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Simon Property Group (SPG) Earnings Report: Q1 2016 Conference Call Transcript

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The following Simon Property Group (SPG - Get Report) conference call took place on April 26, 2016, 11:00 AM ET. This is a transcript of that earnings call:

Company Participants

  • Tom Ward; Simon Property Group ; Vice President of Investor Relations
  • David Simon; Simon Property Group ; Chairman, and Chief Executive Officer
  • Rick Sokolov; Simon Property Group ; President and Chief Operating Officer

Other Participants

  • Michael Bilerman; Citibank; Analyst
  • Christy McElroy; Citibank; Analyst
  • Greg Schmidt; Bank of America; Analyst
  • Jeff Spector; Bank of America; Analyst
  • Alexander Goldfarb; Sandler O'Neill; Analyst
  • Caitlin Burrows; Goldman Sachs; Analyst
  • Ross Nussbaum; UBS; Analyst
  • Haendel St. Juste; Mizuho; Analyst
  • Jeff Donnelly; Wells Fargo; Analyst
  • Paul Morgan; Canaccord Genuity; Analyst
  • Tayo Okusanya; Jefferies; Analyst
  • Carol Kemple; Hilliard Lyons; Analyst
  • Ki Bin Kim; SunTrust; Analyst
  • Vincent Chao; Deutsche Bank; Analyst
  • Michael Mueller; JP Morgan; Analyst
  • Floris van Dijkum; Boenning; Analyst

MANAGEMENT DISCUSSION SECTION Operator: Welcome to the Simon Property Group, Incorporated's first-quarter 2016 earnings conference call. (Operator Instructions) As a reminder, today's conference call is being recorded. I would now like to introduce your first speaker for today, Tom Ward, Vice President of Investor Relations. You have the floor, sir. Tom Ward (Vice President of Investor Relations): Thank you, Operator. Good morning, everyone. Presenting on today's call is David Simon, Chairman and Chief Executive Officer. Also on the call are Rick Sokolow, President and Chief Operating Officer; Andy Juster, Chief Financial Officer; and Steve Broadwater, Chief Accounting Officer. Before we begin, 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 be accurate only as of today's date. 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 on our IR website at investors.simon.com. For our prepared remarks, I am pleased to introduce David Simon. David Simon (Chairman, and Chief Executive Officer): Okay. We had a strong start to 2016. We completed several significant redevelopment projects, started construction on others, announced more that we will further enhance the value of our real estate. We completed the acquisition of The Shops at Crystal, extending our presence in the Las Vegas marketplace, and we continue to achieve strong operating and financial results, which were highlighted by FFO of $2.63 per share, which is an increase of 15.4% compared to prior year. We had strong key operating metrics. Mall and premium outlet opportunity occupancy was 95.6%. Leasing activity remains healthy, which we -- the mall and outlet business had releasing spreads of $10.24 per square foot, which is an increase of 17.5%, and our base minimum rent was $49.70, up more than $0.4 -- 4% compared to last year. Total sales per square foot for our mall and outlet business was $6.13 compared to $6.21 in the prior year period. We measure our success through growth of operating income and cash flow. We have a unique ability to drive growth through not only increases in comparable property NOI, but also through disciplined capital allocation for new development, redevelopment, acquisitions, and investments. In our press release and supplement this quarter, we had provided additional new metrics summarizing the composition of our total portfolio NOI. These new metrics provide further detail on the profitability generated by our portfolio, and we have broken them out into four categories: comparable property NOI; NOI from new development, redevelopment, expansions and acquisitions that are not included in comp NOI; NOI from our international properties, which is our premium outlets and designer outlets; and then our share of NOI from investments, which includes Klepierre and HBS Global Properties, and then below the property NOI line, you have the corporate sources of NOI. And, importantly, for the first quarter of 2016, our total portfolio NOI increased 7.8% of which comp NOI increase was 5.1%. Please see the supplement. At the end of the first quarter, redevelopment expansion projects were ongoing in 33 properties. Across all three of our platforms, our share approximately $2 billion. We finished the two-year transformation of Roosevelt Field, including comprehensive enhancements throughout the mall, the addition of two-level fashion specialty store expansion with -- being anchored by Long Island's first Neiman Marcus store.


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We also are nearing completion with Stanford Center, including the new Bloomingdale's, as well as reclaiming that space for specialty stores. Transformations like these are examples of what is adding to our overall profitability. We started construction on several new projects, including the important expansion at The Outlets at Orange, and construction continues on other major redevelopment and expansion projects at some of our most productive properties and some of the best properties in the country: The Fashion Centre Pentagon City, King of Prussia, Woodberry Common, the Gallery in Houston. Most of these projects will be completed in the next 12 months.

Construction continues on two new domestic outlets in Columbus and Clarksburg. Both are scheduled to open later this year, as well as our designer outlet in Provence, France, which is scheduled to open in the spring of 2017. We also started construction during the quarter with our partner, Ivanhoe Cambridge, on our fourth outlet in Canada in Edmonton, Alberta, which is scheduled to open in fall of 2017. Construction continues on to new full new price developments, one in Miami at Brickell City Centre and the other in Fort Worth at The Shops of Clearfork, which is scheduled to open 2017. Brickell will open in the fall of this year. We also completed the acquisition of The Shops at Crystal. Purchase price was $1.1 billion. We plan to place a $550 million mortgage on the property in the next two months, and we are a 50/50 partner with Invesco, and we look forward to building upon high quality asset with its successful foundation. We acquired a majority interest in a leading outlet center in Ochtrup, Germany, with our partner, MacArthurGlen. And during the first quarter, we sold interest in two residential properties and one noncore retail property. As you know, gains and losses on our nonretail assets, including investments, are included in our FFO per share, which we believe is consistent with the white paper. This resulted in a quarter-over-quarter benefit of approximately $0.06. Capital markets, we completed a notes offering of $1.35 billion. Weighted average interest rate of 2.97% and 8.2 years of duration. Our liquidity stands at $6 billion. We announced our dividend at $1.60, which is a year-over-year increase of 6.7%. We increased our guidance to $10.72 to $10.82, reflecting very good performance, and we are very pleased, frankly, with our overall performance given an overall lackluster US economy. And we welcome your questions. QUESTIONS & ANSWERS Operator: (Operator Instructions) Christy McElroy, Citibank. Michael Bilerman (Analyst - Citibank): It is Michael Bilerman with Christy. I just wanted to go first and then Christy will have one. I was wondering how the market should think about Simon strategically going forward. It is about two years to the day when you spun off WPG -- all the assets under $10 million of NOI and arguably lower sales productivity. And now you are left with this immensely high quality mall portfolio, a global outlet portfolio, the mills portfolio and a stake in Klepierre and some other ventures around. Should we think about potential spins of any of those businesses going forward, or do you think you are still going to own assets across the price spectrum of retail real estate? David Simon (Chairman, and Chief Executive Officer): Yes. We have no intention to spin off any other assets. We think they are absolutely synergistic across -- with our retailer relationships. We had the lowest overhead, lowest cost of capital, given the portfolio. We have got historically the best comp NOI growth. So, as long as we can continue to do what we are doing, I don't see any reason why we would want to spin anything off, and they all fit nicely together. They are all in major metro markets. All the assets are producing great cash flow, and our results speak for themselves. I think the WP spinoff was really a focus on -- we were a little -- we were not focusing as much on the smaller properties as probably we should have, and we thought that was in the best interest of the shareholders. But we don't see any other reason to take any other corporate restructuring beyond what we did. Christy McElroy (Analyst - Citibank): Just wondering if Aeropostale and PacSun stops paying you rent at any time during the first quarter and if reserving for that might have impacted your bad debt at all in Q1? And maybe you could give us an update on your overall outlook for retail or bankruptcies and store closings for the balance of the year and whether or not you are more or less cautious versus a quarter ago?


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Well, I -- look, I think a quarter ago, we were cautious. We continue to be cautious. I don't want to mention specific retailers, whether they paid rent or not paid rent. The only one that has filed bankruptcy thus far is PacSun. I am sure there were some prepetition amounts that we wrote off in the quarter. I mean, it is not overly material, and that is part of what we have dealt with for 60 years, retail bankruptcy. So we remain cautious. Our biggest reason we are cautious is that the US economy continues to flatten out, and there is not a lot of growth. I suggest you look at a lot of industries beyond real estate to see what is going on in the US economy, and it is what it is. But we have been cautious on those couple of retailers, but we will deal with it. Operator: Greg Schmidt, Bank of America. Greg Schmidt (Analyst - Bank of America): I notice other income and consolidated properties was up significantly. Was that related to one specific area? David Simon (Chairman, and Chief Executive Officer): Well, I would suggest you look to page 21 on our supplemental. Our corporate -- this is after our property portfolio NOI corporate and other sources were up roughly $20 million, and that was a function of the residential interest that we had that flowed through our corporate NOI number. Greg Schmidt (Analyst - Bank of America): Okay. And you have been doing a great job touching on some really big redevelopments. I just wonder, as you start to touch more and more of your top properties, will the shadow pipeline start to consider and include maybe a second tranche of redevelopments to continue that path of growth? David Simon (Chairman, and Chief Executive Officer): Well, if you look at our 8-K, you can see all the stuff that we have been working on. I just spent an hour and a half with my guy that does residential, which, by the way, he just made us $20 million, which ain't bad. We sold those at a lower cap rate than what we bought Crystal's at, which I thought was a pretty good interesting dynamic in our industry. He has got -- our meeting that was longer than I wanted it to be because my attention span is decreasing. But -- as I get older -- but the fact is he has got 20 things going on across the portfolio. If you look at our 8-K, all the stuff they are doing, I think we are touching a lot. We just opened Dick's Sporting Goods at Independence Mall, just to give you one small example of kind of a solid middle-market mall that produces a lot of cash flow year after year but continue -- we think continue to get better. And so the answer is, we are touching everything. Greg Schmidt (Analyst - Bank of America): And just bringing up Crystal's, is there an expansion opportunity with the [Harman] powers on that property? David Simon (Chairman, and Chief Executive Officer): Yes. Operator: Jeff Spector, Bank of America. Jeff Spector (Analyst - Bank of America): Just wanted to ask about the retail landscape. I feel like all the years Craig and I have been covering the sector, this past year we have seen some real dramatic changes. How have things changed, in your view, just from a year ago when you were planning, whether with the lease contracts or your approach with retailers? What are your latest thoughts? David Simon (Chairman, and Chief Executive Officer): Well, honestly, I think maybe you're getting caught up in a lot of the media discussions. I mean, our business is as solid as it has ever been. We have had comp NOI increase of 5.1%. Our earnings grew 15.4% per year. We are projecting to have $10.72 to $10.82. So I think our simplistic view is it is not as bad as people want to write about, and I think the biggest issue out there, frankly, is that we have a US economy -- and we will never use excuses, but I think you have to look at our performance in conjunction with what is going on in the US economy. And the fact of the matter is, the US economy is flat lining, and yet we are holding our own and gaining market share with a lot of our properties. And, obviously, we have got great tourist-oriented centers that have had a tough year. After this first quarter, we will probably anniversary the stronger dollar here coming up. But we have seen the tourism sales decrease, not necessarily the traffic. But the media about the death of this and the death of that, we don't see it.


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Demand is fine. Properties are getting better. We got supply and demand in our favor. No one is building Class A outlets or malls to any degreeable issue. Certainly, there will be retail space that gets repurposed, which will help us, obviously, in supply and demand equations, and I just -- I don't view it beyond that. The Internet is not the panacea. A lot of CapEx has been spent there and not showing the returns for our retailers. So I think they are going to -- their biggest and best opportunity continues to be bricks and mortar, and we keep plugging along. I don't know if that answers your question, but that is how we view it from here.

Jeff Spector (Analyst - Bank of America): Okay. Great. Operator: Alexander Goldfarb, Sandler O'Neill. Alexander Goldfarb (Analyst - Sandler O'Neill): First, thanks for page 21. The NOI breakout is helpful. A quick question. Maybe you commented on the resi upfront, but can you just give a little more color which projects they were? And then as we go through the rest of the pipeline, I mean, obviously, you have got the tower that you announced down in Houston, but how much embedded potential is there in the portfolio? And is each project that you guys undertake something that you're going to harvest themselves, so we should expect over the next several years more of these $20 million quarterly benefits? David Simon (Chairman, and Chief Executive Officer): Yes. Look, I think we tend not to be long-term. We look at these things more as investments than we do operating properties. That has been our point of view. Just like in Q1 of 2015, we had a gain from a development site we decided to flip in Europe as opposed to stay involved in. So the good news is that we are able to create -- now we have had a few mistakes. So we are not perfect. But we are able to generate additional income in this Company through all of our activity, and that has been proven. In Q2 of last year, as you know, we had a big sizable gain in the sale of marketable securities. So please remember that when we report Q2. So we are able to do that, and we do look at investments. Whether it is in hotels, residential, we do look at them as investments. And we do -- can do -- look at those as once we are not going to own for 30, 40, 50 years like we do the vast majority of our retail holdings, and that will flow through the P&L as rightly so. That is GAAP accounting, by the way, which happy to explain anybody that (inaudible) GAAP accounting. And I do think, with the list of all the activity, you're going to see that episodically, but certainly consistent with how we are going to drive our cash flow growth. Now, specifically, we sold Firewheel residential, and we also sold SouthPark, which -- additionally, which goes to show you how things can change. We actually did SouthPark as a condo development. The market crashed. We actually wrote off our investment in that, and that went through FFO. And then, now our investment in that was not big, so I think it was like $3 million or $4 million of equity. But -- and then, it turned into a residential, not a condo but just a multi-family project, and we just sold it. The two of them, as I said to you, we thought the cap rates were very aggressive. Our partners wanted to sell. We view those, like I said, as investments, so we decided to sell them, and the results flowed through this quarter. And I do think we will have a pipeline of other investments that we don't consider core outside of retail always flow through our P&L, and hopefully, as I said, we haven't batted 1000, but hopefully there will be a lot more incoming gains. Just like our Simon Venture Group. I mean, anything that is profitable will flow through FFO. Anything that is a loss will wash out. And, in fact, we had -- don't get panicky, but we have actually written off a couple of investments that have just -- we don't see the value. So we still may be plugging along, but we took a conservative approach to go ahead and push those through and those are through FFO. So that is how we do it, but I am hopeful that we will continue to create value in all sorts of different ways, including building and selling residential. When we do Copley and part of that project will be condos. I mean, those will flow through the P&L. As you would expect, this would happen, and they will flow through FFO because that is how we view the definition of the FFO white paper, which, as you know, we adhere to stringently.


Yes. You guys have been quite vocal on that point. On Crystal's, can you just talk -- I mean, you guys obviously have basically unlimited capital. So can you just talk about your decision to JV that, especially if there is development upside, and how, especially in that market, given how it bookcases the strip, your decision to JV? And then, other investments, how you figure out if you want to do it wholly versus bringing in a partner. David Simon (Chairman, and Chief Executive Officer): Well, in this case, it was relatively simple. We were approached to partner, and (inaudible) approached us, and we felt it would be beneficial to do a joint venture. The assets then has a great foundation. It has been well leased. It does high sales productivity, and we are hopeful that we could add value to it over time and we have a great partner to do that. And maybe some other things. So, in this case, the opportunity really came from them, and so it was natural to just partner in it. That doesn't mean -- each deals a little bit separately. We may or may not partner. It depends on the circumstances. But, in this case, they really approached us and (inaudible) approached us, and it is a very good asset that has been well leased and managed and operated by the owners and their manager ahead of time, and we hope they would be able to add value to it over time. Look, it is not cheap. But, given where A quality assets are being priced in all sectors, I think it is going to be a good deal for us in the not too distant future. I think it is a good start, and it will get better over time. Alexander Goldfarb (Analyst - Sandler O'Neill):

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Okay. Thank you. David Simon (Chairman, and Chief Executive Officer): Are you guys able to hear me okay because we are getting comments that you can't hear me. But it sounds like you can hear me fine. Alexander Goldfarb (Analyst - Sandler O'Neill): Yes. You are coming through clearly. Operator: Caitlin Burrows, Goldman Sachs. Caitlin Burrows (Analyst - Goldman Sachs): I was just wondering, again, on those nonretail gains that were included in the first-quarter results, was that $0.06 gain that you referenced included in your prior guidance? David Simon (Chairman, and Chief Executive Officer): Yes. Caitlin Burrows (Analyst - Goldman Sachs): Okay. And then, if you look ex that $0.06 impact, the growth is still over 10%, but it doesn't look like your full-year guidance is quite that high? So I was just wondering is there anything else driving the first quarter to be especially strong or just trying to see to what extent you might be being conservative for the rest of year versus actually expecting a slowdown, albeit from a pretty high level. David Simon (Chairman, and Chief Executive Officer): Good question. First of all, I believe our growth would have been 12%. Caitlin Burrows (Analyst - Goldman Sachs): Yes. David Simon (Chairman, and Chief Executive Officer): 12% if you wanted to, it is up to you. I understand why you would want to. Just say, okay, the $0.06 (inaudible) success, but it is actually 12%. And, look, I think we are -- as we started, I think it is consistent with what you described when we did our year-end call, is that we are still being conservative in how we are looking at the business because, primarily, not because of the Internet, not because of the department stores, not because of -- I don't know, but we do have exposure to tourism. That is obviously affecting our overage rent. You can see that as plain as day on the P&L. And the US economy, even though it feels like it should be growing, is more or less flatlining. I don't -- what does Goldman think the first quarter GDP is going to be this year? What is your (multiple speakers)? Caitlin Burrows (Analyst - Goldman Sachs): You asked me last quarter, so I looked it up. 1.8%. David Simon (Chairman, and Chief Executive Officer): All right. Well, I take the under. Okay. So we will see. That is not constant, is it? Caitlin Burrows (Analyst - Goldman Sachs): I am not sure who exactly it is from. David Simon (Chairman, and Chief Executive Officer): All right. Well, we know you have like 10 of them, so you will get it right no matter what. But we are just being -- I would say we are being overly conservative and just because there is -- you have got the election year. By the way, I hear -- it is very interesting. We have essentially no exposure to the UK, but the UK is softening. It is just -- there is a general softening worldwide in the worldwide economy. And as much as I would love to be immune to that, we can't be. We are not. We are a consumer-oriented company, and it is -- we are -- basically, the worldwide economy is flattening. There is a lot of stuff out there, and we are just being a little bit cautious. And obviously, we all know there is a few tenants out there that may or may not go bankrupt, that may or may not close a bunch of stores. We have got to be judicious in how we model their future.


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Got it. Okay. And then also, if you could -- I know you mentioned, as we all know, tourist sales are not so great. If there is any comment you could make just on the malls versus outlets versus mills, either in numbers or just a general feeling. David Simon (Chairman, and Chief Executive Officer): Well, I am happy to say that our comp sales were up nicely in the mall business and down in the outlet business and down in the outlet business 100% due to our high producing tourist centers and the fact that the consumer -- the traffic is not down. The traffic is up in the outlet business, but the fact of the matter is, their spend is less because of the stronger dollar. And we are going to anniversary that at some point this year, but we didn't anniversary it yet in the first quarter. Safe to say. Operator: Ross Nussbaum, UBS. Ross Nussbaum (Analyst - UBS): I am here with Jeremy Metz. David, I thought the fact that you guys put up nearly 4.5% base rent growth in the quarter was pretty impressive, despite the sluggish sales environment. But I guess at least it leads to the question of realistically how long can that continue? The occupancy cost is up year over year from 11.7% up to 12.5%. So I guess realistically, if, in fact, mall sales are at the similar levels for the next year, do you think we're going to be looking at occupancy costs for your portfolio that is pushing 13.5% a year from now? David Simon (Chairman, and Chief Executive Officer): Well, again, we could argue ad nauseam -- and I have lost the argument, so I will admit defeat. Okay? I will admit defeat publicly. We have lost the argument on the correlation or lack thereof of between retail sales and our ability to drive rents, which happens, I believe, some time more toward supply and demand than retail sales. Because, as you know, if a retailer is not producing results and their lease happens to come up, we have the ability, certainly, to replace them with a retailer that is going to be more productive. Now, as I also said, in the mall business, our comp sales are actually up. It is in the outlet business where we are seeing the reduction in comp sales, and that is absolutely unequivocally tied to what is going on with the tourism picture. And, as I said, hopefully that will anniversary, and then that base will move. Now, the comp NOI growth was outstanding and -- for the whole portfolio, but it was particularly good in the outlet business. So that -- it is a very profitable category for our retailers, and we have the ability to drive rents and drive NOI. So, at this point, we can argue ad nauseam about the correlation. I would rather not. We will do the best we can and, like I said, we are going to grow our comp NOI better. Maybe one day we will revert to the mean, and I am not guaranteeing that we won't. But we have grown 200 basis points comp NOI above and beyond the GDP growth because of -- I think because our portfolio skews toward the better customer. And I am hopeful that that trend will continue, and I actually think it is more tied to what is going to go on in tourism and what is going to go on in the general economy than it is one particular retailer sales. And that does not necessarily mean anything about the property. But I have lost the argument. I admit defeat. We will do the best we can. Ross Nussbaum (Analyst - UBS): All right. My follow-up question is on your guidance. If I focus in on the comment you made, which was, I think, $0.03 of the beat this quarter was not related to the asset sales, you only raised guidance for the full year by $0.02. So I guess the question is, if I annualized the non-asset sale beat during the quarter, it is obviously a bigger number than what you raised guidance by. Are you being conservative, or was there anything else going on in the quarter that is not necessarily recurring? David Simon (Chairman, and Chief Executive Officer): There is absolutely nothing going on -- I mean, the disclosure -- you see the comp NOI. You see all of that. While we continue to just be relatively conservative given what is going on in the general US economy. And, again, I am not using that as an excuse, but there is a level of -- there is just a level around the world about consumer spending, growth in wages, election year. We still have certain retailers that may or may not impact us. Maybe we budgeted them right; maybe we didn't. None of it really is all that material for us, thankfully. We built this Company to sustain ins and outs of certain retailers. All of this affects us on the margin, as you know. Whether you slice this by product type, by geography, by retailer, you cut, slice, bake -- Europe, whatever. I just think generally, we are operating appropriately given the growth in the economy, and again, our year over year -- if you didn't hear our delta in quarter over quarter, Q1 2015, Q1 2016 was really $0.06 because of the opportunity that we sold in Q1 of 2015 of last year. So if you're going to look at the delta, don't look at $0.08. Really look at $0.06. If that is important to you.


Haendel St. Juste, Mizuho. Haendel St. Juste (Analyst - Mizuho): A first one for you, David. On the acquisition market, I'm curious on what you are hearing and seeing these days in your conversations with potential sellers. Are you getting approached a bit more? Are you getting a sense that more people are willing to engage in conversations than maybe a year or two ago, given some of the concerns about the broader macro that you laid out earlier? David Simon (Chairman, and Chief Executive Officer): That is interesting. I would have thought maybe but not really. Not really. As you know, we are not actively scouring the world for new deals and, as I have stated to you before, the big deal business is not something on our drawing board at this time. And there is a selective thing here or there, but it is not as if -- and maybe it is my personality, but it is not a -- I am not getting a lot of phone calls. Rick, are you getting any phone calls?

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Rick Sokolov (President and Chief Operating Officer): I am not. No and I have a better personality. David Simon (Chairman, and Chief Executive Officer): Rick certainly has the better personality, but -- so the answer is not really, but our business is not easy. It is not for the faint of heart. And it is -- when we have a slow economy, it really requires a lots of patience, a lot of grinding, a lot of focusing on the detail. Sometimes that creates opportunity in itself. But at this point, nothing really jumps out at me. Haendel St. Juste (Analyst - Mizuho): Got you. And I appreciate that. And one more, if I might ask. It might be redundant, but I was having a little bit of trouble hearing you earlier. But, did I hear you say that you would be putting a $500 million mortgage on Crystal Shops? And, if so, just curious on thoughts for the use of capital. Is it effectively earmarked for maybe the redev, or how should we think about any excess proceeds from that? David Simon (Chairman, and Chief Executive Officer): Well, no. The simplistically, it was $1.1 billion deal. We are going to put a $550 million, thereabouts, mortgage on it, which will have positive leverage, which we think is very important, just using good old Real Estate 101 fundamentals. And the balance of the equity required will be split between us and our partner, Invesco. Simple as that. And so there is no excess financing proceeds. The financing is really part of the purchase price financing -- sources and uses. Haendel St. Juste (Analyst - Mizuho): Got it. And then, one last one, more of an accounting one. The other day, obviously, there is the big block floated by you guys on behalf of the (inaudible) of 4.4 million shares. Just curious if Simon bought any of those shares, certainly, again, maybe not as an attractive a price if you want to bet, but just curious if the company at all participated in buying down any of those shares. David Simon (Chairman, and Chief Executive Officer): Well, just to be technically accurate, we didn't float it. It was part of the DeBartolo family estate. And we did not -- Simon Property Group did not buy any stock. And -- but, as you know, the shares were placed in a relatively quick and straightforward manner. We had nothing to do with the sale of those shares. That was all between DeBartolo and -- the DeBartolo family estate holdings and their advisor. And they have been a great limited partner, very supportive. They are still a very, very significant owner, and those are the facts. Operator: Jeff Donnelly, Wells Fargo. Jeff Donnelly (Analyst - Wells Fargo): Actually, I had a first question just for Rick. I was curious as we are headed into ICS, if broadly speaking there was any themes maybe you're thinking about as we head out to Vegas? And maybe more specifically any projects that are more mission-critical for your team. Rick Sokolov (President and Chief Operating Officer): Well, it is interesting because, as David has said, our portfolio has never been stronger, and we still have significant demand for our properties. And where we are totally focused is maximizing the rents and productivity of our properties, and so our themes going out there is the making sure we get the right retailers in the right spaces in the right sizes so we can maximize our revenue. And we obviously are spending time doing that, but, frankly, for us, ICSC is relevant, but we have retailers coming in here all the time. We have a major retail in here coming in tonight and here for the next three days going over the whole portfolio.


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So we are going out there optimistically. We have gotten a lot of good reverse inquiries as to our space, and we have got a great portfolio across all of our platforms to try and market.

Jeff Donnelly (Analyst - Wells Fargo): And maybe just a follow-up or two. David, somewhat related to that, how do you think about the pursuit of omnichannel ultimately plays out for retailers down the road? Because, while bricks and mortar, as you said, is the biggest and best channel today for retailers, consumers do like to buy online, irrespective of whether or not it is weighing on retailer margins. So I guess I'm curious. If you think forward a few years, do you think lower margins are just the new normal for omnichannel retailers and that's all she wrote, or do you think retailers ultimately have to effectively price in the convenience aspect of buying online, or take it to the extreme, do you think there is going to be a time when retailers need to restructure and it gives them an opportunity to sort of reset their cost basis and their online business and shed the weaker stores? David Simon (Chairman, and Chief Executive Officer): Well, again, I think the fallacy in what is talked about is the fact that even if the stores don't have high sales per square foot, they could generate a lot of operating cash flow for them. So I don't -- look, if the store is losing money, they are going to close the store. That is for sure. The issue is if the store -- the sales metrics that we all -- except us, but many -- let's say -- let me restate it. Many focus on does not necessarily tied to profitability because a lot of these stores could have very low rent, could be fully depreciated, could be in markets that are not great, exciting markets that are growing, but they produce a lot of operating cash flow. They need that operating cash flow to make investments in whatever they want to make investments in, whether that is omnichannel or technology or new stores or whatever. So the statement, they are less productive, therefore, they are going to close stores, is not how I think they look at it. I think they look at whether the store has a four-wall profit. And whether or not, if they close it, what does it really do for the organization. So what is this all going to mean? I think at the end of the day, all retail -- retailers have to be profitable. All e-commerce players have to be profitable, unless Wall Street and other investors are going to fund those investments. And I don't have a crystal ball as to how it is all going to shake out. Could it put pressure on bricks and mortar? Certainly, it could. But I think you have got to keep in mind that a lot of these are cash cows that they are using. Maybe they are not investing in them like the way they should, or we, as owners, or real estate would like to see them do it. But I don't think that equates to store closures, necessarily. Now, if they become unprofitable, they are going to close the store. Simple as that. Have to weigh that against what they charge the store in terms of corporate allocations and overhead and all that and all that. And I think certainly investments in technology is putting pressure on the retail -- the retailer and we have to be sensitive to that. But I think they are going to look at carefully what services they are going to need to provide to the consumer. Because of the end of the day, they chase that and they can't create profitability out of it. That is not doing anybody any good. Jeff Donnelly (Analyst - Wells Fargo): Helpful. And just one last question. There has been a lot of ink spilled in the folks in our seeds estimating the implication of the spinout of REITs in the S&P under the new sector classification. I am just curious as the largest REIT, how are you guys thinking about that prospect and anything you intend to do differently going forward, positioning yourself maybe differently in the eyes of that newer larger pocket of capital. David Simon (Chairman, and Chief Executive Officer): Well, I think we are going to be explaining the Company and what we do and how they ought to look at us. The good news of that group is that they look at cash flow growth. They look at earnings growth. They look at balance sheet metrics. They will compare us to other industries as opposed to just within our sector. They won't be thoroughly focused on NAV, which, again, we can argue about. They won't worry about a quarter here or there of our retail sales. They are going to look at what kind of growth we have in our cash flow and in our earnings. And I think that plays perfectly well with us, given the kind of earnings growth that we have had over many, many, many years and many different cycles.


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So we are very focused on trying to solicit them, whether or not they are going to be interested and whether or not that is going to be a whole new category. I mean, we have no particular crystal ball on that front. But, if they do look at us, I think we have got a great story to tell, and they are going to look at earnings and cash flow growth and know that we have hard assets, which never hurt in any cycle to have hard physical assets.

Operator: Paul Morgan, Canaccord Genuity. Paul Morgan (Analyst - Canaccord Genuity): David, maybe in light of all of your caution on the macro and the consumer, see if Rick could offer a little sunshine and give some of the concepts where we are seeing expansion, and maybe, particularly in the mall expansions and redevelopments that you are doing, number one, and then number two, for anchor spaces where you might be looking to replace a department store. Rick Sokolov (President and Chief Operating Officer): Well, first, on the department store side, it is important to note we have one vacant department store in the entire portfolio and we have like 441 of them. So, again, the narrative out there would have you believe something very different. And when David opined earlier, just as to what we think is going to happen with these department stores, that was a very informed opinion because we meet with these guys all the time, and that is what they are telling us. If you look at the activity that we have put in the K, we have a significant number of anchors that are coming into the portfolio. David always makes fun of me when I list them, so I won't. David Simon (Chairman, and Chief Executive Officer): No. Please do. Please do. Rick Sokolov (President and Chief Operating Officer): But there is a lot going in, and they are across the portfolio quality wise in terms of the smaller properties, the more productive, the slightly less productive, and they are all getting better. And if you just follow our momentum, we had 19 added in 2015. We are now up to 35 in 2016, and it is across the gamut. Of restaurants, Neiman Marcus, Bloomingdale's. A brand-new Saks is opening this week in Houston Galleria in what is a spectacular state-of-the-art store. And as we add new space, that enables us to accommodate the new cutting-edge retailers that otherwise we would not be able to accommodate, and they are still looking to expand at productive properties. And so that is ongoing. And there is basically, if you step back, we are seeing demand from international retailers come into this market from new retail concepts like Suitsupply and ALEX AND ANI and Tesla. From retailers opening stores that have been talked about a lot. Brand extension -- David Simon (Chairman, and Chief Executive Officer): Restaurants. Rick Sokolov (President and Chief Operating Officer): Of our existing retailers that White Barn Candle is growing aggressively. Victoria's Secret is growing 4% this year. We're adding restaurants, as David said, throughout the portfolio, and all of this is just making the portfolio stronger and stronger. David Simon (Chairman, and Chief Executive Officer): And, again, we put in page 21 to show you what the fruits of our efforts do, and I believe the portfolio NOI, which doesn't include our corporate activities, increased 7.8% for the quarter. As my favorite guy that I like to quote, Adam Sandler, would say, that ain't too shabby. So we are conservative, but it is not getting in the way of producing the results we want to produce. Paul Morgan (Analyst - Canaccord Genuity): And then, just on the team segment, if we do get a ramp up in closings, I mean, obviously, closings are -- a lot of these chains have been going on for a lot of years. But let's say it ramps up. A lot of the chains themselves don't seem to be producing sales at the volume of on a square foot basis that your portfolio average is. Is there a pretty strong positive mark-to-market on that space? Would we expect spreads to be consistent if you get hundreds of closings that can bring in more productive retailers, or is that not the way to look at it? Rick Sokolov (President and Chief Operating Officer): Well, I think if you look at our activity generated last year, where we had Wet Feel and Cachet and Body Shop go out, we have been able to re-lease a very significant amount of space at positive brands and positive productivity contributions because there are more productive retailers coming in. So is there going to be downtime? Certainly. Will that have an impact on short-term results? Of course. But at the end, we certainly demonstrated an ability to replace those retailers that go out with better retailers and, frankly, that hasn't changed for decades. That is the business.


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Tayo Okusanya, Jefferies. Tayo Okusanya (Analyst - Jefferies): Just two questions from us. First of all, on the development and the redevelopment side of the business, just noticed a couple of yield change. The yields for the new development and the premium outlets went down a little bit, and also expected yields on the mills redevelopment went down a little bit. Is that purely due to mix? David Simon (Chairman, and Chief Executive Officer): Yes. Yes. So in the outlets, we added our Canadian deal, which changed the mix, and then there were a couple of changes in the mills mix. But no budget blows. No income blows. All just mix changes. Tayo Okusanya (Analyst - Jefferies):

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Okay. That's helpful. And then, second of all, in regards to Sears, Kmart, some announcements this week or last week that they are accelerating closures, just wondering what you think the implication of that would be going forward, either for your portfolio or also in regards to your JV with Sears? David Simon (Chairman, and Chief Executive Officer): As far as we -- no, and I think it is a pretty safe statement. None of those closings are in any of our assets. So that has no impact, and I don't if it makes Sears a healthier retailer, we are all for that. And, really, it doesn't impact our (inaudible) JV or our relationship with Sears. I think it is -- we are still doing business as usual there. (multiple speakers). Tayo Okusanya (Analyst - Jefferies): So it doesn't (multiple speakers) ability for you to make a couple of changes in regards to Sears moving out of some of the (inaudible) space and you are redeveloping and leasing that space? David Simon (Chairman, and Chief Executive Officer): No, nothing has changed given that recent announcement. We have no Kmart in our portfolio. So I would say it is pretty much business as usual there. We are still, obviously, spending a lot of time going through our JVs to redevelop some of those boxes. So that is not -- no different sense of pace or not, given the recent Sears announcement. Rick Sokolov (President and Chief Operating Officer): And I would just point out, the vast majority of those stores that Sears announced as closing were Kmart's and freestanding stores. I believe there was only one or two mall-based stores in that entire list. None of which were ours. Operator: Carol Kemple, Hilliard Lyons. Carol Kemple (Analyst - Hilliard Lyons): Earlier in the call, you all mentioned that you think some of the best opportunities for many of the online retailers are opening in physical stores. What kind of feedback have you received from the online retailers who have already opened stores at your malls? David Simon (Chairman, and Chief Executive Officer): Positive. Very positive. The cost of customer acquisition, we would encourage you to read the L2 study that we produced. The cost of customer acquisition or pure online retailer at a certain level, if they don't have physical stores, is so high that they all view the physical stores as a way to really reduce their customer acquisition costs, extend their branding, extend their reach. And so far, it seems to be producing what they are looking to get out of that. So, so far, so good there. Carol Kemple (Analyst - Hilliard Lyons): Are you starting to see some of them that maybe you signed 10 leases with in the beginning looking to enter into more of your malls, or are they kind of content with the space they have right now? David Simon (Chairman, and Chief Executive Officer): No. They are all looking to expand. Carol Kemple (Analyst - Hilliard Lyons): Okay. Great. Operator: Ki Bin Kim, SunTrust. Ki Bin Kim (Analyst - SunTrust): I just wanted to ask you a couple of questions on occupancy cost. For new leases that you are signing, what do the occupancy costs look like, and I think when I asked this question last time, you said around 14% to 15%. I was curious if that needle is moving closer to 15% or 14% lately? David Simon (Chairman, and Chief Executive Officer): It is so retailer space specific, but I think the important thing is to look at our base -- our average base rent. It is still under 10% -- well under 10% of what the sales are. Our averages mean a lot because we have this vast portfolio. You can see the rollover schedule. There is no one -- there is just no way I can really can answer that question. And so it is so specific on location, mall, retailer, use, so on and so forth. But we are increasing our average base rents and our spreads are our spreads and our top NOI are our top NOI.


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Okay. I guess I was asking if there were any more general trends you were noticing if things were changing at all. But, I guess my second question is, how will you treat Tesla sales in your report stats if they are going to be in there at all? David Simon (Chairman, and Chief Executive Officer): Well, if they report sales, they are in. If they don't, they are not. I mean, we have that policy with every retailer Ki Bin Kim (Analyst - SunTrust): So with that, does that mean that their sales would eventually be included? David Simon (Chairman, and Chief Executive Officer): I just said, if they report sales, they are in. If they don't, they are not. And just as every retailer under 10,000 feet, again, and I think they report in a couple. I think they don't report in most. Most of them. So again, given the size of our portfolio, it is immaterial. Ki Bin Kim (Analyst - SunTrust): Okay. Thank you. David Simon (Chairman, and Chief Executive Officer): Now, as you know, we have 100 and how many -- I forget. How many -- Tom, how many balls do we have -- 100 and -- ? Tom Ward (Vice President of Investor Relations): 107. David Simon (Chairman, and Chief Executive Officer): 107 and how many outlets that we -- seven. So none of these -- one particular retailer is going to change it all that much. Operator: Vincent Chao, Deutsche Bank. Vincent Chao (Analyst - Deutsche Bank): Just a couple of cleanup questions here. In terms of the other income, which I know we talked about inclusive of the resi gains, if we take out that impact, it seems like it is about $52 million or so for the quarter, which is similar to fourth quarter, but up quite a bit year over year. Just curious if that is a decent run rate going forward -- if there was some other -- there is a bunch of things in that line item? Just wondering if there is other one time (multiple speakers)? David Simon (Chairman, and Chief Executive Officer): I just think you're going to have to get used to the fact that we are going to have ups and downs in that number. Over the year, it kind of balances out. We generated a lot of additional income from our portfolio, and we are hoping that that will grow. I would say, overall, that number is around $200 million, but it could be higher in one quarter, lower in the next. It could be higher over the whole year and lower over one year, and it is just a number that is going to be volatile. Again, our total revenue base is, Steve, when you include our share, the JVs $8 billion of revenue. We are a big company. So it is not -- these things are going to go in and out a little bit. But the good news is it is income, it is not losses. Okay? Vincent Chao (Analyst - Deutsche Bank): Right. Okay. And just, maybe not a question (inaudible) if I missed it from earlier. On the 5.1% same-store NOI comp in the quarter, it was quite a bit stronger than last couple of quarters that you reported. Again, obviously, we just talked about the ins and outs on a quarterly basis. Just curious, though, if there was anything surprising here in the first quarter for you guys relative to your initial outlook (inaudible). David Simon (Chairman, and Chief Executive Officer): Not really. We don't update our comp NOI quarter over quarter. We told you what we thought we would do. We are always trying to achieve better than that. Last year, we didn't. We came in a little bit under what we had -- wanted to see in comp NOI. That was all related to the unanticipated -- at least, to the degree in our overage rent due to the decrease in tourism spending, yet we produced our good earnings despite that headwind. All of that is explained to my shareholder letter, but we don't update it. We are hopeful to do better than that than we guided to early in the year and we will see. Vincent Chao (Analyst - Deutsche Bank): Okay. Thanks. And maybe just one last question on the anchor openings. I think there was about four backstages that opened this quarter. Just curious if you could provide some color on what you were seeing from that particular concept.


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Well, those backstages that opened were done in existing Macy's stores, and if you look at how they are integrated into the store, they are basically taking one for side and one parking field and branding it Macy's Backstage. And I think it is too early to say what kind of sales impact it has, but it is another reason for consumers to come to that store and, hopefully, it will contribute the kind of positive sales impact that they are looking for. But the physical presentation of it is basically a dedicated entrance and a dedicated portion of one floor of an existing Macy's store. Operator: Michael Mueller, JPMorgan. Michael Mueller (Analyst - JP Morgan): Just have one quick one left. What was the dollar volume of dispositions that you announced, including residential? David Simon (Chairman, and Chief Executive Officer):

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The total -- not the gain, the total amount -- can we do a quick add, guys? $65 million, somewhere in that, including the outlet that we sold. Operator: Jeff Spector, Bank of America. Jeff Spector (Analyst - Bank of America): I appreciate hearing some additional comments. It helped to answer my first question as to how things have changed in the last year. Thinking about it, David, would you consider disclosing the latest occupancy cost of sales for the outlets, just to demonstrate the ability to continue to push rents further, or at this point, you're just combining it with the malls? David Simon (Chairman, and Chief Executive Officer): Well, we have always -- we have combined them for the last several years. Any -- look, I think all of this -- all of these metrics manifest itself in their cash flow and comp NOI, and we are not as obsessed with metrics as maybe the analytic community. That could be good or that could be bad, but that is just the way we look at things. We also take a longer-term view of the real estate than we do on a quarter by quarter and even a year by year view. So I don't think that data is going to do you any good, frankly. It is not something we are like obsessed with -- oh, what is the occupancy costs going to be in this particular deal with this particular tenant. It is not how we run the business. We are looking at retail mix for the primary purpose that the retailer does well and the consumer likes it. And then, if that works together, then hopefully it will create the environment that we are trying to do, which, by the way, we are not -- we are decent at, good at; we are not great at. We can always do better. So another metric is just -- it is just not where we want you to think about us. We want you to think about our cash flow growth, our investment in our assets over the long term, and so on. But all I can tell you is the outlet business comp NOI growth is doing very well, and we don't see it changing in that even with the tourism slowdown that we are currently experiencing. We are -- our portfolio NOI grew 7.8% with tough tourism spend and a slow growth economy. That is pretty good work. I can't guarantee we are going to do it every quarter, but I think that is pretty good work. That is what I would like you to focus on. Jeff Spector (Analyst - Bank of America): Okay. Sounds good. And then my last question is just on retailer CapEx tenant allowance. Any change there? As we think about whether -- how you are signing deals or some of your competitors? Is that increasing for some, decreasing? Is it similar to what we have seen in the past? Rick Sokolov (President and Chief Operating Officer): If you look in the Q, our allowance has been flat year over year, and, frankly, all that allowance is just for new tenants. We have minimal now allowance for our renewals. Jeff Spector (Analyst - Bank of America): Great. That's helpful. Operator: Christy McElroy, Citibank. Michael Bilerman (Analyst - Citibank): David, I am curious, as you think about all the investments you are making in the mall of the future, how do you think effectively the return on that capital will come? Do you think it is going to come direct from the consumer to you, or do you think it is going to come in the form of better sales, better productivity, better margins of your tenants and, therefore, higher rents that are able to be paid to you? And maybe just talk about where we are in your view about how close we are to this mall of the future that you envision?


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Well, I think we are still in the very early stages. I mean I wish we were more along that curve, but it is not easy. I would say to your first -- but there is lots of things we are experimenting with, and I continue to think that, as we do those investments, that the consumer will appreciate them and will lead to more traffic and more visits and more browsing, which is very important. I would say I don't necessarily see -- I see it more as creating a better environment, which will lead to all the benefits of that as opposed to the consumer is going to pay us for it. The consumer, frankly, as we all know, is getting a lot of stuff subsidized right now because of what is going on in the broader world. Delivery, returns, just to name a couple. So I see it more as creating an environment that is going to drive traffic and lead to more demand for retailers wanting to be in those places where traffic is. And more demand, I think, relates to, for us, hopefully we will be able to generate more cash because supply and demand is important in every industry. And, obviously, very important in the real estate industry. So I think it is more that, but I wouldn't rule out the consumer. But I think it is more creating the appropriate environment. To give you a simple answer today and I say we are early days in that, but we are hopeful, and we are hopeful to continue to improve the environment. Michael Bilerman (Analyst - Citibank): I am curious how much buying you have from the retailers to experimenting and bringing more experience based things to their stores and, clearly, doing all this stuff in terms of parking and direct on the consumer side to get them to come to the mall. But is there some retailers that are being better partners in terms of just trying to drive that increased traffic? David Simon (Chairman, and Chief Executive Officer): Yes. I think they are all very focused on it. I think the relationship on that front is excellent. We are getting a lot of cooperation buy-in. It, obviously, depends on the sophistication of the retailer and, frankly, they are very busy, too. But, the good news is when we describe to them what we are trying to achieve and how they can play a role in, they are all very receptive. But they are also all very busy as well. So for us, it is prioritizing the biggest bang for their buck, making it easy as possible in terms of plug and play, almost, to use a technology terminology. We can deliver that to the retailer. That is a lot easier. It gets a little gruesome with the details, which I will spare you and me and everybody else on the call to go into that level. But I think they are being excellent -- they are being very cooperative, and we all want to drive traffic to the physical world. And we all see the benefit of that, and we will continue to experiment and plug along here. Michael Bilerman (Analyst - Citibank): Great. And thanks for the NOI disclosure. Operator: Floris van Dijkum, Boenning. Floris van Dijkum (Analyst - Boenning): Your gross international NOI exposure is 8% today. What is your net exposure, and would you consider expanding your international NOI based on low interest rates that offer in both Europe and in Japan? And in particular, when you look at your European outlets platform, do you think you can expand that by another 3 million square feet over the next five years? David Simon (Chairman, and Chief Executive Officer): Well, look, I think we do want to expand our Asian premium outlet portfolio, but we only want to do it when there is supply and demand and we don't want to do it because of low interest rates. And we feel strongly about our McArthurGlen relationship as well. And the good news is, having been back and forth to see the MGE folks twice in the last four or five weeks, they have a very good pipe. So the answer there is, yes, we want to build out their pipe in continental Europe and the UK. And we certainly want to -- we certainly got a handful of opportunities in Asia as well. And, listen, the low interest rate certainly makes it easier in a sense, but it is always supply and demand. Can we reach lease the building? Can we lease the building and at what rent?


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On your next question, are you asking from a hedging point of view? I wasn't really sure what you meant by the gross versus the net. So maybe if I could ask you again that.

Floris van Dijkum (Analyst - Boenning): Sure. It is both on an asset and obviously you are partly hedged through local debt, but also on an epical contribution in terms of your interest expense in local currencies. What is your interest -- what is your currency risk in that income on both the asset as well as the income side? David Simon (Chairman, and Chief Executive Officer): We certainly hedged -- we are in the high 90s% in terms of our investment, and so that is hedged. But, given -- you can see the NOI contribution. It is not -- it is real dollars once converted, obviously. So there is risk there, and we are not overly leveraged. So we will make some of it on the interest expense as we mark that to dollars on a weighted average quarterly basis. But we have got -- they are extremely profitable. Our debt service ratios are extremely high. So we will never be able to hedge the profitability of that and never be able to -- we don't want to hedge over our investment because then you will have that run through the P&L every quarter and I don't want to do that. We will have the earnings run through the P&L, but I don't want to go outside of currency hedges that would have to be mark-to-market if we are over hedged. And so we have always hedged up to our investment, and I think we are in the 90s% some-odd percentile. (multiple speakers) I hope I answered your question. Floris van Dijkum (Analyst - Boenning): Yes. Partly. The other question I had was regarding your [Certage] JV and in particular maybe, Rick, you can talk about, do you and your partner have similar views on the capital required to redevelop those boxes? Rick Sokolov (President and Chief Operating Officer): Certainly we had the identical vision as to the potential for those boxes. Each of us are going to have to deal with the funding of that when the time comes through their own sources, but they fully recognize that, and we do not perceive that as an issue. Michael Bilerman (Analyst - Citibank): And when do you expect you are going to start your first project there? Rick Sokolov (President and Chief Operating Officer): We are working with Certage, but also working with Sears because we need to go do the pretty complicated process of downsizing these stores, and that is not a straightforward enterprise. Operator: That is all the time that we have for questions for today, so I would like to turn the call back over to David Simon for closing remarks. David Simon (Chairman, and Chief Executive Officer): Thank you for your questions and your interest. We really appreciate it, and we look forward to talking to you in the future. Operator: Ladies and gentlemen, thank you, again, for your participation in today's conference call. All rights reserved (c) 2014 TheStreet, Inc. Please feel free to quote up to 200 words per transcript. Any quote should be accompanied by "Provided by TheStreet" and a link to the complete transcript and www.thestreet.com. Any other use or method of distribution is strictly prohibited. THE INFORMATION CONTAINED IN EACH WRITTEN OR AUDIO TRANSCRIPT (the "TRANSCRIPT") IS A REPRODUCTION OF A PARTICULAR COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION. THE TRANSCRIPTS ARE PROVIDED "AS IS" AND "AS AVAILABLE" AND THESTREET IS NOT RESPONSIBLE IN ANY WAY NOR DOES IT MAKE ANY REPRESENTATION OR WARRANTY REGARDING THE ACCURACY OR COMPLETENESS OF THE TRANSCRIPTS AS PRODUCED, NOR THE SUBSTANCE OF A PARTICULAR COMPANY'S INFORMATION. THE TRANSCRIPTS ARE PROVIDED FOR INFORMATIONAL PURPOSES ONLY. THESTREET IS NOT PROVIDING ANY INVESTMENT ADVICE OR ENDORSING ANY PARTICULAR COMPANY.