UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-K





FOR
ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d) OF
THE


SECURITIES
EXCHANGE ACT OF 1934





[X]ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
fiscal year ended December 31, 2007





OR





[   ]   TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





Commission
File Number 001-12482





GLIMCHER
REALTY TRUST


(Exact
name of registrant as specified in its charter)




Maryland
              31-1390518(State
      or other jurisdiction of
              (I.R.S.
      Employerincorporation
      or organization)
              Identification
      No.)150
      East Gay Street
              43215Columbus,
      Ohio
              (Zip
      Code)(Address
      of principal executive offices)




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





Securities
registered pursuant to Section 12(b) of the Act:




Title
      of each class
              Name
      of each exchange on which registeredCommon
      Shares of Beneficial Interest, par value $0.01 per share
              New
      York Stock Exchange8
      3⁄4% Series F Cumulative Redeemable Preferred Shares of
      Beneficial
              New
      York Stock ExchangeInterest,
      par value $0.01 per share81⁄8% Series G Cumulative
      Redeemable Preferred Shares of Beneficial
              New
      York Stock ExchangeInterest,
      par value $0.01 per share




Securities
registered pursuant to Section 12(g) of the Act:  None





Indicate
by check mark if the Registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  Yes [_]  No
[X]





Indicated
by check mark if the Registrant is not required to file reports pursuant to
Section 12 or Section 15(d) of the Securities Exchange Act of
1934.  Yes
[_]  No [X]





Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  Yes  [X]  No
[_]





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [].





Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
One):Large
accelerated filer  [X] Accelerated filer
[_]   Non-accelerated filer [_]





Indicate
by check mark whether the Registrant is a shell company  (as defined
in Rule 12b-2 of the Exchange Act).  Yes  []  No
[X]





As of
February 21, 2008, there were 37,693,853 Common Shares of Beneficial Interest
outstanding, par value $0.01 per share.





The
aggregate market value of the voting stock held by non-affiliates of the
Registrant, based on the closing price of the Registrant’s Common Shares of
Beneficial Interest as quoted on the New York Stock Exchange on June 30, 2007,
was $902,165,275.





Documents
Incorporated By Reference





Portions
of the Glimcher Realty Trust Proxy Statement to be filed with the Securities and
Exchange Commission within 120 days after the end of the year covered by this
Form 10-K with respect to the Annual Meeting of Shareholders to be held on May
9, 2008 are incorporated by reference into Part III of this Report.





1




TABLE
OF CONTENTS




Item
      No.
              
              Form
      10-KReport
      PagePART
      I1.
              Business
              31A.
              Risk
      Factors
              61B.
              Unresolved
      Staff Comments
              132.
              Properties
              133.
              Legal
      Proceedings
              194.
              Submission
      of Matters to a Vote of Security Holders
              19PART
      II5.
              Market
      for Registrant’s Common Equity, Related Shareholder Matters and Issuer
      Purchases
      of Equity Securities
              206.
              Selected
      Financial Data
              207.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              227A.
              Quantitative
      and Qualitative Disclosures About Market Risk
              418.
              Financial
      Statements and Supplementary Data
              429.
              Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
              429A.
              Controls
      and Procedures
              429B.
              Other
      Information
              44PART
      III10.
              Trustees,
      Executive Officers and Corporate Governance
              4411.
              Executive
      Compensation
              4412.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Shareholder Matters
              4413.
              Certain
      Relationships and Related Transactions, and Trustee
      Independence
              4414.
              Principal
      Accountant Fees and Services
              44PART
      IV15.
              Exhibits
      and Financial Statement Schedules
              45Signatures
              52




2




PART
I.





This Form
10-K, together with other statements and information publicly disseminated by
Glimcher Realty Trust (“GRT,” the “Company” or the “Registrant”), contains
certain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended.  Such statements are based on assumptions and
expectations which may not be realized and are inherently subject to risks and
uncertainties, many of which cannot be predicted with accuracy and some of which
might not even be anticipated. Future events and actual results, financial and
otherwise, may differ from the results discussed in the forward-looking
statements.  Risks and other factors that might cause differences,
some of which could be material, include, but are not limited to: the effect of
economic and market conditions; the failure to achieve earnings and funds from
operations targets or estimates; the rate of revenue increases versus expense
increases; failure to increase mall store occupancy and same-mall operating
income; the failure to fully recover tenant obligations for common area
maintenance (“CAM”), taxes and other property expenses; the failure to complete
planned redevelopments of properties; construction and lease-up delays and cost
overruns; the failure of the Company to make additional investments in regional
mall properties and redevelopment of properties; the consummation of asset sales
at acceptable prices; the failure to sell properties as anticipated and the
failure to achieve estimated sales prices and proceeds from the sale of such
properties; the failure to complete proposed acquisitions; increases in and new
impairment charges; the financial stability of tenants within the retail
industry; tenant bankruptcies; rejection of leases by tenants in bankruptcy; the
failure to attract innovative retailers; material changes in the Company’s
dividend rates on its securities or ability to pay its dividend on its common
stock or other securities; the failure of joint venture relationships;
bankruptcies of joint venture partners; conflicts of interest with existing
joint venture partners; the failure to qualify as a REIT (as hereinafter
defined); the failure to consummate equity and debt financing, including the
repayment of debt; the level and volatility of interest rates; the failure to
realize anticipated benefits from the dividend adjustment, as well as other
risks listed from time to time in this Form 10-K and in GRT’s other reports
filed with the Securities and Exchange Commission (“SEC”).





Item
1.     Business





(a)           General
Development of Business





GRT,
Glimcher Properties Limited Partnership (the “Operating Partnership,” “OP” or
“GPLP”) and entities directly or indirectly owned or controlled by GRT, on a
consolidated basis, are hereinafter referred to as the “Company,” “we,” “us” or
“our.”





GRT is a
fully-integrated, self-administered and self-managed Maryland real estate
investment trust (“REIT”) which was formed on September 1, 1993 to continue the
business of The Glimcher Company (“TGC”) and its affiliates, of owning, leasing,
acquiring, developing and operating a portfolio of retail properties consisting
of regional and super regional malls and community shopping
centers.  Enclosed regional and super regional malls in which we hold
an ownership position (including joint venture interests) are referred to as
“Malls” and community shopping centers in which we hold an ownership position
are referred to as “Community Centers.”  The Malls and Community
Centers may from time to time be individually referred to herein as a “Property”
and collectively referred to herein as the “Properties.”  On January
26, 1994, GRT consummated an initial public offering (the “IPO”) of 18,198,000
of its common shares of beneficial interest (the “Common Shares”) including
2,373,750 over allotment option shares.  The net proceeds of the IPO
were used by GRT primarily to acquire (at the time of the IPO) an 86.2% interest
in the Operating Partnership, a Delaware limited partnership of which Glimcher
Properties Corporation (“GPC”), a Delaware corporation and a wholly owned
subsidiary of GRT, is sole general partner.  At December 31, 2007, GRT
held a 92.1% interest in the Operating Partnership.





The
Company does not engage or pay a REIT advisor.  Management, leasing,
accounting, legal, design and construction supervision expertise is provided
through its own personnel, or, where appropriate, through outside
professionals.





(b)           Narrative
Description of Business





General:  The
Company is a recognized leader in the ownership, management, acquisition and
development of regional and super-regional malls.  At December 31,
2007, the Properties consisted of 23 Malls (21 wholly-owned and 2 partially
owned through a joint venture) containing an aggregate of 20.6 million square
feet of gross leasable area (“GLA”) and 4 Community Centers containing an
aggregate of 1.0 million square feet of GLA.





3


For
purposes of computing occupancy statistics, anchors are defined as tenants whose
space is equal to or greater than 20,000 square feet of GLA. This definition is
consistent with the industry’s standard definition determined by the
International Council of Shopping Centers (“ICSC”).  All tenant spaces
less than 20,000 square feet and all outparcels are considered to be
non-anchor.  The Company computes occupancy on an economic basis,
which means only those spaces where the store is open or the tenant is paying
rent are considered as occupied.  The Company includes GLA in its
occupancy statistics for certain anchors and outparcels that are owned by third
parties.  Mall anchors, which are owned by third parties and are open
and/or are obligated to pay the Company charges, are considered occupied when
reporting occupancy statistics.  Community Center anchors owned by
third parties are excluded from the Company’s GLA.  These differences
in treatment between Malls and Community Centers are consistent with industry
practice.  Outparcels at both Community Center and Mall Properties are
included in GLA if the Company owns the land or building.  The
outparcels where a third party owns the land and buildings, but contributes
nominal ancillary charges are excluded from GLA.





As of
December 31, 2007, the occupancy rate for all of the Properties was 95.2% of
GLA.  The occupied GLA was leased at 83.5%, 9.3% and 7.2% to national,
regional and local retailers, respectively.  The Company’s focus is to
maintain high occupancy rates for the Properties by capitalizing on management’s
long-standing relationships with national and regional tenants and its extensive
experience in marketing to local retailers.





As of
December 31, 2007, the Properties had annualized minimum rents of $222.6
million.  Approximately 77.4%, 8.0% and 14.6% of the annualized
minimum rents of the Properties as of December 31, 2007 were derived from
national, regional, and local retailers, respectively.  No single
tenant represents more than 3.0% of the aggregate annualized minimum rents of
the Properties as of December 31, 2007.





Malls:  The
Malls provide a broad range of shopping alternatives to serve the needs of
customers in all market segments.  Each Mall is anchored by multiple
department stores such as Belk’s, The Bon-Ton, Boscov’s, Dillard’s,
Elder-Beerman, JCPenney, Kohl’s, Macy’s, Nordstrom, Saks, Sears, and Von
Maur.  Mall stores, most of which are national retailers, include
Abercrombie & Fitch, American Eagle Outfitters, Banana Republic, Barnes
& Noble, Bath & Body Works, The Disney Store, Finish Line, Foot Locker,
Gap, Hallmark, Kay Jewelers, The Limited, Express, New York & Company, Old
Navy, Pacific Sunwear, Radio Shack, Victoria’s Secret, Waldenbooks, and Zales
Jewelers.  To provide a complete shopping, dining and entertainment
experience, the Malls generally have at least one theme restaurant, a food court
which offers a variety of fast food alternatives, and, in certain Malls,
multiple screen movie theaters and other entertainment activities. The largest
operating Mall has 1.5 million square feet of GLA and approximately 188 stores,
while the smallest has 331,000 square feet of GLA and approximately 67 stores.
The Malls also have additional restaurants and retail businesses, such as P.F.
Chang’s, The Palm, Pier One and Red Lobster, located along the perimeter of the
parking areas.





As of
December 31, 2007, the Malls accounted for 95.5% of the total GLA, 96.0% of the
aggregate annualized minimum rents of the Properties and had an overall
occupancy rate of 95.6%.





Community
Centers:  The Company’s Community Centers are designed to
attract local and regional area customers and are typically anchored by a
combination of discount department stores or supermarkets which attract shoppers
to each center’s smaller shops.  The tenants at the Company’s
Community Centers typically offer day-to-day necessities and value-oriented
merchandise.  Community Center anchors include nationally recognized
retailers such as Best Buy, JCPenney and Kmart, and supermarkets such as
Kroger.  Many of the Community Centers have retail businesses or
restaurants located along the perimeter of the parking areas.





As of
December 31, 2007, Community Centers accounted for 4.5% of the total GLA, 4.0%
of the aggregate annualized minimum rents of the Properties and had an overall
occupancy rate of 87.7%.





Growth Strategies and
Operating Policies:  Management of the Company believes per
share growth in both net income and funds from operations (“FFO”) are important
factors in enhancing shareholder value.  The Company believes that the
presentation of FFO provides useful information to investors and a relevant
basis for comparison among REITs.  Specifically, the Company believes
that FFO is a supplemental measure of the Company’s operating performance as it
is a recognized standard in the real estate industry, in particular,
REITs.  The National Association of Real Estate Investment Trusts
(“NAREIT”) defines FFO as net income (loss) available to common shareholders
(computed in accordance with Generally Accepted Accounting Principles (“GAAP”)),
excluding gains or losses from sales of depreciable property, plus real estate
related depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures.  FFO does include impairment losses
for properties held for use and held-for-sale.  The Company’s FFO may
not be directly comparable to similarly titled measures reported by other
REITs.  FFO does not represent cash flow from operating activities in
accordance with GAAP and should not be considered as an alternative to net
income (determined in accordance with GAAP) as an indication of the Company’s
financial performance or to cash flow from operating activities (determined in
accordance with GAAP) as a measure of the Company’s liquidity, nor is it
indicative of funds available to fund the Company’s cash needs, including its
ability to make cash distributions.  A reconciliation of FFO to net
income available to common shareholders is provided in Item 7 of this Form
10-K.





4


GRT
intends to operate in a manner consistent with the requirements of the Internal
Revenue Code of 1986, as amended (the “Code”), applicable to REITs and related
regulations with respect to the composition of the Company’s portfolio and the
derivation of income unless, because of circumstances or changes in the Code (or
any related regulation), the trustees of GRT determine that it is no longer in
the best interests of GRT to qualify as a REIT.





The
Company’s growth strategy is to upgrade the quality of our portfolio of
assets.  We focus on selective acquisitions, redevelopment of our core
Mall assets and ground-up development in markets with high growth
potential.  Such strategy is focused on dominant anchored retail
properties within the top 100 metropolitan markets by population that have
near-term upside potential or offer advantageous opportunities for the
Company.





The
Company acquires and develops its Properties as long-term
investments.  Therefore, its focus is to provide for regular
maintenance of its Properties and to conduct periodic renovations and
refurbishments to preserve and increase Property values while also increasing
the retail sales prospects of its tenants.  The projects usually
include renovating existing facades, installing uniform signage, updating
interior decor, replacement of roofs and skylights, resurfacing parking lots and
increasing parking lot lighting.  To meet the needs of existing or new
tenants and changing consumer demands, the Company also reconfigures and expands
its Properties, including utilizing land available for expansion and development
of outparcels or the addition of new anchors.  In addition, the
Company works closely with its tenants to renovate their stores and enhance
their merchandising capabilities.





Financing
Strategies:  At December 31, 2007, the Company had a
total-debt-to-total-market-capitalization ratio of 66.2% based upon the closing
price of the Common Shares on the New York Stock Exchange (“NYSE”) as of
December 31, 2007.  The Company is working to maintain this ratio in
the mid-fifty percent range by managing outstanding debt and increasing the
value of its outstanding Common Shares. Even though our outstanding debt
decreased by $25 million during 2007, a sharp reduction in our Common Stock
price during December 2007 resulted in a ratio higher than our targeted level.
The Company expects that it may, from time to time, re-evaluate its policy with
respect to its ratio of total-debt-to-total-market capitalization in light of
then current economic conditions; relative costs of debt and equity capital;
market values of its Properties; acquisition, development and expansion
opportunities; and other factors, including meeting the taxable income
distribution requirement for REITs under the Code in the event the Company has
taxable income without receipt of cash sufficient to enable the Company to meet
such distribution requirements.  The Company’s preference is to obtain
fixed rate, long-term debt for its Properties.  At December 31, 2007,
85.2% of total Company debt was fixed rate.  Shorter term and variable
rate debt typically is employed for Properties anticipated to be expanded or
redeveloped.





Competition:   All
of the Properties are located in areas that have shopping centers and/or malls
and other retail facilities.  Generally, there are other retail
properties within a five-mile radius of a Property.  The amount of
rentable retail space in the vicinity of the Company’s Properties could have a
material adverse effect on the amount of rent charged by the Company and on the
Company’s ability to rent vacant space and/or renew leases of such
Properties.  There are numerous commercial developers, real estate
companies and major retailers that compete with the Company in seeking land for
development, properties for acquisition and tenants for properties, some of
which may have greater financial resources than the Company and more operating
or development experience than that of the Company.  There are
numerous shopping facilities that compete with the Company’s Properties in
attracting retailers to lease space.  In addition, retailers at the
Properties may face increasing competition from e-commerce, outlet malls,
discount shopping clubs, catalog companies, direct mail, telemarketing and home
shopping networks.





Employees:   At
December 31, 2007, the Company had an aggregate of 1,042 employees, of which 487
were part-time.





Seasonality:  The
shopping center industry is seasonal in nature, particularly in the fourth
quarter during the holiday season when retailer occupancy and retail sales are
typically at their highest levels.  In addition, shopping malls
achieve a substantial portion of their specialty (temporary retailer) rents
during the holiday season.





Tax
Status:   GRT believes it has been organized and operated
in a manner that qualifies for taxation as a REIT and intends to continue to be
taxed as a REIT under Sections 856 through 860 of the Code.  As such,
GRT generally will not be subject to federal income tax to the extent it
distributes at least 90.0% of its REIT ordinary taxable income to its
shareholders.  Additionally, the Company must satisfy certain
requirements regarding its organization, ownership and certain other conditions,
such as a requirement that its shares be transferable.  Moreover, the
Company must meet certain tests regarding its income and assets.  At
least 75.0% of the Company’s gross income must be derived from passive income
closely connected with real estate activities.  In addition, 95.0% of
the Company’s gross income must be derived from these same sources, plus
dividends, interest and certain capital gains. To meet the asset test, at the
close of each quarter of the taxable year, at least 75.0% of the value of the
total assets must be represented by real estate assets, cash and cash equivalent
items (including receivables), and government
securities.  Additionally, to qualify as a REIT, there are several
rules limiting the amount and type of securities that GRT can own, including the
requirement that not more than 25.0% of the value of its total assets can be
represented by securities.  If GRT fails to meet the requirements to
qualify for REIT status, the Company may cease to qualify as a REIT and may be
subject to certain penalty taxes.   If the Company fails to
qualify as a REIT in any taxable year, the Company will be subject to federal
income tax (including any applicable alternative minimum tax) on its taxable
income at regular corporate rates.  As a qualified REIT, the Company
is subject to certain state and local taxes on its income and property and to
federal income and excise taxes on its undistributed income.





5


(c)          Available
information





GRT files
this Form 10-K and other periodic reports and statements electronically with the
SEC.  The SEC maintains an Internet site that contains reports,
statements and proxy and information statements, and other information provided
by issuers at http://www.sec.gov.
GRT’s reports, including amendments, are also available free of charge on its
website, www.glimcher.com, as
soon as reasonably practicable after such reports are filed with the
SEC.  Information on this website is not considered part of this
filing.  GRT’s Corporate Governance Guidelines, Code of Business
Conduct and Ethics, Code of Ethics for Senior Financial Officers, Audit
Committee Charter, Amended and Restated Executive Compensation Committee
Charter, and Amended and Restated Nominating and Corporate Governance Committee
Charter are available on the Company’s website and copies of each are available
in print to any shareholder who requests them.





Item
1A.  Risk Factors





A number of factors affect our business
and the results of our operations, many of which are beyond our
control.  The following is a description of the most significant
factors that might cause the actual results of operations in future periods to
differ materially from those currently expected or desired.





We
are subject to risks inherent in owning real estate investments.




Real
property investments are subject to varying degrees of risk.  Our
ability to make dividend distributions, as well as the amount of any
distribution, may be adversely affected by the economic climate and certain
local conditions including:




●           oversupply
of space or reduced demand for rental space and newly developed
properties;




●           the
attractiveness of our properties compared to other retail space;




●           our
ability to provide adequate maintenance to our properties; and




●           fluctuations
in real estate taxes, insurance and other operating costs.




Applicable
laws, including tax laws, interest rate levels and the availability of
financing, may adversely affect our income and real estate values.  In
addition, real estate investments are relatively illiquid and, therefore, our
ability to sell our properties quickly may be limited.  We cannot be
sure that we will be able to lease space as tenants move out or as to the rents
we may be able to charge new tenants at such space.




Some
of our potential losses may not be covered by insurance.




We maintain commercial property
insurance on our consolidated real estate assets as well as those held in joint
ventures in which we have an investment interest.  In addition to
general liability, fire, and flood insurance, we also carry property insurance
for certain windstorm risks for our properties located in Florida. Even insured
losses could result in a serious disruption to our business and reduce and delay
our receipt of revenue.  Additionally, hurricane and store damage in
the state of Florida could exceed our windstorm coverage for our properties in
that state.  Lastly, there are some types of losses, including lease
and other contract claims, that generally are not insured.  If an
uninsured loss or a loss in excess of insured limits occurs, we could lose all
or a portion of the capital we have invested in a property or properties, as
well as the anticipated future revenue from the asset(s). If this happens, we
may still remain obligated for any mortgage debt or other financial obligations
related to the asset(s).




6




Our property insurance policies include
coverage for acts of terrorism by foreign or domestic agents.  The
United States government provides reinsurance coverage to insurance companies
following a declared terrorism event under the Terrorism Risk Insurance Program
Reauthorization Act (the “Act”) which extended the effectiveness of the
Terrorism Risk Insurance Extension Act of 2005.  The Act is designed
to cover losses from declared terrorism events that are equal to or exceed $100
million.  However, our premiums for terrorism insurance could continue
to rise despite the coverage of the Act.  Moreover, certain criminal
or terrorist-like acts that may be committed against our properties or real
estate assets may not constitute terrorist acts under the Act or may cause
losses that are less than the triggering amount for coverage under the
Act.





We
rely on major tenants.




At
December 31, 2007, our three largest tenants were Gap, Inc., Foot Locker, Inc.,
and Sterling, Inc., representing 3.0%, 2.1% and 1.9% of our annualized minimum
rents, respectively.  No other tenant represented more than 1.9% of
the aggregate annualized minimum rents of our properties as of such
date.  Our financial position and ability to make distributions may be
adversely affected by the bankruptcy, insolvency, or general downturn in the
business of any such tenant, or in the event any such tenant does not renew a
number of its leases as they expire.




Bankruptcy
of our tenants or downturns in our tenants’ businesses may reduce our cash
flow.




Since we
derive almost all of our income from rental payments, our cash available for
distribution would be adversely affected if a significant number of our tenants
were unable to meet their obligations to us, or if we were unable to lease
vacant space in our properties on economically favorable terms.  A
tenant may seek the protection of the bankruptcy laws, which could result in the
termination of its lease causing a reduction in our cash available for
distribution.  A downturn in a tenant’s business may result in a
reduction in the portion of rent based on a percentage of the tenant’s
sales.  Furthermore, certain of our tenants, including anchor tenants,
hold the right under their lease(s) to terminate their lease(s) or reduce their
rental rate if certain occupancy conditions are not met, if certain anchor
tenants close, if certain sales levels or profit margins are not achieved, or if
an exclusive use provision is violated.




We
face significant competition that may decrease the occupancy and rental rates of
our properties.




We
compete with many commercial developers, real estate companies and major
retailers.  Some of these entities develop or own malls,
value-oriented retail properties, and community shopping centers with whom we
compete for tenants.  We face competition for prime locations and for
tenants.  New regional malls or other retail shopping centers with
more convenient locations or better rents may attract tenants or cause them to
seek more favorable lease terms at or prior to renewal.  Retailers at
our properties may face increasing competition from other retailers, e-commerce,
outlet malls, discount shopping clubs, catalog companies, direct mail,
telemarketing and home shopping networks, all of which could affect their
ability to pay rent or desire to occupy the property.




The
failure to fully recover cost reimbursements for CAM, taxes and insurance from
tenants could adversely affect our operating results.




The
computation of cost reimbursements from tenants for CAM, insurance and real
estate taxes is complex and involves numerous judgments including interpretation
of terms and other tenant lease provisions. Most tenants make monthly fixed
payments of CAM, real estate taxes and other cost reimbursement items. After the
end of the calendar year, we compute each tenant’s final cost reimbursements and
issue a bill or credit for the full amount, after considering amounts paid by
the tenants during the year. The billed amounts could be disputed by the
tenant(s) or become the subject of a tenant audit.  Final adjustments
for the year ended December 31, 2007 have not yet been determined. At December
31, 2007, we had recorded in accounts receivables $3.3 million of costs expected
to be recovered from tenants during the first six months of 2008. There can be
no assurance that we will collect all or substantially all of this entire
amount.








7




The
results of operations for our properties depend on the economic conditions of
the regions of the United States in which they are located.




Our
results of operations and distributions to you will generally be subject to
economic conditions in the regions in which our properties are
located.  For the year ended December 31, 2007, approximately 33% of
annualized minimum rents came from our properties located in Ohio.




We
may be unable to successfully redevelop, develop or operate such
properties.




As a
result of economic and other conditions and required government approvals,
development projects may not be pursued or may be completed later or with higher
costs than anticipated.  Development activities involve significant
risks, including:




·         the
expenditure of funds on and devotion of time to projects which may not come to
fruition;




·         increased
construction costs, possibly making the project uneconomical;




·         an
inability to obtain construction financing and permanent financing on favorable
terms; and




·         occupancy
rates and rents not sufficient to make a project profitable.




In the
event of an unsuccessful development project, our loss could exceed our
investment in the project.




We
could incur significant costs related to environmental issues.




Under
some environmental laws, a current or previous owner or operator of real
property, and parties that generate or transport hazardous substances that are
disposed of on real property, may be liable for the costs of investigating and
remediating these substances on or under the property.  In connection
with the ownership or operation of our properties, we could be liable for such
costs, which could be substantial and even exceed the value of such property or
the value of our aggregate assets.  We could incur such costs or be
liable for such costs during a period after we dispose of or transfer a
property.  The failure to remediate toxic substances may adversely
affect our ability to sell or rent any of our properties or to borrow
funds.  In addition, environmental laws may require us to expend
substantial sums in order to use our properties or operate our
business.




We have
established a contingency reserve for one environmental matter as noted in Note
14 of our consolidated financial statements.




Our
assets may be subject to impairment charges that may materially affect our
financial results.




We
evaluate our real estate assets and other assets for impairment indicators
whenever events or changes in circumstances indicate that recoverability of our
investment in the asset is not assured.  This evaluation is conducted
periodically, but no less frequently than quarterly.  Our
determination of whether a particular held-for-use asset is impaired is based
upon the undiscounted projected cash flows used for the impairment analysis and
our determination of the asset’s estimated fair value, that in turn are based
upon our plans for the respective asset and our views of market and economic
conditions.  With respect to assets held-for-sale, our determination
of whether such an asset is impaired is based upon market and economic
conditions.  If we determine that a significant impairment has
occurred, then we would be required to make an adjustment to the net carrying
value of the asset, which could have a material adverse effect on our results of
operations and funds from operations in the accounting period in which the
adjustment is made.  Furthermore, changes in estimated future cash
flows due to a change in our plans or views of market and economic conditions
could result in the recognition of additional impairment losses for already
impaired assets, which, under the applicable accounting guidance, could be
substantial.




We
may incur significant costs of complying with the Americans with Disabilities
Act and similar laws.




We may be
required to expend significant sums of money to comply with the Americans with
Disabilities Act of 1990, as amended (“ADA”), and other federal and local laws
in order for our properties to meet requirements related to access and use by
disabled persons.




8


Our
failure to qualify as a REIT would have serious adverse
consequences.




GRT
believes that it has qualified as a REIT under the Code since 1994, but cannot
be sure that it will remain so qualified.  Qualification as a REIT
involves the application of highly technical and complex Code provisions, and
the determination of various factual matters and circumstances not entirely
within GRT’s control that may impact GRT’s ability to qualify as a REIT under
the Code.  In addition, GRT cannot be sure that new laws, regulations
and judicial decisions will not significantly change the tax laws relating to
REITs, or the federal income tax consequences of REIT
qualification.




If GRT
fails to qualify as a REIT, it will be subject to federal income tax (including
any applicable alternative minimum tax) on taxable income at regular corporate
income tax rates.  Additionally, unless entitled to relief under
certain statutory provisions, GRT will also be disqualified from electing to be
treated as a REIT for the four taxable years following the year during which the
qualification is lost, thereby reducing net earnings available for investment or
distribution to you because of the additional tax liability imposed for the year
or years involved.  Lastly, GRT would no longer be required by the
Code to make any dividend distributions as a condition to REIT
qualification.  To the extent that dividend distributions to you may
have been made in anticipation of qualifying as a REIT, we might be required to
borrow funds or to liquidate certain of our investments to pay the applicable
tax.




Our
ownership interests in certain partnerships and other ventures are subject to
certain tax risks.




Some of
our property interests and other investments are made or held through entities
in which we have an interest (the “Subsidiary Partnerships”).  The tax
risks of this type of ownership include possible challenge by the Internal
Revenue Service of allocations of income and expense items which could affect
the computation of our taxable income, a challenge to the status of any such
entities as partnerships (as opposed to associations taxable as corporations)
for federal income tax purposes, and the possibility of action being taken by
such entities that could adversely affect GRT’s qualification as a REIT, for
example, by requiring the sale of a property.  We believe that the
entities in which we have an interest have been and will be treated for tax
purposes as partnerships (and not treated as associations taxable as
corporations).  If our ownership interest in any entity taxable as a
corporation exceeded 10% (in terms of vote or value) of such entity’s
outstanding securities (unless such entity were a “taxable REIT subsidiary,” or
a “qualified REIT subsidiary,” as those terms are defined in the Code) or the
value of interest in any such entity exceeded 5% of the value of our assets,
then GRT would cease to qualify as a REIT; distributions from any of these
entities would be treated as dividends, to the extent of earnings and profits,
and we would not be able to deduct our share of losses, if any, generated by
such entity in computing our taxable income.




We
may not have access to other sources of funds necessary to meet our REIT
distribution requirements.




In order
to qualify to be taxed as a REIT, we must make annual distributions to our
shareholders of at least 90% of our taxable income (determined by excluding any
net capital gain).  The amount available for distribution will be
affected by a number of factors, including the operation of our
properties.  We have sold a number of non-core assets and intend in
the future to sell additional selected non-core assets.  The loss of
rental income associated with our properties sold will in turn affect net income
and FFO.  In order to maintain REIT status, we may be required to make
distributions in excess of net income and FFO.  In such a case, it may
be necessary to arrange for short or long term borrowings, or to issue preferred
stock or other securities, to raise funds, which may not be
possible.




Debt
financing could adversely affect our performance.




As of
December 31, 2007, we had $1.6 billion of combined mortgage indebtedness and
outstanding borrowings under our credit facility, of which $118.6 million
matures during 2008.  As of December 31, 2007, we have borrowed $300.0
million from our credit facility, which matures on December 13,
2009.  A number of our outstanding loans will require lump sum or
“balloon” payments for the outstanding principal balance at maturity, and we may
finance future investments that may be structured in the same
manner.  Our ability to repay indebtedness at maturity, or otherwise,
may depend on our ability to either refinance such indebtedness or to sell our
properties.  Additionally, our ability to repay any indebtedness
accelerated upon any default may adversely affect our ability to obtain debt
financing for such properties or to own such properties. If we are unable to
repay any of our debt at or before maturity, then we may have to borrow against
our properties that are not encumbered or from our credit facility, to the
extent it has availability thereunder, to make such repayments.  In
addition, a lender could foreclose on one or more of our properties to collect
its debt.  This could cause us to lose part or all of our investment,
which could reduce the value of the Common Shares and the distributions payable
to you.




9


Certain
of our financing arrangements contain limitations on the amount of debt that we
may incur.





Our $470
million unsecured credit facility is the most restrictive of our financing
arrangements.  Accordingly, at December 31, 2007, the additional
amount that may be borrowed based upon the restrictive covenants in the credit
facility is $301.4 million.  Additional amounts could be borrowed as
long as we maintain a ratio of total-debt-to-total-asset value that complies
with the restrictive covenants of the credit facility.  We would also
be required to maintain certain coverage covenants on a prospective basis which
could impact our ability to borrow these additional amounts.  The
ratio of total-debt-to-total-market capitalization was 66.2% as of December 31,
2007.  As used herein, “total market capitalization” means the sum of
the outstanding amount of all indebtedness, the value of our preferred shares
and the total market value of the outstanding Common Shares and the units of
operating partnership interest in GPLP (“OP Units”) (based on the closing price
of the Common Shares on December 31, 2007).





Our
financial condition and distributions could be adversely affected by financial
covenants.





Our
mortgage indebtedness and credit facility impose certain financial and operating
restrictions on our properties, on our secured subordinated financing, and
additional financings on properties.  These restrictions include
restrictions on borrowings, prepayments and
distributions.  Additionally, our credit facility requires certain
financial tests to be met and some of our mortgage indebtedness provides for
prepayment penalties, each of which could restrict our financial
flexibility.





Our
variable rate debt obligations may impede our operating performance and put us
at a competitive disadvantage, as well as adversely affect our ability to pay
distributions to you.





Required
repayments of debt and related interest can adversely affect our operating
performance.  As of December 31, 2007, approximately $230.0 million of
our indebtedness bears interest at a variable rate.  Accordingly, an
increase in interest rates on our existing indebtedness would increase interest
expense, which could adversely affect our cash flow and ability to pay
distributions as well as the amount of any distributions.  For
example, if market rates of interest on our variable rate debt outstanding as of
December 31, 2007 increased by 100 basis points, the increase in interest
expense on our existing variable rate debt would decrease future earnings and
cash flows by approximately $2.3 million annually.





An
increase in interest rates or our total-debt-to-total-market capitalization
could cause a decrease in the market price of our outstanding Common
Shares.





We
believe that investors generally perceive REITs as yield-driven investments and
compare the annual yield from distributions by REITs with yields on various
other types of financial instruments. Thus, an increase in market interest rates
generally could adversely affect the market price of Common
Shares.  Additionally, investors may react negatively to an increase
in our total-debt-to-total-market capitalization.





The
Board of Trustees has unlimited authority to increase the amount of debt that we
may incur.





The Board
of Trustees (the “Board”) determines financing objectives and the amount of the
indebtedness that we may incur and may make revisions to these objectives at any
time without a vote of our shareholders.  Although the Board has no
present intention to change these objectives, revisions could result in a more
highly leveraged company with an increased risk of default on indebtedness, an
increase in debt service charges, and the addition of new financial covenants
that restrict our business.





Our
issuance of additional common or preferred Shares may affect prevailing market
prices for our outstanding common share or preferred shares.





Future
sales or the anticipation of such sales of additional common or preferred shares
may have an adverse effect on the market price of our common shares or preferred
shares.




The
market value, or trading price, of our preferred and Common Stock could decrease
based upon uncertainty in the marketplace and market perception.




The market value, or trading price, of
our preferred stock and Common Stock may be based primarily upon the market’s
perception of our operational as well as financial growth potential and current
and future cash dividends or distributions, and may be secondarily based upon
the real estate market value of our underlying assets. The market value, or
trading price, of our preferred stock and Common Stock is also influenced by
their respective dividends relative to prevailing market interest
rates.  Uncertainty with respect to interest rate volatility may cause
uncertainty in the market value, or trading price, of our preferred stock and
Common Stock which could cause the value or price of our stock to decrease
thereby affecting the value of your investment.




10


Our
ability to operate or dispose of any partially-owned properties that we may
acquire may be restricted.





Our
ownership of properties through partnership or joint venture investments may
involve risks not otherwise present for wholly-owned properties. These risks
include the possibility that our partners or co-venturers might become bankrupt,
might have economic or other business interests or goals which are inconsistent
with our business interests or goals and may be in a position to take action
contrary to our instructions or make requests contrary to our policies or
objectives, including our policy to maintain our qualification as a REIT. We may
need the consent of our partners for major decisions affecting properties that
are partially-owned. Joint venture agreements may also contain provisions that
could cause us to sell all or a portion of our interest in, or buy all or a
portion of  our partners’ interests in, such entity or property. These
provisions may be triggered at a time when it is not advantageous for us to
either buy our partners’ interests or sell our interest. Additionally, if we
serve as the managing member of a property-owning joint venture, we may have
certain fiduciary responsibilities to the other participants in such entity.
There is no limitation under our organizational documents as to the amount of
funds that may be invested in partnerships or joint ventures; however, covenants
of our unsecured credit facility limit the amount of capital that we may invest
in joint ventures at any one time.





We
are subject to certain conflicts of interest and limitations on property
sales.





Pursuant
to GPLP’s limited partnership agreement, GPLP may not sell all or substantially
all of its assets without the consent of the holders of a majority of the OP
Units, excluding GRT, if limited partners (other than GRT) at the time of the
sale own in the aggregate 10% or greater of the outstanding OP
Units.  At the present time, GRT owns 92.1% of the outstanding OP
Units, resulting in the consent not being required.  However, should
limited partners (excluding GRT) own 10% or greater of the outstanding OP Units
in the future,  the majority vote requirement would effectively mean
that Herbert Glimcher, the Chairman Emeritus of the GRT Board, and his sons,
Michael Glimcher, the Chairman of the Board and Chief Executive Officer of GRT,
and David Glimcher must approve any such transaction because, together with
their spouses, they own approximately 4.8% of the OP Units (which constitutes a
majority of the OP Units other than those owned by GRT) outstanding as of
December 31, 2007.





As a
result of Herbert Glimcher’s, Michael Glimcher’s, and David Glimcher’s status as
holders of both Common Shares and OP Units, they have interests that potentially
could conflict with GRT shareholders with respect to business decisions
affecting GRT and GPLP.  In particular, as holders of OP Units, they
may suffer different and/or more adverse tax consequences than GRT upon the sale
or refinancing of some of our properties due to unrealized gains attributable to
these properties.  Therefore, GRT may have objectives different from
Herbert Glimcher, Michael Glimcher, and David Glimcher regarding the appropriate
pricing and timing of any sale or refinancing of certain of our
properties.  Although GRT (through a wholly owned subsidiary), as the
sole general partner of GPLP, has the exclusive authority as to whether and on
what terms to sell, refinance, or seek to purchase an interest in an individual
property, Herbert Glimcher, Michael Glimcher and David Glimcher, might seek to
influence decisions with respect to these actions, even though those actions
might otherwise be financially advantageous or adverse to GRT.  They
also may seek to influence management to refinance one or more of our properties
with a higher level of debt than would be in GRT’s best interests.





Our
charter and bylaws and the laws of the state of our incorporation contain
provisions that may delay, defer or prevent a change in control or other
transactions that could provide shareholders with the opportunity to realize a
premium over the then-prevailing market price for our Common
Shares.





In order
to maintain GRT’s qualification as a REIT for federal income tax purposes, not
more than 50% in value of the outstanding Common Shares may be owned, directly
or indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) at any time during the last half of the taxable
year.  Additionally, 100 or more persons must beneficially own the
outstanding Common Shares during the last 335 days of a taxable year of 12
months or during a proportionate part of a shorter tax year.





To ensure
that GRT will not fail to qualify as a REIT under this test, GRT’s
organizational documents authorize the Board to take such action as may be
required to preserve GRT’s qualification as a REIT and to limit any person,
other than Herbert Glimcher, David Glimcher (only with respect to the limitation
on the ownership of outstanding Common Shares) and any entities or persons
approved by the Board, to direct or indirect ownership exceeding (i) 8.0% of the
lesser of the number or value of GRT’s outstanding shares of beneficial interest
(including common & preferred shares), (ii) 9.9% of the lesser of the number
or value of the total 83⁄4% Series F Cumulative Redeemable Preferred Shares of
Beneficial Interest (“Series F Preferred Shares”) outstanding, and (iii) 9.9% of
the lesser of the number or value of the total 81⁄8% Series G Cumulative
Redeemable Preferred Shares of Beneficial Interest  (“Series G
Preferred Shares”) outstanding.  Herbert Glimcher and David Glimcher
are limited to an aggregate of 25% direct or indirect ownership of Common Shares
outstanding without approval of the Board.  The Board has also granted
an exemption to Cohen & Steers Capital Management, Inc., permitting them to
own, directly or indirectly, of record or beneficially (i) up to 600,000 Series
F Preferred Shares and (ii) up to 14.9% of the lesser of the number or value of
the outstanding shares of any other class of the GRT’s equity
securities.  The Board has also granted an exemption to Neuberger
Berman permitting them to own 608,800 Series G Preferred
Shares.  Despite these provisions, GRT cannot be sure that there will
not be five or fewer individuals who will own more than 50% in value of its
outstanding Common Shares, thereby causing GRT to fail to qualify as a
REIT.  The ownership limits may also discourage a change in control in
GRT.





11


The
members of the Board are currently divided into three equal classes whose terms
expire in 2008, 2009 and 2010, respectively. Each year one class of trustees is
elected by GRT’s shareholders to hold office for three years.  The
staggered terms for Board members may affect the ability of GRT shareholders to
change control of GRT even if a change in control were in the interests of the
shareholders.





GRT’s
Amended and Restated Declaration of Trust, as amended (the “Declaration of
Trust”) authorizes the Board to establish one or more series of preferred
shares, in addition to those currently outstanding, and to determine the
preferences, rights and other terms of any series.  The Board could
authorize GRT to issue other series of preferred shares that could deter or
impede a merger, tender offer or other transaction that some, or a majority, of
GRT shareholders might believe to be in their best interest or in which GRT
shareholders might receive a premium for their shares over the prevailing market
price of such shares.





On March
9, 1999, GRT adopted a shareholder rights plan. Under the terms of the rights
plan, the Board can in effect prevent a person or group from acquiring more than
15% of the outstanding Common Shares. Unless the Board approves of such person’s
purchase, after that person acquires more than 15% of the outstanding Common
Shares, all other shareholders will have the right to purchase Common Shares
from GRT at a price that is half of their then fair market value. These
purchases by the other shareholders would substantially reduce the value and
influence of the Common Shares owned by the acquiring person. The Board,
however, can prevent the rights plan from operating in this manner. This gives
the Board significant discretion to approve or disapprove of a person’s efforts
to acquire a large interest in GRT and, accordingly, may discourage a change in
control of GRT.





The
Declaration of Trust and Amended and Restated Bylaws also contain other
provisions that may delay or prevent a transaction or a change in control that
might involve a premium price for the Common Shares or otherwise be in the best
interests of GRT’s shareholders. As a Maryland REIT, GRT is subject to the
provisions of the Maryland REIT law which imposes restrictions on some business
combinations and requires compliance with statutory procedures before some
mergers and acquisitions can occur, thus delaying or preventing offers to
acquire GRT or increasing the difficulty of completing an acquisition of GRT,
even if the acquisition is in the best interests of GRT’s
shareholders.





Risks
associated with information systems may interfere with our
operations.





We are
continuing to implement new information systems and problems with the design or
implementation of these new systems could interfere with our
operations.





Our
operations could be affected if we lose any key management
personnel.





Our
executive officers have substantial experience in owning, operating, managing,
acquiring and developing shopping centers.  Success depends in large
part upon the efforts of these executives, and we cannot guarantee that they
will remain with us.  The loss of key management personnel in leasing,
finance, legal, construction, development, or operations could have a negative
impact on our operations.  In addition, except for isolated examples,
there are generally no restrictions on the ability of these executives to
compete with us after termination of their employment.











12





Inflation
may influence our operations.





Inflation
risks could impact our operations due to increases in construction costs as well
as other costs pertinent to our business, including, but not limited to, the
cost of insurance and utilities.





Item
1B.  Unresolved Staff Comments





The
Company has received no written comments regarding its periodic or current
reports from the staff of the SEC that were issued 180 days or more preceding
the end of its 2007 fiscal year and that remain unresolved.








Item
2.   Properties





The
Company’s headquarters are currently located at 150 East Gay Street, Columbus,
Ohio 43215, and its telephone number is (614) 621-9000.  In addition,
the Company maintains management offices at each of its Malls.  On
March 3, 2008, the Company is relocating its headquarters to 180 East Broad
Street, Columbus, Ohio 43215.





At
December 31, 2007, the Company managed and leased a total of 27 Properties of
which the Company had an ownership interest (25 wholly-owned and 2 partially
owned through a joint venture).  The Properties are located in 14
states as follows:  Ohio (10), West Virginia (3), California (2),
Florida (2), North Carolina (1), Pennsylvania (1), Kansas (1), Kentucky (1),
Minnesota (1), New Jersey (1), Oklahoma (1), Oregon (1), Tennessee (1), and
Washington (1).





(a)           Malls





Twenty-three
of the Properties are Malls and range in size from 331,000 square feet of GLA to
1.5 million square feet of GLA.  Seven of the Malls are located in
Ohio and 16 are located throughout the country in the states of West Virginia
(2), California (2), Florida (2), North Carolina (1), Pennsylvania (1), Kansas
(1), Kentucky (1), Minnesota (1), New Jersey (1), Oklahoma (1), Oregon (1),
Tennessee (1), and Washington (1).  The location, general character,
and anchor tenant information are set forth below:





Summary of Malls at December
31, 2007




%
      of
              %
      of
              Store
              
              LeaseAnchors
              Stores
              Total
              Anchors
              Stores
              Sales
      Per
              
              ExpirationProperty/Location
              GLA
              GLA
      (1)
              GLA
              Occupied
              Occupied
              Square
      Ft.(2)
              Anchors
              (3)
  Ashland
      Town CenterAshland,
      KY
              153,214
              
              177,796
              
              331,010
              
              100.0
              
              94.6
              
              $357
              
              Belk
              01/31/10Goody's
              03/31/09JCPenney
              10/31/09Colonial
      Park MallHarrisburg,
      PA
              504,446
              
              239,222
              
              743,668
              
              100.0
              
              97.7
              
              $287
              
              The
      Bon-Ton
              01/31/15Boscov's
              (4)Sears
              (4)Dayton
      Mall, TheDayton,
      OH
              935,130
              
              482,771
              
              1,417,901
              
              100.0
              
              92.3
              
              $337
              
              Borders
      Books & Music
              12/31/21DSW
      Shoe Warehouse
              07/31/10Elder-Beerman
              (4)JCPenney
              03/31/11Linens'N
      Things
              01/31/17Macy's
              (4)Old
      Navy
              07/31/10Sears
              (4)
  13
 
  %
      of
                    %
      of
                    Store
                    
                    LeaseAnchors
                    Stores
                    Total
                    Anchors
                    Stores
                    Sales
      Per
                    
                    ExpirationProperty/Location
                    GLA
                    GLA
      (1)
                    GLA
                    Occupied
                    Occupied
                    Square
      Ft.(2)
                    Anchors
                    (3)
 Eastland
      Mall("Eastland
      North Carolina")Charlotte,
      NC (10)
              725,720
              
              335,061
              
              1,060,781
              
              96.4
              
              81.4
              
              $232
              
              Belk
              (4)Burlington
      Coat Factory
              (7)Dillard's
              (4)Eastland-Fields
      LLC
              (7)Sears
              (4)Eastland
      Mall("Eastland
      Ohio")Columbus,
      OH
              504,092
              
              281,921
              
              786,013
              
              100.0
              
              87.1
              
              $280
              
              JCPenney
      (5)
              01/31/13Macy's
              (4)Sears
              (4)Grand
      Central MallParkersburg,
      WV
              531,788
              
              377,862
              
              909,650
              
              100.0
              
              94.7
              
              $293
              
              Belk
              03/31/18Elder-Beerman
      (5)
              01/31/33JCPenney
              09/30/12Regal
      Cinemas
              01/31/17Sears
              09/25/12Steve
      & Barry's
              01/31/11Great
      Mall of the GreatPlains,
      The (10)Olathe,
      KS
              397,947
              
              384,552
              
              782,499
              
              82.1
              
              81.4
              
              $172
              
              Burlington
      Coat Factory
              01/31/13Dickinson
      Theatres
              03/31/12Famous
      Labels
              05/31/14Foozles
              01/31/09Group
      USA
              08/13/12Steve
      & Barry's
              01/31/13VF
      Factory Outlet
              01/10/11Zonkers
              04/30/09Indian
      Mound MallHeath,
      OH
              389,589
              
              167,820
              
              557,409
              
              100.0
              
              84.4
              
              $238
              
              Crown
      Cinema
              12/31/12Elder-Beerman
              01/31/09Goody's
              05/31/08JCPenney
              10/31/11Sears
      (5)
              09/23/27Steve
      & Barry's
              01/31/11Jersey
      GardensElizabeth,
      NJ
              648,965
              
              646,564
              
              1,295,529
              
              100.0
              
              100.0
              
              $506
              
              Bed
      Bath & Beyond
              01/31/10Burlington
      Coat Factory
              01/31/10Cohoes
      Fashions
              01/31/10Daffy's
              01/31/10DSW
      Shoe Warehouse/ Filene's Basement
              10/31/11Gap
      Outlet, The
              01/31/10Group
      USA
              12/31/08Jeepers!
              01/31/10Last
      Call
              11/30/09Loew's
      Theaters
              12/31/20Marshalls
              10/31/09Modell's
      Sporting Goods
              01/31/17Nike
      Factory Store
              11/30/11Off
      5th Saks Fifth Ave Outlet
              10/31/14Old
      Navy
              05/31/10
  14
 %
      of
                  %
      of
                  Store
                  
                  LeaseAnchors
                  Stores
                  Total
                  Anchors
                  Stores
                  Sales
      Per
                  
                  ExpirationProperty/Location
                  GLA
                  GLA
      (1)
                  GLA
                  Occupied
                  Occupied
                  Square
      Ft.(2)
                  Anchors
                  (3)
 Lloyd
      CenterPortland,
      OR
              738,444
              
              733,930
              
              1,472,374
              
              93.8
              
              95.6
              
              $417
              
              Barnes
      & Noble
              01/31/12Lloyd
      Ctr Ice Rink (6)
              12/31/13Lloyd
      Mall Cinemas
              01/31/12Macy's
              01/31/11Marshalls
              01/31/09Nordstrom
              (4)Ross
      Dress for Less
              01/31/15Sears
              (4)Mall
      at FairfieldCommons,
      TheBeavercreek,
      OH
              768,284
              
              369,864
              
              1,138,148
              
              100.0
              
              95.3
              
              $350
              
              Dick's
      Sporting Good's
              01/31/21Elder
      Beerman-For Her
              01/31/14Elder-Beerman-Home
      Store
              01/31/15JCPenney
              10/31/13Macy's
      (5)
              01/31/15Sears
              10/26/13Mall
      at JohnsonCity,
      TheJohnson
      City, TN
              379,605
              
              167,791
              
              547,396
              
              100.0
              
              97.3
              
              $442
              
              Belk
      for Her
              10/31/12Belk
      Home Store
              06/30/11Dick's
      Sporting Goods
              01/31/18Goody's
              01/31/08JCPenney
              03/31/10Sears
      (5)
              03/09/11Merritt
      Square (12)Merritt
      Island, FL
              563,512
              
              309,143
              
              872,655
              
              100.0
              
              81.5
              
              $319
              
              Cobb
      Theatres
              05/31/24Dillard's
              (4)JCPenney
              07/31/10Macy's
              (4)Sears
              (4)Steve
      & Barry's
              01/31/13Morgantown
      MallMorgantown,
      WV
              396,361
              
              161,720
              
              558,081
              
              100.0
              
              92.9
              
              $325
              
              Belk
              03/15/11Carmike
      Cinemas
              10/31/24Elder-Beerman
              01/29/11JCPenney
              09/30/10Sears
              09/30/10Steve
      & Barry's
              01/31/13New
      Towne MallNew
      Philadelphia, OH
              361,501
              
              152,103
              
              513,604
              
              100.0
              
              98.4
              
              $255
              
              Elder-Beerman
              01/31/14JCPenney
              09/30/13Kohl's
              01/31/27Regal
      Cinemas
              03/31/12Sears
              10/31/13Steve
      & Barry's
              01/31/14Super
      Fitness Center
              02/28/14Northtown
      MallBlaine,
      MN
              418,528
              
              258,483
              
              677,011
              
              68.8
              
              93.2
              
              $385
              
              Best
      Buy
              01/31/10Burlington
      Coat Factory
              09/30/10Home
      Depot
              01/31/27Steve
      & Barry's
              01/31/11
  15
 %
      of
                  %
      of
                  Store
                  
                  LeaseAnchors
                  Stores
                  Total
                  Anchors
                  Stores
                  Sales
      Per
                  
                  ExpirationProperty/Location
                  GLA
                  GLA
      (1)
                  GLA
                  Occupied
                  Occupied
                  Square
      Ft.(2)
                  Anchors
                  (3)
 Polaris
      Fashion PlaceColumbus,
      OH
              888,075
              
              522,085
              
              1,410,160
              
              100.0
              
              99.5
              
              $406
              
              Great
      Indoors, The
              (4)JCPenney
              (4)Macy's
              (4)Saks
      Fifth Avenue
              (4)Sears
              (4)Von
      Maur
              (4)River
      Valley MallLancaster,
      OH
              316,947
              
              260,520
              
              577,467
              
              84.2
              
              93.0
              
              $289
              
              Elder-Beerman
              02/02/13JCPenney
              09/30/12Regal
      Cinemas
              12/31/11Sears
              10/31/09Steve
      & Barry's
              01/31/11SuperMall
      of the Great NorthwestAuburn,
      WA
              541,669
              
              401,604
              
              943,273
              
              100.0
              
              89.3
              
              $260
              
              Bed
      Bath & Beyond
              01/31/18Burlington
      Coat Factory
              01/31/11Gart
      Sports
              01/31/11Marshalls
              01/31/11Nordstrom
              08/31/10Old
      Navy
              01/31/11Sam's
      Club
              05/31/19Steve
      & Barry's
              01/31/14Vision
      Quest
              11/30/18Weberstown
      MallStockton,
      CA
              602,817
              
              255,923
              
              858,740
              
              100.0
              
              94.4
              
              $426
              
              Barnes
      & Noble
              01/31/09Dillard's
              (4)JCPenney
              03/31/09Sears
              (4)WestShore
      Plaza MallTampa,
      FL
              769,878
              
              291,988
              
              1,061,866
              
              100.0
              
              97.3
              
              $452
              
              AMC
      Theatres
              01/31/21JCPenney
              09/30/12Macy's
              (4)Old
      Navy
              01/31/11Saks
      Fifth Avenue
              11/30/18Sears
              09/30/17Subtotal
              11,536,512
              
              6,978,723
              
              18,515,235
              
              97.2%
              
              92.9
              
              $357Malls
      owned in a joint venturePuente
      Hills Mall (9)City
      of Industry, CA
              731,210
              
              456,398
              
              1,187,608
              
              95.9
              
              93.7
              
              $249
              
              AMC
      20 Theaters
              04/30/17Burlington
      Coat Factory
              10/31/08Circuit
      City
              01/31/19Linens
      `N Things
              01/31/14Macy's
              (4)Ross
      Dress for Less
              01/31/10Sears
              (4)Spectrum
      Club
              01/31/14Steve
      & Barry's
              01/31/15
  16
 %
      of
                  %
      of
                  Store
                  
                  LeaseAnchors
                  Stores
                  Total
                  Anchors
                  Stores
                  Sales
      Per
                  
                  ExpirationProperty/Location
                  GLA
                  GLA
      (1)
                  GLA
                  Occupied
                  Occupied
                  Square
      Ft.(2)
                  Anchors
                  (3)
 Tulsa
      Promenade (9)Tulsa,
      OK
              690,235
              
              236,071
              
              926,306
              
              100.0
              
              84.5
              
              $316
              
              Dillard's
              (4)Hollywood
      Theaters
              01/31/19JCPenney
              03/31/11Macy's
              (4)MDS
      Realty II, LLC
              (8)
      (11)Subtotal
              1,421,445
              
              692,469
              
              2,113,914
              
              97.9%
              
              90.6%
              
              $281Total
              12,957,957
              
              7,671,192
              
              20,629,149
              
              97.3%
              
              92.7%
              
              $351






(1)
            Includes
      outparcels.(2)
            Average
      2007 store sales per square foot for in-line stores of less than 10,000
      square feet.


(3)
            Lease
      expiration dates do not contemplate or include options to
      renew.


(4)
            The
      tenant owns the land and the building and operates under an operating
      agreement.


(5)
            This
      is a ground lease by the Company to the tenant.  The Company
      owns the land and not the building.


(6)
            Managed
      by Ohio Entertainment Corporation, a wholly-owned subsidiary of Glimcher
      Development Corporation., which is a wholly-owned subsidiary of
      GPLP.


(7)
            Building
      owned by third party, space partially occupied at
  year-end.


(8)
            Tenant
      vacated the store, but continues to pay through the expiration
      date.


(9)
            The
      Operating Partnership has an investment in this Mall of
      52%.  The Company is responsible for management and leasing
      services and receives fees for providing these
services.(10)
            Property
      was classified as held-for-sale as of December 31,
2007.(11)
            The
      tenant owns the land and the building and is subject to the Mervyn’s
      operating agreement.(12)
            Property
      acquired in the 4th
      quarter of 2007.














(b)
            Community
      Centers





Four of
the Properties are Community Centers ranging in size from approximately 87,000
to 443,000 square feet of GLA.  They are located in 2 states as
follows: Ohio (3), and West Virginia (1).  The location, general
character and anchor tenant information are set forth below.








17




Summary of Community Centers
at December 31, 2007


%
      of
                %
      of
                
                LeaseAnchors
                Stores
                Total
                Anchors
                Stores
                
                ExpirationProperty/Location
                GLA
                GLA
      (1)
                GLA
                Occupied
                Occupied
                Anchors
                (2)




Knox
      Village SquareMount
      Vernon, OH (3)
              173,009
              
              34,400
              
              207,409
              
              67.8
              
              88.1
              
              JCPenney
              05/31/13Kmart
              11/30/17Morgantown
      CommonsMorgantown,
      WV
              200,187
              
              30,656
              
              230,843
              
              100.0
              
              25.9
              
              Gabriel
      Brothers
              01/31/17Kmart
              02/28/21Ohio
      River PlazaGallipolis,
      OH (3)
              44,242
              
              43,136
              
              87,378
              
              37.0
              
              87.9
              
              Peebles
              01/31/17Polaris
      Towne CenterColumbus,
      OH
              291,997
              
              151,040
              
              443,037
              
              100.0
              
              97.3
              
              Barnes
      & Noble
              01/31/15Best
      Buy
              01/31/15Jo-Ann
      etc.
              01/31/10Kroger
              11/30/18Linens
      `N Things
              01/31/15OfficeMax
              09/30/14Old
      Navy
              01/31/10T.J.
      Maxx
              03/31/09Total
              709,435
              
              259,232
              
              968,667
              
              88.2%
              
              86.1%




(1)
                Includes
      outparcels.
 (2)
                Lease
      expiration dates do not contemplate options to
  renew.


(3)
              Property
      classified as held-for-sale at December 31,
  2007.





(c)           Properties Subject to
Indebtedness





At
December 31, 2007, 24 of the Properties, consisting of 19 Malls (17 wholly-owned
and 2 partially owned through a joint venture), 3 Community Centers, and 2
properties under development (partially owned through a joint venture), were
encumbered by mortgages and 4 Malls and 1 Community Center were
unencumbered.  The 5 unencumbered Properties had a net book value of
$206.8 million at December 31, 2007.  To facilitate the funding of
working capital requirements and to finance the acquisition and development of
the Properties, the Company has entered into an unsecured revolving line of
credit with several financial institutions.








18




Various Mortgage
Loans





The
following table sets forth certain information regarding the mortgages which
encumber various Properties.   All of the mortgages are first
mortgage liens on the Properties.  The information is as of December
31, 2007 (dollars in thousands).




Encumbered Property
            Fixed/ Variable
              Interest Rate
            Interest
              Rate
            Loan
              Balance
            Annual Debt
              Service
            Payment at
              Maturity
            MaturityKnox
      Village Square
            Fixed
            7.41%
            $     8,634
            
            $     772
            
            $    8,624
            02/11/2008
      (1)Morgantown
      note
            Fixed
            6.89%
            51,503
            
            $  4,608
            
            $
      50,823
            09/11/2008
      (2)Morgantown
      MallMorgantown
      CommonsEastland
      North Carolina
            Fixed
            7.84%
            42,907
            
            $  4,308
            
            $  42,302
            09/11/2008
      (2)Great
      Mall of the Great Plains, The
            Fixed
            6.35%
            30,000
            
            $  1,932
            
            $  30,000
            01/12/2009Grand
      Central Mall
            Fixed
            7.18%
            47,001
            
            $  4,268
            
            $  46,065
            02/01/2009Mall
      at Johnson City, The
            Fixed
            8.37%
            38,323
            
            $  3,740
            
            $  37,026
            06/01/2010Polaris
      Towne Center
            Fixed
            8.20%
            39,969
            
            $  3,858
            
            $  38,543
            06/01/2010
      (2)Ashland
      Town Center
            Fixed
            7.25%
            24,273
            
            $  2,344
            
            $  21,817
            11/01/2011Dayton
      Mall, The
            Fixed
            8.27%
            54,983
            
            $  5,556
            
            $  49,864
            07/11/2012
      (2)WestShore
      Plaza
            Fixed
            5.09%
            93,624
            
            $  6,508
            
            $  84,824
            09/09/2012Polaris
      Fashion Place
            Fixed
            5.24%
            139,692
            
            $  9,928
            
            $124,572
            04/11/2013Lloyd
      Center
            Fixed
            5.42%
            131,069
            
            $  9,456
            
            $116,922
            06/11/2013
      (2)Jersey
      Gardens
            Fixed
            4.83%
            156,082
            
            $10,424
            
            $135,194
            06/08/2014Mall
      at Fairfield Commons, The
            Fixed
            5.45%
            107,499
            
            $  7,724
            
            $  92,762
            11/01/2014SuperMall
      of the Great Northwest
            Fixed
            7.54%
            58,624
            
            $  5,412
            
            $  49,969
            02/11/2015
      (2)Merritt
      Square Mall
            Fixed
            5.35%
            57,000
            
            $  3,092
            
            $  52,914
            09/01/2015River
      Valley Mall
            Fixed
            5.65%
            50,000
            
            $  2,864
            
            $  44,931
            01/11/2016Weberstown
      Mall
            Fixed
            5.90%
            60,000
            
            $  3,590
            
            $  60,000
            06/08/2016Eastland
      Ohio
            Fixed
            5.87%
            43,000
            
            $  2,557
            
            $  38,057
            12/11/2016


Total
      Wholly Owned Properties:
            
            
            $1,234,183
            (3)Joint
      Venture Properties:Puente
      Hills Mall
            Fixed
            5.20%
            $     44,660
            
            $  3,151
            
            $  44,324
            06/01/2008Tulsa
      Promenade
            Fixed
            6.52%
            18,200
            
            $  1,206
            
            $  18,200
            03/14/2009Surprise
      Peripheral
            Variable
            6.98%
            1,200
            
            $     172
            
            $    1,200
            10/01/2009Scottsdale
      Quarter (4)
            Variable
            NA
            -
            
            NA
            
            NA
            05/29/2011Total
      Joint Venture Properties:
            
            
            $     64,060






(1)
            This
      loan was paid off on February 11,
2008.


(2)
            Optional
      prepayment date (without penalty) is shown. Loan matures at a later date
      as disclosed in Note 5 in our Consolidated Financial
      Statements.


(3)
            This
      total differs from the amounts reported in the financial statements due to
      $19.0 million in tax exempt borrowings which are not secured by a mortgage
      and fair value adjustments to debt instruments as required by SFAS No.
      141, “Business Contributions.”


(4)
            On
      November 30, 2007 we closed on a $220 million construction loan for our
      Scottsdale Quarter project.  The loan bears interest at LIBOR
      plus 150 basis points.  As of December 31, 2007, we had no
      borrowings on the loan.








Item
3.    Legal Proceedings





The
Company is involved in lawsuits, claims and proceedings, which arise in the
ordinary course of business.  The Company is not presently involved in
any material litigation.  In accordance with Statement of Financial
Accounting Standards (“SFAS”) No. 5, “Accounting for Contingencies,” the Company
makes a provision for a liability when it is both probable that a liability has
been incurred and the amount of the loss can be reasonably
estimated.





Item
4.    Submission of Matters to a Vote of Security
Holders





No matter was submitted to a vote of
security holders through the solicitation of proxies or otherwise during the
fourth quarter of fiscal year 2007.




19


PART
II.





Item
5.  Market for Registrant’s Common Equity, Related Shareholder Matters
and Issuer Purchases of Equity Securities





(a)           Market
Information





The
Common Shares are currently listed and traded on the NYSE under the symbol
“GRT.”  On February 21, 2008, the last reported sales price of the
Common Shares on the NYSE was $11.76.  The following table shows the
high and low sales prices for the Common Shares on the NYSE for the 2007 and
2006 quarterly periods indicated as reported by the NYSE Composite Tape and the
cash distributions per Common Share paid by GRT with respect to such
period.





DistributionsQuarter Ended
            
            High
            
            
            Low
            
            
            Per ShareMarch
      31, 2007
            
            
            $29.69
            
            
            
            $25.89
            
            
            
            $0.4808June
      30, 2007
            
            
            $28.20
            
            
            
            $24.95
            
            
            
            $0.4808September
      30, 2007
            
            
            $25.75
            
            
            
            $19.39
            
            
            
            $0.4808December
      31, 2007
            
            
            $24.73
            
            
            
            $13.77
            
            
            
            $0.4808March
      31, 2006
            
            
            $29.10
            
            
            
            $23.95
            
            
            
            $0.4808June
      30, 2006
            
            
            $28.36
            
            
            
            $23.88
            
            
            
            $0.4808September
      30, 2006
            
            
            $25.63
            
            
            
            $23.08
            
            
            
            $0.4808December
      31, 2006
            
            
            $27.72
            
            
            
            $24.20
            
            
            
            $0.4808





(b)           Holders





The number of holders of record of the
Common Shares was 806 as of February 21, 2008.





(c)           Distributions





Future
distributions paid by GRT on the Common Shares will be at the discretion of the
trustees of GRT and will depend upon the actual cash flow of GRT, its financial
condition, capital requirements, the annual distribution requirements under the
REIT provisions of the Code, and such other factors as the trustees of GRT deem
relevant.





GRT has
implemented a Distribution Reinvestment and Share Purchase Plan under which its
shareholders or Operating Partnership unit holders may elect to purchase
additional Common Shares at fair value and/or automatically reinvest their
distributions in Common Shares at fair value.  In order to fulfill its
obligations under the plan, GRT may purchase Common Shares in the open market or
issue Common Shares that have been registered and authorized specifically for
the plan.  As of December 31, 2007, 2,100,000 Common Shares were
authorized, of which 286,194 Common Shares have been issued.





Item
6.  Selected Financial Data





The
following table sets forth Selected Financial Data for the
Company.  This information should be read in conjunction with the
consolidated financial statements of the Company and Management’s Discussion and
Analysis of the Financial Condition and Results of Operations, each included
elsewhere in this Form 10-K:







20




SELECTED FINANCIAL
DATA


For
      the Years Ended December 31,2007
            
            
            2006
            
            
            2005
            
            
            2004
            
            
            2003Operating
      Data (in thousands, except per share amounts): (1)Total
      revenues
            
            $
            302,166
            
            
            $
            292,551
            
            
            $
            287,918
            
            
            $
            276,697
            
            
            $
            227,366Operating
      income
            
            $
            102,442
            
            
            $
            106,151
            
            
            $
            104,822
            
            
            $
            99,541
            
            
            $
            83,594Interest
      expense
            
            $
            87,940
            
            
            $
            82,166
            
            
            $
            71,873
            
            
            $
            75,425
            
            
            $
            63,998Gain
      on sales of properties, net
            
            $
            47,349
            
            
            $
            1,717
            
            
            $
            1,619
            
            
            $
            19,646
            
            
            $
            703Income
      from continuing operations
            
            $
            14,649
            
            
            $
            33,615
            
            
            $
            33,010
            
            
            $
            21,390
            
            
            $
            20,499(Loss)
      income from continuing operations per share
      common  (diluted)
            
            $
            (0.03
            )
            
            $
            0.21
            
            
            $
            0.40
            
            
            $
            0.05
            
            
            $
            0.22Net
      income (loss)
            
            $
            38,357
            
            
            $
            (77,165
            )
            
            $
            20,850
            
            
            $
            51,755
            
            
            $
            32,961Preferred
      stock dividends
            
            $
            17,437
            
            
            $
            17,437
            
            
            $
            17,437
            
            
            $
            17,517
            
            
            $
            13,688Net
      income (loss) available to common shareholders
            
            $
            20,920
            
            
            $
            (94,602
            )
            
            $
            3,413
            
            
            $
            29,360
            
            
            $
            19,273Per
      common share data: Earnings (loss) per share (diluted)
            
            $
            0.56
            
            
            $
            (2.55
            )
            
            $
            0.09
            
            
            $
            0.82
            
            
            $
            0.55Distributions
      (per common share)
            
            $
            1.9232
            
            
            $
            1.9232
            
            
            $
            1.9232
            
            
            $
            1.9232
            
            
            $
            1.9232Balance
      Sheet Data (in thousands):Investment
      in real estate, net
            
            $
            1,710,003
            
            
            $
            1,773,805
            
            
            $
            1,877,059
            
            
            $
            1,835,298
            
            
            $
            1,724,226Total
      assets
            
            $
            1,830,947
            
            
            $
            1,891,252
            
            
            $
            1,995,312
            
            
            $
            1,947,024
            
            
            $
            1,837,423Total
      long-term debt
            
            $
            1,552,210
            
            
            $
            1,576,886
            
            
            $
            1,501,481
            
            
            $
            1,402,604
            
            
            $
            1,295,058Total
      shareholders’ equity
            
            $
            189,090
            
            
            $
            225,235
            
            
            $
            387,054
            
            
            $
            443,822
            
            
            $
            441,939Other
      Data:Cash
      provided by operating activities (in thousands)
            
            $
            102,656
            
            
            $
            96,230
            
            
            $
            108,345
            
            
            $
            102,305
            
            
            $
            98,894Cash
      provided by (used in) investing activities (in thousands)
            
            $
            65,895
            
            
            $
            (108,911
            )
            
            $
            (120,203
            )
            
            $
            38,133
            
            
            $
            (200,229
            )Cash
      (used in) provided by financing activities (in thousands)
            
            $
            (158,155
            )
            
            $
            16,611
            
            
            $
            11,233
            
            
            $
            (143,032
            )
            
            $
            101,066Funds
      from operations (2) (in thousands)
            
            $
            55,395
            
            
            $
            (25,502
            )
            
            $
            77,666
            
            
            $
            89,629
            
            
            $
            88,897Number
      of Properties (3) (4)
            
            
            27
            
            
            
            30
            
            
            
            36
            
            
            
            41
            
            
            
            70Total
      GLA (in thousands) (3) (4)
            
            
            21,598
            
            
            
            24,740
            
            
            
            24,615
            
            
            
            24.291
            
            
            
            27,061Occupancy
      rate % (3)
            
            
            95.2
            %
            
            
            92.8
            %
            
            
            91.9
            %
            
            
            89.3
            %
            
            
            89.8
            %





(1)
              Operating
      data for the years ended December 31, 2006, 2005, 2004 and 2003 are
      restated to reflect the reclassification of properties held-for-sale and
      discontinued operations.





(2)
            FFO
      as defined by NAREIT is used by the real estate industry and investment
      community as a supplemental measure of the performance of real estate
      companies. NAREIT defines FFO as net income (loss) available to common
      shareholders (computed in accordance with GAAP), excluding gains or losses
      from sales of depreciable property, plus real estate related depreciation
      and amortization and after adjustments for unconsolidated partnerships and
      joint ventures. FFO does include impairment losses for properties
      held-for-use and held-for-sale.  The Company’s FFO may not be
      directly comparable to similarly titled measures reported by other
      REITs.  FFO does not represent cash flow from operating
      activities in accordance with GAAP and should not be considered as an
      alternative to net income (determined in accordance with GAAP), as an
      indication of the Company’s financial performance or to cash flow from
      operating activities (determined in accordance with GAAP), as a measure of
      the Company’s liquidity, nor is it indicative of funds available to fund
      the Company’s cash needs, including its ability to make cash
      distributions.  A reconciliation of FFO to net income available
      to common shareholders is provided in Item 7 of this Form
      10-K.





(3)
            Number
      of Properties and GLA include Properties which are both wholly-owned by
      the Company or by a joint venture in which the Company has a joint venture
      interest.  Occupancy of the Properties is defined as any space
      where a store is open or a tenant is paying rent at the date indicated,
      excluding all tenants with leases having an initial term of less than one
      year.





(4)
            The
      number of Properties owned by joint ventures in which the Company has an
      interest and the GLA of those Properties included in the table are as
      follows: 2007 includes 2.1 million square feet of GLA (2 Properties); 2006
      includes 2.1 million square feet of GLA (2 Properties); 2005 includes 1.2
      million square feet of GLA (1 Property); none in 2004; and 2003 includes
      2.0 million square feet of GLA (2
Properties).





21


Item
7.     Management’s Discussion and Analysis of
Financial Condition and Results of Operations





Overview





GRT is a
self-administered and self-managed Maryland real estate investment trust, or
REIT, which commenced business operations in January 1994 at the time of its
initial public offering.  We own, lease, manage and develop a
portfolio of retail properties consisting of regional and super regional malls
as well as community shopping centers.  As of December 31, 2007, we
owned interests in and managed 27 Properties, consisting of 23 Malls (21
wholly-owned and 2 partially owned through a joint venture) and 4 Community
Centers located in 14 states.  The Properties contain an aggregate of
approximately 21.6 million square feet of GLA of which approximately 95.2% was
occupied at December 31, 2007.





Our
primary business objective is to achieve growth in net income and funds from
operations, or FFO, by developing and acquiring retail properties; improving the
operating performance and value of our existing portfolio through selective
expansion and renovation of our Properties; and by maintaining high occupancy
rates, increasing minimum rents per square-foot of GLA and aggressively
controlling costs.





Key
elements of our growth strategies and operating policies are to:





·
            Increase
      Property values by aggressively marketing available GLA and renewing
      existing leases;





·
            Negotiate
      and sign leases which provide for regular or fixed contractual increases
      to minimum rents;





·
            Capitalize
      on management’s long-standing relationships with national and regional
      retailers and extensive experience in marketing to local retailers, as
      well as exploit the leverage inherent in a larger portfolio of properties
      in order to lease available space;





·
            Establish
      and capitalize on strategic joint venture relationships to maximize
      capital resource availability;





·
            Utilize
      our team-oriented management approach to increase productivity and
      efficiency;





·
            Acquire
      strategically located malls;





·
            Hold
      Properties for long-term investment and emphasize regular maintenance,
      periodic renovation and capital improvements to preserve and maximize
      value;





·
            Selectively
      dispose of assets we believe have achieved long-term investment potential
      and redeploy the proceeds;





·
            Control
      operating costs by utilizing our employees to perform management, leasing,
      marketing, finance, accounting, construction supervision, legal and
      information technology services;





·
            Renovate,
      reconfigure or expand Properties and utilize existing land available for
      expansion and development of outparcels to meet the needs of existing or
      new tenants; and





·
            Utilize
      our development capabilities to develop quality properties at low
      cost.





Our
strategy is to be a leading REIT focusing on anchored-retail properties located
primarily in the top 100 metropolitan statistical areas by
population.  We expect to continue investing in select development
opportunities and in strategic acquisitions of mall properties that provide
growth potential.  We expect to finance acquisition, redevelopment and
development opportunities with cash on hand, borrowings under credit facilities,
proceeds from strategic joint venture partners, asset dispositions, secured
mortgage financings, the issuance of equity or debt securities, or a combination
of two or more of the foregoing.





Critical
Accounting Policies and Estimates





General





Management’s
Discussion and Analysis of Financial Condition and Results of Operations is
based upon our consolidated financial statements, which have been prepared in
accordance with GAAP.  The preparation of these financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenue and expenses, and related disclosure of
contingent assets and liabilities.  Management bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources.  Senior management has
discussed the development, selection and disclosure of these estimates with the
Audit Committee of the Board and the Company’s independent registered public
accounting firm.  Actual results may differ from these estimates under
different assumptions or conditions.





22


An accounting policy is deemed to be
critical if it requires an accounting estimate to be made based on assumptions
about matters that are highly uncertain at the time the estimate is made and if
different estimates that are reasonably likely to occur could materially impact
the financial statements.  Management believes the critical accounting
policies discussed in this section reflect its more significant estimates and
assumptions used in preparation of the consolidated financial
statements.





Revenue
Recognition





The
Company’s revenue recognition policy relating to minimum rents does not require
the use of significant estimates.  Minimum rents are recognized on an
accrual basis over the term of the related leases on a straight-line
basis.  Percentage rents, tenant reimbursements, and components of
other revenue associated with the margins related to outparcel sales include
estimates.





Percentage
Rents





Percentage
rents, which are based on tenants’ sales as reported to the Company, are
recognized once the sales reported by such tenants exceed any applicable
breakpoints as specified in the tenants’ leases.  The percentage rents
are recognized based upon the measurement dates specified in the leases which
indicate when the percentage rent is due.





Tenant
Reimbursements





Estimates
are used to record cost reimbursements from tenants for CAM, real estate tax,
utilities and insurance. We recognize revenue based upon the amounts to be
reimbursed from our tenants for these items in the same period these
reimbursable expenses are incurred.  Differences between estimated
cost reimbursements and final amounts billed are recognized in the subsequent
year.  Leases are not uniform in dealing with such cost reimbursements
and variations exist in computations between Properties and
tenants.  The Company analyzes the balance of its estimated accounts
receivable for real estate taxes, CAM and insurance for each of its Properties
by comparing actual reimbursements versus actual
expenses.  Adjustments are also made throughout the year to these
receivables and the related cost reimbursement income based upon the Company’s
best estimate of the final amounts to be billed and collected.  If
management’s estimate of the percent of recoverable expenses that can be billed
to the tenants in 2007 differs from actual amounts billed in 2007 by 1%, the
amount of income recorded during 2007 would increase or decrease by $1.1
million.





Outparcel
Sales





The
Company sells outparcels at its various Properties.  The estimated
cost used to calculate the margin from these sales involves a number of
estimates.  The estimates made are based either upon assigning a
proportionate value based upon historical cost paid for the total parcel to the
portion of the parcel that is sold, or by incorporating the sales value
method.  The proportionate share of actual cost is derived through
consideration of numerous factors.  These factors include items such
as ease of access to the parcel, visibility from high traffic areas and other
factors that may differentiate the desirability of the particular section of the
parcel that is sold.





Accounts Receivable and
Allowance for Doubtful Accounts





The
allowance for doubtful accounts reflects the Company’s estimate of the amounts
of the recorded accounts receivable at the balance sheet date that will not be
recovered from cash receipts in subsequent periods.  The Company’s
policy is to record a periodic provision for doubtful accounts based on total
revenues.  The Company also periodically reviews specific tenant
balances and determines whether an additional allowance is
necessary.  In recording such a provision, the Company considers a
tenant’s creditworthiness, ability to pay, probability of collections and
consideration of the retail sector in which the tenant operates.  The
allowance for doubtful accounts is reviewed periodically based upon the
Company’s historical experience.





23


Investment in Real
Estate





Carrying
Value of Assets





The
Company maintains a diverse portfolio of real estate assets.  The
portfolio holdings have increased as a result of both acquisitions and the
development of new Properties and have been reduced by selected sales of
assets.  The amounts to be capitalized as a result of acquisition and
developments and the periods over which the assets are depreciated or amortized
are determined based on the application of accounting standards that may require
estimates as to fair value and the allocation of various costs to the individual
assets.  The Company allocates the cost of the acquisition based upon
the estimated fair value of the net assets acquired.  The Company also
estimates the fair value of intangibles related to its
acquisitions.  The valuation of the fair value of the intangibles
involves estimates related to market conditions, probability of lease renewals
and the current market value of in-place leases.  This market value is
determined by considering factors such as the tenant’s industry, location within
the Property and competition in the specific market in which the Property
operates. Differences in the amount attributed to the intangible assets can be
significant based upon the assumptions made in calculating these
estimates.





Impairment
Evaluation





Management
evaluates the recoverability of its investment in real estate assets in
accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of
Long-Lived Assets.”  This statement requires that long-lived assets be
reviewed for impairment whenever events or changes in circumstances indicate
that recoverability of the asset is not assured.





The Company evaluates the
recoverability of its investments in real estate assets to be held and used each
quarter and records an impairment charge when there is an indicator of
impairment and the undiscounted projected cash flows are less than the carrying
amount for a particular Property.  The estimated cash flows used for
the impairment analysis and the determination of estimated fair value are based
on the Company’s plans for the respective assets and the Company’s views of
market and economic conditions.  The estimates consider matters such
as current and historical rental rates, occupancies for the respective
Properties and comparable properties and recent sales data for comparable
properties.  Changes in estimated future cash flows due to changes in
the Company’s plans or views of market and economic conditions could result in
recognition of impairment losses, which, under the applicable accounting
guidance, could be substantial.





Investment
in Real Estate – Held-for-Sale





The
Company evaluates the held-for-sale classification of its owned real estate each
quarter.  Assets that are classified as held-for-sale are recorded at
the lower of their carrying amount or fair value less cost to
sell.  Assets are generally classified as held-for-sale once
management commits to a plan to sell the Properties and has initiated an active
program to market them for sale.  The results of operations of these
real estate properties are reflected as discontinued operations in all periods
reported.





On
occasion, the Company will receive unsolicited offers from third parties to buy
individual Properties.  Under these circumstances, the Company will
classify the particular Property as held-for-sale when a sales contract is
executed with no contingencies and the prospective buyer has funds at risk to
ensure performance.





Sale
of Real Estate Assets





The sale
of real estate assets may also involve the application of judgments in
determining whether the risks and rewards of ownership have transferred to the
buyer and that a sale has been completed for purposes of recognizing a gain on
the sale.  The Company recognizes property sales in accordance with
SFAS No. 66, “Accounting for Sales of Real Estate.” The Company generally
records the sales of operating properties and outparcels using the full accrual
method at closing, when the earnings process is deemed to be
complete.  Sales not qualifying for full recognition at the time of
sale are accounted for under other appropriate deferral methods.





Accounting
for Acquisitions





The fair
value of the real estate acquired is allocated to acquired tangible assets,
consisting of land, building and tenant improvements, and identified intangible
assets and liabilities, consisting of the value of above-market and below-market
leases for acquired in-place leases, the value of tenant relationships, and the
value of in-place leases, based in each case on their fair
values.  Purchase accounting is applied to assets and liabilities
related to real estate entities acquired based upon the percentage of interest
acquired.





24


The fair
value of the tangible assets of an acquired property (which includes land,
building and tenant improvements) is determined by valuing the property as if it
were vacant, based on management’s determination of the relative fair values of
these assets.  Management determines the as-if-vacant fair value of a
property using methods to determine the replacement cost of the tangible
assets.





In
determining the fair value of the identified intangible assets and liabilities
of an acquired property, above-market and below-market in-place lease values are
recorded based on the present value (using an interest rate which reflects the
risks associated with the leases acquired) of the difference between (i) the
contractual amounts to be paid pursuant to the in-place leases and (ii)
management’s estimate of fair market lease rates for the corresponding in-place
leases, measured over a period equal to the remaining non-cancelable term of the
lease.  The capitalized above-market lease values and the capitalized
below-market lease values are amortized as an adjustment to rental income over
the initial lease term.





The
aggregate value of in-place leases is determined by evaluating various factors,
including an estimate of carrying costs during the expected lease-up periods,
current market conditions and similar leases.  In estimating carrying
costs, management includes real estate taxes, insurance and other operating
expenses and estimates of lost rental revenue during the expected lease-up
periods based on current market demand.  Management also estimates
costs to execute similar leases including leasing commissions, legal and other
related costs.  The value assigned to this intangible asset is
amortized over the remaining lease term plus an assumed renewal period that is
reasonably assured.





The
aggregate value of other acquired intangible assets include tenant
relationships.  Factors considered by management in assigning a value
to these relationships include:  assumptions of probability of lease
renewals, investment in tenant improvements, leasing commissions and an
approximate time lapse in rental income while a new tenant is
located.  The value assigned to this intangible asset is amortized
over the average life of the relationship.





Depreciation
and Amortization





Depreciation
expense for real estate assets is computed using a straight-line method and
estimated useful lives for buildings and improvements using a weighted average
composite life of forty years and equipment and fixtures of five to ten
years.  Expenditures for leasehold improvements and construction
allowances paid to tenants are capitalized and amortized over the initial term
of each lease.  Cash allowances paid to retailers that are used for
purposes other than improvements to the real estate are amortized as a reduction
to minimum rents over the initial lease term.  Maintenance and repairs
are charged to expense as incurred.  Cash allowances paid in return
for operating covenants from retailers who own their real estate are capitalized
as contract intangibles.  These intangibles are amortized over the
period the retailer is required to operate their store.





Investment in Unconsolidated
Real Estate Entities





The
Company evaluates all joint venture arrangements for
consolidation.  The percentage interest in the joint venture,
evaluation of control and whether a variable interest entity (“VIE”) exists are
all considered in determining if the arrangement qualifies for
consolidation.





The
Company accounts for its investments in unconsolidated real estate entities
using the equity method of accounting, whereby the cost of an investment is
adjusted for the Company’s share of equity in net income or loss beginning on
the date of acquisition and reduced by distributions received.  The
income or loss of each investee is allocated in accordance with the provisions
of the applicable operating agreements.  The allocation provisions in
these agreements may differ from the ownership interest held by each
investor.   Differences between the carrying amount of the
Company’s investment in the respective investees and the Company’s share of the
underlying equity of such unconsolidated entities are amortized over the
respective lives of the underlying assets as applicable.





The
Company periodically reviews its investment in unconsolidated real estate
entities for other than temporary declines in market value.  We
consider any decline that is not expected to be recovered in the next twelve
months is considered other than temporary and an impairment charge is recorded
as a reduction in the carrying value of the investment.  No impairment
charges were recognized during the year ended December 31, 2007 related to our
investment in unconsolidated real estate entities.





25


Deferred
Costs





The
Company capitalizes initial direct costs in accordance with SFAS No. 91,
“Accounting for Nonrefundable Fees and Costs Associated with Originating or
Acquiring Loans and Initial Direct Costs of Leases,” and amortizes these costs
over the initial lease term.  The costs are capitalized upon the
execution of the lease and the amortization period begins the earlier of the
store opening date or the date the tenant’s lease obligation
begins.





Derivatives





The
Company recognizes all derivative financial instruments in the consolidated
financial statements at fair value regardless of the purpose or intent for
holding the instrument.  Changes in the fair value of derivative
financial instruments that qualify for hedge accounting are recorded in our
financial statements under stockholders’ equity as a component of comprehensive
income or as an adjustment to the carrying value of the hedged
item.  Changes in fair values of derivatives not qualifying for hedge
accounting are reported in earnings.





For
derivative instruments that are designated and qualify as a cash flow hedge
(i.e., hedging the exposure to variability in expected future cash flows that is
attributable to a particular risk), the effective portion of the gain or loss on
the derivative instrument is reported as a component of accumulated other
comprehensive income and reclassified into interest income or interest expense
in the same period or periods during which the hedged item affects interest
income or interest expense. The remaining gain or loss of the derivative
instruments in excess of the cumulative change in the present value of future
cash flows of the hedged item, if any, is ineffective and is recognized in our
financial statements in other income or other expense during the period of the
change.  Upon termination of a derivative instrument prior to
maturity, the aforementioned adjustment to accumulated other comprehensive
income is amortized or accreted into interest income or interest expense over
the remaining term of the hedge relationship using the effective interest
method.  Should the hedged item mature, be sold or be extinguished
prior to the end of the hedge relationship or a forecasted transaction is
probable of not occurring, the aforementioned amounts in accumulated other
comprehensive income are reclassified to interest income or interest expense and
the derivative instrument’s change in fair value from that point forward will be
recorded in other income or other expense.





Funds
From Operations





Our
consolidated financial statements have been prepared in accordance with
GAAP.  We have also indicated that FFO is a key measure of our
financial performance.  FFO is an important and widely used financial
measure of operating performance in the REIT industry, which we believe provides
important information to investors and a relevant basis for comparison among
REITs.





We believe that FFO is an appropriate
and valuable measure of our operating performance because real estate generally
appreciates over time or maintains a residual value to a much greater extent
than personal property and, accordingly, reductions for real estate depreciation
and amortization charges are not meaningful in evaluating the operating results
of the Properties.





FFO, as
defined by NAREIT (defined fully in Item 1) is used by the real estate industry
and investment community as a supplemental measure of the performance of real
estate companies.  FFO does not represent cash flow from operating
activities in accordance with GAAP and should not be considered as an
alternative to net income as the primary indicator of our operating performance
or as an alternative to cash flow as a measure of liquidity.  Our FFO
may not be directly comparable to similarly titled measures reported by other
REITs.





The following table illustrates the
calculation of FFO and the reconciliation of FFO to net income available to
common shareholders for the years ended December 31, 2007, 2006 and 2005 (in
thousands):


For the Years Ended December
      31,2007
            
            
            2006
            
            
            2005Net
      income (loss) available to common shareholders
            
            $
            20,920
            
            
            $
            (94,602
            )
            
            $
            3,413Add
      back (less):Real
      estate depreciation and amortization
            
            
            75,058
            
            
            
            73,926
            
            
            
            75,620Equity
      in income of unconsolidated entities
            
            
            (1,133
            )
            
            
            (1,443
            )
            
            
            (51
            )Pro
      rata share of joint venture funds from operations
            
            
            6,264
            
            
            
            6,067
            
            
            
            51Minority
      interest in Operating Partnership
            
            
            1,635
            
            
            
            (7,733
            )
            
            
            252Gain
      on sales of properties
            
            
            (47,349
            )
            
            
            (1,717
            )
            
            
            (1,619
            )Funds
      from operations
            
            $
            55,395
            
            
            $
            (25,502
            )
            
            $
            77,666




26


FFO – Comparison of Year
Ended December 31, 2007 to December 31, 2006





FFO
increased $80.9 million for the year ended December 31, 2007 compared to the
year ended December 31, 2006. During 2007, we incurred $30.4 million in
impairment charges related to four Malls and one Community Center. During 2006,
we incurred $111.9 million of impairment charges primarily related to three Mall
Properties, one of which was sold during 2007, and the other two Malls which are
currently classified as held-for-sale. Also we incurred $11.5 million less in
interest expense.  The primary driver of this decrease in interest
expense can be attributed to a $9.4 million defeasance charge incurred during
2006 associated with early retirement of the mortgage loan for University Mall,
which was sold during 2007.  Offsetting these increases to FFO was a
$3.7 million decline in lease termination income. We also received $8.5 million
less in property operating income from those properties that were sold during
the years ended December 31, 2007 or 2006.  Excluding the impairment
and defeasance charges, FFO would have been $85.8 million for the year ended
December 31, 2007 compared to $95.8 million for the year ended December 31,
2006.





FFO – Comparison of Year
Ended December 31, 2006 to December 31, 2005





FFO
decreased 132.8%, or $103.2 million, for the year ended December 31, 2006
compared to the year ended December 31, 2005. During 2006, we incurred $111.9
million of impairment charges primarily related to three Mall Properties, two of
which were listed as held-for-sale, as compared to $16.4 million of impairment
charges related primarily to Community Centers for the same period ended
December 31, 2005. Also contributing to the decrease in FFO was a $18.0 million
increase in overall interest expense. This increase in interest expense can be
attributed to a $9.4 million defeasance charge associated with the early
retirement of the mortgage loan on University Mall during the year ended
December 31, 2006.  The increase in interest expense is also
attributable to a higher average loan balance during 2006 as compared to 2005,
primarily due to funding of acquisitions, capital improvements, and the
Company’s redevelopment program.





Offsetting
these decreases to FFO was an increase of $6.0 million to our pro-rata share of
FFO from our joint venture investment in Puente Hills Mall (“Puente”) and Tulsa
Promenade (“Tulsa”). Also, our general and administrative costs decreased by
$3.1 million. This decrease is primarily due to $3.3 million of charges in 2005
relating to an employment agreement ($2.0 million) and a severance agreement
($1.3 million) with two of the Company’s former executives.  Excluding
the non-cash impairment charges and defeasance costs, FFO would have been $95.8
million for the year ended December 31, 2006 compared to $94.1 million for the
year ended December 31, 2005.





Results
of Operations - Year Ended December 31, 2007 Compared to Year Ended December 31,
2006





Revenues





Total
revenues increased 3.3%, or $9.6 million, for the year ended December 31,
2007.  This increase is primarily attributable to minimum rents
increasing $4.2 million; tenant reimbursements increasing $2.7 million, along
with an increase in other income of $2.3 million.





Minimum
Rents





Minimum
rents increased 2.3%, or $4.2 million, for the year ended December 31, 2007
compared with minimum rents for the year ended December 31, 2006.  The
acquisition of Merritt Square Mall, an enclosed regional mall located in Merritt
Island, Florida consisting of approximately 804,000 square feet of GLA
(“Merritt”), in October 2007 added $1.9 million in base rents.  The
remaining properties, exclusive of lease termination income, experienced a $4.5
million increase, which resulted primarily from the completion of our
streetscape concept at The Dayton Mall, the opening of Home Depot at Northtown
Mall, and the completion of the Med Center at Grand Central Mall as well as
increased occupancy at WestShore Plaza, Polaris Fashion Place, and Jersey
Gardens. Offsetting theses increases was a decrease in lease termination income
of $2.2 million.





Tenant
Reimbursements





Tenant
reimbursements reflect an increase of 3.2%, or $2.7 million, for the year ended
December 31, 2007. This is due to an associated increase of $2.2 million in
reimbursable expenses for the year and additional reimbursements of $0.9 million
from the acquisition of Merritt.








27


Other
Revenues





Other
revenues increased 11.5%, or $2.3 million, for the year ended December 31, 2007
compared to the year ended December 31, 2006. The components of other revenues
are shown below (in thousands):





For the Years Ended December
      31,2007
            
            
            2006
            
            
            Inc. (Dec.)Licensing
      Agreement Income
            
            $
            10,594
            
            
            $
            11,107
            
            
            $
            (513
            )Outparcel
      Sales
            
            
            2,724
            
            
            
            320
            
            
            
            2,404Sponsorship
      Income
            
            
            1,487
            
            
            
            1,045
            
            
            
            442Management
      Fees
            
            
            2,660
            
            
            
            2,231
            
            
            
            429Other
            
            
            5,249
            
            
            
            5,662
            
            
            
            (413
            )Total
            
            $
            22,714
            
            
            $
            20,365
            
            
            $
            2,349





Licensing
agreement income relates to our tenants with rental agreement terms of less than
thirteen months. The decline in this revenue in 2007 as compared to 2006 is due
to extending the terms of many of these agreements for longer
periods.  In 2007, the $2.7 million of outparcel revenue is from the
sale of outparcels at New Towne Mall and The Mall at Fairfield
Commons.  Management fee income increased $429,000 in the year ended
December 31, 2007 compared to the year ended December 31, 2006 as a result of an
increase in development, leasing, and legal fee revenue.





Expenses





Total
expenses increased 7.1%, or $13.3 million, for the year ended December 31,
2007.  Depreciation and amortization increased $5.2 million, while
real estate and property operating expenses were up $2.2 million. Other
operating expenses increased $1.6 million and general and administrative costs
increased $1.2 million.  Impairment losses on held-for-investment real
estate assets were $2.9 million for 2007.





Real
Estate Taxes and Property Operating Expenses





Real
estate taxes and property operating expenses increased $2.2 million, or 2.3%,
for the year ended December 31, 2007; however, despite this aggregate increase,
real estate taxes decreased $861,000, or 2.6%. The decrease in real estate taxes
was due to reduced tax assessments and the capitalization of certain real estate
taxes during redevelopment on several Properties.





Property
operating expenses increased $3.0 million, or 5.0%, for the year ended December
31, 2007. Insurance for property damage and liability for our Malls increased by
52%, or $1.8 million, related to the re-evaluation of property values and the
cost to insure Properties located in areas that have a higher risk for natural
disasters.  Operating expenses for Merritt, acquired in the fourth
quarter of 2007, were $1.1 million.





Provision
for Doubtful Accounts





The
provision for doubtful accounts is $3.7 million for the year ended December 31,
2007 and $3.5 million for the year ended December 31, 2006.  The
provision represents 1.2% of revenues from continuing operations for both 2007
and 2006.





Other
Operating Expenses





Other
operating expenses increased 24.4%, or $1.6 million, for the year ended December
31, 2007 as compared to the year ended December 31, 2006.  The
majority of this increase is due to costs related to the outparcel sales of $1.2
million compared to $129,000 for the previous year.  Other increases
include costs for write-off of discontinued development with offsetting
decreases in legal fees and landlord expenses.





Depreciation
and Amortization





Depreciation
expense increased for the year ended December 31, 2007 by $5.2 million or
7.6%.  The addition of Merritt to the portfolio in October 2007
increased depreciation expenses by $1.6 million.  The newly
constructed medical center at Grand Central Mall, the new addition of a
lifestyle component at The Dayton Mall, and the write-off of improvements
related to a former Kaufmann’s store at Polaris Fashion Place (“Polaris”) were
the major contributors for the remaining increase in depreciation
expense.




28


General
and Administrative





General
and administrative expense was $16.5 million and represented 5.5% of total
revenues for 2007 compared to $15.3 million and represented 5.2% of total
revenues for 2006.  The increase primarily relates to compensation
expense associated with the new performance share plan for senior management
implemented in March 2007 and higher professional fees attributable to third
party consultation relating to new proxy disclosure requirements.





Impairment
Losses -Real Estate Assets, Continuing Operations





We
recognized a $2.9 million non-cash impairment charge on our Jersey Gardens
Center in the fourth quarter of 2007.  The charge resulted from a
ground lease for a diner restaurant with an option to purchase by tenant and a
sales contract for the last undeveloped parcel.  The purchase price
under the ground lease option and the sales price for the final undeveloped
parcel are less than the basis of these parcels.  The diner restaurant
opened in January 2008 and closing under the sales contract for the last
undeveloped parcel is expected in 2008.





Interest Expense/Capitalized
Interest





Interest expense increased 7.0%, or
$5.8 million, for the year ended December 31, 2007.  The summary
below identifies the increase by its various components (dollars in
thousands):





For the Years Ended December
      31,2007
            
            
            2006
            
            
            Inc. (Dec.)Average
      loan balance
            
            $
            1,450,207
            
            
            $
            1,337,002
            
            
            $
            113,205Average
      rate
            
            
            6.21
            %
            
            
            6.20
            %
            
            
            0.01
            %Total
      interest
            
            $
            90,058
            
            
            $
            82,894
            
            
            $
            7,164Amortization
      of loan fees
            
            
            1,867
            
            
            
            1,853
            
            
            
            14Capitalized
      interest and other expense, net
            
            
            (3,985
            )
            
            
            (2,581
            )
            
            
            (1,404
            )Interest
      expense
            
            $
            87,940
            
            
            $
            82,166
            
            
            $
            5,774





The
increase in the “Average loan balance” category was primarily a result of
funding capital improvements and the Company’s redevelopment
program.  The variance in “Capitalized interest and other, net” was
primarily due to a higher level of in-process construction and redevelopment
activity compared to the corresponding period in the prior year.





Equity in Income of
Unconsolidated Entities, Net





Net
income available from joint ventures was $2.2 million and $2.8 million for the
year ended December 31, 2007 and 2006, respectively.  The net income
available from joint ventures results primarily from our investment in Puente
and Tulsa.  These Properties are held through a joint venture (the
“ORC Venture”), with OMERS Realty Corporation (“ORC”), an affiliate of Oxford
Properties Group (“Oxford”), which is the global real estate platform for the
Ontario (Canada) Municipal Employees Retirement System, a Canadian pension
plan.





The
reconciliation of the net income from the joint ventures to FFO for these
Properties is shown below (in thousands):





For the Year Ended December
    31,2007
            
            
            2006Net
      income available from joint ventures
            
            $
            2,178
            
            
            $
            2,776Add
      back:Real
      estate depreciation and amortization
            
            
            9,864
            
            
            
            8,892Funds
      from operations
            
            $
            12,042
            
            
            $
            11,668Pro-rata
      share of joint venture funds from operations
            
            $
            6,264
            
            
            $
            6,067





29




Discontinued
Operations





During
2007, we sold four Malls and one vacant anchor space at one of our Community
Centers for $209.5 million and recorded a $47.3 million gain primarily
associated with these sales. Also, we recorded an impairment loss of $27.5
million primarily associated with two of our held-for-sale Malls. The impairment
loss is reported in discontinued operations in accordance with SFAS No. 144.
During 2006, we sold seven Community Centers for $24.7 million and recorded a
net gain on these sales of $1.7 million.  During this period we also
recorded an impairment loss of $111.9 million primarily associated with two of
the held-for-sale Malls.  Total revenues for discontinued operations
were $35.6 million and $61.6 million for the years ended December 31, 2007 and
2006, respectively.





Results
of Operations - Year Ended December 31, 2006 Compared to Year Ended December 31,
2005





Revenues





Total
revenues increased 1.6%, or $4.6 million, for the year ended December 31,
2006.  Minimum base rent and lease termination income both increased
while there was a decrease in straight line rents.





Minimum
Rents





Minimum rents increased 2.3%, or $4.1
million, for the year ended December 31, 2006. The increase is due to higher
base rent at the Malls of $5.9 million resulting from improved in-line store
occupancy and increased rental rates.  Lease termination income was
also up $366,000 from the prior year.  These increases were offset by
a decline in straight line rental income of $2.2 million for the years ended
December 31, 2006 and 2005, respectively.





Tenant
Reimbursements





Tenant reimbursements reflect an
increase of 2.5%, or $2.0 million, for the year ended December 31,
2006.  The increase in revenues relates to increases in recoverable
operating expenses.




Other
Revenues





Other
revenues decreased $1.8 million, or 8.2%, for the year ended December 31, 2006
compared to the year ended December 31, 2005.  The components of other
revenues are shown below (in thousands):





For the Years Ended December
      31,2006
            
            
            2005
            
            
            Inc. (Dec.)Licensing
      agreement income
            
            $
            11,107
            
            
            $
            13,038
            
            
            $
            (1,931
            )Outparcel
      sales
            
            
            320
            
            
            
            2,525
            
            
            
            (2,205
            )Sponsorship
      income
            
            
            1,045
            
            
            
            800
            
            
            
            245Management
      fees
            
            
            2,231
            
            
            
            632
            
            
            
            1,599Other
            
            
            5,662
            
            
            
            5,189
            
            
            
            473Total
            
            $
            20,365
            
            
            $
            22,184
            
            
            $
            (1,819
            )





There was
a decrease of $2.2 million in outparcel sales proceeds from 2006 to
2005.  In 2005, there were sales proceeds of $2.4 million for
undeveloped land in Ohio.  Licensing agreement income relates to our
tenants with rental agreement terms of less than thirteen months. The decline in
this revenue from 2006 to 2005 is due to extending the terms of many of these
agreements for longer periods. These decreases were offset by an increase in
management, lease, and legal fee income of $1.6 million in 2006 as compared to
2005, resulting from the joint ventures formed late in 2005 and third party
management fees.





Expenses





Total
expenses increased $3.3 million, or 1.8%, for the year ended December 31, 2006
compared to the year ended December 31, 2005.  Depreciation and
property operating expenses accounted for the majority of the increase, while
other operating and general and administrative expenses decreased from 2005
levels.





30








Real
Estate Taxes and Property Operating Expenses





Real
estate taxes and property operating expenses increased 2.9%, or $2.6 million,
for the year ended December 31, 2006.  Real estate taxes increased by
$265,000 in 2006, as compared to 2005, while property operating expenses
increased $2.3 million in 2006 compared to 2005.  This was mainly due
to electricity costs increasing $2.3 million, the majority of which was at
Jersey Gardens Mall.  There also were increases in wages for
housekeeping and security personnel for 2006 compared to 2005.





Provision
for Doubtful Accounts





The
provision for doubtful accounts was $3.5 million for the year ended December 31,
2006 and $3.3 million for 2005.  The provision represented 1.2% of
revenues in 2006 and 1.1% of revenues in 2005 and related to our continued
operations.  A total provision was recorded for doubtful accounts
(including discontinued operations) of $6.7 million in 2006 compared to $5.1
million in 2005.  The increase related primarily to aged receivables
for sold Properties.





Other
Operating Expenses




Other
operating expenses were $6.6 million for the year ended December 31, 2006
compared to $8.7 million for the corresponding period in 2005.  This
decline was mainly due to a decrease in costs associated with outparcel sales of
$2.3 million.





Depreciation
and Amortization




Depreciation and amortization expense
increased for the year ended December 31, 2006 by $5.6 million or 9.0% as
compared to the year ended December 31, 2005. The investment of $12 million in
improvements to the Nordstrom store at the Lloyd Center Mall increased
depreciation $1.2 million from the prior year.  Additionally,
depreciation expense increased at Eastland Ohio by $2.6 million in 2006 from
2005, primarily due to the addition of the Macy’s anchor store that opened in
late 2005.





General
and Administrative





General and administrative expense
decreased $3.1 million, or 16.8%, for the year ended December 31, 2006 as
compared to the year ended December 31, 2005.   For 2006, general
and administrative costs of $15.3 million represented 5.2% of total revenues
compared to $18.4 million, or 6.4%, of total revenues for the prior year. This
decrease is primarily related to executive employment agreements and severance
agreements executed by two former executives in 2005.





Interest Expense/Capitalized
Interest





Interest expense relating to our
continuing operations increased 14.3%, or $10.3 million, for the year ended
December 31, 2006.  The summary below identifies the increase by its
various components (dollars in thousands):


Year Ended December 31,2006
            
            
            2005
            
            
            Inc. (Dec.)Average
      loan balance
            
            $
            1,337,002
            
            
            $
            1,196,352
            
            
            $
            140,650Average
      rate
            
            
            6.20
            %
            
            
            6.04
            %
            
            
            0.16
            %Total
      interest
            
            $
            82,894
            
            
            $
            72,260
            
            
            $
            10,634Amortization
      of loan fees
            
            
            1,853
            
            
            
            1,866
            
            
            
            (13
            )Capitalized
      interest and other expense, net
            
            
            (2,581
            )
            
            
            (2,253
            )
            
            
            (328
            )Interest
      expense
            
            $
            82,166
            
            
            $
            71,873
            
            
            $
            10,293





The
increase in the “Average loan balance” during 2006 was primarily the result of
funding acquisitions, capital improvements and the Company’s redevelopment
program.  The variance in “Capitalized interest and other, net” was
also primarily due to the increase in construction activity.





31




Equity in Income of
Unconsolidated Entities, Net





The $1.4
million in 2006 income resulted primarily from our investment in Puente and
Tulsa. This represented our share of the $2.8 million of net income for the year
ended December 31, 2006 for these Properties for the period during 2006 in which
they were held through the ORC Venture.  The reconciliation of the net
income from the ORC Venture to FFO for these Properties is shown below (in
thousands):





Year
      Ended
              December 31, 2006Net
      income available to joint ventures
            
            $
            2,776Add
      back:Real
      estate depreciation and amortization
            
            
            8,892FFO
            
            $
            11,668Pro-rata
      share of joint venture FFO
            
            $
            6,067





Discontinued
Operations





During
2006, we sold seven Community Centers for $24.7 million and recorded a net gain
on these sales of $1.7 million.  We recorded an impairment loss of
$111.9 million primarily associated with two of the held-for-sale
Malls.  The impairment loss is reported in discontinued operations in
accordance with SFAS No. 144. During 2005, we sold five Community Centers and
one Mall for $18.4 million and reported a net gain of $1.6 million associated
with the sales. We also reported an impairment charge of $16.4 million. Total
revenues for discontinued operations were $61.6 million and $64.7 million for
the years ended December 31, 2006 and 2005, respectively.





Liquidity
and Capital Resources





Liquidity





Our
short-term (less than one year) liquidity requirements include recurring
operating costs, capital expenditures, debt service requirements, and dividend
and distribution requirements pertaining to our preferred shares, Common Shares
and OP Units. We anticipate that these needs will be primarily met with cash
flows provided by operations.  In January 2008, we announced a revised
dividend and distribution policy for our Common Shares and OP
Units.  We have the expectation that the reduced dividend rate will
enhance our short-term liquidity and provide greater financial flexibility for
the Company.





Our
long-term (greater than one year) liquidity requirements include scheduled debt
maturities, capital expenditures to maintain, renovate and expand existing
assets, property acquisitions and development
projects.    Management anticipates that net cash provided
by operating activities, the funds available under our credit facility,
construction financing, long-term mortgage debt, contributions from strategic
joint venture partnerships, issuance of preferred shares and common shares, and
proceeds from the sale of assets will provide sufficient capital resources to
carry out our business strategy.





At
December 31, 2007, our total-debt-to-total-market capitalization was 66.2%
compared to 55.3% at December 31, 2006.  Our target is to maintain
this ratio in the mid-fifty percent range.  A sharp reduction in our
Common Stock price during December 2007 resulted in a ratio above our targeted
range.  With the recent volatility in our share price, along with
other REITs, we also look at other metrics to assess overall leverage
levels.  In fact, outstanding debt actually decreased by $24.7 million
during 2007, and total debt as a percentage of gross assets remained relatively
flat year over year.  We expect to use the proceeds from future asset
sales to reduce debt and, to the extent debt levels remain in an acceptable
range, to fund expansion, renovation and redevelopment of existing Properties
and the acquisition of additional regional mall
properties.  Total-debt-to-total-market capitalization is calculated
below (dollars and shares in thousands, except stock price):





32




Dec. 31,
      2007
            
            
            Dec. 31,
      2006Stock
      Price (end of period)
            
            $
            14.29
            
            
            $
            26.71Market
      Capitalization Ratio:Common
      Shares outstanding
            
            
            37,687
            
            
            
            36,776OP
      Units outstanding
            
            
            2,988
            
            
            
            2,996Total
      Common Shares and OP Units outstanding at end of period
            
            
            40,675
            
            
            
            39,772Market
      capitalization – Common Shares outstanding
            
            $
            538,547
            
            
            $
            982,287Market
      capitalization – OP Units outstanding
            
            
            42,699
            
            
            
            80,023Market
      capitalization – Preferred Shares
            
            
            210,000
            
            
            
            210,000Total
      debt (end of period)
            
            
            1,552,210
            
            
            
            1,576,886Total
      market capitalization
            
            $
            2,343,456
            
            
            $
            2,849,196Total
      debt/total market capitalization
            
            
            66.2
            %
            
            
            55.3
            %Total
      debt/total market capitalization including pro-rata share of joint
      ventures
            
            
            67.1
            %
            
            
            56.3
            %





CapitalResource
Availability





In
December 2006, we amended our existing unsecured line of credit (the “Prior
Credit Facility”) to increase the borrowing availability from $300 million to
$470 million (the “Credit Facility”) and extend the maturity date to December
2009 with a one-year extension option available to the Company, subject to the
satisfaction of certain conditions. The Credit Facility is expandable to $600
million, subject to certain conditions.  The interest rate of the
Credit Facility ranges from LIBOR plus 0.95% to LIBOR plus 1.40% depending upon
our ratio of debt to total asset value.





In
December 2005, we formed the ORC Venture with OMERS.  The initial
acquisition of the ORC Venture was the $170.1 million purchase of
Puente.  We have a 52% interest in the ORC Venture and ORC has a 48%
interest, but GPLP will be entitled to certain preferred payments provided that
ORC earns a specified rate of return. As part of the ORC
Venture, ORC made $200 million available for acquisitions of certain mall and
anchored lifestyle retail properties that GPLP offers to the ORC Venture. The
properties to be acquired by the ORC Venture will be operated by us under
separate management agreements.  During 2006, the ORC Venture utilized
$11.3 million of the $200.0 million to acquire Tulsa from GPLP and $188.7
million remains available.  Under these agreements, Glimcher will be
entitled to management fees, leasing commissions, and other compensation
including an asset management fee and acquisition fees based upon the purchase
price paid for each property.





On March
24, 2004, we filed with the SEC a universal shelf registration
statement.  This registration statement permits us to engage in
offerings of debt securities, preferred and common shares, warrants, rights to
purchase the Company’s common shares, purchase contracts and any combination of
the foregoing.  The registration statement was declared effective on
April 6, 2004.  The amount of securities registered was $400 million,
all of which is currently available for future offerings.




Cash
Activity





For
the Year Ended December 31, 2007





Net cash
provided by operating activities was $102.7 million for the year ended December
31, 2007.





Net cash
provided by investing activities was $65.9 million for the year ended December
31, 2007. During 2007 we sold four of our Mall Properties: Almeda Mall,
Montgomery Mall, Northwest Mall and University Mall. These sales were part of
our corporate strategy to upgrade the quality of our portfolio. We also sold a
vacant anchor store at Ohio River Plaza. Overall, we received $205.4 million for
these sales. Offsetting this increase to cash was our   $95.5
million investment in real estate. Of this amount, we spent $45.5 million on
redevelopment projects. We have spent $9.4 million at Polaris for the addition
of a lifestyle component. We anticipate this redevelopment to be completed in
late 2008. Also, we spent $12.9 million at The Mall of Johnson City, the
majority of which is for a Dick’s Sporting Goods, as well as $5.1 million for
the construction of a diner at Jersey Gardens Center. We spent $3.2 million at
Grand Central Mall for the Mid Ohio Medical Center in the former Kroger
building. We also spent $11.6 million for renovations with no incremental
increase in GLA; the majority of this was spent at Lloyd Center for Nordstrom’s
as well as the interior renovation to that Property.  We spent $16.2
million on replacing existing in-line and anchor space. Furthermore we spent
$5.7 million on new developments. Of this amount, $5.0 million was spent on Vero
Beach Fountains, LLC, a consolidated joint venture for the potential development
of an approximately 440,000 square foot lifestyle center on 46 acres of land in
Vero Beach, Florida.  The remaining amounts were spent on operational
capital expenditures. On October 9, 2007, we purchased Merritt for $30.0 million
in cash and the assumption of $57.0 million of outstanding mortgage debt.
Lastly, during 2007 we spent $11.6 million on our investment in joint ventures.
Of this, $5.8 million was used for a renovation program at
Puente.  Another $4.5 million was invested in our Scottsdale Quarter
development, an approximately 650,000 square foot complex consisting of
approximately 380,000 square feet of retail space with approximately 270,000
square feet of additional office space constructed above the retail units
(“Scottsdale Development”).





33


Net cash
used in financing activities was $158.2 million for the year ended December 31,
2007. During 2007, we repaid $107.2 million of principal on existing mortgage
debt.  This includes debt in the amount of $57.7 million extinguished
in connection with the sale of Montgomery Mall, Almeda Mall and Northwest Mall.
We also repaid an existing mortgage note at Colonial Park Mall in the amount of
$32.0 million. The remaining mortgage payments were part of normal principal
amortization payments.  We also paid $94.7 million in dividends to
holders of our Common Shares, OP Units, and preferred
shares.  Offsetting these uses of cash, we received $28 million from
borrowings on our Credit Facility.





For
the Year Ended December 31, 2006





Net cash
provided by operating activities was $96.2 million for the year ended December
31, 2006.





Net cash
used in investing activities was $108.9 million for the year ended December 31,
2006. On January 17, 2006, we purchased Tulsa, a 927,000 square foot enclosed
regional mall located in Tulsa, Oklahoma for $55.7 million.  This
Property was wholly owned until March 14, 2006 when we received $11.3 million
upon transfer of this Property to the ORC Venture. Also, we paid $77.1 million
towards our investment in real estate.  Of this amount, we spent $29.2
million on constructing additional GLA and interior renovations, primarily at
The Dayton Mall, Eastland Ohio, Northtown Mall, and Lloyd Center.  We
also spent $21.4 million on tenant improvements to re-tenant existing spaces.
Another $9.4 million was spent on operational capital
expenditures.  The remaining amounts pertain to corporate projects,
capitalized wages, real estate taxes and interest. We also invested $13.3
million in our unconsolidated properties.  During September 2006, we
paid $1.9 million to enter into a joint venture in Surprise, Arizona to develop
a 27,000 square foot retail development (“Surprise Venture”).  During
December 2006, we invested $10.3 million in a joint venture to develop a 650,000
square foot premium retail and office complex in Scottsdale, Arizona
(“Scottsdale Venture”).  We also increased our investment in Puente by
$1.0 million to fund that Property’s ongoing redevelopment
program.  Offsetting this was the receipt of $24.7 million in
connection with the sale of seven non-strategic Community Center assets and $6.8
million received from the sale of outparcels.





Net cash
provided by financing activities was $16.6 million for the year ended December
31, 2006.  During 2006, we received $168.3 million from the issuance
of new mortgage debt.  This increase was primarily the result of the
$35.0 million mortgage on Tulsa entered into subsequent to our acquisition of
that particular Mall and the $133.0 million of new mortgage debt associated with
the refinancings of Weberstown Mall, Eastland Ohio, and The Great Mall of the
Great Plains (“Great Mall”).  We also received net proceeds of $122.0
million from our Credit Facility. These proceeds were used primarily to fund our
initial investments in both our Surprise Venture and Scottsdale
Venture.  We also used these proceeds to defease our University Mall
mortgage debt.  Offsetting these increases to cash were principal
payments of $179.5 million relating to mortgage loans.  During 2006,
we repaid mortgage debt totaling $153.6 million associated with University Mall,
Weberstown Mall, Eastland Ohio, and Great Mall.  We also repaid $7.7
million of mortgage debt associated with Properties sold during 2006. The
remaining payments were normal principal payments associated with mortgage
debt.  Lastly, we paid $93.8 million in dividend distributions to
holders of our Common Shares, OP Units, and preferred shares.





For
the Year Ended December 31, 2005





Net cash
provided by operating activities was $108.3 million for the year ended December
31, 2005.





Net cash
used in investing activities was $120.2 million for the year ended December 31,
2005. During 2005, we spent $95.9 million towards our investment in real estate
for: (i) $63.9 million to construct additional GLA and interior renovations,
primarily at Eastland Ohio, The Mall at Fairfield Commons, The Dayton Mall,
Lloyd Center, and Northtown Mall as well as the purchase of vacant anchor space
at Polaris, (ii) $12.8 million on tenant improvements and allowances to
re-tenant existing space, (iii) $7.7 million for the acquisition of land in
connection with the development of an anchored retail project to serve the
Cincinnati, Ohio market, (iv) $4.6 million on operational capital expenditures,
and (v) $6.9 million on other items such as corporate projects, capitalized
wages, real estate taxes and interest. We also spent $44.2 million in connection
with our investment, through the ORC Venture, in Puente. The remaining amounts
pertain to corporate projects, capitalized wages, real estate taxes and
interest. Offsetting these capital outlays, we received $23.6 million in
proceeds from the sale of: (i) Southside Mall, ($13.0 million), (ii) the former
Lord & Taylor anchor space at Polaris ($5.3 million), and (iii) the sale of
five Community Centers ($5.3 million). We also received $3.0 million from the
sale of outparcels.





34


Net cash
provided by financing activities was $11.2 million for the year ended December
31, 2005. During 2005, we received $111.7 from the issuance of mortgage notes
payable. These funds were received in connection with the new $44.0 million
mortgage loan on Montgomery Mall, the new $50.0 million mortgage loan on River
Valley Mall, and $17.7 million for the construction loan in connection with the
redevelopment activities at Eastland Ohio. Also, we received net proceeds of
$76.0 million from our Prior Credit Facility of which the majority of the
proceeds were used to fund numerous redevelopment projects that are currently
ongoing. Offsetting these increases was the $88.4 million paid for principal
payments on existing mortgage debt. This amount consisted of the extinguishment
of the existing mortgage on Montgomery Mall and Southside Mall as well as normal
principal payments. We also paid $92.9 million in dividend distributions to
holders of our Common Shares, OP Units and preferred shares.





Financing
Activity





Total
debt decreased by $24.7 million during 2007.  The change in
outstanding borrowings is summarized as follows (in
thousands):


Mortgage
            
            
            Notes
            
            
            TotalNotes
            
            
            Payable
            
            
            DebtDecember
      31, 2006
            
            $
            1,304,886
            
            
            $
            272,000
            
            
            $
            1,576,886New
      mortgage debt
            
            
            57,000
            
            
            
            -
            
            
            
            57,000Fair
      value adjustment
            
            
            (2,075
            )
            
            
            -
            
            
            
            (2,075
            )Repayment
      of debt
            
            
            (89,781
            )
            
            
            -
            
            
            
            (89,781
            )Debt
      amortization payments in 2007
            
            
            (17,457
            )
            
            
            -
            
            
            
            (17,457
            )Amortization
      of fair value adjustment
            
            
            (363
            )
            
            
            -
            
            
            
            (363
            )Net
      borrowings, line of credit
            
            
            -
            
            
            
            28,000
            
            
            
            28,000December
      31, 2007
            
            $
            1,252,210
            
            
            $
            300,000
            
            
            $
            1,552,210





During
2007, we increased our net borrowings under our Credit Facility and made
recurring principal payments on our fixed rate debt. We also paid off $25
million of variable rate debt associated with Montgomery Mall, $33 million of
fixed rate debt associated with Almeda and Northwest Malls (SAN Mall) and $32
million of fixed rate debt associated with Colonial Park Mall. These payments
were primarily funded through proceeds from asset sales.  On October
9, 2007, we purchased Merritt which included the assumption of $57 million in
fixed rate mortgage debt (the “Merritt Loan”).  The Merritt Loan is
represented by a promissory note secured by a first mortgage lien and assignment
of leases and rents on Merritt.  The Merritt Loan has a fixed interest
rate of 5.35% per annum and a maturity date of September 1,
2015.  Under the Merritt Loan, we are required to make periodic
payments of interest only through September 1, 2010 after which principal and
interest payments will be made through the remainder of the term.  We
are not permitted under the Merritt Loan to make any prepayments on outstanding
principal until six months prior to the maturity date.





At
December 31, 2007, our mortgage notes payable were collateralized with first
mortgage liens on 19 Properties having a net book value of $1,399.8
million.  We also owned five unencumbered Properties and other
corporate assets having a net book value of $206.8 million at that
date.





Certain
of our loans are subject to guarantees and financial covenants and one of our
loans has multiple Properties as collateral with cross-default
provisions.  Under the cross-default provisions, a default under a
single mortgage that is cross collateralized may constitute a default under all
of the mortgages in the pool of such a cross-collateralized loan and could lead
to acceleration of the indebtedness on all Properties under such
loan.  Properties that are subject to cross-default provisions relate
to the Morgantown Mall Associates LP loan having a total net book value of $41.0
million, and represent one Community Center and one Mall.





Financing Activity – Joint
Ventures





Total joint venture debt increased by
$1.1 million during 2007.  The change in outstanding borrowings is
summarized as follows (in thousands):





35


Mortgage Notes
            
            
            GRT ShareDecember
      31, 2006
            
            $
            122,099
            
            
            $
            63,492New
      mortgage debt
            
            
            2,400
            
            
            
            1,200Debt
      amortization payments in 2007
            
            
            (1,491
            )
            
            
            (775
            )Amortization
      of fair value adjustment
            
            
            195
            
            
            
            101December
      31, 2007
            
            $
            123,203
            
            
            $
            64,018




On November 5, 2007, we closed on a
$7.2 million construction loan for our Surprise Venture (the “Surprise
Loan”).  The Surprise Loan bears interest at LIBOR plus 175 basis
points and matures on October 1, 2009 with one 12 month extension
available.  As of December 31, 2007, $2.4 million was drawn under the
construction loan.





On
November 30, 2007, we closed on a $220 million construction loan for our
Scottsdale Development project.  The loan bears interest at LIBOR plus
150 basis points and matures on May 29, 2011 with two 12 month extensions
available.  As of December 31, 2007, we had no borrowings on the
loan.





At
December 31, 2007, the mortgage notes payable associated with our ORC Venture
Properties were collateralized with first mortgage liens on two Properties
having a net book value of $248.1 million.  At December 31, 2007, the
construction notes payable were collateralized with first mortgage liens on two
properties having a net book value of $21.8 million.





Contractual
Obligations and Commitments





The
following table shows the Company’s contractual obligations and commitments as
of December 31, 2007 related to our consolidated operations as well as our
pro-rata share of our obligations under our joint venture arrangements (in
thousands):




Consolidated
      Obligations and Commitments:
            
            Total
            
            
            2008
            
            
            
            2009-2010
            
            
            
            2011-2012
            
            
            ThereafterLong-term
      debt (includes interest payments)
            
            $
            1,958,712
            
            
            $
            193,000
            
            
            $
            628,478
            
            
            $
            293,991
            
            
            $
            843,243Distribution
      obligations
            
            
            41,276
            
            
            
            36,469
            
            
            
            4,807
            
            
            
            -
            
            
            
            -OP
      Unit redemptions
            
            
            43,830
            
            
            
            43,830
            
            
            
            -
            
            
            
            -
            
            
            
            -Lease
      obligations
            
            
            7,474
            
            
            
            1,315
            
            
            
            1,888
            
            
            
            1,341
            
            
            
            2,930Tenant
      allowances
            
            
            13,460
            
            
            
            13,460
            
            
            
            -
            
            
            
            -Purchase
      obligations
            
            
            4,563
            
            
            
            4,563
            
            
            
            -
            
            
            
            -
            
            
            
            -Total
      consolidated obligations and commitments
            
            $
            2,069,315
            
            
            $
            292,637
            
            
            $
            635,173
            
            
            $
            295,332
            
            
            $
            846,173




Pro-rata
      share of joint venture obligations:
            
            Total
            
            
            2008
            
            
            
            2009-2010
            
            
            
            2011-2012
            
            
            ThereafterGround
      lease obligation
            
            $
            140,922
            
            
            $
            2,639
            
            
            $
            5,397
            
            
            $
            5,560
            
            
            $
            127,326Long-term
      debt (includes interest payments)
            
            
            67,139
            
            
            
            47,309
            
            
            
            19,830
            
            
            
            -
            
            
            
            -Tenant
      allowances
            
            
            5,938
            
            
            
            5,938
            
            
            
            -
            
            
            
            -
            
            
            
            -Purchase
      obligations
            
            
            4,761
            
            
            
            4,761
            
            
            
            -
            
            
            
            -
            
            
            
            -Total
      commercial obligations
            
            $
            218,760
            
            
            $
            60,647
            
            
            $
            25,227
            
            
            $
            5,560
            
            
            $
            127,326




Consolidated Obligations and
Commitments





Long-term
debt obligations are shown including both scheduled interest and principal
payments.  The nature of the obligations is disclosed in the Notes to
the consolidated financial statements.





At
December 31, 2007, we had the following obligations relating to dividend
distributions.  In the fourth quarter of 2007, the Company declared
distributions of $0.4808 per Common Share ($19.6 million) to be paid during the
first quarter of 2008.  Series F Preferred Shares and Series G
Preferred Shares are not required to be redeemed and therefore, the dividends on
those shares may be paid in perpetuity.  However, as the Series F
Preferred Shares are redeemable at our option on or after August 25, 2008, the
obligation for the dividends for the Series F Preferred Shares are included in
the contractual obligations through that date.  Also, as the Series G
Preferred Shares are redeemable at our option on or after February 23, 2009, the
obligation for the dividends for the Series G Preferred Shares are also included
in the contractual obligations through that date.  The total dividend
obligation for the Series F Preferred Shares and Series G Preferred Shares is
$4.7 million and $17.0 million, respectively.





Lease
obligations include both our capital and operating lease
obligations.  Capital lease obligations are for security equipment and
generators at various Properties and are included in accounts payable and
accrued expenses in the consolidated balance sheet.  Operating lease
obligations are for office space, ground leases, phone systems, office
equipment, computer equipment and other miscellaneous items.  The
obligation for these leases at December 31, 2007 was $7.5 million.





36


At
December 31, 2007, we had executed leases committing to $13.5 million in tenant
allowances.  The leases will generate gross rents of approximately
$85.4 million over the original lease term. Purchase obligations relate
primarily to construction contract commitments.





At
December 31, 2007, there were approximately 3.0 million OP Units
outstanding.  These OP Units are redeemable, at the option of the
holders, beginning on the first anniversary of their issuance.  The
redemption price for an OP Unit shall be, at the option of GPLP, payable in the
following form and amount: (a) cash at a price equal to the fair market value of
one Common Share of the Company or (b) Common Shares at the exchange ratio of
one share for each OP Unit.  The fair value of the OP Units
outstanding at December 31, 2007 is $43.8 million based upon a per unit value of
$14.67 at December 31, 2007, (based upon a five-day average of the Common Stock
price from December 21, 2007 to December 28, 2007).





Pro-rata share of joint
venture obligations





In the
second quarter of 2006, the Company announced the Scottsdale Development, a
joint venture between GPLP and WC Kierland Crossing, LLC, an affiliate of the
Wolff Company.  The parties will conduct the operations of the
Scottsdale Development through a limited liability company (“LLC Co.”) of which
GPLP is the managing member.  LLC Co. will coordinate and manage the
construction of the Scottsdale Development.  GPLP has made capital
contributions of approximately $14.8 million to LLC Co. and holds a 50% common
interest on $10.8 million of our investment and has a preferred interest on $4.0
million of our investment in LLC Co.  Upon completion of the
Scottsdale Development, LLC Co. will own and operate (on land subject to a
ground lease, the landlord of which is an affiliate of Wolff Company, under
which LLC Co. is the tenant) the Scottsdale Development.  Related to
the Scottsdale Venture, the Company and LLC Co. have the following
commitments:





o
            Letter of
      Credit:  LLC Co. has provided a letter of credit in the
      amount of $20 million to serve as security for the construction at the
      Scottsdale Development.  LLC Co. shall maintain the letter of
      credit until substantial completion of the construction of the Scottsdale
      Development occurs.  LLC Co. has also provided a letter of
      credit in the amount of $1.026 million as collateral for fees and claims
      arising from the OCIP (Owner Controlled Insurance Program) that will be in
      place during construction.





o
            Lease
      Payment:LLC Co. shall make rent payments under a ground
      lease executed as part of the Scottsdale Venture.  The initial
      base rent under the ground lease is $5.2 million per year during the first
      year of the lease term and shall be periodically increased from 1.5% to 2%
      during the lease term until the fortieth year of the lease term and marked
      to market with a floor thereafter (“Base Rent”).  Additionally,
      LLC Co. has provided the landlord with a security deposit consisting of a
      portfolio of U.S. government securities valued at approximately $19
      million (the “Deposit”) which will be used: (i) to make Base Rent payments
      under the ground lease for the first forty-seven months of the ground
      lease’s initial term and (ii) as security for LLC Co.’s performance under
      the ground lease. After the first forty-seven months of the ground lease’s
      initial term, any remaining portion of the Deposit shall be returned to
      LLC Co.





o
            Property
      Purchase:LLC Co. will purchase certain retail units
      consisting of approximately 70,000 square feet in a condominium to be
      built as a part of the Scottsdale Development at a price of $181 per
      square foot.





The
long-term debt obligation is our pro-rata share of the scheduled payments of
interest and principal related to our loans at Puente and Tulsa.  The
construction loan obligation is our pro-rata share of the scheduled payments of
principal and interest related to the loan at our Surprise Venture
project.  The tenant allowances relate to both the ORC Venture and the
Scottsdale Venture for tenants who have signed leases at our Puente, Scottsdale
Development, and Tulsa Properties.  Our pro-rata share of purchase
obligations primarily relate to construction commitments for our
redevelopment/development work at Puente, Scottsdale Development, and Surprise
Peripheral.








37




Capital
Expenditures





We plan
our capital expenditures by considering various factors such as: return on
investment, our five-year capital plan for major facility expenditures such as
roof and parking lot repairs, and tenant construction allowances based upon the
economics of the lease terms and cash available for making such
expenditures.  We categorize our capital expenditures into two broad
categories, first-generation and second-generation expenditures.  The
first-generation expenditures relate to incremental revenues associated with new
developments or creation of new GLA at our existing
Properties.  Second-generation expenditures are those expenditures
associated with maintaining the current income stream and are generally
expenditures made to maintain the Properties and to replace tenants for spaces
that have been previously occupied. Capital expenditures are generally
accumulated into a project and classified as “developments in progress” on the
consolidated balance sheet until such time as the project is
completed.  At the time the project is complete, the dollars are
transferred to the appropriate category on the balance sheet and are depreciated
on a straight-line basis over the estimated useful life of the
asset.





The table
below provides the amounts we spent on our capital expenditures:




Capital
      Expenditures For the Year Ended December 31, 2007Joint
      VentureConsolidated
            
            
            ProportionateProperties
            
            
            Share
            
            
            TotalNew
      developments
            
            $
            5,696
            
            
            $
            5,630
            
            
            $
            11,326Redevelopment
      projects
            
            $
            45,548
            
            
            $
            409
            
            
            $
            45,957Renovation
      with no incremental GLA
            
            $
            11,626
            
            
            $
            6,526
            
            
            $
            18,152Property
      Capital Expenditures:Tenant
      improvements and tenant allowances:Anchor
      replacement
            
            $
            2,213
            
            
            $
            170
            
            
            $
            2,383Non-anchor
      replacement
            
            
            14,028
            
            
            
            257
            
            
            
            14,285Operational
      capital expenditures
            
            
            7,050
            
            
            
            413
            
            
            
            7,463Total
      Property Capital Expenditures
            
            $
            23,291
            
            
            $
            840
            
            
            $
            24,131





Our new
development spending relates to our investment in a new development in Vero
Beach, Florida and our share of the investment in our Scottsdale
Development.





Our
redevelopment expenditures relate primarily to the following projects: our new
lifestyle component at Polaris; the addition of a new anchor store (Dick’s
Sporting Goods) that opened in 2007 at The Mall of Johnson City, in Johnson
City, Tennessee, construction of a new medical center at Grand Central Mall in
Parkersburg, West Virginia, and a new diner restaurant at Jersey Gardens Center
in Elizabeth, New Jersey.





Our
renovation costs primarily relate to renovations of the common area and the
Nordstrom department store at our Lloyd Center in Portland, Oregon.





Our
tenant improvement dollars are the result of the high volume of leasing activity
that occurred during 2006 and 2007.  Our average tenant improvement
dollars approximate $30 per square foot for new stores.





Off-Balance Sheet
Arrangements





We have
no off-balance sheet arrangements (as defined in Item 303 of Regulation
S-K).





Acquisitions of Additional
Properties





In
December 2005, we formed the ORC Venture with ORC, an affiliate of Oxford, which
is the global real estate platform for the Ontario (Canada) Municipal Employees
Retirement System, a Canadian pension plan.  The initial acquisition
of the ORC Venture was the $170.1 million purchase of Puente.  We have
a 52% interest in the ORC Venture and ORC has a 48% interest, but GPLP will be
entitled to certain preferred payments provided that ORC earns a specified rate
of return. In
connection with the acquisition, the ORC Venture assumed an $88.8 million
non-recourse mortgage loan, with the remainder of the purchase price being
funded by contributions to the ORC Venture from GPLP and ORC.




38


In addition to our acquisition of
Puente through the ORC Venture, we also acquired Tulsa on January 17, 2006.
Tulsa is a regional mall located in Tulsa, Oklahoma with approximately 927,000
square feet of GLA.  The purchase price was $58.3 million and we did
not assume any debt in connection with this purchase.  We funded the
acquisition with funds made available through our Prior Credit
Facility.  On March 14, 2006, we transferred our 100% interest in
Tulsa into the ORC Venture and continue to hold a 52% interest through the joint
venture.





Expansion,
Renovation and Development Activity





We
continue to be active in expansion, renovation and development
activities.  Our business strategy is to enhance the quality of the
Company’s assets, with the expectation that it will lead to improved cash flow
and greater shareholder value.





Expansions and
Renovations





We
maintain a strategy of selective expansions and renovations in order to improve
the operating performance and the competitive position of our existing
portfolio.  We also engage in an active redevelopment program with the
objective of attracting innovative retailers, which we believe will enhance the
operating performance of the Properties.





Malls





The
redevelopment project at Polaris centers around the replacement of a former
Kauffman’s anchor store, which we purchased from Macy’s in the second quarter of
2007.  Construction has already commenced on the 160,000 square foot
open-air addition.  We are targeting a holiday opening in 2008 and
expect to generate close to an 8% return on our $46 million
investment.





We
purchased the former Macy’s space at Eastland Ohio.  We will be moving
JCPenney into their new prototype on this parcel with plans to backfill
JCPenney’s current space on center court with in-line stores.





We have
redevelopment plans for The Mall at Johnson City in Johnson City,
Tennessee.  A new Dick’s Sporting Goods store opened in September
2007.  Additionally, a store remodeling and the addition of
approximately 35,000 square feet to the JCPenney anchor store is
underway.





At
Ashland Town Center, in Ashland, Kentucky, JCPenney plans to move into their new
prototype on the former Wal-Mart parcel.  We will be looking to
replace their current space with either several big box type retailers or
another fashion department store.





At
Northtown Mall, in Blaine, Minnesota, we executed a lease agreement to bring a
Herberger’s department store to the Mall in the final available anchor space at
the center.  The addition of Herberger’s, a fashion anchor, in this
market is a significant step forward for the center. We also signed a lease with
LA Fitness and expect to build a new junior anchor store at Northtown Mall for
this tenant.





Developments





One of
our objectives is to enhance portfolio quality by developing new retail
properties.  Our management team has developed over 100 retail
properties nationwide and has significant experience in all phases of the
development process including site selection, zoning, design, pre-development
leasing, construction financing and construction management.





We plan
to invest approximately $250 million in the Scottsdale Development through our
Scottsdale Venture.  The stabilized return is expected to yield
8%.  The Scottsdale Venture has retained a third party company to
lease the office portion of the project.  The Scottsdale Venture
entered into a long-term ground lease for property on which the project will be
constructed.  We own a 50% interest in the Scottsdale Venture and will
operate and lease the retail portion of the project under a separate management
agreement.  Our Scottsdale Development will be adjacent to a hotel and
residential complex that will be developed independently by affiliates of The
Wolff Company, an affiliate of which is our joint venture partner in this
development.  Once completed, we anticipate that the Scottsdale
Development will be a dynamic, outdoor urban environment featuring sophisticated
architectural design, comfortable pedestrian plazas, a grand central park space,
and a variety of upscale shopping, dining and entertainment
options.  We have begun construction on this development project and
expect initial store openings in 2008 with the remainder of phase I stores
opening in 2009.




39


A new
retail multi-tenant building is under construction on a site in Surprise,
Arizona (northwest of Phoenix).  This five-acre development will
consist of approximately 24,755 square feet of new retail space.  We
expect stores to begin opening in the fall of 2008.  We own this
development through our Surprise Venture.





On
October 5, 2007, GRT, through a subsidiary entity, entered into a new joint
venture agreement for the potential development of an approximate 440,000 square
foot lifestyle center on 46 acres of undeveloped land in Vero Beach,
Florida.





Portfolio
Data





The table
below reflects Mall sales per square foot (“Sales PSF”) for those tenants (in
stores less than 10,000 square feet) reporting sales for the twelve-month period
ended December 31, 2007.  The table excludes non-comparable properties
as well as our held-for-sale assets.  The percentage change is based
on those tenants reporting sales (“Same Store”) for the twenty-four month period
ended December 31, 2007.




Wholly
      Owned
            
            
            Total
      Mall PropertiesHeld-for-Investment
            
            
            Held-for-InvestmentMall Properties
            
            
            Including ORC VentureAverage
            
            
            Same
      Store
            
            
            Average
            
            
            Same
      StoreSales PSF
            
            
            % Change
            
            
            Sales PSF
            
            
            % ChangeAnchors
            
            
            $151
            
            
            
            0.8
            %
            
            
            
            $149
            
            
            
            1.0
            %Stores
      (1)
            
            
            $370
            
            
            
            (1.0
            )%
            
            
            
            $362
            
            
            
            (0.8
            )%Total
            
            
            $247
            
            
            
            (0.7
            )%
            
            
            
            $243
            
            
            
            (0.6
            )%




(1)


Average
mall store sales for the 12 months ended December 31, 2007 were $370 per square
foot, a 2% decrease from the $377 per square foot reported for the twelve months
ended December 31, 2006.  Comparable stores sales, which include only
those stores open for the twelve months ended December 31, 2007 and the same
period of 2006, decreased approximately 2%.  Retail sales were down
for many national retailers due to the general market and economic factors
during the 2007 holiday season.





Portfolio
occupancy statistics by property type are summarized below:




Occupancy (1)12/31/07
            
            9/30/07
            
            6/30/07
            3/31/07
            
            12/31/06Wholly-owned
      Malls:Mall
      Anchors
            97.2%
            
            94.1%
            
            95.1%
            93.6%
            
            93.9%Mall
      Stores
            92.9%
            
            91.6%
            
            90.5%
            89.2%
            
            91.7%Total
      Consolidated Mall Portfolio
            95.6%
            
            93.2%
            
            93.5%
            92.0%
            
            93.1%Mall Portfolio
      including ORC Venture:Mall
      Anchors
            97.3%
            
            94.6%
            
            95.4%
            94.1%
            
            94.3%Mall
      Stores
            92.7%
            
            91.3%
            
            90.3%
            89.1%
            
            91.5%Total
      Mall Portfolio
            95.6%
            
            93.4%
            
            93.6%
            92.3%
            
            93.3%Wholly-owned Community
      Centers:Community
      Center Anchors
            88.2%
            
            81.1%
            
            81.1%
            81.1%
            
            81.1%Community
      Center Stores
            86.1%
            
            86.1%
            
            86.8%
            85.5%
            
            85.2%Total
      Community Center Portfolio
            87.7%
            
            82.4%
            
            82.6%
            82.2%
            
            82.2%Comparable Property
      Type (2)
            
            
            12/31/2007
            
            
            12/31/06Comparable
      Mall Stores
            
            93.1%
            
            
            93.4%Comparable
      Mall Portfolio
            
            95.6%
            
            
            95.3%




(1)
            Occupied
      space is defined as any space where a tenant is occupying the space or
      paying rent at the date indicated, excluding all tenants with leases
      having an initial term of less than one
year.


(2)
            Comparable
      occupancy rates (total portfolio including ORC Venture) exclude the
      Properties sold after 12/31/2006 from the 12/31/2006 occupancy calculation
      and those acquired after 12/31/2006 from the 12/31/2007
      calculation.





Mall store occupancy (for our
wholly-owned Malls) increased to 92.9% at December 31, 2007 from 91.7% at
December 31, 2006.  If our two held-for-sale assets are excluded,
store occupancy was 94.4% at December 31, 2007 compared to 94.3% at December 31,
2006.  Anchor store occupancy (for our wholly-owned Malls) increased
to 97.2% at December 31, 2007 from 93.9% at December 31,
2006.




40


Information
Technology





During
2007, we implemented a purchasing system within our Oracle business
system.   This provides additional controls related to our
project accounting and accounts payable processes. We also enhanced our business
intelligence platform whereby our Properties can now access all of their
financial information via electronic reporting. These key technology initiatives
will establish the platform for enhanced internal management reporting in
2008.





Accounting
Pronouncements





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities.” This standard permits companies to
make a one-time election to carry eligible types of financial assets and
liabilities at fair value (“FV”), even if FV measurement is not required under
GAAP. SFAS No. 159 is effective for fiscal years beginning after November 15,
2007 and early adoption is permitted. The Company did not elect early adoption
of SFAS No. 159 and is in the process of determining its impact on the Company’s
financial position or results of operations.





In late
2007, the FASB issued SFAS No. 141R, a revision of SFAS No. 141, “Accounting for
Business Combinations.”  This standard expands the use of fair value
principles as well as the treatment of pre-acquisition costs.  This
standard is effective for fiscal years beginning after December 15, 2008 (and
thus acquisitions after December 31, 2008).  The Company is evaluating
the impact of this standard as it relates to Company’s future
acquisitions.





In late
2007, the FASB issued SFAS No. 160, “Reporting for Minority
Interests.”  Currently, minority interest is not part of shareholders’
equity. Under SFAS No. 160, minority interest will become part of shareholders’
equity. This change may affect key financial ratios, such as debt to equity
ratios.  This standard is effective no later than for fiscal years
beginning after December 15, 2008.  The Company is evaluating the
impact of this standard as it relates to Company’s financial position, results
of operations and ratios.





In
February, 2008, FASB issued Staff Position No. FAS 157-2 which provides for a
one-year deferral of the effective date of SFAS 157 for non-financial assets and
liabilities that are recognized or disclosed at fair value in the financial
statements on a nonrecurring basis, except those that are recognized or
disclosed at fair value in the financial statements on a recurring basis. The
Company is evaluating the impact of this standard as it relates to the Company’s
financial position and results of operations.





Item
7A.  Quantitative and Qualitative Disclosures About Market
Risk





Our
primary market risk exposure is interest rate risk.  We use interest
rate protection agreements to manage interest rate risks associated with
long-term, floating rate debt.  At December 31, 2007, approximately
85.2% of our debt, after giving effect to interest rate protection agreements,
bore interest at fixed rates with a weighted-average maturity of 4.9 years and a
weighted-average interest rate of approximately 6.1%.  At December 31,
2006, approximately 85.6% of our debt, after giving effect to interest rate
protection agreements, bore interest at fixed rates with a weighted-average
maturity of 5.7 years, and a weighted-average interest rate of approximately
6.3%.  The remainder of our debt at December 31, 2007 and December 31,
2006, bears interest at variable rates with weighted-average interest rates of
approximately 5.7% and 6.6%, respectively.





At
December 31, 2007 and December 31, 2006, the fair value of our debt (excluding
our Credit Facility) was $1,247.0 million and $1,282.0 million, respectively,
compared to its carrying amounts of $1,252.2 million and $1,304.9 million,
respectively.  Our combined future earnings, cash flows and fair
values relating to financial instruments are dependent upon prevalent market
rates of interest, primarily LIBOR. Based upon consolidated indebtedness and
interest rates at December 31, 2007 and 2006, a 100 basis point increase in the
market rates of interest would decrease both future earnings and cash flows by
$2.3 million.  Also, the fair value of our debt would decrease by
approximately $46.4 million and $54.3 million, at December 31, 2007 and December
31, 2006, respectively.  A 100 basis point decrease in the market
rates of interest would increase future earnings and cash flows by $2.3 million,
for the year ended December 31, 2007 and 2006, respectively, and increase the
fair value of our debt by approximately $49.1 million and $57.8 million, at
December 31, 2007 and December 31, 2006, respectively. We have entered into
certain swap agreements which impact this analysis at certain LIBOR rate levels
(see Note 9 to the consolidated financial statements).





41





Item 8.   
Financial Statements and Supplementary Data





The consolidated financial statements
and financial statement schedules of GRT and the Report of the Independent
Registered Public Accounting Firm thereon, to be filed pursuant to this Item 8
are included in this report in Item 15.





Item
9.    Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure





None.





Item
9A.  Controls and Procedures





Disclosure Controls and
Procedures





The
Company’s management, with the participation of the Company’s Chief Executive
Officer and Chief Financial Officer, has evaluated the effectiveness of the
Company’s disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) as of the end of the period covered by this report. The
Company’s disclosure controls and procedures are designed to provide reasonable
assurance that information is recorded, processed, summarized and reported
accurately and on a timely basis in the Company’s periodic reports filed with
the SEC.  Based on such evaluation, the Company’s Chief Executive
Officer and Chief Financial Officer have concluded that, as of the end of such
period, the Company’s disclosure controls and procedures are effective to
provide reasonable assurance.  Notwithstanding the foregoing, a
control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that it will detect or uncover failures
within the Company to disclose material information otherwise required to be set
forth in the Company’s periodic reports.





Management’s Annual Report
on Internal Control Over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting to provide reasonable assurance regarding the
reliability of our financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles.





As of
December 31, 2007, management assessed the effectiveness of the Company's
internal control over financial reporting based on the criteria for effective
internal control over financial reporting established in "Internal Control --
Integrated Framework", issued by the Committee of Sponsoring Organizations of
the Treadway Commission.





Based on
this assessment, management has concluded that as of December 31, 2007, the
Company’s internal control over financial reporting was effective to provide
reasonable assurance regarding the reliability of our financial reporting and
the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.





Our
independent registered public accounting firm, BDO Seidman, LLP, assessed the
effectiveness of the Company’s internal control over financial
reporting.  BDO Seidman, LLP has issued an attestation report
concurring with management’s assessment, which is set forth below.








42




Report of Independent
Registered Public Accounting Firm on Internal Control


Over Financial
Reporting







Board of
Trustees and Shareholders


Glimcher
Realty Trust


Columbus,
Ohio




We have
audited Glimcher Realty Trust’s internal control over financial reporting as of
December 31, 2007, based on criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (the COSO criteria). Glimcher Realty Trust’s management is
responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Item 9A, Management’s Report on Internal
Control Over Financial Reporting. Our responsibility is to express an opinion on
the company’s internal control over financial reporting based on our
audit.




We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audit also included performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.




A
company’s internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial
statements.




Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.




In our
opinion, Glimcher Realty Trust maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2007, based on the
COSO criteria.




We also
have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the consolidated balance sheets of Glimcher
Realty Trust as of December 31, 2007 and 2006, and the related consolidated
statements of operations and comprehensive income, shareholders’ equity, and
cash flows for each of the three years in the period ended December 31, 2007 and
our report dated February 19, 2008 expressed  an unqualified opinion
on those consolidated financial statements.






/s/ BDO
Seidman, LLP


Chicago,
Illinois


February
19, 2008





Internal Control Over
Financial Reporting.




There
have not been any changes in our internal control over financial reporting (as
such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
during the last fiscal quarter to which this report relates that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.





43





Item
9B.  Other Information





None.





PART
III





Item
10.   Trustees, Executive Officers and Corporate
Governance





Information
regarding trustees, board committee members, corporate governance and the
executive officers of the Registrant is incorporated herein by reference to
GRT’s definitive proxy statement to be filed with the SEC within 120 days after
the end of the year covered by this Form 10-K with respect to the Annual
Meeting.





Item
11.   Executive Compensation





Information regarding executive
compensation of the Company’s executive officers is incorporated herein by
reference to the Registrant’s definitive proxy statement to be filed with the
SEC within 120 days after the end of the year covered by this Form 10-K with
respect to the Annual Meeting.





Item
12.  Security Ownership of Certain Beneficial Owners and Management and
Related Shareholder Matters


Information regarding the Company’s
equity compensation plans in effect as of December 31, 2007 is as
follows:





Equity Compensation
      Plan InformationPlan
      Category
            Number
      of securities to be issued
              upon
      exercise of outstanding options, warrants and rights
            Weighted
      average exercise price
              of
      outstanding options, warrants
              and
      rights
            Number
      of securities remainingavailable
      for future issuance under equity
      compensation plans(excluding
      securitiesreflected
      in column(a))equity
      compensation plans (excluding securities reflected in
      column(a)(a)
            (b)
            (c)Equity
      compensation plans approved
              by
      shareholders
            1,411,097
            $24.01
            2,803,647Equity
      compensation plans not approved
              by
      shareholders
            N/A
            N/A
            N/A





Additional
information regarding security ownership of certain beneficial owners and
management of the Registrant is incorporated herein by reference to GRT’s
definitive proxy statement to be filed with the SEC within 120 days after the
end of the year covered by this Form 10-K with respect to the Annual
Meeting.





Item
13.    Certain Relationships and Related Transactions, and
Trustee Independence





Information
regarding certain relationships, related transactions and trustee independence
of the Company is incorporated herein by reference to GRT’s definitive proxy
statement to be filed with the SEC within 120 days after the end of the year
covered by this Form 10-K with respect to the Annual Meeting.





Item
14.   Principal Accountant Fees and Services





Information
regarding principal accountant fees and services of the Company is incorporated
herein by reference to GRT’s definitive proxy statement to be filed with the SEC
within 120 days after the end of the year covered by this Form 10-K with respect
to the Annual Meeting.





44




PART
IV





Item
15.   Exhibits and Financial Statements




(1)
              Financial
      Statements
              Page
      Number-  
      Report of Independent Registered Public Accounting Firm
              53-  
      Glimcher Realty Trust Consolidated Balance Sheets as ofDecember
      31, 2007 and 2006
              54-  
      Glimcher Realty Trust Consolidated Statements of Operations
      andComprehensive
      Income for the years ended December 31, 2007, 2006 and
2005
              55-  
      Glimcher Realty Trust Consolidated Statements of
    Shareholders’Equity
      for the years ended December 31, 2007, 2006 and 2005
              56-  
      Glimcher Realty Trust Consolidated Statements of Cash
Flowsfor
      the years ended December 31, 2007, 2006 and 2005
              57-  
      Notes to Consolidated Financial Statements
              58(2)
              Financial Statement
      Schedules-  
      Schedule III - Real Estate and Accumulated Depreciation
              83-  
      Notes to Schedule III
              86(3)
              Exhibits




3.1
            Amended
      and Restated Declaration of Trust of Glimcher Realty Trust.
      (1)3.2
            Amended
      and Restated Bylaws. (5)3.3
            Amendment
      to the Company's Amended and Restated Declaration of Trust.
      (2)3.4
            Limited
      Partnership Agreement of Glimcher Properties Limited Partnership.
      (3)3.5
            Amendment
      to Limited Partnership Agreement of Glimcher Properties Limited
      Partnership. (3)3.6
            Amendment
      No. 1 to Limited Partnership Agreement of Glimcher Properties Limited
      Partnership. (3)3.7
            Amendment
      No. 2 to Limited Partnership Agreement of Glimcher Properties Limited
      Partnership. (3)3.8
            Amendment
      No. 3 to Limited Partnership Agreement of Glimcher Properties Limited
      Partnership. (3)3.9
            Amendment
      No. 4 to Limited Partnership Agreement of Glimcher Properties Limited
      Partnership. (3)3.10
            Amendment
      No. 7 to Limited Partnership Agreement of Glimcher Properties Limited
      Partnership dated August 7, 2003. (8)3.11
            Amendment
      No. 8 to Limited Partnership Agreement of Glimcher Properties Limited
      Partnership. (10)3.12
            Articles
      Supplementary classifying 2,800,000 Shares of Beneficial Interest as 8.75%
      Series F Cumulative Redeemable Preferred Shares of Beneficial Interest of
      the Registrant. (15)3.13
            Articles
      Supplementary Classifying 6,900,000 Shares of Beneficial Interest as
      8.125% Series G Cumulative Redeemable Preferred Shares of Beneficial
      Interest of the Registrant, par value $0.01 per share.
  (16)4.1
            Specimen
      Certificate for Common Shares of Beneficial Interest.
  (1)4.2
            Specimen
      Certificate for evidencing 8.75% Series F Cumulative Redeemable Preferred
      Shares of Beneficial Interest. (15)4.3
            Specimen
      Certificate for evidencing 8.125% Series G Cumulative Redeemable Preferred
      Shares of Beneficial Interest. (16)4.5
            Rights
      Agreement, dated as of March 9, 1999, between Glimcher Realty Trust and
      the Harris Trust and Savings Bank (n/k/a Computershare Investor Services,
      LLC). (25)10.01
            Consulting
      Agreement, dated February 22, 2007, between Glimcher Realty Trust and
      Philip G. Barach. (26)10.02
            2007
      Long Term Incentive Plan for Senior Executives. (33)10.03
            Glimcher
      Realty Trust 1997 Incentive Plan. (3)10.04
            Glimcher
      Realty Trust Amended and Restated 2004 Incentive Compensation Plan.
      (17)10.05
            Severance
      Benefits Agreement, dated February 22, 2007, between Glimcher Realty
      Trust, Glimcher Properties Limited Partnership and Kim A.
      Rieck.10.06
            Severance
      Benefits Agreement, dated June 11, 1997, by and among Glimcher Realty
      Trust, Glimcher Properties Limited Partnership and Herbert Glimcher.
      (3)10.07
            Amendment
      No. 1 to the Employment and Consulting Agreement, dated as of July 25,
      2007, by and between Glimcher Realty Trust, Glimcher Properties Limited
      Partnership, and Herbert Glimcher. (32)10.08
            Severance
      Benefits Agreement dated June 11, 1997, by and among Glimcher Realty
      Trust, Glimcher Properties Limited Partnership and Michael P. Glimcher.
      (3)




45


10.09
            Severance
      Benefits Agreement, dated June 11, 1997, by and among Glimcher Realty
      Trust, Glimcher Properties Limited Partnership and George
      A.  Schmidt. (3)10.10
            Severance
      Benefits Agreement, dated June 26, 2002, by and among Glimcher Realty
      Trust, Glimcher Properties Limited Partnership and Thomas J. Drought, Jr.
      (20)10.11
            Severance
      Benefits Agreement, dated June 28, 2004 by and among Glimcher Realty
      Trust, Glimcher Properties Limited Partnership and Lisa A. Indest.
      (22)10.12
            Severance
      Benefits Agreement, dated August 30, 2004, by and among Glimcher Realty
      Trust, Glimcher Properties Limited Partnership and Mark E. Yale.
      (11)10.13
            Severance
      Benefits Agreement, dated May 16, 2005, by and among Glimcher Realty
      Trust, Glimcher Properties Limited Partnership and Marshall A. Loeb.
      (24)10.14
            First
      Amendment to the Severance Benefits Agreement, dated September 8, 2006, by
      and between Glimcher Realty Trust, Glimcher Properties Limited
      Partnership, and Mark E. Yale. (7)10.15
            Offer
      Letter of Employment to Marshall A. Loeb, dated April 26, 2005.
      (23)10.16
            Agreement
      of Sale and Purchase, dated April 25, 2007, by and between Glimcher
      University Mall, L.P. and Somera Capital Management, LLC, as amended.
      (27)10.17
            Membership
      Interest Purchase and Sale Agreement, dated as of July 19, 2007, by and
      between Thor Urban Operating Fund, L.P. and Glimcher Properties Limited
      Partnership, as amended. (32)10.18
            Amendment
      to Membership Interest Purchase and Sale Agreement, dated as of August 6,
      2007, between Thor Urban Operating Fund, L.P. and Glimcher Properties
      Limited Partnership. (32)10.19
            Assignment
      and Assumption of Membership Interests, dated as of October 9, 2007,
      between Thor Urban Operating Fund, L.P. and Glimcher Properties Limited
      Partnership. (32)10.20
            Guaranty
      of Insurance Deductible, dated as of October 9, 2007, by Thor MS, LLC,
      Thor Merritt Square, LLC, Glimcher Properties Limited Partnership and
      LaSalle Bank National Associations, as trustee for Morgan Stanley Capital
      I Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-IQ11.
      (32)10.21
            Consent
      Agreement, dated as of October 9, 2007, by and among LaSalle Bank National
      Associations, as trustee for Morgan Stanley Capital I Inc., Commercial
      Mortgage Pass-Through Certificates, Series 2006-IQ11, Thor MS, LLC, Thor
      Merritt Square, LLC, Glimcher MS, LLC, Glimcher Merritt Square, LLC, Thor
      Urban Operating Fund, L.P., and Glimcher Properties Limited Partnership.
      (32)10.22
            Substitution
      of Guarantor, dated as of October 9, 2007, by Glimcher Properties Limited
      Partnership, Thor Urban Operating Fund, L.P., and LaSalle National Bank
      Associations, as trustee for Morgan Stanley Capital I Inc., Commercial
      Mortgage Pass-Through Certificates, Series 2006-IQ11.
  (32)10.23
            Defeasance
      Pledge And Security Agreement, dated as of December 22, 2006, by and among
      Glimcher University Mall Limited Partnership, LaSalle National Bank
      Association (f/k/a Lasalle National Bank), as Trustee for Nomura Asset
      Securities Corporation, Commercial Mortgage Pass-Through Certificates,
      Series 1998-D6, and Wells Fargo Bank, N.A. (34)10.24
            Defeasance,
      Assignment, Assumption and Release Agreement, dated as of December 22,
      2006, by and among Glimcher University Mall Limited Partnership, SB NASC
      1998-D6 Holdings, LLC, Lasalle National Bank Association (f/k/a LaSalle
      National Bank), as Trustee For Nomura Asset Securities Corporation,
      Commercial Mortgage Pass-Through Certificates, Series 1998-D6, Capmark
      Finance Inc., and Wells Fargo Bank, N.A. (34)10.25
            Completion
      and Payment Guaranty, dated as of November 30, 2007, by Glimcher
      Properties Limited Partnership in favor of KeyBank National Association
      (relates to Scottsdale construction financing).10.26
            Leasehold
      Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing,
      dated as of November 30, 2007, by Kierland Crossing, LLC for the benefit
      of KeyBank National Association (relates to Scottsdale construction
      financing).10.27
            Limited
      Payment and Performance Guaranty, dated as of November 30, 2007, by
      Glimcher Properties Limited Partnership to and for the benefit of KeyBank
      National Association (relates to Scottsdale construction
      financing).10.28
            Construction,
      Acquisition and Interim Loan Agreement, dated as of November 30, 2007, by
      and among Kierland Crossing, LLC, KeyBank National Association, as lender,
      each signing lender, and KeyBank National Association, as administrative
      agent (relates to Scottsdale construction financing).10.29
            Assignment
      of Leases and Rents, dated as of November 30, 2007, by Kierland Crossing,
      LLC in favor of KeyBank National Association (relates to Scottsdale
      construction financing).10.30
            Collateral
      Assignment of Construction Documents, Contracts, Licenses and Permits,
      dated as of November 30, 2007, between Kierland Crossing, LLC in favor of
      KeyBank National Association (related to Scottsdale construction
      financing).10.31
            Collateral
      Assignment of Joint Development Agreement and Purchase Agreement and
      Escrow Instructions, dated as of November 30, 2007, by Kierland Crossing,
      LLC in favor of KeyBank National Association, as Administrative Agent
      (relates to Scottsdale construction
financing).




46


10.32
            Non-Recourse
      Exception Guaranty, dated as of November 30, 2007, by Glimcher Properties
      Limited Partnership in favor of KeyBank National Association (relates to
      Scottsdale construction financing).10.33
            Form
      of Promissory Notes for Scottsdale Construction Loan with respect to
      KeyBank National Association, Eurohypo AG, New York Branch, The Huntington
      National Bank, U.S. Bank National Association, National City Bank, and PNC
      Bank, National Association, as lenders.10.34
            Promissory
      Note, dated as of September 1, 1998, issued by Morgantown Mall Associates
      Limited Partnership in the amount of fifty eight million three hundred
      fifty thousand dollars ($58,350,000). (4)10.35
            Deed
      of Trust, Assignment of Leases and Rents and Security Agreement by
      Morgantown Mall Associates Limited Partnership to Michael B. Keller
      (Trustee), dated as of September 1, 1998, for the use and benefit of The
      Capital Company of America, LLC. (4)10.36
            Promissory
      Note, dated as of November 1, 1998, issued by Glimcher Properties Limited
      Partnership in the amount of nineteen million dollars ($19,000,000)
      (relates to New Jersey Tax Exempt Bonds). (4)10.37
            Deed
      of Trust and Security Agreement, dated as of January 21, 1999, by Grand
      Central Limited Partnership for the benefit of Lehman Brothers Holdings
      Inc. (18)10.38
            Promissory
      Note, dated as of January 21, 1999, issued by Grand Central Limited
      Partnership in the amount of fifty two million five hundred thousand
      dollars ($52,500,000). (18)10.39
            Loan
      Agreement, dated as of May 25, 2006, by and between WTM Glimcher, LLC and
      Morgan Stanley Credit Corporation (relates to Weberstown Mall).
      (19)10.40
            Promissory
      Note A1, dated May 25, 2006, issued by WTM Glimcher, LLC in the principal
      amount of thirty million dollars ($30,000,000) (relates to Weberstown
      Mall) (19).10.41
            Promissory
      Note A2, dated May 25, 2006, issued by WTM Glimcher, LLC in the principal
      amount of thirty million dollars ($30,000,000) (relates to Weberstown
      Mall). (19)10.42
            Deed
      of Trust and Security Agreement, dated May 25, 2006, by and between WTM
      Glimcher, LLC, Chicago Title Insurance Company, and Morgan Stanley Credit
      Corporation (relates to Weberstown Mall). (19)10.43
            Assignment
      of Leases and Rents, dated as of May 25, 2006, by and between WTM
      Glimcher, LLC and Morgan Stanley Credit Corporation (relates to Weberstown
      Mall). (19)10.44
            Guaranty
      of Recourse Obligations, dated as of May 25, 2006, by Glimcher Properties
      Limited Partnership in favor of Morgan Stanley Credit Corporation (relates
      to Weberstown Mall). (19)10.45
            Mortgage,
      Assignment of Leases and Rents, Security Agreement, and Fixture Filing,
      dated as of October 15, 2001, by Glimcher Ashland Venture, LLC to KeyBank
      National Association. (6)10.46
            Promissory
      Note, dated as of October 15, 2001 issued by Glimcher Ashland Venture, LLC
      in the amount of twenty seven million dollars ($27,000,000).
      (6)10.47
            Amended
      and Restated Promissory Note 1, dated as of June 30, 2003, issued by LC
      Portland, LLC in the amount of seventy million dollars ($70,000,000.00).
      (21)10.48
            Amended
      and Restated Promissory Note 2, dated June 30, 2003, issued by LC
      Portland, LLC in the amount of seventy million dollars ($70,000,000.00).
      (21)10.49
            Loan
      Assumption Agreement, dated as of December 29, 2005, between Passco
      Colima, LLC, Passco PHM, LLC and PHM-1, LLC through PHM-29, LLC, Puente
      Hills Mall, LLC and LaSalle Bank National Association, as Trustee for the
      Registered Holders of Greenwich Capital Commercial Funding Corp.,
      Commercial Mortgage Trust 2003-C1, Commercial Mortgage Pass-Through
      Certificates, Series 2003-C1 (relates to Puente Hills Mall acquisition).
      (30)10.50
            Guaranty
      of Recourse Obligations, dated as of December 29, 2005, by Glimcher
      Properties Limited Partnership in favor of LaSalle Bank National
      Association, as Trustee for the Registered Holders of Greenwich Capital
      Commercial Funding Corp., Commercial Mortgage Trust 2003-C1, Commercial
      Mortgage Pass-Through Certificates, Series 2003-C1 (relates to loan
      assumption for Puente Hills Mall acquisition). (30)10.51
            Allonge
      to Promissory Note (relates to loan assumption for Puente Hills Mall
      acquisition). (30)10.52
            Operating
      Agreement for OG Retail Holding Co., LLC, dated as of December 29, 2005
      (pertains to joint venture between Glimcher Properties Limited Partnership
      and Oxford Properties Group). (30)10.53
            Promissory
      Note A1, dated as of August 27, 2003, issued by Glimcher WestShore, LLC in
      the amount of sixty six million dollars ($66,000,000).
  (9)10.54
            Promissory
      Note A2, dated as of August 27, 2003, issued by Glimcher WestShore, LLC in
      the amount of thirty four million dollars ($34,000,000).
    (9)10.55
            Mortgage,
      Assignment of Leases and Rents and Security Agreement, dated as of August
      27, 2003, by Glimcher WestShore, LLC to Morgan Stanley Mortgage Capital
      Inc. (9)10.56
            Guaranty
      of Recourse Obligations by Glimcher Properties Limited Partnership to
      Morgan Stanley Mortgage Capital, Inc. dated as of August 27, 2003,
      relating to WestShore Plaza Mall.
(9)




47


10.57
            Note,
      dated as of August 11, 1998, issued by Eastland Mall Limited Partnership
      to The Capital Company of America LLC in the amount of forty six million
      six hundred seventy three thousand two hundred twenty five dollars
      ($46,673,225) (relating to Eastland North Carolina).
(9)10.58
            Deed
      of Trust, Assignment of Leases and Rents, Security Agreement and Fixture
      Filing, dated as of August 11, 1998, by Eastland Mall Limited Partnership
      to M. Jay Devaney, as Trustee, for the benefit of The Capital Company of
      America LLC (relating to Eastland North Carolina). (9)10.59
            Promissory
      Note, dated as of October 1, 1997, issued by Catalina Partners, L.P. to
      Nomura Asset Capital Corporation in the amount of thirty six million
      ($36,000,000), relating to Colonial Park Mall. (9)10.60
            Open-end
      Fee Mortgage, Leasehold Mortgage, Assignment of Rents, Security Agreement
      and Fixture Filing, dated as of October 1, 1997, by Catalina Partners,
      L.P. to Nomura Asset Capital Corporation, relating to Colonial Park Mall.
      (9)10.61
            Form
      of Note. (27)10.62
            Amended
      and Restated Credit Agreement, dated December 14, 2006, by and among
      Glimcher Properties Limited Partnership, KeyBank National Association,
      KeyBank Capital Markets, and several other financial institutions.
      (34)10.63
            Guaranty,
      dated December 14, 2006, by Glimcher Realty Trust and Glimcher Properties
      Corporation to and for the benefit of KeyBank National Association,
      individually and as administrative agent for itself and the lenders under
      the Amended and Restated Credit Agreement. (34)10.64
            Form
      of Note. (included in Exhibit 10.62)10.65
            Promissory
      Note A1, dated October 17, 2003, between MFC Beavercreek, LLC and KeyBank
      National Association in the amount of eighty-five million dollars
      ($85,000,000), relating to the Mall at Fairfield Commons in Beavercreek,
      Ohio. (13)10.66
            Promissory
      Note A2, dated October 17, 2003, between MFC Beavercreek, LLC and KeyBank
      National Association in the amount of twenty-eight million five hundred
      thousand dollars ($28,500,000), relating to the Mall at Fairfield Commons
      in Beavercreek, Ohio. (13)10.67
            Open
      End Mortgage, Assignment of Leases and Rents, Security Agreement, and
      Fixture Filing, dated October 17, 2003, between MFC Beavercreek, LLC and
      KeyBank National Association, relating to the Mall at Fairfield Commons in
      Beavercreek, Ohio. (13)10.68
            Key
      Principal's Guaranty Agreement, dated October 17, 2003, between Glimcher
      Properties Limited Partnership and KeyBank National Association, relating
      to the loan on the Mall at Fairfield Commons in Beavercreek, Ohio.
      (13)10.69
            Open
      End Mortgage, Assignment of Rents and Security Agreement, dated November
      20, 2006, by EM Columbus II, LLC to Lehman Brothers Bank, FSB (relating to
      Eastland Ohio). (34)10.70
            Assignment
      of Leases and Rents, dated as of November 20, 2006, between EM Columbus
      II, LLC to Lehman Brothers Bank, FSB (relating to Eastland Ohio).
      (34)10.71
            Loan
      Agreement, dated November 20, 2006, by and between EM Columbus II, LLC,
      and Lehman Brothers Bank, FSB (relating to Eastland Ohio).
      (34)10.72
            Guaranty,
      dated November 20, 2006, by and between Glimcher Properties Limited
      Partnership to and for the benefit of Lehman Brothers Bank, FSB (relating
      to Eastland Ohio). (34)10.73
            Promissory
      Note, dated November 20, 2006, by EM Columbus II, LLC in favor of Lehman
      Brothers Bank, FSB in the principal amount of $43,000,000 (relating to
      Eastland Ohio). (34)10.74
            Promissory
      Note, dated May 17, 2000, from Polaris Center, LLC to First Union National
      Bank, in the amount of $43,000,000, relating to the Polaris Towne Center
      existing debt. (13)10.75
            Open-End
      Mortgage and Security Agreement, dated May 17, 2000, between Polaris
      Center, LLC and First Union National Bank, relating to Polaris Towne
      Center. (13)10.76
            Amended
      and Restated Promissory Note A, dated May 22, 2003, between UBS Warburg
      Real Estate Investments Inc. and PFP Columbus, LLC, for $125,000,000,
      relating to the Polaris Fashion Place existing debt.
  (13)10.77
            Amended
      and Restated Promissory Note B, dated May 22, 2003, between UBS Warburg
      Real Estate Investments Inc. and PFP Columbus, LLC, for $24,837,623
      relating to the Polaris Fashion Place existing debt.
  (13)10.78
            Mortgage,
      Assignment of Leases and Rents and Security Agreement, dated April 1,
      2003, from PFP Columbus, LLC to UBS Warburg Real Estate Investments Inc.
      relating to Polaris Fashion Place. (13)10.79
            Loan
      Agreement, dated as of April 1, 2003, between PFP Columbus, LLC, as
      borrower, and UBS Warburg Real Estate Investments Inc., as lender.
      (13)10.80
            Loan
      Agreement, dated as of June 9, 2004, between N.J. METROMALL Urban Renewal,
      Inc., JG Elizabeth, LLC and Morgan Stanley Mortgage Capital Inc. relating
      to Jersey Gardens Mall in Elizabeth, New Jersey.
  (22)




48


10.81
            Promissory
      Note A1, dated June 9, 2004, between N.J. METROMALL Urban Renewal, Inc.,
      JG Elizabeth, LLC and Morgan Stanley Mortgage Capital Inc. in the amount
      of $85,000,000, relating to Jersey Gardens Mall in Elizabeth, New Jersey.
      (22)10.82
            Promissory
      Note A2, dated June 9, 2004, between N.J. METROMALL Urban Renewal, Inc.,
      JG Elizabeth, LLC and Morgan Stanley Mortgage Capital Inc. in the amount
      of $80,000,000, relating to Jersey Gardens Mall in Elizabeth, New Jersey.
      (22)10.83
            Fee
      and Leasehold Mortgage, Assignment of Leases and Rents and Security
      Agreement, dated June 9, 2004 between N.J. METROMALL Urban Renewal Inc, JG
      Elizabeth, LLC and Morgan Stanley Mortgage Capital, Inc. relating to
      Jersey Gardens Mall in Elizabeth, New Jersey. (22)10.84
            Guaranty,
      dated June 9, 2004, by Glimcher Properties Limited Partnership to Morgan
      Stanley Mortgage Capital Inc., relating to Jersey Gardens Mall in
      Elizabeth, New Jersey. (22)10.85
            Loan
      Agreement, dated as of March 14, 2006, by and between Tulsa Promenade, LLC
      and Charter One Bank, N.A. (relating to Tulsa Promenade).
    (29)10.86
            Promissory
      Note, dated March 14, 2006, issued by Tulsa Promenade, LLC to the order of
      Charter One Bank, N.A. in the principal amount of
      $50,000,000  (relating to Tulsa Promenade).
  (29)10.87
            Mortgage
      with Power of Sale, Security Agreement and Financing Statement, made as of
      March 14, 2006, by Tulsa Promenade, LLC in favor of Charter One Bank, N.A.
      (relating to Tulsa Promenade). (29)10.88
            Term
      Loan Agreement, dated as of January 13, 2006, between GM Olathe, LLC,
      Glimcher Properties Limited Partnership (as co-borrowers) and KeyBank
      National Association, relating to The Great Mall of the Great Plains in
      Olathe, Kansas. (30)10.89
            Promissory
      Note, dated January 13, 2006, issued by GM Olathe, LLC and Glimcher
      Properties Limited Partnership (as co-borrowers) to the order of KeyBank
      National Association in the principal amount of $30,000,000, relating to
      The Great Mall of the Great Plains in Olathe, Kansas.
  (30)10.90
            Amended
      and Restated Mortgage, Assignment of Rents, Security Agreement and Fixture
      Filing, dated January 13, 2006, between Glimcher Properties Limited
      Partnership and GM Olathe, LLC in the amount of $30,000,000, relating to
      The Great Mall of the Great Plains in Olathe, Kansas.
  (30)10.91
            Promissory
      Note, dated as of December 15, 2005, issued by RVM Glimcher, LLC to the
      order of Lehman Brothers Bank, FSB in the principal amount of $50,000,000,
      relating to River Valley Mall in Lancaster, Ohio. (30)10.92
            Loan
      Agreement, dated as of December 15, 2005, between RVM Glimcher, LLC and
      Lehman Brothers Bank, FSB, relating to River Valley Mall in Lancaster,
      Ohio. (30)10.93
            Open-End
      Mortgage and Security Agreement, dated as of December 15, 2005, between
      RVM Glimcher, LLC and Lehman Brothers Bank, FSB, relating to River Valley
      Mall in Lancaster, Ohio. (30)10.94
            Assignment
      of Leases and Rents, dated as of December 15, 2005, between RVM Glimcher,
      LLC and Lehman Brothers Bank, FSB, relating to River Valley Mall in
      Lancaster, Ohio. (30)10.95
            Guaranty
      of Recourse Obligations, dated as of December 15, 2005, by Glimcher
      Properties Limited Partnership to and for the benefit of Lehman Brothers
      Bank, FSB, relating to River Valley Mall in Lancaster, Ohio.
      (30)10.96
            Agreement
      of Purchase and Sale, between Coyote Tulsa Mall, L.L.C. and Glimcher
      Properties Limited Partnership (relating to acquisition of Tulsa
      Promenade).  (30)10.97
            Employment
      & Consulting Agreement, dated January 20, 2005, between Herbert
      Glimcher, Glimcher Realty Trust and Glimcher Properties Limited
      Partnership. (14)10.98
            Limited
      Liability Company Agreement of Kierland Crossing, LLC, dated as of May 12,
      2006 (relating to joint venture between Glimcher Properties Limited
      Partnership and Vanguard City Home in Scottsdale, AZ).
    (19).10.99
            Purchase
      Agreement and Escrow Instructions, dated May 12, 2006, by and between
      Kierland Crossing, LLC and Kierland Crossing Residential, LLC (relating to
      joint venture between Glimcher Properties Limited Partnership and Vanguard
      City Home in Scottsdale, AZ). (19)10.100
            Ground
      Lease, dated as of May 12, 2006, by and between Sucia Scottsdale, LLC and
      Kierland Crossing, LLC (relating to joint venture between Glimcher
      Properties Limited Partnership and Vanguard City Home in Scottsdale, AZ).
      (19)10.101
            First
      Amended and Restated Ground Lease, dated as of December 6, 2006, by and
      between Sucia Scottsdale, LLC and Kierland Crossing, LLC (relating to
      joint venture between Glimcher Properties Limited Partnership and Vanguard
      City Home in Scottsdale, AZ). (34)10.102
            Form
      Restricted Stock Award Agreement for Glimcher Realty Trust’s 2004
      Incentive Compensation Plan (Extended Vesting). (31)10.103
            Form
      Option Award Agreement for the Glimcher Realty Trust 2004 Incentive
      Compensation Plan (Non-Qualified Stock Options).
  (28)




49


10.104
            Form
      Option Award Agreement for the Glimcher Realty Trust 2004 Incentive
      Compensation Plan (Incentive Stock Options). (28)10.105
            Form
      Restricted Stock Award Agreement for Glimcher Realty Trust’s 2004
      Incentive Compensation Plan. (23)10.106
            Form
      Option Award Agreement for the Glimcher Realty Trust 2004 Incentive
      Compensation Plan (Non-Qualified Stock Options/Grant Date Valuation).
      (34)10.107
            Form
      Option Award Agreement for the Glimcher Realty Trust 2004 Incentive
      Compensation Plan (Incentive Stock Options/Grant Date Valuation).
      (34)10.108
            Form
      of Performance Share Award Agreement for the Glimcher Realty Trust Amended
      and Restated 2004 Incentive Compensation Plan and 2007 Long Term Incentive
      Plan for Senior Executives. (33)10.109
            Form
      Option Award Agreement for the Glimcher Realty Trust Amended and Restated
      2004 Incentive Compensation Plan (Non-Qualified Stock
      Options/Anti-Dilution). (Revises and Replaces Exhibit 10.103 and 10.106).
      (33)10.110
            Form
      Option Award Agreement for the Glimcher Realty Trust Amended and Restated
      2004 Incentive Compensation Plan (Incentive Stock Options/Anti-Dilution).
      (Revises and Replaces Exhibits 10.104 and 10.107). (33)10.111
            Form
      Option Award Agreement for the Glimcher Realty Trust Amended and Restated
      2004 Incentive Compensation Plan (Incentive Stock Options/Forfeiture
      Clause) (Revises and Replaces Exhibit 10.110).10.112
            Form
      Option Award Agreement for the Glimcher Realty Trust Amended and Restated
      2004 Incentive compensation Plan (Non-Qualified Stock Options/Forfeiture
      Clause) (Revises and Replaces Exhibit 10.109).10.113
            Form
      Restricted Stock Award Agreement for the Glimcher Realty Trust Amended and
      Restated 2004 Incentive Compensation Plan (Extended
      Vesting/Anti-Dilution/Grant Date Valuation). (33)21.1
            Subsidiaries
      of the Registrant.23.1
            Consent
      of Independent Registered Public Accounting Firm.31.1
            Certification
      of the Company’s CEO pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.31.2
            Certification
      of the Company’s CFO pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.32.1
            Certification
      of the Company’s CEO pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2
            Certification
      of the Company’s CFO pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.




















(1)
            Incorporated
      by reference to Glimcher Realty Trust’s Registration Statement on Form
      S-11, SEC File No. 33-69740.


(2)
            Incorporated
      by reference to Glimcher Realty Trust’s Annual Report on Form 10-K for the
      fiscal year ended December 31, 1994, filed with the Securities and
      Exchange Commission on March 21,
1995.


(3)
            Incorporated
      by reference to Glimcher Realty Trust’s Annual Report on Form 10-K for the
      fiscal year ended December 31, 1997, filed with the Securities and
      Exchange Commission on March 31,
1998.


(4)
            Incorporated
      by reference to Glimcher Realty Trust’s Annual Report on Form 10-K for the
      fiscal year ended December 31, 1998, filed with the Securities and
      Exchange Commission on March 30,
1999.


(5)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on December 13,
  2007.


(6)
            Incorporated
      by reference to Glimcher Realty Trust’s Annual Report on Form 10-K for the
      fiscal year ended December 31, 2001, filed with the Securities and
      Exchange Commission on March 11,
2002.


(7)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on September 8,
  2006.


(8)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on August 29,
  2003.


(9)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on September 8,
  2003.


(10)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on February 25,
  2004.


(11)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on August 31,
  2004.


(12)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on September 2,
  2004.


(13)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on January 20,
  2004.


(14)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on January 24,
  2005.




50


(15)
            Incorporated
      by reference to Glimcher Realty Trust’s Registration Statement on Form
      8-A12B, SEC File No. 001-12482, filed with the Securities and Exchange
      Commission on August 22, 2003.


(16)
            Incorporated
      by reference to Glimcher Realty Trust’s Registration Statement on Form
      8-A12B, SEC File No. 001-12482, filed with the Securities and Exchange
      Commission on February 20, 2004.


(17)
            Incorporated
      by reference to Appendix A of Glimcher Realty Trust’s Schedule 14A Proxy
      Statement, filed with the Securities and Exchange Commission on March 30,
      2007.


(18)
            Incorporated
      by reference to Glimcher Realty Trust’s Quarterly Report on Form 10-Q for
      the period ended March 31, 1999, filed with the Securities and Exchange
      Commission on May 14, 1999.


(19)
            Incorporated
      by reference to Glimcher Realty Trust’s Quarterly Report on Form 10-Q for
      the period ended June 30, 2006, filed with the Securities and Exchange
      Commission on July 28, 2006.


(20)
            Incorporated
      by reference to Glimcher Realty Trust’s Quarterly Report on Form 10-Q for
      the period ended June 30, 2002, filed with the Securities and Exchange
      Commission on August 13, 2002.


(21)
            Incorporated
      by reference to Glimcher Realty Trust’s Quarterly Report on Form 10-Q for
      the period ended June 30, 2003, filed with the Securities and Exchange
      Commission on August 12, 2003.


(22)
            Incorporated
      by reference to Glimcher Realty Trust’s Quarterly Report on Form 10-Q for
      the period ended June 30, 2004, filed with the Securities and Exchange
      Commission on August 13, 2004.


(23)
            Incorporated
      by reference to Glimcher Realty Trust’s Quarterly Report on Form 10-Q for
      the period ended March 31, 2005, filed with the Securities and Exchange
      Commission on April 29, 2005.


(24)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on May 17,
  2005.


(25)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on March 12,
  1999.


(26)
            Incorporated
      by reference to Glimcher Realty Trust’s Quarterly Report on Form 10-Q for
      the period ended March 31, 2007, filed with the Securities and Exchange
      Commission on April 27, 2007.


(27)
            Incorporated
      by reference to Glimcher Realty Trust’s Quarterly Report on Form 10-Q for
      the period ended June 30, 2007, filed with the Securities and Exchange
      Commission on July 27, 2007.


(28)
            Incorporated
      by reference to Glimcher Realty Trust’s Annual Report on Form 10-K for the
      fiscal year ended December 31, 2004, filed with the Securities and
      Exchange Commission on March 11,
2005.


(29)
            Incorporated
      by reference to Glimcher Realty Trust’s Quarterly Report on Form 10-Q for
      the period ended March 31, 2006, filed with the Securities and Exchange
      Commission on April 28, 2006.


(30)
            Incorporated
      by reference to Glimcher Realty Trust’s Annual Report on Form 10-K for the
      fiscal year ended December 31, 2005, filed with the Securities and
      Exchange Commission on February 24,
2006.


(31)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 8-K, filed with the
      Securities and Exchange Commission on May 9,
  2006.


(32)
            Incorporated
      by reference to Glimcher Realty Trust’s Quarterly Report on Form 10-Q for
      the period ended September 30, 2007, filed with the Securities and
      Exchange Commission on October 26,
2007.


(33)
            Incorporated
      by reference to Glimcher Realty Trust’s Registration Statement on Form
      S-8, SEC File No. 333-143237, filed with the Securities and Exchange
      Commission on May 24, 2007.


(34)
            Incorporated
      by reference to Glimcher Realty Trust’s Form 10-K, for the period ended
      December 31, 2006, filed with the Securities and Exchange Commission on
      February 23, 2007.











51




SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.




GLIMCHER
      REALTY TRUST/s/ Mark
      E. YaleMark
      E. Yale
                Executive
      Vice President, Chief Financial Officer and Treasurer
                (Principal
      Accounting and Financial Officer)
                February
      20, 2008


Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
executed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.




SIGNATURE
              
              TITLE
              DATE/s/ Michael P. Glimcher
              
              Chairman
      of the Board and
              February
      20, 2008Michael
      P. Glimcher
              
              Chief
      Executive Officer(Principal
      Executive Officer)/s/ Mark E. Yale
              
              Executive
      Vice President,
              February
      20, 2008Mark
      E. Yale
              
              Chief
      Financial Officer and Treasurer(Principal
      Accounting and Financial Officer)/s/ Herbert Glimcher
              
              Chairman
      Emeritus
              February
      20, 2008Herbert
      Glimcher
              
              of
      the Board of Trustees/s/ David M. Aronowitz
              
              Member,
      Board of Trustees
              February
      20, 2008David
      M. Aronowitz/s/ Richard F. Celeste
              
              Member,
      Board of Trustees
              February
      20, 2008Richard
      F. Celeste/s/ Wayne S. Doran
              
              Member,
      Board of Trustees
              February
      20, 2008Wayne
      S. Doran/s/ Howard Gross
              
              Member,
      Board of Trustees
              February
      20, 2008Howard
      Gross/s/ Timothy J. O’Brien
              
              Member,
      Board of Trustees
              February
      20, 2008Timothy
      J. O’Brien/s/ Niles C. Overly
              
              Member,
      Board of Trustees
              February
      20, 2008Niles
      C. Overly/s/ Alan R. Weiler
              
              Member,
      Board of Trustees
              February
      20, 2008Alan
      R. Weiler/s/ William S. Williams
              
              Member,
      Board of Trustees
              February
      20, 2008William
      S. Williams




52


Report
of the Independent Registered Public Accounting Firm








To the
Board of Trustees and Shareholders


Glimcher
Realty Trust


Columbus,
Ohio





We have
audited the accompanying consolidated balance sheets of Glimcher Realty Trust as
of December 31, 2007 and 2006 and the related consolidated statements of
operations and comprehensive income, shareholders' equity and cash flows for
each of the three years in the period ended December 31, 2007. In connection
with our audits of the consolidated financial statements, we have also audited
the schedule listed in Item 15(a) 2. These financial statements and schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our
audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and schedule are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and schedule, assessing the accounting principles used
and the significant estimates made by management, as well as evaluating the
overall presentation of the financial statements and schedule. We believe that
our audits provide a reasonable basis for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Glimcher Realty Trust at
December 31, 2007 and 2006, and the results of its operations and cash flows for
each of the three years in the period ended December 31, 2007, in conformity
with accounting principles generally accepted in the United States of
America.





Also, in
our opinion, the financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly,
in all material respects, the information set forth therein.





We have
also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the effectiveness of Glimcher Realty Trust's
internal control over financial reporting as of December 31, 2007, based on
criteria established in Internal Control−Integrated
Frameworkissued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) and our report dated February 19, 2008 expressed an
unqualified opinion thereon.





/s/ BDO Seidman, LLP


Chicago,
Illinois


February
19, 2008




53


GLIMCHER
REALTY TRUST


CONSOLIDATED
BALANCE SHEETS


(dollars
in thousands, except share and par value amounts)





ASSETS




December
      31,2007
            
            
            2006Investment
      in real estate:Land
            
            $
            240,156
            
            
            $
            247,149Buildings,
      improvements and equipment
            
            
            1,703,491
            
            
            
            1,679,935Developments
      in progress
            
            
            96,054
            
            
            
            49,8032,039,701
            
            
            
            1,976,887Less
      accumulated depreciation
            
            
            500,710
            
            
            
            483,115Property
      and equipment, net
            
            
            1,538,991
            
            
            
            1,493,772Deferred
      costs, net
            
            
            19,225
            
            
            
            17,316Real
      estate assets held-for-sale
            
            
            68,671
            
            
            
            192,301Investment
      in and advances to unconsolidated real estate entities
            
            
            83,116
            
            
            
            70,416Investment
      in real estate, net
            
            
            1,710,003
            
            
            
            1,773,805Cash
      and cash equivalents
            
            
            22,147
            
            
            
            11,751Non-real
      estate assets associated with discontinued operations
            
            
            5,002
            
            
            
            12,662Restricted
      cash
            
            
            14,217
            
            
            
            12,132Tenant
      accounts receivable, net
            
            
            39,475
            
            
            
            42,665Deferred
      expenses, net
            
            
            5,915
            
            
            
            8,134Prepaid
      and other assets
            
            
            34,188
            
            
            
            30,103Total
      assets
            
            $
            1,830,947
            
            
            $
            1,891,252





LIABILITIES
AND SHAREHOLDERS’ EQUITY





Mortgage
      notes payable
            
            $
            1,170,669
            
            
            $
            1,203,100Mortgage
      notes payable associated with properties held-for-sale
            
            
            81,541
            
            
            
            101,786Notes
      payable
            
            
            300,000
            
            
            
            272,000Other
      liabilities associated with discontinued operations
            
            
            2,763
            
            
            
            3,926Accounts
      payable and accrued expenses
            
            
            62,969
            
            
            
            59,952Distributions
      payable
            
            
            23,915
            
            
            
            23,481Total
      liabilities
            
            
            1,641,857
            
            
            
            1,664,245Minority
      interest in operating partnership
            
            
            -
            
            
            
            1,772Shareholders’
      equity:Series
      F Cumulative Preferred Shares of Beneficial Interest, $0.01
              par
      value, 2,400,000 shares issued and outstanding
            
            
            60,000
            
            
            
            60,000Series
      G Cumulative Preferred Shares of Beneficial Interest, $0.01
              par
      value, 6,000,000 shares issued and outstanding
            
            
            150,000
            
            
            
            150,000Common
      Shares of Beneficial Interest, $0.01 par value, 37,687,039
              and
      36,776,365 shares issued and outstanding as of December
      31, 2007
              and
      December 31, 2006, respectively
            
            
            377
            
            
            
            368Additional
      paid-in capital
            
            
            563,460
            
            
            
            547,036Distributions
      in excess of accumulated earnings
            
            
            (584,343
            )
            
            
            (532,141
            )Accumulated
      other comprehensive loss
            
            
            (404
            )
            
            
            (28
            )Total
      shareholder’s equity
            
            
            189,090
            
            
            
            225,235Total
      liabilities and shareholder’s equity
            
            $
            1,830,947
            
            
            $
            1,891,252





The
accompanying notes are an integral part of these consolidated financial
statements





54




GLIMCHER
REALTY TRUST


CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME


(dollars
in thousands, except per share amounts)





For
      the Years Ended December 31,2007
            
            
            2006
            
            
            2005Revenues:Minimum
      rents
            
            $
            186,064
            
            
            $
            181,866
            
            
            $
            177,738Percentage
      rents
            
            
            6,130
            
            
            
            5,727
            
            
            
            5,450Tenant
      reimbursements
            
            
            87,258
            
            
            
            84,593
            
            
            
            82,546Other
            
            
            22,714
            
            
            
            20,365
            
            
            
            22,184Total
      revenues
            
            
            302,166
            
            
            
            292,551
            
            
            
            287,918Expenses:Property
      operating expenses
            
            
            63,020
            
            
            
            60,007
            
            
            
            57,679Real
      estate taxes
            
            
            31,651
            
            
            
            32,512
            
            
            
            32,24794,671
            
            
            
            92,519
            
            
            
            89,926Provision
      for doubtful accounts
            
            
            3,732
            
            
            
            3,495
            
            
            
            3,250Other
      operating expenses
            
            
            8,262
            
            
            
            6,644
            
            
            
            8,717Depreciation
      and amortization
            
            
            73,661
            
            
            
            68,437
            
            
            
            62,802General
      and administrative
            
            
            16,484
            
            
            
            15,305
            
            
            
            18,401Impairment
      losses – real estate assets
            
            
            2,914
            
            
            
            -
            
            
            
            -Total
      expenses
            
            
            199,724
            
            
            
            186,400
            
            
            
            183,096Operating
      income
            
            
            102,442
            
            
            
            106,151
            
            
            
            104,822Interest
      income
            
            
            649
            
            
            
            454
            
            
            
            262Interest
      expense
            
            
            87,940
            
            
            
            82,166
            
            
            
            71,873Equity
      in income of unconsolidated entities, net
            
            
            1,133
            
            
            
            1,443
            
            
            
            51Income
      before minority interest in operating partnership and discontinued
      operations
            
            
            16,284
            
            
            
            25,882
            
            
            
            33,262Minority
      interest in operating partnership
            
            
            1,635
            
            
            
            (7,733
            )
            
            
            252Income
      from continuing operations
            
            
            14,649
            
            
            
            33,615
            
            
            
            33,010Discontinued
      operations:Impairment
      losses – real estate assets
            
            
            (27,464
            )
            
            
            (111,918
            )
            
            
            (16,393
            )Gain
      on sales of properties, net
            
            
            47,349
            
            
            
            1,717
            
            
            
            1,619Income
      (loss) from operations
            
            
            3,823
            
            
            
            (579
            )
            
            
            2,614Net
      income (loss)
            
            
            38,357
            
            
            
            (77,165
            )
            
            
            20,850Less:
      Preferred stock dividends
            
            
            17,437
            
            
            
            17,437
            
            
            
            17,437Net
      income (loss) available to common shareholders
            
            $
            20,920
            
            
            $
            (94,602
            )
            
            $
            3,413Earnings
      (loss) Per Common Share (“EPS”):Basic:Continuing
      operations
            
            $
            (0.03
            )
            
            $
            0.21
            
            
            $
            0.40Discontinued
      operations
            
            $
            0.59
            
            
            $
            (2.79
            )
            
            $
            (0.31
            )Net
      income (loss)
            
            $
            0.56
            
            
            $
            (2.58
            )
            
            $
            0.09Diluted:Continuing
      operations
            
            $
            (0.03
            )
            
            $
            0.21
            
            
            $
            0.40Discontinued
      operations
            
            $
            0.59
            
            
            $
            (2.76
            )
            
            $
            (0.31
            )Net
      income (loss)
            
            $
            0.56
            
            
            $
            (2.55
            )
            
            $
            0.09Weighted
      average common shares outstanding
            
            
            37,232
            
            
            
            36,611
            
            
            
            36,036Weighted
      average common shares and common share equivalentoutstanding
            
            
            40,228
            
            
            
            40,089
            
            
            
            39,856Cash
      distributions declared per common share of beneficial
      interest..
            
            $
            1.9232
            
            
            $
            1.9232
            
            
            $
            1.9232Net
      income (loss)
            
            $
            38,357
            
            
            $
            (77,165
            )
            
            $
            20,850Other
      comprehensive (loss) income on derivative instruments, net
            
            
            (376
            )
            
            
            (2
            )
            
            
            9Comprehensive
      income (loss)
            
            $
            37,981
            
            
            $
            (77,167
            )
            
            $
            20,859




The
accompanying notes are an integral part of these consolidated financial
statements


55


GLIMCHER
REALTY TRUST


CONSOLIDATED
      STATEMENTS OF SHAREHOLDERS’ EQUITY


For
      the Years Ended December 31, 2007, 2006 and
2005


(dollars
      in thousands, except share, par value and unit
  amounts)




Series F Cumulative
      Preferred
            
            
            Series G Cumulative
      Preferred
            
            
            Common
      Shares of Beneficial Interest
            
            
            Additional
      Paid-in
            
            
            Distributions In Excess of
      Accumulated
            
            
            Accumulated Other
      ComprehensiveShares
            
            
            Shares
            
            
            Shares
            
            
            Amount
            
            
            Capital
            
            
            Earnings
            
            
            Income/(Loss)
            
            
            TotalBalance,
      December 31, 2004
            
            $
            60,000
            
            
            $
            150,000
            
            
            
            35,682,858
            
            
            $
            357
            
            
            $
            534,286
            
            
            $
            (300,786
            )
            
            $
            (35
            )
            
            $
            443,822Distributions
      declared, $1.9232 per share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (69,551
            )
            
            
            
            
            
            
            (69,551
            )Distribution
      Reinvestment and Share Purchase Plan
            
            
            
            
            
            
            
            
            
            
            21,954
            
            
            
            -
            
            
            
            560
            
            
            
            
            
            
            
            
            
            
            
            560Exercise
      of stock options
            
            
            
            
            
            
            
            
            
            
            386,384
            
            
            
            4
            
            
            
            6,531
            
            
            
            
            
            
            
            
            
            
            
            6,535OP
      unit conversion
            
            
            
            
            
            
            
            
            
            
            358,586
            
            
            
            3
            
            
            
            9,656
            
            
            
            
            
            
            
            
            
            
            
            9,659Restricted
      stock grant
            
            
            
            
            
            
            
            
            
            
            56,666
            
            
            
            1
            
            
            
            (1
            )
            
            
            
            
            
            
            
            
            
            
            -Amortization
      of restricted stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            314
            
            
            
            
            
            
            
            
            
            
            
            314Preferred
      stock dividends
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (17,437
            )
            
            
            
            
            
            
            (17,437
            )Net
      income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            20,850
            
            
            
            
            
            
            
            20,850Other
      comprehensive income on derivative instruments
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            9
            
            
            
            9Stock
      option expense, net of offering costs
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            297
            
            
            
            
            
            
            
            
            
            
            
            297Transfer
      to minority interest in partnership
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (8,004
            )
            
            
            
            
            
            
            
            
            
            
            (8,004
            )Balance,
      December 31, 2005
            
            
            60,000
            
            
            
            150,000
            
            
            
            36,506,448
            
            
            
            365
            
            
            
            543,639
            
            
            
            (366,924
            )
            
            
            (26
            )
            
            
            387,054Distributions
      declared, $1.9232 per share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (70,615
            )
            
            
            
            
            
            
            (70,615
            )Distribution
      Reinvestment and Share Purchase Plan
            
            
            
            
            
            
            
            
            
            
            17,855
            
            
            
            -
            
            
            
            457
            
            
            
            
            
            
            
            
            
            
            
            457Exercise
      of stock options
            
            
            
            
            
            
            
            
            
            
            87,298
            
            
            
            1
            
            
            
            1,629
            
            
            
            
            
            
            
            
            
            
            
            1,630OP
      unit conversion
            
            
            
            
            
            
            
            
            
            
            119,766
            
            
            
            2
            
            
            
            3,104
            
            
            
            
            
            
            
            
            
            
            
            3,106Restricted
      stock grant
            
            
            
            
            
            
            
            
            
            
            44,998
            
            
            
            -
            
            
            
            -
            
            
            
            
            
            
            
            
            
            
            
            -Amortization
      of restricted stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            560
            
            
            
            
            
            
            
            
            
            
            
            560Preferred
      stock dividends
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (17,437
            )
            
            
            
            
            
            
            (17,437
            )Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (77,165
            )
            
            
            
            
            
            
            (77,165
            )Other
      comprehensive loss on derivative instruments
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2
            )
            
            
            (2
            )Stock
      option expense
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            348
            
            
            
            
            
            
            
            
            
            
            
            348Transfer
      to minority interest in partnership
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,701
            )
            
            
            
            
            
            
            
            
            
            
            (2,701
            )Balance,
      December 31, 2006
            
            
            60,000
            
            
            
            150,000
            
            
            
            36,776,365
            
            
            
            368
            
            
            
            547,036
            
            
            
            (532,141
            )
            
            
            (28
            )
            
            
            225,235Distributions
      declared, $1.9232 per share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (73,122
            )
            
            
            
            
            
            
            (73,122
            )Distribution
      Reinvestment and Share Purchase Plan
            
            
            
            
            
            
            
            
            
            
            18,142
            
            
            
            -
            
            
            
            450
            
            
            
            
            
            
            
            
            
            
            
            450Exercise
      of stock options
            
            
            
            
            
            
            
            
            
            
            841,032
            
            
            
            9
            
            
            
            15,302
            
            
            
            
            
            
            
            
            
            
            
            15,311OP
      unit conversion
            
            
            
            
            
            
            
            
            
            
            8,000
            
            
            
            -
            
            
            
            1
            
            
            
            
            
            
            
            
            
            
            
            1Restricted
      stock grant, net of cancellations
            
            
            
            
            
            
            
            
            
            
            43,500
            
            
            
            -
            
            
            
            -
            
            
            
            
            
            
            
            
            
            
            
            -Amortization
      of restricted stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            845
            
            
            
            
            
            
            
            
            
            
            
            845Long
      term incentive grant
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            555
            
            
            
            
            
            
            
            
            
            
            
            555Preferred
      stock dividends
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (17,437
            )
            
            
            
            
            
            
            (17,437
            )Net
      income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            38,357
            
            
            
            
            
            
            
            38,357Other
      comprehensive loss on derivative instruments
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (376
            )
            
            
            (376
            )Stock
      option expense, net of offering costs
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            447
            
            
            
            
            
            
            
            
            
            
            
            447Transfer
      to minority interest in partnership
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,176
            )
            
            
            
            
            
            
            
            
            
            
            (1,176
            )Balance,
      December 31, 2007
            
            $
            60,000
            
            
            $
            150,000
            
            
            
            37,687,039
            
            
            $
            377
            
            
            $
            563,460
            
            
            $
            (584,343
            )
            
            $
            (404
            )
            
            $
            189,090





The accompanying notes are an integral
part of these consolidated financial statements.




56


GLIMCHER
REALTY TRUST


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(dollars
in thousands)




For
      the Years Ended December 31,2007
            
            
            2006
            
            
            2005Cash
      flows from operating activities:Net
      (loss) income
            
            $
            38,357
            
            
            $
            (77,165
            )
            
            $
            20,850Adjustments
      to reconcile net income (loss) to net cash providedby
      operating activities:Provision
      for doubtful accounts
            
            
            5,995
            
            
            
            6,696
            
            
            
            5,097Depreciation
      and amortization
            
            
            76,770
            
            
            
            75,481
            
            
            
            77,815Loan
      fee amortization
            
            
            2,024
            
            
            
            2,819
            
            
            
            2,662Equity
      in income of unconsolidated entities, net
            
            
            (1,133
            )
            
            
            (1,443
            )
            
            
            (51
            )Capitalized
      development costs charged to expense
            
            
            1,228
            
            
            
            367
            
            
            
            257Minority
      interest in operating partnership
            
            
            1,635
            
            
            
            (7,733
            )
            
            
            252Impairment
      losses
            
            
            30,378
            
            
            
            111,918
            
            
            
            16,393Return
      of minority interest share of earnings
            
            
            -
            
            
            
            -
            
            
            
            (252
            )Gain
      on sales of properties from discontinued operations
            
            
            (47,349
            )
            
            
            (1,717
            )
            
            
            (1,619
            )Gain
      on sales of outparcels
            
            
            (1,555
            )
            
            
            (3,895
            )
            
            
            (517
            )Stock
      option related expense
            
            
            1,877
            
            
            
            908
            
            
            
            664Net
      changes in operating assets and liabilities:Tenant
      accounts receivable, net
            
            
            4,988
            
            
            
            (3,815
            )
            
            
            (5,722
            )Prepaid
      and other assets
            
            
            (3,895
            )
            
            
            1,144
            
            
            
            (7,182
            )Accounts
      payable and accrued expenses
            
            
            (6,664
            )
            
            
            (7,335
            )
            
            
            (302
            )Net
      cash provided by operating activities
            
            
            102,656
            
            
            
            96,230
            
            
            
            108,345Cash
      flows from investing activities:Additions
      to investment in real estate
            
            
            (95,470
            )
            
            
            (77,128
            )
            
            
            (95,880
            )Acquisitions
      of property
            
            
            (30,033
            )
            
            
            (55,715
            )
            
            
            -Contribution
      from joint venture partner
            
            
            -
            
            
            
            11,257
            
            
            
            -Investment
      in joint ventures
            
            
            (11,567
            )
            
            
            (13,266
            )
            
            
            (44,248
            )Proceeds
      from sales of assets
            
            
            90
            
            
            
            -
            
            
            
            -Proceeds
      from sales of properties
            
            
            205,404
            
            
            
            24,690
            
            
            
            23,624Proceeds
      from sales of outparcels
            
            
            2,724
            
            
            
            6,770
            
            
            
            2,975Withdrawals
      from restricted cash
            
            
            75
            
            
            
            266
            
            
            
            101Additions
      to deferred expenses and other
            
            
            (5,328
            )
            
            
            (5,785
            )
            
            
            (6,775
            )Net
      cash provided by (used in) investing activities
            
            
            65,895
            
            
            
            (108,911
            )
            
            
            (120,203
            )Cash
      flows from financing activities:Proceeds
      from revolving line of credit, net
            
            
            28,000
            
            
            
            122,000
            
            
            
            76,000Additions
      to deferred financing costs
            
            
            -
            
            
            
            (2,511
            )
            
            
            (2,259
            )Proceeds
      from issuance of mortgages and other notes payable
            
            
            -
            
            
            
            168,331
            
            
            
            111,669Principal
      payments on mortgages and other notes payable
            
            
            (107,238
            )
            
            
            (179,497
            )
            
            
            (88,364
            )Exercise
      of stock options and other
            
            
            15,761
            
            
            
            2,087
            
            
            
            7,095Cash
      distributions
            
            
            (94,678
            )
            
            
            (93,799
            )
            
            
            (92,908
            )Net
      cash (used in) provided by financing activities
            
            
            (158,155
            )
            
            
            16,611
            
            
            
            11,233Net
      change in cash and cash equivalents
            
            
            10,396
            
            
            
            3,930
            
            
            
            (625
            )Cash
      and cash equivalents, at beginning of period
            
            
            11,751
            
            
            
            7,821
            
            
            
            8,446Cash
      and cash equivalents, at end of period
            
            $
            22,147
            
            
            $
            11,751
            
            
            $
            7,821




The accompanying notes are an integral
part of these consolidated financial statements.





57





GLIMCHER
REALTY TRUST


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(dollars
in thousands, except share and unit amounts)





1.
            Organization
      and Basis of Presentation





Organization





Glimcher
Realty Trust is a fully-integrated, self-administered and self-managed, Maryland
real estate investment trust (“REIT”), which owns, leases, manages and develops
a portfolio of retail properties (the “Property” or “Properties”) consisting of
enclosed regional and super regional malls (“Malls”) and community shopping
centers (“Community Centers”). At December 31, 2007, GRT both owned interests in
and managed 27 Properties, consisting of 23 Malls (21 wholly owned and 2
partially owned through a joint venture) and 4 Community Centers.  The
“Company” refers to Glimcher Realty Trust and Glimcher Properties Limited
Partnership, a Delaware limited partnership, as well as entities in which the
Company has an interest, collectively.




Basis
of Presentation





The
consolidated financial statements include the accounts of Glimcher Realty Trust
(“GRT”), Glimcher Properties Limited Partnership (the “Operating Partnership,”
“OP” or “GPLP”) and Glimcher Development Corporation (“GDC”). As of December 31,
2007, GRT was a limited partner in GPLP with a 92.1% ownership interest and
GRT’s wholly owned subsidiary, Glimcher Properties Corporation (“GPC”), was
GPLP’s sole general partner, with a 0.5% interest in GPLP. GDC, a wholly-owned
subsidiary of GPLP, provides development, construction, leasing and legal
services to the Company’s affiliates and is a taxable REIT subsidiary. The
equity method of accounting is applied to entities in which the Company does not
have a controlling direct or indirect voting interest, but can exercise
influence over the entity with respect to its operations and major decisions.
These entities are reflected on the Company’s consolidated financial statements
as “Investments in and advances to unconsolidated real estate entities.” All
significant intercompany accounts and transactions have been eliminated in the
consolidated financial statements.





2.
            Summary
      of Significant Accounting Policies





Revenue
Recognition





Minimum
rents are recognized on an accrual basis over the terms of the related leases on
a straight-line basis.  Percentage rents, which are based on tenants’
sales as reported to the Company, are recognized once the sales reported by such
tenants exceed any applicable breakpoints as specified in the tenants’
leases.  The percentage rents are recognized based upon the
measurement dates specified in the leases which indicate when the percentage
rent is due.





Recoveries
from tenants for real estate taxes, insurance and other shopping center
operating expenses are recognized as revenues in the period that the applicable
costs are incurred. The Company recognizes differences between estimated
recoveries and the final billed amounts in the subsequent year.  Other
revenues primarily consist of fee income which relates to property management
services and is recognized in the period in which the service is performed,
licensing agreement revenues which are recognized as earned, and the proceeds
from sales of development land which are generally recognized at the closing
date.





Tenant
Accounts Receivable





The
allowance for doubtful accounts reflects the Company’s estimate of the amounts
of the recorded accounts receivable at the balance sheet date that will not be
recovered from cash receipts in subsequent periods.  The Company’s
policy is to record a periodic provision for doubtful accounts based on total
revenues.  The Company also periodically reviews specific tenant
balances and determines whether an additional allowance is
necessary.  In recording such a provision, the Company considers a
tenant’s creditworthiness, ability to pay, probability of collections and
consideration of the retail sector in which the tenant operates.  The
allowance for doubtful accounts is reviewed periodically based upon the
Company’s historical experience.




58


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





Investment
in Real Estate – Carrying Value of Assets





The
Company maintains a diverse portfolio of real estate assets.  The
portfolio holdings have increased as a result of both acquisitions and the
development of Properties and have been reduced by selected sales of
assets.  The amounts to be capitalized as a result of acquisitions and
developments and the periods over which the assets are depreciated or amortized
are determined based on the application of accounting standards that may require
estimates as to fair value and the allocation of various costs to the individual
assets.  The Company allocates the cost of the acquisition based upon
the estimated fair value of the net assets acquired.  The Company also
estimates the fair value of intangibles related to its
acquisitions.  The valuation of the fair value of the intangibles
involves estimates related to market conditions, probability of lease renewals
and the current market value of in-place leases.  This market value is
determined by considering factors such as the tenant’s industry, location within
the Property and competition in the specific market in which the Property
operates. Differences in the amount attributed to the intangible assets can be
significant based upon the assumptions made in calculating these
estimates.





Depreciation
and Amortization





Depreciation
expense for real estate assets is computed using a straight-line method and
estimated useful lives for buildings and improvements using a weighted average
composite life of forty years and three to ten years for equipment and
fixtures.  Expenditures for leasehold improvements and construction
allowances paid to tenants are capitalized and amortized over the initial term
of each lease.  Cash allowances paid to tenants that are used for
purposes other than improvements to the real estate are amortized as a reduction
to minimum rents over the initial lease term.  Maintenance and repairs
are charged to expense as incurred.  Cash allowances paid in return
for operating covenants from retailers who own their real estate are capitalized
as contract intangibles.  These intangibles are amortized over the
period the retailer is required to operate their store.





Investment
in Real Estate – Impairment Evaluation





Management
evaluates the recoverability of its investment in real estate assets in
accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144,
“Accounting for the Impairment or Disposal of Long-Lived
Assets.”  This statement requires that long-lived assets be reviewed
for impairment whenever events or changes in circumstances indicate that
recoverability of the asset is not assured.





The
Company evaluates the recoverability of its investments in real estate assets to
be held and used each quarter and records an impairment charge when there is an
indicator of impairment and the undiscounted projected cash flows are less than
the carrying amount for a particular Property.  The estimated cash
flows used for the impairment analysis and the determination of estimated fair
value are based on the Company’s plans for the respective assets and the
Company’s views of market and economic conditions.  The estimates
consider matters such as current and historical rental rates, occupancies for
the respective Properties and comparable properties, sales contracts for certain
land parcels and recent sales data for comparable properties.  Changes
in estimated future cash flows due to changes in the Company’s plans or views of
market and economic conditions could result in recognition of impairment losses,
which, under the applicable accounting guidance, could be
substantial.





The
Company recognized a $2,900 non-cash impairment charge on our Jersey Gardens
Center in the fourth quarter of 2007.  The charge resulted from a
ground lease for a diner restaurant with an option to purchase by tenant and a
sales contract for the last undeveloped parcel.  The purchase price
under the ground lease option and the sales price for the final undeveloped
parcel are less than the basis of these parcels.





Sale
of Real Estate Assets





The
Company recognizes property sales in accordance with SFAS No. 66, “Accounting
for Sales of Real Estate.” The Company generally records the sales of operating
properties and outparcels using the full accrual method at closing, when the
earnings process is deemed to be complete. Sales not qualifying for full
recognition at the time of sale are accounted for under other appropriate
deferral methods.





59


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





Investment
in Real Estate – Held-for-Sale





The
Company evaluates the held-for-sale classification of its real estate each
quarter.  Assets that are classified as held-for-sale are recorded at
the lower of their carrying amount or fair value less cost to sell. Management
evaluates the fair value less cost to sell each quarter and records impairment
charges when required. Assets are generally classified as held-for-sale once
management commits to a plan to sell the Properties and has initiated an active
program to market them for sale.  The results of operations of these
real estate properties are reflected as discontinued operations in all periods
reported.





On
occasion, the Company will receive unsolicited offers from third parties to buy
individual Properties.  Under these circumstances, the Company will
classify the properties as held-for-sale when a sales contract is executed with
no contingencies and the prospective buyer has funds at risk to ensure
performance.





Accounting
for Acquisitions





The
Company accounts for acquisitions of Properties in accordance with SFAS No. 141,
“Business Combinations.”  The fair value of the real estate acquired
is allocated to acquired tangible assets, consisting of land, building and
tenant improvements, and identified intangible assets and liabilities,
consisting of the value of above-market and below-market leases, acquired
in-place leases and the value of tenant relationships, based in each case on
their fair values.  Purchase accounting is applied to assets and
liabilities related to real estate entities acquired based upon the percentage
of interest acquired.





The fair
value of the tangible assets of an acquired property (which includes land,
building and tenant improvements) is determined by valuing the property as if it
were vacant, based on management’s determination of the relative fair values of
these assets.  Management determines the as-if-vacant fair value of an
acquired property using methods to determine the replacement cost of the
tangible assets.





In
determining the fair value of the identified intangible assets and liabilities
of an acquired property, above-market and below-market lease values are recorded
based on the present value (using an interest rate which reflects the risks
associated with the leases acquired) of the difference between (i) the
contractual amounts to be paid pursuant to the in-place leases and (ii)
management’s estimate of fair market lease rates for the corresponding in-place
leases, measured over a period equal to the remaining non-cancelable term of the
lease.  The capitalized above-market lease values and the capitalized
below-market lease values are amortized as an adjustment to rental income over
the initial lease term.





The
aggregate value of in-place leases is determined by evaluating various factors,
including an estimate of carrying costs during the expected lease-up periods,
current market conditions and similar leases.  In estimating carrying
costs, management includes real estate taxes, insurance and other operating
expenses, and estimates of lost rental revenue during the expected lease-up
periods based on current market demand.  Management also estimates
costs to execute similar leases including leasing commissions, legal and other
related costs.  The value assigned to this intangible asset is
amortized over the remaining lease term plus an assumed renewal period that is
reasonably assured.





The
aggregate value of other acquired intangible assets include tenant
relationships.  Factors considered by management in assigning a value
to these relationships include: assumptions of probability of lease renewals,
investment in tenant improvements, leasing commissions and an approximate time
lapse in rental income while a new tenant is located.  The value
assigned to this intangible asset is amortized over the average life of the
relationship.





Deferred
Costs





The
Company capitalizes initial direct costs in accordance with SFAS No. 91,
“Accounting for Nonrefundable Fees and Costs Associated with Originating or
Acquiring Loans and Initial Direct Costs of Leases,” and amortizes these costs
over the initial lease term.  The costs are capitalized upon the
execution of the lease and the amortization period begins the earlier of the
store opening date or the date the tenant’s lease obligation
begins.





60


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





Stock-Based
Compensation





Effective
January 1, 2006, the Company adopted the fair value recognition provisions of
SFAS No. 123(R), which expands and clarifies SFAS No. 123, “Accounting for
Stock-Based Compensation.” In January 2003, the Company adopted the fair value
recognition provisions of SFAS No. 123 as amended by SFAS No. 148, “Accounting
for Stock-Based Compensation - Transition and Disclosure,” prospectively to all
awards granted, modified or settled on or after January 1, 2003. Accordingly,
the Company recognized as compensation expense the fair value of all awards
granted after January 1, 2003. SFAS No. 123(R) requires companies to measure the
cost of employee services received in exchange for an award of an equity
instrument based on the grant-date fair value of the award. The cost is expensed
over the requisite service period (usually the vesting period) beginning the
first quarter of 2006 for awards issued after June 15, 2005. The adoption of
SFAS No. 123(R) did not have a material impact on the Company’s financial
position or results of operations.





Cash
and Cash Equivalents





For purposes of the statements of cash
flows, all highly liquid investments purchased with original maturities of three
months or less are considered to be cash equivalents.  At December 31,
2007 and 2006, cash and cash equivalents primarily consisted of overnight
purchases of debt securities.   The carrying amounts approximate
fair value.





Restricted
Cash





Restricted
cash consists primarily of cash held for real estate taxes, insurance, property
reserves for maintenance and expansion or leasehold improvements as required by
certain of the loan agreements.





Deferred
Expenses





Deferred
expenses consist principally of financing fees.  These costs are
amortized as interest expense over the terms of the respective
agreements.  Deferred expenses in the accompanying consolidated
balance sheets are shown net of accumulated amortization.





Derivative
Instruments and Hedging Activities





The
Company recognizes all derivative financial instruments in the consolidated
financial statements at fair value regardless of the purpose or intent for
holding the instrument.  Changes in the fair value of derivative
financial instruments that qualify for hedge accounting are recorded in
stockholders’ equity as a component of comprehensive income or as an adjustment
to the carrying value of the hedged item.  Changes in fair values of
derivatives not qualifying for hedge accounting are reported in
earnings.





For
derivative instruments that are designated and qualify as a cash flow hedge
(i.e., hedging the exposure to variability in expected future cash flows that is
attributable to a particular risk), the effective portion of the gain or loss on
the derivative instrument is reported as a component of accumulated other
comprehensive income and reclassified into interest income or interest expense
in the same period or periods during which the hedged item affects interest
income or interest expense. The remaining gain or loss of the derivative
instruments in excess of the cumulative change in the
present value of future cash flows of the hedged item, if any, is ineffective
and is recognized in other income/other expense during  the
period  of  change.  Upon termination of a
derivative instrument prior to maturity, the aforementioned adjustment to
accumulated other comprehensive income is amortized or accreted into interest
income or interest expense over the remaining term of the hedge relationship
using the effective interest method.  Should the hedged item mature,
be sold or extinguished prior to the end of the hedge relationship or a
forecasted transaction is probable of not occurring, the aforementioned amounts
in accumulated other comprehensive income are reclassified to interest income or
interest expense and the derivative instrument’s change in fair value from that
point forward will be recorded in other income or other expense.





61


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





Interest
Costs





The components of the Company’s
interest costs related to its continuing operations are shown in the table
below.  Interest expense and loan fees are recorded consistent with
the terms of the Company’s financing arrangements.  Capitalized
interest is recorded as a reduction to interest expense based upon the Company’s
weighted average borrowing rate.




Year
      Ended December 31,2007
            
            
            2006
            
            
            2005Interest
      expense
            
            $
            86,073
            
            
            $
            80,313
            
            
            $
            70,007Amortization
      of loan fees
            
            
            1,867
            
            
            
            1,853
            
            
            
            1,866Total
      interest expense
            
            
            87,940
            
            
            
            82,166
            
            
            
            71,873Interest
      capitalized
            
            
            4,793
            
            
            
            2,885
            
            
            
            2,398Total
      interest costs
            
            $
            92,733
            
            
            $
            85,051
            
            
            $
            74,271





Investment
in Unconsolidated Real Estate Entities





The
Company evaluates all joint venture arrangements for
consolidation.  The percentage interest in the joint venture,
evaluation of control and whether a variable interest entity (“VIE”) exists are
all considered in determining if the arrangement qualifies for
consolidation.





The
Company accounts for its investments in unconsolidated real estate entities
using the equity method of accounting whereby the cost of an investment is
adjusted for the Company’s share of equity in net income or loss beginning on
the date of acquisition and reduced by distributions received.  The
income or loss of each joint venture investor is allocated in accordance with
the provisions of the applicable operating agreements.  The allocation
provisions in these agreements may differ from the ownership interest held by
each investor.   Differences between the carrying amount of the
Company’s investment in the respective joint venture and the Company’s share of
the underlying equity of such unconsolidated entities are amortized over the
respective lives of the underlying assets as applicable.





The
Company periodically reviews its investment in unconsolidated real estate
entities for other than temporary declines in market value.  Any
decline that is not expected to be recovered in the next twelve months is
considered other than temporary and an impairment charge is recorded as a
reduction in the carrying value of the investment.





Advertising
Costs





The
Company promotes its Properties on behalf of its tenants through various media.
Advertising is expensed as incurred and the majority of the advertising expense
is recovered from the tenants through lease obligations. Advertising expense was
$5,547, $6,146, and $6,792 for the years ended December 31, 2007, 2006, and
2005, respectively.





Income
Taxes





GRT files as a REIT under Sections
856-860 of the Internal Revenue Code of 1986, as amended (the
“Code”).  In order to qualify as a REIT, GRT is required to distribute
at least 90.0% of its ordinary taxable income to shareholders and to meet
certain asset and income tests as well as certain other requirements. GRT will
generally not be liable for federal income taxes, provided it satisfies the
necessary distribution requirements and maintains its REIT
status.  Even as a qualified REIT, the Company is subject to certain
state and local taxes on its income and property.





The
Company’s subsidiary, GDC, has elected taxable REIT subsidiary status under
Section 856(l) of the Code.   GPLP wholly owns
GDC.  For federal income tax purposes, GDC is treated as a separate
entity and taxed as a C-Corporation.  In
accordance with SFAS No. 109 “Accounting for Income Taxes,” deferred tax assets
and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases, and operating
loss carryforwards of GDC.  Deferred tax assets and liabilities are
measured using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled.




62


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





Minority
Interests





Minority
interests represent the aggregate partnership interest in the Operating
Partnership held by the Operating Partnership limited partner unit holders (the
“Unit Holders”).  Income allocated to minority interest is based on
the Unit Holders ownership percentage of the Operating
Partnership.  The ownership percentage is determined by dividing the
numbers of Operating Partnership Units (“OP Units”) held by the Unit Holders by
the total number of OP Units outstanding.  The issuance of additional
shares of beneficial interest (the “Common Shares”, “Shares” or “Share”) or OP
Units changes the percentage ownership of both the Unit Holders and the
Company.  Since an OP unit is generally redeemable for cash or Shares
at the option of the Company, it is deemed to be equivalent to a
Share.  Therefore, such transactions are treated as capital
transactions and result in an allocation between shareholders’ equity and
minority interest in the accompanying balance sheets to account for the change
in the ownership of the underlying equity in the Operating
Partnership.





Supplemental
Disclosure of Non-Cash Financing and Investing Activities





Non-cash
transactions resulting from other accounts payable and accrued expenses for
ongoing operations such as real estate improvements and other assets were $5,704
and $13,645 as of December 31, 2007 and 2006, respectively.  In
connection with the sale of University Mall, the Company received a $5,000
non-interest bearing note that was discounted to its present value in
2007.  In connection with the purchase of Merritt Square Mall in
Merritt Island, Florida, the Company assumed a $57,000 mortgage loan with a
5.35% interest rate.





Share
distributions of $18,120 and $17,682 have been declared, but not paid as of
December 31, 2007 and 2006, respectively.  Operating Partnership
distributions of $1,436 and $1,440 have been declared, but not paid as of
December 31, 2007 and 2006, respectively.  Distributions for our 8.75%
Series F Cumulative Preferred Shares of Beneficial Interest (“Series F Preferred
Shares”) of $1,313 have been declared, but not paid as of December 31, 2007 and
2006.  Distributions for our 8.125% Series G Cumulative Preferred
Shares of Beneficial Interest (“Series G Preferred Shares”) of $3,046 have been
declared, but not paid as of December 31, 2007 and 2006.





Comprehensive
Income





SFAS No.
130, “Reporting Comprehensive Income,” establishes guidelines for the reporting
and display of comprehensive income and its components in financial
statements.  Comprehensive income includes net income and all other
non-owner charges in shareholders’ equity during a period, including unrealized
gains and losses from value adjustments on certain derivative
instruments.





Use
of Estimates





The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods.  Actual results could differ from those
estimates.




63




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





New
Accounting Pronouncements





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities.” This standard permits companies to
make a one-time election to carry eligible types of financial assets and
liabilities at fair value (“FV”), even if FV measurement is not required under
GAAP. SFAS No. 159 is effective for fiscal years beginning after November 15,
2007 and early adoption is permitted. The Company did not elect early adoption
of SFAS No. 159 and is in the process of determining its impact on the Company’s
financial position or results of operations.





In late
2007, the FASB issued SFAS No. 141R, a revision of SFAS No. 141, “Accounting for
Business Combinations.”  This standard expands the use of fair value
principles as well as the treatment of pre-acquisition costs.  This
standard is effective for fiscal years beginning after December 15, 2008 (and
thus acquisitions after December 31, 2008).  The Company is evaluating
the impact of this standard as it relates to Company’s future
acquisitions.





In late
2007, the FASB issued SFAS No. 160, “Reporting for Minority
Interests.”  Currently, minority interest is not part of shareholders’
equity. Under SFAS No. 160, minority interest will become part of shareholders’
equity. This change may affect key financial ratios, such as debt to equity
ratios.  This standard is effective no later than for fiscal years
beginning after December 15, 2008.  The Company is evaluating the
impact of this standard as it relates to Company’s financial position, results
of operations and ratios.





In
February, 2008, FASB issued Staff Position No. FAS 157-2 which provides for a
one-year deferral of the effective date of SFAS 157 for non-financial assets and
liabilities that are recognized or disclosed at fair value in the financial
statements on a nonrecurring basis, except those that are recognized or
disclosed at fair value in the financial statements on a recurring basis. The
Company is evaluating the impact of this standard as it relates to the Company’s
financial position and results of operations.





Reclassifications





Certain
reclassifications of prior period amounts, including the presentation of the
Statement of Operations required by SFAS No. 144, “Accounting for the Impairment
or Disposal of Long-Lived Assets,” have been made in the financial statements in
order to conform to the 2007 presentation.





3.
            Real
      Estate Assets Held-for-Sale





SFAS No.
144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” requires
that long-lived assets that are to be disposed of by sale be measured at the
lower of book value or fair value less costs to sell. During the year ended
December 31, 2007 the Company sold four Mall Properties (Almeda Mall, Montgomery
Mall, Northwest Mall and University Mall) and classified two Community Centers
(Ohio River Plaza and Knox Village Square) and one Mall (The Great Mall of the
Great Plains) as held-for-sale. The financial results, including any impairment
charges for these Properties, are reported as discontinued operations in the
Consolidated Statements of Operations with the carrying value reflected as
held-for-sale on the Consolidated Balance Sheet.  The table below
provides information on the held-for-sale assets.


December 31,2007
            
            
            2006Number
      of Properties sold
            
            
            4
            
            
            
            7Number
      of Properties held-for-sale
            
            
            4
            
            
            
            5Real
      estate assets held-for-sale
            
            $
            68,671
            
            
            $
            192,301Mortgage
      notes payable associated with properties held-for-sale
            
            $
            81,541
            
            
            $
            101,786





64


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – continued


(dollars
in thousands, except share and unit amounts)





4.
              Tenant
      Accounts Receivable





The Company’s accounts receivable is
comprised of the following components:





Accounts
      Receivable – Assets Held-For-Investment
            
            December 31, 2007
            
            
            December 31, 2006Billed
      Receivables
            
            $
            17,453
            
            
            $
            17,716Straight-line
      Receivables
            
            
            20,509
            
            
            
            22,132Unbilled
      Receivables
            
            
            8,638
            
            
            
            8,602Less:
      Allowance for Doubtful Accounts
            
            
            (7,125
            )
            
            
            (5,785
            )Net
      Accounts Receivable
            
            $
            39,475
            
            
            $
            42,665




Accounts
      Receivable – Assets Held-For-Sale
            
            December 31, 2007
            
            
            December 31, 2006Billed
      Receivables
            
            $
            2,300
            
            
            $
            6,429Straight-line
      Receivables
            
            
            329
            
            
            
            2,279Unbilled
      Receivables
            
            
            1,032
            
            
            
            1,142Less:
      Allowance for Doubtful Accounts
            
            
            (1,386
            )
            
            
            (2,613
            )Net
      Accounts Receivable
            
            $
            2,275
            
            
            $
            7,237








65




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – continued


(dollars
in thousands, except share and unit amounts)





5.
            Mortgage Notes Payable as of
      December 31, 2007 and December 31, 2006 consist of the
      following:




Description/Borrower
                
                Carrying
      amount of Mortgage Notes Payable
                
                
                Interest
      Rate
                
                Interest
                  Terms
                
                Payment
      Terms
                
                Payment
      at Maturity
                
                Maturity
                  DateMortgage
      Notes Payable
                
                2007
                
                
                2006
                
                
                2007
                
                
                2006Fixed
      Rate:Mount
      Vernon Venture, LLC (o)(p)
                
                $
                -
                
                
                $
                8,753
                
                
                
                7.41%
                
                
                
                7.41%
                
                
                
                (a)
                
                $
                8,624
                
                Feb.
      11, 2008Morgantown
      Mall Associates, LP
                
                
                51,503
                
                
                
                52,474
                
                
                
                6.89%
                
                
                
                6.89%
                
                (m)
                
                (a)
                
                $
                50,823
                
                (g)GM
      Olathe, LLC (o)
                
                
                -
                
                
                
                30,000
                
                
                
                6.35%
                
                
                
                6.35%
                
                (l)
                
                (b)
                
                $
                30,000
                
                Jan.
      12, 2009Grand
      Central, LP
                
                
                47,001
                
                
                
                47,815
                
                
                
                7.18%
                
                
                
                7.18%
                
                
                
                (a)
                
                $
                46,065
                
                Feb.
      1, 2009Johnson
      City Venture, LLC
                
                
                38,323
                
                
                
                38,787
                
                
                
                8.37%
                
                
                
                8.37%
                
                
                
                (a)
                
                $
                37,026
                
                June
      1, 2010Polaris
      Center, LLC
                
                
                39,969
                
                
                
                40,482
                
                
                
                8.20%
                
                
                
                8.20%
                
                (m)
                
                (a)
                
                $
                38,543
                
                (h)Glimcher
      Ashland Venture, LLC
                
                
                24,273
                
                
                
                24,809
                
                
                
                7.25%
                
                
                
                7.25%
                
                
                
                (a)
                
                $
                21,817
                
                Nov.
      1, 2011Dayton
      Mall Venture, LLC
                
                
                54,983
                
                
                
                55,886
                
                
                
                8.27%
                
                
                
                8.27%
                
                (m)
                
                (a)
                
                $
                49,864
                
                (i)Glimcher
      WestShore, LLC
                
                
                93,624
                
                
                
                95,255
                
                
                
                5.09%
                
                
                
                5.09%
                
                
                
                (a)
                
                $
                84,824
                
                Sept.
      9, 2012PFP
      Columbus, LLC
                
                
                139,692
                
                
                
                142,129
                
                
                
                5.24%
                
                
                
                5.24%
                
                
                
                (a)
                
                $
                124,572
                
                April
      11, 2013LC
      Portland, LLC
                
                
                131,069
                
                
                
                133,256
                
                
                
                5.42%
                
                
                
                5.42%
                
                (m)
                
                (a)
                
                $
                116,922
                
                (j)JG
      Elizabeth, LLC
                
                
                156,082
                
                
                
                158,791
                
                
                
                4.83%
                
                
                
                4.83%
                
                
                
                (a)
                
                $
                135,194
                
                June
      8, 2014MFC
      Beavercreek, LLC
                
                
                107,499
                
                
                
                109,232
                
                
                
                5.45%
                
                
                
                5.45%
                
                
                
                (a)
                
                $
                92,762
                
                Nov.
      1, 2014Glimcher
      SuperMall Venture, LLC
                
                
                58,624
                
                
                
                59,515
                
                
                
                7.54%
                
                
                
                7.54%
                
                (m)
                
                (a)
                
                $
                49,969
                
                (k)Glimcher
      Merritt Square, LLC
                
                
                57,000
                
                
                
                -
                
                
                
                5.35%
                
                
                
                
                
                
                
                (c)
                
                $
                52,914
                
                Sept.
      1, 2015RVM
      Glimcher, LLC
                
                
                50,000
                
                
                
                50,000
                
                
                
                5.65%
                
                
                
                5.65%
                
                
                
                (d)
                
                $
                44,931
                
                Jan.
      11, 2016WTM
      Glimcher, LLC
                
                
                60,000
                
                
                
                60,000
                
                
                
                5.90%
                
                
                
                5.90%
                
                
                
                (b)
                
                $
                60,000
                
                June
      8, 2016EM
      Columbus II, LLC
                
                
                43,000
                
                
                
                43,000
                
                
                
                5.87%
                
                
                
                5.87%
                
                
                
                (e)
                
                $
                38,057
                
                Dec.
      11, 2016Colonial
      Park Mall, LP
                
                
                
                
                
                
                32,451
                
                
                
                
                
                
                
                7.73%Tax
      Exempt Bonds (q)
                
                
                19,000
                
                
                
                19,000
                
                
                
                6.00%
                
                
                
                6.00%
                
                
                
                (f)
                
                $
                19,000
                
                Nov.
      1, 20281,171,642
                
                
                
                1,201,635Other:Fair
      value adjustments
                
                
                (973
                )
                
                
                1,465Mortgage
      Notes Payable
                
                
                1,170,669
                
                
                
                1,203,100Properties
      Held-for-SaleMount Vernon
      Venture, LLC (o)(p)
                
                
                8,634
                
                
                
                
                
                
                
                7.41%
                
                
                
                7.41%
                
                
                
                (a)
                
                
                8,624
                
                Feb.
      11,2008Charlotte
      Eastland Mall, LLC (n)(o)
                
                
                42,907
                
                
                
                43,766
                
                
                
                7.84%
                
                
                
                7.84%
                
                (m)
                
                (a)
                
                
                42,302
                
                (g)GM Olathe,
      LLC (o)
                
                
                30,000
                
                
                
                -
                
                
                
                6.35%
                
                
                
                6.35%
                
                (l)
                
                (b)
                
                
                30,000
                
                Jan.
      12, 2009Montgomery
      Mall Associates, LP (n)
                
                
                -
                
                
                
                25,000
                
                
                
                
                
                
                
                7.03%SAN
      Mall, LP (n)
                
                
                -
                
                
                
                33,020
                
                
                
                
                
                
                
                8.35%Mortgage
      Notes Payable Associated with Properties Held-for-Sale
                
                $
                81,541
                
                
                $
                101,786


(a)
            The
      loan requires monthly payments of principal and
  interest.(b)
            The
      loan requires monthly payments of interest only.(c)
            The
      loan requires monthly payments of interest only until October 2010,
      thereafter principal and interest are required.(d)
            The
      loan requires monthly payments of interest only until February 2009,
      thereafter principal and interest are required.(e)
            The
      loan requires monthly payments of interest only until December 2008,
      thereafter principal and interest are required.(f)
            The
      loan requires semi-annual payments of interest.(g)
            The
      loan matures in September 2028, with an optional prepayment (without
      penalty) date on September 11, 2008.(h)
            The
      loan matures in June 2030, with an optional prepayment (without penalty)
      date on June 1, 2010.(i)
            The
      loan matures in July 2027, with an optional prepayment (without penalty)
      date on July 11, 2012.(j)
            The
      loan matures in June 2033, with an optional prepayment (without penalty)
      date on June 11, 2013.(k)
            The
      loan matures in September 2029, with an optional prepayment (without
      penalty) date on February 11, 2015.(l)
            Interest
      rate of LIBOR plus 165 basis points fixed through a SWAP agreement at a
      rate of 6.35%.(m)
            Interest
      rate escalates after optional prepayment date.(n)
            Mortgage
      notes payable associated with properties held-for-sale as of December 31,
      2006.(o)
            Mortgage
      notes payable associated with properties held-for-sale as of December 31,
      2007.(p)
            This
      loan was paid off in February 2008.(q)
            The
      bonds were issued by the NJ Economic Development Authority as part of the
      Financing for the development of the Jersey Gardens Mall
      site.  Although not secured by the Property, the loan is fully
      guaranteed by Glimcher Realty
Trust.





66


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – continued


(dollars
in thousands, except share and unit amounts)





All
mortgage notes payable are collateralized by Properties with net book values of
$1,399,832 and $1,444,186 at December 31, 2007 and December 31, 2006,
respectively. Certain of the loans contain financial covenants regarding minimum
net operating income and coverage ratios.  Management believes they
are in compliance with all covenants at December 31,
2007.  Additionally, one of the loans has cross-default provisions and
is cross-collateralized with mortgages on the Properties owned by Morgantown
Mall Associates, LP.  Under such cross-default provisions, a default
under any mortgage included in a cross-defaulted loan may constitute a default
under all such mortgages under that loan and may lead to acceleration of the
indebtedness due on each Property within the collateral
pool.  Additionally, $30,000 of mortgage notes payable relating to
certain Properties are guaranteed by the Company as of December 31,
2007.





Principal
maturities (excluding extension options) on mortgage notes payable during the
five years subsequent to December 31, 2007, are as follows: $118,620 in 2008;
$92,957 in 2009; $92,925 in 2010; $40,080 in 2011; $151,849 in 2012; and
$756,752 thereafter.





6.
            Notes
      Payable





The
Company’s $470,000 unsecured credit facility (“Credit Facility”) matures in
December 2009 and has a one-year extension option available to the Company,
subject to the satisfaction of certain conditions.  It is expandable
to $600,000, provided there is no default under the Credit Facility and one or
more participating lenders agrees to increase their funding commitment or one or
more new participating lenders is added to the Credit Facility.  The
interest rate ranges from LIBOR plus 0.95% to LIBOR plus 1.40% depending upon
the Company’s ratio of debt to total asset value.  The Credit Facility
contains customary covenants, representations, warranties and events of default,
including maintenance of a specified minimum net worth requirement; a total debt
to total asset value ratio; a secured debt to total asset value ratio; an
interest coverage ratio and a fixed charge coverage ratio.  Management
believes the Company is in compliance with all covenants under the Credit
Facility as of December 31, 2007.





At
December 31, 2007, the outstanding balance on the Credit Facility was
$300,000.  Additionally, $21,176 represented a holdback on the
available balance for letters of credit issued under the Credit
Facility.  As of December 31, 2007, the unused balance of the Credit
Facility available to the Company was $148,824 and the interest rate was
5.65%.





At
December 31, 2006, the outstanding balance on the Credit Facility was $272,000
and the interest rate was 6.40%.  Additionally, $20,150 represented a
holdback on the available balance for letters of credit issued under the Credit
Facility.  As of December 31, 2006, the unused balance of the Credit
Facility available to the Company was $177,850.





7.
            Income
      Taxes





The following table reconciles the
Company’s net income to taxable income for the years ended December 31, 2007,
2006 and 2005:




2007
            
            
            2006
            
            
            2005Net
      income (loss)
            
            $
            38,357
            
            
            $
            (77,165
            )
            
            $
            20,850Add:
      Net loss of taxable REIT subsidiaries
            
            
            1,488
            
            
            
            1,163
            
            
            
            2,501Net
      income (loss) from REIT operations (1)
            
            
            39,845
            
            
            
            (76,002
            )
            
            
            23,351Add:
      Book depreciation and amortization
            
            
            72,901
            
            
            
            71,923
            
            
            
            73,622Less:
      Tax depreciation and amortization
            
            
            (57,321
            )
            
            
            (57,573
            )
            
            
            (56,847
            )Book
      (gain) loss from capital transactions and impairments
            
            
            (17,229
            )
            
            
            99,687
            
            
            
            13,083Tax
      gain (loss) from capital transactions
            
            
            126
            
            
            
            (4,079
            )
            
            
            (14,624
            )Stock
      options
            
            
            (5,418
            )
            
            
            (529
            )
            
            
            (892
            )Other
      book/tax differences, net
            
            
            (2,812
            )
            
            
            (508
            )
            
            
            (516
            )Taxable
      income before adjustments
            
            
            30,092
            
            
            
            32,919
            
            
            
            37,177Less:  Capital
      gains
            
            
            (126
            )
            
            
            (196
            )
            
            
            (1,614
            )Adjusted
      taxable income subject to 90% requirement
            
            $
            29,966
            
            
            $
            32,723
            
            
            $
            35,563




(1)  Adjustments
      to “Net income (loss) from REIT operations” are net of amounts
      attributable to minority interest and taxable REIT
      subsidiaries.




67


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





Reconciliation Between Cash
Dividends Paid and Dividends Paid Deduction:





The following table reconciles cash
dividends paid with the dividends paid deduction for the years ended December
31, 2007, 2006 and 2005:




2007
            
            
            2006
            
            
            2005Cash
      dividends paid
            
            $
            88,917
            
            
            $
            87,922
            
            
            $
            86,593Less:
      Dividends designated to prior year
            
            
            (22,041
            )
            
            
            (21,912
            )
            
            
            (21,516
            )Plus:
      Dividends designated from following year
            
            
            22,479
            
            
            
            22,041
            
            
            
            21,912Less:
      Portion designated return of capital
            
            
            (58,267
            )
            
            
            (55,132
            )
            
            
            (49,812
            )Dividends
      paid deduction
            
            $
            31,088
            
            
            $
            32,919
            
            
            $
            37,177





Characterization of
Distributions:





The following table characterizes
distributions paid per common share for the years ended December 31, 2007, 2006
and 2005:




2007
            
            
            2006
            
            
            2005Amount
            
            
            %
            
            
            Amount
            
            
            %
            
            
            Amount
            
            
            %Ordinary
      income
            
            $
            0.3635
            
            
            
            18.90
            %
            
            $
            0.4191
            
            
            
            21.79
            %
            
            $
            0.5221
            
            
            
            27.15
            %Return
      of capital
            
            
            1.5582
            
            
            
            81.02
            
            
            
            1.5016
            
            
            
            78.08
            
            
            
            1.3774
            
            
            
            71.62Capital
      gains
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Unrecaptured
      Section 1250 gain
            
            
            0.0015
            
            
            
            0.08
            
            
            
            0.0025
            
            
            
            0.13
            
            
            
            0.0237
            
            
            
            1.23$
            1.9232
            
            
            
            100.00
            %
            
            $
            1.9232
            
            
            
            100.00
            %
            
            $
            1.9232
            
            
            
            100.00
            %





The following table characterizes
distributions paid per Series F Preferred Share for the years ended December 31,
2007, 2006 and 2005:




2007
            
            
            2006
            
            
            2005Amount
            
            
            %
            
            
            Amount
            
            
            %
            
            
            Amount
            
            
            %Ordinary
      income
            
            $
            2.1787
            
            
            
            99.59
            %
            
            $
            2.1746
            
            
            
            99.40
            %
            
            $
            2.0926
            
            
            
            95.66
            %Return
      of capital
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Capital
      gains
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Unrecaptured
      Section 1250 gain
            
            
            0.0089
            
            
            
            0.41
            
            
            
            0.0130
            
            
            
            0.60
            
            
            
            0.0950
            
            
            
            4.34$
            2.1876
            
            
            
            100.00
            %
            
            $
            2.1876
            
            
            
            100.00
            %
            
            $
            2.1876
            
            
            
            100.00
            %





The
following table characterizes distributions paid per Series G Preferred Share
for the years ended December 31, 2007, 2006 and 2005:




2007
            
            
            2006
            
            
            2005Amount
            
            
            %
            
            
            Amount
            
            
            %
            
            
            Amount
            
            
            %Ordinary
      income
            
            $
            2.0230
            
            
            
            99.60
            %
            
            $
            2.0191
            
            
            
            99.40
            %
            
            $
            1.9430
            
            
            
            95.66
            %Return
      of capital
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Capital
      gains
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Unrecaptured
      Section 1250 gain
            
            
            0.0082
            
            
            
            0.40
            
            
            
            0.0121
            
            
            
            0.60
            
            
            
            0.0882
            
            
            
            4.34$
            2.0312
            
            
            
            100.00
            %
            
            $
            2.0312
            
            
            
            100.00
            %
            
            $
            2.0312
            
            
            
            100.00
            %








68




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





Deferred
income taxes represent the tax effect of the differences between the book and
tax bases of assets and liabilities of GDC.  Deferred tax assets
(liabilities) include the following :





Deferred
tax assets (liabilities):




2007
            
            
            2006
            
            
            2005Investment
      in partnership
            
            $
            99
            
            
            $
            16
            
            
            $
            (5
            )Capitalized
      development costs
            
            
            (1,009
            )
            
            
            (719
            )
            
            
            (412
            )Depreciation
      and amortization
            
            
            (19
            )
            
            
            24
            
            
            
            41Charitable
      contributions
            
            
            22
            
            
            
            22
            
            
            
            22Accrued
      bonuses
            
            
            -
            
            
            
            295
            
            
            
            -Interest
      expense
            
            
            2,096
            
            
            
            1,424
            
            
            
            756Other
            
            
            7
            
            
            
            8
            
            
            
            8Net
      operating losses
            
            
            2,282
            
            
            
            2,045
            
            
            
            2,322Net
      deferred tax asset
            
            
            3,478
            
            
            
            3,115
            
            
            
            2,732Valuation
      allowance
            
            
            (3,478
            )
            
            
            (3,115
            )
            
            
            (2,732
            )Net
      deferred tax asset after valuation allowance
            
            $
            -
            
            
            $
            -
            
            
            $
            -





The gross tax loss carryforwards total
$6,326 at December 31, 2007 with $2,659, $355, $144, $479, $623, $561, $912 and
$593 and expiring in 2018, 2020, 2021, 2022, 2023, 2024, 2025 and 2026,
respectively.





The
income tax provision consisted of $6, $5 and $2 in 2007, 2006 and 2005,
respectively, related to current state and local taxes.  Net deferred
tax expense for each of the years was $0.  The income tax expense
reflected in consolidated statements of operations differs from the amount
determined by applying the federal statutory rate of 34% to the income before
taxes of the Company’s taxable REIT subsidiaries, as a result of state income
taxes and the utilization of tax loss carryforwards of $29, $0 and $0 in 2007,
2006, and 2005, respectively.  A full valuation allowance had
previously been provided against the tax loss carryforwards
utilized.





In 2007,
the Company continued to maintain a valuation allowance for the Company’s net
deferred tax assets, which consisted primarily of tax loss
carryforwards.  The valuation allowance was determined in accordance
with the provisions of SFAS No. 109 “Accounting for Income Taxes,” which
requires the recording of a valuation allowance when it is more likely than not
that any or all of the deferred tax assets will not be realized.  In
the absence of favorable factors, application of SFAS No. 109 requires a 100%
valuation allowance for any net deferred tax assets when a company has
cumulative financial accounting losses, excluding unusual items, over several
years.  The Company’s cumulative loss represented negative evidence
sufficient to require a full valuation allowance under the provisions of SFAS
No. 109.  The Company intends to maintain a full valuation allowance
for its net deferred tax asset until sufficient positive evidence exists to
support reversal of the reserve. Until such time, except for minor state and
local tax provisions, the Company will have no reported tax provision, net of
valuation allowance adjustments.





FASB
issued Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income
Taxes; an interpretation of FASB Statement No. 109,” went into effect in fiscal
year 2007.    FIN 48 clarifies the accounting for
uncertainty in income taxes recognized in an enterprise’s financial statements
in accordance with SFAS No. 109, “Accounting for Income Taxes.”  It
requires a recognition threshold and measurement attribute for financial
statement disclosure of tax positions taken, or expected to be taken, in an
income tax return.  This interpretation also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition.  In the Company’ adoption of FIN
48, a listing was compiled of the Company’s tax positions.  Positions
such as the Company’s transfer pricing model, REIT income test assumptions,
apportionment and allocation of income and evaluation of prohibited transactions
by REITS were evaluated.  The Company concluded that tax positions
taken will more likely than not be sustained at the full amount upon
examination.  As the Company did not conclude that any uncertain tax
positions existed, there was no tax benefit or penalty recognized in the
financial statements.





69





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





8.
            Preferred
      Shares





GRT’s
Declaration of Trust authorizes GRT to issue up to an aggregate 100,000,000
shares of GRT, consisting of common shares and/or one or more series of
preferred shares of beneficial interest.





On March
9, 1999, the Board of Trustees adopted a Preferred Share Purchase Plan (the
“Plan”) pursuant to which a distribution will be made of one preferred share
purchase right (a “Right”) for each outstanding Common Share.  The
distribution was made on March 22, 1999, to the shareholders of record at the
close of business on that date.  These rights trade with our Common
Shares. Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a Series E Junior Participating Preferred Share of the
Company, par value $0.01 per share (the “Preferred Shares”), at a price of
$55.00 per one one-hundredth of a Preferred Share (the “Purchase Price”),
subject to adjustment.  The Rights will become exercisable in the
event that any person or group acquires or announces its intention to acquire
beneficial ownership of 15.0% or more of the outstanding common shares of the
Company (an “Acquiring Person”).  Alternatively, each Right holder,
except the Acquiring Person, will have the right to receive upon exercise that
number of common shares having a market value of two times the Purchase Price of
the Right.  At any time before any person or group becomes an
Acquiring Person, the Board of Trustees may redeem the Rights at a price of
$0.01 per Right at which time the ability to exercise the Rights will
terminate.  At any time after a person or group becomes an Acquiring
Person, the Board of Trustees may exchange the Rights at an exchange ratio of
one common share or one Preferred Share per Right.  The Plan expires
on March 9, 2009.





On August
25, 2003, the Company completed a $60,000 public offering of 2,400,000 shares of
Series F Preferred Shares, par value $0.01 per share, at a purchase price of
$25.00 per Series F Preferred Share.  Aggregate net proceeds of the
offering were $58,110.  Distributions on the Series F Preferred Shares
are payable quarterly in arrears.  The Company generally may redeem
the Series F Preferred Shares anytime on or after August 25, 2008, at a
redemption price of $25.00 per share, plus accrued and unpaid
distributions.





On
February 23, 2004, the Company completed a $150,000 public offering of 6,000,000
shares of Series G Preferred Shares.  Aggregate net proceeds of the
offering were $145,300.  Distributions on the Series G Preferred
Shares are payable quarterly in arrears beginning on April 15,
2004.  The Company generally may redeem the Series G Preferred Shares
anytime on or after February 23, 2009, at a redemption price of $25.00 per
share, plus accrued and unpaid distributions.





9.
            Derivative
      Financial Instruments





The Company accounts for its
derivatives and hedging activities under SFAS No. 133 “Accounting for Derivative
Instruments and Hedging Activities,” as amended by SFAS Nos. 138, “Accounting
for Certain Derivative Instruments and Certain Hedging Activities,” and 149
“Amendment of Statement 133, on Derivative Instruments and Hedging
Activities.”  During the year ended December 31, 2007, the Company
recognized additional other comprehensive loss of $376 to adjust the carrying
amount of the interest rate swaps and caps to fair values at December 31, 2007,
net of $(271) in reclassifications to earnings for interest rate swap
settlements and interest rate cap amortization during the period and $(30) in
minority interest participation. During the year ended December 31, 2006, the
Company recognized additional other comprehensive loss of $2 to adjust the
carrying amount of the interest rate swaps and caps to fair values at December
31, 2006 net of $(163) in reclassifications to earnings for interest rate swap
settlements and interest rate cap amortization during the period and $(0) in
minority interest participation. During the year ended December 31, 2005, the
Company recognized additional other comprehensive income of $9 to adjust the
carrying amount of the interest rate swaps and caps to fair values at December
31, 2005, net of $11 in reclassifications to earnings for interest rate swap
settlements and interest rate cap amortization during the period and $1 in
minority interest participation.  The interest rate swap settlements
were offset by a corresponding reduction in interest expense related to the
interest payments being hedged.





70




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





The
Company may be exposed to risk associated with variability of interest rates
that might impact the cash flows and the results of operations of the
Company.  The hedging strategy, therefore, is to eliminate or reduce,
to the extent possible, the volatility of cash flows.  The following
table summarizes the notional values and fair values of the Company’s derivative
financial instruments as of December 31, 2007. The notional values provide an
indication of the extent of the Company’s involvement in these instruments at
that time, but does not represent exposure to credit, interest rate or market
risks.




InterestHedge Type
              
              Notional Value
              
              Rate
              
              Maturity
              
              Fair ValueSwap
      – Cash Flow
              
              $  30,000
              
              4.7025%
              
              January
      15, 2008
              
              
              $     9Swap
      – Cash Flow
              
              $  35,000
              
              5.2285%
              
              August
      15, 2008
              
              
              $(223
              )Swap
      – Cash Flow
              
              $  35,000
              
              5.2285%
              
              August
      15, 2008
              
              
              $(223
              )




The
derivative instruments were reported at their fair value of $(437) and $(16) in
accounts payable and accrued expenses at December 31, 2007 and December 31,
2006, respectively, with a corresponding adjustment to other comprehensive
income for the unrealized gains and losses (net of minority interest
participation).  Over time, the unrealized gains and losses held in
accumulated other comprehensive income will be reclassified to earnings, of
which $0 was reclassified in 2007.  This reclassification will
correlate with the recognition of the hedged interest payments in
earnings.  There was no hedge ineffectiveness during the twelve months
ended December 31, 2007.




To
determine the fair values of derivative instruments, the Company uses a variety
of methods and assumptions that are based on market conditions and risks
existing at each balance sheet date.  Standard market conventions and
techniques such as undiscounted cash flow analysis, replacement cost, and
termination cost are used to determine fair value.





10.
              Rentals
      Under Operating Leases





The
Company receives rental income from the leasing of retail shopping center space
under operating leases with expiration dates through the year
2027.  The minimum future base rentals under non-cancelable operating
leases as of December 31, 2007 are as follows:





2008
            
            $
            186,0932009
            
            
            162,2252010
            
            
            135,4752011
            
            
            108,3962012
            
            
            83,008Thereafter
            
            
            293,776$
            968,973





Minimum
future base rentals do not include amounts which may be received from certain
tenants based upon a percentage of their gross sales or as reimbursement of real
estate taxes and property operating expenses. Minimum rents contain
straight-line adjustments for rental revenue increases which aggregated
$(1,405), $(733) and $1,445 for the years ended December 31, 2007, 2006 and
2005, respectively. In 2007, 2006 and 2005, no tenant collectively accounted for
more than 10.0% of rental income. The tenant base includes national, regional
and local retailers, and consequently the credit risk is concentrated in the
retail industry.





71




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





11.
            Investment
      in Joint Ventures - Unconsolidated




Investment
in joint ventures, unconsolidated, as of December 31, 2007 consists of our
investment in three separate venture arrangements.  The Company
evaluated each of its three venture arrangements individually and determined
that control was shared between the Company and its venture partner. Therefore,
the ventures do not qualify as VIE’s.  The Company concluded that its
venture arrangements would be accounted for under the equity method of
accounting.  The descriptions of the three ventures are specified
below.




o
            ORC
    Venture





Consists
of a 52% interest held by GPLP in a joint venture with an affiliate of Oxford
Properties Group (“Oxford”), which is the global real estate platform for the
Ontario (Canada) Municipal Employees Retirement System, a Canadian pension plan.
The ORC Venture acquired the Company’s two joint venture Mall Properties, Puente
Hills Mall (“Puente”) and Tulsa Promenade (“Tulsa”). The ORC Venture acquired
Puente from an independent third party in December 2005 and acquired Tulsa from
GPLP in March 2006.





o
            Scottsdale
      Venture





Consists
of a 50% common interest held by a GPLP subsidiary in a joint venture (the
“Scottsdale Venture”) formed in May 2006 with an affiliate of The Wolff Company
(“Wolff”). The purpose of the venture is to build an approximately 650,000
square foot premium retail and office complex to be developed in Scottsdale,
Arizona (the “Scottsdale Development”). In 2006, the Company and Wolff each
contributed $10.3 million.  In 2007, the Company invested an
additional $4.5 million in the Scottsdale Venture with a $0.5 corresponding
investment from Wolff. The Company will receive a preferred return of 12% on
their $4.0 million investment to which there was no corresponding investment by
Wolff. As of December 31, 2007, the Company has invested approximately $14.8
million in the Scottsdale Venture.





o
            Surprise
      Venture





Consists
of a 50% interest held by a GPLP subsidiary in a joint venture (the “Surprise
Venture”) formed on September 6, 2006 with the former landowner of the property
that is to be developed. The Surprise Venture will develop approximately 24,755
square feet of retail space on a five-acre site located in an area northwest of
Phoenix, Arizona.





The
Company may provide management, development, construction, leasing and legal
services for a fee to each of the ventures described above.  Each
individual agreement specifies which services the Company is to provide. The
Company recognized fee income of $2,277, $1,866 and $632 for these services for
the years ended December 31, 2007, 2006 and 2005, respectively.





The net
income or loss for each entity is allocated in accordance with the provisions of
the applicable operating agreements. The summary financial information for the
Company’s investment in unconsolidated entities, accounted for using the equity
method, is presented below:








72




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





Balance
      Sheet
            
            December 31, 2007
            
            
            December 31, 2006Assets:Investment
      properties at cost, net
            
            $
            240,016
            
            
            $
            230,242Construction
      in progress
            
            
            22,055
            
            
            
            6,466Intangible
      assets (1)
            
            
            10,156
            
            
            
            12,855Other
      assets
            
            
            28,775
            
            
            
            28,595Total
      assets
            
            $
            301,002
            
            
            $
            278,158Liabilities
      and members’ equity:Mortgage
      notes payable
            
            $
            123,203
            
            
            $
            122,099Intangibles
      (2)
            
            
            10,520
            
            
            
            13,634Other
      liabilities
            
            
            11,847
            
            
            
            4,827145,570
            
            
            
            140,560Members’
      equity
            
            
            155,432
            
            
            
            137,598Total
      liabilities and members’ equity
            
            $
            301,002
            
            
            $
            278,158Operating
      Partnership’s share of members’ equity
            
            $
            82,199
            
            
            $
            70,793




(1)
            Includes
      value of acquired in-place leases.(2)
            Includes
      the net value of $390 and $566 for above-market acquired leases as of
      December 31, 2007 and December 31, 2006, respectively, and $10,910 and
      $14,200 for below-market acquired leases as of December 31, 2007 and
      December 31, 2006, respectively.Members’
      Equity to Company Investment in Unconsolidated
  Entities:




December 31, 2007
            
            
            December 31, 2006Members’
      equity
            
            $
            82,199
            
            
            $
            70,793Advances
      and additional costs
            
            
            917
            
            
            
            (377
            )Investment
      in and advances to unconsolidated entities
            
            $
            83,116
            
            
            $
            70,416





For the Years EndedStatements
      of Income
            
            December 31, 2007
            
            
            December 31, 2006Total
      revenues
            
            $
            35,030
            
            
            $
            33,957Operating
      expenses
            
            
            16,241
            
            
            
            15,552Depreciation
      and amortization
            
            
            9,940
            
            
            
            8,901Operating
      income
            
            
            8,849
            
            
            
            9,504Other
      expenses, net
            
            
            54
            
            
            
            40Interest
      expense, net
            
            
            6,586
            
            
            
            6,665Net
      income
            
            
            2,209
            
            
            
            2,799Preferred
      dividend
            
            
            31
            
            
            
            23Net
      income available from the Company’s joint ventures
            
            $
            2,178
            
            
            $
            2,776GPLP’s
      share of income from joint ventures
            
            $
            1,133
            
            
            $
            1,443





The
Company received $51 in net income for the year ended December 31, 2005
representing its share of income for Puente for the period of December 29, 2005
through December 31, 2005.





73





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





12.
            Investment
      in Joint Ventures - Consolidated





On
October 5, 2007 an affiliate of the Company entered into an agreement with Vero
Venture, LLC to form Vero Beach Fountain, LLC (the “VBF Venture”). The purpose
of the VBF Venture is to build an approximately 440,000 square foot premium
lifestyle center in Vero Beach, Florida. The Company has contributed $5.0
million in cash for a 50% interest in the VBF Venture. The economics of the VBF
Venture require the Company to receive a preferred return and the right to
receive 75% of the distributions until such time that the capital contributed by
the Company is returned. The Company receives substantially all of the economics
and provides the majority of the financial support related to the VBF Venture.
In accordance with FASB Interpretation No. 46R, the Company is the primary
beneficiary of the VBF Venture and therefore the venture is consolidated in the
Company’s consolidated financial statements.





13.
            Related
      Party Transactions





Employment
& Consulting Agreement of Herbert Glimcher





On
January 20, 2005, Herbert Glimcher resigned as Chief Executive Officer of the
Company and entered into an Employment and Consulting Agreement (the “Employment
Agreement”) with GRT and GPLP.  He remained Chairman of the Board of
Trustees (“Board”) of GRT until September 2007 at which time he became Chairman
Emeritus.  Under the Employment Agreement, GRT employed Herbert
Glimcher as Senior Advisor and as non-executive Chairman of the
Board.  Mr. Glimcher’s term of employment under the Employment
Agreement began on February 1, 2005 and concluded on May 31, 2007 (the
“Term”).  Neither GRT nor GPC considered Herbert Glimcher to be an
executive officer.




On July
25, 2007, Herbert Glimcher, GRT, and GPLP entered into an amendment of the
Employment Agreement to principally: (a) permit the extension of the expiration
date for certain stock options held by Herbert Glimcher at the time of the
amendment from August 31, 2007 to May 31, 2010 and (b) permit GRT to reduce any
post-employment payments that Herbert Glimcher is entitled to receive from GRT
under the Employment Agreement by the amount of compensation expense incurred by
GRT in connection with the aforementioned extension.  The Company
recorded $121 in stock compensation expense and reduced Herbert Glimcher’s
post-employment compensation expense by the same amount.





Herbert
Glimcher received $46 for serving as the non-executive Chairman of the Board for
GRT and GPC and $114 for serving as Senior Advisor to GRT (the “Salary”) for the
period of January 1, 2007 through May 31, 2007.  Additionally, he will
receive a total of $1,879 in cash during a period of two years following the
termination of his employment under the Employment Agreement (the
“Post-Employment Restricted Period”) from GRT. GRT recognized $2,000 in
compensation expense during the first quarter of 2005 related to the Employment
Agreement.  The Salary costs are reflected in the general and
administrative expenses for the Company for the related period.





GRT
reimbursed Herbert Glimcher for reasonable rent for office space located in
Columbus, Ohio, the reasonable salary of one administrative assistant and
provided a part-time driver.  The Company also maintains a life
insurance policy covering the life of Herbert Glimcher.  For the years
ended December 31, 2007 and 2006, the aggregate total of reimbursements paid by
GRT under the Employment Agreement was $75 and $119, respectively.





Corporate
Flight, Inc.




The
Company paid Corporate Flight, Inc. (“CFI”), which is wholly owned by Herbert
Glimcher, the following amounts for the use in connection with Company related
matters, of an airplane owned by CFI.


For the Years Ended:
            
            Corporate
              Flight, Inc.December
      31, 2007
            
            $
            299December
      31, 2006
            
            
            360December
      31, 2005
            
            
            304Total
            
            $
            963






74




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





Archer-Meek-Weiler
Insurance Agency





The
Company has engaged Archer-Meek-Weiler, a company of which Alan R. Weiler, a
Class II Trustee, was Chairman until October 2007, as its agent for the purpose
of obtaining property, liability, directors and officers, and employment
practices insurance coverage.  In connection with securing such
insurance coverage, Archer-Meek-Weiler received net commissions and fees of
$487, $343 and $284 for the years ended December 31, 2007, 2006 and 2005,
respectively.  The stock of Archer-Meek-Weiler was owned by a trust
for the benefit of Alan R. Weiler’s children and the children of his brother,
Robert J. Weiler until October 2007 when it was purchased by Sky Insurance,
Inc.





Leasing
Activity





Mayer
Glimcher, a brother of Herbert Glimcher, owns a company that currently leases
four store locations in the Company’s Properties. Two leases were terminated
during 2006.  Minimum Rents were $206, $227 and $266 for the years
ended December 31, 2007, 2006 and 2005, respectively.





Consulting
Agreement With Trustee





On
February 22, 2007, Philip G. Barach, a former Class I Trustee, entered into a
consulting agreement with GRT to provide consulting services to GRT. Mr. Barach
was a Class I Trustee for GRT from 1994 until May 11, 2007.  The term
of the consulting agreement began on May 11, 2007 and lasts for a period of one
year during which time Mr. Barach will receive a consulting fee of
$120.  The fee is payable as follows:  $60 upon commencement
of the agreement and a rate of $5 per month during the twelve month period of
the consulting agreement.  Additionally, under the consulting
agreement, reasonable travel expenses incurred in rendering the consulting
services are reimbursed.  Mr. Barach received $14 upon executing the
agreement for travel expenses incurred as of the execution
date.  During the year ended December 31, 2007, the Company paid $95
in consulting fees and $14 in travel and other reimbursement.





14.
            Commitments
      and Contingencies





The
Operating Partnership leases office space under an operating lease that had an
initial term of four years commencing on July 2003 and will expire concurrently
with the commencement of the term of a new office lease that has an initial term
of approximately 10 years.  Future minimum rental payments as of
December 31, 2007 are as follows:





Office Lease2008
            
            $
            3082009
            
            
            4812010
            
            
            4812011
            
            
            481Thereafter
            
            
            3,354$
            5,105





Office rental expenses (including
miscellaneous month-to-month lease rentals) for the years ended December 31,
2007, 2006 and 2005 were $391, $418 and $446, respectively.





At
December 31, 2007, there were 3.0 million OP Units outstanding.  These
OP Units are redeemable, at the option of the holders, beginning on the first
anniversary of their issuance.  The redemption price for an OP Unit
shall be, at the option of GPLP, payable in the following form and amount: (a)
cash at a price equal to the fair market value of one Common Share of GRT or (b)
one Common Share for each OP Unit.  The fair value of the OP Units
outstanding at December 31, 2007 is $43,830 based upon a per unit value of
$14.67 at December 31, 2007 (based upon a five-day average of the Common Stock
price from December 21, 2007 to December 28, 2007).





75




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - continued


(dollars
in thousands, except share and unit amounts)





In July
1998, the New Jersey Economic Development Authority issued approximately
$140,500 of Economic Development Bonds.  On May 29, 2002, the New
Jersey Economic Development Authority refunded certain of the Economic
Development Bonds issued in 1998 and issued approximately $108,940 of
replacement Economic Development Bonds. The Company began making quarterly
Payment In Lieu of Taxes (“PILOT”) payments commencing May  2001 and
terminating  on  the  date  of  the  final
payment of the bonds.   Such PILOT payments are treated as real
estate tax expense in the statements of operations.  The amount of the
annual PILOT payments beginning with the bond year ended April 1, 2001 was
$8,925 and increases 10.0% every five years until the final payment is
made.  The Company has provided a limited guarantee of franchise tax
payments to be received by the city until franchise tax payments achieve $5,600
annually; any such payments made by the Company are subject to refund from
future franchise tax payments.  Through December 31, 2007, the Company
has made $14,035 in payments under this agreement.





The
Company has reserved $587 in relation to a contingency associated with the sale
of Loyal Plaza, a community center sold in 2002, relating to environmental
assessment and monitoring matters.





The
Company is involved in lawsuits, claims and proceedings, which arise in the
ordinary course of business.  The Company is not presently involved in
any material litigation.  In accordance with SFAS No. 5, “Accounting
for Contingencies,” the Company makes a provision for a liability when it is
both probable that a liability has been incurred and the amount of the loss can
be reasonably estimated.  Although the outcome of any litigation is
uncertain, the Company does not expect any such legal actions to have a material
adverse effect on the Company’s consolidated financial condition or results of
operations taken as a whole.





15.
              Stock
      Based Compensation





Restricted Common
Stock





Shares of
restricted Common Stock are granted pursuant to GRT’s 2004 Amended and Restated
Incentive Compensation Plan (the “2004 Plan”). Shares issued for the years ended
December 31, 2007 and 2006 vest in one-third installments over a period of five
(5) years beginning on the third anniversary of the grant date. Shares issued
for the year ended December 31, 2005 vest in one-third installments over a
period of three (3) years commencing on the one-year anniversary of the grant
date for the recipient’s award. The restricted Common Stock value is determined
by the Company’s closing market share price on the grant date. As restricted
Common Stock represents an incentive for future periods, the Company recognizes
the related compensation expense ratably over the applicable vesting
periods.





For the
years ended December 31, 2007, 2006 and 2005, 43,500, 58,322 and 56,666 shares
of restricted Common Stock were granted, respectively. The related compensation
expense recorded for the years ended December 31, 2007, 2006 and 2005 was $845,
$560 and $314, respectively.





The
amount of compensation expense related to unvested restricted shares that we
expect to recognize in future periods is $2,021.





Activity
      for the Years Ended December 31,2007
            
            
            2006Restricted
            
            
            Weighted
      Average
            
            
            Restricted
            
            
            Weighted
      AverageShares
            
            
            Grant Date Fair Value
            
            
            Shares
            
            
            Grant Date Fair ValueOutstanding
      at beginning of year
            
            
            84,445
            
            
            $
            25.454
            
            
            
            56,666
            
            
            $
            24.407Shares
      granted
            
            
            43,500
            
            
            $
            26.933
            
            
            
            58,332
            
            
            $
            26.100Shares
      vested
            
            
            (15,557
            )
            
            $
            27.248
            
            
            
            (17,219
            )
            
            $
            24.375Shares
      forfeited
            
            
            -
            
            
            $
            -
            
            
            
            (13,334
            )
            
            $
            25.227Shares
      outstanding
            
            
            112,388
            
            
            $
            25.826
            
            
            
            84,445
            
            
            $
            25.454





76


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – continued


(dollars
in thousands, except share and unit amounts)





Long Term Incentive
Awards





During
the first quarter of 2007, the Company adopted a new Long Term Incentive Plan
for Senior Executives (the “Incentive Plan”). At the time of the adoption of the
Incentive Plan, performance shares were allocated to certain senior executive
officers. The total number of performance shares allocated to all participants
was 104,300. The issuance of the performance shares is subject to the Company
achieving the performance measures described below.





Whether
or not a participant receives performance shares under the Incentive Plan is
determined by: (i) the outcome of the Company’s total shareholder return (“TSR”)
for its Common Shares during the period of January 1, 2007 to December 31, 2009
(the “Performance Period”) as compared to the TSR for the common shares of a
selected group of sixteen retail oriented real estate investment companies (the
“Peer Group”) and (ii) the timely payment of quarterly dividends by the Company
during the Performance Period on its Common Shares at dividend rates no lower
than those paid during fiscal year 2006 (the “Dividend Criterion”). TSR is
calculated as a percentage equal to the price appreciation of the Common Shares
during the Performance Period plus dividends paid (on a cumulative reinvested
basis).





Under the
Incentive Plan, if the Company satisfies the Dividend Criterion, then a
participant may be eligible to receive between 0% - 200% of their respective
allocated performance shares following the conclusion of the Performance Period
based upon the Company’s TSR during the Performance Period as compared to the
TSR of the Peer Group. Any performance shares issued under the Incentive Plan
will be granted from the shares reserved for issuance under the 2004 Plan,
pursuant to its terms and conditions.





The
compensation costs recorded relating to the Incentive Plan have been calculated
in accordance with SFAS No. 123(R). The fair value of the unearned performance
share portion award was determined utilizing the Monte Carlo simulation
technique and will be amortized to compensation expense over the Performance
Period.





The fair
value of the performance shares allocated under the Incentive Plan was
determined to be $18.79 per share for a total compensation amount of $1,960 that
is expected to be recognized over the Performance Period. The amount of
compensation expense related to the Incentive Plan for the year ended December
31, 2007 is $555.





16.
            Share
      Option Plans





GRT has
established the 1997 Incentive Plan (the “Incentive Plan”) and the 2004
Incentive Compensation Plan (“2004 Plan”) for the purpose of attracting and
retaining the Company’s trustees, executive and other employees (the Incentive
Plan and the 2004 Plan are collectively referred to as the “Plans”). There are
638,199 options outstanding under the Incentive Plan of which all are
exercisable; and 772,898 options outstanding under the 2004 Plan of which
383,276 are exercisable.





Options
granted under the Company’s share option plans generally vest over a three-year
period, with options exercisable at a rate of 33.3% per annum beginning with the
first anniversary of the grant date. The options generally expire on the tenth
anniversary of the grant date.  The fair value of each option grant is
estimated on the date of the grant using the Black-Scholes options pricing model
and is amortized over the requisite vesting period. Compensation expense
recorded related to the Company’s share option plans was $477, $348 and $350 for
the year ended December 31, 2007, 2006 and 2005, respectively. The amount of
compensation expense related to share options that we expect to recognize in
future periods is $409.








77




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – continued


(dollars
in thousands, except share and unit amounts)





A summary
of the status of the Company’s Plans at December 31, 2007, 2006 and 2005 and
changes during the years ending on those dates are presented below:




2007
              Weighted-
              Average
              Exercise
            
            
            
            
            
            2006
              Weighted-
              Average
              Exercise
            
            
            
            
            
            2005
              Weighted-
              Average
              ExerciseOptions
            
            
            Price
            
            
            Options
            
            
            Price
            
            
            Options
            
            
            PriceOption
      Plans:Outstanding
      at beginning of year
            
            
            2,132,132
            
            
            $
            21.522
            
            
            
            1,953,098
            
            
            $
            20.886
            
            
            
            2,128,571
            
            
            $
            19.617Granted
            
            
            162,750
            
            
            $
            27.091
            
            
            
            337,250
            
            
            $
            25.233
            
            
            
            339,750
            
            
            $
            25.510Exercised
            
            
            (841,032
            )
            
            $
            18.204
            
            
            
            (87,298
            )
            
            $
            18.672
            
            
            
            (386,384
            )
            
            $
            16.914Forfeited
            
            
            (42,753
            )
            
            $
            25.753
            
            
            
            (70,918
            )
            
            $
            25.182
            
            
            
            (128,839
            )
            
            $
            24.030Outstanding
      at end of year
            
            
            1,411,097
            
            
            $
            24.013
            
            
            
            2,132,132
            
            
            $
            21.522
            
            
            
            1,953,098
            
            
            $
            20.886Exercisable
      at end of year
            
            
            1,021,475
            
            
            $
            23.285
            
            
            
            1,541,670
            
            
            $
            20.057
            
            
            
            1,286,554
            
            
            $
            19.020





The fair
value of each option grant was estimated on the date of the grant using the
Black-Scholes and ranged between $1.03 and $3.12. The options were priced with
the following assumptions: weighted average risk free interest rates used in
2007, 2006 and 2005 ranged between 4.2% and 5.0%, expected average lives of five
years, annual dividend rates of $1.9232 and weighted average volatility between
12.3% and 23.4%





The
following table summarizes information regarding the options outstanding at
December 31, 2007 under the Company’s Plans.




Options
      Outstanding
            
            
            Options
      ExercisableRange
      of
              Exercise
      Prices
            
            Number
      Outstanding at
              December
      31, 2007
            
            Weighted-Average
      Remaining
              Contractual
      Life
            
            Weighted-Average
              Exercise
      Price
            
            Number
      Exercisable at December 31, 2007
            
            Weighted-Average
              Exercise
      Price$20.500
            
            50,000
            
            
            0.4
            
            $20.500
            
            
            50,000
            
            
            $20.500$15.000
            
            2,000
            
            
            1.2
            
            $15.000
            
            
            2,000
            
            
            $15.000$12.280
      – $27.280
            
            164,101
            
            
            2.4
            
            $24.799
            
            
            158,101
            
            
            $24.741$14.750
            
            31,149
            
            
            3.2
            
            $14.750
            
            
            31,149
            
            
            $14.750$17.610
            
            63,670
            
            
            4.2
            
            $17.610
            
            
            63,670
            
            
            $17.610$18.930
      – $22.360
            
            160,091
            
            
            5.2
            
            $19.066
            
            
            160,091
            
            
            $19.066$19.560
      – $26.690
            
            270,751
            
            
            6.3
            
            $25.427
            
            
            270,751
            
            
            $25.427$24.740
      – $25.670
            
            238,668
            
            
            7.2
            
            $25.567
            
            
            163,828
            
            
            $25.570$25.220
      – $25.650
            
            281,917
            
            
            8.4
            
            $25.235
            
            
            103,885
            
            
            $25.234$21.450
      – $27.280
            
            148,750
            
            
            9.2
            
            $27.073
            
            
            18,000
            
            
            $27.2801,411,097
            
            
            6.2
            
            $24.013
            
            
            1,021,475
            
            
            $23.285





All
options granted under the Plans, except those number of options noted as
exceptions, are exercisable over a three-year period.  The three-year
period vests with options exercisable at a rate of 33.3% per annum beginning
with the first anniversary of the date of grant and will remain exercisable
through the tenth anniversary of such date.  Exceptions to this
vesting schedule are options that are exercisable immediately and will remain
exercisable through the tenth anniversary of date granted.  The number
of options that are exercisable immediately are 18,000 shares granted under the
2004 Plan in 2007, 2006 and 2005.





78




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – continued


(dollars
in thousands, except share and unit amounts)





The following table summarizes the
intrinsic value of options exercised and fair value of options vested for the
three years ended December 31, 2007, 2006 and 2005.





For
      the year endedDecember 31,
      2007
            
            
            For
      the year endedDecember 31,
      2006
            
            
            For
      the year endedDecember 31,
      2005Aggregate
      intrinsic value of options exercised
            
            
            $6,179
            
            
            
            
            $697
            
            
            
            
            $3,255Aggregate
      fair value of options vested
            
            
            $406
            
            
            
            
            $336
            
            
            
            
            $324





17.
              Employee
      Benefit Plan – 401(k) Plan





In January 1996, the Company
established a qualified retirement savings plan under Code 401(k) for eligible
employees, which contains a cash or deferred arrangement which permits
participants to defer up to a maximum of 25.0% of their compensation, subject to
certain limitations.  Employees 21 years old or above who have been
employed by the Company for at least six months are eligible to
participate.  Participants’ salary deferrals up to a maximum of 4.0%
of qualified compensation were matched at 50.0% for the year ended December 31,
2005.   For the year ended December 31, 2006 participant’s salary
deferrals of up to a maximum of 6% of qualified compensation were matched at
50.0%. For the year ended December 31, 2007 participants’ salary deferrals of
qualified compensation were matched as follows: the first 3 % of qualified
compensation were matched at 100% and qualified compensation of between 4% and
5% were matched at 50%. The Company contributed $744, $417 and $373 to the plan
in 2007, 2006 and 2005, respectively.





18.
            Distribution
      Reinvestment and Share Purchase
Plan





The Company has a Distribution
Reinvestment and Share Purchase Plan under which its shareholders may elect to
purchase additional common shares of beneficial interest and/or automatically
reinvest their distributions in Shares. In order to fulfill its obligations
under the plan, the Company may purchase Shares in the open market or issue
Shares that have been registered and authorized specifically for the plan. As of
December 31, 2007, 2,100,000 Shares were authorized of which 286,194 Shares have
been issued.











79




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – continued


(dollars
in thousands, except share and unit amounts)





19.
            Earnings
      Per Share





The presentation of primary EPS and
diluted EPS is summarized in the table below (shares in thousands):




For
      the Years Ended December 31,2007
              
              
              2006
              
              
              2005Per
              
              
              
              
              
              
              
              
              Per
              
              
              
              
              
              
              
              
              PerIncome
              
              
              Shares
              
              
              Share
              
              
              Income
              
              
              Shares
              
              
              Share
              
              
              Income
              
              
              Shares
              
              
              ShareBasic
      EPSIncome
      from continuing operations
              
              $
              14,649
              
              
              
              
              
              
              
              
              $
              33,615
              
              
              
              
              
              
              
              
              $
              33,010Less:
      Preferred stock dividends
              
              
              (17,437
              )
              
              
              
              
              
              
              
              
              (17,437
              )
              
              
              
              
              
              
              
              
              (17,437
              )Add:
      Minority interest adjustments (1)
              
              
              1,764
              
              
              
              
              
              
              
              
              
              (8,470
              )
              
              
              
              
              
              
              
              
              (1,110
              )(Loss)
      income from continuing operations
              
              $
              (1,024
              )
              
              
              37,232
              
              
              $
              (0.03
              )
              
              $
              7,708
              
              
              
              36,611
              
              
              $
              0.21
              
              
              $
              14,463
              
              
              
              36,036
              
              
              $
              0.40Discontinued
      operations
              
              $
              23,708
              
              
              
              
              
              
              
              
              
              
              $
              (110,780
              )
              
              
              
              
              
              
              
              
              
              $
              (12,160
              )Less:
      Minority interest adjustment (1)
              
              
              (1,764
              )
              
              
              
              
              
              
              
              
              
              
              8,470
              
              
              
              
              
              
              
              
              
              
              
              1,110Discontinued
      operations
              
              $
              21,944
              
              
              
              37,232
              
              
              $
              0.59
              
              
              $
              (102,310
              )
              
              
              36,611
              
              
              $
              (2.79
              )
              
              $
              (11,050
              )
              
              
              36,036
              
              
              $
              (0.31
              )Net
      income (loss) available to common shareholders
              
              $
              20,920
              
              
              
              37,232
              
              
              $
              0.56
              
              
              $
              (94,602
              )
              
              
              36,611
              
              
              $
              (2.58
              )
              
              $
              3,413
              
              
              
              36,036
              
              
              $
              0.09Diluted
      EPSIncome
      from continuing operations
              
              $
              14,649
              
              
              
              37,232
              
              
              
              
              
              
              $
              33,615
              
              
              
              36,611
              
              
              
              
              
              
              $
              33,010
              
              
              
              36,036Less:
      Preferred stock dividends
              
              
              (17,437
              )
              
              
              
              
              
              
              
              
              
              
              (17,437
              )
              
              
              
              
              
              
              
              
              
              
              (17,437
              )Add:
      Minority interest
              
              
              1,635
              
              
              
              
              
              
              
              
              
              
              
              (7,733
              )
              
              
              
              
              
              
              
              
              
              
              252Operating
      Partnership Units
              
              
              
              
              
              
              2,996
              
              
              
              
              
              
              
              
              
              
              
              3,035
              
              
              
              
              
              
              
              
              
              
              
              3,333Options
              
              
              
              
              
              
              -
              
              
              
              
              
              
              
              
              
              
              
              361
              
              
              
              
              
              
              
              
              
              
              
              449Restricted
      shares
              
              
              
              
              
              
              -
              
              
              
              
              
              
              
              
              
              
              
              82
              
              
              
              
              
              
              
              
              
              
              
              38(Loss)
      income from continuing operations
              
              $
              (1,153
              )
              
              
              40,228
              
              
              $
              (0.03
              )
              
              $
              8,445
              
              
              
              40,089
              
              
              $
              0.21
              
              
              $
              15,825
              
              
              
              39,856
              
              
              $
              0.40Discontinued
      operations
              
              $
              23,708
              
              
              
              40,228
              
              
              $
              0.59
              
              
              $
              (110,780
              )
              
              
              40,089
              
              
              $
              (2.76
              )
              
              $
              (12,160
              )
              
              
              39,856
              
              
              $
              (0.31
              )Income
      (loss) available to common shareholders before minority
      interest
              
              $
              22,555
              
              
              
              40,228
              
              
              $
              0.56
              
              
              $
              (102,335
              )
              
              
              40,089
              
              
              $
              (2.55
              )
              
              $
              3,665
              
              
              
              39,856
              
              
              $
              0.09




(1)
              The
      minority interest adjustment reflects the reclassification of the minority
      interest expense from continuing to discontinued operations for
      appropriate allocation in the calculation of the earnings per share for
      discontinued operations.





Options
with exercise prices greater than the average share prices for the periods
presented were excluded from the respective computations of diluted EPS because
to do so would have been antidilutive for 2006 and 2005.  The
number of such options was 329,000 and 599,000 for the years ended December
31, 2006 and 2005, respectively.All common stock
equivalents have been excluded in 2007.





20.
            Fair
      Value of Financial Instruments





The
carrying values of cash and cash equivalents, restricted cash, tenant accounts
receivable, accounts payable and accrued expenses are reasonable estimates of
their fair values because of the short maturity of these financial
instruments.  The carrying value of the Credit Facility is also a
reasonable estimate of its fair value because it bears
variable rate interest at current market rates.  Based on the
discounted amount of future cash flows using rates currently available to GRT
for similar liabilities (ranging from 5.58% to 7.85% per annum at December 31,
2007 and December 31, 2006, respectively), the fair value of GRT’s mortgage
notes payable is estimated at $1,246,972 and $1,282,023 at December 31, 2007 and
2006, respectively.  The fair value of the debt instruments considers
in part the credit of GRT as an entity, and not just the individual entities and
Properties owned by GRT.





21.
            Acquisitions





The
Company accounts for acquisitions under the purchase method of accounting in
accordance with SFAS No. 141, “Business Combinations.”  The Company
has finalized the allocation of the purchase price for properties acquired
through December 31, 2007 and no material adjustments have been made to the
original allocations.




80


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – continued


(dollars
in thousands, except share and unit amounts)





On
October 9, 2007 the Company purchased Merritt Square Mall (“Merritt”) in Merritt
Island, Florida for $84,000.  The company purchased Merritt subject to
an existing $57,000 mortgage loan with a fixed interest rate of 5.35% with the
remaining portion of the purchase price being paid in cash.  The loan
matures on September 1, 2015.





On
January 17, 2006, GPLP acquired Tulsa from an independent third
party.  The purchase price was $58,300 and the Company did not assume
any debt in connection with the purchase.  On March 14, 2006, GPLP
transferred all of its ownership interest in Tulsa to the ORC Venture for total
consideration of $58,300 (which included the ORC Venture’s assumption of a
$35,000 mortgage loan).





Intangibles,
which were recorded at the acquisition date, associated with acquisitions of
WestShore Plaza, Eastland Ohio, Polaris, Polaris Towne Center and Merritt Square
Mall, are comprised of an asset for acquired above-market leases of $9,638, a
liability for acquired below-market leases of $24,370, an asset for tenant
relationships of $4,156 and an asset for in place leases for $5,339. The
intangibles related to above and below-market leases are being amortized as a
net increase to minimum rents on a straight-line basis over the lives of the
leases with a remaining weighted average amortization period of 8.7 years.
Amortization of the tenant relationship is recorded as amortization expense on a
straight-line basis over the estimated life of 12.5 years. Amortization of the
in place lease value is being recorded as amortization expense over the life of
the leases to which they pertain with a remaining weighted amortization period
of 6.0 years. Net amortization for all of the acquired intangibles is an
increase to net income in the amount of $271, $656 and $415 for the years ended
December 31, 2007, 2006 and 2005, respectively. The net book value of the
above-market leases is $5,531 and $4,689 as of December 31, 2007 and 2006,
respectively and is included in the accounts payable and accrued liabilities on
the Consolidated Balance Sheet. The net book value of the below-market leases is
$15,407 and $12,091 as of December 31, 2007 and 2006, respectively, and is
included in the accounts payable and accrued liabilities on the Consolidated
Balance Sheet. The net book value of the tenant relationships is $2,840 and
$3,169 as of December 31, 2007 and 2006, respectively, and is included in
prepaid and other assets on the Consolidated Balance Sheet. The net book value
of in place leases at December 31, 2007 is $4,625 and is included in the
developments, improvements and equipment on the Consolidated Balance
Sheet.





Net
amortization of intangibles as a (decrease) increase to net income will be as
follows:





For
      the year ending December 31, 2008
            
            $
            (128
            )For
      the year ending December 31, 2009
            
            
            492For
      the year ending December 31, 2010
            
            
            646For
      the year ending December 31, 2011
            
            
            487For
      the year ending December 31, 2012
            
            
            313$
            1,810





22.
            Discontinued
      Operations





Financial
results of Properties the Company sold in previous periods and classified as
held-for-sale as of year-end 2007 are reflected in discontinued operations for
all periods reported in the consolidated statements of income.  The
table below summarizes key financial results for these operations:





For the
      Years Ended December 31,2007
            
            
            2006
            
            
            2005Revenues
            
            $
            35,564
            
            
            $
            61,621
            
            
            $
            64,748Operating
      expenses
            
            
            (24,352
            )
            
            
            (37,524
            )
            
            
            (45,134
            )Operating
      income
            
            
            11,212
            
            
            
            24,097
            
            
            
            19,614Interest
      expense, net
            
            
            (7,389
            )
            
            
            (15,319
            )
            
            
            (17,000
            )Costs
      associated with debt defeasance
            
            
            -
            
            
            
            (9,357
            )
            
            
            -Net
      income (loss) from operations
            
            
            3,823
            
            
            
            (579
            )
            
            
            2,614Gain
      on sale of assets
            
            
            47,349
            
            
            
            1,717
            
            
            
            1,619Impairment
      losses on real estate
            
            
            (27,464
            )
            
            
            (111,918
            )
            
            
            (16,393
            )Net
      income (loss) from discontinued operations
            
            $
            23,708
            
            
            $
            (110,780
            )
            
            $
            (12,160
            )




81


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – continued


(dollars
in thousands, except share and unit amounts)





The
impairment losses recorded in 2007 primarily relate to two of our held-for-sale
Mall assets. Great Mall had an impairment charge of $21,064 and Eastland Mall in
Charlotte, North Carolina (“Eastland”) had a $3,657 impairment. The additional
impairment charge involving Great Mall primarily related to the Company’s year
end 2007 decision to sell the property and was recorded based upon the
anticipated sales price for the property. The impairment charge for Eastland is
due to the probable change in the Company’s disposition plans for this
Mall.  The Company has been marketing this asset with an expected
sales price equating to the amount of the existing mortgage loan.  In
the fourth quarter of 2007 additional impairment charges were recorded to reduce
the carrying value of the asset to equate to the anticipated net consideration
to be received if the Company would forfeit its rights to the
Property.





The
impairment losses recorded in 2006 primarily relate to three of our
held-for-sale Mall assets.  Montgomery Mall had impairment charges of
$56,994, Great Mall had impairment charges of $46,688 and Eastland of
approximately $6,778.  The impairment losses recorded in 2005 relate
to the Company’s decision to sell all but four of its remaining Community Center
Properties.





23.
              Subsequent
      Events





On February 11, 2008, the Company used
borrowings from its Credit Facility to pay off the $8,624 mortgage associated
with  Knox Village Square.





24.
              Interim
      Financial Information
(unaudited)





First
            
            
            Second
            
            
            Third
            
            
            FourthYear
      Ended December 31, 2007
            
            Quarter
            
            
            Quarter
            
            
            Quarter
            
            
            QuarterTotal
      revenues
            
            $
            72,699
            
            
            $
            71,430
            
            
            $
            73,455
            
            
            $
            84,582Total
      revenues as previously reported
            
            $
            75,171
            
            
            $
            73,132
            
            
            $
            75,273
            
            
            $
            84,582Operating
      income
            
            $
            25,008
            
            
            $
            21,493
            
            
            $
            26,826
            
            
            $
            32,029Operating
      income as previously reported
            
            $
            24,994
            
            
            $
            21,151
            
            
            $
            26,368
            
            
            $
            32,029Net
      income (loss)
            
            $
            5,467
            
            
            $
            (918
            )
            
            $
            50,752
            
            
            $
            (16,944
            )Net
      income (loss) available to common shareholders
            
            $
            1,108
            
            
            $
            (5,277
            )
            
            $
            46,392
            
            
            $
            (21,303
            )Earnings
      (loss) per share (diluted)
            
            $
            0.03
            
            
            $
            (0.14
            )
            
            $
            1.23
            
            
            $
            (0.56
            )




First
            
            
            Second
            
            
            Third
            
            
            FourthYear
      Ended December 31, 2006
            
            Quarter
            
            
            Quarter
            
            
            Quarter
            
            
            QuarterTotal
      revenues
            
            $
            73,080
            
            
            $
            70,498
            
            
            $
            71,418
            
            
            $
            77,555Total
      revenues as previously reported
            
            $
            75,448
            
            
            $
            72,899
            
            
            $
            74,149
            
            
            $
            86,075Operating
      income
            
            $
            25,590
            
            
            $
            24,660
            
            
            $
            24,759
            
            
            $
            31,142Operating
      income as previously reported
            
            $
            25,501
            
            
            $
            24,867
            
            
            $
            25,225
            
            
            $
            (12,044
            )Net
      income (loss)
            
            $
            8,343
            
            
            $
            (38,686
            )
            
            $
            6,070
            
            
            $
            (52,892
            )Net
      income (loss) available to common shareholders
            
            $
            3,984
            
            
            $
            (43,045
            )
            
            $
            1,710
            
            
            $
            (57,251
            )Earnings
      (loss) per share (diluted)
            
            $
            0.11
            
            
            $
            (1.17
            )
            
            $
            0.05
            
            
            $
            (1.54
            )





Total
revenues and operating income for 2007 and 2006 are restated to reflect SFAS
144.  Net income available to shareholders reflects the net gains and
losses associated with the sale of discontinued operations.  It also
reflects the income and loss from discontinued operations.  The
differences between revenues and revenues previously reported in interim
financial statements in 2007 and 2006 relate to changes in property
classification from continuing to discontinued operations.






82
 
  GLIMCHER
      REALTY TRUSTSCHEDULE
      III - REAL ESTATE AND ACCUMULATED DEPRECIATIONas
      of December 31, 2007(dollars
      in thousands)
  Costs
      CapitalizedSubsequent
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                Life Uponto
                
                
                Gross
      Amounts at Which
                
                
                
                
                
                
                
                
                WhichInitial
      Cost
                
                
                Acquisition
                
                
                Carried
      at Close of Period
                
                
                
                
                
                
                
                
                Depreciationin
      LatestDate
                
                
                
                StatementBuildings
      and
                
                
                Improvements
                
                
                
                
                
                Buildings
      and
                
                
                
                
                
                
                
                Construction
                
                
                
                ofDescription
      and Location
                
                Encumbrances
                
                
                
                
                
                Improvements
                
                
                and
                
                
                
                
                
                Improvements
                
                
                Total
                
                
                Accumulated
                
                Was
                
                Date
                
                Operationsof
      Property
                
                [d]
                
                
                Land
                
                
                [a]
                
                
                Adjustments
                
                
                Land
      [b]
                
                
                [c]
                
                
                [b]
      [c]
                
                
                Depreciation
                
                Completed
                
                Acquired
                
                is
      ComputedMALL
      PROPERTIESAshland
      Town CenterAshland,
      KY
                
                $
                24,273
                
                
                $
                3,866
                
                
                $
                21,454
                
                
                $
                3,616
                
                
                $
                3,885
                
                
                $
                25,051
                
                
                $
                28,936
                
                
                $
                13,642
                
                1989
                
                
                
                
                [e
                ]Colonial
      Park MallHarrisburg,
      PA
                
                $
                -
                
                
                
                9,765
                
                
                
                43,770
                
                
                
                2,095
                
                
                
                9,704
                
                
                
                45,926
                
                
                
                55,630
                
                
                
                15,666
                
                
                
                2003
                
                
                [e
                ]The
      Dayton MallDayton,
      OH
                
                $
                54,983
                
                
                
                9,068
                
                
                
                90,676
                
                
                
                34,736
                
                
                
                8,710
                
                
                
                125,770
                
                
                
                134,480
                
                
                
                30,318
                
                
                
                2002
                
                
                [e
                ]Eastland
      MallColumbus,
      OH
                
                $
                43,000
                
                
                
                12,570
                
                
                
                17,794
                
                
                
                29,915
                
                
                
                12,555
                
                
                
                47,724
                
                
                
                60,279
                
                
                
                8,161
                
                
                
                2003
                
                
                [e
                ]Grand
      Central MallParkersburg,
      WV
                
                $
                47,001
                
                
                
                3,961
                
                
                
                41,135
                
                
                
                42,963
                
                
                
                4,015
                
                
                
                84,044
                
                
                
                88,059
                
                
                
                29,244
                
                
                
                1993
                
                
                [e
                ]Indian
      Mound MallNewark,
      OH
                
                $
                -
                
                
                
                892
                
                
                
                19,497
                
                
                
                12,937
                
                
                
                773
                
                
                
                32,553
                
                
                
                33,326
                
                
                
                18,572
                
                1986
                
                
                
                
                [e
                ]Jersey
      Gardens MallElizabeth,
      NJ
                
                $
                156,082
                
                
                
                32,498
                
                
                
                206,478
                
                
                
                23,113
                
                
                
                33,480
                
                
                
                228,609
                
                
                
                262,089
                
                
                
                71,065
                
                2000
                
                
                
                
                [e
                ]Lloyd
      Center MallPortland,
      OR
                
                $
                131,069
                
                
                
                47,737
                
                
                
                115,219
                
                
                
                31,910
                
                
                
                38,566
                
                
                
                156,300
                
                
                
                194,866
                
                
                
                40,084
                
                
                
                1998
                
                
                [e
                ]The
      Mall at Fairfield CommonsBeavercreek,
      OH
                
                $
                107,499
                
                
                
                5,438
                
                
                
                102,914
                
                
                
                20,874
                
                
                
                6,949
                
                
                
                122,277
                
                
                
                129,226
                
                
                
                46,777
                
                1993
                
                
                
                
                [e
                ]The
      Mall at Johnson CityJohnson
      City, TN
                
                $
                38,323
                
                
                
                4,462
                
                
                
                39,439
                
                
                
                15,987
                
                
                
                4,405
                
                
                
                55,483
                
                
                
                59,888
                
                
                
                13,813
                
                
                
                2000
                
                
                [e
                ]Merritt
      Square MallMerritt
      Island, FL
                
                $
                57,000
                
                
                
                14,460
                
                
                
                70,810
                
                
                
                -
                
                
                
                14,460
                
                
                
                70,810
                
                
                
                85,270
                
                
                
                1,483
                
                
                
                2007
                
                
                [e
                ]Morgantown
      MallMorgantown,
      WV
                
                (f)
                
                
                
                1,273
                
                
                
                40,484
                
                
                
                6,079
                
                
                
                1,556
                
                
                
                46,280
                
                
                
                47,836
                
                
                
                20,616
                
                1990
                
                
                
                
                [e
                ]New
      Towne MallNew
      Philadelphia, OH
                
                $
                -
                
                
                
                1,190
                
                
                
                23,475
                
                
                
                9,422
                
                
                
                1,153
                
                
                
                32,934
                
                
                
                34,087
                
                
                
                15,803
                
                1988
                
                
                
                
                [e
                ]Northtown
      MallBlaine,
      MN
                
                $
                -
                
                
                
                13,264
                
                
                
                40,988
                
                
                
                12,757
                
                
                
                14,944
                
                
                
                52,065
                
                
                
                67,009
                
                
                
                16,711
                
                
                
                1998
                
                
                [e
                ]Polaris
      Fashion PlaceColumbus,
      OH
                
                $
                139,692
                
                
                
                36,687
                
                
                
                167,251
                
                
                
                5,606
                
                
                
                38,780
                
                
                
                170,764
                
                
                
                209,544
                
                
                
                35,116
                
                
                
                2004
                
                
                [e
                ]River
      Valley MallLancaster,
      OH
                
                $
                50,000
                
                
                
                875
                
                
                
                26,910
                
                
                
                18,794
                
                
                
                1,001
                
                
                
                45,578
                
                
                
                46,579
                
                
                
                23,730
                
                1987
                
                
                
                
                [e
                ]Supermall
      of Great NWAuburn,
      WA
                
                $
                58,624
                
                
                
                1,058
                
                
                
                104,612
                
                
                
                2,075
                
                
                
                7,187
                
                
                
                100,558
                
                
                
                107,745
                
                
                
                37,574
                
                
                
                2002
                
                
                [e
                ]Weberstown
      MallStockton,
      CA
                
                $
                60,000
                
                
                
                3,237
                
                
                
                23,479
                
                
                
                8,612
                
                
                
                3,298
                
                
                
                32,030
                
                
                
                35,328
                
                
                
                14,236
                
                
                
                1998
                
                
                [e
                ]WestShore
      PlazaTampa,
      FL
                
                $
                93,624
                
                
                
                15,653
                
                
                
                145,158
                
                
                
                9,560
                
                
                
                15,653
                
                
                
                154,718
                
                
                
                170,371
                
                
                
                25,293
                
                
                
                2003
                
                
                [e
                ]
   83
  Costs
      CapitalizedSubsequent
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                Life Uponto
                
                
                Gross
      Amounts at Which
                
                
                
                
                
                
                
                
                WhichInitial
      Cost
                
                
                Acquisition
                
                
                Carried
      at Close of Period
                
                
                
                
                
                
                
                
                Depreciationin
      LatestDate
                
                
                
                StatementBuildings
      and
                
                
                Improvements
                
                
                
                
                
                Buildings
      and
                
                
                
                
                
                
                
                Construction
                
                
                
                ofDescription
      and Location
                
                Encumbrances
                
                
                
                
                
                Improvements
                
                
                and
                
                
                
                
                
                Improvements
                
                
                Total
                
                
                Accumulated
                
                Was
                
                Date
                
                Operationsof
      Property
                
                [d]
                
                
                Land
                
                
                [a]
                
                
                Adjustments
                
                
                Land
      [b]
                
                
                [c]
                
                
                [b]
      [c]
                
                
                Depreciation
                
                Completed
                
                Acquired
                
                is
      ComputedCOMMUNITY
      CENTERSMorgantown
      CommonsMorgantown,
      WV
                
                (f)
                
                
                $
                175
                
                
                $
                7,549
                
                
                $
                13,101
                
                
                $
                -
                
                
                $
                20,825
                
                
                $
                20,825
                
                
                $
                7,135
                
                1991
                
                
                
                
                [e
                ]Polaris
      Towne CenterColumbus,
      OH
                
                $
                39,969
                
                
                
                19,082
                
                
                
                38,950
                
                
                
                495
                
                
                
                19,082
                
                
                
                39,445
                
                
                
                58,527
                
                
                
                8,854
                
                
                
                2004
                
                
                [e
                ]CORPORATE
      ASSETSGlimcher
      Properties LimitedPartnership
                
                $
                -
                
                
                
                -
                
                
                
                1,780
                
                
                
                11,189
                
                
                
                -
                
                
                
                12,969
                
                
                
                12,969
                
                
                
                6,285
                
                
                
                
                
                
                [e
                ]Lloyd
      Ice RinkOEC
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                178
                
                
                
                -
                
                
                
                178
                
                
                
                178
                
                
                
                54
                
                
                
                
                
                
                [e
                ]University
      Mall TheaterOEC
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                600
                
                
                
                -
                
                
                
                600
                
                
                
                600
                
                
                
                478
                
                
                
                
                
                
                [e
                ]$
                237,211
                
                
                $
                1,389,822
                
                
                $
                316,614
                
                
                $
                240,156
                
                
                $
                1,703,491
                
                
                $
                1,943,647
                
                
                $
                500,710DEVELOPMENTS
      IN PROGRESSGeorgesville
      SquareColumbus,
      OH
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                744
                
                
                $
                296
                
                
                $
                448
                
                
                $
                744Ashland
      Town CenterAshland,
      KY
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                6,228
                
                
                
                -
                
                
                
                6,228
                
                
                
                6,228City
      ParkCincinnati,
      OH
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,017
                
                
                
                -
                
                
                
                12,017
                
                
                
                12,017Jersey
      Gardens CenterElizabeth
      , NJ
                
                $
                -
                
                
                
                1,937
                
                
                
                4,561
                
                
                
                4,697
                
                
                
                1,225
                
                
                
                9,970
                
                
                
                11,195Johnson
      City RedevelopmentJohnson
      City, TN
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                8,789
                
                
                
                3,925
                
                
                
                4,864
                
                
                
                8,789Lloyd
      Center MallPortland,
      OR
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                15,329
                
                
                
                -
                
                
                
                15,329
                
                
                
                15,329Northtown
      MallBlaine,
      MN
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,417
                
                
                
                -
                
                
                
                12,417
                
                
                
                12,417Polaris
      LifestyleColumbus,
      OH
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,554
                
                
                
                4,660
                
                
                
                7,894
                
                
                
                12,554Eastland
      Mall, ColumbusColumbus,
      OH
                
                $
                -
                
                
                
                
                
                
                
                
                
                
                
                3,799
                
                
                
                3,272
                
                
                
                527
                
                
                
                3,799Vero
      Beach FountainsVero
      Beach, FL
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                5,095
                
                
                
                -
                
                
                
                5,095
                
                
                
                5,095Other
      Developments
                
                $
                -
                
                
                
                -
                
                
                
                -
                
                
                
                7,887
                
                
                
                -
                
                
                
                7,887
                
                
                
                7,887$
                1,937
                
                
                $
                4,561
                
                
                $
                89,556
                
                
                $
                13,378
                
                
                $
                82,676
                
                
                $
                96,054
   84
  Costs
      CapitalizedSubsequent
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                Life Uponto
                
                
                Gross
      Amounts at Which
                
                
                
                
                
                
                
                
                WhichInitial
      Cost
                
                
                Acquisition
                
                
                Carried
      at Close of Period
                
                
                
                
                
                
                
                
                Depreciationin
      LatestDate
                
                
                
                StatementBuildings
      and
                
                
                Improvements
                
                
                
                
                
                Buildings
      and
                
                
                
                
                
                
                
                Construction
                
                
                
                ofDescription
      and Location
                
                Encumbrances
                
                
                
                
                
                Improvements
                
                
                and
                
                
                
                
                
                Improvements
                
                
                Total
                
                
                Accumulated
                
                Was
                
                Date
                
                Operationsof
      Property
                
                [d]
                
                
                Land
                
                
                [a]
                
                
                Adjustments
                
                
                Land
      [b]
                
                
                [c]
                
                
                [b]
      [c]
                
                
                Depreciation
                
                Completed
                
                Acquired
                
                is
      ComputedASSETS
      HELD FOR SALE (g)Knox
      Village SquareMount
      Vernon, OH
                
                $
                8,634
                
                
                $
                865
                
                
                $
                8,479
                
                
                $
                784
                
                
                $
                868
                
                
                $
                9,260
                
                
                $
                10,128
                
                
                $
                3,477
                
                1992
                
                
                
                
                [e
                ]Ohio
      River PlazaGallipolis,
      OH
                
                $
                -
                
                
                
                502
                
                
                
                6,373
                
                
                
                (503
                )
                
                
                351
                
                
                
                6,021
                
                
                
                6,372
                
                
                
                3,004
                
                1989
                
                
                
                
                [e
                ]The
      Great Mall of the Great PlainsOlathe,
      KS
                
                $
                30,000
                
                
                
                15,646
                
                
                
                101,790
                
                
                
                (59,729
                )
                
                
                12,321
                
                
                
                45,386
                
                
                
                57,707
                
                
                
                38,724
                
                1999
                
                
                
                
                [e
                ]Eastland
      MallCharlotte,
      NC
                
                $
                42,907
                
                
                
                5,357
                
                
                
                47,860
                
                
                
                (9,428
                )
                
                
                5,315
                
                
                
                38,474
                
                
                
                43,789
                
                
                
                5,143
                
                
                
                2003
                
                
                [e
                ]22,370
                
                
                
                164,502
                
                
                
                5,331
                
                
                
                18,855
                
                
                
                99,141
                
                
                
                117,996
                
                
                
                50,348Total
                
                
                
                
                
                $
                261,518
                
                
                $
                1,558,885
                
                
                $
                411,501
                
                
                $
                272,389
                
                
                $
                1,885,308
                
                
                $
                2,157,697
                
                
                $
                551,058
  Note:  The
      total for building and improvements for the assets held for sale does not
      include deferred expenses of $1,023 that appear on the Balance
      Sheet
   85




GLIMCHER
REALTY TRUST
 
 NOTES
TO SCHEDULE III
 (dollars
in thousands)
 
 (a)
              Initial
      cost for constructed and acquired property is cost at end of first
      complete calendar year subsequent to opening or
    acquisition.
  (b)
              The
      aggregate gross cost of land as of December 31,
  2007.
 
 (c)
              The
      aggregate gross cost of building, improvements and equipment as of
      December 31, 2007.
 
 (d)
                See
      description of debt in Note 5 of Notes to Consolidated Financial
      Statements.
  (e)
                Depreciation
      is computed based upon the following estimated weighted average composite
      lives:  Buildings and improvements-40 years; equipment and
      fixtures-five to 10 years.
  (f)
                Properties
      cross-collateralize the following loan:
                  Morgantown Mall Associates Limited
      Partnership                                                     $  51,503
 (g)
                Properties
      were held for sale at December 31, 2007.  The total for building
      and improvements for the assets held-for-sale excludes the deferred costs
      of $1,023 that appear on the consolidated balance
  sheet.
  
 Reconciliation
of Real Estate
  Year Ended December 31,2007
                
                
                2006
                
                
                2005Balance
      at beginning of year
                
                $
                1,976,887
                
                
                $
                2,211,614
                
                
                $
                2,250,640Additions:Improvements
                
                
                101,814
                
                
                
                79,512
                
                
                
                109,159Acquisitions
                
                
                90,365
                
                
                
                61,276
                
                
                
                -Deductions
                
                
                (129,365
                )
                
                
                (375,515
                )
                
                
                (148,185
                )Balance
      at close of year
                
                $
                2,039,701
                
                
                $
                1,976,887
                
                
                $
                2,211,614
  Reconciliation
of Accumulated Depreciation
 
 Year Ended December 31,2007
                
                
                2006
                
                
                2005Balance
      at beginning of year
                
                $
                483,115
                
                
                $
                470,397
                
                
                $
                435,821Depreciation
      expense and other
                
                
                71,559
                
                
                
                70,281
                
                
                
                72,472Deductions
                
                
                (53,964
                )
                
                
                (57,563
                )
                
                
                (37,896
                )Balance
      at close of year
                
                $
                500,710
                
                
                $
                483,115
                
                
                $
                470,397


86