You're holding a document that tries to capture what a typical day is like at Simon Property Group. If you're in our industry, you realize that there is no such thing as a typical day.

The same is true at Simon. But when Retail Traffic offered to document a single “not-so-typical day” at Simon, there were some common themes that continued to pop up throughout the day: teamwork, partnership, communication, delivering value and progressive thinking.

On these pages, you'll get a glimpse of something I've believed for a long time — that the employees of Simon Property Group are the best in the world at what we do: namely the developing, managing and leasing of retail properties that matter.

In our short ten-year life as a public company, we have created an industry-leading, well-respected S&P 500 company that is now one of the world's largest publicly traded real estate companies.

I hope you enjoy this ‘inside-the-ropes’ look. Happy reading!

David Simon
Chief Executive Officer
Simon Property Group

Simon World Headquarters
115 West Washington Street
Indianapolis, IN 46204

www.simon.com
NYSE: SPG

8:00 a.m. is 8:00 a.m. regardless of whether you're in the Fashion Center at Pentagon City, the Forum Shops at Caesars in Vegas or Simon Corporate HQ in the heart of the Midwest. 8:00 a.m. comes might early at all of Simon's 246 properties across America.

As the sunrise heralds the arrival of coffee-toting, bagel-nibbling employees, it's a welcome event for night cleaning crews to bid them “Good Morning.”

And Simon Property Group employees, wherever they are, begin their day.

9:00 a.m., and as the mall walkers are making their final lap. Lea Willingham, general manager at The Fashion Mall at Keystone, and Suzanne Yoder, area director of mall marketing, are making the first of many such laps of the day. The pair peers through the gates of retailers preparing to open and see shelves being stocked, cash drawers being counted and chrome being given one final polish.

“I walk the mall every day before opening to be sure if David Simon were to walk through that door, he would approve,” says Willingham.

More than likely, he would. Of all the Simon properties in Indianapolis, The Fashion Mall at Keystone has the highest sales per visitor.

The ultimate responsibility for what goes on at the mall is in the hands of the mall manager, in this case Willingham. Her boss, Scott Mumphrey, executive vice president of property management at Simon, is a former mall manager and knows what's involved.

“It's roughly equivalent to being the mayor of a city,” Mumphrey says, “not necessarily in size but in breadth of responsibilities. A mall manager must be well versed in real estate finance, security, operations, marketing, development and leasing. The management team has to make sure that the owner's philosophy is reflected in the property every minute of every day, because the mall manager represents the ownership to the tenants and customers.

“The manager is the primary representative to the public and has front-line accountability as it relates to the property. The manager is the key person for any piece of real estate,” adds Mumphrey.

Mumphrey is in charge of the management for all properties now but fondly recalls his own days as a mall manager. “I loved it,” he says, “it's a lot like being the captain of a ship at sea that's part of a much larger fleet. If you get into this job and don't relish it, you're in trouble. You can't vacillate. You have to make confident decisions. Mall managers can never come to work expecting it to be a routine day.”

9:30 a.m., and in truth almost everyone at Simon spends a great deal of time walking the malls.

Dennis Cavanagh, executive vice president and C.O.O. of Simon Management Group and Simon Business Network, canvassed eighty different malls last year.

“Walking the malls is still the best way to learn,” he said. “My background is financial, so I generally spend a portion of my day looking at economics, which is exactly how Simon Business Network came to be.

“We looked at all the ways we spend money — everything from trash removal to HVAC to security - and created a better system through aggregation. In its simplest form, Simon Business Network leverages the size of Simon to secure the best companies, the best services and the best pricing. Our goal is to provide these values both to Simon and our tenants.”

By awarding facility and security service contracts nationwide and providing a base of operations for our service providers within the mall, Cavanagh says Simon has effectively created a win-win-win situation.

“Through the Simon work, our Total Facility Support and Total Security Connection providers have a substantial base of operation and a platform to offer similar services to our retailers. Our retailers get better pricing, higher quality and faster response. And Simon reaps the benefits of quality facility support programs and an economic advantage,” says Cavanagh.

How big of an advantage? According to Cavanagh, Simon Business Network delivered $82 million in value in 2003.

With its latest enterprise, Simon Energy Services, the company is taking this success to the next level by aggregated buying, infrastructure investment and by redistributing power to its retailers.

“We have proof, examples,” Cavanagh said. “If we install certain systems, they will pay back in six months. This cuts tenant costs and Simon's costs.”

Another stroll through the mall yields yet another idea, ‘Store in a Box,’ a turnkey solution for new and existing Simon retailers that provides all the basics from credit card processing to office supplies and even construction services.

“Simon is constantly reinventing itself, looking for new ways to do it better, especially for our tenants. Their business is our business,” says Yoder, walking out her door for yet another lap through the mall.

10:00 a.m., the mall doors open, and another shopping day begins. So why are all those kids here instead of in school?

The answer is: they ARE in school.

While malls provide the perfect after-school hangout for many kids, Simon properties are quickly becoming the ideal “during-school” destination for some amazing young individuals.

The Simon Youth Foundation, a not-for-profit organization established in 1998, helps at-risk youth improve their opportunities and realize their potential through education.

Through college scholarships (nearly half a million dollars awarded per year), youth programs and — perhaps most visibly — ERCs (Education Resource Centers) located right on the Simon properties, the Foundation is helping thousands of high school students across the country.

There are currently 17 ERCs in the U.S., all highly visible in Simon malls and working in concert with the public school system.

“These aren't problem kids. They are kids who have problems,” says Dr. Richard Markoff, executive director of the Foundation. “When someone sees a spark in a kid and recommends that he or she be matriculated to one of our ERCs, we are that student's last chance, in many cases.”

ERCs provide small classes, personal attention and special hours designed for students with before school or after-school jobs. All students work at their own pace with programs tailored to their specific educational needs. In many of the ERCs, students punch a time clock to learn responsibility and commit five hours a week to community service.

And it's working. 89% of students who enter as seniors get their diploma, and 60% of graduates further their education through college or advanced trade schools. The ERCs are also offered as a community resource during after-school hours for adult education programs, technology training and even English as a second language classes.

“We're building self esteem in kids who have none,” Markoff said. “And we're getting people involved, especially the Simon employees. They understand what we're doing, and their contributions have increased as a result.

“Simon and its affiliates have pledged to raise $1.5 million from the public this year alone. And they do it with little or no fanfare.”

Markoff is a walking Sports Illustrated who can rattle off the starting line-up of just about any college basketball team from any season. But he's equally capable of citing example after example of Simon Youth Foundation successes.

In twenty minutes, he'll share half a dozen heartwarming stories of teens working against all odds to change their lives: stories so powerful you'll be reaching for your handkerchief along with your wallet.

11:00 a.m., and a one-hour deadline gives a whole new meaning to “high noon.”

The phone rings. “Michael, its David. I need everything you can find on this piece of property that we're looking at in Wisconsin. Oh, and I need it in an hour.”

Michael is Michael P. McCarty (no relation to Michael E. McCarty down the hall), senior vice president of research and corporate communications. And David is David Simon, C.E.O. of Simon Property Group, Inc.

“Ten years ago, this would take a week,” McCarty says as he turns down the David Sanborn CD and picks up the phone, calling his team into action.

Before the hour is even up, McCarty and company have generated a series of satellite photos and maps detailing the population density and income levels within a 30-mile radius of the mall property in question.

“See this?” he asks. “We can tell that there are 350,000 people with an average household income of $55,000 within a half-hour drive of the mall. And they're losing population by 1.5% a year.”

But then McCarty produces a slightly different map displaying a heavy concentration of high-income residents along the lakeshore above and below the property. “Now this gives us a totally different perspective,” he says.

McCarty's group is responsible not only for real estate research, but also consumer and portfolio research as well. They can track performance of a particular tenant to determine how that store compares to other corporate stores.

Technology, he says, is the only way to stay ahead. “As simple as some of these things are, nobody did it before. And the feedback we're getting from our retailers says that we're doing it better than anybody else.”

McCarty says that Simon is considering turning research into a profit center by offering more of its services to retailers.

“Anybody can say 1 + 1 = 2. We take 1 + 1 and come up with 3 or even 4.”

And with that, he is off to lunch, leaving David Simon fully equipped to make a confident business decision.

2:00 p.m., conference room doors open, and a group emerges from the bi-weekly Simon Management Group (SMG) staff meeting, tasks in hand.

“Our bi-weekly meetings keep SMG focused on solutions that will impact the profitability of Simon and its tenants,” says Scott Mumphrey.

“Whether it's an operational program that's relevant to facility or security services or a new product that will be offered to our tenants in the malls, SMG is the hub where direction for Simon property teams is agreed upon and then communicated to the management teams for execution. SMG is about digesting a broad range of industry and company signals and then developing a strategic plan that answers those needs.”

A great example is fixed CAM. “Fixed CAM and expense management are important ‘phenomena’ in the industry right now,” says Mumphrey. “How those topics are addressed with property management, leasing and development ultimately affects the priorities and goals set for each of our management teams.

“It's all about finding the happy medium that brings the best value to both tenant and landlord. Once the medium is agreed on, our mall management teams can execute the plan.”

Down the hall another meeting is just letting out and, oddly, everyone is staring at their thumbs as they exit.

“It's not a thumbprint,” Jim Martin, vice president of Business Development explains. “It's actually 40 recognition points on the finger.”

The employees of Simon Business Network have just witnessed a demonstration of a new technology that could help eliminate credit card fraud and possibly even wallets, utilizing only a scan of a shopper's unique finger image, which cannot be duplicated. Once the finger is ID'd, the registered shopper is given the choice of various payment options.

“We see 5 — 10 new concepts a week,” says Martin, “and not all of them are good, but it's our goal to determine which new business concepts meet the criteria for potential growth within the Simon organization and its properties. We're in a unique position to sell to retailers and consumers. We have the assets to get their attention. It's not big brother saying ‘do this’, it's big brother saying ‘Hey, we tried this. And it works.’”

Simon is always quick to identify and market new ideas and they've built a deep bench of people who understand the retail real estate business.

Back at the mall, Lea Willingham, manager of the Fashion Mall at Keystone in Indianapolis, and a 15-year Simon veteran, is one of those people. She says there's always room for another good idea and a new opportunity.

“We have a wonderful Retail Development Program for mom-and-pop businesses to come into our mall with little risk, no major build-outs or long leases.”

She cites Men's Emporium as an example of entrepreneurial success. “They started at Castleton on a cart, moved to Circle Centre and then relocated here and are doing so well, they want to invest more into the store.”

Simon even has a Best Practices Property Review Team, which visits properties and reports on successes for implementation throughout the company.

Beginning in the parking lot.

“We combined three valet services at a middle market center to great success,” Mumphrey said. “We still have three valet locations at the mall, but under one management. So we can maintain service, leverage wages, even move employees from one location to another as needed.”

Security is another key issue, and Simon is always looking for ways to protect their customers. “We have to constantly be aware,” Willingham said. “Even when contractors come in to work in a particular store's space, we badge them in and verify with the stores that they are there to do the work.”

One of the most recent successes involves the concept of hiring parents to help police the malls during heavy teen usage (usually Friday and Saturday nights) in centers such as Circle Centre in Indianapolis.

This unconventional approach actually helped reduce incidents. “It's one thing to deal with a security guard,” Mumphrey offered. “It's quite another to deal with somebody's mom.”

5:00 p.m. and from down the hall, Steve Sterrett hears the sweet, sweet gong of success.

“John's done it again,” he smiles and goes back to reviewing financials. As C.F.O. of Simon, he has strong reason to be smiling.

“We have assimilated a portfolio of assets that is unparalleled,” Sterrett says. “Our industry consolidated so fast, it was like a California land grab. And now we've got 30% of the best malls in America.”

Add to that list the Stanford Shopping Center in Palo Alto, California, the reason behind the gong still resonating at the hand of John Neutzling, executive vice president of Simon. The gong, Neutzling says, is rung to celebrate the closing of a deal.

Neutzling spends a great deal of his day working with joint venture partners in real estate. In this particular case: Stanford Management Company which represents the Board of Regents at Stanford University and sold the 1.3 million square-foot-retail center in Palo Alto to SPG.

“It's a ground lease similar to our arrangement with Caesars Palace in Las Vegas,” Neutzling says. “We bought the buildings but the University still owns the land and we work very closely with Stanford Management Company.”

Neutzling credits communication and resources as key factors to maintaining relationships like these. “Prior to concluding the transaction we had thorough conversations with our new partner. We discussed the history of the project, its weaknesses, opportunities for enhancement and the facets which cause it to be unique. We met with the representatives and asked them, ‘What are your goals? Your sacred cows?’

“This is one of the most prime retail spaces in the country in an extraordinary setting so we immediately made a commitment to keeping the very special ‘sense of place’ which is unique to Stanford Shopping Center. Also, our leasing team is bringing in a new group of luxury/upscale retailers that didn't already exist there.”

Both Neutzling and Sterrett cite Simon's retail partners as a key component to the company's success. “It helps,” Neutzling adds, “that we work to insure our retailers make more money with us than anyone else.”

Simon's size certainly doesn't hurt either. “With our scale, our merchants have more opportunities,” Neutzling said. “We have more internal and external resources, AND we have extremely resourceful colleagues.”

“Our culture has always been one of innovation and aggressiveness on the business side,” Sterrett said. “But on the financial side, it's very conservative. We're plain vanilla.”

Sterrett credits the company's Midwestern roots for its financial growth. “There's a certain business ethic that comes out of the Midwest. There are better investment returns, less corporate malfeasance. I think a lot of that has to do with the Simons themselves. When the family name is on the door, you tend to think like owners and not managers.”

For investors, Sterrett says SPG is a safe and secure business model. “The nature of our business means we can't grow earnings by 20% a year, however, we can make a very safe 7-8% with very little risk.”

So what's next? Sterrett reaches across his desk for a can of Coca-Cola (a Simon partner, incidentally). “This is the goal now. We're already the biggest and best real estate company in the U.S. and continuously working to be a world class company.”

He takes a sip, even as the distinctive timbre of Chinese metal forging rings through the Simon hallways.

6:30 p.m. as Michael E. McCarty, president of Simon's Community Center Division, walks into his house and is promptly blindsided by his twelve-year-old daughter Ali.

“What did you do today, Dad?”

McCarty hesitates, thinks for a moment, and realizes, “Honey, I communicated.”

As a 25-year Simon employee and the man ultimately responsible for more than 85 retail community centers across the country, McCarty likens himself to the conductor of an orchestra.

“My job is to negotiate the labyrinth of Simon to find the right person out of the 900 people here at the home office. To assemble the team of developers, leasing agents and managers and make sure they have everything they need to accomplish their goals. We have the tools in house, and we have the history and precedents to know how to make good decisions without over-analyzing every detail.

“We brainstorm, and we have constructive disagreements, which I love! It raises the bar.

“A perfect example is bathrooms. There was a lot of debate internally about public restrooms in open-air lifestyle centers. So we looked at the demographics and decided ‘Yes! Our shoppers are not comfortable with walking into a restaurant just to use the restroom. They deserve nice, clean public restrooms.’”

As a communicator, McCarty is accustomed to 200-300 e-mails a day and spends a great deal of time talking to other developers and landowners. He is also one of the most sought-after speakers with the I.C.S.C. (International Council of Shopping Centers).

“If we're successful, it's because we do a good job at communicating. And if I do my job as conductor right, no one even knows if I'm around or not.”

That gives McCarty time to do what he really loves: forecasting. Tomorrow is already planned. His month is already planned. He's looking months down the road and at new projects for 2005 and beyond.

And what does he see in the future? “We're looking at non-retail uses in our centers: educational, residential, even cultural. Perhaps even…live theatre?”

That may be something to ponder tomorrow morning on the drive to the office.

7:30 p.m. and in this mall, down this hall, Chef Sara Moulton has a crowd to enthrall.

It's been a long day for Lea Willingham and Suzanne Yoder, but months of planning and preparation are finally reaching fruition as nationally-renowned chef Sara Moulton engages the multitudes who have come from miles around to witness her culinary prowess in action.

The Fashion Mall at Keystone is wall-to-wall human stew, but the crowds are well behaved and attentive, hanging on Moulton's every word. The air is teeming with excitement and … is that cilantro?

“What do you think?” Willingham asks Yoder. “More than the Idols drew?”

“Hard to tell,” Yoder responds. “They're more sedate. When the Idols were here, it was sheer pandemonium.”

The “Idols” to which they are referring are the American Idols, a nationwide phenomena which brought mass hysteria to Simon malls across the country in 2003, thanks to Simon Brand Ventures and its unique relationship with Coca-Cola, sponsor of the immensely popular program.

“Of the 246 malls that we own, we generate traffic to the tune of 2 billion people a year,” said Stewart Stockdale, Simon's chief marketing officer and president of Simon Brand Ventures. “Approximately one-third of Americans shop at a Simon mall every year. If you take the NBA, NFL, NASCAR, all the major sports combined, their events would only equal one-fourth of our traffic. We are a PEOPLE machine.”

Hence, Simon Brand Ventures, the relatively new consumer arm of the company that monetizes the vast traffic generated daily, is in effect, making commerce from commerce. Exhibit #1 might be the wild success of the Simon Gift Card, which generated $340 million in sales in 2003.

“In the past, shopping malls grew up individualistically, as stand-alone entities,” Stockdale said. “Now, we look at ourselves on a portfolio — or network — level. We really are the only mall operator in this country with a national footprint.”

And an impressive footprint at that, leading to strategic partnerships with Coca-Cola, Cingular, Visa and the like. Not to mention a new relationship with Arbitron to quantify just how effective mall marketing truly is.

“The malls are a perfect way for brands to reach consumers. Not only can you send your message through a media channel at the mall; you can sample the product and hopefully make the sale. Plus, there are opportunities for activity-based marketing like the American Idol tour and the Simon Super Chefs Live! event.”

Which makes Simon's current advertising theme, “More Choices,” as applicable to its marketing partners as it is to consumers.

There's a popular anecdote told and re-told throughout the company about Melvin Simon, co-founder, once saying that he wanted to charge every person who entered his mall a dollar. At the time, everyone laughed.

This year, Simon Brand Ventures plans to generate $85 million in revenue. And Melvin gets the last laugh.

10:00 p.m., the mall doors are locked, the final guests bid goodnight. It is the end of a long day, and the beginning of another.

While it's closing time in most of America, a new day is dawning in other parts of the world. And Simon is already at work.

Enter Simon's international business initiative in Europe, which will help Simon bring its tried-and-true business practices to the world marketplace.

Soon, Simon will pilot Simon Business Network programs in select European properties.

“We're exporting our intellectual capital,” said Cavanagh. “Helping companies overseas implement the same successful programs in their respective markets.”

Meanwhile, back at home, Simon is building four new open-air centers of its own in Indianapolis, Jacksonville, Austin and Dallas, while the Phase III expansion of The Forum Shops at Caesars nears completion.

Somewhere deep within Simon's headquarters in Indianapolis, Indiana, a gong is ringing.