Good day, ladies and gentlemen, and welcome to the second quarter 2008 Simon Property Group earnings conference call. My name is Towanda, and I will be your coordinator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Mr. Shelly Doran, Vice President of Investor Relations. You may proceed, ma’am.

Welcome to the Simon Property Group’s second quarter 2008 earnings conference call. Please be aware that statements made during this call that are not historical may be deemed forward-looking statements. Actual results may different materially from those indicated by forward-looking statements due to a variety of risks and uncertainties. Please refer to our filings with the Securities and Exchange Commission for a detail discussion of these risks and uncertainties. Acknowledging the fact that this call may be webcast for some time to come, we believe it is important to note that today’s call includes time sensitive information that may be accurate only as of today’s date, July 28, 2008. The Company’s quarterly supplemental information package was filed earlier this morning as a Form 8-K. This filing is available via mail or email and it is posted on our website in the Investor Relation sector under Financial Information, Quarterly Supplemental Packages. Participating in today’s call will be David Simon, Chairman and Chief Executive Officer; Rick Sokolov, President and Chief Operating Office; and Steve Sterrett, Chief Financial Officer. Now, I will turn the call over to Mr. Simon.

Good morning and thanks for joining the call. I’m just going to take a few minutes to discuss the highlights and then open it up for your questions. Second quarter FFO was $1.49 per share, up 13.7% over the prior year. Please note that this growth was achieved in spite of the $20.3 million extinguishment charge incurred in connection with the redemption of $200 million of [mopper] notes. These notes, which matured on June 15th, contain a re-pricing mechanism that allowed the underwriter to remarket the issuance as a new 20-year SPG security. An exchange for this remarketing right, we received an $8 million payment from the underwriter when the moppers were issued in 1998. This remarketing feature would haves resulted in the issuance of above market rate debt due to Treasury rates being lower than when the debt was originally issued and marketing conditions on the exchange date; therefore, we elected to simply retire the notes and pay the premium. As a result of the redemption, we expect to save approximately $5 million annually in interest expense over the 20-year term that these notes would’ve been in place had they been remarketed and reissued as compared to current rates available to us from other financing activities. Excluding the impact of this one-time charge, diluted FFO per share increased 19.1% for the quarter to $1.56. We continue to benefit from the impact of solid operating results from all of our five property platforms. As well as decreasing LIBOR rates, results were also positively impacted by cost control, including our energy efficiency efforts. Occupancy in the mall portfolio was down 20 basis points as compared with the year earlier period. Square footage lost to bankruptcy for the first six months of 2008 totaled 151,000 square feet as compared to 30,000 square…

(Operator Instructions) Your first question comes from the line of Mr. Michael Gorman with Credit Suisse. Michael Gorman – Credit Suisse: This question is for Steve I think. Could you just spend a little time going over the provisions for credit losses in the quarter? Obviously it was up a lot year-over-year and sort of in line with what we saw in the first quarter. Could you just talk about, a little bit about what went on there?

Yeah, Michael, you got a couple of things. We take a relatively conservative pack in that when a tenant files for bankruptcy, we reserve 100% of the receivables. So with the tenants that are currently in bankruptcy, including the recent filings like Steve & Barry’s, we are fully reserved for all of the receivables that were outstanding in June 30. I think when you couple that with just the fact that it’s a tougher environment out there and we’ve got receivables that are a little bit higher level and they were a year ago, we think we’re pretty conservative in how we provide for that added expense. I wouldn’t necessarily expect to see that run rate in the first half translate into full year provisions, but you couple those two or three factors and we kind of are where we are. Michael Gorman – Credit Suisse: So the run rate should drop off a little bit from here?

I would think it would a little bit because I think with some of the tenants who are there, we won’t necessarily see a closing of all the stores and so I would say it firms some of the leases in those receivables will come back to us. Michael Gorman – Credit Suisse: Rick, just quickly, could you talk about what happened with the leasing spreads on the community center portfolio? I notice it went negative this quarter.

They are relatively small inventory, so they’re much more influenced by if there are a couple of box fields that are in there, but there’s nothing. The amount of activity in that portfolio is very small so it can have a higher degree of deviation from quarter-to-quarter. Michael Gorman – Credit Suisse: I guess just what type of space was it that had negative mark-to-market?

It was that basically we had a couple or boxes and we had two CompUSA stores that closed and a Nordstrom Rack at Shops Northeast that closed, and the Rack was replaced by Barnes and Noble, and we’re working on the CompUSA.

I wouldn’t classify it as mark-to-market. What happens is you just take the opening versus the closing and it’s really, it has nothing to do with marking to market. So it’s not a… We don’t match the numbers. It’s the average in and the average out, so it’s not a mark-to-market issue. Michael Gorman – Credit Suisse: Great, and just final question: Sorry if I missed this, but was the loss from the unconsolidated entities in the quarter?

That’s Mills extra depreciation expense, that’s all.

Your next question comes from the line Christine McElroy with Banc of America. Christine McElroy – Banc of America Securities: Dave, when you talked about how specifically outlets have benefited from an increasing customer traffic as the dollar as weakened and international tourism has spiked. How much would you say that trend contributed to your sales growth in that portfolio and kind of anecdotally can you give us a sense for how much you think traffic could be at risk as we’ve heard that airlines have started cutting international flights?

So far we haven’t seen an impact on that. It certainly could be at risk. But I will say, it certainly adding I would say around 300 basis points, so 5%. But generally out of the 5%, so maybe 3% of it. But generally the outlet business even across the portfolio were up, so it is having some added benefit but it’s not the entire benefit. Christine McElroy – Banc of America Securities: Then regarding In City Plaza, what percentage occupied will the asset be when Wal-Mart opens in August and kind of what you’re expecting in terms of stabilized yields on the project? Can you give us a sense for, have you learned anything from the development and lease effort of this first center in China that you would differently with the other four projects and process there?

Well let me just say, I think it’s essentially fully let, so it maybe 98%/99%. I will tell you that the demand from the small shops is increasing. There’s more tenants. But I will add that it is much more difficult to do business there. Rules on land values, on process, on debt continue to change, so we’re taking a very deliberate and cautious approach. Our think are going in yield is around nine. We expect it to at least achieve 10% by year three. I will… My general anecdote is that it is very difficult to do these deals, though we seem to be meeting with certain success. The proof will be when sales start to come in and tenants perform. So we’re happy we’re doing it, but we’re also happy there’s only five of them at this point. Christine McElroy – Banc of America Securities: Got it. Then finally, Steve, given that your prior guidance range did not include an assumption for the extinguishment charge, can you kind of just walk us through what changed over the last three months to cause you to effectively weigh your guidance for the year?

Well, Christine, I mean you have two or three things going on. 1) We certainly have visibility not only into the rest of our early leasing activity, but we’re well into leasing ’09. 2) You have LIBOR where it is, but also the forward curve for LIBOR being where it is. Then 3) I think the fact that we did go to the market and were very successful in doing $1.5 billion bond yield that put us in a very good position related to our balance sheet for the rest of ’08 and into ’09. I think those are the three primary drivers.

Your next question comes from the line of Michael Bilerman with Citigroup. Michael Bilerman – Citigroup : Maybe we could touch a little bit on the 2009 leasing, which I think Stevie just mentioned you’re well into it, and sort of talking about what tenants are and how those negotiations are going. You read an article in the Journal that [inaudible] Lemon is saying, “We’re getting fewer built increases. We’re having the ability to terminate our leases early. We have higher percentage rent thresholds.” I’m just wondering if that’s just a special case or is that more the norm into your negotiations?

It isn’t with us, okay. I guess my one point is don’t always believe what you read. I mean look, tenants are, I mean the negotiation’s always been a process, but I think don’t think we’re doing, Michael, anything out of the ordinary or anything different given the more challenging economic times. So the demand is still there. Obviously we’re going to have more spaces back because certain tenants for all sorts of reasons have run into financials, some because they were buyout oriented, some because the category is not good, some because they’re not great operators and all of this comes to the forefront in a tough economic environment. But I will tell you unquestionably that we’re really changing what we think is market rent and what the terms are given the environment at all. Now I’m sure there are others that are doing it, certainly the smaller guys that have lease up that they’ve got to achieve. But we’re not quite in that position. Rick, you can add anything to that I guess.

The only thing that I would say to you is that if anything we are more even focused on our lease terms and we are spending a great deal of time insuring that the lease rental flow we’re negotiating for we’re going to get and eliminating kick outs, eliminating co-tenancy and we’ve been successful in doing that. We are as we sit here today ahead of our ’09 leasing in ’08 than the pace we set when we were working last year. We’ve had continuing emphasis on dealing with our tenants on a portfolio basis. When they come in, we’re talking about ’09 renewals as we’re finalizing our ’08 transactions, and that is going to continue as we get further out ahead of our leasing. Michael Bilerman – Citigroup : You’re saying you’re ahead of…

We are ahead as we sit here today, we have more of our own line leasing done in ’08 than we had our ’08 leasing done in ’07. Michael Bilerman – Citigroup : So you’re more than 50% through?

We have between the things in process we are. Michael Bilerman – Citigroup : How are the, I know the rental spreads in the mall portfolio this quarter came back, at least for a year to date, towards your historical levels because there was some stuff I think in the first quarter that made it wide. Where are your sort of rent spreads as you’re sort of rolling those leases next year coming out?

I think it’s entirely consistent. We have not seen a change in that trend at all.

Can you comment on your appetite for acquisitions? Internationally there has been speculation that you are looking into Europe and U.K.; and then given that your cost of capital has increased, how has that changed your appetite for acquisition?

We’re always thinking about how to appropriately grow the Company and one of the ways in doing that, I think one of the ways we’ve been successful is through our acquisition activity. Sure, our cost of capital’s increased. On the other hand, I think values have adjusted worldwide. The two of them potentially have in the sense gone hand in hand so there’s still that relationship. We look, we’ve got the capacity to do transactions, but there’s nothing eminent you’re going to hear or read about. But we’re always thinking about how to affectively grow our Company, and we’ll continue to do that. I think this environment, frankly, gives us a little bit more opportunities than an environment say a year ago. So in that sense, there’s more to think about. But like I said, the math is got to work over our analytic period before we do anything.

Would you say that you’re more focused on acquisitions in this kind of market relative to developments which you have been more focused on recently internationally?

I would say development, we’re very fortunate in that we’ve got a platform in Chelsea where development yields continue to produce results we want to do. As we look at the two platforms that we want to continue to develop new would be Chelsea, if we can fund the opportunities, and I think we still are very strong believers in redevelopment. I think what’s clearly changed in our thinking is that the new ground up development outside of Chelsea is at this point tougher to justify, and it’s longer. The returns are going to be longer than we want to wait given the risk. So as we look out, I think that gives us a lot of financial wherewithal to look at other opportunities. Now the product side, there’s a lot of new development that is out available that’s for sale, kind of opened last year or opened the year before. The price expectations we think are still higher than what they should be and addition they’re not very good. I mean that’s the bottom line. They’re not overly compelling properties, so we’re not very excited about the individual acquisition market primarily because the quality is not there and there’s too much on the given on the reset and given the pricing, so in the sense we’ll be patient. I don’t know if I answered your question but…

Your next question comes from the line of Paul Morgan with FBR. Paul Morgan – Friedman, Billings, Ramsey & Company: David, you said that values have adjusted worldwide. I mean if you could kind of pin that down, how much do you think mall cap rates in the U.S., even though we don’t see in trade, how much do you think that they have moved if they were to trade?

Well, when I was talking worldwide, I was really looking more at the… I was really talking about the public market and I was really talking about worldwide public company equity values as opposed to cap rates on particular properties. I mean all you have to do is look at what happened with the U.K. and European property companies and a number of Asian companies in terms of adjustment. So that’s really what the comment was intended to reference. Paul Morgan – Friedman, Billings, Ramsey & Company: Do you think that then maybe the implied cap rates for these companies is unfair given what you think is happening or going to happen in the private market?

Well, it’s hard to pin that down, Paul, only because there’s just been no trades. I do think if you had an A+ quality asset, I don’t think the cap rate has moved all that much, probably certainly 50 basis points, just to give you a number. But it would really, so much depends on who’s selling it, what the basis of selling it is. Is it 100%? Do you have a partner? Do you get the management? There’s not been that kind of A+ unambiguous asset that’s free of all of these other items to be able to pinpoint on. But it’s safe to say, “Look, I think we returned expectations are certainly up, so it would be naïve to suggest that even on unambiguous quality stuff that it hasn’t moved up at least 50 basis points. Paul Morgan – Friedman, Billings, Ramsey & Company: Rick, maybe regarding store closings: Do you think this year will be atypical in the sense that a lot of retailers from now through the holidays will try to hold out and then you would see more fall out in the first quarter, or do you think we might see more than average in the third and fourth quarters?

Well interestingly, I think it’s been atypical and typically you’ll see your closings in the beginning of, in January after the December receipts and we’ve seen the closings now come more in the second quarter. We still have a number of tenants that we’re monitoring and it remains to be seen. Certainly they’re going to remain in business as long as they can remain in business and the key issue is whether they can get the support from the vendors and the factors to fund their business. I would point out, and I think it’s very important to point out that the vast majority of our tenants are in very good financial shape. When you go through our top ten tenants, virtually none of them have debt at all. So, as David pointed out earlier, the ones that you’re seeing have issues are either where they were private; private equity came in in very highly leveraged capital models that couldn’t survive in this environment, or you have chains that are very well capitalized that are just going into different strategic direction and in those instances we’re getting substantial lease buyouts that are making it a profitable enterprise for us going forward.

I’d just, Paul, though, it is, we’re going to have more store closings in ’08 and in ’09 than we did in ’06 and ’07. I mean there’s no ambiguity about that. Now again, we still think the way we operate and the way we’ll still be bale to grow our cash flow, but we’re going to deal with more store closings in ’08 and ’09 than what we have at least in the last couple years. Now the one thing I will say at this point, the cycle that we’re in doesn’t feel like or seem like anything different from a retail perspective that we haven’t already dealt with previously unfortunately numerous times. So at this point, it feels like/seems like kind of something we’ve done. I’d say a déjà vu all over again, but we’ve seen it. Paul Morgan – Friedman, Billings, Ramsey & Company : My last question on the outlet spread for rents, is that being driven by like the expansion in Orlando of the new centers, or is this more… How much of it is sort of same space versus…

That didn’t come online yet, so that would be impacted by that. But a big chunk of it is because we got some of the [Macasa] space back that was released. But again, I mean I think, as evidenced, there’s a lot of inherent value in those leases as they come up. Some of it was a little bit extraordinary because of the Macasa space that we got back.

Your next question comes from the line of John Habermann with Goldman Sachs. Tom Baldwin for Jon Habermann – Goldman Sachs: Actually it’s Tom Baldwin. I’m here with Jay and Johan as well. Just trying to get a sense for the magnitude of the impact of California and Florida and your same-store sales number. Could you provide what growth in comp sales per square foot would be X those two states?

Florida is probably 100, could be as much as 150 bps, California a little less so, maybe 50 bps. So between the two, you’re probably in the 150 to 200 bp range.

That’s judgmental as opposed to scientific. I mean we could obviously have that number, but we don’t have it right in front of us. Tom Baldwin for Jon Habermann – Goldman Sachs: My second question, could you provide an update on lease up at the Mills regional malls? I’m wondering if you’ve revised your expectations with regard to how long it’ll take close the occupancy gap between the Mills and your core mall portfolio given how much the environment has deteriorated?

Well the actual Mills side is actually doing well. Now the malls did have, does have a significant exposure to Steve & Barry’s so. But actually the mall… I’m sorry, the inside of the Mills, we’re making pretty good progress. I would tell you generally all of the assets are trending up except one or two from both sales and new occupancy and things going on there. So there’s clearly a benefit we’re seeing as the consumer moves a little more toward value in today’s environment. Now, the set back being Steve & Barry’s is something we’re going to have to approach. But I would say generally speaking, we’re in pretty good shape there. On the mall side is taking a little bit more time. We’re being brought down by a couple that were repositioning and they’re big centers, so like a Southdale is bringing down the average pretty significantly as we try and reposition net assets in a meaningful and significant way. Tom Baldwin for Jon Habermann – Goldman Sachs: What’s your best guess in terms of how long it might take to break the 90% level in the Mills Regional Mall’s portfolio?

We don’t have that right in front of us, but we’re working on it every day. Tom Baldwin for Jon Habermann – Goldman Sachs: Then my final question relates to Hamilton Town Center. I noticed that the leasing level at delivery on that center was a little bit lighter than you’d expect, that 79%. Can you just elaborate a little bit on what transpired there?

Basically it’s going according to plan. Some of the development you do where you have, if you do do it, is going to be a little bit early. In this case, we always knew going in that it was a little bit early. So we’re not completely dissatisfied and we’re not completely off the mark on the 80% and I think that over the next year or so, we’ll get it well into the average, the 90+ percentile. It’s a little early. It’s doing very well. It’s not a big transaction for us, so it’s getting the returns we thought it would get.

It’s a great market. I mean it’s hard to believe that the county that it’s in which is the northern suburbs of Indianapolis is actually one of the 20 fastest growing counties in the United States.

It’s only because Garret shops here.

There you go. This where the retail hub, the next retail hub will be in that market, so it’s a very good piece of real estate.

Your next question comes from the line of Louis Taylor with Deutsche Bank. Louis Taylor – Deutsche Bank Securities: David, just going back to outlet center dynamics in sale trends there a little bit, could you maybe add a little bit of color with regards to how much, you mentioned the boost from the international activity, but are you seeing much of an impact from just consumers just going to lower price points and then what kind of impact is that maybe being offset by just the higher gasoline prices?

Well, so far I will tell you, Louis, that this theory that people aren’t going to go to an outlet center because it costs too much to drive there, I don’t where the science behind that is, but we are certainly not seeing that in any respect. As I said, 39 premium outlets centers, we had one that was down, one or two that were down primarily because they’re at the low end of the one or two and one was actually outside Indianapolis. We had a flood during June, which thankfully the center wasn’t hurt, but it did affect the ability to get there. So I haven’t seen that, Lou. We haven’t seen that. If anything, I think people are seeing the benefit. We’re seeing that a little bit in Mills where people are seeing the benefit of value oriented shopping and they’re offsetting that against whatever incremental cost it is go out there. I don’t have… We could probably do a lot of analysis to get the specific numbers, but I don’t have that in front of me. Louis Taylor – Deutsche Bank Securities: Steve, question for you just on the JV debt maturities: Can you give just a little bit of update on that and just maybe some color on the status of the mortgage market right now?

Well, the status of the mortgage market is still mostly loaned to values. The life companies are there but cannot be there in size and so once you get above a couple hundred million dollars, you really talking about pairing up people. In terms of our specific maturities… Well, I’d make one other comment was that the CNBS market is till virtually nascent and just don’t expect any recovery there in the near-term. With respect to our maturities, both on the consolidated portfolio and the JV portfolios, we have coming due in the next 18 months is all relatively good assets at relatively modest leverage loan to values and so feel very comfortable about our ability to rework those loans. Obviously given the bond yield that we just completed, we are exceptionally well positioned from a balance sheet perspective.

Your next question comes from the line of Nathan Isbee with Stifel Nicolaus & Company. David Fick – Stifel Nicolaus & Company, Inc.: It’s actually David Fick here. Most of my questions have been answered. Can you comment a little bit about a) How much NOI you’re getting out of Florida and what you’re seeing in terms of traffic there and what you expect to happen over the next year?

The NOI, our share of NOI out of Florida to be specific is 13.2%. It’s RA carry. I think what we said earlier, the first quarter call was basically pretty much on line. I mean there are a number of centers in Florida that are doing extremely well and I’d call that for additional suburban mall in Florida is underperforming compared to what’s, how it’s performed over last couple years. Now the predominance of what generates that NOI obviously is our big time centers. So [inaudible], Boca, Sawgrass, Mills, Florida Mall, The Falls in Miami to name a few, Aventura is all still going very, very strong. Where you may see… Where you’ve seen some sales under performance, not leasing under performance but really sales under performance, would be the malls, kind of the suburban traditional mall. David Fick – Stifel Nicolaus & Company, Inc.: Your new project in Chelsea, I’m sorry, Chelsea project in Cincinnati is a little eye opening. Are you just out of good markets?

Well actually we’re very bullish on that and the demand is very strong and this was a site that a number of developers wanted to build a high-end center and some of the redevelopment took place in Cincinnati Proper. That demand was reduced, so we feel very bullish about it. I think we’ll pull off a great mix and a great return and I think it’ll have very good sales productivity.

I mean, Dave, between Cincinnati and Dayton, which is a half hour to the north, you’ve got 2 million people in those metro areas so… David Fick – Stifel Nicolaus & Company, Inc.: I understand that, but there are already two or three outlet centers there, not of this quality but I assume you expect to cannibalize a certain amount on that.

The ultimate test is that we’re opening in August of 2009 and we’re already 40% leased with very good receptivity. The products that we billed are frankly designed to be the dominant outlet channel in their markets and we fully expect that we’re going to repeat that in Cincinnati.

Your next question comes from the line of Craig Schmidt with Merrill Lynch. Craig Schmidt – Merrill Lynch: I think this is maybe a weird question, I’m just curious is some of the tenants that you’re talking to right now to potentially backfill Steve & Barry’s and to a lesser extent the Linens ‘n Things?

We have been working on the Steve & Barry portfolio for over a month. An important thing to point out is that in the Simon portfolio, the vast majority of our Steve & Barry’s are relatively smaller sized stores in small shop space and not all department store spaces. So in addition to having it out to a number of alternative anchors and depending the markets, we’re talking to Ethan Allen, ESW, Maggianno’s, Nordstrom Racks, Sports Authority, Sachs, [inaudible], AJ Wright, Ross Dress for Less, Medieval Times. That’s more in the Mills outlet. Target, more in the Mills portfolio. We also have an ability to just reconvert that space back to small shops. It’s not particularly deep and it has a great deal of frontage on the mall, so not only are we having our traditional box teams look at it, but our small shop leasing people are also simultaneously looking to chop it up.

Yes, I will tell you that to give you a specific anecdote with respect to that, [inaudible] Mall is a great example. We did a Steve & Barry’s probably three or four years ago and we debated it. We thought about it and we said, “You know what; we haven’t figured out how we’re going to reposition the mall, so come in and fill space. We never really thought that maybe it was a temporary gap measure and in fact as we’ve renovated Livingston, we’re bringing in Barnes in. We’ve redone the food court and now we want the space back and we’re going to chop it up and its 50-yard line space, so same thing in the stores in New York. So it’s interesting, it was kind of in some cases it was the path of less resistance. I should say in a lot of cases in the mall portfolio was the path of lease resistance and now I think we, I think they’re going to turn the small shop or turn it back into small shop space in a number of centers which obviously will generate more NOI in the long run. David Fick – Stifel Nicolaus & Company, Inc.: If you believe it, this will be another question on the Cincinnati outlets. I’m just wondering what direction you can work with the Mills in? I mean given the 120-shop outlet, 20-minute drive away, it sort of limits moving in that direction. What can you do with the Mills at this point?

I think you’re referring to Cincinnati Mills? David Fick – Stifel Nicolaus & Company, Inc.: Yes, sorry.

Cincinnati Mills is an asset I don’t think over the long run we will be an owner. We’ve made that decision that it’s just not, it produces little NOI. It’s a lot of work and we just don’t view that as being in the long run portfolio of the Mills. David Fick – Stifel Nicolaus & Company, Inc.: I’m sure Zack was going to be happy to be about the Livingston Mall.

Exactly. If he brings a deal or deal two, we’ll… I guess you can’t say that. David Fick – Stifel Nicolaus & Company, Inc.: I’m sure his wife will make up for it and shop.

Your next question comes from the line of Ben Yang with Green Street Advisors. Ben Yang – Green Street Advisors : Just kind of doubling with the Steve & Barry’s bankruptcy. I’ve also heard some rumors in the market about Mervyns going to potentially [inaudible] heading down a similar path given what’s happening in the vendor communities. While your exposure to these particular anchors is not very large, it must concern you to some degree. Can you share your opinion on what you see happening to this particular segment of the department store industry?

Well look, I mean I think the fact of the matter is Mervyns, we’ve always hear Mervyns to go away and the fact of the matter is the fact that it’s lasted this long is a testament to the guys that own it and operate it. It’s being out positioned between Penney and Target. Boscos has always been kind of a unique retailer and did things a little bit different. Now they’ve got a different capital structure and I think that’s putting a little bit more pressure on them. But from a uniqueness of in terms of retail actually and some markets have performed reasonably well, so it’s not a performance issue; it’s more a capital structure issue. I think Mervyns is simply Target/Penney squeeze and we would look to reclaim that space and operate, look for those. So I don’t think it’s any… I think you see very similar tenants like Penney that are performing reasonably well and it’s just that Mervyns is an afterthought at Target and it’s not something that we have anticipated. Ben Yang – Green Street Advisors : We’re not going to see maybe any big consolidation happening for these lower end department stores you say.

I don’t think so. I think it’ll be… I think it’ll boil down to real estate play. I do think Boscos has a little bit different retail angle that may be able to in a different capital market structure may be able to operate accordingly. I think their more constrained capital. They do things a little bit different from a retail point of view. Ben Yang – Green Street Advisors : Then last question, you talked about your China investment garnering say a 9% going in yield. Are there any major structural differences in how leases are signed there versus how you do them here?

Well look, I mean there are lots of them because let’s face it, and this is what I think we all have to be sensitive about this sexy overseas development, the right to pursue tenants if they don’t pay is a lot different in a lot of different markets. So I think our big issue is if a lot of these tenants don’t perform, how do you get rent? We don’t know yet? We’re not confronted with under performance, but the laws associated with that are a lot different. Now these are longer terms leases. I mean the leases look a lot ours in terms of land and fixed common area reimbursements and alike. The real issue though is if performance isn’t there and they don’t pay, do you have an issue? Now, it’s interest in Japan, which I like their system, I’d like to bring it to the U.S., is what they do is they collect sales from the actual customer and then they send the retailer everything but what the landlord share is. We’re actually putting that in China as well, but the process of that hasn’t been adjudicated. So it’s a risk, that’s why we’d like to see returns. It’s a huge market. We’re doing thing in R&D. We’ve executed the plan the way we though, but we’re very cautious in a lot of future opportunities until we get better handle on exactly that question.

Your next question comes from the line of Michael Mueller with JPMorgan. Michael Mueller – JPMorgan: You mentioned earlier about it being harder to lease up new developments, harder to justify it. Could you take a minute and talk about the pace of leasing and the appetite for space when you’re looking at the redevelopment projects, particularly the ones you’re adding new shop TLA?

Well, it depends. I mean there are… We have a lot more scrutiny in ability to execute, not that we’ve had execution problems but the days of all the tenant is interested let’s build it are done, so it’s a function of who the tenant is, how much we can rely on their good faith intentions and our judgment. It’s a judgment call. Now we’ve been doing this a long time, so our judgment here ought to be pretty good. Our track record is pretty good, but the intense focus has certainly increased because we got to rely on the tenant. We got to rely on our people in terms of what they can delivery and there will be a few instances where we are going to slow it down just to make sure that we can pull it off as pro forma.

The one thing in the redevelopment area, because you’re adding tenants to an already demonstrated productive property, it is an easier proposition. If you look at the redevelopment program, we’ve added Nordstrom to Burlington. We’re opening in the spring of next year Nordstrom at North Shore, year after it’s Nordstrom at South Shore. Nordstrom is opening a Keystone fashion this fall opening at Tacoma this fall while in all of those instances where we’re adding incremental small shop space, we’re substantially improving the market share of the property and it’s an easier proposition to attract the retailer.

I would say we just don’t have a lot of risk. To us, if we add GLA, we want a 100% leased. The risk we have is it’s 90% leased. I mean the deviation from our plan to the results is not going to be all that material, yet it’s going through a further level of scrutiny giving the environment that we live in. Michael Mueller – JPMorgan: So for new ground up development, non-Chelsea in the U.S., it sounds like that’s slowing Chelsea. It sounds like the pace is keeping up. If we’re looking at the redevelopment expenditures say ‘07/’08 levels, versus 2009/2010 expectations, do you think the capital spend is still about in the same ballpark?

I would say clearly new ground up ex-Chelsea, you’re right. I mean it is. The only thing that have opening in ’09 that’s really Phase 2 of Phase 1 which is domain and then had three or four others that we have backburnered for all sorts of reasons, not all of which are recurring economic environment, but they were early projects and there’s no reason to push it. On redevelopment, we’re on a straddle of a couple, but I think it’s safe to say that I think redevelopment in ’09 will be similar to ’08, though, it could be less. I don’t think it’ll be more. There like I said, there are a couple of projects that we’re straddling. The good news is I look at both from, obviously you want the redevelopment because it’s accretive. On the other hand, if we don’t and we want to hold on it, our cash flow increases from an after dividend and so on and there’s nothing like fire power in an uncertain economic environment.

Your next question comes from the line of Jeff Donnelly with Wachovia. Jeff Donnelly – Wachovia Capital Markets, LLC: David, I guess two-part question for you on just the outlook for occupancy more broadly. Given your experience with cyclical downturns with retail space, demand and the timing it take for retail or appetites to change to absorb that FS space, when do you think mall occupancy in the U.S. as a whole [inaudible] its bottom? Is that a 2009 event or do you think it’ll be far out as 2010? Do you think we’ll see much variability in the performance between A and B malls over that time period?

Well, I think it’s tough because we’re I think kind of in the… We’re in the first half of the downturn let’s say, okay. It’s a very tough judgmental call. I do think we’ll see the worst of it manifest itself in ’09, not ’10. But a lot of the story hasn’t been written and clearly the trend of better properties getting better and worse properties getting worse is only going to accelerate in a tough economic environment. But it is… That trend has been with us for quite some time. It’ll accelerate it, but it’s not going to be a dramatically different outcome in that. I think good properties are going to continue to get better and bad properties are going to get worse. I don’t look at it so much A or B, I look at market share, the property getting better, what are the demographics; what’s the trade area, etc. That trend I think is with us and has been with us for quite some years. Now on the other hand, we’ve had some centers that have really under performed that we actually have some very interesting development plans and that’s the big delver that I mentioned earlier that if we can pull off some of the things they’re working on, we have some real upside in some of these and we’ve already suffered through the downside, so that remains to be seen. But I think ’09 is going to be a little bit of we’re going to use ’09 to bounce back, the industry I should say because you’re going to see more stores closing because of the credit situation. Jeff Donnelly – Wachovia Capital Markets, LLC: I guess building on that, maybe this one is for Rick, is that since the kiosk and temporary tenant business I would say probably tends to skew more towards a less sophisticated operator than perhaps your typical in line tenant. Any sense of how this economic environment is weighing on appetite for rental demand from those tenants, particularly as we near the holiday season where it’s more dominant for the mall business?

So far we have and this has of June 30. We are on track to hit our budgets in those businesses for 2008. So it’s one of the things is we have been, we’re very focused on the leasing as we get a little more space back from the small shops closing, that’s incremental inventory for that business and that’s on track still. Jeff Donnelly – Wachovia Capital Markets, LLC: How many of rents typically structure those, a percentage of sales or just fixed rate?

It’s fixed rate plus a percentage. Jeff Donnelly – Wachovia Capital Markets, LLC: One last question is for Steve; I don’t want to leave you out. For your 2008 guidance, can you just tell us what’s implied I guess from an occupancy perspective for the back half of 2008 versus where you were the same period of 2007?

Well a continuation of the environment that we’re in right now and I think it would be reasonable to say that we’re expecting occupancy to be lower at 12/31/08 in the malls than it was at 12/31/07.

Just on the occupancy, I mean there’s a lot of occupancy stuff that’s out of our hands because we do have some tenants that are in Chapter 11, whether they reject or assume leases is out of your hands. So as precise as we’d like to be, precision is not available to us at this point. With that said, we’re going to grow our comp NOI in the way that we’ve described it and that’s going to be a function of temporary tenants and the like and so on. But pinpointing occupancy is going to be a little bit tricky given at this point it’s a little bit out of our control. Jeff Donnelly – Wachovia Capital Markets, LLC: I’m curious, though, do you think there’s a chance that your year-end ’09 then is lower than year-end ’08, or just too difficult to say right now?

Too difficult to say.

Your next question comes from the line of Rich Moore with RBC Capital Markets. Richard Moore – RBC Capital Markets: Hey, Rick, you had a good list of tenants that might be available to backfill Steve & Barry’s, and I was wondering who in the small shop space is opening stores? I mean who stands out for you is particularly strong in that arena?

We’re doing a lot of business now with Forever 21, with [Sofour], with Apple, Coach is still opening stores, Tilly’s coming out of California, Zoomies, Express, Abercrombie, American Eagle. Abercrombie’s rolling out [inaudible]. We still have substantial demand across the portfolio from tenants. Game Stop is still opening stores. Liz Claiborne is converting from a wholesale distribution channel to a retail distribution channel, so they’re opening Lucky Jeans, Lucky Kids, Kate Spade, and Juicy stores. H&M, we’re doing a lot of business with H&M, so there’s still a great deal of activity here and the tenor of the demand is strong. Echoing David’s points, the good malls are getting better and supply almost is, demand is almost only elastic in those better properties. It suffers a downtime just to reconfigure and release the space, but we could add more space to our better properties and have demand. Richard Moore – RBC Capital Markets: Are you thinking of those names for 2009/2010, is that where their interest is? I mean I assume 2008 is supposed to be done so not as important, but 2009/2010 both they have interest in both years?

Oh yeah, absolutely. Richard Moore – RBC Capital Markets: Steve, on the debt, if you had to redo a big mall mortgage, like you say had to redo Roosevelt Field, would that get done do you think as a mortgage or how does that work in this environment?

Yeah, it’d work because we don’t have a mortgage on it. Richard Moore – RBC Capital Markets: Say, you were going to put a mortgage on it.

Rich, as an example, we just refinanced Stanford, which is obviously an A+. Yeah, the demand at the end of the quality spectrum is obviously better. But even then, you run into two challenges. 1) Is loan to values, because the underwriting is very conservative. 2) The big malls are obviously worth a lot and so if you want to put in an appropriate loan to value piece of debt [inaudible] do it through the bank market or you’re going to have to involve multiple life companies and some kind of club deal. Richard Moore – RBC Capital Markets: So it would probably be multiple banks you think and maybe more insurance companies, but probably a consortium of banks?

Yeah, I think that’s the most likely scenario.

Your next question comes from the line of Michael Gorman with Credit Suisse. Michael Gorman – Credit Suisse: David, you mentioned earlier a little bit about getting more restrictive on some of your lease terms. Can you just talk about the existing leases? What kind of co-tenancy exposure do you have especially to some of the names on your top anchor list like a Sears or a Dillard’s or Bon-Ton?

It would depend on the center, but not that much really. I mean usually if there is any co-tenancy it’s the for department store mall and maybe two anchors. The fact of the matter is if the anchors are going out of business, you don’t really have those tenants anyway, so it’s somewhat of… I can’t recall anywhere co-tenancy is really affected us financial. It’s a thing here, but it’s really not for us a material financial issue.

Michael, probably three/four years ago now we also started writing in those instances where there are co-tenancy show ARM provisions, so it’s just not the event, if the event then coupled with a sales decline. Michael Gorman – Credit Suisse: Sorry if I missed this, but when you were discussing acquisitions earlier, do any of those opportunities include buying back space at existing centers that you don’t own?

Sure, if the price is right. Michael Gorman – Credit Suisse: Have you had any?

You know, I would say at this point nothing major is happening there. Sure, I mean occasionally like… Rick whispered to me “Sharper Image.” I guess a good example of demand for retail space is Sharper Image is liquidating and we have actually bid on some of our leases because there were hostile retailers bidding on it and even though we love that retailer, in this particular few malls, we didn’t want that retailer in that particular space, so we had to pony up some money to buy the leases from the estate. So, yeah, we’re doing that in cases. I mean when it comes to the big departments stores, we’re still… There’s a bidden mask there that is a normal process with us. So we are going to be buying some anchor spaces over the next few years, but there is a value gap between the owner and the what we want to pay for it at this point.

The only thing I would add is that as David said, this is not new business for us. I mean we acquired a lot of stores from Macy’s when they merged with May. We’ve acquired stores from [Belt]. We’ve acquired stores from Lord & Taylor, and we’ve been able to very effectively redeploy those assets to make our properties better. If you go back in past 8-Ks, you’ll see the capital we spend and the returns we got through those redeployments.

Your next question comes from the line of Michael Bilerman with Citigroup.

I have one follow-up for Rick. Rick, as you think about your leasing plan when you’re talking about being ahead of pace for 2009, how does that leasing plan for ’09 compare to what it was for ’08? I think you’re dealing with about 6 million square feet of scheduled roll in the mall portfolio. How much did you increase your store closures? How much did you increase your bankruptcy expectations relative to the ’08 plan?

Well it’s not a planned per se, Michael. It’s really a productivity measure. What we track is what results we are generating, so we have basically told our teams that we need to be far further ahead in our expiration and so our teams are now working on ’09 and 2010 expirations so we can get further and further out ahead of the tenants in the planning. So it isn’t really a planned per se that we said we wanted to be X. We are tracking it against our past performance and every year we’re getting better in getting further out ahead of the expirations so we can be proactive in dealing with these spaces rather than reactive.

I would just add to that, Michael, that we are clearly aware of inventory. The inventory has increased just because take an example, Demo’s out of business. We decided to work with Pac-Sun, take a lease termination payment and then added that to the inventory, so the inventory at Sharper Inventory is obviously added to the inventory. Even guys that are in ’11 where we don’t know exactly say Whitehall, where we don’t know exactly what space we may or may not get back depending on the outcome of that preceding, our people are leasing as if they don’t exist. So the inventories increased, yet we’re fully aware of it and we’re obviously shopping the inventory to the best of our abilities.

Your next question comes from the line of Louis Taylor with Deutsche Bank. Louis Taylor – Deutsche Bank Securities: David, what’s the limited acquisitions in more difficult development environment? Is it more likely you’ll be a buyer of your stock around these levels?

Well, we’ve been very conservative given the world in terms of capital. At this point, I think we’re going to, we still have the open to buy. We’re still ready to take advantage of volatility yet where prudence at this point is not an unwanted asset so we’re going to be very prudent as we think about that.

At this time, there are no further questions in queue. I would now like to turn the call back over to Mr. David Simon for the closing remarks.

Thanks for your interest and questions and we look forward to talking to you again. Thank you.

Thank you for joining today’s conference. That concludes your presentation. You may now disconnect and have a wonderful day.