<PAGE>

                                                                    Exhibit 10.5


                              EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT dated as of August 13, 2004, by and between
Feldman Mall Properties, Inc., with its principal place of business at 3225
North Central Avenue, Suite 1205, Phoenix, Arizona 85012 (the "Company") and
Jeffrey Erhart, residing at the address set forth on the signature page hereof
(the "Executive").

         WHEREAS, the Company wishes to employ the Executive, and the Executive
wishes to accept such offer, on the terms set forth below:

         Accordingly, the parties hereto agree as follows:

         1.       Term. Provided that the Initial Date (as defined below) occurs
not more than one year following the date hereof, the Company hereby agrees to
employ the Executive, and the Executive hereby accepts such employment, for an
initial term commencing as of the date that is 14 days following the initial
public offering of the shares of the Company (the "Initial Date"), and
continuing for a three-year period following the Initial Date, unless sooner
terminated in accordance with the provisions of Section 4 or Section 5; with
such employment to continue for successive one-year periods in accordance with
the terms of this Agreement (subject to termination as aforesaid) unless either
party notifies the other party of non-renewal in writing prior to six months
before the expiration of the initial term and each annual renewal, as applicable
(the period from the Initial Date during which the Executive is employed
hereunder being hereinafter referred to as the "Term").

         2.       Duties. During the Term, the Executive shall be employed by
the Company as General Counsel and Executive Vice President of the Company, and,
as such, the Executive shall faithfully perform for the Company the duties of
said offices and shall perform such other duties of an executive, managerial or
administrative nature as shall be specified and designated from time to time by
the board of directors of the Company (the "Board"). The Executive shall report
to the Chairman of the Board (the "Chairman") and the Chief Executive Officer
(the "CEO"). The Executive shall devote substantially all of his business time
and effort to the performance of his duties hereunder; provided that in no event
shall this sentence prohibit the Executive from performing personal and
charitable activities, and other business interests approved by the Chairman or
the CEO, and further provided that such other business interests do not violate
Section 6 of this Agreement.

<PAGE>

         3.       Compensation.

         3.1      Salary. The Company shall pay the Executive during the Term a
salary at a minimum rate of $225,000 per annum (the "Annual Salary"), in
accordance with the customary payroll practices of the Company applicable to
senior executives. At least annually, the Board shall review the Executive's
Annual Salary and may provide for such increases therein as it may in its
discretion deem appropriate. (Any such increased salary shall constitute the
"Annual Salary" as of the time of the increase.)

         3.2      Bonus.

                  (a)      During the Term, in addition to the Annual Salary,
for each fiscal year of the Company ending during the Term, the Executive shall
have the opportunity to receive an annual bonus pursuant to the Company's bonus
plans and arrangements as in effect from time to time of up to 300% of the
Executive's Annual Salary, subject to attainment of performance goals determined
prior to the beginning of such fiscal year by the Board (or as appropriate, a
committee of the Board). The forgoing shall not limit the Executive's
eligibility to receive any other bonus under any other bonus plan, stock option
or equity-based plan, or other policy or program of the Company.

                  (b)      In connection with the Executive's execution of this
Agreement, the Executive is granted, in exchange for the Executive's
contribution in the amount of $100,000, the opportunity to acquire Class B
Interest in Feldman Equities of Arizona, LLC, subject to the terms set forth in
Exhibit A hereto.

         3.3      Benefits-In General. The Executive shall be permitted during
the Term to participate in any group life, hospitalization or disability
insurance plans, health programs, retirement plans, fringe benefit programs and
other benefits that may be available to other senior executives of the Company
generally, on the same terms as such other executives, in each case to the
extent that the Executive is eligible under the terms of such plans or programs,
and coverage under the Company's health insurance and hospitalization plans
shall include, and the Company shall pay the premiums applicable to such
coverage for the Executive, the Executive's spouse, minor children and adult
children under age 25 who are full time undergraduate or graduate students, to
the extent elected by the Executive.


                                       2
<PAGE>

         3.4      Vacation. The Executive shall be entitled to vacation of no
less than 20 business days per year, to be credited in accordance with ordinary
Company policies.

         3.5      Expenses-In General. The Company shall pay or reimburse the
Executive for all ordinary and reasonable out-of-pocket expenses actually
incurred (and, in the case of reimbursement, paid) by the Executive during the
Term in the performance of the Executive's services under this Agreement in
accordance with the Company's policies regarding such reimbursements. The
Company shall also pay all expenses of Executive for maintaining his memberships
in the State Bar of Arizona and the American Bar Association and appropriate
sections thereof.

         3.6      Automobile. During the Term, the Company shall provide the
Executive with an automobile allowance of $500 per month.

         3.7      Cellular Telephone. During the Term, the Company shall provide
the Executive with the use of a cellular telephone, or, so long as such will not
increase the Company's expense, reimburse Executive for a cellular phone and
phone plan obtained by the Executive.


                                       3
<PAGE>

         4.       Termination upon Death or Disability. If the Executive dies
during the Term, the Term shall terminate as of the date of death, and the
obligations of the Company to or with respect to the Executive shall terminate
in their entirety upon such date except as otherwise provided under this Section
4. If the Executive by virtue of ill health or other disability is unable to
perform substantially and continuously the duties assigned to him for more than
180 consecutive or non-consecutive days out of any consecutive 12-month period,
the Company shall have the right, to the extent permitted by law, to terminate
the employment of the Executive upon notice in writing to the Executive. Upon
termination of employment due to death or disability, (i) the Executive (or the
Executive's estate or beneficiaries in the case of the death of the Executive)
shall be entitled to receive any Annual Salary and other benefits earned and
accrued under this Agreement prior to the date of termination (and reimbursement
under this Agreement for expenses incurred prior to the date of termination);
(ii) for a period of three years after termination of employment, the Executive
(if applicable), and in the event of his death, his spouse and his dependents,
shall receive such continuing coverage under the group health plans they would
have received under this Agreement (but at such costs no higher than as in
effect immediately preceding such termination) as would have applied in the
absence of such termination, provided that, the Company shall in no event be
required to provide any benefits otherwise required by this clause (ii) after
such time as the Executive becomes entitled to receive benefits of the same type
from another employer or recipient of the Executive's services; (iii) without
duplication of any amounts due under clause (i), the Executive shall receive an
amount equal to the annual bonus that, in the absence of such termination, would
have been payable for the fiscal year in which termination occurs, payable at
such time as would have applied in the absence of such termination, with such
amount to be multiplied by a fraction (x) the numerator of which is the number
of days in the fiscal year preceding the termination and (y) the denominator of
which is 365; (iv) all outstanding unvested equity-based awards (including,
without limitation, stock options and restricted stock) held by the Executive
shall fully vest and become immediately exercisable, as applicable, and subject
to the terms of such awards; and (v) the Executive (or the Executive's estate or
beneficiaries in the case of the death of the Executive) shall have no further
rights to any other compensation or benefits hereunder, or any other rights
hereunder (but, for the avoidance of doubt, shall receive such disability and
death benefits as may be provided under the Company's plans and arrangements in
accordance with their terms).

         5.       Certain Terminations of Employment; Certain Benefits.

         5.1      Termination by the Company for Cause; Termination by the
Executive without Good Reason.

                  (a)      For purposes of this Agreement, "Cause" shall mean at
any time from the date of this Agreement, the Executive's:

                           (i)      conviction of (or pleading nolo contendere
                                    to) a felony (but in no event including a
                                    traffic or similar violation);

                           (ii)     engagement in the performance of his duties
                                    hereunder, in willful misconduct, willful or
                                    gross neglect, fraud, misappropriation or
                                    embezzlement;


                                       4
<PAGE>

                           (iii)    repeated substantial failure to materially
                                    adhere to the reasonable directions of the
                                    Chairman or CEO: or

                           (iv)     material breach of any of the provisions of
                                    Section 6;

provided that the Company shall not be permitted to terminate the Executive for
Cause except on written notice given to the Executive at any time not more than
30 days following the occurrence of any of the events described in clause (i)
through (iv) above (or, if later, the Company's knowledge thereof). No
termination for Cause under clause (i) through (iv) shall be effective unless
the Board makes a determination that Cause exists after notice to the Executive,
and the Executive has been provided with an opportunity (with counsel of his
choice) to contest the determination at a meeting of the Board.

                  (b)      The Company may terminate this Agreement and the
Executive's employment hereunder for Cause, and the Executive may terminate his
employment on at least 30 days' written notice given to the Company. If the
Company terminates the Executive for Cause, or the Executive terminates his
employment and the termination by the Executive is not for Good Reason in
accordance with Section 5.2, (i) the Executive shall receive Annual Salary and
other benefits (including any bonus for a fiscal year completed before
termination and awarded but not yet paid) earned and accrued under this
Agreement prior to the termination of employment (and reimbursement under this
Agreement for expenses incurred prior to the termination of employment); and
(ii) the Executive shall have no further rights to any other compensation or
benefits under this Agreement on or after the termination of employment.

         5.2      Termination by the Company without Cause; Termination by the
Executive for Good Reason.

                  (a)      For purposes of this Agreement, "Good Reason" shall
mean, unless otherwise consented to by the Executive,

                           (i)      the material reduction of the Executive's
                                    authority, duties and responsibilities, the
                                    assignment to the Executive of duties
                                    materially inconsistent with the Executive's
                                    position or positions with the Company, or
                                    the Executive is required to report to any
                                    person other than the persons described in
                                    Section 2;

                           (ii)     a reduction in Annual Salary of the
                                    Executive;

                           (iii)    the relocation of the Executive's office to
                                    more than 25 miles from Phoenix, Arizona, or
                                    the Executive not being provided with an
                                    office, office equipment and access to
                                    secretarial assistance reasonably comparable
                                    to that provided to other similarly situated
                                    officers of the Company;


                                       5
<PAGE>

                           (iv)     the Company's failure to pay the Executive
                                    any amounts otherwise due hereunder or under
                                    any plan, policy, program, agreement,
                                    arrangement or other commitment of the
                                    Company; or

                           (v)      the Company's material and willful breach of
                                    this Agreement.

Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist
unless notice of termination on account thereof, specifying a termination date
no later than 30 days from the date of such notice and describing the event or
condition purportedly giving rise to the termination for Good Reason, is given
by the Executive to the CEO and the Board within 30 days after such event is
alleged to have occurred; (ii) if there exists (without regard to this clause
(ii)) an event or condition that constitutes Good Reason, the Company shall have
ten days from the date notice of such a termination is given to cure such event
or condition and, if the Company does so, such event or condition shall not
constitute Good Reason hereunder; and (iii) Good Reason shall not be deemed to
exist at any time at which there exists an event or condition which could serve
as the basis of a termination for Cause. In no event shall the Company's notice
of non-renewal, as set forth in Section 1 of this Agreement, be deemed to be a
termination without Cause or constitute Good Reason.

                  (b)      The Company may terminate the Executive's employment
and the Executive may terminate the Executive's employment with the Company at
any time for any reason or no reason. If the Company terminates the Executive's
employment and the termination is not covered by Section 4 or 5.1, or the
Executive terminates his employment for Good Reason:

                           (i)      the Executive shall receive Annual Salary
                                    and other benefits (including any bonus for
                                    a fiscal year completed before termination)
                                    earned and accrued under this Agreement
                                    prior to the termination of employment (and
                                    reimbursement under this Agreement for
                                    expenses incurred prior to the termination
                                    of employment);

                           (ii)     the Executive shall receive a single-sum
                                    cash payment equal to 2.99 multiplied by the
                                    sum of (x) the Executive's Annual Salary as
                                    in effect immediately before such
                                    termination, but in no event shall such
                                    salary be deemed to be less than $225,000,
                                    and (y) the Executive's bonus payable in
                                    accordance with the last sentence of Section
                                    3.2 for the fiscal year in which such
                                    termination occurs, but in no event shall
                                    such bonus amount be deemed to be less than
                                    a $150,000 bonus), payable no later than ten
                                    days after such termination;


                                       6
<PAGE>

                           (iii)    for a period of three years after
                                    termination of employment, such continuing
                                    coverage under the group health plans the
                                    Executive would have received under this
                                    Agreement as would have applied in the
                                    absence of such termination, provided that
                                    the Company shall in no event be required to
                                    provide any benefits otherwise required by
                                    this clause after such time as the Executive
                                    becomes entitled to receive benefits of the
                                    same type from another employer or recipient
                                    of the Executive's services; and

                           (iv)     all outstanding unvested equity-based awards
                                    (including without limitation stock options
                                    and restricted stock) held by the Executive
                                    shall fully vest and shall become
                                    immediately exercisable, as applicable, in
                                    the case of options, shall continue to be
                                    exercisable for their full terms, and, in
                                    the case of interests granted in Feldman
                                    Equities Operating Partnership, LP, such
                                    units will become convertible into common
                                    stock of the Company, and all restrictions
                                    on such shares of the Company granted in
                                    connection with the initial public offering
                                    ("Lockups") shall expire.

         5.3      Change of Control. Without duplication of the foregoing, upon
a "Change of Control" (as defined below) while the Executive is employed, all
outstanding unvested equity-based awards (including stock options and restricted
stock) shall fully vest and shall become immediately exercisable, as applicable.
In addition, if, after a Change of Control, the Executive terminates his
employment with the Company as of the three-month anniversary of the Change of
Control, such termination shall be deemed a termination by the Executive for
Good Reason covered by Section 5.2. For purposes of this Agreement, "Change in
Control" shall mean the happening of any of the following:

                           (i)      any "person," including a "group" (as such
                                    terms are used in Sections 13(d) and 14(d)
                                    of the Securities Exchange Act of 1934, as
                                    amended (the "Exchange Act"), but excluding
                                    the Company, any entity controlling,
                                    controlled by or under common control with
                                    the Company, any employee benefit plan of
                                    the Company or any such entity, and
                                    Executive and any "group" (as such term is
                                    used in Section 13(d)(3) of the Exchange
                                    Act) of which the Executive is a member) is
                                    or becomes the "beneficial owner" (as
                                    defined in Rule 13(d)(3) under the Exchange
                                    Act), directly or indirectly, of securities
                                    of the Company representing 30% or more of
                                    either (A) the combined voting power of the
                                    Company's then outstanding securities or (B)
                                    the then outstanding Common Stock of the
                                    Company (in either such case other than as a
                                    result of an acquisition of securities
                                    directly from the Company); provided,
                                    however, that, in no event shall a Change in
                                    Control be deemed to have occurred upon an
                                    initial public offering or a subsequent
                                    public offering of the Common Stock under
                                    the Securities Act of 1933, as amended; or


                                       7
<PAGE>

                           (ii)     any consolidation or merger of the Company
                                    where the stockholders of the Company,
                                    immediately prior to the consolidation or
                                    merger, would not, immediately after the
                                    consolidation or merger, beneficially own
                                    (as such term is defined in Rule 13d-3 under
                                    the Exchange Act), directly or indirectly,
                                    shares representing in the aggregate 50% or
                                    more of the combined voting power of the
                                    securities of the corporation issuing cash
                                    or securities in the consolidation or merger
                                    (or of its ultimate parent corporation, if
                                    any); or

                           (iii)    there shall occur (A) any sale, lease,
                                    exchange or other transfer (in one
                                    transaction or a series of transactions
                                    contemplated or arranged by any party as a
                                    single plan) of all or substantially all of
                                    the assets of the Company, other than a sale
                                    or disposition by the Company of all or
                                    substantially all of the Company's assets to
                                    an entity, at least 50% of the combined
                                    voting power of the voting securities of
                                    which are owned by "persons" (as defined
                                    above) in substantially the same proportion
                                    as their ownership of the Company
                                    immediately prior to such sale or (B) the
                                    approval by stockholders of the Company of
                                    any plan or proposal for the liquidation or
                                    dissolution of the Company;

                           (iv)     the members of the Board at the beginning of
                                    any consecutive 24-calendar-month period
                                    (the "Incumbent Directors") cease for any
                                    reason other than due to death to constitute
                                    at least a majority of the members of the
                                    Board; provided that any director whose
                                    election, or nomination for election by the
                                    Company's stockholders, was approved by a
                                    vote of at least a majority of the members
                                    of the Board then still in office who were
                                    members of the Board at the beginning of
                                    such 24-calendar-month period, shall be
                                    deemed to be an Incumbent Director; or

                           (v)      Larry Feldman is removed (or not re-elected)
                                    as a member of the Board or as the Chief
                                    Executive Officer of the Company, other than
                                    with his consent and other than due to death
                                    or Disability.

         5.4      Parachutes. Notwithstanding any other provision of this
Agreement, in the event that any payments by the Company or an affiliate to the
Executive ("Payments") would be subject to the excise tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") on such amounts, then the Executive shall be entitled to receive either
(i) the amount of such payments reduced so that the Executive only shall be
entitled to receive payments, whether or not pursuant to this Agreement, with an
aggregate present value (as determined for purposes of Section 280G of the Code)
of not more than 2.99 times the Executive's applicable "base amount" under
Section 280G of the Code (the "Limited Amount"), or (ii) the aggregate amount of
Payments reduced by the Excise Tax, whichever results in the greatest amount to
the Executive net of any applicable Excise Tax.


                                       8
<PAGE>

         6.       Covenants of the Executive.

         6.1      Covenant Against Competition; Other Covenants. The Executive
acknowledges that (i) the principal business of the Company (which expressly
includes for purposes of this Section 6 (and any related enforcement provisions
hereof), its successors and assigns) is the acquiring, owning and redeveloping
of enclosed shopping malls (such business herein being referred to as the
"Business"); (ii) the Company is one of the limited number of persons who have
developed such a business; (iii) the Company's Business is, in part, national in
scope; (iv) the Executive's work for the Company has given and will continue to
give him access to the confidential affairs and proprietary information of the
Company; (v) the covenants and agreements of the Executive contained in this
Section 6 are essential to the business and goodwill of the Company; and (vi)
the Company would not have entered into this Agreement but for the covenants and
agreements set forth in this Section 6. Accordingly, the Executive covenants and
agrees that:

                  (a)      By and in consideration of the salary and benefits to
be provided by the Company hereunder, and subject to Executive receiving all
monies due to him under the severance arrangements set forth herein, and further
in consideration of the Executive's exposure to the proprietary information of
the Company, the Executive covenants and agrees that, during the period
commencing on the date hereof and ending one year following the date upon which
the Executive shall cease to be an employee of the Company and its affiliates,
he shall not in the United States, directly or indirectly, except with the prior
approval of the Board, (i) engage in the Business (other than for the Company or
its affiliates), or (ii) render any services to any person, corporation,
partnership or other entity (other than the Company or its affiliates) whose
principal business is to engage in the Business, or (iii) become interested in
any person, corporation, partnership or other entity (other than the Company or
its affiliates) principally engaged in the Business, as a partner, shareholder,
principal, agent, employee, consultant or in any other relationship or capacity;
provided, however, that, notwithstanding the foregoing, the Executive may invest
in securities of any entity, solely for investment purposes and without
participating in the business thereof, if (A) such securities are traded on any
national securities exchange or the National Association of Securities Dealers,
Inc. Automated Quotation System, and (B) the Executive is not a controlling
person of, or a member of a group which controls, such entity. Notwithstanding
the foregoing, the restrictions in this Section 6(a) shall not apply upon and
after (i) a termination covered by Section 5.2 or (ii) a termination by the
Executive after a Change in Control. In addition, the restrictions of this
Section 6(a) shall not apply to any existing investments or other activities of
the Executive which have been disclosed in writing to the Board prior to the
date hereof.


                                       9
<PAGE>

                  (b)      During and after the period of the Executive's
employment with the Company and its affiliates, the Executive shall keep secret
and retain in strictest confidence, except in connection with the business and
affairs of the Company and its affiliates, all confidential matters relating to
the Company's Business and the business of any of its affiliates and to the
Company and any of its affiliates, learned by the Executive heretofore or
hereafter directly or indirectly from the Company or any of its affiliates (the
"Confidential Company Information"); and shall not disclose such Confidential
Company Information to anyone outside of the Company except with the Company's
express written consent and except for Confidential Company Information which is
at the time of receipt or thereafter becomes publicly known through no wrongful
act of the Executive or is received from a third party not under an obligation
to keep such information confidential and without breach of this Agreement.

                  (c)      During the period commencing on the date hereof and
ending one year following the date upon which the Executive shall cease to be an
employee of the Company and its affiliates, (i) the Executive shall not, without
the Company's prior written consent, directly or indirectly, knowingly (i)
solicit or encourage to leave the employment or other service of the Company, or
any of its affiliates, any employee or independent contractor thereof or (ii)
hire (on behalf of the Executive or any other person or entity) any employee who
has left the employment of the Company or any of its affiliates within the
one-year period which follows the termination of such employee's employment with
the Company and its affiliates, and (ii) the Executive will not, whether for his
own account or for the account of any other person, firm, corporation or other
business organization, intentionally interfere with the Company's or any of its
affiliates' relationship with, or endeavor to entice away from the Company or
any of its affiliates, any person who during the Term is or was a customer or
client of the Company or any of its affiliates.


                                       10
<PAGE>

         6.2      Rights and Remedies upon Breach. The Executive acknowledges
and agrees that any breach by him of any of the provisions of Section 6.1 (the
"Restrictive Covenants") would result in irreparable injury and damage for which
money damages would not provide an adequate remedy. Therefore, if the Executive
breaches, or threatens to commit a breach of, any of the provisions of Section
6.1, the Company and its affiliates, in addition to, and not in lieu of, any
other rights and remedies available to the Company and its affiliates under law
or in equity (including, without limitation, the recovery of damages), shall
have the right and remedy to have the Restrictive Covenants specifically
enforced by any court having equity jurisdiction, including, without limitation,
the right to an entry against the Executive of restraining orders and
injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such
covenants.

         7.       Other Provisions.

         7.1      Severability. The Executive acknowledges and agrees that (i)
he has had an opportunity to seek advice of counsel in connection with this
Agreement and (ii) the Restrictive Covenants are reasonable in geographical and
temporal scope and in all other respects. If it is determined that any of the
provisions of this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the provisions of this Agreement shall not thereby be affected and
shall be given full effect, without regard to the invalid portions.

         7.2      Duration and Scope of Covenants. If any court or other
decision-maker of competent jurisdiction determines that any of the Executive's
covenants contained in this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, then, after such determination
has become final and unappealable, the duration or scope of such provision, as
the case may be, shall be reduced so that such provision becomes enforceable
and, in its reduced form, such provision shall then be enforceable and shall be
enforced.


                                       11
<PAGE>

         7.3      Enforceability; Jurisdiction; Arbitration. Any controversy or
claim arising out of or relating to this Agreement or the breach of this
Agreement (other than a controversy or claim arising under Section 6, to the
extent necessary for the Company (or its affiliates, where applicable) to avail
itself of the rights and remedies referred to in Section 6.2) that is not
resolved by the Executive and the Company (or its affiliates, where applicable)
shall be submitted to arbitration in New York, New York in accordance with New
York law and the procedures of the American Arbitration Association. The
determination of the arbitrator(s) shall be conclusive and binding on the
Company (or its affiliates, where applicable) and the Executive and judgment may
be entered on the arbitrator(s)' award in any court having jurisdiction.

         7.4      Indemnification and Insurance. The Company agrees to indemnify
(in addition to any other indemnification provided to the Executive under any
separate agreement or the by-laws of the Company) the Executive to the fullest
extent permitted by applicable law, as the same exists and may hereafter be
amended, from and against any and all losses, damages, claims, liabilities and
expenses asserted against, or incurred or suffered by, the Executive (including
the costs and expenses of legal counsel retained by the Company (or if separate
counsel is reasonably required by Executive, the reasonable costs and expenses
of legal counsel retained by the Executive) to defend the Executive and
judgments, fines and amounts paid in settlement actually and reasonably incurred
by or imposed on such indemnified party) with respect to any action, suit or
proceeding, whether civil, criminal, administrative or investigative in which
the Executive is made a party or threatened to be made a party, either with
regard to his entering into this Agreement or in his capacity as an officer or
director, or former officer or director, of the Company or any affiliate thereof
for which he may serve in such capacity. Such indemnification shall continue
after the Executive is no longer employed by the Company and shall inure to the
benefit of his heirs, executors, and administrators. The Company also agrees to
secure and maintain a minimum of $10,000,000 of officers and directors liability
insurance and a minimum of $10,000,000 of an errors and omissions policy
providing coverage for the Executive, which coverage shall be in an amount that
is the same as applies to other similarly situated executives, and which shall
continue after termination of employment for a reasonable time (but in no event
for a shorter time than is applicable to any other senior executive of the
Company).


                                       12
<PAGE>

         7.5      Legal Fees. The Company shall pay directly or reimburse the
Executive for all reasonable legal fees and expenses incurred by the Executive
in connection with the review, negotiation and execution of this Agreement. The
Company shall pay, at least monthly, all costs and expenses, including
attorneys' fees and disbursements, of the Company and the Executive in
connection with any legal proceeding (including any arbitration), whether or not
instituted by the Company or the Executive, relating to the interpretation or
enforcement of any provision of this Agreement; provided that if the Executive
institutes the proceeding and a court having jurisdiction over such contest
determines that the Executive's claim in such contest is frivolous or maintained
in bad faith, the Executive shall pay his own costs and expenses and promptly
(and in no event more than 60 days after demand therefor by the Company) return
to the Company any amounts previously paid by the Company under this Section
7.5.

         7.6      Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, five days after the date of deposit in the United
States mails as follows:

                           (i)      If to the Company, to:

                                    Feldman Mall Properties, Inc.
                                    3225 North Central Avenue, Suite 1205
                                    Phoenix, Arizona 85012
                                    Attention:  Larry Feldman

                                    with a copy to:

                                    Clifford Chance US LLP
                                    31 West 52nd Street
                                    New York, New York  10019
                                    Attention:  Jay L. Bernstein

                           (ii)     If to the Executive, to the address set
                                    forth on the signature page hereof.


                                       13
<PAGE>

Any such person may by notice given in accordance with this Section 7.6 to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.

         7.7      Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with respect thereto.

         7.8      Waivers and Amendments. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege
nor any single or partial exercise of any such right, power or privilege,
preclude any other or further exercise thereof or the exercise of any other such
right, power or privilege.

         7.9      GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.

         7.10     Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors, heirs (in the case
of the Executive) and assigns. No rights or obligations of the Company under
this Agreement may be assigned or transferred by the Company except that such
rights or obligations may be assigned or transferred, subject to Section 5.3,
pursuant to a merger or consolidation in which the Company is not the continuing
entity, or the sale or liquidation of all or substantially all of the assets of
the Company; provided, however, that the assignee or transferee is the successor
to all or substantially all of the assets of the Company and such assignee or
transferee assumes the liabilities, obligations and duties of the Company, as
contained in this Agreement, either contractually or as a matter of law.

         7.11     Withholding. The Company shall be entitled to withhold from
any payments or deemed payments any amount of tax withholding it determines to
be required by law.


                                       14
<PAGE>

         7.12     Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors, permitted
assigns, heirs, executors and legal representatives.

         7.13     Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original but all such counterparts together shall constitute one and
the same instrument. Each counterpart may consist of two copies hereof each
signed by one of the parties hereto.

         7.14     Survival. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Sections 5, 6 and 7.4 and any other
provisions of this Agreement expressly imposing obligations that survive
termination of Executive's employment hereunder, and the other provisions of
this Section 7 to the extent necessary to effectuate the survival of such
provisions, shall survive termination of this Agreement and any termination of
the Executive's employment hereunder.

         7.15     Existing Agreements. The Executive represents to the Company
that he is not subject or a party to any employment or consulting agreement,
non-competition covenant or other agreement, covenant or understanding which
might prohibit him from executing this Agreement or limit his ability to fulfill
his responsibilities hereunder, except that, as previously disclosed to the
Board, the Executive may have certain non-solicitation and non-interference
obligations to a former employer.

         7.16     Headings. The headings in this Agreement are for reference
only and shall not affect the interpretation of this Agreement.


                                       15
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have signed their names as of
the day and year first above written.

                                             FELDMAN MALL PROPERTIES, INC.


                                             By:
                                                  ------------------------------
                                                  Name:
                                                  Title:


                                                  ------------------------------
                                                          Jeffrey Erhart



                                       16
<PAGE>

                                    EXHIBIT A

In exchange for the Executive's capital contribution in the amount of $100,000,
Executive shall be issued a Class B Interest (the "Interest") and admitted as a
Non-Managing Member (as defined in the Amended and Restated Operating Agreement
of Feldman Equities of Arizona, LLC, (the "LLC Agreement")) in Feldman Equities
of Arizona, LLC (the "LLC"). The acquisition, holding and disposition of the
Interest shall be subject to the terms and conditions set forth in the LLC
Agreement, this Agreement, and any other agreements the Executive may enter into
with the Company or the LLC regarding such interests (including, without
limitation, the Contribution Agreement applicable to the acquisition of the
Interest).