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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2008

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number: 1-07533





FEDERAL REALTY INVESTMENT TRUST

(Exact Name of Registrant as Specified in its
Declaration of Trust)







|                        |  |                                  
|----------------------- |  | ---------------------------------
|Maryland                |  | 52-0782497                       
|(State of Organization) |  | (IRS Employer Identification No.)



|                                                |  |           
|----------------------------------------------- |  | ----------
|1626 East Jefferson Street, Rockville, Maryland |  | 20852     
|(Address of Principal Executive Offices)        |  | (Zip Code)

(301) 998-8100

(Registrants Telephone Number, Including Area Code)





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

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions
of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                                                                       |  |                              |  |                     
|---------------------------------------------------------------------- |  | ---------------------------- |  | --------------------
|Large Accelerated Filer  x                                             |  |                              |  | Accelerated Filer   ̈
|Non-Accelerated Filer   ̈ (Do not check if a smaller reporting
company) |  | Smaller reporting company   ̈

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

The number of Registrants common shares outstanding on May 5, 2008 was 58,788,447.









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FEDERAL REALTY INVESTMENT TRUST

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED MARCH 31, 2008

TABLE OF CONTENTS



|           |  |                                                                                              |  |   
|---------- |  | -------------------------------------------------------------------------------------------- |  | --
|PART I.    |  | FINANCIAL INFORMATION                                                                        |  | 3 
|Item 1.    |  | Financial Statements                                                                         |  | 3 
|           |  | Consolidated Balance Sheets March 31, 2008 (unaudited) and December 31, 2007                 |  | 4 
|           |  | Consolidated Statements of Operations (unaudited) three months ended March 31, 2008 and 2007 |  | 5 
|           |  | Consolidated Statement of Shareholders Equity (unaudited) three months ended March 31, 2008 |  | 6 
|           |  | Consolidated Statements of Cash Flows (unaudited) three months ended March 31, 2008 and 2007 |  | 7 
|           |  | Notes to Consolidated Financial Statements (unaudited)                                       |  | 8 
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations        |  | 15
|Item 3.    |  | Quantitative and Qualitative Disclosures about Market Risk                                   |  | 26
|Item 4.    |  | Controls and Procedures                                                                      |  | 27
|           |  |                                                                                             
|PART II.   |  | OTHER INFORMATION                                                                            |  | 28
|Item 1.    |  | Legal Proceedings                                                                            |  | 28
|Item 1A.   |  | Risk Factors                                                                                 |  | 28
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds                                  |  | 29
|Item 3.    |  | Defaults Upon Senior Securities                                                              |  | 29
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                          |  | 29
|Item 5.    |  | Other Information                                                                            |  | 29
|Item 6.    |  | Exhibits                                                                                     |  | 29
|           | 
|SIGNATURES |  | 30                                                                                          



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PART 1FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

The following balance sheet
as of December 31, 2007, which has been derived from audited financial statements, and the unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles (GAAP) have been omitted pursuant to those rules and regulations, although the company believes
that the disclosures made are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the companys latest Annual Report
on Form 10-K. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation for the periods presented have been included. The results of operations for the three months ended
March 31, 2008 are not necessarily indicative of the results that may be expected for the full year.



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Federal Realty Investment Trust

Consolidated Balance Sheets



|                                                                                                                                                                                                          |  |                                   |           |   |                  |   |           |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------- | --------- | - | ---------------- | - | --------- | -
|                                                                                                                                                                                                          |  | March 31,2008                     |           |   | December 31,2007 |  
|                                                                                                                                                                                                          |  | (In thousands, except share data) |          
|                                                                                                                                                                                                          |  | (Unaudited)                       |           |   |                  |  
|ASSETS                                                                                                                                                                                                    |  |                                   |           |   |                  |   |           |  
|Real estate, at cost                                                                                                                                                                                      |  |                                   |           |   |                  |   |           |  
|Operating                                                                                                                                                                                                 |  | $                                 | 3,350,969 |   |                  | $ | 3,304,922 |  
|Construction-in-progress                                                                                                                                                                                  |  |                                   | 143,834   |   |                  |   | 147,925   |  
|                                                                                                                                                                                                          |  |                                   |           |   |                  |   |           |  
|                                                                                                                                                                                                          |  |                                   | 3,494,803 |   |                  |   | 3,452,847 |  
|Less accumulated depreciation and amortization                                                                                                                                                            |  |                                   | (778,805  | ) |                  |   | (756,703  | )
|                                                                                                                                                                                                          |  |                                   |           |   |                  |   |           |  
|Net real estate                                                                                                                                                                                           |  |                                   | 2,715,998 |   |                  |   | 2,696,144 |  
|Cash and cash equivalents                                                                                                                                                                                 |  |                                   | 27,654    |   |                  |   | 50,691    |  
|Accounts and notes receivable                                                                                                                                                                             |  |                                   | 64,588    |   |                  |   | 61,108    |  
|Mortgage notes receivable                                                                                                                                                                                 |  |                                   | 40,698    |   |                  |   | 40,638    |  
|Investment in real estate partnership                                                                                                                                                                     |  |                                   | 29,551    |   |                  |   | 29,646    |  
|Prepaid expenses and other assets                                                                                                                                                                         |  |                                   | 93,626    |   |                  |   | 103,620   |  
|Debt issuance costs, net of accumulated amortization of $5,254 and $4,815, respectively                                                                                                                   |  |                                   | 7,015     |   |                  |   | 7,450     |  
|                                                                                                                                                                                                          |  |                                   |           |   |                  |   |           |  
|TOTAL ASSETS                                                                                                                                                                                              |  | $                                 | 2,979,130 |   |                  | $ | 2,989,297 |  
|                                                                                                                                                                                                          |  |                                   |           |   |                  |   |           |  
|                                                                                                                                                                                                          |  |                                  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                                      |  |                                   |           |   |                  |   |           |  
|Liabilities                                                                                                                                                                                               |  |                                   |           |   |                  |   |           |  
|Mortgages payable                                                                                                                                                                                         |  | $                                 | 372,333   |   |                  | $ | 373,975   |  
|Capital lease obligations                                                                                                                                                                                 |  |                                   | 75,845    |   |                  |   | 76,109    |  
|Notes payable                                                                                                                                                                                             |  |                                   | 210,766   |   |                  |   | 210,820   |  
|Senior notes and debentures                                                                                                                                                                               |  |                                   | 977,513   |   |                  |   | 977,556   |  
|Accounts payable and accrued expenses                                                                                                                                                                     |  |                                   | 95,757    |   |                  |   | 99,360    |  
|Dividends payable                                                                                                                                                                                         |  |                                   | 36,219    |   |                  |   | 36,142    |  
|Security deposits payable                                                                                                                                                                                 |  |                                   | 10,731    |   |                  |   | 10,703    |  
|Other liabilities and deferred credits                                                                                                                                                                    |  |                                   | 55,197    |   |                  |   | 58,182    |  
|                                                                                                                                                                                                          |  |                                   |           |   |                  |   |           |  
|Total liabilities                                                                                                                                                                                         |  |                                   | 1,834,361 |   |                  |   | 1,842,847 |  
|Minority interests                                                                                                                                                                                        |  |                                   | 32,280    |   |                  |   | 31,818    |  
|Commitments and contingencies (Note E)                                                                                                                                                                    |  |                                   |           |   |                  |   |           |  
|Shareholders equity                                                                                                                                                                                      |  |                                   |           |   |                  |   |           |  
|Preferred stock, authorized 15,000,000 shares, $.01 par: 5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation
preference $25 per share), 399,896 shares issued and outstanding |  |                                   | 9,997     |   |                  |   | 9,997     |  
|Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 60,268,689 and 60,133,270 issued, respectively                                                                             |  |                                   | 603       |   |                  |   | 601       |  
|Additional paid-in capital                                                                                                                                                                                |  |                                   | 1,545,304 |   |                  |   | 1,541,020 |  
|Accumulated dividends in excess of net income                                                                                                                                                             |  |                                   | (413,376  | ) |                  |   | (407,376  | )
|Treasury shares at cost, 1,487,905 and 1,487,605 shares, respectively                                                                                                                                     |  |                                   | (28,807   | ) |                  |   | (28,807   | )
|Notes receivable from issuance of common shares                                                                                                                                                           |  |                                   | (692      | ) |                  |   | (803      | )
|Accumulated other comprehensive loss                                                                                                                                                                      |  |                                   | (540      | ) |                  |   |          |  
|                                                                                                                                                                                                          |  |                                   |           |   |                  |   |           |  
|Total shareholders equity                                                                                                                                                                                |  |                                   | 1,112,489 |   |                  |   | 1,114,632 |  
|                                                                                                                                                                                                          |  |                                   |           |   |                  |   |           |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                                |  | $                                 | 2,979,130 |   |                  | $ | 2,989,297 |  
|                                                                                                                                                                                                          |  |                                   |           |   |                  |   |           |  

The accompanying notes are integral part of these consolidated statements.



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Federal Realty Investment Trust

Consolidated Statements of Operations

(Unaudited)



|                                                            |  |                                       |         |   |      |   |         |  
|----------------------------------------------------------- |  | ------------------------------------- | ------- | - | ---- | - | ------- | -
|                                                            |  | Three Months EndedMarch 31,           |        
|                                                            |  | 2008                                  |         |   | 2007 |  
|                                                            |  | (In thousands, except per share data) |        
|REVENUE                                                     |  |                                       |         |   |      |   |         |  
|Rental income                                               |  | $                                     | 122,721 |   |      | $ | 111,763 |  
|Other property income                                       |  |                                       | 3,386   |   |      |   | 2,370   |  
|Mortgage interest income                                    |  |                                       | 1,116   |   |      |   | 1,130   |  
|                                                            |  |                                       |         |   |      |   |         |  
|Total revenue                                               |  |                                       | 127,223 |   |      |   | 115,263 |  
|                                                            |  |                                       |         |   |      |   |         |  
|EXPENSES                                                    |  |                                       |         |   |      |   |         |  
|Rental expenses                                             |  |                                       | 27,327  |   |      |   | 24,298  |  
|Real estate taxes                                           |  |                                       | 12,563  |   |      |   | 10,568  |  
|General and administrative                                  |  |                                       | 6,934   |   |      |   | 5,608   |  
|Depreciation and amortization                               |  |                                       | 25,400  |   |      |   | 24,912  |  
|                                                            |  |                                       |         |   |      |   |         |  
|Total operating expenses                                    |  |                                       | 72,224  |   |      |   | 65,386  |  
|                                                            |  |                                       |         |   |      |   |         |  
|OPERATING INCOME                                            |  |                                       | 54,999  |   |      |   | 49,877  |  
|Other interest income                                       |  |                                       | 341     |   |      |   | 225     |  
|Interest expense                                            |  |                                       | (24,353 | ) |      |   | (27,337 | )
|Income from real estate partnership                         |  |                                       | 331     |   |      |   | 284     |  
|                                                            |  |                                       |         |   |      |   |         |  
|INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTERESTS |  |                                       | 31,318  |   |      |   | 23,049  |  
|Minority interests                                          |  |                                       | (1,332  | ) |      |   | (1,296  | )
|                                                            |  |                                       |         |   |      |   |         |  
|INCOME FROM CONTINUING OPERATIONS                           |  |                                       | 29,986  |   |      |   | 21,753  |  
|DISCONTINUED OPERATIONS                                     |  |                                       |         |   |      |   |         |  
|Income from discontinued operations                         |  |                                       |        |   |      |   | 1,383   |  
|                                                            |  |                                       |         |   |      |   |         |  
|Results from discontinued operations                        |  |                                       |        |   |      |   | 1,383   |  
|                                                            |  |                                       |         |   |      |   |         |  
|NET INCOME                                                  |  |                                       | 29,986  |   |      |   | 23,136  |  
|Dividends on preferred stock                                |  |                                       | (135    | ) |      |   | (36     | )
|                                                            |  |                                       |         |   |      |   |         |  
|NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS                |  | $                                     | 29,851  |   |      | $ | 23,100  |  
|                                                            |  |                                       |         |   |      |   |         |  
|EARNINGS PER COMMON SHARE, BASIC                            |  |                                       |         |   |      |   |         |  
|Continuing operations                                       |  | $                                     | 0.51    |   |      | $ | 0.39    |  
|Discontinued operations                                     |  |                                       |        |   |      |   | 0.03    |  
|                                                            |  |                                       |         |   |      |   |         |  
|                                                            |  | $                                     | 0.51    |   |      | $ | 0.42    |  
|                                                            |  |                                       |         |   |      |   |         |  
|EARNINGS PER COMMON SHARE, DILUTED                          |  |                                       |         |   |      |   |         |  
|Continuing operations                                       |  | $                                     | 0.51    |   |      | $ | 0.39    |  
|Discontinued operations                                     |  |                                       |        |   |      |   | 0.02    |  
|                                                            |  |                                       |         |   |      |   |         |  
|                                                            |  | $                                     | 0.51    |   |      | $ | 0.41    |  
|                                                            |  |                                       |         |   |      |   |         |  

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



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Federal Realty Investment Trust

Consolidated Statement of Shareholders Equity

(Unaudited)



|                                               |  |                                           |  |               |       |        |            |                 |   |                          |  |                                            |           |  |        |          |   |  |            |   |                                                   |   |         |                                   |  |   |                          |   |  |   |      |   |  |   |           |  
|---------------------------------------------- |  | ----------------------------------------- |  | ------------- | ----- | ------ | ---------- | --------------- | - | ------------------------ |  | ------------------------------------------ | --------- |  | ------ | -------- | - |  | ---------- | - | ------------------------------------------------- | - | ------- | --------------------------------- |  | - | ------------------------ | - |  | - | ---- | - |  | - | --------- | -
|                                               |  | For the Three Months Ended March 31, 2008 | 
|                                               |  |                                           |  |               |       |        |            |                 |   | AdditionalPaid-inCapital |  | AccumulatedDividends inExcess of NetIncome |           |  |        |          |   |  |            |   | Notes Receivablefrom the Issuance ofCommon Shares |   |         | AccumulatedOtherComprehensiveLoss |  |   | TotalShareholdersEquity |  
|                                               |  | Preferred Stock                           |  | Common Shares |       |        |            | Treasury Shares |   |                          |  |                                           
|                                               |  | Shares                                    |  | Amount        |       | Shares |            | Amount          |   |                          |  | Shares                                     |           |  | Amount |          |   |  |           
|                                               |  | (In thousands, except share data)         | 
|BALANCE AT DECEMBER 31, 2007                   |  | 399,896                                   |  | $             | 9,997 |        | 60,133,270 |                 | $ | 601                      |  | $                                          | 1,541,020 |  | $      | (407,376 | ) |  | (1,487,605 | ) |                                                   | $ | (28,807 | )                                 |  | $ | (803                     | ) |  | $ |     |   |  | $ | 1,114,632 |  
|Comprehensive income:                          |  |                                           |  |               |       |        |            |                 |   |                          |  |                                            |           |  |        |          |   |  |            |   |                                                   |   |         |                                   |  |   |                          |   |  |   |      |   |  |   |           |  
|Net income                                     |  |                                          |  |               |      |        |           |                 |   |                         |  |                                            |          |  |        | 29,986   |   |  |           |   |                                                   |   |        |                                   |  |   |                         |   |  |   |     |   |  |   | 29,986    |  
|Change in valuation of interest rate swaps     |  |                                          |  |               |      |        |           |                 |   |                         |  |                                            |          |  |        |          |   |  |           |   |                                                   |   |        |                                   |  |   |                         |   |  |   | (540 | ) |  |   | (540      | )
|                                               |  |                                           |  |               |       |        |            |                 |   |                          |  |                                            |           |  |        |          |   |  |            |   |                                                   |   |         |                                   |  |   |                          |   |  |   |      |   |  |   |           |  
|Total comprehensive income                     |  |                                          |  |               |      |        |           |                 |   |                         |  |                                            |          |  |        |          |   |  |           |   |                                                   |   |        |                                   |  |   |                         |   |  |   |     |   |  |   | 29,446    |  
|Dividends declared to common shareholders      |  |                                          |  |               |      |        |           |                 |   |                         |  |                                            |          |  |        | (35,851  | ) |  |           |   |                                                   |   |        |                                   |  |   |                         |   |  |   |     |   |  |   | (35,851   | )
|Dividends declared to preferred shareholders   |  |                                          |  |               |      |        |           |                 |   |                         |  |                                            |          |  |        | (135     | ) |  |           |   |                                                   |   |        |                                   |  |   |                         |   |  |   |     |   |  |   | (135      | )
|Common shares issued                           |  |                                          |  |               |      |        | 63         |                 |   |                         |  |                                            | 5         |  |        |         |   |  |           |   |                                                   |   |        |                                   |  |   |                         |   |  |   |     |   |  |   | 5         |  
|Exercise of stock options                      |  |                                          |  |               |      |        | 27,834     |                 |   |                         |  |                                            | 1,423     |  |        |         |   |  |           |   |                                                   |   |        |                                   |  |   |                         |   |  |   |     |   |  |   | 1,423     |  
|Shares issued under dividend reinvestment plan |  |                                          |  |               |      |        | 9,793      |                 |   |                         |  |                                            | 689       |  |        |         |   |  |           |   |                                                   |   |        |                                   |  |   |                         |   |  |   |     |   |  |   | 689       |  
|Share-based compensation expense               |  |                                          |  |               |      |        | 97,729     |                 |   | 2                        |  |                                            | 2,167     |  |        |         |   |  |           |   |                                                   |   |        |                                   |  |   |                         |   |  |   |     |   |  |   | 2,169     |  
|Unvested shares forfeited                      |  |                                          |  |               |      |        |           |                 |   |                         |  |                                            |          |  |        |         |   |  | (300       | ) |                                                   |   |        |                                   |  |   |                         |   |  |   |     |   |  |   |          |  
|Loans paid                                     |  |                                          |  |               |      |        |           |                 |   |                         |  |                                            |          |  |        |         |   |  |           |   |                                                   |   |        |                                   |  |   | 111                      |   |  |   |      |   |  |   | 111       |  
|                                               |  |                                           |  |               |       |        |            |                 |   |                          |  |                                            |           |  |        |          |   |  |            |   |                                                   |   |         |                                   |  |   |                          |   |  |   |      |   |  |   |           |  
|BALANCE AT MARCH 31, 2008                      |  | 399,896                                   |  | $             | 9,997 |        | 60,268,689 |                 | $ | 603                      |  | $                                          | 1,545,304 |  | $      | (413,376 | ) |  | (1,487,905 | ) |                                                   | $ | (28,807 | )                                 |  | $ | (692                     | ) |  | $ | (540 | ) |  | $ | 1,112,489 |  
|                                               |  |                                           |  |               |       |        |            |                 |   |                          |  |                                            |           |  |        |          |   |  |            |   |                                                   |   |         |                                   |  |   |                          |   |  |   |      |   |  |   |           |  

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



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Federal Realty Investment Trust

Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                   |  |                             |         |   |      |   |         |  
|---------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                   |  | Three Months EndedMarch 31, |        
|                                                                                   |  | 2008                        |         |   | 2007 |  
|                                                                                   |  | (In thousands)              |        
|OPERATING ACTIVITIES                                                               |  |                             |         |   |      |   |         |  
|Net income                                                                         |  | $                           | 29,986  |   |      | $ | 23,136  |  
|Adjustment to reconcile net income to net cash provided by operating activities    |  |                             |         |   |      |   |         |  
|Depreciation and amortization, including discontinued operations                   |  |                             | 25,400  |   |      |   | 26,484  |  
|Income from real estate partnership                                                |  |                             | (331    | ) |      |   | (284    | )
|Minority interests                                                                 |  |                             | 1,332   |   |      |   | 1,296   |  
|Other, net                                                                         |  |                             | 192     |   |      |   | (600    | )
|Changes in assets and liabilities net of effects of acquisitions and dispositions: |  |                             |         |   |      |   |         |  
|Increase in accounts receivable                                                    |  |                             | (1,131  | ) |      |   | (1,588  | )
|Decrease in prepaid expenses and other assets                                      |  |                             | 3,366   |   |      |   | 3,074   |  
|(Decrease) increase in accounts payable and accrued expenses                       |  |                             | (4,618  | ) |      |   | 2,706   |  
|(Decrease) increase in security deposits and other liabilities                     |  |                             | (1,776  | ) |      |   | 1,461   |  
|                                                                                   |  |                             |         |   |      |   |         |  
|Net cash provided by operating activities                                          |  |                             | 52,420  |   |      |   | 55,685  |  
|INVESTING ACTIVITIES                                                               |  |                             |         |   |      |   |         |  
|Acquisition of real estate                                                         |  |                             |        |   |      |   | (24,593 | )
|Capital expendituresdevelopment and redevelopment                                 |  |                             | (28,388 | ) |      |   | (25,983 | )
|Capital expendituresother                                                         |  |                             | (7,842  | ) |      |   | (4,603  | )
|Investment in real estate partnership                                              |  |                             |        |   |      |   | (21,628 | )
|Distribution from real estate partnership in excess of earnings                    |  |                             | 95      |   |      |   | 156     |  
|Leasing costs                                                                      |  |                             | (1,996  | ) |      |   | (2,118  | )
|(Issuance) repayment of mortgage and other notes receivable, net                   |  |                             | (684    | ) |      |   | 175     |  
|                                                                                   |  |                             |         |   |      |   |         |  
|Net cash used in investing activities                                              |  |                             | (38,815 | ) |      |   | (78,594 | )
|FINANCING ACTIVITIES                                                               |  |                             |         |   |      |   |         |  
|Net borrowings under revolving credit facility, net of costs                       |  |                             |        |   |      |   | 59,500  |  
|Repayment of mortgages, capital leases and notes payable                           |  |                             | (2,039  | ) |      |   | (1,719  | )
|Issuance of common shares                                                          |  |                             | 2,228   |   |      |   | 2,469   |  
|Dividends paid to common and preferred shareholders                                |  |                             | (35,909 | ) |      |   | (31,810 | )
|Distributions to minority interests                                                |  |                             | (922    | ) |      |   | (1,039  | )
|                                                                                   |  |                             |         |   |      |   |         |  
|Net cash (used in) provided by financing activities                                |  |                             | (36,642 | ) |      |   | 27,401  |  
|                                                                                   |  |                             |         |   |      |   |         |  
|(Decrease) increase in cash and cash equivalents                                   |  |                             | (23,037 | ) |      |   | 4,492   |  
|Cash and cash equivalents at beginning of year                                     |  |                             | 50,691  |   |      |   | 11,495  |  
|                                                                                   |  |                             |         |   |      |   |         |  
|Cash and cash equivalents at end of period                                         |  | $                           | 27,654  |   |      | $ | 15,987  |  
|                                                                                   |  |                             |         |   |      |   |         |  

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



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Federal Realty Investment Trust

Notes to Consolidated Financial Statements

March 31, 2008

(Unaudited)

NOTE ASUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

Business and Organization

Federal Realty Investment Trust (the Trust) is an equity real estate investment trust specializing in the ownership, management, development and redevelopment of retail and mixed-use properties. Our properties are located
primarily in densely populated and affluent communities in strategically selected metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, as well as in California. As of March 31, 2008, we owned or had a majority
interest in community and neighborhood shopping centers and mixed-use properties which are operated as 82 predominantly retail real estate projects.

We
operate in a manner intended to enable us to qualify as a real estate investment trust (or REIT) for federal income tax purposes. A REIT that distributes at least 90% of its REIT taxable income to its shareholders each year and meets certain other
conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, federal income taxes on our REIT taxable income have been and are generally expected to be immaterial. We are obligated to pay state
taxes, generally consisting of franchise or gross receipts taxes in certain states. Such state taxes also have not been material.

We have elected to treat
certain of our subsidiaries as taxable REIT subsidiaries, which we refer to as a TRS. In general, a TRS may engage in any real estate business and certain non-real estate businesses, subject to certain limitations under the Internal Revenue Code of
1986, as amended (the Code). A TRS is subject to federal and state income taxes. The sales of condominiums at Santana Row, which occurred between August 2005 and August 2006, and the sales of Bath Shopping Center, Key Road Plaza and
Riverside Plaza in 2007 were conducted through a TRS. Other than these sales, our TRS activities have not been material.

Basis of Presentation

Our consolidated financial statements include the accounts of the Trust, its corporate subsidiaries, and all entities in which the Trust has a controlling
interest or has been determined to be the primary beneficiary of a variable interest entity. The equity interests of other investors are reflected as minority interests. All significant intercompany transactions and balances are eliminated in
consolidation. We account for our interests in joint ventures, which we do not control or manage, using the equity method of accounting. Certain amounts in the 2007 consolidated financial statements have been reclassified to conform to current
period presentation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America,
referred to as GAAP, requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses.
These estimates are prepared using managements best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates.



8



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Consolidated Statements of Cash FlowsSupplemental Disclosures

The following table provides supplemental disclosures related to the Consolidated Statements of Cash Flows:



|                                                             |  |                              |        |   |      |   |        |  
|------------------------------------------------------------ |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                                             |  | Three Months Ended March 31, |       
|                                                             |  | 2008                         |        |   | 2007 |  
|                                                             |  | (In thousands)               |       
|SUPPLEMENTAL DISCLOSURES:                                    |  |                              |        |   |      |   |        |  
|Total interest costs incurred                                |  | $                            | 26,143 |   |      | $ | 31,416 |  
|Interest capitalized                                         |  |                              | (1,790 | ) |      |   | (1,933 | )
|Interest expense related to discontinued operations          |  |                              |       |   |      |   | (2,146 | )
|                                                             |  |                              |        |   |      |   |        |  
|Interest expense                                             |  | $                            | 24,353 |   |      | $ | 27,337 |  
|                                                             |  |                              |        |   |      |   |        |  
|Cash paid for interest, net of amounts capitalized           |  | $                            | 24,027 |   |      | $ | 23,863 |  
|                                                             |  |                              |        |   |      |   |        |  
|Cash paid for income taxes                                   |  | $                            | 100    |   |      | $ | 875    |  
|                                                             |  |                              |        |   |      |   |        |  
|NON-CASH FINANCING AND INVESTING TRANSACTIONS:               |  |                              |        |   |      |   |        |  
|Change in valuation of interest rate swap                    |  | $                            | (540   | ) |      | $ |       |  
|Mortgage loans assumed with acquisition                      |  | $                            |       |   |      | $ | 73,979 |  
|Common shares issued with acquisition                        |  | $                            |       |   |      | $ | 77,957 |  
|Preferred shares issued with acquisition                     |  | $                            |       |   |      | $ | 9,997  |  
|DownREIT operating partnership units issued with acquisition |  | $                            |       |   |      | $ | 16,358 |  

New Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157 Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies to accounting pronouncements that require or permit fair value measurements, except for share-based payments under SFAS
No. 123(R). We adopted the recognition and disclosure provisions of SFAS No. 157 for financial assets and financial liabilities and for nonfinancial assets and nonfinancial liabilities that are re-measured at least annually effective
January 1, 2008; the adoption did not have a material impact on our financial position, results of operations or cash flows. We are required to adopt the provisions of SFAS No. 157 for all other nonfinancial assets and nonfinancial
liabilities effective January 1, 2009 and do not expect the adoption to have a material impact on our financial position, results of operations or cash flows.

SFAS 157 establishes a hierarchy for inputs used in measuring fair value as follows:



| | 1. | Level 1 Inputs  quoted prices in active markets for identical assets or liabilities
| | -- | ------------------------------------------------------------------------------------

| | 2. | Level 2 Inputs  observable inputs other than quoted prices in active markets for identical assets and liabilities
| | -- | ------------------------------------------------------------------------------------------------------------------

| | 3. | Level 3 Inputs  unobservable inputs
| | -- | ------------------------------------

In certain cases, the inputs
used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to
the fair value measurement. Our derivative instruments, as further discussed in Note D, are measured using Level 2 inputs.

In February 2007, the
FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115 (SFAS No. 159). This standard permits entities to choose to
measure many financial instruments and certain other items at fair value and is effective for the first fiscal year beginning after November 15, 2007. We did not make this fair value election when we adopted SFAS No. 159 effective
January 1, 2008, and, therefore, it did not have an impact on our financial position, results of operations, or cash flows.

In March 2008, the
FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (SFAS No. 161). SFAS No. 161 requires enhanced disclosures about an
entitys derivative instruments and hedging activities and is effective for fiscal years beginning after November 15, 2008. We do not expect the adoption of SFAS No. 161 to have a material impact on our consolidated financial
statements.

NOTE BREAL ESTATE

During the three
months ended March 31, 2008, we had no acquisitions or dispositions.

The revenues from all properties included in discontinued operations were $0 and
$7.7 million for the three months ended March 31, 2008 and 2007, respectively.

NOTE CREAL ESTATE PARTNERSHIP

We have a joint venture arrangement (the Partnership) with affiliates of a discretionary fund created and advised by ING Clarion (Clarion). We own
30% of the equity in the Partnership, and Clarion owns 70%. We are the manager of the Partnership and its properties, earning fees for acquisitions, dispositions, management, leasing, and financing. We also have the opportunity to receive
performance-based earnings through our Partnership interest. We account for our interest in the Partnership using the equity method.



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The following tables provide summarized operating results and the financial position of the Partnership:



|                                                     |  |                             |       |      |   |      
|---------------------------------------------------- |  | --------------------------- | ----- | ---- | - | -----
|                                                     |  | Three Months EndedMarch 31,
|                                                     |  | 2008                        |       | 2007
|                                                     |  | (In thousands)             
|OPERATING RESULTS                                    |  |                             |       |      |   |      
|Revenue                                              |  | $                           | 4,680 |      | $ | 3,531
|Expenses                                             |  |                             |       |      |   |      
|Other operating expenses                             |  |                             | 1,339 |      |   | 905  
|Depreciation and amortization                        |  |                             | 1,185 |      |   | 975  
|Interest expense                                     |  |                             | 1,135 |      |   | 1,074
|                                                     |  |                             |       |      |   |      
|Total expenses                                       |  |                             | 3,659 |      |   | 2,954
|                                                     |  |                             |       |      |   |      
|Net income                                           |  | $                           | 1,021 |      | $ | 577  
|                                                     |  |                             |       |      |   |      
|Our share of net income from real estate partnership |  | $                           | 331   |      | $ | 284  
|                                                     |  |                             |       |      |   |      



|                                          |  |                |         |                  |   |        
|----------------------------------------- |  | -------------- | ------- | ---------------- | - | -------
|                                          |  | March 31,2008  |         | December 31,2007
|                                          |  | (In thousands)
|BALANCE SHEETS                            |  |                |         |                  |   |        
|Real estate, net                          |  | $              | 190,747 |                  | $ | 191,747
|Cash                                      |  |                | 1,869   |                  |   | 1,453  
|Other assets                              |  |                | 6,813   |                  |   | 7,173  
|                                          |  |                |         |                  |   |        
|Total assets                              |  | $              | 199,429 |                  | $ | 200,373
|                                          |  |                |         |                  |   |        
|Mortgages payable                         |  | $              | 81,497  |                  | $ | 81,540 
|Other liabilities                         |  |                | 7,963   |                  |   | 8,691  
|Partners capital                         |  |                | 109,969 |                  |   | 110,142
|                                          |  |                |         |                  |   |        
|Total liabilities and partners capital   |  | $              | 199,429 |                  | $ | 200,373
|                                          |  |                |         |                  |   |        
|Our share of unconsolidated debt          |  | $              | 24,449  |                  | $ | 24,462 
|                                          |  |                |         |                  |   |        
|Our investment in real estate partnership |  | $              | 29,551  |                  | $ | 29,646 
|                                          |  |                |         |                  |   |        

NOTE DDEBT

We use derivative instruments to manage exposure to variable interest rate risk. We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk of interest rates
rising prior to the issuance of debt. We enter into derivative instruments that qualify as cash flow hedges under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities and do not enter into derivative
instruments for speculative purposes.

On February 21, 2008, we entered into two interest rate swap agreements to fix the variable portion of our $200
million term note through November 6, 2008. The first swap fixed the variable rate at 2.725% on a notional amount of $100 million and the second swap fixed the variable rate at 2.852% on a notional amount of $100 million for a combined fixed
rate of 2.789%. Both swaps were designated and qualified as cash flow hedges and are recorded at fair value.

We assess effectiveness of our cash flow
hedges both at inception and on an ongoing basis. The effective portion of changes in fair value of our cash flow hedges is recorded in other comprehensive income, and the ineffective portion of changes in the fair value of our cash flow hedges is
recognized in earnings in the period affected. Hedge ineffectiveness did not have an impact on earnings for the three months ended March 31, 2008. The change in fair value of these swaps from inception through March 31, 2008 is a liability
of $0.5 million, which is included in accounts payable and accrued expenses on the balance sheet and accumulated other comprehensive loss in the statement of shareholders equity. The fair value of the interest rate swap agreements are based
upon the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate market pricing models and observable inputs. Amounts reported in accumulated other comprehensive loss will be
reclassified to interest expense as interest payments are made on the variable rate debt through the termination date of November 6, 2008.



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During the three months ended March 31, 2008, the maximum amount of borrowings outstanding under our $300 million
revolving credit facility was $7.0 million. The weighted average amount of borrowings outstanding was $0.8 million for the three months ended March 31, 2008. Our revolving credit facility had a weighted average interest rate, before
amortization of debt fees, of 4.44% for the three months ended March 31, 2008.

Our credit facility and certain notes require us to comply with
various financial covenants, including the maintenance of minimum shareholders equity and debt coverage ratios and a maximum ratio of debt to net worth. As of March 31, 2008, we were in compliance with all loan covenants.

NOTE ECOMMITMENTS AND CONTINGENCIES

We are currently a party
to various legal proceedings. Other than as described below, we do not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on our financial position or overall trends in
results of operations; however, litigation is subject to inherent uncertainties. Also under our leases, tenants are typically obligated to indemnify us from and against all liabilities, costs and expenses imposed upon or asserted against us
(1) as owner of the properties due to certain matters relating to the operation of the properties by the tenant, and (2) where appropriate, due to certain matters relating to the ownership of the properties prior to their acquisition by
us.

We have a litigation matter filed against us in May 2003 which alleges that a one page document entitled Final Proposal, which included
language that it was subject to approval of formal documentation, constituted a ground lease of a parcel of property located adjacent to our Santana Row property and gave the plaintiff the option to require that we acquire the property at a price
determined in accordance with a formula included in the Final Proposal. A trial as to liability only was held in June 2006 and a jury rendered a verdict against us. A trial on the issue of damages was held in April 2008; however, the
judge has not yet issued a ruling. Reports from our experts and the plaintiffs experts show potential damages ranging from $600,000 to $24 million. Pending the judges ruling, we cannot make a reasonable estimate of potential damages. We
intend to appeal the jury verdict; however, no appeal of the judgment can be taken until the judge issues his ruling on damages. If we are not successful in overturning the jury verdict, we will be liable for damages. Depending on the amount of
damages awarded, it is possible there could be a material adverse impact on our net income in the period in which it becomes both probable that we will have to pay the damages and such damages can be reasonably estimated. In any event, management
does not believe it will have a material impact on our financial position.

We are also involved in a litigation matter relating to a shopping center in
New Jersey where a former tenant has alleged that we and our management agent acted improperly by failing to disclose a condemnation action at the property that was pending when the lease was signed. A trial as to liability only has been concluded
and post-trial briefs have been filed, but no decision has been rendered. One of the plaintiffs in the matter has filed for bankruptcy protection and as a result, the judge in our case has stayed further proceedings in the case. If we are found
liable once the stay has been lifted, a trial will be held to determine the amount of damages. Based on the information available to us, we believe there is a reasonable possibility that we will be found liable. If a verdict is rendered against us,
we may seek indemnification from the third party management company that negotiated the lease on our behalf. We cannot assess with any certainty at this time the potential damages for which we would be liable if a verdict is rendered against us or
the potential amounts we might recover against the third party management company; however, if a verdict is rendered against us, there may be a material adverse impact on our net income in the period in which it becomes both probable that we will
have to pay the damages and such damages can be reasonably estimated. In any event, management does not believe it will have a material impact on our financial position.

NOTE FSHAREHOLDERS EQUITY

The following table provides a summary of dividends declared and paid per
share:



|                                                 |  |                              |       |      |   |          |  |   |       |     |  |   |      
|------------------------------------------------ |  | ---------------------------- | ----- | ---- | - | -------- |  | - | ----- | --- |  | - | -----
|                                                 |  | Three Months Ended March 31,
|                                                 |  | 2008                         |       | 2007
|                                                 |  | Declared                     |       | Paid |   | Declared |  |   | Paid 
|Common shares                                    |  | $                            | 0.610 |      | $ | 0.610    |  | $ | 0.575 |     |  | $ | 0.575
|5.417% Series 1 Cumulative Convertible Preferred |  | $                            | 0.339 |      | $ | 0.339    |  | $ | 0.090 | (1) |  | $ |     



|(1) | The Series 1 Preferred Shares were issued on March 8, 2007. The dividend declared on the Series 1 Preferred Shares is for the period from March 8, 2007 through and
including March 31, 2007.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

NOTE GCOMPONENTS OF RENTAL INCOME

The principal components of rental income are as follows:



|                      |  |                             |         |      |   |        
|--------------------- |  | --------------------------- | ------- | ---- | - | -------
|                      |  | Three Months EndedMarch 31,
|                      |  | 2008                        |         | 2007
|                      |  | (In thousands)             
|Minimum rents         |  |                             |         |      |   |        
|Retail and commercial |  | $                           | 90,287  |      | $ | 82,917 
|Residential           |  |                             | 4,013   |      |   | 3,610  
|Cost reimbursement    |  |                             | 24,744  |      |   | 22,024 
|Percentage rent       |  |                             | 2,378   |      |   | 1,923  
|Other                 |  |                             | 1,299   |      |   | 1,289  
|                      |  |                             |         |      |   |        
|Total rental income   |  | $                           | 122,721 |      | $ | 111,763
|                      |  |                             |         |      |   |        

Minimum rents include $1.6 million and $1.7 million for the three months ended March 31, 2008 and 2007,
respectively, to recognize minimum rents on a straight-line basis. In addition, minimum rents include $0.6 million and $0.8 million for the three months ended March 31, 2008 and 2007, respectively, to recognize income from the amortization of
in-place leases in accordance with SFAS No. 141. Residential minimum rents consist of the rental amounts at Rollingwood Apartments, the Crest at Congressional Plaza Apartments and residential rental units at Santana Row.

NOTE HSHARE-BASED COMPENSATION PLANS

A summary of share-based
compensation expense included in net income is as follows:



|                                     |  |                             |       |   |      |   |       |  
|------------------------------------ |  | --------------------------- | ----- | - | ---- | - | ----- | -
|                                     |  | Three Months EndedMarch 31, |      
|                                     |  | 2008                        |       |   | 2007 |  
|                                     |  | (In thousands)              |      
|Share-based compensation incurred    |  |                             |       |   |      |   |       |  
|Grants of common shares              |  | $                           | 1,846 |   |      | $ | 1,574 |  
|Grants of options                    |  |                             | 323   |   |      |   | 249   |  
|                                     |  |                             |       |   |      |   |       |  
|                                     |  |                             | 2,169 |   |      |   | 1,823 |  
|Capitalized share-based compensation |  |                             | (297  | ) |      |   | (202  | )
|                                     |  |                             |       |   |      |   |       |  
|Share-based compensation expensed    |  | $                           | 1,872 |   |      | $ | 1,621 |  
|                                     |  |                             |       |   |      |   |       |  



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NOTE IEARNINGS PER SHARE

The following table provides a reconciliation between basic and diluted earnings per share:



|                                                                    |  |                                      |        |   |      |   |        |  
|------------------------------------------------------------------- |  | ------------------------------------ | ------ | - | ---- | - | ------ | -
|                                                                    |  | Three Months EndedMarch 31,          |       
|                                                                    |  | 2008                                 |        |   | 2007 |  
|                                                                    |  | (In thousands, exceptper share data) |       
|NUMERATOR                                                           |  |                                      |        |   |      |   |        |  
|Income from continuing operations                                   |  | $                                    | 29,986 |   |      | $ | 21,753 |  
|Preferred stock dividends                                           |  |                                      | (135   | ) |      |   | (36    | )
|                                                                    |  |                                      |        |   |      |   |        |  
|Income from continuing operations available for common shareholders |  |                                      | 29,851 |   |      |   | 21,717 |  
|Results from discontinued operations                                |  |                                      |       |   |      |   | 1,383  |  
|                                                                    |  |                                      |        |   |      |   |        |  
|Net income available for common shareholders, basic and diluted     |  | $                                    | 29,851 |   |      | $ | 23,100 |  
|                                                                    |  |                                      |        |   |      |   |        |  
|DENOMINATOR                                                         |  |                                      |        |   |      |   |        |  
|Weighted average common shares outstandingbasic                    |  |                                      | 58,503 |   |      |   | 55,422 |  
|Effect of dilutive securities:                                      |  |                                      |        |   |      |   |        |  
|Stock options                                                       |  |                                      | 277    |   |      |   | 406    |  
|Unvested stock                                                      |  |                                      | 31     |   |      |   | 93     |  
|                                                                    |  |                                      |        |   |      |   |        |  
|Weighted average common shares outstandingdiluted (1)              |  |                                      | 58,811 |   |      |   | 55,921 |  
|                                                                    |  |                                      |        |   |      |   |        |  
|EARNINGS PER COMMON SHARE, BASIC                                    |  |                                      |        |   |      |   |        |  
|Continuing operations                                               |  | $                                    | 0.51   |   |      | $ | 0.39   |  
|Discontinued operations                                             |  |                                      |       |   |      |   | 0.03   |  
|                                                                    |  |                                      |        |   |      |   |        |  
|                                                                    |  | $                                    | 0.51   |   |      | $ | 0.42   |  
|                                                                    |  |                                      |        |   |      |   |        |  
|EARNINGS PER COMMON SHARE, DILUTED                                  |  |                                      |        |   |      |   |        |  
|Continuing operations                                               |  | $                                    | 0.51   |   |      | $ | 0.39   |  
|Discontinued operations                                             |  |                                      |       |   |      |   | 0.02   |  
|                                                                    |  |                                      |        |   |      |   |        |  
|                                                                    |  | $                                    | 0.51   |   |      | $ | 0.41   |  
|                                                                    |  |                                      |        |   |      |   |        |  



|(1) | The conversion of downREIT operating partnership units and Series 1 Preferred Shares are anti-dilutive for all periods presented. Accordingly, downREIT operating partnership units
and Series 1 Preferred Shares have been excluded from the weighted average common shares used to compute diluted earnings per share.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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NOTE JSEGMENT INFORMATION

We operate our portfolio of properties in two geographic operating regions: East and West, which constitute our segments under Statement of Financial Accounting Standard No. 131, Disclosures about Segments
of an Enterprise and Related Information.

A summary of our operations by geographic region is presented below:



|                                                            |  |                                   |           |   |      |   |         |       |  |   |         |   |  |   |           |  
|----------------------------------------------------------- |  | --------------------------------- | --------- | - | ---- | - | ------- | ----- |  | - | ------- | - |  | - | --------- | -
|                                                            |  | Three Months Ended March 31, 2008 |          
|                                                            |  | East                              |           |   | West |   |         | Other |  |   | Total   |  
|                                                            |  | (In thousands)                    |          
|Rental income                                               |  | $                                 | 95,458    |   |      | $ | 27,263  |       |  | $ |        |   |  | $ | 122,721   |  
|Other property income                                       |  |                                   | 2,800     |   |      |   | 586     |       |  |   |        |   |  |   | 3,386     |  
|Mortgage interest income                                    |  |                                   | 737       |   |      |   | 379     |       |  |   |        |   |  |   | 1,116     |  
|Rental expenses                                             |  |                                   | (20,543   | ) |      |   | (6,784  | )     |  |   |        |   |  |   | (27,327   | )
|Real estate taxes                                           |  |                                   | (10,093   | ) |      |   | (2,470  | )     |  |   |        |   |  |   | (12,563   | )
|                                                            |  |                                   |           |   |      |   |         |       |  |   |         |   |  |   |           |  
|Property operating income                                   |  |                                   | 68,359    |   |      |   | 18,974  |       |  |   |        |   |  |   | 87,333    |  
|General and administrative expense                          |  |                                   |          |   |      |   |        |       |  |   | (6,934  | ) |  |   | (6,934    | )
|Depreciation and amortization                               |  |                                   | (17,765   | ) |      |   | (7,448  | )     |  |   | (187    | ) |  |   | (25,400   | )
|Other interest income                                       |  |                                   | 256       |   |      |   | 85      |       |  |   |        |   |  |   | 341       |  
|Interest expense                                            |  |                                   |          |   |      |   |        |       |  |   | (24,353 | ) |  |   | (24,353   | )
|Income from real estate partnership                         |  |                                   |          |   |      |   |        |       |  |   | 331     |   |  |   | 331       |  
|                                                            |  |                                   |           |   |      |   |         |       |  |   |         |   |  |   |           |  
|Income from continuing operations before minority interests |  |                                   | 50,850    |   |      |   | 11,611  |       |  |   | (31,143 | ) |  |   | 31,318    |  
|Minority interests                                          |  |                                   |          |   |      |   |        |       |  |   | (1,332  | ) |  |   | (1,332    | )
|                                                            |  |                                   |           |   |      |   |         |       |  |   |         |   |  |   |           |  
|Net income                                                  |  | $                                 | 50,850    |   |      | $ | 11,611  |       |  | $ | (32,475 | ) |  | $ | 29,986    |  
|                                                            |  |                                   |           |   |      |   |         |       |  |   |         |   |  |   |           |  
|Total assets at end of period                               |  | $                                 | 2,007,754 |   |      | $ | 881,294 |       |  | $ | 90,082  |   |  | $ | 2,979,130 |  
|                                                            |  |                                   |           |   |      |   |         |       |  |   |         |   |  |   |           |  
|                                                            | 
|                                                            |  | Three Months Ended March 31, 2007 |          
|                                                            |  | East                              |           |   | West |   |         | Other |  |   | Total   |  
|                                                            |  | (In thousands)                    |          
|Rental income                                               |  | $                                 | 86,264    |   |      | $ | 25,499  |       |  | $ |        |   |  | $ | 111,763   |  
|Other property income                                       |  |                                   | 1,560     |   |      |   | 810     |       |  |   |        |   |  |   | 2,370     |  
|Mortgage interest income                                    |  |                                   | 737       |   |      |   | 393     |       |  |   |        |   |  |   | 1,130     |  
|Rental expenses                                             |  |                                   | (17,725   | ) |      |   | (6,573  | )     |  |   |        |   |  |   | (24,298   | )
|Real estate taxes                                           |  |                                   | (8,443    | ) |      |   | (2,125  | )     |  |   |        |   |  |   | (10,568   | )
|                                                            |  |                                   |           |   |      |   |         |       |  |   |         |   |  |   |           |  
|Property operating income                                   |  |                                   | 62,393    |   |      |   | 18,004  |       |  |   |        |   |  |   | 80,397    |  
|General and administrative expense                          |  |                                   |          |   |      |   |        |       |  |   | (5,608  | ) |  |   | (5,608    | )
|Depreciation and amortization                               |  |                                   | (17,320   | ) |      |   | (7,358  | )     |  |   | (234    | ) |  |   | (24,912   | )
|Other interest income                                       |  |                                   | 184       |   |      |   | 41      |       |  |   |        |   |  |   | 225       |  
|Interest expense                                            |  |                                   |          |   |      |   |        |       |  |   | (27,337 | ) |  |   | (27,337   | )
|Income from real estate partnership                         |  |                                   |          |   |      |   |        |       |  |   | 284     |   |  |   | 284       |  
|                                                            |  |                                   |           |   |      |   |         |       |  |   |         |   |  |   |           |  
|Income from continuing operations before minority interests |  |                                   | 45,257    |   |      |   | 10,687  |       |  |   | (32,895 | ) |  |   | 23,049    |  
|Minority interests                                          |  |                                   |          |   |      |   |        |       |  |   | (1,296  | ) |  |   | (1,296    | )
|Income from discontinued operations                         |  |                                   |          |   |      |   |        |       |  |   | 1,383   |   |  |   | 1,383     |  
|                                                            |  |                                   |           |   |      |   |         |       |  |   |         |   |  |   |           |  
|Net income                                                  |  | $                                 | 45,257    |   |      | $ | 10,687  |       |  | $ | (32,808 | ) |  | $ | 23,136    |  
|                                                            |  |                                   |           |   |      |   |         |       |  |   |         |   |  |   |           |  



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##### Table of Contents

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Forward-Looking Statements

The following discussion should be read in conjunction with the consolidated interim
financial statements and notes thereto appearing in Item 1 of this report and the more detailed information contained in our Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission
on February 27, 2008.

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. When we refer to forward-looking statements or information, sometimes we use words such as may, will,
could, should, plans, intends, expects, believes, estimates, anticipates and continues. Forward-looking statements are not historical facts
or guarantees of future performance and involve certain known and unknown risks, uncertainties, and other factors, many of which are outside our control, that could cause actual results to differ materially from those we describe.

Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this Quarterly Report on
Form 10-Q. Except as may be required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events or otherwise. You should carefully review the risks and the risk factors included in our
Annual Report on Form 10-K for the year ended December 31, 2007, before making any investments in us.

Overview

We are an equity real estate investment trust (REIT) specializing in the ownership, management, development and redevelopment of high quality retail and
mixed-use properties located primarily in densely populated and affluent communities in strategically selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, as well as in California. As of March 31, 2008,
we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 82 predominantly retail real estate projects comprising approximately 18.2 million square feet. In total, the real
estate projects were 96.1% leased at March 31, 2008. A joint venture in which we own a 30% interest owned seven retail real estate projects totaling approximately 1.0 million square feet as of March 31, 2008. In total, the joint
venture properties in which we own an interest were 97.8% leased at March 31, 2008. We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our dividends per common share for 40
consecutive years.

2008 Property Acquisitions and Dispositions

During the three months ended March 31, 2008, we had no acquisitions or dispositions.

2008 Significant Debt, Equity and Other
Transactions

On February 21, 2008, we entered into two interest rate swap agreements to fix the variable portion of our $200 million term note
through November 6, 2008. The first swap fixed the variable rate at 2.725% on a notional amount of $100 million and the second swap fixed the variable rate at 2.852% on a notional amount of $100 million for a combined fixed rate of 2.789%. Both
swaps were designated and qualified as cash flow hedges and are recorded at fair value.

Outlook

General

We anticipate our 2008 income from continuing operations to
grow in comparison to our 2007 income from continuing operations. We expect this income growth primarily to be generated by a combination of the following:



| |  |  | increased earnings in our same-center portfolio and from properties under redevelopment; and
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | increased earnings as we expand our portfolio through property acquisitions.
| | - |  | ----------------------------------------------------------------------------

On February 12, 2008, we announced a regular quarterly cash dividend of $0.61 per share on our common shares, resulting in an indicated annual rate of $2.44 per share. The regular common dividend was payable on
April 15, 2008, to common shareholders of record as of March 19, 2008.



15



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##### Table of Contents

We continue to see a positive impact on our income as a result of the redevelopment of our shopping centers and higher
rental rates on existing spaces as leases on these spaces expire. For example, leases signed in 2006, 2007 and year-to-date 2008 on spaces for which there was a previous tenant have on average been renewed at double digit cash-basis base rent
increases. On spaces where the tenant leases are expiring over the next few years, our analysis of current market rents as compared to rents on the existing leases leads us to expect that the base rents on new leases will have double-digit weighted
average increases over the cash-basis base rents currently in place. We have redevelopment projects with projected costs of approximately $90 million and $73 million stabilizing in 2008 and 2009, respectively. As redevelopment properties are
completed, spaces that were out of service begin generating revenue; in addition, spaces that were not out of service and that have expiring leases may generate higher revenue because we generally receive higher rent on new leases.

At March 31, 2008, the leasable square feet in our shopping centers was 94.6% occupied and 96.1% leased. The leased rate is higher than the occupied rate due to
leased spaces that are being redeveloped or improved or that are awaiting permits and, therefore, are not yet ready to be occupied. Our occupancy and leased rates are subject to variability over time due to factors including acquisitions, the timing
of the start and stabilization of our redevelopment projects, lease expirations and tenant bankruptcies.

The current economic environment may impact the
success of our tenants retail operations and therefore the amount of rent and expense reimbursements we receive from our tenants. Any reduction in our tenants ability to pay base rent, percentage rent or other charges, including the
filing by any of our tenants for bankruptcy protection, may adversely affect our financial condition and results of operations. We believe the locations of our centers should minimize the negative impact of the economic environment however, we
continue to monitor our tenants operating performance as well as trends in the retail industry.

Acquisitions

We anticipate growth in earnings from the acquisition of neighborhood and community shopping centers in our primary markets in the East and West regions, as well as a
reduction in earnings from selective dispositions. We continue to evaluate potential acquisitions in additional markets.

Any growth in earnings from
acquisitions is contingent, however, on our ability to find properties that meet our qualitative standards at prices that meet our financial hurdles. Changes in interest rates also may affect our success in achieving growth through acquisitions by
affecting both the price that must be paid to acquire a property, as well as our ability to economically finance the property acquisition.

Same-Center

Throughout this section, we have provided certain information on a same-center basis. Information provided on a same-center basis includes
the results of properties that we owned and operated for the entirety of both periods being compared except for properties for which significant development, redevelopment or expansion occurred during either of the periods being compared and
properties classified as discontinued operations.



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##### Table of Contents

RESULTS OF OPERATIONSTHREE MONTHS ENDED MARCH 31, 2008 AND 2007



|                                                            |  |                               |         |   |      |   |         |         |  |   |        |   |  |        |  
|----------------------------------------------------------- |  | ----------------------------- | ------- | - | ---- | - | ------- | ------- |  | - | ------ | - |  | ------ | -
|                                                            |  |                               |         |   |      |   |         | Change  | 
|                                                            |  | 2008                          |         |   | 2007 |   |         | Dollars |  |   | %      |  
|                                                            |  | (Dollar amounts in thousands) |        
|Rental income                                               |  | $                             | 122,721 |   |      | $ | 111,763 |         |  | $ | 10,958 |   |  | 9.8    | %
|Other property income                                       |  |                               | 3,386   |   |      |   | 2,370   |         |  |   | 1,016  |   |  | 42.9   | %
|Mortgage interest income                                    |  |                               | 1,116   |   |      |   | 1,130   |         |  |   | (14    | ) |  | -1.2   | %
|                                                            |  |                               |         |   |      |   |         |         |  |   |        |   |  |        |  
|Total property revenue                                      |  |                               | 127,223 |   |      |   | 115,263 |         |  |   | 11,960 |   |  | 10.4   | %
|                                                            |  |                               |         |   |      |   |         |         |  |   |        |   |  |        |  
|Rental expenses                                             |  |                               | 27,327  |   |      |   | 24,298  |         |  |   | 3,029  |   |  | 12.5   | %
|Real estate taxes                                           |  |                               | 12,563  |   |      |   | 10,568  |         |  |   | 1,995  |   |  | 18.9   | %
|                                                            |  |                               |         |   |      |   |         |         |  |   |        |   |  |        |  
|Total property expenses                                     |  |                               | 39,890  |   |      |   | 34,866  |         |  |   | 5,024  |   |  | 14.4   | %
|                                                            |  |                               |         |   |      |   |         |         |  |   |        |   |  |        |  
|Property operating income                                   |  |                               | 87,333  |   |      |   | 80,397  |         |  |   | 6,936  |   |  | 8.6    | %
|Other interest income                                       |  |                               | 341     |   |      |   | 225     |         |  |   | 116    |   |  | 51.6   | %
|Income from real estate partnership                         |  |                               | 331     |   |      |   | 284     |         |  |   | 47     |   |  | 16.5   | %
|Interest expense                                            |  |                               | (24,353 | ) |      |   | (27,337 | )       |  |   | 2,984  |   |  | -10.9  | %
|General and administrative expense                          |  |                               | (6,934  | ) |      |   | (5,608  | )       |  |   | (1,326 | ) |  | 23.6   | %
|Depreciation and amortization                               |  |                               | (25,400 | ) |      |   | (24,912 | )       |  |   | (488   | ) |  | 2.0    | %
|                                                            |  |                               |         |   |      |   |         |         |  |   |        |   |  |        |  
|Total other, net                                            |  |                               | (56,015 | ) |      |   | (57,348 | )       |  |   | 1,333  |   |  | -2.3   | %
|                                                            |  |                               |         |   |      |   |         |         |  |   |        |   |  |        |  
|Income from continuing operations before minority interests |  |                               | 31,318  |   |      |   | 23,049  |         |  |   | 8,269  |   |  | 35.9   | %
|Minority interests                                          |  |                               | (1,332  | ) |      |   | (1,296  | )       |  |   | (36    | ) |  | 2.8    | %
|Income from discontinued operations                         |  |                               |        |   |      |   | 1,383   |         |  |   | (1,383 | ) |  | -100.0 | %
|                                                            |  |                               |         |   |      |   |         |         |  |   |        |   |  |        |  
|Net income                                                  |  | $                             | 29,986  |   |      | $ | 23,136  |         |  | $ | 6,850  |   |  | 29.6   | %
|                                                            |  |                               |         |   |      |   |         |         |  |   |        |   |  |        |  

Property Revenues

Total property revenue increased $12.0 million, or 10.4%, to $127.2 million in the three months ended March 31, 2008 compared to $115.3 million in the three months ended March 31, 2007. The percentage leased at our
shopping centers decreased slightly to 96.1% at March 31, 2008 compared to 96.6% at March 31, 2007. Changes in the components of property revenue are discussed below.

Rental Income

Rental income consists primarily of minimum rent, cost recoveries from tenants and percentage rent.
Rental income increased $11.0 million, or 9.8%, to $122.7 million in the three months ended March 31, 2008 compared to $111.8 million in the three months ended March 31, 2007 due primarily to the following:



| |  |  | an increase of $6.4 million attributable to properties acquired in 2007,
| | - |  | ------------------------------------------------------------------------



| |  |  | an increase of $3.0 million at same-center properties due to increased rental rates on new leases, increased cost recoveries and increased percentage rent, and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an increase of $1.6 million at redevelopment properties due primarily to increased rental rates on new leases.
| | - |  | --------------------------------------------------------------------------------------------------------------

Other Property Income

Other property income increased $1.0 million,
or 42.9%, to $3.4 million in the three months ended March 31, 2008 compared to $2.4 million in the three months ended March 31, 2007. Included in other property income are items which, although recurring, tend to fluctuate more than rental
income from period to period, such as lease termination fees. This increase is due primarily to an increase in lease and other termination fees at same-center and redevelopment properties.

Property Expenses

Total property expenses increased $5.0 million, or
14.4%, to $39.9 million in the three months ended March 31, 2008 compared to $34.9 million in the three months ended March 31, 2007. Changes in the components of property expenses are discussed below.



17



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##### Table of Contents

Rental Expenses

Rental expenses increased $3.0 million, or 12.5%, to $27.3 million in the three months ended March 31, 2008 compared to $24.3 million in the three months ended March 31, 2007. This increase is due primarily to the following:



| |  |  | an increase of $1.2 million attributable to properties acquired in 2007,
| | - |  | ------------------------------------------------------------------------



| |  |  | an increase of $0.8 million in repairs and maintenance at same-center and redevelopment properties,
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | an increase of $0.4 million in marketing expense at redevelopment properties,
| | - |  | -----------------------------------------------------------------------------



| |  |  | an increase of $0.4 million in bad debt expense at same-center properties, and
| | - |  | ------------------------------------------------------------------------------



| |  |  | an increase of $0.3 million in utility costs at same-center and redevelopment properties.
| | - |  | -----------------------------------------------------------------------------------------

As a result of the changes in rental income, rental expenses and other property income described above, rental expenses as a percentage of rental income plus other
property income increased slightly to 21.7% in the three months ended March 31, 2008 from 21.3% in the three months ended March 31, 2007.

Real Estate Taxes

Real estate tax expense increased $2.0 million, or 18.9%, to $12.6 million in the three months ended March 31, 2008
compared to $10.6 million in the three months ended March 31, 2007. This increase is due primarily to an increase of $1.0 million related to properties acquired in 2007 and an increase of $0.9 million related to higher tax assessments at
same-center properties.

Property Operating Income

Property operating income increased $6.9 million, or 8.6%, to $87.3 million in the three months ended March 31, 2008 compared to $80.4 million in the three months ended March 31, 2007. This increase is due primarily to the
following:



| |  |  | earnings attributable to properties acquired in 2007,
| | - |  | -----------------------------------------------------



| |  |  | growth in same-center earnings, and
| | - |  | -----------------------------------



| |  |  | growth in earnings at redevelopment properties.
| | - |  | -----------------------------------------------

Other

Interest Expense

Interest
expense decreased $3.0 million, or 10.9%, to $24.4 million in the three months ended March 31, 2008 compared to $27.3 million in the three months ended March 31, 2007. This decrease is due primarily to the following:



| |  |  | a decrease of $1.5 million due to the termination of the Mid-Pike and Huntington capital leases on October 26, 2007, as part of the acquisition of the fee
interests in these properties,
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a decrease of $1.1 million due to a lower overall weighted average borrowing rate, and
| | - |  | --------------------------------------------------------------------------------------



| |  |  | a decrease of $0.5 million due to lower borrowings.
| | - |  | ---------------------------------------------------

Gross interest costs were $26.1 million and $29.3 million in the three months ended March 31, 2008 and 2007, respectively. Capitalized interest was $1.8 million and $1.9 million in the three months ended
March 31, 2008 and 2007, respectively.

General and Administrative Expense

General and administrative expense increased $1.3 million, or 23.6%, to $6.9 million in the three months ended March 31, 2008 compared to $5.6 million in the three months ended March 31, 2007.
Approximately $0.9 million of the increase is due to legal and other fees related to the litigation over a parcel of land adjacent to Santana Row and other legal matters. The remaining increase is primarily due to an increase in personnel and
share-based and other compensation expense.

Depreciation and Amortization

Depreciation and amortization expense increased $0.5 million, or 2.0%, to $25.4 million in the three months ended March 31, 2008 from $24.9 million in the three months ended March 31, 2007. This
increase is due primarily to acquisitions and capital improvements at same-center and redevelopment properties.



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##### Table of Contents

Income from Discontinued Operations

Income from discontinued operations represents the operating income of properties that have been disposed or will be disposed, which is required to be reported separately from results of ongoing operations. No
properties were sold or to be sold for the three months ended March 31, 2008. The reported operating income of $1.4 million for the three months ended March 31, 2007, represents the operating income for the period during which we owned
properties sold or to be sold in 2007.

Segment Results

We operate our business on an asset management model, where asset management teams are responsible for a portfolio of assets. We manage our portfolio as two operating regions: East and West. Asset management teams consist of asset managers,
leasing agents, development staff and financial personnel, each of whom has responsibility for a distinct portfolio.

The following table provides selected
key segment data for the three months ended March 31, 2008 and 2007. The results of properties classified as discontinued operations have been excluded for rental income, total revenue and property operating income from the following table.



|                                                        |  |                                        |        |   |      |   |        |  
|------------------------------------------------------- |  | -------------------------------------- | ------ | - | ---- | - | ------ | -
|                                                        |  | Three Months Ended March 31,           |       
|                                                        |  | 2008                                   |        |   | 2007 |  
|                                                        |  | (Dollars and square feet in thousands) |       
|East                                                    |  |                                        |        |   |      |   |        |  
|Rental income                                           |  | $                                      | 95,458 |   |      | $ | 86,264 |  
|Total revenue                                           |  | $                                      | 98,995 |   |      | $ | 88,561 |  
|Property operating income (1)                           |  | $                                      | 68,359 |   |      | $ | 62,393 |  
|Property operating income as a percent of total revenue |  |                                        | 69.1   | % |      |   | 70.5   | %
|Gross leasable area (square feet)                       |  |                                        | 15,569 |   |      |   | 16,981 |  
|West                                                    |  |                                        |        |   |      |   |        |  
|Rental income                                           |  | $                                      | 27,263 |   |      | $ | 25,499 |  
|Total revenue                                           |  | $                                      | 28,228 |   |      | $ | 26,702 |  
|Property operating income (1)                           |  | $                                      | 18,974 |   |      | $ | 18,004 |  
|Property operating income as a percent of total revenue |  |                                        | 67.2   | % |      |   | 67.4   | %
|Gross leasable area (square feet)                       |  |                                        | 2,628  |   |      |   | 2,626  |  



|(1) | Property operating income consists of rental income, other property income and mortgage interest income, less rental expenses and real estate taxes. This measure is used internally
to evaluate the performance of our regional operations, and we consider it to be a significant measure.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

East

Rental income for the East region increased $9.2 million, or 10.7%, to $95.5 million in the three months ended March 31, 2008 compared to $86.3 million in the three
months ended March 31, 2007 due primarily to the following:



| |  |  | an increase of $6.2 million attributable to properties acquired in 2007,
| | - |  | ------------------------------------------------------------------------



| |  |  | an increase of $1.7 million at same-center properties due primarily to increased rental rates on new leases, increased cost recoveries and increased percentage
rent, and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an increase of $1.3 million at redevelopment properties.
| | - |  | --------------------------------------------------------

Property operating income for the East region increased $6.0 million due primarily to the increase in rental income discussed above and an increase in lease and other termination income. These increases in income were partially offset by a
$2.8 million increase in rental expense due to the acquisition of properties and increases in expenses at same-center and redevelopment properties, and a $1.7 million increase in real estate taxes due primarily to the acquisition of properties and
higher assessments on our same-center properties. As a result of these changes, the ratio of property operating income to total revenue for the East region decreased to 69.1% in the three months ended March 31, 2008 from 70.5% in the three
months ended March 31, 2007.



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West

Rental income
for the West region increased $1.8 million, or 6.9%, to $27.3 million in the three months ended March 31, 2008 from $25.5 million in the three months ended March 31, 2007 due primarily to the following:



| |  |  | an increase of $1.3 million at same-center properties due primarily to increased residential rental rates at Santana Row, increased rental rates on new retail
leases, and increased percentage rent,
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an increase of $0.3 million at redevelopment projects, and
| | - |  | ----------------------------------------------------------



| |  |  | an increase of $0.2 million attributable to a property acquired in 2007.
| | - |  | ------------------------------------------------------------------------

Property operating income for the West region increased $1.0 million due primarily to the increase in rental income discussed above partially offset by a $0.6 million increase in rental expenses and real estate taxes.
As a result of these changes, the ratio of property operating income to total revenue for the West region decreased to 67.2% in the three months ended March 31, 2008 from 67.4% in the three months ended March 31, 2007.

New Accounting Standards

In September 2006, the FASB issued SFAS
No. 157 Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 applies to accounting pronouncements that require or permit fair value measurements, except for share-based payments under SFAS No. 123(R). We adopted the recognition and disclosure provisions of SFAS
No. 157 for financial assets and financial liabilities and for nonfinancial assets and nonfinancial liabilities that are re-measured at least annually effective January 1, 2008; the adoption did not have a material impact on our financial
position, results of operations or cash flows. We are required to adopt the provisions of SFAS No. 157 for all other nonfinancial assets and nonfinancial liabilities effective January 1, 2009 and do not expect the adoption to have a
material impact on our financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115 (SFAS No. 159). This standard permits entities to choose to measure many financial instruments and certain other items
at fair value and is effective for the first fiscal year beginning after November 15, 2007. We did not make this fair value election when we adopted SFAS No. 159 effective January 1, 2008, and, therefore, it did not have an impact on
our financial position, results of operations, or cash flows.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (SFAS No. 161). SFAS No. 161 requires enhanced disclosures about an entitys derivative instruments and hedging activities and is
effective for fiscal years beginning after November 15, 2008. We do not expect the adoption of SFAS No. 161 to have a material impact on our consolidated financial statements.

Liquidity and Capital Resources

Due to the nature of our business and strategy, we generally generate significant
amounts of cash from operations. The cash generated from operations is primarily paid to our shareholders in the form of dividends. As a REIT, we must generally make annual distributions to shareholders of at least 90% of our REIT taxable income.

Our short-term liquidity requirements consist primarily of obligations under our capital and operating leases, normal recurring operating expenses,
regular debt service requirements (including debt service relating to additional or replacement debt, as well as scheduled debt maturities), recurring expenditures, non-recurring expenditures (such as tenant improvements and redevelopments) and
dividends to common and preferred shareholders. Overall capital requirements in 2008 will depend upon acquisition opportunities, the level of improvements and redevelopments on existing properties and the timing and cost of development of future
phases of existing properties.

Our long-term capital requirements consist primarily of maturities under our long-term debt, development and redevelopment
costs and potential acquisitions. We expect to fund these through a combination of sources which we believe will be available to us, including additional and replacement secured and unsecured borrowings, issuance of additional equity, joint venture
relationships relating to existing properties or new acquisitions and property dispositions.

The cash needed to execute our strategy and invest in new
properties, as well as to pay our debt at maturity, must come from one or more of the following sources:



| |  |  | cash provided by operations that is not distributed to shareholders,
| | - |  | --------------------------------------------------------------------



| |  |  | proceeds from the issuance of new debt or equity securities, or
| | - |  | ---------------------------------------------------------------



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| |  |  | proceeds from property dispositions.
| | - |  | ------------------------------------

It is
managements intention that we continually have access to the capital resources necessary to expand and develop our business. As a result, we intend to operate with and maintain a conservative capital structure that will allow us to maintain
strong debt service coverage and fixed-charge coverage ratios as part of our commitment to investment-grade debt ratings. We may, from time to time, seek to obtain funds by the following means:



| |  |  | additional equity offerings,
| | - |  | ----------------------------



| |  |  | unsecured debt financing and/or mortgage financings, and
| | - |  | --------------------------------------------------------



| |  |  | other debt and equity alternatives, including formation of joint ventures, in a manner consistent with our intention to operate with a conservative debt structure.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following factors could affect our ability to meet our liquidity requirements:



| |  |  | we may be unable to obtain debt or equity financing on favorable terms, or at all, as a result of our financial condition or market conditions at the time we seek
additional financing;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | restrictions in our debt instruments or preferred stock equity may prohibit us from incurring debt or issuing equity at all or on acceptable terms under
then-prevailing market conditions; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we may be unable to service additional or replacement debt due to increases in interest rates or a decline in our operating performance.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------

We seek to maintain a staggered maturity schedule of debt maturities such that a disproportionate amount of debt maturities does not
occur in any one year. Consistent therewith, we have less than $220 million of debt maturities occurring through December 31, 2008, $200 million of which can be extended for one-year at our option. Despite the current instability in the credit
markets, we believe that we will be able to refinance these maturities.

Cash and cash equivalents were $27.7 million at March 31, 2008, which is a
$23.0 million decrease from the balance of cash and cash equivalents at December 31, 2007. Cash and cash equivalents are not a good indicator of our liquidity. We have a $300.0 million unsecured revolving credit facility that matures
July 27, 2010, subject to a one-year extension at our option. We utilize our revolving credit facility to finance the initial acquisition of properties and meet other short-term working capital requirements.

Summary of Cash Flows



|                                                 |  |                              |         |   |      |   |         |  
|------------------------------------------------ |  | ---------------------------- | ------- | - | ---- | - | ------- | -
|                                                 |  | Three Months Ended March 31, |        
|                                                 |  | 2008                         |         |   | 2007 |  
|                                                 |  | (In thousands)               |        
|Cash provided by operating activities            |  | $                            | 52,420  |   |      | $ | 55,685  |  
|Cash used in investing activities                |  |                              | (38,815 | ) |      |   | (78,594 | )
|Cash (used in) provided by financing activities  |  |                              | (36,642 | ) |      |   | 27,401  |  
|                                                 |  |                              |         |   |      |   |         |  
|(Decrease) increase in cash and cash equivalents |  |                              | (23,037 | ) |      |   | 4,492   |  
|Cash and cash equivalents, beginning of year     |  |                              | 50,691  |   |      |   | 11,495  |  
|                                                 |  |                              |         |   |      |   |         |  
|Cash and cash equivalents, end of period         |  | $                            | 27,654  |   |      | $ | 15,987  |  
|                                                 |  |                              |         |   |      |   |         |  

Net cash provided by operating activities decreased $3.3 million to $52.4 million during the three months ended
March 31, 2008 from $55.7 million during the three months ended March 31, 2007. The decrease was primarily attributable to:



| |  |  | $9.8 million decrease in cash provided for working capital due primarily to decreases in accounts payable, accrued expenses and prepaid rent
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------

partially offset by



| |  |  | $6.5 million higher net income before gain on sale of real estate, income from real estate partnership, depreciation and amortization, minority interests, and other
non-cash expenses.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



21



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Net cash used in investing activities decreased $39.8 million to $38.8 million during the three months ended
March 31, 2008 from $78.6 million during the three months ended March 31, 2007. The decrease was primarily attributable to:



| |  |  | $24.6 million decrease in acquisitions of real estate,
| | - |  | ------------------------------------------------------



| |  |  | $21.6 million decrease in contributions to our unconsolidated real estate partnership due to acquisitions by the real estate partnership in 2007,
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------

partially offset by



| |  |  | $5.6 million increase in capital expenditures.
| | - |  | ----------------------------------------------

Net
cash used in financing activities increased $64.0 million to $36.6 million during the three months ended March 31, 2008 from $27.4 million provided during the three months ended March 31, 2007. The increase was primarily attributable to:



| |  |  | $59.5 million decrease in net borrowings on our revolving credit facility and
| | - |  | -----------------------------------------------------------------------------



| |  |  | $4.1 million increase in dividends paid to shareholders due to an increase in the dividend rate and increased number of shares outstanding.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------

Off-Balance Sheet Arrangements

We
are joint venture partners in eight restaurants at Santana Row. Our investment balance in the restaurant joint ventures was approximately $7.9 million at March 31, 2008 and December 31, 2007. Our equity in earnings from the restaurant
joint ventures was $0.2 million and $0.5 million for the three months ended March 31, 2008 and 2007, respectively.

We have a joint venture
arrangement (the Partnership) with affiliates of a discretionary fund created and advised by ING Clarion (Clarion). We own 30% of the equity in the Partnership, and Clarion owns 70%. We are the manager of the Partnership and
its properties, earning fees for acquisitions, management, leasing and financing. We also have the opportunity to receive performance-based earnings through our Partnership interest. We account for our interest in the Partnership using the equity
method. In total, at March 31, 2008, the Partnership had $81.5 million of mortgages payable outstanding.



22



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##### Table of Contents

Debt Financing Arrangements

The following is a summary of our total debt outstanding as of March 31, 2008:



|                                         |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|---------------------------------------- |  | ---------------------- | -------- | ------------------------------------ | - | --------- | --------------------------------------- |  | ------------- | ------------- |  | --------------------
|Description of Debt                      |  | OriginalDebtIssued     |          | Principal Balanceas ofMarch 31, 2008 |   |           | Stated Interest Rateas ofMarch 31, 2008 |  |               | Maturity Date
|                                         |  | (Dollars in thousands) |          |                                      |   |           |                                         | 
|Mortgage loans (1)                       |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Secured fixed rate                       |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Leesburg Plaza                           |  | $                      | 9,900    |                                      | $ | 9,597     |                                         |  | 6.510         | %             |  | October 1, 2008     
|164 E. Houston Street                    |  |                        | 345      |                                      |   | 32        |                                         |  | 7.500         | %             |  | October 6, 2008     
|White Marsh Other                        |  |                        | Acquired |                                      |   | 1,142     |                                         |  | 6.060         | %             |  | December 31, 2008   
|Mercer Mall                              |  |                        | Acquired |                                      |   | 4,421     |                                         |  | 8.375         | %             |  | April 1, 2009       
|Federal Plaza                            |  |                        | 36,500   |                                      |   | 33,539    |                                         |  | 6.750         | %             |  | June 1, 2011        
|Tysons Station                           |  |                        | 7,000    |                                      |   | 6,178     |                                         |  | 7.400         | %             |  | September 1, 2011   
|White Marsh Plaza (2)                    |  |                        | Acquired |                                      |   | 10,289    |                                         |  | 6.040         | %             |  | April 1, 2013       
|Crow Canyon                              |  |                        | Acquired |                                      |   | 21,495    |                                         |  | 5.400         | %             |  | August 11, 2013     
|Melville Mall (3)                        |  |                        | Acquired |                                      |   | 24,939    |                                         |  | 5.250         | %             |  | September 1, 2014   
|THE AVENUE at White Marsh                |  |                        | Acquired |                                      |   | 60,786    |                                         |  | 5.460         | %             |  | January 1, 2015     
|Barracks Road                            |  |                        | 44,300   |                                      |   | 41,823    |                                         |  | 7.950         | %             |  | November 1, 2015    
|Hauppauge                                |  |                        | 16,700   |                                      |   | 15,766    |                                         |  | 7.950         | %             |  | November 1, 2015    
|Lawrence Park                            |  |                        | 31,400   |                                      |   | 29,644    |                                         |  | 7.950         | %             |  | November 1, 2015    
|Wildwood                                 |  |                        | 27,600   |                                      |   | 26,057    |                                         |  | 7.950         | %             |  | November 1, 2015    
|Wynnewood                                |  |                        | 32,000   |                                      |   | 30,211    |                                         |  | 7.950         | %             |  | November 1, 2015    
|Brick Plaza                              |  |                        | 33,000   |                                      |   | 30,996    |                                         |  | 7.415         | %             |  | November 1, 2015    
|Shoppers World                          |  |                        | Acquired |                                      |   | 5,949     |                                         |  | 5.910         | %             |  | January 31, 2021    
|Mount Vernon (4)                         |  |                        | 13,250   |                                      |   | 11,883    |                                         |  | 5.660         | %             |  | April 15, 2028      
|Chelsea                                  |  |                        | Acquired |                                      |   | 8,206     |                                         |  | 5.360         | %             |  | January 15, 2031    
|                                         |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Subtotal                                 |  |                        |          |                                      |   | 372,953   |                                         |  |               |               |  |                     
|Net unamortized discount                 |  |                        |          |                                      |   | (620      | )                                       |  |               |               |  |                     
|                                         |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Total mortgage loans                     |  |                        |          |                                      |   | 372,333   |                                         |  |               |               |  |                     
|                                         |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Notes payable                            |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Unsecured fixed rate                     |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Term note (5)                            |  |                        | 200,000  |                                      |   | 200,000   |                                         |  | LIBOR + 0.575 | %             |  | November 6, 2008    
|Perring Plaza renovation                 |  |                        | 3,087    |                                      |   | 1,366     |                                         |  | 10.000        | %             |  | January 31, 2013    
|Unsecured variable rate                  |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Revolving credit facilities (6)          |  |                        | 300,000  |                                      |   |          |                                         |  | LIBOR + 0.425 | %             |  | July 27, 2010       
|Escondido (Municipal bonds) (7)          |  |                        | 9,400    |                                      |   | 9,400     |                                         |  | 2.406         | %             |  | October 1, 2016     
|                                         |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Total notes payable                      |  |                        |          |                                      |   | 210,766   |                                         |  |               |               |  |                     
|                                         |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Senior notes and debentures              |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Unsecured fixed rate                     |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|8.75% notes                              |  |                        | 175,000  |                                      |   | 175,000   |                                         |  | 8.750         | %             |  | December 1, 2009    
|4.50% notes                              |  |                        | 75,000   |                                      |   | 75,000    |                                         |  | 4.500         | %             |  | February 15, 2011   
|6.00% notes                              |  |                        | 175,000  |                                      |   | 175,000   |                                         |  | 6.000         | %             |  | July 15, 2012       
|5.40% notes                              |  |                        | 135,000  |                                      |   | 135,000   |                                         |  | 5.400         | %             |  | December 1, 2013    
|5.65% notes                              |  |                        | 125,000  |                                      |   | 125,000   |                                         |  | 5.650         | %             |  | June 1, 2016        
|6.20% notes                              |  |                        | 200,000  |                                      |   | 200,000   |                                         |  | 6.200         | %             |  | January 15, 2017    
|7.48% debentures (8)                     |  |                        | 50,000   |                                      |   | 50,000    |                                         |  | 7.480         | %             |  | August 15, 2026     
|6.82% medium term notes                  |  |                        | 40,000   |                                      |   | 40,000    |                                         |  | 6.820         | %             |  | August 1, 2027      
|                                         |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Subtotal                                 |  |                        |          |                                      |   | 975,000   |                                         |  |               |               |  |                     
|Net unamortized premium                  |  |                        |          |                                      |   | 2,513     |                                         |  |               |               |  |                     
|                                         |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Total senior notes and debentures        |  |                        |          |                                      |   | 977,513   |                                         |  |               |               |  |                     
|                                         |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Capital lease obligations                |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Various                                  |  |                        |          |                                      |   | 75,845    |                                         |  | Various       |               |  | Various through 2106
|                                         |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     
|Total debt and capital lease obligations |  |                        |          |                                      | $ | 1,636,457 |                                         |  |               |               |  |                     
|                                         |  |                        |          |                                      |   |           |                                         |  |               |               |  |                     



|1) | Mortgage loans do not include our 30% share ($24.4 million) of the $81.5 million debt of the partnership with Clarion Lion Properties Fund.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------

|2) | The interest rate of 6.04% represents the weighted average interest rate for two mortgage loans secured by this property. The loan balance represents an interest only loan of $4.35
million at a stated rate of 6.18% and the remaining balance at a stated rate of 5.96%.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



23



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##### Table of Contents

|3) | We acquired control of Melville Mall through a 20-year master lease and secondary financing. Because we control this property and retain substantially all of the economic benefit
and risk associated with it, this property is consolidated and the mortgage loan is reflected on the balance sheet, though it is not our legal obligation.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4) | The interest rate is fixed at 5.66% for the first ten years and then will be reset to a market rate in 2013. The lender has the option to call the loan on April 15, 2013 or any
time thereafter.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5) | The term note offers a one-year extension at our option. On February 21, 2008, we entered into two interest rate swap agreements to fix the variable portion of this debt
through November 6, 2008. The first swap fixed the variable rate at 2.725% on a notional amount of $100 million and the second swap fixed the variable rate at 2.852% on a notional amount of $100 million for a combined fixed rate of 2.789%. The
weighted average effective interest rate, before amortization of debt fees, was 4.21% for the three months ended March 31, 2008.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6) | The maximum amount drawn under our revolving credit facility during the three months ended March 31, 2008 was $7.0 million. The weighted average effective interest rate on
borrowings under our revolving credit facility, before amortization of debt fees, was 4.44% for the three months ended March 31, 2008. This credit facility is subject to a one-year extension at our option.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7) | The bonds require monthly interest only payments through maturity. The bonds bear interest at a variable rate determined weekly, which would enable the bonds to be remarketed at
100% of their principal amount. The property is not encumbered by a lien.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8) | On August 15, 2008, the debentures are redeemable by the holders thereof at the original purchase price of $1,000 per debenture.
|-- | --------------------------------------------------------------------------------------------------------------------------------

Our credit facility and other debt agreements include financial and other covenants that may limit our operating activities in the future. As of March 31, 2008, we
were in compliance with all of the financial and other covenants. If we were to breach any of our debt covenants and did not cure the breach within any applicable cure period, our lenders could require us to repay the debt immediately and, if the
debt is secured, could immediately begin proceedings to take possession of the property securing the loan. Many of our debt arrangements, including our public notes and our credit facility, are cross-defaulted, which means that the lenders under
those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a covenant or default under certain of our other debt obligations. As a result, any default under our debt covenants could have
an adverse effect on our financial condition, our results of operations, our ability to meet our obligations and the market value of our shares.

The
following is a summary of our debt maturities as of March 31, 2008:



|                        |  |                |         |              |   |           |  |   |           |     |  |   |           |    
|----------------------- |  | -------------- | ------- | ------------ | - | --------- |  | - | --------- | --- |  | - | --------- | ---
|                        |  | Secured        |         | CapitalLease |   | Unsecured |  |   | Total     |    
|                        |  | (In thousands) |        
|Reminder of 2008        |  | $              | 15,208  |              | $ | 812       |  | $ | 200,172   | (1) |  | $ | 216,192   |    
|2009                    |  |                | 11,232  |              |   | 1,216     |  |   | 175,250   |     |  |   | 187,698   |    
|2010                    |  |                | 7,344   |              |   | 1,305     |  |   | 275       | (2) |  |   | 8,924     |    
|2011                    |  |                | 44,645  |              |   | 1,399     |  |   | 75,304    |     |  |   | 121,348   |    
|2012                    |  |                | 7,460   |              |   | 1,500     |  |   | 175,336   |     |  |   | 184,296   |    
|2013 and thereafter (3) |  |                | 287,064 |              |   | 69,613    |  |   | 559,429   |     |  |   | 916,106   |    
|                        |  |                |         |              |   |           |  |   |           |     |  |   |           |    
|                        |  | $              | 372,953 |              | $ | 75,845    |  | $ | 1,185,766 |     |  | $ | 1,634,564 | (4)
|                        |  |                |         |              |   |           |  |   |           |     |  |   |           |    

Our organizational documents do not limit the level or amount of debt that we may incur.



|1) | Includes $200 million outstanding on our term note which is subject to a one-year extension at our option.
|-- | ----------------------------------------------------------------------------------------------------------

|2) | Our $300 million four-year revolving credit facility is subject to a one-year extension at our option. As of March 31, 2008, there was $0 drawn under this credit facility.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3) | Includes $10.0 million under the Mount Vernon mortgage loan that may be required to be paid on or after April 15, 2013 and $50 million of unsecured debt that may be called by
the holders on August 15, 2008.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4) | The total debt maturities differs from the total reported on the consolidated balance sheet due to the unamortized net premium or discount on certain mortgage loans, senior notes
and debentures as of March 31, 2008.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Interest Rate Hedging

We use derivative instruments to manage exposure to variable interest rate risk. We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk
of interest rates rising prior to the



24



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##### Table of Contents

issuance of debt. We enter into derivative instruments that qualify as cash flow hedges under SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities and do not enter into derivative instruments for speculative purposes.

On February 21, 2008, we entered into two
interest rate swap agreements to fix the variable portion of our $200 million term note through November 6, 2008. The first swap fixed the variable rate at 2.725% on a notional amount of $100 million and the second swap fixed the variable rate
at 2.852% on a notional amount of $100 million for a combined fixed rate of 2.789%. Both swaps were designated and qualified as cash flow hedges and are recorded at fair value.

We assess effectiveness of our cash flow hedges both at inception and on an ongoing basis. The effective portion of changes in fair value of our cash flow hedges is recorded in other comprehensive income, and the
ineffective portion of changes in the fair value of our cash flow hedges is recognized in earnings in the period affected. Hedge ineffectiveness did not have an impact on earnings for the three months ended March 31, 2008. The change in fair
value of these swaps from inception through March 31, 2008 is a liability of $0.5 million, which is included in accounts payable and accrued expenses on the balance sheet and accumulated other comprehensive loss in the statement of
shareholders equity. The fair value of the interest rate swap agreements are based upon the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate market pricing models
and observable inputs. Amounts reported in accumulated other comprehensive loss will be reclassified to interest expense as interest payments are made on the variable rate debt through the termination date of November 6, 2008.

Funds From Operations

Funds from operations (FFO) is a
supplemental non-GAAP financial measure of real estate companies operating performance. The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as follows: net income, computed in accordance with the U.S.
GAAP, plus depreciation and amortization of real estate assets and excluding extraordinary items and gains and losses on the sale of real estate. We compute FFO in accordance with the NAREIT definition, and we have historically reported our FFO
available for common shareholders in addition to our net income and net cash provided by operating activities. It should be noted that FFO:



| |  |  | does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other
events in the determination of net income);
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | should not be considered an alternative to net income as an indication of our performance; and
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | is not necessarily indicative of cash flow as a measure of liquidity or ability to fund cash needs, including the payment of dividends.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------

We consider FFO available for common shareholders a meaningful, additional measure of operating performance primarily because it
excludes the assumption that the value of the real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation. We use FFO primarily as one of several means of assessing our
operating performance in comparison with other REITs. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used
by such REITs.

An increase or decrease in FFO available for common shareholders does not necessarily result in an increase or decrease in aggregate
distributions because our Board of Trustees is not required to increase distributions on a quarterly basis unless necessary for us to maintain REIT status. However, we must distribute at least 90% of our REIT taxable income (including net capital
gain) to remain qualified as a REIT. Therefore, a significant increase in FFO will generally require an increase in distributions to shareholders although not necessarily on a proportionate basis.



25



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##### Table of Contents

The reconciliation of net income to FFO available for common shareholders is as follows:



|                                                                           |  |                                      |        |   |      |   |        |  
|-------------------------------------------------------------------------- |  | ------------------------------------ | ------ | - | ---- | - | ------ | -
|                                                                           |  | For the Three Months EndedMarch 31,  |       
|                                                                           |  | 2008                                 |        |   | 2007 |  
|                                                                           |  | (In thousands, exceptper share data) |       
|Net income                                                                 |  | $                                    | 29,986 |   |      | $ | 23,136 |  
|Depreciation and amortization of real estate assets                        |  |                                      | 22,950 |   |      |   | 23,942 |  
|Amortization of initial direct costs of leases                             |  |                                      | 2,022  |   |      |   | 2,070  |  
|Depreciation of joint venture real estate assets                           |  |                                      | 330    |   |      |   | 268    |  
|                                                                           |  |                                      |        |   |      |   |        |  
|Funds from operations                                                      |  |                                      | 55,288 |   |      |   | 49,416 |  
|Dividends on preferred stock                                               |  |                                      | (135   | ) |      |   | (36    | )
|Income attributable to operating partnership units                         |  |                                      | 232    |   |      |   | 245    |  
|                                                                           |  |                                      |        |   |      |   |        |  
|Funds from operations available for common shareholders                    |  | $                                    | 55,385 |   |      | $ | 49,625 |  
|                                                                           |  |                                      |        |   |      |   |        |  
|Weighted average number of common shares, diluted (1)                      |  |                                      | 59,192 |   |      |   | 56,345 |  
|                                                                           |  |                                      |        |   |      |   |        |  
|Funds from operations available for common shareholders, per diluted share |  | $                                    | 0.94   |   |      | $ | 0.88   |  
|                                                                           |  |                                      |        |   |      |   |        |  



|(1) | The weighted average common shares used to compute FFO per diluted common share includes operating partnership units that were excluded from the computation of diluted EPS.
Conversion of these operating partnership units is dilutive in the computation of FFO per diluted common share but is anti-dilutive in the computation of diluted EPS for the periods presented.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Our use
of financial instruments, such as debt instruments, subjects us to market risk which may affect our future earnings and cash flows, as well as the fair value of our assets. Market risk generally refers to the risk of loss from changes in interest
rates and market prices. We manage our market risk by attempting to match anticipated inflow of cash from our operating, investing and financing activities with anticipated outflow of cash to fund debt payments, dividends to common and preferred
shareholders, investments, capital expenditures and other cash requirements.

We also enter into certain types of derivative financial instruments to
further reduce interest rate risk. We use interest rate protection and swap agreements, for example, to convert some of our variable rate debt to a fixed-rate basis or to hedge anticipated financing transactions. We use derivatives for hedging
purposes rather than speculation and do not enter into financial instruments for trading purposes. We are exposed to credit loss in the event of non-performance by the counter party to our interest rate swap agreements used to fix the variable
portion of our $200 million term note. The counter party of these swaps has a long-term debt rating of AA- by Standards and Poors Rating Service and Aa2 by Moodys Investor Service as of March 31, 2008.

Interest Rate Risk

The following discusses the effect
of hypothetical changes in market rates of interest on interest expense for our variable rate debt and on the fair value of our total outstanding debt, including our fixed-rate debt. Interest rate risk amounts were determined by considering the
impact of hypothetical interest rates on our debt. This analysis does not purport to take into account all of the factors that may affect our debt, such as the effect that a changing interest rate environment could have on the overall level of
economic activity or the action that our management might take to reduce our exposure to the change. This analysis assumes no change in our financial structure.

Fixed Interest Rate Debt

The majority of our outstanding debt obligations (maturing at various times through 2031 or through 2106 including
capital lease obligations) have fixed interest rates which limit the risk of fluctuating interest rates. However, interest rate fluctuations may affect the fair value of our fixed rate debt instruments. At March 31, 2008 we had $1.4 billion of
fixed-rate debt outstanding. On February 21, 2008, we entered into two interest rate swap agreements to fix the variable portion of our $200 million term note through November 6, 2008 which effectively fixed the interest rate on the term
note. If interest rates on our fixed-rate debt instruments at March 31, 2008 had been 1.0% higher, the fair value of those debt instruments on that date would have decreased by approximately $57.9 million. If interest rates on our
fixed-rate debt instruments at March 31, 2008 had been 1.0% lower, the fair value of those debt instruments on that date would have increased by approximately $66.8 million.



26



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##### Table of Contents

Variable Interest Rate Debt

We believe that our primary interest rate risk is due to fluctuations in interest rates on our variable rate debt. At March31, 2008, we had $9.4 million of variable rate debt outstanding excluding the $200 million term loan as
the interest rate is effectively fixed by our two swap agreements. Based upon this amount of variable rate debt, if interest rates increased 1.0%, our annual interest expense would increase by approximately $90,000, and our net income and cash flows
for the year would decrease by approximately $90,000. Conversely, if interest rates decreased 1.0%, our annual interest expense would decrease by approximately $90,000, and our net income and cash flows for the year would increase by approximately
$90,000.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Periodic Evaluation and Conclusion of
Disclosure Controls and Procedures

An evaluation has been performed, under the supervision and with the participation of our management, including our
Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2008. Based on this evaluation, our management, including our Chief Executive
Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of March 31, 2008 to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal controls over
financial reporting during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



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##### Table of Contents

PART IIOTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

In May 2003, First National Mortgage Company
filed a complaint against us in the United States District Court for the Northern District of California. The complaint alleged that a one page document entitled Final Proposal, which included language that it was subject to approval of
formal documentation, constituted a ground lease of a parcel of property located adjacent to our Santana Row property and gave First National Mortgage Company the option to require that we acquire the property at a price determined in accordance
with a formula included in the Final Proposal. A trial as to liability only was held in June 2006 and a jury rendered a verdict against us. A trial on the issue of damages was held in April 2008; however, the judge has not yet issued a
ruling. Reports from our experts and the plaintiffs experts show potential damages ranging from $600,000 to $24 million. Pending the judges ruling, we cannot make a reasonable estimate of potential damages. We intend to appeal the jury
verdict; however, no appeal of the judgment can be taken until the judge issues his ruling on damages. If we are not successful in overturning the jury verdict, we will be liable for damages. Depending on the amount of damages awarded, it is
possible, there could be a material adverse impact on our net income in the period in which it becomes both probable that we will have to pay the damages and such damages can be reasonably estimated. In any event, management does not believe it will
have a material impact on our financial position.

We are also involved in a litigation matter relating to a shopping center in New Jersey where a former
tenant has alleged that we and our management agent acted improperly by failing to disclose a condemnation action at the property that was pending when the lease was signed. A trial as to liability only has been concluded and post-trial briefs have
been filed, but no decision has been rendered. One of the plaintiffs in the matter has filed for bankruptcy protection and as a result, the judge in our case has stayed further proceedings in the case. If we are found liable once the stay has been
lifted, a trial will be held to determine the amount of damages. Based on the information available to us, we believe there is a reasonable possibility that we will be found liable. If a verdict is rendered against us, we may seek indemnification
from the third party management company that negotiated the lease on our behalf. We cannot assess with any certainty at this time the potential damages for which we would be liable if a verdict is rendered against us or the potential amounts we
might recover against the third party management company; however, if a verdict is rendered against us, there may be a material adverse impact on our net income in the period in which it becomes both probable that we will have to pay the damages and
such damages can be reasonably estimated. In any event, management does not believe it will have a material impact on our financial position.



|Item 1A. | Risk Factors
|-------- | ------------

There have been no material changes to the risk
factors previously disclosed in our Annual Report for the year ended December 31, 2007 filed with the Securities and Exchange Commission on February 27, 2008. These factors include, but are not limited to, the following:



| |  |  | risks that our tenants will not pay rent or that we may be unable to renew leases or re-let space at favorable rents as leases expire;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | risks that we may not be able to proceed with or obtain necessary approvals for any redevelopment or renovation project, and that any redevelopment or renovation
project that we do pursue may not perform as anticipated;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | risks that the number of properties we acquire for our own account, and therefore the amount of capital we invest in acquisitions, may be impacted by our real
estate partnership;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | risks normally associated with the real estate industry, including risks that:
| | - |  | ------------------------------------------------------------------------------



| |  |  | occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected,
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | completion of anticipated or ongoing property redevelopments or renovations may cost more, take more time to complete, or fail to perform as expected,
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | new acquisitions may fail to perform as expected,
| | - |  | -------------------------------------------------



| |  |  | competition for acquisitions could result in increased prices for acquisitions,
| | - |  | -------------------------------------------------------------------------------



| |  |  | environmental issues may develop at our properties and result in unanticipated costs, and
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | because real estate is illiquid, we may not be able to sell properties when appropriate;
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | risks that our growth will be limited if we cannot obtain additional capital;
| | - |  | -----------------------------------------------------------------------------



| |  |  | risks of financing, such as our ability to consummate additional financings or obtain replacement financing on terms which are acceptable to us, our ability to meet
existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| |  |  | risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax
regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None



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

None



|Item 5. | Other Information
|------- | -----------------

We intend to hold our Annual Meeting of
Shareholders on May 7, 2008.



|Item 6. | Exhibits
|------- | --------

A list of exhibits to this Quarterly Report on Form 10-Q
is set forth on the Exhibit Index immediately preceding such exhibits and is incorporated herein by reference.



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto authorized.



|            |  |                                               
|----------- |  | ----------------------------------------------
|            |  | FEDERAL REALTY INVESTMENT TRUST               
|            | 
|May 7, 2008 |  | /s/ DONALD C. WOOD                            
|            |  | Donald C. Wood,                               
|            |  | President, Chief Executive Officer and Trustee
|            |  | (Principal Executive Officer)                 



|            |  |                                                                     
|----------- |  | --------------------------------------------------------------------
|May 7, 2008 |  | /s/ JOSEPH M. SQUERI                                                
|            |  | Joseph M. Squeri,                                                   
|            |  | Executive Vice President and                                        
|            |  | Chief Financial Officer (Principal Financial and Accounting Officer)



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##### Table of Contents

EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|            | 
|3.1         |  | Declaration of Trust of Federal Realty Investment Trust dated May 5, 1999 as amended by the Articles of Amendment of Declaration of Trust of Federal Realty Investment Trust dated May 6,
2004, as corrected by the Certificate of Correction of Articles of Amendment of Declaration of Trust of Federal Realty Investment Trust dated June 17, 2004 (previously filed as Exhibit 3.1 to the Trusts Quarterly Report on Form 10-Q for the
quarter ended June 30, 2005 (File No. 1-07533) (the 2005 2Q Form 10-Q) and incorporated herein by reference)
|            | 
|3.2         |  | Amended and Restated Bylaws of Federal Realty Investment Trust dated February 12, 2003, as amended October 29, 2003, May 5, 2004 and February 17, 2006 (previously filed as Exhibit 3.2 to the
Trusts Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 1-07533) (the 2005 Form 10-K) and incorporated herein by reference)                                                                                                                                                                                                    
|            | 
|4.1         |  | Specimen Common Share certificate (previously filed as Exhibit 4(i) to the Trusts Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-07533) and
incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                               
|            | 
|4.2         |  | Articles Supplementary relating to the 5.417% Series 1 Cumulative Convertible Preferred Shares of Beneficial Interest (previously filed as Exhibit 4.1 to the Trusts Current
Report on Form 8-K filed on March 13, 2007, (File No. 1-07533) and incorporated herein by reference)                                                                                                                                                                                                                                                                        
|            | 
|4.3         |  | Amended and Restated Rights Agreement, dated March 11, 1999, between the Trust and American Stock Transfer & Trust Company (previously filed as Exhibit 1 to the Trusts Registration
Statement on Form 8-A/A filed on March 11, 1999 (File No. 1-07533) and incorporated herein by reference)                                                                                                                                                                                                                                                            
|            | 
|4.4         |  | First Amendment to Amended and Restated Rights Agreement, dated as of November 2003, between the Trust and American Stock Transfer & Trust Company (previously filed as Exhibit 4.5 to the
Trusts Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 1-07533) and incorporated herein by reference)                                                                                                                                                                                                                               
|            | 
|4.5         |  | Indenture dated December 13, 1993 related to the Trusts 7.48% Debentures due August 15, 2026; and 6.82% Medium Term Notes due August 1, 2027; (previously filed as Exhibit
4(a) to the Trusts Registration Statement on Form S-3 (File No. 33-51029), and amended on Form S-3 (File No. 33-63687), filed on December 13, 1993 and incorporated herein by reference)                                                                                                                                                                                     
|            | 
|4.6         |  | Indenture dated September 1, 1998 related to the Trusts 8.75% Notes due December 1, 2009; 61/8% Notes due November 15, 2007; 4.50% Notes due 2011; 5.65% Notes due 2016; 6.00% Notes due 2012; 6.20% Notes due 2017; and 5.40% Notes due 2013 (previously filed as Exhibit 4(a) to the Trusts
Registration Statement on Form S-3 (File No. 333-63619) filed on September 17, 1998 and incorporated herein by reference)                                                                                                                                 
|            | 
|4.7         |  | Pursuant to Regulation S-K Item 601(b)(4)(iii), the Trust by this filing agrees, upon request, to furnish to the Securities and Exchange Commission a copy of other instruments defining the
rights of holders of long-term debt of the Trust                                                                                                                                                                                                                                                                                                             
|            | 
|10.1        |  | Amended and Restated 1993 Long-Term Incentive Plan, as amended on October 6, 1997 and further amended on May 6, 1998 (previously filed as Exhibit 10.26 to the Trusts Annual
Report on Form 10-K for the year ended December 31, 1998 (File No. 1-07533) and incorporated herein by reference)                                                                                                                                                                                                                                                           
|            | 
|10.2        |  | Fiscal Agency Agreement dated as of October 28, 1993 between the Trust and Citibank, N.A. (previously filed as an exhibit to the Trusts Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993 (File No. 1-07533) and incorporated herein by reference)                                                                                                                                                                                                                                                                                  



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##### Table of Contents

|            |  |                                                                                                                                                                                                                                                                                                                      
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                          
|            | 
|10.3        |  | Form of Severance Agreement between the Trust and Certain of its Officers dated December 31, 1994 (previously filed as a portion of Exhibit 10 to the Trusts Annual Report on
Form 10-K for the year ended December 31, 1994 (File No. 1-07533) and incorporated herein by reference)                               
|            | 
|10.4        |  | Severance Agreement between the Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the Trusts Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999 (File No. 1-07533) (the 1999 1Q Form 10-Q) and incorporated herein by reference)                   
|            | 
|10.5        |  | Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the 1999 1Q Form 10-Q and
incorporated herein by reference)                                                                                                   
|            | 
|10.6        |  | Amendment to Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.12 to the Trusts Annual Report
on Form 10-K for the year ended December 31, 2004 (File No. 1-07533) (the 2004 Form 10-K) and incorporated herein by reference)
|            | 
|10.7        |  | Split Dollar Life Insurance Agreement dated August 12, 1998 between the Trust and Donald C. Wood (previously filed as a portion of Exhibit 10 to the Trusts Annual
Report on Form 10-K for the year ended December 31, 2000 (File No. 1-07533) and incorporated herein by reference)                                
|            | 
|10.8        |  | Severance Agreement between the Trust and Jeffrey S. Berkes dated March 1, 2000 (previously filed as a portion of Exhibit 10 to the Trusts Annual Report on Form 10-K for the
year ended December 31, 2001 (File No. 1-07533) and incorporated herein by reference)                                                 
|            | 
|10.9        |  | Amendment to Severance Agreement between Federal Realty Investment Trust and Jeffrey S. Berkes dated February 16, 2005 (previously filed as Exhibit 10.17 to the 2004 Form 10-K and incorporated
herein by reference)                                                                                                
|            | 
|10.10       |  | Severance Agreement dated March 1, 2002 between the Trust and Larry E. Finger (previously filed as a portion of Exhibit 10 to the Trusts Quarterly Report on Form 10-Q for the quarter
ended June 30, 2002 (File No. 1-07533) and incorporated herein by reference)                                                 
|            | 
|10.11       |  | Amendment to Severance Agreement between Federal Realty Investment Trust and Larry E. Finger dated February 16, 2005 (previously filed as Exhibit 10.19 to the 2004 Form 10-K and incorporated
herein by reference)                                                                                                  
|            | 
|10.12       |  | Amendment to Stock Option Agreement dated August 15, 2002 between the Trust and Dawn M. Becker (previously filed as a portion of Exhibit 10 to the Trusts Quarterly Report on
Form 10-Q for the quarter ended September 30, 2002 (File No. 1-075330 and incorporated herein by reference)                           
|            | 
|10.13       |  | 2001 Long-Term Incentive Plan (previously filed as Exhibit 99.1 to the Trusts S-8 Registration Number 333-60364 filed on May 7, 2001 and incorporated herein by
reference)                                                                                                                                          
|            | 
|10.14       |  | Health Coverage Continuation Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.26 to the 2004 Form 10-K and
incorporated herein by reference)                                                                                             
|            | 
|10.15       |  | Severance Agreement between the Trust and Dawn M. Becker dated April 19, 2000 (previously filed as Exhibit 10.26 to the Trusts 2005 2Q Form 10-Q and incorporated herein by
reference)                                                                                                                              



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##### Table of Contents

|            |  |                                                                                                                                                                                                                                                                                                                                              
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                  
|            | 
|10.16       |  | Amendment to Severance Agreement between the Trust and Dawn M. Becker dated February 16, 2005 (previously filed as Exhibit 10.27 to the 2004 Form 10-K and incorporated herein by reference)                                                                                                                                                 
|            | 
|10.17       |  | Form of Restricted Share Award Agreement for awards made under the Trusts 2003 Long-Term Incentive Award Program for shares issued out of 2001 Long-Term Incentive Plan (previously filed as
Exhibit 10.28 to the 2004 Form 10-K and incorporated herein by reference)                                                                      
|            | 
|10.18       |  | Form of Restricted Share Award Agreement for awards made under the Trusts Annual Incentive Bonus Program for shares issued out of 2001 Long-Term Incentive Plan (previously filed as Exhibit
10.29 to the 2004 Form 10-K and incorporated herein by reference)                                                                              
|            | 
|10.19       |  | Form of Option Award Agreement for options awarded under 2001 Long-Term Incentive Plan (previously filed as Exhibit 10.30 to the 2004 Form 10-K and incorporated herein by
reference)                                                                                                                                                        
|            | 
|10.20       |  | Form of Option Award Agreement for awards made under the Trusts 2003 Long-Term Incentive Award Program for shares issued out of the 2001 Long-Term Incentive Plan (previously filed as
Exhibit 10.32 to the 2005 Form 10-K and incorporated herein by reference)                                                                            
|            | 
|10.21       |  | Credit Agreement dated as of July 28, 2006, by and between the Trust, Wachovia Capital Markets LLC, Wachovia Bank, National Association and various other financial institutions (previously filed
as Exhibit 10.1 to the Trusts Current Report on Form 8-K (File No. 1-07533), filed on July 31, 2006 and incorporated herein by reference)
|            | 
|10.22       |  | Amended and Restated 2001 Long-Term Incentive Plan (previously filed as Exhibit 10.34 to the Trusts Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 (File No. 1-07533) and
incorporated herein by reference)                                                                                                              
|            | 
|10.23       |  | Restricted Share Award Agreement between the Trust and Joseph M. Squeri dated October 1, 2007 (previously filed as Exhibit 10.23 to the Trusts Annual Report on Form 10-K for the year ended
December 31, 2007 (File No 1-07533) (the 2007 Form 10-K) and incorporated herein by reference)                                               
|            | 
|10.24       |  | Severance Agreement between the Trust and Joseph M. Squeri dated October 1, 2007 (previously filed as Exhibit 10.24 to the 2007 Form 10-K and incorporated herein by reference)                                                                                                                                                              
|            | 
|10.25       |  | Credit Agreement dated as of November 9, 2007, by and between the Trust, Wachovia Capital Markets LLC, Wachovia Bank, National Association and various other financial institutions (previously
filed as Exhibit 10.25 to the 2007 Form 10-K and incorporated herein by reference)                                                           
|            | 
|10.26       |  | Consulting Agreement between the Trust and Larry E. Finger dated January 1, 2008 (previously filed as Exhibit 10.26 to the 2007 Form 10-K and incorporated herein by reference)                                                                                                                                                              
|            | 
|31.1        |  | Rule 13a-14(a) Certification of Chief Executive Officer (filed herewith)                                                                                                                                                                                                                                                                     
|            | 
|31.2        |  | Rule 13a-14(a) Certification of Chief Financial Officer (filed herewith)                                                                                                                                                                                                                                                                     
|            | 
|32.1        |  | Section 1350 Certification of Chief Executive Officer (filed herewith)                                                                                                                                                                                                                                                                       
|            | 
|32.2        |  | Section 1350 Certification of Chief Financial Officer (filed herewith)                                                                                                                                                                                                                                                                       



33