June 2019 June 2019 June 2019 June 2019 1 Safe Harbor Some of - - PowerPoint PPT Presentation

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June 2019 June 2019 June 2019 June 2019

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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

• perating 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

• n

the investor relations section

• f

its website at www.washingtonprime.com.

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Washington Prime Group: National Footprint with Local Flavor

With 103 town centers throughout the US, we are as American as apple pie. As a matter of fact, we are also as American as deep dish pizza in Chicago, Hawaiian poke salad, vegan spring rolls in Malibu, El Paso Tex-Mex, Maryland crab cakes, kimchi in Orange County, Memphis barbeque and a Kansas City porterhouse. Our well regarded national infrastructure, from Hawaii to Connecticut and everywhere in between, allows our tenant and sponsor partners to benefit from corporate operating efficacy and local management who possesses comprehensive knowledge of the specific locale within which they reside. Catering from the aspirant to the affluent and Middle America to metropolis, WPG assets capture the socioeconomic continuum via one of the nation’s largest retail portfolios. In fact, the demographic constituency of WPG is a representative microcosm of the American consumer. Our 55M SF is comprised of Tier One Enclosed and Open Air venues including Lifestyle, Factory Outlet and increasingly a hybrid format which includes a diversified mix of products, goods and services. This fluidity allows WPG to beta test across demographic, socioeconomic and geographic constituencies in order to better provide our guests with the practical and relevant as well as the frivolous and exciting whether it be fashion, food or furniture.

Satisfying consumers across demographic continuums

National Footprint with Local Flavor National Footprint with Local Flavor National Footprint with Local Flavor National Footprint with Local Flavor Satisfying Shoppers across Demographic Continuums Satisfying Shoppers across Demographic Continuums Satisfying Shoppers across Demographic Continuums Satisfying Shoppers across Demographic Continuums 103 103 103 103

Town Centers Town Centers Town Centers Town Centers

55M 55M 55M 55M

Square Feet Square Feet Square Feet Square Feet

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Company Snapshot Company Snapshot Company Snapshot Company Snapshot

• National portfolio of Enclosed and Open Air retail venues
• Comprised of 103 core assets consisting of 55M SF as of MAR 31 2019
• Tier One and Open Air assets account for 93% of total NOI as a result of Noncore assets having been reduced by 20%
• Diversified by product, size, geography and tenancy
• Increasing mixed use component (lodging, residential, office and medical) component via adaptive reuse
• Recognized as innovation leader within industry regarding events, activities and installations
• Experienced leadership team incorporating financial, operational and strategic expertise
• Readily available corporate resources allow for real time decision making by General Managers and local management
• Current corporate credit ratings as follows: Moody’s Ba2, S&P BB and Fitch BB-

Combining Open Air and Enclosed components results in a hybrid town center format Critical Mass of Dominant Town Centers within Robust Secondary Catchments

9% 9% 15% 31% 36%

Assets Assets Assets Assets by Region by Region by Region by Region

Northeast West Southwest Southeast Midwest 27% 66% 7%

Total NOI (%) Total NOI (%) Total NOI (%) Total NOI (%) 1Q 2019 1Q 2019 1Q 2019 1Q 2019

Open Air Tier One Tier Two 26% 7% 3% 64%

GLA GLA GLA GLA by Tenancy by Tenancy by Tenancy by Tenancy

National Local Regional Anchor >25,000 SF 34% 0% 0% 0% 0% 10% 10% 10% 10% 20% 20% 20% 20% 30% 30% 30% 30% 40% 40% 40% 40% 50% 50% 50% 50%

Tier One Enclosed Tier One Enclosed Tier One Enclosed Tier One Enclosed Mixed Use Percentage Mixed Use Percentage Mixed Use Percentage Mixed Use Percentage

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Financial flexibility provides ample liquidity to execute redevelopment 1Q 2019 Highlights

• WPG leased 1.4M square feet of space;
• Lifestyle tenancy attributed for 52% of new leasing volume;
• Tier One and Open Air occupancy was 93.3%;
• Tier One occupancy cost was 11.7%;
• Tier One sales PSF were $399;
• Tier One and Open Air leasing spreads for new deals were 13.2% in 1Q 19;
• Tier One comparable net operating income (NOI) decreased YOY 5.7% and Open Air comparable NOI increased 0.6%;
• Excluding ~$4.5M negative impact of cotenancy from anchor liquidations, 1Q 19 comparable NOI for Tier One and Open Air basically flat;
• Company held 674 events, activities and installations during three months ended MAR 31;
• Addressed ~50% of department store vacancy for Tier One and Open Air;
• Placed a $180M mortgage loan with an all in coupon of 4.86% of which Waterford Lakes served as collateral;
• Maintained 2019 FFO guidance and 2020 comparable NOI growth forecast of between 2.0 and 3.0%; and
• 2019 dividend policy remained unchanged.

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Exhibiting operational stability as we undertake measures necessary to buttress our secondary catchment leadership Stability Best Illustrated by Minimal Variance of Historical Operating Metrics

Note: Includes assets currently classified as Tier One and Open Air held during each period reported. Accordingly, Fairfield Town Center, Pearlridge Center Uptown II and Southgate Mall are excluded.

Core Enclosed TTM 2015 Releasing Spread TTM 2016 Releasing Spread TTM 2017 Releasing Spread TTM 2018 Releasing Spread TTM MAR 31 Releasing Spread Tier One 1.5%

• 1.3%
• 0.4%
• 8.0%
• 7.4%

Open Air 19.3% 3.7% 3.6%

• 0.1%

2.9% Total Core 5.1% 0.5% 0.6%

• 6.3%
• 5.2%

Segment YE 2014 Occupancy % as of DEC 31 YE 2015 Occupancy % as of DEC 31 YE 2016 Occupancy % as of DEC 31 YE 2017 Occupancy % as of DEC 31 YE 2018 Occupancy % as of DEC 31 Tier One 94.0% 93.7% 93.9% 93.1% 94.0% Open Air 95.3% 95.9% 95.8% 95.8% 95.6% Total Core 94.6% 94.7% 94.8% 94.4% 94.8% Segment FY 2014 Comp NOI ($000) FY 2015 Comp NOI ($000) FY 2016 Comp NOI ($000) FY 2017 Comp NOI ($000) FY 2018 Comp NOI ($000) FY 2019 Comp NOI Budget ($000) Forecasted 5YR Comp NOI Growth Tier One $333,163 $333,716 $337,531 $340,838 $331,716

• Open Air

$114,919 $119,485 $127,481 $132,950 $130,752

• Total Core

$448,082 $453,201 $456,012 $473,788 $462,468 $452,000 0.9% Total Enclosed FY 2015 FY 2016 FY 2017 FY 2018 AVG Lease Term (New) 7.0 7.5 6.9 6.5 AVG Lease Term (Renewal) 4.0 4.5 4.3 3.5 Tenant Allowance PSF (New) $43.99 $40.61 $37.10 $37.25 AVG Rent PSF (New) $23.46 $31.00 $31.03 $28.12 As I have mentioned repeatedly, the focus is upon cash flow stability as we diversify tenancy, activate common area, aesthetically improve and, when warranted, redevelop (primarily department store boxes). In spite of significant inline retailer and department store bankruptcies, cash flow stability is best illustrated by comparable NOI growth of 90 basis points during a five year period for Tier One and Open Air assets. In addition, during the past four years comparable occupancy has actually increased 20 basis points for the core portfolio and tenant allowances have generally decreased for total enclosed assets as of DEC 31 2018.

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Maintaining Stability as Town Center Mandate and Department Store Adaptive Reuse Measures Proceed Concentrating upon improving Tier One and Open Air assets (93% of NOI) which possess upside greatest potential Net Operating Income Performance Net Operating Income Performance Net Operating Income Performance Net Operating Income Performance

• 1Q 19 Tier One and Open Air comparable net operating income (NOI) decreased 5.7% and increased 0.6%, respectively;
• When excluding ~$4.5M negative impact of cotenancy and rental income resulting from anchor liquidations, 1Q 19

comparable NOI for Tier One and Open Air was basically flat; and

• While operating expenses related to snow removal and insurance were slightly higher than anticipated, NOI was in line with

internal estimates as discussed during the previous quarter conference call.

1Q 2019 Comparable NOI 1Q 2018 Comparable NOI Difference YOY 1Q 2019 Comparable NOI Growth % 1Q 2019 Cotenancy Impact 1Q 2019 Lost Rent Impact Adjusted 1Q 2019 Comparable NOI Adjusted 1Q 2019 Comparable NOI Growth % Combined Tier One and Open Air $109,322 $113,883 ($4,561)

• 4.0%

($1,563) ($3,107) $113,992 0.1%

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Continued Robust Leasing with Diversified Tenancy Leasing is the litmus test for success Robust Leasing Volume and Tenant Diversification Robust Leasing Volume and Tenant Diversification Robust Leasing Volume and Tenant Diversification Robust Leasing Volume and Tenant Diversification Objective Objective Objective Objective

• First Quarter 2019 leasing volume continued to be robust exhibited by a 20% YOY increase totaling 1.4M square feet and the

number of lease transactions increased 10% YOY;

• In tandem, the increased volume and reduced number demonstrates our focus upon leasing up department store space e.g.

larger size per lease transaction;

• Of the 1.4M square feet, 52% of new leasing volume was attributable to lifestyle tenancy which includes food, beverage,

entertainment, home furnishings, fitness and professional services; and

• We continue to incent leasing professionals in order to diversify tenancy as ~30 leases qualified during the quarter.

Total Leasing Activity New Lease Count New Square Feet Renewal Lease Count Renewal Square Feet Total Lease Count Total Square Feet Square Feet Change YOY (%) Portfolio Size 53 461,878 233 922,477 286 1,384,355 20% 57.9M

9 Redevelopment Redevelopment Redevelopment Redevelopment is our is our is our is our most intriguing value propositions as our development and construction most intriguing value propositions as our development and construction most intriguing value propositions as our development and construction most intriguing value propositions as our development and construction expertise, as well as our robust expertise, as well as our robust expertise, as well as our robust expertise, as well as our robust operating

• perating
• perating
• perating

infrastructure, infrastructure, infrastructure, infrastructure, has allowed us to profitably execute upon has allowed us to profitably execute upon has allowed us to profitably execute upon has allowed us to profitably execute upon a hybrid a hybrid a hybrid a hybrid town center town center town center town center mandate of mandate of mandate of mandate of combining open air and combining open air and combining open air and combining open air and enclosed formats. enclosed formats. enclosed formats. enclosed formats.

• We have allocated approximately $300M-$350M of capital necessary to redevelop department store spaces situated at Tier One and Open Air

properties over a three to five year period;

• The costs mentioned above are included in our previously anticipated redevelopment spend of approximately $100M-$125M per annum;
• Redevelopment capital allocation excludes spaces owned by non-retailers including Seritage Growth Properties;
• WPG has allocated ~90% of redevelopment capital to Open Air and Tier One assets since the beginning of 2016;
• Vast majority of redevelopment is tenant driven e.g. signed leases prior to commencement; and
• Nearly $0.5B of liquidity by mid year 2019 allows us to fully commit to our redevelopment pipeline which we believe represents our best and

most strategic use of capital today.

WPG has the development expertise and capital to deliver hybrid town centers to our guests and tenants Redeveloping Hybrid Town Centers

Oklahoma City Collection Oklahoma City Collection Oklahoma City Collection Oklahoma City Collection Oklahoma City, OK Oklahoma City, OK Oklahoma City, OK Oklahoma City, OK Westminster Mall Westminster Mall Westminster Mall Westminster Mall Westminster, CA Westminster, CA Westminster, CA Westminster, CA Jefferson Valley Mall Jefferson Valley Mall Jefferson Valley Mall Jefferson Valley Mall Yorktown Heights, NY Yorktown Heights, NY Yorktown Heights, NY Yorktown Heights, NY Pearlridge Center Pearlridge Center Pearlridge Center Pearlridge Center Aiea, HI Aiea, HI Aiea, HI Aiea, HI

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Addressing Vacant Department Store Space a Priority

The demise of non differentiated department stores should be regarded as an opportunity to further our dominant town center objective

• As exhibited within the First Quarter 2019 supplemental, the Company provides updates relating to the 29 department stores located within Tier One and Open Air

assets which are currently vacant or deemed likely to close;

• As of last quarter, all 22 controlled by the Company were in various stages of redevelopment and/or replacement;
• Washington Prime Group has addressed 11 of spaces formerly occupied by department stores accounting for 50% of the 22 spaces controlled by the Company;

Completed Evaluating

4 4 4 4

Active

14 14 14 14

Announced

8 8 8 8

Under Construction

3 3 3 3 WPG Department Store Repositioning Snapshot WPG Department Store Repositioning Snapshot WPG Department Store Repositioning Snapshot WPG Department Store Repositioning Snapshot – – – – Tier One and Open Air Tier One and Open Air Tier One and Open Air Tier One and Open Air

Excludes seven (7) department store repositioning projects in Tier One portfolio completed since 2015.

Redevelopment and Department Store Progress Redevelopment and Department Store Progress Redevelopment and Department Store Progress Redevelopment and Department Store Progress

29 Department Stores $300M-$350M 5YR Anticipated Capital Spend

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Healthy Activity Further Illustrates Dominant Town Center Positioning

Big box retail recognizes the merits of locating in a Washington Prime Group asset

These include the following all of which all are situated within Tier One assets:

• A national home furnishings chain and off price retailer have agreed to replace Sears At Longview Mall, Longview, Texas;
• A national sporting goods chain has agreed to replace the former Herberger’s (Bon-Ton Stores); a newly constructed Dillard’s will replace Sears at Mesa Mall, Grand Junction,

Colorado; and several national retailers have signed letters of intent to replace the former Sports Authority; (continued on next page);

• Southern Hills Mall, Sioux City, Iowa, has signed letters of intent from off price retailer and home furnishings chain replacing the former Sears;
• Dillard’s will add its second location replacing former Herberger’s (Bon-Ton Stores) at Southgate Mall, Missoula, Montana;
• The Company has executed several leases with national retailers including Big Lots, Ulta Beauty and Five Below at Grand Central Mall, Parkersburg, West Virginia; a national home

furnishings chain and two off price retailers have signed letters of intent to replace the former Sears; and H&M replaced the former Elder Beerman (Bon-Ton Stores);

• Dunham’s Sports has executed a lease at Morgantown Mall, Morgantown, West Virginia, replacing space previously occupied by Elder Beerman (Bon-Ton Stores);
• The Company has executed a development agreement with Columbus based mixed use developer Crawford Hoying for a joint venture of the redevelopment of the Sears at Polaris

Fashion Place, Columbus, Ohio;

• The Company is in the process of obtaining mixed use entitlements for WestShore Plaza, Tampa, Florida, and discussions are underway regarding a joint venture for a mixed use

redevelopment replacing the former Sears;

• The RoomPlace currently under construction and is expected to open fall 2019 replacing the former Carson Pirie Scott (Bon-Ton Stores) at Lincolnwood Town Center, Lincolnwood,

Illinois; and

• RoomPlace and Round1 Entertainment will replace the former Sears at The Mall at Fairfield Commons, Dayton, Ohio.

In addition to the above which comprise the previously discussed adaptive reuse of eleven department stores, Marshalls will replace the former Toys R Us at the Plaza at Buckland Hills, Manchester Hills, Connecticut; and a national sporting goods chain has agreed to replace the former Toys and Babies R Us at Forest Plaza, Rockford, Illinois.

Redevelopment and Department Store Redevelopment and Department Store Redevelopment and Department Store Redevelopment and Department Store Progress (Continued) Progress (Continued) Progress (Continued) Progress (Continued)

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Continued progress has resulted in increased visibility Department Store Status Report

Count Count Count Count Property Property Property Property City City City City Former Former Former Former Department Store Department Store Department Store Department Store Owner Owner Owner Owner Closing Closing Closing Closing Date Date Date Date Planned Replacement Planned Replacement Planned Replacement Planned Replacement Status Status Status Status 1 Cottonwood Mall Albuquerque, NM Sears Sears AUG-18 Sears owned Evaluating Options 2 Grand Central Mall Parkersburg, WV Sears Lease DEC-18 Big box retail Lease out for Signature 3 Lincolnwood Town Center Lincolnwood, IL Carsons Pirie Scott Lease AUG-18 RoomPlace/Dining/ Retail RoomPlace under construction 4 Lindale Mall Cedar Rapids, IA Younkers Lease AUG-18 Retail Active Planning 5 Longview Mall Longview, TX Sears Lease JAN-19 Big box retail Pro-active termination, Letter of Intent (LOI) finalized 6 Mall at Fairfield Commons Dayton, OH Sears Lease DEC-18 RoomPlace/Round1 Pro-active termination, Replacement leases executed 7 Mall at Fairfield Commons Dayton, OH Elder-Beerman Lease AUG-18 Retail Active Planning 8 Markland Mall Kokomo, IN Carsons Pirie Scott Lease AUG-18 Retail Active Planning 9 Mesa Mall Grand Junction, CO Sears Lease NOV-18 Dillard's LOI executed 10 Mesa Mall Grand Junction, CO Herberger's Lease AUG-18 Big box retail LOI received 11 Morgantown Mall Morgantown, WV Belk Lease MAR-18 Big box retail Active Planning 12 Morgantown Mall Morgantown, WV Sears Lease JAN-19 Evaluating options Evaluating Options 13 Morgantown Mall Morgantown, WV Elder-Beerman Lease AUG-18 Dunham's Sports Lease executed 14 Northtown Mall Blaine, MN Herberger's Lease AUG-18 Entertainment/Big box retail Active Planning 15 Polaris Fashion Place Columbus, OH Sears Lease MAR-19 Mixed use Pro-active termination, Development Partner agreement executed 16 Port Charlotte Town Center Port Charlotte, FL Sears Lease MAR-19 Big box retail Active Planning 17 Southern Hills Mall Sioux City, IA Sears Lease MAR-19 Retail Pro-active termination, LOI received 18 Southern Hills Mall Sioux City, IA Younkers Lease AUG-18 Retail Active Planning 19 Southern Park Mall Youngstown, OH Sears Lease JUL-18 Big box retail Pro-active termination, Active Planning 20 Southgate Mall Missoula, MT Herberger's Lease AUG-18 Dillard's LOI executed 21 Southgate Mall Missoula, MT Herberger's Men Lease AUG-18 Dining Active Planning 22 WestShore Plaza Tampa, FL Sears Lease MAR-19 Mixed use Pro-active termination, Obtaining Entitlements 23 Mall at Johnson City Johnson City, TN Sears Lease Big box retail Active Planning 24 Northwoods Mall Peoria, IL Sears Sears Sears owned Active Planning 25 Orange Park Mall Orange Park, FL Sears Sears Sears owned Evaluating Options 26 Pearlridge Center Aiea, HI Sears Lease Entertainment/Dining Evaluating Options 27 Town Center Aurora Aurora, CO Sears Lease Mixed use Pro-active termination, Active Planning 28 Weberstown Mall Stocktown, CA Sears Ground Lease Mixed use Active Planning 29 Whitehall Mall Whitehall, PA Sears Lease Big box retail Active Planning

Vacant Department Stores Vacant Department Stores Vacant Department Stores Vacant Department Stores as as as as of MAR 31 2019

• f MAR 31 2019
• f MAR 31 2019
• f MAR 31 2019

Stores Occupied by Sears Stores Occupied by Sears Stores Occupied by Sears Stores Occupied by Sears as as as as of MAR 31

• f MAR 31
• f MAR 31
• f MAR 31 19

19 19 19

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Focused upon Improving Operating Efficacy and Guest Experience General Managers are the lifeblood of our assets and should be front and center interacting with guests and tenants on a real time basis

Goodwill Ambassadors Goodwill Ambassadors Goodwill Ambassadors Goodwill Ambassadors Think about it, General Managers serve as the primary interface for our more than 300M annual guests. As a result of the mandate of General Managers serving primarily as ‘goodwill ambassadors’ ~50% have been replaced by individuals from a wide range of sectors including lodging, gaming and entertainment. These proactive colleagues better understand the idiosyncrasies of their specific demographic constituency; know how to access corporate resources; and are enfranchised to make real time decisions which impact their assets. The Company has also instituted an aesthetic improvement program whereby local management has input as it relates to nonstructural upgrades. A multivariate rank order which includes revenue generation is now in place fostering healthy competition between General Managers. The Hub The Hub The Hub The Hub We have installed what we now affectionately refer to as ‘The Hub’ at every

• asset. The Hub replaces the traditional ‘out of the way’ management office

allowing for real time actions regarding guests, tenants and sponsors.

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Common Area Activation via Physical, Digital and Social Media Interacting with guests requires an appreciation for how they communicate

WPG is enhancing common area programming by employing a variety of medium which are relevant to our guests. Dynamic events and activities are being augmented by digital installations and social media which provide an interactive messaging

• experience. In fact, this marketing prowess was recently recognized as the Company

received second place out of 31 entrants for the coveted ICSC Global MAXI Awards for

• ur 2018 Holiday Influencer Campaign.

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Transforming Town Centers into the Hub of Daily Life Providing offerings which are relevant to the demographic consistencies which they serve

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Financial Improvement Evidenced via Reduced Leverage, Extended Maturity Profile and Increase of Unencumbered Assets Net Indebtedness: EBITDA ranks within top three of sector

High Quality Unencumbered Pool High Quality Unencumbered Pool High Quality Unencumbered Pool High Quality Unencumbered Pool

• 5.0%
• 5.0%
• 5.0%
• 5.0%

5.0% 5.0% 5.0% 5.0% 15.0% 15.0% 15.0% 15.0% 25.0% 25.0% 25.0% 25.0% 35.0% 35.0% 35.0% 35.0% 45.0% 45.0% 45.0% 45.0% 55.0% 55.0% 55.0% 55.0% 65.0% 65.0% 65.0% 65.0% 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 Est. 2019 Est. 2019 Est. 2019 Est. Open Air Open Air Open Air Open Air Tier One Enclosed Tier One Enclosed Tier One Enclosed Tier One Enclosed Tier Two Enclosed Tier Two Enclosed Tier Two Enclosed Tier Two Enclosed 2.0 2.5 3.0 3.5 4.0 4.5 1Q 15 1Q 15 1Q 15 1Q 15 1Q 19 1Q 19 1Q 19 1Q 19 Long Term Long Term Long Term Long Term Target Target Target Target 3.3 2.7

Debt Service Coverage Ratio Debt Service Coverage Ratio Debt Service Coverage Ratio Debt Service Coverage Ratio2 2 2 2

5.0 5.0 5.0 5.0 5.5 5.5 5.5 5.5 6.0 6.0 6.0 6.0 6.5 6.5 6.5 6.5 7.0 7.0 7.0 7.0 7.5 7.5 7.5 7.5 8.0 8.0 8.0 8.0 1Q 15 1Q 15 1Q 15 1Q 15 1Q 19 1Q 19 1Q 19 1Q 19 Long Term Long Term Long Term Long Term Target Target Target Target 7.9 7.0 6.0–6.5 ~3.0

2D 2D 2D 2Debt service includes interest expense and principal ebt service includes interest expense and principal ebt service includes interest expense and principal ebt service includes interest expense and principal amortization amortization amortization amortization 11Q 2019 e 11Q 2019 e 11Q 2019 e 11Q 2019 excludes leasing costs previously deferred. xcludes leasing costs previously deferred. xcludes leasing costs previously deferred. xcludes leasing costs previously deferred.

Net Indebtedness: EBITDA Net Indebtedness: EBITDA Net Indebtedness: EBITDA Net Indebtedness: EBITDA1 1 1 1

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Manageable Indebtedness Maturities

Maturities Maturities Maturities Maturities (Carrying amounts, including (Carrying amounts, including (Carrying amounts, including (Carrying amounts, including pro rata pro rata pro rata pro rata share of joint ventures)* share of joint ventures)* share of joint ventures)* share of joint ventures)*

AS OF MAR 31 19 AS OF MAR 31 19 AS OF MAR 31 19 AS OF MAR 31 19 ($000,000) ($000,000) ($000,000) ($000,000)

$- $- $- $- $200 $200 $200 $200 $400 $400 $400 $400 $600 $600 $600 $600 $800 $800 $800 $800 $1,000 $1,000 $1,000 $1,000 $1,200 $1,200 $1,200 $1,200 Mortgage Debt Term Loans Credit Facilty Bonds

$250M $250M $250M $250M Unsecured Unsecured Unsecured Unsecured Note Note Note Note

Recently closed $180M Waterford Lakes financing which substantially addressed $250M note maturing in 2020

*Maturity *Maturity *Maturity *Maturity schedule excludes the five schedule excludes the five schedule excludes the five schedule excludes the five Noncore assets. Noncore assets. Noncore assets. Noncore assets.

Financial Highlights Financial Highlights Financial Highlights Financial Highlights

• Solid debt service coverage with reasonable overall

leverage

• Ample liquidity to execute business plan
• 57% of NOI is unencumbered, 90% of which are Tier One
• r Open Air
• 42% of Tier One and Open Air NOI from assets that have

no exposure to traditional department stores

• Manageable long term maturities with specific plans in

place to address the $250M bond maturing in 2020

• Fixed interest rate on ~90% of total indebtedness
• Based on our projected taxable income, we anticipate no

change in our dividend policy in 2019; The Board of Directors will evaluate the dividend policy in subsequent years based on cash flow projections

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Refuting Physical Retailing Sector Inaccuracies Washington Prime Group is not afraid to contest erroneous data

Yellow journalism is best defined as reporting which emphasizes hyperbole over factual data. During the previous two weeks, a so called research report and a newspaper article illustrated how our sector is subject to this sensationalism. As a result, I find it necessary to refute such misinformation especially in light of the dramatic share price declines which occurred in conjunction with their respective releases. One such ‘research report’ focused upon physical retail visitation. The researchers in question utilize proprietary data which in the absence of analyzing the underlying factors and methodology employed, I’ll take at face value. Their conclusion was traffic peaked during Fourth Quarter 2018 and the implication seemed to be the freefall had already begun. Wait a minute…upon closer examination, two data points were conveniently omitted from said research report. The first questionable omission was while YOY visitation growth exhibited a The first questionable omission was while YOY visitation growth exhibited a The first questionable omission was while YOY visitation growth exhibited a The first questionable omission was while YOY visitation growth exhibited a marginal deceleration, it still exhibited positive YOY growth marginal deceleration, it still exhibited positive YOY growth marginal deceleration, it still exhibited positive YOY growth marginal deceleration, it still exhibited positive YOY growth during the months after the so called ‘peak during the months after the so called ‘peak during the months after the so called ‘peak during the months after the so called ‘peak’. ’. ’. ’. The second even more glaring omission, given this research was published in April, is the fact visitation growth immediately The second even more glaring omission, given this research was published in April, is the fact visitation growth immediately The second even more glaring omission, given this research was published in April, is the fact visitation growth immediately The second even more glaring omission, given this research was published in April, is the fact visitation growth immediately reb reb reb rebounded during First Quarter 2019

• unded during First Quarter 2019
• unded during First Quarter 2019
• unded during First Quarter 2019. When reviewing

their Bloomberg graph (see below), there is indeed volatility which might be as much a result of informational bias versus actual results. Albeit, over a one and three year timeframe the trend is unmistakably positive. Take a look for yourselves. The bottom line is The bottom line is The bottom line is The bottom line is physical retail visitation physical retail visitation physical retail visitation physical retail visitation growth trends have been positive and I think it’s because as our sector has learned the valuable lesson of diversifying away growth trends have been positive and I think it’s because as our sector has learned the valuable lesson of diversifying away growth trends have been positive and I think it’s because as our sector has learned the valuable lesson of diversifying away growth trends have been positive and I think it’s because as our sector has learned the valuable lesson of diversifying away fro fro fro from apparel m apparel m apparel m apparel (both by choice and attrition) and is increasingly offering guests differentiated goods and services (both by choice and attrition) and is increasingly offering guests differentiated goods and services (both by choice and attrition) and is increasingly offering guests differentiated goods and services (both by choice and attrition) and is increasingly offering guests differentiated goods and services. Some are just doing it faster than others.

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Statistical Analysis Contradicts Sensationalist Journalism and Research Convenient factual omissions are unacceptable

The next questionable reportage was a media article headlined ‘What Retail Recovery? Malls Under Pressure as Stores Close’. Let’s deconstruct this article as well as there are several attention grabbing statistics which warrant further examination. The article quoted a sell side analyst which stated ‘another 75,000 stores or around a tenth of existing stores as of the Third Quarter 2018 will close by 2026 if online retail penetration continues to rise from the current 16% to 25%’. Holy cow, this equates to over 10,000 closures per year over the next seven years! Here’s the problem with this prophecy…it Holy cow, this equates to over 10,000 closures per year over the next seven years! Here’s the problem with this prophecy…it Holy cow, this equates to over 10,000 closures per year over the next seven years! Here’s the problem with this prophecy…it Holy cow, this equates to over 10,000 closures per year over the next seven years! Here’s the problem with this prophecy…it ass ass ass assumes all eCommerce growth is direct to consumer, ignoring the fact umes all eCommerce growth is direct to consumer, ignoring the fact umes all eCommerce growth is direct to consumer, ignoring the fact umes all eCommerce growth is direct to consumer, ignoring the fact that that that that Buy Online Pick Up In Store (BOPIS) and Click and Collect are the two fastest growing online segments and are increasing five Buy Online Pick Up In Store (BOPIS) and Click and Collect are the two fastest growing online segments and are increasing five Buy Online Pick Up In Store (BOPIS) and Click and Collect are the two fastest growing online segments and are increasing five Buy Online Pick Up In Store (BOPIS) and Click and Collect are the two fastest growing online segments and are increasing five ti ti ti times faster than eCommerce as a whole mes faster than eCommerce as a whole mes faster than eCommerce as a whole mes faster than eCommerce as a whole. This study further assumes that 75% of total retail growth will be driven by online growth notwithstanding their own data fro This study further assumes that 75% of total retail growth will be driven by online growth notwithstanding their own data fro This study further assumes that 75% of total retail growth will be driven by online growth notwithstanding their own data fro This study further assumes that 75% of total retail growth will be driven by online growth notwithstanding their own data from T m T m T m Third Quarter 2018 which shows just 26% of total retail growth is driven by online hird Quarter 2018 which shows just 26% of total retail growth is driven by online hird Quarter 2018 which shows just 26% of total retail growth is driven by online hird Quarter 2018 which shows just 26% of total retail growth is driven by online purchases while a whopping 74% is driven by physical purchases while a whopping 74% is driven by physical purchases while a whopping 74% is driven by physical purchases while a whopping 74% is driven by physical. In other words, their forecast assumes the exact opposite of what the actual data is exhibiting. This is incongruous as it forces their model to assume physical retail has to shutter stores in order to foot to their projections. Online growth cited within this study is pretty lofty…100% for auto parts, 200% for home improvement and 400% for grocery (the latter implying $13B skyrockets to $80B). I’ll take the under as they forgot to tick and tie their eCommerce projections. The plain The plain The plain The plain and simple fact and simple fact and simple fact and simple fact is vast is vast is vast is vast majority of current online sales growth is heavily dependent upon majority of current online sales growth is heavily dependent upon majority of current online sales growth is heavily dependent upon majority of current online sales growth is heavily dependent upon consumer consumer consumer consumer picking up merchandise at a physical location picking up merchandise at a physical location picking up merchandise at a physical location picking up merchandise at a physical location. Next let’s turn to 2019 store closures. No argument with respect to the tally of 5,994 closures this year so far. It stinks. However, a little bit of data parsing provides color as to the nature of these closings. Six retail Six retail Six retail Six retail chains chains chains chains account for 73% of 2019 closures compared to 21 chains and 16 chains in 2017 and 2018, respectively. So more concepts a account for 73% of 2019 closures compared to 21 chains and 16 chains in 2017 and 2018, respectively. So more concepts a account for 73% of 2019 closures compared to 21 chains and 16 chains in 2017 and 2018, respectively. So more concepts a account for 73% of 2019 closures compared to 21 chains and 16 chains in 2017 and 2018, respectively. So more concepts aren’t going under…just the bad ones ren’t going under…just the bad ones ren’t going under…just the bad ones ren’t going under…just the bad ones. This speaks to a theme which we have championed loud and clear: Overleveraged apparel retailers with crappy merchandising should go the way of a certain avifauna described as ‘fat and flightless, clueless and clumsy’ which was native to the island of Mauritius and became extinct during the seventeenth century1. Then there was the mention of landlord defaults. What drives me crazy is when an idiosyncratic event is utilized to extrapolate a general (and more often than not obtuse) assumption. For instance, one overleveraged asset was highlighted in the article which exhibited fair to middling occupancy (86%) prior to an 850,000 square foot expansion for a grand total of 2.4M square feet . Further exacerbating the situation, this asset was located within a catchment unable to absorb existing let alone incremental space. Almost forgot…the capitalization rate used for valuation purposes on this 86% occupied center was sub five percent. Actually, CMBS (as provided by Trepp) is performing historically well. Overall delinquency as of March 2019 was 2.88% compared to March 2018 delinquencies of 4.55%. Regarding my beloved sector, de Overall delinquency as of March 2019 was 2.88% compared to March 2018 delinquencies of 4.55%. Regarding my beloved sector, de Overall delinquency as of March 2019 was 2.88% compared to March 2018 delinquencies of 4.55%. Regarding my beloved sector, de Overall delinquency as of March 2019 was 2.88% compared to March 2018 delinquencies of 4.55%. Regarding my beloved sector, delin lin lin linquencies quencies quencies quencies have actually decreased by 100 basis points to 4.90%, which includes all those questionable CMBS 1.0 loans with ‘frothy’ asse have actually decreased by 100 basis points to 4.90%, which includes all those questionable CMBS 1.0 loans with ‘frothy’ asse have actually decreased by 100 basis points to 4.90%, which includes all those questionable CMBS 1.0 loans with ‘frothy’ asse have actually decreased by 100 basis points to 4.90%, which includes all those questionable CMBS 1.0 loans with ‘frothy’ asset v t v t v t valuations aluations aluations

• aluations. Simply put, the marketplace is dealing with irresponsible CMBS mortgage

loans originated from the previous cycle. Remember as well, a bad loan doesn’t always necessarily mean a bad asset. Last but not least, the WSJ article addressed vacancy rates by stating ‘mall vacancy rates…inched up in the First Quarter to Last but not least, the WSJ article addressed vacancy rates by stating ‘mall vacancy rates…inched up in the First Quarter to Last but not least, the WSJ article addressed vacancy rates by stating ‘mall vacancy rates…inched up in the First Quarter to Last but not least, the WSJ article addressed vacancy rates by stating ‘mall vacancy rates…inched up in the First Quarter to 9.3 9.3 9.3 9.3% from 9.0% in the fourth quarter of 2018 according to real estate research firm % from 9.0% in the fourth quarter of 2018 according to real estate research firm % from 9.0% in the fourth quarter of 2018 according to real estate research firm % from 9.0% in the fourth quarter of 2018 according to real estate research firm REIS…the highest vacancy rate since the third quarter of 2011 when it reached 9.4%’. Okay, we’ll admit vacancy rates are osc REIS…the highest vacancy rate since the third quarter of 2011 when it reached 9.4%’. Okay, we’ll admit vacancy rates are osc REIS…the highest vacancy rate since the third quarter of 2011 when it reached 9.4%’. Okay, we’ll admit vacancy rates are osc REIS…the highest vacancy rate since the third quarter of 2011 when it reached 9.4%’. Okay, we’ll admit vacancy rates are oscill ill ill illating in a 40bp range. ating in a 40bp range. ating in a 40bp range. ating in a 40bp range. Clarification also necessary regarding overall retail vacancy rates, including Enclosed and Open Air, which are above 10%. Per REIS, a major reason Enclosed increased 30 basis points is due to Sears albeit REIS also Per REIS, a major reason Enclosed increased 30 basis points is due to Sears albeit REIS also Per REIS, a major reason Enclosed increased 30 basis points is due to Sears albeit REIS also Per REIS, a major reason Enclosed increased 30 basis points is due to Sears albeit REIS also mentions rental income was flat during the same period despite the occupancy hiccup mentions rental income was flat during the same period despite the occupancy hiccup mentions rental income was flat during the same period despite the occupancy hiccup mentions rental income was flat during the same period despite the occupancy hiccup. This didn’t make it into published article…I’ll check the footnotes.

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