##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended from March 31, 2008
 or
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to .
 Commission File No. 001-32365
 FELDMAN MALL PROPERTIES, INC.
  Maryland
(State or other jurisdiction 
of incorporation or organization)
    
    13-4284187
(I.R.S. Employer
Identification No.)
 1010 Northern Boulevard  Suite 314, Great Neck, New York 11021
 (516) 684-1239
  o þ
  Large accelerated filer oAccelerated filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o
  o þ




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##### 



FELDMAN MALL PROPERTIES, INC.
 INDEX
 PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSFeldman Mall Properties, Inc. and SubsidiariesConsolidated Balance Sheets as of March 31, 2008 (unaudited) and December 31, 2007
    
    3Consolidated Statements of Operations for the three months ended March 31, 2008 and 2007 (unaudited)
    
    4Consolidated Statement of Stockholders Equity and Comprehensive Loss for the three months ended
March 31, 2008 (unaudited)
    
    5Consolidated Statements of Cash Flows for the three months ended March 31, 2008 and 2007 (unaudited)
    
    6Notes to Consolidated Financial Statements (unaudited)
    
    7ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    26ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    37ITEM 4. CONTROLS AND PROCEDURES
    
    38PART II. OTHER INFORMATION
    
    39ITEM 1. LEGAL PROCEEDINGS
    
    39ITEM 1A. RISK FACTORS
    
    39ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    39ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    39ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    39ITEM 5. OTHER INFORMATION
    
    39ITEM 6. EXHIBITS
    
    39Signatures
    
    41EX-31.1EX-32.1
  2




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##### Table of Contents



PART 1. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 FELDMAN MALL PROPERTIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
 March 31, 2008
    
    
    December 31, 2007(Unaudited)ASSETS:Investments in real estate, net
    
    $
    343,682
    
    
    $
    342,897Investment in unconsolidated real estate partnerships
    
    
    47,449
    
    
    
    43,683Cash and cash equivalents
    
    
    15,605
    
    
    
    27,976Restricted cash
    
    
    19,217
    
    
    
    20,395Rents, deferred rents and other receivables, net
    
    
    5,332
    
    
    
    5,545Acquired below-market ground lease, net
    
    
    7,503
    
    
    
    7,538Acquired lease rights, net
    
    
    6,856
    
    
    
    7,281Acquired in-place lease values, net
    
    
    5,978
    
    
    
    6,437Deferred charges, net
    
    
    3,140
    
    
    
    3,394Other assets, net
    
    
    3,463
    
    
    
    4,048Total Assets
    
    $
    458,225
    
    
    $
    469,194LIABILITIES AND STOCKHOLDERS EQUITY:LiabilitiesMortgage loans payable
    
    $
    231,652
    
    
    $
    232,878Junior subordinated debt obligations
    
    
    29,380
    
    
    
    29,380Secured line of credit
    
    
    17,500
    
    
    
    17,500Accounts payable, accrued expenses and other liabilities
    
    
    25,696
    
    
    
    27,211Dividends and distributions payable
    
    
    854
    
    
    
    568Acquired lease obligations, net
    
    
    4,641
    
    
    
    5,136Deferred gain on partial sale of real estate
    
    
    3,515
    
    
    
    3,515Negative carrying value of investment in unconsolidated partnership
    
    
    4,450
    
    
    
    4,450Total liabilities
    
    
    317,688
    
    
    
    320,638Minority interest
    
    
    9,137
    
    
    
    9,677Commitments and contingenciesStockholders EquitySeries A 6.85% cumulative convertible preferred stock; 50,000,000
shares authorized; 2,000,000 shares issued and outstanding at
March 31, 2008 and December 31, 2007; $25.00 liquidation
preference
    
    
    49,580
    
    
    
    49,580Common stock ($0.01 par value, 200,000,000 shares authorized,
13,001,537 and 13,018,831 issued and outstanding at March 31, 2008
and December 31, 2007, respectively)
    
    
    130
    
    
    
    130Additional paid-in capital
    
    
    120,732
    
    
    
    120,542Distributions in excess of earnings
    
    
    (32,670
    )
    
    
    (27,712
    )Accumulated other comprehensive loss
    
    
    (6,372
    )
    
    
    (3,661
    )Total stockholders equity
    
    
    131,400
    
    
    
    138,879Total Liabilities and Stockholders Equity
    
    $
    458,225
    
    
    $
    469,194
  3




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FELDMAN MALL PROPERTIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
 Three Months EndedMarch 31,2008
    
    
    2007Revenue:Rental
    
    $
    7,991
    
    
    $
    7,709Tenant reimbursements
    
    
    3,629
    
    
    
    3,580Management, leasing and development services
    
    
    964
    
    
    
    823Interest and other income
    
    
    249
    
    
    
    2,648Total revenue
    
    
    12,833
    
    
    
    14,760Expenses:Rental property operating and maintenance
    
    
    4,566
    
    
    
    4,331Real estate taxes
    
    
    1,487
    
    
    
    1,578Interest (including amortization of deferred financing costs)
    
    
    4,207
    
    
    
    3,111Depreciation and amortization
    
    
    3,485
    
    
    
    3,405General and administrative
    
    
    3,162
    
    
    
    2,937Total expenses
    
    
    16,907
    
    
    
    15,362Loss from operations
    
    
    (4,074
    )
    
    
    (602
    )Equity in loss of unconsolidated real estate partnerships
    
    
    (579
    )
    
    
    (355
    )Loss before minority interest
    
    
    (4,653
    )
    
    
    (957
    )Minority interest
    
    
    540
    
    
    
    93Net loss
    
    $
    (4,113
    )
    
    $
    (864
    )Basic and diluted loss per share
    
    $
    (0.39
    )
    
    $
    (0.07
    )Basic and diluted weighted average common shares outstanding
    
    
    12,892
    
    
    
    12,857
  4




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FELDMAN MALL PROPERTIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
AND COMPREHENSIVE LOSS
(Amounts in thousands, except share data)
(Unaudited)
 Three months ended March 31, 2008
 AccumulatedNumber of
    
    
    Number of
    
    
    Series A
    
    
    
    
    
    
    Additional
    
    
    Distributions
    
    
    OtherPreferred
    
    
    Common
    
    
    Preferred
    
    
    Common
    
    
    Paid-In
    
    
    in Excess
    
    
    Comprehensive
    
    
    
    
    
    
    ComprehensiveShares
    
    
    Shares
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    of Earnings
    
    
    Loss
    
    
    Total
    
    
    LossBalance at December
31, 2007
    
    
    2,000,000
    
    
    
    13,018,831
    
    
    $
    49,580
    
    
    $
    130
    
    
    $
    120,542
    
    
    $
    (27,712
    )
    
    $
    (3,661
    )
    
    $
    138,879
    
    
    $
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,113
    )
    
    
    
    
    
    
    (4,113
    )
    
    
    (4,113
    )Unrealized loss on
derivative
instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,711
    )
    
    
    (2,711
    )
    
    
    (2,711
    )Restricted stock
forfeited
    
    
    
    
    
    
    (17,294
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Share-based
compensation
expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    190
    
    
    
    
    
    
    
    
    
    
    
    190
    
    
    
    Dividends on
forfeited nonvested
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    9
    
    
    
    Preferred dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (854
    )
    
    
    
    
    
    
    (854
    )
    
    
    Balance at March
31, 2008
    
    
    2,000,000
    
    
    
    13,001,537
    
    
    $
    49,580
    
    
    $
    130
    
    
    $
    120,732
    
    
    $
    (32,670
    )
    
    $
    (6,372
    )
    
    $
    131,400
    
    
    $
    (6,824
    )
  5




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FELDMAN MALL PROPERTIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
 Three Months Ended March 31,2008
    
    
    2007Cash Flows From Operating Activities:Net loss
    
    $
    (4,113
    )
    
    $
    (864
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    3,485
    
    
    
    3,405Amortization of deferred financing costs
    
    
    307
    
    
    
    182Provision for doubtful accounts receivable
    
    
    536
    
    
    
    230Noncash stock compensation
    
    
    190
    
    
    
    150Interest expense (accretion) amortization, net
    
    
    (789
    )
    
    
    (804
    )Amortization of ground rent
    
    
    87
    
    
    
    88Minority interest
    
    
    (540
    )
    
    
    (93
    )Equity in losses of unconsolidated real estate partnerships
    
    
    579
    
    
    
    355Amortization of revenue related to acquired lease rights/obligations
    
    
    (70
    )
    
    
    (22
    )Deferred taxes expense
    
    
    34
    
    
    
    37Other noncash expense (income)
    
    
    9
    
    
    
    (2,282
    )Changes in operating assets and liabilities:Rents, deferred rents and other receivables
    
    
    (323
    )
    
    
    (679
    )Restricted cash relating to operating activities
    
    
    (384
    )
    
    
    (10
    )Other deferred charges
    
    
    (106
    )
    
    
    (255
    )Other assets, net
    
    
    382
    
    
    
    (194
    )Accounts payable, accrued expenses and other liabilities
    
    
    (4,576
    )
    
    
    (1,145
    )Net cash used in operating activities
    
    
    (5,292
    )
    
    
    (1,901
    )Cash Flows From Investing Activities:Expenditures for real estate improvements
    
    
    (3,291
    )
    
    
    (12,706
    )Change in restricted cash relating to investing activities
    
    
    1,562
    
    
    
    (182
    )Investment in unconsolidated real estate partnerships
    
    
    (4,345
    )
    
    
    (1,854
    )Net cash used in investing activities
    
    
    (6,074
    )
    
    
    (14,742
    )Cash Flows From Financing Activities:Proceeds from lines of credit
    
    
    
    
    
    
    9,000Repayment of mortgages payable
    
    
    (437
    )
    
    
    (527
    )Payment of deferred financing costs
    
    
    
    
    
    
    (60
    )Distributions and dividends
    
    
    (568
    )
    
    
    (3,315
    )Net cash (used in) provided by financing activities
    
    
    (1,005
    )
    
    
    5,098Net change in cash and cash equivalents
    
    
    (12,371
    )
    
    
    (11,545
    )Cash and cash equivalents, beginning of period
    
    
    27,976
    
    
    
    13,036Cash and cash equivalents, end of period
    
    $
    15,605
    
    
    $
    1,491Supplemental disclosures of cash flow information:Cash paid during the period for interest, net of amounts capitalized
    
    $
    4,755
    
    
    $
    3,948Supplemental disclosures of noncash investing and financing activities:Accrued renovation costs
    
    
    4,309
    
    
    
    6,109Unrealized loss on derivative instruments
    
    
    (2,711
    )
    
    
    (522
    )Dividends and distributions payable
    
    
    854
    
    
    
    
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FELDMAN MALL PROPERTIES, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
March 31, 2008
(Dollar amounts in thousands, except share and per share data)
 1. Organization and Description of Business
       2. Summary of Significant Accounting Policies
 Basis of Quarterly Presentation
   7




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Principles of Accounting and Consolidation and Equity Method of Accounting
  Consolidation of
Variable Interest Entities
  Accounting for Investments in Real Estate Ventures
    Gains on Disposition of Real Estate
  8




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Managements Estimates
       Cash and Cash Equivalents
  Restricted Cash
  Revenue Recognition and Tenant Receivables
  9




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Deferred Charges
  Investments in Real Estate and Depreciation
   10




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Three Months EndedMarch 31,2008
    
    
    2007Interest
    
    $
    47
    
    
    $
    272Real estate taxes
    
    
    
    
    
    
    79Insurance
    
    
    
    
    
    
    8Total
    
    $
    47
    
    
    $
    359
     March 31, 2008
    
    
    December 31, 2007Buildings and improvements
    
    $
    267,740
    
    
    $
    267,333Tenant improvements
    
    
    55,979
    
    
    
    55,934Construction in progress
    
    
    9,626
    
    
    
    6,436Land
    
    
    38,062
    
    
    
    38,062Total investments in real estate
    
    
    371,407
    
    
    
    367,765Accumulated depreciation
    
    
    (27,725
    )
    
    
    (24,868
    )Investments in real estate, net
    
    $
    343,682
    
    
    $
    342,897
 Impairment of Long-Lived Assets
 Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of
 11




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Restructuring
Costs
 Accounting for Costs Associated with Exit or Disposal Activities
 Derivative Instruments
       12




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Purchase Accounting for Acquisition of Interests in Real Estate Entities
 Business
Combinations
    13




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Income Taxes
     Loss Per Share
  14




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Three months endedMarch 31,2008
    
    
    2007Net loss:
    
    $
    (4,113
    )
    
    $
    (864
    )Less preferred stock dividends
    
    
    (854
    )
    
    
    Net loss available to common stockholdersbasic
    
    
    (4,967
    )
    
    
    (864
    )Net loss attributable to common stockholdersdiluted
    
    $
    (4,967
    )
    
    $
    (864
    )Basic and diluted weighted average common shares outstanding
    
    
    12,891,551
    
    
    
    12,856,661Basic and diluted loss per share
    
    $
    (0.39
    )
    
    $
    (0.07
    )
 Segment Information
  Recent Accounting Pronouncements
 The Fair Value Option for Financial
Assets and Financial Liabilities
    15




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Share-Based Deferred Compensation
    Number of Unvested Shares
    
    
    Weighted Average Share Price2008
    
    
    2007
    
    
    2008
    
    
    2007Beginning balance
    
    
    158,743
    
    
    
    326,074
    
    
    $
    11.91
    
    
    $
    11.28Shares granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shares vested
    
    
    (42,821
    )
    
    
    (32,675
    )
    
    
    12.29
    
    
    
    12.27Shares forfeited
    
    
    (17,294
    )
    
    
    (40,192
    )
    
    
    11.10
    
    
    
    10.51Ending balance
    
    
    98,628
    
    
    
    253,207
    
    
    
    11.88
    
    
    
    11.27
   3. Mortgage Loans Payable
  March 31, 2008
    
    
    December 31, 2007Mortgage loan payable  interest only at
115 basis points over LIBOR (3.97% and
6.18% at March 31, 2008 and December 31,
2007, respectively) payable monthly, due
May 2010, secured by Stratford the Square
Mall
    
    $
    104,500
    
    
    $
    104,500Mortgage loan payable  interest at 8.60%
payable monthly, due July 11, 2029,
anticipated repayment on July 11, 2009,
secured by the Tallahassee Mall
    
    
    44,391
    
    
    
    44,540Mortgage loan payable  interest at 6.60%
payable monthly, due October 11, 2032
anticipated prepayment date of November
11, 2012, secured by the Northgate Mall
    
    
    76,830
    
    
    
    77,117Total mortgages outstanding
    
    
    225,721
    
    
    
    226,157Assumed above-market mortgage premiums, net
    
    
    5,931
    
    
    
    6,721Total mortgage loans payable
    
    $
    231,652
    
    
    $
    232,878
  16




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2008 (nine months)
    
    $
    1,3082009
    
    
    45,1792010
    
    
    1,3242011
    
    
    105,9152012
    
    
    1,3642013 and thereafter
    
    
    70,631Total principal payments
    
    
    225,721Assumed above-market mortgage premiums, net
    
    
    5,931Total
    
    $
    231,652
  4. Junior Subordinated Debt Obligation
  17




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5. Lines of Credit
 $30,000 Secured Line of Credit
     $25,000 Credit Facility
  6. Related Party Transactions
  18




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7. Rentals Under Operating Leases
   Year Ending December 31,2008 (nine months)
    
    $
    18,3732009
    
    
    21,8222010
    
    
    19,7112011
    
    
    16,2562012
    
    
    14,5472013 and thereafter
    
    
    49,145Total future minimum base rentals
    
    $
    139,854
  8. Due to Affiliates
  9. Stockholders Equity
  19




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Stock Repurchase
   10. Minority Interest
  11. Commitment and Contingencies
  20




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12. Investments in Unconsolidated Partnerships
 Foothills Mall
   21




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Harrisburg Mall
       22




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Colonie Center Mall
     23




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March 31, 2008
    
    
    December 31, 2007Investment in real estate, net
    
    $
    337,859
    
    
    $
    333,463Receivables including deferred rents
    
    
    4,299
    
    
    
    4,308Other assets
    
    
    30,068
    
    
    
    31,853Total assets
    
    $
    372,226
    
    
    $
    369,624Mortgage loans payable
    
    $
    243,495
    
    
    $
    233,225Other liabilities
    
    
    44,327
    
    
    
    52,608Owners equity
    
    
    84,404
    
    
    
    83,791Total liabilities and owners equity
    
    $
    372,226
    
    
    $
    369,624The Companys share of owners equity
    
    $
    21,408
    
    
    $
    21,283
  Three Months EndedMarch 31,2008
    
    
    2007Revenue
    
    $
    10,308
    
    
    $
    9,110Operating and other expenses
    
    
    (5,719
    )
    
    
    (5,145
    )Interest expense (including the amortization of deferred financing costs)
    
    
    (3,588
    )
    
    
    (3,072
    )Depreciation and amortization
    
    
    (3,336
    )
    
    
    (3,090
    )Net loss
    
    $
    (2,335
    )
    
    $
    (2,197
    )The Companys share of net loss
    
    $
    (579
    )
    
    $
    (355
    )
   March 31, 2008
    
    
    December 31, 2007Harrisburg Mall
    
    $
    15,447
    
    
    $
    12,415Colonie Center
    
    
    31,755
    
    
    
    31,206Foothills Mall
    
    
    247
    
    
    
    62Total
    
    $
    47,449
    
    
    $
    43,683
 13. Fair Value of Financial Instruments
  24




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##### Table of Contents



14. Financial Instruments  Derivatives and Hedging
  Notional
    
    Strike
    
    Effective
    
    Expiration
    
    FairValue
    
    Rate
    
    Date
    
    Date
    
    Value (1)Interest Rate Swap
    
    $
    75,000
    
    
    
    4.91
    %
    
    
    1/2008
    
    
    
    1/2011
    
    
    $
    (4,577
    )Interest Rate Swap
    
    
    29,500
    
    
    
    5.50
    %
    
    
    6/2007
    
    
    
    5/2010
    
    
    
    (1,873
    )
 
 (1)
    -
    Derivative valuations as of March 31, 2008 in their entirety are classified
in Level 2 of the fair value hierarchy. The Company does not have any significant fair value
measurements using significant unobservable inputs (Level 3) as of March 31, 2008.   15. Subsequent Events
  25




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
   Trends that May Impact Future Operating Results
  
    
    The recovery in U.S. credit markets in the early part of 2008 has not materialized, and
the broader U.S. economy is beginning to feel the adverse impact of this lingering problem.
In particular, we believe that these conditions have resulted in the following:
 
    
    Many commercial real estate lenders have substantially tightened underwriting
standards or have withdrawn from the lending marketplace. These circumstances have
materially impacted liquidity in the debt markets, making financing terms for owners
of retail properties less attractive, and in certain cases have resulted in the
unavailability of certain types of debt financing. As a result, until conditions
change, we expect debt financing and refinancing will be more difficult to obtain and
our borrowing costs on new and refinanced debt will be more expensive compared to
prior periods.
    
    At the same time, constraints on capital is expected to reduce new development
competition in certain of our marketplaces, which may delay the opening of some
competitive projects near our existing properties.
    
    Tighter lending standards and higher borrower costs have exerted downward pressure
on the value and liquidity of real estate assets which will impact the values we
could obtain for our properties in the case of their sale. These factors may make it
more difficult for us to sell properties or may adversely affect the price we receive
for properties that we do sell, as prospective buyers may experience increased costs
of debt financing or difficulties in obtaining debt financing.
    
    These events in the credit markets have also had an adverse effect on other
financial markets in the U.S., which may make it more difficult or costly for us to
raise capital through the issuance of common stock, preferred stock or other equity
securities.
    
    Declining home prices in many regions has also impacted consumer spending, which
in turn has caused a slow start to the 2008 retailing season. Some retailers have
reduced their growth plans for 2009 while others have announced store closures or
delays in new store openings. These factors are expected to impact the pace of our
leasing activity for the balance of 2008.
    
    The increase in many global commodity prices purchased in U.S. dollars has led to
higher than anticipated construction costs in our redevelopment projects.
  26




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##### Table of Contents



Critical Accounting Policies
  Revenue Recognition
     Principles of Consolidation and Equity Method of Accounting
  Consolidation of Variable Interest Entities
  27




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##### Table of Contents



Accounting for
Investments in Real Estate Ventures
    Investments in Real Estate and Real Estate Entities
    Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of
  28




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##### Table of Contents



Gains on Disposition of Real Estate
   Purchase Price Allocation
 Business
Combinations
    Depreciation
  Derivative Instruments
  29




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##### Table of Contents



Results of Operations
 Overview
  Comparison of the Three Months Ended March 31, 2008 to the Three Months Ended March 31, 2007
 Revenues
     Expenses
  30




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##### Table of Contents



Other
  ,
 Cash Flows
 Comparison of the Three Months ended March 31, 2008 to the Three Months ended March 31, 2007
     31




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##### Table of Contents



Liquidity and Capital Resources
 Overview
    Short-Term Liquidity Requirements
    Harrisburg Mall.
 Colonie Center.
 32




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##### Table of Contents



Foothills Mall.
   Long-Term Liquidity Requirements
     Stock Repurchase
  33




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##### Table of Contents



Contractual Obligations
  Our Share of
    
    
    
    
    
    
    Our Share ofCapital Expenditure
    
    
    
    
    
    
    Long-TermConsolidated
    
    
    Commitments in
    
    
    Consolidated
    
    
    Debt inCapital Expenditure
    
    
    Unconsolidated
    
    
    Long-Term
    
    
    Unconsolidated
    
    
    Operating andYear
    
    Commitments
    
    
    Joint Ventures
    
    
    Debt(1)
    
    
    Joint Ventures(1)
    
    
    Ground Leases
    
    
    Total2008 (nine months)
    
    $
    9,260
    
    
    $
    6,587
    
    
    $
    13,844
    
    
    $
    42,641
    
    
    $
    452
    
    
    $
    72,7842009
    
    
    4,291
    
    
    
    1,331
    
    
    
    61,734
    
    
    
    1,517
    
    
    
    532
    
    
    
    69,4052010
    
    
    
    
    
    
    
    
    
    
    115,005
    
    
    
    1,517
    
    
    
    450
    
    
    
    116,9722011
    
    
    
    
    
    
    
    
    
    
    8,763
    
    
    
    1,640
    
    
    
    351
    
    
    
    10,7542012
    
    
    
    
    
    
    
    
    
    
    8,240
    
    
    
    1,826
    
    
    
    265
    
    
    
    10,3312013 and thereafter
    
    
    
    
    
    
    
    
    
    
    159,505
    
    
    
    31,341
    
    
    
    23,311
    
    
    
    214,157Total
    
    $
    13,551
    
    
    $
    7,918
    
    
    $
    367,091
    
    
    $
    80,482
    
    
    $
    25,361
    
    
    $
    494,403
 
 (1)
    
    Amounts include interest payments based on contractual terms and current interest rates for
variable rate debt. Mortgage Loans
 Northgate Mall
  Tallahassee Mall
  $104.5 Million Stratford Square Refinancing
  $30 Million Secured Line of Credit
   34




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##### Table of Contents



Colonie Center Mall Joint Venture
   Foothills Mall Joint Venture
  Harrisburg Mall Joint Venture
   Capital Expenditures
 35




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##### Table of Contents



Off-Balance Sheet Arrangements
 Loan Guarantees
  Forward Swap Contracts
   Tax Indemnifications
   Funds From Operations
  36




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##### Table of Contents



Three Months EndedMarch 31,2008
    
    
    2007Net loss
    
    $
    (4,113
    )
    
    $
    (864
    )Add:Depreciation and amortization (excluding non-real estate furniture and fixtures)
    
    
    3,354
    
    
    
    3,297FFO
contribution from unconsolidated joint ventures
    
    
    819
    
    
    
    625Less:Preferred stock dividends
    
    
    (854
    )
    
    
    Minority interest
    
    
    (540
    )
    
    
    (93
    )FFO available to common stockholders and OP unit holders
    
    $
    (1,334
    )
    
    $
    2,965
 
 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
  Market Risk Related to Fixed Rate Debt
    Market Risk Related to Other Obligations
   Inflation
  37




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
    
    
    Adequacy of Accounting Personnel We lacked personnel possessing technical accounting
expertise adequate to ensure that our consolidated financial statements were prepared
accurately and on a timely basis. As a result, certain controls and reconciliations
associated with financial statement account balances were not performed on a timely basis,
journal entries were recorded without adequate support, and review and approval procedures
associated with critical financial reporting process controls were not documented. This
material weakness in internal control over financial reporting resulted in misstatements
that were corrected prior to the issuance of the 2007 annual and interim financial
statements and there is a reasonable possibility that a material misstatement in the
financial statements would not be prevented or detected on a timely basis.
    
    Segregation of Duties We did not maintain adequate segregation of duties related to
job responsibilities for initiating, authorizing, and recording transactions. Due to this
material weakness, there is a reasonable possibility that a material misstatement in the
financial statements would not be prevented or detected on a timely basis.
  Managements Remedial Actions
  38




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
  
 PART II OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 3.1
    
    Amended and Restated Articles of Incorporation of Feldman Mall
Properties, Inc, incorporated by reference from the Companys
Registration Statement on Form S-11 (File No. 333-118246), filed on
December 15, 2004.3.2
    
    Second Amended and Restated Bylaws of Feldman Mall Properties, Inc.,
incorporated by reference from the Companys Current Report on Form
8-K filed on March 17, 2005.3.3
    
    Amended and Restated Agreement of Limited Partnership of Feldman
Equities Operating Partnership, LP, dated as of December 21, 2004,
incorporated by reference from the Companys Annual Report on Form
10-K filed on April 15, 2005.3.4
    
    First Amendment to Amended and Restated Agreement of Limited
Partnership of Feldman Equities Operating Partnership, LP, dated as
of December 21, 2004, incorporated by reference from the Companys
Current Report on Form 10-K filed on April 15, 2005.3.5
    
    Declaration of Trust of Feldman Holdings Business Trust I, dated as
of November 18, 2004, incorporated by reference from the Companys
Registration Statement on Form S-11 (File No. 333-118246), filed on
December 15, 2004.3.6
    
    Declaration of Trust of Feldman Holdings Business Trust II, dated as
of November 18, 2004, incorporated by reference from the Companys
Registration Statement on Form S-11 (File No. 333-118246), filed on
December 15, 2004.3.7
    
    Amended and Restated Operating Agreement of Feldman Equities of
Arizona, LLC, dated as of August 13, 2004, by and between Feldman
Partners, LLC, Feldman Equities Operating Partnership, LP, Lawrence
Feldman, Jeffrey Erhart and Edward Feldman, incorporated by reference
from the Companys Registration Statement on Form S-11 (File No.
333-118246), filed on December 15, 2004.3.8
    
    Second Amended and Restated Agreement of Limited Agreement of Limited
Partnership of Feldman Equities Operating
 39




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##### Table of Contents



Partnership, LP, dated as
of August 26, 2005, incorporated by reference from the Companys
Current Report on Form 8-K filed on August 30, 2005.3.9
    
    Articles Supplementary designating 6.85% Series A Cumulative
Convertible Preferred Stock, par value $0.01 per share, liquidation
preference $25.00 per share, dated as of April 10, 2007, incorporated
by reference to the Company Current Report on Form 8-K, filed on
April 16, 2007.31.1
    
    Certification by the President and Chief Financial Officer pursuant
to section 302 of the Sarbanes-Oxley Act of 2002 filed herewith.32.1
    
    Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 202 filed herewith.
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##### Table of Contents



SIGNATURES
  Date: May 23, 2008
    FELDMAN MALL PROPERTIES, INC.By:
    /s/ Thomas WirthName:
    Thomas WirthTitle:
    President and Chief Financial Officer 41