Market Overview

Land and Buildings Issues Letter Commenting on Taubman Centers' Numerous Misleading Excuses for Chronic Underperformance


Land & Buildings Investment Management, LLC (together with its
affiliates, "Land and Buildings") announced today that it has issued an
open letter to shareholders of Taubman Centers, Inc. (NYSE:TCO)
("Taubman," "Taubman Centers" or the "Company") addressing Bobby
Taubman's numerous misleading excuses for the Company's abysmal
performance. Please visit
for additional materials regarding the solicitation.

The full text of the letter follows:

Dear Fellow Taubman Shareholders:

We believe that Taubman Centers, under the leadership of CEO and
Chairman Bobby Taubman has been misleading the investment community for
years and is now at it again, trying to buy more time in an attempt to
reverse the inferior total shareholder returns, poor operating results
and bad capital allocation decisions at Taubman Centers over the past 5,
3 and 1-year periods.1 We urge shareholders not to be misled
and to help put the Company back on track towards profitability by
electing Land and Buildings' highly-qualified nominees at the upcoming
annual meeting. It is time for change at Taubman Centers. Consider the
following highlights of the Company's abysmal track record under the
leadership of Bobby Taubman and supervision of Lead Director Myron

Undisciplined capital allocation

  • Taubman, in our view, wants investors to believe that it will take
    time to prove the benefits of recent developments, yet the evidence is
    in: with few exceptions, Taubman's development track record shows
    repeated examples of value destruction. Developments from 20 years ago
    – guided by then-Chairman Al Taubman – whether successful or not, are
    irrelevant in the context of this contest.
  • What really matters is that the recent development missteps in Puerto
    Rico, Hawaii, St. Louis and Los Angeles cannot be cured with time and
    have failed under the leadership of current Chairman Bobby Taubman and
    supervision of Lead Director Myron Ullman. Analysts agree and our on
    the ground due diligence confirms that Taubman's recent development
    foray was a money-losing expedition, with four projects that were
    ill-conceived from the start and likely to require $1 billion in
    impairments in our view.

Poor operations

  • Taubman apparently wants investors to believe that kiosks, advertising
    and other missed revenue opportunities will adversely impact rent paid
    by other tenants yet peers who have embraced these revenue sources
    operate at 770 basis points better EBITDA margins on average the past
    five years. At $13 billion of total assets is more than sufficient to
    generate EBITDA margins that are more in-line with those of its Class
    A Mall Peers2. For years, analysts and investors have in
    our view pressed Bobby Taubman to implement best in class strategies
    to no avail.
  • Investors can just look to Woodfield Mall in Schaumburg, IL, which
    upon a change of management to a best in class operator, generated a
    $4 million (8%) increase in net operating income driven by expense
    controls and incremental revenues.

Inferior total returns

  • Bobby Taubman seems to want shareholders to believe that 20-year,
    10-year and other arbitrary time periods are relevant to evaluate the
    Company's performance, but these long time frames encompass a period
    during which his father was active in the business and do not
    represent the more relevant time periods used by leading industry
    proxy advisory firms such as Glass Lewis and ISS, which measure
    performance using 5, 3, and 1-year periods. The reality is that
    Taubman has underperformed its Class A Mall Peers in each of these
    more relevant time periods.
  • We believe Taubman arbitrarily chooses from a rotating series of peer
    groups and rotating time periods to sugar-coat performance and justify
    the Company's poor relative returns. The reality is that the Company
    embarked on the most ambitious development program since its IPO over
    the past five years, which we believe significantly diverted attention
    from the core portfolio, leading to Taubman's shares underperforming
    its Class A Mall Peers by 57% over the past five years.

Abysmal corporate governance

  • Taubman wants investors to believe that it has a longstanding
    commitment to enhancing corporate governance, yet under the
    supervision of Lead Director Myron Ullman the Company maintains a
    dual-class share structure, a staggered, long-tenured (16 years),
    interconnected Board and has repeatedly ignored shareholder concerns.
  • Taubman has earned the worst corporate governance score in the REIT
    industry, according to leading independent real estate research firm
    Green Street Advisors, a true feat given the pervasive poor corporate
    governance in the REIT sector relative to the rest of Corporate

Staggered, clubby and long-tenured Board

  • Bobby Taubman apparently wants shareholders to believe he and
    reactively appointed Lead Director Myron Ullman who has never been
    elected by shareholders are better for the Company than Charles Elson
    and Jonathan Litt, yet Bobby and Myron have repeatedly ignored
    shareholder voices, overseen dismal total shareholder returns, abysmal
    corporate governance, inferior EBITDA margins, and undisciplined,
    value destroying capital allocation.
  • The Company seemingly believes the Taubman Family's alleged 30% vote
    is all it will take to win this proxy contest, yet the plurality
    voting standard for director elections means whoever gets the most
    votes will be elected to the Board.
  • The Board appears to have the Taubman Family's back allowing the
    Family to avoid taxes by not converting their private company OP Units
    into common shares while effectively controlling the public company,
    Taubman Centers, based on new revelations in Company materials last
    week that establish a value for the Series B Preferred Shares of 30%
    or more of the value of Capital Stock in TCO, which our recent lawsuit
    shows is a clear violation of the Ownership Limit contained in the
    Company's Charter of 8.23%.

Land and Buildings' nominees Charles Elson and Jonathan Litt have
proven track records of bringing accountability to boardrooms in
numerous situations resulting in strong shareholder returns.

  • Charles Elson, considered one of the foremost authorities on corporate
    governance in America, could immediately leverage his corporate
    governance expertise to push to modernize the broken corporate
    governance structure at Taubman as he successfully did at numerous
    companies including Bob Evans Farms, Inc., HealthSouth Corporation and
    AutoZone Inc. Mr. Elson is the Edgar S. Woolard, Jr., Chair in
    Corporate Governance and the Director of the John L. Weinberg Center
    for Corporate Governance at the University of Delaware.
  • Jonathan Litt, a leading sell-side real estate analyst for 14 years,
    and the number 1 ranked analyst for eight years by Institutional
    Investor magazine and as CIO and Founder of Land and Buildings since
    2008, has pushed for change and successfully realized value for
    shareholders achieving more than a 30% annualized gross return on
    completed investments3 where they advocated for change. He
    could immediately leverage his experience to help drive positive
    operational and capital allocation improvements at the Company.

With a modernized governance structure, a focus on implementing best in
class operating strategies and a rigorous capital allocation policy –
along with a culture of accountability in all aspects of the Company –
Taubman should be able to close the substantial gap to underlying asset
value, which we estimate at $106 per share, meaning a 70% upside from
current levels.4

By voting the GOLD proxy card at the
upcoming 2017 Annual Meeting and electing Charles Elson and Jonathan
Litt to the Board, you can help begin the process of instilling
accountability, remedying dismal performance and unlocking substantial
trapped value at the Company


Jonathan Litt

Founder & CIO

Land and Buildings Investment Management, LLC

It is Time for Change and Accountability.

Vote the GOLD Proxy Card Today!

About Land and Buildings:

Land and Buildings is a registered investment manager specializing in
publicly traded real estate and real estate related securities. Land and
Buildings seeks to deliver attractive risk adjusted returns by
opportunistically investing in securities of global real estate and real
estate related companies, leveraging its investment professionals' deep
experience, research expertise and industry relationships.

1 Shareholders should refer to Land and Buildings'
presentation titled "Addressing Abysmal Corporate Governance and Chronic
Underperformance at Taubman Centers," which was filed as an exhibit to
its Form DFAN14A with the SEC on May 1, 2017 for additional details
regarding the statements, facts and opinions referenced herein, which
are based on Land and Buildings' review and analysis of the Company's
and its peers' SEC filings and other publicly available information and

2 Class A Mall Peers defined by Land and Buildings as
Taubman's high quality Class A mall peers GGP, Inc., The Macerich
Company, Simon Property Group Inc. (see also Appendix to Land and
Buildings' May 1st presentation).

3 See

4 The valuations referenced herein are estimates and
therefore there can be no assurance that such estimates are reflective
of actual realizable value. The valuations are also subject to market
change, including changes to the REIT industry generally and/or to
Taubman specifically. Further, while Land and Buildings believes its
nominees will work rigorously to help put the Company on the right path
towards shareholder value creation, such nominees will constitute a
minority of the Board if elected at the Annual Meeting and as such,
there can be no guarantee that they will be able to implement the
actions that they believe are necessary to maximize shareholder value.

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