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SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




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FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
 COMMISSION FILE NUMBER: 001-13243



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PAN PACIFIC RETAIL PROPERTIES, INC.


(Exact Name of Registrant as Specified in Its Charter)


|                         |  |                                     
|------------------------ |  | ------------------------------------
|Maryland                 |  | 33-0752457                          
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)

|                                              |  |           
|--------------------------------------------- |  | ----------
|1631-B South Melrose Drive,
Vista, California |  | 92083     
|(Address of Principal Executive Offices)      |  | (zip code)

Registrants telephone number, including area code: (760) 727-1002
 
Securities registered pursuant to Section 12(b) of the Act:

|                              |  |                                          
|----------------------------- |  | -----------------------------------------
|Title of Each Class           |  | Name of Each Exchange on Which Registered
|                              |  |                                          
|Common Stock, $0.01 par value |  | New York Stock Exchange                  

Securities registered pursuant to Section 12(g) of the Act: None



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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 [X] No [   ].

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. [   ]

The aggregate market value of the shares of common stock held by
non-affiliates was approximately $999,392,000 based upon the closing price on
the New York Stock Exchange for such shares of $30.29 on March 18, 2002.

As of March 18, 2002, the number of shares of the Registrants common
stock outstanding was 33,277,564.



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TABLE OF CONTENTS



|              |                                                                                               |  |  |  |  |  |  | 
|------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I       
|              | ITEM 1. BUSINESS                                                                             
|              | ITEM 2. PROPERTIES                                                                           
|              | ITEM 3. LEGAL PROCEEDINGS                                                                    
|              | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|PART II      
|              | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                
|              | ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA                                                 
|              | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|              | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          
|              | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                          
|              | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 
|PART III     
|              | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                  
|              | ITEM 11. EXECUTIVE COMPENSATION                                                              
|              | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                      
|              | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                      
|PART IV      
|              | ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                     
|SIGNATURES   
|EXHIBIT 10.11
|EXHIBIT 10.12
|EXHIBIT 10.13
|EXHIBIT 10.14
|EXHIBIT 21.1 
|EXHIBIT 23.1 



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DOCUMENTS INCORPORATED BY REFERENCE

Part III of this report on Form 10-K incorporates by reference information
from our definitive proxy statement for our 2002 Annual Meeting of Stockholders
to be filed with the Securities and Exchange Commission within 120 days of the
close of our fiscal year.

PAN PACIFIC RETAIL PROPERTIES, INC.
TABLE OF CONTENTS
 PART I

|                |                                                                                       |     |    |  | 
|--------------- | ------------------------------------------------------------------------------------- | --- | -- |  | 
|                | Page                                                                                 
|                |                                                                                      
|ITEM 1.         | BUSINESS                                                                              |     | 1 
|ITEM 2.         | PROPERTIES                                                                            |     | 9 
|ITEM 3.         | LEGAL PROCEEDINGS                                                                     |     | 24 | 
|ITEM 4.         | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   |     | 24 | 
|               
|PART II        
|               
|ITEM 5.         | MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                 |     | 24 | 
|ITEM 6.         | SELECTED CONSOLIDATED FINANCIAL DATA                                                  |     | 25 | 
|ITEM 7.         | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |     | 26 | 
|ITEM 7A         | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |     | 32 | 
|ITEM 8.         | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                           |     | 33 | 
|ITEM 9.         | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  |     | 33 | 
|               
|PART III       
|               
|ITEM 10.        | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                    |     | 34 | 
|ITEM 11.        | EXECUTIVE COMPENSATION                                                                |     | 34 | 
|ITEM 12.        | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                        |     | 34 | 
|ITEM 13.        | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                        |     | 34 | 
|               
|PART IV        
|               
|ITEM 14.        | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
        FORM 8-K               |     | 34 | 
|               
|FINANCIAL PAGES |                                                                                       | F-1 |   



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PART I




ITEM 1. BUSINESS

We are a self-administered and self-managed real estate investment trust,
or REIT. Our portfolio consists principally of community and neighborhood
shopping centers predominantly located in five key Western U.S. markets.

As of December 31, 2001, we owned a portfolio comprised of 108 shopping
center properties, of which 105 are located in the Western United States
including 42 in Northern California, 15 in Southern California, 23 in Oregon,
13 in Nevada and 12 in Washington. The portfolio includes approximately 15.3
million square feet of retail space, which was 97.1% leased to a diverse mix of
2,370 tenants.

On November 13, 2000, we acquired Western Properties Trust, a California
real estate investment trust. The transaction was a stock for stock exchange
whereby Western common shares and units were exchanged into newly issued
Company common shares and operating subsidiary units, based upon a fixed
exchange ratio of 0.62. In connection with this transaction, we assumed
Westerns obligations under its senior notes and the indentures under which
they were issued. As a result, we issued 10,754,776 shares of our common stock
to holders of Western common shares and were obligated to issue 911,934 shares
of our common stock upon the exchange of operating subsidiary units held by
limited partners of Pan Pacific (Kienows), L.P., formerly Western/Kienow, L.P.,
and Pan Pacific (Pinecreek), L.P., formerly Western/Pinecreek, L.P.

We employed 105 people as of December 31, 2001, including five executive
officers and senior personnel, in the areas of administration, accounting
services, property management, maintenance, leasing, acquisitions and business
development. Our executive offices are located at 1631-B South Melrose Drive,
Vista, California, and our telephone number is (760) 727-1002. In addition to
personnel located at our executive offices, we operate regional offices in Las
Vegas, Nevada; Kent, Washington; Portland, Oregon; and Sacramento, California.
Each of our regional offices is responsible for property management,
maintenance and leasing.

We have elected to be taxed as a REIT under Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended commencing with our taxable year
ended December 31, 1997. We believe that, commencing with our taxable year
ended December 31, 1997, we have been organized and have operated in such a
manner so as to qualify for taxation as a REIT under the Internal Revenue Code,
and we intend to continue to operate in such a manner, but we cannot assure you
that we will continue to operate in such a manner so as to qualify or remain
qualified. Even if we qualify for taxation as a REIT, we may be subject to
certain federal, state and local taxes on our revenue and properties.

Business Strategies

Our business strategies involve three fundamental practices:



| |  |  | Owning, operating, acquiring, expanding and
developing shopping centers in select markets with strong
economic and demographic characteristics in order to establish
and maintain a portfolio of real estate assets with stable
income and the potential for long-term growth;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Developing local and regional market expertise
through the hands-on participation of senior management in
property operations and leasing in order to capitalize on
market trends, retailing trends and acquisition opportunities;
and                                        
|
| |  |  | Establishing and maintaining a diversified and
complementary tenant mix with an emphasis on tenants that
provide day-to-day consumer necessities in order to provide
steady rental revenue.                                                                                   

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Growth Strategies

Our principal growth strategy is to acquire shopping centers that provide
an opportunity to expand in current markets or which allows us to establish a
presence in targeted markets with favorable economic and demographic
characteristics.



| |  |  | We seek to acquire properties that can benefit
from our hands-on management, that may require repositioning,
redevelopment or renovation, or which can be purchased at
attractive capitalization rates and are consistent in terms of
quality and location with our existing portfolio.                                                                                                                                                                                                                                                                      
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | We seek to continue to utilize our in-depth
market knowledge within our five key markets to pursue our
strategy of opportunistic acquisitions of shopping centers for
long-term investment. We believe that significant
opportunities continue to exist within these markets to
acquire shopping center properties that are consistent with
our existing portfolio in terms of quality of construction,
positive submarket demographics and location attributes and
that provide attractive initial investment yields with
potential for growth in cash flow.
|
| |  |  | We further believe we have certain competitive
advantages which enhance our ability to identify and
capitalize on acquisition opportunities, including: (i)
long-standing relationships with institutional and other
owners of shopping center properties in our five key markets;
(ii) fully integrated real estate operations which enable us
to respond quickly to acquisition opportunities and to
capitalize on the resulting economies of scale; and (iii)
access to capital as a public company.                                                      

From the closing of our initial public offering on August 13, 1997 through
October 31, 2000, we acquired 39 shopping centers totaling 5,230,374 square
feet of retail space for approximately $435,800,000. In November 2000, through
our acquisition of Western, we acquired 50 additional properties totaling
5,652,044 square feet of retail space for approximately $440,000,000 in stock
and the assumption of Westerns debt. In 2001, we acquired another four
properties. All of these 93 properties are located in our five key markets,
and 70 of the shopping centers (75%) are anchored by grocery stores. We
believe that all of these shopping centers are located in markets with strong
demographic characteristics. We intend to add value to these retail properties
through the application of our active, hands-on management and aggressive
leasing strategies. We believe that current market conditions are generally
favorable to acquisitions and, as such, we intend to continue acquiring
properties as our primary growth strategy.

We also seek to maximize the cash flow from our properties by continuing
to enhance the operating performance of each property through our in-house
leasing and property management programs.

We aggressively pursue:



| |  |  | the leasing of currently available space;                                                                                                                                          
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the renewal or releasing of expiring leases at
higher rental rates which we believe currently are available
based on current market conditions and our recent leasing
activity; and
|
| |  |  | economies of scale in the management and leasing
of properties that may be realized by focusing our acquisition
activities within our five key markets.                            

Financing Strategies

Our financing strategies are to maintain a strong and flexible financial
position by maintaining a prudent level of leverage, maintaining a pool of
unencumbered assets and managing our variable interest rate exposure. We
intend to finance future acquisitions with the most advantageous source of
capital available to us at the time of an acquisition, which may include the
sale of common stock, preferred stock or debt securities through public
offerings or private placements, the incurrence of additional indebtedness
through secured or unsecured borrowings and the issuance of operating units of
a subsidiary in exchange for contributed property.

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During 1998, we completed a secondary offering of 4,348,000 shares of
common stock at $21.125 per share. The net proceeds to us were approximately
$85,913,000. The proceeds were used primarily to pay down the Revolving Credit
Agreement. We also obtained an increase to our Revolving Credit Agreement from
$150,000,000 to $200,000,000 and a reduction in the top borrowing rate
thereunder to LIBOR plus 1.375%.

During 1998, we formed Pan Pacific (Portland), LLC with us as sole
managing member. In the fourth quarter, Pan Pacific (Portland) acquired a
portfolio of six shopping centers located in Oregon. In exchange for four
properties which were contributed to Pan Pacific (Portland), 832,617 units were
issued to certain non-managing members. Distributions are made to the
non-managing members at a rate equal to the dividend distribution paid by us on
a share of our common stock. A non-managing member can seek redemption of
their units after the first anniversary. We may, at our option, redeem the
units by either (i) issuing common stock at the rate of one share for each
unit, or (ii) by paying cash for units based on a ten day average stock price.
During 2001, 400,000 units were redeemed for common stock.

During 1999, we completed a number of financing transactions. At the end
of the second quarter, we closed a $35,000,000 financing transaction evidenced
by notes, bearing interest at 7.2%, due in July 2006 and secured by deeds of
trust on two properties, Rainbow Promenade and San Dimas Marketplace. At the
beginning of the third quarter, we closed a second financing transaction for
$56,300,000 evidenced by notes, bearing interest at 7.1%, due in August 2009
and secured by deeds of trust on four properties, Melrose Village Plaza,
Monterey Plaza, Tustin Heights Shopping Center and Tanasbourne Village. The
proceeds were used to pay down our unsecured credit facility.

In the third quarter of 1999, we formed Pan Pacific (Rancho Las Palmas),
LLC and Pan Pacific (RLP), Inc. in connection with the acquisition of Rancho
Las Palmas. We and Pan Pacific (RLP) are co-managing members of Pan Pacific
(Rancho Las Palmas). As part of the acquisition, and in exchange for an
interest in the asset contributed to Pan Pacific (Rancho Las Palmas) by an
individual, 314,587 units were issued to this individual, a non-managing
member. Distributions are made to the non-managing member at a rate equal to
dividend distributions paid by us on a share of our common stock. The
non-managing member can seek redemption of its units after the first
anniversary. We, at our option, may redeem the units by either (i) issuing
common stock at the rate of one share for each unit, or (ii) by paying cash for
units based on a ten day average stock price.

In December 1999, we entered into a loan modification agreement with the
lender on Chino Town Square. Pursuant to the terms of the modification
agreement, the maturity date was extended to January 2010 and the interest rate
was reduced from 8.00% to 7.72%. This loan previously had a maturity date of
March 2000.

In December 1999, we extended our $200,000,000 Unsecured Credit Facility
for an additional three years. In October 1999, we received an investment
grade credit rating from Standard & Poors. Because of this rating, the
borrowing rate on the credit line was reduced to LIBOR plus 1.15%. In November
2000, we also received an investment grade credit rating from Moodys Investors
Service.

In connection with our acquisition of Western in November 2000, we entered
into new financing arrangements including a $300,000,000 Revolving Credit
Agreement and a $100,000,000 Term Credit Agreement. The Revolving Credit
Agreement matures in January 2004 and the Term Credit Agreement was repaid in
full in July 2001. Our borrowing rate under the Revolving Credit Agreement is
LIBOR plus 1.10% while the borrowing rate under the Term Credit Agreement was
LIBOR plus 1.20%.

In connection with our acquisition of Western, we assumed Westerns
obligations including its Unsecured Senior Notes in principal amounts of
$50,000,000 bearing interest at 7.875% due 2004, $25,000,000 bearing interest
at 7.10% due 2006, $25,000,000 bearing interest at 7.20% due 2008 and
$25,000,000 bearing interest at 7.30% due 2010, and the indentures under which
these notes were issued. We also assumed a mortgage note bearing interest at
7.61% due May 2004 in the principal amount of $9,628,000, secured by a deed of
trust on Lakewood Village.

In April 2001, we issued $150,000,000 in aggregate principal amount of
7.95% senior notes due April 2011. We sold these notes at 99.225% of the
principal amount. We used the net proceeds from the offering to pay off our
Term Credit Agreement and to repay borrowings under our Revolving Credit
Agreement.

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Dispositions

During 1999, we disposed of three non-strategic assets. In June, we sold
a single-tenant property in Hillsboro, Oregon. The net proceeds from the sale
were used to repay indebtedness under our unsecured credit facility. In
December, we sold Rosewood Village, a 50,000 square foot property in Northern
California. The net proceeds were used to acquire the Cable Park property in a
like-kind exchange transaction pursuant to Section 1031 of the Internal Revenue
Code. Also in December, we sold Foothill Center, a 20,000 square foot property
in Southern California. We took back a portion of the proceeds as a note
receivable secured by a deed of trust. The balance of the net proceeds,
received in cash, was used to repay indebtedness under our unsecured credit
facility. During 2001, the note receivable was paid off in full.

In December 2000, we disposed of a single-tenant non-strategic asset
located in Santa Cruz, California. The asset was a part of the Western
portfolio and was sold for an amount equal to its net book value. We took back
a portion of the proceeds as a note receivable secured by a deed of trust. The
balance of the net proceeds, received in cash, was placed with an exchanger and
used to acquire a shopping center property in a like-kind exchange transaction
pursuant to Section 1031 of the Internal Revenue Code.

During 2001, we disposed of a non-strategic shopping center, five single
tenant assets, a 30% interest we owned in a shopping center and four parcels of
land. We took back a portion of the proceeds as a note receivable secured by a
deed of trust on the sale of the non-strategic shopping center. The balance of
the net proceeds on this sale, received in cash, was used to repay indebtedness
under our Revolving Credit Agreement. The net proceeds on the sale of one of
the single tenant assets was also received in cash and was used to repay
indebtedness under our Revolving Credit Agreement. The net proceeds on the
remaining sales were placed with an exchanger and used to acquire other
strategic shopping center properties in like-kind exchange transactions
pursuant to Section 1031 of the Internal Revenue Code.

We may dispose of certain non-strategic assets over the next twelve
months. However, if after taking into account the tax consequences of any
disposition, including our continued ability to qualify as a REIT, we determine
that a disposition would not be in our best interest, we will not dispose of
such asset.

Certain Cautionary Statements

Real Estate Investment Associated Risks.Real property investments are
subject to varying degrees of risk. The yields available from equity
investments in real estate depend in large part on the amount of income
generated and expenses incurred. If our properties do not generate revenue
sufficient to meet operating expenses, including debt service, tenant
improvements, leasing commissions and other capital expenditures, we may have
to borrow additional amounts to cover fixed costs. This would adversely affect
our cash flow and ability to service our debt and make distributions to our
stockholders.

Our revenue and the value of our properties may be adversely affected by a
number of factors, including:



| |  |  | the national economic climate;                                                      
| | - |  | ------------------------------------------------------------------------------------
|
| |  |  | the local economic climate;                                                         
|
| |  |  | local real estate conditions;                                                       
|
| |  |  | changes in retail expenditures by consumers;                                        
|
| |  |  | the perceptions of prospective tenants of the attractiveness of the properties;     
|
| |  |  | the success of our anchor tenants;                                                  
|
| |  |  | our ability to manage and maintain the properties and secure adequate insurance; and
|
| |  |  | increases in operating costs (including real estate taxes, insurance and utilities).

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In addition, real estate values and income from properties are also
affected by factors such as applicable laws, including tax laws, interest rate
levels and the availability of financing.

Our Potential Inability to Retain Tenants and Relet Space.We will be
subject to the risks that, upon expiration or termination, leases may not be
renewed, the space may not be relet or the terms of renewal or reletting
(including the cost of required renovations) may be less favorable than current
lease terms. Leases covering a total of approximately 7.1% and 48.5% of the
leased gross leasable area, or GLA, of our properties will expire through the
end of 2002 and 2006, respectively. We budget for renovation and reletting
expenses, which takes into consideration our view of both the current and
expected market conditions in the geographic regions in which our properties
are located, but budgeted amounts may be insufficient to cover these costs.
Our cash flow and ability to make expected distributions to stockholders could
be adversely affected, if:



| |  |  | we are unable to promptly relet or renew leases for all or a substantial portion of this space;
| | - |  | -----------------------------------------------------------------------------------------------
|
| |  |  | the rental rates upon renewal or reletting are significantly lower than expected; or           
|
| |  |  | our budgeted amounts for these purposes prove inadequate.                                      

Dependence on Market Conditions in the Geographic Regions.We have 42
properties with total GLA of 5,908,000 square feet located in Northern
California, 15 properties with total GLA of 2,268,000 square feet located in
Southern California, 23 properties with total GLA of 2,557,000 square feet
located in Oregon, 13 properties with total GLA of 2,091,000 square feet
located in Nevada and 12 properties with total GLA of 2,092,000 square feet
located in Washington. To the extent that general economic or other relevant
conditions in these regions decline and result in a decrease in consumer demand
in these regions, the results of our operations may be adversely affected.

Potential Illiquidity of Real Estate.Equity real estate investments are
relatively illiquid. This illiquidity limits our ability to adjust our
portfolio promptly in response to changes in economic or other conditions. In
addition, the Internal Revenue Code limits a REITs ability to sell properties
held for fewer than four years, which may limit our ability to sell our
properties at optimal times and for the highest price.

Competition with Other Developers and Real Estate Companies.There are
numerous commercial developers and real estate companies that compete with us
in seeking tenants for properties, properties for acquisition and land for
development. There are numerous shopping facilities that compete with our
properties in attracting retailers to lease space. In addition, retailers at
our properties face increasing competition from outlet stores, discount
shopping clubs, and other forms of marketing of goods, such as direct mail,
internet marketing and telemarketing. This competition may reduce properties
available for acquisition or development, reduce percentage rents payable to us
and may, through the introduction of competition, contribute to lease defaults
or insolvency of tenants. Thus, competition could materially affect our
ability to generate net income, service our debt and make distributions to our
stockholders.

Cost of Compliance with Changes in Laws.Because increases in income,
service or transfer taxes are generally not passed through to tenants under
leases, these increases may adversely affect our cash flow and our ability to
service our debt and make distributions to stockholders. Our properties are
also subject to various federal, state and local regulatory requirements, such
as 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 governmental
authorities or awards of damages to private litigants. In addition, these
requirements may not be changed and new requirements may be imposed that would
require significant unanticipated expenditures by us. Any of these events
could adversely affect our cash flow and expected distributions.

Reliance on Certain Tenants and Anchors.Our income and funds from
operations could be adversely affected in the event of the bankruptcy or
insolvency, or a downturn in the business, of any anchor store, or if any
anchor tenant does not renew its lease when it expires. If tenant sales at our
properties were to decline, tenants might be unable to pay their rent or other
occupancy costs. In the event of default by a tenant, delays and costs in
enforcing our rights could be experienced. In addition, the closing of one or
more anchor-occupied stores or lease termination by one or more anchor tenants
of a shopping center, whose leases may permit termination, could adversely
impact that property and result in lease terminations or reductions in rent by
other tenants, whose leases may permit termination or rent reduction in those
circumstances. This could adversely affect our ability to re-lease the space
that is vacated. Each of these developments could adversely affect our funds
from operations and our ability to

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service our debt and make expected distributions to stockholders.

Lack of Operating History With Respect to the Recent Acquisition and
Development of Properties.At December 31, 2001, we owned and operated 108
properties, consisting of approximately 15.3 million square feet of space.
Fifty-three of our properties were acquired during 2000, primarily through the
acquisition of Western, and may have characteristics or deficiencies currently
unknown to us that affect their value or revenue potential. It is also
possible that the operating performance of these properties may decline under
our management. As we acquire additional properties, we will be subject to
risks associated with managing new properties, including lease-up and tenant
retention. In addition, our ability to manage our growth effectively will
require us to successfully integrate our new acquisitions into our existing
management structure. We may not succeed with this integration or effectively
manage additional properties. Also, newly acquired properties may not perform
as expected.

Dependence on Key Management Personnel.Our executive officers have
substantial experience in owning, operating, managing, acquiring and developing
shopping centers. We believe that our success will depend in large part upon
their efforts. If any key management personnel do not remain in our employ, we
could be materially adversely affected.

Debt Financing and Existing Debt Maturities.We are subject to risks
normally associated with debt financing, including:



| |  |  | the risk that our cash flow will be insufficient
to meet required payments of principal and interest;                                                          
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the risk that existing indebtedness on our
properties (which in all cases will not have been fully
amortized at maturity) will not be able to be refinanced; or
|
| |  |  | the terms of any refinancing will not be as
favorable as the terms of existing indebtedness.                                                                   

At December 31, 2001, we had outstanding indebtedness of approximately
$668,235,000. Since we anticipate that only a small portion of the principal
of the indebtedness will be repaid prior to maturity, and that we will not have
funds on hand sufficient to repay the balance of the indebtedness in full at
maturity, it will be necessary for us to refinance the debt either through
additional borrowings or equity or debt offerings. If principal payments due
at maturity cannot be refinanced, extended or paid with proceeds of other
capital transactions, we expect that our cash flow will not be sufficient in
all years to pay distributions at expected levels and to repay all of this
maturing debt. Also, if prevailing interest rates or other factors at the time
of refinancing (such as the reluctance of lenders to make commercial real
estate loans) result in higher interest rates upon refinancing, the interest
expense relating to refinanced indebtedness would increase. This could
adversely affect our cash flow and our ability to make expected distributions
to our stockholders. In addition, if we are unable to refinance the
indebtedness on acceptable terms, we might dispose of properties upon
disadvantageous terms, which might result in losses to us and might adversely
affect funds available for distribution to stockholders.

Potential Defaults Under Mortgage Financing.At December 31, 2001, we had
approximately $229,135,000 of mortgage financing. The payment and other
obligations under certain of the mortgage financing is secured by
cross-collateralized and cross-defaulted first mortgage liens in the aggregate
amount of approximately $54,545,000 on four properties, $52,004,000 on four
other properties, $17,530,000 on three properties and $33,680,000 on two
properties. If we are unable to meet our obligations under the mortgage
financing, the properties securing that debt could be foreclosed upon. This
could have a material adverse effect on us and our ability to make expected
distributions and could threaten our continued viability.

Rising Interest Rates and Variable-Rate Debt.Advances under our
Revolving Credit Agreement bear interest at a variable-rate. In addition, we
may incur other variable-rate indebtedness in the future. Increases in
interest rates on that indebtedness would increase our interest expense, which
could adversely affect our cash flow and our ability to service our debt and
pay expected distributions to stockholders.

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Tax Liabilities as a Consequence of Failure to Qualify as a REIT.
Commencing with our taxable year ended December 31, 1997, we believe that we
have qualified as a REIT under the Internal Revenue Code. Qualification as a
REIT involves the satisfaction of numerous requirements (some on an annual and
some on a quarterly basis) established under highly technical and complex
Internal Revenue Code provisions for which there are only limited judicial and
administrative interpretations. These requirements involve the determination
of various facts and circumstances not entirely within our control.
Legislation, new regulations, administrative interpretations or court decisions
may significantly change the tax laws with respect to qualification as a REIT
or the federal income tax consequences of such qualification.

If we fail to qualify as a REIT in any taxable year, we would be subject
to federal income tax (including any applicable alternative minimum tax) on our
taxable income at regular corporate rates. Moreover, unless we were entitled
to relief under certain statutory provisions, we also would be disqualified
from treatment as a REIT for the four taxable years following the year in which
we lost our qualification. This treatment would significantly reduce our net
earnings available for distribution to stockholders because of our additional
tax liability for the years involved. In addition, distributions to
stockholders would no longer be required.

Acquisition and Development Investments May Not Perform as Expected.We
intend to continue acquiring, developing and redeveloping shopping center
properties. Acquisitions of retail properties entail risks that investments
will fail to perform as expected. Estimates of development costs and costs of
improvements, to bring an acquired property up to standards established for the
market position intended for that property, may prove inaccurate.

We intend to expand or renovate our properties from time to time.
Expansion and renovation projects generally require expenditure of capital as
well as various government and other approvals, which we may not receive.
While our policies with respect to expansion and renovation activities are
intended to limit some of the risks otherwise associated with such activities,
we will still incur certain risks, including expenditures of funds on, and
devotion of managements time to, projects that may not be completed.

We anticipate that future acquisitions, development and renovations will
be financed through a combination of advances under our Revolving Credit
Agreement and other forms of secured or unsecured financing. If new
developments are financed through construction loans, there is a risk that,
upon completion of construction, permanent financing for newly developed
properties may not be available or may be available only on disadvantageous
terms.

It is possible that we will expand our business to new geographic markets
in the future. We will not initially possess the same level of familiarity
with new markets outside of the geographic areas in which our properties are
currently located. This could adversely affect our ability to acquire,
develop, manage or lease properties in any new localities.

We also intend to develop and construct shopping centers in accordance
with our business and growth strategies. Risks associated with our development
and construction activities may include:



| |  |  | abandonment of development opportunities;                                                                                      
| | - |  | -------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | construction costs of a property exceeding
original estimates, possibly making the property uneconomical;                      
|
| |  |  | occupancy rates and rents at a newly completed
property may not be sufficient to make the property
profitable;                 
|
| |  |  | financing may not be available on favorable terms
for development of a property; and                                           
|
| |  |  | construction and lease-up may not be completed on
schedule, resulting in increased debt service expense and
construction costs.

In addition, new development activities, regardless of whether they would
ultimately be successful, typically require a substantial portion of
managements time and attention. Development activities would also be subject
to risks relating to our inability to obtain, or delays in obtaining, all
necessary zoning, land use, building, occupancy, and other required
governmental permits and authorizations.

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Our Properties May Be Subject to Unknown Environmental Liabilities.Under
various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real estate may be
required to investigate and clean up hazardous or toxic substances or petroleum
product releases at the property. They may also be held liable to a
governmental entity or to third parties for property damage and for
investigation and clean-up costs incurred by these parties in connection with
the contamination. These laws typically impose clean-up responsibility and
liability without regard to whether the owner knew of or caused the presence of
the contaminants. Liability under these laws may still be imposed even when
the contaminants were associated with previous owners or operators and the
liability under these laws has been interpreted to be joint and several, unless
the harm is divisible and there is a reasonable basis for allocation of
responsibility. The costs of investigation, remediation or removal of these
substances may be substantial, and the presence of these substances, or the
failure to properly remediate the contamination on the property, may adversely
affect the owners ability to sell or rent the property or to borrow using the
property as collateral. The presence of contamination at a property can impair
the value of the property even if the contamination is migrating onto the
property from an adjoining property. Those who arrange for the disposal or
treatment of hazardous or toxic substances at a disposal or treatment facility
may also be liable for the costs of removal or remediation of a release of
hazardous or toxic substances at the disposal or treatment facility, whether or
not the facility is owned or operated by them. In addition, some environmental
laws create a lien on the contaminated site in favor of the government for
damages and costs incurred in connection with the contamination. Sometimes,
the remedy to remediate contamination may include deed restriction or
institutional control, which can restrict how the property may be used.
Finally, the owner of a site may be subject to common law claims by third
parties based on damages and costs resulting from environmental contamination
stemming from the site.

Some federal, state and local laws, regulations and ordinances govern the
removal, encapsulation or disturbance of asbestos containing materials, or
ACMs, when these materials are in poor condition or in the event of
construction, remodeling, renovation or demolition of a building. These laws
may impose liability for release of ACMs and may allow third parties to seek
recovery from owners or operators of real properties for personal injury
associated with ACMs. In connection with our ownership and operation of our
properties, we may be potentially liable for these costs.

Shopping centers may have businesses such as dry cleaners and auto repair
or servicing businesses that handle, store and generate small quantities of
hazardous wastes. The operation may result in spills or releases from
time-to-time that can result in soil or groundwater contamination. Independent
environmental consultants have conducted or updated Phase I Environmental
Assessments at our properties. These Phase I Assessments have included, among
other things, a visual inspection of our properties and the surrounding area
and a review of relevant state, federal and historical documents.

Phase I Assessments of our properties have not revealed any environmental
liability that we believe would have a material adverse effect on our business,
assets or results of operations taken as a whole, nor are we aware of any
material environmental liability.

It is still possible that our Phase I Assessments do not reveal all
environmental liabilities or that there are material environmental liabilities
of which we are unaware. Moreover, future laws, ordinances or regulations may
impose material environmental liability and the current environmental condition
of our properties may be affected by tenants, by the condition of land or
operations in the vicinity of our properties (such as the presence of
underground storage tanks), or by third parties unrelated to us.

No Limitation on Amount of Indebtedness We May Incur.At December 31,
2001, our debt to total market capitalization ratio was approximately 40.8%
(assuming the conversion of all operating subsidiary units). We currently have
a Board of Directors approved policy of incurring debt only if upon incurrence
the debt to total market capitalization ratio would be 50% or less. It should
be noted, however, that our organizational documents do not contain any
limitation on the amount of indebtedness we may incur. Accordingly, our board
of directors could alter or eliminate this policy. If this policy were
changed, we could become more highly leveraged, resulting in an increase in
debt service that could adversely affect our cash flow and, consequently,
reduce the amount available for distribution to stockholders. This could also
increase the risk of default on our indebtedness.

Certain Types of Losses May Exceed Insurance Coverage.We carry
comprehensive liability, public area liability, fire, earthquake, flood, boiler
and machinery, extended coverage and rental loss insurance covering our
properties, with policy specifications and insured limits that we believe are
adequate and appropriate under the circumstances. There are, however, certain
types of losses that are not generally insured because it is not

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economically feasible to insure against these losses. If an uninsured
loss or a loss exceeding insured limits occurs, we could lose our capital
invested in the property, as well as the anticipated future revenue from the
property. In the case of debt which is with recourse to us, we would remain
obligated for any mortgage debt or other financial obligations related to the
property. In these circumstances, any loss would adversely affect us.

Disposition of Properties with Built-In Gain.In connection with our
formation in 1997, certain entities taxable as C corporations were merged
either into us or into our subsidiaries which qualified as qualified REIT
subsidiaries. Certain of these entities held 13 properties with built-in
gain at the time the entities were merged into us or into our subsidiaries. A
property has built-in gain if (i) on the day it was acquired, the former
owners tax basis in the property was less than the propertys fair market
value, and (ii) it was acquired in a transaction in which our tax basis in the
property was determined by reference to the former owners tax basis in the
property. Under recently promulgated Treasury Regulations, if these properties
are sold within 10 years of the date we acquired them, we will be required to
pay taxes on the built-in gain that would have been realized if the merging C
corporation had liquidated on the day before the date of the mergers.
Therefore, we may have less flexibility in determining whether or not to
dispose of these properties. If we desire to dispose of these properties at
some future date within this 10 year period, we may be subject to tax on the
built-in gain.




ITEM 2. PROPERTIES

General

As of December 31, 2001, we operated 108 neighborhood and community
shopping centers containing 15.3 million square feet of which 13.6 million
square feet is owned by us with the balance owned by certain retailers. These
properties are primarily situated in five key Western U.S. markets including
Northern California, Southern California, Oregon, Nevada and Washington, each
of which we believe has attractive economic and demographic characteristics.
The largest concentration of properties, consisting of 39% of the owned gross
leasable area, is located in Northern California. Another 14% of the owned
gross leasable area is located in Southern California, 18% in Oregon, 15% in
Nevada and 12% in Washington. In addition, properties consisting of the
remaining 2% of the owned gross leasable area are located in New Mexico,
Tennessee and Kentucky. As of December 31, 2001, 97.1% of our total gross
leasable area was leased by 2,370 tenants.

These properties are regionally managed under active central control by
our executive officers. Property management, leasing, capital expenditures,
construction and acquisition decisions are centrally administered at the
Companys corporate office. We also employ property managers at each of our
regional offices to oversee and direct the day-to-day operations of these
properties, as well as on-site personnel. Property managers communicate daily
with our corporate offices to implement our policies and procedures.

As a result of our in-house leasing program, these properties benefit from
a diversified merchandising mix. At December 31, 2001, 60% of the total leased
gross leasable area was leased to national tenants, 20% leased to regional
tenants and 20% to local tenants. To promote stability and attract non-anchor
tenants, we generally enter into long-term leases (typically 15 to 20 years)
with major or anchor tenants which usually contain provisions permitting
tenants to renew their leases at rates which often include fixed rent increases
or consumer price index adjustments from the prior base rent. At December 31,
2001, anchor tenants leased 58% of the total leased gross leasable area, with
only 58% of anchor-leased gross leasable area (34% of the total leased gross
leasable area) scheduled to expire within the next 10 years. To take advantage
of improving market conditions and changing retail trends, we generally enter
into shorter term leases (typically three to five years) with non-anchor
tenants. Our leases are generally on a triple-net basis, which require the
tenants to pay their pro rata share of all real property taxes, insurance and
property operating expenses.

The following tables provide information about our properties, our tenants and lease expirations.

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Property Summary
12/31/01

|                      |                                                 |            |           |           |         |           |        |           |       |             |       |             |          |              |         |            |             |                 |  |       |           |  |  |    |  |  |  |           |  |  |  |       |  |  |                                                                          |  | 
|--------------------- | ----------------------------------------------- | ---------- | --------- | --------- | ------- | --------- | ------ | --------- | ----- | ----------- | ----- | ----------- | -------- | ------------ | ------- | ---------- | ----------- | --------------- |  | ----- | --------- |  |  | -- |  |  |  | --------- |  |  |  | ----- |  |  | ------------------------------------------------------------------------ |  | 
|                      |                                                 |            | Year      |           | Company |           | Tenant |           |       |             |       |             | % Leased |              | Total # |            |             |                 |  |       | Ann. Base |  |  |    | 
|                      |                                                 |            | Completed |           | Owned   |           | Owned  |           | Total |             | as of |             | Tenants  |              | Annual  |            | Rent/Leased |                 |  |       |          
|Property and Location |                                                 | /Renovated |           | (Sq. Ft.) |         | (Sq. Ft.) |        | (Sq. Ft.) |       | 12/31/01(4) |       | 12/31/01(4) |          | Base Rent(1) |         | Sq. Ft.(3) |             | Major Retailers
|                      |                                                 |            |           |           |         |           |        |           |       |             |       |             |          |              |         |            |             |                
|                      | NORTHERN CALIFORNIA                             |            |           |           |         |           |        |           |       |             |       |             |          |              |         |            |             |                 |  |       |           |  |  |    |  |  |  |           |  |  |  |       |  |  |                                                                          |  | 
|                      | Anderson SquareAnderson, CA                     |            |           | 1977      |         |           |        | 67,480    |       |             |       | 34,604      |          |              |         | 102,084    |             |                 |  | 88.4  |           |  |  | 12 |  |  |  | 407,520   |  |  |  | 6.83  |  |  | Safeway Supermarket(2), Rite Aid                                        
|                      | Angels Camp Town Center
        Angels Camp, CA |            |           | 1986      |         |           |        | 70,323    |       |             |       | 3,000       |          |              |         | 73,323     |             |                 |  | 96.0  |           |  |  | 11 |  |  |  | 539,671   |  |  |  | 7.99  |  |  | Save Mart Supermarket, Rite Aid                                         
|                      | Blossom Valley PlazaTurlock, CA                 |            |           | 1988      |         |           |        | 111,612   |       |             |       | 0           |          |              |         | 111,612    |             |                 |  | 98.1  |           |  |  | 20 |  |  |  | 1,182,514 |  |  |  | 10.80 |  |  | Raley's Supermarket, Jo-Ann Fabrics & Crafts                            
|                      | Brookvale Shopping CenterFremont, CA            |            |           | 19681989  |         |           |        | 131,242   |       |             |       | 0           |          |              |         | 131,242    |             |                 |  | 100.0 |           |  |  | 19 |  |  |  | 1,431,335 |  |  |  | 10.91 |  |  | Albertson's Supermarket, Long's Drugs                                   
|                      | Cable ParkSacramento, CA                        |            |           | 1987      |         |           |        | 160,811   |       |             |       | 0           |          |              |         | 160,811    |             |                 |  | 100.0 |           |  |  | 34 |  |  |  | 1,383,334 |  |  |  | 8.60  |  |  | Albertson's Supermarket, Long's Drugs                                   
|                      | Canal FarmsLos Banos, CA                        |            |           | 1987      |         |           |        | 110,535   |       |             |       | 0           |          |              |         | 110,535    |             |                 |  | 100.0 |           |  |  | 18 |  |  |  | 934,973   |  |  |  | 8.46  |  |  | Save Mart Supermarket, Rite Aid                                         
|                      | Centennial PlazaHanford, CA                     |            |           | 1991      |         |           |        | 132,086   |       |             |       | 132,293     |          |              |         | 264,379    |             |                 |  | 99.1  |           |  |  | 28 |  |  |  | 1,252,026 |  |  |  | 9.56  |  |  | Wal-Mart(2), Food 4 Less Supermarket                                    
|                      | Century CenterModesto, CA                       |            |           | 1979      |         |           |        | 214,772   |       |             |       | 0           |          |              |         | 214,772    |             |                 |  | 100.0 |           |  |  | 35 |  |  |  | 1,807,281 |  |  |  | 8.41  |  |  | Raley's Supermarket, Gottschalks                                        
|                      | Chico CrossroadsChico, CA                       |            |           | 19881994  |         |           |        | 267,735   |       |             |       | 0           |          |              |         | 267,735    |             |                 |  | 99.6  |           |  |  | 17 |  |  |  | 2,136,499 |  |  |  | 8.02  |  |  | Food 4 Less Supermarket                                                 
|                      | CobblestoneRedding, CA                          |            |           | 1984      |         |           |        | 122,091   |       |             |       | 0           |          |              |         | 122,091    |             |                 |  | 90.2  |           |  |  | 25 |  |  |  | 975,267   |  |  |  | 8.85  |  |  | Raley's Supermarket                                                     
|                      | Commonwealth SquareFolsom, CA                   |            |           | 1987      |         |           |        | 141,310   |       |             |       | 0           |          |              |         | 141,310    |             |                 |  | 100.0 |           |  |  | 47 |  |  |  | 2,011,335 |  |  |  | 14.23 |  |  | Raley's Supermarket                                                     
|                      | Country Gables Shopping CenterGranite Bay, CA   |            |           | 1993      |         |           |        | 140,184   |       |             |       | 0           |          |              |         | 140,184    |             |                 |  | 98.1  |           |  |  | 35 |  |  |  | 1,641,615 |  |  |  | 11.93 |  |  | Raley's Supermarket                                                     
|                      | Creekside CenterHayward, CA                     |            |           | 1968      |         |           |        | 80,911    |       |             |       | 0           |          |              |         | 80,911     |             |                 |  | 96.4  |           |  |  | 17 |  |  |  | 799,978   |  |  |  | 10.25 |  |  | Albertson's Supermarket, Big Lots                                       
|                      | Currier SquareOroville, CA                      |            |           | 1989      |         |           |        | 131,472   |       |             |       | 0           |          |              |         | 131,472    |             |                 |  | 99.1  |           |  |  | 15 |  |  |  | 1,034,252 |  |  |  | 7.93  |  |  | Raley's Supermarket                                                     
|                      | Dublin Retail CenterDublin, CA                  |            |           | 1980      |         |           |        | 154,728   |       |             |       | 0           |          |              |         | 154,728    |             |                 |  | 100.0 |           |  |  | 8  |  |  |  | 1,654,063 |  |  |  | 10.69 |  |  | Orchard Supply, Marshall's, Ross Dress for Less, Michael's Arts & Crafts
|                      | Eastridge PlazaPorterville, CA                  |            |           | 1985      |         |           |        | 81,010    |       |             |       | 0           |          |              |         | 81,010     |             |                 |  | 98.2  |           |  |  | 14 |  |  |  | 565,403   |  |  |  | 7.11  |  |  | Save Mart Supermarket(5)                                                
|                      | Elverta
Crossing Shopping CenterSacramento, CA  |            |           | 1991      |         |           |        | 119,998   |       |             |       | 0           |          |              |         | 119,998    |             |                 |  | 98.8  |           |  |  | 25 |  |  |  | 1,467,705 |  |  |  | 12.38 |  |  | Food 4 Less Supermarket, Rite Aid, Factory 2 U                          
|                      | Fairmont Shopping CenterPacifica, CA            |            |           | 1988      |         |           |        | 104,281   |       |             |       | 0           |          |              |         | 104,281    |             |                 |  | 100.0 |           |  |  | 30 |  |  |  | 1,363,266 |  |  |  | 13.07 |  |  | Albertson's Supermarket, Rite Aid                                       
|                      | Fashion Faire PlaceSan Leandro, CA              |            |           | 1987      |         |           |        | 95,255    |       |             |       | 0           |          |              |         | 95,255     |             |                 |  | 100.0 |           |  |  | 17 |  |  |  | 1,383,897 |  |  |  | 14.53 |  |  | Pure Foods Supermarket, Ross Dress for Less, Michael's Arts & Crafts    
|                      | Glen Cove CenterVallejo, CA                     |            |           | 1990      |         |           |        | 66,000    |       |             |       | 0           |          |              |         | 66,000     |             |                 |  | 100.0 |           |  |  | 11 |  |  |  | 872,008   |  |  |  | 13.21 |  |  | Safeway Supermarket & Drug                                              
|                      | Glenbrook Shopping CenterSacramento, CA         |            |           | 1990      |         |           |        | 63,340    |       |             |       | 0           |          |              |         | 63,340     |             |                 |  | 94.1  |           |  |  | 14 |  |  |  | 457,892   |  |  |  | 7.68  |  |  | Albertson's Supermarket                                                 
|                      | Heritage
Park Shopping CenterSuisun City, CA    |            |           | 1989      |         |           |        | 162,999   |       |             |       | 0           |          |              |         | 162,999    |             |                 |  | 98.2  |           |  |  | 35 |  |  |  | 1,665,573 |  |  |  | 10.41 |  |  | Raley's Supermarket                                                     
|                      | Heritage PlaceTulare, CA                        |            |           | 1986      |         |           |        | 119,412   |       |             |       | 1           |          |              |         | 119,413    |             |                 |  | 98.8  |           |  |  | 22 |  |  |  | 1,058,871 |  |  |  | 8.97  |  |  | Save Mart Supermarket, Rite Aid                                         
|                      | K-Mart CenterSacramento, CA                     |            |           | 19661983  |         |           |        | 132,630   |       |             |       | 0           |          |              |         | 132,630    |             |                 |  | 98.8  |           |  |  | 16 |  |  |  | 478,023   |  |  |  | 3.65  |  |  | K-Mart, Big Lots                                                        
|                      | Laguna 99 PlazaElk Grove, CA                    |            |           | 1992      |         |           |        | 89,600    |       |             |       | 116,200     |          |              |         | 205,800    |             |                 |  | 100.0 |           |  |  | 24 |  |  |  | 1,498,558 |  |  |  | 16.72 |  |  | Safeway
Supermarket(6), Wal-Mart(2)                                     
|                      | Laguna VillageSacramento, CA                    |            |           | 1996      |         |           |        | 114,433   |       |             |       | 0           |          |              |         | 114,433    |             |                 |  | 98.1  |           |  |  | 14 |  |  |  | 1,916,634 |  |  |  | 17.07 |  |  | United Artists Theatres, 24 Hour Fitness                                
|                      | Lakewood Shopping CenterWindsor, CA             |            |           | 1988      |         |           |        | 107,769   |       |             |       | 0           |          |              |         | 107,769    |             |                 |  | 100.0 |           |  |  | 28 |  |  |  | 1,091,991 |  |  |  | 10.13 |  |  | Raley's Supermarket, U.S. Post Office                                   
|                      | Lakewood VillageWindsor, CA                     |            |           | 1992      |         |           |        | 127,237   |       |             |       | 0           |          |              |         | 127,237    |             |                 |  | 99.2  |           |  |  | 38 |  |  |  | 1,935,571 |  |  |  | 15.34 |  |  | Safeway Supermarket, Long's Drugs                                       
|                      | Manteca MarketplaceManteca, CA                  |            |           | 19721988  |         |           |        | 172,435   |       |             |       | 0           |          |              |         | 172,435    |             |                 |  | 100.0 |           |  |  | 27 |  |  |  | 1,859,234 |  |  |  | 10.78 |  |  | Save Mart Supermarket, Rite Aid, Stadium 10 Cinemas, Ben Franklin Crafts
|                      | Mission Ridge PlazaManteca, CA                  |            |           | 1992      |         |           |        | 96,657    |       |             |       | 99,641      |          |              |         | 196,298    |             |                 |  | 100.0 |           |  |  | 16 |  |  |  | 1,358,167 |  |  |  | 14.05 |  |  | Safeway Supermarket(6), Wal-Mart(2), Mervyn's(2)                        
|                      | Monterey PlazaSan Jose, CA                      |            |           | 1990      |         |           |        | 183,180   |       |             |       | 49,500      |          |              |         | 232,680    |             |                 |  | 100.0 |           |  |  | 31 |  |  |  | 2,853,568 |  |  |  | 15.58 |  |  | Wal-Mart, Albertson's Supermarket(2), Walgreen's                        
|                      | Northridge PlazaFair Oaks, CA                   |            |           | 1990      |         |           |        | 98,625    |       |             |       | 0           |          |              |         | 98,625     |             |                 |  | 91.1  |           |  |  | 18 |  |  |  | 732,865   |  |  |  | 8.16  |  |  | Raley's Supermarket                                                     

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Property Summary
12/31/01

|                              |                                                   |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                 |      |       |           |  |     |    |  |   |               |           |  |   |       |       |  |  |                                                                        |  | 
|----------------------------- | ------------------------------------------------- | ---------- | --------- | --------- | ------- | --------- | --------- | --------- | ----- | ----------- | ------- | ----------- | -------- | ------------ | --------- | ---------- | ----------- | --------------- | ---- | ----- | --------- |  | --- | -- |  | - | ------------- | --------- |  | - | ----- | ----- |  |  | ---------------------------------------------------------------------- |  | 
|                              |                                                   |            | Year      |           | Company |           | Tenant    |           |       |             |         |             | % Leased |              | Total #   |            |             |                 |      |       | Ann. Base |  |     |    | 
|                              |                                                   |            | Completed |           | Owned   |           | Owned     |           | Total |             | as of   |             | Tenants  |              | Annual    |            | Rent/Leased |                 |      |       |          
|Property and Location         |                                                   | /Renovated |           | (Sq. Ft.) |         | (Sq. Ft.) |           | (Sq. Ft.) |       | 12/31/01(4) |         | 12/31/01(4) |          | Base Rent(1) |           | Sq. Ft.(3) |             | Major Retailers
|                              |                                                   |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                
|                              | Park PlaceVallejo, CA                             |            |           | 1987      |         |           |           | 150,766   |       |             |         | 0           |          |              |           | 150,766    |             |                 |      | 96.3  |           |  |     | 29 |  |   |               | 1,803,779 |  |   |       | 12.43 |  |  | Raley's Supermarket, 24 Hour Fitness                                  
|                              | Pine Creek Shopping CenterGrass Valley, CA        |            |           | 1988      |         |           |           | 213,035   |       |             |         | 0           |          |              |           | 213,035    |             |                 |      | 100.0 |           |  |     | 39 |  |   |               | 2,321,910 |  |   |       | 10.90 |  |  | Raley's Supermarket, JC Penney                                        
|                              | Plaza 580 Shopping CenterLivermore, CA            |            |           | 1993      |         |           |           | 104,363   |       |             |         | 192,739     |          |              |           | 297,102    |             |                 |      | 98.9  |           |  |     | 28 |  |   |               | 1,847,013 |  |   |       | 17.90 |  |  | Target(2), Mervyn's(2), Ross Dress for Less, Big 5                    
|                              | Raleys Shopping CenterYuba City, CA              |            |           | 1983      |         |           |           | 135,114   |       |             |         | 0           |          |              |           | 135,114    |             |                 |      | 99.0  |           |  |     | 16 |  |   |               | 1,088,461 |  |   |       | 8.14  |  |  | Raley's Supermarket, Toys R Us                                        
|                              | Shops at Lincoln SchoolModesto, CA                |            |           | 1988      |         |           |           | 81,443    |       |             |         | 0           |          |              |           | 81,443     |             |                 |      | 98.3  |           |  |     | 17 |  |   |               | 778,223   |  |   |       | 9.72  |  |  | Save Mart Supermarket                                                 
|                              | Sky Park PlazaChico, CA                           |            |           | 1985      |         |           |           | 176,182   |       |             |         | 4,642       |          |              |           | 180,824    |             |                 |      | 95.9  |           |  |     | 28 |  |   |               | 1,573,270 |  |   |       | 9.31  |  |  | Raley's Supermarket, Ross Dress for Less, Jo-Ann Fabrics & Crafts     
|                              | Ukiah CrossroadsUkiah, CA                         |            |           | 1986      |         |           |           | 110,565   |       |             |         | 0           |          |              |           | 110,565    |             |                 |      | 97.9  |           |  |     | 19 |  |   |               | 1,070,625 |  |   |       | 9.89  |  |  | Raley's Supermarket                                                   
|                              | Victorian WalkFresno, CA                          |            |           | 1990      |         |           |           | 102,581   |       |             |         | 1           |          |              |           | 102,582    |             |                 |      | 93.7  |           |  |     | 22 |  |   |               | 866,376   |  |   |       | 9.02  |  |  | Save Mart Supermarket, Rite Aid                                       
|                              | Westwood
Village Shopping CenterSouth Redding, CA |            |           | 19811998  |         |           |           | 102,375   |       |             |         | 0           |          |              |           | 102,375    |             |                 |      | 90.5  |           |  |     | 19 |  |   |               | 661,658   |  |   |       | 7.14  |  |  | Holiday Supermarket, Rite Aid                                         
|                              | Yreka JunctionYreka, CA                           |            |           | 1984      |         |           |           | 127,148   |       |             |         | 0           |          |              |           | 127,148    |             |                 |      | 100.0 |           |  |     | 19 |  |   |               | 1,115,270 |  |   |       | 8.77  |  |  | Raley's Supermarket, JC Penney                                        
|                              |                                                   |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                 |      |       |           |  |     |    |  |   |               |           |  |   |       |       |  |  |                                                                        | 
|Region Total/Weighted Average |                                                   |            |           |           |         |           | 5,275,725 |           |       |             | 632,621 |             |          |              | 5,908,346 |            |             |                 | 98.2 |       |           |  | 957 |    |  | $ | 54,877,471.52 |           |  | $ | 10.59 |       |  |  |                                                                        | 
|                              |                                                   |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                 |      |       |           |  |     |    |  |   |               |           |  |   |       |       |  |  |                                                                        | 
|                              | SOUTHERN CALIFORNIA                               |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                 |      |       |           |  |     |    |  |   |               |           |  |   |       |       |  |  |                                                                        |  | 
|                              | Arlington CourtyardRiverside, CA                  |            |           | 1991      |         |           |           | 12,221    |       |             |         | 0           |          |              |           | 12,221     |             |                 |      | 81.8  |           |  |     | 4  |  |   |               | 110,199   |  |   |       | 11.02 |  |  | Harvest Christian Bookstore                                           
|                              | Brookhurst CenterAnaheim, CA                      |            |           | 1982      |         |           |           | 181,949   |       |             |         | 0           |          |              |           | 181,949    |             |                 |      | 99.4  |           |  |     | 41 |  |   |               | 1,926,739 |  |   |       | 10.65 |  |  | Ralph's Supermarket, Rite Aid, Jo-Ann Fabrics & Crafts                
|                              | Canyon Square PlazaSanta Clarita, CA              |            |           | 1988      |         |           |           | 96,727    |       |             |         | 7,472       |          |              |           | 104,199    |             |                 |      | 99.0  |           |  |     | 30 |  |   |               | 1,237,746 |  |   |       | 12.93 |  |  | Albertson's Supermarket & Drug                                        
|                              | Chino Town SquareChino, CA                        |            |           | 1987      |         |           |           | 337,119   |       |             |         | 188,064     |          |              |           | 525,183    |             |                 |      | 95.2  |           |  |     | 49 |  |   |               | 4,464,515 |  |   |       | 13.91 |  |  | Wal-Mart, Ross Dress for Less, Nordstrom Rack, Target(2), Mervyn's(2) 
|                              | Encinitas MarketplaceEncinitas, CA                |            |           | 1981      |         |           |           | 118,432   |       |             |         | 0           |          |              |           | 118,432    |             |                 |      | 100.0 |           |  |     | 27 |  |   |               | 1,599,308 |  |   |       | 13.50 |  |  | Albertson's Supermarket                                               
|                              | Granary SquareValencia, CA                        |            |           | 1982      |         |           |           | 136,985   |       |             |         | 0           |          |              |           | 136,985    |             |                 |      | 95.7  |           |  |     | 31 |  |   |               | 1,844,767 |  |   |       | 14.07 |  |  | Ralph's Supermarket, Long's Drugs                                     
|                              | Laurentian CenterOntario, CA                      |            |           | 1988      |         |           |           | 97,131    |       |             |         | 0           |          |              |           | 97,131     |             |                 |      | 100.0 |           |  |     | 25 |  |   |               | 1,220,289 |  |   |       | 12.56 |  |  | Pep Boys, 24 Hour Fitness, Abbey Carpet                               
|                              | Marina VillageHuntington Beach, CA                |            |           | 1996      |         |           |           | 149,107   |       |             |         | 0           |          |              |           | 149,107    |             |                 |      | 99.0  |           |  |     | 33 |  |   |               | 1,812,235 |  |   |       | 12.28 |  |  | Von's Supermarket, Sav-on Drugs                                       
|                              | Melrose Village PlazaVista, CA                    |            |           | 1990      |         |           |           | 132,674   |       |             |         | 0           |          |              |           | 132,674    |             |                 |      | 98.9  |           |  |     | 32 |  |   |               | 1,612,071 |  |   |       | 12.28 |  |  | Albertson's Supermarket, Sav-on Drugs                                 
|                              | Palmdale CenterPalmdale, CA                       |            |           | 1975      |         |           |           | 81,050    |       |             |         | 0           |          |              |           | 81,050     |             |                 |      | 100.0 |           |  |     | 14 |  |   |               | 579,178   |  |   |       | 7.15  |  |  | Smart & Final, Dollar Tree, Big Lots                                  
|                              | Rancho Las PalmasRancho Mirage, CA                |            |           | 1980      |         |           |           | 165,156   |       |             |         | 10,815      |          |              |           | 175,971    |             |                 |      | 99.2  |           |  |     | 40 |  |   |               | 2,246,542 |  |   |       | 13.71 |  |  | Von's Supermarket, Long's Drugs                                       
|                              | San Dimas MarketplaceSan Dimas, CA                |            |           | 1997      |         |           |           | 154,020   |       |             |         | 117,000     |          |              |           | 271,020    |             |                 |      | 100.0 |           |  |     | 23 |  |   |               | 2,326,574 |  |   |       | 15.11 |  |  | Trader Joe's Market, Target(2), Ross Dress for Less, Office Max, Petco
|                              | Sycamore PlazaAnaheim, CA                         |            |           | 1976      |         |           |           | 105,085   |       |             |         | 0           |          |              |           | 105,085    |             |                 |      | 99.1  |           |  |     | 25 |  |   |               | 874,091   |  |   |       | 8.39  |  |  | Stater Bros. Supermarket, Sav-on Drugs                                
|                              | Tustin Heights Shopping CenterTustin, CA          |            |           | 1983      |         |           |           | 131,518   |       |             |         | 0           |          |              |           | 131,518    |             |                 |      | 100.0 |           |  |     | 21 |  |   |               | 1,706,655 |  |   |       | 12.98 |  |  | Ralph's Supermarket, Long's Drugs, Michael's Arts & Crafts            
|                              | Vineyard VillageOntario, CA                       |            |           | 1992      |         |           |           | 45,200    |       |             |         | 0           |          |              |           | 45,200     |             |                 |      | 100.0 |           |  |     | 4  |  |   |               | 397,849   |  |   |       | 8.80  |  |  | Sears, Dunn Edwards Paints                                            
|                              |                                                   |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                 |      |       |           |  |     |    |  |   |               |           |  |   |       |       |  |  |                                                                        | 
|Region Total/Weighted Average |                                                   |            |           |           |         |           | 1,944,374 |           |       |             | 323,351 |             |          |              | 2,267,725 |            |             |                 | 98.4 |       |           |  | 399 |    |  | $ | 23,958,757.03 |           |  | $ | 12.52 |       |  |  |                                                                        | 
|                              |                                                   |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                 |      |       |           |  |     |    |  |   |               |           |  |   |       |       |  |  |                                                                        | 

11



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##### Table of Contents



Property Summary
12/31/01

|                              |                                            |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                 |      |       |           |  |     |    |  |   |               |           |  |   |       |       |  |  |                                                                                             |  | 
|----------------------------- | ------------------------------------------ | ---------- | --------- | --------- | ------- | --------- | --------- | --------- | ----- | ----------- | ------- | ----------- | -------- | ------------ | --------- | ---------- | ----------- | --------------- | ---- | ----- | --------- |  | --- | -- |  | - | ------------- | --------- |  | - | ----- | ----- |  |  | ------------------------------------------------------------------------------------------- |  | 
|                              |                                            |            | Year      |           | Company |           | Tenant    |           |       |             |         |             | % Leased |              | Total #   |            |             |                 |      |       | Ann. Base |  |     |    | 
|                              |                                            |            | Completed |           | Owned   |           | Owned     |           | Total |             | as of   |             | Tenants  |              | Annual    |            | Rent/Leased |                 |      |       |          
|Property and Location         |                                            | /Renovated |           | (Sq. Ft.) |         | (Sq. Ft.) |           | (Sq. Ft.) |       | 12/31/01(4) |         | 12/31/01(4) |          | Base Rent(1) |           | Sq. Ft.(3) |             | Major Retailers
|                              |                                            |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                
|                              | WASHINGTON                                 |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                 |      |       |           |  |     |    |  |   |               |           |  |   |       |       |  |  |                                                                                             |  | 
|                              | Auburn NorthAuburn, WA                     |            |           | 19771999  |         |           |           | 171,032   |       |             |         | 0           |          |              |           | 171,032    |             |                 |      | 100.0 |           |  |     | 25 |  |   |               | 1,383,995 |  |   |       | 8.09  |  |  | Albertson's Supermarket, Rite Aid, Office Depot                                            
|                              | Blaine International CenterBlaine, WA      |            |           | 1991      |         |           |           | 127,572   |       |             |         | 0           |          |              |           | 127,572    |             |                 |      | 78.3  |           |  |     | 15 |  |   |               | 923,834   |  |   |       | 9.25  |  |  | Cost Cutter Supermarket, Rite Aid                                                          
|                              | Canyon Ridge PlazaKent, WA                 |            |           | 1995      |         |           |           | 86,909    |       |             |         | 181,300     |          |              |           | 268,209    |             |                 |      | 97.6  |           |  |     | 18 |  |   |               | 1,045,099 |  |   |       | 12.32 |  |  | Target(2), Top Foods Supermarket(2), Ross Dress for Less                                   
|                              | Claremont Village PlazaEverett, WA         |            |           | 19551994  |         |           |           | 88,770    |       |             |         | 0           |          |              |           | 88,770     |             |                 |      | 100.0 |           |  |     | 16 |  |   |               | 1,252,805 |  |   |       | 14.11 |  |  | QFC Supermarket & Drug                                                                     
|                              | Garrison SquareVancouver, WA               |            |           | 1989      |         |           |           | 69,790    |       |             |         | 0           |          |              |           | 69,790     |             |                 |      | 100.0 |           |  |     | 15 |  |   |               | 708,566   |  |   |       | 10.15 |  |  | Nature's Supermarket, Hi School Pharmacy                                                   
|                              | Gateway Shopping CenterMill Creek, WA      |            |           | 1995      |         |           |           | 96,671    |       |             |         | 0           |          |              |           | 96,671     |             |                 |      | 95.8  |           |  |     | 20 |  |   |               | 1,650,673 |  |   |       | 17.82 |  |  | Safeway Supermarket                                                                        
|                              | Olympia SquareOlympia, WA                  |            |           | 1988      |         |           |           | 168,121   |       |             |         | 0           |          |              |           | 168,121    |             |                 |      | 98.9  |           |  |     | 40 |  |   |               | 2,075,499 |  |   |       | 12.49 |  |  | Albertson's Supermarket & Drug, Ross Dress for Less                                        
|                              | Olympia West CenterOlympia, WA             |            |           | 19801995  |         |           |           | 69,212    |       |             |         | 3,800       |          |              |           | 73,012     |             |                 |      | 100.0 |           |  |     | 6  |  |   |               | 1,266,751 |  |   |       | 18.30 |  |  | Barnes & Noble, Good Guys, Petco                                                           
|                              | Pacific CommonsSpanaway, WA                |            |           | 1987      |         |           |           | 151,233   |       |             |         | 55,241      |          |              |           | 206,474    |             |                 |      | 100.0 |           |  |     | 23 |  |   |               | 1,538,370 |  |   |       | 10.17 |  |  | The Marketplace Supermarket, K-Mart(2)                                                     
|                              | Panther LakeKent, WA                       |            |           | 1989      |         |           |           | 69,090    |       |             |         | 44,237      |          |              |           | 113,327    |             |                 |      | 100.0 |           |  |     | 22 |  |   |               | 893,672   |  |   |       | 12.93 |  |  | Albertson's Supermarket(2), Rite Aid                                                       
|                              | Sunset SquareBellingham, WA                |            |           | 1989      |         |           |           | 376,023   |       |             |         | 10,634      |          |              |           | 386,657    |             |                 |      | 98.4  |           |  |     | 41 |  |   |               | 3,103,837 |  |   |       | 8.39  |  |  | Cost Cutter Supermarket, K-Mart, Jo-Ann Fabrics & Crafts, Rite Aid                         
|                              | Tacoma CentralTacoma, WA                   |            |           | 19871994  |         |           |           | 156,916   |       |             |         | 165,519     |          |              |           | 322,435    |             |                 |      | 100.0 |           |  |     | 22 |  |   |               | 1,980,871 |  |   |       | 12.62 |  |  | Target(2), Top Food & Drug(2), Petsmart, Office Depot, TJ Maxx                             
|                              |                                            |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                 |      |       |           |  |     |    |  |   |               |           |  |   |       |       |  |  |                                                                                             | 
|Region Total/Weighted Average |                                            |            |           |           |         |           | 1,631,339 |           |       |             | 460,731 |             |          |              | 2,092,070 |            |             |                 | 97.4 |       |           |  | 263 |    |  | $ | 17,823,970.03 |           |  | $ | 11.21 |       |  |  |                                                                                             | 
|                              |                                            |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                 |      |       |           |  |     |    |  |   |               |           |  |   |       |       |  |  |                                                                                             | 
|                              | OREGON                                     |            |           |           |         |           |           |           |       |             |         |             |          |              |           |            |             |                 |      |       |           |  |     |    |  |   |               |           |  |   |       |       |  |  |                                                                                             |  | 
|                              | Albany PlazaAlbany, OR                     |            |           | 19771998  |         |           |           | 114,465   |       |             |         | 30,998      |          |              |           | 145,463    |             |                 |      | 94.1  |           |  |     | 18 |  |   |               | 841,034   |  |   |       | 7.80  |  |  | Albertson's Supermarket, Rite Aid, Big Lots, Dollar Tree, Factory 2 U                      
|                              | Bear Creek PlazaMedford, OR                |            |           | 19771998  |         |           |           | 183,850   |       |             |         | 0           |          |              |           | 183,850    |             |                 |      | 96.8  |           |  |     | 26 |  |   |               | 1,335,926 |  |   |       | 7.51  |  |  | Bi-Mart Drug, TJ Maxx, Big Lots, Dollar Tree                                               
|                              | Canby Square Shopping CenterCanby, OR      |            |           | 1993      |         |           |           | 115,701   |       |             |         | 0           |          |              |           | 115,701    |             |                 |      | 97.9  |           |  |     | 13 |  |   |               | 1,062,007 |  |   |       | 9.38  |  |  | Safeway Supermarket, Rite Aid, Factory 2 U                                                 
|                              | East Burnside PlazaPortland, OR            |            |           | 1999      |         |           |           | 38,363    |       |             |         | 0           |          |              |           | 38,363     |             |                 |      | 100.0 |           |  |     | 7  |  |   |               | 618,311   |  |   |       | 16.12 |  |  | QFC Supermarket                                                                            
|                              | Foster SquarePortland, OR                  |            |           | 1970      |         |           |           | 33,808    |       |             |         | 0           |          |              |           | 33,808     |             |                 |      | 100.0 |           |  |     | 3  |  |   |               | 225,322   |  |   |       | 6.66  |  |  | Dollar Tree, Phoenix Drugs                                                                 
|                              | Hermiston PlazaHermiston, OR               |            |           | 1998      |         |           |           | 150,396   |       |             |         | 0           |          |              |           | 150,396    |             |                 |      | 95.4  |           |  |     | 23 |  |   |               | 940,295   |  |   |       | 6.55  |  |  | Safeway Supermarket & Drug, Big Lots, Dollar Tree                                          
|                              | Hood River Shopping CenterHood River, OR   |            |           | 19671999  |         |           |           | 108,764   |       |             |         | 0           |          |              |           | 108,764    |             |                 |      | 93.7  |           |  |     | 12 |  |   |               | 626,266   |  |   |       | 6.15  |  |  | Rosauer's Supermarket, Hi School Pharmacy                                                  
|                              | Menlo Park PlazaPortland, OR               |            |           | 1995      |         |           |           | 112,755   |       |             |         | 0           |          |              |           | 112,755    |             |                 |      | 92.7  |           |  |     | 16 |  |   |               | 1,226,107 |  |   |       | 11.74 |  |  | Walgreen's, Staples                                                                        
|                              | Milwaukie MarketplaceMilwaukie, OR         |            |           | 1989      |         |           |           | 185,859   |       |             |         | 10,323      |          |              |           | 196,182    |             |                 |      | 90.5  |           |  |     | 26 |  |   |               | 1,514,154 |  |   |       | 9.00  |  |  | Albertson's Supermarket, Rite Aid, Jo-Ann Fabrics & Crafts                                 
|                              | Oregon City Shopping CenterOregon City, OR |            |           | 1999      |         |           |           | 246,796   |       |             |         | 0           |          |              |           | 246,796    |             |                 |      | 92.8  |           |  |     | 35 |  |   |               | 1,866,761 |  |   |       | 8.15  |  |  | Emporium, Rite Aid, Fisherman's Marine Supply, Michael's Arts & Crafts                     
|                              | Oregon Trail Shopping CenterGresham, OR    |            |           | 19771999  |         |           |           | 208,284   |       |             |         | 0           |          |              |           | 208,284    |             |                 |      | 95.4  |           |  |     | 31 |  |   |               | 2,020,101 |  |   |       | 10.17 |  |  | Nature's Supermarket, Office Depot, Big 5 Sporting Goods, Big Lots, Michael's Arts & Crafts
|                              | Pioneer PlazaSpringfield, OR               |            |           | 1988      |         |           |           | 96,027    |       |             |         | 4,294       |          |              |           | 100,321    |             |                 |      | 100.0 |           |  |     | 23 |  |   |               | 926,605   |  |   |       | 9.65  |  |  | Safeway Supermarket & Drug                                                                 
|                              | Powell Valley JunctionGresham, OR          |            |           | 1990      |         |           |           | 107,583   |       |             |         | 0           |          |              |           | 107,583    |             |                 |      | 95.2  |           |  |     | 7  |  |   |               | 895,152   |  |   |       | 8.74  |  |  | Food 4 Less Supermarket, Cascade Athletic Club                                             
|                              | Powell VillaPortland, OR                   |            |           | 1997      |         |           |           | 63,607    |       |             |         | 0           |          |              |           | 63,607     |             |                 |      | 100.0 |           |  |     | 8  |  |   |               | 802,950   |  |   |       | 12.62 |  |  | Ace Hardware                                                                               
|                              | Raleigh Hills PlazaPortland, OR            |            |           | 1988      |         |           |           | 39,520    |       |             |         | 0           |          |              |           | 39,520     |             |                 |      | 100.0 |           |  |     | 3  |  |   |               | 937,086   |  |   |       | 23.71 |  |  | New Season's Supermarket, Walgreen's                                                       
|                              | Rockwood PlazaGresham, OR                  |            |           | 2000      |         |           |           | 92,098    |       |             |         | 0           |          |              |           | 92,098     |             |                 |      | 94.7  |           |  |     | 14 |  |   |               | 730,290   |  |   |       | 8.37  |  |  | Dollar Tree                                                                                

12



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##### Table of Contents



Property Summary
12/31/01

|                                 |                                          |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                 |      |       |           |  |       |    |  |   |                |           |  |   |       |       |  |  |                                                                                  |  | 
|-------------------------------- | ---------------------------------------- | ---------- | --------- | --------- | ------- | --------- | ---------- | --------- | ----- | ----------- | --------- | ----------- | -------- | ------------ | ---------- | ---------- | ----------- | --------------- | ---- | ----- | --------- |  | ----- | -- |  | - | -------------- | --------- |  | - | ----- | ----- |  |  | -------------------------------------------------------------------------------- |  | 
|                                 |                                          |            | Year      |           | Company |           | Tenant     |           |       |             |           |             | % Leased |              | Total #    |            |             |                 |      |       | Ann. Base |  |       |    | 
|                                 |                                          |            | Completed |           | Owned   |           | Owned      |           | Total |             | as of     |             | Tenants  |              | Annual     |            | Rent/Leased |                 |      |       |          
|Property and Location            |                                          | /Renovated |           | (Sq. Ft.) |         | (Sq. Ft.) |            | (Sq. Ft.) |       | 12/31/01(4) |           | 12/31/01(4) |          | Base Rent(1) |            | Sq. Ft.(3) |             | Major Retailers
|                                 |                                          |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                
|                                 | Sandy MarketplaceSandy, OR               |            |           | 1985      |         |           |            | 101,438   |       |             |           | 0           |          |              |            | 101,438    |             |                 |      | 97.7  |           |  |       | 19 |  |   |                | 930,270   |  |   |       | 9.39  |  |  | Danielson's Fresh Market, Hi School Pharmacy, Factory 2 U                       
|                                 | Shute Park PlazaHillsboro, OR            |            |           | 1989      |         |           |            | 58,560    |       |             |           | 0           |          |              |            | 58,560     |             |                 |      | 100.0 |           |  |       | 20 |  |   |                | 682,526   |  |   |       | 11.66 |  |  | Baxter's Auto Parts                                                             
|                                 | Southgate Shopping CenterMilwaukie, OR   |            |           | 1986      |         |           |            | 50,862    |       |             |           | 0           |          |              |            | 50,862     |             |                 |      | 100.0 |           |  |       | 10 |  |   |                | 634,731   |  |   |       | 12.48 |  |  | Office Max                                                                      
|                                 | St. Johns PlazaPortland, OR             |            |           | 1993      |         |           |            | 58,770    |       |             |           | 0           |          |              |            | 58,770     |             |                 |      | 45.7  |           |  |       | 4  |  |   |                | 217,843   |  |   |       | 8.11  |  |  | Rite Aid                                                                        
|                                 | Sunset MallPortland, OR                  |            |           | 1997      |         |           |            | 115,635   |       |             |           | 2,500       |          |              |            | 118,135    |             |                 |      | 96.1  |           |  |       | 27 |  |   |                | 1,196,493 |  |   |       | 10.77 |  |  | Safeway Supermarket & Drug                                                      
|                                 | Tacoma Shopping CenterPortland, OR       |            |           | 1999      |         |           |            | 13,448    |       |             |           | 0           |          |              |            | 13,448     |             |                 |      | 100.0 |           |  |       | 1  |  |   |                | 349,729   |  |   |       | 26.01 |  |  | New Season's Supermarket, Hi School Pharmacy                                    
|                                 | Tanasbourne VillageHillsboro, OR         |            |           | 1990      |         |           |            | 210,992   |       |             |           | 1,209       |          |              |            | 212,201    |             |                 |      | 100.0 |           |  |       | 41 |  |   |                | 3,130,397 |  |   |       | 14.84 |  |  | Safeway Supermarket, Rite Aid                                                   
|                                 |                                          |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                 |      |       |           |  |       |    |  |   |                |           |  |   |       |       |  |  |                                                                                  | 
|Region Total/Weighted Average    |                                          |            |           |           |         |           | 2,507,581  |           |       |             | 49,324    |             |          |              | 2,556,905  |            |             |                 | 94.8 |       |           |  | 387   |    |  | $ | 23,710,355.45  |           |  | $ | 9.98  |       |  |  |                                                                                  | 
|                                 |                                          |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                 |      |       |           |  |       |    |  |   |                |           |  |   |       |       |  |  |                                                                                  | 
|                                 | NEVADA                                   |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                 |      |       |           |  |       |    |  |   |                |           |  |   |       |       |  |  |                                                                                  |  | 
|                                 | Caughlin RanchReno, NV                   |            |           | 19901991  |         |           |            | 113,488   |       |             |           | 0           |          |              |            | 113,488    |             |                 |      | 88.6  |           |  |       | 24 |  |   |                | 1,406,330 |  |   |       | 13.99 |  |  | Scolari's Supermarket, Ross Dress for Less                                      
|                                 | Cheyenne CommonsLas Vegas, NV            |            |           | 1992      |         |           |            | 362,758   |       |             |           | 0           |          |              |            | 362,758    |             |                 |      | 98.9  |           |  |       | 45 |  |   |                | 4,395,008 |  |   |       | 12.25 |  |  | Wal-Mart, 24 Hour Fitness, Marshall's, Ross Dress for Less, Consign & Design    
|                                 | Dodge CenterFallon, NV                   |            |           | 1976      |         |           |            | 49,258    |       |             |           | 0           |          |              |            | 49,258     |             |                 |      | 55.7  |           |  |       | 3  |  |   |                | 184,130   |  |   |       | 6.72  |  |  | Raley's Supermarket(5)                                                          
|                                 | Eagle StationCarson City, NV             |            |           | 19821994  |         |           |            | 114,258   |       |             |           | 60,000      |          |              |            | 174,258    |             |                 |      | 97.1  |           |  |       | 27 |  |   |                | 1,090,613 |  |   |       | 9.83  |  |  | Raley's Supermarket, Mervyn's(2), Wal-Mart(2)                                   
|                                 | Elko Junction Shopping CenterElko, NV    |            |           | 19961997  |         |           |            | 170,812   |       |             |           | 0           |          |              |            | 170,812    |             |                 |      | 97.2  |           |  |       | 20 |  |   |                | 1,663,771 |  |   |       | 10.02 |  |  | Raley's Supermarket, Builder's Mart                                             
|                                 | Green Valley Town & CountryHenderson, NV |            |           | 1990      |         |           |            | 130,722   |       |             |           | 0           |          |              |            | 130,722    |             |                 |      | 96.5  |           |  |       | 36 |  |   |                | 1,971,970 |  |   |       | 15.63 |  |  | Albertson's/Sav-on Superstore                                                   
|                                 | Mira Loma Center # 636Reno, NV           |            |           | 1985      |         |           |            | 96,907    |       |             |           | 0           |          |              |            | 96,907     |             |                 |      | 100.0 |           |  |       | 19 |  |   |                | 999,755   |  |   |       | 10.32 |  |  | Scolari's Supermarket, Long's Drugs, Dollar Tree                                
|                                 | Rainbow PromenadeLas Vegas, NV           |            |           | 19951997  |         |           |            | 228,279   |       |             |           | 0           |          |              |            | 228,279    |             |                 |      | 99.5  |           |  |       | 26 |  |   |                | 3,276,995 |  |   |       | 14.43 |  |  | United Artists Theatres, Barnes & Noble, Linens 'N Things, Office Max, Cost Plus
|                                 | RaleysFallon, NV                        |            |           | 1991      |         |           |            | 60,114    |       |             |           | 0           |          |              |            | 60,114     |             |                 |      | 100.0 |           |  |       | 1  |  |   |                | 400,824   |  |   |       | 6.67  |  |  | Raley's Supermarket                                                             
|                                 | Sahara Pavilion NorthLas Vegas, NV       |            |           | 1989      |         |           |            | 333,679   |       |             |           | 0           |          |              |            | 333,679    |             |                 |      | 98.3  |           |  |       | 66 |  |   |                | 4,566,424 |  |   |       | 13.92 |  |  | Von's Supermarket, Long's Drugs, TJ Maxx, Shepler's, Borders Books, Gold's Gym  
|                                 | Sahara Pavilion SouthLas Vegas, NV       |            |           | 1990      |         |           |            | 160,682   |       |             |           | 0           |          |              |            | 160,682    |             |                 |      | 87.4  |           |  |       | 23 |  |   |                | 2,091,913 |  |   |       | 14.90 |  |  | Sports Authority, Office Max, Michael's Arts & Crafts                           
|                                 | West TownWinnemucca, NV                  |            |           | 19781991  |         |           |            | 65,424    |       |             |           | 0           |          |              |            | 65,424     |             |                 |      | 100.0 |           |  |       | 2  |  |   |                | 461,500   |  |   |       | 7.05  |  |  | Raley's Supermarket                                                             
|                                 | Winterwood PavilionLas Vegas, NV         |            |           | 1990      |         |           |            | 144,653   |       |             |           | 0           |          |              |            | 144,653    |             |                 |      | 97.5  |           |  |       | 26 |  |   |                | 1,430,764 |  |   |       | 10.15 |  |  | Von's Supermarket & Drug                                                        
|                                 |                                          |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                 |      |       |           |  |       |    |  |   |                |           |  |   |       |       |  |  |                                                                                  | 
|Region Total/Weighted Average    |                                          |            |           |           |         |           | 2,031,034  |           |       |             | 60,000    |             |          |              | 2,091,034  |            |             |                 | 96.0 |       |           |  | 318   |    |  | $ | 23,939,999.37  |           |  | $ | 12.28 |       |  |  |                                                                                  | 
|                                 |                                          |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                 |      |       |           |  |       |    |  |   |                |           |  |   |       |       |  |  |                                                                                  | 
|                                 | OTHER                                    |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                 |      |       |           |  |       |    |  |   |                |           |  |   |       |       |  |  |                                                                                  |  | 
|                                 | Country Club CenterAlbuquerque, NM       |            |           | 19881998  |         |           |            | 57,626    |       |             |           | 63,000      |          |              |            | 120,626    |             |                 |      | 82.2  |           |  |       | 16 |  |   |                | 534,924   |  |   |       | 11.29 |  |  | Raley's Supermarket(2)                                                          
|                                 | Maysville MarketsquareMaysville, KY      |            |           | 19911993  |         |           |            | 126,507   |       |             |           | 89,612      |          |              |            | 216,119    |             |                 |      | 100.0 |           |  |       | 19 |  |   |                | 924,926   |  |   |       | 7.31  |  |  | Wal-Mart(2), Kroger Supermarket, JC Penney                                      
|                                 | Memphis Retail CenterMemphis, TN         |            |           | 1990      |         |           |            | 51,542    |       |             |           | 40,000      |          |              |            | 91,542     |             |                 |      | 81.7  |           |  |       | 11 |  |   |                | 399,190   |  |   |       | 9.48  |  |  | Hancock  Fabrics, Family Dollar                                                 
|                                 |                                          |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                 |      |       |           |  |       |    |  |   |                |           |  |   |       |       |  |  |                                                                                  | 
|Region Total/Weighted Average    |                                          |            |           |           |         |           | 235,675    |           |       |             | 192,612   |             |          |              | 428,287    |            |             |                 | 91.7 |       |           |  | 46    |    |  | $ | 1,859,040.51   |           |  | $ | 8.61  |       |  |  |                                                                                  | 
|                                 |                                          |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                 |      |       |           |  |       |    |  |   |                |           |  |   |       |       |  |  |                                                                                  | 
|                                 |                                          |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                 |      |       |           |  |       |    |  |   |                |           |  |   |       |       |  |  |                                                                                  | 
|Portfolio Total/Weighted
Average |                                          |            |           |           |         |           | 13,625,728 |           |       |             | 1,718,639 |             |          |              | 15,344,367 |            |             |                 | 97.1 |       |           |  | 2,370 |    |  | $ | 146,169,593.92 |           |  | $ | 11.05 |       |  |  |                                                                                  | 
|                                 |                                          |            |           |           |         |           |            |           |       |             |           |             |          |              |            |            |             |                 |      |       |           |  |       |    |  |   |                |           |  |   |       |       |  |  |                                                                                  | 



|(1) |  | Annualized base rent for all leases in place at December 31, 2001 is calculated as follows: total base rent
to be received during the entire term of each lease, divided by the terms in months for such leases, multiplied by 12.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|(2) |  | These retailers own their own space and are not tenants of the company.                                                                                                                                                           
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|(3) |  | Annualized base rent divided by the owned GLA leased at December 31, 2001.                                                                                                                                                        
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|(4) |  | Percent leased and total number of tenants includes month to month leases.                                                                                                                                                        
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|(5) |  | Tenant is dark.                                                                                                                                                                                                                   
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|(6) |  | Tenant is Pak N Save, a division of Safeway.                                                                                                                                                                                    

13



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##### Table of Contents



National, Regional and Local Tenant Mix
12/31/01

|                    |                                  |            |                     |         |                     |            |                  |         |           |            |               |         |               |  |  |       |  |  |               |       |  |  |  |       | 
|------------------- | -------------------------------- | ---------- | ------------------- | ------- | ------------------- | ---------- | ---------------- | ------- | --------- | ---------- | ------------- | ------- | ------------- |  |  | ----- |  |  | ------------- | ----- |  |  |  | ----- | 
|                    |                                  |            | National Tenants(1) |         | Regional Tenants(1) |            | Local Tenants(1)
|                    |                                  |            |                     |         |                     |            |                 
|                    |                                  |            |                     |         |                     |            | % of Property    |         |           |            |               |         | % of Property |  |  |       |  |  | % of Property
|                    |                                  |            | % of Property       |         | Ann. Base           |            | % of Property    |         | Ann. Base |            | % of Property |         | Ann. Base    
|Property            |                                  | Leased GLA |                     | Rent(2) |                     | Leased GLA |                  | Rent(2) |           | Leased GLA |               | Rent(2)
|                    |                                  |            |                     |         |                     |            |                  |         |           |            |               |        
|NORTHERN CALIFORNIA |                                  |            |                     |         |                     |            |                  |         |           |            |               |         |               |  |  |       |  |  |               |       |  |  |  |      
|                    | Anderson Square                  |            |                     | 69.92   |                     |            |                  | 63.58   |           |            |               | 0.00    |               |  |  | 0.00  |  |  |               | 30.08 |  |  |  | 36.42 | 
|                    | Angels Camp Town Center          |            |                     | 31.70   |                     |            |                  | 32.46   |           |            |               | 50.80   |               |  |  | 33.41 |  |  |               | 17.50 |  |  |  | 34.13 | 
|                    | Blossom Valley Plaza             |            |                     | 28.09   |                     |            |                  | 36.96   |           |            |               | 59.46   |               |  |  | 46.19 |  |  |               | 12.45 |  |  |  | 16.85 | 
|                    | Brookvale Shopping Center        |            |                     | 89.11   |                     |            |                  | 76.18   |           |            |               | 0.00    |               |  |  | 0.00  |  |  |               | 10.89 |  |  |  | 23.82 | 
|                    | Cable Park                       |            |                     | 83.73   |                     |            |                  | 67.37   |           |            |               | 0.50    |               |  |  | 1.24  |  |  |               | 15.78 |  |  |  | 31.39 | 
|                    | Canal Farms                      |            |                     | 53.93   |                     |            |                  | 50.55   |           |            |               | 34.59   |               |  |  | 27.96 |  |  |               | 11.48 |  |  |  | 21.48 | 
|                    | Centennial Plaza                 |            |                     | 86.28   |                     |            |                  | 76.24   |           |            |               | 0.00    |               |  |  | 0.00  |  |  |               | 13.72 |  |  |  | 23.76 | 
|                    | Century Center                   |            |                     | 27.72   |                     |            |                  | 42.34   |           |            |               | 55.08   |               |  |  | 24.92 |  |  |               | 17.19 |  |  |  | 32.75 | 
|                    | Chico Crossroads                 |            |                     | 98.61   |                     |            |                  | 97.46   |           |            |               | 0.00    |               |  |  | 0.00  |  |  |               | 1.39  |  |  |  | 2.54  | 
|                    | Cobblestone                      |            |                     | 28.66   |                     |            |                  | 43.69   |           |            |               | 57.95   |               |  |  | 45.48 |  |  |               | 13.38 |  |  |  | 10.83 | 
|                    | Commonwealth Square              |            |                     | 18.07   |                     |            |                  | 24.74   |           |            |               | 44.24   |               |  |  | 23.80 |  |  |               | 37.69 |  |  |  | 51.46 | 
|                    | Country Gables Shopping Center   |            |                     | 10.28   |                     |            |                  | 17.23   |           |            |               | 46.47   |               |  |  | 32.75 |  |  |               | 43.25 |  |  |  | 50.02 | 
|                    | Creekside Center                 |            |                     | 76.80   |                     |            |                  | 59.88   |           |            |               | 0.00    |               |  |  | 0.00  |  |  |               | 23.20 |  |  |  | 40.12 | 
|                    | Currier Square                   |            |                     | 15.15   |                     |            |                  | 19.86   |           |            |               | 45.94   |               |  |  | 49.22 |  |  |               | 38.91 |  |  |  | 30.91 | 
|                    | Dublin Retail Center             |            |                     | 80.32   |                     |            |                  | 74.17   |           |            |               | 0.00    |               |  |  | 0.00  |  |  |               | 19.68 |  |  |  | 25.83 | 
|                    | Eastridge Plaza                  |            |                     | 35.65   |                     |            |                  | 44.12   |           |            |               | 45.22   |               |  |  | 39.31 |  |  |               | 19.12 |  |  |  | 16.57 | 
|                    | Elverta
Crossing Shopping Center |            |                     | 79.20   |                     |            |                  | 69.36   |           |            |               | 6.81    |               |  |  | 10.19 |  |  |               | 14.00 |  |  |  | 20.45 | 
|                    | Fairmont Shopping Center         |            |                     | 64.94   |                     |            |                  | 46.27   |           |            |               | 11.67   |               |  |  | 11.62 |  |  |               | 23.39 |  |  |  | 42.11 | 
|                    | Fashion Faire Place              |            |                     | 76.07   |                     |            |                  | 69.14   |           |            |               | 0.00    |               |  |  | 0.00  |  |  |               | 23.93 |  |  |  | 30.86 | 
|                    | Glen Cove Center                 |            |                     | 81.39   |                     |            |                  | 73.60   |           |            |               | 1.77    |               |  |  | 2.72  |  |  |               | 16.84 |  |  |  | 23.68 | 
|                    | Glenbrook Shopping Center        |            |                     | 70.11   |                     |            |                  | 41.74   |           |            |               | 0.00    |               |  |  | 0.00  |  |  |               | 29.89 |  |  |  | 58.26 | 
|                    | Heritage
Park Shopping Center    |            |                     | 25.74   |                     |            |                  | 29.59   |           |            |               | 44.22   |               |  |  | 31.42 |  |  |               | 30.04 |  |  |  | 38.99 | 
|                    | Heritage Place                   |            |                     | 51.27   |                     |            |                  | 48.17   |           |            |               | 33.56   |               |  |  | 31.43 |  |  |               | 15.17 |  |  |  | 20.40 | 
|                    | K-Mart Center                    |            |                     | 89.06   |                     |            |                  | 65.15   |           |            |               | 0.00    |               |  |  | 0.00  |  |  |               | 10.94 |  |  |  | 34.85 | 
|                    | Laguna 99 Plaza                  |            |                     | 77.52   |                     |            |                  | 62.34   |           |            |               | 2.12    |               |  |  | 3.12  |  |  |               | 20.36 |  |  |  | 34.54 | 
|                    | Laguna Village                   |            |                     | 79.76   |                     |            |                  | 76.35   |           |            |               | 6.06    |               |  |  | 7.21  |  |  |               | 14.18 |  |  |  | 16.44 | 
|                    | Lakewood Shopping Center         |            |                     | 20.06   |                     |            |                  | 31.85   |           |            |               | 52.41   |               |  |  | 30.48 |  |  |               | 27.53 |  |  |  | 37.67 | 
|                    | Lakewood Village                 |            |                     | 69.77   |                     |            |                  | 65.61   |           |            |               | 0.90    |               |  |  | 1.20  |  |  |               | 29.33 |  |  |  | 33.19 | 
|                    | Manteca Marketplace              |            |                     | 37.64   |                     |            |                  | 36.56   |           |            |               | 48.86   |               |  |  | 45.08 |  |  |               | 13.50 |  |  |  | 18.36 | 
|                    | Mission Ridge Plaza              |            |                     | 93.42   |                     |            |                  | 89.94   |           |            |               | 2.21    |               |  |  | 3.45  |  |  |               | 4.36  |  |  |  | 6.61  | 



|(1) |  | The company defines national tenants as any tenant that operates in at least four metropolitan areas located in more than one region, (i.e. northwest,
northeast, midwest, southwest or southeast); regional tenants as any tenant that operates in two or more metropolitan areas located within the same region;
local tenants as any tenant that operates stores only within the same metropolitan area as the shopping center.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Annualized base rent for all leases in place is calculated as follows: total base rent, calculated in accordance with GAAP, to be received during the entire
term of each lease, divided by the terms in months for such leases, multiplied by 12.                                                                                                                                                                                



14



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##### Table of Contents



National, Regional and Local Tenant Mix
12/31/01

|                              |                                  |            |                     |         |                     |            |                  |         |           |            |               |         |               |  |       |       |  |  |               |       |  |  |       |       | 
|----------------------------- | -------------------------------- | ---------- | ------------------- | ------- | ------------------- | ---------- | ---------------- | ------- | --------- | ---------- | ------------- | ------- | ------------- |  | ----- | ----- |  |  | ------------- | ----- |  |  | ----- | ----- | 
|                              |                                  |            | National Tenants(1) |         | Regional Tenants(1) |            | Local Tenants(1)
|                              |                                  |            |                     |         |                     |            |                 
|                              |                                  |            |                     |         |                     |            | % of Property    |         |           |            |               |         | % of Property |  |       |       |  |  | % of Property
|                              |                                  |            | % of Property       |         | Ann. Base           |            | % of Property    |         | Ann. Base |            | % of Property |         | Ann. Base    
|Property                      |                                  | Leased GLA |                     | Rent(2) |                     | Leased GLA |                  | Rent(2) |           | Leased GLA |               | Rent(2)
|                              |                                  |            |                     |         |                     |            |                  |         |           |            |               |        
|                              | Monterey Plaza                   |            |                     | 85.42   |                     |            |                  | 73.48   |           |            |               | 1.62    |               |  |       | 2.85  |  |  |               | 12.95 |  |  |       | 23.67 | 
|                              | Northridge Plaza                 |            |                     | 8.73    |                     |            |                  | 17.83   |           |            |               | 74.29   |               |  |       | 53.46 |  |  |               | 16.98 |  |  |       | 28.72 | 
|                              | Park Place                       |            |                     | 25.98   |                     |            |                  | 33.09   |           |            |               | 44.92   |               |  |       | 30.76 |  |  |               | 29.09 |  |  |       | 36.14 | 
|                              | Pine Creek Shopping Center       |            |                     | 41.10   |                     |            |                  | 39.07   |           |            |               | 29.60   |               |  |       | 23.75 |  |  |               | 29.29 |  |  |       | 37.18 | 
|                              | Plaza 580 Shopping Center        |            |                     | 65.47   |                     |            |                  | 59.70   |           |            |               | 1.74    |               |  |       | 2.52  |  |  |               | 32.79 |  |  |       | 37.77 | 
|                              | Raleys Shopping Center          |            |                     | 47.20   |                     |            |                  | 58.19   |           |            |               | 49.10   |               |  |       | 32.50 |  |  |               | 3.70  |  |  |       | 9.30  | 
|                              | Shops at Lincoln School          |            |                     | 20.52   |                     |            |                  | 35.38   |           |            |               | 52.62   |               |  |       | 35.95 |  |  |               | 26.86 |  |  |       | 28.66 | 
|                              | Sky Park Plaza                   |            |                     | 46.05   |                     |            |                  | 47.13   |           |            |               | 40.17   |               |  |       | 31.20 |  |  |               | 13.78 |  |  |       | 21.67 | 
|                              | Ukiah Crossroads                 |            |                     | 28.16   |                     |            |                  | 38.31   |           |            |               | 59.68   |               |  |       | 47.86 |  |  |               | 12.16 |  |  |       | 13.83 | 
|                              | Victorian Walk                   |            |                     | 45.51   |                     |            |                  | 42.51   |           |            |               | 37.18   |               |  |       | 28.04 |  |  |               | 17.31 |  |  |       | 29.45 | 
|                              | Westwood
Village Shopping Center |            |                     | 44.19   |                     |            |                  | 46.60   |           |            |               | 6.01    |               |  |       | 4.53  |  |  |               | 49.81 |  |  |       | 48.87 | 
|                              | Yreka Junction                   |            |                     | 42.55   |                     |            |                  | 50.02   |           |            |               | 52.19   |               |  |       | 41.32 |  |  |               | 5.26  |  |  |       | 8.66  | 
|Region Total/Weighted Average |                                  |            | 54.02               |         |                     |            | 53.41            |         |           |            | 26.53         |         |               |  | 18.70 |       |  |  | 19.44         |       |  |  | 27.90 |      
|SOUTHERN CALIFORNIA           |                                  |            |                     |         |                     |            |                  |         |           |            |               |         |               |  |       |       |  |  |               |       |  |  |       |      
|                              | Arlington Courtyard              |            |                     | 0.00    |                     |            |                  | 0.00    |           |            |               | 51.52   |               |  |       | 41.97 |  |  |               | 48.48 |  |  |       | 58.03 | 
|                              | Brookhurst Center                |            |                     | 65.01   |                     |            |                  | 64.32   |           |            |               | 0.90    |               |  |       | 1.04  |  |  |               | 34.09 |  |  |       | 34.65 | 
|                              | Canyon Square Plaza              |            |                     | 54.35   |                     |            |                  | 41.26   |           |            |               | 3.00    |               |  |       | 5.21  |  |  |               | 42.64 |  |  |       | 53.53 | 
|                              | Chino Town Square                |            |                     | 79.27   |                     |            |                  | 73.90   |           |            |               | 12.45   |               |  |       | 15.07 |  |  |               | 8.28  |  |  |       | 11.04 | 
|                              | Encinitas Marketplace            |            |                     | 75.49   |                     |            |                  | 65.71   |           |            |               | 6.95    |               |  |       | 7.58  |  |  |               | 17.56 |  |  |       | 26.70 | 
|                              | Granary Square                   |            |                     | 45.39   |                     |            |                  | 41.71   |           |            |               | 33.81   |               |  |       | 22.92 |  |  |               | 20.80 |  |  |       | 35.36 | 
|                              | Laurentian Center                |            |                     | 47.30   |                     |            |                  | 46.49   |           |            |               | 27.01   |               |  |       | 26.61 |  |  |               | 25.69 |  |  |       | 26.90 | 
|                              | Marina Village                   |            |                     | 60.35   |                     |            |                  | 50.63   |           |            |               | 21.02   |               |  |       | 25.82 |  |  |               | 18.64 |  |  |       | 23.54 | 
|                              | Melrose Village Plaza            |            |                     | 84.41   |                     |            |                  | 76.83   |           |            |               | 0.00    |               |  |       | 0.00  |  |  |               | 15.59 |  |  |       | 23.17 | 
|                              | Palmdale Center                  |            |                     | 87.71   |                     |            |                  | 77.50   |           |            |               | 0.00    |               |  |       | 0.00  |  |  |               | 12.29 |  |  |       | 22.50 | 
|                              | Rancho Las Palmas                |            |                     | 57.62   |                     |            |                  | 40.90   |           |            |               | 3.05    |               |  |       | 2.91  |  |  |               | 39.33 |  |  |       | 56.18 | 
|                              | San Dimas Marketplace            |            |                     | 91.64   |                     |            |                  | 87.86   |           |            |               | 2.87    |               |  |       | 4.06  |  |  |               | 5.49  |  |  |       | 8.07  | 
|                              | Sycamore Plaza                   |            |                     | 33.86   |                     |            |                  | 23.41   |           |            |               | 41.12   |               |  |       | 26.68 |  |  |               | 25.02 |  |  |       | 49.91 | 
|                              | Tustin Heights Shopping Center   |            |                     | 52.42   |                     |            |                  | 57.48   |           |            |               | 38.36   |               |  |       | 25.41 |  |  |               | 9.22  |  |  |       | 17.11 | 
|                              | Vineyard Village                 |            |                     | 86.28   |                     |            |                  | 74.95   |           |            |               | 0.00    |               |  |       | 4.89  |  |  |               | 13.72 |  |  |       | 20.16 | 
|Region Total/Weighted Average |                                  |            | 66.32               |         |                     |            | 60.46            |         |           |            | 13.70         |         |               |  | 12.43 |       |  |  | 19.98         |       |  |  | 27.11 |      



|(1) |  | The company defines national tenants as any tenant that operates in at least four metropolitan areas located in more than one region, (i.e. northwest,
northeast, midwest, southwest or southeast); regional tenants as any tenant that operates in two or more metropolitan areas located within the same region;
local tenants as any tenant that operates stores only within the same metropolitan area as the shopping center.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Annualized base rent for all leases in place is calculated as follows: total base rent, calculated in accordance with GAAP, to be received during the entire
term of each lease, divided by the terms in months for such leases, multiplied by 12.                                                                                                                                                                                



15



---



##### Table of Contents



National, Regional and Local Tenant Mix
12/31/01

|                              |                              |            |                     |         |                     |            |                  |         |           |            |               |         |               |  |       |       |  |  |               |       |  |  |       |       | 
|----------------------------- | ---------------------------- | ---------- | ------------------- | ------- | ------------------- | ---------- | ---------------- | ------- | --------- | ---------- | ------------- | ------- | ------------- |  | ----- | ----- |  |  | ------------- | ----- |  |  | ----- | ----- | 
|                              |                              |            | National Tenants(1) |         | Regional Tenants(1) |            | Local Tenants(1)
|                              |                              |            |                     |         |                     |            |                 
|                              |                              |            |                     |         |                     |            | % of Property    |         |           |            |               |         | % of Property |  |       |       |  |  | % of Property
|                              |                              |            | % of Property       |         | Ann. Base           |            | % of Property    |         | Ann. Base |            | % of Property |         | Ann. Base    
|Property                      |                              | Leased GLA |                     | Rent(2) |                     | Leased GLA |                  | Rent(2) |           | Leased GLA |               | Rent(2)
|                              |                              |            |                     |         |                     |            |                  |         |           |            |               |        
|WASHINGTON                    |                              |            |                     |         |                     |            |                  |         |           |            |               |         |               |  |       |       |  |  |               |       |  |  |       |      
|                              | Auburn North                 |            |                     | 80.32   |                     |            |                  | 72.07   |           |            |               | 16.23   |               |  |       | 20.18 |  |  |               | 3.45  |  |  |       | 7.75  | 
|                              | Blaine International Center  |            |                     | 40.46   |                     |            |                  | 41.52   |           |            |               | 47.59   |               |  |       | 48.74 |  |  |               | 11.95 |  |  |       | 9.74  | 
|                              | Canyon Ridge Plaza           |            |                     | 82.74   |                     |            |                  | 75.99   |           |            |               | 0.00    |               |  |       | 1.26  |  |  |               | 17.26 |  |  |       | 22.75 | 
|                              | Claremont Village Plaza      |            |                     | 77.13   |                     |            |                  | 77.98   |           |            |               | 0.00    |               |  |       | 0.00  |  |  |               | 22.87 |  |  |       | 22.02 | 
|                              | Garrison Square              |            |                     | 0.00    |                     |            |                  | 0.00    |           |            |               | 66.81   |               |  |       | 66.45 |  |  |               | 33.19 |  |  |       | 33.55 | 
|                              | Gateway Shopping Center      |            |                     | 73.88   |                     |            |                  | 67.17   |           |            |               | 0.00    |               |  |       | 0.00  |  |  |               | 26.12 |  |  |       | 32.83 | 
|                              | Olympia Square               |            |                     | 75.82   |                     |            |                  | 67.43   |           |            |               | 12.33   |               |  |       | 17.33 |  |  |               | 11.85 |  |  |       | 15.24 | 
|                              | Olympia West Center          |            |                     | 83.05   |                     |            |                  | 87.57   |           |            |               | 8.48    |               |  |       | 7.15  |  |  |               | 8.47  |  |  |       | 5.28  | 
|                              | Pacific Commons              |            |                     | 41.64   |                     |            |                  | 41.98   |           |            |               | 9.76    |               |  |       | 6.61  |  |  |               | 48.60 |  |  |       | 51.41 | 
|                              | Panther Lake                 |            |                     | 71.73   |                     |            |                  | 66.73   |           |            |               | 6.08    |               |  |       | 5.78  |  |  |               | 22.19 |  |  |       | 27.49 | 
|                              | Sunset Square                |            |                     | 65.92   |                     |            |                  | 55.73   |           |            |               | 26.82   |               |  |       | 30.67 |  |  |               | 7.25  |  |  |       | 13.60 | 
|                              | Tacoma Central               |            |                     | 74.28   |                     |            |                  | 67.29   |           |            |               | 6.34    |               |  |       | 11.77 |  |  |               | 19.39 |  |  |       | 20.94 | 
|Region Total/Weighted Average |                              |            | 65.51               |         |                     |            | 62.13            |         |           |            | 17.39         |         |               |  | 16.85 |       |  |  | 17.10         |       |  |  | 21.02 |      
|OREGON                        |                              |            |                     |         |                     |            |                  |         |           |            |               |         |               |  |       |       |  |  |               |       |  |  |       |      
|                              | Albany Plaza                 |            |                     | 79.09   |                     |            |                  | 72.71   |           |            |               | 5.07    |               |  |       | 7.37  |  |  |               | 15.84 |  |  |       | 19.92 | 
|                              | Bear Creek Plaza             |            |                     | 88.06   |                     |            |                  | 81.17   |           |            |               | 6.83    |               |  |       | 8.81  |  |  |               | 5.11  |  |  |       | 10.02 | 
|                              | Canby Square Shopping Center |            |                     | 86.40   |                     |            |                  | 83.89   |           |            |               | 0.00    |               |  |       | 0.00  |  |  |               | 13.60 |  |  |       | 16.11 | 
|                              | East Burnside Plaza          |            |                     | 14.45   |                     |            |                  | 20.50   |           |            |               | 81.29   |               |  |       | 74.65 |  |  |               | 4.26  |  |  |       | 4.85  | 
|                              | Foster Square                |            |                     | 63.18   |                     |            |                  | 52.88   |           |            |               | 0.00    |               |  |       | 0.00  |  |  |               | 36.82 |  |  |       | 47.12 | 
|                              | Hermiston Plaza              |            |                     | 79.42   |                     |            |                  | 60.41   |           |            |               | 8.18    |               |  |       | 16.31 |  |  |               | 12.40 |  |  |       | 23.28 | 
|                              | Hood River Shopping Center   |            |                     | 11.29   |                     |            |                  | 11.63   |           |            |               | 71.93   |               |  |       | 70.87 |  |  |               | 16.79 |  |  |       | 17.50 | 
|                              | Menlo Park Plaza             |            |                     | 55.59   |                     |            |                  | 66.20   |           |            |               | 0.00    |               |  |       | 0.00  |  |  |               | 44.41 |  |  |       | 33.80 | 
|                              | Milwaukie Marketplace        |            |                     | 86.37   |                     |            |                  | 68.53   |           |            |               | 4.18    |               |  |       | 12.31 |  |  |               | 9.45  |  |  |       | 19.15 | 
|                              | Oregon City Shopping Center  |            |                     | 69.35   |                     |            |                  | 52.64   |           |            |               | 5.42    |               |  |       | 13.31 |  |  |               | 25.23 |  |  |       | 34.06 | 
|                              | Oregon Trail Shopping Center |            |                     | 55.75   |                     |            |                  | 50.79   |           |            |               | 3.53    |               |  |       | 7.13  |  |  |               | 40.72 |  |  |       | 42.08 | 
|                              | Pioneer Plaza                |            |                     | 69.70   |                     |            |                  | 54.33   |           |            |               | 12.16   |               |  |       | 20.85 |  |  |               | 18.14 |  |  |       | 24.82 | 
|                              | Powell Valley Junction       |            |                     | 65.43   |                     |            |                  | 63.29   |           |            |               | 0.00    |               |  |       | 0.00  |  |  |               | 34.57 |  |  |       | 36.71 | 
|                              | Powell Villa                 |            |                     | 20.38   |                     |            |                  | 10.82   |           |            |               | 2.51    |               |  |       | 1.87  |  |  |               | 77.11 |  |  |       | 87.31 | 
|                              | Raleigh Hills Plaza          |            |                     | 38.26   |                     |            |                  | 35.92   |           |            |               | 0.00    |               |  |       | 0.00  |  |  |               | 61.74 |  |  |       | 64.08 | 
|                              | Rockwood Plaza               |            |                     | 33.76   |                     |            |                  | 29.68   |           |            |               | 0.00    |               |  |       | 0.00  |  |  |               | 66.24 |  |  |       | 70.32 | 



|(1) |  | The company defines national tenants as any tenant that operates in at least four metropolitan areas located in more than one region, (i.e. northwest,
northeast, midwest, southwest or southeast); regional tenants as any tenant that operates in two or more metropolitan areas located within the same region;
local tenants as any tenant that operates stores only within the same metropolitan area as the shopping center.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Annualized base rent for all leases in place is calculated as follows: total base rent, calculated in accordance with GAAP, to be received during the entire
term of each lease, divided by the terms in months for such leases, multiplied by 12.                                                                                                                                                                                



16



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##### Table of Contents



National, Regional and Local Tenant Mix
12/31/01

|                                 |                               |            |                     |         |                     |            |                  |         |           |            |               |         |               |  |       |        |  |  |               |        |  |  |       |        | 
|-------------------------------- | ----------------------------- | ---------- | ------------------- | ------- | ------------------- | ---------- | ---------------- | ------- | --------- | ---------- | ------------- | ------- | ------------- |  | ----- | ------ |  |  | ------------- | ------ |  |  | ----- | ------ | 
|                                 |                               |            | National Tenants(1) |         | Regional Tenants(1) |            | Local Tenants(1)
|                                 |                               |            |                     |         |                     |            |                 
|                                 |                               |            |                     |         |                     |            | % of Property    |         |           |            |               |         | % of Property |  |       |        |  |  | % of Property
|                                 |                               |            | % of Property       |         | Ann. Base           |            | % of Property    |         | Ann. Base |            | % of Property |         | Ann. Base    
|Property                         |                               | Leased GLA |                     | Rent(2) |                     | Leased GLA |                  | Rent(2) |           | Leased GLA |               | Rent(2)
|                                 |                               |            |                     |         |                     |            |                  |         |           |            |               |        
|                                 | Sandy Marketplace             |            |                     | 40.23   |                     |            |                  | 50.33   |           |            |               | 22.73   |               |  |       | 17.08  |  |  |               | 37.04  |  |  |       | 32.59  | 
|                                 | Shute Park Plaza              |            |                     | 24.12   |                     |            |                  | 22.42   |           |            |               | 15.17   |               |  |       | 18.08  |  |  |               | 60.71  |  |  |       | 59.50  | 
|                                 | Southgate Shopping Center     |            |                     | 70.63   |                     |            |                  | 61.72   |           |            |               | 10.69   |               |  |       | 12.15  |  |  |               | 18.67  |  |  |       | 26.12  | 
|                                 | St. Johns Plaza              |            |                     | 81.94   |                     |            |                  | 75.70   |           |            |               | 6.81    |               |  |       | 10.41  |  |  |               | 11.25  |  |  |       | 13.89  | 
|                                 | Sunset Mall                   |            |                     | 74.79   |                     |            |                  | 57.60   |           |            |               | 5.14    |               |  |       | 10.01  |  |  |               | 20.07  |  |  |       | 32.39  | 
|                                 | Tacoma Shopping Center        |            |                     | 0.00    |                     |            |                  | 0.00    |           |            |               | 0.00    |               |  |       | 0.00   |  |  |               | 100.00 |  |  |       | 100.00 | 
|                                 | Tanasbourne Village           |            |                     | 70.46   |                     |            |                  | 60.73   |           |            |               | 6.57    |               |  |       | 10.84  |  |  |               | 22.98  |  |  |       | 28.42  | 
|Region Total/Weighted Average    |                               |            | 63.13               |         |                     |            | 53.96            |         |           |            | 9.75          |         |               |  | 12.16 |        |  |  | 27.12         |        |  |  | 33.88 |       
|NEVADA                           |                               |            |                     |         |                     |            |                  |         |           |            |               |         |               |  |       |        |  |  |               |        |  |  |       |       
|                                 | Caughlin Ranch                |            |                     | 13.34   |                     |            |                  | 20.54   |           |            |               | 53.66   |               |  |       | 44.81  |  |  |               | 33.00  |  |  |       | 34.65  | 
|                                 | Cheyenne Commons              |            |                     | 78.09   |                     |            |                  | 74.27   |           |            |               | 13.03   |               |  |       | 9.43   |  |  |               | 8.89   |  |  |       | 16.30  | 
|                                 | Dodge Center                  |            |                     | 0.00    |                     |            |                  | 0.00    |           |            |               | 100.00  |               |  |       | 100.00 |  |  |               | 0.00   |  |  |       | 0.00   | 
|                                 | Eagle Station                 |            |                     | 24.59   |                     |            |                  | 35.64   |           |            |               | 58.94   |               |  |       | 36.10  |  |  |               | 16.47  |  |  |       | 28.25  | 
|                                 | Elko Junction Shopping Center |            |                     | 15.60   |                     |            |                  | 19.45   |           |            |               | 36.74   |               |  |       | 27.50  |  |  |               | 47.66  |  |  |       | 53.05  | 
|                                 | Green Valley Town & Country   |            |                     | 57.47   |                     |            |                  | 44.22   |           |            |               | 4.39    |               |  |       | 5.15   |  |  |               | 38.14  |  |  |       | 50.63  | 
|                                 | Mira Loma Center # 636        |            |                     | 40.77   |                     |            |                  | 34.45   |           |            |               | 38.39   |               |  |       | 37.43  |  |  |               | 20.84  |  |  |       | 28.12  | 
|                                 | Rainbow Promenade             |            |                     | 87.28   |                     |            |                  | 79.80   |           |            |               | 3.26    |               |  |       | 5.43   |  |  |               | 9.46   |  |  |       | 14.77  | 
|                                 | Raleys                       |            |                     | 0.00    |                     |            |                  | 0.00    |           |            |               | 100.00  |               |  |       | 100.00 |  |  |               | 0.00   |  |  |       | 0.00   | 
|                                 | Sahara Pavilion North         |            |                     | 70.89   |                     |            |                  | 59.38   |           |            |               | 11.84   |               |  |       | 13.43  |  |  |               | 17.27  |  |  |       | 27.19  | 
|                                 | Sahara Pavilion South         |            |                     | 77.74   |                     |            |                  | 71.30   |           |            |               | 0.95    |               |  |       | 1.68   |  |  |               | 21.30  |  |  |       | 27.02  | 
|                                 | West Town                     |            |                     | 0.00    |                     |            |                  | 0.00    |           |            |               | 96.33   |               |  |       | 93.93  |  |  |               | 3.67   |  |  |       | 6.07   | 
|                                 | Winterwood Pavilion           |            |                     | 79.88   |                     |            |                  | 69.97   |           |            |               | 4.82    |               |  |       | 5.99   |  |  |               | 15.29  |  |  |       | 24.04  | 
|Region Total/Weighted Average    |                               |            | 57.02               |         |                     |            | 55.57            |         |           |            | 24.36         |         |               |  | 17.96 |        |  |  | 18.62         |        |  |  | 26.47 |       
|OTHER                            |                               |            |                     |         |                     |            |                  |         |           |            |               |         |               |  |       |        |  |  |               |        |  |  |       |       
|                                 | Country Club Center           |            |                     | 36.61   |                     |            |                  | 48.86   |           |            |               | 5.27    |               |  |       | 3.29   |  |  |               | 58.12  |  |  |       | 47.85  | 
|                                 | Maysville Marketsquare        |            |                     | 86.28   |                     |            |                  | 80.99   |           |            |               | 5.06    |               |  |       | 6.07   |  |  |               | 8.66   |  |  |       | 12.95  | 
|                                 | Memphis Retail Center         |            |                     | 62.97   |                     |            |                  | 62.84   |           |            |               | 0.00    |               |  |       | 0.00   |  |  |               | 37.03  |  |  |       | 37.16  | 
|Region Total/Weighted Average    |                               |            | 70.84               |         |                     |            | 67.79            |         |           |            | 4.12          |         |               |  | 3.93  |        |  |  | 25.04         |        |  |  | 28.27 |       
|Portfolio Total/Weighted Average |                               |            | 59.54               |         |                     |            | 56.25            |         |           |            | 19.88         |         |               |  | 16.08 |        |  |  | 20.59         |        |  |  | 27.67 |       



|(1) |  | The company defines national tenants as any tenant that operates in at least four metropolitan areas located in more than one region, (i.e. northwest,
northeast, midwest, southwest or southeast); regional tenants as any tenant that operates in two or more metropolitan areas located within the same region;
local tenants as any tenant that operates stores only within the same metropolitan area as the shopping center.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Annualized base rent for all leases in place is calculated as follows: total base rent, calculated in accordance with GAAP, to be received during the entire
term of each lease, divided by the terms in months for such leases, multiplied by 12.                                                                                                                                                                                



17



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##### Table of Contents



Anchor and Non-Anchor Tenant Mix
12/31/01

|                    |                                  |     |                   |         |                       |     |          |         |               |  |  |       |  |  |  |       | 
|------------------- | -------------------------------- | --- | ----------------- | ------- | --------------------- | --- | -------- | ------- | ------------- |  |  | ----- |  |  |  | ----- | 
|                    |                                  |     | Anchor Tenants(1) |         | Non-Anchor Tenants(1)
|                    |                                  |     |                   |         |                      
|                    |                                  |     | % of              |         | % of Property         |     | % of     |         | % of Property
|                    |                                  |     | Occupied          |         | Ann. Base             |     | Occupied |         | Ann. Base    
|Property            |                                  | GLA |                   | Rent(2) |                       | GLA |          | Rent(2)
|                    |                                  |     |                   |         |                       |     |          |        
|NORTHERN CALIFORNIA |                                  |     |                   |         |                       |     |          |         |               |  |  |       |  |  |  |      
|                    | Anderson Square                  |     |                   | 52.82   |                       |     |          | 28.50   |               |  |  | 47.18 |  |  |  | 71.50 | 
|                    | Angels Camp Town Center          |     |                   | 79.11   |                       |     |          | 57.33   |               |  |  | 20.89 |  |  |  | 42.67 | 
|                    | Blossom Valley Plaza             |     |                   | 54.89   |                       |     |          | 38.13   |               |  |  | 45.11 |  |  |  | 61.87 | 
|                    | Brookvale Shopping Center        |     |                   | 73.59   |                       |     |          | 45.57   |               |  |  | 26.41 |  |  |  | 54.43 | 
|                    | Cable Park                       |     |                   | 67.75   |                       |     |          | 34.83   |               |  |  | 32.25 |  |  |  | 65.17 | 
|                    | Canal Farms                      |     |                   | 63.06   |                       |     |          | 49.84   |               |  |  | 36.94 |  |  |  | 50.16 | 
|                    | Centennial Plaza                 |     |                   | 67.18   |                       |     |          | 51.90   |               |  |  | 32.82 |  |  |  | 48.10 | 
|                    | Century Center                   |     |                   | 64.09   |                       |     |          | 31.72   |               |  |  | 35.91 |  |  |  | 68.28 | 
|                    | Chico Crossroads                 |     |                   | 85.56   |                       |     |          | 75.52   |               |  |  | 14.44 |  |  |  | 24.48 | 
|                    | Cobblestone                      |     |                   | 54.46   |                       |     |          | 37.53   |               |  |  | 45.54 |  |  |  | 62.47 | 
|                    | Commonwealth Square              |     |                   | 42.54   |                       |     |          | 21.79   |               |  |  | 57.46 |  |  |  | 78.21 | 
|                    | Country Gables Shopping Center   |     |                   | 43.70   |                       |     |          | 27.46   |               |  |  | 56.30 |  |  |  | 72.54 | 
|                    | Creekside Center                 |     |                   | 67.45   |                       |     |          | 34.65   |               |  |  | 32.55 |  |  |  | 65.35 | 
|                    | Currier Square                   |     |                   | 45.94   |                       |     |          | 49.22   |               |  |  | 54.06 |  |  |  | 50.78 | 
|                    | Dublin Retail Center             |     |                   | 89.33   |                       |     |          | 83.94   |               |  |  | 10.67 |  |  |  | 16.06 | 
|                    | Eastridge Plaza                  |     |                   | 64.77   |                       |     |          | 55.41   |               |  |  | 35.23 |  |  |  | 44.59 | 
|                    | Elverta
Crossing Shopping Center |     |                   | 58.98   |                       |     |          | 38.78   |               |  |  | 41.02 |  |  |  | 61.22 | 
|                    | Fairmont Shopping Center         |     |                   | 50.12   |                       |     |          | 24.17   |               |  |  | 49.88 |  |  |  | 75.83 | 
|                    | Fashion Faire Place              |     |                   | 48.00   |                       |     |          | 32.36   |               |  |  | 52.00 |  |  |  | 67.64 | 
|                    | Glen Cove Center                 |     |                   | 76.30   |                       |     |          | 66.97   |               |  |  | 23.70 |  |  |  | 33.03 | 
|                    | Glenbrook Shopping Center        |     |                   | 58.36   |                       |     |          | 16.53   |               |  |  | 41.64 |  |  |  | 83.47 | 
|                    | Heritage
Park Shopping Center    |     |                   | 47.62   |                       |     |          | 32.95   |               |  |  | 52.38 |  |  |  | 67.05 | 
|                    | Heritage Place                   |     |                   | 53.63   |                       |     |          | 39.08   |               |  |  | 46.37 |  |  |  | 60.92 | 
|                    | K-Mart Center                    |     |                   | 73.55   |                       |     |          | 22.10   |               |  |  | 26.45 |  |  |  | 77.90 | 
|                    | Laguna 99 Plaza                  |     |                   | 65.96   |                       |     |          | 43.05   |               |  |  | 34.04 |  |  |  | 56.95 | 
|                    | Laguna Village                   |     |                   | 74.70   |                       |     |          | 70.08   |               |  |  | 25.30 |  |  |  | 29.92 | 
|                    | Lakewood Shopping Center         |     |                   | 52.41   |                       |     |          | 30.48   |               |  |  | 47.59 |  |  |  | 69.52 | 
|                    | Lakewood Village                 |     |                   | 57.50   |                       |     |          | 49.79   |               |  |  | 42.50 |  |  |  | 50.21 | 
|                    | Manteca Marketplace              |     |                   | 55.98   |                       |     |          | 48.25   |               |  |  | 44.02 |  |  |  | 51.75 | 
|                    | Mission Ridge Plaza              |     |                   | 60.10   |                       |     |          | 50.97   |               |  |  | 39.90 |  |  |  | 49.03 | 



|(1) |  | Anchors defined as single tenants which lease 15,000 square feet or more, non-anchors defined as tenants which lease less than 15,000 square feet.                                                                                                
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Annualized base rent for all leases in place is calculated as follows: total base rent, calculated in accordance with GAAP, to be received during the entire
term of each lease, divided by the terms in months for such leases, multiplied by 12.

18



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##### Table of Contents



Anchor and Non-Anchor Tenant Mix
12/31/01

|                              |                                  |     |                   |         |                       |     |          |         |               |  |       |        |  |  |       |        | 
|----------------------------- | -------------------------------- | --- | ----------------- | ------- | --------------------- | --- | -------- | ------- | ------------- |  | ----- | ------ |  |  | ----- | ------ | 
|                              |                                  |     | Anchor Tenants(1) |         | Non-Anchor Tenants(1)
|                              |                                  |     |                   |         |                      
|                              |                                  |     | % of              |         | % of Property         |     | % of     |         | % of Property
|                              |                                  |     | Occupied          |         | Ann. Base             |     | Occupied |         | Ann. Base    
|Property                      |                                  | GLA |                   | Rent(2) |                       | GLA |          | Rent(2)
|                              |                                  |     |                   |         |                       |     |          |        
|                              | Monterey Plaza                   |     |                   | 55.41   |                       |     |          | 26.70   |               |  |       | 44.59  |  |  |       | 73.30  | 
|                              | Northridge Plaza                 |     |                   | 65.94   |                       |     |          | 39.34   |               |  |       | 34.06  |  |  |       | 60.66  | 
|                              | Park Place                       |     |                   | 56.57   |                       |     |          | 38.83   |               |  |       | 43.43  |  |  |       | 61.17  | 
|                              | Pine Creek Shopping Center       |     |                   | 45.98   |                       |     |          | 31.47   |               |  |       | 54.02  |  |  |       | 68.53  | 
|                              | Plaza 580 Shopping Center        |     |                   | 23.26   |                       |     |          | 12.34   |               |  |       | 76.74  |  |  |       | 87.66  | 
|                              | Raleys Shopping Center          |     |                   | 70.07   |                       |     |          | 41.70   |               |  |       | 29.93  |  |  |       | 58.30  | 
|                              | Shops at Lincoln School          |     |                   | 52.62   |                       |     |          | 35.95   |               |  |       | 47.38  |  |  |       | 64.05  | 
|                              | Sky Park Plaza                   |     |                   | 63.97   |                       |     |          | 45.38   |               |  |       | 36.03  |  |  |       | 54.62  | 
|                              | Ukiah Crossroads                 |     |                   | 56.39   |                       |     |          | 43.15   |               |  |       | 43.61  |  |  |       | 56.85  | 
|                              | Victorian Walk                   |     |                   | 69.94   |                       |     |          | 51.66   |               |  |       | 30.06  |  |  |       | 48.34  | 
|                              | Westwood
Village Shopping Center |     |                   | 54.46   |                       |     |          | 40.65   |               |  |       | 45.54  |  |  |       | 59.35  | 
|                              | Yreka Junction                   |     |                   | 64.65   |                       |     |          | 38.93   |               |  |       | 35.35  |  |  |       | 61.07  | 
|Region Total/Weighted Average |                                  |     | 60.62             |         |                       |     | 41.48    |         |               |  | 39.38 |        |  |  | 58.52 |       
|SOUTHERN CALIFORNIA           |                                  |     |                   |         |                       |     |          |         |               |  |       |        |  |  |       |       
|                              | Arlington Courtyard              |     |                   | 0.00    |                       |     |          | 0.00    |               |  |       | 100.00 |  |  |       | 100.00 | 
|                              | Brookhurst Center                |     |                   | 34.96   |                       |     |          | 30.03   |               |  |       | 65.04  |  |  |       | 69.97  | 
|                              | Canyon Square Plaza              |     |                   | 42.56   |                       |     |          | 27.15   |               |  |       | 57.44  |  |  |       | 72.85  | 
|                              | Chino Town Square                |     |                   | 61.42   |                       |     |          | 52.56   |               |  |       | 38.58  |  |  |       | 47.44  | 
|                              | Encinitas Marketplace            |     |                   | 45.60   |                       |     |          | 20.15   |               |  |       | 54.40  |  |  |       | 79.85  | 
|                              | Granary Square                   |     |                   | 44.87   |                       |     |          | 17.73   |               |  |       | 55.13  |  |  |       | 82.27  | 
|                              | Laurentian Center                |     |                   | 37.47   |                       |     |          | 31.28   |               |  |       | 62.53  |  |  |       | 68.72  | 
|                              | Marina Village                   |     |                   | 41.27   |                       |     |          | 30.04   |               |  |       | 58.73  |  |  |       | 69.96  | 
|                              | Melrose Village Plaza            |     |                   | 52.54   |                       |     |          | 36.51   |               |  |       | 47.46  |  |  |       | 63.49  | 
|                              | Palmdale Center                  |     |                   | 75.79   |                       |     |          | 51.31   |               |  |       | 24.21  |  |  |       | 48.69  | 
|                              | Rancho Las Palmas                |     |                   | 33.62   |                       |     |          | 9.76    |               |  |       | 66.38  |  |  |       | 90.24  | 
|                              | San Dimas Marketplace            |     |                   | 46.88   |                       |     |          | 38.76   |               |  |       | 53.12  |  |  |       | 61.24  | 
|                              | Sycamore Plaza                   |     |                   | 62.85   |                       |     |          | 22.41   |               |  |       | 37.15  |  |  |       | 77.59  | 
|                              | Tustin Heights Shopping Center   |     |                   | 62.36   |                       |     |          | 39.77   |               |  |       | 37.64  |  |  |       | 60.23  | 
|                              | Vineyard Village                 |     |                   | 57.52   |                       |     |          | 41.74   |               |  |       | 42.48  |  |  |       | 58.26  | 
|Region Total/Weighted Average |                                  |     | 49.27             |         |                       |     | 32.88    |         |               |  | 50.73 |        |  |  | 67.12 |       



|(1) |  | Anchors defined as single tenants which lease 15,000 square feet or more, non-anchors defined as tenants which lease less than 15,000 square feet.                                                                                                
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Annualized base rent for all leases in place is calculated as follows: total base rent, calculated in accordance with GAAP, to be received during the entire
term of each lease, divided by the terms in months for such leases, multiplied by 12.

19



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##### Table of Contents



Anchor and Non-Anchor Tenant Mix
12/31/01

|                              |                              |     |                   |         |                       |     |          |         |               |  |       |       |  |  |       |       | 
|----------------------------- | ---------------------------- | --- | ----------------- | ------- | --------------------- | --- | -------- | ------- | ------------- |  | ----- | ----- |  |  | ----- | ----- | 
|                              |                              |     | Anchor Tenants(1) |         | Non-Anchor Tenants(1)
|                              |                              |     |                   |         |                      
|                              |                              |     | % of              |         | % of Property         |     | % of     |         | % of Property
|                              |                              |     | Occupied          |         | Ann. Base             |     | Occupied |         | Ann. Base    
|Property                      |                              | GLA |                   | Rent(2) |                       | GLA |          | Rent(2)
|                              |                              |     |                   |         |                       |     |          |        
|WASHINGTON                    |                              |     |                   |         |                       |     |          |         |               |  |       |       |  |  |       |      
|                              | Auburn North                 |     |                   | 65.47   |                       |     |          | 43.22   |               |  |       | 34.53 |  |  |       | 56.78 | 
|                              | Blaine International Center  |     |                   | 75.07   |                       |     |          | 70.12   |               |  |       | 24.93 |  |  |       | 29.88 | 
|                              | Canyon Ridge Plaza           |     |                   | 32.06   |                       |     |          | 17.86   |               |  |       | 67.94 |  |  |       | 82.14 | 
|                              | Claremont Village Plaza      |     |                   | 44.61   |                       |     |          | 43.15   |               |  |       | 55.39 |  |  |       | 56.85 | 
|                              | Garrison Square              |     |                   | 56.91   |                       |     |          | 48.41   |               |  |       | 43.09 |  |  |       | 51.59 | 
|                              | Gateway Shopping Center      |     |                   | 59.66   |                       |     |          | 50.49   |               |  |       | 40.34 |  |  |       | 49.51 | 
|                              | Olympia Square               |     |                   | 45.74   |                       |     |          | 31.04   |               |  |       | 54.26 |  |  |       | 68.96 | 
|                              | Olympia West Center          |     |                   | 56.65   |                       |     |          | 62.17   |               |  |       | 43.35 |  |  |       | 37.83 | 
|                              | Pacific Commons              |     |                   | 50.43   |                       |     |          | 47.40   |               |  |       | 49.57 |  |  |       | 52.60 | 
|                              | Panther Lake                 |     |                   | 33.84   |                       |     |          | 18.95   |               |  |       | 66.16 |  |  |       | 81.05 | 
|                              | Sunset Square                |     |                   | 76.25   |                       |     |          | 57.73   |               |  |       | 23.75 |  |  |       | 42.27 | 
|                              | Tacoma Central               |     |                   | 70.23   |                       |     |          | 53.58   |               |  |       | 29.77 |  |  |       | 46.42 | 
|Region Total/Weighted Average |                              |     | 60.14             |         |                       |     | 46.76    |         |               |  | 39.86 |       |  |  | 53.24 |      
|OREGON                        |                              |     |                   |         |                       |     |          |         |               |  |       |       |  |  |       |      
|                              | Albany Plaza                 |     |                   | 44.80   |                       |     |          | 33.99   |               |  |       | 55.20 |  |  |       | 66.01 | 
|                              | Bear Creek Plaza             |     |                   | 70.04   |                       |     |          | 52.64   |               |  |       | 29.96 |  |  |       | 47.36 | 
|                              | Canby Square Shopping Center |     |                   | 65.13   |                       |     |          | 69.74   |               |  |       | 34.87 |  |  |       | 30.26 | 
|                              | East Burnside Plaza          |     |                   | 78.49   |                       |     |          | 69.97   |               |  |       | 21.51 |  |  |       | 30.03 | 
|                              | Foster Square                |     |                   | 63.18   |                       |     |          | 52.88   |               |  |       | 36.82 |  |  |       | 47.12 | 
|                              | Hermiston Plaza              |     |                   | 51.37   |                       |     |          | 27.80   |               |  |       | 48.63 |  |  |       | 72.20 | 
|                              | Hood River Shopping Center   |     |                   | 66.81   |                       |     |          | 53.65   |               |  |       | 33.19 |  |  |       | 46.35 | 
|                              | Menlo Park Plaza             |     |                   | 35.55   |                       |     |          | 44.73   |               |  |       | 64.45 |  |  |       | 55.27 | 
|                              | Milwaukie Marketplace        |     |                   | 53.84   |                       |     |          | 29.33   |               |  |       | 46.16 |  |  |       | 70.67 | 
|                              | Oregon City Shopping Center  |     |                   | 73.04   |                       |     |          | 46.70   |               |  |       | 26.96 |  |  |       | 53.30 | 
|                              | Oregon Trail Shopping Center |     |                   | 66.88   |                       |     |          | 52.30   |               |  |       | 33.12 |  |  |       | 47.70 | 
|                              | Pioneer Plaza                |     |                   | 48.96   |                       |     |          | 33.03   |               |  |       | 51.04 |  |  |       | 66.97 | 
|                              | Powell Valley Junction       |     |                   | 79.72   |                       |     |          | 68.09   |               |  |       | 20.28 |  |  |       | 31.91 | 
|                              | Powell Villa                 |     |                   | 59.23   |                       |     |          | 70.20   |               |  |       | 40.77 |  |  |       | 29.80 | 
|                              | Raleigh Hills Plaza          |     |                   | 96.01   |                       |     |          | 91.99   |               |  |       | 3.99  |  |  |       | 8.01  | 
|                              | Rockwood Plaza               |     |                   | 49.15   |                       |     |          | 34.57   |               |  |       | 50.85 |  |  |       | 65.43 | 
|                              | Sandy Marketplace            |     |                   | 50.50   |                       |     |          | 36.51   |               |  |       | 49.50 |  |  |       | 63.49 | 



|(1) |  | Anchors defined as single tenants which lease 15,000 square feet or more, non-anchors defined as tenants which lease less than 15,000 square feet.                                                                                                
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Annualized base rent for all leases in place is calculated as follows: total base rent, calculated in accordance with GAAP, to be received during the entire
term of each lease, divided by the terms in months for such leases, multiplied by 12.

20



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##### Table of Contents









Anchor and Non-Anchor Tenant Mix
12/31/01

|                                 |                               |     |                   |         |                       |     |          |         |               |  |       |        |  |  |       |        | 
|-------------------------------- | ----------------------------- | --- | ----------------- | ------- | --------------------- | --- | -------- | ------- | ------------- |  | ----- | ------ |  |  | ----- | ------ | 
|                                 |                               |     | Anchor Tenants(1) |         | Non-Anchor Tenants(1)
|                                 |                               |     |                   |         |                      
|                                 |                               |     | % of              |         | % of Property         |     | % of     |         | % of Property
|                                 |                               |     | Occupied          |         | Ann. Base             |     | Occupied |         | Ann. Base    
|Property                         |                               | GLA |                   | Rent(2) |                       | GLA |          | Rent(2)
|                                 |                               |     |                   |         |                       |     |          |        
|                                 | Shute Park Plaza              |     |                   | 0.00    |                       |     |          | 0.00    |               |  |       | 100.00 |  |  |       | 100.00 | 
|                                 | Southgate Shopping Center     |     |                   | 58.98   |                       |     |          | 44.59   |               |  |       | 41.02  |  |  |       | 55.41  | 
|                                 | St. Johns Plaza              |     |                   | 58.81   |                       |     |          | 42.65   |               |  |       | 41.19  |  |  |       | 57.35  | 
|                                 | Sunset Mall                   |     |                   | 43.19   |                       |     |          | 18.36   |               |  |       | 56.81  |  |  |       | 81.64  | 
|                                 | Tacoma Shopping Center        |     |                   | 0.00    |                       |     |          | 0.00    |               |  |       | 100.00 |  |  |       | 100.00 | 
|                                 | Tanasbourne Village           |     |                   | 47.62   |                       |     |          | 26.98   |               |  |       | 52.38  |  |  |       | 73.02  | 
|Region Total/Weighted Average    |                               |     | 57.19             |         |                       |     | 42.93    |         |               |  | 42.81 |        |  |  | 57.07 |       
|NEVADA                           |                               |     |                   |         |                       |     |          |         |               |  |       |        |  |  |       |       
|                                 | Caughlin Ranch                |     |                   | 50.18   |                       |     |          | 40.32   |               |  |       | 49.82  |  |  |       | 59.68  | 
|                                 | Cheyenne Commons              |     |                   | 65.16   |                       |     |          | 43.65   |               |  |       | 34.84  |  |  |       | 56.35  | 
|                                 | Dodge Center                  |     |                   | 71.81   |                       |     |          | 44.83   |               |  |       | 28.19  |  |  |       | 55.17  | 
|                                 | Eagle Station                 |     |                   | 53.21   |                       |     |          | 29.71   |               |  |       | 46.79  |  |  |       | 70.29  | 
|                                 | Elko Junction Shopping Center |     |                   | 64.86   |                       |     |          | 51.85   |               |  |       | 35.14  |  |  |       | 48.15  | 
|                                 | Green Valley Town & Country   |     |                   | 38.91   |                       |     |          | 18.78   |               |  |       | 61.09  |  |  |       | 81.22  | 
|                                 | Mira Loma Center # 636        |     |                   | 52.65   |                       |     |          | 46.58   |               |  |       | 47.35  |  |  |       | 53.42  | 
|                                 | Rainbow Promenade             |     |                   | 65.47   |                       |     |          | 55.66   |               |  |       | 34.53  |  |  |       | 44.34  | 
|                                 | Raleys                       |     |                   | 100.00  |                       |     |          | 100.00  |               |  |       | 0.00   |  |  |       | 0.00   | 
|                                 | Sahara Pavilion North         |     |                   | 49.02   |                       |     |          | 28.70   |               |  |       | 50.98  |  |  |       | 71.30  | 
|                                 | Sahara Pavilion South         |     |                   | 55.58   |                       |     |          | 34.76   |               |  |       | 44.42  |  |  |       | 65.24  | 
|                                 | West Town                     |     |                   | 96.33   |                       |     |          | 93.93   |               |  |       | 3.67   |  |  |       | 6.07   | 
|                                 | Winterwood Pavilion           |     |                   | 48.11   |                       |     |          | 25.53   |               |  |       | 51.89  |  |  |       | 74.47  | 
|Region Total/Weighted Average    |                               |     | 58.97             |         |                       |     | 40.30    |         |               |  | 41.03 |        |  |  | 59.70 |       
|OTHER                            |                               |     |                   |         |                       |     |          |         |               |  |       |        |  |  |       |       
|                                 | Country Club Center           |     |                   | 0.00    |                       |     |          | 0.00    |               |  |       | 100.00 |  |  |       | 100.00 | 
|                                 | Maysville Marketsquare        |     |                   | 62.72   |                       |     |          | 54.36   |               |  |       | 37.28  |  |  |       | 45.64  | 
|                                 | Memphis Retail Center         |     |                   | 0.00    |                       |     |          | 0.00    |               |  |       | 100.00 |  |  |       | 100.00 | 
|Region Total/Weighted Average    |                               |     | 36.73             |         |                       |     | 26.81    |         |               |  | 63.27 |        |  |  | 73.19 |       
|Portfolio Total/Weighted Average |                               |     | 57.67             |         |                       |     | 40.56    |         |               |  | 42.33 |        |  |  | 59.44 |       



|(1) |  | Anchors defined as single tenants which lease 15,000 square feet or more, non-anchors defined as tenants which lease less than 15,000 square feet.                                                                                                
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Annualized base rent for all leases in place is calculated as follows: total base rent, calculated in accordance with GAAP, to be received during the entire
term of each lease, divided by the terms in months for such leases, multiplied by 12.

21



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##### Table of Contents



Major Tenants* as of December 31, 2001

|                         |  |           |     |             |  |               |           |                 |  |              |       |                 |  |                                             |            |           |  |   |       |  |  |  |       |  
|------------------------ |  | --------- | --- | ----------- |  | ------------- | --------- | --------------- |  | ------------ | ----- | --------------- |  | ------------------------------------------- | ---------- | --------- |  | - | ----- |  |  |  | ----- | -
|                         |  |           |     |             |  |               |           |                 |  |              |       |                 |  | Annualized Base Rent in Place at 12/31/2001
|                         |  |           |     |             |  |               |           |                 |  |              |       |                 |  |                                            
|                         |  |           |     |             |  | Leased GLA as |           |                 |  |              |       |                 |  |                                             |            | Ann. Base |  |   |       | 
|                         |  | Number of |     | of 12/31/01 |  | % of Total    |           | Total Ann. Base |  | Rent/Sq. Ft. |       | % of Total Ann.
|Tenants                  |  | Leases    |     | (Sq. Ft.)   |  | Leased GLA    |           | Rent($)(1)      |  | ($)(2)       |       | Base Rent      
|                         |  |           |     |             |  |               |           |                 |  |              |       |                
|RALEYS                  |  |           | 20  |             |  |               | 1,136,895 |                 |  |              | 8.57  | %               |  |                                             | 7,698,550  |           |  |   | 6.77  |  |  |  | 5.24  | %
|VONS/SAFEWAY/PAK N SAVE |  |           | 14  |             |  |               | 685,287   |                 |  |              | 5.16  |                 |  |                                             | 6,137,640  |           |  |   | 8.96  |  |  |  | 4.18  |  
|ALBERTSONS/SAVON         |  |           | 15  |             |  |               | 613,289   |                 |  |              | 4.62  |                 |  |                                             | 3,655,482  |           |  |   | 5.96  |  |  |  | 2.49  |  
|RITE AID                 |  |           | 21  |             |  |               | 502,663   |                 |  |              | 3.79  |                 |  |                                             | 3,400,239  |           |  |   | 6.76  |  |  |  | 2.31  |  
|WAL-MART                 |  |           | 3   |             |  |               | 316,588   |                 |  |              | 2.39  |                 |  |                                             | 2,836,963  |           |  |   | 8.96  |  |  |  | 1.93  |  
|BLOCKBUSTER VIDEO        |  |           | 22  |             |  |               | 121,241   |                 |  |              | 0.91  |                 |  |                                             | 2,138,020  |           |  |   | 17.63 |  |  |  | 1.46  |  
|ROSS DRESS FOR LESS      |  |           | 9   |             |  |               | 237,990   |                 |  |              | 1.79  |                 |  |                                             | 2,080,474  |           |  |   | 8.74  |  |  |  | 1.42  |  
|HOLLYWOOD VIDEO          |  |           | 15  |             |  |               | 94,684    |                 |  |              | 0.71  |                 |  |                                             | 1,772,839  |           |  |   | 18.72 |  |  |  | 1.21  |  
|FOOD 4 LESS              |  |           | 4   |             |  |               | 214,139   |                 |  |              | 1.61  |                 |  |                                             | 1,658,149  |           |  |   | 7.74  |  |  |  | 1.13  |  
|SAVE MART                |  |           | 7   |             |  |               | 250,914   |                 |  |              | 1.89  |                 |  |                                             | 1,643,682  |           |  |   | 6.55  |  |  |  | 1.12  |  
|DOLLAR TREE              |  |           | 23  |             |  |               | 246,908   |                 |  |              | 1.86  |                 |  |                                             | 1,562,211  |           |  |   | 6.33  |  |  |  | 1.06  |  
|OFFICE MAX, INC          |  |           | 5   |             |  |               | 134,550   |                 |  |              | 1.01  |                 |  |                                             | 1,533,910  |           |  |   | 11.40 |  |  |  | 1.04  |  
|24 HOUR FITNESS          |  |           | 5   |             |  |               | 108,305   |                 |  |              | 0.82  |                 |  |                                             | 1,499,196  |           |  |   | 13.84 |  |  |  | 1.02  |  
|                         |  |           |     |             |  |               |           |                 |  |              |       |                 |  |                                             |            |           |  |   |       |  |  |  |       |  
|Total:                   |  |           | 163 |             |  |               | 4,663,453 |                 |  |              | 35.13 | %               |  | $                                           | 37,617,355 |           |  | $ | 8.07  |  |  |  | 25.61 | %
|                         |  |           |     |             |  |               |           |                 |  |              |       |                 |  |                                             |            |           |  |   |       |  |  |  |       |  



|*   |  | Tenants which individually account for 1% or more of annualized base rent.                                                                                                                                                                                   
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(1) |  | Annualized base rent for all leases in place at 12/31/2001 calculated as follows: total base rent, calculated in accordance with GAAP, to be received during the
entire term of each lease, divided by the terms in months for such leases, multiplied by 12.
|   
|   
|   
|   
|(2) |  | Annualized base rent divided by gross leasable area.                                                                                                                                                                                                         

22



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##### Table of Contents



Lease Expiration Analysis*

|                         |    |  |            |      |           |  |            |     |        |  |              |           |            |  |               |       |   |  |                                             |            |  |  |       |       |   |  |       |       | 
|------------------------ | -- |  | ---------- | ---- | --------- |  | ---------- | --- | ------ |  | ------------ | --------- | ---------- |  | ------------- | ----- | - |  | ------------------------------------------- | ---------- |  |  | ----- | ----- | - |  | ----- | ----- | 
|As of 12/31/2001        
|                        
|                         |    |  |            |      |           |  |            |     |        |  |              |           |            |  |               |       |   |  | Annualized Base Rent in Place at 12/31/2001
|                         |    |  |            |      |           |  |            |     |        |  | GLA Under    |           | % of       |  |              
|                         |    |  | Lease      |      | Number of |  | Expiring   |     | Total  |  | Total Ann.   |           | % of       |  | Ann. Base    
|                         |    |  | Expiration |      | Leases    |  | Leases     |     | Leased |  | Base Rent($) |           | Total Ann. |  | Rent         
|                         |    |  | Year       |      | Expiring  |  | (Sq.Ft.)   |     | GLA    |  | (2)          |           | Base Rent  |  | ($/Sq.Ft.)(3)
|                         |    |  |            |      |           |  |            |     |        |  |              |           |            |  |              
|All Anchor Leases(1)     |    |  |            |      |           |  |            |     |        |  |              |           |            |  |               |       |   |  |                                             |            |  |  |       |      
|                         | 1  |  |            | 2002 |           |  |            | 6   |        |  |              | 173,332   |            |  |               | 1.34  | % |  |                                             | 1,404,963  |  |  |       | 0.97  | % |  |       | 8.11  | 
|                         | 2  |  |            | 2003 |           |  |            | 13  |        |  |              | 315,828   |            |  |               | 2.44  | % |  |                                             | 2,112,019  |  |  |       | 1.46  | % |  |       | 6.69  | 
|                         | 3  |  |            | 2004 |           |  |            | 8   |        |  |              | 348,532   |            |  |               | 2.69  | % |  |                                             | 1,525,346  |  |  |       | 1.06  | % |  |       | 4.38  | 
|                         | 4  |  |            | 2005 |           |  |            | 23  |        |  |              | 519,086   |            |  |               | 4.00  | % |  |                                             | 4,151,354  |  |  |       | 2.88  | % |  |       | 8.00  | 
|                         | 5  |  |            | 2006 |           |  |            | 21  |        |  |              | 833,019   |            |  |               | 6.42  | % |  |                                             | 6,559,617  |  |  |       | 4.55  | % |  |       | 7.87  | 
|                         | 6  |  |            | 2007 |           |  |            | 12  |        |  |              | 352,651   |            |  |               | 2.72  | % |  |                                             | 1,979,033  |  |  |       | 1.37  | % |  |       | 5.61  | 
|                         | 7  |  |            | 2008 |           |  |            | 14  |        |  |              | 531,496   |            |  |               | 4.10  | % |  |                                             | 3,346,911  |  |  |       | 2.32  | % |  |       | 6.30  | 
|                         | 8  |  |            | 2009 |           |  |            | 11  |        |  |              | 389,182   |            |  |               | 3.00  | % |  |                                             | 3,352,132  |  |  |       | 2.32  | % |  |       | 8.61  | 
|                         | 9  |  |            | 2010 |           |  |            | 12  |        |  |              | 388,546   |            |  |               | 3.00  | % |  |                                             | 3,444,039  |  |  |       | 2.39  | % |  |       | 8.86  | 
|                         | 10 |  |            | 2011 |           |  |            | 17  |        |  |              | 517,164   |            |  |               | 3.99  | % |  |                                             | 4,419,051  |  |  |       | 3.06  | % |  |       | 8.54  | 
|                         | 11 |  |            | 2012 | +         |  |            | 83  |        |  |              | 3,217,414 |            |  |               | 24.81 | % |  |                                             | 27,467,027 |  |  |       | 19.04 | % |  |       | 8.54  | 
|                         |    |  |            |      |           |  |            |     |        |  |              |           |            |  |               |       |   |  |                                             |            |  |  |       |       |   |  |       |      
|TOTAL/WEIGHTED AVERAGE   |    |  | 220        |      |           |  | 7,586,250  |     |        |  | 58.49        | %         |            |  | 59,761,490    |       |   |  | 41.43                                       | %          |  |  | 7.88  |      
|                         |    |  |            |      |           |  |            |     |        |  |              |           |            |  |               |       |   |  |                                             |            |  |  |       |       |   |  |       |      
|All Non-Anchor Leases(1) |    |  |            |      |           |  |            |     |        |  |              |           |            |  |               |       |   |  |                                             |            |  |  |       |      
|                         | 1  |  |            | 2002 |           |  |            | 354 |        |  |              | 748,340   |            |  |               | 5.77  | % |  |                                             | 11,060,423 |  |  |       | 7.67  | % |  |       | 14.78 | 
|                         | 2  |  |            | 2003 |           |  |            | 379 |        |  |              | 917,961   |            |  |               | 7.08  | % |  |                                             | 12,904,767 |  |  |       | 8.95  | % |  |       | 14.06 | 
|                         | 3  |  |            | 2004 |           |  |            | 366 |        |  |              | 895,856   |            |  |               | 6.91  | % |  |                                             | 13,114,767 |  |  |       | 9.09  | % |  |       | 14.64 | 
|                         | 4  |  |            | 2005 |           |  |            | 307 |        |  |              | 833,857   |            |  |               | 6.43  | % |  |                                             | 13,253,787 |  |  |       | 9.19  | % |  |       | 15.89 | 
|                         | 5  |  |            | 2006 |           |  |            | 276 |        |  |              | 701,100   |            |  |               | 5.41  | % |  |                                             | 11,337,132 |  |  |       | 7.86  | % |  |       | 16.17 | 
|                         | 6  |  |            | 2007 |           |  |            | 90  |        |  |              | 279,234   |            |  |               | 2.15  | % |  |                                             | 4,333,460  |  |  |       | 3.00  | % |  |       | 15.52 | 
|                         | 7  |  |            | 2008 |           |  |            | 47  |        |  |              | 205,392   |            |  |               | 1.58  | % |  |                                             | 3,340,286  |  |  |       | 2.32  | % |  |       | 16.26 | 
|                         | 8  |  |            | 2009 |           |  |            | 52  |        |  |              | 230,709   |            |  |               | 1.78  | % |  |                                             | 3,968,487  |  |  |       | 2.75  | % |  |       | 17.20 | 
|                         | 9  |  |            | 2010 |           |  |            | 56  |        |  |              | 196,905   |            |  |               | 1.52  | % |  |                                             | 3,823,252  |  |  |       | 2.65  | % |  |       | 19.42 | 
|                         | 10 |  |            | 2011 |           |  |            | 33  |        |  |              | 109,759   |            |  |               | 0.85  | % |  |                                             | 2,552,209  |  |  |       | 1.77  | % |  |       | 23.25 | 
|                         | 11 |  |            | 2012 | +         |  |            | 68  |        |  |              | 264,527   |            |  |               | 2.04  | % |  |                                             | 4,794,319  |  |  |       | 3.32  | % |  |       | 18.12 | 
|                         |    |  |            |      |           |  |            |     |        |  |              |           |            |  |               |       |   |  |                                             |            |  |  |       |       |   |  |       |      
|TOTAL/WEIGHTED AVERAGE   |    |  | 2,028      |      |           |  | 5,383,640  |     |        |  | 41.51        | %         |            |  | 84,482,890    |       |   |  | 58.57                                       | %          |  |  | 15.69 |      
|                         |    |  |            |      |           |  |            |     |        |  |              |           |            |  |               |       |   |  |                                             |            |  |  |       |       |   |  |       |      
|All Leases               |    |  |            |      |           |  |            |     |        |  |              |           |            |  |               |       |   |  |                                             |            |  |  |       |       |   |  |       |      
|1                        |    |  | 2002       |      |           |  | 360        |     |        |  | 921,672      |           |            |  | 7.11          | %     |   |  | 12,465,386                                  |            |  |  | 8.64  | %     |   |  | 13.52 |      
|2                        |    |  | 2003       |      |           |  | 392        |     |        |  | 1,233,789    |           |            |  | 9.51          | %     |   |  | 15,016,786                                  |            |  |  | 10.41 | %     |   |  | 12.17 |      
|3                        |    |  | 2004       |      |           |  | 374        |     |        |  | 1,244,388    |           |            |  | 9.59          | %     |   |  | 14,640,113                                  |            |  |  | 10.15 | %     |   |  | 11.76 |      
|4                        |    |  | 2005       |      |           |  | 330        |     |        |  | 1,352,943    |           |            |  | 10.43         | %     |   |  | 17,405,140                                  |            |  |  | 12.07 | %     |   |  | 12.86 |      
|5                        |    |  | 2006       |      |           |  | 297        |     |        |  | 1,534,119    |           |            |  | 11.83         | %     |   |  | 17,896,749                                  |            |  |  | 12.41 | %     |   |  | 11.67 |      
|6                        |    |  | 2007       |      |           |  | 102        |     |        |  | 631,885      |           |            |  | 4.87          | %     |   |  | 6,312,493                                   |            |  |  | 4.38  | %     |   |  | 9.99  |      
|7                        |    |  | 2008       |      |           |  | 61         |     |        |  | 736,888      |           |            |  | 5.68          | %     |   |  | 6,687,197                                   |            |  |  | 4.64  | %     |   |  | 9.07  |      
|8                        |    |  | 2009       |      |           |  | 63         |     |        |  | 619,891      |           |            |  | 4.78          | %     |   |  | 7,320,619                                   |            |  |  | 5.08  | %     |   |  | 11.81 |      
|9                        |    |  | 2010       |      |           |  | 68         |     |        |  | 585,451      |           |            |  | 4.51          | %     |   |  | 7,267,291                                   |            |  |  | 5.04  | %     |   |  | 12.41 |      
|10                       |    |  | 2011       |      |           |  | 50         |     |        |  | 626,923      |           |            |  | 4.83          | %     |   |  | 6,971,259                                   |            |  |  | 4.83  | %     |   |  | 11.12 |      
|11                       |    |  | 2012       | +    |           |  | 151        |     |        |  | 3,481,941    |           |            |  | 26.85         | %     |   |  | 32,261,346                                  |            |  |  | 22.37 | %     |   |  | 9.27  |      
|                         |    |  |            |      |           |  |            |     |        |  |              |           |            |  |               |       |   |  |                                             |            |  |  |       |       |   |  |       |      
|TOTAL/WEIGHTED AVERAGE   |    |  | 2,248      |      |           |  | 12,969,890 |     |        |  | 100.00       | %         |            |  | 144,244,380   |       |   |  | 100.00                                      | %          |  |  | 11.12 |      
|                         |    |  |            |      |           |  |            |     |        |  |              |           |            |  |               |       |   |  |                                             |            |  |  |       |       |   |  |       |      

Note: Number of Leases expiring does not include tenants on a month-to-month agreement, whose combined occupancy totals 226,983 sq. ft.



|*   |  | Assumes no renewal options are exercised.                                                                                                                                                                                                                    
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(1) |  | The company defines anchors as single tenants which lease 15,000 square feet or more, non-anchors defined as tenants
which lease less than 15,000 square feet.                                                                                               
|   
|   
|   
|   
|(2) |  | Annualized base rent for all
leases in place at report date calculated as follows: total base rent, calculated in accordance with
GAAP, to be received during the entire term of each lease, divided by the term in months for such leases, multiplied by 12.
|   
|   
|   
|   
|(3) |  | Annualized base rent divided by gross leaseable area as of report date.                                                                                                                                                                                      

23



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##### Table of Contents






ITEM 3. LEGAL PROCEEDINGS

On November 8, 2000, Bryant M. Bennett, as Trustee of the Bryant M.
Bennett and Inga A. Bennett Trust U/A October 25, 1990, known as The Bennett
Family Trust, filed a class action complaint in the Superior Court of the State
of California, County of Alameda, on behalf of himself and all others similarly
situated, against us; Western, WPT; Bradley N. Blake; L. Gerald Hunt; Dennis D.
Ryan; James L. Stell; Reginald B. Oliver; L. Michael Foley; Joseph P. Colmery;
Revenue Properties (U.S.), Inc.; and Stuart A. Tanz.

The allegations of the complaint arise from our November 2000 acquisition
of Western. Plaintiffs complaint alleges that the merger terms between us and
Western were unfair and violated the defendants fiduciary obligations to
Westerns shareholders. On February 22, 2002, the Court granted Plaintiffs
motion to certify a plaintiff class. Trial in this matter is currently set for
October 7, 2002.

We believe we have meritorious defenses against each of Plaintiffs claims
and we intend to vigorously and effectively defend against them. It should be
noted, however, that the outcome of any litigation is by its nature
unpredictable and we therefore cannot assure you that we will successfully
defend this action.

In addition, we are a party to legal proceedings that arise in the normal
course of business, which matters are generally covered by insurance. The
resolution of these matters cannot be predicted with certainty. However, in
the opinion of management, based upon currently available information, any
liability resulting from such proceedings, either individually or in the
aggregate, will not have a material adverse effect on our consolidated
financial statements taken as a whole.




ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of 2001, no matters were submitted to a vote of
stockholders of the Company.




PART II






|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|------- | ---------------------------------------------------------------------

Our common stock began trading on the New York Stock Exchange on August 8,
1997, under the symbol PNP. On March 18, 2002 we had approximately
1,138 stockholders of record and approximately 15,536 beneficial owners. The following
table sets forth, for the periods indicated, the high and low sales prices as
reported by the New York Stock Exchange and the distributions declared by us.

|                                       |  |      |        |     |  |          |        |  |  |               |       | 
|-------------------------------------- |  | ---- | ------ | --- |  | -------- | ------ |  |  | ------------- | ----- | 
|                                       |  |      |        |     |  |          |        |  |  | Distributions
|                                       |  | High |        | Low |  | Declared
|                                       |  |      |        |     |  |         
|First Quarter 2000                     |  | $    | 19.125 |     |  | $        | 16.625 |  |  | $             | 0.420 | 
|Second Quarter 2000                    |  | $    | 20.125 |     |  | $        | 18.750 |  |  | $             | 0.420 | 
|Third Quarter 2000                     |  | $    | 20.938 |     |  | $        | 19.000 |  |  | $             | 0.420 | 
|Fourth Quarter 2000 (special dividend) |  | $    | 22.750 |     |  | $        | 19.813 |  |  | $             | 0.280 | 
|First Quarter 2001                     |  | $    | 23.250 |     |  | $        | 21.550 |  |  | $             | 0.455 | 
|Second Quarter 2001                    |  | $    | 26.000 |     |  | $        | 21.950 |  |  | $             | 0.455 | 
|Third Quarter 2001                     |  | $    | 27.080 |     |  | $        | 25.100 |  |  | $             | 0.455 | 
|Fourth Quarter 2001                    |  | $    | 28.800 |     |  | $        | 26.400 |  |  | $             | 0.455 | 

In the fourth quarter 2000, we declared and paid a special, two-month
dividend of $0.28 per share to stockholders of record before the merger with
Western was completed. The special dividend addressed the two-month shift in
timing for the payment of our normal quarterly dividend in future periods. The
fourth quarter 2001 distribution on an annualized basis amounts to $1.82 per
share. All distributions will be made by us at the discretion of our board of
directors and will depend upon our earnings, our financial condition and any
other factors our board of directors deems relevant. In order to qualify for
the beneficial tax treatment accorded to REITs under the Internal Revenue Code,
we are required to make distributions to holders of our shares in an amount at
least equal to 90% of our real estate investment trust taxable income, as
defined in Section 857 of the Internal Revenue Code.

24



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##### Table of Contents






ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth our selected financial data on a historical
basis. The following data should be read in connection with managements
discussion and analysis of financial condition and results of operations and
the consolidated financial statements and notes thereto located elsewhere in
this report.

SELECTED CONSOLIDATED FINANCIAL DATA (1)
(Amounts in thousands, except per share data)

|                                                  |                                              |   |                          |      |      |   |         |      |      |   |         |      |  |   |        |      |  |   |        |      | 
|------------------------------------------------- | -------------------------------------------- | - | ------------------------ | ---- | ---- | - | ------- | ---- | ---- | - | ------- | ---- |  | - | ------ | ---- |  | - | ------ | ---- | 
|                                                  |                                              |   | Years Ended December 31,
|                                                  |                                              |   |                         
|                                                  |                                              |   | 2001                     |      | 2000 |   | 1999    |      | 1998 |   | 1997   
|                                                  |                                              |   |                          |      |      |   |         |      |      |   |        
|STATEMENTS OF INCOME DATA:                        |                                              |   |                          |      |      |   |         |      |      |   |         |      |  |   |        |      |  |   |        |     
|Total revenue                                     |                                              | $ | 188,994                  |      |      | $ | 120,493 |      |      | $ | 101,062 |      |  | $ | 79,253 |      |  | $ | 46,710 |     
|Operating and general and
administrative expenses |                                              |   | 46,777                   |      |      |   | 28,884  |      |      |   | 25,513  |      |  |   | 19,765 |      |  |   | 14,216 |     
|Merger related expenses                           |                                              |   |                         |      |      |   | 3,204   |      |      |   |        |      |  |   |       |      |  |   |       |     
|Depreciation and amortization                     |                                              |   | 29,278                   |      |      |   | 20,374  |      |      |   | 17,476  |      |  |   | 14,298 |      |  |   | 8,928  |     
|Interest expense                                  |                                              |   | 46,196                   |      |      |   | 32,112  |      |      |   | 23,939  |      |  |   | 18,295 |      |  |   | 14,057 |     
|Income before extraordinary item                  |                                              |   | 64,222                   |      |      |   | 33,800  |      |      |   | 32,576  |      |  |   | 26,634 |      |  |   | 9,356  |     
|Net income                                        |                                              |   | 64,222                   |      |      |   | 33,800  |      |      |   | 32,576  |      |  |   | 26,634 |      |  |   | 8,313  |     
|Per share data:                                   |                                              |   |                          |      |      |   |         |      |      |   |         |      |  |   |        |      |  |   |        |     
|                                                  | Income before extraordinary
itemdiluted (2) |   |                          | 1.97 |      |   |         | 1.48 |      |   |         | 1.54 |  |   |        | 1.35 |  |   |        | 0.55 | 
|                                                  | Net incomediluted (2)                       |   |                          | 1.97 |      |   |         | 1.48 |      |   |         | 1.54 |  |   |        | 1.35 |  |   |        | 0.49 | 
|                                                  | Distributions declared                       |   |                          | 1.82 |      |   |         | 1.54 |      |   |         | 1.60 |  |   |        | 1.52 |  |   |        | 0.58 | 

|                                     |  |                    |           |      |  |      |           |      |  |      |         |  |  |   |         |  |  |   |         | 
|------------------------------------ |  | ------------------ | --------- | ---- |  | ---- | --------- | ---- |  | ---- | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                     |  | As of December 31,
|                                     |  |                   
|                                     |  | 2001               |           | 2000 |  | 1999 |           | 1998 |  | 1997
|                                     |  |                    |           |      |  |      |           |      |  |     
|BALANCE SHEET DATA:                  |  |                    |           |      |  |      |           |      |  |      |         |  |  |   |         |  |  |   |         | 
|Properties, net                      |  | $                  | 1,233,189 |      |  | $    | 1,194,824 |      |  | $    | 748,061 |  |  | $ | 667,478 |  |  | $ | 455,514 | 
|Total assets                         |  |                    | 1,339,618 |      |  |      | 1,297,690 |      |  |      | 784,537 |  |  |   | 705,541 |  |  |   | 487,220 | 
|Notes payable                        |  |                    | 229,135   |      |  |      | 233,911   |      |  |      | 228,490 |  |  |   | 144,024 |  |  |   | 108,316 | 
|Line of credit and term loan payable |  |                    | 165,300   |      |  |      | 267,650   |      |  |      | 128,800 |  |  |   | 138,500 |  |  |   | 62,450  | 
|Senior notes                         |  |                    | 273,800   |      |  |      | 124,850   |      |  |      |        |  |  |   |        |  |  |   |        | 
|Minority interests                   |  |                    | 20,748    |      |  |      | 41,754    |      |  |      | 23,347  |  |  |   | 17,318  |  |  |   | 1,521   | 
|Stockholders equity                 |  |                    | 622,458   |      |  |      | 606,998   |      |  |      | 381,866 |  |  |   | 383,088 |  |  |   | 301,055 | 



---

|(1) |  | The financial data as of the dates and for the periods prior to August
13, 1997 represents the combined financial data of predecessor entities
prior to our initial public offering.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | The 1997 data is calculated as if the shares were outstanding for the
entire year based on the diluted number of shares assumed to be
outstanding.                                  

25



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##### Table of Contents








|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Cautionary Language

The discussions in Managements Discussion and Analysis of Financial
Condition and Results of Operations contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 which
reflect managements current views with respect to future events and financial
performance. Forward-looking statements are subject to risks and
uncertainties. Factors that could cause actual results to differ materially
from expectations include market valuations of our stock, financial performance
and operations of our shopping centers, real estate conditions, execution of
shopping center development programs, successful completion of renovations,
completion of pending acquisitions, changes in the availability of additional
acquisitions, changes in local or national economic conditions, acts of
terrorism or war and other risks detailed from time to time in reports filed
with the Securities and Exchange Commission.

Critical Accounting Policies

The following discussion and analysis of financial condition and results
of operations are based upon our consolidated financial statements, and the
notes thereto, which have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these consolidated financial statements requires us to make a number of
estimates and assumptions that affect the reported amounts and disclosures in
the consolidated financial statements. On an ongoing basis, we evaluate our
estimates and assumptions based upon historical experience and various other
factors and circumstances. We believe that our estimates and assumptions are
reasonable for our current circumstances; however, actual results may differ
from these estimates and assumptions under different future conditions.

We believe that the estimates and assumptions that are most important to
the portrayal of our financial condition and results of operations, in that
they require our most subjective judgments, form the basis for the accounting
policies deemed to be most critical. These critical accounting policies
include our estimates of useful lives in calculating depreciation expense on
our shopping center properties and the ultimate recoverability, or impairment,
of each shopping center asset. If actual useful lives are different from our
estimates this could result in changes to the results of our operations.
Future adverse changes in market conditions or poor operating results of our
shopping center properties could result in losses or an inability to recover
the carrying value of the properties that may not be reflected in the
properties current carrying value, thereby possibly requiring an impairment
charge in the future.

Overview

We receive income primarily from rental revenue from shopping center
properties, including recoveries from tenants, offset by operating and overhead
expenses. Primarily as a result of our acquisition program, including the
acquisition of Western Properties Trust described below, which included
interests in 50 shopping centers, the financial data shows increases in total
revenue and total expenses from period to period.

During the year ended December 31, 2001, eight non-strategic assets were
sold. The cash proceeds were used toward the purchase of four shopping center
assets.

On November 13, 2000, we acquired Western Properties Trust, a California
real estate investment trust. The transaction was a stock for stock exchange
whereby Western common shares and units were exchanged into newly issued common
shares and operating subsidiary units, based upon a fixed exchange ratio of
0.62 of a share of our common stock per Western share or operating subsidiary
unit. As a result, we issued 10,754,776 shares of our common stock to holders
of Western common shares. We are also currently obligated to issue 288,867
shares of our common stock upon the exchange of operating subsidiary units held
by limited partners of Pan Pacific (Kienows), L.P., formerly Western/Kienow,
L.P., and Pan Pacific (Pinecreek), L.P., formerly Western/Pinecreek, L.P., or
pay a cash amount, at our discretion. In connection with this transaction, we
assumed $135,000,000 of Westerns debt obligations.

We expect that the more significant part of our growth in the next year or
two will come from additional acquisitions, rent increases from re-leasing and
re-tenanting initiatives of the assets acquired in the Western acquisition and
the stabilization of other properties acquired during 2001 and 2000.

26



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##### Table of Contents



Results of Operations

Comparison of the Year Ended December 31, 2001 to the Year Ended December 31,
2000.

Total revenue increased by $68,501,000, or 56.9%, to $188,994,000 for the
year ended December 31, 2001, from $120,493,000 for the year ended December 31,
2000.

Rental revenue, which includes base rent and percentage rent, increased by
$48,252,000, or 50.9%, to $142,995,000 for the year ended December 31, 2001,
from $94,743,000 for the year ended December 31, 2000. The increase in rental
revenue resulted principally from four property acquisitions in 2001, three
property acquisitions in 2000 and the acquisition of Western in November 2000.

Recoveries from tenants increased by $10,968,000, or 50.7%, to $32,616,000
for the year ended December 31, 2001, from $21,648,000 for the year ended
December 31, 2000. This increase resulted primarily from the 2001 and 2000
acquisitions including Western. Recoveries from tenants were 90.5% of property
operating expenses and property taxes for the year ended December 31, 2001
compared to 93.2% for the year ended December 31, 2000. The decrease in the
recovery percentage from prior year was primarily the result of a decrease in
average portfolio occupancy during 2001 as a result of the Western acquisition.
In addition, the language in the Western leases does not provide for as many
costs to be recoverable from tenants as the language in the Pan Pacific leases.

Net gain on sale of real estate totaling $4,129,000 resulted from the sale
of eight non-strategic assets during the year ended December 31, 2001.

Other income increased by $4,679,000, or 125.2%, to $8,417,000 for the
year ended December 31, 2001, from $3,738,000 for the year ended December 31,
2000. The increase resulted principally from approximately $3,674,000 of
interest income on corporate notes receivable related to real estate activities
that were acquired as part of the Western acquisition.

Property operating expenses increased by $7,883,000, or 55.2%, to
$22,168,000 for the year ended December 31, 2001, from $14,285,000 for the year
ended December 31, 2000. The increase in property operating expenses was
primarily attributable to the 2001 and 2000 acquisitions, including Western.
Property taxes increased by $4,929,000, or 55.1%, to $13,867,000 from
$8,938,000 for the year ended December 31, 2001, compared to the year ended
December 31, 2000. The increase in property taxes was also primarily the
result of the 2001 and 2000 acquisitions including Western.

Depreciation and amortization increased by $8,904,000, or 43.7%, to
$29,278,000 for the year ended December 31, 2001, from $20,374,000 for the year
ended December 31, 2000. This was primarily due to the 2001 and 2000
acquisitions, including Western.

Interest expense increased by $14,084,000, or 43.9%, to $46,196,000 for
the year ended December 31, 2001, from $32,112,000 for the year ended December
31, 2000, primarily as a result of the debt obligations assumed upon the
acquisition of Western and interest expense relating to funds drawn on our
Revolving Credit Agreement to finance the seven other properties acquired
during 2001 and 2000. Interest expense also increased as a result of our
issuance of $150,000,000, in aggregate principal amount, of senior notes in
April 2001. The stated interest rate of 7.95% on the senior notes is higher
than our cost to borrow funds under the Revolving Credit Agreement and Term
Credit Agreement which were paid down with the net proceeds of the notes
offering. These increases were partially offset by a reduction in the LIBOR
component of our borrowing cost under the Revolving Credit Agreement and Term
Credit Agreement over the comparable period in the prior year.

General and administrative expenses increased by $4,063,000, or 79.6%, to
$9,168,000 for the year ended December 31, 2001, from $5,105,000 for the year
ended December 31, 2000. This increase resulted primarily from an increase in
salaries and benefits and other related expenses resulting from the acquisition
of Western as well as annual compensation increases in the first quarter of
2001. As a percentage of total revenue, general and administrative expenses
were 4.9% for the year ended December 31, 2001 and 4.2% for the year ended
December 31, 2000.

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Comparison of the Year Ended December 31, 2000 to the Year Ended December
31, 1999.

Total revenue increased by $19,431,000, or 19.2%, to $120,493,000 for the
year ended December 31, 2000, from $101,062,000 for the year ended December 31,
1999.

Rental revenue increased by $14,606,000, or 18.2%, to $94,743,000 for the
year ended December 31, 2000, from $80,137,000 for the year ended December 31,
1999. The increase in rental revenue resulted principally from six property
acquisitions in 1999, three property acquisitions in 2000 and the acquisition
of Western in November 2000.

Recoveries from tenants increased by $3,755,000, or 21.0%, to $21,648,000
for the year ended December 31, 2000, from $17,893,000 for the year ended
December 31, 1999. This increase resulted primarily from the 2000 and 1999
property acquisitions. Recoveries from tenants were 93.2% of property
operating expenses and property taxes for the year ended December 31, 2000
compared to 89.7% of the same expenses for the same period in 1999. The
increase in the recovery percentage was primarily the result of enhanced lease
recovery language during the renewal and re-leasing process.

Property operating expenses increased by $1,734,000, or 13.8%, to
$14,285,000 for the year ended December 31, 2000, from $12,551,000 for the year
ended December 31, 1999. The increase in property operating expenses was
primarily attributable to the 2000 and 1999 property acquisitions. Property
taxes increased by $1,539,000, or 20.8%, to $8,938,000 from $7,399,000 for the
year ended December 31, 2000, compared to the year ended December 31, 1999.
The increase in property taxes was also primarily the result of the 2000 and
1999 property acquisitions.

Depreciation and amortization increased by $2,898,000, or 16.6%, to
$20,374,000 for the year ended December 31, 2000, from $17,476,000 for the year
ended December 31, 1999. This was primarily due to the 2000 and 1999 property
acquisitions.

Interest expense increased by $8,173,000, or 34.1%, to $32,112,000 for the
year ended December 31, 2000, from $23,939,000 for the year ended December 31,
1999, primarily as a result of interest expense relating to amounts drawn on
our Revolving Credit Agreement and Term Credit Agreement to finance the 2000
and 1999 property acquisitions, interest expense on the fixed-rate mortgage
assumed related to Rancho Las Palmas in the third quarter of 1999 and interest
expense on the fixed-rate mortgage on Lakewood Village which was assumed as
part of the Western acquisition in November 2000. Interest expense also
increased as a result of an increase in the LIBOR component of the borrowing
cost on our Revolving Credit Agreement over the comparable period in 1999.

General and administrative expenses decreased by $210,000, or 4.0%, to
$5,105,000 for the year ended December 31, 2000, from $5,315,000 for the year
ended December 31, 1999. This decrease was primarily attributable to one-time
executive severance costs recorded in 1999 and an increase in internal
capitalized leasing costs recorded in 2000, which offset related general and
administrative expenses, offset by annual compensation increases in 2000. As a
percentage of total revenue, general and administrative expenses were 4.2% for
the year ended December 31, 2000 and 5.3% for the year ended December 31, 1999.

Merger related expenses were incurred during 2000 in connection with the
acquisition of Western. The Company incurred approximately $3,204,000 of these
expenses which are non-recurring.

Funds from Operations

The White Paper on Funds from Operations approved by the Board of
Governors of the National Association of Real Estate Investment Trusts
(NAREIT) in March 1995 (the White Paper) defines Funds from Operations as
net income (loss) (computed in accordance with generally accepted accounting
principles), excluding gains (or losses) from debt restructuring and sales of
property, plus real estate related depreciation and amortization and after
adjustments for unconsolidated partnerships and joint ventures. We consider
Funds from Operations an appropriate measure of performance of an equity REIT
because it is predicated on cash flow analyses. We compute Funds from
Operations in accordance with standards established by the White Paper. Our
computation of Funds from Operations may, however, differ from the methodology
for calculating Funds from Operations used by other equity REITs and,
therefore, may not be comparable to these other REITs. Funds from Operations
should not be considered as an alternative to net income (determined in
accordance with GAAP) as a measure of our liquidity, nor is it indicative of
funds available to fund our cash needs, including our ability to make
distributions.

28



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The following table presents our Funds from Operations:

|                                                                                  |                                                  |   |                                  |            |      |   |            |            |   |   |            |            |  
|--------------------------------------------------------------------------------- | ------------------------------------------------ | - | -------------------------------- | ---------- | ---- | - | ---------- | ---------- | - | - | ---------- | ---------- | -
|                                                                                  |                                                  |   | For the years ended December 31,
|                                                                                  |                                                  |   |                                 
|                                                                                  |                                                  |   | 2001                             |            | 2000 |   | 1999      
|                                                                                  |                                                  |   |                                  |            |      |   |           
|Net income                                                                        |                                                  | $ | 64,222,000                       |            |      | $ | 33,800,000 |            |   | $ | 32,576,000 |           
|Add:                                                                              |                                                  |   |                                  |            |      |   |            |            |   |   |            |           
|                                                                                  | Depreciation and amortization                    |   |                                  | 29,278,000 |      |   |            | 20,374,000 |   |   |            | 17,476,000 |  
|                                                                                  | Depreciation of unconsolidated
partnerships      |   |                                  | 83,000     |      |   |            | 21,000     |   |   |            | 8,000      |  
|                                                                                  | Operating subsidiary minority
interests          |   |                                  | 2,521,000  |      |   |            | 2,106,000  |   |   |            | 1,530,000  |  
|                                                                                  | Provision for loss on impairment                 |   |                                  |           |      |   |            | 250,000    |   |   |            |           |  
|Less:                                                                             |                                                  |   |                                  |            |      |   |            |            |   |   |            |           
|                                                                                  | Net gain on sale of real estate                  |   |                                  | (4,129,000 | )    |   |            |           |   |   |            | (400,000   | )
|                                                                                  | Depreciation of non-real estate
corporate assets |   |                                  | (523,000   | )    |   |            | (428,000   | ) |   |            | (392,000   | )
|                                                                                  |                                                  |   |                                  |            |      |   |            |            |   |   |            |           
|Funds from Operations                                                             |                                                  | $ | 91,452,000                       |            |      | $ | 56,123,000 |            |   | $ | 50,798,000 |           
|                                                                                  |                                                  |   |                                  |            |      |   |            |            |   |   |            |           
|Weighted average number of shares
of common stock outstanding
(assuming dilution) |                                                  |   | 33,875,339                       |            |      |   | 24,000,935 |            |   |   | 22,122,659 |           

Cash Flows

Comparison of the Year Ended December 31, 2001 to the Year Ended December
31, 2000.

Net cash provided by operating activities increased by $23,473,000 to
$79,077,000 for the year ended December 31, 2001, as compared to $55,604,000
for the year ended December 31, 2000. The increase was primarily the result of
an increase in operating income due to property acquisitions including Western.
This increase was offset by an increase in accrued interest to note
receivable, an increase in other assets and an increase in net gain on sale of
real estate.

Net cash used in investing activities decreased by $27,746,000 to
$46,227,000 for the year ended December 31, 2001, as compared to $73,973,000
for the year ended December 31, 2000. The decrease was primarily the result of
an increase in proceeds from sale of real estate, a decrease in costs
associated with the acquisition of Western and a decrease in other assets,
offset by an increase in acquisitions of and additions to properties and an
increase in notes receivable.

Net cash used in financing activities increased by $49,629,000 to
$31,017,000 for the year ended December 31, 2001, as compared to net cash
provided by financing activities of $18,612,000 for the year ended December 31,
2000. The increase primarily resulted from a decrease in line of credit
proceeds, an increase in repurchase of common shares and an increase in
distributions paid, offset by an increase in issuance of senior notes and
issuance of common shares.

Comparison of the Year Ended December 31, 2000 to the Year Ended December
31, 1999.

Net cash provided by operating activities increased by $9,184,000 to
$55,604,000 for the year ended December 31, 2000, as compared to $46,420,000
for the year ended December 31, 1999. The increase was primarily the result of
an increase in operating income due to property acquisitions and an increase in
accounts payable, accrued expenses and other liabilities.

Net cash used in investing activities decreased by $3,698,000 to
$73,973,000 for the year ended December 31, 2000, as compared to $77,671,000
for the year ended December 31, 1999. The decrease was primarily the result of
a reduction in acquisitions of and additions to operating properties and a
decrease in proceeds from sale of real estate, offset by an increase in other
assets and cash expended on the acquisition of Western.

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Net cash provided by financing activities decreased by $10,657,000 to
$18,612,000 for the year ended December 31, 2000, as compared to $29,269,000
for the year ended December 31, 1999. The decrease primarily resulted from an
increase in line of credit payments and a decrease in notes payable proceeds,
offset by an increase in line of credit and term loan proceeds.

Liquidity and Capital Resources

Our total market capitalization at December 31, 2001, was approximately
$1,639,717,000, based on the market closing price of our common stock at
December 31, 2001 of $28.72 per share (assuming the conversion of 1,036,072
operating subsidiary units to common stock) and the debt outstanding of
approximately $668,235,000 (exclusive of accounts payable and accrued
expenses). As a result, our debt to total market capitalization ratio was
approximately 40.8% at December 31, 2001. Our Board of Directors adopted a
policy of limiting our indebtedness to approximately 50% of our total market
capitalization. However, we may from time to time modify our debt policy in
light of current economic or market conditions including but not limited to the
relative costs of debt and equity capital, market conditions for debt and
equity securities and fluctuations in the market price of our common stock.
Accordingly, we may increase or decrease our debt to market capitalization
ratio beyond the limit described above.

In connection with our acquisition of Western in November 2000, we entered
into a new financing arrangement including a $300,000,000 Revolving Credit
Agreement and a $100,000,000 Term Credit Agreement. The Revolving Credit
Agreement matures in January 2004 and the Term Credit Agreement was scheduled
to mature in November 2001. At December 31, 2001, we had $134,700,000
available under our Revolving Credit Agreement and the Term Credit Agreement
had been repaid in full. At our option, amounts borrowed under the Revolving
Credit Agreement bear interest at either LIBOR plus 1.10% or a reference rate.
At our option, amounts borrowed under the Term Credit Agreement bore interest
at either LIBOR plus 1.20% or a reference rate. The weighted average interest
rate for short-term LIBOR contracts under the Revolving Credit Agreement at
December 31, 2001 was 3.23%. We will continue to use the Revolving Credit
Agreement to take advantage of select acquisition opportunities as well as to
provide funds for general corporate purposes. In April 2001, we issued
$150,000,000 of 7.95% senior notes due April 15, 2011. The net proceeds were
used to repay borrowings under the Revolving Credit Agreement and the Term
Credit Agreement.

All of our indebtedness is reflected in our consolidated financial
statements, and the notes thereto, appearing elsewhere in this report. We are
not a party to any off-balance sheet financing arrangements. Our indebtedness
outstanding at December 31, 2001 includes regularly scheduled principal
reductions, balloon payments and scheduled senior note redemptions as follows:

|     |  |        |             | 
|---- |  | ------ | ----------- | 
|Year |  | Amount
|     |  |       
|2002 |  | $      | 4,323,000   | 
|2003 |  | $      | 4,605,000   | 
|2004 |  | $      | 232,683,000 | 
|2005 |  | $      | 11,818,000  | 
|2006 |  | $      | 58,927,000  | 
|2007 |  | $      | 76,545,000  | 
|2008 |  | $      | 26,873,000  | 
|2009 |  | $      | 47,779,000  | 
|2010 |  | $      | 48,364,000  | 
|2011 |  | $      | 150,320,000 | 
|2012 |  | $      | 5,836,000   | 

The payments due in the year 2004 include the balance drawn on the
Revolving Credit Agreement at December 31, 2001 of $165,300,000. With regard
to the payments noted above, it is likely that we will not have sufficient
funds on hand to repay these amounts at maturity. Therefore, we expect to
refinance this debt either through additional debt financings secured by
individual properties or groups of properties, by unsecured private or public
debt offerings or by additional equity offerings.

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We could enter into derivative financial instruments such as interest rate
swaps, caps and treasury locks in order to mitigate our interest rate risk on a
related financial instrument. We are not a party to any derivative financial
instruments at December 31, 2001. Further, we do not enter into derivative or
interest rate transactions for speculative or trading purposes nor do we enter
into energy or commodity contracts.

We have future obligations relating to leases for real estate and office
equipment under operating leases expiring at various dates through 2021.
Rental expense was $770,000 and $892,000 for the years ended December 31, 2001
and 2000, respectively. Minimum rentals under noncancellable operating leases
in effect at December 31, 2001 were as follows:

|                    |  |   |           | 
|------------------- |  | - | --------- | 
|2002                |  | $ | 770,000   | 
|2003                |  |   | 769,000   | 
|2004                |  |   | 764,000   | 
|2005                |  |   | 763,000   | 
|2006                |  |   | 763,000   | 
|2007 and subsequent |  |   | 2,883,000 | 
|                    |  |   |           | 
|                    |  | $ | 6,712,000 | 
|                    |  |   |           | 

We have entered into certain related party transactions with executive
officers and affiliates of the Company. We believe that all related party
agreements were entered into at arms length. Information on these related
party transactions can be found in our consolidated financial statements, and
the notes thereto, appearing elsewhere in this report.

We expect to make distributions from net cash provided by operations.
Operating cash flows in excess of amounts to be used for distributions will be
invested primarily in short-term investments such as collateralized securities
of the United States government or its agencies, high-grade commercial paper
and bank deposits or used to pay down outstanding balances on our Revolving
Credit Agreement, if any.

The following table provides recent historical distribution information:

|                   |  |                    |  |                    |  |                    |  |              |       |    
|------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------ | ----- | ---
|                   |  |                    |  |                    |  |                    |  | Distribution
|Quarter Ended      |  | Date Declared      |  | Record Date        |  | Date Paid          |  | Per Share   
|                   |  |                    |  |                    |  |                    |  |             
|March 31, 1999     |  | February 10, 1999  |  | March 17, 1999     |  | April 16, 1999     |  | $            | 0.400 |    
|June 30, 1999      |  | June 15, 1999      |  | June 28, 1999      |  | July 16, 1999      |  | $            | 0.400 |    
|September 30, 1999 |  | September 9, 1999  |  | September 24, 1999 |  | October 22, 1999   |  | $            | 0.400 |    
|December 31, 1999  |  | December 9, 1999   |  | December 22, 1999  |  | January 21, 2000   |  | $            | 0.400 |    
|March 31, 2000     |  | February 9, 2000   |  | March 17, 2000     |  | April 14, 2000     |  | $            | 0.420 |    
|June 30, 2000      |  | June 13, 2000      |  | June 26, 2000      |  | July 21, 2000      |  | $            | 0.420 |    
|September 30, 2000 |  | September 15, 2000 |  | September 25, 2000 |  | October 20, 2000   |  | $            | 0.420 |    
|December 31, 2000  |  | October 30, 2000   |  | November 3, 2000   |  | November 15, 2000  |  | $            | 0.280 | (1)
|March 31, 2001     |  | January 30, 2001   |  | February 16, 2001  |  | March 15, 2001     |  | $            | 0.455 |    
|June 30, 2001      |  | May 16, 2001       |  | May 25, 2001       |  | June 15, 2001      |  | $            | 0.455 |    
|September 30, 2001 |  | August 14, 2001    |  | August 31, 2001    |  | September 14, 2001 |  | $            | 0.455 |    
|December 31, 2001  |  | November 13, 2001  |  | November 30, 2001  |  | December 14, 2001  |  | $            | 0.455 |    



---

|(1) |  | During the fourth quarter of 2000 we distributed a special, two-month
dividend of $0.28 a share. This dividend was in connection with the Western
acquisition, and was paid to our stockholders of record before the merger
transaction was closed to address the two-month shift in timing for the
payment of our normal quarterly dividend in future periods.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We expect to meet our short-term liquidity requirements generally through
our current working capital and net cash provided by operations. We believe
that our net cash provided by operations will be sufficient to allow us to make
the distributions necessary to enable us to continue to qualify as a REIT. We
also believe that the foregoing sources of liquidity will be sufficient to fund
our short-term liquidity needs for the foreseeable future.

We expect to meet our long-term liquidity requirements such as property
acquisition and development, scheduled debt maturities, renovations, expansions
and other non-recurring capital improvements through long-term secured and
unsecured indebtedness, the issuance of additional equity or debt securities
and the use of net proceeds from the disposition of non-strategic assets. We
also expect to use funds available under the Revolving Credit

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Agreement to finance acquisition and development activities and capital
improvements on an interim basis.

Inflation

Substantially all of our leases provide for the recovery of real estate
taxes and operating expenses we incur. In addition, many of the leases provide
for fixed base rent increases or indexed escalations (based on the consumer
price index or other measures) and percentage rent. We believe that
inflationary increases in expenses will be substantially offset by expense
reimbursements, contractual rent increases and percentage rent.

The Revolving Credit Agreement bears interest at a variable rate, which
will be influenced by changes in short-term interest rates, and will be
sensitive to inflation.

Impact of Accounting Pronouncements Issued but not Adopted by the Company

In August 2001, the Financial Accounting Standards Board issued SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS No.
144). SFAS No. 144 addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. This Statement requires that
long-lived assets be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If the carrying amount of an asset exceeds its
estimated future cash flows, an impairment charge is recognized by the amount
which the carrying amount of the asset exceeds the fair value of the asset.
SFAS No. 144 requires companies to separately report discontinued operations
and extends that reporting to a component of an entity that either has been
disposed of (by sale, abandonment, or in a distribution to owners) or is
classified as held for sale. Assets to be disposed of are reported at the
lower of the carrying amount or fair value less costs to sell. The Company is
required to adopt SFAS No. 144 on January 1, 2002, and has not determined the
impact of adoption on its financial condition or results of operations.






|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------

We are exposed to interest rate changes primarily as a result of our
credit agreements and long-term debt used to maintain liquidity and fund
capital expenditures and expansion of our real estate investment portfolio and
operations. Our interest rate risk management objective is to limit the impact
of interest rate changes on earnings and cash flows and to lower our overall
borrowing costs. To achieve our objectives, we borrow primarily at fixed
rates, although we use our line of credit for short-term borrowing purposes,
and could enter into derivative financial instruments such as interest rate
swaps, caps and treasury locks in order to mitigate our interest rate risk on a
related financial instrument. We are not a party to any derivative financial
instruments at December 31, 2001. We do not enter into derivative or interest
rate transactions for speculative or trading purposes nor do we enter into
energy or commodity contracts. Additionally, we do not believe that the
interest rate risk represented by our floating rate debt is material as of
December 31, 2001 in relation to total assets of $1,339,618,000 and a market
capitalization of $971,482,000.

Our interest rate risk is monitored using a variety of techniques. The
table below presents the principal amounts, weighted average interest rates,
fair values and other terms required by year of expected maturity to evaluate
the expected cash flows and sensitivity to interest rate changes.

|                             |  |      |       |      |  |      |       |      |  |      |         |            |  |       |        |          |  |   |        |   |  |   |         |   |  |   |         |   |  |      |         |  
|---------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ------- | ---------- |  | ----- | ------ | -------- |  | - | ------ | - |  | - | ------- | - |  | - | ------- | - |  | ---- | ------- | -
|                             |  |      |       |      |  |      |       |      |  |      |         |            |  |       |        |          |  |   |        |   |  |   |         |   |  |   |         |   |  | Fair
|                             |  | 2002 |       | 2003 |  | 2004 |       | 2005 |  | 2006 |         | Thereafter |  | Total |        | Value(3)
|                             |  |      |       |      |  |      |       |      |  |      |         |            |  |       |        |         
|Fixed-rate debt (1)(2)       |  | $    | 4,323 |      |  | $    | 4,605 |      |  | $    | 67,351  |            |  | $     | 11,818 |          |  | $ | 58,909 |   |  | $ | 335,767 |   |  | $ | 502,773 |   |  | $    | 503,553 |  
|Average interest rate        |  |      | 7.71  | %    |  |      | 7.71  | %    |  |      | 7.78    | %          |  |       | 7.76   | %        |  |   | 7.19   | % |  |   | 7.78    | % |  |   | 7.71    | % |  |      | 7.43    | %
|Variable-rate LIBOR debt (1) |  |      |      |      |  |      |      |      |  | $    | 165,300 |            |  |       |       |          |  |   |       |   |  |   |        |   |  | $ | 165,300 |   |  | $    | 165,300 |  
|Average interest rate        |  |      |      |      |  |      |      |      |  |      | 3.23    | %          |  |       |       |          |  |   |       |   |  |   |        |   |  |   | 3.23    | % |  |      | 3.23    | %



---

|(1) |  | Principal amounts shown are in thousands.                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Excludes unamortized premiums on notes payable, net of discounts, of
$162,000.                                                                                                           
|   
|   
|   
|   
|(3) |  | The fair value of notes payable, line of credit and senior notes payable
approximates the carrying amount based on the current rates offered for
loans with similar risks and maturities.

32



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##### Table of Contents



The table incorporates only those exposures that exist as of December 31,
2001, and does not consider those exposures or positions which could arise
after that date. Moreover, because firm commitments are not presented in the
table above, the information presented therein has limited predictive value.
As a result, our interest rate fluctuations will depend on the exposures that
arise during the period and interest rates.




ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplementary data required by Regulation S-X
are included in this Annual Report on Form 10-K commencing on page F-1.






|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- | ------------------------------------------------------------------------------------

Not applicable.

33



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##### Table of Contents






PART III

Certain information required by Part III is omitted from this annual
report on Form 10-K in that the Company will file a definitive proxy statement
within 120 days after the end of its fiscal year pursuant to Regulation 14A for
its Annual Meeting of Stockholders to be held in May 2002 (the Proxy
Statement) and the information included therein is incorporated herein by
reference.




ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information contained in the sections captioned Proposal One;
Election of Directors and Compliance with Federal Securities Laws of the
Proxy Statement is incorporated herein by reference.




ITEM 11. EXECUTIVE COMPENSATION

The information contained in the section captioned Executive
Compensation of the Proxy Statement is incorporated herein by reference.




ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information contained in the section captioned Security Ownership of
Certain Beneficial Owners and Management of the Proxy Statement 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 the Proxy Statement is incorporated herein by
reference.




PART IV




ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Financial Statements and Schedules

The following consolidated financial information is included as a separate
section of this Annual Report on Form 10-K.

1. Consolidated Financial Statements:

|                                                                                                     |  |         |     | 
|---------------------------------------------------------------------------------------------------- |  | ------- | --- | 
|                                                                                                     |  | Page(s)
|                                                                                                     |  |        
|Independent Auditors Report                                                                         |  |         | F-1 | 
|Consolidated Balance Sheets as of December 31, 2001
and 2000                                         |  |         | F-2 | 
|Consolidated Statements of Income for the years ended
December 31, 2001, 2000 and 1999               |  |         | F-3 | 
|Consolidated Statements of Stockholders Equity for the years ended
December 31, 2001, 2000 and 1999 |  |         | F-4 | 
|Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999           |  |         | F-5 | 
|Notes to Consolidated Financial Statements                                                           |  |         | F-7 | 

2. Consolidated Financial Statement Schedule:

|                                                     |  |  |      | 
|---------------------------------------------------- |  |  | ---- | 
|Schedule III-Properties and Accumulated Depreciation |  |  | F-22 | 

34



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##### Table of Contents





|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  | Description                                                                                                                                                                                                                                                                                                                                                                                                    
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|3.1      |  | Articles of Amendment and Restatement of the Company (previously filed
as Exhibit 3.1 to Pan Pacific Retail Properties, Inc.s Registration
Statement on Form S-11 (Registration No. 333-28715) and incorporated
herein by reference)                                                                                                                                                                          
|        
|3.2      |  | Amended and Restated Bylaws of the Company (previously filed as
Exhibit 3.2 to Pan Pacific Retail Properties, Inc.s Registration
Statement on Form S-11 (Registration No. 333-28715) and incorporated
herein by reference)                                                                                                                                                                                    
|        
|4.1      |  | Form of Certificate of Common Stock (previously filed as Exhibit 4.1
to Pan Pacific Retail Properties, Inc.s Registration Statement on
Form S-11 (Registration No. 333- 28715) and incorporated herein by
reference)                                                                                                                                                                                          
|        
|4.2      |  | Form of Indenture relating to the Senior Notes (previously filed as
Exhibit 4.1 to Western Properties Trusts Registration Statement on
Form S-3 (Registration No. 333-32721) and incorporated herein by this
reference)                                                                                                                                                                                       
|        
|4.3      |  | Form of Senior Notes (previously filed as Exhibit 4.1 to Western
Properties Trusts Registration Statement on Form S-3 (Registration
No. 333-32721) and incorporated herein by this reference)                                                                                                                                                                                                                 
|        
|4.4      |  | Form of Supplemental Indenture relating to the 7.1% Senior Notes due
2006 (previously filed as Exhibit 4.5 to Western Properties Trusts
Form 8-K dated September 24, 1997, and incorporated herein by this
reference)                                                                                                                                                                                         
|        
|4.5      |  | Form of Supplemental Indenture relating to the 7.2% Senior Notes due
2008 (previously filed as Exhibit 4.6 to Western Properties Trusts
Form 8-K, dated September 24, 1997, and incorporated herein by this
reference)                                                                                                                                                                                        
|        
|4.6      |  | Form of Supplemental Indenture relating to the 7.3% Senior Notes due
2010 (previously filed as Exhibit 4.7 to Western Properties Trusts
Form 8-K, dated September 24, 1997, and incorporated herein by this
reference)                                                                                                                                                                                        
|        
|4.7      |  | Form of Supplemental Indenture relating to the assumption by Pan
Pacific Retail Properties, Inc. of the Indenture relating to the 7.1%
Senior Notes due 2006, the 7.2% Senior Notes due 2008 and the 7.3%
Senior Notes due 2010 (previously filed as Exhibit 4.7 to Pan Pacific
Retail Properties, Inc.s Registration Statement on Form S-3
(Registration No. 333-51230) and incorporated herein by reference)
|        
|4.8      |  | Form of Indenture relating to the 7.875% Senior Notes due 2004
(previously filed as Exhibit 4.2 to Western Properties Trust
Registration Statement on Form S-3 (Registration No. 333-71270) and
incorporated herein by reference)                                                                                                                                                                              
|        
|4.9      |  | Form of Supplemental Indenture relating to the assumption by Pan
Pacific Retail Properties, Inc. of the Indenture relating to the
7.875% Senior Notes due 2004 (previously filed as Exhibit 4.9 to Pan
Pacific Retail Properties, Inc.s Registration Statement on Form S-3
(Registration No. 333-51230) and incorporated herein by reference)                                                                 
|        
|4.10     |  | Form of Indenture relating to the Notes (previously filed as Exhibit
4.2 to Pan Pacific Retail Properties, Inc.s Form 8-K, filed on April
10, 2001, and incorporated herein by reference)                                                                                                                                                                                                                     

35



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|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4.11     |  | Form of 7.95% Notes due 2011 (previously filed as Exhibit 4.1 to Pan
Pacific Retail Properties, Inc.s Form 8-K, filed on April 10, 2001,
and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        
|4.12     |  | Minutes of a meeting of the Pricing Committee held on April 6, 2001
designating the terms of 7.95% Notes due 2011 (previously filed as
Exhibit 4.3 to Pan Pacific Retail Properties, Inc.s Form 8-K, filed
on April 10, 2001, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                  
|        
|10.1     |  | The 1997 Stock Option and Incentive Plan of Pan Pacific Retail
Properties, Inc. (previously filed as Exhibit 10.1 to Pan Pacific
Retail Properties, Inc.s Registration Statement on Form S-11
(Registration No. 333-28715) and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                     
|        
|10.2     |  | The 2000 Stock Incentive Plan of Pan Pacific Retail Properties, Inc.
(previously filed as Appendix A to Pan Pacific Retail Properties,
Inc.s Proxy Statement for the 2000 Annual Meeting of Stockholders)                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        
|10.3     |  | Form of Officers and Directors Indemnification Agreement (previously
filed as Exhibit 10.2 to Pan Pacific Retail Properties, Inc.s
Registration Statement on Form S-11 Registration No. 333-28715) and
incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                                             
|        
|10.4     |  | Form of Non-Competition Agreement (previously filed as Exhibit 10.7 to
Pan Pacific Retail Properties, Inc.s Registration Statement on Form
S-11 (Registration No. 333- 28715) and incorporated herein by
reference)                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        
|10.5     |  | Revolving Credit Agreement, dated as of November 13, 2000, by and
among Pan Pacific Retail Properties, Inc., certain subsidiaries of Pan
Pacific Retail Properties, Inc. and Bank of America, N.A., as
Administrative Agent, First Union National Bank, as Syndication Agent,
and U.S. Bank, National Association, as Documentation Agent, Dresdner
Bank AG, New York and Grand Cayman Branches, Guaranty Federal Banks,
F.S.B., as Co- Agent and Wells Fargo Bank, N.A., as Co-Agent
(previously filed as Exhibit 10.9 to Pan Pacific Retail Properties,
Inc.s Registration Statement on Form S-3 (Registration No. 333-51230)
and incorporated herein by reference)
|        
|10.6     |  | Term Credit Agreement, dated as of November 13, 2000, by and among Pan
Pacific Retail Properties, Inc., certain subsidiaries of Pan Pacific
Retail Properties, Inc. and Bank of America, N.A., as Administrative
Agent (previously filed as Exhibit 10.10 to Pan Pacific Retail
Properties, Inc.s Registration Statement on Form S-3 (Registration
No. 333- 51230) and incorporated herein by reference)                                                                                                                                                                                                                                                             
|        
|10.7     |  | Members Interest Purchase Agreement, dated as of August 13, 1999, by
and among Pan Pacific Retail Properties, Inc., Pan Pacific (RLP), Inc.
and Stanley W. Gribble (previously filed as Exhibit 10.15 to Pan
Pacific Retail Properties, Inc.s Registration Statement on Form S-4
(Registration No. 333-45944) and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                 

36



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##### Table of Contents



|         |  |                                                                                                                                                                                                                                                                                                                                                         
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  | Description                                                                                                                                                                                                                                                                                                                                             
|         |  |                                                                                                                                                                                                                                                                                                                                                         
|10.8     |  | Loan Assumption and Modification Agreement, dated as of September 23,
1999, by and between Pan Pacific Retail Properties, Inc. and La Salle
National Bank (previously filed as Exhibit 10.16 to Pan Pacific Retail
Properties, Inc.s Registration Statement on Form S-4 (Registration
No. 333-45944) and incorporated herein by reference)             
|        
|10.9     |  | Operating Agreement of Pan Pacific (Rancho Las Palmas), LLC, dated as
of September 23, 1999 (previously filed as Exhibit 10.17 to Pan
Pacific Retail Properties, Inc.s Registration Statement on Form S-4
(Registration No. 333-45944) and incorporated herein by reference)                                                                           
|        
|10.10    |  | Contribution Agreement and Escrow Instructions, dated as of August 13,
1999, by and between Pan Pacific Retail Properties, Inc. and Ranch Las
Palmas Center Associates (previously filed as Exhibit 10.18 to Pan
Pacific Retail Properties, Inc.s Registration Statement on Form S-4
(Registration No. 333-45944) and incorporated herein by reference)
|        
|10.11*   |  | Form of Second Amended and Restated Employment Agreement, dated as of
October 29, 2001, between Pan Pacific Retail Properties, Inc. and Mr.
Stuart A. Tanz                                                                                                                                                                                              
|        
|10.12*   |  | Form of Employment Agreement, dated as of October 29, 2001, between
Pan Pacific Retail Properties, Inc. and Mr. Joseph B. Tyson                                                                                                                                                                                                                         
|        
|10.13*   |  | Form of Second Amended and Restated Employment Agreement, dated as of
October 30, 2001, between Pan Pacific Retail Properties, Inc. and Mr.
Jeffrey S. Stauffer                                                                                                                                                                                         
|        
|10.14*   |  | Form of Restricted Stock Agreement between Pan Pacific Retail
Properties, Inc. and each of Messrs. Stuart A. Tanz, Jeffrey S.
Stauffer and Joseph B. Tyson                                                                                                                                                                                              
|        
|21.1*    |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                                                                                                          
|        
|23.1*    |  | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                                                     

* Filed Herewith

37



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on March 14, 2002.

PAN PACIFIC RETAIL PROPERTIES, INC.

|    |                                                                         |  |                                                                                                                                  |                    
|--- | ----------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------- | -------------------
|By: | /s/ Stuart A. Tanz                                                      |  | By:                                                                                                                              | /s/ Joseph B. Tyson
|    |                                                                         |  |                                                                                                                                 
|    | Stuart A. TanzDirector, Chairman, Chief Executive
Officer and President |  | Joseph B. Tyson, CPAExecutive Vice President, Chief Financial
Officer and Secretary (Principal
Financial and Accounting Officer)

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

|                                           |  |          |  |               
|------------------------------------------ |  | -------- |  | --------------
|Signature                                  |  | Title    |  | Date          
|                                           |  |          |  |               
|                                          
|/s/ Mark J. Riedy

Mark J. Riedy           |  | Director |  | March 14, 2002
|                                          
|/s/ Bernard M. Feldman

Bernard M. Feldman |  | Director |  | March 14, 2002
|                                          
|/s/ David P. Zimel

David P. Zimel         |  | Director |  | March 14, 2002
|                                          
|/s/ Joseph P. Colmery

Joseph P. Colmery   |  | Director |  | March 14, 2002
|                                          
|/s/ James L. Stell

James L. Stell         |  | Director |  | March 14, 2002

38



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##### Table of Contents



INDEPENDENT AUDITORS REPORT

The Board of Directors
Pan Pacific Retail Properties, Inc.:

We have audited the accompanying consolidated balance sheets of Pan
Pacific Retail Properties, Inc. and subsidiaries as of December 31, 2001 and
2000, and the related consolidated statements of income, stockholders equity
and cash flows for each of the years in the three-year period ended December
31, 2001. In connection with our audits of the consolidated financial
statements, we also have audited the accompanying financial statement schedule
III. These consolidated financial statements and financial statement schedule
are the responsibility of the Company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 auditing standards generally
accepted in the United States of America. 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 Pan Pacific
Retail Properties, Inc. and subsidiaries as of December 31, 2001 and 2000, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America. Also in our
opinion, the related 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.

KPMG LLP

San Diego, California
January 23, 2002

F-1



---



##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      |              |         |              |   |           |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---- | ------------ | ------- | ------------ | - | --------- | ------- | -
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      | December 31, |         | December 31,
|ASSETS:                                                                                                                                                                             |                                                                                                                                                                                                                    | 2001 |              | 2000   
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      |              |        
|Properties, at cost:                                                                                                                                                                |                                                                                                                                                                                                                    |      |              |         |              |   |           |        
|                                                                                                                                                                                    | Land                                                                                                                                                                                                               |      | $            | 349,694 |              |   | $         | 350,604 |  
|                                                                                                                                                                                    | Buildings and improvements                                                                                                                                                                                         |      |              | 946,188 |              |   |           | 887,353 |  
|                                                                                                                                                                                    | Tenant improvements                                                                                                                                                                                                |      |              | 36,069  |              |   |           | 30,762  |  
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      |              |         |              |   |           |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      | 1,331,951    |         |              |   | 1,268,719 |        
|                                                                                                                                                                                    | Less accumulated depreciation and amortization                                                                                                                                                                     |      |              | (98,762 | )            |   |           | (73,895 | )
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      |              |         |              |   |           |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      | 1,233,189    |         |              |   | 1,194,824 |        
|Investments in unconsolidated partnerships                                                                                                                                          |                                                                                                                                                                                                                    |      | 1,580        |         |              |   | 6,816     |        
|Cash and cash equivalents                                                                                                                                                           |                                                                                                                                                                                                                    |      | 3,765        |         |              |   | 1,932     |        
|Accounts receivable (net of allowance for doubtful accounts of
$1,680 and $1,404, respectively)                                                                                     |                                                                                                                                                                                                                    |      | 8,006        |         |              |   | 7,107     |        
|Accrued rent receivable (net of allowance for doubtful accounts of
$1,928 and $1,588, respectively)                                                                                 |                                                                                                                                                                                                                    |      | 17,351       |         |              |   | 14,288    |        
|Notes receivable                                                                                                                                                                    |                                                                                                                                                                                                                    |      | 47,892       |         |              |   | 37,944    |        
|Deferred lease commissions (including unamortized related party
amounts of $4,279 and $2,978, respectively, and net of accumulated
amortization of $3,368 and $2,415, respectively) |                                                                                                                                                                                                                    |      | 6,352        |         |              |   | 4,836     |        
|Prepaid expenses                                                                                                                                                                    |                                                                                                                                                                                                                    |      | 10,305       |         |              |   | 9,133     |        
|Other assets                                                                                                                                                                        |                                                                                                                                                                                                                    |      | 11,178       |         |              |   | 20,810    |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      |              |         |              |   |           |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    | $    | 1,339,618    |         |              | $ | 1,297,690 |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      |              |         |              |   |           |        
|LIABILITIES AND EQUITY:                                                                                                                                                             |                                                                                                                                                                                                                    |      |              |         |              |   |           |        
|Notes payable                                                                                                                                                                       |                                                                                                                                                                                                                    | $    | 229,135      |         |              | $ | 233,911   |        
|Line of credit and term loan payable                                                                                                                                                |                                                                                                                                                                                                                    |      | 165,300      |         |              |   | 267,650   |        
|Senior notes                                                                                                                                                                        |                                                                                                                                                                                                                    |      | 273,800      |         |              |   | 124,850   |        
|Accounts payable, accrued expenses and other liabilities                                                                                                                            |                                                                                                                                                                                                                    |      | 28,177       |         |              |   | 22,527    |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      |              |         |              |   |           |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      | 696,412      |         |              |   | 648,938   |        
|Minority interests                                                                                                                                                                  |                                                                                                                                                                                                                    |      | 20,748       |         |              |   | 41,754    |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      |              |         |              |   |           |        
|Stockholders equity:                                                                                                                                                               |                                                                                                                                                                                                                    |      |              |         |              |   |           |        
|                                                                                                                                                                                    | Common stock par value $.01 per share, 100,000,000 authorized
shares, 32,789,913 and 32,074,368 shares issued and outstanding, net
of 1,000,000 and 0 treasury shares, at December 31, 2001 and 2000,
respectively |      |              | 328     |              |   |           | 321     |  
|                                                                                                                                                                                    | Paid in capital in excess of par value                                                                                                                                                                             |      |              | 714,615 |              |   |           | 705,265 |  
|                                                                                                                                                                                    | Accumulated deficit                                                                                                                                                                                                |      |              | (92,485 | )            |   |           | (98,588 | )
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      |              |         |              |   |           |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      | 622,458      |         |              |   | 606,998   |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      |              |         |              |   |           |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    | $    | 1,339,618    |         |              | $ | 1,297,690 |        
|                                                                                                                                                                                    |                                                                                                                                                                                                                    |      |              |         |              |   |           |        

See accompanying notes to consolidated financial statements.

F-2



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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)

|                                 |                                         |   |                                  |         |      |   |         |        |   |   |         |        |  
|-------------------------------- | --------------------------------------- | - | -------------------------------- | ------- | ---- | - | ------- | ------ | - | - | ------- | ------ | -
|                                 |                                         |   | For the Years Ended December 31,
|                                 |                                         |   |                                 
|                                 |                                         |   | 2001                             |         | 2000 |   | 1999   
|                                 |                                         |   |                                  |         |      |   |        
|REVENUE:                         |                                         |   |                                  |         |      |   |         |        |   |   |         |       
|                                 | Base rent                               |   | $                                | 140,296 |      |   | $       | 93,990 |   |   | $       | 79,377 |  
|                                 | Percentage rent                         |   |                                  | 2,699   |      |   |         | 753    |   |   |         | 760    |  
|                                 | Recoveries from tenants                 |   |                                  | 32,616  |      |   |         | 21,648 |   |   |         | 17,893 |  
|                                 | Net gain on sale of real estate         |   |                                  | 4,129   |      |   |         |       |   |   |         | 400    |  
|                                 | Income from unconsolidated partnerships |   |                                  | 837     |      |   |         | 364    |   |   |         | 341    |  
|                                 | Other                                   |   |                                  | 8,417   |      |   |         | 3,738  |   |   |         | 2,291  |  
|                                 |                                         |   |                                  |         |      |   |         |        |   |   |         |       
|                                 |                                         |   | 188,994                          |         |      |   | 120,493 |        |   |   | 101,062 |       
|                                 |                                         |   |                                  |         |      |   |         |        |   |   |         |       
|EXPENSES:                        |                                         |   |                                  |         |      |   |         |        |   |   |         |       
|                                 | Property operating                      |   |                                  | 22,168  |      |   |         | 14,285 |   |   |         | 12,551 |  
|                                 | Property taxes                          |   |                                  | 13,867  |      |   |         | 8,938  |   |   |         | 7,399  |  
|                                 | Depreciation and amortization           |   |                                  | 29,278  |      |   |         | 20,374 |   |   |         | 17,476 |  
|                                 | Interest                                |   |                                  | 46,196  |      |   |         | 32,112 |   |   |         | 23,939 |  
|                                 | General and administrative              |   |                                  | 9,168   |      |   |         | 5,105  |   |   |         | 5,315  |  
|                                 | Merger related expenses                 |   |                                  |        |      |   |         | 3,204  |   |   |         |       |  
|                                 | Other                                   |   |                                  | 1,574   |      |   |         | 556    |   |   |         | 248    |  
|                                 |                                         |   |                                  |         |      |   |         |        |   |   |         |       
|                                 |                                         |   | 122,251                          |         |      |   | 84,574  |        |   |   | 66,928  |       
|                                 |                                         |   |                                  |         |      |   |         |        |   |   |         |       
|INCOME BEFORE MINORITY INTERESTS |                                         |   | 66,743                           |         |      |   | 35,919  |        |   |   | 34,134  |       
|                                 | Minority interests                      |   |                                  | (2,521  | )    |   |         | (2,119 | ) |   |         | (1,558 | )
|                                 |                                         |   |                                  |         |      |   |         |        |   |   |         |       
|NET INCOME                       |                                         | $ | 64,222                           |         |      | $ | 33,800  |        |   | $ | 32,576  |       
|                                 |                                         |   |                                  |         |      |   |         |        |   |   |         |       
|Basic earnings per share         |                                         | $ | 2.02                             |         |      | $ | 1.49    |        |   | $ | 1.54    |       
|Diluted earnings per share       |                                         | $ | 1.97                             |         |      | $ | 1.48    |        |   | $ | 1.54    |       

See accompanying notes to consolidated financial statements.

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(In thousands, except share data)

|                                                         |  |              |            |            |  |             |     |         |  |         |         |   |  |   |         |   |  |   |         |  
|-------------------------------------------------------- |  | ------------ | ---------- | ---------- |  | ----------- | --- | ------- |  | ------- | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                                         |  |              |            |            |  |             |     |         |  | Paid in |         |   |  |   |         |   |  |  
|                                                         |  | Common stock |            | capital in |  |             |     |         |  |         |         |  
|                                                         |  |              |            | excess of  |  | Accumulated |     |         |  |        
|                                                         |  | Shares       |            | Amount     |  | par value   |     | deficit |  | Total  
|                                                         |  |              |            |            |  |             |     |         |  |        
|Balance at December 31, 1998                             |  |              | 21,162,012 |            |  | $           | 212 |         |  | $       | 481,182 |   |  | $ | (98,306 | ) |  | $ | 383,088 |  
|Issuance and vesting of restricted stock                 |  |              | 90,500     |            |  |             | 1   |         |  |         | 130     |   |  |   |        |   |  |   | 131     |  
|Net income                                               |  |              |           |            |  |             |    |         |  |         |        |   |  |   | 32,576  |   |  |   | 32,576  |  
|Cash distributions paid and declared                     |  |              |           |            |  |             |    |         |  |         |        |   |  |   | (33,929 | ) |  |   | (33,929 | )
|                                                         |  |              |            |            |  |             |     |         |  |         |         |   |  |   |         |   |  |   |         |  
|Balance at December 31, 1999                             |  |              | 21,252,512 |            |  |             | 213 |         |  |         | 481,312 |   |  |   | (99,659 | ) |  |   | 381,866 |  
|Vesting of restricted stock                              |  |              |           |            |  |             |    |         |  |         | 1,615   |   |  |   |        |   |  |   | 1,615   |  
|Stock issued in acquisition of Western                   |  |              | 10,754,256 |            |  |             | 107 |         |  |         | 221,027 |   |  |   |        |   |  |   | 221,134 |  
|Stock grant                                              |  |              | 6,000      |            |  |             |    |         |  |         | 120     |   |  |   |        |   |  |   | 120     |  
|Stock issued on exercise of options                      |  |              | 61,600     |            |  |             | 1   |         |  |         | 1,191   |   |  |   |        |   |  |   | 1,192   |  
|Net income                                               |  |              |           |            |  |             |    |         |  |         |        |   |  |   | 33,800  |   |  |   | 33,800  |  
|Cash distributions paid and declared                     |  |              |           |            |  |             |    |         |  |         |        |   |  |   | (32,729 | ) |  |   | (32,729 | )
|                                                         |  |              |            |            |  |             |     |         |  |         |         |   |  |   |         |   |  |   |         |  
|Balance at December 31, 2000                             |  |              | 32,074,368 |            |  |             | 321 |         |  |         | 705,265 |   |  |   | (98,588 | ) |  |   | 606,998 |  
|Repurchase of common stock                               |  |              | (1,000,000 | )          |  |             | (10 | )       |  |         | (20,840 | ) |  |   |        |   |  |   | (20,850 | )
|Conversion of operating subsidiary units
to common stock |  |              | 921,322    |            |  |             | 9   |         |  |         | 18,252  |   |  |   |        |   |  |   | 18,261  |  
|Stock issued in acquisition of Western                   |  |              | 520        |            |  |             |    |         |  |         | 11      |   |  |   |        |   |  |   | 11      |  
|Issuance and vesting of restricted stock                 |  |              | 217,800    |            |  |             | 2   |         |  |         | 920     |   |  |   |        |   |  |   | 922     |  
|Stock issued on exercise of options                      |  |              | 575,903    |            |  |             | 6   |         |  |         | 11,007  |   |  |   |        |   |  |   | 11,013  |  
|Net income                                               |  |              |           |            |  |             |    |         |  |         |        |   |  |   | 64,222  |   |  |   | 64,222  |  
|Cash distributions paid and declared                     |  |              |           |            |  |             |    |         |  |         |        |   |  |   | (58,119 | ) |  |   | (58,119 | )
|                                                         |  |              |            |            |  |             |     |         |  |         |         |   |  |   |         |   |  |   |         |  
|Balance at December 31, 2001                             |  |              | 32,789,913 |            |  | $           | 328 |         |  | $       | 714,615 |   |  | $ | (92,485 | ) |  | $ | 622,458 |  
|                                                         |  |              |            |            |  |             |     |         |  |         |         |   |  |   |         |   |  |   |         |  

See accompanying notes to consolidated financial statements.

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |   |          |        |         |  
|--------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------ | ------------------------------------------------------------------------- | -------------------------------------------------------------------- | --------------------------------------------------- | -------- | -------------------------------- | ------- | ---- | -------- | ------ | ------- | - | -------- | ------ | ------- | -
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          | For the Years Ended December 31,
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          |                                 
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          | 2001                             |         | 2000 |          | 1999  
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |       
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  
|Net income                                                                        |                                                                                      | $                                                                         | 64,222                                                               |                                                     |          | $                                | 33,800  |      |          | $      | 32,576  |  
|Adjustments to reconcile net income to net cash provided
by operating activities: |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  
|                                                                                  |                                                                                      | Depreciation and amortization                                             |                                                                      |                                                     | 29,278   |                                  |         |      | 20,374   |        |         |   | 17,476   |       
|                                                                                  |                                                                                      | Amortization of prepaid financing costs                                   |                                                                      |                                                     | 999      |                                  |         |      | 700      |        |         |   | 707      |       
|                                                                                  |                                                                                      | Net gain on sale of real estate                                           |                                                                      |                                                     | (4,129   | )                                |         |      |         |        |         |   | (400     | )     
|                                                                                  |                                                                                      | Income from unconsolidated partnerships                                   |                                                                      |                                                     | (837     | )                                |         |      | (364     | )      |         |   | (341     | )     
|                                                                                  |                                                                                      | Minority interests                                                        |                                                                      |                                                     | 2,521    |                                  |         |      | 2,119    |        |         |   | 1,558    |       
|                                                                                  |                                                                                      | Vesting of restricted stock                                               |                                                                      |                                                     | 922      |                                  |         |      | 1,615    |        |         |   |         |       
|                                                                                  |                                                                                      | Stock grant                                                               |                                                                      |                                                     |         |                                  |         |      | 120      |        |         |   |         |       
|                                                                                  | Changes in assets and liabilities, net of the effects of
the acquisition of Western: |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |   |         
|                                                                                  |                                                                                      |                                                                           | Increase in accounts receivable                                      |                                                     |          | (899                             | )       |      |          | (2,230 | )       |   |          | (337   | )      
|                                                                                  |                                                                                      |                                                                           | Increase in accrued rent receivable                                  |                                                     |          | (3,063                           | )       |      |          | (1,897 | )       |   |          | (2,748 | )      
|                                                                                  |                                                                                      |                                                                           | Increase in accrued interest to note receivable                      |                                                     |          | (3,057                           | )       |      |          |       |         |   |          |       |        
|                                                                                  |                                                                                      |                                                                           | Increase in deferred lease commissions                               |                                                     |          | (2,735                           | )       |      |          | (1,757 | )       |   |          | (1,785 | )      
|                                                                                  |                                                                                      |                                                                           | Increase in prepaid expenses                                         |                                                     |          | (358                             | )       |      |          | (505   | )       |   |          | (732   | )      
|                                                                                  |                                                                                      |                                                                           | Increase in other assets                                             |                                                     |          | (9,046                           | )       |      |          | (1,569 | )       |   |          | (948   | )      
|                                                                                  |                                                                                      |                                                                           | Increase in accounts payable, accrued expenses and
other liabilities |                                                     |          | 5,259                            |         |      |          | 5,198  |         |   |          | 1,394  |        
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  
|                                                                                  |                                                                                      |                                                                           |                                                                      | Net cash provided by operating activities           |          |                                  | 79,077  |      |          |        | 55,604  |   |          |        | 46,420  |  
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  
|                                                                                  |                                                                                      | Acquisitions of and additions to properties                               |                                                                      |                                                     | (63,817  | )                                |         |      | (49,913  | )      |         |   | (81,219  | )     
|                                                                                  |                                                                                      | Proceeds from sale of real estate                                         |                                                                      |                                                     | 36,423   |                                  |         |      | 198      |        |         |   | 12,915   |       
|                                                                                  |                                                                                      | Increase (decrease) in construction accounts payable and
accrued expenses |                                                                      |                                                     | 391      |                                  |         |      | 116      |        |         |   | (2,573   | )     
|                                                                                  |                                                                                      | Distributions from unconsolidated partnerships                            |                                                                      |                                                     | 584      |                                  |         |      | 355      |        |         |   | 84       |       
|                                                                                  |                                                                                      | Acquisition of Western                                                    |                                                                      |                                                     | (1,952   | )                                |         |      | (14,371  | )      |         |   |         |       
|                                                                                  |                                                                                      | Acquisition of interest in unconsolidated partnership                     |                                                                      |                                                     |         |                                  |         |      |         |        |         |   | (7,163   | )     
|                                                                                  |                                                                                      | Acquisition of minority interests                                         |                                                                      |                                                     | (2,252   | )                                |         |      | (570     | )      |         |   | (204     | )     
|                                                                                  |                                                                                      | Increase in other assets                                                  |                                                                      |                                                     |         |                                  |         |      | (13,339  | )      |         |   | (841     | )     
|                                                                                  |                                                                                      | Collections of notes receivable                                           |                                                                      |                                                     | 3,678    |                                  |         |      | 6,224    |        |         |   | 1,599    |       
|                                                                                  |                                                                                      | Increases in notes receivable                                             |                                                                      |                                                     | (19,282  | )                                |         |      | (2,673   | )      |         |   | (269     | )     
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  
|                                                                                  |                                                                                      |                                                                           |                                                                      | Net cash used in investing activities               |          |                                  | (46,227 | )    |          |        | (73,973 | ) |          |        | (77,671 | )
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  
|                                                                                  |                                                                                      | Line of credit proceeds                                                   |                                                                      |                                                     | 168,300  |                                  |         |      | 346,260  |        |         |   | 106,962  |       
|                                                                                  |                                                                                      | Line of credit payments                                                   |                                                                      |                                                     | (270,650 | )                                |         |      | (279,910 | )      |         |   | (116,662 | )     
|                                                                                  |                                                                                      | Notes payable proceeds                                                    |                                                                      |                                                     |         |                                  |         |      |         |        |         |   | 91,300   |       
|                                                                                  |                                                                                      | Notes payable payments                                                    |                                                                      |                                                     | (4,776   | )                                |         |      | (4,207   | )      |         |   | (14,949  | )     
|                                                                                  |                                                                                      | Prepaid financing costs                                                   |                                                                      |                                                     | (1,700   | )                                |         |      | (1,267   | )      |         |   | (2,719   | )     
|                                                                                  |                                                                                      | Issuance of senior notes, net                                             |                                                                      |                                                     | 148,837  |                                  |         |      |         |        |         |   |         |       
|                                                                                  |                                                                                      | Repurchase of common shares                                               |                                                                      |                                                     | (20,850  | )                                |         |      |         |        |         |   |         |       
|                                                                                  |                                                                                      | Issuance of common shares                                                 |                                                                      |                                                     | 11,013   |                                  |         |      | 1,192    |        |         |   |         |       
|                                                                                  |                                                                                      | Distributions paid                                                        |                                                                      |                                                     | (61,191  | )                                |         |      | (43,456  | )      |         |   | (34,663  | )     
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  
|                                                                                  |                                                                                      |                                                                           |                                                                      | Net cash (used in) provided by financing activities |          |                                  | (31,017 | )    |          |        | 18,612  |   |          |        | 29,269  |  
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  
|NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS                              |                                                                                      |                                                                           | 1,833                                                                |                                                     |          |                                  | 243     |      |          |        | (1,982  | )
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                    |                                                                                      |                                                                           | 1,932                                                                |                                                     |          |                                  | 1,689   |      |          |        | 3,671   |  
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  
|CASH AND CASH EQUIVALENTS AT END OF YEAR                                          |                                                                                      | $                                                                         | 3,765                                                                |                                                     |          | $                                | 1,932   |      |          | $      | 1,689   |  
|                                                                                  |                                                                                      |                                                                           |                                                                      |                                                     |          |                                  |         |      |          |        |         |  

(Continued)

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands)

|                                                                        |                                                                                            |  |                                  |        |      |  |      |         |  |  |   |        | 
|----------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ |  | -------------------------------- | ------ | ---- |  | ---- | ------- |  |  | - | ------ | 
|                                                                        |                                                                                            |  | For the Years Ended December 31,
|                                                                        |                                                                                            |  |                                 
|                                                                        |                                                                                            |  | 2001                             |        | 2000 |  | 1999
|                                                                        |                                                                                            |  |                                  |        |      |  |     
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:                       |                                                                                            |  |                                  |        |      |  |      |         |  |  |   |       
|                                                                        | Cash paid for interest (net of amounts capitalized of
$1,539, $202 and $231, respectively) |  | $                                | 45,547 |      |  | $    | 30,699  |  |  | $ | 22,995 | 
|SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES: |                                                                                            |  |                                  |        |      |  |      |         |  |  |   |       
|                                                                        | Transfer from investment in unconsolidated partnerships
to property                        |  | $                                |       |      |  | $    |        |  |  | $ | 15,775 | 
|                                                                        | Transfer of other assets to properties                                                     |  | $                                | 20,107 |      |  | $    |        |  |  | $ |       | 
|                                                                        | Transfer of note receivable to property                                                    |  | $                                | 11,113 |      |  | $    |        |  |  | $ |       | 
|                                                                        | Notes receivable issued upon sales of properties                                           |  | $                                | 2,400  |      |  | $    | 1,801   |  |  | $ | 1,962  | 
|                                                                        | Conversion of operating subsidiary units to common stock                                   |  | $                                | 18,261 |      |  | $    |        |  |  | $ |       | 
|                                                                        | Stock issued in acquisition of Western                                                     |  | $                                | 11     |      |  | $    | 221,134 |  |  | $ |       | 
|                                                                        | Assumption of senior notes and line of credit                                              |  | $                                |       |      |  | $    | 197,350 |  |  | $ |       | 
|                                                                        | Notes payable assumed upon acquisition of properties and Western                           |  | $                                |       |      |  | $    | 9,628   |  |  | $ | 12,523 | 
|                                                                        | Minority interest from acquisition of properties and Western                               |  | $                                |       |      |  | $    | 18,751  |  |  | $ | 6,134  | 
|                                                                        | Accrued liability for acquisition of partnership interests                                 |  | $                                |       |      |  | $    | 126     |  |  | $ |       | 
|                                                                        | Distributions payable                                                                      |  | $                                |       |      |  | $    |        |  |  | $ | 8,960  | 
|                                                                        | Note payable assumed by buyer upon sale of property                                        |  | $                                |       |      |  | $    |        |  |  | $ | 4,408  | 

See accompanying notes to consolidated financial statements.

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

1. Organization and basis of presentation

Pan Pacific Retail Properties, Inc. (together with its subsidiaries, the
Company) is an equity real estate investment trust (REIT) that owns, leases
and manages neighborhood and community shopping centers. As of December 31,
2001, the Company owned a portfolio comprised of 108 properties located
primarily in the Western region of the United States. Commencing with its
taxable year ended December 31, 1997, the Company believes it qualifies as a
REIT under Sections 856 through 860 of the Internal Revenue Code.

In 1998 and 1999, the Company formed certain operating subsidiaries to
acquire shopping center properties. The Company is the managing member and in
exchange for the properties which were contributed to the operating
subsidiaries, units were issued to the non-managing members. These operating
subsidiaries were primarily formed for tax planning purposes for the
non-managing members who contributed the properties. A non-managing member can
seek redemption of the units after the first anniversary of the date of
issuance. The Company, at its option, may redeem the units by either (i)
issuing common stock at the rate of one share of common stock for each unit, or
(ii) paying cash to the non-managing member based on the average trading price
of its common stock. Distributions are made to the non-managing members at a
rate equal to the distribution being paid by the Company on a share of common
stock. Net income or loss is allocated to the non-managing members in an
amount equal to the cumulative distributions earned by such members. All
remaining net income or loss is allocated to the Company as the managing
member. The following table summarizes the activity for these operating
subsidiaries as of December 31, 2001:

|                                     |  |                  |         |           |  |             |         |  |  |  |         | 
|------------------------------------ |  | ---------------- | ------- | --------- |  | ----------- | ------- |  |  |  | ------- | 
|                                     |  | Units originally |         | Units     |  | Units      
|Operating subsidiary                 |  | issued           |         | converted |  | outstanding
|                                     |  |                  |         |           |  |            
|Pan Pacific (Portland), LLC          |  |                  | 832,617 |           |  |             | 400,000 |  |  |  | 432,617 | 
|Pan Pacific (Rancho Las Palmas),
LLC |  |                  | 314,587 |           |  |             | 0       |  |  |  | 314,587 | 

On November 13, 2000, the Company acquired Western Properties Trust
(Western), a real estate investment trust, at a cost of approximately
$440,000,000. The transaction was a stock for stock exchange including
assumption of debt whereby Western common shares and units were exchanged into
newly issued Company common shares and units, based upon a price of $20.5625
per share/unit issued and a 0.62 exchange ratio. As a result, the Company
issued 10,754,776 common shares and 911,934 operating subsidiary units to
Westerns equity holders. The Company accounted for this transaction using the
purchase method of accounting; accordingly, the Companys results of operations
for the period from November 13, 2000 through December 31, 2000 include
Western.

F-7



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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

1. Organization and basis of presentation (continued)

In connection with the acquisition of Western, the Company has an
investment in certain operating partnerships. Pan Pacific (Kienows), L.P.,
formerly Western/Kienow, L.P., issued units convertible into shares of Company
common stock or cash, at the Companys option. Distributions are made to the
limited partners at a rate equal to the distribution being paid by the Company
on a share of common stock. Net income or loss is allocated to the limited
partners in an amount equal to the cumulative distributions earned by such
partners. All remaining net income or loss is allocated to the Company as
general partner. Pan Pacific (Pinecreek), L.P., formerly Western/Pinecreek,
L.P., issued units convertible into shares of Company common stock or cash, at
the Companys option. Distributions are made to the limited partners after a
10% preferred return to the Company as general partner. Net income is
allocated to the Company, as general partner, and to the limited partners in
amounts equal to the cumulative distributions earned by such partners and
thereafter based on their ownership interests. Losses are allocated 99% to the
Company as general partner and 1% to the limited partners. The following table
summarizes the activity for these operating subsidiaries as of December 31,
2001:

|                              |  |                  |         |           |  |             |         |  |  |  |         |    
|----------------------------- |  | ---------------- | ------- | --------- |  | ----------- | ------- |  |  |  | ------- | ---
|                              |  | Units originally |         | Units     |  | Units      
|Operating subsidiary          |  | issued           |         | converted |  | outstanding
|                              |  |                  |         |           |  |            
|Pan Pacific (Kienows), L.P.   |  |                  | 857,065 |           |  |             | 623,067 |  |  |  | 233,998 | (a)
|Pan Pacific (Pinecreek), L.P. |  |                  | 54,869  |           |  |             | 0       |  |  |  | 54,869  |    

(a)  All remaining units were converted for $6,721,000 cash in January
2002.

Unaudited pro forma information reflecting the acquisition of Western is
presented in the following table. The amounts included therein assume that the
acquisition had taken place at the beginning of the year.

|                           |  |                                  |         |      |  |   |         | 
|-------------------------- |  | -------------------------------- | ------- | ---- |  | - | ------- | 
|                           |  | For the years ended December 31,
|                           |  |                                 
|                           |  | 2000                             |         | 1999
|                           |  |                                  |         |     
|                           |  | (Pro forma, unaudited)          
|Total revenue              |  | $                                | 181,497 |      |  | $ | 166,614 | 
|Total expenses             |  | $                                | 120,151 |      |  | $ | 108,749 | 
|Net income                 |  | $                                | 61,346  |      |  | $ | 57,865  | 
|Basic earnings per share   |  | $                                | 1.92    |      |  | $ | 1.81    | 
|Diluted earnings per share |  | $                                | 1.89    |      |  | $ | 1.81    | 

2. Summary of significant accounting policies and practices

(a) Principles of consolidation

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All material intercompany transactions and
balances have been eliminated. The Company consolidated entities the Company
controls and recorded a minority interest for the portions not owned by the
Company.

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

2. Summary of significant accounting policies and practices (continued)

(b) Cash and cash equivalents

For purposes of reporting cash flows, highly liquid investments with an
original maturity of three months or less are considered cash equivalents.
Restricted cash totaled $252,000 and $331,000 at December 31, 2001 and 2000,
respectively.

(c) Income recognition

Rental revenue is recognized on a straight-line basis over the terms of
the leases, less an allowance for doubtful accounts relating to accounts
receivable and accrued rent receivable for amounts deemed uncollectible and for
leases which may be terminated before the end of the contracted term. The
Company considers tenant retention in determining an appropriate allowance to
record. Percentage rent is recorded at the time tenants meet specified sales
thresholds. The Company receives reimbursement for real estate taxes and
certain other operating expenses. Such reimbursements are generally recognized
at the time the related expenses are incurred.

Bad debt expense, included in property operating expenses in the Companys
financial statements, was $1,765,000, $441,000 and $702,000 for the years ended
December 31, 2001, 2000 and 1999, respectively.

(d) Capitalization of costs

The Company capitalizes certain acquisition and development related costs
to the carrying costs of the property acquired or developed. These costs are
being depreciated over the estimated useful lives of the properties. The
capitalized costs associated with unsuccessful acquisitions are charged to
expense when the acquisition is abandoned.

(e) Depreciation and amortization

Depreciation on buildings and improvements is provided using a forty-year
straight-line basis. Management believes forty years is an appropriate
estimated useful life for buildings and improvements. Tenant improvements and
costs incurred in obtaining leases are depreciated on a straight-line basis
over the lives of the respective leases.

Prepaid financing costs are amortized over the lives of the loans and the
related amortization expense is included as a component of interest expense.
Premiums and discounts on indebtedness are amortized over the life of the
related debt using the straight-line method, which approximates the effective
interest method.

(f) Impairment of long-lived assets and long-lived assets to be disposed of

The Company reviews long-lived assets and certain identifiable intangibles
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets
to be held and used is measured by a comparison of the carrying amount of an
asset to future net cash flows, undiscounted and without interest, expected to
be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less
costs to sell.

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

2. Summary of significant accounting policies and practices (continued)

(g) Income taxes

As of April 16, 1997, the Company elected to be taxed as a REIT pursuant
to the Internal Revenue Code, as amended. In general, a corporation that
distributes at least 90% of its REIT taxable income to stockholders in any
taxable year and complies with certain other requirements (relating primarily
to the nature of its assets and the sources of its revenue) is not subject to
federal income taxation to the extent of the income which it distributes.
Management believes that the Company has qualified and intends for it to
continue to qualify as a REIT in the future. As discussed more fully in Note
8, management also does not expect that the Company will pay income taxes on
built-in gains on certain of its assets. Based on these considerations,
management does not believe that the Company will be liable for income taxes at
the federal level or in most of the states in which it operates in future
years.

(h) Credit and concentration risk

The Company predominantly operates in one industry segment: real estate
ownership, management and development. No single tenant accounts for 10% or
more of rental revenue. Financial instruments which potentially subject the
Company to concentrations of credit risk consist principally of temporary cash
investments and receivables. The Company places its temporary cash investments
with financial institutions which the Company believes are of high credit
quality. Concentration of credit risk with respect to receivables is limited
due to the large number of tenants comprising the Companys customer base, and
their dispersion across many areas within the Western region of the United
States. At December 31, 2001 and 2000, the Company had no significant
concentration of credit risk.

(i) Net income per share

Basic earnings per share (EPS) is computed by dividing earnings
available to common stockholders during the period by the weighted average
number of common shares outstanding during each period. Diluted EPS is
computed by dividing the adjusted amount of earnings available to common
stockholders during the period by the weighted average number of shares that
would have been outstanding assuming the issuance of common shares for all
dilutive potential common shares outstanding during the reporting period, net
of shares assumed to be repurchased using the treasury stock method.

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

2. Summary of significant accounting policies and practices (continued)

The following is a reconciliation of the numerator and denominator for the
calculation of basic and diluted EPS (all net income is available to common
stockholders for the periods presented):

|                                         |                                                                  |                                                   |   |                                  |           |      |   |            |         |  |   |            |         | 
|---------------------------------------- | ---------------------------------------------------------------- | ------------------------------------------------- | - | -------------------------------- | --------- | ---- | - | ---------- | ------- |  | - | ---------- | ------- | 
|                                         |                                                                  |                                                   |   | For the years ended December 31,
|                                         |                                                                  |                                                   |   |                                 
|                                         |                                                                  |                                                   |   | 2001                             |           | 2000 |   | 1999      
|                                         |                                                                  |                                                   |   |                                  |           |      |   |           
|Income available to common stockholders: |                                                                  |                                                   |   |                                  |           |      |   |            |         |  |   |           
|                                         | Basic                                                            |                                                   | $ | 64,222                           |           |      | $ | 33,800     |         |  | $ | 32,576     |        
|                                         | Add-back income allocated to dilutive
operating subsidiary units |                                                   |   | 1,864                            |           |      |   | 585        |         |  |   | 1,530      |        
|                                         |                                                                  |                                                   |   |                                  |           |      |   |            |         |  |   |            |        
|                                         | Diluted                                                          |                                                   | $ | 66,086                           |           |      | $ | 34,385     |         |  | $ | 34,106     |        
|                                         |                                                                  |                                                   |   |                                  |           |      |   |            |         |  |   |           
|Weighted average shares:                 |                                                                  |                                                   |   |                                  |           |      |   |            |         |  |   |           
|                                         | Basic                                                            |                                                   |   | 31,857,903                       |           |      |   | 22,695,877 |         |  |   | 21,196,238 |        
|                                         | Incremental shares from assumed:                                 |                                                   |   |                                  |           |      |   |            |         |  |   |            |        
|                                         |                                                                  | Exercise of dilutive stock options                |   |                                  | 294,006   |      |   |            | 35,765  |  |   |            | 8,478   | 
|                                         |                                                                  | Conversion of dilutive operating
subsidiary units |   |                                  | 1,408,843 |      |   |            | 436,677 |  |   |            | 917,943 | 
|                                         |                                                                  |                                                   |   |                                  |           |      |   |            |         |  |   |            |        
|                                         | Diluted                                                          |                                                   |   | 33,560,752                       |           |      |   | 23,168,319 |         |  |   | 22,122,659 |        
|                                         |                                                                  |                                                   |   |                                  |           |      |   |            |         |  |   |           

At December 31, 2001 and 2000, 0 and 310,167 stock options, respectively,
were excluded from the calculation of diluted weighted average shares because
they were anti-dilutive. At December 31, 2001 and 2000, 314,587 and 832,617
operating subsidiary units were excluded from the calculation of diluted
weighted average shares because they were anti-dilutive.

(j) Stock plans

The Company accounts for its stock plans in accordance with the provisions
of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock
Issued to Employees, and related interpretations. As such, compensation
expense is recorded on the date of option grants only if the current market
price of the underlying stock exceeds the exercise price. Compensation expense
for restricted stock grants is determined on the grant date based on the market
price and is recognized over the vesting period. Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS
No. 123), permits entities to recognize as expense over the vesting period the
fair value of all stock-based awards on the date of grant. Alternatively, SFAS
No. 123 allows entities to continue to apply the provisions of APB Opinion No.
25 and provide pro forma net income and pro forma earnings per share
disclosures for employee stock option grants made as if the fair-value-based
method defined in SFAS No. 123 had been applied. The Company has elected to
continue to apply the provisions of APB Opinion No. 25 and provide the annual
pro forma disclosures required by SFAS No. 123.

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

2. Summary of significant accounting policies and practices (continued)

(k) Use of estimates

Management of the Company 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 date of the financial statements and
the reporting of revenue and expenses during the reporting period to prepare
these financial statements in conformity with accounting principles generally
accepted in the United States of America. The Company bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities and
reported amounts of revenue and expenses that are not readily apparent from
other sources. 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 Company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
Company. These critical accounting policies include managements estimates of
useful lives in calculating depreciation expense on its shopping center
properties and the ultimate recoverability (or impairment) of each shopping
center asset. If the useful lives of buildings and improvements are different
from 40 years, it could result in changes to the future results of operations
of the Company. Future adverse changes in market conditions or poor operating
results of shopping center properties could result in losses or an inability to
recover the carrying value of the properties that may not be reflected in the
properties current carrying value, thereby possibly requiring an impairment
charge in the future.

(l) Reclassifications

Certain reclassifications of 2000 and 1999 amounts have been made in order
to conform to 2001 presentation.

3. Investments in unconsolidated partnerships

The accompanying consolidated financial statements include investments in
partnerships in which the Company exerts significant influence but does not own
a controlling interest. At December 31, 2001, the Company owned a 50% general
partner interest in North Coast Health Center. During December 2001, the
Company sold its 30% undivided co-tenant interest in Serra Center. At December
31, 2000, the Company owned a 50% general partner interest in North Coast
Health Center and a 30% undivided co-tenant interest in Serra Center. These
investments are reported using the equity method.

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

4. Indebtedness

(a) Notes payable

|                                                              |                                                                                                                                                                   |   |              |        |      |   |         |        | 
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | ------ | ---- | - | ------- | ------ | 
|                                                              |                                                                                                                                                                   |   | December 31,
|                                                              |                                                                                                                                                                   |   |             
|                                                              |                                                                                                                                                                   |   | 2001         |        | 2000
|                                                              |                                                                                                                                                                   |   |              |        |     
|Notes payable secured by properties consist of the following: |                                                                                                                                                                   |   |              |        |      |   |         |       
|                                                              | Bank notes payable, secured by deeds of trust, bearing interest at 7.10% with
monthly principal and interest payments of $391, due in August 2009                 |   | $            | 54,545 |      |   | $       | 55,333 | 
|                                                              | Bank notes payable, secured by a mortgage and deeds of trust, bearing interest at
8.17% with monthly principal and interest payments of $404, due in January 2007 |   |              | 52,004 |      |   |         | 52,524 | 
|                                                              | Bank notes payable, secured by deeds of trust, bearing interest at 7.21% with
monthly principal and interest payments of $252, due in July 2006                   |   |              | 33,680 |      |   |         | 34,254 | 
|                                                              | Bank note payable, secured by a deed of trust, bearing interest at 7.72% with
monthly principal and interest payments of $190, due in January 2010                |   |              | 26,080 |      |   |         | 26,331 | 
|                                                              | Bank note payable, secured by deeds of trust, bearing interest at 8.73% with
monthly principal and interest payments of $144, due in February 2007 (a)            |   |              | 16,448 |      |   |         | 16,704 | 
|                                                              | Bank note payable, secured by a deed of trust, bearing interest at 8.10% with
monthly principal and interest payments of $94, due in August 2007                  |   |              | 12,230 |      |   |         | 12,367 | 
|                                                              | Bank note payable, secured by a deed of trust, bearing interest at 7.80% with
monthly principal and interest payments of $107, due in December 2005               |   |              | 9,779  |      |   |         | 10,280 | 
|                                                              | Bank note payable, secured by a deed of trust, bearing interest at 7.61% with
monthly principal and interest payments of $80, due in May 2004                     |   |              | 9,357  |      |   |         | 9,591  | 
|                                                              | Bank note payable, secured by a deed of trust, bearing interest at 7.65% with
monthly principal and interest payments of $54, due in October 2012 (b)             |   |              | 7,327  |      |   |         | 7,413  | 
|                                                              | Bank note payable, secured by a deed of trust, bearing interest at 7.00% with
monthly principal and interest payments of $37, due in March 2004                   |   |              | 4,334  |      |   |         | 4,411  | 
|                                                              | Bank note payable, secured by a deed of trust, bearing interest at 7.88% with
monthly principal and interest payments of $56, due in August 2008                  |   |              | 1,988  |      |   |         | 3,136  | 
|                                                              |                                                                                                                                                                   |   |              |        |      |   |         |        | 
|                                                              |                                                                                                                                                                   |   | 227,772      |        |      |   | 232,344 |       
|                                                              | Unamortized note payable premiums                                                                                                                                 |   |              | 1,363  |      |   |         | 1,567  | 
|                                                              |                                                                                                                                                                   |   |              |        |      |   |         |        | 
|                                                              |                                                                                                                                                                   | $ | 229,135      |        |      | $ | 233,911 |       
|                                                              |                                                                                                                                                                   |   |              |        |      |   |         |       



---

|(a) |  | Excludes unamortized note payable premium of $1,082 and $1,266 at
December 31, 2001 and 2000, respectively.
|--- |  | -----------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | Excludes unamortized note payable premium of $281 and $301 at December
31, 2001 and 2000, respectively.    

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

4. Indebtedness (continued)

Principal payments under these notes payable are due as follows:

|                    |  |   |         | 
|------------------- |  | - | ------- | 
|2002                |  | $ | 4,323   | 
|2003                |  |   | 4,605   | 
|2004                |  |   | 17,383  | 
|2005                |  |   | 11,818  | 
|2006                |  |   | 33,927  | 
|2007 and subsequent |  |   | 155,716 | 
|                    |  |   |         | 
|                    |  | $ | 227,772 | 
|                    |  |   |         | 

(b) Line of credit and term loan payable

In November 2000, the Company entered into an unsecured $300,000,000
Revolving Credit Agreement which bears interest, at the Companys option, at
either LIBOR plus 1.10% or a reference rate and expires in January 2004. At
December 31, 2001 and 2000, the amount drawn on this line of credit was
$165,300,000 and $167,650,000, respectively, and the interest rate was 3.23%
and 7.89%, respectively. The credit facility requires a quarterly fee of 0.20%
per annum on the total aggregate commitment.

In November 2000, the Company also executed an unsecured $100,000,000 Term
Credit Agreement which bore interest, at the Companys option, at either LIBOR
plus 1.20% or a reference rate and was to expire in November 2001 with a three
month option to extend at the Companys discretion. At December 31, 2000, the
full amount was drawn on this loan. The Company paid off the loan in full in
July 2001.

(c) Senior notes

In April 2001, the Company issued $150,000,000 in aggregate principal
amount of 7.95% senior notes due April 2011. The Company sold these notes at
99.225% of the principal amount. The Company used the net proceeds from the
offering to repay borrowings under its term loan and line of credit.

In November 2000, in connection with the acquisition of Western, the
Company assumed $49,952,000 of 7.88% senior notes due 2004, $24,977,000 of
7.10% senior notes due 2006, $24,958,000 of 7.20% senior notes due 2008 and
$24,958,000 of 7.30% senior notes due 2010. The senior notes were assumed net
of a $155,000 discount which represents the amount of the principal reduction
recorded by Western to achieve the required yield at pricing of the debt. The
effective yields approximated fair value at the date of the merger.

5. Financial instruments

The following methods and assumptions were used to estimate fair value of
each class of financial instruments:



|(a) |  | Cash and cash equivalents, restricted cash, accounts receivable, accounts
payable and accrued expenses and other liabilities
|--- |  | ----------------------------------------------------------------------------------------------------------------------------

The carrying amounts approximate fair values because of the short-term
nature of these instruments.

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

5. Financial instruments (continued)

(b) Notes receivable

The carrying amounts of notes receivable with balances of $859,000 and
$2,486,000 at December 31, 2001 and 2000, respectively, approximate fair values
because of the short-term nature of these instruments.

It was not practicable to estimate the fair value of notes receivable with
balances of $41,784,000 and $32,999,000 at December 31, 2001 and 2000,
respectively, due to the uncertainty of the timing of repayment. One of the
notes had a balance of $41,127,000 and $19,593,000 at December 31, 2001 and
2000, respectively. The note bears interest at 9.00% on the first $26,500,000
and at 10.50% thereafter. The security interest in the related asset is
considered to be in excess of the credit risk associated with the note balance.
The principal balance on the note may be repaid earlier than its scheduled
maturity of 2007. In addition, the note agreement provides for 25% of the cash
flow after debt service to be paid to the Company for seven years.

The fair value of notes receivable with balances of $5,249,000 and
$2,459,000 at December 31, 2001 and 2000, respectively, approximates the
carrying amounts based on market rates for the same or other instruments with
similar risk, security and remaining maturities.

(c) Notes payable, line of credit and senior notes payable

The fair value of notes payable, line of credit and senior notes payable
approximates the carrying amount based on the current rates offered for loans
with similar risks and maturities.

6. Net gain on sale of real estate

The Company recorded a net gain on sale of real estate of $4,129,000
during the year ended December 31, 2001. The gain related to the sale of a
non-core shopping center, five single tenant assets, a 30% interest in a
shopping center (Note 3) and four parcels of land. The total sales proceeds of
$38,823,000 were received in cash and a note receivable.

The Company recorded a net gain on sale of real estate of $400,000 during
the year ended December 31, 1999. The gain related to the sale of two shopping
centers and one single tenant asset. The total sales proceeds of $12,970,000
were received in cash and notes receivable.

7. Stock plans

In August 1997, the Company established the 1997 Stock Option and
Incentive Plan (the 1997 Plan) pursuant to which the Companys Board of
Directors may grant stock, restricted stock awards and stock options to
officers, directors and key employees. The 1997 Plan authorizes grants of
stock, restricted stock and options to purchase up to 1,620,000 shares of
authorized but unissued common stock. In March 2000, the Company established
the 2000 Stock Incentive Plan (the 2000 Plan) pursuant to which the Companys
Board of Directors may grant stock, restricted stock awards and stock options
to officers, directors and key employees. The 2000 Plan authorizes grants of
stock, restricted stock and options to purchase up to 489,971 shares of
authorized but unissued common stock. The 2000 Plan was approved by the
Companys stockholders at the annual meeting held in May 2000. In November
2000, the number of shares available for grant pursuant to the 2000 Plan was
increased to 1,786,695 shares upon approval by the Companys stockholders in
connection with the merger with Western. At December 31, 2001, there were
1,057,075 additional shares available for grant under the 1997 Plan and the
2000 Plan.

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

7. Stock plans (continued)

(a) Stock options

Stock options are granted with an exercise price equal to the stocks fair
value at the date of grant. The stock options have seven-year terms and vest
33 1/3% per year over three years from the date of grant, except for the
options granted to the independent directors which vest 33 1/3% immediately,
with the remainder vesting ratably over two years. In connection with the
acquisition of Western, all issued and outstanding stock options became fully
vested.

The per share weighted average fair value of stock options granted during
2001, 2000 and 1999 were $2.14, $1.71 and $1.64, respectively, on the dates of
grant using the Black-Scholes option-pricing model using the following weighted
average assumptions:

|                            |  |      |       |      |  |      |       |   |  |  |       |  
|--------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                            |  | 2001 |       | 2000 |  | 1999
|                            |  |      |       |      |  |     
|Expected distribution yield |  |      | 7.80  | %    |  |      | 8.30  | % |  |  | 8.50  | %
|Risk-free interest rate     |  |      | 5.00  | %    |  |      | 5.00  | % |  |  | 5.00  | %
|Expected volatility         |  |      | 22.48 | %    |  |      | 22.88 | % |  |  | 23.90 | %
|Expected life (years)       |  |      | 6.8   |      |  |      | 5.9   |   |  |  | 6.5   |  

The Company applies APB Opinion No. 25 in accounting for the 1997 Plan and
2000 Plan and, accordingly, no compensation cost has been recognized for its
stock options in the financial statements. Had the Company determined
compensation cost based on the fair value at the grant date for its stock
options under SFAS No. 123, the Companys net income would have been reduced to
the pro forma amounts indicated below:

|                           |  |          |        |       |  |          |        |       |  |          |        |       |  |   |        |  |  |   |        |  |  |   |        | 
|-------------------------- |  | -------- | ------ | ----- |  | -------- | ------ | ----- |  | -------- | ------ | ----- |  | - | ------ |  |  | - | ------ |  |  | - | ------ | 
|                           |  | 2001     |        | 2000  |  | 1999    
|                           |  |          |        |       |  |         
|                           |  | As       |        | Pro   |  | As       |        | Pro   |  | As       |        | Pro  
|                           |  | Reported |        | Forma |  | Reported |        | Forma |  | Reported |        | Forma
|                           |  |          |        |       |  |          |        |       |  |          |        |      
|Net income                 |  | $        | 64,222 |       |  | $        | 63,795 |       |  | $        | 33,800 |       |  | $ | 32,535 |  |  | $ | 32,576 |  |  | $ | 31,481 | 
|Diluted earnings per share |  | $        | 1.97   |       |  | $        | 1.96   |       |  | $        | 1.48   |       |  | $ | 1.43   |  |  | $ | 1.54   |  |  | $ | 1.49   | 

Pro forma net income reflects options granted since adoption of the 1997
Plan and the 2000 Plan.

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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

7. Stock plans (continued)

Stock option activity during the periods presented is as follows:

|                             |           |  |           |          |                  |   |         |         | 
|---------------------------- | --------- |  | --------- | -------- | ---------------- | - | ------- | ------- | 
|                             |           |  | Number of |          | Weighted Average
|                             |           |  | Options   |          | Exercise Price  
|                             |           |  |           |          |                 
|Balance at December 31, 1998 |           |  | 1,215,167 |          |                  | $ | 20.2265 |        
|                             | Granted   |  |           | 283,000  |                  |   | $       | 17.6250 | 
|                             | Exercised |  |           |         |                  |   | $       |        | 
|                             | Forfeited |  |           | (17,000  | )                |   | $       | 20.0600 | 
|                             | Expired   |  |           | (3,333   | )                |   | $       | 19.5000 | 
|                             |           |  |           |          |                  |   |         |        
|Balance at December 31, 1999 |           |  | 1,477,834 |          |                  | $ | 19.7750 |        
|                             | Granted   |  |           | 173,000  |                  |   | $       | 18.6250 | 
|                             | Exercised |  |           | (61,600  | )                |   | $       | 19.3478 | 
|                             | Forfeited |  |           | (15,333  | )                |   | $       | 19.4743 | 
|                             | Expired   |  |           | (10,667  | )                |   | $       | 20.0192 | 
|                             |           |  |           |          |                  |   |         |        
|Balance at December 31, 2000 |           |  | 1,563,234 |          |                  | $ | 19.6605 |        
|                             | Granted   |  |           | 425,486  |                  |   | $       | 21.5500 | 
|                             | Exercised |  |           | (575,903 | )                |   | $       | 19.1051 | 
|                             | Forfeited |  |           | (7,000   | )                |   | $       | 21.5500 | 
|                             | Expired   |  |           | (8,000   | )                |   | $       | 21.8901 | 
|                             |           |  |           |          |                  |   |         |        
|Balance at December 31, 2001 |           |  | 1,397,817 |          |                  | $ | 20.4240 |        
|                             |           |  |           |          |                  |   |         |        

At December 31, 2001, the range of exercise prices for outstanding options
was $17.625 to $22.1875 and the weighted average exercise price and weighted
average remaining contractual life of outstanding options were $20.4240 and 4.1
years, respectively. The weighted average exercise price of exercisable
outstanding options was $19.9809. At December 31, 2001, 1,002,152 of the
1,397,817 outstanding options were exercisable.

(b) Restricted stock and stock grants

During 2001, the Company granted 212,000 shares of restricted stock to
certain officers and key employees pursuant to the 1997 Plan and the 2000 Plan.
The restricted shares vest over five years from the date of grant. During
2001, the Company granted 5,000 shares of restricted stock to the independent
directors of the Board pursuant to the 1997 Plan. The restricted shares vest
over one year from the date of grant. During 2001, the Company granted 800
shares of restricted stock to an independent director of the Board pursuant to
the 1997 Plan. The restricted shares vest 33 1/3% immediately, with the
remainder vesting ratably over two years. Compensation expense for the portion
that vested during 2001 has been recognized in general and administrative
expenses. Compensation expense related to these grants to be recognized in
future periods is $3,910,000 at December 31, 2001.

In November 2000, the Companys Board of Directors granted a total of
6,000 shares of stock to the independent directors of the Board. Expense
related to this grant has been recognized in merger related expenses. During
1999, the Company granted 90,500 shares of restricted stock to certain officers
and key employees pursuant to the 1997 Plan. The restricted shares vest over
five years from the date of grant. Compensation expense, for the portion that
vested during 1999 and 2000 prior to the acquisition of Western, has been
recognized in general and administrative expenses. In connection with the
acquisition of Western, the restricted shares became fully vested and the
remaining compensation expense of $1,305,000 has been recognized in merger
related expenses.

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PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

8. Income taxes

As discussed in Note 2(g), the Company elected to be taxed as a REIT, effective
April 16, 1997. Management believes that the Company qualified and
managements intent is to continue to qualify as a REIT and therefore does not
expect the Company will be liable for income taxes at the federal level or in
most states in future years. Accordingly, for the years ended December 31,
2001, 2000 and 1999, no provision was recorded for federal or substantially all
state income taxes.

In connection with its election to be taxed as a REIT, the Company also
elected to be subject to the built-in gain rules. Under these rules, taxes
may be payable at the time and to the extent that the net unrealized gains on
the Companys assets at the date of conversion to REIT status are recognized in
taxable dispositions of such assets in the ten-year period following
conversion. Such net unrealized gains were approximately $50,000,000 at
December 31, 2001, 2000 and 1999. Management believes that the Company will
not be required to make payments of income taxes on built-in gains during the
ten-year period ending December 31, 2007. It is the intent and ability of the
Company to defer asset dispositions to periods when related gains will not be
subject to the built-in gains income taxes or to use tax planning ideas
available to defer recognition of the built-in gains. However, it may be
necessary to recognize a liability for such income taxes in the future if
managements plans and intentions with respect to asset dispositions, or the
related tax laws, change.

The following unaudited table reconciles the Companys book net income to
REIT taxable income before dividends paid deduction:

|                                                    |                                                                         |   |                                  |         |        |   |        |         |   |   |        |         |  
|--------------------------------------------------- | ----------------------------------------------------------------------- | - | -------------------------------- | ------- | ------ | - | ------ | ------- | - | - | ------ | ------- | -
|                                                    |                                                                         |   | For the years ended December 31,
|                                                    |                                                                         |   |                                 
|                                                    |                                                                         |   | 2001                             |         | 2000   |   | 1999  
|                                                    |                                                                         |   | Estimate                         |         | Actual |   | Actual
|                                                    |                                                                         |   |                                  |         |        |   |       
|Book net income                                     |                                                                         | $ | 64,222                           |         |        | $ | 33,800 |         |   | $ | 32,576 |        
|                                                    | Less: Differences between book and tax net income
for REIT subsidiaries |   |                                  | (2,225  | )      |   |        | 3,993   |   |   |        | (2,261  | )
|                                                    |                                                                         |   |                                  |         |        |   |        |         |   |   |        |        
|                                                    |                                                                         |   | 61,997                           |         |        |   | 37,793 |         |   |   | 30,315 |        
|                                                    | Add: Book depreciation and amortization                                 |   |                                  | 29,278  |        |   |        | 20,374  |   |   |        | 17,476  |  
|                                                    | Less: Tax depreciation and amortization                                 |   |                                  | (26,145 | )      |   |        | (16,513 | ) |   |        | (14,667 | )
|                                                    | Less: Straight-line rent adjustments                                    |   |                                  | (3,157  | )      |   |        | (1,898  | ) |   |        | (3,071  | )
|                                                    | Book/tax difference on gains/losses from capital
transactions           |   |                                  | (136    | )      |   |        | (81     | ) |   |        | (1,024  | )
|                                                    | Other book/tax differences, net                                         |   |                                  | (925    | )      |   |        | 1,504   |   |   |        | (698    | )
|                                                    |                                                                         |   |                                  |         |        |   |        |         |   |   |        |        
|Taxable ordinary income before adjustments          |                                                                         |   | 60,912                           |         |        |   | 41,179 |         |   |   | 28,331 |        
|                                                    | Less: Other adjustments (a)                                             |   |                                  | (7,478  | )      |   |        | (7,478  | ) |   |        |        |  
|                                                    |                                                                         |   |                                  |         |        |   |        |         |   |   |        |        
|REIT taxable income before dividends paid deduction |                                                                         | $ | 53,434                           |         |        | $ | 33,701 |         |   | $ | 28,331 |        
|                                                    |                                                                         |   |                                  |         |        |   |        |         |   |   |        |        

(a)  Based on other adjustments permitted by the Internal Revenue Code.

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PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

8. Income taxes (continued)

The Company pays distributions quarterly to the stockholders. The
following presents the federal income tax characterization of distributions
paid or deemed to be paid to stockholders:

|                  |  |                                  |      |      |  |      |        |   |  |   |      |  |  |  |        |   |  |   |      |  |  |  |        |  
|----------------- |  | -------------------------------- | ---- | ---- |  | ---- | ------ | - |  | - | ---- |  |  |  | ------ | - |  | - | ---- |  |  |  | ------ | -
|                  |  | For the years ended December 31,
|                  |  |                                 
|                  |  | 2001                             |      | 2000 |  | 1999
|                  |  |                                  |      |      |  |     
|Ordinary income   |  | $                                | 1.73 |      |  |      | 94.94  | % |  | $ | 1.67 |  |  |  | 86.18  | % |  | $ | 1.46 |  |  |  | 92.15  | %
|Return of capital |  |                                  | 0.09 |      |  |      | 5.06   | % |  |   | 0.27 |  |  |  | 13.82  | % |  |   | 0.12 |  |  |  | 7.85   | %
|                  |  |                                  |      |      |  |      |        |   |  |   |      |  |  |  |        |   |  |   |      |  |  |  |        |  
|                  |  | $                                | 1.82 |      |  |      | 100.00 | % |  | $ | 1.94 |  |  |  | 100.00 | % |  | $ | 1.58 |  |  |  | 100.00 | %
|                  |  |                                  |      |      |  |      |        |   |  |   |      |  |  |  |        |   |  |   |      |  |  |  |        |  

9. Future lease revenue

Total future minimum lease receipts under noncancellable operating tenant
leases in effect at December 31, 2001 are as follows:

|                    |  |   |         | 
|------------------- |  | - | ------- | 
|2002                |  | $ | 136,693 | 
|2003                |  |   | 125,039 | 
|2004                |  |   | 111,293 | 
|2005                |  |   | 95,972  | 
|2006                |  |   | 78,382  | 
|2007 and subsequent |  |   | 410,116 | 
|                    |  |   |         | 
|                    |  | $ | 957,495 | 
|                    |  |   |         | 

10. Related party transactions

(a)On January 4, 2001, the Company purchased 1,000,000 shares of its common
stock from Revenue Properties (U.S.), Inc., an affiliate of the Company. The
Company purchased the stock at a price of $20.85 per share and financed the
transaction through a draw under its line of credit.

(b)Distributions on common stock paid to Revenue Properties (U.S.), Inc., an
affiliate of the Company, during 2001 and 2000 were $7,004,000 and $20,968,000,
respectively.

(c)The Company received $15,000, $85,000 and $150,000 for the years ended
December 31, 2001, 2000 and 1999, respectively, which represent a reimbursement
of costs incurred by the Company in providing financial services to Revenue
Properties (U.S.), Inc. These amounts are included as a reduction of general
and administrative expenses.

(d)The Company had notes receivable of $735,000 and $687,000 due from
executive officers at December 31, 2001 and 2000, respectively. These notes
were part of the acquisition of Western and replaced notes previously held by
officers of Western. These notes bore interest at 7.50% and were repaid in
January 2002. In addition, the Company had notes receivable of $124,000 and
$116,000 due from executive officers at December 31, 2001 and 2000,
respectively. These notes, which bear interest at 7.00%, are due on demand.
In addition, during 2000 notes receivable of $297,000 were issued to executive
officers. These notes bore interest at 7.00% and were forgiven in November
2000 as a result of the acquisition of Western and were a component of merger
related expenses. The Company had notes receivable at December 31, 1999 of
$260,000 due from executive officers. The notes bore interest at 7.00% and
were forgiven in 2000 as a component of annual compensation.

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PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

11. Employee benefit plan

All employees of the Company who meet certain minimum age and period of
service requirements are eligible to participate in a Section 401(k) plan as
defined by the Internal Revenue Code. The employee benefit plan, sponsored by
the Company, allows eligible employees to defer up to 15% of their annual
compensation. The amounts contributed by employees are immediately vested and
non-forfeitable. The Company, at managements discretion, may match employee
contributions. The Companys cost for the years ended December 31, 2001, 2000
and 1999 was approximately $64,000, $58,000 and $23,000, respectively.

12. Commitments and contingencies

(a)The Company leases certain real estate and office equipment under operating
leases expiring at various dates through 2021. Rental expense was $770,000,
$892,000 and $769,000 for the years ended December 31, 2001, 2000 and 1999,
respectively. Minimum rentals under noncancellable operating leases in effect
at December 31, 2001 were as follows:

|                    |  |   |       | 
|------------------- |  | - | ----- | 
|2002                |  | $ | 770   | 
|2003                |  |   | 769   | 
|2004                |  |   | 764   | 
|2005                |  |   | 763   | 
|2006                |  |   | 763   | 
|2007 and subsequent |  |   | 2,883 | 
|                    |  |   |       | 
|                    |  | $ | 6,712 | 
|                    |  |   |       | 

(b)In connection with the acquisition of Western, the Company was named in a
complaint alleging, among other things, that the merger terms between the
Company and Western were unfair and violated fiduciary obligations to Westerns
shareholders. Management believes, based in part upon discussions with legal
counsel, that these claims are without merit and intends to vigorously defend
against this action; however, the outcome of any litigation is by its nature
unpredictable and we therefore cannot assure that we will successfully defend
this action.

(c)Various claims and legal proceedings arise in the ordinary course of
business. The ultimate amount of liability from all claims and actions cannot
be determined with certainty, but in the opinion of management, the ultimate
liability from all pending and threatened legal claims will not materially
affect the consolidated financial statements taken as a whole.

13. Segment reporting

The Company predominantly operates in one industry segment  real estate
ownership, management and development. As of December 31, 2001 and 2000, the
Company owned 108 and 110 community shopping centers, respectively, primarily
located in the Western United States (see Note 1). Management reviews
operating and financial data for each property separately and independently
from all other properties when making resource allocation decisions and
measuring performance. Therefore, the Company defines operating segments as
individual properties with no segment representing more than 10% of the net
operating income of the Company. No single tenant accounts for 10% or more of
rental revenue and none of the shopping centers are located in a foreign
country.

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PAN PACIFIC RETAIL PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2001, 2000 and 1999
(Tabular amounts are in thousands, except option and share data)

14. Quarterly financial data (unaudited)

| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | The following summarizes the condensed quarterly financial information for
the Company:

|                                |  |                     |        |              |  |         |        |          |  |   |        |  |  |   |        | 
|------------------------------- |  | ------------------- | ------ | ------------ |  | ------- | ------ | -------- |  | - | ------ |  |  | - | ------ | 
|                                |  | Quarters ended 2001
|                                |  |                    
|                                |  | December 31         |        | September 30 |  | June 30 |        | March 31
|                                |  |                     |        |              |  |         |        |         
|Revenue                         |  | $                   | 48,642 |              |  | $       | 46,633 |          |  | $ | 48,596 |  |  | $ | 45,123 | 
|Expenses and minority interests |  |                     | 31,831 |              |  |         | 30,117 |          |  |   | 32,235 |  |  |   | 30,589 | 
|                                |  |                     |        |              |  |         |        |          |  |   |        |  |  |   |        | 
|Net income                      |  | $                   | 16,811 |              |  | $       | 16,516 |          |  | $ | 16,361 |  |  | $ | 14,534 | 
|                                |  |                     |        |              |  |         |        |          |  |   |        |  |  |   |        | 
|Basic earnings per share        |  | $                   | 0.52   |              |  | $       | 0.52   |          |  | $ | 0.52   |  |  | $ | 0.46   | 
|Diluted earnings per share      |  | $                   | 0.51   |              |  | $       | 0.50   |          |  | $ | 0.51   |  |  | $ | 0.45   | 

|                                     |  |                     |        |              |  |         |        |          |  |   |        |  |  |   |        | 
|------------------------------------ |  | ------------------- | ------ | ------------ |  | ------- | ------ | -------- |  | - | ------ |  |  | - | ------ | 
|                                     |  | Quarters ended 2000
|                                     |  |                    
|                                     |  | December 31         |        | September 30 |  | June 30 |        | March 31
|                                     |  |                     |        |              |  |         |        |         
|Revenue                              |  | $                   | 38,021 |              |  | $       | 28,044 |          |  | $ | 27,365 |  |  | $ | 27,063 | 
|Expenses and minority interests      |  |                     | 29,669 |              |  |         | 19,320 |          |  |   | 18,951 |  |  |   | 18,753 | 
|                                     |  |                     |        |              |  |         |        |          |  |   |        |  |  |   |        | 
|Net income                           |  | $                   | 8,352  |              |  | $       | 8,724  |          |  | $ | 8,414  |  |  | $ | 8,310  | 
|                                     |  |                     |        |              |  |         |        |          |  |   |        |  |  |   |        | 
|Basic and diluted earnings per share |  | $                   | 0.31   |              |  | $       | 0.41   |          |  | $ | 0.40   |  |  | $ | 0.39   | 

F-21



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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
SCHEDULE III
PROPERTIES AND ACCUMULATED DEPRECIATION
December 31, 2001
(In thousands)

|                                                  |  |              |        |      |  |                  |       |                 |  |             |        |      |  |                   |        |             |  |                      |   |             |  |     |        |           |  |             |        |             |  |   |        |  |  |         |       |  |  |  |      |    
|------------------------------------------------- |  | ------------ | ------ | ---- |  | ---------------- | ----- | --------------- |  | ----------- | ------ | ---- |  | ----------------- | ------ | ----------- |  | -------------------- | - | ----------- |  | --- | ------ | --------- |  | ----------- | ------ | ----------- |  | - | ------ |  |  | ------- | ----- |  |  |  | ---- | ---
|                                                  |  |              |        |      |  |                  |       |                 |  |             |        |      |  | Costs Capitalized |        |             |  |                      |   |             |  |     |        |           |  |             |        |             |  |   |        |  |  |        
|                                                  |  |              |        |      |  |                  |       |                 |  |             |        |      |  | Subsequent to     |        |             |  |                      |   |             |  |     |        |           |  |             |        |             |  |   |        |  |  |        
|                                                  |  |              |        |      |  | Initial Costs    |       | Acquisition     |  | Total Costs |        |      |  |                   |        |             |  |                     
|                                                  |  |              |        |      |  |                  |       |                 |  |             |        |      |  |                   |        |             |  |                     
|                                                  |  |              |        |      |  |                  |       |                 |  | Buildings   |        |      |  |                   |        |             |  |                      |   |             |  |     |        | Buildings |  |             |        |             |  |   |        |  |  | Date of
|                                                  |  |              |        |      |  |                  |       |                 |  | and         |        |      |  |                   |        | Carrying    |  |                      |   |             |  | and |        | Total     |  | Accumulated |        | Acquis. (A)
|Description                                       |  | Encumbrances |        | Land |  | Improvements (2) |       | Improvements(2) |  | Costs       |        | Land |  | Improvements      |        | (1) (2) (3) |  | Depreciation (2) (3) |   | Constr. (C)
|                                                  |  |              |        |      |  |                  |       |                 |  |             |        |      |  |                   |        |             |  |                      |   |            
|PROPERTIES:                                       |  |              |        |      |  |                  |       |                 |  |             |        |      |  |                   |        |             |  |                      |   |             |  |     |        |           |  |             |        |             |  |   |        |  |  |         |       |  |  |  |      |    
|Albany Plaza
Albany, OR                           |  | $            |       |      |  | $                | 1,525 |                 |  | $           | 4,638  |      |  | $                 | 1,191  |             |  | $                    |  |             |  | $   | 1,525  |           |  | $           | 5,829  |             |  | $ | 7,354  |  |  | $       | 461   |  |  |  | 1999 | (A)
|Anderson Square
Anderson, CA                      |  |              |       |      |  |                  | 827   |                 |  |             | 2,480  |      |  |                   | 76     |             |  |                      |  |             |  |     | 827    |           |  |             | 2,556  |             |  |   | 3,383  |  |  |         | 81    |  |  |  | 2000 | (A)
|Angels Camp Town
          Center
Angels Camp, CA |  |              |       |      |  |                  | 1,153 |                 |  |             | 3,485  |      |  |                   | 23     |             |  |                      |  |             |  |     | 1,153  |           |  |             | 3,508  |             |  |   | 4,661  |  |  |         | 100   |  |  |  | 2000 | (A)
|Arlington Courtyard
Riverside, CA                 |  |              |       |      |  |                  | 401   |                 |  |             | 753    |      |  |                   | 87     |             |  |                      |  |             |  |     | 401    |           |  |             | 840    |             |  |   | 1,241  |  |  |         | 246   |  |  |  | 1994 | (A)
|Auburn North
Auburn, WA                           |  |              |       |      |  |                  | 2,275 |                 |  |             | 8,053  |      |  |                   | 1,616  |             |  |                      |  |             |  |     | 2,275  |           |  |             | 9,669  |             |  |   | 11,944 |  |  |         | 836   |  |  |  | 1999 | (A)
|Bear Creek Plaza
Medford, OR                      |  |              |       |      |  |                  | 3,275 |                 |  |             | 9,825  |      |  |                   | 1,579  |             |  |                      |  |             |  |     | 3,275  |           |  |             | 11,404 |             |  |   | 14,679 |  |  |         | 1,227 |  |  |  | 1998 | (A)
|Blaine International
          Center
Blaine, WA  |  |              |       |      |  |                  | 1,951 |                 |  |             | 5,255  |      |  |                   | 13     |             |  |                      |  |             |  |     | 1,951  |           |  |             | 5,268  |             |  |   | 7,219  |  |  |         | 149   |  |  |  | 2000 | (A)
|Blossom Valley
Turlock, CA                        |  |              |       |      |  |                  | 2,494 |                 |  |             | 7,483  |      |  |                   | 9      |             |  |                      |  |             |  |     | 2,494  |           |  |             | 7,492  |             |  |   | 9,986  |  |  |         | 209   |  |  |  | 2000 | (A)
|Brookhurst
Anaheim, CA                            |  |              |       |      |  |                  | 6,152 |                 |  |             | 14,364 |      |  |                   |       |             |  |                      |  |             |  |     | 6,152  |           |  |             | 14,364 |             |  |   | 20,516 |  |  |         | 90    |  |  |  | 2001 | (A)
|Brookvale Center
Fremont, CA                      |  |              |       |      |  |                  | 3,161 |                 |  |             | 9,489  |      |  |                   | 1,017  |             |  |                      |  |             |  |     | 3,161  |           |  |             | 10,506 |             |  |   | 13,667 |  |  |         | 1,173 |  |  |  | 1997 | (A)
|Cable Park
Orangevale, CA                         |  |              |       |      |  |                  | 3,042 |                 |  |             | 9,174  |      |  |                   | 31     |             |  |                      |  |             |  |     | 3,042  |           |  |             | 9,205  |             |  |   | 12,247 |  |  |         | 449   |  |  |  | 1999 | (A)
|Canal Farms
Las Brunos, CA                        |  |              |       |      |  |                  | 1,576 |                 |  |             | 4,728  |      |  |                   | 54     |             |  |                      |  |             |  |     | 1,576  |           |  |             | 4,782  |             |  |   | 6,358  |  |  |         | 138   |  |  |  | 2000 | (A)
|Canby Square
Canby, OR                            |  |              |       |      |  |                  | 2,503 |                 |  |             | 7,518  |      |  |                   | 59     |             |  |                      |  |             |  |     | 2,503  |           |  |             | 7,577  |             |  |   | 10,080 |  |  |         | 23    |  |  |  | 2001 | (A)
|Canyon Ridge Plaza
Kent, WA                       |  |              |       |      |  |                  | 2,457 |                 |  |             |       |      |  |                   | 8,638  |             |  |                      |  |             |  |     | 2,904  |           |  |             | 8,191  |             |  |   | 11,095 |  |  |         | 1,390 |  |  |  | 1992 | (A)
|                                                  |  |              |        |      |  |                  |       |                 |  |             |        |      |  |                   |        |             |  |                      |   |             |  |     |        |           |  |             |        |             |  |   |        |  |  |         |       |  |  |  | 1995 | (C)
|Canyon Square
          Plaza
Santa Clarita, CA   |  |              |       |      |  |                  | 2,725 |                 |  |             | 8,338  |      |  |                   | 102    |             |  |                      |  |             |  |     | 2,725  |           |  |             | 8,440  |             |  |   | 11,165 |  |  |         | 522   |  |  |  | 1999 | (A)
|Caughlin Ranch
Reno, NV                           |  |              |       |      |  |                  | 2,283 |                 |  |             | 6,852  |      |  |                   | 840    |             |  |                      |  |             |  |     | 2,283  |           |  |             | 7,692  |             |  |   | 9,975  |  |  |         | 194   |  |  |  | 2000 | (A)
|Centennial Plaza
Hartford, CA                     |  |              |       |      |  |                  | 2,761 |                 |  |             | 8,286  |      |  |                   | 13     |             |  |                      |  |             |  |     | 2,761  |           |  |             | 8,299  |             |  |   | 11,060 |  |  |         | 235   |  |  |  | 2000 | (A)
|Century Center
Modesto, CA                        |  |              |       |      |  |                  | 4,780 |                 |  |             | 14,337 |      |  |                   | 57     |             |  |                      |  |             |  |     | 4,780  |           |  |             | 14,394 |             |  |   | 19,174 |  |  |         | 407   |  |  |  | 2000 | (A)
|Cheyenne
          Commons
Las Vegas, NV          |  |              |       |      |  |                  | 8,540 |                 |  |             | 26,810 |      |  |                   | 3,280  |             |  |                      |  |             |  |     | 8,540  |           |  |             | 30,090 |             |  |   | 38,630 |  |  |         | 5,071 |  |  |  | 1995 | (A)
|Chico Crossroads
Chico, CA                        |  |              |       |      |  |                  | 3,600 |                 |  |             | 17,063 |      |  |                   | 24     |             |  |                      |  |             |  |     | 3,600  |           |  |             | 17,087 |             |  |   | 20,687 |  |  |         | 2,083 |  |  |  | 1997 | (A)
|Chino Town Square
Chino, CA                       |  |              | 26,080 |      |  |                  | 8,801 |                 |  |             | 10,297 |      |  |                   | 26,898 |             |  |                      |  |             |  |     | 21,093 |           |  |             | 24,903 |             |  |   | 45,996 |  |  |         | 4,465 |  |  |  | 1992 | (A)
|Claremont Village
Everett, WA                     |  |              |       |      |  |                  | 2,319 |                 |  |             | 6,987  |      |  |                   | 234    |             |  |                      |  |             |  |     | 2,319  |           |  |             | 7,221  |             |  |   | 9,540  |  |  |         | 835   |  |  |  | 1997 | (A)
|Cobblestone
Redding, CA                           |  |              |       |      |  |                  | 1,869 |                 |  |             | 5,609  |      |  |                   | 64     |             |  |                      |  |             |  |     | 1,869  |           |  |             | 5,673  |             |  |   | 7,542  |  |  |         | 166   |  |  |  | 2000 | (A)
|Commonwealth
          Square
Folsom, CA          |  |              |       |      |  |                  | 4,425 |                 |  |             | 13,274 |      |  |                   | 28     |             |  |                      |  |             |  |     | 4,425  |           |  |             | 13,302 |             |  |   | 17,727 |  |  |         | 374   |  |  |  | 2000 | (A)
|Country Club
          Center
Rio Rancho, NM      |  |              | 3,166  |      |  |                  | 566   |                 |  |             | 2,514  |      |  |                   | 917    |             |  |                      |  |             |  |     | 566    |           |  |             | 3,431  |             |  |   | 3,997  |  |  |         | 1,199 |  |  |  | 1992 | (A)
|Country Gables
Granite Bay, CA                    |  |              |       |      |  |                  | 4,621 |                 |  |             | 10,806 |      |  |                   | 87     |             |  |                      |  |             |  |     | 4,621  |           |  |             | 10,893 |             |  |   | 15,514 |  |  |         | 310   |  |  |  | 2000 | (A)
|Creekside Center
Hayward, CA                      |  |              |       |      |  |                  | 1,500 |                 |  |             | 4,500  |      |  |                   | 634    |             |  |                      |  |             |  |     | 1,500  |           |  |             | 5,134  |             |  |   | 6,634  |  |  |         | 464   |  |  |  | 1998 | (A)
|Currier Square
Oroville, CA                       |  |              |       |      |  |                  | 1,591 |                 |  |             | 4,771  |      |  |                   |       |             |  |                      |  |             |  |     | 1,591  |           |  |             | 4,771  |             |  |   | 6,362  |  |  |         | 135   |  |  |  | 2000 | (A)

(Continued)

F-22



---



##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
SCHEDULE III
PROPERTIES AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2001
(In thousands)

|                                                    |  |              |       |      |  |                  |       |                 |  |             |        |      |  |                   |        |             |  |                      |       |             |  |     |       |           |  |             |        |             |  |  |        |  |  |         |       |  |  |  |         |    
|--------------------------------------------------- |  | ------------ | ----- | ---- |  | ---------------- | ----- | --------------- |  | ----------- | ------ | ---- |  | ----------------- | ------ | ----------- |  | -------------------- | ----- | ----------- |  | --- | ----- | --------- |  | ----------- | ------ | ----------- |  |  | ------ |  |  | ------- | ----- |  |  |  | ------- | ---
|                                                    |  |              |       |      |  |                  |       |                 |  |             |        |      |  | Costs Capitalized |        |             |  |                      |       |             |  |     |       |           |  |             |        |             |  |  |        |  |  |        
|                                                    |  |              |       |      |  |                  |       |                 |  |             |        |      |  | Subsequent to     |        |             |  |                      |       |             |  |     |       |           |  |             |        |             |  |  |        |  |  |        
|                                                    |  |              |       |      |  | Initial Costs    |       | Acquisition     |  | Total Costs |        |      |  |                   |        |             |  |                     
|                                                    |  |              |       |      |  |                  |       |                 |  |             |        |      |  |                   |        |             |  |                     
|                                                    |  |              |       |      |  |                  |       |                 |  | Buildings   |        |      |  |                   |        |             |  |                      |       |             |  |     |       | Buildings |  |             |        |             |  |  |        |  |  | Date of
|                                                    |  |              |       |      |  |                  |       |                 |  | and         |        |      |  |                   |        | Carrying    |  |                      |       |             |  | and |       | Total     |  | Accumulated |        | Acquis. (A)
|Description                                         |  | Encumbrances |       | Land |  | Improvements (2) |       | Improvements(2) |  | Costs       |        | Land |  | Improvements      |        | (1) (2) (3) |  | Depreciation (2) (3) |       | Constr. (C)
|                                                    |  |              |       |      |  |                  |       |                 |  |             |        |      |  |                   |        |             |  |                      |       |            
|PROPERTIES:                                         |  |              |       |      |  |                  |       |                 |  |             |        |      |  |                   |        |             |  |                      |       |             |  |     |       |           |  |             |        |             |  |  |        |  |  |         |       |  |  |  |         |    
|Dodge Center
Fallon, NV                             |  |              |      |      |  |                  | 422   |                 |  |             | 1,267  |      |  |                   |       |             |  |                      |      |             |  |     | 422   |           |  |             | 1,267  |             |  |  | 1,689  |  |  |         | 36    |  |  |  | 2000    | (A)
|Dublin Retail Center
Dublin, CA                     |  |              |      |      |  |                  | 4,053 |                 |  |             | 12,159 |      |  |                   | 216    |             |  |                      |      |             |  |     | 4,053 |           |  |             | 12,375 |             |  |  | 16,428 |  |  |         | 29    |  |  |  | 2000    | (A)
|Eagle Station
Carson City, NV                       |  |              |      |      |  |                  | 2,455 |                 |  |             | 7,363  |      |  |                   | 33     |             |  |                      |      |             |  |     | 2,455 |           |  |             | 7,396  |             |  |  | 9,851  |  |  |         | 212   |  |  |  | 2000    | (A)
|East Burnside
Portland, OR                          |  |              |      |      |  |                  | 1,583 |                 |  |             | 3,691  |      |  |                   | 114    |             |  |                      |      |             |  |     | 1,583 |           |  |             | 3,805  |             |  |  | 5,388  |  |  |         | 117   |  |  |  | 2000    | (A)
|Eastridge Plaza
Porterville, CA                     |  |              |      |      |  |                  | 1,170 |                 |  |             | 3,513  |      |  |                   | 4      |             |  |                      |      |             |  |     | 1,170 |           |  |             | 3,517  |             |  |  | 4,687  |  |  |         | 98    |  |  |  | 2000    | (A)
|Elko Junction
Elko, NV                              |  |              |      |      |  |                  | 3,274 |                 |  |             | 9,822  |      |  |                   | 43     |             |  |                      |      |             |  |     | 3,274 |           |  |             | 9,865  |             |  |  | 13,139 |  |  |         | 280   |  |  |  | 2000    | (A)
|Elverta Crossing
Sacramento, CA                     |  |              |      |      |  |                  | 3,080 |                 |  |             | 9,236  |      |  |                   | 107    |             |  |                      |      |             |  |     | 3,080 |           |  |             | 9,343  |             |  |  | 12,423 |  |  |         | 270   |  |  |  | 2000    | (A)
|Encinitas Marketplace
Encinitas, CA                 |  |              |      |      |  |                  | 3,529 |                 |  |             | 8,385  |      |  |                   | 342    |             |  |                      |      |             |  |     | 3,529 |           |  |             | 8,727  |             |  |  | 12,256 |  |  |         | 372   |  |  |  | 2000    | (A)
|Fairmont Shopping
          Center
Fairmont, CA     |  |              |      |      |  |                  | 3,420 |                 |  |             | 8,003  |      |  |                   | 355    |             |  |                      |      |             |  |     | 3,420 |           |  |             | 8,358  |             |  |  | 11,778 |  |  |         | 1,062 |  |  |  | 1997    | (A)
|Fashion Faire
San Leandro, CA                       |  |              |      |      |  |                  | 2,862 |                 |  |             | 8,588  |      |  |                   | 242    |             |  |                      |      |             |  |     | 2,862 |           |  |             | 8,830  |             |  |  | 11,692 |  |  |         | 817   |  |  |  | 1998    | (A)
|Foster Square
Portland, OR                          |  |              |      |      |  |                  | 348   |                 |  |             | 811    |      |  |                   | 427    |             |  |                      |      |             |  |     | 348   |           |  |             | 1,238  |             |  |  | 1,586  |  |  |         | 65    |  |  |  | 2000    | (A)
|Garrison Square
Vancouver, WA                       |  |              |      |      |  |                  | 1,487 |                 |  |             | 4,466  |      |  |                   | 36     |             |  |                      |      |             |  |     | 1,487 |           |  |             | 4,502  |             |  |  | 5,989  |  |  |         | 27    |  |  |  | 2001    | (A)
|Gateway Shopping
          Center
Mill Creek, WA    |  |              |      |      |  |                  | 3,937 |                 |  |             | 12,044 |      |  |                   | 33     |             |  |                      |      |             |  |     | 3,937 |           |  |             | 12,077 |             |  |  | 16,014 |  |  |         | 201   |  |  |  | 2000    | (A)
|Glenbrook Center
Sacramento, CA                     |  |              |      |      |  |                  | 1,538 |                 |  |             | 3,659  |      |  |                   | 94     |             |  |                      |      |             |  |     | 1,538 |           |  |             | 3,753  |             |  |  | 5,291  |  |  |         | 110   |  |  |  | 2000    | (A)
|Glen Cove Center
Vallejo, CA                        |  |              |      |      |  |                  | 1,925 |                 |  |             | 5,775  |      |  |                   | 58     |             |  |                      |      |             |  |     | 1,925 |           |  |             | 5,833  |             |  |  | 7,758  |  |  |         | 471   |  |  |  | 1998    | (A)
|Granary Square
Valencia, CA                         |  |              |      |      |  |                  | 5,479 |                 |  |             | 12,940 |      |  |                   | 121    |             |  |                      |      |             |  |     | 5,479 |           |  |             | 13,061 |             |  |  | 18,540 |  |  |         | 446   |  |  |  | 2000    | (A)
|Green Valley Town
          & Country
Henderson, NV |  |              |      |      |  |                  | 4,096 |                 |  |             | 12,333 |      |  |                   | 115    |             |  |                      |      |             |  |     | 4,096 |           |  |             | 12,448 |             |  |  | 16,544 |  |  |         | 1,390 |  |  |  | 1997    | (A)
|Heritage Park
Suison City, CA                       |  |              |      |      |  |                  | 3,449 |                 |  |             | 10,348 |      |  |                   | 69     |             |  |                      |      |             |  |     | 3,449 |           |  |             | 10,417 |             |  |  | 13,866 |  |  |         | 295   |  |  |  | 2000    | (A)
|Heritage Place
Tulare, CA                           |  |              |      |      |  |                  | 2,098 |                 |  |             | 6,298  |      |  |                   | 29     |             |  |                      |      |             |  |     | 2,098 |           |  |             | 6,327  |             |  |  | 8,425  |  |  |         | 180   |  |  |  | 2000    | (A)
|Hermiston Plaza
Hermiston, OR                       |  |              |      |      |  |                  | 1,930 |                 |  |             | 5,791  |      |  |                   | 1,547  |             |  |                      |      |             |  |     | 1,930 |           |  |             | 7,338  |             |  |  | 9,268  |  |  |         | 625   |  |  |  | 1998    | (A)
|Hood River Center
Hood River, OR                    |  |              |      |      |  |                  | 1,169 |                 |  |             | 3,507  |      |  |                   | 2,695  |             |  |                      |      |             |  |     | 1,169 |           |  |             | 6,202  |             |  |  | 7,371  |  |  |         | 311   |  |  |  | 1998    | (A)
|Kmart Center
Sacramento, CA                         |  |              |      |      |  |                  | 1,130 |                 |  |             | 3,392  |      |  |                   | 121    |             |  |                      |      |             |  |     | 1,130 |           |  |             | 3,513  |             |  |  | 4,643  |  |  |         | 109   |  |  |  | 2000    | (A)
|Laguna 99 Plaza
Elk Grove, CA                       |  |              |      |      |  |                  | 3,244 |                 |  |             | 9,730  |      |  |                   | 7      |             |  |                      |      |             |  |     | 3,244 |           |  |             | 9,737  |             |  |  | 12,981 |  |  |         | 274   |  |  |  | 2000    | (A)
|Laguna Village                                      |  |              |       |      |  |                  |       |                 |  |             |        |      |  |                   |        |             |  |                      |       |             |  |     |       |           |  |             |        |             |  |  |        |  |  |         |       |  |  |  | 1992    | (A)
|Sacramento, CA                                      |  |              |      |      |  |                  | 3,226 |                 |  |             |       |      |  |                   | 15,986 |             |  |                      | 1,644 |             |  |     | 3,448 |           |  |             | 17,408 |             |  |  | 20,856 |  |  |         | 3,219 |  |  |  | 1996/97 | (C)
|Lakewood Shopping
          Center
Lakewood, CA     |  |              |      |      |  |                  | 2,363 |                 |  |             | 7,125  |      |  |                   | 65     |             |  |                      |      |             |  |     | 2,363 |           |  |             | 7,190  |             |  |  | 9,553  |  |  |         | 852   |  |  |  | 1997    | (A)
|Lakewood Village
Windsor, CA                        |  |              | 9,357 |      |  |                  | 5,347 |                 |  |             | 12,476 |      |  |                   | 67     |             |  |                      |      |             |  |     | 5,347 |           |  |             | 12,543 |             |  |  | 17,890 |  |  |         | 355   |  |  |  | 2000    | (A)
|Laurentian Center
Ontario, CA                       |  |              | 4,334 |      |  |                  | 2,767 |                 |  |             | 6,445  |      |  |                   | (390   | )           |  |                      |      |             |  |     | 2,767 |           |  |             | 6,055  |             |  |  | 8,822  |  |  |         | 851   |  |  |  | 1994/96 | (A)

(Continued)

F-23



---



##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
SCHEDULE III
PROPERTIES AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2001
(In thousands)

|                                                       |  |              |        |      |  |                  |       |                 |  |             |        |      |  |                   |       |             |  |                      |    |             |  |     |       |           |  |             |        |             |  |  |        |  |  |         |       |  |  |  |      |    
|------------------------------------------------------ |  | ------------ | ------ | ---- |  | ---------------- | ----- | --------------- |  | ----------- | ------ | ---- |  | ----------------- | ----- | ----------- |  | -------------------- | -- | ----------- |  | --- | ----- | --------- |  | ----------- | ------ | ----------- |  |  | ------ |  |  | ------- | ----- |  |  |  | ---- | ---
|                                                       |  |              |        |      |  |                  |       |                 |  |             |        |      |  | Costs Capitalized |       |             |  |                      |    |             |  |     |       |           |  |             |        |             |  |  |        |  |  |        
|                                                       |  |              |        |      |  |                  |       |                 |  |             |        |      |  | Subsequent to     |       |             |  |                      |    |             |  |     |       |           |  |             |        |             |  |  |        |  |  |        
|                                                       |  |              |        |      |  | Initial Costs    |       | Acquisition     |  | Total Costs |        |      |  |                   |       |             |  |                     
|                                                       |  |              |        |      |  |                  |       |                 |  |             |        |      |  |                   |       |             |  |                     
|                                                       |  |              |        |      |  |                  |       |                 |  | Buildings   |        |      |  |                   |       |             |  |                      |    |             |  |     |       | Buildings |  |             |        |             |  |  |        |  |  | Date of
|                                                       |  |              |        |      |  |                  |       |                 |  | and         |        |      |  |                   |       | Carrying    |  |                      |    |             |  | and |       | Total     |  | Accumulated |        | Acquis. (A)
|Description                                            |  | Encumbrances |        | Land |  | Improvements (2) |       | Improvements(2) |  | Costs       |        | Land |  | Improvements      |       | (1) (2) (3) |  | Depreciation (2) (3) |    | Constr. (C)
|                                                       |  |              |        |      |  |                  |       |                 |  |             |        |      |  |                   |       |             |  |                      |    |            
|PROPERTIES:                                            |  |              |        |      |  |                  |       |                 |  |             |        |      |  |                   |       |             |  |                      |    |             |  |     |       |           |  |             |        |             |  |  |        |  |  |         |       |  |  |  |      |    
|Manteca Marketplace
Manteca, CA                        |  |              |       |      |  |                  | 3,904 |                 |  |             | 11,713 |      |  |                   | 620   |             |  |                      |   |             |  |     | 3,904 |           |  |             | 12,333 |             |  |  | 16,237 |  |  |         | 1,293 |  |  |  | 1998 | (A)
|Marina Village
Huntington Beach, CA                    |  |              |       |      |  |                  | 3,531 |                 |  |             | 10,933 |      |  |                   | 247   |             |  |                      |   |             |  |     | 3,531 |           |  |             | 11,180 |             |  |  | 14,711 |  |  |         | 779   |  |  |  | 1999 | (A)
|Maysville Marketsquare
Maysville, KY                   |  |              | 5,181  |      |  |                  | 3,454 |                 |  |             | 2,001  |      |  |                   | 3,731 |             |  |                      | 79 |             |  |     | 3,299 |           |  |             | 5,966  |             |  |  | 9,265  |  |  |         | 1,470 |  |  |  | 1992 | (A)
|                                                       |  |              |        |      |  |                  |       |                 |  |             |        |      |  |                   |       |             |  |                      |    |             |  |     |       |           |  |             |        |             |  |  |        |  |  |         |       |  |  |  | 1993 | (C)
|Melrose Village
Vista, CA                              |  |              | 8,937  |      |  |                  | 5,125 |                 |  |             | 11,621 |      |  |                   | 27    |             |  |                      |   |             |  |     | 5,125 |           |  |             | 11,648 |             |  |  | 16,773 |  |  |         | 2,771 |  |  |  | 1999 | (A)
|Memphis Retail Center
Memphis, TN                      |  |              |       |      |  |                  | 1,204 |                 |  |             | 3,780  |      |  |                   | (28   | )           |  |                      |   |             |  |     | 1,204 |           |  |             | 3,752  |             |  |  | 4,956  |  |  |         | 893   |  |  |  | 1992 | (A)
|Menlo Park
Portland, OR                                |  |              |       |      |  |                  | 3,056 |                 |  |             | 7,231  |      |  |                   | 1,050 |             |  |                      |   |             |  |     | 3,056 |           |  |             | 8,281  |             |  |  | 11,337 |  |  |         | 224   |  |  |  | 2000 | (A)
|Milwaukie Marketplace
Milwaukie, OR                    |  |              |       |      |  |                  | 3,184 |                 |  |             | 9,551  |      |  |                   | 544   |             |  |                      |   |             |  |     | 3,184 |           |  |             | 10,095 |             |  |  | 13,279 |  |  |         | 1,071 |  |  |  | 1998 | (A)
|Mira Loma Shopping
          Center
Reno, NV           |  |              |       |      |  |                  | 1,925 |                 |  |             | 5,775  |      |  |                   | 289   |             |  |                      |   |             |  |     | 1,925 |           |  |             | 6,064  |             |  |  | 7,989  |  |  |         | 507   |  |  |  | 1998 | (A)
|Mission Ridge Plaza
Manteca, CA                        |  |              |       |      |  |                  | 2,880 |                 |  |             | 8,640  |      |  |                   | 1     |             |  |                      |   |             |  |     | 2,880 |           |  |             | 8,641  |             |  |  | 11,521 |  |  |         | 243   |  |  |  | 2000 | (A)
|Monterey Plaza
San Jose, CA                            |  |              | 16,955 |      |  |                  | 7,688 |                 |  |             | 18,761 |      |  |                   | 485   |             |  |                      |   |             |  |     | 7,702 |           |  |             | 19,232 |             |  |  | 26,934 |  |  |         | 2,397 |  |  |  | 1997 | (A)
|North Hills
Reno, NV                                   |  |              |       |      |  |                  | 2,500 |                 |  |             |       |      |  |                   |      |             |  |                      |   |             |  |     | 2,500 |           |  |             |       |             |  |  | 2,500  |  |  |         |      |  |  |  | 2000 | (A)
|Northridge Plaza
Fair Oaks, CA                         |  |              |       |      |  |                  | 1,658 |                 |  |             | 4,977  |      |  |                   | 48    |             |  |                      |   |             |  |     | 1,658 |           |  |             | 5,025  |             |  |  | 6,683  |  |  |         | 146   |  |  |  | 2000 | (A)
|Olympia Square
Olympia, WA                             |  |              | 13,625 |      |  |                  | 3,737 |                 |  |             | 11,580 |      |  |                   | 1,032 |             |  |                      |   |             |  |     | 3,737 |           |  |             | 12,612 |             |  |  | 16,349 |  |  |         | 3,939 |  |  |  | 1992 | (A)
|Olympia West Center
Olympia, WA                        |  |              | 1,988  |      |  |                  | 2,736 |                 |  |             | 8,295  |      |  |                   | 142   |             |  |                      |   |             |  |     | 2,736 |           |  |             | 8,437  |             |  |  | 11,173 |  |  |         | 957   |  |  |  | 1997 | (A)
|Olympic Place
Walnut Creek, CA                         |  |              |       |      |  |                  | 9,681 |                 |  |             | 9,427  |      |  |                   |      |             |  |                      |   |             |  |     | 9,681 |           |  |             | 9,427  |             |  |  | 19,108 |  |  |         |      |  |  |  | 2000 | (A)
|Oregon City Shopping
          Center
Oregon City, OR  |  |              | 9,817  |      |  |                  | 4,426 |                 |  |             | 13,272 |      |  |                   | 2,210 |             |  |                      |   |             |  |     | 4,426 |           |  |             | 15,482 |             |  |  | 19,908 |  |  |         | 1,145 |  |  |  | 1998 | (A)
|Oregon Trail
Gresham, OR                               |  |              |       |      |  |                  | 3,593 |                 |  |             | 10,779 |      |  |                   | 3,387 |             |  |                      |   |             |  |     | 3,593 |           |  |             | 14,166 |             |  |  | 17,759 |  |  |         | 1,284 |  |  |  | 1998 | (A)
|Pacific Commons
          Shopping Center
Spanaway, WA |  |              |       |      |  |                  | 3,419 |                 |  |             | 10,256 |      |  |                   | 88    |             |  |                      |   |             |  |     | 3,419 |           |  |             | 10,344 |             |  |  | 13,763 |  |  |         | 915   |  |  |  | 1998 | (A)
|Palmdale Center
Palmdale, CA                           |  |              |       |      |  |                  | 1,150 |                 |  |             | 3,454  |      |  |                   | 244   |             |  |                      |   |             |  |     | 1,150 |           |  |             | 3,698  |             |  |  | 4,848  |  |  |         | 398   |  |  |  | 1997 | (A)
|Panther Lake
          Shopping Center
Kent, WA        |  |              |       |      |  |                  | 1,950 |                 |  |             | 5,850  |      |  |                   | 278   |             |  |                      |   |             |  |     | 1,950 |           |  |             | 6,128  |             |  |  | 8,078  |  |  |         | 635   |  |  |  | 1998 | (A)
|Park Place
Vallejo, CA                                 |  |              |       |      |  |                  | 4,020 |                 |  |             | 9,381  |      |  |                   | 2     |             |  |                      |   |             |  |     | 4,020 |           |  |             | 9,383  |             |  |  | 13,403 |  |  |         | 263   |  |  |  | 2000 | (A)
|Pine Creek
          Shopping Center
Grass Valley, CA  |  |              |       |      |  |                  | 5,000 |                 |  |             | 15,000 |      |  |                   | 153   |             |  |                      |   |             |  |     | 5,000 |           |  |             | 15,153 |             |  |  | 20,153 |  |  |         | 440   |  |  |  | 2000 | (A)
|Pioneer Plaza
Springfield, OR                          |  |              |       |      |  |                  | 1,864 |                 |  |             | 5,591  |      |  |                   | 143   |             |  |                      |   |             |  |     | 1,864 |           |  |             | 5,734  |             |  |  | 7,598  |  |  |         | 577   |  |  |  | 1998 | (A)
|Plaza 580
Livermore, CA                                |  |              |       |      |  |                  | 4,010 |                 |  |             | 12,031 |      |  |                   | 52    |             |  |                      |   |             |  |     | 4,010 |           |  |             | 12,083 |             |  |  | 16,093 |  |  |         | 338   |  |  |  | 2000 | (A)
|Powell Valley
          Junction
Gresham, OR           |  |              |       |      |  |                  | 1,546 |                 |  |             | 4,639  |      |  |                   | 1,094 |             |  |                      |   |             |  |     | 1,546 |           |  |             | 5,733  |             |  |  | 7,279  |  |  |         | 506   |  |  |  | 1998 | (A)
|Powell Villa
Portland, OR                              |  |              |       |      |  |                  | 850   |                 |  |             | 2,553  |      |  |                   | 2     |             |  |                      |   |             |  |     | 850   |           |  |             | 2,555  |             |  |  | 3,405  |  |  |         | 15    |  |  |  | 2001 | (A)
|Rainbow Promenade
Las Vegas, NV                        |  |              | 19,246 |      |  |                  | 9,390 |                 |  |             | 21,774 |      |  |                   | 262   |             |  |                      |   |             |  |     | 9,381 |           |  |             | 22,045 |             |  |  | 31,426 |  |  |         | 2,384 |  |  |  | 1997 | (A)

(Continued)

F-24



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##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
SCHEDULE III
PROPERTIES AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2001
(In thousands)

|                                                       |  |              |        |      |  |                  |        |                 |  |             |        |      |  |                   |       |             |  |                      |   |             |  |     |        |           |  |             |        |             |  |  |        |  |  |         |       |  |  |  |      |    
|------------------------------------------------------ |  | ------------ | ------ | ---- |  | ---------------- | ------ | --------------- |  | ----------- | ------ | ---- |  | ----------------- | ----- | ----------- |  | -------------------- | - | ----------- |  | --- | ------ | --------- |  | ----------- | ------ | ----------- |  |  | ------ |  |  | ------- | ----- |  |  |  | ---- | ---
|                                                       |  |              |        |      |  |                  |        |                 |  |             |        |      |  | Costs Capitalized |       |             |  |                      |   |             |  |     |        |           |  |             |        |             |  |  |        |  |  |        
|                                                       |  |              |        |      |  |                  |        |                 |  |             |        |      |  | Subsequent to     |       |             |  |                      |   |             |  |     |        |           |  |             |        |             |  |  |        |  |  |        
|                                                       |  |              |        |      |  | Initial Costs    |        | Acquisition     |  | Total Costs |        |      |  |                   |       |             |  |                     
|                                                       |  |              |        |      |  |                  |        |                 |  |             |        |      |  |                   |       |             |  |                     
|                                                       |  |              |        |      |  |                  |        |                 |  | Buildings   |        |      |  |                   |       |             |  |                      |   |             |  |     |        | Buildings |  |             |        |             |  |  |        |  |  | Date of
|                                                       |  |              |        |      |  |                  |        |                 |  | and         |        |      |  |                   |       | Carrying    |  |                      |   |             |  | and |        | Total     |  | Accumulated |        | Acquis. (A)
|Description                                            |  | Encumbrances |        | Land |  | Improvements (2) |        | Improvements(2) |  | Costs       |        | Land |  | Improvements      |       | (1) (2) (3) |  | Depreciation (2) (3) |   | Constr. (C)
|                                                       |  |              |        |      |  |                  |        |                 |  |             |        |      |  |                   |       |             |  |                      |   |            
|PROPERTIES:                                            |  |              |        |      |  |                  |        |                 |  |             |        |      |  |                   |       |             |  |                      |   |             |  |     |        |           |  |             |        |             |  |  |        |  |  |         |       |  |  |  |      |    
|Raleigh Hills
Raleigh Hills, OR                        |  |              |       |      |  |                  | 1,774  |                 |  |             | 5,376  |      |  |                   | 3     |             |  |                      |  |             |  |     | 1,774  |           |  |             | 5,379  |             |  |  | 7,153  |  |  |         | 150   |  |  |  | 2000 | (A)
|Raleys
Fallon, NV                                     |  |              |       |      |  |                  | 848    |                 |  |             | 2,546  |      |  |                   |      |             |  |                      |  |             |  |     | 848    |           |  |             | 2,546  |             |  |  | 3,394  |  |  |         | 72    |  |  |  | 2000 | (A)
|Raleys Shopping
          Center
Yuba City, CA        |  |              |       |      |  |                  | 2,107  |                 |  |             | 6,321  |      |  |                   | 4     |             |  |                      |  |             |  |     | 2,107  |           |  |             | 6,325  |             |  |  | 8,432  |  |  |         | 178   |  |  |  | 2000 | (A)
|Rancho Las Palmas
Rancho Mirage, CA                    |  |              | 12,230 |      |  |                  | 5,025  |                 |  |             | 15,235 |      |  |                   | 836   |             |  |                      |  |             |  |     | 5,025  |           |  |             | 16,071 |             |  |  | 21,096 |  |  |         | 893   |  |  |  | 1999 | (A)
|Rockwood Plaza
Gresham, OR                             |  |              |       |      |  |                  | 1,179  |                 |  |             | 3,537  |      |  |                   | 831   |             |  |                      |  |             |  |     | 1,179  |           |  |             | 4,368  |             |  |  | 5,547  |  |  |         | 129   |  |  |  | 2000 | (A)
|Sahara Pavilion
          North
Las Vegas, NV          |  |              | 30,032 |      |  |                  | 11,920 |                 |  |             | 28,560 |      |  |                   | 857   |             |  |                      |  |             |  |     | 11,920 |           |  |             | 29,417 |             |  |  | 41,337 |  |  |         | 7,856 |  |  |  | 1992 | (A)
|Sahara Pavilion
          South
Las Vegas, NV          |  |              |       |      |  |                  | 4,833  |                 |  |             | 12,988 |      |  |                   | 1,157 |             |  |                      |  |             |  |     | 4,833  |           |  |             | 14,145 |             |  |  | 18,978 |  |  |         | 4,030 |  |  |  | 1992 | (A)
|San Dimas
          Market Place
San Dimas, CA         |  |              | 14,434 |      |  |                  | 5,699  |                 |  |             | 17,100 |      |  |                   | 214   |             |  |                      |  |             |  |     | 5,699  |           |  |             | 17,314 |             |  |  | 23,013 |  |  |         | 1,732 |  |  |  | 1998 | (A)
|Sandy Marketplace
Sandy, OR                            |  |              | 4,558  |      |  |                  | 2,046  |                 |  |             | 6,064  |      |  |                   | 448   |             |  |                      |  |             |  |     | 2,046  |           |  |             | 6,512  |             |  |  | 8,558  |  |  |         | 532   |  |  |  | 1998 | (A)
|Shops at Lincoln
          School
Modesto, CA          |  |              |       |      |  |                  | 1,672  |                 |  |             | 5,067  |      |  |                   | 4     |             |  |                      |  |             |  |     | 1,672  |           |  |             | 5,071  |             |  |  | 6,743  |  |  |         | 285   |  |  |  | 1999 | (A)
|Shute Park Plaza
Hillsboro, OR                         |  |              |       |      |  |                  | 994    |                 |  |             | 2,981  |      |  |                   | 222   |             |  |                      |  |             |  |     | 994    |           |  |             | 3,203  |             |  |  | 4,197  |  |  |         | 345   |  |  |  | 1998 | (A)
|Sky Park Plaza
Chico, CA                               |  |              |       |      |  |                  | 3,566  |                 |  |             | 10,700 |      |  |                   | 2     |             |  |                      |  |             |  |     | 3,566  |           |  |             | 10,702 |             |  |  | 14,268 |  |  |         | 302   |  |  |  | 2000 | (A)
|Southgate Center
Milwaukie, OR                         |  |              | 3,155  |      |  |                  | 1,423  |                 |  |             | 4,268  |      |  |                   | 497   |             |  |                      |  |             |  |     | 1,423  |           |  |             | 4,765  |             |  |  | 6,188  |  |  |         | 368   |  |  |  | 1998 | (A)
|St. Johns
Portland, OR                                |  |              |       |      |  |                  | 2,005  |                 |  |             | 2,005  |      |  |                   | 127   |             |  |                      |  |             |  |     | 2,005  |           |  |             | 2,132  |             |  |  | 4,137  |  |  |         | 57    |  |  |  | 2000 | (A)
|Sunset Mall
Portland, OR                               |  |              | 7,608  |      |  |                  | 2,996  |                 |  |             | 8,989  |      |  |                   | 114   |             |  |                      |  |             |  |     | 2,982  |           |  |             | 9,117  |             |  |  | 12,099 |  |  |         | 723   |  |  |  | 1998 | (A)
|Sunset Square
Bellingham, WA                           |  |              |       |      |  |                  | 6,100  |                 |  |             | 18,647 |      |  |                   | 2,393 |             |  |                      |  |             |  |     | 6,100  |           |  |             | 21,040 |             |  |  | 27,140 |  |  |         | 6,093 |  |  |  | 1992 | (A)
|Sycamore Plaza
Anaheim, CA                             |  |              |       |      |  |                  | 1,856  |                 |  |             | 5,601  |      |  |                   | 59    |             |  |                      |  |             |  |     | 1,856  |           |  |             | 5,660  |             |  |  | 7,516  |  |  |         | 193   |  |  |  | 2000 | (A)
|Tacoma Central
Tacoma, WA                              |  |              | 9,779  |      |  |                  | 5,314  |                 |  |             | 16,288 |      |  |                   | 439   |             |  |                      |  |             |  |     | 5,314  |           |  |             | 16,727 |             |  |  | 22,041 |  |  |         | 1,763 |  |  |  | 1997 | (A)
|Tacoma Shopping
          Center
Portland, OR          |  |              |       |      |  |                  | 838    |                 |  |             | 1,955  |      |  |                   | 3     |             |  |                      |  |             |  |     | 838    |           |  |             | 1,958  |             |  |  | 2,796  |  |  |         | 55    |  |  |  | 2000 | (A)
|Tanasbourne
          Village
Hillsboro, OR            |  |              | 18,262 |      |  |                  | 5,573  |                 |  |             | 13,861 |      |  |                   | 1,219 |             |  |                      |  |             |  |     | 5,573  |           |  |             | 15,080 |             |  |  | 20,653 |  |  |         | 3,918 |  |  |  | 1992 | (A)
|Tustin Heights
Tustin, CA                              |  |              | 10,391 |      |  |                  | 3,675  |                 |  |             | 10,776 |      |  |                   | 465   |             |  |                      |  |             |  |     | 3,675  |           |  |             | 11,241 |             |  |  | 14,916 |  |  |         | 1,203 |  |  |  | 1997 | (A)
|Ukiah Crossroads
Ukiah, CA                             |  |              |       |      |  |                  | 1,869  |                 |  |             | 5,609  |      |  |                   |      |             |  |                      |  |             |  |     | 1,869  |           |  |             | 5,609  |             |  |  | 7,478  |  |  |         | 157   |  |  |  | 2000 | (A)
|Victorian Walk
Fresno, CA                              |  |              |       |      |  |                  | 1,676  |                 |  |             | 5,025  |      |  |                   |      |             |  |                      |  |             |  |     | 1,676  |           |  |             | 5,025  |             |  |  | 6,701  |  |  |         | 142   |  |  |  | 2000 | (A)
|Vineyard Village
          East
Ontario, CA            |  |              |       |      |  |                  | 649    |                 |  |             | 2,716  |      |  |                   | 137   |             |  |                      |  |             |  |     | 649    |           |  |             | 2,853  |             |  |  | 3,502  |  |  |         | 625   |  |  |  | 1994 | (A)
|West Town
Winnemucca, NV                               |  |              |       |      |  |                  | 1,085  |                 |  |             | 3,258  |      |  |                   |      |             |  |                      |  |             |  |     | 1,085  |           |  |             | 3,258  |             |  |  | 4,343  |  |  |         | 92    |  |  |  | 2000 | (A)
|Westwood Village
          Shopping Center
Redding, CA |  |              |       |      |  |                  | 1,131  |                 |  |             | 3,393  |      |  |                   | 441   |             |  |                      |  |             |  |     | 1,131  |           |  |             | 3,834  |             |  |  | 4,965  |  |  |         | 458   |  |  |  | 1998 | (A)
|Winterwood
          Pavilion
Las Vegas, NV            |  |              |       |      |  |                  | 4,573  |                 |  |             | 13,015 |      |  |                   | 1,736 |             |  |                      |  |             |  |     | 4,573  |           |  |             | 14,751 |             |  |  | 19,324 |  |  |         | 4,507 |  |  |  | 1992 | (A)

(Continued)

F-25



---



##### Table of Contents



PAN PACIFIC RETAIL PROPERTIES, INC.
SCHEDULE III
PROPERTIES AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2001
(In thousands)

|                         |  |              |         |      |  |                  |         |                 |  |             |         |      |  |                   |        |             |  |                      |       |             |  |     |         |           |  |             |         |             |  |   |           |  |  |         |        |  |  |  |      |    
|------------------------ |  | ------------ | ------- | ---- |  | ---------------- | ------- | --------------- |  | ----------- | ------- | ---- |  | ----------------- | ------ | ----------- |  | -------------------- | ----- | ----------- |  | --- | ------- | --------- |  | ----------- | ------- | ----------- |  | - | --------- |  |  | ------- | ------ |  |  |  | ---- | ---
|                         |  |              |         |      |  |                  |         |                 |  |             |         |      |  | Costs Capitalized |        |             |  |                      |       |             |  |     |         |           |  |             |         |             |  |   |           |  |  |        
|                         |  |              |         |      |  |                  |         |                 |  |             |         |      |  | Subsequent to     |        |             |  |                      |       |             |  |     |         |           |  |             |         |             |  |   |           |  |  |        
|                         |  |              |         |      |  | Initial Costs    |         | Acquisition     |  | Total Costs |         |      |  |                   |        |             |  |                     
|                         |  |              |         |      |  |                  |         |                 |  |             |         |      |  |                   |        |             |  |                     
|                         |  |              |         |      |  |                  |         |                 |  | Buildings   |         |      |  |                   |        |             |  |                      |       |             |  |     |         | Buildings |  |             |         |             |  |   |           |  |  | Date of
|                         |  |              |         |      |  |                  |         |                 |  | and         |         |      |  |                   |        | Carrying    |  |                      |       |             |  | and |         | Total     |  | Accumulated |         | Acquis. (A)
|Description              |  | Encumbrances |         | Land |  | Improvements (2) |         | Improvements(2) |  | Costs       |         | Land |  | Improvements      |        | (1) (2) (3) |  | Depreciation (2) (3) |       | Constr. (C)
|                         |  |              |         |      |  |                  |         |                 |  |             |         |      |  |                   |        |             |  |                      |       |            
|PROPERTIES:              |  |              |         |      |  |                  |         |                 |  |             |         |      |  |                   |        |             |  |                      |       |             |  |     |         |           |  |             |         |             |  |   |           |  |  |         |        |  |  |  |      |    
|Yreka Junction
Yreka, CA |  |              |        |      |  |                  | 2,436   |                 |  |             | 7,304   |      |  |                   | 7      |             |  |                      |      |             |  |     | 2,436   |           |  |             | 7,311   |             |  |   | 9,747     |  |  |         | 208    |  |  |  | 2000 | (A)
|                         |  |              |         |      |  |                  |         |                 |  |             |         |      |  |                   |        |             |  |                      |       |             |  |     |         |           |  |             |         |             |  |   |           |  |  |         |        |  |  |  |      |    
|                         |  | $            | 229,135 |      |  | $                | 336,897 |                 |  | $           | 894,906 |      |  | $                 | 98,425 |             |  | $                    | 1,723 |             |  | $   | 349,694 |           |  | $           | 982,257 |             |  | $ | 1,331,951 |  |  | $       | 98,762 |  |  |  |      |    
|                         |  |              |         |      |  |                  |         |                 |  |             |         |      |  |                   |        |             |  |                      |       |             |  |     |         |           |  |             |         |             |  |   |           |  |  |         |        |  |  |  |      |    

Notes:



|(1) |  | The aggregate gross cost of the properties owned by Pan Pacific Retail
Properties, Inc. for federal income tax purposes, approximated $1,274,376
as of December 31, 2001.                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Net of write-offs of fully depreciated assets.                                                                                                                                                 
|   
|(3) |  | The following table reconciles the historical cost and related
accumulated depreciation and amortization of Pan Pacific Retail
Properties, Inc. from January 1, 1999 through December 31, 2001:

|                           |                                                                                                              |      |                                  |         |   |      |           |         |   |   |         |         |  
|-------------------------- | ------------------------------------------------------------------------------------------------------------ | ---- | -------------------------------- | ------- | - | ---- | --------- | ------- | - | - | ------- | ------- | -
|                           |                                                                                                              |      | For the years ended December 31,
|                           |                                                                                                              |      |                                 
|Cost of properties         |                                                                                                              | 2001 |                                  | 2000    |   | 1999
|                           |                                                                                                              |      |                                  |         |   |     
|Balance, beginning of year |                                                                                                              | $    | 1,268,719                        |         |   | $    | 805,086   |         |   | $ | 709,522 |        
|                           | Additions (acquisition, improvements, etc.)                                                                  |      |                                  | 93,180  |   |      |           | 467,848 |   |   |         | 109,613 |  
|                           | Interest capitalized                                                                                         |      |                                  | 1,539   |   |      |           | 202     |   |   |         | 231     |  
|                           | Deductions (write-off of tenant
improvements, cost of real estate sold and
provision for loss on impairment) |      |                                  | (31,487 | ) |      |           | (4,417  | ) |   |         | (14,280 | )
|                           |                                                                                                              |      |                                  |         |   |      |           |         |   |   |         |        
|Balance, end of year       |                                                                                                              | $    | 1,331,951                        |         |   | $    | 1,268,719 |         |   | $ | 805,086 |        
|                           |                                                                                                              |      |                                  |         |   |      |           |         |   |   |         |        

|                                          |                                                                                                        |      |                                  |        |   |      |        |        |   |   |        |        |  
|----------------------------------------- | ------------------------------------------------------------------------------------------------------ | ---- | -------------------------------- | ------ | - | ---- | ------ | ------ | - | - | ------ | ------ | -
|                                          |                                                                                                        |      | For the years ended December 31,
|                                          |                                                                                                        |      |                                 
|Accumulated depreciation and amortization |                                                                                                        | 2001 |                                  | 2000   |   | 1999
|                                          |                                                                                                        |      |                                  |        |   |     
|Balance, beginning of year                |                                                                                                        | $    | 73,895                           |        |   | $    | 57,025 |        |   | $ | 42,044 |       
|                                          | Additions (depreciation and amortization
expense)                                                      |      |                                  | 27,536 |   |      |        | 19,083 |   |   |        | 17,782 |  
|                                          | Deductions (write-off of accumulated depreciation
of tenant improvements and cost of real estate sold) |      |                                  | (2,669 | ) |      |        | (2,213 | ) |   |        | (2,801 | )
|                                          |                                                                                                        |      |                                  |        |   |      |        |        |   |   |        |       
|Balance, end of year                      |                                                                                                        | $    | 98,762                           |        |   | $    | 73,895 |        |   | $ | 57,025 |       
|                                          |                                                                                                        |      |                                  |        |   |      |        |        |   |   |        |       

See accompanying independent auditors report.

F-26



---



##### Table of Contents



EXHIBIT INDEX

|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  | Description                                                                                                                                                                                                                                                                                                                                                                                                    
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|3.1      |  | Articles of Amendment and Restatement of the Company (previously filed
as Exhibit 3.1 to Pan Pacific Retail Properties, Inc.s Registration
Statement on Form S-11 (Registration No. 333-28715) and incorporated
herein by reference)                                                                                                                                                                          
|        
|3.2      |  | Amended and Restated Bylaws of the Company (previously filed as
Exhibit 3.2 to Pan Pacific Retail Properties, Inc.s Registration
Statement on Form S-11 (Registration No. 333-28715) and incorporated
herein by reference)                                                                                                                                                                                    
|        
|4.1      |  | Form of Certificate of Common Stock (previously filed as Exhibit 4.1
to Pan Pacific Retail Properties, Inc.s Registration Statement on
Form S-11 (Registration No. 333- 28715) and incorporated herein by
reference)                                                                                                                                                                                          
|        
|4.2      |  | Form of Indenture relating to the Senior Notes (previously filed as
Exhibit 4.1 to Western Properties Trusts Registration Statement on
Form S-3 (Registration No. 333-32721) and incorporated herein by this
reference)                                                                                                                                                                                       
|        
|4.3      |  | Form of Senior Notes (previously filed as Exhibit 4.1 to Western
Properties Trusts Registration Statement on Form S-3 (Registration
No. 333-32721) and incorporated herein by this reference)                                                                                                                                                                                                                 
|        
|4.4      |  | Form of Supplemental Indenture relating to the 7.1% Senior Notes due
2006 (previously filed as Exhibit 4.5 to Western Properties Trusts
Form 8-K dated September 24, 1997, and incorporated herein by this
reference)                                                                                                                                                                                         
|        
|4.5      |  | Form of Supplemental Indenture relating to the 7.2% Senior Notes due
2008 (previously filed as Exhibit 4.6 to Western Properties Trusts
Form 8-K, dated September 24, 1997, and incorporated herein by this
reference)                                                                                                                                                                                        
|        
|4.6      |  | Form of Supplemental Indenture relating to the 7.3% Senior Notes due
2010 (previously filed as Exhibit 4.7 to Western Properties Trusts
Form 8-K, dated September 24, 1997, and incorporated herein by this
reference)                                                                                                                                                                                        
|        
|4.7      |  | Form of Supplemental Indenture relating to the assumption by Pan
Pacific Retail Properties, Inc. of the Indenture relating to the 7.1%
Senior Notes due 2006, the 7.2% Senior Notes due 2008 and the 7.3%
Senior Notes due 2010 (previously filed as Exhibit 4.7 to Pan Pacific
Retail Properties, Inc.s Registration Statement on Form S-3
(Registration No. 333-51230) and incorporated herein by reference)
|        
|4.8      |  | Form of Indenture relating to the 7.875% Senior Notes due 2004
(previously filed as Exhibit 4.2 to Western Properties Trust
Registration Statement on Form S-3 (Registration No. 333-71270) and
incorporated herein by reference)                                                                                                                                                                              
|        
|4.9      |  | Form of Supplemental Indenture relating to the assumption by Pan
Pacific Retail Properties, Inc. of the Indenture relating to the
7.875% Senior Notes due 2004 (previously filed as Exhibit 4.9 to Pan
Pacific Retail Properties, Inc.s Registration Statement on Form S-3
(Registration No. 333-51230) and incorporated herein by reference)                                                                 
|        
|4.10     |  | Form of Indenture relating to the Notes (previously filed as Exhibit
4.2 to Pan Pacific Retail Properties, Inc.s Form 8-K, filed on April
10, 2001, and incorporated herein by reference)                                                                                                                                                                                                                     



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##### Table of Contents



|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4.11     |  | Form of 7.95% Notes due 2011 (previously filed as Exhibit 4.1 to Pan
Pacific Retail Properties, Inc.s Form 8-K, filed on April 10, 2001,
and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        
|4.12     |  | Minutes of a meeting of the Pricing Committee held on April 6, 2001
designating the terms of 7.95% Notes due 2011 (previously filed as
Exhibit 4.3 to Pan Pacific Retail Properties, Inc.s Form 8-K, filed
on April 10, 2001, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                  
|        
|10.1     |  | The 1997 Stock Option and Incentive Plan of Pan Pacific Retail
Properties, Inc. (previously filed as Exhibit 10.1 to Pan Pacific
Retail Properties, Inc.s Registration Statement on Form S-11
(Registration No. 333-28715) and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                     
|        
|10.2     |  | The 2000 Stock Incentive Plan of Pan Pacific Retail Properties, Inc.
(previously filed as Appendix A to Pan Pacific Retail Properties,
Inc.s Proxy Statement for the 2000 Annual Meeting of Stockholders)                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        
|10.3     |  | Form of Officers and Directors Indemnification Agreement (previously
filed as Exhibit 10.2 to Pan Pacific Retail Properties, Inc.s
Registration Statement on Form S-11 Registration No. 333-28715) and
incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                                             
|        
|10.4     |  | Form of Non-Competition Agreement (previously filed as Exhibit 10.7 to
Pan Pacific Retail Properties, Inc.s Registration Statement on Form
S-11 (Registration No. 333- 28715) and incorporated herein by
reference)                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        
|10.5     |  | Revolving Credit Agreement, dated as of November 13, 2000, by and
among Pan Pacific Retail Properties, Inc., certain subsidiaries of Pan
Pacific Retail Properties, Inc. and Bank of America, N.A., as
Administrative Agent, First Union National Bank, as Syndication Agent,
and U.S. Bank, National Association, as Documentation Agent, Dresdner
Bank AG, New York and Grand Cayman Branches, Guaranty Federal Banks,
F.S.B., as Co- Agent and Wells Fargo Bank, N.A., as Co-Agent
(previously filed as Exhibit 10.9 to Pan Pacific Retail Properties,
Inc.s Registration Statement on Form S-3 (Registration No. 333-51230)
and incorporated herein by reference)
|        
|10.6     |  | Term Credit Agreement, dated as of November 13, 2000, by and among Pan
Pacific Retail Properties, Inc., certain subsidiaries of Pan Pacific
Retail Properties, Inc. and Bank of America, N.A., as Administrative
Agent (previously filed as Exhibit 10.10 to Pan Pacific Retail
Properties, Inc.s Registration Statement on Form S-3 (Registration
No. 333- 51230) and incorporated herein by reference)                                                                                                                                                                                                                                                             
|        
|10.7     |  | Members Interest Purchase Agreement, dated as of August 13, 1999, by
and among Pan Pacific Retail Properties, Inc., Pan Pacific (RLP), Inc.
and Stanley W. Gribble (previously filed as Exhibit 10.15 to Pan
Pacific Retail Properties, Inc.s Registration Statement on Form S-4
(Registration No. 333-45944) and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                 



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##### Table of Contents



|         |  |                                                                                                                                                                                                                                                                                                                                                         
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  | Description                                                                                                                                                                                                                                                                                                                                             
|         |  |                                                                                                                                                                                                                                                                                                                                                         
|10.8     |  | Loan Assumption and Modification Agreement, dated as of September 23,
1999, by and between Pan Pacific Retail Properties, Inc. and La Salle
National Bank (previously filed as Exhibit 10.16 to Pan Pacific Retail
Properties, Inc.s Registration Statement on Form S-4 (Registration
No. 333-45944) and incorporated herein by reference)             
|        
|10.9     |  | Operating Agreement of Pan Pacific (Rancho Las Palmas), LLC, dated as
of September 23, 1999 (previously filed as Exhibit 10.17 to Pan
Pacific Retail Properties, Inc.s Registration Statement on Form S-4
(Registration No. 333-45944) and incorporated herein by reference)                                                                           
|        
|10.10    |  | Contribution Agreement and Escrow Instructions, dated as of August 13,
1999, by and between Pan Pacific Retail Properties, Inc. and Ranch Las
Palmas Center Associates (previously filed as Exhibit 10.18 to Pan
Pacific Retail Properties, Inc.s Registration Statement on Form S-4
(Registration No. 333-45944) and incorporated herein by reference)
|        
|10.11*   |  | Form of Second Amended and Restated Employment Agreement, dated as of
October 29, 2001, between Pan Pacific Retail Properties, Inc. and Mr.
Stuart A. Tanz                                                                                                                                                                                              
|        
|10.12*   |  | Form of Employment Agreement, dated as of October 29, 2001, between
Pan Pacific Retail Properties, Inc. and Mr. Joseph B. Tyson                                                                                                                                                                                                                         
|        
|10.13*   |  | Form of Second Amended and Restated Employment Agreement, dated as of
October 30, 2001, between Pan Pacific Retail Properties, Inc. and Mr.
Jeffrey S. Stauffer                                                                                                                                                                                         
|        
|10.14*   |  | Form of Restricted Stock Agreement between Pan Pacific Retail
Properties, Inc. and each of Messrs. Stuart A. Tanz, Jeffrey S.
Stauffer and Joseph B. Tyson                                                                                                                                                                                              
|        
|21.1*    |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                                                                                                          
|        
|23.1*    |  | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                                                     

* Filed Herewith