November 2019 November 2019 November 2019 November 2019 SAFE - - PowerPoint PPT Presentation

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November 2019 November 2019 November 2019 November 2019

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SAFE HARBOR

Some of the information contained herein includes forward looking

• statements. Such statements are subject to risks and uncertainties

which could cause actual results in the future to differ materially and adversely from those described within 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 as well as within filings made with the SEC, which are available on the investor relations section of the Company's website www.washingtonprime.com.

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3Q EARNINGS CALL EXCERPTED QUOTES

Let’s now turn to leasing which As You Oughta Know9 is our most important and Epic10 task. Our leasing professionals continue to perform with the fortitude of a Seven Nation Army11 and as a result exhibited a robust 13.0% YOY increase totaling 3.2M SF…the number of lease transactions for the same period increased 9.0%. Starting with a department store update, we have now resolved 17, or 74%, of 23 vacant department stores. While pundits were expecting a [more] Bitter [than] Sweet Symphony7, we were able to provide solutions ahead of schedule and attract a wide array of tenants which markedly diversify current rosters. I’ll let you decide what’s better…Fieldhouse USA, HomeGoods, PetSmart, Round1, ALDI, The RoomPlace, T.J. Maxx…just to name a few…or a lackluster Sears or Bon-Ton store. Unless you’re the Mayor of Simpletown8, it’s a pretty easy decision. Combine those names with some local and regional flavor…and you have a par Of the aforementioned 3.2M SF, 56.0% of new leasing volume was attributable to lifestyle tenancy. I can’t resist…we continue to give our guests plenty of reasons to Come Out and Play12 as well as eat, drink and buy a loveseat or two. [The above exhibits redevelopment potential via] a conservative assumption set [which] resulted in $2.00 or more of value creation per share...just for these three assets. Now extrapolate…and apply this methodology to Pearlridge Center, Southern Park Mall, Grand Central Mall, Polaris Fashion Place, Southgate Mall, The Mall at Johnson City...just to name a few.

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Washington Prime Group: National Footprint with Local Flavor

With 106 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 56M 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.

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 106 106 106 106

Town Centers Town Centers Town Centers Town Centers

56M 56M 56M 56M

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 106 assets consisting of 56M SF as of SEP 30 2019
• Tier One and Open Air assets account for 93% of total NOI as a result of Noncore assets having been reduced by 21%
• 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-

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 30% 63% 7%

Total NOI (%) Total NOI (%) Total NOI (%) Total NOI (%) 3Q 2019 3Q 2019 3Q 2019 3Q 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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3Q 19 HIGHLIGHTS Forecast Forecast Forecast Forecast

• Reaffirmed 2019 FFO, as adjusted, and dividend guidance of $1.20 at the midpoint and $1.00 per diluted share, respectively, and;
• Maintained 2020 comparable NOI growth forecast of at least 2.0%.

Leasing Metrics Leasing Metrics Leasing Metrics Leasing Metrics

• Leased 3.2M SF of space YTD of which lifestyle tenancy accounted for 56% of the 3.2M SF;
• Combined Enclosed and Open Air occupancy was 92.9%;
• Tier One occupancy cost decreased 90 basis points to 11.2%;
• Leasing spreads for new Tier One and Open Air transactions increased 1.6%; and
• Resolved two additional vacant department stores e.g. 17 of 23 or 74% have been addressed.

Leasing Activity Leasing Activity Leasing Activity Leasing Activity YTD as of JUN YTD as of JUN YTD as of JUN YTD as of JUN 30 19 30 19 30 19 30 19 New New New New Lease Count Lease Count Lease Count Lease Count New New New New Square Feet Square Feet Square Feet Square Feet Renewal Renewal Renewal Renewal Lease Count Lease Count Lease Count Lease Count Renewal Renewal Renewal Renewal Square Feet Square Feet Square Feet Square Feet Total Total Total Total Lease Count Lease Count Lease Count Lease Count Total Total Total Total Square Feet Square Feet Square Feet Square Feet Square Feet Square Feet Square Feet Square Feet Change YOY (%) Change YOY (%) Change YOY (%) Change YOY (%) Portfolio Portfolio Portfolio Portfolio Size Size Size Size 213 1,184,689 595 2,062,849 808 3,247,538 13% 56.2M

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3Q 19 HIGHLIGHTS Operating Metrics Operating Metrics Operating Metrics Operating Metrics

• Tier One occupancy cost decreased 90 basis points to 11.2%;
• Tier One Sales PSF increased 4.6% to $413;
• Third quarter comparable NOI growth for Tier One and Open Air was (5.5%); and
• Excluding cotenancy and rental income loss impact from bankruptcies, comparable NOI was flat.

Capital Markets Transactions Capital Markets Transactions Capital Markets Transactions Capital Markets Transactions

• Proactively retired at a discount $29.1M of outstanding principal on Senior Notes due 2024;
• $68.1M of net loan proceeds raised from the refinancing of four Open Air assets; and
• $42.4M of net proceeds raised from the sale leaseback of fee interest in land at four Tier One assets.

Events, Activities and Installations Events, Activities and Installations Events, Activities and Installations Events, Activities and Installations

• WPG assets hosted 776 events, activities, installations and tenant activations during the quarter totaling 2,163 YTD;

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DEPARTMENT STORE ADAPTIVE REUSE UPDATE WPG Department Store Repositioning Snapshot WPG Department Store Repositioning Snapshot WPG Department Store Repositioning Snapshot WPG Department Store Repositioning Snapshot

29 Department Stores $300M-$350M 5YR Anticipated Capital Spend Completed Completed Completed Completed Evaluating Evaluating Evaluating Evaluating 2 3 Active Active Active Active 9 Announced Announced Announced Announced 11 Under Under Under Under Construction Construction Construction Construction 4 17 Projects Addressed (Tier One and Open Air) 17 Projects Addressed (Tier One and Open Air) 17 Projects Addressed (Tier One and Open Air) 17 Projects Addressed (Tier One and Open Air)

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

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SPECIAL PROJECTS During 2019, the company established a Special Projects program which focuses upon primarily aesthetic improvements with the intent of improving upon interior and exterior ‘curb appeal’. This effort is in accordance with the incremental approach employed prior to large scale development. It should be noted such measures are generally considered minimal from a capital expenditure perspective albeit they often produce an outsized impact. This effort is a collaboration between the construction, property management and marketing departments. As importantly, a process exists whereby local management provides input as to what is deemed important for the asset under review and a prioritized status report tracks fulfilment progress on a recurring basis.

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MARKETING AND ACTIVATION UPDATE Events, activities and installations are crucial as they enliven common area and appeal to existing and prospective guests by providing seasonal, athletic, social, educational and cultural attractions. Washington Prime Group recently launched its activation menu which allows local management to readily implement various activations in order to drive guest traffic as well as increase sponsorship revenue.

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MARKETING AND ACTIVATION UPDATE The manner by which Washington Prime Group communicates with a specific demographic constituency has been greatly enhanced as physical, digital and social media are employed allowing for targeted and real time messaging. As illustrated below, the Company has quickly emerged as a leader with respect to accessing a variety of communication channels whether local, regional and national.

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MIXED USE DEVELOPMENT VALUE CREATION

Asset Asset Asset Asset1

1 1 1

Implied Net Asset Implied Net Asset Implied Net Asset Implied Net Asset Value Creation Value Creation Value Creation Value Creation2

2 2 2

Value Creation Value Creation Value Creation Value Creation per Common Share per Common Share per Common Share per Common Share Westminster Mall Westminster Mall Westminster Mall Westminster Mall $155,000 $0.69 WestShore WestShore WestShore WestShore Plaza Plaza Plaza Plaza $189,400 $0.85 Clay Clay Clay Clay Terrace Terrace Terrace Terrace $141,200 $0.63 Total Total Total Total $485,600 $2.17

Within 3Q 19 commentary, we summarized mixed use redevelopment potential for three representative assets and the incremental impact upon net asset valuation (adjacent table):

• Three representative assets were selected, WestShore Plaza, Westminster Mall

and Clay Terrace, all of which are scheduled to undergo redevelopment in short order;

• Current valuation was ascribed to each asset by applying actual net operating

income and implied capitalization rate of 25.0% derived from a share price of ~$4.00;

• Note these redevelopment projects include retail, office, residential and

lodging components; in every instance, obligation is to deliver fully entitled land parcels to developers of these products while retail remains the responsibility of WPG;

• Capital spend for aforementioned delivery of fully entitled land parcels was

included as a deduct;

• Fair market value arrived at via third party research.
• Consider extrapolating and applying this methodology in various degrees to

Pearlridge Center, Southern Park Mall, Grand Central Mall, Polaris Fashion Place, Southgate Mall, The Mall at Johnson City et. al.

1 (000s) omitted except for Value Creation per Common Share 2 Incremental capital cost of ~$420M netted against Implied Asset Value Creation

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YTD 2019 Summary of Capital Raising Initiatives

• Addressed upcoming $250M senior unsecured note maturing April 2020 via the following:
• Closed $180M mortgage loan for Waterford Lakes with all in coupon of 4.86%;
• $68.1M of net loan proceeds raised from the refinancing of four Open Air properties;
• Proactively retired $29.1M of outstanding principal of Senior Unsecured Notes due 2024;
• Announced $38M definitive agreement for the sale of 20 additional outparcels to Four Corners Property Trust; and
• $42.4M of net proceeds raised from sale leaseback of fee interest in land upon which four Tier One assets are situated.

Ground Sale Ground Sale Ground Sale Ground Sale-

• Leaseback Synopsis

Leaseback Synopsis Leaseback Synopsis Leaseback Synopsis Original Original Original Original Revised Revised Revised Revised I% I% Proceeds from sale of land Proceeds from sale of land Proceeds from sale of land Proceeds from sale of land $98,900 7.40% $98,900 7.40% Ground lease payment Ground lease payment Ground lease payment Ground lease payment $7,319 $7,319 Credit Facility Pay Down Credit Facility Pay Down Credit Facility Pay Down Credit Facility Pay Down ($98,000) ($3,778) 3.82% $(43,900) ($1,677) 3.82% Seller Financing Seller Financing Seller Financing Seller Financing

• ($55,000)

($2,200) 4.00% Net Interest Payment Net Interest Payment Net Interest Payment Net Interest Payment (YR 1) (YR 1) (YR 1) (YR 1)

• $3,541
• $3,442
• Annual net interest

payment is basically in line with original estimates.

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Stability Best Illustrated by Minimal Variance of Historical Operating Metrics

In spite of significant inline retailer and department store bankruptcies, cash flow stability is best illustrated by NOI growth of 120 basis points during a five year period for Tier One and Open Air assets. Year-end occupancy for Tier One assets is expected to improve 150 to 200 basis points.

Releasing Releasing Releasing Releasing Spread Spread Spread Spread TTM TTM TTM TTM 2015 2015 2015 2015 TTM 2016 TTM 2016 TTM 2016 TTM 2016 TTM TTM TTM TTM 2017 2017 2017 2017 TTM TTM TTM TTM 2018 2018 2018 2018 TTM SEP 30 TTM SEP 30 TTM SEP 30 TTM SEP 30 2019 2019 2019 2019 Tier One 1.5%

• 1.3%
• 0.4%
• 8.0%
• 7.6%

Open Air 19.3% 3.7% 3.6%

• 0.1%

4.2% Total 5.1% 0.5% 0.6%

• 6.3%
• 4.8%

Segment Segment Segment Segment YE 2014 Occupancy % YE 2014 Occupancy % YE 2014 Occupancy % YE 2014 Occupancy % as of DEC 31 as of DEC 31 as of DEC 31 as of DEC 31 YE 2015 Occupancy % YE 2015 Occupancy % YE 2015 Occupancy % YE 2015 Occupancy % as as as as of

• f
• f
• f DEC 31

DEC 31 DEC 31 DEC 31 YE 2016 Occupancy YE 2016 Occupancy YE 2016 Occupancy YE 2016 Occupancy % % % % as of DEC 31 as of DEC 31 as of DEC 31 as of DEC 31 YE 2017 Occupancy YE 2017 Occupancy YE 2017 Occupancy YE 2017 Occupancy % % % % as as as as of

• f
• f
• f DEC

DEC DEC DEC 31 31 31 31 YE 2018 Occupancy YE 2018 Occupancy YE 2018 Occupancy YE 2018 Occupancy % % % % as of DEC 31 as of DEC 31 as of DEC 31 as of DEC 31 Occupancy as Occupancy as Occupancy as Occupancy as

• f SEP 30 19
• f SEP 30 19
• f SEP 30 19
• f SEP 30 19

Tier One 94.0% 93.7% 93.9% 93.1% 94.0% 90.1% Open Air 95.3% 95.9% 95.8% 95.8% 95.6% 96.2% Total 94.6% 94.7% 94.8% 94.4% 94.8% 92.9% Segment Segment Segment Segment FY FY FY FY 20 20 20 2014 14 14 14 NOI NOI NOI NOI ($ ($ ($ ($000) 000) 000) 000) FY 2015 NOI FY 2015 NOI FY 2015 NOI FY 2015 NOI ($000) ($000) ($000) ($000) FY 2016 NOI FY 2016 NOI FY 2016 NOI FY 2016 NOI ($000) ($000) ($000) ($000) FY 2017 NOI FY 2017 NOI FY 2017 NOI FY 2017 NOI ($000) ($000) ($000) ($000) FY 2018 NOI FY 2018 NOI FY 2018 NOI FY 2018 NOI ($000) ($000) ($000) ($000) FY 2019 Comp FY 2019 Comp FY 2019 Comp FY 2019 Comp NOI NOI NOI NOI Forecast Forecast Forecast Forecast ($000) ($000) ($000) ($000) Forecasted 5YR Forecasted 5YR Forecasted 5YR Forecasted 5YR NOI Growth NOI Growth NOI Growth NOI Growth1

1 1 1

Tier One $332,126 $331,755 $341,181 $340,543 $339,331

• Open Air

$114,919 $119,486 $125,189 $131,734 $130,752

• Total

$447,045 $451,241 $466,370 $472,277 $470,083 $452,250 1.2% Tier One Enclosed Tier One Enclosed Tier One Enclosed Tier One Enclosed FY FY FY FY 2015 2015 2015 2015 FY FY FY FY 2016 2016 2016 2016 FY FY FY FY 2017 2017 2017 2017 FY FY FY FY 2018 2018 2018 2018 SEP 30 SEP 30 SEP 30 SEP 30 2019 2019 2019 2019 AVG Lease Term (New) 7.0 7.5 6.9 6.5 6.8 AVG Lease Term (Renewal) 4.0 4.5 4.3 3.5 3.7 Tenant Allowance PSF (New) $43.99 $40.61 $37.10 $37.25 $55.86 AVG Rent PSF (New) $23.46 $31.00 $31.03 $28.12 $31.85

1 Includes all properties owned as of SEPT 30 2019. On a comparable basis e.g. excluding assets acquired after 2014 forecasted five year NOI growth is (0.6%)

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Financial Improvement Evidenced via Reduced Leverage, Extended Maturity Profile and Increase of Unencumbered Assets

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 Tier One Enclosed Tier Two Enclosed 2.0 2.5 3.0 3.5 4.0 4.5 1Q 15 3Q 19 Long Term Target 3.3 2.6

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

5.0 5.5 6.0 6.5 7.0 7.5 8.0 1Q 15 3Q 19 Long Term Target 7.9 7.5 6.0–6.5 3.0 2Debt service includes interest expense and principal amortization 13Q 2019 excludes 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 SEP 30 19 AS OF SEP 30 19 AS OF SEP 30 19 AS OF SEP 30 19 ($000,000) ($000,000) ($000,000) ($000,000) $250M Unsecured Notes

*Maturity schedule excludes five Noncore assets

Financial Highlights Financial Highlights Financial Highlights Financial Highlights

• Solid debt service coverage combined with reasonable overall

leverage;

• Ample liquidity to execute business plan;
• 56% of NOI is unencumbered, 93% is Tier One and Open Air;
• 42% of Tier One and Open Air NOI derived from assets which

have no traditional department store exposure;

• Manageable long term maturities and have addressed the

$250M bond maturing in 2020;

• Fixed interest rate on ~90% of total indebtedness;
• Based on projected taxable income, the Company anticipates

no change in dividend policy during 2019; and

• As is commonplace, Board of Directors evaluates forward

dividend policy based upon cash flow projections.

During 3Q 19, retired $29.1M of 2024 Unsecured Notes

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