Simon Property Group Announces Elimination of Paired Share Structure
INDIANAPOLIS, Jan. 3 /PRNewswire-FirstCall/ -- Simon Property Group, Inc.
(NYSE: SPG) (the "Company") today announced that it has eliminated its paired
share structure. Effective December 31, 2002, SPG Realty Consultants, Inc.
was merged into SPG, ending the "paired share" REIT structure that SPG had
gained from its 1998 combination with Corporate Property Investors, Inc. All
of the outstanding stock of SPG Realty Consultants was previously held in
trust for the benefit of the holders of common stock of SPG.
Although SPG Realty Consultants was able to conduct activities which are
not customary for a real estate investment trust, changes in laws since 1998
significantly reduced the need for a paired share REIT structure. Many of the
activities previously conducted through SPG Realty Consultants are now
conducted through various taxable REIT subsidiaries ("TRS") of SPG.
As a result of the merger, SPG stockholders who were previously the
beneficial owners of the SPG Realty Consultants stock are now, by virtue of
their ownership of SPG common stock, the owners of the assets and operations
formerly owned or conducted by SPG Realty Consultants.
The Company also announced that as of January 1, 2003, its partnership
subsidiary, Simon Property Group, L.P., acquired all of the remaining equity
interests of M.S. Management Associates, Inc. ("MSM"). MSM provides
management, leasing and other services for certain of the Company's
properties. The interests acquired consist of 95% of the voting common stock
of MSM and approximately 3% of the economic interests of MSM. The interests
were acquired from certain Simon family members, the founders of the Company,
for a total purchase price of $425,000, which was equal to the appraised value
of the interests as determined by an independent third party. The acquisition
was approved by the independent directors of SPG.
At the time of the Company's initial public offering in 1993, the ability
of a REIT to engage in management, leasing and other activities was severely
restricted by existing tax laws. MSM was organized as a "preferred stock
subsidiary" in 1993 to conduct these activities on behalf of the Company. The
Simon family members paid $500,000 for their equity interests in MSM.
Subsequent tax law changes and the creation of the TRS have eliminated the
need for preferred stock subsidiaries. Effective with this transaction, MSM
is now a wholly owned TRS of Simon Property Group, L.P.
Simon Property Group, Inc. (NYSE: SPG), headquartered in Indianapolis,
Indiana, is a real estate investment trust engaged in the ownership and
management of income-producing properties, primarily regional malls and
community shopping centers. Through its subsidiary partnerships, it currently
owns or has an interest in 246 properties containing an aggregate of 184
million square feet of gross leasable area in 36 states, as well as eight
assets in Europe and Canada. Additional Simon Property Group information is
available at www.shopsimon.com .
SOURCE Simon Property Group, Inc.
Investors, Shelly Doran, +1-317-685-7330, or Media, Les Morris,
+1-317-263-7711, both of Simon Property Group, Inc.