<PAGE>
                                                                   Exhibit 10.16


                                                                      Facility I

                               SUBSIDIARY GUARANTY

            GUARANTY (as the same may be amended, supplemented or otherwise
modified from time to time, this "GUARANTY"), dated as of October 22, 2001, by
and among each of the Subsidiaries listed on Schedule I hereto (collectively,
the "SUBSIDIARY GUARANTORS") and THE BANK OF NEW YORK, as administrative agent
(in such capacity, the "ADMINISTRATIVE AGENT") on behalf of the Lenders under
and as defined in the Credit Agreement (hereinafter defined).

                                    RECITALS

      I.    Reference is made to the Credit Agreement, dated as of the date
hereof, by and among New Plan Excel Realty Trust, Inc., a Maryland corporation,
the Lenders party thereto, the Administrative Agent, BANK ONE, NA, as a
Co-Documentation Agent, FLEET NATIONAL BANK, as a Co-Documentation Agent and
BANK OF AMERICA, N.A., as Managing Agent (as the same may be amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT").

      II.   The Administrative Agent, the Co-Documentation Agents, the Managing
Agent and the Lenders have made it a condition precedent to the effectiveness of
the Credit Agreement that each Subsidiary Guarantor execute and deliver this
Guaranty.

      III.  Each Subsidiary Guarantor expects to derive substantial benefit from
the Credit Agreement and the transactions contemplated thereby and, in
furtherance thereof, has agreed to execute and deliver this Guaranty.

      Therefore, in consideration of the Recitals, the terms and conditions
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the Subsidiary Guarantors,
the Borrower and the Administrative Agent hereby agree as follows:
<PAGE>
      1.    DEFINED TERMS

            (a)   Capitalized terms used herein which are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement.

            (b)   When used in this Guaranty, the following capitalized terms
shall have the respective meanings ascribed thereto as follows:

                  "BORROWER OBLIGATIONS" means all present and future
obligations and liabilities, whether deemed principal, interest, additional
interest, fees, expenses or otherwise of the Borrower to the Administrative
Agent, the Co-Documentation Agents, and the Lenders, including, without
limitation, all obligations under (i) the Credit Agreement, (ii) the Notes and
(iii) all other Loan Documents.

                  "GUARANTOR OBLIGATIONS" means, with respect to each Subsidiary
Guarantor, all of the obligations and liabilities of such Subsidiary Guarantor
hereunder, whether fixed, contingent, now existing or hereafter arising,
created, assumed, incurred or acquired.


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      2.    GUARANTEE

            (a)   Subject to Section 2(b), each Subsidiary Guarantor hereby
absolutely, irrevocably and unconditionally guarantees the full and prompt
payment when due (whether at stated maturity, by acceleration or otherwise) of
the Borrower Obligations. The agreements of each Subsidiary Guarantor in this
Guaranty constitute a guarantee of payment, and no Credit Party shall have any
obligation to enforce any Loan Document or exercise any right or remedy with
respect to any collateral security thereunder by any action, including making or
perfecting any claim against any Person or any collateral security for any of
the Borrower Obligations prior to being entitled to the benefits of this
Guaranty. The Administrative Agent may, at its option, proceed against the
Subsidiary Guarantors, or any one or more of them, in the first instance, to
enforce the Guarantor Obligations without first proceeding against the Borrower
or any other Person, and without first resorting to any other rights or
remedies, as the Administrative Agent may deem advisable. In furtherance hereof,
if any Credit Party is prevented by law from collecting or otherwise hindered
from collecting or otherwise enforcing any Borrower Obligation in accordance
with its terms, such Credit Party shall be entitled to receive hereunder from
the Subsidiary Guarantors after demand therefor, the sums which would have been
otherwise due had such collection or enforcement not been prevented or hindered.

            (b)   Notwithstanding anything to the contrary contained herein, the
maximum aggregate amount of the obligations of each Subsidiary Guarantor
hereunder shall not, as of any date of determination, exceed the lesser of the
greatest amount that is valid and enforceable against such Subsidiary Guarantor
under principles of New York State contract law and the greatest amount that
would not render such Subsidiary Guarantor's liability hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any provisions of applicable state law
(collectively, the "FRAUDULENT TRANSFER LAWS"), in each case after giving effect
to all other liabilities of such Subsidiary Guarantor, contingent or otherwise,
that are relevant under the Fraudulent Transfer Laws (specifically excluding,
however, any liability (A) in respect of intercompany indebtedness to the
Borrower or any Affiliate or Subsidiary of the Borrower, to the extent that such
intercompany indebtedness would be discharged to the extent payment is made by
such Subsidiary Guarantor hereunder, and (B) under any guarantee of (1) senior
unsecured indebtedness or (2) indebtedness subordinated in right of payment to
any Borrower Obligation, in either case which contains a limitation as to
maximum liability similar to that set forth in this Section 2(b) and pursuant to
which the liability of such Subsidiary Guarantor hereunder is included in the
liabilities


                                      -3-
<PAGE>
taken into account in determining such maximum liability) and after giving
effect as assets to the value (as determined under the applicable provisions of
the Fraudulent Transfer Laws) of any rights to subrogation, contribution,
reimbursement, indemnity or similar rights of such Subsidiary Guarantor pursuant
to applicable law or any agreement providing for an equitable allocation among
such Subsidiary Guarantor and other Affiliates or Subsidiaries of the Borrower
of obligations arising under guarantees by such parties.

            (c)   Each Subsidiary Guarantor agrees that the Guarantor
Obligations may at any time and from time to time exceed the maximum aggregate
amount of the obligations of such Subsidiary Guarantor hereunder without
impairing this Guaranty or affecting the rights and remedies of any Credit Party
hereunder.

      3.    ABSOLUTE OBLIGATION

            No Subsidiary Guarantor shall be released from liability hereunder
unless and until the Commitments of the Lenders have terminated and either (i)
the Borrower shall have paid in full the outstanding principal balance of the
Loans, together with all accrued and unpaid interest thereon, and all other
amounts then due and owing under the Loan Documents, or (ii) the Guarantor
Obligations of such Subsidiary Guarantor shall have been paid in full in cash.
Each Subsidiary Guarantor acknowledges and agrees that (a) no Credit Party has
made any representation or warranty to such Subsidiary Guarantor with respect to
the Borrower, any of its Subsidiaries, any Loan Document, or any agreement,
instrument or document executed or delivered in connection therewith, or any
other matter whatsoever, and (b) such Subsidiary Guarantor shall be liable
hereunder, and such liability shall not be affected or impaired, irrespective of
(A) the validity or enforceability of any Loan Document, or any agreement,
instrument or document executed or delivered in connection therewith, or the
collectability of any of the Borrower Obligations, (B) the preference or
priority ranking with respect to any of the Borrower Obligations, (C) the
existence, validity, enforceability or perfection of any security interest or
collateral security under any Loan Document, or the release, exchange,
substitution or loss or impairment of any such security interest or collateral
security, (D) any failure, delay, neglect or omission by any Credit Party to
realize upon or protect any direct or indirect collateral security,
indebtedness, liability or obligation, any Loan Document, or any agreement,
instrument or document executed or delivered in connection therewith, or any of
the Borrower Obligations, (E) the existence or exercise of any right of set-off
by any Credit Party, (F) the existence, validity or enforceability of any other
guarantee with respect to any of the Borrower Obligations, the liability of any
other Person in respect of any of the


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<PAGE>
Borrower Obligations, or the release of any such Person or any other guarantor
of any of the Borrower Obligations, (G) any act or omission of any Credit Party
in connection with the administration of any Loan Document or any of the
Borrower Obligations, (H) the bankruptcy, insolvency, reorganization or
receivership of, or any other proceeding for the relief of debtors commenced by
or against, any Person, (I) the disaffirmance or rejection, or the purported
disaffirmance or purported rejection, of any of the Borrower Obligations, any
Loan Document, or any agreement, instrument or document executed or delivered in
connection therewith, in any bankruptcy, insolvency, reorganization or
receivership, or any other proceeding for the relief of debtor, relating to any
Person, (J) any law, regulation or decree now or hereafter in effect which might
in any manner affect any of the terms or provisions of any Loan Document, or any
agreement, instrument or document executed or delivered in connection therewith
or any of the Borrower Obligations, or which might cause or permit to be invoked
any alteration in the time, amount, manner or payment or performance of any of
the Borrower's obligations and liabilities (including the Borrower Obligations),
(K) the merger or consolidation of the Borrower into or with any Person, (L) the
sale by the Borrower of all or any part of its assets, (M) the fact that at any
time and from time to time none of the Borrower Obligations may be outstanding
or owing to any Credit Party, (N) any amendment or modification of, or
supplement to, any Loan Document, or (O) any other reason or circumstance which
might otherwise constitute a defense available to or a discharge of the Borrower
in respect of its obligations or liabilities (including the Borrower
Obligations) or of such Subsidiary Guarantor in respect of any of the Guarantor
Obligations (other than by the performance in full thereof).

      4.    REPRESENTATIONS AND WARRANTIES

            Each of the Subsidiary Guarantors represents and warrants as to
itself that all representations and warranties relating to it contained in the
Credit Agreement are true and correct.

      5.    NOTICES

            Except as otherwise specifically provided herein, all notices,
requests, consents, demands, waivers and other communications hereunder shall be
in writing (including facsimile) and shall be given in the manner set forth in
Section 11.2 of the Credit Agreement (i) in the case of the Administrative
Agent, to the address set forth in Section 11.2 of the Credit Agreement, (ii) in
the case of a Subsidiary Guarantor, to the address set forth in Schedule I
hereto, or (iii) in the case of each party hereto, to such other addresses as to
which the Administrative Agent may be hereafter notified by the respective
parties hereto.


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      6.    EXPENSES

            Each Subsidiary Guarantor agrees that it shall, promptly after
demand, pay to the Administrative Agent any and all reasonable out-of-pocket
sums, costs and expenses, which any Credit Party may pay or incur defending,
protecting or enforcing this Guaranty (whether suit is instituted or not),
reasonable attorneys' fees and disbursements. All sums, costs and expenses which
are due and payable pursuant to this Section shall bear interest, payable on
demand, at the highest rate then payable on the Borrower Obligations.

      7.    REPAYMENT IN BANKRUPTCY, ETC.

            If, at any time or times subsequent to the payment of all or any
part of the Borrower Obligations or the Guarantor Obligations, any Credit Party
shall be required to repay any amounts previously paid by or on behalf of the
Borrower or any Subsidiary Guarantor in reduction thereof by virtue of an order
of any court having jurisdiction in the premises, including as a result of an
adjudication that such amounts constituted preferential payments or fraudulent
conveyances, the Subsidiary Guarantors unconditionally agree to pay to the
Administrative Agent, within 10 days after demand, a sum in cash equal to the
amount of such repayment, together with interest on such amount from the date of
such repayment by such Credit Party to the date of payment to the Administrative
Agent at the applicable after-maturity rate set forth in the Credit Agreement.


                                      -6-
<PAGE>
      8.    MISCELLANEOUS

            (a)   Except as otherwise expressly provided in this Guaranty, each
Subsidiary Guarantor hereby waives presentment, demand for payment, notice of
default, nonperformance and dishonor, protest and notice of protest of or in
respect of this Guaranty, the other Loan Documents and the Borrower Obligations,
notice of acceptance of this Guaranty and reliance hereupon by any Credit Party,
and the incurrence of any of the Borrower Obligations, notice of any sale of
collateral security or any default of any sort.

            (b)   No Subsidiary Guarantor is relying upon any Credit Party to
provide to such Subsidiary Guarantor any information concerning the Borrower or
any of its Subsidiaries, and each Subsidiary Guarantor has made arrangements
satisfactory to such Subsidiary Guarantor to obtain from the Borrower on a
continuing basis such information concerning the Borrower and its Subsidiaries
as such Subsidiary Guarantor may desire.

            (c)   Each Subsidiary Guarantor agrees that any statement of account
with respect to the Borrower Obligations from any Credit Party to the Borrower
which binds the Borrower shall also be binding upon such Subsidiary Guarantor,
and that copies of said statements of account maintained in the regular course
of or such Credit Party's business may be used in evidence against such
Subsidiary Guarantor in order to establish its Guarantor Obligations.

            (d)   Each Subsidiary Guarantor acknowledges that it has received a
copy of the Loan Documents and has approved of the same. In addition, each
Subsidiary Guarantor acknowledges having read each Loan Document and having had
the advice of counsel in connection with all matters concerning its execution
and delivery of this Guaranty.

            (e)   This Guaranty shall be binding upon each Subsidiary Guarantor
and its successors and inure to the benefit of, and be enforceable by the
Administrative Agent, Lenders and their respective successors, transferees and
assigns. No Subsidiary Guarantor may assign any right, or delegate any duty, it
may have under this Guaranty.

            (f)   Subject to the limitations set forth in Section 2(b), the
Guarantor Obligations shall be joint and several.

            (g)   This Guaranty is the "Guaranty" referred to in the Credit
Agreement, and is subject to, and should be construed in accordance with, the
provisions thereof. Each of the parties hereto acknowledges and agrees that the


                                      -7-
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following provisions of the Credit Agreement are made applicable to this
Guaranty and all such provisions are incorporated by reference herein as if
fully set forth herein, including Sections 1 (Definitions), 2.11 (Taxes; Net
Payments), 9.1 (Events of Default), 11.1 (Amendments and Waivers), 11.3 (No
Waiver; Cumulative Remedies), 11.5 (Payment of Expenses and Taxes), 11.7
(Successors and Assigns), 11.9 (Counterparts), 11.12 (Indemnity), 11.13
(Governing Law), 11.14, (Headings Description), 11.15 (Severability), 11.16
(Integration), 11.17 (Consent to Jurisdiction), 11.18 (Service of Process),
11.19 (No Limitation on Service or Suit) and 11.20 (WAIVER OF TRIAL BY JURY)
thereof.

            (h)   Each Subsidiary Guarantor agrees that (i) the execution and
delivery of a Guaranty by any Required Additional Guarantor after the date
hereof shall not affect the obligations of the Subsidiary Guarantors hereunder,
and (ii) the Subsidiary Guarantors and each such Required Additional Guarantor
shall, subject to Section 2(b), be jointly and severally liable for all of the
Borrower Obligations.


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<PAGE>
                                                                      Facility I


      IN EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Subsidiary
Guarantee to be duly executed on its behalf.

                                          NEW PLAN REALTY TRUST


                                          By: /s/ Steven F. Siegel
                                              ----------------------------------
                                              Steven F. Siegel
                                              Senior Vice President


                                          EXCEL REALTY TRUST - ST, INC.


                                          By: /s/ Steven F. Siegel
                                              ----------------------------------
                                              Steven F. Siegel
                                              Senior Vice President


                                          ERT DEVELOPMENT CORPORATION


                                          By: /s/ Steven F. Siegel
                                              ----------------------------------
                                              Steven F. Siegel
                                              Senior Vice President


                                          THE BANK OF NEW YORK, as
                                          Administrative Agent


                                          By: /s/ Frederick Laudisi
                                              ----------------------------------
                                              Frederick Laudisi
                                              Vice President
<PAGE>
                                   SCHEDULE I
                             TO SUBSIDIARY GUARANTY

                              SUBSIDIARY GUARANTORS

                   UNDER GUARANTY DATED AS OF OCTOBER 22, 2001

<TABLE>
<CAPTION>
                     Jurisdiction of                 Address for
Name                 Incorporation or Formation      Notices
----                 --------------------------      ---------------------------
<S>                  <C>                             <C>
New Plan             Massachusetts                   1120 Avenue of the Americas
Realty Trust                                         New York, New York 10036
                                                     Attention:John B. Roche
                                                     Telephone:(212) 869-3000
                                                     Telecopy: (212) 302-4776

Excel Realty         Delaware                        1120 Avenue of the Americas
Trust - ST, Inc.                                     New York, New York 10036
                                                     Attention:John B. Roche
                                                     Telephone:(212) 869-3000
                                                     Telecopy: (212) 302-4776

ERT Development      Delaware                        1120 Avenue of the Americas
Corporation                                          New York, New York 10036
                                                     Attention:John B. Roche
                                                     Telephone:(212) 869-3000
                                                     Telecopy: (212) 302-4776
</TABLE>