**SECURITIESAND EXCHANGE COMMISSION**

**Washington, DC  20549**

 

**FORM 10-K**

 
| ý                                                 | **ANNUAL REPORT PURSUANT TO SECTION  13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED EFFECTIVE  OCTOBER 7, 1996]**                                                                                                               |
|--------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                   |                                                                                                                                                                                                                                                 |
|                                                   | **For the fiscal year ended December 31, 2002**                                                                                                                                                                                                      |
|                                                   |                                                                                                                                                                                                                                                 |
|                                                   | **OR**                                                                                                                                                                                                                                               |
|                                                   |                                                                                                                                                                                                                                                 |
| o                                                      | **TRANSITION REPORT PURSUANT TO  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]**                                                                                                                                      |
|                                                   |                                                                                                                                                                                                                                                 |
|                                                   | **For the transition period from                   to                   ** |
|                                                   |                                                                                                                                                                                                                                                 |
|                                                   | **Commission File Number 1-12244**                                                                                                                                                                                                                   |
|                                                   |                                                                                                                                                                                                                                                 |
| **NEW PLAN  EXCEL REALTY TRUST, INC.**                 |
| (Exact Name of Registrant as Specified in Its Charter) |

 
|                                                                                                                                                                                                                                                                                                                                                        | **Maryland**                                                               |   | **33-0160389**                        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|--------|---------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                        | (State of Incorporation)                                                   |   | (I.R.S. Employer Identification No.)  |
|                                                                                                                                                                                                                                                                                                                                                        |                                                                       |   |                                  |
|                                                                                                                                                                                                                                                                                                                                                        | **1120 Avenue of the Americas  New York, NY 10036**                        |   | **(212)  869-3000**                   |
|                                                                                                                                                                                                                                                                                                                                                        | (Address  of Principal Executive Offices)                                  |   | (Registrant’s  Telephone Number) |
|                                                                                                                                                                                                                                                                                                                                                        |                                                                       |   |                                  |
|                                                                                                                                                                                                                                                                                                                                                        | Securities registered pursuant to Section 12(b) of the Act:                |
|                                                                                                                                                                                                                                                                                                                                                        |                                                                       |
|                                                                                                                                                                                                                                                                                                                                                        | Common Stock, $0.01 par value per share                                    |   | New York Stock Exchange               |
|                                                                                                                                                                                                                                                                                                                                                        | Series B Cumulative Redeemable Preferred Stock                             |   | New York Stock Exchange               |
|                                                                                                                                                                                                                                                                                                                                                        |                                                                       |   |                                  |
|                                                                                                                                                                                                                                                                                                                                                        | Securities registered pursuant to Section 12(g) of the Act:  **None** |
|                                                                                                                                                                                                                                                                                                                                                        |
| Indicate by  check mark whether the Registrant (1) has filed all reports required to be  filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during  the preceding 12 months, and (2) has been subject to such filing requirements  for the past 90 days.                                                                                   |
| **YES **ý**NO**o                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                        |
| Indicate by  check mark if disclosure of delinquent filers pursuant to Item 405 of  Regulation S-K is not contained herein, and will not be contained, to the  best of registrant’s knowledge, in definitive proxy or information statements  incorporated by reference in Part III of this Form 10-K or any amendment to  this Form 10-K.  **o** |
|                                                                                                                                                                                                                                                                                                                                                        |                                                                       |   |
| Indicate by  check mark whether the Registrant is an accelerated filer (as defined in  Exchange Act Rule 12b-2).                                                                                                                                                                                                                                            |
| **YES ****ý NO ****o**                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                        |
| The  aggregate market value of the Registrant’s shares of common stock held by  non-affiliates was approximately $1,980,241,000 as of June 28, 2002, based on  the closing price of $20.83 on the NYSE on that date.                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                        |                                                                       |   |
| As of March  3, 2003, the number of shares of common stock of the Registrant outstanding  was 96,927,402.                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                        |
| Documents  incorporated by reference:  Portions  of the Proxy Statement for the 2003 Annual Meeting of Stockholders of the  Registrant to be filed subsequently with the SEC are incorporated by  reference into Part III of this report.                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                             |                                                                            |        |                                       |  |  |

 

 

 

----

 

**TABLE OF CONTENTS**

 
|                                                                                                       | Page   |
|------------------------------------------------------------------------------------------------------------|--------|
| **PART I**                                                                                                 | **3**  |
|                                                                                                       |   |
| Item 1.  Business                                                                                     | 3      |
|                                                                                                       |   |
| Item 2.  Properties                                                                                   | 17     |
|                                                                                                       |   |
| Item 3.   Legal Proceedings                                                                           | 19     |
|                                                                                                       |   |
| Item 4.   Submission of Matters to a Vote of Security Holders                                         | 19     |
|                                                                                                       |   |
| **PART II**                                                                                                | **19** |
|                                                                                                       |   |
| Item 5.   Market for Registrant’s Common Equity and Related Stockholder Matters                  | 19     |
|                                                                                                       |   |
| Item 6.  Selected Financial  Data                                                                     | 20     |
|                                                                                                       |   |
| Item 7.   Management’s Discussion and Analysis of Financial Condition and  Results of Operations | 22     |
|                                                                                                       |   |
| Item 7A. Quantitative and Qualitative Disclosures  About Market Risk                                       | 42     |
|                                                                                                       |   |
| Item 8.   Financial Statements and Supplementary Data                                                 | 43     |
|                                                                                                       |   |
| Item 9.   Changes in and Disagreements with Accountants on Accounting and  Financial Disclosure       | 43     |
|                                                                                                       |   |
| **PART  III**                                                                                              | **43** |
|                                                                                                       |   |
| Item 10.   Directors and Executive Officers of the Registrant                                         | 43     |
|                                                                                                       |   |
| Item 11.  Executive  Compensation                                                                     | 43     |
|                                                                                                       |   |
| Item 12.   Security Ownership of Certain Beneficial Owners and Management                             | 43     |
|                                                                                                       |   |
| Item 13.   Certain Relationships and Related Transactions                                             | 44     |
|                                                                                                       |   |
| Item 14.   Controls and Procedures                                                                    | 44     |
|                                                                                                       |   |
| **PART IV**                                                                                                | **45** |
|                                                                                                       |   |
| Item 15.   Exhibits, Financial Statement Schedules and Reports on Form 8-K                            | 45     |

 

2

----

 

**PART I**

** **

**Forward-Looking Statements**

 

                This Annual Report on Form 10-K, togetherwith other statements and information publicly disseminated by New Plan ExcelRealty Trust, Inc. (the “Registrant” or the “Company”), contains certainforward-looking statements within the meaning of Section 27A of the SecuritiesAct of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such statements are based on assumptions andexpectations which may not be realized and are inherently subject to risks,uncertainties and other factors, many of which cannot be predicted withaccuracy and some of which might not even be anticipated.  Future events and actual results,performance, transactions or achievements, financial and otherwise, may differmaterially from the results, performance, transactions or achievementsexpressed or implied by the forward-looking statements.  Risks, uncertainties and other factors thatmight cause such differences, some of which could be material, include, but arenot limited to: changes in the global political environment; national and localeconomic, business and real estate and other market conditions, including theability of the general economy to recover timely from the current economicdownturn; the competitive environment in which we operate; property managementrisks; financing risks, such as the inability to obtain debt or equityfinancing on favorable terms; possible future downgrades in our credit rating;the level and volatility of interest rates; financial stability of tenants,including the ability of tenants to pay rent, the decision of tenants to closestores and the effect of bankruptcy laws; the rate of revenue increases versusexpense increases; the ability to maintain our status as a REIT for federalincome tax purposes; governmental approvals, actions and initiatives;environmental/safety requirements and costs; risks of real estate acquisitionand development, including the failure of acquisitions to close and pendingdevelopments and redevelopments to be completed on time and within budget;risks of disposition strategies, including the failure to complete sales on atimely basis and the failure to reinvest sale proceeds in a manner thatgenerates favorable returns; risks of joint venture activities; as well asother risks identified in this Annual Report on Form 10-K and, from timeto time, in the other reports we file with the SEC or in other documents thatwe publicly disseminate.  We undertakeno obligation to publicly update or revise these forward-looking statements,whether as a result of new information, future events or otherwise.

 

**Item 1.    *Business***

 

**General**

 

We are one ofthe nation’s largest owners and managers of community and neighborhood shoppingcenters.  As of December 31, 2002,we owned 394 properties in 35 states. Our properties include 349 community and neighborhood shopping centerswith approximately 49 million square feet of gross leasable area and 45 otherrelated retail assets with approximately three million square feet of grossleasable area.  The occupancy rate ofour properties was approximately 90% as of December 31, 2002.

 

We are aself-administered and self-managed equity REIT that was formed in 1972 and isnow incorporated in Maryland.

 

**Refocus on Retail Franchise**

 

In November2000, we announced a long-term business plan designed to leverage ourexpertise, critical mass and working infrastructure in the community andneighborhood shopping center sector. Our strategy is to own and manage a quality portfolio of commercialretail properties, a majority of which are community and neighborhood shoppingcenters that will provide increasing cash flow while protecting investorcapital and providing potential for capital appreciation.  We seek to implement this strategy by:

 

•                  aggressivelymanaging, and where appropriate, redeveloping and upgrading our properties,

 

3

----

 

•                  making selectiveacquisitions of well-located community and neighborhood shopping centers,either on an individual basis or in portfolio transactions,

 

•                  effecting non-strategicasset dispositions and recycling the capital created by those transactions, and

 

•                  continuing tomaintain a strong and flexible financial position to facilitate growth.

 

By focusingour portfolio on community and neighborhood shopping centers with anchors andother tenants providing “everyday necessities,” we believe that our risk fromchanging shopping patterns due to economic cycles is minimized.

 

**AggressiveManagement**

 

Weaggressively manage our properties, with an emphasis on maintaining highoccupancy rates and a strong base of nationally and regionally recognizedanchor tenants.  We regularly monitorthe physical condition of our retail properties and the financial condition ofour retail tenants.  We follow aschedule of regular physical maintenance at our retail properties with a viewtowards tenant expansions, renovations and refurbishing to preserve andincrease the value of these properties. In connection with these efforts, we have six regional offices and 14satellite field offices throughout the country, each of which is responsiblefor managing the leasing, property management and maintenance of properties inits area, and we are currently improving the general appearance of certain ofour properties by upgrading existing facades and roofs, updating signage,resurfacing parking lots and improving parking lot and exterior buildinglighting.  In addition, we remainfocused on enhancing our property management skills and our internalcapabilities, systems and infrastructure. In this regard, at the beginning of the year, we implemented JD EdwardsOne World, a state-of-the-art accounting, financial and property managementsystem.

 

We seek toincrease the cash flow and portfolio value of our existing properties primarilythrough contractual rent increases during the lease term, re-letting ofexisting space at higher rents, expansion and redevelopment of existingproperties and the minimization of overhead and operating costs.  During 2002, we invested $11 million indeferred maintenance in our properties in order to maintain and improve theircompetitive market position, which completed our two-year, $25 million deferredmaintenance program.  We also completed23 redevelopment projects in 2002, the aggregate cost of which (including costsincurred in prior years on these projects) was approximately $38 million. Our current pipeline is comprised of an additional 17 redevelopmentprojects, including 16 community and neighborhood shopping centers and oneenclosed regional mall project, the aggregate cost of which (includingcosts incurred in prior years on these projects) is expected to beapproximately $82 million.

 

**Acquisitionof Properties**

** **

We intend tofocus on retail properties, primarily community and neighborhood shoppingcenters that generate stable cash flows and present the opportunity for valueappreciation.  We may seek to expand ourportfolio by making selective, opportunistic acquisitions of individualproperties and portfolios of well-located community and neighborhood shoppingcenters and other retail properties.

 

An example of the implementation of this strategic focus is ourMarch 2002 acquisition of 92 community and neighborhood shopping centersfrom CenterAmerica Property Trust, L.P., a private company majority owned byMorgan Stanley Real Estate Fund II, L.P. The 92 shopping centers contain an aggregate of approximately10.4 million square feet of gross leasable area.  As part of the transaction, we also acquired a 10% managingmembership interest in a joint venture with a private U.S. pension fund.  The joint venture currently owns 14grocery-anchored shopping centers located in six states.  The aggregate purchase price for theacquisition was approximately $654 million, consisting of approximately$365 million in cash and the assumption of approximately $289 millionof outstanding debt.

 

4

----

 

In addition,in December 2002, we also acquired a portfolio of 57 community and neighborhoodshopping centers from Equity Investment Group, a private retail-focusedREIT.  The acquisition of one additionalshopping center from Equity Investment Group was completed in January2003.  The 58 shopping centers containan aggregate of approximately 7.9 million square feet of gross leasablearea.  The aggregate purchase price forthe acquisition was approximately $437 million, consisting ofapproximately $263 million in cash, the assumption of approximately$149 million of outstanding debt and the issuance of approximately $25million of units in a partnership that we control.

 

We alsoexpanded our portfolio by opportunistically acquiring two individual propertiesin separate transactions during the second half of the year for an aggregate of$75 million.  The two acquiredproperties were grocery-anchored community shopping centers located in Coloradoand Ohio, within our existing regional concentrations.

 

**Disposition of Properties**

 

We generallyhold our properties for investment and the production of rental income and notfor sale to customers or other buyers in the ordinary course of ourbusiness.  However, we continuallyanalyze each asset in our portfolio and identify those properties that can besold or exchanged for optimal sales prices or exchange values, given prevailingmarket conditions and the particular characteristics of each property. Throughthis strategy, we seek to continually update our core property portfolio bydisposing of properties that have limited growth potential or are not astrategic fit within our overall portfolio and redeploying capital into newerproperties or properties where our aggressive management techniques maymaximize property values.  We may engagefrom time to time in like-kind property exchanges, which allow us to dispose ofproperties and redeploy proceeds in a tax efficient manner.

 

As part of ourlong-term business plan announced in November 2000, we announced plans todispose of, over time, certain shopping centers and certain non-strategicassets, including our single tenant and miscellaneous properties, our gardenapartment communities and our factory outlets, in order to refocus on ourretail franchise.  InSeptember 2001, we sold our entire garden apartment portfolio forapproximately $380 million of gross proceeds.  The proceeds were used to satisfy existing mortgage debtencumbering the apartment portfolio, pay down other outstanding debt and tofund a portion of the acquisition of the Arapahoe Crossings shopping center inOctober 2001.  In the fourth quarter of 2002,we sold five of our six factory outlets centers for approximately $195 millionof gross proceeds.  The proceeds wereused to fund a portion of the acquisition of the Equity Investment Groupportfolio.  We also continue to generateproceeds from certain of our joint venture projects and notes receivable, aswell as engage in specific capital transactions within our joint ventures.  In total during 2002, excluding the sale offive of our factory outlet centers, we generated proceeds of approximately $170million.

 

**Financing Strategy**

** **

We intend tofinance future acquisitions with the most advantageous sources of capitalavailable to us at the time, which may include the sale of common stock,preferred stock or debt securities through public offerings or privateplacements, the incurrence of additional indebtedness through secured orunsecured borrowings, and the reinvestment of proceeds from the disposition ofproperties or joint venture interests. We also may enter into joint ventureswith institutions to acquire large properties or portfolios, reducing theamount of capital required by us to make such investments. Our financingstrategy is to maintain a strong and flexible financial position by:

 

•                  maintaining aprudent level of leverage in order to maintain current credit ratings,

 

•                  maintaining alarge pool of unencumbered properties, and

 

•                  managing ourexposure to interest rate risk from our floating rate debt.

 

5

----

 

**Recent Developments**

 

*Kmart Bankruptcy*

 

On January 22,2002, Kmart Corporation, our second largest tenant, filed for bankruptcyprotection under Chapter 11 of the federal bankruptcy laws.  Since the bankruptcy filing:

 

•                  leases at sevenlocations where Kmart is our lessee were rejected,

 

•                  Kmart indicatedthat it intends to close six additional locations at our properties on or aboutMarch 31, 2003, and

 

•                  we entered intoagreements with Kmart to reduce rent at four of our store locations effectiveJuly 1, 2002 and at six of our other store locations effective April 1, 2003;however, two of the store locations where rent reductions were effective July1, 2002 are included in the six store locations scheduled to close on or aboutMarch 31, 2003, resulting in eight store locations where we have agreed to rentreductions.

 

As of December31, 2002, Kmart was our lessee at 36 locations (excluding the seven rejectedlease locations described above) that contain a total of 3.3 million squarefeet of gross leasable area, or approximately 6.5% of our total gross leasablearea as of that date.  As of December31, 2002, Kmart’s scheduled annualized base rent for these 36 locations was$13.7 million, or approximately $4.09 per square foot, not taking into accountthe rental reductions agreed to at the six locations effective April 1, 2003,which are not material.

 

*Issuance of Public Equity*

 

On January 29,2002, we completed a public offering of 6.9 million shares of our common stockat $18.52 per share.  The net proceedsto us from the offering were approximately $121 million, and were usedinitially to pay down amounts outstanding under our then existing revolvingcredit facilities (which amounts were subsequently re-drawn to finance theCenterAmerica Acquisition discussed below).

 

*CenterAmerica Portfolio Acquisition*

 

On March 1,2002, we acquired a portfolio of 92 community and neighborhood shopping centersfrom CenterAmerica Property Trust, L.P., a private company majority owned byMorgan Stanley Real Estate Fund II, L.P. (the “CenterAmericaAcquisition”).  The 92 shopping centerscontain an aggregate of approximately 10.4 million square feet of grossleasable area.  As part of thetransaction, we also acquired a 10% managing membership interest in a jointventure with a private U.S. pension fund. The joint venture currently owns 14 grocery-anchored shopping centerslocated in six states.  The aggregatepurchase price for the acquisition was approximately $654 million, consistingof approximately $365 million in cash and the assumption of approximately $289million of outstanding debt.  The cashcomponent of the acquisition was financed with the proceeds of our January 2002public equity offering and with borrowings under our then existing creditfacilities and a term loan facility discussed below.

 

*Term Loan Facility*

 

On March 1,2002, we entered into a $125 million senior unsecured term loan facility withFleet National Bank (the “Fleet Term Loan”). Proceeds of the loan were used to finance a portion of the CenterAmericaAcquisition.  The facility was scheduledto mature on February 28, 2003.  On November6, 2002, we amended the facility, increasing the loan to $155 million andextending the maturity date until December 31, 2003.  We also amended the covenants to be consistent with thosecontained in our $350 million senior unsecured revolving credit facilitydiscussed below.  The term loan facilitybears interest, at our option, at either LIBOR plus a spread based upon ourcredit ratings, which spread is currently 115 basis points, or at the higher ofFleet National Bank’s prime

 

6

----

 

rate (plus 25 basis points inspecified circumstances) or 50 basis points above the federal funds rate.  As of December 31, 2002, the facility wasfully drawn.

 

*Management Addition*

 

On March 1,2002, Scott MacDonald was appointed as our President and Chief OperatingOfficer.  He was previously the ChiefExecutive Officer and President of CenterAmerica Property Trust, L.P.

 

*New Revolving Credit Facility*

 

On April 26,2002, we entered into a new $350 million senior unsecured revolving creditfacility (the “Fleet Revolving Facility”), refinancing our then existing $245million of senior unsecured revolving credit facilities.  The facility currently bears interest atLIBOR plus 105 basis points, subject to adjustment based on changes to ourcurrent credit ratings, and matures on April 25, 2005, with a one-yearextension option.  As of December 31,2002, there was $75 million outstanding under the facility.

 

*Issuance of Senior Unsecured Notes*

 

On June 11, 2002, we issued $250 million of 5.875% senior unsecurednotes.  The notes are due on June 15,2007.  Net proceeds from the offeringwere used to repay a portion of the borrowings under the Fleet Revolving Facility.

 

*Redemption of Series A Preferred Stock*

 

On July 15, 2002, we redeemed all outstanding shares of our 8 1⁄2% SeriesA Cumulative Convertible Preferred Stock. Each share was redeemed for 1.24384 shares of our common stock andresulted in the issuance of approximately 1.9 million shares of common stock atan equivalent price of $20.10 per share.

 

*Superior Marketplace Acquisition*

 

On July 31,2002, we acquired Superior Marketplace from The Ellman Companies forapproximately $14 million in cash and the satisfaction of $38 million ofnotes receivable and accrued interest. Superior Marketplace is an existing 148,302 square foot grocery-anchoredcommunity shopping center located in Superior, Colorado, northwest ofDenver.  The shopping center is in thelater stages of development and is expected to total 295,602 square feet whencomplete.  Tenants include Costco(non-owned), Michaels, Office Max, PetsMart, SuperTarget (non-owned) and T.J.Maxx.

 

*Sale of Clearwater Mall Land Parcels and Execution of Construction Loan*

 

On October 11, 2002, we sold individual land parcels accounting for approximately450,000 square feet of anchor space at Clearwater Mall, located in Clearwater,Florida, to Costco, Lowe’s and Target. We then contributed the remaining mall property to the joint venturecurrently redeveloping the property as a large open-air community shoppingcenter, encompassing approximately 740,000 square feet of retail space.  Also on October 11, 2002, the joint ventureclosed an approximately $36 million construction loan with Wells Fargo.  We received approximately $28 million ofproceeds from the land sales and loan transaction.

 

*Midway Market Square Acquisition*

 

On November20, 2002, we acquired Midway Market Square for approximately $24 million,including $18 million of assumed mortgage indebtedness.  Midway Market Square is a 234,760 squarefoot grocery-anchored community shopping center located in Elyria, Ohio.  Tenants include Circuit City, Dick’sSporting Goods, Giant Eagle, Home Depot (non-owned), Sofa Express and Target(non-owned).

 

7

----

 

*Partial Sale of The Centre at Preston Ridge Ownership Interest*

 

On November 25, 2002, a U.S. partnership comprisedsubstantially of foreign investors purchased a 70% interest in The Centre atPreston Ridge – Phase 1, reducing our ownership interest to 25% from 50%.  We received proceeds of approximately $28million in connection with the sale and will continue to receive leasingcommissions and property management fees.

 

*Equity Investment Group Portfolio Acquisition*

 

On December12, 2002, we acquired a portfolio of 57 community and neighborhood shoppingcenters from Equity Investment Group, a private retail-focused REIT (the “EIGAcquisition”).  The acquisition of oneadditional shopping center from Equity Investment Group was completed inJanuary 2003.  The 58 shopping centerscontain an aggregate of approximately 7.9 million square feet of gross leasablearea.  The aggregate purchase price forthe acquisition was approximately $437 million, and consisted ofapproximately $263 million in cash, the assumption of approximately$149 million of outstanding debt and the issuance of approximately $25million of units in a partnership controlled by us.  The cash component of the acquisition was financed through borrowingsunder the Fleet Revolving Facility (a portion of which was subsequently paiddown with proceeds generated from the sale of four of our factory outletcenters discussed below).

 

*Sale of Factory Outlet Centers*

 

On October 22,2002, we sold Factory Merchants Ft. Chiswell for approximately $1.5 million ofgross proceeds.  On December 19, 2002,we sold four of our remaining five factory outlet centers for approximately$193 million of gross proceeds. Total proceeds were used to fund a portion of the EIG Acquisition.

 

*Michigan Portfolio Acquisition*

 

On January 3,2003, we acquired a portfolio of seven grocery-anchored neighborhood shoppingcenters for an aggregate purchase price of approximately $46 million incash.  The acquisition was financedthrough borrowings under the Fleet Revolving Facility.  The seven shopping centers contain anaggregate of approximately 534,386 square feet of gross leasable area and arelocated in Michigan, primarily in the northern and western suburbs of Detroitand the Grand Rapids area.  Four of theacquired properties are anchored by D&W Food Center and three of theshopping centers are anchored by VG’s Food.

 

**Employees**

 

As of December31, 2002, we employed approximately 377 individuals (including executive,administrative and field personnel).

 

**Available Information**

 

Our internetaddress is www.newplan.com.  Youcan obtain on our website, free of charge, a copy of our annual report on Form10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, andany amendments to those reports, as soon as reasonably practicable after weelectronically file such reports or amendments with the SEC.  Also available on our website, free ofcharge, are copies of our Code of Business Conduct and Ethics, our Code ofEthics for Principal Executive Officer and Senior Financial Officers, ourCorporate Governance Guidelines, and the charters for each of the committees ofour Board of Directors – the Audit Committee, the Corporate GovernanceCommittee, the Executive Compensation and Stock Option Committee and theNominating Committee.

 

8

----

 

**Financial Information about Industry Segments**

 

As a result ofthe sale of our garden apartment community portfolio in 2001, our principalbusiness is the ownership and management of community and neighborhood shoppingcenters.  We do not distinguish or groupour operations on a geographical basis when measuring performance.  All operations are within the United Statesand no tenant accounts for more than 10% of total revenue.  Accordingly, we believe we have a singlereportable segment for disclosure purposes in accordance with accountingprinciples generally accepted in the United States.  See the Consolidated Financial Statements and Notes theretoincluded in Item 8 of this Annual Report on Form 10-K for certaininformation required by Item 1.  SeeBusiness included in Item I above.

 

**RiskFactors**

 

Set forth below are the risks that we believe are material to investorswho purchase or own our securities that are not otherwise described in thisAnnual Report on Form 10-K.  We haveseparated the risks into three groups:

 

•                  risks related toour properties and business;

 

•                  risks related toour organization and structure; and

 

•                  tax risks.

 

Risks Relatedto Our Properties and Business 

* *

*Adverse market conditions and competition mayimpede our ability to generate sufficient income to pay expenses and maintainproperties*. The economic performance and value of our properties are subject to allof the risks associated with owning and operating real estate, including:

 

•                  changes in thenational, regional and local economic climate, particularly in Texas which, asa result of the CenterAmerica Acquisition, is the location of properties thatrepresented approximately 19% of our total annualized base rental income as ofDecember 31, 2002;

 

•                  localconditions, including an oversupply of space in properties like those that weown, or a reduction in demand for properties like those that we own;

 

•                  theattractiveness of our properties to tenants;

 

•                  the ability oftenants to pay rent;

 

•                  competition fromother available properties;

 

•                  changes inmarket rental rates;

 

•                  the need toperiodically pay for costs to repair, renovate and re-let space;

 

•                  changes inoperating costs, including costs for maintenance, insurance and real estatetaxes;

 

•                  the fact thatthe expenses of owning and operating properties are not necessarily reducedwhen circumstances such as market factors and competition cause a reduction inincome from the properties; and

 

•                  changes in lawsand governmental regulations, including those governing usage, zoning, theenvironment and taxes.

 

9

----

 

*Downturns in the retailing industry likelywill have a direct impact on our performance. *Ourproperties consist of community and neighborhood shopping centers and otherretail properties.  Our performancetherefore is linked to economic conditions in the market for retail spacegenerally.  The market for retail spacehas been or could be adversely affected by weakness in the national, regionaland local economies, the adverse financial condition of some large retailingcompanies, the ongoing consolidation in the retail sector, the excess amount ofretail space in a number of markets, and increasing consumer purchases throughcatalogues and the Internet.  To theextent that any of these conditions occur, they are likely to impact marketrents for retail space***.***

 

*Failure by any anchor tenant with leases inmultiple locations to make rental payments to us, because of a deterioration ofits financial condition or otherwise, could seriously harm our performance.*  Our performance depends on our ability tocollect rent from tenants.  At any time,our tenants may experience a downturn in their business that may significantlyweaken their financial condition.  As aresult, our tenants may delay a number of lease commencements, decline toextend or renew a number of leases upon expiration, fail to make rentalpayments when due under a number of leases, close a number of stores or declarebankruptcy.  Any of these actions couldresult in the termination of the tenant’s leases and the loss of rental incomeattributable to the terminated leases. In addition, lease terminations by an anchor tenant or a failure by thatanchor tenant to occupy the premises could result in lease terminations orreductions in rent by other tenants in the same shopping centers under theterms of some leases.  In that event, wemay be unable to re-lease the vacated space at attractive rents or at all.  The occurrence of any of the situationsdescribed above, particularly if it involves a substantial tenant with leasesin multiple locations, could seriously harm our performance.  As of December 31, 2002, our largest tenantswere The Kroger Co., Kmart Corporation and Wal-Mart Stores, the scheduledannualized base rents for which represented 4.4%, 3.8% and 3.7%, respectively,of our total annualized base rents***.***

 

*We may be unable to collect balances due fromany tenants in bankruptcy.*  We cannot assure you that any tenant thatfiles for bankruptcy protection will continue to pay us rent.  A bankruptcy filing by or relating to one ofour tenants or a lease guarantor would bar all efforts by us to collectpre-bankruptcy debts from that tenant or the lease guarantor, or theirproperty, unless we receive an order permitting us to do so from the bankruptcycourt.  A tenant or lease guarantorbankruptcy could delay our efforts to collect past due balances under therelevant leases, and could ultimately preclude collection of these sums.  If a lease is assumed by the tenant inbankruptcy, all pre-bankruptcy balances due under the lease must be paid to usin full.  However, if a lease isrejected by a tenant in bankruptcy, we would have only a general unsecuredclaim for damages.  Any unsecured claimwe hold may be paid only to the extent that funds are available and only in thesame percentage as is paid to all other holders of unsecured claims, and thereare restrictions under bankruptcy laws that limit the amount of the claim wecan make if a lease is rejected.  As aresult, it is likely that we will recover substantially less than the fullvalue of any unsecured claims we hold.

 

On January 22,2002, Kmart Corporation, our second largest tenant, filed for bankruptcyprotection under Chapter 11 of the federal bankruptcy laws.  As of December 31, 2002, Kmart was ourlessee at 36 locations that contain a total of 3.3 million square feet of grossleasable area, or approximately 6.5% of our total gross leasable area at thatdate.  In January 2003, Kmart indicatedthat it intends to close six of these stores and formally rejected one leasewhere designation rights had previously been assigned.  Under federal bankruptcy laws, Kmart canreject the six leases at the locations scheduled to close on or about March 31,2003, as well as the remaining 29 leases. We have no information at this timeas to Kmart’s plans for the 29 remaining leases that we have with Kmart. Thedelay or failure of Kmart to make payments under its leases, or the rejectionby Kmart of a substantial number of leases with us under federal bankruptcylaws, would adversely impact our performance, which impact could be material.In addition, Kmart’s termination of leases or closure of stores could result inlease terminations or reductions in rent by other tenants in the same shoppingcenters under the terms of some leases, the impact of which could be materialto us.

 

*We face considerable competition in theleasing market and may be unable to renew leases or re-let space as leasesexpire.*  We compete with a number of other companiesin providing leases to prospective tenants and in re-letting space to currenttenants upon expiration of their respective leases.  If our tenants decide not to renew or

 

10

----

 

extend their leases uponexpiration, we may not be able to re-let the space.  Even if the tenants do renew or we can re-let the space, theterms of renewal or re-letting, including the cost of required renovations, maybe less favorable than current lease terms or than expectations for thespace.  As of December 31, 2002, leaseswere scheduled to expire on a total of approximately 10.6% of the space at ourproperties through 2003.  We may beunable to promptly renew the leases or re-let this space, or the rental ratesupon renewal or re-letting may be significantly lower than expected rates.

 

*Future acquisitions of properties may notyield the returns we expect, may result in disruptions to our business and maystrain management resources. *Weintend to continue acquiring select community and neighborhood shoppingcenters. Newly acquired properties may fail to perform as expected.  Our management may underestimate the costsnecessary to bring acquired properties up to standards established for theirintended market position.

 

In particular,in 2002 we acquired two large portfolios of community and neighborhood shoppingcenters.  Large portfolio acquisitionspose risks for our ongoing operations in that:

 

•                  we may notachieve expected cost savings and operating efficiencies;

 

•                  managementattention may be diverted to the integration of acquired properties;

 

•                  the acquiredproperties may not perform as well as we anticipate due to various factors,including changes in macro-economic conditions and the demand for retail space;and

 

•                  we mayexperience difficulties and incur expenses related to the assimilation andretention of employees that we have hired or intend to hire to manage andoperate acquired properties.

 

*We face significant competition foracquisitions of real properties, which may increase the costs of theseacquisitions.*  We compete for acquisitions of, andinvestments in, properties and real estate companies with an indeterminatenumber of investors, including investors with access to significant capitalsuch as domestic and foreign corporations and financial institutions, publiclytraded and privately held REITs, private institutional investment funds,investment banking firms, life insurance companies and pension funds.  This competition may increase prices for thetypes of properties in which we invest.

 

*Current and future development andredevelopment of real estate properties may not yield expected returns and maystrain management resources.*  We are actively involved in several ongoingsubstantial redevelopment projects, including Clearwater Mall and The Mall at163rd Street, either directly or through joint ventures.  We also may invest in development projectsin the future.

 

Redevelopment and new development of properties are subject to a numberof risks, including construction delays, cost overruns, financing risks,failure to meet expected occupancy and rent levels, delays in and the inabilityto obtain zoning, occupancy and other governmental permits, and changes in zoningand land use laws.  Overall projectcosts may significantly exceed the costs that were estimated when the projectwas originally undertaken, which will result in reduced returns, or evenlosses, from such investments.

 

*We do not have exclusive control over ourjoint venture investments, so we are unable to ensure that our objectives willbe pursued*.  Wehave invested in some cases as a borrower, co-venturer or partner in thedevelopment or redevelopment of new properties, instead of developing projectsdirectly.  These investments involverisks not present in a wholly owned development or redevelopment project. Inthese investments, we do not have exclusive control over the development,financing, leasing, management and other aspects of the project.  As a result, the borrower, co-venturer orpartner might have interests or goals that are inconsistent with our interestsor goals, take action contrary to our interests or otherwise impede ourobjectives.  The borrower, co-ventureror partner also might become insolvent or bankrupt.

 

11

----

 

*Real estate property investments areilliquid, and therefore we may not be able to dispose of properties whenappropriate or on favorable terms*.  Real estate property investments generallycannot be disposed of quickly.  Inaddition, the federal tax code imposes restrictions on a REIT’s ability todispose of properties that are not applicable to other types of real estatecompanies.  Therefore, we may not beable to vary our portfolio in response to economic or other conditions promptlyor on favorable terms.

 

*Some potential losses are not covered byinsurance, so we could lose a significant portion of our investment in aproperty.*  We carry comprehensive liability, fire, extendedcoverage, rental loss and acts of terrorism insurance on all of ourproperties.  We believe the policyspecifications and insured limits of these policies are adequate andappropriate.  There are, however,certain types of losses, including lease and other contract claims, acts of warand acts of God that generally are not insured.  Should an uninsured loss or a loss in excess of insured limitsoccur, we could lose a significant portion of the capital we have invested in aproperty, as well as the anticipated future revenue from the property.  If that happened, we might neverthelessremain obligated for any mortgage debt or other financial obligations relatedto the property.

 

*There can be no assurance as to future costsand the scope of coverage that may be available under insurance policies.*  Although we believe our properties areadequately covered by insurance, we cannot predict at this time if in thefuture we will be able to obtain full coverage at a reasonable cost.  The costs associated with property andcasualty renewals may be higher than anticipated.

 

*We have substantial scheduled debt paymentsand may not be able to refinance debt at maturity.* Our business is subject to risks normally associated with debtfinancing.  Cash flow could be insufficientto pay expected dividends to stockholders and meet required payments ofprincipal and interest.  We may not beable to refinance existing debt, which in virtually all cases requiressubstantial principal payments at maturity, and, even if we can, the terms of arefinancing might not be as favorable as the terms of existing debt.  The total principal amount of ouroutstanding debt was approximately $1.7 billion as of December 31,2002.  If principal payments due atmaturity cannot be refinanced, extended or paid with proceeds of other capitaltransactions, including new equity capital, cash flow may not be sufficient inall years to repay all maturing debt at the relevant time(s).  Prevailing interest rates, our results ofoperations and financial condition, our senior debt ratings or other factors atthe time of refinancing, including the possible reluctance of lenders to makeloans, may result in higher interest rates and increased interest expense.

 

*Our financial covenants may restrict ouroperating and acquisition activities. *Ourrevolving credit and term loan facilities and the indentures under which oursenior unsecured debt is issued contain certain financial and operatingcovenants, including, among other things, certain coverage ratios, as well aslimitations on our ability to incur secured and unsecured debt, make dividendpayments, sell all or substantially all of our assets and engage in mergers andconsolidations and certain acquisitions. These covenants may restrict our ability to pursue certain businessinitiatives or certain acquisition transactions.  In addition, failure to meet any of the financial covenants couldcause an event of default under and/or accelerate some or all of ourindebtedness, which would have a material adverse effect on us.

 

*Mortgage debt obligations expose us to thepossibility of foreclosure. *Ifa property is mortgaged to secure payment of debt and we are unable to meetmortgage payments, the holder of the mortgage or lender could foreclose on theproperty, resulting in loss of our investment. Also, certain of these mortgages contain customary negative covenantswhich, among other things, limit our ability, without the prior consent of thelender, to further mortgage the property, to enter into new leases or materiallymodify existing leases, and to discontinue insurance coverage.

 

*Our degree of leverage could limit ourability to obtain additional financing.*  Our organizational documents do not containany limitation on the incurrence of debt. The degree of our leverage could have important consequences, includingaffecting our ability to obtain additional financing in the future for workingcapital, capital expenditures, acquisitions, development or other generalcorporate purposes and making us more vulnerable to a downturn in business orthe economy generally.

 

12

----

 

*We have substantial variable rate debtobligations, which may impede our operating performance and put us at acompetitive disadvantage*.  Increases in interest rates, or the loss of the benefits of anyhedging agreements that we might have, would increase our interest expense,which would adversely affect cash flow and our ability to service debt and paydividends to stockholders.  As ofDecember 31, 2002, we had approximately $352 million of floating rate debtmaturing at various times up to September 1, 2011.  The rates on this debt increase when interest rates increase.

 

As of December 31, 2002, we were a party to two hedging agreements withrespect to $160.5 million of our floating rate debt.  Hedging agreements enable us to convert floating rate liabilitiesinto fixed rate liabilities.  Hedgingagreements expose us to the risk that the counterparties to such agreements maynot perform, which could increase our exposure to rising interest rates, eventhough the counterparties to hedging agreements that we enter into are majorfinancial institutions.

 

We may borrow additional money with floatinginterest rates in the future.  Increasesin interest rates, or the loss of the benefits of our existing or futurehedging agreements, would increase our interest expense, which would adverselyaffect cash flow and our ability to service our debt.  Future increases in interest rates will increase our interestexpense as compared to the fixed rate debt underlying our hedging agreementsand could result in our making payments to unwind such agreements.

 

*A downgrade in our credit rating couldnegatively impact us.* The floating rates of interest applicable to much of our debt, includingdebt under our credit facilities, are determined based on the credit ratings ofour debt provided by independent rating agencies.  Thus, if these credit ratings are downgraded, our interest expensewill be, and our ability to raise additional debt may be, negatively impacted.

 

*Environmental problems that exist at some ofour properties could result in significant unexpected costs. *Under variousfederal, state and local laws, ordinances and regulations, we may be consideredan owner or operator of real property or may have arranged for the disposal ortreatment of hazardous or toxic substances and, therefore, may become liablefor the costs of removal or remediation of certain hazardous substancesreleased on or in our property or disposed of by us, as well as certain otherpotential costs which could relate to hazardous or toxic substances (includinggovernmental fines and injuries to persons and property).  Such liability may be imposed whether or notwe knew of, or were responsible for, the presence of these hazardous or toxicsubstances.  As is common with communityand neighborhood shopping centers, many of our properties had or have on-sitedry cleaners and/or on-site gasoline facilities.  These operations could potentially result in environmentalcontamination at the properties.

 

We are awarethat soil and groundwater contamination exists at some of our properties. Theprimary contaminants of concern at these properties include perchloroethyleneand trichloroethylene (associated with the operations of on-site dry cleaners)and petroleum hydrocarbons (associated with the operations of on-site gasolinefacilities).  We also are aware thatasbestos-containing materials exist at some of our properties.  While we do not expect the environmentalconditions at our properties, considered as a whole, to have a material adverseeffect on us, there can be no assurance that this will be the case.  Further, no assurance can be given that anyenvironmental studies performed have identified or will identify all materialenvironmental conditions, that any prior owner of the properties did not createa material environmental condition not known to us or that a materialenvironmental condition does not otherwise exist with respect to any of ourproperties.

* *

*Changes in market conditions could adverselyaffect the market price of our publicly traded securities.*  As with other publicly traded securities,the market price of our publicly traded securities depends on various marketconditions, which may change from time to time.  Among the market conditions that may affect the market price ofour publicly traded securities are the following:

 

•                  the extent ofinstitutional investor interest in the company;

 

13

----

 

•                  the reputationof REITs generally and the reputation of REITs with portfolios similar to ours;

 

•                  theattractiveness of the securities of REITs in comparison to securities issued byother entities (including securities issued by other real estate companies);

 

•                  our financialcondition and performance;

 

•                  the market’sperception of our growth potential and potential future cash dividends;

 

•                  an increase inmarket interest rates, which may lead prospective investors to demand a higherdistribution rate in relation to the price paid for our shares; and

 

•                  general economicand financial market conditions.

 

Sales of asubstantial number of shares of our stock, or the perception that such salescould occur, also could adversely affect prevailing market prices for ourstock.  In addition to the possibilitythat we may sell shares of our stock in a public offering at any time, we alsomay issue shares of common stock upon redemption of units of  partnership interest held by third partiesin affiliated partnerships that we control, as well as upon exercise of stockoptions or restricted stock that we grant to our officers and employees.  All of these shares will be available forsale in the public markets from time to time.

 

Risks Relatedto Our Organization and Structure 

 

*Provisions of the company’s charter andbylaws could inhibit changes in control of the company, and could preventstockholders from obtaining a premium price for our common stock*.  A number of provisions of our charter andbylaws may delay or prevent a change in control of the company or othertransactions that could provide stockholders with a premium over thethen-prevailing market price of our common stock or that might otherwise be inthe best interests of the stockholders. These include a staggered board of directors, a stockholder rights planand our share ownership limit described below. Also, any future series of our preferred stock may have votingprovisions that could delay or prevent a change in control or other transactionthat might involve a premium price or otherwise be in the best interests of thestockholders.

 

*Our Board of Directors could adopt thelimitations available under Maryland law on changes in control that couldprevent transactions in the best interests of stockholders*.  Certain provisions of Maryland lawapplicable to us prohibit “business combinations,” including certain issuancesof equity securities, with any person who beneficially owns 10% or more of thevoting power of outstanding shares, or with an affiliate of ours who, at anytime within the two-year period prior to the date in question, was thebeneficial owner of 10% or more of the voting power of the outstanding votingshares (which is referred to as a so-called “interested stockholder”), or withan affiliate of an interested stockholder. These prohibitions last for five years after the most recent date onwhich the stockholder became an interested stockholder.  After the five-year period, a businesscombination with an interested stockholder must be approved by twosuper-majority stockholder votes unless, among other conditions, our commonstockholders receive a minimum price for their shares and the consideration isreceived in cash or in the same form as previously paid by the interestedstockholder for its shares of common stock. Our Board of Directors has opted out of these business combinationprovisions.  As a result, the five-yearprohibition and the super-majority vote requirements will not apply to abusiness combination involving the company. Our Board of Directors may, however, repeal this election in most casesand cause the company to become subject to these provisions in the future.

 

*Our share ownership limit may discourage atakeover of the company and depress our stock price.*  To facilitate maintenance of our REITqualification and for other strategic reasons, our charter generally prohibitsany person from acquiring or holding shares of our preferred and common stockin excess of 9.8% (by value or by number of shares, whichever is morerestrictive) of the outstanding shares of each class or series of ourstock.  Our Board of Directors mayexempt a person from this ownership limit under specified conditions.  Absent an exemption or a waiver, shares ofstock that are purportedly transferred in excess of the ownership limit will beautomatically

 

14

----

 

transferred to a trust for theexclusive benefit of one or more charitable beneficiaries, and the purportedtransferee will not acquire any rights in such shares.  This ownership limit could delay or preventa change in control of the company and, therefore, could adversely affect thestockholders’ ability to realize a premium over the then-prevailing marketprice for our shares.

 

*We are dependent on external sources ofcapital, which may not be available.*  To qualify as a REIT, we must, among otherthings, distribute to our stockholders each year at least 90% of our REITtaxable income (excluding any net capital gains).  Because of these distribution requirements, we likely will not beable to fund all future capital needs, including capital for acquisitions, withincome from operations. We therefore will have to rely on third-party sourcesof capital, which may or may not be available on favorable terms or at all.  Our access to third-party sources of capitaldepends on a number of things, including the market’s perception of our growthpotential and our current and potential future earnings.  Moreover, additional equity offerings mayresult in substantial dilution of stockholders’ interests, and additional debtfinancing may substantially increase leverage.

 

Tax Risks

 

*Proposed change in taxation of corporatedividends may adversely affect the value of our stock.*  The federal income tax laws governing REITsand other corporations or the administrative interpretations of those laws maybe amended at any time.  On January 7,2003, the Bush Administration released a proposal intended to eliminate onelevel of the “double taxation” that is currently imposed on corporate incomefor regular C corporations by excluding corporate dividends from anindividual’s taxable income to the extent that corporate income tax has beenpaid on the earnings from which the dividends are paid.  REITs currently are tax-advantaged relativeto regular C corporations because they are not subject to corporate-levelfederal income tax on income that they distribute to shareholders, butshareholders do include REIT dividends in taxable income.  The tax treatment of REITs generally wouldnot be affected by the Bush Administration’s proposal in its current form,except that a REIT that receives dividends from a C corporation that have beensubject to corporate income tax could distribute or retain those amountswithout a second tax being imposed on the REIT or its shareholders.  However, the Bush Administration’s proposal,if enacted, could cause individual investors to view stocks of regular Ccorporations as more attractive relative to stocks of REITs than is the casecurrently because part or all of the dividends on the stocks of the regular Ccorporations would be exempt from tax for the individual.  It is not possible to predict whether infact this change in relative perceived value will occur or whether, if itoccurs, what the impact will be on the value of our stock.  In any event, there can be no assuranceregarding whether the Bush Administration’s proposal ultimately will be enactedor the form in which it might in fact be enacted and the effects that it willhave on the value of our stock.

 

*Failure of the company to qualify as a REITwould have serious adverse consequences to stockholders.*  We believe that the company has qualifiedfor taxation as a REIT for federal income tax purposes since September 28,1998, the date of the merger of our predecessor companies, New Plan RealtyTrust and Excel Realty Trust, Inc., and that our predecessor companiesqualified for taxation as REITs for federal income tax purposes since theirfirst elections to be taxed as REITs and for each taxable year where a failureto qualify would adversely affect the company. We plan to continue to operate so that the company meets therequirements for taxation as a REIT. Many of these requirements, however, are highly technical andcomplex.  The determination that the companyis a REIT requires an analysis of various factual matters and circumstancesthat may not be totally within our control. For example, to qualify as a REIT, at least 95% of our gross income mustcome from certain sources that are itemized in the REIT tax laws.  We are also required to distribute tostockholders at least 90% of our REIT taxable income (excluding any net capitalgains).  The fact that we hold certainof our assets through partnerships and their subsidiaries further complicatesthe application of the REIT requirements. Even a technical or inadvertent mistake could jeopardize the company’sREIT status.  Furthermore, Congress andthe Internal Revenue Service might make changes to the tax laws andregulations, and the courts might issue new rulings, that make it moredifficult, or impossible, for the company to remain qualified as a REIT.

 

If the companyfails to qualify as a REIT, the company would be subject to federal income taxat regular corporate rates.  Also,unless the Internal Revenue Service granted the company relief under certainstatutory

 

15

----

 

provisions, the company wouldremain disqualified as a REIT for four years following the year the companyfirst failed to qualify.  If the companyfailed to qualify as a REIT, the company would have to pay significant incometaxes and would therefore have less money available for investments, debtservice and dividends to stockholders. This likely would have a significant adverse affect on the value of oursecurities.  In addition, we would nolonger be required to pay any dividends to stockholders.

 

Even if thecompany qualifies as a REIT for federal income tax purposes, we are required topay certain federal, state and local taxes on our income and property.  For example, if we have net income from“prohibited transactions,” that income will be subject to a 100% tax.  In general, prohibited transactions aresales or other dispositions of property held primarily for sale to customers inthe ordinary course of business.  Thedetermination as to whether a particular sale is a prohibited transactiondepends on the facts and circumstances related to that sale.  While we have undertaken a significantnumber of asset sales in recent years, we do not believe that those salesshould be considered prohibited transactions, but there can be no assurancethat the Internal Revenue Service would not contend otherwise.  In addition, any net taxable income earneddirectly by our taxable affiliates, including ERT Development Corporation, issubject to federal and state corporate income tax.  To the extent that we and our affiliates are required to payfederal, state and local taxes, we will have less cash available for distributionsto our stockholders.

 

Subject tocertain exceptions, including the one discussed in this paragraph, a REIT isgenerally prohibited from owning securities in any one issuer if the value ofthose securities exceeds 5% of the value of the REIT’s total assets or thesecurities owned by the REIT represent more than 10% of the issuer’soutstanding voting securities or more than 10% of the value of the issuer’soutstanding securities.  A REIT ispermitted to own securities of a subsidiary in an amount that exceeds the 5%value test and the 10% vote or value test if the subsidiary elects to be a“taxable REIT subsidiary,” which is taxable as a corporation.  However, a REIT may not own securities oftaxable REIT subsidiaries that represent in the aggregate more than 20% of thevalue of the REIT’s total assets.  Wecurrently own 100% of the outstanding securities of ERT DevelopmentCorporation, which elected, effective January 1, 2001, to be a taxable REITsubsidiary of ours.  Each corporatesubsidiary in which ERT Development Corporation owns 35% of the outstandingvoting securities or 35% of the value of the outstanding securities will alsobe treated as a taxable REIT subsidiary of ours.  While we believe that we have satisfied the limitations on theownership of securities with regard to our ownership of interests in ERTDevelopment Corporation during each of the taxable years that each suchlimitation applied to us, given the highly complex nature of the rulesgoverning REITs and the ongoing importance of factual determinations, we cannotprovide any assurance that the Internal Revenue Service would not disagree withour determination.

 

Severalprovisions of the applicable tax law ensure that a taxable REIT subsidiary willbe subject to an appropriate level of federal income taxation.  For example, a taxable REIT subsidiary islimited in its ability to deduct interest payments made to an affiliatedREIT.  In addition, the REIT has to paya 100% penalty tax if the economic arrangements between the REIT, the REIT’stenants, and a taxable REIT subsidiary are not comparable to similararrangements between unrelated parties.

 

*The company could be disqualified as a REITor have to pay taxes if its predecessor companies did not qualify as REITs.*  If either New Plan Realty Trust or ExcelRealty Trust, Inc., whose businesses were combined in a merger transaction onSeptember 28, 1998 to form the company, failed to qualify as a REIT throughoutthe duration of its existence, we might have had undistributed “C corporationearnings and profits.”  If that were thecase and either of our predecessor companies did not distribute such earningsand profits prior to the merger transaction, the company might not qualify as aREIT.  We believe that each of thepredecessor companies qualified as a REIT and that, in any event, neither ofthe predecessor companies had any undistributed “C corporation earnings andprofits” at the time of the merger transaction.  If New Plan Realty Trust failed to qualify as a REIT, it wouldhave recognized taxable gain at the time of the merger transaction (and wewould be liable for the tax on that gain). This would be the case even though the merger transaction qualified as a“tax-free reorganization,” unless we made a special election that was availableunder the law at the time of the merger. We made that election with respect to the assets acquired from New PlanRealty Trust.  This election has theeffect of requiring us, if New Plan Realty Trust was not

 

16

----

 

qualified as a REIT, to pay corporateincome tax on any gain existing at the time of the merger transaction on assetsacquired in the transaction if those assets are sold within 10 years after thetransaction.  Finally, if either of thepredecessor companies did not qualify as a REIT, the company could have beenprecluded from electing REIT status for up to four years after the year inwhich that predecessor company failed to qualify if the company were determinedto be a “successor” to that predecessor company.

 

## ***Item2.   ***Properties

 

As of December31, 2002, we owned interests in 394 properties.  The following table sets forth certain information as of December31, 2002 regarding our properties on a state-by-state basis:

 

17

----

 
| **State**      |   | **Number of  Properties** |   | **Percent  Leased** |   | **GLA (1)** |   | **Percent of  Scheduled  ABR (2)** |   |
|----------------|--------|---------------------------|--------|---------------------|--------|-------------|--------|------------------------------------|--------|
| Alabama        |   | 7                         |   | 90%                 |   | 760,014     |   | 1.2%                               |   |
| Arizona        |   | 8                         |   | 89%                 |   | 973,147     |   | 2.1%                               |   |
| Arkansas       |   | 2                         |   | 98%                 |   | 237,991     |   | 0.4%                               |   |
| California     |   | 15                        |   | 91%                 |   | 2,455,132   |   | 7.2%                               |   |
| Colorado       |   | 5                         |   | 100%                |   | 1,210,066   |   | 3.4%                               |   |
| Delaware       |   | 1                         |   | 100%                |   | 30,000      |   | 0.0%                               |   |
| Florida        |   | 30                        |   | 86%                 |   | 4,872,133   |   | 10.5%                              |   |
| Georgia        |   | 34                        |   | 90%                 |   | 3,672,992   |   | 6.0%                               |   |
| Illinois       |   | 12                        |   | 88%                 |   | 1,512,688   |   | 3.3%                               |   |
| Indiana        |   | 17                        |   | 81%                 |   | 1,537,770   |   | 2.0%                               |   |
| Iowa           |   | 3                         |   | 98%                 |   | 547,493     |   | 0.7%                               |   |
| Kentucky       |   | 11                        |   | 91%                 |   | 1,809,123   |   | 3.0%                               |   |
| Louisiana      |   | 6                         |   | 96%                 |   | 738,341     |   | 1.0%                               |   |
| Maryland       |   | 2                         |   | 85%                 |   | 278,934     |   | 0.6%                               |   |
| Massachusetts  |   | 2                         |   | 100%                |   | 348,917     |   | 0.6%                               |   |
| Michigan       |   | 13                        |   | 91%                 |   | 2,396,416   |   | 5.0%                               |   |
| Minnesota      |   | 1                         |   | 98%                 |   | 55,715      |   | 0.1%                               |   |
| Mississippi    |   | 1                         |   | 100%                |   | 87,721      |   | 0.1%                               |   |
| Nebraska       |   | 2                         |   | 100%                |   | 9,671       |   | 0.0%                               |   |
| Nevada         |   | 3                         |   | 63%                 |   | 587,388     |   | 1.0%                               |   |
| New Jersey     |   | 7                         |   | 93%                 |   | 865,405     |   | 2.0%                               |   |
| New Mexico     |   | 2                         |   | 49%                 |   | 97,600      |   | 0.1%                               |   |
| New York       |   | 25                        |   | 86%                 |   | 3,531,579   |   | 6.2%                               |   |
| North Carolina |   | 14                        |   | 95%                 |   | 1,885,678   |   | 3.2%                               |   |
| Ohio           |   | 25                        |   | 88%                 |   | 3,876,028   |   | 6.7%                               |   |
| Pennsylvania   |   | 14                        |   | 86%                 |   | 2,147,269   |   | 4.4%                               |   |
| Rhode Island   |   | 1                         |   | 91%                 |   | 148,395     |   | 0.3%                               |   |
| South Carolina |   | 7                         |   | 70%                 |   | 792,641     |   | 1.1%                               |   |
| Tennessee      |   | 16                        |   | 97%                 |   | 1,926,084   |   | 3.5%                               |   |
| Texas          |   | 86                        |   | 92%                 |   | 9,370,240   |   | 18.6%                              |   |
| Utah           |   | 3                         |   | 98%                 |   | 606,334     |   | 1.0%                               |   |
| Virginia       |   | 13                        |   | 93%                 |   | 1,708,807   |   | 3.3%                               |   |
| West Virginia  |   | 3                         |   | 91%                 |   | 354,938     |   | 0.6%                               |   |
| Wisconsin      |   | 2                         |   | 87%                 |   | 259,953     |   | 0.4%                               |   |
| Wyoming        |   | 1                         |   | 91%                 |   | 154,930     |   | 0.3%                               |   |
|           |   | 394                       |   | 90%                 |   | 51,847,533  |   | 100%                               |   |

 
| **Region** |   |   | ** ** |   | ** ** |       | ** ** |   | ** ** |
|------------|--------|--------|------------|--------|------------|------------|------------|--------|------------|
| East       |   | 100    |       | 89%    |       | 13,901,686 |       | 25.3%  |       |
| Midwest    |   | 76     |       | 88%    |       | 10,350,664 |       | 18.6%  |       |
| South      |   | 182    |       | 91%    |       | 21,665,516 |       | 41.3%  |       |
| West       |   | 36     |       | 90%    |       | 5,929,667  |       | 14.8%  |       |
|       |   | 394    |       | 90%    |       | 51,847,533 |       | 100%   |       |

 

----

(1)  GLArepresents gross leasable area in square feet.

(2)  ABRrepresents 2002 scheduled annualized base rent based on contractual minimumlease payments as of December 31, 2002.

 

The above does not purport to disclose allitems required under GAAP.

 

18

----

 

## ***Item3.***                                   LegalProceedings

 

We are partyto routine litigation matters in the ordinary course of business, none of whichare believed to be material.  We are notaware of any material litigation threatened against us.

 

## ***Item4.***                                   Submissionof Matters to a Vote of Security Holders

 

No matterswere submitted to a vote of our stockholders during the fourth quarter of 2002.

 

**PART II**

 

## ***Item 5.***                                   Market for Registrant’s Common Equity and Related StockholderMatters

 

Our commonstock is listed on the New York Stock Exchange under the symbol “NXL”.  As of March 3, 2003, there wereapproximately 9,805 registered record holders of our common stock, plus thosewho hold their shares in street name. The following table shows the high and low sales price, as reported bythe New York Stock Exchange composite tape, and the cash dividends declaredeach calendar quarter during 2002 and 2001 for our common stock:

 
|           |   | **High** |   | **Low** |   | **Cash  Dividends  Declared** |   |
|----------------|--------|----------|--------|---------|--------|-------------------------------|--------|
| **2001:**      |   |     |   |    |   |                          |   |
| First quarter  |   | $        | 16.19  |    | $      | 13.125                        |   | $ | 0.4125 |   |
| Second quarter |   | 17.99    |   | 15.05   |   | 0.4125                        |   |
| Third quarter  |   | 18.19    |   | 15.47   |   | 0.4125                        |   |
| Fourth quarter |   | 19.59    |   | 16.62   |   | 0.4125                        |   |
|           |   |     |   |    |   |                          |   |
| **2002:**      |   |     |   |    |   |                          |   |
| First quarter  |   | $        | 20.49  |    | $      | 17.55                         |   | $ | 0.4125 |   |
| Second quarter |   | 21.00    |   | 18.70   |   | 0.4125                        |   |
| Third quarter  |   | 20.77    |   | 15.51   |   | 0.4125                        |   |
| Fourth quarter |   | 19.69    |   | 15.77   |   | 0.4125                        |   |

 

We declared dividends of approximately $179.1million for the year ended December 31, 2002.

 

Distributions to stockholders are usuallytaxable as ordinary income, although a portion of the dividend may bedesignated as capital gain or may constitute a tax-free return of capital.  Annually, we provide each of ourstockholders a statement detailing distributions paid during the preceding yearand their characterization as ordinary income, capital gain or return ofcapital.

 

We intend to continue to declare quarterlydistributions.  However, we cannotprovide any assurance as to the amount or timing of future distributions.  Under our existing credit facility and termloan, we are restricted from paying common stock dividends that would exceed95% of our funds from operations during any four-quarter period, except asnecessary to protect our REIT status.

 

19

----

 

**Item**6*.            Selected Financial Data***

 

The financialinformation included in the following table has been derived from the auditedconsolidated financial statements for the periods indicated.  This information should be read together withour audited financial statements and Management’s Discussion and Analysis ofthe Financial Condition and Results of Operations included elsewhere in thisAnnual Report on Form 10-K.

 

On September28, 1998, Excel Realty Trust, Inc. and New Plan Realty Trust (the “Trust”)consummated a merger.  Because the Trusthad a fiscal year end of July 31 prior to the merger, the financial informationincluded in the following table for periods prior to September 28, 1998 isbased on a fiscal year end of July 31. All of the financial information included in the following table forperiods on or after September 28, 1998 relates to the company as a combined entity.  Immediately following the merger, we adopteda fiscal year end of December 31, beginning with a short fiscal year endingDecember 31, 1998.

 

20

----

 

(In thousands, except per share amounts)

 
|                                                                                                        |   | **Years  Ended December 31,** |       | **Five  Months  Ended  December 31,** |       | **Year  Ended  July 31,** |       |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------|------------|---------------------------------------|------------|---------------------------|------------|
| **Statement of Income Data:**                                                                               |   | **2002**                      |       | **2001**                              |       | **2000**                  |       | **1999** |   | **1998** |   | **1998** |   |
| Rental  revenues:                                                                                           |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Rental  income                                                                                              |   | $                             | 310,339    |                                  | $          | 238,010                   |       | $ | 240,478 |   | $ | 244,936 |   | $ | 81,463 |   | $ | 118,441 |   |
| Percentage  rents                                                                                           |   | 6,649                         |       | 5,183                                 |       | 5,384                     |       | 3,811 |   | 1,290 |   | 2,729 |   |
| Expense  reimbursements                                                                                     |   | 75,411                        |       | 54,606                                |       | 49,249                    |       | 48,245 |   | 21,502 |   | 25,597 |   |
| Total  rental revenues                                                                                      |   | 392,399                       |       | 297,799                               |       | 295,111                   |       | 296,992 |   | 104,255 |   | 146,767 |   |
|                                                                                                        |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Expenses:                                                                                                   |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Operating  costs                                                                                            |   | 67,924                        |       | 48,078                                |       | 45,200                    |       | 45,142 |   | 15,931 |   | 23,412 |   |
| Real  estate and other taxes                                                                                |   | 46,835                        |       | 33,216                                |       | 33,959                    |       | 30,728 |   | 10,554 |   | 16,346 |   |
| Interest                                                                                                    |   | 92,953                        |       | 78,534                                |       | 88,071                    |       | 77,545 |   | 25,619 |   | 33,752 |   |
| Depreciation  and amortization                                                                              |   | 66,223                        |       | 51,733                                |       | 49,725                    |       | 48,743 |   | 16,073 |   | 19,829 |   |
| Provision  for doubtful accounts                                                                            |   | 8,979                         |       | 5,614                                 |       | 4,381                     |       | 4,568 |   | 1,649 |   | 2,131 |   |
| Severance  costs                                                                                            |   | —                        |       | 896                                   |       | 4,945                     |       | 8,497 |   | — |   | — |   |
| General  and administrative                                                                                 |   | 17,878                        |       | 10,306                                |       | 7,469                     |       | 6,626 |   | 2,101 |   | 2,754 |   |
| Total  expenses                                                                                             |   | 300,792                       |       | 228,377                               |       | 233,750                   |       | 221,849 |   | 71,927 |   | 98,224 |   |
|                                                                                                        |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Income  before real estate sales, impairment ofreal estate, minority interest and other income and expenses |   | 91,607                        |       | 69,422                                |       | 61,361                    |       | 75,143 |   | 32,328 |   | 48,543 |   |
| Other  income and expenses:                                                                                 |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Interest,  dividend and other income                                                                        |   | 11,014                        |       | 13,990                                |       | 30,426                    |       | 26,015 |   | 5,510 |   | 3,950 |   |
| Equity  participation in ERT                                                                                |   | —                        |       | (4,313                                | )          | (17,867                   | )          | (3,169 | ) | — |   | — |   |
| Equity  in income of unconsolidated ventures                                                                |   | 5,244                         |       | 985                                   |       | —                    |       | — |   | — |   | — |   |
| Foreign  currency (loss) gain                                                                               |   | (13                           | )          | (560                                  | )          | (437                      | )          | 674 |   | 34 |   | — |   |
| Gain  (loss) on sale of real estate                                                                         |   | 371                           |       | 1,610                                 |       | 9,200                     |       | 7,956 |   | — |   | (41 | ) |
| Impairment  of real estate                                                                                  |   | (88,229                       | )          | (13,107                               | )          | (3,620                    | )          | — |   | — |   | — |   |
| Minority  interest in income of consolidatedpartnership                                                     |   | (642                          | )          | (848                                  | )          | (952                      | )          | (1,299 | ) | (457 | ) | — |   |
| Income  from continuing operations                                                                          |   | 19,352                        |       | 67,179                                |       | 78,111                    |       | 105,320 |   | 37,415 |   | 52,452 |   |
|                                                                                                        |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Discontinued  operations:                                                                                   |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Results  of discontinued operations                                                                         |   | 21,692                        |       | 36,483                                |       | 44,212                    |       | 44,193 |   | 18,390 |   | 38,121 |   |
| Gain  on sale of discontinued operations                                                                    |   | 100,668                       |       | 1,500                                 |       | —                    |       | — |   | — |   | — |   |
| Impairment  of real estate held for sale                                                                    |   | (19,332                       | )          | —                                |       | —                    |       | — |   | — |   | — |   |
| Income  from discontinued operations                                                                        |   | 103,028                       |       | 37,983                                |       | 44,212                    |       | 44,193 |   | 18,390 |   | 38,121 |   |
|                                                                                                        |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Net  income before extraordinary item                                                                       |   | 122,380                       |       | 105,162                               |       | 122,323                   |       | 149,513 |   | 55,805 |   | 90,573 |   |
| Extraordinary  item                                                                                         |   | (318                          | )          | —                                |       | 758                       |       | — |   | — |   | — |   |
| Net  income                                                                                                 |   | $                             | 122,062    |                                  | $          | 105,162                   |       | $ | 123,081 |   | $ | 149,513 |   | $ | 55,805 |   | $ | 90,573 |   |
|                                                                                                        |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Net  income available to common stock –basic                                                           |   | $                             | 108,036    |                                  | $          | 82,523                    |       | $ | 100,446 |   | $ | 126,736 |   | $ | 48,891 |   | $ | 84,723 |   |
| Net  income available to common stock –diluted                                                         |   | $                             | 108,678    |                                  | $          | 83,371                    |       | $ | 101,398 |   | $ | 128,035 |   | $ | 49,348 |   | $ | 84,723 |   |
|                                                                                                        |   |                          | ** ** |                                  | ** ** |                      | ** ** |   | ** ** |   | ** ** |   | ** ** |
| Basic  earnings per common share:                                                                           |   |                          | ** ** |                                  | ** ** |                      | ** ** |   | ** ** |   | ** ** |   | ** ** |
| Earnings  per share – continuing operations                                                            |   | $                             | 0.06       |                                  | $          | 0.51                      |       | $ | 0.63 |   | $ | 0.93 |   | $ | 0.39 |   | $ | 0.79 |   |
| Earnings  per share – discontinued operations                                                          |   | 1.08                          |       | 0.44                                  |       | 0.51                      |       | 0.50 |   | 0.24 |   | 0.64 |   |
| Extraordinary  item                                                                                         |   | —                        |       | —                                |       | 0.01                      |       | — |   | — |   | — |   |
| Basic  earnings per common share                                                                            |   | $                             | 1.14       |                                  | $          | 0.95                      |       | $ | 1.15 |   | $ | 1.43 |   | $ | 0.63 |   | $ | 1.43 |   |
|                                                                                                        |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Diluted  earnings per common share:                                                                         |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Earnings  per share – continuing operations                                                            |   | $                             | 0.06       |                                  | $          | 0.51                      |       | $ | 0.63 |   | $ | 0.93 |   | $ | 0.39 |   | $ | 0.78 |   |
| Earnings  per share – discontinued operations                                                          |   | 1.07                          |       | 0.43                                  |       | 0.50                      |       | 0.49 |   | 0.23 |   | 0.64 |   |
| Extraordinary  item                                                                                         |   | —                        |       | —                                |       | 0.01                      |       | — |   | — |   | — |   |
| Diluted  earnings per common share                                                                          |   | $                             | 1.13       |                                  | $          | 0.94                      |       | $ | 1.14 |   | $ | 1.42 |   | $ | 0.62 |   | $ | 1.42 |   |
|                                                                                                        |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Average  shares outstanding – basic                                                                    |   | 95,119                        |       | 87,241                                |       | 87,608                    |       | 88,662 |   | 77,481 |   | 59,365 |   |
| Average  shares outstanding – diluted                                                                  |   | 96,552                        |       | 88,799                                |       | 88,951                    |       | 90,440 |   | 79,396 |   | 59,774 |   |
|                                                                                                        |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| **Other Data:**                                                                                             |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Distributions  per common share                                                                             |   | $                             | 1.650      |                                  | $          | 1.650                     |       | $ | 1.650 |   | $ | 1.625 |   | $ | 0.678 |   | $ | 1.475 |   |
|                                                                                                        |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| **Balance Sheet Data as of the End  of Each Period:**                                                       |   |                          |       |                                  |       |                      |       |   |   |   |   |   |   |
| Net  real estate                                                                                            |   | $                             | 3,269,476  |                                  | $          | 2,413,891                 |       | $ | 2,233,993 |   | $ | 2,318,072 |   | $ | 2,318,001 |   | $ | 977,614 |   |
| Total  assets                                                                                               |   | 3,515,279                     |       | 2,622,866                             |       | 2,894,431                 |       | 2,953,141 |   | 2,896,568 |   | 1,386,831 |   |
| Long  term debt, net (1)                                                                                    |   | 1,713,476                     |       | 949,684                               |       | 1,185,545                 |       | 1,193,100 |   | 1,077,920 |   | 576,888 |   |
| Total  liabilities                                                                                          |   | 1,902,996                     |       | 1,107,361                             |       | 1,314,912                 |       | 1,316,522 |   | 1,158,321 |   | 619,998 |   |
| Minority  interest in consolidated partnership                                                              |   | 39,434                        |       | 22,267                                |       | 23,909                    |       | 25,100 |   | 40,651 |   | — |   |
| Total  stockholders’ equity                                                                            |   | 1,572,849                     |       | 1,493,238                             |       | 1,555,610                 |       | 1,611,519 |   | 1,662,242 |   | 766,833 |   |

 

----

(1)  Long-term debt includes mortgage loans, notes payable, net(including notes payable, other) and credit facilities.

 

21

----

 

## ***Item 7.***                                   Management’sDiscussion and Analysis of FinancialCondition and Results of Operations

 

**CriticalAccounting Policies**

 

Ourconsolidated financial statements include our accounts and those of allmajority-owned subsidiaries.  Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States requires us to make estimates andassumptions in certain circumstances that affect amounts reported in theaccompanying consolidated financial statements and related footnotes.  In preparing these financial statements, wehave made our best estimates and judgments of certain amounts included in thefinancial statements, giving due consideration to materiality.  We do not believe there is a greatlikelihood that materially different amounts would be reported related to theaccounting policies described below. However, application of these accounting policies involves the exerciseof judgment and use of assumptions as to future uncertainties and, as a result,actual results could differ from these estimates.

 

*Revenue Recognition*

 

We recognizerental revenue on a straight-line basis, which averages minimum rents over theterms of the leases. The cumulative difference between lease revenue recognizedunder this method and contractual lease payment terms is recorded as “deferredrent receivable”, and is included in trade receivables in our consolidatedbalance sheets.  Certain leases providefor percentage rents based upon the level of sales achieved by the lessee.  Percentage rents are recorded once therequired sales level is achieved. Leases also typically provide for tenant reimbursements of common areamaintenance and other operating expenses. Rental income also includes lease termination fees.

 

We must makeestimates of the uncollectability of our accounts receivables related to baserents, expense reimbursements and other revenue or income.  We specifically analyze accounts receivableand historical bad debts, customer concentrations, customer credit worthiness,current economic trends and changes in our customer payment terms whenevaluating the adequacy of the allowance for doubtful accounts.  These estimates have a direct impact on ournet income, because a higher bad debt reserve results in less net income.

 

The Securitiesand Exchange Commission’s Staff Accounting Bulletin (SAB) No. 101 *RevenueRecognition*provides guidance on the application of accountingprinciples generally accepted in the United States to selected revenuerecognition issues. We have concluded that our revenue recognition policy isappropriate and in accordance with accounting principles generally accepted inthe United States and SAB No. 101.

 

*Real Estate*

 

We recordland, buildings and building and tenant improvements at cost and they arestated at cost less accumulated depreciation. Major replacements and betterments, which improve or extend the life ofthe asset, are capitalized and depreciated over their estimated useful lives;ordinary repairs and maintenance, are expensed as incurred.

 

22

----

 

Properties aredepreciated using the straight-line method over the estimated useful lives ofthe assets.  The estimated useful livesare as follows:

 

| Buildings             |   | 35 to 40 years                                              |
|-----------------------|--------|-------------------------------------------------------------|
| Building improvements |   | 5 to 40 years                                               |
| Tenant improvements   |   | The shorter of the term of the related lease or useful life |

 

We arerequired to make subjective assessments as to the useful lives of ourproperties for purposes of determining the amount of depreciation to reflect onan annual basis.  These assessments havea direct impact on our net income.  Forexample, if we were to lengthen the expected useful life of a particularbuilding improvement, the improvement would be depreciated over a greaternumber of years, resulting in less depreciation expense and higher net incomeon an annual basis.

 

*Long Lived Assets*

 

On a periodicbasis, we assess whether there are any indicators that the value of the realestate properties may be impaired.  Aproperty’s value is impaired only if our estimate of the aggregate future cashflows (undiscounted and without interest charges) to be generated by theproperty (taking into account the anticipated holding period of the asset) isless than the carrying value of the property. Such cash flows consider factors such as expected future operatingincome, trends and prospects, as well as the effects of demand, competition andother factors.  To the extent impairmenthas occurred, the loss will be measured as the excess of the carrying amount ofthe property over the fair value of the property.

 

When weidentify assets as held for sale, we discontinue depreciating the assets andestimate the sales price, net of selling costs of such assets.  If, in our opinion, the net sales price ofthe assets which we have identified for sale is less than the net book value ofthe assets, a valuation allowance is established.  For investments accounted for under the equity method, a loss isrecognized if the loss in value of the investment is other than temporary.

 

When we makesubjective assessments as to whether there are impairments in the value of ourreal estate properties, we have a direct impact on our net income, becausetaking an impairment results in an immediate negative adjustment to net income.

 

###### **RecentlyIssued Accounting Standards**

 

In January2003, FASB issued FASB Interpretation No. 46, *Consolidation of Variable InterestEntities*, (“FIN 46”) an interpretation of ABR 51.  FIN 46 provides guidance on identifyingentities for which control is achieved through means other than through votingrights, variable interest entities (“VIE”), and how to determine when and whichbusiness enterprises should consolidate the VIE.  In addition, FIN 46 requires both the primary beneficiary and allother enterprises with a significant variable interest in a VIE to makeadditional disclosures.  Thetransitional disclosure requirements will take effect almost immediately andare required for all financial statements initially issued after January 31,2003.  The consolidation provisions ofFIN 46 are effective immediately for variable interests in VIEs created afterJanuary 31, 2003.  For variableinterests in VIEs created before February 1, 2003, the provisions of FIN 46 areeffective for the first interim period beginning after June 15, 2003.  We do not expect the adoption of FIN 46 tohave a material impact because our potential variable interests in VIEs are ourInvestments in Unconsolidated Ventures.

 

In December2002, FASB issued Statement 148, *Accounting for Stock-Based Compensation – Transitionand Disclosure – an amendment of FAS 123* (“SFAS No. 148”).  This statement provides alternativetransition methods for a voluntary change to the fair value basis of accountingfor stock-based employee compensation.  However,SFAS 148 does not permit the use of the original FAS 123 prospective method oftransition for changes to fair value based methods made in fiscal yearsbeginning after December 15, 2003.  Inaddition, SFAS No. 148

 

23

----

 

amends the disclosurerequirements of FAS 123 to require prominent disclosures in both annual andinterim financial statements about the method of accounting for stock-basedemployee compensation, description of the transition method utilized and theeffect of the method used on reported results. The transition and annual disclosure provisions of SFAS No. 148 shall beapplied for fiscal years ending after December 15, 2002.  The new interim disclosure provisions areeffective for the first interim period beginning after December 15, 2002.  Effective January 1, 2003, we will adopt theprospective method provisions of SFAS No. 148, which will apply the recognitionprovisions of SFAS 123 to all employee awards granted, modified or settledafter January 1, 2003.  The adoption isnot expected to have a material impact on our financial statements.

 

In November 2002, FASB issued FASB Interpretation No. 45 (“FIN 45”), *Guarantor’sAccounting and Disclosure Requirements for Guarantees, Including Indirect Guaranteesof Indebtedness of Others* (an interpretation of FASB Statements No.5, 57 and 107 and rescission of FASB Interpretation No. 34).  FIN 45 clarifies the requirements of FASBStatement No. 5, *Accounting for Contingencies*.  It requires that upon issuance of a guarantee, the guarantor mustrecognize a liability for the fair value of the obligation it assumes underthat guarantee regardless of whether or not the guarantor receives separateidentifiable consideration (i.e., a premium). We have adopted the new disclosure requirements, which are effectivebeginning with 2002 calendar year-end financials.  FIN 45’s provisions for initial recognition and measurement areeffective on a prospective basis to guarantees issued or modified afterDecember 31, 2002.  The adoption of FIN45 is not expected to have a material impact on our financial statements.

 

In July 2002, FASB issued Statement 146, *Accounting for Costs Associated withExit or Disposal Activities*(“SFAS No. 146”).  This statement addresses financial accountingand reporting for costs associated with exit or disposal activities andnullifies Emerging Issues Task Force Issue No. 94-3, *Liability Recognition for CertainEmployee Termination Benefits and Other Costs to Exit an Activity (includingCertain Costs Incurred in Restructuring)*.  It addresses when to recognize a liability for a cost associatedwith an exit or disposal activity such as, but not limited to, terminationbenefits provided to current employees that are involuntarily terminated, coststo terminate a contract that is not a capital lease and costs to consolidatefacilities or relocate employees.  SFASNo. 146 does not apply to entities newly acquired in a business combination orwith a disposal activity covered by FASB Statement No. 144, *Accountingfor the Impairment or Disposal of Long-Lived Assets* (“SFAS No. 144”)or to costs associated with the retirement of long-lived assets covered by FASBStatement No. 143, *Accounting for Asset Retirement Obligations*.  SFAS No. 146 states that a liability for acost associated with an exit or disposal activity be recognized and measuredinitially at fair value only when the liability is incurred and not at the dateof an entity’s commitment to a plan, as previously defined in Issue 94-3.  The provisions of SFAS No. 146 shall beapplied for exit and disposal activities that are initiated after December 31,2002.  The adoption of SFAS No. 146 isnot expected to have a material impact on our financial results.

 

In April 2002, FASB issued Statement 145, *Rescission of FASB Statements No. 4,44, and 64, Amendment of FASB Statement No. 13 and Technical Corrections*(“SFASNo. 145”).  This statement rescinds FASBStatement No. 4, *Reporting Gains and Losses from Extinguishment of Debt*.  Debt extinguishments that do not meet thecriteria for classification as extraordinary items in APB Opinion No. 30(“Opinion 30”) should not be classified as extraordinary.  The provisions of SFAS No. 145 shall beapplied in fiscal years beginning after May 15, 2002.  Debt extinguishments that were classified as extraordinary inprior periods presented that do not meet the criteria of Opinion 30 forclassification as an extraordinary item shall be reclassified.  We will adopt this statement, as required,effective January 1, 2003, and the adoption of SFAS No. 145 is not expected tohave a material impact on our financial statements.

 

EffectiveJanuary 1, 2002, we adopted SFAS No. 144. This statement addresses financial accounting and reporting for theimpairment of long-lived assets and for the disposition of long-livedassets.  SFAS No. 144 requires, amongother things, that the primary assets and liabilities and the results ofoperations of real properties

 

24

----

 

which have been sold during2002, or otherwise qualify as held for sale (as defined by SFAS No. 144), beclassified as discontinued operations and segregated in our Consolidated IncomeStatements and Balance Sheets. Properties classified as real estate held for sale generally representproperties that are under contract for sale and are expected to close withinthe next twelve months.  SFAS No. 144requires that the provisions of this statement be adopted prospectively.  Accordingly, real estate designated as heldfor sale prior to January 1, 2002 will continue to be accounted for under theprovisions of SFAS No. 121 and the results of operations, including impairment,gains and losses, of these properties are included in income from continuingoperations.  Real estate designated asheld for sale subsequent to January 1, 2002 will be accounted for in accordancewith the provisions of SFAS No. 144 and the results of operations of theseproperties are included in income from discontinued operations.  We have restated prior periods for comparability,as required.

 

**Results of Operations**

 

The followingdiscussion should be read in conjunction with the Consolidated FinancialStatements and the accompanying notes. Historical results and percentage relationships set forth in theConsolidated Statements of Income contained in the Consolidated FinancialStatements and accompanying notes, including trends which might appear, shouldnot be taken as indicative of future operations.

 

On December 19, 2002, we completed the saleof four of our factory outlet centers (the “Factory Outlet Disposition”) toChelsea Property Group, Inc.  The fourproperties included St. Augustine Outlet Center, located in St. Augustine,Florida; Factory Merchants Branson, located in Branson, Missouri; FactoryOutlet Village Osage Beach, located in Osage Beach, Missouri; and JacksonOutlet Village, located in Jackson, New Jersey.  Accordingly, the assets and operating results of the four factoryoutlet centers were reclassified and reported as discontinued operations andare not reflected in the following discussion.

 

On December 12, 2002, we completed the EIG Acquisition.  Accordingly, our results of operations forthe year ended December 31, 2002 include the results of operations of theproperties acquired in the EIG Acquisition from and after December 12, 2002.

 

On March 1,2002, we completed the CenterAmerica Acquisition.  As part of the acquisition, we also acquired a 10% managingmembership interest in a joint venture with a private U.S. pension fund.  Accordingly, our results of operations forthe year ended December 31, 2002 include the results of operations from theproperties acquired in the CenterAmerica Acquisition from and after March 1,2002.

 

In addition tothe EIG Acquisition and the CenterAmerica Acquisition, we acquired threeseparate properties, Superior Marketplace, Whitestown Plaza and Midway MarketSquare, during 2002 (collectively, “2002 Other Acquisitions”).  During 2001, we acquired Arapahoe Crossingsand the Stein Mart Center (collectively, “2001 Other Acquisitions”).  Accordingly, our results of operations forthe years ended December 31, 2002 and 2001 include the results of operations ofthe 2002 Other Acquisitions and the 2001 Other Acquisitions, respectively.

 

On September21, 2001, we completed the sale of our garden apartment community portfolio(excluding one apartment community which was sold separately to an unrelatedthird party on September 28, 2001) to a private investor group,Houlihan/C.L.K.  Our one remainingapartment community (The Club Apartments) was sold to Homewood City Board ofEducation of Homewood, Alabama. Accordingly, the assets and operating results of the garden apartmentcommunities were reclassified and reported as discontinued operations and arenot reflected in the following discussion.

 

On July 1,2001, we acquired 100% of the common stock of ERT Development Corporation(“ERT”).  Effective July 1, 2001, weconsolidated the results of operations of ERT. Prior to July 1, 2001, we owned 100% of the outstanding preferred sharesof ERT.  We accounted for ERT using theequity method of accounting prior to July 1, 2001.

 

25

----

 

In 2001, wesold 26 properties, seven land parcels and one outparcel, and in 2002, we soldtwo properties which were not classified as held for sale as of December 31,2001, one outparcel and one land parcel (collectively, “Sold Properties”).

 

**Resultsof Operations for the Twelve Months Ended December 31, 2002 and 2001**

 

***Revenues:***

 

Rental incomeincreased $72.3 million, or 30%, from $238.0 million in 2001 to $310.3 millionin 2002.  The following factorsaccounted for this variance:

 

•                  TheCenterAmerica Acquisition, which increased rental income by approximately $61.1million

 

•                  The EIGAcquisition, which increased rental income by approximately $2.6 million

 

•                  2002 OtherAcquisitions, which increased rental income by approximately $0.6 million

 

•                  Theconsolidation of ERT for the entire year, which increased rental income byapproximately $6.0 million

 

•                  Increased leasesettlement income of approximately $1.9 million

 

•                  Combinedincreases in specialty rent and cost of living of approximately $0.3 million

 

•                  Increased otherincome of approximately $0.2 million

 

•                  Reduction ofcapitalized revenue, which increased rental income by approximately $1.1million

 

•                  Increases inrental rates, combined with rental revenues generated by properties previouslyunder redevelopment, which increased rental income by approximately $2.6million

 

•                  Sold Properties,which reduced rental income by approximately $4.2 million

 

Percentagerents increased $1.4 million, or 27%, from $5.2 million in 2001 to $6.6 millionin 2002.  The following factorsaccounted for this variance:

 

•                  TheCenterAmerica Acquisition, which increased percentage rents by approximately$0.4 million

 

•                  Theconsolidation of ERT for the entire year, which increased percentage rents byapproximately $1.4 million

 

•                  A generaldecrease in tenants’ sales, which decreased percentage rents by approximately$0.3 million

 

•                  Sold Properties,which resulted in a reduction of percentage rents of approximately $0.1 million

 

Expensereimbursements increased $20.8 million, or 38%, from $54.6 million in 2001 to$75.4 million in 2002.  The followingfactors accounted for this variance:

 

•                  TheCenterAmerica Acquisition, which increased expense reimbursements byapproximately $14.4 million

 

•                  The EIGAcquisition, which increased expense reimbursements by approximately $0.4million

 

•                  2002 OtherAcquisitions, which increased expense reimbursements by approximately $0.1million

 

•                  Theconsolidation of ERT for the entire year, which increased expensereimbursements by approximately $1.3 million

 

26

----

 

•                  An increase inreimbursable real estate taxes and property operating expenses, which increasedexpense reimbursements by approximately $4.9 million

 

•                  Expensereimbursements attributable to Sold Properties, which decreased expensereimbursements by approximately $0.3 million

 

Interest,dividend and other income decreased $3.0 million, or 21%, from $14.0 million in2001 to $11.0 million in 2002.  Thefollowing factors accounted for this variance:

 

•                  TheCenterAmerica Acquisition, which increased interest, dividend and other incomeby approximately $0.6 million

 

•                  2002 OtherAcquisitions, which increased interest, dividend and other income byapproximately $0.3 million

 

•                  Fee incomeattributable to the nine percent fee charged by us on the letter of creditissued in connection with the sale of our garden apartment portfolio, whichincreased interest, dividend and other income by approximately $3.1 million

 

•                  An increase ininterest, dividend and other income attributable to Sold Properties ofapproximately $0.1 million

 

•                  Theconsolidation of ERT for the entire year, which decreased interest, dividendand other income by approximately $5.9 million

 

•                  Lower mortgagesand notes receivable balances which reduced interest, dividend and other incomeby approximately $1.2 million

 

Equityparticipation in ERT in 2001 was approximately $(4.3) million.  We did not record any equity participationin 2002 as we consolidated ERT for financial statement purposes for periodseffective after July 1, 2001, and the results of its operations are reflectedin our consolidated net income.

 

As a result ofthe CenterAmerica Acquisition and the consolidation of ERT, we acquired directequity investments in the CA New Plan Venture Fund, Vail Ranch II and TheCentre at Preston Ridge joint venture projects.  We also maintain joint venture interests in Benbrooke Venturesand Clearwater Mall, LLC.  Theseprojects resulted in combined income of approximately $5.2 million, which isrecorded in “Equity in income of unconsolidated ventures” for the year endedDecember 31, 2002.

 

We recorded foreigncurrency loss of approximately $0.6 million in 2001.  This loss was attributable to notes receivable from a Canadiancompany.  These notes were repaid infull during 2002, and accordingly, we recorded only a nominal amount of lossduring 2002.

 

***Expenses:***

 

Total expensesincreased $72.4 million, or 32%, from $228.4 million in 2001 to $300.8 millionin 2002. The major areas of change are discussed below.

 

Operatingcosts increased $19.8 million, or 41%, from $48.1 million in 2001 to $67.9million in 2002. The following factors accounted for this variance:

 

•                  TheCenterAmerica Acquisition, which increased operating costs by approximately$12.7 million

 

•                  The EIGAcquisition, which increased operating costs by approximately $0.1 million

 

•                  2002 Other Acquisitions,which increased operating costs by approximately $0.1 million

 

27

----

 

•                  Theconsolidation of ERT for the entire year, which increased operating costs byapproximately $2.6 million

 

•                  Increasedinsurance expense as a result of higher premiums under our renewed policy andour addition of a higher coverage terrorism clause of approximately $4.7million

 

•                  Combinedincreases in payroll expense and snow removal costs of approximately $0.6million

 

•                  Sold Properties,which reduced operating expenses by approximately $0.6 million

 

•                  Decreasedutilities expense of approximately $0.4 million

 

Real estateand other taxes increased $13.6 million, or 41%, from $33.2 million in 2001 to$46.8 million in 2002.  The followingfactors accounted for this variance:

 

•                  TheCenterAmerica Acquisition, which increased real estate and other taxes byapproximately $11.1 million

 

•                  2002 OtherAcquisitions, which increased real estate and other taxes by approximately $0.1million

 

•                  Theconsolidation of ERT for the entire year, which increased real estate and othertaxes by approximately $0.3 million

 

•                  Property taxrate increases at certain municipalities, combined with higher assessments atcertain properties, which increased real estate and other taxes byapproximately $2.3 million

 

•                  Sold Properties,which reduced real estate and other taxes by approximately $0.2 million

 

Interestexpense increased $14.5 million, or 18%, from $78.5 million in 2001 to $93.0million in 2002.  The following factorsaccounted for this variance:

 

•                  Debt assumed inconnection with the CenterAmerica Acquisition, which increased interest expenseby approximately $13.4 million

 

•                  Debt assumed inconnection with the EIG Acquisition, which increased interest expense byapproximately $0.3 million

 

•                  Debt assumed inconnection with 2002 Other Acquisitions, which increased interest expense byapproximately $0.2 million

 

•                  Our issuance of$250 million of bonds during the second quarter, which increased interest expenseby approximately $7.0 million

 

•                  An increase inthe amortization of debt issuance costs, which increased interest expense byapproximately $2.1 million

 

•                  Increasedmortgage interest expense of approximately $0.3 million

 

•                  Sold Properties,which reduced interest expense by approximately $0.4 million

 

•                  The repayment ofapproximately $81 million of notes payable in May 2002, which reduced interestexpense by approximately $2.8 million

 

•                  Refinancing andpay down of the Fleet Revolving Facility, which reduced interest expense byapproximately $4.2 million

 

•                  Increasedcapitalization with respect to our redevelopment projects, which reducedinterest expense by $1.4 million

 

28

----

 

Depreciationand amortization expense increased $14.5 million, or 28%, from $51.7 million in2001 to $66.2 million in 2002.   Thefollowing factors accounted for this variance:

 

•                  TheCenterAmerica Acquisition, which increased depreciation and amortizationexpense by approximately $9.3 million

 

•                  The EIGAcquisition, which increased depreciation and amortization expense byapproximately $0.3 million

 

•                  2002 OtherAcquisitions, which increased depreciation and amortization expense byapproximately $0.2 million

 

•                  Theconsolidation of ERT for the entire year, which increased depreciation andamortization expense by approximately $2.3 million

 

•                  Increasedcapital spending during 2002, which increased depreciation and amortizationexpense by approximately $2.4 million

 

Provision fordoubtful accounts increased $3.4 million, or 61%, from $5.6 million in 2001 to$9.0 million in 2002.  This increasereflects the inclusion of expenses associated with the CenterAmericaAcquisition and the consolidation of ERT of approximately $1.5 million and $0.8million, respectively, compounded by increased reserves attributable to certainKmart leases of approximately $3.4 million. These increases were partially offset by reduced reserve levelsattributable to lower write-offs, which reduced the provision for doubtfulaccounts by approximately $2.3 million.

 

In 2001, werecorded approximately $0.9 million of severance costs, attributable topayments made to certain of our officers in connection with their resignationor retirement, and in accordance with the terms of their respectiveretirement/employment agreements.

 

General andadministrative expenses increased $7.6 million, or 74%, from $10.3 million in2001 to $17.9 million in 2002.  Thefollowing factors accounted for this variance:

 

•                  TheCenterAmerica Acquisition, which increased general and administrative expensesby approximately $4.0 million

 

•                  Increasedfranchise tax expense of approximately $2.9 million, resulting fromPennsylvania tax legislation passed during 2002

 

•                  Combinedincreases in payroll related expenses, office costs, and professional fees ofapproximately $2.8 million

 

•                  Increaseddepreciation expense on non-real estate assets of approximately $0.6 million

 

•                  Increasecapitalized costs, which reduced general and administrative expenses byapproximately $2.7 million

 

***Gains on the Sale ofAssets:***

 

We sold twoshopping centers, one outparcel and one land parcel during 2002 that resultedin a gain of approximately $0.4 million. Excluding the sale of our gardenapartment portfolio, we sold 26 properties, seven land parcels and oneoutparcel during 2001.  The sale ofthese properties resulted in a gain of $1.6 million.

 

29

----

 

***Impairment of RealEstate:***

 

As part of theperiodic assessment of our real estate properties relative to both the extentto which such assets are consistent with our long-term real estate investmentobjectives and the performance and prospects of each asset, we determined inthe fourth quarter of 2002 that our investment in two properties was impaired.Given the substantial culmination during the fourth quarter of 2002 of ournon-core asset recycling program and therefore achievement of our goal relativeto executing a product strategy focused on our core assets of community andneighborhood shopping centers, we reduced our anticipated holding period ofcertain of our remaining non-core assets. As a result of the reduction in the anticipated holding period, togetherwith a reassessment of the anticipated future operating income of theproperties and the effects of new competition and demand for the properties, wedetermined that our investment in Pointe Orlando and Factory Merchants Barstowwas impaired and recorded an impairment ofreal estate of approximately $88.0 million related to these assets.  At Pointe Orlando, we took a $70.0 millionimpairment charge, reducing the book value of this asset to $88.0 million andat Factory Merchants Barstow, we took an $18.0 million impairment charge,reducing the book value of this asset to $15.0 million.

 

***DiscontinuedOperations:***

 

EffectiveJanuary 1, 2002, we adopted SFAS No. 144. This statement retains the requirement of Opinion 30 to reportdiscontinued operations separately from continuing operations, and extends thatreporting to a component of an entity that either has been disposed of (bysale, by abandonment, or in a distribution to owners) or is classified as heldfor sale.  As of December 31, 2002, suchproperties generated approximately $21.7 million, $19.3 million and $100.7 millionin results of operations, impairment expense and gain on sale,respectively.  Accordingly, theseamounts have been classified as discontinued operations.  The results of operations for theseproperties, as well as the operating results of our garden apartmentcommunities, have also been classified as “Discontinued Operations” for 2001.

 

***Extraordinary Item:***

 

We reported anextraordinary loss of approximately $0.3 million in 2002.  This loss was attributable to the write-offof unamortized mortgage premiums/discounts in connection with our prepayment ofcertain mortgages.

 

**Resultsof Operations for the Twelve Months Ended December 31, 2001 and 2000**

 

***Revenues:***

 

Rental incomedecreased $2.5 million, or 1%, from $240.5 million in 2000 to $238.0 million in2001.  The following factors accountedfor this variance:

 

•                  2001 OtherAcquisitions, which increased rental income by approximately $1.7 million

 

•                  Theconsolidation of ERT for the six months subsequent to July 1, 2001, whichincreased rental income by approximately $7.2 million

 

•                  Sold properties,which reduced rental income by approximately $4.7 million

 

•                  Clearwater Mall,a property which is undergoing redevelopment, which had decreased rental incomeof approximately $3.3 million in 2001

 

•                  A decrease inlease settlement income of approximately $0.3 million

 

•                  Lower occupancyrates, which reduced rental income by approximately $3.1 million

 

30

----

 

Expensereimbursements increased $5.4 million, or 11%, from $49.2 million in 2000 to$54.6 million in 2001.  The followingfactors accounted for this variance:

 

•                  2001 OtherAcquisitions, which increased expense reimbursements by approximately $0.2million

 

•                  Theconsolidation of ERT for the six months subsequent to July 1, 2001, whichincreased expense reimbursements by approximately $1.8 million

 

•                  An increase inreimbursable real estate taxes and property operating expenses, which increasedexpense reimbursements by approximately $4.4 million

 

•                  Sold Properties,which reduced expense reimbursements by approximately $0.5 million

 

•                  Clearwater Mall,a property which is undergoing redevelopment, which had reduced expensereimbursements of approximately $0.5 million in 2001

 

Interest,dividend and other income decreased $16.4 million, or 54%, from $30.4 millionin 2000 to $14.0 million in 2001.  Thefollowing factors accounted for this variance:

 

•                  2001 OtherAcquisitions, which increased interest, dividend and other income byapproximately $0.1 million

 

•                  The consolidationof ERT for the six months subsequent to July 1, 2001, which reduced interest,dividend and other income by approximately $11.5 million

 

•                  A reduction ofinterest income attributable to our development projects of approximately $2.3million

 

•                  Lower mortgageand notes receivable balances, which reduced interest, dividend and otherincome by approximately $0.6 million

 

•                  Combineddecreases in insurance recoveries, fees and miscellaneous income ofapproximately $2.1 million

 

Equityparticipation in ERT increased $13.6 million, or 76%, from $(17.9) million in2000 to $(4.3) million in 2001.  Thischange is primarily attributable to our consolidation of ERT subsequent to July1, 2001.

 

***Expenses:***

 

Total expensesdecreased $5.4 million, or 2%, from $233.8 million in 2000 to $228.4 million in2001.  The major areas of change arediscussed below.

 

Operatingexpenses increased $2.9 million, or 6%, from $45.2 million in 2000 to $48.1million in 2001.  The following factorsaccounted for this variance:

 

•                  2001 Other Acquisitions,which increased operating expenses by approximately $0.3 million

 

•                  Theconsolidation of ERT subsequent to July 1, 2001, which increased operatingexpenses  by approximately $3.5 million

 

•                  Combinedincreases in payroll related expenses, repairs, utilities and other expenses ofapproximately $2.7 million

 

•                  Sold Properties,which reduced operating expenses by approximately $0.8 million

 

•                  Clearwater Mall,a property undergoing redevelopment, which reduced operating expenses byapproximately $1.5 million

 

•                  Combineddecreases in snow removal and insurance costs of approximately $1.3 million

 

31

----

 

Interestexpense decreased $9.6 million, or 11%, from $88.1 million in 2000 to $78.5million in 2001.  The following factorsaccounted for this variance:

 

•                  Theconsolidation of ERT subsequent to July 1, 2001, which increased interestexpense by approximately $3.6 million

 

•                  Swap interest,which increased interest expense by approximately $2.6 million

 

•                  Sold Properties,which reduced interest expense by approximately $0.2 million

 

•                  Lower debtlevels and reduced interest rates, which reduced interest expense byapproximately $14.0 million

 

•                  Increasedcapitalized interest relating to our development projects, which reducedinterest expense by approximately $1.6 million

 

Depreciationand amortization expense increased $2.0 million, or 4%, from $49.7 million in2000 to $51.7 million in 2001.  Thefollowing factors accounted for this variance:

 

•                  2001 Other Acquisitions,which increased depreciation and amortization by approximately $0.4 million

 

•                  Theconsolidation of ERT subsequent to July 1, 2001, which increased depreciationand amortization by approximately $2.3 million

 

•                  Increasedcapital spending, which increased depreciation and amortization byapproximately $0.7 million

 

•                  Sold Properties,which reduced depreciation and amortization by approximately $1.1 million

 

•                  Clearwater Mall,a property undergoing redevelopment, which had reduced depreciation and amortizationexpense of approximately $0.3 million

 

Provision fordoubtful accounts increased $1.2 million, or 27%, from $4.4 million in 2000 to$5.6 million in 2001. This increase is primarily attributable to a $1.8 millionreserve recorded in connection with the bankruptcy filing of Kmart Corporation,our largest tenant in 2001, offset by reduced reserve levels attributable tolower write-offs, which reduced the provision for doubtful accounts byapproximately $0.6 million.

 

Severancecosts declined $4.0 million, or 82%, from $4.9 million in 2000 to $0.9 millionin 2001.  The severance costs in bothyears were attributable to payments made to certain officers in connection withtheir resignation or retirement, in accordance with the terms of their respectiveretirement/employment agreements.

 

General andadministrative expenses increased $2.8 million, or 37%, from $7.5 million in2000 to $10.3 million in 2001.  Thefollowing factors accounted for this variance:

 

•                  Theconsolidation of ERT subsequent to July 1, 2001, which increased general andadministrative expenses by approximately $0.4 million

 

•                  Combinedincreases in payroll expenses, office costs, insurance, taxes, miscellaneousexpenses and professional fees of approximately $3.0 million

 

•                  Increased depreciationexpense of approximately $0.2 million on non-real estate assets

 

•                  Increasedcapitalized costs related to our development projects, which reduced generaland administrative expenses by approximately $0.8 million.

 

32

----

 

***Gains on the Sale ofAssets:***

 

Excluding thesale of our garden apartment portfolio, we sold 26 properties, seven landparcels and one outparcel during 2001. These sales resulted in a gain of approximately $1.6 million.  In 2000, we sold 11 retail properties andone commercial property, which resulted in a gain of $9.2 million.

 

***Impairment of RealEstate:***

 

In 2001, theestimated fair value of certain properties classified as “Real estate held forsale” was less than the book value of these properties.  This resulted in an impairment of realestate of approximately  $13.1million.  Impairment of real estate wasapproximately $3.6 million in 2000.

 

***DiscontinuedOperations:***

 

EffectiveJanuary 1, 2002, we adopted SFAS No. 144. This statement retains the requirement of Opinion 30 to reportdiscontinued operations separately from continuing operations, and extends thatreporting to a component of an entity that either has been disposed of (bysale, by abandonment, or in a distribution to owners) or is classified as heldfor sale.  As of December 31, 2001 and2000, such properties generated approximately $36.5 million and $44.2 millionin results of operations, and $1.5 million and $0 in gain on sale, respectively.  Accordingly, these amounts have beenclassified as discontinued operations.

 

***Extraordinary Item:***

 

During 2000,we prepaid a mortgage which had an unamortized mortgage premium associated withit.  The elimination of this premiumresulted in an extraordinary item of $0.8 million.

 

**Same Property Analysis**

 

Included inour consolidated results of operations are the results of operations ofproperties that have been owned for the full periods presented below(“Same-Store Properties”).  TheSame-Store Properties results exclude the results of operations of propertiesthat have undergone or are undergoing redevelopment during the applicableperiods, as well as properties acquired or disposed of during the periodspresented.  Same-Store Properties financialinformation and statistics are as follows (in thousands, except for number ofproperties included in analysis):

 
|                                      |   | **Years  Ended December 31,** |       |
|-------------------------------------------|--------|-------------------------------|------------|
|                                      |   | **2002**                      | ** ** | **2001** | ** ** |
|                                      |   |                          | ** ** |   | ** ** |
| Number of properties included in analysis |   | 208                           |       | 208 |   |
| Percent leased (weighted average)         |   | 90.2                          | %          | 92.4 | % |
|                                      |   |                          |       |   |   |
| Rental revenues:                          |   |                          |       |   |   |
| Rental income                             |   | $                             | 206,588    |   | $ | 208,686 |   |
| Percentage rents                          |   | 4,989                         |       | 4,676 |   |
| Expense reimbursements                    |   | 51,397                        |       | 46,989 |   |
| Total rental revenues                     |   | 262,974                       |       | 260,351 |   |
|                                      |   |                          |       |   |   |
| Expenses:                                 |   |                          |       |   |   |
| Operating costs                           |   | 45,412                        |       | 42,570 |   |
| Real estate and other taxes               |   | 29,191                        |       | 27,797 |   |
| Provision for doubtful accounts           |   | 5,848                         |       | 6,119 |   |
| Total expenses                            |   | 80,451                        |       | 76,486 |   |
|                                      |   |                          |       |   |   |
| Net operating income                      |   | $                             | 182,523    |   | $ | 183,865 |   |

 

33

----

 

**Results of Operations for the Twelve MonthsEnded December 31, 2002 and 2001 for Same-Store Properties**

 

***Revenues:***

 

Rental incomefor the Same-Store Properties decreased $2.1 million, or 1%, from $208.7million in 2001 to $206.6 million in 2002. This decrease is attributable to a 2.2% decline in occupancy.

 

Expensereimbursements increased $4.4 million, or 9%, from $47.0 million in 2001 to$51.4 million in 2002.  This increase isdue primarily to the recovery of an increased amount of total property expensesin 2002, as well as increased tenant billings, partially offset by a decreaseof $0.6 million attributable to the Kmart leases which were rejected inbankruptcy.

 

***Expenses:***

 

Total expensesincreased $4.0 million, or 5%, from $76.5 million in 2001 to $80.5 million in2002.  The major areas of change arediscussed below.

 

Operatingexpenses increased $2.8 million, or 7%, from $42.6 million in 2001 to $45.4million in 2002.  This increase isprimarily attributable to increased insurance expense as a result of higherpremiums under our renewed policy, and our addition of increased terrorismcoverage.

 

Real estateand other taxes increased $1.4 million, or 5%, from $27.8 million in 2001 to$29.2 million in 2002.  This increase isdue primarily to property tax rate increases in certain municipalities combinedwith higher assessments at certain properties in 2002.

 

Provision fordoubtful accounts decreased $0.3 million, or 5%, from $6.1 million in 2001 to$5.8 million in 2002.  This increase isprimarily attributable to reduced reserve levels attributable to lowerwrite-offs, partially offset by a $1.8 million reserve related to the Kmartleases that were rejected in bankruptcy.

 

**Fundsfrom Operations**

 

Funds from Operations(“FFO”) is a widely used performance measure for real estate companies and isprovided here as a supplemental measure of operating performance to net incomecalculated in accordance with generally accepted accounting principles(“GAAP”).  We calculate FFO inaccordance with the best practices described in the April 2002 National PolicyBulletin of the National Association of Real Estate Investment Trusts (the“White Paper”).  The White Paper definesFFO as net income (loss) (computed in accordance with GAAP), excluding gains(or losses) from debt restructuring and sales of property, plus real estaterelated depreciation and amortization and after adjustments for unconsolidatedpartnerships and joint ventures.  Giventhe nature of our business as a real estate owner and operator, we believe thatFFO is helpful to investors as a measure of our operational performance becauseit excludes various items included in net income that do not relate to or arenot indicative of our operating performance such as various non-recurringitems, gains and losses on sales of real estate and real estate relateddepreciation and amortization, which can make periodic and peer analyses ofoperating performance more difficult to compare.  FFO should not, however, be considered as an alternative to netincome (determined in accordance with GAAP) as an indicator of our financialperformance, is not an alternative to cash flow from operating activities(determined in accordance with GAAP) as a measure of our liquidity, and is notindicative of funds available to fund our cash needs, including our ability tomake distributions.  Our computation ofFFO may differ from the methodology utilized by other equity REITs to calculateFFO and, therefore, may not be comparable to such other REITs.

 

34

----

 

The following information isprovided to reconcile net income, the most comparable GAAP number, to FFO, andto show the items included in our FFO for the past periods indicated (inthousands):

 
|                                                          |   | **Year  Ended  December 31,** |    | **Year  Ended  December 31,** |   | **Year  Ended  December 31,** |   |
|---------------------------------------------------------------|--------|-------------------------------|---------|-------------------------------|--------|-------------------------------|--------|
|                                                          |   | **2002**                      |    | **2001**                      |   | **2000**                      |   |
| Net income before extraordinary item                          |   | $                             | 122,380 |                          | $      | 105,162                       |   | $ | 122,323 |   |
| Add:                                                          |   |                          |    |                          |   |                          |   |
| Depreciation  and amortization                                |   |                          |    |                          |   |                          |   |
| Continuing  operations real estate assets (1)                 |   | 67,627                        |    | 55,135                        |   | 54,648                        |   |
| Discontinued  operations real estate assets                   |   | 4,000                         |    | 13,828                        |   | 14,774                        |   |
| Impairment  of real estate                                    |   |                          |    |                          |   |                          |   |
| Impairment  of real estate                                    |   | 88,229                        |    | 13,850                        |   | 3,620                         |   |
| Impairment  of real estate held for sale                      |   | 19,332                        |    | —                        |   | —                        |   |
| Deduct:                                                       |   |                          |    |                          |   |                          |   |
| Preferred  A dividends                                        |   | (1,587                        | )       | (3,203                        | )      | (3,200                        | )      |
| Preferred  B dividends                                        |   | (13,584                       | )       | (13,584                       | )      | (13,584                       | )      |
| Preferred  D dividends                                        |   | (5,852                        | )       | (5,852                        | )      | (5,851                        | )      |
| (Gains)/loss  on sale of real estate (2)                      |   | (202                          | )       | 88                            |   | (9,200                        | )      |
| Gain  on sale of discontinued operations                      |   | (98,876                       | )       | (1,500                        | )      | —                        |   |
| **Funds from operations – basic**                        |   | 181,467                       |    | 163,924                       |   | 163,530                       |   |
|                                                          |   |                          |    |                          |   |                          |   |
| Add:                                                          |   |                          |    |                          |   |                          |   |
| Preferred  A dividends                                        |   | 1,587                         |    | 3,203                         |   | 3,200                         |   |
| Minority  interest in income of consolidated partnership      |   | 642                           |    | 848                           |   | 952                           |   |
| **Funds from operations – diluted**                      |   | $                             | 183,696 |                          | $      | 167,975                       |   | $ | 167,682 |   |
|                                                          |   |                          |    |                          |   |                          |   |
| Net  cash provided by operating activities                    |   | $                             | 229,685 |                          | $      | 186,734                       |   | $ | 179,332 |   |
| Net  cash (used in)/provided by investing activities          |   | (426,952                      | )       | 314,135                       |   | (9,772                        | )      |
| Net  cash provided by / (used in) financing activities        |   | 198,632                       |    | (494,876                      | )      | (179,224                      | )      |
|                                                          |   |                          |    |                          |   |                          |   |
| Weighted  average of common shares outstanding – diluted |   | 97,489                        |    | 90,673                        |   | 90,825                        |   |

 

Note – Preferred A shares have a dilutiveeffect for FFO calculations.  On July15, 2002, we redeemed all Preferred A shares outstanding, resulting in theissuance of approximately 1.9 million shares of common stock.

 

----

(1)  Includes pro rata share ofjoint venture projects.

(2)  Excludes gain/loss on saleof land.

 

**Liquidity and Capital Resources**

 

As of December31, 2002, we had approximately $10.6 million in available cash, cashequivalents and marketable securities. As a REIT, we are required to distribute at least 90% of our taxableincome to our stockholders on an annual basis. Therefore, as a general matter, it is unlikely that we will have anysubstantial cash balances that could be used to meet our liquidity needs.  Instead, our liquidity needs must be metfrom cash generated from operations and external sources of capital.

 

35

----

 

*Short-Term Liquidity Needs*

 

Our short-termliquidity requirements consist primarily of funds necessary to pay foroperating and other expenses directly associated with our portfolio ofproperties (including regular maintenance items), interest expense andscheduled principal payments on our outstanding debt, capital expendituresincurred to facilitate the leasing of space (*e.g.*, tenant improvementsand leasing commissions), and quarterly dividends and distributions that we payto our common and preferred stockholders and holders of partnership units in apartnership that we control. Historically, we have satisfied these requirements principally throughcash generated from operations.  Webelieve that cash generated from operations and borrowings under our Fleet RevolvingFacility will be sufficient to meet our short-term liquidity requirements;however, there are certain factors that may have a material adverse effect onour cash flow.

 

We derivesubstantially all of our revenue from tenants under existing leases at ourproperties. Therefore, our operating cash flow is dependent on the rents thatwe are able to charge to our tenants, and the ability of these tenants to maketheir rental payments.  We believe thatthe nature of the properties in which we typically invest – primarily communityand neighborhood shopping centers – provides a more stable revenue flow inuncertain economic times, in that consumers still need to purchase basic livingessentials such as food and soft goods, even in difficult economic times.  However, general economic downturns, oreconomic downturns in one or more markets in which we own properties, still mayadversely impact the ability of our tenants to make lease payments and ourability to re-lease space on favorable terms as leases expire.  In either of these instances, our cash flowcould be adversely affected.

 

The currenteconomic downturn in the United States has had an adverse effect on ourperformance thus far.  A continuation ofthe current downturn could continue to negatively impact our operating resultsin 2003, depending on the magnitude and length of the downturn.

 

On January 22,2002, Kmart Corporation, our second largest tenant, filed for bankruptcyprotection under Chapter 11 of the federal bankruptcy laws.  Since the bankruptcy filing:

 

•                  leases at sevenlocations where Kmart is our lessee were rejected,

 

•                  Kmart indicatedthat it intends to close six additional locations at our properties on or aboutMarch 31, 2003, and

 

•                  we entered intoagreements with Kmart to reduce rent at four of our store locations effectiveJuly 1, 2002 and at six of our other store locations effective April 1, 2003;however, two of the store locations where rent reductions were effective July1, 2002 are included in the six store locations scheduled to close on or aboutMarch 31, 2003, resulting in eight store locations where we have agreed to rentreductions.

 

As of December31, 2002, Kmart was our lessee at 36 locations (excluding the seven previouslyrejected locations) that contain a total of 3.3 million square feet of grossleasable area, or approximately 6.5% of our total gross leasable area.  As of December 31, 2002, Kmart’s annualizedbase rent for these 36 locations was $13.7 million, or approximately $4.09per square foot, not taking into account the rental reductions agreed to at thesix locations effective April 1, 2003, which are not material.  In January 2003, Kmart formally rejected onelease where designation rights had previously been assigned.  Under federal bankruptcy laws, Kmart can rejectthe six leases at the locations scheduled to close on or about March 31, 2003,as well as the remaining 29 leases that we have with Kmart.  It could also seek to receive rentreductions or deferrals or other lease modifications.  We have no information at this time as to Kmart’s plans for the29 remaining leases.

 

The delay orfailure of Kmart to make payments under its leases, or the rejection by Kmartof a substantial number of leases with us under federal bankruptcy laws, wouldadversely impact our performance, which impact could be material.  In the event that leases are terminated, wewould seek to re-lease those spaces to new tenants.  In some cases, we believe we could re-lease the space currentlyoccupied by Kmart on terms that would be at least as favorable as the currentlease with Kmart.  In other cases,however, we may not be able to achieve the rental rates

 

36

----

 

that Kmart is currentlypaying.  It may also take a significantamount of time to re-lease any space vacated by Kmart during which period wewould not be collecting any rent for that space.  In addition, Kmart’s termination of leases or closure of storescould result in lease terminations or reductions in rent by other tenants inthe same shopping centers under the terms of some leases, the impact of whichcould be material to us.

 

We are notcurrently aware of any pending tenant bankruptcies that are likely tomaterially affect our rental revenues.

 

In December2002, we completed the EIG Acquisition, which increased the net rentable areaof our properties by more than 17%.  Asa result of this acquisition, we will incur substantial, additional expensesthat are attributable to the operation of these properties.  We also assumed or incurred approximately$412 million of additional debt to finance the transaction.  Subsequently, in connection with the sale offour of our factory outlet centers, we repaid approximately $193 million ofthis debt.  While we believe that thecash generated by these newly-acquired properties will more than offset theoperating and interest expenses associated with these properties, it ispossible that these properties may not perform as well as expected and as aresult, our cash needs may increase.  Inaddition, there may be other costs incurred as a result of the acquisition ofthese properties, including increased general and administrative costs while weassimilate such a large number of properties into our operating system.

 

We spentapproximately $11 million in 2002 to complete our $25 million deferredmaintenance program that began in 2001. We believe that completing this maintenance enhanced the competitivenessof our properties.  We also completed 23redevelopment projects in 2002, the aggregate cost of which (including costsincurred in prior years on these projects) was approximately $38 million. Our current pipeline is comprised of an additional 17 redevelopmentprojects, including 16 community and neighborhood shopping centers and one enclosedregional mall project, the aggregate cost of which (including costsincurred in prior years on these projects) is expected to be approximately$82 million.

 

We alsoregularly incur significant expenditures in connection with the re-leasing ofour retail space, principally in the form of tenant improvements and leasingcommissions.  The amounts of theseexpenditures can vary significantly, depending on negotiations with tenants andthe willingness of tenants to pay higher base rents over the life of theleases.  We expect to pay for thesecapital expenditures out of excess cash from operations or, to the extentnecessary, draws on our revolving credit facilities.  We believe that a significant portion of these expenditures isrecouped in the form of continuing lease payments.

 

We haveestablished a stock repurchase program under which we may repurchase up to $75million of our outstanding common stock through periodic open markettransactions or through privately negotiated transactions.  As of December 31, 2002, we had repurchasedapproximately 2,150,000 shares under this program at an average purchase priceof $15.30 per share.  We repurchasedapproximately 50,000 shares in 2002 at an average purchase price of $16.00 pershare.  In light of the current tradingprice of our common stock, we do not anticipate effecting additional stockrepurchases in the near future, although we could reevaluate this determinationat any time based on market conditions.

 

We have alsoestablished a repurchase program under which we may repurchase up to $125million of our outstanding preferred stock and public debt through periodicopen market transactions or through privately negotiated transactions.  As of December 31, 2002, no purchases hadbeen made under this program.

 

On July 15, 2002,we redeemed all outstanding shares of our Series A Cumulative ConvertiblePreferred Stock.  Each share of Series Astock was redeemed for 1.24384 shares of common stock, and resulted in theissuance of approximately 1.9 million shares of common stock at an equivalentprice of $20.10 per share.  Theredemption occurred at a discount to the carrying value of the preferred stockaggregating approximately $7.0 million based on the shares we redeemed at theclosing price of the common stock at redemption.  This discount has been reflected as an adjustment to earningsattributable to common shareholders for the year ended December 31, 2002.

 

The currentquarterly dividend on our common stock is $0.4125 per share.  We also pay regular quarterly dividends onour preferred stock.  The maintenance ofthese dividends is subject to various factors, including the

 

37

----

 

discretion of our Board ofDirectors, our ability to pay dividends under Maryland law, the availability ofcash to make the necessary dividend payments and the effect of REITdistribution requirements, which require at least 90% of our taxable income tobe distributed to stockholders.  We alsomake regular quarterly distributions on units in a partnership that we control.

 

In addition,under our existing credit facilities, we are restricted from paying commonstock dividends that would exceed 95% of our funds from operations during anyfour-quarter period.

 

*Long-Term Liquidity Needs*

 

Our long-termliquidity requirements consist primarily of funds necessary to pay for theprincipal amount of our long-term debt as it matures, significant non-recurringcapital expenditures that need to be made periodically at our properties,redevelopment projects that we undertake at our properties and the costsassociated with acquisitions of properties that we pursue.  Historically, we have satisfied theserequirements principally through the most advantageous source of capital at thetime, which has included the incurrence of new debt through borrowings (throughpublic offerings of unsecured debt and private incurrence of secured andunsecured debt), sales of common and preferred stock, capital raised throughthe disposition of assets, repayment by third parties of notes receivable andjoint venture capital transactions.  Webelieve that these sources of capital will continue to be available in thefuture to fund our long-term capital needs; however, there are certain factorsthat may have a material adverse effect on our access to these capital sources.

 

Our ability toincur additional debt is dependent upon a number of factors, including ourdegree of leverage, the value of our unencumbered assets, our credit rating andborrowing restrictions imposed by existing lenders.  Currently, we have investment grade credit ratings forprospective unsecured debt offerings from two major rating agencies – Standard& Poor’s (BBB) and Moody’s Investor Service (Baa2).  A downgrade in outlook or rating by a ratingagency can occur at any time if the agency perceives an adverse change in ourfinancial condition, results of operations or ability to service debt.  If such a downgrade occurs, it wouldincrease the interest rate currently payable under our existing creditfacilities, it likely would increase the costs associated with obtaining futurefinancing, and it potentially could adversely affect our ability to obtainfuture financing.

 

Based on aninternal evaluation, the estimated value of our properties is well above theoutstanding amount of mortgage debt encumbering the properties.  Therefore, at this time, we believe thatadditional financing could be obtained, either in the form of mortgage debt oradditional unsecured borrowings, and without violating the financial covenantscontained in our unsecured debt agreements. In 2002, we entered into the Fleet Revolving Facility, issued $250million of senior unsecured notes in a public offering and increased the FleetTerm Loan from $125 million to $155 million.

 

Our ability toraise funds through sales of common stock and preferred stock is dependent on,among other things, general market conditions for REITs, market perceptionsabout our company and the current trading price of our stock.  In January 2002, we sold 6.9 million sharesof common stock in a public offering that raised net proceeds of approximately$121 million.  We will continue toanalyze which source of capital is most advantageous to us at any particularpoint in time, but the equity markets may not be consistently available onterms that are attractive.

 

We haveselectively effected asset sales to generate cash proceeds over the last twoyears.  In particular, in December 2002we sold four of our factory outlet centers and generated gross proceeds ofapproximately $193 million.  InSeptember 2001 we sold our portfolio of garden apartment properties andgenerated gross proceeds of approximately $380 million.  In 2002 and 2001, we also sold other assetsand generated proceeds from certain of our joint venture projects and notes receivablethat raised an additional $172 and $89 million in gross proceeds,respectively.  Our ability to generatecash from asset sales is limited by market conditions and certain rulesapplicable to REITs.  Our ability tosell properties in the future to raise cash will necessarily be limited ifmarket conditions make such sales unattractive.

 

38

----

 

The followingtable summarizes all of our long-term contractual cash obligations, excludinginterest, to pay third parties as of December 31, 2002 (in thousands):

 
| **Contractual  Cash  Obligations** |   | **Total** |      | **Less than  1 year** |   | **1– 3  years** |   | **3 – 5  years** |    | **More than  5 years** |   |
|------------------------------------|--------|-----------|-----------|-----------------------|--------|----------------------|--------|-----------------------|---------|------------------------|--------|
|                               |   |      |      |                  |   |                 |   |                  |    |                   |   |
| Long-Term Debt (1)                 |   | $         | 1,693,146 |                  | $      | 364,555              |   | $                     | 348,767 |                   | $      | 335,221 |   | $ | 644,603 |   |
| Capital Lease Obligations          |   | 28,866    |      | 278                   |   | 604                  |   | 729                   |    | 27,255                 |   |
| Operating Leases                   |   | 18,599    |      | 1,500                 |   | 2,680                |   | 1,376                 |    | 13,043                 |   |
|                               |   |      |      |                  |   |                 |   |                  |    |                   |   |
| Total                              |   | $         | 1,740,611 |                  | $      | 366,333              |   | $                     | 352,051 |                   | $      | 337,326 |   | $ | 684,901 |   |

 

----

(1)          Long-term debt includes scheduled amortization and scheduled maturitiesfor mortgage loans, notes payable (including notes payable, other) and creditfacilities.

 

As describedelsewhere, in November 2002, we increased the borrowing base of our Fleet TermLoan by $30 million and extended the maturity date until December 31,2003.  The additional borrowings underthis facility were used to pay down a portion of the balance outstanding underthe Fleet Revolving Facility.  InJanuary 2003, we repaid our notes payable, other with deposits held in escrow.  On March 3, 2003, we repaid $110.5 millionof mortgage indebtedness that was to mature in July 2003 through borrowingsunder the Fleet Revolving Facility.  Weintend to repay $49 million issued under our medium term note program thatmatures in November 2003 and the balance outstanding under the Fleet Term Loanthat matures in December 2003 either through draws under the Fleet RevolvingFacility or from the proceeds generated through the issuance of public orprivate secured or unsecured debt or a combination thereof.  We anticipate repaying the $7 million ofother mortgage loans due in 2003 and the balance of the 2003 long-term debtobligations, which consist primarily of scheduled amortization, through drawsunder the Fleet Revolving Facility.

 

The followingtable summarizes certain terms of our senior unsecured credit facilities as ofDecember 31, 2002:

 
| **Loan**                 |   | **Amount Available  to be Drawn  (in thousands)** |    | **Amount Drawn as of  December 31, 2002  (in thousands)** |   | **Current Interest  Rate (1)** |   | **Maturity Date** |   |
|--------------------------|--------|---------------------------------------------------|---------|-----------------------------------------------------------|--------|--------------------------------|--------|-------------------|--------|
|                     |   |                                              |    |                                                      |   |                           |   |              |   |
| Fleet Term Loan          |   | $                                                 | 155,000 |                                                      | $      | 155,000                        |   | LIBOR plus 115 bp |   | December 2003 |   |
| Fleet Revolving Facility |   | 350,000                                           |    | 75,000                                                    |   | LIBOR plus 105 bp              |   | April 2005        |   |
| Total                    |   | $                                                 | 505,000 |                                                      | $      | 230,000                        |   |              |   |   |   |

 

----

(1)    We incur interest using a 30-day LIBOR rate,which was 1.38% at December 31, 2002.

 

The FleetRevolving Facility and the Fleet Term Loan require that we maintain certainfinancial coverage ratios.  Thesecoverage ratios currently include:

 

•                  net operatingincome of unencumbered assets to interest on unsecured debt ratio of at least2:1

 

•                  EBITDA to fixedcharges ratio of at least 1.75:1

 

•                  minimum tangiblenet worth of approximately $1.3 billion

 

•                  total debt tototal adjusted assets of no more than 55%

 

•                  total secureddebt to total adjusted assets of no more than 40%

 

•                  unsecured debtto unencumbered assets value ratio of no more than 55%

 

•                  book value ofancillary assets to total adjusted assets of no more than 25%

 

39

----

 

•                  book value ofnew construction assets to total adjusted assets of no more than 15%

 

•                  FFO payout rationo greater than 95%

 

Under theterms of each of the Fleet Term Loan and the Fleet Revolving Facility, therespective covenants will be modified to be consistent with any more restrictivecovenant contained in any other existing or new senior unsecured creditfacility that we enter into.

 

We have alsoissued approximately $784 million of indebtedness under three publicindentures.  These indentures alsocontain covenants that require us to maintain certain financial coverageratios.  These covenants are generallyless onerous than the covenants contained in our senior unsecured creditfacilities, as described above.

 

As of December31, 2002, we were in compliance with all of the financial covenants under ourexisting credit facilities and public indentures, and we believe that we willcontinue to remain in compliance with these covenants.  However, if our properties do not perform asexpected, or if unexpected events occur that require us to borrow additionalfunds, compliance with these covenants may become difficult and may restrictour ability to pursue certain business initiatives.  In addition, these financial covenants may restrict our ability topursue particular acquisition transactions (for example, acquiring a portfolioof properties that is highly leveraged) and could significantly impact ourability to pursue growth initiatives.

 

In addition toour existing credit facilities and public indebtedness, we had approximately$671 million of mortgage debt outstanding as of December 31, 2002, having aweighted average interest rate of 5.7% per annum, and $784 million of notespayable with a weighted average interest rate of 6.9% per annum.

 

*Joint Ventures*

 

In a fewcases, we have made commitments to provide funds to joint ventures undercertain circumstances.  The liabilitiesassociated with these joint ventures do not show up as liabilities on ourfinancial statements.

 

The followingis a brief summary of the joint venture obligations that we have as of December31, 2002:

 

•      *Benbrooke Ventures. *We have an investment in a joint venture which owns threecommunity shopping centers located in Dover, Delaware; Fruitland, Maryland; andSpotsylvania, Virginia.  Under the termsof this joint venture, we have a 50% interest in the venture; however, we haveagreed to contribute 80% of any capital required by the joint venture.  We do not, however, expect that anysignificant capital contributions will be required.  As of December 31, 2002, the book value of our investment inBenbrooke Ventures was approximately $8.9 million.

 

•      *CA New Plan Venture Fund*.  In connection with the CenterAmericaAcquisition, we assumed obligations under a joint venture agreement with athird-party institutional investor.  Thejoint venture had loans outstanding of approximately $97.7 million as ofDecember 31, 2002.  Under the terms ofthis joint venture, we have a 10% interest in the venture, and are responsiblefor contributing our pro rata share of any capital that might be required bythe joint venture, up to a maximum amount of $8.3 million, of whichapproximately $5.7 million had been contributed by us as of December 31,2002.  We anticipate contributing theremaining $2.6 million during 2003.  Asof December 31, 2002, the book value of our investment in CA New Plan VentureFund was approximately $6.4 million.

 

•      *Clearwater Mall, LLC*.  In October 2002, we contributed ourClearwater Mall property to this joint venture, which is currently redevelopingthe property.  The joint venture hadloans outstanding of approximately $11.4 million as of December 31, 2002.  Under the terms of this joint venture wehave a 50% interest in the venture; however, we have agreed to contribute 75%of any capital that might be required by the joint venture.  We do not, however, expect that anysignificant capital contributions will

 

40

----

 

be required. As of December 31, 2002, the book value of our investment in theClearwater Mall, LLC was approximately $4.0 million.

 

•      *Preston Ridge Joint Venture*.  We have investments in various jointventures that own either a community shopping center (The Centre at PrestonRidge) or undeveloped land in Frisco, Texas. As of December 31, 2002, the aggregate book value of our investment inthese joint ventures was approximately $10.7 million.

 

•                  *Phase1. *Under the terms of thisjoint venture, we have a 25% interest in the venture that owns the communityshopping center.  Our ownership interestwas reduced to 25% from 50% on November 25, 2002 when a U.S. partnershipcomprised substantially of foreign investors purchased a 70% interest in thejoint venture.  We have agreed tocontribute our pro rata share of any capital that might be required by thejoint venture; however, we do not expect that any significant capitalcontributions will be required.  Thejoint venture had loans outstanding of approximately $70.0 million as ofDecember 31, 2002.

 

•                  *Phase 2.*  We have a 50% interest in a joint venturethat owns approximately 38.6 acres of undeveloped land in Frisco, Texas.  We have agreed to contribute our pro ratashare of any capital that might be required by the joint venture; however, wedo not expect that any significant capital contributions will be required.  As of December 31, 2002, the joint venturehad a mortgage loan outstanding of approximately $3.0 million, payable to us.

 

•                  *Phase 3.*  We have a 50% interest in a joint venturethat owns approximately 5.4 acres of undeveloped land in Frisco, Texas.  We have agreed to contribute our pro ratashare of any capital that might be required by the joint venture; however, wedo not expect that any significant capital contributions will be required.  The joint venture had loans outstanding of$0.9 million as of December 31, 2002.

 

•      *Vail Ranch II Joint Venture*.  We have a 50% interest in a joint venturethat owns a community shopping center in Temecula, California that is in thefinal stages of development.  The jointventure had third-party loans outstanding of approximately $8.9 million as ofDecember 31, 2002.  We currentlyguarantee interest payments under the loan (which rate of interest is the primerate of the lender), as well as the payment of taxes, insurance and general maintenanceand upkeep on the property.  We haveagreed to contribute our pro rata share of any capital that might be requiredby the joint venture; however, we do not expect that any significant capitalcontributions will be required.  As ofDecember 31, 2002, the book value of our investment in the Vail Ranch II jointventure was approximately $1.3 million.

 

*Other Funding Obligations*

 

In addition tothe joint venture obligations described above, we also had the followingcontingent contractual obligations as of December 31, 2002, none of which webelieve will materially adversely affect us:

 

•     *Letter of Credit Extension*.  In connection with the sale of our gardenapartment portfolio, we arranged for the provision of a letter of credit to thebuyer in the amount of approximately $30 million, which can remain outstandingthrough September 2004 (subject to extensions for up to one year).  The letter of credit was used by the buyeras collateral for a loan obtained to finance the purchase of the gardenapartment portfolio.  If the letter ofcredit is drawn (for example, following a default by the buyer under the loan),we will be obligated to reimburse the providing bank for the amount of thedraw.  The balance outstanding and thusthe maximum amount of exposure under this letter of credit was approximately$23.8 million as of December 31, 2002; however, as of December 31, 2002,approximately $4.5 million of this balance was secured by funds held inescrow.  These funds reduced ourexposure under the letter of credit to approximately $19.3 million.

 

41

----

 

•      *Non-Recourse Debt Guarantees*.  Under certain of our non-recourse loans andthose of our joint ventures, we could, under certain circumstances, beresponsible for portions of the mortgage indebtedness in connection withcertain customary non-recourse carve out provisions such as environmentalconditions, misuse of funds and material misrepresentations.  As of December 31, 2002, we had mortgageloans outstanding of approximately $671.0 million and our joint ventures hadmortgage loans outstanding of approximately $120.6 million.

 

•      *Leasing Commitments. *We have entered into leases, as lessee, in connection withground leases for shopping centers which we operate, an office building whichwe sublet, and our administrative office space.  These leases are accounted for as operating leases.  The minimum annual rental commitments duringthe next five fiscal years and thereafter are approximately as follows (inthousands):

 
| **Year**   |   |   |   |   |
|------------|--------|--------|--------|--------|
| 2003       |   | $      | 1,500  |   |
| 2004       |   | 1,356  |   |
| 2005       |   | 1,324  |   |
| 2006       |   | 833    |   |
| 2007       |   | 543    |   |
| Thereafter |   | 13,043 |   |
|       |   | $      | 18,599 |   |

 

For adiscussion of other factors which may adversely affect our liquidity andcapital resources, please see the section titled “Risk Factors” in Item I ofthis Annual Report on Form 10-K.

 

**Inflation**

 

The majorityof our leases contain provisions designed to mitigate the adverse impact ofinflation.  These provisions enable usto receive percentage rents, which generally increase as prices rise but may beadversely impacted by tenant sales decreases, and/or escalation clauses whichare typically related to increases in the consumer price index or similarinflation indices.  In addition, webelieve that many of our existing lease rates are below current market levelsfor comparable space and that upon renewal or re-rental these rates may beincreased to match, or get closer to, current market rates.  This belief is based upon an analysis ofrelevant market conditions, including a comparison of comparable market rentalrates, and upon the fact that many of our leases have been in place for anumber of years and may not contain escalation clauses sufficient to match theincrease in market rental rates over such time.  Most of our leases require the tenant to pay its share ofoperating expenses, including common area maintenance, real estate taxes andinsurance, thereby reducing our exposure to increases in costs and operatingexpenses resulting from inflation.  Inaddition, we periodically evaluate our exposure to interest rate fluctuations,and may enter into interest rate protection agreements which mitigate, but donot eliminate, the effect of changes in interest rates on floating rate loans.

 

**Item 7A.    *Quantitativeand Qualitative******Disclosures about Market Risk***

 

As of December31, 2002, we had approximately $121.5 million of outstanding floating ratemortgages.  We also had approximately$230.0 million outstanding under floating rate credit facilities.  We do not believe that the interest raterisk represented by our floating rate debt is material as of December 31, 2002,in relation to our $1.7 billion of outstanding total debt, our $3.5 billion oftotal assets and the $3.8 billion total market capitalization as of thatdate.  In addition, as discussed below,we have fixed $50.0 million of floating rate borrowings through the use of twohedging agreements.

 

We haveentered into two hedging agreements: a cap agreement which reduces our interestrate exposure; and a reverse arrears swap agreement under which we will receivethe difference between the fixed rate

 

42

----

 

of the swap, 4.357%, and thefloating rate option, which is the six-month LIBOR rate, in arrears.  Hedging agreements enable us to convertfloating rate liabilities into fixed rate liabilities.  However, hedging agreements expose us to therisk that the counterparties to these agreements may not perform, which couldincrease our exposure to rising interest rates.  Generally, the counterparties to hedging agreements that we enterinto are major financial institutions. We may borrow additional money with floating interest rates in thefuture.  Increases in interest rates, orthe loss of the benefit of existing or future hedging agreements, wouldincrease our expense, which would adversely affect cash flow and our ability toservice our debt.  Future increases ininterest rates will increase our interest expense as compared to the fixed ratedebt underlying our hedging agreements and we could be required to makepayments to unwind such agreements.

 

If marketrates of interest on our variable rate debt increase by 1%, the increase inannual interest expense on our variable rate debt would decrease futureearnings and cash flows by approximately $3.5 million.  If market rates of interest on our variablerate debt decrease by 1%, the decrease in interest expense on our variable ratedebt would increase future earnings and cash flows by approximately $3.5million.  This assumes that the amountoutstanding under our variable rate debt remains at approximately $351.5million, the balance as of December 31, 2002. If market rates of interest increase by 1%, the fair value of our totaloutstanding debt would decrease by approximately $17.4 million.  If market rates of interest decreased by 1%,the fair value of our total outstanding debt would increase by approximately$17.4 million. This assumes that our total outstanding debt remains at $1.7billion, the balance as of December 31, 2002.

 

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

 

Financialstatements required by this item appear with an Index to Financial Statementsand Schedules, starting on page F-1 of this report.

 

## ***Item 9.***                                   Changes in and Disagreements with Accountants onAccounting and Financial Disclosure

 

Notapplicable.

 

# **PART III**

 

## ***Item 10.***                            Directors and ExecutiveOfficersof the Registrant

 

Theinformation required by this item is hereby incorporated by reference to thematerial appearing in the Proxy Statement for the Annual Stockholders Meetingto be held in 2003 (the “Proxy Statement”) under the captions “Proposal 1–Election of Directors,” “Executive Compensation and Other Information” and“Other Matters–Section 16(a) Beneficial Ownership Reporting Compliance.”

 

## ***Item 11.***                            Executive Compensation

 

Theinformation required by this item is hereby incorporated by reference to thematerial appearing in the Proxy Statement under the caption “ExecutiveCompensation and Other Information.”

 

## ***Item 12.***                            Security Ownership of Certain Beneficial Owners and Management

 

Theinformation required by this item is hereby incorporated by reference to thematerial appearing in the Proxy Statement under the captions “Voting Securitiesof Certain Beneficial Owners and Management” and “Equity Compensation PlanInformation.”

 

43

----

 

## ***Item 13.***                            Certain Relationshipsand RelatedTransactions

 

Theinformation required by this item is hereby incorporated by reference to thematerial appearing in the Proxy Statement under the caption “CertainRelationships and Related Transactions.”

 

**Item 14.         *Controls andProcedures***

 

Within the90-day period prior to the filing of this annual report, an evaluation wasperformed under the supervision and with the participation of our management,including our Chief Executive Officer and Chief Financial Officer, of theeffectiveness of the design and operation of our disclosure controls andprocedures as defined in Rule 13a – 14 of the rules promulgated under theSecurities and Exchange Act of 1934, as amended.  Based on that evaluation, the Chief Executive Officer and ChiefFinancial Officer concluded that the design and operation of these disclosurecontrols and procedures were effective. There have been no significant changes in our internal controls or inother factors that could significantly affect these controls subsequent to thedate of their evaluation.

 

44

----

 

# **PART IV**

 

## ***Item 15.***                            Exhibits, Financial Statement Schedules and Reportson Form 8-K

 
| (a)  Documents filed as part of this report:                                                                                                        |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                     |   |   |
| 1.*Financial Statements.*                                                                                                                                |
|                                                                                                                                                     |   |   |
| The response to this portion  of Item 15 is submitted as a separate section of this report.                                                              |
|                                                                                                                                                     |   |   |
| 2.*Financial Statement Schedules.*                                                                                                                       |
|                                                                                                                                                     |   |   |
| The response to this portion  of Item 15 is submitted as a separate section of this report.                                                              |
|                                                                                                                                                     |   |   |
| 3.*Exhibits.*                                                                                                                                            |
|                                                                                                                                                     |   |   |
| The list of exhibits filed  with this report is set forth in response to Item 15(c).  The required exhibit index has been filed  with the exhibits. |
|                                                                                                                                                     |   |   |
| (b)  *Reports on Form 8-K filed during the three months ended December 31,  2002*.                                                                  |
|                                                                                                                                                     |   |   |
| Form 8-K filed on December 27,  2002, regarding the acquisition of 57 community and neighborhood shopping  centers from Equity Investment Group.         |
|                                                                                                                                                     |   |   |
| (c)  *Exhibits*.  The  following documents are filed as exhibits to this report:                                                               |
|                                                                                                                                                     |   |   |
| *2.1                                                                                                                                                     |   | Agreement for Purchase of Real Estate and Related Property, dated as  of May 10, 2001, by and between the Company and Coolidge-Koenmen LLC,  filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on  October 5, 2001. |
|                                                                                                                                                     |   |   |
| *2.2                                                                                                                                                     |   | Amendment to Agreement for Purchase of Real Estate and Related  Property, dated as of July 30, 2001, by and between the Company and  Coolidge-Koenmen LLC (Club Sales Contract Amendment), filed as Exhibit 2.2 to  the Company’s Current Report on Form 8-K filed on October 5, 2001. |
|                                                                                                                                                     |   |   |
| *2.3                                                                                                                                                     |   | Amendment to Agreement for Purchase of Real Estate and Related  Property, dated as of July 30, 2001, by and between the Company and  Coolidge-Koenmen LLC, filed as Exhibit 2.3 to the Company’s Current Report on  Form 8-K filed on October 5, 2001. |
|                                                                                                                                                     |   |   |
| *2.4                                                                                                                                                     |   | Closing Date Amendment to Agreement for Purchase of Real Estate and  Related Property, dated as of September 21, 2001, by and between the Company  and Coolidge-Koenmen LLC, filed as Exhibit 2.4 to the Company’s Current  Report on Form 8-K filed on October 5, 2001. |
|                                                                                                                                                     |   |   |
| *2.5                                                                                                                                                     |   | Purchase Agreement, dated as of January 13, 2002, by and among the  Company, CenterAmerica Property Trust, L.P. and certain affiliates of  CenterAmerica Property Trust, L.P., filed as Exhibit 2.1 to the  Company’s Current Report on Form 8-K filed on January 14, 2002. |
|                                                                                                                                                     |   |   |
| *2.6                                                                                                                                                     |   | Purchase Agreement, dated as of October 17, 2002, by and between the  Company and EIG Realty, Inc., filed as Exhibit 2.1 to the Company’s Current  Report on Form 8-K filed on December 27, 2002. |
|                                                                                                                                                     |   |   |
| *2.7                                                                                                                                                     |   | First Amendment to Purchase Agreement, dated as of November 6, 2002,  by and between the Company and EIG Realty, Inc., filed as Exhibit 2.2 to the  Company’s Current Report on Form 8-K filed on December 27, 2002. |

 

45

----

 
| *2.8   |   | Closing Day Amendment to Purchase Agreement, dated as of December 12,  2002, by and between the Company and EIG Realty, Inc., filed as Exhibit 2.3  to the Company’s Current Report on Form 8-K filed on December 27, 2002.                                                                                               |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.9   |   | Purchase Agreement, dated as of October 17, 2002, by and among  the Company, RIG Hunt River Commons, LLC, RIG Paradise Pavilion, LLC and RIG  Hilltop Plaza, LLC, filed as Exhibit 2.4 to the Company’s Current Report on  Form 8-K filed on December 27, 2002.                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.10  |   | First Amendment to Purchase Agreement, dated as of November 6,  2002, by and among the Company, RIG Hunt River Commons, LLC, RIG Paradise  Pavilion, LLC, RIG Hilltop Plaza, LLC and RIG Normandy Square, LLC, filed as  Exhibit 2.5 to the Company’s Current Report on Form 8-K filed on December 27,  2002.        |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.11  |   | Closing Day Amendment to Purchase Agreement, dated as of  December 12, 2002, by and among the Company, RIG Hunt River Commons,  LLC, RIG Paradise Pavilion, LLC, RIG Hilltop Plaza, LLC and RIG Normandy  Square, LLC, filed as Exhibit 2.6 to the Company’s Current Report on Form 8-K  filed on December 27, 2002. |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.12  |   | Purchase Agreement, dated as of October 17, 2002, by and between  the Company and EIG Operating Partnership, L.P., filed as Exhibit 2.7 to the  Company’s Current Report on Form 8-K filed on December 27, 2002.                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.13  |   | First Amendment to Purchase Agreement, dated as of November 6,  2002, by and between the Company and EIG Operating Partnership, L.P., filed  as Exhibit 2.8 to the Company’s Current Report on Form 8-K filed on December  27, 2002.                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.14  |   | Closing Day Amendment to Purchase Agreement, dated as of  December 12, 2002, by and between the Company and EIG Operating  Partnership, L.P., filed as Exhibit 2.9 to the Company’s Current Report on  Form 8-K filed on December 27, 2002.                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.15  |   | Contribution Agreement, dated as of October 17, 2002, by and  between Excel Realty Partners,L.P. and EIG Operating Partnership, L.P., filed  as Exhibit 2.10 to the Company’s Current Report on Form 8-K filed on December  27, 2002.                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.16  |   | First Amendment to Contribution Agreement, dated as of  November 6, 2002, by and between Excel Realty Partners, L.P. and EIG  Operating Partnership, L.P., filed as Exhibit 2.11 to the Company’s Current  Report on Form 8-K filed on December 27, 2002.                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.17  |   | Second Amendment to Contribution Agreement, dated as of  December 9, 2002, by and between Excel Realty Partners, L.P. and EIG  Operating Partnership, L.P., filed as Exhibit 2.12 to the Company’s Current  Report on Form 8-K filed on December 27, 2002.                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.18  |   | Closing Day Amendment to Contribution Agreement, dated as of  December 12, 2002, by and between Excel Realty Partners, L.P. and EIG  Operating Partnership, L.P., filed as Exhibit 2.13 to the Company’s Current  Report on Form 8-K filed on December 27, 2002.                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *3.1   |   | Articles of Amendment and  Restatement of the Charter of the Company, filed as Exhibit 3.01 Amendment  No. 1 to the Company’s Registration Statement on Form S-3, File No. 33-59195.                                                                                                                                      |

 

46

----

 
| *3.2   |   | Articles of Amendment of  Articles of Amendment and Restatement of the Charter of the Company, filed as  Exhibit 4.4 to the Company’s Registration Statement on Form S-3, File No.  333-65211.                                                                                              |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                             |
| *3.3   |   | Restated Bylaws of the Company,  effective as of May 16, 2001 (incorporating all amendments thereto through  May 16, 2001), filed as Exhibit 3.2 to the Company’s Quarterly Report on  Form 10-Q for the quarter ended June 30, 2001.                                             |
|   |   |                                                                                                                                                                                                                                                                                             |
| *3.4   |   | Amendment to Restated Bylaws of the Company, dated November 5,  2001, filed as Exhibit 3.4 to the Company’s Annual Report on Form 10-K for  the year ended December 31, 2002.                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                             |
| *4.1   |   | Articles Supplementary  classifying 690,000 shares of preferred stock as 8 5/8% Series B Cumulative  Redeemable Preferred Stock, filed as Exhibit 4.02 to the Company’s Current  Report on Form 8-K dated January 14, 1998.                                                       |
|   |   |                                                                                                                                                                                                                                                                                             |
| *4.2   |   | Articles Supplementary  relating to the Series C Junior Participating Preferred Stock of the Company,  which may in the future be issued under the Company’s Rights Plan, filed  as Exhibit 4.3 to the Company’s Annual Report on Form 10-K/A for the year  ended December 31, 1998.   |
|   |   |                                                                                                                                                                                                                                                                                             |
| *4.3   |   | Articles Supplementary  classifying 150,000 shares of preferred stock as 7.80% Series D Cumulative  Voting Step-Up Premium Rate Preferred Stock, filed as Exhibit 4.5 to the  Company’s Registration Statement on Form S-3, File No. 333–65211.                                   |
|   |   |                                                                                                                                                                                                                                                                                             |
| *4.4   |   | Indenture, dated as of May 8,  1995, between the Company and State Street Bank and Trust Company of  California, N.A. (as successor to the First National Bank of Boston), filed  as Exhibit 4.01 to the Company’s Registration Statement on Form S-3, File No.  33-59195.                  |
|   |   |                                                                                                                                                                                                                                                                                             |
| *4.5   |   | First Supplemental Indenture,  dated as of April 4, 1997, between the Company and State Street Bank and  Trust Company of California, N.A., filed as Exhibit 4.02 to the Company’s  Registration Statement on Form S-3, File No. 333-24615.                                                 |
|   |   |                                                                                                                                                                                                                                                                                             |
| *4.6   |   | Second Supplemental Indenture,  dated as of July 3, 1997, between the Company and State Street Bank and Trust  Company of California, N.A., filed as Exhibit 4.01 to the Company’s Current  Report on Form 8-K dated July 3, 1997.                                                          |
|   |   |                                                                                                                                                                                                                                                                                             |
| *4.7   |   | Senior Securities Indenture, dated as of  March 29, 1995, between New Plan Realty Trust and The First National Bank of  Boston, as Trustee, filed as Exhibit 4.2 to New Plan Realty Trust’s  Registration Statement on Form S-3, File No. 33-60045.                                         |
|   |   |                                                                                                                                                                                                                                                                                             |
| *4.8   |   | First Supplemental Indenture, dated as of  August 5, 1999, by and among New Plan Realty Trust, New Plan Excel Realty  Trust, Inc. and State Street Bank and Trust Company, filed as Exhibit 10.2 to  the Company’s Quarterly Report on Form 10-Q for the quarter ended September  30, 1999. |
|   |   |                                                                                                                                                                                                                                                                                             |
| *4.9   |   | Senior Securities Indenture,  dated as of February 3, 1999, among the Company, New Plan Realty Trust, as  guarantor, and State Street Bank and Trust Company, as Trustee, filed as  Exhibit 4.1 to the Company’s Current Report on Form 8-K dated February  3, 1999.                   |
|   |   |                                                                                                                                                                                                                                                                                             |
| *4.10  |   | Registration Rights Agreement, dated as of December 12, 2002, by  and between the Company and EIG Operating Partnership, L.P., filed as Exhibit  4.1 to the Company’s Current Report on Form 8-K filed on December 27, 2002.                                                           |
|   |   |                                                                                                                                                                                                                                                                                             |
| *4.11  |   | Registration Rights Agreement, dated as of December 12, 2002, by  and between the Company and EIG Operating Partnership, L.P., filed as Exhibit  4.2 to the Company’s Current Report on Form 8-K filed on December 27, 2002.                                                           |

 

47

----

 
| *10.1         |   | New Plan Realty Trust 1991  Stock Option Plan, as amended, filed as Exhibit 4.2 to the Company’s  Registration Statement on Form S-8, File No. 333-65221.                                                                                                                               |
|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.2         |   | New Plan Realty Trust March  1991 Stock Option Plan and Non-Qualified Stock Option Plan, filed as Exhibit  4.4 to the Company’s Registration Statement on Form S-8, File No. 333-65221.                                                                                                 |
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.3         |   | Amended and Restated 1993  Stock Option Plan of the Company, dated May 28, 1998, filed as  Exhibit 4.1 to the Company’s Registration Statement on Form S-8, File  No. 333–65223.                                                                                         |
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.4         |   | Amendment to the Amended and  Restated 1993 Stock Option Plan of the Company, dated September 28, 1998, filed  as Exhibit 10.4 to the Company’s Annual Report on Form10–K/A for the year ended December 31, 1998.                                                                  |
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.5         |   | Amendment to the Amended and  Restated 1993 Stock Option Plan of the Company, dated February 8, 1999, filed  as Exhibit 10.5 to the Company’s Annual Report on Form 10–K/A for the year ended December 31, 1998.                                                              |
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.6         |   | Amendment to the Amended and  Restated 1993 Stock Option Plan of the Company, dated April 21, 1999, filed  as Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the year  ended December 31, 1999.                                                                           |
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.7         |   | Amendment to the Amended and  Restated 1993 Stock Option Plan of the Company, dated February 17, 2000, filed  as Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year  ended December 31, 1999.                                                                        |
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.8         |   | Directors’ Amended and  Restated 1994 Stock Option Plan of the Company, dated May 10, 1996, filed  as Exhibit 10.8 to the Company’s Annual Report on Form 10-K/A for the year  ended December 31, 1998.                                                                            |
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.9         |   | Amendment to the Amended and  Restated 1994 Directors’ Stock Option Plan of the Company, dated  September 28, 1998, filed as Exhibit 10.9 to the Company’s  Annual Report on Form 10-K/A for the year ended December 31, 1998.                                                |
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.10        |   | Amendment to the Amended and  Restated 1994 Directors’ Stock Option Plan of the Company, dated February 17,  2000, filed as Exhibit 10.8 to the Company’s Annual Report on  Form 10-K for the year ended December 31, 1999.                                                   |
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.11        |   | Amendment to the Amended and  Restated 1994 Directors’ Stock Option Plan of the Company, effective as of  May 24, 2000, filed as Exhibit 10.6 to the Company’s Quarterly Report on Form  10-Q for the quarter ended June 30, 2000.                                                 |
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.12        |   | New Plan Realty Trust 1997  Stock Option Plan, filed as Exhibit 4.1 to the Company’s Registration  Statement on Form S-8, File No. 333-65221.                                                                                                                                      |
|          |   |                                                                                                                                                                                                                                                                                         |
| *10.13        |   | Revolving Credit Agreement, dated as of  April 26, 2002, by and among the Company, Fleet National Bank, as  administrative agent, and the other lenders party thereto, filed as Exhibit  10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended  June 30, 2002. |
|          |   |                                                                                                                                                                                                                                                                                         |
|    10.14 |   | First Amendment to Revolving Credit  Agreement, dated as of November 6, 2002, by and among the Company, Fleet  National Bank, as administrative agent, and the other lenders party thereto.                                                                                                  |
|          |   |                                                                                                                                                                                                                                                                                         |
|   10.15  |   | First Amended and Restated Term Loan Agreement, dated as of November  6, 2002, by and among the Company, the lenders party thereto and Fleet  National Bank, as administrative agent.                                                                                                        |

 

48

----

 
| *10.16        |   | Amended and Restated Agreement  of Limited Partnership of Excel Realty Partners, L.P., dated as of June 25,  1997, filed as Exhibit 10.20 to the Company’s Annual Report on Form 10-K for  the fiscal year ended December 31, 1997.                                                                                                                                                  |
|---------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.17        |   | First Amendment to Amended and Restated  Agreement of Limited Partnership of Excel Realty Partners, L.P., dated as of  August 20, 1999, by and among New Plan DRP Trust, New Plan Excel Realty  Trust, Inc. and the current and future partners in the partnership, filed as  Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter  ended September 30, 1999. |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.18        |   | Rights Agreement, dated as of  May 15, 1998, between the Company and BankBoston, N.A., filed as Exhibit 4 to  the Company’s Report on Form 8-A dated May 19, 1998.                                                                                                                                                                                                                   |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.19        |   | First Amendment to Rights Agreement, dated  as of February 8, 1999, between the Company and BankBoston, N.A., filed as  Exhibit 4.1 to the Company’s Report on Form 8-A/A (Amendment No.1) dated May 5, 1999.                                                                                                                                                                        |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.20        |   | Dividend Reinvestment and Share Purchase  Plan, included in the prospectus of the Company filed pursuant to Rule  424(b)(3), File No. 333-65211, on April 20, 2000.                                                                                                                                                                                                                       |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.21        |   | Support Agreement, dated as of  May 14, 1998, by William Newman to the Company, filed as Exhibit 10.7 to the  Company’s Registration Statement on Form S-4, File No. 333-61131, dated  August 11, 1998.                                                                                                                                                                              |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.22        |   | Employment Agreement, dated as  of September 17, 1998, by and between the Company and William Newman, filed  as Exhibit 10.39 to the Company’s Annual Report on Form 10-K/A for the year  ended December 31, 1998.                                                                                                                                                                   |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
|    10.23 |   | Demand Promissory Note, dated July 1, 1997,  made by Dean Bernstein in favor of  the Company.                                                                                                                                                                                                                                                                                             |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.24        |   | Employment Agreement, dated as  of September 25, 1998, by and between the Company and Dean Bernstein, filed  as Exhibit 10.39 to the Company’s Annual Report on Form 10-K for the year  ended December 31, 2000.                                                                                                                                                                     |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.25        |   | Extension Letter concerning  Employment Agreement, dated March 27, 2000, provided by the Company to Dean  Bernstein, filed as Exhibit 10.42 to the Company’s Annual Report on Form 10-K  for the year ended December 31, 2002.                                                                                                                                                       |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
|    10.26 |   | Demand Promissory Note, dated June 29,  1994, made by Steven F. Siegel in  favor of the Company.                                                                                                                                                                                                                                                                                          |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
|   10.27  |   | Demand Promissory Note, dated July 1, 1997,  made by Steven F. Siegel in favor of  the Company.                                                                                                                                                                                                                                                                                           |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.28        |   | Employment Agreement, dated as  of September 25, 1998, by and between the Company and Steven F. Siegel, filed  as Exhibit 10.45 to the Company’s Annual Report on Form 10-K/A for the year  ended December 31, 1998.                                                                                                                                                                 |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.29        |   | Extension Letter concerning  Employment Agreement, dated March 27, 2000, provided by the Company to Steven  F. Siegel, filed as Exhibit 10.44 to the Company’s Annual Report on Form 10-K  for the year ended December 31, 2002.                                                                                                                                                     |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.30        |   | Employment Agreement, dated as  of February 23, 2000, by and between the Company and Glenn J. Rufrano, filed  as Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated March  9, 2000.                                                                                                                                                                                |
|          |   |                                                                                                                                                                                                                                                                                                                                                                                      |
| *10.31        |   | Stock Option Agreement, dated  as of February 23, 2000, by and between the Company and Glenn J. Rufrano  (relating to 460,976 options), filed as Exhibit 10.2 to the Company’s Current  Report on Form 8-K, dated March 9, 2000.                                                                                                                                                     |

 

49

----

 
| *10.32                                       |   | Stock Option Agreement, dated  as of February 23, 2000, by and between the Company and Glenn J. Rufrano  (relating to 39,024 options), filed as Exhibit 10.3 to the Company’s Current  Report on Form 8-K, dated March 9, 2000.                                           |
|----------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.33                                       |   | Stock Option Agreement, dated  as of February 23, 2000, by and between the Company and Glenn J. Rufrano  (relating to 200,000 options), filed as Exhibit 10.4 to the Company’s Current  Report on Form 8-K, dated March 9, 2000.                                          |
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.34                                       |   | Stock Pledge Agreement, dated  February 23, 2000 between the Company and Glenn J. Rufrano, filed as Exhibit  10.8 to the Company’s Current Report on Form 8-K, dated March 9, 2000.                                                                                       |
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.35                                       |   | Recourse Promissory Note, dated  February 23, 2000, made by Glenn J. Rufrano in favor of the Company, filed as  Exhibit 10.6 to the Company’s Current Report on Form 8-K, dated March 9,  2000.                                                                           |
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.36                                       |   | Limited Recourse Promissory  Note, dated February 23, 2000, made by Glenn J. Rufrano in favor of the  Company, filed as Exhibit 10.7 to the Company’s Current Report on Form 8-K,  dated March 9, 2000.                                                                   |
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.37                                       |   | Employment Agreement, dated as  of April 14, 2000, by and between the Company and John Roche, filed as  Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q for the quarter  ended March 31, 2000.                                                               |
|                                         |   |                                                                                                                                                                                                                                                                           |
|   10.38                                 |   | Agreement, dated as of  September 27, 2002, by and between the Company and John Roche.                                                                                                                                                                                         |
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.39                                       |   | Employment Agreement, dated as  of September 14, 2000, by and between the Company and Leonard Brumberg, filed  as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the  quarter ended September 30, 2000.                                                  |
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.40                                       |   | Employment Agreement, dated as of March 1,  2002, by and among CA New Plan Management Inc., Scott MacDonald and the  Company, filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q  for the quarter ended March 31, 2002.                                 |
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.41                                       |   | Agreement, dated as of  February 23, 2000, by and between the Company and Arnold Laubich, filed as  Exhibit 10.9 to the Company’s Current Report on Form 8-K, dated March 9,  2000.                                                                                       |
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.42                                       |   | Agreement, dated as of May 5,  2000, by and between the Company and James M. Steuterman, filed as Exhibit  10.16 to the Company’s Quarterly Report on Form 10-Q for the quarter ended  March 31, 2000.                                                                    |
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.43                                       |   | Agreement, dated as of December  19, 2000, by and between the Company and James DeCicco, filed as Exhibit  10.44 to the Company’s Annual Report on Form 10-K for the year ended December  31, 2000.                                                                       |
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.44                                       |   | Loan Agreement, dated as of  November 30, 2001, by and among BPR Shopping Center, L.P., the Bank of  America, N.A., the Company and the other parties thereto, filed as Exhibit  10.49 to the Company’s Annual Report on Form 10-K for the year ended December  31, 2002. |
|                                         |   |                                                                                                                                                                                                                                                                           |
| *10.45                                       |   | Reimbursement  Agreement, dated as of August 24, 2001, between the Company and Fleet  National Bank, filed as Exhibit 10.61 to the Company’s Annual Report on Form 10-K for the year ended December  31, 2002.                                                            |
|                                         |   |                                                                                                                                                                                                                                                                           |
|        12 |   | Ratio of Earnings to Fixed  Charges and Preferred Stock Dividends.                                                                                                                                                                                                             |

 

50

----

 
|        21 |   | Subsidiaries of the Company.            |
|----------------------------------------------|--------|-----------------------------------------|
|                                         |   |                                    |
|        23 |   | Consent of  PricewaterhouseCoopers LLP. |

 

----

*Incorporated herein by reference as above indicated.

 

(d)* Financial Statement Schedules*.  The following documents are filed as a part of this report:

 

The response to this portion ofItem 15 is submitted as a separate section of this report.

 

51

----

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

 

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

 
|   |                                                                                                                                                 | Page   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| 1.     | CONSOLIDATED STATEMENTS                                                                                                                              |   |
|   |                                                                                                                                                 |   |
|   | Report of Independent Accountants                                                                                                                    | F-2    |
|   |                                                                                                                                                 |   |
|   | Consolidated Balance Sheets  December 31, 2002 and December 31, 2001                                                                                 | F-3    |
|   |                                                                                                                                                 |   |
|   |                                                                                                                                                 |   |
|   | Consolidated Statements of Income and Comprehensive  Income for the Years ended  December 31, 2002, December 31, 2001 and December 31, 2000          | F-4    |
|   |                                                                                                                                                 |   |
|   |                                                                                                                                                 |   |
|   | Consolidated Statements of Changes in Stockholders’  Equity for the Years ended  December 31, 2002, December 31, 2001 and December 31, 2000     | F-5    |
|   |                                                                                                                                                 |   |
|   |                                                                                                                                                 |   |
|   | Consolidated Statements of Cash Flows for the  Years ended  December 31, 2002, December 31, 2001 and December 31, 2000                               | F-6    |
|   |                                                                                                                                                 |   |
|   | Notes to Consolidated Financial Statements                                                                                                           | F-7    |
|   |                                                                                                                                                 |   |
| 2.     | CONSOLIDATED FINANCIAL STATEMENT SCHEDULES                                                                                                           |   |
|   |                                                                                                                                                 |   |
|   | Schedule II - Valuation and Qualifying  Accounts                                                                                                     | F-36   |
|   |                                                                                                                                                 |   |
|   | Schedule III - Real Estate and Accumulated Depreciation                                                                                              | F-37   |
|   |                                                                                                                                                 |   |
|   | Schedule IV - Mortgage Loans on Real Estate                                                                                                          | F-54   |
|   |                                                                                                                                                 |   |
|   | All other schedules are omitted because  they are not applicable or the required information is shown in the financial  statements or notes thereto. |   |

 

----

 

### **REPORT OF INDEPENDENTACCOUNTANTS**

 

To the Board of Directors andStockholders

of New Plan Excel Realty Trust,Inc.:

 

In our opinion, the consolidated financial statements listed in theaccompanying index present fairly, in all material respects, the financialposition of New Plan Excel Realty Trust, Inc. and itssubsidiaries at December 31, 2002 and 2001, and the results of their operationsand their cash flows for each of the three years in the period ended December31, 2002, in conformity with accounting principles generally accepted in theUnited States of America.  In addition, in our opinion, the financialstatement schedules listed in the accompanying index****present fairly,in all material respects, the information set forth therein when read inconjunction with the related consolidated financial statements.  These financial statements and financialstatement schedules are the responsibility of the Company’s management; ourresponsibility is to express an opinion on these financial statements andfinancial statement schedules based on our audits.  We conducted our audits of these statements in accordance withauditing standards generally accepted in the United States of America, whichrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement.  An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements,assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statementpresentation.  We believe that ouraudits provide a reasonable basis for our opinion.

 

 

##### */s/PricewaterhouseCoopers LLP*

 

##### *New York,New York*

##### *March 3, 2003*

 

F-2

----

 

**NEWPLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES**

 

### **CONSOLIDATED BALANCE SHEETS**

**December 31, 2002 and 2001**

** (In thousands)**

** **
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | **December  31, 2002** |       | **December  31, 2001** |       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|------------|------------------------|------------|
| **ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                   | ** ** |                   | ** ** |
| Real estate:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                   |       |                   |       |
| Land                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $                      | 830,376    |                   | $          | 498,859 |   |
| Buildings and improvements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 2,735,046              |       | 2,184,787              |       |
| Accumulated depreciation and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | (295,946               | )          | (269,755               | )          |
| Net real estate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 3,269,476              |       | 2,413,891              |       |
| Real estate held for sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 21,276                 |       | 20,747                 |       |
| Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 8,528                  |       | 7,163                  |       |
| Restricted cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 52,930                 |       | —                 |       |
| Marketable securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2,115                  |       | 1,887                  |       |
| Receivables:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                   |       |                   |       |
| Trade, less allowance for doubtful accounts  of $15,307 and $15,633 at December 31, 2002 and 2001, respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 46,990                 |       | 43,555                 |       |
| Other, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 43,479                 |       | 8,736                  |       |
| Mortgages and notes receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2,632                  |       | 45,360                 |       |
| Prepaid expenses and deferred charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 21,527                 |       | 15,964                 |       |
| Investments in / advances to unconsolidated  ventures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 31,234                 |       | 41,876                 |       |
| Other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 15,092                 |       | 23,687                 |       |
| Total assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                      | 3,515,279  |                   | $          | 2,622,866 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                   |       |                   |       |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                   | ** ** |                   | ** ** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                   |       |                   |       |
| Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                   |       |                   |       |
| Mortgages payable, including unamortized  premium of $20,403 and $6,063 at December 31, 2002 and 2001, respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $                      | 671,200    |                   | $          | 241,436 |   |
| Notes payable, net of unamortized discount  of $2,222 and $1,752 at December 31, 2002 and 2001, respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 783,927                |       | 613,248                |       |
| Notes payable, other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 28,349                 |       | —                 |       |
| Credit facilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 230,000                |       | 95,000                 |       |
| Capital leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 28,866                 |       | 29,170                 |       |
| Dividends payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 44,836                 |       | 41,692                 |       |
| Other liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 106,690                |       | 80,982                 |       |
| Tenant security deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 9,128                  |       | 5,833                  |       |
| Total liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 1,902,996              |       | 1,107,361              |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                   |       |                   |       |
| Minority interest in consolidated  partnership                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 39,434                 |       | 22,267                 |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                   |       |                   |       |
| Commitments and contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | —                 |       | —                 |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                   |       |                   |       |
| Stockholders’ equity:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                   |       |                   |       |
| Preferred stock, Series A: $.01 par value,  25,000 shares authorized: 4,600 shares designated as 8 1⁄2% Series A Cumulative  Convertible Preferred, 0 and 1,507 shares outstanding at December 31, 2002  and 2001, respectively; Series B: 6,300 depositary shares each representing  1/10 of one share of 8 5/8% Series B Cumulative Redeemable Preferred, 630  shares outstanding at December 31, 2002 and 2001; Series D: 1,500 depositary  shares, each representing 1/10 of one share of Series D Cumulative Voting  Step-Up Premium Rate Preferred, 150 shares outstanding at December 31, 2002  and 2001. |   | 8                      |       | 23                     |       |
| Common stock, $.01 par value, 250,000  shares authorized; 96,916 and 87,352 shares issued and outstanding as of  December 31, 2002 and 2001, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 968                    |       | 873                    |       |
| Additional paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 1,825,820              |       | 1,697,570              |       |
| Accumulated other comprehensive loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | (593                   | )          | (1,965                 | )          |
| Accumulated distributions in excess of net  income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | (253,354               | )          | (203,263               | )          |
| Total stockholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 1,572,849              |       | 1,493,238              |       |
| Total liabilities and stockholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                      | 3,515,279  |                   | $          | 2,622,866 |   |

 

The accompanying notes are an integral partof the consolidated financial statements.

 

F-3

----

 

**NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES**

 

**CONSOLIDATEDSTATEMENTS OF INCOME AND COMPREHENSIVE INCOME**

**For the Years Ended December 31, 2002, 2001 and 2000**

** (In thousands, exceptper share amounts)**

** **
|                                                                                                         |   | **December 31, 2002** |    | **December 31, 2001** |   | **December 31, 2000** |   |
|--------------------------------------------------------------------------------------------------------------|--------|-----------------------|---------|-----------------------|--------|-----------------------|--------|
| Rental revenues:                                                                                             |   |                  |    |                  |   |                  |   |
| Rental income                                                                                                |   | $                     | 310,339 |                  | $      | 238,010               |   | $ | 240,478 |   |
| Percentage rents                                                                                             |   | 6,649                 |    | 5,183                 |   | 5,384                 |   |
| Expense reimbursements                                                                                       |   | 75,411                |    | 54,606                |   | 49,249                |   |
| Total rental revenues                                                                                        |   | 392,399               |    | 297,799               |   | 295,111               |   |
|                                                                                                         |   |                  |    |                  |   |                  |   |
| Expenses:                                                                                                    |   |                  |    |                  |   |                  |   |
| Operating costs                                                                                              |   | 67,924                |    | 48,078                |   | 45,200                |   |
| Real estate and other taxes                                                                                  |   | 46,835                |    | 33,216                |   | 33,959                |   |
| Interest                                                                                                     |   | 92,953                |    | 78,534                |   | 88,071                |   |
| Depreciation and amortization                                                                                |   | 66,223                |    | 51,733                |   | 49,725                |   |
| Provision for doubtful accounts                                                                              |   | 8,979                 |    | 5,614                 |   | 4,381                 |   |
| Severance costs                                                                                              |   | —                |    | 896                   |   | 4,945                 |   |
| General and administrative                                                                                   |   | 17,878                |    | 10,306                |   | 7,469                 |   |
| Total expenses                                                                                               |   | 300,792               |    | 228,377               |   | 233,750               |   |
|                                                                                                         |   |                  |    |                  |   |                  |   |
| Income before real estate sales, impairment of real  estate,minority  interest and other income and expenses |   | 91,607                |    | 69,422                |   | 61,361                |   |
|                                                                                                         |   |                  |    |                  |   |                  |   |
| Other income and expenses:                                                                                   |   |                  |    |                  |   |                  |   |
| Interest, dividend, and other income                                                                         |   | 11,014                |    | 13,990                |   | 30,426                |   |
| Equity participation in ERT                                                                                  |   | —                |    | (4,313                | )      | (17,867               | )      |
| Equity in income of unconsolidated ventures                                                                  |   | 5,244                 |    | 985                   |   | —                |   |
| Foreign currency loss                                                                                        |   | (13                   | )       | (560                  | )      | (437                  | )      |
| Gain on sale of real estate                                                                                  |   | 371                   |    | 1,610                 |   | 9,200                 |   |
| Impairment of real estate                                                                                    |   | (88,229               | )       | (13,107               | )      | (3,620                | )      |
| Minority interest in income of consolidated  partnership                                                     |   | (642                  | )       | (848                  | )      | (952                  | )      |
|                                                                                                         |   |                  |    |                  |   |                  |   |
| Income from continuing operations                                                                            |   | 19,352                |    | 67,179                |   | 78,111                |   |
|                                                                                                         |   |                  |    |                  |   |                  |   |
| Discontinued operations:                                                                                     |   |                  |    |                  |   |                  |   |
| Results of operations of discontinuedgarden apartment communities (Note 5)                                   |   | 17,007                |    | 15,179                |   | 21,310                |   |
| Income from other discontinued operations (Note 5)                                                           |   | 86,021                |    | 22,804                |   | 22,902                |   |
| Income from discontinued operations                                                                          |   | 103,028               |    | 37,983                |   | 44,212                |   |
|                                                                                                         |   |                  |    |                  |   |                  |   |
| Net income before extraordinary item                                                                         |   | 122,380               |    | 105,162               |   | 122,323               |   |
| Extraordinary item                                                                                           |   | (318                  | )       | —                |   | 758                   |   |
| Net income                                                                                                   |   | $                     | 122,062 |                  | $      | 105,162               |   | $ | 123,081 |   |
|                                                                                                         |   |                  |    |                  |   |                  |   |
| Preferred dividends                                                                                          |   | (21,023               | )       | (22,639               | )      | (22,635               | )      |
| Discount on redemption of preferred stock                                                                    |   | 6,997                 |    | —                |   | —                |   |
| Net income available to common stock before  extraordinaryitem –  basic                                 |   | 108,354               |    | 82,523                |   | 99,688                |   |
| Minority interest in income of consolidated  partnership                                                     |   | 642                   |    | 848                   |   | 952                   |   |
| Net income available to common stock before  extraordinaryitem –  diluted                               |   | $                     | 108,996 |                  | $      | 83,371                |   | $ | 100,640 |   |
|                                                                                                         |   |                  |    |                  |   |                  |   |
| Basic earnings per common share:                                                                             |   |                  |    |                  |   |                  |   |
| Income from continuing operations                                                                            |   | $                     | 0.06    |                  | $      | 0.51                  |   | $ | 0.63 |   |
| Discontinued operations                                                                                      |   | 1.08                  |    | 0.44                  |   | 0.51                  |   |
| Extraordinary item                                                                                           |   | —                |    | —                |   | 0.01                  |   |
| Basic earnings per share                                                                                     |   | $                     | 1.14    |                  | $      | 0.95                  |   | $ | 1.15 |   |
|                                                                                                         |   |                  |    |                  |   |                  |   |
| Diluted earnings per common share:                                                                           |   |                  |    |                  |   |                  |   |
| Income from continuing operations                                                                            |   | $                     | 0.06    |                  | $      | 0.51                  |   | $ | 0.63 |   |
| Discontinued operations                                                                                      |   | 1.07                  |    | 0.43                  |   | 0.50                  |   |
| Extraordinary item                                                                                           |   | —                |    | —                |   | 0.01                  |   |
| Diluted earnings per share                                                                                   |   | $                     | 1.13    |                  | $      | 0.94                  |   | $ | 1.14 |   |
|                                                                                                         |   |                  |    |                  |   |                  |   |
| Average shares outstanding – basic                                                                      |   | 95,119                |    | 87,241                |   | 87,608                |   |
| Average shares outstanding – diluted                                                                    |   | 96,552                |    | 88,799                |   | 88,951                |   |
|                                                                                                         |   |                  |    |                  |   |                  |   |
| Other  comprehensive income:                                                                                 |   |                  |    |                  |   |                  |   |
| Net Income                                                                                                   |   | $                     | 122,062 |                  | $      | 105,162               |   | $ | 123,081 |   |
| Unrealized gain on available-for-sale securities                                                             |   | 229                   |    | 358                   |   | 341                   |   |
| Cumulative effect of change in accounting principle(SFAS 133) on other  comprehensive income                 |   | —                |    | (2,124                | )      | —                |   |
| Unrealized gains (losses) on interest hedges                                                                 |   | 1,143                 |    | (754                  | )      | —                |   |
| Comprehensive income                                                                                         |   | $                     | 123,434 |                  | $      | 102,642               |   | $ | 123,422 |   |

 

The accompanying notes are an integral part of the consolidatedfinancial statements.

 

F-4

----

 

**NEWPLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES**

 

**CONSOLIDATEDSTATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY**

**Forthe Years Ended December 31, 2002, 2001 and 2000**

**(Inthousands)**

** **
|                                                            |   | **Preferred  Stock** |   | **Shares of  Beneficial********Interest/********Common  Stock** |   | **Additional  Paid-in********Capital** |   | **Accumulated********Other********Comprehensive********Income** |   | **Accumulated********Distributions  in Excess of********Net Income** |   | **Total********Stockholders’********Equity** |      |
|-----------------------------------------------------------------|--------|----------------------|--------|-----------------------------------------------------------------|--------|----------------------------------------|--------|-----------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|---------------------------------------------------|-----------|
|                                                            |   | **Number**           |   | **Amount**                                                      |   | **Number**                             |   | **Amount**                                                      |   |                                                                 |   |                                              |      |
|                                                            |   |                 |   |                                                            |   |                                   |   |                                                            |   |                                                                 |   |                                              |      |   |   |   |   |
| Balance at December 31, 1999                                    |   | 2,287                |   | $                                                               | 23     |                                   | 87,555 |                                                            | $      | 875                                                                  |   | $                                                 | 1,708,186 |   | $ | 214 |   | $ | (97,779 | ) | $ | 1,611,519 |   |
| Net income                                                      |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | —                                            |      | 123,081 |   | 123,081 |   |
| Dividends                                                       |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | —                                            |      | (167,137 | ) | (167,137 | ) |
| Exercise of stock options                                       |   | —               |   | —                                                          |   | 515                                    |   | 5                                                               |   | 6,595                                                                |   | —                                            |      | — |   | 6,600 |   |
| Shares repurchased and retired                                  |   | —               |   | —                                                          |   | (750                                   | )      | (7                                                              | )      | (10,784                                                              | )      | —                                            |      | — |   | (10,791 | ) |
| Employee loans                                                  |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | (8,003                                                               | )      | —                                            |      | — |   | (8,003 | ) |
| Unrealized holding gain onmarketable  securities                |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | 341                                               |      | — |   | 341 |   |
|                                                            |   |                 |   |                                                            |   |                                   |   |                                                            |   |                                                                 |   |                                              |      |   |   |   |   |
| Balance at December 31, 2000                                    |   | 2,287                |   | 23                                                              |   | 87,320                                 |   | 873                                                             |   | 1,695,994                                                            |   | 555                                               |      | (141,835 | ) | 1,555,610 |   |
| Net income                                                      |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | —                                            |      | 105,162 |   | 105,162 |   |
| Dividends                                                       |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | —                                            |      | (166,590 | ) | (166,590 | ) |
| Exercise of stock options                                       |   | —               |   | —                                                          |   | 135                                    |   | 1                                                               |   | 2,033                                                                |   | —                                            |      | — |   | 2,034 |   |
| Shares repurchased and retired                                  |   | —               |   | —                                                          |   | (119                                   | )      | (1                                                              | )      | (1,598                                                               | )      | —                                            |      | — |   | (1,599 | ) |
| Employee loans                                                  |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | 860                                                                  |   | —                                            |      | — |   | 860 |   |
| Redemption of limited partner units for shares of  common stock |   | —               |   | —                                                          |   | 16                                     |   | —                                                          |   | 281                                                                  |   | —                                            |      | — |   | 281 |   |
| Unrealized holding gain onmarketable  securities                |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | 358                                               |      | — |   | 358 |   |
| Unrealized derivative gain (loss on interest rate  swap)        |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | (754                                              | )         | — |   | (754 | ) |
| Cumulative effect of change in accounting principle             |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | (2,124                                            | )         | — |   | (2,124 | ) |
|                                                            |   |                 |   |                                                            |   |                                   |   |                                                            |   |                                                                 |   |                                              |      |   |   |   |   |
| Balance at December 31, 2001                                    |   | 2,287                |   | 23                                                              |   | 87,352                                 |   | 873                                                             |   | 1,697,570                                                            |   | (1,965                                            | )         | (203,263 | ) | 1,493,238 |   |
| Net income                                                      |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | —                                            |      | 122,062 |   | 122,062 |   |
| Dividends                                                       |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | —                                            |      | (179,150 | ) | (179,150 | ) |
| Exercise of stock options                                       |   | —               |   | —                                                          |   | 417                                    |   | 4                                                               |   | 6,596                                                                |   | —                                            |      | — |   | 6,600 |   |
| Shares repurchased and retired                                  |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | (800                                                                 | )      | —                                            |      | — |   | (800 | ) |
| Employee loans                                                  |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | 416                                                                  |   | —                                            |      | — |   | 416 |   |
| Redemption of limited partner units for shares of  common stock |   | —               |   | —                                                          |   | 420                                    |   | 4                                                               |   | 8,331                                                                |   | —                                            |      | — |   | 8,335 |   |
| Unrealized holding gain on marketable securities                |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | 229                                               |      | — |   | 229 |   |
| Unrealized derivative gain (loss on interest rate  swap)        |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | —                                                               |   | 1,143                                             |      | — |   | 1,143 |   |
| Stock Offering                                                  |   | —               |   | —                                                          |   | 6,900                                  |   | 69                                                              |   | 120,838                                                              |   | —                                            |      | — |   | 120,907 |   |
| Redemption of Preferred A shares                                |   | (1,507               | )      | (15                                                             | )      | 1,827                                  |   | 18                                                              |   | (134                                                                 | )      | —                                            |      | — |   | (131 | ) |
| Discount on redemption of Preferred A shares                    |   | —               |   | —                                                          |   | —                                 |   | —                                                          |   | (6,997                                                               | )      | —                                            |      | 6,997 |   | — |   |
|                                                            |   |                 |   |                                                            |   |                                   |   |                                                            |   |                                                                 |   |                                              |      |   |   |   |   |
| Balance at December 31, 2002                                    |   | 780                  |   | $                                                               | 8      |                                   | 96,916 |                                                            | $      | 968                                                                  |   | $                                                 | 1,825,820 |   | $ | (593 | ) | $ | (253,354 | ) | $ | 1,572,849 |   |

 

The accompanying notes are an integral partof the consolidated financial statements

 

F-5

----

 

**NEW PLANEXCEL REALTY TRUST, INC. AND SUBSIDIARIES**

 

**CONSOLIDATEDSTATEMENTS OF CASH FLOWS**

**For the Years Ended December 31, 2002, 2001 and 2000**

**(Inthousands)**

** **
|                                                                                  |   | **Year Ended  December 31, 2002** |    | **Year Ended  December 31, 2001** |   | **Year Ended  December 31, 2000** |   |
|---------------------------------------------------------------------------------------|--------|-----------------------------------|---------|-----------------------------------|--------|-----------------------------------|--------|
| Cash flows from operating activities:                                                 |   |                              |    |                              |   |                              |   |
| Net income                                                                            |   | $                                 | 122,062 |                              | $      | 105,162                           |   | $ | 123,081 |   |
| Adjustments to reconcile net income to net cash  provided by operations:              |   |                              |    |                              |   |                              |   |
| Depreciation and amortization                                                         |   | 70,223                            |    | 66,283                            |   | 64,499                            |   |
| Amortization of net premium/discount on mortgages  and notes payable                  |   | (1,110                            | )       | (1,303                            | )      | (1,153                            | )      |
| Amortization of deferred debt and loan acquisition  costs                             |   | 4,620                             |    | 1,730                             |   | 1,035                             |   |
| Foreign currency loss                                                                 |   | 13                                |    | 560                               |   | 437                               |   |
| Gain on sale of real estate and securities, net                                       |   | (371                              | )       | (1,610                            | )      | (9,200                            | )      |
| Gain on sale of discontinued operations                                               |   | (100,668                          | )       | (1,500                            | )      | —                            |   |
| Minority interest in income of partnership                                            |   | 642                               |    | 848                               |   | 952                               |   |
| Extraordinary item                                                                    |   | 318                               |    | —                            |   | (758                              | )      |
| Impairment of real estate assets                                                      |   | 107,561                           |    | 13,107                            |   | 3,620                             |   |
| Equity participation in ERT                                                           |   | —                            |    | 4,313                             |   | 17,867                            |   |
| Equity in (income)/loss of unconsolidated ventures                                    |   | (5,244                            | )       | (985                              | )      | —                            |   |
| Write off of investment in Eversave                                                   |   | —                            |    | 249                               |   | —                            |   |
| Change in investment in and accrued interest on  loans to ERTDevelopment  Corporation |   | —                            |    | (1,976                            | )      | (11,185                           | )      |
| Changes in operating assets and liabilities, net:                                     |   |                              |    |                              |   |                              |   |
| Change in trade and notes receivable                                                  |   | (3,435                            | )       | 2,419                             |   | (12,223                           | )      |
| Change in other receivables                                                           |   | (25,745                           | )       | 2,093                             |   | (3,531                            | )      |
| Change in other liabilities and dividends payable                                     |   | 48,356                            |    | 8,001                             |   | 4,646                             |   |
| Change in sundry assets and liabilities                                               |   | 12,463                            |    | (10,657                           | )      | 1,245                             |   |
| Net cash provided by operating activities                                             |   | 229,685                           |    | 186,734                           |   | 179,332                           |   |
|                                                                                  |   |                              |    |                              |   |                              |   |
| Cash flows from investing activities:                                                 |   |                              |    |                              |   |                              |   |
| Real estate acquisitions and building improvements                                    |   | (58,585                           | )       | (112,821                          | )      | (33,742                           | )      |
| Proceeds from real estate sales, net                                                  |   | 266,253                           |    | 413,195                           |   | 52,253                            |   |
| Acquisition, net of cash received                                                     |   | (639,612                          | )       | —                            |   | —                            |   |
| Leasing commissions paid                                                              |   | (1,763                            | )       | (1,811                            | )      | —                            |   |
| Loans to ERT Development Corporation                                                  |   | —                            |    | 12,335                            |   | (39,324                           | )      |
| Purchase of ERT Development Corporation common  stock                                 |   | —                            |    | (435                              | )      | —                            |   |
| Cash acquired from purchase of ERT Development  Corporation                           |   | —                            |    | 543                               |   | —                            |   |
| Repayments from ERT Development Corporation                                           |   | —                            |    | —                            |   | 13,034                            |   |
| Advances for mortgage notes receivable, net                                           |   | (420                              | )       | (2,323                            | )      | (4,609                            | )      |
| Repayments of mortgage notes receivable                                               |   | 10,744                            |    | 5,452                             |   | 2,616                             |   |
| Restricted cash in escrow                                                             |   | (42,412                           | )       | —                            |   | —                            |   |
| Capital contributions to joint ventures                                               |   | (5,346                            | )       | —                            |   | —                            |   |
| Distributions to joint ventures                                                       |   | 44,189                            |    | —                            |   | —                            |   |
| Net cash (used in) provided by investing activities                                   |   | (426,952                          | )       | 314,135                           |   | (9,772                            | )      |
|                                                                                  |   |                              |    |                              |   |                              |   |
| Cash flows from financing activities:                                                 |   |                              |    |                              |   |                              |   |
| Principal payments of mortgages and notes payable                                     |   | (121,566                          | )       | (169,657                          | )      | (108,877                          | )      |
| Reserves established for mortgages payable                                            |   | —                            |    | (7,669                            | )      | —                            |   |
| Proceeds from mortgages payable                                                       |   | —                            |    | —                            |   | 48,000                            |   |
| Proceeds from credit facility borrowing, net                                          |   | 135,000                           |    | (148,750                          | )      | 55,030                            |   |
| Dividends paid                                                                        |   | (178,925                          | )       | (166,594                          | )      | (167,043                          | )      |
| Proceeds from stock offering, net                                                     |   | 120,907                           |    | —                            |   | —                            |   |
| Proceeds from bond issuance, net                                                      |   | 249,150                           |    | —                            |   | —                            |   |
| Proceeds from exercise of stock options                                               |   | 5,753                             |    | 2,033                             |   | 6,600                             |   |
| Payments for the repurchase of common stock                                           |   | (800                              | )       | (1,598                            | )      | (10,791                           | )      |
| Repayment of loans receivable for the purchase of  common stock                       |   | 416                               |    | 861                               |   | —                            |   |
| Financing fees paid                                                                   |   | (7,554                            | )       | (1,353                            | )      | —                            |   |
| Minority interest distributions paid                                                  |   | (1,705                            | )       | (2,149                            | )      | (2,143                            | )      |
| Costs to redeem Preferred A shares                                                    |   | (130                              | )       | —                            |   | —                            |   |
| Cash paid on forward starting swap                                                    |   | (1,914                            | )       | —                            |   | —                            |   |
| Net cash   provided by (used in) financing activities                            |   | 198,632                           |    | (494,876                          | )      | (179,224                          | )      |
|                                                                                  |   |                              |    |                              |   |                              |   |
| Net increase (decrease) in cash and cash  equivalents                                 |   | 1,365                             |    | 5,993                             |   | (9,664                            | )      |
|                                                                                  |   |                              |    |                              |   |                              |   |
| Cash and cash equivalents at beginning of year                                        |   | 7,163                             |    | 1,170                             |   | 10,834                            |   |
| Cash and cash equivalents at end of year                                              |   | $                                 | 8,528   |                              | $      | 7,163                             |   | $ | 1,170 |   |
| Supplemental  Cash Flow Disclosure, including Non-Cash Activities:               |   |                              |    |                              |   |                              |   |
| Cash paid for interest                                                                |   | $                                 | 91,600  |                              | $      | 88,200                            |   | $ | 93,800 |   |
| Capitalized interest                                                                  |   | 3,733                             |    | 2,635                             |   | 400                               |   |
| State and local taxes paid                                                            |   | 430                               |    | 200                               |   | 900                               |   |
| Municipal bonds and tax incentive financing  received in acquisition                  |   | 16,900                            |    | —                            |   | —                            |   |
| Mortgages assumed                                                                     |   | 456,000                           |    | 83,600                            |   | —                            |   |
| Issuance of shares / units                                                            |   | 25,000                            |    | —                            |   | —                            |   |

 

The accompanying notes are an integral part of the consolidatedfinancial statements.

 

F-6

----

 

**NEW PLANEXCEL REALTY TRUST, INC. AND SUBSIDIARIES**

 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

**1.             Description of Business**

 

New Plan ExcelRealty Trust, Inc. and its subsidiaries (collectively, the “Company”) isoperated as a self-administered, self-managed real estate investment trust(“REIT”).  As a result of thediscontinued operations resulting from the sale of the Company’s gardenapartment communities during 2001, the principal business of the Company is theownership and operation of retail properties throughout the United States.

 

**2.             Summary of Significant AccountingPolicies**

 

Principles of Consolidation

 

Theaccompanying consolidated financial statements include the accounts of theCompany, its wholly owned subsidiaries and Excel Realty Partners, L.P. (“ERP”),a Delaware limited partnership (Note 14). All significant intercompany transactions and balances have beeneliminated.

 

Until June 30,2001, the Company used the equity method to account for its investment in ERTDevelopment Corporation (“ERT”), a Delaware corporation (Note 9).  Subsequent to that date ERT has beenaccounted for as a fully consolidated entity.

 

Net Earnings per Share of Common Stock

 

In accordancewith Statement of Financial Accounting Standards (“SFAS”) No. 128, *Earnings perShare*(“SFAS No. 128”), the Company presents both basic and dilutedearnings per share.  Net earnings percommon share (“basic EPS”) is computed by dividing net income available tocommon stockholders by the weighted average number of common shares outstandingfor the period.  Net earnings per commonshare assuming dilution (“diluted EPS”) is computed giving effect to alldilutive potential common shares that were outstanding during the period.  Dilutive potential common shares consist ofthe incremental common shares issuable upon the conversion of convertiblepreferred stock (using the “if converted” method), exercise of in-the-moneystock options and upon conversion of ERP limited partnership units.

 

Cash Equivalents

 

Cashequivalents consist of short-term, highly liquid debt instruments withmaturities of three months or less at acquisition.  Items classified as cash equivalents include insured bankcertificates of deposit and commercial paper. At times, cash balances at a limited number of banks may exceedinsurable amounts.  The Company believesit mitigates this risk by investing in or through major financial institutions.

 

Restricted Cash

 

Restrictedcash consists primarily of cash held in escrow accounts for deferredmaintenance, capital improvements, environmental expenditures, taxes,insurance, operating expenses and debt service as required by certain loanagreements.  Additionally, for the yearended December 31, 2002, restricted cash balances contain escrow funds held forthe repayment of a promissory note issued in connection with the Equity InvestmentGroup portfolio acquisition (Note 3). Substantially all restricted cash is invested in money market mutualfunds and carried at market value.

 

Accounts Receivable

 

Accountsreceivable is stated net of allowance for doubtful accounts of $15.3 millionand $15.6 million as of December 31, 2002 and 2001, respectively.

 

F-7

----

 

Real Estate

 

Land,buildings and building and tenant improvements are recorded at cost and statedat cost less accumulated depreciation. Major replacements and betterments, which improve or extend the life ofthe asset, are capitalized and depreciated over their estimated useful lives;ordinary repairs and maintenance are expensed as incurred.

 

Properties aredepreciated using the straight-line method over the estimated useful lives ofthe assets.  The estimated useful livesare as follows:

 

| Buildings             |   | 35 to 40  years                                             |   |
|-----------------------|--------|-------------------------------------------------------------|--------|
| Building improvements |   | 5 to 40 years                                               |   |
| Tenant improvements   |   | The shorter of the term of the related lease or useful life |   |

 

Long-Lived Assets

 

On a periodicbasis, management assesses whether there are any indicators that the value ofits real estate properties may be impaired. A property’s value is impaired only if management’s estimate of theaggregate future cash flows (undiscounted and without interest charges) to begenerated by the property (taking into account the anticipated holding periodof the assets) is less than the carrying value of the property.  Such cash flows consider factors such asexpected future operating income, trends and prospects, as well as the effectsof demand, competition and other economic factors.  To the extent impairment has occurred, the loss will be measuredas the excess of the carrying amount of the property over the fair value of theproperty.

 

When assetsare identified by management as held for sale, the Company discontinuesdepreciating the assets and estimates the sales price, net of selling costs, ofsuch assets.  If, in management’sopinion, the net sales price of the assets which have been identified for saleis less than the net book value of the assets, a valuation allowance isestablished.  For investments accountedfor under the equity method, a loss is recognized if the loss in value of theinvestment is other than temporary.

 

Employee Loans

 

Prior to 2001,the Company made loans to officers, directors and employees primarily for thepurpose of purchasing common stock of the Company.  These loans are demand and term notes bearing interest at ratesranging from 5% to 10%.  Interest ispayable quarterly.  Loans made for thepurchase of common stock are reported as a deduction from stockholders’equity.  At December 31, 2002 and 2001,the Company had aggregate loans to employees of approximately $6.9 million and$7.3 million, respectively.

 

Investments in / Advances to Unconsolidated Ventures

 

The Companyhas direct equity investments in several joint venture projects.  The Company accounts for these investmentsin unconsolidated ventures under the equity method of accounting, as theCompany exercises significant influence over, but does not control, theseentities.  These investments areinitially recorded at cost, as “Investments in / advances to unconsolidatedventures”, and subsequently adjusted for equity in earnings and cashcontributions and distributions.

 

Deferred Leasing and Loan Origination Costs

 

Costs incurredin obtaining tenant leases are amortized using the straight-line method overthe terms of the related leases and included in depreciation andamortization.  Unamortized deferredleasing costs are charged to amortization expense upon early termination of thelease.  Costs incurred in obtaininglong-term financing are amortized on a straight-line basis and charged tointerest expense over the terms of the related debt agreements, whichapproximates the effective interest method.

 

F-8

----

 

Internal Leasing Costs

 

EffectiveJanuary 1, 2002, the Company commenced capitalizing internal leasing costs inaccordance with SFAS No. 91, *Nonrefundable Fees & Costs Associated withOriginating or Acquiring Loans and Initial Direct Costs of Leases*(approximately$3.1 million of internal leasing costs were capitalized for the year endedDecember 31, 2002).

 

Derivative / Financial Instruments

 

The Companyaccounts for derivative and hedging activities in accordance with SFAS No. 133,*Accountingfor Derivative Instruments and Hedging Activities*(“SFAS No. 133”)and SFAS No. 138, *Accounting for Certain Derivative Instruments and Certain HedgingActivities*.  These accountingstandards require the Company to measure derivatives, including certainderivatives embedded in other contracts, at fair value and to recognize them inthe Consolidated Balance Sheet as assets or liabilities, depending on theCompany’s rights or obligations under the applicable derivative contract.  For derivatives designated as fair valuehedges, the changes in the fair value of both the derivative instrument and thehedged item are recorded in earnings. For derivatives designated as cash flow hedges, the effective portionsof changes in fair value of the derivative are reported in other comprehensiveincome (“OCI”) and are subsequently reclassified into earnings when the hedgeditem affects earnings.  Changes in fairvalue of derivative instruments not designated as hedging instruments andineffective portions of hedges are recognized in earnings in the currentperiod.

 

Revenue Recognition

 

Rental revenueis recognized on the straight-line basis, which averages minimum rents over theterms of the leases.  The cumulativedifference between lease revenue recognized under this method and contractuallease payment terms is recorded as “deferred rent receivable”, and is includedin “trade receivables” on the accompanying balance sheets.  Certain leases provide for percentage rentsbased upon the level of sales achieved by the lessee.  These percentage rents are recorded once the required sales levelis achieved.  The leases also typicallyprovide for tenant reimbursement of common area maintenance and other operatingexpenses.

 

Income Taxes

 

The Companyhas elected to be treated as a REIT under Sections 856 through 860 of theInternal Revenue Code of 1986, as amended (the “Code”).  In order to maintain its qualification as aREIT, among other things, the Company is required to distribute at least 90% ofits REIT taxable income to its stockholders and meet certain tests regardingthe nature of its income and assets.  Asa REIT, the Company is not subject to federal income tax with respect to thatportion of its income which meets certain criteria and is distributed annuallyto the stockholders.  Accordingly, noprovision for federal income taxes is included in the accompanying consolidatedfinancial statements.  The Company plansto continue to operate so that it meets the requirements for taxation as aREIT.  Many of these requirements,however, are highly technical and complex. If the Company were to fail to meet these requirements, the Companywould be subject to federal income tax. The Company is subject to certain state and local taxes.  Provision for such taxes has been includedin general and administrative expenses in the Company’s consolidated statementof income.

 

EffectiveJanuary 1, 2001, the Company may elect to treat one or more of its existing ornewly created corporate subsidiaries as a taxable REIT subsidiary (“TRS”).  In general, a TRS of the Company may performadditional services for tenants of the Company and generally may engage in anyreal estate or non-real estate related business (except for the operation ormanagement of health care facilities or lodging facilities or the provision toany person, under a franchise, license or otherwise, of rights to any brandname under which any lodging facility or health care facility isoperated).  A TRS is subject tocorporate federal income tax.  TheCompany has elected to treat certain of its existing and newly createdcorporate subsidiaries as TRS’s.  AtDecember 31, 2002, the Company’s TRS subsidiaries had a tax net operating loss(“NOL”) carryforward of approximately $22.8 million expiring from 2013 to 2016.

 

F-9

----

 

SegmentInformation

 

As a result ofthe Company’s disposition of its garden apartment portfolio in September 2001,the principal business of the Company is the ownership and operation of retailproperties.  The Company does notdistinguish or group its operations on a geographical basis for purposes ofmeasuring performance. Accordingly, the Company believes it has a singlereportable segment for disclosure purposes in accordance with accountingprinciples generally accepted in the United States.  Further, all operations are within the United States and notenant comprises more than 10% of revenues. 

 

Recently Issued Accounting Standards

 

In January2003, FASB issued FASB Interpretation No. 46, *Consolidation of Variable InterestEntities* (“FIN 46”), an interpretation of ABR 51.  FIN 46 provides guidance on identifyingentities for which control is achieved through means other than through votingrights, variable interest entities (“VIE”), and how to determine when and whichbusiness enterprises should consolidate the VIE.  In addition, FIN 46 requires both the primary beneficiary and allother enterprises with a significant variable interest in a VIE to makeadditional disclosures.  Thetransitional disclosure requirements are required for all financial statementsinitially issued after January 31, 2003. The consolidation provisions of FIN 46 are effective immediately forvariable interests in VIEs created after January 31, 2003.  For variable interests in VIEs createdbefore February 1, 2003, the provisions of FIN 46 are effective for the firstinterim period beginning after June 15, 2003. The Company does not expect theadoption of FIN 46 to have a material impact because the Company’s potentialvariable interests in VIEs are its Investments in Unconsolidated Venturesdescribed in Note 10.  The Company’smaximum exposure to loss as a result of its involvement with each potential VIEis also described in Note 10.

 

In December2002, FASB issued Statement 148, *Accounting for Stock-Based Compensation – Transitionand Disclosure – an amendment of FAS 123* (“SFAS No. 148”).  This statement provides alternativetransition methods for a voluntary change to the fair value basis of accountingfor stock-based employee compensation. However, SFAS No. 148 does not permit the use of the original FAS 123prospective method of transition for changes to fair value based methods madein fiscal years beginning after December 15, 2003.  In addition, SFAS No. 148 amends the disclosure requirements ofStatement of Financial Accounting Standards No. 123, *Accounting for Stock Based Compensation*(“SFAS No. 123”), to require prominent disclosures in both annualand interim financial statements about the method of accounting for stock-basedemployee compensation, description of the transition method utilized and theeffect of the method used on reported results. The transition and annual disclosure provisions of SFAS No. 148 shall beapplied for fiscal years ending after December 15, 2002.  The new interim disclosure provisions areeffective for the first interim period beginning after December 15, 2002.  Effective January 1, 2003, the Company willadopt the prospective method provisions of SFAS No. 148, which will apply therecognition provisions of FAS 123 to all employee awards granted, modified orsettled after January 1, 2003.  Theadoption is not expected to have a material impact on the financial statementsof the Company.

 

With respectto the Company’s stock options which were granted prior to 2002, the Companyaccounted for stock-based compensation using the intrinsic value methodprescribed in Accounting Principles Board Opinion No. 25, *Accounting for Stock Issued toEmployees* (“APB No. 25”), and related interpretations.  Under APB No. 25, compensation cost ismeasured as the excess, if any, of the quoted market price of the Company’sstock at the date of grant over the exercise price of the option granted.  Compensation cost for stock options, if any,is recognized ratably over the vesting period. The Company’s policy is to grant options with an exercise price equal tothe quoted closing market price of the Company’s stock on the business daypreceding the grant date.  Accordingly,no compensation cost has been recognized under the Company’s stock option plansfor the granting of stock options made prior to December 31, 2002.

 

F-10

----

 

SFAS No. 148disclosure requirements, including the effect on net income and earnings pershare if the fair value based method had been applied to all outstanding andunvested stock awards in each period are presented below (in thousands exceptper share amounts):

 
|                                                                                                                                  |   | **Years  Ended December 31,** |    |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                                                                                                  |   | **2002  Basic EPS**           |    | **2001  Basic EPS** |   | **2000  Basic EPS** |   |
| Net income, as reported                                                                                                               |   | $                             | 122,062 |   | $ | 105,162 |   | $ | 123,081 |   |
| Total stock based employee compensation  expense determined under fair value based method for all awards, net of related  tax effects |   | (2,159                        | )       | (2,076 | ) | (2,050 | ) |
| Pro forma net income                                                                                                                  |   | $                             | 119,903 |   | $ | 103,086 |   | $ | 121,031 |   |
|                                                                                                                                  |   |                          |    |   |   |   |   |
| Earnings per share:                                                                                                                   |   |                          |    |   |   |   |   |
| Basic – as reported                                                                                                              |   | $                             | 1.14    |   | $ | 0.95 |   | $ | 1.15 |   |
| Basic – pro forma                                                                                                                |   | $                             | 1.11    |   | $ | 0.92 |   | $ | 1.12 |   |
|                                                                                                                                  |   |                          |    |   |   |   |   |
| Diluted – as reported                                                                                                            |   | $                             | 1.13    |   | $ | 0.94 |   | $ | 1.14 |   |
| Diluted – pro forma                                                                                                              |   | $                             | 1.10    |   | $ | 0.92 |   | $ | 1.12 |   |

 

In November 2002, FASB issued FASB Interpretation No. 45, *Guarantor’sAccounting and Disclosure Requirements for Guarantees, Including IndirectGuarantees of Indebtedness of Others* (“FIN 45”) (an interpretationof FASB Statements No. 5, 57 and 107 and rescission of FASB Interpretation No.34).  FIN 45 clarifies the requirementsof FASB Statement No. 5, *Accounting for Contingencies*.  It requires that upon issuance of aguarantee, the guarantor must recognize a liability for the fair value of theobligation it assumes under that guarantee regardless of whether or not theguarantor receives separate identifiable consideration (i.e., a premium).  The Company has adopted the new disclosurerequirements, which are effective beginning with 2002 calendar year-endfinancials.  FIN 45’s provisions forinitial recognition and measurement are effective on a prospective basis to guaranteesissued or modified after December 31, 2002. The adoption of FIN 45 is not expected to have a material impact on theCompany.

 

In July 2002, FASB issued Statement 146, *Accounting for Costs Associated withExit or Disposal Activities*(“SFAS No. 146”).  This statement addresses financial accountingand reporting for costs associated with exit or disposal activities andnullifies Emerging Issues Task Force Issue No. 94-3, *Liability Recognition for CertainEmployee Termination  Benefits and OtherCosts to Exit an Activity (including Certain Costs Incurred in Restructuring)*.  It addresses when to recognize a liabilityfor a cost associated with an exit or disposal activity such as, but notlimited to, termination benefits provided to current employees that areinvoluntarily terminated, costs to terminate a contract that is not a capitallease and costs to consolidate facilities or relocate employees.  SFAS No. 146 does not apply to entitiesnewly acquired in a business combination or with a disposal activity covered byFASB Statement No. 144, *Accounting for the Impairment or Disposal ofLong-Lived Assets* (“SFAS No. 144”) and to costs associated with theretirement of long-lived assets covered by FASB Statement No. 143, *Accountingfor Asset Retirement Obligations*. SFAS No. 146 states that a liability for a cost associated with an exitor disposal activity be recognized and measured initially at fair value onlywhen the liability is incurred and not at the date of an entity’s commitment toa plan, as previously defined in Issue 94-3. The provisions of SFAS No. 146 shall be applied for exit and disposalactivities that are initiated after December 31, 2002.  The adoption of SFAS No. 146 is not expectedto have a material impact on the Company.

 

In April 2002, FASB issued Statement 145, *Rescission of FASB Statements No. 4,44, and 64, Amendment of FASB Statement No. 13 and Technical Corrections*(“SFASNo. 145”).  This statement rescinds FASBStatement No. 4, *Reporting Gains and Losses from Extinguishment of Debt*.  Debt extinguishments that do not meet thecriteria for classification as extraordinary items in APB Opinion No. 30 shouldnot be classified as extraordinary.  Theprovisions of SFAS No. 145 shall be applied in fiscal years beginning after May15, 2002.  Debt extinguishments thatwere classified as extraordinary in prior periods presented that do not meetthe criteria of Opinion 30 for classification as an extraordinary item shall bereclassified.  

 

F-11

----

 

TheCompany will adopt this statement, as required, effective January 1, 2003, andthe adoption of SFAS No. 145 is not expected to have a material impact on thefinancial statements of the Company.

 

EffectiveJanuary 1, 2002, the Company adopted SFAS No. 144.  This statement addresses financial accounting and reporting forthe impairment of long-lived assets and for long-lived assets to be disposedof.  SFAS No. 144 requires, among otherthings, that the primary assets and liabilities and the results of operationsof the Company’s real properties which have been sold during 2002, or otherwisequalify as held for sale (as defined by SFAS No. 144), be classified asdiscontinued operations and segregated in the Company’s Consolidated IncomeStatements and Balance Sheets. Properties classified as real estate held for sale generally representproperties that are under contract for sale and are expected to close withinthe next twelve months.  SFAS No. 144requires that the provisions of this statement be adopted prospectively.  Accordingly, real estate designated as heldfor sale prior to January 1, 2002 will continue to be accounted for under theprovisions of Statement 121, *Accounting for the Impairment of Long-Lived Assets,*andthe results of operations, including impairment, gains and losses, of theseproperties are included in income from continuing operations.  Real estate designated as held for salesubsequent to January 1, 2002 will be accounted for in accordance with theprovisions of SFAS No. 144 and the results of operations of these propertiesare included in income from discontinued operations.  Prior periods have been restated for comparability, as required.

 

Use of Estimates

 

Thepreparation of financial statements in conformity with generally acceptedaccounting principles requires management to make estimates and assumptionsthat affect the reported amounts of assets and liabilities at the date of thefinancial statements and the reported amounts of revenues and expenses duringthe period.  Actual results could differfrom those estimates.  The mostsignificant assumptions and estimates relate to impairments of real estate,recovery of mortgage notes and trade accounts receivable and depreciable lives.

 

Reclassifications

 

Certain priorperiod amounts have been reclassified to conform with the current yearpresentation.

 

**3.             Acquisitions and Dispositions**

 

EIG Acquisition

 

On December 12, 2002, the Company acquired a portfolio of 57 communityand neighborhood shopping centers (the “EIG Acquisition”) from EquityInvestment Group, a private retail-focused REIT.  The acquisition of one additional shopping center from EquityInvestment Group was completed in January 2003.  The aggregate purchase price for the acquisition wasapproximately $437 million, consisting of the assumption of approximately $149million of outstanding indebtedness, the issuance of approximately $25 millionof units in ERP and approximately $263 million in cash.  The cash component of the acquisition wasfinanced with proceeds generated from the sale of four of the Company’s factoryoutlet centers (see “Disposition of Factory Outlet Centers” below) and throughborrowings under the Company’s $350 million revolving credit facility.           

 

CenterAmerica Acquisition

 

On March 1, 2002, the Company acquired a portfolio of 92 community andneighborhood shopping centers (the “CenterAmerica Acquisition”) fromCenterAmerica Property Trust, L.P., a private company majority owned by MorganStanley Real Estate Fund II, L.P.  Aspart of the transaction, the Company also acquired a 10% managing membershipinterest in a joint venture with a private U.S. pension fund.  The joint venture currently owns 14 grocery-anchored shopping centerslocated in six states.  The aggregatepurchase price for the acquisition was approximately $654 million, consistingof approximately $365 million in cash and the assumption of approximately $289million of outstanding debt.  The cashcomponent of the acquisition was financed with the proceeds of a public equityoffering of the Company’s common stock, borrowings under the Company’s thenexisting credit facilities and a $125 million senior unsecured term loanfacility.

 

F-12

----

 

Other Acquisitions

 

In fiscal 2002, the Company acquired three properties, Midway MarketSquare, Superior Marketplace and Whitestown Plaza.  Midway Market Square, a 234,670 square foot grocery-anchoredcommunity shopping center located in Elyria, Ohio, was acquired on November 20,2002 for approximately $23.7 million, including approximately $17.8 million ofassumed mortgage indebtedness.  SuperiorMarketplace was acquired on July 31, 2002 from The Ellman Companies forapproximately $13.6 million in cash and the satisfaction of $38.0 million ofnotes receivable and accrued interest. Superior Marketplace is an existing 148,302 square foot grocery-anchoredcommunity shopping center located in Superior, Colorado, northwest ofDenver.  The shopping center is in thelater stages of development and is expected to total 295,602 square feet uponcompletion.  Whitestown Plaza, an 80,612square foot shopping center located in Whitesboro, New York, was acquired onApril 3, 2002 in consideration of $3.8 million of notes and interestreceivable.

 

In fiscal 2001, the Company acquired two properties, Arapahoe Crossingsand Stein Mart Center.  The ArapahoeCrossings shopping center was acquired from The Ellman Companies forapproximately $48 million in cash and the satisfaction of $13.6 million ofnotes receivable and accrued interest. Arapahoe Crossings, a 466,106 square foot grocery-anchored communityshopping center located in Aurora, Colorado, southeast of Denver, is in thefinal phase of development.  The SteinMart Center, a 112,708 square foot shopping center located in Poway,California, was acquired from one of the Company’s former joint venturepartners, in consideration of $4.9 million of notes receivable and interest dueto ERT.

 

In fiscal 2000, the Company acquired two properties, Burdine’s atClearwater Mall and Dover Park Plaza. The 10.4 acre Burdine’s store site, located in Clearwater, Florida, wasacquired for approximately $4.8 million. Dover Park Plaza, a 60,000 square foot shopping center located inYardville, New Jersey, was acquired for approximately $3.3 million and was 100%leased at the time of purchase.

 

Disposition of Factory Outlet Centers

 

On December 19, 2002, the Company and Chelsea Property Group, Inc.completed the sale by the Company of four of its factory outlet centers (the“Factory Outlet Disposition”).  The fourproperties included St. Augustine Outlet Center, located in St. Augustine,Florida; Factory Merchants Branson, located in Branson, Missouri; FactoryOutlet Village Osage Beach, located in Osage Beach, Missouri; and JacksonOutlet Village, located in Jackson, New Jersey.  As consideration for the four properties, the Company receivedgross proceeds of approximately $193 million, and after costs associated withthe disposition, the gain on sale was approximately $79 million.  The proceeds were used to pay down a portionof the balance outstanding under the Company’s revolving credit facility, whichhad been drawn to fund a portion of the EIG Acquisition.

 

Disposition of Garden Apartment Portfolio

 

On September21, 2001, pursuant to an agreement dated May 11, 2001, the Company and a privateinvestor group comprised of Houlihan-Parnes Realtors, LLC and C.L.K. ManagementCorp. (“Houlihan/C.L.K.”) completed the sale by the Company of its gardenapartment community portfolio (excluding one apartment community which wasunder contract to be sold separately to a third party) to Houlihan/C.L.K.  The one remaining apartment community (TheClub Apartments) was sold to the Homewood City Board of Education of Homewood,Alabama on September 28, 2001.

 

Asconsideration for the entire portfolio, the Company received gross proceeds ofapproximately $380 million.  Inconnection with the garden apartment community portfolio transaction, theCompany arranged for the provision of a letter of credit to the buyer in theamount of approximately $30 million, which has a term of three years (subjectto the right of Houlihan/C.L.K. to terminate or reduce the amount thereof after18 months or, alternatively, to extend the term for one additional year), andfor which the Company will receive a nine percent per annum fee on the undrawnface amount of the letter of credit while it remains outstanding.  The Company also received a one percentcommitment fee.  The letter of creditwas used by the buyer as collateral for a loan obtained to finance the purchaseof the garden apartment community portfolio. If the letter of credit is drawn (for example, following a default bythe buyer under the loan), the Company will be obligated to reimburse theproviding bank for the amount of the draw. The balance outstanding under this letter of credit was 

 

F-13

----

 

approximately $23.8 million asof December 31, 2002; however, as of December 31, 2002, approximately $4.5million of this balance was secured by funds held in escrow.  These funds reduced the Company’s exposureunder the letter of credit to approximately $19.3 million.

 

After costsassociated with the disposition of the garden apartment community portfolio,the gain on sale was $18.5 million. Approximately $1.5 million of the gain was recognized in 2001 and theremaining $17.0 million was recognized in 2002.  Accordingly, the assets and operating results of the gardenapartment communities have been reclassified and reported as discontinuedoperations.

 

The results ofoperations of the garden apartment communities have been included in results ofdiscontinued operations (Note 5) in accordance with SFAS No. 144.

 

The Companyhas allocated interest to its discontinued garden apartment operations inaccordance with EITF 87-24.  Suchinterest includes (i) garden apartment portfolio mortgage interest for allperiods and (ii) interest on a $50 million portion of the credit facilitiessubsequent to October 1, 2000, when an interest rate swap was entered into incontemplation of a possible sale of the portfolio.

 

Other Dispositions

 

During 2002,the Company sold 25 properties (including the Factory Outlet Dispositiondiscussed above), one outparcel, and approximately 10.5 acres of land,including the 450,000 square feet of anchor space at Clearwater Mall(collectively “Other Discontinued Operations”), for aggregate gross proceeds ofapproximately $278.1 million.  Inconnection with the sale of these properties, and in accordance with SFAS No.144 (Note 2), the Company recorded the results of operations and the relatedgain on sale as income from discontinued operations (Note 5).

 

During 2001,the Company sold, in addition to its garden apartment portfolio, 26 properties,seven land parcels and one outparcel for aggregate gross proceeds of approximately$49.8 million.  In connection with thesale of these properties, and in accordance with SFAS No. 144 the Companyrecorded the results of operations of these properties as income fromdiscontinued operations (Note 5).

 

During 2000,the Company sold 12 properties, including seven shopping centers, four singletenant properties and one commercial property, for aggregate gross proceeds ofapproximately $57.5 million.  The gainfrom these sales was approximately $9.2 million and is included in “Gain onsale of real estate” in the Company’s 2000 Consolidated Statement of Income.

 

**4.            ****Real EstateHeld for Sale and Impaired Real Estate**

 

As of December 31, 2002, 11 retail properties and two land parcels wereclassified as “Real estate held for sale”. These properties were located in seven states and had an aggregate grossleasable area of approximately 0.5 million square feet.  Such properties had an aggregate book valueof approximately $21.3 million, net of accumulated depreciation ofapproximately $4.0 million and impairment charges of $3.5 million.  In accordance with SFAS No. 144, the Companyhas recorded the results of operations and the related impairment of anyproperties classified as held for sale subsequent to December 31, 2001 asincome from discontinued operations (Note 5).

 

As of December31, 2001, the Company classified eight single tenant properties and threeretail properties as “Real estate held for sale”.  These properties were located in eight states and had anaggregate gross leasable area of approximately 0.5 million square feet.  Such properties had an aggregate book valueof approximately $20.7 million, net of accumulated depreciation ofapproximately $2.1 million, and impairment of approximately $7.1 million.

 

As part of theCompany’s periodic assessment of its real estate properties relative to boththe extent to which such assets are consistent with the Company’s long-termreal estate investment objectives and the performance and prospects of 

 

F-14

----

 

each asset, the Companydetermined in the fourth quarter of 2002 that its investment in two propertieswas impaired. Given the substantial culmination during the fourth quarter of2002 of the Company’s non-core asset recycling program and thereforeachievement of its goal relative to executing a product strategy focused on itscore assets of community and neighborhood shopping centers, the Company reducedits anticipated holding period of certain remaining non-core assets.  As a result of the reduction in theanticipated holding period, together with a reassessment of the anticipatedfuture operating income of the properties and the effects of new competitionand demand for the properties, the Company determined that its investment inPointe Orlando and Factory Merchants Barstow was impaired and recorded an impairment of real estate of approximately$88.0 million related to these assets. At Pointe Orlando, the Company took a $70.0 million impairment charge,reducing the book value of this asset to $88.0 million and at Factory MerchantsBarstow, the Company took an $18.0 million impairment charge, reducing the bookvalue of this asset to $15.0 million.

 

F-15

----

 

**5**.             **Incomefrom Discontinued Operations**

 

The followingis a summary of income from discontinued operations for the years endedDecember 31, 2002, 2001 and 2000 (in thousands):

** **
|                                                                    |   | **Year Ended********December  31, 2002** |    | **Year Ended********December  31, 2001** |   | **Year Ended********December  31, 2000** |   |
|-------------------------------------------------------------------------|--------|------------------------------------------|---------|------------------------------------------|--------|------------------------------------------|--------|
|                                                                    |   |                                     |    |                                     |   |                                     |   |
| Total revenue                                                           |   |                                     |    |                                     |   |                                     |   |
| Garden apartment communities                                            |   | $                                        | —  |                                     | $      | 56,063                                   |   | $ | 76,288 |   |
| Other discontinued operations                                           |   | 34,202                                   |    | 37,763                                   |   | 36,970                                   |   |
| Real estate held for sale                                               |   | 2,974                                    |    | 2,847                                    |   | 2,894                                    |   |
| Total revenue                                                           |   | 37,176                                   |    | 96,673                                   |   | 116,152                                  |   |
|                                                                    |   |                                     |    |                                     |   |                                     |   |
| Operating costs                                                         |   |                                     |    |                                     |   |                                     |   |
| Garden apartment communities                                            |   | —                                   |    | (25,063                                  | )      | (34,617                                  | )      |
| Other discontinued operations                                           |   | (8,168                                   | )       | (8,101                                   | )      | (8,454                                   | )      |
| Real estate held for sale                                               |   | (507                                     | )       | (520                                     | )      | (407                                     | )      |
|                                                                    |   |                                     |    |                                     |   |                                     |   |
| Real estate taxes                                                       |   |                                     |    |                                     |   |                                     |   |
| Garden apartment communities                                            |   | —                                   |    | (4,039                                   | )      | (6,210                                   | )      |
| Other discontinued operations                                           |   | (1,861                                   | )       | (2,047                                   | )      | (1,989                                   | )      |
| Real estate held for sale                                               |   | (165                                     | )       | (161                                     | )      | (161                                     | )      |
|                                                                    |   |                                     |    |                                     |   |                                     |   |
| Interest expense                                                        |   |                                     |    |                                     |   |                                     |   |
| Garden apartment communities                                            |   | —                                   |    | (4,899                                   | )      | (4,563                                   | )      |
| Other discontinued operations                                           |   | (50                                      | )       | (245                                     | )      | (281                                     | )      |
| Real estate held for sale                                               |   | —                                   |    | —                                   |   | —                                   |   |
|                                                                    |   |                                     |    |                                     |   |                                     |   |
| Depreciation and amortization                                           |   |                                     |    |                                     |   |                                     |   |
| Garden apartment communities                                            |   | —                                   |    | (7,947                                   | )      | (9,135                                   | )      |
| Other discontinued operations                                           |   | (3,387                                   | )       | (5,221                                   | )      | (5,017                                   | )      |
| Real estate held for sale                                               |   | (612                                     | )       | (661                                     | )      | (622                                     | )      |
|                                                                    |   |                                     |    |                                     |   |                                     |   |
| Provision for doubtful accounts                                         |   |                                     |    |                                     |   |                                     |   |
| Garden apartment communities                                            |   | —                                   |    | (436                                     | )      | (453                                     | )      |
| Other discontinued operations                                           |   | (661                                     | )       | (796                                     | )      | 59                                       |   |
| Real estate held for sale                                               |   | (47                                      | )       | (43                                      | )      | (50                                      | )      |
|                                                                    |   |                                     |    |                                     |   |                                     |   |
| General and administrative expenses                                     |   |                                     |    |                                     |   |                                     |   |
| Garden apartment communities                                            |   | —                                   |    | —                                   |   | —                                   |   |
| Other discontinued operations                                           |   | (22                                      | )       | (11                                      | )      | (40                                      | )      |
| Real estate held for sale                                               |   | (4                                       | )       | —                                   |   | —                                   |   |
|                                                                    |   |                                     |    |                                     |   |                                     |   |
| Total operating costs                                                   |   | (15,484                                  | )       | (60,190                                  | )      | (71,940                                  | )      |
|                                                                    |   |                                     |    |                                     |   |                                     |   |
| Income from discontinued operations before  impairment and gain on sale |   | 21,692                                   |    | 36,483                                   |   | 44,212                                   |   |
|                                                                    |   |                                     |    |                                     |   |                                     |   |
| Impairment of real estate held for sale                                 |   | (19,332                                  | )       | —                                   |   | —                                   |   |
| Gain on sale of discontinued garden apartment  communities              |   | 17,007                                   |    | 1,500                                    |   | —                                   |   |
| Gain on sale of other discontinued operations                           |   | 83,661                                   |    | —                                   |   | —                                   |   |
|                                                                    |   |                                     |    |                                     |   |                                     |   |
| Income from discontinued operations                                     |   | $                                        | 103,028 |                                     | $      | 37,983                                   |   | $ | 44,212 |   |

 

F-16

----

 

**6.             ProForma Financial Information**

 

The following pro forma financial information for the years endedDecember 31, 2002 and 2001 is presented as if the EIG Acquisition, the FactoryOutlet Disposition, the Company’s public offering of 6.9 million shares ofcommon stock in January 2002 (the “Stock Offering”), the Company’s issuance of$250 million of 5.875% senior unsecured notes in June 2002 (the “BondOffering”), the CenterAmerica Acquisition, the sale of the Company’s gardenapartment community portfolio and the consolidation of ERT all occurred onJanuary 1, 2002 and 2001.  Inmanagement’s opinion, all adjustments necessary to reflect the effects of thesetransactions have been made.

 
|                                                   |   | **December 31, 2002**                        |    | **December 31, 2001** |   |
|--------------------------------------------------------|--------|----------------------------------------------|---------|-----------------------|--------|
|                                                   |   | **(in thousands, except per share amounts)** |    |
|                                                   |   |                                         |    |                  |   |
| Rental revenues                                        |   | $                                            | 424,155 |                  | $      | 414,170 |   |
| Expenses                                               |   | (334,807                                     | )       | (320,178              | )      |
| Other (expense) income                                 |   | (73,087                                      | )       | 1,916                 |   |
| Income from continuing  operations                     |   | $                                            | 16,261  |                  | $      | 95,908 |   |
|                                                   |   |                                         |    |                  |   |
| Net Income                                             |   | $                                            | 118,971 |                  | $      | 118,713 |   |
|                                                   |   |                                         |    |                  |   |
| Income from continuing  operations per share - basic   |   | $                                            | 0.02    |                  | $      | 0.78 |   |
| Income from continuing  operations per share - diluted |   | $                                            | 0.04    |                  | $      | 0.78 |   |
|                                                   |   |                                         |    |                  |   |
| Net income per share – basic                      |   | $                                            | 1.10    |                  | $      | 1.02 |   |
| Net income per share – diluted                    |   | $                                            | 1.08    |                  | $      | 1.01 |   |
|                                                   |   |                                         |    |                  |   |
| Average shares outstanding –  basic               |   | 95,649                                       |    | 94,141                |   |
| Average shares outstanding -  diluted                  |   | 98,590                                       |    | 97,081                |   |

 

This pro forma financial information is not necessarily indicative ofwhat the actual results of operations of the Company would have been assumingsuch transactions had been completed as of January 1, 2002 and 2001, nor do theyrepresent the results of operations of future periods.

 

**7.            ****MarketableSecurities**

 

The Companyhas classified all investments in equity securities as available-for-sale.  All investments are recorded at currentmarket value with an offsetting adjustment to stockholders’ equity (inthousands):

 
|                     |   | **December  31, 2002** |   | **December  31, 2001** |   |
|--------------------------|--------|------------------------|--------|------------------------|--------|
| Cost basis               |   | $                      | 973    |                   | $      | 974 |   |
| Unrealized holding gains |   | 1,142                  |   | 913                    |   |
| Fair value               |   | $                      | 2,115  |                   | $      | 1,887 |   |

 

The weightedaverage method is used to determine realized gain or loss on securitiessold.  The fair value of marketablesecurities is based upon quoted market prices as of December 31, 2002 and 2001.

 

F-17

----

 

**8.            ****Mortgagesand Notes Receivable**

 

The Companyhad the following mortgages and notes receivable (in thousands):

 
|                                                                                                                                                                   |   | **December  31, 2002** |   | **December  31, 2001** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|------------------------|--------|
| Notes from development companies, monthly interest from 10% to 12% per  annum.  Maturity dates vary depending  upon the completion or sale of certain properties. |   | $                      | — |                   | $      | 29,336 |   |
| Note from a development company, effective interest rate of 10%,  payable in Canadian dollars.  Due May  2003.                                                    |   | —                 |   | 7,763                  |   |
| Purchase money first mortgages, interest at 7.2% to 10%.  Due 2002 to 2003.                                                                                       |   | 691                    |   | 4,419                  |   |
| Leasehold mortgages, interest at 10% to 12%.Due 2008 to 2010.                                                                                                          |   | 1,093                  |   | 1,170                  |   |
| Other                                                                                                                                                                  |   | 848                    |   | 2,672                  |   |
| Total                                                                                                                                                                  |   | $                      | 2,632  |                   | $      | 45,360 |   |

 

The Companyhad notes receivable in the total amount of Canadian $12.4 million at December31, 2001 (US $7.8 million) from a Canadian company which used the proceeds toacquire a 50% joint venture interest in a mixed-use commercial building knownas “Atrium on the Bay”, and an adjacent building in Toronto, Canada.  The loan was collateralized by the Canadiancompany’s interest in the joint venture. During 2001, Canadian $1.8 million (US $1.3 million) was repaid to theCompany.  Of this amount, US $0.1million was applied to accrued interest and US $1.2 million was applied to theprincipal balance.  The remainingbalance was repaid during 2002.

 

At December 31,2002 and 2001, approximately $0.1 million and $7.6 million, respectively, ofthe other receivables on the accompanying balance sheet represented interestand dividends receivable, most of which represented interest receivable relatedto notes from development companies. The Company has assessed its ability to collect these receivables andexpects to realize interest and principal in accordance with the book value ofthe notes.

 

**9.             ERTDevelopment Corporation**

 

In 1995, ERTwas organized to finance, acquire, develop, hold and sell real estate in theshort-term for capital gains and/or to receive fee income.  Until July 1, 2001, the Company owned 100%of the outstanding preferred shares of ERT and an officer and director of theCompany owned all the common shares. The preferred shares were entitled to receive 95% of dividends, if any,and bore 100% of the losses.  Cashrequirements to facilitate ERT’s transactions were obtained primarily throughborrowings from the Company.  As of July1, 2001, the Company purchased all of the common shares of ERT, and ERT is nowa wholly owned subsidiary of the Company. In 2001, ERT elected to become a “taxable REIT subsidiary” of theCompany under the tax rules applicable to REITs.

 

In 2001 and2000, the equity in the losses of ERT recorded by the Company was $4.3 millionand $17.9 million, respectively.

 

Summary unaudited financial information for ERT is as follows (inthousands):

** **

| **Condensed  Statements of Income**                    |   | **Year Ended  December 31, 2001** |   | **Year Ended  December 31, 2000** |   |
|--------------------------------------------------------|--------|-----------------------------------|--------|-----------------------------------|--------|
| Revenues                                               |   | $                                 | 12,873 |                              | $      | 27,060 |   |
| Interest expense to New Plan Excel Realty  Trust, Inc. |   | (4,818                            | )      | (18,499                           | )      |
| Other expenses                                         |   | (12,368                           | )      | (26,428                           | )      |
| Net loss                                               |   | $                                 | (4,313 | )                                 | $      | (17,867 | ) |

 

F-18

----

 

The ERTcondensed statement of income for the year ended December 31, 2001 onlyreflects six months of revenue and expense as, effective July 1, 2001, ERT hasbeen consolidated with the Company.

 

ERT has awholly owned subsidiary, Pointe Orlando Development Company, as well as aninvestment in joint venture partnerships related to retail and developmentprojects in Frisco, Texas (The Centre at Preston Ridge).  In addition, ERT has a retail anddevelopment project, Vail Ranch II, in Temecula, California.  ERT accounts for its investments in PrestonRidge and Vail Ranch II using the equity method.

 

On January 11,2001, ERT acquired Stein Mart Center, a 113,000 square foot shopping centerlocated in Poway, California, from Wilton Partners in consideration of $4.9million of notes receivable and interest due to ERT.  This property was subsequently sold in the fourth quarter offiscal 2002 for approximately $7.1 million.

 

On May 18,2001, The Ellman Companies repaid to ERT approximately $18.9 million ofoutstanding notes receivable and accrued interest on two properties (MesaPavilions and The Groves). Approximately $2.1 million of the proceeds consisted of a notereceivable secured by certain interests in the Superior Towne Center, aproperty for which the Company also held a note receivable.  As of December 31, 2002, no amounts remainedoutstanding under these notes receivable.

 

F-19

----

 

**10.          Investments in/Advances toUnconsolidated Ventures**

 

At December31, 2002, the Company had investments in five joint ventures: (1) BenbrookeVentures, (2) CA New Plan Venture Fund, (3) Clearwater Mall, LLC, (4) VailRanch II and (5) The Centre at Preston Ridge, Phase 1, 2 and 3.  The latter two investments were acquired asa result of the consolidation of ERT on July 1, 2001.  The Company accounts for these investments using the equitymethod.  The following table summarizesthe joint venture projects as of December 31, 2002 and 2001 (in thousands).

 
|                                   |   |            |   |                                                   |   |                                               |   | **Percent  Ownership** |                   | **Investment in/Advances to as of** |                   |
|----------------------------------------|--------|-----------------|--------|--------------------------------------------------------|--------|----------------------------------------------------|--------|------------------------|------------------------|-------------------------------------|------------------------|
|                                   |   |            |   |                                                   |   |                                               |   |                   | **December 31,  2002** |                                | **December 31,  2001** |   |
|                                   |   | **City**        |   | **State**                                              |   | **JV Partner**                                     |   |                   |                   |                                |
|                                   |   |            |   |                                                   |   |                                               |   |                   |                   |                                |                   |   |   |
| **Benbrooke  Ventures**(1)             |   |            |   |                                                   |   |                                               |   |                   |                   |                                |                   |   |   |
| Rodney  Village                        |   | Dover           |   | DE                                                     |   | Benbrooke Partners                                 |   | 50%                    |                   | *                                   |                   | * |   |
| Fruitland  Plaza                       |   | Fruitland       |   | MD                                                     |   | Benbrooke Partners                                 |   | 50%                    |                   | *                                   |                   | * |   |
| Fredricksburg                          |   | Spotsylvania    |   | VA                                                     |   | Benbrooke Partners                                 |   | 50%                    |                   | *                                   |                   | * |   |
|                                   |   |            |   |                                                   |   |                                               |   |                   |                   | $                                   | 8,894                  |   | $ | — |   |
|                                   |   |            |   |                                                   |   |                                               |   |                   |                   |                                |                   |   |   |
| **CA New  Plan Venture Fund**(2)       |   |            |   |                                                   |   |                                               |   |                   |                   |                                |                   |   |   |
| Ventura  Downs                         |   | Kissimmee       |   | FL                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Flamingo  Falls                        |   | Pembroke Pines  |   | FL                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Sarasota  Village                      |   | Sarasota        |   | FL                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Atlantic  Plaza                        |   | Satellite Beach |   | FL                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Mableton  Walk                         |   | Mableton        |   | GA                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Raymond  Road                          |   | Jackson         |   | MS                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Mint  Hill Festival                    |   | Charlotte       |   | NC                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Ladera                                 |   | Albuquerque     |   | NM                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Harwood  Central Village               |   | Bedford         |   | TX                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Odessa-Winwood  Town Center            |   | Odessa          |   | TX                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Ridglea  Plaza                         |   | Fort Worth      |   | TX                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Marketplace  at Wycliff – Phase 1 |   | Lake Worth      |   | FL                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Marketplace  at Wycliff – Phase 2 |   | Lake Worth      |   | FL                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Spring  Valley Crossing                |   | Dallas          |   | TX                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
| Windvale                               |   | The Woodlands   |   | TX                                                     |   | Major U.S. Pension Fund                            |   | 10%                    |                   | *                                   |                   | * |   |
|                                   |   |            |   |                                                   |   |                                               |   |                   |                   | $                                   | 6,371                  |   | $ | — |   |
|                                   |   |            |   |                                                   |   |                                               |   |                   |                   |                                |                   |   |   |
| **Clearwater  Mall, LLC**(3)           |   |            |   |                                                   |   |                                               |   |                   |                   |                                |                   |   |   |
| Clearwater  Mall                       |   | Clearwater      |   | FL                                                     |   | The Sembler Company                                |   | 50%                    |                   | $                                   | 4,007                  |   | $ | — |   |
|                                   |   |            |   |                                                   |   |                                               |   |                   |                   |                                |                   |   |   |
| **Vail  Ranch II**(4)                  |   |            |   |                                                   |   |                                               |   |                   |                   |                                |                   |   |   |
| Vail  Ranch II                         |   | Temecula        |   | CA                                                     |   | Land Grand Development                             |   | 50%                    |                   | $                                   | 1,256                  |   | $ | 1,152 |   |
|                                   |   |            |   |                                                   |   |                                               |   |                   |                   |                                |                   |   |   |
| **The  Centre at Preston Ridge**       |   |            |   |                                                   |   |                                               |   |                   |                   |                                |                   |   |   |
| Phase  1 (5)                           |   | Frisco          |   | TX                                                     |   | Foreign Investor /  George Allen / Milton Schaffer |   | 25%                    |                   | *                                   |                   | * |   |
| Phase  2 (6)                           |   | Frisco          |   | TX                                                     |   | George Allen/Milton  Schaffer                      |   | 50%                    |                   | *                                   |                   | * |   |
| Phase  3 (6)                           |   | Frisco          |   | TX                                                     |   | George Allen / Milton  Schaffer                    |   | 50%                    |                   | *                                   |                   | * |   |
|                                   |   |            |   |                                                   |   |                                               |   |                   |                   | $                                   | 10,706                 |   | $ | 40,724 |   |
|                                   |   |            |   |                                                   |   |                                               |   |                   |                   |                                |                   |   |   |
|                                   |   |            |   | **Investments in/Advances to Unconsolidated Ventures** |   | $                                                  | 31,234 |                   | $                      | 41,876                              |                   |

 

----

*                     Multiple propertiesheld in a single investment joint venture.

(1)                                  The Company receives an 8.5% preferred returnon its investment.

(2)           The Company receives increasedparticipation after a 12% IRR.

(3)                                  The Company receives a 9.5% preferred returnon its investment.

(4)           The Company receives a 12% preferredreturn on its investment.

(5)           The Company receives increasedparticipation after a 10% return on its investment.

(6)                                  The Company receives a 10% preferred return onits investment.  Included in theCompany’s equity investment balance is approximately $3.0 million ofoutstanding notes receivable.

 

F-20

----

 

Combinedsummary unaudited financial information for the Company’s investmentsin/advances to unconsolidated ventures is as follows (in thousands):

 
| **Condensed  Combined Balance Sheets**                   |   | **December  31, 2002** |    | **December  31, 2001** |   |
|----------------------------------------------------------|--------|------------------------|---------|------------------------|--------|
| Cash and cash equivalents                                |   | $                      | 12,072  |                   | $      | 6,421 |   |
| Receivables                                              |   | 4,569                  |    | 1,336                  |   |
| Property and equipment, net of accumulated  depreciation |   | 270,001                |    | 120,861                |   |
| Other assets, net of accumulated  amortization           |   | 8,265                  |    | 42,034                 |   |
| Total Assets                                             |   | $                      | 294,907 |                   | $      | 170,652 |   |
|                                                     |   |                   |    |                   |   |
| Notes payable                                            |   | $                      | 191,971 |                   | $      | 88,534 |   |
| Accrued interest                                         |   | 882                    |    | 1,117                  |   |
| Other liabilities                                        |   | 6,882                  |    | 756                    |   |
| Total liabilities                                        |   | 199,735                |    | 90,407                 |   |
| Total partners’ capital                             |   | 95,172                 |    | 80,245                 |   |
| Total liabilities and partners’ capital             |   | $                      | 294,907 |                   | $      | 170,652 |   |
|                                                     |   |                   |    |                   |   |
| Company’s investment in / advances to               |   | $                      | 31,234  |                   | $      | 41,876 |   |

** **
| **Condensed  Combined Statements of Income** |   | **Year Ended  December 31, 2002** |       | **Year Ended  December 31, 2001** |       |
|----------------------------------------------|--------|-----------------------------------|------------|-----------------------------------|------------|
|                                         |   |                              | ** ** |                              | ** ** |
| Rental revenue                               |   | $                                 | 32,840     |                              | $          | 20,923 |   |
| Operating expenses                           |   | (4,906                            | )          | (3,916                            | )          |
| Interest expense                             |   | (10,052                           | )          | (7,090                            | )          |
| Other expenses, net                          |   | (8,688                            | )          | (8,864                            | )          |
| Net income                                   |   | $                                 | 9,194      |                              | $          | 1,053 |   |
|                                         |   |                              |       |                              |       |
| Company’s share of net income (1)       |   | $                                 | 5,244      |                              | $          | 852 |   |

 

----

(1)  Includes preferred returnsof $3,761 and $325 as of December 31, 2002 and 2001, respectively.

 

The followingis a brief summary of the joint venture obligations that the Company has as ofDecember 31, 2002:

 

•      *BenbrookeVentures. *The Company has aninvestment in a joint venture which owns three community and neighborhoodshopping centers located in Dover, Delaware; Fruitland, Maryland; andSpotsylvania, Virginia.  Under the termsof this joint venture, the Company has a 50% interest in the venture; however,the Company has agreed to contribute 80% of any capital required by the jointventure.   The Company does not,however, expect that any significant capital contributions will be required.

 

•      *CA New PlanVenture Fund*.  In connectionwith the CenterAmerica Acquisition, the Company assumed obligations under ajoint venture agreement with a third-party institutional investor.  The joint venture had loans outstanding ofapproximately $97.7 million as of December 31, 2002.  Under the terms of this joint venture, the Company has a 10%interest in the venture, and is responsible for contributing its pro rata shareof any capital that might be required by the joint venture, up to a maximumamount of $8.3 million, of which approximately $5.7 million had beencontributed by the Company as of December 31, 2002.  The Company anticipates contributing the remaining $2.6 millionduring 2003.

 

F-21

----

 

•      *Clearwater Mall, LLC*.  In October 2002, the Company contributed itsClearwater Mall property to this joint venture, which is currently redevelopingthe property.  The joint venture hadloans outstanding of approximately $11.4 million as of December 31, 2002.  Under the terms of this joint venture, theCompany has a 50% interest in the venture; however, the Company has agreed tocontribute 75% of any capital that might be required by the joint venture.  The Company does not, however, expect thatany significant capital contributions will be required.

 

•                  *PrestonRidge Joint Venture*.  TheCompany has investments in various joint ventures that own either a communityshopping center (The Centre at Preston Ridge) or undeveloped land in Frisco,Texas.

 

•                  *Phase1. *Under the terms of thisjoint venture, the Company has a 25% interest in a venture that owns thecommunity shopping center.  TheCompany’s ownership interest was reduced to 25% from 50% on November 25, 2002when a U.S. partnership comprised substantially of foreign investors purchaseda 70% interest in the joint venture. The Company has agreed to contribute its pro rata share of any capitalthat might be required by the joint venture; however, the Company does notexpect that any significant capital contributions will be required.  The joint venture had loans outstanding ofapproximately $70.0 million as of December 31, 2002.

 

•                  *Phase 2.*  The Company has a 50% investment in a jointventure that owns approximately 38.6 acres of undeveloped land in Frisco,Texas.  The Company has agreed tocontribute its pro rata share of any capital that might be required by thejoint venture; however, the Company does not expect that any significantcapital contributions will be required. As of December 31, 2002, the joint venture had a mortgage loanoutstanding of approximately $3.0 million, payable to the Company.

 

•                  *Phase 3.*  The Company has a 50% investment in a jointventure that owns approximately 5.4 acres of undeveloped land in Frisco,Texas.  The Company has agreed tocontribute its pro rata share of any capital that might be required by thejoint venture; however, the Company does not expect that any significantcapital contributions will be required. The joint venture had loans outstanding of approximately $0.9 million asof December 31, 2002.

 

•      *Vail RanchII Joint Venture*.  TheCompany has a 50% interest in a joint venture that owns a community shoppingcenter in Temecula, California that is in the final stages of development.  The joint venture had third-party loansoutstanding of approximately $8.9 million as of December 31, 2002.  The Company currently guarantees interestpayments under the loan (which rate of interest is the prime rate of thelender), as well as the payment of taxes, insurance and general maintenance andupkeep on the property.  The Company hasagreed to contribute its pro rata share of any capital that might be requiredby the joint venture; however, the Company does not expect that any significantcapital contributions will be required.

 

F-22

----

 

**11.          Debt Obligations**

 

As of December31, 2002 and 2001, the Company had debt obligations under various arrangementswith financial institutions as follows (in thousands):

 
|                                               |   | **Maximum  Amount********Available** |                         | **Carrying Value as of** |                   | **Stated  Interest********Rates** |   | **Scheduled  Maturity********Date** |       |
|----------------------------------------------------|--------|--------------------------------------|------------------------------|--------------------------|------------------------|-----------------------------------|--------|-------------------------------------|------------|
|                                               |   |                                 | **December 31,********2002** |                     | **December 31,  2001** |                              |   |
| CREDIT FACILITIES                                  |   |                                 |                         |                     |                   |                              |   |                                |       |   |   |
| Bank of New York $122.5 Million Revolving Facility |   | $                                    | —                       |                     | $                      | —                            |   | $                                   | 20,000     |   | LIBOR + 87.5 bp(1) |   | N/A |   |
| Fleet Revolving Facility                           |   | 350,000                              |                         | 75,000                   |                   | —                            |   | LIBOR + 105 bp(1)                   |       | April 2005 |   |
| Fleet Term Loan #1                                 |   | —                               |                         | —                   |                   | 75,000                            |   | LIBOR + 115 bp(1)                   |       | N/A |   |
| Fleet Term Loan #2                                 |   | 155,000                              |                         | 155,000                  |                   | —                            |   | LIBOR + 115 bp(1)                   |       | December 2003 |   |
| Total Credit Facilities                            |   | $                                    | 505,000                      |                     | $                      | 230,000                           |   | $                                   | 95,000     |   |   |   |   |   |
|                                               |   |                                 |                         |                     |                   |                              |   |                                |       |   |   |
| MORTGAGES PAYABLE                                  |   |                                 |                         |                     |                   |                              |   |                                |       |   |   |
| Fixed  Rate Mortgages                              |   |                                 |                         | $                        | 529,256                |                              | $      | 210,572                             |       | 6.670% — 9.625% |   | 2003 - 2028 |   |
| Variable  Rate Mortgages                           |   |                                 |                         | 121,541                  |                   | 24,801                            |   | Variable(2)                         |       | 2003 - 2011 |   |
| Total Mortgages                                    |   |                                 |                         | 650,797                  |                   | 235,373                           |   |                                |       |   |   |
| Net  unamortized premium                           |   |                                 |                         | 20,403                   |                   | 6,063                             |   |                                |       |   |   |
| Total Mortgages, net                               |   |                                 |                         | $                        | 671,200                |                              | $      | 241,436                             |       |   |   |   |   |
|                                               |   |                                 |                         |                     |                   |                              |   |                                |       |   |   |
| NOTES PAYABLE                                      |   |                                 |                         | $                        | —                 |                              | $      | 81,000                              |       | 6.800% |   | N/A |   |
| 6.80% unsecured notes                              |   |                                 |                         | 49,000                   |                   | 49,000                            |   | 7.330%                              |       | November 2003 |   |
| 7.33% unsecured notes                              |   |                                 |                         | 75,000                   |                   | 75,000                            |   | 6.875%                              |       | October 2004 |   |
| 6.88% unsecured notes                              |   |                                 |                         | 100,000                  |                   | 100,000                           |   | 7.750%                              |       | April 2005 |   |
| 7.75%   unsecured notes                       |   |                                 |                         | 30,000                   |                   | 30,000                            |   | 7.350%                              |       | June 2007 |   |
| 7.35% unsecured notes                              |   |                                 |                         | 250,000                  |                   | —                            |   | 5.875%                              |       | June 2007 |   |
| 5.88% unsecured notes                              |   |                                 |                         | 150,000                  |                   | 150,000                           |   | 7.400%                              |       | September 2009 |   |
| 7.40% unsecured notes                              |   |                                 |                         | 10,000                   |                   | 10,000                            |   | 7.970%                              |       | August 2026 |   |
| 7.97% unsecured notes                              |   |                                 |                         | 25,000                   |                   | 25,000                            |   | 7.650%                              |       | November 2026 |   |
| 7.65% unsecured notes                              |   |                                 |                         | 10,000                   |                   | 10,000                            |   | 7.680%                              |       | November 2026 |   |
| 7.68% unsecured notes                              |   |                                 |                         | 10,000                   |                   | 10,000                            |   | 7.680%                              |       | November 2026 |   |
| 7.68% unsecured notes                              |   |                                 |                         | 25,000                   |                   | 25,000                            |   | 6.900%                              |       | February 2028 |   |
| 6.90% unsecured notes                              |   |                                 |                         | 25,000                   |                   | 25,000                            |   | 6.900%                              |       | February 2028 |   |
| 6.90% unsecured notes                              |   |                                 |                         | 25,000                   |                   | 25,000                            |   | 7.500%                              |       | July 2029 |   |
| 7.50% unsecured notes                              |   |                                 |                         | 784,000                  |                   | 615,000                           |   |                                |       |   |   |
| Total Notes                                        |   |                                 |                         | (2,222                   | )                      | (1,752                            | )      |                                |       |   |   |
| Net unamortized discount                           |   |                                 |                         | 2,149                    |                   | —                            |   |                                |       |   |   |
| Impact of reverse swap agreement                   |   |                                 |                         | $                        | 783,927                |                              | $      | 613,248                             |       |   |   |   |   |
| Total Notes, net                                   |   |                                 |                         |                     |                   |                              |   |                                |       |   |   |
|                                               |   |                                 |                         | $                        | 28,349                 |                              | — |                                | Variable   |   | January 2003 |   |
| NOTES PAYABLE, OTHER (3)                           |   |                                 |                         |                     |                   |                              |   |                                |       |   |   |
|                                               |   |                                 |                         | $                        | 28,866                 |                              | $      | 29,170                              |       | 7.500% |   | June 2031 |   |
| CAPITAL LEASES                                     |   |                                 |                         |                     |                   |                              |   |                                |       |   |   |
|                                               |   |                                 |                         | $                        | 1,742,342              |                              | $      | 978,854                             | ** ** |   | ** ** |   |   |
| TOTAL DEBT                                         |   |                                 |                         |                     |                   |                              |   |                                | ** ** |   | ** ** |

 

----

(1)               The Company incurs interest using the 30-dayLIBOR rate which was 1.38% as of December 31, 2002.

(2)               As determined by the applicable loanagreement, the Company incurs interest on these obligations using either the 30day LIBOR rate, Moody’s A Corporate Bond Index or a rate determined by theappropriate remarketing agent plus spreads ranging from 125 to 375 basispoints.

(3)               Represents a promissory note issued inconnection with the EIG Acquisition. The note is scheduled to be repaid on January 2, 2003 and is securedwith deposits held in escrow.  The notebears interest at a rate equivalent to that at which the escrow funds areearning interest.

 

On March 1,2002, the Company entered into a new $125 million senior unsecured term loanfacility (“Fleet Term Loan #2”).  Atthat time, the facility matured on March 1, 2003 and contained covenantssubstantially similar to those that were contained in the Company’s senior unsecuredcredit facilities.  The proceeds of theloan were used to finance a portion of the CenterAmerica Acquisition.  On November 26, 2002, the Company amendedthis loan, increasing the borrowing base to $155.0 million and extending thematurity date until December 2003.  TheCompany also amended the loan’s covenants to be consistent with those containedin the Fleet Revolving Facility.  As ofDecember 31, 2002, the Fleet Term Loan #2 bears interest at LIBOR plus 115basis points, based on the Company’s current debt rating.

 

F-23

----

 

On April 26,2002, the Company entered into a $350 million senior unsecured revolving creditfacility (“Fleet Revolving Facility”), refinancing its then existing revolvingcredit facilities.  The Fleet RevolvingFacility bears interest at LIBOR plus 105 basis points and matures on April 25,2005, with a one-year extension option.

 

On May 8,2002, the Company extended the maturity on its then existing $50.0 millionsenior unsecured term loan facility (“Fleet Term Loan #1”), at original terms,until November 17, 2002.  On October 7,2002, the Company repaid the $50.0 million outstanding, and that loan wascancelled and retired.

 

The FleetRevolving Facility and the Fleet Term Loan #2 require that the Company maintaincertain financial coverage ratios. These coverage ratios currently include:

 

•                  net operatingincome of unencumbered assets to interest on unsecured debt ratio of at least2:1

•                  EBITDA to fixedcharges ratio of at least 1.75:1

•                  minimum tangiblenet worth of approximately $1.3 billion

•                  total debt tototal adjusted assets of no more than 55%

•                  total secureddebt to total adjusted assets of no more than 40%

•                  unsecured debtto unencumbered assets value ratio of no more than 55%

•                  book value ofancillary assets to total adjusted assets of no more than 25%

•                  book value ofnew construction assets to total adjusted assets of no more than 15%

•                  FFO payout rationo greater than 95%

 

On June 11,2002, the Company priced an offering of $250 million of 5.875% senior unsecurednotes due June 15, 2007.  Interest onthe notes will be payable semi-annually on June 15 and December 15.  The notes were priced at 99.66% of par valueto yield 5.955%.  Net proceeds from theoffering were used to repay a portion of the borrowings under the FleetRevolving Facility.

 

As of December 31, 2002, future expected/scheduled maturities ofoutstanding long-term debt obligations were as follows (in thousands):

 
| 2003                                                             |   | $         | 364,833   |   |
|------------------------------------------------------------------|--------|-----------|-----------|--------|
| 2004                                                             |   | 125,658   |      |
| 2005                                                             |   | 223,713   |      |
| 2006                                                             |   | 28,939    |      |
| 2007                                                             |   | 307,011   |      |
| Thereafter                                                       |   | 671,858   |      |
| Total debt maturities                                            |   | 1,722,012 |      |
|                                                             |   |      |      |
| Net unamortized premiums on  mortgages                           |   | 20,403    |      |
| Net unamortized discount on  notes                               |   | (2,222    | )         |
| Fair value adjustment on debt  subject to reverse swap agreement |   | 2,149     |      |
|                                                             |   |      |      |
| Total debt obligations                                           |   | $         | 1,742,342 |   |

 

F-24

----

 

**12.          OtherLiabilities**

 

Otherliabilities are comprised of the following (in thousands):

 
|                                                 |   | **December  31,  2002** |    | **December  31,  2001** |   |
|------------------------------------------------------|--------|-------------------------|---------|-------------------------|--------|
|                                                 |   |                    |    |                    |   |
| Property and other taxes payable                     |   | $                       | 35,226  |                    | $      | 14,949 |   |
| Interest payable                                     |   | 12,891                  |    | 11,210                  |   |
| Accounts payable                                     |   | 8,603                   |    | 6,077                   |   |
| Accrued construction costs                           |   | 9,406                   |    | 437                     |   |
| Deferred rent expense and rents received in  advance |   | 1,388                   |    | 3,880                   |   |
| Amounts due seller of property                       |   | 9,031                   |    | 1,568                   |   |
| Deferred gain                                        |   | —                  |    | 17,007                  |   |
| Accrued professional and personnel costs             |   | 10,405                  |    | 5,758                   |   |
| Accrued insurance                                    |   | 3,525                   |    | 4,894                   |   |
| Acquisition / disposition costs                      |   | 7,914                   |    | 3,346                   |   |
| Other                                                |   | 8,301                   |    | 11,856                  |   |
| Total                                                |   | $                       | 106,690 |                    | $      | 80,982 |   |

 

**13.****                               RiskManagement and Use of Financial Instruments**

 

Risk Management

 

In the normalcourse of its on-going business operations, the Company encounters economicrisk.  There are three main componentsof economic risk: interest rate risk, credit risk and market risk.  The Company is subject to interest rate riskon its interest-bearing liabilities. Credit risk is the risk of default on the Company’s operations andtenants’ inability or unwillingness to make contractually required payments.  Market risk changes in the value of loansdue to changes in interest rates or other market factors, including the rate ofprepayments of principal, the value of the collateral underlying loans and thevaluation of properties held by the Company.

 

Use of Derivative Financial Instruments

 

The Company’suse of derivative instruments is primarily limited to the utilization ofinterest rate agreements or other instruments to manage interest rate riskexposures and not for speculative purposes. The principal objective of such arrangements is to minimize the risksand/or costs associated with the Company’s operating and financial structure,as well as to hedge specific transactions. The counterparties to these arrangements are major financialinstitutions with which the Company and its affiliates may also have otherfinancial relationships.  The Company ispotentially exposed to credit loss in the event of non-performance by thesecounterparties.  However, because oftheir high credit ratings, the Company does not anticipate that any of thecounterparties will fail to meet these obligations as they come due.

 

During thethree months ended June 30, 2002, in order to hedge a portion of the expectedcash flows on the anticipated long-term fixed rate borrowing, the Companyentered into certain derivative instruments based on LIBOR for an aggregate ofapproximately $90.0 million in notional amount.  Under these agreements, the Company would generally settle theagreement upon consummation of the forecasted issuance of debt where upon theCompany would receive additional cash flow settlement if interest rates roseand pay cash if interest rates fell.  OnJune 11, 2002, upon consummation of the 5.875% senior unsecured note issuance,the Company settled these agreements for approximately $1.9 million.  The effects of such payments are deferred inaccumulated other comprehensive income and will be amortized into earnings asan increase in effective interest expense over the term of the fixed rateborrowing.

 

F-25

----

 

The followingtable summarizes the terms and fair values of the Company’s derivativefinancial instruments at December 31, 2002 (in thousands).  The notional amount at December 31, 2002provides an indication of the extent of the Company’s involvement in theseinstruments at that time, but does not represent exposure to credit, interestrate or market risks.

 
| **Hedge  Product**   |   | **Hedge Type** |   | **Notional  Amount** |    | **Strike** |   | **Maturity** |     | **Fair Value** |   |
|----------------------|--------|----------------|--------|----------------------|---------|------------|--------|--------------|----------|----------------|--------|
| Cap                  |   | Cash Flow      |   | $                    | 110,500 |       | 8.000  | %            | 07/01/03 |           | $      | — |   |
| Reverse Arrears Swap |   | Fair Value     |   | 50,000               |    | 4.357      | %      | 10/15/04     |     | 2,149          |   |
|                 |   |           |   |                 |    |       |   |         |     | $              | 2,149  |   |
|                      |        |                |        |                      |         |            |        |              |          |                |        |  |  |

 

On December31, 2002, the derivative instruments were reported at their fair value as OtherAssets of $2.1 million.  Additionally,the reverse arrears swap debt of approximately $2.1 million at December 31,2002 was reported as a component of the note payable to which it wasassigned.  As of December 31, 2002,there were $1.7 million in deferred losses represented in OCI relating to theunamortized portion of the premium and on the interest rate cap.

 

Over time, theunrealized gains and losses held in OCI will be reclassified to earnings in thesame period(s) in which the hedged items are recognized in earnings.  The current balance held in OCI is expectedto be reclassified to earnings over the lives of the current hedginginstruments, or for realized losses on forecasted debt transactions, over therelated term of the debt obligation, as applicable.

 

Concentration of Credit Risk

 

Concentrationsof credit risk arise when a number of borrowers or tenants related to theCompany’s investments or rental operations are engaged in similar businessactivities, or are located in the same geographic region, or have similareconomic features that would cause their inability to meet contractual obligations,including those to the Company, to be similarly affected.  The Company regularly monitors its tenantbase to assess potential concentrations of credit risk.  Management believes the current credit riskportfolio is reasonably well diversified and does not contain any unusualconcentration of credit risk.   Notenant exceeds 5% of annual reported rental income.

 

On January 22,2002, Kmart Corporation (“Kmart”), the Company’s second largest tenant, filedfor bankruptcy protection under Chapter 11 of the federal bankruptcylaws.  Since the bankruptcy filing (i)leases at seven of the Company’s locations where Kmart is a lessee wererejected, (ii) Kmart indicated that it intends to close six additionallocations at the Company’s properties on or about March 31, 2003 and (iii) theCompany entered into agreements with Kmart to reduce the rent at four Companystore locations effective July 1, 2002 and at six Company store locationseffective April 1, 2003; however, two of the store locations where rent reductionswere effective July 1, 2002 are included in the six store locations scheduledto close on or about March 31, 2003, resulting in eight store locations wherethe Company has agreed to rent reductions.

 

As of December31, 2002, Kmart was a lessee at 36 locations (excluding the seven previouslyrejected locations) that contain a total of 3.3 million square feet of grossleasable area, or approximately 6.5% of the Company’s total gross leasablearea.  As of December 31, 2002, Kmart’sannualized base rent for these 36 locations was $13.7 million, or approximately$4.09 per square foot, not taking into account the rental reductions agreed toat the six locations effective April 1, 2003, which are not material.

 

**14.          MinorityInterest in Consolidated Partnership**

 

In 1995, ERP,a consolidated entity, was formed to own certain real estate properties.  A wholly owned subsidiary of the Company isthe sole general partner of ERP and is entitled to receive 99% of all netincome and gains before depreciation, if any, after the limited partnersreceive their net income and gain allocations. Properties have been contributed to ERP in exchange for limitedpartnership units (which may be redeemed at stipulated prices for cash or theissuance of the Company common shares at the Company’s option), cash and theassumption of mortgage debt.  Theseunits can convert to Company 

 

F-26

----

 

shares at exchange ratios from1.0 to 1.4 Company shares for each unit. ERP unit information is summarized as follows:

** **
|                             |   | **Total  Units** |   | **Company  Units** |   | **Limited  Partner  Units** |   |
|----------------------------------|--------|------------------|--------|--------------------|--------|-----------------------------|--------|
| Outstanding at December 31, 1999 |   | 3,256,457        |   | 2,163,743          |   | 1,092,714                   |   |
| Issued                           |   | —           |   | —             |   | —                      |   |
| Redeemed                         |   | —           |   | —             |   | —                      |   |
|                             |   |             |   |               |   |                        |   |
| Outstanding at December 31, 2000 |   | 3,256,457        |   | 2,163,743          |   | 1,092,714                   |   |
| Issued                           |   | 15,951           |   | 15,951             |   | —                      |   |
| Redeemed                         |   | (15,951          | )      | —             |   | (15,951                     | )      |
|                             |   |             |   |               |   |                        |   |
| Outstanding at December 31, 2001 |   | 3,256,457        |   | 2,179,694          |   | 1,076,763                   |   |
| Issued (1)                       |   | 2,632,439        |   | 1,250,830          |   | 1,381,609                   |   |
| Redeemed                         |   | (323,830         | )      | —             |   | (323,830                    | )      |
|                             |   |             |   |               |   |                        |   |
| Outstanding at December 31, 2002 |   | 5,565,066        |   | 3,430,524          |   | 2,134,542                   |   |

 

----

(1) Includes units issued inconnection with the EIG Acquisition of approximately 0.9 million and 1.4million for the Company and Limited Partner, respectively.

 

**15.          Stockholders’Equity**

 

Common Stock

 

To maintainits qualification as a REIT, not more than 50% in value of the outstandingshares of the Company may be owned, directly or indirectly, by five or fewerindividuals at any time during the last half of any taxable year of theCompany, other than its initial taxable year (defined to include certainentities), applying certain constructive ownership rules.  To help ensure that the Company will notfail this test, the Company’s Articles of Incorporation provide for, amongother things, certain restrictions on the transfer of common stock to preventfurther concentration of stock ownership. Moreover, to evidence compliance with these requirements, the Companymust maintain records that disclose the actual ownership of its outstandingcommon stock and will demand written statements each year from the holders ofrecord of designated percentages of its common stock requesting the disclosureof the beneficial owners of such common stock.

 

Common Stock Repurchases

 

In October 1999,the Company commenced a program to repurchase up to $75.0 million of theCompany’s outstanding common stock from time to time through periodic openmarket transactions or through privately negotiated transactions.  Through December 31, 2002, approximately2,150,000 shares have been repurchased and retired at an average purchase priceof $15.30 per share.  Of this amount,approximately 50,000 and 119,000 shares were repurchased and retired in 2002and 2001, respectively.

 

F-27

----

 

Preferred Stock

 

On July 15,2002, the Company redeemed all outstanding shares of its 8 1⁄2% Series ACumulative Convertible Preferred Stock (the “Preferred A Shares”).  Each Preferred A Share was redeemed for1.24384 shares of common stock, and resulted in the issuance of approximately1.9 million shares of common stock.  Theredemption occurred at a discount to the carrying value of the preferred stockaggregating approximately $7.0 million based on shares redeemed by the Companyat the closing price at redemption. Such discount was reflected as an adjustment to earnings attributable tocommon stockholders.

 

As of December31, 2002 and 2001, there were 0 and 1,507,000 Preferred A Shares outstanding,respectively.  Holders of the PreferredA Shares were entitled to an annual distribution of $2.125 per share and theshares were convertible into common shares at a price of $20.10 per share.  The Preferred A Shares ranked senior to theCompany’s common stock and were on parity with the other preferred shares withrespect to the payment of dividends and amounts payable upon liquidation,dissolution or winding down of the Company.

 

The Companyhas outstanding 6,300,000 depositary shares each representing 1/10 of a shareof 8 5/8% Series B Cumulative Redeemable Preferred Stock (the “Preferred BShares”).  Holders of the Preferred BShares are entitled to an annual dividend equal to $2.15625, payable quarterly.

 

The Companyalso has 1,500,000 depositary shares outstanding, each representing a 1/10fractional interest in a share of 7.8% Series D Cumulative Voting Step-UpPremium Rate Preferred Stock (the “Preferred D Shares”), which are redeemableat the option of the Company on or after June 15, 2007 at a liquidationpreference of $500 per share.  ThePreferred D Shares pay dividends quarterly at the rate of 7.8% of theliquidation preference per annum through September 2012 and at the rate of 9.8%of the liquidation preference per annum thereafter.

 

Options  

 

The Companyhas two active stock option plans (the “Plans”) and four option plans underwhich grants are no longer made. Pursuant to the six plans, options have been granted to purchase sharesof common stock of the Company (the “Shares”) to officers, directors, andcertain employees of the Company.  Thetwo active plans are the 1993 Employee Plan (the “1993 Plan”) and the 1994Directors Plan (the “1994 Plan”).  Theexercise price of a share pursuant to each of the Plans is required to be noless than the fair market value of a share on the date of grant.  The vesting schedule for the 1993 Plan isdetermined at the time of grant and the grants under the 1994 Plan vest 100% atthe grant date.  As of December 31, 2002,approximately 5.2 million option shares were available for grant under the 1993Plan; however, no options may be granted under the 1993 Plan after May 3,2003.    As of December 31, 2002,approximately 0.1 million option shares were available for grant under the 1994Plan.  The options outstanding atDecember 31, 2002 had exercise prices from $12.8125 to $25.25 and a weightedaverage remaining contractual life of approximately six years.  The total option shares, under all sixplans, exercisable at December 31, 2002, is approximately 2.4 million.

 

F-28

----

 

Stock optionactivity is summarized as follows:

 
|                                     |   | **Option  Shares** |   | **Weighted  Average  Exercise Price  Per Share** |   |
|------------------------------------------|--------|--------------------|--------|--------------------------------------------------|--------|
|                                     |   |               |   |                                             |   |
| Outstanding at December 31, 1999         |   | 5,240,228          |   | $                                                | 21.62  |   |
| Granted                                  |   | 1,992,621          |   | $                                                | 12.98  |   |
| Exercised                                |   | (515,121           | )      | $                                                | 12.73  |   |
| Forfeited                                |   | (1,015,020         | )      | $                                                | 20.91  |   |
| Outstanding at December 31, 2000         |   | 5,702,708          |   | $                                                | 19.53  |   |
|                                     |   |               |   |                                             |   |
| Granted                                  |   | 746,250            |   | $                                                | 15.58  |   |
| Exercised                                |   | (134,488           | )      | $                                                | 15.13  |   |
| Forfeited                                |   | (1,265,680         | )      | $                                                | 23.22  |   |
| Outstanding at December 31, 2001         |   | 5,048,790          |   | $                                                | 18.14  |   |
|                                     |   |               |   |                                             |   |
| Granted                                  |   | 1,331,000          |   | $                                                | 19.98  |   |
| Exercised                                |   | (417,237           | )      | $                                                | 17.25  |   |
| Forfeited                                |   | (782,713           | )      | $                                                | 19.98  |   |
| Outstanding at December 31, 2002         |   | 5,179,840          |   | $                                                | 18.41  |   |
|                                     |   |               |   |                                             |   |
| Options exercisable at December 31, 2002 |   | 2,449,300          |   | $                                                | 20.10  |   |
| Options exercisable at December 31, 2001 |   | 2,759,000          |   | $                                                | 20.03  |   |
| Options exercisable at December 31, 2000 |   | 3,418,000          |   | $                                                | 21.06  |   |

 

SFAS No. 123requires either the recording or disclosure of compensation cost forstock-based employee compensation plans at fair value.  The Company has adopted the disclosure-onlyprovisions of SFAS No. 123. Accordingly, no compensation costs have been recognized by the Company.

 

Hadcompensation cost for the Company’s stock option plans been recognized based onthe fair value at the grant date for awards consistent with the provisions ofSFAS No. 123 (prospective adoption of SFAS 148 – see Note 2), the Company’s netincome in the year ended December 31, 2002 would have been reduced by $2.2million from $122.1 million to $119.9 million (resulting in net income of $1.11per share - basic and $1.10 per share – diluted).  In the year ended December 31, 2001, net income would have beenreduced by $2.1 million from $105.2 million to $103.1 million (resulting in netincome of $0.92 per share - basic and diluted).  In the year ended December 31, 2000, net income would have beenreduced by $2.1 million from $123.1 million to $121.0 million (resulting in netincome of $1.12 per share - basic and diluted).

 

The fair valueof each option grant is estimated on the date of grant using the Black-Scholesoption-pricing model with the following weighted average assumptions for grantsin each of the three years ended December 31, 2002, 2001, and 2000,respectively: dividend yield of 9.23%, 8.24%, and 8.26%, respectively; expectedvolatility of 22.88%, 25.11%, and 22.15%, respectively; risk-free interest rateof 4.46%, 4.54%, and 6.68%, respectively; and expected life of 3.7 years, 3.9years, and 4.6 years, respectively.  Theper share weighted average fair value at the dates of grant for options awardedfor the above periods was $1.33, $1.45, and $1.31, respectively.

 

Dividends Paid and Payable (in thousands):

 

| Dividends  declared in 2000, paid in 2000   |   | $       | 125,443 |   |
|---------------------------------------------|--------|---------|---------|--------|
| Dividends declared in 2000, paid in 2001    |   | 41,694  |    |
| Dividends declared in 2001, paid in 2001    |   | 124,898 |    |
| Dividends declared in 2001, paid in 2002    |   | 41,692  |    |
| Dividends declared in 2002, paid in 2002    |   | 134,310 |    |
| Dividends declared in 2002, payable in 2003 |   | 44,836  |    |

 

F-29

----

 

Distributionsto shareholders will generally be taxable as ordinary income, although aportion of such dividends may be designated by the Company as capital gain ormay constitute a tax-free return of capital. The Company annually furnishes to each of its shareholders a statementsetting forth the distributions paid during the preceding year and theircharacterization as ordinary income, capital gain or return of capital.

 

The Companyintends to continue to declare quarterly distributions.  No assurance, however, can be provided as tothe amounts or timing of future distributions, as the maintenance of suchdistributions is subject to various factors, including the discretion of theCompany’s Board of Directors, limitation provisions of the Company’s debtinstruments, the ability to pay dividends under Maryland law, the availabilityof cash to make the necessary dividend payments and the effect of REITdistribution requirements.

 

Dividend Reinvestment Plan

 

The Companyhas a Dividend Reinvestment and Share Purchase Plan whereby shareholders mayinvest cash distributions and make optional cash payments to purchase shares ofthe Company.  The additional sharescurrently are purchased in the open market and therefore do not represent newissuances by the Company.

 

Earnings per Share (EPS)  

 

In accordancewith the disclosure requirements of SFAS No. 128 (Note 2), a reconciliation ofthe numerator and denominator of basic and diluted EPS is provided as follows(in thousands, except per share amounts):

 

F-30

----

 
|                                                                             |   | **Years Ended December 31,** |    |
|----------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                             |   | **2002**                     |    | **2001** |   | **2000** |   |
| **Basic EPS**                                                                    |   |                         |    |   |   |   |   |
| **Numerator:**                                                                   |   |                         |    |   |   |   |   |
| Income from continuing operations                                                |   | $                            | 19,352  |   | $ | 67,179 |   | $ | 78,111 |   |
| Preferred dividends                                                              |   | (21,023                      | )       | (22,639 | ) | (22,635 | ) |
| Discount on redemption of preferred stock                                        |   | 6,997                        |    | — |   | — |   |
| Net income available to common shares from continuing operations -  basic        |   | 5,326                        |    | 44,540 |   | 55,476 |   |
|                                                                             |   |                         |    |   |   |   |   |
| Results of operations of discontinued garden apartment communities               |   | 17,007                       |    | 15,179 |   | 21,310 |   |
| Income from other discontinued operations                                        |   | 86,021                       |    | 22,804 |   | 22,902 |   |
| Net income available to common shares from discontinued operations -  basic      |   | 103,028                      |    | 37,983 |   | 44,212 |   |
|                                                                             |   |                         |    |   |   |   |   |
| Net income available to common shares before extraordinary item -  basic         |   | 108,354                      |    | 82,523 |   | 99,688 |   |
| Extraordinary item                                                               |   | (318                         | )       | — |   | 758 |   |
| Net income available to common shares - basic                                    |   | $                            | 108,036 |   | $ | 82,523 |   | $ | 100,446 |   |
|                                                                             |   |                         |    |   |   |   |   |
| **Denominator:**                                                                 |   |                         |    |   |   |   |   |
| Weighted average of common shares outstanding                                    |   | 95,119                       |    | 87,241 |   | 87,608 |   |
|                                                                             |   |                         |    |   |   |   |   |
| Earnings per share – continuing operations                                  |   | $                            | 0.06    |   | $ | 0.51 |   | $ | 0.63 |   |
| Earnings per share – discontinued operations                                |   | 1.08                         |    | 0.44 |   | 0.51 |   |
| Earnings per share – extraordinary item                                     |   | —                       |    | — |   | 0.01 |   |
| Basic earnings per common share                                                  |   | $                            | 1.14    |   | $ | 0.95 |   | $ | 1.15 |   |
|                                                                             |   |                         |    |   |   |   |   |
| **Diluted  EPS**                                                                 |   |                         |    |   |   |   |   |
| **Numerator:**                                                                   |   |                         |    |   |   |   |   |
| Income from continuing operations                                                |   | $                            | 19,352  |   | $ | 67,179 |   | $ | 78,111 |   |
| Preferred dividends                                                              |   | (21,023                      | )       | (22,639 | ) | (22,635 | ) |
| Discount on redemption of preferred stock                                        |   | 6,997                        |    | — |   | — |   |
| Minority interest                                                                |   | 642                          |    | 848 |   | 952 |   |
| Net income available to common shares from continuing operations –  diluted |   | 5,968                        |    | 45,388 |   | 56,428 |   |
|                                                                             |   |                         |    |   |   |   |   |
| Results of operations of discontinued garden apartment communities               |   | 17,007                       |    | 15,179 |   | 21,310 |   |
| Income from other discontinued operations                                        |   | 86,021                       |    | 22,804 |   | 22,902 |   |
| Net income available to common shares from discontinued operations -  diluted    |   | 103,028                      |    | 37,983 |   | 44,212 |   |
|                                                                             |   |                         |    |   |   |   |   |
| Net income available to common shares before extraordinary item -  diluted       |   | 108,996                      |    | 83,371 |   | 100,640 |   |
| Extraordinary item                                                               |   | (318                         | )       | — |   | 758 |   |
| Net income available to common shares - diluted                                  |   | $                            | 108,678 |   | $ | 83,371 |   | $ | 101,398 |   |
|                                                                             |   |                         |    |   |   |   |   |
| **Denominator:**                                                                 |   |                         |    |   |   |   |   |
| Weighted average of common shares outstanding - basic                            |   | 95,119                       |    | 87,241 |   | 87,608 |   |
| Effect of diluted securities:                                                    |   |                         |    |   |   |   |   |
| Excel Realty Partners, L.P. third party units                                    |   | 897                          |    | 1,231 |   | 1,235 |   |
| Common stock options                                                             |   | 536                          |    | 327 |   | 108 |   |
| Weighted average of common shares outstanding – diluted                     |   | 96,552                       |    | 88,799 |   | 88,951 |   |
|                                                                             |   |                         |    |   |   |   |   |
| Earnings per share – continuing operations                                  |   | $                            | 0.06    |   | $ | 0.51 |   | $ | 0.63 |   |
| Earnings per share – discontinued operations                                |   | 1.07                         |    | 0.43 |   | 0.50 |   |
| Earnings per share – extraordinary item                                     |   | —                       |    | — |   | 0.01 |   |
| Diluted earnings per common share                                                |   | $                            | 1.13    |   | $ | 0.94 |   | $ | 1.14 |   |

 

Note- Preferred A shares are anti-dilutive for earnings per sharecalculations.  On July 15, 2002, theCompany redeemed all Preferred A shares outstanding, resulting in the issuanceof approximately 1.9 million shares of common stock.  The redemption resulted in a one-time discount, which isreflected above in the year ended December 31, 2002.

 

F-31

----

 

**16.****                               FairValue of Financial Instruments**

 

The followingfair value disclosure was determined by the Company, using available marketinformation and discounted cash flow analyses as of December 31, 2002 and 2001,respectively.  The discount rate used incalculating fair value is the sum of the current risk free rate and the riskpremium on the date of acquiring/assuming the instruments/obligations.  Considerable judgment is necessary tointerpret market data and to develop the related estimates of fair value.  Accordingly, the estimates presented are notnecessarily indicative of the amounts that the Company could realize upondisposition.  The use of differentestimation methodologies may have a material effect on the estimated fair valueamounts.  The Company believes that thecarrying amounts reflected in the Consolidated Balance Sheets at December 31,2002 and 2001 approximate the fair values for cash and cash equivalents,marketable securities, receivables and other liabilities.

 

The followingare financial instruments for which Company estimates of fair value differ fromcarrying amounts (in thousands):

 

|                                                      |   | **December  31, 2002** |   | **December  31, 2001** |   |
|-----------------------------------------------------------|--------|------------------------|--------|------------------------|--------|
|                                                      |   | **Carrying  Amounts**  |   | **Fair  Value**        |   | **Carrying  Amounts** |   | **Fair  Value** |   |
| Mortgages and notes receivable including  advances to ERT |   | $                      | 2,632  |                   | $      | 2,876 |   | $ | 45,360 |   | $ | 44,263 |   |
| Mortgages payable                                         |   | 671,200                |   | 668,534                |   | 241,436 |   | 236,010 |   |
| Notes payable                                             |   | 783,927                |   | 827,609                |   | 613,248 |   | 668,475 |   |
| Credit facilities                                         |   | 230,000                |   | 231,284                |   | 95,000 |   | 99,192 |   |
|                                                           |        |                        |        |                        |        |  |  |  |  |  |  |  |  |

 

**17.          Commitmentsand Contingencies**

 

General

 

The Company isnot presently involved in any material litigation nor, to its knowledge, is anymaterial litigation threatened against the Company or its properties.  The Company is involved in routinelitigation arising in the ordinary course of business.

 

Funding Commitments

 

In addition tothe joint venture funding commitments described in Note 10 above, the Companyalso had the following contractual obligations as of December 31, 2002, none ofwhich the Company believes will have a material adverse affect:

 

•      *Letter ofCredit Extension*.  In connectionwith the sale of its garden apartment portfolio, the Company arranged for theprovision of a letter of credit to the buyer in the amount of approximately $30million, which can remain outstanding through September 2004 (subject toextensions for up to one year).  Theletter of credit was used by the buyer as collateral for a loan obtained tofinance the purchase of the garden apartment portfolio.  If the letter of credit is drawn (forexample, following a default by the buyer under the loan), the Company will beobligated to reimburse the providing bank for the amount of the draw.  The balance outstanding and thus the maximumamount of exposure under this letter of credit was approximately $23.8 millionas of December 31, 2002; however, as of December 31, 2002, approximately $4.5million of this balance was secured by funds held in escrow.  These funds reduced the Company’s exposureunder the letter of credit to approximately $19.3 million.

 

•      *Non-RecourseDebt Guarantees*.  Undercertain Company and joint venture non-recourse mortgage loans, the Companycould, under certain circumstances,  beresponsible for portions of the mortgage indebtedness in connection withcertain customary non-recourse carve out provisions such as environmentalconditions, misuse of funds and material misrepresentations.  As of December 31, 2002, the Company hadmortgage loans 

 

F-32

----

 

outstanding ofapproximately $671.2 million and joint ventures in which the Company has adirect or indirect interest had mortgage loans outstanding of approximately$120.6 million.

 

•      *LeasingCommitments. *The Company hasentered into leases, as lessee, in connection with ground leases for shoppingcenters which it operates, an office building which it sublets, andadministrative office space for the Company. These leases are accounted for as operating leases.  The minimum annual rental commitments duringthe next five fiscal years and thereafter are approximately as follows (inthousands):

 
| **Year**   |   |   |   |
|------------|--------|--------|--------|
| 2003       |   | $      | 1,500  |   |
| 2004       |   | 1,356  |   |
| 2005       |   | 1,324  |   |
| 2006       |   | 833    |   |
| 2007       |   | 543    |   |
| Thereafter |   | 13,043 |   |
|       |   | $      | 18,599 |   |

 

Environmental Matters

 

Under variousfederal, state and local laws, ordinances and regulations, the Company may beconsidered an owner or operator of real property or may have arranged for thedisposal or treatment of hazardous or toxic substances and, therefore, maybecome liable for the costs of removal or remediation of certain hazardoussubstances released on or in their property or disposed of by them, as well ascertain other potential costs which could relate to hazardous or toxicsubstances (including governmental fines and injuries to persons andproperty).  Such liability may beimposed whether or not the Company knew of, or was responsible for, thepresence of these hazardous or toxic substances.  As is common with community and neighborhood shopping centers,many of the Company’s properties had or have on-site dry cleaners and/oron-site gasoline facilities.  Theseoperations could potentially result in environmental contamination at theproperties.

 

The Company isaware that soil and groundwater contamination exists at some of its properties.The primary contaminants of concern at these properties includeperchloroethylene and trichloroethylene (associated with the operations ofon-site dry cleaners) and petroleum hydrocarbons (associated with theoperations of on-site gasoline facilities). The Company is also are aware that asbestos-containing materials existat some of its properties.  While theCompany does not expect the environmental conditions at its properties,considered as a whole, to have a material adverse effect on the Company, therecan be no assurance that this will be the case.  Further, no assurance can be given that any environmental studiesperformed have identified or will identify all material environmentalconditions, that any prior owner of the properties did not create a materialenvironmental condition not known to the Company or that a materialenvironmental condition does not otherwise exist with respect to any of theCompany’s properties.

 

As of December31, 2002 and 2001, the Company’s reserve for removal of asbestos-containingmaterials at these properties was approximately $0 and $3.2 million,respectively.  Included in otherliabilities in its Consolidated Balance Sheet as of December 31, 2001 is $3.2million related to the clean-up of certain asbestos-containing materials.

 

**18.          Comprehensive Income**

 

Totalcomprehensive income was $123.4 million, $102.6 million and $123.4 million forthe years ended December 31, 2002, 2001 and 2000, respectively.  The primary components of comprehensiveincome, other than net income, are the adoption and continued application ofSFAS No. 133 to the Company’s cash flow hedges and the Company’s mark-to-marketon its available-for-sale securities.

 

F-33

----

 

As of December31, 2002 and 2001, accumulated other comprehensive income reflected in theCompany’s equity on the balance sheet is comprised of the following (inthousands):

 
|                                               |   | **As of  December 31,** |   |
|----------------------------------------------------|--------|-------------------------|--------|
|                                               |   | **2002**                |   | **2001** |   |
| Unrealized gains on available-for-sale  securities |   | $                       | 1,142  |   | $ | 913 |   |
| Unrealized losses on interest risk hedges          |   | (1,735                  | )      | (2,878 | ) |
| Accumulated other comprehensive loss               |   | $                       | 593    |   | $ | (1,965 | ) |

 

**19.****                               FutureMinimum Annual Base Rents**

 

Future minimumannual base rental revenue for the next five years for the commercial realestate owned at December 31, 2002 and subject to non-cancelable operatingleases is as follows (in thousands):

 
| **Year**   |   |      |    |
|------------|--------|-----------|---------|
| 2003       |   | $         | 340,002 |   |
| 2004       |   | 300,173   |    |
| 2005       |   | 263,775   |    |
| 2006       |   | 224,382   |    |
| 2007       |   | 187,156   |    |
| Thereafter |   | 1,040,913 |    |
|            |        |           |         |  |

 

The abovetable assumes that all leases which expire are not renewed and tenant renewaloptions are not exercised, therefore neither renewal rentals nor rentals fromreplacement tenants are included. Future minimum annual base rentals do not include contingent rentals,which may be received under certain leases on the basis of percentage of reportedtenants’ sales volume, increases in consumer price indices, common areamaintenance charges and real estate tax reimbursements.  Contingent rentals for the years endedDecember 31, 2002, 2001, and 2000 amounted to approximately $89.5 million,$68.2 million, and $62.9 million, respectively.

 

**20.          SeveranceCosts**

 

During theyears ended December 31, 2002, 2001 and 2000, the Company recorded executiveseverance costs of $0, $0.9 million, and $4.9 million, respectively.  During 2001, two executives resigned theirpositions.  During 2000, one executiveretired and three executives resigned their positions.  Severance costs were recorded and paid inaccordance with the employees’ respective retirement and employment agreements.

 

**21.****                               RetirementPlan**

 

The Companyhas a Retirement and 401(k) Savings Plan (the “Savings Plan”) covering officersand employees of the Company. Participants in the Savings Plan may elect to contribute a portion oftheir earnings to the Savings Plan and the Company makes a matching contributionto the Savings Plan to a maximum of 3% of the employee’s eligiblecompensation.  For the years endedDecember 31, 2002, 2001, and 2000, the Company’s expense for the Savings Planwas approximately $349,000, $192,000, and $147,000, respectively.

 

F-34

----

 

**22.          SelectedQuarterly Financial Data (Unaudited)**

 

Summarized quarterly financial data is as follows (in thousands, exceptper share amounts):

** **
|                              |   | **Total  Revenues (1)** |       | **Net Income  After  Extraordinary  Item, if Any** |       | **Net Income  Per  Share-Basic  After  Extraordinary  Item, if Any** |       | **Net Income  Per  Share-Diluted  After  Extraordinary  Item, if Any** |       |
|-----------------------------------|--------|-------------------------|------------|----------------------------------------------------|------------|----------------------------------------------------------------------|------------|------------------------------------------------------------------------|------------|
|                              |   |                    | ** ** |                                               | ** ** |                                                                 | ** ** |                                                                   | ** ** |
| **Year Ended December 31, 2002:** |   |                    |       |                                               |       |                                                                 |       |                                                                   |       |
| First quarter                     |   | $                       | 84,841     |                                               | $          | 21,988                                                               |       | $                                                                      | 0.18       |   | $ | 0.18 |   |
| Second quarter                    |   | 101,351                 |       | 30,761                                             |       | 0.27                                                                 |       | 0.26                                                                   |       |
| Third quarter                     |   | 101,154                 |       | 29,791                                             |       | 0.33                                                                 |       | 0.33                                                                   |       |
| Fourth quarter (2)                |   | 105,053                 |       | 39,522                                             |       | 0.36                                                                 |       | 0.36                                                                   |       |
|                              |   |                    | ** ** |                                               | ** ** |                                                                 | ** ** |                                                                   | ** ** |
| **Year Ended December 31, 2001:** |   |                    | ** ** |                                               | ** ** |                                                                 | ** ** |                                                                   | ** ** |
| First quarter                     |   | $                       | 72,524     |                                               | $          | 27,203                                                               |       | $                                                                      | 0.25       |   | $ | 0.25 |   |
| Second quarter                    |   | 72,936                  |       | 27,781                                             |       | 0.25                                                                 |       | 0.25                                                                   |       |
| Third quarter                     |   | 74,299                  |       | 23,061                                             |       | 0.20                                                                 |       | 0.20                                                                   |       |
| Fourth quarter                    |   | 78,040                  |       | 27,117                                             | (3)        | 0.25                                                                 |       | 0.24                                                                   |       |
|                              |   |                    |       |                                               |       |                                                                 |       |                                                                   |       |
| **Year Ended December 31, 2000:** |   |                    |       |                                               |       |                                                                 |       |                                                                   |       |
| First quarter                     |   | $                       | 74,212     |                                               | $          | 27,249                                                               | (5)        | $                                                                      | 0.25       | (5) | $ | 0.25 | (5) |
| Second quarter (4)                |   | 73,421                  |       | 36,229                                             | (5)        | 0.35                                                                 | (5)        | 0.35                                                                   | (5)        |
| Third quarter                     |   | 71,814                  |       | 32,233                                             |       | 0.30                                                                 |       | 0.30                                                                   |       |
| Fourth quarter                    |   | 75,664                  |       | 27,370                                             | (5)        | 0.25                                                                 | (5)        | 0.25                                                                   | (5)        |

 

----

(1)               Amountshave been adjusted to give effect to the Company’s discontinued operations, inaccordance with SFAS No. 144.

(2)               Netincome before extraordinary item of $39,840.

(3)               Includesseverance costs of $0.9 million.

(4)               Netincome before extraordinary item of $35,471; earnings per share beforeextraordinary item; basic and diluted $0.34.

(5)               Includesseverance costs of $2.7 million in the first quarter, $0.9 million in thesecond quarter and $1.3 million in the fourth quarter.

 

**23.          Subsequent Events**

 

On January 2, 2003, the Company repaid all of the amounts outstandingunder its Notes Payable, other, of $28.3 million.

 

On January 3, 2003, the Company acquired a portfolio of sevengrocery-anchored neighborhood shopping centers located in Michigan andaggregating 534,386 square feet for approximately $46 million in cash.

 

On March 3, 2003, the Company repaid the $110.5 million which wasoutstanding under its variable rate REMIC through a draw under its FleetRevolving Facility.  The variable rateREMIC debt was retired.

 

F-35

----

 

**NEW PLAN EXCEL REALTYTRUST, INC. AND SUBSIDIARIES**

 

**SCHEDULE II -VALUATION AND QUALIFYING ACCOUNTS**

**(in thousands)**

 
|                             |   | **Balances  at  Beginning of  Period** |   | **Charged to  Bad Debt  Expense** |   | **Deductions  Accounts  Receivable  Written Off** |   | **Balance at  End of  Period** |   |
|----------------------------------|--------|----------------------------------------|--------|-----------------------------------|--------|---------------------------------------------------|--------|--------------------------------|--------|
|                             |   |                                   |   |                              |   |                                              |   |                           |   |
| Allowance for doubtful accounts: |   |                                   |   |                              |   |                                              |   |                           |   |
|                             |   |                                   |   |                              |   |                                              |   |                           |   |
| Year ended December 31, 2002     |   | $                                      | 15,633 |                              | $      | 4,345                                             |   | $                              | 4,671  |   | $ | 15,307 |   |
|                             |   |                                   |   |                              |   |                                              |   |                           |   |
| Year ended December 31, 2001     |   | $                                      | 12,816 |                              | $      | 6,453                                             |   | $                              | 3,636  |   | $ | 15,633 |   |
|                             |   |                                   |   |                              |   |                                              |   |                           |   |
| Year ended December 31, 2000     |   | $                                      | 13,897 |                              | $      | 4,372                                             |   | $                              | 5,453  |   | $ | 12,816 |   |

 

F-36

----

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                           |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|----------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                   |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                        |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| **Retail**                             |   |             |   |                        |   |                                             |   |                                                          |   |   |   |   |   |   |   |
| Cloverdale Village  Florence, AL       |   |             |   | 634,152                     |   | 2,536,606                                        |   | 15,332                                                        |   | 634,152 |   | 2,551,938 |   | 3,186,089 |   |
| Riverview Plaza  Gadsden, AL           |   | (5,115,192       | )      | 2,072,169                   |   | 8,286,847                                        |   | 67,376                                                        |   | 2,072,169 |   | 8,354,223 |   | 10,426,392 |   |
| Grants Mill Station  Irondale, AL      |   | (7,152,111       | )      | 2,888,819                   |   | 11,555,308                                       |   | 146,187                                                       |   | 2,888,819 |   | 11,701,495 |   | 14,590,314 |   |
| Kroger  Muscle Shoals, AL              |   |             |   | 102,822                     |   | 396,597                                          |   |                                                          |   | 102,822 |   | 396,597 |   | 499,419 |   |
| Kroger  Muscle Shoals, AL              |   |             |   | 429,999                     |   | 1,659,638                                        |   |                                                          |   | 429,999 |   | 1,659,638 |   | 2,089,637 |   |
| Kroger  Scottsboro, AL                 |   |             |   | 369,815                     |   | 1,427,451                                        |   |                                                          |   | 369,815 |   | 1,427,451 |   | 1,797,266 |   |
| Payton Park  Sylacauga, AL             |   |             |   | 3,584,697                   |   | 14,339,021                                       |   | 41,500                                                        |   | 3,584,697 |   | 14,380,521 |   | 17,965,218 |   |
| Conway Towne Center  Conway, AR        |   |             |   | 2,835,585                   |   | 8,506,754                                        |   |                                                          |   | 2,835,585 |   | 8,506,754 |   | 11,342,339 |   |
| Kmart  Pine Bluff, AR                  |   |             |   | 490,287                     |   | 1,892,538                                        |   |                                                          |   | 490,287 |   | 1,892,538 |   | 2,382,826 |   |
| Glendale Galleria  Glendale, AZ        |   |             |   | 2,869,504                   |   | 11,478,248                                       |   | 180,364                                                       |   | 2,869,504 |   | 11,658,612 |   | 14,528,116 |   |
| Kmart Plaza  Mesa, AZ                  |   |             |   | 1,147,194                   |   | 4,588,778                                        |   | 229,121                                                       |   | 1,147,194 |   | 4,817,899 |   | 5,965,093 |   |
| Sun Valley Plaza  Mesa, AZ             |   |             |   | 1,188,094                   |   | 4,752,619                                        |   | 211,336                                                       |   | 1,188,094 |   | 4,963,955 |   | 6,152,050 |   |
| Southern Village  Mesa Mesa, AZ        |   |             |   | 1,712,353                   |   | 6,849,509                                        |   | 85,861                                                        |   | 1,712,353 |   | 6,935,370 |   | 8,647,723 |   |
| Metro Marketplace  Phoenix, AZ         |   |             |   | 5,098,702                   |   | 20,521,995                                       |   | 147,434                                                       |   | 5,098,702 |   | 20,669,430 |   | 25,768,132 |   |
| Genzyme  Scottsdale, AZ                |   |             |   | 491,910                     |   | 1,897,261                                        |   |                                                          |   | 491,910 |   | 1,897,261 |   | 2,389,171 |   |
| Q Club  Scottsdale, AZ                 |   |             |   | 1,794,808                   |   | 7,374,597                                        |   |                                                          |   | 1,794,808 |   | 7,374,597 |   | 9,169,405 |   |
| Northmall Centre  Tucson, AZ           |   |             |   | 4,762,481                   |   | 12,630,121                                       |   | 117,640                                                       |   | 4,762,481 |   | 12,747,761 |   | 17,510,242 |   |
| Bakersfield Plaza  Bakersfield, CA     |   |             |   | (28,534                     | )      | 27,597,943                                       |   | 147,137                                                       |   | (28,534 | ) | 27,745,080 |   | 27,716,547 |   |
| Factory Merchants Barstow  Barstow, CA |   |             |   | 5,730,337                   |   | 4,936,349                                        |   | 11,441,201                                                    |   | 5,730,337 |   | 16,377,550 |   | 22,107,887 |   |
| Kinko’s/Sony  Burbank, CA         |   |             |   | 1,153,334                   |   | 4,613,209                                        |   | 14,950                                                        |   | 1,153,334 |   | 4,628,159 |   | 5,781,493 |   |
| Carmen Plaza  Camarillo, CA            |   |             |   | 1,872,708                   |   | 7,491,044                                        |   | 710,488                                                       |   | 1,872,708 |   | 8,201,532 |   | 10,074,240 |   |
| Cudahy Plaza  Cudahy, CA               |   |             |   |                        |   | 10,019,146                                       |   | 156,679                                                       |   |   |   | 10,175,825 |   | 10,175,825 |   |
| Broadway Faire  Fresno, CA             |   |             |   | 2,795,383                   |   | 11,181,648                                       |   | 20,640                                                        |   | 2,795,383 |   | 11,202,288 |   | 13,997,671 |   |
| Arbor Faire  Fresno, CA                |   |             |   | 4,378,813                   |   | 17,624,497                                       |   |                                                          |   | 4,378,813 |   | 17,624,497 |   | 22,003,310 |   |
| Briggsmore Plaza  Modesto, CA          |   | (441,964         | )      | 1,663,885                   |   | 6,653,828                                        |   | 215,052                                                       |   | 1,663,885 |   | 6,868,879 |   | 8,532,764 |   |

 

[Additional columns below]

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                           |   | **COLUMN F**                 |    | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                                |   |
|----------------------------------------|--------|------------------------------|---------|-----------------------|--------|--------------------|--------|-------------------------------------------------------------|--------|
| **Description**                        |   | **Accumlated  Depreciation** |    | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -   Latest Income  Statement** |   |
| **Retail**                             |   |                         |    |                  |   |               |   |                                                        |   |
| Cloverdale Village  Florence, AL       |   | (524,624                     | )       | 1986                  |   | Oct-94             |   | 40                                                          |   |
| Riverview Plaza  Gadsden, AL           |   | (868,972                     | )       | 1990                  |   | Oct-95             |   | 40                                                          |   |
| Grants Mill Station  Irondale, AL      |   | (1,236,320                   | )       | 1991                  |   | Jul-98             |   | 40                                                          |   |
| Kroger  Muscle Shoals, AL              |   | (42,698                      | )       | 1982                  |   | Aug-93             |   | 40                                                          |   |
| Kroger  Muscle Shoals, AL              |   | (178,671                     | )       | 1982                  |   | Aug-93             |   | 40                                                          |   |
| Kroger  Scottsboro, AL                 |   | (153,665                     | )       | 1982                  |   | Aug-93             |   | 40                                                          |   |
| Payton Park  Sylacauga, AL             |   | (1,512,914                   | )  | 1995                  |   | Jul-98             |   | 40                                                          |   |
| Conway Towne Center  Conway, AR        |   | (8,861                       | )       | 1986                  |   | Dec-02             |   | 40                                                          |   |
| Kmart  Pine Bluff, AR                  |   | (203,736                     | )       | 1981                  |   | Aug-93             |   | 40                                                          |   |
| Glendale Galleria  Glendale, AZ        |   | (1,246,032                   | )       | 1991                  |   | Aug-97             |   | 40                                                          |   |
| Kmart Plaza  Mesa, AZ                  |   | (513,158                     | )       | 1970                  |   | Dec-90             |   | 40                                                          |   |
| Sun Valley Plaza  Mesa, AZ             |   | (519,994                     | )       | 1981                  |   | May-94             |   | 40                                                          |   |
| Southern Village Mesa  Mesa, AZ        |   | (745,815                     | )       | 1987                  |   | Aug-97             |   | 40                                                          |   |
| Metro Marketplace  Phoenix, AZ         |   | (2,169,335                   | )       | 1988                  |   | Jun-91             |   | 40                                                          |   |
| Genzyme  Scottsdale, AZ                |   | (204,315                     | )       | 1971                  |   | Dec-90             |   | 40                                                          |   |
| Q Club  Scottsdale, AZ                 |   | (779,485                     | )       | 1994                  |   | Aug-94             |   | 40                                                          |   |
| Northmall Centre  Tucson, AZ           |   | (1,338,081                   | )       | 1996                  |   | Dec-96             |   | 40                                                          |   |
| Bakersfield Plaza  Bakersfield, CA     |   | (2,571,849                   | )       | 1970                  |   | Jun-97             |   | 40                                                          |   |
| Factory Merchants Barstow  Barstow, CA |   | (7,451,284                   | )       | 1989                  |   | Nov-93             |   | 40                                                          |   |
| Kinko’s/Sony  Burbank, CA         |   | (487,689                     | )       | 1988                  |   | May-89             |   | 40                                                          |   |
| Carmen Plaza  Camarillo, CA            |   | (827,647                     | )       | 1971                  |   | Jun-97             |   | 40                                                          |   |
| Cudahy Plaza  Cudahy, CA               |   | (943,083                     | )       | 1968                  |   | Jun-97             |   | 40                                                          |   |
| Broadway Faire  Fresno, CA             |   | (1,176,078                   | )       | 1995                  |   | Apr-97             |   | 40                                                          |   |
| Arbor Faire  Fresno, CA                |   | (1,847,213                   | )       | 1993                  |   | Apr-97             |   | 40                                                          |   |
| Briggsmore Plaza  Modesto, CA          |   | (713,881                     | )       | 1974                  |   | Jun-97             |   | 40                                                          |   |

 

F-37

----

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                   |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|------------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                           |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                                |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| **Retail**                                     |   |             |   |                        |   |                                             |   |                                                          |   |   |   |   |   |   |   |
| Montebello Plaza  Montebello, CA               |   | (5,632,370       | )      | 5,801,166                   |   | 23,202,411                                       |   | 196,600                                                       |   | 5,801,166 |   | 23,399,011 |   | 29,200,178 |   |
| Paradise Plaza  Paradise, CA                   |   | (2,091,958       | )      | 1,709,966                   |   | 6,840,630                                        |   | 114,258                                                       |   | 1,709,966 |   | 6,954,888 |   | 8,664,854 |   |
| Metro 580 Shopping Center  Pleasanton, CA      |   |             |   | 5,876,389                   |   | 23,651,921                                       |   | 7,125                                                         |   | 5,876,389 |   | 23,659,046 |   | 29,535,435 |   |
| Rose Pavilion  Pleasanton, CA                  |   |             |   | 11,389,328                  |   | 45,840,252                                       |   | 183,880                                                       |   | 11,389,328 |   | 46,024,132 |   | 57,413,460 |   |
| San Dimas Plaza  San Dimas, CA                 |   |             |   | 4,597,244                   |   | 18,336,392                                       |   | 175,232                                                       |   | 4,597,244 |   | 18,511,624 |   | 23,108,869 |   |
| Bristol Plaza  Santa Ana, CA                   |   |             |   |                        |   | 15,222,022                                       |   | 289,139                                                       |   |   |   | 15,511,161 |   | 15,511,161 |   |
| Vail Ranch Center  Temecula, CA                |   |             |   | 2,630,621                   |   | 10,522,619                                       |   | 19,650                                                        |   | 2,630,621 |   | 10,542,269 |   | 13,172,890 |   |
| Arvada Plaza  Arvada, CO                       |   | (2,382,700       | )      | 1,273,494                   |   | 3,820,483                                        |   |                                                          |   | 1,273,494 |   | 3,820,483 |   | 5,093,978 |   |
| Arapahoe Crossings  Aurora, CO                 |   |             |   | 17,975,228                  |   | 44,006,804                                       |   | 54,345                                                        |   | 17,975,228 |   | 44,061,149 |   | 62,036,377 |   |
| Aurora Plaza  Aurora, CO                       |   | (7,075,347       | )      | 2,730,228                   |   | 8,190,684                                        |   |                                                          |   | 2,730,228 |   | 8,190,684 |   | 10,920,912 |   |
| Superior Marketplace  Superior, CO             |   |             |   | 24,063,360                  |   | 10,348,255                                       |   |                                                          |   | 24,063,360 |   | 10,348,255 |   | 34,411,616 |   |
| Westminster City Centre  Westminster, CO       |   | (28,565,826      | )      | 12,256,884                  |   | 49,332,701                                       |   | 65,155                                                        |   | 12,256,884 |   | 49,397,856 |   | 61,654,740 |   |
| Doverama at Rodney Village  Dover, DE          |   |             |   | 50,755                      |   | 311,781                                          |   |                                                          |   | 50,755 |   | 311,781 |   | 362,536 |   |
| Brooksville Square  Brooksville, FL            |   |             |   | 2,720,155                   |   | 10,880,418                                       |   | 92,965                                                        |   | 2,720,155 |   | 10,973,383 |   | 13,693,538 |   |
| Coconut Creek  Coconut Creek, FL               |   |             |   | 16,222,504                  |   | 9,021,223                                        |   |                                                          |   | 16,222,504 |   | 9,021,223 |   | 25,243,727 |   |
| Northgate Shopping Center  DeLand, FL          |   | (7,263,539       | )      | 2,957,640                   |   | 11,830,664                                       |   | 72,601                                                        |   | 2,957,640 |   | 11,903,265 |   | 14,860,905 |   |
| Morse Shores  Ft. Myers, FL                    |   |             |   | 3,115,638                   |   | 4,238,325                                        |   |                                                          |   | 3,115,638 |   | 4,238,325 |   | 7,353,963 |   |
| Sun Plaza  Ft. Walton Beach, FL                |   | (10,662,769      | )      | 3,356,305                   |   | 10,068,916                                       |   |                                                          |   | 3,356,305 |   | 10,068,916 |   | 13,425,221 |   |
| Holly Hill Shopping Center  Holly Hill, FL     |   |             |   | 1,597,073                   |   | 4,791,219                                        |   |                                                          |   | 1,597,073 |   | 4,791,219 |   | 6,388,291 |   |
| Regency Park Shopping Center  Jacksonville, FL |   |             |   | 3,888,425                   |   | 15,553,501                                       |   | 317,735                                                       |   | 3,888,425 |   | 15,871,236 |   | 19,759,661 |   |
| Normandy Square  Jacksonville, FL              |   | (3,390,236       | )      | 1,408,006                   |   | 4,224,017                                        |   |                                                          |   | 1,408,006 |   | 4,224,017 |   | 5,632,023 |   |
| Plaza 66  Kenneth City, FL                     |   |             |   | 1,618,156                   |   | 4,854,469                                        |   |                                                          |   | 1,618,156 |   | 4,854,469 |   | 6,472,625 |   |
| Eastgate Shopping Center  Lake Wales, FL       |   |             |   | 1,542,842                   |   | 3,700,048                                        |   | 40,430                                                        |   | 1,542,842 |   | 3,740,478 |   | 5,283,321 |   |
| Leesburg Square  Leesburg, FL                  |   |             |   | 1,051,639                   |   | 4,206,554                                        |   | 133,004                                                       |   | 1,051,639 |   | 4,339,559 |   | 5,391,197 |   |
| Mall At 163rd Street  Miami, FL                |   |             |   | 4,540,914                   |   | 10,708,787                                       |   | 145,839                                                       |   | 4,540,914 |   | 10,854,626 |   | 15,395,539 |   |

 

[Additional columns below]

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                   |   | **COLUMN F**                 |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                                |   |
|------------------------------------------------|--------|------------------------------|--------|-----------------------|--------|--------------------|--------|-------------------------------------------------------------|--------|
| **Description**                                |   | **Accumlated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -   Latest Income  Statement** |   |
| **Retail**                                     |   |                         |   |                  |   |               |   |                                                        |   |
| Montebello Plaza  Montebello, CA               |   | (2,446,761                   | )      | 1974                  |   | Jun-97             |   | 40                                                          |   |
| Paradise Plaza  Paradise, CA                   |   | (725,156                     | )      | 1979                  |   | Jun-97             |   | 40                                                          |   |
| Metro 580 Shopping Center  Pleasanton, CA      |   | (2,482,792                   | )      | 1996                  |   | Sep-97             |   | 40                                                          |   |
| Rose Pavilion  Pleasanton, CA                  |   | (4,808,436                   | )      | 1987                  |   | Feb-98             |   | 40                                                          |   |
| San Dimas Plaza  San Dimas, CA                 |   | (1,877,263                   | )      | 1986                  |   | Oct-97             |   | 40                                                          |   |
| Bristol Plaza  Santa Ana, CA                   |   | (1,430,841                   | )      | 1972                  |   | Jun-97             |   | 40                                                          |   |
| Vail Ranch Center  Temecula, CA                |   | (1,107,093                   | )      | 1997                  |   | Dec-97             |   | 40                                                          |   |
| Arvada Plaza  Arvada, CO                       |   | (3,828                       | )      | 1977                  |   | Dec-02             |   | 40                                                          |   |
| Arapahoe Crossings  Aurora, CO                 |   | (1,378,223                   | )      | 1996                  |   | Oct-01             |   | 40                                                          |   |
| Aurora Plaza  Aurora, CO                       |   | (8,158                       | )      | 1965                  |   | Dec-02             |   | 40                                                          |   |
| Superior Marketplace  Superior, CO             |   | (107,794                     | )      | 1997                  |   | Jul-02             |   | 40                                                          |   |
| Westminster City Centre  Westminster, CO       |   | (5,184,659                   | )      | 1996                  |   | Dec-97             |   | 40                                                          |   |
| Doverama at Rodney Village  Dover, DE          |   | (110,126                     | )      | 1959                  |   | Jan-69             |   | 40                                                          |   |
| Brooksville Square  Brooksville, FL            |   | (1,158,940                   | )      | 1987                  |   | Mar-94             |   | 40                                                          |   |
| Coconut Creek  Coconut Creek, FL               |   | (187,942                     | )      | 1983                  |   | Mar-02             |   | 40                                                          |   |
| Northgate Shopping Center  DeLand, FL          |   | (1,258,458                   | )      | 1993                  |   | Jun-93             |   | 40                                                          |   |
| Morse Shores  Ft. Myers, FL                    |   | (88,298                      | )      | 1983                  |   | Mar-02             |   | 40                                                          |   |
| Sun Plaza  Ft. Walton Beach, FL                |   | (10,144                      | )      | 1970                  |   | Dec-02             |   | 40                                                          |   |
| Holly Hill Shopping Center  Holly Hill, FL     |   | (4,991                       | )      | 1984                  |   | Dec-02             |   | 40                                                          |   |
| Regency Park Shopping Center  Jacksonville, FL |   | (2,153,955                   | )      | 1985                  |   | Jun-97             |   | 40                                                          |   |
| Normandy Square  Jacksonville, FL              |   | (4,082                       | )      | 1976                  |   | Dec-02             |   | 40                                                          |   |
| Plaza 66  Kenneth City, FL                     |   | (5,057                       | )      | 1985                  |   | Dec-02             |   | 40                                                          |   |
| Eastgate Shopping Center  Lake Wales, FL       |   | (580,896                     | )      | 1994                  |   | May-94             |   | 40                                                          |   |
| Leesburg Square  Leesburg, FL                  |   | (465,714                     | )      | 1986                  |   | Dec-92             |   | 40                                                          |   |
| Mall At 163rd Street  Miami, FL                |   | (387,571                     | )      | 1956                  |   | Dec-98             |   | 40                                                          |   |

 

F-38

----

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                   |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|------------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                           |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                                |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| **Retail**                                     |   |             |   |                        |   |                                             |   |                                                          |   |   |   |   |   |   |   |
| Miami Gardens  Miami, FL                       |   |             |   | 5,418,459                   |   | 22,098,501                                       |   | 67,685                                                        |   | 5,418,459 |   | 22,166,186 |   | 27,584,645 |   |
| Freedom Square  Naples, FL                     |   |             |   | 3,340,254                   |   | 13,361,049                                       |   | 39,778                                                        |   | 3,340,254 |   | 13,400,827 |   | 16,741,080 |   |
| Southgate Shopping Center  New Port Richey, FL |   |             |   | 4,253,341                   |   | 3,981,290                                        |   | 240,324                                                       |   | 4,253,341 |   | 4,221,613 |   | 8,474,954 |   |
| New Port Richey Center  New Port Richey, FL    |   |             |   | 823,002                     |   | 2,469,005                                        |   |                                                          |   | 823,002 |   | 2,469,005 |   | 3,292,007 |   |
| Presidential Plaza  North Lauderdale, FL       |   |             |   | 1,750,441                   |   | 3,269,390                                        |   | 259,332                                                       |   | 1,750,441 |   | 3,528,722 |   | 5,279,163 |   |
| Colonial Marketplace  Orlando, FL              |   |             |   | 2,524,647                   |   | 3,504,446                                        |   | 283,123                                                       |   | 2,524,647 |   | 3,787,570 |   | 6,312,216 |   |
| Pointe*Orlando  Orlando, FL                    |   |             |   | 23,552,257                  |   | 45,478,634                                       |   | 9,613,966                                                     |   | 23,552,257 |   | 55,092,600 |   | 78,644,857 |   |
| Silver Hills  Orlando, FL                      |   |             |   | 1,487,419                   |   | 2,176,903                                        |   |                                                          |   | 1,487,419 |   | 2,176,903 |   | 3,664,321 |   |
| 23rd Street Station  Panama City, FL           |   |             |   | 1,849,668                   |   | 7,398,843                                        |   | 157,104                                                       |   | 1,849,668 |   | 7,555,947 |   | 9,405,615 |   |
| Pensacola Square  Pensacola, FL                |   |             |   | 3,060,786                   |   | 9,182,358                                        |   |                                                          |   | 3,060,786 |   | 9,182,358 |   | 12,243,144 |   |
| Riverwood Shopping Center  Port Orange, FL     |   |             |   | 2,236,444                   |   | 1,500,580                                        |   | 127,170                                                       |   | 2,236,444 |   | 1,627,750 |   | 3,864,194 |   |
| Seminole Plaza  Seminole, FL                   |   |             |   | 2,033,780                   |   | 2,215,356                                        |   | 117,242                                                       |   | 2,033,780 |   | 2,332,598 |   | 4,366,378 |   |
| Rutland Plaza  St. Petersburg, FL              |   |             |   | 1,443,294                   |   | 5,773,175                                        |   | 316,756                                                       |   | 1,443,294 |   | 6,089,931 |   | 7,533,225 |   |
| Eagles Park  St. Petersburg, FL                |   |             |   | 2,804,604                   |   | 5,527,812                                        |   | 26,591                                                        |   | 2,804,604 |   | 5,554,403 |   | 8,359,007 |   |
| Skyway Plaza  St. Petersburg, FL               |   | (4,373,728       | )      | 1,859,960                   |   | 5,579,881                                        |   |                                                          |   | 1,859,960 |   | 5,579,881 |   | 7,439,842 |   |
| Downtown Publix  Stuart, FL                    |   |             |   | 5,431,541                   |   | 5,906,376                                        |   | 14,800                                                        |   | 5,431,541 |   | 5,921,176 |   | 11,352,716 |   |
| Tarpon Mall  Tarpon Springs, FL                |   |             |   | 2,628,079                   |   | 7,884,238                                        |   |                                                          |   | 2,628,079 |   | 7,884,238 |   | 10,512,317 |   |
| Southgate Plaza — Albany  Albany, GA      |   |             |   | 231,517                     |   | 970,811                                          |   | 465,330                                                       |   | 231,517 |   | 1,436,141 |   | 1,667,657 |   |
| Albany Plaza  Albany, GA                       |   |             |   | 696,447                     |   | 2,799,786                                        |   | 246,021                                                       |   | 696,447 |   | 3,045,808 |   | 3,742,254 |   |
| Albany I  Albany, GA                           |   |             |   | 470,300                     |   | 1,881,213                                        |   | 47,685                                                        |   | 470,300 |   | 1,928,898 |   | 2,399,198 |   |
| Perlis Plaza  Americus, GA                     |   |             |   | 774,966                     |   | 5,301,644                                        |   | 688,316                                                       |   | 774,966 |   | 5,989,961 |   | 6,764,927 |   |
| Northeast Plaza  Atlanta, GA                   |   |             |   | 5,577,118                   |   | 16,731,354                                       |   |                                                          |   | 5,577,118 |   | 16,731,354 |   | 22,308,472 |   |
| North Leg Plaza  Augusta, GA                   |   |             |   | 1,103,517                   |   | 3,310,551                                        |   |                                                          |   | 1,103,517 |   | 3,310,551 |   | 4,414,068 |   |
| Sweetwater Village  Austell, GA                |   |             |   | 707,938                     |   | 2,831,750                                        |   | 56,268                                                        |   | 707,938 |   | 2,888,019 |   | 3,595,956 |   |
| Cedar Plaza  Cedartown, GA                     |   |             |   | 905,977                     |   | 3,713,207                                        |   | 39,636                                                        |   | 905,977 |   | 3,752,843 |   | 4,658,820 |   |

 

[Additional columns below]

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                   |   | **COLUMN F**                 |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                                |   |
|------------------------------------------------|--------|------------------------------|--------|-----------------------|--------|--------------------|--------|-------------------------------------------------------------|--------|
| **Description**                                |   | **Accumlated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -   Latest Income  Statement** |   |
| **Retail**                                     |   |                         |   |                  |   |               |   |                                                        |   |
| Miami Gardens  Miami, FL                       |   | (2,326,254                   | )      | 1996                  |   | Oct-97             |   | 40                                                          |   |
| Freedom Square  Naples, FL                     |   | (1,406,720                   | )      | 1995                  |   | Oct-97             |   | 40                                                          |   |
| Southgate Shopping Center  New Port Richey, FL |   | (542,467                     | )      | 1966                  |   | Aug-97             |   | 40                                                          |   |
| New Port Richey Center  New Port Richey, FL    |   | (2,572                       | )      | 1988                  |   | Dec-02             |   | 40                                                          |   |
| Presidential Plaza  North Lauderdale, FL       |   | (504,981                     | )      | 1977                  |   | Apr-97             |   | 40                                                          |   |
| Colonial Marketplace  Orlando, FL              |   | (434,431                     | )      | 1986                  |   | Apr-98             |   | 40                                                          |   |
| Pointe*Orlando  Orlando, FL                    |   | (4,655,148                   | )      | 1997                  |   | Nov-99             |   | 40                                                          |   |
| Silver Hills  Orlando, FL                      |   | (45,352                      | )      | 1985                  |   | Mar-02             |   | 40                                                          |   |
| 23rd Street Station  Panama City, FL           |   | (812,699                     | )      | 1986                  |   | Jul-98             |   | 40                                                          |   |
| Pensacola Square  Pensacola, FL                |   | (9,565                       | )      | 1986                  |   | Dec-02             |   | 40                                                          |   |
| Riverwood Shopping Center  Port Orange, FL     |   | (212,884                     | )      | 1990                  |   | Sep-97             |   | 40                                                          |   |
| Seminole Plaza  Seminole, FL                   |   | (269,736                     | )      | 1964                  |   | Jun-98             |   | 40                                                          |   |
| Rutland Plaza  St. Petersburg, FL              |   | (929,218                     | )      | 1964                  |   | Nov-96             |   | 40                                                          |   |
| Eagles Park  St. Petersburg, FL                |   | (116,492                     | )      | 1986                  |   | Mar-02             |   | 40                                                          |   |
| Skyway Plaza  St. Petersburg, FL               |   | (5,272                       | )      | 1959                  |   | Dec-02             |   | 40                                                          |   |
| Downtown Publix  Stuart, FL                    |   | (123,296                     | )      | 1965                  |   | Mar-02             |   | 40                                                          |   |
| Tarpon Mall  Tarpon Springs, FL                |   | (8,213                       | )      | 1950                  |   | Dec-02             |   | 40                                                          |   |
| Southgate Plaza - Albany  Albany, GA           |   | (366,642                     | )      | 1969                  |   | Jul-90             |   | 40                                                          |   |
| Albany Plaza  Albany, GA                       |   | (648,101                     | )      | 1968                  |   | May-94             |   | 40                                                          |   |
| Albany I  Albany, GA                           |   | (200,389                     | )      | 1981                  |   | Aug-93             |   | 40                                                          |   |
| Perlis Plaza  Americus, GA                     |   | (1,768,058                   | )      | 1972                  |   | Jul-90             |   | 40                                                          |   |
| Northeast Plaza  Atlanta, GA                   |   | (17,428                      | )      | 1952                  |   | Dec-02             |   | 40                                                          |   |
| North Leg Plaza  Augusta, GA                   |   | (3,448                       | )      | 1987                  |   | Dec-02             |   | 40                                                          |   |
| Sweetwater Village  Austell, GA                |   | (587,572                     | )      | 1985                  |   | Oct-94             |   | 40                                                          |   |
| Cedar Plaza  Cedartown, GA                     |   | (743,008                     | )      | 1994                  |   | Oct-94             |   | 40                                                          |   |

 

F-39

----

 

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                         |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|------------------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                 |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                                      |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| Covered Bridge Shopping  Clayton, GA                 |   | (2,918,200       | )      | 937,028                     |   | 2,811,085                                        |   |                                                          |   | 937,028 |   | 2,811,085 |   | 3,748,113 |   |
| Cordele Square  Cordele, GA                          |   |             |   | 864,335                     |   | 3,457,337                                        |   | 660,199                                                       |   | 864,335 |   | 4,117,536 |   | 4,981,871 |   |
| Southgate Plaza - Cordel  Cordele, GA                |   |             |   | 202,682                     |   | 958,998                                          |   | 241,654                                                       |   | 202,682 |   | 1,200,651 |   | 1,403,333 |   |
| Habersham Village  Cornelia, GA                      |   |             |   | 1,301,643                   |   | 4,340,422                                        |   | 74,310                                                        |   | 1,301,643 |   | 4,414,732 |   | 5,716,376 |   |
| Habersham Crossing  Cornelia, GA                     |   | (3,764,052       | )      | 1,644,936                   |   | 6,580,461                                        |   | 84,303                                                        |   | 1,644,936 |   | 6,664,763 |   | 8,309,699 |   |
| Covington Gallery  Covington, GA                     |   |             |   | 2,494,987                   |   | 9,979,830                                        |   | 105,426                                                       |   | 2,494,987 |   | 10,085,256 |   | 12,580,242 |   |
| Northside SC  Dalton, GA                             |   | (2,231,268       | )      | 966,750                     |   | 4,003,468                                        |   | 330,431                                                       |   | 966,750 |   | 4,333,899 |   | 5,300,649 |   |
| Midway Village Shopping Center   Douglasville, GA    |   |             |   | 1,553,580                   |   | 2,887,506                                        |   | 47,585                                                        |   | 1,553,580 |   | 2,935,091 |   | 4,488,671 |   |
| Westgate - Dublin  Dublin, GA                        |   |             |   | 699,174                     |   | 5,834,809                                        |   | 412,852                                                       |   | 699,174 |   | 6,247,662 |   | 6,946,836 |   |
| Rite Aid  East Albany, GA                            |   |             |   | 92,794                      |   | 358,295                                          |   |                                                          |   | 92,794 |   | 358,295 |   | 451,089 |   |
| Kroger  East Albany, GA                              |   |             |   | 336,205                     |   | 1,297,375                                        |   |                                                          |   | 336,205 |   | 1,297,375 |   | 1,633,580 |   |
| New Chastain Corners Shopping Center  Marietta, GA   |   |             |   | 2,457,446                   |   | 5,741,641                                        |   | 251,065                                                       |   | 2,457,446 |   | 5,992,707 |   | 8,450,153 |   |
| Marshall's At Eastlake Shopping Center  Marietta, GA |   |             |   | 1,710,517                   |   | 2,069,483                                        |   | 56,630                                                        |   | 1,710,517 |   | 2,126,113 |   | 3,836,630 |   |
| Pavillions At East Lake  Marietta, GA                |   |             |   | 2,812,000                   |   | 11,249,970                                       |   | 192,370                                                       |   | 2,812,000 |   | 11,442,340 |   | 14,254,340 |   |
| Village At Southlake  Morrow, GA                     |   |             |   | 1,733,198                   |   | 3,017,677                                        |   | 10,990                                                        |   | 1,733,198 |   | 3,028,667 |   | 4,761,865 |   |
| Merchants Crossing  Newnan, GA                       |   | (5,911,708       | )      | 2,077,145                   |   | 6,231,434                                        |   |                                                          |   | 2,077,145 |   | 6,231,434 |   | 8,308,579 |   |
| Perry Marketplace  Perry, GA                         |   | (5,005,722       | )      | 2,776,518                   |   | 11,105,959                                       |   | 23,742                                                        |   | 2,776,518 |   | 11,129,701 |   | 13,906,219 |   |
| Creekwood Shopping Center  Rex, GA                   |   |             |   | 1,160,203                   |   | 3,482,609                                        |   | 21,972                                                        |   | 1,160,203 |   | 3,504,581 |   | 4,664,783 |   |
| Shops Of Riverdale  Riverdale, GA                    |   |             |   | 327,573                     |   | 1,310,374                                        |   | 4,075                                                         |   | 327,573 |   | 1,314,449 |   | 1,642,021 |   |
| Victory Square  Savannah, GA                         |   |             |   | 1,206,181                   |   | 4,824,725                                        |   | 247,677                                                       |   | 1,206,181 |   | 5,072,402 |   | 6,278,583 |   |
| Eisenhower Square Shopping Center  Savannah, GA      |   |             |   | 1,029,500                   |   | 4,117,700                                        |   | 250,945                                                       |   | 1,029,500 |   | 4,368,645 |   | 5,398,145 |   |
| Wisteria Village  Snellville, GA                     |   |             |   | 2,542,919                   |   | 10,200,657                                       |   | 74,954                                                        |   | 2,542,919 |   | 10,275,611 |   | 12,818,530 |   |
| University Commons  Statesboro, GA                   |   |             |   | 1,312,739                   |   | 5,250,755                                        |   |                                                          |   | 1,312,739 |   | 5,250,755 |   | 6,563,494 |   |
| Westgate - Tifton  Tifton, GA                        |   |             |   | 156,269                     |   | 304,704                                          |   | 5,661                                                         |   | 156,269 |   | 310,365 |   | 466,635 |   |
| Tift-Town  Tifton, GA                                |   |             |   | 271,444                     |   | 1,325,238                                        |   | 379,124                                                       |   | 271,444 |   | 1,704,362 |   | 1,975,806 |   |

 

[Additional columns below]

 

 

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                         |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|------------------------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                                      |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| Covered Bridge Shopping  Clayton, GA                 |   | (2,835                        | )      | 1986                  |   | Dec-02             |   | 40                                                         |   |
| Cordele Square  Cordele, GA                          |   | (1,183,216                    | )      | 1968                  |   | Jul-90             |   | 40                                                         |   |
| Southgate Plaza - Cordel  Cordele, GA                |   | (337,061                      | )      | 1969                  |   | Jul-90             |   | 40                                                         |   |
| Habersham Village  Cornelia, GA                      |   | (1,164,840                    | )      | 1985                  |   | May-92             |   | 40                                                         |   |
| Habersham Crossing  Cornelia, GA                     |   | (693,080                      | )      | 1990                  |   | Mar-96             |   | 40                                                         |   |
| Covington Gallery  Covington, GA                     |   | (1,053,071                    | )      | 1991                  |   | Dec-93             |   | 40                                                         |   |
| Northside SC  Dalton, GA                             |   | (410,702                      | )      | 1990                  |   | Oct-95             |   | 40                                                         |   |
| Midway Village Shopping Center  Douglasville, GA     |   | (408,518                      | )      | 1989                  |   | May-97             |   | 40                                                         |   |
| Westgate - Dublin  Dublin, GA                        |   | (1,879,543                    | )      | 1974                  |   | Jul-90             |   | 40                                                         |   |
| Rite Aid  East Albany, GA                            |   | (38,572                       | )      | 1982                  |   | Aug-93             |   | 40                                                         |   |
| Kroger  East Albany, GA                              |   | (139,672                      | )      | 1982                  |   | Aug-93             |   | 40                                                         |   |
| New Chastain Corners Shopping Center  Marietta, GA   |   | (813,717                      | )      | 1990                  |   | Jul-97             |   | 40                                                         |   |
| Marshall's At Eastlake Shopping Center  Marietta, GA |   | (222,817                      | )      | 1982                  |   | Oct-98             |   | 40                                                         |   |
| Pavillions At East Lake  Marietta, GA                |   | (1,087,151                    | )      | 1986                  |   | Mar-99             |   | 40                                                         |   |
| Village At Southlake  Morrow, GA                     |   | (356,836                      | )      | 1983                  |   | Apr-98             |   | 40                                                         |   |
| Merchants Crossing  Newnan, GA                       |   | (6,084                        | )      | 1974                  |   | Dec-02             |   | 40                                                         |   |
| Perry Marketplace  Perry, GA                         |   | (1,170,349                    | )      | 1992                  |   | Dec-92             |   | 40                                                         |   |
| Creekwood Shopping Center  Rex, GA                   |   | (485,175                      | )      | 1990                  |   | May-97             |   | 40                                                         |   |
| Shops Of Riverdale  Riverdale, GA                    |   | (138,292                      | )      | 1995                  |   | Feb-96             |   | 40                                                         |   |
| Victory Square  Savannah, GA                         |   | (1,288,680                    | )      | 1986                  |   | Jul-92             |   | 40                                                         |   |
| Eisenhower Square Shopping Center  Savannah, GA      |   | (590,853                      | )      | 1985                  |   | Jul-97             |   | 40                                                         |   |
| Wisteria Village  Snellville, GA                     |   | (1,094,144                    | )      | 1985                  |   | Oct-95             |   | 40                                                         |   |
| University Commons  Statesboro, GA                   |   | (552,111                      | )      | 1994                  |   | Jul-96             |   | 40                                                         |   |
| Westgate - Tifton  Tifton, GA                        |   | (95,719                       | )      | 1980                  |   | Jul-90             |   | 40                                                         |   |
| Tift-Town  Tifton, GA                                |   | (475,690                      | )      | 1965                  |   | Jul-90             |   | 40                                                         |   |

 

F-40

----

 

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                     |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|--------------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                             |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                                  |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| Kmart  Atlantic, IA                              |   |             |   | 293,138                     |   | 1,134,513                                        |   |                                                          |   | 293,138 |   | 1,134,513 |   | 1,427,652 |   |
| Haymarket Square  Des Moines, IA                 |   |             |   | 2,056,172                   |   | 8,224,688                                        |   | 668,609                                                       |   | 2,056,172 |   | 8,893,297 |   | 10,949,469 |   |
| Haymarket Mall  Des Moines, IA                   |   |             |   | 1,230,252                   |   | 5,031,799                                        |   | 572,871                                                       |   | 1,230,252 |   | 5,604,670 |   | 6,834,922 |   |
| Village Mart  Aurora, IL                         |   |             |   | 1,246,197                   |   | 3,738,590                                        |   |                                                          |   | 1,246,197 |   | 3,738,590 |   | 4,984,787 |   |
| Festival Center  Bradley, IL                     |   | (2,971,637       | )      | 912,590                     |   | 2,737,771                                        |   |                                                          |   | 912,590 |   | 2,737,771 |   | 3,650,361 |   |
| Southfield Plaza Shopping Center  Bridgeview, IL |   |             |   | 3,188,496                   |   | 3,897,167                                        |   | 2,597,774                                                     |   | 3,188,496 |   | 6,494,941 |   | 9,683,437 |   |
| Eagle Food Center  Decatur, IL                   |   |             |   | 317,157                     |   | 276,654                                          |   |                                                          |   | 317,157 |   | 276,654 |   | 593,811 |   |
| Pershing Plaza  Decatur, IL                      |   |             |   | 750,298                     |   | 2,250,894                                        |   |                                                          |   | 750,298 |   | 2,250,894 |   | 3,001,192 |   |
| Freeport Plaza  Freeport, IL                     |   |             |   | 1,197,600                   |   | 3,592,798                                        |   |                                                          |   | 1,197,600 |   | 3,592,798 |   | 4,790,398 |   |
| Westridge Court Shopping Center  Naperville, IL  |   |             |   | 9,843,696                   |   | 39,373,783                                       |   | 712,520                                                       |   | 9,843,696 |   | 40,086,303 |   | 49,929,999 |   |
| Olympia Corners  Olympia Fields, IL              |   | (5,729,056       | )      | 2,010,324                   |   | 6,030,973                                        |   |                                                          |   | 2,010,324 |   | 6,030,973 |   | 8,041,297 |   |
| Kroger  Ottawa, IL                               |   |             |   | 474,403                     |   | 1,835,607                                        |   |                                                          |   | 474,403 |   | 1,835,607 |   | 2,310,010 |   |
| Eagle Food Center  Peoria, IL                    |   |             |   | 401,504                     |   | 1,346,980                                        |   |                                                          |   | 401,504 |   | 1,346,980 |   | 1,748,484 |   |
| Tinley Park Plaza  Tinley Park, IL               |   |             |   | 2,607,702                   |   | 10,430,808                                       |   | 419,041                                                       |   | 2,607,702 |   | 10,849,848 |   | 13,457,550 |   |
| Kroger  Waterloo, IL                             |   |             |   | 352,351                     |   | 1,359,954                                        |   |                                                          |   | 352,351 |   | 1,359,954 |   | 1,712,305 |   |
| Columbus Center  Columbus, IN                    |   |             |   | 1,196,269                   |   | 3,608,315                                        |   | 1,223,978                                                     |   | 1,196,269 |   | 4,832,293 |   | 6,028,562 |   |
| Elkhart Plaza West  Elkhart, IN                  |   |             |   | 1,613,694                   |   | 4,841,082                                        |   |                                                          |   | 1,613,694 |   | 4,841,082 |   | 6,454,776 |   |
| Elkhart Market Centre  Goshen,IN                 |   | (14,069,536      | )      | 4,785,496                   |   | 14,356,488                                       |   |                                                          |   | 4,785,496 |   | 14,356,488 |   | 19,141,984 |   |
| Eagle Food Center  Hobart, IN                    |   |             |   | 332,606                     |   | 322,624                                          |   |                                                          |   | 332,606 |   | 322,624 |   | 655,230 |   |
| Marwood Plaza  Indianapolis, IN                  |   | (5,156,795       | )      | 2,217,827                   |   | 6,653,481                                        |   |                                                          |   | 2,217,827 |   | 6,653,481 |   | 8,871,308 |   |
| Westlane Shopping Center  Indianapolis, IN       |   |             |   | 898,887                     |   | 2,696,662                                        |   |                                                          |   | 898,887 |   | 2,696,662 |   | 3,595,549 |   |
| Jasper Manor  Jasper, IN                         |   |             |   | 1,319,937                   |   | 7,110,063                                        |   | 107,055                                                       |   | 1,319,937 |   | 7,217,118 |   | 8,537,055 |   |
| Valley View Plaza  Marion, IN                    |   |             |   | 684,867                     |   | 2,739,492                                        |   | 76,702                                                        |   | 684,867 |   | 2,816,194 |   | 3,501,061 |   |
| Eagle Food Center  Michigan City, IN             |   |             |   | 275,395                     |   | 356,449                                          |   |                                                          |   | 275,395 |   | 356,449 |   | 631,844 |   |
| Town Fair Shopping Center  Princeton, IN         |   |             |   | 1,104,876                   |   | 3,759,503                                        |   | 70,442                                                        |   | 1,104,876 |   | 3,829,945 |   | 4,934,821 |   |

 

[Additional columns below]

 

 

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                     |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|--------------------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                                  |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| Kmart  Atlantic, IA                              |   | (121,966                      | )      | 1980                  |   | Jan-94             |   | 40                                                         |   |
| Haymarket Square  Des Moines, IA                 |   | (1,685,913                    | )      | 1979                  |   | May-95             |   | 40                                                         |   |
| Haymarket Mall  Des Moines, IA                   |   | (1,033,145                    | )      | 1979                  |   | May-95             |   | 40                                                         |   |
| Village Mart  Aurora, IL                         |   | (3,894                        | )      | 1978                  |   | Dec-02             |   | 40                                                         |   |
| Festival Center  Bradley, IL                     |   | (2,513                        | )      | 1989                  |   | Dec-02             |   | 40                                                         |   |
| Southfield Plaza Shopping Center  Bridgeview, IL |   | (935,605                      | )      | 1958                  |   | Dec-96             |   | 40                                                         |   |
| Eagle Food Center  Decatur, IL                   |   | (112,244                      | )      | 1983                  |   | Aug-93             |   | 40                                                         |   |
| Pershing Plaza  Decatur, IL                      |   | (2,345                        | )      | 1986                  |   | Dec-02             |   | 40                                                         |   |
| Freeport Plaza  Freeport, IL                     |   | (3,743                        | )      | 1968                  |   | Dec-02             |   | 40                                                         |   |
| Westridge Court Shopping Center  Naperville, IL  |   | (5,441,984                    | )      | 1990                  |   | Jul-97             |   | 40                                                         |   |
| Olympia Corners  Olympia Fields, IL              |   | (6,102                        | )      | 1988                  |   | Dec-02             |   | 40                                                         |   |
| Kroger  Ottawa, IL                               |   | (197,352                      | )      | 1982                  |   | Aug-93             |   | 40                                                         |   |
| Eagle Food Center  Peoria, IL                    |   | (156,328                      | )      | 1983                  |   | Aug-93             |   | 40                                                         |   |
| Tinley Park Plaza  Tinley Park, IL               |   | (1,961,441                    | )      | 1973                  |   | Sep-95             |   | 40                                                         |   |
| Kroger  Waterloo, IL                             |   | (137,968                      | )      | 1982                  |   | Aug-93             |   | 40                                                         |   |
| Columbus Center  Columbus, IN                    |   | (1,614,387                    | )      | 1964                  |   | Dec-88             |   | 40                                                         |   |
| Elkhart Plaza West  Elkhart, IN                  |   | (5,043                        | )      | 1997                  |   | Dec-02             |   | 40                                                         |   |
| Elkhart Market Centre  Goshen,IN                 |   | (14,507                       | )      | 1990                  |   | Dec-02             |   | 40                                                         |   |
| Eagle Food Center  Hobart, IN                    |   | (118,005                      | )      | 1983                  |   | Aug-93             |   | 40                                                         |   |
| Marwood Plaza  Indianapolis, IN                  |   | (6,360                        | )      | 1966                  |   | Dec-02             |   | 40                                                         |   |
| Westlane Shopping Center  Indianapolis, IN       |   | (2,809                        | )      | 1968                  |   | Dec-02             |   | 40                                                         |   |
| Jasper Manor  Jasper, IN                         |   | (1,941,011                    | )      | 1990                  |   | Feb-92             |   | 40                                                         |   |
| Valley View Plaza  Marion, IN                    |   | (294,027                      | )      | 1989                  |   | Mar-94             |   | 40                                                         |   |
| Eagle Food Center  Michigan City, IN             |   | (98,942                       | )      | 1983                  |   | Aug-93             |   | 40                                                         |   |
| Town Fair Shopping Center  Princeton, IN         |   | (937,078                      | )      | 1991                  |   | Feb-93             |   | 40                                                         |   |

 

F-41

----

 

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                 |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|----------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                         |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                              |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| Knox Plaza  Vincennes, IN                    |   |             |   | 411,877                     |   | 1,235,631                                        |   |                                                          |   | 411,877 |   | 1,235,631 |   | 1,647,508 |   |
| Wabash Crossing  Wabash, IN                  |   |             |   | 1,599,488                   |   | 6,470,511                                        |   | 43,664                                                        |   | 1,599,488 |   | 6,514,175 |   | 8,113,663 |   |
| Green River Plaza  Campbellsville, KY        |   |             |   | 2,410,959                   |   | 9,644,967                                        |   | 302,463                                                       |   | 2,410,959 |   | 9,947,430 |   | 12,358,389 |   |
| Kmart Plaza  Elizabethtown, KY               |   |             |   | 1,703,868                   |   | 6,815,386                                        |   | 67,100                                                        |   | 1,703,868 |   | 6,882,486 |   | 8,586,354 |   |
| Florence Plaza  Florence, KY                 |   |             |   | 2,524,185                   |   | 7,572,556                                        |   |                                                          |   | 2,524,185 |   | 7,572,556 |   | 10,096,741 |   |
| Highland Commons  Glasgow, KY                |   | (4,274,111       | )      | 1,715,609                   |   | 6,862,680                                        |   | 76,667                                                        |   | 1,715,609 |   | 6,939,347 |   | 8,654,957 |   |
| J*Town Center  Jeffersontown, KY             |   |             |   | 1,331,074                   |   | 4,121,997                                        |   | 504,075                                                       |   | 1,331,074 |   | 4,626,073 |   | 5,957,147 |   |
| Mist Lake Plaza  Lexington, KY               |   | (9,035,915       | )      | 4,075,659                   |   | 16,405,956                                       |   | 195,844                                                       |   | 4,075,659 |   | 16,601,800 |   | 20,677,459 |   |
| London Marketplace  London, KY               |   | (4,394,600       | )      | 2,520,416                   |   | 10,081,562                                       |   | 64,193                                                        |   | 2,520,416 |   | 10,145,755 |   | 12,666,171 |   |
| Piccadilly Square  Louisville, KY            |   |             |   | 337,670                     |   | 1,588,409                                        |   | 408,358                                                       |   | 337,670 |   | 1,996,767 |   | 2,334,437 |   |
| Eastgate Shopping Center  Louisville, KY     |   |             |   | 1,945,679                   |   | 7,792,717                                        |   | 316,287                                                       |   | 1,945,679 |   | 8,109,004 |   | 10,054,684 |   |
| Towne Square North  Owensboro, KY            |   |             |   | 2,277,220                   |   | 6,831,659                                        |   |                                                          |   | 2,277,220 |   | 6,831,659 |   | 9,108,879 |   |
| Lexington Road Plaza  Versailles, KY         |   | (7,510,586       | )      | 2,856,229                   |   | 11,425,027                                       |   | 96,511                                                        |   | 2,856,229 |   | 11,521,538 |   | 14,377,767 |   |
| Karam Shopping Center  Lafayette, LA         |   |             |   | 730,937                     |   | 2,192,812                                        |   |                                                          |   | 730,937 |   | 2,192,812 |   | 2,923,750 |   |
| Desiard Plaza  Monroe, LA                    |   |             |   | 517,797                     |   | 1,553,392                                        |   |                                                          |   | 517,797 |   | 1,553,392 |   | 2,071,189 |   |
| Lagniappe Village  New Iberia, LA            |   | (6,005,448       | )      | 3,122,914                   |   | 12,491,850                                       |   | 118,641                                                       |   | 3,122,914 |   | 12,610,491 |   | 15,733,405 |   |
| Iberia Plaza  New Iberia, LA                 |   |             |   | 1,295,361                   |   | 3,730,569                                        |   |                                                          |   | 1,295,361 |   | 3,730,569 |   | 5,025,930 |   |
| The Pines  Pineville, LA                     |   |             |   | 2,636,767                   |   | 5,466,391                                        |   | 6,948                                                         |   | 2,636,767 |   | 5,473,338 |   | 8,110,106 |   |
| Brookshire Grocery Co.  West Monroe, LA      |   |             |   | 388,984                     |   | 1,501,424                                        |   |                                                          |   | 388,984 |   | 1,501,424 |   | 1,890,408 |   |
| Points West Shopping Center  Brockton, MA    |   |             |   | 1,846,851                   |   | 5,540,554                                        |   |                                                          |   | 1,846,851 |   | 5,540,554 |   | 7,387,406 |   |
| Holyoke Shopping Center  Holyoke, MA         |   |             |   | 2,979,803                   |   | 8,939,408                                        |   |                                                          |   | 2,979,803 |   | 8,939,408 |   | 11,919,211 |   |
| Liberty Plaza  Randallstown, MD              |   |             |   | 2,075,809                   |   | 8,303,237                                        |   | 354,985                                                       |   | 2,075,809 |   | 8,658,221 |   | 10,734,031 |   |
| Rising Sun Towne Centre  Rising Sun, MD      |   |             |   | 1,161,300                   |   | 4,389,359                                        |   | 109,188                                                       |   | 1,161,300 |   | 4,498,547 |   | 5,659,847 |   |
| Maple Village Shopping Center  Ann Arbor, MI |   |             |   | 1,622,732                   |   | 7,501,205                                        |   | 1,134,298                                                     |   | 1,622,732 |   | 8,635,503 |   | 10,258,235 |   |
| Farmington Crossroads  Farmington, MI        |   |             |   | 1,092,200                   |   | 4,368,800                                        |   | 182,325                                                       |   | 1,092,200 |   | 4,551,125 |   | 5,643,325 |   |

 

[Additional columns below]

 

 

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                 |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|----------------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                              |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| Knox Plaza  Vincennes, IN                    |   | (1,287                        | )      | 1989                  |   | Dec-02             |   | 40                                                         |   |
| Wabash Crossing  Wabash, IN                  |   | (1,470,800                    | )      | 1988                  |   | Dec-93             |   | 40                                                         |   |
| Green River Plaza  Campbellsville, KY        |   | (1,040,541                    | )      | 1989                  |   | Mar-96             |   | 40                                                         |   |
| Kmart Plaza  Elizabethtown, KY               |   | (719,458                      | )      | 1992                  |   | Feb-93             |   | 40                                                         |   |
| Florence Plaza  Florence, KY                 |   | (7,888                        | )      | 1985                  |   | Dec-02             |   | 40                                                         |   |
| Highland Commons  Glasgow, KY                |   | (734,094                      | )      | 1992                  |   | Mar-93             |   | 40                                                         |   |
| J*Town Center  Jeffersontown, KY             |   | (1,614,612                    | )      | 1959                  |   | Oct-88             |   | 40                                                         |   |
| Mist Lake Plaza  Lexington, KY               |   | (1,741,028                    | )      | 1993                  |   | Jul-98             |   | 40                                                         |   |
| London Marketplace  London, KY               |   | (1,065,492                    | )      | 1994                  |   | Mar-94             |   | 40                                                         |   |
| Piccadilly Square  Louisville, KY            |   | (620,234                      | )      | 1973                  |   | Apr-89             |   | 40                                                         |   |
| Eastgate Shopping Center  Louisville, KY     |   | (1,793,549                    | )      | 1987                  |   | Nov-93             |   | 40                                                         |   |
| Towne Square  North Owensboro, KY            |   | (7,116                        | )      | 1988                  |   | Dec-02             |   | 40                                                         |   |
| Lexington Road Plaza  Versailles, KY         |   | (1,204,533                    | )      | 1994                  |   | Apr-94             |   | 40                                                         |   |
| Karam Shopping Center  Lafayette, LA         |   | (2,284                        | )      | 1970                  |   | Dec-02             |   | 40                                                         |   |
| Desiard Plaza  Monroe, LA                    |   | (1,618                        | )      | 1984                  |   | Dec-02             |   | 40                                                         |   |
| Lagniappe Village  New Iberia, LA            |   | (1,324,511                    | )      | 1990                  |   | Jul-98             |   | 40                                                         |   |
| Iberia Plaza  New Iberia, LA                 |   | (77,720                       | )      | 1983                  |   | Mar-02             |   | 40                                                         |   |
| The Pines  Pineville, LA                     |   | (113,970                      | )      | 1991                  |   | Mar-02             |   | 40                                                         |   |
| Brookshire Grocery Co.  West Monroe, LA      |   | (161,634                      | )      | 1981                  |   | Aug-93             |   | 40                                                         |   |
| Points West Shopping Center  Brockton, MA    |   | (5,771                        | )      | 1960                  |   | Dec-02             |   | 40                                                         |   |
| Holyoke Shopping Center  Holyoke, MA         |   | (9,312                        | )      | 1971                  |   | Dec-02             |   | 40                                                         |   |
| Liberty Plaza  Randallstown, MD              |   | (1,634,578                    | )      | 1962                  |   | May-95             |   | 40                                                         |   |
| Rising Sun Towne Centre  Rising Sun, MD      |   | (400,377                      | )      | 1998                  |   | Jun-99             |   | 40                                                         |   |
| Maple Village Shopping Center  Ann Arbor, MI |   | (1,542,844                    | )      | 1965                  |   | Oct-94             |   | 40                                                         |   |
| Farmington Crossroads  Farmington, MI        |   | (781,925                      | )      | 1986                  |   | Dec-95             |   | 40                                                         |   |

 

F-42

----

 

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                        |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|-----------------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                                     |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| Kindercare  Kalamazoo, MI                           |   |             |   |                        |   |                                             |   |                                                          |   |   |   |   |   |   |   |
| Delta Center  Lansing, MI                           |   |             |   | 2,405,200                   |   | 9,620,800                                        |   | 4,940,042                                                     |   | 2,405,200 |   | 14,560,842 |   | 16,966,042 |   |
| Hampton Village Centre  Rochester Hills, MI         |   | (29,398,394      | )      | 7,209,596                   |   | 34,541,500                                       |   | 536,720                                                       |   | 7,209,596 |   | 35,078,220 |   | 42,287,816 |   |
| Fashion Corners  Saginaw, MI                        |   |             |   | 2,244,800                   |   | 8,799,200                                        |   | 2,404,726                                                     |   | 2,244,800 |   | 11,203,926 |   | 13,448,726 |   |
| Green Acres Shopping Center  Saginaw, MI            |   | (11,880,940      | )      | 3,744,450                   |   | 11,233,350                                       |   |                                                          |   | 3,744,450 |   | 11,233,350 |   | 14,977,800 |   |
| Hall Road Crossing  Shelby Township, MI             |   |             |   | 2,595,500                   |   | 10,382,000                                       |   | 838,256                                                       |   | 2,595,500 |   | 11,220,256 |   | 13,815,756 |   |
| Southfield Plaza  Southfield, MI                    |   |             |   | 2,052,995                   |   | 8,056,980                                        |   | (67,569                                                       | )      | 2,052,995 |   | 7,989,411 |   | 10,042,406 |   |
| Delco Plaza  Sterling Heights, MI                   |   |             |   | 1,277,504                   |   | 5,109,367                                        |   | 144,715                                                       |   | 1,277,504 |   | 5,254,082 |   | 6,531,586 |   |
| Westland Crossing  Westland, MI                     |   |             |   | 2,046,000                   |   | 8,184,000                                        |   | 264,589                                                       |   | 2,046,000 |   | 8,448,589 |   | 10,494,589 |   |
| Washtenaw Fountain Plaza  Ypsilanti, MI             |   |             |   | 1,530,281                   |   | 6,121,123                                        |   | 208,913                                                       |   | 1,530,281 |   | 6,330,036 |   | 7,860,317 |   |
| Roundtree Place  Ypsilanti, MI                      |   | (6,641,299       | )      | 2,995,774                   |   | 11,983,221                                       |   | 169,743                                                       |   | 2,995,774 |   | 12,152,964 |   | 15,148,738 |   |
| University IV Shopping Center  Spring Lake Park, MN |   | (2,327,440       | )      | 987,865                     |   | 2,963,594                                        |   |                                                          |   | 987,865 |   | 2,963,594 |   | 3,951,459 |   |
| Jacksonian Plaza  Jackson, MS                       |   |             |   | 1,771,170                   |   | 1,053,771                                        |   |                                                          |   | 1,771,170 |   | 1,053,771 |   | 2,824,941 |   |
| Stanly Country Plaza  Albermarle, NC                |   |             |   | 600,418                     |   | 2,401,671                                        |   | 46,169                                                        |   | 600,418 |   | 2,447,840 |   | 3,048,257 |   |
| Village Marketplace Center  Asheboro, NC            |   |             |   | 1,155,652                   |   | 3,535,109                                        |   | 8,375                                                         |   | 1,155,652 |   | 3,543,484 |   | 4,699,136 |   |
| Macon Plaza  Franklin, NC                           |   |             |   | 832,590                     |   | 2,497,770                                        |   |                                                          |   | 832,590 |   | 2,497,770 |   | 3,330,360 |   |
| Foothills Market  Jonesville, NC                    |   |             |   | 644,555                     |   | 2,578,295                                        |   | 28,034                                                        |   | 644,555 |   | 2,606,329 |   | 3,250,884 |   |
| Chapel Square Shopping Center  Kannapolis, NC       |   | (1,915,695       | )      | 918,460                     |   | 3,673,918                                        |   | 5,748                                                         |   | 918,460 |   | 3,679,666 |   | 4,598,126 |   |
| Kinston Pointe  Kinston, NC                         |   |             |   | 2,235,052                   |   | 8,940,354                                        |   | 61,604                                                        |   | 2,235,052 |   | 9,001,959 |   | 11,237,011 |   |
| Roxboro Square  Roxboro, NC                         |   |             |   | 1,448,313                   |   | 5,793,289                                        |   | 123,757                                                       |   | 1,448,313 |   | 5,917,046 |   | 7,365,360 |   |
| Siler Crossing  Siler City, NC                      |   |             |   | 1,779,566                   |   | 7,118,100                                        |   | 19,242                                                        |   | 1,779,566 |   | 7,137,342 |   | 8,916,908 |   |
| Crossroads Shopping Center  Statesville, NC         |   |             |   | 5,261,636                   |   | 21,177,392                                       |   | 34,702                                                        |   | 5,261,636 |   | 21,212,093 |   | 26,473,729 |   |
| Thomasville Crossing  Thomasville, NC               |   |             |   | 1,604,339                   |   | 6,417,145                                        |   |                                                          |   | 1,604,339 |   | 6,417,145 |   | 8,021,484 |   |
| Anson Station  Wadesboro, NC                        |   |             |   | 1,844,644                   |   | 5,118,172                                        |   | 48,372                                                        |   | 1,844,644 |   | 5,166,544 |   | 7,011,187 |   |
| Roanoke Landing  Williamston, NC                    |   |             |   | 2,519,288                   |   | 10,077,339                                       |   | 68,942                                                        |   | 2,519,288 |   | 10,146,281 |   | 12,665,570 |   |

 

[Additional columns below]

 

 

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                        |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|-----------------------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                                     |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| Kindercare  Kalamazoo, MI                           |   | (2,775                        | )      | 1990                  |   | Feb-91             |   | 40                                                         |   |
| Delta Center  Lansing, MI                           |   | (1,869,734                    | )      | 1985                  |   | Dec-95             |   | 40                                                         |   |
| Hampton Village Centre  Rochester Hills, MI         |   | (6,088,489                    | )      | 1990                  |   | Dec-95             |   | 40                                                         |   |
| Fashion Corners  Saginaw, MI                        |   | (1,556,116                    | )      | 1986                  |   | Dec-95             |   | 40                                                         |   |
| Green Acres Shopping Center  Saginaw, MI            |   | (11,323                       | )      | 1960                  |   | Dec-02             |   | 40                                                         |   |
| Hall Road Crossing  Shelby Township, MI             |   | (1,882,981                    | )      | 1985                  |   | Dec-95             |   | 40                                                         |   |
| Southfield Plaza  Southfield, MI                    |   | (965,887                      | )      | 1970                  |   | Feb-98             |   | 40                                                         |   |
| Delco Plaza  Sterling Heights, MI                   |   | (797,358                      | )      | 1973                  |   | Nov-96             |   | 40                                                         |   |
| Westland Crossing  Westland, MI                     |   | (666,408                      | )      | 1986                  |   | Nov-99             |   | 40                                                         |   |
| Washtenaw Fountain Plaza  Ypsilanti, MI             |   | (1,599,922                    | )      | 1989                  |   | Oct-92             |   | 40                                                         |   |
| Roundtree Place  Ypsilanti, MI                      |   | (1,277,282                    | )      | 1992                  |   | Jul-98             |   | 40                                                         |   |
| University IV Shopping Center  Spring Lake Park, MN |   | (2,870                        | )      | 2002                  |   | Dec-02             |   | 40                                                         |   |
| Jacksonian Plaza  Jackson, MS                       |   | (21,954                       | )      | 1990                  |   | Mar-02             |   | 40                                                         |   |
| Stanly Country Plaza  Albermarle, NC                |   | (261,638                      | )      | 1988                  |   | Mar-94             |   | 40                                                         |   |
| Village Marketplace Center  Asheboro, NC            |   | (419,625                      | )      | 1988                  |   | Apr-95             |   | 40                                                         |   |
| Macon Plaza  Franklin, NC                           |   | (2,602                        | )      | 1982                  |   | Dec-02             |   | 40                                                         |   |
| Foothills Market  Jonesville, NC                    |   | (274,061                      | )      | 1988                  |   | Jun-95             |   | 40                                                         |   |
| Chapel Square Shopping Center  Kannapolis, NC       |   | (386,861                      | )      | 1992                  |   | Dec-94             |   | 40                                                         |   |
| Kinston Pointe  Kinston, NC                         |   | (945,331                      | )      | 1991                  |   | Jul-95             |   | 40                                                         |   |
| Roxboro Square  Roxboro, NC                         |   | (648,606                      | )      | 1989                  |   | Jun-95             |   | 40                                                         |   |
| Siler Crossing  Siler City, NC                      |   | (748,459                      | )      | 1988                  |   | Jun-95             |   | 40                                                         |   |
| Crossroads Shopping Center  Statesville, NC         |   | (2,226,953                    | )      | 1991                  |   | Feb-96             |   | 40                                                         |   |
| Thomasville Crossing  Thomasville, NC               |   | (674,755                      | )      | 1996                  |   | Apr-97             |   | 40                                                         |   |
| Anson Station  Wadesboro, NC                        |   | (641,854                      | )      | 1988                  |   | Aug-95             |   | 40                                                         |   |
| Roanoke Landing  Williamston, NC                    |   | (1,067,269                    | )      | 1991                  |   | Jan-96             |   | 40                                                         |   |

 

F-43

----

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|---------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                        |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                             |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| **Retail**                                  |   |             |   |                        |   |                                             |   |                                                          |   |   |   |   |   |   |   |
| Stratford Commons  Winston-Salem, NC        |   | (5,542,615       | )      | 2,262,130                   |   | 9,045,975                                        |   | 5,333                                                         |   | 2,262,130 |   | 9,051,308 |   | 11,313,438 |   |
| Parkway Plaza  Winston-Salem, NC            |   | (12,883,152      | )      | 5,788,143                   |   | 17,364,428                                       |   |                                                          |   | 5,788,143 |   | 17,364,428 |   | 23,152,571 |   |
| Northern Automotive  Grand Island, NE       |   |             |   | 125,317                     |   | 483,440                                          |   |                                                          |   | 125,317 |   | 483,440 |   | 608,758 |   |
| Northern Automotive  Hastings, NE           |   |             |   | 89,784                      |   | 346,035                                          |   |                                                          |   | 89,784 |   | 346,035 |   | 435,818 |   |
| Laurel Square  Brick, NJ                    |   |             |   | 3,222,701                   |   | 9,283,302                                        |   | 649,348                                                       |   | 3,222,701 |   | 9,932,650 |   | 13,155,350 |   |
| Hamilton Plaza - Kmart Plaza  Hamilton, NJ  |   |             |   | 1,124,415                   |   | 4,513,658                                        |   | 160,719                                                       |   | 1,124,415 |   | 4,674,377 |   | 5,798,792 |   |
| Bennets Mills Plaza  Jackson, NJ            |   |             |   | 1,794,122                   |   | 6,399,888                                        |   | 113,841                                                       |   | 1,794,122 |   | 6,513,729 |   | 8,307,851 |   |
| Middletown Plaza  Middletown, NJ            |   |             |   | 1,204,829                   |   | 7,871,317                                        |   | 8,749,785                                                     |   | 1,204,829 |   | 16,621,102 |   | 17,825,932 |   |
| Tinton Falls Plaza  Tinton Falls, NJ        |   |             |   | 1,884,325                   |   | 6,308,392                                        |   | 100,631                                                       |   | 1,884,325 |   | 6,409,023 |   | 8,293,348 |   |
| Dover Park Plaza  Yardville, NJ             |   |             |   | 322,678                     |   | 3,027,322                                        |   | 64,649                                                        |   | 322,678 |   | 3,091,971 |   | 3,414,649 |   |
| Paseo del Norte  Albuquerque, NM            |   |             |   | 2,639,471                   |   |                                             |   |                                                          |   | 2,639,471 |   |   |   | 2,639,471 |   |
| Socorro  Socorro, NM                        |   |             |   | 953,411                     |   | 2,926,733                                        |   |                                                          |   | 953,411 |   | 2,926,733 |   | 3,880,143 |   |
| Galleria Commons  Henderson, NV             |   |             |   | 6,854,959                   |   | 27,590,493                                       |   | 8,790                                                         |   | 6,854,959 |   | 27,599,283 |   | 34,454,243 |   |
| Renaissance Center East  Las Vegas, NV      |   |             |   | 2,543,856                   |   | 10,175,427                                       |   | 159,094                                                       |   | 2,543,856 |   | 10,334,520 |   | 12,878,377 |   |
| Kietzke Center  Reno, NV                    |   |             |   | 3,069,735                   |   | 12,279,924                                       |   | 298,183                                                       |   | 3,069,735 |   | 12,578,108 |   | 15,647,843 |   |
| University Mall  Canton, NY                 |   |             |   | 115,261                     |   | 1,010,636                                        |   | 1,030,391                                                     |   | 115,261 |   | 2,041,026 |   | 2,156,288 |   |
| Cortlandville  Cortland, NY                 |   |             |   | 237,194                     |   | 1,440,393                                        |   | 387,847                                                       |   | 237,194 |   | 1,828,240 |   | 2,065,434 |   |
| Kmart Plaza  De Witt, NY                    |   |             |   | 943,079                     |   | 3,772,312                                        |   | 362,025                                                       |   | 943,079 |   | 4,134,336 |   | 5,077,415 |   |
| D & F Plaza  Dunkirk, NY                |   |             |   | 730,900                     |   | 2,158,094                                        |   | 1,295,287                                                     |   | 730,900 |   | 3,453,380 |   | 4,184,280 |   |
| Shopping Center - Elmira  Elmira, NY        |   |             |   | 110,318                     |   | 892,015                                          |   | 126,173                                                       |   | 110,318 |   | 1,018,188 |   | 1,128,506 |   |
| Genesse Valley Shopping Center  Geneseo, NY |   | (8,132,212       | )      | 3,640,104                   |   | 14,560,263                                       |   | 127,890                                                       |   | 3,640,104 |   | 14,688,153 |   | 18,328,258 |   |
| Pyramid Mall  Geneva, NY                    |   |             |   | 2,176,731                   |   | 8,706,926                                        |   | 393,372                                                       |   | 2,176,731 |   | 9,100,298 |   | 11,277,029 |   |
| Mckinley Plaza  Hamburg, NY                 |   |             |   | 1,247,680                   |   | 4,990,716                                        |   | 189,520                                                       |   | 1,247,680 |   | 5,180,236 |   | 6,427,916 |   |
| Hornell Plaza  Hornell, NY                  |   |             |   | 170,347                     |   | 20,874,229                                       |   | 135,692                                                       |   | 170,347 |   | 21,009,921 |   | 21,180,268 |   |
| Cayuga Plaza  Ithaca, NY                    |   |             |   | 1,399,238                   |   | 5,597,954                                        |   | 590,561                                                       |   | 1,399,238 |   | 6,188,515 |   | 7,587,753 |   |

 

[Additional columns below]

 

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|---------------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                             |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| **Retail**                                  |   |                          |   |                  |   |               |   |                                                       |   |
| Stratford Commons  Winston-Salem, NC        |   | (945,905                      | )      | 1995                  |   | Dec-96             |   | 40                                                         |   |
| Parkway Plaza  Winston-Salem, NC            |   | (17,127                       | )      | 1960                  |   | Dec-02             |   | 40                                                         |   |
| Northern Automotive  Grand Island, NE       |   | (52,068                       | )      | 1988                  |   | Dec-92             |   | 40                                                         |   |
| Northern Automotive  Hastings, NE           |   | (37,271                       | )      | 1988                  |   | Dec-92             |   | 40                                                         |   |
| Laurel Square  Brick, NJ                    |   | (2,595,997                    | )      | 1973                  |   | Jul-92             |   | 40                                                         |   |
| Hamilton Plaza - Kmart Plaza  Hamilton, NJ  |   | (1,012,214                    | )      | 1972                  |   | May-94             |   | 40                                                         |   |
| Bennets Mills Plaza  Jackson, NJ            |   | (1,339,102                    | )      | 1988                  |   | Sep-94             |   | 40                                                         |   |
| Middletown Plaza  Middletown, NJ            |   | (2,575,439                    | )      | 1972                  |   | Jan-75             |   | 40                                                         |   |
| Tinton Falls Plaza  Tinton Falls, NJ        |   | (780,345                      | )      | 1953                  |   | Jan-98             |   | 40                                                         |   |
| Dover Park Plaza  Yardville, NJ             |   | (219,884                      | )      | 1966                  |   | Jan-00             |   | 40                                                         |   |
| Paseo del Norte  Albuquerque, NM            |   |                          |   | 2001                  |   | Mar-02             |   | 40                                                         |   |
| Socorro  Socorro, NM                        |   | (60,974                       | )      | 1976                  |   | Mar-02             |   | 40                                                         |   |
| Galleria Commons  Henderson, NV             |   | (2,896,395                    | )      | 1998                  |   | Jun-98             |   | 40                                                         |   |
| Renaissance Center East  Las Vegas, NV      |   | (1,598,917                    | )      | 1981                  |   | Oct-96             |   | 40                                                         |   |
| Kietzke Center  Reno, NV                    |   | (1,299,881                    | )      | 1974                  |   | Jun-97             |   | 40                                                         |   |
| University Mall  Canton, NY                 |   | (1,210,814                    | )      | 1967                  |   | Jan-76             |   | 40                                                         |   |
| Cortlandville  Cortland, NY                 |   | (661,954                      | )      | 1984                  |   | Aug-87             |   | 40                                                         |   |
| Kmart Plaza  De Witt, NY                    |   | (948,744                      | )      | 1970                  |   | Aug-93             |   | 40                                                         |   |
| D & F Plaza  Dunkirk, NY                |   | (1,385,481                    | )      | 1967                  |   | Jan-86             |   | 40                                                         |   |
| Shopping Center - Elmira  Elmira, NY        |   | (318,238                      | )      | 1976                  |   | Feb-89             |   | 40                                                         |   |
| Genesse Valley Shopping Center  Geneseo, NY |   | (1,536,317                    | )      | 1993                  |   | Jul-98             |   | 40                                                         |   |
| Pyramid Mall  Geneva, NY                    |   | (2,092,434                    | )      | 1973                  |   | Aug-93             |   | 40                                                         |   |
| Mckinley Plaza  Hamburg, NY                 |   | (1,332,479                    | )      | 1991                  |   | Jun-92             |   | 40                                                         |   |
| Hornell Plaza  Hornell, NY                  |   | (2,203,852                    | )      | 1995                  |   | Jul-98             |   | 40                                                         |   |
| Cayuga Plaza  Ithaca, NY                    |   | (2,056,877                    | )      | 1969                  |   | May-89             |   | 40                                                         |   |

 

F-44

----

 

**NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                    |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|-------------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                            |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                                 |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| **Retail**                                      |   |             |   |                        |   |                                             |   |                                                          |   |   |   |   |   |   |   |
| Shops at Seneca Mall  Liverpool, NY             |   |             |   | 1,547,007                   |   | 6,188,026                                        |   | 859,440                                                       |   | 1,547,007 |   | 7,047,466 |   | 8,594,474 |   |
| Transit Road Plaza  Lockport, NY                |   |             |   | 424,680                     |   | 1,698,721                                        |   | 391,761                                                       |   | 424,680 |   | 2,090,481 |   | 2,515,161 |   |
| Sunshine Square  Medford, NY                    |   | (8,987,466       | )      | 3,525,378                   |   | 10,576,133                                       |   |                                                          |   | 3,525,378 |   | 10,576,133 |   | 14,101,511 |   |
| Wallkill Plaza  Middletown, NY                  |   |             |   | 2,748,152                   |   | 9,672,604                                        |   | 225,391                                                       |   | 2,748,152 |   | 9,897,995 |   | 12,646,147 |   |
| Monroe Shoprite Plaza  Monroe, NY               |   |             |   | 1,028,189                   |   | 8,649,212                                        |   | 194,034                                                       |   | 1,028,189 |   | 8,843,246 |   | 9,871,435 |   |
| Rockland Plaza  Nanuet, NY                      |   |             |   | 3,904,495                   |   | 3,056,456                                        |   | 5,053,485                                                     |   | 3,904,495 |   | 8,109,941 |   | 12,014,436 |   |
| South Plaza  Norwich, NY                        |   |             |   | 508,445                     |   | 1,053,373                                        |   | 1,678,240                                                     |   | 508,445 |   | 2,731,613 |   | 3,240,059 |   |
| Westgate Plaza - Oneonta  Oneonta, NY           |   |             |   | 143,021                     |   | 1,192,907                                        |   | 377,876                                                       |   | 143,021 |   | 1,570,783 |   | 1,713,805 |   |
| Oswego Plaza  Oswego, NY                        |   |             |   | 250,437                     |   | 1,169,775                                        |   | 2,253,649                                                     |   | 250,437 |   | 3,423,424 |   | 3,673,861 |   |
| Westgate Manor Plaza - Rome  Rome, NY           |   |             |   | 211,964                     |   | 392,996                                          |   | 790,487                                                       |   | 211,964 |   | 1,183,483 |   | 1,395,447 |   |
| Mohawk  Rome, NY                                |   |             |   | 335,734                     |   | 1,755,445                                        |   | 1,678,382                                                     |   | 335,734 |   | 3,433,828 |   | 3,769,561 |   |
| Price Chopper Plaza  Rome, NY                   |   |             |   | 934,687                     |   | 3,738,751                                        |   | 153,908                                                       |   | 934,687 |   | 3,892,659 |   | 4,827,346 |   |
| Northland  Watertown, NY                        |   |             |   | 16,892                      |   | 258,397                                          |   | 902,781                                                       |   | 16,892 |   | 1,161,179 |   | 1,178,071 |   |
| Whitestown Plaza  Whitesboro, NY                |   |             |   | 653,686                     |   | 3,179,804                                        |   | 6,993                                                         |   | 653,686 |   | 3,186,797 |   | 3,840,483 |   |
| Ashland Square  Ashland, OH                     |   |             |   | 1,990,823                   |   | 6,430,270                                        |   | 72,811                                                        |   | 1,990,823 |   | 6,503,081 |   | 8,493,903 |   |
| Harbor Plaza  Ashtabula, OH                     |   |             |   | 388,997                     |   | 1,456,108                                        |   | 21,600                                                        |   | 388,997 |   | 1,477,708 |   | 1,866,705 |   |
| Springbrook Plaza  Canton, OH                   |   |             |   | 2,940,763                   |   | 8,822,289                                        |   |                                                          |   | 2,940,763 |   | 8,822,289 |   | 11,763,053 |   |
| Brentwood Plaza  Cincinnati, OH                 |   |             |   | 2,027,969                   |   | 8,222,875                                        |   | 841,123                                                       |   | 2,027,969 |   | 9,063,998 |   | 11,091,966 |   |
| Western Village Shopping Center  Cincinnati, OH |   |             |   | 1,321,484                   |   | 5,300,935                                        |   | 148,630                                                       |   | 1,321,484 |   | 5,449,566 |   | 6,771,049 |   |
| Delhi Shopping Center  Cincinnati, OH           |   |             |   | 2,300,029                   |   | 9,218,117                                        |   | 253,347                                                       |   | 2,300,029 |   | 9,471,463 |   | 11,771,493 |   |
| Hillcrest Square  Cincinnati, OH                |   |             |   | 654,870                     |   | 1,964,609                                        |   |                                                          |   | 654,870 |   | 1,964,609 |   | 2,619,478 |   |
| Greentree Shopping Center  Columbus, OH         |   | (5,112,513       | )      | 3,379,200                   |   | 6,860,800                                        |   | 151,140                                                       |   | 3,379,200 |   | 7,011,940 |   | 10,391,140 |   |
| Crown Point Shopping Center  Columbus, OH       |   | (7,290,687       | )      | 2,881,681                   |   | 7,958,319                                        |   | 60,330                                                        |   | 2,881,681 |   | 8,018,649 |   | 10,900,330 |   |
| Karl Plaza  Columbus, OH                        |   | (3,700,252       | )      | 1,235,044                   |   | 3,705,132                                        |   |                                                          |   | 1,235,044 |   | 3,705,132 |   | 4,940,176 |   |
| South Towne Centre  Dayton, OH                  |   |             |   | 4,737,368                   |   | 9,636,943                                        |   | 658,199                                                       |   | 4,737,368 |   | 10,295,142 |   | 15,032,510 |   |

 

[Additional columns below]

 

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                    |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|-------------------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                                 |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| **Retail**                                      |   |                          |   |                  |   |               |   |                                                       |   |
| Shops at Seneca Mall  Liverpool, NY             |   | (1,603,059                    | )      | 1971                  |   | Aug-93             |   | 40                                                         |   |
| Transit Road Plaza  Lockport, NY                |   | (473,309                      | )      | 1971                  |   | Aug-93             |   | 40                                                         |   |
| Sunshine Square  Medford, NY                    |   | (9,961                        | )      | 1989                  |   | Dec-02             |   | 40                                                         |   |
| Wallkill Plaza  Middletown, NY                  |   | (1,638,987                    | )      | 1986                  |   | Dec-95             |   | 40                                                         |   |
| Monroe Shoprite Plaza  Monroe, NY               |   | (1,146,096                    | )      | 1972                  |   | Aug-97             |   | 40                                                         |   |
| Rockland Plaza  Nanuet, NY                      |   | (4,051,251                    | )      | 1963                  |   | Jan-83             |   | 40                                                         |   |
| South Plaza  Norwich, NY                        |   | (1,321,864                    | )      | 1967                  |   | Apr-83             |   | 40                                                         |   |
| Westgate Plaza - Oneonta  Oneonta, NY           |   | (775,305                      | )      | 1967                  |   | Jan-84             |   | 40                                                         |   |
| Oswego Plaza  Oswego, NY                        |   | (1,604,520                    | )      | 1966                  |   | Jan-77             |   | 40                                                         |   |
| Westgate Manor Plaza - Rome  Rome, NY           |   | (386,891                      | )      | 1961                  |   | Jan-86             |   | 40                                                         |   |
| Mohawk  Rome, NY                                |   | (1,526,803                    | )      | 1965                  |   | Jan-84             |   | 40                                                         |   |
| Price Chopper Plaza  Rome, NY                   |   | (893,548                      | )      | 1988                  |   | Aug-93             |   | 40                                                         |   |
| Northland  Watertown, NY                        |   | (396,805                      | )      | 1962                  |   | Jan-73             |   | 40                                                         |   |
| Whitestown Plaza  Whitesboro, NY                |   | (59,444                       | )      | 1953                  |   | Apr-02             |   | 40                                                         |   |
| Ashland Square  Ashland, OH                     |   | (733,420                      | )      | 1990                  |   | Oct-93             |   | 40                                                         |   |
| Harbor Plaza  Ashtabula, OH                     |   | (433,388                      | )      | 1988                  |   | Feb-91             |   | 40                                                         |   |
| Springbrook Plaza  Canton, OH                   |   | (9,190                        | )      | 1989                  |   | Dec-02             |   | 40                                                         |   |
| Brentwood Plaza  Cincinnati, OH                 |   | (1,906,026                    | )      | 1957                  |   | May-94             |   | 40                                                         |   |
| Western Village Shopping Center  Cincinnati, OH |   | (1,179,283                    | )      | 1960                  |   | May-94             |   | 40                                                         |   |
| Delhi Shopping Center  Cincinnati, OH           |   | (1,525,657                    | )      | 1973                  |   | May-96             |   | 40                                                         |   |
| Hillcrest Square  Cincinnati, OH                |   | (2,046                        | )      | 1981                  |   | Dec-02             |   | 40                                                         |   |
| Greentree Shopping Center  Columbus, OH         |   | (812,009                      | )      | 1974                  |   | Jul-98             |   | 40                                                         |   |
| Crown Point Shopping Center  Columbus, OH       |   | (935,067                      | )      | 1980                  |   | Jul-98             |   | 40                                                         |   |
| Karl Plaza  Columbus, OH                        |   | (4,036                        | )      | 1972                  |   | Dec-02             |   | 40                                                         |   |
| South Towne Centre  Dayton, OH                  |   | (2,726,059                    | )      | 1972                  |   | Mar-92             |   | 40                                                         |   |

 

F-45

----

 

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                    |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|-------------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                            |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                                 |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| **Retail**                                      |   |             |   |                        |   |                                             |   |                                                          |   |   |   |   |   |   |   |
| Heritage SquareDover, OH                        |   |             |   | 1,749,182                   |   | 7,011,926                                        |   | 28,895                                                        |   | 1,749,182 |   | 7,040,821 |   | 8,790,002 |   |
| The Vineyards  Eastlake, OH                     |   | (8,857,971       | )      | 3,016,683                   |   | 9,050,049                                        |   |                                                          |   | 3,016,683 |   | 9,050,049 |   | 12,066,731 |   |
| Midway Crossing  Elyria, OH                     |   |             |   | 1,944,200                   |   | 7,776,800                                        |   | 71,679                                                        |   | 1,944,200 |   | 7,848,479 |   | 9,792,679 |   |
| Midway Market Square  Elyria, OH                |   | (19,524,906      | )      | 5,149,479                   |   | 20,597,920                                       |   |                                                          |   | 5,149,479 |   | 20,597,920 |   | 25,747,399 |   |
| Silver Bridge Plaza  Gallipolis, OH             |   |             |   | 919,892                     |   | 3,197,673                                        |   | 543,551                                                       |   | 919,892 |   | 3,741,224 |   | 4,661,116 |   |
| Napoleon Centre  Napoleon, OH                   |   |             |   | 952,315                     |   | 2,856,946                                        |   |                                                          |   | 952,315 |   | 2,856,946 |   | 3,809,261 |   |
| New Boston Shopping Center  New Boston, OH      |   |             |   | 2,102,371                   |   | 9,537,101                                        |   | 242,951                                                       |   | 2,102,371 |   | 9,780,052 |   | 11,882,422 |   |
| Market Place  Piqua, OH                         |   |             |   | 597,923                     |   | 3,738,164                                        |   | 347,070                                                       |   | 597,923 |   | 4,085,233 |   | 4,683,157 |   |
| Brice Park Shopping Center  Reynoldsburg, OH    |   | (3,566,648       | )      | 4,854,414                   |   | 10,204,698                                       |   | 9,335                                                         |   | 4,854,414 |   | 10,214,033 |   | 15,068,448 |   |
| Central Ave Market Place  Toledo, OH            |   |             |   | 1,046,480                   |   | 1,769,207                                        |   | 381,861                                                       |   | 1,046,480 |   | 2,151,067 |   | 3,197,548 |   |
| Alexis Park  Toledo, OH                         |   | (5,338,985       | )      | 2,228,272                   |   | 6,684,816                                        |   |                                                          |   | 2,228,272 |   | 6,684,816 |   | 8,913,088 |   |
| Glengary Shopping Center  Westerville, OH       |   | (4,362,867       | )      | 1,146,973                   |   | 3,440,920                                        |   |                                                          |   | 1,146,973 |   | 3,440,920 |   | 4,587,894 |   |
| Bethel Park Plaza  Bethel Park, PA              |   |             |   | 868,039                     |   | 9,933,094                                        |   | 634,655                                                       |   | 868,039 |   | 10,567,749 |   | 11,435,788 |   |
| Bristol Plaza  Bristol, PA                      |   | (7,494,028       | )      | 3,587,285                   |   | 10,761,854                                       |   |                                                          |   | 3,587,285 |   | 10,761,854 |   | 14,349,138 |   |
| Supervalue/Clearfield  Clearfield, PA           |   |             |   | 357,218                     |   | 1,400,990                                        |   |                                                          |   | 357,218 |   | 1,400,990 |   | 1,758,208 |   |
| Laurel Mall  Connellsville, PA                  |   |             |   | 2,072,000                   |   | 3,116,472                                        |   | 28,172                                                        |   | 2,072,000 |   | 3,144,644 |   | 5,216,644 |   |
| Dillsburg Shopping Center  Dillsburg, PA        |   |             |   | 1,986,481                   |   | 4,665,505                                        |   | 283,006                                                       |   | 1,986,481 |   | 4,948,510 |   | 6,934,992 |   |
| Market Street Square  Elizabethtown, PA         |   |             |   | 3,494,045                   |   | 13,976,027                                       |   | 18,500                                                        |   | 3,494,045 |   | 13,994,527 |   | 17,488,572 |   |
| Hardees - Pad  Hanover, PA                      |   |             |   |                        |   |                                             |   | 400,000                                                       |   |   |   | 400,000 |   | 400,000 |   |
| Johnstown Galleria  Johnstown, PA               |   | (2,846,331       | )      | 1,584,716                   |   | 6,338,789                                        |   |                                                          |   | 1,584,716 |   | 6,338,789 |   | 7,923,504 |   |
| New Garden Shopping Center  Kennett Square, PA  |   |             |   | 912,130                     |   | 3,161,495                                        |   | 502,587                                                       |   | 912,130 |   | 3,664,082 |   | 4,576,213 |   |
| Stonemill Plaza  Lancaster, PA                  |   |             |   | 1,407,975                   |   | 5,650,901                                        |   | 159,138                                                       |   | 1,407,975 |   | 5,810,040 |   | 7,218,015 |   |
| Roosevelt Mall Ne  Philadelphia, PA             |   |             |   | 2,537,378                   |   | 91,798                                           |   | 8,807,317                                                     |   | 2,537,378 |   | 8,899,115 |   | 11,436,492 |   |
| Ivyridge Shopping Center  Philadelphia, PA      |   |             |   | 1,504,080                   |   | 6,026,320                                        |   | 942,910                                                       |   | 1,504,080 |   | 6,969,230 |   | 8,473,310 |   |
| Hampton Square Shopping Center  Southampton, PA |   |             |   | 772,800                     |   | 2,907,200                                        |   | 11,975                                                        |   | 772,800 |   | 2,919,175 |   | 3,691,975 |   |

 

[Additional columns below]

 

 

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                    |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|-------------------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                                 |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| **Retail**                                      |   |                          |   |                  |   |               |   |                                                       |   |
| Heritage SquareDover, OH                        |   | (1,648,930                    | )      | 1959                  |   | Aug-93             |   | 40                                                         |   |
| The Vineyards  Eastlake, OH                     |   | (9,146                        | )      | 1989                  |   | Dec-02             |   | 40                                                         |   |
| Midway Crossing  Elyria, OH                     |   | (1,362,889                    | )      | 1986                  |   | Dec-95             |   | 40                                                         |   |
| Midway Market Square  Elyria, OH                |   | (42,912                       | )      | 2001                  |   | Nov-02             |   | 40                                                         |   |
| Silver Bridge Plaza  Gallipolis, OH             |   | (1,647,864                    | )      | 1972                  |   | Dec-86             |   | 40                                                         |   |
| Napoleon Centre  Napoleon, OH                   |   | (2,976                        | )      | 1991                  |   | Dec-02             |   | 40                                                         |   |
| New Boston Shopping Center  New Boston, OH      |   | (2,319,333                    | )      | 1991                  |   | Feb-93             |   | 40                                                         |   |
| Market Place  Piqua, OH                         |   | (1,112,783                    | )      | 1972                  |   | Nov-91             |   | 40                                                         |   |
| Brice Park Shopping Center  Reynoldsburg, OH    |   | (1,202,345                    | )      | 1989                  |   | Mar-98             |   | 40                                                         |   |
| Central Ave Market Place  Toledo, OH            |   | (682,317                      | )      | 1968                  |   | Aug-90             |   | 40                                                         |   |
| Alexis Park  Toledo, OH                         |   | (6,360                        | )      | 1969                  |   | Dec-02             |   | 40                                                         |   |
| Glengary Shopping Center  Westerville, OH       |   | (3,285                        | )      | 1976                  |   | Dec-02             |   | 40                                                         |   |
| Bethel Park Plaza  Bethel Park, PA              |   | (1,464,469                    | )      | 1965                  |   | May-97             |   | 40                                                         |   |
| Bristol Plaza  Bristol, PA                      |   | (10,353                       | )      | 1989                  |   | Dec-02             |   | 40                                                         |   |
| Supervalue/Clearfield  Clearfield, PA           |   | (140,711                      | )      | 1982                  |   | Aug-93             |   | 40                                                         |   |
| Laurel Mall  Connellsville, PA                  |   | (131,498                      | )      | 1970                  |   | May-01             |   | 40                                                         |   |
| Dillsburg Shopping Center  Dillsburg, PA        |   | (746,332                      | )      | 1994                  |   | Oct-96             |   | 40                                                         |   |
| Market Street Square  Elizabethtown, PA         |   | (1,471,873                    | )      | 1993                  |   | Oct-97             |   | 40                                                         |   |
| Hardees - Pad  Hanover, PA                      |   | (54,583                       | )      | 1971                  |   | Jul-97             |   | 40                                                         |   |
| Johnstown Galleria  Johnstown, PA               |   | (666,515                      | )      | 1993                  |   | Jul-97             |   | 40                                                         |   |
| New Garden Shopping Center  Kennett Square, PA  |   | (483,851                      | )      | 1979                  |   | Jun-97             |   | 40                                                         |   |
| Stonemill Plaza  Lancaster, PA                  |   | (1,291,524                    | )      | 1988                  |   | Jan-94             |   | 40                                                         |   |
| Roosevelt Mall Ne  Philadelphia, PA             |   | (5,136,633                    | )      | 1964                  |   | Jan-64             |   | 40                                                         |   |
| Ivyridge Shopping Center  Philadelphia, PA      |   | (1,214,493                    | )      | 1963                  |   | Aug-95             |   | 40                                                         |   |
| Hampton Square Shopping Center  Southampton, PA |   | (294,974                      | )      | 1980                  |   | Dec-98             |   | 40                                                         |   |

 

F-46

----

 

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                        |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|-----------------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                                     |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| **Retail**                                          |   |             |   |                        |   |                                             |   |                                                          |   |   |   |   |   |   |   |
| Shops At Prospect  West Hempfield, PA               |   |             |   | 741,941                     |   | 2,967,765                                        |   | 58,580                                                        |   | 741,941 |   | 3,026,345 |   | 3,768,287 |   |
| Hunt River Commons  North Kingstown, RI             |   | (8,155,320       | )      | 3,138,736                   |   | 9,416,208                                        |   |                                                          |   | 3,138,736 |   | 9,416,208 |   | 12,554,944 |   |
| South Park Shopping Center  Aiken, SC               |   |             |   | 443,364                     |   | 1,330,092                                        |   |                                                          |   | 443,364 |   | 1,330,092 |   | 1,773,456 |   |
| Circle Center  Hilton Head, SC                      |   |             |   | 1,533,329                   |   | 6,133,106                                        |   | 12,689                                                        |   | 1,533,329 |   | 6,145,795 |   | 7,679,124 |   |
| Palmetto Crossroads  Hilton Head, SC                |   |             |   | 473,111                     |   | 1,892,443                                        |   | 28,645                                                        |   | 473,111 |   | 1,921,088 |   | 2,394,199 |   |
| Island Plaza  James Island, SC                      |   |             |   | 2,820,729                   |   | 11,283,031                                       |   | 19,084                                                        |   | 2,820,729 |   | 11,302,115 |   | 14,122,844 |   |
| Lexington Town Square  Lexington, SC                |   | (2,122,310       | )      | 642,813                     |   | 1,928,439                                        |   |                                                          |   | 642,813 |   | 1,928,439 |   | 2,571,253 |   |
| Remount Village  North Charleston, SC               |   |             |   | 1,470,352                   |   | 5,879,355                                        |   |                                                          |   | 1,470,352 |   | 5,879,355 |   | 7,349,707 |   |
| Festival Centre  North Charleston, SC               |   |             |   | 2,427,247                   |   | 7,281,740                                        |   |                                                          |   | 2,427,247 |   | 7,281,740 |   | 9,708,986 |   |
| Congress Crossing  Athens, TN                       |   |             |   | 1,028,255                   |   | 6,747,013                                        |   | 60,349                                                        |   | 1,028,255 |   | 6,807,362 |   | 7,835,617 |   |
| Winn-Dixie  Chattanooga, TN                         |   |             |   | 591,450                     |   | 2,365,576                                        |   |                                                          |   | 591,450 |   | 2,365,576 |   | 2,957,026 |   |
| St. Elmo Central  Chattanooga, TN                   |   |             |   | 1,529,587                   |   | 6,120,555                                        |   | 40,827                                                        |   | 1,529,587 |   | 6,161,382 |   | 7,690,969 |   |
| Saddletree Village  Columbia, TN                    |   | (1,722,007       | )      | 685,676                     |   | 2,900,245                                        |   | 12,678                                                        |   | 685,676 |   | 2,912,923 |   | 3,598,599 |   |
| West Towne Square Shopping Center  Elizabethton, TN |   |             |   | 529,103                     |   | 3,880,088                                        |   | 61,950                                                        |   | 529,103 |   | 3,942,038 |   | 4,471,141 |   |
| Greeneville Commons  Greeneville, TN                |   |             |   | 1,075,200                   |   | 7,934,800                                        |   | 567,584                                                       |   | 1,075,200 |   | 8,502,384 |   | 9,577,584 |   |
| Hazel Path Commons  Hendersonville, TN              |   |             |   | 919,231                     |   | 3,677,158                                        |   | 12,532                                                        |   | 919,231 |   | 3,689,690 |   | 4,608,921 |   |
| Kimball Crossing  Kimball, TN                       |   |             |   | 3,765,482                   |   | 15,875,659                                       |   | 113,658                                                       |   | 3,765,482 |   | 15,989,317 |   | 19,754,799 |   |
| Chapman-Ford Crossing  Knoxville, TN                |   |             |   | 2,367,047                   |   | 9,507,577                                        |   | 2,149                                                         |   | 2,367,047 |   | 9,509,726 |   | 11,876,773 |   |
| Chapman Square  Knoxville, TN                       |   |             |   | 805,128                     |   | 2,415,383                                        |   |                                                          |   | 805,128 |   | 2,415,383 |   | 3,220,510 |   |
| Farrar Place  Manchester, TN                        |   |             |   | 804,963                     |   | 3,220,060                                        |   | 68,881                                                        |   | 804,963 |   | 3,288,941 |   | 4,093,904 |   |
| Georgetown Square  Murfreesboro, TN                 |   |             |   | 1,166,924                   |   | 4,674,698                                        |   | 125,799                                                       |   | 1,166,924 |   | 4,800,497 |   | 5,967,421 |   |
| Apison Crossing  Ooltewah, TN                       |   |             |   | 1,679,125                   |   | 6,716,542                                        |   | 27,366                                                        |   | 1,679,125 |   | 6,743,908 |   | 8,423,033 |   |
| Madison Street Station  Shelbyville, TN             |   |             |   | 752,499                     |   | 3,012,444                                        |   | 203,164                                                       |   | 752,499 |   | 3,215,608 |   | 3,968,107 |   |
| Commerce Central  Tullahoma, TN                     |   |             |   | 3,043,798                   |   | 12,177,046                                       |   |                                                          |   | 3,043,798 |   | 12,177,046 |   | 15,220,844 |   |
| Merchant’s Central  Winchester, TN             |   | (6,354,262       | )      | 2,891,062                   |   | 11,564,219                                       |   | 13,227                                                        |   | 2,891,062 |   | 11,577,446 |   | 14,468,508 |   |

 

[Additional columns below]

 

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                        |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|-----------------------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                                     |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| **Retail**                                          |   |                          |   |                  |   |               |   |                                                       |   |
| Shops At Prospect  West Hempfield, PA               |   | (556,778                      | )      | 1994                  |   | Jul-95             |   | 40                                                         |   |
| Hunt River Commons  North Kingstown, RI             |   | (9,265                        | )      | 1989                  |   | Dec-02             |   | 40                                                         |   |
| South Park Shopping Center  Aiken, SC               |   | (1,386                        | )      | 1991                  |   | Dec-02             |   | 40                                                         |   |
| Circle Center  Hilton Head, SC                      |   | (646,263                      | )      | 1992                  |   | Mar-94             |   | 40                                                         |   |
| Palmetto Crossroads  Hilton Head, SC                |   | (204,564                      | )      | 1990                  |   | Oct-95             |   | 40                                                         |   |
| Island Plaza  James Island, SC                      |   | (1,187,787                    | )      | 1994                  |   | Oct-97             |   | 40                                                         |   |
| Lexington Town Square  Lexington, SC                |   | (1,831                        | )      | 1978                  |   | Dec-02             |   | 40                                                         |   |
| Remount Village  North Charleston, SC               |   | (614,345                      | )      | 1996                  |   | Nov-96             |   | 40                                                         |   |
| Festival Centre  North Charleston, SC               |   | (7,585                        | )      | 1987                  |   | Dec-02             |   | 40                                                         |   |
| Congress Crossing  Athens, TN                       |   | (1,829,698                    | )      | 1990                  |   | Nov-88             |   | 40                                                         |   |
| Winn-Dixie  Chattanooga, TN                         |   | (250,039                      | )      | 1995                  |   | Mar-97             |   | 40                                                         |   |
| St. Elmo Central  Chattanooga, TN                   |   | (644,673                      | )      | 1995                  |   | Aug-96             |   | 40                                                         |   |
| Saddletree Village  Columbia, TN                    |   | (304,678                      | )      | 1990                  |   | Jun-98             |   | 40                                                         |   |
| West Towne Square Shopping Center  Elizabethton, TN |   | (462,774                      | )      | 1998                  |   | Jun-98             |   | 40                                                         |   |
| Greeneville Commons  Greeneville, TN                |   | (2,163,945                    | )      | 1990                  |   | Mar-92             |   | 40                                                         |   |
| Hazel Path Commons  Hendersonville, TN              |   | (389,025                      | )      | 1989                  |   | Nov-95             |   | 40                                                         |   |
| Kimball Crossing  Kimball, TN                       |   | (1,665,795                    | )      | 1987                  |   | Nov-95             |   | 40                                                         |   |
| Chapman-Ford Crossing  Knoxville, TN                |   | (997,009                      | )      | 1990                  |   | Dec-92             |   | 40                                                         |   |
| Chapman Square  Knoxville, TN                       |   | (2,516                        | )      | 1986                  |   | Dec-02             |   | 40                                                         |   |
| Farrar Place  Manchester, TN                        |   | (340,152                      | )      | 1989                  |   | Dec-95             |   | 40                                                         |   |
| Georgetown Square  Murfreesboro, TN                 |   | (1,105,246                    | )      | 1986                  |   | Sep-93             |   | 40                                                         |   |
| Apison Crossing  Ooltewah, TN                       |   | (707,161                      | )      | 1997                  |   | Jul-97             |   | 40                                                         |   |
| Madison Street Station  Shelbyville, TN             |   | (329,963                      | )      | 1985                  |   | Oct-95             |   | 40                                                         |   |
| Commerce Central  Tullahoma, TN                     |   | (1,272,386                    | )      | 1995                  |   | Aug-96             |   | 40                                                         |   |
| Merchant’s Central  Winchester, TN             |   | (1,218,056                    | )      | 1997                  |   | Dec-97             |   | 40                                                         |   |

 

F-47

----

 

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                               |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|--------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                       |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                            |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| Palm PlazaAransas, TX                      |   |             |   | 343,333                     |   | 871,639                                          |   | 30,696                                                        |   | 343,333 |   | 902,334 |   | 1,245,668 |   |
| Bardin Place Center  Arlington, TX         |   |             |   | 6,733,620                   |   | 27,101,486                                       |   | 9,581                                                         |   | 6,733,620 |   | 27,111,067 |   | 33,844,687 |   |
| Windsor Village  Austin, TX                |   |             |   | 827,691                     |   | 3,442,253                                        |   | 10,387                                                        |   | 827,691 |   | 3,452,639 |   | 4,280,331 |   |
| Randall's Center-Baytown  Baytown, TX      |   |             |   | 2,163,096                   |   | 6,720,138                                        |   |                                                          |   | 2,163,096 |   | 6,720,138 |   | 8,883,234 |   |
| Cedar Bellaire  Bellaire, TX               |   |             |   | 1,663,131                   |   | 2,397,528                                        |   |                                                          |   | 1,663,131 |   | 2,397,528 |   | 4,060,658 |   |
| El Camino II  Bellaire, TX                 |   |             |   | 48,159                      |   | 199,695                                          |   |                                                          |   | 48,159 |   | 199,695 |   | 247,854 |   |
| El Camino I  Bellaire, TX                  |   |             |   | 1,049,385                   |   | 990,285                                          |   |                                                          |   | 1,049,385 |   | 990,285 |   | 2,039,671 |   |
| Rice Bellaire  Bellaire, TX                |   |             |   | 1,255,793                   |   | 2,494,516                                        |   |                                                          |   | 1,255,793 |   | 2,494,516 |   | 3,750,309 |   |
| Brenham Four Corners  Brenham, TX          |   |             |   | 964,224                     |   | 6,170,922                                        |   |                                                          |   | 964,224 |   | 6,170,922 |   | 7,135,146 |   |
| Bryan Square  Bryan, TX                    |   |             |   | 797,369                     |   | 641,393                                          |   |                                                          |   | 797,369 |   | 641,393 |   | 1,438,762 |   |
| Townshire  Bryan, TX                       |   |             |   | 3,596,354                   |   | 3,123,670                                        |   |                                                          |   | 3,596,354 |   | 3,123,670 |   | 6,720,024 |   |
| Plantation Plaza  Clute, TX                |   |             |   | 1,463,003                   |   | 6,124,258                                        |   | 7,495                                                         |   | 1,463,003 |   | 6,131,753 |   | 7,594,756 |   |
| Culpepper Plaza  College Station, TX       |   |             |   | 6,293,887                   |   | 7,664,913                                        |   | 34,291                                                        |   | 6,293,887 |   | 7,699,205 |   | 13,993,092 |   |
| Rock Prairie Crossing  College Station, TX |   |             |   | 2,991,802                   |   | 5,731,371                                        |   |                                                          |   | 2,991,802 |   | 5,731,371 |   | 8,723,173 |   |
| Carmel Village  Corpus Christi, TX         |   |             |   | 2,159,210                   |   | 3,805,505                                        |   |                                                          |   | 2,159,210 |   | 3,805,505 |   | 5,964,715 |   |
| Five Points  Corpus Christi, TX            |   |             |   | 5,429,519                   |   | 14,979,830                                       |   |                                                          |   | 5,429,519 |   | 14,979,830 |   | 20,409,350 |   |
| Claremont Village  Dallas, TX              |   |             |   | 616,854                     |   | 2,763,528                                        |   |                                                          |   | 616,854 |   | 2,763,528 |   | 3,380,382 |   |
| Jeff Davis  Dallas, TX                     |   |             |   | 2,429,083                   |   | 1,794,831                                        |   |                                                          |   | 2,429,083 |   | 1,794,831 |   | 4,223,914 |   |
| Stevens Park Village  Dallas, TX           |   |             |   | 730,884                     |   | 2,920,054                                        |   |                                                          |   | 730,884 |   | 2,920,054 |   | 3,650,938 |   |
| Webb Royal  Dallas, TX                     |   |             |   | 2,938,496                   |   | 3,569,544                                        |   | 1,540                                                         |   | 2,938,496 |   | 3,571,084 |   | 6,509,580 |   |
| Westmoreland Heights  Dallas, TX           |   |             |   | 481,124                     |   | 3,451,245                                        |   | 17,990                                                        |   | 481,124 |   | 3,469,235 |   | 3,950,359 |   |
| Wynnewood Village  Dallas, TX              |   |             |   | 5,582,452                   |   | 21,580,197                                       |   | 114,386                                                       |   | 5,582,452 |   | 21,694,583 |   | 27,277,035 |   |
| Parktown  Deer Park, TX                    |   |             |   | 1,242,627                   |   | 5,060,049                                        |   | 3,287                                                         |   | 1,242,627 |   | 5,063,335 |   | 6,305,962 |   |
| Kenworthy Crossing  El Paso, TX            |   |             |   | 870,748                     |   | 4,034,680                                        |   |                                                          |   | 870,748 |   | 4,034,680 |   | 4,905,428 |   |
| Yarbrough  El Paso, TX                     |   |             |   | 189,126                     |   | 1,268,368                                        |   |                                                          |   | 189,126 |   | 1,268,368 |   | 1,457,494 |   |
|                                            |        |                  |        |                             |        |                                                  |        |                                                               |        |  |  |  |  |  |  |  |  |  |  |

 

[Additional columns below]

 

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                               |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|--------------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                            |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| Palm PlazaAransas, TX                      |   | (18,351                       | )      | 1979                  |   | Mar-02             |   | 40                                                         |   |
| Bardin Place Center  Arlington, TX         |   | (2,842,184                    | )      | 1993                  |   | Oct-97             |   | 40                                                         |   |
| Windsor Village  Austin, TX                |   | (72,123                       | )      | 1959                  |   | Mar-02             |   | 40                                                         |   |
| Randall's Center-Baytown  Baytown, TX      |   | (140,003                      | )      | 1987                  |   | Mar-02             |   | 40                                                         |   |
| Cedar Bellaire  Bellaire, TX               |   | (49,948                       | )      | 1950                  |   | Mar-02             |   | 40                                                         |   |
| El Camino II  Bellaire, TX                 |   | (4,160                        | )      | 2002                  |   | Mar-02             |   | 40                                                         |   |
| El Camino I  Bellaire, TX                  |   | (20,631                       | )      | 2002                  |   | Mar-02             |   | 40                                                         |   |
| Rice Bellaire  Bellaire, TX                |   | (51,969                       | )      | 1961                  |   | Mar-02             |   | 40                                                         |   |
| Brenham Four Corners  Brenham, TX          |   | (128,561                      | )      | 1975                  |   | Mar-02             |   | 40                                                         |   |
| Bryan Square  Bryan, TX                    |   | (13,362                       | )      | 1966                  |   | Mar-02             |   | 40                                                         |   |
| Townshire  Bryan, TX                       |   | (65,076                       | )      | 1957                  |   | Mar-02             |   | 40                                                         |   |
| Plantation Plaza  Clute, TX                |   | (127,636                      | )      | 1973                  |   | Mar-02             |   | 40                                                         |   |
| Culpepper Plaza  College Station, TX       |   | (159,757                      | )      | 1976                  |   | Mar-02             |   | 40                                                         |   |
| Rock Prairie Crossing  College Station, TX |   | (119,404                      | )      | 2000                  |   | Mar-02             |   | 40                                                         |   |
| Carmel Village  Corpus Christi, TX         |   | (79,281                       | )      | 1963                  |   | Mar-02             |   | 40                                                         |   |
| Five Points  Corpus Christi, TX            |   | (312,080                      | )      | 1985                  |   | Mar-02             |   | 40                                                         |   |
| Claremont  Village Dallas, TX              |   | (57,574                       | )      | 1976                  |   | Mar-02             |   | 40                                                         |   |
| Jeff Davis  Dallas, TX                     |   | (37,392                       | )      | 1975                  |   | Mar-02             |   | 40                                                         |   |
| Stevens Park Village  Dallas, TX           |   | (60,834                       | )      | 1974                  |   | Mar-02             |   | 40                                                         |   |
| Webb Royal  Dallas, TX                     |   | (74,385                       | )      | 1961                  |   | Mar-02             |   | 40                                                         |   |
| Westmoreland Heights  Dallas, TX           |   | (72,196                       | )      | 1952                  |   | Mar-02             |   | 40                                                         |   |
| Wynnewood Village  Dallas, TX              |   | (451,519                      | )      | 1961                  |   | Mar-02             |   | 40                                                         |   |
| Parktown  Deer Park, TX                    |   | (105,445                      | )      | 1985                  |   | Mar-02             |   | 40                                                         |   |
| Kenworthy Crossing  El Paso, TX            |   | (84,056                       | )      | 2000                  |   | Mar-02             |   | 40                                                         |   |
| Yarbrough  El Paso, TX                     |   | (26,424                       | )      | 1995                  |   | Mar-02             |   | 40                                                         |   |
|                                            |        |                               |        |                       |        |                    |        |                                                            |        |  |  |  |

 

F-48

----

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                       |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|----------------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                               |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                                    |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| Friendswood Square  Friendswood, TX                |   |             |   | 1,059,805                   |   | 3,316,760                                        |   | 13,804                                                        |   | 1,059,805 |   | 3,330,564 |   | 4,390,369 |   |
| Forest Hills  Ft. Worth, TX                        |   |             |   | 283,275                     |   | 1,669,157                                        |   | 27                                                            |   | 283,275 |   | 1,669,183 |   | 1,952,459 |   |
| Meadowbrook  Ft. Worth, TX                         |   |             |   | 847,975                     |   | 2,481,280                                        |   |                                                          |   | 847,975 |   | 2,481,280 |   | 3,329,255 |   |
| Westcliff  Ft. Worth, TX                           |   |             |   | 1,034,333                   |   | 5,737,121                                        |   |                                                          |   | 1,034,333 |   | 5,737,121 |   | 6,771,454 |   |
| Village Plaza  Garland, TX                         |   |             |   | 2,887,423                   |   | 3,145,325                                        |   |                                                          |   | 2,887,423 |   | 3,145,325 |   | 6,032,748 |   |
| North Hills Village  Haltom City, TX               |   |             |   | 682,122                     |   | 1,125,729                                        |   |                                                          |   | 682,122 |   | 1,125,729 |   | 1,807,850 |   |
| Highland Village Town Center  Highland Village, TX |   |             |   | 2,083,370                   |   | 7,230,688                                        |   |                                                          |   | 2,083,370 |   | 7,230,688 |   | 9,314,058 |   |
| Highland Village Outparcel  Highland Village, TX   |   |             |   |                        |   | 1,576,337                                        |   |                                                          |   |   |   |   |   |   |   |
| Antoine Square  Houston, TX                        |   |             |   | 943,829                     |   | 1,018,109                                        |   | 26,368                                                        |   | 943,829 |   | 1,044,477 |   | 1,988,305 |   |
| Bay Forest-Ceder Lake  Houston, TX                 |   |             |   | 2,168,058                   |   | 4,668,118                                        |   |                                                          |   | 2,168,058 |   | 4,668,118 |   | 6,836,177 |   |
| Beltway South  Houston, TX                         |   |             |   | 3,903,348                   |   | 4,567,577                                        |   |                                                          |   | 3,903,348 |   | 4,567,577 |   | 8,470,926 |   |
| Braes Heights  Houston, TX                         |   |             |   | 5,020,312                   |   | 6,129,135                                        |   | 14,113                                                        |   | 5,020,312 |   | 6,143,247 |   | 11,163,559 |   |
| Braes Link  Houston, TX                            |   |             |   | 1,479,647                   |   | 3,788,135                                        |   |                                                          |   | 1,479,647 |   | 3,788,135 |   | 5,267,782 |   |
| Braes Oaks  Houston, TX                            |   |             |   | 768,989                     |   | 2,848,537                                        |   |                                                          |   | 768,989 |   | 2,848,537 |   | 3,617,526 |   |
| Braesgate  Houston, TX                             |   |             |   | 1,295,575                   |   | 4,534,337                                        |   |                                                          |   | 1,295,575 |   | 4,534,337 |   | 5,829,912 |   |
| Broadway  Houston, TX                              |   |             |   | 958,424                     |   | 1,465,137                                        |   |                                                          |   | 958,424 |   | 1,465,137 |   | 2,423,561 |   |
| Clear Lake Camino South  Houston, TX               |   |             |   | 3,863,808                   |   | 3,709,150                                        |   | 4,640                                                         |   | 3,863,808 |   | 3,713,790 |   | 7,577,598 |   |
| Edgebrook Plaza  Houston, TX                       |   |             |   | 1,419,288                   |   | 3,439,926                                        |   |                                                          |   | 1,419,288 |   | 3,439,926 |   | 4,859,214 |   |
| Fondren  Houston, TX                               |   |             |   | 1,157,180                   |   | 3,901,285                                        |   |                                                          |   | 1,157,180 |   | 3,901,285 |   | 5,058,465 |   |
| Hearthstone Corners  Houston, TX                   |   |             |   | 5,738,446                   |   | 10,170,631                                       |   |                                                          |   | 5,738,446 |   | 10,170,631 |   | 15,909,077 |   |
| Huntington Village  Houston, TX                    |   |             |   | 2,168,536                   |   | 5,041,718                                        |   |                                                          |   | 2,168,536 |   | 5,041,718 |   | 7,210,254 |   |
| Jester Village  Houston, TX                        |   |             |   | 1,684,456                   |   | 3,234,986                                        |   | 12,451                                                        |   | 1,684,456 |   | 3,247,437 |   | 4,931,893 |   |
| Jones Plaza  Houston, TX                           |   |             |   | 3,461,240                   |   | 5,997,224                                        |   |                                                          |   | 3,461,240 |   | 5,997,224 |   | 9,458,464 |   |
| Jones Square  Houston, TX                          |   |             |   | 4,409,652                   |   | 5,154,852                                        |   |                                                          |   | 4,409,652 |   | 5,154,852 |   | 9,564,504 |   |
| Lazybrook  Houston, TX                             |   |             |   | 175,162                     |   | 648,982                                          |   | 2,463                                                         |   | 175,162 |   | 651,445 |   | 826,607 |   |
|                                                    |        |                  |        |                             |        |                                                  |        |                                                               |        |  |  |  |  |  |  |  |  |  |  |  |  |

 

[Additional columns below]

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                       |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|----------------------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                                    |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| Friendswood Square  Friendswood, TX                |   | (69,640                       | )      | 1979                  |   | Mar-02             |   | 40                                                         |   |
| Forest Hills  Ft. Worth, TX                        |   | (34,774                       | )      | 1968                  |   | Mar-02             |   | 40                                                         |   |
| Meadowbrook  Ft. Worth, TX                         |   | (51,693                       | )      | 1966                  |   | Mar-02             |   | 40                                                         |   |
| Westcliff  Ft. Worth, TX                           |   | (119,523                      | )      | 1955                  |   | Mar-02             |   | 40                                                         |   |
| Village Plaza  Garland, TX                         |   | (65,528                       | )      | 1964                  |   | Mar-02             |   | 40                                                         |   |
| North Hills Village  Haltom City, TX               |   | (23,453                       | )      | 1960                  |   | Mar-02             |   | 40                                                         |   |
| Highland Village Town Center  Highland Village, TX |   | (150,639                      | )      | 1996                  |   | Mar-02             |   | 40                                                         |   |
| Highland Village Outparcel  Highland Village, TX   |   | (32,909                       | )      |                  |   | Mar-02             |   | 40                                                         |   |
| Antoine Square  Houston, TX                        |   | (22,546                       | )      | 1974                  |   | Mar-02             |   | 40                                                         |   |
| Bay Forest-Ceder Lake  Houston, TX                 |   | (97,252                       | )      | 1980                  |   | Mar-02             |   | 40                                                         |   |
| Beltway South  Houston, TX                         |   | (95,158                       | )      | 1998                  |   | Mar-02             |   | 40                                                         |   |
| Braes Heights  Houston, TX                         |   | (127,690                      | )      | 1953                  |   | Mar-02             |   | 40                                                         |   |
| Braes Link  Houston, TX                            |   | (78,919                       | )      | 1968                  |   | Mar-02             |   | 40                                                         |   |
| Braes Oaks  Houston, TX                            |   | (59,345                       | )      | 1966                  |   | Mar-02             |   | 40                                                         |   |
| Braesgate  Houston, TX                             |   | (94,465                       | )      | 1972                  |   | Mar-02             |   | 40                                                         |   |
| Broadway  Houston, TX                              |   | (30,524                       | )      | 1971                  |   | Mar-02             |   | 40                                                         |   |
| Clear Lake Camino South  Houston, TX               |   | (77,351                       | )      | 1964                  |   | Mar-02             |   | 40                                                         |   |
| Edgebrook Plaza  Houston, TX                       |   | (71,665                       | )      | 1974                  |   | Mar-02             |   | 40                                                         |   |
| Fondren  Houston, TX                               |   | (81,277                       | )      | 1971                  |   | Mar-02             |   | 40                                                         |   |
| Hearthstone Corners  Houston, TX                   |   | (211,888                      | )      | 1977                  |   | Mar-02             |   | 40                                                         |   |
| Huntington Village  Houston, TX                    |   | (105,036                      | )      | 1980                  |   | Mar-02             |   | 40                                                         |   |
| Jester Village  Houston, TX                        |   | (67,499                       | )      | 1961                  |   | Mar-02             |   | 40                                                         |   |
| Jones Plaza  Houston, TX                           |   | (124,942                      | )      | 1974                  |   | Mar-02             |   | 40                                                         |   |
| Jones Square  Houston, TX                          |   | (107,393                      | )      | 1977                  |   | Mar-02             |   | 40                                                         |   |
| Lazybrook  Houston, TX                             |   | (15,805                       | )      | 1962                  |   | Mar-02             |   | 40                                                         |   |
|                                                    |        |                               |        |                       |        |                    |        |                                                            |        |  |

 

F-49

----

 

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                            |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|-----------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                    |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                         |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| **Retail**                              |   |             |   |                        |   |                                             |   |                                                          |   |   |   |   |   |   |   |
| Long Point Square  Houston, TX          |   |             |   | 1,249,723                   |   | 2,492,673                                        |   |                                                          |   | 1,249,723 |   | 2,492,673 |   | 3,742,397 |   |
| Maplewood Mall  Houston, TX             |   |             |   | 1,801,474                   |   | 2,794,194                                        |   | 14,553                                                        |   | 1,801,474 |   | 2,808,747 |   | 4,610,221 |   |
| Merchants Park North  Houston, TX       |   | (10,540,628      | )      | 5,733,582                   |   | 13,355,896                                       |   | 8,542                                                         |   | 5,733,582 |   | 13,364,438 |   | 19,098,020 |   |
| Mount Houston Square  Houston, TX       |   |             |   | 1,958,124                   |   | 5,392,414                                        |   |                                                          |   | 1,958,124 |   | 5,392,414 |   | 7,350,538 |   |
| North 45 Plaza  Houston, TX             |   |             |   | 2,805,052                   |   | 3,315,044                                        |   | 7,202                                                         |   | 2,805,052 |   | 3,322,246 |   | 6,127,298 |   |
| Northgate  Houston, TX                  |   |             |   | 925,374                     |   | 2,182,826                                        |   |                                                          |   | 925,374 |   | 2,182,826 |   | 3,108,200 |   |
| Northshore West  Houston, TX            |   |             |   | 3,708,312                   |   | 7,124,842                                        |   |                                                          |   | 3,708,312 |   | 7,124,842 |   | 10,833,154 |   |
| Northshore East  Houston, TX            |   |             |   | 2,412,760                   |   | 8,483,879                                        |   |                                                          |   | 2,412,760 |   | 8,483,879 |   | 10,896,639 |   |
| Northtown Plaza  Houston, TX            |   |             |   | 2,919,608                   |   | 11,751,087                                       |   | 80,131                                                        |   | 2,919,608 |   | 11,831,218 |   | 14,750,826 |   |
| Northwood  Houston, TX                  |   |             |   | 2,538,882                   |   | 5,613,969                                        |   | 16,255                                                        |   | 2,538,882 |   | 5,630,224 |   | 8,169,107 |   |
| Orange Grove  Houston, TX               |   |             |   | 4,785,247                   |   | 7,058,073                                        |   |                                                          |   | 4,785,247 |   | 7,058,073 |   | 11,843,321 |   |
| Pinemont  Houston, TX                   |   |             |   | 1,378,049                   |   | 3,748,007                                        |   |                                                          |   | 1,378,049 |   | 3,748,007 |   | 5,126,056 |   |
| Randalls Inwood Forest  Houston, TX     |   |             |   | 1,668,576                   |   | 5,778,464                                        |   |                                                          |   | 1,668,576 |   | 5,778,464 |   | 7,447,040 |   |
| Sharpstown Office Building  Houston, TX |   |             |   | 840,472                     |   | 1,446,280                                        |   | 16,192                                                        |   | 840,472 |   | 1,462,473 |   | 2,302,944 |   |
| Stella Link  Houston, TX                |   |             |   | 1,666,691                   |   | 3,463,577                                        |   |                                                          |   | 1,666,691 |   | 3,463,577 |   | 5,130,268 |   |
| Tanglewilde  Houston, TX                |   |             |   | 6,184,663                   |   | 1,209,944                                        |   |                                                          |   | 6,184,663 |   | 1,209,944 |   | 7,394,607 |   |
| Tidwell Place  Houston, TX              |   |             |   | 294,980                     |   | 2,914,618                                        |   |                                                          |   | 294,980 |   | 2,914,618 |   | 3,209,598 |   |
| Westheimer Commons  Houston, TX         |   |             |   | 6,727,343                   |   | 13,323,246                                       |   | 1,144,097                                                     |   | 6,727,343 |   | 14,467,343 |   | 21,194,686 |   |
| Irving West SC  Irving, TX              |   | (2,423,746       | )      | 933,850                     |   | 3,735,400                                        |   | 20,319                                                        |   | 933,850 |   | 3,755,719 |   | 4,689,569 |   |
| The Crossing at Fry Road  Katy, TX      |   | (10,525,179      | )      | 4,499,659                   |   | 14,290,920                                       |   | 69,866                                                        |   | 4,499,659 |   | 14,360,786 |   | 18,860,445 |   |
| Washington Square  Kaufman, TX          |   |             |   | 449,155                     |   | 848,867                                          |   |                                                          |   | 449,155 |   | 848,867 |   | 1,298,021 |   |
| League City  League City, TX            |   |             |   | 2,029,894                   |   | 2,489,822                                        |   |                                                          |   | 2,029,894 |   | 2,489,822 |   | 4,519,716 |   |
| Jefferson Park  Mount Pleasant, TX      |   |             |   | 2,677,336                   |   | 4,558,193                                        |   | 37,082                                                        |   | 2,677,336 |   | 4,595,275 |   | 7,272,611 |   |
| Crossroads Center  Pasadena, TX         |   |             |   | 2,828,017                   |   | 10,345,485                                       |   |                                                          |   | 2,828,017 |   | 10,345,485 |   | 13,173,502 |   |
| Parkview East  Pasadena, TX             |   |             |   | 870,067                     |   | 733,667                                          |   | 41,738                                                        |   | 870,067 |   | 775,405 |   | 1,645,472 |   |

 

[Additional columns below]

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                            |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|-----------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                         |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| **Retail**                              |   |                          |   |                  |   |               |   |                                                       |   |
| Long Point Square  Houston, TX          |   | (51,931                       | )      | 1980                  |   | Mar-02             |   | 40                                                         |   |
| Maplewood Mall  Houston, TX             |   | (58,303                       | )      | 1962                  |   | Mar-02             |   | 40                                                         |   |
| Merchants Park North  Houston, TX       |   | (278,390                      | )      | 1955                  |   | Mar-02             |   | 40                                                         |   |
| Mount Houston Square  Houston, TX       |   | (112,342                      | )      | 1974                  |   | Mar-02             |   | 40                                                         |   |
| North 45 Plaza  Houston, TX             |   | (69,078                       | )      | 1975                  |   | Mar-02             |   | 40                                                         |   |
| Northgate  Houston, TX                  |   | (45,476                       | )      | 1972                  |   | Mar-02             |   | 40                                                         |   |
| Northshore West  Houston, TX            |   | (148,434                      | )      | 1956                  |   | Mar-02             |   | 40                                                         |   |
| Northshore East  Houston, TX            |   | (176,747                      | )      | 1956                  |   | Mar-02             |   | 40                                                         |   |
| Northtown Plaza  Houston, TX            |   | (244,814                      | )      | 1960                  |   | Mar-02             |   | 40                                                         |   |
| Northwood  Houston, TX                  |   | (117,059                      | )      | 1972                  |   | Mar-02             |   | 40                                                         |   |
| Orange Grove  Houston, TX               |   | (147,043                      | )      | 1970                  |   | Mar-02             |   | 40                                                         |   |
| Pinemont  Houston, TX                   |   | (78,083                       | )      | 1969                  |   | Mar-02             |   | 40                                                         |   |
| Randalls Inwood Forest  Houston, TX     |   | (120,385                      | )      | 1985                  |   | Mar-02             |   | 40                                                         |   |
| Sharpstown Office Building  Houston, TX |   | (30,456                       | )      | 1968                  |   | Mar-02             |   | 40                                                         |   |
| Stella Link  Houston, TX                |   | (72,158                       | )      | 1956                  |   | Mar-02             |   | 40                                                         |   |
| Tanglewilde  Houston, TX                |   | (25,207                       | )      | 1972                  |   | Mar-02             |   | 40                                                         |   |
| Tidwell Place  Houston, TX              |   | (60,721                       | )      | 1983                  |   | Mar-02             |   | 40                                                         |   |
| Westheimer Commons  Houston, TX         |   | (292,812                      | )      | 1984                  |   | Mar-02             |   | 40                                                         |   |
| Irving West SC  Irving, TX              |   | (401,587                      | )      | 1987                  |   | Sep-93             |   | 40                                                         |   |
| The Crossing at Fry Road  Katy, TX      |   | (298,019                      | )      | 1984                  |   | Mar-02             |   | 40                                                         |   |
| Washington Square  Kaufman, TX          |   | (17,685                       | )      | 1978                  |   | Mar-02             |   | 40                                                         |   |
| League City League  City, TX            |   | (51,871                       | )      | 1980                  |   | Mar-02             |   | 40                                                         |   |
| Jefferson Park  Mount Pleasant, TX      |   | (95,117                       | )      | 1976                  |   | Mar-02             |   | 40                                                         |   |
| Crossroads Center  Pasadena, TX         |   | (215,531                      | )      | 1980                  |   | Mar-02             |   | 40                                                         |   |
| Parkview East  Pasadena, TX             |   | (15,445                       | )      | 1968                  |   | Mar-02             |   | 40                                                         |   |

 

F-50

----

 

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                          |   | **COLUMN B**     |   | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |   |
|-------------------------------------------------------|--------|------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                  |   |             |   | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |   |
| **Description**                                       |   | **Encumbrances** |   | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |   | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| **Retail**                                            |   |             |   |                        |   |                                             |   |                                                          |   |   |   |   |   |   |   |
| Parkview West  Pasadena, TX                           |   |             |   | 1,208,848                   |   | 1,547,002                                        |   |                                                          |   | 1,208,848 |   | 1,547,002 |   | 2,755,850 |   |
| Spencer Square  Pasadena, TX                          |   |             |   | 5,322,348                   |   | 15,295,234                                       |   |                                                          |   | 5,322,348 |   | 15,295,234 |   | 20,617,583 |   |
| Pearland Plaza  Pearland, TX                          |   |             |   | 3,676,495                   |   | 7,330,937                                        |   | 23,626                                                        |   | 3,676,495 |   | 7,354,562 |   | 11,031,057 |   |
| Northshore Plaza  Portland, TX                        |   | (4,330,339       | )      | 1,852,371                   |   | 5,557,114                                        |   |                                                          |   | 1,852,371 |   | 5,557,114 |   | 7,409,485 |   |
| Lamar Plaza I  Rosenberg, TX                          |   |             |   | 1,791,562                   |   | 444,550                                          |   | 26,924                                                        |   | 1,791,562 |   | 471,474 |   | 2,263,036 |   |
| Lamar Plaza II  Rosenberg, TX                         |   |             |   | 32,828                      |   | 53,735                                           |   |                                                          |   | 32,828 |   | 53,735 |   | 86,562 |   |
| Klein Square  Spring, TX                              |   |             |   | 1,279,607                   |   | 4,111,204                                        |   |                                                          |   | 1,279,607 |   | 4,111,204 |   | 5,390,810 |   |
| Keegan’s Meadow  Stafford, TX                    |   |             |   | 3,804,531                   |   | 7,470,219                                        |   |                                                          |   | 3,804,531 |   | 7,470,219 |   | 11,274,750 |   |
| Texas City Bay  Texas City, TX                        |   |             |   | 3,849,721                   |   | 8,358,959                                        |   |                                                          |   | 3,849,721 |   | 8,358,959 |   | 12,208,680 |   |
| Tomball Parkway Plaza  Tomball, TX                    |   |             |   | 2,505,430                   |   | 5,891,626                                        |   | 108,587                                                       |   | 2,505,430 |   | 6,000,213 |   | 8,505,643 |   |
| Victoria Crossing  Victoria, TX                       |   |             |   | 161,606                     |   | 41,792                                           |   |                                                          |   | 161,606 |   | 41,792 |   | 203,398 |   |
| Village Center  Victoria, TX                          |   |             |   | 332,148                     |   | 1,804,708                                        |   | 13,803                                                        |   | 332,148 |   | 1,818,511 |   | 2,150,658 |   |
| Valley Fair Master And Interior  West Valley City, UT |   | (15,766,551      | )      | 6,985,675                   |   | 27,942,699                                       |   | 2,169,522                                                     |   | 6,985,675 |   | 30,112,221 |   | 37,097,896 |   |
| Pizza Hut  Harrisonburg, VA                           |   |             |   |                        |   |                                             |   | 427,500                                                       |   |   |   | 427,500 |   | 427,500 |   |
| Hanover Square Shopping Center  Mechanicsville, VA    |   |             |   | 1,778,701                   |   | 7,114,805                                        |   | 79,749                                                        |   | 1,778,701 |   | 7,194,554 |   | 8,973,255 |   |
| Victorian Square  Midlothian, VA                      |   |             |   | 3,548,432                   |   | 14,208,727                                       |   | 194,244                                                       |   | 3,548,432 |   | 14,402,971 |   | 17,951,402 |   |
| Jefferson Green Shopping Center  Newport News, VA     |   |             |   | 1,459,646                   |   | 4,378,937                                        |   |                                                          |   | 1,459,646 |   | 4,378,937 |   | 5,838,583 |   |
| Cross Pointe Marketplace  Richmond, VA                |   |             |   | 823,226                     |   | 2,469,677                                        |   |                                                          |   | 823,226 |   | 2,469,677 |   | 3,292,903 |   |
| Tuckernuck Square  Richmond, VA                       |   | (6,092,557       | )      | 2,071,432                   |   | 6,214,296                                        |   |                                                          |   | 2,071,432 |   | 6,214,296 |   | 8,285,727 |   |
| Cave Spring Corners Shopping Center  Roanoke, VA      |   |             |   | 1,064,298                   |   | 4,257,792                                        |   | 240,795                                                       |   | 1,064,298 |   | 4,498,587 |   | 5,562,885 |   |
| Hunting Hills Shopping Center  Roanoke, VA            |   | (3,703,884       | )      | 1,897,007                   |   | 6,010,376                                        |   | 72,460                                                        |   | 1,897,007 |   | 6,082,836 |   | 7,979,843 |   |
| Lakeside Plaza  Salem, VA                             |   |             |   | 1,383,339                   |   | 5,355,787                                        |   | 35,511                                                        |   | 1,383,339 |   | 5,391,298 |   | 6,774,638 |   |
| Lake Drive Plaza  Vinton, VA                          |   | (3,321,992       | )      | 1,432,155                   |   | 4,616,848                                        |   | 270,342                                                       |   | 1,432,155 |   | 4,887,190 |   | 6,319,345 |   |
| Hilltop Plaza  Virginia Beach, VA                     |   | (6,394,141       | )      | 2,463,876                   |   | 7,391,627                                        |   |                                                          |   | 2,463,876 |   | 7,391,627 |   | 9,855,502 |   |
| Ridgeview Centre  Wise, VA                            |   |             |   | 2,707,679                   |   | 4,417,792                                        |   | 509,618                                                       |   | 2,707,679 |   | 4,927,411 |   | 7,635,090 |   |

 

[Additional columns below]

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                          |   | **COLUMN F**                  |   | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|-------------------------------------------------------|--------|-------------------------------|--------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                                       |   | **Accumulated  Depreciation** |   | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| **Retail**                                            |   |                          |   |                  |   |               |   |                                                       |   |
| Parkview West  Pasadena, TX                           |   | (32,229                       | )      | 1966                  |   | Mar-02             |   | 40                                                         |   |
| Spencer Square  Pasadena, TX                          |   | (318,651                      | )      | 1974                  |   | Mar-02             |   | 40                                                         |   |
| Pearland Plaza  Pearland, TX                          |   | (153,909                      | )      | 1978                  |   | Mar-02             |   | 40                                                         |   |
| Northshore Plaza  Portland, TX                        |   | (5,348                        | )      | 1981                  |   | Dec-02             |   | 40                                                         |   |
| Lamar Plaza I  Rosenberg, TX                          |   | (9,261                        | )      | 2002                  |   | Mar-02             |   | 40                                                         |   |
| Lamar Plaza II  Rosenberg, TX                         |   | (1,119                        | )      | 2002                  |   | Mar-02             |   | 40                                                         |   |
| Klein Square  Spring, TX                              |   | (85,650                       | )      | 1977                  |   | Mar-02             |   | 40                                                         |   |
| Keegan’s Meadow  Stafford, TX                    |   | (155,630                      | )      | 1983                  |   | Mar-02             |   | 40                                                         |   |
| Texas City Bay  Texas City, TX                        |   | (174,145                      | )      | 1973                  |   | Mar-02             |   | 40                                                         |   |
| Tomball Parkway Plaza  Tomball, TX                    |   | (125,876                      | )      | 1984                  |   | Mar-02             |   | 40                                                         |   |
| Victoria Crossing  Victoria, TX                       |   | (871                          | )      | —                |   | Mar-02             |   | 40                                                         |   |
| Village Center  Victoria, TX                          |   | (37,598                       | )      | 1970                  |   | Mar-02             |   | 40                                                         |   |
| Valley Fair Master And Interior  West Valley City, UT |   | (3,538,779                    | )      | 1970                  |   | Dec-96             |   | 40                                                         |   |
| Pizza Hut  Harrisonburg, VA                           |   | (78,375                       | )      | 1969                  |   | Jul-96             |   | 40                                                         |   |
| Hanover Square Shopping Center  Mechanicsville, VA    |   | (1,787,368                    | )      | 1991                  |   | Jan-93             |   | 40                                                         |   |
| Victorian Square  Midlothian, VA                      |   | (3,142,693                    | )      | 1991                  |   | Mar-94             |   | 40                                                         |   |
| Jefferson Green Shopping Center  Newport News, VA     |   | (4,561                        | )      | 1988                  |   | Dec-02             |   | 40                                                         |   |
| Cross Pointe Marketplace  Richmond, VA                |   | (2,573                        | )      | 1987                  |   | Dec-02             |   | 40                                                         |   |
| Tuckernuck Square  Richmond, VA                       |   | (5,962                        | )      | 1981                  |   | Dec-02             |   | 40                                                         |   |
| Cave Spring Corners Shopping Center  Roanoke, VA      |   | (614,418                      | )      | 1969                  |   | Jun-97             |   | 40                                                         |   |
| Hunting Hills Shopping Center  Roanoke, VA            |   | (715,444                      | )      | 1989                  |   | Apr-98             |   | 40                                                         |   |
| Lakeside Plaza  Salem, VA                             |   | (486,394                      | )      | 1989                  |   | Apr-99             |   | 40                                                         |   |
| Lake Drive Plaza  Vinton, VA                          |   | (573,457                      | )      | 1976                  |   | Feb-98             |   | 40                                                         |   |
| Hilltop Plaza  Virginia Beach, VA                     |   | (7,335                        | )      | 1972                  |   | Dec-02             |   | 40                                                         |   |
| Ridgeview Centre  Wise, VA                            |   | (1,270,096                    | )      | 1990                  |   | Jul-92             |   | 40                                                         |   |

 

F-51

----

 

**NEW PLAN EXCEL REALTY TRUST, INC. ANDSUBSIDIARIES**

**SCHEDULE III - REAL ESTATE AND ACCUMULATEDDEPRECIATION**

**December 31, 2002**

 
| **COLUMN A**                                     |   | **COLUMN B**     |          | **COLUMN C**                |   | **COLUMN D**                                     |   | **COLUMN E**                                                  |          |
|--------------------------------------------------|--------|------------------|---------------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|---------------|
|                                             |   |             |          | **Initial Cost to Company** |   | **Cost Capitalized  Subsequent to  Acquisition** |   | **Gross Amount at Which Carried at the  Close of the Period** |          |
| **Description**                                  |   | **Encumbrances** |          | **Land**                    |   | **Building &  Improvements**                 |   | **Improvements**                                              |          | **Land** |   | **Building &  Improvements** |   | **Total** |   |
| **Retail**                                       |   |             |          |                        |   |                                             |   |                                                          |          |   |   |   |   |   |   |
| Packard Plaza  Cudahy, VA                        |   |             |          | 1,145,647                   |   | 3,436,940                                        |   |                                                          |          | 1,145,647 |   | 3,436,940 |   | 4,582,587 |   |
| Northridge Plaza  Milwaukee, WI                  |   |             |          | 1,972,116                   |   | 5,916,348                                        |   |                                                          |          | 1,972,116 |   | 5,916,348 |   | 7,888,465 |   |
| Moundsville Plaza  Moundsville, WV               |   |             |          | 228,283                     |   | 1,989,798                                        |   | 4,942,235                                                     |          | 228,283 |   | 6,932,032 |   | 7,160,315 |   |
| Grand Central Plaza  Parkersburg, WV             |   |             |          |                        |   | 4,358,333                                        |   |                                                          |          |   |   | 4,358,333 |   | 4,358,333 |   |
| Kmart Plaza  Vienna, WV                          |   |             |          | 664,121                     |   | 2,656,483                                        |   | 334,944                                                       |          | 664,121 |   | 2,991,427 |   | 3,655,548 |   |
| Cheyenne Plaza  Cheyenne, WY                     |   | (5,439,479       | )             | 2,184,686                   |   | 6,554,057                                        |   |                                                          |          | 2,184,686 |   | 6,554,057 |   | 8,738,742 |   |
|                                             |   |             |          |                        |   |                                             |   |                                                          |          |   |   |   |   |   |   |
| **Other**                                        |   |             |          |                        |   |                                             |   |                                                          |          |   |   |   |   |   |   |
| Institute for Defense Analyses  Princeton, NJ.   |   |             |          |                        |   |                                             |   | 1,381,260                                                     |          |   |   | 1,381,260 |   | 1,381,260 |   |
| 1 North Central Avenue  Hartsdale, NY.           |   |             |          | 19,838                      |   |                                             |   |                                                          |          | 19,838 |   |   |   | 19,838 |   |
| ERT Development Corp.  New York, NY              |   |             |          | 1,897,664                   |   | 435,000                                          |   |                                                          |          | 1,897,664 |   | 435,000 |   | 2,332,664 |   |
| Old Egypt  Magnolia, TX                          |   |             |          | 1,220,390                   |   |                                             |   |                                                          |          | 1,220,390 |   |   |   | 1,220,390 |   |
| Valley Fair Mall Apartment  West Valley City, UT |   |             |          | 262,555                     |   | 435,794                                          |   |                                                          |          | 262,555 |   | 435,794 |   | 698,348 |   |
|                                             |   | $                | (405,823,172) |                        | $      | 830,376,146                                      |   | $                                                             | 2,520,619,469 |   | $ | 111,611,082 |   | $ | 830,376,146 |   | $ | 2,630,654,214 |   | $ | 3,461,030,360 |   |
|                                                  |        |                  |               |                             |        |                                                  |        |                                                               |               |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

[Additional columns below]

[Continued from above table,first column(s) repeated]

 
| **COLUMN A**                                     |   | **COLUMN F**                  |         | **COLUMN G**          |   | **COLUMN H**       |   | **COLUMN I**                                               |   |
|--------------------------------------------------|--------|-------------------------------|--------------|-----------------------|--------|--------------------|--------|------------------------------------------------------------|--------|
| **Description**                                  |   | **Accumulated  Depreciation** |         | **Date  Constructed** |   | **Date  Acquired** |   | **Life on Which  Depreciated -  Latest Income  Statement** |   |
| **Retail**                                       |   |                          |         |                  |   |               |   |                                                       |   |
| Packard Plaza  Cudahy, VA                        |   | (3,580                        | )            | 1968                  |   | Dec-02             |   | 40                                                         |   |
| Northridge Plaza  Milwaukee, WI                  |   | (6,163                        | )            | 1974                  |   | Dec-02             |   | 40                                                         |   |
| Moundsville Plaza  Moundsville, WV               |   | (1,617,037                    | )            | 1961                  |   | Dec-88             |   | 40                                                         |   |
| Grand Central Plaza  Parkersburg, WV             |   | (1,575,332                    | )            | 1986                  |   | Jun-88             |   | 40                                                         |   |
| Kmart Plaza  Vienna, WV                          |   | (709,155                      | )            | 1975                  |   | Feb-93             |   | 40                                                         |   |
| Cheyenne Plaza  Cheyenne, WY                     |   | (6,421                        | )            | 1970                  |   | Dec-02             |   | 40                                                         |   |
|                                             |   |                          |         |                  |   |               |   |                                                       |   |
| **Other**                                        |   |                          |         |                  |   |               |   |                                                       |   |
| Institute for Defense Analyses  Princeton, NJ.   |   | (1,381,260                    | )            |                  |   |               |   |                                                       |   |
| 1 North Central Avenue  Hartsdale, NY.           |   |                          |         | —                |   | Jul-72             |   | 40                                                         |   |
| ERT Development Corp.  New York, NY              |   | (10,875                       | )            |                  |   | Jan-95             |   |                                                       |   |
| Old Egypt  Magnolia, TX                          |   |                          |         | 2002                  |   | Mar-02             |   | 40                                                         |   |
| Valley Fair Mall Apartment  West Valley City, UT |   | (16,666                       | )            | 1975                  |   | Mar-97             |   | 40                                                         |   |
|                                             |   | $                             | (273,089,056 | )                     |   |               |   |                                                       |   |   |
|                                                  |        |                               |              |                       |        |                    |        |                                                            |        |  |

 

F-52

----

 

**NEW PLAN EXCEL REALTYTRUST, INC. AND SUBSIDIARIES**

 

**SCHEDULEIII - REAL ESTATE AND ACCUMULATED DEPRECIATION**

**(inthousands)**

 
|                                                                   |   | **Year Ended  December 31, 2002** |      | **Year Ended  December 31, 2001** |   | **Year Ended  December 31, 2000** |   |
|------------------------------------------------------------------------|--------|-----------------------------------|-----------|-----------------------------------|--------|-----------------------------------|--------|
|                                                                   |   |                              |      |                              |   |                              |   |
| [a] Reconciliation of total real estate  carrying value is as follows: |   |                              |      |                              |   |                              |   |
|                                                                   |   |                              |      |                              |   |                              |   |
| Balance at beginning of year                                           |   | $                                 | 2,683,646 |                              | $      | 2,452,631                         |   | $ | 2,498,152 |   |
|                                                                   |   |                              |      |                              |   |                              |   |
| Acquisitions and improvements                                          |   | 1,240,837                         |      | 322,926                           |   | 28,470                            |   |
|                                                                   |   |                              |      |                              |   |                              |   |
| Write-off fully depreciated assets                                     |   | —                            |      | —                            |   | (11,275                           | )      |
|                                                                   |   |                              |      |                              |   |                              |   |
| Real estate held for sale                                              |   | (85,309                           | )         | (20,747                           | )      | (9,104                            | )      |
|                                                                   |   |                              |      |                              |   |                              |   |
| Allocation of purchase price                                           |   | —                            |      | —                            |   | —                            |   |
|                                                                   |   |                              |      |                              |   |                              |   |
| Impairment of real estate                                              |   | (88,000                           | )         | (13,107                           | )      | (3,620                            | )      |
|                                                                   |   |                              |      |                              |   |                              |   |
| Cost of property sold                                                  |   | (153,819                          | )         | (58,057                           | )      | (49,992                           | )      |
|                                                                   |   |                              |      |                              |   |                              |   |
| Cost of property transferred to joint  ventures                        |   | (31,933                           | )         | —                            |   | —                            |   |
|                                                                   |   |                              |      |                              |   |                              |   |
| Balance at end of year                                                 |   | $                                 | 3,565,422 |                              | $      | 2,683,646                         |   | $ | 2,452,631 |   |
|                                                                   |   |                              |      |                              |   |                              |   |
| Total cost for federal tax purposes at end  of each year               |   | $                                 | 3,120,045 |                              | $      | 2,158,263                         |   | $ | 2,118,477 |   |
|                                                                   |   |                              |      |                              |   |                              |   |
| [b] Reconciliation of accumulated  depreciation as follows:            |   |                              |      |                              |   |                              |   |
|                                                                   |   |                              |      |                              |   |                              |   |
| Balance at beginning of year                                           |   | $                                 | 269,755   |                              | $      | 218,638                           |   | $ | 180,080 |   |
|                                                                   |   |                              |      |                              |   |                              |   |
| Depreciation expense                                                   |   | 69,039                            |      | 57,615                            |   | 55,364                            |   |
|                                                                   |   |                              |      |                              |   |                              |   |
| Deletions – property sold                                         |   | (29,272                           | )         | (4,369                            | )      | (4,676                            | )      |
|                                                                   |   |                              |      |                              |   |                              |   |
| Deletions – transfers to joint ventures                           |   | (5,735                            | )         | —                            |   | —                            |   |
|                                                                   |   |                              |      |                              |   |                              |   |
| Write-off fully depreciated assets                                     |   | —                            |      | —                            |   | (11,275                           | )      |
|                                                                   |   |                              |      |                              |   |                              |   |
| Real estate held for sale                                              |   | (7,939                            | )         | (2,129                            | )      | (855                              | )      |
|                                                                   |   |                              |      |                              |   |                              |   |
| Balance at end of year                                                 |   | $                                 | 295,946   |                              | $      | 269,755                           |   | $ | 218,638 |   |

 

F-53

----

 

**NEW PLAN EXCEL REALTYTRUST, INC. AND SUBSIDIARIES**

 

**MORTGAGELOANS ON REAL ESTATE**

**(Amountsin Thousands)**

 

**SCHEDULE IV**

**December31, 2002**

** **
| **COLUMN A**                                                                          |   | **COLUMN B**             |   | **COLUMN C**            |   | **COLUMN D**                            |   | **COLUMN E**     |   | **COLUMN F**                   |   | **COLUMN G**                       |   |
|---------------------------------------------------------------------------------------|--------|--------------------------|--------|-------------------------|--------|-----------------------------------------|--------|------------------|--------|--------------------------------|--------|------------------------------------|--------|
| **Description**                                                                       |   | **Final  Interest Rate** |   | **Face  Maturity Date** |   | **Periodic Payment  Terms**             |   | **Prior  Liens** |   | **Face  Amount  of Mortgages** |   | **Carrying  Amount  of Mortgages** |   |
|                                                                                  |   |                     |   |                    |   |                                    |   |             |   |                           |   |                               |   |
| Purchase money first mortgage, collateralized by a building in  Tucson, AZ            |   | 8.5                      | %      | 11/12/2003              |   | Interest and principal  payable monthly |   |             |   | $                              | 758    |                               | $      | 691 |   |
|                                                                                  |   |                     |   |                    |   |                                    |   |             |   |                           |   |                               |   |
| Leasehold mortgage, collateralized by a tenant lease in D&F Plaza  in Dunkirk, NY |   | 12                       | %      | 5/1/2008                |   | Interest and principal  payable monthly |   |             |   | 1,000                          |   | 699                                |   |
|                                                                                  |   |                     |   |                    |   |                                    |   |             |   |                           |   |                               |   |
| Leasehold mortgage, collateralized by a tenant lease in Mohawk Acres  in Rome, NY     |   | 10                       | %      | 5/1/2010                |   | Interest and principal  payable monthly |   |             |   | 450                            |   | 395                                |   |
|                                                                                  |   |                     |   |                    |   |                                    |   |             |   | $                              | 2,208  |                               | $      | 1,785 |   |

 

Note: Column H is not applicable

 

F-54

----

** **
|                         |   | **Year Ended**         |   |
|------------------------------|--------|------------------------|--------|
|                         |   | **December  31, 2002** |   | **December  31, 2001** |   |
|                         |   |                   |   |   |   |
| Balance, beginning of period |   | $                      | 5,590  |   | $ | 14,432 |   |
|                         |   |                   |   |   |   |
| Additions during period:     |   |                   |   |   |   |
| New loans                    |   | —                 |   | 450 |   |
|                         |   |                   |   |   |   |
| Reductions during period:    |   |                   |   |   |   |
| Collection of principal      |   | (3,805                 | )      | (9,292 | ) |
|                         |   |                   |   |   |   |
| Balance, end of period       |   | $                      | 1,785  |   | $ | 5,590 |   |

 

F-55

----

 

**SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d) of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned, thereunto duly authorized.

 

 
|                       | NEW PLAN  EXCEL REALTY TRUST, INC. |
|----------------------------|------------------------------------|
|                       | (Registrant)                       |
|                       |                               |
|                       |                               |
|                       | By:                                | /s/ GLENN J.  RUFRANO |   |
|                       |                               | Glenn J.  Rufrano |
|                       |                               | Chief  Executive Officer |
|                       |                               |
| Dated:  March 6, 2003 |                               |

 

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

 

 
| **Signature**          |   | **Title**                    |   | **Date**      |
|------------------------|--------|------------------------------|--------|---------------|
|                   |   |                         |   |          |
| /s/ WILLIAM NEWMAN     |   | Chairman of the Board of     |   | March 6, 2003 |
| William Newman         |   | Directors                    |   |          |
|                   |   |                         |   |          |
|                   |   |                         |   |          |
| /s/ GLENN J. RUFRANO   |   | Chief Executive Officer      |   | March 6, 2003 |
| Glenn J. Rufrano       |   | and Director                 |   |          |
|                   |   |                         |   |          |
|                   |   |                         |   |          |
| /s/ JOHN B. ROCHE      |   | Chief Financial Officer      |   | March 6, 2003 |
| John B. Roche          |   | and Executive Vice President |   |          |
|                   |   |                         |   |          |
|                   |   |                         |   |          |
| /s/ RAYMOND H. BOTTORF |   |                         |   |          |
| Raymond H. Bottorf     |   | Director                     |   | March 6, 2003 |
|                   |   |                         |   |          |
|                   |   |                         |   |          |
| /s/ NORMAN GOLD        |   |                         |   |          |
| Norman Gold            |   | Director                     |   | March 6, 2003 |
|                   |   |                         |   |          |
|                   |   |                         |   |          |
| /s/ MATTHEW GOLDSTEIN  |   |                         |   |          |
| Dr. Matthew Goldstein  |   | Director                     |   | March 6, 2003 |
|                   |   |                         |   |          |
|                   |   |                         |   |          |
| /s/ NINA MATIS         |   |                         |   |          |
| Nina Matis             |   | Director                     |   | March 6, 2003 |
|                   |   |                         |   |          |
|                   |   |                         |   |          |
| /s/ MELVIN D. NEWMAN   |   |                         |   |          |
| Melvin D. Newman       |   | Director                     |   | March 6, 2003 |

 

 

----

 
| **Signature**        |   | **Title** |   | **Date**      |
|----------------------|--------|-----------|--------|---------------|
|                 |   |      |   |          |
|                 |   |      |   |          |
| /s/ BRUCE A. STALLER |   |      |   |          |
| Bruce A. Staller     |   | Director  |   | March 6, 2003 |
|                 |   |      |   |          |
|                 |   |      |   |          |
| /s/ JOHN WETZLER     |   |      |   |          |
| John Wetzler         |   | Director  |   | March 6, 2003 |
|                 |   |      |   |          |
|                 |   |      |   |          |
| /s/ GREGORY A. WHITE |   |      |   |          |
| Gregory A. White     |   | Director  |   | March 6, 2003 |

 

 

----

 

**CERTIFICATION**

 

I, Glenn J. Rufrano, certifythat:

 

1.               I have reviewed this annual report on Form10-K of New Plan Excel Realty Trust, Inc.;

 

2.               Based on my knowledge, this annualreport does not contain any untrue statement of a material fact or omit tostate a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading withrespect to the period covered by this annual report;

 

3.               Based on my knowledge, the financialstatements, and other financial information included in this annual report,fairly present in all material respects the financial condition, results ofoperations and cash flows of the registrant as of, and for, the periodspresented in this annual report;

 

4.               The registrant’s other certifyingofficers and I are responsible for establishing and maintaining disclosurecontrols and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)for the registrant and have:

 

a)             designed such disclosure controls andprocedures to ensure that material information relating to the registrant,including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this annual report isbeing prepared;

 

b)            evaluated the effectiveness of theregistrant’s disclosure controls and procedures as of a date within 90 daysprior to the filing date of this annual report (the “Evaluation Date”); and

 

c)             presented in this annual report ourconclusions about the effectiveness of the disclosure controls and proceduresbased on our evaluation as of the Evaluation Date;

 

5.               The registrant’s other certifyingofficers and I have disclosed, based on our most recent evaluation, to theregistrant’s auditors and the audit committee of registrant’s board ofdirectors (or persons performing the equivalent functions):

 

a)             all significant deficiencies in the designor operation of internal controls which could adversely affect the registrant’sability to record, process, summarize and report financial data and haveidentified for the registrant’s auditors any material weaknesses in internalcontrols; and

 

b)            any fraud, whether or not material, thatinvolves management or other employees who have a significant role in theregistrant’s internal controls; and

 

6.               The registrant’s other certifyingofficers and I have indicated in this annual report whether there weresignificant changes in internal controls or in other factors that couldsignificantly affect internal controls subsequent to the date of our mostrecent evaluation, including any corrective actions with regard to significantdeficiencies and material weaknesses.

 

 
| Date: March  6, 2003     |
|--------------------------|
|                     |
|                     |
| /s/ Glenn J.  Rufrano    |   |
| Glenn J.  Rufrano        |
| Chief  Executive Officer |

 

 

----

 

**CERTIFICATION**

 

I, John B. Roche, certify that:

 

1.               I have reviewed this annual report onForm 10-K of New Plan Excel Realty Trust, Inc.;

 

2.               Based on my knowledge, this annualreport does not contain any untrue statement of a material fact or omit tostate a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading withrespect to the period covered by this annual report;

 

3.               Based on my knowledge, the financialstatements, and other financial information included in this annual report,fairly present in all material respects the financial condition, results ofoperations and cash flows of the registrant as of, and for, the periodspresented in this annual report;

 

4.               The registrant’s other certifyingofficers and I are responsible for establishing and maintaining disclosurecontrols and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)for the registrant and have:

 

a)             designed such disclosure controls andprocedures to ensure that material information relating to the registrant,including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this annual report isbeing prepared;

 

b)            evaluated the effectiveness of theregistrant’s disclosure controls and procedures as of a date within 90 daysprior to the filing date of this annual report (the “Evaluation Date”); and

 

c)             presented in this annual report ourconclusions about the effectiveness of the disclosure controls and proceduresbased on our evaluation as of the Evaluation Date;

 

5.               The registrant’s other certifying officersand I have disclosed, based on our most recent evaluation, to the registrant’sauditors and the audit committee of registrant’s board of directors (or personsperforming the equivalent functions):

 

a)             all significant deficiencies in the designor operation of internal controls which could adversely affect the registrant’sability to record, process, summarize and report financial data and haveidentified for the registrant’s auditors any material weaknesses in internalcontrols; and

 

b)            any fraud, whether or not material, thatinvolves management or other employees who have a significant role in theregistrant’s internal controls; and

 

6.               The registrant’s other certifyingofficers and I have indicated in this annual report whether there weresignificant changes in internal controls or in other factors that couldsignificantly affect internal controls subsequent to the date of our mostrecent evaluation, including any corrective actions with regard to significantdeficiencies and material weaknesses.

 

 
| Date: March  6, 2003     |
|--------------------------|
|                     |
|                     |
| /s/ John B.  Roche       |   |
| John B.  Roche           |
| Chief  Financial Officer |

 

 

----

 

**EXHIBITINDEX**

 
| *2.1   |   | Agreement  for Purchase of Real Estate and Related Property, dated as of May 10,  2001, by and between the Company and Coolidge-Koenmen LLC, filed as Exhibit  2.1 to the Company’s Current Report on Form 8-K filed on October 5, 2001.                                                                             |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.2   |   | Amendment to  Agreement for Purchase of Real Estate and Related Property, dated as of July  30, 2001, by and between the Company and Coolidge-Koenmen LLC (Club Sales  Contract Amendment), filed as Exhibit 2.2 to the Company’s Current Report on  Form 8-K filed on October 5, 2001.                                   |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.3   |   | Amendment to  Agreement for Purchase of Real Estate and Related Property, dated as of July  30, 2001, by and between the Company and Coolidge-Koenmen LLC, filed as  Exhibit 2.3 to the Company’s Current Report on Form 8-K filed on October 5,  2001.                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.4   |   | Closing Date  Amendment to Agreement for Purchase of Real Estate and Related Property,  dated as of September 21, 2001, by and between the Company and  Coolidge-Koenmen LLC, filed as Exhibit 2.4 to the Company’s Current Report on  Form 8-K filed on October 5, 2001.                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.5   |   | Purchase  Agreement, dated as of January 13, 2002, by and among the Company,  CenterAmerica Property Trust, L.P. and certain affiliates of CenterAmerica  Property Trust, L.P., filed as Exhibit 2.1 to the Company’s Current  Report on Form 8-K filed on January 14, 2002.                                         |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.6   |   | Purchase  Agreement, dated as of October 17, 2002, by and between the Company and EIG  Realty, Inc., filed as Exhibit 2.1 to the Company’s Current Report on Form  8-K filed on December 27, 2002.                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.7   |   | First  Amendment to Purchase Agreement, dated as of November 6, 2002, by and between  the Company and EIG Realty, Inc., filed as Exhibit 2.2 to the Company’s  Current Report on Form 8-K filed on December 27, 2002.                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.8   |   | Closing Day  Amendment to Purchase Agreement, dated as of December 12, 2002, by and  between the Company and EIG Realty, Inc., filed as Exhibit 2.3 to the  Company’s Current Report on Form 8-K filed on December 27, 2002.                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.9   |   | Purchase  Agreement, dated as of October 17, 2002, by and among the Company, RIG  Hunt River Commons, LLC, RIG Paradise Pavilion, LLC and RIG Hilltop Plaza,  LLC, filed as Exhibit 2.4 to the Company’s Current Report on Form 8-K filed  on December 27, 2002.                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.10  |   | First  Amendment to Purchase Agreement, dated as of November 6, 2002, by and  among the Company, RIG Hunt River Commons, LLC, RIG Paradise Pavilion, LLC,  RIG Hilltop Plaza, LLC and RIG Normandy Square, LLC, filed as Exhibit 2.5 to  the Company’s Current Report on Form 8-K filed on December 27, 2002.        |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.11  |   | Closing Day  Amendment to Purchase Agreement, dated as of December 12, 2002, by and  among the Company, RIG Hunt River Commons, LLC, RIG Paradise Pavilion, LLC,  RIG Hilltop Plaza, LLC and RIG Normandy Square, LLC, filed as Exhibit 2.6 to  the Company’s Current Report on Form 8-K filed on December 27, 2002. |
|   |   |                                                                                                                                                                                                                                                                                                                           |
| *2.12  |   | Purchase  Agreement, dated as of October 17, 2002, by and between the Company and  EIG Operating Partnership, L.P., filed as Exhibit 2.7 to the Company’s  Current Report on Form 8-K filed on December 27, 2002.                                                                                                    |

 

 

----

 
| *2.13    |   | First  Amendment to Purchase Agreement, dated as of November 6, 2002, by and  between the Company and EIG Operating Partnership, L.P., filed as Exhibit 2.8  to the Company’s Current Report on Form 8-K filed on December 27, 2002.                                                 |
|----------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |   |                                                                                                                                                                                                                                                                                           |
| *2.14    |   | Closing Day  Amendment to Purchase Agreement, dated as of December 12, 2002, by and  between the Company and EIG Operating Partnership, L.P., filed as Exhibit 2.9  to the Company’s Current Report on Form 8-K filed on December 27, 2002.                                          |
|     |   |                                                                                                                                                                                                                                                                                           |
| *2.15    |   | Contribution  Agreement, dated as of October 17, 2002, by and between Excel Realty  Partners, L.P. and EIG Operating Partnership, L.P., filed as Exhibit 2.10 to  the Company’s Current Report on Form 8-K filed on December 27, 2002.                                               |
|     |   |                                                                                                                                                                                                                                                                                           |
| *2.16    |   | First  Amendment to Contribution Agreement, dated as of November 6, 2002, by  and between Excel Realty Partners, L.P. and EIG Operating Partnership, L.P.,  filed as Exhibit 2.11 to the Company’s Current Report on Form 8-K filed on  December 27, 2002.                           |
|     |   |                                                                                                                                                                                                                                                                                           |
| *2.17    |   | Second  Amendment to Contribution Agreement, dated as of December 9, 2002, by  and between Excel Realty Partners, L.P. and EIG Operating Partnership, L.P.,  filed as Exhibit 2.12 to the Company’s Current Report on Form 8-K filed on  December 27, 2002.                          |
|     |   |                                                                                                                                                                                                                                                                                           |
| *2.18    |   | Closing Day  Amendment to Contribution Agreement, dated as of December 12, 2002, by  and between Excel Realty Partners, L.P. and EIG Operating Partnership, L.P.,  filed as Exhibit 2.13 to the Company’s Current Report on Form 8-K filed on  December 27, 2002.                    |
|     |   |                                                                                                                                                                                                                                                                                           |
| *3.1     |   | Articles of Amendment and Restatement of  the Charter of the Company, filed as Exhibit 3.01 Amendment No. 1 to the  Company’s Registration Statement on Form S-3, File No. 33-59195.                                                                                                      |
|     |   |                                                                                                                                                                                                                                                                                           |
| *3.2     |   | Articles of Amendment of Articles of  Amendment and Restatement of the Charter of the Company, filed as Exhibit 4.4  to the Company’s Registration Statement on Form S-3, File No. 333-65211.                                                                                             |
|     |   |                                                                                                                                                                                                                                                                                           |
| *****3.3 |   | Restated  Bylaws of the Company, effective as of May 16, 2001 (incorporating all  amendments thereto through May 16, 2001), filed as Exhibit 3.2 to the  Company’s Quarterly Report on Form 10-Q for the quarter ended  June 30, 2001.                                          |
|     |   |                                                                                                                                                                                                                                                                                           |
| *3.4     |   | Amendment to  Restated Bylaws of the Company, dated November 5, 2001, filed as Exhibit  3.4 to the Company’s Annual Report on Form 10-K for the year ended December  31, 2002.                                                                                                       |
|     |   |                                                                                                                                                                                                                                                                                           |
| *4.1     |   | Articles Supplementary classifying 690,000  shares of preferred stock as 8 5/8% Series B Cumulative Redeemable Preferred  Stock, filed as Exhibit 4.02 to the Company’s Current Report on Form 8-K  dated January 14, 1998.                                                     |
|     |   |                                                                                                                                                                                                                                                                                           |
| *4.2     |   | Articles Supplementary relating to the  Series C Junior Participating Preferred Stock of the Company, which may in  the future be issued under the Company’s Rights Plan, filed as  Exhibit 4.3 to the Company’s Annual Report on Form 10-K/A for the year ended  December 31, 1998. |
|     |   |                                                                                                                                                                                                                                                                                           |
| *4.3     |   | Articles Supplementary classifying 150,000  shares of preferred stock as 7.80% Series D Cumulative Voting Step-Up Premium  Rate Preferred Stock, filed as Exhibit 4.5 to the Company’s Registration  Statement on Form S-3, File No. 333–65211.                                 |

 

 

----

 
| *4.4   |   | Indenture, dated as of May 8, 1995, between  the Company and State Street Bank and Trust Company of California, N.A. (as  successor to the First National Bank of Boston), filed as Exhibit 4.01 to the  Company’s Registration Statement on Form S-3, File No. 33-59195.                  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                            |
| *4.5   |   | First Supplemental Indenture, dated as of  April 4, 1997, between the Company and State Street Bank and Trust Company of  California, N.A., filed as Exhibit 4.02 to the Company’s Registration  Statement on Form S-3, File No. 333-24615.                                                |
|   |   |                                                                                                                                                                                                                                                                                            |
| *4.6   |   | Second Supplemental Indenture, dated as of  July 3, 1997, between the Company and State Street Bank and Trust Company of  California, N.A., filed as Exhibit 4.01 to the Company’s Current Report on  Form 8-K dated July 3, 1997.                                                         |
|   |   |                                                                                                                                                                                                                                                                                            |
| *4.7   |   | Senior Securities Indenture, dated as of March 29, 1995, between New  Plan Realty Trust and The First National Bank of Boston, as Trustee, filed as  Exhibit 4.2 to New Plan Realty Trust’s Registration Statement on Form S-3,  File No. 33-60045.                                        |
|   |   |                                                                                                                                                                                                                                                                                            |
| *4.8   |   | First Supplemental Indenture, dated as of August 5, 1999, by and  among New Plan Realty Trust, New Plan Excel Realty Trust, Inc. and State  Street Bank and Trust Company, filed as Exhibit 10.2 to the Company’s  Quarterly Report on Form 10-Q for the quarter ended September 30, 1999. |
|   |   |                                                                                                                                                                                                                                                                                            |
| *4.9   |   | Senior Securities Indenture, dated as of  February 3, 1999, among the Company, New Plan Realty Trust, as guarantor, and  State Street Bank and Trust Company, as Trustee, filed as Exhibit 4.1 to  the Company’s Current Report on Form 8-K dated February 3, 1999.                   |
|   |   |                                                                                                                                                                                                                                                                                            |
| *4.10  |   | Registration  Rights Agreement, dated as of December 12, 2002, by and between the Company  and EIG Operating Partnership, L.P., filed as Exhibit 4.1 to the Company’s  Current Report on Form 8-K filed on December 27, 2002.                                                         |
|   |   |                                                                                                                                                                                                                                                                                            |
| *4.11  |   | Registration  Rights Agreement, dated as of December 12, 2002, by and between the  Company and EIG Operating Partnership, L.P., filed as Exhibit 4.2 to the  Company’s Current Report on Form 8-K filed on December 27, 2002.                                                         |
|   |   |                                                                                                                                                                                                                                                                                            |
| *10.1  |   | New Plan Realty Trust 1991 Stock Option  Plan, as amended, filed as Exhibit 4.2 to the Company’s Registration  Statement on Form S-8, File No. 333-65221.                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                            |
| *10.2  |   | New Plan Realty Trust March 1991 Stock  Option Plan and Non-Qualified Stock Option Plan, filed as Exhibit 4.4 to the  Company’s Registration Statement on Form S-8, File No. 333-65221.                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                            |
| *10.3  |   | Amended and Restated 1993 Stock Option Plan  of the Company, dated May 28, 1998, filed as Exhibit 4.1 to the  Company’s Registration Statement on Form S-8, File No. 333–65223.                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                            |
| *10.4  |   | Amendment to the Amended and Restated 1993  Stock Option Plan of the Company, dated September 28, 1998, filed  as Exhibit 10.4 to the Company’s Annual Report on Form10–K/A for the year ended December 31, 1998.                                                                     |
|   |   |                                                                                                                                                                                                                                                                                            |
| *10.5  |   | Amendment to the Amended and Restated 1993  Stock Option Plan of the Company, dated February 8, 1999, filed  as Exhibit 10.5 to the Company’s Annual Report on Form 10–K/A for the year ended December 31, 1998.                                                                 |
|   |   |                                                                                                                                                                                                                                                                                            |
| *10.6  |   | Amendment to the Amended and Restated 1993  Stock Option Plan of the Company, dated April 21, 1999, filed  as Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the year  ended December 31, 1999.                                                                              |
|   |   |                                                                                                                                                                                                                                                                                            |
| *10.7  |   | Amendment to the Amended and Restated 1993  Stock Option Plan of the Company, dated February 17, 2000, filed  as Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year  ended December 31, 1999.                                                                           |
|   |   |                                                                                                                                                                                                                                                                                            |
| *10.8  |   | Directors’ Amended and Restated 1994 Stock  Option Plan of the Company, dated May 10, 1996, filed as  Exhibit 10.8 to the Company’s Annual Report on Form 10-K/A for the year ended  December 31, 1998.                                                                               |

 

 

----

 
| *10.9        |   | Amendment to the Amended and Restated 1994  Directors’ Stock Option Plan of the Company, dated September 28, 1998, filed  as Exhibit 10.9 to the Company’s Annual Report on Form 10-K/A for the year  ended December 31, 1998.                                                                                                                                            |
|--------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.10       |   | Amendment to the Amended and Restated 1994  Directors’ Stock Option Plan of the Company, dated February 17, 2000, filed  as Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year  ended December 31, 1999.                                                                                                                                               |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.11       |   | Amendment to  the Amended and Restated 1994 Directors’ Stock Option Plan of the Company, effective  as of May 24, 2000, filed as Exhibit 10.6 to the Company’s Quarterly Report  on Form 10-Q for the quarter ended June 30, 2000.                                                                                                                                             |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.12       |   | New Plan Realty Trust 1997 Stock Option  Plan, filed as Exhibit 4.1 to the Company’s Registration Statement on Form  S-8, File No. 333-65221.                                                                                                                                                                                                                                  |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.13       |   | Revolving Credit Agreement, dated as of April 26, 2002, by and  among the Company, Fleet National Bank, as administrative agent, and the  other lenders party thereto, filed as Exhibit 10.1 to the Company’s Quarterly  Report on Form 10-Q for the quarter ended June 30, 2002.                                                                                              |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
|   10.14 |   | First Amendment to Revolving Credit Agreement, dated as of November  6, 2002, by and among the Company, Fleet National Bank, as administrative  agent, and the other lenders party thereto.                                                                                                                                                                                              |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
|   10.15 |   | First  Amended and Restated Term Loan Agreement, dated as of November 6, 2002, by  and among the Company, the lenders party thereto and Fleet National Bank, as  administrative agent.                                                                                                                                                                                                   |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.16       |   | Amended and Restated Agreement of Limited  Partnership of Excel Realty Partners, L.P., dated as of June 25, 1997, filed  as Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the fiscal  year ended December 31, 1997.                                                                                                                                                 |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.17       |   | First Amendment to Amended and Restated Agreement of Limited Partnership  of Excel Realty Partners, L.P., dated as of August 20, 1999, by and among New  Plan DRP Trust, New Plan Excel Realty Trust, Inc. and the current and future  partners in the partnership, filed as Exhibit 10.3 to the Company’s Quarterly  Report on Form 10-Q for the quarter ended September 30, 1999. |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.18       |   | Rights Agreement, dated as of May 15, 1998,  between the Company and BankBoston, N.A., filed as Exhibit 4 to the Company’s  Report on Form 8-A dated May 19, 1998.                                                                                                                                                                                                                  |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.19       |   | First Amendment to Rights Agreement, dated as of February 8, 1999,  between the Company and BankBoston, N.A., filed as Exhibit 4.1 to the  Company’s Report on Form 8-A/A (Amendment No.1) dated May 5, 1999.                                                                                                                                                                       |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.20       |   | Dividend Reinvestment and Share Purchase Plan, included in the  prospectus of the Company filed pursuant to Rule 424(b)(3), File No.  333-65211, on April 20, 2000.                                                                                                                                                                                                                      |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.21       |   | Support Agreement, dated as of May 14,  1998, by William Newman to the Company, filed as Exhibit 10.7 to the  Company’s Registration Statement on Form S-4, File No. 333-61131, dated  August 11, 1998.                                                                                                                                                                             |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.22       |   | Employment Agreement, dated as of September  17, 1998, by and between the Company and William Newman, filed  as Exhibit 10.39 to the Company’s Annual Report on Form 10-K/A for the year  ended December 31, 1998.                                                                                                                                                                  |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
|   10.23 |   | Demand Promissory Note, dated July 1, 1997, made by Dean Bernstein in favor of the Company.                                                                                                                                                                                                                                                                                              |
|         |   |                                                                                                                                                                                                                                                                                                                                                                                     |
| *10.24       |   | Employment  Agreement, dated as of September 25, 1998, by and between the Company and  Dean Bernstein, filed as Exhibit 10.39 to the Company’s Annual Report on Form  10-K for the year ended December 31, 2000.                                                                                                                                                                    |

 

 

----

 
| *10.25       |   | Extension  Letter concerning Employment Agreement, dated March 27, 2000, provided by the  Company to Dean Bernstein, filed as Exhibit 10.42 to the Company’s Annual  Report on Form 10-K for the year ended December 31, 2002.            |
|--------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |   |                                                                                                                                                                                                                                           |
|   10.26 |   | Demand Promissory Note, dated June 29, 1994, made by Steven F. Siegel in favor of the Company.                                                                                                                                                 |
|         |   |                                                                                                                                                                                                                                           |
|   10.27 |   | Demand Promissory Note, dated July 1, 1997, made by Steven F. Siegel in favor of the Company.                                                                                                                                                  |
|         |   |                                                                                                                                                                                                                                           |
| *10.28       |   | Employment Agreement, dated as of September  25, 1998, by and between the Company and Steven F. Siegel, filed as Exhibit  10.45 to the Company’s Annual Report on Form 10-K/A for the year ended  December 31, 1998.                      |
|         |   |                                                                                                                                                                                                                                           |
| *10.29       |   | Extension Letter concerning Employment  Agreement, dated March 27, 2000, provided by the Company to Steven F. Siegel,  filed as Exhibit 10.44 to the Company’s Annual Report on Form 10-K for the  year ended December 31, 2002.          |
|         |   |                                                                                                                                                                                                                                           |
| *10.30       |   | Employment Agreement, dated as of February  23, 2000, by and between the Company and Glenn J. Rufrano, filed as  Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated March 9,  2000.                                     |
|         |   |                                                                                                                                                                                                                                           |
| *10.31       |   | Stock Option  Agreement, dated as of February 23, 2000, by and between the Company and  Glenn J. Rufrano (relating to 460,976 options), filed as Exhibit 10.2 to the  Company’s Current Report on Form 8-K, dated March 9, 2000.          |
|         |   |                                                                                                                                                                                                                                           |
| *10.32       |   | Stock Option  Agreement, dated as of February 23, 2000, by and between the Company and  Glenn J. Rufrano (relating to 39,024 options), filed as Exhibit 10.3 to the  Company’s Current Report on Form 8-K, dated March 9, 2000.           |
|         |   |                                                                                                                                                                                                                                           |
| *10.33       |   | Stock Option  Agreement, dated as of February 23, 2000, by and between the Company and  Glenn J. Rufrano (relating to 200,000 options), filed as Exhibit 10.4 to the  Company’s Current Report on Form 8-K, dated March 9, 2000.          |
|         |   |                                                                                                                                                                                                                                           |
| *10.34       |   | Stock Pledge  Agreement, dated February 23, 2000 between the Company and Glenn J. Rufrano,  filed as Exhibit 10.8 to the Company’s Current Report on Form 8-K, dated  March 9, 2000.                                                      |
|         |   |                                                                                                                                                                                                                                           |
| *10.35       |   | Recourse  Promissory Note, dated February 23, 2000, made by Glenn J. Rufrano in favor  of the Company, filed as Exhibit 10.6 to the Company’s Current Report on Form  8-K, dated March 9, 2000.                                           |
| *10.36       |   | Limited Recourse Promissory  Note, dated February 23, 2000, made by Glenn J. Rufrano in favor of the  Company, filed as Exhibit 10.7 to the Company’s Current Report on Form 8-K,  dated March 9, 2000.                                   |
|         |   |                                                                                                                                                                                                                                           |
| *10.37       |   | Employment  Agreement, dated as of April 14, 2000, by and between the Company and John  Roche, filed as Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q  for the quarter ended March 31, 2000.                               |
|         |   |                                                                                                                                                                                                                                           |
|   10.38 |   | Agreement,  dated as of September 27, 2002, by and between the Company and John Roche.                                                                                                                                                         |
|         |   |                                                                                                                                                                                                                                           |
| *10.39       |   | Employment  Agreement, dated as of September 14, 2000, by and between the Company and  Leonard Brumberg, filed as Exhibit 10.1 to the Company’s Quarterly Report on  Form 10-Q for the quarter ended September 30, 2000.                  |
|         |   |                                                                                                                                                                                                                                           |
| *10.40       |   | Employment Agreement, dated as of March 1, 2002, by and among CA New  Plan Management Inc., Scott MacDonald and the Company, filed as Exhibit 10.6  to the Company’s Quarterly Report on Form 10-Q for the quarter ended March  31, 2002. |

 

 

----

 
| *10.41                       |   | Agreement, dated as of February 23, 2000,  by and between the Company and Arnold Laubich, filed as Exhibit 10.9 to the  Company’s Current Report on Form 8-K, dated March 9, 2000.                                                                                        |
|------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |   |                                                                                                                                                                                                                                                                           |
| *10.42                       |   | Agreement,  dated as of May 5, 2000, by and between the Company and James M. Steuterman,  filed as Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q for the  quarter ended March 31, 2000.                                                                    |
|                         |   |                                                                                                                                                                                                                                                                           |
| *10.43                       |   | Agreement,  dated as of December 19, 2000, by and between the Company and James DeCicco,  filed as Exhibit 10.44 to the Company’s Annual Report on Form 10-K for the  year ended December 31, 2000.                                                                       |
|                         |   |                                                                                                                                                                                                                                                                           |
| *10.44                       |   | Loan  Agreement, dated as of November 30, 2001, by and among BPR Shopping Center,  L.P., the Bank of America, N.A., the Company and the other parties thereto,  filed as Exhibit 10.49 to the Company’s Annual Report on Form 10-K for the  year ended December 31, 2002. |
|                         |   |                                                                                                                                                                                                                                                                           |
| *10.45                       |   | Reimbursement Agreement, dated as of August  24, 2001, between the Company and Fleet National Bank, filed as Exhibit 10.61  to the Company’s Annual Report on Form 10-K for the year ended  December 31, 2002.                                                            |
|                         |   |                                                                                                                                                                                                                                                                           |
|       12 |   | Ratio of Earnings to Fixed Charges and  Preferred Stock Dividends.                                                                                                                                                                                                             |
|                         |   |                                                                                                                                                                                                                                                                           |
|       21 |   | Subsidiaries of the Company.                                                                                                                                                                                                                                                   |
|                         |   |                                                                                                                                                                                                                                                                           |
|       23 |   | Consent of PricewaterhouseCoopers LLP.                                                                                                                                                                                                                                         |

 

----

*Incorporated herein by reference as above indicated.

 

----