SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K

|ý                                           | Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934    
|------------------------------------------- | ----------------------------------------------------------------------------------------
|For the fiscal year ended December 31, 2004
|OR                                         
|o                                           | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 000-23065

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BRADLEY OPERATING LIMITED PARTNERSHIP(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization) |  | 04-3306041(I.R.S. Employer
Identification No.)
|---------------------------------------------------------------------- |  | ----------------------------------------------

131 Dartmouth Street
Boston, Massachusetts 02116(Address, including zip code, of principal executive offices)

Registrant's telephone number, including area code: (617) 247-2200

|Securities registered pursuant to Section 12(b) of the Act: |  | None
|----------------------------------------------------------- |  | ----
|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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. 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. ý

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the
Act). Yes o    No ý

As of June 30, 2004, the aggregate market value of the 340,270 common units of limited partnership interest ("Units") held by non-affiliates of
the Registrant was $9.2 million based upon the last reported sale price of $27.06 per share on the New York Stock Exchange on June 30, 2004 of the common stock of Heritage Property
Investment Trust, Inc., a real estate investment trust and the sole stockholder of the sole general partner of the Registrant, for which the Units are redeemable under certain circumstances at
the election of Heritage Property Investment Trust, Inc. (For this computation, the Registrant has excluded the market value of all Units beneficially owned by Heritage Property Investment
Trust, Inc.)

Documents Incorporated by Reference

Heritage Property Investment Trust, Inc., the sole stockholder of the Registrant's sole general partner, expects to file no later than April 15,
2005, its definitive Proxy Statement for its 2005 Annual Meeting of Stockholders and hereby incorporates by reference into Part III hereof the portions of such Proxy Statement described in
Items 10, 11, 12, 13 and 14 hereof.



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BRADLEY OPERATING LIMITED PARTNERSHIP  ANNUAL REPORT ON FORM 10-K  INDEX

|Item No. |  |                                                                                                              |  | Page No.
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  | --------
|PART I   |  |                                                                                                             
|Item 1:  |  | Business                                                                                                     |  | 1       
|Item 2:  |  | Properties                                                                                                   |  | 19      
|Item 3:  |  | Legal Proceedings                                                                                            |  | 40      
|Item 4:  |  | Submission of Matters to a Vote of Security Holders                                                          |  | 40      
|PART II  |  |                                                                                                             
|Item 5:  |  | Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities |  | 41      
|Item 6:  |  | Selected Financial Data                                                                                      |  | 42      
|Item 7:  |  | Management's Discussion and Analysis of Financial Condition and
Results of Operations                        |  | 45      
|Item 7A: |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 64      
|Item 8:  |  | Financial Statements and Supplementary Data                                                                  |  | 66      
|Item 9:  |  | Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure                         |  | 66      
|Item 9A: |  | Controls and Procedures                                                                                      |  | 66      
|Item 9B: |  | Other Information                                                                                            |  | 66      
|PART III |  |                                                                                                             
|Item 10: |  | Directors and Executive Officers of the Registrant                                                           |  | 66      
|Item 11: |  | Executive Compensation                                                                                       |  | 66      
|Item 12: |  | Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters               |  | 67      
|Item 13: |  | Certain Relationships and Related Party Transactions                                                         |  | 67      
|Item 14: |  | Principal Accounting Fees and Services                                                                       |  | 67      
|PART IV  |  |                                                                                                             
|Item 15: |  | Exhibits and Financial Statement Schedules                                                                   |  | 68      

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PART I

Forward-Looking Statements

This Annual Report on Form 10-K, together with other statements and information we publicly disseminate contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements
relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. The forward-looking
statements reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly
from those expressed in any forward-looking statement. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and
which could materially affect actual results and therefore should not be relied upon. The factors that could cause actual results to differ materially from current expectations are discussed under
"Item 1BusinessRisk Factors." The forward-looking statements contained herein represent our judgment as of the date of this report, and we caution readers not to place undue
reliance on those statements.

Item 1: Business

Heritage Property Investment Trust, Inc., Bradley Operating Limited Partnership and their subsidiaries are separate legal entities. For ease of reference,
the terms "we," "us," and "ours" refer to the business and properties of all these entities, unless the context indicates otherwise. Similarly, references to "Heritage" or "the Company" refer to
Heritage Property Investment Trust, Inc. and its subsidiaries and references to "Bradley OP" refer to Bradley Operating Limited Partnership and its subsidiaries.

Overview

Bradley OP is one of the legal entities through which Heritage Property Investment Trust, Inc., a fully integrated, self-administered and
self-managed real estate investment trust, or "REIT," conducts substantially all of its business and owns (either directly or through subsidiaries) substantially all of its assets.
Heritage is one of the nation's largest owners of neighborhood and community shopping centers, with properties located in the Eastern, Midwestern and Southwestern United States. As of
December 31, 2004, Heritage had a shopping center portfolio consisting of 164 shopping centers, located in 29 states and totaling approximately 33.7 million square feet of total gross
leasable area ("GLA"), of which approximately 28.0 million square feet was Company-owned GLA. Heritage's shopping center portfolio was 93.3% leased as of December 31, 2004.

Heritage
is headquartered in Boston, Massachusetts and has sixteen regional offices located in the Eastern, Midwestern, and Southwestern United States. Heritage also owns three office
buildings.

Heritage
conducts its business exclusively through its subsidiaries and primarily through its two operating partnerships, Heritage Property Investment Limited Partnership, or Heritage
OP, and Bradley OP. Bradley OP is a Delaware limited partnership and is the primary entity through which Heritage conducts its operations in the Midwest. As of December 31, 2004, Bradley OP and
its subsidiaries owned 106 shopping centers, located in 21 states and totaling approximately 17.6 million square feet of Company-owned GLA.

Although
we generally manage the affairs of Bradley OP and Heritage OP in the same manner, we are operating two distinct operating partnerships as we have elected not to merge or combine
Heritage OP and Bradley OP as a legal matter at this time. As of December 31, 2004, we owned directly or indirectly all of the ownership interests in the Heritage OP and approximately 98.5% of
the ownership interests in the Bradley OP, and we are the sole general partner of Heritage OP and, through a wholly

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owned
subsidiary, of Bradley OP. This structure is commonly referred to as an umbrella partnership REIT or UPREIT.

Pursuant
to the Bradley OP partnership agreement, through our subsidiary acting as the sole general partner of Bradley OP, we generally have full, exclusive and complete responsibility
and discretion in the management, operation and control of Bradley OP, including the ability to cause Bradley OP to enter into certain major transactions, including acquisitions, developments and
dispositions of properties and refinancings of existing indebtedness.

Interests
in Bradley OP are evidenced by two classes of unit holders: general partner "common" units owned by our subsidiary as "GP Units," and limited partner "common" units evidenced
by "LP Units." The holders of LP Units have the right, under certain circumstances, to exchange their units for shares of Heritage common stock on a one-for-one basis. Holders
of GP Units and LP Units are referred to as "common unit holders."

LP
Units are generally held by persons who received limited partner interests in connection with their contributions of direct or indirect interests in one or more properties to Bradley
OP. Bradley OP is obligated to redeem each LP Unit at the request of the holder for cash equal to the fair market value of a share of our common stock at the time of the redemption. Heritage may elect
to acquire those LP Units presented for redemption for either one share of common stock or cash. With each redemption of LP Units, Heritage's percentage ownership interest in Bradley OP increases.
Bradley OP may issue additional LP Units to purchase additional properties or to purchase land parcels for the development of properties in transactions that defer some or all of the seller's tax
consequences. Offering LP Units instead of cash for properties may provide potential sellers with partial federal income tax deferral.

Bradley
OP also has the authority to issue preferred units that may have distribution and other rights senior to the rights of holders of common or preferred units.

Although
there is no separate trading market for LP Units, we believe the market value of the shares of Heritage common stock on the New York Stock Exchange may provide existing and
potential holders of LP Units with a mechanism by which to value LP Units from time to time, after giving effect to the particular tax position of each holder. The trading value of the common stock
serves as a useful surrogate for the value of LP Units because the distributions to the holders of LP Units are made concurrently with and in the same amount per LP Unit as distributions we pay to
each share of Heritage common stock and because of the redemption rights of the holders of the LP Units.

2004 Highlights and Recent Developments

Expansion of Shopping Center Portfolio

During 2004, we expanded our shopping center portfolio by acquiring four properties aggregating 1.1 million square feet of GLA, of which 0.9 million
square feet was Company-owned. Bradley OP acquired three of these properties, aggregating 0.7 million square feet of GLA, of which 0.5 million square feet was Company-owned. The
aggregate investment for the four properties was $153 million, which was funded through borrowings under our prior line of credit, the assumption of mortgage debt, and the issuance of common
units by Bradley OP.

Disposition of Non-Core Assets

During 2004, we also completed the disposition of two shopping centers, two shopping center parcels and one office building. The net proceeds from these
dispositions were $30.1 million, resulting in an aggregate gain of $4.0 million. Bradley OP completed the disposition of the two shopping centers and two shopping center parcels. The net
proceeds to Bradley OP were $22.7 million, resulting in an aggregate gain of $1.0 million. The proceeds from these sales were used to partially repay our prior

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line
of credit. The sale of these properties was consistent with our policy to sell assets that do not meet our long-term ownership criteria and redeploy the capital into the acquisition
of shopping centers.

Lakes Crossing Joint Venture

In May 2004, we completed our first joint venture for the development and construction of a shopping center located in Norton Shores (Muskegon), Michigan,
a suburb of Grand Rapids. The joint venture is owned equally by Bradley OP and Westwood Development Group, a regional developer based in Michigan. Bradley OP made an initial equity investment of
$3.3 million and provided a short-term bridge loan of approximately $9.2 million, which was repaid in November 2004.

The
center, known as Lakes Crossing, began construction in late 2003 and is expected to be completed by the spring of 2006. Lakes Crossing is located on an approximately 58.5 acre site
and is situated at the intersection of US Highway 31 and Harvey Street, directly across from Lakes Crossing Mall. The project will contain approximately 302,000 square feet of retail space, of which
210,000 square feet will be owned by the joint venture. Lakes Crossing is anchored by Kohl's Department Stores (which owns its 88,000 square foot location) and will feature a mix of national and local
retailers. The joint venture has signed lease agreements with Circuit City, Catherine's, Shoe Carnival, Johnny Carino's, Logan's Roadhouse, Jo 2 Go and Quizno's totaling 67,000 square feet. The joint
venture has also entered into letters of intent for leases with additional national retailers totaling 66,000 square feet.

In
November 2004, the joint venture obtained a $22 million construction loan from Key Bank, National Association, a portion of which was used to pay off the
$9.2 million bridge loan referred to above. The Key Bank loan matures in November 2006 (subject to extension) and has been fully guaranteed by the Company and Bradley OP.

April Debt Offering

On April 1, 2004, we completed the issuance and sale of $200 million principal amount of unsecured 5.125% notes due April 15, 2014. These
notes were priced to yield 5.236% at a spread of 135 basis points over the comparable U.S. Treasury note. Including all offering expenses, the original issuance discount and the settlement of forward
swaps entered in advance of the issuance of the notes, the all-in effective interest rate of the unsecured notes is 5.33%. These notes were guaranteed by Bradley OP and Heritage OP.
Through a subsidiary, we contributed the net proceeds of this offering to Bradley OP and received an intercompany note from Bradley OP. All of the net proceeds of this offering were then used by
Bradley OP to reduce the outstanding balance under our prior line of credit.

October Debt Offering

On October 15, 2004, we completed the offering and sale of $150 million principal amount of unsecured 4.50% notes due October 15, 2009. These
notes were priced to yield 4.521% at a spread of 118 basis points over the comparable U.S. Treasury note. Including all offering expenses and the settlement of the forward swaps in advance of the
issuance of the notes, the all-in effective interest rate of the unsecured notes is 5.03%. These notes were guaranteed by Bradley OP and Heritage OP. Through a subsidiary, we contributed
the net proceeds of this offering to Bradley OP and received an intercompany note from Bradley OP. All of the net proceeds of this offering were then used by Bradley OP to reduce the outstanding
balance under our prior line of credit.

Redemption of Series B Preferred Units

On February 23, 2004, Bradley OP redeemed all of its outstanding 8.875% Series B Cumulative Redeemable Perpetual Preferred Units. All 2,000,000 of
the outstanding Series B Preferred Units were redeemed at a redemption price of approximately $25.00 per unit. There were no unamortized issuance

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costs
associated with the Series B Preferred Units, therefore, Bradley OP did not incur a charge in connection with this redemption.

Redemption of Series C Preferred Units

On September 7, 2004, Bradley OP redeemed all of its outstanding 8.875% Series C Cumulative Redeemable Perpetual Preferred Units. All 1,000,000 of
the outstanding Series C Preferred Units were redeemed at a redemption price of approximately $25.00 per unit. There were no unamortized issuance costs associated with the Series C
Preferred Units, therefore, Bradley OP did not incur a charge in connection with this redemption. As a result of the redemption of the Series C Preferred Units, there are currently no preferred
units of Bradley OP outstanding.

Repayment of Bonds

On November 15, 2004, Bradley OP repaid upon maturity all of its $100 million aggregate principal amount of 7% Notes due 2004, which were issued in
November 1997. Bradley OP funded this repayment through borrowings under our prior line of credit.

Payment of Distributions

During 2004, Bradley OP paid aggregate distributions on its LP Units of $2.10 per unit.

New Line of Credit

On March 29, 2005, we entered into a new three-year $400 million unsecured line of credit with a group of lenders and Wachovia Bank, National
Association, as agent, expiring March 28, 2008, subject to a one-year extension. At Heritage's request, this new line of credit may be increased to $500 million. Heritage is the borrower
under this new line of credit and Bradley OP, Heritage OP and certain of our other subsidiaries, have guaranteed this line of credit. This new line of credit replaces our existing line of credit,
which would have matured on April 29, 2005 and we repaid the entire outstanding amount under our prior line of credit with borrowings under this new line of credit. This new line of credit will
be used principally to fund growth opportunities and for working capital purposes.

Business and Growth Strategies

Although the operations of Bradley OP are separate from the operations of Heritage OP and our other subsidiaries, our business and growth strategies with respect
to the operations of Bradley OP are identical to our strategies in managing our other operations.

Our
business strategy has been, and will continue to be, to generate stable and increasing cash flow and asset value by acquiring and managing a portfolio of real estate properties
located in attractive markets with strong economic and demographic characteristics. Our business strategy consists of the following elements:



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Our Competitive Strengths

We seek to implement our strategy in a number of ways, including by our:



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Financing Strategy

Our financing strategy with respect to the operations of Bradley OP is identical to our strategy in financing our other operations. We seek to maintain a strong
financial position by maintaining a prudent level of leverage and managing our variable interest rate exposure. We have accomplished this by being flexible in selecting the best means available of
financing our operations and growth, including accessing the public equity markets.

In
April 2002, we completed our initial public offering and sold 14,080,556 shares of our common stock at a price of $25.00 per share resulting in net proceeds to us of
$323 million. We used the net proceeds of our initial public offering to reduce our indebtedness.

In
December 2003, we completed a secondary public offering of our common stock and sold a total of 3,932,736 shares at a net price of $28.27 per share resulting in net proceeds to
us of $111 million. We used the net proceeds to reduce our indebtedness.

At
December 31, 2004, we had approximately $1.3 billion of indebtedness consisting of a combination of our prior unsecured line of credit, unsecured notes issued by the
Company and by Bradley OP and mortgage indebtedness. This aggregate indebtedness had a weighted average interest rate of 6.19% with an average maturity of 5.0 years. As of
December 31, 2004, our market capitalization was $2.8 billion, resulting in a debt-to-total market capitalization ratio of approximately 46.0%.

On
March 29, 2005, we entered into a new three-year $400 million unsecured line of credit with a group of lenders and Wachovia Bank, National Association, as agent,
expiring March 28, 2008, subject to a one-year extension. At Heritage's request, this new line of credit may be increased to $500 million. Heritage is the borrower under this new line of
credit and Bradley OP, Heritage OP and certain of our other subsidiaries, have guaranteed this line of credit. This new line of credit replaces our prior line of credit, which would have matured on
April 29, 2005 and we repaid the entire outstanding balance under our prior line of credit with borrowings under this new line of credit. This new line of credit will

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be
used principally to fund growth opportunities and for working capital purposes. As of March 29, 2005, $211 million was outstanding under this new line of credit.

On
April 1, 2004, we completed the issuance and sale of $200 million principal amount of unsecured 5.125% notes due April 15, 2014. These notes were priced to yield
5.236% at a spread of 135 basis points over the comparable U.S. Treasury note. Bradley OP and Heritage OP guaranteed these notes. Through a subsidiary, we contributed the net proceeds of this offering
to Bradley OP and received an intercompany note from Bradley OP. All of the net proceeds of this offering were then used by Bradley OP to reduce the outstanding balance under our prior line of credit.
Including all offering expenses, the original issuance discount and the settlement of forward swaps entered into in advance of the issuance of the notes, the all-in effective interest rate
of the unsecured notes is 5.33%.

On
October 15, 2004, the Company completed the offering and sale of $150 million principal amount of unsecured 4.50% notes due October 15, 2009. These notes were
priced to yield 4.521% at a spread of 118 basis points over the comparable U.S. Treasury note. Bradley OP and Heritage OP guaranteed these notes. These notes were guaranteed by Bradley OP and Heritage
OP. Through a subsidiary, we contributed the net proceeds of this offering to Bradley OP and received an intercompany note from Bradley OP. All of the net proceeds of this offering were then used by
Bradley OP to reduce the outstanding balance under our prior line of credit. Including all offering expenses and the settlement of the forward swaps entered into in advance, the all-in
effective interest rate of the unsecured notes is 5.03%.

We
intend to finance future growth with the most advantageous source of capital available. These sources may include selling common stock, preferred stock or debt securities through
public offerings or private offerings, incurring or assuming additional indebtedness through secured or unsecured borrowings, issuing units of limited partnership interests in Bradley OP in exchange
for contributed property, and reinvesting proceeds received upon the disposition of properties.

In
addition, we expect to enter into joint ventures with institutions or developers to acquire properties or portfolios, reducing the amount of capital required by us to make those
investments. Joint venturing of shopping centers also provides us with a capital source for new development, as well as the opportunity to earn fees for asset and property management services. As
asset manager, we will be engaged by our partners to apply similar operating, investment, and capital strategies to the portfolios owned by the joint ventures.

During
October 2003, we filed a shelf registration statement on Form S-3 for up to $500 million of debt securities, preferred stock, common stock and
common stock warrants. This shelf registration statement will permit us to utilize the public debt and equity markets as a principal source of capital for our expansion and other needs. As of
March 31, 2005, we had approximately $389 million available for issuance under this shelf registration statement.

We
believe that our existing working capital and cash provided by operations should be sufficient to meet our short-term liquidity requirements, consisting primarily of funds
necessary for operating expenses and other property expenditures, recurring maintenance capital expenditures, interest expense and scheduled principal payments on outstanding indebtedness and future
distributions to our stockholders. In addition, we believe that our existing working capital, cash provided by operations, secured and unsecured indebtedness, our new line of credit and equity capital
will continue to be available to us in the future to fund our long-term liquidity requirements consisting primarily of funds necessary to pay for scheduled debt maturities, renovations,
expansions and other non-recurring capital expenditures that need to be made periodically to our properties, and the costs associated with acquisitions of properties that we pursue.

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Growth Strategy

Acquisitions

We target multi-anchored, open-air neighborhood and community shopping centers generally containing greater than 125,000 square feet of GLA. In
particular, we seek to acquire those shopping centers anchored by market-leading grocers or those regional operators who have dominant positions in their trade areas. In addition, we focus on the
presence of, or the ability to add, other additional anchor(s) for these centers, including electronics, home improvement, off-price retailers, office superstores, and fabric and clothing
retailers, all of whom we believe to be generally beneficial to the value of the center. In addition to those anchors, we also seek properties with a diverse tenant mix that includes service
retailers, such as banks, florists, restaurants, and apparel and specialty shops. We seek a convenient and easily accessible location with abundant parking close to residential communities, with
excellent visibility for our tenants and easy access for neighborhood shoppers.

With
respect to our geographical focus, historically, our acquisition activities were focused primarily in the Eastern and Midwestern United States. We seek to establish a significant
market presence by owning multiple properties in an area. As our portfolio has grown, we have employed and will, in the future, continue to employ, a dual strategy that focuses our acquisition
activities primarily in the top 50 MSA's. The first part of our strategy is to target properties in geographic areas proximate to our existing neighborhood and community shopping centers, which allows
us to maximize our current resources and manage expenses. In 2004, we acquired four additional shopping centers consistent with this strategy.

The
second part of our strategy is to explore opportunities to expand into other geographic markets, particularly where the opportunity presented is a sizable portfolio that will allow
us to reach an economy of scale. In 2003, we capitalized on just such an opportunity when we entered the Texas marketplace for the first time through our Trademark portfolio acquisition, consisting of
eight properties. In connection with this transaction, we also established a regional office in Dallas, Texas, which will facilitate future growth in Texas. We anticipate that we will use this
transaction to further expand in the Southwestern and/or Western United States marketplaces in the future.

With
the emergence of Wal-Mart and increased consolidation within the traditional grocer industry, in the future, we expect that some of the shopping centers we may acquire
will not contain a traditional grocer-anchor. These centers may, in some instances, contain a specialty grocer. However, we will continue to focus on acquiring our core property
typedominant, well-established grocer- and multi-anchored centers located in densely populated communities in Top 50 MSAs within our core markets.

We
will continue to evaluate all potential acquisitions on a property-by-property and market-by-market basis. We evaluate each market
based on similar criteria, including: stable or growing population base; positive job growth; diverse economy, and other competitive factors.

Joint Ventures

In 2004, we added a new component to our growth strategy through our pursuit of strategic joint ventures. These joint ventures will provide us with greater access
to potential acquisitions and alternative sources of capital to fund acquisitions. We expect such joint ventures to take one of two forms.

The
first type of joint venture arrangement we are pursuing are arrangements with third party developers. In these joint ventures, we will partner with a local developer to develop and
construct shopping centers in attractive markets. Fundamentally, this development joint venture strategy is simply an extension of our acquisition philosophy because these joint ventures will enable
us to take advantage of attractive opportunities to "pre-purchase" quality assets. These properties will be substantially similar

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to
those properties within our core portfolio. In addition, these joint ventures will provide us with the potential for generating fee income.

In
May 2004, we completed our first joint venture for the development and construction of a 302,000 square foot shopping center located in Norton Shores (Muskegon), Michigan, a
suburb of Grand Rapids. The joint venture is owned equally by Bradley OP and Westwood Development Group, a regional developer based in Michigan. Bradley OP made an initial equity investment of
$3.3 million and provided a short-term bridge loan of approximately $9.2 million, which was repaid in November 2004.

The
second type of joint venture arrangement we are pursuing are arrangements with institutional investors. These joint ventures allow us to use our management experience and
infrastructure to expand our portfolio, generating solid returns for both our partners and ourselves and enabling us to earn steady fee income. We expect the types of properties we might acquire
through these joint ventures to be substantially similar to those properties we seek to acquire for our core portfolio.

We
expect to increase our joint venture activity in these areas in 2005.

Dispositions

We generally hold our properties for investment and the production of rental income and not for sale to buyers in the ordinary course of our business. However, we
continually analyze each asset in our portfolio and will consider those properties that might be sold or exchanged for optimal sale prices or exchange values, given prevailing market conditions and
the particular characteristics of each property.

In
2004, we also focused more closely on our capital recycling program as we continued to determine those properties that do not meet our long-term strategy due to their
size, geographic location or lack of sufficient growth opportunities. In 2004, we completed the disposition of two shopping centers, two shopping center parcels and one office building. In the future,
through our capital recycling program, we will dispose of additional properties that are not a strategic fit within our overall portfolio.

In-House Leasing and Property Management Program

We believe that effective leasing is the key to successful asset management. We maintain close relationships with our tenants, properties and markets by
maintaining 16 regional offices in addition to our corporate headquarters in Boston. A majority of these offices are staffed with leasing representatives. Our primary goal is for each leasing
representative to become an expert in his or her marketplace by becoming familiar with current tenants as well as potential local, regional and national
tenants who would complement our current tenant mix. The renewal and replacement of tenants is critical to our leasing and management performance.

Our
full time property managers are located throughout our regional offices, which make them easily accessible to our properties. This enables our managers to remain in frequent contact
with our tenants and to ensure the proper maintenance of our properties. We periodically renovate and improve our properties in order to keep them in top condition to enable us to attract and retain
our tenants.

Our
leasing and property management functions are supervised and administered by our senior officers at our Boston headquarters. Corporate management, leasing and property management
personnel regularly visit all of our properties to support our regional personnel and to ensure implementation of our policies and directives.

Competition

We encounter competition for acquisitions of existing income-producing properties. We also face competition in leasing available space at our properties to
prospective tenants. The actual competition

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for
tenants varies depending upon the characteristics of each local market in which we own and manage property. We believe that the principal competitive factors in attracting tenants in our market
areas are location, price, and the presence of anchor tenants and maintenance of properties.

We
believe that competition for the acquisition and operation of retail shopping centers is highly fragmented. We face competition from institutional pension funds, other domestic and
foreign institutional investors, other REITs and owner-operators engaged in the acquisition, ownership and leasing of shopping centers as well as from numerous local, regional and national real estate
developers and owners in each of our markets. In recent years, competition for the acquisition of properties has grown more fierce.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be liable for the costs of removal or remediation
of hazardous or toxic substances present
at, on, under, in, or released from its property. We currently have approximately eighteen properties in our portfolio that are undergoing or have been identified as requiring or potentially requiring
some form of remediation (including monitoring for compliance) to clean up contamination. In some cases, contamination has migrated into the groundwater beneath our properties from adjacent
properties, such as service stations. In other cases, contamination has resulted from on-site uses by current or former owners or tenants, such as gas stations or dry cleaners, which have
released pollutants such as gasoline or dry-cleaning solvents into soil and/or groundwater. Based on our experience with properties in our portfolio, we believe the cost of remediation for
contamination resulting from dry-cleaning pollutants will range from approximately $15,000 to $450,000 per property, and the cost of remediation for contamination from gasoline pollutants
will range from approximately $15,000 to $100,000 per property. Any failure to properly remediate the contamination at our properties may result in liability to federal, state or local governments for
damages to natural resources or liability to third parties for property damage or personal injury and may adversely affect our ability to operate, lease or sell that property.

Of
the approximately eighteen properties cited above, half of those properties were contributed to us by Net Realty Holding Trust, our largest stockholder. These contributed properties
(together with approximately ten other contributed properties for which no remediation is currently taking place) are the subject of an indemnity arrangement under which Net Realty Holding Trust has
agreed to indemnify us against environmental liabilities up to $50 million in the aggregate. None of the properties covered by this indemnity are within Bradley OP's portfolio. Since our
formation in 1999, we have been reimbursed by Net Realty Holding Trust for approximately $2.1 million of environmental costs pursuant to this indemnity. Although we do not believe that the
aggregate indemnity amount will be needed, we believe that Net Realty Holding Trust has the ability to perform under its indemnity up to the aggregate amount. In addition, each of the properties for
which we are actively pursuing remediation to clean up contamination is covered by this indemnity.

With
respect to the remaining properties cited above not covered by the Net Realty Holding Trust indemnity, no clean-up activities are currently taking place and our
requisite on-going responsibilities are to monitor those properties for compliance and to determine if any remediation or other action may be required in the future. We believe that the
costs of monitoring these properties are not material, individually or in the aggregate, to our or Bradley OP's financial condition and we have established reserves for such costs.

In
addition to the costs of remediation described above, we may incur additional costs to comply with federal, state and local laws, ordinances and regulations relating to environmental
protection and human health and safety generally. These laws, ordinances and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and
above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, the

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management
of asbestos and the remediation of contamination. Some of these laws, ordinances and regulations may impose joint and several liabilities on current or former tenants, owners or operators
for the costs of investigation or remediation of contaminated properties, regardless of fault or the legality of the actions that caused the contamination. Some of these laws and regulations require
compliance with new or more stringent standards as of future dates. Compliance with new or more stringent laws or regulations, stricter interpretation of existing laws or the future discovery of
environmental contamination may require material expenditures on our part. Future laws, ordinances or regulations may impose material environmental liability, or the current environmental condition of
our properties may affect the operations of our tenants, the existing condition of the land, operations in the vicinity of the properties, such as the presence of underground storage tanks, or the
activities of unrelated third parties. These laws typically allow liens to be placed on the affected property. In addition, there are various local, state and federal fire, health,
life-safety and similar regulations which may be applicable to our operations, and which may subject us to liability in the form of fines or damages for noncompliance.

Employees

We run the day-to-day operations of Bradley OP. At December 31, 2004, we had 156 total employees. Our employees included 26 leasing
and support personnel, 57 property management and support personnel, 9 legal and support personnel, and 64 corporate management and support personnel. We believe that our relations with our employees
are good. None of our employees are unionized.

Available Information

Heritage Property Investment Trust, Inc., the sole stockholder of our sole general partner, has a web site located at http://www.heritagerealty.com. On its
Web site, you can obtain a copy of Heritage's annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after such material is
electronically filed with, or furnished to, the Securities and Exchange Commission (the "SEC"). We do not make Bradley OP's reports available on our website. You may obtain Bradley OP's
reports by accessing the EDGAR database at the SEC's website at http://www.sec.gov, or we will furnish an electronic or paper copy of these reports free of charge upon written request to:

Heritage
Property Investment Trust, Inc.
Investor Relations
131 Dartmouth Street
Boston, MA 02116
(617) 247-2200

Also
posted on Heritage's web site, and available in print upon request to our Investor Relations department, are the charters for Heritage's Audit Committee, Compensation Committee and
Nominating and Corporate Governance Committee, Heritage's Corporate Governance Guidelines, Code of Ethics for Financial Professionals, Code of Business Conduct and Ethics governing our directors,
officers and employees and Whistleblower Policy. Within the time period required by the SEC and the New York Stock Exchange, we will disclose on our web site any amendment to, or waiver from, a
provision of our Code of Ethics for Financial Professionals and our Code of Business Conduct and Ethics. In addition, Heritage's web site includes information concerning purchases and sales of
Heritage's common stock by its executive officers and directors, as well as disclosure relating to certain non-GAAP financial measures (as defined in the SEC's Regulation G) that we
may make public orally, telephonically, by webcast, by broadcast or by similar means from time to time.

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Risk Factors



Adverse market conditions affect our results of operations.

The economic performance and value of our real estate assets is subject to all of the risks associated with owning and operating real estate, including risks
related to adverse changes in national, regional and local economic and market conditions. Our properties currently are located in 29 states, primarily in the East and the Midwest. The economic
condition of each of our markets may be dependent on one or more industries. An economic downturn generally or in one of these industry sectors may result in an increase in tenant bankruptcies, which
may harm our performance in the affected market. Economic and market conditions also may impact the ability of our tenants to make lease payments. If our properties do not generate sufficient income
to meet our operating expenses, including future debt service, our income and results of operations would be significantly harmed.

Downturns or changes in the retailing industry will have a direct impact on our performance.

Our properties consist of neighborhood and community shopping centers. Our performance, therefore, is linked to economic conditions in the market for retail space
generally. The market for retail space has been, and could in the future be, adversely affected by weakness in the national, regional and local economies, the adverse financial condition of some large
retailing companies, the ongoing consolidation in the retail sector, the increasing market strength of Wal-Mart, including its continued growth as a grocer, the excess amount of retail
space in a number of markets, and increasing consumer purchases through catalogues or the Internet. In particular, consolidation within the retail industry has
reduced the number of prospective tenants to lease our available space. Furthermore, many national tenants have increased their overall buying power as a result of consolidation, thereby increasing
their leverage in negotiating lease terms with us. To the extent that any of these conditions occur or continue, they are likely to impact market rents for retail space.

A downturn in our tenants' businesses, tenant bankruptcies, leasing delays we encounter, particularly with respect to our anchor tenants, will affect
our ability to collect balances due from tenants and would seriously harm our operating results.

At any time, our tenants may experience a downturn in their businesses that may weaken their financial condition. As a result, our tenants may delay lease
commencement, fail to make rental payments when due, or declare bankruptcy. We are subject to the risk that these tenants may be unable to make their lease payments or may decline to extend a lease
upon its expiration. Any tenant bankruptcies, leasing delays, or failure to make rental payments when due could result in the termination of the tenant's lease and material losses to our company and
would harm our operating results.

Any
bankruptcy filings by or relating to one of our tenants or a lease guarantor would bar all efforts by us to collect pre-bankruptcy debts from that tenant, the lease
guarantor or their property, unless we receive an order permitting us to do so from the bankruptcy court. A tenant or lease guarantor bankruptcy could delay our efforts to collect past due balances
under the relevant leases, and could ultimately preclude full collection of these sums. If a tenant assumes the lease while in bankruptcy, all pre-bankruptcy balances due under the lease
must be paid to us in full. However, if a tenant rejects the lease while in bankruptcy, we would have only a general unsecured claim for pre-petition damages. Any unsecured claim we hold
may be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. It is possible that we may recover substantially less than
the full value of any unsecured claims we hold, which may harm our financial condition.

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Certain provisions of our leases with our tenants may harm our operating performance.

We have entered into leases with our tenants that allow the tenant to terminate their lease or to pay reduced rent from us if an anchor tenant in the same
shopping center terminates its lease with us or fails to occupy the premises. In that event, we may be unable to re-lease the vacated space. Similarly, the leases of some anchor tenants
may permit the anchor tenant to transfer its lease to another retailer. The transfer to a new anchor tenant could cause customer traffic in the retail center to decrease, which would reduce the income
generated by that retail center. A transfer of a lease to a
new anchor tenant could also allow other tenants to make reduced rental payments or to terminate their leases at the retail center.

In
addition, in many cases, our tenant leases contain provisions giving the tenant the exclusive right to sell particular types of merchandise or provide specific types of services
within the particular retail center, or limit the ability of other tenants within that center to sell that merchandise or provide those services. When re-leasing space after a vacancy by
one of these other tenants, these provisions may limit the number and types of prospective tenants for the vacant space. The failure to re-lease or to re-lease on satisfactory
terms could harm our operating results.

We face considerable competition in the leasing market and may not be able to renew leases or re-let space as leases expire.

We face competition from similar retail centers within the trade areas of each of our centers when renewing leases or releasing space as leases expire. In
addition, any new competitive properties that are developed within the trade areas of our existing properties may result in increased competition. Even if our tenants do re-new or we are
successful in re-letting space, it is possible that the terms of renewal or re-letting may be less favorable than existing lease terms.

For
example, increased competition for tenants may require us to make capital improvements to properties that we would not have otherwise planned to make. Any unbudgeted capital
expenditures we undertake may divert cash that would otherwise be available for distributions to stockholders. Ultimately, to the extent we are unable to renew leases or re-lease space as
leases expire, cash flow from tenants would be decreased resulting in lower operating results.

We face increasing competition in the acquisition of additional real estate properties and other assets.

We face competition in making acquisitions of additional real estate properties and other assets. Integral to our business strategy is our ability to expand
through acquisitions, which requires us to identify suitable acquisition candidates or investment opportunities that meet our criteria and are comparable with our growth strategy. We compete with many
other entities engaged in real estate investment activities for acquisitions of retail shopping centers, including institutional pension funds, other domestic and foreign institutional investors,
other REITs and other owner-operators of shopping centers. These competitors may drive up the price we must pay for the real estate properties, other assets and other companies we seek to acquire, or
may succeed in acquiring those companies or assets themselves. In addition, our potential acquisition targets may find our competitors to be more attractive suitors because they may have greater
resources, may be willing to pay more, or may have a more compatible operating philosophy. In particular, larger REITs may enjoy significant competitive
advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies.

In
addition, during 2004, the number of entities and the amount of funds competing for suitable investment properties continued to increase. This resulted in increased demand for these
assets and therefore increased prices paid for them. If we pay higher prices for properties, our profitability will be reduced.

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Future acquisitions of properties may not yield the results we expect.

We intend to continue acquiring shopping centers. We face the risk that newly acquired properties may fail to perform as we anticipate. For instance, acquired
properties may not perform as well as we anticipate because of changes in demand for retail space that negatively impact our ability to renew leases or re-let space. In addition, our
management may underestimate the costs necessary to integrate acquired properties within our portfolio.

We anticipate that our working capital reserves and cash flow from operations may not be adequate to cover all of our cash needs and we will have to
obtain financing from other sources.

We anticipate that our working capital reserves will not be adequate to cover all of our cash needs. In order to cover those needs, we may have to obtain
financing from other sources. Sufficient financing may not be available or, if available, may not be available on economically feasible terms or on terms acceptable to us. Additional borrowings for
working capital purposes will increase our interest expense, and therefore may harm our financial condition and results of operations.

We have over $1.3 billion of debt, a portion of which is variable rate debt, which may impede our business and operating performance.

We have over $1.3 billion of outstanding indebtedness, approximately $226 million of which bears interest at a variable rate, and we have the
ability to borrow $189 million of additional variable rate debt under our new line of credit. Increases in interest rates on our existing indebtedness would increase our interest expense, which
could harm our cash flow and our ability to pay distributions.

As
we anticipate that our internally generated cash will be adequate to repay only a portion of our indebtedness prior to maturity, we expect that we will be required to repay debt
through re-financings and/or equity offerings. In particular, as of December 31, 2004, we had outstanding indebtedness that required principal amortization and balloon payments of
$241 million in 2005. On March 29, 2005, $196 million of this indebtedness, which related to our prior line of credit, was repaid through our new line of credit having a new
maturity date of March 29, 2008. It is likely that we will not have sufficient funds on hand to repay the remaining 2005 balloon amounts at maturity and that we will have to borrow
additional funds to make these payments. The amount of our existing indebtedness may adversely affect our ability to repay debt through re-financings. If we are unable to refinance our
indebtedness on acceptable terms, or at all, we might be forced to dispose of one or more of our properties on disadvantageous terms, which might result in losses to us and which might adversely
affect cash available for distributions. If prevailing interest rates or other factors at the time of refinancing result in higher interest rates on refinancing, our interest expense would increase,
which would adversely affect our operating results.

We
also intend to incur additional debt in connection with future acquisitions of real estate. We may, in some instances, borrow under our new line of credit or borrow new funds to
acquire properties. In addition, we may incur or increase our mortgage debt by obtaining loans secured by a portfolio of some or all of the real estate properties we acquire. We may also borrow funds,
if necessary, to satisfy the requirement that we distribute to stockholders as distributions at least 90% of our annual REIT taxable income, or otherwise as is necessary or advisable to ensure that we
maintain our qualification as a REIT for federal income tax purposes.

Our
substantial debt may harm our business and operating results, including:



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Our financial covenants may restrict our operating or acquisition activities.

The mortgages on our properties contain customary negative covenants such as those that limit our ability, without the prior consent of the lender, to further
mortgage the applicable property or to discontinue insurance coverage. In addition, our outstanding unsecured debt contains customary restrictions, requirements and other limitations on our ability to
incur indebtedness, including total debt to assets ratios, secured debt to total asset ratios, debt service coverage ratios and minimum ratios of unencumbered assets to unsecured debt, which we must
maintain. Our ability to borrow under our line of credit is subject to compliance with these financial and other covenants.

We
rely on borrowings under our line of credit to finance acquisitions and redevelopment activities and for working capital, and if we were unable to borrow under our line of credit or
to refinance existing indebtedness, our financial condition and results of operations would likely be adversely impacted. Our line of credit and the indentures under which we have previously issued
unsecured public debt also contain limitations on our ability to incur future secured and unsecured debt. If we need to pledge properties in order to borrow additional funds, these covenants could
reduce our flexibility in conducting our operations by limiting our ability to borrow and may create a risk of default on our debt if we cannot continue to satisfy these covenants. If we breach
covenants in our debt agreements, the lender can declare a default and require us to repay the debt immediately and, if the debt is secured, can immediately take possession of the property securing
the loan.

We could become too highly leveraged because our organizational documents do not contain any limitation on the amount of debt we may incur.

Our organizational documents do not limit the amount of indebtedness that we, or our two operating partnerships, including Bradley OP, may incur. Although
we intend to maintain a balance between our total outstanding indebtedness and the value of our portfolio, we could alter this balance at any time. If we become highly leveraged, then the resulting
increase in debt service could adversely affect our ability to make payments on our outstanding indebtedness and harm our financial condition.

A downgrade in our credit rating could negatively impact us.

The floating rate of interest applicable to our line of credit is determined based on the credit ratings of our debt provided by independent rating agencies.
Thus, if these credit ratings are downgraded, our interest expense will be, and our ability to raise additional debt may be, negatively impacted.

We do not have exclusive control over our joint venture investments, so we are unable to ensure that our objectives will be pursued.

We have invested in some cases as a co-venturer or partner in the development or redevelopment of new properties, instead of developing projects
directly. These investments involve risks not present in a wholly owned development or redevelopment project. In these investments, we do not have exclusive control over the development, financing,
leasing, management and other aspects of the project. As a result, the co-venturer or partner might have interests or goals that are inconsistent with our interests or goals, take action
contrary to our interests or otherwise impede our objectives. The co-venturer or partner also might become insolvent or bankrupt.

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Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and
New York Stock Exchange rules, are creating uncertainty for companies such as ours. These new or changed laws, regulations and standards are subject to varying interpretations in many cases due to
their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing
uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We
are committed to maintaining high standards of corporate governance and public disclosure. As a result, our efforts to comply with evolving laws, regulations and standards have
resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance
activities. In particular, our ongoing efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002 and the related regulations regarding our required assessment of our internal
controls over financial reporting
and our external auditors' audit of that assessment has required the commitment of significant financial and managerial resources. We expect these efforts to require the continued commitment of
significant resources. Further, our board members, chief executive officer and chief financial officer could face an increased risk of personal liability in connection with the performance of their
duties. As a result, we may have difficulty attracting and retaining qualified board members and executive officers, which could harm our business. If our efforts to comply with new or changed laws,
regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, our reputation may be harmed.

The costs of compliance with laws and changes in laws may harm our operating results.

Costs associated with complying with laws and changes in laws may adversely affect our financial condition and operating results. We have incurred increases in
expenses as a result of regulatory changes and the costs of compliance at the corporate level associated with maintaining our status as a public company. These expenses are generally not passed
through to our tenants under our leases. As a result, these increased expenses may adversely affect our cash flow and our ability to service our debt and make distributions to our stockholders.

In
addition, our properties are subject to various federal, state and local regulatory requirements, such as the requirements of the Americans with Disabilities Act of 1990 and state and
local fire and life safety requirements. Failure to comply with these requirements could result in the imposition of fines by regulatory agencies and governmental authorities or awards of damages to
private litigants. In addition, these requirements are subject to change and new requirements could be imposed that would require significant unanticipated expenditures by us. Any of these events
could adversely affect our cash flow and distribution to stockholders.

If we suffer losses that are not covered by insurance or that are in excess of our insurance coverage limits, we could lose invested capital and
anticipated profits.

Catastrophic losses, such as losses due to wars, terrorist attacks, earthquakes, floods, hurricanes, pollution or environmental matters, generally are either
uninsurable or not economically insurable, or may be subject to insurance coverage limitations, such as large deductibles or co-payments. If one of these events occurred to, or caused the
destruction of, one or more of our properties, we could lose both our invested capital and anticipated profits from that property.

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Liquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties.

Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties in our portfolio in response to changing economic,
financial and investment conditions is limited. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors,
including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any property for the price or on the terms set by us, or whether any price or other terms
offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to complete the sale of a property. In addition, in
recent years, some national anchor tenants have purchased their own parcels within our centers, which could reduce the value of our centers.

We
may be required to expend funds to correct defects or to make improvements before a property can be sold. We may not have funds available to correct those defects or to make those
improvements. In acquiring a property, we may agree to lockout provisions that materially restrict us from selling that property for a period of time or impose other restrictions, such as a limitation
on the amount of debt that can be placed or repaid on that property. These lockout provisions would restrict our ability to sell a property. These factors and any others that would impede our ability
to respond to adverse changes in the performance of our properties could significantly harm our financial condition and operating results.

Heritage's largest stockholder owns approximately 42% of its common stock, exercises significant control of Heritage and may delay, defer or prevent us
from taking actions that would be beneficial to Heritage's and Bradley OP's other securityholders.

Heritage's largest stockholder, Net Realty Holding Trust, a wholly-owned subsidiary of NETT, owns approximately 42% of the outstanding shares of Heritage's common
stock and has the right to nominate four of its directors. Accordingly, Net Realty Holding Trust is able to exercise significant control over the outcome of substantially all matters required to be
submitted to Heritage's stockholders for approval, including decisions relating to the election of its board of directors, and the determination of Heritage's day-to-day
corporate and management policies. In addition, Net Realty Holding Trust is able to exercise significant control over the outcome of any proposed merger or consolidation of Heritage under Maryland
law. Net Realty Holding Trust's ownership interest may discourage third parties from seeking to acquire control of Heritage, which may adversely affect Heritage's and Bradley OP's
securityholders.

Limits on changes in control of Heritage may discourage takeover attempts beneficial to Heritage's and Bradley OP's securityholders.

Heritage's organizational documents contain provisions which may have the effect of delaying, deferring or preventing a change in control of Heritage or the
removal of existing management and, as a result, could prevent Heritage's and Bradley OP's securityholders from being paid a premium for their interests over the then-prevailing
market prices. These provisions include staggered terms for directors, advance notice requirements for stockholder proposals and the absence of cumulative voting rights. In addition, Heritage's
organizational documents permit its board of directors to issue up to 50,000,000 shares of preferred stock, having those preferences, conversion or other rights, voting powers, restrictions,
limitations as to distributions, qualifications, or terms or conditions of redemption as determined by the board. Thus, Heritage's board could authorize the issuance of preferred stock with terms and
conditions which could have the effect of discouraging a takeover or other transaction in which holders of some or a majority of Heritage's and Bradley OP's interests might receive a premium
for their interests over the then-prevailing market price of those interests.

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Heritage's board of directors has adopted the limitations available in Maryland law on changes in control that could prevent transactions in the best
interests of Heritage's and Bradley OP's securityholders.

Certain provisions of Maryland law applicable to Heritage prohibit "business combinations," including certain issuances of equity securities, with any person who
beneficially owns 10% or more of the voting power of outstanding shares, or with an affiliate of ours who, at any time within the two-year period prior to the date in question, was the
beneficial owner of 10% or more of the voting power of the outstanding voting shares (which is referred to as a so-called "interested stockholder"), or with an affiliate of an interested
stockholder. These prohibitions last for five years after the most recent date on which the interested stockholder became an interested stockholder. After the five-year period, a business
combination with an interested stockholder must be approved by two super-majority stockholder votes unless, among other conditions, our common stockholders receive a minimum price for their shares and
the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares of common stock.

Heritage's share ownership limit may discourage a takeover of the company.

In order for Heritage to qualify as a REIT, no more than 50% of the value of outstanding shares of its capital stock may be owned, actually or constructively, by
five or fewer individuals at any time during
the last half of each taxable year. To make sure that Heritage will not fail to qualify as a REIT under this test, subject to some exceptions, Heritage's articles prohibit any stockholder from owning
actually or constructively more than 9.8% of the value or number of outstanding shares of its capital stock. Heritage's board of directors may exempt a person from the 9.8% ownership limit if the
board determines, in its sole discretion that exceeding the 9.8% ownership limit as to any proposed transferee would not jeopardize Heritage's qualification as a REIT. This restriction may discourage
a tender offer or other transactions or a change in management or control that might involve be in the best interests of Heritage's and Bradley OP's securityholders.

Failure of Heritage Property Investment Trust, Inc. to qualify as a REIT would have a material adverse effect on Bradley OP.

Bradley OP, in general, and the holders of its securities, in particular, must rely on Heritage Property Investment Trust, Inc., as the sole stockholder of
its general partner, to manage its affairs and business. Heritage is subject to certain risks that may affect its financial and other conditions, including particularly adverse consequences if it
fails to qualify as a REIT for federal income tax purposes. While Heritage intends to operate in a manner that will allow it to continue to qualify as a REIT, we cannot assure you that it will remain
qualified as such in the future. This is because qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code as to which there are only
limited judicial and administrative interpretations, and involves the determination of facts and circumstances not entirely within our control. In addition, future legislation, new regulations,
administrative interpretations or court decisions may significantly change the tax laws or the application of the tax laws with respect to qualification as a REIT for federal income tax purposes or
the federal income tax consequences of such qualification. If Heritage fails to qualify as a REIT, it will face serious tax consequences which will directly and adversely impact us and may
substantially reduce the funds available for payment of distributions to Bradley OP's securityholders, and it will be barred from qualifying as a REIT for the four years following such failure.

We face possible adverse changes in tax laws.

From time to time changes in state and local tax laws or regulations are enacted, which may result in an increase in our tax liability. The shortfall in tax
revenues for states and municipalities in recent years may lead to an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our
assets or income and may be assessed interest and penalties

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on
such additional taxes. These increased tax costs could adversely affect our financial condition and results of operations and our ability to make distributions to our securityholders.

Item 2: Properties

Shopping Centers

As of December 31, 2004, we had a shopping center portfolio consisting of 164 shopping centers, located in 29 states and totaling approximately
33.7 million square feet of total GLA, of which approximately 28.0 million square feet is company-owned GLA. As of December 31, 2004, Bradley OP and its subsidiaries owned 106
shopping centers, located in 21 states and totaling approximately 17.6 million square feet of Company-owned GLA. Our shopping center portfolio was approximately 93.3% leased as of
December 31, 2004. We believe that our shopping center properties are adequately covered by insurance.

Other Properties

As of December 31, 2004, the Company owned three office buildings, one in New York and two in Boston, totaling 222,000 square feet. We believe that our
office buildings are adequately covered by insurance.

Offices

Our corporate headquarters are located at 131 Dartmouth Street, Boston, Massachusetts, a new office building located in the Back Bay constructed and owned by a
joint venture that we entered into with our largest stockholder. We lease our new corporate headquarters space from the joint venture. Under this lease, which contains a term of eleven years, we lease
approximately 31,000 square feet. We began to pay rent under this lease in February 2005. We pay $1.1 million per year in minimum rent through 2009 and $1.2 million per year from
2010 through 2014.

In
addition, we also manage our properties through 16 regional offices, strategically located throughout our portfolio states. We own 15 of our 16 regional offices, some of which are
located in our shopping center properties. We believe that our current and anticipated facilities are adequate for our present and future operations.

The
following table provides information about our properties as of December 31, 2004, which includes information with respect to Bradley OP and its subsidiaries.

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|Property Name and Location |  | Year Built/
Renovated(1) |  | % Leased as
of 12/31/2004 |   | Company-Owned
GLA(2) |  | Total
GLA(3) |  | Anchor
SF(4) |  | Anchors(5)                                                                                                              |  | Annualized
Base Rent(6) |           | Annualized Base
Rent/Sq. Ft.(7)
|-------------------------- |  | ------------------------ |  | ------------------------- | - | -------------------- |  | ------------ |  | ------------ |  | ----------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | --------- | -------------------------------
|Shopping Centers:          |  |                          |  |                           |   |                      |  |              |  |              |  |                                                                                                                         |  |                         |           |                                
|Alabama                    |  |                          |  |                           |   |                      |  |              |  |              |  |                                                                                                                         |  |                         |           |                                
|*Montgomery Commons        |  | 1999                     |  | 100                       | % | 95,300               |  | 299,050      |  | 257,550      |  | Super Wal-Mart
(Non-Owned)
Marshalls
Michaels                                                                           |  | $                       | 1,052,298 |                                
|Montgomery Towne Center    |  | 1996                     |  | 83                        | % | 176,361              |  | 266,895      |  | 198,165      |  | Winn Dixie Supermarket
(Non-Owned)
Bed, Bath & Beyond
Circuit City
Carmike Cinemas (Non-Owned)
Barnes & Noble
OfficeMax |  | $                       | 1,849,970 |                                
|Riverchase Village SC      |  | 1994                     |  | 91                        | % | 178,511              |  | 190,611      |  | 128,225      |  | Bruno's Supermarket
Best Buy
PetsMart                                                                                   |  | $                       | 1,701,138 |                                
|Connecticut                |  |                          |  |                           |   |                      |  |              |  |              |  |                                                                                                                         |  |                         |           |                                
|Torrington Plaza           |  | 1963/1994                |  | 94                        | % | 125,710              |  | 132,910      |  | 42,037       |  | TJ Maxx
Staples                                                                                                         |  | $                       | 1,281,162 |                                
|Florida                    |  |                          |  |                           |   |                      |  |              |  |              |  |                                                                                                                         |  |                         |           |                                
|Barton Commons             |  | 1989                     |  | 40                        | % | 215,049              |  | 218,049      |  | 52,039       |  | Bealls Dept. Store
Bealls Outlet                                                                                        |  | $                       | 419,198   |                                
|Naples Shopping Center     |  | 1962/1997                |  | 100                       | % | 198,843              |  | 202,343      |  | 162,486      |  | Publix Supermarket
Marshalls
Linens 'N Things
Office Depot
Books A Million                                              |  | $                       | 2,036,359 |                                
|Park Shore Shopping Center |  | 1973/1993                |  | 100                       | % | 231,830              |  | 240,330      |  | 188,180      |  | Fresh Market
K-Mart
Rhodes Furniture
Homegoods
Sound Advice                                                             |  | $                       | 1,851,037 |                                

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|Shoppers Haven Shopping Center   |  | 1959/1998 |  | 88  | % | 207,036 |  | 207,036 |  | 113,273 |  | Winn Dixie Supermarket
Bed, Bath & Beyond
Walgreens
Bealls Outlet                  |  | $ | 1,628,345 |  | $ | 7.87 
|-------------------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | ---------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|Venetian Isle Shopping Center(8) |  | 1959/1992 |  | 100 | % | 183,467 |  | 186,967 |  | 111,831 |  | Publix Supermarket
TJ Maxx
Linens 'N Things
Rec Warehouse Pools and Spas           |  | $ | 1,506,158 |  | $ | 8.21 
|Georgia                          |  |           |  |     |   |         |  |         |  |         |  |                                                                                    |  |   |           |  |   |      
|*Shenandoah Plaza                |  | 1987      |  | 99  | % | 141,072 |  | 144,072 |  | 113,922 |  | Ingles Market/Goodwill
Emporium
Wal-Mart/Big Lots/ACS                              |  | $ | 695,830   |  | $ | 4.93 
|Illinois                         |  |           |  |     |   |         |  |         |  |         |  |                                                                                    |  |   |           |  |   |      
|*Bartonville Square              |  | 1972      |  | 100 | % | 61,678  |  | 61,678  |  | 41,824  |  | Kroger Supermarket                                                                 |  | $ | 296,634   |  | $ | 4.81 
|*Butterfield Square              |  | 1997      |  | 96  | % | 106,767 |  | 121,370 |  | 51,677  |  | Sunset Foods                                                                       |  | $ | 1,383,211 |  | $ | 12.96
|*The Commons of Chicago Ridge    |  | 1992/1999 |  | 95  | % | 324,080 |  | 324,080 |  | 246,039 |  | Home Depot
Office Depot
Marshalls
Pep Boys (Ground Lease)
Old Navy
X Sport Fitness |  | $ | 3,808,950 |  | $ | 11.75
|*The Commons of Crystal Lake     |  | 1995/1998 |  | 97  | % | 273,060 |  | 365,335 |  | 210,569 |  | Jewel Foods/Osco Drugs
Marshalls
Toys R Us
Hobby Lobby
(Non-Owned)                 |  | $ | 3,134,906 |  | $ | 11.48
|*Crossroads Centre               |  | 1975/1988 |  | 98  | % | 242,470 |  | 247,970 |  | 129,468 |  | KM Fairview Heights
LLC/Hobby Lobby
(Ground Lease)
TJ Maxx                         |  | $ | 1,535,073 |  | $ | 6.33 

21

---



|*Fairhills Shopping Center |  | 1971/1989 |  | 93  | % | 107,584 |  | 117,684 |  | 49,330  |  | Jewel Foods/Osco Drugs                                                                                                                                                                        |  | $ | 607,218   |  | $ | 5.64 
|-------------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|*Heritage Square           |  | 1992      |  | 98  | % | 210,852 |  | 210,852 |  | 164,706 |  | Circuit City
Carson Furniture
Gallery
DSW Shoe Warehouse
Rhodes Furniture                                                                                                                     |  | $ | 2,560,567 |  | $ | 12.14
|*High Point Centre         |  | 1988      |  | 98  | % | 240,002 |  | 240,002 |  | 141,068 |  | Cub Foods
Office Depot
Babies R Us
Big Lots                                                                                                                                                   |  | $ | 2,376,863 |  | $ | 9.90 
|*Long Meadow Commons       |  | 1996      |  | 91  | % | 118,471 |  | 118,471 |  | 65,816  |  | Dominick's Supermarket                                                                                                                                                                        |  | $ | 1,587,556 |  | $ | 13.40
|*Parkway Pointe            |  | 1996      |  | 100 | % | 38,737  |  | 222,037 |  | 179,300 |  | Wal-Mart (Non-Owned)
Target (Non-Owned)
Party Tree (Non-Owned)                                                                                                                                |  | $ | 532,519   |  | $ | 13.75
|*Rivercrest                |  | 1992/1999 |  | 100 | % | 488,680 |  | 847,635 |  | 711,859 |  | Dominick's Supermarket
Best Buy
PetsMart
TJ Maxx
Kimco Realty Corp./K-Mart
Sears
OfficeMax
Hollywood Park
Target (Non-Owned)
Kohl's (Non-Owned)
Menards (Non-Owned)
Sony Theaters (Non-Owned) |  | $ | 4,367,183 |  | $ | 8.94 
|*Rollins Crossing          |  | 1995/1998 |  | 98  | % | 148,117 |  | 342,237 |  | 283,704 |  | Super K-Mart (Non-Owned)
Sears Paint & Hardware
Regal Cinema (Ground Lease)                                                                                                                   |  | $ | 1,105,675 |  | $ | 7.46 

22

---



|*Sangamon Center North      |  | 1970/1996 |  | 98 | % | 139,907 |  | 151,107 |  | 79,257  |  | Schnuck's Supermarket
U.S. Post Office                                                               |  | $ | 1,120,546 |  | $ | 8.01 
|--------------------------- |  | --------- |  | -- | - | ------- |  | ------- |  | ------- |  | ---------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|*Sheridan Village           |  | 1954/1995 |  | 99 | % | 303,915 |  | 303,915 |  | 177,409 |  | Bergner's Dept Store
Cohen's Furniture Co.                                                           |  | $ | 2,384,638 |  | $ | 7.85 
|*Sterling Bazaar            |  | 1992      |  | 95 | % | 84,535  |  | 84,535  |  | 52,337  |  | Kroger Supermarket                                                                                   |  | $ | 744,079   |  | $ | 8.80 
|*Twin Oaks Centre           |  | 1991      |  | 97 | % | 98,197  |  | 98,197  |  | 59,682  |  | Hy-Vee Supermarket                                                                                   |  | $ | 714,870   |  | $ | 7.28 
|*Wardcliffe Shopping Center |  | 1976/1977 |  | 96 | % | 67,681  |  | 67,681  |  | 48,341  |  | CVS
Big Lots                                                                                         |  | $ | 341,549   |  | $ | 5.05 
|*Westview Center            |  | 1992      |  | 80 | % | 325,507 |  | 416,307 |  | 184,265 |  | Cub Foods
Marshalls
Value City Dept. Store (Non-Owned)
Fashion Bug                                   |  | $ | 2,544,810 |  | $ | 7.82 
|Indiana                     |  |           |  |    |   |         |  |         |  |         |  |                                                                                                      |  |   |           |  |   |      
|*Apple Glen Crossing        |  | 2001/2002 |  | 98 | % | 150,446 |  | 440,987 |  | 384,426 |  | Super Wal-Mart (Non-Owned)
Kohl's (Non-Owned)
Dick's Sporting Goods
Best Buy (Ground Lease)
PetsMart |  | $ | 1,798,584 |  | $ | 11.96
|*County Line Mall           |  | 1976/1991 |  | 90 | % | 268,589 |  | 271,389 |  | 213,950 |  | Kroger Supermarket
OfficeMax
Old Time Pottery
Sofa Express                                           |  | $ | 1,793,391 |  | $ | 6.68 
|*Double Tree Plaza          |  | 1996      |  | 97 | % | 98,342  |  | 110,342 |  | 49,773  |  | Amelia's Supermarket                                                                                 |  | $ | 735,935   |  | $ | 7.48 
|*Germantown Shopping Center |  | 1985      |  | 75 | % | 230,417 |  | 237,617 |  | 114,905 |  | Beuhler's Supermarket
Elder Beerman
Department Store
Peebles Department Store                        |  | $ | 1,133,525 |  | $ | 4.92 

23

---



|*King's Plaza                |  | 1965      |  | 87  | % | 102,788 |  | 104,888 |  | 60,200  |  | Cub Foods                                                                                           |  | $ | 414,628   |  | $ | 4.03 
|---------------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | --------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|*Lincoln Plaza               |  | 1968      |  | 94  | % | 101,058 |  | 101,058 |  | 39,104  |  | Kroger Supermarket                                                                                  |  | $ | 681,652   |  | $ | 6.75 
|*Martin's Bittersweet Plaza  |  | 1992      |  | 100 | % | 81,720  |  | 84,730  |  | 61,079  |  | Martin's Supermarket
Osco Drug                                                                      |  | $ | 581,590   |  | $ | 7.12 
|Meridian Village             |  | 1990      |  | 98  | % | 130,774 |  | 130,774 |  | 65,030  |  | O'Malia's Supermarket
Godby Home Furnishings                                                        |  | $ | 1,312,458 |  | $ | 10.04
|*Rivergate Shopping Center   |  | 1982      |  | 96  | % | 133,086 |  | 137,486 |  | 108,086 |  | Super Foods
Wal-Mart                                                                                |  | $ | 520,238   |  | $ | 3.91 
|*Sagamore Park Centre        |  | 1982      |  | 93  | % | 118,436 |  | 118,436 |  | 66,063  |  | Payless Supermarket                                                                                 |  | $ | 973,042   |  | $ | 8.22 
|*Speedway SuperCenter        |  | 1960/1998 |  | 88  | % | 569,879 |  | 569,879 |  | 252,624 |  | Kroger Supermarket
AJ Wright
Kohl's
Sears
Factory Card Outlet
Old Navy
Petco                        |  | $ | 4,650,556 |  | $ | 8.16 
|*The Village                 |  | 1950      |  | 91  | % | 303,906 |  | 306,706 |  | 115,325 |  | US Factory Outlet
AJ Wright
Dollar Tree
Indiana Department of Employment                            |  | $ | 2,044,878 |  | $ | 6.73 
|*Washington Lawndale Commons |  | 1957/1993 |  | 76  | % | 331,912 |  | 331,912 |  | 168,409 |  | Stein Mart
Dunham's Sporting Goods
Gensic's Furniture House
Jo-Ann Fabrics
Books A Million
Big Lots |  | $ | 1,519,469 |  | $ | 4.58 
|Iowa                         |  |           |  |     |   |         |  |         |  |         |  |                                                                                                     |  |   |           |  |   |      
|*Burlington Plaza West       |  | 1989      |  | 100 | % | 88,118  |  | 92,118  |  | 52,468  |  | Hobby Lobby                                                                                         |  | $ | 296,742   |  | $ | 3.37 
|*Davenport Retail Center     |  | 1996      |  | 100 | % | 62,588  |  | 229,588 |  | 214,433 |  | Staples
PetsMart
Super Target (Non-Owned)                                                           |  | $ | 645,531   |  | $ | 10.31

24

---



|*Kimberly West             |  | 1987/1997 |  | 88  | % | 113,713 |  | 116,513 |  | 76,896  |  | Hy-Vee Supermarket                                                 |  | $ | 623,697   |  | $ | 5.48
|-------------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | ------------------------------------------------------------------ |  | - | --------- |  | - | ----
|*Parkwood Plaza            |  | 1992      |  | 40  | % | 126,369 |  | 126,369 |  | N/A     |  | N/A                                                                |  | $ | 361,556   |  | $ | 2.86
|*Southgate Shopping Center |  | 1972/1996 |  | 89  | % | 155,399 |  | 155,399 |  | 102,065 |  | Hy-Vee Supermarket
Big Lots                                        |  | $ | 497,613   |  | $ | 3.20
|*Spring Village            |  | 1980/1991 |  | 98  | % | 90,263  |  | 92,763  |  | 45,763  |  | Eagle Foods                                                        |  | $ | 478,281   |  | $ | 5.30
|*Warren Plaza              |  | 1980/1993 |  | 86  | % | 90,102  |  | 187,135 |  | 148,525 |  | Hy-Vee Supermarket
Target (Non-Owned)                              |  | $ | 607,499   |  | $ | 6.74
|Kansas                     |  |           |  |     |   |         |  |         |  |         |  |                                                                    |  |   |           |  |   |     
|*Mid State Plaza           |  | 1971      |  | 79  | % | 286,601 |  | 293,101 |  | 157,017 |  | Ashley Furniture Home Store
Sutherlands Lumber
Hobby Lobby         |  | $ | 663,072   |  | $ | 2.31
|*Santa Fe Square           |  | 1987      |  | 100 | % | 133,698 |  | 133,698 |  | 55,820  |  | Hy-Vee Supermarket/Office Depot/Bloom Brothers                     |  | $ | 1,294,718 |  | $ | 9.68
|*Shawnee Parkway Plaza     |  | 1979/1995 |  | 94  | % | 92,213  |  | 92,213  |  | 59,128  |  | Price Chopper Supermarket                                          |  | $ | 645,431   |  | $ | 7.00
|Village Plaza              |  | 1975      |  | 88  | % | 55,698  |  | 55,698  |  | 31,431  |  | Falley's Food 4 Less                                               |  | $ | 251,522   |  | $ | 4.52
|*Westchester Square        |  | 1968/1998 |  | 94  | % | 164,944 |  | 168,644 |  | 63,000  |  | Hy-Vee Supermarket                                                 |  | $ | 1,338,533 |  | $ | 8.12
|*West Loop Shopping Center |  | 1986/1998 |  | 99  | % | 199,032 |  | 199,032 |  | 98,558  |  | Dillons Supermarket
Waters True Value
American Academy
Hair Design |  | $ | 1,314,101 |  | $ | 6.60
|Kentucky                   |  |           |  |     |   |         |  |         |  |         |  |                                                                    |  |   |           |  |   |     
|*Dixie Plaza               |  | 1987      |  | 100 | % | 48,021  |  | 82,804  |  | 59,383  |  | Buehler Fresh Market
Frank's Nursery (Non-Owned)                   |  | $ | 387,401   |  | $ | 8.07

25

---



|*Midtown Mall             |  | 1970/1994 |  | 100 | % | 153,822 |  | 153,822 |  | 106,271 |  | Kroger Supermarket
Big Lots/Odd Lots
Gatti's Pizza                                                          |  | $ | 1,003,543 |  | $ | 6.52 
|------------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | ----------------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|*Plainview Village Center |  | 1977      |  | 92  | % | 164,454 |  | 186,254 |  | 39,399  |  | Kroger Supermarket                                                                                          |  | $ | 1,307,309 |  | $ | 7.95 
|*Stony Brook              |  | 1988      |  | 100 | % | 137,013 |  | 238,213 |  | 169,775 |  | Kroger Supermarket
H.H. Gregg (Non-Owned)                                                                   |  | $ | 1,627,306 |  | $ | 11.88
|Maine                     |  |           |  |     |   |         |  |         |  |         |  |                                                                                                             |  |   |           |  |   |      
|Pine Tree Shopping Center |  | 1958/1973 |  | 99  | % | 254,378 |  | 254,378 |  | 202,178 |  | AJ Wright
Mardens
Jo-Ann Fabrics
Packard Development                                                        |  | $ | 1,711,014 |  | $ | 6.73 
|Massachusetts             |  |           |  |     |   |         |  |         |  |         |  |                                                                                                             |  |   |           |  |   |      
|*Berkshire Crossing       |  | 1996      |  | 100 | % | 446,287 |  | 446,287 |  | 389,561 |  | Price Chopper
Supermarket Wal-Mart (Ground Lease)
Home Depot (Ground Lease)
Staples
Michaels
Barnes & Noble |  | $ | 3,480,324 |  | $ | 7.80 
|*Burlington Square        |  | 1983/1992 |  | 83  | % | 86,290  |  | 86,290  |  | 34,097  |  | Staples
Eastern Mountain Sports                                                                             |  | $ | 2,423,543 |  | $ | 28.09
|Lynn Market Place         |  | 1966/1993 |  | 100 | % | 78,092  |  | 78,092  |  | 52,620  |  | Shaw's Supermarket                                                                                          |  | $ | 631,788   |  | $ | 8.09 
|Watertower Plaza          |  | 1988/1998 |  | 96  | % | 296,320 |  | 296,320 |  | 214,889 |  | Shaw's Supermarket
TJ Maxx
OfficeMax
Barnes & Noble
Linens 'N Things
Petco
Michaels
NAMCO                   |  | $ | 3,659,743 |  | $ | 12.35
|Westgate Plaza            |  | 1969/1996 |  | 100 | % | 103,903 |  | 103,903 |  | 77,768  |  | Stop & Shop/Staples/Ocean State Job Lot
TJ Maxx                                                             |  | $ | 1,021,333 |  | $ | 9.83 

26

---



|Michigan                 |  |           |  |     |   |         |  |         |  |         |  |                                                                                                            |  |   |           |  |   |     
|------------------------ |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | ---------------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | ----
|*Cherry Hill Marketplace |  | 1992/1999 |  | 80  | % | 122,132 |  | 125,032 |  | 53,739  |  | Farmer Jacks                                                                                               |  | $ | 1,116,444 |  | $ | 9.14
|*The Courtyard           |  | 1989      |  | 96  | % | 125,967 |  | 265,622 |  | 219,421 |  | V.G. Food Center
OfficeMax
Dunham's Sporting Goods
Home Depot (Non-Owned)                                  |  | $ | 997,250   |  | $ | 7.92
|*Grand Traverse Crossing |  | 1996      |  | 100 | % | 387,273 |  | 387,273 |  | 339,156 |  | Wal-Mart (Ground Lease)
Home Depot (Ground Lease)
Borders (Ground Lease)
Toys R Us
Staples
PetsMart        |  | $ | 2,696,188 |  | $ | 6.96
|*Redford Plaza           |  | 1956/1987 |  | 100 | % | 284,448 |  | 284,448 |  | 194,014 |  | Kroger Supermarket
Burlington Coat Factory
Bally Total Fitness
AJ Wright
Aco Hardware
The Resource Network |  | $ | 2,453,569 |  | $ | 8.63
|Minnesota                |  |           |  |     |   |         |  |         |  |         |  |                                                                                                            |  |   |           |  |   |     
|*Austin Town Center      |  | 1999      |  | 45  | % | 110,680 |  | 200,680 |  | 170,789 |  | Staples Target (Non-Owned)                                                                                 |  | $ | 505,251   |  | $ | 4.56
|*Brookdale Square        |  | 1971/1994 |  | 41  | % | 185,883 |  | 185,883 |  | 66,834  |  | Brookdale Theater
Pep Boys
Up Front Event Center                                                           |  | $ | 403,352   |  | $ | 2.17
|*Burning Tree Plaza      |  | 1987/1998 |  | 99  | % | 182,969 |  | 182,969 |  | 117,716 |  | Best Buy
TJ Maxx
Hancock Fabrics
Dunham's Sporting Goods                                                   |  | $ | 1,695,030 |  | $ | 9.26

27

---



|*Central Valu Center     |  | 1961/1984 |  | 95  | % | 123,350 |  | 123,350 |  | 90,946  |  | Rainbow Foods
Slumberland Clearance                                                           |  | $ | 845,041   |  | $ | 6.85 
|------------------------ |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | --------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|Division Place           |  | 1991      |  | 91  | % | 129,753 |  | 134,753 |  | 24,016  |  | TJ Maxx                                                                                       |  | $ | 1,416,693 |  | $ | 10.92
|*Elk Park Center         |  | 1995/1999 |  | 98  | % | 204,992 |  | 302,635 |  | 192,843 |  | Cub Foods
Target (Non-Owned)
OfficeMax                                                        |  | $ | 1,974,173 |  | $ | 9.63 
|*Har Mar Mall            |  | 1965/1992 |  | 98  | % | 433,232 |  | 433,232 |  | 226,838 |  | Cub Foods
Barnes & Noble
Marshalls
Homegoods
TJ Maxx
AMC Theatres
Michaels                    |  | $ | 4,740,927 |  | $ | 10.94
|*Hub West(9)             |  |           |  |     |   |         |  |         |  |         |  |                                                                                               |  |   |           |  |   |      
|*Richfield Hub           |  | 1952/1992 |  | 99  | % | 214,855 |  | 217,655 |  | 129,400 |  | Rainbow Foods
Bally Total Fitness
Marshalls
Michaels                                          |  | $ | 2,457,011 |  | $ | 11.44
|*Marketplace at 42       |  | 1999      |  | 96  | % | 120,487 |  | 150,687 |  | 72,371  |  | Rainbow Foods
Walgreens (Non-Owned)                                                           |  | $ | 1,709,278 |  | $ | 14.19
|*Roseville Center        |  | 1950/2000 |  | 99  | % | 76,616  |  | 155,416 |  | 65,000  |  | Rainbow Foods (Non-Owned)                                                                     |  | $ | 839,704   |  | $ | 10.96
|*Southport Centre        |  | 1992      |  | 100 | % | 124,937 |  | 426,985 |  | 346,566 |  | Cub Foods (Non-Owned)
Best Buy
Frank's Nursery
Super Target (Non-Owned)
OfficeMax (Non-Owned) |  | $ | 1,856,247 |  | $ | 14.86
|*Sun Ray Shopping Center |  | 1958/1992 |  | 99  | % | 285,911 |  | 285,911 |  | 179,527 |  | Cub Foods (Ground Lease)
TJ Maxx
Bally Total Fitness
Michaels
Valu Thrift Store               |  | $ | 2,313,153 |  | $ | 8.09 
|*Ten Acres Center        |  | 1972/1986 |  | 100 | % | 162,364 |  | 162,364 |  | 133,894 |  | Cub Foods
Burlington Coat Factory                                                             |  | $ | 1,190,306 |  | $ | 7.33 

28

---



|*Terrace Mall                |  | 1979/1993 |  | 90  | % | 135,031 |  | 250,031 |  | 212,430 |  | Rainbow Foods
North Memorial Hospital (Non-Owned)
North Memorial Medical Center             |  | $ | 1,004,440 |  | $ | 7.44 
|---------------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | ------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|*Westwind Plaza              |  | 1985      |  | 100 | % | 87,933  |  | 147,933 |  | 80,245  |  | Cub Foods (Non-Owned)
Northern Tool and Equipment                                           |  | $ | 1,130,321 |  | $ | 12.85
|*White Bear Hills            |  | 1990/1996 |  | 100 | % | 73,095  |  | 81,895  |  | 45,679  |  | Festival Foods                                                                              |  | $ | 637,035   |  | $ | 8.72 
|Mississippi                  |  |           |  |     |   |         |  |         |  |         |  |                                                                                             |  |   |           |  |   |      
|County Line Plaza            |  | 1997      |  | 100 | % | 221,567 |  | 268,367 |  | 171,062 |  | Haverty's Furniture
OfficeMax
Barnes & Noble
Old Navy Shoe Station
Circuit City (Non-Owned) |  | $ | 2,828,236 |  | $ | 12.76
|Missouri                     |  |           |  |     |   |         |  |         |  |         |  |                                                                                             |  |   |           |  |   |      
|Clocktower Place             |  | 1987      |  | 97  | % | 214,198 |  | 222,348 |  | 129,807 |  | Dierberg's Market
TJ Maxx
Office Depot                                                      |  | $ | 2,264,238 |  | $ | 10.57
|*Ellisville Square           |  | 1990      |  | 100 | % | 146,052 |  | 149,552 |  | 107,772 |  | K-Mart
Lukas Liquors                                                                        |  | $ | 1,447,276 |  | $ | 9.91 
|*Grandview Plaza             |  | 1961/1991 |  | 91  | % | 296,008 |  | 296,008 |  | 200,075 |  | Schnuck's Supermarket
Old Time Pottery
OfficeMax
Walgreens                                  |  | $ | 1,927,421 |  | $ | 6.51 
|*Hub Shopping Center         |  | 1972/1995 |  | 94  | % | 163,072 |  | 163,072 |  | 103,322 |  | Price Chopper Supermarket                                                                   |  | $ | 856,108   |  | $ | 5.25 
|*Liberty Corners             |  | 1987/1996 |  | 100 | % | 125,432 |  | 214,932 |  | 136,500 |  | Price Chopper Supermarket
Sutherlands (Non-Owned)                                           |  | $ | 982,798   |  | $ | 7.84 
|*Maplewood Square            |  | 1998      |  | 100 | % | 71,590  |  | 75,590  |  | 57,575  |  | Shop n' Save Supermarket                                                                    |  | $ | 534,552   |  | $ | 7.47 
|*Marketplace at Independence |  | 1988      |  | 94  | % | 241,898 |  | 253,398 |  | 133,942 |  | Price Chopper Supermarket
Old Navy                                                          |  | $ | 2,133,422 |  | $ | 8.82 
|*Prospect Plaza              |  | 1979/1999 |  | 100 | % | 189,996 |  | 189,996 |  | 136,566 |  | Price Chopper Supermarket
Hobby Lobby
The Salvation Army Family Store                       |  | $ | 1,472,981 |  | $ | 7.75 

29

---



|*Watts Mill Plaza         |  | 1973/1997 |  | 100 | % | 161,717 |  | 169,717 |  | 91,989  |  | Price Chopper Supermarket
Westlake Hardware         |  | $ | 1,485,720 |  | $ | 9.19
|------------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | --------------------------------------------------- |  | - | --------- |  | - | ----
|Nebraska                  |  |           |  |     |   |         |  |         |  |         |  |                                                     |  |   |           |  |   |     
|*Bishop Heights           |  | 1971/1997 |  | 100 | % | 34,388  |  | 128,448 |  | 106,992 |  | Russ' IGA Supermarket
Shopko (Non-Owned)            |  | $ | 183,375   |  | $ | 5.33
|*Cornhusker Plaza         |  | 1988      |  | 96  | % | 84,083  |  | 163,063 |  | 121,723 |  | Hy-Vee Supermarket
Wal-Mart (Non-Owned)             |  | $ | 468,713   |  | $ | 5.57
|*Eastville Plaza          |  | 1986      |  | 100 | % | 68,546  |  | 139,636 |  | 99,046  |  | Hy-Vee Supermarket
Menard's (Non-Owned)             |  | $ | 572,908   |  | $ | 8.36
|*Edgewood Shopping Center |  | 1980/1994 |  | 98  | % | 179,964 |  | 406,514 |  | 210,020 |  | SuperSaver Supermarket
Osco Drug
Target (Non-Owned) |  | $ | 1,562,369 |  | $ | 8.68
|*The Meadows              |  | 1998      |  | 100 | % | 67,840  |  | 70,840  |  | 50,000  |  | Russ' IGA Supermarket                               |  | $ | 523,453   |  | $ | 7.72
|*Miracle Hills Park       |  | 1988      |  | 90  | % | 69,638  |  | 139,638 |  | 66,000  |  | Cub Foods (Non-Owned)                               |  | $ | 575,349   |  | $ | 8.26
|*Stockyards Plaza         |  | 1988      |  | 100 | % | 129,459 |  | 148,659 |  | 85,649  |  | Hy-Vee Supermarket
Movies 8                         |  | $ | 1,049,627 |  | $ | 8.11
|New Hampshire             |  |           |  |     |   |         |  |         |  |         |  |                                                     |  |   |           |  |   |     
|*Bedford Grove            |  | 1989      |  | 100 | % | 216,941 |  | 216,941 |  | 182,745 |  | Shop N' Save
Wal-Mart (Ground Lease)                |  | $ | 1,750,701 |  | $ | 8.07

30

---



|Bedford Mall                 |  | 1963/1999 |  | 91  | % | 265,091 |  | 265,091 |  | 192,207 |  | Marshalls
Bob's Stores
Staples
Linens 'N Things
Decathalon Sports (Ground Lease)
Hoyts Cinemas |  | $ | 2,593,050 |  | $ | 9.78 
|---------------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | ---------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|Capitol Shopping Center      |  | 1961/1999 |  | 100 | % | 182,821 |  | 189,821 |  | 129,551 |  | Demoulas Market Basket
Burlington Coat Factory
Marshalls                                       |  | $ | 1,655,473 |  | $ | 9.06 
|Tri City Plaza               |  | 1968/1992 |  | 100 | % | 146,947 |  | 146,947 |  | 84,920  |  | Demoulas Market Basket
TJ Maxx                                                                 |  | $ | 1,051,846 |  | $ | 7.16 
|New Jersey                   |  |           |  |     |   |         |  |         |  |         |  |                                                                                                |  |   |           |  |   |      
|*Cross Keys Common           |  | 1995      |  | 92  | % | 216,805 |  | 417,791 |  | 280,348 |  | Wal-Mart (Non-Owned)
AJ Wright
Staples
Ross Dress for Less                                     |  | $ | 2,472,595 |  | $ | 11.40
|Morris Hills Shopping Center |  | 1957/1994 |  | 100 | % | 159,454 |  | 159,454 |  | 109,161 |  | Mega Marshalls
Clearview Cinema (Ground Lease)
Michaels                                        |  | $ | 2,404,551 |  | $ | 15.08
|New Mexico                   |  |           |  |     |   |         |  |         |  |         |  |                                                                                                |  |   |           |  |   |      
|*St. Francis Plaza           |  | 1992/1993 |  | 100 | % | 35,800  |  | 35,800  |  | 20,850  |  | Wild Oats Market                                                                               |  | $ | 401,670   |  | $ | 11.22
|New York                     |  |           |  |     |   |         |  |         |  |         |  |                                                                                                |  |   |           |  |   |      
|College Plaza                |  | 1975/1994 |  | 100 | % | 175,086 |  | 175,086 |  | 126,812 |  | Bob's Stores
Marshalls
Eckerd Drugs
Staples                                                    |  | $ | 1,407,455 |  | $ | 8.04 
|Dalewood I Shopping Center   |  | 1966/1995 |  | 100 | % | 59,569  |  | 59,569  |  | 36,989  |  | Pathmark                                                                                       |  | $ | 904,250   |  | $ | 15.18
|Dalewood II Shopping Center  |  | 1970/1995 |  | 100 | % | 81,326  |  | 81,326  |  | 59,326  |  | Turco's Supermarket
Bed, Bath & Beyond                                                         |  | $ | 1,943,596 |  | $ | 23.90
|Dalewood III Shopping Center |  | 1972/1995 |  | 100 | % | 48,390  |  | 48,390  |  | 28,361  |  | TJ Maxx                                                                                        |  | $ | 1,208,936 |  | $ | 24.98
|Falcaro's Plaza              |  | 1968/1993 |  | 100 | % | 61,295  |  | 63,295  |  | 29,887  |  | OfficeMax                                                                                      |  | $ | 996,312   |  | $ | 16.25

31

---



|Kings Park Shopping Center       |  | 1963/1985 |  | 100 | % | 71,940  |  | 73,940  |  | 48,870  |  | Key Foods
TJ Maxx                                                                                                                 |  | $ | 1,040,934 |  | $ | 14.47
|-------------------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|Nesconset Shopping Center        |  | 1961/1999 |  | 99  | % | 122,996 |  | 124,996 |  | 33,460  |  | Office Depot/HomeGoods                                                                                                            |  | $ | 1,707,061 |  | $ | 13.88
|Parkway Plaza                    |  | 1973/1992 |  | 100 | % | 89,704  |  | 89,704  |  | 31,600  |  | TJ Maxx                                                                                                                           |  | $ | 1,964,535 |  | $ | 21.90
|Roanoke Plaza                    |  | 1972/1994 |  | 100 | % | 99,131  |  | 101,631 |  | 58,150  |  | Best Yet Market
TJ Maxx                                                                                                           |  | $ | 1,541,383 |  | $ | 15.55
|Rockville Centre Shopping Center |  | 1975      |  | 100 | % | 44,131  |  | 44,131  |  | 27,781  |  | HomeGoods                                                                                                                         |  | $ | 593,756   |  | $ | 13.45
|*Salmon Run Plaza                |  | 1993      |  | 100 | % | 68,761  |  | 181,195 |  | 164,614 |  | Hannaford's Supermarket
K-Mart (Non-Owned)                                                                                        |  | $ | 1,097,978 |  | $ | 15.97
|Suffolk Plaza                    |  | 1967/1998 |  | 100 | % | 84,480  |  | 89,680  |  | 56,759  |  | Waldbaum's Supermarket                                                                                                            |  | $ | 814,363   |  | $ | 9.64 
|Three Village Plaza              |  | 1964/1991 |  | 89  | % | 77,458  |  | 77,458  |  | 38,955  |  | King Kullen Grocery                                                                                                               |  | $ | 668,181   |  | $ | 8.63 
|Turnpike Plaza                   |  | 1971/1994 |  | 100 | % | 52,950  |  | 52,950  |  | 30,700  |  | Waldbaum's Supermarket                                                                                                            |  | $ | 962,869   |  | $ | 18.18
|North Carolina                   |  |           |  |     |   |         |  |         |  |         |  |                                                                                                                                   |  |   |           |  |   |      
|The Commons at Chancellor Park   |  | 1994      |  | 100 | % | 341,860 |  | 351,460 |  | 309,041 |  | Home Depot (Ground Lease)
Hobby Lobby
Circuit City
Marshalls
Value City
Gold's Gym                                                |  | $ | 2,370,587 |  | $ | 6.93 
|Crown Point Shopping Center      |  | 1990      |  | 100 | % | 147,200 |  | 164,200 |  | 135,200 |  | Lowe's Home Centers
Babies R US                                                                                                   |  | $ | 1,018,600 |  | $ | 6.92 
|Franklin Square                  |  | 1990      |  | 98  | % | 318,435 |  | 517,735 |  | 379,568 |  | Super Wal-Mart (Non-Owned)
Best Buy
Ross Dress for Less
Bed, Bath & Beyond
Dollar Tree
Pep Boys (Ground Lease)
OfficeMax
Michaels |  | $ | 3,077,016 |  | $ | 9.66 

32

---



|Innes Street Market                |  | 1998 |  | 100 | % | 349,356 |  | 349,356 |  | 296,740 |  | Food Lion Supermarket
Lowe's Home Centers
Tinseltown Cinema
Marshalls
Staples
Circuit City
Old Navy |  | $ | 3,364,280 |  | $ | 9.63 
|---------------------------------- |  | ---- |  | --- | - | ------- |  | ------- |  | ------- |  | --------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|McMullen Creek Shopping Center(10) |  | 1988 |  | 94  | % | 283,647 |  | 293,247 |  | 98,222  |  | Winn Dixie Supermarket
Burlington Coat Factory                                                      |  | $ | 2,767,907 |  | $ | 9.76 
|New Centre Market                  |  | 1998 |  | 99  | % | 143,763 |  | 266,263 |  | 202,040 |  | Target (Non-Owned)
Marshalls
PetsMart
OfficeMax                                                     |  | $ | 1,677,624 |  | $ | 11.67
|Tarrymore Square                   |  | 1989 |  | 76  | % | 260,405 |  | 260,405 |  | 85,447  |  | Marshalls
Carolina Clearing House                                                                   |  | $ | 1,646,508 |  | $ | 6.32 
|University Commons                 |  | 1989 |  | 99  | % | 235,396 |  | 235,396 |  | 135,326 |  | Lowes Foods
TJ Maxx
Homegoods
AC Moore                                                              |  | $ | 2,306,966 |  | $ | 9.80 
|University Commons Greenville      |  | 1996 |  | 100 | % | 232,820 |  | 338,020 |  | 270,249 |  | Kroger Supermarket
TJ Maxx
Circuit City
Barnes & Noble
Target (Non-Owned)
Linens 'N Things          |  | $ | 2,640,890 |  | $ | 11.34

33

---



|Wendover Place         |  | 1997      |  | 98  | % | 415,775 |  | 547,075 |  | 441,954 |  | Harris-Teeter/Michaels/Ross Dress for Less
Kohl's
Dick's Sporting Goods
Babies R Us
PetsMart
Old Navy
Linens 'N Things
Target (Non-Owned)     |  | $ | 4,279,742 |  | $ | 10.29
|---------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | --------------------------------------------------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|Ohio                   |  |           |  |     |   |         |  |         |  |         |  |                                                                                                                                               |  |   |           |  |   |      
|*30th Street Plaza     |  | 1951/1999 |  | 96  | % | 157,055 |  | 157,055 |  | 111,251 |  | Giant Eagle Supermarket
Marc's Pharmacy                                                                                                       |  | $ | 1,459,102 |  | $ | 9.29 
|*Clock Tower Plaza     |  | 1989      |  | 100 | % | 237,975 |  | 244,475 |  | 172,300 |  | Ray's Supermarket
Wal-Mart                                                                                                                    |  | $ | 1,472,688 |  | $ | 6.19 
|*Salem Consumer Square |  | 1988      |  | 93  | % | 274,652 |  | 274,652 |  | 131,650 |  | Cub Foods
Office Depot
Michigan Sporting Goods
AJ Wright                                                                                      |  | $ | 2,276,743 |  | $ | 8.29 
|Pennsylvania           |  |           |  |     |   |         |  |         |  |         |  |                                                                                                                                               |  |   |           |  |   |      
|Boyertown Plaza        |  | 1961      |  | 30  | % | 83,229  |  | 88,629  |  | N/A     |  | N/A                                                                                                                                           |  | $ | 377,977   |  | $ | 4.54 
|Colonial Commons       |  | 1991/2003 |  | 94  | % | 433,362 |  | 451,462 |  | 317,335 |  | Giant Foods (Ground Lease)
Dick's Sporting Goods
Linens 'N Things
AMC Theatres 9
Ross Dress for Less
Marshalls
Ben Franklin
TJ Maxx
OfficeMax |  | $ | 4,844,274 |  | $ | 11.18
|Lehigh Shopping Center |  | 1955/1999 |  | 76  | % | 372,243 |  | 376,243 |  | 211,215 |  | Giant Foods (Ground Lease)
Mega Marshalls
Staples
D&D Budget & Clearance
Frank's Nursery                                                      |  | $ | 1,926,780 |  | $ | 5.18 

34

---



|*Warminster Towne Center    |  | 1997      |  | 100 | % | 237,345 |  | 318,028 |  | 260,066 |  | Shop Rite Supermarket
Kohl's (Non-Owned)
Ross Dress for Less
PetsMart
OfficeMax
Pep Boys
Rag Shop
Old Navy |  | $ | 3,105,613 |  | $ | 13.08
|--------------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | ---------------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|South Dakota                |  |           |  |     |   |         |  |         |  |         |  |                                                                                                            |  |   |           |  |   |      
|*Baken Park                 |  | 1962/1997 |  | 90  | % | 195,526 |  | 195,526 |  | 95,039  |  | Nash Finch Supermarket
Ben Franklin
Boyd's Drug                                                            |  | $ | 1,316,205 |  | $ | 6.73 
|Tennessee                   |  |           |  |     |   |         |  |         |  |         |  |                                                                                                            |  |   |           |  |   |      
|*The Market of Wolf Creek   |  | 2000      |  | 87  | % | 297,099 |  | 470,437 |  | 296,490 |  | Target (Non-Owned)
Haverty's Furniture (Non-Owned)
The Sports Authority
Best Buy
Office Depot              |  | $ | 3,268,913 |  | $ | 11.00
|Oakwood Commons(11)         |  | 1989/1997 |  | 88  | % | 278,017 |  | 280,767 |  | 159,072 |  | Publix Supermarket
Bed, Bath & Beyond
Ross Dress for Less
Peebles Department Store                         |  | $ | 1,799,794 |  | $ | 6.47 
|Watson Glen Shopping Center |  | 1989      |  | 99  | % | 264,360 |  | 264,360 |  | 206,427 |  | Bi-Lo Foods
K-Mart
Goody's Family Clothing
World Gym                                                       |  | $ | 1,930,664 |  | $ | 7.30 
|*Williamson Square(12)      |  | 1988/1993 |  | 97  | % | 330,226 |  | 340,476 |  | 202,102 |  | Kroger Supermarket
Hobby Lobby
USA Baby
Hancock Fabrics
New River Fellowship                               |  | $ | 2,436,176 |  | $ | 7.38 
|Texas                       |  |           |  |     |   |         |  |         |  |         |  |                                                                                                            |  |   |           |  |   |      
|Buckingham Place            |  | 1980/1997 |  | 93  | % | 150,228 |  | 156,228 |  | 96,274  |  | Minyard Food Stores
Big Lots                                                                               |  | $ | 1,043,994 |  | $ | 6.95 

35

---



|The Crossing               |  | 2000/2001 |  | 93  | % | 187,075 |  | 253,454 |  | 150,963 |  | Kroger Signature (Non-Owned)
Kohl's (Ground Lease)                                                |  | $ | 2,032,411 |  | $ | 10.86
|-------------------------- |  | --------- |  | --- | - | ------- |  | ------- |  | ------- |  | ------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | -----
|Las Colinas Village        |  | 2001/2002 |  | 86  | % | 104,682 |  | 131,682 |  | 24,025  |  | Staples                                                                                           |  | $ | 1,877,065 |  | $ | 17.93
|Randall's Bay Area         |  | 1989/2001 |  | 100 | % | 78,650  |  | 78,650  |  | 55,200  |  | Randall's Food Market                                                                             |  | $ | 678,958   |  | $ | 8.63 
|Randall's Fairmont         |  | 1985/2003 |  | 89  | % | 104,669 |  | 110,869 |  | 55,008  |  | Randall's Food Market                                                                             |  | $ | 943,957   |  | $ | 9.02 
|Royal Oaks Village         |  | 2001/2002 |  | 98  | % | 145,286 |  | 145,286 |  | 83,652  |  | HEB Grocery                                                                                       |  | $ | 2,896,065 |  | $ | 19.93
|Trinity Commons(13)        |  | 1998      |  | 92  | % | 197,423 |  | 197,423 |  | 84,228  |  | Tom Thumb
DSW Shoe Warehouse                                                                      |  | $ | 2,878,589 |  | $ | 14.58
|Vermont                    |  |           |  |     |   |         |  |         |  |         |  |                                                                                                   |  |   |           |  |   |      
|Rutland Plaza              |  | 1966/1996 |  | 99  | % | 224,514 |  | 224,514 |  | 182,264 |  | Price Chopper Supermarket
Wal-Mart
TJ Maxx
Plaza Movie Plex                                       |  | $ | 1,849,426 |  | $ | 8.24 
|Virginia                   |  |           |  |     |   |         |  |         |  |         |  |                                                                                                   |  |   |           |  |   |      
|Spradlin Farm              |  | 2000/2001 |  | 100 | % | 181,055 |  | 442,055 |  | 366,962 |  | Home Depot (Non-Owned)
Target (Non-Owned)
TJ Maxx
Barnes & Noble
Michaels
Goody's Family Clothing |  | $ | 2,353,316 |  | $ | 13.00
|Wisconsin                  |  |           |  |     |   |         |  |         |  |         |  |                                                                                                   |  |   |           |  |   |      
|*Fairacres Shopping Center |  | 1992      |  | 99  | % | 79,736  |  | 82,486  |  | 58,678  |  | Pick 'N Save Supermarket                                                                          |  | $ | 678,848   |  | $ | 8.51 
|*Fitchburg Ridge           |  | 1980      |  | 94  | % | 50,555  |  | 61,805  |  | 16,631  |  | Wisconsin Dialysis                                                                                |  | $ | 373,798   |  | $ | 7.39 

36

---



|*Fox River Plaza             |  | 1987      |  | 100 | % | 169,883    |  | 173,383    |  | 137,113    |  | Pick 'N Save Supermarket
K-Mart             |  | $ | 828,675     |  | $ | 4.88 
|---------------------------- |  | --------- |  | --- | - | ---------- |  | ---------- |  | ---------- |  | ------------------------------------------- |  | - | ----------- |  | - | -----
|*Madison Plaza               |  | 1988/1994 |  | 76  | % | 54,275     |  | 127,584    |  | N/A        |  | N/A                                         |  | $ | 381,150     |  | $ | 7.02 
|*Mequon Pavilions            |  | 1967/1991 |  | 96  | % | 211,957    |  | 211,957    |  | 65,995     |  | Sendik's Food Market
Bed, Bath & Beyond     |  | $ | 2,896,503   |  | $ | 13.67
|*Moorland Square             |  | 1990      |  | 100 | % | 98,288     |  | 195,388    |  | 149,674    |  | Pick 'N Save Supermarket
K-Mart (Non-Owned) |  | $ | 843,563     |  | $ | 8.58 
|*Oak Creek Centre            |  | 1988      |  | 39  | % | 91,510     |  | 99,510     |  | N/A        |  | N/A                                         |  | $ | 232,298     |  | $ | 2.54 
|*Park Plaza                  |  | 1959/1993 |  | 93  | % | 113,669    |  | 113,669    |  | 74,054     |  | Big Lots
Hobby Lobby                        |  | $ | 447,418     |  | $ | 3.94 
|*Spring Mall                 |  | 1967/1994 |  | 90  | % | 204,861    |  | 204,861    |  | 135,055    |  | Pick 'N Save Supermarket
TJ Maxx
Walgreens  |  | $ | 1,478,156   |  | $ | 7.22 
|*Taylor Heights              |  | 1989      |  | 88  | % | 85,072     |  | 223,862    |  | 158,630    |  | Piggly Wiggly Foods
Wal-Mart (Non-Owned)    |  | $ | 824,810     |  | $ | 9.70 
|TOTAL SHOPPING CENTERS       |  |           |  | 93  | % | 28,003,656 |  | 33,663,855 |  | 21,547,028 |  |                                             |  | $ | 248,535,392 |  | $ | 8.88 
|Office Buildings:            |  |           |  |     |   |            |  |            |  |            |  |                                             |  |   |             |  |   |      
|William J. McCarthy Building |  | 1963/1995 |  | 89  | % | 93,018     |  | 93,018     |  |            |  | NETT                                        |  | $ | 2,910,575   |  | $ | 31.29
|545 Boylston Street          |  | 1972/1996 |  | 100 | % | 89,075     |  | 89,075     |  |            |  | Allied Advertising
Trinity Church           |  | $ | 3,120,518   |  | $ | 35.03

37

---



|Executive Office Building |  | 1970 |  | 100 | % | 40,180     |  | 40,180     |  |  |  | Lipner Gordon & Co.
Norca Corporation
Sol G Atlas Realty Heritage |  | $ | 665,678     |  | $ | 16.57
|------------------------- |  | ---- |  | --- | - | ---------- |  | ---------- |  |  |  | ----------------------------------------------------------------- |  | - | ----------- |  | - | -----
|                          |  |      |  |     |   |            |  |            |  |  |  |                                                                   |  |   |             | 
|TOTAL OFFICE BUILDINGS    |  |      |  | 96  | % | 222,273    |  | 222,273    |  |  |  |                                                                   |  | $ | 6,696,770   |  | $ | 30.13
|                          |  |      |  |     |   |            |  |            |  |  |  |                                                                   |  |   |             | 
|TOTAL PORTFOLIO           |  |      |  | 93  | % | 28,225,929 |  | 33,886,128 |  |  |  |                                                                   |  | $ | 255,232,163 |  | $ | 9.04 
|                          |  |      |  |     |   |            |  |            |  |  |  |                                                                   |  |   |             | 

---

38

---





The following tables provide information about the tenants and lease expirations within the portfolio of properties owned by Bradley OP and its subsidiaries. These tables exclude
information with respect to properties owned by Heritage and its other subsidiaries.

Top Tenants by Annualized Base Rent

|Tenant                             |  | # of Stores |  | Total GLA |  | GLA as a %
of Total |  | Tenant
Annualized
Base Rent (1) |           | % of Total
Annualized
Base Rent (2) |       | Type of Business
|---------------------------------- |  | ----------- |  | --------- |  | ------------------- |  | ------------------------------- | --------- | ----------------------------------- | ----- | ----------------
|1 Supervalu (3)                    |  | 10          |  | 657,733   |  | 3.73%               |  | $                               | 4,803,210 |                                     | 3.31% |                 
|2 TJX Companies (4)                |  | 20          |  | 581,587   |  | 3.30%               |  |                                 | 4,612,468 |                                     | 3.18% |                 
|3 Kroger (5)                       |  | 12          |  | 652,986   |  | 3.70%               |  |                                 | 4,337,660 |                                     | 2.99% |                 
|4 Associated Wholesale Grocers (6) |  | 9           |  | 571,947   |  | 3.24%               |  |                                 | 3,363,503 |                                     | 2.32% |                 
|5 Roundy's (7)                     |  | 8           |  | 491,482   |  | 2.79%               |  |                                 | 3,251,894 |                                     | 2.24% |                 
|6 Home Depot                       |  | 3           |  | 353,443   |  | 2.00%               |  |                                 | 2,790,470 |                                     | 1.92% |                 
|7 Hy-Vee                           |  | 9           |  | 535,066   |  | 3.03%               |  |                                 | 2,607,007 |                                     | 1.80% |                 
|8 Wal-Mart                         |  | 6           |  | 643,499   |  | 3.65%               |  |                                 | 2,566,116 |                                     | 1.77% |                 
|9 Blockbuster                      |  | 21          |  | 132,033   |  | 0.75%               |  |                                 | 2,194,353 |                                     | 1.51% |                 
|10 Walgreens                       |  | 13          |  | 167,930   |  | 0.95%               |  |                                 | 2,163,348 |                                     | 1.49% |                 
|11 Charming Shoppes (8)            |  | 25          |  | 208,935   |  | 1.18%               |  |                                 | 2,048,746 |                                     | 1.41% |                 
|12 Staples                         |  | 6           |  | 143,734   |  | 0.81%               |  |                                 | 1,907,554 |                                     | 1.31% |                 
|13 Hallmark                        |  | 33          |  | 172,084   |  | 0.98%               |  |                                 | 1,839,618 |                                     | 1.27% |                 
|14 Best Buy                        |  | 5           |  | 184,239   |  | 1.04%               |  |                                 | 1,671,261 |                                     | 1.15% |                 
|15 Safeway (9)                     |  | 2           |  | 153,213   |  | 0.87%               |  |                                 | 1,577,668 |                                     | 1.09% |                 
|16 Dollar Tree                     |  | 21          |  | 198,592   |  | 1.13%               |  |                                 | 1,536,219 |                                     | 1.06% |                 
|17 PetsMart                        |  | 5           |  | 125,670   |  | 0.71%               |  |                                 | 1,469,683 |                                     | 1.01% |                 
|18 OfficeMax                       |  | 6           |  | 159,653   |  | 0.90%               |  |                                 | 1,328,972 |                                     | 0.92% |                 
|19 Hollywood Entertainment         |  | 14          |  | 86,818    |  | 0.49%               |  |                                 | 1,269,180 |                                     | 0.87% |                 
|20 K-Mart                          |  | 4           |  | 346,202   |  | 1.96%               |  |                                 | 1,176,168 |                                     | 0.81% |                 

---

39

---



Total Lease Expiration Roll OutDecember 31, 2004

|Lease
Expiration
Year |  | Number of
Expiring
Leases |  | Expiring
Square Feet |  | % of Total
Sq. Ft. Expiring |  | Expiring
Base Rent(1) |             | % of Total
Base Rent |        | Expiring
Base Rent /
Sq. Ft.(2)
|--------------------- |  | ------------------------- |  | -------------------- |  | --------------------------- |  | --------------------- | ----------- | -------------------- | ------ | -------------------------------
|2005                  |  | 314                       |  | 1,123,308            |  | 6.8%                        |  | $                     | 11,531,458  |                      | 7.7%   |                                
|2006                  |  | 368                       |  | 2,163,464            |  | 13.2%                       |  |                       | 18,732,292  |                      | 12.5%  |                                
|2007                  |  | 325                       |  | 1,718,730            |  | 10.5%                       |  |                       | 17,004,379  |                      | 11.3%  |                                
|2008                  |  | 279                       |  | 1,784,561            |  | 10.9%                       |  |                       | 18,723,422  |                      | 12.5%  |                                
|2009                  |  | 235                       |  | 1,724,970            |  | 10.5%                       |  |                       | 16,777,294  |                      | 11.2%  |                                
|2010                  |  | 147                       |  | 1,146,027            |  | 7.0%                        |  |                       | 11,664,317  |                      | 7.8%   |                                
|2011                  |  | 64                        |  | 1,114,235            |  | 6.8%                        |  |                       | 9,307,890   |                      | 6.2%   |                                
|2012                  |  | 45                        |  | 717,470              |  | 4.4%                        |  |                       | 6,955,650   |                      | 4.6%   |                                
|2013                  |  | 45                        |  | 970,548              |  | 5.9%                        |  |                       | 8,074,378   |                      | 5.4%   |                                
|2014                  |  | 46                        |  | 707,979              |  | 4.3%                        |  |                       | 6,669,004   |                      | 4.4%   |                                
|2015 and Thereafter   |  | 101                       |  | 3,250,076            |  | 19.8%                       |  |                       | 24,786,439  |                      | 16.5%  |                                
|                      |  |                           |  |                      |  |                             |  |                       |             |                      |        |                                
|Totals                |  | 1,969                     |  | 16,421,368           |  | 100.0%                      |  | $                     | 150,226,523 |                      | 100.0% |                                
|                      |  |                           |  |                      |  |                             |  |                       |             |                      |        |                                

---

Item 3: Legal Proceedings

On October 31, 2001, a complaint was filed against Heritage in the Superior Court of Suffolk County of the Commonwealth of Massachusetts by Weston
Associates and its president, Paul Donahue, alleging that Heritage owes Mr. Donahue and his firm a fee in connection with services he claims he performed on Heritage's behalf in connection with
its acquisition of Bradley Real Estate Inc. On September 18, 2000, Heritage acquired Bradley, a publicly traded REIT based in Illinois with nearly 100 shopping
center properties located primarily in the Midwest, at an aggregate cost of approximately $1.2 billion. Through his personal relationships with the parties involved, at Heritage's request,
Mr. Donahue introduced Heritage to Bradley and its senior management team. Mr. Donahue alleges, however, that he played an instrumental role in the negotiation and completion of
Heritage's acquisition of Bradley beyond merely introducing the parties. For these alleged efforts, Mr. Donahue demands that he receive a fee equal to 2% of the aggregate consideration paid to
acquire Bradley, or a fee of approximately $24 million. In addition, Mr. Donahue also seeks treble damages based on alleged unfair or deceptive business practices under Massachusetts
law.

On
November 29, 2002, the court granted Heritage's motion to dismiss Mr. Donahue's claims. Mr. Donahue subsequently filed an appeal of the court's decision and on
March 4, 2004, an oral argument was heard with respect to Mr. Donahue's appeal. On July 14, 2004, the Massachusetts Appellate Court reversed the lower court's decision dismissing
Mr. Donahue's claims. The Appellate Court's decision reverts the case back to the Superior Court for discovery and additional proceedings. It is not possible at this time to predict the outcome
of this litigation and we intend to vigorously defend against these claims.

Except
as set forth above, neither we nor Bradley OP are involved in any material litigation nor, to our knowledge, is any material litigation threatened against us or Bradley OP,
other than routine litigation arising in the ordinary course of business, which is generally expected to be covered by insurance. In the opinion of our management, based upon currently available
information, this litigation is not expected to have a material adverse effect on our or Bradley OP's business, financial condition or results of operations.

Item 4: Submission of Matters to a Vote of Security Holders

None

40

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PART II

Item 5: Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

There is no established trading market for the LP Units. As of December 31, 2004, there were 28 holders of record of LP Units, including Heritage. In
addition, our wholly owned subsidiary is the holder of all of the GP Units.

The
following table sets forth the quarterly distributions per LP Unit declared by Bradley OP with respect to each period set forth below.

Quarter Ended

DistributionsDecember 31, 2004

$
0.525September 30, 2004

$
0.525June 30, 2004

$
0.525March 31, 2004

$
0.525December 31, 2003

$
0.525September 30, 2003

$
0.525June 30, 2003

$
0.525March 31, 2003

$
0.525


The
Bradley OP partnership agreement provides that the net operating cash flow of Bradley OP will be distributed from time to time as determined by our subsidiary (but not less
frequently than quarterly) pro rata in accordance with the partners' respective percentage interests and priorities. In the Bradley OP partnership agreement, Bradley OP is required to pay to the
holders of LP Units a quarterly distribution of at least the amount of the dividend Heritage declares on its common stock, subject to the rights of the holders of any preferred units.

During
the three months ended December 31, 2004, Bradley OP issued an aggregate of 189,588 common LP Units in connection with the contribution of a property to
Bradley OP by the individual owners of the property. These LP Units were issued in reliance on exemption from registration under Section 4(2) of the Securities Act of 1933.
Bradley OP relied on the exemption under Section 4(2) based on factual representations received from the limited partners who received the LP Units.

In
August 2004, Heritage issued 7,814 shares of its common stock to an individual in a transaction exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to (i) Section 4(2) of the Securities Act and Regulation D promulgated thereunder ("Regulation D"), and (ii) the status of the
individual as an "accredited investor" as defined in Rule 501(a) of Regulation D. These shares were issued in exchange for 7,814 LP Units, which were redeemable pursuant to
Bradley OP's partnership agreement for cash or, at Heritage's option, shares of our common stock, on a one-to-one basis (subject to adjustment in the event of stock splits,
stock dividends and similar events). In August 2004, this individual notified Heritage of his desire to require Bradley OP to redeem his LP Units by delivering a notice of redemption.
Heritage then exercised its right to issue shares of its common stock for such redeemed units and issued 7,814 shares of its common stock (the number of units redeemed) to this individual upon
redemption of his LP Units.

41

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Item 6: Selected Financial Data

The following selected historical consolidated financial and operating data of Bradley OP should be read together with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the consolidated financial statements of Bradley OP beginning on page F-1 of this document. The following data does not include any
information with respect to Heritage or any of its subsidiaries other than Bradley OP and its subsidiaries. Consolidated financial information with respect to Heritage and its subsidiaries may be
found in Heritage's filings with the SEC.

On
September 18, 2000, Heritage acquired Bradley Real Estate, Inc. ("Bradley"), a publicly traded REIT based in Illinois with nearly 100 shopping center properties located
primarily in the Midwest, at an aggregate cost of approximately $1.2 billion. Heritage acquired Bradley through a merger in which all of the holders of Bradley capital stock received cash in
exchange for their shares. Through the acquisition, Heritage also acquired a controlling interest in Bradley OP through the acquisition of all of the general partnership units and substantially all of
the limited partnership units of Bradley OP. Heritage accounted for the transaction using the purchase method of accounting and, accordingly, the acquisition cost was allocated to the estimated fair
values of the assets received and liabilities assumed. As a result of Heritage's accounting for the transaction, several significant changes were required affecting Bradley OP's financial position and
future results of operations. These changes included but were not limited to, recognizing straight-line rental income over a different period, increasing the book value of the real estate
investments acquired to their estimated fair values and writing off any unamortized deferred leasing and financing costs. Based on these changes, the financial position and results of operations of
Bradley OP for the periods subsequent to the acquisition have been shown separately from the financial position and results of operations for the period prior to the acquisition.

42

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|                                                                                    |                                                             | Year Ended December 31, |          
|----------------------------------------------------------------------------------- | ----------------------------------------------------------- | ----------------------- | ---------
|
|
|STATEMENT OF OPERATIONS DATA:                                                       |                                                             |                         |          
|Revenue:                                                                            |                                                             |                         |          
|                                                                                    | Rentals and recoveries                                      |                         | $        
|                                                                                    | Interest and other                                          |                         |          
|                                                                                    |                                                             |                         |          
|Total revenue                                                                       |                                                             |                         | 188,666  
|                                                                                    |                                                             |                         |          
|Expenses:                                                                           |                                                             |                         |          
|                                                                                    | Operating                                                   |                         |          
|                                                                                    | General and administrative                                  |                         |          
|                                                                                    | Depreciation and amortization                               |                         |          
|                                                                                    | Interest                                                    |                         |          
|                                                                                    | Loss on prepayment of debt                                  |                         |          
|                                                                                    |                                                             |                         |          
|Total expenses                                                                      |                                                             |                         | 161,199  
|                                                                                    |                                                             |                         |          
|Income before net gains                                                             |                                                             |                         | 27,467   
|                                                                                    | Net derivative (losses) gains                               |                         |          
|                                                                                    | Gain on sale of real estate investment                      |                         |          
|                                                                                    |                                                             |                         |          
|Income before discontinued operations                                               |                                                             |                         | 27,495   
|                                                                                    | Income from discontinued operations                         |                         |          
|                                                                                    | Gain on sale of discontinued operations                     |                         |          
|                                                                                    |                                                             |                         |          
|Net income                                                                          |                                                             |                         | 28,997   
|                                                                                    | Preferred stock distributions                               |                         |          
|                                                                                    |                                                             |                         |          
|Net income attributable to common unitholders                                       |                                                             | $                       | 26,821   
|                                                                                    |                                                             |                         |          
|Per Unit Data:                                                                      |                                                             |                         |          
|                                                                                    | Basic and diluted income from continuing operations         |                         | $        
|                                                                                    | Basic and diluted income from discontinued operations       |                         | $        
|                                                                                    | Basic and diluted income attributable to common unitholders |                         | $        
|                                                                                    | Distributions declared per unit                             |                         | $        
|Weighted average common units outstandingBasic and diluted                         |                                                             |                         | 34,132   
|BALANCE SHEET DATA: (at end of period)                                              |                                                             |                         |          
|Real estate investments, before accumulated depreciation                            |                                                             | $                       | 1,497,981
|Total assets                                                                        |                                                             |                         | 1,448,165
|Total liabilities                                                                   |                                                             |                         | 892,179  
|Minority interest                                                                   |                                                             |                         | 2,425    
|Redeemable capital                                                                  |                                                             |                         | 16,752   
|Partners' capital                                                                   |                                                             |                         | 536,809  
|OTHER DATA:                                                                         |                                                             |                         |          
|# of shopping centers (at end of period)                                            |                                                             |                         | 106      
|Gross leasable area of shopping centers (sq. ft. at end of period, in thousands)(2) |                                                             |                         | 17,646   
|Total portfolio net operating income                                                |                                                             | $                       | 130,845  
|Cash flows from operating activities                                                |                                                             | $                       | 71,156   
|Cash flows from investing activities                                                |                                                             | $                       | (44,743  
|Cash flows from financing activities                                                |                                                             | $                       | (23,570  

---

43

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|                                                                                    |                                                   | January 1, 2000
to September 18, 2000(1) |          
|----------------------------------------------------------------------------------- | ------------------------------------------------- | ---------------------------------------- | ---------
|
|STATEMENT OF OPERATIONS DATA:                                                       |                                                   |                                          |          
|Revenue:                                                                            |                                                   |                                          |          
|                                                                                    | Rentals and recoveries                            |                                          | $        
|                                                                                    | Interest and other                                |                                          |          
|                                                                                    |                                                   |                                          |          
|Total revenue                                                                       |                                                   |                                          | 113,819  
|                                                                                    |                                                   |                                          |          
|Expenses:                                                                           |                                                   |                                          |          
|                                                                                    | Operating                                         |                                          |          
|                                                                                    | General and administrative                        |                                          |          
|                                                                                    | Depreciation and amortization                     |                                          |          
|                                                                                    | Interest                                          |                                          |          
|                                                                                    |                                                   |                                          |          
|Total expenses                                                                      |                                                   |                                          | 82,974   
|Income before equity in earnings of partnership                                     |                                                   |                                          | 30,845   
|Gain on sale of properties                                                          |                                                   |                                          | 205      
|                                                                                    |                                                   |                                          |          
|Net income                                                                          |                                                   |                                          | 31,050   
|                                                                                    | Preferred stock distributions                     |                                          |          
|                                                                                    |                                                   |                                          |          
|Net income attributable to common unitholders                                       |                                                   | $                                        | 21,466   
|                                                                                    |                                                   |                                          |          
|Per Unit Data:                                                                      |                                                   |                                          |          
|                                                                                    | Basic income attributable to common unitholders   |                                          | $        
|                                                                                    | Diluted income attributable to common unitholders |                                          | $        
|Weighted average common units outstandingbasic                                     |                                                   |                                          | 25,002   
|Weighted average common and common equivalent units outstandingdiluted             |                                                   |                                          | 25,002   
|BALANCE SHEET DATA: (at end of period)                                              |                                                   |                                          |          
|Real estate investments, before accumulated depreciation                            |                                                   | $                                        | 1,164,549
|Total assets                                                                        |                                                   |                                          | 1,185,192
|Total liabilities                                                                   |                                                   |                                          | 627,747  
|Minority interests                                                                  |                                                   |                                          | 2,425    
|Redeemable capital                                                                  |                                                   |                                          | 75,556   
|Partners' capital                                                                   |                                                   | $                                        | 479,464  
|OTHER DATA:                                                                         |                                                   |                                          |          
|# of shopping centers (at end of period)                                            |                                                   |                                          | 97       
|Gross leasable area of shopping centers (sq. ft. at end of period, in thousands)(2) |                                                   |                                          | 15,460   
|Total portfolio net operating income                                                |                                                   | $                                        | 82,394   

---

44

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Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the selected financial data and the historical consolidated financial
statements and related notes thereto.

Heritage
Property Investment Trust, Inc., Bradley Operating Limited Partnership and their respective subsidiaries are separate legal entities. For ease of reference, the terms
"we," "us," and "ours" refer to the business and properties of all these entities, unless the context indicates otherwise. Similarly, references to "Heritage" or "the Company" refer to Heritage
Property Investment Trust, Inc. and its subsidiaries and references to Bradley OP refer to Bradley Operating Limited Partnership and its subsidiaries.

Overview

We are a fully integrated, self-administered and self-managed real estate investment trust, or "REIT." We are one of the nation's largest
owners of neighborhood and community shopping centers. As of December 31, 2004, we had a shopping center portfolio consisting of 164 shopping centers, located in 29 states and totaling
approximately 33.7 million square feet of GLA, of which approximately 28.0 million square feet was Company-owned GLA. Our shopping center portfolio was approximately 93.3% leased as of
December 31, 2004.

Heritage
conducts its business exclusively through its subsidiaries and primarily through its two operating partnerships, Heritage Property Investment Limited Partnership, or Heritage
OP, and Bradley OP. Bradley OP is a Delaware limited partnership and is the primary entity through which Heritage conducts its operations in the Midwest. As of December 31, 2004, Bradley OP and
its subsidiaries owned 106 shopping centers, located in 21 states and totaling approximately 17.6 million square feet of Company-owned GLA.

Although
we generally manage the affairs of Bradley OP and Heritage OP in the same manner, we are operating two distinct operating partnerships as we have elected not to merge or combine
Heritage OP and Bradley OP as a legal matter at this time. We continue to act as the sole general partner and hold
of all of the partnership interests in Heritage OP. Through our wholly-owned subsidiary, we are also the sole general partner of Bradley OP and manage and conduct the business of Bradley OP and its
portfolio of real estate properties in accordance with the Bradley OP limited partnership agreement. Our board of directors manages the affairs of Bradley OP by directing the affairs of Heritage.
Unless otherwise specifically stated, the discussion below refers to Heritage and Bradley OP together.

Our
operating strategy is to own and manage a quality portfolio of community and neighborhood shopping centers that will provide stable cash flow and investment returns. Our focus is to
own primarily grocer-anchored centers with a diverse and multi-anchored tenant base in attractive geographic locations with strong demographics. We derive substantially all of our revenues from
rentals and recoveries received from tenants under existing leases on each of our properties. Our operating results therefore depend primarily on the ability of our tenants to make required rental
payments.

Generally,
we do not expect that our net operating income, a non-GAAP measure, will deviate significantly in the short-term. This is because our leases with our
tenants provide us a stable cash flow over the long-term. In addition, other than in circumstances such as higher than anticipated snow removal costs, utility expenses, insurance costs or
real estate taxes, our operating expenses generally remain predictable.

However,
as an owner of community and neighborhood shopping centers, our performance is linked to economic conditions in the retail industry in those markets in which our centers are
located. The retail sector continues to change dramatically as a result of continued industry consolidation due to the continuing strength of Wal-Mart and large retail bankruptcies in the
recent past resulting in an excess amount of available retail space, fewer national tenants, and greater competition. We believe

45

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that
the nature of the properties that we primarily own and invest ingrocer-anchored neighborhood and community shopping centersprovides a more stable revenue flow in
uncertain economic times, as they are more resistant to economic down cycles. This stability is due to the fact that consumers still need to purchase food and other goods found at grocers, even in
difficult economic times.

In
the face of these challenging market conditions, we follow a dual growth strategy. First, we continue to focus on increasing our internal growth by leveraging our existing tenant
relationships to improve the performance of our existing shopping center portfolio. We believe that there are meaningful opportunities to increase our cash flow from our existing properties because of
their desirable locations. For instance, during 2002, 2003, and the first quarter of 2004, we were adversely affected by large retail bankruptcies that created vacant space within our portfolio and by
the increasingly competitive leasing environment resulting from the economic downturn during the early part of this decade. However, as a result of our efforts to re-let space, including
space recovered from bankrupt tenants, as well as the improvement in the overall performance of our portfolio and improving economic conditions within our markets, we experienced an increase of
approximately 2.4% in our same property
net operating income during 2004 (excluding lease termination activity). We anticipate our same property net operating income during 2005 will be consistent with our performance during 2004.

During
2004, in order to re-let vacant space within our portfolio, we incurred higher non-recurring capital expenditures than in prior periods as we
re-positioned several of our centers for future growth. In addition, we anticipate incurring additional non-recurring capital expenditures during 2005 as we seek further
opportunities to reposition vacant space.

Secondly,
we focus on achieving external growth by the expansion of our portfolio and we will continue to pursue targeted acquisitions of multi-anchored, primarily by grocers,
neighborhood and community shopping centers in attractive markets with strong economic and demographic characteristics. We will pursue acquisitions in our existing markets as well as in new markets,
including where a portfolio of properties might be available to enable us to establish a platform for further growth. In recent years, the market for acquisitions has been particularly competitive
with a greater number of potential buyers pursuing fewer properties. The low interest rate environment and reduced costs of funds have further served to dramatically increase prices paid for shopping
center properties. As a result, during 2004, our effort to expand our portfolio through acquisition was adversely affected. We expect that as long as the interest rate environment continues to be
favorable to buyers, this competitive acquisition environment will continue.

As
a means of increasing our access to potential acquisitions and alternative sources of capital to fund future acquisitions, we are pursuing joint venture arrangements with third party
developers and institutional investors. We completed our first joint venture arrangement with a third party developer during the second quarter of 2004. However, with respect to joint venture
arrangements with third party developers, in most cases, we do not anticipate that we will recognize the full economic benefit of such arrangements for 2-3 years. In 2005, as a
means of increasing our external growth, we also expect to aggressively pursue additional growth capital for acquisitions through strategic joint ventures with institutional investors.

In
the near future, to take advantage of favorable market conditions, we intend to dispose of properties that are not a strategic fit within our overall portfolio. The disposition of
shopping center properties may lead to short-term decreases in net operating income. However, we intend to offset any such decreases by re-investing the proceeds of such sales
to grow our existing portfolio, whether through acquisition or joint venture. We may also use these sale proceeds to reduce our overall outstanding indebtedness, improving the quality of our balance
sheet.

During
2004, as reflected below, our general and administrative expenses have been higher than anticipated as a result of increased staffing, various business initiatives aimed at future
growth, the

46

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increased
costs associated with being a public company and unanticipated severance costs. In particular, the costs associated with the Company's review of its internal controls to ensure compliance
with Section 404 of the Sarbanes-Oxley Act have been significantly higher than expected. We expect these increased non-severance general and administrative costs to continue during
2005.

We
currently expect to incur additional debt in connection with future acquisitions of real estate. As of December 31, 2004, we had $1.3 billion of indebtedness, of which
approximately $645.8 million was unsecured indebtedness. Although we expect to assume additional secured debt in connection with the acquisition of real estate, in the future, we intend to
finance our operations and growth primarily through borrowings under our new line of credit facility, unsecured private or public debt offerings or by additional equity offerings. We may also pursue
joint venture arrangements aimed at providing alternative sources of capital.

Critical Accounting Policies

We have identified the following critical accounting policies that affect our more significant estimates and judgments used in the preparation of Bradley OP's
financial statements. The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues
and expenses, and related disclosures of contingent assets and liabilities.

On
an ongoing basis, we evaluate our estimates, including those related to revenue recognition and the allowance for doubtful accounts receivable, real estate investments (including
purchase price allocations) and asset impairment, and derivatives used to hedge interest-rate risks. We state these accounting policies in the notes to our consolidated financial
statements and at relevant sections in this discussion and analysis. Our estimates are based on information that is currently available to us and on various other assumptions that we believe are
reasonable under the circumstances. Actual results could differ from those estimates and those estimates could be different under varying assumptions or conditions.

Revenue Recognition

Rental income with scheduled rent increases is recognized using the straight-line method over the term of the leases commencing when the tenant takes
possession of the space. The aggregate excess of rental revenue recognized on a straight-line basis over cash received under applicable lease provisions is included in accounts receivable.
In addition, leases for both retail and office space generally contain provisions under which the tenants reimburse us for a portion of property operating expenses and real estate taxes incurred by
us, requiring us to estimate the amount of revenue from these recoveries. Such recoveries revenue is recorded based on management's estimate of its recovery of certain operating expenses and real
estate tax expenses, pursuant to the terms contained in related leases. In addition, certain of our operating leases for retail space contain contingent rent provisions under which tenants are
required to pay a percentage of their sales in excess of a specified amount as additional rent. We defer recognition of contingent rental income until those specified targets are met.

We
must make estimates of the uncollectibility of our accounts receivable related to minimum rent, deferred rent, expense reimbursements and other revenue or income. We specifically
analyze accounts receivable and historical bad debts, tenant concentrations, tenant creditworthiness, current economic trends and changes in our tenant payment terms when evaluating the adequacy of
the allowance for doubtful accounts receivable. These estimates have a direct impact on our net income, because a higher bad debt allowance would result in lower net income.

47

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Real Estate Investments

At our formation in July 1999, contributed real estate investments were recorded at the carry-over basis of our predecessor, which was fair
market value of the assets in conformity with GAAP applicable to pension funds. Subsequent acquisitions of real estate investments, including those acquired in connection with our acquisition of
Bradley in September 2000 and other acquisitions since our formation, are recorded at cost. Expenditures that substantially extend the useful life of a real estate investment are capitalized.
Expenditures for maintenance, repairs and betterments that do not materially extend the useful life of a real estate investment are charged to operations as incurred.

The
provision for depreciation and amortization has been calculated using the straight-line method over the following estimated useful lives:

|Land improvements          |  | 15 years                                       
|-------------------------- |  | -----------------------------------------------
|Buildings and improvements |  | 20-39 years                                    
|Tenant improvements        |  | Shorter of useful life or term of related lease

We
are required to make subjective assessments as to the useful lives of our properties for purposes of determining the amount of depreciation to reflect on an annual basis with respect
to our properties. These assessments have a direct impact on our net income because if we were to shorten the expected useful life of our properties or improvements, we would depreciate them over
fewer years, resulting in more depreciation expense and lower net income on an annual basis during these periods.

We
apply Statement of Financial Accounting Standards (SFAS) No. 144,Accounting for the Impairment or Disposal of Long-Lived
Assets, to recognize and measure impairment of long-lived assets. We review each real estate investment for impairment whenever events or circumstances indicate
that the carrying value of a real estate investment may not be recoverable. The review of recoverability is based on an estimate of the future undiscounted cash flows, excluding interest charges,
expected to result from the real estate investment's use and eventual disposition. These cash flows consider factors such as expected future operating income, trends and prospects, as well as the
effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a real estate investment, an impairment loss is recorded to the
extent that the carrying value exceeds estimated fair market value, resulting in a lower net income. No such impairment losses have been recognized to date.

Real
estate investments held for sale are carried at the lower of carrying amount or fair value, less cost to sell. Depreciation and amortization are suspended during the period held for
sale.

We
apply Statement of Financial Accounting Standards No. 141,Business Combinations, to property acquisitions. Accordingly, the
fair value of the real estate acquired is allocated to the acquired tangible assets, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases,
other value of in-place leases and value of tenant relationships, based in each case on their fair values.

The
fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, and the "as-if-vacant" value is then
allocated based on management's determination of the relative fair values of these assets. Management determines the as-if-vacant fair value of a property using methods similar
to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods
considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of
lost rental revenue during the expected lease-up periods based on current market demand. Management also estimates costs to execute similar leases including leasing commissions, legal and

48

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other
related costs. The "as-if-vacant" value is then allocated amongst land, land improvements, building, and building improvements based on the Company's estimate of
replacement costs.

In
allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded
based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the
in-place leases and (ii) management's estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining
non-cancelable term of the lease. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining non-cancelable terms of the
respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term and any fixed rate renewal periods in the respective leases.

The
aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationships, is measured by the excess of (i) the purchase price
paid for a property after adjusting existing in-place leases to market rental rates over (ii) the estimated fair value of the property as if vacant, determined as set forth above.
This aggregate value is allocated between in-place lease values and tenant relationships, if any, based on management's evaluation of the specific characteristics of each tenant's lease;
however, the value of tenant relationships has not been separated from in-place lease value for the additional interests in real estate entities because such value and its consequence to
amortization expense is estimated to be immaterial for these particular acquisitions. Should future acquisitions of properties result in allocating material amounts to the value of tenant
relationships, an amount would be separately allocated and amortized over the estimated life of the relationship. The value of in-place leases exclusive of the value of above-market and
below-market in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated
expiration, all unamortized amounts relating to that lease would be written off.

Results of Operations

The following discussion is based on Bradley OP's consolidated financial statements for the years ended December 31, 2004, 2003, and 2002. The results of
operations described below are those of Bradley OP and its subsidiaries on a consolidated basis. The results below do not reflect the results of Heritage and its other subsidiaries, including Heritage
OP. The operations of Bradley OP and its subsidiaries comprise approximately 57% of Heritage's total net operating income for the year ended December 31, 2004. For a discussion of the
consolidated results of operations of Heritage and its subsidiaries, including Bradley OP, for the years ended December 31, 2004, 2003 and 2002, refer to Heritage's Annual Report on
Form 10-K for the year ended December 31, 2004 as filed with the SEC.

The
comparison of operating results for the years ended December 31, 2004 and 2003 and for the years ended December 31, 2003 and 2002 show changes in revenue and expenses
resulting from net operating income for properties that Bradley OP owned for each period compared (we refer to this comparison as Bradley OP's "Same Property Portfolio" for the applicable
period) and the changes for income before net gains attributable to Bradley OP's Total Portfolio. Unless otherwise indicated, increases in revenue and expenses attributable to the Total
Portfolio are due to the acquisition of properties during the periods being compared. In addition, amounts reported as discontinued operations in the accompanying consolidated financial statements
related to properties that have been sold prior to December 31, 2004 are excluded from the Same Property Portfolio and Total Portfolio information.

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Comparison of the year ended December 31, 2004 to the year ended December 31, 2003

The table below shows selected operating information for Bradley OP's Total Portfolio and the 103 properties acquired prior to January 1, 2003 that
remained in the Total Portfolio through December 31, 2004, which constitute the Same Property Portfolio for the years ended December 31, 2004 and 2003. Certain 2003 amounts for the Total
Portfolio have been reclassified to the current presentation of discontinued operations (in thousands):

|                              |                                   | Same Property Portfolio |         |         |   | Total Portfolio |         |   |      
|----------------------------- | --------------------------------- | ----------------------- | ------- | ------- | - | --------------- | ------- | - | -----
|
|Rental and recovery revenue:  |                                   |                         |         |         |   |                 |         |   |      
|Rentals                       |                                   | $                       | 136,982 |         | $ | 137,955         |         | $ | (973 
|Percentage rent               |                                   |                         | 1,975   |         |   | 2,262           |         |   | (287 
|Recoveries                    |                                   |                         | 45,793  |         |   | 43,764          |         |   | 2,029
|Other property                |                                   |                         | 1,298   |         |   | 1,240           |         |   | 58   
|                              |                                   |                         |         |         |   |                 |         |   |      
|                              | Total rental and recovery revenue |                         |         | 186,048 |   |                 | 185,221 |   |      
|Expenses:                     |                                   |                         |         |         |   |                 |         |   |      
|Property operating expenses   |                                   |                         | 26,610  |         |   | 26,977          |         |   | (367 
|Real estate taxes             |                                   |                         | 30,312  |         |   | 29,134          |         |   | 1,178
|                              |                                   |                         |         |         |   |                 |         |   |      
|                              | Net operating income (*)          |                         | $       | 129,126 |   | $               | 129,110 |   | $    
|                              |                                   |                         |         |         |   |                 |         |   |      
|Add:                          |                                   |                         |         |         |   |                 |         |   |      
|Interest and other income     |                                   |                         |         |         |   |                 |         |   |      
|Deduct:                       |                                   |                         |         |         |   |                 |         |   |      
|Depreciation and amortization |                                   |                         |         |         |   |                 |         |   |      
|Interest                      |                                   |                         |         |         |   |                 |         |   |      
|General and administrative    |                                   |                         |         |         |   |                 |         |   |      
|                              |                                   |                         |         |         |   |                 |         |   |      
|Income before net gains       |                                   |                         |         |         |   |                 |         |   |      
|                              |                                   |                         |         |         |   |                 |         |   |      

---

The decrease in rental revenue, including termination fees, for Bradley OP's Same Property Portfolio is primarily the result of a decrease
in minimum rent of $2.0 million offset by a decrease in the provision for allowance for doubtful accounts of $0.9 million. The decrease in minimum rent is due to a decrease of
$2.0 million from termination fee income. A lower provision was required for the year ended December 31, 2004 as compared with the year ended December 31, 2003 as a result of a
decrease in large tenant bankruptcies.

Percentage
rent revenue decreased for Bradley OP's Same Property Portfolio primarily due to the loss of three anchor tenants with significant percentage rent components comprising
$0.3 million as well as the uncertainty of realization that certain tenant sales thresholds have been met.

Recoveries
revenue increased for Bradley OP's Same Property Portfolio primarily due to an overall increase in property operating expense recovery income and other reimbursement
income of $0.9 million, an increase in real estate tax recovery income of $0.8 million, and a decrease in the provision for allowance for doubtful accounts of $0.4 million.
Property operating expense recovery income increased primarily as a result of an increase in the property operating expense recovery rates due to true-ups related to the annual
reconciliation process offset by a decrease in reimbursable property operating expenses. Real estate recovery income increased primarily as a result of an increase in real estate tax expense as well
as an increase in the real estate tax expense recovery rates due to true-ups related to an improved annual reconciliation process.

Property
operating expenses decreased primarily as a result of a $0.5 million lease buy-out expense recorded in the prior year and a $0.3 million decrease in
insurance expense. These decreases were

50

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partially
offset by a $0.2 million increase in maintenance and supervision expense and a $0.1 million increase in utility expense.

Real
estate tax expense increased primarily as a result of increased valuations assessed for certain properties primarily located in Indiana and Illinois.

Interest
expense increased due to the issuance of $350 million of unsecured notes payable, higher average balances under our line of credit, and an increase in mortgage loans
payable as a result of the assumption of debt from various property acquisitions partially offset by a decrease due to the
repayment of $100.0 million of bonds payable. In addition, the weighted average interest rate increased slightly in 2004 as compared with 2003. The weighted average effective interest rate was
5.38% at December 31, 2004 as compared with 5.09% at December 31, 2003.

General
and administrative expenses increased by $2.5 million from December 31, 2003 to December 31, 2004. Heritage allocates 100% of its general and administrative
expenses to its subsidiaries, including costs associated with Bradley OP. For costs specifically identifiable to a subsidiary, Heritage performs a direct allocation. Remaining costs are allocated
based on the square footage of properties owned by each subsidiary. During 2004 and 2003, Heritage allocated approximately 63% and 65%, respectively of these remaining costs to Bradley OP. Refer to
Heritage's Annual Report on Form 10-K for the year ended December 31, 2004 as filed with the SEC for a more detailed discussion of Heritage's general and administrative
expenses.

Comparison of the year ended December 31, 2003 to year ended December 31, 2002

The table below shows selected operating information for Bradley OP's Total Portfolio and the 153 properties acquired prior to January 1, 2002 that
remained in Bradley OP's Total Portfolio through December 31, 2002 (which constitute the Same Property Portfolio for the years ended December 31, 2003 and 2002). Certain 2003 and 2002
amounts for the Total Portfolio have been reclassified to conform to the current presentation of discontinued operations (in thousands):

|                              |                                   | Same Property Portfolio |         |         |   | Total Portfolio |         |   |      
|----------------------------- | --------------------------------- | ----------------------- | ------- | ------- | - | --------------- | ------- | - | -----
|
|Rental and recovery revenue:  |                                   |                         |         |         |   |                 |         |   |      
|Rentals                       |                                   | $                       | 118,180 |         | $ | 115,025         |         | $ | 3,155
|Percentage rent               |                                   |                         | 2,262   |         |   | 3,044           |         |   | (782 
|Recoveries                    |                                   |                         | 40,170  |         |   | 40,547          |         |   | (377 
|Other property                |                                   |                         | 1,235   |         |   | 1,699           |         |   | (464 
|                              |                                   |                         |         |         |   |                 |         |   |      
|                              | Total rental and recovery revenue |                         |         | 161,847 |   |                 | 160,315 |   |      
|Expenses:                     |                                   |                         |         |         |   |                 |         |   |      
|Property operating expenses   |                                   |                         | 24,582  |         |   | 23,478          |         |   | 1,104
|Real estate taxes             |                                   |                         | 26,413  |         |   | 26,228          |         |   | 185  
|                              |                                   |                         |         |         |   |                 |         |   |      
|                              | Net operating income(*)           |                         | $       | 110,852 |   | $               | 110,609 |   | $    
|                              |                                   |                         |         |         |   |                 |         |   |      
|Add:                          |                                   |                         |         |         |   |                 |         |   |      
|Interest and other income     |                                   |                         |         |         |   |                 |         |   |      
|Deduct:                       |                                   |                         |         |         |   |                 |         |   |      
|Depreciation and amortization |                                   |                         |         |         |   |                 |         |   |      
|Interest                      |                                   |                         |         |         |   |                 |         |   |      
|General and administrative    |                                   |                         |         |         |   |                 |         |   |      
|Net derivative loses          |                                   |                         |         |         |   |                 |         |   |      
|Loss on prepayment of debt    |                                   |                         |         |         |   |                 |         |   |      
|                              |                                   |                         |         |         |   |                 |         |   |      
|                              | Income before net gains           |                         |         |         |   |                 |         |   |      
|                              |                                   |                         |         |         |   |                 |         |   |      

---

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The increase in rental revenue, including termination fees, for Bradley OP's Same Property Portfolio is primarily the result of new leases and
rollovers of existing tenants at higher rental rates and an increase in termination fees of $1.6 million, which was offset by a higher provision for the allowance for doubtful accounts
$0.4 million

Percentage
rent revenue decreased for Bradley OP's Same Property Portfolio primarily due to the loss of two anchor tenants with significant percentage rent components comprising
$0.4 million as well as the difference from the prior year timing of notification that sales thresholds have been met.

Recoveries
revenue declined slightly for Bradley OP's Same Property Portfolio primarily due to lower recovery rates offset by an increase in property operating and real estate tax
expenses. Recovery rates for recoverable property operating expenses decreased to 73.1% from 76.6%. The decrease in recovery rates for property operating expenses is due to an increase in
non-reimbursable expenses.

Other
property revenue decreased primarily as a result of the timing of notification that sales thresholds have been met for tax incentive financing revenue.

Property
operating expenses increased primarily as a result of $0.5 million of snow removal costs associated with heavy snowfall across Bradley OP's Total Portfolio during the
first few calendar months of 2003 and December 2003 and $0.5 million of lease buyout expense incurred in 2003.

Real
estate tax expense increased primarily as a result of an increase in tax rates across Bradley OP's Total Portfolio, particularly those properties located in Illinois as well as
additional tax expense related to the vacancy of certain anchor tenants who paid their property taxes directly to the taxing authorities.

The
decrease in interest and other income in Bradley OP's Total Portfolio is primarily due to lower rates and lower average cash balances during 2003.

Interest
expense decreased due to lower average indebtedness and lower average interest rates throughout the year as Bradley OP's weighted average interest rate decreased to 5.09% at
December 31, 2003 from 5.39% at December 31, 2002.

General
and administrative expenses decreased by $3.6 million from December 31, 2002 to December 31, 2003. Heritage allocates 100% of its general and administrative
expenses to its subsidiaries, including costs associated with Bradley OP. For costs specifically identifiable to a subsidiary, Heritage performs a direct allocation. Remaining costs are allocated
based on the square footage of properties owned by each subsidiary. During 2003 and 2002, Heritage allocated approximately 65% and 66%, respectively of these remaining costs to Bradley OP. Refer to
Heritage's Annual Report on Form 10-K for the year ended December 31, 2004 as filed with the SEC for a more detailed discussion of Heritage's general and administrative
expenses.

Liquidity and Capital Resources

At December 31, 2004, Heritage had $6.7 million and Bradley OP had $4.6 million in available cash and cash equivalents. As a REIT, Heritage
is required to distribute at least 90% of its taxable income to its stockholders on an annual basis. Bradley OP also generally distributes all of its taxable income. Therefore, as a general matter, it
is unlikely that either Heritage or Bradley OP will have any substantial cash balances that could be used to meet its respective liquidity needs. Instead, these needs must be met from cash generated
from operations and external sources of capital.

At
December 31, 2004, Heritage had $1.3 billion of indebtedness. This indebtedness had a weighted average interest rate of 6.19% with an average maturity of
5.0 years. As of December 31, 2004, Heritage's market capitalization was $2.8 billion, resulting in a debt-to-total market capitalization ratio of
approximately 46.0%.

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At
December 31, 2004, Bradley OP had $826 million of indebtedness, including the full balance of amounts outstanding under the line of credit facility. This indebtedness
had a weighted average interest rate of 5.38% with an average maturity of 4.73 years.

Short-Term Liquidity Requirements

The short-term liquidity requirements of Heritage and Bradley OP are substantially identical and are referred to together in the discussion below.
These short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our properties, including:



We
incur maintenance capital expenditures at our properties, which include such expenses as parking lot improvements, roof repairs and replacements and other non-revenue
enhancing capital expenditures. Maintenance capital expenditures were approximately $7.0 million, or $0.25 per square foot, for the year ended December 31, 2004, of which, approximately
$5.0 million, or $0.28 per square foot, related to properties within the Bradley OP portfolio. We have also incurred and expect to continue to incur revenue enhancing capital expenditures such
as tenant improvements and leasing commissions in connection with the leasing or re-leasing of retail space.

We
believe that we qualify and we intend to continue to qualify as a REIT under the Internal Revenue Code. As a REIT, we are allowed to reduce taxable income by all or a portion of our
distributions paid to shareholders. We believe that our existing working capital and cash provided by operations will be sufficient to allow us to pay distributions necessary to enable us to continue
to qualify as a REIT.

However,
under some circumstances, we may be required to pay distributions in excess of cash available for those distributions in order to meet these distribution requirements, and we
may need to borrow funds, most likely under our new line of credit, to pay distributions in the future.

Historically,
we have satisfied our short-term liquidity requirements through our existing working capital and cash provided by our operations as well as with borrowings
under the Company's line of credit facility. We believe that our existing working capital and cash provided by operations should be sufficient to meet our short-term liquidity
requirements. Cash flows provided by operating activities decreased to $123.0 million for the year ended December 31, 2004 from $148.7 million for the year ended
December 31, 2003. The decrease in cash flows from operations is primarily attributable to the combined effect of a $15.6 million increase in accounts receivable due to the timing of
completion of the annual reconciliation process and a $10.9 million increase in prepaid and other assets, offset by a $4.0 million increase in net income.

There
are a number of factors that could adversely affect our cash flow. The continuation of an economic downturn in one or more of our markets may impede the ability of our tenants to
make lease payments and may impact our ability to renew leases or re-lease space as leases expire. In addition, an economic downturn or recession could also lead to an increase in tenant
bankruptcies, increases in our overall vacancy rates or declines in rents we can charge to re-lease
properties upon expiration of current leases. In all of these cases, our cash flow would be adversely affected.

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As of December 31, 2004, the Company had six tenants operating under bankruptcy protection, the largest of which is Rhodes Furniture. The leases directly impacted by these
bankruptcy filings totaled approximately 0.5% of our annualized base rent for all leases in which tenants were in occupancy at December 31, 2004. Of this amount, 0.2% relates to properties
within Bradley OP's portfolio. In addition, subsequent to December 31, 2004, one additional tenant, Winn-Dixie Stores Inc. representing 0.3% of our annualized base rent,
filed for bankruptcy protection. None of our locations impacted by Winn-Dixie Stores, Inc.'s bankruptcy filing are within Bradley OP's portfolio.

On
April 1, 2003 Fleming Companies ("Fleming") filed for bankruptcy protection. As part of this bankruptcy, Fleming's motion to reject leases at three of our 13 Fleming store
locations was allowed by the Bankruptcy Court on that date. The three rejected leases aggregated approximately 178,000 square feet and represented approximately 0.6% of total annualized base rent for
all leases in which tenants were in occupancy on March 31, 2003. All of our locations impacted by Fleming's bankruptcy were within Bradley OP's portfolio.

In
June 2003, leases at four of our store locations aggregating 234,000 square feet were assumed by Fleming and assigned to Roundy's, Inc., as part of Roundy's acquisition
of Rainbow Foods. In December 2003, a fifth lease was assumed by Knowlan's Food. A motion filed with the Bankrupcty Court to permit three leases to be assumed by Fleming and assigned to a third
party independent grocer was allowed in September 2004. The two remaining leases, aggregating 95,000 square feet were rejected on March 25, 2004. During the fourth quarter of 2004, we
sold one of the remaining Fleming locations and leased two other Fleming locations to a national tenant. We are actively pursuing tenants to lease the two remaining locations.

Any
future bankruptcies of tenants in our portfolio, particularly major or anchor tenants, may have additional negative impact on our operating results and cash flows.

Long-Term Liquidity Requirements

The long-term liquidity requirements of Heritage and Bradley OP are substantially identical and are referred to together in the discussion below.
These long-term liquidity requirements consist primarily of funds necessary to pay for scheduled debt maturities, renovations, redevelopment, expansions and other non-recurring
capital expenditures that are required periodically to our properties, and the costs associated with acquisitions of properties and third party developer joint venture opportunities that we pursue.

Historically,
we have satisfied our long-term liquidity requirements through various sources of capital, including our existing working capital, cash provided by operations,
long-term property mortgage indebtedness, our credit facility, bridge financing, and through the issuance of debt and equity securities. We believe that these sources of capital will
continue to be available to us in the future to fund our long-term liquidity requirements. In addition, we also intend to pursue additional capital for acquisitions through strategic joint
ventures with institutional investors. Heritage engages in financing and other transactions utilizing these sources of capital exclusively for its subsidiaries', including Bradley OP's, use.

However,
there are certain factors that may have a material adverse effect on our access to these capital sources. Our ability to incur additional debt is dependent upon a number of
factors, including our degree of leverage, the value of our unencumbered assets, our credit rating and borrowing restrictions imposed by existing lenders. Currently, we have a credit rating from three
major rating agenciesStandard & Poor's, which has given us a rating of BBB-, Moody's Investor Service, which has given us a rating of Baa3, and Fitch, which has given
us a rating of BBB-, all three have stated the outlook as stable. A downgrade in outlook or rating by a rating agency can occur at any time if the agency perceives adverse change in our
financial condition, results of operations or ability to service our debt.

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Based
on our internal evaluation of our properties, the estimated value of our properties exceeds the outstanding amount of mortgage debt encumbering those properties as of
December 31, 2004. Therefore, at this time, we believe that additional funds could be obtained, either in the form of mortgage debt or additional unsecured borrowings. In addition, we believe
that we could obtain additional financing without violating the financial covenants contained in our unsecured public notes.

Heritage's
ability to raise funds through the issuance of equity securities is dependent upon, among other things, general market conditions for REITs and market perceptions about us. We
will continue to analyze which source of capital is most advantageous to us at any particular point in time, but the equity markets may not be consistently available on terms that are attractive or at
all.

Environmental Matters

We currently have approximately eighteen properties in our portfolio that are undergoing or have been identified as requiring some form of remediation (including
monitoring for compliance) to clean up contamination. In some cases, contamination has migrated into the groundwater beneath our properties from adjacent properties, such as service stations. In other
cases, contamination has resulted from
on-site uses by current or former owners or tenants, such as gas stations or dry cleaners, which have released pollutants such as gasoline or dry-cleaning solvents into soil
and/or groundwater. Based on our experience with properties in our portfolio, we believe the cost of remediation for contamination resulting from dry-cleaning pollutants will range from
approximately $15,000 to $450,000 per property, and the cost of remediation for contamination from gasoline pollutants will range from approximately $15,000 to $100,000 per property. Any failure to
properly remediate the contamination at our properties may result in liability to federal, state or local governments for damages to natural resources or liability to third parties for property damage
or personal injury and may adversely affect our ability to operate, lease or sell that property.

Of
the approximately eighteen properties cited above, half of those properties were contributed to us by Net Realty Holding Trust, our largest stockholder, upon our formation in
July 1999. These contributed properties (together with approximately ten other contributed properties for which no remediation is currently taking place) are the subject of an indemnity
arrangement under which Net Realty Holding Trust has agreed to indemnify us against environmental liabilities up to $50 million in the aggregate. None of the properties covered by this
indemnity are within Bradley OP's portfolio. Since our formation, we have been reimbursed by Net Realty Holding Trust for approximately $2.1 million of environmental costs pursuant to
this indemnity. Although we do not believe that the aggregate indemnity amount will be needed, we believe that Net Realty Holding Trust has the ability to perform under its indemnity up to the
aggregate amount. In addition, each of the properties for which we are actively pursuing remediation to clean up contamination is covered by this indemnity.

With
respect to the remaining properties cited above not covered by the Net Realty Holding Trust indemnity, no clean-up activities are currently taking place and our
requisite on-going responsibilities are to monitor those properties for compliance and to determine if any remediation or other action may be required in the future. We believe that the
costs of monitoring these properties are not material, individually or in the aggregate, to our, or Bradley OP's financial condition and we have established reserves for such costs.

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Contractual Obligations, Contingent Liabilities, and Off-Balance Sheet Arrangements

The following table summarizes our, including Bradley OP's, repayment obligations under our indebtedness outstanding as of December 31, 2004 (in
thousands):

Debt Analysis

|Property                                             |  | 2005 |         | 2006 |        | 2007 |        | 2008 |         | 2009 |         | Thereafter |         | Total
|---------------------------------------------------- |  | ---- | ------- | ---- | ------ | ---- | ------ | ---- | ------- | ---- | ------- | ---------- | ------- | -----
|
|Mortgage loans payable:                              |  |      |         |      |        |      |        |      |         |      |         |            |         |      
|Franklin Square                                      |  | $    | 13,583  |      |       |      |       |      |        |      |        |            |        |      
|*Williamson Square                                   |  |      | 10,830  |      |       |      |       |      |        |      |        |            |        |      
|Riverchase Village Shopping Center                   |  |      | 9,764   |      |       |      |       |      |        |      |        |            |        |      
|Meridian Village Plaza(1)                            |  |      | 292     |      | 4,841  |      |       |      |        |      |        |            |        |      
|*Spring Mall                                         |  |      | 120     |      | 8,021  |      |       |      |        |      |        |            |        |      
|*Southport Centre                                    |  |      | 160     |      | 171    |      | 9,593  |      |        |      |        |            |        |      
|*Long Meadow Commons(1)(2)                           |  |      | 317     |      | 344    |      | 8,717  |      |        |      |        |            |        |      
|Innes Street Market                                  |  |      | 352     |      | 380    |      | 12,098 |      |        |      |        |            |        |      
|*Southgate Shopping Center                           |  |      | 110     |      | 119    |      | 2,166  |      |        |      |        |            |        |      
|*Salem Consumer Square                               |  |      | 456     |      | 505    |      | 560    |      | 8,763   |      |        |            |        |      
|*St. Francis Plaza                                   |  |      | 191     |      | 207    |      | 225    |      | 243     |      |        |            |        |      
|*Burlington Square(1)                                |  |      | 192     |      | 209    |      | 227    |      | 224     |      | 12,743  |            |        |      
|Buckingham Place(1)                                  |  |      | 63      |      | 69     |      | 74     |      | 79      |      | 5,054   |            |        |      
|County Line Plaza(1)                                 |  |      | 205     |      | 222    |      | 240    |      | 256     |      | 16,002  |            |        |      
|Trinity Commons(1)                                   |  |      | 171     |      | 185    |      | 200    |      | 214     |      | 13,776  |            |        |      
|8 shopping centers, cross collateralized             |  |      | 1,705   |      | 1,843  |      | 1,993  |      | 2,154   |      | 72,132  |            |        |      
|*Montgomery Commons(1)                               |  |      | 79      |      | 86     |      | 94     |      | 100     |      | 102     |            | 7,334   |      
|*Warminster Towne Center(1)                          |  |      | 260     |      | 283    |      | 307    |      | 329     |      | 362     |            | 18,294  |      
|Clocktower Place(1)                                  |  |      | 121     |      | 132    |      | 144    |      | 154     |      | 171     |            | 11,838  |      
|545 Boylston Street and William J. McCarthy Building |  |      | 655     |      | 711    |      | 772    |      | 838     |      | 910     |            | 30,896  |      
|29 shopping centers, cross collateralized            |  |      | 2,520   |      | 2,728  |      | 2,955  |      | 3,147   |      | 3,461   |            | 220,654 |      
|*The Market of Wolf Creek III(1)                     |  |      | 91      |      | 99     |      | 107    |      | 114     |      | 126     |            | 8,168   |      
|Spradlin Farm(1)                                     |  |      | 189     |      | 203    |      | 219    |      | 232     |      | 253     |            | 16,187  |      
|*The Market of Wolf Creek I(1)                       |  |      | 151     |      | 163    |      | 176    |      | 188     |      | 206     |            | 9,327   |      
|*Berkshire Crossing                                  |  |      | 439     |      | 459    |      | 479    |      | 499     |      | 522     |            | 12,125  |      
|*Grand Traverse Crossing                             |  |      | 366     |      | 394    |      | 424    |      | 457     |      | 492     |            | 11,151  |      
|*Salmon Run Plaza(1)                                 |  |      | 319     |      | 349    |      | 381    |      | 417     |      | 456     |            | 2,736   |      
|*Elk Park Center                                     |  |      | 297     |      | 321    |      | 346    |      | 374     |      | 403     |            | 6,503   |      
|*Grand Traverse CrossingWal-Mart                    |  |      | 165     |      | 179    |      | 193    |      | 208     |      | 225     |            | 4,190   |      
|*The Market of Wolf Creek II(1)                      |  |      | 96      |      | 103    |      | 111    |      | 120     |      | 129     |            | 1,428   |      
|Montgomery Towne Center                              |  |      | 382     |      | 393    |      | 307    |      | 335     |      | 364     |            | 5,262   |      
|*Bedford GroveWal-Mart                              |  |      | 152     |      | 164    |      | 178    |      | 191     |      | 207     |            | 3,175   |      
|*Berkshire CrossingHome Depot/Wal-Mart              |  |      | 239     |      | 258    |      | 278    |      | 300     |      | 324     |            | 5,218   |      
|                                                     |  |      |         |      |        |      |        |      |         |      |         |            |         |      
|Total mortgage loans payable                         |  | $    | 45,032  |      | 24,141 |      | 43,564 |      | 19,936  |      | 128,420 |            | 374,486 |      
|                                                     |  |      |         |      |        |      |        |      |         |      |         |            |         |      
|*Unsecured notes payable(3)                          |  |      |        |      | 1,490  |      |       |      | 100,000 |      | 150,000 |            | 200,000 |      
|*Prior line of credit facility(4)                    |  |      | 196,000 |      |       |      |       |      |        |      |        |            |        |      
|                                                     |  |      |         |      |        |      |        |      |         |      |         |            |         |      
|Total indebtedness                                   |  | $    | 241,032 |      | 25,631 |      | 43,564 |      | 119,936 |      | 278,420 |            | 574,486 |      
|                                                     |  |      |         |      |        |      |        |      |         |      |         |            |         |      

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As
of December 31, 2004, the indebtedness described in the table above, including our prior line of credit, required principal amortization and balloon payments, of
$241 million in 2005. On March 29, 2005, we entered into a new line of credit to replace our prior line of credit, as described below under "New Line of Credit." It is likely that we
will not have sufficient funds on hand to repay the remaining balloon amounts at maturity. We currently expect to refinance this debt through unsecured private or public debt offerings, through
additional debt financings secured by individual properties or groups of properties or through additional equity offerings. We may also refinance future balloon payments through borrowings under our
new unsecured credit facility.

As
of December 31, 2004, we (including Bradley OP) have future contractual payment obligations relating to construction contracts, ground leases, and leases for the rental of
office space as follows (in thousands):

|                                                      |  | 2005 |        | 2006 |   | 2007  |  | 2008 |       | 2009 |   | Thereafter |  | Total
|----------------------------------------------------- |  | ---- | ------ | ---- | - | ----- |  | ---- | ----- | ---- | - | ---------- |  | -----
|Construction contracts/tenant improvement obligations |  | $    | 13,828 |      | $ |      |  | $    |      |      | $ |           |  | $    
|Ground leases                                         |  |      | 1,328  |      |   | 1,355 |  |      | 1,445 |      |   | 1,453      |  |      
|Office leases                                         |  |      | 1,029  |      |   | 1,144 |  |      | 1,146 |      |   | 1,149      |  |      
|                                                      |  |      |        |      |   |       |  |      |       |      |   |            |  |      
|Total                                                 |  | $    | 16,185 |      | $ | 2,499 |  | $    | 2,591 |      | $ | 2,602      |  | $    
|                                                      |  |      |        |      |   |       |  |      |       |      |   |            |  |      

We
have obligations under a retirement benefit plan, which are more fully described in the financial statements included within Heritage's Annual Report on Form 10-K, and which
are not included in the above table.

As
of December 31, 2004, Bradley OP and its subsidiaries had future contractual payment obligations relating to construction contracts, ground leases, and leases for the rental of
office space which are separately described below (in thousands):

|                                                      |  | 2005 |       | 2006 |   | 2007 |  | 2008 |     | 2009 |   | Thereafter |  | Total
|----------------------------------------------------- |  | ---- | ----- | ---- | - | ---- |  | ---- | --- | ---- | - | ---------- |  | -----
|Construction contracts/tenant improvement obligations |  | $    | 8,546 |      | $ |     |  | $    |    |      | $ |           |  | $    
|Ground leases                                         |  |      | 161   |      |   | 161  |  |      | 161 |      |   | 161        |  |      
|                                                      |  |      |       |      |   |      |  |      |     |      |   |            |  |      
|Total                                                 |  | $    | 8,707 |      | $ | 161  |  | $    | 161 |      | $ | 161        |  | $    
|                                                      |  |      |       |      |   |      |  |      |     |      |   |            |  |      

We
have various existing service contracts with vendors and utility contracts related to our property management. We enter into these contracts in the ordinary course of business, which
vary based on usage and may extend beyond one year. These contracts are generally for one year or less and include terms that provide for termination with insignificant or no cancellation penalties.

During
the second quarter of 2004, Bradley OP entered into a joint venture agreement with a third party for the development and construction of a shopping center. Under the joint venture
agreement, at any time subsequent to the second anniversary of the completion of the shopping center,

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which
is estimated to occur in the spring of 2006, Bradley OP may be required to purchase the third party's joint venture interest. The purchase price for this interest would be at the estimated fair
market value. This contingent obligation is not reflected in the tables above.

The
repayment obligations reflected in the above tables do not reflect interest payments on debt.

We
have entered into one off-balance sheet arrangement. Heritage and Bradley OP have fully guaranteed the repayment of a $22 million construction loan obtained by the
joint venture from Key Bank, National Association. The Key Bank loan matures in November 2006 (subject to extension). As of December 31, 2004, $13.0 million is outstanding under
the construction loan. Such amount is recorded on the books and records of the joint venture. In the event we are obligated to repay all or a portion of the construction loan pursuant to the
guarantee, we (i) may remove the manager of the joint venture for cause and terminate all agreements with the manager, (ii) would receive a promissory note from the joint venture for the
amount paid by us together with a first priority mortgage on the shopping center, and (iii) may prohibit all distributions from the joint venture or payment of fees by the joint venture until
the principal and accrued interest on the loan is repaid. The estimated fair value of the guarantee as of December 31, 2004 is not material to our financial position. Accordingly, no liability
or additional investment has been recorded related to the fair value of the guarantee.

Prior Line of Credit

On April 29, 2002, the Company entered into a three-year $350 million unsecured line of credit with a group of lenders and Fleet National Bank, as
agent. Our two operating partnerships were the borrowers under the line of credit and we, and certain of our other subsidiaries, guaranteed this line of credit. This line of credit was used
principally to fund growth opportunities and for working capital purposes. At December 31, 2004, $196 million was outstanding under the line of credit. The entire outstanding amount
under this line of credit is shown on the financial statements of Bradley OP.

Under
its terms, this prior line of credit would have matured on April 29, 2005. On March 29, 2005, we entered into a new three-year $400 million unsecured line of
credit with Wachovia Bank, National Association, as agent. Heritage is the borrower under this new line of credit which replaces the prior line of credit. Through our subsidiary, we contributed
approximately $211 million of borrowings we incurred under this new line of credit to Bradley OP, which used those funds to repay the entire outstanding balance under our prior line of credit.
This new line of credit is described below.

New Line of Credit

On March 29, 2005, we entered into a new three-year $400 million unsecured line of credit with a group of lenders and Wachovia Bank, National
Association, as agent, expiring March 28, 2008, subject to a one-year extension. At Heritage's request, this new line of credit may be increased to $500 million. Heritage is the borrower
under this new line of credit and Bradley OP, Heritage OP and certain of our other subsidiaries, have guaranteed this line of credit. This new line of credit replaces our existing line of credit and
will be used principally to fund growth opportunities and for working capital purposes. As of March 29, 2005, $211 million was outstanding under this new line of credit.

Our
ability to borrow under this new line of credit is subject to our ongoing compliance with a number of financial and other covenants. This new line of credit, except under some
circumstances, limits our ability to make distributions in excess of 90% of our annual funds from operations. In addition, this new line of credit bears interest at either the lender's base rate or a
floating rate based on a spread over LIBOR ranging from 62.5 basis points to 115 basis points, depending upon our debt rating. This new line of credit also has a facility fee based on the amount
committed ranging from 15 to 25 basis points, depending upon our debt rating, and requires quarterly payments.

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We
believe we are in compliance with all of the financial covenants under this new line of credit. However, if our properties do not perform as expected, or if unexpected events occur
that require us to borrow additional funds, compliance with these covenants may become difficult and may restrict our ability to pursue some business initiatives. In addition, these financial
covenants may restrict our ability to pursue particular acquisition transactions, including for example, acquiring a portfolio of properties that is highly leveraged. These constraints on acquisitions
could significantly impede our growth.

Debt Offerings

Heritage Notes

Heritage has outstanding two series of unsecured notes. These notes were issued pursuant to the terms of two separate but substantially identical indentures
Heritage entered into with LaSalle Bank National Association, as trustee. These indentures contain various covenants, including covenants that restrict the amount of indebtedness that may be incurred
by Heritage and its subsidiaries. Specifically, for as long as the debt securities issued under these indentures are outstanding:



These
debt securities have been guaranteed by our two operating partnerships, Heritage OP and Bradley OP.

Notes due 2009.On October 15, 2004, Heritage completed the issuance and sale of $150 million principal amount of 4.50% notes
due 2009, or the 2009 Notes. The 2009 Notes bear interest at a rate of 4.50% and mature on October 15, 2009. The 2009 Notes may be redeemed at any time at our option, in whole or in part, at a
redemption price equal to the sum of (1) the principal amount of the notes being redeemed plus accrued interest on the notes to the redemption date and (2) a
make-whole amount, if any, with respect to the notes that is designed to provide yield maintenance protection to the holders of these notes.

In
August 2004, in anticipation of completing an unsecured debt financing, Heritage entered into forward starting interest rate swaps with a total notional amount of
$146.6 million. The purpose of these forward swaps was to mitigate the risk of changes in interest rates prior to the pricing of our debt offering. These forward swaps terminated subsequent to
the pricing of the debt offering and Heritage made a payment to the counterparties of $1.7 million in connection with the termination of these swaps.

Through
a subsidiary, we contributed the net proceeds of the offering of the 2009 Notes to Bradley OP and received an intercompany note from Bradley OP. This intercompany note is
classified as related party notes payable in the accompanying 2004 consolidated balance sheet. All of the net

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proceeds
of the offering of the 2009 Notes were then used by Bradley OP to reduce the outstanding balance under our prior line of credit.

Notes due 2014.On April 1, 2004, Heritage completed the issuance and sale of $200 million principal amount of 5.125% notes
due 2014, or the 2014 Notes. The 2014 Notes bear interest at a rate of 5.125% and mature on April 15, 2014. The 2014 Notes may be redeemed at any time at our option, in whole or in part, at a
redemption price equal to the sum of (1) the principal amount of the notes being redeemed plus accrued interest on the notes to the redemption date and (2) a make-whole
amount, if any, with respect to the notes that is designed to provide yield maintenance protection to the holders of these notes.

In
March 2004, in anticipation of completing an unsecured debt financing, Heritage entered into forward starting interest rate swaps with a total notional amount of
$192.5 million. The purpose of these forward swaps was to mitigate the risk of changes in interest rates prior to the pricing of our debt offering. These forward swaps terminated subsequent to
the pricing of the debt offering and Heritage received a payment from the counterparties of $1.2 million in connection with the termination of these swaps.

Through
a subsidiary, we contributed the net proceeds of the offering of the 2014 Notes to Bradley OP and received an intercompany note from Bradley OP. This intercompany note is
classified as related party notes payable in the accompanying 2004 consolidated balance sheet. All of the net proceeds of the offering of the 2014 Notes were then used by Bradley OP to reduce the
outstanding balance under our prior line of credit.

We
believe we are in compliance with all applicable covenants.

Bradley Notes

Prior to our acquisition of Bradley Real Estate, Inc. ("Bradley"), Bradley OP completed the sale of three series of senior, unsecured debt securities. We
repaid in full one of these series of Bradley OP debt securities upon maturity in November 2004. These debt securities were issued pursuant to the terms of an indenture and three supplemental
indentures entered into by Bradley OP with LaSalle Bank National Association, as trustee, beginning in 1997. The indenture and two supplemental indentures contain various covenants, including
covenants which restrict the amount of indebtedness that may be incurred by Bradley OP and those of our subsidiaries which are owned directly or indirectly by Bradley OP. Specifically, for as long as
these debt securities are outstanding:



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For
purposes of these covenants, any indebtedness incurred by Heritage, Heritage OP or any of the Company's subsidiaries that are owned directly or indirectly by Heritage OP is not
included as indebtedness of Bradley OP.

Notes due 2006.In March 2000, Bradley OP completed the offering of $75 million aggregate principal amount of its 8.875%
Notes due 2006, or the 2006 Notes. The 2006 Notes bear interest at 8.875% per year and mature on March 15, 2006. The 2006 Notes may be redeemed at any time at the option of Bradley OP, in whole
or in part, at a redemption price equal to the sum of (1) the principal amount of the 2006 Notes being redeemed plus accrued interest on the 2006 Notes to the redemption date and (2) a
make-whole amount, if any, with respect to the 2006 Notes that is designed to provide yield maintenance protection to the holders of these notes. In connection with the Bradley
acquisition, we repurchased approximately $73.5 million of the 2006 Notes at a purchase price equal to the principal and accrued interest on the 2006 Notes as of the date of purchase, so that
approximately $1.5 million of the 2006 Notes were outstanding as of December 31, 2004.

Notes due 2008.In January 1998, Bradley OP completed the offering of $100 million aggregate principal amount of its 7.2%
Notes due 2008, or the 2008 Notes. The 2008 Notes bear interest at 7.2% per year and mature on January 15, 2008. The 2008 Notes may be redeemed at any time at the option of Bradley OP, in whole
or in part, at a redemption price equal to the sum of (1) the principal amount of the 2008 Notes being redeemed plus accrued interest on the 2008 Notes to the redemption date and (2) a
make-whole amount, if any, with respect to the 2008 Notes that is designed to provide yield maintenance protection to the holders of these notes.

We
believe Bradley OP is in compliance with all applicable covenants.

Equity Financings

In April 2002, we completed our initial public offering and sold 14,080,556 shares of our common stock at a price of $25.00 per share resulting in net
proceeds to us of $323 million. We used the net proceeds of the IPO to repay outstanding indebtedness. In connection with our IPO, all shares of our Series A Cumulative Convertible
Preferred Stock and redeemable equity then outstanding converted automatically into shares of our common stock on a one for one basis.

In
December 2003, we completed a secondary public offering of our common stock and sold a total of 3,932,736 shares at a net price of $28.27 per share, resulting in net proceeds
to us of $111 million. We used the net proceeds of this offering to repay outstanding indebtedness, including indebtedness of Bradley OP.

Related Party Transactions

We have in the past engaged in and currently engage in a number of transactions with related parties. The following is a summary of ongoing transactions with
related parties that may significantly impact our and Bradley OP's future operating results.

The TJX Companies

In July 1999, Bernard Cammarata became a member of Heritage's board of directors. Mr. Cammarata is Chairman of the Board of TJX
Companies, Inc., Heritage's largest tenant, and was President and Chief Executive Officer of TJX until June 1999. Annualized base rent from the TJX Companies represents approximately
5.5% of our total annualized base rent and 3.3% of Bradley OP's total annualized base rent, for all leases in which tenants were in occupancy at December 31, 2004. TJX pays us and
Bradley OP rent in accordance with 51 written leases at our properties.

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Ahold USA

In July 1999, William M. Vaughn, III became a member of Heritage's board of directors. Mr. Vaughn is Senior Vice President, Labor Relations of Ahold
USA, Inc., the parent company of Giant Foods, Bi-Lo, Bruno's and Stop & Shop. Mr. Vaughn is also a member of the Board of Trustees of Heritage's largest stockholder,
Net Realty Holding Trust. Annualized base rent from Ahold USA and its subsidiary companies represent approximately 0.9% of Heritage's total annualized base rent and none of Bradley OP's total
annualized base rent for all leases in which tenants were in occupancy at December 31, 2004. Ahold USA and its subsidiary companies pay us rent in accordance with 5 written leases at our
properties. Subsequent to December 31, 2004, Ahold USA sold Bi-Lo and Bruno's representing $0.9 million of annualized base rent in 2004.

131 Dartmouth Street Joint Venture

In November 1999, Heritage entered into a joint venture with NETT for the acquisition and development of a 365,000 square foot commercial office building
at 131 Dartmouth Street, Boston,
Massachusetts. This joint venture is owned 94% by NETT and 6% by Heritage. Heritage was issued this interest as part of a management arrangement with the joint venture pursuant to which Heritage
manages the building. Heritage has no ongoing capital contribution requirements with respect to this office building, which was completed in January 2003. The first tenants began occupying this
office building in January 2004. Heritage accounts for its interest in this joint venture using the cost method and Heritage has not expended any amounts on the office building through
December 31, 2004.

In
February 2004, Heritage entered into an eleven-year lease with its joint venture with NETT for the lease of approximately 31,000 square feet of space and Heritage
moved its corporate headquarters to this space during the first quarter of 2004. Under the terms of this lease, which were negotiated on an arms-length basis, Heritage began paying rent to
the joint venture in February 2005. Heritage pays $1.1 million per year in minimum rent through 2009 and $1.2 million per year from 2010 through 2014.

Boston Office Lease

In 1974, NETT and Net Realty Holding Trust entered into an agreement providing for the lease by NETT of 14,400 square feet of space in an office building at 535
Boylston Street for its Boston offices. Net Realty Holding Trust assigned this lease to Heritage as part of its formation. The current term of this lease expires on March 31, 2005 and under
this lease, NETT pays us $648,000 per year in minimum rent. NETT has informed us that they are not renewing this lease.

Contingencies

Legal and Other Claims

We are subject to legal and other claims incurred in the normal course of business. Based on our review and consultation with counsel of those matters known to
exist, including those matters described on page 41, we do not believe that the ultimate outcome of these claims would materially affect our financial position or results of operations.

Recourse Loan Guarantees

In addition to our unsecured line of credit and unsecured debt securities we and Bradley OP have issued, we and Bradley OP have fully guaranteed the
repayment of a $22 million construction loan obtained by our Lakes Crossing joint venture from Key Bank, National Association. The Key Bank loan matures in November 2006 (subject to
extension).

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Non-Recourse Loan Guarantees

In connection with the Bradley acquisition, Heritage OP entered into a special securitized facility with Prudential Mortgage Capital Corporation ("PMCC") pursuant
to which $244 million of collateralized mortgage-backed securities were issued by a trust created by PMCC. The trust consists of a single mortgage loan due from a subsidiary we created,
Heritage SPE LLC, to which we contributed 29 of our properties. This loan is secured by all 29 properties we contributed to the borrower.

In
connection with the securitized financing with PMCC, we entered into several indemnification and guaranty agreements with PMCC under the terms of which we agreed to indemnify PMCC for
various bad acts of Heritage SPE LLC and with respect to specified environmental liabilities with respect to the properties contributed by us to Heritage SPE LLC.

We
also have agreed to indemnify other mortgage lenders for bad acts and environmental liabilities in connection with other mortgage loans that we have obtained.

Inflation

Inflation has had a minimal impact on the operating performance of our properties. However, many of our leases contain provisions designed to mitigate the adverse
impact of inflation. These provisions include clauses enabling us to receive payment of additional rent calculated as a percentage of tenants' gross sales above pre-determined thresholds,
which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. These escalation clauses often are at fixed rent increases or
indexed escalations (based on the consumer price index or other measures). Many of our leases are also for terms of less than ten years, which permits
us to seek to increase rents to market rates upon renewal. In addition, most of our leases require the tenant to pay an allocable share of operating expenses, including common area maintenance costs,
real estate taxes and insurance. This reduces our exposure to increases in costs and operating expenses resulting from inflation.

New Accounting Standards

In December 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 123R, Share-Based
Compensation("SFAS No. 123R"). SFAS No. 123R supersedes APB Opinion No. 25,Accounting for
Stock Issued to Employees, and amends SFAS No. 95,Statement of Cash Flows. Statement No. 123R requires all
share-based payments to employees, including grants of employee stock options, to be recorded as an expense based on their fair values. The grant-date fair value of employee share options
and similar instruments will be estimated using an option-pricing model adjusted for any unique characteristics of a particular instrument. If an equity award is modified after the grant date,
incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification.
The Company does not expect the adoption of SFAS No. 123R to have a material impact on the Company's results of operations, financial position, or liquidity.

In
December 2004, the FASB issued SFAS No. 153,Exchange of Nonmonetary Assets, an amendment of APB Opinion No. 29,
("SFAS No. 153"). The amendments made by SFAS No. 153 are based on the principle that exchanges of nonmonetary assets should be measured on the fair value of assets exchanged. SFAS
No. 153 eliminates the exception for nonmonetary exchanges of similar productive assets and replaces it with a broader exception for exchanges of nonmonetary assets that do not have commercial
substance. SFAS No. 153 is effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. The Company does not expect the adoption of SFAS No. 153
to have a material impact on the Company's results of operations, financial position, or liquidity.

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Net Operating Income

Net operating income, or "NOI," is a non-GAAP financial measure equal to net income available to common shareholders (the most directly comparable
GAAP financial measure), plus accretion of redeemable equity, preferred stock distributions, income allocated to minority interests in Bradley OP, net derivative losses (gains), losses from prepayment
of debt, general and administrative expense, depreciation and amortization, and interest expense, less income from discontinued
operations, gains (losses) on sales of real estate investments, interest and other income, preferred stock distributions and accretion of redeemable equity.

We
use NOI internally, and believe NOI provides useful information to investors, as a performance measure in evaluating the operating performance of our real estate assets. This is
because NOI reflects only those income and expense items that are incurred at the property level and excludes certain components from net income in order to provide results that are more closely
related to a property's results of operations. Our presentation of NOI may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to obtain a clear
understanding of our operating results, NOI should be examined in conjunction with net income as presented in our consolidated financial statements. NOI should not be considered as an alternative to
net income as an indication of our performance or to cash flows as a measure of liquidity or ability to make distributions.

The
following sets forth a reconciliation of Bradley OP's NOI (excluding NOI attributable to Heritage and its other subsidiaries) to net income available to common unitholders for the
fiscal years 2000 through 2004 (dollars in thousands).

|                                              |                                           | Years ended December 31,
|--------------------------------------------- | ----------------------------------------- | ------------------------
|
|Net operating income                          |                                           | $                       
|Add:                                          |                                           |                         
|                                              | Interest and other                        |                         
|                                              | Gains on sales of real estate investments |                         
|                                              | Income from discontinued operations       |                         
|                                              | Gains on sales of discontinued operations |                         
|                                              | Net derivative gains                      |                         
|Deduct:                                       |                                           |                         
|                                              | Depreciation and amortization             |                         
|                                              | Interest                                  |                         
|                                              | General and administrative                |                         
|                                              | Loss on prepayment of debt                |                         
|                                              | Net derivative losses                     |                         
|                                              |                                           |                         
|Net income                                    |                                           |                         
|Deduct:                                       |                                           |                         
|                                              | Preferred stock distributions             |                         
|                                              |                                           |                         
|Net income attributable to common unitholders |                                           | $                       
|                                              |                                           |                         

Item 7A: Quantitative and Qualitative Disclosures About Market Risk

Market risk is the exposure to loss resulting from adverse changes in market prices, interest rates, foreign currency exchange rates, commodity prices and equity
prices. The primary market risk to which we are exposed is interest rate risk, which is sensitive to many factors, including governmental monetary and tax policies, domestic and international economic
and political considerations and other factors

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that
are beyond our control. Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevalent market interest rates.

The
following table presents our fixed rate debt obligations, at their carrying values, sorted by maturity date and our variable rate debt obligations sorted by maturity date (in
thousands):

|                |  | 2005 |         | 2006 |   | 2007   |  | 2008 |        | 2009 |   | 2010+   |  | Total |         | Estimated
Fair Value |   | Weighted
Average
Interest
Rate
|--------------- |  | ---- | ------- | ---- | - | ------ |  | ---- | ------ | ---- | - | ------- |  | ----- | ------- | -------------------- | - | ------------------------------
|Secured Debt:   |  |      |         |      |   |        |  |      |        |      |   |         |  |       |         |                      |   |                               
|Fixed rate      |  | $    | 44,593  |      | $ | 23,682 |  | $    | 43,085 |      | $ | 19,437  |  | $     | 127,898 |                      | $ | 362,361                       
|Variable rate   |  |      | 439     |      |   | 459    |  |      | 479    |      |   | 499     |  |       | 522     |                      |   | 12,125                        
|Unsecured Debt: |  |      |         |      |   |        |  |      |        |      |   |         |  |       |         |                      |   |                               
|Fixed rate      |  |      |        |      |   | 1,490  |  |      |       |      |   | 100,000 |  |       | 150,000 |                      |   | 200,000                       
|Variable rate   |  |      | 196,000 |      |   |       |  |      |       |      |   |        |  |       |        |                      |   |                              
|                |  |      |         |      |   |        |  |      |        |      |   |         |  |       |         |                      |   |                               
|Total           |  | $    | 241,032 |      | $ | 25,631 |  | $    | 43,564 |      | $ | 119,936 |  | $     | 278,420 |                      | $ | 574,486                       
|                |  |      |         |      |   |        |  |      |        |      |   |         |  |       |         |                      |   |                               

If market rates of interest on our variable rate debt outstanding at December 31, 2004 increase by 10%, or 36 basis points, the increase in
interest expense would decrease future earnings and cash flows by $0.8 million annually.

The
following table presents Bradley OP's fixed rate debt obligations, at their carrying values, sorted by maturity date and Bradley OP's variable rate debt obligations sorted by
maturity date (in thousands):

|                |  | 2005 |         | 2006 |   | 2007   |  | 2008 |        | 2009 |   | 2010+   |  | Total |         | Estimated
Fair Value |   | Weighted
Average
Interest
Rate
|--------------- |  | ---- | ------- | ---- | - | ------ |  | ---- | ------ | ---- | - | ------- |  | ----- | ------- | -------------------- | - | ------------------------------
|Secured Debt:   |  |      |         |      |   |        |  |      |        |      |   |         |  |       |         |                      |   |                               
|Fixed rate      |  | $    | 14,591  |      | $ | 11,975 |  | $    | 24,083 |      | $ | 12,028  |  | $     | 15,775  |                      | $ | 77,524                        
|Variable rate   |  |      | 439     |      |   | 459    |  |      | 479    |      |   | 499     |  |       | 522     |                      |   | 12,125                        
|Unsecured Debt: |  |      |         |      |   |        |  |      |        |      |   |         |  |       |         |                      |   |                               
|Fixed rate      |  |      |        |      |   | 1,490  |  |      |       |      |   | 100,000 |  |       | 150,000 |                      |   | 200,000                       
|Variable rate   |  |      | 196,000 |      |   |       |  |      |       |      |   |        |  |       |        |                      |   |                              
|                |  |      |         |      |   |        |  |      |        |      |   |         |  |       |         |                      |   |                               
|Total           |  | $    | 211,030 |      | $ | 13,924 |  | $    | 24,562 |      | $ | 112,527 |  | $     | 166,297 |                      | $ | 289,649                       
|                |  |      |         |      |   |        |  |      |        |      |   |         |  |       |         |                      |   |                               

If market rates of interest on Bradley OP's variable rate debt outstanding at December 31, 2004 increase by 10%, or 36 basis points, the
increase in interest expense would decrease future earnings and cash flows by $0.8 million annually.

We
were not a party to any hedging agreements with respect to our floating rate debt as of December 31, 2004. We have, in the past, used derivative financial instruments to
manage, or hedge, interest rate risks related to our borrowings, from lines of credit to medium-and long-term financings. We require that hedging derivative instruments be
effective in reducing the interest rate risk exposure that they are designed to hedge. We do not use derivatives for trading or speculative purposes and only enter into contracts with major financial
institutions based on their credit rating and other factors. We do not believe that the interest rate risk represented by our floating rate debt is material as of December 31, 2004 in relation
to total assets and our total market capitalization.

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Item 8: Financial Statements

See "Index to Consolidated Financial Statements and Financial Statement Schedule" on page F-1 of this Form 10-K.

Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A: Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out by Bradley OP's management, with the participation of the Chief Executive Officer and Chief Financial Officer of Heritage, of the
effectiveness of Bradley OP's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this
report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of the end of the period covered
by this report.

Changes in Internal Control over Financial Reporting

No change in Bradley OP's internal controls over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934)
occurred during the fourth quarter of our fiscal year ended December 31, 2004 that has materially affected, or is reasonably likely to materially affect, Bradley OP's internal control over
financial reporting.

Item 9B: Other Information

None.

PART III

Note: Heritage Property Investment Trust, Inc. is the sole stockholder of the sole general partner of Bradley Operating Limited Partnership. Information
with respect to the directors and officers of Heritage Property Investment Trust, Inc. is contained in various portions of Heritage Property Investment Trust, Inc.'s Proxy Statement for
its 2005 Annual Meeting of Stockholders and is incorporated herein (as set forth below) pursuant to the provisions of General Instruction G(1) to Form S-K and
Rule 12b-23.

Item 10: Directors and Executive Officers of the Registrant

Except as set forth below, the information contained in the sections captioned "Proposal One: Election of Directors," "Executive Compensation" and
"Section 16(a) Beneficial Ownership Reporting Compliance" of Heritage Property Investment Trust, Inc.'s Proxy Statement for the 2005 Annual Meeting of Stockholders is incorporated herein
by reference.

No
directors or officers of Heritage Property Investment Trust, Inc. beneficially own any LP Units.

Item 11: Executive Compensation

The information contained in the sections captioned "Proposal One: Election of Directors" and "Executive Compensation" of Heritage Property Investment
Trust, Inc.'s Proxy Statement for the 2005 Annual Meeting of Stockholders is incorporated herein by reference.

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Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information contained in the section captioned "Security Ownership of Certain Beneficial Owners and Management" of Heritage Property Investment
Trust, Inc.'s Proxy Statement for the 2005 Annual Meeting of Stockholders is incorporated herein by reference.

Item 13: Certain Relationships and Related Transactions

The information contained in the section captioned "Certain Relationships and Related Transactions" of Heritage Property Investment Trust, Inc.'s Proxy
Statement for the 2005 Annual Meeting of Stockholders is incorporated herein by reference.

Item 14: Principal Accounting Fees and Services

The information contained in the section captioned "Principal Accounting Fees and Services" of Heritage Property Investment Trust, Inc.'s Proxy Statement
for the 2005 Annual Meeting of Stockholders is incorporated herein by reference.

67

---





PART IV

Item 15: Exhibits and Financial Statement Schedules

See page F-1 for the index of the financial statements included in the Form 10-K.

Financial Statement Schedule.

See page F-1 for the index of the financial statement schedule included in the Form 10-K.

Exhibits.

|3.1  |  | Second Amended and Restated Agreement of Limited Partnership of Bradley Operating Limited Partnership dated as of September 2, 1997(1)                                                                                                                                                                            
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.2  |  | Amendment, dated as of September 18, 2000, to Second Restated Agreement of Limited Partnership of Bradley Operating Limited Partnership(1)                                                                                                                                                                        
|3.3  |  | Amendment, dated as of April 29, 2002, to Second Restated Agreement of Limited Partnership of Bradley Operating Limited Partnership(1)                                                                                                                                                                            
|3.4  |  | Amendment, dated as of May 17, 2002, to Second Restated Agreement of Limited Partnership of Bradley Operating Limited Partnership(2)                                                                                                                                                                              
|3.5  |  | Articles of Amendment and Restatement (Third) of Heritage Property Investment Trust, Inc.(1)                                                                                                                                                                                                                      
|3.6  |  | Amended and Restated Bylaws of Heritage Property Investment Trust, Inc.(1)                                                                                                                                                                                                                                        
|4.1  |  | Indenture, dated as of November 24, 1997, by and between Bradley Operating Limited Partnership and LaSalle Bank National Association relating to the Senior Debt Securities of Bradley Operating Limited Partnership(1)                                                                                           
|4.2  |  | Supplemental Indenture No. 2, dated as of January 28, 1998, between Bradley Operating Limited Partnership and LaSalle Bank National Association(1)                                                                                                                                                                
|4.3  |  | Supplemental Indenture No. 3, dated as of March 10, 2000, between Bradley Operating Limited Partnership and LaSalle Bank National Association(1)                                                                                                                                                                  
|4.4  |  | Supplemental Indenture No. 4, dated as of May, 2004, between Bradley Operating Limited Partnership and LaSalle Bank National Association(3)                                                                                                                                                                       
|4.5  |  | Indenture, dated as of April 1, 2004, by and between Heritage Property Investment Trust, Inc., Heritage Property Investment Limited Partnership, Bradley Operating Limited Partnership and LaSalle Bank National Association
relating to 5.125% Notes due 2014 of Heritage Property Investment Trust, Inc.(3)     
|4.6  |  | Form of 5.125% Note due 2014 (Included in Exhibit 4.6)(3)                                                                                                                                                                                                                                                         
|4.7  |  | Guarantee of 5.125% Notes due 2014, dated as of April 1, 2004, by Heritage Property Investment Limited Partnership(3)                                                                                                                                                                                             
|4.8  |  | Guarantee of 5.125% Notes due 2014, dated as of April 1, 2004, by Bradley Operating Limited Partnership(3)                                                                                                                                                                                                        
|4.9  |  | Registration Rights Agreement, dated as of April 1, 2004, by and between Heritage Property Investment Trust, Inc., Heritage Property Investment Limited Partnership, Bradley Operating Limited Partnership and the Initial
Purchasers relating to 5.125% Notes due 2014 and Guarantees of 5.125% Notes due 2014(3)
|4.10 |  | Indenture, dated as of October 15, 2004, by and between Heritage Property Investment Trust, Inc,, Heritage Property Investment Limited Partnership, Bradley Operating Limited Partnership and LaSalle Bank National
Association relating to 4.50% Notes due 2009 of Heritage Property Investment Trust, Inc.(4)   
|4.11 |  | Form of 4.50% Note due 2009 (Included in Exhibit 4.10)                                                                                                                                                                                                                                                            
|4.12 |  | Guarantee of 4.50% Notes due 2009, dated as of October 15, 2004, by Heritage Property Investment Limited Partnership(4)                                                                                                                                                                                           
|     |  |                                                                                                                                                                                                                                                                                                                   

68

---



|4.13 |  | Guarantee of 4.50% Notes due 2009, dated as of October 15, 2004, by Bradley Operating Limited Partnership(4)                                                                                                                                                                                                                                                                                                                                                                                                             
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.16 |  | Registration Rights Agreement, dated as of October 15, 2004, by and between Heritage Property Investment Trust, Inc., Heritage Property Investment Limited Partnership, Bradley Operating Limited Partnership and the Initial
Purchasers relating to 4.50% Notes due 2009 and Guarantees of 4.50% Notes due 2009(4)                                                                                                                                                                                                      
|10.1 |  | Credit Agreement, dated as of March 29, 2005 by and among Heritage Property Investment Trust, Inc., Wachovia Capital Markets, LLC, as Arranger, Wachovia Bank, National Association, as Agent, each of
Deutsche Bank Trust Company Americas and Key Bank National Association, as Syndication Agents, each of Bank of America, National Association and Commerzbank Aktiengesellschaft, New York Branch, as Documentation Agents, and each of the financial
institutions initially a signatory to the Credit Agreement(5)
|21.1 |  | List of Subsidiaries of the Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|23.1 |  | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|31.1 |  | Certification of Chief Executive Officer of Heritage Property Investment Trust, Inc. Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a)                                                                                                                                                                                                                                                                                                                                                                   
|31.2 |  | Certification of Chief Financial Officer of Heritage Property Investment Trust, Inc. Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a)                                                                                                                                                                                                                                                                                                                                                                   
|32.1 |  | Chief Executive Officer's Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2003.                                                                                                                                                                                                                                                                                                                                                                        
|32.2 |  | Chief Financial Officer's Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2003.                                                                                                                                                                                                                                                                                                                                                                        

---

Reports on Form 8-K.

On November 2, 2004, Bradley OP furnished to the Securities and Exchange Commission under Item 12 of Form 8-K a copy of Heritage
Property Investment Trust's Press Release, dated November 2, 2004, as well as supplemental operating and financial data regarding Heritage Property Investment Trust, Inc. for the third
quarter of 2004.

69

---





SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on
Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

| |  | BRADLEY OPERATING LIMITED PARTNERSHIP
| |  | -------------------------------------
| |  | By:                                  
| |  | By:                                  

Dated:
March 31, 2005

Pursuant
to the requirements of the Securities Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons in the capacities and on the
dates indicated:

|Signature                                     |  | Title                                                                                         |  | Date          
|--------------------------------------------- |  | --------------------------------------------------------------------------------------------- |  | --------------
|                                              |  |                                                                                               |  |               
|/s/THOMAS C. PRENDERGASTThomas C. Prendergast |  | President and Chief Executive Officer, Director (principal executive officer)                 |  | March 31, 2005
|/s/DAVID G. GAWDavid G. Gaw                   |  | Senior Vice President, Chief Financial Officer and Treasurer (principal financial officer)    |  | March 31, 2005
|/s/PATRICK H. O'SULLIVANPatrick H. O'Sullivan |  | Vice President, Finance and Accounting and Assistant Treasurer (principal accounting officer) |  | March 31, 2005
|/s/JOSEPH L. BARRYJoseph L. Barry             |  | Director                                                                                      |  | March 31, 2005
|/s/BERNARD CAMMARATABernard Cammarata         |  | Director                                                                                      |  | March 31, 2005
|/s/RICHARD C. GARRISONRichard C. Garrison     |  | Director                                                                                      |  | March 31, 2005
|/s/MICHAEL J. JOYCEMichael J. Joyce           |  | Director                                                                                      |  | March 31, 2005
|/s/DAVID W. LAUGHTONDavid W. Laughton         |  | Director                                                                                      |  | March 31, 2005
|                                              |  |                                                                                               |  |               

70

---



|/s/KEVIN C. PHELANKevin C. Phelan                 |  | Director |  | March 31, 2005
|------------------------------------------------- |  | -------- |  | --------------
|/s/KENNETH K. QUIGLEY, JR.Kenneth K. Quigley, Jr. |  | Director |  | March 31, 2005
|/s/RICH REARDONRich Reardon                       |  | Director |  | March 31, 2005
|/s/WILLIAM M. VAUGHNWilliam M. Vaughn             |  | Director |  | March 31, 2005
|/s/ROBERT J. WATSONRobert J. Watson               |  | Director |  | March 31, 2005

71

---





BRADLEY OPERATING LIMITED PARTNERSHIP        Index to Consolidated Financial Statements

|Report of Independent Registered Public Accounting Firm |  | F-2    
|------------------------------------------------------- |  | -------
|Consolidated Balance Sheets                             |  | F-3    
|Consolidated Statements of Operations                   |  | F-4    
|Consolidated Statements of Changes in Partners' Capital |  | F-5    
|Consolidated Statements of Cash Flows                   |  | F-6    
|Notes to Consolidated Financial Statements              |  | F-7    
|Financial Statement ScheduleSchedule III               |  | S-III-1

F-1

---





Report of Independent Registered Public Accounting Firm

The
Board of Directors and Shareholders of Heritage Property Investment Trust, Inc.
and Unitholders of Bradley Operating Limited Partnership:

We
have audited the accompanying consolidated balance sheets of Bradley Operating Limited Partnership and subsidiaries (the Operating Partnership), a majority-owned subsidiary of
Heritage Property Investment Trust, Inc., as of December 31, 2004 and 2003, and the related consolidated statements of operations, changes in partners' capital, and cash flows for each
of the years in the three-year period ended December 31, 2004. In connection with our audits of the consolidated financial statements, we have also audited the accompanying
financial statement schedule III. These consolidated financial statements and financial statement schedule are the responsibility of the Operating Partnership's management. Our responsibility
is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Operating Partnership as of
December 31, 2004 and 2003, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2004, in conformity with
U.S. generally accepted accounting principles. Also in our opinion, the financial statement schedule III, when considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth therein.

/s/
KPMG LLP

Boston,
Massachusetts
March 29, 2005

F-2

---





BRADLEY OPERATING LIMITED PARTNERSHIP        Consolidated Balance Sheets        (Dollars in thousands, except per-unit data)

|                                                                                                                                           |                                                                                                          | December 31,                           
|------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------- | ---------------------------------------
|
|Assets                                                                                                                                     |                                                                                                          |                                        
|Real estate investments, net                                                                                                               |                                                                                                          | $                                      
|Cash and cash equivalents                                                                                                                  |                                                                                                          |                                        
|Accounts receivable, net of allowance for doubtful accounts of $5,626 and $4,243 at December 31, 2004 and 2003, respectively               |                                                                                                          |                                        
|Intercompany advances                                                                                                                      |                                                                                                          |                                        
|Prepaids and other assets                                                                                                                  |                                                                                                          |                                        
|Investment in unconsolidated joint venture                                                                                                 |                                                                                                          |                                        
|Deferred financing and leasing costs                                                                                                       |                                                                                                          |                                        
|                                                                                                                                           |                                                                                                          |                                        
|                                                                                                                                           |                                                                                                          | Total assets                           
|                                                                                                                                           |                                                                                                          |                                        
|Liabilities and Partners' Capital                                                                                                          |                                                                                                          |                                        
|Liabilities:                                                                                                                               |                                                                                                          |                                        
|                                                                                                                                           | Mortgage loans payable                                                                                   |                                        
|                                                                                                                                           | Unsecured notes payable                                                                                  |                                        
|                                                                                                                                           | Line of credit facility                                                                                  |                                        
|                                                                                                                                           | Related party notes payable                                                                              |                                        
|                                                                                                                                           | Accrued expenses and other liabilities                                                                   |                                        
|                                                                                                                                           | Accrued distributions                                                                                    |                                        
|                                                                                                                                           |                                                                                                          |                                        
|                                                                                                                                           |                                                                                                          | Total liabilities                      
|                                                                                                                                           |                                                                                                          |                                        
|Minority interest                                                                                                                          |                                                                                                          |                                        
|                                                                                                                                           |                                                                                                          |                                        
|Redeemable partnership units; 522,044 and 340,270 common units outstanding at redemption value at December 31, 2004 and 2003, respectively |                                                                                                          |                                        
|Redeemable Series B Preferred Units (liquidation preference $25.00 per unit); 2,000,000 units issued and outstanding at December 31, 2003  |                                                                                                          |                                        
|Redeemable Series C Preferred Units (liquidation preference $25.00 per unit); 1,000,000 units issued and outstanding at December 31, 2003  |                                                                                                          |                                        
|Partners' capital:                                                                                                                         |                                                                                                          |                                        
|                                                                                                                                           | General partner; 32,568,441 and 32,560,627 units outstanding at December 31, 2004 and 2003, respectively |                                        
|                                                                                                                                           | Limited partner; 1,219,782 units outstanding                                                             |                                        
|                                                                                                                                           |                                                                                                          |                                        
|                                                                                                                                           |                                                                                                          | Total partners' capital                
|                                                                                                                                           |                                                                                                          |                                        
|                                                                                                                                           |                                                                                                          | Total liabilities and partners' capital
|                                                                                                                                           |                                                                                                          |                                        

See
accompanying notes to consolidated financial statements.

F-3

---





BRADLEY OPERATING LIMITED PARTNERSHIP        Consolidated Statements of Operations        (In thousands, except per-unit data)

|                                            |                                                                       | Year ended December 31,                                                           |       
|------------------------------------------- | --------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ------
|
|Revenue:                                    |                                                                       |                                                                                   |       
|                                            | Rentals and recoveries                                                |                                                                                   | $     
|                                            | Interest and other                                                    |                                                                                   |       
|                                            |                                                                       |                                                                                   |       
|                                            |                                                                       | Total revenue                                                                     |       
|                                            |                                                                       |                                                                                   |       
|Expenses:                                   |                                                                       |                                                                                   |       
|                                            | Property operating expenses                                           |                                                                                   |       
|                                            | Real estate taxes                                                     |                                                                                   |       
|                                            | Depreciation and amortization                                         |                                                                                   |       
|                                            | Interest                                                              |                                                                                   |       
|                                            | General and administrative                                            |                                                                                   |       
|                                            | Loss on prepayment of debt                                            |                                                                                   |       
|                                            |                                                                       |                                                                                   |       
|                                            |                                                                       | Total expenses                                                                    |       
|                                            |                                                                       |                                                                                   |       
|                                            |                                                                       | Income before net derivative losses and gains on sales of real estate investments |       
|Net derivative losses                       |                                                                       |                                                                                   |      
|Gains on sales of real estate investments   |                                                                       |                                                                                   | 28    
|                                            |                                                                       |                                                                                   |       
|                                            |                                                                       | Income before discontinued operations                                             |       
|Discontinued operations:                    |                                                                       |                                                                                   |       
|                                            | Operating income from discontinued operations                         |                                                                                   |       
|                                            | Gains on sales of discontinued operations                             |                                                                                   |       
|                                            |                                                                       |                                                                                   |       
|                                            | Income from discontinued operations                                   |                                                                                   |       
|                                            |                                                                       |                                                                                   |       
|                                            |                                                                       | Net income                                                                        |       
|Preferred distributions                     |                                                                       |                                                                                   | (2,176
|                                            |                                                                       |                                                                                   |       
|                                            |                                                                       | Net income attributable to common unitholders                                     |       
|                                            |                                                                       |                                                                                   |       
|Basic and diluted earnings per common unit: |                                                                       |                                                                                   |       
|                                            | Income available to common unitholders before discontinued operations |                                                                                   | $     
|                                            | Income from discontinued operations                                   |                                                                                   |       
|                                            | Income available to common unitholders                                |                                                                                   | $     
|                                            |                                                                       |                                                                                   |       
|                                            | Weighted average common units outstanding                             |                                                                                   |       
|                                            |                                                                       |                                                                                   |       

F-4

---





BRADLEY OPERATING LIMITED PARTNERSHIP        Consolidated Statement of Changes in Partners' Capital        (In thousands, except per-unit data)

|                             |                                                                        | General
Partner              |                                                                                                  | Limited
Partner                  |   | Accumulated
Other
Comprehensive
Income (Loss) |        | Total |       
|---------------------------- | ---------------------------------------------------------------------- | ---------------------------- | ------------------------------------------------------------------------------------------------ | -------------------------------- | - | --------------------------------------------- | ------ | ----- | ------
|Balance at December 31, 2001 |                                                                        | $                            | 419,663                                                                                          |                                  | $ | 23,129                                        |        | $     | (8,742
|                             | Net income attributable to common unitholders                          |                              |                                                                                                  | 6,832                            |   |                                               | 297    |       |       
|                             | Other comprehensive income:                                            |                              |                                                                                                  |                                  |   |                                               |        |       |       
|                             |                                                                        | Unrealized derivative gains: |                                                                                                  |                                  |   |                                               |        |       |       
|                             |                                                                        |                              | Effective portion of interest rate collar for the period from Jan. 1, 2002-Apr. 29, 2002         |                                  |   |                                              |        |       |      
|                             |                                                                        |                              | Reclassification adjustment to earnings for realized loss on termination of interest rate collar |                                  |   |                                              |        |       |      
|                             |                                                                        |                              |                                                                                                  |                                  |   |                                               |        |       |       
|                             |                                                                        |                              |                                                                                                  | Total other comprehensive income |   |                                               |       |       |       
|                             |                                                                        |                              |                                                                                                  |                                  |   |                                               |        |       |       
|                             |                                                                        |                              |                                                                                                  | Comprehensive income             |   |                                               |        |       |       
|                             |                                                                        |                              |                                                                                                  |                                  |   |                                               |        |       |       
|                             | Capital contributions                                                  |                              |                                                                                                  | 227,916                          |   |                                               |       |       |       
|                             | Distributions ($2.12 per unit)                                         |                              |                                                                                                  | (61,094                          | ) |                                               | (2,583 | )     |       
|                             | Adjustment to reflect redeemable partnership units at redemption value |                              |                                                                                                  | (354                             | ) |                                               | (15    | )     |       
|                             |                                                                        |                              |                                                                                                  |                                  |   |                                               |        |       |       
|Balance at December 31, 2002 |                                                                        |                              | 592,963                                                                                          |                                  |   | 20,828                                        |        |       |      
|                             |                                                                        |                              |                                                                                                  |                                  |   |                                               |        |       |       
|                             | Net income attributable to common unitholders                          |                              |                                                                                                  | 29,742                           |   |                                               | 1,114  |       |       
|                             | Capital contributions                                                  |                              |                                                                                                  | 9,877                            |   |                                               |       |       |       
|                             | Distributions ($2.10 per unit)                                         |                              |                                                                                                  | (67,662                          | ) |                                               | (2,562 | )     |       
|                             | Adjustment to reflect redeemable partnership units at redemption value |                              |                                                                                                  | (1,582                           | ) |                                               | (60    | )     |       
|                             |                                                                        |                              |                                                                                                  |                                  |   |                                               |        |       |       
|Balance at December 31, 2003 |                                                                        |                              | 563,338                                                                                          |                                  |   | 19,320                                        |        |       |      
|                             |                                                                        |                              |                                                                                                  |                                  |   |                                               |        |       |       
|                             | Net income attributable to common unitholders                          |                              |                                                                                                  | 25,596                           |   |                                               | 960    |       |       
|                             | Distributions ($2.10 per unit)                                         |                              |                                                                                                  | (68,382                          | ) |                                               | (2,561 | )     |       
|                             | Conversion of redeemable partnership units                             |                              |                                                                                                  | 171                              |   |                                               |       |       |       
|                             | Adjustment to reflect redeemable partnership units at redemption value |                              |                                                                                                  | (1,574                           | ) |                                               | (59    | )     |       
|                             |                                                                        |                              |                                                                                                  |                                  |   |                                               |        |       |       
|Balance at December 31, 2004 |                                                                        | $                            | 519,149                                                                                          |                                  | $ | 17,660                                        |        | $     |      
|                             |                                                                        |                              |                                                                                                  |                                  |   |                                               |        |       |       

See
accompanying notes to consolidated financial statements.

F-5

---





BRADLEY OPERATING LIMITED PARTNERSHIP        Consolidated Statement of Cash Flows        (In thousands)

|                                      |                                                                                   | Year Ended December 31,                              |                                          
|------------------------------------- | --------------------------------------------------------------------------------- | ---------------------------------------------------- | -----------------------------------------
|
|Cash flows from operating activities: |                                                                                   |                                                      |                                          
|                                      | Net income                                                                        |                                                      | $                                        
|                                      | Adjustments to reconcile net income to net cash provided by operating activities: |                                                      |                                          
|                                      |                                                                                   | Depreciation and amortization                        |                                          
|                                      |                                                                                   | Amortization of deferred financing costs             |                                          
|                                      |                                                                                   | Net derivative losses                                |                                          
|                                      |                                                                                   | Loss on repayment of debt                            |                                          
|                                      |                                                                                   | Amortization of debt premiums                        |                                          
|                                      |                                                                                   | Gain on sale of real estate investments              |                                          
|                                      |                                                                                   | Changes in operating assets and liabilities          |                                          
|                                      |                                                                                   |                                                      |                                          
|                                      |                                                                                   |                                                      | Net cash provided by operating activities
|                                      |                                                                                   |                                                      |                                          
|Cash flows from investing activities: |                                                                                   |                                                      |                                          
|                                      | Net proceeds from sales of real estate investments                                |                                                      |                                          
|                                      | Acquisitions of and additions to real estate investments                          |                                                      |                                          
|                                      | Expenditures for investment in unconsolidated joint venture                       |                                                      |                                          
|                                      | Investment in mortgage receivable                                                 |                                                      |                                          
|                                      | Receipt of mortgage receivable                                                    |                                                      |                                          
|                                      | Expenditures for capitalized leasing commissions                                  |                                                      |                                          
|                                      |                                                                                   |                                                      |                                          
|                                      |                                                                                   | Net cash used by investing activities                |                                          
|                                      |                                                                                   |                                                      |                                          
|Cash flows from financing activities: |                                                                                   |                                                      |                                          
|                                      | Proceeds from mortgage loans payable                                              |                                                      |                                          
|                                      | Repayments of mortgage loans payable                                              |                                                      |                                          
|                                      | Repayment of unsecured notes payable                                              |                                                      |                                          
|                                      | Proceeds from draws under line of credit facility                                 |                                                      |                                          
|                                      | Repayments of draws under line of credit facility                                 |                                                      |                                          
|                                      | Proceeds from related party notes payable                                         |                                                      |                                          
|                                      | Intercompany advances                                                             |                                                      |                                          
|                                      | Repayments of intercompany advances                                               |                                                      |                                          
|                                      | Interest rate collar termination payment                                          |                                                      |                                          
|                                      | Capital contributions                                                             |                                                      |                                          
|                                      | Distributions paid to general partner                                             |                                                      |                                          
|                                      | Distributions paid to limited partners                                            |                                                      |                                          
|                                      | Redemption of Series B and C Preferred Units                                      |                                                      |                                          
|                                      | Expenditures for deferred financing costs                                         |                                                      |                                          
|                                      |                                                                                   |                                                      |                                          
|                                      |                                                                                   | Net cash (used in) provided by financing activities  |                                          
|                                      |                                                                                   |                                                      |                                          
|                                      |                                                                                   | Net increase (decrease) in cash and cash equivalents |                                          
|Cash and cash equivalents:            |                                                                                   |                                                      |                                          
|                                      | Beginning of year                                                                 |                                                      |                                          
|                                      |                                                                                   |                                                      |                                          
|                                      | End of year                                                                       |                                                      | $                                        
|                                      |                                                                                   |                                                      |                                          

See accompanying notes to consolidated financial statements

F-6

---





BRADLEY OPERATING LIMITED PARTNERSHIP        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        Years ended December 31, 2004, 2003, and 2002

(1) Organization

Bradley Operating Limited Partnership (the Operating Partnership) is the entity through which Heritage Property Investment Trust, Inc. (Heritage, or the
Company) conducts substantially all of its business in the Midwestern United States. Through a wholly-owned subsidiary, Heritage acquired all of the general partner units of Bradley Real
Estate Inc., the former general partner of the Operating Partnership, on September 18, 2000. Through the acquisition, Heritage became the general partner of the Operating Partnership and
held 22,140,487 general partner common units through a wholly-owned subsidiary and directly held 26,199 limited partner common units from inception until Heritage's initial public offering (IPO)
described below. At December 31, 2004 and 2003, the Operating Partnership owned (either directly or through subsidiaries) 106 and 105 neighborhood and community shopping centers, respectively.

Heritage
is a Maryland Corporation organized as a real estate investment trust (REIT). Heritage was formed on July 1, 1999 and commenced operations on July 9, 1999 through
the contribution of $550 million of real estate investments and related assets, net of liabilities, by Net Realty Holding Trust, a wholly-owned subsidiary of the New England Teamsters &
Trucking Industry Pension Fund (NETT) and $25 million of cash from the Prudential Insurance Company of America (Prudential). Heritage qualifies as a REIT under Sections 856-860 of
the Internal Revenue Code of 1986, as amended (the Code).

Heritage,
through its subsidiaries, is a fully-integrated, self-administered, and self-managed REIT and is focused on the acquisition, ownership, management,
leasing, and redevelopment of primarily grocer-anchored neighborhood and community shopping centers
principally in the Eastern and Midwestern United States. In 2003, Heritage expanded its operations to include the Southwestern U.S. with its Trademark Portfolio Acquisition consisting of eight
properties. At December 31, 2004 and 2003, Heritage owned 164 shopping centers and three office buildings and 162 shopping centers and four office buildings, respectively.

Initial Public Offering

On April 29, 2002, Heritage completed its IPO of its common stock and, when combined with the exercise of the Underwriter's overallotment, sold a total of
14,080,556 shares of its common stock in the IPO at a price of $25.00 per share.

The
net proceeds from the IPO, after deducting the underwriters' discount and offering expenses, were $322.5 million and were used by Heritage to repay in full its obligation of
$100 million of subordinated debt then outstanding. Heritage, through a wholly-owned subsidiary, contributed the remaining net proceeds of $222.5 million to the Operating Partnership in
exchange for 10,080,556 general partner common units. Such net proceeds were used to repay $215.7 million of the outstanding indebtedness under its prior line of credit facility and to pay the
$6.8 million fee associated with terminating the collar previously in place with respect to the $150 million term loan under the prior line of credit facility.

Issuance of Public Equity

In December 2003, Heritage completed a secondary public offering of its common stock and sold a total of 3,932,736 shares, including the underwriter's
overallotment of 432,736 shares, at a net price of

F-7

---



$28.27
per share. The net proceeds of $111 million from this offering were used to repay certain indebtedness, including the $60 million bridge loan incurred by the Heritage Property
Investment Limited Partnership and the Operating Partnership in connection with the Trademark Portfolio Acquisition. Heritage, through a wholly-owned subsidiary, contributed $9.8 million of the
proceeds to the Operating Partnership in exchange for 347,471 general partner common units.

Minority Interest

The Operating Partnership also has a minority interest that participates in earnings of the Operating Partnership based upon terms specified in the partnership
agreement. This minority interest amounted to $2.4 million at December 31, 2004 and 2003.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The consolidated financial statements are prepared on the accrual basis in accordance with accounting principles generally accepted in the United States of
America (GAAP). Management of the Operating Partnership has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and
liabilities at the dates of the consolidated financial statements and the reporting of revenue and expenses during the periods presented to prepare these consolidated financial statements in
conformity with GAAP. The Operating Partnership bases its estimates on historical experience and other assumptions believed to be reasonable under the circumstances. Actual results could differ from
those estimates under different assumptions or conditions.

Management
considers those estimates and assumptions that are most important to the portrayal of the Operating Partnership's financial condition and results of operations, in that they
require management's most subjective judgments, to form the basis for the accounting policies deemed to be most critical to the Operating Partnership. These critical accounting policies include the
useful lives used to calculate depreciation and amortization expense on real estate investments, judgments regarding the recoverability or impairment of each real estate investment, estimates
regarding the recoverability of certain operating expenses, allocation of general and administrative expenses from Heritage to the Operating Partnership, and judgments regarding the ultimate
collectibility of accounts receivable.

If
the useful lives of real estate investments were different, future operating results would be affected. Future adverse changes in market conditions or poor operating results could
result in an inability to recover real estate investment carrying values that may not be reflected in current carrying values and could require an impairment charge in the future. Future adverse
changes in market conditions could also impact the Operating Partnership's tenants and may affect the adequacy of the allowance for doubtful accounts receivable. If the methodologies and assumptions
used to estimate the fair value of the Operating Partnership's interest rate hedging instruments or to determine hedge effectiveness were different, amounts reported in earnings and other
comprehensive income and amounts expected to be recognized in earnings in the future could be affected. Further, future changes

F-8

---



in
market interest rates and other relevant factors could affect the fair value of such instruments and future interest expense.

The
consolidated financial statements of the Operating Partnership include the accounts and operations of the Operating Partnership and its subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation. The Operating Partnership has a subsidiary partnership that is not wholly-owned. The minority interest in the subsidiary partnership
participates in the earnings of the subsidiary based upon terms specified in the subsidiary's partnership agreement.

Because
Heritage acquired all of the outstanding capital stock of Bradley and used the purchase method of accounting for the transaction, it used "push-down" accounting to
establish the basis for reporting assets and liabilities of the Operating Partnership.

(b) Real Estate Investments

Real estate investments are recorded at cost. The cost of buildings and improvements includes the purchase price of property, legal fees, and acquisition costs.

Real
estate investments held for sale are carried at the lower of carrying amount or fair value less costs to sell. Depreciation and amortization are suspended during the
held-for-sale period. There were no properties held for sale at December 31, 2004 and 2003.

Statement
of Financial Accounting Standards (SFAS) No. 144,Accounting for the Impairment or Disposal of Long-Lived
Assets(SFAS No. 144), requires the Operating Partnership to periodically perform reviews of its properties to determine if their carrying amounts will be recovered from
future
operating cash flows. If the Operating Partnership determines that impairment has occurred, those assets shall be reduced to fair value. No such impairment losses have been recognized to date.

In
addition, SFAS No. 144 retains the basic provisions of Opinion No. 30,Reporting the Results of OperationsReporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions,for presenting discontinued operations in the statement of
operations but broadens that presentation to include a component of an entity (rather than a segment of a business). The Operating Partnership adopted SFAS No. 144 on January 1, 2002.
The adoption of SFAS No. 144 did not affect the operating results of the Operating Partnership for any of the periods presented.

The
Operating Partnership applies SFAS No. 141,Business Combinations(SFAS No. 141), to property acquisitions. Accordingly,
under the guidance provided by SFAS No. 141, the fair value of the real estate acquired is allocated to the acquired tangible assets and identified intangible assets and liabilities. Identified
intangible assets and liabilities may consist of the value of above-market and below-market leases, other value of in-place leases and value of tenant relationships, if any, based in each
case on their fair values.

The
fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, and the "as-if-vacant" value is then
allocated based on management's determination of the relative fair values of these assets. Management determines the as-if-vacant fair value of a property using methods similar
to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected

F-9

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lease-up
periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other
operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand. Management also estimates costs to execute similar leases
including leasing commissions, legal and other related costs.

In
allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded
based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the
in-place leases and (ii) management's estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining
non-cancelable term of the lease. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining non-cancelable terms of the
respective leases. The capitalized below-market lease values are accreted as an increase to rental income over the initial term and any fixed rate renewal periods in the respective leases.

The
aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationships, is measured by the excess of (i) the purchase price
paid for a property after adjusting existing in-place leases to market rental rates over (ii) the estimated fair value of the property as if vacant, determined as set forth above.
This aggregate value is allocated between in-place lease values and tenant relationships, if any, based on management's evaluation of the specific characteristics of each tenant's lease;
however, the value of tenant relationships has not been separated from in-place lease value for the additional interests in real estate entities because such value and its consequence to
amortization expense is estimated to be immaterial for these particular acquisitions consummated to date. The value of in-place leases exclusive of the value of above-market and
below-market in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated
expiration, all unamortized amounts relating to that lease would be written off. For the years ended December 31, 2004, 2003 and 2002, the Operating Partnership recognized upon acquisition,
additional intangible assets and liabilities as follows (in thousands):

2004

2003

2002Assets:Acquired in-place lease value

$
12,615

$


$
Acquired above-market leases

$
1,038

$


$
Liabilities:Acquired below-market leases

$
862

$


$



The
Operating Partnership incurred amortization expense pertaining to acquired in-place lease intangibles of $0.1 million, $0 and $0 during the years ended
December 31, 2004, 2003, and 2002, respectively. Amortization of $0.1 million, $0, and $0, pertaining to acquired above-market leases was applied as a reduction of rental income during
the years ended December 31, 2004, 2003, and 2002, respectively. Accretion pertaining to acquired below-market leases applied as an increase to rental income during the year ended
December 31, 2004 was not material.

F-10

---



The
table below presents the expected amortization related to the acquired in-place lease value and acquired above and below market leases at December 31, 2004 (in
thousands):

|                              |                                 | 2005 |   | 2006  |   | 2007 |       | 2008 |   | 2009  |   | Thereafter |      
|----------------------------- | ------------------------------- | ---- | - | ----- | - | ---- | ----- | ---- | - | ----- | - | ---------- | -----
|Amortization expense:         |                                 |      |   |       |   |      |       |      |   |       |   |            |      
|                              | Acquired in-place lease value   |      | $ | 1,757 |   | $    | 1,757 |      | $ | 1,703 |   | $          | 1,112
|Adjustments to rental income: |                                 |      |   |       |   |      |       |      |   |       |   |            |      
|                              | Acquired above market leases    |      | $ | (104  | ) | $    | (104  | )    | $ | (104  | ) | $          | (103 
|                              | Acquired below market leases    |      |   | 129   |   |      | 129   |      |   | 110   |   |            | 87   
|                              |                                 |      |   |       |   |      |       |      |   |       |   |            |      
|                              | Net adjustment to rental income |      | $ | 25    |   | $    | 25    |      | $ | 6     |   | $          | (16  
|                              |                                 |      |   |       |   |      |       |      |   |       |   |            |      

Expenditures
for maintenance, repairs, and betterments that do not materially extend the useful life of a real estate investment are charged to operations as incurred and amounted to
$3.7 million, $3.6 million, and $3.6 million for the years ended December 31, 2004, 2003, and 2002, respectively. Expenditures that substantially extend the useful life of
a real estate investment are capitalized. Upon sale or other disposition of the real estate investment, the cost and related accumulated depreciation and amortization are written off and the resulting
gain or loss, if any, is reflected in net income. Interest on significant construction projects is capitalized as part of the cost of real estate investments. Interest capitalized amounted to
$0.1 million, $0, and $0.1 million, for the years ended December 31, 2004, 2003, and 2002, respectively.

The
provision for depreciation and amortization has been calculated using the straight-line method over the following estimated useful lives:

Land improvements

15 yearsBuildings and improvements

20-39 yearsTenant improvements

Shorter of useful life or term of related lease


(c) Cash and Cash Equivalents

Cash and cash equivalents consist of cash in banks and short-term investments with maturities at the date of purchase of three months or less. The
majority of the Operating Partnership's
cash and cash equivalents are held at major commercial banks. The Operating Partnership has not experienced any losses to date on its invested cash.

(d) Deferred Financing and Leasing Costs

Deferred financing and leasing costs include costs incurred in connection with securing financing for, or leasing space in, the Operating Partnership's real
estate investments. Such charges are capitalized and amortized over the term of the related financing or lease. Unamortized deferred charges are charged to expense upon prepayment or significant
modification of the related financing or early termination of the related lease.

The
Operating Partnership capitalizes internal leasing costs in accordance with SFAS No. 91,Nonrefundable Fees & Costs Associated with Originating
or Acquiring Loans and Initial Direct Costs of

F-11

---



Leases. These costs amounted to $1.7 million, $1.5 million, and $1.4 million during the years ended December 31, 2004, 2003, and 2002, respectively.

(e) Investments in Joint Ventures

Upon entering into a joint venture agreement, the Operating Partnership assesses whether the joint venture is considered a variable interest entity in accordance
with FASB Interpretation No. 46R,Consolidation of Variable Interest Entities. The Operating Partnership has no interests in variable interest
entities as of December 31, 2004. The Operating Partnership accounts for its investment in joint ventures that are not deemed to be variable interest entities pursuant to Statement of Position
No. 78-9,Accounting for Investments in Real Estate Ventures(SOP No. 78-9) and Accounting Principles Board
No. 18,The Equity Method of Accounting for Investments in Common Stock.

As
of December 31, 2004, the Operating Partnership accounts for its sole joint venture under the equity method of accounting because it exercises significant influence over, but
does not control, this entity. This investment was recorded at cost, and is subsequently adjusted for an allocation of equity in earnings, plus cash contributions, and less cash distributions. Under
the equity method of accounting, the net equity investment of the Operating Partnership is reflected on the consolidated balance sheets, and the Operating Partnership's allocation of net income or
loss from the joint ventures is included on the consolidated statements of operations as other income. The Operating Partnership's allocation of joint venture income or loss follows the joint
venture's distribution priorities.

In
accordance with the provisions of SOP No. 78-9, the Company recognizes fees and interest received from the joint ventures relating solely to the extent of the
outside partner's interest.

(f) Revenue Recognition

Management has determined that all of the Operating Partnership's leases with its various tenants are operating leases. Rental income from such leases with
scheduled rent increases is recognized using the straight-line method over the terms of the leases. The aggregate excess of rental revenue recognized on a straight-line basis
over cash received under applicable lease provisions amounted to $11.5 million and $8.8 million at December 31, 2004 and 2003, respectively, and is included in accounts
receivable, net of an allowance for doubtful accounts. Rental revenue recognized over amounts due is included in revenue from rental and recoveries and amounted to $2.9 million,
$3.4 million, and $2.9 million for the years ended December 31, 2004, 2003, and 2002, respectively.

Leases
for retail space generally contain provisions under which the tenants reimburse the Operating Partnership for a portion of property operating expenses and real estate taxes
incurred by the Operating Partnership. In addition, certain of the Operating Partnership's operating leases for retail space contain contingent rent provisions under which tenants are required to pay
a percentage of their sales in excess of a specified amount as additional rent. The Operating Partnership defers recognition of contingent rental income until such specified targets are met.
Reimbursements for both operating expenses and real estate taxes, as well as contingent rental income during the years ended December 31, 2004, 2003, and 2002 were $49.1 million,
$47.2 million, and $45.4 million, respectively. These items are included in revenue from rentals and recoveries in the consolidated statements of income.

F-12

---



The
Operating Partnership makes estimates of the uncollectibility of its accounts receivable related to minimum rent, deferred rent, expense reimbursements and other revenue or income.
The Operating Partnership specifically analyzes accounts receivable and historical bad debts, tenant concentrations, tenant creditworthiness, current economic trends and changes in tenant payment
terms when evaluating the adequacy of the allowance for doubtful accounts. These estimates have a direct impact on the Operating Partnership's net income.

Allowances
for uncollectible receivables are charged against revenue from rentals and recoveries and amounted to $1.8 million, $3.0 million, and $2.4 million for the
years ended December 31, 2004, 2003, and 2002, respectively.

(g) Gain Recognition on Sale of Real Estate

The Operating Partnership performs evaluations of each real estate sale to determine if full gain recognition is appropriate in accordance with SFAS
No. 66, Accounting for Sales of Real Estate. The application of SFAS No. 66 can be complex and requires the Operating Partnership to make assumptions including an assessment of whether
the risks and rewards of ownership have been transferred, the extent of the purchaser's investment in the property being sold, whether the Operating Partnership's receivables, if any, related to the
sale are collectible and are subject to subordination, and the degree of the Operating Partnership's continuing involvement with the real estate asset after the sale. If full gain recognition is not
appropriate, the Operating Partnership accounts for the sale under an appropriate deferral method.

(h) Earnings Per Common Unit

Basic earnings per common unit is computed by dividing net income available to general and limited partner (common) unitholders by the weighted average number of
general and limited partner units (including redeemable common units) outstanding during the year. Diluted earnings per common unit reflects the potential dilution that could occur if securities or
other contracts to issue commons units were exercised or converted into common units or resulted in the issuance of common units and then shared in the earnings of the Operating Partnership. For the
years ended December 31, 2004, 2003, and 2002, there were no dilutive instruments, and therefore, diluted earnings per common unit and basic earnings per common unit are the same.

(i) Credit Risk

The Operating Partnership operates in one industry, which is the acquisition, ownership, management, leasing and redevelopment of real estate, and no single
tenant accounts for more than 10% of total revenue. Financial instruments potentially subjecting the Operating Partnership to concentrations of credit risk consist principally of (1) temporary
cash and equivalent instruments, which are held at financial institutions of high credit quality; and (2) tenant receivables, whose credit risk is distributed among tenants in different
industries and across several geographical areas.

F-13

---





(j) Fair Value of Financial Instruments

SFAS No. 107,Disclosures about Fair Value of Financial Instruments, requires the Operating Partnership to
disclose fair value information about all financial instruments annually, whether or not recognized in the balance sheets, for which it is practicable to estimate fair value. The Operating
Partnership's financial instruments, other than debt, are generally short-term in nature and consist of cash and cash equivalents, rents and other receivables, and accounts payable. The
carrying values of these assets, liabilities, and redeemable securities, which are recorded at net realizable value or redemption value in the consolidated balance sheets, approximate fair value.

The
fair values of the Operating Partnership's fixed rate mortgage loans and unsecured notes payable, which are based on estimates made by management for rates currently prevailing for
comparable loans and notes of comparable maturities, exceeded their aggregate carrying values by $13.6 million and $11.0 million at December 31, 2004 and 2003, respectively. The
Operating Partnership's line of credit facility is at a variable rate, resulting in a carrying value that approximates fair value.

(k) Hedging Activities

From time to time, the Operating Partnership uses derivative financial instruments to limit its exposure to changes in interest rates. The Operating Partnership
was not a party to any hedging agreement with respect to its floating rate debt as December 31, 2004 or 2003. The Operating Partnership has in the past used derivative financial instruments to
manage, or hedge, interest rate risks related to its borrowings, from lines of credit to medium and long-term financings. The Operating Partnership requires that hedging derivative
instruments are effective in reducing the interest rate risk exposure that they are designed to hedge. The Operating Partnership does not use derivatives for trading or speculative purposes and only
enters into contracts with major financial institutions based on their credit rating and other factors.

(l) Allocation of General and Administrative Expenses

General and administrative expenses of Heritage that directly relate to each subsidiary are charged directly to such subsidiary. All other general and
administrative expenses of Heritage have been allocated to each of Heritage's subsidiaries, including the Operating Partnership, based on each subsidiary's pro-rata portion of Heritage's
total property square footage.

(m) Reclassifications

Certain prior year balances have been reclassified to conform to the current year presentation.

F-14

---



(3) Real Estate Investments

A summary of real estate investments December 31, 2004 and 2003 follows (in thousands):

|                                          |                    | 2004 |           | 2003      |  
|----------------------------------------- | ------------------ | ---- | --------- | --------- | -
|Land                                      |                    | $    | 212,704   |           | $
|Land improvements                         |                    |      | 119,938   |           |  
|Buildings and improvements                |                    |      | 1,116,081 |           |  
|Tenant improvements                       |                    |      | 34,095    |           |  
|Improvements in process                   |                    |      | 15,163    |           |  
|                                          |                    |      |           |           |  
|                                          |                    |      | 1,497,981 |           |  
|Accumulated depreciation and amortization |                    |      | (180,781  | )         |  
|                                          |                    |      |           |           |  
|                                          | Net carrying value |      | $         | 1,317,200 |  
|                                          |                    |      |           |           |  

Acquisitions

During the year ended December 31, 2004, the Operating Partnership completed the acquisition of three shopping centers aggregating 0.7 million
square feet of gross leasable area ("GLA"), of which the Operating Partnership acquired 0.5 million square feet of GLA. The aggregate acquisition price of the shopping centers, including
amounts allocated to acquired in-place lease value and above and below market leases, was $90.2 million, which was funded with borrowings under the Operating Partnership's line of
credit, assumptions of mortgage loans payable at their estimated fair market value, and the issuance of limited partner common units. There were no acquisitions in 2003.

During
the year ended December 31, 2002, the Operating Partnership completed the acquisition of nine shopping centers aggregating 2.9 million square feet of GLA, of which the
Operating Partnership acquired 2.2 million square feet of GLA. The aggregate acquisition price of the shopping centers was $189.8 million, which was funded with borrowings under the line
of credit, assumptions of mortgage loans payable at their estimated fair market value, and the issuance of limited partner common units.

Dispositions

In December 2004, the Operating Partnership completed the disposition of Garden Plaza, an 80,000 square foot shopping center located in Franklin, Wisconsin
for $4.8 million, resulting in a gain of $0.6 million. The results of operations of the Garden Plaza shopping center have been reclassified as discontinued operations for all periods
presented in the accompanying financial statements.

In
December 2004, the Operating Partnership completed the disposition of a parcel of land located at Madison Plaza located in Madison, Wisconsin for $3.5 million, which
approximated the Operating Partnership's carrying value. The operations and cash flows for the assets sold could not be clearly distinguished, both operationally and for financial reporting purposes,
from the rest of the shopping center. Accordingly, no amounts have been reclassified as discontinued operations in the accompanying financial statements.

In
October 2004, the Operating Partnership completed the disposition of Camelot, a 151,000 square foot shopping center located in Louisville, Kentucky for $7.4 million,
resulting in a gain of

F-15

---



$0.3 million.
The results of operations of the Camelot shopping center have been reclassified as discontinued operations for all periods presented in the accompanying financial statements.

In
September 2004, the Operating Partnership completed the disposition of a parcel of land located at Cross Keys located in Turnersville, New Jersey for $7.0 million, which
approximated the Operating Partnership's carrying value. The operations and cash flows for the assets sold could not be clearly distinguished, both operationally and for financial reporting purposes,
from the rest of the shopping center. Accordingly, no amounts have been reclassified as discontinued operations in the accompanying financial statements.

(4) Investment in Unconsolidated Joint Venture

In May 2004, the Operating Partnership acquired a 50% interest in a joint venture for the development and construction of a 302,000 square foot shopping
center, of which the joint venture owns 210,000 square feet, to be located in a suburb of Grand Rapids, Michigan. The Operating Partnership made an initial equity investment of $3.3 million,
which has been accounted for under the equity method of accounting, and provided a short-term bridge loan of approximately $9.2 million, which was repaid in November 2004.
Interest earned on the loan, to the extent attributable to the outside interest in the joint venture, has been recorded as Interest and Other. The operations of the joint venture, consisting of
incidental activity related to operating restaurants located on out parcels, are being reported on a 90-day lag basis. Accordingly, the operations for the period from May 17, 2004
(acquisition date) through September 30, 2004 are included in the accompanying consolidated statement of operations and are classified as Interest and Other.

The
Operating Partnership has fully guaranteed the repayment of a $22 million construction loan obtained by the joint venture from Key Bank, National Association. The Key Bank
loan matures in November 2006 (subject to extension). As of December 31, 2004, $13.0 million is outstanding under the construction loan. Such amount is recorded on the books and
records of the joint venture. In the event
the Operating Partnership is obligated to repay all or a portion of the construction loan pursuant to the guarantee, the Company (i) may remove the manager of the joint venture for cause and
terminate all agreements with the manager, (ii) would receive a promissory note from the joint venture for the amount paid by the Operating Partnership together with a first priority mortgage
on the shopping center, and (iii) may prohibit all distributions from the joint venture or payment of fees by the joint venture until the principal and accrued interest on the loan is repaid.
The estimated fair value of the guarantee as of December 31, 2004 is not material to the Operating Partnership's financial position. Accordingly, no liability or additional investment has been
recorded related to the fair value of the guarantee.

(5) Supplemental Cash Flow Information

During the years ended December 31, 2004, 2003, and 2002 interest paid was $47.4 million, $32.3 million, and $34.3 million,
respectively.

Included
in accrued expenses and other liabilities at December 31, 2004 and 2003 are accrued expenditures for real estate investments of $4.7 million and
$3.4 million, respectively.

F-16

---



During
the year ended December 31, 2004, 7,814 redeemable common units were converted to general partner units with a value of $0.2 million.

During
the years ended December 31, 2004 and 2002, the Operating Partnership assumed $48.9 million and $87.2 million, respectively, of existing debt in connection
with the acquisition of one and six shopping centers respectively. In addition, during the years ended December 31, 2004 and 2002, the Operating Partnership issued 189,588 and 314,071,
respectively, limited partner common units with a fair value at date of issuance of $6.2 million and $7.9 million, respectively in connection with the acquisition of various shopping
centers. Only the cash portion of the above transactions is reflected in the accompanying consolidated statements of cash flows.

(6) Operating Leases

Scheduled future minimum rental payments to be received under the Operating Partnership's non-cancelable operating leases are as follows at
December 31, 2004 (in thousands):

Year Ending December 31

Amount2005

$
141,1272006


128,7962007


113,4572008


93,7612009


76,817Thereafter


463,214Total minimum future receipts

$
1,017,172


The
Operating Partnership has contractual commitments under non-cancelable operating leases, primarily ground leases expiring at various dates through 2087. Rental expense
was $0.2 million in each of the years ended December 31, 2004, 2003, and 2002. Committed amounts under non-cancelable operating leases in effect at December 31, 2004
were as follows:

Year Ending December 31

Amount2005

$
1612006


1612007


1612008


1612009


155Thereafter


11,525Total minimum future payments

$
12,324


F-17

---



(7) Debt

(a) Mortgage Loans Payable

Mortgage loans payable consist of various non-recourse issues collateralized by 16 and 14 real estate investments with an aggregate net carrying value
of $276.6 million and $225.7 million at December 31, 2004 and 2003, respectively. The loans require monthly payments of principal and interest through 2020 at effective interest
rates ranging from 4.28% to 10.13% and have a weighted average effective interest rate of 6.77% and 7.13% at December 31, 2004 and 2003, respectively. The loans are generally subject to
prepayment penalties.

Mortgage
loans payable consisted of the following at December 31 (in thousands):

|Property                               |  | Effective
Interest
Rate |  | Contractual
Interest
Rate |  | Maturity       |  | 2004(1) |         | 2003(2)
|-------------------------------------- |  | ----------------------- |  | ------------------------- |  | -------------- |  | ------- | ------- | -------
|Miracle Hills Park                     |  | 8.28%                   |  | 8.28%                     |  | August 2004    |  | $       |        |        
|Williamson Square                      |  | 8.00%                   |  | 8.00%                     |  | August 2005    |  |         | 10,830  |        
|Spring Mall                            |  | 9.39%                   |  | 9.39%                     |  | October 2006   |  |         | 8,141   |        
|Southport Centre                       |  | 6.94%                   |  | 6.94%                     |  | July 2007      |  |         | 9,924   |        
|Long Meadow Commons                    |  | 5.11%                   |  | 7.98%                     |  | July 2007      |  |         | 10,028  |        
|Southgate Shopping Center              |  | 8.38%                   |  | 8.38%                     |  | October 2007   |  |         | 2,395   |        
|Salem Consumer Square                  |  | 10.13%                  |  | 10.13%                    |  | September 2008 |  |         | 10,284  |        
|St. Francis Plaza                      |  | 8.13%                   |  | 8.13%                     |  | December 2008  |  |         | 866     |        
|Burlington Square                      |  | 5.31%                   |  | 8.28%                     |  | January 2009   |  |         | 15,051  |        
|Montgomery Commons                     |  | 6.38%                   |  | 8.48%                     |  | January 2010   |  |         | 8,506   |        
|Warminster Towne Center                |  | 6.01%                   |  | 8.24%                     |  | February 2010  |  |         | 21,797  |        
|The Market of Wolf Creek III           |  | 5.71%                   |  | 7.88%                     |  | February 2011  |  |         | 9,634   |        
|Bedford Grove                          |  | 7.86%                   |  | 7.86%                     |  | March 2012     |  |         |        |        
|The Market of Wolf Creek I             |  | 5.71%                   |  | 7.68%                     |  | October 2012   |  |         | 11,475  |        
|Berkshire Crossing                     |  | 4.28%                   |  | 4.28%                     |  | November 2012  |  |         | 14,523  |        
|Grand Traverse Crossing                |  | 7.42%                   |  | 7.42%                     |  | January 2013   |  |         | 13,284  |        
|Salmon Run Plaza                       |  | 8.10%                   |  | 8.95%                     |  | September 2013 |  |         | 4,938   |        
|Elk Park Center                        |  | 7.64%                   |  | 7.64%                     |  | August 2016    |  |         | 8,244   |        
|Grand Traverse CrossingWal-Mart       |  | 7.75%                   |  | 7.75%                     |  | October 2016   |  |         | 5,160   |        
|The Market of Wolf Creek II            |  | 5.87%                   |  | 7.50%                     |  | July 2017      |  |         | 2,276   |        
|Bedford GroveWal-Mart                 |  | 7.63%                   |  | 7.63%                     |  | November 2019  |  |         | 4,067   |        
|Berkshire CrossingHome Depot/Wal-Mart |  | 7.63%                   |  | 7.63%                     |  | March 2020     |  |         | 6,617   |        
|                                       |  |                         |  |                           |  |                |  |         |         |        
|Weighted average rate/total $          |  | 7.36%                   |  | 7.89%                     |  |                |  | $       | 178,040 |        
|                                       |  |                         |  |                           |  |                |  |         |         |        

---

F-18

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(b) Unsecured Notes Payable

The Operating Partnership previously issued unsecured notes payable consisting of a $100 million, 7% fixed-rate issue which matured on
November 15, 2004; a $100 million, 7.2% fixed-rate issue maturing on January 15, 2008; and $1.5 million of other unsecured notes payable. On November 15,
2004, the Operating Partnership repaid all of the $100 million 7% fixed-rate issue maturing on that date. The amount of unsecured notes payable outstanding at December 31,
2004 and 2003 was $101.5 million and $201.5 million, respectively.

(c) Line of Credit Facility

On April 29, 2002, the Operating Partnership and Heritage Property Investment Limited Partnership (Heritage OP) entered as co-borrowers on a
joint and several basis into a $350 million unsecured line of credit with a group of lenders and Fleet National Bank, as agent. Heritage and certain of Heritage's other subsidiaries have
guaranteed this line of credit. This line of credit is being used principally to fund growth opportunities and for working capital purposes. At December 31, 2004 and 2003, $196 million
and $243 million was outstanding under the line of credit, respectively, all of which is carried on the Operating Partnership's balance sheets.

This
line of credit bears interest at either the lender's base rate or a floating rate based on a spread over LIBOR ranging from 80 basis points to 135 basis points, depending upon
Heritage's debt rating,
and requires monthly payments of interest. The variable rate in effect at December 31, 2004 and 2003, including the lender's margin of 105 basis points, and borrowings outstanding at the base
rate, was 3.55%, and 2.22%, respectively. In addition, this line of credit has a facility fee based on the amount committed but not drawn ranging from 15 basis points to 25 basis points, depending
upon Heritage's debt rating, and is required to be paid quarterly.

This
line of credit requires the borrowers to maintain specific financial ratios and restricts the incurrence of indebtedness and the funding of investments. This line of credit also,
except under some circumstances (including as necessary to maintain Heritage's status as a REIT) limits Heritage's ability to make distributions in excess of 90% of annual funds from operations, as
defined. As December 31, 2004 and 2003, the borrowers were in compliance with all of the financial covenants under the line of credit facility.

Upon
entering into this line of credit and repayment of the prior senior unsecured credit facility, the Company wrote off unamortized deferred financing costs and recognized a loss of
$4.2 million in 2002.

On
March 29, 2005, Heritage entered into a new three-year $400 million unsecured line of credit with a group of lenders and Wachovia Bank, National Association, as agent,
expiring March 28, 2008, subject to a one-year extension. At Heritage's request, this line of credit may be increased to $500 million. Heritage is the borrower under this new line of
credit and the Operating Partnership, Heritage OP and certain of Heritage's other subsidiaries, have guaranteed this line of credit. This new

F-19

---



line
of credit replaces the Operating Partnership's and Heritage OP's existing line of credit and will be used principally to fund growth opportunities and for working capital purposes. Heritage
contributed the proceeds from the new line of credit borrowings to the operating partnership, which used those funds to repay the entire outstanding balance of the prior line of credit.

Heritage's
ability to borrow under this new line of credit is subject to ongoing compliance with a number of financial and other covenants. This new line of credit, except under some
circumstances, limits Heritage's ability to make distributions in excess of 90% of our annual funds from operations. In addition, this line of credit bears interest at either the lender's base rate or
a floating rate based on a spread over LIBOR ranging from 62.5 basis points to 115 basis points, depending upon our debt rating. In addition, this line of credit has a facility fee based on the amount
committed ranging from 15 to 25 basis points, depending upon Heritage's debt rating, and requires quarterly payments.

Selected
financial information of Heritage OP, the co-borrower, is as follows as of and for the years ended December 31, 2004 and 2003 (in thousands):

|                                                  |  | December 31,
|------------------------------------------------- |  | ------------
|
|
|Real estate investments, net                      |  | $           
|Other assets                                      |  | $           
|Total assets                                      |  | $           
|Indebtedness (excluding line of credit) (1)       |  | $           
|Other liabilities                                 |  | $           
|Partners' capital                                 |  | $           
|Total revenue (excluding discontinued operations) |  | $           
|Net income                                        |  | $           

---

(d) Guaranty of Unsecured Debt

On April 1, 2004, Heritage issued $200 million aggregate principal unsecured senior notes at an interest rate of 5.125% due April 15, 2014
with interest payable semiannually commencing on October 15, 2004. On October 15, 2004, Heritage issued $150 million aggregate principal unsecured notes (collectively, with the
$200 million notes, the "Notes") at in interest rate of 4.5% notes due October 15, 2009 with interest payable semiannually commencing on April 15, 2005. Heritage used the proceeds
of the Notes, net of original issue discount and estimated offering costs, to repay a portion of the outstanding balance under the Operating Partnership's and Heritage OP's combined line of credit.
The Operating Partnership has provided Heritage with intercompany notes in exchange for the proceeds used to pay down the line of credit at terms substantially identical to the Notes. These
intercompany notes are classified as related party notes payable in the accompanying 2004 consolidated

F-20

---



balance
sheet. The Notes may be redeemed at any time at the option of Heritage, in whole or in part, at a redemption price equal to the sum of (1) the principal amount of the notes being
redeemed plus accrued interest on the notes to the redemption date and (2) a make-whole amount, if any, with respect to the notes that is designed to provide yield maintenance
protection to the holders of these notes.

The
Notes are senior unsecured obligations of Heritage and are guaranteed jointly and severally by the Operating Partnership and Heritage OP. Such guarantees are unsecured senior
obligations of the Operating Partnership and Heritage OP and rank equally with all existing and future unsecured senior indebtedness of the Operating Partnership and Heritage OP. The Notes also
contain certain financial and operating covenants, including limitations on the amount and type of indebtedness that may be incurred by Heritage, the Operating Partnership, and Heritage OP.

(e) Scheduled Principal Repayments

Scheduled principal repayments on aggregate outstanding debt at December 31, 2004 are as follows (in thousands):

Amount dueYear ending December 31:2005

$
211,0302006


13,9242007


24,5622008


112,5272009


166,297Thereafter


289,649Total due(1)

$
817,989


---

(8) Income Taxes

The Operating Partnership is not liable for Federal income taxes as each partner reports its allocable share of income and deductions on its respective return;
accordingly, no provision for Federal income taxes is reported in the accompanying consolidated financial statements.

F-21

---





(9) Commitments and Contingencies

The Operating Partnership is subject to legal and other claims incurred in the normal course of business. Based on its review and consultation with counsel of
such matters known to exist, management does not believe that the ultimate outcome of these claims would materially affect the Operating Partnership's financial position or results of operations.

The
Company has entered into construction contracts related to tenant improvements, out parcel development and re-development of various shopping centers. Unexpended but
committed amounts under construction contracts amounted to $8.5 million as of December 31, 2004.

(10) Derivative and Hedging Activities

At January 1, 2002, the Operating Partnership had an interest rate "collar" that was entered into pursuant to and as a condition of the Operating
Partnership's prior line of credit facility. This collar limited the variable interest rate range on the entire $150 million term loan under the prior line of credit to a floor of 6% and a cap
of 8.5% and was accounted for as a cash flow hedge. Interest expense attributable to the collar and recognized in earnings during the year ended December 31, 2002 was $2.1 million. On
April 29, 2002, the Operating Partnership entered into a $350 million unsecured line of credit with a group of lenders with Fleet National Bank, as agent, as described in Note 7.
Upon entering into this new line of credit, the Operating Partnership paid $6.8 million to terminate the collar. As a result of the termination, the Operating Partnership reclassified
$7.6 million of accumulated other comprehensive loss, a component of partners' capital, to earnings during the year ended December 31, 2002.

(11) Capital Structure

At December 31, 2004 and 2003, Heritage, through a wholly-owned subsidiary, owned approximately 98.5% and 99%, respectively, of the voting interests in the
Operating Partnership, and through this subsidiary, is the sole general partner of the Operating Partnership. This structure is commonly referred to as an umbrella partnership REIT or "UPREIT."

At
December 31, 2004, interests in the Operating Partnership are evidenced by two partner classes: general partner "common" units owned by Heritage's wholly-owned subsidiary, and
limited partner common units owned by Heritage and outside parties.

At
December 31, 2003, in addition to the two partner classes described above, the Operating Partnership had outstanding 2,000,000 Series B Preferred Units and 1,000,000
Series C Preferred Units. The Series B and C Preferred Units were issued during 1999 to investors at a price of $25.00 per unit. The Series B and C Preferred Units were callable
by the Operating Partnership after five years from the date of issuance at a redemption price equal to the redeemed holder's capital account plus an amount equal to all accumulated, accrued, and
unpaid distributions or dividends thereon to the date of redemption.

On
February 23, 2004, the Operating Partnership redeemed all outstanding 8.875% Series B Cumulative Redeemable Perpetual Preferred Units of the Operating Partnership. The
Operating Partnership redeemed all 2,000,000 of the outstanding Series B Preferred Units at a redemption price of $25.00 per unit, plus approximately $0.3266 of accrued and unpaid
distributions, for an aggregate redemption price of approximately $25.3266 per unit. There were no unamortized issuance costs

F-22

---



associated
with the Series B Preferred Units; therefore, the Operating Partnership did not incur a charge in connection with this redemption.

On
September 7, 2004, the Operating Partnership redeemed all outstanding 8.875% Series C Cumulative Redeemable Perpetual Preferred Units of the Operating Partnership. The
Operating Partnership redeemed all 1,000,000 of the outstanding Series C Preferred Units at a redemption price of $25.00 per unit, plus approximately $0.413 of accrued and unpaid distributions
for an aggregate redemption price of approximately $25.413 per unit. There were no unamortized issuance costs associated with the Series C Preferred Units, therefore, the Operating Partnership
did not incur a charge in connection with this redemption.

Pursuant
to the Operating Partnership Agreement, outside limited partners in the Operating Partnership have the right to redeem all or any portion of their common units for cash from the
Operating Partnership. However, Heritage may elect to acquire their interest by issuing common stock of Heritage in exchange for common units on a one-for-one basis. The amount
of cash to be paid to the limited partner if the redemption right is exercised and the cash option is elected by Heritage is based on the trading price of Heritage's common stock at the conversion
date. Due to the redemption option existing outside the control of the Operating Partnership, such limited partners' common units are not included in Partners' Capital and are stated at their
redemption value.

F-23

---



The
following table reflects the activity for redeemable common and preferred units for the years ended December 31, 2004, 2003, and 2002 (in thousands):

|                                                                       |  | Redeemable
Common
Units |        | Series B
Preferred
Units |   | Series C
Preferred
Units |  
|---------------------------------------------------------------------- |  | ----------------------- | ------ | ------------------------ | - | ------------------------ | -
|Balance at December 31, 2001                                           |  | $                       | 527    |                          | $ | 50,000                   |  
|                                                                       |  |                         |        |                          |   |                          |  
|Net income allocable to redeemable partnership units                   |  |                         | 51     |                          |   | 4,438                    |  
|Acquisition of properties in exchange for limited partner common units |  |                         | 7,852  |                          |   |                         |  
|Distributions to redeemable partnership units                          |  |                         | (302   | )                        |   | (4,438                   | )
|Adjustment to reflect redeemable common units at redemption value      |  |                         | 369    |                          |   |                         |  
|                                                                       |  |                         |        |                          |   |                          |  
|Balance at December 31, 2002                                           |  |                         | 8,497  |                          |   | 50,000                   |  
|                                                                       |  |                         |        |                          |   |                          |  
|Net income allocable to redeemable partnership units                   |  |                         | 311    |                          |   | 4,438                    |  
|Distributions to redeemable partnership units                          |  |                         | (769   | )                        |   | (4,438                   | )
|Adjustment to reflect redeemable common units at redemption value      |  |                         | 1,642  |                          |   |                         |  
|                                                                       |  |                         |        |                          |   |                          |  
|Balance at December 31, 2003                                           |  |                         | 9,681  |                          |   | 50,000                   |  
|                                                                       |  |                         |        |                          |   |                          |  
|Net income allocable to redeemable partnership units                   |  |                         | 265    |                          |   | 99                       |  
|Acquisition of properties in exchange for limited partner common units |  |                         | 6,152  |                          |   |                         |  
|Conversion of redeemable partnership units                             |  |                         | (171   | )                        |   |                         |  
|Distributions to redeemable partnership units                          |  |                         | (808   | )                        |   | (99                      | )
|Adjustment to reflect redeemable common units at redemption value      |  |                         | 1,633  |                          |   |                         |  
|Redemption of Series Preferred Units                                   |  |                         |       |                          |   | (50,000                  | )
|                                                                       |  |                         |        |                          |   |                          |  
|Balance at December 31, 2004                                           |  | $                       | 16,752 |                          | $ |                         |  
|                                                                       |  |                         |        |                          |   |                          |  

(12) Segment Reporting

The Operating Partnership predominantly operates in one industry segmentreal estate ownership and management of retail properties. Management reviews
operating and financial data for each property separately and independently from all other properties when making resource allocation decisions and measuring performance. The Operating Partnership
defines operating segments as individual properties with no segment representing more than 10% of rental revenue.

(13) Newly Issued Accounting Standards

In December 2004, the FASB issued SFAS No. 153,Exchange of Nonmonetary Assets, an amendment of APB Opinion
No. 29, (SFAS No. 153). The amendments made by SFAS No. 153 are based on the principle that exchanges of nonmonetary assets should be measured on the fair
value of assets exchanged. SFAS No. 153 eliminates the exception for nonmonetary exchanges of similar productive assets and replaces it with a broader exception for exchanges of nonmonetary
assets that do not have commercial substance. SFAS No. 153 is effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. The Operating Partnership
does not expect the adoption of SFAS No. 153 to have a material impact on the Operating Partnership's results of operations, financial position, or liquidity.

F-24

---



SCHEDULE III

BRADLEY OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2004
(In thousands)

The following table sets forth detail with respect to the properties, and related encumbrances, owned by the Company at December 31, 2004.

|                                               |  |   |        | Initial Cost to the Company |   |       |  | Gross Amount Carried at December 31, 2004 |        |  |   |      
|---------------------------------------------- |  | - | ------ | --------------------------- | - | ----- |  | ----------------------------------------- | ------ |  | - | -----
|
|RETAIL SHOPPING CENTERS                        |  |   |        |                             |   |       |  |                                           |        |  |   |      
|ALABAMA                                        |  |   |        |                             |   |       |  |                                           |        |  |   |      
|Montgomery Commons
Montgomery, AL              |  | $ | 8,506  |                             | $ | 2,527 |  | $                                         | 8,459  |  | $ | 3    
|GEORGIA                                        |  |   |        |                             |   |       |  |                                           |        |  |   |      
|Shenandoah Plaza
Newnan, GA                    |  |   |       |                             |   | 1,352 |  |                                           | 4,530  |  |   | 81   
|ILLINOIS                                       |  |   |        |                             |   |       |  |                                           |        |  |   |      
|Bartonville Square
Bartonville, IL             |  |   |       |                             |   | 572   |  |                                           | 1,914  |  |   | 227  
|Butterfield Square
Libertyville, IL            |  |   |       |                             |   | 3,328 |  |                                           | 11,139 |  |   | 164  
|The Commons of Chicago Ridge
Chicago Ridge, IL |  |   |       |                             |   | 9,254 |  |                                           | 30,982 |  |   | 2,330
|The Commons of Crystal Lake
Crystal Lake, IL   |  |   |       |                             |   | 7,193 |  |                                           | 24,079 |  |   | 699  
|Crossroads Centre
Fairview Heights, IL         |  |   |       |                             |   | 3,614 |  |                                           | 12,099 |  |   | 711  
|Fairhills Shopping Center
Springfield, IL      |  |   |       |                             |   | 1,369 |  |                                           | 4,583  |  |   | 257  
|Heritage Square
Naperville, IL                 |  |   |       |                             |   | 5,554 |  |                                           | 18,593 |  |   | 560  
|High Point Centre
Lombard, IL                  |  |   |       |                             |   | 5,621 |  |                                           | 18,817 |  |   | 922  
|Long Meadow Commons
Mundelein, IL              |  |   | 10,028 |                             |   | 3,507 |  |                                           | 11,741 |  |   |     
|Parkway Pointe
Springfield, IL                 |  |   |       |                             |   | 1,059 |  |                                           | 3,546  |  |   | (1   

S-III-1

---



SCHEDULE III

BRADLEY OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2004
(In thousands)

The following table sets forth detail with respect to the properties, and related encumbrances, owned by the Company at December 31, 2004.

|                                         |  |   |  | Initial Cost to the Company |  |        |  | Gross Amount Carried at December 31, 2004 |  |        |  |       
|---------------------------------------- |  | - |  | --------------------------- |  | ------ |  | ----------------------------------------- |  | ------ |  | ------
|
|Rivercrest
Crestwood, IL                 |  |  |  | 10,043                      |  | 33,620 |  | 740                                       |  | 10,042 |  | 34,361
|Rollins Crossing
Round Lake Beach, IL    |  |  |  | 3,839                       |  | 12,852 |  | 121                                       |  | 3,839  |  | 12,973
|Sangamon Center North
Springfield, IL    |  |  |  | 2,450                       |  | 8,204  |  | 132                                       |  | 2,450  |  | 8,336 
|Sheridan Village
Peoria, IL              |  |  |  | 5,293                       |  | 17,716 |  | 1,712                                     |  | 5,585  |  | 19,136
|Sterling Bazaar
Peoria, IL               |  |  |  | 1,619                       |  | 5,419  |  | 206                                       |  | 1,750  |  | 5,494 
|Twin Oaks Centre
Silvis, IL              |  |  |  | 1,832                       |  | 6,131  |  | 295                                       |  | 1,841  |  | 6,417 
|Wardcliffe Shopping Center
Peoria, IL    |  |  |  | 503                         |  | 1,682  |  | 244                                       |  | 566    |  | 1,863 
|Westview Center
Hanover Park, IL         |  |  |  | 6,527                       |  | 21,852 |  | 732                                       |  | 6,844  |  | 22,267
|INDIANA                                  |  |   |  |                             |  |        |  |                                           |  |        |  |       
|Apple Glen Crossing
Fort Wayne, IN       |  |  |  | 4,337                       |  | 14,518 |  | 88                                        |  | 4,337  |  | 14,606
|County Line Mall
Indianapolis, IN        |  |  |  | 4,616                       |  | 15,451 |  | 2,435                                     |  | 4,615  |  | 17,887
|Double Tree Plaza
Winfield, IN           |  |  |  | 1,404                       |  | 4,703  |  | 55                                        |  | 1,420  |  | 4,742 
|Germantown Shopping Center
Jasper, IN    |  |  |  | 1,829                       |  | 6,124  |  | 1,717                                     |  | 1,904  |  | 7,766 
|King's Plaza
Richmond, IN                |  |  |  | 983                         |  | 3,290  |  | 498                                       |  | 1,111  |  | 3,660 
|Lincoln Plaza
New Haven, IN              |  |  |  | 1,241                       |  | 4,155  |  | 256                                       |  | 1,241  |  | 4,411 
|Martin's Bittersweet Plaza
Mishawaka, IN |  |  |  | 1,110                       |  | 3,717  |  | 71                                        |  | 1,110  |  | 3,788 

S-III-2

---



SCHEDULE III

BRADLEY OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2004
(In thousands)

The following table sets forth detail with respect to the properties, and related encumbrances, owned by the Company at December 31, 2004.

|                                           |  |       |  | Initial Cost to the Company |  |        |  | Gross Amount Carried at December 31, 2004 |  |        |  |       
|------------------------------------------ |  | ----- |  | --------------------------- |  | ------ |  | ----------------------------------------- |  | ------ |  | ------
|
|Rivergate Shopping Center
Shelbyville, IN  |  |      |  | 1,299                       |  | 4,350  |  | 383                                       |  | 1,299  |  | 4,733 
|Sagamore Park Centre
West Lafayette, IN    |  |      |  | 1,768                       |  | 5,919  |  | 771                                       |  | 1,768  |  | 6,690 
|Speedway SuperCenter
Indianapolis, IN      |  |      |  | 11,446                      |  | 38,322 |  | 3,992                                     |  | 11,545 |  | 42,215
|The Village
Gary, IN                       |  |      |  | 2,649                       |  | 8,871  |  | 4,002                                     |  | 2,678  |  | 12,844
|Washington Lawndale Commons
Evansville, IN |  |      |  | 4,757                       |  | 15,924 |  | 1,984                                     |  | 5,447  |  | 17,218
|IOWA                                       |  |       |  |                             |  |        |  |                                           |  |        |  |       
|Burlington Plaza West
Burlington, IA       |  |      |  | 1,409                       |  | 4,719  |  | 187                                       |  | 1,519  |  | 4,796 
|Davenport Retail Center
Davenport, IA      |  |      |  | 1,355                       |  | 4,539  |  | 1                                         |  | 1,356  |  | 4,539 
|Kimberly West
Davenport, IA                |  |      |  | 1,380                       |  | 4,623  |  | 125                                       |  | 1,400  |  | 4,728 
|Parkwood Plaza
Urbandale, IA               |  |      |  | 1,950                       |  | 6,527  |  | 148                                       |  | 1,950  |  | 6,675 
|Southgate Shopping Center
Des Moines, IA   |  | 2,395 |  | 994                         |  | 3,327  |  | 378                                       |  | 1,200  |  | 3,499 
|Spring Village
Davenport, IA               |  |      |  | 673                         |  | 2,255  |  | 546                                       |  | 780    |  | 2,694 
|Warren Plaza
Dubuque, IA                   |  |      |  | 1,439                       |  | 4,818  |  | 166                                       |  | 1,590  |  | 4,833 
|KANSAS                                     |  |       |  |                             |  |        |  |                                           |  |        |  |       
|Mid State Plaza
Salina, KS                 |  |      |  | 1,718                       |  | 5,752  |  | 1,707                                     |  | 2,343  |  | 6,834 
|Santa Fe Square
Olathe, KS                 |  |      |  | 2,465                       |  | 8,252  |  | 721                                       |  | 2,680  |  | 8,758 

S-III-3

---



SCHEDULE III

BRADLEY OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2004
(In thousands)

The following table sets forth detail with respect to the properties, and related encumbrances, owned by the Company at December 31, 2004.

|                                          |  |        |  | Initial Cost to the Company |  |        |  | Gross Amount Carried at December 31, 2004 |  |       |  |       
|----------------------------------------- |  | ------ |  | --------------------------- |  | ------ |  | ----------------------------------------- |  | ----- |  | ------
|
|Shawnee Parkway Plaza
Shawnee, KS         |  |       |  | 1,176                       |  | 3,936  |  | 325                                       |  | 1,298 |  | 4,139 
|Westchester Square
Lenexa, KS             |  |       |  | 3,128                       |  | 10,473 |  | 511                                       |  | 3,280 |  | 10,832
|West Loop Shopping Center
Manhattan, KS   |  |       |  | 3,285                       |  | 10,997 |  | 298                                       |  | 3,494 |  | 11,086
|KENTUCKY                                  |  |        |  |                             |  |        |  |                                           |  |       |  |       
|Dixie Plaza
Louisville, KY                |  |       |  | 719                         |  | 2,406  |  | 19                                        |  | 719   |  | 2,425 
|Midtown Mall
Ashland, KY                  |  |       |  | 1,924                       |  | 6,444  |  | 492                                       |  | 1,925 |  | 6,935 
|Plainview Village Center
Louisville, KY   |  |       |  | 2,701                       |  | 9,044  |  | 925                                       |  | 2,738 |  | 9,932 
|Stony Brook
Louisville, KY                |  |       |  | 3,319                       |  | 11,110 |  | 477                                       |  | 3,405 |  | 11,501
|MASSACHUSETTS                             |  |        |  |                             |  |        |  |                                           |  |       |  |       
|Berkshire Crossing
Pittsfield, MA         |  | 21,140 |  | 6,964                       |  | 23,313 |  | 1,137                                     |  | 6,966 |  | 24,448
|Burlington Square
Burlington, MA          |  | 15,051 |  | 5,930                       |  | 19,853 |  |                                          |  | 5,930 |  | 19,853
|MICHIGAN                                  |  |        |  |                             |  |        |  |                                           |  |       |  |       
|Cherry Hill Marketplace
Westland, MI      |  |       |  | 2,639                       |  | 4,113  |  | 6,351                                     |  | 2,640 |  | 10,463
|Grand Traverse Crossing
Traverse City, MI |  | 18,444 |  | 5,375                       |  | 17,993 |  | 357                                       |  | 5,452 |  | 18,273
|The Courtyard
Burton, MI                  |  |       |  | 2,039                       |  | 6,831  |  | 294                                       |  | 2,040 |  | 7,124 

S-III-4

---



SCHEDULE III

BRADLEY OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2004
(In thousands)

The following table sets forth detail with respect to the properties, and related encumbrances, owned by the Company at December 31, 2004.

|                                         |  |       |  | Initial Cost to the Company |  |        |  | Gross Amount Carried at December 31, 2004 |  |        |  |       
|---------------------------------------- |  | ----- |  | --------------------------- |  | ------ |  | ----------------------------------------- |  | ------ |  | ------
|
|Redford Plaza
Redford, MI                |  |      |  | 5,520                       |  | 18,482 |  | 745                                       |  | 5,521  |  | 19,226
|MINNESOTA                                |  |       |  |                             |  |        |  |                                           |  |        |  |       
|Austin Town Center
Austin, MN            |  |      |  | 2,096                       |  | 7,015  |  | 126                                       |  | 2,095  |  | 7,142 
|Brookdale Square
Brooklyn Center, MN     |  |      |  | 2,191                       |  | 7,335  |  | 501                                       |  | 2,220  |  | 7,807 
|Burning Tree Plaza
Duluth, MN            |  |      |  | 3,355                       |  | 11,230 |  | 1,363                                     |  | 3,462  |  | 12,486
|Central Valu Center
Columbia Heights, MN |  |      |  | 2,144                       |  | 7,176  |  | 57                                        |  | 2,193  |  | 7,184 
|Elk Park Center
Elk River, MN            |  | 8,244 |  | 4,440                       |  | 14,866 |  | 302                                       |  | 4,446  |  | 15,162
|Har Mar Mall
Roseville, MN               |  |      |  | 10,281                      |  | 34,418 |  | 4,460                                     |  | 10,322 |  | 38,837
|Hub West / Richfield Hub
Richfield, MN   |  |      |  | 3,269                       |  | 10,948 |  | 1,149                                     |  | 3,270  |  | 12,096
|Marketplace at 42
Savage, MN             |  |      |  | 5,070                       |  | 16,973 |  | 502                                       |  | 5,094  |  | 17,451
|Roseville Center
Roseville, MN           |  |      |  | 1,571                       |  | 5,257  |  | 1,164                                     |  | 1,570  |  | 6,422 
|Southport Centre
Apple Valley, MN        |  | 9,924 |  | 3,915                       |  | 13,106 |  | 205                                       |  | 3,945  |  | 13,281

S-III-5

---



SCHEDULE III

BRADLEY OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2004
(In thousands)

The following table sets forth detail with respect to the properties, and related encumbrances, owned by the Company at December 31, 2004.

|                                             |  |   |  | Initial Cost to the Company |  |        |  | Gross Amount Carried at December 31, 2004 |  |       |  |       
|-------------------------------------------- |  | - |  | --------------------------- |  | ------ |  | ----------------------------------------- |  | ----- |  | ------
|
|Sun Ray Shopping Center
St. Paul, MN         |  |  |  | 4,669                       |  | 15,628 |  | 5,937                                     |  | 4,725 |  | 21,509
|Ten Acres Center
West St. Paul, MN           |  |  |  | 2,368                       |  | 7,930  |  | 585                                       |  | 2,344 |  | 8,539 
|Terrace Mall
Robbinsdale, MN                 |  |  |  | 2,030                       |  | 6,799  |  | 678                                       |  | 2,031 |  | 7,476 
|Westwind Plaza
Minnetonka, MN                |  |  |  | 2,511                       |  | 8,409  |  | 1,329                                     |  | 2,676 |  | 9,573 
|White Bear Hills
White Bear Lake, MN         |  |  |  | 1,412                       |  | 4,732  |  | 110                                       |  | 1,413 |  | 4,841 
|MISSOURI                                     |  |   |  |                             |  |        |  |                                           |  |       |  |       
|Ellisville Square
Ellisville, MO             |  |  |  | 2,577                       |  | 8,627  |  | 875                                       |  | 2,827 |  | 9,252 
|Grandview Plaza
Florissant, MO               |  |  |  | 3,555                       |  | 11,902 |  | 1,462                                     |  | 3,850 |  | 13,069
|Hub Shopping Center
Independence, MO         |  |  |  | 1,578                       |  | 5,281  |  | 669                                       |  | 1,709 |  | 5,819 
|Liberty Corners
Liberty, MO                  |  |  |  | 1,904                       |  | 6,375  |  | 673                                       |  | 2,000 |  | 6,952 
|Maplewood Square
Maplewood, MO               |  |  |  | 1,080                       |  | 3,616  |  | 67                                        |  | 1,080 |  | 3,683 
|Marketplace at Independence
Independence, MO |  |  |  | 4,612                       |  | 15,441 |  | 286                                       |  | 4,663 |  | 15,676
|Prospect Plaza
Gladstone, MO                 |  |  |  | 3,479                       |  | 11,647 |  | 462                                       |  | 3,479 |  | 12,109
|Watts Mill Plaza
Kansas City, MO             |  |  |  | 3,180                       |  | 10,645 |  | 270                                       |  | 3,348 |  | 10,747

S-III-6

---



SCHEDULE III

BRADLEY OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2004
(In thousands)

The following table sets forth detail with respect to the properties, and related encumbrances, owned by the Company at December 31, 2004.

|                                           |  |       |  | Initial Cost to the Company |  |        |  | Gross Amount Carried at December 31, 2004 |  |       |  |       
|------------------------------------------ |  | ----- |  | --------------------------- |  | ------ |  | ----------------------------------------- |  | ----- |  | ------
|
|NEBRASKA                                   |  |       |  |                             |  |        |  |                                           |  |       |  |       
|Bishop Heights
Lincoln, NE                 |  |      |  | 318                         |  | 1,062  |  | 61                                        |  | 370   |  | 1,071 
|Cornhusker Plaza
South Sioux City, NE      |  |      |  | 1,122                       |  | 3,754  |  | 98                                        |  | 1,190 |  | 3,784 
|Eastville Plaza
Fremont, NE                |  |      |  | 1,137                       |  | 3,805  |  | 76                                        |  | 1,162 |  | 3,856 
|Edgewood Shopping Center
Lincoln, NE       |  |      |  | 2,890                       |  | 9,674  |  | 1,367                                     |  | 2,930 |  | 11,001
|The Meadows
Lincoln, NE                    |  |      |  | 1,037                       |  | 3,471  |  | 41                                        |  | 1,037 |  | 3,512 
|Miracle Hills Park
Omaha, NE               |  |      |  | 1,739                       |  | 5,824  |  | 477                                       |  | 1,761 |  | 6,279 
|Stockyards Plaza
Omaha, NE                 |  |      |  | 2,122                       |  | 7,102  |  | 214                                       |  | 2,180 |  | 7,258 
|NEW HAMPSHIRE                              |  |       |  |                             |  |        |  |                                           |  |       |  |       
|Bedford Grove
Bedford, NH                  |  | 4,067 |  | 3,595                       |  | 12,037 |  | 124                                       |  | 3,602 |  | 12,154
|NEW JERSEY                                 |  |       |  |                             |  |        |  |                                           |  |       |  |       
|Cross Keys Commons
Washington Township, NJ |  |      |  | 6,150                       |  | 20,589 |  | 3,416                                     |  | 5,800 |  | 24,355
|NEW MEXICO                                 |  |       |  |                             |  |        |  |                                           |  |       |  |       
|St. Francis Plaza
Santa Fe, NM             |  | 866   |  | 891                         |  | 2,989  |  | 55                                        |  | 946   |  | 2,989 
|NEW YORK                                   |  |       |  |                             |  |        |  |                                           |  |       |  |       
|Salmon Run Plaza
Watertown, NY             |  | 4,938 |  | 2,096                       |  | 7,015  |  | 172                                       |  | 2,103 |  | 7,180 

S-III-7

---



SCHEDULE III

BRADLEY OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2004
(In thousands)

The following table sets forth detail with respect to the properties, and related encumbrances, owned by the Company at December 31, 2004.

|                                       |  |        |  | Initial Cost to the Company |  |        |  | Gross Amount Carried at December 31, 2004 |  |       |  |       
|-------------------------------------- |  | ------ |  | --------------------------- |  | ------ |  | ----------------------------------------- |  | ----- |  | ------
|
|OHIO                                   |  |        |  |                             |  |        |  |                                           |  |       |  |       
|30th Street Plaza
Canton, OH           |  |       |  | 3,071                       |  | 10,279 |  | 34                                        |  | 3,070 |  | 10,314
|Clock Tower Plaza
Lima, OH             |  |       |  | 3,409                       |  | 11,409 |  | 348                                       |  | 3,552 |  | 11,614
|Salem Consumer Square
Trotwood, OH     |  | 10,284 |  | 5,964                       |  | 19,965 |  | 373                                       |  | 6,053 |  | 20,249
|PENNSYLVANIA                           |  |        |  |                             |  |        |  |                                           |  |       |  |       
|Warminster Towne Center
Warminster, PA |  | 21,797 |  | 7,677                       |  | 25,703 |  | 266                                       |  | 7,677 |  | 25,969
|SOUTH DAKOTA                           |  |        |  |                             |  |        |  |                                           |  |       |  |       
|Baken Park
Rapid City, SD              |  |       |  | 3,119                       |  | 10,440 |  | 745                                       |  | 3,119 |  | 11,185
|TENNESSEE                              |  |        |  |                             |  |        |  |                                           |  |       |  |       
|Williamson Square
Franklin, TN         |  | 10,830 |  | 4,779                       |  | 15,994 |  | 2,147                                     |  | 4,777 |  | 18,143
|The Market of Wolfcreek
Memphis, TN    |  | 23,385 |  | 8,365                       |  | 28,006 |  |                                          |  | 8,365 |  | 28,006

S-III-8

---



SCHEDULE III

BRADLEY OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2004
(In thousands)

The following table sets forth detail with respect to the properties, and related encumbrances, owned by the Company at December 31, 2004.

|                                      |  |   |         | Initial Cost to the Company |   |         |  | Gross Amount Carried at December 31, 2004 |           |  |   |       
|------------------------------------- |  | - | ------- | --------------------------- | - | ------- |  | ----------------------------------------- | --------- |  | - | ------
|
|WISCONSIN                             |  |   |         |                             |   |         |  |                                           |           |  |   |       
|Fairacres Shopping Center
Oshkosh, WI |  |   |        |                             |   | 1,563   |  |                                           | 5,230     |  |   | 56    
|Fitchburg Ridge
Madison, WI           |  |   |        |                             |   | 481     |  |                                           | 1,611     |  |   | 866   
|Fox River Plaza
Burlington, WI        |  |   |        |                             |   | 1,654   |  |                                           | 5,536     |  |   | 156   
|Madison Plaza
Madison, WI             |  |   |        |                             |   | 904     |  |                                           | 3,026     |  |   | 328   
|Mequon Pavilions
Mequon, WI           |  |   |        |                             |   | 6,296   |  |                                           | 21,075    |  |   | 2,626 
|Moorland Square
New Berlin, WI        |  |   |        |                             |   | 1,881   |  |                                           | 6,299     |  |   | 67    
|Oak Creek Centre
Oak Creek, WI        |  |   |        |                             |   | 1,357   |  |                                           | 4,546     |  |   | 180   
|Park Plaza
Manitowoc, WI              |  |   |        |                             |   | 1,586   |  |                                           | 5,305     |  |   | 297   
|Spring Mall
Greenfield, WI            |  |   | 8,141   |                             |   | 3,136   |  |                                           | 10,499    |  |   | 4,297 
|Taylor Heights
Sheboygan, WI          |  |   |        |                             |   | 1,976   |  |                                           | 6,618     |  |   | 38    
|                                      |  |   |         |                             |   |         |  |                                           |           |  |   |       
|TOTAL                                 |  | $ | 178,040 |                             | $ | 326,199 |  | $                                         | 1,087,328 |  | $ | 84,454
|                                      |  |   |         |                             |   |         |  |                                           |           |  |   |       

S-III-9

---



SCHEDULE III

|                                        |  | Years ended December 31, |          
|--------------------------------------- |  | ------------------------ | ---------
|
|Cost:                                   |  |                          |          
|Balance, beginning of year              |  | $                        | 1,420,548
|Acquisitions and other additions        |  |                          | 111,415  
|Sale of properties and other deductions |  |                          | (33,982  
|                                        |  |                          |          
|Balance, end of year                    |  | $                        | 1,497,981
|                                        |  |                          |          
|Accumulated Depreciation:               |  |                          |          
|Balance, beginning of year              |  | $                        | 137,559  
|Depreciation provided                   |  |                          | 48,233   
|Sale of properties and other deductions |  |                          | (5,011   
|                                        |  |                          |          
|Balance, end of year                    |  | $                        | 180,781  
|                                        |  |                          |          
|                                        |  |                          |          

S-III-10

---





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