As of June 30, occupancy for mall and freestanding stores in its regional malls was 91.6%, which is essentially unchanged from the same date in 2002. Comparable retail sales per sf increased to $393 by June 30, 2003, up slightly from $390 at June 30, 2002. Average base rents for mall and freestanding stores in the regional mall portfolio were $31.47 per sf at June 30, 2003, an increase of $1.44 or 5%, from June 30, 2002. The average initial base rent for new mall store leases signed during the first six months of 2003 was $42.90, an increase of $10.11 or 31% over the tenants who closed or whose leases expired.

Diluted FFO for the second quarter 2003 was $196.9 million, or $0.96 per share. In the year-earlier period, diluted FFO was $152.6 million, or $0.81 per share. Simon attributes the rise in FFO to assets acquired from Rodamco North America N.V. in May 2002 and a rebounding economy that has boosted revenue at its properties in Florida and other tourism-driven properties. Net income for the second quarter 2003 was $50.3 million. In the year-earlier period net income was $173.2 million due to the sale of six properties. Simon says it expects net income per share for the year to be within a range of $1.54 to $1.57 and FFO to be within a range of $4.05 to $4.08.

On July 1, Simon announced is purchasing for $333 million the Stanford Shopping Center in Palo Alto, CA, one of the most successful regional malls in the United States with 2002 total sales in excess of $500 million and comparable tenant sales per square foot of approximately $600. Stanford University, as required under its Founding Grant, will continue to hold, as lessor, a long-term ground lease underlying the asset. The acquisition is expected to close in mid August.