Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 7, 2020

WASHINGTON PRIME GROUP INC.
(Exact name of Registrant as specified in its Charter)

 
 
 
 
 
Indiana
 
001-36252
 
46-4323686
(State or other jurisdiction
 
(Commission
 
(IRS Employer
of incorporation)
 
File Number)
 
Identification No.)

 
 
 
 
 
180 East Broad Street
 Columbus
Ohio
43215
 
(Address of Principal Executive Offices)
(Zip Code)
 

Registrant's telephone number, including area code (614) 621-9000

N/A
 
(Former name or former address, if changed since last Report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):
[] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbols
 
Name of each exchange on which registered
Common Stock, $0.0001 par value per share

WPG
 
New York Stock Exchange
7.5% Series H Cumulative Redeemable Preferred Stock, par value $0.0001 per share

WPGPRH
 
New York Stock Exchange
6.875% Series I Cumulative Redeemable Preferred Stock, par value $0.0001 per share

WPGPRI
 
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company []
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]






Item 2.02 Results of Operations and Financial Condition.
On May 7, 2020, Washington Prime Group Inc. (the “Company” or “Registrant”) issued a news release regarding its results of operations for the three months ended March 31, 2020.
A copy of the news release is furnished with this report as Exhibit 99.1. A copy of the Company's supplemental information for the three months ended March 31, 2020, which is referenced in the news release and available on the Company's website, is furnished with this report as Exhibit 99.2. The information in this Form 8-K and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure.
A copy of the “First Quarter 2020 Update” presentation is available on the Registrant’s website (www.washingtonprime.com) and is furnished with this Form 8-K as Exhibit 99.3.  The information provided under this Item 7.01 of this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Exchange Act nor shall it be deemed incorporated by reference into any filing under the Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(a)
Financial statements of businesses acquired.
Not applicable.
(b)
Pro forma financial information.
Not applicable.
(c)
Shell company transactions.
Not applicable.
(d)
Exhibits
99.1 News Release of Washington Prime Group Inc., dated May 7, 2020.
99.2 Supplemental Information for the three months ended March 31, 2020.
99.3 First Quarter 2020 Update
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).





SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.


    
 
 
Washington Prime Group Inc.
 
 
(Registrant)
 
 
 
 Date: May 7, 2020
By:
/s/ Mark E. Yale
 
 
Mark E. Yale
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)


Exhibit


Exhibit 99.1



Washington Prime Group Announces First Quarter 2020 Results

COLUMBUS, OH - May 7, 2020 - Washington Prime Group Inc. (NYSE: WPG) today reported financial and operating results for the first quarter ended March 31, 2020. As previously announced, and due to the coronavirus (COVID-19) pandemic, the Company has withdrawn its full-year 2020 guidance issued on February 26, 2020. The Company is not providing updated guidance at this time.

 
 
Three Months Ended
 March 31,
 
 
 
2020
 
2019
 
Net income (loss) per diluted share
 
$0.02
 
$(0.03)
 
FFO per diluted share
 
$0.22
 
$0.31
 

A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure are provided in this press release.
First Quarter Financial Results
Net income attributable to common shareholders for the first quarter of 2020 was $3.4 million, or $0.02 per diluted share, compared to a net loss of $5.2 million, or ($0.03) per diluted share, a year ago. The year-over-year (YOY) difference relates primarily to net gains on disposition of interests in properties of $26.8 million, which compares to $10.0 million of such gains during the same quarter a year ago. Offsetting this difference was lower rental income recognized during the first quarter of 2020, due primarily to the negative impact of the 2019 retail bankruptcies of Charlotte Russe, Gymboree, and Payless ShoeSource, as the timing of the store closures occurred towards the end of the first quarter of 2019, in addition to $0.7 million in lower first quarter 2020 percentage and overage rents due to temporary store closures by tenants in March due to COVID-19.
Funds from Operations (FFO) for the first quarter of 2020 was $49.7 million, or $0.22 per diluted share, which compares to $70.1 million, or $0.31 per diluted share, during the same quarter a year ago. The YOY decrease in FFO is primarily attributed to lower gains from sales of outparcels from a year ago of $8.7 million, reductions in comparable net operating income (NOI) of $4.0 million for the portfolio, primarily from the negative impact of retailer bankruptcies, and a $5.0 million reduction in straight-line revenues and mark-to-market amortization, including share of joint venture properties, and higher interest expense of $1.8 million. Included in the aforementioned impact to straight-line revenues in the first quarter of 2020 is a non-cash reserve of $2.6 million associated with the elevated credit risk due to the impact from COVID-19.
Business Highlights
Significant Leasing Progress Prior to COVID-19 Pandemic
Leasing volume during the first quarter of 2020 exhibited a 12% YOY increase totaling 1.4 million square feet (SF);





This follows annual leasing volume of 4.4 million SF, 4.2 million SF, and 4.0 million SF in 2019, 2018 and 2017, respectively, totaling 14 million SF since 2017;
Of the aforementioned 1.4 million SF in the first quarter of 2020, 48% of new leasing was attributable to lifestyle tenancy which includes food, beverage, entertainment, home furnishings, fitness, and professional services; and
The Company continues to incent its leasing and property management professionals in order to further diversify tenancy as illustrated by 40 signed leases qualifying under various incentive programs during the first quarter.
Stable Operating Metrics Prior to COVID-19 Pandemic
Tier One sales PSF increased 5.5% YOY to $423 for the twelve months ending February 29, compared to the prior year;
Tier One occupancy cost improved 50 basis points to a sector leading 11.2% in the first quarter of 2020 from the prior year;
As of March 31, 2020, combined Tier One and Open Air occupancy decreased 90 basis points YOY to 92.9%;
Tier One releasing spreads increased 4.2% in the first quarter of 2020, reflecting the strongest quarterly releasing spread results for Tier One properties with increases of 14.8% and 0.8% for new deals and renewals, respectively; and
First quarter 2020 comparable NOI increased 7.6% for Open Air and decreased 7.2% for Tier One, resulting in a combined decrease of 3.0%, a sequential quarterly improvement of 160 basis points from the fourth quarter of 2019.
Progress, Actions and Initiatives During the COVID-19 Pandemic
While 57% of the Company’s assets have remained fully or partially open during COVID-19, a robust effort has been underway to ensure an optimal transition for the full reopening of all assets. Such efforts include tenant discussion forums as well as a comprehensive Reopening Processes and Best Practices Manual which addresses every aspect of the business including leasing, property management, operations, marketing, technology, social media, etc.;
Of the Company’s 99 properties, 43 enclosed assets were temporarily closed due to COVID-19, of which 23 properties are scheduled to be reopened by the middle of May 2020;
The remaining 56 properties are categorized as Open Air or have an open air lifestyle format and have remained open to provide essential goods and services to the extent permitted by law;
The Company recently drew ~$120M from its credit facility in order to further buttress our cash position;
Of the 18 adaptive reuse projects addressed, the Company has held discussions with the respective tenancy and every single one is committed to open, albeit six have been delayed to 4Q 20 or into 2021;
Illustrating continued tenant demand of the Company’s town centers, during the months of March and April of 2020, 85 leases were signed totaling 624,852 SF;
Through May 7, 2020, the Company has collected ~30% of contractual base rent and charges for April 2020. This is comprised of a ~25% collection rate for Enclosed properties and ~50% for Open Air properties. Based upon ongoing conversations with tenants that have yet to pay April rent, the Company expects the collection percentage to improve for the month of April 2020;
As of May 4, 2020, the Company has addressed ~11% of the total amount of contractual rent for 2Q 20 through lease modifications. Based upon these modifications, the Company expects to collect ~45% of contractual base rent and charges for 2Q 20, while deferring ~45% and abating the remaining ~10% for these specific deals;
The Company recently launched Fulventory (view here), a proprietary initiative which allows tenants to utilize space within Washington Prime Group assets for last mile fulfilment and BOPIS (buy online and pickup in store), as well as inventory clearance; and
Such industry leading initiatives as WPG Cares (view here) and Open for Small Business (view here) have been exemplary regarding the Company serving as a community and tenant resource. WPG Cares has participated in over 175 community service projects; Open for Small Business has hosted over 15 complimentary webinars attended by hundreds of participants; and Well Picked Goods has benefitted the Company’s tenancy during asset closures via digital merchandise curation and an in





store gift card promotion when reopening occurs.
Lou Conforti, CEO and Director of Washington Prime Group, Commentary:
“We’re going to skip the usual practice of an earnings conference call this quarter for the simple reason we’re too busy doing what we’re supposed to be doing. For all of those who look forward to my few well-placed swear words and a musical reference or two I promise we’ll be back next quarter with a vengeance.
“The coronavirus pandemic, beyond the devastating global health consequences, has inflicted unprecedented, social, psychological and economic hardship upon all of us. While nearly impossible to glean any positive consequences, I’ve actually witnessed acts which serve as a testament to the compassion of my WPG colleagues. Whether those on the front line or support from their corporate counterparts, the collective response to this national emergency has been a source of inspiration. This has manifested itself via philanthropic, operational and financial measures all of which exhibit our singularly focused objective of serving our demographic constituencies. As such, we have demonstrated our commitment to act as a vital resource in ways which transcend beyond the selling of goods and services.
“While this exogenous shock has been dramatic to say the least… there will be a return to normalcy. In this regard, we’re preparing for business as usual…and don’t forget, our usual is anything but. With this in mind, I thought it’d be helpful to summarize what we’re doing from an operational, financial and philanthropic perspective.”
Operational Activities
“Prior to COVID-19 fully rearing its ugly head in March, we continued to materially improve upon our Tier One and Open Air operating metrics such as comparable NOI growth, sales PSF, occupancy cost and leasing volume. Take a look at the statistics presented above, all of which point to the foundational underpinning upon which will inure to our benefit as marketplace stabilization occurs.
“Just to remind everybody for the umpteenth time, our open air ‘plus’ assets (when including nine Tier One properties with an open air lifestyle format) comprise ~40% of total NOI. Take a look at these in our most recent investor presentation and calculate for yourselves the standalone valuation of this one segment of our NOI. Furthermore, ~75% of what we report as enclosed in our supplemental operating metrics has an open air component. This is the hybrid format objective we have been fulfilling over the previous four years and our continually improving operating metrics evidences its success.
“While the Company maintains its commitment to complete announced redevelopment projects, we have deferred a portion of the capital spend into 2021 due to tenants’ decisions to open locations later than originally planned. We anticipate our share of redevelopment costs to be ~$80M for the remainder of 2020, which includes additions such as FieldhouseUSA, HomeGoods, Ross Dress for Less, SCHEELS All Sports and T.J. Maxx among others. Further, we have resolved 18, or 64%, of the 28 department stores of which we have control. To repeat myself, every one of these tenants remains committed to opening.
“We have recognized the importance of having a robust fulfillment component for merchandise as well as food and beverage and have for the previous quarter or so been working to provide this amenity to our guests. As such, we are pleased to announce a collaboration with City Storage Systems, LLC to provide a turnkey solution of in house dining, pickup and delivery. We have three initial locations under letter of intent and have a dozen or so more assets which will benefit from their innovative approach with respect to eat in and delivery dining options.
“As it relates to fulfillment of merchandise, we have just announced Fulventory (view here), our proprietary initiative which allows tenants to utilize space within our assets for local and regional last mile fulfillment as well as for inventory clearance. As BOPIS





and BORIS (buy online and return in store) continue to gain traction with our guests, Fulventory captures the nexus between physical space and eCommerce and advances the symbiotic relationship which exists between the two.”
Financial and Liquidity Measures
“As stated previously, even when taking into account the reality of dramatically reduced rental collection during the second and third quarters of 2020, WPG anticipates having the ability to self fund its current financial obligations during 2020 and assumptions are more fully discussed in our Form 10-Q . We’ve stress tested cash flow projections for a variety of tenant ‘ramp up’ and deferred payment scenarios. Note, these include delivery of projects currently under construction to the extent a tenant still anticipates opening during the latter half of the year.
“Notwithstanding this self-funding capability, we deemed it prudent to recently draw ~$120M from our revolving credit facility in order to further buttress our cash position. As the preservation of cash is of utmost importance, we previously announced several proactive steps taken to preserve liquidity including the Board’s decision to temporarily suspend the quarterly cash dividend for common shares and operating partnership units throughout the remainder of the year with a potential true up dividend payment during the fourth quarter of 2020 in order to address the Company’s REIT taxable income distribution requirements.
“When factoring in our April drawdown of the credit facility, as of May 1, 2020, we had ~$150M of cash on hand including our share of joint venture cash. Our base cash flow scenario assumes significant disruption in terms of revenue collections during the second quarter of this year with our assets either closed or operating at low levels through May with a ramp up starting in June. This results in a 35% to 40% collection rate of budgeted revenue for the full quarter supported by a nearly 30% actual collection rate across our portfolio in April. Partially offsetting these shortfalls are lower cash property and corporate expenses of just under 60% of budget for the quarter.
“In terms of the second half of the year, we have addressed key variables including rent collection rates and cash operating expenses along with assumptions for property capex, redevelopment and non-core asset sales. We have also factored in contractual debt service for the remainder of the year. Our base case has us finishing 2020 with $150M to $175Mof cash on hand, thus giving the Company ample cushion to address any downside scenarios.”
Cost Saving Actions
“The national emergency we all face has prompted WPG to take necessary measures regarding corporate overhead and other cost saving measures. This has translated into a combination of furloughs and layoffs impacting ~20% of our workforce, field and corporate. This belt tightening also includes a temporary freeze on hiring, terminating third party vendor contracts when applicable, and suspending WPG’s paid internship program for 2020. In addition, executive and senior management temporarily reduced their base salary compensation in a range of 5% to 25%.”
WPG Cares: Proactively serving as a Community Resource
“I recently sent a letter offering up our assets and services to over 600 local, state, federal as well as nonprofit agencies combating COVID-19. To date, Washington Prime Group has performed ~175 community service projects (view highlights here) including serving as distribution centers for medical supplies, the hosting of COVID-19 testing stations, providing space for food depository as well as other important immediate response actions. I’m pleased to report participation of assets with onsite management is nearly one hundred percent.”
Open for Small Business Initiative
“Small business not only is a major driver of the US economy and a meaningful percentage of our Company’s revenue, these local entrepreneurs provide flavor, literally and figuratively. It’s important we work with them regarding such measures as standardization





of lease modification agreements; education via webinar on how to access SBA as well as other agency and nonprofit programs; as well as providing continuing education to improve upon their business once they reopen.
“With these objectives in mind, we created Open for Small Business (view website here) in conjunction with the University of Chicago’s Institute for Justice Clinic on Entrepreneurship and University of Chicago faculty including Nobel Laureate Richard Thaler, Freakonomics author Steven Levitt and Institute Director Elizabeth Kregor. This resource is being made available to all small businesses whether or not they are a WPG tenant simply because it’s the right thing to do.”
Corporate Financial Assistance
“We are also exploring every possible manner by which we as well as our tenants, sponsors and guests are able to benefit from current and prospective economic stimulus packages, e.g. CARES Act. We’ve addressed relevant issues with government officials, lobbyists, et. al. and have written numerous letters explaining (and quantifying) the local and regional economic contribution of our assets. In many instances, property and sales tax revenue generated from a WPG asset is essential to the municipality where it’s located. There’s also the second order GDP impact relating to revenue repatriation from our tenant’s employees as these folks generally eat, shop, play and reside where they work.”
Tenant, Sponsor and Guest Communication
“We are in constant contact with our tenants, sponsors and guests regarding everything from closure updates to reopening procedures when the time comes. In this regard we are hosting tenant forums whereby ideas are exchanged as we appreciate reopening is going to be an incremental process as it is imperative we safeguard the health of all those who contribute to the dynamic nature of our assets. This transition must also assuage the psychological concerns which will surely exist as a result of the national emergency resulting from COVID-19. We have made our comprehensive Reopening Processes and Best Practices Guide available to all of our tenants. The objective is to prepare for the reopening of our assets whereby every aspect is addressed including leasing, property management, operations, marketing, technology, social media, etc.
“In order to make certain our tenancy remains front and center with respect to the consumer, we have also introduced Well Picked Goods (view examples here, here, here and here), a weekly digital curation of local and national merchandise selected by the local management of a featured town center which includes an in store gift card promotion when tenants reopen.
“Stay healthy and strong, and we’ll continue to grind it out and serve as sector leaders as we proactively transform our assets as well as deal with COVID-19. By the way, have I mentioned our open air ‘plus’ assets comprise ~40% of total NOI and the vast majority are considered high quality?”
Unsecured Debt
On March 2, 2020, the Company repaid in full the $250 million senior unsecured notes that was scheduled to mature in April 2020. The senior unsecured notes reflected the Company’s only unsecured debt maturity through the end of 2022.
While in compliance with the Company’s unsecured debt covenants as of March 31, 2020, with the continued uncertainty regarding how quickly tenants will be able to stabilize after the unprecedented temporary store closures, there is a heightened risk regarding the Company’s ability to remain compliant with financial covenants in several of its unsecured debt arrangements going forward. Based upon recent conversations with the Company’s unsecured creditors, the Company believes that, to the extent that the impact of COVID-19 results in potential non-compliance, the Company will be able to remain compliant with such covenants through some combination of waivers, modifications or other amendments to the related agreements. However, no assurances can be made in this regard, and if the Company is unable to agree on the terms of such waivers or changes, this could create substantial doubt about its ability to continue as a going concern through May 7, 2021.





Mortgage Loans
On April 3, 2020, the Company exercised the third of three options to extend the maturity of the $65.0 million term loan secured by Weberstown Mall, located in Stockton, California, for one year. The extended maturity date is June 8, 2021.
On March 13, 2020, the mortgage loan secured by Seminole Towne Center, located in Sanford, Florida, was extinguished upon the asset being transitioned to the lender pursuant to the terms within a deed-in-lieu of foreclosure agreement. Upon transition, all involvement between the Company and the property ceased, and the Company recognized a gain of approximately $15.4 million due to the unconsolidated investment being carried on the Company’s balance sheet in a credit position, which is included in gain on disposition of interests in properties, net in the accompanying consolidated statements of operations and comprehensive loss for the first quarter of 2020.
When looking at the remaining 2020 secured debt maturities involving Grand Central Mall, located in Vienna, West Virginia, and Port Charlotte Town Center, in Port Charlotte, Florida, the Company believes, based upon current conversations with the respective servicers, that it will be able to execute short term extensions on each mortgage allowing the Company to address longer term solutions once the current level of uncertainty has cleared.
Dispositions
On January 31, 2020, the Company completed the sale of DeKalb Plaza in King of Prussia, Pennsylvania to an unaffiliated private real estate investor for a purchase price of $13.6 million.
On January 14, 2020, The Company completed the sale of Matteson Plaza in Matteson, Illinois to an unaffiliated private real estate investor for a purchase price of $1.1 million.
The net proceeds from the disposition activities were used for ongoing redevelopment and general corporate purposes. In connection with the first quarter 2020 dispositions the Company recorded a net gain of $11.3 million, which is included in gain on disposition of interests in properties, net in the accompanying consolidated statements of operations and comprehensive loss for the quarter.
Earnings Call and Webcast
Due to the unprecedented uncertainty from the COVID-19 pandemic, the Company will not hold a first quarter earnings conference call. However, the Company expects to resume hosting its earnings conference call in subsequent quarters.
Supplemental Information
For additional details on the Company’s results and properties, please refer to the Supplemental Information report on the investor relations section of the Company’s website. This release as well as the supplemental information have been furnished to the Securities and Exchange Commission (SEC) in a Form 8-K.
About Washington Prime Group
Washington Prime Group Inc. is a retail REIT and a recognized leader in the ownership, management, acquisition and development of retail properties. The Company combines a national real estate portfolio with its expertise across the entire shopping center sector to increase cash flow through rigorous management of assets and provide new opportunities to retailers looking for growth throughout the U.S. Washington Prime Group® is a registered trademark of the Company. Learn more at www.washingtonprime.com.
Contacts
Lisa A. Indest, CAO & EVP, Finance, 614.887.5844 or lisa.indest@washingtonprime.com





Kimberly A. Green, VP, Investor Relations & Corporate Communications, 614.887.5647 or kim.green@washingtonprime.com
Non-GAAP Financial Measures
This press release includes FFO and NOI, including same property NOI growth, which are financial performance measures not defined by generally accepted accounting principles in the United States (GAAP). Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in this press release. FFO and comparable NOI growth are financial performance measures widely used by securities analysts, investors and other interested parties in the evaluation of REITs. The Company believes that FFO provides investors with additional information regarding operating performance and a basis to compare the Company’s performance with that of other REITs.
The Company uses FFO in addition to net income to report operating results. We determine FFO based on the definition set forth by the National Association of Real Estate Investment Trusts (NAREIT) as net income computed in accordance with GAAP, excluding real estate related depreciation and amortization, excluding gains and losses from extraordinary items and cumulative effects of accounting changes, excluding gains and losses from the sales or disposals of previously depreciated retail operating properties, excluding impairment charges of depreciable real estate, plus the allocable portion of FFO of unconsolidated entities accounted for under the equity method of accounting based upon economic ownership interest.
NOI is used by industry analysts, investors and Company management to measure operating performance of the Company’s properties. NOI represents total property revenues less property operating and maintenance expenses. Accordingly, NOI excludes certain expenses included in the determination of net income such as corporate general and administrative expense and other indirect operating expenses, interest expense, impairment charges and depreciation and amortization expense. These items are excluded from NOI in order to provide results that are more closely related to a property’s results of operations. In addition, the Company’s computation of same property NOI excludes termination income and income from outparcel sales. The Company also adjusts for other miscellaneous items in order to enhance the comparability of results from one period to another. Certain items, such as interest expense, while included in FFO and net income, do not affect the operating performance of a real estate asset and are often incurred at the corporate level as opposed to the property level. As a result, management uses only those income and expense items that are incurred at the property level to evaluate a property’s performance. Real estate asset related depreciation and amortization, as well as impairment charges, are excluded from NOI for the same reasons that they are excluded from FFO pursuant to NAREIT’s definition.
Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Investors should understand that the Company’s computation of these non-GAAP measures might not be comparable to similar measures reported by other REITs and that these non-GAAP measures do not represent cash flow from operations as defined by GAAP, should not be considered as alternatives to net income determined in accordance with GAAP as a measure of operating performance and are not alternatives to cash flows as a measure of liquidity. Investors are cautioned that items excluded from these measures are significant components in understanding and addressing financial performance. Reconciliations of these measures are included in the press release.
Regulation Fair Disclosure (FD)
The Company routinely posts important information online on the investor relations section of the corporate website. The Company uses this website, press releases, SEC filings, conference calls, presentations and webcasts to disclose material, non-public information in accordance with Regulation FD. The Company encourages members of the investment community to monitor these





distribution channels for material disclosures. Any information accessed through the Company’s website is not incorporated by reference into, and is not a part of, this document.
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 which represent the current expectations and beliefs of management of Washington Prime Group Inc. (“WPG”) concerning the proposed transactions, the anticipated consequences and benefits of the transactions and the targeted close date for the transactions, and other future events and their potential effects on WPG, including, but not limited to, statements relating to anticipated financial and operating results, the Company’s plans, objectives, expectations and intentions, cost savings and other statements, including words such as “anticipate,” “believe,” “confident,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,” and other similar expressions. Such statements are based upon the current beliefs and expectations of WPG’s management, and involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of WPG to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, without limitation: changes in asset quality and credit risk; ability to sustain revenue and earnings growth; changes in political, economic or market conditions generally and the real estate and capital markets specifically; the impact of increased competition; the availability of capital and financing; tenant or joint venture partner(s) bankruptcies; the failure to increase store occupancy and same-store operating income; risks associated with the acquisition, disposition, (re)development, expansion, leasing and management of properties; changes in market rental rates; trends in the retail industry; relationships with anchor tenants; risks relating to joint venture properties; costs of common area maintenance; competitive market forces; the level and volatility of interest rates; the rate of revenue increases as compared to expense increases; the financial stability of tenants within the retail industry; the restrictions in current financing arrangements or the failure to comply with such arrangements; the liquidity of real estate investments; the impact of changes to tax legislation and WPG’s tax positions; losses associated with closures, failures and stoppages associated with the spread and proliferation of the coronavirus (COVID-19) pandemic; to qualify as a real estate investment trust; the failure to refinance debt at favorable terms and conditions; loss of key personnel; material changes in the dividend rates on securities or the ability to pay dividends on common shares or other securities; possible restrictions on the ability to operate or dispose of any partially-owned properties; the failure to achieve earnings/funds from operations targets or estimates; the failure to achieve projected returns or yields on (re)development and investment properties (including joint ventures); expected gains on debt extinguishment; changes in generally accepted accounting principles or interpretations thereof; terrorist activities and international hostilities; the unfavorable resolution of legal or regulatory proceedings; the impact of future acquisitions and divestitures; assets that may be subject to impairment charges; significant costs related to environmental issues; changes in LIBOR reporting practices or the method in which LIBOR is determined; and other risks and uncertainties, including those detailed from time to time in WPG’s statements and periodic reports filed with the Securities and Exchange Commission, including those described under “Risk Factors”. The forward-looking statements in this communication are qualified by these risk factors. Each statement speaks only as of the date of this press release and WPG undertakes no obligation to update or revise any forward-looking statements to reflect new information, subsequent events or circumstances. Actual results may differ materially from current projections, expectations, and plans, if any. Investors, potential investors and others should give careful consideration to these risks and uncertainties.
###






CONSOLIDATED STATEMENTS OF OPERATIONS
Washington Prime Group Inc.
(Unaudited, dollars in thousands, except per share data)

 
 
Three Months Ended
 March 31,
 
 
 
2020
 
2019
 
Revenue:
 
 
 
 
 
Rental income
 
$
147,233

 
$
163,273

 
Other income
 
5,367

 
5,550

 
Total revenues
 
152,600

 
168,823

 
 
 

 
 
 
Expenses:
 
 
 
 
 
Property operating
 
(37,280
)
 
(39,429
)
 
Real estate taxes
 
(20,252
)
 
(22,114
)
 
Advertising and promotion
 
(1,804
)
 
(1,893
)
 
Total recoverable expenses
 
(59,336
)
 
(63,436
)
 
Depreciation and amortization
 
(59,704
)
 
(66,378
)
 
General and administrative
 
(12,264
)
 
(14,125
)
 
Ground rent
 
(122
)
 
(203
)
 
Impairment loss
 
(1,319
)
 

 
Total operating expenses
 
(132,745
)
 
(144,142
)
 
 
 
 
 
 
 
Interest expense, net
 
(38,635
)
 
(36,830
)
 
Gain on disposition of interests in properties, net
 
26,755

 
9,990

 
Income and other taxes
 
617

 
(356
)
 
Loss from unconsolidated entities, net
 
(1,032
)
 
(48
)
 
Net income (loss)
 
7,560

 
(2,563
)
 
Net income (loss) attributable to noncontrolling interests
 
677

 
(896
)
 
Net income (loss) attributable to the Company
 
6,883

 
(1,667
)
 
Less: Preferred share dividends
 
(3,508
)
 
(3,508
)
 
Net income (loss) attributable to common shareholders
 
$
3,375

 
$
(5,175
)
 
 
 
 
 
 
 
Earnings (loss) per common share, basic and diluted
 
$
0.02

 
$
(0.03
)
 
 
 
 
 
 
 







CONSOLIDATED BALANCE SHEETS
Washington Prime Group Inc.
(Unaudited, dollars in thousands)

 
 
March 31,
2020
 
 
December 31,
2019
 
 
 
 
Assets:
 
 
 
 
 
Investment properties at cost
 
$
5,766,124

 
 
$
5,787,126

Construction in progress
 
152,509

 
 
115,280

 
 
5,918,633

 
 
5,902,406

Less: accumulated depreciation
 
2,411,754

 
 
2,397,736

 
 
3,506,879

 
 
3,504,670

 
 
 
 
 
 
Cash and cash equivalents
 
39,614

 
 
41,421

Tenant receivables and accrued revenue, net
 
81,271

 
 
82,762

Investment in and advances to unconsolidated entities, at equity
 
416,949

 
 
417,092

Deferred costs and other assets
 
202,081

 
 
205,034

Total assets
 
$
4,246,794

 
 
$
4,250,979

 
 
 
 
 
 
Liabilities:
 
 
 
 
 
Mortgage notes payable
 
$
1,111,344

 
 
$
1,115,608

Notes payable
 
708,420

 
 
957,566

Unsecured term loans
 
686,926

 
 
686,642

Revolving credit facility
 
524,430

 
 
204,145

Other indebtedness
 
97,907

 
 
97,601

Accounts payable, accrued expenses, intangibles, and deferred revenues
 
242,904

 
 
260,904

Distributions payable
 
3,323

 
 
3,252

Cash distributions and losses in unconsolidated entities, at equity
 

 
 
15,421

Total liabilities
 
3,375,254

 
 
3,341,139

 
 
 
 
 
 
Redeemable noncontrolling interests
 
3,265

 
 
3,265

 
 
 
 
 
 
Equity:
 
 
 
 
 
Stockholders' equity
 
 
 
 
 
Series H cumulative redeemable preferred stock
 
104,251

 
 
104,251

Series I cumulative redeemable preferred stock
 
98,325

 
 
98,325

Common stock
 
19

 
 
19

Capital in excess of par value
 
1,257,040

 
 
1,254,771

Accumulated deficit
 
(675,935
)
 
 
(655,492
)
Accumulated other comprehensive loss
 
(18,588
)
 
 
(5,525
)
Total stockholders' equity
 
765,112

 
 
796,349

Noncontrolling interests
 
103,163

 
 
110,226

Total equity
 
868,275

 
 
906,575

Total liabilities, redeemable noncontrolling interests and equity
 
$
4,246,794

 
 
$
4,250,979























RECONCILIATION OF FUNDS FROM OPERATIONS
INCLUDING PRO-RATA SHARE OF UNCONSOLIDATED PROPERTIES
Washington Prime Group Inc.
(Unaudited, dollars in thousands, except per share data)

 
 
Three Months Ended
March 31,
 
 
 
2020
 
2019
 
Funds from Operations ("FFO"):
 
 
 
 
 
Net income (loss)
 
$
7,560

 
$
(2,563
)
 
Less: Preferred dividends and distributions on preferred operating partnership units
 
(3,568
)
 
(3,568
)
 
Real estate depreciation and amortization, including joint venture impact
 
69,769

 
76,214

 
Gain on disposition of interests in properties, net including impairment loss
 
(24,110
)
 

 
FFO
 
$
49,651

 
$
70,083

 
 
 
 
 
 
 
Weighted average common shares outstanding - diluted
 
224,550

 
223,208

 
 
 
 
 
 
 
FFO per diluted share
 
$
0.22

 
$
0.31

 








RECONCILIATION OF NET OPERATING INCOME GROWTH FOR COMPARABLE PROPERTIES
INCLUDING PRO-RATA SHARE OF UNCONSOLIDATED PROPERTIES
Washington Prime Group Inc.
(Unaudited, dollars in thousands)
 
 
Three Months Ended March 31,
 
 
 
2020
 
2019
 
Variance $
 
 
 
 
 
 
 
 
 
Reconciliation of Comp NOI to Net Income (Loss):
 
 
 
 
 

 
Net Income (loss)
 
$
7,560

 
$
(2,563
)
 
$
10,123

 
 
 
 
 
 
 

 
Loss from unconsolidated entities
 
1,032

 
48

 
984

 
Income and other taxes
 
(617
)
 
356

 
(973
)
 
Gain on disposition of interests in properties, net
 
(26,755
)
 
(9,990
)
 
(16,765
)
 
Interest expense, net
 
38,635

 
36,830

 
1,805

 
Operating Income
 
19,855

 
24,681

 
(4,826
)
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
59,704

 
66,378

 
(6,674
)
 
Impairment loss
 
1,319

 

 
1,319

 
General and administrative
 
12,264

 
14,125

 
(1,861
)
 
Fee income
 
(2,186
)
 
(2,747
)
 
561

 
Management fee allocation
 

 
5

 
(5
)
 
Pro-rata share of unconsolidated joint ventures in comp NOI
 
17,402

 
17,452

 
(50
)
 
Property allocated corporate expense
 
4,754

 
4,124

 
630

 
Non-comparable properties and other (1)
 
2,589

 
(52
)
 
2,641

 
NOI from sold properties
 
(93
)
 
(1,481
)
 
1,388

 
Termination income
 
(79
)
 
(786
)
 
707

 
Straight-line rents
 
(915
)
 
(1,132
)
 
217

 
Ground lease adjustments for straight-line and fair market value
 
5

 
5

 

 
Fair market value and inducement adjustments to base rents
 
(985
)
 
(2,900
)
 
1,915

 
Less: Tier 2 and noncore properties (2)
 
(10,251
)
 
(11,137
)
 
886

 
Comparable NOI - Tier 1 and Open Air properties

$
103,383


$
106,535


$
(3,152
)
 
Comparable NOI percentage change - Tier 1 and Open Air properties
 
 
 
 
 
-3.0
 %
 
 
 
 
 
 
 
 
 

(1) Represents an adjustment to remove the NOI amounts from properties not owned and operated in all periods presented, certain non-recurring expenses (such as hurricane related expenses), as well as material insurance proceeds and other non-recurring income received in the periods presented. This also includes adjustments related to the rents from the outparcels sold to Four Corners.

(2) NOI from the Tier 2 and noncore properties held in each period presented.
 



Exhibit


































SAFE HARBOR: Some of the information contained in this presentation includes forward looking statements. Such statements are subject to a number of risks and uncertainties which could cause actual results in the future to differ materially and adversely from those described in the forward-looking statements. Investors should consult the Company's filings with the Securities and Exchange Commission for a description of the various risks and uncertainties which could cause such a difference before deciding whether to invest.










        



Table of Contents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page
Financial Statement Data
 
 
 
Consolidated statements of operations (unaudited)
1
 
Consolidated balance sheets (unaudited)
2
 
Supplemental balance sheet detail
3
 
Components of rental income, other income and corporate overhead
4
 
Reconciliation of funds from operations - including pro-rata share of unconsolidated properties
5
 
Reconciliation of net operating income growth for comparable properties - including pro-rata share of unconsolidated properties
6
 
 
 
Debt Information
 
 
 
Summary of debt
7
 
EBITDAre and key balance sheet metrics
8
 
 
 
 
Operational Data
 
 
 
Operating metrics
9
 
Leasing results and base rent psf
10
 
Releasing spreads
 
11
 
Top 10 tenants
12
 
Lease expirations
 
13
 
 
 
 
Development Activity
 
 
 
Capital expenditures
14
 
Redevelopment projects
15
 
Department store repositioning status
16
 
 
 
Property Information
 
 
 
Property information
17-19
 
 
 
Other
 
 
 
Non-GAAP pro-rata financial information
20
 
Proportionate share of unconsolidated properties - statements of operations (unaudited)
21
 
Proportionate share of unconsolidated properties - balance sheet (unaudited)
22
 
Glossary of terms
 
23



        



CONSOLIDATED STATEMENTS OF OPERATIONS
 
Washington Prime Group Inc.
 
 
 
 
(Unaudited, dollars in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
 
2020
 
2019
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
Rental income (see components on page 4)
$
147,233

 
$
163,273

 
 
Other income (see components on page 4)
5,367

 
5,550

 
 
Total revenues
152,600

 
168,823

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
Property operating
(37,280
)
 
(39,429
)
 
 
Real estate taxes
(20,252
)
 
(22,114
)
 
 
Advertising and promotion
(1,804
)
 
(1,893
)
 
 
Total recoverable expenses
(59,336
)
 
(63,436
)
 
 
Depreciation and amortization
(59,704
)
 
(66,378
)
 
 
General and administrative
(12,264
)
 
(14,125
)
 
 
Ground rent
(122
)
 
(203
)
 
 
Impairment loss
(1,319
)
 

 
 
Total operating expenses
(132,745
)
 
(144,142
)
 
 
 
 
 
 
 
 
Interest expense, net
(38,635
)
 
(36,830
)
 
 
Gain on disposition of interests in properties, net
26,755

 
9,990

 
 
Income and other taxes
617

 
(356
)
 
 
Loss from unconsolidated entities, net
(1,032
)
 
(48
)
 
 
 
 
 
 
 
 
Net income (loss)
7,560

 
(2,563
)
 
 
Net income (loss) attributable to noncontrolling interests
677

 
(896
)
 
 
Net income (loss) attributable to the Company
6,883

 
(1,667
)
 
 
Less: Preferred share dividends
(3,508
)
 
(3,508
)
 
 
Net income (loss) attributable to common shareholders
$
3,375

 
$
(5,175
)
 
 
 
 
 
 
 
 
Earnings (loss) per common share, basic and diluted
$
0.02

 
$
(0.03
)
 
 



 


 

SUPPLEMENTAL INFORMATION | 1



CONSOLIDATED BALANCE SHEETS
 
 
 
Washington Prime Group Inc.
 
 
 
(Unaudited, dollars in thousands)
 
 
 
 
 
 
 
 
 
 
March 31,
 
December 31,
 
 
2020
 
2019
 
Assets:
 
 
 
 
Investment properties at cost
$
5,766,124

 
$
5,787,126

 
Construction in progress
152,509

 
115,280

 
 
5,918,633

 
5,902,406

 
Less: accumulated depreciation
2,411,754

 
2,397,736

 
 
3,506,879

 
3,504,670

 
 
 
 
 
 
Cash and cash equivalents
39,614

 
41,421

 
Tenant receivables and accrued revenue, net (see components on page 3)
81,271

 
82,762

 
Investment in and advances to unconsolidated entities, at equity
416,949

 
417,092

 
Deferred costs and other assets (see components on page 3)
202,081

 
205,034

 
Total assets
$
4,246,794

 
$
4,250,979

 
 
 
 
 
 
Liabilities:
 
 
 
 
Mortgage notes payable
$
1,111,344

 
$
1,115,608

 
Notes payable
708,420

 
957,566

 
Unsecured term loans
686,926

 
686,642

 
Revolving credit facility
524,430

 
204,145

 
Other Indebtedness
97,907

 
97,601

 
Accounts payable, accrued expenses, intangibles, and deferred revenues (see components on page 3)
242,904

 
260,904

 
Distributions payable
3,323

 
3,252

 
Cash distributions and losses in unconsolidated entities, at equity

 
15,421

 
Total liabilities
3,375,254

 
3,341,139

 
 
 
 
 
 
Redeemable noncontrolling interests
3,265

 
3,265

 
 
 
 
 
 
Equity:
 
 
 
 
Stockholders' equity
 
 
 
 
Series H Cumulative Redeemable Preferred Stock
104,251

 
104,251

 
Series I Cumulative Redeemable Preferred Stock
98,325

 
98,325

 
Common stock
19

 
19

 
Capital in excess of par value
1,257,040

 
1,254,771

 
Accumulated deficit
(675,935
)
 
(655,492
)
 
Accumulated other comprehensive loss
(18,588
)
 
(5,525
)
 
Total stockholders' equity
765,112

 
796,349

 
Noncontrolling interests
103,163

 
110,226

 
Total equity
868,275

 
906,575

 
Total liabilities, redeemable noncontrolling interests and equity
$
4,246,794

 
$
4,250,979


SUPPLEMENTAL INFORMATION | 2                                    



SUPPLEMENTAL BALANCE SHEET DETAIL
Washington Prime Group Inc.
 
(unaudited, dollars in thousands)
 
 
 
 
 
 
March 31,
 
December 31,
 
2020
 
2019
 
 
 
 
Tenant receivables and accrued revenue, net:
 
 
 
Straight-line receivable, net of reserve
$
40,235

 
$
42,061

Tenant receivable
13,393

 
10,227

Unbilled receivables and other
40,177

 
41,988

Allowance for doubtful accounts, net
(12,534
)
 
(11,514
)
Total
$
81,271

 
$
82,762

 
 
 
 
Deferred costs and other assets:
 
 
 
Deferred leasing and corporate improvements, net
$
48,927

 
$
53,729

In place lease intangibles, net
25,359

 
27,538

Acquired above market lease intangibles, net
12,334

 
13,419

Right of use asset
12,497

 
12,915

Mortgage and other escrow deposits
35,202

 
34,054

Seller financing receivable (1)
55,000

 
55,000

Prepaids, notes receivable and other assets, net
12,762

 
8,379

Total
$
202,081

 
$
205,034

 
 
 
 
Accounts payable, accrued expenses, intangibles and deferred revenues:
 
 
 
Accounts payable and accrued expenses
$
162,180

 
$
165,469

Below market lease intangibles, net
52,694

 
54,885

Lease liability
12,497

 
12,915

Deferred revenues and deposits
15,533

 
27,635

Total
$
242,904

 
$
260,904

 
 
 
 
(1) Relates to loan provided to Mall Ground Portfolio, LLC for the Perennial ground lease of Edison Mall, Great Lakes Mall, Irving Mall, and Jefferson Valley Mall on October 10, 2019.







SUPPLEMENTAL INFORMATION | 3



COMPONENTS OF RENTAL INCOME, OTHER INCOME AND CORPORATE OVERHEAD
 
Washington Prime Group Inc.
 
 
 
 
(unaudited, dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
March 31,
 
 
 
2020
 
2019
 
 
 
 
 
 
 
 
Components of Rental Income:
 
 
 
 
 
Base rent
$
103,689

 
$
109,793

 
 
Mark-to-market adjustment
1,106

 
2,906

 
 
Straight-line rents
915

 
1,132

 
 
Temporary tenant rents
3,390

 
3,804

 
 
Overage rent
2,281

 
2,378

 
 
Tenant reimbursements
41,064

 
45,454

 
 
Lease termination income
79

 
786

 
 
Change in estimate of collectibility of rental income
(5,291
)
 
(2,980
)
 
 
       Total Rental Income
$
147,233

 
$
163,273

 
 
 
 
 
 
 
 
Components of Other Income:
 
 
 
 
 
  Sponsorship and other ancillary property income
$
1,692

 
$
1,755

 
 
  Fee income
2,186

 
2,747

 
 
  Other
1,489

 
1,048

 
 
       Total Other Income
$
5,367

 
$
5,550

 
 
 
 
 
 
 
 
Components of Corporate Overhead:
 
 
 
 
 
General & administrative - other, inclusive of internal leasing costs
$
12,264

 
$
14,125

 
 
Internal corporate overhead allocated to operating expense
6,398

 
5,653

 
 
       Total Corporate Overhead
$
18,662

 
$
19,778

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 


SUPPLEMENTAL INFORMATION | 4



RECONCILIATION OF FUNDS FROM OPERATIONS
 
Including Pro-Rata Share of Unconsolidated Properties
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
(unaudited, dollars in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
Three Months Ended
March 31,
 
 
2020
 
2019
 
Funds from Operations ("FFO"):
 
 
 
 
Net income (loss)
$
7,560

 
$
(2,563
)
 
Less: Preferred dividends and distributions on preferred operating partnership units
(3,568
)
 
(3,568
)
 
Real estate depreciation and amortization, including joint venture impact
69,769

 
76,214

 
Gain on disposition of interests in properties, net including impairment loss
(24,110
)
 

 
FFO
$
49,651

 
$
70,083

 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - diluted
224,550

 
223,208

 
 
 
 
 
 
FFO per diluted share
$
0.22

 
$
0.31

 
 
 
 
 
 
Non-cash items included in FFO:
 
 
 
 
Non-cash stock compensation expense
$
1,866

 
$
1,815

 
Straight-line adjustment as an increase to minimum rents (1)
$
590

 
$
1,487

 
Straight-line and fair market value adjustment recorded as an increase to ground lease expense (1)
$
479

 
$
484

 
Fair value of debt amortized as a decrease to interest expense (1)
$
925

 
$
924

 
Loan fee amortization and bond discount (1)
$
1,862

 
$
1,787

 
Mark-to-market/inducement adjustment as a net increase to base rents (1)
$
2,238

 
$
4,291

 
Non-real estate depreciation (1)
$
2,324

 
$
2,405

 


 

 
 
 
 
 
 
 
 
 
 
 
(1) Includes the pro-rata share of the joint venture properties.
 
 
 
 

 
 
 
 

SUPPLEMENTAL INFORMATION | 5



RECONCILIATION OF NET OPERATING INCOME GROWTH FOR COMPARABLE PROPERTIES
 
Including Pro-Rata Share of Unconsolidated Properties
 
 
 
Washington Prime Group Inc.
 
(unaudited, dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
 
 
2020
 
2019
 
Variance $
 

 
 
 
 
 
 
 
 
 
 
Reconciliation of Comp NOI to Net Income (Loss):
 
 
 
 
 
 
 
Net Income (loss)
$
7,560

 
$
(2,563
)
 
$
10,123

 
 
 
 
 
 
 
 
 
 
 
 
Loss from unconsolidated entities
1,032

 
48

 
984

 
 
 
Income and other taxes
(617
)
 
356

 
(973
)
 
 
 
Gain on disposition of interests in properties, net
(26,755
)
 
(9,990
)
 
(16,765
)
 
 
 
Interest expense, net
38,635

 
36,830

 
1,805

 
 
 
Operating Income
19,855

 
24,681

 
(4,826
)
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
59,704

 
66,378

 
(6,674
)
 
 
 
Impairment loss
1,319

 

 
1,319

 
 
 
General and administrative
12,264

 
14,125

 
(1,861
)
 
 
 
Fee income
(2,186
)
 
(2,747
)
 
561

 
 
 
Management fee allocation

 
5

 
(5
)
 
 
 
Pro-rata share of unconsolidated joint ventures in comp NOI
17,402

 
17,452

 
(50
)
 
 
 
Property allocated corporate expense
4,754

 
4,124

 
630

 
 
 
Non-comparable properties and other (1)
2,589

 
(52
)
 
2,641

 
 
 
NOI from sold properties
(93
)
 
(1,481
)
 
1,388

 
 
 
Termination income
(79
)
 
(786
)
 
707

 
 
 
Straight-line rents
(915
)
 
(1,132
)
 
217

 
 
 
Ground lease adjustments for straight-line and fair market value
5

 
5

 

 
 
 
Fair market value and inducement adjustments to base rents
(985
)
 
(2,900
)
 
1,915

 
 
 
Less: Tier 2 and noncore properties (2)
(10,251
)
 
(11,137
)
 
886

 
 
 
 
 
 
 
 
 
 
 
 
Comparable NOI - Tier 1 and Open Air properties
$
103,383

 
$
106,535

 
$
(3,152
)
 
 
 
Comparable NOI percentage change - Tier 1 and Open Air properties
 
 
 
 
-3.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represents an adjustment to remove the NOI amounts from properties not owned and operated in all periods presented, certain non-recurring expenses (such as hurricane related expenses), as well as material insurance proceeds and other non-recurring income received in the periods presented. This also includes adjustments related to the rents from the outparcels sold to Four Corners.
 
(2) NOI from the Tier 2 and noncore properties held in each period presented.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2020
 
2019
 
Variance $
 
Variance %
 
Comparable Property Net Operating Income (Comp NOI)
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
Minimum rent
$
110,913

 
$
113,464

 
$
(2,551
)
 
-2.2
 %
 
Overage rent
2,414

 
2,806

 
(392
)
 
-14.0
 %
 
Tenant reimbursements
44,201

 
45,009

 
(808
)
 
-1.8
 %
 
Change in estimate of collectibility of rental income
(2,877
)
 
(2,278
)
 
(599
)
 
-26.3
 %
 
Other
2,408

 
1,770

 
638

 
36.0
 %
 
Total revenue
157,059

 
160,771

 
(3,712
)
 
-2.3
 %
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
Recoverable expenses - operating
(31,346
)
 
(31,462
)
 
116

 
0.4
 %
 
Recoverable expenses - real estate taxes
(21,115
)
 
(21,568
)
 
453

 
2.1
 %
 
Ground rent
(1,215
)
 
(1,206
)
 
(9
)
 
-0.7
 %
 
Total operating expenses
(53,676
)
 
(54,236
)
 
560

 
1.0
 %
 
 
 
 
 
 
 
 
 
 
Comp NOI - Excluding Tier 2 and Noncore properties
$
103,383

 
$
106,535

 
$
(3,152
)
 
-3.0
 %
 
 
 
 
 
 
 
 
 
 
Comp NOI - Tier 1 enclosed retail properties
$
70,737

 
$
76,186

 
$
(5,449
)
 
-7.2
 %
 
Comp NOI - Open Air properties
$
32,646

 
$
30,349

 
$
2,297

 
7.6
 %
 

SUPPLEMENTAL INFORMATION | 6



SUMMARY OF DEBT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt
as of
3/31/2020
 
Total Debt, Including WPG Share of Unconsolidated Entities as of 3/31/2020
 
Total Debt
as of
12/31/2019
 
Total Debt, Including WPG Share of Unconsolidated Entities as of 12/31/2019
 
 
Schedule of
Maturities by Year (1)
 
Mortgage
Debt
Maturities
 
Weighted Avg.
Interest Rate
 
Unsecured Maturities
 
Weighted Avg. Interest Rate
 
Total Debt Maturities
 
Weighted Avg. Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated debt:
 
 
 
 
 
 
 
 
Total debt, including WPG share of unconsolidated entities but excluding other indebtedness:
 
 
 
 
 
Mortgage debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Fixed
 
$
1,048,242

 
$
1,048,242

 
$
1,052,242

 
$
1,052,242

 
 
2020
 
$
79,476

 
5.7%
 
$



 
$
79,476

 
5.7%
 
   Variable
 
65,000

 
65,000

 
65,000

 
65,000

 
 
2021
 
304,261

 
4.4%
 



 
304,261

 
4.4%
 
Debt issuance costs
 
(4,785
)
 
(4,785
)
 
(5,097
)
 
(5,097
)
 
 
2022
 
128,881

 
4.4%
 
877,000


3.4%
 
1,005,881

 
3.5%
 
Fair value debt adjustments
 
2,887

 
2,887

 
3,463

 
3,463

 
 
2023
 
62,519

 
4.5%
 
340,000


4.1%
 
402,519

 
4.1%
 
   Total mortgage debt
 
1,111,344

 
1,111,344

 
1,115,608

 
1,115,608

 
 
2024
 
285,718

 
4.7%
 
720,900


6.5%
 
1,006,618

 
6.0%
 
 
 
 
 
 
 
 
 
 
 
 
2025
 
367,650

 
3.9%
 




367,650

 
3.9%
 
Unsecured debt
 
 
 
 
 
 
 
 
2026
 
12,279

 
4.3%
 



 
12,279

 
4.3%
 
   Credit facility
 
527,000

 
527,000

 
207,000

 
207,000

 
 
2027
 
192,909

 
4.3%
 

 
 
 
192,909

 
4.3%
 
   Term loans
 
690,000

 
690,000

 
690,000

 
690,000

 
 
2028
 

 
0.0%
 

 
 
 

 
0.0%
 
   Bonds payable
 
720,900

 
720,900

 
970,900

 
970,900

 
 
2029
 
294,864

 
4.4%
 

 
 
 
294,864

 
4.4%
 
Debt issuance costs & discounts
 
(18,124
)
 
(18,124
)
 
(19,547
)
 
(19,547
)
 
 
2030
 

 
0.0%
 

 
 
 

 
0.0%
 
   Total unsecured debt
 
1,919,776

 
1,919,776

 
1,848,353

 
1,848,353

 
 
Thereafter
 
1,885

 
4.7%
 

 
 
 
1,885

 
4.7%
 
Total mortgage and unsecured debt
 
3,031,120

 
3,031,120

 
2,963,961

 
2,963,961

 
 
Fair value,debt issuance cost, and debt discount adjustments
 
(386
)
 
 
 
(18,124
)
 
 
 
(18,510
)
 
 
 
Other indebtedness, net of issuance costs (2)
 
97,907

 
97,907

 
97,601

 
97,601

 
 
Total debt
 
$
1,730,056

 
4.4%
 
$
1,919,776

 
4.7%
 
$
3,649,832

 
4.6%
 
Total consolidated debt
 
$
3,129,027

 
$
3,129,027

 
$
3,061,562

 
$
3,061,562

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Includes extension options
Unconsolidated debt:
 
 
 
 
 
 
 
 
Schedule of
Maturities by Year (1)
 
Mortgage
Debt
Maturities
 
Weighted Avg.
Interest Rate
 
Unsecured Maturities
 
Weighted Avg. Interest Rate
 
Total Debt Maturities
 
Weighted Avg. Interest Rate
 
Mortgage loans payable
 
$
1,224,505

 
$
617,200

 
$
1,278,946

 
$
618,075

 
 
 
 
 
 
 
 
 
Debt issuance costs
 
(4,145
)
 
(2,113
)
 
(4,432
)
 
(2,206
)
 
 
 
 
 
 
 
 
 
Fair value debt adjustments
 
7,107

 
3,625

 
7,793

 
3,974

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total unconsolidated debt
 
$
1,227,467

 
$
618,712

 
$
1,282,307

 
$
619,843

 
 
Total consolidated debt excluding other indebtedness:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total debt:
 
$
4,356,494

 
$
3,747,739

 
$
4,343,869

 
$
3,681,405

 
 
2020

$
79,476


5.7%

$




$
79,476


5.7%
 
(2) The Company has a seller financing receivable of $55 million with Mall Ground Portfolio, LLC that offsets the $97.9 million indebtedness for a net balance of $42.9 million.
 
 
2021

268,208


4.3%





268,208


4.3%
 
 
 
 % of
Total Debt
as of
3/31/20
 
Our Share of Total Debt
as of 3/31/20
 
Weighted Avg.
Interest
Rate
 
Weighted
Avg. Years
to Maturity
 
 
2022

128,881


4.4%

877,000


3.4%

1,005,881


3.5%
 
 
 
 
 
 
 
 
2023

56,095


4.7%

340,000


4.1%

396,095


4.1%
 
 
 
 
 
 
 
 
2024

285,718


4.7%

720,900


6.5%

1,006,618


6.0%
 
Consolidated debt excluding other indebtedness:
 
 
 
 
 
 
 
 
2025













 
   Fixed
 
77%
 
$
2,344,764

 
5.2
%
 
4.0

 
 
2026













 
   Variable
 
23%
 
686,356

 
2.9
%
 
2.6

 
 
2027













 
   Total Consolidated (3)
 
100%
 
$
3,031,120

 
4.7
%
 
3.7

 
 
2028













 
 
 
 
 
 
 
 
 
 
 
 
2029

294,864


4.4%






294,864


4.4%
 
Unconsolidated debt:
 
 
 
 
 
 
 
 
 
 
2030













 
   Fixed
 
99%
 
$
612,288

 
4.1
%
 
5.5

 
 
Thereafter













 
   Variable
 
1%
 
6,424

 
3.5
%
 
2.8

 
 
Fair value,debt issuance cost, and debt discount adjustments

(1,898
)



(18,124
)



(20,022
)


 
   Total Unconsolidated
 
100%
 
$
618,712

 
4.1
%
 
5.5

 
 
Total debt

$
1,111,344


4.6%

$
1,919,776


4.7%

$
3,031,120


4.7%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total debt:
 
 
 
 
 
 
 
 
 
 
(1) Includes extension options
 
 
 
   Fixed
 
81%
 
$
2,957,052

 
4.9
%
 
4.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Variable
 
19%
 
692,780

 
2.9
%
 
2.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Total debt
 
100%
 
$
3,649,832

 
4.6
%
 
4.0

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3) Excluded is other indebtedness of $97,907 with a weighted average interest rate of 8.6% and weighted average years to maturity of approximately 29.5 years.
 
 
 
 
 
 

SUPPLEMENTAL INFORMATION | 7



EBITDAre AND KEY BALANCE SHEET METRICS
Washington Prime Group Inc.
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
March 31,
 
 
 
 
2020
 
2019
 
 
Calculation of EBITDAre:
 
 
 
 
 
 
Net income (loss)
 
$
7,560

 
$
(2,563
)
 
 
Interest expense, net
 
38,635

 
36,830

 
 
Income and other taxes
 
(617
)
 
356

 
 
Depreciation and amortization
 
59,704

 
66,378

 
 
Gain on disposition of interests in properties, net
 
(24,785
)
 

 
 
Impairment loss
 
1,319

 

 
 
Pro-rata share of unconsolidated entities, net
 
18,432

 
18,409

 
 
EBITDAre (1)
 
$
100,248

 
$
119,410

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bond Covenant Requirement (2)
 
As of
March 31, 2020
 
 
Key Balance Sheet Metrics:
 
 
Ratio
 
 
Total indebtedness to Total assets
 
≤ 60%
 
51.8%
 
 
Secured indebtedness to Total assets
 
≤ 40%
 
19.4%
 
 
Consolidated EBITDA / Annual service charge
 
≥ 1.5x
 
2.36x
 
 
Total unencumbered assets / Total unsecured indebtedness
 
> 150%
 
199%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) EBITDAre is calculated consistent with the NAREIT definition.
 
 
(2) The covenants detailed are from the August 2017 Bond Offering.
 
 

 






SUPPLEMENTAL INFORMATION | 8



OPERATING METRICS
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PORTFOLIO SUMMARY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Count
Leased Occupancy % (1)
 
Store Sales
Per Square Foot for
12 Months Ended (1)
 
Store
Occupancy Cost % (1)
 
 % of Total
Comp NOI
for 3 Months
Ended 3/31/20
 
 NOI Growth
for 3 Months Ended 3/31/20
 
 Releasing Spreads Trailing Twelve Months Ended 2020
 
 
3/31/20
 
3/31/19
 
3/31/20 (5)
 
3/31/19
 
3/31/20 (5)
 
3/31/19
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Open Air Properties
47
96.6%
 
95.4%
 


 


 

 

 
28.7%
 
7.6%
 
-0.1%
 
Tier 1 Enclosed Retail Properties
41
89.7%
 
92.4%
 
$
423

 
$
401

 
11.2%
 
11.7%
 
62.3%
 
-7.2%
 
-4.0%
 
Tier 1 and Open Air
88
92.9%
 
93.8%
 


 


 

 

 
91.0%
 
-3.0%
 
-2.7%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ENCLOSED RETAIL PROPERTY TIERS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TIER 1
 

 
 
 
TIER 2 / NONCORE
 
 
 
 
 
 
 
 
 
 
 
 
 
TIER 2
 
 
 
 
 
 
 
 
 
Arbor Hills
 
Mesa Mall
 
 
 

 
 
 
Anderson Mall
 
 
 
 
 
Arboretum, The
 
Morgantown Mall
 

 
 
 
Boynton Beach Mall
 
 
 
 
 
Ashland Town Center
 
Northtown Mall
 

 
 
 
Chautauqua Mall
 
 
 
 
 
Bowie Town Center
 
Northwoods Mall
 

 
 
 
Indian Mound Mall
 
 
 
 
 
Brunswick Square
 
Oklahoma City Properties
 

 
 
 
Lima Mall
 
 
 
 
 
Clay Terrace
 
Orange Park Mall
 
 
 

 
 
 
Maplewood Mall
 
 
 
 
 
Cottonwood Mall
 
Paddock Mall
 

 
 
 
New Towne Mall
 
 
 
 
 
Dayton Mall
 
Pearlridge Center
 

 
 
 
Oak Court Mall
 
 
 
 
 
Edison Mall
 
Polaris Fashion Place
 

 
 
 
Rolling Oaks Mall
 
 
 
 
 
Grand Central Mall
 
Port Charlotte Town Center
 

 
 
 
Sunland Park Mall
 
 
 
 
 
Great Lakes Mall
 
Scottsdale Quarter
 

 
 
 
Westminster Mall (2)
 
 
 
 
 
Irving Mall
 
Southern Hills Mall
 

 
 
 
 
 
 
 
 
 
Jefferson Valley Mall
 
Southern Park Mall
 

 
NONCORE
 
 
 
Lincolnwood Town Center
 
Southgate Mall
 

 
 
 
Charlottesville Fashion Square (3)
 
 
 
Lindale Mall
 
The Outlet Collection | Seattle
 
 
 
 
 
Muncie Mall (4)
 
 
 
 
 
Longview Mall
Town Center at Aurora
 
 
 
 
 
 
 
 
 
 
 
Malibu Lumber Yard
Town Center Crossing & Plaza
 
 
 
 
 
 
 
 
 
 
 
Mall at Fairfield Commons, The
Waterford Lakes Town Center
 
 
 
 
 
 
 
 
 
 
 
 
 
Mall at Johnson City, The
Weberstown Mall
 
 
 
 
 
 
 
 
 
 
 
 
 
Markland Mall
 
WestShore Plaza
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Melbourne Square
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Metrics include properties owned and managed as of March 31, 2020, and exclude Tier 2 and Noncore properties.
 
 
 
(2) Due to major planned redevelopment, Westminster Mall was reclassed from Tier 1 until stabilized.
 
 
 
(3) On March 17, 2020, the Company received notification that a receiver was appointed to manage and lease Charlottesville Fashion Square. An affiliate of the Company still holds title to the property.
 
(4) On April 14, 2020, the Company received notification that a receiver was appointed to manage and lease Muncie Mall. An affiliate of the Company still holds title to the property.
 
(5) For 2020, the sales and occupancy cost % are based on trailing twelve months through February as most of our tenants were closed the last two to three weeks of March, resulting in a comparable sales decline of 34% for the month of March 2020 from March 2019.
 

 
 
 
 
 
 
 

SUPPLEMENTAL INFORMATION | 9



LEASING RESULTS AND BASE RENT PSF
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year-to-date through March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leasing Results- Comparable Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
No Exclusions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q120 Deal Volume by Month
 
2020 Year-to-Date
 
Change from Prior YTD
 
January 2020
 
February 2020
 
March 2020
 
New
 
Renewal
 
Total
 
Total
 
# of Deals
 
Sqft
 
# of Deals
 
Sqft
 
# of Deals
 
Sqft
 
# of Deals
 
Sqft
 
# of Deals
 
Sqft
 
# of Deals
 
Sqft
 
# of Deals
 
Sqft
Tier 1 Enclosed Retail Properties
48

 
182,098

 
60

 
320,984

 
35

 
175,056

 
35

 
258,155

 
108

 
419,983

 
143

 
678,138

 
-26%
 
-19%
Open Air Properties
18

 
133,695

 
18

 
128,164

 
22

 
316,854

 
21

 
179,121

 
37

 
399,592

 
58

 
578,713

 
81%
 
216%
Total Tier 1 and Open Air
66

 
315,793

 
78

 
449,148

 
57

 
491,910

 
56

 
437,276

 
145

 
819,575

 
201

 
1,256,851

 
-10%
 
23%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 2 and Noncore Properties
13

 
65,753

 
14

 
62,709

 
5

 
18,996

 
3

 
12,596

 
29

 
134,862

 
32

 
147,458

 
-27%
 
-36%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grand Total
79

 
381,546

 
92

 
511,857

 
62

 
510,906

 
59

 
449,872

 
174

 
954,437

 
233

 
1,404,309

 
-13%
 
12%
Percentage Change from prior year
13%
 
93%
 
6%
 
10%
 
-44%
 
-14%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leasing Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Small Shop Deals for Enclosed Properties; Anchor and Small Shop Deals for Open Air
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number
 
Square Feet
 
Base Rent PSF
 
Average Term
 
Tenant Allow.$(000)s
 
Tenant Allow. PSF
 
of Leases
 
New
 
Renewal
 
Total
 
New
 
Renewal
 
Total
 
New
 
Renewal
 
Total
 
New
 
Renewal
 
New
 
Renewal
Tier 1 Enclosed Retail Properties
78

 
91,322

 
141,177

 
232,499

 
$
28.78

 
$
25.78

 
$
26.96

 
8.0

 
3.3

 
5.1

 
$
4,336

 
$
995

 
$
47.48

 
$
7.05

Open Air Properties
51

 
179,121

 
371,441

 
550,562

 
$
15.05

 
$
12.67

 
$
13.44

 
9.0

 
5.1

 
6.7

 
$
3,388

 
$
649

 
$
18.92

 
$
1.75

Total Tier 1 and Open Air
129

 
270,443

 
512,618

 
783,061

 
$
19.69

 
$
16.28

 
$
17.46

 
8.4

 
4.0

 
5.8

 
$
7,724

 
$
1,644

 
$
28.56

 
$
3.21

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 2 and Noncore Properties
12

 
2,042

 
27,979

 
30,021

 
$
40.16

 
$
27.96

 
$
28.79

 
4.0

 
3.2

 
3.3

 
$

 
$
50

 
$

 
$
1.79

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
141

 
272,485

 
540,597

 
813,082

 
$
19.84

 
$
16.88

 
$
17.87

 
8.2

 
3.9

 
5.6

 
$
7,724

 
$
1,694

 
$
28.35

 
$
3.13

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: The table above includes leasing results for enclosed properties for stores of 10,000 SF or less, also anchors and office leases are excluded. For open air properties, office leases are excluded. Only new leases and renewals with terms in excess of 12 months are included. These results include properties owned and managed at March 31, 2020.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Base Rent PSF
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Base Minimum Rent PSF
As of March 31,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2020
 
2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 Enclosed Retail Properties
$
28.53
 
 
$
29.15
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Open Air Properties
$
13.87
 
 
$
13.91
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Tier 1 and Open Air Properties
$
21.35
 
 
$
21.78
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

SUPPLEMENTAL INFORMATION | 10



RELEASING SPREADS
 
 
 
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
 
 
 
For the trailing 12 months ended March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Square Footage of Signings
 
New
Rate PSF
 
Prior Rate PSF
 
Re-leasing Spread
 
 
 
 
 
 
 
 $
 
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Open Air Properties:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New
 
356,504

 
$
15.68

 
$
16.52

 
$
(0.84
)
 
-5.1
 %
 
 
Renewal
 
688,387

 
$
19.68

 
$
19.29

 
$
0.39

 
2.0
 %
 
 
All Deals
 
1,044,891

 
$
18.32

 
$
18.34

 
$
(0.02
)
 
-0.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 Enclosed Retail Properties:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New
 
222,298

 
$
34.47

 
$
34.53

 
$
(0.06
)
 
-0.2
 %
 
 
Renewal
 
757,472

 
$
42.31

 
$
44.47

 
$
(2.16
)
 
-4.9
 %
 
 
All Deals
 
979,770

 
$
40.53

 
$
42.21

 
$
(1.68
)
 
-4.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Open Air and Tier 1 Properties:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New
 
578,802

 
$
22.90

 
$
23.43

 
$
(0.53
)
 
-2.3
 %
 
 
Renewal
 
1,445,859

 
$
31.54

 
$
32.48

 
$
(0.94
)
 
-2.9
 %
 
 
All Deals
 
2,024,661

 
$
29.07

 
$
29.89

 
$
(0.82
)
 
-2.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: The Company's Tier 2 and noncore properties are excluded from these metrics.
 


SUPPLEMENTAL INFORMATION | 11



TOP 10 TENANTS
 
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
 
As of March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Anchor Stores
(Ranked by Percent of Total Minimum Rents)
 
 
National Tenant Name
 
Tenant DBA's in Portfolio
 
Number
of Stores
 
GLA of
Stores
 
Percent of Total GLA in Portfolio
 
Percent of Total Annualized Base Minimum Rent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Signet Jewelers, Ltd.
 
Body by Pagoda, Gordon's Jewelers, Jared's, J.B. Robinson Jewelers, Kay Jewelers, Leroy's Jewelers, Mark's & Morgan, Piercing Pagoda, Plumb Gold, Rogers Jewelers, Silver and Gold Connection, Totally Pagoda, Zales Jewelers
 
113
 
154,620
 
0.3%
 
2.6%
 
 
L Brands, Inc.
 
Bath & Body Works, Pink, Victoria's Secret, White Barn Candle
 
107
 
555,829
 
1.0%
 
2.5%
 
 
Footlocker, Inc.
 
Champs Sports, Foot Action USA, Footlocker, Kids Footlocker, Lady Footlocker
 
76
 
329,912
 
0.6%
 
1.9%
 
 
American Eagle Outfitters, Inc.
 
aerie, American Eagle
 
41
 
232,396
 
0.4%
 
1.3%
 
 
The Gap, Inc.
 
Athleta, Banana Republic, Banana Republic Outlet, Gap, Gap Kids, Gap Outlet, Intermix, Janie and Jack, Old Navy
 
32
 
330,819
 
0.6%
 
1.2%
 
 
Roark Capital Group
 
Arby's, Auntie Anne's, Buffalo Wild Wings, Cinnabon, Corner Bakery, Drybar, Fitness Connection, Hardee's, Jamba Juice, Jimmy John's, Massage Envy, McAlister's Deli, Miller's Ale House, Moe's Southwest Grill, Sonic, Waxing the City
 
86
 
154,156
 
0.3%
 
1.1%
 
 
Luxottica Group
 
Apex, Lenscrafters, Oakley, Pearle Vision, Sunglass Hut, Watch Station
 
64
 
169,261
 
0.3%
 
1.1%
 
 
Ulta Salon, Cosmetics & Fragrance, Inc.
 
Ulta Beauty
 
24
 
254,205
 
0.5%
 
1.1%
 
 
The Finish Line, Inc.
 
Finish Line, JD Sports
 
33
 
194,352
 
0.4%
 
1.0%
 
 
Ascena Retail Group Inc.
 
Ann Taylor, Catherine's, Justice, Lane Bryant, Loft
 
70
 
317,949
 
0.6%
 
1.0%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Anchor Stores
(Ranked by Total GLA)
 
 
National Tenant Name
 
Tenant DBA's in Portfolio
 
Number
of Stores
 
GLA of
Stores
 
Percent of Total GLA in Portfolio
 
Percent of Total Annualized Base Minimum Rent
Number of WPG Owned Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Macy's, Inc.
 
Macy's
 
25
 
4,419,870
 
8.2%
 
0.2%
4
 
 JCPenney Company, Inc.
 
JCPenney
 
34
 
4,368,952
 
8.1%
 
1.1%
19
 
 Dillard's, Inc.
 
Dillard's
 
21
 
2,747,904
 
5.1%
 
0.1%
2
 
 Target Corporation
 
Target, Super Target
 
10
 
1,419,100
 
2.6%
 
0.0%
1
 
 Kohl's Corporation
 
Kohl's
 
13
 
1,186,302
 
2.2%
 
1.0%
10
 
 Sears Holding Corporation (1)
 
Sears
 
6
 
1,062,268
 
2.0%
 
0.3%
2
 
 Dick's Sporting Goods, Inc.
 
Dick's Sporting Goods, Field & Stream, Golf Galaxy
 
16
 
970,096
 
1.8%
 
2.1%
14
 
 Best Buy Co. Inc.
 
Best Buy
 
16
 
708,102
 
1.3%
 
1.6%
15
 
 Wal-Mart Stores, Inc.
 
Wal-Mart
 
4
 
618,061
 
1.1%
 
0.0%
0
 
 TJX Companies
 
Home Goods, Marshalls, TJ Maxx
 
18
 
563,956
 
1.0%
 
1.1%
18
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Of the 6 stores, one is owned by Seritage Properties. Prior to the COVID-19 pandemic store closures, 3 of the Sears stores remained open.
 
 
Note: Schedule above includes properties owned and managed at March 31, 2020.
 

SUPPLEMENTAL INFORMATION | 12



LEASE EXPIRATIONS (1)
 
 
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
As of March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Enclosed Retail Properties
 
 
Number of Leases Expiring
 
Anchor Square Feet of GLA Expiring
 
Store Square Feet of GLA Expiring
 
Total Square Feet of GLA Expiring
 
Anchor Annualized Base Rents PSF Expiring
 
Store Annualized Base Rents PSF Expiring
 
% of Annualized Base Rents Represented by Expiring Leases
 
Year
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Month To Month Leases
214

 

 
678,957

 
678,957

 
$

 
$
26.82

 
3.2
%
 
2020
255

 
546,522

 
575,304

 
1,121,826

 
$
3.88

 
$
30.87

 
3.5
%
 
2021
694

 
758,512

 
2,255,460

 
3,013,972

 
$
7.12

 
$
26.75

 
11.3
%
 
2022
563

 
868,117

 
1,740,947

 
2,609,064

 
$
7.08

 
$
28.73

 
10.3
%
 
2023
462

 
1,175,696

 
1,542,032

 
2,717,728

 
$
8.64

 
$
29.82

 
9.9
%
 
2024
327

 
698,314

 
1,090,544

 
1,788,858

 
$
6.67

 
$
29.90

 
6.8
%
 
2025
251

 
1,502,037

 
1,102,192

 
2,604,229

 
$
7.79

 
$
27.94

 
7.9
%
 
2026
196

 
466,303

 
1,094,736

 
1,561,039

 
$
6.28

 
$
28.48

 
5.9
%
 
2027
169

 
429,380

 
783,914

 
1,213,294

 
$
7.98

 
$
29.96

 
4.5
%
 
2028
131

 
251,005

 
569,813

 
820,818

 
$
14.03

 
$
28.34

 
3.5
%
 
2029
97

 
486,385

 
429,748

 
916,133

 
$
7.08

 
$
31.77

 
3.0
%
 
2030 and Thereafter
81

 
702,328

 
463,125

 
1,165,453

 
$
10.23

 
$
23.99

 
3.3
%
 
Specialty Leasing Agreements w/ terms in excess of 11 months
693

 

 
1,620,072

 
1,620,072

 
$

 
$
9.76

 
2.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Open Air Properties
 
 
Number of Leases Expiring
 
Anchor Square Feet of GLA Expiring
 
Store Square Feet of GLA Expiring
 
Total Square Feet of GLA Expiring
 
Anchor Annualized Base Rents PSF Expiring
 
Store Annualized Base Rents PSF Expiring
 
% of Annualized Base Rents Represented by Expiring Leases
 
Year
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Month To Month Leases
19

 
66,936

 
46,480

 
113,416

 
$
13.89

 
$
17.54

 
0.3
%
 
2020
84

 
165,392

 
241,274

 
406,666

 
$
6.81

 
$
21.91

 
1.2
%
 
2021
159

 
1,140,017

 
428,049

 
1,568,066

 
$
8.82

 
$
19.95

 
3.6
%
 
2022
159

 
857,927

 
494,147

 
1,352,074

 
$
10.00

 
$
18.72

 
3.4
%
 
2023
149

 
1,051,124

 
464,554

 
1,515,678

 
$
10.67

 
$
19.79

 
3.9
%
 
2024
111

 
749,684

 
324,745

 
1,074,429

 
$
9.29

 
$
21.45

 
2.6
%
 
2025
87

 
649,894

 
200,773

 
850,667

 
$
12.49

 
$
24.96

 
2.5
%
 
2026
63

 
338,995

 
203,244

 
542,239

 
$
12.89

 
$
24.67

 
1.8
%
 
2027
61

 
405,018

 
186,023

 
591,041

 
$
10.58

 
$
22.99

 
1.6
%
 
2028
30

 
197,123

 
95,888

 
293,011

 
$
14.46

 
$
19.88

 
0.9
%
 
2029
45

 
119,030

 
210,109

 
329,139

 
$
15.31

 
$
22.23

 
1.3
%
 
2030 and Thereafter
22

 
307,027

 
108,250

 
415,277

 
$
10.36

 
$
18.85

 
1.0
%
 
Specialty Leasing Agreements w/ terms in excess of 11 months
11

 

 
33,715

 
33,715

 
$

 
$
5.52

 
0.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Does not consider the impact of renewal options that may be contained in leases, and this only considers landlord owned GLA. Schedule includes leases for properties owned and managed at March 31, 2020.

SUPPLEMENTAL INFORMATION | 13



CAPITAL EXPENDITURES
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated
Three Months
Ended
March 31, 2020
Unconsolidated Joint Venture Proportionate Share
Total
Three Months
Ended
March 31, 2020
 
Consolidated
Three Months
Ended
March 31, 2019
Unconsolidated Joint Venture Proportionate Share
Total
Three Months
Ended
March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
New Developments
 
$

$

$

 
$

$

$

 
Redevelopments, Renovations, and Expansions
 
$
40,129

$
4,214

$
44,343

 
$
15,623

$
4,109

$
19,732

 
Internal Leasing Costs
 
$
130

$
214

$
344

 
$
337

$
118

$
455

 
 
 
 
 
 
 
 
 
 
 
Property Capital Expenditures:
 
 
 
 
 
 
 
   Non-anchor stores tenant improvements and allowances
 
$
7,643

$
1,561

$
9,204

 
$
9,918

$
1,036

$
10,954

 
   Operational capital expenditures
 
7,718

431

8,149

 
6,958

755

7,713

 
   Total Property Capital Expenditures
 
$
15,361

$
1,992

$
17,353

 
$
16,876

$
1,791

$
18,667

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


SUPPLEMENTAL INFORMATION | 14



REDEVELOPMENT PROJECTS
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
As of March 31, 2020
 
 
 
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Projects under construction or approved for construction with an estimated investment of $5 million or more
 
Property Name
 
City
 
St
 
Opportunity
 
Ownership
%
 
Estimated
Total Costs (1)(3)
 
Estimated
Project Yield
(1) (2)
 
WPG Costs Incurred
to Date (3)
 
Estimated
Completion (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fairfield Town Center
 
Houston
 
TX
 
Final phase of development to add 130,000 SF to add a theater, value fashion apparel as well as big box and small shop stores.
 
100%
 
$26,000 - $30,000
 
7% - 8%
 
$
10,086

 
2020/2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grand Central Mall
 
Parkersburg
 
WV
 
Replaced Elder-Beerman with H&M, replaced Toys R Us with Big Lots, replaced hhgregg with Ulta and Five Below, planned replacement of former Sears with Home Goods, PetSmart, Ross Dress for Less, and TJ Maxx
 
100%
 
$31,000 - $33,000
 
6% - 8%
 
$
18,354

 
2019/ 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mesa Mall
 
Grand Junction
 
CO
 
Dillard's will build new store to replace former Sears. Costs reflect demolition of building and parking lot and delivery of new pad and utilities as well as landscaped and upgraded parking field to Dillard's.
 
100%
 
$7,000 - $8,000
 
n/a (5)
 
$
5,785

 
2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mall at Johnson City
 
Johnson City
 
TN
 
Replace former Sears with retail development anchored by Home Goods. Replace former Sears auto center with multi-tenant building for new restaurants.
 
51%
 
$7,000 - $8,000
(4
)
5% - 6%
 
$
689

(4
)
2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Morgantown Mall
 
Morgantown
 
WV
 
Replace former Belk store with a new value retailer and a new entertainment tenant
 
100%
 
$8,000 - $9,000
 
7% - 9%
 
$
443

 
2020/ 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outlet Collection | Seattle
 
Seattle
 
WA
 
Replace former Sam's Club with FieldhouseUSA, a community based multi-purpose indoor sports facility specializing in leagues, events and tournaments.
 
100%
 
$11,000 - $13,000
 
9% - 10%
 
$
3,433

 
2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Polaris Fashion Place
 
Columbus
 
OH
 
Replace former Sears with FieldhouseUSA and mixed use component including hospitality
 
51%
 
$12,000 - $14,000
(4
)
4% - 5%
 
$
1,278

(4
)
2020/ 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Southern Park Mall
 
Youngstown
 
OH
 
Phase I of redevelopment: Replace former Sears with new entertainment, dining, retail, and community green space
 
100%
 
$16,000 - $18,000
(6
)
7% - 8%
 
$
5,957

 
2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Town Center at Aurora
 
Aurora
 
CO
 
Replace former Sears with FieldhouseUSA and mixed use component including hospitality
 
100%
 
$21,000 - $23,000

5% - 6%
 
$
1,483


2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Estimated total costs, project yield, and completion are subject to adjustment as a result of changes (some of which are not under the direct control of the company) that are inherent in the development process.
 
(2) The project yield excludes any NOI benefit to the property that is indirectly related to the redevelopment other than near-term renewals, although each project does benefit other aspects of the property. The incremental yield does not consider prior rent paid by bankrupt tenants and does include the impact of co-tenancy cures as applicable.
 
(3) Project costs exclude the allocation of internal costs such as labor, interest, and taxes.
 
(4) Amounts shown represent 51% of the project spend.
 
(5) Dillard's will construct and own the building and provide a 10-year operating covenant.
 
(6) Does not include unallocated portions of the planned interior renovation. Estimated Costs are shown net of the approved public incentives package.

SUPPLEMENTAL INFORMATION | 15



DEPARTMENT STORE REPOSITIONING STATUS
 
Washington Prime Group Inc.
 
Plans as of March 31, 2020
 
 
 
 
 
 
 
 
 
Count
Property
City
Former Department Store
 Owner
Closing Date
Planned Replacement
Status
Department Stores formerly occupied by Sears / BonTon / Belk - March 31, 2020
 
 
Department Stores Addressed
 
 
 
1
Grand Central Mall
Parkersburg, WV
Sears
Lease
Dec-18
Home Goods, PetSmart, Ross Dress for Less, and TJ Maxx
Leases executed, Under construction
2
Lincolnwood Town Center
Lincolnwood, IL
Carsons Pirie Scott
Lease
Aug-18
RoomPlace
RoomPlace opened August 2019
3
Longview Mall
Longview, TX
Sears
Lease
Jan-19
Conn's HomePlus/ Other
Lease signed/ LOI
4
Mall at Fairfield Commons
Dayton, OH
Sears
Lease
Dec-18
Morris Home Furniture / Round1
Morris Home under construction/ Round1 opened Q419
5
Mall at Johnson City
Johnson City, TN
Sears
Lease
2020
Home Goods/ Other/ Dining
Home Goods lease executed
6
Markland Mall
Kokomo, IN
Carsons Pirie Scott
Lease
Aug-18
Dunham's Sports
Lease executed
7
Mesa Mall
Grand Junction, CO
Sears
Lease
Nov-18
Dillard's
LOI executed
8
Mesa Mall
Grand Junction, CO
Herberger's
Lease
Aug-18
National sporting goods retailer
LOI received
9
Morgantown Mall
Morgantown, WV
Belk
Lease
Mar-18
Ollie's Bargain Outlet/ Entertainment
Lease executed/ LOI executed
10
Morgantown Mall
Morgantown, WV
Elder-Beerman
Lease
Aug-18
Dunham's Sports
Dunham's opened April 2020
11
Morgantown Mall
Morgantown, WV
Sears
Lease
Jan-19
Outdoor greenspace
Plans finalized
12
Polaris Fashion Place
Columbus, OH
Sears
Lease
Mar-19
FieldhouseUSA / Mixed Use
Proactive termination, Lease executed
13
Port Charlotte Town Center
Port Charlotte, FL
Sears
Lease
Mar-19
Entertainment
Lease out for signature
14
Southern Hills Mall
Sioux City, IA
Sears
Lease
Mar-19
Retail concepts
Proactive termination, LOI received
15
Southern Park Mall
Youngstown, OH
Sears
Lease
Jul-18
Entertainment / Outdoor greenspace
Proactive termination, Under construction
16
Southgate Mall
Missoula, MT
Herberger's
Lease
Aug-18
Dillard's
Dillard's opened June 2019
17
Town Center at Aurora
Aurora, CO
Sears
Lease
Dec-19
FieldhouseUSA / Mixed use
Proactive termination, Lease executed
18
WestShore Plaza
Tampa, FL
Sears
Lease
Mar-19
Mixed use
Proactive termination, Obtaining Entitlements








Active Planning / Evaluating Options




19
Cottonwood Mall
Albuquerque, NM
Sears
Sears
Aug-18
Sears owns box
Evaluating Options
20
Dayton Mall
Dayton, OH
Elder-Beerman
Formerly owned by Third Party
Aug-18
Purchased from third party in Q419
Active Planning
21
Lindale Mall
Cedar Rapids, IA
Younkers
Lease
Aug-18
Retail concepts
Active Planning
22
Mall at Fairfield Commons
Dayton, OH
Elder-Beerman
Lease
Aug-18
Retail concepts
Active Planning
23
Northtown Mall
Blaine, MN
Herberger's
Lease
Aug-18
Retail concepts
Active Planning
24
Northwoods Mall
Peoria, IL
Sears
Sears
Feb-20
Sears owns box
Active Planning
25
Orange Park Mall
Orange Park, FL
Sears
Sears
Apr-20
Sears owns box
Evaluating Options
26
Southern Hills Mall
Sioux City, IA
Younkers
Lease
Aug-18
Retail concepts
Active Planning
27
Southgate Mall
Missoula, MT
Herberger's Men
Lease
Aug-18
Dining
Active Planning
28
Whitehall Mall
Whitehall, PA
Sears
Lease
Feb-20
Big box and small shop retail
Active Planning
 
 
 
 
 
 
 
 
Stores Occupied by Sears as of March 31, 2020
29
Pearlridge Center
Aiea, HI
Sears
Lease

Entertainment / Dining
Evaluating Options
30
Weberstown Mall
Stocktown, CA
Sears
Ground lease

Mixed use
Active Planning
 
 
 
 
 
 
 
 
 
Note that the Company plans to spend up to $300M over the next three to four years to redevelop these 30 department store locations. This report is for the Company's Tier 1 and Open Air properties and excludes those owned by third parties such as Seritage properties.

SUPPLEMENTAL INFORMATION | 16




PROPERTY INFORMATION
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Indebtedness
Property Name
 
St
 
City (Major Metropolitan Area)
 
Financial
Interest (1)
 
 Total
Center
Square Feet
 
Total
WPG Owned Square Feet
 
Total
Tenant Owned Square Feet
 
Maturity Date (2)
 
Interest Rate
 
Type
 
 Total
 
 WPG
Share
Enclosed Retail Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Anderson Mall

SC

Anderson

100%

670,742


315,553

355,189

12/01/22

4.61%

Fixed

$17,156

$17,156
Arbor Hills

MI

Ann Arbor

51%

86,939


86,939

0

01/01/26

4.27%

Fixed

$24,076

$12,279
Arboretum, The

TX

Austin

51%

195,338


195,338

0

06/01/27

4.13%

Fixed

$59,400

$30,294
Ashland Town Center

KY

Ashland

100%

434,525


331,135

103,390

07/06/21

4.90%

Fixed

$35,729

$35,729
Bowie Town Center

MD

Bowie (Wash, D.C.)

100%

583,043


281,745

301,298










Boynton Beach Mall

FL

Boynton Beach (Miami)

100%

869,756


428,402

441,354










Brunswick Square

NJ

East Brunswick (New York)

100%

764,384


293,088

471,296

03/01/24

4.80%

Fixed

$69,370

$69,370
Charlottesville Fashion Square (4)(6)

VA

Charlottesville

100%

0


0

0

04/01/24

4.54%

Fixed

$45,068

$45,068
Chautauqua Mall

NY

Lakewood

100%

435,415


427,885

7,530










Chesapeake Square Theater

VA

Chesapeake (VA Beach)

100%

42,248


42,248

0










Clay Terrace

IN

Carmel (Indianapolis)

100%

577,614


558,738

18,876










Cottonwood Mall

NM

Albuquerque

100%

1,048,428


568,199

480,229

04/06/24

4.82%

Fixed

$94,786

$94,786
Dayton Mall

OH

Dayton

100%

1,447,659


775,878

671,781

09/01/22

4.57%

Fixed

$78,748

$78,748
Edison Mall (5)

FL

Fort Myers

100%

1,049,982


567,689

482,293










Grand Central Mall

WV

Parkersburg

100%

646,735


640,227

6,508

07/06/20

6.05%

Fixed

$38,526

$38,526
Great Lakes Mall (5)

OH

Mentor (Cleveland)

100%

1,249,868


658,181

591,687










Indian Mound Mall

OH

Newark

100%

556,779


384,118

172,661










Irving Mall (5)

TX

Irving (Dallas)

100%

1,051,952


488,407

563,545










Jefferson Valley Mall (5)

NY

Yorktown Heights (New York)

100%

583,037


417,345

165,692










Lima Mall

OH

Lima

100%

745,042


545,220

199,822










Lincolnwood Town Center

IL

Lincolnwood (Chicago)

100%

422,997


422,996

1

04/01/21

4.26%

Fixed

$47,339

$47,339
Lindale Mall

IA

Cedar Rapids

100%

713,659


476,967

236,692










Longview Mall

TX

Longview

100%

646,518


347,721

298,797










Malibu Lumber Yard

CA

Malibu

51%

31,514


31,514

0










Mall at Fairfield Commons, The

OH

Beavercreek

100%

1,037,943


857,162

180,781










Mall at Johnson City, The

TN

Johnson City

51%

567,892


567,892

0

05/06/25

6.76%

Fixed

$47,846

$24,401
Maplewood Mall

MN

St. Paul (Minneapolis)

100%

903,985


323,229

580,756










Markland Mall

IN

Kokomo

100%

390,013


367,768

22,245










Melbourne Square

FL

Melbourne

100%

716,993


420,383

296,610










Mesa Mall

CO

Grand Junction

100%

803,762


431,741

372,021










Morgantown Mall

WV

Morgantown

100%

555,350


555,350

0










Muncie Mall (4)(7)

IN

Muncie

100%

637,795


387,995

249,800

04/01/21

4.19%

Fixed

$33,071

$33,071
New Towne Mall

OH

New Philadelphia

100%

497,435


497,435

0










Northtown Mall

MN

Blaine

100%

644,535


644,535

0










Northwoods Mall

IL

Peoria

100%

669,597


360,605

308,992










Oak Court Mall

TN

Memphis

100%

847,427


361,610

485,817

04/01/21

4.76%

Fixed

$36,069

$36,069
Oklahoma City Properties

OK

Oklahoma City

51%

324,180


321,934

2,246

06/01/27

3.90%

Fixed

$52,779

$26,917















01/01/23

3.49%

Variable

$12,597

$6,424
Orange Park Mall

FL

Orange Park (Jacksonville)

100%

952,320


555,140

397,180










Outlet Collection | Seattle, The

WA

Seattle

100%

924,305


924,305

0










Paddock Mall

FL

Ocala

100%

555,310


324,753

230,557










Pearlridge Center

HI

Aiea

51%

1,301,985


1,248,708

53,277

06/01/25

3.53%

Fixed

$225,000

$114,750















05/01/25

4.07%

Fixed

$42,537

$21,694
Polaris Fashion Place

OH

Columbus

51%

1,372,972


735,457

637,515

03/01/25

3.90%

Fixed

$225,000

$114,750















03/01/25

4.46%

Fixed

$15,500

$7,905
Port Charlotte Town Center (3)

FL

Port Charlotte

100%

777,382


493,173

284,209

11/01/20

5.30%

Fixed

$40,950

$40,950
Rolling Oaks Mall

TX

San Antonio

100%

883,071


286,763

596,308



































SUPPLEMENTAL INFORMATION | 17



PROPERTY INFORMATION
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Indebtedness
Property Name

St

City (Major Metropolitan Area)

Financial
Interest (1)

 Total
Center
Square Feet

Total
WPG Owned Square Feet

Total
Tenant Owned Square Feet

Maturity Date (2)

Interest Rate

Type

 Total

 WPG
Share
Enclosed Retail Properties




















Scottsdale Quarter

AZ

Scottsdale

51%

739,639


739,639

0

06/01/25

3.53%

Fixed

$165,000

$84,150















04/01/27

4.36%

Fixed

$55,000

$28,050
Southern Hills Mall

IA

Sioux City

100%

774,024


669,435

104,589










Southern Park Mall

OH

Youngstown

100%

1,019,687


832,123

187,564










Southgate Mall

MT

Missoula

100%

578,393


435,860

142,533
 
09/27/23

4.48%

Fixed

$35,000

$35,000
Sunland Park Mall

TX

El Paso

100%

918,475


332,638

585,837










Town Center at Aurora

CO

Aurora (Denver)

100%

1,081,541


495,043

586,498

04/01/21

4.92%

Fixed

$51,000

$51,000
Town Center Crossing & Plaza

KS

Leawood

51%

670,622


534,061

136,561

02/01/27

4.25%

Fixed

$32,605

$16,629















02/01/27

5.00%

Fixed

$65,969

$33,644
Waterford Lakes Town Center

FL

Orlando

100%

967,212


692,712

274,500

05/06/29

4.86%

Fixed

$177,864

$177,864
Weberstown Mall

CA

Stockton

100%

846,915


263,245

583,670

06/08/21

3.29%

Variable

$65,000

$65,000
Westminster Mall

CA

Westminster (Los Angeles)

100%

1,216,905


444,213

772,692

04/01/24

4.65%

Fixed

$76,494

$76,494
WestShore Plaza

FL

Tampa

100%

1,093,693


865,231

228,462










Enclosed Retail Properties Total







40,125,532


26,255,671

13,869,861







$1,965,479

$1,464,057
























Open Air Properties























Bloomingdale Court

IL

Bloomingdale (Chicago)

100%

675,988


385,543

290,445










Bowie Town Center Strip

MD

Bowie (Wash, D.C.)

100%

106,636


40,974

65,662










Canyon View Marketplace

CO

Grand Junction

100%

199,815


43,053

156,762

11/06/23

5.47%

Fixed

$5,095

$5,095
Chesapeake Center

VA

Chesapeake (Virginia Beach)

100%

279,581


128,972

150,609










Concord Mills Marketplace

NC

Concord (Charlotte)

100%

240,769


234,387

6,382

11/01/23

4.82%

Fixed

$16,000

$16,000
Countryside Plaza

IL

Countryside (Chicago)

100%

403,455


203,994

199,461










Dare Centre

NC

Kill Devil Hills

100%

168,613


109,094

59,519










Empire East

SD

Sioux Falls

100%

301,438


167,616

133,822










Fairfax Court

VA

Fairfax (Wash, D.C.)

100%

239,483


239,483

0










Fairfield Town Center

TX

Houston

100%

364,533


185,533

179,000










Forest Plaza

IL

Rockford

100%

433,816


413,519

20,297

10/01/29

3.67%

Fixed

$30,250

$30,250
Gaitway Plaza (3)

FL

Ocala

96%

197,435


196,635

800










Gateway Centers

TX

Austin

51%

513,571


404,568

109,003

06/01/27

4.03%

Fixed

$112,500

$57,375
Greenwood Plus

IN

Greenwood (Indianapolis)

100%

152,123


146,091

6,032










Henderson Square

PA

King of Prussia (Philadelphia)

100%

107,368


53,612

53,756










Keystone Shoppes

IN

Indianapolis

100%

36,457


36,457

0










Lake Plaza

IL

Waukegan (Chicago)

100%

215,590


124,961

90,629










Lake View Plaza

IL

Orland Park (Chicago)

100%

364,548


309,139

55,409










Lakeline Plaza

TX

Cedar Park (Austin)

100%

386,198


355,761

30,437

10/01/29

3.67%

Fixed

$49,710

$49,710
Lima Center

OH

Lima

100%

233,878


173,878

60,000










Lincoln Crossing

IL

O'Fallon (St. Louis)

100%

303,526


98,061

205,465










MacGregor Village

NC

Cary

100%

139,802


139,802

0










Mall of Georgia Crossing

GA

Buford (Atlanta)

100%

440,774


317,639

123,135

10/06/22

4.28%

Fixed

$21,544

$21,544
Markland Plaza

IN

Kokomo

100%

84,727


80,977

3,750










Martinsville Plaza

VA

Martinsville

100%

102,105


94,760

7,345










Muncie Towne Plaza

IN

Muncie

100%

171,621


171,621

0

10/01/29

3.67%

Fixed

$10,550

$10,550
North Ridge Shopping Center

NC

Raleigh

100%

171,492


166,092

5,400

12/01/22

3.41%

Fixed

$11,433

$11,433
Northwood Plaza

IN

Fort Wayne

100%

204,956


76,727

128,229










Palms Crossing

TX

McAllen

51%

389,618


389,618

0

08/01/21

5.49%

Fixed

$33,185

$16,924
Plaza at Buckland Hills, The
 
CT
 
Manchester
 
100%
 
309,503

 
254,489
 
55,014
 
 
 
 
 
 
 
 
 
 



SUPPLEMENTAL INFORMATION | 18



PROPERTY INFORMATION
 
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Indebtedness
 
Property Name
 
St
 
City (Major Metropolitan Area)
 
Financial
Interest (1)
 
 Total
Center
Square Feet
 
Total
WPG Owned Square Feet
 
Total
Tenant Owned Square Feet
 
Maturity Date (2)
 
Interest Rate
 
Type
 
 Total
 
 WPG
Share
 
Open Air Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Richardson Square

TX

Richardson (Dallas)

100%

516,100


40,187

475,913










 
Rockaway Commons

NJ

Rockaway (New York)

100%

229,929


226,179

3,750










 
Rockaway Town Plaza

NJ

Rockaway (New York)

100%

306,440


73,158

233,282










 
Royal Eagle Plaza

FL

Coral Springs (Miami)

100%

178,769


175,385

3,384










 
Shops at Arbor Walk, The

TX

Austin

51%

309,009


280,260

28,749

08/01/21

5.49%

Fixed

$37,507

$19,129
 
Shops at North East Mall, The

TX

Hurst (Dallas)

100%

365,169


365,169

0










 
St. Charles Towne Plaza

MD

Waldorf (Wash, D.C.)

100%

388,517


329,675

58,842










 
Tippecanoe Plaza

IN

Lafayette

100%

90,522


85,811

4,711










 
University Center

IN

Mishawaka

100%

150,441


100,441

50,000










 
University Town Plaza

FL

Pensacola

100%

557,538


216,194

341,344










 
Village Park Plaza

IN

Carmel (Indianapolis)

100%

506,648


290,009

216,639










 
Washington Plaza

IN

Indianapolis

100%

50,107


50,107

0










 
West Ridge Outlots

KS

Topeka

100%

3,564


0

3,564










 
West Town Corners (3)

FL

Altamonte Springs (Orlando)

100%

379,172


234,554

144,618










 
Westland Park Plaza (3)

FL

Orange Park (Jacksonville)

100%

163,259


163,259

0










 
White Oaks Plaza

IL

Springfield

100%

385,414


263,231

122,183

10/01/29

3.67%

Fixed

$26,490

$26,490
 
Whitehall Mall

PA

Whitehall

100%

603,475


588,601

14,874










 
Wolf Ranch

TX

Georgetown (Austin)

100%

632,102


419,916

212,186










 
Open Air Properties Total







13,755,594


9,645,192

4,110,402







$354,264

$264,500
 
























 
Total







53,881,126


35,900,863

17,980,263







$2,319,743

$1,728,557
(8)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Footnotes:























 
(1) Direct and indirect interests in some joint venture properties are subject to preferences on distributions and/or capital allocation in favor of other partners.
 
(2) Assumes full exercise of available extension options.
 
(3) WPG receives approximately 96%-100% of the economic benefit of property due to performance or advance, although legal ownership is less than 100%. Legal ownership is as follows: Port Charlotte Town Center (80%); Gaitway Plaza (88.2%); West Town Corners (88.2%); and Westland Park Plaza (88.2%).
 
(4) Noncore property.
 
(5) Land is subject to a ground lease with Perennial. The carrying value of the financial liability at 3/31/20 is $97.9 million and interest is being recognized at an effective rate of 8.7%. The ground lease is subject to a repurchase option in 2049.
 
(6) On March 17, 2020, the Company received notification that a receiver was appointed to manage and lease Charlottesville Fashion Square. An affiliate of the Company still holds title to the property.
 
(7) On April 14, 2020, the Company received notification that a receiver was appointed to manage and lease Muncie Mall. An affiliate of the Company still holds title to the property.
 
(8) Our share of the joint venture debt excludes the $1.9 million indirect 12.5% ownership interest in another real estate project.
 



SUPPLEMENTAL INFORMATION | 19



NON-GAAP PRO-RATA FINANCIAL INFORMATION
 
 
 
 
 
 
 
 
 
The pro-rata financial information presented on pages 21 and 22 is not, and is not intended to be, a presentation in accordance with GAAP. The non-GAAP pro-rata financial information aggregates the Company’s proportionate economic ownership of each unconsolidated asset in the property portfolio that the Company does not wholly own. The amounts in the column labeled ‘‘WPG’s Share of Unconsolidated Entities’’ were derived on a per property or entity basis by applying to each line item the ownership percentage interest used to arrive at the Company’s share of the operations for the period consistent with the application of the equity method of accounting to each of the unconsolidated joint ventures.
 
 
 
 
 
 
 
 
The Company does not control the unconsolidated joint ventures and the presentations of the assets and liabilities and revenues and expenses do not represent the Company’s legal claim to such items.
 
 
 
 
 
 
 
 
The Company provides pro-rata financial information because it is believed to assist investors and analysts in estimating the economic interest in our unconsolidated joint ventures when read in conjunction with the Company’s reported results under GAAP.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


SUPPLEMENTAL INFORMATION | 20



NON-GAAP PRO-RATA FINANCIAL INFORMATION
 
PROPORTIONATE SHARE OF UNCONSOLIDATED PROPERTIES - STATEMENTS OF OPERATIONS
 
Washington Prime Group Inc.
 
(Unaudited, dollars in thousands)
 
 
 
 
 
 
Three Months Ended
March 31, 2020
 
 
 
 
WPG's Share of Unconsolidated Entities
 
 
 
 
 
 
 
Revenue:
 
 
 
 
Minimum rent
 
$
20,087

 
 
Overage rent
 
448

 
 
Tenant reimbursements
 
8,452

 
 
Changes in estimate of collectibility of rental income
 
(322
)
 
 
Other income
 
316

 
 
Total revenues
 
28,981

 
 
 
 
 
 
 
Expenses:
 
 
 
 
Property operating
 
(6,054
)
 
 
Real estate taxes
 
(3,639
)
 
 
Advertising and promotion
 
(311
)
 
 
Total recoverable expenses
 
(10,004
)
 
 
Depreciation and amortization
 
(12,396
)
 
 
General and administrative
 
(20
)
 
 
Ground rent
 
(1,557
)
 
 
Total operating expenses
 
(23,977
)
 
 
 
 
 
 
 
Interest expense, net
 
(5,979
)
 
 
Income and other taxes
 
(57
)
 
 
Loss from unconsolidated entities, net
 
$
(1,032
)
 
 
 
 
 
 
 
 
 
 
 
 
Note: The amounts above represent the company's pro-rata share based upon the percentage of ownership interest per joint venture entity in each amount indicated, but it should be noted that the company does not control the unconsolidated entities.
 
 
 
 
 

SUPPLEMENTAL INFORMATION | 21



NON-GAAP PRO-RATA FINANCIAL INFORMATION
 
 
PROPORTIONATE SHARE OF UNCONSOLIDATED PROPERTIES - BALANCE SHEET
Washington Prime Group Inc.
(Unaudited, dollars in thousands)
 
 

 
 
 
 
 
 
 
 
 
March 31, 2020
WPG's Share of Unconsolidated Entities
 
Assets:
 
 
 
Investment properties at cost
 
$
1,169,965

 
Construction in progress
 
19,996

 
 
 
1,189,961

 
Less: accumulated depreciation
 
226,500

 
 
 
963,461

 
 
 
 
 
Cash and cash equivalents
 
17,961

 
Tenant receivables and accrued revenue, net (see below)
 
16,280

 
Deferred costs and other assets (see below)
 
148,830

 
Total assets
 
$
1,146,532

 
 
 
 
 
Liabilities and members' equity:
 
 
 
Mortgage notes payable
 
$
618,712

 
Accounts payable, accrued expenses, intangibles, and deferred revenues (see below)
 
144,118

 
Total liabilities
 
762,830

 
Members' equity
 
383,702

 
Total liabilities and members' equity
 
$
1,146,532

 
 
 
 
 
 
 
 
 
Supplemental Balance Sheet Detail:
 
 
 
 
 
 
 
Tenant receivables and accrued revenue, net:
 
 
 
Straight-line receivable, net of reserve
 
$
10,177

 
Tenant receivable
 
2,846

 
Unbilled receivables and other
 
5,184

 
Allowance for doubtful accounts, net
 
(1,927
)
 
Total
 
$
16,280

 
 
 
 
 
Deferred costs and other assets:
 
 
 
Deferred leasing, net
 
$
12,549

 
In place lease intangibles, net
 
18,241

 
Acquired above market lease intangibles, net
 
20,258

 
Right of use asset
 
88,265

 
Mortgage and other escrow deposits
 
6,204

 
Prepaids, notes receivable and other assets, net
 
3,313

 
Total
 
$
148,830

 
 
 
 
 
Accounts payable, accrued expenses, intangibles and deferred revenues:
 
 
 
Accounts payable and accrued expenses
 
$
31,018

 
Below market leases, net
 
21,646

 
Lease liability
 
88,265

 
Other
 
3,189

 
Total
 
$
144,118

 
 
 
 
 
Note: The amounts above represent the company's pro-rata share based upon the percentage of ownership interest per joint venture entity, but it should be noted that the company does not control the unconsolidated entities.

SUPPLEMENTAL INFORMATION | 22



GLOSSARY OF TERMS
 
 
 
 
 
 
 
   - Average rent PSF
 
Average base minimum rent charge in effect for the reporting period for all tenants that qualify to be included in the occupancy as defined below.
 
   - EBITDAre
 
Net income (loss) attributable to the company before interest, depreciation and amortization, gains/losses on sale of operating properties, impairment charges, income taxes and adjustments related to pro-rata share of unconsolidated entities. The calculation is consistent with the definition published by The National Association of Real Estate Investment Trusts ("NAREIT") in a white paper issued in September 2017.
 
   - Funds from operations (FFO)
 
Funds From Operations ("FFO") is a supplemental non-GAAP measure utilized to evaluate the operating performance of real estate companies. NAREIT defines FFO as net income (loss) attributable to common shareholders computed in accordance with generally accepted accounting principles ("GAAP"), excluding (i) gains or losses from sales of operating real estate assets and (ii) extraordinary items, plus (iii) depreciation and amortization of operating properties and (iv) impairment of depreciable real estate and in substance real estate equity investments and (v) after adjustments for unconsolidated partnerships and joint ventures calculated to reflect funds from operations on the same basis.
 
   - Funds from operations, as adjusted (AFFO)
 
AFFO is calculated by adjusting FFO as defined above for non-recurring items such as merger costs, non-recurring debt fee amortization charges, gain on debt extinguishment and similar items.
 
   - Gross leasable area (GLA)
 
Measure of the total amount of leasable space in a property.
 
   - Net operating income (NOI)
 
Revenues from all rental property less operating and maintenance expenses, real estate taxes and rent expense including the company's pro-rata share of real estate joint ventures. Excludes non-recurring items such as termination income, sales from outparcels, material insurance proceeds, and other noncash items such as straight-line rent and fair value adjustments.
 
   - Occupancy
 
Occupancy is the percentage of total owned square footage ("GLA") which is leased as of the last day of the reporting period for tenants with terms of a year or more. For enclosed retail properties, all company owned space except for anchors, majors, office and outlots are included in the calculation. For open air properties, all owned GLA other than office are included in the calculation.
 
   - Occupancy cost
 
Percent of tenant's total occupancy cost (rent and reimbursement of CAM, tax and insurance) to tenant sales for stores of 10,000 sf or less.
 
   - Re-leasing spread
 
Re-leasing Spread is a ‘‘same space’’ measure that compares initial rent for new deals on individual spaces to expiring rents for prior tenants. For enclosed retail properties, majors, freestanding and office tenants are excluded. For open air properties, office tenants are excluded. The new rent is the weighted average of the initial cash Total Rent PSF for spaces leased during the trailing twelve month period, and includes new leases and existing tenant renewals and relocations (including expansions and downsizings). The prior rent is the weighted average of the final cash Total Rent PSF as of the month the tenant terminates or closes. Total Rent PSF includes Base Minimum Rent, common area maintenance ("CAM") and base percentage rent. It includes leasing activity on all spaces occupied by tenants as long as the opening and closing dates are within 24 months of one another.
 
   - Sales PSF
 
Trailing twelve-month sales for in-line stores of 10,000 SF or less. Excludes freestanding stores and specialty tenants.


SUPPLEMENTAL INFORMATION | 23                            
a1q20earningspresentatio
1 First Quarter 2020 Update


 
Safe Harbor Some of the information contained in this presentation includes forward looking statements. Such statements are subject to a number of risks and uncertainties which could cause actual results in the future to differ materially and adversely from those described in the forward looking statements. Investors should consult the Company’s filings with the Securities and Exchange Commission (SEC) for a description of the various risks and uncertainties which could cause such a difference before deciding whether to invest. This presentation also contains non GAAP financial measures and comparable net operating income (NOI). Reconciliation of this non GAAP financial measure to the most directly comparable GAAP measure can be found within the Company’s quarterly supplemental information package and in filings made with the SEC, which are available on the investor relations section of its website at www.washingtonprime.com. 2


 
Significant Leasing Progress and Stable Operating Metrics Prior to COVID-19 Pandemic Significant Leasing Progress o Leasing volume during the first quarter of 2020 exhibited a 12% YOY increase totaling 1.4 million square feet (SF); o This follows annual leasing volume of 4.4 million SF, 4.2 million SF, and 4.0 million SF in 2019, 2018 and 2017, respectively, totaling 14 million SF since 2017; o Of the aforementioned 1.4 million SF in the first quarter of 2020, 48% of new leasing was attributable to lifestyle tenancy which includes food, beverage, entertainment, home furnishings, fitness, and professional services; and o The Company continues to incent its leasing and property management professionals in order to further diversify tenancy as illustrated by 40 signed leases qualifying under various incentive programs during the first quarter. Stable Operating Metrics o Tier One sales PSF increased 5.5% YOY to $423 for the twelve months ending February 29, compared to the prior year; o Tier One occupancy cost improved 50 basis points to a sector leading 11.2% in the first quarter of 2020 from the prior year; o As of March 31, 2020, combined Tier One and Open Air occupancy decreased 90 basis points YOY to 92.9%; o Releasing spreads for Tier One properties increased 4.2% in the first quarter of 2020, reflecting the strongest quarterly spread results for Tier One properties with increases of 14.8% and 0.8% for new deals and renewals, respectively; and o First quarter 2020 comparable NOI increased 7.6% for Open Air and decreased 7.2% for Tier One, resulting in a combined decrease of 3.0%, but a sequential quarterly improvement of 160 basis points from the fourth quarter of 2019. 3


 
Progress, Actions and Initiatives During the COVID-19 Pandemic Progress, Actions and Initiatives During the COVID-19 Pandemic o While 57% of the Company’s assets have remained fully or partially open during COVID-19, a robust effort has been underway to ensure an optimal transition for the full reopening of all assets. Such efforts include tenant discussion forums as well as a comprehensive Reopening Processes and Best Practices Manual which addresses every aspect of the business including leasing, property management, operations, marketing, technology, social media, etc.; o Of the Company’s 99 properties, 43 enclosed assets were temporarily closed due to COVID-19, of which 23 properties are scheduled to be reopened by the middle of May 2020; o The remaining 56 prosperities are categorized as Open Air or have an open air lifestyle format and have remained open to provide essential goods and services to the extent permitted by law; o The Company recently drew ~$120M from its credit facility in order to further buttress our cash position; o Of the 18 adaptive reuse projects addressed, the Company has held discussions with the respective tenancy and every single one is committed to open, albeit six have been delayed to 4Q 20 or into 2021; o Illustrating continued tenant demand, during the months of March and April of 2020, 85 leases were signed totaling 624,852 SF; o Through May 7, 2020, the Company has collected ~30% of contractual base rent and charges for April 2020. This is comprised of a ~25% collection rate for Enclosed properties and ~50% for Open Air properties. Based upon ongoing conversations with tenants that have yet to pay April rent, the Company expects the collection percentage to improve for the month of April 2020; o As of May 4, 2020, the Company has addressed ~11% of the total amount of contractual rent for 2Q 20 through lease modifications. Based upon these modifications, the Company expects to collect ~45% of contractual base rent and charges for 2Q 20, specifically related to these deals, while deferring ~45% and abating the remaining ~10%; o The Company recently launched Fulventory, a proprietary initiative which allows tenants to utilize space within Washington Prime Group assets for last mile fulfilment and BOPIS (buy online and pickup in store), as well as inventory clearance; and o Such industry leading initiatives as WPG Cares and Open for Small Business have been exemplary regarding the Company serving as a community and tenant resource. WPG Cares has participated in over 175 community service projects; Open for Small Business has hosted over 15 webinars attended by hundreds of participants; and Well Picked 4 Goods has benefitted the Company’s tenancy during asset closures via digital merchandise curation and an in store gift card promotion when reopening occurs.


 
During the COVID-19 pandemic, WPG has been busy to assist those in need as well as benefit our tenants and sponsors when they reopen Initiative Well Picked Goods Purpose Curated online Initiative WPG Cares merchandise in conjunction with Purpose Local philanthropy in store incentive Beneficiary Every individual and Beneficiary Tenants and guests community impacted Initiative Open for Small as a result of COVID- Learn More Link Business 19 pandemic Purpose Streamline lease Learn More Link modification process and host business webcasts Beneficiary Small businesses Learn More Link Initiative #scholarspree Initiative Fulventory Purpose Host virtual Purpose Provide inventory graduation and fulfillment space for WPG related activities tenancy Beneficiary High school and 5 Beneficiary Local, regional and college/university national tenancy seniors Learn More Link Learn More Link


 
Lou Conforti, CEO and Director, Commentary: What we’re doing from an operational, financial and philanthropic perspective... Operational Activities o Prior to COVID-19 fully rearing its ugly head in March, we continued to materially improve upon our Tier One and Open Air operating metrics such as comparable NOI growth, sales PSF, occupancy cost and leasing volume. Our metrics point to the foundational underpinning upon which will inure to our benefit as marketplace stabilization occurs; o Just to remind everybody for the umpteenth time, our open air ‘plus’ assets (when including nine Tier One properties with an open air lifestyle format) comprise ~40% of total NOI. Take a look at these in our most recent investor presentation and calculate for yourselves the standalone valuation of this one segment of our NOI. Furthermore, ~75% of what we report as enclosed in our supplemental operating metrics has an open air component. This is the hybrid format objective we have been fulfilling over the previous four years and our continually improving operating metrics evidences its success; o While the Company maintains its commitment to complete announced redevelopment projects, we have deferred a portion of the capital spend into 2021 due to tenants’ decisions to open locations later than originally planned. We anticipate our share of redevelopment costs to be ~$80M for the remainder of 2020, which includes additions such as FieldhouseUSA, HomeGoods, Ross Dress for Less, SCHEELS All Sports and T.J. Maxx among others. Further, we have resolved 18, or 64%, of the 28 department stores of which we have control. To repeat myself, every one of these tenants remain committed to opening; o We have recognized the importance of having a robust fulfillment component for merchandise as well as food and beverage and have for the previous quarter or so been working to provide this amenity to our guests. As such, we are pleased to announce a collaboration with City Storage Systems, LLC to provide a turnkey solution of in house dining, pickup and delivery. We have three initial locations under letter of intent and have a dozen or so more assets which will benefit from their innovative approach with respect to eat in and delivery dining options; and o As it relates to fulfillment of merchandise, we have just announced Fulventory, our proprietary initiative which allows tenants to utilize space within our assets for local and regional last mile fulfilment as well as for inventory clearance. As BOPIS and BORIS (buy online and return in store) continue to gain traction with our guests, Fulventory captures the nexus between physical space and eCommerce and advances the symbiotic relationship which exists between the two. 6


 
Lou Conforti, CEO and Director, Commentary: What we’re doing from an operational, financial and philanthropic perspective... Financial and Liquidity Measures o As stated previously, even when taking into account the reality of dramatically reduced rental collection during the second and third quarters of 2020, WPG anticipates having the ability to self fund its current financial obligations during 2020 and assumptions are more fully discussed in our Form 10-Q . We’ve stress tested cash flow projections for a variety of tenant ‘ramp up’ and deferred payment scenarios. Note, these include delivery of projects currently under construction to the extent a tenant still anticipates opening during the latter half of the year; o Notwithstanding this self-funding capability, we deemed it prudent to recently draw ~$120M from our revolving credit facility in order to further buttress our cash position. As the preservation of cash is of utmost importance, we previously announced several proactive steps taken to preserve liquidity including the Board’s decision to temporarily suspend the quarterly cash dividend for common shares and operating partnership units throughout the remainder of the year with a potential true up dividend payment during the fourth quarter of 2020 in order to address the Company’s REIT taxable income distribution requirements; o When factoring in our April drawdown of the credit facility, as of May 1, 2020, we had ~$150M of cash on hand including our share of joint venture cash. Our base cash flow scenario assumes significant disruption in terms of revenue collections during the second quarter of this year with our assets either closed or operating at low levels through May with a ramp up starting in June. This results in a 35% to 40% collection rate of budgeted revenue for the full quarter supported by a ~30% actual collection rate across our portfolio in April. Partially offsetting these shortfalls are lower cash property and corporate expenses of just under 60% of budget for the quarter; o In terms of the second half of the year, we have addressed key variables including rent collection rates and cash operating expenses along with assumptions for property capex, redevelopment and non-core asset sales. We have also factored in contractual debt service for the remainder of the year. Our base case has us finishing 2020 with approximately $150M to $175M of cash on hand, thus giving the company ample cushion to address any downside scenarios; and o The national emergency we all face has prompted WPG to take necessary measures regarding corporate overhead and other cost saving measures. This has translated into a combination of furloughs and layoffs impacting ~20% of our workforce, field and corporate. This belt tightening also includes a temporary freeze on hiring, terminating third party vendor contracts when applicable, and suspending WPG’s paid internship program for 2020. In addition, executive and senior management temporarily reduced their base 7 salary compensation in a range of 5% to 25%.


 
Lou Conforti, CEO and Director, Commentary: What we’re doing from an operational, financial and philanthropic perspective... WPG Cares: Proactively serving as a Community Resource o I recently sent a letter offering up our assets and services to over 600 local, state, federal as well as nonprofit agencies combating COVID-19. To date, Washington Prime Group has performed ~175 community service projects including serving as distribution centers for medical supplies, the hosting of COVID-19 testing stations, providing space for food depository as well as other important immediate response actions. I’m pleased to report participation of assets with onsite management is nearly one hundred percent. Open for Small Business Initiative o Small business not only is a major driver of the economy and a meaningful percentage of our Company’s revenue, these local entrepreneurs provide flavor, literally and figuratively. It’s important we work with them regarding such measures as standardization of lease modification agreements; education via webinar on how to access SBA as well as other agency and nonprofit programs; as well as providing continuing education to improve upon their business once they reopen; and o With these objectives in mind, we created Open for Small Business in conjunction with the University of Chicago’s Institute for Justice Clinic on Entrepreneurship and University of Chicago faculty including Nobel Laureate Richard Thaler, Freakonomics author Steven Levitt and Institute Director Elizabeth Kregor. This resource is being made available to all small businesses whether or not they are a WPG tenant simply because it’s the right thing to do. Corporate Financial Assistance o We are exploring every possible manner by which we as well as our tenants, sponsors and guests are able to benefit from current and prospective economic stimulus packages, e.g. CARES Act. We’ve addressed relevant issues with government officials, lobbyists, et. al. and have written numerous letters explaining (and quantifying) the local and regional economic contribution of our assets. In many instances, property and sales tax revenue generated from a WPG asset is essential to the municipality where it’s located. There’s also the second order GDP impact relating to revenue repatriation from our tenant’s employees as these folks generally eat, shop, play and reside where they work. 8


 
Lou Conforti, CEO and Director, Commentary: What we’re doing from an operational, financial and philanthropic perspective... Tenant, Sponsor and Guest Communication o We are in constant contact with our tenants, sponsors and guests regarding everything from closure updates to reopening procedures when the time comes; o In this regard we are hosting tenant forums whereby ideas are exchanged as we appreciate reopening is going to be an incremental process as it is imperative we safeguard the health of all those who contribute to the dynamic nature of our assets; and o This transition must also assuage the psychological concerns which will surely exist as a result of the national emergency resulting from COVID-19. We have made our comprehensive Reopening Processes and Best Practices Guide available to all of our tenants. The objective is to prepare for the reopening of our assets whereby every aspect is addressed including leasing, property management, operations, marketing, technology, social media, etc. Well Picked Goods o In order to make certain our tenancy remains front and center with respect to the consumer, we have also introduced Well Picked Goods, a weekly digital curation of local and national merchandise selected by the local management of a featured town center which includes an in store gift card promotion when tenants reopen. Stay healthy and strong, and we’ll continue to grind it out and serve as sector leaders as we proactively transform our assets as well as deal with COVID-19. By the way, have I mentioned our open air ‘plus’ assets comprise ~40% of total NOI and the vast majority are considered high quality? LGC 9


 
Department Store Adaptive Reuse Update WPG Department Store Repositioning Snapshot 30 Department Stores Up to $300M Over the Next Three to Four Years¹ Under Evaluating Completed Active Announced Construction 3 9 6 8 4 18 Projects Addressed (Tier One and Open Air) Mall at Johnson City Southern Park Mall Lincolnwood Town Center Polaris Fashion Place Johnson City, TN Boardman (Youngstown), OH Lincolnwood, IL Columbus, OH 10 ¹In addition to ~$50M spent through December 31, 2019.


 
Department Store Adaptive Reuse Update o The Company resolved 18, or 64%, of the 28department stores of which the Company has control; o As exhibited within the most recent 1Q 20 supplemental, the Company continues to provide real time updates relating to the 30 department stores within its Tier One and Open Air assets identified for repositioning (excluding space owned by third parties such as Seritage Growth Properties). These include the following projects, all of which are situated within Tier One assets: V The Mall at Johnson City, Johnson City, Tennessee: HomeGoods will anchor the replacement of the former Sears; V Polaris Fashion Place®, Columbus, Ohio: FieldhouseUSA will anchor the mixed use redevelopment of former Sears and is under construction; V Town Center at Aurora®, Aurora, Colorado: FieldhouseUSA will anchor the planned mixed use redevelopment of the former Sears; V Markland Mall, Kokomo, Indiana: Dunham’s has executed a lease to replace the former Carson Pirie Scott (Bon-Ton Stores); V Southern Park Mall, Boardman (Youngstown), Ohio: The demolition of the former Sears is underway and is to be replaced by DeBartolo Commons which includes an athletic green space, an ice skating rink and entertainment venue; V Southern Park Mall, Boardman (Youngstown), Ohio: The redevelopment project will also feature a new entertainment hub anchored by Steel Valley Brew Works as well as an indoor golf facility and several new food and beverage options. The renovation also includes a permanent DeBartolo-York Family installation situated within the common area; V Port Charlotte Town Center, Port Charlotte, Florida: A national entertainment concept has executed a letter of intent to replace Sears; V Longview Mall, Longview, Texas: Two national retailers will replace the former Sears with Conn’s Home Goods under construction and a letter of intent has been executed for the remaining space; V Mesa Mall, Grand Junction, Colorado: Three department store replacements include a national sporting goods retailer replacing the former Herberger’s department store (Bon-Ton Stores), Dillard’s will replace the former Sears and HomeGoods will replace the former Sports Authority all of which have executed letters of intent; V Southern Hills Mall, Sioux City, Iowa: The Company has executed a letter of intent with a national off price retailer and has received a letter of intent from a national home furnishings retailer to replace the former Sears location; V Southgate Mall, Missoula, Montana: Dillard’s opened a second location during June 2019 replacing the former Herberger’s (Bon-Ton Stores). The Company also recently announced SCHEELS All Sports will replace the current JCPenney which is expected to close during the second quarter of 2020 of which the Company proactively gained control of JCPenney to allow for the adaptive reuse; V Grand Central Mall, Parkersburg, West Virginia: The Company announced HomeGoods, PetSmart, Ross Dress for Less and T.J. Maxx will collectively replace the former Sears location; V Morgantown Mall, Morgantown, West Virginia: Dunham’s Sports held their soft opening during the first quarter of 2020, replacing space previously occupied by Elder Beerman (Bon-Ton Stores). Ollie’s Bargain Outlet is under construction and an entertainment concept have provided a lease and a letter of intent to replace the former Belk store, and the former Sears will be replaced with outdoor greenspace for athletic and entertainment use; V Lincolnwood Town Center, Lincolnwood, Illinois: The RoomPlace opened August 2019 replacing Carson Pirie Scott (Bon-Ton Stores); and 11 V The Mall at Fairfield Commons, Dayton, Ohio: Round1 Entertainment opened November 2019 replacing the lower level of the former Sears, and the upper level is currently under construction and will be occupied by Morris Furniture, which is expected to open during the second quarter of this year.


 
Open Air Snapshot In addition to those assets which comprise the Open Air segment, it should be noted, several other high quality assets exhibit Open Air e.g. shopping center characteristics. If the following are included within the Open Air designation (hereinafter Open Air Plus), the percentage of total NOI increases by 13.0% to 40.0%. YE 2014 Occupancy % YE 2015 Occupancy % YE 2016 Occupancy % YE 2017 Occupancy % YE 2018 Occupancy % YE 2019 Occupancy % Segment as of DEC 31 as of DEC 31 as of DEC 31 as of DEC 31 as of DEC 31 as of DEC 31 Total NOI (%) 4Q 2019 13% Open Air Plus* 94.9% 95.4% 95.3% 95.4% 95.5% 95.0% 27% 7% FY 2014 Comparable FY 2015 Comparable FY 2016 Comparable FY 2017 Comparable FY 2018 Comparable FY 2019 Comparable 5YR Segment NOI ($000) NOI ($000) NOI ($000) NOI ($000) NOI ($000) NOI ($000) NOI Growth 53% Open Air Plus* $163,964 $171,751 $178,737 $188,111 $191,137 $191,817 17.0% Releasing TTM TTM 2016 TTM 2017 TTM 2018 TTM 2019 Spread 2015 Takeaway: 40% of WPG’s total NOI exhibited annual Comparable NOI Open Air Tier One Tier Two Open Air Plus Properties growth of 3.4% over the previous five years Open Air Plus* 13.2% 5.4% 5.1% -0.6% 3.6% *Open Air Plus includes current Open Air portfolio as well as Arbor Hills, The Arboretum, Bowie Town Center, Clay Terrace, Malibu Lumber Yard, Oklahoma City Collection, Scottsdale Quarter, Town Center Plaza and Crossing and Waterford Lakes Town Center Assets not included within current Open Air portfolio: Waterford Lakes Town Center The Arboretum Arbor Hills Malibu Lumber Yard Orlando, FL Austin, TX Ann Arbor, MI Malibu, CA Scottsdale Quarter Oklahoma City Properties Clay Terrace Town Center Plaza and Crossing Bowie Town Center Scottsdale, AZ Oklahoma City, OK Carmel, IN Leawood, KS Bowie, MD 12


 
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v3.20.1
Document and Entity Information Document
May 07, 2020
Entity Information [Line Items]  
Document Type 8-K
Document Period End Date May 07, 2020
Entity Registrant Name WASHINGTON PRIME GROUP INC.
Entity Central Index Key 0001594686
Amendment Flag false
Entity Incorporation, State or Country Code IN
Entity File Number 001-36252
Entity Tax Identification Number 46-4323686
Entity Address, Address Line One 180 East Broad Street
Entity Address, City or Town  Columbus
Entity Address, State or Province OH
Entity Address, Postal Zip Code 43215
City Area Code 614
Local Phone Number 621-9000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Common Stock, $0.0001 par value per share  
Entity Information [Line Items]  
Title of 12(b) Security Common Stock, $0.0001 par value per share
Security Exchange Name NYSE
Trading Symbol WPG
7.5% Series H Cumulative Redeemable Preferred Stock, par value $0.0001 per share  
Entity Information [Line Items]  
Title of 12(b) Security 7.5% Series H Cumulative Redeemable Preferred Stock, par value $0.0001 per share
Security Exchange Name NYSE
Trading Symbol WPGPRH
6.875% Series I Cumulative Redeemable Preferred Stock, par value $0.0001 per share  
Entity Information [Line Items]  
Title of 12(b) Security 6.875% Series I Cumulative Redeemable Preferred Stock, par value $0.0001 per share
Security Exchange Name NYSE
Trading Symbol WPGPRI