NYSE: SPG

SIMON PROPERTY GROUP INC

Simon Property Group Inc., headquartered in Indianapolis, is a real estate investment trust (REIT) that develops, owns and manages income-producing properties, including regional malls, premium outlet centers, the Mills portfolio, community/lifestyle centers, shopping centers, and an international portfolio. As of September 30, 2010, SPG had an interest in or owned 393 properties in North America, Asia and Europe, with 264 million square feet of gross leasable space. SPG is a member of the S&P 500 Index.

Report created Jan 26, 2011 Page 1 OF 5

Argus Recommendations
Twelve Month Rating SELL HOLD BUY Five Year Rating SELL HOLD BUY Sector Rating
Under Market Over Weight Weight Weight

Analyst's Notes
Analysis by John Eade, November 11, 2010 ARGUS RATING: BUY SPG: Upgrading to BUY with target of $112 We are raising our rating based on our expectations for SPG in the context of the current real estate up-cycle, which we believe is still in its early stages. During the last cycle, SPG climbed consistently for 6.5 years, and its market cap increased by a factor of 5.2. We are adjusting our FFO estimates for 2010 and 2011, with a clear bias to the upside. We are also raising our financial strength rating to Medium from Medium-Low. Blending our valuation approaches, we arrive at a 12-month trading range of $91-$112. INVESTMENT THESIS We are raising our rating on Simon Property Group Inc. (NYSE: SPG) to BUY from HOLD, and setting a target price of $112. We have been looking for a pullback in the stock price for several months as a potential buying opportunity. However, the shares continue to push to new highs. Consequently, we are looking at the stock not on the basis of this year's earnings or valuation, but in the context of the entire real estate cycle. During the last cycle, SPG climbed consistently for 6.5 years, and its market cap increased by a factor of 5.2. We think the current real estate up-cycle is in the early stages, at best. Given low interest rates and modest construction activity, we expect that the environment will be positive for REITS for at least the next several quarters. RECENT DEVELOPMENTS SPG shares have been strong performers over the past year, rising 42% while the market has gained 10%. Over the past quarter, the stock has shown relative strength, rising 14% while the market is up 12%. Since July 2009, the shares have demonstrated a promising pattern of higher highs and higher lows, with seven peaks and six troughs. SPG reported third-quarter as-adjusted FFO, including the extinguishment of debt, of

Argus assigns a 12-month BUY, HOLD, or SELL rating to each stock under coverage. BUY-rated stocks are expected to outperform the market (the benchmark S&P 500 Index) on a risk-adjusted basis over the next year. HOLD-rated stocks are expected to perform in line with the market. SELL-rated stocks are expected to underperform the market on a risk-adjusted basis. The distribution of ratings across Argus' entire company universe is: 51% Buy, 44% Hold, 5% Sell.

Key Statistics
Key Statistics pricing data reflects previous trading day's closing price. Other applicable data are trailing 12-months unless otherwise specified

Market Overview
Price Target Price 52 Week Price Range Shares Outstanding Dividend $100.56 $112.00 $68.76 to $106.54 292.89 Million $3.20 Financial MARKET WEIGHT 15.00% MEDIUM 76.5% 30.5% 12.8% 0.65 -$3.87 Billion $496.54 Million 15.38 20.27 7.62 6.18 $16.27 $29.45 Billion

Sector Overview
Sector Sector Rating Total % of S&P 500 Market Cap.

Financial Strength
Financial Strength Rating Debt/Capital Ratio Return on Equity Net Margin Payout Ratio Current Ratio Revenue After-Tax Income

Market Data
Price
($) 100 80 60 40

Pricing reflects previous trading week's closing price.

Target Price: $112.00 52 Week High: $106.54 52 Week Low: $68.76 Closed at $99.53 on 1/21

200-Day Moving Average

Valuation
Current FY P/E Prior FY P/E Price/Sales Price/Book Book Value/Share Market Capitalization

Rating EPS
($)

BUY HOLD SELL

Forecasted Growth
1 Year EPS Growth Forecast -8.99% 5 Year EPS Growth Forecast 8.00% 1 Year Dividend Growth Forecast 33.33%

Quarterly Annual

1.46

1.00 6.42

1.61

1.86

1.61

0.96 5.45

1.38

1.50

0.94

1.39 0.90 1.73 4.96 ( Estimate)

1.53

1.54 1.61 1.86 6.54 ( Estimate)

Revenue
($ in Bil.)

Risk
0.9 0.9 3.7 0.9 1.0 0.9 0.9 3.7 0.9 1.0 0.9 0.9 1.0 1.1 3.9 ( Estimate) 1.0 1.0 1.1 1.2 4.2 ( Estimate)

Quarterly Annual

Beta Institutional Ownership

1.53 92.79%

FY ends Dec 31

Q1

Q2 Q3 2008

Q4

Q1

Q2 Q3 2009

Q4

Q1

Q2 Q3 2010

Q4

Q1

Q2 Q3 2011

Q4

Please see important information about this report on page 5 2011 Argus Research Company

Argus Analyst Report

NYSE: SPG

SIMON PROPERTY GROUP INC

Analyst's Notes...Continued
$0.90 per share. Minimum rental revenue rose 6.1% -- a 380-basis-point sequential improvement -- to $605 million, while total revenue rose 6% to $979 million. For the first nine months of the year, adjusted FFO came to $3.69 per share, and total revenue of $2.8 billion was up 3.3%. Management has adjusted its full-year 2010 FFO per share guidance range to $4.90-$4.95 from $5.30-$5.40, including the impact of a loss on extinguishment of debt in 1Q and 3Q. However, despite the nominally lower guidance, management has effectively raised its outlook as the debt-loss total is $1.00 per share. EARNINGS & GROWTH ANALYSIS We are adjusting our 2010 FFO per share estimate in keeping with the Street convention of including the loss on the extinguishment of debt. After factoring in this charge, our new estimate is $4.96. We are raising our 2011 estimate to $6.54 from $6.35. Our long-term growth rate forecast remains 8%. Critical operating trends and forecasts for the primary company's business lines are as follows: -- Occupancy. This is strong - 93.6% -- and getting stronger, as year-earlier occupancy was 92.8%. -- Pricing. Average rent per square foot of $38.69 was up 1% from $38.35 a year ago. -- Tenant trends. Tenants experienced a 10.6% increase in sales during 3Q. Comparable sales per square foot were $483 during the

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quarter, up 8% year-over-year. We look for growth of 3%-5% in overall industry sales during the holiday season. -- Acquisitions. The company acquired Prime Outlets Acquisition Company, consisting of 21 outlet centers. The purchase price was $2.3 billion. FINANCIAL STRENGTH & DIVIDEND We are raising our financial strength rating on Simon Property Group to Medium from Medium-Low. Moody's rates the company Baa1, with a stable outlook. Simon's balance sheet is highly leveraged. At the end of 3Q10, including its joint venture obligations, the company had approximately $26.5 billion in debt, and its long-term debt/capital ratio was 82%. Cash totaled $2.3 billion. On the income statement, EBITDA covered interest expense by a factor of 3.0. Although those ratios are on the weak side compared to the industry, the quality of Simon's assets gives creditors a high level of comfort that they will be repaid. Consider: in August, Simon sold $900 million of senior unsecured notes with a coupon rate of 4.375%. This was the lowest coupon for a 10-year REIT bond offering in history. The company estimates that it has $1.6 billion in debt coming due in 2011, $2.8 billion in 2012, $3.1 billion in 2013, and $2.8 billion in 2014. Simon recently announced a 33% increase in its quarterly dividend to $0.80 per share, or $3.20 annually, for a projected

Growth & Valuation Analysis

GROWTH ANALYSIS ($ in Millions, except per share data) Revenue COGS Gross Profit SG&A R&D Operating Income Interest Expense Pretax Income Income Taxes Tax Rate (%) Net Income Diluted Shares Outstanding EPS Dividend GROWTH RATES (%) Revenue Operating Income Net Income EPS Dividend Sustainable Growth Rate VALUATION ANALYSIS Price: High Price: Low Price/Sales: High-Low P/E: High-Low Price/Cash Flow: High-Low 2005 3,167 18 1,205 799 370 16 4 476 223 1.81 2.78 22.5 58.2 -14.2 7.7 -14.2 - - - 2006 3,332 105 1,320 822 564 224 2.17 3.02 5.2 9.5 18.5 72.4 8.6 -6.0 $99.39 $72.71 6.7 - 4.9 45.7 - 33.5 17.5 - 12.8 2007 3,651 455 3,196 251 1,535 946 491 225 1.94 3.33 9.6 16.3 -12.9 -5.0 10.5 -9.1 $118.37 $78.87 7.3 - 4.9 61.2 - 40.8 18.3 - 12.2 2008 3,783 456 3,327 371 1,543 947 596 -4 464 226 1.87 3.57 3.6 0.5 -5.6 -9.4 7.1 -14.4 $101.63 $32.26 6.1 - 1.9 54.3 - 17.2 14.4 - 4.6 2009 3,775 426 3,350 319 1,407 992 392 5 1 309 268 1.05 0.92 -0.2 -8.8 -33.3 -43.9 -74.1 1.0 $83.82 $23.73 6.0 - 1.7 79.8 - 22.6 13.1 - 3.7

Financial & Risk Analysis

FINANCIAL STRENGTH Cash ($ in Millions) Working Capital ($ in Millions) Current Ratio LT Debt/Equity Ratio (%) Total Debt/Equity Ratio (%) RATIOS (%) Gross Profit Margin Operating Margin Net Margin Return On Assets Return On Equity RISK ANALYSIS Cash Cycle (days) Cash Flow/Cap Ex Oper. Income/Int. Exp. (ratio) Payout Ratio 2007 502 611.3 611.3 87.6 42.0 11.9 1.9 14.8 138.8 2008 774 3,865 8.21 702.9 702.9 87.9 40.8 11.2 1.8 15.7 1.6 161.5 2009 3,958 7,000 12.34 422.2 422.2 88.7 37.3 7.5 1.1 8.1 1.4 192.5

The data contained on this page of this report has been provided by Morningstar, Inc. ( 2011 Morningstar, Inc. All Rights Reserved). This data (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. This data is set forth herein for historical reference only and is not necessarily used in Argus analysis of the stock set forth on this page of this report or any other stock or other security. All earnings figures are in GAAP.

Please see important information about this report on page 5 2011 Argus Research Company

Argus Analyst Report

NYSE: SPG

SIMON PROPERTY GROUP INC

Analyst's Notes...Continued
yield of about 3.2%. The first payment at the new rate will be made on November 30 to holders of record as of November 16. MANAGEMENT & RISKS David Simon has been chairman of Simon Property Group since October 2007 and CEO since 1995. Mr. Simon was president of the company from 1993 to 1996 and executive vice president of Melvin Simon & Associates, Inc. (the predecessor company) from 1990 to 1993, after joining the company in 1990. Richard S. Sokolov is president and COO, and has served in this role since 1996. Investors in SPG face a range of industry and company-specific risks. REITS are vulnerable to higher labor and raw material costs, as well as to weakness in consumer and business spending. In particular, if consumer spending declines dramatically, some of SPG's tenants could close stores or face bankruptcy. The company is also highly indebted, and if credit markets were to freeze again, management could face difficulty paying off maturing debt. In terms of group base rent, the company's top mall store retail tenants as of the end of 3Q10 included The Gap Inc., Limited Brands Inc., Abercrombie & Fitch, Foot Locker, Luxottica Group and Zale Corp. Collectively, this group accounted for 10% of total base minimum rent. Simon's top anchor tenants - which pay substantially less in rent than the specialty stores - include Macys, Sears Roebuck, J.C. Penney and Dillard's. Although these tenants account for a very

Report created Jan 26, 2011 Page 3 OF 5

visible 29% of total company square footage, they account for just 1.3% of total base minimum rent. Simon has international operations that generate less than 5% of NOI. These operations include outlets in Japan, Mexico and South Korea, as well as shopping centers in France, Italy and Poland. COMPANY DESCRIPTION Simon Property Group Inc., headquartered in Indianapolis, is a real estate investment trust (REIT) that develops, owns and manages income-producing properties, including regional malls, premium outlet centers, the Mills portfolio, community/lifestyle centers, shopping centers, and an international portfolio. As of September 30, 2010, SPG had an interest in or owned 393 properties in North America, Asia and Europe, with 264 million square feet of gross leasable space. SPG is a member of the S&P 500 Index. INDUSTRY We recently raised our rating on the Financial Services sector to Market-Weight from Under-Weight. Positive factors for the sector include strong earnings estimates that are being upwardly revised and attractive valuations. But risks remain high given the state of the housing market. The sector accounts for 15.3% of the S&P 500. Over the past five years, it has ranged from 12% to 22%. We think the sector should account for 14%-17% of diversified portfolios. The sector

Peer & Industry Analysis

The graphics in this section are designed to allow investors to compare SPG versus its industry peers, the broader sector, and the market as a whole, as defined by the Argus Universe of Coverage. The scatterplot shows how SPG stacks up versus its peers on two key characteristics: long-term growth and value. In general, companies in the lower left-hand corner are more value-oriented, while those in the upper right-hand corner are more growth-oriented. The table builds on the scatterplot by displaying more financial information. The bar charts on the right take the analysis two steps further, by broadening the comparison groups into the sector level and the market as a whole. This tool is designed to help investors understand how SPG might fit into or modify a diversified portfolio.

Growth
25

P/E
SPG vs. Market SPG vs. Sector
More Value More Growth

HST EQR PSA BXP

20

Price/Sales

SPG
VNO

SPG vs. Market SPG vs. Sector

More Value More Growth

REG HCP
15

Price/Book
SPG vs. Market SPG vs. Sector
More Value More Growth

KIM

P/E

Value

PEG
SPG vs. Market SPG vs. Sector
More Value More Growth

5-yr Growth Rate(%) 5-yr Growth Rate (%) 8.0 5.0 7.0 7.0 6.0 7.0 6.0 6.0 6.0 6.4 Current FY P/E 20.3 22.6 16.1 23.8 21.0 23.9 16.5 15.0 17.6 19.6 Net Margin (%) 12.8 41.0 9.0 6.9 10.2 -4.5 18.2 16.5 15.1 13.9 1-yr EPS Growth (%) 31.9 15.9 2.8 10.4 1.6 31.6 20.4 2.5 3.3 13.4 Argus Rating BUY BUY BUY HOLD HOLD BUY BUY BUY BUY

Market Cap Ticker Company ($ in Millions) SPG Simon Property Group Inc 29,453 PSA Public Storage Inc 18,181 VNO Vornado Realty Trust 15,920 EQR Equity Residential 14,962 BXP Boston Properties Inc 12,786 HST Host Hotels & Resorts Inc 12,073 HCP Health Care Ppty Investors In 11,334 KIM Kimco Realty Corp 7,254 REG Regency Centers Corp 3,466 Peer Average 13,937

5 Year Growth
SPG vs. Market SPG vs. Sector
More Value More Growth

Debt/Capital
SPG vs. Market SPG vs. Sector
More Value More Growth

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Argus Analyst Report

NYSE: SPG

SIMON PROPERTY GROUP INC

Analyst's Notes...Continued
has not performed well in 2010, trailing the S&P 500 on a year-to-date basis and performing only in line in 4Q10. Turning to fundamentals, the picture has become more favorable. The projected P/E ratio on 2011 earnings is 10.8 versus the market multiple of 13.0. But the price/sales ratio of 2.9 tops the market average of 0.9, and the PEG ratio of 2.3 is ahead of the market reading of 1.8. As for earnings expectations, the outlook for 2010 is bullish - analysts are now calling for 252% growth from depressed 2009 levels, and for a gain of 16% in 2011. Yields are below average, as many banks, REITS and insurance companies slashed or suspended dividends during the financial crisis. Real Estate Investment Trusts have been strong performers in 2010, as occupancy rates have started to rise and rental rates have stabilized. We look for continued solid returns, as margins and rental rates remain 10%-20% below cycle highs. VALUATION SPG shares have traded between $68 and $107 over the past 52 weeks, and are currently trading at 15.5-times our 2011 FFO per share forecast, near the high end of the historical range of 5.0-16.0. The stock is also trading at a price/sales ratio of 7.8, above the high end of the historical range of 2.1-7.5. On a price/book basis, the stock is trading at a multiple of 6.3, in the middle of the five-year range of 2.7-9.0. Versus the peer group, though, valuations are more reasonable. The P/E of 16 is below the industry average of 17. The premium to our estimate of NAV is 3%, versus an industry average of 11%. Blending our valuation approaches, we arrive at a 12-month trading range of $91-$112. We are setting our target price at the high end of the range. On November 11 at midday, BUY-rated SPG traded at $101.39, down $1.75.

Report created Jan 26, 2011 Page 4 OF 5

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Argus Analyst Report

NYSE: SPG

METHODOLOGY & DISCLAIMERS

About Argus
Argus Research, founded by Economist Harold Dorsey in 1934, has built a top-down, fundamental system that is used by Argus analysts. This six-point system includes Industry Analysis, Growth Analysis, Financial Strength Analysis, Management Assessment, Risk Analysis and Valuation Analysis. Utilizing forecasts from Argus Economist, the Industry Analysis identifies industries expected to perform well over the next one-to-two years. The Growth Analysis generates proprietary estimates for companies under coverage. In the Financial Strength Analysis, analysts study ratios to understand profitability, liquidity and capital structure. During the Management Assessment, analysts meet with and familiarize themselves with the processes of corporate management teams. Quantitative trends and qualitative threats are assessed under the Risk Analysis.

Report created Jan 26, 2011 Page 5 OF 5

And finally, Argus Valuation Analysis model integrates a historical ratio matrix, discounted cash flow modeling, and peer comparison. THE ARGUS RESEARCH RATING SYSTEM Argus uses three ratings for stocks: BUY, HOLD, and SELL. Stocks are rated relative to a benchmark, the S&P 500. A BUY-rated stock is expected to outperform the S&P 500 on a risk-adjusted basis over a 12-month period. To make this determination, Argus Analysts set target prices, use beta as the measure of risk, and compare expected risk-adjusted stock returns to the S&P 500 forecasts set by the Argus Market Strategist. A HOLD-rated stock is expected to perform in line with the S&P 500. A SELL-rated stock is expected to underperform the S&P 500.

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2011 Morningstar, Inc. All Rights Reserved. Certain financial information included in this report: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

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Argus Analyst Report