**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

*                    (Mark      One)*

|  **Trustreet                Properties, Inc.**                                           |
|-----------------------------------------------------------------------------------------------|
| _____________________________________________________________________________________________ |
| (Exact                name of registrant as specified in its                charter)          |

|  **Maryland**                          |   |  **75-2687420**               |
|---------------------------------------------|--------|------------------------------------|
| (State                or other jurisdiction |   | (IRS                Employer       |
| of                incorporation)            |   | Identification                No.) |

|  **450                South Orange Avenue****Orlando,                Florida** |  **32801**                |
|-------------------------------------------------------------------------------------|--------------------------------|
| _________________________________________                                           | ______________________________ |
| (Address                of principal executive offices)                             | (Zip                Code)      |

**(407)      540-2000**

| _____________________________________________________________________________________________ |
|-----------------------------------------------------------------------------------------------|

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CONTENTS

| Part                I                                                                                                 | Page   |
|-----------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                  |   |
| Item                1. Financial                Statements:                                                      |   |
|                                                                                                                  |   |
| Condensed                Consolidated Balance Sheets                                                                  | 3-4    |
|                                                                                                                  |   |
| Condensed                Consolidated Statements of Income                                                            | 5      |
|                                                                                                                  |   |
| Condensed                Consolidated Statements of                                                                   |   |
| Stockholders’                Equity and Comprehensive Income/(Loss)                                             | 6-7    |
|                                                                                                                  |   |
| Condensed                Consolidated Statements of Cash Flows                                                        | 8-9    |
|                                                                                                                  |   |
| Notes                to Condensed Consolidated Financial                                                              |   |
| Statements                                                                                                            | 10-37  |
|                                                                                                                  |   |
| Item                2. Management’s                Discussion and Analysis of Financial                    |   |
| Condition                and Results of Operations                                                                    | 38-59  |
|                                                                                                                  |   |
| Item                3. Quantitative                and Qualitative Disclosures About                             |   |
| Market                Risk                                                                                            | 59     |
|                                                                                                                  |   |
| Item                4. Controls                and Procedures                                                    | 59-60  |
|                                                                                                                  |   |
| Part                II                                                                                                |   |
|                                                                                                                  |   |
|                               Other Information | 61-64  |

----

|                                                                                                                             |   | September                30, 2005 |      |  December                31, 2004 |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|----------------------------------------|--------|
| ASSETS                                                                                                                           |   |                              |      |                              |   |
|                                                                                                                             |   |                              |      |                                   |   |   |   |
| Real                estate investment properties                                                                                 |   | $                                 | 1,637,117 |                                   | $      | 524,270 |   |
| Net                investment in direct financing leases                                                                         |   |                              | 152,665   |                                   |   | 96,455 |   |
| Real                estate held for sale                                                                                         |   |                              | 239,807   |                                   |   | 160,808 |   |
| Mortgage,                equipment and other notes receivable, net of allowanceof                $6,394 and $7,261, respectively |   |                              | 93,545    |                                   |   | 290,140 |   |
| Other                investments                                                                                                 |   |                              | 17,081    |                                   |   | 16,495 |   |
| Cash                and cash equivalents                                                                                         |   |                              | 27,103    |                                   |   | 22,744 |   |
| Restricted                cash                                                                                                   |   |                              | 28,649    |                                   |   | 7,402 |   |
| Receivables,                less allowance for doubtful accountsof                $2,157 and $2,136, respectively                |   |                              | 7,074     |                                   |   | 7,391 |   |
| Accrued                rental income                                                                                             |   |                              | 33,386    |                                   |   | 27,709 |   |
| Intangible                lease costs                                                                                            |   |                              | 76,445    |                                   |   | — |   |
| Goodwill                                                                                                                         |   |                              | 225,074   |                                   |   | 56,260 |   |
| Other                assets                                                                                                      |   |                              | 51,278    |                                   |   | 33,975 |   |
|                                                                                                                             |   | $                                 | 2,589,224 |                                   | $      | 1,243,649 |   |
|                                                                                                                             |   |                              |      |                                   |   |   |   |
| LIABILITIES                AND STOCKHOLDERS’ EQUITY                                                                        |   |                              |      |                                   |   |   |   |
|                                                                                                                             |   |                              |      |                                   |   |   |   |
| Revolver                                                                                                                         |   | $                                 | 142,000   |                                   | $      | 21,000 |   |
| Notes                payable                                                                                                     |   |                              | 478,930   |                                   |   | 162,810 |   |
| Mortgage                warehouse facilities                                                                                     |   |                              | 139,106   |                                   |   | 101,394 |   |
| Subordinated                note payable                                                                                         |   |                              | —   |                                   |   | 21,875 |   |
| Bonds                payable                                                                                                     |   |                              | 773,069   |                                   |   | 405,421 |   |
| Below                market lease liability, net of accumulated amortization of $2,712                in 2005                    |   |                              | 26,382    |                                   |   | — |   |
| Due                to related parties                                                                                            |   |                              | 346       |                                   |   | 37,172 |   |
| Other                payables                                                                                                    |   |                              | 58,175    |                                   |   | 33,736 |   |
| Total                liabilities                                                                                                 |   | $                                 | 1,618,008 |                                   | $      | 783,408 |   |

----

|                                                                                                                                                                                                                                                                                                                                                         |   | September                30,2005 |      |  December                31,2004 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|-----------|---------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                         |   |                             |      |                                  |   |   |   |
| Minority                interests, including redeemable partnership interest in                2004                                                                                                                                                                                                                                                          |   | $                                | 4,092     |                                  | $      | 6,819 |   |
|                                                                                                                                                                                                                                                                                                                                                         |   |                             |      |                                  |   |   |   |
| Commitments                and contingencies (Note 16)                                                                                                                                                                                                                                                                                                       |   |                             |      |                                  |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                         |   |                             |      |                                  |   |   |   |
| Stockholders’                equity:                                                                                                                                                                                                                                                                                                                   |   |                             |      |                                  |   |   |   |
| Preferred                stock, $0.001 par value per share. 84,500 shares authorized and                unissued                                                                                                                                                                                                                                             |   |                             | —   |                                  |   | — |   |
| Preferred                stock, $0.001 par value per share: Series A Cumulative Convertible                Preferred Stock - 8,000 shares authorized, 7,834 shares issued and                outstanding at September 30, 2005 (aggregate liquidation value of                $195,855)                                                                      |   |                             | 8         |                                  |   | — |   |
| Preferred                stock, $0.001 par value per share: Series C Redeemable                Convertible Preferred Stock - 7,500 shares authorized, 7,244 shares                issued                and outstanding at September 30, 2005 (aggregate liquidation value                of                $181,101)                                        |   |                             | 7         |                                  |   | — |   |
| Excess                shares, $0.001 par value per share. 400,000 shares authorized and                unissued                                                                                                                                                                                                                                              |   |                             | —   |                                  |   | — |   |
| Common                stock, $0.001 par value per share; 300,000 shares authorized,                58,113 and 45,286 shares issued at September 30, 2005 and December                31,                2004, respectively, and 58,094 and 45,249 shares outstanding at                September                30, 2005 and December 31, 2004, respectively |   |                             | 58        |                                  |   | 452 |   |
| Capital                in excess of par value                                                                                                                                                                                                                                                                                                                |   |                             | 1,360,117 |                                  |   | 825,134 |   |
| Accumulated                other comprehensive income (loss)                                                                                                                                                                                                                                                                                                 |   |                             | 3,424     |                                  |   | (12,434 | ) |
| Accumulated                distributions in excess of net income                                                                                                                                                                                                                                                                                             |   |                             | (396,490  | )                                     |   | (359,730 | ) |
| Total                stockholders’ equity                                                                                                                                                                                                                                                                                                              |   |                             | 967,124   |                                  |   | 453,422 |   |
|                                                                                                                                                                                                                                                                                                                                                         |   |                             |      |                                  |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                         |   | $                                | 2,589,224 |                                  | $      | 1,243,649 |   |

----

|                                                                                                                                                                   |   | Quarter                ended |   | Nine                months ended |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|----------------------------------|--------|
|                                                                                                                                                                   |   | September                30, |   | September                30,     |   |
|                                                                                                                                                                   |   | 2005                         |   |  2004                       |   | 2005 |   | 2004 |   |
|                                                                                                                                                                   |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Revenues:                                                                                                                                                              |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                   |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Rental                income from operating leases                                                                                                                     |   | $                            | 42,419 |                             | $      | 14,191 |   | $ | 104,594 |   | $ | 42,132 |   |
| Earned                income from direct financing leases                                                                                                              |   |                         | 2,957  |                             |   | 2,470 |   |   | 8,865 |   |   | 7,479 |   |
| Interest                income from mortgage, equipment andother                notes receivables                                                                      |   |                         | 3,025  |                             |   | 6,635 |   |   | 15,860 |   |   | 19,962 |   |
| Investment                and interest income                                                                                                                          |   |                         | 704    |                             |   | 1,641 |   |   | 1,697 |   |   | 3,811 |   |
| Other                income                                                                                                                                            |   |                         | 1,658  |                             |   | 2,128 |   |   | 4,358 |   |   | 4,633 |   |
|                                                                                                                                                                   |   |                         | 50,763 |                             |   | 27,065 |   |   | 135,374 |   |   | 78,017 |   |
| Expenses:                                                                                                                                                              |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| General                operating and administrative                                                                                                                    |   |                         | 7,308  |                             |   | 6,107 |   |   | 28,240 |   |   | 19,065 |   |
| Interest                expense                                                                                                                                        |   |                         | 24,213 |                             |   | 12,246 |   |   | 65,972 |   |   | 36,070 |   |
| Property                expenses, state and other taxes                                                                                                                |   |                         | 2,242  |                             |   | 47 |   |   | 5,402 |   |   | 384 |   |
| Depreciation                and amortization                                                                                                                           |   |                         | 8,551  |                             |   | 2,976 |   |   | 22,400 |   |   | 8,631 |   |
| Loss                on termination of cash flow hedge                                                                                                                  |   |                         | 8,558  |                             |   | — |   |   | 8,558 |   |   | 940 |   |
| Impairment                provisions on assets                                                                                                                         |   |                         | 622    |                             |   | 1,724 |   |   | 298 |   |   | 2,775 |   |
|                                                                                                                                                                   |   |                         | 51,494 |                             |   | 23,100 |   |   | 130,870 |   |   | 67,865 |   |
| Income/(loss)                from continuing operations before minority interest and equity in                earnings                of unconsolidated joint ventures |   |                         | (731   | )                                |   | 3,965 |   |   | 4,504 |   |   | 10,152 |   |
|                                                                                                                                                                   |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Minority                interest                                                                                                                                       |   |                         | (78    | )                                |   | (640 | ) |   | (1,627 | ) |   | (2,597 | ) |
|                                                                                                                                                                   |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Equity                in earnings of unconsolidated joint ventures                                                                                                     |   |                         | 28     |                             |   | 32 |   |   | 90 |   |   | 97 |   |
|                                                                                                                                                                   |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Income/(loss)                from continuing operations                                                                                                                |   |                         | (781   | )                                |   | 3,357 |   |   | 2,967 |   |   | 7,652 |   |
|                                                                                                                                                                   |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Income                from discontinued operations, after income taxes                                                                                                 |   |                         | 10,025 |                             |   | 11,425 |   |   | 27,853 |   |   | 27,194 |   |
|                                                                                                                                                                   |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Gain                on sale of assets                                                                                                                                  |   |                         | 9,620  |                             |   | 134 |   |   | 9,643 |   |   | 140 |   |
|                                                                                                                                                                   |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                                                              |   |                         | 18,864 |                             |   | 14,916 |   |   | 40,463 |   |   | 34,986 |   |
| Dividends                to preferred stockholders                                                                                                                     |   |                         | (7,176 | )                                |   | — |   |   | (17,275 | ) |   | — |   |
| Net                income allocable to common stockholders                                                                                                             |   | $                            | 11,688 |                             | $      | 14,916 |   | $ | 23,188 |   | $ | 34,986 |   |
|                                                                                                                                                                   |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Basic                and diluted net income per share:                                                                                                                 |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Income/(loss)                from continuing operations allocable to common                stockholders                                                                |   | $                            | 0.03   |                             | $      | 0.10 |   | $ | (0.09 | ) | $ | 0.22 |   |
| Income                from discontinued operations                                                                                                                     |   |                         | 0.17   |                             |   | 0.33 |   |   | 0.53 |   |   | 0.78 |   |
|                                                                                                                                                                   |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Basic                and diluted net income per share                                                                                                                  |   | $                            | 0.20   |                             | $      | 0.43 |   | $ | 0.44 |   | $ | 1.00 |   |
|                                                                                                                                                                   |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Weighted                average number of shares of common stockoutstanding                (Notes 2 and 14):                                                           |   |                         |   |                             |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                                  |   |                         | 57,846 |                             |   | 35,032 |   |   | 53,204 |   |   | 35,032 |   |
| Diluted                                                                                                                                                                |   |                         | 57,857 |                             |   | 35,032 |   |   | 53,204 |   |   | 35,032 |   |

----

|                                                                                                                                                               |   | Preferred                StockSeries                A |    | Preferred                StockSeries                C |   | Common                Stock    |   |     |    |                           |   |  Accumulated                distributions |   | Accumulated                othercompre-                      |    |                                |   | Compre-                                |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|---------|-------------------------------------------------------|--------|--------------------------------|--------|----------|---------|--------------------------------|--------|------------------------------------------------|--------|--------------------------------------------------------------|---------|-------------------------------------|--------|----------------------------------------|--------|
|                                                                                                                                                               |   | Number                ofshares                        |    | Parvalue                                              |   | Number                ofshares |   | Parvalue |    | Number                ofShares |   | Parvalue                                       |   | Capital                  inexcess ofpar                value |    | Loans                toStockholders |   | in                  excessof netincome |   | hensiveincome/(loss) |   |  Total |   | hensiveincome/(loss) |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at December 31, 2004                                                                                                                        |   |                                                  | — |                                                  | $      | —                        |   |     | — |                           | $      | —                                        |   |                                                         | 45,249  |                                | $      | 452                                    |   | $ | 825,134 |   | $ | — |   | $ | (359,730 | ) | $ | (12,434 | ) | $ | 453,422 |   |   |   |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                of USRP Merger:                                                                                                                              |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assumption                of USRP equity                                                                                                                           |   |                                                  | 4,084   |                                                  |   | 4                              |   |     | — |                           |   | —                                        |   |                                                         | 22,599  |                                |   | 23                                     |   |   | 440,483 |   |   | (224 | ) |   | — |   |   | — |   |   | 440,286 |   |   |   |   |
| Conversion                of CNLRP common shares                                                                                                                   |   |                                                  | — |                                                  |   | —                        |   |     | 7,244   |                           |   | 7                                              |   |                                                         | (10,223 | )                                   |   | (417                                   | )      |   | 410 |   |   | — |   |   | — |   |   | — |   |   | — |   |   |   |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Acquisition                of Income Funds                                                                                                                         |   |                                                  | 3,750   |                                                  |   | 4                              |   |     | — |                           |   | —                                        |   |                                                         | — |                                |   | —                                |   |   | 88,231 |   |   | — |   |   | — |   |   | — |   |   | 88,235 |   |   |   |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                                                          |   |                                                  | — |                                                  |   | —                        |   |     | — |                           |   | —                                        |   |                                                         | — |                                |   | —                                |   |   | — |   |   | — |   |   | 40,463 |   |   | — |   |   | 40,463 |   | $ | 40,463 |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                comprehensive income, market revaluation on available for sale                securities                                                      |   |                                                  | — |                                                  |   | —                        |   |     | — |                           |   | —                                        |   |                                                         | — |                                |   | —                                |   |   | — |   |   | — |   |   | — |   |   | 799 |   |   | 799 |   |   | 799 |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification                of cash flow hedge losses to statement of income                                                                                   |   |                                                  | — |                                                  |   | —                        |   |     | — |                           |   | —                                        |   |                                                         |    |                                |   | —                                |   |   | — |   |   | — |   |   | — |   |   | 10,581 |   |   | 10,581 |   |   | 10,581 |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                period adjustment to recognize change in fair value of cash flow                hedges,                inclusive of $1,650 in tax provision |   |                                                  | — |                                                  |   | —                        |   |     | — |                           |   | —                                        |   |                                                         | — |                                |   | —                                |   |   | — |   |   | — |   |   | — |   |   | 4,478 |   |   | 4,478 |   |   | 4,478 |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                comprehensive income                                                                                                                          |   |                                                  | — |                                                  |   | —                        |   |     | — |                           |   | —                                        |   |                                                         | — |                                |   | —                                |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   | $ | 56,321 |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Repayment                by stockholder of loan                                                                                                                    |   |                                                  | — |                                                  |   | —                        |   |     | — |                           |   | —                                        |   |                                                         | — |                                |   | —                                |   |   | — |   |   | 224 |   |   | — |   |   | — |   |   | 224 |   |   |   |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Distributions                declared on common stock                                                                                                              |   |                                                  | — |                                                  |   | —                        |   |     | — |                           |   | —                                        |   |                                                         | — |                                |   | —                                |   |   | — |   |   | — |   |   | (59,948 | ) |   | — |   |   | (59,948 | ) |   |   |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Distributions                declared on preferred stock                                                                                                           |   |                                                  | — |                                                  |   | —                        |   |     | — |                           |   | —                                        |   |                                                         | — |                                |   | —                                |   |   | — |   |   | — |   |   | (17,275 | ) |   | — |   |   | (17,275 | ) |   |   |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of common stock to directors and employees                                                                                                 |   |                                                  | — |                                                  |   | —                        |   |     | — |                           |   | —                                        |   |                                                         | 119     |                                |   | —                                |   |   | 2,053 |   |   | — |   |   | — |   |   | — |   |   | 2,053 |   |   |   |   |
|                                                                                                                                                               |   |                                                  |    |                                                  |   |                           |   |     |    |                           |   |                                           |   |                                                         |    |                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                    |   | Preferred                StockSeries                A |    | Preferred                StockSeries                C |   |  Common                Stock |   |  Capital                in |    |                           |   | Accumulated                distributionsin                excess |   |  Accumulated                othercompre-    |    |                           |   | Compre-hensive              |   |
|-----------------------------------------------------------------------------------------|--------|-------------------------------------------------------|---------|-------------------------------------------------------|--------|-----------------------------------|--------|---------------------------------|---------|--------------------------------|--------|------------------------------------------------------------------|--------|--------------------------------------------------|---------|-------------------------------------|--------|-----------------------------|--------|
|                                                                                    |   | Number                ofshares                        |    | Parvalue                                              |   | Number                ofshares    |   | Parvalue                        |    | Number                ofshares |   | Parvalue                                                         |   | excess                ofpar                value |    | Loans                toStockholders |   | of                netincome |   |  hensiveincome/(loss) |   |  Total |   | income/(loss) |   |
|                                                                                    |   |                                                  |    |                                                  |   |                              |   |                            |    |                           |   |                                                             |   |                                             |    |                                |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of restricted stock to directors and employees                  |   |                                                  | — |                                                  |   | —                           |   |                            | — |                           |   | —                                                          |   |                                             | 138     |                                |   | —                     |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   |   |   |
|                                                                                    |   |                                                  |    |                                                  |   |                              |   |                            |    |                           |   |                                                             |   |                                             |    |                                |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Forfeiture                of restricted stock                                           |   |                                                  | — |                                                  |   | —                           |   |                            | — |                           |   | —                                                          |   |                                             | (18     | )                                   |   | —                     |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   |   |   |
|                                                                                    |   |                                                  |    |                                                  |   |                              |   |                            |    |                           |   |                                                             |   |                                             |    |                                |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                based compensation expense                                         |   |                                                  | — |                                                  |   | —                           |   |                            | — |                           |   | —                                                          |   |                                             | — |                                |   | —                     |   |   | 375 |   |   | — |   |   | — |   |   | — |   |   | 375 |   |   |   |   |
|                                                                                    |   |                                                  |    |                                                  |   |                              |   |                            |    |                           |   |                                                             |   |                                             |    |                                |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds                from exercised stock options                                    |   |                                                  | — |                                                  |   | —                           |   |                            | — |                           |   | —                                                          |   |                                             | 41      |                                |   | —                     |   |   | 563 |   |   | — |   |   | — |   |   | — |   |   | 563 |   |   |   |   |
|                                                                                    |   |                                                  |    |                                                  |   |                              |   |                            |    |                           |   |                                                             |   |                                             |    |                                |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of common stock                                                 |   |                                                  | — |                                                  |   | —                           |   |                            | — |                           |   | —                                                          |   |                                             | 189     |                                |   | —                     |   |   | 3,130 |   |   | — |   |   | — |   |   | — |   |   | 3,130 |   |   |   |   |
|                                                                                    |   |                                                  |    |                                                  |   |                              |   |                            |    |                           |   |                                                             |   |                                             |    |                                |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                issuance costs                                                     |   |                                                  | — |                                                  |   | —                           |   |                            | — |                           |   | —                                                          |   |                                             | — |                                |   |                        |   |   | (262 | ) |   | — |   |   | — |   |   | —  |   |   | (262 | ) |   |   |   |
|                                                                                    |   |                                                  |    |                                                  |   |                              |   |                            |    |                           |   |                                                             |   |                                             |    |                                |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                        Balance at September 30, 2005 |   |                                                  | 7,834   |                                                  | $      | 8                                 |   |                            | 7,244   |                           | $      | 7                                                                |   |                                             | 58,094  |                                | $      | 58                          |   | $ | 1,360,117 |   | $ | — |   | $ | (396,490 | ) | $ | 3,424 |   | $ | 967,124 |   |   |   |   |

----

|                                                                                                           |   | Nine                months endedSeptember                30, |     |
|----------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|----------|
|                                                                                                           |   | 2005                                                         |     | 2004 |   |
| Cash                flows from operating activities:                                                           |   |                                                         |     |   |   |
|                                                                                                           |   |                                                         |     |   |   |   |   |
| Net                income                                                                                      |   | $                                                            | 40,463   |   | $ | 34,986 |   |
| Adjustments                to reconcile net income to net cashprovided                by operating activities: |   |                                                         |     |   |   |   |   |
| Depreciation                and amortization on real estate assets                                             |   |                                                         | 21,773   |   |   | 8,122 |   |
| Depreciation                and amortization on non-real estate assets                                         |   |                                                         | 1,420    |   |   | 1,268 |   |
| Amortization                of above and below market leases                                                   |   |                                                         | 371      |   |   | — |   |
| Amortization                of deferred financing costs                                                        |   |                                                         | 7,439    |   |   | 4,166 |   |
| Provision                for loss on loans                                                                     |   |                                                         | 777      |   |   | — |   |
| Impairments                and provisions on assets                                                            |   |                                                         | 510      |   |   | 4,861 |   |
| Gain                on sales of assets                                                                         |   |                                                         | (13,355  | ) |   | (2,690 | ) |
| Gain                on investment in securities                                                                |   |                                                         | —  |   |   | (495 | ) |
| Loss                on termination of hedge                                                                    |   |                                                         | 8,558    |   |   | — |   |
| Stock                based compensation                                                                        |   |                                                         | 2,427    |   |   | — |   |
| Increase                in income tax payable                                                                  |   |                                                         | 227      |   |   | 5,284 |   |
| Decrease                in deferred tax asset                                                                  |   |                                                         | 613      |   |   | — |   |
| Increase                in accrued rental income                                                               |   |                                                         | (5,895   | ) |   | (2,972 | ) |
| Amortization                of investment in direct financing leases                                           |   |                                                         | 4,006    |   |   | 1,626 |   |
| Changes                in inventories of real estate held for sale                                             |   |                                                         | (34,143  | ) |   | (47,725 | ) |
| Changes                in other operating assets and liabilities                                               |   |                                                         | (1,955   | ) |   | (4,575 | ) |
| Net                cash provided by operating activities                                                       |   |                                                         | 33,236   |   |   | 1,856 |   |
|                                                                                                           |   |                                                         |     |   |   |   |   |
| Cash                flows from investing activities:                                                           |   |                                                         |     |   |   |   |   |
| Additions                to real estate investment properties and intangibles                                  |   |                                                         | (178,319 | ) |   | (13,997 | ) |
| Proceeds                from sale of assets                                                                    |   |                                                         | 228,205  |   |   | 15,826 |   |
| Proceeds                from sale of other investments                                                         |   |                                                         | —  |   |   | 11,200 |   |
| Increase                in restricted cash                                                                     |   |                                                         | (3,159   | ) |   | (180 | ) |
| Acquisition                of Income Funds                                                                     |   |                                                         | (449,997 | ) |   | — |   |
| Cash                acquired through merger                                                                    |   |                                                         | 43,646   |   |   | — |   |
| Payment                of merger costs for USRP reverse merger                                                 |   |                                                         | (14,188  | ) |   | — |   |
| Investment                in mortgage, equipment and other notes receivable                                    |   |                                                         | (2,828   | ) |   | — |   |
| Collection                on mortgage, equipment and other notes receivable                                    |   |                                                         | 20,208   |   |   | 19,572 |   |
| Net                cash provided by/(used in) investing activities                                             |   |                                                         | (356,432 | ) |   | 32,421 |   |

----

|                                                                                                                                                             |   | Nine                months endedSeptember                30, |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|------------|
|                                                                                                                                                             |   | 2005                                                         |       |  2004 |   |
| Cash                flows from financing activities:                                                                                                             |   |                                                    |       |    |   |
| Payment                of stock issuance costs                                                                                                                   |   |                                                         | (1,751     | ) |   | (1,493 | ) |
| Repayment                of loan to stockholder                                                                                                                  |   |                                                         | (33,860    | ) |   | — |   |
| Proceeds                from borrowings on revolver, term loan and note payable                                                                                  |   |                                                         | 1,201,362  |   |   | 37,000 |   |
| Payment                on revolver and note payable                                                                                                              |   |                                                         | (1,259,629 | ) |   | (66,493 | ) |
| Proceeds                from borrowings on mortgage warehouse facilities                                                                                         |   |                                                         | 163,465    |   |   | 185,044 |   |
| Payments                on mortgage warehouse facilities                                                                                                         |   |                                                         | (125,753   | ) |   | (143,376 | ) |
| Proceeds                from borrowings on senior notes                                                                                                          |   |                                                         | 301,188    |   |   | — |   |
| Proceeds                from issuance of bonds                                                                                                                   |   |                                                         | 275,000    |   |   | 5,000 |   |
| Retirement                of bonds payable                                                                                                                       |   |                                                         | (51,039    | ) |   | (24,547 | ) |
| Payment                of bond issuance and debt refinancing costs                                                                                               |   |                                                         | (27,678    | ) |   | (920 | ) |
| Proceeds                from termination of hedge                                                                                                                |   |                                                         | 1,685      |   |   | — |   |
| Payment                for termination of hedge                                                                                                                  |   |                                                         | (8,558     | ) |   | — |   |
| Proceeds                from exercised stock options                                                                                                             |   |                                                         | 563        |   |   | — |   |
| Retirement                of convertible preferred stock                                                                                                         |   |                                                         | (32,500    | ) |   | — |   |
| Loans                from stockholder                                                                                                                            |   |                                                         | —    |   |   | 10,900 |   |
| Acquisition                of minority interest                                                                                                                  |   |                                                         | (655       | ) |   | — |   |
| Distributions                to minority interest                                                                                                                |   |                                                         | (2,075     | ) |   | (2,339 | ) |
| Proceeds                from issuance of common stock                                                                                                            |   |                                                         | 3,129      |   |   | — |   |
| Distributions                to common stockholders                                                                                                              |   |                                                         | (56,076    | ) |   | (52,509 | ) |
| Distributions                to preferred stockholders                                                                                                           |   |                                                         | (19,263    | ) |   | — |   |
| Net                cash provided by/(used in) financing activities                                                                                               |   |                                                         | 327,555    |   |   | (53,733 | ) |
|                                                                                                                                                             |   |                                                         |       |   |   |   |   |
| Net                increase (decrease) in cash and cash equivalents                                                                                              |   |                                                         | 4,359      |   |   | (19,456 | ) |
|                                                                                                                                                             |   |                                                         |       |   |   |   |   |
| Cash                and cash equivalents at beginning of period                                                                                                  |   |                                                         | 22,744     |   |   | 36,955 |   |
|                                                                                                                                                             |   |                                                         |       |   |   |   |   |
| Cash                and cash equivalents at end of period                                                                                                        |   | $                                                            | 27,103     |   | $ | 17,499 |   |
|                                                                                                                                                             |   |                                                         |       |   |   |   |   |
| Supplemental                disclosures of cash flow information:                                                                                                |   |                                                         |       |   |   |   |   |
|                                                                                                                                                             |   |                                                         |       |   |   |   |   |
| Interest                paid                                                                                                                                     |   | $                                                            | 49,991     |   | $ | 33,495 |   |
| Interest                capitalized                                                                                                                              |   | $                                                            | 52         |   | $ | 17 |   |
| Income                taxes paid                                                                                                                                 |   | $                                                            | 5,934      |   | $ | 2,343 |   |
|                                                                                                                                                             |   |                                                         |       |   |   |   |   |
| Supplemental                disclosures of non-cash investing and financing                activities:                                                           |   |                                                         |       |   |   |   |   |
|                                                                                                                                                             |   |                                                         |       |   |   |   |   |
| Redemption                of minority interest in lieu of payment on accounts                receivable                                                          |   | $                                                            | 1,798      |   | $ | 894 |   |
| Foreclosure                on notes receivable and acceptance of underlying real estate                collateral                                                |   | $                                                            | —    |   | $ | 452 |   |
| Notes                receivable accepted in exchange for sale of properties                                                                                      |   | $                                                            | —    |   | $ | 3,490 |   |
|                                                                                                                                                             |   |                                                         |       |   |   |   |   |
| Restricted                cash accepted in exchange for convenience and gas store operations                and                interest in fuel loading terminal |   | $                                                            | 10,253     |   | $ | — |   |
| Distributions                declared and unpaid at September 30                                                                                                 |   | $                                                            | 6,392      |   | $ | — |   |

----

| 1. | Organization                and Nature of Business: |
|----|-----------------------------------------------------|

| 2. | Basis                of Presentation: |
|----|---------------------------------------|

----

| 2. | Basis                of Presentation - Continued: |
|----|---------------------------------------------------|

| 3. | Adoption                of New Accounting Standards: |
|----|------------------------------------------------------|

| 4. | Merger: |
|----|---------|

----

| 4. | Merger                - Continued: |
|----|------------------------------------|

|   | · | The                fair value of land and buildings was estimated as if the properties                were                vacant. The land value was estimated and the buildings were valued                at                estimated replacement cost less                depreciation. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For                properties currently under lease, an analysis was performed to determine                whether the current lease terms were above or below market rate and                an                asset or liability, respectively, was determined using discounted                cash                flows. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For                properties currently under lease, the value associated with having                a lease                in place was estimated by evaluating the present value of the lost                rents                for each property that would have resulted if the properties had                to be                constructed and the costs related to executing the lease. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                benefit of having a tenant in each specific property with a high                likelihood of renewing the lease at the end of the current term was                evaluated and a value was determined using the present value of rents                during a standard re-lease period. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   Equity                Interest |   |  Shares(in                thousands) |   |   Price |   | Total                Market Value(in                thousands) |   |   |    |
|--------------------------------------------|--------|-------------------------------------------|--------|-------------------|--------|----------------------------------------------------------------|--------|--------|---------|
|                                       |   |                                      |   |              |   |                                                           |   |   |    |   |   |   |   |
| Series                A Preferred Stock    |   |                                      | 4,084  |              | $      | 23.53                                                          |   | $      | 96,099  |   |   |   |   |
| Series                B Preferred Stock    |   |                                      | 25     |              |   | 1,300.00                                                       |   |   | 32,500  |  (a) |   |   |   |
| Common                Stock                |   |                                      | 22,599 |              |   | 15.24                                                          |   |   | 344,411 |   |   |   |   |
|                                       |   |                                      |   |              |   |                                                           |   |   | 473,010 |   |   |   |   |
| Transaction                costs           |   |                                      |   |              |   |                                                           |   |   | 14,414  |   |   |   |   |
| Total                                      |   |                                      |   |              |   |                                                           |   | $      | 487,424 |   |   |   |   |

----

| 4. | Merger                - Continued: |
|----|------------------------------------|

|                                                                                                     |   | (In                thousands) |    |
|----------------------------------------------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                                                                     |   |                          |    |
| Cash                Consideration                                                                        |   | $                             | 449,997 |   |
| Preferred                Share Consideration (3,749.9 million shares at $23.53 per                share) |   |                          | 88,235  |   |
| Purchase                Price including transaction costs                                                |   | $                             | 538,232 |   |

----

| 4. | Merger                - Continued: |
|----|------------------------------------|

|                                                           |   | (In                thousands) |      |      |   |
|----------------------------------------------------------------|--------|-------------------------------|-----------|-----------|--------|
| Consideration:                                                 |   |                          |      |      |   |   |   |
| Exchange                of equity interests                    |   | $                             | 473,010   |      |   |   |   |
| Transaction                costs                               |   |                          | 14,414    |      |   |   |   |
| Cash                                                           |   |                          | 449,997   |      |   |   |   |
| Series                A Preferred Shares                       |   |                          | 88,235    |      |   |   |   |
| Total                consideration                             |   | $                             | 1,025,656 |      |   |   |   |
|                                                           |   |                          |      |      |   |   |   |
| Assets                Acquired:                                |   |                          |      |      |   |   |   |
| Real                estate investment properties               |   | $                             | 966,054   |      |   |   |   |
| Net                investment in direct financing leases       |   |                          | 63,648    |      |   |   |   |
| Real                estate held for sale                       |   |                          | 62,077    |      |   |   |   |
| Cash                                                           |   |                          | 43,646    |      |   |   |   |
| Restricted                cash                                 |   |                          | 7,835     |      |   |   |   |
| Mortgage                and equipment notes receivable         |   |                          | 15,235    |      |   |   |   |
| Accounts                receivable                             |   |                          | 2,925     |      |   |   |   |
| Other                assets:                                   |   |                          |      |      |   |   |   |
| Above                market leases                             |   |                          | 44,093    |      |   |   |   |
| Leases                in place                                 |   |                          | 15,214    |      |   |   |   |
| Tenant                relationships                            |   |                          | 9,117     |      |   |   |   |
| Other                                                          |   |                          | 10,104    |      |   |   |   |
| Goodwill                                                       |   |                          | 168,814   |  (1) |   |   |   |
| Total                                                          |   |                          | 1,408,762 |      |   |   |   |
|                                                           |   |                          |      |      |   |   |   |
| Liabilities                Assumed:                            |   |                          |      |      |   |   |   |
| Revolver                                                       |   |                          | 14,150    |      |   |   |   |
| Notes                payable                                   |   |                          | 158,189   |      |   |   |   |
| Bonds                payable                                   |   |                          | 143,505   |      |   |   |   |
| Due                to related parties                          |   |                          | 270       |      |   |   |   |
| Other                payables:                                 |   |                          |      |      |   |   |   |
| Below                market leases                             |   |                          | 27,584    |      |   |   |   |
| Environmental                and exit costs liability          |   |                          | 4,775     |      |   |   |   |
| Distributions                payable                           |   |                          | 4,506     |      |   |   |   |
| Other                                                          |   |                          | 22,757    |      |   |   |   |
| Minority                interests                              |   |                          | 7,594     |      |   |   |   |
| Loan                due from stockholder (reduction of equity) |   |                          | (224      | )         |   |   |   |
| Total                                                          |   |                          | 383,106   |      |   |   |   |
|                                                           |   |                          |      |      |   |   |   |
| Net                assets acquired                             |   | $                             | 1,025,656 |      |   |   |   |

----

| 4. | Merger                - Continued: |
|----|------------------------------------|

----

| 4. | Merger                - Continued: |
|----|------------------------------------|

|                                                       |   | Proforma(in                thousands)                          |   |
|------------------------------------------------------------|--------|----------------------------------------------------------------|--------|
|                                                       |   | Quarter                Ended                September 30, 2005 |   | QuarterEnded                September 30, 2004 |   | Nine                Months Ended September 30, 2005 |   | Nine                Months Ended September 30, 2004 |   |
|                                                       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                   |   | $                                                              | 50,763 |   | $ | 56,607 |   | $ | 154,771 |   | $ | 168,700 |   |
|                                                       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                  |   |                                                           | 18,864 |   |   | 18,851 |   |   | 34,452 |   |   | 53,792 |   |
| Dividends                to preferred stockholders         |   |                                                           | (7,176 | ) |   | (7,185 | ) |   | (21,527 | ) |   | (21,536 | ) |
| Net                income allocable to common stockholders |   | $                                                              | 11,688 |   | $ | 11,666 |   | $ | 12,925 |   | $ | 32,256 |   |
|                                                       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                and diluted earnings per share        |   | $                                                              | 0.20   |   | $ | 0.20 |   | $ | 0.22 |   | $ | 0.56 |   |
|                                                       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding:        |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                      |   |                                                           | 57,846 |   |   | 57,630 |   |   | 57,757 |   |   | 57,630 |   |
| Diluted                                                    |   |                                                           | 57,857 |   |   | 57,630 |   |   | 57,757 |   |   | 57,630 |   |

|   | The                proforma amounts for                the nine months ended September 30, 2005 include a non-cash tax charge                of                $2.7 million and $8.7 million of Merger                expenses. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | Intangible                Lease Costs: |
|----|----------------------------------------|

|                                               |   | (in                thousands)     |   |
|----------------------------------------------------|--------|-----------------------------------|--------|
|                                               |   | September                30, 2005 |   | December                31, 2004 |   |
|                                               |   |                              |   |   |   |   |   |
| Intangible                lease origination costs: |   |                              |   |   |   |   |   |
| Leases                in place                     |   | $                                 | 30,095 |   | $ | — |   |
| Tenant                relationships                |   |                              | 9,891  |   |   | — |   |
|                                               |   |                              | 39,986 |   |   | — |   |
| Less                accumulated amortization       |   |                              | (4,192 | ) |   | — |   |
|                                               |   |                              | 35,794 |   |   | — |   |
|                                               |   |                              |   |   |   |   |   |
| Above                market lease values           |   |                              | 43,771 |   |   | — |   |
| Less                accumulated amortization       |   |                              | (3,120 | ) |   | — |   |
|                                               |   |                              | 40,651 |   |   | — |   |
|                                               |   |                              |   |   |   |   |   |
| Total                                              |   | $                                 | 76,445 |   | $ | — |   |

----

| 5. | Intangible                Lease Costs - Continued: |
|----|----------------------------------------------------|

| 6. | Real                Estate Investment Properties: |
|----|---------------------------------------------------|

|                                         |   | (In                thousands)    |      |
|----------------------------------------------|--------|----------------------------------|-----------|
|                                         |   | September                30,2005 |      |  December                31,2004 |   |
|                                         |   |                             |
| Land                                         |   | $                                | 874,841   |   | $ | 273,776 |   |
| Buildings                                    |   |                             | 837,079   |   |   | 310,056 |   |
| Equipment                and other           |   |                             | 3,374     |   |   | 1,251 |   |
|                                         |   |                             | 1,715,294 |   |   | 585,083 |   |
| Less                accumulated depreciation |   |                             | (78,177   | ) |   | (60,813 | ) |
|                                         |   |                             |      |   |   |   |   |
|                                         |   | $                                | 1,637,117 |   | $ | 524,270 |   |

|       |   | (In                thousands) |      |
|------------|--------|-------------------------------|-----------|
|       |   |                          |      |   |
| 2005       |   | $                             | 39,949    |   |
| 2006       |   |                          | 158,288   |   |
| 2007       |   |                          | 156,238   |   |
| 2008       |   |                          | 153,960   |   |
| 2009       |   |                          | 151,363   |   |
| Thereafter |   |                          | 1,195,054 |   |
|       |   |                          |      |   |
|       |   | $                             | 1,854,852 |   |

----

|                                                             |   | (In                thousands)     |     |
|------------------------------------------------------------------|--------|-----------------------------------|----------|
|                                                             |   | September                30, 2005 |     |  December                31, 2004 |   |
| Minimum                lease payments receivable                 |   | $                                 | 222,848  |   | $ | 172,902 |   |
| Estimated                residual values                         |   |                              | 42,507   |   |   | 24,554 |   |
| Interest                receivable from secured equipment leases |   |                              | 4        |   |   | 7 |   |
| Less                unearned income                              |   |                              | (112,694 | ) |   | (101,008 | ) |
|                                                             |   |                              |     |   |   |   |   |
| Net                investment in direct financing leases         |   | $                                 | 152,665  |   | $ | 96,455 |   |

|       | (In                thousands) |   |
|------------|-------------------------------|--------|
|       |                          |   |
| 2005       | $                4,687        |   |
| 2006       | 18,805                        |   |
| 2007       | 18,945                        |   |
| 2008       | 19,075                        |   |
| 2009       | 19,126                        |   |
| Thereafter | 142,210                       |   |
|       |                          |   |
|       | $                222,848      |   |

----

| 8. | Real                Estate Held for Sale: |
|----|-------------------------------------------|

|                                                                 |   | (In                thousands)                             |    |
|----------------------------------------------------------------------|--------|-----------------------------------------------------------|---------|
|                                                                 |   | Quarters                endedSeptember                30, |    | Nine                months ended September                30, |   |
|                                                                 |   | 2005                                                      |    | 2004 |   | 2005 |   | 2004 |   |
|                                                                 |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |
| Rental                income                                         |   | $                                                         | 3,533   |   | $ | 4,388 |   | $ | 8,833 |   | $ | 10,916 |   |
| Food,                beverage and retail revenues                    |   |                                                      | 14,317  |   |   | 3,549 |   |   | 34,776 |   |   | 11,106 |   |
| Food,                beverage and retail expenses                    |   |                                                      | (14,281 | ) |   | (3,839 | ) |   | (33,878 | ) |   | (11,564 | ) |
| Other                property related expenses                       |   |                                                      | (408    | ) |   | (762 | ) |   | (1,918 | ) |   | (1,342 | ) |
| Interest                expense                                      |   |                                                      | (1,682  | ) |   | (1,085 | ) |   | (3,758 | ) |   | (2,575 | ) |
| Impairment                provisions                                 |   |                                                      | (64     | ) |   | (876 | ) |   | (415 | ) |   | (2,087 | ) |
|                                                                 |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |
| Earnings                from discontinued operations                 |   |                                                      | 1,415   |   |   | 1,375 |   |   | 3,640 |   |   | 4,454 |   |
|                                                                 |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |
| Sales                of real estate                                  |   |                                                      | 72,015  |   |   | 97,619 |   |   | 213,285 |   |   | 224,088 |   |
| Cost                of real estate sold                              |   |                                                      | (62,057 | ) |   | (83,177 | ) |   | (181,316 | ) |   | (193,722 | ) |
|                                                                 |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |
| Gain                on disposal of discontinued operations           |   |                                                      | 9,958   |   |   | 14,442 |   |   | 31,969 |   |   | 30,366 |   |
|                                                                 |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |
| Income                tax provision                                  |   |                                                      | (1,348  | ) |   | (4,392 | ) |   | (7,756 | ) |   | (7,626 | ) |
|                                                                 |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |
| Income                from discontinued operations, after income tax |   | $                                                         | 10,025  |   | $ | 11,425 |   | $ | 27,853 |   | $ | 27,194 |   |

----

| 9. | Mortgage,                Equipment and Other Notes Receivable: |
|----|----------------------------------------------------------------|

| 10. | Borrowings: |
|-----|-------------|

|                                           |   | September                30, 2005   |        |   |                       |   |                                            | December                31, 2004 |
|------------------------------------------------|--------|-------------------------------------|-------------|--------|----------------------------|--------|-------------------------------------------------|----------------------------------|
|                                           |   | Amount(In                thousands) | AverageRate |   |    Capacity |   | Expectedmaturity/retirement                date |                             | Amount(In                thousands) | Average                rate |
|                                           |   |                                |        |   |                       |   |                                            |                             |   |   |
| Revolver                                       |   | $                142,000            | 5.69%       |   | $                175,000   |   | April                2008                       |                             | $                21,000 | 4.04% |
| Term                loan                       |   | 175,000                             | 5.43%       |   | 175,000                    |   | April                2010                       |                             | — | — |
| Senior                unsecured notes          |   | 300,000                             | 7.50%       |   | 300,000                    |   | April                2015                       |                             | — | — |
| Notes                payable                   |   | 1,913                               | 6.54%       |   | 6,150                      |   | 2010                                            |                             | 162,810 | 5.83% |
| Mortgage                note payable (a)       |   | 839                                 | 8.00%       |   | 839                        |   | June                2007                        |                             | — | — |
| Mortgage                warehouse facilities   |   | 139,106                             | 4.51%       |   | 260,000                    |   | Annual                                          |                             | 101,394 | 2.78% |
| Subordinated                note payable       |   | —                             | —     |   | —                    |   | —                                         |                             | 21,875 | 7.00% |
| Series                2000-A bonds payable     |   | 227,150                             | 7.97%       |   | 227,150                    |   | 2009-2017                                       |                             | 239,165 | 7.96% |
| Series                2001-A bonds payable (a) |   | 135,102                             | 3.63%       |   | 135,102                    |   | August                2006                      |                             | — | — |
| Series                2001-4 bonds payable     |   | 25,920                              | 8.90%       |   | 25,920                     |   | 2009-2013                                       |                             | 28,489 | 8.90% |
| Series                2001 bonds payable       |   | 106,531                             | 3.51%       |   | 106,531                    |   | October                2006                     |                             | 111,577 | 1.89% |
| Series                2003 bonds payable       |   | 9,722                               | 7.76%       |   | 9,722                      |   | 2005-2011                                       |                             | 26,190 | 6.02% |
| Series                2005 bonds payable       |   | 268,644                             | 4.67%       |   | 268,644                    |   | 2011-2012                                       |                             | — | — |
|                                           |   | $                1,531,927          |        |   | $                1,690,058 |   |                                            |                             | $                712,500 |   |
| Senior                unsecured notes premium  |   | 1,178                               |        |   | —                    |   |                                            |                             |   |   |
|                                           |   | $                1,533,105          |        |   | $                1,690,058 |   |                                            |                             |   |   |

|   | (a) | Assumed                debt as a result of the Merger described in Note                4. |
|--------|-----|-------------------------------------------------------------------------------------------|

----

| 10. | Borrowings                - Continued: |
|-----|----------------------------------------|

*Revolver      and Term Loan. *

*Senior      Unsecured Notes. *

*Note      Payable.*

*Mortgage      Note Payable. *

----

| 10. | Borrowings                - Continued: |
|-----|----------------------------------------|

*Mortgage      Warehouse Facilities.*

*Subordinated      Note Payable. *

*Bonds      Payable. *

*Series      B Preferred Stock.*

----

| 10. | Borrowings                - Continued: |
|-----|----------------------------------------|

|       |   | (In                thousands) |      |
|------------|--------|-------------------------------|-----------|
|       |   |                          |      |   |
| 2005       |   | $                             | 10,274    |   |
| 2006       |   |                          | 402,251   |   |
| 2007       |   |                          | 27,805    |   |
| 2008       |   |                          | 172,597   |   |
| 2009       |   |                          | 34,929    |   |
| Thereafter |   |                          | 884,071   |   |
|       |   | $                             | 1,531,927 |   |

| 11. | Income                Tax: |
|-----|----------------------------|

----

| 11. | Income                Tax - Continued: |
|-----|----------------------------------------|

| 12. | Related                Party Transactions: |
|-----|--------------------------------------------|

----

| 13. | Stock                Options and Restricted Shares: |
|-----|-----------------------------------------------------|

----

| 13. | Stock                Options and Restricted Shares - Continued: |
|-----|-----------------------------------------------------------------|

|                                                     |   | $12.23 |   | $15.50 |   | All                options |   |
|----------------------------------------------------------|--------|--------|--------|--------|--------|----------------------------|--------|
|                                                     |   |   |   |   |   |                       |   |
| Options                outstanding (in thousands)        |   |   | 4      |   |   | 8                          |   |   | 12 |   |
| Average                option price per share            |   | $      | 12.23  |   | $      | 15.50                      |   | $ | 14.36 |   |
| Weighted                average contractual life (years) |   |   | 2.68   |   |   | 1.08                       |   |   | 1.63 |   |
| Options                exercisable (in thousands)        |   |   | 4      |   |   | 8                          |   |   | 12 |   |
| Average                option price per share            |   | $      | 12.23  |   | $      | 15.50                      |   | $ | 14.36 |   |

|                                                                     |   |  Number                of options(in                thousands) |    | Weighted                average exercise price at grant date |   |
|--------------------------------------------------------------------------|--------|---------------------------------------------------------------------|---------|--------------------------------------------------------------|--------|
|                                                                     |   |                                                                |    |                                                         |   |   |   |
| Options                outstanding at December 31, 2004                  |   |                                                                | 0       |                                                         | $      | — |   |
| Options                assumed through Merger                            |   |                                                                | 71      |                                                         |   | 14.95 |   |
| Exercised                                                                |   |                                                                | (41     | )                                                            |   | 13.72 |   |
| Forfeited                                                                |   |                                                                | — |                                                         |   | — |   |
| Expired                                                                  |   |                                                                | (18     | )                                                            |   | 20.50 |   |
|                                                                     |   |                                                                |    |                                                         |   |   |   |
| Options                outstanding and exercisable at September 30, 2005 |   |                                                                | 12      |                                                         | $      | 14.36 |   |

|                                                    |   |  Number                of shares(in                thousands) |    | Weighted                average fair value at grant date |   |
|---------------------------------------------------------|--------|--------------------------------------------------------------------|---------|----------------------------------------------------------|--------|
|                                                    |   |                                                               |    |                                                     |   |   |   |
| Non-vested                shares at beginning of period |   |                                                               | — |                                                     | $      | — |   |
| Granted                                                 |   |                                                               | 138     |                                                     |   | 17.01 |   |
| Vested                                                  |   |                                                               | — |                                                     |   | — |   |
| Forfeited                                               |   |                                                               | (18     | )                                                        |   | 17.20 |   |
|                                                    |   |                                                               |    |                                                     |   |   |   |
| Non-vested                shares at September 30, 2005  |   |                                                               | 120     |                                                     | $      | 16.98 |   |

----

| 13. | Stock                Options and Restricted Shares - Continued: |
|-----|-----------------------------------------------------------------|

| 14. | Stockholders’                Equity: |
|-----|--------------------------------------------|

*Series      A Preferred Stock - *

*Series      C Preferred Stock - *

----

| 14. | Stockholders’                Equity - Continued: |
|-----|--------------------------------------------------------|

|   | *Computation                of Earnings Per Common Share*                -                For the quarters and nine months ended September 30, 2005 and 2004,                basic                and diluted earnings per common share for income (loss) from continuing                operations available to common shareholders has been computed as                follows: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                             |   | Quarter                ended September 30, 2005 |    |
|--------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|
|                                                                                             |   | Income(in                thousands)(Numerator)  |    |   |   | Shares(in                thousands)(Denominator) |   |   |   | Per-ShareAmount |   |
|                                                                                             |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations                                                   |   | $                                               | (781    | ) |   |   |   |   |   |   |   |   |   |   |   |   |
| Gain                on sale of assets                                                            |   |                                            | 9,620   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less:                Preferred stock dividends                                                   |   |                                            | (7,176  | ) |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                             |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                Earnings Per Share:                                                         |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations available to common                stockholders |   |                                            | 1,663   |   |   |   |   |   | 57,846 |   |   |   |   | $ | 0.03 |   |
|                                                                                             |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                of dilutive securities:                                                    |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                options                                                                     |   |                                            | — |   |   |   |   |   | 2 |   |   |   |   |   |   |   |
| Restricted                stock                                                                  |   |                                            | — |  (1) |   |   |   |   | 9 |  (1) |   |   |   |   |   |   |
| Convertible                Preferred Stock                                                       |   |                                            | — |  (1) |   |   |   |   | — |  (1) |   |   |   |   |   |   |
|                                                                                             |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                Earnings Per Share:                                                       |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations available to common                shareholders   |   | $                                               | 1,663   |   |   |   |   |   | 57,857 |   |   |   |   | $ | 0.03 |   |
|                                                                                             |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| 14. | Stockholders’                Equity - Continued: |
|-----|--------------------------------------------------------|

|                                                                                             |   | Quarter                ended September 30, 2004 |   |
|--------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                                             |   | Income(in                thousands)(Numerator)  |   | Shares(in                thousands)(Denominator) |   | Per-ShareAmount |   |
|                                                                                             |   |                                            |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                                 |   | $                                               | 3,357  |   |   |   |   |   |   |   |
| Gain                on sale of assets                                                            |   |                                            | 134    |   |   |   |   |   |   |   |
|                                                                                             |   |                                            |   |   |   |   |   |   |   |   |
| Basic                and Diluted Earnings Per Share:                                             |   |                                            |   |   |   |   |   |   |   |   |
| Income                from continuing operations available to common                stockholders |   | $                                               | 3,491  |   |   | 35,032 |   | $ | 0.10 |   |

|                                                                                           |   | Nine                months ended September 30, 2005 |    |
|------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|---------|
|                                                                                           |   | Income(in                thousands)(Numerator)      |    |   |   | Shares(in                thousands)(Denominator) |   |   |   | Per-ShareAmount |   |
|                                                                                           |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                               |   | $                                                   | 2,967   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gain                on sale of assets                                                          |   |                                                | 9,643   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less:                Preferred stock dividends                                                 |   |                                                | (17,275 | ) |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                Earnings Per Share:                                                       |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations available to                common stockholders |   |                                                | (4,665  | ) |   |   |   |   | 53,204 |   |   |   |   | $ | (0.09 | ) |
|                                                                                           |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                of dilutive securities:                                                  |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                options                                                                   |   |                                                | — |  (2) |   |   |   |   | — |  (2) |   |   |   |   |   |   |
| Restricted                stock                                                                |   |                                                | — |  (2) |   |   |   |   | — |  (2) |   |   |   |   |   |   |
| Convertible                Preferred Stock                                                     |   |                                                | — |  (2) |   |   |   |   | — |  (2) |   |   |   |   |   |   |
|                                                                                           |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                Earnings Per Share:                                                     |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations available                to common shareholders |   | $                                                   | (4,665  | ) |   |   |   |   | 53,204 |   |   |   |   | $ | (0.09 | ) |
|                                                                                           |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| 14. | Stockholders’                Equity - Continued: |
|-----|--------------------------------------------------------|

|                                                                                             |   | Nine                months ended September 30, 2004        |   |
|--------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------|--------|
|                                                                                                  |   |   Income(in                thousands)(Numerator) |   |  Shares(in                thousands)(Denominator) |   |   |   |  Per-ShareAmount |   |
|                                                                                             |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                                 |   | $                                                          | 7,652  |   |   |   |   |   |   |   |   |   |   |
| Gain                on sale of assets                                                            |   |                                                       | 140    |   |   |   |   |   |   |   |   |   |   |
|                                                                                             |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Basic                and Diluted Earnings Per Share:                                             |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations available                to common stockholders |   |  $                                                    | 7,792  |   |   | 35,032 |   |   |   |   | $ | 0.22 |   |

|   | (1) | For                the quarter ended September 30, 2005, the potential dilution from                the                conversion of Series A and Series C Preferred Stock into 16.6 million                shares of common stock and approximately 0.1 million shares of restricted                common stock were excluded from the computation of diluted earnings                per                share as these Common Stock Equivalents were                anti-dilutive. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | For                the nine months ended September 30, 2005, the potential dilution                from the                Company’s outstanding Common Stock Equivalents was anti-dilutive to the                loss from continuing operations per share calculation. As such, these                amounts were excluded from weighted average shares. Stock options                to                purchase approximately 0.012 million shares of common stock, approximately                0.12 million shares of restricted common stock and the conversion                of                Series A and Series C Preferred Stock into 16.6 million shares of                common                stock were excluded from the computation of diluted earnings per                share as                these Common Stock Equivalents were                anti-dilutive. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 14. | Stockholders’                Equity - Continued: |
|-----|--------------------------------------------------------|

|                                                                                                                                                       |   | (In                thousands)                              |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------|---------|
|                                                                                                                                                       |   | Quarters                ended September                30, |    | Nine                months ended September                30, |   |
|                                                                                                                                                       |   | 2005                                                       |    | 2004 |   | 2005 |   | 2004 |   |
|                                                                                                                                                       |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |
| Historical                income (loss) from continuing operations and gain of sale of assets                less                preferred stock dividends |   | $                                                          | 1,663   |   | $ | 3,491 |   | $ | (4,665 | ) | $ | 7,792 |   |
| Proforma                adjustment for Series C Preferred Stock dividends                                                                                  |   |                                                       | — |   |   | (3,396 | ) |   | (2,264 | ) |   | (10,188 | ) |
| Proforma                income (loss) from continuing operations allocable to common                stockholders                                           |   | $                                                          | 1,663   |   | $ | 95 |   | $ | (6,929 | ) | $ | (2,396 | ) |
|                                                                                                                                                       |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |
| Basic                and diluted proforma earnings (loss) per share:                                                                                       |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                       |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |
| From                continuing operations                                                                                                                  |   | $                                                          | 0.03    |   | $ | — |   | $ | (0.13 | ) | $ | (0.07 | ) |
| From                discontinued operations                                                                                                                |   |                                                       | 0.17    |   |   | 0.33 |   |   | 0.53 |   |   | 0.78 |   |
|                                                                                                                                                       |   | $                                                          | 0.20    |   | $ | 0.33 |   | $ | 0.40 |   | $ | 0.71 |   |

| 15. | Segment                Information: |
|-----|-------------------------------------|

----

| 15. | Segment                Information - Continued: |
|-----|-------------------------------------------------|

|                                                                                                  |   | Quarter                ended September 30, 2005(In                thousands) |      |
|-------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|-----------|
|                                                                                                  |   | Real                estate segment                                           |      | Specialty                finance segment |   | Other |   | ConsolidatedTotals |   |
|                                                                                                  |   |                                                                         |      |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                                                              |   | $                                                                            | 48,728    |   | $ | 3,333 |   | $ | (1,298 | ) | $ | 50,763 |   |
|                                                                                                  |   |                                                                         |      |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                             |   |                                                                         |      |   |   |   |   |   |   |   |   |   |   |
| General                operating and administrative                                                   |   |                                                                         | 2,522     |   |   | 5,697 |   |   | (911 | ) |   | 7,308 |   |
| Interest                expense                                                                       |   |                                                                         | 22,393    |   |   | 2,145 |   |   | (325 | ) |   | 24,213 |   |
| Property                expenses, state and other taxes                                               |   |                                                                         | 2,111     |   |   | 183 |   |   | (52 | ) |   | 2,242 |   |
| Depreciation                and amortization                                                          |   |                                                                         | 8,092     |   |   | 459 |   |   | — |   |   | 8,551 |   |
| Loss                on termination of cash flow hedge                                                 |   |                                                                         | 8,558     |   |   | — |   |   | — |   |   | 8,558 |   |
| Impairments                and provisions/(recovery) on assets                                        |   |                                                                         | 1,250     |   |   | (628 | ) |   | — |   |   | 622 |   |
| Minority                interest net of equity in earnings                                            |   |                                                                         | 50        |   |   | — |   |   | — |   |   | 50 |   |
|                                                                                                  |   |                                                                         | 44,976    |   |   | 7,856 |   |   | (1,288 | ) |   | 51,544 |   |
| Discontinued                operations:                                                               |   |                                                                         |      |   |   |   |   |   |   |   |   |   |   |
| Income                from discontinued operations, net of income tax                                 |   |                                                                         | 3,313     |   |   | 6,712 |   |   | — |   |   | 10,025 |   |
|                                                                                                  |   |                                                                         |      |   |   |   |   |   |   |   |   |   |   |
| Gain                on sale of assets                                                                 |   |                                                                         | 9,620     |   |   | — |   |   | — |   |   | 9,620 |   |
|                                                                                                  |   |                                                                         |      |   |   |   |   |   |   |   |   |   |   |
| Net                income/(loss)                                                                      |   | $                                                                            | 16,685    |   | $ | 2,189 |   | $ | (10 | ) | $ | 18,864 |   |
|                                                                                                  |   |                                                                         |      |   |   |   |   |   |   |   |   |   |   |
| Assets                at September 30, 2005                                                           |   | $                                                                            | 2,200,501 |   | $ | 395,707 |   | $ | (6,984 | ) | $ | 2,589,224 |   |
|                                                                                                  |   |                                                                         |      |   |   |   |   |   |   |   |   |   |   |
| Investments                accounted for under the equity method at September 30,                2005 |   | $                                                                            | 860       |   | $ | — |   | $ | — |   | $ | 860 |   |
|                                                                                                  |   |                                                                         |      |   |   |   |   |   |   |   |   |   |   |

----

| 15. | Segment                Information - (Continued): |
|-----|---------------------------------------------------|

|                                                                                                        |   | Quarter                ended September 30, 2004(In                thousands) |    |
|-------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|---------|
|                                                                                                        |   | Real                estate segment                                           |    | Specialty                finance segment |   | Other |   | ConsolidatedTotals |   |
|                                                                                                        |   |                                                                         |    |   |   |   |   |   |   |
| Revenues                                                                                                    |   | $                                                                            | 19,860  |   | $ | 8,133 |   | $ | (928 | ) | $ | 27,065 |   |
|                                                                                                        |   |                                                                         |    |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                                   |   |                                                                         |    |   |   |   |   |   |   |   |   |   |   |
| General                operating and administrative                                                         |   |                                                                         | 1,705   |   |   | 4,872 |   |   | (470 | ) |   | 6,107 |   |
| Interest                expense                                                                             |   |                                                                         | 7,441   |   |   | 4,657 |   |   | 148 |   |   | 12,246 |   |
| Property                expenses, state and other taxes                                                     |   |                                                                         | 47      |   |   | — |   |   | — |   |   | 47 |   |
| Depreciation                and amortization                                                                |   |                                                                         | 2,730   |   |   | 246 |   |   | — |   |   | 2,976 |   |
| Impairments                and provisions on assets                                                         |   |                                                                         | 1,422   |   |   | 302 |   |   | — |   |   | 1,724 |   |
| Minority                interest net of equity in earnings                                                  |   |                                                                         | 2       |   |   | 606 |   |   | — |   |   | 608 |   |
|                                                                                                        |   |                                                                         | 13,347  |   |   | 10,683 |   |   | (322 | ) |   | 23,708 |   |
| Discontinued                operations:                                                                     |   |                                                                         |    |   |   |   |   |   |   |   |   |   |   |
| Income                from discontinued operations, net of income tax                                       |   |                                                                         | 1,894   |   |   | 9,531 |   |   | — |   |   | 11,425 |   |
|                                                                                                        |   |                                                                         |    |   |   |   |   |   |   |   |   |   |   |
| Gain                on sale of assets                                                                       |   |                                                                         | 134     |   |   | — |   |   | — |   |   | 134 |   |
|                                                                                                        |   |                                                                         |    |   |   |   |   |   |   |   |   |   |   |
| Net                income/(loss)                                                                            |   | $                                                                            | 8,541   |   | $ | 6,981 |   | $ | (606 | ) | $ | 14,916 |   |
|                                                                                                        |   |                                                                         |    |   |   |   |   |   |   |   |   |   |   |
| Assets                at September 30, 2004                                                                 |   | $                                                                            | 788,998 |   | $ | 499,731 |   | $ | (2,694 | ) | $ | 1,286,035 |   |
|                                                                                                        |   |                                                                         |    |   |   |   |   |   |   |   |   |   |   |
| Investments                accounted for under the  equity                method at September 30, 2004 |   | $                                                                            | 995     |   | $ | — |   | $ | — |   | $ | 995 |   |
|                                                                                                        |   |                                                                         |    |   |   |   |   |   |   |   |   |   |   |

----

| 15. | Segment                Information - (Continued): |
|-----|---------------------------------------------------|

|                                                                  |   | Nine                months ended September 30, 2005(In                thousands) |    |
|-----------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|---------|
|                                                                  |   | Real                estate segment                                               |    | Specialty                finance segment |   | Other |   | ConsolidatedTotals |   |
|                                                                  |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                              |   | $                                                                                | 126,319 |   | $ | 12,532 |   | $ | (3,477 | ) | $ | 135,374 |   |
|                                                                  |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                             |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |
| General                operating and administrative                   |   |                                                                             | 9,636   |   |   | 21,165 |   |   | (2,561 | ) |   | 28,240 |   |
| Interest                expense                                       |   |                                                                             | 58,260  |   |   | 8,186 |   |   | (474 | ) |   | 65,972 |   |
| Property                expenses, state and other taxes               |   |                                                                             | 5,331   |   |   | 489 |   |   | (418 | ) |   | 5,402 |   |
| Depreciation                and amortization                          |   |                                                                             | 21,383  |   |   | 1,017 |   |   | — |   |   | 22,400 |   |
| Loss                on termination of cash flow hedge                 |   |                                                                             | 8,558   |   |   | — |   |   | — |   |   | 8,558 |   |
| Impairments                and provisions/(recovery) on assets        |   |                                                                             | 797     |   |   | (499 | ) |   | — |   |   | 298 |   |
| Minority                interest net of equity in earnings            |   |                                                                             | 150     |   |   | 1,387 |   |   | — |   |   | 1,537 |   |
|                                                                  |   |                                                                             | 104,115 |   |   | 31,745 |   |   | (3,453 | ) |   | 132,407 |   |
| Discontinued                operations:                               |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |
| Income                from discontinued operations, net of income tax |   |                                                                             | 4,648   |   |   | 23,205 |   |   | — |   |   | 27,853 |   |
|                                                                  |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |
| Gain                on sale of assets                                 |   |                                                                             | 9,643   |   |   | — |   |   | — |   |   | 9,643 |   |
|                                                                  |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |
| Net                income/(loss)                                      |   | $                                                                                | 36,495  |   | $ | 3,992 |   | $ | (24 | ) | $ | 40,463 |   |
|                                                                  |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |

----

| 15. | Segment                Information - (Continued): |
|-----|---------------------------------------------------|

|                                                                                 |   | Nine                months ended September 30, 2004(In                thousands) |    |
|--------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|---------|
|                                                                                 |   | Real                estate segment                                               |    | Specialty                finance segment |   | Other |   | ConsolidatedTotals |   |
|                                                                                 |   |                                                                             |    |   |   |   |   |   |   |
| Revenues                                                                             |   | $                                                                                | 58,299  |   | $ | 22,061 |   | $ | (2,343 | ) | $ | 78,017 |   |
|                                                                                 |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                            |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |
| General                operating and administrative                                  |   |                                                                             | 6,079   |   |   | 14,497 |   |   | (1,511 | ) |   | 19,065 |   |
| Interest                expense                                                      |   |                                                                             | 21,805  |   |   | 14,067 |   |   | 198 |   |   | 36,070 |   |
| Property                expenses, state and other taxes                              |   |                                                                             | 384     |   |   | — |   |   | — |   |   | 384 |   |
| Depreciation                and amortization                                         |   |                                                                             | 8,013   |   |   | 618 |   |   | — |   |   | 8,631 |   |
| Loss                on termination of cash flow hedge                                |   |                                                                             | — |   |   | 940 |   |   | — |   |   | 940 |   |
| Impairments                and provisions on assets                                  |   |                                                                             | 2,115   |   |   | 660 |   |   | — |   |   | 2,775 |   |
| Minority                interest net of equity in earnings                           |   |                                                                             | 33      |   |   | 2,467 |   |   | — |   |   | 2,500 |   |
|                                                                                 |   |                                                                             | 38,429  |   |   | 33,249 |   |   | (1,313 | ) |   | 70,365 |   |
| Discontinued                operations:                                              |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |
| Income                from discontinued operations,                net of income tax |   |                                                                             | 3,886   |   |   | 23,308 |   |   | — |   |   | 27,194 |   |
|                                                                                 |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |
| Gain                on sale of assets                                                |   |                                                                             | 140     |   |   | — |   |   | — |   |   | 140 |   |
|                                                                                 |   |                                                                             |    |   |   |   |   |   |   |   |   |   |   |
| Net                income/(loss)                                                     |   | $                                                                                | 23,896  |   | $ | 12,120 |   | $ | (1,030 | ) | $ | 34,986 |   |

----

| 16. | Commitments                and Contingencies: |
|-----|-----------------------------------------------|

|       |   | (In                thousands) |   |
|------------|--------|-------------------------------|--------|
| 2005       |   | $                             | 1,005  |   |
| 2006       |   |                          | 3,527  |   |
| 2007       |   |                          | 3,077  |   |
| 2008       |   |                          | 2,344  |   |
| 2009       |   |                          | 1,605  |   |
| Thereafter |   |                          | 2,605  |   |
|       |   | $                             | 14,163 |   |

----

| 16. | Commitments                and Contingencies: |
|-----|-----------------------------------------------|

| 17. | Subsequent                Event: |
|-----|----------------------------------|

----

**Item      2. Management’s Discussion and Analysis of Financial Condition and Results of      Operations**

|   | · | changes                in general economic conditions; |
|--------|--------|--------------------------------------------------------|

|   | · | general                risks affecting the real estate industry (including, without limitation,                the inability to enter into or renew leases on favorable terms, dependence                on tenants’ financial condition, and competition from other developers,                owners and operators of real                estate); |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | general                risks affecting the restaurant industry (including, without limitation,                any disruption in the supply or quality of ingredients, the availability                of labor, and the continued demand for restaurant                dining); |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | financing                may not be available on favorable terms or at all, and our cash flow                from                operations and access to attractive capital may be insufficient to                fund                existing operations, or growth in new acquisitions and                developments; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes                in interest rates; |
|--------|--------|-------------------------------------------|

|   | · | our                ability to refinance existing financial obligations at favorable                terms; |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | our                ability to locate suitable tenants for our properties and similarly                resolve any mortgage loan                delinquencies; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                ability of tenants and borrowers to make payments under their agreements                with us; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | possible                adverse changes in tax and environmental laws, as well as the impact                of                newly adopted accounting principles on our accounting policies and                on                period-to-period comparisons of financial                results; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | risks                associated with our potential failure to qualify as a REIT under                the                Internal Revenue Code of 1986, as                amended; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our                ability to effect an integration of recently merged properties and                operations; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | our                ability to re-lease or sell properties that are currently vacant                or that                may become vacant; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our                ability to sell mortgage loans or net lease properties on a favorable                and                timely basis. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

*Business*

----

|   | 1. | restaurant                operators of major national and regional                chains; |
|--------|----|-------------------------------------------------------------------------------------------|

|   | 2. | restaurant                property investors; and |
|--------|----|---------------------------------------------------|

|   | 3. | retail                real estate developers. |
|--------|----|-----------------------------------------------|

|   | 1. | financing                free-standing restaurant and retail real                estate; |
|--------|----|------------------------------------------------------------------------------------------|

|   | 2. | maximizing                the potential of our real estate                portfolio; |
|--------|----|--------------------------------------------------------------------------------------|

|   | 3. | sale                of real estate to investors; and |
|--------|----|------------------------------------------------------|

|   | 4. | property                improvement and redevelopment. |
|--------|----|--------------------------------------------------------|

*Strategy      1: Financing Free-standing Restaurant and Retail Real Estate*

|   | · | $2.3                billion in properties purchased under sale leaseback terms including                approximately $364.6 million during the nine months ended September                30,                2005 and $247 million throughout 2004;                and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $3.3                billion in mortgage loans, including $2.2 billion more recently through                our strategic alliance with Bank of America. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | consistent                source of financing dedicated almost exclusively to the restaurant                industry for more than twenty                years; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our                ability to finance transactions in excess of $100                million; |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | relationships                with most of the major restaurant concepts and significant franchisees                in                those systems; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                experience and expertise of our senior marketing                representatives; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | the                intellectual capital that resides in our investment banking services                group; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

|   | · | our                strategic alliance that offers a source of mortgage                financing. |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | credit                underwriting of the restaurant                concept; |
|--------|--------|------------------------------------------------------------------------------|

|   | · | credit                underwriting of the potential                tenant; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | physical                inspection of the real estate; |
|--------|--------|--------------------------------------------------------|

|   | · | assessment                of whether the properties should be held for long-term investment                or held                for sale; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | review                and approval by our Investment Committee that includes senior executives,                including the CEO and CFO, separate from the marketing                team. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Strategy      2: Maximizing the Potential of our Real Estate Portfolio*

| **Concept**                                    |   | **Number                of Properties** |   | **Percentage                of Total Properties** |   | **Percentage                of Total Annualized Base Rent** |   | **Average                Remaining Lease Term (Years)** |
|------------------------------------------------|--------|-----------------------------------------|--------|---------------------------------------------------|--------|-------------------------------------------------------------|--------|---------------------------------------------------------|
|                                           |   |                                    |   |                                              |   |                                                        |   |                                                    |
| Burger                King                     |   | 174                                     |   | 9.1%                                              |   | 7.7%                                                        |   | 10.18                                                   |
| Golden                Corral                   |   | 85                                      |   | 4.4%                                              |   | 7.6%                                                        |   | 6.75                                                    |
| Jack                in the Box (*)             |   | 114                                     |   | 6.0%                                              |   | 7.0%                                                        |   | 9.00                                                    |
| Arby’s                                   |   | 151                                     |   | 7.9%                                              |   | 6.3%                                                        |   | 10.71                                                   |
| International                House of Pancakes |   | 63                                      |   | 3.3%                                              |   | 4.3%                                                        |   | 14.04                                                   |
| Captain                D’s               |   | 102                                     |   | 5.3%                                              |   | 3.7%                                                        |   | 17.40                                                   |
| Bennigan’s                               |   | 30                                      |   | 1.6%                                              |   | 3.6%                                                        |   | 11.38                                                   |
| Wendy’s                                  |   | 55                                      |   | 2.9%                                              |   | 3.0%                                                        |   | 13.60                                                   |
| Denny’s                                  |   | 47                                      |   | 2.5%                                              |   | 2.7%                                                        |   | 8.64                                                    |
| Pizza                Hut                       |   | 121                                     |   | 6.3%                                              |   | 2.6%                                                        |   | 7.51                                                    |

----

| **Tenant**                                                                                    |   | **Number                of Properties** |   | **Percentage                of Total Properties** |   | **Percentage                of Total Annualized Base Rent** |   | **Average                Remaining Lease Term (Years)** |
|-----------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|---------------------------------------------------|--------|-------------------------------------------------------------|--------|---------------------------------------------------------|
|                                                                                          |   |                                    |   |                                              |   |                                                        |   |                                                    |
| Jack                in the Box, Inc. and Jack in the Box                Eastern Division L.P. |   | 114                                     |   | 6.0%                                              |   | 7.1%                                                        |   | 9.04                                                    |
| Golden                Corral Corporation                                                      |   | 71                                      |   | 3.7%                                              |   | 6.3%                                                        |   | 6.31                                                    |
| IHOP                Properties                                                                |   | 60                                      |   | 3.1%                                              |   | 4.2%                                                        |   | 14.16                                                   |
| S&A                Properties Corporation                                                 |   | 34                                      |   | 1.8%                                              |   | 3.5%                                                        |   | 12.79                                                   |
| Captain                D’s, LLC                                                         |   | 93                                      |   | 4.9%                                              |   | 3.5%                                                        |   | 17.88                                                   |
| Sybra                Inc.                                                                     |   | 85                                      |   | 4.4%                                              |   | 3.4%                                                        |   | 11.37                                                   |
| Texas                Taco Cabana, LP                                                          |   | 31                                      |   | 1.6%                                              |   | 2.2%                                                        |   | 11.72                                                   |
| El                Chico Restaurants, Inc.                                                     |   | 23                                      |   | 1.2%                                              |   | 1.9%                                                        |   | 10.15                                                   |
| Carrols                Corporation                                                            |   | 38                                      |   | 2.0%                                              |   | 1.9%                                                        |   | 8.54                                                    |
| The                Restaurant Company                                                         |   | 18                                      |   | 0.9%                                              |   | 1.9%                                                        |   | 19.84                                                   |

| **State**                     |   | **Number                of Properties** |   | **Percentage                of Total Properties** |   | **Percentage                of Total Annualized Base Rent** |   | **Average                Remaining Lease Term (Years)** |
|-------------------------------|--------|-----------------------------------------|--------|---------------------------------------------------|--------|-------------------------------------------------------------|--------|---------------------------------------------------------|
|                          |   |                                    |   |                                              |   |                                                        |   |                                                    |
| Texas                         |   | 406                                     |   | 21.2%                                             |   | 19.8%                                                       |   | 9.83                                                    |
| Florida                       |   | 179                                     |   | 9.4%                                              |   | 11.2%                                                       |   | 11.08                                                   |
| Georgia                       |   | 121                                     |   | 6.3%                                              |   | 5.6%                                                        |   | 12.17                                                   |
| Ohio                          |   | 89                                      |   | 4.7%                                              |   | 4.8%                                                        |   | 9.94                                                    |
| Illinois                      |   | 66                                      |   | 3.5%                                              |   | 4.2%                                                        |   | 10.04                                                   |
| Tennessee                     |   | 94                                      |   | 4.9%                                              |   | 3.9%                                                        |   | 10.97                                                   |
| North                Carolina |   | 94                                      |   | 4.9%                                              |   | 3.9%                                                        |   | 9.32                                                    |
| California                    |   | 59                                      |   | 3.1%                                              |   | 3.9%                                                        |   | 10.28                                                   |
| Missouri                      |   | 52                                      |   | 2.7%                                              |   | 3.0%                                                        |   | 11.45                                                   |
| Arizona                       |   | 46                                      |   | 2.4%                                              |   | 2.7%                                                        |   | 9.78                                                    |

*Strategy      3: Sale of Real Estate to Investors*

*Strategy      4: Property Improvement and Redevelopment*

*Overview      of Management Discussion and Analysis*

*Liquidity      and Capital Resources*

|   | · | operating                expenses; |
|--------|--------|------------------------------------|

|   | · | current                debt service requirements; |
|--------|--------|---------------------------------------------------|

|   | · | distributions                on our common and preferred equity; |
|--------|--------|------------------------------------------------------------------|

|   | · | federal                income taxes. |
|--------|--------|--------------------------------------|

| **Debt**                                   | **Balance****(in                millions)**   |   | **Approximate****Interest                Rates** |   | **Expected                Maturity Date** |   | **Type**         |   |
|--------------------------------------------|-----------------------------------------------|--------|--------------------------------------------------|--------|-------------------------------------------|--------|------------------|--------|
|                                       |                                          |   |                                             |   |                                      |   |             |   |
| Mortgage                Warehouse Facility | $                    77.5 |   | LIBOR                + .90%                      |   | Feb-06                                    |   | Collateralized   |   |
| Mortgage                Warehouse Facility | 61.6                                          |   | LIBOR                + .90%                      |   | May-06                                    |   | Collateralized   |   |
| Series                2001-A Bonds (a)     | 135.1                                         |   | LIBOR                + .98%                      |   | Aug-06                                    |   | Collateralized   |   |
| Series                2001 Bonds (a)       | 106.5                                         |   | LIBOR                + .94%                      |   | Oct-06                                    |   | Collateralized   |   |
| Notes                Payable (a)           | 2.8                                           |   | Commercial                Paper + 1.25%          |   | 2005-2011                                 |   | Collateralized   |   |
| Revolver                (a)                | 142.0                                         |   | LIBOR                + 2.25%                     |   | April-08                                  |   | Collateralized   |   |
| Five                Year Term Loan (a)     | 175.0                                         |   | LIBOR                + 2.00%                     |   | April-10                                  |   | Collateralized   |   |
| Series                2003 Bonds (a)       | 9.7                                           |   | LIBOR                + 5.00%                     |   | 2005-2011                                 |   | Collateralized   |   |
| Series                2001-4 Bonds         | 25.9                                          |   | 8.90%                                            |   | 2009-2013                                 |   | Collateralized   |   |
| Series                2005 Bonds           | 268.6                                         |   | 4.67%                                            |   | 2011-2012                                 |   | Collateralized   |   |
| Senior                Unsecured Notes (b)  | 301.2                                         |   | 7.50%                                            |   | Apr-15                                    |   | Uncollateralized |   |
| Series                2000-A Bonds         | 227.2                                         |   | 7.97%                                            |   | 2009-2017                                 |   | Collateralized   |   |
|                                       |                                          |   |                                             |   |                                      |   |             |   |
| Total                Debt                  | $                1,533.1                      |   |                                             |   |                                      |   |             |   |

|   | (a) | We                have entered into hedging transactions to minimize the sensitivity                of                floating rate debt in the form of swaps and caps, as described further                under “Market Risk”. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Balance                includes a premium of $1.2 million at September 30,                2005. |
|--------|-----|-------------------------------------------------------------------------------------------------|

|                                         |   | (in                millions) |   |
|----------------------------------------------|--------|------------------------------|--------|
|                                         |   |                         |   |   |
| Mortgage                Warehouse Facilities |   | $                            | 120.9  |   |
| Revolver                                     |   |                         | 33.0   |   |
| Cash                and Cash Equivalents     |   |                         | 27.1   |   |
|                                         |   | $                            | 181.0  |   |

*Cash      Flows*

|                                                                 |   | Nine                Months endedSeptember                30, 2005 |   | Nine                Months endedSeptember                30, 2004 |   |   |   |
|----------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|--------|--------|
|                                                                 |   | (in                millions)                                      |   |
|                                                                 |   |                                                              |   |                                                              |   |   |   |
| Cash                flows provided by operating activities           |   | $                                                                 | 33.2   |                                                              | $      | 1.8    |   |   |   |   |
| Cash                flows provided by/(used in) investing activities |   |                                                              | (356.4 | )                                                                 |   | 32.4   |   |   |   |   |
| Cash                flows provided by/(used in) financing activities |   |                                                              | 327.6  |                                                              |   | (53.7  | )      |   |   |   |
|                                                                 |   |                                                              |   |                                                              |   |   |   |   |   |   |
| Net                increase (decrease) in cash and cash equivalents  |   |                                                              | 4.4    |                                                              |   | (19.5  | )      |   |   |   |
| Cash                and cash equivalents at beginning of year        |   |                                                              | 22.7   |                                                              |   | 37.0   |   |   |   |   |
|                                                                 |   |                                                              |   |                                                              |   |   |   |   |   |   |
| Cash                and cash equivalents at end of period            |   | $                                                                 | 27.1   |                                                              | $      | 17.5   |   |   |   |   |

----

|                                                         |   |  Mortgage                loans |   | Bonds                outstanding |   |
|--------------------------------------------------------------|--------|-------------------------------------|--------|----------------------------------|--------|
|                                                         |   |  in                pool at par |   | at                face value     |   |
|                                                              |   | (in                millions)        |
| Loans                and debt supporting 1998-1 Certificates |   | $                                   | 141.5  |                             | $      | 141.5 |   |
| Loans                and debt supporting 1999-1 Certificates |   |                                | 206.3  |                             |   | 206.3 |   |
|                                                         |   | $                                   | 347.8  |                             | $      | 347.8 |   |
|                                                         |   |                                |   |                             |   |   |   |

*Contractual      Obligations, Contingent Liabilities and Commitments. *

|                                                     |   | Payments                due by period (in millions) |   |
|----------------------------------------------------------|--------|-----------------------------------------------------|--------|
|   Contractual                cash obligations: |   | thru                2005                            |   | 2006                to 2007 |   | 2008to2009 |   |  Thereafter |   | Total |   |
|                                                     |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Borrowings                (1)                            |   | $                                                   | 10.3   |   | $ | 430.1 |   | $ | 207.5 |   | $ | 884.0 |   | $ | 1,531.9 |   |
| Ground                leases                             |   |                                                | 1.0    |   |   | 6.6 |   |   | 4.0 |   |   | 2.6 |   |   | 14.2 |   |
| Leased                office space (2)                   |   |                                                | 0.4    |   |   | 2.4 |   |   | 2.5 |   |   | 6.8 |   |   | 12.1 |   |
| Total                contractual cash obligations        |   | $                                                   | 11.7   |   | $ | 439.1 |   | $ | 214.0 |   | $ | 893.4 |   | $ | 1,558.2 |   |

|                                                                                |   | Estimated                payments due by period (in millions) |    |
|-------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|---------|
|  Commitments,                contingencies  and                guarantees |   | thru                2005                                      |    | 2006to2007 |   | 2008to2009 |   | Thereafter |   | Total |   |
|                                                                                |   |                                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Guaranty                of unsecured promissory note                (2)             |   | $                                                             | 1.2     |   | $ | — |   | $ | — |   | $ | — |   | $ | 1.2 |   |
| Property                purchase commitments (3)                                    |   |                                                          | 103.5   |   |   | — |   |   | — |   |   | — |   |   | 103.5 |   |
| Fuel                purchase commitments (4)                                        |   |                                                          | — |   |   | — |   |   | — |   |   | — |   |   | — |   |
| Litigation                (5)                                                       |   |                                                          | — |   |   | — |   |   | — |   |   | — |   |   | — |   |
|                                                                                |   |                                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                commitments, contingenciesand                guarantees        |   | $                                                             | 104.7   |   | $ | — |   | $ | — |   | $ | — |   | $ | 104.7 |   |

| (1) | The                maturities on outstanding indebtedness assumes loan repayments are                made on                the mortgage warehouse facilities in accordance with the contractual                obligation even though these warehouses are typically renewed each                year.                The maturities on outstanding indebtedness also assumes that bonds                payable                amortize in accordance with estimated payment amounts. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | We                own an interest in two limited partnerships and affiliates of two                of our                directors own the remaining partnership interests. We severally guaranteed                $1.2 million of the limited partnerships’ $14 million unsecured promissory                notes. The guaranty continues through December 31, 2010 when the                note                matures. We lease our office space from these limited partnerships                at                approximately $1.5 million per year, with scheduled rent increases.                Our                lease expires in 2014. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Represents                opportunities for net lease property purchases approved for funding                and                accepted by sellers as of September 30, 2005. During October 2005                we had                $9 million in property purchases and as of November 7, 2005 had total                commitments worth $123 million subject to a leaseback. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | As                part of the Merger, we assumed several products sales contracts that                committed us to purchase a minimum quantity of fuel, at a predetermined                margin over an index, at terms ranging from one to three years relating                to                certain gas station properties and the fuel terminal operations.                The                contracts are customary in the retail petroleum industry and secure                a                readily available supply of fuel at competitive market prices. We                are in                the process of transferring the majority of these purchase commitments                to                the buyer of the fuel terminal operation. We intend to transfer or                terminate, where possible, any remaining purchase commitment when                it                relates to properties or operations sold. In addition, in connection                with                certain gas station properties, we assumed certain agreements that                obligate us to pay a release price should a gas station property                change                gas brands. The agreements are customary in the retail petroleum                industry.                Some, but not all, of the agreements release us from the aforementioned                obligation upon the sale of the property to a third                party. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | We                are subject to various legal proceedings and claims that arise in                the                ordinary course of business. These matters are generally covered                by                insurance. While the resolution of these matters cannot be predicted                with                certainty, we believe that the final outcome of such matters will                not have                a material adverse effect on our consolidated financial statements.                In                addition: |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a. | On                January 18, 2005, Robert Lewis and Sutter Acquisition Fund, LLC,                two                limited partners in several of the Income Funds, filed a purported                class                action lawsuit on behalf of the limited partners against the general                partners of the Income Funds, CNLRP and USRP. The complaint alleges                that                the general partners breached their fiduciary duties in connection                with                the mergers and that the parties to the merger aided and abetted                in the                alleged breaches of fiduciary duties. The complaint further alleges                that                the general partners violated provisions of the Income Fund partnership                agreements and demands an accounting as to the affairs of the Income                Funds. The plaintiffs are seeking unspecified compensatory and exemplary                damages and equitable relief, which also included an injunction preventing                the defendants from proceeding with the mergers, which was unsuccessful.                On April 26, 2005, a supplemental plea to jurisdiction hearing was                held.                On May 2, 2005, the plaintiffs amended their lawsuit to add allegations                that the general partners of the Income Funds, with CNLRP and USRP,                prepared and distributed a false and misleading final proxy statement                filing to the limited partners of the Income Funds and the shareholders                of                CNLRP and USRP. On May 26, 2005, the Court entered a Final Order                Dismissing Action for lack of subject matter jurisdiction. On June                22,                2005, the plaintiffs filed a Notice of Appeal of the Order of Dismissal.                We believe the lawsuit, including the request for certification,                is                without merit and intend to defend vigorously against its                claims. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | During                2004, Management Strategies, Inc. filed a lawsuit against USRP. The                complaint alleges that we owe approximately $3 million in sales and                fuel                tax liabilities to the State of Georgia. We have filed a counterclaim                for                $2 million related to an unpaid note plus interest. We believe the                claims                against the Company are without merit and intend to defend vigorously                against such claims. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Type                of Hedge($                in millions) |   | NotionalAmount(in                millions) |   | Cap                Strike Price or Swap Rate |   | Trade                Date |   | Maturity                Date |     | Estimated                ValueatSeptember                30, 2005(in                millions) |   |
|------------------------------------------------------------|--------|--------------------------------------------|--------|----------------------------------------------|--------|---------------------------|--------|------------------------------|----------|-----------------------------------------------------------------------------------------------|--------|
|                                                       |   |                                       |   |                                         |   |                      |   |                         |     |                                                                                          |   |   |   |   |   |   |
| Interest                Rate Swap (five Year Term Loan)    |   | $                                          | 175    |                                         |   | 4.202                     | %      |                         | 5/16/05  |                                                                                          |   | 4/1/10 |   | $ | 2.1 |   |
| Interest                Rate Cap (series 2001-A Bonds)     |   | $                                          | 180    |                                         |   | 6.000                     | %      |                         | 8/13/01  |                                                                                          |   | 8/26/06 |   | $ | — |   |
| Interest                Rate Cap (Series 2001 Bonds)       |   | $                                          | 132    |                                         |   | 4.500                     | %      |                         | 9/28/01  |                                                                                          |   | 10/25/06 |   | $ | 0.2 |   |
| Interest                Rate Cap (Series 2003 Bonds)       |   | $                                          | 30     |                                         |   | 3.500                     | %      |                         | 12/17/03 |                                                                                          |   | 2/1/11 |   | $ | 0.7 |   |

*Results      of Operations*

*Real      estate segment*

*Specialty      finance segment*

----

|                                                                                                   |   | Quarter                ended September 30,(in                thousands) |   |
|--------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|
|                                                                                                   |   | 2005                                                                    |   | 2004 |   |
| Revenues:                                                                                              |   |                                                                    |   |   |   |   |   |
| Real                estate                                                                             |   | $                                                                       | 48,728 |   | $ | 19,860 |   |
| Specialty                finance                                                                       |   |                                                                    | 3,333  |   |   | 8,133 |   |
| Other*                                                                                                 |   |                                                                    | (1,298 | ) |   | (928 | ) |
| Total                revenues                                                                          |   |                                                                    | 50,763 |   |   | 27,065 |   |
|                                                                                                   |   |                                                                    |   |   |   |   |   |
| Expenses:                                                                                              |   |                                                                    |   |   |   |   |   |
| Operating                expenses excluding interest, depreciation, and                amortization:** |   |                                                                    |   |   |   |   |   |
| Real                estate                                                                             |   |                                                                    | 5,933  |   |   | 3,176 |   |
| Specialty                finance                                                                       |   |                                                                    | 5,252  |   |   | 5,780 |   |
| Other*                                                                                                 |   |                                                                    | (963   | ) |   | (470 | ) |
| Total                operating expenses excluding interest, depreciation, and amortization**           |   |                                                                    | 10,222 |   |   | 8,486 |   |
|                                                                                                   |   |                                                                    |   |   |   |   |   |
| Depreciation                and amortization expense:                                                  |   |                                                                    |   |   |   |   |   |
| Real                estate                                                                             |   |                                                                    | 8,092  |   |   | 2,730 |   |
| Specialty                finance                                                                       |   |                                                                    | 459    |   |   | 246 |   |
| Total                depreciation and amortization expense                                             |   |                                                                    | 8,551  |   |   | 2,976 |   |
|                                                                                                   |   |                                                                    |   |   |   |   |   |
| Interest                expense:                                                                       |   |                                                                    |   |   |   |   |   |
| Real                estate                                                                             |   |                                                                    | 22,393 |   |   | 7,441 |   |
| Specialty                finance                                                                       |   |                                                                    | 2,145  |   |   | 4,657 |   |
| Other*                                                                                                 |   |                                                                    | (325   | ) |   | 148 |   |
| Total                interest expense                                                                  |   |                                                                    | 24,213 |   |   | 12,246 |   |
|                                                                                                   |   |                                                                    |   |   |   |   |   |
| Loss                on termination of cash flow hedge - Real estate                                    |   |                                                                    | 8,558  |   |   | — |   |
|                                                                                                   |   |                                                                    |   |   |   |   |   |
| Total                expenses                                                                          |   |                                                                    | 51,544 |   |   | 23,708 |   |
|                                                                                                   |   |                                                                    |   |   |   |   |   |
| Income/(loss)                from continuing operations, net                                           |   |                                                                    | (781   | ) |   | 3,357 |   |
|                                                                                                   |   |                                                                    |   |   |   |   |   |
| Income                from discontinued operations, after income taxes:                                |   |                                                                    |   |   |   |   |   |
| Real                estate                                                                             |   |                                                                    | 3,313  |   |   | 1,894 |   |
| Specialty                finance                                                                       |   |                                                                    | 6,712  |   |   | 9,531 |   |
| Total                income from discontinued operations, after income taxes                           |   |                                                                    | 10,025 |   |   | 11,425 |   |
|                                                                                                   |   |                                                                    |   |   |   |   |   |
| Gain                on sale of assets - Real estate                                                    |   |                                                                    | 9,620  |   |   | 134 |   |
|                                                                                                   |   |                                                                    |   |   |   |   |   |
| Net                income                                                                              |   | $                                                                       | 18,864 |   | $ | 14,916 |   |

----

|                                                                                                   |   | Nine                months ended September 30,(in                thousands) |    |
|--------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|---------|
|                                                                                                   |   | 2005                                                                        |    |  2004 |   |
| Revenues:                                                                                              |   |                                                                        |    |    |   |
| Real                estate                                                                             |   | $                                                                           | 126,319 |   | $ | 58,299 |   |
| Specialty                finance                                                                       |   |                                                                        | 12,532  |   |   | 22,061 |   |
| Other*                                                                                                 |   |                                                                        | (3,477  | ) |   | (2,343 | ) |
| Total                revenues                                                                          |   |                                                                        | 135,374 |   |   | 78,017 |   |
|                                                                                                   |   |                                                                        |    |   |   |   |   |
| Expenses:                                                                                              |   |                                                                        |    |   |   |   |   |
| Operating                expenses excluding interest, depreciation, and                amortization:** |   |                                                                        |    |   |   |   |   |
| Real                estate                                                                             |   |                                                                        | 15,914  |   |   | 8,611 |   |
| Specialty                finance                                                                       |   |                                                                        | 22,542  |   |   | 17,624 |   |
| Other*                                                                                                 |   |                                                                        | (2,979  | ) |   | (1,511 | ) |
| Total                operating expenses excluding interest, depreciation, and amortization**           |   |                                                                        | 35,477  |   |   | 24,724 |   |
|                                                                                                   |   |                                                                        |    |   |   |   |   |
| Depreciation                and amortization expense:                                                  |   |                                                                        |    |   |   |   |   |
| Real                estate                                                                             |   |                                                                        | 21,383  |   |   | 8,013 |   |
| Specialty                finance                                                                       |   |                                                                        | 1,017   |   |   | 618 |   |
| Total                depreciation and amortization expense                                             |   |                                                                        | 22,400  |   |   | 8,631 |   |
|                                                                                                   |   |                                                                        |    |   |   |   |   |
| Interest                expense:                                                                       |   |                                                                        |    |   |   |   |   |
| Real                estate                                                                             |   |                                                                        | 58,260  |   |   | 21,805 |   |
| Specialty                finance                                                                       |   |                                                                        | 8,186   |   |   | 14,067 |   |
| Other*                                                                                                 |   |                                                                        | (474    | ) |   | 198 |   |
| Total                interest expense                                                                  |   |                                                                        | 65,972  |   |   | 36,070 |   |
|                                                                                                   |   |                                                                        |    |   |   |   |   |
| Loss                on termination of cash flow hedge:                                                 |   |                                                                        |    |   |   |   |   |
| Real                estate                                                                             |   |                                                                        | 8,558   |   |   | — |   |
| Specialty                finance                                                                       |   |                                                                        | — |   |   | 940 |   |
| Total                loss on termination of cash flow hedge                                            |   |                                                                        | 8,558   |   |   | 940 |   |
|                                                                                                   |   |                                                                        |    |   |   |   |   |
| Total                expenses                                                                          |   |                                                                        | 132,407 |   |   | 70,365 |   |
|                                                                                                   |   |                                                                        |    |   |   |   |   |
| Income                from continuing operations, net                                                  |   |                                                                        | 2,967   |   |   | 7,652 |   |
|                                                                                                   |   |                                                                        |    |   |   |   |   |
| Income                from discontinued operations, after income taxes:                                |   |                                                                        |    |   |   |   |   |
| Real                estate                                                                             |   |                                                                        | 4,648   |   |   | 3,886 |   |
| Specialty                finance                                                                       |   |                                                                        | 23,205  |   |   | 23,308 |   |
| Total                income from discontinued operations, after income taxes                           |   |                                                                        | 27,853  |   |   | 27,194 |   |
|                                                                                                   |   |                                                                        |    |   |   |   |   |
| Gain                on sale of assets - Real estate                                                    |   |                                                                        | 9,643   |   |   | 140 |   |
|                                                                                                   |   |                                                                        |    |   |   |   |   |
| Net                income                                                                              |   | $                                                                           | 40,463  |   | $ | 34,986 |   |

| ** | also                includes the minority interest in earnings of consolidated joint                ventures                net of the equity in earnings of unconsolidated                subsidiaries |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Revenues:*

|                           |   | Quarter                Ended September 30,(in                thousands) |   | Nine                Months Ended September 30,(in                thousands) |   |
|--------------------------------|--------|-------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|
|                           |   | 2005                                                                    |   | %                of totalsegmentrevenues                                    |   | 2004 |   | %                of totalsegmentrevenues |   | 2005 |   | %                of totalsegmentrevenues |   | 2004 |   | %                of totalsegmentrevenues |   |
| Rental                income   |   | $                                                                       | 45,119 |                                                                        |   | 93 | % | $ | 16,661 |   |   | 84 | % | $ | 113,503 |   |   | 90 | % | $ | 49,611 |   |   | 85 | % |
| Interest                income |   |                                                                    | 2,030  |                                                                        |   | 4 | % |   | 1,478 |   |   | 7 | % |   | 8,687 |   |   | 7 | % |   | 3,923 |   |   | 7 | % |
| Other                          |   |                                                                    | 1,579  |                                                                        |   | 3 | % |   | 1,721 |   |   | 9 | % |   | 4,129 |   |   | 3 | % |   | 4,765 |   |   | 8 | % |
| Total                Revenues  |   | $                                                                       | 48,728 |                                                                        |   | 100 | % | $ | 19,860 |   |   | 100 | % | $ | 126,319 |   |   | 100 | % | $ | 58,299 |   |   | 100 | % |

*Operating      expenses, excluding depreciation, amortization and interest:*

|                                                                     |   | Quarter                Ended September 30,(in                thousands) |   | Nine                Months Ended September 30,(in                thousands) |   |
|--------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|
|                                                                     |   | 2005                                                                    |   | %                of totalsegmentrevenues                                    |   | 2004 |   | %                of totalsegmentrevenues |   | 2005 |   | %                of totalsegmentrevenues |   | 2004 |   | %                of totalsegmentrevenues |   |
| General                operating and                 administrative |   | $                                                                       | 2,522  |                                                                        |   | 5 | % | $ | 1,705 |   |   | 9 | % | $ | 9,635 |   |   | 8 | % | $ | 6,079 |   |   | 10 | % |
| Property                expenses, state                and other taxes   |   |                                                                    | 2,111  |                                                                        |   | 4 | % |   | 47 |   |   | — |   |   | 5,331 |   |   | 4 | % |   | 384 |   |   | 1 | % |
| Other                                                                    |   |                                                                    | 1,300  |                                                                        |   | 3 | % |   | 1,424 |   |   | 7 | % |   | 948 |   |   | 1 | % |   | 2,148 |   |   | 4 | % |
|                                                                     |   | $                                                                       | 5,933  |                                                                        |   | 12 | % | $ | 3,176 |   |   | 16 | % | $ | 15,914 |   |   | 13 | % | $ | 8,611 |   |   | 15 | % |

----

|                                                    |   | Quarter                EndedSeptember                30,(in                thousands) |   | Nine                Months Ended September 30,(in                thousands) |   |
|---------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|
|                                                    |   | 2005                                                                                  |   | 2004                                                                        |   | 2005 |   | 2004 |   |
| General                operating and administrative     |   | $                                                                                     | 5,697  |                                                                        | $      | 4,872 |   | $ | 21,165 |   | $ | 14,497 |   |
| Property                expenses, state and other taxes |   |                                                                                  | 183    |                                                                        |   | — |   |   | 489 |   |   | — |   |
| Other                                                   |   |                                                                                  | (628   | )                                                                           |   | 908 |   |   | 888 |   |   | 3,127 |   |
|                                                    |   | $                                                                                     | 5,252  |                                                                        | $      | 5,780 |   | $ | 22,542 |   | $ | 17,624 |   |

|   | · | Our                expenses in this segment include a $2.0 million charge in the current                nine-month period allocated to this segment resulting from a grant                of                stock and related cash compensation to members of our Board of Directors                and employees. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                specialty finance segment provides lease and loan servicing to our                real                estate segment and to third parties. As servicer, we utilize property                management software to account for leasing transactions and to capture                other tenant and lease information. More than a year ago, we decided                to                upgrade our technology platform supporting this function. We incurred                certain costs during the current quarter and nine month period necessary                to assure a successful transition to the new application and the                integration of USRP and Income Fund assets. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We                have incurred additional expenses with the integration of the merged                portfolios. While our servicing fee income in this segment for the                management of the larger portfolio was increased for the seven-month                period after the merger, we incurred various one-time setup expenses                in                the nine month period to add new properties creating an excess of                new                expenses over new revenues that should stabilize in the future. The                Income                Fund portfolio had been previously serviced by the specialty finance                segment, and did not create significant additional integration costs. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Prior                to 2005 certain services were purchased from affiliates of two of                our                board members. These included human resources, tax planning and                compliance, computer systems support, investor relations and other                services. Throughout the nine months ended September 30, 2005, we                brought                substantially all of these functions internally in an initiative                that                began in November 2004. During this process, we incurred certain                expenses                such as recruitment and training of new employees and the separate                licensure and maintenance of software previously leveraged among                a wider                enterprise affiliated with certain Board members. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We                have shifted the internal reporting of certain property improvement                and                redevelopment activities previously reported through the real estate                segment, as we view those expanding activities as more appropriately                aligned with the specialty finance segment. Direct and indirect payroll                relating to the property improvement and redevelopment activities                approximated $0.8 million and $2.4 million in the quarter and nine                months                ended September 30, 2005,                respectively. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Interest      Expense*

|                             |   | Quarter                Ended                              |   | Nine                Months Ended                          |   |
|----------------------------------|--------|-----------------------------------------------------------|--------|-----------------------------------------------------------|--------|
|                             |   | September                30,(in                thousands) |   | September                30,(in                thousands) |   |
|                             |   | 2005                                                      |   | 2004                                                      |   | 2005 |   | 2004 |   |
| Real                estate       |   | $                                                         | 22,393 |                                                      | $      | 7,441 |   | $ | 58,260 |   | $ | 21,805 |   |
| Specialty                finance |   |                                                      | 2,145  |                                                      |   | 4,657 |   |   | 8,186 |   |   | 14,067 |   |
| Other                            |   |                                                      | (325   | )                                                         |   | 148 |   |   | (474 | ) |   | 198 |   |
|                             |   | $                                                         | 24,213 |                                                      | $      | 12,246 |   | $ | 65,972 |   | $ | 36,070 |   |

*Depreciation      and Amortization*

|                             |   | Quarter                Ended                              |   | Nine                Months Ended                          |   |
|----------------------------------|--------|-----------------------------------------------------------|--------|-----------------------------------------------------------|--------|
|                             |   | September                30,(in                thousands) |   | September                30,(in                thousands) |   |
|                             |   | 2005                                                      |   | 2004                                                      |   | 2005 |   | 2004 |   |
| Real                estate       |   | $                                                         | 8,092  |                                                      | $      | 2,730 |   | $ | 21,383 |   | $ | 8,013 |   |
| Specialty                finance |   |                                                      | 459    |                                                      |   | 246 |   |   | 1,017 |   |   | 618 |   |
|                             |   | $                                                         | 8,551  |                                                      | $      | 2,976 |   | $ | 22,400 |   | $ | 8,631 |   |

----

*Loss      on Termination of Cash Flow Hedge*

*Gain      on Sale of Assets*

*Loss      on Termination of Cash Flow Hedge*

*Discontinued      Operations*

----

|                                                                          |   | Quarter                Ended September 30,(in                thousands) |    |
|-------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|---------|
|                                                                          |   | 2005                                                                    |    | 2005 |   | 2004 |   | 2004 |   |
|                                                                          |   | Real                EstateSegment                                       |    | Specialty                FinanceSegment |   | Real                EstateSegment |   | Specialty                FinanceSegment |   |
|                                                                          |   |                                                                    |    |   |   |   |   |   |   |   |   |   |   |
| Sale                of real estate                                            |   | $                                                                       | 19,473  |   | $ | 52,542 |   | $ | 7,755 |   | $ | 89,864 |   |
| Cost                of real estate sold                                       |   |                                                                    | 16,581  |   |   | 45,476 |   |   | 4,822 |   |   | 78,355 |   |
| Gain                on sale of real estate                                    |   |                                                                    | 2,892   |   |   | 7,066 |   |   | 2,933 |   |   | 11,509 |   |
| Net                other income (expense)                                     |   |                                                                    | 421     |   |   | 958 |   |   | (749 | ) |   | 2,414 |   |
| Earnings                from real estate discontinued operations before tax   |   |                                                                    | 3,313   |   |   | 8,024 |   |   | 2,184 |   |   | 13,923 |   |
|                                                                          |   |                                                                    |    |   |   |   |   |   |   |   |   |   |   |
| Retail                operations revenue                                      |   |                                                                    | — |   |   | 14,317 |   |   | 3,549 |   |   | — |   |
| Retail                cost of sales                                           |   |                                                                    | — |   |   | 14,281 |   |   | 3,839 |   |   | — |   |
| Earnings                (loss) from retail discontinued operations before tax |   |                                                                    | — |   |   | 36 |   |   | (290 | ) |   | — |   |   |   |   |
|                                                                          |   |                                                                    |    |   |   |   |   |   |   |   |   |   |   |
| Income                tax provision                                           |   |                                                                    | — |   |   | (1,348 | ) |   | — |   |   | (4,392 | ) |
|                                                                          |   |                                                                    |    |   |   |   |   |   |   |   |   |   |   |
| Income                from discontinued operations, after income taxes        |   | $                                                                       | 3,313   |   | $ | 6,712 |   | $ | 1,894 |   | $ | 9,531 |   |

----

|                                                                                                      |   | Nine                Months Ended September 30,(in                thousands) |    |
|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|---------|
|                                                                                                      |   | 2005                                                                        |    | 2005 |   | 2004 |   | 2004 |   |
|                                                                                                      |   | Real                EstateSegment                                           |    | Specialty                FinanceSegment |   | Real                EstateSegment |   | Specialty                FinanceSegment |   |
|                                                                                                      |   |                                                                        |    |   |   |   |   |   |   |   |   |   |   |
| Sale                of real estate                                                                        |   | $                                                                           | 32,950  |   | $ | 180,335 |   | $ | 26,728 |   | $ | 197,360 |   |
| Cost                of real estate sold                                                                   |   |                                                                        | 29,230  |   |   | 152,086 |   |   | 21,835 |   |   | 171,887 |   |
| Gain                on sale of real estate                                                                |   |                                                                        | 3,720   |   |   | 28,249 |   |   | 4,893 |   |   | 25,473 |   |
| Net                other income (expense)                                                                 |   |                                                                        | 928     |   |   | 1,814 |   |   | (549 | ) |   | 5,461 |   |
| Earnings                from real estate discontinued                operations before                tax |   |                                                                        | 4,648   |   |   | 30,063 |   |   | 4,344 |   |   | 30,934 |   |
|                                                                                                      |   |                                                                        |    |   |   |   |   |   |   |   |   |   |   |
| Retail                operations revenue                                                                  |   |                                                                        | — |   |   | 34,776 |   |   | 11,106 |   |   | — |   |
| Retail                cost of sales                                                                       |   |                                                                        | — |   |   | 33,878 |   |   | 11,564 |   |   | — |   |
| Earnings                (loss) from retail discontinued                operations before tax              |   |                                                                        | — |   |   | 898 |   |   | (458 | ) |   | — |   |   |   |   |
|                                                                                                      |   |                                                                        |    |   |   |   |   |   |   |   |   |   |   |
| Income                tax provision                                                                       |   |                                                                        | — |   |   | (7,756 | ) |   | — |   |   | (7,626 | ) |
|                                                                                                      |   |                                                                        |    |   |   |   |   |   |   |   |   |   |   |
| Income                from discontinued operations,                after income taxes                     |   | $                                                                           | 4,648   |   | $ | 23,205 |   | $ | 3,886 |   | $ | 23,308 |   |

**Item      3.**
**Quantitative      and Qualitative Disclosures About Market Risk.**

**Item      4.**
**Controls      and Procedures.**

*Quarterly      Evaluation*

*CEO      and CFO Certifications*

*Disclosure      Controls and Procedures and Internal Control over Financial      Reporting*

|   | · | pertain                to the maintenance of records that in reasonable detail accurately                and                fairly reflect the transactions and dispositions of the Company’s                assets; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | provide                reasonable assurance that transactions are recorded as necessary                to permit                preparation of financial statements in accordance with generally                accepted                accounting principles, and that the Company’s receipts and expenditures                are being made only in accordance with authorizations of management                or the                Company’s Board of Directors; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | provide                reasonable assurance regarding prevention or timely detection of                unauthorized acquisition, use or disposition of the Company’s assets that                could have a material adverse effect on the Company’s financial                statements. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Limitations      on the Effectiveness of Controls*

*Scope      of the Assessments*

*Evaluation      of the Effectiveness of Disclosure Controls and Procedures*

*Changes      in Internal Control over Financial Reporting*

----

----

|   | 2.1 | Agreement                and Plan of Merger by and between the Registrant and CNL Restaurant                Properties, Inc., dated as of August 9, 2004 (previously filed as                Exhibit                2.1 to the Registrant’s current report on Form 8-K filed on August 10,                2004 and incorporated herein by                reference). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.2 | Agreements                and Plans of Merger by and among the Registrant, a separate, wholly-owned                subsidiary of the operating partnership of the Registrant and each                of the                18 CNL Income Funds (previously filed as Exhibits 2.2 - 2.19 to the                Registrant’s current report on Form 8-K filed on August 10, 2004 and                incorporated herein by reference). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.1 | Restated                Articles of Incorporation of the Registrant dated November 11, 1997,                as                amended by the Articles of Amendment to the Articles of Restatement                of the                Registrant dated February 24, 2005 and the Articles of Amendment                to the                Articles of Restatement of the Registrant dated February 24, 2005                (previously filed as Exhibit 3.1 to the Registrant’s quarterly report on                Form 10-Q for the fiscal quarter ended March 31, 2005 and incorporated                herein by reference). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2 | Third                Amended and Restated Bylaws (previously filed as Exhibit 3.1 on the                Company’s current report on Form 8-K filed on August 15, 2005 and                incorporated herein by reference). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1 | Specimen                of Common Stock Certificate (previously filed as Exhibit 4.1 to the                Registrant’s Registration Statement on Form S-4 (File No. 333-21403) and                incorporated herein by reference). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.2 | Articles                Supplementary Classifying and Designating a Series of Preferred Stock                as                Series A Cumulative Convertible Preferred Stock (previously filed                as                Exhibit 3.2 to the Registrant’s current report on Form 8-K filed on                November 14, 1997 and incorporated herein by                reference). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.3 | Amendment                to Articles Supplementary Classifying and Designating a Series of                Preferred Stock as Series A Cumulative Convertible Preferred Stock                (previously filed as Exhibit 3.2 to the Registrant’s current report on                Form 8-K filed on February 25, 2005 and incorporated herein by                reference). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.4 | Articles                Supplementary Classifying and Designating a Series of Preferred Stock                as                8% Series B Convertible Preferred Stock (previously filed as Exhibit                4.01                to the Registrant’s Form 10-Q for the fiscal quarter ended June 30, 2003                and incorporated herein by                reference). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.5 | Articles                Supplementary Classifying and Designating a Series of Preferred Stock                as                8% Series B-1 Convertible Preferred Stock (previously filed as Exhibit                99.5 to the Registrant’s current report on Form 8-K filed on September 16,                2004 and incorporated herein by                reference). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.6 | Articles                Supplementary Establishing and Fixing The Rights and Preferences                of 7.5%                Series C Redeemable Convertible Preferred Stock (previously filed                as                Exhibit 4.1 to the Registrant’s registration statement on Form 8-A (File                No. 001-13089) and incorporated herein by                reference). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.7 | Specimen                of 7.5% Series C Redeemable Convertible Preferred Stock Certificate                (previously filed as Exhibit 4.2 to the Registrant’s registration                statement on Form 8-A (File No. 001-13089) and incorporated herein                by                reference). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.8 | Indenture                dated as of March 4, 2005, among Net Lease Funding 2005, LP, MBIA                Insurance Corporation and Wells Fargo Bank, N.A., as indenture trustee                relating to $275,000,000 Triple Net Lease Mortgage Notes, Series                2005                (previously filed as Exhibit 99.1 to the Registrant’s current report on                Form 8-K filed on March 10, 2005 and incorporated herein by                reference). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 4.9 | Securities                Purchase Agreement relating to the Series B Preferred Stock (previously                filed as Exhibit 4.02 to the Registrant’s Form 10-Q for the fiscal quarter                ended June 30, 2003 and incorporated herein by                reference). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.10 | Registration                Rights Agreement relating to Series B Preferred Stock (previously                filed as                Exhibit 4.03 to the Registrant’s Form 10-Q for the fiscal quarter ended                June 30, 2003 and incorporated herein by                reference). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.11 | Stock                Purchase Warrant - Omnicron Master Trust (previously filed as Exhibit                4.04                to the Registrant’s Form 10-Q for the fiscal quarter ended June 30, 2003                and incorporated herein by                reference). |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.12 | Stock                Purchase Warrant - The Riverview Group, LLC (previously filed as                Exhibit                4.05 to the Registrant’s Form 10-Q for the fiscal quarter ended June 30,                2003 and incorporated herein by                reference). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.13 | Registration                Rights Agreement by and between the Registrant, LSF3 Capital Investments                I, LLC and LSF3 Capital Investments II, LLC dated as of March 9,                2001                (previously filed as Exhibit 10.5 to the Schedule 13D filed by LSF3                Capital Investments I, LLC, and the other reporting persons named                therein,                on March 19, 2001 and incorporated herein by                reference). |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.14 | Indenture,                dated as of March 23, 2005, between the Registrant and Wells Fargo                Bank,                National Association, as trustee, relating to the Registrant’s 7 1⁄2% Senior                Noted due 2015 (previously filed as Exhibit 4.1 to the Registrant’s                current report on Form 8-K filed on March 28, 2005 and incorporated                herein                by reference). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4* | Pursuant                to Regulation S-K Item 601(b)(4)(iii), the Registrant by this filing                agrees, upon request, to furnish to the Securities and Exchange Commission                a copy of instruments defining the rights of holders of long-term                debt of                the Registrant. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | Registrant                Flexible Incentive Plan (previously filed as Exhibit 10.1 to the                Registrant’s Form 10-Q for the fiscal quarter ended March 31, 2003 and                incorporated herein by reference). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.7 | Bridge                Credit Agreement dated as of February 25, 2005, by and among the                Registrant, as borrower, certain subsidiaries of the Registrant,                as                guarantors, Bank of America, N.A., as Administrative Agent, L/C Issuer                and                Swing Line Lender, and certain other lenders party thereto, and Banc                of                America Securities LLC, as Sole Lead Arranger and Sole Book Manager                (previously filed as Exhibit 10.1 to the Registrant’s current report on                Form 8-K filed on March 3, 2005 and incorporated herein by                reference). |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.8 | Bridge                Credit Agreement dated as of February 25, 2005, by and among Net                Lease                Funding 2005, LP, as borrower, Bank of America, as Administrative                Agent,                and certain other lenders party thereto, and Banc of America Securities                LLC, as Sole Lead Arranger and Sole Book Manager (previously filed                as                Exhibit 10.2 to the Registrant’s current report on Form 8-K filed on March                3, 2005 and incorporated herein by                reference). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.9 | Credit                Agreement, dated as of April 8, 2005, by and among the Registrant,                as                borrower, certain subsidiaries of the Registrant, as guarantors,                Bank of                America, N.A., as Administrative Agent, L/C Issuer and Swing Line                Lender,                Bank of America Securities LLC, as Sole Lead Arranger and Sole Book                Manager, Key Bank, National Association, as Syndication Agent, Credit                Suisse First Boston, Societe Generale, and Wachovia Bank National                Association, as Co-Documentation Agents, and the lenders party thereto                (previously filed as Exhibit 10.1 to the Registrant’s current report on                Form 8-K filed on April 13, 2005 and incorporated herein by                reference). |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 10.10 | Pledge                Agreement, dated as of April 8, 2005, by substantially all of the                Borrower’s domestic subsidiaries, in favor of Bank of America, N.A., in                its capacity as Administrative Agent (previously filed as Exhibit                10.2 to                the Registrant’s current report on Form 8-K filed on April 13, 2005 and                incorporated herein by reference). |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.1 | Certification                of Chief Executive Officer pursuant to Rule 13a-14(a) as adopted                pursuant                to Section 302 of the Sarbanes-Oxley Act of 2002 (filed                herewith). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification                of Chief Financial Officer pursuant to Rule 13a-14(a) as adopted                pursuant                to Section 302 of the Sarbanes-Oxley Act of 2002 (filed                herewith). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed                herewith). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.2 | Certification                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed                herewith). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

| Date:                November 9, 2005 | TRUSTREET                PROPERTIES, INC. |
|---------------------------------------|-------------------------------------------|
|                                  |                                      |
|                                  | By:                                       |   |
|                                  |                                      |   |
|                                  |                                      | /s/                CURTIS B. MCWILLIAMS |
|                                  |                                      | Curtis                B. McWilliams |
|                                  |                                      | Chief                Executive Officer |
|                                  |                                      |   |
|                                  |                                      |   |
|                                  | By:                                       |   |
|                                  |                                      |   |
|                                  |                                      | /s/                STEVEN D. SHACKELFORD |
|                                  |                                      | Steven                D. Shackelford |
|                                  |                                      | Chief                Financial Officer |
|                                  |                                      |   |

----

**EXHIBIT      INDEX**

|   | 2.1 | Agreement                and Plan of Merger by and between the Registrant and CNL Restaurant                Properties, Inc., dated as of August 9, 2004 (previously filed as                Exhibit                2.1 to the Registrant’s current report on Form 8-K filed on August 10,                2004 and incorporated herein by                reference). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.2 | Agreements                and Plans of Merger by and among the Registrant, a separate, wholly-owned                subsidiary of the operating partnership of the Registrant and each                of the                18 CNL Income Funds (previously filed as Exhibits 2.2 - 2.19 to the                Registrant’s current report on Form 8-K filed on August 10, 2004 and                incorporated herein by reference). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.1 | Restated                Articles of Incorporation of the Registrant dated November 11, 1997,                as                amended by the Articles of Amendment to the Articles of Restatement                of the                Registrant dated February 24, 2005 and the Articles of Amendment                to the                Articles of Restatement of the Registrant dated February 24, 2005                (previously filed as Exhibit 3.1 to the Registrant’s quarterly report on                Form 10-Q for the fiscal quarter ended March 31, 2005 and incorporated                herein by reference). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2 | Third                Amended and Restated Bylaws (previously filed as Exhibit 3.1 on the                Company’s current report on Form 8-K filed on August 15, 2005 and                incorporated herein by reference). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1 | Specimen                of Common Stock Certificate (previously filed as Exhibit 4.1 to the                Registrant’s Registration Statement on Form S-4 (File No. 333-21403) and                incorporated herein by reference). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.2 | Articles                Supplementary Classifying and Designating a Series of Preferred Stock                as                Series A Cumulative Convertible Preferred Stock (previously filed                as                Exhibit 3.2 to the Registrant’s current report on Form 8-K filed on                November 14, 1997 and incorporated herein by                reference). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.3 | Amendment                to Articles Supplementary Classifying and Designating a Series of                Preferred Stock as Series A Cumulative Convertible Preferred Stock                (previously filed as Exhibit 3.2 to the Registrant’s current report on                Form 8-K filed on February 25, 2005 and incorporated herein by                reference). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.4 | Articles                Supplementary Classifying and Designating a Series of Preferred Stock                as                8% Series B Convertible Preferred Stock (previously filed as Exhibit                4.01                to the Registrant’s Form 10-Q for the fiscal quarter ended June 30, 2003                and incorporated herein by                reference). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.5 | Articles                Supplementary Classifying and Designating a Series of Preferred Stock                as                8% Series B-1 Convertible Preferred Stock (previously filed as Exhibit                99.5 to the Registrant’s current report on Form 8-K filed on September 16,                2004 and incorporated herein by                reference). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.6 | Articles                Supplementary Establishing and Fixing The Rights and Preferences                of 7.5%                Series C Redeemable Convertible Preferred Stock (previously filed                as                Exhibit 4.1 to the Registrant’s registration statement on Form 8-A (File                No. 001-13089) and incorporated herein by                reference). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.7 | Specimen                of 7.5% Series C Redeemable Convertible Preferred Stock Certificate                (previously filed as Exhibit 4.2 to the Registrant’s registration                statement on Form 8-A (File No. 001-13089) and incorporated herein                by                reference). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.8 | Indenture                dated as of March 4, 2005, among Net Lease Funding 2005, LP, MBIA                Insurance Corporation and Wells Fargo Bank, N.A., as indenture trustee                relating to $275,000,000 Triple Net Lease Mortgage Notes, Series                2005                (previously filed as Exhibit 99.1 to the Registrant’s current report on                Form 8-K filed on March 10, 2005 and incorporated herein by                reference). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 4.9 | Securities                Purchase Agreement relating to the Series B Preferred Stock (previously                filed as Exhibit 4.02 to the Registrant’s Form 10-Q for the fiscal quarter                ended June 30, 2003 and incorporated herein by                reference). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.10 | Registration                Rights Agreement relating to Series B Preferred Stock (previously                filed as                Exhibit 4.03 to the Registrant’s Form 10-Q for the fiscal quarter ended                June 30, 2003 and incorporated herein by                reference). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.11 | Stock                Purchase Warrant - Omnicron Master Trust (previously filed as Exhibit                4.04                to the Registrant’s Form 10-Q for the fiscal quarter ended June 30, 2003                and incorporated herein by                reference). |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.12 | Stock                Purchase Warrant - The Riverview Group, LLC (previously filed as                Exhibit                4.05 to the Registrant’s Form 10-Q for the fiscal quarter ended June 30,                2003 and incorporated herein by                reference). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.13 | Registration                Rights Agreement by and between the Registrant, LSF3 Capital Investments                I, LLC and LSF3 Capital Investments II, LLC dated as of March 9,                2001                (previously filed as Exhibit 10.5 to the Schedule 13D filed by LSF3                Capital Investments I, LLC, and the other reporting persons named                therein,                on March 19, 2001 and incorporated herein by                reference). |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.14 | Indenture,                dated as of March 23, 2005, between the Registrant and Wells Fargo                Bank,                National Association, as trustee, relating to the Registrant’s 7 1⁄2% Senior                Noted due 2015 (previously filed as Exhibit 4.1 to the Registrant’s                current report on Form 8-K filed on March 28, 2005 and incorporated                herein                by reference). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4* | Pursuant                to Regulation S-K Item 601(b)(4)(iii), the Registrant by this filing                agrees, upon request, to furnish to the Securities and Exchange Commission                a copy of instruments defining the rights of holders of long-term                debt of                the Registrant. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | Registrant                Flexible Incentive Plan (previously filed as Exhibit 10.1 to the                Registrant’s Form 10-Q for the fiscal quarter ended March 31, 2003 and                incorporated herein by reference). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.7 | Bridge                Credit Agreement dated as of February 25, 2005, by and among the                Registrant, as borrower, certain subsidiaries of the Registrant,                as                guarantors, Bank of America, N.A., as Administrative Agent, L/C Issuer                and                Swing Line Lender, and certain other lenders party thereto, and Banc                of                America Securities LLC, as Sole Lead Arranger and Sole Book Manager                (previously filed as Exhibit 10.1 to the Registrant’s current report on                Form 8-K filed on March 3, 2005 and incorporated herein by                reference). |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.8 | Bridge                Credit Agreement dated as of February 25, 2005, by and among Net                Lease                Funding 2005, LP, as borrower, Bank of America, as Administrative                Agent,                and certain other lenders party thereto, and Banc of America Securities                LLC, as Sole Lead Arranger and Sole Book Manager (previously filed                as                Exhibit 10.2 to the Registrant’s current report on Form 8-K filed on March                3, 2005 and incorporated herein by                reference). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.9 | Credit                Agreement, dated as of April 8, 2005, by and among the Registrant,                as                borrower, certain subsidiaries of the Registrant, as guarantors,                Bank of                America, N.A., as Administrative Agent, L/C Issuer and Swing Line                Lender,                Bank of America Securities LLC, as Sole Lead Arranger and Sole Book                Manager, Key Bank, National Association, as Syndication Agent, Credit                Suisse First Boston, Societe Generale, and Wachovia Bank National                Association, as Co-Documentation Agents, and the lenders party thereto                (previously filed as Exhibit 10.1 to the Registrant’s current report on                Form 8-K filed on April 13, 2005 and incorporated herein by                reference). |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.10 | Pledge                Agreement, dated as of April 8, 2005, by substantially all of the                Borrower’s domestic subsidiaries, in favor of Bank of America, N.A., in                its capacity as Administrative Agent (previously filed as Exhibit                10.2 to                the Registrant’s current report on Form 8-K filed on April 13, 2005 and                incorporated herein by reference). |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.1 | Certification                of Chief Executive Officer pursuant to Rule 13a-14(a) as adopted                pursuant                to Section 302 of the Sarbanes-Oxley Act of 2002 (filed                herewith). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification                of Chief Financial Officer pursuant to Rule 13a-14(a) as adopted                pursuant                to Section 302 of the Sarbanes-Oxley Act of 2002 (filed                herewith). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed                herewith). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.2 | Certification                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed                herewith). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|