3%,
respectively. At December 31, 1997 and 1996, the Company's ownership interest
was 63.9% and 61.4%, respectively.

     The deficit minority interest balance in the accompanying Consolidated
Balance Sheets represents outside partners' interests in the net equity of
certain Properties. Deficit minority interests were recorded when a partnership
agreement provided for the settlement of deficit capital accounts before
distributing the proceeds from the sale of partnership assets and/or from the
intent (legal or otherwise) and ability of the partner to fund additional
capital contributions.

3. THE DRC MERGER AND REAL ESTATE ACQUISITIONS AND DEVELOPMENTS

          THE DRC MERGER

     On August 9, 1996, the Company acquired the national shopping center
business of DRC for an aggregate value of $3.0 billion (the "DRC Merger"). The
acquired portfolio consisted of 49 regional malls, 11 community centers and 1
mixed-use Property. These Properties included 47,052,267 square feet of retail
space gross leasable area ("GLA") and 558,636 of office GLA. Pursuant to the
DRC Merger, the Company acquired all the outstanding common stock of DRC
(55,712,529 shares), at an exchange ratio of 0.68 shares of the Company's
common stock for each share of DRC common stock (the "Exchange Ratio"). A total
of 37,873,965 shares of the Company's common stock was issued by the Company,
to the DRC shareholders. DRC and the acquisition subsidiary merged. DRC became
a 99.9% subsidiary of the Company and changed its name to SD Property Group,
Inc. This portion of the transaction was valued at approximately $923,179,
based upon the number of DRC shares of common stock acquired (55,712,529
shares), the Exchange Ratio and the last reported sales price of the Company's
common stock on August 9, 1996 ($24.375). In connection therewith, the Company
changed its name to Simon DeBartolo Group, Inc.

     In connection with the DRC Merger, the general and limited partners of
SPG, LP contributed 49.5% (47,442,212 units of partnership interest) of the
total outstanding units of partnership interest ("Units") in SPG, LP to the
operating partnership of DRC, DeBartolo Realty Partnership, L.P. ("DRP, LP") in
exchange for 47,442,212 Units of partnership interest in DRP, LP, whose name
was changed to Simon DeBartolo Group, L.P. ("SDG, LP"). The Company retained a
50.5% partnership interest (48,400,641 Units) in SPG, LP but assigned its
rights to receive distributions of profits on 49.5% (47,442,212 Units) of the
outstanding Units of partnership interest in SPG, LP to SDG, LP. The limited
partners of DRP, LP approved the contribution made by the partners of SPG, LP
and simultaneously exchanged their 38.0% (34,203,623 Units) partnership
interest in DRP, LP, adjusted for the Exchange Ratio, for a smaller partnership
interest in SDG, LP. The exchange of the limited partners' 38.0% partnership
interest in DRP, LP for Units of SDG, LP has been accounted for as an
acquisition of minority interest by the Company and is valued based on the
estimated fair value of the consideration issued (approximately $566,900). The
Units of SDG, LP may under certain circumstances be exchangeable for common
stock of the Company on a one-for-one basis. Therefore, the value of the
acquisition of the DRP, LP limited partners' interest acquired was based upon
the number of DRP, LP Units exchanged (34,203,623), the Exchange Ratio and the
last reported sales price per share of the Company's common stock on August 9,
1996 ($24.375). The limited partners of SPG, LP received a 23.7% partnership
interest in SDG, LP (37,282,628 Units) for the contribution of their 38.9%
partnership interest in SPG, LP (37,282,628 Units) to SDG, LP. The interests
transferred by the partners of SPG, LP to DRP, LP have been appropriately
reflected at historical costs.

     Upon completion of the DRC Merger, the Company became a general partner of
SDG, LP with 36.9% (57,605,796 Units) of the outstanding partnership Units in
SDG, LP and became the managing general partner of SPG, LP with 24.3%
(37,873,965 Units in SPG, LP) of the outstanding partnership Units in SPG, LP.
The Company remained the sole general partner of SPG, LP with 1% of the
outstanding partnership Units (958,429 Units) and 49.5% interest in the capital
of SPG, LP, and SDG, LP became a special limited partner in SPG, LP with 49.5%
(47,442,212 Units) of the outstanding partnership Units in SPG, LP and an
additional 49.5% interest in the profits of SPG, LP. SPG, LP did not acquire
any interest in SDG, LP. Upon completion of the DRC Merger, the Company
directly and indirectly owned a controlling 61.2% (95,479,761 Units)
partnership interest in SDG, LP.
<PAGE>

     For financial reporting purposes, the completion of the DRC Merger
resulted in a reverse acquisition by the Company, using the purchase method of
accounting, directly or indirectly, of 100% of the net assets of DRP, LP for
consideration valued at $1.5 billion, including related transaction costs. The
purchase price was allocated to the fair value of the assets and liabilities.
Final adjustments to the purchase price allocation were not completed until
1997, however no material changes were recorded in 1997.

     Although the Company was the accounting acquirer, SDG, LP (formerly DRP,
LP) became the primary operating partnership through which the business of the
Company is being conducted. As a result of the DRC Merger, the Company's
initial operating partnership, SPG, LP, became a subsidiary of SDG, LP with 99%
of the profits allocable to SDG, LP and 1% of the profits allocable to the
Company. Cash flow allocable to the Company's 1% profit interest in SDG, LP was
absorbed by public company costs and related expenses incurred by the Company.
However, because the Company was the accounting acquirer and, upon completion
of the DRC Merger, acquired majority control of SDG, LP; SPG, LP is the
predecessor to SDG, LP for financial reporting purposes. Accordingly, the
financial statements of SDG, LP for the post-Merger periods reflect the reverse
acquisition of DRP, LP by the Company and for all pre-Merger comparative
periods, the financial statements of SDG, LP reflect the financial statements
of SPG, LP as the predecessor to SDG, LP for financial reporting purposes.

     As described in Note 1, on December 31, 1997, SPG, LP merged into the
Operating Partnership and as a result, the Operating Partnership now directly
or indirectly owns or holds interests in all of the Portfolio Properties and
directly holds substantially all of the economic interest in the Management
Company.

          ACQUISITIONS

     On January 26, 1998, the Operating Partnership acquired a regional mall in
Pensacola, Florida for $87,283, which included Units valued at $55,523 and the
assumption of $28,935 of mortgage indebtedness.

     On September 29, 1997, the Operating Partnership completed its cash tender
offer for all of the outstanding shares of beneficial interests of The Retail
Property Trust ("RPT"). RPT owned 98.8% of Shopping Center Associates ("SCA"),
which owned or had interests in twelve regional malls and one community center,
comprising approximately twelve million square feet of GLA in eight states.
Following the completion of the tender offer, the SCA portfolio was
restructured. The Operating Partnership exchanged its 50% interests in two SCA
properties to a third party for similar interests in two other SCA properties,
in which it had 50% interests, with the result that SCA now owns interests in a
total of eleven properties. Effective November 30, 1997, the Operating
Partnership also acquired the remaining 50% ownership interest in another of
the SCA properties. In addition, an affiliate of the Operating Partnership
acquired the remaining 1.2% interest in SCA. At the completion of these
transactions, the Operating Partnership now owns 100% of ten of the eleven SCA
properties, and a noncontrolling 50% ownership interest in the remaining
property. The total cost for the acquisition of RPT and related transactions is
estimated at $1,300,000, which includes shares of common stock of the Company
valued at approximately $50,000, Units valued at approximately $25,300, the
assumption of $398,500 of consolidated indebtedness and the Operating
Partnership's pro rata share of joint venture indebtedness of $76,750. Final
adjustments to the purchase price allocation were not completed at December 31,
1997. While no material changes to the allocation are anticipated, changes will
be recorded in 1998.

     Also in 1997, the Operating Partnership acquired a 100% ownership interest
in the Fashion Mall at Keystone at the Crossing, along with an adjacent
community center, the remaining 30% ownership interest and management contract
of Virginia Center Commons, a noncontrolling 50% ownership of Dadeland Mall and
an additional noncontrolling 48% ownership interest of West Town Mall,
increasing its total ownership interest to 50%. The Operating Partnership paid
an aggregate purchase price of approximately $322,000 for these Properties,
which included Units valued at $1,100, common stock of the Company valued at
approximately $20,000 and the assumption of $64,772 of mortgage indebtedness,
with the remainder paid in cash.

     In 1996, the Operating Partnership acquired the remaining 50% ownership
interest in two regional malls at an aggregate purchase price of $113,100 plus
472,410 Units.
     
     During 1995, the Operating Partnership acquired the remaining ownership
interest in two regional malls, an additional controlling 50% interest in a
third mall and a controlling 75% ownership interest in a joint venture
redevelopment project. The aggregate purchase price for the regional mall
interests acquired included $18,500; 2,142,247 Units; and the assumption of
$41,250 of mortgage indebtedness. The 75% interest in the redevelopment project
was acquired for $11,406.

<PAGE>
          DEVELOPMENTS

     During 1997, the Operating Partnership opened four new Joint Venture
Properties at an aggregate cost of approximately $550,000 (of which the
Operating Partnership's share was approximately $206,000): Indian River
Commons, an approximately 265,000 square-foot community center, which is
immediately adjacent to an existing regional mall Property, opened in March of
1997; The Source, an approximately 730,000 square-foot regional mall opened in
September; Grapevine Mills, a 1.2 million square-foot value-oriented super-
regional mall, opened in October; and Arizona Mills, a 1.2 million square-foot
value-oriented super-regional mall, opened in November.

     During 1996, the Operating Partnership opened one new approximately
$75,000 Wholly-Owned Property and three Joint Venture Properties at an
aggregate cost of approximately $250,000 (of which the Operating Partnership's
share was approximately $83,000): Cottonwood Mall, an approximately 750,000
square-foot wholly-owned regional mall opened in July; Ontario Mills, an
approximately 1.3 million square-foot value oriented super-regional mall,
opened in November; Indian River Mall, an approximately 750,000 square-foot
regional mall, also opened in November; and The Tower Shops, an approximately
60,000 square-foot specialty retail center, opened in November as well.

     The Operating Partnership also opened three new Joint Venture Properties
during 1995 at an aggregate cost of approximately $370,000 (of which the
Operating Partnership's share was approximately $133,000): Circle Centre, an
approximately 800,000 square-foot regional mall, opened in September; Seminole
Towne Center, an approximately 1.1 million square-foot regional mall, also
opened in September; and Lakeline Mall, an approximately 1.1 million square-
foot regional mall, opened in October.

          PRO FORMA

     The following unaudited pro forma summary financial information combines
the consolidated results of operations of the Company as if the DRC Merger and
the RPT acquisition had occurred as of January 1, 1996, and were carried
forward through December 31, 1997. Preparation of the pro forma summary
information was based upon assumptions deemed appropriate by the Company. The
pro forma summary information is not necessarily indicative of the results
which actually would have occurred if the DRC Merger and the RPT acquisition
had been consummated at January 1, 1996, nor does it purport to represent the
future financial position and results of operations for future periods.

                                                 YEAR ENDED DECEMBER 31,
                                                 ------------------------
                                                     1997         1996    
                                                 -----------  ----------- 
Revenue                                           $1,172,082   $1,099,903  
Net income of the Operating Partnership              195,372      154,229  
Net income available to holders of common stock      103,118       86,845
Net income per share                                   $1.02        $0.89  
Net income per share - assuming dilution               $1.02        $0.89  
Weighted average number of shares of common                                
stock outstanding                                101,353,723   97,991,599
Weighted average number of shares of common                                
stock outstanding - assuming dilution            101,737,787   98,127,131

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          INVESTMENT PROPERTIES

     Investment Properties are recorded at cost (predecessor cost for
Properties acquired from Melvin Simon, Herbert Simon and certain of their
affiliates (the "Simons")). Investment Properties for financial reporting
purposes are reviewed for impairment on a Property-by-Property basis whenever
events or changes in circumstances indicate that the carrying value of
investment Properties may not be recoverable. Impairment of investment
Properties is recognized when estimated undiscounted operating income is less
than the carrying value of the Property. To the extent an impairment has
occurred, the excess of carrying value of the Property over its estimated fair
value will be charged to income. The Operating Partnership adopted Statement of
Financial Accounting Standards ("SFAS") No. 121 (Accounting for Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of) on January 1,
1996. The adoption of this pronouncement had no impact on the accompanying
consolidated financial statements.
<PAGE>

     Investment Properties include costs of acquisitions, development and
predevelopment, construction, tenant allowances and improvements, interest and
real estate taxes incurred during construction, certain capitalized
improvements and replacements, and certain allocated overhead. Depreciation on
buildings and improvements is provided utilizing the straight-line method over
an estimated original useful life, which is generally 35 years or the term of
the applicable tenant's lease in the case of tenant inducements. Depreciation
on tenant allowances and improvements is provided utilizing the straight-line
method over the term of the related lease.

     Certain improvements and replacements are capitalized when they extend the
useful life, increase capacity, or improve the efficiency of the asset. All
other repair and maintenance items are expensed as incurred.

          CAPITALIZED INTEREST

     Interest is capitalized on projects during periods of construction.
Interest capitalized by the Company during 1997, 1996 and 1995 was $11,589,
$5,831 and $1,515, respectively.

          DEFERRED COSTS

     Deferred costs consist primarily of financing fees incurred to obtain long-
term financing, costs of interest rate protection agreements, and internal and
external leasing commissions and related costs. Deferred financing costs,
including interest rate protection agreements, are amortized on a straight-line
basis over the terms of the respective loans or agreements. Deferred leasing
costs are amortized on a straight-line basis over the terms of the related
leases. Deferred costs consist of the following:

                                       DECEMBER 31,

                                 ------------------------

                                    1997         1996
                                 ----------   ----------
Deferred financing costs            $72,348       $64,931
Leasing costs and other             121,060        97,380
                                 ----------   ----------
                                    193,408       162,311
Lessaccumulated amortization         87,666        70,386
                                 ----------   ----------
       Deferred costs, net         $105,742       $91,925
                                 ==========    ==========

     Interest expense in the accompanying Consolidated Statements of Operations
includes amortization of deferred financing costs of $8,338, $8,434 and $8,523
for 1997, 1996 and 1995, respectively, and has been reduced by amortization of
debt premiums and discounts of $699, $632 and $0 for 1997, 1996 and 1995,
respectively.

          REVENUE RECOGNITION

     The Operating Partnership, as a lessor, has retained substantially all of
the risks and benefits of ownership of the investment Properties and accounts
for its leases as operating leases. Minimum rents are accrued on a straight-
line basis over the terms of their respective leases. Overage rents are
recognized when earned.

     Reimbursements from tenants for real estate taxes and other recoverable
operating expenses are recognized as revenue in the period the applicable
expenditures are incurred.
<PAGE>
          ALLOWANCE FOR CREDIT LOSSES

     A provision for credit losses is recorded based on management's judgment
of tenant creditworthiness. The activity in the allowance for credit losses
during 1997, 1996 and 1995 was as follows:

                     Balance at    Provision     Accounts      Balance at
                     Beginning     for Credit     Written        End of
     Year Ended       of Year        Losses         Off           Year
                                                               
  December 31, l997      $7,918        $5,992        $(106)       $13,804
                                                                         
  December 31, l996      $5,485        $3,460      $(1,027)        $7,918
                                                                         
  December 31, l995      $4,169        $2,858      $(1,542)        $5,485

          INCOME TAXES

     The Company  and certain of its subsidiaries are taxed as REITs under
Sections 856 through 860 of the Code and applicable Treasury regulations
relating to REIT qualification for 1994 and subsequent years. In order to
maintain qualification as a REIT, the Company is required to distribute at
least 95% of its taxable income to shareholders and meet certain other asset
and income tests as well as other requirements. It is the intention of
management to continue to adhere to these requirements and maintain the
Company's REIT status. As a REIT, the Company will generally not be liable for
federal corporate income taxes. Thus, no provision for federal income taxes has
been included in the accompanying consolidated financial statements. If the
Company fails to qualify as a REIT in any taxable year, it will be subject to
federal income taxes on its taxable income at regular corporate tax rates.
State income taxes were not significant in 1997, 1996, or 1995.

          PER SHARE DATA

     The Company adopted SFAS No. 128 (Earnings Per Share) in the current
period. Basic earnings per share is based on the weighted average number of
shares of common stock outstanding during the period. The weighted average
number of shares used in the computation for 1997, 1996 and 1995 was
99,920,280; 73,585,602; and 55,312,078, respectively. In accordance with SFAS
No. 128, 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 diluted weighted average number of shares used in the computation
for 1997, 1996 and 1995 was 100,304,344; 73,721,134; and 55,421,692,
respectively. Units held by limited partners in the Operating Partnership may
be exchanged for shares of common stock of the Company on a one-for-one basis
in certain circumstances and therefore are not dilutive (see Note 11). The
Company's Series A, Series B and Series C preferred stock have not been
considered in the computations of diluted earnings per share for any of the
periods presented, as they did not have a dilutive effect. Accordingly, the
increase in weighted average shares outstanding under the diluted method over
the basic method in every period presented for the Company is due entirely to
the effect of outstanding options under both the Employee Plan and the Director
Plan (see Note 11). There were no changes in earnings from basic earnings per
share to diluted earnings per share for any of the periods presented.

     It is the Company's policy to accrue distributions when they are declared.
The Company declared distributions in 1997 aggregating $2.01 per share. In 1996
accrued distributions totaled $1.63 per share, which included a $0.1515
distribution on August 9, 1996, in connection with the DRC Merger, designated
to align the time periods of distribution payments of the merged companies. The
current annual distribution rate is $2.02 per share. The following is a summary
of distributions per share declared in 1997 and 1996, which represented a
return of capital measured using generally accepted accounting principles:

                                                             
                                       FOR THE YEAR ENDED
                                          DECEMBER 31,

                                       -------      --------  
  DISTRIBUTIONS PER SHARE              1997         1996     
                                       -------      --------  
  From book net income                   $1.08         $0.99  
  Representing return of capital          0.93          0.64  
                                       -------      --------  
     Total distributions                 $2.01         $1.63  
                                       =======      ========  
<PAGE>
     On a federal income tax basis, 35% of the 1997 distributions and 64% of
the 1996 distributions represented return of capital.

          STATEMENTS OF CASH FLOWS

     For purposes of the Statements of Cash Flows, all highly liquid
investments purchased with an original maturity of 90 days or less are
considered 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
Dutch auction securities. Cash and cash equivalents do not include restricted
cash of $8,553 and $6,110 as of December 31, 1997 and 1996, respectively. Cash
is restricted at December 31, 1997 primarily to pay for construction costs for
the phase II expansion of The Forum Shops at Caesar's, and in 1996 cash was
restricted primarily for renovations, redevelopment and other activities of the
17 properties which collateralized the commercial pass-through certificates
that were retired in 1997 (see Note 9).

     Cash paid for interest, net of any amounts capitalized, during 1997, 1996
and 1995 were $282,501; $197,796; and $142,345, respectively.

          NONCASH TRANSACTIONS

     Please refer to Notes 3 and 11 for a discussion of noncash transactions.

          RECLASSIFICATIONS

     Certain reclassifications have been made to the prior year financial
statements to conform to the current year presentation. These reclassifications
have no impact on net operating results previously reported.

5. INVESTMENT PROPERTIES

     Investment properties consist of the following:

                                                  DECEMBER 31,
                                               1997          1996
                                            -----------   -----------
  Land                                       $1,253,953    $1,003,221
  Buildings and improvements                  5,560,112     4,270,244
                                            -----------   -----------
  Total land, buildings and improvements      6,814,065     5,273,465
                                                                     
  Furniture, fixtures and equipment              53,289        27,556
                                            -----------   -----------
  Investment properties at cost               6,867,354     5,301,021
  Less_accumulated depreciation                 461,792       279,072
                                            -----------   -----------
  Investment properties at cost, net         $6,405,562    $5,021,949
                                            ===========   ===========


     Building and improvements includes $158,609 and $86,461 of construction in
progress at December 31, 1997 and 1996, respectively.


6. INVESTMENT IN PARTNERSHIPS AND JOINT VENTURES

     As of December 31, 1997 and 1996, the unamortized excess of the Operating
Partnership's investment over its share of the equity in the underlying net
assets of the partnerships and joint ventures ("Excess Investment") was
approximately $364,119 and $232,927, respectively. This Excess Investment is
being amortized generally over the life of the related Properties. Amortization
included in income from unconsolidated entities for the years ended December
31, 1997 and 1996 was $13,878 and $5,127, respectively.
<PAGE>
     Summary financial information of partnerships and joint ventures accounted
for using the equity method and a summary of the Operating Partnership's
investment in and share of income from such partnerships and joint ventures
follows.

                                                        DECEMBER 31,
                                                 -------------------------
BALANCE SHEETS                                      1997           1996
ASSETS:                                           ----------     ----------
Investment properties at cost, net                $2,734,686     $1,887,555
Cash and cash equivalents                            101,582         61,267
Tenant receivables                                    87,008         58,548
Other assets                                          71,873         69,365
                                                  ----------     ----------
Total assets                                      $2,995,149     $2,076,735
                                                  ==========     ==========
LIABILITIES AND PARTNERS' EQUITY:                                          
Mortgages and other notes payable                 $1,888,512     $1,121,804
Accounts payable, accrued expenses and other                               
  liabilities                                        212,543        213,394
                                                  ----------     ----------
Total liabilities                                  2,101,055      1,335,198
  Partners' equity                                   894,094        741,537
                                                  ----------     ----------
Total liabilities and partners' equity            $2,995,149     $2,076,735
                                                  ==========     ==========
THE OPERATING PARTNERSHIP'S SHARE OF:                                      
Total assets                                      $1,009,691       $602,084
                                                  ==========     ==========
Partners' equity                                    $227,458       $144,376
Add: Excess Investment                               364,119        232,927
                                                  ----------     ----------
Operating Partnership's net Investment in Joint                            
  Ventures                                          $591,577       $377,303
                                                  ==========     ==========

                                             FOR THE YEAR ENDED DECEMBER 31,

                                            --------------------------------

   STATEMENTS OF OPERATIONS                   1997        1996        1995

REVENUE:                                    --------     --------    --------
  Minimum rent                              $256,100     $144,166     $83,905
  Overage rent                                10,510        7,872       2,754
  Tenant reimbursements                      120,380       73,492      39,500
  Other income                                19,364       11,178      13,980
                                            --------     --------    --------
Total revenue                                406,354      236,708     140,139
                                                                             
OPERATING EXPENSES:                                                          
  Operating expenses and other               144,256       88,678      46,466
  Depreciation and amortization               85,423       50,328      26,409
                                            --------     --------    --------
Total operating expenses                     229,679      139,006      72,875
                                            --------     --------    --------
OPERATING INCOME                             176,675       97,702      67,264
INTEREST EXPENSE                              96,675       48,918      28,685
EXTRAORDINARY ITEMS                          (1,925)      (1,314)     (2,687)
                                            --------     --------    --------
NET INCOME                                   $78,075      $47,470     $35,892
                                            ========     ========    ========
THIRD-PARTY INVESTORS' SHARE OF NET INCOME                                   
                                              55,507       38,283      30,752
                                            --------     --------    --------
THE OPERATING PARTNERSHIP'S SHARE                                            
   OF NET INCOME                             $22,568       $9,187      $5,140
AMORTIZATION OF EXCESS INVESTMENT             13,878        5,127          --
                                            --------     --------    --------
INCOME FROM UNCONSOLIDATED ENTITIES           $8,690       $4,060      $5,140
                                            ========     ========    ========

     The net income or net loss for each partnership and joint venture is
allocated in accordance with the provisions of the applicable partnership or
joint venture agreement. The allocation provisions in these agreements are not
always consistent with the ownership interests held by each general or limited
partner or joint venturer, primarily due to partner preferences. The Operating
Partnership receives substantially all of the economic benefit of Biltmore
Square, Chesapeake Square, Northfield Square and Port Charlotte Town Center,
resulting from advances made to these joint ventures.
<PAGE>

7. INVESTMENT IN MANAGEMENT COMPANY

     The Operating Partnership holds 80% of the outstanding common stock, 5% of
the outstanding voting common stock, and all of the preferred stock of the
Management Company. The remaining 20% of the outstanding common stock of the
Management Company (representing 95% of the voting common stock) is owned
directly by Melvin Simon, Herbert Simon and David Simon. The Management
Company, including its consolidated subsidiaries, provides management, leasing,
development, accounting, legal, marketing and management information systems
services to one Wholly-Owned Property and 27 Minority Interest and Joint
Venture Properties, Melvin Simon & Associates, Inc. ("MSA"), and certain other
nonowned properties. Because the Operating Partnership exercises significant
influence over the financial and operating policies of the Management Company,
it is reflected in the accompanying statements using the equity method of
accounting.

     In connection with the DRC Merger, the Management Company purchased 95% of
the voting stock (665 shares of common stock) of DeBartolo Properties
Management, Inc. ("DPMI"), a DRC management company, for $2,500 in cash. DPMI
provides architectural, design, construction and other services primarily to
the Properties. During 1996, DPMI formed a captive insurance company, which
provided property damage and general liability insurance for certain Properties
in 1997 and 1996. The Operating Partnership paid a total of $9,628 and $2,383
to this wholly-owned subsidiary of the Management Company for insurance
coverage during 1997 and 1996, respectively. The Management Company accounts
for both DPMI and the captive insurance company using the consolidated method
of accounting.

     During 1995, the Management Company liquidated its interest in a
partnership investment which held a 9.8-acre parcel of land, resulting in a
loss of $958 to the Management Company. Further, an undeveloped two-acre parcel
of land, for which the Management Company held a mortgage, was sold in December
1995,  resulting in a loss of $3,949 for the Management Company.

     Management, development and leasing fees charged to the Operating
Partnership relating to the Minority Interest Properties were $8,343, $6,916
and $5,353 for the years ended December 31, 1997, 1996 and 1995, respectively.
Architectural, contracting and engineering fees charged to the Operating
Partnership for 1997 and 1996 were $67,258 and $21,650, respectively. Fees for
services provided by the Management Company to MSA were $3,073, $4,000 and
$4,572 for the years ended December 31, 1997, 1996 and 1995, respectively.

     At December 31, 1997 and 1996, total notes receivable and advances due
from the Management Company and consolidated affiliates were $93,809 and
$75,452, respectively, which included $11,474 due from DPMI in 1997 and 1996.
Unpaid interest income receivable from the Management Company at December 31,
1997 and 1996, was $485 and $0, respectively. All preferred dividends due from
the Management Company were paid by December 31, 1997 and 1996.

     Summarized consolidated financial information of the Management Company
and a summary of the Operating Partnership's investment in and share of income
(loss) from the Management Company follows.

                                                              
                                                         DECEMBER 31,
                                                     --------------------
BALANCE SHEET DATA:                                    1997         1996
                                                      --------     --------
Total assets                                          $137,750     $110,263
Notes payable  to the Operating Partnership at 11%,     66,859       63,978
  due 2008
Shareholders' equity (deficit)                             482     (11,879)
                                                                           
THE OPERATING PARTNERSHIP'S SHARE OF:                                      
  Total assets                                        $128,596      $96,316
                                                      ========     ========
  Shareholders' equity (deficit)                        $3,088    $(13,567)
                                                      ========     ========
<PAGE>
<TABLE>
                                                  FOR THE YEAR ENDED DECEMBER 31,
  OPERATING DATA:                                   1997        1996       1995
                                                   -------     -------    --------
  <S>                                              <C>          <C>       <C>
  Total revenue                                     85,542      78,665      43,118
  Operating Income                                  13,766       9,073       1,986
                                                   -------     -------    --------
  Net Income (Loss) Available for                                                 
    Common Shareholders                            $12,366      $7,673    $(4,321)
                                                   =======     =======    ========
 The Operating Partnership's Share of Net Income                                  
  (Loss) after intercompany profit elimination                                    
                                                   $10,486      $5,485    $(3,737)
                                                   =======     =======    ========
</TABLE>
     The Operating Partnership manages substantially all Wholly-Owned
Properties and substantially all of the Minority Interest and Joint Venture
Properties that were owned by DRC prior to the DRC Merger, and, accordingly, it
reimburses the Administrative Services Partnership ("ASP"), a subsidiary of the
Management Company, for costs incurred, including management, leasing,
development, accounting, legal, marketing, and management information systems.
Substantially all employees (other than direct field personnel) are employed by
ASP which is owned 1% by the Operating Partnership and 99% by the Management
Company. The Management Company records costs net of amounts reimbursed by the
Operating Partnership. Common costs are allocated based on payroll and related
costs. In management's opinion, allocations under the cost-sharing arrangement
are reasonable. The Operating Partnership's share of allocated common costs was
$35,341, $29,262 and $21,874 for 1997, 1996 and 1995, respectively.

     Amounts payable by the Operating Partnership under the cost-sharing
arrangement and management contracts were $1,725 and $3,288 at December 31,
1997 and 1996, respectively, and are reflected in accounts payable and accrued
expenses in the accompanying Consolidated Balance Sheets.



8. OTHER INVESTMENT

     On June 16, 1997, the Operating Partnership purchased 1,408,450 shares of
common stock of Chelsea GCA Realty, Inc. ("Chelsea"), a publicly traded REIT,
for $50,000 using borrowings from the Operating Partnership's Credit Facility
(see below). The shares purchased represent approximately 9.2% of Chelsea's
outstanding common stock. In addition, the Operating Partnership and Chelsea
announced that they have formed a strategic alliance to develop and acquire
manufacturer's outlet shopping centers with 500,000 square feet or more of GLA
in the United States. In accordance with SFAS No. 115 "Accounting for Certain
Investments in Debt and Equity Securities", the Operating Partnership's shares
of Chelsea stock are classified as `available-for-sale securities'.
Accordingly, the investment is being reflected at its market value of $53,785,
as of December 31, 1997, in the accompanying consolidated balance sheets in
other investments. Management currently does not intend to sell these
securities. The unrealized gain of $3,785, of which the Company's share was
$2,420, is reflected in shareholders' equity, with the remaining $1,365 being
reflected in the limited partners' interest in the Operating Partnership.
<PAGE>

9. INDEBTEDNESS

     Mortgages and other notes payable consist of the following:

                                               December 31,
                                            1997          1996
 FIXED-RATE DEBT                         -----------    ----------
                                                                  
 Mortgages, net                           $2,006,552    $2,076,428
 Unsecured public notes, net                 905,547       249,161
 Medium-term notes, net                      279,229            --
 Commercial mortgage pass-through                                 
  certificates, net                          175,000       377,650
 6 3/4% Putable Asset Trust                                       
  Securities, net                            101,297       101,472
                                         -----------    ----------
Total fixed-rate debt                      3,467,625     2,804,711
                                                                  
 VARIABLE-RATE DEBT                                               
                                                                  
 Mortgages, net                              451,820       561,985
                                                                  
 Credit facility                             952,000       230,000
                                                                  
 Unsecured term loans                        133,000            --
                                                                  
 Commercial mortgage pass-through             50,000        85,288
  certificates, net
                                                                  
 Construction loan                            23,545            --
                                         -----------    ----------
Total variable-rate debt                    1,610,365       877,273
                                          -----------    ----------
  Total mortgages and other notes                                 
  payable                                 $5,077,990    $3,681,984
                                         ===========    ==========

          FIXED-RATE DEBT

     Mortgage Loans & Other Notes. The fixed-rate mortgage loans bear interest
ranging from 5.81% to 10.00% (weighted average of 7.71% at December 31, 1997),
require monthly payments of principal and/or interest and have various due
dates through 2027 (average maturity of 6.5 years). Certain of the Properties
are pledged as collateral to secure the related mortgage note. The fixed and
variable mortgage notes are nonrecourse and certain ones have partial
guarantees by affiliates of approximately $583,158. Certain of the Properties
are cross-defaulted and cross-collateralized as part of a group of properties.
Under certain of the cross-default provisions, a default under any mortgage
included in the cross-defaulted package may constitute a default under all
such mortgages and may lead to acceleration of the indebtedness due on each
Property within the collateral package. Certain of the Properties are subject
to financial performance covenants relating to debt-to-market capitalization,
minimum earnings before interest, taxes, depreciation and amortization
("EBITDA") ratios and minimum equity values.

     Unsecured Notes. The Operating Partnership has consolidated nonconvertible
investment-grade unsecured debt securities aggregating $905,547 (the "Notes")
at December 31, 1997. The Notes pay interest semiannually, and bear interest
rates ranging from 6.75% to 7.625% (weighted average of 6.95%), and have
various due dates through 2009 (average maturity of 8.2 years). Certain of the
Notes are guaranteed by the Operating Partnership and contain leverage ratios
and minimum EBITDA and unencumbered EBITDA ratios.

     The Operating Partnership currently has $850,000 remaining available for
issuance on its $1,000,000 shelf registration with the SEC, which became
effective in October 1997.
<PAGE>
     Medium-Term Notes. On May 15, 1997, the Operating Partnership established
a Medium-Term Note ("MTN") program. On June 24, 1997, the Operating Partnership
completed the sale of $100,000 of notes under the MTN program, which bear
interest at 7.125% and have a stated maturity of June 24, 2005. On September
10, 1997, the Operating Partnership issued an additional $180,000 principal
amount of notes under its MTN program. These notes mature on September 20, 2007
and bear interest at 7.125% per annum. The net proceeds from each of these
sales were used primarily to pay down the Credit Facility (defined below).

     Commercial Mortgage Pass-Through Certificates. Prior to September 2, 1997,
DeBartolo Capital Partnership ("DCP"), a Delaware general partnership whose
interest is owned 100% by affiliated entities, held commercial mortgage pass-
through certificates in the face amount of approximately $453,000. This debt
was secured by assets of 17 of the Wholly-Owned Properties. On September 2,
1997, the Operating Partnership refinanced these certificates along with a
$48,000 mortgage loan, resulting in releases of mortgages encumbering 18 of the
Properties.

     The Operating Partnership subsequently issued a series of six classes of
commercial mortgage pass-through certificates cross-collaterallized by seven of
such Properties, which matures on December 19, 2004. Five of the six classes
totaling $175,000 bear fixed interest rates ranging from 6.716% to 8.233%, with
the remaining $50,000 class bearing interest at LIBOR plus 0.365%. In addition,
the Operating Partnership used the net proceeds from the sale of the $180,000
MTN's described above and net borrowings under the Credit Facility of
approximately $114,000 to retire the original certificates and the $48,000
mortgage loan.

     6 3/4% Putable Asset Trust Securities (PATS). The PATS, issued December
1996, pay interest semiannually at 6.75% and mature in 2003. These notes
contain leverage ratios and minimum EBITDA and unencumbered EBITDA ratios.

          VARIABLE-RATE DEBT

     Mortgages and Other Notes. The variable-rate mortgage loans and other
notes bear interest ranging from 6.00% to 7.74% (weighted average of 6.58% at
December 31, 1997) and are due at various dates through 2004 (average maturity
of 2.5 years). Certain of the Properties are subject to collateral, cross-
default and cross-collateral agreements, participation agreements or other
covenants relating to debt-to-market capitalization, minimum EBITDA ratios and
minimum equity values.

     Credit Facility. The Operating Partnership has a $1,250,000 unsecured
revolving credit facility (the "Credit Facility") which  initially matures in
September of 1999, with a one-year extension available at the option of the
Operating Partnership. The Credit Facility bears interest at LIBOR plus 65
basis points. The maximum and average amounts outstanding during 1997 under the
Credit Facility were $952,000 and $461,362, respectively. The Credit Facility
is primarily used for funding acquisition, renovation and expansion and
predevelopment opportunities. At December 31, 1997, the Credit Facility had an
effective interest rate of 6.56%, with $284,300 available after outstanding
borrowings and letters of credit. The Credit Facility contains financial
covenants relating to a capitalization value, minimum EBITDA and unencumbered
EBITDA ratios and minimum equity values.

     Unsecured Term Loans. The Operating Partnership has two unsecured term
loans outstanding at December 31, 1997. On June 30, 1997, the Operating
Partnership closed a $70,000 unsecured term loan which bears interest at LIBOR
plus 0.75% and matures on September 29, 1998. On September 17, 1997, the
Operating Partnership retired a $63,000 mortgage loan secured by Lincolnwood
Towne Center with a second unsecured term loan, which bears interest at LIBOR
plus 0.75% and matures on January 31, 1999.

<PAGE>
          DEBT MATURITY AND OTHER

     As of December 31, 1997, scheduled principal repayments on indebtedness
were as follows:

       1998                                              $390,835
       1999                                             1,209,011
       2000                                               291,740
       2001                                               250,091
       2002                                               496,321
       Thereafter                                       2,442,335
                                                      -----------
       Total principal maturities                       5,080,333
       Net unamortized debt premiums                      (2,343)
                                                      -----------
       Total mortgages and other notes payable         $5,077,990
                                                      ===========

     Debt premiums and discounts are being amortized over the terms of the
related debt instruments. Certain mortgages and notes payable may be prepaid
but are generally subject to a prepayment of a yield-maintenance premium.

     The unconsolidated partnerships and joint ventures have $1,888,512 and
$1,121,804 of mortgages and other notes payable at December 31, 1997 and 1996,
respectively. The Operating Partnership's share of this debt was $770,776 and
$448,218 at December 31, 1997 and 1996, respectively. This debt becomes due in
installments over various terms extending to December 28, 2009, with interest
rates ranging from 6.09% to 9.75% (weighted average rate of 7.34% at December
31, 1997). The debt matures $228,626 in 1998; $20,490 in 1999; $222,076 in
2000; $228,475 in 2001; $310,681 in 2002; and $878,164 thereafter.

     The $58 net extraordinary gain in 1997 results from a $31,136 gain
realized on the forgiveness of debt and an $8,409 gain from write-offs of net
unamortized debt premiums, partially offset by the $21,000 acquisition of the
contingent interest feature on four loans, and $18,487 of prepayment penalties
and write-offs of mortgage costs associated with early extinguishments of debt.
In addition, net extraordinary losses resulting from the early extinguishment
or refinancing of debt of $3,521 and $3,285 were incurred for the years ended
December 31, 1996 and 1995, respectively.

          INTEREST RATE PROTECTION AGREEMENTS

     The Operating Partnership has entered into certain interest rate
protection agreements, in the form of "cap" or "swap" arrangements, with
respect to the majority of its variable-rate mortgages and other notes payable.
Cap arrangements, which effectively limit the amount by which variable interest
rates may rise, have been entered into for $380,379 principal amount of
consolidated debt and cap LIBOR at rates ranging from 5.0% to 16.765% through
the related debt's maturity. One swap arrangement, which effectively fixes the
Operating Partnership's interest rate on the respective borrowings, has been
entered into for $50,000 principal amount of consolidated debt, which matures
September 2001. In addition, swap arrangements on an additional $148,000 of
consolidated variable-rate debt were obtained in January of 1998. Costs of the
caps and swaps ($7,580) are amortized over the life of the agreements. The
unamortized balance of the cap and swap arrangements was $2,006 as of December
31, 1997. The Operating Partnership's hedging activity as a result of interest
swaps and caps resulted in net interest savings of $1,586, $2,165 and $3,528
for the years ended December 31, 1997, 1996 and 1995, respectively. This did
not materially impact the Operating Partnership's weighted average borrowing
rate.

          FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying value of variable-rate mortgages and other loans represents
their fair values. The fair value of fixed-rate mortgages and other notes
payable was approximately $3,900,000 and $3,000,000 at December 31, 1997 and
1996, respectively. The fair value of the interest rate protection agreements
at December 31, 1997 and 1996, was ($692) and $5,616, respectively. At December
31, 1997 and 1996, the estimated discount rates were 6.66% and 7.25%,
respectively.
<PAGE>

10. RENTALS UNDER OPERATING LEASES

     The Operating Partnership receives rental income from the leasing of
retail and mixed-use space under operating leases. Future minimum rentals to be
received under noncancelable operating leases for each of the next five years
and thereafter, excluding tenant reimbursements of operating expenses and
percentage rent based on tenant sales volume, as of December 31, 1997, are as
follows:

                  1998                       $623,652
                  1999                        580,561
                  2000                        521,398
                  2001                        469,331
                  2002                        420,169
                  Thereafter                1,768,777
                                           ----------
                                           $4,383,888

     Approximately 2.9% of future minimum rents to be received are attributable
to leases with JCPenney Company, Inc., an affiliate of a limited partner in the
Operating Partnership.

11. CAPITAL STOCK

     Under its Charter, as supplemented, the Company is authorized to issue
650,000,000 shares, par value $0.0001 per share, of capital stock. The
authorized shares of capital stock consist of 9,200,000 shares of Series B
preferred stock, 3,000,000 shares of Series C preferred stock, 375,796,000
shares of common stock, 12,000,000 shares of Class B common stock, 4,000 shares
of Class C common stock, and 250,000,000 shares of excess stock.

     The Board of Directors is authorized to reclassify the excess stock into
one or more additional classes and series of capital stock to establish the
number of shares in each class or series and to fix the preferences, conversion
and other rights, voting powers, restrictions, limitations as to dividends, and
qualifications and terms and conditions of redemption of such class or series,
without any further vote or action by the shareholders. The issuance of
additional classes or series of capital stock may have the effect of delaying,
deferring or preventing a change in control of the Company without further
action of the shareholders. The ability of the Board of Directors to issue
additional classes or series of capital stock, while providing flexibility in
connection with possible acquisitions and other corporate purposes, could have
the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from acquiring, a majority of the outstanding voting
stock of the Company. The Company has no current plans to issue any additional
classes or series of stock, except as described in Note 15.

     The holders of common stock of the Company are entitled to one vote for
each share held of record on all matters submitted to a vote of shareholders,
other than for the election of directors. The holders of Class B common stock
are entitled to elect four of the thirteen members of the board. The holder of
the Class C common stock, which was issued in connection with the DRC Merger,
as described below, is entitled to elect two of the thirteen members of the
board. The Class B and Class C shares can be converted into shares of common
stock at the option of the holders. Shares of Class B common stock convert
automatically into an equal number of shares of common stock upon the sale or
transfer thereof to a person not affiliated with the Simons. Shares of Class C
common stock convert automatically into an equal number of shares of common
stock upon the sale or transfer thereof to a person not affiliated with the
members of the DeBartolo family or entities controlled by them. The Company has
reserved 3,200,000 and 4,000 shares of common stock for the possible conversion
of the outstanding Class B and Class C shares, respectively.

     As described in Note 3, in connection with the DRC Merger on August 9,
1996, the Company issued 37,873,965 shares of common stock and 4,000 shares of
Class C common stock.

     On September 19, 1997, the Company issued 4,500,000 shares of its common
stock in a public offering. The Company contributed the net proceeds of
approximately $146,800 to the Operating Partnership in exchange for an equal
number of Units. The Operating Partnership used the net proceeds to retire a
portion of the outstanding balance on the Credit Facility.
<PAGE>
     On November 11, 1997, the Company issued 3,809,523 shares of its common
stock upon the conversion of all of the outstanding shares of the Company's
8.125% Series A Preferred Stock, $.0001 par value per share.

     On September 27, 1996, the Company completed a $200,000 public offering of
8,000,000 shares of Series B cumulative redeemable preferred stock, generating
net proceeds of approximately $193,000. Dividends on the preferred stock are
paid quarterly in arrears at 8.75% per annum. The Company may redeem the
preferred stock any time on or after September 29, 2006, at a redemption price
of $25.00 per share, plus accrued and unpaid dividends. The redemption price
(other than the portion thereof consisting of accrued and unpaid dividends) is
payable solely out of the sale proceeds of other capital shares of the Company,
which may include other series of preferred shares. The Company contributed the
proceeds to the Operating Partnership in exchange for preferred Units. The
Operating Partnership pays a preferred distribution to the Company equal to the
dividends paid on the preferred stock.

     On July 9, 1997, the Company sold 3,000,000 shares of 7.89% Series C
Cumulative Step-Up Premium RateSM Preferred Stock (the "Series C Preferred
Shares") in a public offering at $50.00 per share. Beginning October 1, 2012,
the rate increases to 9.89% per annum. The Company intends to redeem the Series
C Preferred Shares prior to October 1, 2012. The Series C Preferred Shares are
not redeemable prior to September 30, 2007. Beginning September 30, 2007, the
Series C Preferred Shares may be redeemed at the option of the Company in whole
or in part, at a redemption price of $50.00 per share, plus accrued and unpaid
distributions, if any, thereon. The redemption price of the Series C Preferred
Shares may only be paid from the sale proceeds of other capital stock of the
Company, which may include other classes or series of preferred stock.
Additionally, the Series C Preferred Shares have no stated maturity and are not
subject to any mandatory redemption provisions, nor are they convertible into
any other securities of the Company. The Company contributed the net proceeds
of this offering of approximately $146,000 to the Operating Partnership in
exchange for preferred units, the economic terms of which are substantially
identical to the Series C Preferred Shares. The Operating Partnership used the
proceeds to increase its ownership interest in West Town Mall (see Note 3), to
pay down the Credit Facility and for general working capital purposes.

          STOCK OPTION PLANS

     The Company and the Operating Partnership adopted an Employee Stock Plan
(the "Employee Plan"). The Company also adopted a Director Stock Option Plan
(the "Director Plan" and, together with the Employee Plan, the "Stock Option
Plans") for the purpose of attracting and retaining eligible officers,
directors and employees. The Company has reserved for issuance 4,595,000 shares
of common stock under the Employee Plan and 100,000 shares of common stock
under the Director Plan. If stock options granted in connection with the Stock
Option Plans are exercised at any time or from time to time, the partnership
agreement requires the Company to sell to the Operating Partnership, at fair
market value, shares of the Company's common stock sufficient to satisfy the
exercised stock options. The Company also is obligated to purchase Units for
cash in an amount equal to the fair market value of such shares.

          EMPLOYEE PLAN

     The Employee Plan is currently administered by the Company's Compensation
Committee (the "Committee"). During the ten-year period following the adoption
of the Employee Plan, the Committee may, subject to the terms of the Employee
Plan and in certain instances subject to board approval, grant to key employees
(including officers and directors who are employees) of the Operating
Partnership or its "affiliates" (as defined in the Employee Plan) the following
types of awards: stock options (including options with a reload feature), stock
appreciation rights, performance units and shares of restricted or unrestricted
common stock. Awards granted under the Employee Plan become exercisable over
the period determined by the Committee. The exercise price of an option may not
be less than the fair market value of the shares of the common stock on the
date of grant. The options vest 40% on the first anniversary of the date of
grant, an additional 30% on the second anniversary of the grant date and become
fully vested three years after the grant date. The options expire ten years
from the date of grant.

          DIRECTOR PLAN

     Directors of the Company who are not also employees of the Company or its
"affiliates" (as defined in the Director Plan) participate in the Director
Plan. Under the Director Plan, each eligible director is automatically granted
options ("Director Options") to purchase 5,000 shares of common stock upon the
director's initial election to the Board of Directors and 3,000 shares of
common stock upon each reelection of the director to the Board of Directors.
The exercise price of the options is equal to 100% of the fair market value of
the Company's common stock on the date of grant. Director Options become
exercisable on the first anniversary of the date of grant or at such earlier
<PAGE>
time as a "change in control" of the Company occurs and will remain exercisable
through the tenth anniversary of the date of grant (the "Expiration Date").
Prior to their Expiration Dates, Director Options will terminate 30 days after
the optionee ceases to be a member of the Board of Directors.

     SFAS No. 123, "Accounting for Stock-Based Compensation," requires entities
to measure compensation costs related to awards of stock-based compensation
using either the fair value method or the intrinsic value method. Under the
fair value method, compensation expense is measured at the grant date based on
the fair value of the award. Under the intrinsic value method, compensation
expense is equal to the excess, if any, of the quoted market price of the stock
at the grant date over the amount the employee must pay to acquire the stock.
Entities electing to measure compensation costs using the intrinsic value
method must make pro forma disclosures of net income and earnings per share as
if the fair value method had been applied. The Operating Partnership has
elected to account for stock-based compensation programs using the intrinsic
value method consistent with existing accounting policies. The impact on pro
forma net income and earnings per share as a result of applying the fair value
method was not material.

     The fair value at date of grant for options granted during the years ended
December 31, 1997, 1996 and 1995 was $3.18, $2.13 and $2.06 per option,
respectively.  The fair value of the options at the date of grant was estimated
using the Black-Scholes option pricing model with the following assumptions:

                                           December 31,
                           --------------------------------------------
                               1997            1996            1995
                           ------------    ------------    ------------
Expected Volatility           17.63%          17.48%          17.86%
Risk-Free Interest Rate        6.82%          6.63%           6.82%
Dividend Yield                 6.9%            7.5%            7.9%
Expected Life                10 years        10 years        10 years

     The weighted average remaining contract life for options outstanding as of
December 31, 1997 was 6.1 years.

     Information relating to the Stock Option Plans from January 1, 1995
through December 31, 1997 is as follows:

                                     Director Plan            Employee Plan
                                  ------------------     ----------------------
                                            OPTION                      OPTION
                                           PRICE PER                  PRICE PER
                                 OPTIONS     SHARE        OPTIONS       SHARE

                                 -------  -----------   -----------  -----------
  SHARES UNDER OPTION AT                     $22.25 -                   $22.25 -
  DECEMBER 31, 1994               40,000       $27.00     2,070,147       $25.25
                                                                                
  Granted                         15,000      24.9375            --          N/A
                                                                                
  Exercised                           --           --       (6,876)        23.44
                                                                                
  Forfeited                           --           --      (49,137)    23.60 (1)
                                 -------  -----------   -----------  -----------
  SHARES UNDER OPTION AT                   $22.25 -                     $22.25 -
  DECEMBER 31, 1995               55,000     27.00        2,014,134        25.25
                                                                                
  Granted                         44,080    23.50 (1)            --          N/A
                                                                                
  Exercised                      (5,000)        22.25     (367,151)    23.33 (1)
                                                                                
  Forfeited                      (9,000)    25.52 (1)      (24,000)    24.21 (1)
                                 -------  -----------   -----------  -----------
  SHARES UNDER OPTION AT                                                $22.25 -
  DECEMBER 31, 1996               85,080  $15 - 27.38     1,622,983        25.25
                                                                                
  Granted                          9,000      29.3125            --          N/A
                                                                                
  Exercised                      (8,000)    23.62 (1)     (361,902)    23.29 (1)
                                                                                
  Forfeited                           --          N/A      (13,484)    23.99 (1)
                                 -------  -----------   -----------  -----------
  SHARES UNDER OPTION AT                                               $22.25 -
  DECEMBER 31, 1997               86,080  $15 - 27.38     1,247,597     25.25
                                 =======  ===========   ===========  ===========
  OPTIONS EXERCISABLE AT                                                   
  DECEMBER 31, 1997               77,080   23.96 (1)      1,247,597   $22.90 (1)
                                 =======  ===========   ===========  ===========
  SHARES AVAILABLE FOR GRANT AT                                                 
  DECEMBER 31, 1997                  920                  1,611,474
                                 =======                ===========             

     (1) Represents the weighted average price.

          STOCK INCENTIVE PROGRAMS

Two stock incentive programs are currently in effect.

     In October 1994, under the Employee Plan of the Company and the Operating
Partnership, the Company's Compensation Committee approved a five-year stock
incentive program (the "Stock Incentive Program"), under which shares of
restricted common stock of the Company were granted to certain employees at no
cost to those employees. A percentage of each of these restricted stock grants
can be earned and awarded each year if the Company attains certain growth
targets measured in Funds From Operations, as those growth targets may be
established by the Company's Compensation Committee from time to time. Any
restricted stock earned and awarded vests in four installments of 25% each on
January 1 of each year following the year in which the restricted stock is
deemed earned and awarded.
<PAGE>
     In 1994, and prior to the DRC Merger, DRC also established a five-year
stock incentive program (the "DRC Plan") under which shares of restricted
common stock were granted to certain DRC employees at no cost to those
employees.  The DRC Plan also provided that this restricted stock would be
earned and awarded based upon DRC's attainment of certain economic goals
established by the Compensation Committee of DRC's Board of Directors.  At the
time of the DRC Merger, the Company and the Operating Partnership agreed to
assume the terms and conditions of the DRC Plan and the economic criteria upon
which restricted stock under both the Stock Incentive Program and the DRC Plan
would be deemed earned and awarded were aligned with one another.  Further,
other terms and conditions of the DRC Plan and Stock Incentive Program were
modified so that beginning with calendar year 1996, the terms and conditions of
these two programs are substantially the same.  It should be noted that the
terms and conditions concerning vesting of the restricted stock grant to the
Company's President and Chief Operating Officer, a former DRC employee, are
different from those established by the DRC Plan and are specifically set forth
in the employment contract between the Company and such individual.

     In March 1995, an aggregate of 1,000,000 shares of restricted stock was
granted to 50 executives, subject to the performance standards, vesting
requirements and other terms of the Stock Incentive Program. Prior to the DRC
Merger, 2,108,000 shares of DRC common stock were deemed available for grant to
certain designated employees of DRC, also subject to certain performance
standards, vesting requirements and other terms of the DRC Plan. During 1997,
1996 and 1995, a total of 448,753, 200,030; and 144,196 shares of common stock
of the Company, respectively, net of forfeitures, were deemed earned and
awarded under the Stock Incentive Program and the DRC Plan. Approximately
$5,386; $2,084; and $918 relating to these programs were amortized in 1997,
1996 and 1995, respectively. The cost of restricted stock grants, based upon
the stock's fair market value at the time such stock is earned, awarded and
issued, is charged to shareholders' equity and subsequently amortized against
earnings of the Operating Partnership over the vesting period.

          EXCHANGE RIGHTS

     Limited partners in the Operating Partnership have the right to exchange
all or any portion of their Units for shares of common stock on a one-for-one
basis or cash, as selected by the Company's Board of Directors. The amount of
cash to be paid if the exchange right is exercised and the cash option is
selected will be based on the trading price of the Company's common stock at
that time. The Company has reserved 61,850,762 shares of common stock for
possible issuance upon the exchange of Units.

12. EMPLOYEE BENEFIT PLANS

     The Operating Partnership and affiliated entities maintain a tax-qualified
retirement 401(k) savings plan. Under the plan, eligible employees can
participate in a cash or deferred arrangement permitting them to defer up to a
maximum of 12% of their compensation, subject to certain limitations.
Participants' salary deferrals are matched at specified percentages, and the
plan provides annual contributions of 3% of eligible employees' compensation.
The Operating Partnership contributed $2,727; $2,350; and $1,716 to the plans
in 1997, 1996 and 1995, respectively.

     Except for the 401(k) plan, the Company offers no other postretirement or
postemployment benefits to its employees.

13. COMMITMENTS AND CONTINGENCIES

          LITIGATION

     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., a 99%-owned subsidiary of the
Company, and DPMI, 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 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 661,000 shares of DRC common stock, which is equivalent to
approximately 450,000 shares of common stock of the Company 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 complaint was served on the defendants on
October 28, 1996. The plaintiffs and the Company each filed motions for summary
<PAGE>
judgment. On October 31, 1997, the Court entered a judgment in favor of the
Company granting the Company's motion for summary judgment. The plaintiffs have
appealed this judgment and the matter is pending. While it is difficult for the
Company to predict the ultimate outcome of this action, based on the
information known to the Company to date, it is not expected that this action
will have a material adverse effect on the Company.

     Roel Vento et al v. Tom Taylor et al. An affiliate of the Company 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 has been 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, tortuous 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. The Company is seeking to
overturn the award and has appealed the verdict. The Company's appeal is
pending. Although the Company is optimistic that it may be able to reverse or
reduce the verdict, there can be no assurance thereof. Management, based upon
the advice of counsel, believes that the ultimate outcome of this action will
not have a material adverse effect on the Company.

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

          LEASE COMMITMENTS

     As of December 31, 1997, a total of 31 of the Properties are subject to
ground leases. The termination dates of these ground leases range from 1998 to
2087. These ground leases generally require payments by the Operating
Partnership of a fixed annual rent, or a fixed annual rent plus a participating
percentage over a base rate. Ground lease expense incurred by the Operating
Partnership for the years ended December 31, 1997, 1996 and 1995, was $10,511,
$8,506 and $6,700, respectively.

     Future minimum lease payments due under such ground leases for each of the
next five years ending December 31 and thereafter are as follows:

                    1998                        $7,208
                    1999                         7,218
                    2000                         7,280
                    2001                         7,378
                    2002                         7,658
                    Thereafter                 492,270
                                              --------
                                              $529,012
                                              ========
          ENVIRONMENTAL MATTERS

     Substantially all of the Properties have been subjected to Phase I
environmental audits. Such audits have not revealed nor is management aware of
any environmental liability that management believes would have a material
adverse impact on the Company's financial position or results of operations.
Management is unaware of any instances in which it would incur significant
environmental costs if any or all Properties were sold, disposed of or
abandoned.
<PAGE>

14. QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly 1997 and 1996 data is as follows:
<TABLE>
<CAPTION>
                                       First        Second         Third        Fourth           
                                      Quarter       Quarter     Quarter (1)     Quarter        Total
                                     ----------    ----------    ----------    ----------    ----------
                1997                                                                             
 ------------------------------                                                                        
<S>                                <C>          <C>           <C>           <C>           <C>
 Total revenue                       $242,414      $245,055      $259,783      $310,222    $1,057,474
 Operating income                     111,706       114,455       117,572       133,297       477,030
 Income of the Operating                                                                               
  Partnership before                                                                                   
  extraordinary items                  43,062        48,413        54,286        57,372       203,133
 Net income available to common                                                                        
  shareholders                          8,233        24,951        44,642        30,163       107,989
 Net income before extraordinary                                                                       
  items per common share (2)             0.23          0.27          0.28          0.29          1.08
 Net income per common share (2)         0.08          0.26          0.45          0.28          1.08
 Weighted Average Common Shares                                                                        
  Outstanding                      96,972,858    97,520,174    98,785,776   106,312,139    99,920,280
 Net income before extraordinary                                                                       
  items per common share -                                                                             
  assuming dilution (2)                  0.23          0.27          0.28          0.29          1.08
 Net income per common share -                                                                         
  assuming dilution (2)                 $0.08         $0.26          0.45          0.28         $1.08
 Weighted Average Common Shares                                                                        
  Outstanding - Assuming Dilution  97,369,777    97,363,839    99,170,829   106,698,238   100,304,344

             1996                                                                             
------------------------------                                                                      
Total revenue                        $139,444     $143,761      $202,436      $262,063      $747,704
Operating income                       61,073       63,051        82,715       124,673       331,512
Income of the Operating                                                                             
Partnership before                                                                                  
extraordinary items                    23,832       23,968        28,839        58,024       134,663
Net income available to common                                                                      
shareholders                           13,154       13,412        14,784        31,211        72,561
Net income before extraordinary                                                                     
items per common share (2)               0.23         0.23          0.20          0.33          1.02
Net income per common share (2)          0.23         0.23          0.18          0.32          0.99
Weighted Average Common Shares                                                                      
Outstanding                        58,382,176   58,560,225    80,397,469    96,673,964    73,585,602
Net income before extraordinary                                                                     
items per common share -                                                                            
assuming dilution (2)                                                                               
                                         0.23         0.23          0.20          0.33          1.01
Net income per common share -                                                                       
assuming dilution (2)                   $0.23        $0.23         $0.18         $0.32         $0.98
Weighted Average Common Shares                                                                      
Outstanding - Assuming Dilution    58,404,318   58,599,582    80,515,223    96,988,085    73,721,134

</TABLE>
  (1) The third quarter of 1997 reflects the amounts as amended in Form 10-Q/A.
  (2) Primarily due to the cyclical nature of earnings available for common
      stock and the issuance of additional shares of common stock during the
      periods, the sum of the quarterly earnings per share varies from the
      annual earnings per share.
<PAGE>

15. SUBSEQUENT EVENTS (UNAUDITED)

         PROPOSED CPI MERGER

     On February 19, 1998, the Company and Corporate Property Investors ("CPI")
signed a definitive agreement to merge the two companies. The merger is
expected to be completed by the end of the third quarter of 1998 and is subject
to approval by the shareholders of the Company as well as customary regulatory
and other conditions. A majority of the CPI shareholders have already approved
the transaction. Under the terms of the agreement, the shareholders of CPI will
receive, in a reverse triangular merger, consideration valued at $179 for each
share of CPI common stock held consisting of $90 in cash, $70 in the Company's
common stock and $19 worth of 6.5% convertible preferred stock. The common
stock component of the consideration is based upon a fixed exchange ratio using
the Company's February 18, 1998 closing price of $33 5/8 per share, and is
subject to a 15% symmetrical collar based upon the price of the Company's
common stock determined at closing. In the event the Company's common stock
price at closing is outside of the parameters of the collar, an adjustment will
be made in the cash component of consideration. The total purchase price,
including indebtedness which would be assumed, is estimated at $5.8 billion.

         MACERICH PARTNERSHIP

     On February 27, 1998, the Operating Partnership, in a joint venture
partnership with The Macerich Company ("Macerich"), acquired a portfolio of
twelve regional malls comprising approximately 10.7 million square feet of GLA
at a purchase price of $974,500, including the assumption of $485,000 of
indebtedness. The Operating Partnership and Macerich, as 50/50 partners in the
joint venture, were each responsible for one half of the purchase price,
including indebtedness assumed and each assumed leasing and management
responsibilities for six of the regional malls.
<PAGE>
            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                          ON SCHEDULE



To the Board of Directors of
Simon DeBartolo Group, Inc.:

We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements of SIMON DeBARTOLO GROUP, INC. included in
this Form 10-K, and have issued our report thereon dated February 17, 1998. Our
audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedule, "Schedule III: Real Estate and
Accumulated Depreciation", as of December 31, 1997, is the responsibility of
the Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. The schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.



                                                  /s/ ARTHUR ANDERSEN LLP
                                                  ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
February 17, 1998
<PAGE>

<TABLE>
SIMON DeBARTOLO GROUP, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1997                                                                                           SCHEDULE III

(Dollars in thousands)
<CAPTION>
                                                             Cost Capitalized   Gross Amounts At                         
                                                            Subsequent to     Which Carried At
                                          Initial Cost       Acquisition       Close of Period
                                       --------------------  ----------------  -------------------                       
                                                Buildings             Build-            Buildings               Accum-        
                                                   and              ings and              and                  ulated
                             Encum-               Improv-             Improv-             Improv-                Depre-  Date of
Name, Location              brances      Land      ements    Land     ements    Land      ements      Total    ciation  Construction
REGIONAL MALLS
------------------------- ---------- ----------  ---------- ------- -------- ---------- ---------- ---------- -------- -------------
                          <C>        <C>         <C>        <C>     <C>      <C>        <C>        <C>        <C>      <C>  <S>
Alton Square, Alton, IL           $0       $154      $7,641      $0  $11,825       $154    $19,466    $19,620   $1,508 1993 (Note 3)
Amigoland Mall,                    0      1,045       4,518       0      986      1,045      5,504      6,549    1,426 1974 
Brownsville, TX
Anderson Mall, Anderson, SC   19,000      1,838      18,122   1,363    2,197      3,201     20,319     23,520    3,698 1972 
Barton Creek Square,          62,868      4,413      20,699     771   18,893      5,184     39,592     44,776    6,659 1981 
Austin, TX
Battlefield Mall,             49,730      4,040      29,783   3,225   32,636      7,265     62,419     69,684    9,131 1976 
Springfield, MO
Bay Park Square, Green Bay,   24,848      6,997      25,623       0      193      6,997     25,816     32,813    1,051 1996 (Note 4)
WI
Bergen Mall, Paramus, NJ           0     11,020      92,541       0    4,569     11,020     97,110    108,130    3,471 1996 (Note 4)
Biltmore Square, Asheville,   27,534     10,907      19,315       0      793     10,907     20,108     31,015      831 1996 (Note 4)
NC
Boynton Beach Mall, Boynton        0     33,758      67,710       0    1,789     33,758     69,499    103,257    2,805 1996 (Note 4)
Beach, FL
Broadway Square, Tyler, TX         0     11,470      32,450       0    1,586     11,470     34,036     45,506    3,133 1994 (Note 3)
Brunswick Square, East             0      8,436      55,838       0      935      8,436     56,773     65,209    2,284 1996 (Note 4)
Brunswick, NJ
Castleton Square,                  0     45,011      80,963       0    1,234     45,011     82,197    127,208    3,309 1996 (Note 4)
Indianapolis, IN
Charlottesville Fashion            0          0      55,115       0        0          0     55,115     55,115      393 1997 (Note 4)
Square, Charlottesville,
VA
Chautauqua Mall, Jamestown,        0      3,258       9,641       0   10,106      3,258     19,747     23,005      474 1996 (Note 4)
NY
Cheltenham Square,            34,226     14,226      43,799       0    1,371     14,226     45,170     59,396    1,883 1996 (Note 4)
Philadelphia, PA
Chesapeake Square,            49,490     11,533      70,461       0      398     11,533     70,859     82,392    2,866 1996 (Note 4)
Chesapeake, VA
Cielo Vista Mall, El Paso,    57,938      1,307      18,512     608   13,461      1,915     31,973     33,888    7,087 1974 
TX
College Mall, Bloomington,    42,936      1,012      16,245     722   16,995      1,734     33,240     34,974    6,530 1965 
IN
Columbia Center, Kennewick,   42,867     27,170      58,185       0    4,522     27,170     62,707     89,877    2,416 1996 (Note 4)
WA
Cottonwood Mall,                   0     14,010      69,173       0      983     14,010     70,156     84,166    5,507 1993 
Albuquerque, NM
Crossroads Mall, Omaha, NE    41,440        884      37,293     409   22,290      1,293     59,583     60,876    4,547 1994 (Note 3)
Crystal River Mall, Crystal   16,000     11,679      14,252       0    2,376     11,679     16,628     28,307      574 1996 (Note 4)
River, FL
DeSoto Square, Bradenton,     38,880      9,531      52,716       0    2,658      9,531     55,374     64,905    2,235 1996 (Note 4)
FL
Eastern Hills Mall,                0     15,444      47,604       0      468     15,444     48,072     63,516    1,952 1996 (Note 4)
Buffalo, NY
Eastland Mall, Tulsa, OK      30,000      3,124      24,035     518    6,106      3,642     30,141     33,783    4,525 1986 
Edison Mall, Fort Myers, FL   41,000     13,618     108,215       0        0     13,618    108,215    121,833      773 1997 (Note 4)
Fashion Mall at Keystone at   64,772          0     112,952       0        0          0    112,952    112,952        0 1997 (Note 4)
the Crossing,
Indianapolis, IN
Forest Mall, Fond Du Lac,     12,800        754       4,498       0    2,334        754      6,832      7,586    1,431 1973 
WI
Forest Village Park,          20,600      1,212       4,625     757    3,694      1,969      8,319     10,288    1,562 1980 
Forestville, MD
Fremont Mall, Fremont, NE          0         26       1,280     265    2,156        291      3,436      3,727      392 1983 
Golden Ring Mall,             29,750      1,130       8,955     572    8,459      1,702     17,414     19,116    3,523 1974 (Note 3)
Baltimore, MD
Great Lakes Mall,             62,018     14,608     100,362       0    2,166     14,608    102,528    117,136    4,152 1996 (Note 4)
Cleveland, OH
Greenwood Park Mall,          35,960      2,606      23,500   5,275   52,357      7,881     75,857     83,738   11,534 1977 
Greenwood, IN
Gulf View Square, Port        38,157     13,689      39,997       0      401     13,689     40,398     54,087    1,633 1996 (Note 4)
Richey, FL
Heritage Park, Midwest             0        598       6,213       0    1,487        598      7,700      8,298    1,581 1978 
City, OK
Hutchinson Mall, Hutchison,   11,523      1,777      18,427       0    2,903      1,777     21,330     23,107    3,658 1985 
KS
Independence Center,               0      5,539      45,822       0    2,888      5,539     48,710     54,249    4,386 1994 (Note 3)
Independence, MO
Ingram Park Mall, San         55,580        820      17,182     169   13,083        989     30,265     31,254    5,832 1979 
Antonio, TX
Irving Mall, Irving, TX            0      6,736      17,479   2,539   12,858      9,275     30,337     39,612    7,248 1971 
Jefferson Valley Mall,                                                                                                       
Yorktown
     Heights, NY              50,000      4,869      30,304       0    2,910      4,869     33,214     38,083    5,690 1983 
Knoxville Center,                  0      5,269      22,965   3,712   30,601      8,981     53,566     62,547    4,064 1984 
Knoxville, TN
La Plaza, McAllen, TX         50,044      2,194       9,828       0    2,763      2,194     12,591     14,785    2,157 1976 
Lafayette Square,                  0     25,546      43,294       0    4,503     25,546     47,797     73,343    1,813 1996 (Note 4)
Indianapolis, IN
Laguna Hills Mall, Laguna          0     28,074      56,436       0        0     28,074     56,436     84,510      401 1997 (Note 4)
Hills, CA
Lima Mall, Lima, OH           19,166      7,910      35,495       0      586      7,910     36,081     43,991    1,476 1996 (Note 4)
<PAGE>
Lincolnwood Town Center,           0     11,197      63,490      28      138     11,225     63,628     74,853    8,583 1990
Lincolnwood, IL
Longview Mall, Longview, TX   22,100        278       3,602     124    3,459        402      7,061      7,463    1,679 1978 
Machesney Park Mall,               0        613       7,460     120    3,101        733     10,561     11,294    2,319 1979 
Rockford, IL
Markland Mall, Kokomo, IN     10,000          0       7,568       0    1,111          0      8,679      8,679    1,317 1983 
Mc Cain Mall, N. Little       26,059          0       9,515       0    6,326          0     15,841     15,841    3,873 1973 
Rock, AR
Melbourne Square,             39,841     20,552      51,110       0    1,439     20,552     52,549     73,101    2,096 1996 (Note 4)
Melbourne, FL
Memorial Mall, Sheboygan,          0        175       4,881       0      784        175      5,665      5,840    1,025 1980 
WI
Menlo Park Mall, Edison, NJ              65,684     225,131       0        0     65,684    225,131    290,815    1,606 1997 (Note 4)
Miami International Mall,     47,009     18,685      69,959  12,687    3,146     31,372     73,105    104,477   13,352 1996 (Note 4)
Miami, FL
Midland Park Mall, Midland,   22,500        704       9,613       0    4,646        704     14,259     14,963    2,818 1980 
TX
Miller Hill Mall, Duluth,          0      2,537      18,114       0    1,893      2,537     20,007     22,544    3,443 1973 
MN
Mission Viejo Mall, Mission        0      9,139      54,445       0   12,536      9,139     66,981     76,120    2,206 1996 (Note 4)
Viejo, CA
Mounds Mall, Anderson, IN          0          0       2,689       0    1,702          0      4,391      4,391    1,077 1964 
Muncie Mall, Muncie, IN            0        210       5,964      49   18,913        259     24,877     25,136    2,152 1975 
North East Mall, Hurst, TX    22,201      1,440      13,473     784   16,158      2,224     29,631     31,855    1,942 1996 (Note 4)
North Towne Square, Toledo,   23,500        579       8,382       0    1,798        579     10,180     10,759    3,156 1980 
OH
Northgate Mall, Seattle, WA   80,046     89,991      57,873       0   15,802     89,991     73,675    163,666    2,471 1996 (Note 4)
Northwoods Mall, Peoria, IL        0      1,202      12,779   1,449   19,429      2,651     32,208     34,859    6,078 1983 (Note 3)
Oak Court Mall, Memphis, TN              15,673      57,392       0        0     15,673     57,392     73,065      410 1997 (Note 4)
Orange Park Mall,                  0     13,345      65,173       0   10,759     13,345     75,932     89,277    5,986 1994 (Note 3)
Jacksonville, FL
Orland Square, Orland Park,   50,000     36,770     131,054       0        0     36,770    131,054    167,824      545 1997 (Note 4)
IL
Paddock Mall, Ocala, FL       30,347     20,420      30,490       0    3,713     20,420     34,203     54,623    1,265 1996 (Note 4)
Port Charlotte Town Center,                                                                                                  
 Port Charlotte, FL           46,102      5,561      59,381       0       34      5,561     59,415     64,976    2,404 1996 (Note 4)
Prien Lake Mall, Lake              0      1,926       2,829     731   11,386      2,657     14,215     16,872    1,187 1972 
Charles, LA
Promenade,  Woodland Hills,        0     13,072      14,487       0        0     13,072     14,487     27,559      103 1997 (Note 4)
CA
Raleigh Springs Mall,              0      9,137      28,604       0      554      9,137     29,158     38,295    1,193 1996 (Note 4)
Memphis, TN
Randall Park Mall,            33,879      4,421      52,456       0    2,106      4,421     54,562     58,983    2,170 1996 (Note 4)
Cleveland, OH
Richardson Square, Dallas,         0      4,867       6,329   1,075    1,866      5,942      8,195     14,137      353 1996 (Note 4)
TX
Richmond Square, Richmond,         0      3,410      11,343       0    7,928      3,410     19,271     22,681      566 1996 (Note 4)
IN
Richmond Towne Square,             0      2,666      12,112       0    1,050      2,666     13,162     15,828      490 1996 (Note 4)
Cleveland, OH
River Oaks Center, Calumet    32,500     30,884     102,357       0        0     30,884    102,357    133,241      413 1997 (Note 4)
City, IL
Ross Park Mall, Pittsburgh,   60,000     14,557      50,995   9,617   46,014     24,174     97,009    121,183    6,089 1996 (Note 4)
PA
South Hills Village,               0     23,453     126,887       0        0     23,453    126,887    150,340      302 1997 (Note 4)
Pittsburgh, PA
South Park Mall,              24,748        855      13,691      74    2,531        929     16,222     17,151    3,615 1975 
Shreveport, LA
Southern Park Mall,                0     16,982      77,774      97   11,506     17,079     89,280    106,359    3,387 1996 (Note 4)
Youngstown, OH
Southgate Mall, Yuma, AZ           0      1,817       7,974       0    2,969      1,817     10,943     12,760    1,741 1988 (Note 3)
Southtown Mall, Ft. Wayne,         0      2,059      13,288       0      974      2,059     14,262     16,321    6,244 1969 
IN
St Charles Towne Center            0      9,328      52,974   1,180    9,412     10,508     62,386     72,894   10,611 1990 
Waldorf, MD
Summit Mall, Akron, OH             0     25,037      45,036       0    9,551     25,037     54,587     79,624    2,133 1996 (Note 4)
Sunland Park Mall, El Paso,   39,855      2,896      28,900       0    2,291      2,896     31,191     34,087    6,571 1988 
TX
Tacoma Mall, Tacoma, WA       93,656     39,504     125,826       0    2,441     39,504    128,267    167,771    5,177 1996 (Note 4)
Tippecanoe Mall, Lafayette,   46,961      4,320       8,474   5,517   31,314      9,837     39,788     49,625    6,816 1973 
IN
Towne East Square, Wichita,   56,767      9,495      18,479   2,042    8,372     11,537     26,851     38,388    6,082 1975 
KS
Towne West Square, Wichita,        0        988      21,203      76    4,584      1,064     25,787     26,851    5,477 1980 
KS
Treasure Coast Square,        53,953     11,124      73,108       0    1,296     11,124     74,404     85,528    2,972 1996 (Note 4)
Jenson Beach, FL
Tyrone Square, St.                 0     15,638     120,962       0    1,418     15,638    122,380    138,018    4,939 1996 (Note 4)
Petersburg, FL
University Mall, Little            0        123      17,411       0      714        123     18,125     18,248    3,815 1967 
Rock, AR
<PAGE>
University Mall, Pensacola,        0      4,741      26,657       0    1,700      4,741     28,357     33,098    2,610 1994 (Note 3)
FL
University Park Mall, South   59,500     15,105      61,466       0    6,539     15,105     68,005     83,110   14,721 1996 (Note 4)
Bend, IN
Upper Valley Mall,            30,940      8,422      38,745       0      439      8,422     39,184     47,606    1,607 1996 (Note 4)
Springfield, OH
Valle Vista Mall,             34,514      1,398      17,266     372    6,899      1,770     24,165     25,935    4,305 1983 
Harlingen, TX
Virginia Center Commons,           0      9,765      63,098   1,839      397     11,604     63,495     75,099    2,853 1996 (Note 4)
Richmond, VA
Washington Square,            33,541     20,146      41,248       0      546     20,146     41,794     61,940    1,703 1996 (Note 4)
Indianapolis, IN
West Ridge Mall, Topeka, KS   44,288      5,775      34,132     197    3,892      5,972     38,024     43,996    6,070 1988 
White Oaks Mall,              16,500      3,024      35,692   1,153   13,579      4,177     49,271     53,448    5,088 1977 
Springfield, IL
Windsor Park Mall, San        14,811      1,194      16,940     130    3,285      1,324     20,225     21,549    4,189 1976 
Antonio, TX
Woodville Mall, Toledo, OH         0      1,830       4,454       0      339      1,830      4,793      6,623      221 1996 (Note 4)
COMMUNITY SHOPPING CENTERS                                                                                                   
-------------------------
Arvada Plaza, Arvada, CO           0         70         342     608      581        678        923      1,601      207 1966 
Aurora Plaza, Aurora, CO           0         35       5,754       0    1,004         35      6,758      6,793    1,381 1966 
Bloomingdale Court,           29,009      9,735      26,184       0    1,323      9,735     27,507     37,242    3,218 1987 
Bloomingdale, IL
Boardman Plaza, Youngstown,   18,277      8,189      26,355       0    1,479      8,189     27,834     36,023    1,087 1996 (Note 4)
OH
Bridgeview Court,                  0        308       3,638       0       50        308      3,688      3,996      596 1988 
Bridgeview, IL
Brightwood Plaza,                  0         65         128       0      256         65        384        449       93 1965 
Indianapolis, IN
Buffalo Grove Towne Center,                                                                                                  
Buffalo
     Grove, IL                     0      2,044       6,602       0      270      2,044      6,872      8,916      468 1988 
Celina Plaza, El Paso, TX          0        138         815       0       13        138        828        966      144 1977 
Century Mall, Merrillville,        0      2,190       9,589       0    1,376      2,190     10,965     13,155    2,792 1992 (Note 3)
IN
Charles Towne Square,              0        446       1,768     500    8,655        946     10,423     11,369        0 1976 
Charleston, SC
Chesapeake Center,             6,563      5,500      12,279       0       23      5,500     12,302     17,802      498 1996 (Note 4)
Chesapeake, VA
Cohoes Commons, Rochester,         0      1,698       8,426       0       80      1,698      8,506     10,204    1,765 1984 
NY
Countryside Plaza,                 0      1,243       8,507       0      548      1,243      9,055     10,298    1,856 1977 
Countryside, IL
Eastgate Consumer Mall,       22,929        425       4,722     187    2,868        612      7,590      8,202    2,935 1991 (Note 3)
Indianapolis, IN
Eastland Plaza, Tulsa, OK          0        908       3,709       0       11        908      3,720      4,628      506 1987 
Forest Plaza, Rockford, IL    16,904      4,270      16,818     453      455      4,723     17,273     21,996    1,782 1985 
Fox River Plaza, Elgin, IL    12,654      2,907       9,453       0       60      2,907      9,513     12,420    1,016 1985 
Glen Burnie Mall, Glen             0      7,422      22,778       0    2,265      7,422     25,043     32,465      930 1996 (Note 4)
Burnie, MD
Great Lakes Plaza,                 0      1,027       2,025       0    3,073      1,027      5,098      6,125      226 1996 (Note 4)
Cleveland, OH
Greenwood Plus, Greenwood,         0      1,350       1,792       0    4,221      1,350      6,013      7,363      766 1979 (Note 3)
IN
Griffith Park Plaza,               0          0       2,412       0      110          0      2,522      2,522      533 1979 
Griffith, IN
Grove at Lakeland Square,      3,750      5,237       6,016       0      892      5,237      6,908     12,145      305 1996 (Note 4)
The, Lakeland, FL
Hammond Square, Sandy              0          0          27       0        1          0         28         28        5 1974 
Springs, GA
Highland Lakes Center,        14,377     13,950      18,490       0      314     13,950     18,804     32,754      769 1996 (Note 4)
Orlando, FL
Ingram Plaza, San Antonio,         0        421       1,802       4       22        425      1,824      2,249      449 1980 
TX
Keystone Shoppes ,                 0          0      12,550       0        0          0     12,550     12,550        0 1997 (Note 4)
Indianapolis, IN
Knoxville Commons,                 0      3,730       5,345       0    1,608      3,730      6,953     10,683      869 1990 
Knoxville, TN
Lake Plaza, Waukegan, IL           0      2,868       6,420       0      267      2,868      6,687      9,555      654 1986 
Lake View Plaza, Orland       22,169      4,775      17,586       0      445      4,775     18,031     22,806    1,806 1986 
Park, IL
Lima Center Lima, OH               0      1,808       5,151       0        9      1,808      5,160      6,968      204 1996 (Note 4)
Lincoln Crossing, O'Fallon,      997      1,079       2,692       0      268      1,079      2,960      4,039      408 1990 
IL
Mainland Crossing,             2,226      1,850       1,737       0      124      1,850      1,861      3,711       81 1996 (Note 4)
Galveston, TX
Maplewood Square, Omaha, NE        0        466       1,249       0      157        466      1,406      1,872      303 1987 
Markland Plaza, Kokomo, IN         0        210       1,258       0      475        210      1,733      1,943      385 1975 
Martinsville Plaza,                0          0         584       0       45          0        629        629      266 1980 
Martinsville, VA
Marwood Plaza,                     0         52       3,597       0      107         52      3,704      3,756      558 1962 
Indianapolis, IN
Matteson Plaza, Matteson,     11,159      1,830       9,737       0    1,557      1,830     11,294     13,124    1,218 1988 
IL
<PAGE>
Memorial Plaza, Sheboygan,         0        250         436       0      871        250      1,307      1,557      230 1966
WI
Mounds Mall Cinema,                0         88         158       0        1         88        159        247       40 1975 
Anderson, IN
New Castle Plaza, New              0        128       1,621       0      547        128      2,168      2,296      460 1966 
Castle, IN
North Ridge Plaza, Joliet,         0      2,831       7,699       0      374      2,831      8,073     10,904      898 1985 
IL
North Riverside Park Plaza,                                                                                                  
     N. Riverside, IL          7,671      1,062       2,490       0      254      1,062      2,744      3,806      617 1977 
Northland Plaza, Columbus,         0      4,490       8,893       0      360      4,490      9,253     13,743      897 1988 
OH
Northwood Plaza, Fort              0        304       2,922       0      362        304      3,284      3,588      670 1977 
Wayne, IN
Park Plaza, Hopkinsville,          0        300       1,572       0       24        300      1,596      1,896      299 1968 
KY
Regency Plaza, St. Charles,    1,878        616       4,963       0      150        616      5,113      5,729      478 1988 
MO
Sherwood Gardens, Salinas,         0          0       9,106       0        0          0      9,106      9,106      136 1997 (Note 4)
CA
St. Charles Towne Plaza,      30,742      8,780      18,993       0      117      8,780     19,110     27,890    2,067 1987 
Waldorf, MD
Teal Plaza, Lafayette, IN          0         99         878       0    2,712         99      3,590      3,689      148 1986 
Terrace at The Florida         4,688      5,647       4,126       0      956      5,647      5,082     10,729      272 1996 (Note 4)
Mall, Orlando, FL
Tippecanoe Plaza,                  0        265         440     305    4,728        570      5,168      5,738      579 1962 
Lafayette, IN
University Center, South           0      2,388       5,214       0       46      2,388      5,260      7,648    2,197 1996 (Note 4)
Bend, IN
Wabash Village, West               0          0         976       0      203          0      1,179      1,179      232 1976 
Lafayette, IN
Washington Plaza,                  0        942       1,697       0        0        942      1,697      2,639      434 1996 (Note 4)
Indianapolis, IN
West Ridge Plaza, Topeka,      4,612      1,491       4,620       0      508      1,491      5,128      6,619      504 1988 
KS
White Oaks Plaza,             12,345      3,265      14,267       0      188      3,265     14,455     17,720    1,460 1986 
Springfield, IL
Wichita Mall, Wichita, KS          0          0       4,535       0    1,635          0      6,170      6,170    1,184 1981 
Wood Plaza, Fort Dodge, IA         0         45         380       0      760         45      1,140      1,185      216 1967 

SPECIALTY RETAIL CENTERS                                                                                                     
------------------------
The Forum Shops at Caesars,                                                                                                  
     Las Vegas, NV           175,000          0      72,866       0   57,655          0    130,521    130,521   12,508 1992 
Trolley Square, Salt Lake     27,141      4,899      27,539     263    3,661      5,162     31,200     36,362    4,353 1986 (Note 3)
City, UT

MIXED-USE PROPERTIES                                                                                                         
------------------------
New Orleans Centre/CNG                                                                                                       
Plaza,
     New Orleans, LA               0      3,679      41,231       0      725      3,679     41,956     45,635    1,670 1996 (Note 4)
O Hare International                                                                                                         
Center,
     Rosemont, IL                  0        125      60,287       1    8,796        126     69,083     69,209   14,771 1986 
Riverway, Rosemont, IL       131,451      8,738     129,175      16    6,560      8,754    135,735    144,489   28,737 1988 

DEVELOPMENT PROJECTS
-------------------------
Bowie Town Center, Bowie,                 6,000         570       0        0      6,000        570      6,570        0       
MD
Indian River Peripheral,                    826          57       0        0        826         57        883        0 1996 (Note 4)
Vero
     Beach, FL                                                                                                               
Muncie Plaza, Muncie, IN                    625      10,626                         625     10,626     11,251        0       
North East Plaza, Hurst, TX               8,988       2,198       0        0      8,988      2,198     11,186        0       
The Shops at Sunset Place,                                                                                                   
     Miami, FL                23,546     12,297      68,111       0        0     12,297     68,111     80,408        0       
Victoria Ward, Honolulu, HI        0          0       1,400       0        0          0      1,400      1,400        0       
Waterford Lakes, Orlando,          0          0       1,114       0        0          0      1,114      1,114        0       
FL
Other                              0          0         314       0        0          0        314        314                
                          ---------- ----------  ---------- ------- -------- ---------- ---------- ----------  --------       
                          $2,705,333 $1,191,370  $4,802,609 $62,583 $757,503 $1,253,953 $5,560,112 $6,814,065  $448,353       
                          ========== ==========  ========== ======= ======== ========== ========== ==========  ========       
</TABLE>
<PAGE>

                                       
                          SIMON DEBARTOLO GROUP, INC.
                                       
                 NOTES TO SCHEDULE III AS OF DECEMBER 31, 1997
                                       
                            (DOLLARS IN THOUSANDS)



(1)  Reconciliation of Real Estate Properties:

     The changes in real estate assets for the years ended December 31, 1997,
1996 and 1995 are as follows:



                                     1997            1996         1995
                                                   
Balance, beginning of year         $5,273,465      $2,143,925  $1,887,122
Acquisitions                        1,238,909       2,843,287      32,547
Improvements                          312,558         224,605      73,097
Disposals                            (10,867)        (19,579)     (12,722)
Consolidation                              --          81,227     163,881
Balance, close of year             $6,814,065      $5,273,465  $2,143,925

     The aggregate net book value for federal income tax purposes as of
December 31, 1997 was $4,745,605.

(2)  Reconciliation of Accumulated Depreciation:

     The changes in accumulated depreciation and amortization for the years
ended December 31, 1997, 1996 and 1995 are as follows:

                                       
                                         1997        1996         1995
                                                            
Balance, beginning of year              $270,637     $147,341   $ 68,222
Carryover of minority partners'                                          
interest in accumulated                                                  
depreciation of DeBartolo                                                
Properties                                    --       13,505         --
Depreciation expense                     183,357      120,565     79,126
Disposals                                 (5,641)     (10,774)        (7)
Balance, close of year                  $448,353     $270,637   $147,341


     Depreciation of the Company's investment in buildings and improvements
reflected in the statements of operations is calculated over the estimated
original lives of the assets as follows:

     Buildings and Improvements - typically 35 years
     Tenant Inducements - shorter of lease term or useful life

(3) Initial cost represents net book value at December 20, 1993.

(4) Not developed/constructed by the Operating Partnership or the Simons. The
    date of construction represents acquisition date.

<PAGE>                                       
                               INDEX TO EXHIBITS

Exhibits

2.1     Agreement and Plan of Merger among SPG, Sub and DRC, dated as of March
        26, 1996, as amended (included as Annex I to the Prospectus/Joint Proxy
        Statement filed as part of Form S-4 of Simon Property Group, Inc.
        (Registration No. 333-06933))
2.2     Amendment and supplement to Offer to Purchase for Cash all Outstanding
        Beneficial Interests in The Retail Property Trust (incorporated by
        reference to Exhibit 99.1 of the Form 8-K filed by the Operating
        Partnership on September 12, 1997)
2.3     Merger Agreement Between SDC, LP And SPG, LP
2.4     Purchase and Sale Agreement between the The Equitable Life Assurance
        Society of the United States and SM Portfolio Partners
2.5     Agreement and Plan of Merger among the Company and Corporate Property
        Investors and Corporate Realty Consultants, Inc. (incorporated by
        reference to Exhibit 10.1 in the Form 8-K filed by the Company on
        February 24, 1998)
3.1 (c) Amended and Restated Charter
3.2 (c) Amended and Restated Bylaws, incorporated by reference to Annex VIII of
        the Company's Schedule 14A on May 8, 1996.
3.3 (c) Articles Supplementary with respect to the Series B Preferred Stock of
        the Company to the Amended and Restated Charter.
3.4     Articles Supplementary with respect to the Series C Preferred Stock of
        the Company to the Amended and Restated Charter. (incorporated by
        reference to Exhibit 4.1 of the Form 8-K filed by the Company on July
        8, 1997)
3.5     Articles Supplementary with respect to the conversion of the Series A
        Preferred Stock of the Company into Common Stock.
4.2 (a) Secured Promissory Note and Open-End Mortgage and Security Agreement
        from Simon Property Group, L.P. in favor of Principal Mutual Life
        Insurance Company (Pool 2).
4.3     Second Amended and Restated Credit Agreement dated as of December 22,
        1997 among the Operating Partnership and Morgan Guaranty Trust Company
        of New York, Union Bank of Switzerland and Chase Manhattan Bank as Lead
        Agents.
9.1 (a) Voting Trust Agreement, Voting Agreement and Proxy between MSA, on the
        one hand, and Melvin Simon, Herbert Simon and David Simon, on the other
        hand.
10.1    Fifth Amended and Restated Limited Partnership Agreement of Simon
        DeBartolo Group, L.P. (Incorporated by Reference to Exhibit 10.1.1 of
        the Company's Form S-4 (Registration No. 333-06933))
10.3 (a)Noncompetition Agreement dated as of December 1, 1993 between the
        Company and each of Melvin Simon and Herbert Simon.
10.4 (a)Noncompetition Agreement dated as of December 1, 1993 between the
        Company and David Simon.
10.5 (a)Restriction and Noncompetition Agreement dated as of December 1, 1993
        among the Company and the Management Companies.
10.6 (a)Simon Property Group, L.P. Employee Stock Plan.
10.7 (a)Simon DeBartolo Group, Inc. Director Stock Option Plan.
10.8 (c)Restated Indemnity Agreement dated as of August 9, 1996 between the
        Company and its directors and officers.
10.9 (a)Option Agreement to acquire the Excluded Retail Properties. (Previously
        filed as Exhibit 10.10.)
10.10(a)Option Agreement to acquire the Excluded PropertiesLand. (Previously
        filed as Exhibit 10.11.)
10.11(a)Registration Rights Agreement dated as of December 1, 1993 between the
        Company, certain Limited Partners and certain other parties.
        (Previously filed as Exhibit 10.12.)
10.12(a)Option Agreements dated as of December 1, 1993 between the Management
        Company and Simon Property Group, L.P. (Previously filed as Exhibit
        10.20.)
<PAGE>
10.13(a)Option Agreement dated as of December 1, 1993 to acquire Development
        Land. (Previously filed as Exhibit 10.22.)
10.14(a)Option Agreement dated December 1, 1993 between the Management Company
        and Simon Property Group, L.P. (Previously filed as Exhibit 10.25.)
10.15(a)Option Agreement dated December 1, 1993 between Simon Enterprises,
        Inc. and Simon Property Group, L.P. (Previously filed as Exhibit
        10.26.)
10.16(a)Lock-Up Agreement dated December 20, 1993 between MSA and Simon
        Property Group, L.P. (Previously filed as Exhibit 10.27.)
10.17(b)Operating Agreement of Summit Mall Company, L.L.C. dated February 23,
        1995.
10.19   Partnership Agreement of DeBartolo Capital Partnership (the "Financing
        Partnership") (Incorporated by reference to the 1994 DRC Form 10-K
        Exhibit 10(b).)
10.20   Amended and Restated Articles of Incorporation of DPMI (Incorporated by
        reference to the 1994 DRC Form 10-K Exhibit 10(c).)
10.21   Amended and Restated Code of Regulations of DPMI (Incorporated by
        reference to the 1994 DRC Form 10-K Exhibit 10(d).)
10.25   First Amendment to the Corporate Services Agreement between DRC and
        DPMI (Incorporated by reference to the 1995 DRC Form 10-K Exhibit
        10.17.)
10.26   Service Agreement between EJDC and DPMI (Incorporated by reference to
        the 1994 DRC Form 10-K Exhibit 10.(f).)
10.27   Master Services Agreement between DRP, LP and DPMI (Incorporated by
        reference to the 1994 DRC Form 10-K Exhibit 10(g).)
10.28   First Amendment to Master Services Agreement between DRP, LP and DPMI
        (Incorporated by reference to the 1995 DRC Form 10-K Exhibit 10.20.)
10.33   DRC 1994 Stock Incentive Plan (Incorporated by reference to the 1994
        DRC Form 10-K Exhibit 10(k).)
10.34   Purchase Option and Right of First Refusal Agreement between DRP, LP
        and Edward J. DeBartolo (for Northfield Square) (Incorporated by
        reference to the 1994 DRC Form 10-K Exhibit 10(o).)
10.35   Indemnification Agreement between DRC and its directors and officers
        (Incorporated by reference to the 1994 DRC Form 10-K Exhibit 10(u).)
10.36   Amendment to Indemnification Agreement between DRP, LP and the
        directors and officers of DPMI (Incorporated by reference to the 1995
        DRC Form 10-K Exhibit 10.49.)
10.37   Indemnification Agreement between DRP, LP and the directors and
        officers of DPMI (Incorporated by reference to the 1995 DRC Form 10-K
        Exhibit 10.50.)
10.38   Indemnification Agreement between DPMI and its directors and officers
        (Incorporated by reference to the 1995 DRC Form 10-K Exhibit 10.51.)
10.43   Office Lease between DRP, LP and an affiliate of EJDC (Southwoods
        Executive Center) (Incorporated by reference to the 1995 DRC Form 10-K
        Exhibit 10.69.)
10.44   Sublease between DRP, LP and DPMI (Incorporated by reference to the
        1995 DRC Form 10-K Exhibit 10.70.)
10.45   Purchase Option and Right of First Refusal Agreement between DRP, LP
        and Robinson Mall, Inc. (for The Mall at Robinson Town Center)
        (Incorporated by reference to the 1994 DRC Form 10-K Exhibit 10(p)(1).)
10.46   Purchase Option and Right of First Refusal Agreement between DRP, LP
        and EJDC (for SouthPark Center Development Site) (Incorporated by
        reference to the 1994 DRC Form 10-K Exhibit 10(p)(2).)
10.47   Purchase Option and Right of First Refusal Agreement between DRP, LP
        and Washington Mall Associates (for Washington, Pennsylvania Site)
        (Incorporated by reference to the 1994 DRC Form 10-K Exhibit 10(p)(3).)
10.48   Purchase Option and Right of First Offer Agreement between DRP, LP and
        Cutler Ridge Mall, Inc. (for Cutler Ridge Mall) (Incorporated by
        reference to the 1994 DRC Form 10-K Exhibit 10(q)(1).)
10.49   Purchase Option and Right of First Offer Agreement between DRP, LP and
        Almonte, Inc. (for Red Bird Mall) (Incorporated by reference to the
        1994 DRC Form 10-K Exhibit 10(q)(2).)
<PAGE>
10.50   Purchase Option and Right of First Refusal Agreement between DRP, LP
        and DeBartolo-Stow Associates (for University Town Center)
        (Incorporated by reference to the 1994 DRC Form 10-K Exhibit 10(r).)
10.51   Acquisition Option Agreement between DRP, LP and Coral Square
        Associates (for Coral Square) (Incorporated by reference to the 1994
        DRC Form 10-K Exhibit 10(s)(1).)
10.52   Acquisition Option Agreement between DRP, LP and Lakeland Square
        Associates (for Lakeland Square) (Incorporated by reference to the 1994
        DRC Form 10-K Exhibit 10(s)(2).)
10.53 (c)Amended and Restated Articles of Incorporation of SD Property Group,
        Inc.
10.54 (c)Amended and Restated Regulations of SD Property Group, Inc.
10.55 (c)Indemnity Agreement by and between the Company and its new Directors,
        dated as of August 9, 1996
10.56 (c)Contribution Agreement, dated as of June 25, 1996, by and among DRC
        and the former limited partners of SPG, LP., excluding JCP Realty, Inc.
        and Brandywine Realty, Inc.
10.57 (c)JCP Contribution Agreement, dated as of August 8, 1996, by and among
        DRC and JCP Realty, Inc., and Brandywine Realty, Inc.
10.58 (c)Subscription Agreement by and between Day Acquisition Corp., and the
        Purchaser (as defined in this Exhibit)
10.59 (c)Amendment to Service Agreement dated as of August 9, 1996, between
        EJDC and DPMI
10.60 (c)Registration Rights Agreement (the "Agreement"), dated as of August 9,
        1996, by and among the "Simon Family Members" (As defined in the
        Agreement), SPG, Inc., JCP Realty, Inc., Brandywine Realty, Inc., and
        the Estate of Edward J. DeBartolo Sr., Edward J. DeBartolo, Jr., Marie
        Denise DeBartolo York, and the Trusts and other entities listed on
        Schedule 2 of the Agreement, and any of their respective successors-in-
        interest and permitted assigns.
10.61 (c)Fourth Amendment to Purchase Option Agreement, dated as of July 15,
        1996, between JCP Realty, Inc., and DRP, LP.
10.62  Partnership Agreement of SM Portfolio Limited Partnership
10.63  Limited Partnership Agreement of SDG Macerich Properties, L.P.
10.64   Agreement of Limited Partnership of Simon Capital Limited Partnership
21.1    List of Subsidiaries of the Company.
23.1    Consent of Arthur Andersen LLP.
99.1    Agreement dated November 13, 1996 between Simon DeBartolo Group, Inc.
        and Simon DeBartolo Group, L.P. (Incorporated by reference to Amendment
        No. 3 of Form S-3 filed by Simon DeBartolo Group, L.P. and Simon
        Property Group, L.P. on November 20, 1996 under Registration No. 333-
        11491)

    (a)  Incorporated by reference to the exhibit with the same number (or as
     indicated) that was filed with Form 10-K for the fiscal year ended
     December 31, 1993.

    (b)  Incorporated by reference to the exhibit numbered as indicated that
     was filed with Form 10-K for the fiscal year ended December 31, 1995.

    (c)  Incorporated by reference to the exhibit numbered as indicated that
     was filed with Form 10-K for the fiscal year ended December 31, 1996.
<PAGE>