|                                                                                                                                                        
|--------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT 99.3
PRC MEMBER LLC AND SUBSIDIARYCONSOLIDATED FINANCIAL STATEMENTSFOR THE PERIOD FROM SEPTEMBER 10, 2004(DATE OF INCEPTION)TO DECEMBER 31, 2004
|                                                                                                                                                        

|
|



|PRC MEMBER LLC AND SUBSIDIARYCONSOLIDATED FINANCIAL STATEMENTSFOR THE PERIOD FROM SEPTEMBER 10, 2004(DATE OF INCEPTION)TO DECEMBER 31, 2004
TABLE OF CONTENTS
|-------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                             

|Page No.                                  
|------------------------------------------
|                                          
|Independent Auditors Report              
|Consolidated Balance Sheet                
|Consolidated Statement of Operations      
|Consolidated Statement of Members Capital
|Consolidated Statement of Cash Flows      
|Notes to Financial Statements             
|                                          

|
|



|INDEPENDENT AUDITORS REPORT
To the MembersPRC Member LLCWhite Plains, New York
We have audited the accompanying consolidated balance sheet of PRC Member LLC and Subsidiary (the Company)
as of December 31, 2004, and the related consolidated statements of operations, members capital,
and cash flows for the period from September 10, 2004 (date of inception) to December 31, 2004. These
financial statements are the responsibility of the Companys management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of the Company as of December 31, 2004 and the consolidated
results of its operations and its cash flows for the period from September 10, 2004 (date of inception)
to December 31, 2004, in conformity with accounting principles generally accepted in the United States
of America.


The Schonbraun McCann Group LLCRoseland, New JerseyFebruary 24, 2005
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

|
|



|PRC MEMBER LLC AND SUBSIDIARYCONSOLIDATED BALANCE SHEETDECEMBER 31, 2004(Dollar amounts in thousands)
|-----------------------------------------------------------------------------------------------------
|                                                                                                     
|                                                                                                     

|ASSETS                                                                     |  
|-------------------------------------------------------------------------- | -
|                                                                           |  
|Investment in real estate, at cost net of accumulated depreciation of $163 | $
|                                                                           |  
|Other Assets                                                               |  
|Cash and cash equivalents                                                  |  
|Escrow deposits                                                            |  
|Rents and other receivables                                                |  
|In place lease value, net of accumulated amortization of $245              |  
|Acquired lease rights, net of accumulated amortization of $82              |  
|Deferred financing costs, net of accumulated amortization of $64           |  
|Other assets                                                               |  
|                                                                           |  
|                                                                           |  
|                                                                           | $
|                                                                           |  
|                                                                           |  
|LIABILITIES AND MEMBERS EQUITY                                            |  
|                                                                           |  
|Liabilities                                                                |  
|Mortgage note payable                                                      | $
|Mezzanine note payable  members                                           |  
|Due to affiliates                                                          |  
|Deferred revenue                                                           |  
|Accounts payable, accrued expenses and other liabilities                   |  
|Acquired lease obligations, net of accumulated amortization of $36         |  
|                                                                           |  
|                                                                           |  
|                                                                           |  
|Members Equity                                                            |  
|                                                                           |  
|                                                                           |  
|                                                                           | $
|                                                                           |  

|                                                                                    
|------------------------------------------------------------------------------------
|The accompanying notes are an integral part of the consolidated financial statement.

|2
|-



|PRC MEMBER LLC AND SUBSIDIARYCONSOLIDATED STATEMENT OF OPERATIONSFOR THE PERIOD FROM SEPTEMBER 10, 2004(DATE OF INCEPTION)TO DECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                           
|                                                                                                                                                                           

|Revenue                                            |   |       |  
|-------------------------------------------------- | - | ----- | -
|Rental                                             | $ | 954   |  
|Tenant reimbursements                              |   | 329   |  
|Interest and other income                          |   | 13    |  
|                                                   |   |      
|                                                   |   | 1,296 |  
|                                                   |   |      
|                                                   |   |       |  
|Expenses                                           |   |       |  
|Rental property operating and maintenance expenses |   | 440   |  
|Real estate taxes                                  |   | 97    |  
|Interest                                           |   | 435   |  
|Depreciation and amortization                      |   | 472   |  
|General and administrative                         |   | 73    |  
|                                                   |   |      
|                                                   |   | 1,517 |  
|                                                   |   |      
|                                                   |   |      
|Net Loss                                           | $ | (221  | )
|                                                   |   |      

|                                                                                    
|------------------------------------------------------------------------------------
|The accompanying notes are an integral part of the consolidated financial statement.

|3
|-



|PRC MEMBER LLC AND SUBSIDIARYCONSOLIDATED STATEMENT OF MEMBERS CAPITALFOR THE PERIOD FROM SEPTEMBER 10, 2004(DATE OF INCEPTION)TO DECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                 
|                                                                                                                                                                                 

|                             | Presidential
      Realty Corp. |       | David
      Lichtenstein |   | Cedar Asset
      Management, LLC |   | Total |   
|---------------------------- | ------------------------------- | ----- | ------------------------ | - | --------------------------------- | - | ----- | --
|                             |                                 |       |                          |   |                                   |   |       |   
|                             |                                 |       |                          |   |                                   |   |       |   
|Initial capital contribution | $                               | 1,438 |                          | $ |                                  |   | $     |  
|                             |                                 |       |                          |   |                                   |   |       |   
|Net loss                     |                                 | (64   | )                        |   | (155                              | ) |       | (2
|                             |                                 |       |                          |   |                                   |   |       |   
|                             |                                 |       |                          |   |                                   |   |       |   
|Balance at December 31, 2004 | $                               | 1,374 |                          | $ | (155                              | ) | $     | (2
|                             |                                 |       |                          |   |                                   |   |       |   

|                                                                                    
|------------------------------------------------------------------------------------
|The accompanying notes are an integral part of the consolidated financial statement.

|4
|-



|PRC MEMBER LLC AND SUBSIDIARYCONSOLIDATED STATEMENT OF CASH FLOWSFOR THE PERIOD FROM SEPTEMBER 10, 2004(DATE OF INCEPTION)TO DECEMBER 31, 2004(Dollar amounts in thousands)Increase (decrease) in cash
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                      
|                                                                                                                                                                                                      

|Cash Flows From Operating Activities:                    |   |         |  
|-------------------------------------------------------- | - | ------- | -
|Net loss                                                 | $ | (221    | )
|Adjustments to reconcile net loss to net cash            |   |         |  
|provided by operating activities:                        |   |         |  
|Depreciation and amortization                            |   | 472     |  
|Net change in revenue related to acquired lease          |   |         |  
|rights/obligations and deferred rent receivable          |   | 41      |  
|Rents and other receivables                              |   | (181    | )
|Escrow deposits                                          |   | (165    | )
|Other assets                                             |   | (27     | )
|Accounts payable, accrued expenses and other liabilities |   | 76      |  
|Due to affiliates, net                                   |   | 612     |  
|Deferred revenue                                         |   | 158     |  
|                                                         |   |        
|Net cash provided by operating activities                |   | 765     |  
|                                                         |   |        
|                                                         |   |         |  
|Cash Flows Used In Investing Activities:                 |   |         |  
|Real estate acquisition                                  |   | (27,247 | )
|                                                         |   |        
|Net cash used in investing activities                    |   | (27,247 | )
|                                                         |   |        
|                                                         |   |         |  
|Cash Flows From Financing Activities:                    |   |         |  
|Proceeds from mortgage loan payable                      |   | 22,962  |  
|Proceeds from mezzanine notes payable                    |   | 2,600   |  
|Deferred financing costs                                 |   | (513    | )
|Capital contribution                                     |   | 1,438   |  
|                                                         |   |        
|Net cash provided by financing activities                |   | 26,487  |  
|                                                         |   |        
|Net increase in cash and cash equivalents                |   | 5       |  
|                                                         |   |         |  
|Cash and cash equivalents, beginning of period           |   |        |  
|                                                         |   |        
|                                                         |   |         |  
|Cash and cash equivalents, end of period                 | $ | 5       |  
|                                                         |   |        
|                                                         |   |         |  
|                                                         |   |         |  
|Supplemental Disclosures of Cash Flow Information:       |   |         |  
|Cash paid during the period ended for:                   |   |         |  
|Interest                                                 | $ | 328     |  
|                                                         |   |        

|                                                                                    
|------------------------------------------------------------------------------------
|The accompanying notes are an integral part of the consolidated financial statement.

|5
|-



|PRC MEMBER LLC AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------
|                                                                                                                     
|                                                                                                                     

|1. | ORGANIZATION AND DESCRPTION OF BUSINESS
|-- | ---------------------------------------
|   |                                        
|   | a.                                     
|   |                                        
|   |                                        
|   |                                        

|                                            | Ownership
      Percentage |   | Initial
      Contributions |      
|------------------------------------------- | -------------------------- | - | --------------------------- | -----
|                                            |                            |   |                             |      
|                                            |                            |   |                             |      
|Presidential Realty Corp. (Managing Member) | 29                         | % | $                           | 1,438
|David Lichtenstein                          | 70                         | % |                             |     
|Cedar Asset Management, LLC                 | 1                          | % |                             |     
|                                            |                            |   |                             |      
|                                            |                            |   |                             |      
|                                            |                            |   | $                           | 1,438
|                                            |                            |   |                             |      

| |                                                           
| | ----------------------------------------------------------
| | b.          Cash Distribution, Profit and
Loss Allocations
| |                                                           

| | The Company commenced operations on September 10, 2004 and shall continue to operate until dissolved
  per the operating agreement. The liability of each of the members is limited to the amount of capital
  contributed.                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Distributions of proceeds shall be distributed to the Members at the reasonable discretion of the Managing
  Member, subject to the terms and conditions of all indebtedness of the Company; provided that cash
  flow shall be distributed not less than annually and capital proceeds shall be distributed not later
  than forty-five days from the closing of the transaction giving rise to such capital proceeds.

|6
|-



|PRC MEMBER LLC AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------
|                                                                                                                     
|                                                                                                                     

|1. | ORGANIZATION AND DESCRPTION OF BUSINESS (Continued)                   
|-- | ----------------------------------------------------------------------
|   |                                                                       
|   | b.          Cash Distribution, Profit and
Loss Allocations (continued)
|   |                                                                       

| | Distributions of cash flow shall be made to the members as follows:
| | -------------------------------------------------------------------
| |                                                                    

| | (a) | First, to the Managing Member, until the Managing Member has received an aggregate amount equal to
  an accrued return of 11% per annum (Preferred Return) of the Managing Members unreturned
  capital contribution ($1,438 as of December 31, 2004).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                          
| | (b) | Then, to the members in accordance with their respective ownership percentages.                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                          

| | Capital proceeds shall be distributed to the members as follows:
| | ----------------------------------------------------------------
| |                                                                 

| | (a) | First, to the Managing Member, until the Managing Member has received an aggregate amount equal to
  an accrued return of 11% per annum on the Managing Members unreturned capital contribution.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                  
| | (b) | Then, to the Managing Member, until the Managing Member has received an aggregate amount equal to the
  Managing Members capital contribution ($1,438 as of December 31, 2004).                 
| |     |                                                                                                                                                                                                  
| | (c) | Then, to the members in accordance with their respective ownership percentages.                                                                                                                  
| |     |                                                                                                                                                                                                  

| | c. | Allocation of Income and Losses                                                                                                                                          
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                          
| |    | For financial reporting purposes, income is allocated based upon the cash flow distribution formula above. Losses are allocated pro rata based upon membership interests.

|7
|-



|PRC MEMBER LLC AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------
|                                                                                                                     
|                                                                                                                     
|2.            SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES                                                             
|                                                                                                                     

| | a. | Basis of Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | The accompanying consolidated financial statements have been prepared on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | b. | Principles of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | The consolidated financial statements include the accounts PRC Member LLC and its wholly owned subsidiary Martinsburg Mall, LLC. All material intercompany transactions have been eliminated in consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | c. | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. They also affect reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the carrying amount of investments in real estate, valuation of receivables and the allocation of purchase price to acquired lease rights and obligations and in-place lease values. Actual results could differ from those amounts.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | d. | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | For purposes of the statement of cash flow, the Company considers short-term investments with maturities of 90 days or less when purchased to be cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | e. | Marketing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | General marketing and advertising costs are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

|8
|-



|PRC MEMBER LLC AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------
|                                                                                                                     
|                                                                                                                     
|2.            SUMMARY OF SIGNIFICANT ACCOUNTING




POLICIES (Continued)                                             
|                                                                                                                     

| | f.           Revenue Recognition and
Tenant Receivables
| | -------------------------------------------------------
| |                                                        

| | Base rental revenues from the Property are recognized on a straight-line basis over the noncancelable
  terms of the related leases, which are all accounted for as operating leases. Percentage rent
  or rental revenue which is based upon a percentage of the sales recorded by the Companys tenants,
  is recognized in the period in which the tenants achieve their specified threshold per their lease
  agreements. These amounts are included in rental revenue in the accompanying consolidated financial
  statements.                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | Rental income is also recognized in accordance with Statement of Financial Accounting Standards (SFAS)
  No. 141, Business Combinations, whereby the amortization of acquired favorable leases and acquired
  unfavorable leases is recognized as a reduction of or an addition to base rental income, respectively,
  over the terms of the respective leases. The net amount included as an addition to base rental income
  for the period ended December 31, 2004, was approximately $46.                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | Reimbursements from tenants related to real estate taxes, insurance and certain other operating expenses
  are recognized as revenue, based on a predetermined formula, in the period the applicable costs are
  incurred. Lease termination fees are recognized when the related leases are cancelled, the tenant
  surrenders the space, and the Company has no continuing obligation to provide services to such former
  tenants.                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | The Company provides an allowance for doubtful accounts against the portion of tenant receivables which
  is estimated to be uncollectible. Management of the Company reviews its allowance for doubtful accounts
  monthly. Balances that are past due over 90 days and over a specified amount are reviewed individually
  for collectibility. Account balances are charged off against the allowance after all means of collection
  have been exhausted and the potential for recovery is considered doubtful. Allowance for doubtful
  accounts for the period ended December 31, 2004 was approximately $10. Two national retail tenants
  accounted for approximately 37% of rents and other receivables, one tenant accounted for 24% and
  the other for 13%, at December 31, 2004.

|9
|-



|PRC MEMBER LLC AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------
|                                                                                                                     
|                                                                                                                     
|2.            SUMMARY OF SIGNIFICANT ACCOUNTING




POLICIES (Continued)                                             
|                                                                                                                     

| | g.          Deferred Charges
| | ----------------------------
| |                             

| | Deferred leasing commissions, acquired in-place lease value, and other direct costs associated with
  the acquisition of tenants are capitalized and amortized on a straight-line basis over the terms
  of the related leases. Loan costs are capitalized and amortized to interest expense over the term
  of the related loan using a method that approximates the effective-interest method.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                 

| | h.          Real Estate and Depreciation
| | ----------------------------------------
| |                                         

| | Real estate is stated at historical cost less accumulated depreciation. The building and improvements
  thereon are depreciated on the straight-line basis over an estimated useful life of 40 years. Tenant
  improvements are depreciated on the straight-line basis over the shorter of the lease term or their
  estimated useful life. Equipment is being depreciated on the straight-line basis over estimated useful
  lives of 5 to 7 years.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Improvements and replacements are capitalized when they extend the useful life or improve the efficiency
  of the asset. Repairs and maintenance are charged to expense as incurred.                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | i.           Impairment of Long-Lived Assets
| | --------------------------------------------
| |                                             

| | Management assesses whether there has been impairment in the value of its long-lived assets whenever
  events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.
  Recoverability of assets to be held and used is measured by a comparison of the carrying amount to
  the future net cash flows, undiscounted and without interest, expected to be generated by the asset.
  If such assets are considered to be impaired, the impairment to be recognized is measured by the
  amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to
  be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.
  Management believes no impairment in the net carrying values of the investments in real estate has occurred.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10
|--



|PRC MEMBER LLC AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------
|                                                                                                                     
|                                                                                                                     
|2.            SUMMARY OF SIGNIFICANT ACCOUNTING




POLICIES (Continued)                                             
|                                                                                                                     

| | j.           Purchase Accounting for

Acquisition of Interest in Real Estate Entities
| | -------------------------------------------------------------------------------------
| |                                                                                      

| | Management allocated the purchase price of property to tangible and identified intangible assets acquired
  based on its fair value in accordance with the provisions of SFAS No. 141, Business Combinations.
  The fair value of the tangible assets of an acquired property (which includes land, building,
  and improvements) is determined by valuing the property as if it were vacant, and the as-if-vacant
  value is then allocated to land, building and improvements based on managements determination
  of the relative fair values of these assets. Management determines the as-if-vacant fair
  value of a property using methods similar to those used by independent appraisers.                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Factors considered by management in performing analyses of the value of identified intangible assets
  acquired include an estimate of carrying costs to execute similar leases. In estimating carrying
  costs, management includes real estate taxes, insurance and other operating expenses and estimates
  of lost rental revenue during the expected lease-up periods based on current market demand. Management
  also estimates costs to execute similar leases including leasing commissions, legal and other related
  costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | In allocating the fair value of the identified intangible assets and liabilities of an acquired property,
  above-market and below-market in-place lease values are recorded based on the present value (using
  an interest rate which reflects the risks associated with the leases acquired) of the difference
  between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) managements
  estimate of fair market lease rates for the corresponding in-place leases, measured over a period
  equal to the remaining non-cancelable term of the lease. The capitalized above-market lease values
  (included in the acquired lease rights in the accompanying consolidated balance sheet) are amortized
  as a reduction of rental income over the remaining non-cancelable terms of the respective leases.
  The capitalized below-market lease values (presented as acquired lease obligations in the accompanying
  consolidated balance sheet) are amortized as an increase to rental income over the initial term in
  the respective leases.

|11
|--



|PRC MEMBER LLC AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------
|                                                                                                                     
|                                                                                                                     
|2.            SUMMARY OF SIGNIFICANT ACCOUNTING




POLICIES (Continued)                                             
|                                                                                                                     

| | j.           Purchase Accounting for

Acquisition of Interest in Real Estate Entities
| | -------------------------------------------------------------------------------------
| |                                                                                      

| | (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | The aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationships,
  is measured by the excess of (i) the purchase price paid for a property after adjusting existing
  in-place leases to market rental rates over (ii) the estimated fair value of the property as if vacant,
  determined as set forth above. This aggregate value is allocated between in-place lease values and
  tenant relationships based on managements evaluation of the specific characteristics of each
  tenants lease; however, the value of tenant relationships has not been separated from in-place
  lease value for the additional interests in real estate entities acquired by the Company because
  such value and its consequence to amortization expense is immaterial for this particular acquisition.
  The value of in-place leases exclusive of the value of above-market and below-market in-place leases
  is amortized to expense over the remaining non-cancelable periods of the respective leases. If a
  lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that
  lease would be written off.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Purchase accounting was applied, on a pro-rata basis, to the assets and liabilities related to the
  Property. The results of operations of the Property since acquisition are included in the accompanying
  consolidated statement of operations of the Company. The purchase price of the Property, including
  closing costs, was $27,247. The fair value of the real estate acquired was allocated to the acquired
  tangible assets, consisting of land and building and improvements, and identified intangible assets
  and liabilities, consisting of the value of above-market and below-market leases, other value of
  in-place leases and value of tenant relationship, if any, based in each case on their fair values.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | The following are the amounts assigned to each major asset and liability caption at the acquisition
date:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|Land                           | $ | 6,875  |  
|------------------------------ | - | ------ | -
|Building and improvements      |   | 13,756 |  
|Tenant improvements            |   | 2,790  |  
|Acquired lease rights (1)      |   | 1,843  |  
|Acquired lease obligations (1) |   | (781   | )
|In-place lease value (1)       |   | 2,764  |  
|                               |   |       
|                               |   |        |  
|                               | $ | 27,247 |  
|                               |   |       

| |     |                                                                                                                                                                            
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | These intangibles are being amortized over the remaining lease terms. The weighted average remaining
  lease terms are 10.5 years, 14.4 years and 15.9 years, respectively.

|12
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|PRC MEMBER LLC AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------
|                                                                                                                     
|                                                                                                                     
|2.           SUMMARY OF SIGNIFICANT ACCOUNTING




POLICIES (Continued)                                              
|                                                                                                                     

| | k.           Income Taxes
| | -------------------------
| |                          

| | The Company is a limited liability company which elected to be treated as a partnership for tax purposes
  and is, therefore, not subject to income taxes at the entity level. All income and losses pass through
  to the members and are reported by them individually for income tax purposes.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|   |                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | ESCROW DEPOSITS                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                            
|   | Escrow deposits include funds and other restricted deposits required in conjunction with the Companys
  loan agreement. Such amounts are to be used for specific purposes, such as the payment of real estate
  taxes, insurance and capital improvements.

|                                                                                       
|---------------------------------------------------------------------------------------
|4.             REAL ESTATE
At
December 31, 2004, real estate consists of the following:
|                                                                                       

|Land                          | $ | 6,875  | 
|----------------------------- | - | ------ | 
|Building and improvements     |   | 13,756 | 
|Tenant improvements           |   | 2,790  | 
|                              |   |       
|                              |   | 23,421 | 
|Less accumulated depreciation |   | 163    | 
|                              |   |       
|                              |   |        | 
|                              | $ | 23,258 | 
|                              |   |       

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | MORTGAGE NOTE PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On September 23, 2004, the Company with its affiliates, Lightstone Member LLC and Subsidiaries, borrowed
  $105 million from Wachovia Bank, at an interest rate of LIBOR plus 360 basis points (approximately 6% at December 31, 2004). The loan is payable interest only monthly
  and is secured by the real estate, an assignment of leases, rent and security deposits of Martinsburg
  Mall, LLC, Shenango Valley Mall, LLC, Mount Berry Square Mall, LLC, West Manchester Mall, LLC and
  Bradley Mall, LLC. The Company and its affiliate allocated $22,962 of the $105,000 mortgage loan
  to Martinsburg Mall, LLC. The loan matures in October 2006, with three one-year options to extend
  the loan for an extension fee of .125% of outstanding principal and repayment of a certain amount
of principal.

|13
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|PRC MEMBER LLC AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------
|                                                                                                                     
|                                                                                                                     

|6. | MEZZANINE NOTE PAYABLE - MEMBERS                                                                                                                                                                                                                                                                                                                                                                  
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company borrowed $2,600 from David Lichtenstein and Cedar Asset Management, LLC, members of the
  Company. The loans bear interest of 11% per annum, payable interest only monthly. The entire loan
  balances are due in September 2014. The loans are secured by an assignment of the Companys
  ownership interest in its subsidiary, subject to the first mortgage lien to Wachovia Bank.
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The loan has a prepayment penalty of 3% of principal. As of December 31, 2004, $75 was accrued as interest
  expense and is included in due to affiliates on the accompanying consolidated balance sheet.                                                                                                                                                                                         

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On September 24, 2004, the Company and an affiliate, Lightstone Member LLC (Lightstone)
  purchased five properties for a total of $110,675 from a third party. The Company and Lightstone
  allocated $27,000 and $247 to the purchase price and related costs associated with purchase of the
  Property, respectively, to the Company. These allocations were based upon a third-party appraisal.                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In accordance with the mortgage note agreement, all cash receipts of the Company are deposited directly
  into a restricted lockbox account. Receipts are transferred daily to a restricted cash account held
  by Lightstone until the debt service is satisfied. Any excess cash is then transferred to an account
  held by Lightstone to pay the Propertys operating expenses. Lightstone received and is holding
  the Companys receipts in excess of the Companys expenses. Such amount is netted in the
  amounts due to affiliates in the accompanying consolidated balance sheet.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | As of December 31, 2004, Prime Retail, the Propertys management company, which is an affiliate
  of certain members, charged $40 for management fees to the Company. This amount is netted in due
  to affiliates in the accompanying consolidated balance sheet.                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| | The  balance  in  due to affiliates represents a non-interest bearing advance from
  affiliated entities and is due upon demand.
| | --------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                 
| | See Note 6 for additional related party transactions.                                                                           

|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|8. | RENTALS UNDER OPERATING LEASES                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company receives rental income from the leasing of retail shopping center space under operating
  leases. The Company recognizes income from its tenant operating leases on a straight-line basis over
  the respective lease terms and, accordingly, rental income in a given period will vary from actual
  contractual rental amounts due. In 2004, straight-line rent exceeded contractual rent by approximately
  $6.

|14
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|PRC MEMBER LLC AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2004(Dollar amounts in thousands)
|---------------------------------------------------------------------------------------------------------------------
|                                                                                                                     
|                                                                                                                     

|8. | RENTALS UNDER OPERATING LEASES (Continued)                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------
|   |                                                                                                                  
|   | The minimum future base rentals due under non-cancelable operating leases as of December 31, 2004 are as follows:
|   |                                                                                                                  

|2005       | $ | 2,691  | 
|---------- | - | ------ | 
|2006       |   | 2,464  | 
|2007       |   | 2,130  | 
|2008       |   | 1,866  | 
|2009       |   | 1,624  | 
|Thereafter |   | 3,080  | 
|           |   |       
|           |   |       
|           | $ | 13,855 | 
|           |   |       

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Minimum future rentals do not include amounts which are payable by certain tenants for the reimbursement of certain operating expenses. The leases include national and regional chains and local retailers, consequently, the Companys credit risk is concentrated in the retail industry. One tenant accounted for more than 10% of the Companys rental revenues. Rental income collected from this tenant aggregated $100 for the period ended December 31, 2004. At December 31, 2004, the Property was approximately 93% occupied.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|9. | FAIR VALUE OF FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | As of December 31, 2004, the fair values of the Companys mortgage and mezzanine notes payable
  approximate the carrying values as the terms are similar to those currently available to the Company
  for debt with similar risk and the same remaining maturities. The carrying amounts for cash and cash
  equivalents, restricted cash, rents and other receivables, due to affiliates, and accounts payable
  and other liabilities approximate fair value because of the short-term nature of these instruments.                  

|    |                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10. | SUSEQUENT EVENT                                                                                                                                                     
|    |                                                                                                                                                                     
|    | On February 14, 2005, the Company distributed $203 to its members including $43 representing the preferred
  return due the Managing Member as of December 31, 2004.

|15
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