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## 2012 

The year is off to an excellent start. In addition to the Klépierre transaction, we acquired our joint venture partner Farallon Capital’s stake in 26 Mills assets for $1.5 billion. The acquisition will be immediately accretive to FFO. 

This was a compelling opportunity for us to expand our investment in a portfolio of assets that we know well and already manage. These properties have considerable consumer brand equity and large trade areas, and they generate significant cash flow and total sales volume. 

We now own 100% of several of these high-quality, well-positioned properties, including Sawgrass Mills in Miami. Sawgrass Mills comprises over 2.2 million square feet of outlet, value-oriented and entertainment retailers and generates total annual retail sales in excess of $1 billion. This center is one of the most visited tourist destinations in the U.S. 

Upside exists throughout this portfolio through redevelopment opportunities. For example, we are replacing an anchor tenant at Sawgrass Mills with over 90,000 square feet of big box and small shop space. In addition, a 36,000 square foot expansion of The Colonnade Outlets at Sawgrass Mills, which houses the luxury outlet retailers, is well underway. 

We completed two successful offerings in connection with the Klépierre and Mills transactions – we sold 9,137,500 common shares at $137.00 per share and sold $1.75 billion of senior unsecured notes in three series. The weighted average interest rate for the notes is 3.39% and the weighted average term is 14.7 years. The coupon on all three series of unsecured notes was the 

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lowest ever achieved by a REIT, once again proving our industry leadership position. All three rating agencies affirmed their SPG ratings subsequent to the Klépierre and Mills transactions. Never willing to sacrifice the balance sheet for the sake of growth is a mantra from which I will not waiver. 

On March 16th, Simon Property Group was added to the S&P 100 Index. We are delighted and honored to be included in this prestigious index, a sub-set of the S&P 500 Index that measures the performance of large cap companies in the U.S. It is comprised of 100 major, blue chip companies across multiple industry groups. Simon Property Group is the only real estate company in the index. 

## In Summary 

Our management team is highly respected and capable. We have an infrastructure that enables execution at consistently high levels across all aspects of our business. We want to improve, we are never satisfied, and we like to compete. 

We will continue to seek additional op- portunistic transactions. I believe that we have the expertise, the discipline, the capital, and the organization to identify, evaluate and successfully execute transactions better than anyone else in the real estate business. 

We have the strongest balance sheet in the industry. This affords us excellent access to low-cost capital, which was evident earlier this month when we successfully accessed the debt and equity markets to prudently fund the Klépierre and Mills transactions. 

Our returns are growing, which will enable us to pay higher dividends and still reinvest in our portfolio, generating 

higher returns and continuing to reduce our cost of capital. I firmly believe that we will continue to grow our company and deliver excellent results, as we have demonstrated consistently since our IPO in 1993. We are very well positioned for 2012, with our portfolio of strong- performing, irreplaceable assets, and our focus remains on enhancing long-term stockholder value. As a result of this, I am confident we can deliver another year of record earnings growth. 

I would like to thank all of my colleagues at Simon Property Group for their contribution to our many achievements in 2011 and ask for their continued dedication in producing a great 2012. Their hard work and commitment to our Company is critical to our success. 

I would also like to thank our Board of Directors for their strategic guidance. Linda Walker Bynoe will retire from our Board at the 2012 Annual Meeting. Linda has served the Company with dedication throughout her nine year tenure and we thank her for her many contributions. 

I thank you, our stockholders, for your continued support. We value your comments, insights and questions. 

Sincerely, 

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March 26, 2012 

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