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 SHORT HILLS, N.J., Sept. 29 /PRNewswire/ -- Executives of Taubman Centers, Inc. (NYSE: TCO) today met with financial analysts and institutional investors at The Mall at Short Hills in Short Hills, New Jersey.
 Taubman Centers, Inc., a real estate investment trust, is managing general partner of The Taubman Realty Group Limited Partnership (TRG), which owns, develops, acquires and operates regional shopping centers nationally.
 Construction is under way at the shopping center, one of 19 TRG properties, on a major expansion that includes new Neiman Marcus, Nordstrom and Saks Fifth Avenue department stores along with 100,000 square feet of additional mall shops.
 $200 Million Financing Completed
 In comments preceding a tour of the expansion, Taubman Centers President and Chief Executive Officer Robert S. Taubman announced that TRG has executed a placement agreement for a private placement under Rule 144A of $200 million of 10-year fixed rate unsecured notes. Closing will take place October 4.
 "We're delighted we were able to take advantage of the attractive rates available in today's market, by fixing rates and extending terms on a significant part of our debt."
 The proceeds of the financing will be used to repay debt and to fund related costs. The debt being repaid is principally secured debt on Taubman Realty Group wholly owned properties. The notes received ratings of BBB+ from Standard and Poor's and Baa2 from Moody's.
 TRG Ownership of Westfarms Increases
 Mr. Taubman also announced that in August TRG's ownership of the Westfarms shopping center (Hartford, Connecticut) increased to 68.4 percent, up from 65 percent, as a result of a transaction in which a deceased joint venture partner's interest was redeemed by the joint venture for $5 million in cash.
 Of the 19 shopping centers in the TRG portfolio, nine are effectively wholly owned, and 10 are joint ventures. "We intend to consolidate TRG's ownership of our joint venture properties whenever these transactions can be completed at favorable pricing, and contribute immediately to our Distributable Cash Flow," said Mr. Taubman.
 Substantial Progress on Financing Program
 Taubman Executive Vice President and Chief Financial Officer Bernard Winograd reviewed the debt placement announced today in the context of the company's overall 1993 financing program, that includes refinancings of three TRG joint venture properties: Westfarms, Woodfield (suburban Chicago), and Lakeside (suburban Detroit).
 "Between these joint venture financings and the $200 million of TRG notes just placed," said Mr. Winograd, "by year-end we anticipate that we will have changed the rate, the maturity, or replaced outright about 60 percent of TRG's Beneficial Interest in Debt. This will represent substantial progress toward the recasting of TRG's debts in a way that will smooth their maturities, fix their rate of interest, and assure us of increased flexibility to take advantage of future business opportunities, such as acquisitions."
 Lower Occupancy May Affect 1993 Funds From Operations
 In reviewing the company's financial performance, Mr. Winograd said that although TRG mall tenant sales, EBITDA, and Distributable Cash Flow all increased in the first six months of 1993, occupancy was 2.1 percent below the prior year in the first quarter and 1.4 percent below in the second quarter. This was largely the result of the previously reported closing of eight large stores on which rent averaged less than $10 per square foot.
 "We now expect an unfavorable comparison in the third quarter as well, in large part due to the fact that two major tenants closed 80,000 square feet of space in eight of our centers in August. Rent on this space was approximately $13.25 per square foot," said Mr. Winograd.
 "While this is in a very real sense good news, since we have already re-leased most of this space to more productive retailers at significantly higher average rents, the closings will adversely impact occupancy and revenue in the short term until the new tenants open," said Mr. Winograd.
 "Accordingly, average occupancy this year will almost certainly be below last year's 88.1 percent, although probably by less than two percentage points for the year as a whole.
 "In the absence of offsetting positive developments from other sources, it is not likely that we will achieve for this year the level of Funds From Operations that we anticipated at the beginning of the year," Mr. Winograd said. "A two percent decrease in average occupancy for the year would reduce TRG revenue approximately $3.8 million which, for Taubman Centers, Inc., would result in a shortfall in Funds From Operations of about $.03 per share.
 "Whatever average occupancy or Funds From Operations actually turns out to be this year," said Mr. Winograd, "our $.88 dividend for the year will not be affected. As we pointed out during our initial public offering last year, and many times since, we simply do not believe that short-term variances in actual results -- up or down -- should affect our dividend."
 Large Tenants to Open at Beverly Center
 The company also announced that a 47,000 square foot Bullock's Men's Store will open in November at Beverly Center in Los Angeles to complement the 160,000 square foot Bullock's department store at the center. The new men's store will replace Conran's, which closed in August. Also, a new 42,000 square foot Bed Bath & Beyond will open in the fourth quarter at Beverly Center, in space formally occupied by the Irvine Farmer's Market.
 -0- 9/29/93
 /CONTACT: Christopher J. Tennyson of Taubman, 313-258-7519/

CO: Taubman Centers, Inc.; Taubman Realty Group Limited Partnership ST: Michigan, New Jersey IN: REA SU:

LG -- NY038 -- 6792 09/29/93 11:50 EDT
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Publication:PR Newswire
Date:Sep 29, 1993

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