**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, 2005





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 incorporation or organization)
            (I.R.S.
                Employer Identification No.)




**150
                  East Gay Street**
                **Columbus,
                  Ohio**
              **43215**(Address
                  of principal executive offices)
              (Zip
                  Code)


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 registered**Common
                Shares of Beneficial Interest, par value $0.01 per
                share**
              **8
                3⁄4% Series F Cumulative Redeemable Preferred Shares of
                Beneficial**
              **Interest,
                par value $0.01 per share**
              **8**1⁄8**%
                Series G Cumulative Redeemable Preferred Shares of
                Beneficial**
              **Interest,
                par value $0.01 per share**
            **New
                York Stock
                Exchange**
              **New
                York Stock
                Exchange**
              
              **New
                York Stock
                Exchange**










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
      [X] No [_]**





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 22, 2006, there were 36,561,577 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, 2005,
      was $981,042,753.




**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 year covered by this Form 10-K
      with respect to the Annual Meeting of Shareholders to be held on May 5, 2006
      are
      incorporated by reference into Part III of this Report.


Page
          1
          of  86


**TABLE
      OF CONTENTS**




**Item
                No.**
              
              **Form
                  10-K****Report
                  Page****PART
                  I**1.
              Business
              31A.
              Risk
                  Factors
              71B.
              Unresolved
                  Staff Comments
              132.
              Properties
              133.
              Legal
                  Proceedings
              204.
              Submission
                  of Matters to a Vote of Security
                  Holders
              21**PART
                  II**5.
              Market
                  for Registrant's Common Equity, Related Shareholder
                  Matters and Issuer Purchases of Equity Securities
              216.
              Selected
                  Financial Data
              227.
              Management’s
                  Discussion and Analysis of Financial Condition
                  and Results of Operations
              237A.
              Quantitative
                  and Qualitative Disclosures About Market
                  Risk
              418.
              Financial
                  Statements and Supplementary Data
              419.
              Changes
                  in and Disagreements with Accountants on Accounting
                  and Financial Disclosure
              419A.
              Controls
                  and Procedures
              429B.
              Other
                  Information
              44**PART
                  III**10.
              Trustees
                  and Executive Officers of the
                  Registrant
              4411.
              Executive
                  Compensation
              4412.
              Security
                  Ownership of Certain Beneficial Owners and
                  Management and Related Shareholder Matters
              4413.
              Certain
                  Relationships and Related
                  Transactions
              4514.
              Principal
                  Accounting Fees and Services
              4515.
              Exhibits
                  and Financial Statement
                  Schedules
              45**Signatures**
              52





**PART
      I**





This
      Form
      10-K, together with other statements and information publicly disseminated
      by
      Glimcher Realty Trust (“GRT” 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;
      tenant bankruptcies; bankruptcies of joint venture partners; rejection of leases
      by tenants in bankruptcy; the failure to qualify as a REIT (as hereinafter
      defined); failure to consummate financing, including the repayment of debt;
      financing and development risks, including lack of satisfactory equity and
      debt
      financing, construction and lease-up delays and cost overruns; the level and
      volatility of interest rates; increases in impairment charges; the consummation
      of asset sales at acceptable prices; the financial stability of tenants within
      the retail industry; the rate of revenue increases versus expense increases;
      the
      failure of the closing of the sale of properties to take place from time to
      time; the failure to attract innovative retailers; the failure to complete
      proposed acquisitions; the failure to sell properties as anticipated; the
      failure to achieve earnings/Funds From Operations targets or estimates;
      conflicts of interest with existing joint ventures partners; the failure to
      complete planned redevelopments of properties; the failure of the Company to
      make additional investments in regional mall properties; the failure of joint
      venture relationships; and the failure to fully recover tenant obligations
      for
      common area maintenance (“CAM”), taxes and other property expenses, 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
      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 (including
      single tenant retail properties). 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 (including single tenant
      retail properties) 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 Glimcher Properties Limited Partnership (the
      “Operating Partnership,” “OP” or “GPLP”), 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, 2005,
      GRT held a 91.6% interest in the Operating Partnership.





GRT,
      the
      Operating Partnership 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.”





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, 2005, the
      Properties consisted of 25 Malls (24 wholly-owned and 1 partially owned through
      a joint venture) containing an aggregate of 22.7 million square feet of gross
      leasable area (“GLA”) and 11 Community Centers (including one single tenant
      retail property) containing an aggregate of 1.9 million square feet of GLA.
      The
      Company also provides leasing, legal and property management services for
      Jefferson Pointe, a 545,000 square foot open-air lifestyle retail center in
      Fort
      Wayne, Indiana. The Company has no ownership interest in Jefferson Pointe and
      therefore excludes it from the Company’s reporting of property results.
      Management fee income earned from managing Jefferson Pointe is reported in
      the
      consolidated financial statements.





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 outparcels are considered to be stores. 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 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, 2005, the occupancy rate for all of the Properties was 91.9% of
      GLA. The occupied GLA was leased at 84.9%, 7.9% 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, 2005, the Properties had annualized minimum rents of $228.3
      million. Approximately 81.9%, 7.6% and 10.5% of the annualized minimum rents
      of
      the Properties as of December 31, 2005 were derived from national, regional
      and
      local retailers, respectively. There are no tenants representing more than
      5.0%
      of the aggregate annualized minimum rents of the Properties as of December
      31,
      2005.





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, Foley’s,
      JCPenney, Kaufmann’s, Kohl’s, Macy’s, Meier & Frank Co., Nordstrom,
      Parisian, 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, Limited Express,
      New York and 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 of the Malls, multiple screen movie theaters and other entertainment
      activities. The largest operating Mall has 1.6 million square feet of GLA and
      approximately 140 stores, while the smallest has 441,000 square feet of GLA
      and
      approximately 60 stores. The Malls also have additional restaurants and retail
      businesses, such as P.F. Chang’s, The Palm, Red Lobster, Best Buy and Pier One,
      located along the perimeter of the parking areas.





As
      of
      December 31, 2005, the Malls accounted for 92.4% of the total GLA, 94.9% of
      the
      aggregate annualized minimum rents of the Properties and had an overall
      occupancy rate of 93.2%.





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, supermarkets or drug stores (“Community Anchors”) 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
      Anchors include nationally recognized retailers such as JCPenney, Kmart and
      supermarkets such as Kroger. Many of the Community Centers have retail
      businesses or restaurants located along the perimeter of the parking
      areas.




4


As
      of
      December 31, 2005, the Community Centers accounted for 7.6% of the total GLA,
      5.1% of the aggregate annualized minimum rents of the Properties and had an
      overall occupancy rate of 75.8%.





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, real estate investment trusts. 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 real estate investment trusts. 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.





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 acquisition strategies are to selectively acquire strategically
      located properties in markets where management has extensive operating
      experience. 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
      following factors, among others, are considered by the Company in making
      acquisitions: (i) the geographic area and type of property; (ii) the location,
      construction quality, condition and design of the property; (iii) the current
      FFO generated by the property and the ability to increase FFO through property
      repositioning and proactive management of the tenant base; (iv) the potential
      for capital appreciation; (v) the terms of tenant leases; (vi) the existing
      tenant mix at the property; (vii) the potential for economic growth and the
      tax
      and regulatory environment of the communities in which the property is located;
      (viii) the occupancy rates and demand by tenants for properties of similar
      type
      in the vicinity; and (ix) the prospects for financing or refinancing the
      property.





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, 2005, the Company had a total-debt-to-total-market-capitalization
      ratio of 56.1% based upon the closing price of the Common Shares on the New
      York
      Stock Exchange as of December 31, 2005. 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. 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, 2005, 82.8% of total Company debt was fixed rate.
      Shorter term and variable rate debt typically is employed for Properties
      anticipated to be expanded or redeveloped.





5


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, 2005, the Company had an aggregate of 1,128 employees, of which
      567
      were part-time.





Seasonality: The
      shopping center industry is seasonal in nature, particularly in the Company’s
      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 requirements, 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. In addition, 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
      the 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.





*(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, 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 practical 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.




6


**Item
      1A.  Risk Factors**





There
      are
      many factors that 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. If our properties
      do not generate sufficient income to meet expenses, our ability to make dividend
      distributions to you and the value of your shares will 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 space;




●
            our
                ability to provide adequate maintenance; 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.




*Our
      insurance coverage in the future may not include adequate amounts of terrorism
      insurance.*





Our
      all
      risk property insurance policies include coverage for foreign and domestic
      acts
      of terrorism on our consolidated real estate assets through January 1, 2007.
      In
      the future, insurers may limit the amount of coverage available to us for
      terrorism insurance on our properties (or we may not be able to obtain such
      insurance at all), or the cost of property and liability insurance policies
      including coverage for acts of terrorism may be unreasonable. As a result,
      there
      can be no assurance that we will be able to obtain adequate amounts of terrorism
      insurance on our properties after January 1, 2007 or, if we can, that the
      premiums for the insurance will be reasonable.





*We
      rely on major tenants.*




At
      December 31, 2005, our three largest tenants were Gap, Inc., Limited Brands,
      Inc. and Foot Locker, Inc., representing 3.2%, 2.8% and 2.7% of our annualized
      minimum rents, respectively. No other tenant represented more than 2.5% 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 expires.




*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
      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 are closed, if certain sales
      levels or profit margins are not achieved, or if an exclusive use provision
      is
      violated.




7


*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 that 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 from tenants cost reimbursements for common area
      maintenance (“CAM”), taxes and insurance 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 reimbursements 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. Final adjustments for the year ended December
      31, 2005 have not yet been determined. At December 31, 2005, we had recorded
      in
      accounts receivables $5.5 million of costs expected to be recovered from tenants
      during the first six months of 2006. There can be no assurance that we will
      collect all or substantially all of this amount.




*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 be subject generally to
      economic conditions in the regions in which our properties are located. For
      the
      year ended December 31, 2005, approximately 31% of annualized minimum rents
      came
      from our properties located in Ohio.




*We
      may be unable to successfully develop properties or operate developed
      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. 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.




8


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




*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. We may incur additional costs when complying with the ADA
      in
      the future.




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




GRT
      believes that it has qualified as a real estate investment trust (“REIT”) under
      the Internal Revenue Code of 1986, as amended (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 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, or a challenge to the status of any such
      entities as partnerships (as opposed to associations taxable as corporations)
      for federal income tax purposes, as well as 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 to access other sources of funds in order 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-term (or possibly long-term)
      borrowings, or to issue preferred or other securities, to raise funds, which
      may
      not be possible.




9


*Debt
      financing could adversely affect our performance.*




As
      of
      December 31, 2005, we had $1.5 billion of combined mortgage indebtedness and
      outstanding borrowings under our credit facility, of which $99.9 million matures
      during 2006. After the refinancing of a $30.0 million loan on January 13, 2006,
      $69.9 million remains scheduled to mature in 2006. As of December 31, 2005,
      we
      have borrowed $150.0 million from our credit facility, which matures on August
      21, 2008. A number of 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. 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.




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




Our
      $300
      million unsecured credit facility is the most restrictive of our financing
      arrangements. Accordingly, at December 31, 2005, the additional amount that
      may
      be borrowed from this facility or other sources based upon the restrictive
      covenants in the credit facility is $260.5 million. Additional amounts could
      be
      borrowed based upon the use of proceeds. The ratio of total-debt-to-total-market
      capitalization was 56.1% as of December 31, 2005. As used herein, “total market
      capitalization” means the sum of the outstanding amount of all indebtedness, the
      total liquidation preference of all preferred shares and the total market value
      of the outstanding Common Shares and the units of partnership interest in GPLP
      (“OP Units”) (based on the closing price of the Common Shares on December 31,
      2005).




*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 and restrictions on secured subordinated
      financing and 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 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, 2005, approximately $254.4 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.
      For
      example, if market rates of interest on our variable rate debt outstanding
      as of
      December 31, 2005, 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 $2.5 million annually.




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




We
      believe that investors generally perceive REIT’s 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
      total-debt-to-total-market capitalization.




10


*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 and an
      increase in debt service charges.




*Our
      issuance of additional Common Shares may affect prevailing market prices for
      the
      outstanding Common Shares.*




Future
      sales or the anticipation of such sales of additional Common Shares may have
      an
      adverse effect on the market price of our Common Shares.




*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 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
      force us to sell all of our interest in, or buy all 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.




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




GPLP
      may
      not enter into certain transactions, including the sale of all or substantially
      all of its assets, without consent from the holders of a majority (excluding
      GRT) of the OP Units. This majority vote requirement effectively means that
      Herbert Glimcher, the Chairman of the Board and his sons, David Glimcher and
      Michael Glimcher, the President, Chief Executive Officer and a Trustee of GRT,
      must approve any such transaction because, together with their spouses, they
      own
      approximately 4.9% of the OP Units (which constitutes a majority of the OP
      Units
      other than those owned by GRT) outstanding as of December 31, 2005. This veto
      right may limit our ability to enter into a liquidating transaction that may
      be
      in your best interest.




As
      a
      result of Herbert Glimcher’s, David Glimcher’s and Michael Glimcher’s status as
      holders of both Common Shares and OP Units, they have interests that 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, David Glimcher and
      Michael 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, David Glimcher and Michael 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.




11


*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 the outstanding Common 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.
      However, in no event, shall they be permitted to own, directly or indirectly,
      of
      record or beneficially, more than 14.9% of the lesser of the number or value
      of
      all outstanding shares of GRT’s equity securities. 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
      of
      control in GRT.




The
      members of the Board are currently divided into three nearly equal classes
      whose
      terms expire in 2006, 2007 and 2008, respectively. Each year one class of
      trustees are 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 then current 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.




12


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 any lose 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 and
      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.





*Inflation
      may influence our operations.*





Inflation
      risks could impact our operations due to increases in construction costs. This
      would primarily impact our development and redevelopment
      expenditures.





**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 2005 fiscal year and that remain unresolved.





**Item
      2.  Properties**





The
      Company’s headquarters are 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.





At
      December 31, 2005, the Company managed and leased a total of 36 Properties
      of
      which the Company had an ownership interest (35 wholly-owned and 1 partially
      owned through a joint venture). The Properties are located in 17 states as
      follows: Ohio (11), West Virginia (4), California (2), Florida (2), North
      Carolina (2), Pennsylvania (2), South Carolina (2), Texas (2), Alabama (1),
      Indiana (1), Kansas (1), Kentucky (1), Minnesota (1), New Jersey (1), Oregon
      (1), Tennessee (1) and Washington (1).





*(a)*
            *Malls*




Twenty-five
      of the Properties are Malls and range in size from 441,000 square feet of GLA
      to
      1.6 million square feet of GLA. Seven of the Malls are located in Ohio and
      18
      are located throughout the country in the states of California (2), Florida
      (2),
      Texas (2), West Virginia (2), Alabama (1), Kansas (1), Kentucky (1), Minnesota
      (1), New Jersey (1), North Carolina (1), Oregon (1), Pennsylvania (1), Tennessee
      (1) and Washington (1). The location, general character and major tenant
      information are set forth below.





13


**Summary
      of Malls at December 31, 2005**




**Property/Location**
            **Anchors**
              **GLA**
            **Stores**
              **GLA
                (1)**
            **Total**
              **GLA**
            **% of**
              **Anchors**
              **Occupied**
            **%
                of**
              **Stores**
              **Occupied**
            **Store**
              **Sales
                Per**
              **Square**
              **Ft.(2)**
            **Anchors**
            **Lease**
              **Expiration**
              **(3)**




Almeda
                Mall,
              Houston,
                TX
            586,042
            196,311
            782,353
            100.0
            94.9
            $286
            Foley’s
              JCPenney
              Palais
                Royal
              Ross
                Dress for Less
              Steve
                & Barry’s
            (4)
              (4)
              12/31/09
              01/31/12
              01/31/13Ashland
                Town Center
              Ashland,
                KY
            263,794
            177,697
            441,491
            100.0
            93.5
            $340
            Goody’s
              JCPenney
              Proffitt’s
              Wal-Mart
                (8)
            03/31/09
              10/31/09
              01/31/10
              11/10/09Colonial
                Park Mall
              Harrisburg,
                PA
            504,446
            240,112
            744,558
            100.0
            96.1
            $299
            The
                Bon-Ton
              Boscov’s
              Sears
            01/31/15
              (4)
              (4)Dayton
                Mall, The
              Dayton,
                OH
            928,571
            380,203
            1,308,774
            98.3
            92.2
            $328
            DSW
                Shoe
              Warehouse
              Elder-Beerman
              JCPenney
              Linens’N
                Things
              Macy’s
              Old
                Navy
              Sears
            07/31/10
              (4)
              03/31/11
              01/31/17
              (4)
              07/31/06
              (4)Eastland
                Mall
              (“Eastland
                North
              Carolina")
              Charlotte,
                NC (10)
            725,720
            341,828
            1,067,548
            100.0
            91.7
            $207
            Belk
              Burlington
                Coat
              Factory
              Cameron
                Group
              Dillard’s
              Ice
                House
              Sears
            (4)
              
              (7)
              (7)
              (4)
              03/31/06
              (4)Eastland
                Mall
              (“Eastland
                Ohio”)
              Columbus,
                OH
            726,534
            285,133
            1,011,667
            100.0
            94.5
            $286
            JCPenney
                (5)
              Kaufmann’s
              Macy’s
              Sears
            01/31/08
              (4)
              (4)
              (4)Grand
                Central Mall
              Parkersburg,
                WV
            562,394
            366,752
            929,146
            100.0
            69.5
            $296
            Elder-Beerman
                (5)
              Goody’s
              JCPenney
              Proffitt’s
              Regal
                Cinemas
              Sears
              Steve
                & Barry’s
            01/31/33
              04/30/06
              09/30/07
              03/31/18
              01/31/17
              09/25/07
              01/31/11




14
 
 **Property/Location**
                  **Anchors**
                    **GLA**
                  **Stores**
                    **GLA
                      (1)**
                  **Total**
                    **GLA**
                  **%
                      of**
                    **Anchors**
                    **Occupied**
                  **%
                      of**
                    **Stores**
                    **Occupied**
                  **Store**
                    **Sales
                      Per**
                    **Square**
                    **Ft.(2)**
                  **Anchors**
                  **Lease**
                    **Expiration**
                    **(3)**


Great
                Mall of the Great
              Plains,
                The
              Olathe,
                KS
            397,947
            413,471
            811,418
            86.0
            87.1
            $162
            Burlington
                Coat
              Factory
              Dickinson
                Theatres
              Foozles
              Group
                USA
              Jeepers!
              Marshalls
              Steve
                & Barry’s
              VF
                Factory Outlet
            01/31/08
              09/30/08
              01/31/06
              08/13/07
              12/31/06
              01/31/13
              01/31/13
              01/10/07Indian
                Mound Mall
              Heath,
                OH
            389,589
            167,567
            557,156
            100.0
            82.9
            $248
            Crown
                Cinema
              Elder-Beerman
              Goody’s
              JCPenney
              Sears
                (5)
              Steve
                & Barry’s
            12/31/12
              01/31/09
              05/31/08
              10/31/11
              09/23/27
              01/31/11Jersey
                Gardens
              Elizabeth,
                NJ
            649,465
            644,394
            1,293,859
            100.0
            95.2
            $439
            Bed
                Bath & Beyond
              Burlington
                Coat
              Factory
              Cohoes
                Fashions
              Daffy’s
              DSW
                Shoe
              Warehouse/
              Filene’s
                Basement
              Gap
                Outlet, The
              Group
                USA
              Home
                Living
              Jeepers!
              Last
                Call
              Loew’s
                Theaters
              Marshalls
              Nike
                Factory Store
              Off
                5thSaks Fifth
              Ave
                Outlet
              Old
                Navy
            01/31/10
              
              01/31/10
              01/31/10
              01/31/10
                
                
                10/31/11
              01/31/10
              12/31/08
              08/31/08
              01/31/10
              11/30/09
              12/31/20
              10/31/09
              11/30/11
              10/31/14
              05/31/10Lloyd
                Center
              Portland,
                OR
            739,759
            712,722
            1,452,481
            93.6
            95.2
            $374
            Barnes
                & Noble
              Lloyd
                Ctr Ice Rink (6)
              Lloyd
                Mall Cinemas
              Marshalls
              Meier
                & Frank
              Nordstrom
              Ross
                Dress for Less
              Sears
            01/31/12
              12/31/08
              01/31/12
              01/31/09
              01/31/06
              (4)
              01/31/15
              (4)Mall
                at Fairfield
              Commons,
                The
              Beavercreek,
                OH
            768,284
            375,267
            1,143,551
            100.0
            97.8
            $371
            Dick’s
                Sporting
              Good’s
              Elder-Beerman
              JCPenney
              Macy’s
                (5)
              Parisian
              Sears
            01/31/21
              10/31/15
              10/31/08
              01/31/15
              01/31/14
              10/31/08




15


**Property/Location**
                **Anchors**
                  **GLA**
                **Stores**
                  **GLA
                    (1)**
                **Total**
                  **GLA**
                **% of**
                  **Anchors**
                  **Occupied**
                **%
                    of**
                  **Stores**
                  **Occupied**
                **Store**
                  **Sales
                    Per**
                  **Square**
                  **Ft.(2)**
                **Anchors**
                **Lease**
                  **Expiration**
                  **(3)**


Mall
                at Johnson
              City,
                The
              Johnson
                City, TN
            334,605
            196,906
            531,511
            100.0
            89.3
            $384
            Goody’s
              JCPenney
              Proffitt’s
                for Her
              Proffitt’s
                for Men
              Kids
                & Home
              Sears
            05/31/11
              03/31/10
              10/31/12
              
              06/30/11
              (4)Montgomery
                Mall
              Montgomery,
                AL
            460,341
            266,541
            726,882
            61.7
            64.5
            $215
            Parisian
              Steve
                & Barry’s
            (4)
              01/31/13Morgantown
                Mall
              Morgantown,
                WV
            396,358
            161,749
            558,107
            100.0
            94.5
            $299
            Carmike
                Cinemas
              Elder-Beerman
              JCPenney
              Proffitt’s
              Sears
              Steve
                & Barry’s
            10/31/29
              01/29/11
              09/30/10
              03/15/11
              09/30/10
              01/31/13New
                Towne Mall
              New
                Philadelphia, OH
            361,501
            155,217
            516,718
            100.0
            83.7
            $251
            Elder-Beerman
              Goody’s
              JCPenney
              Kohl’s
              Regal
                Cinemas
              Sears
              Super
                Fitness
              Center
            02/02/09
              08/31/14
              09/30/08
              01/31/27
              03/31/07
              10/31/08
              
              02/28/14Northtown
                Mall
              Blaine,
                MN
            316,015
            305,094
            621,109
            58.6
            81.0
            $375
            Best
                Buy
              Burlington
                Coat
              Factory
              Steve
                & Barry’s
            01/31/10
              
              09/30/10
              01/31/11Northwest
                Mall
              Houston,
                TX
            582,339
            211,753
            794,092
            60.1
            72.3
            $261
            All
                Shoes $9.99
              Foley’s
              Palais
                Royal
            06/30/08
              (4)
              12/31/09Polaris
                Fashion Place
              Columbus,
                OH
            1,088,075
            495,212
            1,583,287
            100.0
            98.6
            $366
            Great
                Indoors, The
              JCPenney
              Kaufmann’s
              Macy’s
              Saks
                Fifth Avenue
              Sears
              Von
                Maur
            (4)
              (4)
              (4)
              (4)
              (4)
              (4)
              (4)River
                Valley Mall
              Lancaster,
                OH
            316,947
            260,623
            577,570
            100.0
            90.7
            $298
            Elder-Beerman
              JCPenney
              Macy’s
              Regal
                Cinemas
              Sears
              Steve
                & Barry’s
            02/02/08
              09/30/07
              09/30/07
              12/31/06
              10/31/09
              01/31/11




16


**Property/Location**
                **Anchors**
                  **GLA**
                **Stores**
                  **GLA
                    (1)**
                **Total**
                  **GLA**
                **% of**
                  **Anchors**
                  **Occupied**
                **%
                    of**
                  **Stores**
                  **Occupied**
                **Store**
                  **Sales
                    Per**
                  **Square**
                  **Ft.(2)**
                **Anchors**
                **Lease**
                  **Expiration**
                  **(3)**


SuperMall
                of the Great
              Northwest
              Auburn,
                WA
            541,669
            401,007
            942,676
            100.0
            85.6
            $243
            Ann
                Taylor Loft
              Bed
                Bath & Beyond
              Burlington
                Coat
              Factory
              Gart
                Sports
              Marshalls
              Nordstrom
              Old
                Navy
              Sam’s
                Club
              Vision
                Quest
            01/31/06
              01/31/06
              
              01/31/06
              01/31/11
              01/31/06
              08/31/10
              01/31/06
              05/31/19
              11/30/18University
                Mall
              Tampa,
                FL
            787,662
            447,548
            1,235,210
            100.0
            88.8
            $325
            Burdines
              Burlington
                Coat
              Factory
              Cobb
                Theater (6)
              Dillard’s
              Sears
              Steve
                & Barry’s
            (4)
              
              (4)
              12/31/11
              (4)
              (4)
              01/31/13Weberstown
                Mall
              Stockton,
                CA
            602,817
            256,195
            859,012
            100.0
            94.0
            $425
            Barnes
                & Noble
              Dillard’s
              JCPenney
              Sears
            01/31/09
              (4)
              03/31/09
              (4)WestShore
                Plaza Mall
              Tampa,
                FL
            769,878
            290,525
            1,060,403
            100.0
            94.0
            $466
            AMC
                Theatres
              JCPenney
              Macy’s
              Old
                Navy
              Saks
                Fifth Avenue
              Sears
            01/31/21
              09/30/07
              (4)
              01/31/06
              11/30/18
              09/30/17**Subtotal**
            13,800,752
            7,749,827
            21,550,579
            95.2%
            89.5%
            $334**Mall
                owned in a joint venture**Puente
                Hills Mall (9)
              City
                of Industry, CA
            731,289
            460,619
            1,191,908
            100.0
            83.7
            
            AMC
                20 Theaters
              Borders
              Burlington
                Coat
              Factory
              Circuit
                City
              Comp
                USA
              Linen’s
                N Things
              Robinsons-May
              Ross
                Dress for Less
              Sears
              Spectrum
                Club
            04/30/17
              09/30/13
              
              10/31/08
              01/31/19
              10/31/17
              01/31/14
              (4)
              01/31/10
              (4)
              01/31/14**Subtotal**
            731,289
            460,619
            1,191,908
            100.0
            83.7**Total**
            14,532,041
            8,210,446
            22,742,487
            95.5
            89.2





(1)
            Includes
                outparcels.


(2)
            Average
                2005 store sales per square foot for in-line stores of less than
                20,000
                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.




17


(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.


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


(8)
            Tenant
                vacated the store, but continues to pay rent through the lease 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,
                2005.





*(b)*
            *Community
                Centers*





Eleven
      of
      the Properties are Community Centers (including one single tenant retail
      property) ranging in size from approximately 33,000 to 443,000 square feet
      of
      GLA. They are located in 6 states as follows: Ohio (4), South Carolina (2),
      West
      Virginia (2), Indiana (1), North Carolina (1), and Pennsylvania (1). The
      location, general character and major tenant information are set forth
      below.





**Summary
      of Community Centers at December 31, 2005**




**Property/Location**
            **Anchors**
              **GLA**
            **Stores**
              **GLA (1)**
            **Total**
              **GLA**
            **%
                of**
              **Anchors**
              **Occupied**
            **% of**
              **Stores**
              **Occupied**
            **Anchors**
            **Lease**
              **Expiration
                (2)**




Ayden
                PlazaAyden,
                NC (4)
            21,000
            11,800
            32,800
            100.0
            84.7
            Food
                Lion (3)
            10/31/07East
                Pointe PlazaColumbia,
                SC (4)
            183,340
            90,868
            274,208
            100.0
            70.0
            Food
                Lion (3)
            11/16/10Super
                Petz (3)
            03/31/06Wal-Mart
                (3) (7)
            01/31/09Knox
                Village SquareMount
                Vernon, OH
            173,009
            34,400
            207,409
            67.8
            86.9
            JCPenney
            05/31/08Kmart
            11/30/17Lowe’sMarion,
                OH (4)
            72,507
            N/A
            72,507
            100.0
            N/A
            Lowe’s
                (3)
            07/31/13Morgantown
                CommonsMorgantown,
                WV
            200,187
            30,656
            230,843
            79.0
            41.1
            Kmart
            02/28/21OfficeMax
            08/31/11Newberry
                Square Shopping CenterNewberry,
                SC (4)
            104,588
            22,240
            126,828
            0.0
            16.2Ohio
                River PlazaGallipolis,
                OH
            105,857
            43,136
            148,993
            0.0
            76.8Pea
                Ridge Shopping CenterHuntington,
                WV (4)
            110,192
            39,860
            150,052
            100.0
            65.5
            Great
                Escape
              Marine
                (6)
            02/29/08Kmart
            09/30/09Polaris
                Towne CenterColumbus,
                OH
            291,997
            151,040
            443,037
            100.0
            100.0
            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
              T.J.
                Maxx
            01/31/10
              03/31/09Scott
                Town PlazaBloomsburg,
                PA (4)
            47,334
            30,300
            77,634
            0.0
            89.8




18


**Property/Location**
                **Anchors**
                  **GLA**
                **Stores**
                  **GLA (1)**
                **Total**
                  **GLA**
                **%
                    of**
                  **Anchors**
                  **Occupied**
                **% of**
                  **Stores**
                  **Occupied**
                **Anchors**
                **Lease**
                  **Expiration
                    (2)**


VincennesVincennes,
                IN (4) (5)
            108,682
            N/A
            108,682
            100.0
            N/A
            Charter
              Communications
            09/30/08Kmart
            06/30/09**Total**
            1,418,693
            454,300
            1,872,993
            75.0
            78.6




(1)
            Includes
                outparcels.


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


(3)
            Tenant
                vacated the store, but continues to pay rent through lease expiration.


(4)
            Property
                was classified as held for sale as of December 31,
                2005.


(5)
            The
                Company leases the land from a third party for this Community
                Center.


(6)
            Kroger
                sublet the store to The Great Outdoors Marine and Sportshop,
                Inc.


(7)
            Wal-Mart
                sublet store to Sears.





One
      of
      the Community Centers is subject to a long-term ground lease where a third
      party
      owns the underlying land and has leased the land to the Company. The expiration
      date of the ground lease (assuming the exercise by the Company of all of its
      options to extend the terms of such lease) is 2050. The Company pays rent of
      $14,400 per annum, for the use of the land and generally is responsible for
      the
      costs and expenses associated with maintaining the building and improvements
      thereon. In addition, the ground lease provides for sharing of the percentage
      rents collected, if any. At the end of the lease term, unless extended at the
      Company’s option, the land, together with all improvements thereon, will revert
      to the land owner without compensation to the lessee.





(c)
            Properties
                Subject to Indebtedness





At
      December 31, 2005, 26 of the Properties, consisting of 22 Malls (21 wholly-owned
      and 1 partially owned through a joint venture) and 4 Community Centers, were
      encumbered by mortgages and 3 Malls and 7 Community Centers were unencumbered.
      The 10 unencumbered Properties had a net book value of $129.2 million at
      December 31, 2005. 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.





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, 2005 (dollars in
      thousands).




19




**Encumbered
                Property**
            
            
            **Fixed/**
              **Variable**
              **Interest**
              **Rate**
            
            
            **Interest**
              **Rate**
            
            
            **Loan**
              **Balance**
            
            
            **Annual
                Debt**
              **Service
                (1)**
            
            
            **Balloon**
              **Payment**
            
            
            **Maturity**$36.4
                million SAN Mall note
            
            
            Fixed
            
            
            8.35%
            
            $
            33,523
            
            $
            3,320
            
            $
            32,615
            
            
            10/11/2007Almeda
                MallNorthwest
                Mall$58.4
                million Morgantown note
            
            
            Fixed
            
            
            6.89%
            
            
            53,381
            
            $
            4,608
            
            $
            50,823
            
            
            09/11/2008Morgantown
                MallMorgantown
                CommonsWeberstown
                Mall
            
            
            Fixed
            
            
            7.43%
            
            
            19,126
            
            $
            1,708
            
            $
            19,033
            
            
            05/01/2006Colonial
                Park Mall
            
            
            Fixed
            
            
            7.73%
            
            
            32,975
            
            $
            3,088
            
            $
            32,033
            
            
            10/11/2007Knox
                Village Square
            
            
            Fixed
            
            
            7.41%
            
            
            8,865
            
            $
            772
            
            $
            8,624
            
            
            02/11/2008Eastland
                North Carolina (3)
            
            
            Fixed
            
            
            7.84%
            
            
            44,559
            
            $
            4,308
            
            $
            42,302
            
            
            09/11/2008Grand
                Central Mall
            
            
            Fixed
            
            
            7.18%
            
            
            48,572
            
            $
            4,268
            
            $
            46,065
            
            
            02/01/2009Mall
                at Johnson City, The
            
            
            Fixed
            
            
            8.37%
            
            
            39,214
            
            $
            3,740
            
            $
            37,026
            
            
            06/01/2010Polaris
                Towne Center
            
            
            Fixed
            
            
            8.20%
            
            
            40,953
            
            $
            3,858
            
            $
            38,543
            
            
            06/01/2010Ashland
                Town Center
            
            
            Fixed
            
            
            7.25%
            
            
            25,307
            
            $
            2,344
            
            $
            21,817
            
            
            11/01/2011Dayton
                Mall, The
            
            
            Fixed
            
            
            8.27%
            
            
            56,717
            
            $
            5,556
            
            $
            49,864
            
            
            07/11/2012WestShore
                Plaza
            
            
            Fixed
            
            
            5.09%
            
            
            96,804
            
            $
            6,508
            
            $
            84,824
            
            
            09/09/2012University
                Mall
            
            
            Fixed
            
            
            7.09%
            
            
            63,845
            
            $
            5,840
            
            $
            52,524
            
            
            01/11/2013Polaris
                Fashion Place
            
            
            Fixed
            
            
            5.24%
            
            
            144,439
            
            $
            9,928
            
            $
            124,572
            
            
            04/11/2013Lloyd
                Center
            
            
            Fixed
            
            
            5.42%
            
            
            135,326
            
            $
            9,456
            
            $
            116,922
            
            
            06/11/2013Jersey
                Gardens
            
            
            Fixed
            
            
            4.83%
            
            
            161,371
            
            $
            10,424
            
            $
            135,194
            
            
            06/08/2014Mall
                at Fairfield Commons, The
            
            
            Fixed
            
            
            5.45%
            
            
            110,871
            
            $
            7,724
            
            $
            92,762
            
            
            11/01/2014SuperMall
                of the Great Northwest
            
            
            Fixed
            
            
            7.54%
            
            
            60,341
            
            $
            5,412
            
            $
            49,969
            
            
            02/11/2015River
                Valley Mall
            
            
            Fixed
            
            
            5.65%
            
            
            50,000
            
            $
            2,833
            
            $
            44,931
            
            
            01/11/2016Total
                fixed rate notes:
            
            
            
            
            
            
            
            
            1,226,189Great
                Mall of the Great Plains, The
            
            
            Variable
            
            
            6.37%
            
            
            30,000
            
            $
            961
            
            $
            30,000
            
            
            06/09/2006Montgomery
                Mall
            
            
            Variable
            
            
            6.16%
            
            
            25,000
            
            $
            847
            
            $
            25,000
            
            
            08/01/2006East
                Pointe Plaza (3)
            
            
            Variable
            
            
            6.79%
            
            
            7,729
            
            $
            439
            
            $
            7,595
            
            
            08/01/2006Eastland
                Ohio
            
            
            Variable
            
            
            6.38%
            
            
            41,669
            
            $
            2,716
            
            $
            41,669
            
            
            01/01/2007Total
                variable rate notes:
            
            
            
            
            
            
            
            
            104,398**Total
              Wholly Owned Properties:**
            
            
            
            
            
            
            
            $
            1,330,587
            (2)**Joint
              Venture Properties:**Puente
              Hills Mall (4)
            
            
            Fixed
            
            
            5.20%
            
            
            46,115
            
            $
            3,151
            
            $
            44,324
            
            
            06/01/2008**Total
              Joint Venture Properties:**
            
            
            
            
            
            
            
            $
            46,115




(1)
            Annual
                debt service for variable rate notes is calculated based on the interest
                rate at December 31, 2005.


(2)
            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 Combinations.”


(3)
            Property
                was classified as held for sale as of December 31,
                2005.


(4)
            The
                Company acquired a 52% interest in this Property on December 29,
                2005.





**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.





20


During
      the fourth quarter of 2004, GRT received a subpoena for documents from the
      SEC
      in connection with an investigation concerning the election by
      PricewaterhouseCoopers LLP not to renew its engagement as the independent
      accountant for the Company (which was previously reported by GRT in Forms 8-K
      and 8-K/A filed on June 8 and June 15, 2004, respectively) and a related party
      transaction involving the Company’s City Park development project (which
      transaction was previously reported by GRT in its Form 10-K filed on March
      12,
      2004). During the first quarter of 2005, the Company also received a subpoena
      for documents from the SEC that primarily seeks documents concerning the
      restatement of the Company's financial statements for the years ended 2001
      through 2003 (which restatement was reported by the Company in a Form 8-K filed
      on February 22, 2005). The Company is cooperating fully with each
      investigation.





**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 2005. ****





**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 New York Stock Exchange
      (“NYSE”) under the symbol “GRT.” On February 22, 2006, the last reported sales
      price of the Common Shares on the NYSE was $27.86. The following table shows
      the
      high and low sales prices for the Common Shares on the NYSE for the 2005 and
      2004 quarterly periods indicated as reported by the New York Stock Exchange
      Composite Tape and the cash distributions per Common Share paid by GRT with
      respect to such period.




**Quarter
              Ended**
            **High**
            **Low**
            **Distributions**
              **Per
                Share**March
                31, 2004
            $27.72
            $21.92
            $0.4808June
                30, 2004
            $27.15
            $19.00
            $0.4808September
                30, 2004
            $26.00
            $21.43
            $0.4808December
                31, 2004
            $28.83
            $24.05
            $0.4808March
                31, 2005
            $28.03
            $23.40
            $0.4808June
                30, 2005
            $29.00
            $23.45
            $0.4808September
                30, 2005
            $30.16
            $24.03
            $0.4808December
                31, 2005
            $26.70
            $21.74
            $0.4808





*(b)*
            *Holders*





The
      number of holders of record of the Common Shares was 36,561,577 as of February
      22, 2006.





*(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 (the “Plan”)
      under which its shareholders or OP 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, 2005, 2,100,000 Common Shares were authorized, of which 250,197 Common
      Shares have been issued.





21


**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.





**SELECTED
      FINANCIAL DATA**





**For
                the Years Ended December
                31,****2005**
            
            **2004**
            
            **2003**
            
            **2002**
            
            **2001****Operating
                Data (in thousands, except per share amounts):
                (1)**Total
                Revenues
            
            $
            334,859
            
            $
            326,982
            
            $
            285,596
            
            $
            237,133
            
            $
            213,263Operating
                income
            
            $
            116,749
            
            $
            117,620
            
            $
            99,488
            
            $
            82,992
            
            $
            67,899Interest
                expense
            
            $
            84,772
            
            $
            89,279
            
            $
            78,384
            
            $
            92,635
            
            $
            84,134Gain
                (loss) on sales of properties, net
            
            $
            1,619
            
            $
            19,646
            
            $
            703
            
            $
            15,756
            
            $
            (
                610
            )Income
                (loss) from continuing operations
            
            $
            32,103
            
            $
            25,655
            
            $
            22,053
            
            $
            (8,630
            )
            $
            (16,383
            )Income
                (loss) from continuing operations per share common
                (diluted)
            
            $
            0.37
            
            $
            0.16
            
            $
            0.26
            
            $
            (0.51
            )
            $
            (
                0.23
            )Net
                income
            
            $
            20,850
            
            $
            51,755
            
            $
            32,961
            
            $
            33,604
            
            $
            18,270Preferred
                stock dividends
            
            $
            17,437
            
            $
            17,517
            
            $
            13,688
            
            $
            11,833
            
            $
            15,777Net
                income available to common shareholders
            
            $
            3,413
            
            $
            29,360
            
            $
            19,273
            
            $
            21,771
            
            $
            24,933Per
                common share data: Earnings per share (diluted)
            
            $
            0.09
            
            $
            0.82
            
            $
            0.55
            
            $
            0.67
            
            $
            0.89Distributions
                (per common share)
            
            $
            1.9232
            
            $
            1.9232
            
            $
            1.9232
            
            $
            1.9232
            
            $
            1.9232**Balance
                Sheet Data (in thousands):**Investment
                in real estate, net
            
            $
            1,877,059
            
            $
            1,835,298
            
            $
            1,724,226
            
            $
            1,507,277
            
            $
            1,609,346Total
                assets
            
            $
            1,995,312
            
            $
            1,947,024
            
            $
            1,837,423
            
            $
            1,622,433
            
            $
            1,751,419Total
                long-term debt
            
            $
            1,501,481
            
            $
            1,402,604
            
            $
            1,295,058
            
            $
            1,095,930
            
            $
            1,246,741Total
                shareholders’ equity
            
            $
            387,054
            
            $
            443,822
            
            $
            441,939
            
            $
            416,492
            
            $
            389,425**Other
                Data:**Cash
                provided by operating activities (in thousands)
            
            $
            108,345
            
            $
            102,305
            
            $
            98,894
            
            $
            67,600
            
            $
            101,665Cash
                (used in) provided by investing activities (in thousands)
            
            $
            (122,462
            )
            $
            36,237
            
            $
            (200,229
            )
            $
            175,697
            
            $
            (57,882
            )Cash
                provided by (used in) financing activities (in thousands)
            
            $
            13,492
            
            $
            (141,136
            )
            $
            101,066
            
            $
            (240,697
            )
            $
            (40,488
            )Funds
                from operations (2) (in thousands)
            
            $
            77,666
            
            $
            89,629
            
            $
            88,897
            
            $
            74,828
            
            $
            95,158Number
                of properties (3) (4)
            
            
            36
            
            
            41
            
            
            70
            
            
            73
            
            
            102Total
                GLA (in thousands) (3) (4)
            
            
            24,615
            
            
            24,291
            
            
            27,061
            
            
            25,716
            
            
            31,121Occupancy
                rate % (3)
            
            
            91.9
            %
            
            89.3
            %
            
            89.8
            %
            
            88.9
            %
            
            91.7
            %





(1)
            Operating
                data for the years ended December 31, 2005, 2004, 2003, 2002 and
                2001 are
                restated to reflect the impact of SFAS No.
                144.





(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 real estate investment
                trusts.
                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.





22


(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: 2005 includes 1.2 million square feet of GLA (1 Property),
                none
                in 2004, 2003 includes 2.0 million square feet of GLA (2 Properties),
                2002
                includes 3.8 million square feet of GLA (4 Properties) and 2001 includes
                7.6 million square feet of GLA (8 Properties).





**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 and community
      shopping centers. As of December 31, 2005, we owned interests in and managed
      36
      properties, consisting of 25 Malls (24 wholly-owned and 1 partially owned
      through a joint venture) and 11 Community Centers (including one single tenant
      retail property) located in 17 states. The Properties contain an aggregate
      of
      approximately 24.6 million square feet of GLA of which approximately 91.9%
      was
      occupied at December 31, 2005.





Our
      primary business objective is to achieve growth in net income and funds from
      operations, or FFO, by developing and acquiring retail properties; by 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;





·
            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





23


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





Our
      strategy is to be a leading REIT focusing on enclosed malls and other 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 transactions 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 one 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
      independent registered public accounting firm. Actual results may differ from
      these estimates under different assumptions or conditions.





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 estimates. Percentage rents, tenant reimbursements and components
      of
      other revenue associated with the margins related to outparcel sales include
      estimates.





*Percentage
      Rents*





The
      recognition of income from percentage rents requires management to make certain
      estimates with regard to tenants’ sales levels. The majority of the Company’s
      tenants report sales on a monthly basis, which provides the Company with a
      reasonable basis upon which to record this income. The monthly sales amounts,
      however, are unaudited and subject to change when the tenant reports its final
      sales after the end of the lease year. In addition, leases sometimes permit
      the
      exclusion of certain types of sales or services from the calculation of
      percentage rents 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 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. 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. 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 reimbursement
      versus actual expenses. If management’s estimate of the percent of recoverable
      expenses that can be billed to the tenants in 2005 differs from actual amounts
      billed in 2006 by 1%, the amount of income recorded during 2005 would increase
      or decrease by $1.1 million.





24


*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 cost, 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
      collection 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.





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.





25


*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
      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.





*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 and the value of tenant relationships,
      based
      in each case on their fair values. Purchase accounting was 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 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.





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.





26


*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 term of each lease. Cash
      allowances paid for improvements to real estate owned by retailers are
      capitalized as contract intangibles and amortized over the life of the operating
      agreements. 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.





Derivatives





The
      Company has used interest rate cap agreements to hedge interest rate exposure
      and interest rate swap contracts to convert a portion of its variable rate
      debt
      to fixed rate debt. The Company has a policy of only entering into contracts
      with major financial institutions based upon their credit ratings and other
      factors, and all contracts are intended to be effective as hedges of specific
      interest rate risk exposures. In connection with the determination of the
      effectiveness of these hedges and the recognition of any unrealized gain or
      loss
      on these contracts, the Company computes the fair value of the contracts at
      each
      balance sheet date. 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 discounted cash flow analysis, replacement
      cost and termination cost are used to determine fair value. All methods of
      assessing fair value result in a general approximation of value, and such value
      may never actually be realized. The Company at times employs an external third
      party to perform an independent assessment of the fair value of the derivatives
      portfolio. The aggregate fair value of the Company’s derivative instruments was
      nominal at December 31, 2005 and 2004.





**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 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 REIT’s.





The
      following table illustrates the calculation of FFO and the reconciliation of
      FFO
      to net income available to common shareholders for the years ending December
      31,
      2005, 2004 and 2003 (in thousands):





27




**For
                the Years Ended
                December 31,****2005**
            
            
            **2004**
            
            
            **2003**Net
                income available to common shareholders
            
            $
            3,413
            
            $
            29,360
            
            $
            19,273Add
                back (less):Real
                estate depreciation and amortization
            
            
            75,620
            
            
            76,970
            
            
            64,688Share
                of joint venture real estate depreciation and amortization
            
            
            
            
            
            39
            
            
            3,936Minority
                interest in Operating Partnership
            
            
            252
            
            
            2,906
            
            
            1,703Discontinued
                operations: Gain on sales of properties
            
            
            (1,619
            )
            
            (19,646
            )
            
            (703
            )Funds
                from operations
            
            $
            77,666
            
            $
            89,629
            
            $
            88,897




FFO
      -
      Comparison of year ended December 31, 2005 to December 21, 2004





FFO
      decreased 13.3%, or $12.0 million, for the year ended December 31, 2005 compared
      to the year ended December 31, 2004. During 2005, we incurred $16.4 million
      of
      impairment charges to FFO in connection with Community Centers that were either
      sold or held for sale. Also contributing to the decrease in FFO was a $7.6
      million reduction in net operating income previously generated from sold
      Properties. Lastly, general and administrative costs increased by $4.1 million.
      This increase is related to a $3.3 million charge for employment related matters
      and increased costs associated with corporate governance.





Offsetting
      these decreases in FFO was lower overall interest expense of approximately
      $4.5
      million and a $7.4 million greater contribution of operating income from our
      Properties in 2005. The decrease in interest expense was driven primarily by
      lower outstanding borrowings for the year ended December 31, 2005 as compared
      to
      the year ended December 31, 2004. We also incurred a $4.9 million charge
      associated with the original issuance costs of the 9.25% Series B Cumulative
      Preferred Shares of Beneficial Interest (“the Series B Preferred”) that were
      redeemed during the first quarter of 2004.





FFO
      -
      Comparison of year ended December 31, 2004 to December 31, 2003





FFO
      increased by 0.8%, or $732,000, for the year ended December 31, 2004 compared
      to
      the year ended December 31, 2003. This increase can be attributed to an increase
      in net income related to acquisitions made in 2003 and 2004 that contributed
      incremental FFO of $10.9 million.





This
      increase was partially offset by the $4.9 million charge associated with the
      original issuance costs of the Company’s Series B Preferred Shares that were
      redeemed during the first quarter of 2004. Also contributing to the decrease
      in
      FFO was a $3.3 million reduction in net operating income previously generated
      from sold Properties as well as reductions in results of operations due to
      decreased termination income and higher general and administrative
      costs.





**Results
      of Operations - Year Ended December 31, 2005 Compared to Year Ended December
      31,
      2004**




Revenues





Total
      revenues increased 2.4%, or $7.9 million, for the year ended December 31, 2005.
      Base rents were up $3.6 million, lease termination income increased $3.4
      million, tenant reimbursements were up $1.4 million, overage rent was up
      $646,000 and management fee income increased $532,000. These increases were
      partially offset by a reduction in licensing agreement revenue of $1.9 million
      and a decrease of $188,000 in proceeds from the sale of outparcels.





*Minimum
      rents*





Minimum
      rents increased 3.5%, or $7.0 million, for the year ended December 31, 2005.
      The
      increase is due to higher base rent at the Malls of $3.3 million and increased
      termination income of $3.4 million compared to last year. The increase in base
      rent in 2005 resulted from occupancy improvements and higher re-leasing
      spreads.




28


*Tenant
      reimbursements*





Tenant
      reimbursements reflect an increase of 1.5%, or $1.4 million, for the year ended
      December 31, 2005. The increase in revenue relates to increases in recoverable
      operating expenses of $1.3 million in 2005 that we expect to be reimbursed
      from
      our tenants.





*Other
      revenues*





The
      $1.2
      million decrease in other revenue is a result of a decrease of $1.9 million
      in
      licensing agreement revenue and a $188,000 decrease in the proceeds from the
      sale of outparcels partially offset by higher fee income of $532,000. The
      increase in fee income relates primarily to an acquisition fee earned following
      the purchase of Puente Hills Mall, a 1.2 million square foot enclosed regional
      Mall located in the Los Angeles metro area (“Puente”), on December 29,
      2005.





Expenses





Total
      expenses increased 4.2%, or $8.7 million, for the year ended December 31, 2005.
      Real estate taxes and property operating expenses increased $1.3 million, the
      provision for doubtful accounts decreased $543,000, other operating expenses
      increased $1.1 million, depreciation and amortization increased $2.7 million
      and
      general and administrative expenses increased $4.1 million.





*Real
      estate taxes and property operating expenses*





Real
      estate taxes and property operating expenses increased 1.2%, or $1.3 million,
      for the year ended December 31, 2005. Real estate taxes increased $2.1 million
      from 2004 as a result of increases in the assessed value of several Properties
      and a change in the calculation of commercial property real estate tax at our
      Properties located in Ohio. The increase was partially offset by a reduction
      in
      property operating expenses of $756,000, primarily a result of bringing
      housekeeping and security services in-house.





*Provision
      for doubtful accounts*





The
      provision for doubtful accounts was $4.8 million for the year ended December
      31,
      2005 and $5.4 million for 2004. The provision represented 1.4% of revenues
      in
      2005 and 1.6% of revenues in 2004. The accounts receivable balance and the
      allowance for doubtful accounts have not changed significantly (less than 2%)
      as
      of December 31, 2005 compared to December 31, 2004. We have maintained
      consistent reserve percentages for our past due receivables.





*Other
      Operating Expenses*





Other
      operating expenses were $9.6 million for the year ended December 31, 2005
      compared to $8.5 million for the corresponding period in 2004. The increase
      was
      primarily due to higher legal fees of $560,000 at the Properties and an increase
      of $493,000 in costs from outparcel sales.





*Depreciation
      and Amortization*





The
      $2.7
      million increase in depreciation and amortization is primarily a result of
      additional depreciation for additions to real estate assets and the write-offs
      related to improvements in spaces vacated by anchor tenants.





*General
      and Administrative*





General
      and administrative expense was $18.4 million and represented 5.5% of total
      revenues for the year ended December 31, 2005 compared to $14.3 million and
      4.4%
      of total revenues for the corresponding period in 2004. The increase is due
      primarily to a $3.3 million charge relating to employment agreements, higher
      professional fees associated with corporate governance initiatives and increased
      corporate salaries.




29


Interest
      expense/capitalized interest





Interest
      expense decreased  5.0%,
      or
      $4.5  million,
      for the twelve months ended December 31, 2005. The summary below identifies
      the
      decrease by its various components (dollars in thousands).




**Year
                Ended December
                31,****2005**
            
            
            **2004**
            
            
            **Inc.
                (Dec.)**Average
                loan balance
            
            $
            1,370,588
            
            $
            1,393,894
            
            $
            (23,306
            )Average
                rate
            
            
            6.16
            %
            
            6.08
            %
            
            0.08
            %Total
                interest
            
            $
            84,428
            
            $
            84,749
            
            $
            (321
            )Amortization
                of loan fees
            
            
            2,612
            
            
            4,239
            
            
            (1,627
            )Capitalized
                interest and other expense, net
            
            
            (2,268
            )
            
            291
            
            
            (2,559
            )Interest
                expense
            
            $
            84,772
            
            $
            89,279
            
            $
            (4,507
            )





Costs
      associated with early extinguishment of debt, which are reflected in interest
      expense, were $1.8 million for the twelve months ended December 31, 2004. Of
      this cost, $1.2 million is included under “Amortization of loan fees” and
      represents the acceleration of loan fee amortization associated with the
      refinancing of mortgages. The variance in “Capitalized interest and other
      expense” was due to a significant increase in construction activity ($1.1
      million) in 2005 and the settlement of an interest rate swap arrangement
      ($391,000) and fees associated with the mortgage refinancing noted above
      ($557,000) in 2004.





Equity
      in income of unconsolidated entities, net





The
      $51,000 income results from our investment in Puente.





Discontinued
      Operations





During
      2005, we sold five Community Centers and one Mall for $18.4 million and
      reflected seven Community Centers and one Mall Property as held for sale. We
      recorded a net gain on the sale of discontinued operations of $1.6 million
      and
      we recorded an impairment loss associated with the Community Centers of $16.4
      million, which, in accordance with SFAS No. 144, is reported in discontinued
      operations. During 2004, we sold twenty-nine Community Centers for $113.3
      million and reflected one Community Center as held for sale. We reported a
      net
      gain of $19.6 million associated with the sale of these Community Centers.
      Total
      revenues for discontinued operations were $17.8 million and $28.2 million for
      the years ended December 31, 2005 and 2004, respectively.





**Results
      of Operations - Year Ended December 31, 2004 Compared to Year Ended December
      31,
      2003**





We
      discuss our results of operations by separating the impact of our acquisitions
      from the results from our remaining Properties. In comparing our results for
      the
      year ended December 31, 2004 compared to December 31, 2003, the acquisition
      impact relates to the Properties acquired during those two years. Those
      properties and the dates they are first included in our consolidated results
      are
      as follows: Colonial Park Mall, effective March 6, 2003; G&G Blaine, LLC (at
      Northtown Mall), effective April 24, 2003; Eastland North Carolina, effective
      August 14, 2003; WestShore Plaza Mall (“WestShore”), effective August 27, 2003;
      Eastland Ohio, effective December 22, 2003 and Polaris Fashion Place and Polaris
      Towne Center (collectively, the “Polaris Properties”), effective January 5, 2004
      (all collectively, the “Acquistions”). We discuss the various components of our
      results of operations as it relates to our remaining Properties, which are
      included in our consolidated financial results for both periods presented.
      These
      Properties are referred to collectively as “Same Centers” and individually as a
“Same Center” in our analysis.





30


Revenues





Total
      revenues increased 14.5%, or $41.4 million, for the year ended December 31,
      2004. Of the $41.4 million increase, $33.9 million resulted from the acquisition
      of the joint venture interests not previously owned by us and a $21.6 million
      increase from the WestShore and Eastland Ohio acquisitions in 2003. Other
      significant changes in revenue relate to a $818,000 increase in proceeds from
      outparcel sales, reduced termination income of $2.3 million, reductions in
      minimum rent of $2.7 million due to lower occupancy rates and an increase of
      $8.9 million in tenant reimbursement income due to the
      Acquisitions.





*Minimum
      rents*





Minimum
      rents increased 19.4%, or $32.6 million, for the year ended December 31, 2004,
      primarily due to contributions of $37.6 million in additional minimum rents
      as a
      result of the Acquisitions. The Same Center decrease relates to recognition
      of
      approximately $1.9 million of income as a result of the termination of certain
      leases compared to $4.2 million of recognized lease termination income for
      the
      same period in 2003, a reduction of $2.3 million. The remaining Same Center
      decrease relates to a $2.7 million decrease in Same Center minimum rents due
      to
      lower occupancy in 2004.




**Increase
                (Decrease) (dollars in
                millions)****Malls**
            
            ****Community****
              **Center**s
            
            **Total**
            
            ****Percent****
              **Total**Same
                Center
            
            $
            (4.6
            )
            $
            (0.4
            )
            $
            (5.0
            )
            
            (3.0
            )%Acquisitions
            
            
            31.7
            
            
            5.9
            
            
            37.6
            
            
            22.4$
            27.1
            
            $
            5.5
            
            $
            32.6
            
            
            19.4
            %





*Tenant
      reimbursements*





Tenant
      reimbursements reflect an increase of 10.4%, or $8.9 million, for the year
      ended
      December 31, 2004. An increase of $13.6 million is due to the Acquisitions.
      The
      decrease in Same Center reimbursements is due to a $4.5 million decrease in
      recoverable expenses at the Malls and reduced recovery rates in 2004 for the
      Community Centers.




**Increase
                (Decrease) (dollars in millions)****Malls**
            
            ****Community****
              **Center**s
            
            **Total**
            
            ****Percent****
              **Total**Same
                Center
            
            $
            (4.5
            )
            $
            (0.2
            )
            $
            (4.7
            )
            
            (5.5
            )%Acquisitions
            
            
            12.5
            
            
            1.1
            
            
            13.6
            
            
            15.9$
            8.0
            
            $
            0.9
            
            $
            8.9
            
            
            10.4
            %





*Other
      revenues*





The
      $576,000 increase in other revenues is a result of a $3.5 million increase
      in
      licensing agreement income, an $818,000 increase in funds received from the
      sale
      of outparcels and a $280,000 increase in gift card income. The increase was
      partially offset by a $2.1 million reduction in management fee income resulting
      from our acquisition of joint venture interests not previously owned by us
      and
      decreases in marketing income and other miscellaneous items.





Expenses





Total
      expenses increased 12.5%, or $23.3 million, for the year ended December 31,
      2004. Real estate taxes and property operating expenses increased $8.7 million,
      the provision for doubtful accounts decreased $1.6 million, other operating
      expenses increased $46,000, depreciation and amortization increased $11.7
      million and general and administrative expenses increased $4.4
      million.





31


*Real
      estate taxes and property operating expenses*





Real
      estate taxes and property operating expenses increased 8.8%, or $8.7 million,
      for the year ended December 31, 2004. The increase is due primarily to the
      Acquisitions, which was partially offset by the Same Center decrease that
      resulted from the Company’s cost reduction efforts relating to CAM expenses.
      This program was commenced in the second half of 2003 and was fully implemented
      in August 2004 with the primary savings resulting from bringing housekeeping
      and
      security services in-house.




**Increase
                (Decrease) (dollars in
                millions)****Malls**
            
            
            **Community**
              **Centers**
            
            **Total**
            
            **Percent**
              **Total**Same
                Center
            
            $
            (5.8
            )
            $
            0.1
            
            $
            (5.7
            )
            
            (5.8
            )%Acquisitions
            
            
            13.3
            
            
            1.1
            
            
            14.4
            
            
            14.6$
            7.5
            
            $
            1.2
            
            $
            8.7
            
            
            8.8
            %





*Provision
      for doubtful accounts*





The
      provision for doubtful accounts was $5.4 million for the year ended December
      31,
      2004 and $7.0 million for 2003. The provision represented 1.6% of revenues
      in
      2004 and 2.5% of revenues in 2003. The decrease in 2004 related to specific
      tenant bankruptcies and other credit issues in 2003.





*Depreciation
      and Amortization*





The
      $11.7
      million increase in depreciation and amortization primarily consists of $9.2
      million from the acquisition of Properties that were previously reflected as
      joint ventures and a $4.2 million increase from the WestShore and Eastland
      Ohio
      acquisitions partially offset by a decrease across the Same Center
      portfolio.





*General
      and Administrative*





General
      and administrative expense was $14.3 million and represented 4.4% of total
      revenues for the year ended December 31, 2004 compared to $9.9 million and
      3.5%
      of total revenues for 2003. The increase is primarily due to wage increases
      that
      became effective April 1, 2004, higher accrued bonus costs in 2004 (as the
      Company met bonus targets for 2004, but did not meet bonus targets in 2003),
      higher professional services fees associated with corporate governance
      initiatives and increases in employee benefit expenses.





Interest
      expense/capitalized interest





Interest
      expense increased 13.9%, or $10.9 million, for the year ended December 31,
      2004.
      The summary below identifies the increase by its various components (dollars
      in
      thousands).




**Year
                Ended December
                31,****2004**
            
            **2003**
            
            **Inc.
                (Dec.)**Average
                loan balance
            
            $
            1,393,894
            
            $
            1,125,601
            
            $
            268,293Average
                rate
            
            
            6.08
            %
            
            6.59
            %
            
            (0.51
            )%Total
                interest
            
            $
            84,749
            
            $
            74,177
            
            $
            10,572Amortization
                of loan fees
            
            
            4,239
            
            
            4,595
            
            
            (356
            )Capitalized
                interest and other expense, net
            
            
            291
            
            
            (388
            )
            
            679Interest
                expense
            
            $
            89,279
            
            $
            78,384
            
            $
            10,895





Equity
      in income of unconsolidated entities, net





The
      $2.5
      million decrease is the result of the Company consolidating our joint venture
      interests throughout 2003 and fully in early 2004.





32


Discontinued
      Operations





During
      2004, we sold twenty-nine Community Centers for $113.3 million and reflected
      one
      Community Center as held for sale. We reported a net gain of $19.6 million
      associated with the sale of these Community Centers, which, in accordance with
      SFAS No. 144, is reported in discontinued operations. During 2003, we sold
      five
      Community Centers for $18.6 million and reflected two other Community Centers
      as
      held for sale. We recorded a net gain on the sale of discontinued operations
      of
      $703,000 and an impairment loss of $2.5 million. Total revenues for discontinued
      operations were $28.2 million and $32.7 million for the years ended December
      31,
      2004 and 2003, 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.





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 the
      credit facility, construction financing, long-term mortgage debt, contributions
      from our strategic joint venture partnership, issuance of preferred and common
      shares of beneficial interest and proceeds from the sale of assets will provide
      sufficient capital resources to carry out our business strategy relative to
      the
      acquisitions, renovations, expansions and developments.





At
      December 31, 2005, our total-debt-to-total-market capitalization was 56.1%
      compared to 52.0% at December 31, 2004. We are working to maintain this ratio
      in
      the mid-fifty percent range. We expect to utilize the proceeds from future
      asset
      sales to reduce debt and, to the extent that market capitalization remains
      in
      the current 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).




**Dec.
                31,
                2005**
            
            **Dec.
                31,
                2004**Stock
                Price (end of period)
            
            $
            24.32
            
            $
            27.71Market
                Capitalization Ratio:Common
                Shares outstanding
            
            
            36,506
            
            
            35,683OP
                Units outstanding
            
            
            3,115
            
            
            3,474Total
                Common Shares and OP Units outstanding at end of period
            
            
            39,621
            
            
            39,157Market
                capitalization - Common Shares outstanding
            
            $
            887,826
            
            $
            988,776Market
                capitalization - OP Units outstanding
            
            
            75,757
            
            
            96,264Market
                capitalization - Preferred Shares
            
            
            210,000
            
            
            210,000Total
                debt (end of period)
            
            
            1,501,481
            
            
            1,402,604Total
                market capitalization
            
            $
            2,675,064
            
            $
            2,697,644Total
                debt / total market capitalization
            
            
            56.1
            %
            
            52.0
            %





Capital **** Resource
      Availability





In
      December 2005, we formed a joint venture (the “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 initial acquisition of the
      Venture was the $170.1 million purchase of Puente. We have a 52% interest in
      the
      Venture and ORC has a 48% interest, but GPLP will be entitled to certain
      financial promotes provided that ORC earns a specified rate of
      return. **** As part
      of the Venture, ORC intends to seek approval from its board of directors for
      it
      to commit up to $200 million for acquisitions of certain other mall and anchored
      lifestyle retail properties that GPLP offers to the Venture. The properties
      to
      be acquired by the Venture will be operated by Glimcher under separate
      management agreements. 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.





33


We
      modified our former secured line of credit (“Prior Credit Facility”) to increase
      the borrowing availability from $150 million to $300 million and to convert
      it
      from a secured facility to an unsecured facility (“Amended Credit Facility”)
      that matures in August 2008 with a one-year extension option available to the
      Company. The Amended Credit Facility is expandable to $400 million, subject
      to
      certain conditions, and the interest rate ranges from LIBOR plus 1.05% to LIBOR
      plus 1.55% depending upon our ratio of debt to total asset value.





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 Ending December 31, 2005*





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





Net
      cash
      used by investing activities was $122.5 million for the year ended December
      31,
      2005. During 2005, we spent $95.9 million towards our investment in real estate.
      Of this amount, $63.9 million was spent on constructing additional GLA and
      interior renovations, primarily at Eastland Ohio, The Mall at Fairfield Commons,
      The Dayton Mall, Montgomery Mall, Lloyd Center, Northtown Mall, The Great Mall
      of the Great Plains and the purchase of vacant anchor space at Polaris Fashion
      Place. We also spent $12.8 million on tenant improvements and allowances to
      re-tenant existing space. Lastly, we spent $7.7 million associated with the
      acquisition of land in connection with the development of an anchored retail
      project to serve the Cincinnati, Ohio market (“City Park development”). The
      remaining amounts were spent on operational capital expenditures. We also spent
      $44.2 million in connection with our investment, through the Venture, in Puente.
      Offsetting these capital outlays, we received $23.6 million in proceeds from
      the
      sale of Southside Mall, ($13.0 million) the former Lord & Taylor anchor
      space at Polaris Fashion Place ($5.3 million) and the sale of 5 Community
      Centers ($5.3 million). We also received $3.0 million from the sale of
      outparcels.





Net
      cash
      provided by financing activities was $13.5 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 Amended 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 distributions.





*For
      the Year Ending December 31, 2004*





Net
      cash
      provided by operating activities was $102.3 million for the twelve months ended
      December 31, 2004.





34


Net
      cash
      provided by investing activities was $36.2 million for the twelve months ended
      December 31, 2004. The primary uses were the investments in real estate of
      $72.7
      million. These real estate investments were for development and redevelopment
      activities of $12.7 million, property capital expenditures of $16.2 million
      and
      the cash portion of the purchase price related to the Polaris Properties of
      $42.9 million. Additionally, we received proceeds of $106.8 million from the
      sale of twenty-nine Community Centers and $2.7 million from the sale of
      outparcels.





Net
      cash
      used in financing activities was $141.1 million for the twelve months ended
      December 31, 2004. Proceeds were received from the issuance of $150 million
      of
      the Series G Preferred Shares, which totaled a net amount of $144.8 million.
      This amount was offset by the redemption of the Series B Preferred Shares
      totaling $128.0 million. We received $231.5 million from the issuance of
      mortgage notes payable. In the first quarter of 2004, we received $36.5 million
      in loan proceeds that was used to fund the acquisition of the remaining joint
      venture interest in Polaris Fashion Place not previously owned by the Company
      (the “Polaris acquisition”). During the second quarter of 2004, we refinanced
      Jersey Gardens Mall with a $165.0 million permanent mortgage loan and refinanced
      The Great Mall of the Great Plains with a $30.0 million two-year bridge
      facility. Cash used to repay mortgage notes payable was $303.4 million, of
      which
      $292.7 million related to repayment of the previous debt on Jersey Gardens
      Mall,
      The Great Mall of the Great Plains, River Valley Mall and a bridge facility
      associated with the Polaris acquisition. The remainder of the repayment amount
      relates to scheduled debt amortizations of $17.2 million. We also paid $89.2
      million in dividend distributions.





*For
      the Year Ending December 31, 2003*





Net
      cash
      provided by operating activities was $98.9 million for the twelve months ended
      December 31, 2003.





Net
      cash
      used by investing activities was $200.2 million for the year ended December
      31,
      2003. The primary investments were the investments in real estate of $218.9
      million for the acquisitions of WestShore Plaza and Eastland Ohio. Also
      reflected are the purchases of joint venture interests not previously owned
      in
      Colonial Park Mall, Eastland North Carolina and G&G Blaine (at Northtown
      Mall). Additionally, we received $24.0 million from the sale of certain
      Community Centers and $2.5 million for the sale of outparcels.





Net
      cash
      provided from financing activities was $101.1 million for the year ended
      December 31, 2003. Proceeds received from the issuance of new mortgages were
      $383 million. The mortgages primarily relate to acquisitions of WestShore Plaza
      and Eastland Ohio as well as proceeds received from the issuance of a mortgage
      on The Mall at Fairfield Commons and Lloyd Center. Principal payments on
      mortgages totaled $205.3 million. These payments reflect satisfaction of
      mortgages at Lloyd Center, which was later refinanced, Northtown Mall and
      various bridge loans. Also, we received $57.5 million from the issuance of
      Series F Preferred Shares. Lastly, we paid $83.4 million in distributions.





Financing
      Activity





Total
      debt increased by $98.9 million during 2005. The change in outstanding
      borrowings is summarized as follows (in thousands):




**Mortgage**
              **Notes**
            
            **Notes**
              **Payable**
            
            **Total**
              **Debt**December
                31, 2004
            
            $
            1,328,604
            
            $
            74,000
            
            $
            1,402,604New
                mortgage debt
            
            
            111,669
            
            
            -
            
            
            111,669Repayment
                of debt
            
            
            (70,481
            )
            
            -
            
            
            (70,481
            )Debt
                amortization payments in 2005
            
            
            (17,883
            )
            
            -
            
            
            (17,883
            )Amortization
                of fair value adjustment
            
            
            (428
            )
            
            -
            
            
            (428
            )Net
                borrowings, line of credit
            
            
            -
            
            
            76,000
            
            
            76,000December
                31, 2005
            
            $
            1,351,481
            
            $
            150,000
            
            $
            1,501,481




35


During
      2005, we entered into two new financing arrangements and modified three existing
      arrangements. On July 15, 2005, we entered into an
      agreement under which we may borrow from time to time up to an additional $6
      million, on the redevelopment loan for our Eastland Ohio property until January
      1, 2007, its maturity date. Our obligation to repay the loan is evidenced
      by **** a  promissory
      note secured
      by a first mortgage lien on Eastland Ohio .
      This
      new loan increases the total loan availability for our Eastland Ohio
      redevelopment financing from $36 million to $42 million. This loan bears
      interest at LIBOR plus 2.00% per annum. We are required to make interest only
      payments, but prepayments of principal are permitted without penalty.
      O n
      July
      22, 2005, we extended the maturity date on our $7.7 million East Pointe Plaza
      mortgage loan from August 1, 2005 to August 1, 2006. On August 1, 2005, we
      entered into a $44 million promissory note secured by a first mortgage lien
      on
      Montgomery Mall in Montgomery, Alabama. The new mortgage loan matures on August
      1, 2006 and bears interest at a variable rate of LIBOR plus 1.85% per annum.
      A
      loan agreement was modified on January 13, 2006 reducing the interest rate
      to
      LIBOR plus 1.65% per annum. We are required to make interest only payments,
      but
      prepayments of principal are permitted without penalty. The loan features two
      remaining options under which we may select to extend the loan for an additional
      six months. The proceeds of the loan were used to pay off $43.9 million of
      fixed
      rate mortgage notes on Montgomery Mall. As a condition of the loan agreement,
      we
      paid down the outstanding balance to $25 million upon closing on our Amended
      Credit Facility. On December 15, 2005, we executed a loan agreement to borrow
      $50 million (the “Loan”). The Loan is represented by a promissory note secured
      by a first mortgage lien and assignment of leases and rents on our River Valley
      Mall located in Lancaster, Ohio. T he
      Loan
      has a fixed interest
      rate of 5.65% per annum and a maturity date of January 11, 2016. Under the
      Loan,
      we are required to make interest only periodic payments for the first three
      years of the Loan’s term and then, beginning in January 2009, payments of
      interest and principal. We are not permitted under the Loan to make any
      prepayments on outstanding principal.





At
      December 31, 2005, our mortgage notes payable were collateralized with first
      mortgage liens on 25 Properties having a net book value of $1,684.2 million.
      We
      also owned 10 unencumbered Properties and other corporate assets having a net
      book value of $129.2 million at that date.





Certain
      of our loans have multiple Properties as collateral for such loans and have
      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 cross-collateralized loans and could lead
      to acceleration of the indebtedness on all Properties under such loan.
      Properties which are subject to cross-default provisions have a total net book
      value of $81.8 million and represent one Community Center and three Malls.
      Properties under such cross-default provisions relate to i) the Morgantown
      Mall
      Associates LP loan representing two Properties with a net book value of $42.4
      million and ii) the SAN Mall LP loan representing two Properties with a net
      book
      value of $39.4 million.





*Contractual
      Obligations and Commercial Commitments*





Contractual
      Obligations





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, 2005, we had the following obligations relating to dividend
      distributions. In the fourth quarter of 2005, the Company declared distributions
      of $0.4808 per Common Share ($17.6 million) to be paid during the first quarter
      of 2006. 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 $15.2 million and $41.4 million, respectively.





Capital
      lease obligations are for security equipment, phone systems and generators
      at
      the 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 system, office equipment, computer equipment and
      other miscellaneous items. The obligation for these leases at December 31,
      2005
      was $5.0 million.





36


At
      December 31, 2005, there were 3.1 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, 2005 is $80.2 million based upon a per unit value
      of
      $25.74 at December 31, 2005, (based upon a five-day average of the Common Stock
      price from December 22, 2005 to December 29, 2005).





At
      December 31, 2005, we had executed leases committing to $19.3 million in tenant
      allowances. The leases will generate gross rents, which approximate $74.0
      million over the original lease term.





Commercial
      Commitments





The
      Amended Credit Facility terms are discussed in Note 6 to the consolidated
      financial statements.





We
      have
      standby letters of credits for utility deposits ($150,000), a mortgage guarantee
      for The Mall at Fairfield Commons (“MFC”) ($4.0 million), certain tenant and
      capital improvements ($420,000) and a rate lock fee for River Valley Mall
      (“RVM”) ($500,000). These letters of credit will be released upon completion of
      specific requirements by the Company for certain tenants. We expect the tenants
      to meet the requirements and do not anticipate any payment to be required on
      these letters of credit.





The
      following table shows the Company’s contractual and commercial obligations as of
      December 31, 2005 and the scheduled maturities of these obligations (in
      thousands):




**Contractual
              Obligations**
            
            **Total**
            
            **2006**
            
            **2007-2008**
            
            **2009-2010**
            
            **Thereafter**Long-term
                Debt (includes interest payments)
            
            $
            1,840,456
            
            $
            179,987
            
            $
            391,356
            
            $
            269,741
            
            $
            999,372Distribution
                Obligations
            
            
            75,644
            
            
            36,488
            
            
            34,350
            
            
            4,806
            
            
            -OP
                Unit Redemptions
            
            
            80,193
            
            
            80,193
            
            
            -
            
            
            -
            
            
            -Lease
                Obligations
            
            
            5,020
            
            
            2,260
            
            
            2,274
            
            
            486
            
            
            -Tenant
                Allowances
            
            
            19,275
            
            
            19,275
            
            
            -
            
            
            -
            
            
            -Other
                Obligations
            
            
            6,154
            
            
            6,154
            
            
            -
            
            
            -
            
            
            -Total
                Contractual Obligations
            
            $
            2,026,742
            
            $
            324,357
            
            $
            427,980
            
            $
            275,033
            
            $
            999,372




**Commercial
              Obligations**
            
            **Total**
            
            **2006**
            
            **2007-2008**Line
                of Credit
            
            $
            150,000
            
            $
            -
            
            $
            150,000Standby
                Letters of Credit
            
            
            5,070
            
            
            5,070
            
            
            -Guarantees
            
            
            89
            
            
            89
            
            
            -Total
                Commercial Obligations
            
            $
            155,159
            
            $
            5,159
            
            $
            150,000




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 lots, 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.





37


We
      invested approximately $55 million in redevelopment activity in 2005. These
      projects focused primarily on eight Malls. In addition, we invested $17 million
      in property capital expenditures for both operational needs and tenant
      improvements and $9 million in renovations.





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 Venture with 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
      Venture was the $170.1 million purchase of Puente. We have a 52% interest in
      the
      Venture and ORC has a 48% interest, but GPLP will be entitled to certain
      financial promotes provided that ORC earns a specified rate of
      return. **** In
      connection with the acquisition, the Venture assumed an $88.8 million
      non-recourse mortgage loan, with the remainder of the purchase price being
      funded by contributions to the Venture from us and ORC.





In
      addition to our acquisition of Puente through the Venture, we also acquired
      Tulsa Promenade on January 17, 2006. Tulsa Promenade 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
      Amended Credit Facility.





**Expansion,
      Renovation and Development Activity**





We
      continue to be active in expansion, renovation and development activities.
      Our
      business strategy is to grow the Company’s assets, net income and cash flow to,
      among other things, provide for dividend requirements and to preserve, maintain
      and expand value for shareholders.





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*





Mall
      store occupancy (for our wholly-owned Malls) increased to 89.5% at December
      31,
      2005 from 88.5% at December 31, 2004. We believe that Mall store occupancy
      improvements were driven primarily by our improvements in the in-line stores.
      These improvements were partially offset by the decline in occupancy of our
      outparcel stores at the Malls. Anchor store occupancy (for our wholly-owned
      Malls) increased to 95.2% at December 31, 2005 from 93.7% at December 31, 2004.
      Mall anchor occupancy improvements relate to new anchor store openings of
      254,291 square feet in 2005 for space that was vacant as of December 31, 2004.
      In addition to the openings, a 170,871 square foot vacant anchor store was
      demolished to make room for a new store to be built and opened in 2006. These
      improvements in anchor store occupancy were partially offset by new closings
      of
      276,989 square feet in 2005. New openings included two new Steve and Barry’s
      stores at The Great Mall of the Great Plains and Morgantown Mall, Kohl’s at New
      Towne Mall and Burlington Coat Factory at Northtown Mall. Anchor store closings
      included Linens & Things at The Great Mall of the Great Plains, Toys R Us at
      Lloyd Center, JCPenney at Montgomery Mall and Office Max at Northwest
      Mall.





We
      have
      plans to add a lifestyle retail component to The Dayton Mall located in Dayton,
      Ohio, further enhancing the strong market share already enjoyed by this
      Property. The Dayton Mall project will include façade renovation and the
      addition of 97,000 square feet in an open-air center.




38


Eastland
      Ohio, located in Columbus, Ohio, was acquired in December 2003 with
      redevelopment plans existing at the time of the acquisition. The expansion
      at
      this Mall includes the addition of a 120,000 square foot Kaufmann’s anchor
      store, approximately 30,000 square feet of outward facing retail, interior
      renovations (including a children’s soft play area) and new in-line tenants. We
      have installed additional amenities, including a state-of-the-art security
      system, comfortable seating and carpeted areas that will enhance the shopping
      experience. The new Kaufmann’s store opened in October 2005.





The
      Polaris Fashion Place redevelopment project, located in Columbus, Ohio, centers
      around a replacement anchor for the parcel and building vacated by Lord &
Taylor (the “Lord & Taylor parcel”). On May 16, 2005, we purchased the Lord
& Taylor parcel from The May Department Stores Company. On July 20, 2005, we
      sold the Lord & Taylor parcel to Von Maur, Inc., an Iowa-based fashion
      specialty retailer (“Von Maur”). Von Maur opened their first Ohio store in the
      140,000 square foot anchor space during the fourth quarter of 2005. In addition,
      we constructed a new approximately 9,450 square foot multi-tenant building.
      Leasing of this multi-tenant building is complete and some of these tenants
      opened in December 2005 and January 2006.





Redevelopment
      work is in process at Northtown Mall in Blaine, Minnesota. The expansion project
      includes tripling the size of the food court, installing new exterior signage,
      adding a new 10,000 square foot freestanding building and demolishing a vacant
      anchor space to be replaced with a new anchor store. The food court renovations
      and the exterior signage have been completed. Leasing of the new 10,000 square
      foot building is complete and all of the tenants opened during the third and
      fourth quarters of 2005. The vacant anchor has been demolished and site
      preparation is underway to prepare for the new anchor store.





Construction
      of 22,000 square feet of new freestanding retail GLA at Grand Central Mall
      in
      Parkersburg, West Virginia was completed in 2005. The new building replaced
      a
      vacant obsolete structure of 43,000 square feet that had previously been
      demolished. The new space includes an Old Navy, Panera Bread and planned
      additions of retail or restaurant tenants.





The
      Venture plans on making a $10 million interior renovation at Puente, which
      will
      include new flooring, updated lighting, refurbished and expanded food court,
      children’s soft play area and new vertical transportation. These renovations are
      planned for completion in 2006.





Developments





One
      of
      our objectives is to increase our portfolio 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.





On
      April
      7, 2005, we closed on the purchase of two parcels of land located in Mason,
      Ohio, consisting of approximately 78.2 acres for a purchase price of $7.7
      million (the “Mason Parcels”). This land was purchased in connection with the
      City Park development. On May 31, 2005, we sold one of the parcels making up
      the
      Mason Parcels that consists of 9.154 acres for a price of $1.0 million.
      Additionally, in connection with the City Park development, we currently have
      an
      option to purchase an undivided one-half (1/2) interest in a parcel of land
      consisting of approximately 65.8 acres located in Mason, Ohio.





**Portfolio
      Data**





The
      table
      below reflects sales per square foot (“Sales PSF”) for those tenants reporting
      sales for the twelve-month period ended December 31, 2005. The percentage change
      is based on those tenants reporting sales for the twenty-four month period
      ended
      December 31, 2005.




**Mall
                Properties****Property
              Type******
            
            **Average
                Sales
                PSF**
            
            **Same
                Store %Change**Anchors
            
            
            $162
            
            
            (3.5)%Stores
                (1)
            
            
            $334
            
            
            1.1%Total
            
            
            $245
            
            
            (0.5)%






(1)
                Stores
                    Sales per PSF exclude outparcel sales and specialty
                    leasing.




39


As
      we
      continue to upgrade our tenant mix, we believe the regional mall portfolio
      will
      deliver solid performance in the areas of sales productivity and rents. Average
      mall store sales for the 12 months ended December 31, 2005 were $334 dollars
      per
      square foot, a 3.4% improvement from the $323 dollars per square foot reported
      for the twelve months ended December 31, 2004. Comparable stores sales, which
      include only those stores open for the twelve months ended December 31, 2005
      and
      the same period of 2004, increased 1.1%.





Portfolio
      occupancy statistics by property type are summarized below:





**Occupancy
                (1)
                (2)****12/31/05**
            
            **9/30/05**
            
            **6/30/05**
            
            **3/31/05**
            
            **12/31/04**Reported
                Occupancy:Mall
                Anchors
            95.2%
            
            92.6%
            
            91.3%
            
            91.3%
            
            93.7%Mall
                Stores
            89.5%
            
            87.5%
            
            88.0%
            
            87.6%
            
            88.5%Total
                Mall Portfolio
            93.2%
            
            90.8%
            
            90.1%
            
            90.0%
            
            91.8%Community
                Center Anchors
            75.0%
            
            63.9%
            
            63.8%
            
            63.8%
            
            67.9%Community
                Center Stores
            78.6%
            
            64.8%
            
            63.7%
            
            65.3%
            
            66.6%Total
                Community Center Portfolio
            75.8%
            
            64.1%
            
            63.8%
            
            64.2%
            
            67.6%Comparable
                Occupancy (3):Comparable
                Mall Portfolio
            93.2%
            
            
            
            
            
            
            
            92.2%Comparable
                  Community CenterPortfolio
            75.8%
            
            
            
            
            
            
            
            80.8%




(1)
            Occupancy
                statistics included in the above table are based on the total Company
                portfolio which excludes our Property held in a joint
                venture.


(2)
            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.


(3)
            Comparable
                occupancy rates exclude the properties sold in 2005 from the 2004
                occupancy calculation.





**Information
      Technology**





We
      implemented the first phase of our commercial management system upgrade in
      August 2004. This first phase focused on replacing the former commercial
      management system and related Microsoft Access databases with Intuit Real Estate
      Solution’s commercial management system. The new software is used for lease
      accounting, tenant’s sales, accounts receivables, collections and cash
      processing. The second phase, which was the implementation of the recoveries
      module and the straight-line rent calculation, was completed in the second
      quarter of 2005. The recoveries module is used for calculating and billing
      the
      tenants’ share of CAM, real estate taxes and insurance.





**Accounting
      Pronouncements**





In
      December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      123(R), to expand and clarify SFAS No. 123, “Accounting for Stock-Based
      Compensation,” in several areas. The Statement 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
      recognized over the requisite service period (usually the vesting period) for
      the estimated number of instruments where service is expected to be rendered.
      This Statement is effective beginning in the first quarter of 2006 for all
      unvested awards. Since we previously adopted the provisions of expensing
      stock-based compensation using the fair value based method of accounting as
      permitted under SFAS No. 123 (see Note 2 to our consolidated financial
      statements), we do not expect our financial statements will be materially
      impacted by SFAS No. 123(R).





In
      December 2004, The FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets”.
      The issue addresses the accounting for nonmonetary exchanges as an area in
      which
      the U.S. standard could be improved by eliminating certain differences between
      the measurement guidance in Opinion 29 and that in International Accounting
      Standard (“IAS”) No. 16, “Property, Plant and Equipment”, and IAS No. 38,
“Intangible Assets”. The provisions of this Statement are effective for
      nonmonetary asset exchanges occurring in fiscal periods beginning after June
      15,
      2005. The provisions of this Statement are applied prospectively. We do not
      expect our financial statements will be materially impacted by SFAS No. 153.





40


In
      September 2005, the Emerging Issues Task Force (“EITF”) issued Issue 04-05,
“Investor’s Accounting for an Investment in a Limited Partnership When the
      Investor is the Sole General Partner and the Limited Partners Have Certain
      Rights”, (“EITF 04-05”). At issue is what rights held by the limited partner(s)
      preclude consolidation in circumstances in which the sole general partner would
      consolidate the limited partnership in accordance with GAAP. The assessment
      of
      limited partners’ rights and their impact on the presumption of control of the
      limited partnership by the sole general partner should be made when an investor
      becomes the sole general partner and should be reassessed if (i) there is a
      change to the terms or in the exercisability of the rights of the limited
      partners, (ii) the sole general partner increases or decreases its ownership
      of
      limited partnership interests, or (iii) there is an increase or decrease in
      the
      number of outstanding limited partnership interests. This issue is effective
      no
      later than for fiscal years beginning after December 15, 2005 and as of June
      29,
      2005 for new or modified arrangements. The impact of adopting EITF 04-05 is
      not
      expected to have a material impact on our financial position or 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, 2005, approximately 82.8% of our debt,
      after
      giving effect to interest rate protection agreements, bore interest at fixed
      rates with weighted-average maturity of 6.7 years and a weighted-average
      interest rate of approximately 6.35%. At December 31, 2004 approximately 89.7%
      of our debt, after giving effect to interest rate protection agreements, bore
      interest at fixed rates with weighted-average maturity of 6.9 years, and a
      weighted-average interest rate of approximately 6.41%. The remainder of our
      debt
      at December 31, 2005 and December 31, 2004, bears interest at variable rates
      with weighted-average interest rates of approximately 5.96% and 4.34%,
      respectively.





At
      December 31, 2005 and December 31, 2004, the fair value of our debt (excluding
      our Amended Credit Facility) was $1,358.7 million and $1,353.6 million,
      respectively, compared to its carrying amounts of $1,351.5 million and $1,328.6
      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,
      2005 and 2004, a 100 basis points increase in the market rates of interest
      would
      decrease future earnings and cash flows by $2.5 million and $1.4 million,
      respectively for the year. Also, the fair value of debt would decrease by
      approximately $36.7 million and $43.3 million, at December 31, 2005 and December
      31, 2004. A 100 basis points decrease in the market rates of interest would
      increase future earnings and cash flows by $2.5 million and $1.4 million, for
      the year ended December 31, 2005 and 2004, respectively, and increase the fair
      value of debt by approximately $39.1 million and $46.3 million, at December
      31,
      2005 and December 31, 2004. We have entered into certain cap agreements which
      impact this analysis at certain LIBOR rate levels (see Note 5 to the
      consolidated financial statements).





**Item
      8.****Financial
      Statements and Supplementary Data**





The
      consolidated financial statements and financial statement schedules of GRT
      and
      the Report of 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**





Information
      regarding Changes In and Disagreements with Accountants on Accounting and
      Financial Disclosure is incorporated by reference to the Registrant’s definitive
      proxy statement to be filed with the SEC within 120 days after the year-end
      of
      the year covered by this Form 10-K with respect to the 2006 Annual Meeting
      of
      Shareholder’s to be held on May 5, 2006 (the “Annual Meeting”).





41


**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
      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, 2005, 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, 2005, 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, audited
      management’s assessment and independently 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





**R** **eport
      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 management's assessment, included in the accompanying “Management’s
      Report on Internal Control over Financial Reporting” *,* that
      Glimcher Realty Trust maintained effective internal control over financial
      reporting as of December 31, 2005, based on criteria established in Internal
      Control—Integrated Framework issued by the Committee of Sponsoring Organizations
      of the Treadway Commission (COSO). ** 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. Our responsibility is to express
      an
      opinion on management's assessment and an opinion on the effectiveness of 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, evaluating management's assessment, testing and evaluating
      the design and operating effectiveness of internal control, and 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, management's assessment that Glimcher Realty Trust maintained effective
      internal control over financial reporting as of December 31, 2005, is fairly
      stated, in all material respects, based on criteria established in Internal
      Control—Integrated Framework issued by the Committee of Sponsoring Organizations
      of the Treadway Commission (COSO). ** Also
      in
      our opinion, Glimcher Realty Trust maintained, in all material respects,
      effective internal control over financial reporting as of December 31, 2005,
      based on criteria
      established in *Internal Control—Integrated Framework* issued
      by the Committee of
      Sponsoring Organizations of the Treadway Commission (COSO).





We
      have
      also 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, 2005 and December
      31,
      2004 and the related consolidated statements of income and comprehensive income,
      shareholders’ equity, and cash flows for each of the three years ending December
      31, 2005 ** of
      Glimcher Realty Trust and our report dated February 22, 2006 ** expressed
      an unqualified opinion ** on
      those
      consolidated financial statements.




Chicago,
                Illinois
              February
                22, 2006
            /s/
              BDO Seidman, LLP




43
 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.


**Item
      9B.  Other Information**





None





**PART
      III**





**Item
      10.****Trustees and Executive Officers of the Registrant**




Information
      regarding trustees, board committee members and 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 year-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 year-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,
      2005 is as follows:




**Equity
                Compensation Plan Information**Plan
                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 remaining
              available
                for future issuance
              underequity
                compensation
              plans(excluding
                securities
              reflected
                in column(a))(a)
            (b)
            (c)Equity
                compensation plans
              approved
                by shareholders
            1,948,098
            $20.88
            850,499Equity
                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
      year-end of the year covered by this Form 10-K with respect to the Annual
      Meeting.





44


**Item
      13.****Certain Relationships and Related Transactions**




Information
      regarding certain relationships and related transactions 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 year-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 year end of the year covered by this Form 10-K with
      respect to the Annual Meeting.





**Item
      15.****Exhibits and Financial Statements**




(a)
            (1)
            Financial
              Statements
            Page
                Number-
                Report of Independent Registered Public Accounting
                Firm
            53-
                Glimcher Realty Trust Consolidated Balance Sheets as ofDecember
                31, 2005 and 2004
            54-
                Glimcher Realty Trust Consolidated Statements of Income and Comprehensive
                Income
              for
                the years ended December 31, 2005, 2004 and 2003
            55-
                Glimcher Realty Trust Consolidated Statements of Shareholders’ Equity for
                the years
              ended
                December 31, 2005, 2004 and 2003
            56-
                Glimcher Realty Trust Consolidated Statements of Cash Flows for the
                years
                ended
              December
                31, 2005, 2004 and 2003
            57- Notes
                to Consolidated Financial Statements
            58(2)
            Financial
              Statement Schedules-
                Schedule III - Real Estate and Accumulated
                Depreciation
            82- Notes
                to Schedule III
            86(3)
            Exhibits




3.1
            Amended
                and Restated Declaration of Trust of Glimcher Realty Trust.
                (1)3.2
            Bylaws,
                as amended. (1)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. 5 to Limited Partnership Agreement of Glimcher Properties Limited
                Partnership. (3)3.11
            Amendment
                No. 6 to Limited Partnership Agreement of Glimcher Properties Limited
                Partnership. (3)3.12
            Amendment
                No. 7 to Limited Partnership Agreement of Glimcher Properties Limited
                Partnership dated August 7, 2003. (8)3.13
            Amendment
                No. 8 to Limited Partnership agreement of Glimcher Properties Limited
                Partnership. (10)3.14
            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)3.15
            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)




45


4.2
            Specimen
                Certificate for evidencing 8.75% Series F Cumulative Redeemable Preferred
                Shares of Beneficial Interest. (15)4.3
            Specimen
                Certificate evidencing 8.125% Series G Cumulative Redeemable Preferred
                Shares of Beneficial Interest. (16)10.01
            Glimcher
                Realty Trust 1993 Employee Share Option Plan. (1)10.02
            Glimcher
                Realty Trust 1993 Trustee Share Option Plan. (1)10.03
            Glimcher
                Realty Trust 1997 Incentive Plan. (3)10.04
            Glimcher
                Realty Trust 2004 Incentive Compensation Plan. (17)10.05
            Exhibit
                A to Glimcher Properties Limited Partnership Agreement, as amended,
                as of
                December 31, 2005.10.06
            Severance
                Benefits Agreement, dated June 11, 1997, by and among Glimcher Realty
                Trust, Glimcher Properties Limited Partnership and Herbert Glimcher.
                (3)10.07
            Severance
                Agreement and Release of All Claims between William G. Cornely, Glimcher
                Realty Trust, its affiliated and subsidiary entities, and its
                shareholders, directors, officers, agents, employees, successors
                and
                assigns, dated as of July 1, 2005. (5)10.08
            Severance
                Benefits Agreement dated June 11, 1997, by and among Glimcher Realty
                Trust, Glimcher Properties Limited Partnership and Michael P. Glimcher.
                (3)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
            Severance
                Benefits Agreement, dated May 16, 2005, by and among Glimcher Realty
                Trust, Glimcher Properties Limited Partnership and George “Buck”
                Sappenfield, III. (24)10.15
            Severance
                Benefits Agreement, dated August 17, 2005, by and among Glimcher
                Realty
                Trust, Glimcher Properties Limited Partnership and Robert F. Beffa.
                (25)10.16
            Offer
                Letter of Employment to Marshall A. Loeb, dated April 26, 2005.
                (23)10.17
            Offer
                Letter of Employment to George “Buck” Sappenfield, III, dated May 9, 2005.
                (24)10.18
            Offer
                Letter of Employment to Robert Beffa, dated June 29, 2005.
                (5)10.19
            Promissory
                Note dated as of December 17, 1997, issued by Glimcher University
                Mall
                Limited Partnership in the amount of sixty four million eight hundred
                ninety eight thousand five hundred forty six dollars ($64,898,546).
                (7)10.20
            Mortgage,
                assignment of rents, security agreement and fixture filing by Glimcher
                University Mall Limited Partnership to Nomura Asset Capital Corporation
                dated as of December 17, 1997. (7)10.21
            Promissory
                Note, dated as of July 31, 2005, issued by Glimcher Properties, L.P.
                and
                Montgomery Mall Associates, L.P. (each as co-borrower) to the order
                of
                KeyBank National Association in the principal amount of $44,000,000.
                (26)10.22
            Term
                Loan Agreement, dated as of July 31, 2005, between Glimcher Properties,
                L.P. and Montgomery Mall Associates, L.P. (each as co-borrower) and
                KeyBank National Association. (26)10.23
            Amended
                and Restated Mortgage, Assignment of Rents, Security Agreement and
                Fixture
                Filing made by Montgomery Mall Associates, L.P. in favor of KeyBank
                National Association, dated as of July 31, 2005. (26)10.24
            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)10.25
            Deed
                of trust, assignment of leases and rents and security agreement by
                Morgantown Mall Associates Limited Partnership to Michael B. Keller
                (Trustee) for the use and benefit of The Capital Company of America,
                LLC
                dated as of September 1, 1998. (4)10.26
            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)




46


10.27
            Deed
                of Trust and security agreement by Grand Central Limited Partnership
                for
                the benefit of Lehman Brothers Holdings Inc. dated as of January
                21, 1999.
                (18)10.28
            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)10.29
            Deed
                of Trust Security Agreement by Weberstown Mall, LLC for the benefit
                of
                Lehman Brothers Holding Inc. dated as of April 26,1999.
                (19)10.30
            Promissory
                Note dated as of April 26, 1999, issued by Weberstown Mall, LLC in
                the
                amount of twenty million five hundred thousand dollars ($20,500,000).
                (19)10.31
            Open-end
                Mortgage and Security Agreement by Mount Vernon Venture, LLC to Lehman
                Brothers Bank, FSB dated as of January 16, 2001. (6)10.32
            Promissory
                Note dated as of January 16, 2001, issued by Mount Vernon Venture,
                LLC in
                the amount of nine million three hundred thousand dollars ($9,300,000).
                (6)10.33
            Mortgage,
                Assignment of Leases and Rents, Security Agreement, and Fixture Filing
                by
                Glimcher Ashland Venture, LLC to KeyBank National Association dated
                as of
                October 15, 2001. (6)10.34
            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)10.35
            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)10.36
            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)10.37
            Agreement
                of Sale and Purchase and Joint Escrow Instructions, dated October
                5, 2005,
                by and between Glimcher Properties Limited Partnership and Passco
                Colima,
                LLC, Passco PHM, LLC and PHM-1, LLC through PHM-29, LLC (relates to
                Puente Hills Mall acquisition).10.38
            Amendment
                to Agreement of Sale and Purchase and Joint Escrow Instructions,
                dated
                November 4, 2005, by and between Glimcher Properties Limited Partnership
                and Passco Colima, LLC, Passco PHM, LLC and PHM-1, LLC through PHM-29,
                LLC
                (relates to Puente Hills Mall acquisition).10.39
            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).10.40
            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).10.41
            Allonge
                to Promissory Note (relates to loan assumption for Puente Hills Mall
                acquisition).10.42
            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).10.43
            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)10.44
            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)10.45
            Mortgage,
                Assignment of Leases and Rents and Security Agreement by Glimcher
                WestShore, LLC to Morgan Stanley Mortgage Capital Inc. dated as of
                August
                27, 2003. (9)10.46
            Guaranty
                by Glimcher Properties Limited Partnership to Morgan Stanley Mortgage
                Capital, Inc. dated as of August 27, 2003, relating to WestShore
                Plaza
                Mall. (9)10.47
            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). (9)10.48
            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. (9)




47


10.49
            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)10.50
            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)10.51
            Amended
                and Restated Credit Agreement, dated August 22, 2005, by and among
                Glimcher Properties Limited Partnership, KeyBank National Association
                and
                several other financial institutions. (27)10.52
            Guaranty,
                dated August 22, 2005, 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. (27)10.53
            Form
                of Note. (27)10.54
            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)10.55
            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)10.56
            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)10.57
            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)10.58
            Open
                End Mortgage, Assignment of Rents and Security Agreement, dated December
                22, 2003, by EM Columbus, LLC, a Delaware limited liability company,
                to
                The Huntington National Bank, relating to Eastland Ohio.
                (13)10.59
            Note,
                dated December 22, 2003, issued by EM Columbus, LLC, to The Huntington
                National Bank in the amount of $36,000,000, relating to the purchase
                of
                Eastland Ohio. (13)10.60
            Loan
                Commitment Letter, dated December 22, 2003, from The Huntington National
                Bank to EM Columbus, LLC, together with all exhibits thereto, relating
                to
                Eastland Ohio. (13)10.61
            Unconditional
                Guaranty of Payment and Performance, dated December 22, 2003, by
                Glimcher
                Properties Corporation to The Huntington National Bank, relating
                to
                Eastland Ohio. (13)10.62
            Unconditional
                Guaranty of Payment and Performance, dated December 22, 2003, by
                Glimcher
                Properties Limited Partnership to The Huntington National Bank, relating
                to Eastland Ohio. (13)10.63
            Promissory
                Note, dated as of July 15, 2005, issued by EM Columbus, LLC in the
                amount
                of Six Million Dollars ($6,000,000). (26).10.64
            Unconditional
                Guaranty of Payment and Performance, dated July 15, 2005, by Glimcher
                Properties, L.P. to The Huntington National Bank. (26)10.65
            Open-End
                Mortgage Modification of Mortgage and Note, dated July 15, 2005,
                by and
                between EM Columbus, LLC and The Huntington National Bank.
                (26)10.66
            Unconditional
                Guaranty of Payment and Performance, dated July 15, 2005, by Glimcher
                Properties Limited Partnership to The Huntington National Bank.
                (26)10.67
            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)10.68
            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)10.69
            Amended
                and Restated Promissory Note A, between UBS Warburg Real Estate
                Investments Inc. and PFP Columbus, LLC, dated May 22, 2003, for
                $135,000,000, relating to the Polaris Fashion Place existing debt.
                (13)10.70
            Amended
                and Restated Promissory Note B, between UBS Warburg Real Estate
                Investments Inc. and PFP Columbus, LLC, dated May 22, 2003, for
                $24,837,623 relating to the Polaris Fashion Place existing debt.
                (13)10.71
            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)




48


10.72
            Promissory
                Note, dated January 5, 2004, issued by Glimcher Properties Limited
                Partnership to Bank One, NA in the amount of $36,500,000, relating
                to
                Polaris Fashion Place. (13)10.73
            Guaranty
                of Payment by Polaris Mall, LLC to Bank One, NA, dated January 5,
                2004,
                relating to Polaris Fashion Place. (13)10.74
            Pledge
                and Security Agreement of Membership Interest (51.01%), dated January
                5,
                2004, by Glimcher Properties Limited Partnership to Bank One, NA,
                relating
                to Promissory Note for Polaris Fashion Place. (13)10.75
            Pledge
                and Security Agreement of Membership Interest (48.99%) dated January
                5,
                2004, by Glimcher Properties Limited Partnership to Bank One, NA,
                relating
                to Promissory Note for Polaris Fashion Place. (13)10.76
            Negative
                Pledge Agreement dated January 5, 2004, by Glimcher Properties Limited
                Partnership to Bank One, NA, relating to Promissory Note for Polaris
                Fashion Place. (13)10.77
            Loan
                Agreement, dated as of January 5, 2004, between Glimcher Properties
                Limited Partnership and Bank One, NA, relating to Polaris Fashion
                Place.
                (13)10.78
            Loan
                Agreement, dated as of April 1, 2003, between PFP Columbus, LLC,
                as
                borrower, and UBS Warburg Real Estate Investments Inc., as lender.
                (13)10.79
            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)10.80
            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)10.81
            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)10.82
            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)10.83
            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)10.84
            Amended
                and Restated Promissory Note, dated June 9, 2004, between GM Olathe,
                LLC
                and Morgan Stanley Mortgage Capital Inc. in the amount of $30,000,000,
                relating to The Great Mall in Olathe, Kansas. (22)10.85
            Loan
                Agreement dated June 9, 2004, between GM Olathe, LLC and Morgan Stanley
                Mortgage Capital Inc. relating to The Great Mall in Olathe, Kansas.
                (22)10.86
            Amended
                and Restated Fee and Leasehold Mortgage, Assignment of Leases and
                Rents
                and Security Agreement, dated June 9, 2004, between GM Olathe, LLC
                and
                Morgan Stanley Mortgage Capital Inc. in the amount of $30,000,000,
                relating to The Great Mall in Olathe, Kansas. (22)10.87
            Guaranty
                of Payment, dated June 9, 2004, by Glimcher Properties Limited Partnership
                to Morgan Stanley Mortgage Capital Inc., relating to The Great Mall
                in
                Olathe, Kansas. (22)10.88
            Guaranty
                of Recourse Obligations, dated June 9, 2004, by Glimcher Properties
                Limited Partnership to Morgan Stanley Mortgage Capital Inc., relating
                to
                The Great Mall in Olathe, Kansas. (22)10.89
            Bond
                Pledge Agreement dated June 9, 2004 between GM Olathe, LLC, Morgan
                Stanley
                Mortgage Capital Inc., and acknowledged and agreed to by the Huntington
                National Bank. (22)10.90
            Loan
                Agreement, dated January 13, 2006, between GM Olathe, LLC, Glimcher
                Properties Limited Partnership (as co-borrowers) and LLC and KeyBank
                National Association, relating to The Great Mall of the Great Plains
                in
                Olathe, Kansas.10.91
            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.10.92
            Amended
                and Restated Mortgage, Assignment of Rents, Security Agreement and
                Fixture
                Filing, dated January 13, 2006, between Glimcher Properties Limited
                Partnership and GM Olathe in the amount of $30,000,000, relating
                to The
                Great Mall of the Great Plains in Olathe,
                Kansas.




49


10.93
            Open
                End Mortgage, Assignment of Rents, Security Agreement, and Fixture
                Filing,
                dated as of August 30, 2004, between Glimcher River Valley Mall,
                LLC and
                KeyBank National Association, relating to the River Valley Mall in
                Lancaster, Ohio. (12)10.94
            Joinder
                to Guaranty, dated August 30, 2004, by Glimcher River Valley Mall,
                LLC,
                Glimcher Properties Limited Partnership and Glimcher Development
                Corporation. (12)10.95
            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.10.96
            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.10.97
            Open-End
                Mortgage and Security Agreement, dated December 15, 2005, between
                RVM
                Glimcher, LLC and Lehman Brothers Bank, FSB, relating to River Valley
                Mall
                in Lancaster, Ohio.10.98
            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.10.99
            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.10.100
            Agreement
                of Purchase and Sale, between Coyote Tulsa Mall, L.L.C. and Glimcher
                Properties Limited Partnership (relating to acquisition of Tulsa
                Promenade).10.101
            Employment
                & Consulting Agreement, dated January 20, 2005, between Herbert
                Glimcher, Glimcher Realty Trust and Glimcher Properties Limited
                Partnership. (14)10.102
            Form
                Option Award Agreement for the Glimcher Realty Trust 2004 Incentive
                Compensation Plan (Non-Qualified Stock Options). (28)10.103
            Form
                Option Award Agreement for the Glimcher Realty Trust 2004 Incentive
                Compensation Plan (Incentive Stock Options). (28)10.104
            Form
                Restricted Stock Award Agreement for Glimcher Realty Trust’s 2004
                Incentive Compensation Plan. (23)10.105
            First
                Amendment to term loan agreement between KeyBank National Association
                and
                Montgomery Mall Associates Limited Partnership and Glimcher Properties
                Limited Partnership dated January 13, 2006.21.1
            Subsidiaries
                of the Registrant23.1
            Consent
                of Independent Registered Public Accounting Firm31.1
            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 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 July 11,
                2005.


(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 16,
                2002.


(7)
            Incorporated
                by reference to Glimcher Realty Trust’s Form 8-K, filed with the
                Securities and Exchange Commission on December 31,
                1997.


(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, with the Securities and
                Exchange Commission on February 25,
                2004.




50


(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.


(15)
            Incorporated
                by reference to Glimcher Realty Trust’s Form 8-A, filed with the
                Securities and Exchange Commission on August 22,
                2003.


(16)
            Incorporated
                by reference to Glimcher Realty Trust’s Form 8-A, filed with the
                Securities and Exchange Commission on February 20,
                2004.


(17)
            Incorporated
                by reference to Appendix B of Glimcher Realty Trust’s Schedule 14A Proxy
                Statement, filed with the Securities and Exchange Commission on March
                29,
                2004.


(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, 1999, filed with the Securities and Exchange
                Commission on August 12, 1999.


(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 Annual 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 August 18,
                2005.


(26)
            Incorporated
                by reference to Glimcher Realty Trust’s Quarterly Report on Form 10-Q for
                the period ended June 30, 2005, filed with the Securities and Exchange
                Commission on August 2, 2005.


(27)
            Incorporated
                by reference to Glimcher Realty Trust’s Form 8-K, filed with the
                Securities and Exchange Commission on August 23,
                2005.


(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.







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. Yale





Mark
      E.
      Yale


Senior
      Vice President, Chief Financial Officer and Treasurer


(Principal
      Accounting and Financial Officer)


February
      22, 2006





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
              
              President,
                  Chief Executive Officer
              
              February
                  22, 2006Michael
                  P. Glimcher
              
              and
                  Trustee
                (Principal
                  Executive Officer)/s/
                  Mark E. Yale
              
              Senior
                  Vice President, Chief Financial
              
              February
                  22, 2006Mark
                  E. Yale
              
              Officer
                  and Treasurer
                (PrincipalAccounting
                  and Financial Officer)/s/
                  Herbert Glimcher
              
              Chairman
                  of the Board and Trustee
              
              February
                  22, 2006Herbert
                  Glimcher/s/
                  Philip G. Barach
              
              Member,
                  Board of Trustees
              
              February
                  22, 2006Philip
                  G. Barach/s/
                  Wayne S. Doran
              
              Member,
                  Board of Trustees
              
              February
                  22, 2006Wayne
                  S. Doran/s/
                  Howard Gross
              
              Member,
                  Board of Trustees
              
              February
                  22, 2006Howard
                  Gross/s/
                  Niles C. Overly
              
              Member,
                  Board of Trustees
              
              February
                  22, 2006Niles
                  C. Overly/s/
                  Alan R. Weiler
              
              Member,
                  Board of Trustees
              
              February
                  22, 2006Alan
                  R. Weiler/s/
                  William S. Williams
              
              Member,
                  Board of Trustees
              
              February
                  22, 2006William
                  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, 2005 and 2004 and the related consolidated statements of income
      and comprehensive income, shareholders’ equity and cash flows for each of the
      three years in the period ended December 31, 2005. 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, 2005 and 2004, and the results of its operations and cash flows
      for
      each of the three years in the period ended December 31, 2005, in conformity
      with accounting principles generally accepted in the United States of
      America.





As
      discussed in Note 2 to the consolidated financial statements, the Company,
      on
      January 1, 2003, adopted the provisions of Statement of Financial Accounting
      Standards No. 123, “Accounting for Stock-Based Compensation” as amended by the
      Financial Accounting Standards No. 148, “Accounting for Stock-Based
      Compensation- Transition and Disclosure”.





Also,
      in
      our opinion, the schedule 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, 2005, based on
      criteria established in *Internal
      Control-Integrated Framework* issued
      by
      the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
      and
      our report dated February 22, 2006 expressed an unqualified opinion on
      management’s assessment of, and the effective operation of, internal control
      over financial reporting.




Chicago,
                  Illinois
                February
                  22, 2006
              /s/
                BDO Seidman, LLP
  53


**GLIMCHER
      REALTY TRUST**


**CONSOLIDATED
      BALANCE SHEETS**


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





**ASSETS**




**December
                31,****2005**
            
            **2004**Investment
                in real estate:Land
            
            $
            291,998
            
            $
            304,175Buildings,
                improvements and equipment
            
            
            1,869,381
            
            
            1,925,283Developments
                in progress
            
            
            50,235
            
            
            21,1822,211,614
            
            
            2,250,640Less
                accumulated depreciation
            
            
            470,397
            
            
            435,821Property
                and equipment, net
            
            
            1,741,217
            
            
            1,814,819Deferred
                costs, net
            
            
            19,416
            
            
            18,889Real
                estate assets held for sale
            
            
            72,178
            
            
            1,590Investment
                in and advances to unconsolidated real estate entities
            
            
            44,248
            
            
            -Investment
                in real estate, net
            
            
            1,877,059
            
            
            1,835,298Cash
                and cash equivalents
            
            
            7,821
            
            
            8,446Restricted
                cash
            
            
            16,229
            
            
            16,330Tenant
                accounts receivable, net
            
            
            52,783
            
            
            51,873Deferred
                expenses, net
            
            
            8,676
            
            
            9,449Prepaid
                and other assets
            
            
            32,744
            
            
            25,628Total
                assets
            
            $
            1,995,312
            
            $
            1,947,024





**LIABILITIES
      AND SHAREHOLDERS’ EQUITY**




Mortgage
                notes payable
            
            $
            1,299,193
            
            $
            1,328,604Mortgage
                notes payable associated with properties held for sale
            
            
            52,288
            
            
            -Notes
                payable
            
            
            150,000
            
            
            74,000Accounts
                payable and accrued expenses
            
            
            67,638
            
            
            53,892Distributions
                payable
            
            
            23,410
            
            
            23,186Total
                liabilities
            
            
            1,592,529
            
            
            1,479,682Minority
                interest in operating partnership
            
            
            15,729
            
            
            23,520Shareholders’
                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, 36,506,448
              and
                35,682,858 shares issued and outstanding as of December 31,
              2005
                and December 31, 2004, respectively
            
            
            365
            
            
            357Additional
                paid-in capital
            
            
            544,708
            
            
            534,286Unvested
                restricted shares
            
            
            (1,069
            )
            
            -Distributions
                in excess of accumulated earnings
            
            
            (366,924
            )
            
            (300,786
            )Accumulated
                other comprehensive loss
            
            
            (26
            )
            
            (35
            )Total
                shareholder’s equity
            
            
            387,054
            
            
            443,822Total
                liabilities and shareholder’s equity
            
            $
            1,995,312
            
            $
            1,947,024





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


54


**GLIMCHER
      REALTY TRUST**


**CONSOLIDATED
      STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**


**(dollars
      in thousands, except per share and unit amounts)**




**For
                the Years Ended December
                31,****2005**
            
            **2004**
            
            **2003**Revenues:Minimum
                rents
            
            $
            207,593
            
            $
            200,565
            
            $
            167,974Percentage
                rents
            
            
            6,616
            
            
            5,970
            
            
            6,623Tenant
                reimbursements
            
            
            95,530
            
            
            94,144
            
            
            85,272Other
            
            
            25,120
            
            
            26,303
            
            
            25,727Total
                revenues
            
            
            334,859
            
            
            326,982
            
            
            285,596Expenses:Property
                operating expenses
            
            
            71,920
            
            
            72,676
            
            
            68,518Real
                estate taxes
            
            
            37,836
            
            
            35,738
            
            
            31,157109,756
            
            
            108,414
            
            
            99,675Provision
                for doubtful accounts
            
            
            4,848
            
            
            5,391
            
            
            7,000Other
                operating expenses
            
            
            9,642
            
            
            8,501
            
            
            8,455Depreciation
                and amortization
            
            
            75,441
            
            
            72,759
            
            
            61,070General
                and administrative
            
            
            18,423
            
            
            14,297
            
            
            9,908Total
                expenses
            
            
            218,110
            
            
            209,362
            
            
            186,108Operating
                income
            
            
            116,749
            
            
            117,620
            
            
            99,488Interest
                income
            
            
            327
            
            
            217
            
            
            196Interest
                expense
            
            
            84,772
            
            
            89,279
            
            
            78,384Equity
                in income of unconsolidated entities, net
            
            
            51
            
            
            3
            
            
            2,456Income
                before minority interest in operating partnership and discontinued
                operations
            
            
            32,355
            
            
            28,561
            
            
            23,756Minority
                interest in operating partnership
            
            
            252
            
            
            2,906
            
            
            1,703Income
                from continuing operations
            
            
            32,103
            
            
            25,655
            
            
            22,053Discontinued
                operations:Impairment
                losses
            
            
            (16,393
            )
            
            -
            
            
            (2,460
            )Gain
                on sales of properties, net
            
            
            1,619
            
            
            19,646
            
            
            703Income
                from operations
            
            
            3,521
            
            
            6,454
            
            
            12,665Net
                income
            
            
            20,850
            
            
            51,755
            
            
            32,961Less:
                Preferred stock dividends
            
            
            17,437
            
            
            17,517
            
            
            13,688Less:
                Issuance costs related to preferred stock redemption
            
            
            -
            
            
            4,878
            
            
            -Net
                income available to common shareholders
            
            $
            3,413
            
            $
            29,360
            
            $
            19,273Earnings
                Per Common Share (“EPS”):Basic:Continuing
                operations
            
            $
            0.38
            
            $
            0.16
            
            $
            0.27Discontinued
                operations
            
            $
            (0.29
            )
            $
            0.67
            
            $
            0.29Net
                income
            
            $
            0.09
            
            $
            0.83
            
            $
            0.56Diluted:Continuing
                operations
            
            $
            0.37
            
            $
            0.16
            
            $
            0.26Discontinued
                operations
            
            $
            (0.28
            )
            $
            0.66
            
            $
            0.29Net
                income
            
            $
            0.09
            
            $
            0.82
            
            $
            0.55Weighted
                average common shares outstanding
            
            
            36,036
            
            
            35,456
            
            
            34,704Weighted
              average common shares and common share equivalent outstanding
            
            
            39,856
            
            
            39,496
            
            
            38,221Cash
                distributions declared per common share of beneficial
                interest
            
            $
            1.9232
            
            $
            1.9232
            
            $
            1.9232Net
                income
            
            $
            20,850
            
            $
            51,755
            
            $
            32,961Other
                comprehensive income on derivative instruments, net
            
            
            9
            
            
            1,192
            
            
            4,935Comprehensive
                income
            
            $
            20,859
            
            $
            52,947
            
            $
            37,896




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, 2005, 2004 and 2003**


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




**Series
                B****Convertible****Preferred**
            
            **Series
                F****Cumulative****Preferred**
            
            **Series
                G****Cumulative****Preferred**
            
            **Unearned****Compensation****Restricted**
            
            **Common
                Shares of****Beneficial
                Interest**
            
            **Additional****Paid-in**
            
            **Distributions****In
                Excess of****Accumulated**
            
            **Accumulated****Other****Comprehensive****Income/****Shares**
            
            **Shares**
            
            **Shares**
            
            **Stock**
            
            **Shares**
            
            **Amount**
            
            **Capital**
            
            **Earnings**
            
            **(Loss)**
            
            **Total**Balance,
                December 31, 2002
            
            $
            127,950
            
            
            
            
            
            
            
            
            
            
            
            34,314,646
            
            $
            343
            
            $
            509,347
            
            $
            (214,120
            )
            $
            (6,162
            )
            $
            417,358Distributions
                declared, $1.9232 per share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (66,919
            )
            
            
            
            
            (66,919
            )Distribution
                Reinvestment and Share
              Purchase
                Plan
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            27,709
            
            
            
            
            
            560
            
            
            
            
            
            
            
            
            560Exercise
                of stock options
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            413,532
            
            
            4
            
            
            6,833
            
            
            
            
            
            
            
            
            6,837OP
                unit conversion
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            310,225
            
            
            3
            
            
            6,701
            
            
            
            
            
            
            
            
            6,704Issuance
                of shares from public offering
            
            
            
            
            $
            60,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,451
            )
            
            
            
            
            
            
            
            57,549Preferred
                stock dividends declared, Series B and F
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (13,688
            )
            
            
            
            
            (13,688
            )Net
                income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            32,961
            
            
            
            
            
            32,961Other
                comprehensive income on derivative
              instruments
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            4,935
            
            
            4,935Stock
                offering expense
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            62
            
            
            
            
            
            
            
            
            62Transfer
                from minority interest in partnership
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (4,420
            )
            
            
            
            
            
            
            
            (4,420
            )Balance,
                December 31, 2003
            
            
            127,950
            
            
            60,000
            
            
            
            
            
            
            
            
            35,066,112
            
            
            350
            
            
            516,632
            
            
            (261,766
            )
            
            (1,227
            )
            
            441,939Distributions
                declared, $1.9232 per share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (68,380
            )
            
            
            
            
            (68,380
            )Distribution
                Reinvestment and Share
              Purchase
                Plan
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            23,658
            
            
            1
            
            
            569
            
            
            
            
            
            
            
            
            570Exercise
                of stock options
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            503,882
            
            
            5
            
            
            8,752
            
            
            
            
            
            
            
            
            8,757OP
                unit conversion
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            89,206
            
            
            1
            
            
            2,365
            
            
            
            
            
            
            
            
            2,366Issuance
                of Series G cumulative redeemablepreferred
                shares of beneficial interest
            
            
            
            
            
            
            
            $
            150,000
            
            
            
            
            
            
            
            
            
            
            
            (5,198
            )
            
            
            
            
            
            
            
            144,802Redemption
                of Series B cumulative redeemablepreferred
                shares of beneficial interest
            
            
            (127,950
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            4,878
            
            
            (4,878
            )
            
            
            
            
            (127,950
            )Preferred
                stock dividends declared, Series B,
              F
                and G
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (17,517
            )
            
            
            
            
            (17,517
            )Net
                income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            51,755
            
            
            
            
            
            51,755Other
                comprehensive income on derivative
              instruments
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,192
            
            
            1,192Stock
                offering expense
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            237
            
            
            
            
            
            
            
            
            237Transfer
                from minority interest in partnership
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            6,051
            
            
            
            
            
            
            
            
            6,051Balance,
                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
            
            
            
            
            
            
            
            
            
            
            $
            (1,383
            )
            
            56,666
            
            
            1
            
            
            1,382
            
            
            
            
            
            
            
            
            -Amortization
                of stock incentive program
            
            
            
            
            
            
            
            
            
            
            
            314
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            314Preferred
                stock dividends declared, Series
              F
                and G
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (17,437
            )
            
            
            
            
            (17,437
            )Net
                income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            20,850
            
            
            
            
            
            20,850Other
                comprehensive income on derivative
              instruments
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            9
            
            
            9Stock
                offering expense
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            297
            
            
            
            
            
            
            
            
            297Transfer
                to minority interest in partnership
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (8,004
            )
            
            
            
            
            
            
            
            (8,004
            )Balance,
                December 31, 2005
            
            $
            -
            
            $
            60,000
            
            $
            150,000
            
            $
            (1,069
            )
            
            36,506,448
            
            $
            365
            
            $
            544,708
            
            $
            (366,924
            )
            $
            (26
            )
            $
            387,054




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,****2005**
            
            **2004**
            
            **2003**Cash
                flows from operating activities:Net
                income
            
            $
            20,850
            
            $
            51,755
            
            $
            32,961Adjustments
                to reconcile net income to net cash provided by operating
                activities:Provision
                for doubtful accounts
            
            
            5,097
            
            
            6,241
            
            
            9,002Depreciation
                and amortization
            
            
            77,815
            
            
            79,185
            
            
            66,988Loan
                fee amortization
            
            
            2,662
            
            
            4,383
            
            
            3,978Equity
                in income of unconsolidated entities
            
            
            (51
            )
            
            (3
            )
            
            (2,456
            )Capitalized
                development costs charged to expense
            
            
            257
            
            
            125
            
            
            1,051Minority
                interest in operating partnership
            
            
            252
            
            
            2,906
            
            
            1,703Return
                of minority interest share of earnings
            
            
            (252
            )
            
            (2,906
            )
            
            (1,703
            )Gain
                  on sales of properties from discontinuedoperations
            
            
            (1,619
            )
            
            (19,646
            )
            
            (703
            )Impairment
                losses
            
            
            16,393
            
            
            -
            
            
            2,460Gain
                on sales of outparcels
            
            
            (517
            )
            
            (813
            )
            
            (1,122
            )Net
                changes in operating assets and liabilities:Tenant
                accounts receivable, net
            
            
            (5,722
            )
            
            (2,498
            )
            
            (153
            )Prepaid
                and other assets
            
            
            (7,182
            )
            
            (4,423
            )
            
            (2,562
            )Accounts
                payable and accrued expenses
            
            
            362
            
            
            (12,001
            )
            
            (10,550
            )Net
                cash provided by operating activities
            
            
            108,345
            
            
            102,305
            
            
            98,894Cash
                flows from investing activities:Acquisitions
                and additions to investment in real estate
            
            
            (95,880
            )
            
            (72,726
            )
            
            (218,875
            )(Investment
                in) proceeds from unconsolidated entities
            
            
            (44,248
            )
            
            -
            
            
            4,382Proceeds
                from sales of properties
            
            
            23,624
            
            
            106,834
            
            
            23,975Proceeds
                from sales of outparcels
            
            
            2,975
            
            
            2,713
            
            
            2,495Withdrawals
                from (payments to) restricted cash
            
            
            101
            
            
            5,326
            
            
            (1,256
            )Additions
                to deferred expenses
            
            
            (9,034
            )
            
            (5,910
            )
            
            (10,950
            )Net
                cash (used in) provided by investing activities
            
            
            (122,462
            )
            
            36,237
            
            
            (200,229
            )Cash
                flows from financing activities:Proceeds
                from (payments to) revolving line of credit, net
            
            
            76,000
            
            
            (6,800
            )
            
            (59,000
            )Proceeds
                from issuance of mortgages and notes payable
            
            
            111,669
            
            
            231,500
            
            
            383,000Principal
                payments on mortgages and notes payable
            
            
            (88,364
            )
            
            (303,400
            )
            
            (205,309
            )Loss
                on early extinguishment of debt
            
            
            -
            
            
            557
            
            
            825Proceeds
                  from issuance of Preferred Stock - Series F, net of underwriting
                and
                  other offering costs of $2,451
            
            
            -
            
            
            -
            
            
            57,549Proceeds
                  from issuance of Preferred Stock - Series G, net of underwriting
                and
                  other offering costs of $5,198
            
            
            -
            
            
            144,802
            
            
            -Redemption
                Preferred Shares, Series B
            
            
            -
            
            
            (127,950
            )
            
            -Exercise
                of stock options and other
            
            
            7,095
            
            
            9,327
            
            
            7,397Cash
                distributions
            
            
            (92,908
            )
            
            (89,172
            )
            
            (83,396
            )Net
                cash provided by (used in) financing activities
            
            
            13,492
            
            
            (141,136
            )
            
            101,066Net
                change in cash and cash equivalents
            
            
            (625
            )
            
            (2,594
            )
            
            (269
            )Cash
                and cash equivalents, at beginning of period
            
            
            8,446
            
            
            11,040
            
            
            11,309Cash
                and cash equivalents, at end of period
            
            $
            7,821
            
            $
            8,446
            
            $
            11,040




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, including single tenant retail properties (“Community Centers”). At
      December 31, 2005, the Company owned and operated a total of 36 Properties
      consisting of 25 Malls (24 wholly-owned and 1 partially owned through a joint
      venture) and 11 Community Centers. The “Company” refers to Glimcher Realty
      Trust, Glimcher Properties Limited Partnership, a Delaware limited partnership,
      as well as entities in which the Company has an interest.





*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,
      2005, GRT was a limited partner in GPLP with a 91.6% ownership interest and
      GRT’s wholly owned subsidiary, Glimcher Properties Corporation (“GPC”), was
      GPLP’s sole general partner. 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 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
      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, are
      recognized once the sales reported by such tenants exceed any applicable
      breakpoints as specified in the tenants’ leases. 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, temporary tenant 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
      new 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 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 term of each lease. Cash allowances paid
      for
      improvements to real estate owned by retailers are capitalized as contract
      intangibles and amortized over the life of the operating agreements. 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.





*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 future 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.





*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. 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 Company 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
      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 and the value of tenant relationships,
      based
      in each case on their fair values. Purchase accounting was 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 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.





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, 2003, the Company adopted the fair value recognition provisions
      of
      SFAS No. 123, “Accounting for Stock-Based Compensation,” and 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. Prior to January 1, 2003, the
      Company applied Accounting Principles Board Opinion No. 25 (“APB 25”) and
      related interpretations in accounting for its plans. Under the provisions of
      APB
      25, the Company was not required to recognize compensation expense related
      to
      options because the options were granted at a price equal to the market price
      on
      the day of grant. Had compensation cost for the plans been determined based
      on
      the fair value at the grant dates for grants under these plans consistent with
      SFAS No. 123, the Company’s net income available to common shareholders would
      have decreased $4, $39 and $58 for the twelve months ended December 31, 2005,
      2004 and 2003, respectively. Earnings per share basic would have remained
      unchanged as a result of this stock compensation expense for 2005 and 2004.
      In
      2003, earnings per share basic would have changed from $0.56 to $0.55. Earnings
      per share diluted would have remained unchanged as a result of this stock
      compensation expense for 2005, 2004 and 2003.





*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, 2005 and 2004, 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 and
      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 over
      the terms of the respective agreements. Deferred expenses in the accompanying
      consolidated balance sheets are shown net of accumulated amortization of $8,676
      and $9,449 as of December 31, 2005 and 2004, respectively. During 2004 and
      2003,
      the Company expensed $1,765 and $826, respectively, of unamortized financing
      fees in connection with the early retirement of debt. Such amounts have been
      reported as interest expense in the accompanying financial statements.





*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/accreted into interest
      income or interest expense over the remaining term of the hedge relationship
      using the effective interest method. Should the hedged item be sold, mature
      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*





**Year
                Ended December 31,****2005**
            
            **2004**
            
            **2003**Interest
                expense
            
            $
            82,160
            
            $
            85,040
            
            $
            74,614Amortization
                of loan fees
            
            
            2,612
            
            
            4,239
            
            
            3,770Total
                interest expense
            
            
            84,772
            
            
            89,279
            
            
            78,384Interest
                capitalized
            
            
            2,328
            
            
            597
            
            
            698Total
                interest costs
            
            $
            87,100
            
            $
            89,876
            
            $
            79,082





*Investment
      in Unconsolidated Real Estate Entities*





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 from 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. 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, 2005





*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. Net advertising expense
      was $1,069, $1,118 and $2,106 for the years ended December 31, 2005, 2004 and
      2003, 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 regular
      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 OP Units outstanding. The
      issuance of additional shares of beneficial interest (the Common “Shares” or
“Share”) or OP Units changes the percentage ownership of both the Unit Holders
      and the Company. Since a 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*





As
      a
      result of the Company’s acquisitions of joint venture interests not previously
      owned, the Company had non-cash debt assumptions and issued OP Units. The debt
      assumed was $193,190 for the twelve months ending December 31, 2004. In January
      2004, the Company issued 594,342 new OP Units with an approximate value of
      $13,564 in connection with the acquisition of the remaining joint venture
      interest in Polaris Fashion Place, an approximately 1.6 million square foot
      upscale regional Mall in Columbus, OH (“Polaris”). Non-cash transactions
      resulting from other accounts payable and accrued expenses for ongoing
      operations such as real estate improvements and other assets were $13,815 and
      $537 as of December 31, 2005 and December 31, 2004, respectively.





Share
      distributions of $17,552 and $17,157 and Operating Partnership distributions
      of
      $1,498 and $1,670 had been declared but not paid as of December 31, 2005 and
      December 31, 2004, respectively. 8.75% Series F Cumulative Preferred Shares
      of
      Beneficial Interest (“Series F Preferred Shares”) distributions of $1,313 had
      been declared but not paid as of December 31, 2005 and December 31, 2004. 8.125%
      Series G Cumulative Preferred Shares of Beneficial Interest (“Series G Preferred
      Shares”) distributions of $3,046 had been declared but not paid as of December
      31, 2005 and December 31, 2004. Amounts paid for interest, exclusive of
      capitalized interest were $88,937, $89,864 and $76,520 in 2005, 2004 and 2003,
      respectively.





*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
      shareholder’s 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
      December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      123(R), to expand and clarify SFAS No. 123 in several areas. The Statement
      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 recognized over the requisite service period (usually the
      vesting period) for the estimated number of instruments where service is
      expected to be rendered. This Statement is effective beginning in the first
      quarter of 2006 for all unvested awards. Since the Company previously adopted
      the provisions of expensing stock-based compensation using the fair value based
      method of accounting as permitted under SFAS No. 123, the Company does not
      expect its financial statements will be materially impacted by SFAS No. 123(R).





In
      December 2004, The FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets”.
      The issue addresses the accounting for nonmonetary exchanges as an area in
      which
      the U.S. standard could be improved by eliminating certain differences between
      the measurement guidance in Opinion 29 and that in International Accounting
      Standard (“IAS”) No. 16, “Property, Plant and Equipment”, and IAS No. 38,
“Intangible Assets”. The provisions of this Statement are effective for
      nonmonetary asset exchanges occurring in fiscal periods beginning after June
      15,
      2005. The provisions of this Statement are applied prospectively. The Company
      does not expect its financial statements will be materially impacted by SFAS
      No.
      153.





In
      September 2005, the Emerging Issues Task Force (“EITF”) issued Issue 04-05,
“Investor’s Accounting for an Investment in a Limited Partnership When the
      Investor is the Sole General Partner and the Limited Partners Have Certain
      Rights”, (“EITF 04-05”). At issue is what rights held by the limited partner(s)
      preclude consolidation in circumstances in which the sole general partner would
      consolidate the limited partnership in accordance with U.S. generally accepted
      accounting principals. The assessment of limited partners’ rights and their
      impact on the presumption of control of the limited partnership by the sole
      general partner should be made when an investor becomes the sole general partner
      and should be reassessed if (i) there is a change to the terms or in the
      exercisability of the rights of the limited partners, (ii) the sole general
      partner increases or decreases its ownership of limited partnership interests,
      or (iii) there is an increase or decrease in the number of outstanding limited
      partnership interests. This issue is effective no later than for fiscal years
      beginning after December 15, 2005 and as of June 29, 2005 for new or modified
      arrangements. The impact of adopting EITF 04-05 is not expected to have a
      material impact on the Company’s financial position or results of
      operations.





*Reclassifications*





Certain
      reclassifications of prior period amounts, including the presentation of the
      statements of operations required by SFAS No. 144, have been made in the
      financial statements to conform to the 2005 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. In the third quarter
      of
      2005, management committed to a plan to sell twelve Properties and initiated
      an
      active program to market them. Accordingly, these assets were classified as
      held
      for sale. During the fourth quarter of 2005, the Company sold four of these
      Properties. In addition to classifying these properties as held for sale, the
      financial results, including any impairment charges of these properties are
      reported as discontinued operations and the net book value of the assets are
      reflected as held for sale on the balance sheet. Impairment losses on Properties
      classified as held for sale totaled $16,393, $0 and $2,460 for the years ended
      December 31, 2005, 2004 and 2003, respectively. As of December 31, 2005, eight
      Properties remain classified as held for sale with a net book value of $72,178.
      One Property with a net book value of $1,590 was classified as held for sale
      at
      December 31, 2004.





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.





**December
                31,**
              **2005**
            
            **December
                31,**
              **2004**Billed
                Receivables
            
            $
            24,688
            
            $
            24,582Straight-line
                Receivables
            
            
            26,190
            
            
            25,643Unbilled
                Receivables
            
            
            10,580
            
            
            10,193Less:
                Allowance for Doubtful Accounts
            
            
            (8,675
            )
            
            (8,545
            )Net
                Accounts Receivable
            
            $
            52,783
            
            $
            51,873





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 activity in the
      allowance for doubtful accounts for the three years ending December 31, 2005
      is
      shown below:


**Balance
                  at**
                **beginning**
                **of
                  year**
              
              
              **(1)**
                **Charged
                  to**
                **expense**
              
              
              **(1)**
                
                **Deductions**
              
              
              **Balance
                  at**
                **end
                  of year**Year
                  ended December 31, 2005-Allowance
                  for doubtful accounts
              
              $
              8,545
              
              $
              4,848
              
              $
              4,718
              
              $
              8,675Year
                  ended December 31, 2004-Allowance
                  for doubtful accounts
              
              $
              7,972
              
              $
              5,391
              
              $
              4,818
              
              $
              8,545Year
                  ended December 31, 2003-Allowance
                  for doubtful accounts
              
              $
              3,533
              
              $
              7,000
              
              $
              2,561
              
              $
              7,972





(1)
            Amounts
                charged to expense and deductions for 2004 and 2003 are revised to
                reflect
                the impact of SFAS No. 144.







65


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





**5.**
            **Mortgage
                Notes Payable as of December 31, 2005 and December 31, 2004 consist
                of the
                following:**




**Carrying
                    amount of**
                  **Mortgage
                    Notes Payable**
                
                **Interest
                    Rate**
                
                **Interest**
                
                **Payment**
                
                **Payment
                    at**
                
                **Maturity****Fixed
                    Rate:**
                
                **2005**
                
                **2004**
                
                **2005**
                
                **2004**
                
                **Terms**
                
                **Terms**
                
                **Maturity**
                
                **Date**Weberstown
                    Mall, LLC
                
                $
                19,126
                
                $
                19,383
                
                
                7.43%
                
                
                7.43%
                
                
                
                
                
                (a)
                
                $
                19,033
                
                
                May
                    1, 2006SAN
                    Mall, LP
                
                
                33,523
                
                
                33,985
                
                
                8.35%
                
                
                8.35%
                
                
                (p)
                
                
                (a)
                
                $
                32,615
                
                
                (e)Colonial
                    Park Mall, LP
                
                
                32,975
                
                
                33,459
                
                
                7.73%
                
                
                7.73%
                
                
                (p)
                
                
                (a)
                
                $
                32,033
                
                
                (e)Mount
                    Vernon Venture, LLC
                
                
                8,865
                
                
                8,968
                
                
                7.41%
                
                
                7.41%
                
                
                
                
                
                (a)
                
                $
                8,624
                
                
                February
                    11, 2008Charlotte
                    Eastland Mall, LLC (q)
                
                
                44,559
                
                
                45,292
                
                
                7.84%
                
                
                7.84%
                
                
                (p)
                
                
                (a)
                
                $
                42,302
                
                
                (f)Morgantown
                    Mall Associates, LP
                
                
                53,381
                
                
                54,227
                
                
                6.89%
                
                
                6.89%
                
                
                (p)
                
                
                (a)
                
                $
                50,823
                
                
                (f)Grand
                    Central, LP
                
                
                48,572
                
                
                49,276
                
                
                7.18%
                
                
                7.18%
                
                
                
                
                
                (a)
                
                $
                46,065
                
                
                February
                    1, 2009Johnson
                    City Venture, LLC
                
                
                39,214
                
                
                39,606
                
                
                8.37%
                
                
                8.37%
                
                
                
                
                
                (a)
                
                $
                37,026
                
                
                June
                    1, 2010Polaris
                    Center, LLC
                
                
                40,953
                
                
                41,387
                
                
                8.20%
                
                
                8.20%
                
                
                (p)
                
                
                (a)
                
                $
                38,543
                
                
                (g)Glimcher
                    Ashland Venture, LLC
                
                
                25,307
                
                
                25,770
                
                
                7.25%
                
                
                7.25%
                
                
                
                
                
                (a)
                
                $
                21,817
                
                
                November
                    1, 2011Dayton
                    Mall Venture, LLC
                
                
                56,717
                
                
                57,481
                
                
                8.27%
                
                
                8.27%
                
                
                (p)
                
                
                (a)
                
                $
                49,864
                
                
                (h)Glimcher
                    WestShore, LLC
                
                
                96,804
                
                
                98,275
                
                
                5.09%
                
                
                5.09%
                
                
                
                
                
                (a)
                
                $
                84,824
                
                
                September
                    9, 2012University
                    Mall, LP
                
                
                63,845
                
                
                65,050
                
                
                7.09%
                
                
                7.09%
                
                
                (p)
                
                
                (a)
                
                $
                52,524
                
                
                (i)PFP
                    Columbus, LLC
                
                
                144,439
                
                
                146,631
                
                
                5.24%
                
                
                5.24%
                
                
                
                
                
                (a)
                
                $
                124,572
                
                
                April
                    11, 2013LC
                    Portland, LLC
                
                
                135,326
                
                
                137,285
                
                
                5.42%
                
                
                5.42%
                
                
                (p)
                
                
                (a)
                
                $
                116,922
                
                
                (j)JG
                    Elizabeth, LLC
                
                
                161,371
                
                
                163,827
                
                
                4.83%
                
                
                4.83%
                
                
                
                
                
                (a)
                
                $
                135,194
                
                
                June
                    8, 2014MFC
                    Beavercreek, LLC
                
                
                110,871
                
                
                112,423
                
                
                5.45%
                
                
                5.45%
                
                
                
                
                
                (a)
                
                $
                92,762
                
                
                November
                    1, 2014Glimcher
                    SuperMall Venture, LLC
                
                
                60,341
                
                
                61,107
                
                
                7.54%
                
                
                7.54%
                
                
                (p)
                
                
                (a)
                
                $
                49,969
                
                
                (k)RVM
                    Glimcher, LLC
                
                
                50,000
                
                
                -
                
                
                5.65%
                
                
                n/a
                
                
                
                
                
                (c)
                
                $
                44,931
                
                
                January
                    11, 2016Tax
                    Exempt Bonds
                
                
                19,000
                
                
                19,000
                
                
                6.00%
                
                
                6.00%
                
                
                
                
                
                (d)
                
                $
                19,000
                
                
                November
                    1, 20281,245,189
                
                
                1,212,432**Variable
                    Rate/Bridge:**GM
                    Olathe, LLC
                
                
                30,000
                
                
                30,000
                
                
                6.37%
                
                
                4.40%
                
                
                (l)
                
                
                (b)
                
                $
                30,000
                
                
                June
                    9, 2006Montgomery
                    Mall Associates, LP
                
                
                25,000
                
                
                -
                
                
                6.16%
                
                
                n/a
                
                
                (m)
                
                
                (b)
                
                $
                25,000
                
                
                August
                    1, 2006Glimcher
                    Columbia, LLC (q)
                
                
                7,729
                
                
                7,955
                
                
                6.79%
                
                
                4.78%
                
                
                (n)
                
                
                (a)
                
                $
                7,595
                
                
                August
                    1, 2006EM
                    Columbus, LLC
                
                
                41,669
                
                
                24,000
                
                
                6.38%
                
                
                4.42%
                
                
                (o)
                
                
                (b)
                
                $
                41,669
                
                
                January
                    1, 2007104,398
                
                
                61,955**Other:**Fair
                    Value Adjustment - Polaris Center, LLC
                
                
                1,894
                
                
                2,322Extinguished
                    Debt
                
                
                -
                
                
                51,895Total
                    Mortgage Notes Payable
                
                $
                1,351,481
                
                $
                1,328,604
 (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 February
                    2009,
                    thereafter principal and interest are required.(d)
                The
                    loan requires semi-annual payments of interest.(e)
                The
                    loan matures in October 2027, with an optional prepayment date
                    on October
                    11, 2007.(f)
                The
                    loan matures in September 2028, with an optional prepayment date
                    on
                    September 11, 2008.(g)
                The
                    loan matures in June 2030, with an optional prepayment date on
                    June 1,
                    2010.(h)
                The
                    loan matures in July 2027, with an optional prepayment date on
                    July 11,
                    2012.(i)
                The
                    loan matures in January 2028, with an optional prepayment date
                    on January
                    11, 2013.(j)
                The
                    loan matures in June 2033, with an optional prepayment date on
                    June 11,
                    2013.(k)
                The
                    loan matures in September 2029, with an optional prepayment date
                    on
                    February 11, 2015.(l)
                Interest
                    rate of LIBOR (capped by a derivative at 6.00%) plus 200 basis
                    points
                    until maturity.(m)
                Interest
                    rate of LIBOR plus 185 basis points.(n)
                Interest
                    rate of LIBOR plus 250 basis points.(o)
                Interest
                    rate of LIBOR plus 200 basis points.(p)
                Interest
                  rate escalates after optional prepayment date.(q)
                Mortgage
                  note payable associated with asset held for
                  sale.





66


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





All
      mortgage notes payable are collateralized by certain properties owned by the
      respective entities with net book values of $1,684,178 and $1,654,690 at
      December 31, 2005 and 2004, 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, 2005.
      Additionally, certain of the loans have cross-default provisions and are
      cross-collateralized with mortgages on the Properties owned by the borrowers
      SAN
      Mall, LP and 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, $89,398 of mortgage notes payable relating to certain
      Properties have been guaranteed by GPLP as of December 31, 2005.





Principal
      maturities (excluding extension options) on mortgage notes payable during the
      five years subsequent to December 31, 2005, are as follows: 2006 $99,941; 2007
      $125,299; 2008 $120,101; 2009 $64,055; 2010 $93,927; thereafter $846,264.




**6.**
            **Notes
                Payable**





In
      August
      2005, the Company closed on a $300,000 amended credit facility (the “Amended
      Credit Facility”) that matures in August 2008 and has a one-year extension
      option. The Amended Credit Facility is unsecured and replaces a $150,000 secured
      credit facility that was due to expire in October 2006. The Amended Credit
      Facility is expandable to $400,000, provided there is no default under the
      Amended Credit Facility and that one or more participating lenders agrees to
      increase their funding commitment or one or more new participating lenders
      is
      added to the facility. The interest rate ranges from LIBOR plus 1.05% to LIBOR
      plus 1.55% depending upon the Company’s ratio of debt to total asset value. The
      Amended 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 they are in compliance with all covenants
      as
      of December 31, 2005.





At
      December 31, 2005, the outstanding balance on the Amended Credit Facility was
      $150,000. Additionally, $5,070 represents a holdback on the available balance
      for letters of credit issued under the Amended Credit Facility at December
      31,
      2005. As of December 31, 2005, the unused balance of the Amended Credit Facility
      available to the Company was $144,930 and the interest rate was
      5.54%.





At
      December 31, 2004, the outstanding balance on the secured credit facility was
      $74,000. Additionally, $4,600 represented a holdback on the available balance
      for letters of credit issued under the secured credit facility at December
      31,
      2004. As of December 31, 2004, the unused balance of the credit facility
      available to the Company was $71,400 and the interest rate was
      4.10%.





**7.**
            **Income
                taxes**





The
      following table reconciles the Company’s net income to taxable income for the
      years ended December 31, 2005, 2004 and 2003:





**2005**
            
            **2004**
            
            **2003**Net
                income
            
            $
            20,850
            
            $
            51,755
            
            $
            32,961Add:
                Net loss of taxable REIT subsidiaries
            
            
            2,501
            
            
            1,696
            
            
            1,738Net
                income from REIT operations (1)
            
            
            23,351
            
            
            53,451
            
            
            34,699Add:
                Book depreciation and amortization
            
            
            73,622
            
            
            75,817
            
            
            61,189Less:
                Tax depreciation and amortization
            
            
            (56,847
            )
            
            (59,207
            )
            
            (51,454
            )Book
                loss/(gain) from capital transactions
            
            
            13,083
            
            
            (18,087
            )
            
            1,612Tax
                (loss)/gain from capital transactions
            
            
            (14,624
            )
            
            6,736
            
            
            (1,602
            )Other
                book/tax differences, net
            
            
            (1,408
            )
            
            (14,436
            )
            
            (17,235
            )Taxable
                income before adjustments
            
            
            37,177
            
            
            44,274
            
            
            27,209Less:
                Capital gains
            
            
            (1,614
            )
            
            (6,736
            )
            
            -Adjusted
                taxable income subject to 90% requirement
            
            $
            35,563
            
            $
            37,538
            
            $
            27,209


(1)
              All
                  adjustments to “Net income 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, 2005, 2004 and 2003:





**2005**
            
            **2004**
            
            **2003**Cash
                dividends paid
            
            $
            86,593
            
            $
            85,511
            
            $
            78,937Less:
                Dividends designated to prior year
            
            
            (21,516
            )
            
            (21,131
            )
            
            (19,457
            )Plus:
                Dividends designated from following year
            
            
            21,912
            
            
            21,516
            
            
            21,131Less:
                Portion designated return of capital
            
            
            (49,812
            )
            
            (41,622
            )
            
            (53,402
            )Dividends
                paid deduction
            
            $
            37,177
            
            $
            44,274
            
            $
            27,209





Characterization
      of distributions:





The
      following table characterizes distributions paid per common share for the years
      ended December 31, 2005, 2004 and 2003: ****




**2005**
            
            **2004**
            
            **2003****Amount**
            
            **%**
            
            **Amount**
            
            **%**
            
            **Amount**
            
            **%**Ordinary
                income
            
            $
            0.5221
            
            
            27.15
            %
            $
            0.6380
            
            
            33.18
            %
            $
            0.3888
            
            
            20.22
            %Return
                of Capital
            
            
            1.3774
            
            
            71.62
            
            
            1.1707
            
            
            60.87
            
            
            1.5344
            
            
            79.78Capital
                gains
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Unrecaptured
                Section 1250 gain
            
            
            0.0237
            
            
            1.23
            
            
            0.1145
            
            
            5.95
            
            
            -
            
            
            -$
            1.9232
            
            
            100.00
            %
            $
            1.9232
            
            
            100.00
            %
            $
            1.9232
            
            
            100.00
            %





The
      following table characterizes distributions paid per Series B Preferred Share
      for the years ended December 31, 2005, 2004 and 2003:




**2005**
            
            **2004**
            
            **2003****Amount**
            
            **%**
            
            **Amount**
            
            **%**
            
            **Amount**
            
            **%**Ordinary
                income
            
            
            -
            
            
            -
            %
            $
            0.3104
            
            
            84.79
            %
            $
            2.3125
            
            
            100.0
            %Return
                of Capital
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Capital
                gains
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Unrecaptured
                Section 1250 gain
            
            
            -
            
            
            -
            
            
            0.0557
            
            
            15.21
            
            
            -
            
            
            --
            
            
            -
            %
            $
            0.3661
            
            
            100.00
            %
            $
            2.3125
            
            
            100.00
            %





The
      following table characterizes distributions paid per Series F Preferred Share
      for the years ended December 31, 2005, 2004 and 2003:




**2005**
            
            **2004**
            
            **2003****Amount**
            
            **%**
            
            **Amount**
            
            **%**
            
            **Amount**
            
            **%**Ordinary
                income
            
            $
            2.0926
            
            
            95.66
            %
            $
            1.8548
            
            
            84.79
            %
            $
            0.7717
            
            
            100.0
            %Return
                of Capital
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Capital
                gains
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Unrecaptured
                Section 1250 gain
            
            
            0.0950
            
            
            4.34
            
            
            0.3328
            
            
            15.21
            
            
            -
            
            
            -$
            2.1876
            
            
            100.00
            %
            $
            2.1876
            
            
            100.00
            %
            $
            0.7717
            
            
            100.00
            %





The
      following table characterizes distributions paid per Series G Preferred Share
      for the years ended December 31, 2005 and 2004:





**2005**
            
            **2004****Amount**
            
            **%**
            
            **Amount**
            
            **%**Ordinary
                income
            
            $
            1.9430
            
            
            95.66
            %
            $
            1.4687
            
            
            84.79
            %Return
                of Capital
            
            
            -
            
            
            -
            
            
            -
            
            
            -Capital
                gains
            
            
            -
            
            
            -
            
            
            -
            
            
            -Unrecaptured
                Section 1250 gain
            
            
            0.0882
            
            
            4.34
            
            
            0.2635
            
            
            15.21$
            2.0312
            
            
            100.00
            %
            $
            1.7322
            
            
            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):


****


**2005**
            
            **2004**
            
            **2003**Investment
                in partnership
            
            $
            (5
            )
            $
            (1
            )
            $
            -Capitalized
                development costs
            
            
            (412
            )
            
            (198
            )
            
            (158
            )Depreciation
                and amortization
            
            
            41
            
            
            36
            
            
            6Charitable
                contributions
            
            
            22
            
            
            22
            
            
            -Allowance
                for doubtful accounts
            
            
            -
            
            
            -
            
            
            40Interest
                expense
            
            
            756
            
            
            248
            
            
            -Other
            
            
            8
            
            
            (3
            )
            
            2Net
                operating losses
            
            
            2,322
            
            
            1,957
            
            
            2,393Net
                deferred tax asset
            
            
            2,732
            
            
            2,061
            
            
            2,283Valuation
                allowance
            
            
            (2,732
            )
            
            (2,061
            )
            
            (2,283
            )Net
                deferred tax asset after valuation allowance
            
            $
            -
            
            $
            -
            
            $
            -





The
      gross
      tax loss carryforwards total $5,805 and expire $2,731, $355, $144, $479, $623,
      $561 and $912 in 2018, 2020, 2021, 2022, 2023, 2024 and 2025,
      respectively.





The
      income tax provision consisted of $2, $12 and $49 in 2005, 2004 and 2003,
      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 $0, $0 and $968 in 2005, 2004 and 2003,
      respectively. A full valuation allowance had previously been provided against
      the tax loss carryforwards utilized.




In
      2005,
      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 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.





**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
      November 17, 1997, GRT completed a $120,000 public offering of 4,800,000 shares
      of 9.25% Series B Cumulative Preferred Shares of Beneficial Interest (the
“Series B Preferred Shares”). On November 25, 1997, GRT sold an additional
      318,000 Series B Preferred Shares as a result of the underwriters exercising
      the
      over-allotment option granted to them. Aggregate net proceeds of the offering
      were $123,072. Distributions on the Series B Preferred Shares were payable
      quarterly in arrears and the Company was able to redeem the Series B Preferred
      Shares anytime on or after November 15, 2003, at a redemption price of $25.00
      per share, plus accrued and unpaid distributions. On February 27, 2004, the
      Company redeemed 5,118,000 of the Series B Preferred Shares. Shareholders of
      record at the close of business on February 27, 2004 received a redemption
      price
      of $25.00 per share plus an amount equal to the dividends accrued and unpaid.
      The total cost to redeem the shares was $129,824.




69


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





The
      redemption of the Series B Preferred Shares resulted in a $4,878 non-cash charge
      as required under EITF Topic Number D-42, “The Effect on the Calculation of
      Earnings Per Share for the Redemption or Induced Conversion of Preferred Stock.”
This one time non-cash charge represents costs that were incurred and recorded
      in “Additional Paid In Capital” at the time of the initial issuance of the
      Series B Preferred Shares in 1997.





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 right 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. The proceeds
      were used to redeem the Series B Preferred Shares on February 27, 2004 and
      to
      pay down $16,900 of the Company’s Credit Facility.





**9.**
            **Derivative
                Financial Instruments**





The
      Company accounts for its derivatives and hedging activities under SFAS No.
      133
      as amended by SFAS No. 138 and 149. During the twelve months 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. During the twelve months ended December 31,
      2004, the Company recognized additional other comprehensive income of $1,192
      to
      adjust the carrying amount of the interest rate swaps and caps to fair values
      at
      December 31, 2004, net of $1,325 in reclassifications to earnings for interest
      rate swap settlements and interest rate cap amortization during the period
      and
      $100 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 the risk associated with variability of interest
      rates
      that might impact the cash flows and the results of operations of the Company.
      Our 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, 2005. The notional values provide an indication
      of the extent of the Company’s involvement in these instruments at that time,
      but do not represent exposure to credit, interest rate or market
      risks.


**Hedge
                  Type**
              
              **Notional**
                **Value**
              
              **Interest**
                **Rate**
              
              **Maturity**
              
              **Fair
                  Value**Cap
                  - Cash Flow
              
              $
                  30,000
              
              6.00%
              
              June
                  15, 2006
              
              $0





On
      December 31, 2005, the derivative instruments were reported at their fair value
      of $0 in accounts payable and accrued expenses in the accompanying balance
      sheet, 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 $28 is expected to be reclassified
      in
      2006. 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, 2005.





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,
      2005 are as follows:





2006
            
            $
            197,0112007
            
            
            177,6052008
            
            
            160,2092009
            
            
            135,1172010
            
            
            109,251Thereafter
            
            
            319,940$
            1,099,133





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 $578,
      $614 and $2,065 for the years ended December 31, 2005, 2004 and 2003,
      respectively. In 2005, 2004 and 2003, 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 Unconsolidated Entities**





Investment
      in unconsolidated real estate entities as of December 31, 2005 consisted of
      a
      52% interest held by GPLP in a joint venture (the “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. On December 29, 2005, the Venture
      acquired Puente Hills Mall, an enclosed regional mall consisting of
      approximately 1.2 million square feet of gross leasable area located in the
      Los
      Angeles metro area. The purchase price was $170,080, which was funded in part
      by
      the assumption of an $88,800 non-recourse mortgage loan and pro rata
      contributions to the Venture by GPLP and ORC.





The
      share
      of net income for the period January 1, 2003 through March 5, 2003 includes
      the
      Company’s 50.00% joint venture interest in Colonial Park Mall Limited
      Partnership. Effective March 6, 2003, the Company acquired the remaining 50.00%
      joint venture interest in this entity. Also, the share of net income for the
      period January 1, 2003 through April 23, 2003 includes the Company’s 50% joint
      venture interest in G & G Blaine, LLC (Northtown). Effective April 24, 2003,
      the Company acquired the remaining 50% joint venture interest in this entity.
      Furthermore, the share of net income for the period January 1, 2003 through
      August 13, 2003 included the Company’s 20% joint venture interest in Charlotte
      Eastland Mall, LLC. Effective August 14, 2003, the Company acquired the
      remaining 80% joint venture interest in this entity. Lastly, the share of net
      income for the period January 1, 2003 through January 4, 2004 consisted of
      both
      a 50% interest in Polaris Center, LLC and a 39.29% interest in Polaris Mall,
      LLC. On January 5, 2004, the Company acquired the remaining 50% joint venture
      interest in Polaris Center, LLC and the remaining 60.71% joint venture interest
      in Polaris Mall, LLC. As a result, the entities mentioned above are fully
      consolidated as of March 6, 2003, April 24, 2003, August 14, 2003 and January
      5,
      2004 respectively.





The
      Company provides management, development, construction, leasing and legal
      services for a fee to joint ventures in which it has an ownership interest.
      The
      Company recognized fee income of $632, $14, and $2,224 for services provided
      to
      the joint ventures for the year ended December 31, 2005, 2004 and 2003,
      respectively.





The
      net
      income for each entity is allocated in accordance with the provisions of the
      applicable operating agreements. The summary financial information for the
      Operating Partnership’s investment in Puente Hills Mall, LLC, accounted for
      using the equity method is presented below:


**BALANCE
                  SHEETS**
              
              **December
                  31, 2005******Assets:Investment
                  properties at cost, net
              
              $
              171,897Intangible
                  assets (1)
              
              
              11,478Other
                  assets
              
              
              4,616$
              187,991Liabilities
                  and Members’ Equity:Mortgage
                  note payable
              
              $
              88,212Intangibles
                  (2)
              
              
              14,360Other
                  liabilities
              
              
              324102,896Members’
                  equity
              
              
              85,095$
              187,991Operating
                  Partnership’s Share of Members’ equity
              
              $
              44,200





72


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





**Reconciliation
      of Members’ Equity to Company**  **Investment
      in Unconsolidated Entities:**


Members’
                  equity
              
              $
              44,200Advances
                  and additional costs
              
              
              48Investment
                  in unconsolidated entities
              
              $
              44,248


(1)
            Includes
                value of acquired in-place
                leases


(2)
            Includes
                the net value of $410 above-market acquired leases and $14,770
                below-market acquired leases





**12.**
            **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. He remains Chairman of the Board of Trustees (“Board”) of
      GRT. Under the Employment Agreement, GRT employs Herbert Glimcher as Senior
      Advisor and as non-executive Chairman of the Board. He also serves as
      non-executive Chairman of the Board of Directors for GPC. Neither GRT nor GPC
      consider Herbert Glimcher to be an executive officer. The initial term of the
      Employment Agreement commenced on February 1, 2005 and continues through May
      31,
      2006 (the “Term”); provided, that the Term may be renewed for an additional one
      year period if the Corporation and Herbert Glimcher agree to renew the Term
      prior to its expiration.




Herbert
      Glimcher shall receive $100 per annum for serving as the non-executive Chairman
      of the Board for GRT and GPC and $250 per annum for serving as Senior Advisor
      to
      GRT (the “Salary”). Additionally, he shall receive a total of $2,000 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.





GRT
      reimburses Herbert Glimcher for reasonable rent for office space located in
      Columbus, Ohio, the reasonable salary of one administrative assistant, and
      provides a part-time driver consistent with past practice. For the year ended
      December 31, 2005, the aggregate total of reimbursements paid by GRT under
      the
      Employment Agreement was $123.





*Corporate
      Flight Inc./ The Glimcher Company*





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





**For
                the Years Ending:**
            
            **Corporate**
              **Flight
                Inc.**
            
            **The
                Glimcher****Company**December
                31, 2005
            
            $
            304
            
            $
            -December
                31, 2004
            
            
            239
            
            
            9December
                31, 2003
            
            
            305
            
            
            7Total
            
            $
            848
            
            $
            16




GDC,
      an
      entity owned by GPLP, provided services to TGC for predevelopment work on two
      projects in 2003 and was paid $59 for those services.





73


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





*Triad
      CM*





The
      Company paid Triad CM (“Triad”), fifty percent (50%) of which was owned by TGC,
      which is wholly owned by Herbert Glimcher, $137 for the year ended December
      31,
      2003 in connection with subcontracting work at the Company’s Properties. TGC
      disposed of its entire interest in Triad effective September 2003, and therefore
      transactions subsequent to October 1, 2003 are not disclosed. The joint ventures
      controlled by the Company or in which the Company has a minority interest and
      is
      a passive investor paid Triad approximately $1,869 for the year ended December
      31, 2003.





*Loans
      and Guarantees*





With
      respect to the development of Polaris, pursuant to the requirements of the
      Construction Loan Agreement, dated October 13, 2000, Herbert Glimcher provided
      a
      $4,000 letter of credit (“Letter of Credit”) to guarantee certain obligations of
      the Company under the Construction Loan Agreement. The Letter of Credit was
      terminated on May 29, 2002. At December 31, 2002 the Company accrued $40 as
      consideration to Herbert Glimcher for providing the Letter of Credit to the
      banks. Such consideration was regarded as the equivalent of the amount a bank
      would charge to issue such Letter of Credit. That fee was paid to Herbert
      Glimcher in March 2003.





The
      Glimcher Group, owned by Robert Glimcher, a son of Herbert Glimcher and a
      brother of Michael Glimcher, the CEO, Company President and Trustee, reimbursed
      the Company $8, $8 and $10 for the expenses of shared space at a convention
      in
      May 2005, 2004 and 2003, respectively. The David J. Glimcher Co., owned by
      David
      Glimcher, reimbursed the Company $4 and $10 related to expenses for shared
      space
      at a convention in May 2004 and 2003, respectively.





*Archer-Meek-Weiler
      Insurance Agency*




The
      Company has engaged Archer-Meek-Weiler, a company of which Alan R. Weiler,
      a
      Trustee, is Chairman, as its agent for the purpose of obtaining property,
      liability and employee practices liability insurance coverage. In connection
      with securing such insurance coverage, Archer-Meek-Weiler received net
      commissions of $306, $300 and $224 for the years ended December 31, 2005, 2004
      and 2003, respectively.





*Polaris
      Mall Transactions*





On
      January 5, 2004, GPLP completed the acquisition of the joint venture interests
      not previously owned by the Company in Polaris Mall, LLC, the indirect owner
      of
      Polaris, from NP Limited Partnership (“NPLP”), an Ohio limited partnership, and
      other parties. As part of the transaction, the Company acquired in fiscal year
      2004 the remaining 60.7% interest in Polaris Mall, LLC for approximately
      $46,500, which was paid with approximately $33,000 in cash and the balance
      by
      the issuance of 594,342 OP Units in GPLP valued at approximately
      $13,500.





On
      January 5, 2004, GPLP also completed the acquisition of the joint venture
      interests not previously owned by the Company in Polaris Center, LLC, the owner
      of Polaris Towne Center, a 443,165 square foot town center located in Columbus,
      Ohio, from NPLP. As part of the transaction, the Company acquired in fiscal
      year
      2004 the remaining 50% interest in Polaris Center, LLC for approximately
      $10,000, which was paid in cash.





Mr.
      Weiler, his spouse and children own, in its entirety, WSS Limited Partnership,
      an Ohio limited partnership (“WSS”). WSS directly owns OP Units of limited
      partnership in GPLP. WSS also indirectly owns OP Units by virtue of its
      ownership interest in NPLP. WSS also owns an interest in Star-Weiler Limited
      Partnership, an Ohio limited partnership (“Star-Weiler”). Star Weiler owns an
      interest in NPLP. Mr. Weiler’s children, nieces and nephews also indirectly own
      an interest in NPLP. In addition, Mr. Weiler’s sister-in-law previously owned an
      interest in Polaris Mall, LLC, which interest was acquired by GPLP on January
      5,
      2004.





Following
      the acquisition of the joint venture interests not previously owned by the
      Company in Polaris Mall, LLC and Polaris Center, LLC, NPLP and WSS converted
      the
      OP Units to Common Shares.




74


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





*Leasing
      Activity*





A
      brother
      of Herbert Glimcher owns a company that leases six store locations in the
      Company’s Properties. Minimum Rents were $266, $268 and $268 for the years ended
      December 31, 2005, 2004 and 2003, respectively.





Herbert
      Glimcher has provided a loan guarantee to a private company unaffiliated with
      the Company that leased space beginning on November 16, 2002 in Polaris. Minimum
      rent was $17 and $21 for the years ended December 31, 2004 and December 31,
      2003, respectively. The tenant vacated in 2004.




*HP
      Transaction / City Park Development*





In
      the
      second and third quarters of 2002, Trans State Development, LLC, a wholly owned
      subsidiary of the GDC, entered into certain options with an unrelated third
      party to purchase land in Mason, Ohio for a proposed development of a regional
      mall and community center. At the December 19, 2002 Board of Trustees meeting,
      the Company informed the Board it did not intend to proceed with the development
      of the proposed project. Trans State Development, LLC assigned its land options
      to HP Development LLC (“HP”) on January 31, 2003 pursuant to the terms of an
      Assignment Agreement. The Assignment Agreement provided for reimbursement by
      HP
      to Trans State Development, LLC of all costs it had incurred to the date of
      the
      assignment in conjunction with the options. In addition, on January 31, 2003,
      the Company entered into a Master Leasing Agreement with HP for the Company
      to
      provide leasing, legal and pre-development services. Beginning in February
      2003,
      advances were made from Ellen Glimcher, doing business as Dell Property Group,
      Ltd. to HP. The Board of Trustees was unaware of these fund transfers or the
      involvement with HP of Ellen Glimcher through Dell Property Group, Ltd. During
      the year ended December 31, 2003, HP received $471 from Dell Property Group,
      Ltd., of which $350 was used to make payments to the Company for the land
      options and services provided under the Master Leasing Agreement during the
      year
      ended December 31, 2003. Ellen Glimcher is the daughter of Herbert Glimcher,
      and
      the sister of Michael Glimcher. On December 11, 2003, the Company cancelled
      the
      Master Leasing Agreement between HP and Trans State Development, LLC and HP
      assigned the land options to Trans State Development. In consideration for
      the
      assignment of the options, Trans State Development agreed to reimburse HP
      Development for costs incurred related to the project plus a $25 service
      fee, for a total of $696. The Board of Trustees was unaware of the transfer
      of
      funds from Dell Property Group, Ltd. or the involvement of Ellen Glimcher
      through Dell Property Group Ltd. with HP at the time the land options were
      assigned to HP on January 31, 2003 or assigned to the Company on December 11,
      2003. At December 31, 2003, the Company had a payable of $696 to HP, which
      was
      paid by the Company on January 15, 2004. In February 2004, the Board of Trustees
      became aware of the involvement of and funds transferred by Ellen Glimcher
      through Dell Property Group Ltd. to HP. In February 2004, the Audit Committee
      of
      the Board of Trustees considered and approved each of the past transactions
      as
      part of its determination for the Company to proceed with the
      project.





**13.**
            **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. Additionally, one of GRT’s
      Properties is subject to long-term ground leases where a third party owns the
      underlying land and has leased the land to GRT. GRT pays rent of $14 per annum
      for the use of the land and generally is responsible for the costs and expenses
      associated with maintaining the building and improvements thereto. Future
      minimum rental payments as of December 31, 2005 are as follows:





**Office**
              **Lease**
            
            **Ground**
              **Leases**2006
            
            $
            436
            
            $
            142007
            
            
            436
            
            
            142008
            
            
            36
            
            
            142009
            
            
            -
            
            
            142010
            
            
            -
            
            
            12Thereafter
            
            
            -
            
            
            -$
            908
            
            $
            68




75


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





Office
      rental expenses (including miscellaneous month-to-month lease rentals) for
      the
      years ended December 31, 2005, 2004 and 2003 were $491, $416 and $617,
      respectively. Ground lease expenses for the years ended December 31, 2005,
      2004
      and 2003 were $14, $14 and $14, respectively.





The
      Company had provided guarantees in connection with the outstanding debt of
      Polaris. In connection with the development of Polaris, the Operating
      Partnership provided the lender with a completion guarantee and an unconditional
      guarantee of payment of $60,000 (50.0% of the outstanding obligation on the
      indebtedness on the property). Upon refinancing of the construction loan on
      April 1, 2003, these guarantees were released. In connection with the new
      mortgage loan, the Operating Partnership provided the lender with a guarantee
      until certain tenant allowances are paid. The guarantee was $89 at December
      31,
      2005. As of December 31, 2005, no provision for losses have been provided in
      connection with this guarantee, as the Company does not expect to incur any
      liability.





At
      December 31, 2005, there were 3.1 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 Shares for
      each OP Unit. The fair value of the OP Units outstanding at December 31, 2005
      is
      $80,200 based upon a per unit value of $25.74 at December 31, 2005, (based
      upon
      a five-day average of the Common Stock price from December 22, 2005 to December
      29, 2005).





In
      addition, 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. The Company has made $10,961 in payments under this agreement
      through December 31, 2005.





The
      Company has reserved $726 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. During the fourth quarter of 2005, the
      Company established a contingency reserve of $400 in association with a
      litigation between GDC and a service provider.





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.





During
      the fourth quarter of 2004, GRT received a subpoena for documents from the
      Securities and Exchange Commission (“SEC”) in connection with an investigation
      concerning the election by PricewaterhouseCoopers LLP not to renew its
      engagement as the independent accountant for the Company (which was previously
      reported by GRT in Forms 8-K and 8-K/A filed on June 8 and June 15, 2004,
      respectively) and a related party transaction involving the Company’s City Park
      development project (which transaction was previously reported by GRT in its
      Form 10-K filed on March 12, 2004). During the first quarter of 2005, the
      Company also received a subpoena for documents from the SEC that primarily
      seeks
      documents concerning the restatement of the Company's financial statements
      for
      the years ended 2001 through 2003 (which restatement was reported by the Company
      in a Form 8-K filed on February 22, 2005). The Company is cooperating fully
      with
      each investigation.





76


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





**14.**
            **Share
                Option Plans**





GRT
      has
      established the 1993 Employee Share Option Plan (the “1993 Employee Plan”), the
      1993 Trustee Share Option Plan (the “1993 Trustee Plan”), 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 1993 Employee Plan, the 1993 Trustee Plan,
      the Incentive Plan and the 2004 Plan are collectively referred to as the
“Plans”). A maximum of 400,000 shares have been reserved for issuance under the
      1993 Employee Plan, a maximum of 700,000 shares have been reserved for issuance
      under the 1993 Trustee Plan, a maximum of 3,000,000 shares have been reserved
      for issuance under the Incentive Plan and a maximum of 1,100,000 shares have
      been reserved for issuance under the 2004 Plan.





A
      summary
      of the status of the Company's Plans at December 31, 2005, 2004 and 2003 and
      changes during the years ending on those dates is presented below. Options
      issued under the Plans are included under the categories trustee plan or
      employee plan, based upon the individual to whom the option was granted,
      depending upon whether that individual is an employee or a trustee.




**Options**
            
            **2005
                Weighted-Average
                Exercise**
              **Price**
            
            **Options**
            
            **2004
                Weighted-Average
                Exercise**
              **Price**
            
            **Options**
            
            **2003
                Weighted-Average
                Exercise**
              **Price****Trustee
                Plan:**Outstanding
                at beginning of year
            
            
            1,183,100
            
            $
            18.454
            
            
            1,156,000
            
            $
            17.525
            
            
            1,241,500
            
            $
            17.526Granted
            
            
            21,000
            
            $
            25.670
            
            
            168,000
            
            $
            25.236
            
            
            121,000
            
            $
            18.930Exercised
            
            
            (162,580
            )
            $
            13.981
            
            
            (80,900
            )
            $
            17.615
            
            
            (206,500
            )
            $
            18.259Forfeited
            
            
            -
            
            
            
            
            
            (60,000
            )
            $
            21.216
            
            
            -Outstanding
                at end of year
            
            
            1,041,520
            
            $
            19.299
            
            
            1,183,100
            
            $
            18.454
            
            
            1,156,000
            
            $
            17.525**Employee
                Plan:**Outstanding
                at beginning of year
            
            
            945,471
            
            $
            21.304
            
            
            1,079,226
            
            $
            16.950
            
            
            1,033,767
            
            $
            16.951Granted
            
            
            313,750
            
            $
            25.505
            
            
            391,178
            
            $
            25.236
            
            
            325,000
            
            $
            18.930Exercised
            
            
            (223,804
            )
            $
            19.044
            
            
            (422,982
            )
            $
            17.335
            
            
            (207,032
            )
            $
            14.811Forfeited
            
            
            (128,839
            )
            $
            24.030
            
            
            (101,951
            )
            $
            20.865
            
            
            (72,509
            )
            $
            17.293Outstanding
                at end of year
            
            
            906,578
            
            $
            22.687
            
            
            945,471
            
            $
            21.304
            
            
            1,079,226
            
            $
            16.950Options
                  exercisable at year-end underthe
                Trustee Plan
            
            
            930,187
            
            
            
            
            
            933,100
            
            
            
            
            
            964,330Options
                exercisable at year-end underthe
                Employee Plan
            
            
            381,397
            
            
            
            
            
            328,304
            
            
            
            
            
            555,007Weighted-average
                fair value of optionsgranted
                during the year
            
            $
            1.0727
            
            
            
            
            $
            1.2663
            
            
            
            
            $
            0.4560





The
      fair
      value of each option grant was estimated on the date of the grant using the
      Black-Scholes options pricing model with the following assumptions: weighted
      average risk free interest rates used in 2005, 2004 and 2003 were 5.0%, 5.6%
      and
      6.2%, respectively. Expected average lives of five years, annual dividend rates
      of $1.9232 and weighted average volatility of 12.3%, 12.2% and 11.8% in 2005,
      2004 and 2003, respectively.





77


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





The
      following table summarizes information regarding the options outstanding at
      December 31, 2005 under the Company’s plans:




**Options
                Outstanding**
            
            **Options
                Exercisable****Range
                of****Exercise
                Prices**
            
            **Number**
              **Outstanding****at**
              **December
                31,
                2005**
            
            **Weighted-**
              **Average**
              **Remaining**
              **Contractual
                Life**
            
            **Weighted-**
              **Average**
              **Exercise
                Price**
            
            **Number**
              **Exercisable
                at**
              **December
                31,
                2005**
            
            **Weighted-**
              **Average**
              **Exercise
                Price**Trustee
                Plan:$17.000
            
            
            32,854
            
            
            0.2
            
            
            $17.000
            
            
            32,854
            
            
            $17.000$18.750
                - $20.750
            
            
            266,348
            
            
            1.4
            
            
            $20.216
            
            
            266,348
            
            
            $20.216$20.500
            
            
            97,622
            
            
            2.4
            
            
            $20.500
            
            
            97,622
            
            
            $20.500$15.000
            
            
            263,334
            
            
            3.2
            
            
            $15.000
            
            
            263,334
            
            
            $15.000$12.280
            
            
            3,000
            
            
            4.2
            
            
            $12.280
            
            
            3,000
            
            
            $12.280$14.750
            
            
            3,000
            
            
            5.2
            
            
            $14.750
            
            
            3,000
            
            
            $14.750$17.610
            
            
            94,644
            
            
            6.2
            
            
            $17.610
            
            
            94,644
            
            
            $17.610$18.930
            
            
            100,718
            
            
            7.2
            
            
            $18.930
            
            
            67,385
            
            
            $18.930$19.560
                - $26.690
            
            
            159,000
            
            
            8.2
            
            
            $25.236
            
            
            84,000
            
            
            $25.314$25.67
            
            
            21,000
            
            
            9.2
            
            
            $25.670
            
            
            18,000
            
            
            $25.670$12.280
                - $26.690
            
            
            1,041,520
            
            
            4.1
            
            
            $19.299
            
            
            930,187
            
            
            $18.966Employee
                Plan:$20.500
            
            
            51,000
            
            
            2.4
            
            
            $20.500
            
            
            51,000
            
            
            $20.500$15.000
            
            
            2,000
            
            
            3.2
            
            
            $15.000
            
            
            2,000
            
            
            $15.000$12.280
            
            
            5,135
            
            
            4.2
            
            
            $12.280
            
            
            5,135
            
            
            $12.280$14.750
            
            
            47,169
            
            
            5.2
            
            
            $14.750
            
            
            47,169
            
            
            $14.750$17.610
            
            
            68,673
            
            
            6.2
            
            
            $17.610
            
            
            68,673
            
            
            $17.610$18.930
                - $22.360
            
            
            178,017
            
            
            7.2
            
            
            $19.072
            
            
            114,087
            
            
            $19.044$19.560
                - $26.690
            
            
            280,334
            
            
            8.3
            
            
            $25.470
            
            
            93,333
            
            
            $25.468$24.740
                - $25.670
            
            
            274,250
            
            
            9.2
            
            
            $25.482
            
            
            -
            
            
            -$12.280
                - $26.690
            
            
            906,578
            
            
            7.7
            
            
            $22.687
            
            
            381,397
            
            
            $20.540





All
      options granted under the employee plan and options under the trustee plan,
      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, 18,000 and 21,000
      shares granted under the trustee plan in 2005, 2004 and 2003, respectively.





**15.**
            **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. Participant’s salary deferrals up to a maximum of 4.0% of
      qualified compensation were matched at 50.0% for the two years ending December
      31, 2004. The Company contributed $373, $228 and $190 to the plan in 2005,
      2004
      and 2003, respectively. Effective January 1, 2005, participant’s salary
      deferrals up to a maximum of 6% of qualified compensation were matched at
      50.0%.





78


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





**16.**
            **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, 2005, 2,100,000 Shares were
      authorized of which 250,197 Shares have been issued.





**17.**
            **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,****2005**
              
              **2004**
              
              **2003****Income**
              
              **Shares**
              
              **Per**
                **Share**
              
              **Income**
              
              **Shares**
              
              **Share**
              
              **Per**
                **Income**
              
              **Shares**
              
              **Per**
                **Share**Basic
                  EPSIncome
                  from continuing operations
              
              $
              32,103
              
              
              
              
              
              
              
              $
              25,655
              
              
              
              
              
              
              
              $
              22,053Less:
                  Preferred stock dividends
              
              
              (17,437
              )
              
              
              
              
              
              
              
              (17,517
              )
              
              
              
              
              
              
              
              (13,688
              )Preferred
                  stock redemption
              
              
              -
              
              
              
              
              
              
              
              
              (4,878
              )
              
              
              
              
              
              
              
              -Add:
                  Minority interest adjustments (1)
              
              
              (965
              )
              
              
              
              
              
              
              
              2,382
              
              
              
              
              
              
              
              
              920Income
                  from continuing operations
              
              $
              13,701
              
              
              36,036
              
              $
              0.38
              
              $
              5,642
              
              
              35,456
              
              $
              0.16
              
              $
              9,285
              
              
              34,704
              
              $
              0.27Discontinued
                  operations
              
              $
              (11,253
              )
              
              
              
              
              
              
              $
              26,100
              
              
              
              
              
              
              
              $
              10,908Less:
                  Minority interest adjustment (1)
              
              
              965
              
              
              
              
              
              
              
              
              (2,382
              )
              
              
              
              
              
              
              
              (920
              )Discontinued
                  operations
              
              $
              (10,288
              )
              
              36,036
              
              $
              (0.29
              )
              $
              23,718
              
              
              35,456
              
              $
              0.67
              
              $
              9,988
              
              
              34,704
              
              $
              0.29Diluted
                  EPSIncome
                  from continuing operations
              
              $
              32,103
              
              
              36,036
              
              
              
              
              $
              25,655
              
              
              35,456
              
              
              
              
              $
              22,053
              
              
              34,704Less:
                  Preferred stock dividends
              
              
              (17,437
              )
              
              
              
              
              
              
              
              (17,517
              )
              
              
              
              
              
              
              
              (13,688
              )Preferred
                  stock redemption
              
              
              -
              
              
              
              
              
              
              
              
              (4,878
              )
              
              
              
              
              
              
              
              -Add:
                  Minority interest
              
              
              252
              
              
              
              
              
              
              
              
              2,906
              
              
              
              
              
              
              
              
              1,703Operating
                  Partnership Units
              
              
              
              
              
              3,333
              
              
              
              
              
              
              
              
              3,549
              
              
              
              
              
              
              
              
              3,151Options
              
              
              
              
              
              449
              
              
              
              
              
              
              
              
              491
              
              
              
              
              
              
              
              
              366Restricted
                  shares
              
              
              
              
              
              38Income
                  from continuing operations
              
              $
              14,918
              
              
              39,856
              
              $
              0.37
              
              $
              6,166
              
              
              39,496
              
              $
              0.16
              
              $
              10,068
              
              
              38,221
              
              $
              0.26Discontinued
                  operations
              
              $
              (11,253
              )
              
              
              
              $
              (0.28
              )
              $
              26,100
              
              
              
              
              $
              0.66
              
              $
              10,908
              
              
              
              
              $
              0.29




(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. The number of such options was 599
        thousand, 429 thousand and 225 thousand for the years ended December 31,
        2005,
        2004 and 2003, respectively .


**18.**
            **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 5.05% to 7.28% per annum
      at December 31, 2005 and 4.34% to 6.63% per annum at December 31, 2004), the
      fair value of GRT’s mortgage notes payable is estimated at $1,358,744 and
      $1,353,610 at December 31, 2005 and 2004, 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.




79


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





**19.**
            **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 2005 and
      no
      material adjustments have been made to the original allocations.





Intangibles,
      which were recorded at the acquisition date, associated with acquisitions of
      WestShore Plaza Mall, Eastland Ohio, Polaris and Polaris Towne Center are
      comprised of an asset for acquired above-market leases of $7,940, a liability
      for acquired below-market leases of $17,951 and an asset for tenant
      relationships of $4,156. 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 weighted average amortization period
      of 10.7 years. Amortization of the tenant relationship is recorded as
      amortization expense on a straight-line basis over the estimated life of the
      12.5 years. Net amortization for all of the acquired intangibles is an increase
      to net income in the amount of $415, $611 and $158 for the twelve months ended
      December 31, 2005, 2004 and 2003, respectively. The net book value of the
      above-market leases is $5,494 and $6,742 as of December 31, 2005 and December
      31, 2004, 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 $13,663 and $15,655 as of December 31, 2005 and December
      31, 2004, 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 $3,498 and $3,827 as of December 31, 2005 and December 31,
      2004, respectively and is included in prepaid and other assets on the
      consolidated balance sheet. Net amortization of these intangibles as an increase
      to net income will be as follows:





For
                the year ending December 31, 2006
            
            $
            339For
                the year ending December 31, 2007
            
            
            413For
                the year ending December 31, 2008
            
            
            498For
                the year ending December 31, 2009
            
            
            502For
                the year ending December 31, 2010
            
            
            576$
            2,328





**20.**
            **Discontinued
                Operations**





Financial
      results of Properties the Company sold in previous periods and classified as
      held for sale as of year-end are reflected in discontinued operations for all
      periods reported in the consolidated statements of income. In the consolidated
      balance sheet the real estate assets held for sale and the mortgages associated
      with those assets are presented separate from the assets to be held and used.
      Other assets and liabilities associated with these held for sale properties
      are
      insignificant and are not separately disclosed. The table below summarizes
      key
      financial results and data for these operations:





**For
                the Years Ended December
                31,********2005**
            
            ******2004**
            
            ******2003**Revenues
            
            $
            17,807
            
            $
            28,197
            
            $
            32,710Income
                from operations
            
            $
            3,521
            
            $
            6,454
            
            $
            12,665Impairment
                losses
            
            $
            16,393
            
            $
            -
            
            $
            2,460Gain
                on sale
            
            $
            1,619
            
            $
            19,646
            
            $
            703Number
                of Properties sold
            
            
            6
            
            
            29
            
            
            5Number
                of Properties held for sale
            
            
            8
            
            
            1
            
            
            2Real
                estate assets held for sale
            
            $
            72,178
            
            $
            1,590
            
            $
            1,675Mortgage
                notes payable associated with properties held for sale
            
            $
            52,289
            
            $
            -
            
            $
            -





80


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - continued**


**(dollars
      in thousands, except share and unit amounts)**





**21.**
            **Subsequent
                Events**





On
      January 17, 2006, the Company acquired Tulsa Promenade. Tulsa Promenade is
      a
      regional mall located in Tulsa, Oklahoma with approximately 927,000 square
      feet
      of gross leasable area. The purchase price was $58,300 and the Company did
      not
      assume any debt in connection with the purchase.





On
      February 7, 2006, the Company sold Pea Ridge Plaza, a Community Center asset
      in
      Huntington, West Virginia for $5,400. The Company used the proceeds to pay
      down
      debt. Pea Ridge Plaza was classified as held for sale at December 31, 2005
      and
      the operating results of the property were included in discontinued
      operations.





On
      January 13, 2006, the Company entered into a Loan Agreement to borrow $30,000
      (the “Loan”). The Loan is represented by a promissory note secured by a first
      mortgage lien and assignment of leases and rents on The Great Mall of the Great
      Plains located in Olathe, Kansas. The Loan has a floating interest rate of
      LIBOR
      plus 1.65% per annum and a maturity date of January 13, 2009. The Loan Agreement
      requires the Company to make interest only periodic payments with all
      outstanding principal and accrued interest being due and payable at the maturity
      date. The Agreement contains default provisions customary for transactions
      of
      this nature. The proceeds of the Loan where used to payoff the previous loan
      in
      the same amount.





On
      January 19, 2006, the Company entered into an Interest Rate Swap Agreement
      (“the
      swap”) to hedge the interest rate risk exposure on the $30,000 variable-rate
      Loan noted above. The swap, effective February 15, 2006, will effectively fix
      the Company’s interest payments on the Loan at a rate of 4.7025% plus the credit
      spread on the debt through January 15, 2008. In addition, the Company
      dedesignated the existing $30,000 interest rate cap as a cash flow hedge under
      SFAS 133.





**22.**
            **Interim
                Financial Information (unaudited)**





**Year
                Ended December 31,
                2005**
            
            **First**
              **Quarter**
            
            **Second**
              **Quarter**
            
            **Third**
              **Quarter**
            
            **Fourth**
              **Quarter**Total
                revenues
            
            $
            79,573
            
            $
            80,458
            
            $
            84,776
            
            $
            90,052Total
                revenues as previously reported
            
            $
            84,827
            
            $
            84,654
            
            $
            84,776
            
            $
            90,052Operating
                income
            
            $
            25,620
            
            $
            24,579
            
            $
            31,030
            
            $
            35,520Operating
                income as previously reported
            
            $
            27,753
            
            $
            26,203
            
            $
            31,030
            
            $
            35,520Net
                income
            
            $
            5,796
            
            $
            3,279
            
            $
            (2,342
            )
            $
            14,117Net
                income available to common shareholders
            
            $
            1,437
            
            $
            (1,080
            )
            $
            (6,702
            )
            $
            9,758Earnings
                per share (diluted)
            
            $
            0.04
            
            $
            (0.03
            )
            $
            (0.18
            )
            $
            0.27




**Year
                Ended December 31,
                2004**
            
            **First**
              **Quarter**
            
            **Second**
              **Quarter**
            
            **Third**
              **Quarter**
            
            **Fourth**
              **Quarter**Total
                revenues
            
            $
            80,194
            
            $
            81,676
            
            $
            79,001
            
            $
            86,111Total
                revenues as previously reported
            
            $
            84,827
            
            $
            85,361
            
            $
            79,001
            
            $
            90,929Operating
                income
            
            $
            28,130
            
            $
            28,449
            
            $
            27,891
            
            $
            33,150Operating
                income as previously reported
            
            $
            29,534
            
            $
            29,571
            
            $
            27,891
            
            $
            35,016Net
                income
            
            $
            10,077
            
            $
            6,912
            
            $
            24,663
            
            $
            10,103Net
                income available to common shareholders
            
            $
            760
            
            $
            2,553
            
            $
            20,303
            
            $
            5,774Earnings
                per share (diluted)
            
            $
            0.02
            
            $
            0.07
            
            $
            0.56
            
            $
            0.16





Total
      revenues and operating income for 2005 and 2004 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 2005 and 2004
      relate to changes in property classification from continuing to discontinuing
      operations.




81


**GLIMCHER
                  REALTY TRUST****SCHEDULE
                  III - REAL ESTATE AND ACCUMULATED DEPRECIATION****as
                  of December 31, 2005****(dollars
                  in thousands)**
  **Initial
                    Cost**
                
                **Costs
                    Capital-ized Sub-sequent **to
                    Acquisi-tion****
                
                **Gross
                    Amounts at Which**
                  **Carried
                    at Close of Period****Description
                    and Location**
                  ****of
                    Property****
                
                **Encum-brances
                    [d]**
                
                **Land**
                
                **Build-**
                  **ings
                    and Improve-ments [a]**
                
                **Improve-ments
                    and Adjust **-ments****
                
                **Land
                    [b]**
                
                ****Build-****
                  ****ings
                    and**Improve-ments [c]**
                
                **Total
                    **[b]
                    [c]****
                
                **Accumu-lated
                    **Deprecia-tion****
                
                ******Date**Construc-tion**Was **Com-pleted****
                
                **Date
                    **Acquired****
                
                ******Life
                    Upon Which**Depre-ciation in Latest Statement**of Opera-tions is **Computed****
  **MALL
                    PROPERTIES**Almeda
                    Mall
                
                
                (f)Houston,
                    TX
                
                
                
                
                $
                6,859
                
                $
                16,034
                
                $
                862
                
                $
                7,621
                
                $
                16,134
                
                $
                23,755
                
                $
                4,400
                
                
                
                
                
                2002
                
                
                [e]Ashland
                    Town CenterAshland,
                    KY
                
                $
                25,307
                
                
                3,866
                
                
                21,454
                
                
                7,555
                
                
                4,144
                
                
                28,731
                
                
                32,875
                
                
                11,916
                
                
                1989
                
                
                
                
                
                [e]Colonial
                    Park MallHarrisburg,
                    PA
                
                $
                32,975
                
                
                9,765
                
                
                43,770
                
                
                1,312
                
                
                9,704
                
                
                45,143
                
                
                54,847
                
                
                12,621
                
                
                
                
                
                2003
                
                
                [e]Dayton
                    MallDayton,
                    OH
                
                $
                56,717
                
                
                9,068
                
                
                90,676
                
                
                736
                
                
                8,711
                
                
                91,769
                
                
                100,480
                
                
                22,861
                
                
                
                
                
                2002
                
                
                [e]Eastland
                    MallColumbus,
                    OH
                
                $
                41,669
                
                
                12,570
                
                
                17,794
                
                
                14,005
                
                
                12,937
                
                
                31,432
                
                
                44,369
                
                
                1,150
                
                
                
                
                
                2003
                
                
                [e]Grand
                    Central MallParkersburg,
                    WV
                
                $
                48,572
                
                
                3,961
                
                
                41,135
                
                
                31,482
                
                
                3,961
                
                
                72,617
                
                
                76,578
                
                
                23,171
                
                
                
                
                
                1993
                
                
                [e]Great
                    Mall of the Great PlainsOlathe,
                    KS
                
                $
                30,000
                
                
                15,646
                
                
                101,790
                
                
                9,758
                
                
                14,465
                
                
                112,729
                
                
                127,194
                
                
                35,007
                
                
                1999
                
                
                
                
                
                [e]Indian
                    Mound MallHeath,
                    OH
                
                
                
                
                
                892
                
                
                19,497
                
                
                12,343
                
                
                773
                
                
                31,959
                
                
                32,732
                
                
                15,943
                
                
                1986
                
                
                
                
                
                [e]Jersey
                    Gardens MallElizabeth,
                    NJ
                
                $
                161,371
                
                
                32,498
                
                
                206,478
                
                
                19,002
                
                
                33,480
                
                
                224,498
                
                
                257,978
                
                
                56,380
                
                
                2000
                
                
                
                
                
                [e]Lloyd
                    Center MallPortland,
                    OR
                
                $
                135,326
                
                
                47,737
                
                
                115,219
                
                
                37,801
                
                
                47,737
                
                
                153,020
                
                
                200,757
                
                
                27,832
                
                
                
                
                
                1998
                
                
                [e]The
                    Mall at Fairfield CommonsBeavercreek,
                    OH
                
                $
                110,871
                
                
                5,438
                
                
                102,914
                
                
                21,483
                
                
                7,696
                
                
                122,139
                
                
                129,835
                
                
                40,422
                
                
                1993
                
                
                
                
                
                [e]The
                    Mall at Johnson CityJohnson
                    City, TN
                
                $
                39,214
                
                
                4,462
                
                
                39,439
                
                
                2,813
                
                
                4,405
                
                
                42,309
                
                
                46,714
                
                
                10,901
                
                
                
                
                
                2000
                
                
                [e]Montgomery
                    MallMontgomery,
                    AL
                
                $
                25,000
                
                
                10,382
                
                
                60,311
                
                
                5,827
                
                
                10,382
                
                
                66,138
                
                
                76,520
                
                
                14,625
                
                
                
                
                
                1998
                
                
                [e]Morgantown
                    MallMorgantown,
                    WV
                
                
                (g
                )
                
                1,273
                
                
                40,484
                
                
                5,122
                
                
                1,556
                
                
                45,323
                
                
                46,879
                
                
                18,600
                
                
                1990
                
                
                
                
                
                [e]New
                    Towne MallNew
                    Philadelphia, OH
                
                
                
                
                
                1,190
                
                
                23,475
                
                
                7,289
                
                
                1,248
                
                
                30,706
                
                
                31,954
                
                
                13,555
                
                
                1988
                
                
                
                
                
                [e]Northtown
                    MallBlaine,
                    MN
                
                
                
                
                
                13,264
                
                
                40,988
                
                
                15,492
                
                
                13,724
                
                
                56,020
                
                
                69,744
                
                
                11,849
                
                
                
                
                
                1998
                
                
                [e]
   82
 **GLIMCHER
                      REALTY TRUST****SCHEDULE
                      III - REAL ESTATE AND ACCUMULATED DEPRECIATION****as
                      of December 31, 2005****(dollars
                      in thousands)**
 **Initial
                        Cost**
                    
                    **Costs
                        Capital-ized Sub-sequent **to
                        Acquisi-tion****
                    
                    **Gross
                        Amounts at Which**
                      **Carried
                        at Close of Period****Description
                        and Location**
                      ****of
                        Property****
                    
                    **Encum-brances
                        [d]**
                    
                    **Land**
                    
                    **Build-**
                      **ings
                        and Improve-ments [a]**
                    
                    **Improve-ments
                        and Adjust **-ments****
                    
                    **Land
                        [b]**
                    
                    ****Build-****
                      ****ings
                        and**Improve-ments [c]**
                    
                    **Total
                        **[b]
                        [c]****
                    
                    **Accumu-lated
                        **Deprecia-tion****
                    
                    ******Date**Construc-tion**Was **Com-pleted****
                    
                    **Date
                        **Acquired****
                    
                    ******Life
                        Upon Which**Depre-ciation in Latest Statement**of Opera-tions is **Computed****
 Northwest
                    MallHouston,
                    TX
                
                
                (f
                )
                $
                9,114
                
                $
                12,820
                
                $
                (195
                )
                $
                9,928
                
                $
                11,811
                
                $
                21,739
                
                $
                3,194
                
                
                
                
                
                2002
                
                
                [e]Polaris
                    Fashion PlaceColumbus,
                    OH
                
                $
                144,439
                
                
                36,687
                
                
                167,251
                
                
                1,396
                
                
                38,661
                
                
                166,673
                
                
                205,334
                
                
                22,030
                
                
                
                
                
                2004
                
                
                [e]River
                    Valley MallLancaster,
                    OH
                
                $
                50,000
                
                
                875
                
                
                26,910
                
                
                18,424
                
                
                1,001
                
                
                45,208
                
                
                46,209
                
                
                20,660
                
                
                1987
                
                
                
                
                
                [e]Supermall
                    of Great NWAuburn,
                    WA
                
                $
                60,341
                
                
                1,058
                
                
                104,612
                
                
                207
                
                
                7,187
                
                
                98,690
                
                
                105,877
                
                
                31,659
                
                
                
                
                
                2002
                
                
                [e]University
                    MallTampa,
                    FL
                
                $
                63,845
                
                
                13,314
                
                
                108,230
                
                
                4,561
                
                
                13,314
                
                
                112,791
                
                
                126,105
                
                
                25,661
                
                
                
                
                
                1997
                
                
                [e]Weberstown
                    MallStockton,
                    CA
                
                $
                19,126
                
                
                3,237
                
                
                23,479
                
                
                7,385
                
                
                3,298
                
                
                30,803
                
                
                34,101
                
                
                10,424
                
                
                
                
                
                1998
                
                
                [e]Westshore
                    PlazaTampa,
                    FL
                
                $
                96,804
                
                
                15,653
                
                
                145,158
                
                
                2,300
                
                
                15,653
                
                
                147,458
                
                
                163,111
                
                
                13,067
                
                
                
                
                
                2003
                
                
                [e]**COMMUNITY
                    CENTERS**Knox
                    Village SquareMount
                    Vernon, OH
                
                $
                8,865
                
                
                865
                
                
                8,479
                
                
                423
                
                
                869
                
                
                8,898
                
                
                9,767
                
                
                3,055
                
                
                1992
                
                
                
                
                
                [e]Morgantown
                    CommonsMorgantown,
                    WV
                
                
                (g
                )
                
                175
                
                
                7,549
                
                
                12,364
                
                
                -
                
                
                20,088
                
                
                20,088
                
                
                6,010
                
                
                1991
                
                
                
                
                
                [e]Ohio
                    River PlazaGallipolis,
                    OH
                
                
                
                
                
                502
                
                
                6,373
                
                
                204
                
                
                461
                
                
                6,618
                
                
                7,079
                
                
                2,643
                
                
                1989
                
                
                
                
                
                [e]Polaris
                    Town CenterColumbus,
                    OH
                
                $
                40,953
                
                
                19,082
                
                
                38,950
                
                
                172
                
                
                19,082
                
                
                39,122
                
                
                58,204
                
                
                6,414
                
                
                
                
                
                2004
                
                
                [e]**CORPORATE
                    ASSETS**Glimcher
                    Properties LimitedPartnership
                
                
                
                
                
                -
                
                
                1,780
                
                
                8,238
                
                
                
                
                
                10,018
                
                
                10,018
                
                
                3,838
                
                
                
                
                
                
                
                
                [e]Lloyd
                    Ice RinkOEC
                
                
                
                
                
                
                
                
                
                
                
                58
                
                
                -
                
                
                58
                
                
                58
                
                
                37
                
                
                
                
                
                
                
                
                [e]University
                    Mall TheaterOEC
                
                
                
                
                
                -
                
                
                -
                
                
                478
                
                
                -
                
                
                478
                
                
                478
                
                
                472
                
                
                
                
                
                
                
                
                [e]279,433
                
                
                1,633,049
                
                
                248,897
                
                
                291,998
                
                
                1,869,381
                
                
                2,161,379
                
                
                470,397
   83
 **GLIMCHER
                      REALTY TRUST****SCHEDULE
                      III - REAL ESTATE AND ACCUMULATED DEPRECIATION****as
                      of December 31, 2005****(dollars
                      in thousands)**
 **Initial
                          Cost**
                      
                      **Costs
                          Capital-ized Sub-sequent **to
                          Acquisi-tion****
                      
                      **Gross
                          Amounts at Which**
                        **Carried
                          at Close of Period****Description
                          and Location**
                        ****of
                          Property****
                      
                      **Encum-brances
                          [d]**
                      
                      **Land**
                      
                      **Build-**
                        **ings
                          and Improve-ments [a]**
                      
                      **Improve-ments
                          and Adjust **-ments****
                      
                      **Land
                          [b]**
                      
                      ****Build-****
                        ****ings
                          and**Improve-ments [c]**
                      
                      **Total
                          **[b]
                          [c]****
                      
                      **Accumu-lated
                          **Deprecia-tion****
                      
                      ******Date**Construc-tion**Was **Com-pleted****
                      
                      **Date
                          **Acquired****
                      
                      ******Life
                          Upon Which**Depre-ciation in Latest Statement**of Opera-tions is **Computed****
 **DEVELOPMENTS
                    IN PROGRESS**Georgesville
                    SquareColumbus,
                    OH
                
                
                
                
                
                
                
                
                
                
                $
                802
                
                $
                402
                
                $
                400
                
                $
                802Trans
                    State DevelopmentCincinnati,
                    OH
                
                
                
                
                
                
                
                
                
                
                
                8,845
                
                
                -
                
                
                8,845
                
                
                8,845Jersey
                    Gardens CenterElizabeth
                    , NJ
                
                
                
                
                $
                1,937
                
                $
                4,561
                
                
                (122
                )
                
                1,231
                
                
                5,145
                
                
                6,376Meadowview
                    SquareKent,
                    OH
                
                
                
                
                
                
                
                
                
                
                
                264
                
                
                264
                
                
                -
                
                
                264Other
                    Developments
                
                
                
                
                
                -
                
                
                -
                
                
                33,948
                
                
                -
                
                
                33,948
                
                
                33,9481,937
                
                
                4,561
                
                
                43,737
                
                
                1,897
                
                
                48,338
                
                
                50,235**ASSETS
                    HELD FOR SALE (h)**Eastland
                    MallCharlotte,
                    NC
                
                $
                44,559
                
                
                5,357
                
                
                47,860
                
                
                285
                
                
                5,315
                
                
                48,187
                
                
                53,502
                
                
                5,143
                
                
                
                
                
                2003
                
                
                [e]Ayden
                    PlazaAyden,
                    NC
                
                
                
                
                
                138
                
                
                1,243
                
                
                36
                
                
                138
                
                
                1,279
                
                
                1,417
                
                
                374
                
                
                
                
                
                1994
                
                
                [e]East
                    Pointe PlazaColumbia,
                    SC
                
                $
                7,729
                
                
                1,255
                
                
                11,294
                
                
                317
                
                
                1,229
                
                
                11,637
                
                
                12,866
                
                
                2,519
                
                
                
                
                
                1996
                
                
                [e]Lowe'sMarion,
                    OH
                
                
                
                
                
                626
                
                
                2,454
                
                
                3
                
                
                626
                
                
                2,457
                
                
                3,083
                
                
                750
                
                
                1993
                
                
                
                
                
                [e]Newberry
                    Square Shopping CenterNewberry,
                    SC
                
                
                
                
                
                594
                
                
                5,355
                
                
                (2,605
                )
                
                594
                
                
                2,750
                
                
                3,344
                
                
                1,491
                
                
                
                
                
                1994
                
                
                [e]Pea
                    Ridge Shopping CenterHuntington,
                    WV
                
                
                
                
                
                687
                
                
                6,160
                
                
                487
                
                
                687
                
                
                6,647
                
                
                7,334
                
                
                2,018
                
                
                
                
                
                1994
                
                
                [e]Scott
                    Town PlazaBloomsburg,
                    PA
                
                
                
                
                
                188
                
                
                1,730
                
                
                177
                
                
                188
                
                
                1,907
                
                
                2,095
                
                
                680
                
                
                
                
                
                1994
                
                
                [e]
  84
 **GLIMCHER
                      REALTY TRUST****SCHEDULE
                      III - REAL ESTATE AND ACCUMULATED DEPRECIATION****as
                      of December 31, 2005****(dollars
                      in thousands)**
 **Initial
                        Cost**
                    
                    **Costs
                        Capital-ized Sub-sequent **to
                        Acquisi-tion****
                    
                    **Gross
                        Amounts at Which**
                      **Carried
                        at Close of Period****Description
                        and Location**
                      ****of
                        Property****
                    
                    **Encum-brances
                        [d]**
                    
                    **Land**
                    
                    **Build-**
                      **ings
                        and Improve-ments [a]**
                    
                    **Improve-ments
                        and Adjust **-ments****
                    
                    **Land
                        [b]**
                    
                    ****Build-****
                      ****ings
                        and**Improve-ments [c]**
                    
                    **Total
                        **[b]
                        [c]****
                    
                    **Accumu-lated
                        **Deprecia-tion****
                    
                    ******Date**Construc-tion**Was **Com-pleted****
                    
                    **Date
                        **Acquired****
                    
                    ******Life
                        Upon Which**Depre-ciation in Latest Statement**of Opera-tions is **Computed****
 VincennesVincennes,
                    IN
                
                
                
                
                $
                208
                
                $
                1,875
                
                $
                21
                
                $
                208
                
                $
                1,896
                
                $
                2,104
                
                $
                592
                
                
                
                
                
                1994
                
                
                [e]9,053
                
                
                77,971
                
                
                (1,279
                )
                
                8,985
                
                
                76,760
                
                
                85,745
                
                
                13,567Total
                
                
                
                
                $
                290,423
                
                $
                1,715,581
                
                $
                291,355
                
                $
                302,880
                
                $
                1,994,479
                
                $
                2,297,359
                
                $
                483,964
    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, 2005.(c)
            The
                aggregate gross cost of building, improvements and equipment as of
                December 31, 2005.(d)
            See
                description of debt in Notes 5 and 6 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 ten years.(f)
            Properties
                cross-collateralize the following loan:
              SAN
                Mall, L.P.
            $33,523(g)
            Properties
                cross-collateralize the following loan:
              Morgantown
                Mall Associates Limited Partnership
            $53,381(h)
            Properties
              were held for sale at December 31, 2005.






**Reconciliation
      of Real Estate**


**Year
                  Ended December 31,****2005**
              
              ******2004**
              
              **2003**Balance
                  at beginning of year
              
              $
              2,250,640
              
              $
              2,092,202
              
              $
              1,802,207Additions:Improvements
              
              
              109,159
              
              
              32,684
              
              
              29,507Acquisitions
              
              
              -
              
              
              261,036
              
              
              297,398Deductions
              
              
              (148,185
              )
              
              (135,282
              )
              
              (36,910
              )Balance
                  at close of year
              
              $
              2,211,614
              
              $
              2,250,640
              
              $
              2,092,202








**Reconciliation
      of Accumulated Depreciation**


**Year
                  Ended December 31,********2005**
              
              **2004**
              
              **2003**Balance
                  at beginning of year
              
              $
              435,821
              
              $
              394,870
              
              $
              332,124Depreciation
                  expense and other
              
              
              77,815
              
              
              95,463
              
              
              73,107Deductions
              
              
              (43,239
              )
              
              (54,512
              )
              
              (10,361
              )Balance
                  at close of year
              
              $
              470,397
              
              $
              435,821
              
              $
              394,870




The
      aggregate cost of land and buildings, improvements and equipment for federal
      income tax purposes is approximately $2,268,443.







86