##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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Form 10-K

|           |  |                                                                                                              
|---------- |  | -------------------------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                                              
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
	15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]        
|          
|           |  | For the fiscal year ended December 31,
	2001                                                                 
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
	OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee
	Required]
|          
|           |  | For the transition period
	from           to                                                                 

Commission File Number: 1-12588



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Center Trust, Inc.

(Exact name of registrant as specified in
charter)


|                                                                |  |                                         
|--------------------------------------------------------------- |  | ----------------------------------------
|Maryland                                                        |  | 95-4444963                              
|(State or other jurisdiction of
	incorporation or organization) |  | (I.R.S. Employer
	Identification Number)

3500 Sepulveda Boulevard, Manhattan Beach,
California 90266

(Address of principal executive offices) (Zip
Code)


Registrants telephone number, including
area code

(310) 546-4520


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

|                                       |  |                                          
|-------------------------------------- |  | -----------------------------------------
|Title of Each Class                    |  | Name of Each Exchange on Which Registered
|                                       |  |                                          
|Common Stock, Par Value $.01 Per Share |  | New York Stock Exchange                  

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

None Registered


(Title of Class)




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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 at
least the past
90 days.     Yes þ          No o

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:     o

The aggregate market value of the voting stock
held by non-affiliates of the Registrant was approximately
$50,237,000 (computed on the basis of $4.57 per share), which
was the last sale price on the New York Stock Exchange on
March 15, 2002.

As of March 15, 2002, 27,656,405 shares of
common stock, Par Value $.01 per share of Center Trust, Inc.,
were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Form 10-K incorporates by
reference information from the Registrants definitive
Proxy Statement to be filed with the Securities and Exchange
Commission within 120 days of the close of
Registrants fiscal year ended December 31, 2001.



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TABLE OF CONTENTS



|              |                                                                                               |                                                          |  |  |  |  |  | 
|------------- | --------------------------------------------------------------------------------------------- | -------------------------------------------------------- |  |  |  |  |  | 
|PART I       
|              | Item 1. Business                                                                             
|              | Item 2. Properties                                                                           
|              | Item 3. Legal Proceedings                                                                    
|              | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II      
|              | Item 5. Market for Registrants Common Stock and Related Stockholder Matters                 
|              | Item 6. Selected Financial Data                                                              
|              | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|              | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                          
|              | Item 8. Financial Statements and Supplementary Data                                          
|              |                                                                                               | CONSOLIDATED BALANCE SHEETS                             
|              |                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS                   
|              |                                                                                               | CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY         
|              |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS                   
|              |                                                                                               | SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS        
|              |                                                                                               | SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION
|              | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III     
|              | Item 10. Directors and Executive Officers of The Registrant                                  
|              | Item 11. Executive Compensation                                                              
|              | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|              | Item 13. Certain Relationships and Related Transactions                                      
|PART IV      
|              | Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                    
|SIGNATURES   
|Exhibit 10.23
|EXHIBIT 21.1 
|EXHIBIT 23.1 



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##### Table of Contents



TABLE OF CONTENTS

|           |     |  |     |                                                                                        |  |  |    | 
|---------- | --- |  | --- | -------------------------------------------------------------------------------------- |  |  | -- | 
|Item       |     |  |     | Page                                                                                  
|           |     |  |     |                                                                                       
|PART I    
|           | 1.  |  |     | BUSINESS                                                                               |  |  | 2  | 
|           | 2.  |  |     | PROPERTIES                                                                             |  |  | 10 | 
|           | 3.  |  |     | LEGAL PROCEEDINGS                                                                      |  |  | 21 | 
|           | 4.  |  |     | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
	HOLDERS                                   |  |  | 21 | 
|          
|PART II   
|           | 5.  |  |     | MARKET FOR REGISTRANTS COMMON STOCK AND
	RELATED STOCKHOLDER MATTERS                  |  |  | 22 | 
|           | 6.  |  |     | SELECTED FINANCIAL DATA                                                                |  |  | 23 | 
|           | 7.  |  |     | MANAGEMENTS DISCUSSION AND ANALYSIS OF
	FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  |  | 24 | 
|           | 7a. |  |     | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
	MARKET RISK                            |  |  | 31 | 
|           | 8.  |  |     | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                            |  |  | 32 | 
|           | 9.  |  |     | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
	ACCOUNTING AND FINANCIAL DISCLOSURE  |  |  | 52 | 
|          
|PART III  
|           | 10. |  |     | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                     |  |  | 52 | 
|           | 11. |  |     | EXECUTIVE COMPENSATION                                                                 |  |  | 52 | 
|           | 12. |  |     | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
	AND MANAGEMENT                        |  |  | 52 | 
|           | 13. |  |     | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                         |  |  | 52 | 
|          
|PART IV   
|           | 14. |  |     | EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
	REPORTS ON FORM 8-K                      |  |  | 53 | 
|SIGNATURES |     |  | S-1 |                                                                                       

1



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##### Table of Contents






PART I




Item
1.     Business

Center Trust, Inc. (the Company), a
Maryland corporation, is a self-administered and self-managed
real estate investment trust. The Company engages in the
ownership, management, leasing, redevelopment, acquisition and
development of retail shopping centers in the western United
States.

As of December 31, 2001, the Companys
Properties consisted of 31 community shopping centers,
2 regional malls and 2 single tenant facilities. The
Companys ownership interest in the Properties is held
through various partnership interests. The Company is the sole
general partner of CT Operating Partnership, L.P., a
California limited partnership (the Operating
Partnership or OP), and owns a 94.9% interest
therein. Of the 35 Properties, 33 are wholly owned by
the Operating Partnership. Two of the Properties are owned by
partnerships in which the OP has a general partner interest,
including a 75% interest in Willowbrook Center Partnership and a
34% effective interest in Vermont Slauson Shopping Center, LTD
each of which own one asset. For purposes of securing various
mortgages, the OP has created a series of single purpose
entities. Of the 33 properties owned by the OP, ownership of 18
of these properties are held in 15 separate wholly-owned single
purpose entities.

The Company conducts substantially all of its
operations through the Operating Partnership and has full,
exclusive and complete responsibility and discretion in the
management and control of the Operating Partnership.

During the year 2001, the Company sold 6
properties, including 4 community shopping centers and two
single tenant facilities. The net proceeds from these sales were
used to reduce the amount outstanding under the Companys
secured line of credit. In January 2001, the Company repaid, in
full, its 7 1/2% Convertible Subordinated Debentures. See
additional discussion under Item 2 
Properties and Item 7 
Managements Discussion and Analysis of Financial Condition
and Results of Operation  Liquidity Sources and
Requirements.

On June 1, 1997 the Company entered into a
Stock Purchase Agreement (the Stock Purchase
Agreement) with LF Strategic Realty Investors, L.P. and
Prometheus Western Retail, LLC, affiliates of Lazard Freres Real
Estate Investors, LLC (together LFREI). Pursuant to
the Stock Purchase Agreement, LFREI purchased 15,666,666 shares
of common stock of the Company at a price of $15.00 per share,
for an aggregate purchase price of $235 million. The
stockholders of the Company approved the Agreement on
August 14, 1997. As of December 31, 2001, LFREI owned
56.7% of the outstanding common stock of the Company.

In connection with the Stock Purchase Agreement,
the Company and LFREI entered into a Stockholders Agreement (the
Stockholders Agreement) providing that until
August 14, 2002 (the Standstill Period) LFREI
and its affiliates may not, among other things (i) acquire
beneficial ownership of more than 49.9% of the outstanding
shares of common stock of the Company, on an Adjusted Fully
Diluted Basis (as defined below), (ii) sell, transfer or
otherwise dispose of any shares of common stock of the Company
except in accordance with certain specified limitations
(including a requirement that the Company, in its sole and
absolute discretion, approve any transfer in a negotiated
transaction that would result in the transferee beneficially
owning more than 9.8% of the Companys capital stock),
(iii) solicit, encourage or propose to effect or negotiate
certain business combination transactions, (iv) solicit,
encourage, initiate or participate in any solicitation of
proxies or become a participant in any election contest,
(v) seek board representation or a change in the
composition or size of the board, except as specifically
permitted, or (vi) assist or encourage any person or entity
with respect to any of he foregoing (collectively, the
Standstill Provisions). As used herein, the term
Adjusted Fully Diluted Basis shall mean on a diluted
basis, except that shares of common stock of the Company
issuable upon exercise of options granted under management
benefit plans shall not be included. In addition, during the
Standstill Period, LFREI and its affiliates have agreed to vote
all shares of Company common stock owned by them that represent
aggregate ownership in excess of 40% of the outstanding shares
of Company common stock either (i) in accordance with the
recommendation of our board of directors or
(ii) proportionally in accordance with the votes of the
other holders of Company common stock.

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As of December 31, 2001, LFREI owned 54.0%
of the common stock of the Company on an Adjusted Fully Diluted
Basis. Therefore, under the terms of the Stockholders Agreement,
LFREIs right to freely vote at its discretion was limited
to 74.0% of its total holdings. LFREI and its affiliates must
vote the remainder of their holdings either (i) in
accordance with the recommendation of our board of directors or
(ii) proportionally in accordance with the votes of the
other holders of Company common stock. In the event that the
number of outstanding shares were to increase for any reason
(including as a result of the issuance of common stock of the
Company upon exercise of management stock options), then LFREI
would be allowed to acquire additional shares of common stock of
the Company, up to 49.9% on an Adjusted Fully Diluted Basis. In
addition to the above, LFREI has the right to nominate four
members to the Companys board of directors. Although LFREI
will not be able to take action on behalf of the Company without
the concurrence of at least one of the other members of the
Companys board of directors, they may be able to exert
substantial influence over the Companys affairs. Further,
LFREI is entitled to receive access to certain operating
statements and other financial reports used in operating the
Company on a monthly basis.

On March 12, 2001, the Company granted LFREI
a limited waiver of some of the Standstill Provisions. The
waiver is to permit LFREI, under the control of the board of
directors, to initiate and engage in discussions with third
parties concerning certain change of control-type transactions
involving the Company. The limited waiver will stay in effect
until the expiration of the standstill period on August 14,
2002.

The Company, through the Operating Partnership,
employs a staff of 70 full-time real estate professionals
with extensive experience, knowledge of local markets and an
established track record with national, regional and local
retailers. The Company believes that the expertise and
relationships developed by these professionals enhance the
Companys ability to attract and retain high quality
tenants.

Risk Factors

Our success depends on many of the following
factors that could cause actual results and future events to
differ materially from those included in this report. The
existence of any of these risk factors may adversely impact our
financial condition, results from operations, cash flow, the
quoted per share trading price of our common stock and our
ability to pay distributions to you. We caution you, however,
that any list of risk factors may not be exhaustive.

More than
half of our properties depend upon the Southern California
economy.

More than one-half of our properties are located
in Southern California. As of December 31, 2001, these
properties represented approximately 64% of the aggregate square
footage of all our properties. Concentrating our properties in a
single geographic region may expose us to greater economic risks
than if our portfolio of properties were more geographically
diversified.



| |                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys debt level reduces cash
	available for distribution and may expose the Company to the
	risk of default under its debt obligations.

Payments of principal and interest on borrowings
may leave the company with insufficient cash resources to
operate its Properties or to pay distributions necessary to
maintain REIT qualification. The Companys level of debt
and the limitations imposed by its debt agreements may have
important consequences to the company, including the following:
the Company may be unable to refinance its indebtedness at
maturity or the refinancing terms may be less favorable than the
terms of its original indebtedness; cash flow may be
insufficient to meet required principal and interest payments;
the Company may be forced to dispose of one or more of its
properties, possibly on disadvantageous terms; the Company may
default on its obligations and the lenders or mortgagees may
foreclose on the properties that secure the loans and receive an
assignment of rents and leases; and the Companys default
under one mortgage loan with cross default provisions could
result in a default on other indebtedness. If one or more of
these events were to occur, the Companys financial
position, results of operations, cash flow, quoted per share
trading price of its common stock and ability to satisfy its
debt service obligations and to pay distributions to
stockholders could be adversely affected. In addition,
foreclosures could create taxable income without accompanying
cash proceeds, a circumstance which could

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hinder the Companys ability to meet the
strict REIT distribution requirements imposed by the Internal
Revenue Code of 1986, as amended. At December 31, 2001, we
had outstanding, $114.5 million under our Credit Facility
and $251.8 million under various secured mortgages. The
Companys total debt represented 76.6% of its total market
capitalization at December 31, 2001. The Company currently
has availability of $13 million under its Credit Facility.




| |                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------
| | Our failure to qualify as a real estate
	investment trust could have material adverse consequences to
	stockholders.

We believe that we are organized and have
operated in a manner which would allow us to qualify as a real
estate investment trust under the Internal Revenue Code
beginning with our taxable year ended December 31, 1993,
and we intend to continue to operate in such a manner. No
assurance can be given that we have operated or will be able to
continue to operate in a manner so as to qualify as a REIT or to
remain so qualified.

If we qualify for taxation as a REIT, we will
generally not be required to pay federal corporate income taxes
on the portion of our net income that is currently distributed
to stockholders. This treatment substantially eliminates the
double taxation (i.e., at the corporate and
stockholder levels) that generally results from investment in a
corporation.

Qualification as a real estate investment trust
requires us to satisfy numerous requirements established under
highly technical and complex Internal Revenue Code provisions
for which there are only limited judicial and administrative
interpretations, and involves the determination of various
factual matters and circumstances not entirely within our
control. For example, in order to qualify as a real estate
investment trust, at least 95% of our gross income in any year
must be derived from qualifying sources, we must satisfy
specified distribution requirements and we must satisfy
specified asset tests on a quarterly basis. These provisions and
the applicable Treasury Regulations are more complicated in our
case because we hold our assets through a partnership.
Legislation, new regulations, administrative interpretations or
court decisions could significantly change the tax laws with
respect to qualification as a real estate investment trust or
the federal income tax consequences of such qualification.
However, we are not aware of any pending tax legislation that
would adversely affect our ability to operate as a real estate
investment trust.

If we fail to qualify as a REIT in any taxable
year, we would not be allowed a deduction in computing our
taxable income for amounts distributed to our stockholders. As a
result, we would be required to pay federal income tax
(including any applicable alternative minimum tax) on our
taxable income at regular corporate rates. Unless we are
entitled to relief under certain statutory provision, we would
be disqualified from treatment as a real estate investment trust
for the four taxable years following the year during which we
lost qualification. If we lose our real estate investment trust
status, our net earnings available for investment or
distribution to stockholders may be significantly reduced for
each of the years involved. In addition, we would no longer be
required to make distributions to stockholders. Even if we
qualify as a real estate investment trust, we will be required
to pay certain federal, state and local taxes on our income and
property.

Our failure
to comply with REIT distribution requirements could have adverse
consequences.

To maintain our status as a REIT for federal
income tax purposes, we generally are required to distribute to
our stockholders at least 90% (95% for years prior to 2001) of
our taxable income each year. This taxable income is determined
without regard to the dividends paid deduction and by excluding
net capital gains.

We are also subject to tax at regular corporate
rates to the extent that we distribute less than 100% of our
taxable income (including net capital gains) each year.

In addition, we are subject to a 4% nondeductible
excise tax on the amount, if any, by which certain distributions
paid by us with respect to any calendar year are less than the
sum of 85% of our ordinary income for that calendar year, 95% of
our capital gain net income for the calendar year, and any
amount of that income that was not distributed in prior years.

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We intend to continue to make distributions to
our stockholders to comply with the distribution requirements of
the Internal Revenue Code and to reduce exposure to federal
income taxes and the nondeductible excise tax.

Differences in timing between the receipt of
income and the payment of expenses in arriving at taxable income
and the effect of required debt amortization payments could
require us to borrow funds on a short-term basis to meet the
distribution requirements that are necessary to achieve the tax
benefits associated with qualifying as a REIT.

Our largest
stockholder, LFREI, may be able to exert substantial influence
over the Companys affairs.

As of December 31, 2001, LFREI owned 56.7%
of the outstanding common stock of the Company (54.0% on an
Adjusted Fully Diluted Basis). LFREI has substantial influence
over the affairs of the Company as a result of its stock
ownership and board representation, including the effective
ability to block any combination transaction with a third party.
This concentration of ownership in one stockholder could be
disadvantageous to other stockholders interests.

In addition, once the standstill period discussed
above expires on August 14, 2002, LFREI will be in a position to
control the election of the Companys board of directors or
the outcome of any corporate transaction or other matter
submitted to the stockholders for approval.

Our
operations could be negatively affected if we lost key
management personnel.

Our executive officers have substantial
experience in owning, operating, managing, acquiring and
developing shopping centers. We believe that our success will
depend in large part upon the efforts of these executives. We
have entered into employment agreements with certain of our
executive officers that provide for their continued employment
with us and contain certain non-compete provisions. However,
there can be no guarantee that these executive officers will
remain employed by us, notwithstanding their potential liability
for damages to us if they should terminate their employment. The
loss of key management personnel could have a negative impact on
our operations.



| |                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | Our ability to generate revenues and pay
	distributions to our stockholders is affected by the risks
	inherent in owning real property investments.

Real property investments are subject to a
variety of risks. The yields available from equity investments
in real estate depend on the amount of income generated and
expenses incurred. If our properties do not generate sufficient
income to meet operating expenses, including debt service and
capital expenditures, results of operations and our ability to
make distributions to our shareholders may be adversely
affected. The performance of the economy in each of the areas in
which our Properties are located affects occupancy, market
rental and occupancy rates and expenses, and consequently, has
an impact on the revenues from our Properties and their
underlying values.

Revenues from our Properties may be further
adversely affected by, among other things:



| |   |                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the general economic climate;                                                                                                                                                                
|
| |  | local economic conditions where the properties
	are located, such as oversupply of space or a reduction in
	demand for rental space;                                                         
|
| |  | the attractiveness of the properties to tenants;                                                                                                                                             
|
| |  | competition from other available space;                                                                                                                                                      
|
| |  | our ability to provide for adequate maintenance
	and insurance and increased operating expenses (including real
	estate taxes and utilities) which may not be passed through to
	tenants; and

There is also the risk that as leases on the
Properties expire, tenants will enter into new leases on terms
that are less favorable to us. Revenues and real estate values
may also be adversely affected by such factors as applicable tax
laws, interest rate levels and the availability and terms of
financing.

5



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Most of the leases of our retail properties, as
is common with many multi-tenant shopping centers, provide for
tenants to reimburse us for a portion (frequently based upon the
portion of total retail space in the property that is occupied
by the tenant) of the common area maintenance, real estate
taxes, insurance and other operating expenses of the property.
To the extent that a property has vacant leaseable space, not
only will we be deprived of the base rent that we would receive
if the vacant space were occupied, but we will have to bear the
unreimbursed expense applicable to such vacant space. If a
property is mortgaged to secure payment of indebtedness and if
we were unable to meet our mortgage payments, a loss could be
sustained as a result of foreclosure on the property or the
exercise of other remedies by the mortgagee. Likewise, if a
property suffers sustained reductions in revenues, we may
sustain a write-down of the asset value and related charge to
earnings.

Potential
losses may not be covered by insurance.

The Company carries comprehensive liability,
fire, extended coverage and rental loss insurance covering all
of its Properties. Management believes the policy specifications
and insured limits are appropriate given the relative risk of
loss, the cost of he coverage and industry practice. The company
does not carry insurance for generally uninsurable losses such
as loss from riots or acts of God. Some of the Companys
policies, like those covering losses due to floods, are subject
to limitations involving large deductibles or co-payments and
policy limits. In addition, the Company carries earthquake
insurance on all properties in an amount and with deductibles
which management believe are commercially reasonable. While the
Company presently carries earthquake insurance, the amount of
its earthquake insurance coverage may not be sufficient to cover
losses from earthquakes. In addition, the Company may
discontinue earthquake insurance on some or all of its
properties in the future if the cost of premiums for earthquake
insurance exceeds the value of the coverage discounted for the
risk of loss. If the Company experiences a loss which is
uninsured or which exceeds policy limits, it could lose the
capital invested in the damaged properties as well as the
anticipated future cash flows from those properties. In
addition, if the damaged properties are subject to recourse
indebtedness, the Company would continue to be liable for the
indebtedness, even if the properties were irreparable.

We could
incur significant costs related to environmental
problems.

Environmental laws and regulations hold us liable
for the costs of removal or remediation of certain hazardous or
toxic substances released on our Properties. These laws could
impose liability without regard to whether we are responsible
for, or even knew of, the presence of the hazardous materials.
Government investigations and remediation actions may have
substantial costs and the presence of hazardous wastes on a
property could result in personal injury or similar claims by
private plaintiffs. For instance, third parties may seek
recovery from us for personal injuries associated with
asbestos-containing materials and other hazardous or toxic
substances if found on our properties. Moreover, the presence of
these substances on our properties may hinder our ability to
rent or sell our properties, or to borrow using such properties
as collateral. Various laws also impose liability on persons who
arrange for the disposal or treatment of such hazardous or toxic
substances for the cost of removal or remediation of hazardous
substances at a disposal or treatment facility. These laws often
impose liability whether or not the person arranging for the
disposal ever owned or operated the disposal facility. As owner
and operator of our Properties, we may be considered to have
arranged for the disposal or treatment of hazardous or toxic
substances.

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

Under the Americans with Disability Act of 1990,
all public accommodations must meet federal requirements related
to access and use by disabled persons. Although we believe that
our Properties substantially comply with the present
requirements under the Americans with Disabilities Act, we may
incur additional costs of complying with the Americans with
Disabilities Act in the future. Additional federal, state and
local laws also may require modifications to our Properties, or
restrict our ability to renovate our Properties. We cannot
predict the ultimate amount of the cost of compliance with the
act or other legislation.

6



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Limits on the
ownership of our capital stock could cause some stock transfers
to be void.

In order for us to maintain our qualification as
a REIT, not more than 50% in value of our outstanding stock may
be owned, actually or constructively, by five or fewer
individuals, as defined in the Internal Revenue Code. In
addition, rent from certain related party tenants is not
qualifying income for purposes of the gross income tests under
the Internal Revenue Code.

Two sets of constructive ownership rules apply in
determining whether these requirements are met. These
constructive ownership rules determine whether we are closely
held and whether the rent we receive is from a related party
tenant. Accordingly, for the purpose of preserving our REIT
qualification, our charter prohibits actual or constructive
ownership of more than 9.8% (in value or number of shares
whichever is more restrictive) of outstanding common stock by
any person. The constructive ownership rules are complex and may
cause common stock owned actually or constructively by a group
of related individuals and/or entities to be deemed to be
constructively owned by one individual or entity. As a result,
the acquisition of less than 9.8% of outstanding common stock,
or the acquisition of an interest in an entity which owns common
stock, by an individual or entity could cause that individual or
entity, or another individual or entity, to own constructively
in excess of 9.8% of the outstanding common stock, and thus
subject that common stock to the ownership limit. In conjunction
with the Stockholders Agreement, the Company waived the
ownership restrictions with respect to LFREI based in part on
representations made by LFREI to its knowledge relating to the
widely held nature of the ownership interests in LFREI and its
lack of ownership of any of our tenants. We believe that
LFREIs ownership of our stock will not cause us to violate
these ownership restrictions, however, no assurance can be given
that the IRS would not successfully take a contrary position.



| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | Our charter and the Maryland General
	Corporation Law contain provisions that may prevent a change of
	control transaction.

Certain provisions of the Maryland General
Corporation Law and our charter and bylaws could have the effect
of delaying, deferring or preventing a change in control of the
Company or the removal of existing management and, as a result,
could prevent you from being paid a premium for your common
stock over then-prevailing market prices.

Ownership Limit.The
ownership limit set forth in our charter may have the effect of
precluding acquisition of control of the Company by a third
party without consent of our board of directors even when a
change in control is in your interest.

Staggered Board.Our
board of directors is divided into three classes serving
staggered terms of three years each. Directors for each class
are chosen for a three-year term upon the expiration of the
current class term. The staggered terms for directors may
affect the stockholders ability to change control of the
Company even where a change in control is in your interest.

Preferred Stock.Our
charter authorizes the Board of Directors to issue up to
10,000,000 shares of preferred stock and to establish the
preferences and rights, including the right to vote and the
right to convert into common stock, of any shares issued. The
power to issue preferred stock could have the effect of delaying
or preventing a change in control of the Company even where a
change of control is in your interest.

Control Shares.The
Maryland General Corporation Law provides certain restrictions
upon the voting rights of control shares in a
Maryland corporation. Control shares are voting shares of stock
which, if aggregated with all other such shares of stock
previously acquired by the holder thereof, would entitle the
acquirer to exercise voting power in electing directors within
one of the following ranges of power:



| |   |                                               
| | - | ----------------------------------------------
| |  | one-fifth or more but less than one-third     
|
| |  | one-third or more but less than a majority, or
|
| |  | a majority of all voting power.               

The Maryland General Corporation Law provides
that control shares have no voting rights except to the extent
approved by an affirmative vote of two-thirds of the outstanding
shares entitled to vote on the matter,

7



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excluding shares held by the acquirer or by
officers and directors who are also employees. A control share
acquisition means the acquisition of control shares, subject to
certain exceptions. Pursuant to the statute, our bylaws exempt
control share acquisitions involving our executives and certain
of their associates and affiliates and, consequently, the
prohibition on voting control shares will not apply to those
persons.


Business
Combinations.Under the Maryland
General Corporation Law, certain business combinations between a
Maryland corporation and any person or affiliate thereof which
is the beneficial owner of 10% or more of the voting power of
the corporations shares are prohibited for five years
after the most recent date on which the 10% owner became a 10%
owner. Thereafter, any such business combination must be
approved by the affirmative vote of at least:



| |   |                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 80% of the votes entitled to be cast by holders
	of our outstanding voting shares; and                                                                                                                              
|
| |  | two-thirds of the votes entitled to be cast by
	holders of outstanding voting shares held by persons other than
	the 10% owner with whom the business combination is to be
	effected, subject to certain exceptions.

Pursuant to the statute, we have exempted any
business combinations involving our executive officers and
certain of their associates and affiliates, and, consequently,
the five-year prohibition and the super-majority vote
requirement will not apply to business combinations between us
and those persons.



| |                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------
| | Our ability to make decisions concerning
	the operation or disposition of our partially-owned properties
	may be restricted.

The Operating Partnership owns a 75% managing
general partnership interest in the partnership that owns
Kenneth Hahn Plaza and an 85% managing general partnership
interest in Haagen-Central Partnership, the general partnership
which is the managing general partner of, and holds a 40%
interest in, the partnership that owns Vermont-Slauson Shopping
Center. Therefore, the Operating Partnership holds the
equivalent of a 34% interest in Vermont-Slauson Shopping Center.
Together, the Operating Partnerships interests in Kenneth
Hahn Plaza and Vermont-Slauson Shopping Center are referred to
as the Partially-Owned Properties.

The Operating Partnership is the managing general
partner of each of these partnerships, with full control over
their day-to-day operations. We have certain fiduciary
responsibilities to our outside partners which we will need to
consider when making decisions relating to these Partially-Owned
Properties. The consent of our outside partners may be required
for a sale, transfer or encumbrance of the Partially-Owned
Properties. In addition, the sale, transfer, assignment or
pledge of partnership interest in the Partially-Owned Properties
require the prior written consent of the other partners or are
subject to certain rights of first refusal. These limitations
may result in decisions by third parties with respect to these
properties that do not fully reflect our interest.



| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | We may issue additional shares of capital
	stock without stockholder approval which may dilute your
	investment.

We may issue shares of our common stock,
preferred stock or other equity or debt securities without
stockholder approval. The future issuance of capital stock may
dilute an existing stockholders investment.



| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Sales of a substantial number of shares of
	common stock, or the perception that such sales could occur,
	could result in decreased market prices for our common
	stock.

We cannot predict whether future issuances of
shares of our common stock or the availability of shares for
future sale will result in decreasing the market price of the
common stock. As of March 15, 2002, 27,656,405 shares of
our common stock were issued and outstanding and we had reserved
for future issuance the following shares of common stock:



| |   |                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 1,338,644 shares issuable upon the exchange of
	common units of the Operating Partnership issued in connection
	with our formation and in connection with the acquisition of
	properties;

8



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##### Table of Contents





| |   |                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 663,842 shares issuable upon exercise of options
	we have granted under our Second Amended and Restated 1993 Stock
	Option and Incentive Plan; and
|
| |  | 861,207 additional shares issuable upon our
	Second Amended and Restated 1993 Stock Option and Incentive Plan.                                    

We may be
unable to successfully redevelop properties.

We may selectively pursue redevelopment projects,
including the expansion of certain Properties. Such projects
generally require various governmental and other approvals, the
receipt of which cannot be assured. We may incur certain risks
in connection with redevelopment activities, including:



| |   |                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------
| |  | the expenditure of funds on and devotion of
	managements time to projects which may not come to
	fruition;               
|
| |  | the risk that construction costs of a project may
	exceed original estimates, possibly making the project
	uneconomic; and
|
| |  | the risk that occupancy rates and rents at a
	completed project will not be sufficient to make the project
	profitable.   



| |                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------
| | Decreases in cash available from our
	Properties and other factors could limit our ability to make
	distributions to stockholders.

Distributions to you will be based principally on
cash available for distribution from our Properties. Increase in
base rent and percentage rent under the leases of our Properties
or the payment of rent in connection with future acquisitions
will increase our cash available for distribution. However, in
the event of default or a lease termination by a lessee, there
could be a decrease or cessation of rental payment. In addition,
the amount available to make distributions may decrease if
properties acquired in the future yield lower than expected cash
available for distribution. If we incur additional indebtedness
in the future, we will require additional funds to service such
indebtedness. Further, as capital needs change, the board of
directors may elect to reduce the size of the distribution. As a
result, amounts available to make distributions may decrease.
Distributions will also be dependent upon a number of other
factors, including:



| |   |                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------
| |  | our financial condition;                                                                                         
|
| |  | any decision to reinvest, rather than to
	distribute, funds;                                                     
|
| |  | capital expenditures;                                                                                            
|
| |  | the annual distribution requirements under the
	REIT provisions of the Internal Revenue Code described above; and
|
| |  | such other factors as we deem relevant.                                                                          

The possibility exists that our future operating
results may differ from the assumptions used by our board of
directors in determining the current distribution rate. In that
event, the trading price of our common stock may be adversely
affected.



| |                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | An increase in market interest rates or a
	negative perception of retail shopping center REITs could cause
	a decrease in the market price of our common
	stock.

A variety of factors may influence the price of
our common stock in public trading markets. We believe that
investors generally perceive REITs as yield-driven
investments and compare the annual yield from distributions by
REITs with yields on various other types of financial
instruments. Thus an increase in market interest rates generally
could adversely affect the market price of our common stock.
Similarly, to the extent that the investing public has a
negative perception of companies in the retail business or
REITs that own and operate retail shopping centers and
other properties catering to retail tenants, the value of our
common stock

9



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##### Table of Contents



may be negatively impacted in comparison to
shares of other REITs owning other types of properties and
catering to different types of tenants.


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

At any time, tenants at our Properties may seek
the protection of the bankruptcy laws, which could result in the
rejection and termination of that tenants lease. Although
we have not experienced material losses from tenant
bankruptcies, no assurance can be given that tenants will not
file for bankruptcy protection in the future, or if any tenants
file, that they will affirm their leases and continue to make
rental payments in a timely manner. In addition, a tenant from
time to time may experience a downturn in its business which may
weaken its financial condition and result in the failure to make
rental payments when due. Future terrorist attacks, such as the
attacks that occurred in New York and Washington, D.C. on
September 11, 2001 and other attacks of terrorism or war,
may result in declining economic activity having a corresponding
adverse effect on the financial condition of our tenants. If
tenant leases are not affirmed following bankruptcy or if a
tenants financial condition weakens, the Companys
results of operations and ability to make distributions to its
stockholders may be adversely affected.

Real estate
assets are illiquid and we may not be able to sell our
properties when we desire.

Equity real estate investments are generally
illiquid which limits our ability to sell our Properties quickly
in response to changes in economic or other conditions or meet
certain of its strategic objectives of disposing of certain
non-strategic assets. In addition, the Internal Revenue Code
places certain limits or prohibitive taxes on REITs that
may limit our ability to sell certain properties. These
restrictions on our ability to sell our Properties could have an
adverse effect on our financial position and our ability to make
distributions to you.

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

Numerous retail properties compete with our
Properties in attracting tenants to lease space. Some of these
competing properties are newer and better located or designed
and may offer lower expenses or be better capitalized than our
Properties. The number of competitive commercial properties in a
particular area could have a material adverse effect on our
ability to lease space in our Properties and on the rents
charged. In addition, retailers at our Properties face
increasing competition from outlet malls, discount shopping
clubs, mail order and e-commerce.

Additionally, we may be competing for investment
opportunities with entities that have substantially greater
financial resources than us. These entities may generally be
able to accept more risk than the Company can prudently manage.




Item 2.     Properties

As of December 31, 2001, the Companys
Properties consisted of 31 community shopping centers,
2 regional malls and 2 single tenant facilities,
containing in the aggregate approximately 7.9 million
square feet of total shopping center gross leaseable area
(GLA). Approximately 6.4 million square feet of
GLA is owned by the Company, and the balance is owned by certain
anchor retailers. The Company has focused its efforts on four
key markets, which include the Pacific Northwest, Northern and
Southern California, and the Southwest. Of the 31 community
centers, which comprise the core asset group of the Company, 6
are located in the Pacific Northwest, 5 in Northern and Central
California, 14 in Southern California and 6 in the Southwest.
The two regional malls are located in Southern California. One
of the single tenant assets is in Southern California and the
other is located in the Southwest.

The Companys community shopping centers
range in size from approximately 14,000 square feet of total GLA
to approximately 419,000 square feet of total GLA. The
Companys regional malls range in size from approximately
820,000 square feet of GLA to approximately 1,248,000 square
feet of GLA. The Companys single tenant facilities range
in size from approximately 104,000 square feet of total GLA to
approximately 115,000 square feet of total GLA.

10



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##### Table of Contents



The Properties are designed to attract local and
regional area customers and are typically anchored by one or
more nationally or regionally-known retailers. Depending on the
market focus of a specific property, major retailers at a
property may include value-oriented discount stores,
supermarkets, membership warehouses, traditional department
stores, fashion-oriented department stores, shops or theaters.
Anchor leases are typically for initial terms of 10 to
35 years, with one or more renewal options available to the
lessee upon expiration of the initial term. By contrast, smaller
shop leases are typically for 5- to 10-year terms. The longer
term of the anchor leases helps to protect the Company against
significant vacancies and to insure the presence of anchor
retailers who draw consumers to the Companys centers. The
shorter term of the smaller shop leases allows the Company to
adjust rental rates for non-anchor store space on a regular
basis and upgrade the overall tenant mix. Anchor leases are
generally for lower base rents per square foot than leases for
smaller shop tenants. The lower base rents paid by anchor
retailers may be offset, in part, through periodic escalations
and/or the payment of percentage rents. Certain anchor retailers
at some of the Properties occupy space not owned by the Company
and therefore do not pay base rent to the Company.

During 2001, the Company identified and sold
certain shopping centers in accordance with its stated strategy
of identifying assets for sale that have reached stabilized
values. The assets sold during the year include four community
shopping centers and two single tenant facilities. The 2001
sales consisted of Marshalls Plaza, a 79,000 square foot
shopping center located in Modesto, California, Westgate North
Shopping Center, a 104,000 square foot shopping center located
in Tacoma, Washington, Center of El Centro, a 179,000 square
foot shopping center located in El Centro, California, Madera
Marketplace, a 169,000 square foot shopping center located in
Madera, California, K-Mart Rocklin, a 86,000 single tenant
facility located in Rocklin, California and K-Mart Madera, a
86,000 square foot single tenant facility, located in Madera,
California.

Gross proceeds from the sales were approximately
$49.2 million. The combined book loss on the sale of assets
recognized during the year was $2.4 million. Proceeds from
the sales that were used to reduce the outstanding balance on
the Companys secured line of credit totaled
$33.4 million and mortgage debt repaid to the lender was
approximately $9 million. The Company also recorded an
extraordinary loss on the early extinguishment of debt of
$1.8 million related to the payment of certain prepayment
penalties and the write-off unamortized deferred financing costs.

Twenty-eight of the Properties are owned by the
Company in fee and seven are held by the Company under long-term
ground leases. Included in the long-term ground leases are the
Partially-Owned Properties, Kenneth Hahn Plaza and
Vermont-Slauson Shopping Center, discussed below.

The Operating Partnership owns a 75% managing
general partnership interest in the partnership that owns
Kenneth Hahn Plaza and a 85% managing general partnership
interest in Haagen-Central Partnership, the general partnership
which is the managing general partner of, and holds a 40%
interest in, the partnership that owns Vermont-Slauson Shopping
Center. Therefore, the Operating Partnership holds the
equivalent of a 34% interest in Vermont-Slauson Shopping Center.

The Operating Partnership is the managing general
partner of each such partnership, with control over day-to-day
operations of the Partially-Owned Properties. As the general
partner, the Operating Partnership has sole responsibility and
control over the partnerships and cannot be removed by the
limited partners without cause. The Company has certain
fiduciary responsibilities to its outside partners which it will
need to consider when making decisions relating to the
Partially-Owned Properties. The consent of the Companys
outside partners may be required for any sale, transfer or
encumbrance of the Partially-Owned Properties. In addition, the
sale, transfer, assignment or pledge of partnership interests in
the partnerships which own the Partially-Owned Properties
require the prior written consent of the other partners or are
subject to certain rights of first refusal.

11



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##### Table of Contents



The tables below provide information regarding
the physical descriptions of the Properties, the tenants and the
debt secured by the Properties.

Description of Properties

The following table sets forth the physical
description and anchor tenant information with respect to the
Properties as of December 31, 2001.

|                                        |                    |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|--------------------------------------- | ------------------ | ------------ | ----- | --------------- |  | ------- | ------------ | ----------- |  | --------- | ---- | ----------------- |  |  | --------- |  |  |  | --------- |  |  | -------------------------------------- | -----------------------------------------
|                                        |                    | Year of      |       |                 |  |         |              | Total       |  |           |      |                  
|                                        |                    | Construction |       |                 |  |         |              | Shopping    |  | Company   |      |                  
|                                        |                    | (or Most     |       | Ownership       |  | Land    |              | Center      |  | Owned     |      |                  
|                                        |                    | Recent       |       | Interest        |  | Area    |              | GLA         |  | GLA       |      | Anchor or        
|                                        |                    | Renovation)  |       | (Expiration)(1) |  | (Acres) |              | (Sq. Ft.)   |  | (Sq. Ft.) |      | Principal Tenants
|                                        |                    |              |       |                 |  |         |              |             |  |           |      |                  
|COMMUNITY SHOPPING CENTERS              |                    |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                       
|Pacific Northwest                       |                    |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                       
|Frontier Village Shopping Center        |                    |              | 1993  |                 |  |         | Fee          |             |  |           | 15.7 |                   |  |  | 153,320   |  |  |  | 153,320   |  |  | Safeway, Bartell Drugs                
|                                        | Lake Stevens, WA   |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|Gresham Town Fair                       |                    |              | 1988  |                 |  |         | Fee          |             |  |           | 25.6 |                   |  |  | 265,765   |  |  |  | 265,765   |  |  | Ross Stores, Emporium, GI Joes,      
|                                        | Gresham, OR        |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        | Craft Warehouse                          
|The Medford Center                      |                    |              | (1998 | )               |  |         | Fee          |             |  |           | 30.1 |                   |  |  | 418,704   |  |  |  | 333,958   |  |  | Cinemark Theatres, Sears, Payless(2), 
|                                        | Medford, OR        |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        | Safeway(2), Circuit City, 24 Hour Fitness
|Ross Center                             |                    |              | 1987  |                 |  |         | Fee          |             |  |           | 10.0 |                   |  |  | 134,555   |  |  |  | 134,555   |  |  | Ross Stores, Michaels, Pier 1 Imports 
|                                        | Portland, OR       |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|Silverdale Shopping Center              |                    |              | 1990  |                 |  |         | Fee          |             |  |           | 6.0  |                   |  |  | 67,287    |  |  |  | 67,287    |  |  | Ross Stores                           
|                                        | Silverdale, WA     |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|Vancouver Park Place                    |                    |              | 1987  |                 |  |         | Fee          |             |  |           | 6.4  |                   |  |  | 77,944    |  |  |  | 77,944    |  |  | T.J.Maxx, Pier 1 Imports              
|                                        | Vancouver, WA      |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|                                        |                    |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                       
|Subtotal Pacific Northwest              |                    |              |       |                 |  |         |              |             |  |           | 93.8 |                   |  |  | 1,117,575 |  |  |  | 1,032,829 |  |  |                                       
|                                        |                    |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                       
|                                       
|Northern & Central California           |                    |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                       
|Bakersfield Shopping Center             |                    |              | 1978  |                 |  |         | Fee          |             |  |           | 9.3  |                   |  |  | 14,115    |  |  |  | 14,115    |  |  |                                       
|                                        | Bakersfield, CA    |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|Mineral King Plaza                      |                    |              | 1983  |                 |  |         | Fee          |             |  |           | 10.9 |                   |  |  | 115,336   |  |  |  | 39,060    |  |  | Vons(2), Longs Drugs(2)               
|                                        | Visalia, CA        |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|Rheem Valley                            |                    |              | 1990  |                 |  |         | Fee          |             |  |           | 18.4 |                   |  |  | 159,967   |  |  |  | 159,967   |  |  | T.J.Maxx, Longs Drugs                 
|                                        | Moraga, CA         |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|Rosedale Village Shopping Center        |                    |              | 1991  |                 |  |         | Fee          |             |  |           | 10.6 |                   |  |  | 217,026   |  |  |  | 127,547   |  |  | Savemart, Payless Drugs, Kmart(2)     
|                                        | Bakersfield, CA    |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|Southpointe Plaza                       |                    |              | 1982  |                 |  |         | Fee          |             |  |           | 18.0 |                   |  |  | 193,063   |  |  |  | 189,063   |  |  | Big 5 Sporting Goods                  
|                                        | Sacramento, CA     |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|                                        |                    |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                       
|Subtotal Northern & Central
	California |                    |              |       |                 |  |         |              |             |  |           | 67.2 |                   |  |  | 699,507   |  |  |  | 529,752   |  |  |                                       
|                                        |                    |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                       
|                                       
|Southern California                     |                    |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                       
|Country Fair Shopping Center            |                    |              | 1992  |                 |  |         | Fee          |             |  |           | 17.3 |                   |  |  | 211,704   |  |  |  | 168,264   |  |  | Albertsons(2), PETsMART, Rite-Aid,   
|                                        | Chino, CA          |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        | Staples, T.J. Maxx                       
|Date Palm Center                        |                    |              | 1987  |                 |  |         | Fee          |             |  |           | 11.8 |                   |  |  | 117,356   |  |  |  | 117,356   |  |  | Sams Club (Wal-Mart)                 
|                                        | Cathedral City, CA |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|El Camino North                         |                    |              | 1982  |                 |  |         | Fee          |             |  |           | 54.0 |                   |  |  | 400,306   |  |  |  | 273,806   |  |  | Mervyns(2),
	Toys R Us(2),         
|                                        | Oceanside, CA      |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        | Ross Stores, Steinmart, Petco(2)         
|Fire Mountain Center                    |                    |              | 1987  |                 |  |         | Fee/Ground   |             |  |           | 9.4  |                   |  |  | 92,378    |  |  |  | 92,378    |  |  | Trader Joes, Bookstar                
|                                        | Oceanside, CA      |              |       |                 |  |         |              | Lease(2048) |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|Fullerton Town Center                   |                    |              | 1987  |                 |  |         | Fee          |             |  |           | 21.7 |                   |  |  | 411,527   |  |  |  | 264,647   |  |  | Costco(2), AMC Theatres,
	Toys R Us, 
|                                        | Fullerton, CA      |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        | Office Depot                             
|Gardena Gateway Center                  |                    |              | 1990  |                 |  |         | Fee          |             |  |           | 9.7  |                   |  |  | 65,987    |  |  |  | 65,987    |  |  | Marukai (Rite-Aid), TAWA              
|                                        | Gardena, CA        |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|Kenneth Hahn Plaza                      |                    |              | 1987  |                 |  |         | Ground Lease |             |  |           | 14.5 |                   |  |  | 165,195   |  |  |  | 165,195   |  |  | Food 4 Less, Factory 2U, Rite-Aid,    
|                                        | Los Angeles, CA    |              |       |                 |  |         |              | (2052)      |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        | Super Trak Auto                          
|La Verne Towne Center                   |                    |              | 1986  |                 |  |         | Fee          |             |  |           | 19.1 |                   |  |  | 231,376   |  |  |  | 231,376   |  |  | Target, Vons                          
|                                        | La Verne, CA       |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|Lakewood Plaza                          |                    |              | (1989 | )               |  |         | Ground Lease |             |  |           | 11.1 |                   |  |  | 113,511   |  |  |  | 113,511   |  |  | Stater Bros (Albertsons), Staples    
|                                        | Bellflower, CA     |              |       |                 |  |         |              | (2032)      |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          
|Loma Square                             |                    |              | 1980  |                 |  |         | Fee          |             |  |           | 15.8 |                   |  |  | 210,704   |  |  |  | 210,704   |  |  | T.J. Maxx, Circuit City, Sav-on Drugs,
|                                        | San Diego, CA      |              |       |                 |  |         |              |             |  |           |      |                   |  |  |           |  |  |  |           |  |  |                                        |                                          

12



---



##### Table of Contents



|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       |                                        
|-------------------------------- | -------------------- | ------------ | ----- | --------------- |  | ------- | ------------ | --------- |  | --------- | ----- | ----------------- |  |  | --------- |  |  |  | --------- |  |  | ------------------------------------- | ---------------------------------------
|                                 |                      | Year of      |       |                 |  |         |              | Total     |  |           |       |                  
|                                 |                      | Construction |       |                 |  |         |              | Shopping  |  | Company   |       |                  
|                                 |                      | (or Most     |       | Ownership       |  | Land    |              | Center    |  | Owned     |       |                  
|                                 |                      | Recent       |       | Interest        |  | Area    |              | GLA       |  | GLA       |       | Anchor or        
|                                 |                      | Renovation)  |       | (Expiration)(1) |  | (Acres) |              | (Sq. Ft.) |  | (Sq. Ft.) |       | Principal Tenants
|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                  
|Mountain Square Shopping Center  |                      |              | 1988  |                 |  |         | Fee          |           |  |           | 15.8  |                   |  |  | 273,189   |  |  |  | 273,189   |  |  | Home Depot, Staples, Pavilions,      
|                                 | Upland, CA           |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       | Factory 2U                             
|North County Plaza               |                      |              | 1987  |                 |  |         | Fee          |           |  |           | 16.9  |                   |  |  | 153,325   |  |  |  | 153,325   |  |  | Marshalls, Michaels,
	Kids R Us  
|                                 | Carlsbad, CA         |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       |                                        
|Parkway Place                    |                      |              | (1989 | )               |  |         | Ground Lease |           |  |           | 9.7   |                   |  |  | 120,425   |  |  |  | 120,425   |  |  | Albertsons, Office Depot            
|                                 | Escondido, CA        |              |       |                 |  |         |              | (2037)    |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       |                                        
|Vermont-Slauson Shopping Center  |                      |              | 1981  |                 |  |         | Ground Lease |           |  |           | 10.3  |                   |  |  | 169,744   |  |  |  | 169,744   |  |  | Ralphs, Kmart, Sav-on Drugs          
|                                 | Los Angeles, CA      |              |       |                 |  |         |              | (2070)    |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       |                                        
|Vineyards Marketplace            |                      |              | 1991  |                 |  |         | Fee          |           |  |           | 6.7   |                   |  |  | 120,937   |  |  |  | 56,019    |  |  | Albertsons(2), Sav-on Drugs         
|                                 | Rancho Cucamonga, CA |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       |                                        
|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|Subtotal Southern California     |                      |              |       |                 |  |         |              |           |  |           | 243.8 |                   |  |  | 2,857,664 |  |  |  | 2,475,926 |  |  |                                      
|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|                                
|Southwest                        |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|Kyrene Village Shopping Center   |                      |              | 1987  |                 |  |         | Fee          |           |  |           | 14.4  |                   |  |  | 161,089   |  |  |  | 161,089   |  |  | Bashas, Kyrene Lanes, Audio Express,
|                                 | Chandler, AZ         |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       | Greenbacks                             
|North Mountain Village           |                      |              | 1985  |                 |  |         | Fee          |           |  |           | 15.0  |                   |  |  | 147,510   |  |  |  | 94,379    |  |  | Frys Food & Drug(2), T.J. Maxx,     
|                                 | Phoenix, AZ          |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       | Greenbacks                             
|Randolph Plaza                   |                      |              | 1999  |                 |  |         | Fee          |           |  |           | 17.3  |                   |  |  | 191,685   |  |  |  | 179,382   |  |  | Frys, MacFrugals                   
|                                 | Tucson, AZ           |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       |                                        
|Southern Palms Center            |                      |              | 1980  |                 |  |         | Fee          |           |  |           | 26.1  |                   |  |  | 254,863   |  |  |  | 254,863   |  |  | Food 4 Less, Staples                 
|                                 | Tempe, AZ            |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       |                                        
|Sunrise Place Center             |                      |              | (1992 | )               |  |         | Fee          |           |  |           | 8.5   |                   |  |  | 163,131   |  |  |  | 136,919   |  |  | Smiths Food & Drug(Kroger)          
|                                 | Tucson, AZ           |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       |                                        
|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|Subtotal Southwest               |                      |              |       |                 |  |         |              |           |  |           | 81.3  |                   |  |  | 918,278   |  |  |  | 826,632   |  |  |                                      
|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|TOTAL COMMUNITY SHOPPING CENTERS |                      |              |       |                 |  |         |              |           |  |           | 486.1 |                   |  |  | 5,593,024 |  |  |  | 4,865,139 |  |  |                                      
|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|                                
|REGIONAL MALLS                   |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|Baldwin Hill Crenshaw Plaza      |                      |              | 1988  |                 |  |         | Fee          |           |  |           | 42.0  |                   |  |  | 819,604   |  |  |  | 509,604   |  |  | Sears(2), Robinsons-May(2),          
|                                 | Los Angeles, CA      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       | Wal-Mart(3), Albertsons, T.J. Maxx,   
|Media City Center                |                      |              | 1992  |                 |  |         | Ground Lease |           |  |           | 37.1  |                   |  |  | 1,248,015 |  |  |  | 818,405   |  |  | Macys, IKEA(2), Sears(2),           
|                                 | Burbank, CA          |              |       |                 |  |         |              | (2078)    |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       | Mervyns(2), AMC Theatres, Sport Chalet
|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|TOTAL REGIONAL MALLS             |                      |              |       |                 |  |         |              |           |  |           | 79.1  |                   |  |  | 2,067,619 |  |  |  | 1,328,009 |  |  |                                      
|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|SINGLE TENANT FACILITIES         |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|Kmart                            |                      |              | 1990  |                 |  |         | Fee          |           |  |           | 8.7   |                   |  |  | 104,204   |  |  |  | 104,204   |  |  | Kmart                                
|                                 | Phoenix, AZ          |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       |                                        
|Sams Club                       |                      |              | (1988 | )               |  |         | Ground Lease |           |  |           | 9.8   |                   |  |  | 114,722   |  |  |  | 114,722   |  |  | Sams Club (Wal-Mart)                
|                                 | Downey, CA           |              |       |                 |  |         |              | (2009)    |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                       |                                        
|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|TOTAL SINGLE TENANT FACILITIES   |                      |              |       |                 |  |         |              |           |  |           | 18.5  |                   |  |  | 218,926   |  |  |  | 218,926   |  |  |                                      
|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      
|TOTAL ALL PROPERTIES             |                      |              |       |                 |  |         |              |           |  |           | 583.7 |                   |  |  | 7,879,569 |  |  |  | 6,412,074 |  |  |                                      
|                                 |                      |              |       |                 |  |         |              |           |  |           |       |                   |  |  |           |  |  |  |           |  |  |                                      



---



|    |                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------
|(1) | The date indicated is the expiration date of any
	ground lease after giving effect to all renewal periods.
|   
|(2) | Anchor space is not owned by the Company.                                                                 
|   
|(3) | Anchor tenant is under construction.                                                                      

13



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##### Table of Contents



Property Performance Summary

The following table sets forth, on a
property-by-property basis, the GLA leased to anchor tenants,
pad tenants and shop tenants, as of December 31, 2001:

|                                        |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|--------------------------------------- |  | ---------------- | --------- | --------- |  | --------- | ------- | --------- |  | ---------- | ------- | ------------ |  | --------- | ------- | ---------- |  | ------ | ------ | ------- |  |  | --------- |  |  |  | ----- |  |  | - | ---------- |  |  | - | ----- |  |  | - | ------- | 
|                                        |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |           
|                                        |  | Total Leased GLA |           |           |  |           |         |           |  |            |         |              |  |           |         |           
|                                        |  | (sq. ft)         |           | Available |  | GLA to be |         | Company   |  |            |         | Annualized   |  | Average   |         | Annual    
|                                        |  |                  |           | GLA       |  | Built     |         | Owned GLA |  | Percentage |         | Base         |  | Base Rent |         | Percentage
|Property Name                           |  | Anchor(1)        |           | Pad(2)    |  | Shop(3)   |         | (sq. ft.) |  | (sq. ft.)  |         | (sq. ft.)(4) |  | Leased(4) |         | Rent(5)    |  | psf(6) |        | Rent(7)
|                                        |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |        
|COMMUNITY SHOPPING CENTERS              |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|Pacific Northwest                       |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|Frontier Village Shopping Center        |  |                  | 68,473    |           |  |           | 20,449  |           |  |            | 33,776  |              |  |           | 30,622  |            |  |        |       |         |  |  | 153,320   |  |  |  | 80.0  |  |  | $ | 1,264,370  |  |  | $ | 10.30 |  |  | $ | 96,600  | 
|Gresham Town Fair                       |  |                  | 159,282   |           |  |           | 26,587  |           |  |            | 70,685  |              |  |           | 9,211   |            |  |        |       |         |  |  | 265,765   |  |  |  | 96.5  |  |  |   | 2,380,380  |  |  |   | 9.28  |  |  |   |        | 
|The Medford Center                      |  |                  | 153,612   |           |  |           | 25,432  |           |  |            | 93,219  |              |  |           | 61,695  |            |  |        | 4,500  |         |  |  | 333,958   |  |  |  | 81.5  |  |  |   | 2,684,992  |  |  |   | 9.86  |  |  |   | 247,900 | 
|Ross Center                             |  |                  | 53,331    |           |  |           | 9,020   |           |  |            | 62,928  |              |  |           | 9,276   |            |  |        |       |         |  |  | 134,555   |  |  |  | 93.1  |  |  |   | 1,590,608  |  |  |   | 12.70 |  |  |   | 9,000   | 
|Silverdale Shopping Ctr                 |  |                  | 29,020    |           |  |           |        |           |  |            | 33,870  |              |  |           | 4,397   |            |  |        |        |         |  |  | 67,287    |  |  |  | 93.5  |  |  |   | 831,225    |  |  |   | 13.22 |  |  |   |        | 
|Vancouver Park Place                    |  |                  | 33,938    |           |  |           | 14,900  |           |  |            | 29,106  |              |  |           |        |            |  |        |       |         |  |  | 77,944    |  |  |  | 100.0 |  |  |   | 996,287    |  |  |   | 12.78 |  |  |   | 70,800  | 
|                                        |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|Subtotal Pacific Northwest              |  |                  | 497,656   |           |  |           | 96,388  |           |  |            | 323,584 |              |  |           | 115,201 |            |  |        | 4.500  |         |  |  | 1,032,829 |  |  |  | 88.8  |  |  |   | 9,747,862  |  |  |   | 10.62 |  |  |   | 424,300 | 
|                                        |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|                                       
|Northern & Central California           |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|Bakersfield Shopping Center             |  |                  |          |           |  |           |        |           |  |            | 11,540  |              |  |           | 2,575   |            |  |        |       |         |  |  | 14,115    |  |  |  | 81.8  |  |  |   | 84,084     |  |  |   | 7.29  |  |  |   |        | 
|Mineral King Plaza                      |  |                  |          |           |  |           |        |           |  |            | 32,860  |              |  |           | 6,200   |            |  |        |       |         |  |  | 39,060    |  |  |  | 84.1  |  |  |   | 511,604    |  |  |   | 15.57 |  |  |   |        | 
|Rheem Valley                            |  |                  | 56,977    |           |  |           | 5,150   |           |  |            | 77,615  |              |  |           | 20,225  |            |  |        |       |         |  |  | 159,967   |  |  |  | 87.4  |  |  |   | 1,588,914  |  |  |   | 11.37 |  |  |   | 2,100   | 
|Rosedale Village Shopping Center        |  |                  | 72,324    |           |  |           | 6,658   |           |  |            | 40,290  |              |  |           | 8,275   |            |  |        |       |         |  |  | 127,547   |  |  |  | 93.5  |  |  |   | 1,310,469  |  |  |   | 10.99 |  |  |   |        | 
|Southpointe Plaza                       |  |                  | 105,650   |           |  |           |        |           |  |            | 70,735  |              |  |           | 12,678  |            |  |        |       |         |  |  | 189,063   |  |  |  | 93.3  |  |  |   | 1,414,943  |  |  |   | 8.02  |  |  |   |        | 
|                                        |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|Subtotal Northern & Central
	California |  |                  | 234,951   |           |  |           | 11,808  |           |  |            | 233,040 |              |  |           | 49,953  |            |  |        |       |         |  |  | 529,752   |  |  |  | 90.6  |  |  |   | 4,910,014  |  |  |   | 10.23 |  |  |   | 2,100   | 
|                                        |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|                                       
|Southern California                     |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|Country Fair Shopping Center            |  |                  | 96,225    |           |  |           | 27,341  |           |  |            | 44,698  |              |  |           |        |            |  |        |       |         |  |  | 168,264   |  |  |  | 100.0 |  |  |   | 2,411,124  |  |  |   | 14.33 |  |  |   | 21,750  | 
|Date Palm Center                        |  |                  | 99,919    |           |  |           |        |           |  |            | 12,508  |              |  |           | 4,929   |            |  |        | 4,000  |         |  |  | 117,356   |  |  |  | 95.8  |  |  |   | 1,696,441  |  |  |   | 15.09 |  |  |   |        | 
|El Camino North                         |  |                  | 88,646    |           |  |           | 122,713 |           |  |            | 48,139  |              |  |           | 14,308  |            |  |        | 50,642 |         |  |  | 273,806   |  |  |  | 94.8  |  |  |   | 3,077,204  |  |  |   | 11.86 |  |  |   | 7,650   | 
|Fire Mountain Center                    |  |                  | 38,876    |           |  |           | 23,432  |           |  |            | 22,139  |              |  |           | 7,931   |            |  |        |       |         |  |  | 92,378    |  |  |  | 91.4  |  |  |   | 1,730,047  |  |  |   | 20.49 |  |  |   | 72,300  | 
|Fullerton Town Center                   |  |                  | 171,613   |           |  |           | 19,722  |           |  |            | 41,644  |              |  |           | 31,668  |            |  |        |       |         |  |  | 264,647   |  |  |  | 88.0  |  |  |   | 3,522,538  |  |  |   | 15.12 |  |  |   |        | 
|Gardena Gateway Center                  |  |                  | 41,300    |           |  |           | 5,062   |           |  |            | 16,825  |              |  |           | 2,800   |            |  |        |       |         |  |  | 65,987    |  |  |  | 95.8  |  |  |   | 1,020,463  |  |  |   | 16.15 |  |  |   | 28,200  | 
|Kenneth Hahn Plaza                      |  |                  | 97,334    |           |  |           | 14,598  |           |  |            | 50,363  |              |  |           | 2,900   |            |  |        |       |         |  |  | 165,195   |  |  |  | 98.2  |  |  |   | 1,674,126  |  |  |   | 10.32 |  |  |   |        | 
|La Verne Towne Center                   |  |                  | 158,860   |           |  |           | 1,940   |           |  |            | 57,355  |              |  |           | 13,221  |            |  |        |       |         |  |  | 231,376   |  |  |  | 94.3  |  |  |   | 1,367,929  |  |  |   | 6.27  |  |  |   | 1,050   | 
|Lakewood Plaza                          |  |                  | 93,342    |           |  |           | 4,365   |           |  |            | 15,804  |              |  |           |        |            |  |        |       |         |  |  | 113,511   |  |  |  | 100.0 |  |  |   | 1,338,286  |  |  |   | 11.79 |  |  |   |        | 
|Loma Square                             |  |                  | 96,514    |           |  |           |        |           |  |            | 107,470 |              |  |           | 6,720   |            |  |        |       |         |  |  | 210,704   |  |  |  | 96.8  |  |  |   | 2,766,102  |  |  |   | 13.56 |  |  |   |        | 
|Mountain Square Shopping Center         |  |                  | 185,945   |           |  |           |        |           |  |            | 71,819  |              |  |           | 15,425  |            |  |        |       |         |  |  | 273,189   |  |  |  | 94.4  |  |  |   | 3,179,702  |  |  |   | 12.34 |  |  |   | 64,050  | 
|North County Plaza                      |  |                  | 43,610    |           |  |           | 28,720  |           |  |            | 71,395  |              |  |           | 9,600   |            |  |        | 8,500  |         |  |  | 153,325   |  |  |  | 93.7  |  |  |   | 2,114,400  |  |  |   | 14.71 |  |  |   |        | 
|Parkway Place                           |  |                  | 91,127    |           |  |           | 8,958   |           |  |            | 11,856  |              |  |           | 8,484   |            |  |        |       |         |  |  | 120,425   |  |  |  | 93.0  |  |  |   | 1,184,806  |  |  |   | 10.58 |  |  |   |        | 
|Vermont-Slauson Shopping Center         |  |                  | 107,991   |           |  |           | 3,720   |           |  |            | 23,613  |              |  |           | 34,420  |            |  |        |       |         |  |  | 169,744   |  |  |  | 79.7  |  |  |   | 921,719    |  |  |   | 6.81  |  |  |   | 11,500  | 
|Vineyards Marketplace                   |  |                  | 21,415    |           |  |           |        |           |  |            | 27,625  |              |  |           | 6,979   |            |  |        |       |         |  |  | 56,019    |  |  |  | 87.5  |  |  |   | 740,521    |  |  |   | 15.10 |  |  |   |        | 
|                                        |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|Subtotal Southern California            |  |                  | 1,432,717 |           |  |           | 260,571 |           |  |            | 623,253 |              |  |           | 159,385 |            |  |        | 63,142 |         |  |  | 2,475,926 |  |  |  | 93.6  |  |  |   | 28,745,408 |  |  |   | 12.41 |  |  |   | 206,500 | 
|                                        |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|Southwest                               |  |                  |           |           |  |           |         |           |  |            |         |              |  |           |         |            |  |        |        |         |  |  |           |  |  |  |       |  |  |   |            |  |  |   |       |  |  |   |         | 
|Kyrene Village Shopping Center          |  |                  | 93,279    |           |  |           | 5,120   |           |  |            | 44,743  |              |  |           | 17,947  |            |  |        |       |         |  |  | 161,089   |  |  |  | 88.9  |  |  |   | 1,076,866  |  |  |   | 7.52  |  |  |   |        | 
|North Mountain Village                  |  |                  | 41,215    |           |  |           |        |           |  |            | 46,257  |              |  |           | 6,907   |            |  |        |       |         |  |  | 94,379    |  |  |  | 92.7  |  |  |   | 875,807    |  |  |   | 10.01 |  |  |   |        | 
|Randolph Plaza                          |  |                  | 135,110   |           |  |           | 6,150   |           |  |            | 33,267  |              |  |           | 4,855   |            |  |        |       |         |  |  | 179,382   |  |  |  | 97.3  |  |  |   | 1,113,387  |  |  |   | 6.38  |  |  |   | 45,000  | 

14



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##### Table of Contents



|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|-------------------------------- |  | ---------------- | --------- | --------- |  | --------- | ------- | --------- |  | ---------- | --------- | ------------ |  | --------- | ------- | ---------- |  | ------ | ------ | ------- |  |  | --------- | - |  |  | ----- |  |  | - | ---------- |  |  | - | ----- |  |  | - | --------- | 
|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |           
|                                 |  | Total Leased GLA |           |           |  |           |         |           |  |            |           |              |  |           |         |           
|                                 |  | (sq. ft)         |           | Available |  | GLA to be |         | Company   |  |            |           | Annualized   |  | Average   |         | Annual    
|                                 |  |                  |           | GLA       |  | Built     |         | Owned GLA |  | Percentage |           | Base         |  | Base Rent |         | Percentage
|Property Name                    |  | Anchor(1)        |           | Pad(2)    |  | Shop(3)   |         | (sq. ft.) |  | (sq. ft.)  |           | (sq. ft.)(4) |  | Leased(4) |         | Rent(5)    |  | psf(6) |        | Rent(7)
|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |        
|Southern Palms                   |  |                  | 103,875   |           |  |           | 20,025  |           |  |            | 97,745    |              |  |           | 33,218  |            |  |        |       |         |  |  | 254,863   |   |  |  | 87.0  |  |  |   | 2,044,542  |  |  |   | 9.22  |  |  |   | 58,550    | 
|Sunrise Place Center             |  |                  | 103,025   |           |  |           | 5,100   |           |  |            | 16,114    |              |  |           | 12,680  |            |  |        | 7,080  |         |  |  | 136,919   |   |  |  | 90.7  |  |  |   | 672,105    |  |  |   | 5.41  |  |  |   |          | 
|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|Subtotal Southwest               |  |                  | 476,504   |           |  |           | 36,395  |           |  |            | 238,126   |              |  |           | 75,607  |            |  |        | 7,080  |         |  |  | 826,632   |   |  |  | 90.9  |  |  |   | 5,782,707  |  |  |   | 7.70  |  |  |   | 103,550   | 
|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|TOTAL COMMUNITY SHOPPING CENTERS |  |                  | 2,641,828 |           |  |           | 405,162 |           |  |            | 1,418,003 |              |  |           | 400,146 |            |  |        | 74,722 |         |  |  | 4,865,139 |   |  |  | 91.8  |  |  |   | 49,185,991 |  |  |   | 11.02 |  |  |   | 736,450   | 
|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|REGIONAL MALLS                   |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|Baldwin Hills Crenshaw Plaza     |  |                  | 291,554   |           |  |           | 29,610  |           |  |            | 175,103   |              |  |           | 13,337  |            |  |        |       |         |  |  | 509,604   |   |  |  | 97.4  |  |  |   | 7,812,436  |  |  |   | 15.74 |  |  |   | 132,300   | 
|Media City Center                |  |                  | 467,961   |           |  |           | 48,984  |           |  |            | 240,407   |              |  |           | 61,053  |            |  |        |       |         |  |  | 818,405   |   |  |  | 92.5  |  |  |   | 13,086,889 |  |  |   | 17.28 |  |  |   | 210,900   | 
|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|TOTAL REGIONAL MALLS             |  |                  | 759,515   |           |  |           | 78,594  |           |  |            | 415,510   |              |  |           | 74,390  |            |  |        |       |         |  |  | 1,328,009 |   |  |  | 94.4  |  |  |   | 20,899,325 |  |  |   | 16.67 |  |  |   | 343,200   | 
|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|SINGLE TENANT FACILITIES         |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|Kmart  Phoenix, AZ              |  |                  | 104,204   |           |  |           |        |           |  |            |          |              |  |           |        |            |  |        |       |         |  |  | 104,204   |   |  |  | 100.0 |  |  |   | 551,576    |  |  |   | 5.29  |  |  |   |          | 
|Sams Club  Downey CA           |  |                  | 110,822   |           |  |           | 3,900   |           |  |            |          |              |  |           |        |            |  |        |       |         |  |  | 114,722   |   |  |  | 100.0 |  |  |   | 732,765    |  |  |   | 6.39  |  |  |   | 150,000   | 
|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|TOTAL SINGLE TENANT FACILITIES   |  |                  | 215,026   |           |  |           | 3,900   |           |  |            |          |              |  |           |        |            |  |        |       |         |  |  | 218,926   |   |  |  | 100.0 |  |  |   | 1,284,341  |  |  |   | 5.87  |  |  |   | 150,000   | 
|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|TOTAL PROPERTIES                 |  |                  | 3,616,369 |           |  |           | 487,656 |           |  |            | 1,833,513 |              |  |           | 474,536 |            |  |        | 74,722 |         |  |  | 6,412,074 |   |  |  | 92.6  |  |  | $ | 71,369,657 |  |  | $ | 12.02 |  |  | $ | 1,229,650 | 
|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|PERCENT OF TOTAL GLA             |  |                  | 56.40     | %         |  |           | 7.60    | %         |  |            | 28.60%    |              |  |           | 7.40    | %          |  |        |       |         |  |  | 100.00    | % |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 
|                                 |  |                  |           |           |  |           |         |           |  |            |           |              |  |           |         |            |  |        |        |         |  |  |           |   |  |  |       |  |  |   |            |  |  |   |       |  |  |   |           | 



---



|    |                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Anchor tenants are defined as those retail
	tenants occupying more than 25,000 square feet of GLA, 10%
	of a Propertys aggregate GLA, or which represent a
	significant drawing power for the Property.                                                                                                                            
|   
|(2) | Pad tenants means freestanding single tenants.                                                                                                                                                                                                                                                                                      
|   
|(3) | Includes certain office space.                                                                                                                                                                                                                                                                                                      
|   
|(4) | Based upon Company Owned GLA, excluding GLA to be
	built.                                                                                                                                                                                                                                                                           
|   
|(5) | Total annualized base rents of the Company for
	leases signed as of December 31, 2001, excluding
	(i) percentage rents, (ii) additional amounts payable
	by tenants such as common area maintenance, real estate taxes
	and other expense reimbursements and (iii) future
	contractual rent escalations or cost of living increases.
|   
|(6) | Calculated as total annualized base rent divided
	by GLA actually leased as of December 31, 2001.                                                                                                                                                                                                                                   
|   
|(7) | Annual percentage rent reported during 2001.                                                                                                                                                                                                                                                                                        

15



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##### Table of Contents





| |                     
| | --------------------
| | Tenant Concentration

The following table sets forth, as of
December 31, 2001, information as to anchor and/or national
retail tenants which individually accounted for at
least 1.0% of total annualized base rent of the Properties:

|                             |       |           |    |            |  |            |           |            |  |            |      |       |   |  |         |           |  |  |      |       |  
|---------------------------- | ----- | --------- | -- | ---------- |  | ---------- | --------- | ---------- |  | ---------- | ---- | ----- | - |  | ------- | --------- |  |  | ---- | ----- | -
|                             |       |           |    |            |  |            |           |            |  | Percentage
|                             |       |           |    |            |  | Percentage |           |            |  | of Leased 
|                             |       |           |    |            |  | of Total   |           | Total      |  | Company   
|                             |       | Number    |    | Annualized |  | Annualized |           | Tenant     |  | Owned     
|Retail Tenant(1)             |       | of Stores |    | Base Rent  |  | Base Rent  |           | GLA        |  | GLA       
|                             |       |           |    |            |  |            |           |            |  |           
|Wal-Mart Stores Inc.         |       |           | 3  |            |  | $          | 3,038,834 |            |  |            | 4.26 | %     |   |  | 360,741 |           |  |  | 6.08 | %    
|AMC Theatres                 |       |           | 3  |            |  |            | 2,983,344 |            |  |            | 4.18 | %     |   |  | 125,429 |           |  |  | 2.11 | %    
|TJX Companies Inc.           |       |           | 7  |            |  |            | 1,682,059 |            |  |            | 2.36 | %     |   |  | 199,582 |           |  |  | 3.36 | %    
|Lowes Cineplex Entertainment |       |           | 1  |            |  |            | 1,402,011 |            |  |            | 1.96 | %     |   |  | 67,579  |           |  |  | 1.14 | %    
|Albertsons Inc.             |       |           | 5  |            |  |            | 1,307,854 |            |  |            | 1.83 | %     |   |  | 188,432 |           |  |  | 3.17 | %    
|Staples Inc.                 |       |           | 5  |            |  |            | 1,245,128 |            |  |            | 1.74 | %     |   |  | 110,881 |           |  |  | 1.87 | %    
|Safeway Inc.                 |       |           | 4  |            |  |            | 1,201,654 |            |  |            | 1.68 | %     |   |  | 164,207 |           |  |  | 2.77 | %    
|Kroger Co.                   |       |           | 4  |            |  |            | 1,144,006 |            |  |            | 1.60 | %     |   |  | 251,066 |           |  |  | 4.23 | %    
|Circuit City Stores Inc.     |       |           | 3  |            |  |            | 1,088,400 |            |  |            | 1.53 | %     |   |  | 84,680  |           |  |  | 1.43 | %    
|Home Depot Inc.              |       |           | 2  |            |  |            | 1,052,330 |            |  |            | 1.47 | %     |   |  | 100,464 |           |  |  | 1.69 | %    
|Ross Stores Inc.             |       |           | 4  |            |  |            | 933,100   |            |  |            | 1.31 | %     |   |  | 117,852 |           |  |  | 1.98 | %    
|Federated Department Stores  |       |           | 1  |            |  |            | 894,179   |            |  |            | 1.25 | %     |   |  | 237,145 |           |  |  | 3.99 | %    
|The Limited Inc.             |       |           | 11 |            |  |            | 827,198   |            |  |            | 1.16 | %     |   |  | 57,370  |           |  |  | 0.97 | %    
|Cinemark USA Inc.            |       |           | 1  |            |  |            | 798,566   |            |  |            | 1.12 | %     |   |  | 57,273  |           |  |  | 0.96 | %    
|Toys R Us Inc.             |       |           | 2  |            |  |            | 787,272   |            |  |            | 1.10 | %     |   |  | 82,022  |           |  |  | 1.38 | %    
|Sport Chalet                 |       |           | 1  |            |  |            | 775,508   |            |  |            | 1.09 | %     |   |  | 44,957  |           |  |  | 0.76 | %    
|Kmart Corp.                  |       |           | 2  |            |  |            | 769,756   |            |  |            | 1.08 | %     |   |  | 186,708 |           |  |  | 3.14 | %    
|Virgin Entertainment Group   |       |           | 1  |            |  |            | 756,000   |            |  |            | 1.06 | %     |   |  | 30,000  |           |  |  | 0.51 | %    
|Payless Shoesource Inc.      |       |           | 11 |            |  |            | 754,832   |            |  |            | 1.06 | %     |   |  | 36,634  |           |  |  | 0.62 | %    
|Barnes & Noble               |       |           | 2  |            |  |            | 742,531   |            |  |            | 1.04 | %     |   |  | 35,285  |           |  |  | 0.59 | %    
|Office Depot Inc.            |       |           | 3  |            |  |            | 718,679   |            |  |            | 1.01 | %     |   |  | 77,000  |           |  |  | 1.30 | %    
|                             |       |           |    |            |  |            |           |            |  |            |      |       |   |  |         |           |  |  |      |      
|                             | TOTAL |           |    | 76         |  |            | $         | 24,903,241 |  |            |      | 34.89 | % |  |         | 2,615,307 |  |  |      | 44.05 | %
|                             |       |           |    |            |  |            |           |            |  |            |      |       |   |  |         |           |  |  |      |      



---



|    |                            
|--- | ---------------------------
|(1) | Excludes non-owned Anchors.

The following table sets forth, as of
December 31, 2001, square footage of GLA leased to
national, regional and local retail tenants and the annualized
base rent generated from each:

|               |       |            |            |            |  |             |      |            |   |   |       |       |  |  |      |        |  
|-------------- | ----- | ---------- | ---------- | ---------- |  | ----------- | ---- | ---------- | - | - | ----- | ----- |  |  | ---- | ------ | -
|               |       |            |            |            |  | Average     |      |           
|               |       |            |            | % of Total |  | Annual Base |      | Percent of
|               |       | Annualized |            | Annualized |  | Rent Per    |      | Total     
|Type of Tenant |       | Base Rent  |            | Base Rent  |  | Square Foot |      | Leased GLA
|               |       |            |            |            |  |             |      |           
|National(1)    |       | $          | 53,304,497 |            |  |             | 74.7 | %          |   | $ | 11.00 |       |  |  | 81.6 | %     
|Regional(2)    |       |            | 2,577,228  |            |  |             | 3.6  | %          |   |   | 18.43 |       |  |  | 2.4  | %     
|Local(3)       |       |            | 15,487,932 |            |  |             | 21.7 | %          |   |   | 16.29 |       |  |  | 16.0 | %     
|               |       |            |            |            |  |             |      |            |   |   |       |       |  |  |      |       
|               | TOTAL |            | $          | 71,369,657 |  |             |      | 100.00     | % |   | $     | 12.02 |  |  |      | 100.00 | %
|               |       |            |            |            |  |             |      |            |   |   |       |       |  |  |      |       



---



|    |                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|(1) | National tenant refers to a business operating in
	three or more metropolitan areas located in at least three
	separate states.           
|   
|(2) | Regional tenant refers to a business operating in
	more than one metropolitan area in one or two states. Includes
	financial institutions.
|   
|(3) | Local tenant refers to a business operating in
	only one metropolitan area.                                                               

16



---



##### Table of Contents



The following table sets forth, as of
December 31, 2001, the annualized base rent of all of the
Properties, the percentage of annualized base rent, the average
rent per square foot and the percentage leased, broken down by
type of tenant:

|              |       |            |            |            |  |             |      |         |   |   |       |       |  |  |      |      |  
|------------- | ----- | ---------- | ---------- | ---------- |  | ----------- | ---- | ------- | - | - | ----- | ----- |  |  | ---- | ---- | -
|              |       |            |            | Average    |  |             |      |        
|              |       |            |            | % of Total |  | Annual Base |      |        
|              |       | Annualized |            | Annualized |  | Rent Per    |      | Percent
|Type of Space |       | Base Rent  |            | Base Rent  |  | Square Foot |      | Leased 
|              |       |            |            |            |  |             |      |        
|Anchor        |       | $          | 30,422,142 |            |  |             | 42.6 | %       |   | $ | 8.41  |       |  |  | 97.7 | %   
|Pad           |       |            | 7,451,368  |            |  |             | 10.4 | %       |   |   | 15.28 |       |  |  | 94.4 | %   
|Shop          |       |            | 33,496,147 |            |  |             | 47.0 | %       |   |   | 18.27 |       |  |  | 83.5 | %   
|              |       |            |            |            |  |             |      |         |   |   |       |       |  |  |      |     
|              | TOTAL |            | $          | 71,369,657 |  |             |      | 100.00  | % |   | $     | 12.02 |  |  |      | 92.6 | %
|              |       |            |            |            |  |             |      |         |   |   |       |       |  |  |      |     

Segment Concentration

The following table sets forth, as of
December 31, 2001, information related to the business
segments in which our tenants operate which accounted for at
least 2% of our annualized base rent of the properties:

|                             |       |           |     |               |  |            |           |            |  |            |      |       |   |  |         |           |  |  |       |       |  
|---------------------------- | ----- | --------- | --- | ------------- |  | ---------- | --------- | ---------- |  | ---------- | ---- | ----- | - |  | ------- | --------- |  |  | ----- | ----- | -
|                             |       |           |     |               |  |            |           |            |  | Percentage
|                             |       |           |     |               |  | Percentage |           |            |  | of Leased 
|                             |       |           |     | Total Segment |  | of Total   |           | Total      |  | Company   
|                             |       | Number    |     | Annualized    |  | Annualized |           | Segment    |  | Owned     
|Retail Tenant(1)             |       | of Stores |     | Base Rent     |  | Base Rent  |           | GLA        |  | GLA       
|                             |       |           |     |               |  |            |           |            |  |           
|Restaurants                  |       |           | 64  |               |  | $          | 5,373,529 |            |  |            | 7.53 | %     |   |  | 325,372 |           |  |  | 5.48  | %    
|Fast Food                    |       |           | 140 |               |  |            | 5,290,041 |            |  |            | 7.41 | %     |   |  | 237,541 |           |  |  | 4.00  | %    
|Supermarkets                 |       |           | 15  |               |  |            | 5,290,557 |            |  |            | 7.41 | %     |   |  | 723,800 |           |  |  | 12.19 | %    
|Theaters                     |       |           | 5   |               |  |            | 5,183,921 |            |  |            | 7.26 | %     |   |  | 250,281 |           |  |  | 4.22  | %    
|Discount Retailers           |       |           | 7   |               |  |            | 4,518,145 |            |  |            | 6.33 | %     |   |  | 767,831 |           |  |  | 12.93 | %    
|Financial/ Business Services |       |           | 119 |               |  |            | 4,115,454 |            |  |            | 5.77 | %     |   |  | 254,278 |           |  |  | 4.28  | %    
|Family Apparel               |       |           | 27  |               |  |            | 4,063,138 |            |  |            | 5.69 | %     |   |  | 452,941 |           |  |  | 7.63  | %    
|Health & Beauty              |       |           | 110 |               |  |            | 3,467,808 |            |  |            | 4.86 | %     |   |  | 201,582 |           |  |  | 3.40  | %    
|Electronics                  |       |           | 27  |               |  |            | 3,206,513 |            |  |            | 4.49 | %     |   |  | 166,173 |           |  |  | 2.80  | %    
|Music and Video              |       |           | 29  |               |  |            | 2,869,635 |            |  |            | 4.02 | %     |   |  | 148,288 |           |  |  | 2.50  | %    
|Womens Apparel              |       |           | 39  |               |  |            | 2,593,207 |            |  |            | 3.63 | %     |   |  | 163,763 |           |  |  | 2.76  | %    
|Home Furnishings/ Housewares |       |           | 25  |               |  |            | 2,228,269 |            |  |            | 3.12 | %     |   |  | 174,128 |           |  |  | 2.93  | %    
|Footwear                     |       |           | 34  |               |  |            | 2,166,421 |            |  |            | 3.04 | %     |   |  | 108,705 |           |  |  | 1.83  | %    
|Office Supply                |       |           | 7   |               |  |            | 1,775,706 |            |  |            | 2.49 | %     |   |  | 173,781 |           |  |  | 2.93  | %    
|Personal Services            |       |           | 51  |               |  |            | 1,691,094 |            |  |            | 2.37 | %     |   |  | 99,450  |           |  |  | 1.67  | %    
|                             |       |           |     |               |  |            |           |            |  |            |      |       |   |  |         |           |  |  |       |      
|                             | TOTAL |           |     | 699           |  |            | $         | 53,833,438 |  |            |      | 75.43 | % |  |         | 4,247,914 |  |  |       | 71.54 | %
|                             |       |           |     |               |  |            |           |            |  |            |      |       |   |  |         |           |  |  |       |      



---



|    |                            
|--- | ---------------------------
|(1) | Excludes non-owned anchors.

17



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##### Table of Contents



Tenant Lease Expirations and
Renewals

The following table sets forth, as of
December 31, 2001, tenant lease expirations for the
Properties, assuming that no tenants exercise renewal options:

|                   |       |                   |     |         |  |          |           |           |  |          |       |        |  |          |           |           |  |          |       |      |  |  |         |         |  |   |       |       |  |  |         |           |  |   |       |       | 
|------------------ | ----- | ----------------- | --- | ------- |  | -------- | --------- | --------- |  | -------- | ----- | ------ |  | -------- | --------- | --------- |  | -------- | ----- | ---- |  |  | ------- | ------- |  | - | ----- | ----- |  |  | ------- | --------- |  | - | ----- | ----- | 
|                   |       |                   |     |         |  |          |           |          
|                   |       | Overall Portfolio |     | Anchors |  | Pads     |           | Shops    
|                   |       |                   |     |         |  |          |           |          
|                   |       | Number            |     |         |  | Base     |           |           |  | Base     |       |        |  | Base     |           |           |  | Base    
|                   |       | of                |     | Square  |  | Rent Per |           | Square    |  | Rent Per |       | Square |  | Rent Per |           | Square    |  | Rent Per
|Year of Expiration |       | Leases            |     | Feet    |  | Sq. Ft.  |           | Feet      |  | Sq. Ft.  |       | Feet   |  | Sq. Ft.  |           | Feet      |  | Sq. Ft. 
|                   |       |                   |     |         |  |          |           |           |  |          |       |        |  |          |           |           |  |         
|Month-to-Month     |       |                   | 152 |         |  |          | 213,029   |           |  | $        | 19.91 |        |  |          |          |           |  |          |      |      |  |  | 8,850   |         |  | $ | 12.35 |       |  |  | 204,179 |           |  | $ | 20.24 |      
|2002               |       |                   | 178 |         |  |          | 493,806   |           |  |          | 15.46 |        |  |          | 216,959   |           |  | $        | 6.77  |      |  |  | 17,298  |         |  |   | 19.91 |       |  |  | 259,549 |           |  |   | 22.42 |      
|2003               |       |                   | 130 |         |  |          | 400,894   |           |  |          | 14.33 |        |  |          | 121,350   |           |  |          | 6.62  |      |  |  | 36,575  |         |  |   | 16.65 |       |  |  | 242,969 |           |  |   | 17.83 |      
|2004               |       |                   | 132 |         |  |          | 578,770   |           |  |          | 11.92 |        |  |          | 272,931   |           |  |          | 5.89  |      |  |  | 34,671  |         |  |   | 17.74 |       |  |  | 271,168 |           |  |   | 17.24 |      
|2005               |       |                   | 112 |         |  |          | 514,216   |           |  |          | 16.40 |        |  |          | 245,950   |           |  |          | 14.83 |      |  |  | 39,809  |         |  |   | 18.92 |       |  |  | 228,457 |           |  |   | 17.65 |      
|2006               |       |                   | 130 |         |  |          | 642,450   |           |  |          | 14.29 |        |  |          | 305,906   |           |  |          | 11.54 |      |  |  | 47,712  |         |  |   | 14.89 |       |  |  | 288,832 |           |  |   | 17.10 |      
|2007               |       |                   | 43  |         |  |          | 384,478   |           |  |          | 9.42  |        |  |          | 201,597   |           |  |          | 5.36  |      |  |  | 54,642  |         |  |   | 11.53 |       |  |  | 128,239 |           |  |   | 14.91 |      
|2008               |       |                   | 26  |         |  |          | 361,792   |           |  |          | 11.47 |        |  |          | 304,429   |           |  |          | 10.12 |      |  |  | 23,849  |         |  |   | 20.66 |       |  |  | 33,514  |           |  |   | 17.17 |      
|2009               |       |                   | 20  |         |  |          | 455,070   |           |  |          | 7.56  |        |  |          | 401,928   |           |  |          | 5.94  |      |  |  | 38,679  |         |  |   | 17.77 |       |  |  | 14,463  |           |  |   | 25.36 |      
|2010               |       |                   | 23  |         |  |          | 442,844   |           |  |          | 8.65  |        |  |          | 372,073   |           |  |          | 7.66  |      |  |  | 46,406  |         |  |   | 12.00 |       |  |  | 24,365  |           |  |   | 17.48 |      
|Thereafter         |       |                   | 68  |         |  |          | 1,450,189 |           |  |          | 9.49  |        |  |          | 1,173,246 |           |  |          | 8.49  |      |  |  | 139,165 |         |  |   | 13.96 |       |  |  | 137,778 |           |  |   | 13.43 |      
|                   |       |                   |     |         |  |          |           |           |  |          |       |        |  |          |           |           |  |          |       |      |  |  |         |         |  |   |       |       |  |  |         |           |  |   |       |      
|                   | TOTAL |                   |     | 1,014   |  |          |           | 5,937,538 |  |          | $     | 12.02  |  |          |           | 3,616,369 |  |          | $     | 8.41 |  |  |         | 487,656 |  |   | $     | 15.28 |  |  |         | 1,833,513 |  |   | $     | 18.27 | 
|                   |       |                   |     |         |  |          |           |           |  |          |       |        |  |          |           |           |  |          |       |      |  |  |         |         |  |   |       |       |  |  |         |           |  |   |       |      

The following table sets forth, as of
December 31, 2001, tenant lease expirations for the
Community Centers, assuming that no tenants exercise renewal
options:

|                   |       |                   |     |         |  |          |         |           |  |          |       |        |  |          |         |           |  |          |       |      |  |  |         |         |  |   |       |       |  |  |         |           |  |   |       |       | 
|------------------ | ----- | ----------------- | --- | ------- |  | -------- | ------- | --------- |  | -------- | ----- | ------ |  | -------- | ------- | --------- |  | -------- | ----- | ---- |  |  | ------- | ------- |  | - | ----- | ----- |  |  | ------- | --------- |  | - | ----- | ----- | 
|                   |       |                   |     |         |  |          |         |          
|                   |       | Community Centers |     | Anchors |  | Pads     |         | Shops    
|                   |       |                   |     |         |  |          |         |          
|                   |       | Number            |     |         |  | Base     |         |           |  | Base     |       |        |  | Base     |         |           |  | Base    
|                   |       | of                |     | Square  |  | Rent Per |         | Square    |  | Rent Per |       | Square |  | Rent Per |         | Square    |  | Rent Per
|Year of Expiration |       | Leases            |     | Feet    |  | Sq. Ft.  |         | Feet      |  | Sq. Ft.  |       | Feet   |  | Sq. Ft.  |         | Feet      |  | Sq. Ft. 
|                   |       |                   |     |         |  |          |         |           |  |          |       |        |  |          |         |           |  |         
|Month-to-Month     |       |                   | 56  |         |  |          | 73,308  |           |  | $        | 13.37 |        |  |          |        |           |  |          |      |      |  |  | 3,150   |         |  | $ | 10.00 |       |  |  | 70,158  |           |  | $ | 13.53 |      
|2002               |       |                   | 122 |         |  |          | 420,202 |           |  |          | 12.26 |        |  |          | 216,959 |           |  | $        | 6.77  |      |  |  | 16,258  |         |  |   | 18.36 |       |  |  | 186,985 |           |  |   | 18.09 |      
|2003               |       |                   | 103 |         |  |          | 353,290 |           |  |          | 12.55 |        |  |          | 121,350 |           |  |          | 6.62  |      |  |  | 36,575  |         |  |   | 16.65 |       |  |  | 195,365 |           |  |   | 15.46 |      
|2004               |       |                   | 105 |         |  |          | 496,508 |           |  |          | 10.54 |        |  |          | 242,359 |           |  |          | 5.15  |      |  |  | 28,171  |         |  |   | 19.70 |       |  |  | 225,978 |           |  |   | 15.18 |      
|2005               |       |                   | 92  |         |  |          | 384,089 |           |  |          | 14.32 |        |  |          | 148,371 |           |  |          | 10.03 |      |  |  | 38,089  |         |  |   | 18.36 |       |  |  | 197,629 |           |  |   | 16.76 |      
|2006               |       |                   | 119 |         |  |          | 594,539 |           |  |          | 13.65 |        |  |          | 280,602 |           |  |          | 10.61 |      |  |  | 41,302  |         |  |   | 15.97 |       |  |  | 272,635 |           |  |   | 16.42 |      
|2007               |       |                   | 35  |         |  |          | 337,696 |           |  |          | 8.12  |        |  |          | 201,597 |           |  |          | 5.36  |      |  |  | 54,642  |         |  |   | 11.53 |       |  |  | 81,457  |           |  |   | 12.65 |      
|2008               |       |                   | 21  |         |  |          | 308,187 |           |  |          | 9.93  |        |  |          | 259,472 |           |  |          | 8.89  |      |  |  | 18.849  |         |  |   | 16.59 |       |  |  | 29,866  |           |  |   | 14.78 |      
|2009               |       |                   | 15  |         |  |          | 330,207 |           |  |          | 7.52  |        |  |          | 291,106 |           |  |          | 5.79  |      |  |  | 25,197  |         |  |   | 17.96 |       |  |  | 13,904  |           |  |   | 24.66 |      
|2010               |       |                   | 16  |         |  |          | 254,484 |           |  |          | 8.58  |        |  |          | 196,620 |           |  |          | 7.16  |      |  |  | 41,406  |         |  |   | 11.56 |       |  |  | 16,458  |           |  |   | 18.01 |      
|Thereafter         |       |                   | 47  |         |  |          | 912,483 |           |  |          | 9.82  |        |  |          | 683,392 |           |  |          | 9.09  |      |  |  | 101,523 |         |  |   | 11.45 |       |  |  | 127,568 |           |  |   | 12.44 |      
|                   |       |                   |     |         |  |          |         |           |  |          |       |        |  |          |         |           |  |          |       |      |  |  |         |         |  |   |       |       |  |  |         |           |  |   |       |      
|                   | TOTAL |                   |     | 731     |  |          |         | 4,464,993 |  |          | $     | 11.02  |  |          |         | 2,641,828 |  |          | $     | 7.83 |  |  |         | 405,162 |  |   | $     | 14.53 |  |  |         | 1,418,003 |  |   | $     | 15.95 | 
|                   |       |                   |     |         |  |          |         |           |  |          |       |        |  |          |         |           |  |          |       |      |  |  |         |         |  |   |       |       |  |  |         |           |  |   |       |      

18



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##### Table of Contents



Debt Secured by Properties

The following table summarizes the outstanding
indebtedness secured by the Companys Properties as of
December 31, 2001 (dollars in thousands):

|                                                         |                               |                                               |  |          |        |          |      |          |  |   |         |         | 
|-------------------------------------------------------- | ----------------------------- | --------------------------------------------- |  | -------- | ------ | -------- | ---- | -------- |  | - | ------- | ------- | 
|                                                         |                               |                                               |  | Interest |        | Maturity |      |         
|Lender                                                   |                               | Property                                      |  | Rate     |        | Date     |      | Balance 
|                                                         |                               |                                               |  |          |        |          |      |         
|Fixed Rate Mortgages:                                    |                               |                                               |  |          |        |          |      |          |  |   |         |        
|Metropolitan Life Insurance Company                      |                               | Date Palm Center                              |  |          | 10.450 | %        |      | 07/01/02 |  | $ | 8,933   |        
|The Travelers Insurance Company                          |                               | North County                                  |  |          | 10.375 | %        |      | 01/31/03 |  |   | 14,865  |        
|Column Financial, Inc.                                   |                               | Mineral King Plaza                            |  |          | 9.680  | %        |      | 08/01/06 |  |   | 3,481   |        
|Eastrich #79 Corporation (AEW
	Loan #1)(1)               |                               | K-Mart Phoenix                                |  |          | 11.450 | %        |      | 10/15/06 |  |   | 1,382   |        
|Eastrich #79 Corporation (AEW
	Loan #2)(2)               |                               | Lakewood, Sams Club-Downey and Parkway Place |  |          | 10.900 | %        |      | 10/15/06 |  |   | 8,286   |        
|Chase Commercial Mortgage Banking
	Corp.                 |                               | Vineyards Marketplace                         |  |          | 8.300  | %        |      | 11/10/09 |  |   | 5,119   |        
|Chase Commercial Mortgage Banking
	Corp.                 |                               | Kyrene Village                                |  |          | 8.300  | %        |      | 11/10/09 |  |   | 7,835   |        
|First Union National Bank(3)                             |                               | Gardena                                       |  |          | 7.750  | %        |      | 06/01/09 |  |   | 6,762   |        
|First Union National Bank(3)                             |                               | Gresham                                       |  |          | 7.750  | %        |      | 06/01/09 |  |   | 16,464  |        
|First Union National Bank(3)                             |                               | Loma                                          |  |          | 7.750  | %        |      | 06/01/09 |  |   | 18,179  |        
|First Union National Bank(3)                             |                               | Southpointe                                   |  |          | 7.750  | %        |      | 06/01/09 |  |   | 9,555   |        
|Principal Capital                                        |                               | North Mountain Village                        |  |          | 7.680  | %        |      | 08/01/11 |  |   | 7,133   |        
|Prudential Mortgage Capital Co.                          |                               | Randolph                                      |  |          | 6.760  | %        |      | 01/01/12 |  |   | 7,100   |        
|Prudential Mortgage Capital Co.                          |                               | Mountain Square                               |  |          | 6.760  | %        |      | 01/01/12 |  |   | 24,625  |        
|Prudential Mortgage Capital Co.                          |                               | Fire Mountain                                 |  |          | 7.130  | %        |      | 01/01/12 |  |   | 11,850  |        
|Prudential Mortgage Capital Co.                          |                               | Silverdale Shopping Center                    |  |          | 7.100  | %        |      | 01/01/12 |  |   | 5,700   |        
|Prudential Mortgage Capital Co.                          |                               | Ross Center                                   |  |          | 7.100  | %        |      | 01/01/12 |  |   | 11,775  |        
|Prudential Mortgage Capital Co.                          |                               | Vancouver Park Place                          |  |          | 6.910  | %        |      | 01/01/12 |  |   | 7,600   |        
|                                                         |                               |                                               |  |          |        |          |      |          |  |   |         |        
|                                                         | Total Fixed Rate Mortgages    |                                               |  |          |        | 8.040    | %(7) |          |  |   |         | 176,644 | 
|                                                         |                               |                                               |  |          |        |          |      |          |  |   |         |        
|Variable-Rate Mortgages:                                 |                               |                                               |  |          |        |          |      |          |  |   |         |        
|Chase Manhattan Bank(4)                                  |                               | Country Fair Shopping Center                  |  |          | 5.500  | %        |      | 12/10/02 |  |   | 16,150  |        
|Chase Manhattan Bank(4)                                  |                               | Fullerton Town Center                         |  |          | 5.500  | %        |      | 12/10/02 |  |   | 24,000  |        
|Chase Manhattan Bank(4)                                  |                               | La Verne Towne Center                         |  |          | 5.500  | %        |      | 12/10/02 |  |   | 10,035  |        
|United California Bank(5)                                |                               | El Camino North                               |  |          | 6.188  | %        |      | 02/28/03 |  |   | 25,000  |        
|                                                         |                               |                                               |  |          |        |          |      |          |  |   |         |        
|                                                         | Total Variable-Rate Mortgages |                                               |  |          |        | 5.729    | %(7) |          |  |   |         | 75,185  | 
|                                                         |                               |                                               |  |          |        |          |      |          |  |   |         |        
|Other Secured Debt                                       |                               |                                               |  |          |        |          |      |          |  |   |         |        
|CRA  Certificates of Participation,
	Series 1985        |                               | Baldwin Hills Crenshaw Plaza                  |  |          | 4.220  | %        |      | 12/01/14 |  |   | 30,000  |        
|CDC  Certificates of Participation
	Series 1985         |                               | Kenneth Hahn Plaza                            |  |          | 3.940  | %        |      | 11/01/15 |  |   | 6,000   |        
|Secured Credit Facility  General
	Electric Capital Corp |                               | (6)                                           |  |          | 4.458  | %        |      | 04/01/02 |  |   | 114,548 |        
|                                                         |                               |                                               |  |          |        |          |      |          |  |   |         |        
|                                                         | Total Other Secured Debt      |                                               |  |          |        | 4.390    | %(7) |          |  |   |         | 150,548 | 
|                                                         |                               |                                               |  |          |        |          |      |          |  |   |         |        
|                                                         | Total secured debt            |                                               |  |          |        | 6.242    | %(7) |          |  |   | $       | 402,377 | 
|                                                         |                               |                                               |  |          |        |          |      |          |  |   |         |        



---



|    |                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Mortgage cross-collateralized with properties in
	AEW Loan #2.                                                                                                                                                                                                                                                                                                  
|   
|(2) | Mortgage cross-collateralized with property in
	AEW Loan #1.                                                                                                                                                                                                                                                                                                    
|   
|(3) | Gardena, Gresham, Loma Square and Southpointe are
	cross-collateralized and cross-defaulted.                                                                                                                                                                                                                                                                    
|   
|(4) | Interest based on LIBOR plus 230 basis points.
	Mortgages have a LIBOR floor of 3.2%. Mortgage provides for
	three one-year extensions.                                                                                                                                                                                                                         
|   
|(5) | Interest based on LIBOR plus 250 basis points.
	Loan provides for two one-year extensions.                                                                                                                                                                                                                                                                      
|   
|(6) | Secured by Media City Center, Medford Shopping
	Center, Sunrise Place, Frontier Village, Rheem Valley, Southern
	Palms, Rosedale Village and Walmart-Baldwin Hills. Interest rate
	at 250 basis points over LIBOR. Subsequent to
	December 31, 2001, the Credit Facility was amended to
	extend the maturity to April 1, 2004 with a one-year
	extension option.
|   
|(7) | Weighted average interest rate.                                                                                                                                                                                                                                                                                                                                 

19



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##### Table of Contents



Aggregate future principal payments by year on
the balance of mortgage indebtedness as of December 31,
2001 is as follows (in thousands):

|           |       |              |       |            |  |       |         |         |  |   |         |         | 
|---------- | ----- | ------------ | ----- | ---------- |  | ----- | ------- | ------- |  | - | ------- | ------- | 
|           |       | Scheduled    |       |            |  |      
|           |       | Amortization |       | Scheduled  |  |      
|Year       |       | Payments     |       | Maturities |  | Total
|           |       |              |       |            |  |      
|2002       |       | $            | 2,561 |            |  | $     | 173,575 | (1)     |  | $ | 176,136 |        
|2003       |       |              | 2,308 |            |  |       | 39,434  |         |  |   | 41,742  |        
|2004       |       |              | 2,442 |            |  |       |        |         |  |   | 2,442   |        
|2005       |       |              | 2,650 |            |  |       |        |         |  |   | 2,650   |        
|2006       |       |              | 2,555 |            |  |       | 8,558   |         |  |   | 11,113  |        
|2007       |       |              | 1,859 |            |  |       |        |         |  |   | 1,859   |        
|2008       |       |              | 1,975 |            |  |       |        |         |  |   | 1,975   |        
|2009       |       |              | 1,641 |            |  |       | 58,157  |         |  |   | 59,798  |        
|2010       |       |              | 1,218 |            |  |       |        |         |  |   | 1,218   |        
|2011       |       |              | 1,260 |            |  |       | 6,353   |         |  |   | 7,613   |        
|Thereafter |       |              |      |            |  |       | 95,831  |         |  |   | 95,831  |        
|           |       |              |       |            |  |       |         |         |  |   |         |        
|           | Total |              | $     | 20,469     |  |       | $       | 381,908 |  |   | $       | 402,377 | 
|           |       |              |       |            |  |       |         |         |  |   |         |        



---



|    |                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes amount outstanding on the Companys
	Credit Facility which was amended subsequent to
	December 31, 2001 to extend the maturity to April 1,
	2004.

Other Assets of the Company

The Companys interest in Media City Center
(Burbank, California) includes an interest in two promissory
notes issued by the Redevelopment Burbank Agency of the City of
Burbank (the Burbank Agency) which mature on
February 1, 2016. The first note, which is nonrecourse to
the Burbank Agency, is unsecured and was issued by the Burbank
Agency on November 15, 1989 with an $18.5 million
principal amount and bears interest at 9.25% per annum. On each
semi-annual payment date the Burbank Agency is required to make
payments on the note to the extent of 70% of the real property
tax increment generated by Media City Center, with certain
exceptions. The second note is secured by certain tax revenues
and was issued by the Burbank Agency on December 6, 1990
with a $33 million initial principal amount and bears
interest at 9.25% per annum. The note is nonrecourse to the
Burbank Agency but is secured by certain real property tax
increments generated by the property as well as certain sales
and use taxes generated by the property. On each semi-annual
payment date the Burbank Agency is required to make payments on
the note only to the extent of such tax items, less rent paid by
Macys. Any amount which accrues under the notes that is
not required to be paid is added to the principal amount of such
notes. Any principal or interest due on either of the notes
which has not been paid (due to the permitted reductions and
limitation on payments described above) as of their respective
maturity dates will be forgiven, and it is not likely that the
full face amount of the notes and the interest thereon will be
paid by such maturity dates. During each of the years ended
December 31, 2001 and 2000, the Company recognized income
of approximately $2,713,000 and during the year ended
December 31, 1999, the company recognized income of
$2,721,000, pursuant to the terms of such agency note agreements.

Under similar commitments from the Community
Redevelopment Agencies of the Cities of Fullerton, Chino and
Upland, other income was recognized for the years ended
December 31, 2001, 2000 and 1999 from Fullerton Town Center
of $56,000, $38,000, and $42,000 respectively, Country Fair
Shopping Center of $163,000, $155,000 and $151,000,
respectively. Mountain Square Shopping Center recorded income of
$300,000 for each of the years ended December 31, 2001,
2000 and 1999. Such commitments expire in 2013, 2012 and 2009
for Fullerton, Chino and Upland, respectively, and any balance
owing to the Company at expiration will be forgiven and
discharged.

Such commitments have not been recorded as assets
in the Companys financial statements as they are
contingent in nature.

20



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##### Table of Contents



Environmental And Other Regulatory
Requirements

Under various federal, state and local laws,
ordinances and regulations, an owner or operator of real
property may become liable for the costs of removal or
remediation of certain hazardous or toxic substances on or in
its properties. Such laws may impose such liability without
regard to whether the Company knew of, or was responsible for,
the presence of such hazardous or toxic substances. The costs of
investigation, removal, or remediation of such substances may be
substantial and the presence of such substances, or the failure
to properly remediate such substances, may adversely affect the
owners ability to sell such real estate or to borrow using
such real estate as collateral. In connection with its ownership
and operation of properties, the Company may be potentially
liable under such laws and may incur costs in responding to such
liabilities. No assurance can be given that any existing
environmental studies with respect to any of the Properties will
reveal all environmental liabilities, that any prior owner or
tenant of a Property did not create any material environmental
condition not known to the Company, that future laws, ordinances
or regulations will not impose any material environmental
liability, or that a material environmental condition does not
otherwise exist as to any one or more Properties.

Pursuant to an Environmental Indemnity Agreement,
as modified by the Separation Agreement, the transferors of
eight of the 36 properties acquired at the time of the
Companys formation in December 1993 (the Original
Properties) have agreed to provide certain indemnities to
the Company for environmental liabilities that may arise with
respect to any contamination on or affecting the condition of
the Original Properties which was known as of December 27,
1993 or which becomes known after December 27, 1993 as a
result of additional environmental testing commenced prior to
December 27, 1993. Pursuant to the transfer documents with
respect to Rosedale Village, Gresham Town Fair, Medford Center
and La Verne Towne, the transferors of such properties provided
certain indemnities with respect to environmental liabilities to
the Company. Because responsibility for such matters is being
retained by the transferors no liabilities have been recorded in
the financial statements of the Company with respect to such
matters. For the Properties acquired during 1998 and 1997 where
the Companys due diligence identified existing or
potential environmental contamination, the Company either
obtained indemnifications from the sellers or had prospective
remediation work paid for by the sellers. For all other
Properties, based on the Companys due diligence, the
Company does not believe that it has exposure to material
environmental clean-up cost.

The Properties are subject to the Americans with
Disabilities Act of 1990 (the ADA). The ADA has
separate compliance requirements for public
accommodations and commercial facilities but
generally requires that all public facilities be made accessible
to people with disabilities. These requirements became effective
in 1992. Although the Company believes that the Properties are
substantially in compliance with the present requirements of the
ADA, the Company may incur additional costs of complying with
the ADA in the future. However, the Company does not believe
that such costs of compliance will have a material effect on the
Company.




Item 3.     Legal
Proceedings

The Company is subject to various legal
proceedings and claims that arise in the ordinary course of
business. These matters are generally covered by insurance.
While the resolution of these matters cannot be predicted with
certainty, management believes, based on currently available
information, that the final outcome of such matters will not
have a material adverse effect on the financial position or
results of operations of the Company.




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

During the fourth quarter of 2001, no matters
were submitted for a vote of stockholders of the Company.

21



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##### Table of Contents






PART II




Item 5.     Market
for Registrants Common Stock and Related Stockholder
Matters

The Companys common stock is listed on the
New York Stock Exchange under the symbol CTA. At
March 15, 2002, the Company had approximately
147 stockholders of record and approximately
4,000 beneficial owners. The following table sets forth
quarterly high and low sales prices of the common stock and the
dividends paid by the Company with respect to each period.

|                    |  |      |        |     |  |           |       |  |  |   |      | 
|------------------- |  | ---- | ------ | --- |  | --------- | ----- |  |  | - | ---- | 
|                    |  |      |        |     |  | Dividends
|                    |  |      |        |     |  | Declared 
|Three Months Ended: |  | High |        | Low |  | Per Share
|                    |  |      |        |     |  |          
|December 31, 2001   |  | $    | 4.250  |     |  | $         | 3.250 |  |  | $ | 0.04 | 
|September 30, 2001  |  |      | 4.900  |     |  |           | 3.820 |  |  |   | 0.04 | 
|June 30, 2001       |  |      | 4.900  |     |  |           | 3.490 |  |  |   | 0.04 | 
|March 31, 2001      |  |      | 6.430  |     |  |           | 3.500 |  |  |   | 0.04 | 
|December 31, 2000   |  |      | 6.000  |     |  |           | 4.563 |  |  |   | 0.21 | 
|September 30, 2000  |  |      | 6.000  |     |  |           | 5.000 |  |  |   | 0.21 | 
|June 30, 2000       |  |      | 7.875  |     |  |           | 4.875 |  |  |   | 0.21 | 
|March 31, 2000      |  |      | 10.500 |     |  |           | 5.938 |  |  |   | 0.21 | 

Distributions included a return of capital
component of 100% for each of the years ended December 31,
2001 and 2000 and 56.9%, for the year ended December 31,
1999. In addition, distributions for the year ended
December 31, 1999 included a 16.5% capital gain.

All distributions made by the Company are at the
discretion of the board of directors and will depend on the
earnings of the Company, its financial condition and such other
factors as the board of directors deems relevant. On
March 20, 2002, the board of directors announced an
increase in the dividend for the quarter ended March 31,
2002 to $0.06 per share. The historical return of capital
component of the Companys distributions is not indicative
of the return of capital component of future distributions,
which may be lower than previous years. In order to qualify for
the beneficial tax treatment accorded to real estate investment
trusts under the Internal Revenue Code, the Company is required
to make distributions to holders of its shares which will be at
least 90% of the Companys real estate investment
trust taxable income, as defined in Section 857 of
the Internal Revenue Code.

22



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##### Table of Contents






Item
6.     Selected Financial
Data

The following table sets forth selected financial
data for the Company. The following data should be read in
conjunction with managements discussion and analysis of
financial condition and results of operations and all of the
financial statements and notes thereto included elsewhere in
this Form 10-K.

|                                                                     |                                    |                                                  |         |        |  |      |         |        |  |      |         |        |  |   |         |        |  |   |        |        | 
|-------------------------------------------------------------------- | ---------------------------------- | ------------------------------------------------ | ------- | ------ |  | ---- | ------- | ------ |  | ---- | ------- | ------ |  | - | ------- | ------ |  | - | ------ | ------ | 
|                                                                     |                                    |                                                 
|                                                                     |                                    | Year Ended December 31,                         
|                                                                     |                                    |                                                 
|                                                                     |                                    | 2001                                             |         | 2000   |  | 1999 |         | 1998   |  | 1997
|                                                                     |                                    |                                                  |         |        |  |      |         |        |  |     
|                                                                     |                                    |                                                 
|                                                                     |                                    | (In thousands, except per share & property data)
|Statements of Operations Data:                                       |                                    |                                                  |         |        |  |      |         |        |  |      |         |        |  |   |         |        |  |   |        |       
|Total revenues                                                       |                                    | $                                                | 100,105 |        |  | $    | 136,773 |        |  | $    | 144,886 |        |  | $ | 130,495 |        |  | $ | 88,961 |       
|                                                                     |                                    |                                                  |         |        |  |      |         |        |  |      |         |        |  |   |         |        |  |   |        |       
|Expenses:                                                            |                                    |                                                  |         |        |  |      |         |        |  |      |         |        |  |   |         |        |  |   |        |       
|                                                                     | Interest                           |                                                  |         | 33,637 |  |      |         | 57,177 |  |      |         | 54,649 |  |   |         | 48,385 |  |   |        | 36,083 | 
|                                                                     | Property operating costs           |                                                  |         | 35,207 |  |      |         | 43,500 |  |      |         | 43,008 |  |   |         | 40,500 |  |   |        | 27,720 | 
|                                                                     | Depreciation and amortization      |                                                  |         | 20,717 |  |      |         | 24,959 |  |      |         | 24,854 |  |   |         | 24,313 |  |   |        | 18,333 | 
|                                                                     | Impairment of assets held for sale |                                                  |         |       |  |      |         | 4,770  |  |      |         |       |  |   |         | 21,685 |  |   |        |       | 
|                                                                     | Reorganization Costs               |                                                  |         | 2,613  |  |      |         |       |  |      |         |       |  |   |         |       |  |   |        |       | 
|                                                                     | Non-recurring items                |                                                  |         |       |  |      |         |       |  |      |         |       |  |   |         |       |  |   |        | 9,355  | 
|                                                                     | General and administrative         |                                                  |         | 5,473  |  |      |         | 5,723  |  |      |         | 8,440  |  |   |         | 5,835  |  |   |        | 2,941  | 
|                                                                     |                                    |                                                  |         |        |  |      |         |        |  |      |         |        |  |   |         |        |  |   |        |       
|Total expenses                                                       |                                    |                                                  | 97,647  |        |  |      | 136,129 |        |  |      | 130,951 |        |  |   | 140,718 |        |  |   | 94,432 |       
|                                                                     |                                    |                                                  |         |        |  |      |         |        |  |      |         |        |  |   |         |        |  |   |        |       
|Income (loss) before other items                                     |                                    |                                                  | 2,458   |        |  |      | 644     |        |  |      | 13,935  |        |  |   | (10,223 | )      |  |   | (5,471 | )     
|Equity in income of management company                               |                                    |                                                  |        |        |  |      |        |        |  |      |        |        |  |   |        |        |  |   | 19     |       
|(Loss) gain on sale of rental Properties                             |                                    |                                                  | (2,379  | )      |  |      | 21,245  |        |  |      | 23,991  |        |  |   | 1,055   |        |  |   |       |       
|Minority interests                                                   |                                    |                                                  | (508    | )      |  |      | (602    | )      |  |      | (4,786  | )      |  |   | 1,055   |        |  |   | 1,229  |       
|Extraordinary items                                                  |                                    |                                                  | (1,768  | )      |  |      | (17,514 | )      |  |      | (6,483  | )      |  |   |        |        |  |   | (422   | )     
|                                                                     |                                    |                                                  |         |        |  |      |         |        |  |      |         |        |  |   |         |        |  |   |        |       
|Net (loss) income                                                    |                                    | $                                                | (2,197  | )      |  | $    | 3,773   |        |  | $    | 26,657  |        |  | $ | (8,113  | )      |  | $ | (4,645 | )     
|                                                                     |                                    |                                                  |         |        |  |      |         |        |  |      |         |        |  |   |         |        |  |   |        |       
|Net (loss) income per share, basic                                   |                                    | $                                                | (0.08   | )      |  | $    | 0.14    |        |  | $    | 1.04    |        |  | $ | (0.38   | )      |  | $ | (0.35  | )     
|                                                                     |                                    |                                                  |         |        |  |      |         |        |  |      |         |        |  |   |         |        |  |   |        |       
|Dividends per share                                                  |                                    | $                                                | 0.16    |        |  | $    | 0.84    |        |  | $    | 1.44    |        |  | $ | 1.44    |        |  | $ | 1.44   |       
|                                                                     |                                    |                                                  |         |        |  |      |         |        |  |      |         |        |  |   |         |        |  |   |        |       
|Weighted average shares of common stock
	outstanding                 |                                    |                                                  | 27,435  |        |  |      | 26,677  |        |  |      | 25,697  |        |  |   | 21,519  |        |  |   | 13,312 |       
|                                                                     |                                    |                                                  |         |        |  |      |         |        |  |      |         |        |  |   |         |        |  |   |        |       
|Number of operating Properties (at end of period)                    |                                    |                                                  | 35      |        |  |      | 41      |        |  |      | 56      |        |  |   | 63      |        |  |   | 46     |       
|Gross Leasable Area owned (thousands of
	sq. ft.) (at end of period) |                                    |                                                  | 6,412   |        |  |      | 7,117   |        |  |      | 9,398   |        |  |   | 10,185  |        |  |   | 7,217  |       

|                                                  |  |                    |         |      |  |      |         |      |  |      |           |  |  |   |           |  |  |   |         | 
|------------------------------------------------- |  | ------------------ | ------- | ---- |  | ---- | ------- | ---- |  | ---- | --------- |  |  | - | --------- |  |  | - | ------- | 
|                                                  |  |                   
|                                                  |  | As of December 31,
|                                                  |  |                   
|                                                  |  | 2001               |         | 2000 |  | 1999 |         | 1998 |  | 1997
|                                                  |  |                    |         |      |  |      |         |      |  |     
|                                                  |  |                   
|                                                  |  | (In thousands)    
|Balance Sheet Data:                               |  |                    |         |      |  |      |         |      |  |      |           |  |  |   |           |  |  |   |         | 
|Rental Properties before accumulated depreciation |  | $                  | 732,818 |      |  | $    | 776,667 |      |  | $    | 1,030,689 |  |  | $ | 1,074,629 |  |  | $ | 783,279 | 
|Total assets                                      |  |                    | 637,073 |      |  |      | 694,579 |      |  |      | 951,820   |  |  |   | 987,021   |  |  |   | 710,713 | 
|Total debt and other liabilities                  |  |                    | 420,195 |      |  |      | 471,480 |      |  |      | 709,122   |  |  |   | 697,419   |  |  |   | 519,441 | 
|Minority interests                                |  |                    | 11,225  |      |  |      | 16,695  |      |  |      | 15,410    |  |  |   | 49,231    |  |  |   | 41,433  | 
|Redeemable common stock                           |  |                    |        |      |  |      |        |      |  |      |          |  |  |   | 9,903     |  |  |   | 8,385   | 
|Stockholders equity                              |  |                    | 205,653 |      |  |      | 206,404 |      |  |      | 227,288   |  |  |   | 230,468   |  |  |   | 141,454 | 

23



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|                          |                      |                         |   |         |   |      |   |          |   |      |   |         |   |  |   |          |   |  |   |          |  
|------------------------- | -------------------- | ----------------------- | - | ------- | - | ---- | - | -------- | - | ---- | - | ------- | - |  | - | -------- | - |  | - | -------- | -
|                          |                      |                        
|                          |                      | Year Ended December 31,
|                          |                      |                        
|                          |                      | 2001                    |   | 2000    |   | 1999 |   | 1998     |   | 1997
|                          |                      |                         |   |         |   |      |   |          |   |     
|                          |                      |                        
|                          |                      | (In thousands)         
|Other Data:               |                      |                         |   |         |   |      |   |          |   |      |   |         |   |  |   |          |   |  |   |         
|Funds from Operations(1): |                      |                         |   |         |   |      |   |          |   |      |   |         |   |  |   |          |   |  |   |         
|                          | Basic                |                         | $ | 24,766  |   |      | $ | 30,860   |   |      | $ | 42,477  |   |  | $ | 36,301   |   |  | $ | 21,924   |  
|                          | Diluted              |                         |   | 24,766  |   |      |   | 30,860   |   |      |   | 55,943  |   |  |   | 50,169   |   |  |   | 35,793   |  
|Cash Flows From:          |                      |                         |   |         |   |      |   |          |   |      |   |         |   |  |   |          |   |  |   |         
|                          | Operating activities |                         | $ | 23,954  |   |      | $ | 16,912   |   |      | $ | 33,711  |   |  | $ | 32,528   |   |  | $ | 19,559   |  
|                          | Investing activities |                         |   | 36,974  |   |      |   | 244,225  |   |      |   | 39,793  |   |  |   | (219,430 | ) |  |   | (110,192 | )
|                          | Financing activities |                         |   | (60,276 | ) |      |   | (260,177 | ) |      |   | (74,936 | ) |  |   | 189,925  |   |  |   | 88,305   |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Company computes funds from operations
	(FFO) on both a basic and a diluted basis and
	considers Operating Partnership Units as the equivalent of
	shares for the purpose of these computations. The diluted basis
	assumes the conversion of the Companys convertible and
	exchangeable debentures into shares of common stock as well as
	other common stock equivalents. On November 6, 2000, the
	Company repaid, in full, its 7 1/4% exchangeable debentures
	and on January 16, 2001 the Company repaid, in full, its
	7 1/2% convertible subordinated debentures. For further
	discussion of FFO, see Item 7  Managements
	Discussion and Analysis of Results of Operations.




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

The following discussion should be read in
conjunction with the Selected Financial Data and the
Companys Consolidated Financial Statements and Notes
thereto appearing elsewhere in this Form 10-K.

This Annual Report on Form 10-K, including
the documents that we incorporate by reference, contains
forward-looking statements. Also, documents we subsequently file
with the SEC and incorporate by reference will contain
forward-looking statements. In particular, statements pertaining
to our capital resources, portfolio performance and our funds
from operation and anticipated market conditions, demographics
and results of operations are forward-looking statements.
Forward-looking statements involve numerous risks and
uncertainties and you should not rely on them as predictions of
future events. Forward-looking statements depend on assumptions,
data or methods which may be incorrect or imprecise and we may
not be able to realize them. We do not guarantee that the
transactions and events described will happen as described, or
that they will happen at all. You can identify forward-looking
statements by the use of forward-looking terminology such as
believes, expects, may,
will, should, would,
seeks, approximately,
intends, plans, pro forma
estimates or anticipates or the negative
of these words and phrases or similar words or phrases. You can
also identify forward-looking statements by discussions of
strategy, plans or intentions. The following factors, among
others, could cause actual results and future events to differ
materially from those set forth or contemplated in the
forward-looking statements:



| |   |                                                                                
| | - | -------------------------------------------------------------------------------
| |  | defaults on or non-renewal of leases by tenants;                               
|
| |  | increased interest rates and operations costs;                                 
|
| |  | our failure to obtain necessary outside financing;                             
|
| |  | difficulties in identifying properties to acquire
	and completing acquisitions;
|
| |  | difficulties in disposing of properties;                                       
|
| |  | our failure to successfully operate acquired
	properties and operations;       
|
| |  | our failure to successfully develop properties;                                
|
| |  | our failure to maintain our status as a REIT;                                  
|
| |  | environmental uncertainties and risks related to
	natural disasters;           

24



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##### Table of Contents





| |   |                                                                                  
| | - | ---------------------------------------------------------------------------------
| |  | financial market fluctuations; and                                               
|
| |  | changes in real estate and zoning laws and
	increases in real property tax rates.

Our success also depends upon economic trends
generally, as well as income tax laws, governmental regulation,
legislation, population changes and other matters discussed
above in the section entitled Risk Factors.: We caution
you, however, that any list of risk factors may not be
exhaustive.

Recent Developments

During 2001 and early 2002, we completed a series
of steps designed to improve our financial and operating
flexibility, allow us to reduce our leverage level, and better
enable us to continue to pursue our fundamental strategy of
maximizing stockholder value. Those steps included the repayment
of $128 million of the 7 1/2% Convertible Subordinated
Debentures (Debentures), a reduction of our 2001
dividend, the refinancing of six properties with long-term fixed
rate debt and the extension of our Credit Facility (Credit
Facility) with General Electric Capital Corporation
(GECC). See additional discussion in Liquidity
Sources and Requirements.

The Board of Directors announced on
March 20, 2002, an increase in the quarterly dividend to
$0.06 per share for the first quarter of 2002, compared to $0.04
per share paid during each of the four quarters of 2001. This
revised dividend level is designed to enable us to continue to
strengthen our balance sheet and provide the funds necessary to
reposition and reinvest in our assets while also providing an
increase in the return to our shareholders.

Results of Operations



| |                                                                                      
| | -------------------------------------------------------------------------------------
| | Comparison of the year ended
	December 31, 2001 to the year ended December 31,
	2000.

Rental revenues decreased by $25.6 million
to $69.5 million for the year ended December 31, 2001
from $95.1 million for the year ended December 31,
2000. A decrease of $25.8 million resulted from the sale of
16 community shopping centers, five single tenant
facilities and a freestanding theater in 2001 and 2000. Revenues
from the remaining held properties increased slightly in 2001
compared to 2000.

Expense reimbursements decreased
$6.4 million to $24.1 million for the year ended
December 31, 2001 from $30.5 million for the year
ended December 31, 2000. Of the decrease, $6.5 million
resulted from the sale of the properties previously discussed.
Similarly, property operating costs decreased by
$8.3 million to $35.2 million for the year ended
December 31, 2001 from $43.5 million for the year
ended December 31, 2000. Approximately $7.1 million
decrease was related to the sold properties. The remaining
decrease is primarily due to a $1.3 million charge to
uncollectible accounts receivable expense in 2000 compared to a
$0.3 million charge recorded in 2001.

Interest expense decreased by $23.6 million
to $33.6 million for the year ended December 31, 2001
from $57.2 million for the year ended December 31,
2000. The decrease was due to a combination of a decrease in
average debt outstanding and lower effective interest rates in
2001 compared to 2000. Average debt outstanding was
$410 million in 2001 compared to $625 million in 2000.
The lower average debt outstanding was due to the repayment of
$128.5 million of 7 1/2% Convertible subordinated
Debentures and proceeds from the sale of 22 assets during
2000 and the first half of 2001. The effective weighted average
interest rate, excluding the debentures, was 8.0% in 2001
compared to 9.0% in 2000. See additional discussion in Liquidity
Sources and Requirements.

Depreciation and amortization expense decreased
$4.3 million to $20.7 million for the year ended
December 31, 2001 from $25.0 million for the year
ended December 31, 2000. This is primarily due to
$4.8 million of lower expenses due to the sale of
properties, partially offset by a $.6 million increase of
depreciation on held properties.

General and administrative costs decreased
$0.2 million from $5.7 million for the year ended
December 31, 2000 to $5.5 million for the year ended
December 31, 2001. The decrease is due to the partial cost
savings related to the reorganization that occurred during the
second quarter of 2001. At the end of the second

25



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##### Table of Contents



quarter of 2001, the Company recorded a
non-recurring Reorganization expense of $2.6 million. The
expense consisted of employee severance and other related costs.
The Company anticipates greater savings in 2002 from a full year
of cost reductions as a result of the reorganization.


The Company reported a net loss of
$2.2 million for the year ended December 31, 2001
compared to net income of $3.8 million for 2000. The
decrease in net income of $6.0 million in 2001 was
primarily due to lower net operating income of
$28.5 million from the sale of properties,
$2.6 million in reorganization costs, $2.4 million
loss on the sale of assets and $1.8 million extraordinary
loss related to the sale of properties. The 2001 decrease was
partially offset by lower interest expense of $23.5 million
and lower depreciation expense of $4.2 million. The net
income in 2000 included the gain on sale of assets, net of an
extraordinary loss, of $3.7 million and a $4.8 million
charge for the impairment of assets held for sale.



| |                                                                                      
| | -------------------------------------------------------------------------------------
| | Comparison of the year ended
	December 31, 2000 to the year ended December 31,
	1999.

Total revenues decreased by $8.1 million to
$136.8 million for the year ended December 31, 2000
from $144.9 million for the year ended December 31,
1999. The decrease was primarily a result of the sale of
12 community shopping centers, three single tenant
facilities and a freestanding theater, for a total of
16 properties sold in 2000 compared to the sale of three
community shopping centers and five single tenant facilities,
for a total of 8 properties sold in 1999. The sold properties
account for approximately $11.2 million of the decrease in
revenues. This was partially offset by a $3.4 million lease
termination fee received from a tenant of one of our community
shopping centers.

Interest expense increased by $2.5 million
to $57.2 million for the year ended December 31, 2000
from $54.7 million for the year ended December 31,
1999. The increase is primarily due to approximately
$4.0 million from higher effective interest rates partially
offset by a decrease of approximately $1.5 million from
lower average debt outstanding in 2000.

Property operating costs increased
$0.5 million to $43.5 million for the year ended
December 31, 2000 from $43.0 million for the year
ended December 31, 1999. The activity for the year included
a provision for uncollectible accounts receivable of
$1.3 million and a charge of $0.7 million for the
adjustment of an outstanding receivable balance from a city
agency recorded in 2000, offset by a decrease of
$2.0 million in expenses related to the sold properties.

Depreciation and amortization expense increased
by $0.1 million to $25.0 million for the year ended
December 31, 2000 from $24.9 million for the year
ended December 31, 1999. This is primarily due to increased
amortization of leasing costs of $0.9 million and increased
depreciation from additional assets of $0.3 million,
partially offset lower expenses from the sale of properties in
2000 of $1.1 million.

General and administrative costs decreased
$2.7 million from $8.4 million for the year ended
December 31, 1999 to $5.7 million for the year ended
December 31, 2000. The decreases are primarily due to the
Companys reorganization in the 4th quarter of 1999 to
reduce its operating costs.

Income before other items for the year ended
December 31, 2000 was $0.6 million compared to income
of $13.9 million for the same period of 1999. The decrease
is due to lower income as a result of the sale of assets, higher
interest costs as previously discussed and a $4.8 million
charge for the impairment of assets held for sale. At
December 31, 2000, the Company was under agreement to sell
the Center of El Centro located in El Centro, California and
Madera Marketplace located in Madera, California for a combined
total of $19.7 million. Carrying value of these assets,
adjusted for anticipated closing and other costs, was $24.5 at
December 31, 2000.

As previously discussed, the Company sold a total
of 16 properties during the year ended 2000. As a result of the
sales, debt of $188 million was either repaid or assumed by
the buyer. Net proceeds of $127 million was used to reduce
the Companys outstanding balance on its Secured Credit
Facility (see additional discussion at Liquidity Sources and
Requirements) The Company recorded a net gain on the sale of
assets of $21.2 million. The Company also recorded an
extraordinary loss on the early extinguishment of debt of
$17.5 million related to the payment of certain prepayment
penalties and the write-off of unamortized deferred financing
costs and costs related to the defeasance of a loan with Nomura
Asset Capital Corporation.

26



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##### Table of Contents





| |                                         
| | ----------------------------------------
| | Selected Property Financial
	Information

Net Operating Income (defined as operating
revenues less property operating costs) for the Companys
Properties was as follows:

|                     |                   |                         |        |        |  |      |        |        |  |   |         |        | 
|-------------------- | ----------------- | ----------------------- | ------ | ------ |  | ---- | ------ | ------ |  | - | ------- | ------ | 
|                     |                   |                        
|                     |                   | Year Ended December 31,
|                     |                   |                        
|                     |                   | 2001                    |        | 2000   |  | 1999
|                     |                   |                         |        |        |  |     
|Rental Properties:   |                   |                         |        |        |  |      |        |        |  |   |         |       
|                     | Regional Malls    |                         | $      | 16,610 |  |      | $      | 16,226 |  |   | $       | 18,018 | 
|                     | Community Centers |                         |        | 46,251 |  |      |        | 72,783 |  |   |         | 77,920 | 
|                     | Single Tenants    |                         |        | 1,253  |  |      |        | 2,952  |  |   |         | 4,895  | 
|Other Income         |                   |                         | 784    |        |  |      | 1,312  |        |  |   | 1,045   |       
|                     |                   |                         |        |        |  |      |        |        |  |   |         |       
|Net Operating Income |                   | $                       | 64,898 |        |  | $    | 93,273 |        |  | $ | 101,878 |       
|                     |                   |                         |        |        |  |      |        |        |  |   |         |       

The following summarizes the percentage of leased
GLA (excluding non-owned GLA) as of:

|                    |                   |              |      |       |   |      |      |       |   |  |      |       |  
|------------------- | ----------------- | ------------ | ---- | ----- | - | ---- | ---- | ----- | - |  | ---- | ----- | -
|                    |                   |             
|                    |                   | December 31,
|                    |                   |             
|                    |                   | 2001         |      | 2000  |   | 1999
|                    |                   |              |      |       |   |     
|Rental Properties:  |                   |              |      |       |   |      |      |       |   |  |      |      
|                    | Regional Malls    |              |      | 94.4  | % |      |      | 92.1  | % |  |      | 90.9  | %
|                    | Community Centers |              |      | 91.8  |   |      |      | 93.1  |   |  |      | 95.0  |  
|                    | Single Tenants    |              |      | 100.0 |   |      |      | 100.0 |   |  |      | 100.0 |  
|Aggregate Portfolio |                   |              | 92.6 |       |   |      | 93.3 |       |   |  | 94.9 |      

During 2001, the Company signed leases for
approximately 163,693 square feet and renewed approximately
594,809 square feet of community centers leases. Such signed
leases resulted in an increase in the overall rent per square
foot of the Companys portfolio to $12.02 per square foot
at December 31, 2001 from $11.33 per square foot at
December 31, 2000.

Liquidity Sources and Requirements

Through a series of asset sales and debt
financing transactions, as well as a modification of the
Companys Credit Facility, the Company was able to
successfully repay its Debentures that matured on
January 15, 2001. Subsequent to the repayment of the
Debentures in January 2001, the Company remained focused on
the strengthening of its financial stability and flexibility. To
aid in strengthening the Companys financial flexibility
and stability, on March 26, 2001, the Company announced a
revised dividend strategy designed to enable the Company to
maximize its retention of capital, reduce its leverage level,
and provide financial flexibility, while maintaining its status
as a real estate investment trust. Accordingly, the Company
decreased its annual dividend for 2001 to $0.16 per share.

With the Debentures repaid, the Companys
primary focus in 2002 is to continue to enhance our balance
sheet while executing our business plan. Our business plan
focuses on leasing our existing centers, stabilizing income,
enhancing value, and redevelopment. Our redevelopment plans
enables us to meet the changing needs of retailers in our
markets while creating value for our shareholders. On
March 18, 2002, the Company increased its first quarter
dividend to $0.06 per share from the $0.04 per share paid for
each of the four quarters of 2001.

On March 20, 2002, the Company extended its
Credit Facility with GECC that was to expire on April 1,
2002. Under the new terms, the Credit Facility will expire on
April 1, 2004 with the option of the Company to extend for
one additional year. The new agreement reduces the maximum
commitment from $170 million to $150 million. The
Company currently has availability of $13 million under the
Credit Facility.

In December 2001, the Company closed on six
separate mortgages with total proceeds of $68.7 million.
The mortgages have a 10-year term with 30-year principal
amortization. The weighted-average fixed interest rate on the
six mortgages is 6.94%. The mortgages are not
cross-collateralized or cross-defaulted. Three of the

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mortgages, with combined loan proceeds of
$25.1 million, secured by Ross Plaza in Clackmamas, Oregon,
Silverdale Shopping Center in Silverdale, Washington and
Vancouver Park Place in Vancouver, Washington, closed on
December 18, 2001. These assets were previously pledged as
collateral for the Companys Credit Facility. The remaining
three mortgages, with combined proceeds of $43.6 million,
are secured by Mountain Square in Upland, California, Fire
Mountain Shopping Center in Oceanside, California and Randolph
Plaza in Tucson, Arizona, closed on December 19, 2001.
Theses properties were previously collateral for variable rate,
cross-collateralized, mortgages with a combined balance of
$33.1 million that were to mature on June 1, 2002. All
proceeds, after repayment of existing loans, were used to reduce
the outstanding balance on the Companys Credit Facility.


On July 6, 2001, the Company refinanced an
existing mortgage on North Mountain Village, located in Phoenix,
Arizona. The $7.1 million mortgage bears interest at 7.68%
and matures in 2011.

During the second quarter of 2001, the Company
sold one community shopping center and one single tenant
facility. The assets sold were K-Mart Rocklin, an 86,000 square
foot single tenant facility located in Rocklin, California and
Marshalls Plaza, a 79,000 square foot shopping center
located in Modesto, California. After repayment of debt of
$1.7 million, net proceeds of $6.7 million were used
to reduce the outstanding balance on the Companys Credit
Facility.

During the first quarter of 2001, the Company
sold three community shopping centers and one single tenant
facility for a combined sales price of $38.4 million. The
assets sold included Westgate North Shopping Center, a 104,000
square foot shopping center located in Tacoma, Washington,
Center of El Centro, a 179,000 square foot shopping center
located in El Centro, California, Madera Marketplace a 169,000
square foot shopping center located in Madera, California, and
K-Mart Madera, a 86,000 square foot single tenant facility,
located in Madera, California. After repayment of debt of
$7.2 million, net proceeds of $26.6 million were used
to reduce the outstanding balance of the Companys Credit
Facility.

During 2002, the Company has debt maturities of
$59.1 million. Of this balance, three mortgages totaling
$50.2 million each have three one-year extensions available
to the Company. The remaining balance of $8.9 million
represents one non-recourse mortgage secured by our Date Palm
Center located in Cathedral City, California. We are currently
negotiating with the lender to modify the terms of this
non-recourse agreement and anticipate that we will be able to
successfully execute an extension and amendment to this loan
before it matures.

The Company anticipates that its cash from
operations combined with the availability under the Credit
Facility will be sufficient to cover its capital and operating
cash requirements in the next twelve months. Certain elective
redevelopment projects will only be commenced if the Company is
successfully able to obtain separate financing for such
expenditures.



| |                      
| | ---------------------
| | Funds from Operations

The Company considers Funds From Operations
(FFO) to be an alternative measure of the
performance of an equity REIT since such measure does not
recognize depreciation and amortization expenses as operating
expenses. FFO is defined, as outlined in the October 1999 White
Paper, by the National Association of Real Estate Investment
Trusts (NAREIT) as net income plus depreciation and
amortization of real estate, less gains or losses on sales of
properties. Additionally, the definition also permits FFO to be
adjusted for significant non-recurring items. Funds from
operations do not represent cash flows from operations as
defined by generally accepted accounting principles and should
not be considered as an alternative to net income or cash flows
from operations and should not be considered as an alternative
to those indicators in evaluating the Companys operating
performance or liquidity. Further, the methodology for computing
FFO utilized by the Company may differ from that utilized by
other equity REITs and, accordingly may not be comparable to
such other REITs.

The Company computes FFO on both a basic and a
diluted basis. The diluted basis assumes the conversion of the
convertible and exchangeable debentures into shares of common
stock. The following table

28



---



##### Table of Contents



summarizes the Companys computation of FFO
and provides certain additional disclosures (dollars in
thousands):


|                                                             |                                    |                         |        |        |  |      |         |        |  |   |         |        | 
|------------------------------------------------------------ | ---------------------------------- | ----------------------- | ------ | ------ |  | ---- | ------- | ------ |  | - | ------- | ------ | 
|                                                             |                                    |                        
|                                                             |                                    | Year Ended December 31,
|                                                             |                                    |                        
|                                                             |                                    | 2001                    |        | 2000   |  | 1999
|                                                             |                                    |                         |        |        |  |     
|Net (Loss) Income                                            |                                    | $                       | (2,197 | )      |  | $    | 3,773   |        |  | $ | 26,657  |       
|Adjustments to reconcile net loss to funds from
	operations: |                                    |                         |        |        |  |      |         |        |  |   |         |       
|Depreciation and Amortization:                               |                                    |                         |        |        |  |      |         |        |  |   |         |       
|                                                             | Buildings and improvements         |                         |        | 12,692 |  |      |         | 16,741 |  |   |         | 16,793 | 
|                                                             | Tenant improvements and allowances |                         |        | 4,568  |  |      |         | 5,173  |  |   |         | 5,470  | 
|                                                             | Leasing costs                      |                         |        | 2,617  |  |      |         | 2,540  |  |   |         | 2,392  | 
|Loss (Gain) on Sale of Assets                                |                                    |                         | 2,379  |        |  |      | (21,245 | )      |  |   | (23,991 | )     
|Write-down of Asset Held for Sale                            |                                    |                         |       |        |  |      | 4,770   |        |  |   |        |       
|Reorganization Costs                                         |                                    |                         | 2,613  |        |  |      |        |        |  |   | 1,148   |       
|Minority Interests                                           |                                    |                         | (198   | )      |  |      | (65     | )      |  |   | 4,163   |       
|Extraordinary Loss on Early Extinguishment of Debt           |                                    |                         | 1,768  |        |  |      | 17,514  |        |  |   | 6,483   |       
|Other                                                        |                                    |                         | 524    |        |  |      | 1,659   |        |  |   | 3,362   |       
|                                                             |                                    |                         |        |        |  |      |         |        |  |   |         |       
|Funds from Operations, Basic and Diluted                     |                                    | $                       | 24,766 |        |  | $    | 30,860  |        |  | $ | 42,477  |       
|                                                             |                                    |                         |        |        |  |      |         |        |  |   |         |       

Funds from operations decreased to
$24.8 million for the year ended December 31, 2001, as
compared to $30.9 million for the same period in 2000. The
decrease in funds from operations is principally a function of
asset dispositions that occurred in 2000 and early 2001. During
2001, the Company incurred reorganization costs of
$2.6 million resulting from a restructuring of the
Companys organization. During 2000, the Company recorded
an impairment loss on assets held for sale of $4.8 million.
In addition, the Company recorded an extraordinary loss on the
early extinguishment of debt of $1.8 million, $17.5 and
$6.5 million in 2001, 2000 and 1999, respectively. Such
items were not included in the computation of FFO as the Company
considers these to be significant non-recurring events that, if
deducted, would materially distort the comparative measurement
of Company performance.



| |           
| | ----------
| | Cash Flows

Net cash provided by operations for the year
ended December 31, 2001 was $24.0 million compared to
$16.9 million for the prior year, an increase of
$7.1 million. The principal reason for the increase in net
cash from operations are lower operating cash requirements
partially offset by lower operating revenues due to properties
sold during 2001 and 2000, as discussed in Results of Operations
above.

Net cash provided by investing activities
decreased by $207.2 million to $37.0 million for the
year ended 2001 from $244.2 million for the year ended
2000. The decrease is due to fewer property sales in 2001
compared to 2000. Property sales totaled 6 in the year ended
2001 compared to 16 for 2000.

Net cash used by financing activities decreased
by $199.9 million to $60.3 million from
$260.2 million primarily due to lower repayments on the
Companys Credit Facility for the year ended 2001 compared
to 2000. The decrease is primarily due to fewer property sales
in 2001 compared to 2000, previously discussed. Activity for the
year ended 2001 includes the repayment of the Companys
7 1/2% Convertible Subordinated Debentures of
$128.5 million with proceeds from the Companys Credit
Facility. In addition, the dividend reduction in 2002 enabled
the Company to retain approximately $17.6 million in 2001.

Net cash provided by operations for the year
ended December 31, 2000 was $16.9 million compared to
$33.7 million for the prior year. The principal reasons for
the decrease in net cash from operations are discussed in
Results of Operations above.

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##### Table of Contents



Net cash provided by investing activities was
$244.2 million for the year ended December 31, 2000,
compared to $39.8 million for the prior year. The increase
is primarily the result of proceeds from the sale of 16
properties in 2000.

Net cash used by financing activities was
$260.2 million for the year ended December 31, 2000,
compared to $74.9 million from the prior year. The increase
is due to repayments on the Companys Credit Facility,
payments on mortgage financing and retirement of the
$30 million of 7 1/4% Exchangeable Subordinated
Debentures.



| |          
| | ---------
| | Inflation

The Companys long-term leases contain
provisions designed to mitigate the adverse impact of inflation
on its results from operations. Such provisions include clauses
enabling the Company to receive percentage rents based upon
tenants gross sales, which generally increase as prices
rise, and/or, in certain cases, escalation clauses, which
generally increase rental rates during the terms of the leases.
Such escalation clauses are often related to increases in the
CPI or similar inflation indices. In addition, many of the
Companys leases are for terms of less than ten years,
which permits the Company to seek to increase rents upon
re-rental at market rates if rents are below then-existing
market rates. Many of the Companys leases require the
tenants to pay a pro rata share of operating expenses, including
common area maintenance, real estate taxes, insurance and
utilities, thereby reducing the Companys exposure to
increases in costs and operating expenses resulting from
inflation.

Critical Accounting Policies

The Securities and Exchange Commission defines
critical accounting policies as those that are, in
managements view, most important to the portrayal of the
Companys financial condition and results of operations and
the most demanding in their call on judgement. The
Companys significant accounting policies that require a
higher degree of judgement relate to:



| |   |                                                
| | - | -----------------------------------------------
| |  | Property rental income and expense recognition;
|
| |  | Basis on presentation;                         
|
| |  | Asset valuation criteria; and                  
|
| |  | Legal and environmental obligations.           

See additional discussion of these accounting
policies in the Notes to the Consolidated Financial Statements.



| |                                 
| | --------------------------------
| | Adoption of Accounting Standards

New Accounting PronouncementsStatements of Financial Accounting
Standards (SFAS) No. 133, as amended, was effective
for the Company as of January 1, 2001. SFAS No. 133
established accounting and reporting standards requiring that
all derivative instruments, including certain derivative
instruments embedded in other contracts, be recorded in the
balance sheet as either assets or liabilities measured at fair
value. SFAS No. 133 requires that changes in the derivative
instruments fair value be recognized currently in
earnings, unless specific hedge accounting criteria are met. The
Companys derivative positions held at December 31,
2001 are considered immaterial. The adoption of this standard
does not have a material impact on the Companys results of
consolidated operations or its financial position.

In July 2001, the Financial Accounting Standards
Board issued SFAS No. 141, Business
Combinations and SFAS No. 142, Good will and
Other Intangible Assets. SFAS No. 141 prohibits the
use of the pooling of interest method after
June 30, 2001. SFAS No. 142 requires the cessation of
the amortization of goodwill subsequent to December 31,
2001. The new standards are not expected to have a significant
impact on our financial statements.

30



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##### Table of Contents



In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment of Long-Lived
Assets. This Statement addressed financial accounting and
reporting for the impairment or disposal of long-lived assets
and supercedes FASB Statement No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed of. Additionally, SFAS 144 expands the
scope of discontinued operations to include all components of an
entity with operations that (1) can be distinguished from
the rest of the entity and (2) will be eliminated from the
ongoing operations of the entity in a disposal transaction. The
provisions of this Statement are effective for financial
statements issued for fiscal years beginning after
December 15, 2001. This new standard is not expected to
have a significant impact on our financial statements.




Item 7A.     Quantitative
and Qualitative Disclosures About Market Risk

The Company is exposed to market risk primarily
due to fluctuations in interest rates. Specifically, the risk
resulting from increasing LIBOR-based interest rates as interest
on the Companys Credit Facility of $114.5 million as
well as mortgage notes of $75.2 million are tied to various
LIBOR interest rates. The Credit Facility matures March 31,
2002. The Company is also subject to market risk resulting from
fluctuations in the general level of U.S. interest rates as
$176.6 million of the Companys debt is based on a
weighted average fixed rate of 8.04%. As a result, the Company
will be obligated to pay contractually agreed upon rates of
interest on its fixed rate debt, unless management refinances
its existing fixed rate debt and potentially incurs substantial
prepayment penalties. The $36 million of tax-exempt
certificates of participation are tied to a general index of
AAA-rated tax-free municipal bonds.

The following table provides information about
the Companys interest rate sensitive financial
instruments, including, amounts due at maturity, principal
amortization, weighted average interest rates and fair market
values as of December 31, 2001 (in thousands):

|                        |                                |               |       |         |        |      |       |         |        |      |  |            |  |       |  |        |  |  |   |         |  |   |        |         |  |   |        |         |        |   |        |         |  | 
|----------------------- | ------------------------------ | ------------- | ----- | ------- | ------ | ---- | ----- | ------- | ------ | ---- |  | ---------- |  | ----- |  | ------ |  |  | - | ------- |  | - | ------ | ------- |  | - | ------ | ------- | ------ | - | ------ | ------- |  | 
|                        |                                |               |       |         |        |      |       |         |        |      |  |            |  |       |  | Fair  
|                        |                                |               |       |         |        |      |       |         |        |      |  |            |  |       |  | Market
|As of December 31, 2001 |                                | 2002          |       | 2003    |        | 2004 |       | 2005    |        | 2006 |  | Thereafter |  | Total |  | Value 
|                        |                                |               |       |         |        |      |       |         |        |      |  |            |  |       |  |       
|Interest Rate Sensitive |                                |               |       |         |        |      |       |         |        |      |  |            |  |       |  |        |  |  |   |         |  |   |        |         |  |   |        |         |        |   |        |        
|                        | Liabilities:                   |               |       |         |        |      |       |         |        |      |  |            |  |       |  |        |  |  |   |         |  |   |        |         |  |   |        |         |        |   |        |         | 
|                        | Credit Facility                |               | $     | 114,548 |        |      |       |         |        |      |  |            |  |       |  |        |  |  |   |         |  |   |        |         |  |   | $      | 114,548 |        |   | $      | 114,548 | 
|                        |                                | Interest Rate |       |         | LIBOR+ |      |       |         |        |      |  |            |  |       |  |        |  |  |   |         |  |   |        |         |  |   |        |         | LIBOR+ |   |        |         |  | 
|                        |                                |               | 2.50% |         |        |      |       |         |        |      |  |            |  |       |  |        |  |  |   |         |  |   |        |         |  |   | 2.50%  |         |        |   |        |        
|                        | Variable Rate Debt             |               | $     | 50,185  |        |      | $     | 25,000  |        |      |  |            |  |       |  |        |  |  |   |         |  |   |        |         |  |   | $      | 75,185  |        |   | $      | 75,185  | 
|                        |                                | Interest Rate |       |         | LIBOR+ |      |       |         | LIBOR+ |      |  |            |  |       |  |        |  |  |   |         |  |   |        |         |  |   |        |         | LIBOR+ |   |        |         |  | 
|                        |                                |               | 2.30% |         |        |      | 2.50% |         |        |      |  |            |  |       |  |        |  |  |   |         |  |   |        |         |  |   | 3.36%  |         |        |   |        |        
|                        | Fixed Rate Debt                |               | $     | 8,933   |        |      | $     | 14,865  |        |      |  |            |  |       |  |        |  |  | $ | 13,149  |  |   | $      | 139,697 |  |   | $      | 176,644 |        |   | $      | 203,288 | 
|                        | Weighted Average Interest Rate |               |       | 10.45%  |        |      |       | 10.375% |        |      |  |            |  |       |  |        |  |  |   | 10.635% |  |   |        | 7.393%  |  |   |        | 8.04%   |        |   |        |         | 
|Tax Exempt Certificates |                                |               |       |         |        |      |       |         |        |      |  |            |  |       |  |        |  |  |   |         |  | $ | 36,000 |         |  | $ | 36,000 |         |        | $ | 36,000 |        
|                        | Weighted Average Interest Rate |               |       |         |        |      |       |         |        |      |  |            |  |       |  |        |  |  |   |         |  |   |        | 4.173%  |  |   |        | 4.173%  |        |   |        |         | 

|                        |                                |               |   |       |  |      |       |        |        |      |       |            |        |       |  |        |  |  |  |  |  |   |        |        |  |   |        |         |        |   |        |         |  | 
|----------------------- | ------------------------------ | ------------- | - | ----- |  | ---- | ----- | ------ | ------ | ---- | ----- | ---------- | ------ | ----- |  | ------ |  |  |  |  |  | - | ------ | ------ |  | - | ------ | ------- | ------ | - | ------ | ------- |  | 
|                        |                                |               |   |       |  |      |       |        |        |      |       |            |        |       |  | Fair  
|                        |                                |               |   |       |  |      |       |        |        |      |       |            |        |       |  | Market
|As of December 31, 2000 |                                | 2001          |   | 2002  |  | 2003 |       | 2004   |        | 2005 |       | Thereafter |        | Total |  | Value 
|                        |                                |               |   |       |  |      |       |        |        |      |       |            |        |       |  |       
|Interest Rate Sensitive |                                |               |   |       |  |      |       |        |        |      |       |            |        |       |  |        |  |  |  |  |  |   |        |        |  |   |        |         |        |   |        |        
|                        | Liabilities:                   |               |   |       |  |      |       |        |        |      |       |            |        |       |  |        |  |  |  |  |  |   |        |        |  |   |        |         |        |   |        |         | 
|                        | Credit Facility                |               |   |       |  |      | $     | 53,344 |        |      |       |            |        |       |  |        |  |  |  |  |  |   |        |        |  |   | $      | 53,344  |        |   | $      | 53,344  | 
|                        | Average Interest Rate          |               |   |       |  |      |       | LIBOR+ |        |      |       |            |        |       |  |        |  |  |  |  |  |   |        |        |  |   |        | LIBOR+  |        |   |        |         | 
|                        |                                |               |   |       |  |      | 2.75% |        |        |      |       |            |        |       |  |        |  |  |  |  |  |   |        |        |  |   | 2.75%  |         |        |   |        |        
|                        | Variable Rate debt             |               |   |       |  |      | $     | 33,456 |        |      | $     | 75,185     |        |       |  |        |  |  |  |  |  |   |        |        |  |   | $      | 108,641 |        |   | $      | 108,641 | 
|                        |                                | Interest Rate |   |       |  |      |       |        | LIBOR+ |      |       |            | LIBOR+ |       |  |        |  |  |  |  |  |   |        |        |  |   |        |         | LIBOR+ |   |        |         |  | 
|                        |                                |               |   |       |  |      | 2.50% |        |        |      | 2.37% |            |        |       |  |        |  |  |  |  |  |   |        |        |  |   | 2.40%  |         |        |   |        |        
|                        | Fixed Rate Debt                |               | $ | 8,125 |  |      | $     | 9,102  |        |      | $     | 15,232     |        |       |  |        |  |  |  |  |  |   | $      | 87,608 |  |   | $      | 120,067 |        |   | $      | 124,063 | 
|                        | Weighted Average Interest Rate |               |   | 8.25% |  |      |       | 10.45% |        |      |       | 10.375%    |        |       |  |        |  |  |  |  |  |   |        | 8.48%  |  |   |        | 8.83%   |        |   |        |         | 
|Tax Exempt Certificates |                                |               |   |       |  |      |       |        |        |      |       |            |        |       |  |        |  |  |  |  |  | $ | 36,000 |        |  | $ | 36,000 |         |        | $ | 36,000 |        
|                        | Weighted Average Interest Rate |               |   |       |  |      |       |        |        |      |       |            |        |       |  |        |  |  |  |  |  |   |        | 5.110% |  |   |        | 5.110%  |        |   |        |         | 

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Item
8.     Financial Statements and
Supplementary Data

INDEPENDENT AUDITORS REPORT

To the Board of Directors and

Stockholders of Center Trust, Inc.:


We have audited the accompanying consolidated
balance sheets of Center Trust, Inc. and subsidiaries (the
Company) as of December 31, 2001 and 2000, and
the related consolidated statements of operations,
stockholders equity, and cash flows for each of the three
years in the period ended December 31, 2001. Our audits
also included the financial statement schedules listed in the
Index at Item 14.A.2. These financial statements and
financial statement schedules are the responsibility of the
Companys management. Our responsibility is to express an
opinion on the financial statements and financial statement
schedules based on our audits.

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

In our opinion, such consolidated financial
statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2001
and 2000, and the results of its operations and its cash flows
for each of the three years in the period ended
December 31, 2001 in conformity with accounting principles
generally accepted in the United States of America. Also, in our
opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as
a whole, present fairly in all material respects the information
set forth therein.

DELOITTE & TOUCHE LLP

Los Angeles, California


March 26, 2002


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##### Table of Contents



CENTER TRUST






CONSOLIDATED BALANCE SHEETS

December 31, 2001 and 2000


|                                        |                                                                                                                                                                     |                            |         |          |         |   |         |          |         | 
|--------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | -------- | ------- | - | ------- | -------- | ------- | 
|                                        |                                                                                                                                                                     | 2001                       |         | 2000    
|                                        |                                                                                                                                                                     |                            |         |         
|                                        |                                                                                                                                                                     |                           
|                                        |                                                                                                                                                                     | (In thousands,            
|                                        |                                                                                                                                                                     | except share data)        
|ASSETS                                 
|Rental properties (Notes 2, 3, and 4)   |                                                                                                                                                                     | $                          | 732,818 |          |         | $ | 776,667 |         
|                                        | Accumulated depreciation and amortization                                                                                                                           |                            |         | (149,185 | )       |   |         | (136,828 | )      
|                                        |                                                                                                                                                                     |                            |         |          |         |   |         |         
|Rental properties, net                  |                                                                                                                                                                     |                            | 583,633 |          |         |   | 639,839 |         
|Cash and cash equivalents (Note 2)      |                                                                                                                                                                     |                            | 6,816   |          |         |   | 6,164   |         
|Tenant receivables, net (Note 2)        |                                                                                                                                                                     |                            | 7,668   |          |         |   | 11,920  |         
|Other receivables (Note 2)              |                                                                                                                                                                     |                            | 5,161   |          |         |   | 5,603   |         
|Restricted cash (Note 4)                |                                                                                                                                                                     |                            | 13,282  |          |         |   | 9,531   |         
|Deferred charges, net (Note 2)          |                                                                                                                                                                     |                            | 16,636  |          |         |   | 18,030  |         
|Other assets                            |                                                                                                                                                                     |                            | 3,877   |          |         |   | 3,492   |         
|                                        |                                                                                                                                                                     |                            |         |          |         |   |         |         
|                                        |                                                                                                                                                                     | TOTAL                      |         | $        | 637,073 |   |         | $        | 694,579 | 
|                                        |                                                                                                                                                                     |                            |         |          |         |   |         |         
|LIABILITIES AND STOCKHOLDERS
	EQUITY  
|LIABILITIES:                            |                                                                                                                                                                     |                            |         |          |         |   |         |         
|                                        | Secured Debt (Notes 4 and 9)                                                                                                                                        |                            | $       | 402,377  |         |   | $       | 318,052  |        
|                                        | 7 1/2% Convertible subordinated debentures
	(Note 5)                                                                                                                |                            |         |         |         |   |         | 128,548  |        
|                                        | Accrued dividends and distributions (Note 6)                                                                                                                        |                            |         | 1,160    |         |   |         | 6,035    |        
|                                        | Accrued interest                                                                                                                                                    |                            |         | 2,057    |         |   |         | 5,827    |        
|                                        | Accounts payable and other accrued expenses                                                                                                                         |                            |         | 11,309   |         |   |         | 10,161   |        
|                                        | Accrued construction costs                                                                                                                                          |                            |         | 1,059    |         |   |         | 1,060    |        
|                                        | Tenant security and other deposits                                                                                                                                  |                            |         | 2,233    |         |   |         | 1,797    |        
|                                        |                                                                                                                                                                     |                            |         |          |         |   |         |         
|                                        |                                                                                                                                                                     | Total liabilities          |         |          | 420,195 |   |         |          | 471,480 | 
|                                        |                                                                                                                                                                     |                            |         |          |         |   |         |         
|MINORITY INTERESTS (Notes 1 and 2):     |                                                                                                                                                                     |                            |         |          |         |   |         |         
|                                        | Operating Partnership (1,338,644 and 2,015,692
	units issued as of December 31, 2001 and 2000, respectively)                                                        |                            |         | 9,696    |         |   |         | 15,075   |        
|                                        | Other minority interests                                                                                                                                            |                            |         | 1,529    |         |   |         | 1,620    |        
|                                        |                                                                                                                                                                     |                            |         |          |         |   |         |         
|                                        |                                                                                                                                                                     | Total minority interests   |         |          | 11,225  |   |         |          | 16,695  | 
|                                        |                                                                                                                                                                     |                            |         |          |         |   |         |         
|COMMITMENTS AND CONTINGENCIES (Note 10) |                                                                                                                                                                     |                            |         |          |         |   |         |         
|STOCKHOLDERS EQUITY (Notes 6 and 7):   |                                                                                                                                                                     |                            |         |          |         |   |         |         
|                                        | Common stock ($.01 par value, 100,000,000 shares
	authorized; 27,656,405 and 26,721,226 shares issued and
	outstanding at December 31, 2001 and 2000, respectively) |                            |         | 276      |         |   |         | 266      |        
|                                        | Additional paid-in capital                                                                                                                                          |                            |         | 365,474  |         |   |         | 359,419  |        
|                                        | Accumulated distributions and deficit                                                                                                                               |                            |         | (160,097 | )       |   |         | (153,281 | )      
|                                        |                                                                                                                                                                     |                            |         |          |         |   |         |         
|                                        |                                                                                                                                                                     | Total stockholders equity |         |          | 205,653 |   |         |          | 206,404 | 
|                                        |                                                                                                                                                                     |                            |         |          |         |   |         |         
|                                        |                                                                                                                                                                     | TOTAL                      |         | $        | 637,073 |   |         | $        | 694,579 | 
|                                        |                                                                                                                                                                     |                            |         |          |         |   |         |         

See Notes to Consolidated Financial Statements.

33



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##### Table of Contents



CENTER TRUST






CONSOLIDATED STATEMENTS OF
OPERATIONS

Three Years Ended December 31,
2001


|                                                             |                                                              |                             |                |        |        |         |         |        |        |         |        |         |        |         | 
|------------------------------------------------------------ | ------------------------------------------------------------ | --------------------------- | -------------- | ------ | ------ | ------- | ------- | ------ | ------ | ------- | ------ | ------- | ------ | ------- | 
|                                                             |                                                              | 2001                        |                | 2000   |        | 1999   
|                                                             |                                                              |                             |                |        |        |        
|                                                             |                                                              |                            
|                                                             |                                                              | (In thousands,             
|                                                             |                                                              | except per share amounts)  
|REVENUES (Note 2):                                           |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|                                                             | Rental revenues                                              |                             | $              | 69,456 |        |         | $       | 95,082 |        |         | $      | 105,410 |       
|                                                             | Expense Reimbursements                                       |                             |                | 24,126 |        |         |         | 30,527 |        |         |        | 32,387  |       
|                                                             | Percentage rents                                             |                             |                | 1,565  |        |         |         | 1,844  |        |         |        | 2,103   |       
|                                                             | Other income (Note 2)                                        |                             |                | 4,958  |        |         |         | 9,320  |        |         |        | 4,986   |       
|                                                             |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|                                                             |                                                              |                             | Total revenues |        |        | 100,105 |         |        |        | 136,773 |        |         |        | 144,886 | 
|                                                             |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|EXPENSES:                                                    |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|                                                             | Interest (Notes 2, 4 and 5)                                  |                             |                | 33,637 |        |         |         | 57,177 |        |         |        | 54,649  |       
|                                                             | Property operating costs:                                    |                             |                |        |        |         |         |        |        |         |        |         |       
|                                                             |                                                              | Common area                 |                |        | 18,375 |         |         |        | 20,960 |         |        |         | 21,217 |        
|                                                             |                                                              | Property taxes              |                |        | 9,600  |         |         |        | 13,119 |         |        |         | 14,505 |        
|                                                             |                                                              | Leasehold rentals (Note 10) |                |        | 1,090  |         |         |        | 1,295  |         |        |         | 1,681  |        
|                                                             |                                                              | Marketing                   |                |        | 1,262  |         |         |        | 1,454  |         |        |         | 1,188  |        
|                                                             |                                                              | Other operating             |                |        | 4,880  |         |         |        | 6,672  |         |        |         | 4,417  |        
|                                                             | Depreciation and amortization (Note 2)                       |                             |                | 20,717 |        |         |         | 24,959 |        |         |        | 24,854  |       
|                                                             | Impairment of assets held for sale (Note 3)                  |                             |                |       |        |         |         | 4,770  |        |         |        |        |       
|                                                             | Reorganization Costs (Note 1)                                |                             |                | 2,613  |        |         |         |       |        |         |        |        |       
|                                                             | General and administrative                                   |                             |                | 5,473  |        |         |         | 5,723  |        |         |        | 8,440   |       
|                                                             |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|                                                             |                                                              |                             | Total expenses |        |        | 97,647  |         |        |        | 136,129 |        |         |        | 130,951 | 
|                                                             |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|INCOME BEFORE OTHER ITEMS                                    |                                                              |                             | 2,458          |        |        |         | 644     |        |        |         | 13,935 |        
|NET (LOSS) GAIN ON SALE OF RENTAL PROPERTIES
	(Note 3)       |                                                              |                             | (2,379         | )      |        |         | 21,245  |        |        |         | 23,991 |        
|MINORITY INTERESTS (Note 2):                                 |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|                                                             | Operating Partnership                                        |                             |                | (177   | )      |         |         | (301   | )      |         |        | (4,497  | )     
|                                                             | Other Minority Interests                                     |                             |                | (331   | )      |         |         | (301   | )      |         |        | (289    | )     
|                                                             |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|(LOSS) INCOME BEFORE EXTRAORDINARY ITEM                      |                                                              |                             | (429           | )      |        |         | 21,287  |        |        |         | 33,140 |        
|EXTRAORDINARY LOSS ON EARLY EXTINGUISHMENT OF
	DEBT (Note 4) |                                                              |                             | (1,768         | )      |        |         | (17,514 | )      |        |         | (6,483 | )      
|                                                             |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|NET (LOSS) INCOME                                            |                                                              | $                           | (2,197         | )      |        | $       | 3,773   |        |        | $       | 26,657 |        
|                                                             |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|BASIC AND DILUTED (LOSS) INCOME PER SHARE
	(Note 2):         |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|                                                             | LOSS BEFORE EXTRAORDINARY ITEM                               |                             | $              | (0.02  | )      |         | $       | 0.80   |        |         | $      | 1.29    |       
|                                                             | EXTRAORDINARY LOSS ON EARLY EXTINGUISHMENT OF
	DEBT (Note 4) |                             |                | (0.06  | )      |         |         | (0.66  | )      |         |        | (0.25   | )     
|                                                             |                                                              |                             |                |        |        |         |         |        |        |         |        |        
|                                                             | NET (LOSS) INCOME                                            |                             | $              | (0.08  | )      |         | $       | 0.14   |        |         | $      | 1.04    |       
|                                                             |                                                              |                             |                |        |        |         |         |        |        |         |        |        

See Notes to Consolidated Financial Statements.

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CENTER TRUST






CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITY

Three Years Ended December 31,
2001


|                                                                                                                         |  |                                   |            |            |  |             |     |               |  |               |         |   |  |   |          |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------- | ---------- | ---------- |  | ----------- | --- | ------------- |  | ------------- | ------- | - |  | - | -------- | - |  | - | ------- | -
|                                                                                                                         |  |                                   |            |            |  |             |     |              
|                                                                                                                         |  | Common Stock                      |            |            |  |             |     |              
|                                                                                                                         |  |                                   |            | Additional |  | Accumulated |     | Total        
|                                                                                                                         |  | Number of                         |            |            |  | Paid-In     |     | Distributions |  | Stockholders
|                                                                                                                         |  | Shares                            |            | Amount     |  | Capital     |     | and Deficit   |  | Equity       
|                                                                                                                         |  |                                   |            |            |  |             |     |               |  |              
|                                                                                                                         |  |                                  
|                                                                                                                         |  | (In thousands, except share data)
|January 1, 1999                                                                                                          |  |                                   | 24,756,693 |            |  | $           | 248 |               |  | $             | 354,281 |   |  | $ | (124,061 | ) |  | $ | 230,468 |  
|Issuance of Common Stock                                                                                                 |  |                                   | 2,260,232  |            |  |             | 22  |               |  |               | 33,881  |   |  |   |         |   |  |   | 33,903  |  
|Conversion of OP Units and Convertible Debentures
	into Common Stock and Adjustment to Minority Interest in OP
	(Note 2) |  |                                   | 62,597     |            |  |             | 1   |               |  |               | (19,717 | ) |  |   |         |   |  |   | (19,716 | )
|Restricted Stock Grants (Note 7)                                                                                         |  |                                   | 547,446    |            |  |             | 5   |               |  |               | 3,042   |   |  |   |         |   |  |   | 3,047   |  
|Common Stock Repurchased                                                                                                 |  |                                   | (979,000   | )          |  |             | (10 | )             |  |               | (10,075 | ) |  |   |         |   |  |   | (10,085 | )
|Net Income                                                                                                               |  |                                   |           |            |  |             |    |               |  |               |        |   |  |   | 26,657   |   |  |   | 26,657  |  
|Dividends declared (Note 6)                                                                                              |  |                                   |           |            |  |             |    |               |  |               |        |   |  |   | (36,986  | ) |  |   | (36,986 | )
|                                                                                                                         |  |                                   |            |            |  |             |     |               |  |               |         |   |  |   |          |   |  |   |         |  
|DECEMBER 31, 1999                                                                                                        |  |                                   | 26,647,968 |            |  |             | 266 |               |  |               | 361,412 |   |  |   | (134,390 | ) |  |   | 227,288 |  
|Adjustment to Minority Interest in OP (Note 2)                                                                           |  |                                   |           |            |  |             |    |               |  |               | (3,654  | ) |  |   |         |   |  |   | (3,654  | )
|Restricted Stock Grants (Note 7)                                                                                         |  |                                   | 73,258     |            |  |             |    |               |  |               | 1,661   |   |  |   |         |   |  |   | 1,661   |  
|Net Income                                                                                                               |  |                                   |           |            |  |             |    |               |  |               |        |   |  |   | 3,773    |   |  |   | 3,773   |  
|Dividends declared (Note 6)                                                                                              |  |                                   |           |            |  |             |    |               |  |               |        |   |  |   | (22,664  | ) |  |   | (22,664 | )
|                                                                                                                         |  |                                   |            |            |  |             |     |               |  |               |         |   |  |   |          |   |  |   |         |  
|DECEMBER 31, 2000                                                                                                        |  |                                   | 26,721,226 |            |  |             | 266 |               |  |               | 359,419 |   |  |   | (153,281 | ) |  |   | 206,404 |  
|Conversion of OP Units into Common Stock                                                                                 |  |                                   | 677,881    |            |  |             | 7   |               |  |               | 5,531   |   |  |   |         |   |  |   | 5,538   |  
|Restricted Stock Grants (Note 7)                                                                                         |  |                                   | 257,298    |            |  |             | 3   |               |  |               | 524     |   |  |   |         |   |  |   | 527     |  
|Net Loss                                                                                                                 |  |                                   |           |            |  |             |    |               |  |               |        |   |  |   | (2,197   | ) |  |   | (2,197  | )
|Dividends declared (Note 6)                                                                                              |  |                                   |           |            |  |             |    |               |  |               |        |   |  |   | (4,619   | ) |  |   | (4,619  | )
|                                                                                                                         |  |                                   |            |            |  |             |     |               |  |               |         |   |  |   |          |   |  |   |         |  
|DECEMBER 31, 2001                                                                                                        |  |                                   | 27,656,405 |            |  | $           | 276 |               |  | $             | 365,474 |   |  | $ | (160,097 | ) |  | $ | 205,653 |  
|                                                                                                                         |  |                                   |            |            |  |             |     |               |  |               |         |   |  |   |          |   |  |   |         |  

See Notes to Consolidated Financial Statements.

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CENTER TRUST






CONSOLIDATED STATEMENTS OF CASH
FLOWS


Three Years Ended December 31,
2001


|                                                      |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |          |         |         |  
|----------------------------------------------------- | -------------------------------------------------------------- | -------------------------------------------------- | ----------------------------------------- | -------- | ------ | ------- | ----- | -------- | ------- | -------- | ------ | -------- | ------- | ------- | -
|                                                      |                                                                | 2001                                               |                                           | 2000     |        | 1999   
|                                                      |                                                                |                                                    |                                           |          |        |        
|                                                      |                                                                |                                                   
|                                                      |                                                                | (In thousands)                                    
|CASH FLOWS FROM OPERATING ACTIVITIES:                 |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|                                                      | Net (Loss) Income                                              |                                                    | $                                         | (2,197   | )      |         | $     | 3,773    |         |          | $      | 26,657   |        
|                                                      | Adjustments to reconcile net (loss) income
	to net cash        |                                                    |                                           |          |        |         |       |          |         |          |        |          |        
|                                                      | Provided by operating activities:                              |                                                    |                                           |          |        |         |       |          |         |          |        |          |        
|                                                      |                                                                | Depreciation and amortization of rental properties |                                           |          | 20,717 |         |       |          | 24,959  |          |        |          | 24,854  |        
|                                                      |                                                                | Amortization of deferred financing costs           |                                           |          | 4,087  |         |       |          | 2,644   |          |        |          | 3,158   |        
|                                                      |                                                                | Amortization of deferred expenses                  |                                           |          | 588    |         |       |          | 710     |          |        |          | 3,362   |        
|                                                      |                                                                | Net loss (gain) on sale of rental properties       |                                           |          | 2,379  |         |       |          | (21,245 | )        |        |          | (23,991 | )      
|                                                      |                                                                | Impairment of asset held for sale                  |                                           |          |       |         |       |          | 4,770   |          |        |          |        |        
|                                                      |                                                                | Loss on early extinguishment of debt               |                                           |          | 1,768  |         |       |          | 17,514  |          |        |          | 6,483   |        
|                                                      |                                                                | Minority interests in operations                   |                                           |          | 508    |         |       |          | 602     |          |        |          | 4,786   |        
|                                                      | Net changes in operating assets and liabilities                |                                                    |                                           | (3,833   | )      |         |       | (16,815  | )       |          |        | (11,598  | )      
|                                                      |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|                                                      |                                                                |                                                    | Net cash provided by operating activities |          |        | 24,017  |       |          |         | 16,912   |        |          |         | 33,711  |  
|                                                      |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                 |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|                                                      | Proceeds from sale of rental properties                        |                                                    |                                           | 45,074   |        |         |       | 257,430  |         |          |        | 76,101   |        
|                                                      | Construction and development costs                             |                                                    |                                           | (8,100   | )      |         |       | (13,205  | )       |          |        | (17,333  | )      
|                                                      | Acquisition of rental properties                               |                                                    |                                           |         |        |         |       |         |         |          |        | (18,975  | )      
|                                                      |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|                                                      |                                                                |                                                    | Net cash provided by investing activities |          |        | 36,974  |       |          |         | 244,225  |        |          |         | 39,793  |  
|                                                      |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                 |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|                                                      | Principal amortization on mortgage financing                   |                                                    |                                           | (6,000   | )      |         |       | (3,940   | )       |          |        | (4,304   | )      
|                                                      | Principal payments on mortgage financing                       |                                                    |                                           | (39,530  | )      |         |       | (189,472 | )       |          |        | (90,451  | )      
|                                                      | Proceeds from mortgage financing                               |                                                    |                                           | 68,650   |        |         |       | 92,575   |         |          |        | 165,144  |        
|                                                      | Borrowings on secured line of credit                           |                                                    |                                           | 133,369  |        |         |       | 207,778  |         |          |        | 147,336  |        
|                                                      | Repayments of secured line of credit                           |                                                    |                                           | (72,164  | )      |         |       | (312,509 | )       |          |        | (190,156 | )      
|                                                      | Repurchase of common stock                                     |                                                    |                                           |         |        |         |       |         |         |          |        | (20,115  | )      
|                                                      | Proceeds from sale of common stock                             |                                                    |                                           |         |        |         |       |         |         |          |        | 33,903   |        
|                                                      | Repurchase of OP Units                                         |                                                    |                                           |         |        |         |       |         |         |          |        | (48,142  | )      
|                                                      | Purchase of debentures                                         |                                                    |                                           | (128,548 | )      |         |       | (30,000  | )       |          |        | (9,561   | )      
|                                                      | Costs of obtaining financing                                   |                                                    |                                           | (2,558   | )      |         |       | (6,092   | )       |          |        | (1,302   | )      
|                                                      | (Increase) decrease in restricted cash                         |                                                    |                                           | (3,751   | )      |         |       | 11,046   |         |          |        | (15,140  | )      
|                                                      | Dividends to shareholders                                      |                                                    |                                           | (8,834   | )      |         |       | (26,399  | )       |          |        | (36,778  | )      
|                                                      | Distributions to minority interests                            |                                                    |                                           | (973     | )      |         |       | (3,164   | )       |          |        | (5,370   | )      
|                                                      |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|                                                      |                                                                |                                                    | Net cash used in financing activities     |          |        | (60,339 | )     |          |         | (260,177 | )      |          |         | (74,936 | )
|                                                      |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|NET INCREASE (DECREASE) IN CASH AND CASH
	EQUIVALENTS |                                                                |                                                    | 652                                       |          |        |         | 960   |          |         |          | (1,432 | )       
|CASH AND CASH EQUIVALENTS, AT BEGINNING OF YEAR       |                                                                |                                                    | 6,164                                     |          |        |         | 5,204 |          |         |          | 6,636  |         
|                                                      |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|CASH AND CASH EQUIVALENTS, AT END OF YEAR             |                                                                | $                                                  | 6,816                                     |          |        | $       | 6,164 |          |         | $        | 5,204  |         
|                                                      |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|NON-CASH TRANSACTIONS:                                |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         
|                                                      | Issuance of operating partnership units to
	acquire properties |                                                    |                                           |         |        |         |       |         |         |          | $      | (1,999   | )      
|                                                      |                                                                |                                                    |                                           |          |        |         |       |          |         |          |        |         

See Notes to Consolidated Financial Statements.

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##### Table of Contents



CENTER TRUST

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

Three Years Ended December 31,
2001


1.     Organization
and Business

Center Trust, Inc. (the Company), a
Maryland corporation is a self-administered and self-managed
real estate investment trust. The Company engages in the
ownership, management, leasing, redevelopment, acquisition and
development of retail shopping centers in the western United
States.

As of December 31, 2001, the Company owned a
portfolio comprised of interests in 35 retail shopping centers
(the Properties). The Companys ownership
interest in the Properties is held through various partnership
interests. The Company is the sole general partner of CT
Operating Partnership, L.P., a California limited partnership
(the Operating Partnership or OP) and
owns a 94.9% interest therein. Of the 35 Properties, 33 are
wholly and directly owned by the Operating Partnership. Two of
the Properties are owned by partnerships in which the OP has a
general partner interest, including a 75% interest in
Willowbrook Center Partnership and a 34% effective interest in
Vermont Slauson Shopping Center, LTD each of which own one
asset. For purposes of securing various mortgages, the OP has
created a series of single purpose entities. Of the
33 properties owned by the OP, ownership of 18 of these
properties are held in 15 separate wholly-owned single purpose
entities, all of which are consolidated into the accompanying
financial statements.

The Company conducts substantially all of its
operations through the Operating Partnership and has full,
exclusive and complete responsibility and discretion in the
management and control of the Operating Partnership. As the
general partner of Kenneth Hahn Plaza and the Vermont-Slauson
Shopping Center, the Operating Partnership has sole
responsibility and control over the partnerships and cannot be
removed by the limited partners without cause.

During the year 2001, the Company sold 6
properties, including 4 community shopping centers and two
single tenant facilities. The net proceeds from these sales were
used to reduce the amount outstanding under the Companys
secured line of credit. In January 2001, the Company repaid, in
full, its 7 1/2% Convertible Subordinated Debentures. In
the second quarter of 2001, the Company recorded a non-recurring
Reorganization expense of $2.6 million. The expense
consisted of employee severance and other related costs.
Substantially all amounts have been paid as of December 31,
2001.

On June 1, 1997 the Company entered into a
Stock Purchase Agreement (the Agreement) with
LF Strategic Realty Investors, L.P. and Prometheus Western
Retail, LLC, affiliates of Lazard Freres Real Estate Investors,
LLC (together LFREI). Pursuant to the Agreement,
LFREI purchased 15,666,666 shares of Common Stock of the Company
at a price of $15.00 per share, for an aggregate purchase price
of $235 million. The stockholders of the Company approved
the Agreement on August 14, 1997. As of December 31,
2001, LFREI owned 56.7% of the outstanding common stock of the
Company.

In connection with the Stock Purchase Agreement,
the Company and LFREI entered into a Stockholders Agreement (the
Stockholders Agreement) providing that until
August 14, 2002 (the Standstill Period) LFREI
and its affiliates may not (i) acquire beneficial ownership
of more than 49.9% of the outstanding shares of Common Stock, on
an Adjusted Fully Diluted Basis (as defined below),
(ii) sell, transfer or otherwise dispose of any shares of
Common Stock except in accordance with certain specified
limitations (including a requirement that the Company, in its
sole and absolute discretion, approve any transfer in a
negotiated transaction that would result in the transferee
beneficially owning more than 9.8% of the Companys capital
stock), (iii) solicit, encourage or propose to effect or
negotiate certain business combination transactions,
(iv) solicit, encourage, initiate or participate in any
solicitation of proxies or become a participant in any election
contest, (v) seek board representation or a change in the
composition or size of the board, except as specifically
permitted, or (vi) assist or encourage any person or entity
with respect to any of the foregoing (collectively, the
Standstill Provisions). As used herein, the term
Adjusted Fully Diluted Basis shall mean on a diluted
basis, except that shares of common stock of the Company
issuable upon exercise of options granted under management
benefit plans shall not be included. In addition, during the

37



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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Standstill Period, LFREI and its affiliates have
agreed to vote all shares of Company common stock owned by them
that represent aggregate ownership in excess of 40% of the
outstanding shares of Company common stock either (i) in
accordance with the recommendation of our board of directors or
(ii) proportionally in accordance with the votes of the
other holders of Company common stock.

As of December 31, 2001, LFREI owned 54.0%
of the common stock of the Company on an Adjusted Fully Diluted
Basis. Under the terms of the Stockholders Agreement,
LFREIs right to freely vote at its discretion was limited
to 74.0% of its total holdings. LFREI and its affiliates must
vote the remainder of their holdings either (i) in
accordance with the recommendation of our board of directors or
(ii) proportionally in accordance with the votes of the
other holders of Company common stock. In the event that the
number of outstanding shares were to increase for any reason
(including as a result of issuance of common stock of the
Company upon exercise of management stock options), then LFREI
would be allowed to acquire additional shares of common stock of
the Company, up to 49.9% on an Adjusted Fully Diluted Basis. In
addition to the above, LFREI has the right to nominate four
members to the Companys board of directors. Although LFREI
will not be able to take action on behalf of the Company without
the concurrence of at least one of the other members of the
Companys board of directors, they may be able to exert
substantial influence over the Companys affairs. Further,
LFREI is entitled to receive access to certain operating
statements and other financial reports used in operating the
Company on a monthly basis.

On March 12, 2001, the Company granted LFREI
a limited waiver of some of the Standstill Provisions. The
waiver is to permit LFREI, under the control of the board of
directors, to initiate and engage in discussions with third
parties concerning certain change of control-type transactions
involving the Company. The limited waiver will stay in effect
until the expiration of the standstill period on August 14,
2002.

2.     Significant
Accounting Policies

The Companys significant accounting
policies are as follows:

Basis of Presentation The accompanying financial statements
include the accounts of the Company and the OP on a consolidated
basis. All significant intercompany transactions and balances
have been eliminated in the consolidated presentation.

The preparation of financial statements in
conformity with generally accepted accounting principles
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 period. Actual results could
differ from those estimates.

Minority Interests Included in minority interest for the
years ended December 31, 2001, 2000 and 1999 is the 5.1%,
6.8% and 5.8% interests, respectively, in the results of the OP
which are owned by various third parties. At December 31,
2001, 2000 and 1999, 1,338,644, 2,015,692 and 1,654,725 OP Units
were held by the limited partners, respectively. The OP Units
are exchangeable, subject to maintaining the Companys
status as a REIT, on a one-for-one basis for shares of the
Companys common stock.

Adjustments have been made to the minority
interest balance in the OP to properly reflect their ownership
interests in the Company. During 2001, 2000 and 1999,
adjustments of $5,531,000, $3,654,000 and $19,716,000 were
recorded, respectively. The adjustments are a result of the
purchase or issuance of additional shares of common stock and OP
Units and the conversion of OP Units into common stock.

Other minority interests include the limited
partners share of equity in two properties. The two
properties in which the OP has a general partner interest are
Kenneth Hahn Plaza (75% interest) and Vermont-Slauson Shopping
Center (34% interest). Consolidation accounting is applied to
both of the above partnerships as the OP has full control over
the operations of the properties.

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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Rental Properties Rental properties are stated at cost
less accumulated depreciation. Costs incurred for the
acquisition, renovation and betterment of the properties are
capitalized. Recurring maintenance and repairs are charged to
expense as incurred.

The Company regularly reviews long-lived assets
for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be
recoverable. If the sum of expected future cash flows is less
than the carrying amount of the asset, the Company recognizes an
impairment loss equal to the difference between the estimated
fair value and the carrying amount of the asset.

Interest costs incurred with respect to qualified
expenditures relating to the construction of assets are
capitalized during the construction period. Interest capitalized
during the years ended December 31, 2001, 2000, and 1999
amounted to $433,000, $836,000, and $735,000, respectively. Cash
paid for interest, net of capitalized interest costs, was
$33,310,000, $56,791,000, and $52,479,000 for the years ended
December 31, 2001, 2000 and 1999, respectively.

Depreciation and Amortization The cost of buildings and improvements
is depreciated on the straight-line method over estimated useful
lives, as follows:

Buildings  40 years

Leasehold interests  shorter of lease
term or useful life of the related property

Improvements  shorter of lease term or
useful life ranging from 10 to 20 years

Cash and Cash Equivalents Cash and cash equivalents include
highly liquid investments with original maturities of three
months or less.

Deferred Charges Deferred charges include deferred
leasing costs and loan fees. Leasing costs include an allocation
of internal costs directly associated with the execution of
leases and third-party leasing commissions. Such costs are
amortized on the straight-line basis over the initial lives of
the leases, which range from 5 to 20 years. Deferred
financing fees are amortized over the terms of the respective
loans.

|                         |  |                |         |      |  |   |         |  
|------------------------ |  | -------------- | ------- | ---- |  | - | ------- | -
|                         |  |               
|                         |  | December 31,  
|                         |  |               
|                         |  | 2001           |         | 2000
|                         |  |                |         |     
|                         |  |               
|                         |  | (In thousands)
|Deferred financing costs |  | $              | 11,061  |      |  | $ | 18,346  |  
|Deferred leasing costs   |  |                | 20,705  |      |  |   | 18,189  |  
|                         |  |                |         |      |  |   |         |  
|Total deferred charges   |  |                | 31,766  |      |  |   | 36,535  |  
|Accumulated amortization |  |                | (15,130 | )    |  |   | (18,505 | )
|                         |  |                |         |      |  |   |         |  
|Deferred charges, net    |  | $              | 16,636  |      |  | $ | 18,030  |  
|                         |  |                |         |      |  |   |         |  

Revenue Recognition and Tenant
Receivables Leases with
tenants are accounted for as operating leases. Minimum annual
rentals are recognized on a straight-line basis over the lease
term. Unbilled deferred rent represents the amount by which
expected straight-line rental income exceeds rents currently due
under

39



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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

the lease agreement. The Company continually
evaluates its reserve for unbilled deferred rent and may adjust
its reserve in the future for changes in the retail environment.
Total rents receivable consist of the following:

|                                     |  |                |        |      |  |   |        |  
|------------------------------------ |  | -------------- | ------ | ---- |  | - | ------ | -
|                                     |  |               
|                                     |  | December 31,  
|                                     |  |               
|                                     |  | 2001           |        | 2000
|                                     |  |                |        |     
|                                     |  |               
|                                     |  | (In thousands)
|Billed tenant receivables            |  | $              | 5,978  |      |  | $ | 10,964 |  
|Allowance for uncollectible rent     |  |                | (2,071 | )    |  |   | (2,592 | )
|                                     |  |                |        |      |  |   |        |  
|Net billed tenant receivables        |  |                | 3,907  |      |  |   | 8,372  |  
|                                     |  |                |        |      |  |   |        |  
|Unbilled deferred rent               |  |                | 6,422  |      |  |   | 6,014  |  
|Allowance for unbilled deferred rent |  |                | (2,661 | )    |  |   | (2,466 | )
|                                     |  |                |        |      |  |   |        |  
|Net unbilled deferred rent           |  | $              | 3,761  |      |  | $ | 3,548  |  
|                                     |  |                |        |      |  |   |        |  
|Total tenant receivables, net        |  | $              | 7,668  |      |  | $ | 11,920 |  
|                                     |  |                |        |      |  |   |        |  

Included in billed tenant receivables are
additional rentals based on common area maintenance expenses and
certain other expenses which are accrued in the period in which
the related expense is incurred and percentage rents which are
accrued on the basis of reported tenant sales.

Other Income In connection with the original
development of the Media City Center, commitments in the form of
notes receivable (terminating in 2016) were received from the
Community Redevelopment Agency of the City of Burbank (the
Burbank Agency) aggregating $51,500,000. Such
commitments are repayable by the Burbank Agency out of
incremental sales and property taxes associated with certain
defined parcels within the property. Management considers
amounts receivable under these notes to be contingent in nature
and accordingly has not recorded the notes receivable. Upon
separation, any repaid principal and accrued interest will be
forgiven. Other income has been recorded with respect to these
commitments generally in proportion to the recording of property
tax expense. Included in other income in connection with such
commitments for the years ended December 31, 2001, 2000 and
1999 is $2,713,000, $2,713,000 and $2,721,000, respectively. At
December 31, 2001 and 2000, other receivables with respect
to such commitments from the Burbank Agency were $3,008,000 and
$2,987,000, respectively.

Under similar commitments from the Community
Redevelopment Agencies of the Cities of Fullerton, Chino, and
Upland, other income was recognized for the years ended
December 31, 2001, 2000 and 1999 of $518,000, $493,000 and
$493,000, respectively.

Income Taxes The Company has elected to be taxed as
a REIT under the Internal Revenue Code of 1986, as amended (the
Code), commencing with the taxable year ended
December 31, 1993. As a result, the Company generally will
not be subject to federal and state income taxation at the
corporate level to the extent it distributes annually at least
90% of its REIT taxable income, as defined in the Code, to its
stockholders and satisfies certain other requirements.
Accordingly, no provision has been made for federal and state
income taxes in the accompanying consolidated financial
statements.

As of December 31, 2001 and 2000, the net
tax basis of the Properties was approximately $60,847,000 and
$56,852,000 respectively, less than the net book basis of such
assets.

Earnings Per Share Basic earnings per share is based on
the weighted average number of shares of common stock
outstanding during the period and diluted earnings per share is
based on the weighted average number of shares of common stock
outstanding combined with the incremental weighted average
shares that would have been outstanding if all dilutive
potential common shares had been issued. The basic and diluted
weighted average number of shares of common stock used in the
computation for the years ended December 31, 2001, 2000 and
1999 were 27,435,129, 26,676,641 and 25,696,646, respectively.
Units held by

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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

limited partners in the Operating Partnership may
be exchanged for shares of common stock of the Company on a
one-for-one basis and therefore are not dilutive. Accordingly,
the increase in weighted average shares outstanding under the
diluted method over the basic method in every period presented
would be entirely a result of outstanding options issued under
the Companys Amended and Restated 1993 Stock Option and
Incentive Plan and the conversion of the Debentures. If the
shares were dilutive, the weighted average shares outstanding
for the years ended December 31, 2001, 2000, and 1999 would
increase by 663,842, 8,468,652 and 9,120,523 shares,
respectively. Basic and diluted earnings per share were the same
for all periods presented.

Segment Information The Company operates in one segment,
retail operating properties.

Reclassifications Certain amounts have been reclassified
in the 2000 and 1999 financial statements to conform to the 2001
financial statement presentation.

New Accounting Pronouncements Statement of Financial Accounting
Standards (SFAS) No. 133, as amended, was effective
for the Company as of January 1, 2001. SFAS No. 133
established accounting and reporting standards requiring that
all derivative instruments, including certain derivative
instruments embedded in other contracts, be recorded in the
balance sheet as either assets or liabilities measured at fair
value. SFAS No. 133 requires that changes in the derivative
instruments fair value be recognized currently in
earnings, unless specific hedge accounting criteria are met. The
Companys derivative positions held at December 31,
2001 are considered immaterial. The adoption of this standard
does not have a material impact on the Companys results of
consolidated operations or its financial position.

In July 2001, the Financial Accounting Standards
Board issued SFAS No. 141, Business
Combinations and SFAS No. 142, Good will and
Other Intangible Assets. SFAS No. 141 prohibits the
use of the pooling of interest method. SFAS
No. 142 requires the cessation of the amortization of
goodwill subsequent to December 31, 2001. The new standards
are not expected to have a significant impact on our financial
statements.

In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment of Long-Lived
Assets. This Statement addressed financial accounting and
reporting for the impairment or disposal of long-lived assets
and supercedes FASB Statement No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed of. Additionally, SFAS 144 expands the
scope of discontinued operations to include all components of an
entity with operations that (1) can be distinguished from
the rest of the entity and (2) will be eliminated from the
ongoing operations of the entity in a disposal transaction. The
provisions of this Statement are effective for financial
statements issued for fiscal years beginning after
December 15, 2001, and interim periods within those fiscal
years. This new standard is not expected to have a significant
impact on our financial statements.

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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

3.     Rental
Properties

Rental properties consist of the following:

|                                                |  |                |          |      |  |   |          |  
|----------------------------------------------- |  | -------------- | -------- | ---- |  | - | -------- | -
|                                                |  |               
|                                                |  | December 31,  
|                                                |  |               
|                                                |  | 2001           |          | 2000
|                                                |  |                |          |     
|                                                |  |               
|                                                |  | (In thousands)
|Land                                            |  | $              | 162,047  |      |  | $ | 176,338  |  
|Leasehold interests                             |  |                | 15,920   |      |  |   | 15,920   |  
|Site improvements                               |  |                | 43,299   |      |  |   | 42,885   |  
|Buildings and improvements                      |  |                | 503,182  |      |  |   | 535,499  |  
|Construction in process                         |  |                | 8,370    |      |  |   | 6,025    |  
|                                                |  |                |          |      |  |   |          |  
|Rental Properties, at cost                      |  |                | 732,818  |      |  |   | 776,667  |  
|Less: Accumulated depreciation and amortization |  |                | (149,185 | )    |  |   | (136,828 | )
|                                                |  |                |          |      |  |   |          |  
|Rental Properties, net                          |  | $              | 583,633  |      |  | $ | 639,839  |  
|                                                |  |                |          |      |  |   |          |  

During 2001, the Company sold four community
shopping centers and two single tenant facilities. Gross
proceeds from the sales were $49.2 million. Net proceeds
used to reduce the outstanding balance on the Companys
Credit Facility totaled $33.4 million and mortgage debt
repaid to the lender was approximately $9 million. The net
loss on the sale of assets recognized during the year was
$2.4 million.

Combined revenues from the sold properties of
$2.2 million represented 2% of total revenues for the
year-ended December 31, 2001. Net operating income
(NOI) from the sold properties of $1.7 million
represents 3% of total Company NOI for the year.

As of December 31, 2000, the Company
recorded an impairment of assets held for sale of
$4.8 million. The write-down resulted from the
Companys decision to sell the Center of El Centro
located in El Centro, California and Madera Marketplace
located in Madera, California for a combined total of
approximately $20 million. The carrying value of these
assets, adjusted for anticipated closing and other costs was
$24.5 million at December 31, 2000.

On June 2, 2000, the Company completed a
sale-leaseback transaction on its corporate office building in
Manhattan Beach, California. The sale of the office building
generated approximately $5 million of cash. The Company
entered into a long-term lease with the buyer of the property.

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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

4.     Secured
Debt

|                                                                                                                                                                                           |  |                |         |      |  |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | ------- | ---- |  | - | ------- | 
|                                                                                                                                                                                           |  |               
|                                                                                                                                                                                           |  | December 31,  
|                                                                                                                                                                                           |  |               
|                                                                                                                                                                                           |  | 2001           |         | 2000
|                                                                                                                                                                                           |  |                |         |     
|                                                                                                                                                                                           |  |               
|                                                                                                                                                                                           |  | (In thousands)
|Credit Facility                                                                                                                                                                            |  | $              | 114,548 |      |  | $ | 53,344  | 
|Notes payable to life insurance
	companies  interest only and interest plus principal;
	rates ranging from 10.375% to 10.45%; maturing July 2002 through
	January 2003; non- recourse     |  |                | 23,798  |      |  |   | 29,944  | 
|Notes payable to financial
	institutions  principal and interest paid monthly, at
	interest rates ranging from 5.50% to 9.68%; maturing December
	2002 through January 2012; non-recourse |  |                | 218,363 |      |  |   | 184,772 | 
|Notes payable to pension funds 
	principal and interest paid monthly at 10.90% and 11.45%;
	maturing October 2006; non-recourse                                                           |  |                | 9,668   |      |  |   | 13,992  | 
|Floating rate tax-exempt certificates of
	participation  interest only at effective rate of
	4.08%; maturing December 2014 through November 2015; non-recourse                            |  |                | 36,000  |      |  |   | 36,000  | 
|                                                                                                                                                                                           |  |                |         |      |  |   |         | 
|                                                                                                                                                                                           |  | $              | 402,377 |      |  | $ | 318,052 | 
|                                                                                                                                                                                           |  |                |         |      |  |   |         | 

Borrowings under the Credit Facility are secured
by first mortgage liens on Media City Center, Medford Shopping
Center, Sunrise Place, Frontier Village, Rheem Valley, Southern
Palms, Rosedale Village and Walmart-Baldwin Hills. As properties
are acquired, they may be added to the security of the Credit
Facility, thereby increasing the amount available to the
Company. The Credit Facility is subject to certain conditions,
the violation of which may affect its terms.

Subsequent to December 31, 2001, the Company
extended its Credit Facility with GECC that was to expire on
April 1, 2002. The Credit Facility had a one-year extension
option. Under the new terms, the Credit Facility will expire on
April 1, 2004 with the option to extend for one additional
year. The new agreement reduces the maximum commitment from
$170 million to $150 million.

In December 2001, the Company closed on six
separate mortgages with total proceeds of $68.7 million.
The mortgages have a 10-year term with 30-year principal
amortization. The weighted-average fixed interest rate on the
six mortgages is 6.94%. The mortgages are not
cross-collateralized or cross-defaulted. Three of the mortgages,
with combined loan proceeds of $25.1 million, secured by
Ross Plaza in Clackmamas, Oregon, Silverdale Shopping Center in
Silverdale, Washington and Vancouver Park Place in Vancouver,
Washington, closed on December 18, 2001. These assets were
previously pledged as collateral for the Companys variable
rate secured credit facility. The remaining three mortgages,
with combined proceeds of $43.6 million, secured by
Mountain Square in Upland, California, Fire Mountain Shopping
Center in Oceanside, California and Randolph Plaza in Tucson,
Arizona, closed on December 19, 2001. Theses properties
were previously collateral for variable rate,
cross-collateralized, mortgages with a combined balance of
$33.1 million that were to mature on June 1, 2002. All
proceeds, after repayment of existing loans, were used to reduce
the outstanding balance on the Companys secured credit
facility.

On July 6, 2001, the Company refinanced an
existing mortgage on North Mountain Village, located in Phoenix,
Arizona. The $7.1 million mortgage bears interest at 7.68%
and matures in 2011. The Company had no other debt maturities in
2001.

The Company recorded an extraordinary loss on the
early extinguishment of debt of $1.8 million in 2001
related to the payment of certain prepayment penalties and the
write-off of unamortized deferred financing costs. In 2000, the
Company recorded an extraordinary loss on the early
extinguishment of debt of $17.5 million related to the
payment of certain prepayment penalties, the write-off of
unamortized deferred financing costs and costs related to the
defeasance of a loan with Nomura Asset Capital Corporation.

43



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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The remaining notes payable are secured by deeds
of trust and the assignment of rents and leases associated with
29 properties. Certain of the non-recourse notes payable
are subject to certain conditions, the violation of which may
result in additional recourse being available to the lenders.
Certain of the loans are subject to substantial prepayment
penalties, as defined in the respective loan agreements (See
Note 9).

Aggregate future principal payments as of
December 31, 2001 are as follows:

|                          |       |                |         |         | 
|------------------------- | ----- | -------------- | ------- | ------- | 
|Years Ending December 31, |       |               
|                          |       | (In thousands)
|2002                      |       | $              | 176,136 | (1)    
|2003                      |       |                | 41,742  |        
|2004                      |       |                | 2,442   |        
|2005                      |       |                | 2,650   |        
|2006                      |       |                | 11,113  |        
|Thereafter                |       |                | 168,294 |        
|                          |       |                |         |        
|                          | Total |                | $       | 402,377 | 
|                          |       |                |         |        



---



|    |                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes amount outstanding on the Companys
	Credit Facility which was amended subsequent to
	December 31, 2001 to extend the maturity to April 1,
	2004.

Restricted cash at December 31, 2001 and
2000 includes reserve funds established in connection with the
tax exempt financing. In addition, restricted cash includes
funds restricted for leasing costs and the completion of certain
construction projects required as conditions to existing
mortgages. Interest income on such funds accrues to the benefit
of the Company. Restricted cash disbursements require the
approval of the respective lenders. The floating rate tax-exempt
certificate of participation requires the Company to maintain
letters of credit equal to the balance outstanding. The cost of
such is factored into the effective rate on such notes.

5.     Subordinated
Debentures

In conjunction with the Companys formation,
the Company issued 7 1/2% Convertible Subordinated
Debentures, Series A and Series B which matured on
January 15, 2001. The Convertible Debentures were
convertible at any time after issuance and prior to maturity,
into shares of Common Stock of the Company at a conversion price
of $18.00 per share. On January 16, 2001, the Company
repaid in full its 7 1/2% Convertible Subordinated
Debentures. The outstanding balance of $128.5 million was
repaid with proceeds from the Companys Credit Facility.

Also in conjunction with the Companys
formation, the OP issued $30 million of 7 1/4%
Exchangeable Subordinated Debentures which matured on
December 27, 2003 and were secured by one of the
Companys properties. The Exchangeable Debentures were
exchangeable at any time for Common Stock of the Company at an
exchange price of $18.00 per share. On November 6, 2000,
the Company repaid its 7 1/4% Exchangeable Debentures at
par, pursuant to the Companys optional redemption rights.



|   |                     
|-- | --------------------
|6. | Stockholders Equity

In addition to Common Stock, the Companys
Charter authorizes the issuance of 10,000,000 shares of
Preferred Stock, par value $.01 per share. No such shares were
issued or outstanding as of December 31, 2001 and 2000. The
authorized shares of Common Stock outstanding are
100 million at December 31, 2001.

During the year ended December 31, 2001, the
Company declared four quarterly distributions of $0.04 per
share. During the year ended December 31, 2000, the Company
declared four quarterly distributions of $0.21 per share. During
the year ended December 31, 1999, the Company declared four
quarterly distributions of $0.36 per share.

44



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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|   |                                
|-- | -------------------------------
|7. | Stock Option and Incentive Plan

The 1993 Stock Option and Incentive Plan, as
amended, (the Option Plan) enables executive
officers, key employees and directors of the Company to
participate in the ownership of the Company. The Option Plan
provides for the award of a broad variety of stock-based
compensation alternatives such as non-qualified stock options,
incentive stock options, and restricted stock, and provides for
the grant to Independent Directors of non-qualified stock
options. Options are granted at prices which are not less than
market at date of grant, expire ten years from the date of
grant, and are generally exercisable 25% per year over four
years. The Option Plan is administered by the Compensation
Committee of the Board of Directors, which is authorized to
determine the number of shares to be subject thereto and the
terms and conditions thereof. Pursuant to the Option Plan,
2,750,000 shares of Common Stock were reserved for issuance to
eligible participants.

Following is a summary of the stock option
activity for the three years ended December 31, 2000:

|                  |           |               |           |                  |   |   |        |        | 
|----------------- | --------- | ------------- | --------- | ---------------- | - | - | ------ | ------ | 
|                  |           | Shares        |           | Weighted Average
|                  |           | Under Options |           | Exercise Price  
|                  |           |               |           |                 
|January 1, 1999.  |           |               | 1,811,767 |                  |   | $ | 15.284 |       
|                  | Granted   |               |           | 530,000          |   |   | $      | 10.011 | 
|                  | Cancelled |               |           | (1,014,058       | ) |   | $      | 15.608 | 
|                  |           |               |           |                  |   |   |        |       
|December 31, 1999 |           |               | 1,327,709 |                  |   | $ | 13.149 |       
|                  | Cancelled |               |           | (612             | ) |   | $      | 11.668 | 
|                  |           |               |           |                  |   |   |        |       
|December 31, 2000 |           |               | 1,327,097 |                  |   | $ | 13.150 |       
|                  | Cancelled |               |           | (663,255         | ) |   | $      | 11.777 | 
|                  |           |               |           |                  |   |   |        |       
|December 31, 2001 |           |               | 663,842   |                  |   | $ | 13.375 |       
|                  |           |               |           |                  |   |   |        |       

As of December 31, 2001, 2000 and 1999
options exercisable totaled 515,842, 799,739 and 547,168,
respectively.

The following table summarizes information about
stock options outstanding at December 31, 2000:

|                         |  |             |         |                  |  |                  |        |                |  |                  |     |  |  |  |         |  |  |   |        | 
|------------------------ |  | ----------- | ------- | ---------------- |  | ---------------- | ------ | -------------- |  | ---------------- | --- |  |  |  | ------- |  |  | - | ------ | 
|                         |  | Number      |         |                  |  | Weighted Average |        | Number         |  |                 
|                         |  | Outstanding |         | Weighted Average |  | Remaining        |        | Exercisable    |  | Weighted Average
|Range of Exercise Prices |  | At 12/31/01 |         | Exercise Price   |  | Contractual Life |        | As of 12/31/01 |  | Exercise Price  
|                         |  |             |         |                  |  |                  |        |                |  |                 
|$10.000                  |  |             | 250,000 |                  |  | $                | 10.000 |                |  |                  | 7.9 |  |  |  | 125,000 |  |  | $ | 10.000 | 
|$10.800-$14.400          |  |             | 108,442 |                  |  | $                | 11.805 |                |  |                  | 4.2 |  |  |  | 103,442 |  |  | $ | 11.811 | 
|$14.401-$18.000          |  |             | 305,400 |                  |  | $                | 16.695 |                |  |                  | 4.0 |  |  |  | 287,400 |  |  | $ | 16.797 | 
|                         |  |             |         |                  |  |                  |        |                |  |                  |     |  |  |  |         |  |  |   |        | 
|                         |  |             | 663,842 |                  |  | $                | 13.375 |                |  |                  | 5.5 |  |  |  | 515,842 |  |  | $ | 14.150 | 
|                         |  |             |         |                  |  |                  |        |                |  |                  |     |  |  |  |         |  |  |   |        | 

The weighted average fair value of the stock
options granted during 1999 was $0.62. There were no options
granted by the Company in 2001 and 2000. The Company applies
Accounting Principles Board Opinion No. 25 and related
Interpretations in accounting for its stock option and incentive
plan. Accordingly, no compensation cost has been recognized as a
result of its initial granting of Stock Options. Had
compensation cost for the Companys Option Plan been
determined based on the fair value at the grant dates for awards
during the three years ended December 31, 2001, consistent
with the method of Statement of Financial Accounting Standards
No. 123, Accounting for Stock Based
Compensation (SFAS No. 123),

45



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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

the Companys net income (loss) and
income (loss) per share for each of the periods would have
been equal to the pro forma amounts indicated below:

|                                    |             |                           |   |        |   |      |   |       |  |  |   |        | 
|----------------------------------- | ----------- | ------------------------- | - | ------ | - | ---- | - | ----- |  |  | - | ------ | 
|                                    |             |                          
|                                    |             | Year Ended December 31,  
|                                    |             |                          
|                                    |             | 2001                      |   | 2000   |   | 1999
|                                    |             |                           |   |        |   |     
|                                    |             |                          
|                                    |             | (In thousands,           
|                                    |             | except per share amounts)
|Net loss:                           |             |                           |   |        |   |      |   |       |  |  |   |       
|                                    | As reported |                           | $ | (2,197 | ) |      | $ | 3,773 |  |  | $ | 26,657 | 
|                                    | Pro forma   |                           | $ | (2,318 | ) |      | $ | 3,546 |  |  | $ | 26,369 | 
|Net Income (loss) per share, basic: |             |                           |   |        |   |      |   |       |  |  |   |       
|                                    | As reported |                           | $ | (0.08  | ) |      | $ | 0.14  |  |  | $ | 1.04   | 
|                                    | Pro forma   |                           | $ | (0.08  | ) |      | $ | 0.13  |  |  | $ | 1.03   | 

The fair value of options granted under the
Companys Stock Option Plan was estimated on the date of
grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions used for 2001, 2000, and
1999, respectively: expected life of five years; risk free
interest rate of 4.38%, 6.71% and 6.34%; expected dividend yield
of 5.4%, 17.9% and 13.3%; and expected volatility of 46.7%%,
26.5% and 37.3%.

The Company granted 257,298, 73,258 and 547,446
shares for 2001 through 1999, respectively, of restricted shares
of Common Stock to certain Key Employees. As holders of
restricted stock have all the rights of other stockholders,
subject to certain restrictions and forfeiture provisions, such
restricted stock is considered to be issued and outstanding.
Restrictions on 200,000 shares will expire after six years. The
expiration of the restrictions can be accelerated under certain
circumstances at the direction of the Compensation Committee of
the Board of Directors. Unamortized compensation expense related
to Unearned restricted stock of $663,000, $2.3 million and
$1.5 million was recorded as of December 31, 2001
through 1999, respectively, based on the market value of the
shares on the date issuance and is reflected in
Stockholders Equity. Restrictions of the remaining 300,000
shares of restricted stock can be lifted by the Compensation
committee based on the achievement of certain performance goals.
Compensation expense will be recognized at the point in time
that the restrictions are lifted based on the stock price on
such date. During 2001, 2000 and 1999, the Company recorded
compensation expense of $524,000, $1,660,000 and $3,362,000,
respectively, related to the amortization of deferred
compensation.



|   |                    
|-- | -------------------
|8. | Future Minimum Rent

The Company has operating leases with tenants
that expire at various dates through 2037 and are either subject
to scheduled fixed increases or adjustments based on the
Consumer Price Index. Generally, the leases grant tenants
renewal options and provide certain potential allowances during
the initial lease-up period. Leases also provide for additional
or contingent rents based on certain operating expenses as well
as tenants

46



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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

sales volume. Future minimum rent under operating
leases on a cash basis, excluding tenant reimbursements of
certain costs, as of December 31, 2001 is summarized as
follows:

|                          |       |                |         |         | 
|------------------------- | ----- | -------------- | ------- | ------- | 
|Years Ending December 31, |       |               
|                          |       | (In thousands)
|2002                      |       | $              | 65,369  |        
|2003                      |       |                | 59,749  |        
|2004                      |       |                | 53,267  |        
|2005                      |       |                | 45,994  |        
|2006                      |       |                | 37,777  |        
|Thereafter                |       |                | 158,734 |        
|                          |       |                |         |        
|                          | Total |                | $       | 420,890 | 
|                          |       |                |         |        

The Properties are located throughout the western
United States. More than one-half of our properties are located
in Southern California. As of December 31, 2001, these
properties represented approximately 64% of the aggregate square
footage of all our properties. The ability of the tenants to
honor the terms of their respective leases is dependent upon the
economic, regulatory and social factors affecting the
communities and industries in which the tenants operate.

9.     Fair Value
Disclosure of Financial Instruments

The following disclosure of estimated fair value
was determined by the Company using available market information
and appropriate valuation methodologies. However, considerable
judgment is necessary to interpret market data and develop the
related estimates of fair value. Accordingly, the estimates
presented herein are not necessarily indicative of the amounts
that could be realized upon disposition of the financial
instruments. The use of different market assumptions and/or
estimation methodologies may have a material effect on the
estimated fair value amounts.

Billed tenant and other receivables, accounts
payable and other liabilities are carried at amounts which
reasonably approximate their fair value.

The fixed rate mortgage notes payable totaling
$176,644,000 and $120,067,000 as of December 31, 2001 and
2000, respectively, have fair values of $203,288,000 and
$124,063,000, respectively (excluding prepayment penalties) as
estimated based upon current interest rates available for the
issuance of debt with similar terms and remaining maturities.
These notes were subject to estimated prepayment penalties of
$27,175,000 and $19,107,000 at December 31, 2001 and 2000,
respectively, which would be required to retire these notes
prior to maturity. The fair value of the outstanding balance on
the Credit Facility at December 31, 2001 is equal to its
carrying value of $114,548,000. The carrying value of floating
rate tax-exempt certificates of participation and the secured
line of credit at December 31, 2001 and 2000 approximates
their fair value. The fair market value of the Convertible
Debentures at December 31, 2000 was $128,548,000, based on
the trading price of the Series A Convertible Debentures as
of December 31, 2000.

The fair value estimates presented herein are
based on information available to management as of
December 31, 2001 and 2000. Although management is not
aware of any factors that would significantly affect the
estimated fair value amounts, such amounts have not been
comprehensively revalued for purposes of these financial
statements since those dates, and current estimates of fair
value may differ significantly from the amounts presented herein.

10.     Commitments
and Contingencies

Operating Leases The Company leases certain of its
Properties under long-term ground leases which are accounted for
as operating leases and which generally provide for contingent
rents based on the Companys

47



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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

tenants sales volume and renewal options.
Five leases expire between 2009 and 2018 and provide for options
to renew for additional periods of 20 to 25 years. Three
additional leases expire between 2047 and 2059. Future minimum
rental payments required during noncancelable lease terms as of
December 31, 2001 are summarized as follows:

|                          |       |                |       |        | 
|------------------------- | ----- | -------------- | ----- | ------ | 
|Years Ending December 31, |       |               
|                          |       |               
|                          |       | (In thousands)
|2002                      |       | $              | 996   |       
|2003                      |       |                | 997   |       
|2004                      |       |                | 1,000 |       
|2005                      |       |                | 1,000 |       
|2006                      |       |                | 1,000 |       
|Thereafter                |       |                | 9,507 |       
|                          |       |                |       |       
|                          | Total |                | $     | 14,500 | 
|                          |       |                |       |       

Assuming exercise of all renewal options,
aggregate future rental payments as of December 31, 2001
are $32.4 million. Certain of the Companys ground
leases contain participation features. Participation rents paid
in accordance with such terms were $101,000, $88,000, and
$68,000 for the years ended December 31, 2001, 2000, and
1999, respectively.

Litigation The Company is subject to various
legal proceedings and claims that arise in the ordinary course
of business. These matters are generally covered by insurance.
While the resolution of these matters cannot be predicted with
certainty, management believes, based on currently available
information, that the final outcome of such matters will not
have a material adverse effect on the financial statements of
the Company.

11.     Selected
Quarterly Financial Data (Unaudited)

The following table sets forth the selected
quarterly financial data for the Company for the years ended
December 31, 2001 and 2000 (in thousands, except per share
data):

|                                                                     |  |                    |        |              |  |         |        |          |  |   |        |   |  |   |        | 
|-------------------------------------------------------------------- |  | ------------------ | ------ | ------------ |  | ------- | ------ | -------- |  | - | ------ | - |  | - | ------ | 
|                                                                     |  |                   
|                                                                     |  | 2001 Quarter Ended
|                                                                     |  |                   
|                                                                     |  | December 31        |        | September 30 |  | June 30 |        | March 31
|                                                                     |  |                    |        |              |  |         |        |         
|Total Operating Revenues                                             |  | $                  | 25,218 |              |  | $       | 24,742 |          |  | $ | 24,517 |   |  | $ | 25,628 | 
|Income before extraordinary item                                     |  | $                  | 1,843  |              |  | $       | 1,266  |          |  | $ | (5,178 | ) |  | $ | 1,640  | 
|Net income (loss)                                                    |  | $                  | 1,460  |              |  | $       | 1,266  |          |  | $ | (5,744 | ) |  | $ | 821    | 
|Basic and diluted income (loss) before
	extraordinary item per share |  | $                  | 0.06   |              |  | $       | 0.05   |          |  | $ | (0.19  | ) |  | $ | 0.06   | 
|Basic and diluted income (loss) per share                            |  | $                  | 0.05   |              |  | $       | 0.05   |          |  | $ | (0.21  | ) |  | $ | 0.03   | 

|                                                              |  |                    |         |              |  |         |        |          |  |   |        |  |  |   |        | 
|------------------------------------------------------------- |  | ------------------ | ------- | ------------ |  | ------- | ------ | -------- |  | - | ------ |  |  | - | ------ | 
|                                                              |  |                   
|                                                              |  | 2000 Quarter Ended
|                                                              |  |                   
|                                                              |  | December 31        |         | September 30 |  | June 30 |        | March 31
|                                                              |  |                    |         |              |  |         |        |         
|Total Operating Revenues                                      |  | $                  | 33,551  |              |  | $       | 34,041 |          |  | $ | 34,340 |  |  | $ | 34,841 | 
|Income before extraordinary item                              |  | $                  | 3,220   |              |  | $       | 3,391  |          |  | $ | 10,092 |  |  | $ | 4,584  | 
|Net (loss) income                                             |  | $                  | (11,841 | )            |  | $       | 2,802  |          |  | $ | 10,092 |  |  | $ | 2,720  | 
|Basic and diluted income before extraordinary
	item per share |  | $                  | 0.12    |              |  | $       | 0.13   |          |  | $ | 0.38   |  |  | $ | 0.17   | 
|Basic and diluted (loss) income per share                     |  | $                  | (0.44   | )            |  | $       | 0.11   |          |  | $ | 0.38   |  |  | $ | 0.10   | 

48



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##### Table of Contents



CENTER TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

12.     Subsequent
Events

On March 20, 2002, the Company extended its
Credit Facility with GECC that was to expire on April 1,
2002. Under the new terms, the Credit Facility will expire on
April 1, 2004 with the option to extend for one additional
year. The new agreement reduces the maximum commitment from
$170 million to $150 million (See Note 4).

On March 20, 2002, the Company declared a
dividend of $0.06 for the first quarter of 2002 to shareholders
of record at March 29, 2002 and payable on April 22,
2002.

49



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##### Table of Contents



CENTER TRUST






SCHEDULE II  VALUATION AND
QUALIFYING ACCOUNTS


Each of the Three Years Ended
December 31, 2001


|                             |                                      |            |       |                |  |            |       |         |  |   |        |        |   |   |       |       | 
|---------------------------- | ------------------------------------ | ---------- | ----- | -------------- |  | ---------- | ----- | ------- |  | - | ------ | ------ | - | - | ----- | ----- | 
|                             |                                      |            |       | Charged to     |  |            |       |        
|                             |                                      | Balance at |       | Costs and      |  |            |       | Balance
|                             |                                      | Beginning  |       | Expenses or    |  |            |       | at End 
|                             |                                      | of Year    |       | Rental Revenue |  | Deductions |       | of Year
|                             |                                      |            |       |                |  |            |       |        
|                             |                                      |            |       |                |  |           
|                             |                                      |            |       | (In thousands) |  |           
|Year Ended December 31, 2001 |                                      |            |       |                |  |            |       |         |  |   |        |        |   |   |       |      
|                             | Allowance for uncollectible rent     |            | $     | 2,592          |  |            | $     | 455     |  |   | $      | (976   | ) |   | $     | 2,071 | 
|                             | Allowance for unbilled deferred rent |            |       | 2,466          |  |            |       | 443     |  |   |        | (248   | ) |   |       | 2,661 | 
|                             |                                      |            |       |                |  |            |       |         |  |   |        |        |   |   |       |      
|                             |                                      | $          | 5,058 |                |  | $          | 898   |         |  | $ | (1,224 | )      |   | $ | 4,732 |      
|                             |                                      |            |       |                |  |            |       |         |  |   |        |        |   |   |       |      
|Year Ended December 31, 2000 |                                      |            |       |                |  |            |       |         |  |   |        |        |   |   |       |      
|                             | Allowance for uncollectible rent     |            | $     | 1,531          |  |            | $     | 1,246   |  |   | $      | (185   | ) |   | $     | 2,592 | 
|                             | Allowance for unbilled deferred rent |            |       | 5,484          |  |            |       |        |  |   |        | (3,018 | ) |   |       | 2,466 | 
|                             |                                      |            |       |                |  |            |       |         |  |   |        |        |   |   |       |      
|                             |                                      | $          | 7,015 |                |  | $          | 1,246 |         |  | $ | (3,203 | )      |   | $ | 5,058 |      
|                             |                                      |            |       |                |  |            |       |         |  |   |        |        |   |   |       |      
|Year Ended December 31, 1999 |                                      |            |       |                |  |            |       |         |  |   |        |        |   |   |       |      
|                             | Allowance for uncollectible rent     |            | $     | 2,171          |  |            | $     | 572     |  |   | $      | (1,212 | ) |   | $     | 1,531 | 
|                             | Allowance for unbilled deferred rent |            |       | 6,840          |  |            |       |        |  |   |        | (1,356 | ) |   |       | 5,484 | 
|                             |                                      |            |       |                |  |            |       |         |  |   |        |        |   |   |       |      
|                             |                                      | $          | 9,011 |                |  | $          | 572   |         |  | $ | (2,568 | )      |   | $ | 7,015 |      
|                             |                                      |            |       |                |  |            |       |         |  |   |        |        |   |   |       |      

50



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##### Table of Contents



CENTER TRUST






SCHEDULE III  REAL ESTATE AND
ACCUMULATED DEPRECIATION


December 31, 2001


|                              |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |     |         |  |  |   |         |  |  |   |         |  |  |   |          |   |  |   |         | 
|----------------------------- |  | --------------- | -------- | ----------- |  | ----------------- | ------- | ------------ |  | --------- | ------- | ------------ |  | ----------- | ------- | ------------ |  | --- | ------- |  |  | - | ------- |  |  | - | ------- |  |  | - | -------- | - |  | - | ------- | 
|                              |  |                 |          |             |  |                  
|                              |  | Initial Cost    |          | Costs       |  | December 31, 2001
|                              |  |                 |          | Capitalized |  |                  
|                              |  |                 |          | Buildings   |  | Subsequent        |         |              |  | Buildings |         |             
|                              |  |                 |          | and         |  | to Acquisition/   |         |              |  | And       |         |              |  | Accumulated |         |             
|Description                   |  | Encumbrances(1) |          | Land        |  | Improvements      |         | Construction |  | Land      |         | Improvements |  | Total       |         | Depreciation |  | Net
|                              |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |    
|                              |  |                
|                              |  | (In thousands) 
|COMMUNITY SHOPPING CENTERS    |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |     |         |  |  |   |         |  |  |   |         |  |  |   |          |   |  |   |         | 
|Southern California           |  | $               | (158,326 | )           |  | $                 | 71,517  |              |  | $         | 142,184 |              |  | $           | 19,964  |              |  | $   | 71,517  |  |  | $ | 162,148 |  |  | $ | 233,665 |  |  | $ | (46,806  | ) |  | $ | 186,859 | 
|Washington                    |  |                 | (17,475  | )           |  |                   | 12,113  |              |  |           | 17,720  |              |  |             | 2,209   |              |  |     | 12,113  |  |  |   | 19,929  |  |  |   | 32,042  |  |  |   | (2,029   | ) |  |   | 30,013  | 
|Northern & Central California |  |                 | (13,673  | )           |  |                   | 18,363  |              |  |           | 29,414  |              |  |             | 2,400   |              |  |     | 18,363  |  |  |   | 31,814  |  |  |   | 50,177  |  |  |   | (3,789   | ) |  |   | 46,388  | 
|Arizona                       |  |                 | (42,452  | )           |  |                   | 19,438  |              |  |           | 35,935  |              |  |             | 5,806   |              |  |     | 19,438  |  |  |   | 41,741  |  |  |   | 61,179  |  |  |   | (4,925   | ) |  |   | 56,254  | 
|Oregon                        |  |                 | (21,869  | )           |  |                   | 14,769  |              |  |           | 25,627  |              |  |             | 21,059  |              |  |     | 14,769  |  |  |   | 46,686  |  |  |   | 61,455  |  |  |   | (6,823   | ) |  |   | 54,632  | 
|                              |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |     |         |  |  |   |         |  |  |   |         |  |  |   |          |   |  |   |         | 
|                              |  |                 | (253,795 | )           |  |                   | 136,200 |              |  |           | 250,880 |              |  |             | 51,438  |              |  |     | 136,200 |  |  |   | 302,318 |  |  |   | 438,518 |  |  |   | (64,372  | ) |  |   | 374,146 | 
|                              |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |     |         |  |  |   |         |  |  |   |         |  |  |   |          |   |  |   |         | 
|SINGLE TENANT                 |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |     |         |  |  |   |         |  |  |   |         |  |  |   |          |   |  |   |         | 
|FACILITIES                    |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |     |         |  |  |   |         |  |  |   |         |  |  |   |          |   |  |   |         | 
|Southern California           |  |                 | (2,651   | )           |  |                   |        |              |  |           | 2,006   |              |  |             | 576     |              |  |     |        |  |  |   | 2,582   |  |  |   | 2,582   |  |  |   | (1,324   | ) |  |   | 1,258   | 
|Northern & Central California |  |                 |         |             |  |                   |        |              |  |           |        |              |  |             |        |              |  |     |        |  |  |   |        |  |  |   |        |  |  |   |         |   |  |   |        | 
|Arizona                       |  |                 | (1,382   | )           |  |                   | 1,156   |              |  |           | 4,620   |              |  |             | 1       |              |  |     | 1,156   |  |  |   | 4,621   |  |  |   | 5,777   |  |  |   | (1,407   | ) |  |   | 4,370   | 
|                              |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |     |         |  |  |   |         |  |  |   |         |  |  |   |          |   |  |   |         | 
|                              |  |                 | (4,033   | )           |  |                   | 1,156   |              |  |           | 6,626   |              |  |             | 577     |              |  |     | 1,156   |  |  |   | 7,203   |  |  |   | 8,359   |  |  |   | (2,731   | ) |  |   | 5,628   | 
|                              |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |     |         |  |  |   |         |  |  |   |         |  |  |   |          |   |  |   |         | 
|REGIONAL MALLS                |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |     |         |  |  |   |         |  |  |   |         |  |  |   |          |   |  |   |         | 
|Southern California           |  |                 | (30,000  | )           |  |                   | 24,692  |              |  |           | 203,623 |              |  |             | 57,626  |              |  |     | 24,692  |  |  |   | 261,249 |  |  |   | 285,941 |  |  |   | (82,082  | ) |  |   | 203,859 | 
|                              |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |     |         |  |  |   |         |  |  |   |         |  |  |   |          |   |  |   |         | 
|                              |  | $               | (287,828 | )           |  | $                 | 162,048 |              |  | $         | 461,129 |              |  | $           | 109,641 |              |  | $   | 162,048 |  |  | $ | 570,770 |  |  | $ | 732,818 |  |  | $ | (149,185 | ) |  | $ | 583,633 | 
|                              |  |                 |          |             |  |                   |         |              |  |           |         |              |  |             |         |              |  |     |         |  |  |   |         |  |  |   |         |  |  |   |          |   |  |   |         | 



---



|    |                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------
|(1) | Excludes the secured line of credit of
	$114,548,000 at December 31, 2001, which is secured by
	various properties.

The aggregate gross cost of rental property
included above for federal income tax purposes approximated
$688,441,173 as of December 31, 2001.

The following table reconciles the Historical
Cost of Properties from January 1, 1999 to
December 31, 2001:

|                                 |                              |                                    |         |      |         |      |           |  |          |   |           |  |         |  
|-------------------------------- | ---------------------------- | ---------------------------------- | ------- | ---- | ------- | ---- | --------- |  | -------- | - | --------- |  | ------- | -
|                                 |                              | 2001                               |         | 2000 |         | 1999
|                                 |                              |                                    |         |      |         |     
|Balance at beginning of the year |                              | $                                  | 776,667 |      |         | $    | 1,030,689 |  |          | $ | 1,074,629 | 
|                                 | Additions during the year   |                                    |         |      |         |      |           |  |          |   |           |  |        
|                                 |                              | Acquisition of properties          |         |      |        |      |           |  |         |   |           |  | 18,975  |  
|                                 |                              | Construction and Development Costs |         |      | 8,123   |      |           |  | 12,523   |   |           |  | 13,385  |  
|                                 | Deductions during the year  |                                    |         |      |         |      |           |  |          |   |           |  |        
|                                 |                              | Cost of real estate sold           |         |      | (51,972 | )    |           |  | (261,775 | ) |           |  | (76,300 | )
|                                 |                              | Write-down of asset held for sale  |         |      |        |      |           |  | (4,770   | ) |           |  |        |  
|                                 |                              |                                    |         |      |         |      |           |  |          |   |           | 
|Balance at close of the year     |                              | $                                  | 732,818 |      |         | $    | 776,667   |  |          | $ | 1,030,689 | 
|                                 |                              |                                    |         |      |         |      |           |  |          |   |           | 

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The following table reconciles the Accumulated
Depreciation from January 1, 1999 to December 31, 2001:

|                                 |                              |                           |         |      |        |      |         |  |         |   |         |  |         |  
|-------------------------------- | ---------------------------- | ------------------------- | ------- | ---- | ------ | ---- | ------- |  | ------- | - | ------- |  | ------- | -
|                                 |                              | 2001                      |         | 2000 |        | 1999
|                                 |                              |                           |         |      |        |     
|Balance at beginning of the year |                              | $                         | 136,828 |      |        | $    | 143,610 |  |         | $ | 141,785 | 
|                                 | Additions during the year   |                           |         |      |        |      |         |  |         |   |         |  |        
|                                 |                              | Depreciation for the year |         |      | 16,948 |      |         |  | 21,958  |   |         |  | 22,566  |  
|                                 | Deductions during the year  |                           |         |      |        |      |         |  |         |   |         |  |        
|                                 |                              | Property sold             |         |      | (4,591 | )    |         |  | (28,740 | ) |         |  | (20,741 | )
|                                 |                              |                           |         |      |        |      |         |  |         |   |         | 
|Balance at close of the year     |                              | $                         | 149,185 |      |        | $    | 136,828 |  |         | $ | 143,610 | 
|                                 |                              |                           |         |      |        |      |         |  |         |   |         | 




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

None.




PART III




Item 10.     Directors
and Executive Officers of The Registrant

The information called for by Item 10 is
incorporated herein by reference to the information included
under the captions Election of Directors and
Executive Officers in the Companys definitive
Proxy Statement for the 2001 Annual Meeting of Stockholders (the
Proxy Statement).




Item 11.     Executive
Compensation

The information called for by Item 11 is
incorporated herein by reference to the information included
under the captions Executive Compensation in the
Companys Proxy Statement.




Item 12.     Security
Ownership of Certain Beneficial Owners and
Management

The information called for by this Item 12
is incorporated herein by reference to the information included
under the caption Security Ownership of Certain Beneficial
Owners and Management in the Companys Proxy
Statement.




Item 13.     Certain
Relationships and Related Transactions

The information called for by this Item 13
is incorporated herein by reference to the information included
under the caption Certain Relationships and Related
Transactions in the Companys Proxy Statement.

52



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##### Table of Contents






PART IV




Item
14.Exhibits, Financial
Statement Schedules, and Reports on Form 8-K

A.     The following
documents are filed as part of this report:

|   |  |                                                                                                      |  |        |    | 
|-- |  | ---------------------------------------------------------------------------------------------------- |  | ------ | -- | 
|   |  |                                                                                                      |  | Page  
|   |  |                                                                                                      |  | Number
|   |  |                                                                                                      |  |       
|1. |  | Independent Auditors Report                                                                         |  |        | 32 | 
|   |  | Consolidated Balance Sheets as of
	December 31, 2001 and 2000                                        |  |        | 33 | 
|   |  | Consolidated Statements of Operations for Each of
	the Three Years Ended
	December 31, 2001          |  |        | 34 | 
|   |  | Consolidated Statements of Stockholders
	Equity for Each of the Three Years Ended December 31, 2001 |  |        | 35 | 
|   |  | Consolidated Statements of Cash Flows for Each of
	the Three Years Ended
	December 31, 2001          |  |        | 36 | 
|   |  | Notes to Consolidated Financial Statements                                                           |  |        | 37 | 
|2. |  | Financial Statement Schedules                                                                        |  |        |    | 
|   |  | II. Valuation and Qualifying Accounts                                                                |  |        | 50 | 
|   |  | III. Real Estate and Accumulated Depreciation                                                        |  |        | 51 | 

Schedules other than those listed above are
omitted because they are not applicable, not required, or the
information required to be set forth therein is included in the
financial statements or the notes thereto.

The following exhibits are included as part of
this Annual Report on Form 10-K as required by
Item 601 of Regulation S-K.

|             |  |                                                                                                                                                                                                                                                                                                                                                                    
|------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 3.1a |  | Articles of Amended and Restatement of the
	Company, incorporated herein by reference to Exhibit 3.1 to
	the Companys Form 10-K for the year ended
	December 31, 1993 (the 1993 Form 10-K).                                                                                                                                                                     
|Exhibit 3.1b |  | Articles of Amendment of the Company.,
	incorporated herein by reference to Exhibit 3.3 to the
	Companys Form 10-Q for the quarter ended
	June 30, 1998.                                                                                                                                                                                                          
|Exhibit 3.1c |  | Articles of Amendment of the Company,
	incorporated herein by reference to Exhibit 3.1c to the
	Companys Form 10-K for the year ended
	December 31, 1999 (the 1999 Form 10-K).                                                                                                                                                                                  
|Exhibit 3.2  |  | Second Amended and Restated Bylaws of the
	Company, incorporated herein by reference to Exhibit 3.2 to
	the 1999 Form 10-K.                                                                                                                                                                                                                                        
|Exhibit 4.1  |  | Form of Common Stock Certificate, incorporated
	herein by reference to Exhibit 4.5 to the Companys
	1999 Form 10-K.                                                                                                                                                                                                                                               
|Exhibit 4.2  |  | Registration Rights Agreement, dated as of
	December 27, 1993, among the Company and the persons named
	therein, incorporated herein by reference to Exhibit 10.2
	to the Companys Registration Statement on Form S-11
	(No. 33-70156).                                                                                                                           
|Exhibit 4.3  |  | Registration Rights Agreement, dated as of
	December 27, 1993, among the Company, Merrill Lynch Global
	Allocation Fund, Inc., Merrill Lynch Special Value Fund, Inc.,
	and Merrill Lynch Multinational Investment Portfolios Equity/
	Convertible Series (Global Allocation Portfolio), incorporated
	herein by reference to Exhibit 10.26 to the 1993
	Form 10-K.
|Exhibit 4.4  |  | Registration Rights Agreement by and among the
	Company and Prometheus Western Retail, LLC, dated as of
	June 1, 1997, incorporated herein by reference to the
	Companys 1997 Proxy Statement.                                                                                                                                                                    
|Exhibit 4.5  |  | Registration Rights Agreement dated as
	March 24, 1998 by and among the Company and Bartfam, a
	California Limited Partnership, incorporated herein by reference
	to Exhibit 4.10 to the Companys 1999 Form 10-K.                                                                                                                                                 

53



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|              |  |                                                                                                                                                                                                                                                                                  
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 4.6   |  | Registration Rights Agreement dated as of
	March 24, 1998 by and among the Company and Cecile C.
	Bartman, Trustee Under the Will of Bernard Citron, Deceased,
	incorporated herein by reference to Exhibit 4.11 to the
	Companys 1999 Form 10-K.                               
|Exhibit 4.7   |  | Registration Rights Agreement dated as of
	March 24, 1998 by and among the Company and CJJ Limited
	Partnership, incorporated herein by reference to
	Exhibit 4.12 to the Companys 1999 form 10-K.                                                                              
|Exhibit 4.8   |  | Registration Rights Agreement dated as of
	March 24, 1998 by and among the Company and the Harry
	J.L. Frank, Jr. and Margaret S. Frank Family
	Trust U/A 5/9/91, incorporated herein by reference to
	Exhibit 4.13 to the Companys 1999 Form 10-K.                             
|Exhibit 4.9   |  | Registration Rights Agreement dated as of
	March 24, 1998 by and among the Company and the HI-NC, a
	California general partnership, incorporated herein by reference
	to Exhibit 4.14 to the Companys 1999 Form 10-K.                                                          
|Exhibit 4.10  |  | Registration Rights Agreement dated as
	March 24, 1998 by and among the Company and Bartfam, a
	California Limited Partnership, incorporated herein by reference
	to Exhibit 4.15 to the Companys 1999 Form 10-K.                                                               
|Exhibit 4.11  |  | Registration Rights Agreement dated as of
	March 24, 1998 by and among the Company and Cecile C.
	Bartman, incorporated herein by reference to Exhibit 4.16
	to the Companys 1999 Form 10-K.                                                                                    
|Exhibit 4.12  |  | Registration Rights Agreement dated as of
	March 24, 1998 by and among the Company and CJJ Limited
	Partnership, incorporated herein by reference to
	Exhibit 4.17 to the Companys 1999 form 10-K.                                                                              
|Exhibit 4.13  |  | Registration Rights Agreement dated as of
	March 26, 1998 by and among the Company and Hughes
	Investments, incorporated herein by reference to
	Exhibit 4.18 to the Companys 1999 Form 10-K.                                                                                   
|Exhibit 4.14  |  | Registration Rights Agreement dated as of
	March 26, 1998 by and among the Company and Hughes Miliken
	Associates, incorporated herein by reference to
	Exhibit 4.19 to the Companys 1999 form 10-K.                                                                            
|Exhibit 4.15  |  | Registration Rights Agreement dated as of
	March 25, 1998 by and among the Company and Speer Family
	Partnership, incorporated herein by reference to
	Exhibit 4.20 to the Companys 1999 form 10-K.                                                                             
|Exhibit 4.16  |  | Registration Rights Agreement dated as of
	March 26, 1998 by and among the Company and the HI-LOMA, a
	California general partnership, incorporated herein by reference
	to Exhibit 4.21 to the Companys 1999 Form 10-K.                                                        
|Exhibit 4.17  |  | Registration Rights Agreement dated as of
	May 1, 1998 by and among the Company and Myrtle Gronske,
	incorporated herein by reference to Exhibit 4.22 to the
	Companys 1999 form 10-K.                                                                                          
|Exhibit 4.18  |  | Registration Rights Agreement dated as of
	May 1, 1998 by and among the Company and Visalia MKP, Inc.,
	incorporated herein by reference to Exhibit 4.23 tot he
	Companys 1999 Form 10-K.                                                                                       
|Exhibit 4.19  |  | Registration Rights Agreement dated as of
	April 30, 1998 by and among the Company, the Operating
	Partnership, Southern Palms Associates, John L. Holmes and
	Holmes Development Group, Inc., incorporated herein by reference
	to Exhibit 4.24 to the Companys 1999 Form 10-K.
|Exhibit 4.20  |  | Registration Rights Agreement dated as of
	March 20, 1998 by and among the Company and North Mountain
	Village Shopping Center Limited Partnership, incorporated herein
	by reference to Exhibit 4.25 to the Companys 1999
	Form 10-K.                                          
|Exhibit 10.1  |  | Amended and Restated Agreement of Limited
	Partnership of CT Operating Partnership, L.P., incorporated
	herein by reference to Exhibit 10.1 to the Companys
	1999 Form 10-K.                                                                                                    
|Exhibit 10.2* |  | Second Amended and Restated 1993 Stock Option and
	Incentive Plan for Officers, Directors and Key Employees of
	Center Trust, Inc. and CT Operating Partnership, L.P.,
	incorporated herein by reference to Exhibit 10.2 to the
	Companys 1999 Form 10-K.                       
|Exhibit 10.3  |  | 401(k) Plan and Trust Agreement of the Company
	and its affiliated and related companies, incorporated herein by
	reference to Exhibit 10.4 to the 1993 Form 10-K.                                                                                                               

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|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 10.4  |  | Form of Indemnification Agreement between the
	Company and its directors and officers, incorporated herein by
	reference to Exhibit 10.4 to the Companys
	Registration Statement on Form S-11 (No. 33-70156).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Exhibit 10.5  |  | Agreement for Transfer of Realty and Assets,
	dated as of December 27, 1993, by and among Alexander
	Haagen Properties Operating Partnership, L.P. and Montebello
	Commercial Properties, Haagen GDH Partnership, Center Partners,
	H&H Oceanside Co., El Camino North, Baldwin Hills
	Associates, Haagen-Burbank Partnership, Date Palm Partnership,
	Alexander Haagen III, Betty Haagen, Seymour Kreshek,
	Haagen-Fontana Partnership, Lake Forest Shopping Center,
	Haagen-San Francisco Partnership, Haagen GDH-2 Partnership,
	Haagen- Vista Way Associates, and Haagen Alhambra Associates,
	incorporated herein by reference to Exhibit 10.14 to the
	1993 Form 10-K.                                                                                                                                  
|Exhibit 10.6  |  | Amendment No. 1 to Agreement for Transfer of
	Realty and Assets, dated as of December 27, 1993, by and
	among Alexander Haagen Properties Operating Partnership, L.P.
	and Montebello Commercial Properties, Haagen GDH Partnership,
	Center Partners, H&H Oceanside Co., El Camino
	North, Baldwin Hills Associates, Haagen-Burbank Partnership,
	Date Palm Partnership, Alexander Haagen III, Betty Haagen,
	Seymour Kreshek, Haagen-Fontana Partnership, Lake Forest
	Shopping Center, Haagen-San Francisco Partnership, Haagen GDH-2
	Partnership, Haagen-Vista Way Associates, and Haagen Alhambra
	Associates, incorporated herein by reference to
	Exhibit 10.15 to the 1993 Form 10-K.                                                                                                                
|Exhibit 10.7  |  | Agreement for Transfer of Realty and Assets,
	dated as of December 27, 1993, by and among Alexander
	Haagen Properties, Inc., Alexander Haagen, Sr. and Charlotte
	Haagen, Co-Trustees of the Haagen Living Trust dated
	August 17, 1988, Saul S. Kreshek, Saul S. Kreshek
	and Seymour Kreshek, Co-Trustees of the Helen Roseman Trust,
	Saul S. Kreshek and Seymour Kreshek, Co-Trustees of the
	Alex Kreshek Revocable Trust, Jeffrey Harris Kreshek 1992
	Irrevocable Trust, Bradley Howard Kreshek 1992 Irrevocable
	Trust, Howard Andrew Kreshek 1992 Irrevocable Trust,
	Haagen-Gardena Gateway Partnership, Haagen-Hollywood
	Partnership, San Fernando Mission Partnership, and Haagen GDH
	Partnership, incorporated herein by reference to
	Exhibit 10.16 to the 1993 Form 10-K.                   
|Exhibit 10.8  |  | Amendment No. 1 to Agreement for Transfer of
	Realty and Assets, dated as of December 27, 1993, by and
	among Alexander Haagen Properties, Inc., Alexander Haagen, Sr.
	and Charlotte Haagen, Co-Trustees of the Haagen Living Trust
	dated August 17, 1988, Saul S. Kreshek, Saul S.
	Kreshek and Seymour Kreshek, Co-Trustees of the Helen Roseman
	Trust, Saul S. Kreshek and Seymour Kreshek, Co-Trustees of
	the Alex Kreshek Revocable Trust, Jeffrey Harris Kreshek 1992
	Irrevocable Trust, Bradley Howard Kreshek 1992 Irrevocable
	Trust, Howard Andrew Kreshek 1992 Irrevocable Trust,
	Haagen-Gardena Gateway Partnership, Haagen-Hollywood
	Partnership, San Fernando Mission Partnership, and Haagen GDH
	Partnership, incorporated herein by reference to
	Exhibit 10.17 to the 1993 Form 10-K.
|Exhibit 10.9  |  | Partnership Interests Exchange Agreement, dated
	as of December 27, 1993, by and among Alexander Haagen
	Properties, Inc., Alexander Haagen, Sr. and Charlotte Haagen,
	Co-Trustees of the Haagen Living Trust, Seymour Kreshek and
	Arline Kreshek, Co-Trustees of the Seymour and Arline Kreshek
	Living Trust, and Alexander Haagen III, incorporated herein
	by reference to Exhibit 10.18 to the 1993 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                         
|Exhibit 10.10 |  | Partnership Interests Exchange Agreement between
	Willowbrook General Partnership and Alexander Haagen Operating
	Partnership, L.P., dated as of December 27, 1993,
	incorporated herein by reference to Exhibit 10.19 to the
	1993 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Exhibit 10.11 |  | Contribution Agreement, dated as of
	December 27, 1993, between Alexander Haagen Properties
	Operating Partnership, L.P. and Alexander Haagen Properties,
	Inc., incorporated herein by reference to Exhibit 10.20 to
	the 1993 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Exhibit 10.12 |  | Development Properties Agreement, dated as of
	December 27, 1993, among Haagen-Burbank Partnership,
	Haagen-Fontana Partnership, Baldwin Hills Associates, Montebello
	Commercial Properties, Haagen-San Francisco Partnership and
	Alexander Haagen Properties Operating Partnership, L.P.,
	incorporated herein by reference to Exhibit 10.23 to the
	1993 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                       

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|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 10.13   |  | Form of Waiver and Recontribution Agreement among
	Executive Officers and Alexander Haagen Properties Operating
	Partnership, L.P., incorporated herein by reference to
	Exhibit 10.16 to the Companys Registration Statement
	on Form S-11 (No. 33-70156).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Exhibit 10.14   |  | Form of Indemnity Agreement among Executive
	Officers and Alexander Haagen Properties Operating Partnership,
	L.P., incorporated herein by reference to Exhibit 10.17 to
	the Companys Registration Statement on Form S-11
	(No. 33-70156).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Exhibit 10.15   |  | Indemnity Agreement, dated as of
	December 27, 1993, by Alexander Haagen Properties Operating
	Partnership, L.P. to National Westminster Bank PLC, Capital
	Markets Branch, as agent, for the benefit of Merrill Lynch
	Global Allocation Fund, Inc., Merrill Lynch Special Value Fund,
	Inc., and Merrill Lynch Multinational Investment Portfolios
	Equity/ Convertible Series (Global Allocation Portfolio),
	incorporated herein by reference to Exhibit 10.27 to the
	1993 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Exhibit 10.16   |  | Stock Purchase Agreement by and among Prometheus
	Western Retail, LLC and LF Strategic Realty Investors, L.P. and
	Alexander Haagen Properties, Inc., dated as of June 1,
	1997, incorporated herein by reference to the Companys
	1997 Proxy Statement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Exhibit 10.17   |  | Stockholders Agreement by and among Lazard Freres
	Real Estate Investors, LLC, LF Strategic Realty Investors,
	L.P., Prometheus Western Realty Investors, LLC and Alexander
	Haagen Properties, Inc., dated as of June 1, 1997,
	incorporated herein by reference to the Companys 1997
	Proxy Statement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Exhibit 10.18   |  | Limited Standstill Waiver Letter by and among the
	Company, Prometheus Western Retail, LLC, Lazard Freres Real
	Estate Investors, LLC and LF Strategic Investors, LLC, dated as
	of March 12, 2001, incorporated herein by reference to
	Exhibit 99.2 of the Companys Form 8-K dated
	March 26, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Exhibit 10.19   |  | Separation Agreement and Release by and between
	Alexander Haagen, Sr., Alexander Haagen, III, Charlotte
	Haagen, Autumn Haagen, Alexander Haagen III & Betty Haagen
	Trust fbo Alexander Haagen IV UA 10/24/88, Alexander
	Haagen III & Betty Haagen Trust fbo Autumn Haagen
	UA 10/24/88, Alexander Haagen III & Betty Haagen
	Trust fbo Andrew Haagen UA 10/28/88, Haagen Living Trust
	dated August 17, 1988, as amended and restated as of
	April 18, 1996, Haagen Limited Partnership and Lazard
	Freres Real Estate Investors, LLC, LF Strategic Realty
	Investors, L.P., Prometheus Western Retail LLC, and Alexander
	Haagen Properties, Inc., Alexander Haagen Properties Operating
	Partnership, L.P. and Haagen Property Management, Inc., dated as
	of November 24, 1997, incorporated herein by reference to
	Exhibit No. 1 to Amendment #4 to the 13D filed by
	Prometheus Western Retail, LLC and LF Strategic Investors, L.P.
	dated as of December 5, 1997, incorporated herein by
	reference to Exhibit 10.34 to the Companys
	Form 10-K for the year ended December 31, 1997.
|Exhibit 10.20*  |  | Employment Agreement dated as of January 1,
	1999 between the Company, the Operating Partnership and
	Edward D. Fox, incorporated herein by reference to
	Exhibit 10.23 to the Companys 1999 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Exhibit 10.21*  |  | Employment Agreement dated as of January 1,
	1999 between the Company, the Operating Partnership and Stuart
	J.S. Gulland, incorporated herein by reference to
	Exhibit 10.24 to the Companys 1999 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Exhibit 10.22*  |  | Employment Agreement dated as of January 1,
	1999 between the Company, the Operating Partnership and
	Joseph F. Paggi, incorporated herein by reference to
	Exhibit 10.27 to the Companys 1999 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Exhibit 10.23** |  | Third Amended and Restated Loan Agreement between
	the Operating Partnership, the lenders party thereto and General
	Electric Capital Corporation, dated as of March 20, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Exhibit 10.24   |  | Agreement for Purchase and Sale of the Operating
	Partnership; Selected Portfolio dated as of July 17, 2000,
	and the first through fourth amendments thereto, each
	incorporated herein by reference to Exhibits 2.1 through
	2.5 of the Companys Form 8-K dated December 8,
	2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

56



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|               |  |                                          
|-------------- |  | -----------------------------------------
|Exhibit 21.1** |  | Subsidiaries of the Company.             
|Exhibit 23.1** |  | Consent of Deloitte & Touche LLP.        
|Exhibit 24     |  | Power of Attorney (included on page S-1).



---



|  |                                                              
|- | -------------------------------------------------------------
|* | Management contracts and compensation plans or
	arrangements.



|   |                
|-- | ---------------
|** | Filed herewith.

B.     Reports on
Form 8-K

On January 3, 2002, the Company filed a
report on form 8-K to announce the $68.7 million
long-term financing of six separate mortgages.

On November 13, 2001, the Company filed a
report on Form 8-K to make available additional financial
and operational information concerning the Company and
properties owned as of September 30, 2000

57



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Manhattan
Beach, State of California, on the 28th day of March, 2002.



| |                   
| | ------------------
| | CENTER TRUST, INC.



| |     |                  
| | --- | -----------------
| | By: | /s/ EDWARD D. FOX

| |                                       
| | --------------------------------------
| |                                       
| | Edward D. Fox                         
| | Chairman of the Board,                
| | Chief Executive Officer and
	President

KNOW ALL MEN BY THESE PRESENTS, that each person
signature appears below constitutes and appoints Eward D.
Fox and Stuart J.S. Gulland, such persons true and
lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and his name, place and
stead, in any and all capacities, to sign this Form 10-K,
and any and all amendments thereto, and to file the same, with
exhibits and schedules thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full
power to do and perform each and every act and thing necessary
or desirable to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact
and agents or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.

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

|                                           |  |                                                                                              |  |                |  | 
|------------------------------------------ |  | -------------------------------------------------------------------------------------------- |  | -------------- |  | 
|                                           |  |                                                                                              |  |               
|Signature                                  |  | Title                                                                                        |  | Date          
|                                           |  |                                                                                              |  |               
|                                          
|/s/ EDWARD D. FOXEdward D. Fox             |  | Chairman of the Board, Chief Executive Officer
	and President
	(Principal Executive Officer) |  | March 28, 2002
|                                          
|/s/ R. BRUCE ANDREWSR. Bruce Andrews       |  | Director                                                                                     |  | March 28, 2002
|                                          
|/s/ ROBERT BARNUMRobert Barnum             |  | Director                                                                                     |  | March 28, 2002
|                                          
|/s/ CHRISTINE GARVEYChristine Garvey       |  | Director                                                                                     |  | March 28, 2002
|                                          
|/s/ STUART J.S. GULLANDStuart J.S. Gulland |  | Director, Chief Operating Officer                                                            |  | March 28, 2002
|                                          
|/s/ SANDRA A. LAMBSandra A. Lamb           |  | Director                                                                                     |  | March 28, 2002
|                                          
|/s/ FRED L. REIDMANFred L. Reidman         |  | Director                                                                                     |  | March 28, 2002

S-1



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##### Table of Contents



|                                       |  |                                                                 |  |                |  | 
|-------------------------------------- |  | --------------------------------------------------------------- |  | -------------- |  | 
|                                       |  |                                                                 |  |               
|Signature                              |  | Title                                                           |  | Date          
|                                       |  |                                                                 |  |               
|                                      
|/s/ MARK TICOTINMark Ticotin           |  | Director                                                        |  | March 28, 2002
|                                      
|/s/ DOUGLAS N. WELLSDouglas N. Wells   |  | Director                                                        |  | March 28, 2002
|                                      
|/s/ EDWARD A. STOKXEdward A Stokx      |  | Senior Vice President of Finance (Principal
	Financial Officer) |  | March 28, 2002
|                                      
|/s/ SIDNEY M. SHIBATASidney M. Shibata |  | Controller (Principal Accounting Officer)                       |  | March 28, 2002

S-2