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Simon Property Group Inc (NYSE:SPG)

Q1 2014 Results Earnings Conference Call

April 22, 2014, 11:00 am ET

Executives

Liz Zale - Senior Vice President of Corporate Affairs

David Simon - Chairman of the Board, Chief Executive Officer

Rick Sokolov - President, Chief Operating Officer, Director

Steve Sterrett - Chief Financial Officer, Senior Executive Vice President

Analysts

Steve Sakwa - ISI Group

Michael Bilerman - Citi

Christy McElroy - Citi

Paul Morgan - MLV

David Harris - Imperial Capital

Ki Bin - SunTrust

Craig Schmidt - Bank of America-Merrill Lynch

Alexander Goldfarb - Sandler O'Neill

Daniel Busch - Green Street Advisors

Vincent Chao - Deutsche Bank

Tayo Okusanya - Jefferies

Ben Yang - Evercore

Michael Mueller - JPMorgan

Jim Sullivan - Cowen Group

Operator

Good day, ladies and gentlemen, and welcome to the Q1 2014 Simon Property Group Inc. earnings conference call. My name is Clinton, and I will be your operator for today. At this time, all participants are in listen-only line. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions). As a reminder, this call is being recorded for replay purposes.

I would now like to turn the call over to Liz Zale, Senior VP of Corporate Affairs. Please proceed.

Liz Zale

Thank you. Good morning everyone and welcome to Simon Property Group's first quarter 2014 earnings conference call. Presenting on today's call is David Simon, our Chairman and Chief Executive Officer, Rick Sokolov, our President and Chief Operating Officer and Steve Sterrett, our Chief Financial Officer, and we are also joined by Tom Ward, our new Vice President of Investor Relations.

Before we begin, just a quick reminder that statements made during this call may be deemed forward-looking statements within the meaning of the Safe Harbor of the Private Securities Litigation Reform Act of 1995 and actual results may differ materially due to a variety of risks, uncertainties and other factors. We refer you to today's press release and our SEC filings for a detailed discussion of forward-looking statements.

Please note that this call includes information that may only be accurate as of today's date and reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included within the press release and the supplemental information in today's Form 8-K filing. Both the press release and the supplemental information are available online at investors.simon.com.

It is now my pleasure to introduce David Simon.

David Simon

Good morning. We had strong start to the year. Results in the quarter were led by FFO $2.38 per share, up 16.1% from the first quarter of 2013. Once again our FFO significantly exceeded the first call consensus estimate. Our growth strategy continues to generate significant value for our business. Overall business conditions are positive. Demand for space in our portfolio remain strong. Leasing activity is helping. We had occupancy growth of 80 basis points compared to Q1 2013 in the quarter is 95.5%, accelerating releasing spreads to $9.90 per square foot. Our comp NOI growth for malls and outlets was 3.7% despite higher cost from utilities and snow removal. If we normalize this, this affected our comp by roughly 90 basis points and as a point of reference comp NOI including The Mills and excluding the malls to be spun-off as part of WP was 5.3% for the quarter including the high cost of snow and utility removal.

Now as reported, our retail sales were essentially flat and I would encourage you to look at our revenues as opposed to our retailer sales. As you know, if we had underperforming retailers we have the ability to replace them with better retailers at generally higher rents which generates higher SPG revenues and as I have said repeatedly current retail sales does not correlate to our ability to grow our cash flow and as a reminder, our consolidated revenues, the revenues that I focus on, grew by 8.2% for the year. These results are testament to the strength of our assets and the desirability of our locations.

Now development construction continues on new premium outlets in Charlotte, Minneapolis, Montréal and Vancouver, all high quality major markets and that remains our only focus in new development is in those kind of markets. Other new outlet projects in our development pipeline are moving forward. We have up to six additional new outlets expected to start construction in 2014 and 2015. Redevelopment and expansion projects are ongoing at 29 properties in the U.S., Asia and Mexico.

We started construction on two important redevelopment projects in our portfolio. They include the relocation of Bloomingdale's at Stanford Mall in Palo Alto and the redevelopment of its former location to add 120,000 new square feet of space for small shops and restaurants and the relocation of Saks Fifth Avenue at Houston Galleria to a new prototype store plus the redevelopment of that existing of Saks and an expansion adding the 105000 square feet of luxury retail and restaurants. We also started construction on the expansion of Yeoju premium outlets in Seoul, Korea. That will add approximately 259,000 square feet and we have a healthy pipeline of other premium outlet expansion projects in the works.

Desert Hills premium outlets in celebrating the opening of its expansion beginning this Thursday, adding 147,000 square feet and it is fully an example. As an example, the annualized NOI from this expansion will add $17 million to SPG's NOI, as it's a wholly-owned asset. Construction is ongoing to expand and enhance some of our most productive properties including Roosevelt Field, Woodbury Common, Lenox Square and Del Amo to name a few. Overall we continue to expect redevelopment investments of at least $1 billion annually through 2016 that will contribute incremental growth in NOI and strengthen the position of our assets in the respective geographic areas.

On Klépierre, the transformative Carrefour deal selling 126 smaller assets for nearly €2 billion closed last week. McArthurGlen, our new investment in the outlet business in Europe is performing well. Our deal signed transactions during the first quarter included our acquisition of the remaining interest in Kravco Simon which held interest in a portfolio of 10 assets including King of Prussia Mall which we now own 100% and the acquisition of Arizona Mills bringing our interest to that center of 100% as well as development land in Oyster Bay, Long Island from the Taubman Centers.

Just an update on Washington Prime Group. WP spin-off of 98 assets including our strip center business is expected to be completed in the second quarter. Recent activities include announced members of senior management team, an independent Board of Directors including Mark Orban as CEO. We are pleased also today to announce that Mark Richards will be joining WP as CFO. He is well respected and has worked with Mark successfully at Sunrise Senior Living.

We received indicative investment grade range from three major credit agencies as follows, S&P BBB, Moody's BAA2, Fitch BBB. All three agencies provided a stable outlook. Very strong ratings out-of-the-box and comparable to many REITs that have been rated for a long time. The balance sheet will be ready to enable the company in its pursuit of cash flow growth. Completed financing activities on WP. Nine mortgages were closed in unsecured facility comprised of a $900 million revolving credit facility and a $500 million term loan were completed.

Now let me turn to the SPG capital markets update. We completed a $1.2 billion senior unsecured notes offering in January with a weighted average duration of 7.5 years at an average coupon rate of 2.975%. The 65 basis point spread over treasuries for the five-year tranche is the tightest five years spread ever for a REIT. On March 14 Fitch upgraded our credit ratings to A. We are now at the mid-A level with all three of the agencies leading the REIT industry. We closed or locked rates on four new secured loans in the quarter totaling $860 million of which our share was $491 million and we expect to generate $1 billion of cash proceeds from the WP spin upon its completion.

Early in April, we amended and extended our $4 billion unsecured multicurrency revolving credit facility to a June 2019 final maturity and we are able to reduce the interest rate to LIBOR plus 80 basis points on LIBOR plus 95 basis points, again the best in the market. We raised the dividend again this quarter to a $1.30 per share. That's an increase of $0.05 per share from last quarter and a year-over-year increase of 13%. We will pay at SPG at least $5.15 per common share in 2014 not including the WP expected dividend. As we said to you originally the WP expected dividend will create an overall effective dividend of $5.65 or another at least $0.50 on a one-for-one basis for WP spin.

Now let's go to guidance. We revised our 2014 guidance upwards to $9.60 to $9.70 of FFO per share. This incorporates our strong performance in the first quarter. It raises both the top and the bottom by $0.10. It's based upon an annual comp NOI growth of at least 4% for combined mall and outlet portfolio. This FFO guidance is comparable basis with our 2013 results and ignores any potentially impact of the WP spin. Once the spin-off is completed, we will provide updated guidance through a press release reflecting what the impact of SPG will be for the balance of the year.

So overall, we had a strong start to the year. We are absolutely focused on creating value for our properties and for our tenants and for our shareholders and now we are ready for questions.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Steve Sakwa of ISI Group. Please go ahead.

Steve Sakwa - ISI Group

Thanks. Good morning.

David Simon

Good morning.

Steve Sakwa - ISI Group

Hi, David. I can appreciate your comment about tenant sales, how that doesn't directly impact your business short-term, but I was wondering if you guys could maybe try and isolate what the weather impact was and if you or Rick could maybe talk about regional sales performance and did you see any differences in places like Florida, Texas and California versus the Northeast, Mid-Atlantic and Midwest?

David Simon

I would refute your first statement, Steve, and I would suggest to you that the most important thing in terms of growing our cash flow is in fact what the market rents of our space are which are not determined by what current retailers are producing out of that space and what our rollover schedule looks like. And in fact if you see our rent spreads of nearly $10 per foot, that would indicate exactly, sure we do have some risk to overage rent as sales ebb and flow, but the fact of the matter is recurrent retail sales generally don't have an impact.

And take an example, there are a number of the retailers that are really not performing that well for each one have a variety of reasons. That's in our sales numbers for our retailers, yet that has nothing to do with what the market value of that space can be. And so again, you should be obsessed with our sales. I am obsessed with our revenues, the SPG revenues. Retailers come and go.

If we were worried about retail sales, this company was originally built, we had Kmart as our anchors. And if we had looked at Kmart sales, we would have suggested that our sales or our revenues could never grow, but in fact what we do here is we are able to replace underperforming retailers with better retailers and we are able to garner the market rent of what our space should be and that continues to go up. So this is not a short-term issue. This is an issue that's existed for the balance of this 50 year history of this company.

So now Rick can mention regional, fact of the matter is, sure the weather, this company will never use weather as an excuse. It certainly affected our comp NOI by 90 basis points because of high utility snow. We often talk about the winter. That's in our rearview mirror. It certainly had an impact on our retailers that exist in our buildings, but it doesn't change the fundamentals of the fact that our business is solid. It has the ability to grow its cash flow. We have a long demonstrated track record of being able to do that and we will continue to do that but the markets that didn't have snow, et cetera, they were not as effective in terms of those retailers are reporting.

I do remind you that the like to remind that the strip center which don't even report tenant sales, but Rick, I don't know if you want to add anything to it.

Rick Sokolov

I do. One thing, not only do we not use weather as an excuse with you. We do not allow our operating teams in any of our platforms to use weather as an excuse and we expect those results to be delivered. You will not be surprised to hear that the better markets where the Pacific, Florida, the Southwest and Las Vegas. And the markets that were most impacted by the weather were the Plains, the Great Lakes and the Mid-Atlantic. No great insights there, but as David said, we are managing through.

Steve Sakwa - ISI Group

Okay, thanks, and then just on the leasing front. I know most of the leasing is done for this year, but Rick can you give us some insight as to what kind of leasing is done for next year?

Rick Sokolov

We are right on track with our leasing renewals and leasing the space this year and as we sit here today we are right where we were last year this time for this year, but there is increasing demand. As David said, our job is to curate our properties and bring in the most productive and the growing tenants and eliminate or downsize the tenants that are least provocative. And that's what we do on an ongoing basis.

Steve Sakwa - ISI Group

Okay, thanks.

Operator

Thank you. The next question comes from Christy McElroy of Citi. Please go ahead.

Michael Bilerman - Citi

Yes, actually this is Michael Bilerman, Citi. David, I just had one question just in terms of global expansion. I wasn't sure if your British conference call coordinator was on purpose or not. We are sort of yellow this business is clearly global. You have moved that global on all the regions. How do you feel about traditional retail and where are your thoughts are about that side of the business and pursuing more global expansion?

David Simon

Well, look, we have a great outlet platform in Asia. In fact, Stanley is over in Asia, I guess, tomorrow. It's tomorrow, right? So technically, here today ahead of our self. So we are looking at other Southeast Asia markets to expand our platform. We have been really successful everywhere in Asia in the outlet business. Japan, Korea, Malaysia. There is a number of Southeastern markets, not China, that are that are very interesting to us. So I would expect Michael to hopefully be able to build some new centers there.

We have a good outlet potential in Mexico where we got a couple of new sites that we are pursuing aggressively, including the expansion of our one outlet there. The Brazilian outlet opportunity is somewhat dormant at this point. I couldn't find the right sites in the market know. We were fortuitous in that the market obviously is correcting there. So we have no capital at risk and we have nothing unnecessarily planned there.

And then we have got McArthurGlen which we are very excited about not just the assets that we have interest in but also the development and management platform as well as some of their new expansion opportunities and new development. I was over there a couple weeks ago looking at one of their opportunities. So we think that that business will become more important to us over time. Turning to the full price, I think our model will continue to be opportunistic.

We love in retrospect what happened at Klépierre. We went in there before anybody thought about investing in European real estate based upon two fundamental beliefs. One is that the cash flow is very sticky. So far so good, ex-Spain, which in fact was not very sticky but it means less and less to us now that we have sold this huge portfolio the Carrefour. We can help the company from a strategic point of view and get them retail focused and all the other things that we have been doing. Help them become better operators. All of which have, in fact, scarily have gone according to plan.

So we want to be opportunistic. There is a lot of capital now in Europe. The U.K. is not a real focus for us. Prices are not necessarily cheap and they are not opportunistic and we had a disappointing experience there in retrospect to shareholders and the Board should have thought, the shareholders technically never get an opportunity but the Board should probably thought about it's response a little bit more thoroughly than it did. But that said, we are going to continue to be opportunistic. This is not glamorous and it's primarily the focus is if we can add and export our ability and the number one goal is to make money. I have no interest in building monuments.

Christy McElroy - Citi

Hi, David, it's Christy here. I wonder if you could talk a little bit about your new Simon Venture Group. Are you spending any time on this personally? How much capital what you anticipate investing over time? What sort of returns are you looking at? Can you give us some examples of the types of companies you are looking at?

David Simon

Well, sure. We have just hired Skyler Fernandes, who has early stage VC experience. We have made a couple of small investments before Skyler's involvement, with Jifiti and shopkick, I am sorry, I almost said Shop and Trick, which have been small investments and it's really the primary focus is in areas where we think it's going to apply the investment or the business model will apply to our physical environment. It could be a new retailer. It could be a new restaurant. It can be a new technology that is important to our consumers and our retailer. I think over time we could invest anywhere from $25 million to $50 million. We are going to do it very small. We don't want to have a big staff.

If Skyler is listening, Skyler, you are going to have to do most of this on your own. I am involved. I met a couple of hours yesterday. We have got a couple of, these are $1 million up to $5 million investments a piece, but it's really trying to of focus on bettering our product, and we can do that through new retailers, restaurants. We can do that through new technology. We can do with through new services and we can do it in a way that can help our retailers who like the live which in fact is on the forefront of ultimately providing same-day delivery services to our consumers which seems to resonate with a number of our consumer.

So that's the theory. It's going to morph. The good news is we only have really two investment mistakes over time that I called material, not material but, in China we only have got $0.75 on $1, but we learned that in China you have to be very careful. We also investment in technology in the late 90s. We learned a lot from that. The whole model has changed now because that actually had great ideas there but investing in building the stuff, this was before the cloud. We had to buy the routers, the servers. You had to build everything. Now you can essentially rent it all out. The economics is such that you are never going to have that kind of capital at risk to see whether or not a new idea or a new technology can germinate to something that's meaningful to our portfolio.

Christy McElroy - Citi

That's helpful. Thank you.

Operator

Thank you. The next question comes from the line of Dan Oppenheim of Credit Suisse. Please go ahead.

Dan Oppenheim - Credit Suisse

Thanks very much. I was wondering if you can talk about the issue with the tenant sales talking about previously that the tenant sales doesn't matter but it's really the cash flow. Presumably the cost of occupancy overtime does matter. Its highlight of the team retailers. Should we assume that, given the comments on team retailers that ex that you are feeling quite good and confident about cost of occupancy overall?

David Simon

Well, yes, look, our business has, over its 50 year history, and 20 years as a public company where we produced unbelievable results, but we ask retailers that get hot, get cold, new concept, old concept. It's just the nature of our business. And again, occupancy costs are determined at a particular point in time, but it doesn't necessarily equate to what the market value of that rent is or that space is, because again that sale that's being generated out of that space is that particular retailer and that particular retailer could not be generating the sales that that particular space should be generating, That's where it relies on us to either relocate them or replace them with a newer better retailer.

So again, if you looked at our top 10 tenants 20 years ago versus today and if you looked at our cash flow growth 20 years ago to today, despite all of the noise about particular retailers here in near, there is such strong evidence to support my statement. So occupancy costs is interesting but it's not a factor in what our ability to generate cash flow growth is. You have to look at the rollover schedule and how that equates to market rents, and market rents are determined based upon supply and demand.

So in the office sector, you do the same thing. In the strip center sector, you do the same thing. In the industrial sector, you do the same thing. But here, for whatever reason, the mall industry has gotten away from cash flow growth as the important determinant in what the value of our company is and more what are the existing retailer sales. I don't buy that and I have never run this company based upon that and our track record is evidence of that. I don't know what else to tell you.

Dan Oppenheim - Credit Suisse

Okay. Thank you.

Rick Sokolov

The only thing I would add is, that the underlying David's point about supply and demand, there is virtually no new supply. If you look over the last six years, supply has been growing 50 bips a year lower than the rate of our population growth. So we are in a very good supply dynamic for the foreseeable future.

David Simon

And again, retailers, it ebbs and it flows. Sometimes there is more retailers that are under pressure than sometimes not but you cannot replicate our buildings. You cannot build it. There is no new supply. And supply and demand is in our favor. Otherwise we couldn't grow our cash flow. It's that simple. And I encourage everybody. I hope this doesn't sound defensive but I encourage everybody to understand how we run the business, where we run it over a long period of time. We are always replacing retailers. Some of toughest calls that Rick and I get are the ones when we move an underperforming retailer out for a better performing retailer and the retailers that are underperforming, the fact that they could be there for five, 10 years and their rents are way under market. And it may look bad in their sales, but the fact is, it's welcome from us because we can replace them with a better tenants.

Let's take lease settlement income as part of that discussion. The fact is that if somebody, like we had some recent settlement income. Sony is exiting the mall business. Sony is in A malls. If they pay me the present value of being in that space and I get that space back and I can lease it for current market value, you and me, you are not made of shareholders and analysts but you in a sense represent shareholders. You and me, have just done a good deed. We now get the present value of that space obligation. I get the space back. I can lease it for market rent. That's a win for us.

And again, you have seen that over a period of time with retailers and the lease settlement income is being generated by our top centers. For whatever reason, certain retailers are not wanting to get out of the business or not performing well at this center has nothing to do with that center.

Dan Oppenheim - Credit Suisse

Thank you, and I guess one question in terms of the cash flow. There is a comment in terms of the NOI growth, ex-WP being 5.3%. Should we compare that 5.3% to 3.7%? And it would seem then that WP had much lower NOI growth but presumably a lot of the assets being in the Midwest and some in Mid-Atlantic would have some impact there.

David Simon

Well the real important thing we did was we put in The Mills there, which generated -- one of the things we are thinking about comments are welcome, is that we have not historically put The Mills comp NOI growth in our overall comp NOI but once the spin is done it's likely, we are happy to give input on this, it is likely that we will then put that in our comp NOI because these are big cash flow generating assets and it's probably they are the bigger assets which is consistent with what SPG is doing going forward focused on the bigger assets and it will probably be on our comp NOI pool. So we wanted to give you a flavor of what that comp NOI growth would be including The Mills. And there is some marginal benefit of the fact that if you were taking out the WP assets but it's marginal and you are correct in saying that because of the snow and utility costs and a lot of those centers are located in the areas the got whacked in the first quarter, you are correct in saying that that had some impact on that comp NOI as it did for SPG as a whole.

Dan Oppenheim - Credit Suisse

Thank you.

David Simon

Sure.

Operator

Thank you. The next question comes from the line of Paul Morgan of MLV. Please proceed.

Paul Morgan - MLV

Hi. Good morning. David, I think your comment about market rent for space not being related to what the existing retailer is doing and I think maybe one of those, a great example might be just replacing department store space with small shops, any upside you see there, kind of like what you are doing at Stanford, but give us any sense of how many of those opportunities are in your pipeline? You announced a couple projects. The Phipps and the Pentagon City but is this something you are having discussions with department stores increasingly where they can you maybe downsize and you can recapture space at much higher rents? Any color?

David Simon

We are always looking for that and I will let Rick comment on it. It's interesting though while that neither one of those guys are leaving. They are actually getting new stores in that process but we are able to make the economics work because of the supply and demand of those particular assets. They are both antiquated physical plans. So we are able to make a win-win out of it in that we reclaim REIT demise their existing space, turn over to small shops. They get a brand new prototype store and it's a win-win but part of the lease settlement income that we generate in the first quarter was the full present value of the fact obligation for the mall where they paid us. They are leaving shortly.

Rick Sokolov

They are under construction.

David Simon

And we are going to reclaim that for small shops that's a mall that's close to $1,000 a foot, something like that. But thee is a handful of those. Rick you want to add? There are a handful of those kind of opportunities.

Rick Sokolov

And we are constantly mining the portfolio. We just announced literally an expansion at Pentagon. We have announced, David just talked about Florida mall. And both of those are just in addition to all of the things we completed over the last year and obviously we are always talking with our department stores about where they got space that we believe could be better deployed and we are in constant conversations about whether we can put it to better use. And sometimes it happens independent of us. A great example of that is DICK'S that is being added in one levels Sears in King of Prussia that we have basically done inside the Sears store but that's going to make that property substantially more productive by having DICK'S anchor around one level in Sears consolidating in a more productive box on one level.

Paul Morgan - MLV

My other question is related, but I think there has obviously been a lot of headlines about not just sales but mall traffic and then we have had a tick up in bankruptcies and store closing announcements and so but what you don't hear as much about is the retailers who are looking to backfill that space. Maybe I don't know, Rick, if you have some color about people who, for example, would be looking to take the Coldwater Creek stores that are liquidating or folks like that who have upped their store opening targets?

Rick Sokolov

David always makes fun of me when I rattle of the list of the tenants but the good news is that there is a very vibrant of group of tenants that are looking to expand. Lego, Athleta, H&M, Zara, Uniqlo, just a few, and Topshop, we are adding Topshop's in three places in the portfolio. There are, to David's point, historically there have always been tenant that are looking to do business in productive properties and to the extent the space we are getting back is in productive properties and happily that's the vast majority of our portfolio. We have users and we have demand at better rents and the opportunity to rightsize the space.

Paul Morgan - MLV

Great. Thanks.

David Simon

Yes, and just a comment on traffic. I would suggest to you that when a retailer talks about traffic, that may be their particular stores and may not be endemic of the mall's traffic and I would also caution, throw significant caution to the wind that there are a couple of, one company in particular that holds themselves out as the barometer of traffic in the mall industry and there data does not include any common area or inference data from the Simon Property Group and many other mall owners of a quality real estate and we don't know how and in fact what that traffic is that they report. So I just want to throw caution to the wind when you hear these general statements about traffic. Was traffic affected by the winter? And the fact is that malls, we have some statistic, which I don't even remember but how many days our malls were closed compared to last year was 10x of what it was. So that can happen. It happened. I just want you to throw caution to the wind when the media quotes traffic numbers, understand the source of that and its accuracy.

Paul Morgan - MLV

So you are saying your portfolio is doing better than what they are saying for the industry?

David Simon

I am saying, our traffic was affected by the weather and I am saying you look at our results and that gives you an indication of what's going on our portfolio.

Paul Morgan - MLV

Thanks.

Operator

Thank you. The next question comes from the line of David Harris of Imperial Capital.

David Harris - Imperial Capital

Good morning, everybody. The Carrefour sale by Klépierre, does that prompt any consideration for special dividend under the French REIT rules, David?

David Simon

No. The answer is no, because they have the ability to straddle years a little bit like this as well and they are also unwinding some hedges as part of that because they were over hedged. So there is some losses associate with that. The fact is, it will not end up in a situation where there is an unusual dividend spike. Dividend has been growing. Expect that to probably continue but there won't be something extraordinary associated with that sale.

David Harris - Imperial Capital

So the proceeds will be essentially used to delever the company, at least the initial thought?

David Simon

Correct. That's correct.

David Harris - Imperial Capital

Okay. Does that leave you looking for acquisitions in that company now as we go forward? Or are you happy with a lower level of leverage?

David Simon

No, I think the company is now in a position that it can look for opportunities, whether new development, expansions, some acquisitions here and there but they are clearly focused on, given the significant change they are very focused on growing the business now which two years ago when we got there, I would say it was a different scenario. So thankfully they have executed extremely well and they are looking for growth similar to what all major retail owners do. Do some developments, some expansion, some potential acquisitions here and there.

David Harris - Imperial Capital

Now your estimable CFO has not yet been given a speaking part, but I just wondered if there is any update on his replacement.

David Simon

Well, unfortunately, you have asked a question where he can't respond to that either.

David Harris - Imperial Capital

Well, I don't give great quarter, guys, but I wanted to throw in a compliment.

Steve Sterrett

Thank you.

David Simon

A pat on the back never hurts from anybody. So in any event, as you know we have been, it's very interesting, this company again, there is lot that gets lost in sauce. On one hand this week, we were going to open Desert Hills. It's going to be 100% leased and it's going to add $70 million of cash flow the company. At the same time, we hired a new venture guy. Europe is doing well. You got all the redevelopment. We are doing the WP deal, right and then obviously I have got the focus on Steve's replacement. So just from a, my point of view here, and this is probably, I am telling the people here, they are probably looking for me to say what I am going to say.

So I have been thinking long and hard about this and as you know, the biggest focus we had over the last two or three months has been WP. That management team is basically set, done, which is very good news and it's a great team. They are young, energetic. It's got a mix of Simon trained folks. It's got our strip center entrepreneurial group and then it's got the outsider and a couple of his colleagues that I think ultimately will create their unique dynamic company that's really going to be hustling for growth.

Now that that's said and it looks like the spin is, again subject to Board approval, winding around the last corner. I have been thinking more and more about this and I will probably have an opinion in a month or two but right now I am seriously considering internal candidates as the first line of defense. The good news is, we have got a great bench. We got guys that are savvy veterans, younger people that want to move up. We have a great culture here, and I think we can do it internally but I don't want to rush to judgment. I want WP to get done and then I think once that gets done, something could happen in the next four to eight weeks.

That's probably news to everybody in this room but therein lies my thinking. So I hope you appreciate the honesty of my response.

David Harris - Imperial Capital

Very good. Thank you.

Operator

Thank you. The next question comes from the line of Ki Bin of SunTrust. Please go ahead.

Ki Bin - SunTrust

Thanks. I had just a couple of follow-ups. In terms of traffic data and your tenant replacement commentary, could you just talk a little bit, we are midway through April, almost May now and I wouldn't say it has been very warm, but have you seen some kind of catch up in the past couple months in terms of tenant traffic or sales or anything like that that might be a better indicator going forward?

Rick Sokolov

I think we can say that April is off to a much better start. We obviously had Easter moving from March into April. March was better than February. February was better than January and that trend is continuing in to April and we certainly anticipate that we will have some catch up.

Ki Bin - SunTrust

Okay and the second question. I am sure you guys get this all the time, but if you had to estimate, how many more outlets do you think in the U.S. that we absolutely could use? And how does that number compare to some of your, like in Europe where you are trying to expand?

David Simon

Well, again, if you look at some of the general industry publications, there is a pipeline of 50 and I would just say I don't believe that that whole pipeline will be built. I do think last year, 2013 and 2014 was going to be an active year. So I think you will see five or six or so in the next two, three, four, five years. So if I had to guess I think you are going to see probably 20 or so added over the next three, four, five years. I don't think it's going to be quite as frenzied as everybody thinks. I think we have a really good handle, as you might imagine, on this industry. So that's my own personal view, but I don't control. Developers are always pushing the limit. Whether four or five or six that outlets get built, it doesn't impact our outlet business and what we do. And as you know we are looking to only build in major markets where there really is unquestionable demand for the premium outlet product. If it's a marginal market, we are just going to pass and we have passed on a number of sites. Rick, you can add anything?

Rick Sokolov

The one thing that I would emphasize and David talked about in the context of Desert Hills, we are spending as much time and money expanding our existing great premium outlet as we are trying to build new ones. Desert Hills opens Thursday. We opened an expansion in Orlando. We opened an expansion at Seattle. We are under construction on Las Vegas North Downtown 147,000 feet. We are expanding Woodbury. We are expanding Chicago. And these are all among the best outlets in the United States. We are expanding Livermore and all of those expansions taken together are probably two or three new projects but they will be dramatically more productive, dramatically better returns and they have the benefit of enhancing what we already have.

Ki Bin - SunTrust

Okay, and a similar question, but how about for Europe? Do you see that potential of it being just a lot bigger?

David Simon

Yes, I think Europe, the right to build there is much more difficult but there is a pipeline that we have at MGE that we are going to pursue but it's lot tougher. It's a lot harder to get done. There is a lot more restrictions in terms of how outlets get viewed in Europe in terms of laws there. But if you do get the right to build, it's a terrific, terrific opportunity. So it will be more but I think it will be measured and we will have our share of that, but there is definitely part of what we want to do with MGE. It was in fact build some new centers in Europe.

Ki Bin - SunTrust

Okay. Thank you guys.

David Simon

Sure

Operator

Thank you. The next question comes from the line of Jeff Spector of Bank of America-Merrill Lynch. Please go ahead.

Craig Schmidt - Bank of America-Merrill Lynch

Hi, it's Craig Schmidt for Jeff Spector. I was just wondering if we could spend a little time talking about The Mills. It seems like it has the highest return on redevelopments. Its minimum rents are growing well and it's also seemed to have done the best in terms of sales per square foot productivity since 4Q 2009, in terms of its lift. I know you were doing a lot of things at a lot of different Mills, but what's meeting with the biggest success to sort of drive this?

Rick Sokolov

Craig, it's Rick. I think that The Mills have been performing great and I think that some of it, hopefully a lot of it is attributable to us being able to broaden their appeal. What we have been able to do through our relationships is bring tenants that have been successful in premium outlet in The Mills operate off price concepts, and bring tenants into The Mills from the mall business to operate full price concepts. And that combination has been very compelling. So tenants like Victoria's Secret, Bath & Body Works are operating full price concepts and tenants like Michael Kors, Coach, Express are operating off price concepts. That combination has created, as David said, properties that are 1.5 to 2 million square feet doing hundreds of million of dollars of sales and providing unique franchise in each of the markets where they operate. So we have been very pleased with it and we are growing and we have got expansions underway at Sawgrass. We are working on redevelopments at Great Mall. We are working on expansion at Orange and there's a lot of growth runway to open that platform.

Craig Schmidt - Bank of America-Merrill Lynch

Is there any potential for a ground-up development of a Mills project at this point?

Rick Sokolov

I think that's going to be more difficult. Frankly there are not many markets left in the United States that can support a 2 million square feet ground up development that does $500 million and $700 million from day one. So I would not look for that.

Craig Schmidt - Bank of America-Merrill Lynch

Okay, and then the Yeoju expansion, the premium outlet. Is there any direction that you want to take the new tenants that you are bringing into that project?

David Simon

It will continue to be the high-end tenants there. The existing center has a great tenant mix. So there will continue to be of all the American as well as European brands and the international companies. It is a international retail mix. There are some Korean retailers, but by and large its all the brands that you are familiar with.

Craig Schmidt - Bank of America-Merrill Lynch

Okay, and then hopefully this is the Steve Sterrett question. The pickup in other income, will we see that going forward? Will we have as active a land sales and/or the lease settlement? Or should we assume that that starts to resemble 2013?

Steve Sterrett

Craig, Rick and David talked a lot about the lease settlement income of and I think we did have a fair bit of that activity in the first quarter. I wouldn't expect that level of activity to go through the rest of the year and land sales, as you know, are pretty lumpy but I certainly wouldn't expect that level of activity for the rest of the year.

Craig Schmidt - Bank of America-Merrill Lynch

Okay, great. Thanks a lot.

David Simon

Thank you.

Operator

Thank you. The next question comes from the line of Alexander Goldfarb of Sandler O'Neill. Please go ahead.

Alexander Goldfarb - Sandler O'Neill

Hello, good morning. Just two questions here. First up, on the line of credit, you guys now have I think almost $7 billion if you include the accordions of capacity, which seems like an awful lot just given that if you guys wanted to do anything I would assume that you would have a line of bankers outside of Indy and 399 Park in less than an hour. Is more of this insurance? Like as you guys pay the facility fee, is more of this just the comfort of knowing that you have that? Or is there something else, like just preparing for the next credit crisis or something, just to know that, God forbid, you had to put on major mortgages or refinancings that you just had that available?

Steve Sterrett

Well, Alex, it's Steve. I do think if you look at our debt maturity schedule, we do have $2 billion to $3 billion of debt maturing a year. We are a large company. We did have, people tend to forget, that we did have an instance, not all that long ago, in this country where the capital markets were pretty dysfunctional for an extended period of time. So we have been operating under a philosophy that we want $5 billion to $6 billion of liquidity at all times. Call it insurance. Call it what you want. But I think that's prudent for a company our size.

Alexander Goldfarb - Sandler O'Neill

Okay, and then just a second question is, what are the next steps or what else needs to be done before the Board can declare Washington Prime good to go?

David Simon

Well, we just have to become effective with the SEC, which we are getting closer and closer. The Board has got to review all the final things and then we make an announcement. So its moving quickly and so it's just a process, essentially just becoming effective with the SEC and then Board approval and we are off to the races.

Steve Sterrett

And you saw, Alex, we filed another amendment to the Form 10 yesterday, the amendment number 3. So we are, as David mentioned, getting down to the short strokes.

Alexander Goldfarb - Sandler O'Neill

Okay, so this is just all the back and forth where they give you comments and hopefully that list of comments is getting smaller and smaller and then it's good?

David Simon

Yes.

Alexander Goldfarb - Sandler O'Neill

Okay, perfect.

Steve Sterrett

If you are excited, you can read the 600 pages of total documents if you have nothing to do this weekend.

Alexander Goldfarb - Sandler O'Neill

You know, my kids were saying, Daddy, we like you doing boring Daddy work. We don't like playing with you. So I will do that. Listen, thanks.

David Simon

All right. No worries. Thank you.

Operator

Thank you. The next question comes from the line of Daniel Busch of Green Street Advisors. Please go ahead.

Daniel Busch - Green Street Advisors

Thank you. David, following the WP spin off of the smaller SPG malls and strip centers, will there be any other remaining malls in the portfolio that you would consider non-core and could be potential candidates for disposition?

David Simon

Well, we will always going to be portfolio manage our asset. So the answer to that is sure. We have partners in some assets. Partners may want to sell. We may agree with them. So yes, sure. We are always going to portfolio manage our asset base.

Daniel Busch - Green Street Advisors

Okay, and it appears like there's a growing number of B and C malls coming to the market. Do you have a sense of what the demand is for that type of quality? Is it similar to the quality that WP is?

David Simon

Well, I don't want to -- again, WP's malls are all sorts of the references from the analytic community. My view of WP's malls are there is the one overriding point is that they are smaller. They are just not big malls. I will let you decide whether that's a B-mall or C-mall, an A-mall. I don't think about it like that. I look at the cash flow what's the sustainability of the cash flow. Is that a market where you can grow the cash flow and the one thing that I will bring with is that they are smaller than our average mall. We think those assets because as we have gotten bigger over time and focused on the bigger assets, they tend to lose the day in and day out focus that they deserve. So with that preamble said, look there is a lot of capital in the real estate industry generally for all sorts of assets and money wants to be put to work in the top quality assets in redevelopment assets, in new development across the specter in hotels, retail, office et cetera and I think WP will be able to take advantage of whatever strategy ultimately they put together. But there are buyers for everything right now in any assets. I look at your NAV analysis and I can tell you, our partner is selling a mall and the cap rate is blowing me away in terms of how low it is. So there is a lot of capital for retail real estate in every bucket and to some extent there is product available and to some extent there is less product available but I expect a lot of trades to happen.

Daniel Busch - Green Street Advisors

Great, thank you.

David Simon

Sure.

Operator

Thank you. The next question comes from the line of Vincent Chao of Deutsche Bank. Please go ahead.

Vincent Chao - Deutsche Bank

Hi. Good morning or afternoon to you guys. I just want to go back to the releasing spreads. On a percentage basis, they have been improving for quite a few quarters here now in a row. I am just curious if you could break that down between sort of what's driving that? Is it more market rent increases? Or is it just the base of the malls that are on spaces that are closing? Is it maybe not growing or is going the other way?

Rick Sokolov

Fundamentally, we just have a very good supply and demand dynamic. I would tell you that when you look at our spread calculations, they include almost eight million square feet of space. So it is less susceptible but specific project influences are much more representative of the overall trends throughout our business and we are just able to lease our product at higher rents because frankly I do believe our properties are taking market share and we are having a more desirable portfolio for the retailers to want to operate in.

David Simon

But simply put, the expiring rent is just lower than the market rent. So there is a lot of reasons for that. But that's the simple answer. So if you look at our expiring rent schedule and you see where our market rents are, therein lies why we have the spread which therein lies why we have the ability to increase our cash flow year after year after year. Again you may notice I believe Q1 comp last year was 5%, something like that.

Steve Sterrett

Yes.

David Simon

So our 3.7% was off of a base of 5% that 3.7%, as I mentioned was hurt 90 basis points by extraordinary costs associated with the harsh winter. So you can normalize and do whatever you want with it but that's just how we would look at it and but its that simple. Now notice I didn't talk about retail sales. I talked about market rent.

Vincent Chao - Deutsche Bank

Right, and that's what I am trying to get at. I guess maybe asking another way is, how (inaudible) market rents for your portfolio have gone up, say, over the last year or so as opposed to the spread, which --?

David Simon

The good news is that its clearly gone up because you have seen the spread accelerate.

Vincent Chao - Deutsche Bank

Okay, and maybe just another topic. I know its early days in your ownership there on the Oyster Bay development, but is there any update on how the development planning process is going over there?

David Simon

It's very early days. So really nothing to add there other than we are excited about the opportunity. Our partners are excited about the opportunity. We very much look forward to working with the town to fine a win-win. So we think it's a great opportunity for us and it will be a high priority for us over the next year or so as we go through the process.

Vincent Chao - Deutsche Bank

Okay, thanks.

David Simon

Sure.

Operator

Thank you. The next question comes from the line of Tayo Okusanya of Jefferies. Please go ahead.

Tayo Okusanya - Jefferies

Yes, good afternoon. Going back to development and redevelopment yields, also noticed that you took up the yield on the outlet development to 10% from 9% last quarter. Just wondering what was driving that?

Steve Sterrett

Two things. One, we been able to bring in our cost at a little below budget. Two, we have got a lot of demand and we been able to lease it at higher rents. Hence we got higher returns.

David Simon

I would say it differently. I would say typically they sandbag us on the rent they charge but we let it get approved in any event. So it's all about setting expectations. Isn't it?

Tayo Okusanya - Jefferies

Very much so. Were there any particular assets that kind of drove the average up? Or is this kind of happening across the entire development portfolio?

David Simon

Pretty much across the board, we are seeing those trends.

Tayo Okusanya - Jefferies

Okay, that's helpful, and then just staying on the outlet side, again there was some news out there a few days ago about Charlotte, North Carolina and the whole process of your development there, some pushback from local residents. Just kind of curious if you could opine on that?

David Simon

It's opening on July 31 of this year and it's very well leased and we are in very good shape there.

Tayo Okusanya - Jefferies

Okay, that is helpful, and then last one from me. This one to Steve. Credit provisioning levels also went up during the quarter. Just kind of curious what you are seeing from that perspective and what we should be modeling going forward.

Steve Sterrett

Tayo, we talked a lot over the last few years about that expense being really low. I think what you saw this quarter is just a bit of a reversion to the mean. If you look in the context of $5 billion plus of consolidated revenues, I think we billed north of $7 billion a year to the tenants. Having $5 million of bad debt expense a quarter is still pretty de minimis, but I think that's probably more reflective of the run rate that we are going to see this year.

Tayo Okusanya - Jefferies

Is that reflective, you are just updating your estimates or are you actually seeing more issues with the tenants themselves that's actually causing an actual increase in that number?

David Simon

No, it's a bit of a combination of both. Our overall receivable level is still pretty well but interestingly enough our bad debt reserve is pretty much formulate driven and because you have had more tenant either announce store closings or in a couple of cases go into bankruptcy, we reserve a higher percentage of outstandings against the types of tenants and it generated a slightly higher bad debt expense this quarter.

Tayo Okusanya - Jefferies

Great. Thank you very much.

David Simon

Tayo, thank you.

Operator

Thank you. The next question comes from Ben Yang of Evercore. Please go ahead.

Ben Yang - Evercore

Yes, hi, thanks. Maybe just building on the earlier lease spread question, I believe your spreads are based on openings and closings. So I was just wondering if you could maybe talk about spreads based on signed leases? Maybe what that trend has been? And also maybe how that compares with that 19.5% that you report in your supplemental.

Steve Sterrett

Ben, you are right in that the spread is based on cash closing rent compared to cash opening rent, but because the population, as Rick mentioned, is still large, I mean it's eight million square feet at any one point in time. Looking at it on a signed basis relative to the actual opening isn't going to move the number up a lot, but I will echo what Rick said earlier that demand for space is good, deal quality continues to improve overall. We have been pleased to see the continued acceleration in the leasing spreads but looking at it from a signed basis to an actual opening basis isn't going to materially move the number.

Ben Yang - Evercore

Okay, got it, that's helpful, and then also you talked a little bit about the lease termination income. Was that all Sony? Or were there other retailers in that mix? And maybe also, since it's a lot higher, can you also offer what your guidance is for the full year on that line item?

David Simon

Yes, we don't like to do that but we have the Sony and then I mentioned about the other department store scenario. So that gives you the bulk of it more or less.

Steve Sterrett

In commenting, Ben, on the volume of it, if you look back over our last several years, we have averaged $20 million to $25 million a year of lease settlement income. We just happen to have a larger chunk of that in the first quarter. Could it be more f significant in 2014 than it has been in n the last of couple years? Well, we are certainly off to start, and as David and Rick mentioned, because a couple of the lumpy things that have occurred in the first quarter, it could trend a little higher but it's certainly not going to trend at the same level we saw in the first quarter.

David Simon

Yes, and again, I want to emphasize this is a --

Steve Sterrett

It's a good thing.

David Simon

It's a good thing because again I don't lose the space. I just get at present value the lease obligation or very close to it. Then I have the ability to lease the space out. So it is not something, we have got to get the right values. We do lots of analysis, as you might imagine. We are very sophisticated on this front.

Steve Sterrett

Or typically we don't execute it until we have got our replacement in place.

David Simon

But this is not a bad thing at all.

Ben Yang - Evercore

All right, I totally get it, it's not bad, but could it tick higher to that $20 million to $25 million that you have historically reported in the past?

David Simon

It has a chance this year primarily because we did the one big deal with the department store which I would say is somewhat out of the ordinary.

Ben Yang - Evercore

I mean, was that big deal, was that kind of baked into your earlier guidance? I am just kind of wondering if that was?

David Simon

Yes.

Ben Yang - Evercore

Okay, got it.,

David Simon

Absolutely. That's been in the works for two, three years.

Ben Yang - Evercore

Okay, helpful, maybe final question. You talked a little bit about the other income in your consolidated. Why exactly did the other income in your joint venture also go higher?

David Simon

Its part of the big lease settlement that I mentioned was in its of JV property.

Steve Sterrett

Yes, the biggest drivers of the movement in that number though, Ben, is the nature of some of the income that flows through from McArthurGlen. A lot of it service related income. As you know, we own half of the economics of the development and management business. So that's the primary driver of that.

Ben Yang - Evercore

Got it. Thank you.

David Simon

Sure. Thanks a lot.

Operator

Thank you. The next question comes from the line of Michael Mueller of JPMorgan. Please go ahead.

Michael Mueller - JPMorgan

Yes, hi, thanks. Just following up on that real quick. So the $11 million is consolidated. What is the overall pro rata number for lease term this quarter? And when you talked about $20 million to $25 million normally, is that a consolidated number or is that the pro rata number?

Steve Sterrett

The $20 million to $25 million would be the annual run rate, kind of on a pro rata basis, Michael.

Michael Mueller - JPMorgan

Got it, and what was the full pro rata in Q1 then?

Steve Sterrett

It was high-teens.

Michael Mueller - JPMorgan

Got it, okay, and then last question. I guess historically you have talked about development spend having a bit at least about $1 billion a year for the next few years. As you look out from this standpoint, how many years out does that generally account for at this point?

David Simon

Well, we have said through 2016, but it is not set in stone.

Michael Mueller - JPMorgan

Got it, okay, great. Thanks.

David Simon

Thank you.

Operator

Thank you. The next question comes from the line of Jim Sullivan of Cowen Group. Please go ahead.

Jim Sullivan - Cowen Group

Yes, thank you. Just one quick question, I guess for David and Rick. The so-called fast retailing tenants have been growing pretty dramatically in your properties for a number of years now and I think it shows up with Forever 21 being now a top 10 tenant and an average store size, just looking at the metrics and the setup of more than 10,000 square feet. Historically, of course, you have excluded stores of more than 10,000 square feet in the sales productivity number. I just wonder if, given the ambitious plans of cohorts like H&M and Uniqlo, whether you have given any consideration to perhaps including the fast retailing productivity and the reported productivity, given how important they seem to be and look like it's going to increase in importance.

David Simon

Well, Jim, if you had listened to my --

Jim Sullivan - Cowen Group

I heard every word.

David Simon

Yes, if you listened to my discussion on tenant sales, I would suggest to you, it's an interesting derivative, there's no correlation and the fact is there's no other industry that I know that's focused on retail sales. Therefore this is what's going on with your property. I before saying look at our cash flow and measure us on that basis. And I think somehow the industry is gotten off track here by being the most important metric. I look at the analyst report that came out that even though we beat consensus by $0.14 or something like that, we had unbelievable historical growth. Our comp NOI has grown year after year. It was up marginally in the great recession. The balance sheet is AAA. We are adding all this new development. The one constant dialogue I got was the tenant sales, right. So you want more of that. So I can read more of that. So somehow I am happy have this we discussed with you and other shareholders but somehow we are losing track that retailers come and go. This company was built based upon Kmart leases, okay?

Jim Sullivan - Cowen Group

No, I understand all that. I just think the point is that fast retailing, as a format, does seem to be, in terms of its size, Forever 21 is an in-line tenant and I have no idea, by the way, what their productivity is. It's simply that they are now a top 10 tenant and H&M and Uniqlo have pretty ambitious expansion plans as well. And I was just, all I am doing is suggesting that the original reason for excluding tenants of over 10,000 square feet, I just wonder if it still applies when we think about that type of retailer.

David Simon

I don't think as the mix has broadened in these centers, that metric is probably less and less important. What happens if we bring in service tenants or we take a department store down and put in an office building or an apartment complex. I think we are losing sight of, its real estate and it's about organic cash flow growth and it's not about what particular person is doing in a particular space because again we own the real estate, they don't perform we get it back and then the next question is what can we do with that real estate. So I will tell you what, I will put it in there if you talk about it on page 10 and not on page one. Okay.

Jim Sullivan - Cowen Group

Well, I will just say for my note, by the way, I stressed if people want more space and are willing to pay more for it, what's the key driver. So not guilty as charged here, at least in that respect.

And just one other question I had for you, and this maybe is a Rick question. The development activity number went up a little close to $300 million at the end of the first quarter versus the end of the year. Am I correct in assuming, Rick, that as far as the mall category, which is where it all took place, that that number didn't include your announcements on Pentagon and Phipps, number one?

Number two, that it would be virtually all the Simon post-spin malls that we are talking about there?

Rick Sokolov

Well, you shouldn't presume the latter because we are reporting everything in a combined basis so far. So in that regard, there is capital attributable to these post-spin assets we are doing things. Houston Galleria has started. We have also started on Florida Mall. So a number of new ones have come in to that mix but it is not a function of post-spin or pre-spin and it does not yet include Pentagon or Phipps. We just announced those will be starting construction this quarter.

Jim Sullivan - Cowen Group

So the -- sorry.

David Simon

Go ahead, Jim.

Jim Sullivan - Cowen Group

Sorry, go ahead. Yes, I was just going to say post-spin, and I just want to make sure I understood the comments you made earlier regarding the level of development activity that we should expect from Simon post-spin. Obviously, it sounds like it's going to be the same kind of number as we have been thinking about historically for the company. Obviously the contribution should be relatively greater given that the post-spin company base is going to be a little bit smaller. But is there an opportunity in these malls that there could be an accelerated, an increased level of major expansion spending, given that where you are spending the money and the big money seems to be on the biggest, strongest assets where the demand is really very strong?

Rick Sokolov

Certainly that is going to come about and where we got some of the other projects that we are working on that we hope to announce. We have already talked about connection to King of Prussia. So there are other nine bigger projects coming down the road including Copley that are going to certainly continue that level of spend in the post-spin side.

Jim Sullivan - Cowen Group

Okay, very good. Thank you, guys.

David Simon

And I was just going to add, Jim, just to make sure everyone that's still on the call, all of our numbers that we reported all include the WP assets, occupancy sales, comp NOI, all of the 8-K step is all including the WP all of that. Just to make sure everybody understands that.

Operator

Thank you. I would now like to turn the call over to management for closing remarks.

David Simon

Okay, thank you. Before we conclude today's call for our stockholders that maybe on this call, our annual meeting is May 15 and hopefully you are seeing our proxy statement that we filed on April 10. Your vote is very important to us and the Board has unanimously recommended that stockholders vote for all of the proposals and I would ask you to please vote for all of the proposals. If you have not seen the proxy statement, then you can download a copy by visiting annualmeeting.simon.com. And thank you everyone for your time today.

Operator

Thank you for joining today's conference. This concludes the presentation, and you may now disconnect. Thank you.

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