<PAGE>
 
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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
 
                               ----------------
 
                                   FORM 10-K
 
     [X]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
 
                  For the fiscal year ended December 31, 1998
 
                        Commission file number 1-12618
 
                             SPG PROPERTIES, 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                  (Zip Code)
               offices)
 
      Registrant's telephone number, including area code: (317) 636-1600
 
         Securities registered pursuant to Section 12 (b) of the Act:
 
<TABLE>
<CAPTION>
                                                         Name of each exchange
             Title of each class                          on which registered
             -------------------                         ---------------------
<S>                                                     <C>
8 3/4% Series B Cumulative Redeemable Preferred Stock,  New York Stock Exchange
 $.0001 par value
</TABLE>
 
       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 the 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]
 
   Substantially all of the Registrant's common stock is held by Simon
Property Group, Inc., which is an affiliate of the Registrant.
 
                      Documents Incorporated By Reference
 
   Portions of the Registrant's Proxy Statement in connection with its Annual
Meeting of Shareholders to be held on May 12, 1999 are incorporated by
reference in Part III.
 
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<PAGE>
 
                              SPG PROPERTIES, INC.
 
                           Annual Report on Form 10-K
                               December 31, 1998
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
Item No.                                                               Page No.
--------                                                               --------
                                     Part I
 
<S>                                                                    <C>
 1.Business...........................................................     1
 2.Properties.........................................................     6
 3.Legal Proceedings..................................................    28
 4.Submission of Matters to a Vote of Security Holders................    29
 
                                    Part II
 
 5.Market for the Registrant's Common Equity and Related Stockholder      30
Matters...............................................................
 6.Selected Financial Data............................................    31
 7.Management's Discussion and Analysis of Financial Condition and        31
Results of Operations.................................................
 7A.Quantitative and Qualitative Disclosure About Market Risk.........    42
 8.Financial Statements and Supplementary Data........................    42
 9.Changes in and Disagreements with Accountants on Accounting and        42
Financial Disclosure..................................................
 
                                    Part III
 
10.Directors and Executive Officers of the Registrant.................    43
11.Executive Compensation.............................................    43
12.Security Ownership of Certain Beneficial Owners and Management.....    43
13.Certain Relationships and Related Transactions.....................    43
 
                                    Part IV
 
14.Exhibits, Financial Statements, Schedules and Reports on Form 8-K..    44
</TABLE>
<PAGE>
 
                                    Part I
 
Item 1. Business
 
 Background
 
   SPG Properties, Inc. ("SPG Properties"), formerly Simon DeBartolo Group,
Inc. ("SDG"), is a substantially wholly-owned subsidiary of Simon Property
Group, Inc. ("SPG"). SPG Properties and SPG are both self-administered and
self-managed real estate investment trusts ("REITs") under the Internal
Revenue Code of 1986, as amended. SPG Properties and its substantially wholly
owned subsidiary, SD Property Group, Inc., are general partners of, and hold a
noncontrolling partnership interest in, Simon Property Group, L.P. (the "SPG
Operating Partnership"), formerly Simon DeBartolo Group, L.P. ("SDG, LP"). The
interests in the SPG Operating Partnership represents the sole assets of SPG
Properties and subsidiary. The SPG Operating Partnership is engaged in the
ownership, operation, management, leasing, acquisition, expansion and
development of real estate properties, primarily regional malls and community
shopping centers. SPG is the managing general partner of the SPG Operating
Partnership. Each share of common stock of SPG is paired with a beneficial
interest in 1/100th of a share of common stock of SPG Realty Consultants, Inc.
("SRC" and together with SPG, the "Companies").
 
   As of December 31, 1998, the SPG Operating Partnership owned or held an
interest in 240 income-producing properties, which consist of 152 regional
malls, 77 community shopping centers, three specialty retail centers, five
office and mixed-use properties and three value-oriented super-regional malls
in 35 states (the "Properties"). The SPG Operating Partnership also owned
interests in one regional mall, one value-oriented super-regional mall, one
specialty center and three community centers currently under construction and
eleven parcels of land held for future development (collectively, the
"Development Properties", and together with the Properties, the "Portfolio
Properties"). At December 31, 1998 and 1997, SPG Properties' direct and
indirect ownership interests in the SPG Operating Partnership were 50.4% and
63.9%, respectively. At December 31, 1998, SPG's direct ownership interest in
the SPG Operating Partnership was 21.2%, and through SPG's ownership of SPG
Properties, SPG had direct and indirect ownership interests totaling 71.6%.
The SPG Operating Partnership also holds substantially all of the economic
interest in M.S. Management Associates, Inc. (the "Management Company"). The
Management Company manages Properties generally not wholly-owned by the SPG
Operating Partnership and certain other properties, and also engages in
certain property development activities. The SPG 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.
 
 The CPI Merger
 
   For financial reporting purposes, as of the close of business on September
24, 1998, pursuant to the Agreement and Plan of Merger dated February 18,
1998, SDG, Corporate Property Investors, Inc. ("CPI"), and Corporate Realty
Consultants, Inc ("CRC") combined their business operations (the "CPI
Merger"). Pursuant to the terms of the CPI Merger, SPG Merger Sub, Inc., a
substantially wholly-owned subsidiary of CPI, merged with and into SDG with
SDG continuing as the surviving company. SDG became a majority-owned
subsidiary of CPI and was renamed SPG Properties, Inc. The outstanding shares
of common stock of SDG were exchanged for a like number of shares of CPI.
Beneficial interests in CRC were acquired for $14 million in order to pair the
common stock of CPI with 1/100th of a share of common stock of CRC, the paired
share affiliate.
 
   Immediately prior to the consummation of the CPI Merger, the holders of CPI
common stock were paid a merger dividend consisting of (i) $90 in cash, (ii)
1.0818 additional shares of CPI common stock and (iii) 0.19 shares of 6.50%
Series B convertible preferred stock of CPI per share of CPI common stock.
Immediately prior to the CPI Merger, there were 25,496,476 shares of CPI
common stock outstanding. The aggregate value associated with the completion
of the CPI Merger was approximately $5.9 billion including transaction costs
and liabilities assumed.
 
                                       1
<PAGE>
 
   Also in connection with the CPI Merger, CPI was renamed "Simon Property
Group, Inc.," CRC was renamed "SPG Realty Consultants, Inc." and SDG, LP was
renamed "Simon Property Group, L.P."
 
   Upon completion of the CPI Merger, SPG transferred substantially all of the
CPI assets acquired, which consisted primarily of 23 regional malls, one
community center, two office buildings and one regional mall under
construction (other than one regional mall, Ocean County Mall, and certain net
leased properties valued at approximately $153 million) and liabilities
assumed (except that SPG remains a co-obligor with respect to the Merger
Facility (see Note 9 to the financial statements of the SPG Operating
Partnership)) of approximately $2.3 billion to the SPG Operating Partnership
or one or more subsidiaries of the SPG Operating Partnership in exchange for
47,790,550 Units and 5,053,580 preferred Units in the SPG Operating
Partnership. The preferred partnership interests carry substantially the same
economic terms and equal the number of preferred shares issued and outstanding
as a direct result of the CPI Merger.
 
   For additional information concerning the CPI Merger, please see Note 3 to
the financial statements of the SPG Operating Partnership.
 
   SPG Properties' outstanding publicly traded preferred stock was not
impacted by the above business combination. Prior to the CPI Merger, SPG
Properties and subsidiary accounted for their controlling interests in the SPG
Operating Partnership using the consolidated method of accounting. As a result
of the CPI Merger, SPG Properties and subsidiary are accounting for their
noncontrolling interest in the SPG Operating Partnership using the equity
method of accounting.
 
 The DRC Merger
 
   On August 9, 1996, the national shopping center business of DeBartolo
Realty Corporation ("DRC") was acquired 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, SPG issued a total of 37,873,965
shares of common stock to the DRC shareholders. DRC became a 99.9% subsidiary
of the SPG. SPG 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 4 to
the financial statements of the SPG Operating Partnership.
 
 General
 
   As of December 31, 1998, the SPG Operating Partnership owned or held
interests in a diversified portfolio of 240 income-producing Properties,
including 152 regional malls, 77 community shopping centers, three specialty
retail centers, five office and mixed-use properties and three value-oriented
super-regional malls located in 35 states. Regional malls (including specialty
retail centers, and retail space in the mixed-use Properties), community
centers and the remaining portfolio comprised 90.3%, 6.0%, and 3.7%,
respectively of total consolidated rent revenues and tenant reimbursements in
1998. The value-oriented super-regional malls are not included in consolidated
rent revenues and tenant reimbursements as they are all accounted for using
the equity method of accounting. The Properties contain an aggregate of
approximately 164.9 million square feet of GLA, of which 97.4 million square
feet is owned by the SPG Operating Partnership ("Owned GLA"). More than 4,400
different retailers occupy more than 18,300 stores in the Properties. Total
estimated retail sales at the Properties exceeded $31 billion in 1998.
 
 Operating Strategies
 
   The SPG Operating Partnership's primary business objectives are to increase
per Unit cash generated from operations and the value of the Portfolio
Properties and operations. The SPG Operating Partnership 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 SPG 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.
 
                                       2
<PAGE>
 
  Management. Drawing upon the expertise gained through management of a
  geographically diverse portfolio nationally recognized as high quality
  retail and mixed-use Properties, the SPG 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 directed towards
  establishing and maintaining customer loyalty, and systematic planning and
  monitoring of results.
 
  Acquisitions. The SPG 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 SPG 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 SPG Operating Partnership may be able to acquire properties on a tax-
  advantaged basis for the transferors.
 
  Development. The SPG Operating Partnership's focus is to selectively
  develop new properties in major metropolitan areas that exhibit strong
  population and economic growth. During 1998, the SPG Operating Partnership
  opened two new community shopping centers. In March of 1998, the SPG
  Operating Partnership opened the approximately $13.3 million Muncie Plaza
  in Muncie, Indiana. The SPG Operating Partnership owns 100% of this 196,000
  square-foot community center. In addition, phase I of the approximately
  $34.0 million Lakeline Plaza opened in April 1998 in Austin, Texas. Phase
  II of this 360,000 square-foot community center is scheduled to open in
  1999. Each of these new community centers is adjacent to an existing
  regional mall property. In addition, The Shops at Sunset Place, a
  destination-oriented retail and entertainment project containing
  approximately 510,000 square feet of GLA opened in January of 1999 in South
  Miami, Florida. The SPG Operating Partnership owns a noncontrolling 37.5%
  of this specialty retail center.
 
   Construction also continues on the following projects, which have an
aggregate construction cost of approximately $620 million, the SPG Operating
Partnership's share of which is approximately $347 million:
 
  .  Concord Mills, a 37.5%-owned value-oriented super regional mall project,
     containing approximately 1.4 million square feet of GLA, is scheduled to
     open in September of 1999 in Concord (Charlotte), North Carolina.
 
  .  The Mall of Georgia, an approximately 1.5 million square foot regional
     mall project, is scheduled to open in August of 1999. Adjacent to the
     regional mall, The Mall of Georgia Crossing is an approximately 444,000
     square-foot community shopping center project, which is scheduled to
     open in October of 1999. Simon Group has a noncontrolling 50% ownership
     interest in each of these development projects.
 
  .  In addition to Mall of Georgia Crossing, two other new community center
     projects are under construction: The Shops at North East Plaza and
     Waterford Lakes at a combined 1,243,000 square feet of GLA.
 
    The SPG Operating Partnership also has direct or indirect interests in
    eleven other parcels of land being held for future development in nine
    states totaling approximately 904 acres. Management believes the SPG
    Operating Partnership is well positioned to pursue future development
    opportunities as conditions warrant.
 
  Strategic Expansions and Renovations. A key objective of the SPG Operating
  Partnership is to increase the profitability and market share of the
  Properties through the completion of strategic renovations and expansions.
  In 1998, the SPG Operating Partnership completed construction and opened
  nine new expansion and/or renovation projects: Aventura Mall in Miami,
  Florida; Castleton Square in Indianapolis, Indiana; Independence Center in
  Independence, Missouri; Irving Mall in Irving, Texas; Prien Lake Mall in
  Lake Charles, Louisiana; Richardson Square in Dallas, Texas; Tyrone Square
  in St. Petersburg, Florida; Walt Whitman Mall in Huntington, New York; and
  West Town Mall in Knoxville, Tennessee.
 
 
                                       3
<PAGE>
 
  The SPG Operating Partnership has a number of renovation and/or expansion
  projects currently under construction, or in preconstruction development.
  The SPG Operating Partnership expects to commence construction on many of
  these projects in the next 12 to 24 months.
 
 Competition
 
   The SPG 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) the mall marketing
initiatives of Simon Brand Ventures, which the SPG Operating Partnership
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 SPG
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 SPG Operating Partnership's ability to lease
space and on the level of rents the SPG Operating Partnership can obtain.
 
   There are numerous commercial developers, real estate companies and other
owners of real estate that compete with the SPG 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 SPG 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). Nearly 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
SPG Operating Partnership. 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 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 SPG 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 auto services center
establishments or emergency electrical generation equipment. All such tanks
have been or are being removed, upgraded or abandoned in place in accordance
with applicable environmental laws. Site assessments
 
                                       4
<PAGE>
 
have revealed certain soil and groundwater contamination associated with such
tanks at some of these Properties. Subsurface investigations (Phase II
assessments) and remediation activities are either ongoing or scheduled to be
conducted at such Properties. The cost 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 SPG Operating Partnership will conduct
environmental due diligence consistent with past practice.
 
 Employees
 
   The SPG Operating Partnership and its affiliates employ approximately,
6,300 persons at various centers and offices throughout the United States.
Approximately 935 of such employees are located at the SPG Operating
Partnership's headquarters in Indianapolis, Indiana, and approximately 1,075
of all employees are part-time.
 
 Insurance
 
   The SPG 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
 
   Executive offices of SPG, SPG Properties and the SPG Operating Partnership
are located at National City Center, 115 West Washington Street, Indianapolis,
Indiana 46204, and its telephone number is (317) 636-1600.
 
 Executive Officers of the Registrant
 
   The following table sets forth certain information with respect to the
executive officers of SPG and SPG Properties as of December 31, 1998.
 
<TABLE>
<CAPTION>
               Name           Age                    Position
               ----           ---                    --------
      <C>                     <C> <S>
      Melvin Simon (1).......  72 Co-Chairman
 
      Herbert Simon (1)......  64 Co-Chairman
 
      David Simon (1)........  37 Chief Executive Officer
 
      Hans C. Mautner........  60 Vice Chairman
 
      Richard S. Sokolov.....  49 President and Chief Operating Officer
 
      Randolph L. Foxworthy..  54 Executive Vice President--Corporate
                                  Development
 
      William J. Garvey......  59 Executive Vice President--Property
                                  Development
 
      James A. Napoli........  52 Executive Vice President--Leasing
 
      John R. Neutzling......  46 Executive Vice President--Property Management
 
      James M. Barkley.......  47 General Counsel; Secretary
 
      Stephen E. Sterrett....  43 Treasurer
 
      John Rulli.............  42 Senior Vice President--Human Resources &
                                  Corporate Operations
 
      James R. Giuliano, III.  41 Senior Vice President
</TABLE>
--------
(1) Melvin Simon is the brother of Herbert Simon and the father of David
    Simon.
 
                                       5
<PAGE>
 
   Set forth below is a summary of the business experience of the executive
officers of SPG and SPG Properties. The executive officers serve at the
pleasure of the Board of Directors and have served in such capacities since
the formation of SPG in 1993, with the exception of Mr. Mautner, who has held
his office since the CPI Merger and Mr. Sokolov and Mr. Giuliano who have held
their offices since the DRC Merger. For biographical information of Melvin
Simon, Herbert Simon, David Simon, Hans C. Mautner, and Richard Sokolov, see
Item 10 of this report.
 
   Mr. Foxworthy is the Executive Vice President--Corporate Development. 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 SPG since its formation in 1993.
 
   Mr. Garvey is the Executive Vice President--Property Development. 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. 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. 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 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 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.
 
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 152 regional malls in the
Properties range in size from approximately 200,000 to 2.2 million square feet
of GLA, with all but three regional malls over 400,000 square feet. These
regional malls contain in the aggregate nearly 16,000 occupied stores,
including over 600 anchors which are mostly national retailers. As of December
31, 1998, regional malls (including specialty retail centers, and retail space
in the mixed-use Properties) represented 85.0% of total GLA, 79.9% of Owned
GLA and 85.8% of total annualized base rent of the Properties.
 
   Community shopping centers are generally unenclosed and smaller than
regional malls. Most of the 77 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, 1998, community shopping centers represented 11.1% of total GLA,
13.7% of Owned GLA and 6.6% of the total annualized base rent of the
Properties.
 
                                       6
<PAGE>
 
   The SPG Operating Partnership also has an interest in three specialty
retail centers, five office and mixed-use Properties and three value-oriented
super-regional malls. The specialty retail centers contain approximately
763,000 square feet of GLA and do not have anchors; instead, they feature
retailers and entertainment facilities in a distinctive shopping environment
and location. The five office and mixed-use Properties range in size from
approximately 350,000 to 1,033,000 square feet of GLA. Two of these Properties
are regional malls with connected office buildings, two are located in mixed-
use developments and contain primarily office space and one is solely 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, 1998, value-
oriented super-regional malls represented 2.3% of total GLA, 3.7% of Owned GLA
and 4.1% of the total annualized base rent of the Properties.
 
   As of December 31, 1998, approximately 89.9% 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 98.2% of the Owned GLA in
the value-oriented super-regional malls was leased, and approximately 91.4% of
Owned GLA in the community shopping centers was leased.
 
   Of the 240 Properties, 172 are owned 100% by the SPG Operating Partnership
and the remainder are held as joint venture interests. The SPG Operating
Partnership is the managing or co-managing general partner of all but eight of
the Properties held as joint venture interests.
 
                                       7
<PAGE>
 
                             Additional Information
 
   The following table sets forth certain information, as of December 31, 1998,
regarding the Properties:
 
<TABLE>
<CAPTION>
                                                          The SPG
                                                         Operating
                                     Ownership         Partnership's
                                Interest (Expiration    Percentage   Year Built or
           Name/Location           if Lease) (1)       Interest (2)    Acquired    Total GLA Anchors/Specialty Anchors
      ----------------------- -----------------------  ------------- ------------- --------- -------------------------
 <C>  <C>                     <C>                      <C>           <C>           <C>       <S>
 REGIONAL MALLS
   1. Alton Square            Fee                          100.0     Acquired 1993   641,409  Famous Barr, JCPenney,
      Alton, IL                                                                               Sears
 
   2. Amigoland Mall          Fee                          100.0     Built 1974      558,622  Beall's, Dillard's,
      Brownsville, TX                                                                         JCPenney, Montgomery
                                                                                              Ward
 
   3. Anderson Mall           Fee                          100.0     Built 1972      637,924  Gallant Belk, JCPenney,
      Anderson, SC                                                                            Sears, Uptons, United
                                                                                              Artists Theatre
 
   4. Aurora Mall             Ground Lease (2009)          100.0     Acquired 1998   999,932  JCPenney, Foley's (3),
      Aurora, CO                                                                              Sears
 
   5. Aventura Mall (4)       Fee                           33.3     Built 1983    1,551,190  AMC Theatre,
      Miami, FL                                                                               Bloomingdales, Burdines
                                                                                              (5), JCPenney, Lord &
                                                                                              Taylor, Macy's, Sears
 
   6. Avenues, The            Fee                           25.0     Built 1990    1,112,206  Belk, Dillard's, Sears,
      Jacksonville, FL                                                                        Parisian, JCPenney
 
   7. Barton Creek Square     Fee                          100.0     Built 1981    1,369,938  Dillard's (3), Foley's,
      Austin, TX                                                                              General Cinema,
                                                                                              JCPenney, Sears,
                                                                                              Montgomery Ward
 
   8. Battlefield Mall        Fee and Ground Lease         100.0     Built 1970    1,198,759  Dillard's, Famous Barr,
      Springfield, MO         (2056)                                                          Montgomery Ward, Sears,
                                                                                              JCPenney
 
   9. Bay Park Square         Fee                          100.0     Built 1980      642,639  Kohl's, Montgomery
      Green Bay, WI                                                                           Ward, Shopko, Elder-
                                                                                              Beerman, Marcus Cinema
 
  10. Bergen Mall             Fee and Ground Lease         100.0     Acquired 1987   922,432  Value City, Stern's,
      Paramus, NJ             (6) (2061)                                                      Marshall's, Off 5th-
                                                                                              Saks Fifth Avenue
                                                                                              Outlet
 
  11. Biltmore Square         Fee (7)                       66.7     Built 1989      494,548  Belk, Dillard's,
      Asheville, NC                                                                           Proffitt's, Goody's
 
  12. Boynton Beach Mall      Fee                          100.0     Built 1985    1,064,137  Burdines, Macy's,
      Boynton Beach, FL                                                                       Sears, Dillard's (3)
                                                                                              (5), JCPenney
 
  13. Brea Mall               Fee                          100.0     Acquired 1998 1,302,126  JCPenney, Robinsons-
      Brea, CA                                                                                May, Nordstrom, Sears,
                                                                                              Macy's
 
  14. Broadway Square         Fee                          100.0     Acquired 1994   571,430  Dillard's, JCPenney,
      Tyler, TX                                                                               Sears
 
  15. Brunswick Square        Fee                          100.0     Built 1973      734,639  Barnes & Noble (5),
      East Brunswick, NJ                                                                      Brunswick Square
                                                                                              Movies, Macy's,
                                                                                              JCPenney
 
  16. Burlington Mall         Ground Lease (2048)          100.0     Acquired 1998 1,252,109  Lord & Taylor,
      Burlington, MA                                                                          Filene's, Macy's, Sears
 
  17. Castleton Square        Fee                          100.0     Built 1972    1,390,085  Galyan's, LS Ayres,
      Indianapolis, IN                                                                        Lazarus, JCPenney,
                                                                                              Sears, Von Maur
 
  18. Century III Mall        Fee (8)                       50.0     Built 1979    1,286,753  Lazarus, Kaufmann's,
      Pittsburgh, PA                                                                          JCPenney, Sears, T.J.
                                                                                              Maxx, Wickes Furniture
 
  19. Charlottesville Fashion Ground Lease (2076)          100.0     Acquired 1997   573,619  Belk (5), JCPenney,
      Square                                                                                  Sears
      Charlottesville, VA
 
  20. Chautauqua Mall         Fee                          100.0     Built 1971      435,790  The Bon Ton , Sears,
      Jamestown, NY                                                                           JCPenney, Office Max
 
</TABLE>
 
 
                                       8
<PAGE>
 
<TABLE>
<CAPTION>
                                                           The SPG
                                                          Operating
                                      Ownership         Partnership's
                                 Interest (Expiration    Percentage   Year Built or
           Name/Location            if Lease) (1)       Interest (2)    Acquired    Total GLA Anchors/Specialty Anchors
      ------------------------ -----------------------  ------------- ------------- --------- -------------------------
 <C>  <C>                      <C>                      <C>           <C>           <C>       <S>
  21. Cheltenham Square        Fee                          100.0     Built 1981      633,073  Burlington Coat
      Philadelphia, PA                                                                         Factory, United Artists
                                                                                               Theatre, Home Depot,
                                                                                               Value City, Seaman's
                                                                                               Furniture, Shop Rite
 
  22. Chesapeake Square        Fee and Ground Lease          75.0     Built 1989      704,511  Dillard's (3),
      Chesapeake, VA           (2062) (7)                                                      JCPenney, Sears,
                                                                                               Montgomery Ward,
                                                                                               Hecht's (5)
 
  23. Cielo Vista Mall         Fee and Ground Lease         100.0     Built 1974    1,192,002  Dillard's (3),
      El Paso, TX              (9) (2027)                                                      JCPenney, Montgomery
                                                                                               Ward, Sears
 
  24. Circle Centre            Property Lease (2097)         14.7     Built 1995      800,929  Nordstrom, Parisian,
      Indianapolis, IN                                                                         United Artists Theatre,
                                                                                               Gameworks
 
  25. College Mall             Fee and Ground Lease         100.0     Built 1965      708,151  JCPenney, Lazarus, L.S.
      Bloomington, IN          (9) (2048)                                                      Ayres, Sears, Target
 
  26. Columbia Center          Fee                          100.0     Acquired 1987   772,583  Barnes & Noble, The Bon
      Kennewick, WA                                                                            Marche, Eastgate
                                                                                               Theatre, Lamonts,
                                                                                               JCPenney, Sears
 
  27. Coral Square             Fee                           50.0     Built 1984      944,466  Burdines (3),
      Coral Springs, FL                                                                        Dillard's, JCPenney,
                                                                                               Sears
 
  28. Cordova Mall             Fee                          100.0     Acquired 1998   841,398  Montgomery Ward,
      Pensecola, FL                                                                            Parisian, Dillard's (3)
 
  29. Cottonwood Mall          Fee                          100.0     Built 1996    1,044,369  Dillard's, Foley's,
      Albuquerque, NM                                                                          JCPenney, Mervyn's,
                                                                                               Montgomery Ward, United
                                                                                               Artists Theatre
 
  30. Crossroads Mall          Fee                          100.0     Acquired 1994   871,764  Dillard's, Sears,
      Omaha, NE                                                                                Younkers, Barnes &
                                                                                               Noble
 
  31. Crystal Mall (4)         Fee                           50.0     Acquired 1998   785,365  JCPenney, Filene's,
      Waterford, CT                                                                            Sears, Macy's
 
  32. Crystal River Mall       Fee                          100.0     Built 1990      426,124  Belk, Kmart, JCPenney,
      Crystal River, FL                                                                        Regal Cinema, Sears
 
  33. Dadeland Mall            Fee                           50.0     Acquired 1997 1,405,693  Lord & Taylor, Saks
      Miami, FL                                                                                Fifth Avenue
 
  34. DeSoto Square            Fee                          100.0     Built 1973      687,156  Burdines, JCPenney,
      Bradenton, FL                                                                            Sears, Dillard's, Regal
                                                                                               Cinema
 
  35. Eastern Hills Mall       Fee                          100.0     Built 1971      997,664  Sears, The Bon Ton,
      Buffalo, NY                                                                              JCPenney, Kaufmann's,
                                                                                               Burlington Coat Factory
 
  36. Eastland Mall            Fee                           50.0     Acquired 1998   911,838  JC Penney, De Jong's,
      Evansville, IN                                                                           Famous Barr, Lazarus
 
  37. Eastland Mall            Fee                          100.0     Built 1986      706,617  Dillard's, Hollywood
      Tulsa, OK                                                                                Cinema, JCPenney,
                                                                                               Mervyn's, Service
                                                                                               Merchandise
 
  38. Edison Mall              Fee                          100.0     Acquired 1997   986,971  Burdines (3),
      Fort Meyers, FL                                                                          Dillard's, JCPenney,
                                                                                               Sears
 
  39. Empire Mall (4)          Fee                           50.0     Acquired 1998 1,051,421  JCPenney, Younkers,
      Sioux Falls, SD                                                                          Sears, Daytons, (10)
 
  40. Fashion Mall at Keystone Ground Lease (2067)          100.0     Acquired 1997   651,671  Jacobsons, Parisian
      at the Crossing, The
      Indianapolis, IN
 
  41. Florida Mall, The        Fee                           50.0     Built 1986    1,119,813  Burdines (5),
      Orlando, FL                                                                              Dillard's, JCPenney,
                                                                                               Parisian, Saks Fifth
                                                                                               Avenue, Sears
 
</TABLE>
 
 
                                       9
<PAGE>
 
<TABLE>
<CAPTION>
                                                           The SPG
                                                          Operating
                                      Ownership         Partnership's
                                 Interest (Expiration    Percentage   Year Built or
           Name/Location            if Lease) (1)       Interest (2)    Acquired    Total GLA Anchors/Specialty Anchors
      ------------------------ -----------------------  ------------- ------------- --------- -------------------------
 <C>  <C>                      <C>                      <C>           <C>           <C>       <S>
  42. Forest Mall              Fee                          100.0     Built 1973      483,695  JCPenney, Kohl's,
      Fond Du Lac, WI                                                                          Younkers, Sears,
                                                                                               Staples
 
  43. Forest Village Park Mall Fee                          100.0     Built 1980      418,354  JCPenney, Kmart
      Forestville, MD
 
  44. Fremont Mall             Fee                          100.0     Built 1966      199,710  1/2 Price Store,
      Fremont, NE                                                                              JCPenney
 
  45. Golden Ring Mall         Fee                          100.0     Built 1974      719,733  Caldor (11), Hecht's,
      Baltimore, MD                                                                            Montgomery Ward, United
                                                                                               Artists
 
  46. Granite Run Mall         Fee                           50.0     Acquired 1998 1,034,479  Boscovs, AMC Theatre,
      Media, PA                                                                                JCPenney, Sears
 
  47. Great Lakes Mall         Fee                          100.0     Built 1961    1,294,950  Dillard's (3), Regal
      Cleveland, OH                                                                            Cinema, Kaufmann's,
                                                                                               JCPenney, Sears
 
  48. Greenwood Park Mall      Fee                          100.0     Acquired 1979 1,278,298  JCPenney, JCPenney Home
      Greenwood, IN                                                                            Store, Lazarus, L.S.
                                                                                               Ayres, Sears, Service
                                                                                               Merchandise, Von Maur
 
  49. Gulf View Square         Fee                          100.0     Built 1980      802,938  Burdines, Dillard's,
      Port Richey, FL                                                                          Montgomery Ward,
                                                                                               JCPenney, Sears
 
  50. Gwinnett Place           Fee                           50.0     Acquired 1998 1,246,457  Parisian, Macy's,
      Duluth, GA                                                                               JCPenney, Rich's, Sears
 
  51. Haywood Mall             Fee                           50.0     Acquired 1998 1,243,472  Belk Simpson, JCPenney,
      Greensville, SC                                                                          Rich's, Sears,
                                                                                               Dillard's
 
  52. Heritage Park Mall       Fee                          100.0     Built 1978      637,356  Dillard's, Sears,
      Midwest City, OK                                                                         Montgomery Ward,
                                                                                               Service Merchandise
 
  53. Highland Mall (4)        Fee                           50.0     Acquired 1998 1,097,785  Dillard's (3), Foley's,
      Austin, TX                                                                               JCPenney
 
  54. Hutchinson Mall          Fee                          100.0     Built 1985      525,661  Cinema 8, Dillard's,
      Hutchinson, KS                                                                           JCPenney, Sears, Hobby
                                                                                               Lobby
 
  55. Independence Center      Fee                          100.0     Acquired 1994 1,025,758  The Jones Store Co.,
      Independence, MO                                                                         Dillard's, Sears
 
  56. Indian River Mall        Fee                           50.0     Built 1996      747,919  AMC Theatre, Burdines,
      Vero Beach, FL                                                                           Sears, JCPenney,
                                                                                               Dillard's
 
  57. Ingram Park Mall         Fee                          100.0     Built 1979    1,131,616  Dillard's (3), Foley's,
      San Antonio, TX                                                                          JCPenney, Sears,
                                                                                               Beall's
 
  58. Irving Mall              Fee                          100.0     Built 1971    1,098,560  Barnes & Noble,
      Irving, TX                                                                               Dillard's, Foley's,
                                                                                               General Cinema,
                                                                                               JCPenney, Mervyn's,
                                                                                               Sears,
 
  59. Jefferson Valley Mall    Fee                          100.0     Built 1983      589,444  Macy's, Sears, Service
      Yorktown Heights, NY                                                                     Merchandise, United
                                                                                               Artist Theatre
 
  60. Knoxville Center         Fee                          100.0     Built 1984      990,092  Dillard's, JCPenney,
      Knoxville, TN                                                                            Proffitt's, Regal
                                                                                               Cinema, Sears, Service
                                                                                               Merchandise
 
  61. La Plaza                 Fee and Ground               100.0     Built 1976      989,322  Dillard's, JCPenney,
      McAllen, TX              Lease (6) (2040)                                                Beall's, Foley's,
                                                                                               Sears, Service
                                                                                               Merchandise, Joe Brand-
                                                                                               Lady Brand
 
  62. Lafayette Square         Fee                          100.0     Built 1968    1,226,227  JCPenney, LS Ayres,
      Indianapolis, IN                                                                         Sears, Lazarus,
                                                                                               Waccamaw, Burlington
                                                                                               Coat Factory (5)
 
  63. Laguna Hills Mall        Fee                          100.0     Acquired 1997   868,731  JCPenney, Macy's, Sears
      Laguna Hills, CA
 
</TABLE>
 
 
                                       10
<PAGE>
 
<TABLE>
<CAPTION>
                                                      The SPG
                                                     Operating
                                 Ownership         Partnership's
                            Interest (Expiration    Percentage   Year Built or
         Name/Location         if Lease) (1)       Interest (2)    Acquired    Total GLA Anchors/Specialty Anchors
      ------------------- -----------------------  ------------- ------------- --------- -------------------------
 <C>  <C>                 <C>                      <C>           <C>           <C>       <S>
  64. Lake Square Mall    Fee                           50.0     Acquired 1998   560,671  AMC 6 Theatres,
      Leesburg, FL                                                                        JCPenney, Sears, Belk,
                                                                                          Target
 
  65. Lakeland Square     Fee                           50.0     Built 1988      899,350  Belk, Burdines,
      Lakeland, FL                                                                        Dillard's (3),
                                                                                          JCPenney, Sears
 
  66. Lakeline Mall       Fee (12)                      85.0     Built 1995    1,102,847  Dillard's, Foley's,
      N. Austin, TX                                                                       Sears, JCPenney,
                                                                                          Mervyn's, Regal Cinema
 
  67. Lenox Square        Fee                          100.0     Acquired 1998 1,426,493  Neiman Marcus, Macy's,
      Atlanta, GA                                                                         Rich's, United Artists
                                                                                          Theatres
 
  68. Lima Mall           Fee                          100.0     Built 1965      752,802  Elder-Beerman, Sears,
      Lima, OH                                                                            Lazarus, JCPenney
 
  69. Lincolnwood Town    Fee                          100.0     Built 1990      441,131  Carson Pirie Scott,
      Center                                                                              JCPenney
      Lincolnwood, IL
 
  70. Lindale Mall (4)    Fee                           50.0     Acquired 1998   693,660  Younkers, Von Maur,
      Cedar Rapids, IA                                                                    Sears
 
  71. Livingston Mall     Fee                          100.0     Acuired 1998    985,659  Macy's, Sears, Lord &
      Livingston, NJ                                                                      Taylor
 
  72. Longview Mall       Fee                          100.0     Built 1978      616,608  Dillard's (3),
      Longview, TX                                                                        JCPenney, Sears,
                                                                                          Service Merchandise,
                                                                                          Beall's
 
  73. Machesney Park Mall Fee                          100.0     Built 1979      556,093  Bergners, JCPenney,
      Rockford, IL                                                                        Kerasotes Theatre,
                                                                                          Kohl's, Seventh Avenue
                                                                                          Direct
 
  74. Markland Mall       Ground Lease (2041)          100.0     Built 1968      390,901  Lazarus, Sears, Target
      Kokomo, IN
 
  75. McCain Mall         Ground Lease (13)            100.0     Built 1973      776,508  Dillard's, JCPenney,
      N. Little Rock, AR  (2032)                                                          M.M. Cohn, Sears
 
  76. Melbourne Square    Fee                          100.0     Built 1982      737,526  Belk, Burdines,
      Melbourne, FL                                                                       Dillard's (3), JCPenney
 
  77. Memorial Mall       Fee                          100.0     Built 1969      416,698  JCPenney, Kohl's, Sears
      Sheboygan, WI
 
  78. Menlo Park Mall     Fee                          100.0     Acquired 1997 1,299,492  Macy's, Nordstrom,
      Edison, NJ                                                                    (14)  Cineplex Odeon
 
  79. Mesa Mall (4)       Fee                           50.0     Acquired 1998   850,571  Sears, Herberger's,
      Grand Junction, CO                                                                  JCPenney, Target,
                                                                                          Mervyn's
 
  80. Metrocenter (4)     Fee                           50.0     Acquired 1998 1,303,516  Macy's, Dillard's,
      Phoenix, AZ                                                                         Robinsons-May,
                                                                                          JCPenney, Sears
 
  81. Miami               Fee                           60.0     Built 1982      972,340  Burdines (3), Sears,
      International Mall                                                                  Dillard's, JCPenney
      Miami, FL
 
  82. Midland Park Mall   Fee                          100.0     Built 1980      616,336  Dillard's (3),
      Midland, TX                                                                         JCPenney, Sears,
                                                                                          Beall's
 
  83. Miller Hill Mall    Fee                          100.0     Built 1973      800,808  JCPenney, Montgomery
      Duluth, MN                                                                          Ward, Sears, Younkers
 
  84. Mission Viejo Mall  Fee                          100.0     Built 1979      818,315  Macy's, Robinsons May
      Mission Viejo, CA                                                                   (3), Nordstrom (5),
                                                                                          Saks Fifth Avenue (5)
</TABLE>
 
                                       11
<PAGE>
 
<TABLE>
<CAPTION>
                                                             The SPG
                                                            Operating
                                        Ownership         Partnership's
                                   Interest (Expiration    Percentage   Year Built or
            Name/Location             if Lease) (1)       Interest (2)    Acquired    Total GLA Anchors/Specialty Anchors
      -------------------------- -----------------------  ------------- ------------- --------- -------------------------
 <C>  <C>                        <C>                      <C>           <C>           <C>       <S>
  85. Mounds Mall                Ground Lease                 100.0     Built 1965      407,673  Elder-Beerman,
      Anderson, IN               (2033)                                                          JCPenney,
                                                                                                 Sears
 
  86. Muncie Mall                Fee                          100.0     Built 1970      656,715  JCPenney, L.S. Ayres,
      Muncie, IN                                                                                 Sears,
                                                                                                 Elder Beerman (3)
 
  87. Nanuet Mall                Fee                          100.0     Acquired 1998   913,844  Stern's, Macy's, Sears
      Nanuet, NY
 
  88. North East Mall            Fee                          100.0     Built 1971    1,141,429  Dillard's (3),
      Hurst, TX                                                                                  JCPenney, Montgomery
                                                                                                 Ward, Sears, Nordstrom
                                                                                                 (5), Saks Fifth
                                                                                                 Avenue (5)
 
  89. North Towne Square         Fee                          100.0     Built 1980      751,605  Lion, Montgomery Ward,
      Toledo, OH                                                                                 (10)
 
  90. Northfield Square          Fee(7)                        31.6     Built 1990      558,737  Cinemark Movies 10,
      Bradley, IL                                                                                Carson
                                                                                                 Pirie Scott (3) (5),
                                                                                                 JCPenney,
                                                                                                 Sears
 
  91. Northgate Mall             Fee                          100.0     Acquired 1987 1,104,888  The Bon Marche,
      Seattle, WA                                                                          (15)  Lamonts,
                                                                                                 Nordstrom, JCPenney
 
  92. Northlake Mall             Fee                          100.0     Acquired 1998   962,397  JCPenney, Parisian,
      Atlanta, GA                                                                                Macy's,
                                                                                                 Sears
 
  93. Northwoods Mall            Fee                          100.0     Acquired 1983   667,561  Famous Barr, JCPenney,
      Peoria, IL                                                                                 Sears
 
  94. Northpark Mall             Fee                           50.0     Acquired 1998 1,057,383  Von Maur, Younkers,
      Davenport, IA                                                                              Montgomery Ward,
                                                                                                 JCPenney, Sears
 
  95. Oak Court Mall             Fee                          100.0     Acquired 1997   842,406  Dillard's (3),
      Memphis, TN                                                                          (16)  Goldsmith's
 
  96. Orange Park Mall           Fee                          100.0     Acquired 1994   924,893  AMC 24 Theatre, Belk,
      Jacksonville, FL                                                                           Dillard's, JCPenney,
                                                                                                 Sears
 
  97. Orland Square              Fee                          100.0     Acquired 1997 1,224,891  Carson Pirie Scott,
      Orland Park, IL                                                                            JCPenney,
                                                                                                 Marshall Field, Plitt
                                                                                                 Theatres,
                                                                                                 Sears
 
  98. Paddock Mall               Fee                          100.0     Built 1980      559,552  Belk, Burdines,
      Ocala, FL                                                                                  JCPenney,
                                                                                                 Sears
 
  99. Palm Beach Mall            Fee                          100.0     Built 1967    1,024,470  Dillard's (5),
      West Palm Beach, FL                                                                        JCPenney,
                                                                                                 Sears, Lord & Taylor,
                                                                                                 Burdines
 
 100. Phipps Plaza               Fee                          100.0     Acquired 1998   820,654  AMC Theatres, Lord &
      Atlanta, GA                                                                                Taylor, Parisian, Saks
                                                                                                 Fifth
                                                                                                 Avenue
 
 101. Port Charlotte Town Center Ground Lease(7)               80.0     Built 1989      716,208  Burdines, Dillard's,
      Port Charlotte, FL         (2064)                                                          Montgomery Ward,
                                                                                                 JCPenney, Regal Cinema
                                                                                                 (5),
                                                                                                 Sears
 
 102. Prien Lake Mall            Fee and Ground               100.0     Built 1972      814,516  Dillards, JCPenney,
      Lake Charles, LA           Lease(6) (2025)                                                 Montgomery Ward,
                                                                                                 Sears, The White House
 
 103. Raleigh Springs Mall       Fee and Ground               100.0     Built 1979      907,220  Dillard's, Goldsmith's,
      Memphis, TN                Lease(6) (2018)                                                 JCPenney, Sears
 
</TABLE>
 
 
                                       12
<PAGE>
 
<TABLE>
<CAPTION>
                                                           The SPG
                                                          Operating
                                      Ownership         Partnership's
                                 Interest (Expiration    Percentage   Year Built or
           Name/Location            if Lease) (1)       Interest (2)    Acquired    Total GLA Anchors/Specialty Anchors
      ------------------------ -----------------------  ------------- ------------- --------- -------------------------
 <C>  <C>                      <C>                      <C>           <C>           <C>       <S>
 104. Randall Park Mall        Fee                          100.0     Built 1976    1,580,786  Dillard's, Kaufmann's,
      Cleveland, OH                                                                            Casa LaSalle, JCPenney,
                                                                                               Magic Johnson Theatres
                                                                                               (5),
                                                                                               Sears, Burlington Coat
                                                                                               Factory
 
 105. Richardson Square        Fee                          100.0     Built 1977      746,569  Barnes & Noble,
      Dallas, TX                                                                               Dillard's,
                                                                                               Ross Dress for Less,
                                                                                               Sears,
                                                                                               Stein Mart, Montgomery
                                                                                               Ward
 
 106. Richmond Town Square     Fee                          100.0     Built 1966    1,004,897  JCPenney, Kaufmann's,
      Cleveland, OH                                                                            Sears, Sony Theatres
                                                                                               (5)
 
 107. Richmond Square          Fee                          100.0     Built 1966      385,326  Dillard's, JCPenney,
      Richmond, IN                                                                             Sears,
                                                                                               Office Max
 
 108. River Oaks Center        Fee                          100.0     Acquired 1997 1,336,138  Carson Pirie Scott,
      Calumet City, IL                                                                   (17)  Cineplex Odeon,
                                                                                               JCPenney,
                                                                                               Marshall Field, Sears
 
 109. Rockaway Townsquare      Fee                          100.0     Acquired 1998 1,238,788  Lord & Taylor,
      Rockaway, NJ                                                                             JCPenney,
                                                                                               Macy's, Sears
 
 110. Rolling Oaks Mall North  Fee                          100.0     Built 1988      757,972  Dillard's, Foley's,
      San Antonio, TX                                                                          Sears,
                                                                                               Regal Cinema
 
 111. Roosevelt Field Mall     Fee                          100.0     Acquired 1998 2,176,161  Bloomingdale's,
      Garden City, NY                                                                          JCPenney,
                                                                                               Nordstrom, Macy's,
                                                                                               Stern's
 
 112. Ross Park Mall           Fee                          100.0     Built 1986    1,275,231  Lazarus, JCPenney,
      Pittsburgh, PA                                                                           Kaufmann's, Sears,
                                                                                               Service Merchandise
 
 113. Rushmore Mall (4)        Fee                           50.0     Acquired 1998   836,409  JCPenney, Herberger's,
      Rapid City, SD                                                                           Sears, Target, (10)
 
 114. Santa Rosa Plaza         Fee                          100.0     Acquired 1998   698,363  Macy's, Mervyn's, Sears
      Santa Rosa, CA
 
 115. St. Charles Towne Center Fee                          100.0     Built 1990    1,053,318  Cineplex Odeon,
      Waldorf, MD                                                                              Hecht's,
                                                                                               JCPenney, Kohl's,
                                                                                               Sears,
                                                                                               Montgomery Ward,
 
 116. Seminole Towne Center    Fee                           45.0     Built 1995    1,153,793  Burdines, Dillard's,
      Sanford, FL                                                                              JCPenney, Parisian,
                                                                                               Sears
                                                                                               United Artists
 
 117. Smith Haven Mall         Fee                           25.0     Acquired 1995 1,343,321  Sterns, Macy's, Sears,
      Lake Grove, NY                                                                           JCPenney, Cineplex
                                                                                               Odeon
 
 118. Source, The              Fee                           25.0     Built 1997      730,177  ABC Home, Circuit City,
      Long Island, NY                                                                          Fortunoff, Loehmann's,
                                                                                               Nordstrom Rack, Off
                                                                                               5th-- Saks Fifth
                                                                                               Avenue, Old Navy,
                                                                                               Virgin Megastore
 
 119. South Hills Village      Fee                          100.0     Acquired 1997 1,118,773  Carmike Cinemas,
      Pittsburgh, PA                                                                           Kaufmann's, Lazarus,
                                                                                               Sears
 
 120. South Park Mall          Fee                          100.0     Built 1975      857,610  Burlington Coat
      Shreveport, LA                                                                           Factory, Dillard's,
                                                                                               JCPenney, Montgomery
                                                                                               Ward, Regal Cinema,
                                                                                               Stage
 
 121. South Shore Plaza        Fee                          100.0     Acquired 1998 1,447,783  Macy's, Filene's, Lord
      Braintree, MA                                                                            & Taylor, Sears
 
 122. Southern Hills Mall (4)  Fee                           50.0     Acquired 1998   752,588  Carmike Cinemas,
      Sioux City, IA                                                                           Younkers, Sears, Target
 
</TABLE>
 
 
                                       13
<PAGE>
 
<TABLE>
<CAPTION>
                                                        The SPG
                                                       Operating
                                   Ownership         Partnership's
                              Interest (Expiration    Percentage   Year Built or
          Name/Location          if Lease) (1)       Interest (2)    Acquired    Total GLA Anchors/Specialty Anchors
      --------------------- -----------------------  ------------- ------------- --------- -------------------------
 <C>  <C>                   <C>                      <C>           <C>           <C>       <S>
 123. Southern Park Mall    Fee                          100.0     Built 1970    1,209,407  Dillard's, Kaufmann's,
      Youngstown, OH                                                                        JCPenney, Sears,
                                                                                            Tinseltown USA
 
 124. Southgate Mall        Fee                          100.0     Acquired 1988   321,417  Sears, Dillard's,
      Yuma, AZ                                                                              JCPenney, (10)
 
 125. SouthPark Mall        Fee                           50.0     Acquired 1998 1,034,182  JCPenney, Montgomery
      Moline, IL                                                                            Ward, Younkers, Sears,
                                                                                            Von Maur
 
 126. SouthRidge Mall (4)   Fee                           50.0     Acquired 1998   998,176  Carmike Cinemas, Sears,
      Des Moines, IA                                                                        Younkers, JCPenney,
                                                                                            Target, Montgomery Ward
 
 127. Summit Mall           Fee                          100.0     Built 1965      711,802  Dillard's (3),
      Akron, OH                                                                             Kaufmann's
 
 128. Sunland Park Mall     Fee                          100.0     Built 1988      920,590  General Cinemas,
      El Paso, TX                                                                           JCPenney, Mervyn's,
                                                                                            Sears, Dillard's,
                                                                                            Montgomery Ward
 
 129. Tacoma Mall           Fee                          100.0     Acquired 1987 1,285,895  The Bon Marche, Sears,
      Tacoma, WA                                                                            Nordstrom, JCPenney,
                                                                                            Mervyn's, Plitt
                                                                                            Theatres
 
 130. Tippecanoe Mall       Fee                          100.0     Built 1973      867,668  Kohl's, Lazarus, Sears,
      Lafayette, IN                                                                         L.S. Ayres, JCPenney
 
 131. Town Center at Boca   Fee                          100.0     Acquired 1998 1,326,957  Lord & Taylor, Saks
      Raton                                                                                 Fifth Avenue (5),
      Boca Raton, FL                                                                        Bloomingdale's,
                                                                                            Burdines, Sears
 
 132. Town Center at Cobb   Fee                           50.0     Acquired 1998 1,271,583  Parisian, Macy's,
      Atlanta, GA                                                                           Sears, JCPenney, Rich's
 
 133. Towne East Square     Fee                          100.0     Built 1975    1,148,628  Dillard's, Hollywood
      Wichita, KS                                                                           Cinema, JCPenney,
                                                                                            Sears, Service
                                                                                            Merchandise
 
 134. Towne West Square     Fee                          100.0     Built 1980      964,774  Dillard's, Sears,
      Wichita, KS                                                                           JCPenney, Montgomery
                                                                                            Ward, Service
                                                                                            Merchandise
 
 135. Treasure Coast Square Fee                          100.0     Built 1987      884,818  Burdines, Dillard's
      Jenson Beach, FL                                                                      (3), Sears, JCPenney,
                                                                                            United Artists Theatre
 
 136. Tyrone Square         Fee                          100.0     Built 1972    1,098,715  Borders (5), Burdines,
      St. Petersburg, FL                                                                    Dillard's, JCPenney,
                                                                                            Sears, AMC Theatre
 
 137. University Mall       Ground Lease (18)            100.0     Built 1967      565,331  JCPenney, M.M. Cohn,
      Little Rock, AR       (2026)                                                          Montgomery Ward
 
 138. University Mall       Fee                          100.0     Acquired 1994   711,279  McRae's, JCPenney,
      Pensacola, FL                                                                         Sears, United Artists
 
 139. University Park Mall  Fee                           60.0     Built 1979      942,289  LS Ayres, JCPenney,
      South Bend, IN                                                                        Sears, Marshall Fields
 
 140. Upper Valley Mall     Fee                          100.0     Built 1971      751,233  Lazarus, JCPenney,
      Springfield, OH                                                                       Sears,
                                                                                            Elder-Beerman, Chakeres
                                                                                            Theatres
 
 141. Valle Vista Mall      Fee                          100.0     Built 1983      655,724  Dillard's, Mervyn's,
      Harlingen, TX                                                                         Sears, JCPenney,
                                                                                            Marshalls, Beall's
 
 142. Valley Mall           Fee                           50.0     Acquired 1998   482,341  JCPenney, Belk,
      Harrisonburg, VA                                                                      Watsons, Wal-Mart
 
 143. Virginia Center       Fee                          100.0     Built 1991      791,099  Dillard's (3), Hecht's,
      Commons                                                                               JCPenney, Sears
      Richmond, VA
 
</TABLE>
 
 
                                       14
<PAGE>
 
<TABLE>
<CAPTION>
                                                         The SPG
                                                        Operating
                                    Ownership         Partnership's
                               Interest (Expiration    Percentage   Year Built or
          Name/Location           if Lease) (1)       Interest (2)    Acquired    Total GLA Anchors/Specialty Anchors
      ---------------------- -----------------------  ------------- ------------- --------- -------------------------
 <C>  <C>                    <C>                      <C>           <C>           <C>       <S>
 144. Walt Whitman Mall      Ground Rent                   98.0     Acquired 1998   920,519  Lord & Taylor, Macy's,
      Huntington Station, NY (2012)                                                          Bloomingdale's,
                                                                                             Saks Fifth Avenue (5)
 
 145. Washington Square      Fee                          100.0     Built 1974    1,010,542  L.S. Ayres, Lazarus,
      Indianapolis, IN                                                                       Target (5), JCPenney,
                                                                                             Sears
 
 146. West Ridge Mall        Fee                          100.0     Built 1988    1,040,372  Dillard's, JCPenney,
      Topeka, KS (19)                                                                        Jones,
                                                                                             Sears, Montgomery Ward
 
 147. West Town Mall         Ground Lease                  50.0     Acquired 1991 1,337,566  Dillard's, JCPenney,
      Knoxville, TN          (2042)                                                          Parisian, Proffitt's,
                                                                                             Regal Cinema, Sears
 
 148. Westchester, The (20)  Fee                           50.0     Acquired 1997   829,053  Neiman Marcus,
      White Plains, NY                                                                       Nordstrom
 
 149. Westminster Mall       Fee                          100.0     Acquired 1998 1,091,488  Robinsons-May Home
      Westminster, CA                                                                        Store, JCPenney,
                                                                                             Robinsons-May,
                                                                                             Sears
 
 150. White Oaks Mall        Fee                           77.0     Built 1977      902,880  Bergner's, Famous Barr,
      Springfield, IL                                                                        Montgomery Ward, Sears
 
 151. Windsor Park Mall      Fee                          100.0     Built 1976    1,095,229  Dillard's (3),
      San Antonio, TX                                                                        JCPenney,
                                                                                             Mervyn's, Beall's,
                                                                                             Montgomery Ward,
                                                                                             Regal Cinema
 
 152. Woodville Mall         Fee                          100.0     Built 1969      792,915  Andersons, Sears,
      Toledo, OH                                                                             Elder-Beerman, (10)
 
---------------------------------------------------------------------------------------------------------------------
 VALUE-ORIENTED REGIONAL MALLS
   1. Arizona Mills (4)      Fee                           26.3     Built 1997    1,191,437  Burlington Coat
      Tempe, AZ                                                                              Factory,
                                                                                             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 (4)    Fee                           37.5     Built 1997    1,240,781  Books-A-Million,
      Grapevine                                                                              Burlington Coat
      (Dallas/Ft. Worth), TX                                                                 Factory,
                                                                                             Off 5th-- Saks Fifth
                                                                                             Avenue
                                                                                             Outlet, JCPenney
                                                                                             Outlet,
                                                                                             Rainforest Cafe, Group
                                                                                             USA,
                                                                                             Bed, Bath & Beyond,
                                                                                             AMC Theatres,
                                                                                             GameWorks,
                                                                                             American Wilderness (5)
 
   3. Ontario Mills (4)      Fee                           25.0     Built 1996    1,345,096  AMC Theatres, JCPenney
      Ontario, CA                                                                            Outlet, 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 Megastore,
                                                                                             GameWorks,
                                                                                             Off 5th-Saks Fifth
                                                                                             Avenue
                                                                                             Outlet
</TABLE>
 
                                       15
<PAGE>
 
<TABLE>
<CAPTION>
                                                              The SPG
                                                             Operating
                                         Ownership         Partnership's
                                    Interest (Expiration    Percentage   Year Built or
             Name/Location             if Lease) (1)       Interest (2)    Acquired    Total GLA Anchors/Specialty Anchors
      --------------------------- -----------------------  ------------- ------------- --------- -------------------------
 <C>  <C>                         <C>                      <C>           <C>           <C>       <S>
 SPECIALTY RETAIL CENTERS
   1. Forum Shops at              Ground Lease (2050)           (21)     Built 1992      479,756  --
      Caesars, The
      Las Vegas, NV
 
   2. Tower Shops, The            Space Lease (2051)            50.0     Built 1996       59,082  --
      Las Vegas, NV
 
   3. Trolley Square              Fee and Ground Lease          90.0     Acquired 1986   224,260  --
      Salt Lake City, UT          (22)
--------------------------------------------------------------------------------------------------------------------------
 OFFICE AND MIXED-USE PROPERTIES
   1. Fashion Centre at           Fee                           21.0     Built 1989      988,786  Sony Theatres, Macy's,
      Pentagon City,                                                                         (23) Nordstrom
      The Arlington, VA
 
   2. Lenox Building,             Fee                          100.0     Acquired 1998   348,152  --
      The Atlanta, GA
 
   3. New Orleans Centre/         Fee and Ground               100.0     Built 1988    1,032,755  Macy's, Lord & Taylor
      CNG Tower                   Lease (2084)                                              (24)
      New Orleans, LA
 
   4. O'Hare International Center Fee                          100.0     Built 1988      511,305  --
      Rosemont, IL                                                                          (25)
 
   5. Riverway                    Fee                          100.0     Acquired 1991   816,770  --
      Rosemont, IL                                                                           (26)
 
--------------------------------------------------------------------------------------------------------------------------
 COMMUNITY SHOPPING CENTERS
   1. Arboretum,                  Fee                           90.0     Acquired 1998   210,400  Barnes & Noble, The
      The Austin, TX                                                                              Arbor Theater, The
                                                                                                  Pottery Barn
 
   2. Arvada Plaza                Fee                          100.0     Built 1966       96,831  King Soopers
      Arvada, CO
 
   3. Aurora Plaza                Ground Lease (2058)          100.0     Built 1965      150,209  King Soopers,
      Aurora, CO                                                                                  MacFrugel's Bargains,
                                                                                                  Super Saver Cinema
 
   4. Bloomingdale Court          Fee                          100.0     Built 1987      598,531  Best Buy, T.J. Maxx N
      Bloomingdale, IL                                                                            More, Cineplex Odeon,
                                                                                                  Frank's
                                                                                                  Nursery, Marshalls,
                                                                                                  Office Max,
                                                                                                  Old Navy, Service
                                                                                                  Merchandise, Wal-Mart,
                                                                                                  Dress Barn
 
   5. Boardman Plaza              Fee                          100.0     Built 1951      650,812  AMES, Burlington Coat
      Youngstown, OH                                                                              Factory, Dunham's
                                                                                                  Sporting Goods,
                                                                                                  Giant Eagle, Michael's,
                                                                                                  Stein
                                                                                                  Mart, T.J. Maxx, Reyers
                                                                                                  Outlet
 
   6. Bridgeview Court            Fee                          100.0     Built 1988      280,299  Dominick's (11)
      Bridgeview, IL
 
   7. Brightwood Plaza            Fee                          100.0     Built 1965       41,893
      Indianapolis, IN
 
   8. Buffalo Grove               Fee                          100.0     Built 1988      134,144  Buffalo Grove Theatres
      Towne Center                                                                                Eagle Country Market
      Buffalo Grove, IL
 
   9. Celina Plaza                Fee and Ground               100.0     Built 1978       32,622  General Cinema
      El Paso, TX                 Lease (27) (2027)
 
  10. Century Mall (28)           Fee                          100.0     Acquired 1982   415,245  Burlington Coat
      Merrillville, IN                                                                            Factory, Montgomery
                                                                                                  Ward
 
  11. Charles Towne Square        Fee                          100.0     Built 1976      205,399  Montgomery Ward,
      Charleston, SC (29)                                                                         Regal Cinema
 
</TABLE>
 
 
                                       16
<PAGE>
 
<TABLE>
<CAPTION>
                                                              The SPG
                                                             Operating
                                         Ownership         Partnership's
                                    Interest (Expiration    Percentage   Year Built or  Total
             Name/Location             if Lease) (1)       Interest (2)    Acquired      GLA   Anchors/Specialty Anchors
      --------------------------- -----------------------  ------------- -------------  -----  -------------------------
 <C>  <C>                         <C>                      <C>           <C>           <C>     <S>
  12. Chesapeake, Center          Fee                          100.0     Built 1989    305,904  Movies 10, Phar Mor, K-
      Chesapeake, VA                                                                            Mart, Service
                                                                                                Merchandise
 
  13. Cobblestone Court           Fee and Ground Lease          35.0     Built 1993    265,603  Dick's Sporting Goods,
      Victor, NY                  (9) (2038)                                                    Kmart, Office Max
 
  14. Cohoes Commons              Fee and Ground Lease         100.0     Built 1984    262,768  Bryant & Stratton
      Rochester, NY               (6) (2032)                                                    Business
                                                                                                Institute, (10), (11)
 
  15. Countryside Plaza           Fee and Ground Lease         100.0     Built 1977    435,532  Best Buy, Builders
      Countryside, IL             (9) (2058)                                                    Square, Old Country
                                                                                                Buffet, K-Mart
 
  16. Crystal Court               Fee                           35.0     Built 1989    284,743  Cub Foods, Wal-Mart,
      Crystal Lake, IL                                                                          Service Merchandise,
                                                                                                (10)
 
  17. Eastgate Consumer Mall      Fee                          100.0     Acquired 1981 464,294  Burlington Coat
      Indianapolis, IN (28)                                                                     Factory, General Cinema
 
  18. Eastland Convenience Center Ground Lease (2075)           50.0     Acquired 1998 173,069  Kid "R" Us, Marshalls,
      Evansville, IN                                                                            Service Merchandise,
                                                                                                Toys "R" Us
 
  19. Eastland Plaza              Fee                          100.0     Built 1986    188,229  Marshalls, Target, Toys
      Tulsa, OK                                                                                 "R" Us
 
  20. Empire East (4)             Fee                           50.0     Acquired 1998 271,351  Carmike Cinemas,
      Sioux Falls, SD                                                                           Kohl's, Target
 
  21. Fairfax Court               Ground Lease (2052)           26.3     Built 1992    249,306  Circuit City
      Fairfax, VA                                                                               Superstore, Montgomery
                                                                                                Ward, Today's Man
 
  22. Forest Plaza                Fee                          100.0     Built 1985    413,889  Bed, Bath & Beyond,
      Rockford, IL                                                                              Kohl's, Marshalls,
                                                                                                Media Play,
                                                                                                Michael's, Factory Card
                                                                                                Outlet,
                                                                                                Office Max, T.J. Maxx
 
  23. Fox River Plaza             Fee                          100.0     Built 1985    324,905  Big Lots, Builders
      Elgin, IL                                                                                 Square, Kmart, Service
                                                                                                Merchandise, (10)
 
  24. Gaitway Plaza               Fee                           23.3     Built 1989    229,920  Books-A-Million,
      Ocala, FL                                                                                 Montgomery Ward, Office
                                                                                                Depot, T.J. Maxx
 
   25 Glen Burnie Mall (28)       Fee                          100.0     Built 1963    456,361  Montgomery Ward
      Glen Burnie, MD
 
  26. Great Lakes Plaza           Fee                          100.0     Built 1976    163,919  Best Buy, Circuit City,
      Cleveland, OH                                                                             Cost Plus, Home Place,
                                                                                                Michael's
 
  27. Great Northeast Plaza       Fee                           50.0     Acquired 1989 298,242  Sears, Phar Mor
      Philadelphia, PA
 
  28. Greenwood Plus              Fee                          100.0     Built 1979    188,480  Best Buy, Cinema I-IV,
      Greenwood, IN                                                                             Kohl's Griffith Park
                                                                                                Plaza
 
  29. Griffith Park Plaza         Ground Lease (2060)          100.0     Built 1979    274,230  Kmart, Service
      Griffith, IN                                                                              Merchandise
 
  30. Grove at Lakeland Square,   Fee                          100.0     Built 1988    215,591  Lakeland Square 10
      The Lakeland, FL                                                                          Theatre,
                                                                                                Wal-Mart, Sports
                                                                                                Authority
 
  31. Hammond Square              Space Lease (2011)           100.0     Built 1974     87,705  Burlington Coat
      Sandy Springs, GA                                                                         Factory, Service
                                                                                                Merchandise
 
  32. Highland Lakes Center       Fee                          100.0     Built 1991    478,017  Bed, Bath & Beyond,
      Orlando, FL                                                                               Goodings, Marshalls,
                                                                                                Ross Dress for Less,
                                                                                                Michael's, Movies 12,
                                                                                                Service Merchandise,
                                                                                                Office Max, Target
 
  33. Indian River Commons        Fee                           50.0     Built 1997    263,507  HomePlace, Lowe's,
      Vero Beach, FL                                                                            Office Max Service
                                                                                                Merchandise
 
  34. Ingram Plaza                Fee                          100.0     Built 1980    111,518  --
      San Antonio, TX
 
</TABLE>
 
 
                                       17
<PAGE>
 
<TABLE>
<CAPTION>
                                                             The SPG
                                                            Operating
                                        Ownership         Partnership's
                                   Interest (Expiration    Percentage   Year Built or  Total
            Name/Location             if Lease) (1)       Interest (2)    Acquired      GLA   Anchors/Specialty Anchors
      -------------------------- -----------------------  ------------- -------------  -----  -------------------------
 <C>  <C>                        <C>                      <C>           <C>           <C>     <S>
  35. Keystone Shoppes           Ground Lease (2067)          100.0     Acquired 1997  29,140  --
      Indianapolis, IN
 
  36. Knoxville Commons          Fee                          100.0     Built 1987    180,463  Circuit City, Office
      Knoxville, TN                                                                            Max, Silk Tree Factory
 
  37. Lake Plaza                 Fee                          100.0     Built 1986    218,208  Mega Mart
      Waukegan, IL
 
  38. Lake View Plaza            Fee                          100.0     Built 1986    388,355  Best Buy (30),
      Orland Park, IL                                                                          Dominick's, Ultra 3
                                                                                               (30), Factory Card
                                                                                               Outlet, Linens-N-Things
                                                                                               (30), Marshalls, Pet
                                                                                               Care Plus (30), Service
                                                                                               Merchandise, (10)
 
  39. Lakeline Plaza             Fee (12)                      85.0     Built 1998    262,050  Best Buy, Cost Plus,
      Austin, TX                                                                               Linens N Things, Office
                                                                                               Max, Old Navy,
                                                                                               Petsmart, Ross Dress
                                                                                               for Less, T.J. Maxx,
                                                                                               Party City, Toys "R"
                                                                                               Us, Ulta 3, (10)
 
  40. Lima Center                Fee                          100.0     Built 1978    201,154  AMES, Regal Cinema,
      Lima, OH                                                                                 Service Merchandise
 
  41. Lincoln Crossing           Fee                          100.0     Built 1990    161,337  PetsMart, Wal-Mart
      O'Fallon, IL
 
  42. Mainland Crossing          Fee (7)                       80.0     Built 1991    390,987  Sam's Club, Wal-Mart,
      Galveston, TX                                                                            Hobby Lobby
 
  43. Maplewood Square           Fee                          100.0     Built 1970    130,780  Bag N Save, Big Lots
      Omaha, NE
 
  44. Markland Plaza             Fee                          100.0     Built 1974    108,296  Service Merchandise
      Kokomo, IN
 
  45. Martinsville Plaza         Space Lease (2036)           100.0     Built 1967    102,162  Rose's
      Martinsville, VA
 
  46. Marwood Plaza              Fee                          100.0     Built 1962    105,785  Kroger
      Indianapolis, IN
 
  47. Matteson Plaza             Fee                          100.0     Built 1988    275,455  Dominick's, Michael's
      Matteson, IL                                                                             Arts & Crafts, Service
                                                                                               Merchandise, Value City
 
  48. Memorial Plaza             Fee                          100.0     Built 1966    129,202  Marcus Theatre, Office
      Sheboygan, WI                                                                            Max, (10)
 
  49. Mounds Mall Cinema         Fee                          100.0     Built 1974      7,500  Kerasotes Theater
      Anderson, IN
 
  50. Muncie Plaza               Fee                          100.0     Built 1998    172,651  Factory Card Outlet,
      Muncie, IN                                                                               Kohl's, OfficeMax, Shoe
                                                                                               Carnival, T.J. Maxx
 
  51. New Castle Plaza           Fee                          100.0     Built 1966     91,648  Goody's
      New Castle, IN
 
  52. North Ridge Plaza          Fee                          100.0     Built 1985    323,672  Best Buy, Cub Foods,
      Joliet, IL                                                                               Hobby Lobby, Office
                                                                                               Max, Service
                                                                                               Merchandise North
                                                                                               Riverside Park Plaza
 
  53. North Riverside Park Plaza Fee                          100.0     Built 1977    119,608  Dominick's
      North Riverside, IL
 
  54. Northland Plaza            Fee and Ground Lease         100.0     Built 1988    209,495  Marshalls, Phar-Mor,
      Columbus, OH               (6) (2085)                                                    Service Merchandise
 
  55. Northwood Plaza            Fee                          100.0     Built 1974    211,840  Cinema Grill, Target
      Fort Wayne, IN
 
</TABLE>
 
 
                                       18
<PAGE>
 
<TABLE>
<CAPTION>
                                                              The SPG
                                                             Operating
                                         Ownership         Partnership's
                                    Interest (Expiration    Percentage   Year Built or  Total
             Name/Location             if Lease) (1)       Interest (2)    Acquired      GLA   Anchors/Specialty Anchors
      --------------------------- -----------------------  ------------- -------------  -----  -------------------------
 <C>  <C>                         <C>                      <C>           <C>           <C>     <S>
  56. Park Plaza                  Fee and Ground Lease         100.0     Built 1968    114,458  Big Lots
      Hopkinsville, KY            (6) (2039)
 
  57. Plaza at Buckland Hills,    Fee                           35.0     Built 1993    337,970  Toys "R" Us, Jo-Ann
      The Manchester, CT                                                                        Etc., Kids "R" Us,
                                                                                                Service Merchandise,
                                                                                                Comp USA, Linens-N-
                                                                                                Thing's, Party City
                                                                                                Filene's Basement
 
  58. Regency Plaza               Fee                          100.0     Built 1988    287,526  Sam's Wholesale, Wal-
      St. Charles, MO                                                                           Mart
 
  59. Ridgewood Court             Fee                           35.0     Built 1993    240,844  Home Quarters, T.J.
      Jackson, MS                                                                               Maxx,
                                                                                                Service Merchandise,
                                                                                                (10)
 
  60. Rockaway Convenience Center Fee                          100.0     Acquired 1998 135,283  ACME Food, American
      Rockaway, NJ                                                                              Multi Cinema, Discovery
                                                                                                Zone,
                                                                                                Kids "R" Us
 
  61. Royal Eagle Plaza           Fee                           35.0     Built 1989    199,118  Kmart, Stein Mart
      Coral Springs, FL
 
  62. St. Charles Towne Plaza     Fee                          100.0     Built 1987    434,964  Ames, Hechinger, Jo Ann
      Waldorf, MD                                                                               Fabrics, CVS, T.J.
                                                                                                Maxx,
                                                                                                Service Merchandise,
                                                                                                Shoppers Food Warehouse
 
  63. Teal Plaza                  Fee and Ground Lease         100.0     Built 1962    101,087  Circuit City (5),
      Lafayette, IN               (2007) (6)                                                    Hobby-Lobby,
                                                                                                The Pep Boys
 
  64. Terrace at The Florida Mall Fee                          100.0     Built 1989    332,980  Marshalls, Service
      Orlando, FL                                                                               Merchandise, Target,
                                                                                                Uptons, Waccamaw
 
  65. Tippecanoe Plaza            Fee                          100.0     Built 1974     94,739  Barnes & Noble
      Lafayette, IN                                                                             Bookseller,
                                                                                                Service Merchandise
 
  66. University Center           Fee                           60.0     Built 1980    150,548  Best Buy, Michaels,
      South Bend, IN                                                                            Service Merchandise
 
  67. Village Park Plaza          Fee                           35.0     Built 1990    503,113  Frank's Nursery,
      Westfield, IN                                                                             Galyan's,
                                                                                                Kohl's, Marsh, Regal
                                                                                                Cinemas,
                                                                                                Wal-Mart
 
  68. Wabash Village              Ground Lease (2063)          100.0     Built 1970    124,748  Kmart
      West Lafayette, IN
 
  69. Washington Plaza            Fee                          100.0     Built 1976     50,107  Kids "R" Us
      Indianapolis, IN
 
  70. West Ridge Plaza            Fee                          100.0     Built 1988    237,653  Magic Forest, Target,
      Topeka, KS                                                                                TJ Maxx, Toys "R" Us
 
  71. West Town Corners           Fee                           23.3     Built 1989    384,988  PetsMart, Wal-Mart,
      Altamonte Springs, FL                                                                     Service Merchandise,
                                                                                                Sports Authority, Winn
                                                                                                Dixie, (10)
 
  72. Westland Park Plaza         Fee                           23.3     Built 1989    163,154  Burlington Coat
      Orange Park, FL                                                                           Factory,
                                                                                                PetsMart, Sports
                                                                                                Authority,
                                                                                                Sound Advice
 
  73. White Oaks Plaza            Fee                          100.0     Built 1986    400,303  Cub Foods, Kids "R" Us,
      Springfield, IL                                                                           Kohl's, Office Max,
                                                                                                T.J. Maxx,
                                                                                                Toys "R" Us
 
  74. Wichita Mall (28)           Ground Lease (2022)          100.0     Built 1969    379,461  Cinema III (11),
      Wichita, KS                                                                               Dickinson
                                                                                                Cinema, Office Max,
                                                                                                Montgomery Ward
 
  75. Willow Knolls Court         Fee                           35.0     Built 1990    383,377  Kohl's, Phar-Mor,
      Peoria, IL                                                                                Sam's Wholesale Club,
                                                                                                Willow Knolls Theaters
                                                                                                14
 
  76. Wood Plaza                  Ground Lease (2045)          100.0     Built 1968     94,993  Country General
      Fort Dodge, IA
 
</TABLE>
 
 
                                       19
<PAGE>
 
<TABLE>
<CAPTION>
                                                              The SPG
                                                             Operating
                                         Ownership         Partnership's Year Built
                                    Interest (Expiration    Percentage       or
             Name/Location             if Lease) (1)       Interest (2)   Acquired  Total GLA Anchors/Specialty Anchors
      --------------------------- -----------------------  ------------- ---------- --------- -------------------------
 <C>  <C>                         <C>                      <C>           <C>        <C>       <S>
  77. Yards Plaza, The            Fee                           35.0     Built 1990   273,097  Burlington Coat
      Chicago, IL                                                                              Factory, Montgomery
                                                                                               Ward
-----------------------------------------------------------------------------------------------------------------------
 PROPERTIES UNDER CONSTRUCTION
   1. Concord Mills               Fee                           37.5     (31)       1,421,018  Alabama Grill, AMC,
      Concord, NC                                                                              Bass Pro, Bed, Bath &
                                                                                               Beyond, Books-A-
                                                                                               Million, Burlington
                                                                                               Coat Factory, Group
                                                                                               USA, Jillian's, T.J.
                                                                                               Maxx, Embassy Suites
                                                                                               Hotel
 
   2. Mall of Georgia             Fee                           50.0     (32)       1,346,314  Barnes & Noble, Bed,
      Gwinnett County, GA                                                                      Bath & Beyond,
                                                                                               Dillard's, Galyan's,
                                                                                               Haverty's, JCPenney,
                                                                                               Lord & Taylor,
                                                                                               Nordstrom
 
   3. Mall of Georgia Crossing    Fee                           50.0     (33)         444,000  Best Buy, Nordstrom
      Gwinnett County, GA                                                                      Rack, Staples, Target,
                                                                                               T.J. Maxx N More,
                                                                                               Upton's
 
   4. Shops at Northeast Plaza,   Fee                          100.0     (34)         323,000  Bed, Bath, & Beyond,
      The Hurst, TX                                                                            Office Max, Michael's,
                                                                                               Nordstrom Rack, Pets
                                                                                               Mart, T.J. Maxx, Pary
                                                                                               City
 
   5. Shops at Sunset Place,      Fee                           37.5     (35)         500,000  NIKETOWN, AMC Theatres
      The Miami, FL                                                                            Virgin Megastore, Z
                                                                                               Gallerie, IMAX Theatre,
                                                                                               Barnes & Noble, Game
                                                                                               Works, FAO Schwarz
 
   6. Waterford Lakes Town Center Fee                          100.0     (36)         920,000  Barnes & Noble, Bed,
      Orlando, FL                                                                              Bath & Beyond, Office
                                                                                               Max, Party City, Regal
                                                                                               20-Plex, Ross Dress for
                                                                                               Less, Super Target,
                                                                                               T.J. Maxx, Waves Music
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
 (1) The date listed is the expiration date of the last renewal option
     available to the SPG 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 SPG 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 retailer operates two stores at this Property.
 (4) This Property is managed by a third party.
 (5) Indicates anchor is currently under construction.
 (6) Indicates ground lease covers less than 15% of the acreage of this
     Property.
 (7) The SPG Operating Partnership receives substantially all of the economic
     benefit of these Properties.
 (8) Effective March 1, 1999, the SPG Operating Partnership acquired the
     remaining 50% interest in Century III Mall.
 (9) Indicates ground lease(s) cover(s) less than 50% of the acreage of the
     Property.
(10) Includes an anchor space currently vacant.
(11) Indicates anchor has closed, but the SPG Operating Partnership still
     collects rents and/or fees under an agreement
(12) Effective January 29, 1999, the SPG Operating Partnership acquired the
     remaining 15% interest in Lakeline Mall and Lakeline Plaza.
(13) Indicates ground lease covers all of the Property except for parcels
     owned in fee by anchors.
(14) Primarily retail space with approximately 59,174 square feet of office
     space.
(15) Primarily retail space with approximately 69,876 square feet of office
     space.
(16) Primarily retail space with approximately 119,964 square feet of office
     space.
 
                                      20
<PAGE>
 
(17) Primarily retail space with approximately 77,371 square feet of office
     space.
(18) Indicates one ground lease covers substantially all of the Property and a
     second ground lease covers the remainder.
(19) Includes outlots in which the SPG Operating Partnership has an 85%
     interest and which represent less than 3% of the GLA and total annualized
     base rent for the Property.
(20) The SPG Operating Partnership purchased the management contract on this
     Property during 1998.
(21) The SPG Operating Partnership owns 60% of the original phase of this
     Property and 55% of phase II, which opened in August 1997.
(22) Indicates a ground lease covers a pedestrian walkway and steps at this
     Property. The SPG Operating Partnership, as ground lessee, has the right
     to successive five-year renewal options, subject to specified exceptions.
(23) Primarily retail space with approximately 167,150 square feet of office
     space.
(24) Primarily retail space with 491,489 square feet of office space.
(25) Primarily office space with approximately 12,800 square feet of retail
     space.
(26) Primarily office space with approximately 24,300 square feet of retail
     space.
(27) Indicates ground lease covers outparcel.
(28) 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.
(29) The SPG 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.
(30) Subleased from TJX Companies.
(31) Scheduled to open during September 1999.
(32) Scheduled to open during August 1999.
(33) Scheduled to open during October 1999.
(34) Scheduled to open during November 1999.
(35) This Property opened in January 1999.
(36) Scheduled to open during November 1999.
 
 Land Held for Development
 
   The SPG Operating Partnership has direct or indirect ownership interests in
eleven parcels of land being held for future development, containing an
aggregate of approximately 904 acres located in nine 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
SPG Operating Partnership's significant base of commercially zoned land,
together with the SPG 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.
 
                                      21
<PAGE>
 
   The following table describes the acreage of the parcels of land being held
for future development in which the SPG Operating Partnership has an ownership
interest, as well as the ownership percentage of the SPG Operating
Partnership's direct or indirect interest in each parcel:
 
<TABLE>
<CAPTION>
                                                                     Ownership
        Location                                            Acreage Interest (1)
        --------                                            ------- ------------
      <S>                                                   <C>     <C>
      Bowie, MD............................................   93.7      100%
      Duluth, MN...........................................   11.2      100%
      Little Rock, AR......................................   97.0       50%
      Mt. Juliet, TN.......................................  109.3      100%
      Crystal River, FL....................................  204.5      100%
      Sanford, FL..........................................   77.2     22.5%
      Miami, FL............................................   41.7       60%
      Houston, TX..........................................  156.2       50%
      Rockaway, NJ.........................................   40.4      100%
      Garden City, NY......................................   44.6      100%
      Braintree, MA........................................   28.5      100%
                                                             -----
        Total..............................................  904.3
                                                             =====
</TABLE>
--------
(1) The SPG Operating Partnership has a direct ownership interest in each
    parcel except Duluth, MN and Mt. Juliet, TN. The SPG Operating Partnership
    has the option to acquire those parcels from the Management Company.
 
   The Management Company has granted options to the SPG 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 without providing certain notice and first purchase rights
to the SPG 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 SPG 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.
 
 Joint Ventures
 
   At certain of the Properties held as joint-ventures, the SPG 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.
 
                                      22
<PAGE>
 
 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 $706.0 million.
 
                MORTGAGE AND OTHER DEBT ON PORTFOLIO PROPERTIES
                             (Dollars in thousands)
 
<TABLE>
<CAPTION>
                                     Interest   Face Amount    Annual     Maturity
           Property Name               Rate     at 12/31/98 Debt Service    Date
           -------------             --------   ----------- ------------  --------
<S>                                  <C>        <C>         <C>           <C>
Consolidated Indebtedness:
 
Secured Indebtedness
 
Anderson Mall--1(1).................  6.57%      $ 19,000     $ 1,248(2)   9/15/02
Anderson Mall--2(1).................  7.01%         8,500         596(2)   9/15/02
Arboretum...........................  6.56%        34,000       2,232(2)   12/1/03
Barton Creek Square.................  8.10%        62,064       5,867     12/30/99
Battlefield Mall--1.................  7.50%        48,665       4,765       1/1/04
Battlefield Mall--2.................  6.81%        45,000       3,230       1/1/04
Biltmore Square.....................  7.15%        26,681       2,795       1/1/01
Bloomingdale Court(3)...............  8.75%        27,359       2,394(2)   12/1/00
Chesapeake Center...................  8.44%         6,563         554(2)   5/15/15
Chesapeake Square...................  7.28%        48,164       4,883       1/1/01
Cielo Vista Mall--1(4)..............  9.38%        55,185       5,639       5/1/07
Cielo Vista Mall--2.................  8.13%         1,940         189      11/1/05
Cielo Vista Mall--3(4)..............  6.76%        39,000       3,039       5/1/07
CMBS Loan--Fixed Component(5).......  7.27%       175,000      12,720(2)  12/15/07
CMBS Loan--Variable Component(5)....  6.16%        50,000       3,078(2)  12/15/07
College Mall--1(6)..................  7.00%        42,360       3,736       1/1/09
College Mall--2(6)..................  6.76%        12,000         857       1/1/09
Columbia Center.....................  7.62%        42,326       3,789      3/15/02
Crystal River.......................  7.06%(7)     16,000       1,130(2)    1/1/01
Eastgate Consumer Mall..............  6.00%(8)     22,929       1,376(2)   3/31/00
Eastland Mall(9)....................  6.81%        15,000       1,022(2)   9/15/02
Florida Mall, The...................  6.65%        90,000       5,985(2)   2/28/00
Forest Mall--1(9)...................  6.57%        12,800         841(2)   9/15/02
Forest Mall--2(9)...................  6.81%         2,750         187(2)   9/15/02
Forest Plaza(3).....................  8.75%        16,904       1,479(2)   12/1/00
Forest Village Park Mall--1(1)......  6.57%        20,600       1,353(2)   9/15/02
Forest Village Park Mall--2(1)......  7.01%         1,250          88(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............  6.19%        44,385       2,747(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...........  6.19%        40,614       2,514(2)   5/15/04
Fox River Plaza(3)..................  8.75%        12,654       1,107(2)   12/1/00
Golden Ring Mall(9).................  6.57%        29,750       1,955(2)   9/15/02
Great Lakes Mall--1.................  6.74%        52,632       4,354       3/1/01
Great Lakes Mall--2.................  7.07%         8,489         724       3/1/99
Greenwood Park Mall--1(6)...........  7.00%        35,478       3,105       1/1/09
Greenwood Park Mall--2(6)...........  6.76%        62,000       4,428       1/1/09
Grove at Lakeland Square, The.......  8.44%         3,750         317(2)   5/15/15
</TABLE>
 
                                       23
<PAGE>
 
<TABLE>
<CAPTION>
                                  Interest    Face Amount    Annual    Maturity
          Property Name             Rate      at 12/31/98 Debt Service   Date
          -------------           --------    ----------- ------------ --------
<S>                               <C>         <C>         <C>          <C>
Gulf View Square.................   8.25%       37,633       3,652      10/1/06
Highland Lakes Center............   6.56%(10)   14,377         944(2)    3/1/02
Hutchinson Mall--1(9)............   8.44%       11,523       1,108      9/15/02
Hutchinson Mall--2(9)............   6.81%        4,500         306(2)   9/15/02
Ingram Park Mall--1..............   8.10%       47,955       4,533     12/30/99
Ingram Park Mall--2..............   9.63%        7,000         674(2)  12/30/99
J.C. Penney/Net Leased
 (Chattanooga)...................   6.80%          847         274      5/31/02
Jefferson Valley Mall............   5.61%(11)   50,000       2,807(2)   1/12/00
Keystone at the Crossing.........   7.85%       64,194       5,085       7/1/27
La Plaza Mall....................   8.25%       49,475       4,677     12/30/99
Lake View Plaza(3)...............   8.75%       22,169       1,940(2)   12/1/00
Lima Mall--1.....................   7.12%       14,180       1,215       3/1/02
Lima Mall--2.....................   7.12%        4,723         405       3/1/02
Lincoln Crossing(3)..............   8.75%          997          87(2)   12/1/00
Longview Mall--1(1)..............   6.57%       22,100       1,452(2)   9/15/02
Longview Mall--2(1)..............   7.01%        5,500         386(2)   9/15/02
Mainland Crossing................   6.56%(10)    2,226         146(2)   3/31/02
Markland Mall(9).................   6.57%       10,000         657(2)   9/15/02
Matteson Plaza(3)................   8.75%       11,159         976(2)   12/1/00
McCain Mall--1(4)................   9.38%       25,768       2,721       5/1/07
McCain Mall--2(4)................   6.76%       18,000       1,402       5/1/07
Melbourne Square.................   7.42%       39,404       3,374       2/1/05
Miami International Mall.........   6.91%       46,483       3,758     12/21/03
Midland Park Mall--1(9)..........   6.57%       22,500       1,478(2)   9/15/02
Midland Park Mall--2(9)..........   6.81%        5,500         375(2)   9/15/02
The Shops at Mission Viejo.......   6.11%       37,559       2,296(2)   9/14/03
North East Mall..................  10.00%       21,934       2,475       9/1/00
North Riverside Park Plaza--1....   9.38%        3,918         452       9/1/02
North Riverside Park Plaza--2....  10.00%        3,617         420       9/1/02
North Towne Square(9)............   6.57%       23,500       1,544(2)   9/15/02
Northgate Shopping Center........   7.62%       79,035       7,075      3/15/02
Northlake Mall...................   8.00%        1,053         263      12/1/02
Orland Square....................   7.74%       50,000       3,871(2)    9/1/01
Paddock Mall.....................   8.25%       29,930       2,905      10/1/06
Palm Beach Mall..................   7.50%       50,471       4,803     12/15/02
Port Charlotte Town Center--1....   7.28%       45,583       3,857       1/1/01
Port Charlotte Town Center--2....   7.28%        7,148         591       1/1/01
Randall Park Mall--2.............   7.33%       35,000       2,566(2)   6/18/08
Regency Plaza(3).................   8.75%        1,878         164(2)   12/1/00
Richmond Towne Square............   6.06%       14,526          88(2)   7/15/03
River Oaks Center................   8.67%       32,500       2,818(2)    6/1/02
South Park Mall--1(1)............   7.25%       19,799       1,717      9/15/02
South Park Mall--2(1)............   7.01%        6,949         487(2)   9/15/02
South Shore......................   9.75%           82          66       4/1/00
St. Charles Towne Plaza(3).......   8.75%       30,742       2,690(2)   12/1/00
Sunland Park Mall(12)............   8.63%       39,506       3,773       1/1/26
Tacoma Mall......................   7.62%       92,474       8,278      3/15/02
Terrace at Florida Mall, The.....   8.44%        4,688         396(2)   5/15/15
Tippecanoe Mall--1(6)............   8.45%       46,255       4,647       1/1/05
Tippecanoe Mall--2(6)............   6.81%       16,000       1,149       1/1/05
</TABLE>
 
                                       24
<PAGE>
 
<TABLE>
<CAPTION>
                               Interest    Face Amount        Annual     Maturity
       Property Name             Rate      at 12/31/98     Debt Service    Date
       -------------           --------    -----------     ------------  --------
<S>                            <C>         <C>             <C>           <C>
Towne East Square--1(6).....    7.00%          56,006          4,901       1/1/09
Towne East Square--2(6).....    6.81%          25,000          1,795       1/1/09
Treasure Coast Square.......    7.42%          53,218          4,714       1/1/06
Trolley Square--1...........    5.81%          19,000          1,104(2)   7/23/00(13)
Trolley Square--2...........    6.56%(10)       4,641            305(2)   7/23/00(13)
Trolley Square--3...........    6.56%(10)       3,500            230(2)   7/23/00(13)
University Park Mall........    7.43%          59,500          4,421(2)   10/1/07
Valle Vista Mall--1(4)......    9.38%          34,130          3,604       5/1/07
Valle Vista Mall--2(4)......    6.81%           8,000            626       5/1/07
West Ridge Plaza(3).........    8.75%           4,612            404(2)   12/1/00
White Oaks Mall.............    6.51%          16,500          1,074(2)    3/1/99
White Oaks Plaza(3).........    8.75%          12,345          1,080(2)   12/1/00
Windsor Park Mall--1........    8.00%           5,771            544       6/1/00
Windsor Park Mall--2........    8.00%           8,865            811       5/1/12
                                           ----------
    Total Secured
     Indebtedness...........               $2,865,241
                                           ----------
 
Unsecured Indebtedness
 
Simon Property Group, L.P. :
  Medium Term Notes--1......    7.13%         100,000          7,125(14)  6/24/05
  Medium Term Notes--2......    7.13%         180,000         12,825(14)  9/20/07
  Putable Asset Trust
   Securities...............    6.75%         100,000          6,750(14) 11/15/03
  Unsecured Term Loan.......    5.71%(15)      70,000           4,00(2)   1/31/00
  Unsecured Term Loan.......    6.14%          63,000           3,86(2)   1/31/00
  Unsecured Notes--1........    6.88%         250,000         17,188(14) 11/15/06
  Unsecured Notes--2A.......    6.75%         100,000          6,750(14)  7/15/04
  Unsecured Notes--2B.......    7.00%         150,000         10,500(14)  7/15/09
  Unsecured Notes--3........    6.88%         150,000         10,313(14) 10/27/05
  Unsecured Notes--4A.......    6.63%         375,000         24,844(14)  6/15/03
  Unsecured Notes--4B.......    6.75%         300,000         20,250(14)  6/15/05
  Unsecured Notes--4C.......    7.38%         200,000         14,750(14)  6/15/18
  Mandatory Par Put
   Remarketed Securities....    7.00%         200,000         14,000(14)  6/15/08
  CPI Merger Facility--1 (16).  5.71%         450,000         25,713(2)   6/24/99
  CPI Merger Facility--2 (16).  5.71%         450,000         25,713(2)   3/24/00
  CPI Merger Facility--3 (16).  5.71%         500,000         28,570(2)   9/24/00
  Unsecured Revolving Credit
   Facility (17)............    5.71%         368,000         21,028(2)   9/27/99
                                           ----------
                                            4,006,000
Shopping Center Associates:
  Unsecured Notes--SCA 1....    6.75%         150,000         10,125(14)  1/15/04
  Unsecured Notes--SCA 2....    7.63%         110,000          8,388(14)  5/15/05
                                           ----------
                                              260,000
The Retail Property Trust:
  Unsecured Notes--CPI 1....    9.00%         250,000         22,500(14)  3/15/02
  Unsecured Notes--CPI 2....    7.05%         100,000          7,050(14)   4/1/03
  Unsecured Notes--CPI 3....    7.75%         150,000         11,625(14)  8/15/04
  Unsecured Notes--CPI 4....    7.18%          75,000          5,385(14)   9/1/13
  Unsecured Notes--CPI 5....    7.88%         250,000         19,688(14)  3/15/16
                                           ----------
                                              825,000
                                           ----------
    Total Unsecured
     Indebtedness...........               $5,091,000
                                           ----------
    Total Indebtedness at
     Face Amounts...........               $7,956,241
    Net Premium on
     Indebtedness...........               $   16,140
                                           ----------
    Total Consolidated
     Indebtedness...........               $7,972,381(18)
                                           ==========
</TABLE>
 
 
                                       25
<PAGE>
 
<TABLE>
<CAPTION>
                                Interest    Face Amount        Annual     Maturity
        Property Name             Rate      at 12/31/98     Debt Service    Date
        -------------           --------    -----------     ------------  --------
<S>                             <C>         <C>             <C>           <C>
Joint Venture Indebtedness
 (19):
 
Arizona Mills.................   6.36%(20)     140,984          8,972(2)    2/1/02
Aventura Mall--1..............   6.55%         141,000          9,231(2)    4/6/08
Aventura Mall--2..............   6.60%          25,400          1,675(2)    4/6/08
Aventura Mall--3..............   6.89%          33,600          2,314(2)    4/6/08
Avenues, The..................   8.36%          57,710          4,825(2)   5/15/03
Century III Mall..............   6.78%          66,000          4,475(2)    7/1/03
Circle Centre Mall............   5.50%(21)      60,000          3,302(2)   1/31/04
Cobblestone Court.............   7.22%(22)       6,180            446(2)  11/30/05
Concord Mills.................   6.41%          24,250          1,555(2)   12/2/03
Coral Square..................   7.40%          53,300          3,944(2)   12/1/00
Crystal Court.................   7.22%(22)       3,570            258(2)  11/30/05
Crystal Mall..................   8.66%          50,305          4,356(2)    2/1/03
Dadeland Mall.................   5.76%(23)     140,000          8,070(2)  12/10/00
Fairfax Court.................   7.22%(22)      10,320            745(2)  11/30/05
Gaitway Plaza.................   7.22%(22)       7,350            531(2)  11/30/05
Grapevine Mills...............   6.47%         155,000         10,029(2)   10/1/08
Great Northeast Plaza.........   9.04%          17,671          2,110       6/1/06
Gwinnett Place................   7.54%          39,866          3,412       4/1/07
Highland Mall--1..............   9.75%           7,651            746(2)   12/1/09
Highland Mall--2..............   8.50%             306             26(2)   10/1/01
Highland Mall--3..............   9.50%           2,896            275(2)   11/1/01
IBM CMBS Loan--Fixed Component
 (24).........................   7.40%         300,000         22,197(2)    5/1/06
IBM CMBS Loan--Floating
 Component(24)                   5.56%         185,000         10,290(2)    5/1/03
Indian River Commons..........   7.58%           8,399            637(25)  11/1/04
Indian River Mall.............   7.58%          46,602          3,532(25)  11/1/04
Lakeland Square...............   7.26%          52,421          4,368     12/22/03
Lakeline Mall.................   7.65%          72,927          6,300       5/1/07
Lakeline Plaza--1.............   5.44%(26)      30,500          1,659(2)    6/6/02
Mall of Georgia...............   7.09%         135,000          9,572(2)    7/1/10
Metrocenter...................   8.45%          31,181          2,635(2)   2/28/08
Northfield Square.............   9.52%          24,055          2,575       4/1/00
Ontario Mills--4..............   0.00%(27)       4,717              0(27) 12/28/09
Ontario Mills--5..............   6.75%         144,902          9,781(2)   11/2/08
Plaza at Buckland Hills, The..   7.22%(22)      17,680          1,276(2)  11/30/05
Ridgewood Court...............   7.22%(22)       7,980            576(2)  11/30/05
Royal Eagle Plaza.............   7.22%(22)       7,920            572(2)  11/30/05
Seminole Towne Center.........   6.88%          70,500          4,850(2)    1/1/06
Shops at Sunset Place, The....   6.31%(28)      87,180          5,505(2)   6/30/02
Smith Haven Mall..............   7.86%         115,000          9,039(2)    6/1/06
Source, The...................   6.65%         124,000          8,246(2)   11/6/08
Tower Shops, The..............   6.26%          13,500            846(2)   3/13/99
Town Center at Cobb...........   7.54%          50,794          4,347       4/1/07
Village Park Plaza............   7.22%(22)       8,960            647(2)  11/30/05
West Town Corners.............   7.22%(22)      10,330            746(2)  11/30/05
West Town Mall................   6.90%          76,000          5,244(2)    5/1/08
Westchester, The..............   8.74%         152,104         14,478       9/1/05
Westland Park Plaza...........   7.22%(22)       4,950            357(2)  11/30/05
Willow Knolls Court...........   7.22%(22)       6,490            469(2)  11/30/05
Yards Plaza, The..............   7.22%(22)       8,270            597(2)  11/30/05
                                            ----------
    Total Joint Venture
     Indebtedness at Face
     Amounts..................              $2,840,721
    Premium on Indebtedness...                  20,868
                                            ----------
    Total Joint Venture
     Indebtedness.............              $2,861,589(29)
                                            ==========
</TABLE>
 
                                       26
<PAGE>
 
 (1) Loans secured by these four Properties are cross-collateralized and
     cross-defaulted.
 (2) Requires monthly payments of interest only.
 (3) These ten Properties are cross-defaulted.
 (4) These three Properties are cross-collateralized.
 (5) 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).
 (6) Loans secured by these four Properties are cross-collateralized and
     cross-defaulted.
 (7) LIBOR + 2.000%.
 (8) LIBOR + 1.000%, with LIBOR Capped at 5.000%.
 (9) Loans secured by these seven Properties are cross-collateralized and
     cross-defaulted.
(10) LIBOR + 1.500%.
(11) LIBOR + 0.550%, with LIBOR Capped at 8.700% through maturity.
(12) Lender also participates in a percentage of gross revenues above a
     specified base.
(13) July 23, 2000 is the earliest date on which the lender may call the
     bonds.
(14) Requires semi-annual payments of interest only.
(15) LIBOR + 0.650%.
(16) The Merger Facility bears interest at LIBOR + 0.65%. Interest rate swaps
     currently exist on $500,000 of this facility, which fix the LIBOR
     component at a weighted average rate of 5.06%. On February 4, 1999 the
     SPG Operating Partnership completed the sale of $600,000 of senior
     unsecured notes. The net proceeds of which were used primarily to paydown
     the first maturity of the Merger Facility and the Credit Facility. (See
     Note 10 to the accompanying financial statements of the SPG Operating
     Partnership.)
(17) $1,250,000 unsecured revolving credit facility. Currently, bears interest
     at LIBOR + 0.65% and provides for different pricing based upon the SPG
     Operating Partnership's investment grade rating. Two interest rate Caps
     currently limit LIBOR on $90,000 and $50,000 of this indebtedness to
     11.53% and 16.77%, respectively. As of 12/31/98, $880,800 was available
     after outstanding borrowings and letters of credit. The SPG Operating
     Partnership has the option to extend this facility for an additional
     year.
(18) Includes minority interest partners' share of consolidated indebtedness
     of ($129,809).
(19) As defined in the accompanying consolidated financial statements, Joint
     Venture Properties are those accounted for using the equity method of
     accounting.
(20) LIBOR + 1.300%, with LIBOR Capped at 9.500%.
(21) LIBOR + 0.440%, with LIBOR Capped at 8.81% through maturity.
(22) The interest rate on this cross-collateralized mortgage is fixed at 7.22%
     through November 1999 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.
(23) LIBOR + 0.700%.
(24) This $485 million Commercial Mortgages Notes is secured by cross-
     collateralized mortgages encumbering thirteen Properties (Eastland Mall,
     Empire East, Empire Mall, Granite Run Mall, Mesa Mall, Lake Square,
     Lindale Mall, Northpark Mall, Southern Hills Mall, Southpark Mall,
     Southridge Mall, Rushmore Mall, and Valley Mall). A weighted average rate
     is used for each component. The floating component has an interest rate
     protection agreement which Caps LIBOR at 11.67%.
(25) Loans require monthly interest payments only until they begin amortizing
     November, 2000.
(26) LIBOR + 0.375%.
(27) Beginning January 2000, this note will bear Interest at 6.00%.
(28) LIBOR + 1.250%.
(29) Includes outside partners' share of indebtedness of ($1,634,545).
 
 
                                      27
<PAGE>
 
Item 3. Legal Proceedings
 
   Richard E. Jacobs, et al. v. Simon DeBartolo Group, L.P. On September 3,
1998, a complaint was filed in the Court of Common Pleas in Cuyahoga County,
Ohio, captioned Richard E. Jacobs, et al. v. Simon DeBartolo Group, L.P. The
plaintiffs are all principals or affiliates of The Richard E. Jacobs Group,
Inc. The plaintiffs allege in their complaint that the SPG Operating
Partnership engaged in malicious prosecution, abuse of process, defamation,
libel, injurious falsehood/unlawful disparagement, deceptive trade practices
under Ohio law, tortious interference and unfair competition in connection
with the SPG Operating Partnership's acquisition by tender offer of shares in
RPT, a Massachusetts business trust, and certain litigation instituted in
September, 1997, by the SPG Operating Partnership against Jacobs in federal
district court in New York, wherein the SPG Operating Partnership alleged that
Jacobs and other parties had engaged, or were engaging in activity which
violated Section 10(b) of the Securities Exchange Act of 1934, as well as
certain rules promulgated thereunder. Plaintiffs in the Ohio action are
seeking compensatory damages in excess of $200 million, punitive damages and
reimbursement for fees and expenses. It is difficult to predict the ultimate
outcome of this action and there can be no assurance that the SPG Operating
Partnership will receive a favorable verdict. Based upon the information known
at this time, in the opinion of management, it is not expected that this
action will have a material adverse effect on the SPG Operating Partnership.
 
   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 SPG
Properties, 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
SPG 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 defendants each filed
motions for summary judgment. On October 31, 1997, the Court entered a
judgment in favor of the defendants granting their motion for summary
judgment. The plaintiffs have appealed this judgment and the matter is
pending. While it is difficult to predict the ultimate outcome of this action,
based on the information known to SPG to date, it is not expected that this
action will have a material adverse effect on SPG, SPG Properties or the SPG
Operating Partnership.
 
   Roel Vento et al v. Tom Taylor et al. An affiliate of the SPG Operating
Partnership 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 affiliate is seeking to overturn the award
and has appealed the verdict. The affiliate's appeal is pending. Although
management 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 SPG Operating Partnership.
 
   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
 
                                      28
<PAGE>
 
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. Since that date, the SPG Operating
Partnership's third party casualty insurer responded to the SPG Operating
Partnership's demand, has reimbursed the SPG Operating Partnership for its
costs expended to date, and has further agreed to defend and indemnify the SPG
Operating Partnership against any further loss, cost, or damage with respect
to this matter.
 
   SPG, the SPG Operating Partnership and SPG Properties currently are 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 their financial positions or results of
operations.
 
Item 4. Submission of Matters to a Vote of Security Holders
 
   None.
 
                                      29
<PAGE>
 
                                    Part II
 
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
 
 Market Information
 
   There is no established public trading market for SPG Properties common
stock, which is substantially wholly-owned by SPG. The following table sets
forth for the periods indicated, the distributions declared per share of SPG
Properties common stock:
 
<TABLE>
<CAPTION>
                                                   Declared
                                                 Distribution
                                                 ------------
           <S>                                   <C>
           1997
             1st Quarter........................   $0.4925
             2nd Quarter........................   $0.5050
             3rd Quarter........................   $0.5050
             4th Quarter........................   $0.5050
 
           1998
             1st Quarter........................   $0.5050
             2nd Quarter........................   $0.5050
             3rd Quarter........................   $0.5050
             4th Quarter........................   $0.5050(1)
</TABLE>
--------
(1) Includes a $0.4721 distribution declared in the third quarter of 1998, but
    not payable until the fourth quarter of 1998, related to the CPI Merger,
    designated to align the time periods of distribution payments of the
    merged companies. The current annual distribution rate is $2.02 per share.
 
 Holders
 
   The number of holders of record of the shares of common stock of SPG
Properties was 109 as of March 18, 1999.
 
 Unregistered Sales of Equity Securities
 
   SPG Properties did not issue any equity securities that were not required
to be registered under the Securities Act of 1933, as amended during the
fourth quarter of 1998.
 
                                      30
<PAGE>
 
Item 6. Selected Financial Data
 
   The following table sets forth selected financial data for SPG Properties
and the SPG Operating Partnership. 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.
 
<TABLE>
<CAPTION>
                                 As of or for the Year Ended December 3l,
                          ------------------------------------------------------
                           1998(1)    1997(1)    1996(1)      1995       1994
                          ---------- ---------- ---------- ---------- ----------
                                  (in thousands, except per share data)
<S>                       <C>        <C>        <C>        <C>        <C>
OPERATING DATA (2):
  Total revenue.........  $  932,619 $1,054,167 $  747,704 $  553,657 $  473,676
  Equity in income of
   the SPG Operating
   Partnership (3)......      44,313        --         --         --         --
  Income before
   extraordinary items..     185,586    203,133    134,663    101,505     60,308
  Net income available
   to common
   shareholders.........  $  116,509 $  107,989 $   72,561 $   57,781 $   23,377
 
Distributions per common
 share (4)..............  $     2.02 $     2.01 $     1.63 $     1.97 $     1.90
 
BALANCE SHEET DATA:
  Cash and cash
   equivalents..........  $        0 $  109,699 $   64,309 $   62,721 $  105,139
  Total assets..........   2,108,291  7,662,667  5,895,910  2,556,436  2,316,860
  Mortgages and other
   indebtedness.........           0  5,077,990  3,681,984  1,980,759  1,938,091
  Shareholders' equity..  $2,108,291 $1,556,862 $1,304,891 $  232,946 $   57,307
</TABLE>
 
Notes
 
(1) Notes 3, 4 and 7 to the accompanying financial statements of the SPG
    Operating Partnership describe the CPI Merger and the DRC Merger, which
    occurred on September 24, 1998 and August 9, 1996, respectively, and other
    1998, 1997 and 1996 real estate acquisitions and development.
(2) SPG Properties does not report earnings per share, because substantially
    all of the common stock of SPG Properties is owned by SPG.
(3) See Note 2 to the accompanying financial statements of SPG Properties.
(4) Represents distributions declared per period, which, in 1996, includes a
    distribution of $0.1515 per share 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.
 
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 SPG Properties 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; substantial indebtedness; conflicts of interests;
maintenance of REIT status; and environmental/safety requirements.
 
 
                                      31
<PAGE>
 
 Overview
 
   As of December 31, 1998, SPG Properties, including its consolidated
subsidiary, held a 50.4% ownership interest in the SPG Operating Partnership.
This investment is their sole asset and represents their only source of
income. For these reasons, management has based the following discussion on
the results of operations and financial position of the SPG Operating
Partnership. Prior to the CPI Merger, SPG Properties (formerly Simon DeBartolo
Group, Inc.) and subsidiary accounted for their interests in the SPG Operating
Partnership using the consolidated method of accounting. As a result of the
CPI Merger and related transactions, SPG Properties and subsidiary began
accounting for their noncontrolling interests in the SPG Operating Partnership
using the equity method of accounting.
 
   The SPG 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, 1998, the SPG Operating Partnership owns or holds an interest
in 240 income-producing properties, which consist of 152 regional malls, 77
community shopping centers, three specialty retail centers, five office and
mixed-use properties and three value-oriented super-regional malls in 35
states (the "Properties"). The SPG Operating Partnership also owns interests
in one regional mall, one value-oriented super-regional mall, one specialty
retail center and three community centers currently under construction and
eleven parcels of land held for future development (collectively, the
"Development Properties", and together with the Properties, the "Portfolio
Properties"). The SPG Operating Partnership also holds substantially all of
the economic interest in M.S. Management Associates, Inc. (the "Management
Company"). See Note 8 to the attached financial statements of the SPG
Operating Partnership for a description of the activities of the Management
Company.
 
   Operating results of the SPG Operating Partnership for the two years ended
December 31, 1998 and 1997, and their comparability to the respective prior
periods, have been significantly impacted by a number of Property acquisitions
and openings beginning in 1996. The greatest impact on results of operations
has come from the CPI Merger (see Liquidity and Capital Resources), which was
consummated as of the close of business on September 24, 1998, the merger with
DeBartolo Realty Corporation (the "DRC Merger") which was completed on August
9, 1996, and the acquisition of Shopping Center Associates (the "SCA
Acquisition"), which included a series of transactions from September 29, 1997
to June 1, 1998. In addition, the SPG 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 April 11,
1996, the SPG Operating Partnership acquired the remaining 50% economic
ownership interest in Ross Park Mall for approximately $101 million. On July
31, 1996, the SPG Operating Partnership opened the approximately $75 million
wholly-owned Cottonwood Mall in Albuquerque, New Mexico. On August 29, 1997,
the SPG Operating Partnership opened the 55%-owned, $89 million phase II
expansion of The Forum Shops at Caesar's. On December 30, 1997, the SPG
Operating Partnership acquired 100% of The Fashion Mall at Keystone at the
Crossing, along with an adjacent community center, in Indianapolis, Indiana
for $124.5 million. On January 26, 1998, the SPG Operating Partnership
acquired 100% of Cordova Mall in Pensacola, Florida for approximately $87.3
million. On May 5, 1998, SPG acquired the remaining 50.1% interest in Rolling
Oaks Mall for 519,889 shares of SPG's common stock, valued at approximately
$17.2 million. SPG transferred the interest to the SPG Operating Partnership
in exchange for 519,889 Units. Please refer to "Liquidity and Capital
Resources" for additional information on 1998 activity.
 
 Results of Operations
 
   Year Ended December 31, 1998 vs. Year Ended December 31, 1997
 
   Total revenue of the SPG Operating Partnership increased $346.0 million or
32.8% in 1998 as compared to 1997. This increase is primarily the result of
the CPI Merger ($131.0 million), the SCA Acquisition ($121.7 million), the
Property Transactions ($48.2 million) and approximately $12.9 million of
consolidated revenues
 
                                      32
<PAGE>
 
realized from marketing initiatives throughout the portfolio from the SPG
Operating Partnership's strategic marketing division, Simon Brand Ventures
("SBV"). Excluding these transactions, total revenues increased $32.3 million,
primarily due to a $20.2 million increase in minimum rent, a $10.1 million
increase in other income and a $3.8 million increase in tenant reimbursements.
The 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 $4.3 million increase in rents from tenants operating under
license agreements. The increase in other income is primarily the result of
increases in gains from sales of peripheral properties ($3.4 million) and
interest income ($2.8 million) and a fee ($2.5 million) earned from CPI in
connection with the sale of the General Motors Building in New York, New York.
The increase in tenant reimbursements is offset by a $4.6 million increase in
property operating expenses for comparable properties.
 
   Total operating expenses of the SPG Operating Partnership increased $183.0
million, or 31.7%, in 1998 as compared to 1997. This increase is primarily the
result of the CPI Merger ($70.7 million, including $26.0 million of
depreciation and amortization), the SCA Acquisition ($66.6 million, including
$20.9 million of depreciation and amortization) and the Property Transactions
($29.7 million, including $12.9 million of depreciation and amortization).
Excluding these transactions, operating expenses increased $16.1 million or
2.8%, primarily due to increases in depreciation and amortization ($6.3
million), property operating expenses ($4.6 million) and advertising and
promotion ($3.7 million). The increase in depreciation and amortization is
primarily due to an increase in depreciable real estate realized through
renovation and expansion activities. The increase in property operating
expenses is offset by a $3.8 million net increase in tenant reimbursements.
 
   Interest expense of the SPG Operating Partnership increased $132.5 million,
or 46.0% in 1998 as compared to 1997. This increase is primarily as a result
of the CPI Merger ($45.8 million), the SCA Acquisition ($59.1 million) and the
Property Transactions ($15.0 million) and incremental interest ($12.7 million)
on borrowings under the Credit Facility to acquire the IBM Properties (See
Note 7 to the financial statements of the SPG Operating Partnership).
 
   The $7.3 million loss on the sale of an asset in 1998 is the result of the
June 30, 1998 sale of Southtown Mall for $3.3 million.
 
   The SPG Operating Partnership's income from unconsolidated entities
increased $9.0 million from $19.2 million in 1997 to $28.1 million in 1998,
resulting from an increase in the SPG Operating Partnership's share of income
from partnerships and joint ventures ($13.6 million), partially offset by a
decrease in the SPG Operating Partnership's share of income from M.S.
Management Associates Inc. (the "Management Company") ($4.6 million). The
increase in the SPG Operating Partnership's share of income from partnerships
and joint ventures is primarily the result of the addition of the IBM
Properties ($14.5 million) and the CPI Merger ($6.8 million), partially offset
by the increase in the amortization of the excess of the SPG Operating
Partnerships' investment over their share of the equity in the underlying net
assets of unconsolidated joint-venture Properties ($8.7 million). The decrease
in Management Company includes a $6.0 million decrease in development fee
income.
 
   The $7.1 million loss from extraordinary items in 1998 is the result of
prepayment penalties and write-offs of mortgage costs associated with early
extinguishments of debt.
 
   Net income of the SPG Operating Partnership was $240.4 million in 1998, as
compared to $203.2 million in 1997, reflecting an increase of $37.2 million,
for the reasons discussed above, and was allocated to the SPG Operating
Partnership's partners, including SPG Properties, based on their preferred
unit preferences and weighted average ownership interests in the SPG Operating
Partnership during the year. During 1998, SPG Properties was allocated $116.5
million of income from the SPG Operating Partnership for the Units it held in
the SPG Operating Partnership and an additional $29.3 million for its
preferred unit preference in the SPG Operating Partnership. During 1998, SPG
was allocated $14.2 million of income of the SPG Operating Partnership for the
Units it held directly in the SPG Operating Partnership and an additional
$12.2 million for its preferred unit preference in the SPG Operating
Partnership. The balance was allocated to the limited partners of the SPG
Operating Partnership.
 
 
                                      33
<PAGE>
 
   Year Ended December 31, 1997 vs. Year Ended December 31, 1996
 
   Total revenue of the SPG Operating Partnership 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 SCA 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 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 of the SPG Operating Partnership 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 SCA 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 of the SPG Operating Partnership 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 SCA 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.
 
   The SPG Operating Partnership's income from unconsolidated entities
increased from $9.5 million in 1996 to $19.2 million in 1997, resulting from
an increase in the SPG Operating Partnership's share of the Management
Company's 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 SPG Operating Partnership's share of the
Management Company's gains on sales of peripheral property ($1.9 million). The
increase in the SPG Operating Partnership's share of income from partnerships
and joint ventures is primarily the result of the DRC Merger ($4.9 million),
the SCA 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 SPG
Operating Partnership's investment over its share of the equity in the
underlying net assets of unconsolidated joint-venture Properties ($8.8
million).
 
   Net income of the SPG 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 SPG Operating
Partnership's partners based on their preferred unit preferences and weighted
average ownership interests in the SPG Operating Partnership during the year.
During 1997, SPG Properties was allocated $108.0 million of income from the
SPG Operating Partnership for the Units it held in the SPG Operating
Partnership and an additional $29.2 million for its preferred units preference
in the SPG Operating Partnership. The balance was allocated to the limited
partners of the SPG Operating Partnership.
 
   Preferred distributions increased by $16.6 million to $29.2 million in 1997
as a result of SPG'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.
 
                                      34
<PAGE>
 
 Liquidity and Capital Resources
 
   As of December 31, 1998, the SPG Operating Partnership's balance of
unrestricted cash and cash equivalents was $124.5 million. In addition to its
cash balance, the SPG Operating Partnership has a $1.25 billion unsecured
revolving credit facility (the "Credit Facility") which had $880.8 million
available after outstanding borrowings and letters of credit at December 31,
1998. The Credit Facility bears interest at LIBOR plus 65 basis points and has
an initial maturity of September 1999, with a one-year extension available at
the SPG Operating Partnership's option. SPG and the SPG Operating Partnership
also have access to public equity and debt markets.
 
   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 Unitholders. 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 SPG Operating Partnership's future earnings, cash
flows and fair values relating to financial instruments are primarily
dependent upon prevalent market rates of interest, primarily LIBOR. Based upon
consolidated indebtedness and interest rates at December 31, 1998, a 1%
increase in the market rates of interest would decrease future earnings and
cash flows by approximately $15.5 million, and would decrease the fair value
of debt by approximately $800 million. A 1% decrease in the market rates of
interest would increase future earnings and cash flows by approximately $15.5
million, and would increase the fair value of debt by approximately $1.1
billion.
 
 Financing and Debt
 
   At December 31, 1998, the SPG Operating Partnership had consolidated debt
of $7,972 million, of which $5,669 million is fixed-rate debt bearing interest
at a weighted average rate of 7.3% and $2,303 million is variable-rate debt
bearing interest at a weighted average rate of 6.1%. As of December 31, 1998,
the SPG Operating Partnership had interest rate protection agreements related
to $938 million of consolidated variable-rate debt. The SPG Operating
Partnership's hedging activity as a result of these interest rate protection
agreements resulted in net interest savings of $263 thousand for the year
ended December 31, 1998. This did not materially impact the SPG Operating
Partnership's weighted average borrowing rates.
 
   The SPG Operating Partnership's share of total scheduled principal payments
of mortgage and other indebtedness, including unconsolidated joint venture
indebtedness over the next five years is $4,728 million, with $4,315 million
thereafter. The SPG Operating Partnership together with the SRC Operating
Partnership (See Note 1 to the financial statements of the SPG Operating
Partnership) have a combined ratio of consolidated debt-to-market
capitalization of 51.7% and 46.0% at December 31, 1998 and 1997, respectively.
The increase is primarily the result of a 12.8% decrease in the estimated
value of the Units.
 
   The following summarizes significant financing and refinancing transactions
completed in 1998:
 
   Financings related to the CPI Merger. The cost of the CPI Merger (see
below) included the issuance of 53,078,564 shares of common stock and
4,844,331 shares of 6.50% Series B Convertible Preferred Stock to the CPI
shareholders. Each share of Series B Convertible Preferred Stock is
convertible into 2.586 paired shares of common stock of the Companies, subject
to adjustment under certain circumstances described in Note 11 of the
financial statements of the SPG Operating Partnership. Also resulting from the
CPI Merger, SPG became the issuer of 209,249 shares of 6.50% Series A
Convertible Preferred Stock. Each share of which is convertible into 37.995
paired shares of the Companies' common stock, subject to adjustment under the
same circumstances as SPG's 6.50% Series B Convertible Preferred Stock
described above. On February 26, 1999, 150,000 of such shares were converted.
 
 
                                      35
<PAGE>
 
   As described in Note 3 to the financial statements of the SPG Operating
Partnership, SPG transferred substantially all of the CPI assets acquired,
which consisted primarily of 23 regional malls, one community center, two
office buildings and one regional mall under construction (other than one
regional mall, Ocean County Mall, and certain net leased properties valued at
approximately $153,100) and liabilities assumed (except that SPG remains a co-
obligor with respect to the Merger Facility (see below)) of approximately $2.3
billion to the SPG Operating Partnership or one or more subsidiaries of the
SPG Operating Partnership in exchange for 47,790,550 limited partnership
interests and 5,053,580 preferred partnership interests in the SPG Operating
Partnership. The preferred partnership interests carry the same rights and
equal the number of preferred shares issued and outstanding as a direct result
of the CPI Merger.
 
   To finance the cash portion of the CPI Merger, the SPG Operating
Partnership and SPG, as co-obligors, obtained a $1.4 billion unsecured bridge
loan (the "Merger Facility"). The Merger Facility bears interest at a base
rate of LIBOR plus 65 basis points and has stated maturities at the following
intervals (i) $450 million on June 24, 1999, (ii) $450 million on March 24,
2000 and (iii) $500 million on September 24, 2000. In February 1999 the
initial $450 million maturity was retired with proceeds from an unsecured debt
offering, which is described below. The Merger Facility is subject to
covenants and conditions substantially identical to those of the Credit
Facility. SPG and the SPG Operating Partnership drew the entire $1.4 billion
available on the Merger Facility, along with $237 million on the Credit
Facility, to pay for the cash portion of the dividend declared in conjunction
with the CPI Merger, as well as closing costs associated with the CPI Merger.
Financing costs of $9.5 million, which were incurred to obtain the Merger
Facility, are being amortized over 18 months.
 
   Also in conjunction with the CPI Merger, the SPG Operating Partnership
transferred substantially all of the CPI assets and $825 million of unsecured
notes (the "CPI Notes") to Retail Property Trust ("RPT"), a 99.999% owned REIT
subsidiary of the SPG Operating Partnership. As a result, the CPI Notes are
structurally senior in right of payment to holders of other SPG Operating
Partnership unsecured notes to the extent of the assets of RPT only, with over
99.999% of the excess cash flow plus any capital event transactions available
for the other SPG Operating Partnership unsecured notes. The CPI Notes pay
interest semiannually, and bear interest ranging from 7.05% to 9.00% (weighted
average of 8.03%), and have various due dates through 2016 (average maturity
of 9.1 years). The CPI Notes contain leverage ratios, annual real property
appraisal requirements, debt service coverage ratios and minimum net worth
ratios. Additionally, consolidated mortgages totaling $2.1 million, and a pro-
rata share of $143.5 million of nonconsolidated joint venture indebtedness was
assumed in the CPI Merger, and as a result of acquiring the remaining interest
in Palm Beach Mall, the SPG Operating Partnership began accounting for that
Property using the consolidated method of accounting, adding $50.7 million to
consolidated indebtedness. A net premium of $19.2 million was recorded in
accordance with the purchase method of accounting to adjust the CPI Notes and
mortgage indebtedness assumed in the CPI Merger to fair value, which is being
amortized over the remaining lives of the related indebtedness.
 
   Secured Indebtedness. During 1998, the SPG Operating Partnership refinanced
approximately $545 million of mortgage indebtedness on 19 of its Properties
into four separate cross-collateralized and cross-defaulted pools. These
refinancings included additional borrowings of approximately $270 million,
which the SPG Operating Partnership used primarily to paydown the Credit
Facility and for general working capital needs. The weighted average maturity
of the indebtedness increased from approximately 5.6 years to 7.1 years, while
the weighted average interest rates decreased from approximately 7.6% to 7.3%.
 
   Credit Facility. The maximum and average amounts outstanding during 1998
under the Credit Facility were $992 million and $584 million, respectively.
 
   Equity Financings. During 1998, SPG issued 2,957,335 shares of its common
stock in offerings generating aggregate net proceeds of approximately $91.4
million. The net proceeds were contributed to the SPG Operating Partnership in
exchange for a like number of Units. The SPG Operating Partnership used the
net proceeds for general working capital purposes. In addition, SPG issued
519,889 shares of common stock valued at $17.2 million to acquire the
remaining 50.1% interest in Rolling Oaks Mall, which was transferred to the
SPG Operating Partnership in exchange for 519,889 Units.
 
                                      36
<PAGE>
 
   Unsecured Notes. On June 22, 1998, the SPG Operating Partnership completed
the sale of $1.075 billion of senior unsecured debt securities. The issuance
included three tranches of notes as follows (1) $375 million bearing interest
at 6.625% and maturing on June 15, 2003, (2) $300 million bearing interest at
6.75% and maturing on June 15, 2005 and (3) $200 million bearing interest at
7.375% and maturing on June 15, 2018. This offering also included a fourth
tranche of $200 million of 7.00% Mandatory Par Put Remarketed Securities due
June 15, 2028, which are subject to redemption on June 16, 2008. The net
proceeds of approximately $1.062 billion were combined with $40 million of
working capital and used to retire and terminate a $300 million unsecured
revolving credit facility and to reduce the outstanding balance of the Credit
Facility.
 
   Additionally, on February 4, 1999, the SPG Operating Partnership completed
the sale of $600 million of senior unsecured notes. The notes include two $300
million tranches. The first tranche bears interest at 6.75% and matures on
February 4, 2004 and the second tranche bears interest at 7.125% and matures
on February 4, 2009. The SPG Operating Partnership used the net proceeds of
approximately $594 million to retire the $450 million initial tranche of the
Merger Facility and to pay $142 million on the outstanding balance of the
Credit Facility. Following this offering, the SPG Operating Partnership had
remaining $250 million on its debt shelf registration, under which debt
securities may be issued.
 
 The CPI Merger
 
   For financial reporting purposes, as of the close of business on September
24, 1998, pursuant to the Agreement and Plan of Merger dated February 18,
1998, among Simon DeBartolo Group, Inc., Corporate Property Investors, Inc.,
and Corporate Realty Consultants, Inc., the CPI Merger was consummated. As a
result, the consolidated results of operations include an additional 17
regional malls, two office buildings and one community center, with an
additional six regional malls being accounted for using the equity method of
accounting.
 
   The total purchase price associated with the CPI Merger is approximately
$5.9 billion including transaction costs and liabilities assumed. This
included a per share dividend paid immediately prior to the CPI Merger to the
holders of CPI common stock of (i) $90 in cash, (ii) 1.0818 additional shares
of common stock and (iii) 0.19 shares of 6.50% Series B convertible preferred
stock. The dividend was paid on a total of 25,496,476 shares of CPI common
stock.
 
   See Note 3 to the financial statements of the SPG Operating Partnership for
additional information about the CPI Merger.
 
 Acquisitions and Disposals
 
   During 1998, in addition to the CPI Merger, the SPG Operating Partnership
acquired 100% of one Property and additional interests in a total of 21
Properties for approximately $657 million, including the assumption of $271
million of indebtedness and 2,864,088 Units valued at approximately $93
million, with the remainder in cash financed primarily through the Credit
Facility and working capital. These transactions resulted in the addition of
approximately 11.8 million square feet of GLA to the portfolio.
 
   The SPG Operating Partnership and affiliates and several joint venture
partners have collectively acquired a 44 percent ownership position in Groupe
BEG, S.A. ("BEG"). BEG is a fully integrated European retail real estate
developer, lessor and manager. The SPG Operating Partnership and its
affiliated Management Company, have contributed $27.5 million of equity
capital for a 22% ownership interest and are committed to an additional
investment of $28.7 million over the next 12 months, subject to certain
financial and other conditions, including the SPG Operating Partnership's
approval of development projects. The agreement with BEG is structured to
allow the SPG Operating Partnership and affiliates and its joint venture
partners to collectively acquire a controlling interest in BEG over time.
 
                                      37
<PAGE>
 
   Effective June 1, 1998, the SPG Operating Partnership sold The Promenade
for $33.5 million. No gain or loss was recognized on this transaction.
Effective June 30, 1998, the SPG Operating Partnership sold Southtown Mall for
$3.3 million and recorded a $7.2 million loss on the transaction.
 
   See Note 4 to the financial statements of the SPG Operating Partnership for
1997 and 1996 acquisition activity.
 
   On February 25, 1999, the SPG Operating Partnership entered into a
definitive agreement with New England Development Company ("NED") to acquire
and assume management responsibilities for NED's portfolio of up to 14
regional malls aggregating approximately 10.6 million square feet of GLA. The
purchase price for the portfolio is approximately $1.725 billion. The SPG
Operating Partnership expects to form a joint venture to acquire the
portfolio, with the SPG Operating Partnership's ultimate ownership to be
between 30% to 50%.
 
   Management continues to actively review and evaluate a number of individual
property and portfolio acquisition opportunities. Management believes that
funds on hand and amounts available under the Credit Facility, together with
the ability to issue shares of common stock and/or Units, provide the means to
finance certain acquisitions. No assurance can be given that the SPG Operating
Partnership 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.
 
   Portfolio Restructuring. As a continuing part of the SPG Operating
Partnership's long-term strategic plan, management is evaluating the potential
sale of non-retail holdings, along with a number of retail assets that are no
longer aligned with the SPG Operating Partnership's strategic criteria. If
these assets are sold, management expects the sale prices will not differ
materially from the carrying value of the related assets.
 
 Development Activity
 
   Development activities are an ongoing part of the SPG Operating
Partnership's business. During 1998, the SPG Operating Partnership opened two
new community shopping centers at a combined cost of approximately $47.3
million, adding 465,500 square-feet of GLA to the portfolio. Each of these new
community centers is adjacent to an existing regional mall in the SPG
Operating Partnership's portfolio. In addition, The Shops at Sunset Place, a
destination-oriented retail and entertainment project containing approximately
510,000 square feet of GLA, opened in January of 1999 in South Miami, Florida.
The SPG Operating Partnership owns a noncontrolling 37.5% of this specialty
retail center.
 
   Construction also continues on the following projects, which have an
aggregate construction cost of approximately $620 million, the SPG Operating
Partnership's share of which is approximately $347 million:
 
  .  Concord Mills, a 37.5%-owned value-oriented super regional mall project,
     containing approximately 1.4 million square feet of GLA, is scheduled to
     open in September of 1999 in Concord (Charlotte), North Carolina.
 
  .  The Mall of Georgia, an approximately 1.5 million square foot regional
     mall project, is scheduled to open in August of 1999. Adjacent to the
     regional mall, The Mall of Georgia Crossing is an approximately 444,000
     square-foot community shopping center project, which is scheduled to
     open in October of 1999. The SPG Operating Partnership is funding 85% of
     the capital requirements of the project. The SPG Operating Partnership
     has a noncontrolling 50% ownership interest in each of these development
     projects after the return of its equity and a 9% return thereon.
 
  .  In addition to Mall of Georgia Crossing, two other new community center
     projects are under construction: The Shops at North East Plaza and
     Waterford Lakes at a combined 1,243,000 square feet of GLA.
 
                                      38
<PAGE>
 
 Strategic Expansions and Renovations
 
   A key objective of the SPG Operating Partnership is to increase the
profitability and market share of the Properties through the completion of
strategic renovations and expansions. In 1998, the SPG Operating Partnership
completed construction and opened nine new expansion and/or renovation
projects: Aventura Mall in Miami, Florida; Castleton Square in Indianapolis,
Indiana; Independence Center in Independence, Missouri; Irving Mall in Irving,
Texas; Prien Lake Mall in Lake Charles, Louisiana; Richardson Square in
Dallas, Texas; Tyrone Square in St. Petersburg, Florida; Walt Whitman Mall in
Huntington, New York; and West Town Mall in Knoxville, Tennessee.
 
   The SPG Operating Partnership currently has five major expansion projects
under construction at an aggregate cost of approximately $465 million, the SPG
Operating Partnership's share of which is approximately $422 million:
 
  .  A $146 million renovation and expansion of The Shops at Mission Viejo in
     Mission Viejo, California, including the additions of Nordstrom and Saks
     Fifth Avenue with expansions of Macy's and Robinsons-May is scheduled
     for completion in the winter of 1999. In addition, a new food court is
     scheduled to open late in 2000. The SPG Operating Partnership owns 100%
     of this mall.
 
  .  North East Mall will have an additional 308,000 square feet of GLA
     including a 73,000 square foot small shop expansion, a new Nordstrom and
     Saks Fifth Avenue when its $103 million renovation and expansion
     project, which is scheduled to open in the fall of 2000, is complete.
     The SPG Operating Partnership owns 100% of this regional mall.
 
  .  An approximately 200,000 square-foot small shop expansion of The Florida
     Mall in Orlando, Florida, as well as the addition of Burdines, is
     scheduled for completion in November of 1999. Expansions of Dillard's,
     Parisian and JCPenney are also included in this $86 million project. The
     SPG Operating Partnership has a noncontrolling 50% ownership interest in
     this project.
 
  .  The $65 million expansion and renovation of Town Center at Boca Raton in
     Boca Raton, Florida includes the addition of Nordstrom, a relocation of
     Saks Fifth Avenue, a mall renovation and the expansions of Lord & Taylor
     and Bloomingdale's, with more than 100,000 additional square feet of
     small shops. This wholly-owned development project is scheduled for
     completion in the summer of 2000.
 
  .  Richmond Town Square is in the middle of a $57 million renovation and
     expansion project which includes a new Kaufmann's and a JCPenney
     renovation that opened in November 1998, a Sears remodel and a new food
     court scheduled to open in May of 1999 and a new Sony Cinema scheduled
     to open early in 2000.
 
   The SPG Operating Partnership has a number of smaller renovation and/or
expansion projects currently under construction aggregating approximately $200
million, nearly all of which relates to wholly-owned Properties. In addition,
preconstruction development continues on a number of project expansions,
renovations and anchor additions at additional properties. The SPG 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.
 
                                      39
<PAGE>
 
 Capital Expenditures
 
   Capital expenditures of the SPG Operating Partnership, excluding
acquisitions, were $348 million, $332 million and $211 million for the periods
ended December 31, 1998, 1997 and 1996, respectively.
 
<TABLE>
<CAPTION>
                                                                 1998 1997 1996
                                                                 ---- ---- ----
      <S>                                                        <C>  <C>  <C>
      New Developments.......................................... $ 22 $ 80 $ 80
      Renovations and Expansions................................  250  197   86
      Tenant Allowances--Retail.................................   45   37   24
      Tenant Allowances--Offices................................    1    1    6
      Recoverable Capital Expenditures..........................   18   13   11
      Other.....................................................   12    4    4
                                                                 ---- ---- ----
        Total................................................... $348 $332 $211
                                                                 ==== ==== ====
</TABLE>
 
 Distributions
 
   SPG Properties declared distributions on its common stock in 1998
aggregating $2.02 per share. On January 20, 1999, SPG Properties declared a
distribution of $0.5050 per share payable on February 19, 1999. For federal
income tax purposes, 1% of the 1998 common stock distributions represented a
capital gain and 48% represented a return of capital. Future distributions
will be determined based on actual results of operations and cash available
for distribution. In addition, preferred distributions of $2.19 per Series B
preferred share and $3.95 per Series C preferred share were declared during
1998.
 
 Investing and Financing Activities
 
   In March 1998, the SPG Operating Partnership transferred its 50% ownership
interest in The Source, an approximately 730,000 square-foot regional mall, to
a newly formed limited partnership in which it has a 50% ownership interest,
with the result that the SPG Operating Partnership now owns an indirect
noncontrolling 25% ownership interest in The Source. In connection with this
transaction, the SPG Operating Partnership's partner in the newly formed
limited partnership is entitled to a preferred return of 8% on its initial
capital contribution, a portion of which was distributed to the SPG Operating
Partnership. The SPG Operating Partnership applied the distribution against
its investment in The Source.
 
   In August 1998, the SPG Operating Partnership admitted an additional
partner into the partnership which owns The Shops at Sunset Place for $35
million, which was distributed to the SPG Operating Partnership. The SPG
Operating Partnership now holds a 37.5% noncontrolling interest in this
Property, which opened in January 1999. The SPG Operating Partnership applied
the distribution against its investment in the Property.
 
   Cash used by the SPG Operating Partnership in investing activities for the
year ended December 31, 1998 of $2,099 million is primarily the result of the
CPI Merger and other acquisitions of $1,943 million, $345 million of capital
expenditures and $22 million of investments in and advances to the Management
Company, partially offset by net distributions from unconsolidated entities of
$140 million, cash received from acquired Properties of $17 million, net
proceeds of $46 million from the sales of Sherwood Gardens, The Promenade and
Southtown Mall and an $8 million decrease in restricted cash. In addition to
the $1,659 million paid in connection with the CPI Merger, acquisitions
includes $240 million for the acquisition of the IBM Properties, $41 million
for the acquisition of Arboretum and $3 million for the acquisition of Cordova
Mall. Capital expenditures includes development costs of $58 million,
renovation and expansion costs of approximately $222 million and tenant costs
and other operational capital expenditures of approximately $65 million.
Development costs include $39 million for the Shops at Sunset Place and $14
million at Waterford Lakes. Net distributions from unconsolidated entities
primarily consists of $55 million from Florida Mall, $33 million from The
Source transactions described above, $30 million associated with The Shops at
Sunset Place transaction described above and $12 million from the IBM
Properties.
 
                                      40
<PAGE>
 
   Cash provided to the SPG Operating Partnership by financing activities for
the year ended December 31, 1998 was $1,570 million and includes net
borrowings of $1,914 million primarily used to fund the CPI Merger and other
acquisition and development activity and contributions from SPG of the
proceeds from the sales of its common stock of $93 million, partially offset
by total distributions to minority interest partners of consolidated
Properties, and partners in the SPG Operating Partnership of $437 million.
 
 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 SPG 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 SPG 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 SPG 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 SPG 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
 
   The SPG Operating Partnership has undertaken a project to identify and
correct problems arising from the inability of information technology hardware
and software systems to process dates after December 31, 1999. This Year 2000
project consists of two primary components. The first component focuses on the
SPG Operating Partnership's key information technology systems (the "IT
Component") and the second component focuses on the information systems of key
tenants and key third party service providers as well as imbedded systems
within common areas of substantially all of the Properties (the "Non-IT
Component"). Key tenants include the 20 largest base rent contributors and
anchor tenants with over 25,000 square feet of GLA. Key third party service
providers are those providers whose Year 2000 problems, if not addressed,
would be likely to have a material adverse effect on the SPG Operating
Partnership's operations.
 
   The IT Component of the Year 2000 project is being managed by the
information services department of the SPG Operating Partnership who have
actively involved other disciplines within the SPG Operating Partnership who
are directly impacted by an IT Component of the project. The Non-IT Component
is being managed by a steering committee of 25 employees, including senior
executives of a number of the SPG Operating Partnership's departments. In
addition, outside consultants have been engaged to assist in the Non-IT
Component.
 
 Status of Project
 
   IT Component. The SPG Operating Partnership's primary operating, financial
accounting and billing systems and the SPG Operating Partnership's standard
primary desktop software have been determined to be Year 2000 ready. The SPG
Operating Partnership's information services department has also completed its
assessment of other "mission critical" applications within the SPG Operating
Partnership and is currently implementing solutions to those applications in
order for them to be Year 2000 ready. It is expected that the implementation
of these mission critical solutions will be complete by September 30, 1999.
 
                                      41
<PAGE>
 
   Non-IT Component. The Non-IT Component includes the following phases: (1)
an inventory of Year 2000 items which are determined to be material to the SPG
Operating Partnership's operations; (2) assigning priority to identified
items; (3) assessing Year 2000 compliance status as to all critical items; (4)
developing replacement or contingency plans based on the information collected
in the preceding phases; (5) implementing replacement and contingency plans;
and (6) testing and monitoring of plans, as applicable.
 
   Phase (1) and Phase (2) are complete and Phase (3) is in process. The
assessment of compliance status of key tenants is approximately 82% complete,
the assessment of compliance status of key third party service providers is
approximately 80% complete, the assessment of compliance status of critical
inventoried components at the Properties is approximately 79% complete and the
assessment of compliance status of non-critical inventoried components at the
Properties is approximately 75% complete. The SPG Operating Partnership
expects to complete Phase (3) by April 30, 1999. The development of
contingency or replacement plans (Phase (4)) is scheduled to be completed by
September 30, 1999. Development of such plans is ongoing. Implementation of
contingency and replacement plans (Phase (5)) has commenced and will continue
through 1999 to the extent Year 2000 issues are identified. Any required
testing (Phase (6)) is to be completed throughout the remainder of 1999.
 
   Costs. The SPG Operating Partnership estimates that it will spend
approximately $1.5 million in incremental costs for its Year 2000 project.
This amount will be incurred over a period that commenced in January 1997 and
is expected to end in September 1999. Costs incurred through December 31, 1998
are estimated at approximately $500 thousand. Such amounts are expensed as
incurred. These estimates do not include the costs expended by the SPG
Operating Partnership following its 1996 merger with DeBartolo Realty
Corporation for software, hardware and related costs necessary to upgrade its
primary operating, financial accounting and billing systems, which allowed
those systems to, among other things, become Year 2000 compliant.
 
   Risks. The most reasonably likely worst case scenario for the SPG Operating
Partnership with respect to the Year 2000 problems would be disruptions in
operations at the Properties. This could lead to reduced sales at the
Properties and claims by tenants which would in turn adversely affect the SPG
Operating Partnership's results of operations.
 
   The SPG Operating Partnership has not yet completed all phases of its Year
2000 project and the SPG Operating Partnership is dependent upon key tenants
and key third party suppliers to make their information systems Year 2000
compliant. In addition, disruptions in the economy generally resulting from
Year 2000 problems could have an adverse effect on the SPG Operating
Partnership's operations.
 
 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.
 
                                      42
<PAGE>
 
                                    Part III
 
Item 10. Directors and Executive Officers of the Registrant
 
   The information required by this item is incorporated herein by reference to
SPG Properties' definitive Proxy Statement for its annual meeting of
shareholders to be filed with the Commission pursuant to Regulation 14A and is
included under the caption "EXECUTIVE OFFICERS OF THE REGISTRANT" in Part I
thereof.
 
Item 11. Executive Compensation
 
   The information required by this item is incorporated herein by reference to
SPG Properties' definitive Proxy Statement for its annual meeting of
shareholders to be filed with the Commission pursuant to Regulation 14A.
 
Item 12. Security Ownership of Certain Beneficial Owners and Management
 
   The information required by this item is incorporated herein by reference to
SPG Properties' definitive Proxy Statement for its annual meeting of
shareholders to be filed with the Commission pursuant to Regulation 14A.
 
Item 13. Certain Relationships and Related Transactions
 
   The information required by this item is incorporated herein by reference to
SPG Properties' definitive Proxy Statement for its annual meeting of
shareholders to be filed with the Commission pursuant to Regulation 14A.
 
                                       43
<PAGE>
 
                                    PART IV
 
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
 
   (a)
    (1)
      Financial Statements
 
<TABLE>
<CAPTION>
                                                                            Page
                                                                            No.
                                                                            ----
     <C>  <S>                                                               <C>
          Report of Independent Public Accountants.......................    45
          SPG Properties, Inc.:
          Consolidated Balance Sheets as of December 31, 1998 and 1997...    46
          Consolidated Statements of Operations for the years ended
          December 31, 1998, 1997 and 1996...............................    47
          Consolidated Statements of Shareholders' Equity for the years
          ended December 31, 1998, 1997 and 1996.........................    48
          Consolidated Statements of Cash Flows for the years ended
          December 31, 1998, 1997 and 1996...............................    49
          Simon Property Group, L.P.:
          Consolidated Balance Sheets as of December 31, 1998 and 1997...    50
          Consolidated Statements of Operations for the years ended
          December 31, 1998, 1997 and 1996...............................    51
          Consolidated Statements of Partners' Equity for the years ended
          December 31, 1998, 1997 and 1996...............................    52
          Consolidated Statements of Cash Flows for the years ended
          December 31, 1998, 1997 and 1996...............................    53
          Notes to Financial Statements..................................    54
     (2)  Financial Statement Schedules Report of Independent Public
          Accountants....................................................    85
          Simon Property Group, L.P. Schedule III--Schedule of Real
          Estate and Accumulated Depreciation............................    86
          Notes to Schedule III..........................................    93
     (3)  Exhibits
          The Exhibit Index attached hereto is hereby incorporated by
          reference to this Item.........................................    94
</TABLE>
 
   (b)
    Reports on Form 8-K
 
       One Form 8-K was filed during the fourth quarter ended December 31,
    1998.
 
              On October 9, 1998 under Item 2--Acquisition or Disposition of
              Assets, SPG Properties filed a Form 8-K to announce the
              consummation of the merger by and among Simon DeBartolo Group,
              Inc. (the accounting predecessor to SPG Properties, Inc.),
              Corporate Property Investors, Inc. and Corporate Realty
              Consultants, Inc. (the predecessor to SPG Realty Consultants,
              Inc.). On December 8, 1998, SPG Properties filed an amendment to
              the October 9, 1998 Form 8-K to include, under Item 7--Financial
              Statements and Exhibits, pro forma financial information through
              September 30, 1998.
 
                                      44
<PAGE>
 
                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
To Simon Property Group, Inc.:
 
   We have audited the accompanying consolidated balance sheets of SPG
Properties, Inc. (a Maryland corporation) and subsidiary as of December 31,
1998 and 1997, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1998. We have also audited the accompanying consolidated
balance sheets of Simon Property Group, L.P. (a Delaware limited partnership)
and subsidiaries as of December 31, 1998 and 1997, and the related statements
of operations, partners' equity and cash flows for each of the three years in
the period ended December 31, 1998. These financial statements are the
responsibility of 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 positions of SPG
Properties, Inc. and subsidiary as of December 31, 1998 and 1997, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1998, and the consolidated
financial position of Simon Property Group, L.P. and subsidiaries as of
December 31, 1998 and 1997, and the consolidated results of their operations
and their cash flows for each of the three years in the period ended December
31, 1998, in conformity with generally accepted accounting principles.
 
                                          Arthur Andersen LLP
 
Indianapolis, Indiana
February 17, 1999.
 
                                      45
<PAGE>
 
                              SPG PROPERTIES, INC.
 
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                      December 31, December 31,
                                                          1998         1997
                                                      ------------ ------------
                                                       (Dollars in thousands,
                                                      except per share amounts)
<S>                                                   <C>          <C>
Assets:
  Investment in the SPG Operating Partnership........  $2,108,291   $      --
  Investment properties, at cost.....................         --     6,867,354
    Less--accumulated depreciation...................         --       461,792
                                                       ----------   ----------
                                                              --     6,405,562
  Cash and cash equivalents..........................         --       109,699
  Restricted cash....................................         --         8,553
  Tenant receivables and accrued revenue, net........         --       188,359
  Notes and advances receivable from Management
   Company and affiliates............................         --        93,809
  Investment in partnerships and joint ventures, at
   equity............................................         --       612,140
  Investment in Management Company and affiliates....         --         3,192
  Other investment...................................         --        53,785
  Deferred costs and other assets....................         --       164,413
  Minority interest..................................         --        23,155
                                                       ----------   ----------
      Total assets...................................  $2,108,291   $7,662,667
                                                       ==========   ==========
Liabilities:
  Mortgages and other indebtedness...................  $      --    $5,077,990
  Accounts payable and accrued expenses..............         --       245,121
  Cash distributions and losses in partnerships and
   joint ventures, at equity.........................         --        20,563
  Other liabilities..................................         --        67,694
                                                       ----------   ----------
      Total liabilities..............................         --     5,411,368
                                                       ----------   ----------
Commitments and Contingencies (See note 13 to the
 financial statements of the SPG Operating
 Partnership)
Limited Partners' Interest in the SPG Operating
 Partnership.........................................         --       694,437
Shareholders' Equity:
  Series B and C cumulative redeemable preferred
   stock, 12,200,000 shares authorized, 11,000,000
   issued and outstanding............................     339,329      339,061
  Common stock, $.0001 par value, 400,000,000 shares
   authorized, and 110,492,467 and 106,439,001 issued
   and outstanding, respectively.....................          11           10
  Class B common stock, $.0001 par value, 12,000,000
   shares authorized, 3,200,000 issued and
   outstanding.......................................           1            1
  Class C common stock, $.0001 par value, 4,000
   shares authorized, issued and outstanding.........         --           --
  Capital in excess of par value.....................   2,176,267    1,491,908
  Accumulated deficit................................    (387,656)    (263,308)
  Unrealized gain on long-term investment............          89        2,420
  Unamortized restricted stock award.................     (19,750)     (13,230)
                                                       ----------   ----------
      Total shareholders' equity.....................   2,108,291    1,556,862
                                                       ----------   ----------
      Total liabilities, limited partners' interest
       and shareholders' equity......................  $2,108,291   $7,662,667
                                                       ==========   ==========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       46
<PAGE>
 
                              SPG PROPERTIES, INC.
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
                                              For the Year Ended December 31,
                                             ----------------------------------
                                             1998 (Note 2)    1997       1996
                                             ------------- ----------  --------
                                                  (Dollars in thousands)
<S>                                          <C>           <C>         <C>
Revenue:
  Minimum rent.............................    $565,294    $  641,352  $438,089
  Overage rent.............................      22,766        38,810    30,810
  Tenant reimbursements....................     283,805       322,416   233,974
  Other income.............................      60,754        51,589    44,831
                                               --------    ----------  --------
    Total revenue..........................     932,619     1,054,167   747,704
                                               --------    ----------  --------
Expenses:
  Property operating.......................     155,822       176,846   129,094
  Depreciation and amortization............     177,710       200,900   135,780
  Real estate taxes........................      90,341        98,830    69,173
  Repairs and maintenance..................      35,953        43,000    31,779
  Advertising and promotion................      27,992        32,891    24,756
  Merger integration costs.................         --            --      7,236
  Provision for credit losses..............       1,599         5,992     3,460
  Other....................................      16,983        18,678    14,914
                                               --------    ----------  --------
    Total operating expenses...............     506,400       577,137   416,192
                                               --------    ----------  --------
Operating Income...........................     426,219       477,030   331,512
Interest Expense...........................     281,748       287,823   202,182
                                               --------    ----------  --------
Income Before Minority Interest............     144,471       189,207   129,330
Minority Interest..........................      (4,704)       (5,270)   (4,300)
Gains (Loss) on Sales of Assets, Net.......      (7,283)           20        88
                                               --------    ----------  --------
Income Before Unconsolidated Entities......     132,484       183,957   125,118
Equity in Income of the SPG Operating
 Partnership...............................      44,313           --        --
Income from Unconsolidated Entities........       8,789        19,176     9,545
                                               --------    ----------  --------
Income Before Extraordinary Items..........     185,586       203,133   134,663
Extraordinary Items........................       7,002            58    (3,521)
                                               --------    ----------  --------
Income Before Allocation to Limited
 Partners..................................     192,588       203,191   131,142
Less--Limited Partners' Interest in the SPG
 Operating Partnership.....................      45,374        65,954    45,887
Less--Managing General Partner's Direct
 Interest in the SPG Operating Partnership.       1,369           --        --
                                               --------    ----------  --------
Net Income.................................     145,845       137,237    85,255
Preferred Dividends........................     (29,336)      (29,248)  (12,694)
                                               --------    ----------  --------
Net Income Available to Common
 Shareholders..............................    $116,509    $  107,989  $ 72,561
                                               ========    ==========  ========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       47
<PAGE>
 
                       SPG PROPERTIES, INC. CONSOLIDATED
 
                       STATEMENTS OF SHAREHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                                 Unrealized
                                     All Classes  Gain on   Capital in               Unamortized     Total
                          Preferred   of Common  Long-Term  Excess of   Accumulated  Restricted  Shareholders'
                            Stock       Stock    Investment Par Value     Deficit    Stock Award    Equity
                          ---------  ----------- ---------- ----------  -----------  ----------- -------------
                                                       (Dollars in thousands)
<S>                       <C>        <C>         <C>        <C>         <C>          <C>         <C>
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 (4,858,887
 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        2,420    1,491,908    (263,308)    (13,230)    1,556,862
Common stock issued to
 the public (2,957,335
 shares)................                   1                    91,398                                91,399
Common stock issued in
 connection with
 acquisitions (519,889
 shares)................                                        17,176                                17,176
Stock incentive program
 (495,131 shares).......                                        15,983                 (15,983)          --
Other (Accretion of
 preferred stock and
 81,111 shares issued)..       268                               2,160                                 2,428
Amortization of stock
 incentive..............                                                                 9,463         9,463
Adjustment to limited
 partners' interest in
 the SPG Operating
 Partnership............                                       557,642                               557,642
Distributions...........                                                  (270,193)                 (270,193)
                          --------       ---      -------   ----------  ----------    --------    ----------
Subtotal................   339,329        12        2,420    2,176,267    (533,501)    (19,750)    1,964,777
                          --------       ---      -------   ----------  ----------    --------    ----------
 Other Comprehensive
  Income:
Unrealized loss on long-
 term investment........                           (2,331)                                            (2,331)
Net income..............                                                   145,845                   145,845
                          --------       ---      -------   ----------  ----------    --------    ----------
 Total Comprehensive
  Income:                      --        --        (2,331)         --      145,845         --        143,514
                          ========       ===      =======   ==========  ==========    ========    ==========
Balance at December 31,
 1998...................  $339,329       $12      $    89   $2,176,267  $ (387,656)   $(19,750)   $2,108,291
                          ========       ===      =======   ==========  ==========    ========    ==========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       48
<PAGE>
 
                              SPG PROPERTIES, INC.
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                           For the Year Ended December 31,
                                         -------------------------------------
                                            1998         1997         1996
                                         -----------  -----------  -----------
                                               (Dollars in thousands)
<S>                                      <C>          <C>          <C>
Cash Flows from Operating Activities:
  Net income............................ $   145,845  $   137,237  $    85,255
    Adjustments to reconcile net income
     to net cash provided by operating
     activities--
      Depreciation and amortization.....     185,798      208,539      143,582
      Extraordinary items...............      (7,002)         (58)       3,521
      Loss (gains) on sales of assets,
       net..............................       7,283          (20)         (88)
      Limited partners' interest in the
       SPG Operating Partnership........      45,374       65,954       45,887
      Managing General Partner's
       Interest in the SPG Operating
       Partnership......................       1,369          --           --
      Straight-line rent................      (5,892)      (9,769)      (3,502)
      Minority interest.................       4,704        5,270        4,300
      Equity in income of the SPG
       Operating Partnership............     (44,313)         --           --
      Equity in income of unconsolidated
       entities.........................      (8,789)     (19,176)      (9,545)
    Changes in assets and liabilities--
      Tenant receivables and accrued
       revenue..........................      (5,280)     (23,284)      (6,422)
      Deferred costs and other assets...     (10,516)     (30,203)     (12,756)
      Accounts payable, accrued expenses
       and other liabilities............      41,648       36,417      (13,768)
                                         -----------  -----------  -----------
        Net cash provided by operating
         activities.....................     350,229      370,907      236,464
                                         -----------  -----------  -----------
Cash Flows from Investing Activities:
  Acquisitions..........................  (1,881,183)    (980,427)     (56,069)
  Capital expenditures..................    (233,200)    (305,178)    (195,833)
  Cash from mergers, acquisitions and
   consolidation of joint ventures, net.      17,213       19,744       37,053
  Cash held by deconsolidated investee..     (78,971)         --           --
  Change in restricted cash.............       6,868       (2,443)       1,474
  Net proceeds from sale of assets......      46,087          599          399
  Investments in unconsolidated
   entities.............................     (28,726)     (47,204)     (62,096)
  Distributions from the SPG Operating
   Partnership..........................      64,014          --           --
  Distributions from unconsolidated
   entities.............................     164,914      144,862       36,786
  Investments in and advances (to)/from
   Management Company...................     (19,915)     (18,357)      38,544
  Other investing activities............         --       (55,400)         --
                                         -----------  -----------  -----------
        Net cash used in investing
         activities.....................  (1,942,899)  (1,243,804)    (199,742)
                                         -----------  -----------  -----------
Cash Flows from Financing Activities:
  Proceeds from sales of common and
   preferred stock, net.................      92,629      344,438      201,704
  Minority interest distributions, net..     (10,991)        (219)      (5,115)
  Preferred dividends and distributions
   to shareholders......................    (270,193)    (227,949)    (166,640)
  Distributions to the limited partners
   of the SPG Operating Partnership.....    (104,139)    (122,442)     (90,763)
  Mortgage and other note proceeds, net
   of transaction costs.................   3,305,199    2,976,222    1,293,582
  Mortgage and other note principal
   payments.............................  (1,529,534)  (2,030,763)  (1,267,902)
  Other refinancing transaction.........         --       (21,000)         --
                                         -----------  -----------  -----------
        Net cash provided by (used in)
         financing activities...........   1,482,971      918,287      (35,134)
                                         -----------  -----------  -----------
Increase in Cash and Cash Equivalents...    (109,699)      45,390        1,588
Cash and Cash Equivalents, beginning of
 period.................................     109,699       64,309       62,721
                                         -----------  -----------  -----------
Cash and Cash Equivalents, end of
 period................................. $       --   $   109,699  $    64,309
                                         ===========  ===========  ===========
</TABLE>
        The accompanying notes are an integral part of these statements.
 
                                       49
<PAGE>
 
                           SIMON PROPERTY GROUP, L.P.
 
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                      December 31,  December 31,
                                                          1998          1997
                                                      ------------  ------------
                                                       (Dollars in thousands)
<S>                                                   <C>           <C>
Assets:
  Investment properties, at cost..................... $11,662,860    $6,867,354
    Less--accumulated depreciation...................     709,114       461,792
                                                      -----------    ----------
                                                       10,953,746     6,405,562
  Goodwill...........................................      58,134           --
  Cash and cash equivalents..........................     124,466       109,699
  Restricted cash....................................         867         8,553
  Tenant receivables and accrued revenue, net........     217,341       188,359
  Notes and advances receivable from Management
   Company and affiliates............................     115,378        93,809
  Note receivable from SRC (Interest at 6%, due
   2013).............................................      20,565           --
  Investment in partnerships and joint ventures, at
   equity............................................   1,303,251       612,140
  Investment in Management Company and affiliates....      10,037         3,192
  Other investment...................................      50,176        53,785
  Deferred costs and other assets....................     226,817       164,413
  Minority interest..................................      32,138        23,155
                                                      -----------    ----------
    Total assets..................................... $13,112,916    $7,662,667
                                                      ===========    ==========
Liabilities:
  Mortgages and other indebtedness................... $ 7,972,381    $5,077,990
  Notes payable to SRC (Interest at 8%, due 2008)....      17,907           --
  Accounts payable and accrued expenses..............     410,445       245,121
  Cash distributions and losses in partnerships and
   joint ventures, at equity.........................      29,139        20,563
  Other liabilities..................................      95,243        67,694
                                                      -----------    ----------
    Total liabilities................................   8,525,115     5,411,368
                                                      -----------    ----------
Commitments and Contingencies (Note 13)
Partners' Equity:
  Preferred units, 16,053,580 and 11,000,000 units
   outstanding, respectively.........................   1,057,245       339,061
  Managing General Partner, 47,790,550 and 0 units
   outstanding, respectively.........................     751,948           --
  General Partners, 113,696,467 and 109,643,001 units
   outstanding, respectively.........................   1,788,712     1,231,031
  Limited Partners, 64,182,157 and 61,850,762 units
   outstanding, respectively.........................   1,009,646       694,437
  Unamortized restricted stock award.................     (19,750)      (13,230)
                                                      -----------    ----------
    Total partners' equity...........................   4,587,801     2,251,299
                                                      -----------    ----------
    Total liabilities and partners' equity........... $13,112,916    $7,662,667
                                                      ===========    ==========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       50
<PAGE>
 
                    SIMON PROPERTY GROUP, L.P. CONSOLIDATED
 
                            STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
                                            For the Year Ended December 31,
                                           ------------------------------------
                                              1998         1997        1996
                                           -----------  -----------  ----------
                                                (Dollars in thousands,
                                               except per unit amounts)
<S>                                        <C>          <C>          <C>
Revenue:
  Minimum rent............................ $   847,198  $   641,352  $ 438,089
  Overage rent............................      49,441       38,810     30,810
  Tenant reimbursements...................     427,921      322,416    233,974
  Other income............................      75,629       51,589     44,831
                                           -----------  -----------  ---------
    Total revenue.........................   1,400,189    1,054,167    747,704
                                           -----------  -----------  ---------
Expenses:
  Property operating......................     225,899      176,846    129,094
  Depreciation and amortization...........     266,978      200,900    135,780
  Real estate taxes.......................     133,038       98,830     69,173
  Repairs and maintenance.................      53,189       43,000     31,779
  Advertising and promotion...............      50,521       32,891     24,756
  Merger integration costs................         --           --       7,236
  Provision for credit losses.............       6,599        5,992      3,460
  Other...................................      23,956       18,678     14,914
                                           -----------  -----------  ---------
    Total operating expenses..............     760,180      577,137    416,192
                                           -----------  -----------  ---------
Operating Income..........................     640,009      477,030    331,512
Interest Expense..........................     420,280      287,823    202,182
                                           -----------  -----------  ---------
Income Before Minority Interest...........     219,729      189,207    129,330
Minority Interest.........................      (7,335)      (5,270)    (4,300)
Gains (Loss) on Sales of Assets, Net......      (7,283)          20         88
                                           -----------  -----------  ---------
Income Before Unconsolidated Entities.....     205,111      183,957    125,118
Income from Unconsolidated Entities.......      28,145       19,176      9,545
                                           -----------  -----------  ---------
Income Before Extraordinary Items.........     233,256      203,133    134,663
Extraordinary Items.......................       7,146           58     (3,521)
                                           -----------  -----------  ---------
Net Income................................     240,402      203,191    131,142
Preferred Unit Requirement................     (41,471)     (29,248)   (12,694)
                                           -----------  -----------  ---------
Net Income Available to Unitholders....... $   198,931  $   173,943  $ 118,448
                                           ===========  ===========  =========
Net Income Available to Unitholders
 Attributable to:
  Managing General Partner (SPG).......... $    14,243  $       --   $     --
  General Partners (SPG Properties and SD
   Property Group, Inc.)..................     116,509      107,989     72,561
  Limited Partners........................      68,179       65,954     45,887
                                           -----------  -----------  ---------
  Net income.............................. $   198,931  $   173,943  $ 118,448
                                           ===========  ===========  =========
Basic Earnings Per Unit:
  Income before extraordinary items....... $      1.01  $      1.08  $    1.02
  Extraordinary items.....................        0.04          --       (0.03)
                                           -----------  -----------  ---------
  Net income.............................. $      1.05  $      1.08  $    0.99
                                           ===========  ===========  =========
Diluted Earnings Per Unit:
  Income before extraordinary items....... $      1.01  $      1.08  $    1.01
  Extraordinary items.....................        0.04          --       (0.03)
                                           -----------  -----------  ---------
  Net income.............................. $      1.05  $      1.08  $    0.98
                                           ===========  ===========  =========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       51
<PAGE>
 
                           SIMON PROPERTY GROUP, L.P.
 
                  CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
 
<TABLE>
<CAPTION>
                                                                                                   Limited
                                       Managing                           Unamortized   Total     Partners'
                          Preferred    General     General     Limited    Restricted  Partners'    Equity
                            Units      Partner     Partners    Partners   Stock Award   Equity    Interest
                          ----------  ----------  ----------  ----------  ----------- ----------  ---------
                                                     (Dollars in thousands)
<S>                       <C>         <C>         <C>         <C>         <C>         <C>         <C>
Balance at December 31,
 1995...................  $   99,923  $      --   $ (686,362) $      --    $ (2,687)  $ (589,126) $ 908,764
1996 Adjustment to
 reflect limited
 partners' interest at
 Historical Value (Note
 11)....................                             822,072      86,692                 908,764   (908,764)
                          ----------  ----------  ----------  ----------   --------   ----------  ---------
                              99,923         --      135,710      86,692     (2,687)     319,638        --
                                                                                                  =========
General Partner
 Contributions (442,225
 units).................                              10,518                              10,518
Units issued in
 connection with Merger
 (37,877,965 and
 23,219,012 units,
 respectively)..........                             922,379     565,448               1,487,827
Other unit issuances
 (472,410 units)........                                             275                     275
Preferred units issued,
 net of issuance costs
 (8,000,000 units) .....     192,989                                                     192,989
Stock incentive program
 (200,030 units)........                                           4,751     (4,751)         --
Amortization of stock
 incentive..............                                                      2,084        2,084
Adjustment to allocate
 net equity of the
 Operating
 Partnership............                             (14,382)     14,382                     --
Net income..............      12,694                  72,561      45,887                 131,142
Distributions...........     (12,694)               (114,142)    (72,401)               (199,237)
Other...................                                 (62)                                (62)
                          ----------  ----------  ----------  ----------   --------   ----------
Balance at December 31,
 1996...................     292,912         --    1,017,333     640,283     (5,354)   1,945,174
General Partner
 Contributions
 (6,311,273 units)......                             200,920                             200,920
Units issued in
 connection with
 acquisitions (2,193,037
 and 876,712,
 respectively)..........                              70,000      26,408                  96,408
Stock incentive program
 (448,753 units)........                              14,016                (13,262)         754
Amortization of stock
 incentive..............                                                      5,386        5,386
Preferred units issued,
 net of issuance costs
 (3,000,000 units)......     146,072                                                     146,072
Conversion of 4,000,000
 Series A preferred
 units into 3,809,523
 common units...........     (99,923)                 99,923                                 --
Adjustment to allocate
 net equity of the
 Operating Partnership..                             (82,869)     82,869                     --
Unrealized gain on long-
 term investments.......                               2,420       1,365                   3,785
Net income..............      29,248                 107,989      65,954                 203,191
Distributions...........     (29,248)               (198,701)   (122,442)               (350,391)
                          ----------  ----------  ----------  ----------   --------   ----------
Balance at December 31,
 1997...................     339,061         --    1,231,031     694,437    (13,230)   2,251,299
General Partner
 Contributions
 (2,957,335 units)......                              91,399                              91,399
CPI Merger (Note 3):
 Preferred Units
  (5,053,580)...........     717,916                                                     717,916
 Units (47,790,550).....               1,605,638                                       1,605,638
Units issued in
 connection with
 acquisitions (519,889
 and 2,344,199 units,
 respectively)..........                              17,176      76,263                  93,439
Stock incentive program
 (495,131 units, net of
 forfeitures)...........                              15,983                (15,983)         --
Amortization of stock
 incentive..............                                                      9,463        9,463
Other (Accretion of
 Preferred Units, 81,111
 general partner Units
 issued and 12,804
 limited partner Units
 redeemed)..............         268         340       2,160        (289)                  2,479
Adjustment to allocate
 net equity of the SPG
 Operating
 Partnership ...........                (866,564)    557,642     308,922                     --
Distributions...........     (41,471)     (1,746)   (240,857)   (136,551)               (420,625)
                          ----------  ----------  ----------  ----------   --------   ----------
Subtotal................   1,015,774     737,668   1,674,534     942,782    (19,750)   4,351,008
Comprehensive Income:
 Net income.............      41,471      14,243     116,509      68,179                 240,402
 Unrealized gain on
  long-term
  investments...........                      37      (2,331)     (1,315)                 (3,609)
                          ----------  ----------  ----------  ----------   --------   ----------
   Total Comprehensive
    Income..............      41,471      14,280     114,178      66,864        --       236,793
                          ----------  ----------  ----------  ----------   --------   ----------
Balance at December 31,
 1998...................  $1,057,245  $  751,948  $1,788,712  $1,009,646   $(19,750)  $4,587,801
                          ==========  ==========  ==========  ==========   ========   ==========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       52
<PAGE>
 
                    SIMON PROPERTY GROUP, L.P. CONSOLIDATED
 
                            STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                           For the Year Ended December 31,
                                         -------------------------------------
                                            1998         1997         1996
                                         -----------  -----------  -----------
                                               (Dollars in thousands)
<S>                                      <C>          <C>          <C>
Cash Flows from Operating Activities:
  Net income............................ $   240,402  $   203,191  $   131,142
    Adjustments to reconcile net income
     to net cash provided by operating
     activities--
      Depreciation and amortization.....     277,346      208,539      143,582
      Extraordinary items...............      (7,146)         (58)       3,521
      Loss (gains) on sales of assets,
       net..............................       7,283          (20)         (88)
      Straight-line rent................      (9,261)      (9,769)      (3,502)
      Minority interest.................       7,335        5,270        4,300
      Equity in income of unconsolidated
       entities.........................     (28,145)     (19,176)      (9,545)
    Changes in assets and liabilities--
      Tenant receivables and accrued
       revenue..........................     (13,316)     (23,284)      (6,422)
      Deferred costs and other assets...      (7,289)     (30,203)     (12,756)
      Accounts payable, accrued expenses
       and other liabilities............      76,454       36,417      (13,768)
                                         -----------  -----------  -----------
        Net cash provided by operating
         activities.....................     543,663      370,907      236,464
                                         -----------  -----------  -----------
Cash Flows from Investing Activities:
  Acquisitions..........................  (1,942,724)    (980,427)     (56,069)
  Capital expenditures..................    (345,026)    (305,178)    (195,833)
  Cash from Mergers, acquisitions and
   consolidation of joint ventures, net.      16,563       19,744       37,053
  Change in restricted cash.............       7,686       (2,443)       1,474
  Proceeds from sale of assets..........      46,087          599          399
  Investments in unconsolidated
   entities.............................     (55,523)     (47,204)     (62,096)
  Distributions from unconsolidated
   entities.............................     195,497      144,862       36,786
  Investments in and advances (to)/from
   Management Company...................     (21,569)     (18,357)      38,544
  Other investing activities............         --       (55,400)         --
                                         -----------  -----------  -----------
        Net cash used in investing
         activities.....................  (2,099,009)  (1,243,804)    (199,742)
                                         -----------  -----------  -----------
Cash Flows from Financing Activities:
  Partnership contributions.............      92,570      344,438      201,704
  Partnership distributions.............    (417,164)    (350,391)    (257,403)
  Minority interest distributions, net..     (19,694)        (219)      (5,115)
  Mortgage and other note proceeds, net
   of transaction costs.................   3,782,314    2,976,222    1,293,582
  Mortgage and other note principal
   payments.............................  (1,867,913)  (2,030,763)  (1,267,902)
  Other refinancing transaction.........         --       (21,000)         --
                                         -----------  -----------  -----------
        Net cash provided by (used in)
         financing activities...........   1,570,113      918,287      (35,134)
                                         -----------  -----------  -----------
Increase in Cash and Cash Equivalents...      14,767       45,390        1,588
Cash and Cash Equivalents, beginning of
 period.................................     109,699       64,309       62,721
                                         -----------  -----------  -----------
Cash and Cash Equivalents, end of
 period................................. $   124,466  $   109,699  $    64,309
                                         ===========  ===========  ===========
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       53
<PAGE>
 
                             SPG PROPERTIES, INC.
 
                         NOTES TO FINANCIAL STATEMENTS
 
               (Dollars in thousands, except per share amounts)
 
1. Organization
 
   SPG Properties, Inc. ("SPG Properties"), formerly Simon DeBartolo Group,
Inc. ("SDG"), is a substantially wholly-owned subsidiary of Simon Property
Group, Inc. ("SPG"). SPG Properties and SPG are both self-administered and
self-managed real estate investment trusts ("REITs") under the Internal
Revenue Code of 1986, as amended. SPG Properties and its substantially wholly-
owned subsidiary SD Property Group, Inc., are general partners of, and hold a
noncontrolling partnership interest in Simon Property Group, L.P. (the "SPG
Operating Partnership"), formerly Simon DeBartolo Group, L.P. ("SDG, LP"), as
of December 31, 1998. The SPG Operating Partnership is engaged in the
ownership, operation, management, leasing, acquisition, expansion and
development of real estate properties, primarily regional malls and community
shopping centers. SPG is the managing general partner of the SPG Operating
Partnership. Each share of common stock of SPG is paired with a beneficial
interest in 1/100th of a share of common stock of SPG Realty Consultants, Inc.
("SRC" and together with SPG, the "Companies").
 
   As of December 31, 1998, the SPG Operating Partnership owned or held an
interest in 240 income-producing properties, which consist of 152 regional
malls, 77 community shopping centers, three specialty retail centers, five
office and mixed-use properties and three value-oriented super-regional malls
in 35 states (the "Properties"). The SPG Operating Partnership also owned
interests in one regional mall, one value-oriented super-regional mall, one
specialty center and three community centers currently under construction and
eleven parcels of land held for future development (collectively, the
"Development Properties", and together with the Properties, the "Portfolio
Properties"). At December 31, 1998 and 1997, SPG Properties' direct and
indirect ownership interest in the SPG Operating Partnership was 50.4% and
63.9%, respectively. The SPG Operating Partnership also holds substantially
all of the economic interest in M.S. Management Associates, Inc. (the
"Management Company"). The Management Company manages Properties generally not
wholly-owned by the SPG Operating Partnership and certain other properties,
and also engages in certain property development activities. The SPG 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.
 
2. Basis of Presentation
 
   The accompanying consolidated financial statements of SPG Properties
include accounts of all entities owned or controlled by SPG Properties. All
significant intercompany amounts have been eliminated. In connection with the
CPI Merger (see below), SPG became the managing general partner of the SPG
Operating Partnership. Since SPG Properties no longer controls the SPG
Operating Partnership, the accompanying balance sheet as of December 31, 1998
reflects SPG Properties' interest in the SPG Operating Partnership utilizing
the equity method of accounting. Prior to the CPI Merger, SPG Properties and
subsidiary accounted for their interests in the SPG Operating Partnership
using the consolidated method of accounting. Because of the proximity of the
change in control (as of the close of business on September 24, 1998) to the
period ended September 30, 1998, for purposes of the statements of operations
and cash flows, the equity method commenced effective October 1, 1998. The
managing general partners' interest during the period from September 25, 1998
through September 30, 1998 has been reflected as a reduction to SPG
Properties' operating results in the accompanying consolidated statements of
operations. 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 SPG Properties 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.
 
                                      54
<PAGE>
 
                             SPG PROPERTIES, INC.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   Net operating results of the SPG Operating Partnership are allocated to its
partners based first on their preferred unit preference and then on their
remaining weighted average ownership interest in the SPG Operating Partnership
during the period. SPG Properties' remaining weighted average ownership
interest in the SPG Operating Partnership for the years ended December 31,
1998, 1997 and 1996 was 59.4%, 62.1% and 61.2%, respectively.
 
3. Equity Investment in the SPG Operating Partnership
 
   The following table summarizes financial information of the SPG Operating
Partnership for the year ended December 31, 1998, and distinguishes between
the periods in which SPG Properties' interest in the SPG Operating Partnership
was accounted for using the consolidated method of accounting and the equity
method of accounting:
 
<TABLE>
<CAPTION>
                                       Consolidated
                                          Method     Equity Method
                                       (January 1 to (October 1 to
                                       September 30, December 31,
                                           1998)         1998)       Total
                                       ------------- ------------- ----------
   <S>                                 <C>           <C>           <C>
   Total Revenue......................   $932,619      $467,570    $1,400,189
   Operating Expenses.................    506,400       253,780       760,180
   Net Income of the SPG Operating
    Partnership.......................   $148,275      $ 92,127    $  240,402
     Managing General and Limited
      Partners' Share of the SPG
      Operating Partnership's Net
      Income..........................     46,743        47,814        94,557
                                         --------      --------    ----------
   SPG Properties' Share of the SPG
    Operating Partnership's Net
    Income............................   $101,532      $ 44,313    $  145,845
                                         ========      ========    ==========
   SPG Properties' Weighted Average
    Ownership Interest................       63.2%         50.4%         59.4%
                                         ========      ========    ==========
</TABLE>
 
4. Capital Stock
 
   Under its Charter, as supplemented, SPG Properties 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.
 
   In connection with the CPI Merger, all of the holders of SPG Properties'
common stock exchanged their shares in SPG Properties to SPG for a like number
of shares in SPG. The result is that SPG owns substantially all of the common
stock of SPG Properties.
 
 Preferred Stock
 
   On July 9, 1997, SPG Properties sold 3,000,000 shares of its 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. Management 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 SPG Properties in
whole or in part, at a redemption price of $50.00 per share, plus accrued and
unpaid distributions, if any,
 
                                      55
<PAGE>
 
                             SPG PROPERTIES, INC.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
thereon. The redemption price of the Series C Preferred Shares may only be
paid from the sale proceeds of other capital stock of SPG Properties, 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 SPG Properties. SPG Properties contributed the net proceeds of
this offering of approximately $146,000 to the SPG Operating Partnership in
exchange for preferred Units, the economic terms of which are substantially
identical to the Series C Preferred Shares. The balance of the Series C
Preferred Shares was $146,340 and $146,072 as of December 31, 1998 and 1997,
respectively.
 
   On September 27, 1996, SPG Properties 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. SPG Properties 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 SPG Properties, which may include other series of preferred shares.
SPG Properties contributed the proceeds to the SPG Operating Partnership in
exchange for preferred Units. The SPG Operating Partnership pays a preferred
distribution to SPG Properties equal to the dividends paid on the preferred
stock. The balance of the Series B Preferred Shares was $192,989 as of
December 31, 1998 and 1997.
 
5. Quarterly Financial Data (Unaudited)
 
   Summarized quarterly 1998 and 1997 data is as follows:
 
<TABLE>
<CAPTION>
                                  First    Second   Third    Fourth    Annual
                                 Quarter  Quarter  Quarter  Quarter    Amount
                                 -------- -------- -------- -------- ----------
<S>                              <C>      <C>      <C>      <C>      <C>
1998
Total revenue................... $300,257 $310,375 $321,987 $    --  $  932,619
Operating income................  133,667  145,226  147,326      --     426,219
Equity in income of the SPG
 Operating Partnership..........      --       --       --    44,313     44,313
Income before extraordinary
 items..........................   45,124   43,514   52,635   44,313    185,586
Net income available to common
 shareholders................... $ 23,948 $ 27,467 $ 28,115 $ 36,979 $  116,509
                                 ======== ======== ======== ======== ==========
 
1997
Total revenue................... $242,414 $245,055 $259,783 $306,915 $1,054,167
Operating income................  111,706  114,455  117,572  133,297    477,030
Income 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
                                 ======== ======== ======== ======== ==========
</TABLE>
 
   Because substantially all of the common stock of SPG Properties is owned by
SPG, SPG Properties does not report earnings per share.
 
   The footnotes summarizing the significant accounting policies of and other
matters pertinent to the SPG Operating Partnership follow and should be read
in conjunction with the financial statements and footnotes of SPG Properties
and subsidiary.
 
                                      56
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                         NOTES TO FINANCIAL STATEMENTS
 
   (Dollars in thousands, except per unit amounts and where indicated as in
                                   billions)
 
1. Organization
 
   Simon Property Group, L.P. (the "SPG Operating Partnership"), a Delaware
limited partnership, formerly known as Simon DeBartolo Group, L.P. ("SDG,
LP"), is a majority owned subsidiary of Simon Property Group Inc. ("SPG"), a
Delaware corporation. SPG is a self-administered and self-managed real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as amended
(the "Code"). Each share of common stock of SPG is paired with a beneficial
interest in 1/100th of a share of common stock of SPG Realty Consultants,
Inc., also a Delaware corporation ("SRC" and together with SPG, the
"Companies"). Units of ownership interest ("Units") in the SPG Operating
Partnership are paired with a beneficial interest in 1/100th of a Unit in SPG
Realty Consultants, L.P. (the "SRC Operating Partnership" and together with
the SPG Operating Partnership, the "Operating Partnerships"). The SRC
Operating Partnership is the primary subsidiary of SRC.
 
   The SPG 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, 1998, the SPG Operating Partnership owned or held an interest
in 240 income-producing properties, which consisted of 152 regional malls, 77
community shopping centers, three specialty retail centers, five office and
mixed-use properties and three value-oriented super-regional malls in 35
states (the "Properties"). The SPG Operating Partnership also owned interests
in one regional mall, one value-oriented super-regional mall, one specialty
center and three community centers currently under construction and eleven
parcels of land held for future development (collectively, the "Development
Properties", and together with the Properties, the "Portfolio Properties"). At
December 31, 1998 and 1997, SPG's direct and indirect ownership interests in
the SPG Operating Partnership was 71.6% and 63.9%, respectively. The SPG
Operating Partnership also holds substantially all of the economic interest in
M.S. Management Associates, Inc. (the "Management Company"). See Note 8 for a
description of the activities of the Management Company.
 
   The SPG 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 SPG Operating Partnership's
regional malls and community shopping centers rely heavily upon anchor
tenants. As of December 31, 1998, 312 of the approximately 871 anchor stores
in the Properties were occupied by three retailers. An affiliate of one of
these retailers is a limited partner in the SPG Operating Partnership.
 
2. Basis of Presentation
 
   The accompanying consolidated financial statements of the SPG Operating
Partnership include accounts of all entities owned or controlled by the SPG
Operating Partnership. All significant intercompany amounts have been
eliminated. The consolidated financial statements reflect the CPI Merger (see
Note 3) as of the close of business on September 24, 1998. Operating results
prior to the CPI Merger represent the operating results of SDG, LP.
 
   The accompanying 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 assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and revenues and expenses during the reported period.
Actual results could differ from these estimates.
 
                                      57
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   Properties which are wholly-owned ("Wholly-Owned Properties") or owned less
than 100% and are controlled by the SPG 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. The deficit minority
interest balance in the accompanying 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. Investments
in partnerships and joint ventures which represent noncontrolling 14.7% to
85.0% direct and indirect ownership interests ("Joint Venture Properties") and
the investment in the Management Company (see Note 8) 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 SPG Operating Partnership are allocated after
preferred distributions (see Note 11), based on its partners' weighted average
ownership interests during the period. SPG's weighted average direct and
indirect ownership interest in the SPG Operating Partnership during 1998, 1997
and 1996 were 66.2%, 62.1% and 61.2%, respectively. At December 31, 1998 and
1997, SPG's direct and indirect ownership interest was 71.6% and 63.9%,
respectively.
 
3. CPI Merger
 
   For financial reporting purposes, as of the close of business on September
24, 1998, the CPI Merger was consummated pursuant to the Agreement and Plan of
Merger dated February 18, 1998, among Simon DeBartolo Group, Inc. ("SDG"),
Corporate Property Investors, Inc. ("CPI"), and Corporate Realty Consultants,
Inc. ("CRC").
 
   Pursuant to the terms of the CPI Merger, SPG Merger Sub, Inc., a
substantially wholly-owned subsidiary of CPI, merged with and into SDG with
SDG continuing as the surviving company. SDG became a majority-owned
subsidiary of CPI. The outstanding shares of common stock of SDG were
exchanged for a like number of shares of CPI. Beneficial interests in CRC were
acquired for $14,000 in order to pair the common stock of CPI with 1/100th of
a share of common stock of CRC, the paired share affiliate.
 
   Immediately prior to the consummation of the CPI Merger, the holders of CPI
common stock were paid a merger dividend consisting of (i) $90 in cash, (ii)
1.0818 additional shares of CPI common stock and (iii) 0.19 shares of 6.50%
Series B convertible preferred stock of CPI per share of CPI common stock.
Immediately prior to the CPI Merger, there were 25,496,476 shares of CPI
common stock outstanding. The aggregate value associated with the completion
of the CPI Merger was approximately $5.9 billion including transaction costs
and liabilities assumed.
 
   To finance the cash portion of the CPI Merger consideration, $1.4 billion
was borrowed under a new senior unsecured medium term bridge loan, which bears
interest at a base rate of LIBOR plus 65 basis points and matures in three
mandatory amortization payments (on June 22, 1999, March 24, 2000 and
September 24, 2000). An additional $237,000 was also borrowed under the SPG
Operating Partnership's existing $1.25 billion credit facility (the "Credit
Facility"). In connection with the CPI Merger, CPI was renamed "Simon Property
Group, Inc." CPI's paired share affiliate, Corporate Realty Consultants, Inc.,
was renamed "SPG Realty Consultants, Inc." In addition SDG and SDG, LP were
renamed "SPG Properties, Inc.", and "Simon Property Group, L.P.",
respectively.
 
                                      58
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   Upon completion of the CPI Merger, SPG transferred substantially all of the
CPI assets acquired, which consisted primarily of 23 regional malls, one
community center, two office buildings and one regional mall under
construction (other than one regional mall, Ocean County Mall, and certain net
leased properties valued at approximately $153,100) and liabilities assumed
(except that SPG remains a co-obligor with respect to the Merger Facility (see
Note 9)) of approximately $2.3 billion to the SPG Operating Partnership or one
or more subsidiaries of the SPG Operating Partnership in exchange for
47,790,550 Units and 5,053,580 preferred Units in the SPG Operating
Partnership. The preferred Units carry the same rights and equal the number of
preferred shares issued and outstanding as a direct result of the CPI Merger.
 
   SPG accounted for the merger between SDG and the CPI merger subsidiary as a
reverse purchase in accordance with Accounting Principles Board Opinion No.
16. Although paired shares of the former CPI and CRC were issued to SDG common
stock holders and SDG became a substantially wholly owned subsidiary of CPI
following the CPI Merger, CPI is considered the business acquired for
accounting purposes. SDG is considered the acquiring company because the SDG
common stockholders hold a majority of the common stock of SPG, post-merger.
The value of the consideration paid by SDG has been allocated to the estimated
fair value of the CPI assets acquired and liabilities assumed which resulted
in goodwill of $58,134, as adjusted. Goodwill is being amortized over the
estimated life of the properties of 35 years. Purchase accounting will be
finalized when the SPG Operating Partnership completes and implements its
combined operating plan, which is expected to occur by the third quarter of
1999.
 
   SDG, LP contributed $14,000 cash to CRC and $8,000 cash to the SRC
Operating Partnership on behalf of the SDG common stockholders and the limited
partners of SDG, LP to obtain the beneficial interests in common stock of CRC,
which were paired with the shares of common stock issued by SPG, and to obtain
Units in the SRC Operating Partnership so that the limited partners of the SDG
Operating Partnership would hold the same proportionate interest in the SRC
Operating Partnership that they hold in the SDG Operating Partnership. The
cash contributed to CRC and the SRC Operating Partnership on behalf of the
partners of SDG, LP was accounted for as a distribution to the partners.
 
4. The DRC Merger and Other Real Estate Acquisitions, Disposals and
Developments
 
 The DRC Merger
 
   On August 9, 1996, the national shopping center business of DeBartolo
Realty Corporation and subsidiaries ("DRC") was acquired 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, SPG acquired
all the outstanding common stock of DRC (55,712,529 shares), at an exchange
ratio of 0.68 shares of SPG's common stock for each share of DRC common stock.
A total of 37,873,965 shares of SPG's common stock was issued by SPG, to the
DRC shareholders. DRC and the acquisition subsidiary merged. DRC became a
99.9% subsidiary of SPG and changed its name to SD Property Group, Inc. The
purchase price was allocated to the fair value of the assets and liabilities
using the purchase method of accounting.
 
   In connection with the DRC Merger, the general and limited partners of
Simon Property Group, LP ("Old SPG, LP"), which was SPG Properties, Inc.'s
("Old SPG") initial operating partnership, contributed 49.5% (47,442,212
Units) of the total outstanding Units in Old SPG, LP to the operating
partnership of DRC, DeBartolo Realty Partnership, L.P. ("DRP, LP") in exchange
for 47,442,212 Units in DRP, LP, whose name was changed to Simon DeBartolo
Group, L.P. Old SPG retained a 50.5% partnership interest (48,400,641 Units)
in Old SPG, LP but assigned its rights to receive distributions of profits on
49.5% (47,442,212 Units) of the outstanding Units
 
                                      59
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
of partnership interest in Old SPG, LP to SDG, LP. The limited partners of
DRP, LP approved the contribution made by the partners of Old 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 Old SPG 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 Old SPG 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 Old SPG's common stock on August 9,
1996 ($24.375). The limited partners of Old 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 Old SPG, LP (37,282,628 Units) to SDG, LP.
The interests transferred by the partners of Old SPG, LP to DRP, LP have been
appropriately reflected at historical costs.
 
   Upon completion of the DRC Merger, Old SPG 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 Old SPG, LP with 24.3%
(37,873,965 Units in Old SPG, LP) of the outstanding partnership Units in Old
SPG, LP. Old SPG remained the sole general partner of Old SPG, LP with 1% of
the outstanding partnership Units (958,429 Units) and 49.5% interest in the
capital of Old SPG, LP, and SDG, LP became a special limited partner in Old
SPG, LP with 49.5% (47,442,212 Units) of the outstanding partnership Units in
Old SPG, LP and an additional 49.5% interest in the profits of Old SPG, LP.
Old SPG, LP did not acquire any interest in SDG, LP. Upon completion of the
DRC Merger, Old SPG directly and indirectly owned a controlling 61.2%
(95,479,761 Units) partnership interest in SDG, LP.
 
   For financial reporting purposes, the completion of the DRC Merger resulted
in a reverse acquisition by Old SPG, 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 Old SPG was the accounting acquirer, the SPG Operating Partnership
(formerly SDG, LP, and before that, DRP, LP) became the primary operating
partnership through which the business of Old SPG was being conducted. As a
result of the DRC Merger, Old SPG, LP became a subsidiary of SDG, LP with 99%
of the profits allocable to SDG, LP and 1% of the profits allocable to Old SPG
Cash flow allocable to Old SPG's 1% profit interest in SDG, LP was absorbed by
public company costs and related expenses incurred by Old SPG However, because
Old SPG was the accounting acquirer and, upon completion of the DRC Merger,
acquired majority control of SDG, LP; Old 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 Old SPG and for all pre-Merger comparative periods, the financial
statements of SDG, LP reflect the financial statements of Old SPG, LP as the
predecessor to SDG, LP for financial reporting purposes.
 
   On December 31, 1997, Old SPG, LP merged into SDG, LP.
 
 Acquisitions and Disposals
 
   On January 26, 1998, the SPG Operating Partnership acquired Cordova Mall in
Pensacola, Florida for approximately $87,300, including the assumption of a
$28,935 mortgage, which was later retired, and the issuance of 1,713,016
Units, valued at approximately $55,500. This 874,000 square-foot regional mall
is wholly-owned by the SPG Operating Partnership.
 
                                      60
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   Effective May 5, 1998, in a series of transactions, the SPG Operating
Partnership acquired the remaining 50.1% interest in Rolling Oaks Mall for
519,889 shares of SPG's common stock, valued at approximately $17,176. The
interest was transferred to the SPG Operating Partnership in exchange for
519,889 Units.
 
   Effective June 30, 1998, the SPG Operating Partnership sold Southtown Mall
for $3,250 and recorded a $7,219 loss on the transaction.
 
   On December 7, 1998, a joint venture partnership, in which the SPG
Operating Partnership owns a controlling 90% interest, purchased The
Arboretum, a 209,000 square-foot community center in Austin, Texas. Concurrent
with the acquisition, the joint venture obtained a $34,000 mortgage on the
Property bearing interest at LIBOR plus 1.5%. The SPG Operating Partnership's
share of the $45,000 purchase price was $40,500, which was funded primarily
with the net proceeds of the mortgage, with the remainder being funded from
working capital.
 
   On September 29, 1997, the SPG Operating Partnership completed its cash
tender offer for all of the outstanding shares of beneficial interests of The
Retail Property Trust ("RPT"), a private REIT. 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 (the "SCA Properties"). During 1997, the SPG
Operating Partnership exchanged its 50% interests in two SCA Properties to a
third party for the remaining 50% interests in two other SCA Properties,
acquired the remaining 50% ownership interest in another of the SCA Properties
and acquired the remaining 1.2% interest in SCA. During 1998, the SPG
Operating Partnership sold the community center and a regional mall for $9,550
and $33,500, respectively. These Property sales were accounted for as an
adjustment to the allocation of the purchase price. At the completion of these
transactions (the "SCA Acquisition"), the SPG Operating Partnership owns 100%
of eight of the nine SCA Properties, and a noncontrolling 50% ownership
interest in the remaining Property. The total cost for the acquisition of SCA
and related transactions of approximately $1,300,000 includes shares of common
stock of SPG valued at approximately $50,000, Units in the SPG Operating
Partnership valued at approximately $25,300, the assumption of $398,500 of
consolidated indebtedness and the SPG Operating Partnership's pro rata share
of joint venture indebtedness of $76,750, with the remainder comprising
primarily of cash financed using the Credit Facility. On September 15, 1998,
RPT transferred its ownership interest in SCA to the SPG Operating Partnership
in exchange for 27,195,109 Units in the SPG Operating Partnership.
 
   Also in 1997, the SPG 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 in 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 SPG Operating Partnership paid an
aggregate purchase price of approximately $322,000 for these acquisitions,
which included Units in the SPG Operating Partnership valued at $21,100, and
the assumption of $64,772 of mortgage indebtedness, with the remainder paid in
cash primarily using proceeds from the Credit Facility, sales of equity
securities and working capital.
 
   In 1996, the SPG Operating Partnership acquired the remaining 50% ownership
interest in two regional malls for 472,410 Units in the SPG Operating
Partnership, the assumption of $57,000 of mortgage indebtedness and $56,100 in
cash, primarily using proceeds from the Credit Facility and working capital.
 
   See also Note 7 for Joint Venture Property acquisition and disposal
activity.
 
 Development Activity
 
   Development activities are an ongoing part of the SPG Operating
Partnership's strategy to gain a competitive advantage in the retail real
estate business. During 1998, 1997 and 1996, the SPG Operating
 
                                      61
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
Partnership invested approximately $102,000, $230,000 and $169,000,
respectively on new consolidated and unconsolidated joint venture development
projects adding approximately 577,000; 3,600,000; and 3,160,000 square feet of
GLA to its portfolio. In addition, The Shops at Sunset Place, a destination-
oriented retail and entertainment project containing approximately 510,000
square feet of GLA opened in January of 1999 in South Miami, Florida.
Construction also continues on several other projects at an aggregate
construction cost of approximately $620,000, of which approximately $347,000
is the SPG Operating Partnership's share. These developments are funded
primarily with borrowings from the Credit Facility, construction loans and
working capital.
 
   In addition, the SPG Operating Partnership strives to increase
profitability and market share of the existing Properties through the
completion of strategic renovations and expansions. During 1998, 1997 and
1996, the SPG Operating Partnership invested approximately $337,000, $229,000
and $93,000, respectively on renovation and expansion of the Properties. These
projects were also funded primarily with borrowings from the Credit Facility,
construction loans and working capital.
 
 Pro Forma
 
   The following unaudited pro forma summary financial information excludes
any extraordinary items and reflects the consolidated results of operations of
the SPG Operating Partnership as if the CPI Merger and the SCA Acquisition had
occurred as of January 1, 1997, and were carried forward through December 31,
1998. Preparation of the pro forma summary information was based upon
assumptions deemed appropriate by management. The pro forma summary
information is not necessarily indicative of the results which actually would
have occurred if the CPI Merger and the SCA Acquisition had been consummated
at January 1, 1997, nor does it purport to represent the results of operations
for future periods.
 
<TABLE>
<CAPTION>
                                                        Year Ended December 31,
                                                        -----------------------
                                                           1998        1997
                                                        ----------- -----------
      <S>                                               <C>         <C>
      Revenue.......................................... $ 1,695,204 $ 1,566,821
                                                        =========== ===========
      Net income (1)...................................     273,088     300,256
                                                        =========== ===========
      Net income available to Unitholders (1)..........     191,312     225,808
                                                        =========== ===========
      Net income per Unit (1).......................... $      0.85 $      1.07
                                                        =========== ===========
      Net income per Unit--assuming dilution........... $      0.85 $      1.07
                                                        =========== ===========
      Weighted average number of Units................. 224,041,500 210,977,382
                                                        =========== ===========
      Weighted average number of Units--assuming
       dilution........................................ 224,398,649 211,361,446
                                                        =========== ===========
</TABLE>
--------
(1) Includes net gains on the sales of assets in 1998 and 1997 of $37,973 and
    $123,689, respectively, or $0.17 and $0.59 on a basic earnings per Unit
    basis, respectively.
 
5. 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
 
                                      62
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
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.
 
   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 during 1998, 1997 and 1996 was $10,567, $11,589 and
$5,831, respectively.
 
 Segment Disclosure
 
   The SPG Operating Partnership is engaged in the business of owning,
operating, managing, leasing, expanding and developing retail real estate
properties. Although the SPG Operating Partnership's regional mall portfolio
and office and mixed-use Properties are looked at internally on a divisional
basis, the chief executive officer makes resource allocation and other
operating decisions based on an evaluation of the entire portfolio. The SPG
Operating Partnership's interests in its community centers and other assets
have been aggregated with the regional malls as they have similar economic and
environmental conditions, business processes, types of customers (i.e.
tenants) and services provided. Further, the community centers, offices and
other assets each represent less than 10% and in total represent less than 15%
of the SPG Operating Partnership's total assets, revenues and earnings before
interest, taxes, depreciation and amortization.
 
 Other Investment
 
   Investments in securities classified as available for sale are reflected at
market value with the changes in market value reflected in partners' equity.
 
 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:
 
<TABLE>
<CAPTION>
                                                                December 31,
                                                              -----------------
                                                                1998     1997
                                                              -------- --------
      <S>                                                     <C>      <C>
      Deferred financing costs............................... $101,215 $ 72,348
      Leasing costs and other................................  141,090  121,060
                                                              -------- --------
                                                               242,305  193,408
      Less--accumulated amortization.........................  115,283   87,666
                                                              -------- --------
        Deferred costs, net.................................. $127,022 $105,742
                                                              ======== ========
</TABLE>
 
                                      63
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   Interest expense in the accompanying Consolidated Statements of Operations
includes amortization of deferred financing costs of $11,835, $8,338 and
$8,434, for 1998, 1997 and 1996, respectively, and has been reduced by
amortization of debt premiums and discounts of $1,465, $699 and $632 for 1998,
1997 and 1996, respectively.
 
 Revenue Recognition
 
   The SPG 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. Certain tenants
are also required to pay overage rents based on sales over a stated base
amount during the lease year. Overage rents are recognized as revenues based
on reported and estimated sales for each tenant through December 31, less the
applicable base sales amount. Differences between estimated and actual amounts
are recognized in the subsequent year.
 
   Reimbursements from tenants for real estate taxes and other recoverable
operating expenses are recognized as revenue in the period the applicable
expenditures are incurred.
 
 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 1998, 1997 and 1996 was as follows:
 
<TABLE>
<CAPTION>
                                          Balance at Provision  Accounts  Balance
                                          Beginning  for Credit Written   at End
                                           of Year     Losses     Off     of Year
                                          ---------- ---------- --------  -------
      <S>                                 <C>        <C>        <C>       <C>
      Year Ended
        December 31, 1998................  $13,804     $6,599   $(5,927)  $14,476
                                           =======     ======   =======   =======
        December 31, 1997................  $ 7,918     $5,992   $  (106)  $13,804
                                           =======     ======   =======   =======
        December 31, 1996................  $ 5,485     $3,460   $(1,027)  $ 7,918
                                           =======     ======   =======   =======
</TABLE>
 
 Income Taxes
 
   As a partnership, the allocated share of income or loss for each year is
included in the income tax returns of the partners, accordingly, no accounting
for income taxes is required in the accompanying consolidated financial
statements. State and local taxes are not material.
 
   Taxable income of the SPG Operating Partnership for the year ended December
31, 1998, is estimated to be $281,000 and was $172,943 and $164,008 for the
years ended 1997 and 1996, respectively. Reconciling differences between book
income and tax income primarily result from timing differences consisting of
(i) depreciation expense, (ii) prepaid rental income and (iii) straight-line
rent. Furthermore, the SPG Operating Partnership's share of income or loss
from the affiliated Management Company is excluded from the tax return of the
SPG Operating Partnership.
 
 Per Unit Data
 
   Effective January 1, 1998, the SPG Operating Partnership retroactively
adopted SFAS No. 128 (Earnings Per Share). Accordingly, basic earnings per
Unit is based on the weighted average number of Units outstanding during the
period and diluted earnings per Unit is based on the weighted average number
of Units outstanding combined with the incremental weighted average Units that
would have been outstanding if all dilutive potential Units would have been
converted into Units at the earliest date possible. The weighted average
number of Units
 
                                      64
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
used in the computation for 1998, 1997 and 1996 was 189,082,385; 161,022,887;
and 120,181,895, respectively. The diluted weighted average number of
equivalent Units used in the computation for 1998, 1997 and 1996 was
189,439,534; 161,406,951 and 120,317,426, respectively.
 
   Preferred Units issued and outstanding during the comparative periods did
not have a dilutive effect on earnings per Unit. Units held by limited
partners in the SPG Operating Partnership may be exchanged for paired shares
of common stock of the Companies, on a one-for-one basis in certain
circumstances. If exchanged, the paired Units would not have a dilutive
effect. The increase in weighted average Units outstanding under the diluted
method over the basic method in every period presented for the SPG Operating
Partnership is due entirely to the effect of outstanding stock options,
including 304,210 additional options issued in connection with the CPI Merger.
Basic earnings and diluted earnings were the same for all periods presented.
 
   It is the SPG Operating Partnership's policy to accrue distributions when
they are declared. The SPG Operating Partnership declared distributions in
1998 and 1997 aggregating $2.02 and $2.01 per Unit, respectively. The current
annual distribution rate is $2.02 per Unit. The following is a summary of
distributions per Unit declared in 1998 and 1997:
 
<TABLE>
<CAPTION>
                                                            For the Year Ended
                                                               December 31,
                                                            -------------------
                                                              1998      1997
                                                            --------- ---------
      <S>                                                   <C>       <C>
      Distributions per Unit:
        From book net income............................... $    1.05 $    1.08
        Representing return of capital.....................      0.97      0.93
                                                            --------- ---------
          Total distributions.............................. $    2.02 $    2.01
                                                            ========= =========
</TABLE>
 
   On a federal income tax basis, 1% of the SPG Operating Partnership's 1998
distributions represented a capital gain and 48% represented a return of
capital. In 1997, none of the distributions represented a capital gain and 35%
represented a 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 $867 and $8,553 as
of December 31, 1998 and 1997, respectively, to fund certain future capital
expenditures.
 
   Cash paid for interest, net of any amounts capitalized, during 1998, 1997
and 1996 was $397,545; $270,912; and $191,965, respectively.
 
 Noncash Transactions
 
   Accrued and unpaid distributions were $3,428 at December 31, 1998 and
represented distributions payable on the SPG Operating Partnership's Series A
Preferred Units, which are paid semiannually on March 31 and September 30 of
each year. Please refer to Notes 3, 4, 7 and 11 for additional 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.
 
                                      65
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
6. Investment Properties
 
   Investment properties consist of the following:
 
<TABLE>
<CAPTION>
                                                              December 31,
                                                         ----------------------
                                                            1998        1997
                                                         ----------- ----------
      <S>                                                <C>         <C>
      Land.............................................. $ 2,066,461 $1,253,953
      Buildings and improvements........................   9,537,310  5,560,112
                                                         ----------- ----------
      Total land, buildings and improvements............  11,603,771  6,814,065
      Furniture, fixtures and equipment.................      59,089     53,289
                                                         ----------- ----------
      Investment properties at cost.....................  11,662,860  6,867,354
      Less--accumulated depreciation....................     709,114    461,792
                                                         ----------- ----------
      Investment properties at cost, net................ $10,953,746 $6,405,562
                                                         =========== ==========
</TABLE>
 
   Investment properties includes $184,799 and $158,609 of construction in
progress at December 31, 1998 and 1997, respectively.
 
7. Investment in Partnerships and Joint Ventures
 
 Joint Venture Property Acquisitions and Dispositions
 
   On February 27, 1998, the SPG Operating Partnership, in a joint venture
partnership with The Macerich Company ("Macerich"), acquired a portfolio of
twelve regional malls and two community centers (the "IBM Properties")
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 SPG
Operating Partnership and Macerich, as noncontrolling 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 and one community center. The
SPG Operating Partnership funded its share of the cash portion of the purchase
price using borrowings from an interim $300,000 unsecured revolving credit
facility, which was subsequently retired using borrowings from the Credit
Facility.
 
   In March 1998, the SPG Operating Partnership transferred its 50% ownership
interest in The Source, an approximately 730,000 square-foot regional mall, to
a newly formed limited partnership in which it has a 50% ownership interest,
with the result that the SPG Operating Partnership now owns an indirect
noncontrolling 25% ownership interest in The Source. In connection with this
transaction, the SPG Operating Partnership's partner in the newly formed
limited partnership is entitled to a preferred return of 8% on its initial
capital contribution, a portion of which was distributed to the SPG Operating
Partnership. The SPG Operating Partnership applied the distribution against
its investment in The Source.
 
   In August 1998, the SPG Operating Partnership admitted an additional
partner into the partnership which owns The Shops at Sunset Place for $35,200,
which was distributed to the SPG Operating Partnership. The SPG Operating
Partnership now holds a 37.5% noncontrolling interest in this Property, which
opened in January 1999. The SPG Operating Partnership applied the distribution
against its investment in the Property.
 
                                      66
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
 Joint Venture Property Summary Financial Information
 
   Summary financial information of partnerships and joint ventures accounted
for using the equity method and a summary of the SPG Operating Partnership's
investment in and share of income from such partnerships and joint ventures
follows.
<TABLE>
<CAPTION>
                                                              December 31,
                                                          ---------------------
                                                             1998       1997
                                                          ---------- ----------
   <S>                                                    <C>        <C>
   BALANCE SHEETS
   Assets:
   Investment properties at cost, net.................... $4,265,022 $2,734,686
   Cash and cash equivalents.............................    171,553    101,582
   Tenant receivables....................................    140,579     87,008
   Other assets..........................................    126,112     71,873
                                                          ---------- ----------
       Total assets...................................... $4,703,266 $2,995,149
                                                          ========== ==========
   Liabilities and Partners' Equity:
   Mortgages and other notes payable..................... $2,861,589 $1,888,512
   Accounts payable, accrued expenses and other
    liabilities..........................................    223,631    212,543
                                                          ---------- ----------
       Total liabilities.................................  3,085,220  2,101,055
   Partners' equity......................................  1,618,046    894,094
                                                          ---------- ----------
       Total liabilities and partners' equity............ $4,703,266 $2,995,149
                                                          ========== ==========
   The SPG Operating Partnership's Share of:
     Total assets........................................ $1,905,459 $1,009,691
                                                          ========== ==========
   Partners' equity...................................... $  565,496 $  227,458
   Add: Excess Investment................................    708,616    364,119
                                                          ---------- ----------
   The SPG Operating Partnership's Net Investment in
    Joint Ventures....................................... $1,274,112 $  591,577
                                                          ========== ==========
 
</TABLE>
 
<TABLE>
<CAPTION>
                                                      For the Year Ended
                                                         December 31,
                                                  ----------------------------
                                                    1998      1997      1996
                                                  --------  --------  --------
   <S>                                            <C>       <C>       <C>
   STATEMENTS OF OPERATIONS
   Revenue:
   Minimum rent.................................. $442,530  $256,100  $144,166
   Overage rent..................................   18,465    10,510     7,872
   Tenant reimbursements.........................  204,936   120,380    73,492
   Other income..................................   30,564    19,364    11,178
                                                  --------  --------  --------
       Total revenue.............................  696,495   406,354   236,708
   Operating Expenses:
   Operating expenses and other..................  245,927   144,256    88,678
   Depreciation and amortization.................  129,681    85,423    50,328
                                                  --------  --------  --------
       Total operating expenses..................  375,608   229,679   139,006
                                                  --------  --------  --------
   Operating Income..............................  320,887   176,675    97,702
   Interest Expense..............................  176,669    96,675    48,918
   Extraordinary Items--Debt Extinguishments.....  (11,058)   (1,925)   (1,314)
                                                  --------  --------  --------
   Net Income.................................... $133,160  $ 78,075  $ 47,470
                                                  ========  ========  ========
   Third-Party Investors' Share of Net Income....   88,242    55,507    38,283
                                                  --------  --------  --------
   The SPG Operating Partnership's Share of Net
    Income....................................... $ 44,918  $ 22,568  $  9,187
   Amortization of Excess Investment.............   22,625    13,878     5,127
                                                  --------  --------  --------
   Income from Unconsolidated Entities........... $ 22,293  $  8,690  $  4,060
                                                  ========  ========  ========
</TABLE>
 
                                      67
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   As of December 31, 1998 and 1997, the unamortized excess of the SPG
Operating Partnership's investment over its share of the equity in the
underlying net assets of the partnerships and joint ventures ("Excess
Investment") was $708,616 and $364,119, respectively. This Excess Investment,
which resulted primarily from the CPI Merger and the DRC Merger, is being
amortized generally over the life of the related Properties. Amortization
included in income from unconsolidated entities for the years ended December
31, 1998, 1997 and 1996 was $22,625, $13,878 and $5,127, respectively.
 
   The net income or net loss for each Joint Venture Property 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.
 
8. Investment in Management Company
 
   The SPG Operating Partnership holds 80% of the outstanding common stock, 5%
of the outstanding voting common stock, and all of the 8% cumulative 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. Because the
SPG 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. The Management
Company, including its consolidated subsidiaries, provides management,
leasing, development, project management, accounting, legal, marketing and
management information systems services and property damage and general
liability insurance coverage to certain Portfolio Properties. These services,
excluding insurance coverage, are also provided to Melvin Simon & Associates,
Inc. ("MSA"), and certain other nonowned properties for a fee. The SPG
Operating Partnership incurred costs of $145,655, $85,229 and $30,949 on
consolidated Properties, related to services provided by the Management
Company and its affiliates in 1998, 1997 and 1996, respectively. Fees for
services provided by the Management Company to MSA were $3,301, $3,073 and
$4,000 for the years ended December 31, 1998, 1997 and 1996, respectively.
 
   The SPG Operating Partnership manages substantially all Wholly-Owned
Properties and 26 Properties owned as joint venture interests, and,
accordingly, it reimburses a subsidiary of the Management Company for costs
incurred relating to such Properties, including management, leasing,
development, accounting, legal, marketing, and management information systems.
Substantially all employees of the SPG Operating Partnership (other than
direct field personnel) are employed by such Management Company subsidiary.
The Management Company records costs net of amounts reimbursed by the SPG
Operating Partnership. Common costs are allocated based on payroll and related
costs using assumptions that management believes are reasonable. The SPG
Operating Partnership's share of allocated common costs was $42,444, $35,341
and $29,262 for 1998, 1997 and 1996, respectively.
 
   At December 31, 1998 and 1997, total notes receivable and advances due from
the Management Company and its consolidated affiliates were $115,378 and
$93,809, respectively. Unpaid interest income receivable from the Management
Company at December 31, 1998 and 1997, was $722 and $485, respectively.
Accrued and unpaid preferred dividends due from the Management Company at
December 31, 1998 and 1997 were $117 and $0, respectively. Amounts payable by
the SPG Operating Partnership under the cost-sharing arrangement and
management contracts were $4,968 and $1,725 at December 31, 1998 and 1997,
respectively, and are reflected in accounts payable and accrued expenses in
the SPG Operating Partnership's accompanying Consolidated Balance Sheets.
 
                                      68
<PAGE>
 
                           SIMON PROPERTY GROUP, L.P.
 
                   NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   Summarized consolidated financial information of the Management Company and
a summary of the SPG Operating Partnership's investment in and share of income
from the Management Company follows.
 
<TABLE>
<CAPTION>
                                                                 December 31,
                                                               -----------------
                                                                 1998     1997
                                                               -------- --------
   <S>                                                         <C>      <C>
   BALANCE SHEET DATA:
   Total assets..............................................  $198,952 $137,750
   Notes payable to the SPG Operating Partnership at 11%, due
    2008, and advances.......................................   115,378   93,809
   Shareholders' equity......................................     7,279      482
   The SPG Operating Partnership's Share of:
     Total assets............................................  $184,273 $128,596
                                                               ======== ========
     Shareholders' equity....................................  $ 10,037 $  3,192
                                                               ======== ========
 
</TABLE>
 
<TABLE>
<CAPTION>
                                                           For the Year Ended
                                                              December 31,
                                                        ------------------------
                                                          1998    1997    1996
                                                        -------- ------- -------
   <S>                                                  <C>      <C>     <C>
   OPERATING DATA:
   Total revenue......................................  $100,349 $85,542 $78,665
   Operating Income...................................     8,067  13,766   9,073
                                                        -------- ------- -------
   Net Income Available for Common Shareholders.......  $  6,667 $12,366 $ 7,673
                                                        ======== ======= =======
   The SPG Operating Partnership's Share of Net Income
    after intercompany profit elimination.............  $  5,852 $10,486 $ 5,485
                                                        ======== ======= =======
</TABLE>
 
9. Indebtedness
 
   The SPG Operating Partnership's mortgages and other notes payable consist of
the following:
 
<TABLE>
<CAPTION>
                                                               December 31,
                                                           ---------------------
                                                              1998       1997
                                                           ---------- ----------
Fixed-Rate Debt
---------------
<S>                                                        <C>        <C>
Mortgages and other notes, including $1,917 and $888 net
 premiums, respectively..................................  $2,290,902 $2,006,552
Unsecured public notes, including $7,278 net premium and
 $4,453 net discount, respectively.......................   2,617,277    905,547
Mandatory Par Put Remarketed Securities, including $5,273
 premium.................................................     205,273        --
Medium-term notes, net of $714 and $771 discounts,
 respectively............................................     279,286    279,229
Commercial mortgage pass-through certificates............     175,000    175,000
6 3/4% Putable Asset Trust Securities, including $1,111
 and $1,297 premiums, respectively.......................     101,111    101,297
                                                           ---------- ----------
  Total fixed-rate debt..................................   5,668,849  3,467,625
 
<CAPTION>
Variable-Rate Debt
------------------
<S>                                                        <C>        <C>
Mortgages and other notes, including $1,275 and $696
 premiums, respectively..................................  $  352,532 $  451,820
Credit Facility..........................................     368,000    952,000
Merger Facility..........................................   1,400,000        --
Unsecured term loans.....................................     133,000    133,000
Commercial mortgage pass-through certificates............      50,000     50,000
Construction loan........................................         --      23,545
                                                           ---------- ----------
  Total variable-rate debt...............................   2,303,532  1,610,365
                                                           ---------- ----------
Total mortgages and other notes payable, net.............  $7,972,381 $5,077,990
                                                           ========== ==========
</TABLE>
 
                                       69
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
 Fixed-Rate Debt
 
   Mortgages and Other Notes. The fixed-rate mortgage loans bear interest
ranging from 6.57% to 10.00% (weighted average of 7.55% at December 31, 1998),
require monthly payments of principal and/or interest and have various due
dates through 2027 (average maturity of 5.9 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 $706,042. 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 and Mandatory Par Put Remarketed Securities. In connection
with the CPI Merger, RPT, a REIT and the 99.999% owned subsidiary of the SPG
Operating Partnership, took title to substantially all of the CPI assets and
assumed $825,000 of unsecured notes (the "CPI Notes"), as described in Note 3.
The CPI Notes are structurally senior in right of payment to holders of other
SPG Operating Partnership unsecured notes to the extent of the assets and
related cash flow of RPT only, with over 99.999% of the excess cash flow plus
any capital event transactions available for the other SPG Operating
Partnership unsecured notes. The CPI Notes pay interest semiannually at rates
ranging from 7.05% to 9.00% (weighted average of 8.03%), and have various due
dates through 2016 (average maturity of 9.1 years). The CPI Notes contain
leverage ratios, annual real property appraisal requirements, debt service
coverage ratios and minimum net worth ratios.
 
   The CPI Notes together with existing SPG Operating Partnership
nonconvertible investment-grade unsecured debt securities aggregate $2,617,277
(the "Notes"). In addition, the SPG Operating Partnership has outstanding
$205,273 of 7.00% Mandatory Par Put Remarketed Securities ("MOPPRS") at
December 31, 1998. The Notes pay interest semiannually at rates ranging from
6.63% to 9.0% (weighted average of 7.25%), and have various due dates through
2018 (average maturity of 8.3 years). The MOPPRS are due June 15, 2028, and
are subject to redemption on June 16, 2008. The premium received relating to
the MOPPRS of approximately $5,302 is being amortized over the life of the
debt securities. The MOPPRS and certain of the Notes are guaranteed by the SPG
Operating Partnership and contain leverage ratios and minimum EBITDA and
unencumbered EBITDA ratios.
 
   Additionally, on February 4, 1999, the SPG Operating Partnership completed
the sale of another $600,000 of senior unsecured notes. These notes include
two $300,000 tranches. The first tranche bears interest at 6.75% and matures
on February 4, 2004 and the second tranche bears interest at 7.125% and
matures on February 4, 2009. The SPG Operating Partnership used the net
proceeds of approximately $594,000 to retire the $450,000 initial tranche of
the Merger Facility and to pay $142,000 on the outstanding balance of the
Credit Facility.
 
   Medium-Term Notes. On May 15, 1997, the SPG Operating Partnership
established a Medium-Term Note ("MTN") program. On June 24, 1997, the SPG
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 SPG Operating Partnership issued the
remaining $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.
 
   Commercial Mortgage Pass-Through Certificates. The SPG Operating
Partnership has outstanding a series of six classes of commercial mortgage
pass-through certificates cross-collateralized by seven 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%.
 
                                      70
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   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. The
net discount relating to the PATS is being amortized over their remaining
life.
 
 Variable-Rate Debt
 
   Mortgages and Other Notes. The variable-rate mortgage loans and other notes
bear interest ranging from 5.61% to 7.74% (weighted average of 6.39% at
December 31, 1998) and are due at various dates through 2004 (average maturity
of 3.3 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 Credit Facility is a $1,250,000 unsecured revolving
credit facility which initially matures in September of 1999, with a one-year
extension available at the SPG Operating Partnership's option. The Credit
Facility bears interest at LIBOR plus 65 basis points, with an additional 15
basis point facility fee on the entire $1,250,000. The maximum and average
amounts outstanding during 1998 under the Credit Facility were $992,000 and
$583,668, respectively. The Credit Facility is primarily used for funding
acquisition, renovation and expansion and predevelopment opportunities. At
December 31, 1998, the Credit Facility had an effective interest rate of 6.2%,
with $880,800 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.
 
   The Merger Facility. In conjunction with the CPI Merger, the SPG Operating
Partnership and SPG, as co-borrowers, closed a $1,400,000 medium term
unsecured bridge loan (the "Merger Facility"). The Merger Facility bears
interest at a base rate of LIBOR plus 65 basis points and will mature at the
following intervals (i) $450,000 on June 24, 1999, (ii) $450,000 on March 24,
2000 and (iii) $500,000 on September 24, 2000. As described above, in February
1999 the initial $450,000 maturity on the Merger Facility was retired with
proceeds from a $600,000 unsecured debt offering. The Merger Facility is
subject to covenants and conditions substantially identical to those of the
Credit Facility. The SPG Operating Partnership drew the entire $1,400,000
available on the Merger Facility along with $237,000 on the Credit Facility to
pay for the cash portion of the dividend declared in conjunction with the CPI
Merger, as well as certain other costs associated with the CPI Merger.
Financing costs of $9,456, which were incurred to obtain the Merger Facility,
are being amortized over 18 months.
 
   Unsecured Term Loans. The SPG Operating Partnership has two unsecured term
loans outstanding at December 31, 1998, totaling $133,000, which were obtained
to retire mortgage indebtedness. These term loans bear interest at LIBOR plus
0.65% and mature on January 31, 2000. The SPG Operating Partnership has an
interest-rate protection agreement covering one of these term loans in the
amount of $63,000, which effectively fixes the interest rate at 6.14%.
 
 Debt Maturity and Other
 
   As of December 31, 1998, scheduled principal repayments on indebtedness
were as follows:
 
<TABLE>
           <S>                                     <C>
           1999................................... $1,030,354
           2000...................................  1,464,646
           2001...................................    259,391
           2002...................................    835,067
           2003...................................    722,514
           Thereafter.............................  3,644,269
                                                   ----------
           Total principal maturities.............  7,956,241
           Net unamortized debt premiums..........     16,140
                                                   ----------
           Total mortgages and other notes
            payable............................... $7,972,381
                                                   ==========
</TABLE>
 
                                      71
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   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.
 
   Net extraordinary gains (losses) resulting from the early extinguishment,
refinancing or forgiveness of debt of $7,146, $58 and ($3,521) were incurred
for the years ended December 31, 1998, 1997 and 1996, respectively.
 
   The Joint Venture Properties have $2,861,589 and $1,888,512 of mortgages
and other notes payable at December 31, 1998 and 1997, respectively. The SPG
Operating Partnership's share of this debt was $1,227,044 and $770,776 at
December 31, 1998 and 1997, respectively. This debt, including a premium of
$20,868 in 1998, becomes due in installments over various terms extending
through 2009, with interest rates ranging from 5.44% to 9.75% (weighted
average rate of 6.99% at December 31, 1998). The debt, excluding the $20,868
premium, matures $17,270 in 1999; $220,961 in 2000; $9,622 in 2001; $265,603
in 2002; $435,298 in 2003 and $1,891,967 thereafter.
 
 Interest Rate Protection Agreements
 
   The SPG 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. Swap arrangements, which effectively fix the SPG Operating
Partnership's interest rate on the respective borrowings, have been entered
into for $550,000 principal amount of consolidated debt. Cap arrangements,
which effectively limit the amount by which variable interest rates may rise,
have been entered into for $387,999 principal amount of consolidated debt and
cap LIBOR at rates ranging from 5.49% to 16.765% through the related debt's
maturity. Costs of the caps ($1,338) are amortized over the life of the
agreements. The unamortized balance of the cap arrangements was $429 and
$2,006 as of December 31, 1998 and 1997, respectively. The SPG Operating
Partnership's hedging activity as a result of interest swaps and caps resulted
in net interest savings of $263, $1,586 and $2,165 for the years ended
December 31, 1998, 1997 and 1996, respectively. This did not materially impact
the SPG 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 $6,100,000 and $3,900,000 at December 31, 1998 and
1997, respectively. The fair value of the interest rate protection agreements
at December 31, 1998 and 1997, was ($7,213) and ($692), respectively. At
December 31, 1998 and 1997, the estimated discount rates were 6.70% and 6.66%,
respectively.
 
10. Rentals under Operating Leases
 
   The SPG 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, 1998, are
as follows:
 
<TABLE>
           <S>                                     <C>
           1999................................... $  910,451
           2000...................................    819,907
           2001...................................    756,743
           2002...................................    696,153
           2003...................................    618,304
           Thereafter.............................  2,242,104
                                                   ----------
                                                   $6,043,662
                                                   ==========
</TABLE>
 
 
                                      72
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
   Approximately 2.8% of future minimum rents to be received are attributable
to leases with JCPenney Company, Inc., an affiliate of a limited partner in
the SPG Operating Partnership.
 
11. Partners Equity
 
 Unit Issuances
 
   During 1998, SPG Properties issued 2,957,335 shares of its common stock in
offerings generating combined net proceeds of approximately $91,399. The net
proceeds were contributed to the SPG Operating Partnership in exchange for a
like number of Units. The SPG Operating Partnership used the net proceeds for
general working capital purposes.
 
   On November 11, 1997, the SPG Operating Partnership issued 3,809,523 Units
to SPG Properties upon the conversion of all of the outstanding 8.125% Series
A Preferred Units.
 
   On September 19, 1997, SPG Properties issued 4,500,000 shares of its common
stock in a public offering. SPG contributed the net proceeds of approximately
$146,800 to the SPG Operating Partnership in exchange for an equal number of
Units. The SPG Operating Partnership used the net proceeds to retire a portion
of the outstanding balance on the Credit Facility.
 
   As described in Notes 3 and 4, respectively, the SPG Operating Partnership
issued 47,790,550 Units and 5,053,580 preferred Units to SPG in connection
with the CPI Merger, and issued 37,877,965 Units to SD Property Group, Inc.
and 23,219,012 Units to limited partners in connection with the DRC Merger.
 
 Preferred Units
 
   Preferred Units in the SPG Operating Partnership include four separate
series, which pay preferred distributions with economic terms that are
substantially the same as four series of preferred stock of general partners
of the SPG Operating Partnership described below. The first two series of
preferred Units were issued to SPG Properties, Inc. prior to the CPI Merger,
in exchange for the net proceeds from the sales of two series of preferred
stock in SPG Properties, Inc. The latter two series of preferred Units
described below result from the CPI Merger, described in Note 3.
 
   On July 9, 1997, SPG Properties, Inc. sold 3,000,000 shares of its 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. Management 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 SPG
Properties, Inc. 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 SPG Properties, Inc., 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 SPG
Properties, Inc. SPG Properties, Inc. contributed the net proceeds of this
offering of approximately $146,000 to the SPG Operating Partnership in
exchange for preferred Units, the economic terms of which are substantially
identical to the Series C Preferred Shares.
 
   On September 27, 1996, SPG Properties, Inc. 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. SPG
Properties, Inc. 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 SPG Properties, Inc., which may
 
                                      73
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
include other series of preferred shares. SPG Properties, Inc. contributed the
proceeds to the SPG Operating Partnership in exchange for preferred Units. The
SPG Operating Partnership pays a preferred distribution to SPG Properties,
Inc. equal to the dividends paid on the preferred stock.
 
   SPG has 209,249 shares of 6.50% Series A Convertible Preferred Stock
outstanding. Each share of Series A Convertible Preferred Stock is convertible
into 37.995 paired shares of common stock of the Companies, subject to
adjustment under certain circumstances including (i) a subdivision or
combination of shares of common stock of the Companies, (ii) a declaration of
a distribution of additional shares of common stock of the Companies,
issuances of rights or warrants by the Companies and (iii) any consolidation
or merger, which the Companies are a part of or a sale or conveyance of all or
substantially all of the assets of the Companies to another person or any
statutory exchange of securities with another person. The Series A Convertible
Preferred Stock is not redeemable, except as needed to maintain or bring the
direct or indirect ownership of the capital stock of SPG into conformity with
REIT requirements.
 
   In addition, SPG has 4,844,331 shares of 6.50% Series B Convertible
Preferred Stock outstanding. Each share of Series B Convertible Preferred
Stock is convertible into 2.586 paired shares of common stock of the
Companies, subject to adjustment under circumstances identical to those of the
Series A Preferred Stock described above. The Companies may redeem the Series
B Preferred Stock on or after September 24, 2003 at a price beginning at 105%
of the liquidation preference plus accrued dividends and declining to 100% of
the liquidation preference plus accrued dividends any time on or after
September 24, 2008.
 
 Notes Receivable from Former CPI Shareholders
 
   Notes receivable of $27,168 from former CPI shareholders, which result from
securities issued under CPI's executive compensation program and were assumed
in connection with the CPI Merger, are reflected as a deduction from partners'
equity in the accompanying consolidated financial statements. Certain of such
notes totaling $9,519 are interest bearing at rates ranging from 5.31% to
6.00% and become due during the period 2000 to 2002. The remainder of the
notes do not bear interest and become due at the time the underlying shares
are sold.
 
 The Simon Property Group 1998 Stock Incentive Plan
 
   At the time of the CPI Merger, SPG and the SPG Operating Partnership
adopted The Simon Property Group 1998 Stock Incentive Plan (the "1998 Plan").
The 1998 Plan provides for the grant of equity-based awards during the ten-
year period following its adoption, in the form of options to purchase paired
shares of the Companies' common stock ("Options"), stock appreciation rights
("SARs"), restricted stock grants and performance unit awards (collectively,
"Awards"). Options may be granted which are qualified as "incentive stock
options" within the meaning of Section 422 of the Code and Options which are
not so qualified.
 
   The primary purpose of the 1998 Plan is to attract and retain the best
available eligible officers, directors, key employees, advisors and
consultants. The Companies have reserved for issuance 6,300,000 paired shares
of common stock under the 1998 Plan, which includes 2,230,875 shares reserved
for the exercise of options granted and grants of restricted stock allocated
under the previously existing Stock Incentive Program and DRC Plan, which are
described below. If stock options granted in connection with the 1998 Plan are
exercised at any time or from time to time, the partnership agreement requires
the Companies to sell to the Operating Partnerships, at fair market value,
paired shares of the Companies' common stock sufficient to satisfy the
exercised stock options. The Companies are also obligated to purchase paired
Units for cash in an amount equal to the fair market value of the paired
shares sold to the SPG Operating Partnership.
 
                                      74
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   Administration. The 1998 Plan is administered by SPG's Compensation
Committee (the "Committee"). The Committee, in its sole discretion, determines
which eligible individuals may participate and the type, extent and terms of
the Awards to be granted to them. In addition, the Committee interprets the
1998 Plan and makes all other determinations deemed advisable for the
administration of the 1998 Plan. Options granted to employees ("Employee
Options") become exercisable over the period determined by the Committee. The
exercise price of an Employee Option may not be less than the fair market
value of the shares of the common stock on the date of grant. Currently,
Employee Options outstanding 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 Employee Options
expire ten years from the date of grant.
 
   Director Options. The 1998 Plan provides for automatic grants of Options
("Director Options") to directors of the Companies who are not also employees
of the SPG Operating Partnership or its "affiliates" ("Eligible Directors").
Under the 1998 Plan, each Eligible Director is automatically granted Director
Options to purchase 5,000 shares of the Companies' common stock upon the
director's initial election to the Board of Directors. Eligible Directors will
also receive Director Options to purchase 3,000 shares of common stock
multiplied by the number of calendar years that have elapsed since such
person's last election to the Board of Directors upon each reelection of the
Eligible Director to the Board of Directors. The exercise price of the options
is equal to 100% of the fair market value of the Companies' common stock on
the date of grant. Director Options become vested and exercisable on the first
anniversary of the date of grant or at such earlier time as a "change in
control" of the Companies (as defined in the 1998 Plan). Director Options will
terminate 30 days after the optionee ceases to be a member of the Board of
Directors.
 
   Restricted Stock. In October 1994, under a previous stock incentive
program, the Compensation Committee approved a five-year stock incentive
program (the "Stock Incentive Program"), under which shares of restricted
common stock of SPG were granted to certain employees at no cost to those
employees if SPG attained certain growth targets established by the
Compensation Committee from time to time. In addition, in 1994, DRC
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 also based upon growth targets established by their
Compensation Committee. At the time of the DRC Merger, SPG 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. Both the Stock Incentive Program and
the DRC Plan provided for a percentage of each of these restricted stock
grants to be earned and awarded each year. 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.
 
   The terms and conditions concerning vesting of the restricted stock grant
to the Companies' President and Chief Operating Officer are different from
those established by the DRC Plan and are specifically set forth in the
employment contract with 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 1998,
1997 and 1996, a total of 495,131; 448,753 and 200,030 shares of common stock,
respectively, net of forfeitures, were deemed earned and awarded under the
Stock Incentive Program and the DRC Plan. Through December 31, 1998, a total
of 1,287,225 shares of common stock, net of forfeitures, were
 
                                      75
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
deemed earned and awarded under these programs. Approximately $9,463, $5,386
and $2,084 relating to these programs were amortized in 1998, 1997 and 1996,
respectively. The cost of restricted stock grants, which is based upon the
stock's fair market value at the time such stock is earned, awarded and
issued, is charged to partners' equity and subsequently amortized against
earnings of the SPG Operating Partnership over the vesting period.
 
   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. SPG has elected to account
for stock-based compensation programs using the intrinsic value method
consistent with existing accounting policies. SPG granted 5,000 and 380,000
options during April 1998 and September 1998, respectively. The options vest
over a three-year period. The fair value at date of grant for options granted
during 1998 was $6.19 and $7.25 per option for the April and September grants,
respectively. The fair value at the date of grant for options granted during
the years ended December 31, 1997 and 1996 was $3.18 and $2.13 per option,
respectively. 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 of the options at the date of grant was estimated using the
Black-Scholes option pricing model with the following assumptions:
 
<TABLE>
<CAPTION>
                                                           December 31,
                                                  ------------------------------
                                                      1998       1997     1996
                                                  ------------ -------- --------
      <S>                                         <C>          <C>      <C>
      Expected Volatility........................ 30.83-41.79%   17.63%   17.48%
      Risk-Free Interest Rate....................   4.64-5.68%    6.82%    6.63%
      Dividend Yield.............................   6.24-6.52%     6.9%     7.5%
      Expected Life..............................     10 years 10 years 10 years
</TABLE>
 
   The weighted average remaining contract life for options outstanding as of
December 31, 1998 was 6.1 years.
 
                                      76
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   Information relating to the Options from January 1, 1996 through December
31, 1998 is as follows:
 
<TABLE>
<CAPTION>
                              Director Options          Employee Options
                            ---------------------    -----------------------
                                     Option Price               Option Price
                            Options   per Share       Options    per Share
                            -------  ------------    ---------  ------------
   <S>                      <C>      <C>             <C>        <C>
   Shares under option at
    December 31, 1995...... 55,000   $22.25-27.00    2,014,134  $22.25-25.25
                            ------   ------------    ---------  ------------
   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
    December 31, 1996...... 85,080   $   15-27.38    1,622,983  $22.25-25.25
                            ------   ------------    ---------  ------------
   Granted.................  9,000          29.31          --            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
    December 31, 1997...... 86,080   $   15-27.38    1,247,597  $22.25-25.25
                            ------   ------------    ---------  ------------
   Granted.................    --             N/A      385,000         30.40(1)
   CPI Options Acquired....    --             N/A      304,210         25.48(1)
   Exercised............... (8,000)         26.27(1)   (38,149)        23.71(1)
   Forfeited............... (3,000)         29.31       (4,750)        25.25
                            ------   ------------    ---------  ------------
   Shares under option at
    December 31, 1998...... 75,080   $      24.11(1) 1,893,908  $      24.82(1)
                            ======   ============    =========  ============
   Options exercisable at
    December 31, 1998...... 75,080   $      24.11(1) 1,508,908  $      23.39(1)
                            ======   ============    =========  ============
</TABLE>
--------
(1) Represents the weighted average price.
 
 Exchange Rights
 
   The former limited partners in Old SPG, LP had the right at any time after
December 1994 to exchange all or any portion of their Units for shares of
common stock of Old SPG on a one-for-one basis or cash, as selected by Old
SPG's Board of Directors. If Old SPG had selected to use cash, Old SPG would
have caused Old SPG, LP to redeem the Units. The amount of cash to be paid if
the exchange right was exercised and the cash option was selected would have
been based on the trading price of Old SPG's common stock at that time. In the
periods when the SPG Operating Partnership did not control whether cash would
be used to settle the limited partners' exchange rights, the limited partners'
equity interest was excluded from partners' equity and was reflected in the
consolidated balance sheet at redemption value.
 
   In connection with the DRC Merger, the SPG Operating Partnership agreement
was amended eliminating the exchange right provision. However, the limited
partners in Old SPG, LP exchanged their interest for Units in the SPG
Operating Partnership. The SPG Operating Partnership extended rights to its
limited partners similar to the rights previously held by the limited partners
of Old SPG, LP. However, on November 13, 1996, an agreement was reached
between Old SPG and the SPG Operating Partnership which restricted Old SPG's
ability to cause the SPG Operating Partnership to redeem for cash the limited
partners' Units without contributing cash to the SPG Operating Partnership as
partners' equity sufficient to effect the redemption. If sufficient cash is
not contributed, Old SPG will be deemed to have elected to acquire the limited
partners' Units for shares of Old SPG's common stock. In connection with the
CPI Merger, SPG became the successor to Old SPG in such agreement. As a result
of these arrangements, the limited partners' equity interest in the SPG
Operating Partnership has been included as partners' equity at historical
carrying value. Previous adjustments to exclude limited partners' equity
interest from partners' equity have been reversed.
 
                                      77
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
   The SPG Operating Partnership has the right to issue Units and Preferred
Units under certain circumstances. As of December 31, 1998, SPG has reserved
64,182,157 shares of common stock for issuance upon the exchange of Units.
 
12. Employee Benefit Plans
 
   The SPG Operating Partnership maintains 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 SPG Operating
Partnership contributed $2,581, $2,727 and $2,350 to the plans in 1998, 1997
and 1996, respectively.
 
   Except for the 401(k) plan, the SPG Operating Partnership offers no other
postretirement or postemployment benefits to its employees.
 
13. Commitments and Contingencies
 
 Litigation
 
   Richard E. Jacobs, et al. v. Simon DeBartolo Group, L.P. On September 3,
1998, a complaint was filed in the Court of Common Pleas in Cuyahoga County,
Ohio, captioned Richard E. Jacobs, et al. v. Simon DeBartolo Group, L.P. The
plaintiffs are all principals or affiliates of The Richard E. Jacobs Group,
Inc. ("Jacobs"). The plaintiffs allege in their complaint that the SPG
Operating Partnership engaged in malicious prosecution, abuse of process,
defamation, libel, injurious falsehood/unlawful disparagement, deceptive trade
practices under Ohio law, tortious interference and unfair competition in
connection with the SPG Operating Partnership's acquisition by tender offer of
shares in RPT, a Massachusetts business trust, and certain litigation
instituted in September, 1997, by the SPG Operating Partnership against Jacobs
in federal district court in New York, wherein the SPG Operating Partnership
alleged that Jacobs and other parties had engaged, or were engaging in
activity which violated Section 10(b) of the Securities Exchange Act of 1934,
as well as certain rules promulgated thereunder. Plaintiffs in the Ohio action
are seeking compensatory damages in excess of $200,000, punitive damages and
reimbursement for fees and expenses. It is difficult to predict the ultimate
outcome of this action and there can be no assurance that the SPG Operating
Partnership will receive a favorable verdict. Based upon the information known
at this time, in the opinion of management, it is not expected that this
action will have a material adverse effect on the SPG Operating Partnership.
 
   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 indirect 99%-owned subsidiary
of SPG, and DeBartolo Properties Management, Inc., a subsidiary of the
Management Company, and the plaintiffs are 27 former employees of the
defendants. In the complaint, the plaintiffs alleged that they were recipients
of deferred stock grants under the 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 paired shares of common stock of the Companies 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
 
                                      78
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
damages. The complaint was served on the defendants on October 28, 1996. The
plaintiffs and SPG each filed motions for summary judgment. On October 31,
1997, the Court entered a judgment in favor of SPG granting SPG's motion for
summary judgment. The plaintiffs have appealed this judgment and the matter is
pending. While it is difficult to predict the ultimate outcome of this action,
based on the information known to date, it is not expected that this action
will have a material adverse effect on SPG or the SPG Operating Partnership.
 
   Roel Vento et al v. Tom Taylor et al. An affiliate of SPG 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, tortious interference with contract and civil conspiracy
arising out of the sale of a business operating under a temporary license
agreement at Valle Vista Mall in Harlingen, Texas. SPG is seeking to overturn
the award and has appealed the verdict. SPG's appeal is pending. Although
management is optimistic that SPG 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 SPG or the SPG Operating Partnership.
 
   The SPG Operating Partnership 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 SPG Operating Partnership's financial
position or results of operations.
 
 Lease Commitments
 
   As of December 31, 1998, a total of 37 of the Wholly-Owned and Minority
Interest Properties are subject to ground leases. The termination dates of
these ground leases range from 1999 to 2087. These ground leases generally
require payments by the SPG 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 SPG Operating Partnership for the years ended
December 31, 1998, 1997 and 1996, was $13,618, $10,511 and $8,506,
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:
 
<TABLE>
           <S>                                       <C>
           1999..................................... $  7,871
           2000.....................................    7,934
           2001.....................................    8,033
           2002.....................................    8,313
           2003.....................................    8,320
           Thereafter...............................  499,664
                                                     --------
                                                     $540,135
                                                     ========
</TABLE>
 
 Environmental Matters
 
   Nearly all of the Properties have been subjected to Phase I or similar
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 SPG Operating Partnership'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.
 
                                      79
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
14. Related Party Transactions
 
   In preparation for the CPI Merger, on July 31, 1998, CPI, with assistance
from the SPG Operating Partnership, completed the sale of the General Motors
Building in New York, New York for approximately $800,000. The SPG Operating
Partnership and certain third parties each received a $2,500 fee from CPI in
connection with the sale.
 
15. New Accounting Pronouncement
 
   On June 15, 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities. The Statement establishes accounting and reporting standards
requiring that every derivative instrument (including certain derivative
instruments embedded in other contracts) be recorded in the balance sheet as
either an asset or liability measured at its fair value. The Statement
requires that changes in the derivative's fair value be recognized currently
in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and
requires that a company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting.
 
   Statement 133 will be effective for the SPG Operating Partnership beginning
with the 1999 fiscal year and may not be applied retroactively. Management
does not expect the impact of Statement 133 to be material to the financial
statements. However, the Statement could increase volatility in earnings and
other comprehensive income.
 
   On April 3, 1998 the Accounting Standards Executive Committee issued
Statement of Position 98-5 ("SOP 98-5"), Reporting on the Costs of Start-Up
Activities, which is effective for fiscal years beginning after December 15,
1998. SOP 98-5 states that costs of start-up activities, including
organization costs, should be expensed as incurred. Management does not expect
the impact of SOP 98-5 to be material to the financial statements.
 
                                      80
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
 
16. Quarterly Financial Data (Unaudited)
 
   Summarized quarterly 1998 and 1997 data is as follows:
 
<TABLE>
<CAPTION>
                             First      Second       Third      Fourth      Annual
                            Quarter     Quarter     Quarter     Quarter     Amount
                          ----------- ----------- ----------- ----------- -----------
<S>                       <C>         <C>         <C>         <C>         <C>
1998
Total revenue...........  $   300,257 $   310,375 $   321,987 $   467,570 $ 1,400,189
Operating income........      133,667     145,226     147,326     213,790     640,009
Income before
 extraordinary items....       45,124      43,514      52,635      91,983     233,256
Net income available to
 Unitholders............       37,790      43,204      44,539      73,398     198,931
Net income before
 extraordinary items per
 Unit (2)...............  $      0.22 $      0.21 $      0.25 $      0.32 $      1.01
Net income per Unit (2).  $      0.22 $      0.25 $      0.25 $      0.33 $      1.05
Weighted Average Units
 Outstanding............  173,084,147 176,098,843 180,987,067 225,670,566 189,082,385
Net income before
 extraordinary items per
 Unit--assuming
 dilution (2)...........  $      0.22 $      0.21 $      0.25 $      0.32 $      1.01
Net income per Unit--
 assuming dilution (2)..  $      0.22 $      0.25 $      0.25 $      0.32 $      1.05
Weighted Average Units
 Outstanding--Assuming
 Dilution...............  173,471,370 176,489,839 181,312,399 225,972,148 189,439,534
 
1997
Total revenue...........  $   242,414 $   245,055 $   259,783 $   306,915 $ 1,054,167
Operating income........      111,706     114,455     117,572     133,297     477,030
Income before
 extraordinary items....       43,062      48,413      54,286      57,372     203,133
Net income available to
 Unitholders............       13,409      40,539      72,400      47,595     173,943
Net income before
 extraordinary items per
 Unit (2)...............  $      0.23 $      0.27 $      0.28 $      0.29 $      1.08
Net income per Unit (2).  $      0.08 $      0.26 $      0.45 $      0.28 $      1.08
Weighted Average Units
 Outstanding............  157,946,908 158,494,224 159,795,424 167,760,629 161,022,887
Net income before
 extraordinary items per
 Unit--assuming
 dilution (2)...........  $      0.23 $      0.27 $      0.28 $      0.29 $      1.08
Net income per Unit--
 assuming dilution (2)..  $      0.08 $      0.25 $      0.45 $      0.28 $      1.08
Weighted Average Units
 Outstanding--Assuming
 Dilution...............  158,343,827 158,848,611 160,180,477 168,146,728 161,406,951
</TABLE>
--------
(1) Primarily due to the cyclical nature of earnings available for Units and
    the issuance of additional Units during the periods, the sum of the
    quarterly earnings per Unit varies from the annual earnings per Unit.
 
17. Subsequent Events (Unaudited)
 
   On February 25, 1999, the SPG Operating Partnership entered into a
definitive agreement with New England Development Company ("NED") to acquire
and assume management responsibilities for NED's portfolio of up to 14
regional malls aggregating approximately 10.6 million square feet of GLA. The
purchase price for the
 
                                      81
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                  NOTES TO FINANCIAL STATEMENTS--(Continued)
 
portfolio is approximately $1.725 billion. The SPG Operating Partnership
expects to form a joint venture to acquire the portfolio, with the SPG
Operating Partnership's ultimate ownership to be between 30% to 50%.
 
   On February 26, 1999, 150,000 shares of SPG's Series A Convertible
Preferred stock were converted into 5,699,250 paired shares of common stock of
the Companies, with 59,249 shares of Series A Convertible Preferred stock
remaining outstanding. Concurrently, 150,000 Series A preferred Units were
converted into 5,699,250 Units.
 
                                      82
<PAGE>
 
                                   SIGNATURES
 
   Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
 
                                          SPG Properties, Inc.
 
                                                      /s/ David Simon
                                          By: _________________________________
                                                         David Simon
                                                   Chief Executive Officer
 
April 9, 1999
 
   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
 
<TABLE>
<CAPTION>
             Signature                         Capacity                   Date
             ---------                         --------                   ----
<S>                                  <C>                           <C>
        /s/ David Simon              Chief Executive Officer and     April 9, 1999
____________________________________ Director (Principal
            David Simon              Executive Officer)
 
 
       /s/ Herbert Simon             Co-Chairman of the Board of     April 9, 1999
____________________________________ Directors
           Herbert Simon
 
        /s/ Melvin Simon             Co-Chairman of the Board of     April 9, 1999
____________________________________ Directors
            Melvin Simon
 
       /s/ Hans C. Mautner           Vice Chairman of the Board      April 9, 1999
____________________________________ of Directors
          Hans C. Mautner
 
      /s/ Richard Sokolov            President, Chief Operating      April 9, 1999
____________________________________ Officer and Director
           Richard Sokolov
 
                                     Director                        April 9, 1999
____________________________________
         Robert E. Angelica
 
         /s/ Birch Bayh              Director                        April 9, 1999
____________________________________
             Birch Bayh
 
                                     Director                        April 9, 1999
____________________________________
       Pieter S. van den Berg
 
     /s/ G. William Miller           Director                        April 9, 1999
____________________________________
         G. William Miller
 
                                     Director                        April 9, 1999
____________________________________
         Fredrick W. Petri
 
</TABLE>
 
 
                                       83
<PAGE>
 
<TABLE>
<CAPTION>
             Signature                         Capacity                   Date
             ---------                         --------                   ----
<S>                                  <C>                           <C>
      /s/ J. Albert Smith            Director                        April 9, 1999
____________________________________
          J. Albert Smith
 
       /s/ Philip J. Ward            Director                        April 9, 1999
____________________________________
           Philip J. Ward
 
                                     Director                        April 9, 1999
____________________________________
      M. Denise DeBartolo York
 
         /s/ John Dahl               Senior Vice President           April 9, 1999
____________________________________ (Principal Accounting
             John Dahl               Officer)
 
 
Principal Financial Officers:
 
 
    /s/ Stephen E. Sterrett          Treasurer                       April 9, 1999
____________________________________
        Stephen E. Sterrett
 
   /s/ James R. Giuliano III         Senior Vice President           April 9, 1999
____________________________________
       James R. Giuliano III
</TABLE>
 
                                       84
<PAGE>
 
                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                                  ON SCHEDULE
 
To Simon Property Group, Inc.:
 
   We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of SIMON PROPERTY GROUP, L.P. included
in this Form 10-K and have issued our report thereon dated February 17, 1999.
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, 1998, is the
responsibility of Simon Property Group, L.P.'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.
 
                                          Arthur Andersen LLP
 
Indianapolis, Indiana,
February 17, 1999
 
                                      85
<PAGE>
 
                                                                    SCHEDULE III
 
                           SIMON PROPERTY GROUP, L.P.
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
 
                               December 31, 1998
                             (Dollars in thousands)
 
<TABLE>
<CAPTION>
                                                           Cost Capitalized          Gross Amounts At
                                                              Subsequent              Which Carried
                                     Initial Cost           to Acquisition          At Close of Period
                               ------------------------ ------------------------ ------------------------
                                          Buildings and            Buildings and            Buildings and            Accumulated
Name, Location    Encumbrances    Land    Improvements    Land     Improvements     Land    Improvements    Total    Depreciation
--------------    ------------ ---------- ------------- ---------  ------------- ---------- ------------- ---------- ------------
<S>               <C>          <C>        <C>           <C>        <C>           <C>        <C>           <C>        <C>
Regional Malls
Alton Square,
Alton, IL.......   $        0  $      154  $     7,641  $       0   $    11,816  $      154  $    19,457  $   19,611  $   2,248
Amigoland Mall,
Brownsville, TX.            0       1,045        4,518          0           954       1,045        5,472       6,517      1,532
Anderson Mall,
Anderson, SC....       27,500       1,712       18,122      1,363         3,479       3,075       21,601      24,676      4,505
Aurora Mall,
Aurora, CO......            0      11,400       55,692          0           270      11,400       55,962      67,362        403
Barton Creek
Square, Austin,
TX..............       62,064       4,414       20,699        771        28,741       5,185       49,440      54,625      7,694
Battlefield
Mall,
Springfield, MO.       93,665       4,039       29,769      3,225        35,518       7,264       65,287      72,551     11,831
Bay Park Square,
Green Bay, WI...       24,848       6,997       25,623          0           659       6,997       26,282      33,279      1,818
Bergen Mall,
Paramus, NJ.....            0      11,020       92,541          0         5,730      11,020       98,271     109,291      6,320
Biltmore Square,
Asheville, NC...       26,681      10,908       19,315          0         1,059      10,908       20,374      31,282      1,489
Boynton Beach
Mall, Boynton
Beach, FL.......            0      33,758       67,710          0         3,203      33,758       70,913     104,671      4,842
Brea Mall, Brea,
CA..............            0      39,500      209,202          0           144      39,500      209,346     248,846      1,504
Broadway Square,
Tyler, TX.......            0      11,470       32,439          0         1,884      11,470       34,323      45,793      4,238
Brunswick
Square, East
Brunswick, NJ...            0       8,436       55,838          0         3,764       8,436       59,602      68,038      3,937
Burlington Mall,
Burlington, MA..            0      46,600      303,618          0            14      46,600      303,632     350,232      2,172
Castleton
Square,
Indianapolis,
IN..............            0      44,860       80,963          0        25,115      44,860      106,078     150,938      5,886
Charlottesville
Fashion Square,
Charlottesville,
VA..............            0           0       54,738          0           928           0       55,666      55,666      2,018
Chautauqua Mall,
Jamestown, NY...            0       3,257        9,641          0        12,033       3,257       21,674      24,931      1,236
Cheltenham
Square,
Philadelphia,
PA..............       34,226      14,227       43,799          0         2,173      14,227       45,972      60,199      3,307
Chesapeake
Square,
Chesapeake, VA..       48,164      11,534       70,461          0           832      11,534       71,293      82,827      4,936
Cielo Vista
Mall, El Paso,
TX..............       96,125       1,307       18,512        608        15,836       1,915       34,348      36,263      8,834
College Mall,
Bloomington, IN.       54,360       1,012       16,245        722        18,551       1,734       34,796      36,530      8,324
Columbia Center,
Kennewick, WA...       42,326      27,170       58,185          0         5,742      27,170       63,927      91,097      4,315
Cordova Mall,
Pensacola, FL...            0      18,800       75,880       (158)          267      18,642       76,147      94,789      2,160
Cottonwood Mall,
Albuquerque, NM.            0      13,667       69,173          0          (151)     13,667       69,022      82,689      6,586
Crossroads Mall,
Omaha, NE.......            0         884       37,293        409        27,116       1,293       64,409      65,702      6,555
Crystal River
Mall, Crystal
River, FL.......       16,000      11,679       14,252          0         2,841      11,679       17,093      28,772      1,507
DeSoto Square,
Bradenton, FL...       38,880       9,380       52,716          0         2,984       9,380       55,700      65,080      3,875
Eastern Hills
Mall, Buffalo,
NY..............            0      15,444       47,604         12         2,382      15,456       49,986      65,442      3,377
Eastland Mall,
Tulsa, OK.......       15,000       3,124       24,035        518         6,525       3,642       30,560      34,202      5,481
Edison Mall,
Fort Myers, FL..            0      13,618      107,381          0           962      13,618      108,343     121,961      3,889
<CAPTION>
                     Date of
Name, Location    Construction
--------------    -------------
<S>               <C>
Regional Malls
Alton Square,
Alton, IL.......  1993 (Note 3)
Amigoland Mall,
Brownsville, TX.  1974
Anderson Mall,
Anderson, SC....  1972
Aurora Mall,
Aurora, CO......  1998 (Note 4)
Barton Creek
Square, Austin,
TX..............  1981
Battlefield
Mall,
Springfield, MO.  1970
Bay Park Square,
Green Bay, WI...  1996 (Note 4)
Bergen Mall,
Paramus, NJ.....  1996 (Note 4)
Biltmore Square,
Asheville, NC...  1996 (Note 4)
Boynton Beach
Mall, Boynton
Beach, FL.......  1996 (Note 4)
Brea Mall, Brea,
CA..............  1998 (Note 4)
Broadway Square,
Tyler, TX.......  1994 (Note 3)
Brunswick
Square, East
Brunswick, NJ...  1996 (Note 4)
Burlington Mall,
Burlington, MA..  1998 (Note 4)
Castleton
Square,
Indianapolis,
IN..............  1996 (Note 4)
Charlottesville
Fashion Square,
Charlottesville,
VA..............  1997 (Note 4)
Chautauqua Mall,
Jamestown, NY...  1996 (Note 4)
Cheltenham
Square,
Philadelphia,
PA..............  1996 (Note 4)
Chesapeake
Square,
Chesapeake, VA..  1996 (Note 4)
Cielo Vista
Mall, El Paso,
TX..............  1974
College Mall,
Bloomington, IN.  1965
Columbia Center,
Kennewick, WA...  1996 (Note 4)
Cordova Mall,
Pensacola, FL...  1998 (Note 4)
Cottonwood Mall,
Albuquerque, NM.  1996
Crossroads Mall,
Omaha, NE.......  1994 (Note 3)
Crystal River
Mall, Crystal
River, FL.......  1996 (Note 4)
DeSoto Square,
Bradenton, FL...  1996 (Note 4)
Eastern Hills
Mall, Buffalo,
NY..............  1996 (Note 4)
Eastland Mall,
Tulsa, OK.......  1986
Edison Mall,
Fort Myers, FL..  1997 (Note 4)
</TABLE>
 
                                       86
<PAGE>
 
                                                                    SCHEDULE III
 
                           SIMON PROPERTY GROUP, L.P.
 
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
 
                               December 31, 1998
                             (Dollars in thousands)
 
<TABLE>
<CAPTION>
                                                       Cost Capitalized      Gross Amounts At
                                                         Subsequent to        Which Carried
                                    Initial Cost          Acquisition       At Close of Period
                               ---------------------- ------------------- ----------------------
                                          Buildings           Buildings              Buildings
                                             and                 and                    and                 Accumulated
Name, Location    Encumbrances   Land    Improvements  Land  Improvements   Land    Improvements   Total    Depreciation
--------------    ------------ --------- ------------ ------ ------------ --------- ------------ ---------- ------------
<S>               <C>          <C>       <C>          <C>    <C>          <C>       <C>          <C>        <C>
Fashion Mall at
Keystone at the
Crossing,
Indianapolis,
IN..............   $  64,194   $       0  $ 120,579   $    0  $     106   $       0  $ 120,685   $  120,685   $ 3,447
Forest Mall,
Fond Du Lac, WI.      15,550         728      4,498        0      4,920         728      9,418       10,146     1,823
Forest Village
Park,
Forestville, MD.      21,850       1,212      4,625      757      4,071       1,969      8,696       10,665     2,007
Fremont Mall,
Fremont, NE.....           0          26      1,280      265      2,678         291      3,958        4,249       577
Golden Ring
Mall, Baltimore,
MD..............      29,750       1,130      8,955      572      8,591       1,702     17,546       19,248     4,569
Great Lakes
Mall, Cleveland,
OH..............      61,121      14,607    100,362        0      3,462      14,607    103,824      118,431     7,216
Greenwood Park
Mall, Greenwood,
IN..............      97,478       2,607     23,500    5,275     54,216       7,882     77,716       85,598    14,437
Gulf View
Square, Port
Richey, FL......      37,633      13,690     39,997        0      5,160      13,690     45,157       58,847     2,851
Heritage Park,
Midwest City,
OK..............           0         598      6,213        0      2,240         598      8,453        9,051     2,146
Hutchinson Mall,
Hutchison, KS...      16,023       1,777     18,427        0      2,821       1,777     21,248       23,025     4,203
Independence
Center,
Independence,
MO..............           0       5,539     45,822        0     14,913       5,539     60,735       66,274     5,888
Ingram Park
Mall, San
Antonio, TX.....      54,955         820     17,163      169     14,018         989     31,181       32,170     7,549
Irving Mall,
Irving, TX......           0       6,737     17,479    2,533     22,491       9,270     39,970       49,240     8,410
Jefferson Valley
Mall, Yorktown
Heights, NY.....      50,000       4,868     30,304        0      3,816       4,868     34,120       38,988     7,124
Knoxville
Center,
Knoxville, TN...           0       5,006     22,965    3,712     33,220       8,718     56,185       64,903     6,526
La Plaza,
McAllen, TX.....      49,475       2,194      9,828        0      4,050       2,194     13,878       16,072     2,746
Lafayette
Square,
Indianapolis,
IN..............           0      25,546     43,294        0      5,987      25,546     49,281       74,827     3,384
Laguna Hills
Mall, Laguna
Hills, CA.......           0      28,074     55,689        0      1,472      28,074     57,161       85,235     2,028
Lenox Square,
Atlanta, GA.....           0      41,900    492,411        0         21      41,900    492,432      534,332     3,541
Lima Mall, Lima,
OH..............      18,903       7,910     35,495        0      1,161       7,910     36,656       44,566     2,622
Lincolnwood Town
Center,
Lincolnwood, IL.           0      11,197     63,490       28        282      11,225     63,772       74,997    11,203
Livingston Mall,
Livingston, NJ..                  30,200    105,250        0          8      30,200    105,258      135,458       752
Longview Mall,
Longview, TX....      27,600         270      3,602      124      6,586         394     10,188       10,582     2,137
Machesney Park
Mall, Rockford,
IL..............           0         614      7,438      120      4,043         734     11,481       12,215     3,082
Markland Mall,
Kokomo, IN......      10,000           0      7,568        0      1,531           0      9,099        9,099     1,703
Mc Cain Mall, N.
Little Rock, AR.      43,768           0      9,515        0      6,605           0     16,120       16,120     4,865
Melbourne
Square,
Melbourne, FL...      39,404      20,552     51,110        0      3,700      20,552     54,810       75,362     3,653
Memorial Mall,
Sheboygan, WI...           0         175      4,881        0        758         175      5,639        5,814     1,298
<CAPTION>
                     Date of
Name, Location    Construction
--------------    -------------
<S>               <C>
Fashion Mall at
Keystone at the
Crossing,
Indianapolis,
IN..............  1997 (Note 4)
Forest Mall,
Fond Du Lac, WI.  1973
Forest Village
Park,
Forestville, MD.  1980
Fremont Mall,
Fremont, NE.....  1966
Golden Ring
Mall, Baltimore,
MD..............  1974 (Note 3)
Great Lakes
Mall, Cleveland,
OH..............  1996 (Note 4)
Greenwood Park
Mall, Greenwood,
IN..............  1979
Gulf View
Square, Port
Richey, FL......  1996 (Note 4)
Heritage Park,
Midwest City,
OK..............  1978
Hutchinson Mall,
Hutchison, KS...  1985
Independence
Center,
Independence,
MO..............  1994 (Note 3)
Ingram Park
Mall, San
Antonio, TX.....  1979
Irving Mall,
Irving, TX......  1971
Jefferson Valley
Mall, Yorktown
Heights, NY.....  1983
Knoxville
Center,
Knoxville, TN...  1984
La Plaza,
McAllen, TX.....  1976
Lafayette
Square,
Indianapolis,
IN..............  1996 (Note 4)
Laguna Hills
Mall, Laguna
Hills, CA.......  1997 (Note 4)
Lenox Square,
Atlanta, GA.....  1998 (Note 4)
Lima Mall, Lima,
OH..............  1996 (Note 4)
Lincolnwood Town
Center,
Lincolnwood, IL.  1990
Livingston Mall,
Livingston, NJ..  1998 (Note 4)
Longview Mall,
Longview, TX....  1978
Machesney Park
Mall, Rockford,
IL..............  1979
Markland Mall,
Kokomo, IN......  1968
Mc Cain Mall, N.
Little Rock, AR.  1973
Melbourne
Square,
Melbourne, FL...  1996 (Note 4)
Memorial Mall,
Sheboygan, WI...  1969
</TABLE>
 
                                       87
<PAGE>
 
                                                                    SCHEDULE III
 
                           SIMON PROPERTY GROUP, L.P.
 
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
 
                               December 31, 1998
                             (Dollars in thousands)
 
<TABLE>
<CAPTION>
                                                       Cost Capitalized       Gross Amounts At
                                                         Subsequent to         Which Carried
                                    Initial Cost          Acquisition        At Close of Period
                               ---------------------- -------------------- ----------------------
                                          Buildings            Buildings              Buildings
                                             and                  and                    and                 Accumulated
Name, Location    Encumbrances   Land    Improvements  Land   Improvements   Land    Improvements   Total    Depreciation
--------------    ------------ --------- ------------ ------  ------------ --------- ------------ ---------- ------------
<S>               <C>          <C>       <C>          <C>     <C>          <C>       <C>          <C>        <C>
Menlo Park Mall,
Edison, NJ......   $       0   $  65,684  $ 223,252   $    0    $  2,928   $  65,684  $ 226,180   $  291,864   $ 8,138
Miami
International
Mall, Miami, FL.      46,483      13,794     69,701    8,942       2,788      22,736     72,489       95,225    17,654
Midland Park
Mall, Midland,
TX..............      28,000         704      9,213        0       5,875         704     15,088       15,792     3,553
Miller Hill
Mall, Duluth,
MN..............           0       2,537     18,113        0       3,775       2,537     21,888       24,425     4,346
Mission Viejo
Mall, Mission
Viejo, CA.......      37,559       9,139     54,445        0      49,604       9,139    104,049      113,188     3,765
Mounds Mall,
Anderson, IN....           0           0      2,689        0       1,934           0      4,623        4,623     1,482
Muncie Mall,
Muncie, IN......           0         172      5,964       52      19,417         224     25,381       25,605     3,246
Nanuet Mall,
Nanuet, NY......           0      27,700    162,993        0         116      27,700    163,109      190,809     1,168
North East Mall,
Hurst, TX.......      21,934       1,454     13,473    2,090      18,591       3,544     32,064       35,608     3,319
North Towne
Square, Toledo,
OH..............      23,500         579      8,382        0       2,049         579     10,431       11,010     3,743
Northgate Mall,
Seattle, WA.....      79,035      89,991     57,873        0      17,717      89,991     75,590      165,581     4,681
Northlake Mall,
Atlanta, GA.....       1,053      33,400     98,035        0           0      33,400     98,035      131,435       704
Northwoods Mall,
Peoria, IL......           0       1,203     12,779    1,449      25,552       2,652     38,331       40,983     7,863
Oak Court Mall,
Memphis, TN.....           0      15,673     57,555        0         480      15,673     58,035       73,708     2,134
Orange Park
Mall,
Jacksonville,
FL..............           0      13,345     65,173        0      13,329      13,345     78,502       91,847     8,361
Orland Square,
Orland Park, IL.      50,000      36,770    129,906        0         455      36,770    130,361      167,131     4,451
Paddock Mall,
Ocala, FL.......      29,930      20,420     30,490        0       4,334      20,420     34,824       55,244     2,296
Palm Beach Mall,
West Palm Beach,
FL..............      50,471      12,549    112,741        0         634      12,549    113,375      125,924    11,500
Phipps Plaza,
Atlanta, GA.....           0      19,200    210,783        0           1      19,200    210,784      229,984     1,508
Port Charlotte
Town Center,
Port
Charlotte, FL...      52,731       5,561     59,381        0       6,674       5,561     66,055       71,616     4,114
Prien Lake Mall,
Lake Charles,
LA..............           0       1,926      2,829    3,080      35,714       5,006     38,543       43,549     2,000
Raleigh Springs
Mall, Memphis,
TN..............           0       9,137     28,604        0       1,130       9,137     29,734       38,871     2,085
Randall Park
Mall, Cleveland,
OH..............      35,000       4,421     52,456        0       6,525       4,421     58,981       63,402     3,892
Richardson
Square, Dallas,
TX..............           0       4,867      6,329    1,075      11,115       5,942     17,444       23,386     1,736
Richmond Towne
Square,
Cleveland, OH...      14,526       2,666     12,112        0      19,511       2,666     31,623       34,289       908
Richmond Square,
Richmond, IN....           0       3,410     11,343        0       8,295       3,410     19,638       23,048     1,262
River Oaks
Center, Calumet
City, IL........      32,500      30,884    101,224        0          11      30,884    101,235      132,119     3,412
Rockaway
Townsquare,
Rockaway, NJ....           0      50,500    218,557        0         652      50,500    219,209      269,709     1,569
Rolling Oaks
Mall, North San
Antonio, TX.....           0       2,647     38,609      (70)      1,228       2,577     39,837       42,414     8,802
Roosevelt Field,
Garden City, NY.           0     165,500    704,112        0       1,674     165,500    705,786      871,286     5,064
<CAPTION>
                     Date of
Name, Location    Construction
--------------    -------------
<S>               <C>
Menlo Park Mall,
Edison, NJ......  1997 (Note 4)
Miami
International
Mall, Miami, FL.  1996 (Note 4)
Midland Park
Mall, Midland,
TX..............  1980
Miller Hill
Mall, Duluth,
MN..............  1973
Mission Viejo
Mall, Mission
Viejo, CA.......  1996 (Note 4)
Mounds Mall,
Anderson, IN....  1965
Muncie Mall,
Muncie, IN......  1970
Nanuet Mall,
Nanuet, NY......  1998 (Note 4)
North East Mall,
Hurst, TX.......  1996 (Note 4)
North Towne
Square, Toledo,
OH..............  1980
Northgate Mall,
Seattle, WA.....  1996 (Note 4)
Northlake Mall,
Atlanta, GA.....  1998 (Note 4)
Northwoods Mall,
Peoria, IL......  1983 (Note 3)
Oak Court Mall,
Memphis, TN.....  1997 (Note 4)
Orange Park
Mall,
Jacksonville,
FL..............  1994 (Note 3)
Orland Square,
Orland Park, IL.  1997 (Note 4)
Paddock Mall,
Ocala, FL.......  1996 (Note 4)
Palm Beach Mall,
West Palm Beach,
FL..............  1998 (Note 4)
Phipps Plaza,
Atlanta, GA.....  1998 (Note 4)
Port Charlotte
Town Center,
Port
Charlotte, FL...  1996 (Note 4)
Prien Lake Mall,
Lake Charles,
LA..............  1972
Raleigh Springs
Mall, Memphis,
TN..............  1996 (Note 4)
Randall Park
Mall, Cleveland,
OH..............  1996 (Note 4)
Richardson
Square, Dallas,
TX..............  1996 (Note 4)
Richmond Towne
Square,
Cleveland, OH...  1996 (Note 4)
Richmond Square,
Richmond, IN....  1996 (Note 4)
River Oaks
Center, Calumet
City, IL........  1997 (Note 4)
Rockaway
Townsquare,
Rockaway, NJ....  1998 (Note 4)
Rolling Oaks
Mall, North San
Antonio, TX.....  1998 (Note 4)
Roosevelt Field,
Garden City, NY.  1998 (Note 4)
</TABLE>
 
                                       88
<PAGE>
 
                                                                    SCHEDULE III
 
                           SIMON PROPERTY GROUP, L.P.
 
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
 
                               December 31, 1998
                             (Dollars in thousands)
 
<TABLE>
<CAPTION>
                                                       Cost Capitalized      Gross Amounts At
                                                         Subsequent to        Which Carried
                                    Initial Cost          Acquisition       At Close of Period
                               ---------------------- ------------------- ----------------------
                                          Buildings           Buildings              Buildings
                                             and                 and                    and                 Accumulated
Name, Location    Encumbrances   Land    Improvements  Land  Improvements   Land    Improvements   Total    Depreciation
--------------    ------------ --------- ------------ ------ ------------ --------- ------------ ---------- ------------
<S>               <C>          <C>       <C>          <C>    <C>          <C>       <C>          <C>        <C>
Ross Park Mall,
Pittsburgh, PA..   $       0   $  14,557  $  50,995   $9,617  $  46,778   $  24,174  $  97,773   $  121,947   $ 9,543
Santa Rosa
Plaza, Santa
Rosa, CA........           0      10,400     87,864        0         78      10,400     87,942       98,342       631
South Hills
Village,
Pittsburgh, PA..           0      23,453    125,858        0        761      23,453    126,619      150,072     3,955
South Park Mall,
Shreveport, LA..      26,748         855     13,691       74      2,745         929     16,436       17,365     4,454
South Shore
Plaza,
Braintree, MA...          82     101,200    301,495        0        179     101,200    301,674      402,874     2,158
Southern Park
Mall,
Youngstown, OH..           0      16,982     77,774       97     13,081      17,079     90,855      107,934     6,234
Southgate Mall,
Yuma, AZ........           0       1,817      7,974        0      3,310       1,817     11,284       13,101     2,213
St Charles Towne
Center,
Waldorf, MD.....           0       9,329     52,974    1,180      9,667      10,509     62,641       73,150    12,805
Summit Mall,
Akron, OH.......           0      24,814     45,036        0     11,106      24,814     56,142       80,956     4,048
Sunland Park
Mall, El Paso,
TX..............      39,506       2,896     28,900        0      3,073       2,896     31,973       34,869     7,687
Tacoma Mall,
Tacoma, WA......      92,474      39,504    125,826        0      4,413      39,504    130,239      169,743     8,978
Tippecanoe Mall,
Lafayette, IN...      62,255       4,187      8,474    5,517     32,494       9,704     40,968       50,672     9,214
Town Center at
Boca Raton, Boca
Raton, FL.......           0      64,200    307,511        0        831      64,200    308,342      372,542     2,078
Towne East
Square, Wichita,
KS..............      81,006       9,495     18,479    2,042      9,177      11,537     27,656       39,193     7,361
Towne West
Square, Wichita,
KS..............           0         988     21,203       76      6,987       1,064     28,190       29,254     6,774
Treasure Coast
Square, Jenson
Beach, FL.......      53,218      11,124     73,108        0      3,308      11,124     76,416       87,540     5,135
Tyrone Square,
St. Petersburg,
FL..............           0      15,638    120,962        0      9,840      15,638    130,802      146,440     8,540
University Mall,
Little Rock, AR.           0         123     17,411        0        815         123     18,226       18,349     4,659
University Mall,
Pensacola, FL...           0       4,741     26,657        0      2,939       4,741     29,596       34,337     3,585
University Park
Mall, South
Bend, IN........      59,500      15,105     61,466        0      7,902      15,105     69,368       84,473    24,542
Upper Valley
Mall,
Springfield, OH.      30,940       8,421     38,745        0      1,305       8,421     40,050       48,471     2,790
Valle Vista
Mall, Harlingen,
TX..............      42,130       1,398     17,266      372      7,978       1,770     25,244       27,014     5,280
Virginia Center
Commons,
Richmond, VA....           0       9,764     50,757    4,149      2,909      13,913     53,666       67,579     2,950
Walt Whitman
Mall, Huntington
Station, NY.....           0      51,700    111,170    3,579     20,660      55,279    131,830      187,109     1,259
Washington
Square,
Indianapolis,
IN..............      33,541      20,146     41,248        0      2,747      20,146     43,995       64,141     2,938
West Ridge Mall,
Topeka, KS......      44,288       5,775     34,132      197      3,811       5,972     37,943       43,915     7,322
Westminster
Mall,
Westminster, CA.           0      45,200     84,709        0        132      45,200     84,841      130,041       616
White Oaks Mall,
Springfield, IL.      16,500       3,024     35,692    1,153     13,980       4,177     49,672       53,849     6,802
Windsor Park
Mall, San
Antonio, TX.....      14,636       1,194     16,940      130      3,253       1,324     20,193       21,517     4,866
Woodville Mall,
Toledo, OH......           0       1,831      4,454        0        665       1,831      5,119        6,950       415
<CAPTION>
                     Date of
Name, Location    Construction
--------------    -------------
<S>               <C>
Ross Park Mall,
Pittsburgh, PA..  1996 (Note 4)
Santa Rosa
Plaza, Santa
Rosa, CA........  1998 (Note 4)
South Hills
Village,
Pittsburgh, PA..  1997 (Note 4)
South Park Mall,
Shreveport, LA..   1975
South Shore
Plaza,
Braintree, MA...  1998 (Note 4)
Southern Park
Mall,
Youngstown, OH..  1996 (Note 4)
Southgate Mall,
Yuma, AZ........  1988 (Note 3)
St Charles Towne
Center,
Waldorf, MD.....   1990
Summit Mall,
Akron, OH.......  1996 (Note 4)
Sunland Park
Mall, El Paso,
TX..............   1988
Tacoma Mall,
Tacoma, WA......  1996 (Note 4)
Tippecanoe Mall,
Lafayette, IN...   1973
Town Center at
Boca Raton, Boca
Raton, FL.......  1998 (Note 4)
Towne East
Square, Wichita,
KS..............   1975
Towne West
Square, Wichita,
KS..............   1980
Treasure Coast
Square, Jenson
Beach, FL.......  1996 (Note 4)
Tyrone Square,
St. Petersburg,
FL..............  1996 (Note 4)
University Mall,
Little Rock, AR.   1967
University Mall,
Pensacola, FL...  1994 (Note 3)
University Park
Mall, South
Bend, IN........  1996 (Note 4)
Upper Valley
Mall,
Springfield, OH.  1996 (Note 4)
Valle Vista
Mall, Harlingen,
TX..............   1983
Virginia Center
Commons,
Richmond, VA....  1996 (Note 4)
Walt Whitman
Mall, Huntington
Station, NY.....  1998 (Note 4)
Washington
Square,
Indianapolis,
IN..............  1996 (Note 4)
West Ridge Mall,
Topeka, KS......   1988
Westminster
Mall,
Westminster, CA.  1998 (Note 4)
White Oaks Mall,
Springfield, IL.   1977
Windsor Park
Mall, San
Antonio, TX.....   1976
Woodville Mall,
Toledo, OH......  1996 (Note 4)
</TABLE>
 
                                       89
<PAGE>
 
                                                                    SCHEDULE III
 
                           SIMON PROPERTY GROUP, L.P.
 
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
 
                               December 31, 1998
                             (Dollars in thousands)
 
<TABLE>
<CAPTION>
                                                       Cost Capitalized      Gross Amounts At
                                                         Subsequent to        Which Carried
                                    Initial Cost          Acquisition       At Close of Period
                               ---------------------- ------------------- ----------------------
                                          Buildings           Buildings              Buildings
                                             and                 and                    and                 Accumulated
Name, Location    Encumbrances   Land    Improvements  Land  Improvements   Land    Improvements   Total    Depreciation
--------------    ------------ --------- ------------ ------ ------------ --------- ------------ ---------- ------------
<S>               <C>          <C>       <C>          <C>    <C>          <C>       <C>          <C>        <C>
Community
Shopping Centers
Arboretum, The,
Austin, TX......   $  34,000   $   7,640   $ 36,778   $    0  $       6   $   7,640  $  36,784   $   44,424  $       87
Arvada Plaza,
Arvada, CO......           0          70        342      608        699         678      1,041        1,719         302
Aurora Plaza,
Aurora, CO......           0          35      5,754        0        982          35      6,736        6,771       1,722
Bloomingdale
Court,
Bloomingdale,
IL..............      27,359       8,764     26,184        0      1,617       8,764     27,801       36,565       4,063
Boardman Plaza,
Youngstown, OH..      18,277       8,189     26,355        0      1,694       8,189     28,049       36,238       1,890
Bridgeview
Court,
Bridgeview, IL..           0         302      3,638        0        703         302      4,341        4,643         817
Brightwood
Plaza,
Indianapolis,
IN..............           0          65        128        0        252          65        380          445         118
Buffalo Grove
Towne Center,
Buffalo Grove,
IL..............           0       1,387      6,602      126        256       1,513      6,858        8,371         586
Celina Plaza, El
Paso, TX........           0         138        815        0         47         138        862        1,000         180
Century Mall,
Merrillville,
IN..............           0       2,190      9,589        0      1,376       2,190     10,965       13,155       3,417
Charles Towne
Square,
Charleston, SC..           0         446      1,768      425     10,917         871     12,685       13,556           0
Chesapeake
Center,
Chesapeake, VA..       6,563       5,352     12,279        0         74       5,352     12,353       17,705         855
Cohoes Commons,
Rochester, NY...           0       1,698      8,426        0        (72)      1,698      8,354       10,052       2,024
Countryside
Plaza,
Countryside, IL.           0       1,243      8,507        0        473       1,243      8,980       10,223       2,075
Eastgate
Consumer Mall,
Indianapolis,
IN..............      22,929         424      4,722      187      2,880         611      7,602        8,213       3,190
Eastland Plaza,
Tulsa, OK.......           0         908      3,709        0        (26)        908      3,683        4,591         595
Forest Plaza,
Rockford, IL....      16,904       4,187     16,818      453        552       4,640     17,370       22,010       2,346
Fox River Plaza,
Elgin, IL.......      12,654       2,908      9,453        0         45       2,908      9,498       12,406       1,297
Glen Burnie
Mall, Glen
Burnie, MD......           0       7,422     22,778        0      2,424       7,422     25,202       32,624       1,718
Great Lakes
Plaza,
Cleveland, OH...           0       1,028      2,025        0      3,138       1,028      5,163        6,191         440
Greenwood Plus,
Greenwood, IN...           0       1,350      1,792        0      3,680       1,350      5,472        6,822         729
Griffith Park
Plaza, Griffith,
IN..............           0           0      2,412        0        111           0      2,523        2,523         667
Grove at
Lakeland Square,
The,
Lakeland, FL....       3,750       5,237      6,016        0        921       5,237      6,937       12,174         543
Hammond Square,
Sandy Springs,
GA..............           0           0         27        0          1           0         28           28           7
Highland Lakes
Center, Orlando,
FL..............      14,377      13,951     18,490        0        340      13,951     18,830       32,781       1,344
Ingram Plaza,
San Antonio, TX.           0         421      1,802        4         21         425      1,823        2,248         560
Keystone
Shoppes,
Indianapolis,
IN..............           0           0      4,232        0          0           0      4,232        4,232         128
Knoxville
Commons,
Knoxville, TN...           0       3,731      5,345        0      1,623       3,731      6,968       10,699       1,107
Lake Plaza,
Waukegan, IL....           0       2,868      6,420        0        340       2,868      6,760        9,628         871
<CAPTION>
                     Date of
Name, Location    Construction
--------------    -------------
<S>               <C>
Community
Shopping Centers
Arboretum, The,
Austin, TX......  1998 (Note 4)
Arvada Plaza,
Arvada, CO......   1966
Aurora Plaza,
Aurora, CO......   1966
Bloomingdale
Court,
Bloomingdale,
IL..............   1987
Boardman Plaza,
Youngstown, OH..  1996 (Note 4)
Bridgeview
Court,
Bridgeview, IL..   1988
Brightwood
Plaza,
Indianapolis,
IN..............   1965
Buffalo Grove
Towne Center,
Buffalo Grove,
IL..............  1988
Celina Plaza, El
Paso, TX........  1978
Century Mall,
Merrillville,
IN..............  1992 (Note 3)
Charles Towne
Square,
Charleston, SC..  1976
Chesapeake
Center,
Chesapeake, VA..  1996 (Note 4)
Cohoes Commons,
Rochester, NY...  1984
Countryside
Plaza,
Countryside, IL.  1977
Eastgate
Consumer Mall,
Indianapolis,
IN..............  1991 (Note 3)
Eastland Plaza,
Tulsa, OK.......  1986
Forest Plaza,
Rockford, IL....  1985
Fox River Plaza,
Elgin, IL.......  1985
Glen Burnie
Mall, Glen
Burnie, MD......  1996 (Note 4)
Great Lakes
Plaza,
Cleveland, OH...  1996 (Note 4)
Greenwood Plus,
Greenwood, IN...  1979 (Note 3)
Griffith Park
Plaza, Griffith,
IN..............  1979
Grove at
Lakeland Square,
The,
Lakeland, FL....  1996 (Note 4)
Hammond Square,
Sandy Springs,
GA..............  1974
Highland Lakes
Center, Orlando,
FL..............  1996 (Note 4)
Ingram Plaza,
San Antonio, TX.  1980
Keystone
Shoppes,
Indianapolis,
IN..............  1997 (Note 4)
Knoxville
Commons,
Knoxville, TN...  1987
Lake Plaza,
Waukegan, IL....  1986
</TABLE>
 
                                       90
<PAGE>
 
                                                                    SCHEDULE III
 
                           SIMON PROPERTY GROUP, L.P.
 
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
 
                               December 31, 1998
                             (Dollars in thousands)
 
<TABLE>
<CAPTION>
                                                       Cost Capitalized    Gross Amounts At Which
                                                         Subsequent to            Carried
                                    Initial Cost          Acquisition        At Close of Period
                               ---------------------- -------------------- ----------------------
                                          Buildings            Buildings              Buildings
                                             and                  and                    and                Accumulated
Name, Location    Encumbrances   Land    Improvements  Land   Improvements   Land    Improvements   Total   Depreciation
--------------    ------------ --------- ------------ ------  ------------ --------- ------------ --------- ------------
<S>               <C>          <C>       <C>          <C>     <C>          <C>       <C>          <C>       <C>
Lake View Plaza,
Orland Park, IL.   $  22,169   $   4,775  $  17,586   $    0     $  554    $   4,775  $  18,140   $  22,915   $ 2,422
Lima Center,
Lima, OH........           0       1,808      5,151        0         85        1,808      5,236       7,044       355
Lincoln
Crossing,
O'Fallon, IL....         997       1,079      2,692        0        158        1,079      2,850       3,929       347
Mainland
Crossing,
Galveston, TX...       2,226       1,850      1,737        0        138        1,850      1,875       3,725       147
Maplewood
Square, Omaha,
NE..............           0         466      1,249        0        577          466      1,826       2,292       396
Markland Plaza,
Kokomo, IN......           0         210      1,258        0        453          210      1,711       1,921       469
Martinsville
Plaza,
Martinsville,
VA..............           0           0        584        0         45            0        629         629       332
Marwood Plaza,
Indianapolis,
IN..............           0          52      3,597        0        107           52      3,704       3,756       700
Matteson Plaza,
Matteson, IL....      11,159       1,830      9,737        0      1,683        1,830     11,420      13,250     1,609
Memorial Plaza,
Sheboygan, WI...           0         250        436        0        857          250      1,293       1,543       306
Mounds Mall
Cinema,
Anderson, IN....           0          88        158        0          1           88        159         247        50
Muncie Plaza,
Muncie, IN......                     626     10,626     (397)       177          229     10,803      11,032       295
New Castle
Plaza, New
Castle, IN......           0         128      1,621        0        641          128      2,262       2,390       591
North Ridge
Plaza, Joliet,
IL..............           0       2,831      7,699        0        438        2,831      8,137      10,968     1,237
North Riverside
Park Plaza, N.
Riverside, IL...       7,535       1,062      2,490        0        429        1,062      2,919       3,981       782
Northland Plaza,
Columbus, OH....           0       4,490      8,893        0      1,035        4,490      9,928      14,418     1,235
Northwood Plaza,
Fort Wayne, IN..           0         302      2,922        0        566          302      3,488       3,790       832
Park Plaza,
Hopkinsville,
KY..............           0         300      1,572        0         89          300      1,661       1,961       377
Regency Plaza,
St. Charles, MO.       1,878         616      4,963        0        165          616      5,128       5,744       645
Rockaway
Convenience
Center,
Rockaway, NJ....                   2,900     12,500        0          0        2,900     12,500      15,400        89
St. Charles
Towne Plaza,
Waldorf, MD.....      30,742       8,779     18,993        0        141        8,779     19,134      27,913     2,733
Teal Plaza,
Lafayette, IN...           0          99        878        0      2,957           99      3,835       3,934       266
Terrace at The
Florida Mall,
Orlando, FL.....       4,688       5,647      4,126        0        981        5,647      5,107      10,754       489
Tippecanoe
Plaza,
Lafayette, IN...           0         265        440      305      4,842          570      5,282       5,852       873
University
Center, South
Bend, IN........           0       2,388      5,214        0         71        2,388      5,285       7,673     3,639
Wabash Village,
West Lafayette,
IN..............           0           0        976        0        204            0      1,180       1,180       286
Washington
Plaza,
Indianapolis,
IN..............           0         941      1,697        0         13          941      1,710       2,651       713
West Ridge
Plaza, Topeka,
KS..............       4,612       1,491      4,620        0        551        1,491      5,171       6,662       685
White Oaks
Plaza,
Springfield, IL.      12,345       3,265     14,267        0        193        3,265     14,460      17,725     1,886
Wichita Mall,
Wichita, KS.....           0           0      4,535        0      1,710            0      6,245       6,245     1,598
Wood Plaza, Fort
Dodge, IA.......           0          45        380        0        756           45      1,136       1,181       272
<CAPTION>
                     Date of
Name, Location    Construction
--------------    -------------
<S>               <C>
Lake View Plaza,
Orland Park, IL.  1986
Lima Center,
Lima, OH........  1996 (Note 4)
Lincoln
Crossing,
O'Fallon, IL....  1990
Mainland
Crossing,
Galveston, TX...  1996 (Note 4)
Maplewood
Square, Omaha,
NE..............  1970
Markland Plaza,
Kokomo, IN......  1974
Martinsville
Plaza,
Martinsville,
VA..............  1967
Marwood Plaza,
Indianapolis,
IN..............  1962
Matteson Plaza,
Matteson, IL....  1988
Memorial Plaza,
Sheboygan, WI...  1966
Mounds Mall
Cinema,
Anderson, IN....  1974
Muncie Plaza,
Muncie, IN......  1998
New Castle
Plaza, New
Castle, IN......  1966
North Ridge
Plaza, Joliet,
IL..............  1985
North Riverside
Park Plaza, N.
Riverside, IL...  1977
Northland Plaza,
Columbus, OH....  1988
Northwood Plaza,
Fort Wayne, IN..  1974
Park Plaza,
Hopkinsville,
KY..............  1968
Regency Plaza,
St. Charles, MO.  1988
Rockaway
Convenience
Center,
Rockaway, NJ....  1998 (Note 4)
St. Charles
Towne Plaza,
Waldorf, MD.....  1987
Teal Plaza,
Lafayette, IN...  1962
Terrace at The
Florida Mall,
Orlando, FL.....  1996 (Note 4)
Tippecanoe
Plaza,
Lafayette, IN...  1974
University
Center, South
Bend, IN........  1996 (Note 4)
Wabash Village,
West Lafayette,
IN..............  1970
Washington
Plaza,
Indianapolis,
IN..............  1996 (Note 4)
West Ridge
Plaza, Topeka,
KS..............  1988
White Oaks
Plaza,
Springfield, IL.  1986
Wichita Mall,
Wichita, KS.....  1969
Wood Plaza, Fort
Dodge, IA.......  1968
</TABLE>
 
                                       91
<PAGE>
 
                                                                    SCHEDULE III
 
                           SIMON PROPERTY GROUP, L.P.
 
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
 
                               December 31, 1998
                             (Dollars in thousands)
 
<TABLE>
<CAPTION>
                                                         Cost Capitalized      Gross Amounts At
                                                          Subsequent to          Which Carried
                                    Initial Cost           Acquisition        At Close of Period
                               ----------------------- -------------------- -----------------------
                                           Buildings            Buildings               Buildings
                                              and                  and                     and                  Accumulated
Name, Location    Encumbrances    Land    Improvements  Land   Improvements    Land    Improvements    Total    Depreciation
--------------    ------------ ---------- ------------ ------- ------------ ---------- ------------ ----------- ------------
<S>               <C>          <C>        <C>          <C>     <C>          <C>        <C>          <C>         <C>
Specialty Retail
Centers
The Forum Shops
at Caesars, Las
Vegas, NV.......   $  175,000  $        0  $   72,866  $     0  $   58,458  $        0  $  131,324  $   131,324   $ 19,008
Trolley Square,
Salt Lake City,
UT..............       27,141       4,899      27,539      363       7,750       5,262      35,289       40,551      6,565
Office, Mixed-
Use Properties
and Other
The Charles
Hotel...........            0      23,500           0        0           0      23,500           0       23,500          0
Lenox Building,
Atlanta, GA.....                        0      57,778        0           1           0      57,779       57,779        417
Net Lease
Properties......          847      10,975           0        0           0      10,975           0       10,975          0
New Orleans
Centre/CNG
Tower, New
Orleans, LA.....            0       3,679      41,231        0       3,164       3,679      44,395       48,074      2,893
O Hare
International
Center,
Rosemont, IL....            0         125      60,287        1       9,128         126      69,415       69,541     17,793
Riverway,
Rosemont, IL....            0       8,739     129,175       16       6,282       8,755     135,457      144,212     33,972
Three Dag
Hammarskjold
(Land)..........            0       8,625           0        0           0       8,625           0        8,625          0
Development
Projects
Bowie Town
Center, Bowie,
MD..............                    6,000         570        0         317       6,000         887        6,887          0
Indian River
Peripheral, Vero
Beach, FL.......                      790          57        0           0         790          57          847          0
Shops at North
East Plaza, The,
Hurst, TX.......                    8,988       2,198    4,376       1,429      13,364       3,627       16,991          0
Victoria Ward,
Honolulu, HI....            0           0       1,400        0         475           0       1,875        1,875          0
Waterford Lakes,
Orlando, FL.....            0           0       1,114   11,944       2,096      11,944       3,210       15,154          0
Other...........            0           0         314        0         326           0         640          640          0
Corporate.......            0           0         500      280       3,799         280       4,299        4,579        779
                   ----------  ----------  ----------  -------  ----------  ----------  ----------  -----------   --------
                   $2,775,241  $1,981,944  $8,465,064  $84,517  $1,072,246  $2,066,461  $9,537,310  $11,603,771   $688,955
                   ==========  ==========  ==========  =======  ==========  ==========  ==========  ===========   ========
<CAPTION>
                     Date of
Name, Location    Construction
--------------    -------------
<S>               <C>
Specialty Retail
Centers
The Forum Shops
at Caesars, Las
Vegas, NV.......  1992
Trolley Square,
Salt Lake City,
UT..............  1986 (Note 3)
Office, Mixed-
Use Properties
and Other
The Charles
Hotel...........
Lenox Building,
Atlanta, GA.....  1998 (Note 4)
Net Lease
Properties......
New Orleans
Centre/CNG
Tower, New
Orleans, LA.....  1996 (Note 4)
O Hare
International
Center,
Rosemont, IL....  1988
Riverway,
Rosemont, IL....  1991
Three Dag
Hammarskjold
(Land)..........  1998 (Note 4)
Development
Projects
Bowie Town
Center, Bowie,
MD..............
Indian River
Peripheral, Vero
Beach, FL.......  1996 (Note 4)
Shops at North
East Plaza, The,
Hurst, TX.......
Victoria Ward,
Honolulu, HI....
Waterford Lakes,
Orlando, FL.....
Other...........
Corporate.......
</TABLE>
 
                                       92
<PAGE>
 
                          SIMON PROPERTY GROUP, L.P.
 
                 NOTES TO SCHEDULE III AS OF DECEMBER 31, 1998
 
                            (Dollars in thousands)
 
(1) Reconciliation of Real Estate Properties:
 
   The changes in real estate assets for the years ended December 31, 1998,
1997 and 1996 are as follows:
 
<TABLE>
<CAPTION>
                                               1998         1997        1996
                                            -----------  ----------  ----------
      <S>                                   <C>          <C>         <C>
      Balance, beginning of year........... $ 6,814,065  $5,273,465  $2,143,925
        Acquisitions.......................   4,676,634   1,238,909   2,843,287
        Improvements.......................     356,829     312,558     224,605
        Disposals..........................    (126,454)    (10,867)    (19,579)
        Consolidation/Deconsolidation......    (117,303)        --       81,227
                                            -----------  ----------  ----------
      Balance, close of year............... $11,603,771  $6,814,065  $5,273,465
                                            ===========  ==========  ==========
</TABLE>
 
   The aggregate net book value for federal income tax purposes as of December
31, 1998 was $6,306,234.
 
(2) Reconciliation of Accumulated Depreciation:
 
   The changes in accumulated depreciation and amortization for the years
ended December 31, 1998, 1997 and 1996 are as follows:
 
<TABLE>
<CAPTION>
                                                     1998      1997      1996
                                                   --------  --------  --------
      <S>                                          <C>       <C>       <C>
      Balance, beginning of year.................  $448,353  $270,637  $147,341
        Acquisitions.............................    25,839       --        --
        Carryover of minority partners' interest
         in accumulated depreciation of DeBartolo
         Properties..............................       --        --     13,505
        Depreciation expense.....................   246,934   183,357   120,565
        Disposals................................   (32,171)   (5,641)  (10,774)
                                                   --------  --------  --------
      Balance, close of year.....................  $688,955  $448,353  $270,637
                                                   ========  ========  ========
</TABLE>
 
   Depreciation of the SPG Operating Partnership'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 SPG Operating Partnership or the Simons. The
    date of construction represents acquisition date.
 
                                      93
<PAGE>
 
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
 Exhibits                                                                  Page
 -------- --------------------------------------------------------------   ----
 <C>      <S>                                                              <C>
 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 SPG Operating Partnership on September 12, 1997).
 
 2.3      Agreement and Plan of Merger among SDG, CPI and CRC
          (incorporated by reference to Exhibit 10.1 in the Form 8-K
          filed by SDG on February 24, 1998).
 
 3.1(a)   Amended and Restated Charter
 
 3.2(a)   Amended and Restated Bylaws, incorporated by reference to
          Annex VIII of the Company's Schedule 14A on May 8, 1996.
 
 3.3(a)   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 SPG Properties on July 8, 1997).
 
 3.5      Articles Supplementary with respect to the conversion of the
          Series A Preferred Stock of the SPG Properties into Common
          Stock (incorporated by reference to Exhibit 3.5 of SPG
          Properties' 1997 Form 10-K).
 
 10.1(b)  Noncompetition Agreement dated as of December 1, 1993 between
          the Company and each of Melvin Simon and Herbert Simon
          (Previously filed as Exhibit 10.3).
 
 10.2(b)  Noncompetition Agreement dated as of December 1, 1993 between
          the Company and David Simon (Previously filed as Exhibit
          10.4).
 
 10.3(b)  Restriction and Noncompetition Agreement dated as of December
          1, 1993 among the Company and the Management Companies
          (Previously filed as Exhibit 10.5).
 
 21.1     List of Subsidiaries of SPG Properties.                           95
 
 23.1     Consent of Arthur Andersen LLP.                                   96
</TABLE>
--------
(a) Incorporated by reference to the exhibit with the same number of SPG
    Properties' 1996 Form 10-K.
(b) Incorporated by reference to the exhibit indicated of SPG Properties' 1993
    Form 10-K.
 
                                       94