10-K 1 b412114_10k.htm FORM 10-K Prepared and filed by St Ives Burrups
 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 10-K
 
(Mark One)
 
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
 
For the fiscal year ended December 31, 2005
 
OR
 
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
 
For the transition period from ____________ to ____________
 
Commission file number  1-10899
 
Kimco Realty Corporation
(Exact name of registrant as specified in its charter)
 
Maryland
 
13-2744380
 
(State of incorporation)
 
(I.R.S. Employer Identification No.)
 
 
 
3333 New Hyde Park Road, New Hyde Park, NY
 
11042-0020
 
(Address of principal executive offices)
 
Zip Code
 
 
 
Registrant’s telephone number, including area code  (516) 869-9000
 
Securities registered pursuant to Section 12(b) of the Act:
 
 
 
 
Title of each class
 
Name of each exchange on which registered
 
Common Stock, par value $.01 per share.
 
New York Stock Exchange
 
 
 
Depositary Shares, each representing one-tenth of a share of 6.65% Class F Cumulative Redeemable Preferred Stock, par value $1.00 per share.
 
New York Stock Exchange
 
 
 
Securities registered pursuant to Section 12(g) of the Act:
 
 
 
 
 
None
 
          Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes       No  
 
          Indicate by check mark whether the Registrant (i) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (ii) has been subject to such filing requirements for the past 90 days.  Yes       No  
 
          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  
 
          Indicate by check mark whether the Registrant is an accelerated filer (as defined in rule 12b-2 of the Act.) Yes       No  
 
          Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12-b-2 of the Exchange Act).  Yes       No  
 
          The aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $6.9 billion based upon the closing price on the New York Stock Exchange for such stock on January 31, 2006.
 
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
 
          Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date.
 
228,216,802 shares as of January 31, 2006.
 
Page 1 of 232

 
DOCUMENTS INCORPORATED BY REFERENCE
 
Part III incorporates certain information by reference to the Registrant’s definitive proxy statement to be filed with respect to the Annual Meeting of Stockholders expected to be held on May 18, 2006.
 
Index to Exhibits begins on page 57.
 
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TABLE OF CONTENTS
 
Item No.
 
Form
10-K
Report
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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PART I
 
FORWARD-LOOKING STATEMENTS
 
This annual report on Form 10-K, together with other statements and information publicly disseminated by Kimco Realty Corporation (the “Company” or “Kimco”) contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions.  Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions.  You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and which could materially affect actual results, performances or achievements.  Factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) general economic and local real estate conditions, (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or general downturn in their business, (iii) financing risks, such as the inability to obtain equity or debt financing on favorable terms, (iv) changes in governmental laws and regulations, (v) the level and volatility of interest rates and foreign currency exchange rates, (vi) the availability of suitable acquisition opportunities and (vii) increases in operating costs.  Accordingly, there is no assurance that the Company’s expectations will be realized.
 
SHARE SPLIT
 
As of August 23, 2005, the Company effected a two-for-one split (the “Stock Split”) of the Company’s common stock in the form of a stock dividend paid to stockholders of record on August 8, 2005.  All common share and per common share data included in this annual report on Form 10-K and the accompanying Consolidated Financial Statements and Notes thereto have been adjusted to reflect this Stock Split.
 
Item 1.     Business
 
General  Kimco Realty Corporation, a Maryland corporation, is one of the nation’s largest owners and operators of neighborhood and community shopping centers.  The Company is a self-administered real estate investment trust (“REIT”) and manages its properties through present management, which has owned and operated neighborhood and community shopping centers for over 45 years.  The Company has not engaged, nor does it expect to retain, any REIT advisors in connection with the operation of its properties.  As of February 6, 2006, the Company had interests in 1,046 properties, totaling approximately 135.5 million square feet of gross leasable area (“GLA”) located in 44 states, Canada and Mexico.  In addition, the Company manages 11 properties totaling 1.7 million square feet of GLA on behalf of third party owners.  The Company’s ownership interests in real estate consist of its consolidated portfolio and in portfolios where the Company owns an economic interest, such as: Kimco Income REIT (“KIR”), the RioCan Venture (“RioCan Venture”), Kimco Retail Opportunity Portfolio (“KROP”) and other properties or portfolios where the Company also retains management (See Recent Developments – Operating Real Estate Joint Venture Investments and Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K).  The Company believes its portfolio of neighborhood and community shopping center properties is the largest (measured by GLA) currently held by any publicly-traded REIT.
 
The Company’s executive offices are located at 3333 New Hyde Park Road, New Hyde Park, New York 11042-0020 and its telephone number is (516) 869-9000.  Unless the context indicates otherwise, the term the “Company” as used herein is intended to include subsidiaries of the Company.
 
The Company’s web site is located at http://www.Kimcorealty.com.  On the Company’s web site you can obtain, free of charge, a copy of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended, as soon as reasonably practicable after we file such material electronically with, or furnish it to, the Securities and Exchange Commission (the “SEC”).
 
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History  The Company began operations through its predecessor, The Kimco Corporation, which was organized in 1966 upon the contribution of several shopping center properties owned by its principal stockholders.  In 1973, these principals formed the Company as a Delaware corporation, and in 1985, the operations of The Kimco Corporation were merged into the Company.  The Company completed its initial public stock offering (the “IPO”) in November 1991, and commencing with its taxable year which began January 1, 1992, elected to qualify as a REIT in accordance with Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”).  In 1994, the Company reorganized as a Maryland corporation.
 
The Company’s growth through its first 15 years resulted primarily from the ground-up development and construction of its shopping centers.  By 1981, the Company had assembled a portfolio of 77 properties that provided an established source of income and positioned the Company for an expansion of its asset base.  At that time, the Company revised its growth strategy to focus on the acquisition of existing shopping centers and creating value through the redevelopment and re-tenanting of those properties.  As a result of this strategy, substantially all of the operating shopping centers added to the Company’s portfolio since 1981 have been through the acquisition of existing shopping centers.
 
During 1998, the Company, through a merger transaction, completed the acquisition of The Price REIT, Inc., a Maryland corporation, (the “Price REIT”).  Prior to the merger, Price REIT was a self-administered and self-managed equity REIT that was primarily focused on the acquisition, development, management and redevelopment of large retail community shopping center properties concentrated in the western part of the United States.  In connection with the merger, the Company acquired interests in 43 properties, located in 17 states.  With the completion of the Price REIT merger, the Company expanded its presence in certain western states including California, Arizona and Washington.  In addition, Price REIT had strong ground-up development capabilities.  These development capabilities, coupled with the Company’s own construction management expertise, provide the Company, on a selective basis, the ability to pursue ground-up development opportunities.
 
Also during 1998, the Company formed KIR, an entity in which the Company held a 99.99% limited partnership interest.  KIR was established for the purpose of investing in high-quality properties financed primarily with individual non-recourse mortgages.  The Company believed that these properties were appropriate for financing with greater leverage than the Company traditionally used.  At the time of formation, the Company contributed 19 properties to KIR, each encumbered by an individual non-recourse mortgage.  During 1999, KIR sold a significant interest in the partnership to institutional investors.  As of December 31, 2005, the Company holds a 43.3% non-controlling limited partnership interest in KIR and accounts for its investment in KIR under the equity method of accounting.  (See Recent Developments – Operating Real Estate Joint Venture Investments and Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.)
 
The Company has expanded its management business through the establishment of other various institutional joint venture programs in which the Company has non-controlling interests ranging from generally 5% to 30%.  The Company earns management fees, acquisition fees, disposition fees and promoted interests based on value creation. (See Recent Developments – Operating Real Estate Joint Venture Investments and Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.)
 
In connection with the Tax Relief Extension Act of 1999 (the “RMA”) which became effective January 1, 2001, the Company is now permitted to participate in activities which it was precluded from previously in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code, subject to certain limitations.  As such, the Company, through its taxable REIT subsidiaries, is engaged in various retail real estate related opportunities, including (i) merchant building through its wholly-owned taxable REIT subsidiary, Kimco Developers, Inc. (“KDI”), which is primarily engaged in the ground-up development of neighborhood and community shopping centers and subsequent sale thereof upon completion (see Recent Developments – Ground-Up Developments), (ii) retail real estate advisory and disposition services, which primarily focus on leasing and disposition strategies for real estate property interests of both healthy and distressed retailers and (iii) acting as an agent or principal in connection with tax deferred exchange transactions.  The Company will consider other investments through taxable REIT subsidiaries should suitable opportunities arise.
 
The Company has continued its geographic expansion with investments in Canada and Mexico. During October 2001, the Company formed the RioCan Venture with RioCan Real Estate Investment Trust (“RioCan”, Canada’s largest publicly traded REIT measured by GLA) in
 
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which the Company has a 50% non-controlling interest, to acquire retail properties and development projects in Canada.  The Company accounts for this investment under the equity method of accounting.  The Company has expanded its presence in Canada with the establishment of other joint venture arrangements.  During 2002, the Company, along with various strategic co-investment partners, began acquiring operating and development properties located in Mexico (see Recent Developments – Operating Real Estate Joint Venture Investments and Notes 3 and 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K).
 
In addition, the Company continues to capitalize on its established expertise in retail real estate by establishing other ventures in which the Company owns a smaller equity interest and provides management, leasing and operational support for those properties.  The Company also provides preferred equity capital for real estate entrepreneurs and provides real estate capital and advisory services to both healthy and distressed retailers.  The Company also makes selective investments in secondary market opportunities where a security or other investment is, in management’s judgment, priced below the value of the underlying real estate.
 
Investment and Operating Strategy  The Company’s investment objective has been to increase cash flow, current income and, consequently, the value of its existing portfolio of properties, and to seek continued growth through (i) the strategic re-tenanting, renovation and expansion of its existing centers and (ii) the selective acquisition of established income-producing real estate properties and properties requiring significant re-tenanting and redevelopment, primarily in neighborhood and community shopping centers in geographic regions in which the Company presently operates.  The Company will consider investments in other real estate sectors and in geographic markets where it does not presently operate should suitable opportunities arise.
 
The Company’s neighborhood and community shopping center properties are designed to attract local area customers and typically are anchored by a discount department store, a supermarket or a drugstore tenant offering day-to-day necessities rather than high-priced luxury items.  The Company may either purchase or lease income-producing properties in the future, and may also participate with other entities in property ownership through partnerships, joint ventures or similar types of co-ownership.  Equity investments may be subject to existing mortgage financing and/or other indebtedness.  Financing or other indebtedness may be incurred simultaneously or subsequently in connection with such investments.  Any such financing or indebtedness will have priority over the Company’s equity interest in such property. The Company may make loans to joint ventures in which it may or may not participate.
 
In addition to property or equity ownership, the Company provides property management services for fees relating to the management, leasing, operation, supervision and maintenance of real estate properties.
 
While the Company has historically held its properties for long-term investment, and accordingly has placed strong emphasis on its ongoing program of regular maintenance, periodic renovation and capital improvement, it is possible that properties in the portfolio may be sold, in whole or in part, as circumstances warrant, subject to REIT qualification rules.
 
The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties and a large tenant base.  At December 31, 2005, the Company’s single largest neighborhood and community shopping center accounted for only 1.2% of the Company’s annualized base rental revenues and only 0.8% of the Company’s total shopping center GLA.  At December 31, 2005, the Company’s five largest tenants were The Home Depot, TJX Companies, Sears Holdings, Kohl’s, and Royal Ahold, which represent approximately 3.6%, 3.2%, 2.7%, 2.5% and 2.0%, respectively, of the Company’s annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest.
 
In connection with the RMA, which became effective January 1, 2001, the Company has expanded its investment and operating strategy to include new real estate related opportunities which the Company was precluded from previously in order to maintain its qualification as a REIT.  As such, the Company, has established a merchant building business through its KDI subsidiary.  KDI makes selective acquisitions of land parcels for the ground-up development of neighborhood and community shopping centers and subsequent sale thereof upon completion.  Additionally, the Company has developed a business which specializes in providing capital, real estate advisory services and disposition services of real estate controlled by both healthy and distressed and/or bankrupt retailers.  These services may include assistance with inventory and fixture liquidation in connection with going-out-of-business sales.  The Company may participate with other entities in providing
 
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these advisory services through partnerships, joint ventures or other co-ownership arrangements. The Company, as a regular part of its investment strategy, will continue to actively seek investments for its taxable REIT subsidiaries.
 
The Company emphasizes equity real estate investments including preferred equity investments, but may, at its discretion, invest in mortgages, other real estate interests and other investments. The mortgages in which the Company may invest may be either first mortgages, junior mortgages or other mortgage-related securities.  The Company provides mortgage financing to retailers with significant real estate assets, in the form of lease- hold interests or fee-owned properties, where the Company believes the underlying value of the real estate collateral is in excess of its loan balance.  In addition, the Company will acquire debt instruments at a discount in the secondary market where the Company believes the real estate value of the enterprise is substantially greater than the current value.
 
The Company may legally invest in the securities of other issuers, for the purpose, among others, of exercising control over such entities, subject to the gross income and asset tests necessary for REIT qualification.  The Company may, on a selective basis, acquire all or substantially all securities or assets of other REITs or similar entities where such investments would be consistent with the Company’s investment policies.  In any event, the Company does not intend that its investments in securities will require it to register as an “investment company” under the Investment Company Act of 1940.
 
The Company has authority to offer shares of capital stock or other senior securities in exchange for property and to repurchase or otherwise reacquire its common stock or any other securities and may engage in such activities in the future.  At all times, the Company intends to make investments in such a manner as to be consistent with the requirements of the Code to qualify as a REIT unless, because of circumstances or changes in the Code (or in Treasury Regulations), the Board of Directors determines that it is no longer in the best interests of the Company to qualify as a REIT.
 
The Company’s policies with respect to the aforementioned activities may be reviewed and modified from time to time by the Company’s Board of Directors without the vote of the Company’s stockholders.
 
Capital Strategy and Resources  The Company intends to operate with and maintain a conservative capital structure with a level of debt to total market capitalization of approximately 50% or less.  As of December 31, 2005, the Company’s level of debt to total market capitalization was 26%.  In addition, the Company intends to maintain strong debt service coverage and fixed charge coverage ratios as part of its commitment to maintaining its investment-grade debt ratings.  It is management’s intention that the Company continually have access to the capital resources necessary to expand and develop its business.  Accordingly, the Company may, from time to time, seek to obtain funds through additional equity offerings, unsecured debt financings and/or mortgage/construction loan financings and other capital alternatives in a manner consistent with its intention to operate with a conservative debt structure.
 
Since the completion of the Company’s IPO in 1991, the Company has utilized the public debt and equity markets as its principal source of capital for its expansion needs.  Since the IPO, the Company has completed additional offerings of its public unsecured debt and equity, raising in the aggregate over $4.2 billion for the purposes of, among other things, repaying indebtedness, acquiring interests in neighborhood and community shopping centers, funding ground-up development projects, expanding and improving properties in the portfolio and other investments.
 
During July 2005, the Company established a new $850.0 million unsecured credit facility, (the “Credit Facility”) which is scheduled to expire in July 2008. This Credit Facility replaces the Company’s $500.0 million unsecured credit facility, which was scheduled to expire in June 2006. Under the Credit Facility, funds may be borrowed for general corporate purposes, including the funding of (i) property acquisitions, (ii) development and redevelopment costs and (iii) any short-term working capital requirements.  Interest on borrowings under the Credit Facility accrue at a spread (currently 0.45%) to LIBOR and fluctuates in accordance with changes in the Company’s senior debt ratings.  As part of this Credit Facility, the Company has a competitive bid option whereby the Company may auction up to $425.0 million of its requested borrowings to the bank group.  This competitive bid option provides the Company the opportunity to obtain pricing below the currently stated spread to LIBOR of 0.45%.  A facility fee of 0.125% per annum is payable quarterly in arrears. In addition, the Company has a $200.0 million sub-limit which provides it the opportunity to borrow in alternative currencies such as Pounds Sterling, Japanese Yen or Euros.  Pursuant to the terms of the Credit Facility, the Company, among other things, is (i) subject to maintaining certain maximum leverage ratios on both
 
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unsecured senior corporate debt and minimum unencumbered asset and equity levels, and (ii) restricted from paying dividends in amounts that exceed 95% of funds from operations, as defined.  As of December 31, 2005, there was $200.0 million outstanding under this credit facility.
 
During September 2004, the Company entered into a three-year Canadian denominated (“CAD”) $150.0 million unsecured revolving credit facility with a group of banks.  This facility bears interest at the CDOR Rate, as defined, plus 0.50% and was scheduled to expire in September 2007.  During March 2005, this facility was increased to CAD $250.0 million and the scheduled maturity date was extended to March 2008.  During January 2006, the facility was further amended to reduce the borrowing spread to 0.45% and to modify the covenant package to conform to the Company’s $850.0 million U.S. Credit Facility.  Proceeds from this facility will be used for general corporate purposes including the funding of Canadian denominated investments.  As of December 31, 2005, there was CAD $110.0 million (approximately USD $94.7 million) outstanding under this facility.
 
During May 2005, the Company entered into a three-year Mexican Peso denominated (“MXP”) 500.0 million unsecured revolving credit facility.  This facility bears interest at the TIIE Rate, as defined, plus 1.00% and is scheduled to expire in May 2008.  Proceeds from this facility will be used to fund peso denominated investments.  As of December 31, 2005, there was MXP 500.0 million (approximately USD $46.5 million) outstanding under this facility.
 
The Company also has a medium-term notes (“MTN”) program pursuant to which it may, from time to time, offer for sale its senior unsecured debt for any general corporate purposes, including (i) funding specific liquidity requirements in its business, including property acquisitions, development and redevelopment costs, and (ii) managing the Company’s debt maturities.  As of December 31, 2005, the Company had $250.0 million available for issuance under the MTN program.  (See Note 11 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.)
 
In addition to the public debt and equity markets as capital sources, the Company may, from time-to-time, obtain mortgage financing on selected properties and construction loans to partially fund the capital needs of KDI.  As of December 31, 2005, the Company’s consolidated property portfolio had over 380 unencumbered property interests representing over 87% of the Company’s net operating income.
 
During July 2005, the Company filed a shelf registration on Form S-3 for up to $1.0 billion of debt securities, preferred stock, depositary shares, common stock and common stock warrants.  As of December 31, 2005, the Company had approximately $750.0 million available for issuance under this shelf registration statement.
 
The Company anticipates that cash flows from operating activities will continue to provide adequate capital to fund its operating and administrative expenses, regular debt service obligations and the payment of dividends in accordance with REIT requirements in both the short term and long term.  In addition, the Company anticipates that cash on hand, free cash flow generated by the operating business, availability under its revolving credit facilities, issuance of equity and public debt, as well as other debt and equity alternatives, will provide the necessary capital required by the Company.  Cash flow from operating activities (see Consolidated Statements of Cash Flows) was $410.8 million for the year ended December 31, 2005, as compared to $365.2 million for the year ended December 31, 2004.
 
Competition  As one of the original participants in the growth of the shopping center industry and one of the nation’s largest owners and operators of neighborhood and community shopping centers, the Company has established close relationships with a large number of major national and regional retailers and maintains a broad network of industry contacts.  Management is associated with and/or actively participates in many shopping center and REIT industry organizations.  Notwithstanding these relationships, there are numerous regional and local commercial developers, real estate companies, financial institutions and other investors who compete with the Company for the acquisition of properties and other investment opportunities and in seeking tenants who will lease space in the Company’s properties.
 
Inflation and Other Business Issues  Many of the Company’s leases contain provisions designed to mitigate the adverse impact of inflation.  Such provisions include clauses enabling the Company to receive payment of additional rent calculated as a percentage of tenants’ gross sales above predetermined thresholds (“Percentage Rents”), which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases.  Such escalation clauses include increases in the consumer price index or similar inflation indices.  In addition, many of the Company’s leases are
 
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for terms of less than 10 years, which permits the Company to seek to increase rents upon renewal to market rates.  Most of the Company’s leases require tenants to reimburse the Company for their allocable share of operating expenses, including common area maintenance costs, real estate taxes and insurance, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation.  The Company periodically evaluates its exposure to short-term interest rates and fluctuations in foreign currency exchange rates and will, from time-to-time, enter into interest rate protection agreements and foreign currency hedge agreements which mitigate, but do not eliminate, the effect of changes in interest rates on its floating-rate debt and changes in foreign currency exchange rates.
 
Operating Practices  Nearly all operating functions, including leasing, legal, construction, data processing, maintenance, finance and accounting are administered by the Company from its executive offices in New Hyde Park, New York and supported by the Company’s regional offices.  The Company believes it is critical to have a management presence in its principal areas of operation and accordingly, the Company maintains regional offices in various cities throughout the United States.  A total of 488 persons are employed at the Company’s executive and regional offices.
 
The Company’s regional offices are generally staffed by a manager and the support personnel necessary to both function as local representatives for leasing and promotional purposes and to complement the corporate office’s administrative and accounting efforts and to ensure that property inspection and maintenance objectives are achieved.  The regional offices are important in reducing the time necessary to respond to the needs of the Company’s tenants.  Leasing and maintenance personnel from the corporate office also conduct regular inspections of each shopping center.
 
The Company also employs a total of 15 persons at several of its larger properties in order to more effectively administer its maintenance and security responsibilities.
 
Qualification as a REIT  The Company has elected, commencing with its taxable year which began January 1, 1992, to qualify as a REIT under the Code.  If, as the Company believes, it is organized and operates in such a manner so as to qualify and remain qualified as a REIT under the Code, the Company generally will not be subject to federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code.
 
In connection with the RMA, which became effective January 1, 2001, the Company is now permitted to participate in activities which the Company was precluded from previously in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code, subject to certain limitations.  The primary activities conducted by the Company in its taxable REIT subsidiaries during 2005 included, but were not limited to, (i) the ground-up development of shopping center properties and subsequent sale thereof upon completion (see Recent Developments – Ground-Up Developments), (ii) real estate advisory and disposition services, and (iii) acting as an agent or principal in connection with tax deferred exchange transactions.  As such, the Company was subject to federal and state income taxes on the income from these activities.
 
Risk Factors  Set forth below are the material risks associated with the purchase and ownership of the Company’s equity and debt securities.  As an owner of real estate, the Company is subject to certain business risks arising in connection with the underlying real estate, including, among other factors, including the following:
 
i) Loss of the Company’s tax status as a real estate investment trust would have significant adverse consequences to the Company and the value of its securities.
 
The Company elected to be taxed as a REIT for federal income tax purposes under the Code commencing with our taxable year beginning January 1, 1992. The Company currently intend to operate so as to qualify as a REIT and believe that the Company’s current organization and method of operation comply with the rules and regulations promulgated under the Code to enable us to qualify as a REIT.
 
Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within the Company’s control may affect the Company’s ability to qualify as a REIT. For example, in order to qualify as a REIT, at least 95% of the Company’s gross income in any year must be derived from qualifying sources, and the Company must satisfy a number of requirements regarding the composition of the Company’s assets. Also, we must make distributions to stockholders aggregating annually at least 90% of the Company’s net taxable income, excluding capital gains. In addition, new legislation, regulations, administrative
 
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interpretations or court decisions could significantly change the tax laws with respect to qualification as a REIT, the federal income tax consequences of such qualification or the desirability of an investment in a REIT relative to other investments. Although the Company believes that it is organized and has operated in such a manner, the Company can give no assurance that it has qualified or will continue to qualify as a REIT for tax purposes.
 
If the Company loses its REIT status, it will face serious tax consequences that will substantially reduce the funds available to make payment of principal and interest on the debt securities the Company issues and to pay dividends to Company stockholders. If the Company fails to qualify as a REIT:
 
 
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the Company would not be allowed a deduction for distributions to stockholders in computing its  taxable income and would be subject to federal income tax at regular corporate rates;
 
 
 
 
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the Company also could be subject to the federal alternative minimum tax and possibly increased state and local taxes; and
 
 
 
 
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unless the Company was entitled to relief under statutory provisions, it could not elect to be subject to tax as a REIT for four taxable years following the year during which the Company were disqualified.
 
In addition, if the Company fails to qualify as a REIT, it would not be required to make distributions to stockholders.
 
As a result of all these factors, the Company’s failure to qualify as a REIT also could impair its ability to expand its business and raise capital, and would adversely affect the value of the Company’s securities.
 
ii) Adverse market conditions and competition may impede the Company’s ability to generate sufficient income to pay expenses and maintain properties.
 
The economic performance and value of the Company’s properties are subject to all of the risks associated with owning and operating real estate including:
 
 
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changes in the national, regional and local economic climate;
 
 
 
 
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local conditions, including an oversupply of space in properties like those that the Company owns, or a reduction in demand for properties like those that the Company owns;
 
 
 
 
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the attractiveness of the Company’s properties to tenants;
 
 
 
 
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the ability of tenants to pay rent;
 
 
 
 
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competition from other available properties;
     
 
•
changes in market rental rates;
 
 
 
 
•
the need to periodically pay for costs to repair, renovate and re-let space;
 
 
 
 
•
changes in operating costs, including costs for maintenance, insurance and real estate taxes;
 
 
 
 
•
the fact that the expenses of owning and operating properties are not necessarily reduced when circumstances such as market factors and competition cause a reduction in income from the properties; and
 
 
 
 
•
changes in laws and governmental regulations, including those governing usage, zoning, the environment and taxes.
 
iii) Downturns in the retailing industry likely will have a direct impact on the Company’s performance.
 
The Company’s properties consist primarily of community and neighborhood shopping centers and other retail properties. The Company’s performance therefore is linked to economic conditions in the market for retail space generally. The market for retail space has been or could be adversely affected by weakness in the national, regional and local economies, the adverse financial condition of some large retailing companies, the ongoing consolidation in the retail sector, the excess amount of retail space in a number of markets, and increasing consumer purchases through catalogues and the internet. To the extent that any of these conditions occur, they are likely to impact market rents for retail space.
 
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iv) Failure by any anchor tenant with leases in multiple locations to make rental payments to the Compnay, because of a deterioration of its financial condition or otherwise, could impact the Company’s performance.
 
The Company’s performance depends on its ability to collect rent from tenants. At any time, the Company’s tenants may experience a downturn in their business that may significantly weaken their financial condition. As a result, the Company’s tenants may delay a number of lease commencements, decline to extend or renew leases upon expiration, fail to make rental payments when due, close stores or declare bankruptcy. Any of these actions could result in the termination of the tenant’s leases and the loss of rental income attributable to the terminated leases. In addition, lease terminations by an anchor tenant or a failure by that anchor tenant to occupy the premises could result in lease terminations or reductions in rent by other tenants in the same shopping centers under the terms of some leases. In that event, the Company may be unable to re-lease the vacated space at attractive rents or at all. The occurrence of any of the situations described above, particularly if it involves a substantial tenant with leases in multiple locations, could impact the Company’s performance.
 
v) The Company may be unable to collect balances due from any tenants in bankruptcy.
 
The Company cannot give assurance that any tenant that files for bankruptcy protection will continue to pay rent. A bankruptcy filing by or relating to one of the Company’s tenants or a lease guarantor would bar all efforts by the Company to collect pre-bankruptcy debts from the tenant or the lease guarantor, or their property, unless the Company receives an order permitting it to do so from the bankruptcy court. A tenant or lease guarantor bankruptcy could delay the Company’s efforts to collect past due balances under the relevant leases, and could ultimately preclude collection of these sums. If a lease is assumed by the tenant in bankruptcy, all pre-bankruptcy balances due under the lease must be paid to the Company in full. However, if a lease is rejected by a tenant in bankruptcy, the Company would have only a general unsecured claim for damages. Any unsecured claim the Company holds may be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims, and there are restrictions under bankruptcy laws which limit the amount of the claim the Company can make if a lease is rejected. As a result, it is likely that the Company will recover substantially less than the full value of any unsecured claims it holds.
 
vi) Real estate property investments are illiquid, and therefore the Company may not be able to dispose of properties when appropriate or on favorable terms.
 
Real estate property investments generally cannot be disposed of quickly. In addition, the federal tax code imposes restrictions on a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies. Therefore, the Company may not be able to vary its portfolio in response to economic or other conditions promptly or on favorable terms.
 
vii) The Company does not have exclusive control over its joint venture investments, so the Company is unable to ensure that its objectives will be pursued.
 
The Company has invested in some cases as a co-venturer or partner in properties, instead of owning directly. These investments involve risks not present in a wholly-owned ownership structure. In these investments, the Company does not have exclusive control over the development, financing, leasing, management and other aspects of these investments. As a result, the co-venturer or partner might have interests or goals that are inconsistent with the Company’s interests or goals, take action contrary to the Company’s interests or otherwise impede the Company’s objectives. The co-venturer or partner also might become insolvent or bankrupt.
 
viii) The Company’s financial covenants may restrict its operating and acquisition activities.
 
The Company’s revolving credit facilities and the indenture under which the Company’s senior unsecured debt is issued contain certain financial and operating covenants, including, among other things, certain coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured debt, make dividend payments, sell all or substantially all of the Company’s assets and engage in mergers and consolidations and certain acquisitions. These covenants may restrict the Company’s ability to pursue certain business initiatives or certain acquisition transactions. In addition, failure to meet any of the financial covenants could cause an event of default under and/or accelerate some or all of the Company’s indebtedness, which would have a material adverse effect on the Company.
 
11
 
ix) The Company may be subject to environmental regulations.
 
Under various federal, state, and local laws, ordinances and regulations, the Company may be considered an owner or operator of real property and may be responsible for paying for the disposal or treatment of hazardous or toxic substances released on or in the Company’s property, as well as certain other potential costs which could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). This liability may be imposed whether or not the Company knew about, or were responsible for, the presence of hazardous or toxic substances.
 
x) The Company’s ability to lease or develop properties is subject to competitive pressures.
 
The Company faces competition in the acquisition, development, operation and sale of real property from individuals and businesses who own real estate, fiduciary accounts and plans and other entities engaged in real estate investment. Some of these competitors have greater financial resources than we do. This results in competition for the acquisition of properties, for tenants who lease or consider leasing space in the Company’s existing and subsequently acquired properties and for other real estate investment opportunities.
 
xi) Changes in market conditions could adversely affect the market price of the Company’s publicly traded securities.
 
As with other publicly traded securities, the market price of the Company’s publicly traded securities depends on various market conditions, which may change from time-to-time. Among the market conditions that may affect the market price of the Company’s publicly traded securities are the following:
 
 
•
the extent of institutional investor interest in the Company;
 
 
 
 
•
the reputation of REITs generally and the reputation of REITs with portfolios similar to the Company’s;
 
 
 
 
•
the attractiveness of the securities of REITs in comparison to securities issued by other entities (including securities issued by other real estate companies);
 
 
 
 
•
the Company’s financial condition and performance;
 
 
 
 
•
the market’s perception of the Company’s growth potential and potential future cash dividends;
 
 
 
 
•
an increase in market interest rates, which may lead prospective investors to demand a higher distribution rate in relation to the price paid for the Company’s shares; and
 
 
 
 
•
general economic and financial market conditions.
 
Recent Developments
 
Operating Properties -
 
          Acquisitions -
 
During January 2005, the Company acquired a shopping center property located in Clearwater, FL, comprising approximately 0.2 million square feet of gross leasable area (“GLA”), for a purchase price of approximately $17.7 million.
 
During March 2005, the Company acquired the remaining 40% interest in a shopping center property located in Temple, TX, in which the Company had previously owned a 60% interest, for a purchase price of approximately $0.9 million. During June 2005, the Company transferred this property to a newly formed joint venture in which the Company now has a 20% non-controlling interest.
 
Additionally, during March 2005, the Company acquired two operating properties, located in New York, NY, through newly formed joint ventures in which the Company holds 95% economic interests, for an aggregate purchase price of approximately $11.6 million.  Simultaneous with the closing, each property was encumbered with an individual non-recourse floating-rate mortgage aggregating approximately $9.1 million.  These loans mature in April 2007 and bear interest at LIBOR plus 2% and LIBOR plus 2.25% (6.39% and 6.64%, respectively, at December 31, 2005).  Based upon the provisions of FIN 46(R), the Company has determined
 
12
 
that these entities are variable interest entities (“VIE”). The Company has further determined that the Company is the primary beneficiary of these VIEs and has therefore consolidated these entities for financial reporting purposes.  The Company’s maximum exposure to loss associated with these entities is primarily limited to the Company’s aggregate capital investment, which was approximately $3.4 million at December 31, 2005.
 
During April 2005, the Company acquired an operating property located in Poway, CA, comprising approximately 0.1 million square feet of GLA, for a purchase price of approximately $19.5 million.
 
During June 2005, the Company acquired a portfolio of 45 operating properties, comprising approximately 0.3 million square feet of GLA, located in Virginia and Maryland, for a purchase price of approximately $85.3 million.  During August 2005, the Company obtained approximately $65.0 million of crossed-collateralized non-recourse mortgage debt encumbering all 45 operating properties.  This mortgage debt matures in September 2015 and bears interest at a fixed-rate of 4.94% per annum.  During September 2005, the entire portfolio of 45 properties and the associated debt was transferred to a newly formed unconsolidated joint venture in which the Company has a 15% non-controlling interest.
 
During 2005, the Company acquired ten self-storage facilities through an existing joint venture in which the Company held an approximate 93.5% economic interest, for a purchase price of approximately $39.9 million including the assumption of approximately $7.5 million of non-recourse fixed-rate mortgage debt encumbering three of the properties.  Upon completing these acquisitions, the venture owned 17 self-storage facilities located in various states.  The Company had cross-collateralized 14 of these properties with approximately $44.0 million of non-recourse floating-rate mortgage debt which was scheduled to mature in November 2007 and had an interest rate of LIBOR plus 2.75%. Based upon the provisions of FIN 46(R), the Company had determined that this entity was a VIE.  The Company had further determined that the Company was the primary beneficiary of this VIE and had therefore consolidated this entity for financial reporting purposes.  During November and December 2005, this entity disposed of, in separate transactions, four self-storage properties for an aggregate sales price of approximately $18.6 million which resulted in an aggregate gain of approximately $5.8 million.  Proceeds from these sales were used to pay down approximately $9.8 million of mortgage debt and provide distributions to the partners.  As a result of these transactions the Company’s economic interest significantly decreased and the entity became subject to the reconsideration provisions of FIN 46(R).  Based upon this reconsideration event and the provision of FIN 46(R), the Company has determined that this entity is no longer a VIE and has therefore deconsolidated this entity and will now account for this investment under the equity method of accounting.  As of December 31, 2005, this entity owned 13 self-storage properties.  Three of the properties are encumbered by approximately $7.4 million of fixed-rate individual non-recourse mortgage debt which bears interest at 5.5% per annum and is scheduled to mature in June 2013.  The remaining ten properties are cross-collateralized with approximately $33.3 million of variable-rate debt which bears interest at LIBOR plus 2.75% (7.09% at December 31, 2005) and is scheduled to mature in November 2007.  The Company’s maximum exposure to loss associated with this entity is primarily limited to the Company’s carrying value of this investment, which was approximately $14.2 million at December 31, 2005.
 
During October 2005, the Company acquired a portfolio of three operating properties located in southern California, comprising approximately 0.4 million aggregate square feet of GLA, for an aggregate purchase price of approximately $104.5 million including the assumption of approximately $54.6 million of non-recourse mortgage debt.
 
During December 2005, the Company acquired, in separate transactions, two operating properties, located in New York, NY, for an aggregate purchase price of approximately $7.2 million.  The purchase of one of the properties was partially funded by a new $3.1 million non-recourse mortgage, which bears interest at a fixed rate of 5.87% per annum and matures in December 2015.
 
During December 2005, the Company acquired a portfolio of eight net-leased operating properties, comprising approximately 0.1 million square feet of GLA, for an aggregate purchase price of approximately $17.1 million.  Seven of these properties are located in the New York Metropolitan area, and one is located in Philadelphia, PA.
 
During December 2005, the Company acquired from KROP the remaining 80% interest in an operating property comprising approximately 0.1 million square feet of GLA located in Columbia, MD, for a purchase price of approximately $23.6 million.
 
Additionally, during December 2005, the Company acquired, in separate transactions, four operating properties, located in Plano, TX, New London, NH, Staten Island, NY, and Santa Rosa,
 
13
 
CA, comprising of approximately 0.3 million aggregate square feet of GLA, for an aggregate purchase price of approximately $46.9 million.
 
FNC Realty Corporation -
 
From 2000 through 2002 the Company acquired approximately $28.9 million face amount of Frank’s Nursery and Crafts, Inc. (“Frank’s”), 10.25% bonds for an aggregate purchase price of approximately $11.3 million. During February 2001, Frank’s filed for protection under Chapter 11 of the United States Bankruptcy Code. During May 2002, Frank’s plan of reorganization was confirmed by the Bankruptcy court and Frank’s emerged from bankruptcy. Pursuant to Frank’s reorganization plan, the Company received approximately 4.3 million shares of Frank’s common stock valued at $2.34 per share in settlement of its Frank’s bond investment. As a result of this conversion, the Company held an approximate 27% interest in Frank’s and began accounting for its investment on the equity method. In addition, the Company began providing loans to Frank’s under a revolving credit facility, which was collateralized by certain real estate interests of Frank’s. As an inducement to make these loans, Frank’s issued the Company approximately 4.4 million warrants with an exercise price of $1.15 per share.
 
During September 2004, Frank’s again filed for protection under Chapter 11 of the United States Bankruptcy Code. The Company committed to provide Frank’s, in addition to its revolving credit facility, with $27.0 million of debtor-in-possession financing for a term of one year at an interest rate of Prime plus 1.00%. From the petition date until July 26, 2005, Frank’s operated its business as a debtor-in-possession and during this period had completely liquidated its inventory and ceased operating as a retailer.
 
Frank’s plan of reorganization included a Company-sponsored re-capitalization plan in which the Company, along with several other significant shareholders, agreed to re-capitalize Frank’s with approximately $104.0 million in cash in exchange for debt and equity securities and convert Frank’s from a publicly held retail company to a privately held real estate company.
 
On July 27, 2005, Frank’s emerged from Chapter 11 bankruptcy pursuant to a bankruptcy court approved plan of reorganization as FNC Realty Corporation (“FNC”). Pursuant to the reorganization plan, shareholders of Frank’s were offered cash of $0.75 per share or the right to exchange Frank’s common stock for FNC common stock on a 1:1 basis. FNC’s capitalization included the issuance of approximately $27.0 million of common stock and $77.0 million of fixed-rate 7% convertible senior notes. The notes mature in July 2008 and may be converted at anytime by the holder for common shares of FNC at $0.75 per share. Proceeds from the issuance of common stock and convertible senior notes were used to repay all claims pursuant to the plan of reorganization, including amounts owed to the Company under its revolving credit facility and debtor-in-possession financing agreement.
 
Pursuant to the plan of reorganization, the Company received common shares of FNC representing an approximate 27% ownership interest in exchange for its interests in Frank’s.  In addition, the Company acquired an additional 24.5% interest in the common shares of FNC for cash of approximately $17 million, thereby increasing the Company’s ownership interest to approximately 51%. This acquisition of additional shares includes the exercise of warrants previously issued by Frank’s to the Company. The Company also acquired approximately $42 million of fixed-rate 7% convertible senior notes issued by FNC.  As a result of the increase in ownership interest from 27% to 51%, the Company became the controlling shareholder and therefore, commenced consolidation of FNC effective July 27, 2005.
 
As of July 27, 2005, FNC held interests in 55 properties with approximately $16.1 million of non-recourse mortgage debt encumbering 16 of the properties. These loans bear interest at fixed rates ranging from 4.00% - 7.75% and maturity dates ranging from June 2012 through June 2022.  During December 2005, FNC prepaid, without penalty, an aggregate $4.8 million of mortgage debt encumbering five of its properties.  As of December 31, 2005, FNC had approximately $11.4 million of non-recourse mortgage debt encumbering 11 properties.  These remaining loans bear interest at fixed rates ranging from 4.00% to 7.75% and maturity dates ranging from June 2012 through June 2022.
 
The Company’s investment strategy with respect to FNC includes re-tenanting, re-developing and disposition of the properties. From July 27, 2005, through December 31, 2005, FNC disposed of nine properties, in separate transactions, for an aggregate sales price of approximately $9.4 million.
 
          Dispositions -
 
During 2005, the Company (i) disposed of, in separate transactions, 20 operating
 
14
 
properties for an aggregate sales price of approximately $93.3 million, (ii) transferred three operating properties to KROP for an aggregate price of approximately $49.0 million, (iii) transferred 52 operating properties to various joint ventures in which the Company manages and has non-controlling interests ranging from 15% to 50% for an aggregate price of approximately $183.1 million.  For the year ended December 31, 2005, these transactions resulted in gains of approximately $31.9 million and a loss on sale/transfer from four of the properties for approximately $5.2 million.
 
During June 2005, the Company disposed of a vacant land parcel located in New Ridge, MD, for approximately $5.6 million, resulting in a $4.6 million gain on sale.  This gain is included in Other income, net on the Company’s Consolidated Statements of Income.
 
          Redevelopments -
 
The Company has an ongoing program to reformat and re-tenant its properties to maintain or enhance its competitive position in the marketplace.  During 2005, the Company substantially completed the redevelopment and re-tenanting of various operating properties.  The Company expended approximately $55.5 million in connection with these major redevelopments and re-tenanting projects during 2005. The Company is currently involved in redeveloping several other shopping centers in the existing portfolio.  The Company anticipates its capital commitment toward these and other redevelopment projects will be approximately $90.0 million to $110.0 million during 2006.
 
Ground-Up Development -
 
The Company is engaged in ground-up development projects which consists of (i) merchant building through the Company’s wholly-owned taxable REIT subsidiary, KDI, which develops neighborhood and community shopping centers and the subsequent sale thereof upon completion, (ii) ground-up development projects which will be held as long-term investments by the Company and (iii) various ground-up development projects located in Mexico and Canada for long-term investment (see Recent Developments – International Real Estate Investments and Note 3 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K).  The ground-up development projects generally have substantial pre-leasing prior to the commencement of construction. As of December 31, 2005, the Company had in progress a total of 38 ground-up development projects including 26 merchant building projects, five domestic ground-up development projects, six ground-up development projects located throughout Mexico and one ground-up development project located in Canada.  These projects are currently proceeding on schedule and substantially in line with the Company’s budgeted costs of approximately $1.3 billion.
 
As of December 31, 2005, KDI had in progress 26 ground-up development projects located in nine states.  In addition, KDI manages the construction of four domestic projects for the Company, which will be held as long-term investments.  During 2005, KDI expended approximately $449.1 million in connection with the purchase of land and construction costs related to these projects and those sold during 2005.  These projects are currently proceeding on schedule and substantially in line with the Company’s budgeted costs.  The Company anticipates its capital commitment toward these development projects will be approximately $200.0 million to $250.0 million during 2006.  The proceeds from the sale of completed ground-up development projects during 2006, proceeds from construction loans and availability under the Company’s revolving lines of credit are expected to be sufficient to fund these anticipated capital requirements.
 
          Acquisitions -
 
During 2005, KDI acquired various land parcels, in separate transactions, for an aggregate purchase price of approximately $185.7 million.  The estimated project costs for these newly acquired parcels are approximately $609.6 million with completion dates ranging from March 2006 to June 2009.
 
Date Acquired
 
 
City
 
 
State
 
Purchase Price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
 
February 2005
 
 
Various
 
 
AZ, NC
 
$
3.4
 
March 2005
 
 
Various
 
 
AZ, NE, TX
 
 
22.2
 
May 2005
 
 
Jacksonville
 
 
FL
 
 
18.5
 
June 2005
 
 
Various
 
 
CA, NC
 
 
30.9
 
July 2005
 
 
Various
 
 
AZ, FL, ID, TX
 
 
26.5
 
August 2005
 
 
Cypress
 
 
TX
 
 
2.5
 
September 2005
 
 
Mesa
 
 
AZ
 
 
32.5
 
October 2005
 
 
Various
 
 
ID, NY
 
 
10.4
 
December 2005
 
 
Various
 
 
FL, ID
 
 
38.8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
185.7
 
 
 
 
 
 
 
 
 
 
 
15
 
During 2005, the Company obtained a term loan and individual construction loans on two ground-up development projects and paid off construction loans on five ground-up development projects.  At December 31, 2005, total loan commitments on the remaining 15 construction loans aggregated approximately $343.5 million of which approximately $228.5 million has been funded.  These loans have maturities ranging from 4 months to 31 months and bear interest at rates ranging from 6.04% to 6.64% at December 31, 2005.
 
          Dispositions -
 
During 2005, KDI sold, in separate transactions, six of its recently completed projects and 41 out-parcels for approximately $264.1 million.  These sales resulted in pre-tax gains of approximately $33.6 million.  Details are as follows:
 
Date Sold
 
Project
 
City
 
State
 
Sales Price
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
January 2005
 
Maricopa, AZ, project and 3 out-parcels at various projects
 
Various
 
AZ, NY
 
$   26.4
February 2005
 
Fountain Hills, AZ, project and out-parcels at Chandler, AZ
 
Various
 
AZ
 
    51.4
March 2005
 
Various (2 out-parcels)
 
Various
 
AZ, TX
 
     4.6
April 2005
 
Various (1 multi-tenant parcel and 2 out-parcels)
 
Various
 
AZ, OH, TX
 
     9.4
May 2005
 
Various (5 out-parcels)
 
Various
 
AZ, MI, TX
 
     7.3
June 2005
 
Completed projects in Durham, NC, and Houston, TX and 4 out-parcels in various projects
 
Various
 
NE, NC, TX
 
    46.9
July 2005
 
Various (2 out-parcels) and earn-out proceeds
 
Various
 
FL, TX
 
    5.7
August 2005
 
Various (3 out-parcels)
 
Various
 
TX
 
    2.5
September 2005
 
Burlington, NC, project and 2 out-parcels at Jacksonville, FL
 
Various
 
FL, NC
 
   51.5
October 2005
 
Various (4 out-parcels) and earn-out proceeds
 
Various
 
FL, MI, NC, OH
 
    4.6
November 2005
 
Various (6 out-parcels)
 
Various
 
FL, NY, TX
 
   14.7
December 2005
 
Longview, WA, project, 2 out-parcels at various projects and earn-out proceeds
 
Various
 
FL, ID, TX, WA
 
   39.1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 264.1
 
 
 
 
 
 
 
 
 
Operating Real Estate Joint Venture Investments -
 
          Kimco Income REIT (“KIR”) -
 
The Company has a 43.3% non-controlling limited partnership interest in KIR, manages the portfolio and accounts for its investment under the equity method of accounting.
 
During March 2005, KIR disposed of an operating property and an out-parcel, in separate transactions, for an aggregate sales price of approximately $43.1 million.  These sales resulted in an aggregate gain of approximately $17.8 million of which the pro-rata gain to the Company was approximately $7.7 million.  In connection with the sale of the operating property, KIR incurred a $2.0 million loan defeasance charge, of which the Company’s pro-rata share was approximately $0.9 million.
 
During October 2005, KIR sold an operating property for a sales price of approximately $8.1 million.  This sale resulted in a gain of approximately $2.4 million of which the pro-rata gain to the Company was approximately $1.0 million.
 
Additionally, during March 2005, KIR acquired an operating property located in Delran, NJ, for a purchase price of approximately $4.6 million.
 
In April 2005, KIR entered into a three-year $30.0 million unsecured revolving credit facility which bears interest at LIBOR plus 1.40%.  As of December 31, 2005, there were no amounts outstanding under this facility.
 
16
 
As of December 31, 2005, the KIR portfolio was comprised of 68 shopping center properties aggregating approximately 14.2 million square feet of GLA located in 20 states.
 
          KROP Venture-
 
During 2001, the Company formed a joint venture (the “Kimco Retail Opportunity Portfolio” or “KROP”) with GE Capital Real Estate (“GECRE”), in which the Company has a 20% non-controlling interest and manages the portfolio. The purpose of this joint venture is to acquire established, high-growth potential retail properties in the United States.  Total capital commitments to KROP from GECRE and the Company are for $200.0 million and $50.0 million, respectively, and such commitments are funded proportionately as suitable opportunities arise and are agreed to by GECRE and the Company.  During 2005, GECRE and the Company contributed approximately $21.2 million and $5.3 million, respectively, towards their capital commitments.  The Company accounts for its investment in KROP under the equity method of accounting.
 
During 2005, KROP acquired four operating properties and one out-parcel, in separate transactions, for an aggregate purchase price of approximately $74.6 million, including the assumption of approximately $26.2 million of individual non-recourse mortgage debt encumbering two of the properties and preferred units of approximately $4.2 million associated with another property.
 
During 2005, KROP disposed of three unencumbered operating properties and two out-parcels, in separate transactions, for an aggregate sales price of approximately $60.3 million.  These sales resulted in an aggregate gain of approximately $18.3 million of which the Company’s pro-rata share was approximately $3.7 million.
 
During 2005, KROP obtained ten-year individual non-recourse, non-cross collateralized fixed-rate mortgages aggregating approximately $21.9 million on two of its previously unencumbered properties with rates ranging from 5.2% to 5.3%.
 
During 2005, KROP obtained two non-recourse, non-cross collateralized variable-rate mortgages aggregating approximately $25.7 million on two properties with rates of LIBOR plus 1.30% and LIBOR plus 1.65% with terms of two and three years, respectively.
 
As of December 31, 2005, the KROP portfolio was comprised of 38 shopping center properties aggregating approximately 5.6 million square feet of GLA located in 14 states.
 
          Other Real Estate Joint Ventures –
 
During December 2004, the Company acquired the Price Legacy Corporation through a newly formed joint venture, PL Retail LLC (“PL Retail”), in which the Company has a 15% non-controlling interest and manages the portfolio.  The Company accounts for its investment under the equity method of accounting.  In connection with this transaction, PL Retail acquired 33 operating properties aggregating approximately 7.6 million square feet of GLA located in ten states.  To partially fund the acquisition, the Company provided PL Retail approximately $30.6 million of secured mezzanine financing.  The Company also, provided PL Retail a secured short-term promissory note of approximately $8.2 million. This interest-only note bore interest at LIBOR plus 4.50% and was scheduled to mature in June 2005. During 2005, this note was amended to bear interest at LIBOR plus 6.0% and is now payable on demand. This interest only loan bears interest at a fixed rate of 7.5% and matures in December 2006.  During the year ended December 31, 2005, PL Retail disposed of nine operating properties, in separate transactions, for an aggregate sales price of approximately $81.4 million, which represented the approximate carrying values of the properties.  Proceeds of approximately $22.0 million were used to partially repay the mezzanine financing that was provided by the Company.  As of December 31, 2005, PL Retail had approximately $8.9 million outstanding on the mezzanine financing and approximately $8.2 million outstanding on the promissory note.
 
During March 2005, a joint venture in which the Company has a 50% non-controlling interest, disposed of two vacant land parcels located in Glendale, AZ, in separate transactions, for an aggregate sales price of approximately $9.9 million.  These sales resulted in an aggregate gain of approximately $4.8 million, of which the Company’s share was approximately $2.4 million.
 
During April 2005, the Company acquired an operating property located in Hillsborough, NJ, comprising approximately 0.1 million square feet of GLA, through a newly formed joint venture in which the Company has a 50% non-controlling interest.  The property was acquired for approximately $4.0 million including the assumption of approximately $1.9 million of non-recourse mortgage debt encumbering the property.  Subsequent to the
 
17
 
purchase, the joint venture obtained a $3.2 million one-year term loan which bears interest at LIBOR plus 0.55%.  This loan is jointly and severally guaranteed by the joint venture partners, including the Company.  Proceeds from this loan were used to repay the $1.9 million mortgage encumbering the property.
 
During June 2005, the Company acquired land in Tustin, CA, through a newly formed joint venture in which the Company has a 50% non-controlling interest, for a purchase price of approximately $23.0 million.  The property will be developed into a 1.0 million square foot retail center with a total estimated project cost of approximately $149.3 million.  The purchase of the land was funded through a new construction loan which bears interest at LIBOR plus 1.70% and is scheduled to mature in October 2007.  As of December 31, 2005, this construction loan had an outstanding balance of approximately $40.4 million.
 
Additionally, during June 2005, the Company acquired an additional 25% interest in a joint venture in which the Company had previously held a 7.77% interest for approximately $26.0 million.  This joint venture owns an operating property, comprised of approximately 0.5 million square feet of GLA, located in Fremont, CA.  During December 2005, the Company sold a portion of its interest in this joint venture to a new partner who purchased 70% of this partnership.  The Company now has a 30% non-controlling interest in this joint venture manages and accounts for its investment under the equity method of accounting.
 
During July 2005, the Company acquired an interest in an office property located in Houston, TX, comprising approximately 0.6 million square feet of GLA through a newly formed joint venture in which the Company has an 85% non-controlling interest.  The Company’s investment in the joint venture was approximately $12.2 million.  The joint venture purchased the property for approximately $91.1 million subject to $76.5 million of non-recourse mortgage debt which bears interest at a fixed-rate of 5.15% per annum and matures during August 2015.  The Company accounts for this investment under the equity method of accounting.
 
During May 2005, the Company acquired a $10.2 million mortgage receivable through a newly formed joint venture in which the Company has a 50% non-controlling interest.  The mortgage encumbered a property located in Derby, CT, comprising approximately 0.1 million square feet of GLA.  During October 2005, the joint venture foreclosed on the property and obtained fee title.
 
Additionally, during 2005, the Company acquired, in separate transactions, 12 operating properties comprising approximately 1.7 million square feet of GLA, through newly formed joint ventures in which the company has non-controlling interests ranging from 5% to 50%. The aggregate purchase price for these properties was approximately $265.6 million, including the assumption of approximately $29.1 million of non-recourse mortgage debt encumbering three of the properties.  The Company accounts for its investment in these joint ventures under the equity method of accounting.
 
During September 2005, the Company transferred 45 operating properties, comprising approximately 0.3 million square feet of GLA, located in Virginia and Maryland to a newly formed unconsolidated joint venture in which the Company has a 15% non-controlling interest.  The transfer price was approximately $85.3 million including the assignment of approximately $65.0 million of cross-collateralized non-recourse mortgage debt encumbering all of the properties.
 
Additionally, during 2005, the Company transferred, in separate transactions, five operating properties comprising approximately 0.7 million square feet of GLA, to newly formed joint ventures in which the Company has 20% non-controlling interests, for an aggregate price of approximately $85.6 million, including the assignment of approximately $40.2 million of mortgage debt encumbering three of the properties.  The Company accounts for its investments in these joint ventures under the equity method of accounting.
 
The Company’s maximum exposure to losses associated with its unconsolidated joint ventures is primarily limited to its carrying value in these investments. As of December 31, 2005, the Company’s carrying value in these investments approximated $735.6 million.
 
          International Real Estate Investments -
 
                    Canadian Investments -
 
During October 2001, the Company formed the RioCan Venture in which the Company has a 50% non-controlling interest, to acquire retail properties and development projects in Canada. The acquisition and development projects are to be sourced and managed by RioCan and are subject to review and approval by a joint oversight committee consisting of RioCan management and the Company’s management personnel.  Capital contributions will only be
 
18
 
required as suitable opportunities arise and are agreed to by the Company and RioCan.
 
As of December 31, 2005, the RioCan Venture was comprised of 34 operating properties and one development property, consisting of approximately 8.1 million square feet of GLA.
 
During May 2005, a newly formed joint venture, in which the Company has a 50% non-controlling interest, acquired in separate transactions, two auto dealerships located in Toronto, Canada, for an aggregate purchase price of approximately CAD $6.4 million (approximately USD $5.1 million).
 
During 2005, the Company, in separate transactions, made four Canadian preferred equity investments aggregating approximately CAD $24.2 million (approximately USD $20.7 million) to developers and owners of various real estate interests.
 
The Company has used the equity method of accounting for the Canadian investments described above.
 
          Mexican Investments -
 
During March 2005, the Company transferred 50% of the Company’s 95% interest in a developed property located in Huehuetoca, Mexico, to a joint venture partner for approximately $5.3 million, which approximated its carrying value.  As a result of this transaction, the Company now holds a 47.5% non-controlling interest and has deconsolidated the investment.  The Company now accounts for its investment under the equity method of accounting.
 
During May 2005, the Company acquired a hotel property located in Cancun, Mexico, through a newly formed joint venture in which the Company has an 80% non-controlling interest.  The property was purchased for approximately $19.7 million.  Simultaneous with the closing, the property was encumbered with $12.4 million of non-recourse mortgage debt which bears interest at a fixed rate of 7.63% per annum and matures during May 2010.  During 2005, the property incurred significant hurricane damage which has temporarily suspended operations.  The Company believes that its property insurance and business interruption insurance will adequately cover losses associated with this event.
 
During July 2005, the Company transferred a developed property located in Reynosa, Mexico, to a newly formed joint venture in which the Company has a 50% non-controlling interest, for a price of approximately $6.9 million.  The Company now accounts for this investment under the equity method of accounting.
 
During October 2005, the Company acquired interests in 57 industrial properties located in Mexico, through a newly formed joint venture in which the Company has a 50% non-controlling interest, for a purchase price of approximately $277.5 million, including the assumption of approximately $167.0 million of non-recourse mortgage debt encumbering 52 properties.  The properties comprise approximately 5.6 million square feet of GLA.
 
During 2005, the Company acquired, in separate transactions, two parcels of land located in Saltillo and Pachuca, Mexico, for an aggregate purchase price of approximately $14.6 million.  The properties will be developed into retail centers with an aggregate total projected cost of approximately $34.1 million.
 
Additionally, during 2005, the Company acquired, in separate transactions, six parcels of land located in various cities throughout Mexico, through newly formed joint ventures in which the Company has non-controlling interests ranging from 50% to 80%, for an aggregate purchase price of approximately $42.1 million.  The properties were at various stages of construction at acquisition and will be developed into retail centers with a projected total aggregate cost of approximately $183.1 million.
 
Other Real Estate Investments -
 
          Kimsouth -
 
During November 2002, the Company, through its taxable REIT subsidiary, together with Prometheus Southeast Retail Trust, completed the merger and privatization of Konover Property Trust, which has been renamed Kimsouth Realty, Inc., (“Kimsouth”).  The Company acquired 44.5% of the common stock of Kimsouth, which consisted primarily of 38 retail shopping center properties comprising approximately 4.6 million square feet of GLA.  Total acquisition value was approximately $280.9 million, including approximately $216.2 million in assumed mortgage debt.  The Company’s investment strategy with respect to Kimsouth includes re-tenanting, repositioning and disposition of the properties.
 
19
 
During 2005, Kimsouth disposed of seven shopping center properties, in separate transactions, for an aggregate sales price of approximately $78.8 million, including the assignment of approximately $23.7 million of mortgage debt encumbering two of the properties.  During 2005, the Company recognized pre-tax profits from the Kimsouth investment of approximately $4.9 million, which is included in the caption Income from other real estate investments on the Company’s Consolidated Statements of Income.
 
As of December 31, 2005, the Kimsouth portfolio was comprised of five properties including the office component of an operating property sold in 2004, aggregating approximately 1.2 million square feet of GLA located in four states.
 
          Preferred Equity Capital -
 
The Company maintains a Preferred Equity program, which provides capital to developers and owners of real estate properties.  During 2005, the Company provided in separate transactions, an aggregate of approximately $84.3 million in investment capital to developers and owners of 79 real estate properties.  As of December 31, 2005, the Company’s net investment under the Preferred Equity program was approximately $225.9 million relating to 131 properties.  For the year ended December 31, 2005, the Company earned approximately $32.8 million, including $12.6 million from promoted interests earned from six capital transactions from these investments. 
 
Mortgages and Other Financing Receivables -
 
During May 2002, the Company provided a secured $15.0 million three-year term loan and a secured $7.5 million revolving credit facility to Frank’s, at an interest rate of 10.25% per annum collateralized by 40 real estate interests. Interest was payable quarterly in arrears. During 2003, the revolving credit facility was amended to increase the total borrowing capacity to $17.5 million. During January 2004, the revolving loan was further amended to provide up to $33.75 million of borrowings from the Company. During September 2004, Frank’s filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The Company committed to provide an additional $27.0 million of Debtor-in-Possession financing with a term of one year at an interest rate of Prime plus 1.00% per annum.  During July 2005, Frank’s emerged from bankruptcy as FNC and repaid all outstanding amounts owed to the Company under the revolving credit facility and Debtor-in-Possession agreement (See Recent Developments – FNC Realty Corporation and Note 3 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K).
 
During April 2005, the Company provided a construction loan commitment of up to MXP 53.5 million (approximately USD $5.0 million) to a developer for the construction of a new retail center in Acapulco, Mexico.  The loan bears interest at a fixed rate of 11.75% and provides for an additional 20% participation of property cash flow, as defined.  This loan is initially interest only and then converts to an amortizing loan at the earlier of 120 days after construction completion or upon opening of the anchor tenant.  This loan is collateralized by the related property and matures in May 2015.  As of December 31, 2005, there was approximately MXP 53.5 million (USD $5.0 million) outstanding on this loan.
 
Additionally, during April 2005, a newly formed joint venture, in which the Company has a 50% non-controlling interest, provided a retailer with a three-year $28.0 million revolving line of credit at a floating interest rate of Prime plus 5.5% per annum.  The facility also provides for a 3.0% unused line fee and a 2.50% origination fee.  The facility is collateralized by certain real estate interests of the borrower.  As of December 31, 2005, the outstanding balance on this facility was $10.2 million of which the Company’s share was $5.2 million.
 
During May 2005, a newly formed joint venture, in which the Company has a 44.38% non-controlling interest, provided Debtor-in-Possession financing to a healthcare facility that recently filed for bankruptcy and is closing its operations.  The term of this loan is two years and bears interest at prime plus 2.5%.  The loan is collateralized by a hospital building, a six-story commercial building, a 12-story 133-unit apartment complex and various other building structures.  The Company’s share of the outstanding balance of this loan at December 31, 2005, is $2.9 million.
 
Additionally, during May 2005, the Company acquired four mortgage loans collateralized by individual properties with an aggregate face value of approximately $16.6 million for approximately $14.3 million.  These performing loans, which provide for monthly payments of principal and interest, bear interest at a fixed-rate of 7.57% and mature on June 1, 2019.  As of December 31, 2005, there was an aggregate of approximately $14.1 million outstanding on these loans.
 
During September 2005, a newly formed joint venture, in which the Company has an 80%
 
20
 
interest, acquired a $43.6 million mortgage receivable for a purchase price of approximately $34.2 million.  This performing loan bears interest at a rate of three-month LIBOR plus 2.75% per annum and matures on January 12, 2010.  The loan is collateralized by a 626-room hotel located in Lake Buena Vista, FL.  The Company has determined that this entity is a VIE and has further determined that the Company is the primary beneficiary of this VIE and has therefore consolidated it for financial reporting purposes.  As of December 31, 2005, the outstanding loan balance, net of discount, was approximately $35.0 million.
 
During October 2005, the Company provided a construction loan commitment of up to $38.1 million to a developer for acquisition and re-development of a retail center located in Richland Township, PA.  The loan is interest only at a rate of LIBOR plus 220 basis points and matures in October 2007.  As of December 31, 2005, the outstanding balance on this loan was approximately $3.2 million.
 
During March 2002, the Company provided a $50.0 million ten-year loan to Shopko Stores, Inc., at an interest rate of 11.0% per annum collateralized by 15 properties.  The Company received principal and interest payments on a monthly basis.  During January 2003, the Company sold a $37.0 million participation interest in this loan to an unaffiliated third party.  The interest rate on the $37.0 million participation interest was a variable rate based on LIBOR plus 3.50%.  The Company continued to act as the servicer for the full amount of the loan.  During December 2005, Shopko, as part of its privatization transaction, prepaid the outstanding loan balance of approximately $46.7 million in full satisfaction of this loan.  As part of this loan satisfaction, Shopko paid the Company a prepayment fee of approximately $14.0 million.
 
During July 2004, the Company provided an $11.0 million five-year term loan to a retailer at a floating interest rate of Prime plus 3.0% per annum or, at the borrower’s election, LIBOR plus 5.5% per annum.  The facility was interest only, payable monthly in arrears and was collateralized by certain real estate interests of the borrower.  During December 2005, the borrower elected to prepay the outstanding loan balance of $11.0 million in full satisfaction of this loan.
 
During December 2005, the Company provided a construction loan commitment of up to MXP 39.9 million (approximately USD $3.7 million) to a developer for the construction of a new retail center in Magno Deco, Mexico.  The loan bears interest at a fixed rate of 11.75% and provides for an additional 20% participation of property cash flow, as defined.  This loan is collateralized by the related property and matures in May 2015.  As of December 31, 2005, there was approximately MXP 38.7 million (USD $3.6 million) outstanding on this loan.
 
Financing Transactions -
 
          Non-Recourse Mortgage Debt -
 
During 2005, the Company (i) obtained an aggregate of approximately $95.6 million of individual non-recourse mortgage debt on 53 operating properties, (ii) assumed approximately $79.7 million of individual non-recourse mortgage debt relating to the acquisition of 11 operating properties, including approximately $6.3 million of fair value debt adjustments, (iii) consolidated approximately $33.2 million of non-recourse mortgage debt relating to the purchase of additional ownership interests in various entities, (iv) assigned approximately $119.8 million of individual non-recourse mortgage debt relating to the transfer of 49 operating properties to various co-investment ventures in which the Company has non-controlling interests ranging from 10% to 30%, (v) paid off approximately $66.9 million of individual non-recourse mortgage debt that encumbered 11 operating properties,(vi) deconsolidated approximately $41.1 million of non-recourse mortgage debt relating to the reduction of the Company’s economic interest in a joint venture and (vii) assigned approximately $7.8 million of non-recourse mortgage debt relating to the sale of one operating property.
 
          Unsecured Debt -
 
During February 2005, the Company issued $100.0 million of fixed rate unsecured senior notes under its medium-term notes (“MTN”) program.  This fixed rate MTN matures in February 2015 and bears interest at 4.904% per annum.  The proceeds from this MTN issuance were primarily used for the repayment of all $20.0 million of the Company’s fixed rate notes that matured in April 2005, which bore interest at 7.91%, all $10.25 million of the Company’s fixed rate notes that matured in May 2005, which bore interest at 7.30%, and partial repayment of the Company’s $100.0 million fixed rate notes, which matured in June 2005, and bore interest at 6.73%.
 
21
 
During June 2005, the Company issued $200.0 million of fixed rate unsecured senior notes under its MTN program.  This fixed rate MTN matures in June 2014 and bears interest at 4.82% per annum.  The proceeds from this issuance were primarily used to repay a portion of the outstanding balance under the Company’s U.S. revolving credit facility and for general corporate purposes.
 
During November 2005, the Company issued an aggregate $250.0 million of fixed rate unsecured senior notes under its MTN program.  The Company issued a $150.0 million MTN which matures in November 2015 and bears interest at a fixed rate of 5.584% per annum and a $100.0 million MTN which matures in February 2011 and bears interest at fixed rate of 5.304% per annum.  Proceeds from these MTN issuances were used for general corporate purposes and to repay a portion of the outstanding balance under the Company’s U.S. revolving credit facility.  A portion of the outstanding balance related to the repayment of the Company’s $50.0 million 7.68% fixed rate notes, which matured on November 1, 2005, and repayment of the Company’s $20.0 million 6.83% fixed rate notes, which matured on November 14, 2005.
 
During April 2005, Kimco North Trust III, a wholly-owned entity of the Company, completed the issuance of $150.0 million Canadian denominated senior unsecured notes.  The notes bear interest at a fixed rate of 4.45% and mature on April 21, 2010.  The Company has provided a full and unconditional guarantee of the notes.  The proceeds were used by Kimco North Trust III to pay down outstanding indebtedness under existing credit facilities, to fund long-term investments in Canadian real estate and for general corporate purposes.  The senior unsecured notes are governed by an indenture by and among Kimco North Trust III, the Company, as guarantor, and BNY Trust Company of Canada, as trustee, dated April 21, 2005.
 
          Construction Loans -
 
During 2005, the Company obtained a term loan and construction financing on two ground-up development projects for an aggregate loan amount of up to $50.5 million, of which approximately $22.4 million was funded as of December 31, 2005.  As of December 31, 2005, the Company had a total of 15 construction loans with commitments of up to $343.5 million, of which $228.5 million had been funded to the Company.  These loans had maturities ranging from 4 months to 31 months and variable interest rates ranging from 6.04% to 6.64% at December 31, 2005.
 
          Credit Facilities -
 
During July 2005, the Company established a new $850.0 million unsecured revolving credit facility (the “Credit Facility”), which is scheduled to expire in July 2008. This Credit Facility replaces the Company’s $500.0 million unsecured credit facility, which was scheduled to expire in June 2006. Under the Credit Facility, funds may be borrowed for general corporate purposes, including the funding of (i) property acquisitions, (ii) development and redevelopment costs and (iii) any short-term working capital requirements. Interest on borrowings under the Credit Facility accrue at a spread (currently 0.45%) to LIBOR and fluctuates in accordance with changes in the Company’s senior debt ratings.  As part of this Credit Facility, the Company has a competitive bid option whereby the Company may auction up to $425.0 million of its requested borrowings to the bank group.  This competitive bid option provides the Company the opportunity to obtain pricing below the currently stated spread to LIBOR of 0.45%.  A facility fee of 0.125% per annum is payable quarterly in arrears. In addition, the Company has a $200.0 million sub-limit which provides it the opportunity to borrow in alternative currencies such as Pounds Sterling, Japanese Yen or Euros.  Pursuant to the terms of the Credit Facility, the Company, among other things, is (i) subject to maintaining certain maximum leverage ratios on both unsecured senior corporate debt and minimum unencumbered asset and equity levels and (ii) restricted from paying dividends in amounts that exceed 95% of funds from operations, as defined.  As of December 31, 2005, there was $200.0 million outstanding under this credit facility.
 
During September 2004, the Company entered into a three-year CAD $150.0 million unsecured revolving credit facility with a group of banks.  This facility bears interest at the CDOR Rate, as defined, plus 0.50% and is scheduled to expire in September 2007.  During March 2005, this facility was increased to CAD $250.0 million and the scheduled maturity date was extended to March 2008.  During January 2006, the facility was further amended to reduce the borrowing spread to 0.45% and to modify the covenant package to conform to the Company’s $850.0 million U.S. Credit Facility.  Proceeds from this facility will be used for general corporate purposes including the funding of Canadian denominated investments. As of December 31, 2005, there was CAD $110.0 million (approximately USD $94.7 million) outstanding under this facility.
 
22
 
During May 2005, the Company entered into a three-year MXP 500.0 million unsecured revolving credit facility.  This facility bears interest at the TIIE Rate, as defined, plus 1.00% and is scheduled to expire in May 2008.  Proceeds from this facility will be used to fund peso-denominated investments.  As of December 31, 2005, there was MXP 500.0 million (approximately USD $46.7 million) outstanding under this facility.
 
          Equity -
 
During July 2005, the Company filed a shelf registration statement on Form S-3 for up to $1.0 billion of debt securities, preferred stock, depositary shares, common stock and common stock warrants.  As of December 31, 2005, the Company had $750.0 million available for issuance under this shelf registration statement.
 
During 2005, the Company received approximately $49.0 million through employee stock option exercises and the dividend reinvestment program.
 
Exchange Listings
 
The Company’s common stock and Class F Depositary Shares are traded on the NYSE under the trading symbols “KIM” and “KIMprF”, respectively.
 
Item 1B.  Unresolved Staff Comments
 
None
 
Item 2.  Properties
 
Real Estate Portfolio  As of January 1, 2006, the Company’s real estate portfolio was comprised of interests in approximately 106.6 million square feet of GLA (not including 131 property interests comprising 10.8 million square feet of GLA related to the Preferred Equity program, 46 property interests comprising 0.8 million square feet of GLA related to FNC Realty and 15.0 million square feet of planned GLA for the 45 ground-up development projects) in 786 operating properties primarily consisting of neighborhood and community shopping centers, 22 retail store leases and six parcels of undeveloped land located in 44 states, Canada and Mexico.  The Company’s portfolio includes a 43.3% interest in 68 shopping center properties comprising approximately 14.2 million square feet of GLA relating to KIR, a 50% interest in 34 shopping center properties comprising approximately 8.0 million square feet of GLA relating to the RioCan Venture, a 20% interest in 38 shopping center properties comprising approximately 5.6 million square feet of GLA relating to KROP and various interests in 112 properties comprising approximately 14.5 million square feet of GLA relating to other institutional co-investment programs.  Neighborhood and community shopping centers comprise the primary focus of the Company’s current portfolio.  As of January 1, 2006, approximately 94.6% of the Company’s neighborhood and community shopping center space (excluding the KIR, KROP and other institutional co-investment program portfolios) was leased, and the average annualized base rent per leased square foot of the portfolio was $9.44.
 
The Company’s neighborhood and community shopping center properties, generally owned and operated through subsidiaries or joint ventures, had an average size of approximately 142,000 square feet as of January 1, 2006.  The Company generally retains its shopping centers for long-term investment and consequently pursues a program of regular physical maintenance together with major renovations and refurbishing to preserve and increase the value of its properties.  These projects usually include renovating existing facades, installing uniform signage, resurfacing parking lots and enhancing parking lot lighting.  During 2005, the Company capitalized approximately $6.8 million in connection with these property improvements and expensed to operations approximately $18.9 million.
 
The Company’s neighborhood and community shopping centers are usually “anchored” by a national or regional discount department store, supermarket or drugstore.  As one of the original participants in the growth of the shopping center industry and one of the nation’s largest owners and operators of shopping centers, the Company has established close relationships with a large number of major national and regional retailers.  Some of the major national and regional companies that are tenants in the Company’s shopping center properties include The Home Depot, TJX Companies, Sears Holdings, Kohl’s, Royal Ahold, Wal-Mart, Best Buy, Linens N Things, Costco and Bed Bath & Beyond.
 
A substantial portion of the Company’s income consists of rent received under long-term leases.  Most of the leases provide for the payment of fixed base rentals monthly in advance and for the payment by tenants of an allocable share of the real estate taxes, insurance, utilities and common area maintenance expenses incurred in operating the shopping centers.  Although many of the leases require the Company to make roof and structural repairs as needed, a number of tenant leases place that responsibility on the
 
23
 
tenant, and the Company’s standard small store lease provides for roof repairs to be reimbursed by the tenant as part of common area maintenance.  The Company’s management places a strong emphasis on sound construction and safety at its properties.
 
Approximately 1,750 of the Company’s 7,600 leases also contain provisions requiring the payment of additional rent calculated as a percentage of tenants’ gross sales above predetermined thresholds.  Percentage rents accounted for approximately 1% of the Company’s revenues from rental property for the year ended December 31, 2005.
 
Minimum base rental revenues and operating expense reimbursements accounted for approximately 99% of the Company’s total revenues from rental property for the year ended December 31, 2005.  The Company’s management believes that the base rent per leased square foot for many of the Company’s existing leases is generally lower than the prevailing market-rate base rents in the geographic regions where the Company operates, reflecting the potential for future growth.
 
For the period January 1, 2005, to December 31, 2005, the Company increased the average base rent per leased square foot in its portfolio of neighborhood and community shopping centers from $9.02 to $9.44, an increase of $0.42.  This increase primarily consists of (i) an $0.18 increase relating to acquisitions, (ii) a $0.01 increase relating to dispositions or the transfer of properties to various joint venture entities, (iii) a $0.04 increase related to the fluctuation in exchange rates related to Canadian and Mexican-denominated leases and (iv) a $0.19 increase relating to new leases signed net of leases vacated and rent step-ups within the portfolio.
 
The Company seeks to reduce its operating and leasing risks through geographic and tenant diversity.  No single neighborhood and community shopping center accounted for more than 0.8% of the Company’s total shopping center GLA or more than 1.2% of total annualized base rental revenues as of December 31, 2005. The Company’s five largest tenants at December 31, 2005, were The Home Depot, TJX Companies, Sears Holdings, Kohl’s and Royal Ahold, which represent approximately 3.6%, 3.2%, 2.7%, 2.5% and 2.0%, respectively, of the Company’s annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest.  The Company maintains an active leasing and capital improvement program that, combined with the high quality of the locations, has made, in management’s opinion, the Company’s properties attractive to tenants.
 
The Company’s management believes its experience in the real estate industry and its relationships with numerous national and regional tenants gives it an advantage in an industry where ownership is fragmented among a large number of property owners.
 
Retail Store Leases  In addition to neighborhood and community shopping centers, as of January 1, 2006, the Company had interests in retail store leases totaling approximately 2.0 million square feet of anchor stores in 22 neighborhood and community shopping centers located in 15 states.  As of January 1, 2006, approximately 99.9% of the space in these anchor stores had been sublet to retailers that lease the stores under net lease agreements providing for average annualized base rental payments of $3.93 per square foot. The average annualized base rental payments under the Company’s retail store leases to the landowners of such subleased stores are approximately $2.58 per square foot.  The average remaining primary term of the retail store leases (and, similarly, the remaining primary term of the sublease agreements with the tenants currently leasing such space) is approximately 4.1 years, excluding options to renew the leases for terms which generally range from five to 30 years.  The Company’s investment in retail store leases is included in the caption Other Real Estate Investments on the Company’s Consolidated Balance Sheets.
 
Ground-Leased Properties  The Company has interests in 60 shopping center properties that are subject to long-term ground leases where a third party owns and has leased the underlying land to the Company (or an affiliated joint venture) to construct and/or operate a shopping center.  The Company or the joint venture pays rent for the use of the land and generally is responsible for all costs and expenses associated with the building and improvements.  At the end of these long-term leases, unless extended, the land together with all improvements revert to the landowner.
 
Ground-Up Development Properties  The Company is engaged in ground-up development projects which consists of (i) merchant building through the Company’s wholly-owned taxable REIT subsidiary KDI, which develops neighborhood and community shopping centers and the subsequent sale thereof upon completion, (ii) ground-up development projects which will be held as long-term investments by the Company and (iii) various ground-up development projects located in Mexico and Canada for long-term investment (see Recent Developments – International Real Estate Investments and Note 3 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K).  The ground-up development
 
24
 
projects generally have substantial pre-leasing prior to the commencement of the construction.  As of December 31, 2005, the Company had in progress a total of 38 ground-up development projects including 26 merchant building projects, five domestic ground-up development projects, six ground-up development projects located throughout Mexico and one ground-up project located in Canada.
 
As of January 1, 2006, KDI has currently in progress 26 ground-up development projects located in nine states, which are expected to be sold upon completion.  These projects had substantial pre-leasing prior to the commencement of construction.  As of January 1, 2006, the average annual base rent per leased square foot for the KDI portfolio was $15.34 and the average annual base rent per leased square foot for new leases executed in 2005 was $15.19.
 
Undeveloped Land  The Company owns certain unimproved land tracts and parcels of land adjacent to certain of its existing shopping centers that are held for possible expansion. At times, should circumstances warrant, the Company may develop or dispose of these parcels.
 
The table on pages 26 to 35 sets forth more specific information with respect to each of the Company’s property interests.
 
Item 3.  Legal Proceedings
 
The Company is not presently involved in any litigation nor, to its knowledge, is any litigation threatened against the Company or its subsidiaries that, in management’s opinion, would result in any material adverse effect on the Company’s ownership, management or operation of its properties, or which is not covered by the Company’s liability insurance.
 
Item 4.  Submission of Matters to a Vote of Security Holders
 
None.
 
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Back to Contents

      YEAR
DEVELOPED
OR
ACQUIRED		    OWNERSHIP
INTEREST/
(EXPIRATION)
(2)		    LAND
AREA
(ACRES)		    LEASABLE
AREA
(SQ. FT.)		       MAJOR LEASES  
              PERCENT  
 
            LEASED     LEASE   OPTION       LEASE   OPTION       LEASE   OPTION  
  LOCATION           (1)   TENANT NAME   EXPIRATION   EXPIRATION   TENANT NAME EXPIRATION   EXPIRATION   TENANT NAME   EXPIRATION   EXPIRATION  
 
 
ALABAMA                                                          
  FAIRFIELD   2000   FEE   10.0   86,566   100.0   TELETECH CUSTOM   2009   2029                          
  HOOVER   2000   FEE   11.5   115,347   100.0   WAL-MART   2025   2095                          
  MOBILE (9)   2002   JOINT VENTURE   52.8   527,625   62.4   ACADEMY SPORTS   2021   2031   CIRCUIT CITY   2041   2041   ROSS DRESS FOR LESS   2015   2035  
ALASKA                                                          
  KENAI   2003   JOINT VENTURE   14.7   146,759   100.0   HOME DEPOT   2018   2048                          
ARIZONA                                                          
  ANTHEM (4)   2004   JOINT VENTURE   6.6   15,000   100.0                                      
  CHANDLER (4)   2004   JOINT VENTURE   29.3   —   —                                      
  GLENDALE (7)   1998   JOINT VENTURE   40.5   333,388   97.8   COSTCO   2011   2046   FLOOR & DECOR   2015   2025   LEVITZ   2012   2032  
  GLENDALE (3)   1998   JOINT VENTURE   26.5   92,228   100.0   SEARS   2006   2016   MICHAELS   2008   2018   ANNA'S LINENS   2015   2025  
  MESA   1998   FEE   19.8   144,617   81.2   ROSS DRESS FOR LESS   2010   2015   BLACK ANGUS   2010   2015              
  MARANA   2003   FEE   18.2   191,008   100.0   LOWE'S HOME CENTER   2019   2069                          
  MESA (11)   2004   FEE   29.4   307,375   100.0   SPORTS AUTHORITY   2016   2046   SIMPLY ARTRAGEOUS   2014   2019   CIRCUIT CITY   2016   2036  
  MESA (4)   2005   JOINT VENTURE   12.8   448,000   100.0   WAL-MART   2026   2076   BASS PRO OUTDOOR WORLD   2027   2057   CINEMARK USA   2022   2037  
  MESA (4)   2005   JOINT VENTURE   71.0   —   —                                      
  NORTH PHOENIX   1998   FEE   17.0   230,164   87.0   BURLINGTON COAT FACTORY   2013   2023   MICHAELS   2007   2022   STAPLES   2010   2025  
  PHOENIX   1998   JOINT VENTURE   1.7   16,410   100.0   CHAPMAN BMW   2016   2031                          
  PHOENIX   1998   FEE   13.4   153,180   100.0   HOME DEPOT   2020   2050   JO-ANN FABRICS   2010   2025              
  PHOENIX   1998   FEE   26.6   333,382   90.4   COSTCO   2006   2041   PHOENIX RANCH MARKET   2021   2041   RODEO   2006      
  PHOENIX   1997   FEE   17.5   131,621   91.0   SAFEWAY   2009   2039   TRADER JOE'S   2014   2029              
  GLENDALE (11)   2004   FEE   6.4   70,428   100.0   SAFEWAY   2016   2046                          
  SURPRISE (4)   2004   JOINT VENTURE   112.9   —   —                                      
  TEMPE   2004   FEE   21.1   237,018   99.4   COSTCO   2009   2039   PETSMART   2011   2031   STAPLES   2008   2025  
  TUCSON   2003   JOINT VENTURE   17.8   190,174   100.0   LOWE'S HOME CENTER   2019   2069                          
  TEMPE (11)   2004   FEE   24.0   228,000   98.0   TERRI'S CONSIGN & DESIGN   2011   2021   CIRCUIT CITY   2016   2036   JCPENNEY   2008   2028  
CALIFORNIA                                                          
  ALHAMBRA   1998   FEE   18.4   195,455   100.0   COSTCO   2027   2057   COSTCO   2027   2057   JO-ANN FABRICS   2009   2019  
  ANAHEIM   1995   FEE   1.0   15,396   100.0                                      
  CARMICHAEL   1998   FEE   18.5   210,306   100.0   HOME DEPOT   2008   2022   SPORTS AUTHORITY   2009   2024   LONGS DRUG   2013   2033  
  CHINO HILLS   2005   FEE   7.3   73,352   98.3   STATER BROTHERS   2022   2052                          
  CHULA VISTA   1998   FEE   34.3   356,335   100.0   COSTCO   2029   2079   WAL-MART   2025   2086   NAVCARE   2009      
  COLMA (8)   2003   JOINT VENTURE   6.4   213,532   100.0   MARSHALLS   2007   2012   NORDSTROM'S RACK   2007   2017   BED BATH & BEYOND   2011   2026  
  CORONA   1998   FEE   47.6   486,958   100.0   COSTCO   2007   2042   HOME DEPOT   2010   2029   LEVITZ   2009   2029  
  COVINA (7)   2000   GROUND LEASE (2054)/ JOINT VENTURE   26.0   269,433   97.3   HOME DEPOT   2009   2034   STAPLES   2006   2011   PETSMART   2008   2028  
  DALY CITY (3)   2002   FEE   25.6   529,841   100.0   HOME DEPOT   2026   2056   BURLINGTON COAT FACTORY   2012   2022   SAFEWAY   2009   2024  
  EL CAJON   2003   JOINT VENTURE   12.3   123,343   100.0   KOHL'S   2024   2053   MICHAELS   2015   2035              
  FOLSOM   2003   JOINT VENTURE   9.5   108,255   100.0   KOHL'S   2018   2048                          
  FREMONT (12) (3)   2005   JOINT VENTURE   44.4   495,979   96.1   SAFEWAY   2025   2050   BED BATH & BEYOND   2010   2025   MARSHALLS   2015   2030  
  FRESNO (11)   2004   FEE   10.8   121,107   100.0   BED BATH & BEYOND   2010   2025   SPORTMART   2013   2023   ROSS DRESS FOR LESS   2011   2031  
  LA MIRADA (3)   1998   FEE   31.2   260,092   99.3   TOYS "R" US   2012   2032   US POST OFFICE   2010   2020   MOVIES 7 DOLLAR THEATRE   2008   2018  
  MONTEBELLO (7)   2000   JOINT VENTURE   25.4   251,489   100.0   SEARS   2012   2062   TOYS "R" US   2018   2043   AMC THEATRES   2012   2032  
  MORGAN HILL   2003   JOINT VENTURE   8.1   103,362   100.0   HOME DEPOT   2024   2054                          
  NORTHRIDGE   2005   FEE   9.3   158,812   100.0   DSW SHOE WAREHOUSE   2016   2028   LINENS N THINGS   2013   2028   GELSON'S MARKET   2017   2027  
  NOVATO (12)   2003   FEE   11.3   133,862   94.7   SAFEWAY   2025   2060   RITE AID   2008   2023   BIG LOTS   2010   2020  
  OXNARD (7)   1998   JOINT VENTURE   14.4   171,580   100.0   TARGET   2008   2013   FOOD 4 LESS   2008       24 HOUR FITNESS CENTER   2010   2020  
  PACIFICA (10)   2004   JOINT VENTURE   13.6   168,878   97.4   SAFEWAY   2018   2038   ROSS DRESS FOR LESS   2010   2020   RITE AID   2007      
  REDWOOD CITY (11)   2004   FEE   6.4   49,429   100.0   ORCHARD SUPPLY HARDWARE   2009   2029                          
  ROSEVILLE (11)   2004   FEE   20.3   188,493   100.0   SPORTS AUTHORITY   2016   2031   LINENS N THINGS   2012   2027   ROSS DRESS FOR LESS   2008   2028  
  SAN DIEGO   2005   FEE   8.3   122,005   95.4   STEIN MART   2013   2028   HOMEGOODS   2014   2033   OFFICE DEPOT   2013   2028  
  SAN DIEGO (11)   2004   FEE   10.4   98,474   100.0   RITE AID   2018   2043   ROSS DRESS FOR LESS   2009   2024   PETCO   2009   2014  
  SAN DIEGO (7)   2000   JOINT VENTURE   11.2   117,410   100.0   ALBERTSONS   2012       SPORTMART   2013                  
  SAN DIEGO (11)   2004   FEE   42.1   411,375   100.0   COSTCO   2014   2044   PRICE SELF STORAGE   2011       CHARLOTTE RUSSE   2009   2019  
  SAN DIEGO (11)   2004   FEE   5.9   35,000   100.0   CLAIM JUMPER   2013   2023                          
  SAN LUIS OBISPO   2005   FEE   17.6   174,428   98.2   VON'S   2017   2042   MICHAELS   2008   2028   SAV-ON DRUG   2017   2047  
  SAN RAMON (7) (3)   1999   JOINT VENTURE   5.3   41,913   100.0   PETCO   2012   2022                          
  SANTA ANA   1998   FEE   12.0   134,400   100.0   HOME DEPOT   2015   2035                          
  SANTA ROSA   2005   FEE   4.2   41,565   100.0   ACE HARDWARE   2009                              
  SANTEE   2003   JOINT VENTURE   44.5   311,437   96.6   24 HOUR FITNESS   2017       BED BATH & BEYOND   2012   2017   TJ MAXX   2012   2027  
  SANTEE   1998   FEE   10.4   103,903   98.6   OFFICE DEPOT   2011   2021   ROSS DRESS FOR LESS   2009   2024   MICHAELS   2008   2018  
  SIGNAL HILL (11)   2004   FEE   15.0   153,291   100.0   HOME DEPOT   2014   2034   PETSMART   2009   2024              
  STOCKTON   1999   FEE   14.6   152,919   100.0   SUPER UNITED FURNITURE   2009   2019   OFFICE DEPOT   2006   2016   COSTCO   2008   2033  
  TEMECULA (7)   1999   JOINT VENTURE   40.0   342,336   99.5   KMART   2017   2032   FOOD 4 LESS   2010   2030   TRISTONE THEATRES   2008   2018  
  TEMECULA (11)   2004   FEE   47.4   345,113   100.0   WAL-MART   2028   2058   KOHL'S   2023   2043   ROSS DRESS FOR LESS   2014   2034  
  TORRANCE (7)   2000   JOINT VENTURE   26.7   266,847   99.8   HL TORRANCE   2011   2021   LINENS N THINGS   2010   2020   MARSHALLS   2009   2019  
  TUSTIN   2003   JOINT VENTURE   9.1   108,413   100.0   KMART   2018   2048                          
  TUSTIN (4)   2005   JOINT VENTURE   111.8   524,000   100.0   TARGET   2015   2040   WHOLE FOODS   2010   2030   TJ MAXX   2010   2020  
COLORADO                                                          
  AURORA (3)   1998   FEE   13.8   154,485   91.7   TJ MAXX   2007   2012   SPACE AGE FEDERAL   2008                  
  AURORA   1998   FEE   9.9   44,174   87.9                                      
  AURORA   1998   FEE   13.9   152,981   82.4   ALBERTSONS   2007   2052   CROWN LIQUORS   2015       KEY BANK   2007   2032  
  COLORADO SPRINGS   1998   FEE   10.7   107,310   18.6                                      
  DENVER   1998   FEE   1.5   18,405   100.0   SAVE-A-LOT   2012   2027                          
  ENGLEWOOD   1998   FEE   6.5   80,330   92.6   HOBBY LOBBY   2013   2023   OLD COUNTRY BUFFET   2009   2019              
  FORT COLLINS   2000   FEE   10.6   105,862   100.0   KOHL'S   2020   2070                          
  GREENWOOD VILLAGE   2003   JOINT VENTURE   21.0   196,726   100.0   HOME DEPOT   2019   2069                          
  GREELEY (12)   2005   JOINT VENTURE   14.4   138,818   92.5   BED BATH & BEYOND   2016   2036   MICHAELS   2015   2035   CIRCUIT CITY   2016   2031  
  LAKEWOOD   1998   FEE   7.6   82,581   95.2   SAFEWAY   2007   2032                          
CONNECTICUT                                                          
  BRANFORD (7)   2000   JOINT VENTURE   19.1   191,352   98.4   KOHL'S   2007   2022   SUPER FOODMART   2016   2038              
  DERBY   2001   JOINT VENTURE   20.7   53,346   100.0   MARSHALLS   2006   FASHION BUG   2006                      
  ENFIELD (7) (3)   2000   JOINT VENTURE   15.0   136,470   100.0   KOHL'S   2021   2041   BEST BUY   2016   2031              
  FARMINGTON   1998   FEE   16.9   184,572   100.0   SPORTS AUTHORITY   2018   2063   LINENS N THINGS   2016   2036   BORDERS BOOKS   2018   2063  
  HAMDEN (3)   1967   JOINT VENTURE   31.7   341,502   100.0   WAL-MART   2019   2039   BON-TON   2012       BOB'S STORES   2016   2036  
  NORTH HAVEN   1998   FEE   31.7   331,919   96.0   HOME DEPOT   2009   2029   BJ'S   2006   2041   XPECT DISCOUNT   2008   2013  
  WATERBURY   1993   FEE   13.1   137,943   100.0   RAYMOUR & FLANIGAN FURNITURE   2017   2037   STOP & SHOP   2013   2043              
DELAWARE                                                          
  ELSMERE   1979   GROUND LEASE (2076)   17.1   114,530   100.0   VALUE CITY   2008   2038                          
  DOVER (5)   1999   JOINT VENTURE   89.0   —   —                                    
  DOVER (3)   2003   FEE   6.7   6,000   100.0                                      
  MILFORD (8)   2004   JOINT VENTURE   7.8   61,100   86.4   FOOD LION   2014   2034                          
  WILMINGTON (10)   2004   GROUND LEASE (2052)/ JOINT VENTURE   25.9   165,805   100.0   SHOPRITE   2014   2044   SPORTS AUTHORITY   2008   2023   RAYMOUR FURNITURE   2019   2044  

26

Back to Contents

      YEAR
DEVELOPED
OR
ACQUIRED		    OWNERSHIP
INTEREST/
(EXPIRATION)
(2)		    LAND
AREA
(ACRES)		    LEASABLE
AREA
(SQ. FT.)		       MAJOR LEASES
              PERCENT  
            LEASED     LEASE   OPTION       LEASE   OPTION       LEASE   OPTION
  LOCATION           (1)   TENANT NAME   EXPIRATION   EXPIRATION   TENANT NAME EXPIRATION   EXPIRATION   TENANT NAME   EXPIRATION   EXPIRATION
 
FLORIDA                                                       
  ALTAMONTE SPRINGS   1995   FEE   5.6   94,193   100.0   ORIENTAL MARKET   2012   2022   THOMASVILLE HOME   2011   2021   PEARL ARTS N CRAFTS   2008   2018
  ALTAMONTE SPRINGS   1998   JOINT VENTURE   19.4   271,101   95.6   BAER'S FURNITURE   2024   2034   TOUCHSTAR CINEMAS   2010       LEATHER GALLERIES   2009   2014
  BOCA RATON   1967   FEE   9.9   73,549   100.0   WINN DIXIE   2008   2033                        
  BOYNTON BEACH (7)   1999   FEE   18.0   197,362   99.0   BEALLS   2006   2056   ALBERTSONS   2015   2040            
  BRADENTON   1968   JOINT VENTURE   6.2   30,938   100.0   GRAND CHINA BUFFET   2009   2014                        
  BRADENTON   1998   FEE   19.6   162,997   99.5   PUBLIX   2012   2032   TJ MAXX   2009   2019   JO-ANN FABRICS   2009   2024
  BRANDON (7)   2001   FEE   29.7   143,785   100.0   BED BATH & BEYOND   2010   2020   ROSS DRESS FOR LESS   2010   2025   THOMASVILLE HOME   2010   2020
  CLEARWATER   1997   JOINT VENTURE   20.6   75,552   100.0   FREEDOM FORD   2007   2017                        
  CLEARWATER   2005   FEE   20.7   207,071   100.0   HOME DEPOT   2023   2068   JO-ANN FABRICS   2014   2034   STAPLES   2014   2034
  CORAL SPRINGS   1994   FEE   5.9   55,597   100.0   LINENS N THINGS   2012   2027                        
  CORAL SPRINGS   1997   FEE   9.8   86,342   100.0   TJ MAXX   2007   2017   RAG SHOP   2006   2026   BLOCKBUSTER   2006   2016
  CORAL WAY   1992   JOINT VENTURE   8.7   87,305   100.0   WINN DIXIE   2011   2036                        
  CUTLER RIDGE   1998   JOINT VENTURE   6.6   37,640   100.0   POTAMKIN CHEVROLET   2015   2050                        
  EAST ORLANDO   1971   GROUND LEASE (2068)   11.6   131,981   100.0   SPORTS AUTHORITY   2010   2020   OFFICE DEPOT   2010   2025   C-TOWN   2013   2028
  FORT LAUDERDALE (11)   2004   FEE   22.9   229,034   93.2   REGAL CINEMAS   2017   2057   OFFICE DEPOT   2011   2026            
  HIALEAH   1998   JOINT VENTURE   4.6   23,625   100.0   POTAMKIN CHEVROLET   2015   2050                        
  HOLLYWOOD   2002   JOINT VENTURE   5.0   50,000   100.0   HOME GOODS   2010       MICHAELS   2010   2030            
  HOLLYWOOD (11)   2004   FEE   98.9   871,723   100.0   HOME DEPOT   2019   2069   KMART   2019   2069   BJ'S   2019   2069
  HOLLYWOOD (11)   2004   FEE   10.5   137,196   90.4   MANTECH ADVANCED SYSTEMS   2008   2013   TRADER PUBLISHING COMPANY   2007       KOS PHARMACEUTICALS   2007    
  HOMESTEAD   1972   GROUND LEASE (2018)/JOINT VENTURE   21.0   207,714   100.0   PUBLIX   2014   2034   MARSHALLS   2011   2026   OFFICEMAX   2013   2028
  JACKSONVILLE   2002   JOINT VENTURE   5.1   51,002   100.0   MICHAELS   2013   2033   HOME GOODS   2010   2020            
  JACKSONVILLE   1999   FEE   18.6   205,696   97.7   BURLINGTON COAT FACTORY   2008   2018   OFFICEMAX   2012   2032   TJ MAXX   2007   2017
  JACKSONVILLE (4)   2005   JOINT VENTURE   29.1   68,000   100.0   MICHAELS   2015   2035   OFFICEMAX   2018   2033            
  JACKSONVILLE (4)   2003   JOINT VENTURE   86.0   4,000   100.0                                    
  JACKSONVILLE (4)   2005   JOINT VENTURE   95.5   45,000   100.0   HAVERTY'S   2013   2023                        
  JENSEN BEACH (9)   2002   JOINT VENTURE   19.8   197,731   99.3   HOME DEPOT   2025   2030   PETSMART   2009   2029   RAG SHOP   2006   2020
  JENSEN BEACH   1994   FEE   20.7   173,356   94.6   SERVICE MERCHANDISE   2010   2070   MARSHALLS   2010   2020   BEALLS   2008   2013
  KEY LARGO (7)   2000   JOINT VENTURE   21.5   207,332   97.1   KMART   2014   2064   PUBLIX   2009   2029   BEALLS OUTLET   2008   2011
  KISSIMMEE   1996   FEE   18.4   130,983   69.4   OFFICEMAX   2012   2027   JO-ANN FABRICS   2006       DOCKSIDE IMPORT   2006    
  LAKELAND   1990   JOINT VENTURE   10.5   104,862   83.3   SPORTS AUTHORITY   2011       LAKELAND THEATRE   2010       CHUCK E. CHEESE   2013    
  LAKELAND   2001   FEE   22.9   229,383   96.5   STEIN MART   2006   2026   AMC THEATRES   2007   2017   ROSS DRESS FOR LESS   2007   2012
  LARGO   1968   FEE   12.0   149,472   100.0   WAL-MART   2007   2027   SUNSHINE THRIFT STORE   2010   2020            
  LARGO   1992   FEE   29.4   215,916   98.8   PUBLIX   2009   2029   AMC THEATRES   2011   2036   OFFICE DEPOT   2009   2019
  LARGO   1993   FEE   6.6   56,668   66.5                                    
  LAUDERDALE LAKES   1968   JOINT VENTURE   10.0   115,341   100.0   SAVE-A-LOT   2007   2017   THINK THRIFT   2007   2017            
  LAUDERHILL   1978   FEE   17.8   181,416   94.7   BABIES R US   2009   2014   SMART & FINAL   2017       WORLD JEWELRY CENTER II   2014   2024
  LEESBURG   1969   GROUND LEASE (2017)   1.3   13,468   100.0                                    
  MARGATE   1993   FEE   34.1   260,729   93.9   PUBLIX   2008   2028   OFFICE DEPOT   2010   2020   SAM ASH MUSIC   2011    
  MELBOURNE   1968   GROUND LEASE (2071)   11.5   168,737   91.1   SUBMITTORDER   2010   2022   WALGREENS   2045       GOODWILL INDUSTRIES   2007   2012
  MELBOURNE   1998   FEE   13.2   148,660   73.3   JO-ANN FABRICS   2016   2031   BED BATH & BEYOND   2013   2028   MARSHALLS   2010    
  MIAMI   1968   FEE   8.2   104,908   100.0   HOME DEPOT   2029   2059   MILAM'S MARKET   2008       WALGREENS   2009    
  MIAMI   1962   JOINT VENTURE   14.0   79,273   100.0   BABIES R US   2011   2021   FIRESTONE TIRE   2008                
  MIAMI   1986   FEE   7.8   83,380   100.0   PUBLIX   2009   2029   WALGREENS   2018                
  MIAMI   1998   JOINT VENTURE   6.3   29,166   100.0   LEHMAN TOYOTA   2015   2050                        
  MIAMI   1998   JOINT VENTURE   3.2   17,117   100.0   LEHMAN TOYOTA   2015   2050                        
  MIAMI   1998   JOINT VENTURE   11.0   86,900   100.0   POTAMKIN CHEVROLET   2015   2050                        
  MIAMI (11)   2004   FEE   31.2   402,801   100.0   KMART   2012   2042   EL DORADO FURNITURE   2017   2032   SYMS CORPORATION   2011   2041
  MIAMI   1995   FEE   5.4   63,604   100.0   PETCO   2016   2021   PARTY CITY   2007   2017            
  MIDDLEBURG (4)   2005   JOINT VENTURE   38.1   2,000   100.0                                    
  MIRAMAR (4)   2005   JOINT VENTURE   36.7   —   —                                    
  MOUNT DORA   1997   FEE   12.4   120,430   100.0   KMART   2013   2063                        
  NORTH MIAMI BEACH   1985   FEE   15.9   108,795   100.0   PUBLIX   2019   2039   WALGREENS   2058                
  OCALA (3)   1997   FEE   27.2   248,497   91.5   KMART   2006   2021   BEST BUY   2019   2034   SERVICE MERCHANDISE   2007   2032
  ORANGE PARK   2003   JOINT VENTURE   5.0   50,299   100.0   BED BATH & BEYOND   2015       MICHAELS   2010                
  ORLANDO   1968   FEE   12.0   131,646   99.1   BED BATH & BEYOND   2007   2022   BOOKS-A-MILLION   2006   2016   OFFICEMAX   2008   2023
  ORLANDO (7)   2000   JOINT VENTURE   18.0   179,065   100.0   KMART   2014   2064   PUBLIX   2012   2037            
  ORLANDO   1968   JOINT VENTURE   10.0   114,434   95.2   BALLY TOTAL FITNESS   2008   2018   HSN   2009       BEDDING & FURNITURE   2009    
  ORLANDO   1968   GROUND LEASE (2047)/JOINT VENTURE   7.8   110,788   98.7   OFFICE FURNITURE   2008       CROSSTOWN SPORTS   2006                
  ORLANDO (3)   1994   FEE   28.0   236,486   97.3   OLD TIME POTTERY   2010   2020   SPORTS AUTHORITY   2011   2031   TOUCHSTAR CINEMAS   2010    
  ORLANDO   1996   FEE   11.7   132,856   100.0   ROSS DRESS FOR LESS   2008   2028   BIG LOTS   2009   2014   WORLD GYM   2010   2020
  ORLANDO (11)   2004   FEE   14.0   154,447   81.8   MARSHALLS   2013   2028   OFF BROADWAY SHOES   2013   2023   GOLFSMITH GOLF CENTER   2014   2024
  PALATKA   1970   FEE   8.9   82,730   61.3   BIG LOTS   2007   2017                        
  PLANTATION   1974   JOINT VENTURE   4.6   60,414   100.0   BREAD OF LIFE   2009   2019   WHOLE FOODS   2009   2019            
  POMPANO BEACH   1968   JOINT VENTURE   6.6   66,838   93.1   SAVE-A-LOT   2015   2030                        
  POMPANO BEACH (12)   2004   JOINT VENTURE   18.6   140,312   92.0   WINN DIXIE   2018   2043   CVS   2020   2040            
  PORT RICHEY (7) (3)   1998   FEE   14.3   103,294   86.4   CIRCUIT CITY   2011   2031   STAPLES   2006   2011   MICHAELS   2006    
  RIVIERA BEACH   1968   JOINT VENTURE   5.1   46,390   97.7   FURNITURE KINGDOM   2009   2014   GOODWILL INDUSTRIES   2008                
  SANFORD   1989   FEE   40.9   160,994   92.3   ROSS DRESS FOR LESS   2012   2032   OFFICE DEPOT   2009   2019   DOLLAR TREE   2006   2021
  SARASOTA   1970   FEE   10.0   102,455   100.0   TJ MAXX   2007   2017   OFFICEMAX   2009   2024   DOLLAR TREE   2012   2032
  SARASOTA   1989   FEE   12.0   129,700   100.0   SWEETBAY   2020   2040   DG ACE HARDWARE   2008   2023   ANTHONY'S LADIES WEAR   2007   2017
  ST. AUGUSTINE   2005   JOINT VENTURE   1.5   62,942   100.0   ROWE'S SUPERMARKET   2025   2045                        
  ST. PETERSBURG   1968   GROUND LEASE (2084)/JOINT VENTURE   9.0   118,979   86.6   KASH N' KARRY   2017   2037   TJ MAXX   2007   2012   DOLLAR TREE   2007   2022
  TALLAHASSEE   1998   FEE   12.8   105,655   80.7   STEIN MART   2008       SHOE STATION   2007   2012            
  TAMPA (7)   2001   JOINT VENTURE   73.0   340,506   100.0   BEST BUY   2016   2031   JO-ANN FABRICS   2016   2031   BED BATH & BEYOND   2015   2030
  TAMPA   1997   FEE   16.3   127,837   100.0   STAPLES   2008   2018   ROSS DRESS FOR LESS   2007   2022   US POST OFFICE   2011   2021
  TAMPA   2004   FEE   7.5   75,297   100.0   AMERICAN SIGNATURE HOME   2019   2044   DSW SHOE WAREHOUSE   2018   2033            
  TAMPA (3)   2004   FEE   22.4   168,210   100.0                                    
  WEST PALM BEACH   1967   JOINT VENTURE   7.6   81,073   100.0   WINN DIXIE   2010   2030                        
  WEST PALM BEACH   1995   FEE   7.9   80,845   91.3   BABIES R US   2011   2021                        
  WEST PALM BEACH (11)   2004   FEE   33.0   357,537   96.3   KMART   2018   2068   WINN DIXIE   2019   2049   LINENS N THINGS   2010   2025
  WINTER HAVEN   1973   JOINT VENTURE   13.9   95,188   100.0   BIG LOTS   2010   2020   JO-ANN FABRICS   2011   2016   BUDDY'S HOME FURNISHINGS   2015   2025
GEORGIA                                                        
  AUGUSTA   1995   FEE   11.3   112,537   89.2   TJ MAXX   2010   2015   ROSS DRESS FOR LESS   2013   2033   RUGGED WEARHOUSE   2008   2018
  AUGUSTA (7)   2001   JOINT VENTURE   52.6   530,915   91.7   SPORTS AUTHORITY   2012   2027   ASHLEY HOME STORE   2009   2019   BED BATH & BEYOND   2013   2028
  MACON   1969   FEE   12.3   127,252   51.8   FREDS STORES   2009   2014   DOLLAR TREE   2011   2026   SMALL SMILES   2009   2019
  SAVANNAH   1993   FEE   22.2   187,076   99.5   BED BATH & BEYOND   2013   2028   TJ MAXX   2010   2015   MARSHALLS   2007   2022
  SAVANNAH   1995   GROUND LEASE (2045)   9.5   88,325   100.0   MEDIA PLAY   2011   2021   STAPLES   2015   2030   WEST MARINE   2006   2009
  SNELLVILLE (7)   2001   JOINT VENTURE   35.6   311,033   97.1   KOHL'S   2022   2062   BELK   2015   2035   LINENS N THINGS   2015   2030
  VALDOSTA   2004   JOINT VENTURE   17.5   175,396   100.0   LOWE'S HOME CENTER   2019   2069                        
IDAHO                                                        
  NAMPA (4)   2005   JOINT VENTURE   35.0   —   —                                    
  NAMPA (4)   2005   FEE   54.5   —   —                                    

27

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      YEAR
DEVELOPED
OR
ACQUIRED		    OWNERSHIP
INTEREST/
(EXPIRATION)
(2)		    LAND
AREA
(ACRES)		    LEASABLE
AREA
(SQ. FT.)		       MAJOR LEASES
              PERCENT  
            LEASED     LEASE   OPTION       LEASE   OPTION       LEASE   OPTION
  LOCATION           (1)   TENANT NAME   EXPIRATION   EXPIRATION   TENANT NAME EXPIRATION   EXPIRATION   TENANT NAME   EXPIRATION   EXPIRATION
 
ILLINOIS                                                        
  ALTON   1986   FEE   21.2   159,824   82.1   VALUE CITY   2008   2023                        
  ARLINGTON HEIGHTS   1998   FEE   7.0   80,040   100.0   DIRECTUS FURNITURE   2010   2015                        
  AURORA (13)   2005   JOINT VENTURE   34.7   361,984   74.7   BEST BUY   2011   2026   VALUE CITY   2009   2019   SPORTMART   2006   2016
  AURORA   1998   FEE   17.9   91,182   100.0   AURORA FRESH MARKET   2021   2041                        
  BATAVIA (7)   2002   FEE   31.7   272,410   100.0   KOHL'S   2019   2049   HOBBY LOBBY   2009   2019   LINENS N THINGS   2014   2029
  BELLEVILLE   1987   GROUND LEASE (2057)   20.3   81,490   100.0   KMART   2024   2054                        
  BLOOMINGTON   1972   FEE   16.1   188,250   100.0   SCHNUCK MARKETS   2014   2029   TOYS "R" US   2015   2045   BARNES & NOBLE   2010   2015
  BLOOMINGTON   2003   JOINT VENTURE   11.0   73,951   100.0   JEWEL-OSCO   2014   2039                        
  BRADLEY   1996   FEE   5.4   80,535   100.0   CARSON PIRIE SCOTT   2014   2034                        
  CALUMET CITY (3)   1997   FEE   17.0   159,634   96.8   MARSHALLS   2014   2029   BEST BUY   2012   2032   BED BATH & BEYOND   2014   2024
  CARBONDALE   1997   GROUND LEASE (2052)   8.1   80,535   100.0   K'S MERCHANDISE   2012   2052                        
  CHAMPAIGN (7)   2001   JOINT VENTURE   9.3   111,720   100.0   BEST BUY   2016   2031   DICK'S SPORTING GOODS   2016   2031   MICHAELS   2010   2025
  CHAMPAIGN   1999   FEE   9.0   102,615   100.0   K'S MERCHANDISE   2014   2034                        
  CHICAGO   1997   GROUND LEASE (2040)   17.5   102,011   100.0   BURLINGTON COAT FACTORY   2020   2035   RAINBOW   2011   2021   BEAUTY ONE   2010   2015
  CHICAGO (6)   1997   FEE   6.0   86,894   100.0   KMART   2024   2054                        
  COUNTRYSIDE   1997   GROUND LEASE (2053)   27.7   117,005   100.0   HOME DEPOT   2023   2053                        
  CRESTWOOD   1997   GROUND LEASE (2051)   36.8   79,903   100.0   SEARS   2024   2051                        
  CRYSTAL LAKE   1998   FEE   6.1   80,390   100.0   HOBBY LOBBY   2009   2019   DINOREX   2012   2022            
  DOWNERS GROVE   1998   GROUND LEASE (2041)   7.2   192,639   51.9   HOME DEPOT EXPO   2022   2062                        
  DOWNERS GROVE   1999   FEE   24.8   144,770   97.2   DOMINICK'S   2009   2019   DOLLAR TREE   2008   2023   WALGREENS   2022    
  DOWNERS GROVE   1997   FEE   12.0   141,906   100.0   TJ MAXX   2009   2024   BEST BUY   2015   2030   BEST BUY   2012   2032
  ELGIN   1972   FEE   18.7   186,432   100.0   ELGIN MALL   2013   2023   ELGIN FARMERS PRODUCTS   2010   2030   AARON SALES & LEASE   2012   2022
  FAIRVIEW HEIGHTS   1986   GROUND LEASE (2050)   19.1   192,073   100.0   KMART   2024   2050   OFFICEMAX   2015   2025   WALGREENS   2010   2029
  FOREST PARK   1997   GROUND LEASE (2021)   9.3   98,371   100.0   KMART   2021                            
  GENEVA (3)   1996   FEE   8.2   110,188   100.0   GANDER MOUNTAIN   2013   2028                        
  MATTESON   1997   FEE   17.0   157,885   100.0   SPORTMART   2014   2029   MARSHALLS   2010   2025   LINENS N THINGS   2014   2029
  MOUNT PROSPECT   1997   FEE   16.8   192,547   100.0   KOHL'S   2024   2054   HOBBY LOBBY   2016   2026   POOL-A-RAMA   2011   2018
  MUNDELIEN   1991   FEE   7.6   89,692   100.0   BURLINGTON COAT FACTORY   2018   2033                        
  NAPERVILLE   1997   FEE   9.0   102,327   100.0   BURLINGTON COAT FACTORY   2013   2033                        
  NORRIDGE   1997   GROUND LEASE (2042)   11.7   116,914   100.0   KMART   2024   2042                        
  OAK LAWN   1997   FEE   15.4   165,337   96.5   KMART   2024   2054   CHUCK E CHEESE   2007                
  OAKBROOK TERRACE   1983   FEE   1.1   11,360   100.0   Pompei Bakery   2011   2021                        
  OAKBROOK TERRACE   1997   FEE   15.6   164,903   100.0   HOME DEPOT   2024   2044   LINENS N THINGS   2017   2032   LOYOLA MEDICAL CENTER   2011   2016
  ORLAND PARK   1980   FEE   18.8   131,546   100.0   VALUE CITY   2015   2030                        
  OTTAWA   1970   FEE   9.0   60,000   100.0   VALUE CITY   2006   2011                        
  PEORIA   1997   GROUND LEASE (2031)   20.5   156,067   100.0   KMART   2006       MARSHALLS   2009   2024            
  ROCKFORD (8)   2005   JOINT VENTURE   8.9   89,047   100.0   BEST BUY   2016   2031   LINENS N THINGS   2016   2031            
  ROLLING MEADOWS   2003   FEE   3.7   37,225   100.0   FAIR LANES ROLLING MEADOWS   2008   2013                        
  SCHAUMBURG   2003   JOINT VENTURE   62.9   629,374   93.2   GALYAN'S TRADING COMPANY   2013   2038   CARSON PIRIE SCOTT   2021   2071   LOEWS THEATRES   2019   2039
  SCHAUMBURG   1998   JOINT VENTURE   7.3   167,690   —                                    
  SKOKIE   1997   FEE   5.8   58,455   100.0   MARSHALLS   2010   2025   OLD NAVY   2010   2015            
  STREAMWOOD   1999   FEE   5.6   81,000   100.0   VALUE CITY   2015   2030                        
  WAUKEGAN   1998   FEE   6.8   90,555   100.0   PICK N SAVE   2009   2029                        
  WOODRIDGE   1998   FEE   13.1   161,272   98.6   HOLLYWOOD STARDUST THEATRES   2012   2022   KOHL'S   2010   2030   MCSPORTS   2006    
INDIANA                                                        
  EVANSVILLE   1986   FEE   14.2   192,933   69.0   BURLINGTON COAT FACTORY   2007   2027   OFFICEMAX   2012   2027   FAMOUS FOOTWEAR   2010   2025
  EVANSVILLE   1986   FEE   11.5   149,182   4.4                                    
  FELBRAM   1970   FEE   4.1   27,400   91.2   SAVE-A-LOT   2011   2016                        
  GREENWOOD   1970   FEE   25.7   168,577   100.0   BABY SUPERSTORE   2011   2021   TOYS "R" US   2011   2056   TJ MAXX   2010   2015
  GRIFFITH   1997   GROUND LEASE (2054)   10.6   114,684   100.0   KMART   2024   2054                        
  INDIANAPOLIS   1963   JOINT VENTURE   17.4   165,220   99.3   KROGER   2026   2066   AJ WRIGHT   2012   2027   CVS   2021   2031
  INDIANAPOLIS   1986   FEE   20.6   185,589   97.2   TARGET   2009   2029   DOLLAR TREE   2009   2014   RAINBOW   2009   2019
  LAFAYETTE   1971   FEE   12.4   90,500   98.2   MENARD   2006                            
  LAFAYETTE   1997   FEE   24.3   235,998   85.6   JO-ANN FABRICS   2010   2020   SMITH OFFICE EQUIPMENT   2008                
  LAFAYETTE   1998   FEE   43.2   214,876   89.5   PETSMART   2012   2032   STAPLES   2011   2026   MICHAELS   2006   2026
  MISHAWAKA   1998   FEE   7.5   82,100   100.0   K'S MERCHANDISE   2013   2023                        
  SOUTH BEND (3)   1997   JOINT VENTURE   12.1   121,122   100.0   BED BATH & BEYOND   2015   2040   DSW SHOE WAREHOUSE   2020   2035   PETSMART   2015   2030
  SOUTH BEND   1999   FEE   1.8   81,668   100.0   MENARD   2010   2030                        
IOWA                                                        
  CLIVE   1996   FEE   8.8   90,000   100.0   KMART   2021   2051                        
  DAVENPORT   1997   GROUND LEASE (2028)   9.1   91,035   100.0   KMART   2024   2028                        
  DES MOINES   1999   FEE   23.0   156,506   66.0   BEST BUY   2008   2023   OFFICEMAX   2008   2018   JO-ANN FABRICS   2007   2017
  DUBUQUE   1997   GROUND LEASE (2019)   6.5   82,979   100.0   SHOPKO   2018   2019                        
  SOUTHEAST DES MOINES   1996   FEE   9.6   111,847   100.0   HOME DEPOT   2020   2065                        
  WATERLOO   1996   FEE   9.0   104,074   100.0   HOBBY LOBBY   2014   2024   TJ MAXX   2014   2024   SHOE CARNIVAL   2015   2025
KANSAS                                                        
  OVERLAND PARK   1980   FEE   14.5   120,164   100.0   HOME DEPOT   2010   2050                        
  WICHITA (7)   1998   FEE   13.5   133,771   100.0   BEST BUY   2010   2025   TJ MAXX   2010   2020   MICHAELS   2010   2025
  EAST WICHITA (7)   1996   FEE   6.5   96,011   100.0   DICK'S SPORTING GOODS   2018   2033   GORDMANS   2012   2032            
  WEST WICHITA (7)   1996   FEE   8.1   96,319   100.0   SHOPKO   2018   2038                        
KENTUCKY                                                        
  BELLEVUE   1976   FEE   6.0   53,695   100.0   KROGER   2010   2035                        
  FLORENCE (10)   2004   FEE   8.2   99,578   97.8   DICK'S SPORTING GOODS   2018   2033   LINENS N THINGS   2018   2033   MCSWAIN CARPETS   2012   2017
  LEXINGTON   1993   FEE   35.8   258,713   99.4   BEST BUY   2009   2024   BED BATH & BEYOND   2013   2038   TOYS "R" US   2013   2038
  HINKLEVILLE   1998   GROUND LEASE (2039)   2.0   85,229   100.0   K'S MERCHANDISE   2014   2039                        
LOUISIANA                                                        
  NEW ORLEANS   1983   JOINT VENTURE   7.0   190,000   100.0   DILLARDS   2011   2031                        
  BATON ROUGE   1997   FEE   18.6   349,907   96.7   BURLINGTON COAT FACTORY   2009   2024   STEIN MART   2011   2016   MARSHALLS   2011   2016
  BATON ROUGE   2005   JOINT VENTURE   9.4   67,755   91.7   WAL-MART   2024   2034                        
  HOUMA   1999   FEE   10.1   98,586   94.9   OLD NAVY   2009   2014   OFFICEMAX   2013   2028   MICHAELS   2009   2019
  HARVEY (8)   2003   JOINT VENTURE   17.4   181,660   97.8   BEST BUY   2017   2032   LINENS N THINGS   2012   2032   BARNES & NOBLE   2012   2022
  LAFAYETTE   1997   FEE   21.9   244,733   89.0   STEIN MART   2010   2020   LINENS N THINGS   2009   2024   TJ MAXX   2009   2019
MAINE                                                        
  BANGOR   2001   FEE   8.6   86,422   100.0   BURLINGTON COAT FACTORY   2007   2032                        
MARYLAND                                                        
  BALTIMORE   2003   FEE   4.2   44,170   75.1                                    
  BALTIMORE (8)   2004   JOINT VENTURE   18.4   152,834   97.4   KMART   2010   2055   SALVO AUTO PARTS   2009   2019            
  BALTIMORE (8)   2005   JOINT VENTURE   10.6   112,722   100.0   SAFEWAY   2016   2046   RITE AID   2011   2026   FOOT LOCKER   2007    
  BALTIMORE (13)   2005   JOINT VENTURE   5.8   49,629   100.0   CORT FURNITURE RENTAL   2012   2022                        
  BALTIMORE (8)   2004   FEE   7.3   77,287   100.0   SUPER FRESH   2021   2061                        
  BALTIMORE (10) (3)   2004   JOINT VENTURE   7.4   77,365   98.9   GIANT FOOD   2016   2031                        
  BALTIMORE (12)   2004   JOINT VENTURE   7.5   90,903   98.7   GIANT FOOD   2026   2051                        
  BALTIMORE (8)   2005   JOINT VENTURE   8.8   90,830   100.0   GIANT FOOD   2011   2041                        

28

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      YEAR
DEVELOPED
OR
ACQUIRED		    OWNERSHIP
INTEREST/
(EXPIRATION)
(2)		    LAND
AREA
(ACRES)		    LEASABLE
AREA
(SQ. FT.)		       MAJOR LEASES
              PERCENT  
            LEASED     LEASE   OPTION       LEASE   OPTION       LEASE   OPTION
  LOCATION           (1)   TENANT NAME   EXPIRATION   EXPIRATION   TENANT NAME EXPIRATION   EXPIRATION   TENANT NAME   EXPIRATION   EXPIRATION
 
  BALTIMORE (5)   2003   FEE   3.0   —   —                                    
  BEL AIR (12) (3)   2004   FEE   19.7   115,927   100.0   SAFEWAY   2030   2060   CVS   2021   2041            
  BEL AIR   2003   FEE   2.7   26,900   94.1                                    
  CLINTON   2003   FEE   0.3   2,544   100.0                                    
  CLINTON   2003   GROUND LEASE (2069)   2.6   26,412   100.0   FAIR LANES CLINTON   2006                            
  COLUMBIA   2002   JOINT VENTURE   5.0   50,000   100.0   MICHAELS   2013       HOME GOODS   2011                
  COLUMBIA (8)   2002   JOINT VENTURE   7.6   73,299   100.0   OLD NAVY   2008   2013                        
  COLUMBIA (8)   2002   JOINT VENTURE   15.5   86,456   100.0   GIANT FOOD   2009   2019                        
  COLUMBIA   2005   FEE   16.3   100,521   100.0   GIANT FOOD   2012   2022                        
  COLUMBIA (8) (3)   2002   JOINT VENTURE   12.2   86,032   95.6   SAFEWAY   2006                            
  COLUMBIA (8)   2002   JOINT VENTURE   12.3   91,165   100.0   SAFEWAY   2018   2043                        
  COLUMBIA   2002   FEE   7.3   55,791   100.0   GIANT FOOD   2007                            
  COLUMBIA   2002   FEE   2.5   23,835   100.0   DAVID'S NATURAL MARKET   2014   2019                        
  COLUMBIA (8)   2002   JOINT VENTURE   15.2   105,907   100.0   GIANT FOOD   2017   2027                        
  COLUMBIA (12)   2005   JOINT VENTURE   0.7   6,780   100.0                                    
  EASTON (10)   2004   JOINT VENTURE   11.1   113,330   100.0   GIANT FOOD   2024   2054   FASHION BUG   2007   2012            
  ELLICOTT CITY (10)   2004   JOINT VENTURE   31.8   139,898   100.0   SAFEWAY   2012   2042   PETCO   2011   2021            
  FREDRICK COUNTY (3)   2003   FEE   6.4   64,105   100.0   GIANT FOOD   2025   2055                        
  GAITHERSBURG   1989   FEE   8.7   88,277   100.0   GREAT BEGINNINGS FURNITURE   2011   2021   FURNITURE 4 LESS   2010                
  GLEN BURNIE (12)   2004   JOINT VENTURE   21.9   249,746   100.0   LOWE'S HOME CENTER   2019   2059   GIANT FOOD   2015   2025            
  GLEN BURNIE (8)   2004   JOINT VENTURE   4.5   75,257   92.5   SEVERN GRAPHICS   2015   2020                        
  HAGERSTOWN (3)   1973   FEE   10.5   117,718   61.8   SUPER SHOE   2011   2016   ADVANCE AUTO PARTS   2006   2011            
  HUNT VALLEY (3)   2003   FEE   9.1   94,653   95.4   GIANT FOOD   2013   2033                        
  LANDOVER   1993   FEE   23.3   232,903   100.0   RAYTHEON   2007   2010                        
  LAUREL   1964   FEE   8.1   75,924   100.0   VILLAGE THRIFT STORE   2007       DOLLAR TREE   2010   2015   OLD COUNTRY BUFFET   2009   2019
  LAUREL   1972   FEE   10.0   81,550   100.0   ROOMSTORE   2009   2014                        
  LINTHICUM   2003   FEE   0.6   7,872   100.0                                    
  LUTHERVILLE (8)   2004   GROUND LEASE (2066)   12.9   163,709   100.0   METRO FOOD   2018   2038   CIRCUIT CITY   2010   2030   LOEHMANN'S   2006   2015
  LUTHERVILLE (8)   2004   JOINT VENTURE   1.2   12,333   86.7                                    
  NORTH EAST (8)   2004   JOINT VENTURE   17.5   83,690   95.8   FOOD LION   2018   2038                        
  OWINGS MILLS (12)   2004   JOINT VENTURE   11.0   116,303   97.2   GIANT FOOD   2020   2045   MERRITT ATHLETIC CLUB   2010   2015            
  PASADENA   2003   GROUND LEASE (2030)   3.0   38,727   100.0                                    
  PERRY HALL (3)   2003   FEE   15.7   177,307   71.1   BRUNSWICK (LEISERV) BOWLING   2010       RITE AID   2010   2035   DOLLAR EXPRESS   2010   2020
  PERRY HALL (10)   2004   JOINT VENTURE   8.2   65,059   100.0   SUPER FRESH   2022   2062                        
  TIMONIUM (8)   2004   JOINT VENTURE   6.0   59,799   97.0   AMERICAN RADIOLOGY   2012   2027                        
  TIMONIUM (3)   2003   FEE   17.2   127,097   98.0   STAPLES   2020   2045                        
  TOWSON (10)   2004   JOINT VENTURE   8.7   84,280   100.0   LINENS N THINGS   2015   2025   COMPUSA   2014   2029   TWEETER ENTERTAINMENT   2014   2024
  TOWSON (12)   2004   JOINT VENTURE   43.1   669,926   100.0   WAL-MART   2020   2105   TARGET   2009   2049   SUPER FRESH   2019   2049
  WALDORF   2003   FEE   2.6   26,128   100.0   FAIR LANES WALDORF   2007   2017                        
  WALDORF   2003   FEE   0.5   4,500   100.0                                    
  WOODSTOCK (8)   2004   JOINT VENTURE   13.9   103,547   100.0   WEIS MARKETS   2021   2041                        
MASSACHUSETTS                                                        
  FOXBOROUGH (7)   2000   JOINT VENTURE   11.9   118,844   90.3   STOP & SHOP   2012   2022   OCEAN STATE JOB LOT   2007   2022            
  GREAT BARRINGTON   1994   FEE   14.1   131,235   100.0   KMART   2006   2016   PRICE CHOPPER   2016   2036            
  HYANNIS (10)   2004   JOINT VENTURE   22.6   225,634   100.0   SHAW'S SUPERMARKET   2018   2028   TOYS "R" US   2019   2029   HOME GOODS   2010   2020
  MARLBOROUGH   2004   JOINT VENTURE   16.1   104,125   100.0   BEST BUY   2019   2034   DSW SHOE WAREHOUSE   2014   2034   BORDERS BOOKS   2019   2034
  PITTSFIELD (10)   2004   JOINT VENTURE   13.0   72,014   96.5   STOP & SHOP   2014   2044                        
  QUINCY (12)   2005   JOINT VENTURE   8.0   80,510   100.0   SHAW'S SUPERMARKET   2009   2033   BROOKS PHARMACY   2017   2047            
  SHREWSBURY   1955   FEE   10.8   108,418   100.0   BOB'S STORES   2018   2033   BED BATH & BEYOND   2012   2032   STAPLES   2011   2021
MICHIGAN                                                        
  CLARKSTON   1996   FEE   20.0   144,943   79.5   FARMER JACK   2015   2045   CVS   2010   2020            
  CLAWSON (3)   1993   FEE   13.5   165,801   100.0   FARMER JACK   2006   2016   STAPLES   2011   2026   LITTLE CAESARS   2007    
  FARMINGTON   1993   FEE   2.8   96,983   100.0   DAMMAN HARDWARE   2015   2030   FARMINGTON DOLLAR   2006   2010   FITNESS 19   2015   2025
  KALAMAZOO (3)   2002   JOINT VENTURE   60.0   242,485   100.0   HOBBY LOBBY   2013   2023   VALUE CITY FURNITURE   2020   2040   MARSHALLS   2010   2020
  LIVONIA   1968   FEE   4.5   44,185   100.0   DAMMAN HARDWARE   2018   2033   CENTURY 21   2010                
  MUSKEGON   1985   FEE   12.2   79,215   100.0   PLUMB'S FOOD   2007   2022   JO-ANN FABRICS   2007   2012            
  NOVI   2003   JOINT VENTURE   6.0   60,000   100.0   MICHAELS   2016       HOME GOODS   2011                
  TAYLOR   1993   FEE   13.0   141,549   100.0   KOHL'S   2022   2042   BABIES R US   2017   2043   PARTY CONCEPTS   2007   2012
  TROY   2005   JOINT VENTURE   22.4   223,697   94.5   WAL-MART   2021   2051   MARSHALLS   2012   2027            
  WALKER   1993   FEE   41.8   338,928   100.0   RUBLOFF DEVELOPMENT   2016   2051   KOHL'S   2017   2037   LOEKS THEATRES   2007   2042
MINNESOTA                                                        
  MAPLE GROVE (7)   2001   JOINT VENTURE   63.0   466,437   99.5   BYERLY'S   2020   2035   BEST BUY   2015   2030   JO-ANN FABRICS   2010   2030
  MAPLEWOOD (8) (3)   2002   JOINT VENTURE   8.2   110,625   100.0   BEST BUY   2014   2029                        
  MINNETONKA (7)   1998   JOINT VENTURE   12.1   120,220   100.0   TOYS "R" US   2016   2031   GOLFSMITH GOLF CENTER   2008   2018   OFFICEMAX   2011    
MISSISSIPPI                                                        
  JACKSON   2002   JOINT VENTURE   5.0   50,000   100.0   MICHAELS   2014       HOME GOODS   2014                
  HATTIESBURG (4)   2004   JOINT VENTURE   54.6   168,000   100.0   ROSS DRESS FOR LESS   2016   2041   BED BATH & BEYOND   2016   2041   PETSMART   2016   2046
MISSOURI                                                        
  BRIDGETON   1997   GROUND LEASE (2040)   27.3   101,592   100.0   KOHL'S   2010   2020                        
  CRYSTAL CITY   1997   GROUND LEASE (2032)   10.1   100,724   100.0   KMART   2024   2032                        
  ELLISVILLE   1970   FEE   18.4   118,080   91.5   SHOP N SAVE   2010   2015                        
  INDEPENDENCE   1985   FEE   21.0   184,870   100.0   KMART   2024   2054   THE TILE SHOP   2014   2024   OFFICE DEPOT   2012   2032
  JOPLIN   1998   FEE   12.6   155,416   100.0   GOODY'S FAMILY CLOTHING   2010   2015   HASTINGS BOOKS   2009   2014   OFFICEMAX   2010   2025
  JOPLIN (7)   1998   JOINT VENTURE   9.5   80,524   100.0   SHOPKO   2018   2038                        
  KANSAS CITY   1997   FEE   17.8   150,381   82.3   HOME DEPOT   2010   2050                        
  KIRKWOOD (3)   1980   GROUND LEASE (2069)   19.8   253,662   100.0   HEMISPHERES   2014   2024   HOBBY LOBBY   2014   2024   GART SPORTS   2014   2029
  LEMAY (3)   1974   FEE   9.8   66,698   100.0   SHOP N SAVE   2020   2065   DOLLAR GENERAL   2008                
  MANCHESTER (7)   1998   JOINT VENTURE   9.6   89,305   100.0   KOHL'S   2018   2038                        
  SPRINGFIELD   1994   FEE   41.5   277,590   100.0   BEST BUY   2011   2026   JC PENNEY   2010   2015   TJ MAXX   2006   2021
  SPRINGFIELD   2002   FEE   8.5   84,916   100.0   BED BATH & BEYOND   2013   2028   MARSHALLS   2012   2027   BORDERS BOOKS   2023   2038
  SPRINGFIELD   1986   GROUND LEASE (2087)   18.5   202,926   100.0   KMART   2024   2054   OFFICE DEPOT   2010       BARNES & NOBLE   2017   2047
  ST. CHARLES   1998   FEE   36.9   8,000   100.0                                    
  ST. CHARLES   1999   GROUND LEASE (2039)   8.4   84,460   100.0   KOHL'S   2019   2039                        
  ST. LOUIS   1998   FEE   11.4   113,781   100.0   KOHL'S   2018   2038   CLUB FITNESS   2014   2024            
  ST. LOUIS   1972   FEE   13.1   129,093   92.7   SHOP N SAVE   2017   2082                        
  ST. LOUIS   1986   FEE   17.5   176,273   95.6   BURLINGTON COAT FACTORY   2009   2024   BIG LOTS   2015   2030   OFFICE DEPOT   2007   2015
  ST. LOUIS   1997   GROUND LEASE (2025)   19.7   170,779   89.2   HOME DEPOT   2026   2056   OFFICE DEPOT   2015   2026            
  ST. LOUIS   1997   GROUND LEASE (2035)   37.7   174,967   83.0   KMART   2024   2035                        
  ST. LOUIS   1997   GROUND LEASE (2040)   16.3   128,765   100.0   KMART   2024   2040                        
  ST. PETERS   1997   GROUND LEASE (2073)   14.8   175,121   95.9   HOBBY LOBBY   2014   2024   GART SPORTS   2014   2029   OFFICE DEPOT    2019    
NEBRASKA                                                        
  OMAHA (4)   2005   JOINT VENTURE   67.7   107,000   100.0   MARSHALLS   2017   2037   LINENS N THINGS   2018   2033   OFFICEMAX   2017   2032
NEVADA                                                        
  HENDERSON (4)   1999   JOINT VENTURE   32.1   140,000   100.0   LEVITZ   2013   2023   BIG LOTS   2016   2036   SAVERS   2015   2035

29

Back to Contents

      YEAR
DEVELOPED
OR
ACQUIRED		    OWNERSHIP
INTEREST/
(EXPIRATION)
(2)		    LAND
AREA
(ACRES)		    LEASABLE
AREA
(SQ. FT.)		       MAJOR LEASES
              PERCENT  
            LEASED     LEASE   OPTION       LEASE   OPTION       LEASE   OPTION
  LOCATION           (1)   TENANT NAME   EXPIRATION   EXPIRATION   TENANT NAME EXPIRATION   EXPIRATION   TENANT NAME   EXPIRATION   EXPIRATION
 
NEW HAMPSHIRE                                                      
  NASHUA (10)   2004   JOINT VENTURE   17.9   179,220   95.6   DSW SHOE WAREHOUSE   2011   2031   BED BATH & BEYOND   2007   2032   MICHAELS   2007   2027
  NEW LONDON   2005   FEE   10.5   104,910   100.0                                    
  SALEM   1994   FEE   39.8   344,076   100.0   KOHL'S   2008   2013   SHAW'S SUPERMARKET   2008   2038   BOB'S STORES   2011   2021
NEW JERSEY                                                      
  BAYONNE   2004   FEE   0.6   23,901   100.0   DUANE READE   2014                            
  BRIDGEWATER (7) (3)   2001   JOINT VENTURE   15.8   370,545   100.0   COSTCO   2019   2049   BED BATH & BEYOND   2010   2030   BABIES R US   2014   2039
  CHERRY HILL   1985   JOINT VENTURE   18.6   124,750   89.9   STOP & SHOP   2016   2036   RETROFITNESS   2013   2020            
  CHERRY HILL   1996   GROUND LEASE (2035)   15.2   129,809   78.3   KOHL'S   2016   2036                        
  CHERRY HILL (8)   2003   FEE   48.0   209,185   100.0   KOHL'S   2018   2068   WORLDWIDE WHOLESALE FLOOR   2018   2033   BABIES R US   2013   2033
  CINNAMINSON   1996   FEE   13.7   121,852   84.1   OUTLET MARKETPLACE   2009   2019   ACME MARKETS   2047                
  DELRAN (7) (3)   2000   JOINT VENTURE   10.5   78,584   51.3                                    
  DELRAN (7)   2005   JOINT VENTURE   9.5   37,679   60.2                                    
  EAST WINDSOR   2002   FEE   34.8   249,029   100.0   TARGET   2027   2067   GENUARDI'S   2026   2056   TJ MAXX   2011   2026
  FRANKLIN   1998   FEE   14.9   138,364   100.0   STOP & SHOP   2030   2085                        
  HILLSBOROUGH   2005   JOINT VENTURE   5.6   55,552   100.0   KMART   2007   2047                        
  HOLMDEL (3)   2002   FEE   30.0   300,010   92.1   A&P   2013   2043   MARSHALLS   2013   2028   LA FITNESS   2021   2036
  HOLMDEL   2004   FEE   23.5   234,739   100.0   LINENS N THINGS   2018   2033   BEST BUY   2018   2033   MICHAELS   2013   2033
  LINDEN   2002   FEE   0.9   13,340   100.0   STRAUSS DISCOUNT AUTO   2023   2033                        
  MAPLESHADE (11)   2004   GROUND LEASE (2066)/ JOINT VENTURE   22.7   201,351   100.0   LOWE'S HOME CENTER   2026       SPORTS AUTHORITY   2013   2033   BALLY TOTAL FITNESS   2012   2022
  NORTH BRUNSWICK   1994   FEE   38.1   409,879   100.0   WAL-MART   2018   2058   BURLINGTON COAT FACTORY   2008   2013   MARSHALLS   2012   2027
  PISCATAWAY   1998   FEE   9.6   97,348   97.0   SHOPRITE   2014   2024                        
  RIDGEWOOD   1994   FEE   2.7   24,280   100.0   FRESH FIELDS   2015   2030                        
  WAYNE (11)   2004   FEE   19.2   348,063   95.2   COSTCO   2009   2044   LACKLAND STORAGE   2012   2032   SPORTS AUTHORITY   2012   2032
  WESTMONT   1994   FEE   17.4   192,254   75.9   SUPER FRESH   2017   2081   SUPER FITNESS   2009       JO-ANN FABRICS   2007    
NEW MEXICO                                                      
  ALBUQUERQUE   1998   FEE   4.7   37,735   100.0   SEARS HARDWARE   2006   2021                        
  ALBUQUERQUE   1998   FEE   26.0   183,912   93.4   MOVIES WEST   2011   2021   ROSS DRESS FOR LESS   2006   2021   VALLEY FURNITURE   2007   2017
  ALBUQUERQUE   1998   FEE   4.8   59,722   93.9   PAGE ONE   2008   2013   WALGREENS   2027                
NEW YORK                                                      
  ALBANY (8)   2004   JOINT VENTURE   17.9   135,801   91.9   PRICE CHOPPER   2007   2027   BIG LOTS   2008   2018   ECKERD   2007   2022
  BAYRIDGE   2004   FEE   2.1   21,106   100.0   DUANE READE   2014                            
  BELLMORE   2004   FEE   1.4   24,802   100.0   RITE AID   2014                            
  BRIDGEHAMPTON   1973   FEE   30.2   287,587   97.6   KMART   2019   2039   KING KULLEN   2015   2035   TJ MAXX   2007   2017
  BRONX   1990   JOINT VENTURE   22.9   228,638   96.7   NATIONAL AMUSEMENTS   2011   2036   WALDBAUMS   2011   2046   OFFICE OF HEARING   2007    
  BRONX   2000   FEE   0.4   3,720   100.0                                    
  BROOKLYN (7)   2000   JOINT VENTURE   8.1   80,708   100.0   HOME DEPOT   2022   2052   WALGREENS   2030                
  BROOKLYN   2003   FEE   0.8   7,500   100.0                                    
  BROOKLYN   2003   FEE   0.4   10,000   100.0   GENOVESE   2019                            
  BROOKLYN   2004   FEE   3.0   29,671   100.0   DUANE READE   2014                            
  BROOKLYN   2004   FEE   2.9   41,076   100.0   DUANE READE   2014       PC RICHARD & SON   2018   2028            
  BROOKLYN   2000   FEE   0.5   5,200   100.0                                    
  BUFFALO   1988   JOINT VENTURE   9.2   141,285   96.5   TOPS SUPERMARKET   2012   2037   REEBOK   2006       FASHION BUG   2025   2024
  BUFFALO, AMHERST   1988   JOINT VENTURE   7.5   101,066   100.0   TOPS SUPERMARKET   2013   2033                        
  CENTEREACH   1993   JOINT VENTURE   40.7   380,084   97.6   WAL-MART   2015   2044   BIG LOTS   2011   2021   MODELL'S   2019   2029
  CENTRAL ISLIP (4)   2004   JOINT VENTURE   11.8   25,000   100.0                                    
  COMMACK   1998   GROUND LEASE (2085)   35.7   265,409   100.0   KING KULLEN   2017   2047   LINENS N THINGS   2018   2038   SPORTS AUTHORITY   2017   2037
  COPIAGUE (7)   1998   FEE   15.4   163,999   100.0   HOME DEPOT   2011   2056   BALLY TOTAL FITNESS   2008   2018            
  EAST NORTHPORT (4)   2005   JOINT VENTURE   4.0   —   —                                    
  EAST NORTHPORT   2005   JOINT VENTURE   2.6   26,016   100.0   GOLFSMITH GOLF CENTER   2013   2018                        
  ELMONT   2004   FEE   1.8   27,078   100.0   DUANE READE   2014                            
  FRANKLIN SQUARE   2004   FEE   1.4   17,864   100.0   DUANE READE   2014                            
  FREEPORT (7)   2000   JOINT VENTURE   9.6   173,031   92.6   STOP & SHOP   2025       TOYS "R" US   2020   2040   MARSHALLS   2011   2016
  GLEN COVE (7)   2000   JOINT VENTURE   2.7   49,346   100.0   STAPLES   2014   2029   ANNIE SEZ   2011   2026            
  GLENVILLE (5)   2003   FEE   0.5   —   —                                    
  HAMPTON BAYS   1989   FEE   8.2   70,990   97.1   MACY'S EAST   2015   2025   GENOVESE   2006   2016            
  HEMPSTEAD (7)   2000   JOINT VENTURE   1.4   13,905   100.0   WALGREENS   2059                            
  HICKSVILLE   2004   FEE   2.5   40,231   88.4   DUANE READE   2014       PARTY CITY   2006   2011            
  JAMAICA   2006   FEE   0.6   5,770   100.0                                    
  LATHAM (7)   1999   JOINT VENTURE   60.3   616,130   98.8   SAM'S CLUB   2013   2043   WAL-MART   2013   2043   HOME DEPOT   2031   2071
  LAURELTON   2000   FEE   0.7   7,435   100.0                                    
  LITTLE NECK   2003   FEE   4.5   48,275   100.0                                    
  MANHASSET   1999   FEE   9.6   188,494   100.0   FILENE'S   2011       LINENS N THINGS   2016   2026   KING KULLEN   2024   2052
  MANHATTAN   2006   FEE   1.0   9,566   100.0                                    
  MASPETH   2004   FEE   1.1   22,500   100.0   DUANE READE   2014                            
  MERRICK (7)   2000   JOINT VENTURE   10.8   107,871   98.9   WALDBAUMS   2013   2041   ANNIE SEZ   2011   2021   PARTY CITY   2012   2022
  MIDDLETOWN (7)   2000   JOINT VENTURE   10.1   80,000   100.0   BEST BUY   2016   2031   LINENS N THINGS   2016   2031            
  MUNSEY PARK (7)   2000   JOINT VENTURE   6.0   72,748   100.0   BED BATH & BEYOND   2007   2022   FRESH FIELDS   2011   2021            
  NESCONSET (11)   2004   JOINT VENTURE   5.9   55,580   100.0   LEVITZ   2014   2034                        
  NORTH MASSAPEQUA   2004   GROUND LEASE (2033)   2.0   29,610   100.0   DUANE READE   2014                            
  OCEANSIDE   2003   FEE   0.3   1,856   100.0                                    
  PLAINVIEW   1969   GROUND LEASE (2070)   7.0   88,222   100.0   FAIRWAY STORES   2017   2037                        
  POUGHKEEPSIE   1972   FEE   20.0   167,668   99.6   STOP & SHOP   2020   2049   BIG LOTS   2007   2017            
  QUEENS VILLAGE   2006   FEE   1.5   14,649   100.0                                    
  RENSSELAER (8)   2004   JOINT VENTURE   13.4   132,648   86.6   PRICE CHOPPER   2018   2038   FASHION BUG   2008   2018            
  ROCHESTER   1988   FEE   14.9   129,238   100.0   STAPLES   2010   2022                        
  ROCHESTER   1993   FEE   18.6   185,153   36.3   TOPS SUPERMARKET   2009   2024                        
  STATEN ISLAND   2005   FEE   0.0   47,270   100.0                                    
  STATEN ISLAND (7)   2000   JOINT VENTURE   14.4   177,118   100.0   TJ MAXX   2010   2025   NATIONAL LIQUIDATORS   2010   2030   MICHAELS   2011   2031
  STATEN ISLAND   1989   FEE   16.7   212,375   100.0   KMART   2011       PATHMARK   2011   2021            
  STATEN ISLAND   1997   GROUND LEASE (2072)   7.0   101,337   99.2   WALDBAUMS   2011   2031                        
  SYOSSET   1967   FEE   2.5   32,124   100.0   NEW YORK SPORTS CLUB   2016   2021                        
  WESTBURY (11)   2004   JOINT VENTURE   30.1   398,602   100.0   COSTCO   2009   2043   WAL-MART   2019   2069   MARSHALLS   2009   2024
  WHITE PLAINS   2004   FEE   2.5   24,577   88.3   DUANE READE   2014                            
  YONKERS (7)   2000   GROUND LEASE (2047)/ JOINT VENTURE   6.3   56,361   97.2   STAPLES   2014   2029                        
  YONKERS   1995   FEE   4.4   43,560   100.0   SHOPRITE   2008   2028                        
  YONKERS   2000   FEE   1.0   10,329   100.0                                    
NORTH CAROLINA                                                      
  BURLINGTON (5)   2003   FEE   25.6   —   —                                    
  CARY (7)   2001   JOINT VENTURE   40.3   315,797   99.6   BJ'S   2020   2040   KOHL'S   2022   2001   PETSMART   2016   2036
  CARY   1996   FEE   10.6   86,015   100.0   BED BATH & BEYOND   2010   2014   DICK'S SPORTING GOODS   2014   2029            
  CARY   1998   FEE   10.9   102,787   100.0   LOWES   2017   2037   ECKERD   2007   2017            
  CARY (9)   2002   JOINT VENTURE   1.6   16,030   86.4                                    
  CARY (8)   2003   JOINT VENTURE   13.4   133,901   100.0   CARMIKE CINEMAS   2017   2027   FOOD LION   2019       DOLLAR TREE   2009   2019

30

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      YEAR
DEVELOPED
OR
ACQUIRED		    OWNERSHIP
INTEREST/
(EXPIRATION)
(2)		    LAND
AREA
(ACRES)		    LEASABLE
AREA
(SQ. FT.)		       MAJOR LEASES
              PERCENT  
            LEASED     LEASE   OPTION       LEASE   OPTION       LEASE   OPTION
  LOCATION           (1)   TENANT NAME   EXPIRATION   EXPIRATION   TENANT NAME EXPIRATION   EXPIRATION   TENANT NAME   EXPIRATION   EXPIRATION
 
  CHARLOTTE   1968   FEE   13.5   110,300   100.0   MEDIA PLAY   2010   2020   TJ MAXX   2007   2017   CVS   2015   2035
  CHARLOTTE   1993   FEE   14.0   139,269   99.1   BI-LO   2009   2029   RUGGED WEARHOUSE   2008   2018   FLOORS TODAY   2010   2020
  CHARLOTTE   1986   GROUND LEASE (2048)   18.5   233,800   98.7   ROSS DRESS FOR LESS   2015   2035   K&G MEN'S COMPANY   2008   2018   OFFICEMAX   2009   2024
  DURHAM (7)   2002   JOINT VENTURE   39.5   408,292   100.0   WAL-MART   2015   2035   BEST BUY   2011   2026   LINENS N THINGS   2011   2026
  DURHAM   1996   FEE   13.2   116,186   86.3   TJ MAXX   2009   2014   JO-ANN FABRICS   2010   2020            
  FRANKLIN   1998   JOINT VENTURE   15.1   26,326   100.0   BILL HOLT FORD   2016   2041                        
  GASTONIA   1989   FEE   24.9   240,957   82.6   HOBBY LOBBY   2013   2023   TOYS "R" US   2015   2045            
  GREENSBORO   1999   FEE   8.2   103,494   100.0   HOBBY LOBBY   2014   2024   K&G MEN'S COMPANY   2015   2025   USA BABY   2008   2013
  HILLSBOROUGH (5)   2003   FEE   8.0   —   —                                    
  KNIGHTDALE (4)   2005   JOINT VENTURE   30.7   150,000   100.0   ROSS DRESS FOR LESS   2017   2037   BED BATH & BEYOND   2017   2037   MICHAELS   2016   2036
  PINEVILLE (12)   2003   JOINT VENTURE   39.1   269,710   98.9   KMART   2017   2067   STEIN MART   2007   2012   TJ MAXX   2008   2018
  RALEIGH (3)   1993   FEE   35.9   372,684   88.8   BEST BUY   2010   2020   BED BATH & BEYOND   2016   2036   ROSS DRESS FOR LESS   2016   2036
  RALEIGH (4)   2001   JOINT VENTURE   24.4   77,000   100.0   MARQUEE CINEMAS   2019   2029                        
  RALEIGH (4)   2003   JOINT VENTURE   35.4   65,000   100.0   FOOD LION   2023   2043                        
  RALEIGH   2001   FEE   26.0   85,465   98.4   KROGER   2019   2059                        
  RALEIGH (12)   2004   FEE   10.3   101,846   87.6   HARRIS TEETER   2014   2034   ECKERD   2010   2015            
  WILSON (9) (6)   2002   JOINT VENTURE   16.7   167,207   11.4                                    
  WINSTON-SALEM   1969   FEE   13.2   137,433   100.0   HARRIS TEETER   2016   2041   DOLLAR TREE   2011   2016   SPORTSMAN'S SUPPLY   2008    
OHIO                                                        
  AKRON   1975   FEE   6.9   76,438   100.0   GIANT EAGLE   2021   2041                        
  AKRON   1988   FEE   24.5   138,363   100.0   GABRIEL BROTHERS   2010   2025   PAT CATANS CRAFTS   2013       ESSENCE BEAUTY MART   2008   2014
  BARBERTON (3)   1972   FEE   10.0   95,452   100.0   GIANT EAGLE   2027   2052                        
  BEAVERCREEK   1986   FEE   18.2   148,210   76.5   KROGER   2018   2048   FITWORKS   2007   2013   REVCO   2007   2027
  BRUNSWICK   1975   FEE   20.0   171,223   95.3   KMART   2010   2050   GIANT EAGLE   2006   2036            
  CAMBRIDGE   1997   FEE   13.1   79,165   90.9   TRACTOR SUPPLY CO.   2010   2020                        
  CANTON   1972   FEE   19.6   172,419   92.3   BURLINGTON COAT FACTORY   2018   2043   TJ MAXX   2007   2017   PRICELESS KIDS   2007   2012
  CENTERVILLE   1988   FEE   15.2   120,498   81.5   BED BATH & BEYOND   2017   2032   THE TILE SHOP   2014   2024   MICHAEL'S DAY SPA   2016   2026
  CINCINNATI (7)   2000   JOINT VENTURE   36.7   378,901   93.4   WAL-MART   2010   2040   HOBBY LOBBY   2016   2027   DICK'S SPORTING GOODS   2016   2031
  CINCINNATI   1988   FEE   11.6   223,731   99.3   LOWE'S HOME CENTER   2022   2052   BIG LOTS   2009   2019   AJ WRIGHT   2014   2034
  CINCINNATI   1988   GROUND LEASE (2054)   8.8   121,242   25.7   TOYS "R" US   2019   2044                        
  CINCINNATI   1988   FEE   29.2   308,277   75.6   HOBBY LOBBY   2012   2022   TOYS "R" US   2016   2046   HAVERTY'S   2019   2034
  CINCINNATI   2000   FEE   8.8   88,317   100.0   HOBBY LOBBY   2011   2021   GOLD'S GYM   2017   2027            
  CINCINNATI   1999   FEE   16.7   89,742   100.0   BIGGS FOODS   2008   2028                        
  COLUMBUS (7)   2002   JOINT VENTURE   36.5   254,152   94.9   LOWE'S HOME CENTER   2016   2046   KROGER   2017   2037            
  COLUMBUS   1988   FEE   12.4   191,089   100.0   KOHL'S   2011   2031   KROGER   2031   2071   TOYS "R" US   2015   2040
  COLUMBUS   1988   FEE   13.7   142,743   99.1   KOHL'S   2011   2031   STAPLES   2010   2020            
  COLUMBUS   1988   FEE   17.9   129,008   100.0   KOHL'S   2011   2031   GRANT/RIVERSIDE HOSPITAL   2011                
  COLUMBUS   1988   FEE   12.4   135,650   100.0   KOHL'S   2011   2031   CIRCUIT CITY   2019   2039            
  COLUMBUS   1988   FEE   12.5   99,262   100.0   SOUTHLAND EXPO   2006                            
  COLUMBUS (7)   1998   JOINT VENTURE   12.1   112,862   97.7   BORDERS BOOKS   2018   2038   PIER 1 IMPORTS   2007   2017   FRANNYS HALLMARK   2009   2014
  COPLEY (8)   2003   JOINT VENTURE   9.4   532,607   99.5   TABANI AKRON   2027   2067   HOME DEPOT   2013   2063   DICK'S SPORTING GOODS   2020   2045
  DAYTON   1969   GROUND LEASE (2043)   22.8   163,131   81.6   BEST BUY   2008   2024   BIG LOTS   2008   2018   JO-ANN FABRICS   2007   2012
  DAYTON   1984   FEE   32.1   213,728   88.4   KROGER   2012   2038   JO-ANN FABRICS   2006   2016   VICTORIA'S SECRET   2009   2019
  DAYTON   1988   FEE   16.9   141,616   80.4   VALUE CITY   2010   2020   DOLLAR GENERAL   2007                
  DAYTON   1988   FEE   11.2   116,374   88.3   VALUE CITY   2010   2015                        
  HUBER HEIGHTS (7)   1999   JOINT VENTURE   40.0   318,468   100.0   ELDER BEERMAN   2014   2044   KOHL'S   2015   2035   MARSHALLS   2009   2024
  KENT   1988   GROUND LEASE (2013)   17.6   106,500   100.0   TOPS SUPERMARKET   2026   2096                        
  MENTOR   1987   FEE   20.6   103,910   100.0   GABRIEL BROTHERS   2013   2028   BIG LOTS   2014   2034            
  MENTOR   1988   FEE   25.0   235,577   95.6   GIANT EAGLE   2019   2029   BURLINGTON COAT FACTORY   2014       JO-ANN FABRICS   2009   2019
  MIAMISBURG   1999   FEE   0.6   6,000   100.0                                    
  MIDDLEBURG HEIGHTS   1988   FEE   8.2   104,342   51.5   GABRIEL BROTHERS   2014   2029                        
  NORTH OLMSTEAD   1988   FEE   11.7   99,862   100.0   TOPS SUPERMARKET   2026   2096                        
  ORANGE TOWNSHIP (4)   2001   FEE   16.7   —   —                                    
  SHARONVILLE   1977   GROUND LEASE (2076)/JOINT VENTURE   15.0   130,704   92.7   GABRIEL BROTHERS   2012   2032   KROGER   2008   2028   UNITED ART AND EDUCATION   2016   2026
  SPRINGBORO PIKE   1985   FEE   13.0   120,522   100.0   HOBBY LOBBY   2015   2025   OFFICEMAX   2007       DOLLAR TREE   2008   2018
  SPRINGDALE (7)   2000   JOINT VENTURE   22.0   253,510   79.8   WAL-MART   2015   2045   HH GREGG   2012   2017   SHOE CARNIVAL   2006    
  SPRINGFIELD   1988   FEE   14.3   149,464   100.0   KMART   2010   2030   HOBBY LOBBY   2010   2020            
  UPPER ARLINGTON   1969   FEE   13.3   160,702   100.0   TJ MAXX   2011   2021   THE DUSTY ATTIC   2011   2016   HONG KONG BUFFET   2011    
  WESTERVILLE   1993   FEE   25.4   242,124   91.7   KOHL'S   2016   2036   OFFICEMAX   2007   2022   MARC'S   2015   2025
  WICKLIFFE   1982   FEE   10.0   128,180   97.1   GABRIEL BROTHERS   2008   2023   BIG LOTS   2010       DOLLAR GENERAL   2007    
  WILLOUGHBY HILLS   1988   FEE   14.1   157,424   100.0   VF FACTORY OUTLET   2012   2022   MARCS DRUGS   2012   2017            
OKLAHOMA                                                        
  NORMAN (7)   2001   JOINT VENTURE   31.3   262,624   93.6   TOYS "R" US   2012   2042   ROSS DRESS FOR LESS   2007   2027   BARNES & NOBLE   2012   2027
  OKLAHOMA CITY   1997   FEE   9.8   103,027   100.0   ACADEMY SPORTS & OUTDOORS   2014   2024                        
  OKLAHOMA CITY   1998   FEE   19.8   233,797   99.6   HOME DEPOT   2014   2044   GORDMANS   2013   2033   BEST BUY   2008   2023
  SOUTH TULSA   1996   FEE   0.0   4,090   100.0                                    
PENNSLYVANIA                                                        
  BENSALEM (11)   2004   FEE   31.5   300,188   90.2   HOME DEPOT   2009   2034   BABIES R US   2011   2026   AMC THEATRES   2015   2035
  BLUE BELL   1996   FEE   17.7   120,211   100.0   KOHL'S   2016   2036   HOME GOODS   2013   2033            
  CARLISLE (12) (3)   2004   JOINT VENTURE   9.3   87,022   100.0   NELLS MARKET   2026   2036                        
  CARLISLE (13)   2005   JOINT VENTURE   12.2   90,183   100.0   GIANT FOOD   2016   2046                        
  CHAMBERSBURG (8) (3)   2004   JOINT VENTURE   12.2   122,396   98.7   GIANT FOOD   2040   2040   CVS   2006   2020            
  CHIPPEWA   2000   FEE   22.4   215,206   100.0   KMART   2018   2068   HOME DEPOT   2018   2068            
  DUQUESNE   1993   FEE   8.8   69,733   58.4   RED, WHITE & BLUE   2006                            
  EAGLEVILLE   1973   FEE   15.2   165,385   94.9   KMART   2006   2019   GENUARDI'S   2011   2025            
  EAST NORRITON   1984   FEE   12.5   133,569   100.0   SHOPRITE   2022   2037   STAPLES   2008   2023   JO-ANN FABRICS   2007   2012
  EAST STROUDSBURG   1973   FEE   15.3   168,506   100.0   KMART   2007   2022   WEIS MARKETS   2007                
  EASTWICK   1997   FEE   3.4   36,511   100.0   MERCY HOSPITAL   2012   2022                        
  EXTON   1990   FEE   6.1   60,685   100.0   ACME MARKETS   2015   2045                        
  EXTON   1996   FEE   9.8   85,184   100.0   KOHL'S   2016   2036                        
  FEASTERVILLE   1996   FEE   4.6   86,575   100.0   VALUE CITY   2011   2026                        
  GETTYSBURG   1986   FEE   2.3   14,584   100.0                                    
  GREENSBURG   2002   JOINT VENTURE   5.0   50,000   100.0   TJ MAXX   2010   2020   MICHAELS   2010   2020            
  HAMBURG   2001   FEE   3.0   15,400   100.0   LEHIGH VALLEY HEALTH   2016   2026                        
  HARRISBURG   1972   FEE   17.0   175,917   100.0   GANDER MOUNTAIN   2013   2028   MEDIA PLAY   2011   2026   SUPERPETZ   2007   2022
  HARRISBURG   1972   FEE   11.7   121,672   76.0   CINEMA CENTER   2019   2034   BIG LOTS   2010   2020            
  HAVERTOWN   1996   FEE   9.0   80,938   100.0   KOHL'S   2016   2036                        
  HORSHAM (13)   2005   JOINT VENTURE   8.3   75,206   100.0   GIANT FOOD   2022   2048                        
  LANDSDALE   1996   GROUND LEASE (2037)   1.4   84,470   100.0   KOHL'S   2012                            
  MIDDLETOWN   1986   FEE   4.7   38,953   83.0   US POST OFFICE   2016   2026                        
  MONROEVILLE (13)   2005   FEE   13.7   143,200   90.2   PETSMART   2019   2034   BED BATH & BEYOND   2020   2034   MICHAELS   2009   2029
  MONTGOMERY (7)   2002   JOINT VENTURE   45.0   257,565   98.4   GIANT FOOD   2020   2050   BED BATH & BEYOND   2016   2030   COMPUSA   2014   2028
  NEW KENSINGTON   1986   FEE   12.5   108,950   100.0   GIANT EAGLE   2016   2033                        
  PHILADELPHIA   2000   FEE   0.9   9,343   100.0                                    

31

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      YEAR
DEVELOPED
OR
ACQUIRED		    OWNERSHIP
INTEREST/
(EXPIRATION)
(2)		    LAND
AREA
(ACRES)		    LEASABLE
AREA
(SQ. FT.)		       MAJOR LEASES
              PERCENT  
            LEASED     LEASE   OPTION       LEASE   OPTION       LEASE   OPTION
  LOCATION           (1)   TENANT NAME   EXPIRATION   EXPIRATION   TENANT NAME EXPIRATION   EXPIRATION   TENANT NAME   EXPIRATION   EXPIRATION
 
  PHILADELPHIA (3)   1983   JOINT VENTURE   8.1   213,444   93.1   JC PENNEY   2012   2037   TOYS "R" US   2007   2052            
  PHILADELPHIA   1998   JOINT VENTURE   7.5   75,303   100.0   NORTHEAST AUTO OUTLET   2015   2050                        
  PHILADELPHIA (3)   1995   JOINT VENTURE   22.6   277,123   94.7   SUPER FRESH   2022   2047   PETSMART   2006   2016   AMC ORLEANS 8   2006    
  PHILADELPHIA   1996   FEE   6.3   82,345   100.0   KOHL'S   2016   2036                        
  PHILADELPHIA   1996   GROUND LEASE (2035)   6.8   133,309   100.0   KMART   2010   2035                        
  PIITSBURGH   2004   FEE   46.8   467,927   100.0                                    
  POTTSTOWN (8)   2004   FEE   15.7   161,727   97.4   GIANT FOOD   2014   2049   TRACTOR SUPPLY CO.   2012   2027   TJ MAXX   2009   2019
  RICHBORO   1986   FEE   14.5   110,357   100.0   SUPER FRESH   2018   2058                        
  SCOTT TOWNSHIP   2000   GROUND LEASE (2052)   6.9   69,288   100.0   WAL-MART   2032   2052                        
  SHREWSBURY (12)   2004   JOINT VENTURE   21.2   94,706   97.9   GIANT FOOD   2023   2053                        
  SPRINGFIELD   1983   FEE   19.7   218,907   96.2   VALUE CITY   2013   2043   STAPLES   2008   2023   JO-ANN FABRICS   2006   2016
  UPPER DARBY   1996   JOINT VENTURE   16.3   48,936   88.2   MERCY HOSPITAL   2012   2022   BRIGHTSIDE ACADEMY   2013   2022            
  WAYNESBORO (8) (3)   2004   JOINT VENTURE   15.5   112,149   93.9   MARTIN'S   2010   2025   PEEBLES   2015   2035   DOLLAR TREE   2010   2025
  WEST MIFFLIN   1986   GROUND LEASE (2032)   8.3   84,279   100.0   BIG LOTS   2012   2032                        
  WHITEHALL   2005   JOINT VENTURE   15.1   151,273   98.4   GIANT FOOD   2014       JO-ANN FABRICS   2007       BARNES & NOBLE   2011    
  WHITEHALL   1996   GROUND LEASE (2081)   6.0   84,524   100.0   KOHL'S   2016   2036                        
  YORK   1986   FEE   13.7   59,016   95.2   GIANT FOOD   2006   2026   CVS   2006   2020            
  YORK   1986   FEE   3.3   35,500   100.0   GIANT FOOD   2007   2017                        
RHODE ISLAND                                                      
  CRANSTON   1998   FEE   11.0   129,907   94.6   BOB'S STORES   2008   2028   MARSHALLS   2011   2021            
  PROVIDENCE   2003   GROUND LEASE (2022)/JOINT VENTURE   13.0   71,735   100.0   STOP & SHOP   2022   2072                        
SOUTH CAROLINA                                                      
  CHARLESTON   1978   FEE   17.6   157,416   100.0   STEIN MART   2006   2016   BY THE YARD   2011   2016   FLOOR IT NOW   2012    
  CHARLESTON   1995   FEE   17.2   186,740   97.0   TJ MAXX   2009   2014   OFFICE DEPOT   2011   2016   MARSHALLS   2006   2011
  CHARLESTON (8)   2003   JOINT VENTURE   15.7   136,276   99.4   ROSS DRESS FOR LESS   2015   2035   BED BATH & BEYOND   2014   2034   COST PLUS   2014   2029
  FLORENCE   1997   FEE   21.0   113,922   97.2   HAMRICKS   2011       STAPLES   2010   2035   ATHLETE'S FOOT   2007   2017
  GREENVILLE   1997   FEE   20.4   148,532   59.9   BABIES R US   2007   2022                        
  GREENVILLE (11)   2004   FEE   31.8   295,928   96.8   INGLES MARKETS   2021   2076   GOODY'S FAMILY CLOTHING   2010   2025   TJ MAXX   2010   2025
  MT PLEASANT (8)   2004   JOINT VENTURE   11.7   116,868   97.7   WHOLE FOODS   2025   2055   STAPLES   2012                
  NORTH CHARLESTON   2000   FEE   27.3   267,632   94.3   SPORTS AUTHORITY   2013   2033   CIRCUIT CITY   2019   2029   MARSHALLS   2008   2013
TENNESSEE                                                      
  CHATTANOOGA   2002   JOINT VENTURE   5.0   50,000   100.0   HOME GOODS   2010   2020   MICHAELS   2017   2037            
  CHATTANOOGA   1973   GROUND LEASE (2074)   7.6   50,588   95.9   SAVE-A-LOT   2009   2014                        
  MADISON (7)   1999   JOINT VENTURE   21.1   189,299   73.2   BEST BUY   2014   2029   GOODY'S FAMILY CLOTHING   2010   2020   OLD NAVY   2009   2019
  MADISON   1978   GROUND LEASE (2039)   14.5   175,593   96.6   OLD TIME POTTERY   2013   2023   WAL-MART   2014   2039            
  MADISON   2004   FEE   25.4   240,318   97.1   JO-ANN FABRICS   2009   2024   CIRCUIT CITY   2009   2039   TJ MAXX   2010   2020
  MEMPHIS (7)   2001   FEE   3.9   40,000   100.0   BED BATH & BEYOND   2012   2027                        
  MEMPHIS   2000   FEE   8.8   87,962   100.0   OLD TIME POTTERY   2010   2025                        
  MEMPHIS   1991   FEE   14.7   167,243   77.7   TOYS "R" US   2017   2042   OFFICEMAX   2008   2028   KIDS R US   2019   2044
  NASHVILLE (7)   1999   JOINT VENTURE   9.3   99,909   92.5   BEST BUY   2014   2029   OFFICEMAX   2015   2035            
  NASHVILLE   1998   FEE   10.2   109,012   91.3   MARSHALLS   2007       OFFICEMAX   2009   2019   OLD COUNTRY BUFFET   2006   2016
  NASHVILLE   1986   FEE   16.9   172,135   96.6   STEIN MART   2008   2013   ASHLEY FURNITURE HOMESTORE   2012   2022   BED BATH & BEYOND   2013   2028
TEXAS                                                      
  AMARILLO (7)   1997   JOINT VENTURE   9.3   343,989   99.6   HOME DEPOT   2019   2069   KOHL'S   2025   2055   CIRCUIT CITY   2010   2035
  AMARILLO (7)   2003   JOINT VENTURE   10.6   142,747   97.1   ROSS DRESS FOR LESS   2012   2037   BED BATH & BEYOND   2012   2032   JO-ANN FABRICS   2012   2032
  ARLINGTON   1997   FEE   8.0   96,127   100.0   HOBBY LOBBY   2008   2018                        
  AUSTIN (7)   1998   JOINT VENTURE   18.2   191,760   99.1   CIRCUIT CITY   2017   2037   BABIES R US   2012   2027   WORLD MARKET   2011   2026
  AUSTIN   1998   FEE   15.4   157,852   90.5   HEB GROCERY   2006   2026   BROKERS NATIONAL LIFE   2013                
  AUSTIN   2003   JOINT VENTURE   10.8   108,028   100.0   FRY'S ELECTRONICS   2018   2048                        
  BAYTOWN   1996   FEE   8.7   86,240   100.0   HOBBY LOBBY   2008   2018   ROSS DRESS FOR LESS   2012   2032            
  BEAUMONT (4)   2002   FEE   11.4   82,000   100.0   ROSS DRESS FOR LESS   2015   2035   BED BATH & BEYOND   2013   2033   SHOE CARNIVAL   2013   2023
  BEAUMONT (4)   2005   FEE   5.6   44,000   100.0   JO-ANN FABRICS   2017   2037   COST PLUS   2016   2031            
  BROWNSVILLE (4)   2005   JOINT VENTURE   30.1   —   —                                    
  BURLESON (4)   2000   JOINT VENTURE   51.1   61,000   100.0   OLD NAVY   2010   2025   ULTA   2015   2025            
  BURLESON (4)   2003   JOINT VENTURE   13.6   44,000   100.0   OFFICE DEPOT   2020   2040                        
  CORPUS CHRISTI   1997   GROUND LEASE (2065)   12.5   125,454   100.0   BEST BUY   2016   2030   ROSS DRESS FOR LESS   2011   2030   BED BATH & BEYOND   2018   2032
  DALLAS   2002   JOINT VENTURE   5.0   49,701   100.0   CONN'S   2014   2034                        
  DALLAS (8)   2002   JOINT VENTURE   9.6   125,195   89.2   TOM THUMB   2017   2032   TOM THUMB (GAS STATION)   2017   2032            
  DALLAS (5)   1969   JOINT VENTURE   75.0   —   —                                    
  DALLAS (7)   1998   FEE   6.8   83,867   100.0   ROSS DRESS FOR LESS   2007   2017   OFFICEMAX   2009   2024   BIG LOTS   2012   2032
  EAST PLANO   1996   FEE   9.0   100,598   100.0   HOME DEPOT EXPO   2024   2054                        
  FORT WORTH (4)   2003   JOINT VENTURE   45.5   152,000   100.0   MARSHALLS   2015   2035   ROSS DRESS FOR LESS   2016   2041   OFFICE DEPOT   2021   2041
  GARLAND (7)   1998   JOINT VENTURE   6.3   62,000   100.0   OFFICE DEPOT   2011   2021   99 CENTS ONLY STORE   2009   2024            
  GARLAND   1996   FEE   8.8   103,600   100.0   NREL, INC.   2006                            
  HARRIS COUNTY (13)   2005   JOINT VENTURE   11.4   144,066   100.0   BEST BUY   2015   2035   LINENS N THINGS   2015   2030   BARNES & NOBLE   2014   2029
  HOUSTON (3)   1998   FEE   40.0   405,161   97.8   OSHMAN SPORTING   2009   2024   HOBBY LOBBY   2012   2022   BEL FURNITURE   2010   2015
  HOUSTON   1997   FEE   8.0   113,831   85.1   HEB PANTRY STORE   2007   2027   PALAIS ROYAL   2007   2022            
  HOUSTON   1999   FEE   5.6   84,188   75.5   OFFICE DEPOT   2007   2022   METROPOLITAN FURNITURE   2013   2023            
  HOUSTON (8)   2003   JOINT VENTURE   17.1   185,332   90.0   ROSS DRESS FOR LESS   2013   2033   OFFICE DEPOT   2012   2032   OLD NAVY   2007   2022
  HOUSTON (4)   2003   JOINT VENTURE   25.4   189,000   100.0   TJ MAXX   2015   2035   ROSS DRESS FOR LESS   2016   2036   BED BATH & BEYOND   2016   2041
  HOUSTON (7)   2002   JOINT VENTURE   54.3   589,201   95.8   LOEWS THEATRES   2017   2047   HOBBY LOBBY   2016   2026   OSHMAN SPORTING   2017   2037
  HOUSTON   1996   FEE   8.2   96,500   100.0   BURLINGTON COAT FACTORY   2019   2034                        
  LAKE WORTH (4)   2003   JOINT VENTURE   29.6   220,000   100.0   HOBBY LOBBY   2020   2030   CIRCUIT CITY   2021   2036   ROSS DRESS FOR LESS   2016   2041
  LAREDO (8) (3)   2004   JOINT VENTURE   25.1   251,381   98.6   TOYS "R" US   2018   2068   CINEMARK   2013   2033   LINENS N THINGS   2015   2030
  LEWISVILLE   1998   FEE   11.2   74,837   93.1   BALLY TOTAL FITNESS   2007   2022   TALBOTS OUTLET   2007   2017            
  LEWISVILLE   1998   FEE   7.6   123,560   100.0   BABIES R US   2009   2027   BED BATH & BEYOND   2018   2033   BROYHILL HOME COLLECTIONS   2015   2025
  LEWISVILLE   1998   FEE   9.4   93,668   68.4   DSW SHOE WAREHOUSE   2008   2028   PETLAND   2009   2019            
  LUBBOCK   1998   FEE   9.6   108,326   100.0   PETSMART   2015   2040   OFFICEMAX   2009   2029   BARNES & NOBLE   2010   2025
  MESQUITE   1974   FEE   9.0   79,550   100.0   KROGER   2012   2037                        
  MESQUITE   1998   FEE   15.0   209,766   89.2   BEST BUY   2009   2024   ASHLEY FURNITURE HOMESTORE   2007   2017   PETSMART   2007   2027
  N. BRAUNFELS   2003   JOINT VENTURE   8.6   86,479   100.0   KOHL'S   2014   2064                        
  PASADENA (7)   1999   JOINT VENTURE   15.1   169,190   100.0   PETSMART   2015   2030   OFFICEMAX   2014   2029   MICHAELS   2009   2024
  PASADENA (7)   2001   JOINT VENTURE   24.6   241,097   99.2   BEST BUY   2012   2027   ROSS DRESS FOR LESS   2012   2032   MARSHALLS   2012   2027
  PLANO   2005   FEE   0.0   149,343   100.0   HOME DEPOT   2026                            
  RICHARDSON (7)   1998   JOINT VENTURE   11.7   115,579   79.5   OFFICEMAX   2011   2026   BALLY TOTAL FITNESS   2009   2019   FOX & HOUND   2012   2022
  SAN ANTONIO (4)   1999   FEE   21.7   181,000   100.0   HOBBY LOBBY   2018   2033   BEALLS   2014   2024   ENGLAND CUSTOM FURNITURE   2015   2025
  TEMPLE (13)   2005   JOINT VENTURE   27.5   274,786   88.1   HOBBY LOBBY   2021   2036   ROSS DRESS FOR LESS   2012   2037   GOODY'S FAMILY CLOTHING   2011   2021
  WOODLANDS (4)   2002   JOINT VENTURE   34.0   399,000   100.0   BORDERS BOOKS   2024   2044   CINEMARK   2020   2040   TOMMY BAHAMA'S   2015   2030

32

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      YEAR
DEVELOPED
OR
ACQUIRED		    OWNERSHIP
INTEREST/
(EXPIRATION)
(2)		    LAND
AREA
(ACRES)		    LEASABLE
AREA
(SQ. FT.)		       MAJOR LEASES
              PERCENT  
            LEASED     LEASE   OPTION       LEASE   OPTION       LEASE   OPTION
  LOCATION           (1)   TENANT NAME   EXPIRATION   EXPIRATION   TENANT NAME EXPIRATION   EXPIRATION   TENANT NAME   EXPIRATION   EXPIRATION
 
UTAH                                                      
  OGDEN   1967   FEE   11.4   142,628   100.0   COSTCO   2033   2073                        
VERMONT                                                      
  MANCHESTER   2004   FEE   9.5   53,483   100.0   PRICE CHOPPERS   2011                            
VIRGINIA                                                      
  ARLINGTON (11)   2004   FEE   16.8   337,429   97.9   COSTCO   2009   2044   MARSHALLS   2010   2025   BEST BUY CO.   2009   2024
  BURKE (10)   2004   GROUND LEASE (2076)/ JOINT VENTURE   12.5   124,148   100.0   SAFEWAY   2020   2050   CVS   2021   2041            
  COLONIAL HEIGHTS   1996   FEE   6.1   60,909   100.0   BLOOM BROTHERS FURNITURE   2008       BOOKS-A-MILLION   2008   2015            
  DUMFRIES (12)   2005   JOINT VENTURE   0.2   1,702   100.0                                    
  FAIRFAX (7)   1998   JOINT VENTURE   37.0   323,262   100.0   HOME DEPOT   2013   2033   COSTCO   2011   2046   SPORTS AUTHORITY   2008   2013
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.5   4,842   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   3.2   32,000   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.2   2,454   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.4   3,650   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.4   4,261   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.3   3,000   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   1.1   10,578   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   1.0   10,002   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.8   8,000   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.5   5,126   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.7   6,818   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.5   4,800   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.3   2,909   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.6   6,000   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   1.1   11,097   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.7   7,200   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.8   8,027   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.6   6,100   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.6   5,540   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.7   7,241   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.3   3,076   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.6   5,892   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.5   5,020   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.7   7,256   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.5   4,828   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.3   3,000   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   3.3   33,179   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.4   3,822   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.3   3,028   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.4   4,352   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.7   7,000   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   1.0   10,125   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   1.0   10,125   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.2   2,170   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.7   7,200   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.2   1,762   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   0.8   7,993   100.0                                    
  FREDERICKSBURG (12)   2005   JOINT VENTURE   1.0   10,125   100.0                                    
  FREDERICKSBURG (8)   2004   JOINT VENTURE   11.2   141,857   100.0   KMART   2007   2032                        
  HARRISONBURG   1993   FEE   5.3   —   —                                    
  HARRISONBURG (8) (3)   2004   JOINT VENTURE   12.3   150,404   91.3   KOHL'S   2024   2064   TOYS "R" US   2010   2040            
  HARRISONBURG (9)   2002   JOINT VENTURE   14.0   139,956   48.7   FARMER JACK   2007   2037   CVS   2007   2017            
  MANASSAS   1997   FEE   13.5   117,525   99.1   SUPER FRESH   2006   2026   JO-ANN FABRICS   2006   2011            
  MANASSAS (13)   2005   JOINT VENTURE   8.9   107,233   100.0   BURLINGTON COAT FACTORY   2009   2030   AUTO ZONE   2010   2025            
  RICHMOND   2002   FEE   8.5   84,683   100.0   BLOOM BROTHERS FURNITURE   2013   2023                        
  RICHMOND   1995   FEE   11.5   128,612   100.0   BURLINGTON COAT FACTORY   2010   2035                        
  RICHMOND   2005   GROUND LEASE (2056)/ JOINT VENTURE   14.6   127,801   99.1   UKROP'S   2010   2015   HARLEY DAVIDSON MOTORCYCLES   2006   2009            
  RICHMOND (12)   2005   JOINT VENTURE   0.3   3,060   100.0                                    
  ROANOKE   2004   FEE   7.7   81,789   100.0   DICK'S SPORTING GOODS   2019   2034   CIRCUIT CITY   2020   2040            
  ROANOKE (8)   2005   JOINT VENTURE   30.2   301,923   86.4   MICHAELS   2009   2019   MARSHALLS   2013   2033   ROSS DRESS FOR LESS   2016   2036
  STAFFORD (12)   2005   JOINT VENTURE   0.4   4,211   100.0                                    
  STAFFORD (12)   2005   JOINT VENTURE   0.4   4,400   100.0                                    
  STAFFORD (12)   2005   JOINT VENTURE   0.7   7,310   100.0                                    
  STAFFORD (12)   2005   JOINT VENTURE   0.4   3,549   100.0                                    
  STAFFORD (12)   2005   JOINT VENTURE   9.9   101,042   100.0   GIANT FOOD   2027   2072   STAPLES   2017   2032   PETCO SUPPLIES & FISH   2012   2026
  STAFFORD (13)   2005   JOINT VENTURE   30.8   331,730   96.8   SHOPPERS FOOD   2023   2053   TJ MAXX   2016   2036   ROSS DRESS FOR LESS   2015   2035
  STERLING (11)   2004   FEE   103.3   737,503   100.0   WAL-MART   2021   2091   LOWE'S HOME CENTER   2021   2061   SAM'S   2021   2091
  STERLING (8)   2003   JOINT VENTURE   38.1   361,079   98.9   TOYS "R" US   2012   2037   MICHAELS   2011   2026   CIRCUIT CITY   2017   2037
  WOODBRIDGE   1973   GROUND LEASE (2072)/JOINT VENTURE   19.6   189,563   79.5   CAMPOS FURNITURE   2009       SALVATION ARMY   2009   2014   BOOT HILL   2011    
  WOODBRIDGE (7) (3)   1998   JOINT VENTURE   54.0   494,283   97.2   LOWE'S HOME CENTER   2012   2032   SHOPPERS FOOD   2009   2044   BEST BUY   2010   2025
  WOODBRIDGE (8)   2004   JOINT VENTURE   27.6   272,174   87.5   LOWE'S HOME CENTER   2023   2053   ERNIE SULLINS   2006                
WASHINGTON                                                      
  BELLINGHAM (7)   1998   JOINT VENTURE   20.0   188,885   99.2   BON HOME STORE   2012   2022   BEST BUY   2017   2032   BED BATH & BEYOND   2012   2027
  BELLEVUE (3)   2004   JOINT VENTURE   41.6   432,093   100.0   TARGET   2007   2037   MERVYN'S   2012   2037   NORDSTROM RACK   2012   2022
  FEDERAL WAY (7)   2000   JOINT VENTURE   17.0   200,126   98.0   QFC   2015   2045   JO-ANN FABRICS   2010   2030   BARNES & NOBLE   2011   2026
  SPOKANE (13)   2005   JOINT VENTURE   8.3   129,785   97.2   BED BATH & BEYOND   2011   2026   ROSS DRESS FOR LESS   2009   2019   RITE AID   2009   2039
  TUKWILA (7)   2003   JOINT VENTURE   45.9   459,071   100.0   THE BON MARCHE   2009   2019   BEST BUY   2016   2031   GART SPORTS   2014   2029
  VANCOUVER (4)   2003   JOINT VENTURE   32.5   77,000   100.0   OFFICE DEPOT   2015   2035   PETCO   2015   2025   PARTY CITY   2015   2025
WEST VIRGINIA                                                      
  CHARLES TOWN   1985   FEE   22.0   209,086   97.6   WAL-MART   2017   2047   STAPLES   2006                
  HUNTINGTON   1993   FEE   19.5   2,400   100.0                                    
  MARTINSBURG   1986   FEE   6.0   43,212   —                                    
  SOUTH CHARLESTON   1999   FEE   14.8   188,833   95.8   KROGER   2008   2038   TJ MAXX   2011   2021            
WISCONSIN                                                      
  RACINE   1988   FEE   14.2   157,150   68.2   PIGGLY WIGGLY   2015   2030   BIG LOTS   2010   2015            
                                                           
                                                           
CANADA                                                      
ALBERTA                                                      
  SHOPPES @ SHAWNESSEY   2002   JOINT VENTURE   16.3   162,988   100.0   ZELLERS   2011   2096                        
  SHAWNESSY CENTRE   2002   JOINT VENTURE   30.6   306,010   100.0   FUTURE SHOP (BEST BUY)   2009   2024   LINEN N THINGS   2015   2025   BUSINESS DEPOT (STAPLES)   2013   2028
  BRENTWOOD   2002   JOINT VENTURE   31.2   312,331   100.0   CANADA SAFEWAY   2007   2032   SEARS WHOLE HOME   2010   2020   LINEN N THINGS   2016   2031
  SOUTH EDMONTON COMMON   2002   JOINT VENTURE   42.9   428,745   100.0   HOME OUTFITTERS   2016   2031   LONDON DRUGS   2020   2057   MICHAELS   2011   2026
  GRANDE PRAIRIE III   2002   JOINT VENTURE   6.3   63,413   100.0   MICHAELS   2011   2031   WINNERS (TJ MAXX)   2011   2026   JYSK LINEN   2012   2022

33

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      YEAR
DEVELOPED
OR
ACQUIRED		    OWNERSHIP
INTEREST/
(EXPIRATION)
(2)		    LAND
AREA
(ACRES)		    LEASABLE
AREA
(SQ. FT.)		       MAJOR LEASES
              PERCENT  
            LEASED     LEASE   OPTION       LEASE   OPTION       LEASE   OPTION
  LOCATION           (1)   TENANT NAME   EXPIRATION   EXPIRATION   TENANT NAME EXPIRATION   EXPIRATION   TENANT NAME   EXPIRATION   EXPIRATION
 
BRITISH COLUMBIA                                                
  TILLICUM   2002   JOINT VENTURE   45.7   457,169   99.6   ZELLERS   2013   2098   SAFEWAY   2023   2053   WINNERS (TJ MAXX)   2008   2023
  PRINCE GEORGE   2001   JOINT VENTURE   37.3   372,725   95.2   OVERWAITEE   2018   2028   THE BAY   2013   2083   LONDON DRUGS   2017   2027
  STRAWBERRY HILL   2002   JOINT VENTURE   33.3   332,817   99.2   HOME DEPOT   2016   2041   CINEPLEX ODEON   2014   2024   WINNERS (TJ MAXX)   2009   2024
  MISSION   2001   JOINT VENTURE   25.7   256,592   98.8   OVERWAITEE   2018   2028   FAMOUS PLAYERS   2010   2030   LONDON DRUGS   2019   2046
  ABBOTSFORD   2002   JOINT VENTURE   21.5   215,213   100.0   ZELLERS   2052   2082   PETSMART   2013   2033   WINNERS (TJ MAXX)   2008   2023
  CLEARBROOK   2001   JOINT VENTURE   18.8   188,253   100.0   SAFEWAY   2007   2037   STAPLES   2012   2022   LANDMARK CINEMAS   2011   2021
  SURREY   2001   JOINT VENTURE   17.1   170,725   97.6   CANADA SAFEWAY   2011   2061   LONDON DRUGS   2011   2021            
  LANGLEY POWER CENTER   2003   JOINT VENTURE   22.8   228,314   100.0   WINNERS (TJ MAXX)   2012   2027   MICHAELS   2011   2021   FUTURE SHOP (BEST BUY)   2012   2022
  LANGLEY GATE   2002   JOINT VENTURE   15.2   151,802   100.0   SEARS   2008   2018   PETSMART   2008   2038   WINNERS (TJ MAXX)   2007   2017
ONTARIO                                              
  THICKSON RIDGE   2002   JOINT VENTURE   36.3   363,039   100.0   WINNERS (TJ MAXX)   2013   2023   FUTURE SHOP (BEST BUY)   2006   2016   SEARS WHOLE HOME   2012   2022
  SHOPPERS WORLD ALBION   2002   JOINT VENTURE   34.9   349,399   100.0   CANADIAN TIRE   2014   2029   FORTINO'S   2010   2030            
  SHOPPERS WORLD DANFORTH   2002   JOINT VENTURE   32.9   328,820   99.8   ZELLERS   2009   2029   DOMINION   2018   2028   BUSINESS DEPOT (STAPLES)   2015   2030
  LINCOLN FIELDS   2002   JOINT VENTURE   29.0   289,531   93.8   WAL MART   2010   2025   LOEB (GROUND)   2009   2024   CAA OTTAWA   2007   2015
  404 TOWN CENTRE   2002   JOINT VENTURE   24.9   249,379   98.7   ZELLERS   2009   2024   A & P   2007   2027   NATIONAL GYM CLOTHING   2019   2024
  SUDBURY   2002   JOINT VENTURE   38.9   389,213   100.0   FAMOUS PLAYERS   2019   2039   BUSINESS DEPOT (STAPLES)   2014   2024   CHAPTERS   2010   2030
  CLARKSON CROSSING   2004   JOINT VENTURE   20.2   201,599   100.0   CANADIAN TIRE   2023   2043   A & P   2023   2048            
  GREEN LANE CENTRE   2003   JOINT VENTURE   16.0   160,231   100.0   LINEN N THINGS   2014   2029   MICHAELS   2013   2033   PETSMART   2014   2039
  KENDALWOOD   2002   JOINT VENTURE   15.6   155,945   96.2   PRICE CHOPPER   2013   2038   VALUE VILLAGE   2008   2028   SHOPPERS DRUG MART   2011   2021
  LEASIDE   2002   JOINT VENTURE   13.3   133,035   100.0   CANADIAN TIRE   2006   2036   FUTURE SHOP (BEST BUY)   2006   2021   PETSMART   2012   2037
  DONALD PLAZA   2002   JOINT VENTURE   9.1   91,462   100.0   WINNERS (TJ MAXX)   2008   2023                        
  ST. LAURANT   2002   JOINT VENTURE   12.6   125,984   98.0   ZELLERS   2017   2046   LOEB   2008   2023            
  BOULEVARD CENTRE III   2004   JOINT VENTURE   7.7   77,011   100.0   FOOD BASICS   2025   2055                        
  RIOCAN GRAND PARK   2003   JOINT VENTURE   11.9   118,637   100.0   SHOPPERS DRUG MART   2018   2038   WINNERS (TJ MAXX)   2014   2024   BUSINESS DEPOT (STAPLES)   2011   2021
  WALKER PLACE   2002   JOINT VENTURE   7.0   69,857   100.0   COMMISSO'S   2012   2032                        
  SCARBOROUGH   2005   JOINT VENTURE   2.3   20,506   100.0   AGINCOURT NISSAN LIMITED   2020                            
  SCARBOROUGH   2005   JOINT VENTURE   1.8   13,433   100.0   MORNINGSIDE NISSAN LIMITED   2020                            
  MARKETPLACE TORONTO   2002   JOINT VENTURE   16.4   164,121   100.0   WINNERS (TJ MAXX)   2014       MARK'S WORK WEARHOUSE   2015       SEARS APPLIANCE   2015    
  SUDBURY(4)   2004   JOINT VENTURE   14.1   170,000   100.0   WINNERS (TJ MAXX)   2015       LINEN N THINGS   2016       MICHAELS   2015    
PRINCE EDWARD ISLAND                                                
  CHARLOTTETOWN   2002   JOINT VENTURE   39.0   389,936   98.9   ZELLERS   2019   2079   WINNERS (TJ MAXX)   2009   2019   WEST ROYALTY FITNESS   2010   2015
QUEBEC                                                    
  GREENFIELD PARK   2002   JOINT VENTURE   36.4   364,003   100.0   WINNERS (TJ MAXX)   2011   2021   BUREAU EN GROS (STAPLES)   2007   2022   GUZZO CINEMA   2019   2039
  JACQUES CARTIER   2002   JOINT VENTURE   21.3   213,461   96.4   GUZZO CINEMA   2010   2040   VALUE VILLAGE   2008   2028   IGA   2012   2022
  CHATEAUGUAY   2002   JOINT VENTURE   21.1   211,391   99.2   SUPER C   2008   2028   HART   2015   2025            
                                                           
MEXICO                                                    
  SALTILLO PLAZA   2002   JOINT VENTURE   17.5   174,704   99.3   HEB                                
  NUEVO LEON   2002   JOINT VENTURE   26.7   267,322   91.9   HEB                                
  JUAREZ   2003   JOINT VENTURE   24.0   240,224   81.9   SORIANA                                
  SAN LUIS   2004   FEE   12.2   121,943   95.9   HEB                                
  ACAPULCO   2005   FEE   17.0   170,223   100.0   WAL-MART                                
  CANCUN   2005   FEE   9.2   92,152   87.9   WAL-MART                                
  HUEHUETOCA (4)   2004   JOINT VENTURE   9.8   144,000   100.0   WAL-MART                                
  REYNOSA (4)   2004   JOINT VENTURE   16.4   326,000   100.0   HEB                                
  PACHUCA (4)   2005   JOINT VENTURE   13.7   102,000   100.0   HOME DEPOT                                
  SALTILLO (4)   2005   FEE   25.8   149,000   100.0   HEB                                
  PACHUCA (4)   2005   FEE   11.2   120,000   100.0   WAL-MART                                
  TUXTEPEC (4)   2005   JOINT VENTURE   5.3   104,000   100.0   WAL-MART                                
  GUADALAJARA (4)   2005   JOINT VENTURE   24.0   291,000   100.0   WAL-MART                                
  GUADALAJARA (4)   2005   JOINT VENTURE   11.5   69,000   100.0   WAL-MART                                
  TLALNEPANTLA (4)   2005   JOINT VENTURE   14.7   195,000   100.0   WAL-MART                                
  TIJUANA (4)   2005   JOINT VENTURE   38.7   182,000   100.0   WAL-MART                                
  MEXICO CITY (4)   2005   FEE   0.9   22,000   100.0   MERCEDES BENZ                                
     
 
                                               
  TOTAL 744 PROPERTY INTERESTS   11,963   103,284,815                                                
     
 
                                               
 
ACQUISITIONS SUBSEQUENT TO DECEMBER 31, 2005 THROUGH FEBRUARY 6, 2006
                                                           
CALIFORNIA                                                      
  CHICO   2006   FEE   2.0   19,560   100.0                                    
  CORNING   2006   FEE   1.1   11,350   100.0                                    
  ELK GROVE   2006   FEE   3.0   30,130   100.0                                    
  ELK GROVE   2006   FEE   0.8   7,880   100.0                                    
  JACKSON   2006   FEE   6.8   67,665   100.0   RALEY'S SUPERMARKETS   2024                            
  JACKSON   2006   FEE   9.9   23,100   100.0                                    
  MANTECA   2006   FEE   1.9   19,455   100.0                                    
  MERCED   2006   FEE   4.0   27,350   100.0                                    
  NAPA   2006   FEE   35.0   349,530   100.0   TARGET   2020       HOME DEPOT   2018       RALEY'S SUPERMARKETS   2020    
  POLLOCK PINES   2006   FEE   1.2   12,000   100.0                                    
  RED BLUFF   2006   FEE   2.3   23,200   89.7                                    
  REDDING   2006   FEE   2.2   21,876   100.0                                    
  SACRAMENTO   2006   FEE   2.0   20,103   100.0                                    
  STOCKTON   2006   FEE   4.6   45,615   100.0                                    
  TRUCKEE   2006   FEE   2.7   26,553   77.5                                    
  TURLOCK   2006   FEE   2.2   22,415   100.0                                    
                                                           
HAWAII                                                    
  KIHEI   2006   FEE   1.8   17,897   100.0                                    
                                                           
NEVADA                                                    
  RENO   2006   FEE   3.1   31,317   100.0                                    
  RENO   2006   FEE   3.7   36,627   100.0                                    
                                                           
TEXAS                                                    
  HOUSTON   2006   JOINT VENTURE   35.0   350,398   96.5   MICHAELS   2011       MARSHALLS   2011       BED BATH & BEYOND   2012    
  ALLEN   2006   JOINT VENTURE   2.1   21,162   100.0                                    
  COLLEYVILLE   2006   JOINT VENTURE   2.0   20,188   100.0                                    
                                                           

34

Back to Contents

    YEAR
DEVELOPED
OR
ACQUIRED		    OWNERSHIP
INTEREST/
(EXPIRATION)
(2)		    LAND
AREA
(ACRES)		    LEASABLE
AREA
(SQ. FT.)		       MAJOR LEASES
            PERCENT  
          LEASED     LEASE   OPTION       LEASE   OPTION       LEASE   OPTION
  LOCATION         (1)   TENANT NAME   EXPIRATION   EXPIRATION   TENANT NAME EXPIRATION   EXPIRATION   TENANT NAME   EXPIRATION   EXPIRATION
 
DISPOSITIONS SUBSEQUENT TO DECEMBER 31, 2005 THROUGH FEBRUARY 6, 2006
                                     
ILLINOIS                                  
  CHICAGO 1997   FEE   6.0   86,894   100.0   KMART   2024   2054    
                                     
NORTH CAROLINA  
                                     
  WILSON (9) (6) 2002   JOINT VENTURE   16.7   167,207   11.4                
                                     
  RETAIL STORE LEASES (14) 1995/ 1997   LEASEHOLD   —   2,009,119   99.9                
                                     
OTHER REAL ESTATE INVESTMENTS                                  
                                     
  AI PORTFOLIO (VARIOUS CITIES) 2005   JOINT VENTURE   128.5   5,671,130   100.0   GOODYEAR            
  THREE NON-RETAIL ASSETS 2005       20.6   898,288   100.0                
           
 
                   
  GRAND TOTAL 847 PROPERTY INTERESTS         12,070   112,814,622 (15)                  
           
 
                   
                                     
(1) PERCENT LEASED INFORMATION AS OF DECEMBER 31, 2005 OR DATE OF ACQUISITION IF ACQUIRED SUBSEQUENT TO DECEMBER 31, 2005.
(2) THE TERM "JOINT VENTURE" INDICATES THAT THE COMPANY OWNS THE PROPERTY IN CONJUNCTION WITH ONE OR MORE JOINT VENTURE PARTNERS. THE DATE INDICATED IS THE EXPIRATION DATE OF ANY GROUND LEASE AFTER GIVING AFFECT TO ALL RENEWAL PERIODS.
(3) DENOTES REDEVELOPMENT PROJECT.
(4) DENOTES GROUND-UP DEVELOPMENT PROJECT. THE SQUARE FOOTAGE SHOWN REPRESENTS THE COMPLETED LEASEABLE AREA.
(5) DENOTES UNDEVELOPED LAND.
(6) SOLD OR TERMINATED SUBSEQUENT TO DECEMBER 31, 2005.
(7) DENOTES PROPERTY INTEREST IN KIMCO INCOME REIT ("KIR").
(8) DENOTES PROPERTY INTEREST IN KIMCO RETAIL OPPORTUNITY PORTFOLIO ("KROP").
(9) DENOTES PROPERTY INTEREST IN KIMSOUTH REALTY, INC.
(10) DENOTES PROPERTY INTEREST IN KIMCO INCOME FUND I.
(11) DENOTES PROPERTY INTEREST IN PL REALTY LLC.
(12) DENOTES PROPERTY INTEREST IN OTHER INSTITUTIONAL PROGRAMS.
(13) DENOTES PROPERTY INTEREST IN UBS.
(14) THE COMPANY HOLDS INTERESTS IN 22 RETAIL STORE LEASES RELATED TO THE ANCHOR STORE PREMISES IN NEIGHBORHOOD AND COMMUNITY SHOPPING CENTERS.
(15) DOES NOT INCLUDE 43 FNC REALTY PROPERTIES COMPRISING OF 803K SQUARE FEET, 156 PREFERRED EQUITY INTERESTS CONSISTING OF APPROXIMATELY 12.1 MILLION SQUARE FEET AND 9.8 MILLION SQUARE FEET OF PROJECTED LEASEABLE AREA RELATED TO THE GROUND-UP DEVELOPMENT PROJECTS.

35

 
Executive Officers of the Registrant
 
The following table sets forth information with respect to the executive officers of the Company as of January 31, 2006.
 
Name
 
Age
 
Position
 
Since
 
 
 
Milton Cooper
 
77
 
Chairman of the Board of
Directors and Chief
Executive Officer
 
1991
 
 
 
 
 
 
 
Michael J. Flynn
 
70
 
Vice Chairman of the
Board of Directors and
President and Chief
Operating Officer
 
1996

1997
 
 
 
 
 
 
 
David B. Henry
 
57
 
Vice Chairman of the
Board of Directors and
Chief Investment Officer
 
2001
 
 
 
 
 
 
 
Thomas A. Caputo
 
59
 
Executive Vice President
 
2000
 
 
 
 
 
 
 
Glenn G. Cohen
 
42
 
Vice President -
Treasurer
 
2000
1997
 
 
 
 
 
 
 
Raymond Edwards
 
43
 
Vice President –
Retail Property Solutions
 
2001
 
 
 
 
 
 
 
Jerald Friedman
 
61
 
President, KDI and
Executive Vice President
 
2000
1998
 
 
 
 
 
 
 
Bruce M. Kauderer
 
59
 
Vice President – Legal
General Counsel and
Secretary
 
1995
1997
 
 
 
 
 
 
 
Michael V. Pappagallo
 
47
 
Executive Vice President -
Chief Financial Officer
 
2005
1997
 
David B. Henry has been Chief Investment Officer since April 2001 and Vice Chairman of the Board of Directors since May 2001.  Mr. Henry served as the Chief Investment Officer and Senior Vice President of General Electric’s GE Capital Real Estate business and Chairman of GE Capital Investment Advisors for more than five years prior to joining the Company.
 
Raymond Edwards has been Vice President – Retail Property Solutions since July 2001.  Prior to joining the Company in July 2001, Mr. Edwards was Senior Vice President, Managing Director of SBC Group from 1998 to July 2001. SBC Group is a privately held company that acquires and invests in assets of retail companies.  Previously, Mr. Edwards worked for 13 years at Keen Realty Consultants Inc. responsible for the marketing and disposition of real estate for retail operators including Caldor, Bonwit Teller, Alexander’s and others.
 
The executive officers of the Company serve in their respective capacities for approximate one-year terms and are subject to re-election by the Board of Directors, generally at the time of the Annual Meeting of the Board of Directors following the Annual Meeting of Stockholders.
 
36
 
PART II
 
Item 5.  Market for the Registrant’s Common Equity and Related Shareholder Matters
 
Market Information  The following table sets forth the common stock offerings completed by the Company during the three-year period ended December 31, 2005.  The Company’s common stock was sold for cash at the following offering prices per share:
 
Offering Date
 
Offering Price
 
June 2003
 
$ 18.36
September 2003
 
$ 20.42
 
The table below sets forth, for the quarterly periods indicated, the high and low sales prices per share reported on the NYSE Composite Tape and declared dividends per share for the Company’s common stock.  The Company’s common stock is traded under the trading symbol “KIM”.
 
 
 
Stock Price
 
 
 
 
Period
 
High
 
Low
 
Dividends
 
 
 
 
 
2005:
 
 
 
 
 
 
 
 
 
 
First Quarter
 
$
29.09
 
$
25.90
 
$
0.305
 
Second Quarter
 
$
30.00
 
$
26.17
 
$
0.305
 
Third Quarter
 
$
33.35
 
$
29.19
 
$
0.330
 
Fourth Quarter
 
$
33.21
 
$
27.81
 
$
0.330
(a)
2004:
 
 
 
 
 
 
 
 
 
 
First Quarter
 
$
25.66
 
$
21.88
 
$
0.285
 
Second Quarter
 
$
25.60
 
$
19.77
 
$
0.285
 
Third Quarter
 
$
25.90
 
$
22.42
 
$
0.285
 
Fourth Quarter
 
$
29.64
 
$
25.27
 
$
0.305
 
 
(a)
Paid on January 17, 2006, to stockholders of record on January 3, 2006.
 
Holders  The number of holders of record of the Company’s common stock, par value $0.01 per share, was 2,243 as of January 31, 2006.
 
Dividends  Since the IPO, the Company has paid regular quarterly dividends to its stockholders. While the Company intends to continue paying regular quarterly dividends, future dividend declarations will be at the discretion of the Board of Directors and will depend on the actual cash flow of the Company, its financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Directors deems relevant. The Company is required by the Internal Revenue Code of 1986, as amended, to distribute at least 90% of its REIT taxable income. The actual cash flow available to pay dividends will be affected by a number of factors, including the revenues received from rental properties, the operating expenses of the Company, the interest expense on its borrowings, the ability of lessees to meet their obligations to the Company and any unanticipated capital expenditures.
 
The Company has determined that the $1.25 dividend per common share paid during 2005 represented 86% ordinary income and a 14% capital gain to its stockholders and the $1.14 dividend per common share paid during 2004 represented 83% ordinary income and 17% return of capital to its stockholders.
 
In addition to its common stock offerings, the Company has capitalized the growth in its business through the issuance of unsecured fixed and floating-rate medium-term notes, underwritten bonds, mortgage debt and construction loans, convertible preferred stock and perpetual preferred stock.  Borrowings under the Company’s revolving credit facilities have also been an interim source of funds to both finance the purchase of properties and other investments and meet any short-term working capital requirements.  The various instruments governing the Company’s issuance of its unsecured public debt, bank debt, mortgage debt and preferred stock impose certain restrictions on the Company with regard to dividends, voting, liquidation and other preferential rights available to the holders of such instruments.  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 11 and 16 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.
 
37
 
The Company does not believe that the preferential rights available to the holders of its Class F Preferred Stock, the financial covenants contained in its public bond Indenture, as amended, or its revolving credit agreements will have an adverse impact on the Company’s ability to pay dividends in the normal course to its common stockholders or to distribute amounts necessary to maintain its qualification as a REIT.
 
The Company maintains a dividend reinvestment and direct stock purchase plan (the “Plan”) pursuant to which common and preferred stockholders and other interested investors may elect to automatically reinvest their dividends to purchase shares of the Company’s common stock or, through optional cash payments, purchase shares of the Company’s common stock.  The Company may, from time to time, either (i) purchase shares of its common stock in the open market or (ii) issue new shares of its common stock for the purpose of fulfilling its obligations under the Plan.
 
Item 6.  Selected Financial Data
 
The following table sets forth selected, historical consolidated financial data for the Company and should be read in conjunction with the Consolidated Financial Statements of the Company and Notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this annual report on Form 10-K.
 
The Company believes that the book value of its real estate assets, which reflects the historical costs of such real estate assets less accumulated depreciation, is not indicative of the current market value of its properties.  Historical operating results are not necessarily indicative of future operating performance.
 
38
 
 
 
Year ended December 31, (2)
 
 
 
 
 
 
2005
 
2004
 
2003
 
2002
 
2001
 
 
 
 
 
 
 
 
 
 
(in thousands, except per share information)
 
Operating Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues from rental property (1)
 
$
522,545
 
$
507,641
 
$
466,225
 
$
419,038
 
$
415,064
 
Interest expense (3)
 
$
127,711
 
$
107,177
 
$
102,391
 
$
84,885
 
$
86,088
 
Depreciation and amortization (3)
 
$
105,942
 
$
99,616
 
$
83,212
 
$
68,096
 
$
65,761
 
Gain on sale of development properties
 
$
33,636
 
$
16,835
 
$
17,495
 
$
15,880
 
$
13,418
 
Gain on transfer/sale of operating properties,net (3)
 
$
2,833
 
$
—
 
$
3,177
 
$
—
 
$
3,040
 
Provision for income taxes
 
$
11,254
 
$
8,320
 
$
8,514
 
$
12,904
 
$
19,376
 
Income from continuing operations
 
$
334,083
 
$
281,019
 
$
243,586
 
$
235,610
 
$
210,875
 
Income per common share, from continuing operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
1.42
 
$
1.21
 
$
1.03
 
$
1.04
 
$
0.97
 
Diluted
 
$
1.40
 
$
1.19
 
$
1.02
 
$
1.03
 
$
0.95
 
Weighted average number of shares of common stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
226,641
 
 
222,859
 
 
214,184
 
 
208,916
 
 
192,634
 
Diluted
 
 
230,868
 
 
227,143
 
 
217,540
 
 
210,922
 
 
202,326
 
Cash dividends declared per common share
 
$
1.27
 
$
1.16
 
$
1.10
 
$
1.05
 
$
0.98
 
 
 
 
December 31,
 
 
 
 
 
 
2005
 
2004
 
2003
 
2002
 
2001
 
 
 
 
 
 
 
 
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate, before accumulated depreciation
 
$
4,560,406
 
$
4,092,222
 
$
4,174,664
 
$
3,398,971
 
$
3,201,364
 
Total assets
 
$
5,534,636
 
$
4,749,597
 
$
4,641,092
 
$
3,758,350
 
$
3,387,342
 
Total debt
 
$
2,691,196
 
$
2,118,622
 
$
2,154,948
 
$
1,576,982
 
$
1,328,079
 
Total stockholders' equity
 
$
2,387,214
 
$
2,236,400
 
$
2,135,846
 
$
1,908,800
 
$
1,892,647
 
Cash flow provided by operations
 
$
410,797
 
$
365,176
 
$
308,632
 
$
278,931
 
$
287,444
 
Cash flow used for investing activities
 
$
(716,015
)
$
(299,597
)
$
(637,636
)
$
(396,655
)
$
(150,059
)
Cash flow provided by (used for) financing activities
 
$
343,271
 
$
(75,647
)
$
341,330
 
$
59,839
 
$
(62,635
)
 
(1)
Does not include (i) revenues from rental property relating to unconsolidated joint ventures, (ii) revenues relating to the investment in retail stores leases and (iii) revenues from properties included in discontinued operations.
(2)
All years have been adjusted to reflect the impact of operating properties sold during the years ended December 31, 2005, 2004, 2003 and 2002 and properties classified as held for sale as of December 31, 2005, which are reflected in discontinued operations in the Consolidated Statements of Income.
(3)
Does not include amounts reflected in discontinued operations.
 
39
 
Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in this annual report on Form 10-K. Historical results and percentage relationships set forth in the Consolidated Statements of Income contained in the Consolidated Financial Statements, including trends which might appear, should not be taken as indicative of future operations.
 
Executive Summary
 
Kimco Realty Corporation is one of the nation’s largest publicly-traded owners and operators of neighborhood and community shopping centers.  As of February 6, 2006, the Company had interests in 1,046 properties totaling approximately 135.5 million square feet of GLA located in 44 states, Canada and Mexico.
 
The Company is self-administered and self-managed through present management, which has owned and managed neighborhood and community shopping centers for over 45 years. The executive officers are engaged in the day-to-day management and operation of real estate exclusively with the Company, with nearly all operating functions, including leasing, asset management, maintenance, construction, legal, finance and accounting, administered by the Company.
 
In connection with the Tax Relief Extension Act of 1999 (the “RMA”), which became effective January 1, 2001, the Company is now permitted to participate in activities which it was precluded from previously in order to maintain its qualification as a Real Estate Investment Trust (“REIT”), so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code, subject to certain limitations. As such, the Company, through its taxable REIT subsidiaries, is engaged in various retail real estate-related opportunities including (i) merchant building, through its Kimco Developers, Inc. (“KDI”) subsidiary, which is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion, (ii) retail real estate advisory and disposition services, which primarily focuses on leasing and disposition strategies of retail real estate controlled by both healthy and distressed and/or bankrupt retailers and (iii) acting as an agent or principal in connection with tax deferred exchange transactions. The Company will consider other investments through taxable REIT subsidiaries should suitable opportunities arise.
 
In addition, the Company continues to capitalize on its established expertise in retail real estate by establishing other ventures in which the Company owns a smaller equity interest and provides management, leasing and operational support for those properties.  The Company also provides preferred equity capital for real estate entrepreneurs and provides real estate capital and advisory services to both healthy and distressed retailers.  The Company also makes selective investments in secondary market opportunities where a security or other investment is, in management’s judgment, priced below the value of the underlying real estate.
 
The Company’s strategy is to maintain a strong balance sheet while investing opportunistically and selectively. The Company intends to continue to execute its plan of delivering solid growth in earnings and dividends.  As a result of the improved 2005 performance, the Board of Directors increased the quarterly dividend per common share to $0.33 from $0.305, effective for the fourth quarter of 2005.
 
Critical Accounting Policies
 
The Consolidated Financial Statements of the Company include the accounts of the Company, its wholly-owned subsidiaries and all entities in which the Company has a controlling interest including where the Company has been determined to be a primary beneficiary of a variable interest entity in accordance with the provisions and guidance of Interpretation No. 46 (R), Consolidation of Variable Interest Entities or meets certain criteria of a sole general partner or managing member in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”).  The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying Consolidated Financial Statements and related notes.  In preparing these financial statements, management has made its best estimates and assumptions that affect the reported amounts of assets and liabilities.  These estimates are based on, but not limited to, historical results, industry standards and current economic conditions, giving due
 
40
 
consideration to materiality.  The most significant assumptions and estimates relate to revenue recognition and the recoverability of trade accounts receivable, depreciable lives and valuation of real estate.  Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.
 
          Revenue Recognition and Accounts Receivable
 
Base rental revenues from rental property are recognized on a straight-line basis over the terms of the related leases.  Certain of these leases also provide for percentage rents based upon the level of sales achieved by the lessee.  These percentage rents are recorded once the required sales level is achieved.  Operating expense reimbursements are recognized as earned.  Rental income may also include payments received in connection with lease termination agreements.  In addition, leases typically provide for reimbursement to the Company of common area maintenance, real estate taxes and other operating expenses. 
 
The Company makes estimates of the uncollectability of its accounts receivable related to base rents, expense reimbursements and other revenues.  The Company analyzes accounts receivable and historical bad debt levels, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts.  In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims.  The Company’s reported net income is directly affected by management’s estimate of the collectability of accounts receivable.
 
          Real Estate
 
The Company’s investments in real estate properties are stated at cost, less accumulated depreciation and amortization.  Expenditures for maintenance and repairs are charged to operations as incurred.  Significant renovations and replacements, which improve and extend the life of the asset, are capitalized.
 
Upon acquisition of operating real estate properties, the Company estimates the fair value of acquired tangible assets (consisting of land, building and improvements) and identified intangible assets and liabilities (consisting of above and below-market leases, in-place leases and tenant relationships) and assumed debt in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations.  Based on these estimates, the Company allocates the purchase price to the applicable assets and liabilities.  The Company utilizes methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities.  The useful lives of amortizable intangible assets are evaluated each reporting period with any changes in estimated useful lives being accounted for over the revised remaining useful life.
 
Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows:
 
Buildings
 
15 to 50 years
 
Fixtures, building and leasehold improvements
(including certain identified intangible assets)
 
Terms of leases or useful lives,
whichever is shorter
 
The Company is required to make subjective assessments as to the useful lives of its properties for purposes of determining the amount of depreciation to reflect on an annual basis with respect to those properties.  These assessments have a direct impact on the Company’s net income.
 
Real estate under development on the Company’s Consolidated Balance Sheets represents ground-up development of neighborhood and community shopping center projects which are subsequently sold upon completion.  These assets are carried at cost and no depreciation is recorded.  The cost of land and buildings under development includes specifically identifiable costs.  The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs of personnel directly involved and other costs incurred during the period of development.  The Company ceases cost capitalization when the property is held available for occupancy upon substantial completion of tenant improvements, but no later than one year from the completion of major construction activity.  If, in management’s opinion, the estimated net sales price of these assets is less than the net carrying value, an adjustment to the carrying value would be recorded to reflect the estimated fair value of the property.  A gain on the sale of these assets is generally recognized using the full accrual method in accordance with the provisions of SFAS No. 66, Accounting for Real Estate Sales.
 
41
 
          Long Lived Assets
 
On a periodic basis, management assesses whether there are any indicators that the value of the real estate properties (including any related amortizable intangible assets or liabilities) may be impaired.  A property value is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and without interest charges) of the property over its remaining useful life is less than the net carrying value of the property.  Such cash flow projections consider factors such as expected future operating income, trends, and prospects, as well as the effects of demand, competition and other factors.  To the extent impairment has occurred, the carrying value of the property would be adjusted to an amount to reflect the estimated fair value of the property.
 
When a real estate asset is identified by management as held for sale, the Company ceases depreciation of the asset and estimates the sales price of such asset net of selling costs.  If, in management’s opinion, the net sales price of the asset is less than the net book value of such asset, an adjustment to the carrying value would be recorded to reflect the estimated fair value of the property.
 
The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties, investments in joint ventures and other investments.  The Company’s reported net income is directly affected by management’s estimate of impairments and/or valuation allowances.
 
Results of Operations
 
          Comparison 2005 to 2004
 
Revenues from rental property increased $14.9 million or 2.9% to $522.5 million for the year ended December 31, 2005, as compared with $507.6 million for the year ended December 31, 2004.  This net increase resulted primarily from the combined effect of (i) acquisitions during 2005 and 2004 providing incremental revenues of $33.8 million for the year ended December 31, 2005, and (ii) an overall increase in shopping center portfolio occupancy to 94.6% at December 31, 2005, as compared to 93.6% at December 31, 2004 and the completion of certain redevelopment projects and tenant buyouts providing incremental revenues of approximately $18.1 million for the year ended December 31, 2005, as compared to the corresponding periods last year, offset by (iii) a decrease in revenues of approximately $37.0 million for the year ended December 31, 2005, as compared to the corresponding period last year, resulting from the sale of certain properties and the transfer of operating properties to various unconsolidated joint venture entities during 2005 and 2004.
 
Rental property expenses, including depreciation and amortization, increased approximately $14.0 million or 6.1% to $243.9 million for the year ended December 31, 2005, as compared with $229.9 million for the preceding year. These increases are primarily due to operating property acquisitions during 2005 and 2004, which were partially offset by property dispositions and operating properties transferred to various unconsolidated joint venture entities.
 
Mortgage and other financing income increased $12.6 million to $27.6 million for the year ended December 31, 2005, as compared to $15.0 million for the year ended December 31, 2004. This increase primarily relates to a $14.0 million prepayment fee received by the Company relating to the early repayment by Shopko of its outstanding loan with the Company.
 
Management and other fee income increased approximately $5.0 million to $30.5 million for the year ended December 31, 2005, as compared to $25.4 million in the corresponding period in 2004. This increase is primarily due to incremental fees earned from growth in the co-investment programs.
 
General and administrative expenses increased approximately $12.6 million to $56.8 million for the year ended December 31, 2005, as compared to $44.2 million in the preceding calendar year. This increase is primarily due to (i) a $1.4 million increase in professional fees, due in part to compliance with section 404 of the Sarbanes-Oxley Act, (ii) a $3.0 million increase due to the expensing of the value attributable to stock options granted, and (iii) increased personnel and systems related costs associated with the growth of the Company.
 
Interest, dividends and other investment income increased approximately $9.6 million to $28.4 million for the year ended December 31, 2005, as compared to $18.7 million in 2004. This increase is primarily due to greater dividend income and realized gains on the sale
 
42
 
of certain marketable securities during 2005 as compared to the preceding year.
 
Interest expense increased $20.5 million to $127.7 million for the year ended December 31, 2005, as compared with $107.2 million for the year ended December 31, 2004. This increase is primarily due to an overall increase in average borrowings outstanding during the year ended December 31, 2005, as compared to the preceding year, resulting from the funding of investment activity during 2005.
 
Income from other real estate investments increased $27.8 million to $57.9 million for the year ended December 31, 2005, as compared to $30.1 million for the preceding year. This increase is primarily due to increased investment in the Company’s Preferred Equity program, which contributed income of $32.8 million during 2005, including an aggregate of approximately $12.6 million of promoted interests earned from six capital transactions during 2005, as compared to $11.4 million in 2004.
 
Equity in income of real estate joint ventures, net increased $21.1 million to $77.5 million for the year ended December 31, 2005, as compared with $56.4 million for the corresponding period in 2004.  This increase is primarily attributable to (i) the increased equity in income from the Kimco Income REIT joint venture investment (“KIR”) resulting from the sale of two operating properties during 2005 which provided an aggregate gain of $20.2 million, of which the pro-rata share to the Company was $8.7 million, (ii) increased equity in income in three joint venture investments resulting from the sale of two operating properties and one development property during 2005, which provided aggregate gains of approximately $17.9 million, of which the pro-rata share to the Company was approximately $8.8 million, and (iii) the Company’s growth of its various other real estate joint ventures.  The Company has made additional capital investments in these and other joint ventures for the acquisition of additional shopping center properties throughout 2005 and 2004.
 
During 2005, KDI, the Company’s wholly-owned development taxable REIT subsidiary, in separate transactions, sold six recently completed projects and 41 out-parcels for approximately $264.1 million. These sales provided gains of approximately $22.8 million, net of income taxes of approximately $10.8 million.
 
During 2004, KDI, the Company’s wholly-owned development taxable REIT subsidiary, in separate transactions, sold five recently completed projects, three completed phases of projects and 28 out-parcels for approximately $169.4 million.  These sales provided gains of approximately $12.4 million, net of income taxes of approximately $4.4 million.
 
During 2005, the Company (i) disposed of, in separate transactions, 20 operating properties for an aggregate sales price of approximately $93.3 million, (ii) transferred three operating properties to KROP for an aggregate price of approximately $49.0 million, (iii) transferred 52 operating properties to various joint ventures in which the Company has non-controlling interests ranging from 15% to 50% for an aggregate price of approximately $183.1 million.  For the year ended December 31, 2005, these transactions resulted in gains of approximately $31.9 million and a loss on sale/transfer from four of the properties for $5.2 million.
 
During 2004, the Company (i) disposed of, in separate transactions, 16 operating properties and one ground lease for an aggregate sales price of approximately $81.1 million, including the assignment of approximately $8.0 million of non-recourse mortgage debt encumbering one of the properties; cash proceeds of approximately $16.9 million from the sale of two of these properties were used in a 1031 exchange to acquire shopping center properties located in Roanoke, VA, and Tempe, AZ, (ii) transferred 17 operating properties to KROP for an aggregate price of approximately $197.9 million and (iii) transferred 21 operating properties to various co-investment ventures in which the Company has non-controlling interests ranging from 10% to 30% for an aggregate price of approximately $491.2 million. For the year ended December 31, 2004, these dispositions resulted in gains of approximately $15.8 million and a loss on sale from three of the properties of approximately $5.1 million.
 
As part of the Company’s periodic assessment of its real estate properties with regard to both the extent to which such assets are consistent with the Company’s long-term real estate investment objectives and the performance and prospects of each asset, the Company determined in 2004 that its investment in an operating property comprised of approximately 0.1 million square feet of GLA, with a net book value of $3.8 million, might not be fully recoverable. Based upon management’s assessment of current market conditions and lack of demand for the property, the Company reduced its anticipated holding period of this investment. As a result of the reduction in the anticipated holding period, together with reassessment of the potential future operating cash flow for the property and the effects of current market conditions, the Company determined that its investment in this asset was
 
43
 
not fully recoverable and recorded an adjustment of property carrying value of approximately $3.0 million in 2004.  This adjustment was included, along with the related property operations in the line Income from discontinued operating properties, in the Company’s Consolidated Statements of Income.
 
For those property dispositions for which SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”) is applicable, the operations and gain or loss on the sale of the property have been included in the caption Discontinued operations in the Company’s Consolidated Statements of Income.
 
Net income for the year ended December 31, 2005, was $363.6 million, compared to $297.1 million for the year ended December 31, 2004.  On a diluted per share basis, net income increased $0.26 to $1.52 for the year ended December 31, 2005, as compared to $1.26 for the previous year.  This increase is attributable to (i) increased income from other real estate investments, primarily from the Company’s Preferred Equity program, (ii) an increase in equity in income of real estate joint ventures achieved from gains on sales of joint venture operating properties and additional capital investments in the Company’s joint venture programs for the acquisition of additional shopping center properties throughout 2005 and 2004, (iii) increased income contributed from mortgage and other financing receivables as compared to last year and (iv) increased gains on sale/transfer of development and operating properties during 2005, as compared to the same period during 2004.
 
          Comparison 2004 to 2003
 
Revenues from rental property increased $41.4 million or 8.9% to $507.6 million for the year ended December 31, 2004, as compared with $466.2 million for the year ended December 31, 2003.  This net increase resulted primarily from the combined effect of (i) acquisitions during 2004 and 2003 providing incremental revenues of $40.4 million for the year ended December 31, 2004, and (ii) an overall increase in shopping center portfolio occupancy to 93.6% at December 31, 2004, as compared to 90.7% at December 31, 2003 and the completion of certain redevelopment projects and tenant buyouts providing incremental revenues of approximately $16.6 million for the year ended December 31, 2004, as compared to the corresponding periods last year, offset by (iii) a decrease in revenues of approximately $15.6 million for the year ended December 31, 2004, as compared to the corresponding period last year, resulting from the sale of certain properties and the transfer of operating properties to various unconsolidated joint venture entities during 2004 and 2003.
 
Rental property expenses, including depreciation and amortization, increased approximately $26.3 million or 12.9% to $229.9 million for the year ended December 31, 2004, as compared with $203.5 million for the preceding year. This increase was primarily due to operating property acquisitions during 2004 and 2003, which were partially offset by property dispositions and operating properties transferred to various unconsolidated joint venture entities.
 
Mortgage and other financing income decreased $3.8 million to $15.0 million for the year ended December 31, 2004, as compared to $18.9 million for the year ended December 31, 2003. This decrease was primarily due to lower interest and financing income earned related to certain real estate lending activities during 2004 as compared to the preceding year.
 
Management and other fee income increased approximately $10.1 million to $25.4 million for the year ended December 31, 2004, as compared to $15.3 million in the corresponding period in 2003. This increase was primarily due to incremental fees earned from growth in the co-investment programs and fees earned from disposition services provided to various retailers.
 
General and administrative expenses increased approximately $5.9 million to $44.2 million for the year ended December 31, 2004, as compared to $38.3 million in the preceding calendar year. This increase was primarily due to (i) a $0.9 million increase in professional fees, mainly attributable to compliance with section 404 of the Sarbanes-Oxley Act, (ii) a $1.6 million increase due to the expensing of the value attributable to stock options granted, (iii) increased staff levels related to the growth of the Company and (iv) other personnel-related costs, associated with a realignment of our regional operations.
 
Other income/(expense), net increased approximately $14.2 million to $10.1 million for the year ended December 31, 2004, as compared to the preceding year. This increase was primarily due to a prior-year write-down in the carrying value of the Company’s equity investment in Frank’s Nursery, Inc., offset by increased income in 2004 from other equity investments.
 
44
 
Interest expense increased $4.8 million to $107.2 million for the year ended December 31, 2004, as compared with $102.4 million for the year ended December 31, 2003. This increase was primarily due to an overall increase in average borrowings outstanding during the year ended December 31, 2004, as compared to the preceding year, resulting from the funding of investment activity during 2004.
 
During 2003, the Company reached agreement with certain lenders in connection with three individual non-recourse mortgages encumbering three former Kmart sites. The Company paid approximately $14.2 million in full satisfaction of these loans, which aggregated approximately $24.0 million. As a result of these transactions, the Company recognized a gain on early extinguishment of debt of approximately $9.7 million during 2003.
 
Income from other real estate investments increased $7.3 million to $30.1 million for the year ended December 31, 2004, as compared to $22.8 million for the preceding year. This increase was primarily due to increased investment in the Company’s Preferred Equity program, which contributed income of $11.4 million during 2004, as compared to $4.6 million in 2003.
 
Equity in income of real estate joint ventures, net increased $14.1 million to $56.4 million for the year ended December 31, 2004, as compared with $42.3 million for the preceding year. This increase was primarily attributable to the equity in income from the increased investment in the RioCan joint venture investment (“RioCan Venture”), the Kimco Retail Opportunity Portfolio joint venture investment (“KROP”) and the Company’s growth of its various other real estate joint ventures. The Company had made additional capital investments in these and other joint ventures for the acquisition of additional shopping center properties throughout 2004 and 2003.
 
During 2004, KDI, the Company’s wholly-owned development taxable REIT subsidiary, in separate transactions, sold 28 out-parcels, three completed phases of projects and five recently completed projects for approximately $169.4 million. These sales provided gains of approximately $12.4 million, net of income taxes of approximately $4.4 million.
 
During the year ended December 31, 2003, KDI sold four projects and 26 out-parcels, in separate transactions, for approximately $134.6 million which resulted in gains of approximately $10.5 million, net of income taxes of $7.0 million.
 
During 2004, the Company (i) disposed of, in separate transactions, 16 operating properties and one ground lease for an aggregate sales price of approximately $81.1 million, including the assignment of approximately $8.0 million of non-recourse mortgage debt encumbering one of the properties; cash proceeds of approximately $16.9 million from the sale of two of these properties were used in a 1031 exchange to acquire shopping center properties located in Roanoke, VA, and Tempe, AZ, (ii) transferred 17 operating properties to KROP for an aggregate price of approximately $197.9 million and (iii) transferred 21 operating properties to various co-investment ventures in which the Company has non-controlling interests ranging from 10% to 30% for an aggregate price of approximately $491.2 million. For the year ended December 31, 2004, these dispositions resulted in gains of approximately $15.8 million and a loss on sale from three of the properties of approximately $5.1 million.
 
As part of the Company’s periodic assessment of its real estate properties with regard to both the extent to which such assets are consistent with the Company’s long-term real estate investment objectives and the performance and prospects of each asset, the Company determined in 2004 that its investment in an operating property comprised of approximately 0.1 million square feet of GLA, with a net book value of $3.8 million, might not be fully recoverable. Based upon management’s assessment of current market conditions and lack of demand for the property, the Company reduced its anticipated holding period of this investment. As a result of the reduction in the anticipated holding period, together with reassessment of the potential future operating cash flow for the property and the effects of current market conditions, the Company determined that its investment in this asset was not fully recoverable and recorded an adjustment of property carrying value of approximately $3.0 million in 2004.  This adjustment was included, along with the related property operations in the line Income from discontinued operating properties, in the Company’s Consolidated Statements of Income.
 
During 2003, the Company disposed of, in separate transactions, (i) ten operating shopping center properties for an aggregate sales price of approximately $119.1 million, including the assignment of approximately $1.7 million of mortgage debt encumbering one of the properties, (ii) two regional malls for an aggregate sales price of approximately $135.6
 
45
 
million, (iii) one out-parcel for a sales price of approximately $8.1 million, (iv) transferred three operating properties to KROP for a price of approximately $144.2 million, (v) transferred an operating property to a newly formed joint venture in which the Company has a non-controlling 10% interest for a price of approximately $21.9 million and (vi) terminated four leasehold positions in locations where a tenant in bankruptcy had rejected its lease. These transactions resulted in gains of approximately $50.8 million.
 
During 2003, the Company identified two operating properties, comprised of approximately 0.2 million square feet of GLA, as “Held for Sale” in accordance with SFAS No. 144.  The book value of these properties, aggregating approximately $19.5 million, net of accumulated depreciation of approximately $2.0 million, exceeded their estimated fair value.  The Company’s determination of the fair value of these properties, aggregating approximately $15.4 million, was based upon contracts of sale with third parties less estimated selling costs.  As a result, the Company recorded an adjustment of property carrying values of $4.0 million.  This adjustment was included, along with the related property operations for the current and comparative years, in the caption Income from discontinued operations in the Company’s Consolidated Statements of Income.
 
For those property dispositions for which SFAS No. 144 was applicable, the operations and gain or loss on the sale of the property have been included in the caption Discontinued operations in the Company’s Consolidated Statements of Income.
 
Income from continuing operations for the year ended December 31, 2004, was $281.0, compared to $243.6 million for the year ended December 31, 2003. On a diluted per share basis, income from continuing operations improved $0.17 to $1.19 for the year ended December 31, 2004, as compared to $1.02 for the preceding year. This improved performance was primarily attributable to (i) the incremental operating results from the acquisition of operating properties during 2004 and 2003, including the Mid-Atlantic Realty Trust transaction, (ii) an increase in equity in income of real estate joint ventures resulting from additional capital investments in the RioCan Venture, KROP and other joint venture investments for the acquisition of additional shopping center properties during 2004 and 2003, (iii) an increase in management and other fee income related to the growth in the co-investment programs, (iv) increased income from other real estate investments and (v) significant leasing within the portfolio, which improved operating profitability.
 
Net income for the year ended December 31, 2004, was $297.1 million, compared to $307.9 million for the year ended December 31, 2003. On a diluted per share basis, net income decreased $0.05 to $1.26 for the year ended December 31, 2004, as compared to $1.31 for the year ended December 31, 2003. This decrease was primarily attributable to lower income from discontinued operations of $48.2 million for the year ended December 31, 2004, compared to the preceding year due to property sales during 2004 and 2003 and gains on early extinguishment of debt during 2003. In addition, the diluted per share results for the year ended December 31, 2003, were decreased by a reduction in net income available to common stockholders of $0.04 resulting from the deduction of original issuance costs associated with the redemption of the Company’s 7¾% Class A, 8 1/2% Class B and 8 3/8% Class C Cumulative Redeemable Preferred Stocks during the second quarter of 2003.
 
Tenant Concentrations
 
The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties, avoiding dependence on any single property, and a large tenant base.  At December 31, 2005, the Company’s five largest tenants were The Home Depot, TJX Companies, Sears Holdings, Kohl’s and Royal Ahold, which represented approximately 3.6%, 3.2%, 2.7%, 2.5% and 2.0%, respectively, of the Company’s annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest.
 
Liquidity and Capital Resources
 
The Company’s cash flow activities are summarized as follows (in millions):
 
 
 
Year Ended December 31,
 
 
 
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Net cash flow provided by operating activities
 
$
410.8
 
$
365.2
 
$
308.6
 
Net cash flow used for investing activities
 
$
(716.0
)
$
(299.6
)
$
(637.6
)
Net cash flow provided by (used for) financing activities
 
$
343.3
 
$
(75.6
)
$
341.3
 
 
46
 
Operating Activities
 
The Company anticipates that cash flows from operations will continue to provide adequate capital to fund its operating and administrative expenses, regular debt service obligations and all dividend payments in accordance with REIT requirements in both the short term and long term.  In addition, the Company anticipates that cash on hand, borrowings under its revolving credit facilities, issuance of equity and public debt, as well as other debt and equity alternatives, will provide the necessary capital required by the Company. Net cash flow provided by operating activities for the year ended December 31, 2005, was primarily attributable to (i) cash flow from the diverse portfolio of rental properties, (ii) the acquisition of operating properties during 2004 and 2005, (iii) new leasing, expansion and re-tenanting of core portfolio properties and (iv) growth in the Company’s joint venture and Preferred Equity programs.
 
Investing Activities
 
          Acquisitions and Redevelopments
 
During the year ended December 31, 2005, the Company expended approximately $376.0 million towards acquisition of and improvements to operating real estate.  (See Note 3 of the Notes to the Consolidated Financial Statements included in this annual report on Form 10-K.)
 
The Company has an ongoing program to reformat and re-tenant its properties to maintain or enhance its competitive position in the marketplace.  During the year ended December 31, 2005, the Company expended approximately $55.5 million in connection with these major redevelopments and re-tenanting projects.  The Company anticipates its capital commitment toward these and other redevelopment projects during 2006 will be approximately $90.0 million to $110.0 million.  The funding of these capital requirements will be provided by cash flow from operating activities and availability under the Company’s revolving lines of credit.
 
Investments and Advances to Real Estate Joint Ventures
 
During the year ended December 31, 2005, the Company expended approximately $267.3 million for investments and advances to real estate joint ventures and received approximately $130.6 million from reimbursements of advances to real estate joint ventures.  (See Note 7 of the Notes to the Consolidated Financial Statements included in this annual report on Form 10-K.)
 
Ground-up Development
 
The Company is engaged in ground-up development projects which consists of (i) merchant building through the Company’s wholly-owned taxable REIT subsidiary, KDI, which develops neighborhood and community shopping centers and the subsequent sale thereof upon completion, (ii) ground-up development projects which will be held as long-term investments by the Company and (iii) various ground-up development projects located in Mexico and Canada for long-term investment.  All ground-up development projects generally have substantial pre-leasing prior to the commencement of construction. As of December 31, 2005, the Company had in progress a total of 38 ground-up development projects including 26 merchant building projects, five domestic ground-up development projects, six ground-up development projects located throughout Mexico and one ground-up development project located in Canada.
 
During the year ended December 31, 2005, the Company expended approximately $452.7 million in connection with the purchase of land and construction costs related to these projects and those sold during 2005.  These projects are currently proceeding on schedule and substantially in line with the Company’s budgeted costs.  The Company anticipates its capital commitment during 2006 toward these and other development projects will be approximately $300 million to $350 million.  The proceeds from the sales of the completed ground-up development projects, proceeds from construction loans and availability under the Company’s revolving lines of credit are expected to be sufficient to fund these anticipated capital requirements. (See Note 3 of the Notes to the Consolidated Financial Statements included in this annual report on Form 10-K.)
 
Dispositions and Transfers
 
During the year ended December 31, 2005, the Company received net proceeds of approximately $348.4 million relating to the sale of various operating properties and ground-up development projects and approximately $128.5 million from the transfer of operating properties to various joint ventures.  (See Notes 3 and 7 of the Notes to the Consolidated Financial Statements included in this annual report on Form 10-K.)
 
47
 
Financing Activities
 
It is management’s intention that the Company continually have access to the capital resources necessary to expand and develop its business.  As such, the Company intends to operate with and maintain a conservative capital structure with a level of debt to total market capitalization of 50% or less.  As of December 31, 2005, the Company’s level of debt to total market capitalization was 26%.  In addition, the Company intends to maintain strong debt service coverage and fixed charge coverage ratios as part of its commitment to maintaining its investment-grade debt ratings.  The Company may, from time to time, seek to obtain funds through additional equity offerings, unsecured debt financings and/or mortgage/construction loan financings and other capital alternatives in a manner consistent with its intention to operate with a conservative debt structure.
 
Since the completion of the Company’s IPO in 1991, the Company has utilized the public debt and equity markets as its principal source of capital for its expansion needs. Since the IPO, the Company has completed additional offerings of its public unsecured debt and equity, raising in the aggregate over $4.2 billion for the purposes of, among other things, repaying indebtedness, acquiring interests in neighborhood and community shopping centers, funding ground-up development projects, expanding and improving properties in the portfolio and other investments.
 
The Company has an $850.0 million unsecured revolving credit facility, which is scheduled to expire in July 2008.  This credit facility has made available funds to both finance the purchase of properties and other investments and meet any short-term working capital requirements.  As of December 31, 2005, there was $200.0 million outstanding under this credit facility.
 
During September 2004, the Company entered into a three-year Canadian denominated (“CAD”) $150.0 million unsecured credit facility with a group of banks.  This facility bears interest at the CDOR Rate, as defined, plus 0.50%, and is scheduled to expire in September 2007.  During March 2005, this facility was increased to CAD $250.0 million and the scheduled maturity date was extended to March 2008.  During January 2006, the facility was further amended to reduce the borrowing spread to 0.45% and to modify the covenant package to conform to the Company’s $850.0 million U.S. Credit Facility.  Proceeds from this facility will be used for general corporate purposes including the funding of Canadian denominated investments.  As of December 31, 2005, there was CAD $110.0 million (approximately USD $94.7 million) outstanding under this credit facility.
 
During May 2005, the Company entered into a three-year Mexican Peso denominated (“MXP”) 500.0 million unsecured revolving credit facility.  This facility bears interest at the TIIE Rate, as defined, plus 1.00% and is scheduled to expire in May 2008.  Proceeds from this facility will be used to fund peso denominated investments.  As of December 31, 2005, there was MXP 500.0 million (approximately USD $46.7 million) outstanding under this facility.
 
The Company has a MTN program pursuant to which it may, from time-to-time, offer for sale its senior unsecured debt for any general corporate purposes, including (i) funding specific liquidity requirements in its business, including property acquisitions, development and redevelopment costs and (ii) managing the Company’s debt maturities. As of December 31, 2005, the Company had $250.0 million available for issuance under the MTN program.  (See Note 11 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.)
 
In addition to the public equity and debt markets as capital sources, the Company may, from time-to-time, obtain mortgage financing on selected properties and construction loans to partially fund the capital needs of KDI.  As of December 31, 2005, the Company had over 380 unencumbered property interests in its portfolio.
 
During July 2005, the Company filed a shelf registration statement on Form S-3 for up to $1.0 billion of debt securities, preferred stock, depositary shares, common stock and common stock warrants.  As of December 31, 2005, the Company had $750.0 million available for issuance under this shelf registration statement.
 
In connection with its intention to continue to qualify as a REIT for federal income tax purposes, the Company expects to continue paying regular dividends to its stockholders.  These dividends will be paid from operating cash flows, which are expected to increase due to property acquisitions, growth in operating income in the existing portfolio and from other investments.  Since cash used to pay dividends reduces amounts available for capital investment, the Company generally intends to maintain a conservative dividend payout ratio, reserving such amounts as it considers necessary for the expansion and renovation
 
48
 
of shopping centers in its portfolio, debt reduction, the acquisition of interests in new properties and other investments as suitable opportunities arise and such other factors as the Board of Directors considers appropriate.  Cash dividends paid increased to $293.3 million in 2005, compared to $265.3 million in 2004 and $246.3 million in 2003.
 
Although the Company receives substantially all of its rental payments on a monthly basis, it generally intends to continue paying dividends quarterly.  Amounts accumulated in advance of each quarterly distribution will be invested by the Company in short-term money market or other suitable instruments.
 
Contractual Obligations and Other Commitments
 
The Company has debt obligations relating to its revolving credit facilities, MTNs, senior notes, mortgages and construction loans with maturities ranging from less than one year to 29 years.  As of December 31, 2005, the Company’s total debt had a weighted average term to maturity of approximately 4.9 years.  In addition, the Company has non-cancelable operating leases pertaining to its shopping center portfolio.  As of December 31, 2005, the Company has 60 shopping center properties that are subject to long-term ground leases where a third party owns and has leased the underlying land to the Company to construct and/or operate a shopping center.  In addition, the Company has 22 non-cancelable operating leases pertaining to its retail store lease portfolio.  The following table summarizes the Company’s debt maturities and obligations under non-cancelable operating leases as of December 31, 2005 (in millions):
 
 
 
2006
 
2007
 
2008
 
2009
 
2010
 
Thereafter
 
Total
 
 
 
 
 
 
 
 
 
 
Long-Term Debt
 
$
286.8
 
$
290.3
 
$
555.3
 
$
201.9
 
$
198.8
 
$
1,158.1
 
$
2,691.2
 
Operating Leases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ground Leases
 
$
11.3
 
$
10.6
 
$
10.5
 
$
10.0
 
$
8.3
 
$
140.8
 
$
191.5
 
Retail Store Leases
 
$
5.2
 
$
4.4
 
$
3.3
 
$
2.4
 
$
2.0
 
$
2.0
 
$
19.3
 
 
The Company has $185.0 million of medium term notes, $14.1 million of mortgage debt and $87.7 million of construction loans maturing in 2006.  The Company anticipates satisfying these maturities with a combination of operating cash flows, its unsecured revolving credit facilities, new debt issuances and the sale of completed ground-up development projects.
 
The Company has issued letters of credit in connection with completion and repayment guarantees for construction loans encumbering certain of the Company’s ground-up development projects, and guaranty of payment related to the Company’s insurance program. These letters of credit aggregate approximately $34.8 million.
 
Additionally, the RioCan Venture, an entity in which the Company holds a 50% non-controlling interest, has a CAD $7.0 million (approximately USD $6.0 million) letter of credit facility.  This facility is jointly guaranteed by RioCan and the Company and had approximately CAD $4.6 million (approximately USD $4.0 million) outstanding as of December 31, 2005, relating to various development projects.  In addition to the letter of credit facility, various additional Canadian development projects in which the Company holds interests ranging from 33 1/3% to 50% have letters of credit issued aggregating approximately CAD $3.5 million (approximately USD $3.0 million) at December 31, 2005.
 
During 2005, a joint venture entity in which the Company has a non-controlling interest obtained a CAD $22.5 million credit facility to finance the construction of a 0.1 million square foot shopping center property located in Kamloops, B.C.  This facility bears interest at Royal Bank Prime Rate (“RBP”) plus 0.5% per annum and is scheduled to mature in May 2007.  The Company and its partner in this entity each have a limited and several guarantee of CAD $7.5 million on this facility.  As of December 31, 2005, there was no outstanding balance on this facility.
 
During 2005, the Company obtained a term loan and construction financing on two ground-up development projects for an aggregate net loan commitment amount of up to $50.5 million of which approximately $22.4 million was outstanding at December 31, 2005.  As of December 31, 2005, the Company had 15 construction loans with total commitments of up to $343.5 million of which $228.5 million had been funded to the Company.  These loans had maturities ranging from 4 months to 31 months and interest rates ranging from 6.04% to 6.64% at December 31, 2005.
 
Off-Balance Sheet Arrangements
 
          Ground-Up Development Joint Ventures
 
49
 
At December 31, 2005, the Company has three ground-up development projects through unconsolidated joint ventures in which the Company has 50% non-controlling interests.  The projects are financed with individual non-recourse construction loans with total aggregate loan commitments of up to $219.6 million of which $58.8 million has been funded.  These loans have variable interest rates ranging from 4.89% to 8.25% at December 31, 2005 and maturities ranging from 4 months to 18 months. 
 
          Unconsolidated Real Estate Joint Ventures
 
The Company has investments in various unconsolidated real estate joint ventures with varying structures.  These investments include the Company’s 43.3% non-controlling interest in KIR, the Company’s 50% non-controlling interest in the RioCan Venture, the Company’s 20% non-controlling interest in KROP, the Company’s 15% non-controlling interest in Price Legacy and varying non-controlling interests in other real estate joint ventures. These joint ventures operate either shopping center properties or are established for development projects.  Such arrangements are generally with third-party institutional investors, local developers and individuals. The properties owned by the joint ventures are primarily financed with individual non-recourse mortgage loans.  Non-recourse mortgage debt is generally defined as debt whereby the lenders’ sole recourse with respect to borrower defaults is limited to the value of the property collateralized by the mortgage. The lender generally does not have recourse against any other assets owned by the borrower or any of the constituent members of the borrower, except for certain specified exceptions listed in the particular loan documents.
 
The KIR joint venture was established for the purpose of investing in high quality real estate properties financed primarily with individual non-recourse mortgages.  The Company believes that these properties are appropriate for financing with greater leverage than the Company traditionally uses.  As of December 31, 2005, KIR had interests in 68 properties comprising 14.2 million square feet of GLA.  As of December 31, 2005, KIR had individual non-recourse mortgage loans of approximately $1.1 billion on 65 of these properties.  These non-recourse mortgage loans have maturities ranging from less than one year to 14 years and rates ranging from 4.99% to 8.52%.  As of December 31, 2005, the Company’s pro-rata share of non-recourse mortgages relating to the KIR joint venture was approximately $485.4 million.  (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.)
 
The RioCan Venture was established with RioCan Real Estate Investment Trust to acquire properties and development projects in Canada.  As of December 31, 2005, the RioCan Venture consisted of 34 shopping center properties and one development project with approximately 8.1 million square feet of GLA.  As of December 31, 2005, the RioCan Venture had individual, non-recourse mortgage loans on 33 of these properties and a construction loan on its development property aggregating approximately CAD $706.3 million (USD $607.8 million).  These loans have maturities ranging from less than one year to 28 years and rates ranging from 3.91% to 9.05%.  As of December 31, 2005, the Company’s pro-rata share of these non-recourse loans relating to the RioCan Venture was approximately CAD $349.2 million (USD $300.5 million). (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.)
 
The Kimco Retail Opportunity Portfolio (“KROP”), a joint venture with GE Capital Real Estate (“GECRE”), was established to acquire high-growth potential retail properties in the United States.  As of December 31, 2005, KROP consisted of 38 shopping center properties with approximately 5.6 million square feet of GLA.  As of December 31, 2005, KROP had non-recourse mortgage loans totaling $481.9 million, with fixed rates ranging from 4.25% to 8.64% and variable rates ranging from LIBOR plus 1.3% to LIBOR plus 2.2%.  KROP has entered into a series of interest rate cap agreements to mitigate the impact of changes in interest rates on its variable-rate mortgage agreements.  Such mortgage debt is collateralized by the individual shopping center property and is payable in monthly installments of principal and interest.  At December 31, 2005, the weighted average interest rate for all mortgage debt outstanding was 6.09% per annum. As of December 31, 2005, the Company’s pro-rata share of non-recourse mortgage loans relating to the KROP joint venture was approximately $96.4 million.  Additionally, the Company and GECRE may provide interim financing.  All such financings bear interest at rates ranging from LIBOR plus 4.0% to LIBOR plus 5.25% and have maturities of less than a year.  As of December 31, 2005, KROP had no outstanding short term interim financing due to the Company or GECRE.  (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.)
 
During December 2004, the Company acquired the Price Legacy Corporation through a newly formed joint venture, PL Retail LLC (“PL Retail”), in which the Company has a non-controlling 15% interest.  In connection with this transaction, the joint venture acquired 33 operating properties aggregating approximately 7.6 million square feet of GLA located
 
50
 
in ten states.  During the year ended December 31, 2005, PL Retail disposed of nine operating properties, in separate transactions, for an aggregate sale price of approximately $21.8 million.  As of December 31, 2005, PL Retail consisted of 25 operating properties aggregating approximately 6.8 million square feet of GLA.  As of December 31, 2005, PL Retail had approximately $777.3 million outstanding in non-recourse mortgage debt, of which approximately $507.2 million had fixed rates ranging from 4.66% to 9.00% and approximately $270.1 had variable rates ranging from 5.74% to 9.59%.  The fixed-rate loans have maturities ranging from three to 11 years and the variable-rate loans have maturities ranging from one to three years.  Additionally, the Company had provided PL Retail approximately $30.6 million of secured mezzanine financing.  This interest only loan bears interest at a fixed rate of 7.5% and matures in December 2006.  Proceeds from property sales during 2005 of approximately $21.8 million were used to partially repay the mezzanine financing that was provided by the Company.  The Company also provided PL Retail a secured short-term promissory note of approximately $8.2 million.  This interest only note bore interest at LIBOR plus 4.5% and was scheduled to mature in June 2005. During 2005, this note was amended to bear interest at LIBOR plus 6% and is now payable on demand.  As of December 31, 2005, PL Retail had approximately $8.9 million outstanding on the mezzanine financing and approximately $8.2 million outstanding on the promissory note. As of December 31, 2005, the Company’s pro-rata share of non-recourse mortgages relating to PL Retail was approximately $116.6 million.  (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.)
 
The Company has various other unconsolidated real estate joint ventures with varying structures.  As of December 31, 2005, these unconsolidated joint ventures had individual non-recourse mortgage loans aggregating approximately $1.5 billion.  The Company’s pro-rata share of these non-recourse mortgages was approximately $520.6 million.  (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.)
 
          Other Real Estate Investments
 
During November 2002, the Company, through its taxable REIT subsidiary, together with Prometheus Southeast Retail Trust, completed the merger and privatization of Konover Property Trust, which has been renamed Kimsouth Realty, Inc., (“Kimsouth”).  The Company acquired 44.5% of the common stock of Kimsouth, which consisted primarily of 38 retail shopping center properties comprising approximately 4.6 million square feet of GLA.  Total acquisition value was approximately $280.9 million including approximately $216.2 million in mortgage debt.  The Company’s investment strategy with respect to Kimsouth includes re-tenanting, repositioning and disposition of the properties.  As a result of this strategy, Kimsouth has sold 33 properties as of December 31, 2005.  As of December 31, 2005, the Kimsouth portfolio was comprised of five properties, including the remaining office component of an operating property sold in 2004, totaling 1.2 million square feet of GLA with non-recourse mortgage debt of approximately $29.4 million encumbering the properties. All mortgages payable are collateralized by certain properties and are due in monthly installments.  As of December 31, 2005, interest rates ranged from 6.06% to 9.22% and the weighted-average interest rate for all mortgage debt outstanding was 8.35% per annum.  As of December 31, 2005, the Company’s pro-rata share of non-recourse mortgage loans relating to the Kimsouth portfolio was approximately $13.1 million.
 
During June 2002, the Company acquired a 90% equity participation interest in an existing leveraged lease of 30 properties.  The properties are leased under a long-term bond-type net lease whose primary term expires in 2016, with the lessee having certain renewal option rights.  The Company’s cash equity investment was approximately $4.0 million.  This equity investment is reported as a net investment in leveraged lease in accordance with SFAS No. 13, Accounting for Leases (as amended).  The net investment in leveraged lease reflects the original cash investment adjusted by remaining net rentals, estimated unguaranteed residual value, unearned and deferred income, and deferred taxes relating to the investment.
 
As of December 31, 2005, 14 of these properties were sold, whereby the proceeds from the sales were used to pay down the mortgage debt by approximately $24.2 million.  As of December 31, 2005, the remaining 16 properties were encumbered by third-party non-recourse debt of approximately $58.7 million that is scheduled to fully amortize during the primary term of the lease from a portion of the periodic net rents receivable under the net lease. As an equity participant in the leveraged lease, the Company has no recourse obligation for principal or interest payments on the debt, which is collateralized by a first mortgage lien on the properties and collateral assignment of the lease.  Accordingly, this debt has been offset against the related net rental receivable under the lease.
 
The Company maintains a preferred equity program, which provides capital to developers and owners of shopping centers. The Company accounts for its investments in preferred equity
 
51
 
investments under the equity method of accounting. As of December 31, 2005, the Company’s invested capital in its preferred equity investments approximated $225.9 million relating to 133 real estate properties. As of December 31, 2005, these preferred equity investment properties had individual non-recourse mortgage loans aggregating approximately $703.3 million. Due to the Company’s preferred position in these investments, the Company’s pro-rata share of each investment is subject to fluctuation and is dependent upon property cash flows. The Company’s maximum exposure to losses associated with its preferred equity investments is limited to its invested capital.
 
Effects of Inflation
 
Many of the Company’s leases contain provisions designed to mitigate the adverse impact of inflation.  Such provisions include clauses enabling the Company to receive payment of additional rent calculated as a percentage of tenants’ gross sales above pre-determined thresholds, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. Such escalation clauses often include increases based upon changes in the consumer price index or similar inflation indices.  In addition, many of the Company’s leases are for terms of less than 10 years, which permits the Company to seek to increase rents to market rates upon renewal. Most of the Company’s leases require the tenant to pay an allocable share of operating expenses, including common area maintenance costs, real estate taxes and insurance, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation.  The Company periodically evaluates its exposure to short-term interest rates and foreign currency exchange rates and will, from time-to-time, enter into interest rate protection agreements and/or foreign currency hedge agreements which mitigate, but do not eliminate, the effect of changes in interest rates on its floating-rate debt and fluctuations in foreign currency exchange rates.
 
New Accounting Pronouncements
 
In December 2004, the FASB issued SFAS No. 123, (revised 2004) Share-Based Payment (“SFAS No. 123(R)”), which supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. SFAS No. 123(R) established standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services.  It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.  This Statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  SFAS No. 123(R) is effective for fiscal years beginning after December 15, 2005.  The impact of adopting this statement is not expected to have a material impact on the Company’s financial position or results of operations.
 
In December 2004, the FASB issued Statement No. 153, Exchange of Non-monetary Assets - an amendment of APB Opinion No. 29 (“SFAS No. 153”).  The guidance in APB Opinion No. 29, Accounting for Non-monetary Transactions, is based on the principle that exchanges of non-monetary assets should be measured based on the fair value of the assets exchanged.  The guidance in that Opinion, however, included certain exceptions to that principle.  This Statement amends Opinion No. 29 to eliminate the exception for non-monetary assets that do not have commercial substance.  A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005.  The impact of adopting this statement did not have a material impact on the Company’s financial position or results of operations.
 
In March 2005, the FASB issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (“FIN 47”).  FIN 47 requires an entity to recognize a liability for a conditional asset retirement obligation when incurred if the liability can be reasonably estimated.  FIN 47 clarifies that the term “Conditional Asset Retirement Obligation” refers to a legal obligation (pursuant to existing laws or by contract) to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity.  FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation.  FIN 47 was effective no later than fiscal years ended after December 15, 2005.  The Company adopted FIN 47 as required effective December 31, 2005, and the initial application of FIN 47 did not have a material impact on the Company’s financial position or results of operations.
 
In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections (“SFAS No. 154”), which replaces Accounting Principle Board Opinion No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements.
 
52
 
SFAS No. 154 changes the requirements for the accounting for and reporting of a change in accounting principles.  It requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change.  This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.
 
In September 2005, the EITF issued Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership When the Investor is the Sole General Partner and the Limited Partners Have Certain Rights, (“EITF 04-5”).  At issue is what rights held by the limited partner(s) preclude consolidation in circumstances in which the sole general partner would consolidate the limited partnership in accordance with U.S. generally accepted accounting principles.  The assessment of limited partners’ rights and their impact on the presumption of control of the limited partnership by the sole general partner should be made when an investor becomes the sole general partner and should be reassessed if (i) there is a change to the terms or in the exercisability of the rights of the limited partners, (ii) the sole general partner increases or decreases its ownership of limited partnership interests, or (iii) there is an increase or decrease in the number of outstanding limited partnership interests.  This issue is effective no later than for fiscal years beginning after December 15, 2005, and as of June 29, 2005, for new or modified arrangements.  The impact of adopting EITF 04-5 is not expected to have a material impact on the Company’s financial position or results of operations.
 
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
 
The Company’s primary market risk exposure is interest rate risk.  The following table presents the Company’s aggregate fixed rate and variable rate domestic and foreign debt obligations outstanding as of December 31, 2005, with corresponding weighted-average interest rates sorted by maturity date.  The information is presented in U.S. dollar equivalents, which is the Company’s reporting currency.  The instruments actual cash flows are denominated in U.S. dollars, Canadian dollars and Mexican pesos, as indicated by geographic region ($ in USD equivalent in millions).
 
 
 
2006
 
2007
 
2008
 
2009
 
2010
 
2011+
 
Total
 
Fair
Value
 
 
 
 
 
 
 
 
 
 
 
Domestic
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed Rate
 
$
9.7
 
$
—
 
$
59.4
 
$
21.9
 
$
19.7
 
$
191.1
 
$
301.8
 
$
317.4
 
Average Interest Rate
 
 
9.08
%
 
—
 
 
7.13
%
 
7.88
%
 
8.47
%
 
7.41
%
 
7.52
%
 
 
 
Variable Rate
 
$
92.1
 
$
95.3
 
$
54.5
 
$
—
 
$
—
 
$
—
 
$
241.9
 
$
241.9
 
Average Interest Rate
 
 
6.40
%
 
6.20
%
 
6.11
%
 
—
 
 
—
 
 
—
 
 
6.26
%
 
 
 
Unsecured Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed Rate
 
$
85.0
 
$
195.0
 
$
100.0
 
$
180.0
 
$
50.0
 
$
967.0
 
$
1,577.0
 
$
1,640.0
 
Average Interest Rate
 
 
7.30
%
 
7.14
%
 
3.95
%
 
6.98
%
 
4.62
%
 
5.30
%
 
5.72
%
 
 
 
Variable Rate
 
$
100.0
 
$
—
 
$
200.0
 
$
—
 
$
—
 
$
—
 
$
300.0
 
$
300.0
 
Average Interest Rate
 
 
4.45
%
 
—
 
 
4.68
%
 
—
 
 
—
 
 
—
 
 
4.60
%
 
 
 
 
 
 
2006
 
2007
 
2008
 
2009
 
2010
 
2011+
 
Total
 
Fair
Value
 
 
 
 
 
 
 
 
 
 
 
Canadian
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unsecured Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed Rate
 
$
—
 
$
—
 
$
—
 
$
—
 
$
129.1
 
$
—
 
$
129.1
 
$
126.7
 
Average Interest Rate
 
 
—
 
 
—
 
 
—
 
 
—
 
 
4.45
%
 
—
 
 
4.45
%
 
 
 
Variable Rate
 
$
—
 
$
—
 
$
94.7
 
$
—
 
$
—
 
$
—
 
$
94.7
 
$
94.7
 
Average Interest Rate
 
 
—
 
 
—
 
 
3.78
%
 
—
 
 
—
 
 
—
 
 
3.78
%
 
 
 
Mexican
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unsecured Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable Rate
 
$
—
 
$
—
 
$
46.7
 
$
—
 
$
—
 
$
—
 
$
46.7
 
$
46.7
 
Average Interest Rate
 
 
—
 
 
—
 
 
9.66
%
 
—
 
 
—
 
 
—
 
 
9.66
%
 
 
 
 
53
 
Based on the Company’s variable-rate debt balances, interest expense would have increased by approximately $6.8 million in 2005 if short-term interest rates were 1% higher.
 
As of December 31, 2005, the Company has Canadian investments totaling CAD $311.8 million (approximately USD $268.3 million) comprised of a real estate joint venture investments and marketable securities.  In addition, the Company has Mexican real estate investments of MXN 2.3 billion (approximately USD $215.4 million).  The foreign currency exchange risk has been partially mitigated through the use of local currency denominated debt, foreign currency forward contracts (the “Forward Contracts”) and a cross currency swap (the “CC Swap”) with major financial institutions.  The Company is exposed to credit risk in the event of non-performance by the counter-party to the Forward Contracts and the CC Swap. The Company believes it mitigates its credit risk by entering into the Forward Contracts and the CC Swap with major financial institutions.
 
The Company has not entered, and does not plan to enter, into any derivative financial instruments for trading or speculative purposes. As of December 31, 2005, the Company had no other material exposure to market risk.
 
Item 8.     Financial Statements and Supplementary Data
 
The response to this Item 8 is included as a separate section of this annual report on Form 10-K.
 
Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
None.
 
Item 9A.     Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures
 
The Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.  Based on such evaluation, the Company’s chief executive officer and chief financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.
 
Changes in Internal Control over Financial Reporting
 
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth fiscal quarter to which this report relates that have materially affected, or are reasonable likely to materially affect, the Company’s internal control over financial reporting.
 
Management’s Report on Internal Control Over Financial Reporting
 
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control–Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2005.
 
Our management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2005 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.
 
Item 9B.     Other Information
 
None.
 
54
 
PART III
 
Item 10.     Directors and Executive Officers of the Registrant
 
Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 18, 2006.
 
Information with respect to the Executive Officers of the Registrant follows Part I, Item 4 of this annual report on Form 10-K.
 
On May 27, 2005, the Company’s Chief Executive Officer submitted to the New York Stock Exchange (the “NYSE”) the annual certification required by Section 303A.12 (a) of the NYSE Company Manual.  In addition, the Company has filed with the Securities and Exchange Commission as exhibits to this Form 10-K the certifications, required pursuant to Section 302 of the Sarbanes-Oxley Act, of its Chief Executive Officer and Chief Financial Officer relating to the quality of its public disclosure.
 
Item 11.     Executive Compensation
 
Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 18, 2006.
 
Item 12.     Security Ownership of Certain Beneficial Owners and Management
 
Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 18, 2006.
 
Item 13.     Certain Relationships and Related Transactions
 
Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 18, 2006.
 
Item 14.     Principal Accountant Fees and Services
 
Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 18, 2006.
 
55
 
PART IV
 
Item 15.     Exhibits, Financial Statements, Schedules and Reports on Form 8-K
 
 
 
 
 
 
 
Form 10-K
Report
Page
 
 
 
 
 
 
(a)
1.
Financial Statements -
 
 
 
 
 
 
The following consolidated financial information is included as a separate section of this annual report on Form 10-K.
 
 
 
 
 
 
 
 
 
 
 
Report of Independent Registered Public Accounting Firm
 
 64
 
 
 
 
 
 
 
 
 
Consolidated Financial Statements
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Balance Sheets as of December 31, 2005 and 2004
 
 66
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Income for the years ended December 31, 2005, 2004 and 2003
 
 67
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Comprehensive Income for the years ended December 31, 2005, 2004 and 2003
 
 68
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Stockholders’ Equity  for the years ended December 31, 2005, 2004 and 2003
 
 69
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003
 
 70
 
 
 
 
 
 
 
 
 
 
Notes to Consolidated Financial Statements
 
 71
 
 
 
 
 
 
 
 
2.
Financial Statement Schedules -
 
 
 
 
 
 
 
 
 
 
 
Schedule II - Valuation and Qualifying Accounts
 
110
 
 
 
 
 
 
 
 
 
Schedule III - Real Estate and Accumulated Depreciation
 
111
 
 
 
 
 
 
 
 
 
All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule.
 
 
 
 
 
 
 
 
 
 
3.
Exhibits
 
 
 
 
 
 
 
 
 
 
 
The exhibits listed on the accompanying Index to Exhibits are filed as part of this report.
 
 57
 
56
 
INDEX TO EXHIBITS
 
Exhibits
 
 
 
Form 10-K
Page
 
 
 
2.1
--
Form of Plan of Reorganization of Kimco Realty Corporation [Incorporated by reference to Exhibit 2.1 to the  Company’s Registration Statement on Form S-11 No. 33-42588].
 
 
 
 
 
 
 
3.1
--
Articles of Amendment and Restatement of the Company, dated August 4, 1994 [Incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on  Form 10-K for the year ended December 31, 1994].
 
 
 
 
 
 
 
3.2
--
By-laws of the Company dated February 6, 2002, as amended [Incorporated by reference to Exhibit 3.2 to the 2001 Form 10-K].
 
 
 
 
 
 
 
3.3
--
By-laws of the Company dated February 1, 2005, as amended [Incorporated by reference to Exhibit 3(ii) to the Company’s Current Report on Form 8-K dated February 1, 2005].
 
 
 
 
 
 
 
3.4
--
Articles Supplementary relating to the 8 1/2% Class B  Cumulative Redeemable Preferred Stock, par value $1.00 per share, of the Company, dated July 25, 1995. [Incorporated by reference to Exhibit 3.3 to the Company’s  Annual Report on Form 10-K for the year ended December 31, 1995 (file #1-10899) (the “1995 Form 10-K”)].
 
 
 
 
 
 
 
3.5
--
Articles Supplementary relating to the 8 3/8% Class C Cumulative Redeemable Preferred Stock, par value $1.00 per share, of the Company, dated April 9, 1996  [Incorporated by reference to Exhibit 3.4 to the Company’s  Annual Report on Form 10-K for the year ended  December 31, 1996].
 
 
 
 
 
 
 
3.6
--
Articles Supplementary relating to the 6.65% Class F Cumulative Redeemable Preferred Stock, par value $1.00 per share, of the Company, dated May 7, 2003 [Incorporated by reference to the Company’s filing on Form 8-A  dated June 3, 2003].
 
 
 
 
 
 
 
4.1
--
Agreement of the Company pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K [Incorporated by reference to  Exhibit 4.1 to Amendment No. 3 to the Company’s  Registration Statement on Form S-11 No. 33-42588].
 
 
 
 
 
 
 
4.2
--
Certificate of Designations [Incorporated by reference to  Exhibit 4(d) to Amendment No. 1 to the Registration Statement on Form S-3 dated September 10, 1993 (the  “Registration Statement”, Commission File No. 33-67552)].
 
 
 
 
 
 
 
4.3
--
Indenture dated September 1, 1993, between Kimco Realty  Corporation and Bank of New York (as successor to IBJ Schroder Bank and Trust Company) [Incorporated by reference to Exhibit 4(a) to the Registration Statement].
 
 
 
 
 
 
 
4.4
--
First Supplemental Indenture, dated as of August 4, 1994. [Incorporated by reference to Exhibit 4.6 to the 1995 Form 10-K.]
 
 
 
 
 
 
 
4.5
--
Second Supplemental Indenture, dated as of April 7, 1995 [Incorporated by reference to Exhibit 4(a) to the Company’s Current Report on Form 8-K dated April 7, 1995 (the  “April 1995 8-K”)].
 
 
 
57
 
INDEX TO EXHIBITS (continued)
 
Exhibits
 
 
 
Form 10-K
Page
 
 
 
4.6
--
Form of Medium-Term Note (Fixed Rate) [Incorporated by reference to Exhibit 4.6 to the 2001 Form 10-K].
 
 
 
 
 
 
 
4.7
--
Form of Medium-Term Note (Floating Rate) [Incorporated by reference to Exhibit 4.7 to the 2001 Form 10-K].
 
 
 
 
 
 
 
4.8
---
Indenture dated April 1, 2005, between Kimco North Trust III, Kimco Realty Corporation, as Guarantor and BNY Trust Company Of Canada, as Trustee [Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated April 21, 2005].
 
 
 
 
 
 
 
10.1
--
Management Agreement between the Company and  KC Holdings, Inc. [Incorporated by reference to  Exhibit 10.2 to the Company’s Registration Statement  on Form S-11 No. 33-47915].
 
 
 
 
 
 
 
10.2
--
Amended and Restated Stock Option Plan [Incorporated by  reference to Exhibit 10.3 to the 1995 Form 10-K].
 
 
 
 
 
 
 
10.3
--
Employment Agreement between Kimco Realty Corporation and Michael J. Flynn, dated November 1, 1998 [Incorporated by reference to Exhibit 10.4 to the 1998 Form 10-K].
 
 
 
 
 
 
 
10.4
--
Restricted Equity Agreement, Non-Qualified and Incentive Stock Option Agreement, and Price Condition Non- Qualified and Incentive Stock Option Agreement between Kimco Realty Corporation and Michael J. Flynn, each dated November 1, 1995 [Incorporated by reference to Exhibit 10.5 to the 1995 Form 10-K].
 
 
 
 
 
 
 
10.5
--
Employment Agreement between Kimco Realty Corporation and Michael J. Flynn, dated July 21, 2004 [Incorporated by  reference to Exhibit 10.14 to the Company’s Form 10-Q filed on November 5, 2004].
 
 
 
 
 
 
 
10.6
--
Employment Agreement between Kimco Realty Corporation and Michael V. Pappagallo, dated January 1, 2002 [Incorporated by reference to Exhibit 10.6 to the 2001 Form 10-K].
 
 
 
 
 
 
 
10.7
--
Employment Agreement between Kimco Realty Corporation and Jerald Friedman, dated January 13, 1998  [Incorporated by Reference to Exhibit 10.10 to the  Company’s and the Price REIT, Inc.’s Joint Proxy  Statement/Prospectus on Form S-4 No. 333-52667].
 
 
 
 
 
 
 
10.8
--
First Amendment to Amended and Restated Executive Employment Agreement between Kimco Realty Corporation and Jerald Friedman, dated January 1, 2002 [Incorporated by  reference to Exhibit 10.8 to the 2001 Form 10-K].
 
 
 
 
 
 
 
10.9
--
The 1998 Equity Participation Plan [Incorporated by reference to the Company’s and The Price REIT, Inc.’s Joint Proxy/ Prospectus on Form S-4 No. 333-52667].
 
 
 
 
 
 
 
10.10
--
Employment Agreement between Kimco Realty Corporation and David B. Henry – the Company commenced a five-year  employment agreement with Mr. Henry pursuant to which Mr. Henry will serve as Chief Investment Officer and has been nominated as Vice Chairman of the Board of Directors  [Incorporated by reference to Exhibit 10.11 to the Company’s Form 10-Q filed on May 10, 2001].
 
 
 
 
 
 
 
10.11
--
Employment Agreement between Kimco Realty Corporation and  David B. Henry, dated July 26, 2004 [Incorporated by  reference to Exhibit 10.14 to the Company’s Form 10-Q filed on November 5, 2004].
 
 
 
58
 
INDEX TO EXHIBITS (continued)
 
Exhibits
 
 
 
Form 10-K
Page
 
 
 
10.12
--
$500,000,000 Credit Agreement dated as of June 3, 2003, among Kimco Realty Corporation, the Several Lenders from Time to Time Parties Hereto, JPMorgan Chase Bank as Issuing Lender, Bank One, NA, Wachovia Bank, National Association as Syndication Agents, UBS AG, Cayman Island Branch, The Bank of Nova Scotia, New York Agency as Documentation Agents, The Bank of New York, Eurohypo AG, New York Branch, Keybank National Association, Merrill Lynch Bank, USA, Suntrust as Co-Agents and JPMorgan Chase As Administrative Agent [Incorporated by reference to  Exhibit 10.11 to the Company’s Form 10-Q filed on August 11, 2003].
 
 
 
 
 
 
 
10.13
--
$400,000,000 Credit Agreement dated as of October 1, 2003, among Kimco Realty Corporation, the Several Lenders from Time to Time Parties Hereto, Wachovia Bank, National Association and the Bank of Nova Scotia, as Syndication Agents, Keybank National Association as Documentation Agent, Bank One, NA as Administrative Agent, Banc One Capital Markets, Inc. and Scotia Capital as Co-Bookrunners and Co-Lead Arrangers [Incorporated by reference to  Exhibit 10.12 to the Company’s Form 10-Q filed on November 10, 2003].
 
 
 
 
 
 
 
10.14
--
CAD $150,000,000 Credit Agreement dated September 21, 2004, among Kimco North Trust I, North Trust II, North Trust III, North Trust V, North Trust VI, Kimco North Loan Trust IV, Kimco Realty Corporation, the Several Lenders from Time to Time Parties Hereto, Royal Bank of Canada, as Issuing Lender and Administrative Agent, The Bank of Nova Scotia and Bank of America, N.A., as Syndication Agents, Canadian Imperial Bank of Commerce as Documentation Agent and RBC Capital Markets, as Bookrunner and Lead Arranger [Incorporated by reference to Exhibit 10.14 to  the Company’s Current Report on Form 8-K dated  September 21, 2004].
 
 
 
 
 
 
 
10.17
--
Amendment and Restated 1998 Equity Participation Plan [Incorporated by reference to Exhibit 10.17 to the Company’s 2004 From 10-K].
 
 
 
 
 
 
 
10.18
--
CAD $250,000,000 Amended and Restated Credit Facility dated March 31, 2005, with Royal Bank of Canada, as Issuing Lender and Administrative Agent and various lenders [Incorporated by Reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 31, 2005].
 
 
 
 
 
 
 
10.19
--
$850,000,000 Amended and Restated Unsecured Revolving Credit Facility dated July 26, 2005, with JP Morgan Chase Bank NA, as Issuing Lender and Administrative Agent and various lenders [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 26, 2005].
 
 
 
 
 
 
 
10.20
--
Employment Agreement between Kimco Realty Corporation and Jerald Friedman, dated September 21, 2005 [Incorporated by Reference to Exhibit 10.16 to the Company’s Form 10-Q filed  On November 4, 2005.
 
 
 
 
 
 
 
*10.21
--
CAD $250,000,000 Amended and Restated Credit Facility dated  January 25, 2006, with Royal Bank of Canada, as Issuing Lender and Administrative Agent and various lenders.
 
119
 
 
 
 
 
*12.1
--
Computation of Ratio of Earnings to Fixed Charges
 
217
 
 
 
 
 
*12.2
--
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
 
218
 
59
 
INDEX TO EXHIBITS (continued)
 
Exhibits
 
 
 
Form 10-K
Page
 
 
 
*21.1
--
Subsidiaries of the Company
 
219
 
 
 
 
 
*23.1
--
Consent of PricewaterhouseCoopers LLP
 
229
 
 
 
 
 
*31.1
--
Certification of the Company’s Chief Executive Officer, Milton Cooper, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
230
 
 
 
 
 
*31.2
--
Certification of the Company’s Chief Financial Officer, Michael V. Pappagallo, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
231
 
 
 
 
 
*32.1
--
Certification of the Company’s Chief Executive Officer Milton Cooper, and the Company’s Chief Financial Officer Michael V. Pappagallo, pursuant to section 906 of the Sarbanes-Oxley Act of 2002
 
232
 
*
Filed herewith.
 
60
 
SIGNATURES
 
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
KIMCO REALTY CORPORATION
 
                    (Registrant)
 
 
 
 
 
By:
/s/ Milton Cooper
 
 
 
 
Milton Cooper
 
 
Chief Executive Officer
 
 
 
Dated:  March 6, 2006
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
Signature
 
Title
 
Date
 
 

/s/  Martin S. Kimmel
 

Chairman (Emeritus) of the Board of Directors
 

March 6, 2006
 
 
Martin S. Kimmel
 
 
 
 
 
 
 
/s/  Milton Cooper
 
Chairman of the Board of Directors and Chief Executive Officer
 
March 6, 2006
 
 
Milton Cooper
 
 
 
 
 
 
 
/s/  Michael J. Flynn
 
Vice Chairman of the Board of Directors, President and  Chief Operating Officer
 
March 6, 2006
 
 
Michael J. Flynn
 
 
 
 
 
 
 
/s/  David B. Henry
 
Vice Chairman of the Board of Directors and Chief Investment Officer
 
March 6, 2006
 
 
David B. Henry
 
 
 
 
 
 
 
 
/s/  Richard G. Dooley
 
Director
 
March 6, 2006
 
 
Richard G. Dooley
 
 
 
 
 
 
 
/s/  Joe Grills
 
Director
 
March 6, 2006
 
 
Joe Grills
 
 
 
 
 
 
 
/s/  F. Patrick Hughes
 
Director
 
March 6, 2006
 
 
F. Patrick Hughes
 
 
 
 
 
 
 
/s/  Frank Lourenso
 
Director
 
March 6, 2006
 
 
Frank Lourenso
 
 
 
 
 
 
 
/s/  Richard Saltzman
 
Director
 
March 6, 2006
 
 
Richard Saltzman
 
 
 
 
 
 
 
/s/  Michael V. Pappagallo
 
Executive Vice President - Chief Financial Officer
 
March 6, 2006
 
 
Michael V. Pappagallo
 
 
 
 
 
 
 
/s/  Glenn G. Cohen
 
Vice President - Treasurer
 
March 6, 2006
 
 
Glenn G. Cohen
 
 
 
 
 
 
 
/s/  Paul Westbrook
 
Director of Accounting
 
March 6, 2006
 
 
Paul Westbrook
 
 
 
61
 
ANNUAL REPORT ON FORM 10-K
 
ITEM 8, ITEM 15 (a) (1) and (2)
 
INDEX TO FINANCIAL STATEMENTS
 
AND
 
FINANCIAL STATEMENT SCHEDULES
 
 
 
 
Form 10-K
Page
 
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Statement Schedules:
 
 
 
 
62
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and Stockholders
of Kimco Realty Corporation:
 
We have completed integrated audits of Kimco Realty Corporation’s 2005 and 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2005, and an audit of its 2003 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Our opinions, based on our audits, are presented below.
 
Consolidated financial statements and financial statement schedules
 
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of Kimco Realty Corporation and its Subsidiaries (collectively, the “Company”) at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America.  In addition, in our opinion, the financial statement schedules listed in the index appearing under Item 15(a)(2) present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.  These financial statements and financial statement schedules are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits.  We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 
Internal control over financial reporting
 
Also, in our opinion, management’s assessment, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A, that the Company maintained effective internal control over financial reporting as of December 31, 2005 based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria.  Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control – Integrated Framework issued by the COSO.  The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit.  We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.  An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinions.
 
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that
 
63
 
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
/s/ PricewaterhouseCoopers LLP
 
New York, New York
 
March 6, 2006
 
 
64
 
Intentionally left blank.
65
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
 
 
 
December 31,
2005
 
December 31,
2004
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
Real Estate
 
 
 
 
 
 
 
Rental property
 
 
 
 
 
 
 
Land
 
$
686,123
 
$
626,914
 
Building and improvements
 
 
3,263,162
 
 
3,067,254
 
 
 
 
 
 
 
 
3,949,285
 
 
3,694,168
 
Less, accumulated depreciation and amortization
 
 
740,127
 
 
634,642
 
 
 
 
 
 
 
 
3,209,158
 
 
3,059,526
 
Real estate under development
 
 
611,121
 
 
398,054
 
 
 
 
 
Real estate, net
 
 
3,820,279
 
 
3,457,580
 
Investment and advances in real estate joint ventures
 
 
735,648
 
 
595,175
 
Other real estate investments
 
 
283,035
 
 
188,536
 
Mortgages and other financing receivables
 
 
132,675
 
 
140,717
 
Cash and cash equivalents
 
 
76,273
 
 
38,220
 
Marketable securities
 
 
206,452
 
 
123,771
 
Accounts and notes receivable
 
 
64,329
 
 
52,182
 
Deferred charges and prepaid expenses
 
 
84,022
 
 
72,653
 
Other assets
 
 
131,923
 
 
80,763
 
 
 
 
 
 
 
$
5,534,636
 
$
4,749,597
 
 
 
 
 
Liabilities & Stockholders’ Equity:
 
 
 
 
 
 
 
Notes payable
 
$
2,147,405
 
$
1,608,925
 
Mortgages payable
 
 
315,336
 
 
353,071
 
Construction loans payable
 
 
228,455
 
 
156,626
 
Accounts payable and accrued expenses
 
 
119,605
 
 
97,952
 
Dividends payable
 
 
78,168
 
 
71,489
 
Other liabilities
 
 
135,609
 
 
118,243
 
 
 
 
 
 
 
 
3,024,578
 
 
2,406,306
 
 
 
 
 
Minority interests
 
 
122,844
 
 
106,891
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Stockholders’ Equity
 
 
 
 
 
 
 
Preferred stock, $1.00 par value, authorized 3,600,000 shares
 
 
 
 
 
 
 
Class F Preferred Stock, $1.00 par value, authorized 700,000 shares
 
 
 
 
 
 
 
Issued and outstanding 700,000 shares
 
 
700
 
 
700
 
Aggregate liquidation preference $175,000
 
 
 
 
 
 
 
Common stock, $.01 par value, authorized 300,000,000 shares
 
 
 
 
 
 
 
Issued and outstanding 228,059,056 and 224,852,812 shares, respectively
 
 
2,281
 
 
2,249
 
Paid-in capital
 
 
2,255,332
 
 
2,199,419
 
Retained earnings/(cumulative distributions in excess of net income)
 
 
59,855
 
 
(3,749
)
 
 
 
 
 
 
 
2,318,168
 
 
2,198,619
 
Accumulated other comprehensive income
 
 
69,046
 
 
37,781
 
 
 
 
 
 
 
 
2,387,214
 
 
2,236,400
 
 
 
 
 
 
 
$
5,534,636
 
$
4,749,597
 
 
 
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
66
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share information)
 
 
Year Ended December 31,
 
 
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Real estate operations:
 
 
 
 
 
 
 
 
 
 
Revenues from rental property
 
$
522,545
 
$
507,641
 
$
466,225
 
 
 
 
 
 
Rental property expenses:
 
 
 
 
 
 
 
 
 
 
Rent
 
 
10,267
 
 
10,794
 
 
10,603
 
Real estate taxes
 
 
67,022
 
 
65,530
 
 
58,587
 
Operating and maintenance
 
 
60,686
 
 
53,940
 
 
51,145
 
 
 
 
 
 
 
 
 
137,975
 
 
130,264
 
 
120,335
 
 
 
 
 
 
 
 
 
384,570
 
 
377,377
 
 
345,890
 
Mortgage and other financing income
 
 
27,586
 
 
15,032
 
 
18,869
 
Management and other fee income
 
 
30,474
 
 
25,445
 
 
15,315
 
Depreciation and amortization
 
 
(105,942
)
 
(99,616
)
 
(83,212
)
General and administrative expenses
 
 
(56,803
)
 
(44,235
)
 
(38,286
)
Interest, dividends and other investment income
 
 
28,350
 
 
18,702
 
 
19,124
 
Other income/(expense), net
 
 
5,393
 
 
10,124
 
 
(4,125
)
Interest expense
 
 
(127,711
)
 
(107,177
)
 
(102,391
)
Gain on early extinguishment of debt
 
 
—
 
 
—
 
 
2,921
 
 
 
 
 
 
 
 
 
185,917
 
 
195,652
 
 
174,105
 
Provision for income taxes
 
 
(430
)
 
(3,919
)
 
(1,516
)
Income from other real estate investments
 
 
57,943
 
 
30,127
 
 
22,828
 
Equity in income of real estate joint ventures, net
 
 
77,454
 
 
56,385
 
 
42,276
 
Minority interests in income, net
 
 
(12,446
)
 
(9,660
)
 
(7,781
)
 
 
 
 
 
 
 
 
 
 
 
Gain on sale of development properties net of tax of $10,824, $4,401, and $6,998, respectively
 
 
22,812
 
 
12,434
 
 
10,497
 
 
 
 
 
 
Income from continuing operations
 
 
331,250
 
 
281,019
 
 
240,409
 
 
 
 
 
 
Discontinued operations:
 
 
 
 
 
 
 
 
 
 
Income from discontinued operating properties
 
 
5,725
 
 
5,359
 
 
13,892
 
Gain on early extinguishment of debt
 
 
—
 
 
—
 
 
6,760
 
Loss on operating properties held for sale/sold
 
 
(5,098
)
 
(5,064
)
 
(4,016
)
Gain on disposition of operating properties
 
 
28,918
 
 
15,823
 
 
47,657
 
 
 
 
 
 
Income from discontinued operations
 
 
29,545
 
 
16,118
 
 
64,293
 
 
 
 
 
 
Gain on transfer of operating properties
 
 
2,301
 
 
—
 
 
—
 
Loss on transfer of operating property
 
 
(150
)
 
—
 
 
—
 
Gain on sale of operating properties
 
 
682
 
 
—
 
 
3,177
 
 
 
 
 
 
 
 
 
2,833
 
 
—
 
 
3,177
 
 
 
 
 
 
Net income
 
 
363,628
 
 
297,137
 
 
307,879
 
Original issuance costs associated with the redemption of preferred stock
 
 
—
 
 
—
 
 
(7,788
)
Preferred stock dividends
 
 
(11,638
)
 
(11,638
)
 
(14,669
)
 
 
 
 
 
Net income available to common shareholders
 
$
351,990
 
$
285,499
 
$
285,422
 
 
 
 
 
 
Per common share:
 
 
 
 
 
 
 
 
 
 
Income from  continuing operations:
 
 
 
 
 
 
 
 
 
 
 -Basic
 
$
1.42
 
$
1.21
 
$
1.03
 
 
 
 
 
 
 -Diluted
 
$
1.40
 
$
1.19
 
$
1.02
 
 
 
 
 
 
Net income :
 
 
 
 
 
 
 
 
 
 
 -Basic
 
$
1.55
 
$
1.28
 
$
1.33
 
 
 
 
 
 
 -Diluted
 
$
1.52
 
$
1.26
 
$
1.31
 
 
 
 
 
 
 Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 -Basic
 
 
226,641
 
 
222,859
 
 
214,184
 
 
 
 
 
 
 -Diluted
 
 
230,868
 
 
227,143
 
 
217,540
 
 
 
 
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
67
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
 
 
Year Ended December 31,
 
 
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Net income
 
$
363,628
 
$
297,137
 
$
307,879
 
 
 
 
 
 
Other comprehensive income:
 
 
 
 
 
 
 
 
 
 
Change in unrealized gain on marketable securities
 
 
26,689
 
 
28,594
 
 
3,798
 
Change in unrealized gain on interest rate swaps
 
 
—
 
 
—
 
 
620
 
Change in unrealized (loss)/gain on warrants
 
 
—
 
 
(8,252
)
 
4,319
 
Change in unrealized gain/(loss) on foreign currency hedge agreements
 
 
2,536
 
 
(15,102
)
 
(15,465
)
Change in foreign currency translation adjustment
 
 
2,040
 
 
15,675
 
 
16,193
 
 
 
 
 
 
Other comprehensive income
 
 
31,265
 
 
20,915
 
 
9,465
 
 
 
 
 
 
Comprehensive income
 
$
394,893
 
$
318,052
 
$
317,344
 
 
 
 
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
68
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Years Ended December 31, 2005, 2004, and 2003
(in thousands, except per share information)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retained Earnings/
(Cumulative
Distributions
in Excess
of Net Income)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Paid-in
Capital
 
 
Accumulated
Other Comprehensive
Income
 
 
 
 
 
 
Preferred Stock
 
Common Stock
 
 
 
 
Total
Stockholders’
Equity
 
 
 
 
 
 
 
 
 
 
 
Issued
 
Amount
 
Issued
 
Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, January 1, 2003
 
 
900
 
$
900
 
 
209,204
 
$
2,092
 
$
1,983,774
 
$
(85,367
)
$
7,401
 
$
1,908,800
 
Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
307,879
 
 
 
 
 
307,879
 
Dividends ($1.10 per common share; $1.0979, $1.3399, $1.3610, and $1.016 per Class A, Class B, Class C and Class F Depositary Share, respectively)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(252,624
)
 
 
 
 
(252,624
)
Issuance of common stock
 
 
 
 
 
 
 
 
9,888
 
 
98
 
 
192,654
 
 
 
 
 
 
 
 
192,752
 
Exercise of common stock options
 
 
 
 
 
 
 
 
2,156
 
 
22
 
 
25,766
 
 
 
 
 
 
 
 
25,788
 
Redemption of Class A, B and C preferred stock
 
 
(900
)
 
(900
)
 
 
 
 
 
 
 
(224,100
)
 
 
 
 
 
 
 
(225,000
)
Issuance of Class F Preferred Stock
 
 
700
 
 
700
 
 
 
 
 
 
 
 
168,086
 
 
 
 
 
 
 
 
168,786
 
Other comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,465
 
 
9,465
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2003
 
 
700
 
 
700
 
 
221,248
 
 
2,212
 
 
2,146,180
 
 
(30,112
)
 
16,866
 
 
2,135,846
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
297,137
 
 
 
 
 
297,137
 
Dividends ($1.16 per common share; $1.6625 Class F Depositary Share, respectively)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(270,774
)
 
 
 
 
(270,774
)
Issuance of common stock
 
 
 
 
 
 
 
 
226
 
 
2
 
 
5,419
 
 
 
 
 
 
 
 
5,421
 
Exercise of common stock options
 
 
 
 
 
 
 
 
3,380
 
 
34
 
 
46,023
 
 
 
 
 
 
 
 
46,057
 
Amortization of stock option expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,798
 
 
 
 
 
 
 
 
1,798
 
Other comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,915
 
 
20,915
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2004
 
 
700
 
 
700
 
 
224,854
 
 
2,248
 
 
2,199,420
 
 
(3,749
)
 
37,781
 
 
2,236,400
 
Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
363,628
 
 
 
 
 
363,628
 
Dividends ($1.27 per common share; $1.6625 Class F Depositary Share, respectively)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(300,024
)
 
 
 
 
(300,024
)
Issuance of common stock
 
 
 
 
 
 
 
 
242
 
 
3
 
 
6,837
 
 
 
 
 
 
 
 
6,840
 
Exercise of common stock options
 
 
 
 
 
 
 
 
2,963
 
 
30
 
 
44,467
 
 
 
 
 
 
 
 
44,497
 
Amortization of stock option expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,608
 
 
 
 
 
 
 
 
4,608
 
Other comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31,265
 
 
31,265
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2005
 
 
700
 
$
700
 
 
228,059
 
$
2,281
 
$
2,255,332
 
$
59,855
 
$
69,046
 
$
2,387,214
 
 
 
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
69
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
 
 
Year Ended December 31,
 
 
 
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Cash flow from operating activities:
 
 
 
 
 
 
 
 
 
 
Net income
 
$
363,628
 
$
297,137
 
$
307,879
 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
108,042
 
 
102,872
 
 
89,068
 
Loss on operating properties held for sale/sold/transferred
 
 
5,248
 
 
8,029
 
 
4,016
 
Gain on sale of development properties
 
 
(33,636
)
 
(16,835
)
 
(17,495
)
Gain on sale/transfer of operating properties
 
 
(31,901
)
 
(15,823
)
 
(50,834
)
Gain on early extinguishment of debt
 
 
—
 
 
—
 
 
(9,681
)
Minority interests in income, net
 
 
12,446
 
 
9,660
 
 
7,781
 
Equity in income of  real estate joint ventures, net
 
 
(77,454
)
 
(56,385
)
 
(42,276
)
Income from other real estate investments
 
 
(40,562
)
 
(23,571
)
 
(19,976
)
Distributions of unconsolidated investments
 
 
116,765
 
 
94,994
 
 
67,712
 
Change in accounts and notes receivable
 
 
(12,156
)
 
(1,742
)
 
(596
)
Change in accounts payable and accrued expenses
 
 
10,606
 
 
2,850
 
 
(2,545
)
Change in other operating assets and liabilities
 
 
(10,229
)
 
(36,010
)
 
(24,421
)
 
 
 
 
 
Net cash flow provided by operating activities
 
 
410,797
 
 
365,176
 
 
308,632
 
 
 
 
 
 
Cash flow from investing activities:
 
 
 
 
 
 
 
 
 
 
Acquisition of and improvements to operating real estate
 
 
(431,514
)
 
(351,369
)
 
(917,403
)
Acquisition of and improvements to real estate under development
 
 
(452,722
)
 
(204,631
)
 
(187,877
)
Investment in marketable securities
 
 
(93,299
)
 
(70,864
)
 
(23,680
)
Proceeds from sale of marketable securities
 
 
46,692
 
 
22,278
 
 
62,744
 
Proceeds from transferred operating/development properties
 
 
128,537
 
 
342,496
 
 
—
 
Investments and advances to real estate joint ventures
 
 
(267,287
)
 
(203,569
)
 
(152,997
)
Reimbursements of advances to real estate joint ventures
 
 
130,590
 
 
80,689
 
 
93,729
 
Other real estate investments
 
 
(123,005
)
 
(113,663
)
 
(52,818
)
Reimbursements of advances to other real estate investments
 
 
26,969
 
 
34,045
 
 
13,264
 
Investment in mortgage loans receivable
 
 
(82,305
)
 
(136,637
)
 
(64,652
)
Collection of mortgage loans receivable
 
 
90,709
 
 
103,819
 
 
41,529
 
Other investments
 
 
(3,152
)
 
(1,551
)
 
—
 
Settlement of net investment hedges
 
 
(34,580
)
 
—
 
 
—
 
Proceeds from sale of mortgage loan receivable
 
 
—
 
 
—
 
 
36,723
 
Proceeds from sale of operating properties
 
 
89,072
 
 
43,077
 
 
423,237
 
Proceeds from sale of development properties
 
 
259,280
 
 
156,283
 
 
90,565
 
 
 
 
 
 
Net cash flow (used for) investing activities
 
 
(716,015
)
 
(299,597
)
 
(637,636
)
 
 
 
 
 
Cash flow from financing activities:
 
 
 
 
 
 
 
 
 
 
Principal payments on debt, excluding normal amortization of rental property debt
 
 
(66,794
)
 
(54,322
)
 
(18,326
)
Principal payments on rental property debt
 
 
(8,296
)
 
(7,848
)
 
(5,813
)
Principal payments on construction loan financings
 
 
(98,002
)
 
(66,950
)
 
(40,644
)
Proceeds from mortgage/construction loan financings
 
 
265,418
 
 
348,386
 
 
110,816
 
Borrowings under revolving credit facilities
 
 
210,188
 
 
336,675
 
 
195,000
 
Repayment of borrowings under revolving credit facilities
 
 
(156,486
)
 
(100,000
)
 
(190,000
)
Proceeds from issuance of unsecured senior notes/term loan
 
 
672,429
 
 
200,000
 
 
650,000
 
Repayment of unsecured notes/term loan
 
 
(200,250
)
 
(514,000
)
 
(271,000
)
Financing origination costs
 
 
(9,538
)
 
—
 
 
—
 
Redemption of minority interests
 
 
(21,024
)
 
(3,781
)
 
(4,729
)
Dividends paid
 
 
(293,345
)
 
(265,254
)
 
(246,301
)
Proceeds from issuance of stock
 
 
48,971
 
 
51,447
 
 
387,327
 
Redemption of preferred stock
 
 
—
 
 
—
 
 
(225,000
)
 
 
 
 
 
Net cash flow provided by (used for) financing activities
 
 
343,271
 
 
(75,647
)
 
341,330
 
 
 
 
 
 
Change in cash and cash equivalents
 
 
38,053
 
 
(10,068
)
 
12,326
 
Cash and cash equivalents, beginning of year
 
 
38,220
 
 
48,288
 
 
35,962
 
 
 
 
 
 
Cash and cash equivalents, end of year
 
$
76,273
 
$
38,220
 
$
48,288
 
 
 
 
 
 
Interest paid during the year (net of capitalized interest of $12,587, $8,732 and $8,887, respectively)
 
$
121,087
 
$
108,117
 
$
97,215
 
 
 
 
 
 
Income taxes paid during the year
 
$
13,763
 
$
10,694
 
$
15,901
 
 
 
 
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
70
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Amounts relating to the number of buildings, square footage, tenant and occupancy data and estimated project costs are unaudited.
 
1.        Summary of Significant Accounting Policies:
 
 
Business
 
 
 
Kimco Realty Corporation (the “Company” or “Kimco”), its subsidiaries, affiliates and related real estate joint ventures are engaged principally in the operation of neighborhood and community shopping centers which are anchored generally by discount department stores, supermarkets or drugstores.  The Company also provides property management services for shopping centers owned by affiliated entities, various real estate joint ventures and unaffiliated third parties.
 
 
 
Additionally, in connection with the Tax Relief Extension Act of 1999 (the “RMA”), which became effective January 1, 2001, the Company is now permitted to participate in activities which it was precluded from previously in order to maintain its qualification as a Real Estate Investment Trust (“REIT”), so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Internal Revenue Code, as amended (the “Code”), subject to certain limitations.  As such, the Company, through its taxable REIT subsidiaries, is engaged in various retail real estate related opportunities including (i) merchant building, through its Kimco Developers, Inc. (“KDI”) subsidiary, which is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion, (ii) retail real estate advisory and disposition services which primarily focuses on leasing and disposition strategies of retail real estate controlled by both healthy and distressed and/or bankrupt retailers and (iii) acting as an agent or principal in connection with tax deferred exchange transactions.
 
 
 
The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties, avoiding dependence on any single property, and a large tenant base.  At December 31, 2005, the Company’s single largest neighborhood and community shopping center accounted for only 1.2% of the Company’s annualized base rental revenues and only 0.8% of the Company’s total shopping center gross leasable area (“GLA”).  At December 31, 2005, the Company’s five largest tenants were The Home Depot, TJX Companies, Sears Holdings, Kohl’s and Royal Ahold, which represented approximately 3.6%, 3.2%, 2.7%, 2.5% and 2.0%, respectively, of the Company’s annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest.
 
 
 
The principal business of the Company and its consolidated subsidiaries is the ownership, development, management and operation of retail shopping centers, including complementary services that capitalize on the Company’s established retail real estate expertise.  The Company does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance.  Accordingly, the Company believes it has a single reportable segment for disclosure purposes in accordance with accounting principles generally accepted in the United States of America.
 
 
 
Principles of Consolidation and Estimates
 
 
 
 
a.
The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, all of which are wholly-owned, and all entities in which the Company has a controlling interest, including where the Company has been determined to be a primary beneficiary of a variable interest entity in accordance with the provisions and guidance of Interpretation No. 46(R), Consolidation of Variable Interest Entities (“FIN 46(R)”) or meets certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”).  All intercompany balances and transactions have been eliminated in consolidation.
 
 
 
 
 
Accounting principles generally accepted in the United States of America (“GAAP”) require the Company’s management to make estimates and assumptions that affect the
 
71
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period.  The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition and the collectability of trade accounts receivable.  Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.
 
 
 
Minority Interests
 
 
 
Minority interests represents the portion of equity that the Company does not own in those entities it consolidates as a result of having a controlling interest or determined that the Company was the primary beneficiary of variable interest entity in accordance with the provisions and guidance of FIN 46(R).
 
 
 
Minority interests also include approximately 4.8 million convertible units (the “Convertible Units”) issued by the Company valued at $80.0 million related to an interest acquired in a shopping center property located in Daly City, CA, in 2002.  The Convertible Units are convertible at a ratio of 1:1 into the Company’s common stock and are entitled to a distribution equal to the dividend rate of the Company’s common stock multiplied by 1.1057.
 
 
 
Real Estate
 
 
 
Real estate assets are stated at cost, less accumulated depreciation and amortization.  If there is an event or a change in circumstances that indicates that the basis of a property (including any related amortizable intangible assets or liabilities) may not be recoverable, then management will assess any impairment in value by making a comparison of (i) the current and projected operating cash flows (undiscounted and without interest charges) of the property over its remaining useful life and (ii) the net carrying amount of the property.  If the current and projected operating cash flows (undiscounted and without interest charges) are less than the carrying value of the property, the carrying value would be adjusted to an amount to reflect the estimated fair value of the property.
 
 
 
When a real estate asset is identified by management as held for sale, the Company ceases depreciation of the asset and estimates the sales price, net of selling costs.  If, in management’s opinion, the net sales price of the asset is less than the net book value of the asset, an adjustment to the carrying value would be recorded to reflect the estimated fair value of the property.
 
 
 
Upon acquisition of real estate operating properties, the Company estimates the fair value of acquired tangible assets (consisting of land, building and improvements) and identified intangible assets and liabilities (consisting of above and below-market leases, in-place leases and tenant relationships) and assumed debt in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations. Based on these estimates, the Company allocates the purchase price to the applicable assets and liabilities.
 
 
 
The Company utilizes methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities.  The fair value of the tangible assets of an acquired property considers the value of the property “as-if-vacant”.  The fair value reflects the depreciated replacement cost of the permanent assets, with no trade fixtures included.
 
 
 
In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of above-market and below-market leases is estimated based on the present value of the difference between the contractual amounts to be paid pursuant to the leases and management’s estimate of the market lease rates and other lease provisions (i.e., expense recapture, base rental changes, etc.) measured over a period equal to the estimated remaining term of the lease.  The capitalized above-market or below-market intangible is amortized to rental income over the estimated remaining term of the respective leases.
 
 
 
In determining the value of in-place leases, management considers current market conditions and costs to execute similar leases in arriving at an estimate of the carrying costs during the expected lease-up period from vacant to existing occupancy.
 
72
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
 
 
In estimating carrying costs, management includes real estate taxes, insurance, other operating expenses and estimates of lost rental revenue during the expected lease-up periods and costs to execute similar leases including leasing commissions, legal and other related costs based on current market demand. In estimating the value of tenant relationships, management considers the nature and extent of the existing tenant relationship, the expectation of lease renewals, growth prospects, and tenant credit quality, among other factors.  The value assigned to in-place leases and tenant relationships is amortized over the estimated remaining term of the leases.  If a lease were to be terminated prior to its scheduled expiration, all unamortized costs relating to that lease would be written off.
   
           Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as  follows:
 
 
Buildings
 
15 to 50 years
 
Fixtures, building and leasehold improvements (including certain identified intangible assets)
 
Terms of leases or useful lives, whichever is shorter
 
 
Expenditures for maintenance and repairs are charged to operations as incurred.  Significant renovations and replacements, which improve and extend the life of the asset, are capitalized.  The useful lives of amortizable intangible assets are evaluated each reporting period with any changes in estimated useful lives being accounted for over the revised remaining useful life.
 
 
 
Real Estate Under Development
 
 
 
Real estate under development represents both the ground-up development of neighborhood and community shopping center projects which are subsequently sold upon completion and projects which the Company may hold as long-term investments.  These properties are carried at cost and no depreciation is recorded on these assets.  The cost of land and buildings under development includes specifically identifiable costs. The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs of personnel directly involved and other costs incurred during the period of development. The Company ceases cost capitalization when the property is held available for occupancy upon substantial completion of tenant improvements, but no later than one year from the completion of major construction activity.  If, in management’s opinion, the net sales price of assets held for resale or the current and projected undiscounted cash flows of these assets to be held as long-term investments is less than the net carrying value, the carrying value would be adjusted to an amount to reflect the estimated fair value of the property.
 
 
 
Investments in Unconsolidated Joint Ventures
 
 
 
The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting as the Company exercises significant influence, but does not control, these entities.  These investments are recorded initially at cost and subsequently adjusted for cash contributions and distributions.  Earnings for each investment are recognized in accordance with each respective investment agreement and where applicable, based upon an allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period.
 
 
 
The Company’s joint ventures and other real estate investments primarily consist of co-investments with institutional and other joint venture partners in neighborhood and community shopping center properties, consistent with its core business.  These joint ventures typically obtain non-recourse third party financing on their property investments, thus contractually limiting the Company’s losses to the amount of its equity investment; and due to the lender’s exposure to losses, a lender typically will require a minimum level of equity in order to mitigate its risk.  The Company’s exposure to losses associated with its unconsolidated joint ventures is primarily limited to its carrying value in these investments.
 
 
 
On a periodic basis, management assesses whether there are any indicators that the value of the Company’s investments in unconsolidated joint ventures may be impaired.  An investment’s value is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment and such difference is
 
73
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
deemed to be other than temporary.  To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated fair value of the investment.
 
 
 
Other Real Estate Investments
 
 
 
Other real estate investments primarily consist of Preferred equity investments for which the Company provides capital to developers and owners of real estate.  The Company typically accounts for its Preferred equity investments on the equity method of accounting, whereby earnings for each investment are recognized in accordance with each respective investment agreement and based upon an allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period.
 
 
 
Mortgage and Other Financing Receivables
 
 
 
Mortgages and other financing receivables consist of loans purchased and loans originated by the Company.  Loan receivables are recorded at stated principal amounts net of any discount or premium or deferred loan origination costs or fees.  The related discounts or premiums on mortgages and other loans purchased are amortized or accreted over the life of the related loan receivable.  The Company defers certain loan origination and commitment fees, net of certain origination costs, and amortizes them as an adjustment of the loan’s yield over the term of the related loan.  The Company evaluates the collectibility of both interest and principal of each of its loans to determine whether it is impaired.  A loan is considered to be impaired, when based upon current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms.  When a loan is considered to be impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the loan’s effective interest rate or to the value of the underlying collateral if the loan is collateralized.  Interest income on performing loans is accrued as earned.  Interest income on impaired loans is recognized on a cash basis.
 
 
 
Cash and Cash Equivalents
 
 
 
Cash and cash equivalents (demand deposits in banks, commercial paper and certificates of deposit with original maturities of three months or less) includes tenants’ security deposits, escrowed funds and other restricted deposits approximating $6.7 million and $0.5 million at December 31, 2005 and 2004, respectively.
   
 
Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates its risks by investing in or through major financial institutions. Recoverability of investments is dependent upon the performance of the issuers.
 
 
 
Marketable Securities
 
 
 
The Company classifies its existing marketable equity securities as available-for-sale in accordance with the provisions of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities.  These securities are carried at fair market value, with unrealized gains and losses reported in stockholders’ equity as a component of Accumulated other comprehensive income (“OCI”). Gains or losses on securities sold are based on the specific identification method.
 
 
 
All debt securities are classified as held-to-maturity because the Company has the positive intent and ability to hold the securities to maturity.  Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity.
 
 
 
Deferred Leasing and Financing Costs
 
 
 
Costs incurred in obtaining tenant leases and long-term financing, included in deferred charges and prepaid expenses in the accompanying Consolidated Balance Sheets, are amortized over the terms of the related leases or debt agreements, as applicable.
 
 
 
Revenue Recognition and Accounts Receivable
 
 
 
Base rental revenues from rental property are recognized on a straight-line basis over
 
74
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
 
 
the terms of the related leases.  Certain of these leases also provide for percentage rents based upon the level of sales achieved by the lessee.  These percentage rents are recognized once the required sales level is achieved.  Rental income may also include payments received in connection with lease termination agreements.  In addition, leases typically provide for reimbursement to the Company of common area maintenance costs, real estate taxes and other operating expenses.  Operating expense reimbursements are recognized as earned.
 
 
 
Management and other fee income consist of property management fees, leasing fees, property acquisition and disposition fees, development fees and asset management fees. These fees arise from contractual agreements with third parties or with entities in which the Company has a partial non-controlling interest.  Fee income is recognized as earned under the respective agreements.  Acquisition and disposition fees are recognized when the respective transactions are completed.  Fee income related to partially owned entities is recognized to the extent attributable to the unaffiliated interest.
 
 
 
Gains and losses from the sale of depreciated operating property and ground-up development projects are generally recognized using the full accrual method in accordance with Statement of Financial Accounting Standards No. 66, Accounting for Sales of Real Estate (“SFAS No. 66”), provided that various criteria relating to the terms of sale and subsequent involvement by the Company with the properties are met.
 
 
 
Gains and losses on transfers of operating properties result from the sale of partial interest in properties to unconsolidated joint ventures and are recognized using the partial sale provisions of SFAS No. 66.
 
 
 
The Company makes estimates of the uncollectability of its accounts receivable related to base rents, expense reimbursements and other revenues.  The Company analyzes accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts.  In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims.  The Company’s reported net income is directly affected by management’s estimate of the collectability of accounts receivable.
 
 
 
Income Taxes
 
 
 
The Company has made an election to qualify, and believes it is operating so as to qualify, as a REIT for federal income tax purposes. Accordingly, the Company generally will not be subject to federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under Section 856 through 860 of the Code.
 
 
 
In connection with the RMA, which became effective January 1, 2001, the Company is now permitted to participate in certain activities which it was previously precluded from in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code.  As such, the Company is subject to federal and state income taxes on the income from these activities.
 
 
 
Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards.  Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
 
 
 
Foreign Currency Translation and Transactions
 
 
 
Assets and liabilities of the Company’s foreign operations are translated using year-end exchange rates, and revenues and expenses are translated using exchange rates as determined throughout the year.  Gains or losses resulting from translation are included in OCI, as a separate component of the Company’s stockholders’ equity.  Gains or losses resulting from foreign currency transactions are translated to local currency at the rates of exchange prevailing at the dates of the transactions.  The effect of the transaction’s gain or loss is included in the caption Other income/(expense), net in the Consolidated Statements of Income.
 
75
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
Derivative/Financial Instruments
 
 
 
The Company measures its derivative instruments at fair value and records them in the Consolidated Balance Sheet as an asset or liability, depending on the Company’s rights or obligations under the applicable derivative contract.  In addition, the fair value adjustments will be recorded in either stockholders’ equity or earnings in the current period based on the designation of the derivative.  The effective portions of changes in fair value of cash flow hedges are reported in OCI and are subsequently reclassified into earnings when the hedged item affects earnings.  Changes in the fair value of foreign currency hedges that are designated and effective as net investment hedges are included in the cumulative translation component of OCI to the extent they are economically effective and are subsequently reclassified to earnings when the hedged investments are sold or otherwise disposed of.  The changes in fair value of derivative instruments which are not designated as hedging instruments and the ineffective portions of hedges are recorded in earnings for the current period.
 
 
 
The Company utilizes derivative financial instruments to reduce exposure to fluctuations in interest rates, foreign currency exchange rates and market fluctuation on equity securities.  The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities.  The Company has not entered, and does not plan to enter, into financial instruments for trading or speculative purposes.  Additionally, the Company has a policy of only entering into derivative contracts with major financial institutions.  The principal financial instruments used by the Company are interest rate swaps, foreign currency exchange forward contracts, cross-currency swaps and warrant contracts.  These derivative instruments were designated and qualified as cash flow, fair value or foreign currency hedges (see Note 15).
 
 
 
Earnings Per Share
 
 
 
On July 21, 2005, the Company’s Board of Directors declared a two-for-one split (the “Stock Split”) of the Company’s common stock which was effected in the form of a stock dividend paid on August 23, 2005 to stockholders of record on August 8, 2005.  All share and per share data included in the accompanying Consolidated Financial Statements and Notes thereto have been adjusted to reflect this Stock Split.
 
 
  The following table sets forth the reconciliation of earnings and the weighted average number of shares used in the calculation of basic and diluted earnings per share (amounts presented in thousands, except per share data):
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Computation of Basic Earnings Per Share:
 
 
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
331,250
 
$
281,019
 
$
240,409
 
Gain on transfer/sale of operating properties, net
 
 
2,833
 
 
—
 
 
3,177
 
Original issuance costs associated with the redemption of preferred stock
 
 
—
 
 
—
 
 
(7,788
)
Preferred stock dividends
 
 
(11,638
)
 
(11,638
)
 
(14,669
)
 
 
 
 
 
Income from continuing operations applicable to common shares
 
 
322,445
 
 
269,381
 
 
221,129
 
Income from discontinued operations
 
 
29,545
 
 
16,118
 
 
64,293
 
 
 
 
 
 
Net income applicable to common shares
 
$
351,990
 
$
285,499
 
$
285,422
 
 
 
 
 
 
Weighted average common shares outstanding
 
 
226,641
 
 
222,859
 
 
214,184
 
 
 
 
 
 
Basic Earnings Per Share:
 
 
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
1.42
 
$
1.21
 
$
1.03
 
Income from discontinued operations
 
 
0.13
 
 
0.07
 
 
0.30
 
 
 
 
 
 
Net income
 
$
1.55
 
$
1.28
 
$
1.33
 
 
 
 
 
 
Computation of Diluted Earnings Per Share:
 
 
 
 
 
 
 
 
 
 
Income from continuing operations applicable to common shares (a)
 
$
322,445
 
$
269,381
 
$
221,129
 
Income from discontinued operations
 
 
29,545
 
 
16,118
 
 
64,293
 
 
 
 
 
 
Net income for diluted earnings per share
 
$
351,990
 
$
285,499
 
$
285,422
 
 
 
 
 
 
Weighted average common shares outstanding – Basic
 
 
226,641
 
 
222,859
 
 
214,184
 
Effect of dilutive securities (a):
 
 
 
 
 
 
 
 
 
 
Stock options/deferred stock awards
 
 
4,227
 
 
4,284
 
 
3,356
 
 
 
 
 
 
Shares for diluted earnings per share
 
 
230,868
 
 
227,143
 
 
217,540
 
 
 
 
 
 
Diluted Earnings Per Share:
 
 
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
1.40
 
$
1.19
 
$
1.02
 
Income from discontinued operations
 
 
0.12
 
 
0.07
 
 
0.29
 
 
 
 
 
 
Net income
 
$
1.52
 
$
1.26
 
$
1.31
 
 
 
 
 
 
 
(a)
The effect of the assumed conversion of convertible units had an anti-dilutive effect upon the calculation of Income from continuing operations per share.  Accordingly, the impact of such conversion has not been included in the determination of diluted earnings per share calculations.
 
76
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
The Company maintains a stock option plan (the “Plan”), for which prior to January 1, 2003, the Company accounted for under the intrinsic value-based method of accounting prescribed by Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations including FASB Interpretation No. 44, Accounting for Certain Transactions involving Stock Compensation (an interpretation of APB Opinion No. 25).  Effective January 1, 2003, the Company adopted the prospective method provisions of SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure an Amendment of FASB Statement No. 123 (“SFAS No. 148”), which will apply the recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation (“SFAS No. 123”) to all employee awards granted, modified or settled after January 1, 2003.  Awards under the Company’s Plan generally vest ratably over a three or five-year term and expire ten years from the date of grant.  Therefore, the cost related to stock-based employee compensation included in the determination of net income is less than that which would have been recognized if the fair value based method had been applied to all awards since the original effective date of SFAS No. 123.  The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding stock awards in each period (amounts presented in thousands, except per share data):
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Net income, as reported
 
$
363,628
 
$
297,137
 
$
307,879
 
Add: Stock based employee compensation expense included in reported net income
 
 
4,608
 
 
1,650
 
 
148
 
Deduct:
Total stock based employee compensation expense determined under fair value based method for all awards
 
 
(5,206
)
 
(3,316
)
 
(3,095
)
 
 
 
 
 
Pro Forma Net Income – Basic
 
$
363,030
 
$
295,471
 
$
304,932
 
 
 
 
 
 
Earnings Per Share
 
 
 
 
 
 
 
 
 
 
Basic – as reported
 
$
1.55
 
$
1.28
 
$
1.33
 
 
 
 
 
 
Basic – pro forma
 
$
1.55
 
$
1.27
 
$
1.32
 
 
 
 
 
 
Net income for diluted earnings per share
 
$
351,990
 
$
285,499
 
$
285,422
 
Add: Stock based employee compensation expense included in reported net income
 
 
4,608
 
 
1,650
 
 
148
 
Deduct:
Total stock based employee compensation expense determined under fair value based method for all awards
 
 
(5,206
)
 
(3,316
)
 
(3,095
)
 
 
 
 
 
Pro Forma Net Income – Diluted
 
$
351,392
 
$
283,833
 
$
282,475
 
 
 
 
 
 
Earnings Per Share
 
 
 
 
 
 
 
 
 
 
Diluted – as reported
 
$
1.52
 
$
1.26
 
$
1.31
 
 
 
 
 
 
Diluted – pro forma
 
$
1.52
 
$
1.25
 
$
1.30
 
 
 
 
 
 
 
77
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
These pro forma adjustments to net income and net income per diluted common share assume fair values of each option grant estimated using the Black-Scholes option pricing formula.  The more significant assumptions underlying the determination of such fair values for options granted during 2005, 2004 and 2003 include: (i) weighted average risk-free interest rates of 4.03%, 3.30% and 2.84%, respectively;  (ii) weighted average expected option lives of 4.80 years, 3.72 years and 3.8 years, respectively; (iii) weighted average expected volatility of 18.01%, 16.69% and 15.26%, respectively, and (iv) weighted average expected dividend yield of 5.30%, 5.59% and 6.25%, respectively.  The per share weighted average fair value at the dates of grant for options awarded during 2005, 2004 and 2003 was $3.21, $2.14 and $1.18, respectively.
 
 
 
New Accounting Pronouncements
 
 
 
In December 2004, the FASB issued SFAS No. 123, (revised 2004) Share-Based Payment (“SFAS No. 123(R)”), which supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance.  SFAS No. 123(R) established standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services.  It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.  This Statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  SFAS No. 123(R) is effective for fiscal years beginning after December 15, 2005.  The impact of adopting this statement is not expected to have a material impact on the Company’s financial position or results of operations.
 
 
 
In December 2004, the FASB issued Statement No. 153, Exchange of Non-monetary Assets - an amendment of APB Opinion No. 29 (“SFAS No. 153”).  The guidance in APB Opinion No. 29, Accounting for Non-monetary Transactions, is based on the principle that exchanges of non-monetary assets should be measured based on the fair value of the assets exchanged.  The guidance in that Opinion, however, included certain exceptions to that principle.  This Statement amends Opinion No. 29 to eliminate the exception for non-monetary assets that do not have commercial substance.  A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005.  The impact of adopting this statement did not have a material impact on the Company’s financial position or results of operations.
 
 
 
In March 2005, the FASB issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (“FIN 47”).  FIN 47 requires an entity to recognize a liability for a conditional asset retirement obligation when incurred if the liability can be reasonably estimated.  FIN 47 clarifies that the term “Conditional Asset Retirement Obligation” refers to a legal obligation (pursuant to existing laws or by contract) to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the
 
78
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
entity.  FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation.  FIN 47 was effective no later than fiscal years ended after December 15, 2005.  The Company adopted FIN 47 as required effective December 31, 2005 and the initial application of FIN 47 did not have a material impact on the Company’s financial position or results of operations.
 
 
 
In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections (“SFAS No. 154”), which replaces Accounting Principle Board Opinion No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements.  SFAS No. 154 changes the requirements for the accounting for and reporting of a change in accounting principles.  It requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change.  This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.
 
 
 
In September 2005, the EITF issued Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership When the Investor is the Sole General Partner and the Limited Partners Have Certain Rights, (“EITF 04-5”).  At issue is what rights held by the limited partner(s) preclude consolidation in circumstances in which the sole general partner would consolidate the limited partnership in accordance with U.S. generally accepted accounting principles.  The assessment of limited partners’ rights and their impact on the presumption of control of the limited partnership by the sole general partner should be made when an investor becomes the sole general partner and should be reassessed if (i) there is a change to the terms or in the exercisability of the rights of the limited partners, (ii) the sole general partner increases or decreases its ownership of limited partnership interests, or (iii) there is an increase or decrease in the number of outstanding limited partnership interests.  This issue is effective no later than for fiscal years beginning after December 15, 2005 and as of June 29, 2005 for new or modified arrangements.  The impact of adopting EITF 04-5 is not expected to have a material impact on the Company’s financial position or results of operations.
 
 
 
Reclassifications
 
 
 
Certain reclassifications of prior years’ amounts have been made to conform with the current year presentation.
 
 
2.
Real Estate:
 
 
 
The Company’s components of Rental property consist of the following (in thousands):
 
 
 
December 31,
 
 
 
2005
 
2004
 
 
 
 
 
Land
 
$
686,123
 
$
626,914
 
Buildings and improvements
 
 
 
 
 
 
 
Buildings
 
 
2,696,194
 
 
2,650,107
 
Building improvements
 
 
180,005
 
 
106,061
 
Tenant improvements
 
 
334,765
 
 
263,322
 
Fixtures and leasehold improvements
 
 
17,088
 
 
15,697
 
Other rental property, net (1)
 
 
35,110
 
 
32,067
 
 
 
 
 
 
 
 
3,949,285
 
 
3,694,168
 
Accumulated depreciation and amortization
 
 
(740,127
)
 
(634,642
)
 
 
 
 
Total
 
$
3,209,158
 
$
3,059,526
 
 
 
 
 
 
(1)
At December 31, 2005 and 2004, Other rental property, net consisted of intangible assets including $23,539 and $14,232, respectively, of in-place leases, $7,366 and $10,188, respectively, of tenant relationships and $4,205 and $7,647, respectively, of above-market leases.  In addition, at December 31, 2005 and 2004, the Company had intangible liabilities relating to below-market leases from property acquisitions of approximately $50.1 million and $50.0 million, respectively.  These amounts are included in the caption Other liabilities in the Company’s Consolidated Balance Sheets.
 
79
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
3.
Property Acquisitions, Developments and Other Investments:
 
 
 
Operating Properties
 
 
 
Acquisition of Existing Shopping Centers -
 
 
 
During the years 2005, 2004 and 2003, the Company acquired operating properties, in separate transactions, at aggregate costs of approximately $278.0 million, $440.5 million and $293.9 million, respectively.
 
 
 
Ground-Up Development -
 
 
 
During 2005, the Company acquired, in separate transactions, various parcels of land located in Mesa, AZ, and Nampa, ID for an aggregate purchase price of approximately $28.7 million.  These properties will be developed into retail centers with an aggregate of approximately 2.2 million square feet of GLA with a total estimated aggregate project cost of approximately $190.7 million.
 
 
 
During May and June 2005, the Company acquired, in separate transactions, two parcels of land located in Saltillo and Pachuca, Mexico, for an aggregate purchase price of approximately $14.6 million.  The properties will be developed into retail centers with an aggregate total project cost of approximately $34.1 million.
 
 
 
During June 2005, the Company acquired land in Tustin, CA, through a newly formed joint venture in which the Company has a 50% non-controlling interest, for a purchase price of approximately $23.0 million.  The property will be developed into a 1.0 million square foot retail center with a total estimated project cost of approximately $149.3 million.  The purchase of the land was funded through a new construction loan which bears interest at LIBOR plus 1.70% and is scheduled to mature in October 2007.  As of December 31, 2005, this construction loan had an outstanding balance of approximately $40.4 million.
 
 
 
Additionally, during 2005, the Company acquired, in separate transactions, six parcels of land located in various cities throughout Mexico, through newly formed joint ventures in which the Company has non-controlling interests, for an aggregate purchase price of approximately $42.1 million.  The properties were at various stages of construction at acquisition and will be developed into retail centers with a projected total aggregate cost of approximately $133.1 million.
 
 
 
During July 2004, the Company acquired land in Huehuetoca, Mexico, through a joint venture in which the Company has a 95% controlling interest, for a purchase price of approximately $6.9 million.  The property will be developed as a grocery-anchored retail center with a projected total cost of approximately $15.3 million.
 
 
 
During August 2004, the Company acquired land located in San Luis Potosi, Mexico, through a joint venture in which the Company currently has a 64.4% controlling interest for a purchase price of approximately $5.8 million.  The property was developed into a retail center by the grocery tenant anchoring the project.  During December 2004, the Company acquired the completed building improvements from the tenant for a purchase price of approximately 77.2 million pesos (“MXN”) (approximately USD $6.9 million).
 
 
 
During December 2004, the Company acquired land located in Reynosa, Mexico for a purchase price of approximately $13.8 million.  The property will be developed as a grocery anchored retail center with a projected total cost of approximately $22.0 million.
 
 
 
Merchant Building -
 
 
 
Effective January 1, 2001, the Company elected taxable REIT subsidiary status for its wholly-owned development subsidiary, KDI.  KDI is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion.
 
 
 
During the years 2005, 2004 and 2003, KDI expended approximately $363.1 million, $205.2 million and $208.9 million, respectively, in connection with the purchase of land and construction costs related to its ground-up development projects.
 
80
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
These merchant building acquisition and development costs have been funded principally through proceeds from sales of completed projects and construction financings.
 
 
 
Other -
 
 
 
During 2005, the Company acquired ten self-storage facilities through an existing joint venture in which the Company held an approximate 93.5% economic interest, for a purchase price of approximately $39.9 million including the assumption of approximately $7.5 million of non-recourse fixed-rate mortgage debt encumbering three of the properties.  Upon completing this purchase, this entity owned 17 self-storage facilities located in various states.  The joint venture had cross-collateralized 14 of these properties with approximately $44.0 million of non-recourse floating-rate mortgage debt which was scheduled to mature in November 2007 and had an interest rate of LIBOR plus 2.75%. Based upon the provisions of FIN 46(R), the Company had determined that this entity was a VIE.  The Company had further determined that the Company was the primary beneficiary of this VIE and had therefore consolidated this entity for financial reporting purposes.  During November and December 2005, this entity disposed of, in separate transactions, four self-storage properties for an aggregate sales price of approximately $18.6 million resulting in an aggregate gain of approximately $5.8 million.  Proceeds from these sales were used to pay down approximately $9.8 million of mortgage debt and provided distributions to the partners.  As a result of these transactions, the Company’s economic interest had significantly decreased and the entity became subject to the reconsideration provisions of FIN 46(R).  Based upon this reconsideration event and the provision of FIN 46(R), the Company has determined that this entity is no longer a VIE and has therefore deconsolidated this entity and will now account for this investment under the equity method of accounting.  As of December 31, 2005, this entity owned 13 self-storage properties.  Three of the properties are encumbered by approximately $7.4 million of fixed-rate individual non-recourse mortgage debt which bears interest at 5.5% per annum and is scheduled to mature in June 2013.  The remaining ten properties are cross-collateralized with approximately $33.3 million of variable rate debt which bears interest at LIBOR plus 2.75% (7.09% at December 31, 2005) and is scheduled to mature in November 2007.  The Company’s maximum exposure to loss associated with this entity is primarily limited to the Company’s carrying value of this investment, which was approximately $14.2 million at December 31, 2005.
 
 
 
During June 2004, the Company acquired an operating property through the acquisition of the remaining 50% partnership interest in a joint venture in which the Company held a 50% interest. The property, acquired for approximately $12.5 million, is located in Tempe, AZ and is comprised of 0.2 million square feet of GLA.
 
 
 
During December 2004, the Company acquired a shopping center property through the acquisition of the remaining 50% partnership interest in a joint venture in which the Company held a 50% interest.  The property, acquired for approximately $4.5 million, is located in Tampa, FL and is comprised of 0.1 million square feet of GLA.
 
 
 
Additionally during December 2004, the Company acquired interests in two parking facilities and a medical office building located in Allegheny, PA that are subject to a ground lease, for a purchase price of approximately $29.8 million.
 
 
 
These operating property acquisitions, development costs and other investments have been funded principally through the application of proceeds from the Company’s public unsecured debt issuances, proceeds from mortgage and construction financings and availability under the Company’s revolving lines of credit.
 
 
 
FNC Realty Corporation -
 
 
 
From 2000 through 2002 the Company acquired approximately $28.9 million face amount of Frank’s Nursery and Crafts, Inc. (“Frank’s”), 10.25% bonds for an aggregate purchase price of approximately $11.3 million. During February 2001, Frank’s filed for protection under Chapter 11 of the United States Bankruptcy Code. During May 2002, Frank’s plan of reorganization was confirmed by the Bankruptcy court and Frank’s emerged from bankruptcy. Pursuant to Frank’s reorganization plan, the Company received approximately 4.3 million shares of Frank’s common stock valued at $2.34 per share in
 
81
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
settlement of its Frank’s bond investment. As a result of this conversion, the Company held an approximate 27% interest in Frank’s and began accounting for its investment on the equity method. In addition, the Company began providing loans to Frank’s under a revolving credit facility, which was collateralized by certain real estate interests of Frank’s. As an inducement to make these loans, Frank’s issued the Company approximately 4.4 million warrants with an exercise price of $1.15 per share.
 
 
 
During September 2004, Frank’s again filed for protection under Chapter 11 of the United States Bankruptcy Code. The Company committed to provide Frank’s, in addition to its revolving credit facility, with $27.0 million of debtor-in-possession financing for a term of one year at an interest rate of Prime plus 1.00%. From the petition date until July 26, 2005, Frank’s operated its business as a debtor-in-possession and during this period had completely liquidated its inventory and ceased operating as a retailer.
 
 
 
Frank’s plan of reorganization included a Company sponsored re-capitalization plan in which the Company, along with several other significant shareholders, agreed to re-capitalize Frank’s with approximately $104.0 million in cash in exchange for debt and equity securities and convert Frank’s from a publicly held retail company to a privately held real estate company.
 
 
 
On July 27, 2005, Frank’s emerged from Chapter 11 bankruptcy pursuant to a bankruptcy court approved plan of reorganization as FNC Realty Corporation (“FNC”). Pursuant to the reorganization plan, shareholders of Frank’s were offered cash of $0.75 per share or the right to exchange Frank’s common stock for FNC common stock on a 1:1 basis. FNC’s capitalization included the issuance of approximately $27.0 million of common stock and $77.0 million of fixed-rate 7% convertible senior notes. The notes mature in July 2008, and may be converted at anytime by the holder for common shares of FNC at $0.75 per share. Proceeds from the issuance of common stock and convertible senior notes were used to repay all claims pursuant to the plan of reorganization, including amounts owed to the Company under its revolving credit facility and debtor-in-possession financing agreement.
 
 
 
Pursuant to the plan of reorganization, the Company received common shares of FNC representing an approximate 27% ownership interest in exchange for its interests in Frank’s.  In addition, the Company acquired an additional 24.5% interest in the common shares of FNC for cash of approximately $17 million, thereby increasing the Company’s ownership interest to approximately 51%. This acquisition of additional shares includes the exercise of warrants previously issued by Frank’s to the Company. The Company also acquired approximately $42 million of fixed-rate 7% convertible senior notes issued by FNC.
 
 
 
As a result of the increase in ownership interest from 27% to 51%, the Company became the controlling shareholder and therefore, commenced consolidation of FNC effective July 27, 2005. The acquisition of the additional 24.5% ownership interest has been accounted for as a step acquisition with the purchase price being allocated to the identified assets and liabilities of FNC.
 
 
 
As of July 27, 2005, FNC had approximately $154 million of net operating loss carry-forwards (“NOLs”), which may be utilized to offset future taxable income of FNC.  As Frank’s had recurring losses and was in bankruptcy, the realization of the NOLs was uncertain.  Accordingly, a full valuation allowance was previously recorded against the deferred tax asset relating to these NOLs.  Of the total amount of available NOLs, the Company has estimated approximately $124 million is unrestricted and $30 million is restricted (limited to utilization of $1.1 million per year).
 
 
 
The Company has evaluated the level of valuation allowance required and determined, based upon the expected investment strategy for FNC, that approximately $27 million of the allowance should be reduced and recorded as an adjustment to the purchase price allocation.
 
 
 
As of July 27, 2005, FNC held interests in 55 properties with approximately $16.1 million of non-recourse mortgage debt encumbering 16 of the properties. These loans bear interest at fixed rates ranging from 4.00% to 7.75% and maturity dates ranging from June 2012 through June 2022.  During December 2005, FNC pre-paid, without penalty, an aggregate $4.8 million of mortgage debt encumbering five of its properties.  The mortgage debt bore interest at a 7.3% fixed rate per annum and was scheduled to mature in August 2012.  As of December 31, 2005, FNC had approximately
 
82
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
$11.4 million of non-recourse mortgage debt encumbering 11 properties.  These remaining loans bear interest at fixed rates ranging from 4.00% to 7.75% and maturity dates ranging from June 2012 through June 2022.
 
 
 
The Company’s investment strategy with respect to FNC includes re-tenanting, re-developing and disposition of the properties. From July 27, 2005 through December 31, 2005, FNC disposed of nine properties, in separate transactions, for an aggregate sales price of approximately $9.4 million.
 
 
4.
Dispositions of Real Estate:
 
 
 
Operating Real Estate -
 
 
 
During 2005, the Company (i) disposed of, in separate transactions, 20 operating properties for an aggregate sales price of approximately $93.3 million, (ii) transferred three operating properties to KROP for an aggregate price of approximately $49.0 million, (iii) transferred 52 operating properties to various joint ventures in which the Company has non-controlling interests ranging from 15% to 50% for an aggregate price of approximately $183.1 million.  For the year ended December 31, 2005, these transactions resulted in gains of approximately $31.9 million and a loss on sale/transfer from four of the properties of approximately $5.2 million.
 
 
 
During June 2005, the Company disposed of a vacant land parcel located in New Ridge, MD for approximately $5.6 million resulting in a $4.6 million gain on sale.  This gain is included in Other income, net on the Company’s Condensed Consolidated Statements of Income.
 
 
 
During 2004, the Company (i) disposed of, in separate transactions, 16 operating properties and one ground lease for an aggregate sales price of approximately $81.1 million, including the assignment of approximately $8.0 million of non-recourse mortgage debt encumbering one of the properties; cash proceeds of approximately $16.9 million from the sale of two of these properties were used in a 1031 exchange to acquire shopping center properties located in Roanoke, VA, and Tempe, AZ, (ii) transferred 17 operating properties to KROP, as defined below, for an aggregate price of approximately $197.9 million and (iii) transferred 21 operating properties, comprising approximately 3.2 million square feet of GLA, to various co-investment ventures in which the Company has non-controlling interests ranging from 10% to 30% for an aggregate price of approximately $491.2 million.  A significant portion of the properties transferred were acquired in the Mid-Atlantic Merger.
 
 
 
Merchant Building -
 
 
 
During 2005, KDI sold, in separate transactions, six of its recently completed projects, and 41 out-parcels for approximately $264.1 million.  These sales resulted in pre-tax gains of approximately $33.6 million.
 
 
 
During 2004, KDI sold, in separate transactions, five of its recently completed projects, three completed phases of projects and 29 out-parcels for approximately $170.2 million.  These sales resulted in pre-tax gains of approximately $16.8 million.
 
 
 
During 2003, KDI sold, in separate transactions, four of its recently completed projects and 26 out-parcels for approximately $134.6 million, which resulted in pre-tax gains of approximately $17.5 million.
 
 
5.
Adjustment of Property Carry Values:
 
 
 
As part of the Company’s periodic assessment of its real estate properties with regard to both the extent to which such assets are consistent with the Company’s long-term real estate investment objectives and the performance and prospects of each asset, the Company determined in December 2004 that its investment in an operating property comprised of approximately 0.1 million square feet of GLA, with a book value of approximately $3.8 million, net of accumulated depreciation of approximately $2.6 million, may not be fully recoverable.  Based upon management’s assessment of current market conditions and lack of demand for the property, the Company reduced its anticipated holding period for this investment.  As a result, the Company determined that its investment in this asset was not fully recoverable and recorded an adjustment of property carrying value of approximately $3.0 million to reflect the property’s
 
83
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
estimated fair value.  The Company’s determination of estimated fair value was based upon third-party purchase offers less estimated closing costs.  This property was subsequently sold during 2005 and this adjustment was included along with the related property operations in the line Income from discontinued operating properties in the Company’s Consolidated Statements of Income.
 
 
6.
Discontinued Operations and Assets Held for Sale:
 
 
 
In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”) the Company reports as discontinued operations assets held-for-sale (as defined by SFAS No. 144) as of the end of the current period and assets sold subsequent to the adoption of SFAS No. 144.  All results of these discontinued operations are included in a separate component of income on the Consolidated Statements of Income under the caption Discontinued operations.  This change has resulted in certain reclassifications of 2005, 2004 and 2003 financial statement amounts.
 
 
 
The components of Income from discontinued operations for each of the three years in the period ended December 31, 2005 are shown below.  These include the results of operations through the date of each respective sale for properties sold during 2005, 2004 and 2003 and a full year of operations for those assets classified as held-for-sale as of December 31, 2005 (in thousands):
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Discontinued Operations:
 
 
 
 
 
 
 
 
 
 
Revenues from rental property
 
$
10,769
 
$
16,930
 
$
30,385
 
Rental property expenses
 
 
(3,664
)
 
(5,311
)
 
(10,443
)
 
 
 
 
 
Income from property operations
 
 
7,105
 
 
11,619
 
 
19,942
 
Depreciation of rental property
 
 
(2,100
)
 
(3,255
)
 
(5,856
)
Interest expense
 
 
(571
)
 
(841
)
 
(106
)
Other income/(expense)
 
 
1,291
 
 
(2,164
)
 
(88
)
 
 
 
 
 
Income from discontinued operating properties
 
 
5,725
 
 
5,359
 
 
13,892
 
Gain on early extinguishment of debt
 
 
—
 
 
—
 
 
6,760
 
Loss on operating properties held for sale/sold
 
 
(5,098
)
 
(5,064
)
 
(4,016
)
Gain on disposition of operating properties
 
 
28,918
 
 
15,823
 
 
47,657
 
 
 
 
 
 
Income from discontinued operations
 
$
29,545
 
$
16,118
 
$
64,293
 
 
 
 
 
 
 
 
During March 2005, the Company reclassified as held-for-sale three shopping center properties comprising approximately 0.4 million square feet of GLA.  The book value of each of these properties, aggregating approximately $17.1 million, net of accumulated depreciation of approximately $8.4 million, did not exceed each of their estimated fair values.  As a result, no adjustment of property carrying value was recorded.  The Company’s determination of the fair value for each of these properties, aggregating approximately $22.1 million, was based upon executed contracts of sale with third parties less estimated selling costs.  The Company completed the sale of these properties during the quarter ended June 30, 2005.
 
 
 
During June 2005, the Company reclassified as held-for-sale a shopping center property comprising approximately 0.2 million square feet of GLA.  The book value of this property of approximately $25.1 million, net of accumulated depreciation of approximately $1.0 million, did not exceed its estimated fair value.  As a result, no adjustment of property carrying value had been recorded.  The Company’s determination of the fair value of this property of approximately $39.3 million, was based upon an executed contract of sale with a third party less estimated selling costs.
 
 
 
During December 2004, the Company reclassified as held-for-sale a shopping center property located in Melbourne, FL, comprising approximately 0.1 million square feet of GLA.  The operations associated with this property for the current and comparative
 
84
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
years, have been included in the caption Income from discontinued operations on the Company’s Consolidated Statements of Income.
 
 
 
During March 2004, the Company reclassified as held-for-sale two shopping center properties comprising approximately 0.3 million square feet of GLA.  The book value of these properties, aggregating approximately $8.7 million, net of accumulated depreciation of approximately $4.2 million, exceeded their estimated fair value.  The Company’s determination of the fair value of these properties, aggregating approximately $4.5 million, was based upon contracts of sale with third parties less estimated selling costs.  As a result, the Company had recorded a loss resulting from an adjustment of property carrying values of $4.2 million.  During March 2004, the Company completed the sale of one of these properties, comprising approximately 0.1 million square feet of GLA, for a sales price of approximately $1.1 million.  During June 2004, the Company completed the sale of the other property, comprising approximately 0.2 million square feet of GLA, for a sales price of approximately $3.9 million.  The loss associated with these transactions along with the related property operations for the current and comparative years, has been included in the caption Income from discontinued operations on the Company’s Consolidated Statements of Income.
 
 
 
During December 2003, the Company identified two operating properties, comprised of approximately 0.2 million square feet of GLA, as held-for-sale.  The book value of these properties, aggregating approximately $19.4 million, net of accumulated depreciation of approximately $2.1 million, exceeded their estimated fair value.  The Company’s determination of the fair value of these properties, aggregating approximately $15.4 million, was based upon contracts of sale with third parties less estimated selling costs.  As a result, the Company recorded a loss resulting from an adjustment of property carrying values of approximately $4.0 million.  This adjustment is included, along with the related property operations for the current and comparative years, in the caption Income from discontinued operations on the Company’s Consolidated Statements of Income.
 
 
 
During 2003, the Company reached agreement with certain lenders in connection with three individual non-recourse mortgages encumbering three former Kmart sites.  The Company paid approximately $14.2 million in full satisfaction of these loans, which aggregated approximately $24.0 million.  As a result of these transactions, the Company recognized a gain on early extinguishment of debt of approximately $9.7 million during 2003, of which $6.8 million is included in Income from discontinued operations.
 
 
7.
Investment and Advances in Real Estate Joint Ventures:
 
 
 
Kimco Income REIT (“KIR”) -
 
 
 
During 1998, the Company formed KIR, an entity that was established for the purpose of investing in high quality real estate properties financed primarily with individual non-recourse mortgages.  These properties include, but are not limited to, fully developed properties with strong, stable cash flows from credit-worthy retailers with long-term leases.  The Company originally held a 99.99% limited partnership interest in KIR.  Subsequent to KIR’s formation, the Company sold a significant portion of its original interest to an institutional investor and admitted three other limited partners.  KIR had received total capital commitments of $569.0 million, of which the Company subscribed for $247.0 million and the four limited partners subscribed for $322.0 million.  During 2004, the KIR partners elected to cancel the remaining unfunded capital commitments of $99.0 million, including $42.9 million from the Company.  As of December 31, 2005, the Company had a 43.3% non-controlling limited partnership interest in KIR.
 
 
 
In addition, KIR entered into a master management agreement with the Company, whereby the Company will perform services for fees related to management, leasing, operations, supervision and maintenance of the joint venture properties.  For the years ended December 31, 2005, 2004 and 2003, the Company (i) earned management fees of approximately $3.1 million, $2.9 million and $2.9 million, respectively, (ii) received reimbursement of administrative fees of approximately $0.5 million, $0.4 million and $0.4 million, respectively, and (iii) earned leasing commissions of approximately $0.3 million, $0.3 million and $0.5 million, respectively.
 
 
 
During March 2005, KIR disposed of an operating property and an out-parcel, in separate
 
85
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
transactions, for an aggregate sale price of approximately $43.1 million.  These sales resulted in an aggregate gain of approximately $17.8 million of which the pro-rata gain to the Company was approximately $7.7 million.  In connection with the sale of the operating property, KIR incurred a $2.0 million loan defeasance charge, of which the Company’s pro-rata share was approximately $0.9 million.
 
 
 
During October 2005, KIR sold an operating property for a sales price of approximately $8.1 million.  This sale resulted in a gain of approximately $2.4 million of which the pro-rata gain to the Company was approximately $1.0 million.
 
 
 
During March 2005, KIR purchased a shopping center property located in Delran, NJ, for approximately $4.6 million.
 
 
 
In April 2005, KIR entered into a three-year $30.0 million unsecured revolving credit facility which bears interest at LIBOR plus 1.40%.  As of December 31, 2005, there were no amounts outstanding under this credit facility.
 
 
 
During April 2004, KIR disposed of an operating property located in Las Vegas, NV, for a sales price of approximately $21.5 million, which approximated its net book value.
 
 
 
As of December 31, 2005, the KIR portfolio was comprised of 68 shopping center properties aggregating approximately 14.2 million square feet of GLA located in 20 states.
 
 
 
RioCan Investments -
 
 
 
During October 2001, the Company formed a joint venture (the “RioCan Venture”) with RioCan Real Estate Investment Trust (“RioCan”) in which the Company has a 50% non-controlling interest, to acquire retail properties and development projects in Canada. The acquisition and development projects are to be sourced and managed by RioCan and are subject to review and approval by a joint oversight committee consisting of RioCan management and the Company’s management personnel.  Capital contributions will only be required as suitable opportunities arise and are agreed to by the Company and RioCan.
 
 
 
During April 2004, the RioCan Venture acquired an operating property located in Mississauga, Ontario, comprising approximately 0.2 million square feet of GLA, for a purchase price of approximately CAD $44.2 million (approximately USD $32.3 million).  During August 2004, the RioCan Venture obtained approximately CAD $28.7 million (approximately USD $21.6 million) of mortgage debt on this property.  The loan bears interest at a fixed rate of 6.37% with payments of principal and interest due monthly. The loan is scheduled to mature in August of 2014.
 
 
 
As of December 31, 2005, the RioCan Venture was comprised of 34 operating properties and one development property consisting of approximately 8.1 million square feet of GLA.
 
 
 
Kimco / G.E. Joint Venture (“KROP”)
 
 
 
During 2001, the Company formed a joint venture (the “Kimco Retail Opportunity Portfolio” or “KROP”) with GE Capital Real Estate (“GECRE”), in which the Company has a 20% non-controlling interest and manages the portfolio.  The purpose of this joint venture is to acquire established high-growth potential retail properties in the United States.  Total capital commitments to KROP from GECRE and the Company are for $200.0 million and $50.0 million, respectively, and such commitments are funded proportionately as suitable opportunities arise and are agreed to by GECRE and the Company.
 
 
 
During 2005, GECRE and the Company contributed approximately $21.2 million and $5.3 million, respectively, toward their capital commitments.  As of December 31, 2005, KROP had unfunded capital commitments of $28.5 million, including $5.7 million by the Company.  Additionally, GECRE and the Company provided short-term interim financing for all acquisitions made by KROP without a mortgage in place at the time of acquisition.  All such financing bears interest at rates ranging from LIBOR plus 4.0% to LIBOR plus 5.25% and have maturities of less than one year.  As of December 31, 2005 and 2004, there were no outstanding short-term interim financing due to GECRE or the Company.
 
 
 
During 2005, KROP acquired four operating properties and one out-parcel, in separate
 
86
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
transactions, for an aggregate purchase price of approximately $74.6 million, including the assumption of approximately $26.2 million of individual non-recourse mortgage debt encumbering two of the properties and preferred units of approximately $4.2 million associated with another property.
 
 
 
During 2005, KROP disposed of three unencumbered operating properties and two out-parcels, in separate transactions, for an aggregate sales price of approximately $60.3 million. These sales resulted in an aggregate gain of approximately $18.3 million of which the Company’s pro-rata share was approximately $3.7 million.
 
 
 
During 2005, KROP obtained ten-year individual non-recourse, non-crossed collateralized fixed-rate mortgages aggregating approximately $21.9 million on two of its previously unencumbered properties with rates ranging from 5.2% to 5.3%.
 
 
 
During 2005, KROP obtained two non-recourse, non-crossed collateralized variable rate mortgages for a total of $25.7 million on two properties with rates of LIBOR plus 1.30% and 1.65% with terms of two and three years, respectively.
 
 
 
During 2004, KROP acquired 19 operating properties for an aggregate purchase price of approximately $242.6 million, including the assumption of approximately $63.5 million of individual non-recourse mortgage debt encumbering eight of the properties.
 
 
 
During 2004, KROP disposed of five operating properties and three out-parcels for an aggregate sales price of approximately $65.8 million, including the assignment of approximately $7.2 million of non-recourse mortgage debt encumbering one of the properties.  These sales resulted in an aggregate gain of approximately $20.2 million.
 
 
 
During 2004, KROP obtained one non-recourse, cross-collateralized, fixed-rate mortgage aggregating $30.7 million on four properties with a rate of 4.74% for five years.  KROP also obtained individual non-recourse, non-cross-collateralized fixed-rate mortgages aggregating approximately $22.0 million on two of its previously unencumbered properties with rates ranging from 5.0% to 5.1% with terms of five years.
 
 
 
During 2004, KROP obtained one non-recourse, cross-collateralized, variable-rate mortgage aggregating $54.4 million on six properties with a rate of LIBOR plus 2.25% with a term of two years.  KROP also obtained one non-recourse, non-cross collateralized variable rate mortgage for $23.2 million on one of its previously unencumbered properties with a rate of LIBOR plus 1.8% with a three-year term.  In order to mitigate the risks of interest rate fluctuations associated with these variable-rate obligations, KROP entered into interest rate cap agreements for the notional values of these mortgages.
 
 
 
As of December 31, 2005, the KROP portfolio was comprised of 38 shopping center properties aggregating approximately 5.6 million square feet of GLA located in 14 states.
 
 
 
Other Real Estate Joint Ventures –
 
 
 
The Company and its subsidiaries have investments in and advances to various other real estate joint ventures.  These joint ventures are engaged primarily in the operation and development of shopping centers which are either owned or held under long-term operating leases.
 
 
 
During December 2004, the Company acquired the Price Legacy Corporation through a newly formed joint venture, PL Retail LLC (“PL Retail”), in which the Company has a 15% non-controlling interest and manages the portfolio.  In connection with this transaction, PL Retail acquired 33 operating properties aggregating approximately 7.6 million square feet of GLA located in ten states.  To partially fund the acquisition, the Company provided PL Retail approximately $30.6 million of secured mezzanine financing. This interest-only loan bears interest at a fixed rate of 7.5% and matures in December 2006.  The Company also provided PL Retail a secured short-term promissory note of approximately $8.2 million. This interest only note bore interest at LIBOR plus 4.50% and was scheduled to mature in June 2005. During 2005, this note was amended to bear interest at LIBOR plus 6.0% and is now payable on demand. During the year ended December 31, 2005, PL Retail disposed of nine operating properties, in separate transactions, for an aggregate sales price of approximately $81.4 million, which represented the approximate carrying values of the properties.  Proceeds of
 
87
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
approximately $22.0 million were used to partially repay the mezzanine financing that was provided by the Company.  As of December 31, 2005, PL Retail had approximately $8.9 million outstanding on the mezzanine financing and approximately $8.2 million outstanding on the promissory note.  As of December 31, 2005, PL Retail consisted of 25 operating properties aggregating approximately 6.8 million square feet of GLA and had approximately $777.3 million outstanding in non-recourse mortgage debt, of which approximately $507.2 million had fixed rates ranging from 4.66% to 9.00% and approximately $270.1 had variable rates ranging from 5.74% to 9.59%.  The fixed-rate loans have maturities ranging from 3-to-11 years and the variable-rate loans have maturities ranging from one-to-three years.
 
 
 
During March 2005, a joint venture in which the Company has a 50% non-controlling interest, disposed of two vacant land parcels located in Glendale, AZ, in separate transactions, for an aggregate sales price of approximately $9.9 million.  These sales resulted in an aggregate gain of approximately $4.8 million, of which the Company’s share was approximately $2.4 million.
 
 
 
Additionally, during March 2005, the Company transferred 50% of the Company’s 95% interest in a developed property located in Huehuetoca, Mexico, to a joint venture partner for approximately $5.3 million, which approximated its carrying value.  As a result of this transaction, the Company now holds a 47.5% non-controlling interest and has deconsolidated the investment.  The Company now accounts for its investment under the equity method of accounting.
 
 
 
During April 2005, the Company acquired an operating property located in Hillsborough, NJ, comprising approximately 0.1 million square feet of GLA, through a newly formed joint venture in which the Company has a 50% non-controlling interest.  The property was acquired for approximately $4.0 million including the assumption of approximately $1.9 million of non-recourse mortgage debt encumbering the property.  Subsequent to the purchase the joint venture obtained a $3.2 million one-year term loan which bears interest at LIBOR plus 0.55% (4.94% at December 31, 2005).  This loan is jointly and severally guaranteed by the joint venture partners, including the Company.  Proceeds from this loan were used to repay the $1.9 million mortgage encumbering the property.
 
 
 
During May 2005, the Company acquired a hotel property located in Cancun, Mexico, through a newly formed joint venture in which the Company has an 80% non-controlling interest. The property was purchased for approximately $19.7 million.  Simultaneous with the closing, the property was encumbered with $12.4 million of non-recourse mortgage debt which bears interest at a fixed rate of 7.63% per annum and matures during May 2010.  During 2005, the property incurred significant hurricane damage which has temporarily suspended operations.  The Company believes that its property insurance and business interruption insurance will adequately cover losses associated with this event.
 
 
 
During May 2005, the Company acquired a $10.2 million mortgage receivable through a newly formed joint venture in which the Company has a 50% non-controlling interest.  The mortgage encumbered a property located in Derby, CT, comprising approximately 0.1 million square feet of GLA.  During October 2005, the joint venture foreclosed on the property and obtained fee title.
 
 
 
During June 2005, the Company acquired an additional 25% interest in a joint venture in which the Company had previously held a 7.77% interest for approximately $26.0 million.  This joint venture owns an operating property, comprised of approximately 0.5 million square feet of GLA, located in Fremont, CA.  During December 2005, the Company sold a portion of its interest in this joint venture to a new partner who purchased 70% of this partnership.  The Company now has a 30% non-controlling interest in this joint venture and accounts for its investment under the equity method of accounting.
 
 
 
During July 2005, the Company acquired an interest in an office property located in Houston, TX, comprising approximately 0.6 million square feet of GLA through a newly formed joint venture in which the Company has an 85% non-controlling interest.  The Company’s investment in the joint venture was approximately $12.2 million.  The joint venture purchased the property for approximately $91.1 million subject to $76.5 million of non-recourse mortgage debt which bears interest at a fixed-rate of 5.15% per annum and matures during August 2015.  The Company accounts for this investment under the equity method of accounting.
 
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KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
Additionally, during July 2005, the Company transferred a developed property located in Reynosa, Mexico, to a newly formed joint venture in which the Company has a 50% non-controlling interest, for a price of approximately $6.9 million.  The Company now accounts for this investment under the equity method of accounting.
 
 
 
During October 2005, the Company acquired interests in 57 industrial properties located in Mexico, through a newly formed joint venture in which the Company has a 50% non-controlling interest, for a purchase price of approximately $277.5 million, including the assumption of approximately $167.0 million of non-recourse mortgage debt encumbering 52 properties.  The properties comprise approximately 5.6 million square feet of GLA.
 
 
 
Additionally, during 2005, the Company acquired, in separate transactions, 12 operating properties comprising approximately 1.7 million square feet of GLA, through newly formed joint ventures in which the company has non-controlling interests ranging from 5% to 50%.  The aggregate purchase price for these properties was approximately $265.6 million, including the assumption of approximately $29.1 million of non-recourse mortgage debt encumbering three of the properties.  The Company accounts for its investment in these joint ventures under the equity method of accounting.
 
 
 
During September 2005, the Company transferred 45 operating properties, comprising approximately 0.3 million square feet of GLA, located in Virginia and Maryland to a newly formed unconsolidated joint venture in which the Company has a 15% non-controlling interest.  The transfer price was approximately $85.3 million including the assignment of approximately $65.0 million of cross-collateralized non-recourse mortgage debt encumbering all of the properties.
 
 
 
Additionally, during 2005, the Company transferred, in separate transactions, five operating properties comprising approximately 0.7 million square feet of GLA, to newly formed joint ventures in which the Company has 20% non-controlling interests, for an aggregate price of approximately $85.6 million, including the assignment of approximately $40.2 million of mortgage debt encumbering three of the properties.
 
 
 
During January 2004, the Company acquired a property located in Marlborough, MA, through a joint venture in which the Company has a 40% non-controlling interest.  The property was acquired for a purchase price of approximately $26.5 million, including the assumption of approximately $21.2 million of non-recourse mortgage debt encumbering the property.
 
 
 
During September 2004, the Company acquired a property located in Pompano, FL, comprising approximately 0.1 million square feet of GLA, through a newly formed joint venture in which the Company has a 20% non-controlling interest, for approximately $20.4 million.
 
 
 
During October 2004, the Company transferred 50% of the Company’s 90% interest in an operating property located in Juarez, Mexico to a joint venture partner for approximately USD $5.4 million, which approximated its carrying value.  As a result of this transaction, the Company now holds a 45% non-controlling interest in this property and now accounts for its investment under the equity method of accounting.
 
 
 
Additionally during October 2004, the Company acquired an operating property located in Valdosta, GA, comprising approximately 0.2 million square feet of GLA, through a newly formed joint venture in which the Company has a 50% non-controlling interest.  The property was acquired for a purchase price of approximately $10.7 million, including the assumption of approximately $8.0 million of non-recourse mortgage debt encumbering the property.
 
 
 
Also during December 2004, the Company acquired an operating property located in Bellevue, WA, comprising approximately 0.5 million square feet of GLA, through a joint venture in which the Company has a 50% non-controlling interest, for approximately $102.0 million.
 
 
 
During 2004, the Company transferred 12 operating properties, comprising approximately 1.5 million square feet of GLA, to a newly formed joint venture in which the Company has a 15% non-controlling interest, for a price of approximately $269.8 million, including an aggregate $161.2 million of individual non-recourse mortgage debt
 
89
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
encumbering the properties.  Simultaneously with the transfer, the Company entered into a management agreement whereby the Company will perform services for fees related to management, leasing, operations, supervision and maintenance of the joint venture properties.  In addition, the Company will earn fees related to the acquisition and disposition of properties by the venture.  During 2004, the Company earned management fees and acquisition fees of approximately $1.1 million and $1.3 million, respectively.
 
 
 
Additionally during 2004, the Company transferred, in separate transactions, eight operating properties comprising approximately 1.5 million square feet of GLA, to newly formed joint ventures in which the Company has non-controlling interests ranging from 10% to 30%, for an aggregate price of approximately $216.0 million, including the assignment of approximately $95.5 million of non-recourse mortgage debt and $24.1 million of downReit units.
 
 
 
Summarized financial information for these real estate joint ventures is as follows (in millions):
 
 
 
December 31,
 
 
 
 
 
 
2005
 
2004
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
Real estate, net
 
$
6,470.4
 
$
5,451.0
 
Other assets
 
 
308.5
 
 
200.5
 
 
 
 
 
 
 
$
6,778.9
 
$
5,651.5
 
 
 
 
 
Liabilities and Partners’ Capital:
 
 
 
 
 
 
 
Mortgages payable
 
$
4,443.6
 
$
3,781.0
 
Notes payable
 
 
58.7
 
 
40.0
 
Construction loans
 
 
69.6
 
 
29.1
 
Other liabilities
 
 
144.0
 
 
115.5
 
Minority interest
 
 
81.9
 
 
36.5
 
Partners’ capital
 
 
1,981.1
 
 
1,649.4
 
 
 
 
 
 
 
$
6,778.9
 
$
5,651.5
 
 
 
 
 
 
 
 
Year Ended December 31,
 
 
 
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Revenues from rental property
 
$
759.0
 
$
545.8
 
$
423.3
 
 
 
 
 
 
Operating expenses
 
 
(214.0
)
 
(155.6
)
 
(119.2
)
Interest
 
 
(247.1
)
 
(171.0
)
 
(137.9
)
Depreciation and amortization
 
 
(153.7
)
 
(97.1
)
 
(66.4
)
Other, net
 
 
(8.4
)
 
(5.8
)
 
(9.3
)
 
 
 
 
 
 
 
 
(623.2
)
 
(429.5
)
 
(332.8
)
 
 
 
 
 
Income from continuing operations
 
 
135.8
 
 
116.3
 
 
90.5
 
Discontinued Operations:
 
 
 
 
 
 
 
 
 
 
Income/(loss) from discontinued operations
 
 
(1.7
)
 
1.8
 
 
3.7
 
Gain on dispositions of properties
 
 
52.5
 
 
20.2
 
 
0.0
 
 
 
 
 
 
Net income
 
$
186.6
 
$
138.3
 
$
94.2 
 
 
 
 
 
 
 
 
Other liabilities in the accompanying Consolidated Balance Sheets include accounts with certain real estate joint ventures totaling approximately $13.2 million and $13.7 million at December 31, 2005 and 2004, respectively. The Company and its subsidiaries have varying equity interests in these real estate joint ventures, which may differ from their proportionate share of net income or loss recognized in accordance with generally accepted accounting principles.
 
 
 
The Company’s maximum exposure to losses associated with its unconsolidated joint ventures is primarily limited to its carrying value in these investments.  As of
 
90
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
December 31, 2005 and 2004, the Company’s carrying value in these investments approximated $735.6 million and $595.2 million, respectively.
 
 
8.
Other Real Estate Investments:
 
 
 
Preferred Equity Capital -
 
 
 
The Company maintains a Preferred Equity program, which provides capital to developers and owners of real estate properties.  During 2005, the Company provided, in separate transactions, an aggregate of approximately $84.3 million in investment capital to developers and owners of 79 real estate properties.  During 2004, the Company provided, in separate transactions, an aggregate of approximately $101.0 million in investment capital to developers and owners of 54 real estate properties.  As of December 31, 2005, the Company’s net investment under the Preferred Equity program was approximately $225.9 million relating to 131 properties. For the years ended December 31, 2005, 2004 and 2003, the Company earned approximately $32.8 million, including $12.6 million from promoted interests earned from six capital transactions, $11.4 million, including $3.9 million from promoted interests earned from four capital transactions, and  $4.6 million, including $1.7 million from promoted interests earned from two capital transactions, respectively, from these investments.
 
 
 
Summarized financial information relating to the Company’s preferred equity investments is as follows (in millions):
 
 
 
 December 31,
 
 
 
2005
 
2004
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
Real estate, net
 
$
945.0
 
$
715.5
 
Other assets
 
 
65.5
 
 
29.3
 
 
 
 
 
 
 
$
1,010.5
 
$
744.8
 
 
 
 
 
Liabilities and Partners’ Capital:
 
 
 
 
 
 
 
Notes and mortgages payable
 
$
703.3
 
$
548.3
 
Other liabilities
 
 
19.7
 
 
15.4
 
Partners’ capital
 
 
287.5
 
 
181.1
 
 
 
 
 
 
 
$
1,010.5
 
$
744.8
 
 
 
 
 
 
 
 
 Year Ended December 31,
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Revenues from Rental Property
 
$
118.5
 
$
61.6
 
$
38.8
 
 
 
 
 
 
Operating expenses
 
 
(42.0
)
 
(19.4
)
 
(12.2
)
Interest
 
 
(38.9
)
 
(21.2
)
 
(16.1
)
Depreciation and amortization
 
 
(19.3
)
 
(9.6
)
 
(5.3
)
Other, net
 
 
(1.2
)
 
(0.3
)
 
—
 
 
 
 
 
 
 
 
 
(101.4
)
 
(50.5
)
 
(33.6
)
 
 
 
 
 
 
 
 
17.1
 
 
11.1
 
 
5.2
 
Gain on disposition of properties
 
 
49.8
 
 
4.4
 
 
0.8
 
 
 
 
 
 
Net income
 
$
66.9
 
$
15.5
 
$
6.0
 
 
 
 
 
 
 
 
The Company’s maximum exposure to losses associated with its Preferred Equity investments is primarily limited to its invested capital.  As of December 31, 2005 and 2004, the Company’s invested capital in its Preferred Equity investments approximated $225.9 million and $157.0 million, respectively.
 
 
 
Investment in Retail Store Leases -
 
 
 
The Company has interests in various retail store leases relating to the anchor store premises in neighborhood and community shopping centers.  These premises have been sublet to retailers who lease the stores pursuant to net lease agreements.  Income from the investment in these retail store leases during the years ended December 31, 2005, 2004 and 2003, was approximately $9.1 million, $3.9 million and $0.3 million, respectively. These amounts represent sublease revenues during the years ended December 31, 2005, 2004 and 2003, of approximately $17.8 million, $13.3 million and $12.3 million, respectively, less related expenses of $7.4 million, $8.0 million and $10.6 million, respectively, and an amount which, in management’s estimate, reasonably provides for the recovery of the investment over a period representing the expected remaining term of the retail store leases.  The Company’s future minimum revenues under the terms of all non-cancelable tenant subleases and future minimum obligations through the remaining terms of its retail store leases, assuming no new or renegotiated leases are executed for such premises, for future years are as follows (in millions): 2006, $7.7 and $5.2; 2007, $7.1 and $4.4; 2008, $5.7 and $3.3; 2009, $4.4 and $2.4; 2010, $3.6 and $2.0; and thereafter, $3.4 and $2.1, respectively.
 
91
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
Kimsouth -
 
 
 
During November 2002, the Company, through its taxable REIT subsidiary, together with Prometheus Southeast Retail Trust, completed the merger and privatization of Konover Property Trust, which has been renamed Kimsouth Realty, Inc., (“Kimsouth”).  The Company acquired 44.5% of the common stock of Kimsouth, which consisted primarily of 38 retail shopping center properties comprising approximately 4.6 million square feet of GLA.  Total acquisition value was approximately $280.9 million, including approximately $216.2 million in assumed mortgage debt.  The Company’s non-controlling investment in Kimsouth differs from its share of historical net book value of assets and liabilities of Kimsouth.  The Company’s investment strategy with respect to Kimsouth includes re-tenanting, repositioning and disposition of the properties.
 
 
 
During 2005, Kimsouth disposed of seven shopping center properties, in separate transactions, for an aggregate sales price of approximately $78.9 million, including the assignment of approximately $23.7 million of mortgage debt encumbering two of the properties.  During 2005, the Company recognized pre-tax profits from the Kimsouth investment of approximately $4.9 million, which is included in the caption Income from Other Real Estate Investments on the Company’s consolidated Statements of Income.
 
 
 
During 2004, Kimsouth disposed of 11 shopping center properties, in separate transactions, for an aggregate sales price of approximately $110.2 million, including the assignment of approximately $2.7 million of mortgage debt encumbering one of the properties.  During 2004, the Company recognized pre-tax profits from the Kimsouth investment of approximately $10.6 million, which is included in the caption Income from Other Real Estate Investments on the Company’s Consolidated Statements of Income.
 
 
 
During 2003, Kimsouth disposed of 14 shopping center properties, in separate transactions, for an aggregate sales price of approximately $84.0 million, including the assignment of approximately $18.4 million of mortgage debt encumbering six of the properties.  During 2003, the Company recognized pre-tax profits from the Kimsouth investment of approximately $12.1 million.
 
 
 
Selected financial information for Kimsouth is as follows (in millions):
 
 
 
December 31,
 
 
 
2005
 
2004
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
Real estate held for sale
 
 $
56.7
 
$ 
111.5
 
Other assets
 
 
6.5
 
 
7.6
 
 
 
 
 
 
 
$
63.2
 
$
119.1
 
 
 
 
 
Liabilities and Stockholders’ Equity:
 
 
 
 
 
 
 
Mortgages payable
 
$
 29.4
 
$
77.5
 
Other liabilities
 
 
   0.7
 
 
1.5
 
Stockholders’ equity
 
 
33.1
 
 
40.1
 
 
 
 
 
 
 
$
63.2
 
$
119.1
 
 
 
 
 
 
92
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
 
Year Ended December 31,
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Discontinued Operations
 
 
 
 
 
 
 
 
 
 
Revenues from rental property
 
$
9.0
 
$
21.8
 
$
34.4
 
Operating expenses
 
 
(6.9
)
 
(7.5
)
 
(10.5
)
Interest
 
 
(3.1
)
 
(7.9
)
 
(13.7
)
Depreciation and amortization
 
 
(0.3
)
 
(4.5
)
 
(9.5
)
Other, net
 
 
(0.5
)
 
(0.4
)
 
(0.1
)
 
 
 
 
 
 
 
 
(1.8
)
 
1.5
 
 
0.6
 
Gain on disposition of properties
 
 
12.6
 
 
8.7
 
 
12.8
 
Adjustment of property carrying values
 
 
(2.4
)
 
(14.3
)
 
—
 
 
 
 
 
 
Net income/(loss) from discontinued operations
 
$
8.4
 
$
(4.1
)
$
13.4
 
 
 
 
 
 
 
 
As of December 31, 2005, the Kimsouth portfolio was comprised of five properties, including the remaining office component of an operating property sold in 2004, aggregating approximately 1.2 million square feet of GLA located in four states.
 
 
 
Leveraged Lease -
 
 
 
During June 2002, the Company acquired a 90% equity participation interest in an existing leveraged lease of 30 properties.  The properties are leased under a long-term bond-type net lease whose primary term expires in 2016, with the lessee having certain renewal option rights.  The Company’s cash equity investment was approximately $4.0 million.  This equity investment is reported as a net investment in leveraged lease in accordance with SFAS No. 13, Accounting for Leases (as amended). 
 
 
 
During 2002 and 2003, eight of these properties were sold, whereby the proceeds from the sales were used to pay down the mortgage debt by approximately $18.7 million.
 
 
 
During 2004, three properties were sold, whereby the proceeds from the sales were used to pay down the mortgage debt by approximately $5.5 million.
 
 
 
During 2005, an additional three properties were sold, whereby the proceeds from the sales were used to pay down the mortgage debt by approximately $2.9 million.  As of December 31, 2005, the remaining 16 properties were encumbered by third-party non-recourse debt of approximately $52.8 million that is scheduled to fully amortize during the primary term of the lease from a portion of the periodic net rents receivable under the net lease.
 
 
 
As an equity participant in the leveraged lease, the Company has no recourse obligation for principal or interest payments on the debt, which is collateralized by a first mortgage lien on the properties and collateral assignment of the lease.  Accordingly, this obligation has been offset against the related net rental receivable under the lease.
 
 
 
At December 31, 2005 and 2004, the Company’s net investment in the leveraged lease consisted of the following (in millions):
 
 
 
2005
 
2004
 
 
 
 
 
Remaining net rentals
 
$
68.9
 
$
72.5
 
Estimated unguaranteed residual value
 
 
43.8
 
 
48.8
 
Non-recourse mortgage debt
 
 
(52.8
)
 
(58.4
)
Unearned and deferred income
 
 
(55.9
)
 
(59.1
)
 
 
 
 
Net investment in leveraged lease
 
$
4.0
 
$
3.8
 
 
 
 
 
 
 
Ward Venture -
 
 
 
During March 2001, through a taxable REIT subsidiary, the Company formed a real estate joint venture (the “Ward Venture”), in which the Company has a 50% interest, for purposes of acquiring asset designation rights for substantially all of the real estate property interests of the bankrupt estate of Montgomery Ward LLC and its affiliates.  These asset designation rights have provided the Ward Venture the ability to direct the ultimate disposition of the 315 fee and leasehold interests held by the bankrupt estate.  The asset designation rights expired in August 2002 for the
 
93
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
leasehold positions and expired in December 2004 for the fee-owned locations.  During the marketing period, the Ward Venture was responsible for all carrying costs associated with the properties until the property was designated to a user.  During 2004, the one remaining property was sold pursuant to an installment sales agreement.  Per the agreement, the purchase price for this property will be paid by November 15, 2006.
 
 
 
During 2004, the Ward Venture completed transactions on four properties and the Company recognized pre-tax profits of approximately $2.5 million. 
 
 
 
During 2003, the Ward Venture completed transactions on seven properties and the Company recognized pre-tax profits of approximately $3.5 million.
 
 
9.
Mortgages and Other Financing Receivables:
 
 
 
During May 2002, the Company provided a secured $15 million three-year term loan and a secured $7.5 million revolving credit facility to Frank’s at an interest rate of 10.25% per annum collateralized by 40 real estate interests.  Interest is payable quarterly in arrears.  During 2003, the revolving credit facility was amended to increase the total borrowing capacity to $17.5 million. During January 2004, the revolving loan was further amended to provide up to $33.75 million of borrowings from the Company.  During September 2004, Frank’s filed for protection under Chapter 11 of the U.S. Bankruptcy Code.  The Company committed to provide an additional $27.0 million of Debtor-in-Possession financing with a term of one year at an interest rate of Prime plus 1.00% per annum.  During July 2005, Frank’s emerged from bankruptcy as FNC and repaid all outstanding amount owed to the Company under the revolving credit facility and Debtor-in-Possession agreement (See Note 3 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K).
 
 
 
During April 2005, the Company provided a construction loan commitment of up to 53.5 million Mexican Pesos (“MXP”) (approximately USD $5.0 million) to a developer for the construction of a new retail center in Acapulco, Mexico.  The loan bears interest at a fixed rate of 11.75% and provides for an additional 20% participation of property cash flow, as defined.  This facility is initially interest only and then converts to an amortizing loan at the earlier of 120 days after construction completion or upon opening of the anchor tenant.  This facility is collateralized by the related property and matures in May 2015.  As of December 31, 2005, there was approximately MXP 53.5 million (USD $5.0 million) outstanding on this loan.
 
 
 
Additionally, during April 2005, a newly formed joint venture, in which the Company has a 50% non-controlling interest, provided a retailer with a three-year $28.0 million revolving line of credit at a floating interest rate of Prime plus 5.5% per annum.  The facility also provides for a 3.0% unused line fee and a 2.50% origination fee.  The facility is collateralized by certain real estate interests of the borrower.  As of December 31, 2005, the outstanding balance on this facility was $10.2 million of which the Company’s share was $5.2 million.
 
 
 
During May 2005, a newly formed joint venture, in which the Company has a 44.38% non-controlling interest, provided Debtor-in-Possession financing to a healthcare facility that recently filed for bankruptcy and is closing its operations.  The term of this loan is two years and bears interest at Prime plus 2.5%.  The loan is collateralized by a hospital building, a six-story commercial building, a 12-story 133-unit apartment complex and various other building structures.  The Company’s share of the outstanding balance of this loan at December 31, 2005, is $2.9 million.
 
 
 
Additionally, during May 2005, the Company acquired four mortgage loans collateralized by individual properties with an aggregate face value of approximately $16.6 million for approximately $14.3 million.  These performing loans, which provide for monthly payments of principal and interest, bear interest at a fixed-rate of 7.57% and mature on June 1, 2019.  As of December 31, 2005, there was an aggregate of approximately $14.1 million outstanding on these loans.
 
 
 
During September 2005, a newly formed joint venture, in which the Company has an 80% interest, acquired a $43.6 million mortgage receivable for a purchase price of approximately $34.2 million.  The loan bears interest at a rate of three-month LIBOR plus 2.75% per annum and matures on January 12, 2010.  The loan is collateralized by a
 
94
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
626 room hotel located in Lake Buena Vista, FL.  The Company has determined that this entity is a VIE and has further determined that the Company is the primary beneficiary of this VIE and has therefore consolidated it for financial reporting purposes.  As of December 31, 2005, the outstanding loan balance, net of discount, was approximately $35.0 million.
 
 
 
During October 2005, the Company provided a construction loan commitment of up to $38.1 million to a developer for acquisition and re-development of a retail center located in Richland Township, PA.  The loan is interest only at a rate of LIBOR plus 220 basis points and matures in October of 2007.  As of December 31, 2005, the outstanding balance on this loan was approximately $3.2 million.
 
 
 
During March 2002, the Company provided a $50.0 million ten-year loan to Shopko Stores, Inc., at an interest rate of 11.0% per annum collateralized by 15 properties.  The Company receives principal and interest payments on a monthly basis.  During January 2003, the Company sold a $37.0 million participation interest in this loan to an unaffiliated third party.  The interest rate on the $37.0 million participation interest is a variable rate based on LIBOR plus 3.50%.  The Company continued to act as the servicer for the full amount of the loan.  During December 2005, Shopko elected to prepay the outstanding loan balance of approximately $46.7 million in full satisfaction of this loan.  Shopko, also paid a prepayment penalty to the Company of $14.0 million.
 
 
 
During December 2005, the Company provided a construction loan commitment of up to MXP 39.9 million (approximately USD $3.7 million) to a developer for the construction of a new retail center in Magno Deco, Mexico.  The loan bears interest at a fixed rate of 11.75% and provides for an additional 20% participation of property cash flow, as defined.  This loan is collateralized by the related property and matures in May 2015. As of December 31, 2005, there was approximately MXP 38.7 million (USD $3.6 million) outstanding on this loan.
 
 
 
During July 2004, the Company provided an $11.0 million five-year term loan to a retailer at a floating interest rate of Prime plus 3.0% per annum or, at the borrower’s election, LIBOR plus 5.5% per annum.  The facility was interest only, payable monthly in arrears and was collateralized by certain real estate interests of the borrower.  During December 2005, the borrower elected to prepay the outstanding loan balance of $11.0 million in full satisfaction of this loan.
 
 
 
During March 2002, the Company provided a $15.0 million three-year term loan to Gottchalks, Inc., at an interest rate of 12.0% per annum collateralized by three properties.  The Company received principal and interest payments on a monthly basis. During March 2004, Gottchalks, Inc., elected to prepay the remaining outstanding loan balance of approximately $13.2 million in full satisfaction of this loan.
 
 
 
During 2003, the Company provided a five-year $3.5 million term loan to Grass America, Inc. (“Grass America”) at an interest rate of 12.25% per annum collateralized by certain real estate interests of Grass America.  The Company received principal and interest payments on a monthly basis.  During May 2004, Grass America elected to prepay the remaining outstanding loan balance of approximately $3.5 million in full satisfaction of this loan.
 
 
 
During April 2004, the Company provided a $2.7 million term loan at a fixed rate of 11.0% and a $4.1 million revolving line of credit at a fixed rate of 12.0% to a retailer.  Both facilities are interest only, payable monthly and mature May 1, 2007.  As of December 31, 2005, the aggregate outstanding loan balance of these facilities was approximately $4.0 million.
 
 
 
During May 2004, the Company provided a construction loan commitment of up to MXN 51.5 million (approximately USD $4.7 million) to a developer for the construction of a retail center in Cancun, Mexico.  The loan bears interest at a fixed rate of 11.25% and provides for an additional 20% participation of property cash flows, as defined.  This facility is initially interest only and then converts to an amortizing loan at the earlier of 120 days after construction completion or upon opening of the grocery anchor tenant.  This facility is collateralized by the related property and matures in May 2014.  As of December 31, 2005, there was approximately MXN 46.9 million (USD $4.4 million) outstanding on this loan.
 
95
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
During September 2004, the Company acquired a $3.5 million mortgage receivable for $2.7 million.  The interest rate on this mortgage loan is Prime plus 1.0% per annum with principal and interest paid monthly.  This loan matures in February 2006 and is collateralized by a shopping center comprising 0.3 million square feet of GLA in Wilkes-Barre, PA.  During May 2005, the borrower elected to prepay the outstanding loan balance in full satisfaction of this loan.
 
 
 
During December 2004, the Company provided a $5.2 million interest-only five-year term loan to a grocery chain.  The interest rate on this loan is Prime plus 6.50% per annum payable monthly in arrears and is collateralized by certain real estate interests of the borrower. As of December 31, 2005, the outstanding loan balance was approximately $4.1 million.
 
 
 
Additionally, during December 2004, the Company acquired a $3.3 million 6.9% mortgage receivable for $2.2 million.  This mortgage loan pays principal and interest quarterly and matures in February 2019 and is collateralized by a medical office facility in Somerset, PA.  As of December 31, 2005, the outstanding loan was approximately $2.2 million.
 
 
 
During December 2003, the Company provided a four-year $8.25 million term loan to Spartan Stores, Inc. (“Spartan”) at a fixed rate of 16% per annum.  This loan was collateralized by the real estate interests of Spartan, with the Company receiving principal and interest payments monthly.  During December 2004, Spartan elected to prepay the remaining outstanding loan balance of approximately $7.6 million in full satisfaction of this loan.
 
 
 
During December 2003, the Company, through a taxable REIT subsidiary, acquired a $24.0 million participation interest in 12% senior secured notes of the FRI-MRD Corporation (“FRI-MRD”) for $13.3 million.  These notes, which are currently non-performing, are collateralized by certain equity interests and a note receivable of a FRI-MRD subsidiary.
 
 
10.
Marketable Securities:
 
 
 
The amortized cost and estimated fair values of securities available-for-sale and held-to-maturity at December 31, 2005 and 2004, are as follows (in thousands):
 
 
 
December 31, 2005
 
 
 
 
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
 
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities
 
$
85,613
 
$
63,466
 
$
(56
)
$
149,023
 
Held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Other debt securities
 
 
57,429
 
 
3,615
 
 
(1,953
)
 
59,091
 
 
 
 
 
 
 
Total marketable securities
 
$
143,042
 
$
67,081
 
$
(2,009
)
$
208,114
 
 
 
 
 
 
 
 
96
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
 
December 31, 2004
 
 
 
 
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
 
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities
 
$
61,042
 
$
36,808
 
$
(87
)
$
97,763
 
Held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Other debt securities
 
 
26,008
 
 
2,166
 
 
(30
)
 
28,144
 
 
 
 
 
 
 
Total marketable securities
 
$
87,050
 
$
38,974
 
$
(117
)
$
125,907
 
 
 
 
 
 
 
 
 
As of December 31, 2005, the contractual maturities of Other debt securities classified as held-to-maturity are as follows:  within one year, $1.7 million; after one year through five years, $10.3 million; after five years through 10 years, $26.7 million and after 10 years, $19.3 million.  Actual maturities may differ from contractual maturities as issuers may have the right to prepay debt obligations with or without prepayment penalties.
 
 
11.
Notes Payable:
 
 
 
The Company has implemented a medium-term notes (“MTN”) program pursuant to which it may, from time to time, offer for sale its senior unsecured debt for any general corporate purposes, including (i) funding specific liquidity requirements in its business, including property acquisitions, development and redevelopment costs, and (ii) managing the Company’s debt maturities.
 
 
 
As of December 31, 2005, a total principal amount of approximately $1.2 billion in senior fixed-rate MTNs was outstanding.  These fixed-rate notes had maturities ranging from seven months to ten years as of December 31, 2005, and bear interest at rates ranging from 3.95% to 7.90%.  Interest on these fixed-rate senior unsecured notes is payable semi-annually in arrears.  Proceeds from these issuances were primarily used for the acquisition of neighborhood and community shopping centers, the expansion and improvement of properties in the Company’s portfolio and the repayment of certain debt obligations of the Company.
 
 
 
During February 2005, the Company issued $100.0 million of fixed-rate unsecured senior notes under its MTN program.  This fixed-rate MTN matures in February 2015 and bears interest at 4.904% per annum.  The proceeds from this MTN issuance were primarily used for the repayment of all $20.0 million of the Company’s fixed-rate notes that matured in April 2005, which bore interest at 7.91%, all $10.25 million of the Company’s fixed-rate notes that matured in May 2005, which bore interest at 7.30%, and partial repayment of the Company’s $100.0 million fixed-rate notes which matured in June 2005, and bore interest at 6.73%.
 
 
 
During June 2005, the Company issued $200.0 million of fixed-rate unsecured senior notes under its MTN program.  This fixed-rate MTN matures in June 2014 and bears interest at 4.82% per annum.  The proceeds from this issuance were primarily used to repay a portion of the outstanding balance under the Company’s U.S. revolving credit facility and for general corporate purposes.
 
 
 
During November 2005, the Company issued an aggregate $250.0 million of fixed-rate unsecured senior notes under its MTN program.  The Company issued a $150.0 million MTN which matures in November 2015 and bears interest at 5.584% per annum and a $100.0 million MTN which matures in February 2011 and bears interest at 5.304% per annum.  Proceeds from these MTN issuances were used for general corporate purposes and to repay a portion of the outstanding balance under the Company’s U.S. revolving credit facility.  A portion of the outstanding balance related to the repayment of the Company’s $50.0 million 7.68% fixed-rate notes, which matured on November 1, 2005 and repayment of the Company’s $20.0 million 6.83% fixed-rate notes, which matured on November 14, 2005.
 
 
 
During April 2005, Kimco North Trust III, a wholly-owned entity of the Company, completed the issuance of $150.0 million Canadian denominated senior unsecured notes.  The notes bear interest at 4.45% and mature on April 21, 2010.  The Company has provided a full and unconditional guarantee of the notes.  The proceeds were used by Kimco North Trust III to pay down outstanding indebtedness under existing credit facilities, to fund long-term investments in Canadian real estate and for general corporate purposes.  The senior unsecured notes are governed by an indenture by and among Kimco North Trust III, the Company, as guarantor, and BNY Trust Company of Canada, as trustee dated April 21, 2005.
 
97
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
During July 2004, the Company issued $100.0 million of floating-rate unsecured senior notes under its MTN program.  This floating-rate MTN matures August 1, 2006, and bears interest at LIBOR plus 20 basis points per annum (4.45% at December 31, 2005), payable quarterly in arrears commencing November 1, 2004.  The proceeds from this MTN issuance were primarily used for the repayment of the Company’s $85.0 million floating-rate unsecured notes due August 2, 2004, which bore interest at LIBOR plus 50 basis points per annum.  The remaining proceeds were used for general corporate purposes.
 
 
 
During August 2004, the Company issued $100.0 million of fixed-rate unsecured senior notes under its MTN program.  This fixed-rate MTN matures in August 2011 and bears interest at 4.82% per annum payable semi-annually in arrears. The proceeds from this MTN issuance were used to repay the Company’s $50.0 million, 7.62% fixed-rate unsecured senior notes that matured in October 2004 and the Company’s $50.0 million, 7.125% senior notes which matured in June 2004.
 
 
 
As of December 31, 2005, the Company had a total principal amount of $549.1 million in fixed-rate unsecured senior notes.  These fixed-rate notes had maturities ranging 11 months to seven years as of December 31, 2005, and bear interest at rates ranging from 4.45% to 7.50%.  Interest on these fixed-rate senior unsecured notes is payable semi-annually in arrears.
 
 
 
The scheduled maturities of all unsecured senior notes payable as of December 31, 2005, were approximately as follows (in millions): 2006, $185.0; 2007, $195.0; 2008, $100.0; 2009, $180.0; 2010, $179.1 and thereafter, $967.0.
 
 
 
During July 2005, the Company established a new $850.0 million unsecured revolving credit facility (the “Credit Facility”), which is scheduled to expire in July 2008. This Credit Facility replaces the Company’s $500.0 million unsecured credit facility, which was scheduled to expire in June 2006. Under the Credit Facility, funds may be borrowed for general corporate purposes, including the funding of (i) property acquisitions, (ii) development and redevelopment costs and (iii) any short-term working capital requirements.  Interest on borrowings under the Credit Facility accrue at a spread (currently 0.45%) to LIBOR and fluctuates in accordance with changes in the Company’s senior debt ratings.  As part of this Credit Facility, the Company has a competitive bid option whereby the Company may auction up to $425.0 million of its requested borrowings to the bank group.  This competitive bid option provides the Company the opportunity to obtain pricing below the currently stated spread to LIBOR of 0.45%.  A facility fee of 0.125% per annum is payable quarterly in arrears. In addition, the Company has a $200.0 million sub-limit which provides it the opportunity to borrow in alternative currencies such as Pounds Sterling, Japanese Yen or Euros.  Pursuant to the terms of the Credit Facility, the Company, among other things, is (i) subject to maintaining certain maximum leverage ratios on both unsecured senior corporate debt and minimum unencumbered asset and equity levels and (ii) restricted from paying dividends in amounts that exceed 95% of funds from operations, as defined.  As of December 31, 2005, there was $200.0 million outstanding (4.68% at December 31, 2005) under the Credit Facility.
 
 
 
During September 2004, the Company entered into a three-year Canadian-denominated (“CAD”) $150.0 million unsecured revolving credit facility with a group of banks.  This facility bears interest at the CDOR Rate, as defined, plus 0.50% and is scheduled to expire in September 2007.  During March 2005, this facility was increased to CAD $250.0 million and the scheduled maturity date was extended to March 2008.  During January 2006, the facility was further amended to reduce the borrowing spread to 0.45% and to modify the covenant package to conform to the Company’s $850.0 million U.S. credit facility.  Proceeds from this facility will be used for general corporate purposes including the funding of Canadian-denominated investments.  As of December 31, 2005, there was CAD $110.0 million (approximately USD $94.7 million, 3.78% at December 31, 2005) outstanding under this facility.
 
 
 
During May 2005, the Company entered into a three-year Mexican Peso-Denominated (“MXP”) 500.0 million unsecured revolving credit facility.  This facility bears interest at the TIIE Rate, as defined, plus 1.00% and is scheduled to expire in May 2008.  Proceeds from this facility will be used to fund peso-denominated investments.  As of December 31, 2005, there was MXP 500.0 million (approximately USD $46.7 million 9.66% at December 31, 2005) outstanding under this facility.
 
 
 
In accordance with the terms of the Indenture, as amended, pursuant to which the
 
98
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
Company’s senior unsecured notes have been issued, the Company is (a) subject to maintaining certain maximum leverage ratios on both unsecured senior corporate and secured debt, minimum debt service coverage ratios and minimum equity levels and (b) restricted from paying dividends in amounts that exceed by more than $26.0 million the funds from operations, as defined, generated through the end of the calendar quarter most recently completed prior to the declaration of such dividend; however, this dividend limitation does not apply to any distributions necessary to maintain the Company’s qualification as a REIT providing the Company is in compliance with its total leverage limitations.
 
 
12.
Mortgages Payable:
 
 
 
During 2005, the Company (i) obtained an aggregate of approximately $95.6 million of individual non-recourse mortgage debt on 53 operating properties, (ii) assumed approximately $79.7 million of individual non-recourse mortgage debt relating to the acquisition of 11 operating properties, including approximately $6.3 million of fair value debt adjustments, (iii) consolidated approximately $33.2 million of non-recourse mortgage debt relating to the purchase of additional ownership interest in various entities, (iv) assigned approximately $119.8 million of individual non-recourse mortgage debt relating to the transfer of 49 operating properties to various co-investment ventures in which the Company has non-controlling interests ranging from 10% to 30%, (v) paid off approximately $66.9 million of individual non-recourse mortgage debt that encumbered 11 operating properties, (vi) deconsolidated approximately $41.4 million of non-recourse mortgage debt relating to the reduction of the Company’s economic interest in a joint venture and (vii) assigned approximately $7.8 million of non-recourse mortgage debt relating to the sale of an operating property.
 
 
 
During 2004, the Company (i) obtained an aggregate of approximately $217.6 million of individual non-recourse mortgage debt on 15 operating properties, (ii) assumed approximately $158.0 million of individual non-recourse mortgage debt relating to the acquisition of 12 operating properties, including approximately $6.0 million of fair value debt adjustments, (iii) assigned approximately $323.7 million of individual non-recourse mortgage debt relating to the transfer of 24 operating properties to various co-investment ventures in which the Company has non-controlling interests ranging from 10% to 30%, (iv) paid off approximately $47.9 million of individual non-recourse mortgage debt that encumbered four operating properties and (v) assigned approximately $9.3 million of non-recourse mortgage debt relating to the sale of one operating property.
 
 
 
During 2003, the Company reached agreement with certain lenders in connection with three individual non-recourse mortgages encumbering three former Kmart sites.  The Company paid approximately $14.2 million in full satisfaction of these loans, which aggregated approximately $24.0 million.  As a result of these transactions, the Company recognized a gain on early extinguishment of debt of approximately $9.7 million during 2003, of which $6.8 million is included in Income from discontinued operations.
 
 
 
Mortgages payable, collateralized by certain shopping center properties and related tenants’ leases, are generally due in monthly installments of principal and/or interest which mature at various dates through 2035.  Interest rates range from approximately 4.00% to 10.50% (weighted-average interest rate of 7.48% as of December 31, 2005).  The scheduled principal payments of all mortgages payable, excluding unamortized fair value debt adjustments of approximately $15.5 million, as of December 31, 2005, were approximately as follows (in millions): 2006, $21.7; 2007, $17.3; 2008, $60.0; 2009, $20.5; 2010, $23.2 and thereafter, $157.1.
 
 
 
One of the Company’s properties was encumbered by approximately $6.4 million in floating-rate, tax-exempt mortgage bond financing.  The rate on these bonds was reset annually, at which time bondholders had the right to require the Company to repurchase the bonds. The Company had engaged a remarketing agent for the purpose of offering for resale the bonds in the event they were tendered to the Company.  All bonds tendered for redemption in the past were remarketed and the Company had arrangements, including letters of credit, with banks, to both collateralize the principal amount and accrued interest on such bonds and to fund any repurchase obligations.  During 2004, the Company fully paid the outstanding balance of this tax-exempt mortgage bond financing.
 
99
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
 
13.
Construction Loans Payable:
 
 
 
During 2005, the Company obtained a term loan and construction financing on two ground-up development projects for an aggregate original loan commitment amount of up to $50.5 million, of which approximately $22.4 million was outstanding at December 31, 2005.  As of December 31, 2005, the Company had a total of 15 construction loans with total commitments of up to $343.5 million, of which $228.5 million had been funded.  These loans had maturities ranging from four to 31 months and variable interest rates ranging from 6.04% to 6.64% at December 31, 2005.  These construction loans are collateralized by the respective projects and associated tenants’ leases.  The scheduled maturities of all construction loans payable as of December 31, 2005, were approximately as follows (in millions):  2006, $87.7; 2007, $86.3 and 2008, $54.5.
 
 
14.
Fair Value Disclosure of Financial Instruments:
 
 
 
All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management’s estimation based upon an interpretation of available market information and valuation methodologies, reasonably approximate their fair values except those listed below, for which fair values are reflected.  The valuation method used to estimate fair value for fixed-rate debt and minority interests relating to mandatorily redeemable non-controlling interests associated with finite-lived subsidiaries of the Company is based on discounted cash flow analyses.  The fair values for marketable securities are based on published or securities dealers’ estimated market values.  Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition.  The following are financial instruments for which the Company’s estimate of fair value differs from the carrying amounts (in thousands):
 
 
 
December 31,
 
 
 
 
 
 
2005
 
2004
 
 
 
 
 
 
 
Carrying
Amounts
 
Estimated
Fair Value
 
Carrying
Amounts
 
Estimated
Fair Value
 
 
 
 
 
 
 
Marketable Securities
 
$
206,452
 
$
208,114
 
$
123,771
 
$
125,907
 
Notes Payable
 
$
2,147,405
 
$
2,172,031
 
$
1,608,925
 
$
1,663,474
 
Mortgages Payable
 
$
315,336
 
$
330,897
 
$
353,071
 
$
375,566
 
Mandatorily Redeemable Minority Interests (termination dates ranging from 2019 – 2027)
 
$
1,782
 
$
4,934
 
$
2,057
 
$
3,842
 
 
15.
Financial Instruments - Derivatives and Hedging:
 
 
 
The Company is exposed to the effect of changes in interest rates, foreign currency exchange rate fluctuations and market value fluctuations of equity securities. The Company limits these risks by following established risk management policies and procedures including the use of derivatives.
 
 
 
The principal financial instruments generally used by the Company are interest rate swaps, foreign currency exchange forward contracts, cross currency swaps and warrant contracts. The Company, from time to time, hedges the future cash flows of its floating-rate debt instruments to reduce exposure to interest rate risk principally through interest rate swaps with major financial institutions. The Company had no interest rate swaps outstanding during 2004 and 2005.
 
 
 
As of December 31, 2005 and 2004, respectively, the Company had foreign currency forward contracts designated as net investment hedges of its Canadian investments in real estate of approximately CAD $5.2 million and CAD $184.6 million. During 2005, the Company settled approximately CAD $179.4 million of CAD forward contracts. The Company did not sell or substantially liquidate any of the hedged investments.  As of December 31, 2004, the Company had a foreign currency forward contract designated as a fair value hedge of its Canadian investments in real estate aggregating approximately CAD $5.0 million. In April 2005, the Company settled the CAD $5.0 million foreign currency contract. In addition, the Company had a cross currency swap with an aggregate
 
100
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
notional amount of approximately $82.4 million pesos (“MXN”) (approximately USD $7.8 million) designated as a hedge of its Mexican real estate investments at December 31, 2005 and 2004, respectively.
 
 
 
The Company has designated these foreign currency agreements as net investment hedges of the foreign currency exposure of its net investment in Canadian and Mexican real estate operations. The Company believes these agreements are highly effective in reducing the exposure to fluctuations in exchange rates. As such, gains and losses on these net investment hedges were reported in the same manner as a translation adjustment.  During 2005 and 2004, respectively, $0.7 million and $15.1 million of unrealized losses and $3.2 million and $0.0 million of unrealized gains were included in the cumulative translation adjustment relating to the Company’s net investment hedges of its Canadian and Mexican investments.
 
 
 
During 2001, the Company acquired warrants to purchase 2.5 million shares of common stock of a Canadian REIT. The Company designated the warrants as a cash flow hedge of the variability in expected future cash outflows upon purchasing the common stock. The change in fair value of the warrants representing unrealized gains was recorded in OCI. The net unrealized gains, since inception recorded in OCI as of December 31, 2004, were approximately $12.5 million. The Company exercised its warrants in October of 2004.  During 2005, the Company sold 0.2 million shares of common stock of the Canadian REIT resulting in a reclassification of $0.7 million of OCI balance to earnings as other income.
 
 
 
The following tables summarize the notional values and fair values of the Company’s derivative financial instruments as of December 31, 2005 and 2004:
 
 
 
 
As of December 31, 2005
 
 
 
 
 
Hedge Type
 
Notional
Value
 
Rate
 
Maturity
 
Fair Value
(in millions)
 
 
 
 
 
 
Foreign currency forwards – net investment
 
 
CAD $5.2 million
 
 
1.4013
 
 
7/06
 
$
(0.8
)
MXN  cross currency swap – net investment
 
 
MXN $82.4 million
 
 
7.227
 
 
10/07
 
$
(0.2
)
 
 
 
 
 
As of December 31, 2004
 
 
 
 
Hedge Type
 
Notional
Value
 
Rate
 
Maturity
 
Fair Value
(in millions)
 
 
 
 
 
 
Foreign currency forwards – net investment
 
 
CAD $184.6 million
 
 
1.4013 – 1.6194
 
 
1/05 – 7/06
 
$
(37.5
)
MXN  cross currency swap – net investment
 
 
MXN $82.4 million
 
 
7.227
 
 
10/07
 
$
0.3
 
Foreign currency forward – fair value
 
 
CAD $5.0 million
 
 
1.5918
 
 
4/05
 
$
(1.0
)
 
 
As of December 31, 2005 and 2004 these derivative instruments were reported at their fair value as other liabilities of $1.0 million and $38.5 million, respectively and other assets of $0.3 million at December 31, 2004. The Company does not expect to reclassify to earnings any of the current balance during the next 12 months.
 
 
16.
Preferred Stock, Common Stock and Convertible Unit Transactions:
 
 
 
At January 1, 2003, the Company had outstanding 3,000,000 Depositary Shares (the “Class A Depositary Shares”), each such Class A Depositary Share representing a one-tenth fractional interest of a share of the Company’s 7¾% Class A Cumulative Redeemable Preferred Stock, par value $1.00 per share (the “Class A Preferred Stock”), 2,000,000 Depositary Shares (the “Class B Depositary Shares”), each such Class B Depositary Share representing a one-tenth fractional interest of a share of the Company’s 8½% Class B Cumulative Redeemable Preferred Stock, par value $1.00 per share (the “Class B Preferred Stock”) and 4,000,000 Depositary Shares (the “Class C Depositary Shares”), each such Class C Depositary Share representing a one-tenth fractional interest of a share of the Company’s 8 3/8% Class C Cumulative Redeemable Preferred Stock, par value
 
101
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
$1.00 per share (the “Class C Preferred Stock”).
 
 
 
During June 2003, the Company redeemed all 2,000,000 outstanding Depositary Shares of the Company’s Class B Preferred Stock, all 3,000,000 outstanding Depositary Shares of the Company’s Class A Preferred Stock and all 4,000,000 outstanding Depositary Shares of the Company’s Class C Preferred Stock, each at a redemption price of $25.00 per Depositary Share, totaling $225.0 million, plus accrued dividends.  In accordance with Emerging Issues Task Force (“EITF”) D-42, the Company deducted from the calculation of net income available to common shareholders original issuance costs of approximately $7.8 million associated with the redemption of the Class A Preferred Stock, Class B Preferred Stock and Class C Preferred Stock.
 
 
 
During June 2003, the Company issued 7,000,000 Depositary Shares (the “Class F Depositary Shares”), each such Class F Depositary Share representing a one-tenth fractional interest of a share of the Company’s 6.65% Class F Cumulative Redeemable Preferred Stock, par value $1.00 per share (the “Class F Preferred Stock”).  Dividends on the Class F Depositary Shares are cumulative and payable quarterly in arrears at the rate of 6.65% per annum based on the $25.00 per share initial offering price, or $1.6625 per annum.  The Class F Depositary Shares are redeemable, in whole or part, for cash on or after June 5, 2008, at the option of the Company, at a redemption price of $25.00 per Depositary Share, plus any accrued and unpaid dividends thereon.  The Class F Depositary Shares are not convertible or exchangeable for any other property or securities of the Company.  Net proceeds from the sale of the Class F Depositary Shares, totaling approximately $169.0 million (after related transaction costs of $6.0 million) were used to redeem all of the Company’s Class B Preferred Stock and Class C Preferred Stock and to fund a portion of the redemption of the Company’s Class A Preferred Stock.
 
 
 
Voting Rights - As to any matter on which the Class F Preferred Stock, (“Preferred Stock”) may vote, including any action by written consent, each share of Preferred Stock shall be entitled to 10 votes, each of which 10 votes may be directed separately by the holder thereof.  With respect to each share of Preferred Stock, the holder thereof may designate up to 10 proxies, with each such proxy having the right to vote a whole number of votes (totaling 10 votes per share of Preferred Stock). As a result, each Class F Depositary Share is entitled to one vote.
 
 
 
Liquidation Rights - In the event of any liquidation, dissolution or winding up of the affairs of the Company, the Preferred Stock holders are entitled to be paid, out of the assets of the Company legally available for distribution to its stockholders, a liquidation preference of $250.00 per share ($25.00 per Class F Depositary Share), plus an amount equal to any accrued and unpaid dividends to the date of payment, before any distribution of assets is made to holders of the Company’s common stock or any other capital stock that ranks junior to the Preferred Stock as to liquidation rights.
 
 
 
During June 2003, the Company completed a primary public stock offering of 2,070,000 shares of the Company’s common stock.  The net proceeds from this sale of common stock, totaling approximately $76.0 million (after related transaction costs of $0.7 million) were used for general corporate purposes, including the acquisition of interests in real estate properties.
 
 
 
During September 2003, the Company completed a primary public stock offering of 2,760,000 shares of the Company’s common stock.  The net proceeds from this sale of common stock, totaling approximately $112.7 million (after related transaction costs of $1.0 million) were used for general corporate purposes, including the acquisition of interests in real estate properties.
 
 
 
During October 2002, the Company acquired an interest in a shopping center property located in Daly City, CA, valued at $80.0 million, through the issuance of approximately 4.8 million Convertible Units which are convertible at a ratio of 1:1 into the Company’s common stock.  The unit holder has the right to convert the Convertible Units at any time after one year.  In addition, the Company has the right to mandatorily require a conversion after ten years.  If at the time of conversion the common stock price for the 20 previous trading days is less than $16.785 per share, the unit holder would be entitled to additional shares; however, the maximum number of additional shares is limited to 503,932 based upon a floor common stock price of $15.180.  The Company has the option to settle the conversion in cash.  Dividends on
 
102
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
the Convertible Units are paid quarterly at the rate of the Company’s common stock dividend multiplied by 1.1057.  The value of the Convertible Units is included in Minority interests in partnerships on the accompanying Consolidated Balance Sheets.
 
 
17.
Supplemental Schedule of Non-Cash Investing/Financing Activities:
 
 
 
The following schedule summarizes the non-cash investing and financing activities of the Company for the years ended December 31, 2005, 2004 and 2003, (in thousands):
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Acquisition of real estate interests by assumption of mortgage debt
 
$
73,400
 
$
151,987
 
$
180,893
 
Acquisition of real estate interest by issuance of downREIT units
 
$
—
 
$
28,349
 
$
—
 
Disposition of real estate interests by assignment of downREIT units
 
$
4,236
 
$
24,114
 
$
—
 
Acquisition of real estate interests through proceeds held in escrow
 
$
—
 
$
69,681
 
$
—
 
Disposition/transfer of real estate interests by assignment of mortgage debt
 
$
166,108
 
$
320,120
 
$
23,068
 
Proceeds held in escrow through sale of real estate interests
 
$
19,217
 
$
9,688
 
$
41,194
 
Notes received upon disposition of real estate interests
 
$
—
 
$
6,277
 
$
14,490
 
Notes received upon exercise of stock options
 
$
—
 
$
—
 
$
100
 
Declaration of dividends paid in succeeding period
 
$
78,169
 
$
71,497
 
$
65,969
 
 
18.
Transactions with Related Parties:
 
 
 
The Company, along with its joint venture partner, provided KROP short-term interim financing for all acquisitions by KROP for which a mortgage was not in place at the time of closing. All such financing had maturities of less than one year and bore interest at rates ranging from LIBOR plus 4.0% to LIBOR plus 5.25% for the years ended December 31, 2005 and 2004, respectively.  KROP had no outstanding short-term interim financing due to GECRE and the Company as of December 31, 2005 and 2004, respectively. The Company earned approximately $24,000 and $0.2 million during 2005 and 2004, respectively, related to such interim financing.
 
 
 
The Company provides management services for shopping centers owned principally by affiliated entities and various real estate joint ventures in which certain stockholders of the Company have economic interests.  Such services are performed pursuant to management agreements which provide for fees based upon a percentage of gross revenues from the properties and other direct costs incurred in connection with management of the centers.
 
 
 
In December 2004, in conjunction with the Price Legacy transaction, the Company, which holds a 15% non-controlling interest, provided the acquiring joint venture approximately $30.6 million of secured mezzanine financing.  This interest-only loan bears interest at a fixed rate of 7.5% per annum payable monthly in arrears and matures in December 2006.  The Company also provided PL Retail a secured short-term promissory note for approximately $8.2 million.  This interest only note bore interest at LIBOR plus 4.5% and was scheduled to mature in June 2005. During 2005, this note was amended to bear interest at LIBOR plus 6.0% and is now payable on demand. As of December 31, 2005, PL Retail had approximately $8.9 million outstanding on the mezzanine financing and approximately $8.2 million outstanding on the promissory note.
 
103
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
 
 
Reference is made to Notes 7 and 8 for additional information regarding transactions with related parties.
 
 
19.
Commitments and Contingencies:
 
 
 
The Company and its subsidiaries are primarily engaged in the operation of shopping centers which are either owned or held under long-term leases which expire at various dates through 2087.  The Company and its subsidiaries, in turn, lease premises in these centers to tenants pursuant to lease agreements which provide for terms ranging generally from 5 to 25 years and for annual minimum rentals plus incremental rents based on operating expense levels and tenants’ sales volumes. Annual minimum rentals plus incremental rents based on operating expense levels comprised approximately 99% of total revenues from rental property for each of the three years ended December 31, 2004, 2003 and 2002.
 
 
 
The future minimum revenues from rental property under the terms of all non-cancellable tenant leases, assuming no new or renegotiated leases are executed for such premises, for future years are approximately as follows (in millions): 2006, $388.5; 2007, $359.7; 2008, $319.0; 2009, $282.8; 2010, $243.2 and thereafter, $1,437.8.
 
 
 
Minimum rental payments under the terms of all non-cancelable operating leases pertaining to the Company’s shopping center portfolio for future years are approximately as follows (in millions): 2006, $11.3; 2007, $10.6; 2008, $10.5; 2009, $10.0; 2010, $8.3 and thereafter, $140.8.
 
 
 
The Company has issued letters of credit in connection with completion and repayment guarantees for construction loans encumbering certain of the Company’s ground-up development projects and guaranty of payment related to the Company’s insurance program.  These letters of credit aggregate approximately $34.8 million.
 
 
 
Additionally, the RioCan Venture, an entity in which the Company holds a 50% non-controlling interest, has a CAD $7.0 million (approximately USD $6.0 million) letter of credit facility.  This facility is jointly guaranteed by RioCan and the Company and had approximately CAD $4.6 million (approximately USD $4.0 million) outstanding as of December 31, 2005, relating to various development projects.  In addition to the letter of credit facility, various additional Canadian development projects in which the Company holds interests ranging from 331/3% to 50% have letters of credit issued aggregating approximately CAD $3.5 million (approximately USD $3.0 million) at December 31, 2005.
 
 
 
During 2005, a joint venture entity in which the Company has a non-controlling interest obtained a CAD $22.5 million credit facility to finance the construction of a 0.1 million square foot shopping center located in Kamloops, B.C.  This facility bears interest at RBP plus 0.5% per annum and is schedule to mature in May 2007.  The Company and its partner in this entity each have a limited and several guarantee of CAD $7.5 million related to this facility. As of December 31, 2005, there was no outstanding balance on this facility.
 
 
 
During 2003, the limited partners in KIR, an entity in which the Company holds a 43.3% non-controlling interest, contributed $30.0 million toward their respective capital commitments, including $13.0 million by the Company.  As of December 31, 2003, KIR had unfunded capital commitments of $99.0 million, including $42.9 million from the Company.  During 2004, the KIR partners elected to cancel the remaining unfunded capital commitments.
 
 
 
The Company is subject to various legal proceedings and claims that arise in the ordinary course of business.  These matters are generally covered by insurance.  Management believes that the final outcome of such matters will not have a material adverse effect on the financial position, results of operations or liquidity of the Company.
 
 
20.
Incentive Plans:
 
 
 
The Company maintains a stock option plan (the “Plan”) pursuant to which a maximum of 37,000,000 shares of the Company’s common stock may be issued for qualified and non-qualified options. Options granted under the Plan generally vest ratably over a three
 
104
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
or five-year term, expire ten years from the date of grant and are exercisable at the market price on the date of grant, unless otherwise determined by the Board at its sole discretion. In addition, the Plan provides for the granting of certain options to each of the Company’s non-employee directors (the “Independent Directors”) and permits such Independent Directors to elect to receive deferred stock awards in lieu of directors’ fees.
 
 
 
Information with respect to stock options under the Plan for the years ended December 31, 2005, 2004 and 2003, is as follows:
 
 
 
Shares
 
Weighted-Average
Exercise Price
Per Share
 
 
 
 
 
Options outstanding, January 1, 2003
 
 
14,204,146
 
$
13.69
 
Exercised
 
 
(2,156,406
)
$
11.96
 
Granted
 
 
3,242,876
 
$
21.67
 
Forfeited
 
 
(179,006
)
$
15.58
 
 
 
 
 
 
 
Options outstanding, December 31, 2003
 
 
15,111,610
 
$
15.62
 
Exercised
 
 
(3,379,748
)
$
13.63
 
Granted
 
 
3,887,500
 
$
27.72
 
Forfeited
 
 
(379,790
)
$
19.25
 
 
 
 
 
 
 
Options outstanding, December 31, 2004
 
 
15,239,572
 
$
19.06
 
Exercised
 
 
(2,963,910
)
$
14.23
 
Granted
 
 
2,515,200
 
$
31.15
 
Forfeited
 
 
(239,566
)
$
23.59
 
 
 
 
 
 
 
Options outstanding, December 31, 2005
 
 
14,551,296
 
$
22.06
 
 
 
 
 
 
 
Options exercisable -
 
 
 
 
 
 
 
December 31, 2003
 
 
7,239,548
 
$
13.24
 
 
 
 
 
December 31, 2004
 
 
8,135,762
 
$
14.95 
 
 
 
 
 
December 31, 2005
 
 
8,167,681
 
$
17.63 
 
 
 
 
 
 
 
The exercise prices for options outstanding as of December 31, 2005, range from $9.13 to $32.86 per share.  The weighted-average remaining contractual life for options outstanding as of December 31, 2005, was approximately 7.5 years. Options to purchase 3,817,066, 6,332,266 and 10,219,766 shares of the Company’s common stock were available for issuance under the Plan at December 31, 2005, 2004 and 2003, respectively.
 
 
 
The Company maintains a 401(k) retirement plan covering substantially all officers and employees, which permits participants to defer up to the maximum allowable amount determined by the Internal Revenue Service of their eligible compensation.  This deferred compensation, together with Company matching contributions, which generally equal employee deferrals up to a maximum of 5% of their eligible compensation (capped at $170,000), is fully vested and funded as of December 31, 2005.  The Company contributions to the plan were approximately $1.1 million, $1.0 million and $0.8 million for the years ended December 31, 2005, 2004 and 2003, respectively.
 
 
21.
Income Taxes:
 
 
 
The Company elected to qualify as a REIT in accordance with the Code commencing with its taxable year which began January 1, 1992.  To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its adjusted REIT taxable income to its stockholders.  It is management’s intention to adhere to these requirements and maintain the Company’s REIT status.  As a REIT, the Company generally will not be subject to corporate federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code.  If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years.  Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property and federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to federal, state and local income taxes.
 
105
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
Reconciliation between GAAP Net Income and Federal Taxable Income:
 
 
 
The following table reconciles GAAP net income to taxable income for the years ended December 31, 2005, 2004 and 2003, (in thousands):
 
 
 
2005
(Estimated)
 
2004
(Actual)
 
2003
(Actual)
 
 
 
 
 
 
GAAP net income
 
$
363,628
 
$
297,137
 
$
307,879
 
Less: GAAP net income of taxable REIT  subsidiaries
 
 
(21,666
)
 
(19,396
)
 
(12,814
)
 
 
 
 
 
GAAP net income from REIT operations (a)
 
 
341,962
 
 
277,741
 
 
295,065
 
Net book depreciation in excess of (less than) tax depreciation
 
 
6,072
 
 
4,716
 
 
(36,663
)
Deferred and prepaid rents
 
 
(3,800
)
 
(7,200
)
 
(6,000
)
Exercise of non-qualified stock options
 
 
(33,752
)
 
(28,022
)
 
(11,370
)
Book/tax differences from investments in real estate joint ventures
 
 
(3,350
)
 
(6,350
)
 
(2,472
)
Book/tax difference on sale of real property
 
 
(33,863
)
 
(18,799
)
 
(32,319
)
Valuation adjustment of foreign currency contracts
 
 
2,537
 
 
(21,697
)
 
(15,466
)
Book adjustment of property carrying values
 
 
—
 
 
7,116
 
 
4,016
 
Other book/tax differences, net
 
 
16,980
 
 
8,419
 
 
(6,747
)
 
 
 
 
 
Adjusted taxable income subject to 90% dividend requirements
 
$
292,786
 
$
215,924
 
$
188,044
 
 
 
 
 
 
 
 
Certain amounts in the prior periods have been reclassified to conform to the current year presentation.
 
 
 
(a) - All adjustments to “GAAP net income from REIT operations” are net of amounts attributable to minority interest and taxable REIT subsidiaries.
 
 
 
Reconciliation between Cash Dividends Paid and Dividends Paid Deductions (in thousands):
 
 
 
For the year ended December 31, 2005, cash dividends paid were equal to the dividends paid deduction and amounted to $293,345.  Cash dividends paid exceeded the dividends paid deduction for the years ended December 31, 2004 and 2003 and amounted to $265,254 and $246,301, respectively. 
 
 
 
Characterization of Distributions:
 
 
 
The following characterizes distributions paid for the years ended December 31, 2005, 2004 and 2003, (in thousands):
 
 
 
2005
 
 
 
 
2004
 
 
 
 
2003
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred Dividends
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ordinary income
 
$
10,009
 
 
   86%
$
11,638
 
 
 100%
$
13,169
 
 
   84%
Capital gain
 
 
1,629
 
 
   14%
 
—
 
 
 —
 
 
2,451
 
 
   16%
 
 
 
 
 
 
 
 
 
 
$
11,638
 
 
 100%
$
11,638
 
 
 100%
$
15,620
 
 
 100%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Dividends
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ordinary income
 
$
242,268
 
 
   86%
$
210,501
 
 
   83%
$
171,071
 
 
   74%
Capital gain
 
 
39,439
 
 
   14%
 
—
 
 
 —
 
 
31,840
 
 
   14%
Return of capital
 
 
—
 
 
 —
 
 
43,115
 
 
   17%
 
27,770
 
 
   12%
 
 
 
 
 
 
 
 
 
 
$
281,707
 
 
 100%
$
253,616
 
 
 100%
$
230,681
 
 
 100%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total dividends distributed
 
$
293,345
 
 
 
 
$
265,254
 
 
 
 
$
246,301
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
106
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
Taxable REIT Subsidiaries (“TRS”):
 
 
 
The Company is subject to federal, state and local income taxes on the income from its TRS activities, which include Kimco Realty Services (“KRS”), a wholly owned subsidiary of the Company and the consolidated entities of FNC and Blue Ridge Real Estate Company/Big Boulder Corporation.
 
 
 
Income taxes have been provided for on the asset and liability method as required by Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes.  Under the asset and liability method, deferred income taxes are recognized for the temporary differences between the financial reporting basis and the tax basis of the TRS assets and liabilities.
 
 
 
The Company’s taxable income for book purposes and provision for income taxes relating to the Company’s TRS and taxable entities which have been consolidated for accounting reporting purposes, for the years ended December 31, 2005, 2004 and 2003, are summarized as follows (in thousands):
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Income before income taxes
 
$
32,920
 
$
27,716
 
$
21,328
 
Less provision for income taxes:
 
 
 
 
 
 
 
 
 
 
Federal
 
 
9,446
 
 
6,939
 
 
7,104
 
State and local
 
 
1,808
 
 
1,381
 
 
1,410
 
 
 
 
 
 
Total tax provision
 
 
11,254
 
 
8,320
 
 
8,514
 
 
 
 
 
 
GAAP net income from taxable REIT subsidiaries
 
$
21,666
 
$
19,396
 
$
12,814
 
 
 
 
 
 
 
The Company’s deferred tax assets and liabilities at December 31, 2005 and 2004, were as follows (in millions):
 
 
 
2005
 
2004
 
 
 
 
 
Deferred Tax assets:
 
 
 
 
 
 
 
Operating losses - FNC
 
$
59.4
 
$
—
 
Other
 
 
16.3
 
 
11.8
 
Valuation allowance
 
 
(33.8
)
 
—
 
 
 
 
 
Total deferred tax assets
 
 
41.9
 
 
11.8
 
Deferred tax liabilities
 
 
(12.8
)
 
(7.3
)
 
 
 
 
Net deferred tax assets
 
$
29.1
 
$
4.5
 
 
 
 
 
 
Deferred tax assets and deferred tax liabilities are included in the caption Other assets and Other liabilities on the accompanying Consolidated Balance Sheets at December 31, 2005 and 2004.  Operating losses and the valuation allowance are due to the Company’s consolidation of FNC for accounting and reporting purposes and relate to pre-bankruptcy emergence operating losses incurred by Frank’s.  At December 31, 2005, FNC had approximately $152.2 million of net operating loss carry forwards that expire from 2022 through 2025, with a tax value of approximately $59.4 million.  A valuation allowance of $33.8 million has been established for a portion of these deferred tax assets.  Other deferred tax assets and deferred tax liabilities relate primarily to differences in the timing of the recognition of income/(loss) between the GAAP and tax basis of accounting for (i) real estate joint ventures, (ii) other real estate investments and (iii) other deductible temporary differences.  The Company believes that, based on its operating strategy and consistent history of profitability, it is more likely than not that the net deferred tax assets of $29.1 million will be realized on future tax returns, primarily from the generation of future taxable income.
 
The income tax provision differs from the amount computed by applying the statutory federal income tax rate to taxable income before income taxes as follows (in thousands):
 
107
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
 
2005
 
2004
 
2003
 
 
 
 
 
 
Federal provision at statutory tax  rate (35%)
 
$
11,522
 
$
9,700
 
$
7,465
 
State and local taxes, net of federal  benefit
 
 
2,140
 
 
1,801
 
 
1,049
 
Other
 
 
(2,408
)
 
(3,181
)
 
—
 
 
 
 
 
 
 
 
$
11,254
 
$
8,320
 
$
8,514
 
 
 
 
 
 
 
22.               Supplemental Financial Information:
 
The following represents the results of operations, expressed in thousands except per share amounts, for each quarter during the years 2005 and 2004:
 
 
 
2005 (Unaudited)
 
 
 
Mar. 31
 
June 30
 
Sept. 30
 
Dec. 31
 
 
 
 
 
 
 
Revenues from rental property(1)
 
$
129,314
 
$
126,658
 
$
129,585
 
$
136,988
 
Net income
 
$
86,780
 
$
83,837
 
$
85,343
 
$
107,668
 
Net income per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
.37
 
$
.36
 
$
.36
 
$
.46
 
Diluted
 
$
.37
 
$
.35
 
$
.36
 
$
.44
 
 
 
 
2004 (Unaudited)
 
 
 
Mar. 31
 
June 30
 
Sept. 30
 
Dec. 31
 
 
 
 
 
 
 
Revenues from rental property(1)
 
$
137,733
 
$
127,645
 
$
120,000
 
$
122,263
 
Net income
 
$
71,389
 
$
71,430
 
$
78,511
 
$
75,807
 
Net income per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
.31
 
$
.31
 
$
.34
 
$
.32
 
Diluted
 
$
.30
 
$
.31
 
$
.33
 
$
.32
 
 
(1)
All periods have been adjusted to reflect the impact of operating properties sold during 2005 and 2004 and properties classified as held for sale as of December 31, 2005, which are reflected in the caption Discontinued operations on the accompanying Consolidated Statements of Income.
 
Accounts and notes receivable in the accompanying Consolidated Balance Sheets net of estimated unrecoverable amounts, were approximately $8.5 million and $8.7 million at December 31, 2005 and 2004, respectively.
 
23.
Pro Forma Financial Information (Unaudited):
 
 
 
As discussed in Notes 3, 4 and 5, the Company and certain of its subsidiaries acquired and disposed of interests in certain operating properties during 2005.  The pro forma financial information set forth below is based upon the Company’s historical Consolidated Statements of Income for the years ended December 31, 2005 and 2004, adjusted to give effect to these transactions as of January 1, 2004.
 
 
 
The pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred on January 1, 2004, nor does it purport to represent the results of operations for future periods.  (Amounts presented in millions, except per share figures.)
 
108
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
 
 
 
Year ended December 31,
 
 
 
 
 
 
2005
 
2004
 
 
 
 
 
Revenues from rental property
 
$
535.5
 
$
521.9
 
Net income
 
$
331.2
 
$
282.4
 
Net income per common share:
 
 
 
 
 
 
 
Basic
 
$
1.41
 
$
1.21
 
 
 
 
 
Diluted
 
$
1.38
 
$
1.19
 
 
 
 
 
 
109
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
 
VALUATION AND QUALIFYING ACCOUNTS
 
For Years Ended December 31, 2005, 2004 and 2003
(in thousands)
 
 
 
Balance at
beginning
of period
 
Charged
to
expenses
 
Adjustments
to
valuation
accounts
 
Deductions
 
Balance at
end of
period
 
 
 
 
 
 
 
 
Year Ended December 31, 2005                                
Allowance for uncollectable accounts
 
$
8,650
 
$
1,296
 
$
—
 
$
(1,446
)
$
8,500
 
Allowance for deferred tax asset
 
$
—
 
$
—
 
$
33,783
 
$
—
 
$
33,783
 
 
 
 
 
 
 
 
Year Ended December 31, 2004                                
Allowance for uncollectable accounts
 
$
9,650
 
$
1,335
 
$
—
 
$
(2,335
)
$
8,650
 
 
 
 
 
 
 
 
Year Ended December 31, 2003                                
Allowance for uncollectable accounts
 
$
5,750
 
$
5,800
 
$
—
 
$
(1,900
)
$
9,650
 
 
 
 
 
 
 
 
 
110
 
KIMCO REALTY CORPORATION AND SUBSIDIARIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2005
 
 
 
INITIAL COST
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPERTIES
 
LAND
 
BUILDING
AND
IMPROVEMENT
 
SUBSEQUENT
TO ACQUISITION
 
LAND
 
BUILDINGS AND
IMPROVEMENTS
 
TOTAL
 
 
 
 
 
 
 
 
FAIRFIELD SHOPPING CENTER
 
529,247
 
2,137,493
 
226,005
 
 
529,247
 
 
2,363,498
 
 
2,892,745
 
HOOVER
 
279,106
 
7,735,873
 
—
 
 
279,106
 
 
7,735,873
 
 
8,014,979
 
KDI-MAIN STREET AT ANTHEM
 
7,305,430
 
—
 
(2,754,224
)
 
3,471,753
 
 
1,079,453
 
 
4,551,206
 
KDI-CHANDLER AUTO MALLS
 
9,318,595
 
—
 
(1,444,496
)
 
7,313,506
 
 
560,593
 
 
7,874,099
 
KIMCO MESA 679, INC. AZ
 
2,915,000
 
11,686,291
 
1,132,782
 
 
2,915,000
 
 
12,819,073
 
 
15,734,073
 
MESA RIVERVIEW
 
750,000
 
—
 
12,381,686
 
 
750,000
 
 
11,631,686
 
 
12,381,686
 
MESA RIVERVIEW (AUTO OFFICE)
 
14,250,000
 
—
 
16,214,834
 
 
14,250,000
 
 
1,964,834
 
 
16,214,834
 
METRO SQUARE
 
4,101,017
 
16,410,632
 
596,955
 
 
4,101,017
 
 
17,007,587
 
 
21,108,604
 
PEORIA CROSSING
 
7,212,588
 
—
 
2,198,742
 
 
161,583
 
 
4,116,913
 
 
4,278,495
 
HAYDEN PLAZA NORTH
 
2,015,726
 
4,126,509
 
5,415,780
 
 
2,015,726
 
 
9,542,289
 
 
11,558,015
 
PHOENIX, COSTCO
 
5,324,501
 
21,269,943
 
223,770
 
 
5,324,501
 
 
21,493,713
 
 
26,818,214
 
PHOENIX
 
2,450,341
 
9,802,046
 
572,141
 
 
2,450,341
 
 
10,374,187
 
 
12,824,528
 
KDI-ASANTE RETAIL CENTER
 
8,702,635
 
—
 
6,921,893
 
 
15,178,232
 
 
446,296
 
 
15,624,528
 
ALHAMBRA, COSTCO
 
4,995,639
 
19,982,557
 
23,838
 
 
4,995,639
 
 
20,006,395
 
 
25,002,034
 
MADISON PLAZA
 
5,874,396
 
23,476,190
 
121,916
 
 
5,874,396
 
 
23,598,106
 
 
29,472,502
 
CHULA VISTA, COSTCO
 
6,460,743
 
25,863,153
 
11,926,604
 
 
6,460,743
 
 
37,789,757
 
 
44,250,500
 
CORONA HILLS, COSTCO
 
13,360,965
 
53,373,453
 
784,920
 
 
13,360,965
 
 
54,158,373
 
 
67,519,338
 
LABAND VILLAGE SC
 
5,600,000
 
11,709,367
 
—
 
 
5,600,000
 
 
13,502,164
 
 
19,102,164
 
LA MIRADA THEATRE CENTER
 
8,816,741
 
35,259,965
 
(8,644,556
)
 
6,888,679
 
 
28,543,471
 
 
35,432,150
 
PLAZA DI NORTHRIDGE
 
12,900,000
 
40,574,842
 
—
 
 
12,900,000
 
 
47,079,766
 
 
59,979,766
 
POWAY CITY CENTRE
 
5,854,585
 
13,792,470
 
—
 
 
5,854,585
 
 
15,041,196
 
 
20,895,781
 
THE CENTRE
 
3,403,724
 
13,625,899
 
185,660
 
 
3,403,724
 
 
13,811,559
 
 
17,215,283
 
SANTA ANA, HOME DEPOT
 
4,592,364
 
18,345,257
 
—
 
 
4,592,364
 
 
18,345,257
 
 
22,937,621
 
SANTEE TOWN CENTER
 
2,252,812
 
9,012,256
 
942,135
 
 
2,252,812
 
 
9,954,391
 
 
12,207,203
 
FULTON MARKET PLACE
 
2,966,018
 
6,920,710
 
—
 
 
2,966,018
 
 
7,553,461
 
 
10,519,479
 
MARIGOLD SC
 
15,300,000
 
25,563,978
 
—
 
 
15,300,000
 
 
29,305,140
 
 
44,605,140
 
WESTLAKE SHOPPING CENTER
 
16,174,307
 
64,818,562
 
24,988,160
 
 
16,174,307
 
 
89,806,723
 
 
105,981,029
 
VILLAGE ON THE PARK
 
2,194,463
 
8,885,987
 
809,270
 
 
2,194,463
 
 
9,695,257
 
 
11,889,720
 
AURORA QUINCY
 
1,148,317
 
4,608,249
 
212,313
 
 
1,148,317
 
 
4,820,562
 
 
5,968,879
 
AURORA EAST BANK
 
1,500,568
 
6,180,103
 
160,719
 
 
1,500,568
 
 
6,340,822
 
 
7,841,390
 
SPRING CREEK COLORADO
 
1,423,260
 
5,718,813
 
26,244
 
 
1,423,260
 
 
5,745,057
 
 
7,168,317
 
DENVER WEST 38TH STREET
 
161,167
 
646,983
 
—
 
 
161,167
 
 
646,983
 
 
808,150
 
ENGLEWOOD PHAR MOR
 
805,837
 
3,232,650
 
88,947
 
 
805,837
 
 
3,321,597
 
 
4,127,434
 
FORT COLLINS
 
1,253,497
 
7,625,278
 
—
 
 
1,253,497
 
 
7,625,278
 
 
8,878,775
 
HERITAGE WEST
 
1,526,576
 
6,124,074
 
115,237
 
 
1,526,576
 
 
6,239,311
 
 
7,765,887
 
BRANFORD PLAZA
 
390,900
 
974,671
 
—
 
 
390,900
 
 
974,671
 
 
1,365,571
 
WEST FARM SHOPPING CENTER
 
5,805,969
 
23,348,024
 
259,589
 
 
5,805,969
 
 
23,607,613
 
 
29,413,582
 
FARMINGTON PLAZA
 
433,713
 
1,211,800
 
—
 
 
433,713
 
 
1,211,800
 
 
1,645,513
 
N.HAVEN, HOME DEPOT
 
7,704,968
 
30,797,640
 
225,056
 
 
7,704,968
 
 
31,022,696
 
 
38,727,664
 
SOUTHINGTON PLAZA
 
376,256
 
1,055,168
 
—
 
 
376,256
 
 
1,055,168
 
 
1,431,424
 
WATERBURY
 
2,253,078
 
9,017,012
 
274,246
 
 
2,253,078
 
 
9,291,258
 
 
11,544,336
 
DOVER
 
122,741
 
66,738
 
4,795,122
 
 
3,024,375
 
 
1,960,227
 
 
4,984,601
 
ELSMERE
 
—
 
3,185,642
 
—
 
 
—
 
 
3,185,642
 
 
3,185,642
 
ALTAMONTE SPRINGS
 
770,893
 
3,083,574
 
167,155
 
 
770,893
 
 
3,250,729
 
 
4,021,622
 
BOCA RATON
 
573,875
 
2,295,501
 
1,222,140
 
 
573,875
 
 
3,517,641
 
 
4,091,516
 
BRADENTON
 
125,000
 
299,253
 
333,571
 
 
125,000
 
 
632,824
 
 
757,824
 
BAYSHORE GARDENS, BRADENTON FL
 
2,901,000
 
11,738,955
 
460,115
 
 
2,901,000
 
 
12,199,070
 
 
15,100,070
 
BRADENTON PLAZA
 
527,026
 
765,252
 
—
 
 
527,026
 
 
765,252
 
 
1,292,278
 
CORAL SPRINGS
 
710,000
 
2,842,907
 
3,235,992
 
 
710,000
 
 
6,078,899
 
 
6,788,899
 
CORAL SPRINGS
 
1,649,000
 
6,626,301
 
180,572
 
 
1,649,000
 
 
6,806,873
 
 
8,455,873
 
CURLEW CROSSING S.C.
 
5,315,955
 
12,529,467
 
—
 
 
5,315,955
 
 
13,663,537
 
 
18,979,492
 
EAST ORLANDO
 
491,676
 
1,440,000
 
2,930,067
 
 
1,007,882
 
 
3,853,861
 
 
4,861,743
 
FERN PARK
 
225,000
 
902,000
 
2,903,564
 
 
225,000
 
 
3,805,564
 
 
4,030,564
 
REGENCY PLAZA
 
2,410,000
 
9,671,160
 
169,799
 
 
2,410,000
 
 
9,840,959
 
 
12,250,959
 
FLINT PLAZA
 
11,585,549
 
1,355,467
 
—
 
 
11,585,549
 
 
1,355,467
 
 
12,941,016
 
SHOPPES AT AMELIA CONCOURSE
 
7,600,000
 
—
 
4,356,546
 
 
1,975,613
 
 
9,980,933
 
 
11,956,546
 
AVENUES WALKS
 
26,984,546
 
—
 
—
 
 
26,984,546
 
 
1,793,208
 
 
28,777,753
 
KISSIMMEE
 
1,328,536
 
5,296,652
 
1,794,614
 
 
1,328,536
 
 
7,091,266
 
 
8,419,802
 
LAUDERDALE LAKES
 
342,420
 
2,416,645
 
3,028,432
 
 
342,420
 
 
5,445,077
 
 
5,787,497
 
 
PROPERTIES
 
ACCUMULATED
DEPRECIATION
 
TOTAL COST,
NET OF ACCUMULATED
DEPRECIATION
 
ENCUMBRANCES
 
DATE OF
CONSTRUCTION(C)
ACQUISITION(A)
 
 
 
 
 
 
FAIRFIELD SHOPPING CENTER
 
 
317,182
 
 
2,575,563
 
 
—
 
2000(A)
 
HOOVER
 
 
1,190,298
 
 
6,824,681
 
 
—
 
1999(A)
 
KDI-MAIN STREET AT ANTHEM
 
 
—
 
 
4,551,206
 
 
3,349,534
 
2004(C)
 
KDI-CHANDLER AUTO MALLS
 
 
—
 
 
7,874,099
 
 
—
 
2004(C)
 
KIMCO MESA 679, INC. AZ
 
 
2,547,604
 
 
13,186,469
 
 
—
 
1998(A)
 
MESA RIVERVIEW
 
 
—
 
 
12,381,686
 
 
—
 
2005(C)
 
MESA RIVERVIEW (AUTO OFFICE)
 
 
—
 
 
16,214,834
 
 
—
 
2005(C)
 
METRO SQUARE
 
 
3,654,773
 
 
17,453,831
 
 
—
 
1998(A)
 
PEORIA CROSSING
 
 
—
 
 
4,278,495
 
 
245,283
 
2000(C)
 
HAYDEN PLAZA NORTH
 
 
1,393,010
 
 
10,165,005
 
 
—
 
1998(A)
 
PHOENIX, COSTCO
 
 
4,117,379
 
 
22,700,835
 
 
—
 
1998(A)
 
PHOENIX
 
 
2,158,629
 
 
10,665,899
 
 
—
 
1997(A)
 
KDI-ASANTE RETAIL CENTER
 
 
—
 
 
15,624,528
 
 
9,181,461
 
2004(C)
 
ALHAMBRA, COSTCO
 
 
3,888,509
 
 
21,113,525
 
 
—
 
1998(A)
 
MADISON PLAZA
 
 
4,569,538
 
 
24,902,964
 
 
—
 
1998(A)
 
CHULA VISTA, COSTCO
 
 
5,246,046
 
 
39,004,454
 
 
—
 
1998(A)
 
CORONA HILLS, COSTCO
 
 
10,533,810
 
 
56,985,528
 
 
—
 
1998(A)
 
LABAND VILLAGE SC
 
 
157,992
 
 
18,944,172
 
 
9,621,184
 
2005(A)
 
LA MIRADA THEATRE CENTER
 
 
5,365,198
 
 
30,066,952
 
 
—
 
1998(A)
 
PLAZA DI NORTHRIDGE
 
 
568,573
 
 
59,411,193
 
 
31,193,806
 
2005(A)
 
POWAY CITY CENTRE
 
 
458,879
 
 
20,436,902
 
 
—
 
2005(A)
 
THE CENTRE
 
 
2,148,933
 
 
15,066,351
 
 
—
 
1999(A)
 
SANTA ANA, HOME DEPOT
 
 
3,548,040
 
 
19,389,581
 
 
—
 
1998(A)
 
SANTEE TOWN CENTER
 
 
1,748,939
 
 
10,458,263
 
 
—
 
1998(A)
 
FULTON MARKET PLACE
 
 
11,347
 
 
10,508,132
 
 
7,386,469
 
2005(A)
 
MARIGOLD SC
 
 
453,265
 
 
44,151,875
 
 
19,692,278
 
2005(A)
 
WESTLAKE SHOPPING CENTER
 
 
5,316,914
 
 
100,664,115
 
 
—
 
2002(A)
 
VILLAGE ON THE PARK
 
 
1,910,414
 
 
9,979,307
 
 
—
 
1998(A)
 
AURORA QUINCY
 
 
957,506
 
 
5,011,373
 
 
2,248,369
 
1998(A)
 
AURORA EAST BANK
 
 
1,275,050
 
 
6,566,340
 
 
—
 
1998(A)
 
SPRING CREEK COLORADO
 
 
1,176,457
 
 
5,991,860
 
 
—
 
1998(A)
 
DENVER WEST 38TH STREET
 
 
131,311
 
 
676,840
 
 
—
 
1998(A)
 
ENGLEWOOD PHAR MOR
 
 
660,302
 
 
3,467,132
 
 
—
 
1998(A)
 
FORT COLLINS
 
 
1,140,533
 
 
7,738,241
 
 
2,770,936
 
2000(A)
 
HERITAGE WEST
 
 
1,256,879
 
 
6,509,007
 
 
—
 
1998(A)
 
BRANFORD PLAZA
 
 
26,364
 
 
1,339,206
 
 
613,723
 
2005(A)
 
WEST FARM SHOPPING CENTER
 
 
4,480,030
 
 
24,933,552
 
 
—
 
1998(A)
 
FARMINGTON PLAZA
 
 
36,053
 
 
1,609,460
 
 
613,723
 
2005(A)
 
N.HAVEN, HOME DEPOT
 
 
5,988,691
 
 
32,738,973
 
 
—
 
1998(A)
 
SOUTHINGTON PLAZA
 
 
28,099
 
 
1,403,325
 
 
613,723
 
2005(A)
 
WATERBURY
 
 
2,856,390
 
 
8,687,946
 
 
—
 
1993(A)
 
DOVER
 
 
937
 
 
4,983,665
 
 
—
 
2003(A)
 
ELSMERE
 
 
3,185,641
 
 
—
 
 
—
 
1979(C)
 
ALTAMONTE SPRINGS
 
 
801,631
 
 
3,219,992
 
 
—
 
1995(A)
 
BOCA RATON
 
 
1,256,338
 
 
2,835,178
 
 
—
 
1992(A)
 
BRADENTON
 
 
409,427
 
 
348,397
 
 
—
 
1968(C)
 
BAYSHORE GARDENS, BRADENTON FL
 
 
2,379,651
 
 
12,720,419
 
 
—
 
1998(A)
 
BRADENTON PLAZA
 
 
25,726
 
 
1,266,552
 
 
—
 
2005(A)
 
CORAL SPRINGS
 
 
1,488,555
 
 
5,300,344
 
 
—
 
1994(A)
 
CORAL SPRINGS
 
 
1,395,175
 
 
7,060,699
 
 
—
 
1997(A)
 
CURLEW CROSSING S.C.
 
 
409,771
 
 
18,569,721
 
 
—
 
2005(A)
 
EAST ORLANDO
 
 
2,149,406
 
 
2,712,337
 
 
—
 
1971(C)
 
FERN PARK
 
 
2,004,444
 
 
2,026,120
 
 
—
 
1968(C)
 
REGENCY PLAZA
 
 
1,553,596
 
 
10,697,364
 
 
—
 
1999(A)
 
FLINT PLAZA
 
 
—
 
 
12,941,016
 
 
—
 
2005(C)
 
SHOPPES AT AMELIA CONCOURSE
 
 
—
 
 
11,956,546
 
 
—
 
2003(C)
 
AVENUES WALKS
 
 
—
 
 
28,777,753
 
 
—
 
2005(C)
 
KISSIMMEE
 
 
1,734,170
 
 
6,685,632
 
 
—
 
1996(A)
 
LAUDERDALE LAKES
 
 
3,650,947
 
 
2,136,550
 
 
—
 
1968(C)
 
 
111
 
 
 
INITIAL COST
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPERTIES
 
LAND
 
BUILDING
AND
IMPROVEMENT
 
SUBSEQUENT
TO ACQUISITION
 
LAND
 
BUILDINGS AND
IMPROVEMENTS
 
TOTAL
 
 
 
 
 
 
 
 
MERCHANTS WALK
 
2,580,816
 
10,366,090
 
525,487
 
 
2,580,816
 
 
10,891,577
 
 
13,472,393
 
LARGO
 
293,686
 
792,119
 
1,154,515
 
 
293,686
 
 
1,946,634
 
 
2,240,320
 
LEESBURG
 
—
 
171,636
 
183,308
 
 
—
 
 
354,944
 
 
354,944
 
LARGO EAST BAY
 
2,832,296
 
11,329,185
 
1,275,567
 
 
2,832,296
 
 
12,604,752
 
 
15,437,048
 
LAUDERHILL
 
1,002,733
 
2,602,415
 
10,756,563
 
 
1,774,443
 
 
12,587,268
 
 
14,361,711
 
MELBOURNE
 
—
 
1,754,000
 
2,997,250
 
 
—
 
 
4,751,250
 
 
4,751,250
 
GROVE GATE
 
365,893
 
1,049,172
 
1,165,106
 
 
365,893
 
 
2,214,278
 
 
2,580,171
 
NORTH MIAMI
 
732,914
 
4,080,460
 
10,713,057
 
 
732,914
 
 
14,793,517
 
 
15,526,431
 
MILLER ROAD
 
1,138,082
 
4,552,327
 
1,673,910
 
 
1,138,082
 
 
6,226,237
 
 
7,364,319
 
MARGATE
 
2,948,530
 
11,754,120
 
2,900,969
 
 
2,948,530
 
 
14,655,089
 
 
17,603,619
 
MT. DORA
 
1,011,000
 
4,062,890
 
139,971
 
 
1,011,000
 
 
4,202,861
 
 
5,213,861
 
PLANTATION CROSSING
 
7,524,800
 
—
 
—
 
 
7,524,800
 
 
1,376,058
 
 
8,900,858
 
ORLANDO
 
923,956
 
3,646,904
 
1,891,604
 
 
1,172,119
 
 
5,290,345
 
 
6,462,464
 
RENAISSANCE CENTER
 
9,104,379
 
36,540,873
 
4,371,195
 
 
9,104,379
 
 
40,912,068
 
 
50,016,447
 
SAND LAKE
 
3,092,706
 
12,370,824
 
1,519,511
 
 
3,092,706
 
 
13,890,335
 
 
16,983,041
 
ORLANDO
 
560,800
 
2,268,112
 
3,065,682
 
 
580,030
 
 
5,314,564
 
 
5,894,594
 
OCALA
 
1,980,000
 
7,927,484
 
3,466,863
 
 
1,980,000
 
 
11,394,347
 
 
13,374,347
 
POMPANO BEACH
 
97,169
 
874,442
 
1,404,350
 
 
97,169
 
 
2,278,792
 
 
2,375,961
 
PALATKA
 
130,844
 
556,658
 
1,071,044
 
 
130,844
 
 
1,627,702
 
 
1,758,546
 
ST. PETERSBURG
 
—
 
917,360
 
847,730
 
 
—
 
 
1,765,090
 
 
1,765,090
 
TUTTLE BEE SARASOTA
 
254,961
 
828,465
 
1,747,305
 
 
254,961
 
 
2,575,770
 
 
2,830,731
 
SOUTH EAST SARASOTA
 
1,283,400
 
5,133,544
 
3,428,658
 
 
1,440,264
 
 
8,405,338
 
 
9,845,602
 
SANFORD
 
1,832,732
 
9,523,261
 
5,665,768
 
 
1,832,732
 
 
15,189,029
 
 
17,021,761
 
STUART
 
2,109,677
 
8,415,323
 
471,059
 
 
2,109,677
 
 
8,886,382
 
 
10,996,059
 
SOUTH MIAMI
 
1,280,440
 
5,133,825
 
2,705,210
 
 
1,280,440
 
 
7,839,035
 
 
9,119,475
 
TAMPA
 
2,820,000
 
11,283,189
 
1,925,241
 
 
2,820,000
 
 
13,208,430
 
 
16,028,430
 
TAMPA
 
2,400,445
 
5,601,039
 
—
 
 
2,400,445
 
 
5,601,039
 
 
8,001,484
 
VILLAGE COMMONS S.C.
 
2,192,331
 
8,774,158
 
528,183
 
 
2,192,331
 
 
9,302,341
 
 
11,494,672
 
MISSION BELL SHOPPING CENTER
 
5,056,426
 
11,843,119
 
136,859
 
 
5,067,033
 
 
13,048,075
 
 
18,115,108
 
WEST PALM BEACH
 
550,896
 
2,298,964
 
833,672
 
 
550,896
 
 
3,132,636
 
 
3,683,532
 
THE SHOPS AT WEST MELBOURNE
 
2,200,000
 
8,829,541
 
3,406,701
 
 
2,200,000
 
 
12,236,242
 
 
14,436,242
 
AUGUSTA
 
1,482,564
 
5,928,122
 
1,978,769
 
 
1,482,564
 
 
7,906,891
 
 
9,389,455
 
MACON
 
262,700
 
1,487,860
 
1,662,488
 
 
349,326
 
 
3,063,722
 
 
3,413,048
 
SAVANNAH
 
2,052,270
 
8,232,978
 
1,210,449
 
 
2,052,270
 
 
9,443,427
 
 
11,495,697
 
SAVANNAH
 
652,255
 
2,616,522
 
393,302
 
 
652,255
 
 
3,009,824
 
 
3,662,079
 
CLIVE
 
500,525
 
2,002,101
 
—
 
 
500,525
 
 
2,002,101
 
 
2,502,626
 
SOUTHDALE SHOPPING CENTER
 
1,720,330
 
6,916,294
 
938,211
 
 
1,720,330
 
 
7,854,504
 
 
9,574,834
 
DES MOINES
 
500,525
 
2,559,019
 
37,079
 
 
500,525
 
 
2,596,098
 
 
3,096,623
 
DUBUQUE
 
—
 
2,152,476
 
10,848
 
 
—
 
 
2,163,324
 
 
2,163,324
 
WATERLOO
 
500,525
 
2,002,101
 
2,869,100
 
 
500,525
 
 
4,871,201
 
 
5,371,726
 
TREASURE VALLEY MARKETPLACE
 
—
 
—
 
—
 
 
2,718,039
 
 
—
 
 
2,718,039
 
 NAMPA (HORSHAM) FUTURE DEV.
 
6,501,240
 
—
 
—
 
 
6,501,240
 
 
147,510
 
 
6,648,750
 
ALTON, BELTLINE HWY
 
329,532
 
1,987,981
 
59,934
 
 
329,532
 
 
2,047,915
 
 
2,377,447
 
AURORA, N. LAKE
 
2,059,908
 
9,531,721
 
—
 
 
2,059,908
 
 
9,531,721
 
 
11,591,629
 
KRC ARLINGTON HEIGHT
 
1,983,517
 
9,178,272
 
(5,174,697
)
 
1,983,517
 
 
4,003,575
 
 
5,987,092
 
BLOOMINGTON
 
805,521
 
2,222,353
 
5,163,864
 
 
805,521
 
 
7,386,217
 
 
8,191,738
 
BELLEVILLE, WESTFIELD PLAZA
 
—
 
5,372,253
 
—
 
 
—
 
 
5,372,253
 
 
5,372,253
 
BRADLEY
 
500,422
 
2,001,687
 
—
 
 
500,422
 
 
2,001,687
 
 
2,502,109
 
CALUMET CITY
 
1,479,217
 
8,815,760
 
12,429,068
 
 
1,479,217
 
 
21,244,828
 
 
22,724,045
 
COUNTRYSIDE
 
—
 
4,770,671
 
1,137,295
 
 
1,101,670
 
 
4,806,296
 
 
5,907,966
 
CARBONDALE
 
—
 
500,000
 
—
 
 
—
 
 
500,000
 
 
500,000
 
CHICAGO
 
—
 
2,687,046
 
633,471
 
 
—
 
 
3,320,517
 
 
3,320,517
 
CHAMPAIGN, NEIL ST.
 
230,519
 
1,285,460
 
82,606
 
 
230,519
 
 
1,368,066
 
 
1,598,585
 
ELSTON
 
1,010,375
 
5,692,211
 
—
 
 
1,010,375
 
 
5,692,211
 
 
6,702,586
 
S. CICERO
 
—
 
1,541,560
 
149,203
 
 
—
 
 
1,690,763
 
 
1,690,763
 
CRYSTAL LAKE, NW HWY
 
179,964
 
1,025,811
 
317,841
 
 
180,269
 
 
1,343,347
 
 
1,523,616
 
CRYSTAL LAKE PLAZA
 
353,768
 
—
 
—
 
 
353,768
 
 
1,184,688
 
 
1,538,456
 
BUTTERFIELD SQUARE
 
1,601,960
 
6,637,926
 
299,681
 
 
1,603,277
 
 
6,936,290
 
 
8,539,567
 
DOWNERS PARK PLAZA
 
2,510,455
 
10,164,494
 
558,484
 
 
2,510,455
 
 
10,722,978
 
 
13,233,433
 
DOWNER GROVE
 
811,778
 
4,322,956
 
1,705,158
 
 
811,778
 
 
6,028,114
 
 
6,839,892
 
ELGIN
 
842,555
 
2,108,674
 
2,103,076
 
 
842,555
 
 
4,211,750
 
 
5,054,305
 
EVERGREEN PARK PLAZA
 
197,843
 
—
 
—
 
 
197,843
 
 
823,776
 
 
1,021,620
 
FOREST PARK
 
—
 
2,335,884
 
—
 
 
—
 
 
2,335,884
 
 
2,335,884
 
 
PROPERTIES
 
ACCUMULATED
DEPRECIATION
 
TOTAL COST,
NET OF ACCUMULATED
DEPRECIATION
 
ENCUMBRANCES
 
DATE OF
CONSTRUCTION(C)
ACQUISITION(A)
 
 
 
 
 
 
MERCHANTS WALK
 
 
1,203,629
 
 
12,268,765
 
 
—
 
2001(A)
 
LARGO
 
 
1,753,673
 
 
486,647
 
 
—
 
1968(C)
 
LEESBURG
 
 
266,000
 
 
88,944
 
 
—
 
1969(C)
 
LARGO EAST BAY
 
 
4,898,075
 
 
10,538,973
 
 
—
 
1992(A)
 
LAUDERHILL
 
 
6,651,972
 
 
7,709,738
 
 
—
 
1974(C)
 
MELBOURNE
 
 
2,233,658
 
 
2,517,592
 
 
—
 
1968(C)
 
GROVE GATE
 
 
1,714,992
 
 
865,179
 
 
—
 
1968(C)
 
NORTH MIAMI
 
 
5,867,625
 
 
9,658,806
 
 
—
 
1985(A)
 
MILLER ROAD
 
 
4,998,126
 
 
2,366,192
 
 
—
 
1986(A)
 
MARGATE
 
 
4,239,627
 
 
13,363,992
 
 
—
 
1993(A)
 
MT. DORA
 
 
872,808
 
 
4,341,053
 
 
—
 
1997(A)
 
PLANTATION CROSSING
 
 
—
 
 
8,900,858
 
 
—
 
2005(C)
 
ORLANDO
 
 
1,545,290
 
 
4,917,174
 
 
—
 
1995(A)
 
RENAISSANCE CENTER
 
 
9,235,874
 
 
40,780,573
 
 
—
 
1998(A)
 
SAND LAKE
 
 
3,992,472
 
 
12,990,569
 
 
—
 
1994(A)
 
ORLANDO
 
 
1,027,040
 
 
4,867,555
 
 
—
 
1996(A)
 
OCALA
 
 
2,211,407
 
 
11,162,940
 
 
—
 
1997(A)
 
POMPANO BEACH
 
 
1,347,695
 
 
1,028,266
 
 
—
 
1968(C)
 
PALATKA
 
 
774,511
 
 
984,035
 
 
—
 
1970(C)
 
ST. PETERSBURG
 
 
758,930
 
 
1,006,160
 
 
—
 
1968(C)
 
TUTTLE BEE SARASOTA
 
 
1,804,753
 
 
1,025,978
 
 
—
 
1970(C)
 
SOUTH EAST SARASOTA
 
 
3,121,402
 
 
6,724,200
 
 
—
 
1989(A)
 
SANFORD
 
 
6,019,179
 
 
11,002,582
 
 
—
 
1989(A)
 
STUART
 
 
2,588,936
 
 
8,407,123
 
 
—
 
1994(A)
 
SOUTH MIAMI
 
 
1,888,487
 
 
7,230,988
 
 
—
 
1995(A)
 
TAMPA
 
 
2,781,828
 
 
13,246,602
 
 
—
 
1997(A)
 
TAMPA
 
 
190,243
 
 
7,811,241
 
 
—
 
2004(A)
 
VILLAGE COMMONS S.C.
 
 
1,634,209
 
 
9,860,463
 
 
—
 
1998(A)
 
MISSION BELL SHOPPING CENTER
 
 
2,116,651
 
 
15,998,457
 
 
—
 
2004(A)
 
WEST PALM BEACH
 
 
721,293
 
 
2,962,239
 
 
—
 
1995(A)
 
THE SHOPS AT WEST MELBOURNE
 
 
2,064,021
 
 
12,372,221
 
 
—
 
1998(A)
 
AUGUSTA
 
 
1,672,363
 
 
7,717,092
 
 
—
 
1995(A)
 
MACON
 
 
1,736,847
 
 
1,676,201
 
 
—
 
1969(C)
 
SAVANNAH
 
 
2,809,074
 
 
8,686,622
 
 
—
 
1993(A)
 
SAVANNAH
 
 
756,967
 
 
2,905,112
 
 
—
 
1995(A)
 
CLIVE
 
 
509,082
 
 
1,993,544
 
 
—
 
1996(A)
 
SOUTHDALE SHOPPING CENTER
 
 
1,322,522
 
 
8,252,313
 
 
4,034,954
 
1999(A)
 
DES MOINES
 
 
640,300
 
 
2,456,323
 
 
—
 
1996(A)
 
DUBUQUE
 
 
450,420
 
 
1,712,904
 
 
—
 
1997(A)
 
WATERLOO
 
 
688,398
 
 
4,683,327
 
 
—
 
1996(A)
 
TREASURE VALLEY MARKETPLACE
 
 
—
 
 
2,718,039
 
 
—
 
2005(C)
 
 NAMPA (HORSHAM) FUTURE DEV.
 
 
—
 
 
6,648,750
 
 
—
 
2005(C)
 
ALTON, BELTLINE HWY
 
 
757,301
 
 
1,620,146
 
 
—
 
1998(A)
 
AURORA, N. LAKE
 
 
1,811,494
 
 
9,780,135
 
 
—
 
1998(A)
 
KRC ARLINGTON HEIGHT
 
 
1,427,643
 
 
4,559,449
 
 
—
 
1998(A)
 
BLOOMINGTON
 
 
4,107,676
 
 
4,084,062
 
 
—
 
1972(C)
 
BELLEVILLE, WESTFIELD PLAZA
 
 
1,021,521
 
 
4,350,732
 
 
—
 
1998(A)
 
BRADLEY
 
 
589,274
 
 
1,912,835
 
 
—
 
1996(A)
 
CALUMET CITY
 
 
1,784,739
 
 
20,939,306
 
 
—
 
1997(A)
 
COUNTRYSIDE
 
 
971,560
 
 
4,936,406
 
 
—
 
1997(A)
 
CARBONDALE
 
 
89,744
 
 
410,256
 
 
—
 
1997(A)
 
CHICAGO
 
 
595,842
 
 
2,724,676
 
 
—
 
1997(A)
 
CHAMPAIGN, NEIL ST.
 
 
234,390
 
 
1,364,195
 
 
—
 
1998(A)
 
ELSTON
 
 
1,082,244
 
 
5,620,342
 
 
—
 
1997(A)
 
S. CICERO
 
 
356,174
 
 
1,334,590
 
 
—
 
1997(A)
 
CRYSTAL LAKE, NW HWY
 
 
225,474
 
 
1,298,142
 
 
—
 
1998(A)
 
CRYSTAL LAKE PLAZA
 
 
21,572
 
 
1,516,884
 
 
956,712
 
2005(A)
 
BUTTERFIELD SQUARE
 
 
1,185,158
 
 
7,354,409
 
 
—
 
1998(A)
 
DOWNERS PARK PLAZA
 
 
1,902,129
 
 
11,331,305
 
 
—
 
1999(A)
 
DOWNER GROVE
 
 
1,134,099
 
 
5,705,793
 
 
—
 
1997(A)
 
ELGIN
 
 
2,824,750
 
 
2,229,554
 
 
—
 
1972(C)
 
EVERGREEN PARK PLAZA
 
 
19,628
 
 
1,001,991
 
 
—
 
2005(A)
 
FOREST PARK
 
 
494,150
 
 
1,841,734
 
 
—
 
1997(A)
 
 
112
 
 
 
INITIAL COST
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPERTIES
 
LAND
 
BUILDING
AND
IMPROVEMENT
 
SUBSEQUENT
TO ACQUISITION
 
LAND
 
BUILDINGS AND
IMPROVEMENTS
 
TOTAL
 
 
 
 
 
 
 
 
FAIRVIEW HTS, BELLVILLE RD.
 
—
 
11,866,880
 
1,831,567
 
 
—
 
 
13,698,447
 
 
13,698,447
 
GENEVA
 
500,422
 
12,917,712
 
35,949
 
 
500,422
 
 
12,953,661
 
 
13,454,083
 
HILLSIDE PLAZA
 
178,253
 
824,482
 
—
 
 
178,253
 
 
824,482
 
 
1,002,735
 
LAKE ZURICH PLAZA
 
233,698
 
1,265,023
 
—
 
 
233,698
 
 
1,265,023
 
 
1,498,721
 
LIBERTYVILLE PLAZA
 
219,439
 
1,097,393
 
—
 
 
219,439
 
 
1,097,393
 
 
1,316,831
 
MATTERSON
 
950,515
 
6,292,319
 
10,504,928
 
 
950,515
 
 
16,797,247
 
 
17,747,762
 
MT. PROSPECT
 
1,017,345
 
6,572,176
 
3,551,071
 
 
1,017,345
 
 
10,123,247
 
 
11,140,592
 
MUNDELEIN, S. LAKE
 
1,127,720
 
5,826,129
 
42,333
 
 
1,129,634
 
 
5,866,548
 
 
6,996,182
 
NORRIDGE
 
—
 
2,918,315
 
—
 
 
—
 
 
2,918,315
 
 
2,918,315
 
NAPERVILLE
 
669,483
 
4,464,998
 
70,678
 
 
669,483
 
 
4,535,676
 
 
5,205,159
 
NAPERVILLE PLAZA
 
239,486
 
—
 
—
 
 
239,486
 
 
1,152,454
 
 
1,391,939
 
OTTAWA
 
137,775
 
784,269
 
361,788
 
 
137,775
 
 
1,146,057
 
 
1,283,832
 
ORLAND PARK, S. HARLEM
 
476,972
 
2,764,775
 
1,114,785
 
 
476,972
 
 
3,879,560
 
 
4,356,532
 
OAK LAWN
 
1,530,111
 
8,776,631
 
130,821
 
 
1,530,111
 
 
8,907,452
 
 
10,437,563
 
OAKBROOK TERRACE
 
1,527,188
 
8,679,108
 
2,957,327
 
 
1,527,188
 
 
11,636,435
 
 
13,163,623
 
PEORIA
 
—
 
5,081,290
 
1,457,225
 
 
—
 
 
6,538,515
 
 
6,538,515
 
FREESTATE BOWL
 
343,723
 
1,129,198
 
(311,854
)
 
252,723
 
 
998,099
 
 
1,250,822
 
ROUND LAKE BEACH PLAZA
 
790,129
 
1,634,148
 
—
 
 
790,129
 
 
1,634,148
 
 
2,424,277
 
SKOKIE
 
—
 
2,276,360
 
9,488,383
 
 
2,628,440
 
 
9,136,303
 
 
11,764,743
 
KRC STREAMWOOD
 
181,962
 
1,057,740
 
181,885
 
 
181,962
 
 
1,239,625
 
 
1,421,587
 
ST. CHARLES PLAZA
 
240,395
 
930,262
 
—
 
 
240,395
 
 
930,262
 
 
1,170,658
 
WOODGROVE FESTIVAL
 
5,049,149
 
20,822,993
 
1,773,452
 
 
5,049,149
 
 
22,596,445
 
 
27,645,594
 
WAUKEGAN
 
203,427
 
1,161,847
 
37,012
 
 
203,772
 
 
1,198,514
 
 
1,402,286
 
WAUKEGAN PLAZA
 
349,409
 
883,975
 
—
 
 
349,409
 
 
883,975
 
 
1,233,384
 
PLAZA EAST
 
1,236,149
 
4,944,597
 
2,820,843
 
 
1,140,849
 
 
7,860,740
 
 
9,001,589
 
PLAZA WEST
 
808,435
 
3,210,187
 
624,109
 
 
808,435
 
 
3,834,296
 
 
4,642,731
 
FELBRAM
 
72,971
 
302,579
 
454,590
 
 
72,971
 
 
757,169
 
 
830,140
 
FORT WAYNE PLAZA
 
60,554
 
229,943
 
—
 
 
60,554
 
 
229,943
 
 
290,497
 
GREENWOOD
 
423,371
 
1,883,421
 
1,738,082
 
 
423,371
 
 
3,621,503
 
 
4,044,874
 
GRIFFITH
 
—
 
2,495,820
 
981,912
 
 
1,001,100
 
 
2,476,632
 
 
3,477,732
 
INDIANAPOLIS
 
447,600
 
3,607,193
 
2,704,055
 
 
447,600
 
 
6,311,248
 
 
6,758,848
 
LAFAYETTE
 
230,402
 
1,305,943
 
158,525
 
 
230,402
 
 
1,464,468
 
 
1,694,870
 
LAFAYETTE
 
812,810
 
3,252,269
 
3,433,080
 
 
2,379,198
 
 
5,118,962
 
 
7,498,159
 
KIMCO LAFAYETTE MARKET PLACE
 
4,184,000
 
16,752,165
 
235,913
 
 
4,184,000
 
 
16,988,078
 
 
21,172,078
 
KRC MISHAWAKA 895
 
378,088
 
1,999,079
 
642
 
 
378,730
 
 
1,999,079
 
 
2,377,809
 
MERRILLVILLE PLAZA
 
197,415
 
765,630
 
—
 
 
197,415
 
 
765,630
 
 
963,045
 
SOUTH BEND, S. HIGH ST.
 
183,463
 
1,070,401
 
196,858
 
 
183,463
 
 
1,267,259
 
 
1,450,722
 
OVERLAND PARK
 
1,183,911
 
6,335,308
 
142,374
 
 
1,185,906
 
 
6,475,687
 
 
7,661,593
 
BELLEVUE
 
405,217
 
1,743,573
 
138,965
 
 
405,217
 
 
1,882,538
 
 
2,287,755
 
FLORENCE PLAZA
 
176,796
 
678,383
 
—
 
 
176,796
 
 
678,383
 
 
855,179
 
LEXINGTON
 
1,675,031
 
6,848,209
 
5,128,392
 
 
1,551,079
 
 
12,100,553
 
 
13,651,632
 
PADUCAH MALL, KY
 
—
 
1,047,281
 
(123,196
)
 
—
 
 
924,085
 
 
924,085
 
HAMMOND AIR PLAZA
 
3,813,873
 
15,260,609
 
1,236,448
 
 
3,813,873
 
 
16,497,058
 
 
20,310,930
 
KIMCO HOUMA 274, LLC
 
1,980,000
 
7,945,784
 
121,888
 
 
1,980,000
 
 
8,067,672
 
 
10,047,672
 
LAFAYETTE
 
2,115,000
 
8,508,218
 
8,958,584
 
 
3,678,274
 
 
15,903,528
 
 
19,581,802
 
GREAT BARRINGTON
 
642,170
 
2,547,830
 
7,012,764
 
 
751,124
 
 
9,451,640
 
 
10,202,764
 
SHREWSBURY SHOPPING CENTER
 
1,284,168
 
5,284,853
 
4,496,351
 
 
1,284,168
 
 
9,781,203
 
 
11,065,371
 
CLUB CENTRE AT PIKESVILLE
 
1,630,003
 
5,354,041
 
(67,088
)
 
1,626,003
 
 
5,716,588
 
 
7,342,591
 
HARFORD BUSINESS PARK
 
307,278
 
1,010,280
 
387,687
 
 
425,278
 
 
1,360,205
 
 
1,785,483
 
HARFORD INDUSTRIAL PARK
 
2,755,863
 
—
 
(2,580,737
)
 
175,126
 
 
—
 
 
175,126
 
HICKORY RIDGE
 
8,175,025
 
19,162,695
 
—
 
 
8,175,025
 
 
20,787,670
 
 
28,962,695
 
WILDE LAKE
 
1,468,038
 
5,869,862
 
83,525
 
 
1,468,038
 
 
5,953,387
 
 
7,421,424
 
LYNX LANE
 
1,019,035
 
4,091,894
 
85,071
 
 
1,019,035
 
 
4,176,965
 
 
5,196,000
 
CLINTON BANK BUILDING
 
141,964
 
466,369
 
(200,070
)
 
82,964
 
 
362,370
 
 
445,335
 
CLINTON BOWL
 
39,779
 
130,716
 
(6,141
)
 
38,779
 
 
135,963
 
 
174,742
 
VILLAGES AT URBANA
 
3,190,074
 
6,067
 
3,704,742
 
 
4,828,774
 
 
2,072,110
 
 
6,900,883
 
GAITHERSBURG
 
244,890
 
6,787,534
 
264,386
 
 
244,890
 
 
7,051,920
 
 
7,296,810
 
HAGERSTOWN
 
541,389
 
2,165,555
 
1,050,933
 
 
541,389
 
 
3,216,488
 
 
3,757,877
 
SHAWAN PLAZA
 
4,500,000
 
21,859,285
 
(2,824,831
)
 
4,466,000
 
 
20,754,709
 
 
25,220,709
 
LAUREL
 
349,562
 
1,398,250
 
997,085
 
 
349,562
 
 
2,395,335
 
 
2,744,897
 
LAUREL
 
274,580
 
1,100,968
 
283,421
 
 
274,580
 
 
1,384,389
 
 
1,658,969
 
LARGO/LANDOVER
 
982,266
 
27,223,105
 
164,979
 
 
982,266
 
 
27,388,084
 
 
28,370,351
 
SOUTHWEST MIXED USE PROPERTY
 
403,034
 
1,325,126
 
173,667
 
 
361,034
 
 
1,646,035
 
 
2,007,069
 
 
PROPERTIES
 
ACCUMULATED
DEPRECIATION
 
TOTAL COST,
NET OF ACCUMULATED
DEPRECIATION
 
ENCUMBRANCES
 
DATE OF
CONSTRUCTION(C)
ACQUISITION(A)
 
 
 
 
 
 
FAIRVIEW HTS, BELLVILLE RD.
 
 
2,390,863
 
 
11,307,583
 
 
—
 
1998(A)
 
GENEVA
 
 
2,586,932
 
 
10,867,152
 
 
9,314,409
 
1996(A)
 
HILLSIDE PLAZA
 
 
6,081
 
 
996,654
 
 
—
 
2005(A)
 
LAKE ZURICH PLAZA
 
 
22,646
 
 
1,476,076
 
 
962,638
 
2005(A)
 
LIBERTYVILLE PLAZA
 
 
18,140
 
 
1,298,691
 
 
967,828
 
2005(A)
 
MATTERSON
 
 
2,016,522
 
 
15,731,240
 
 
—
 
1997(A)
 
MT. PROSPECT
 
 
1,672,696
 
 
9,467,896
 
 
—
 
1997(A)
 
MUNDELEIN, S. LAKE
 
 
1,109,056
 
 
5,887,126
 
 
—
 
1998(A)
 
NORRIDGE
 
 
611,673
 
 
2,306,642
 
 
—
 
1997(A)
 
NAPERVILLE
 
 
889,862
 
 
4,315,297
 
 
—
 
1997(A)
 
NAPERVILLE PLAZA
 
 
19,362
 
 
1,372,577
 
 
—
 
2005(A)
 
OTTAWA
 
 
961,426
 
 
322,406
 
 
—
 
1970(C)
 
ORLAND PARK, S. HARLEM
 
 
620,644
 
 
3,735,889
 
 
—
 
1998(A)
 
OAK LAWN
 
 
1,812,385
 
 
8,625,179
 
 
14,319,368
 
1997(A)
 
OAKBROOK TERRACE
 
 
1,951,616
 
 
11,212,007
 
 
—
 
1997(A)
 
PEORIA
 
 
1,249,014
 
 
5,289,501
 
 
—
 
1997(A)
 
FREESTATE BOWL
 
 
186,764
 
 
1,064,058
 
 
—
 
2003(A)
 
ROUND LAKE BEACH PLAZA
 
 
64,060
 
 
2,360,217
 
 
—
 
2005(A)
 
SKOKIE
 
 
1,110,615
 
 
10,654,128
 
 
7,940,034
 
1997(A)
 
KRC STREAMWOOD
 
 
214,413
 
 
1,207,173
 
 
—
 
1998(A)
 
ST. CHARLES PLAZA
 
 
16,377
 
 
1,154,281
 
 
—
 
2005(A)
 
WOODGROVE FESTIVAL
 
 
4,259,534
 
 
23,386,061
 
 
—
 
1998(A)
 
WAUKEGAN
 
 
209,011
 
 
1,193,276
 
 
—
 
1998(A)
 
WAUKEGAN PLAZA
 
 
12,609
 
 
1,220,775
 
 
—
 
2005(A)
 
PLAZA EAST
 
 
1,740,787
 
 
7,260,802
 
 
—
 
1995(A)
 
PLAZA WEST
 
 
894,251
 
 
3,748,480
 
 
—
 
1995(A)
 
FELBRAM
 
 
543,518
 
 
286,623
 
 
—
 
1970(C)
 
FORT WAYNE PLAZA
 
 
11,932
 
 
278,565
 
 
—
 
2005(A)
 
GREENWOOD
 
 
2,213,435
 
 
1,831,438
 
 
—
 
1970(C)
 
GRIFFITH
 
 
530,178
 
 
2,947,554
 
 
—
 
1997(A)
 
INDIANAPOLIS
 
 
4,171,804
 
 
2,587,044
 
 
—
 
1986(A)
 
LAFAYETTE
 
 
1,340,974
 
 
353,896
 
 
—
 
1971(C)
 
LAFAYETTE
 
 
937,481
 
 
6,560,678
 
 
—
 
1997(A)
 
KIMCO LAFAYETTE MARKET PLACE
 
 
3,394,305
 
 
17,777,773
 
 
—
 
1998(A)
 
KRC MISHAWAKA 895
 
 
379,292
 
 
1,998,517
 
 
—
 
1998(A)
 
MERRILLVILLE PLAZA
 
 
13,444
 
 
949,602
 
 
—
 
2005(A)
 
SOUTH BEND, S. HIGH ST.
 
 
216,048
 
 
1,234,674
 
 
—
 
1998(A)
 
OVERLAND PARK
 
 
1,183,759
 
 
6,477,834
 
 
—
 
1998(A)
 
BELLEVUE
 
 
1,783,177
 
 
504,578
 
 
—
 
1976(A)
 
FLORENCE PLAZA
 
 
15,260
 
 
839,919
 
 
—
 
2005(A)
 
LEXINGTON
 
 
3,640,180
 
 
10,011,452
 
 
—
 
1993(A)
 
PADUCAH MALL, KY
 
 
262,741
 
 
661,344
 
 
—
 
1998(A)
 
HAMMOND AIR PLAZA
 
 
3,543,247
 
 
16,767,683
 
 
—
 
1997(A)
 
KIMCO HOUMA 274, LLC
 
 
1,276,595
 
 
8,771,077
 
 
—
 
1999(A)
 
LAFAYETTE
 
 
2,979,466
 
 
16,602,336
 
 
—
 
1997(A)
 
GREAT BARRINGTON
 
 
2,050,646
 
 
8,152,118
 
 
—
 
1994(A)
 
SHREWSBURY SHOPPING CENTER
 
 
1,173,245
 
 
9,892,126
 
 
—
 
2000(A)
 
CLUB CENTRE AT PIKESVILLE
 
 
671,268
 
 
6,671,323
 
 
5,143,557
 
2003(A)
 
HARFORD BUSINESS PARK
 
 
374,347
 
 
1,411,136
 
 
—
 
2003(A)
 
HARFORD INDUSTRIAL PARK
 
 
—
 
 
175,126
 
 
—
 
2003(A)
 
HICKORY RIDGE
 
 
12,548
 
 
28,950,147
 
 
—
 
2005(A)
 
WILDE LAKE
 
 
571,167
 
 
6,850,258
 
 
—
 
2002(A)
 
LYNX LANE
 
 
410,892
 
 
4,785,109
 
 
—
 
2002(A)
 
CLINTON BANK BUILDING
 
 
101,736
 
 
343,599
 
 
—
 
2003(A)
 
CLINTON BOWL
 
 
46,442
 
 
128,300
 
 
—
 
2003(A)
 
VILLAGES AT URBANA
 
 
—
 
 
6,900,883
 
 
—
 
2003(A)
 
GAITHERSBURG
 
 
1,077,511
 
 
6,219,299
 
 
—
 
1999(A)
 
HAGERSTOWN
 
 
2,195,737
 
 
1,562,140
 
 
—
 
1973(C)
 
SHAWAN PLAZA
 
 
2,233,922
 
 
22,986,787
 
 
13,349,585
 
2003(A)
 
LAUREL
 
 
829,917
 
 
1,914,980
 
 
—
 
1995(A)
 
LAUREL
 
 
1,118,889
 
 
540,080
 
 
—
 
1972(C)
 
LARGO/LANDOVER
 
 
4,189,378
 
 
24,180,973
 
 
—
 
1999(A)
 
SOUTHWEST MIXED USE PROPERTY
 
 
618,776
 
 
1,388,293
 
 
—
 
2003(A)
 
 
113
 
 
 
INITIAL COST
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPERTIES
 
LAND
 
BUILDING
AND
IMPROVEMENT
 
SUBSEQUENT
TO ACQUISITION
 
LAND
 
BUILDINGS AND
IMPROVEMENTS
 
TOTAL
 
 
 
 
 
 
 
 
NORTH EAST STATION
 
—
 
—
 
869,385
 
 
869,385
 
 
—
 
 
869,385
 
OWINGS MILLS PLAZA
 
303,911
 
1,370,221
 
—
 
 
303,911
 
 
1,370,221
 
 
1,674,132
 
PERRY HALL
 
3,733,309
 
12,245,774
 
(1,461,335
)
 
3,339,309
 
 
11,221,439
 
 
14,560,748
 
TIMONIUM SHOPPING CENTER
 
6,000,000
 
24,282,998
 
7,180,151
 
 
7,707,000
 
 
32,092,689
 
 
39,799,689
 
WALDORF BOWL
 
225,099
 
739,362
 
25,548
 
 
235,099
 
 
813,688
 
 
1,048,787
 
WALDORF FIRESTONE
 
73,127
 
240,625
 
(54,099
)
 
57,127
 
 
221,621
 
 
278,748
 
BANGOR, ME
 
403,833
 
1,622,331
 
93,752
 
 
403,833
 
 
1,716,083
 
 
2,119,916
 
CLAWSON
 
1,624,771
 
6,578,142
 
2,740,539
 
 
1,624,771
 
 
9,318,681
 
 
10,943,452
 
WHITE LAKE
 
2,300,050
 
9,249,607
 
1,515,807
 
 
2,300,050
 
 
10,765,414
 
 
13,065,464
 
CANTON TWP PLAZA
 
163,740
 
926,150
 
—
 
 
163,740
 
 
926,150
 
 
1,089,890
 
CLINTON TWP PLAZA
 
175,515
 
714,279
 
—
 
 
175,515
 
 
714,279
 
 
889,794
 
DEARBORN HEIGHTS PLAZA
 
162,319
 
497,791
 
—
 
 
162,319
 
 
497,791
 
 
660,110
 
FARMINGTON
 
1,098,426
 
4,525,723
 
2,322,313
 
 
1,098,426
 
 
6,848,036
 
 
7,946,462
 
GRAND RAPIDS PLAZA
 
74,898
 
429,076
 
—
 
 
74,898
 
 
429,076
 
 
503,975
 
LIVONIA
 
178,785
 
925,818
 
812,303
 
 
178,785
 
 
1,738,121
 
 
1,916,906
 
LANSING PLAZA
 
245,014
 
406,349
 
—
 
 
245,014
 
 
406,349
 
 
651,363
 
MUSKEGON
 
391,500
 
958,500
 
825,035
 
 
391,500
 
 
1,783,535
 
 
2,175,035
 
OKEMOS PLAZA
 
166,706
 
591,193
 
—
 
 
166,706
 
 
591,193
 
 
757,899
 
TAYLOR
 
1,451,397
 
5,806,263
 
260,289
 
 
1,451,397
 
 
6,066,552
 
 
7,517,949
 
WALKER
 
3,682,478
 
14,730,060
 
1,889,480
 
 
3,682,478
 
 
16,619,540
 
 
20,302,018
 
EDEN PRAIRIE PLAZA
 
882,596
 
911,373
 
—
 
 
882,596
 
 
911,373
 
 
1,793,968
 
ROSEVILLE PLAZA
 
132,842
 
957,340
 
—
 
 
132,842
 
 
957,340
 
 
1,090,182
 
ST. PAUL PLAZA
 
699,916
 
623,966
 
—
 
 
699,916
 
 
623,966
 
 
1,323,883
 
BRIDGETON
 
—
 
2,196,834
 
—
 
 
—
 
 
2,196,834
 
 
2,196,834
 
BALLWIN PLAZA
 
395,935
 
783,520
 
—
 
 
395,935
 
 
783,520
 
 
1,179,455
 
CREVE COEUR, WOODCREST/OLIVE
 
1,044,598
 
5,475,623
 
615,905
 
 
960,813
 
 
6,175,312
 
 
7,136,126
 
CRYSTAL CITY, MI
 
—
 
234,378
 
—
 
 
—
 
 
234,378
 
 
234,378
 
INDEPENDENCE, NOLAND DR.
 
1,728,367
 
8,951,101
 
81,861
 
 
1,731,300
 
 
9,030,029
 
 
10,761,329
 
NORTH POINT SHOPPING CENTER
 
1,935,380
 
7,800,746
 
176,792
 
 
1,935,380
 
 
7,977,538
 
 
9,912,918
 
KIRKWOOD
 
—
 
9,704,005
 
10,264,052
 
 
—
 
 
19,968,057
 
 
19,968,057
 
KANSAS CITY
 
574,777
 
2,971,191
 
246,276
 
 
574,777
 
 
3,217,467
 
 
3,792,244
 
LEMAY
 
125,879
 
503,510
 
2,812,469
 
 
451,155
 
 
2,990,703
 
 
3,441,858
 
GRAVOIS
 
1,032,416
 
4,455,514
 
10,766,773
 
 
1,032,416
 
 
15,222,287
 
 
16,254,703
 
ST. CHARLES-UNDERDEVELOPED LAND, MO
 
431,960
 
—
 
758,855
 
 
431,960
 
 
758,855
 
 
1,190,815
 
SPRINGFIELD
 
2,745,595
 
10,985,778
 
4,691,168
 
 
2,904,022
 
 
15,518,519
 
 
18,422,541
 
KMART PARCEL
 
905,674
 
3,666,386
 
4,933,942
 
 
905,674
 
 
8,600,328
 
 
9,506,002
 
KRC ST. CHARLES
 
—
 
550,204
 
—
 
 
—
 
 
550,204
 
 
550,204
 
ST. LOUIS, CHRISTY BLVD.
 
809,087
 
4,430,514
 
1,539,193
 
 
809,087
 
 
5,969,707
 
 
6,778,794
 
OVERLAND
 
—
 
4,928,677
 
526,042
 
 
—
 
 
5,454,719
 
 
5,454,719
 
ST. LOUIS
 
—
 
5,756,736
 
243,917
 
 
—
 
 
6,000,653
 
 
6,000,653
 
ST. LOUIS
 
—
 
2,766,644
 
68,298
 
 
—
 
 
2,834,942
 
 
2,834,942
 
ST. PETERS
 
1,182,194
 
7,423,459
 
6,571,143
 
 
1,053,694
 
 
14,123,102
 
 
15,176,796
 
SPRINGFIELD,GLENSTONE AVE.
 
—
 
608,793
 
1,641,270
 
 
—
 
 
2,250,063
 
 
2,250,063
 
KDI-TURTLE CREEK
 
11,535,281
 
—
 
22,210,101
 
 
9,712,881
 
 
22,210,101
 
 
31,922,982
 
BURLINGTON COMMERCE PARK
 
1,330,894
 
—
 
(237,042
)
 
1,093,852
 
 
—
 
 
1,093,852
 
CHARLOTTE
 
919,251
 
3,570,981
 
1,036,008
 
 
919,251
 
 
4,606,989
 
 
5,526,240
 
CHARLOTTE
 
1,783,400
 
7,139,131
 
655,358
 
 
1,783,400
 
 
7,794,489
 
 
9,577,889
 
TYVOLA RD.
 
—
 
4,736,345
 
5,318,276
 
 
—
 
 
10,054,621
 
 
10,054,621
 
CROSSROADS PLAZA
 
767,864
 
3,098,881
 
—
 
 
767,864
 
 
3,098,881
 
 
3,866,744
 
KIMCO CARY 696, INC.
 
2,180,000
 
8,756,865
 
405,993
 
 
2,256,799
 
 
9,086,059
 
 
11,342,858
 
DURHAM
 
1,882,800
 
7,551,576
 
1,206,215
 
 
1,882,800
 
 
8,757,791
 
 
10,640,591
 
LANDMARK STATION S.C.
 
1,200,000
 
4,808,785
 
264,027
 
 
1,200,000
 
 
5,072,812
 
 
6,272,812
 
GASTONIA
 
2,467,696
 
9,870,785
 
1,159,042
 
 
2,467,696
 
 
11,029,827
 
 
13,497,523
 
HILLSBOROUGH CROSSING
 
2,750,820
 
—
 
(2,231,425
)
 
519,395
 
 
—
 
 
519,395
 
SHOPPES AT MIDWAY PLANTATION
 
6,681,212
 
—
 
—
 
 
6,681,212
 
 
6,947,477
 
 
13,628,689
 
RALEIGH
 
5,208,885
 
20,885,792
 
7,402,461
 
 
5,208,885
 
 
28,288,253
 
 
33,497,138
 
WAKEFIELD COMMONS II
 
6,506,450
 
—
 
8,845,341
 
 
5,998,650
 
 
9,353,141
 
 
15,351,791
 
WAKEFIELD CROSSINGS
 
3,413,932
 
—
 
(2,261,457
)
 
825,006
 
 
327,469
 
 
1,152,475
 
EDGEWATER PLACE
 
3,150,000
 
—
 
8,290,251
 
 
3,062,768
 
 
8,377,483
 
 
11,440,251
 
WAKEFIELD COMMONS
 
1,240,000
 
5,015,595
 
50,020
 
 
1,240,000
 
 
5,065,615
 
 
6,305,615
 
WINSTON-SALEM
 
540,667
 
719,655
 
5,064,520
 
 
540,667
 
 
5,784,175
 
 
6,324,842
 
SORENSON PARK PLAZA
 
5,104,294
 
—
 
—
 
 
5,104,291
 
 
10,858,859
 
 
15,963,150
 
NEW LONDON CENTER
 
4,323,827
 
10,088,930
 
—
 
 
4,323,827
 
 
11,011,346
 
 
15,335,174
 
 
PROPERTIES
 
ACCUMULATED
DEPRECIATION
 
TOTAL COST,
NET OF ACCUMULATED
DEPRECIATION
 
ENCUMBRANCES
 
DATE OF
CONSTRUCTION(C)
ACQUISITION(A)
 
 
 
 
 
 
NORTH EAST STATION
 
 
—
 
 
869,385
 
 
—
 
2003(A)
 
OWINGS MILLS PLAZA
 
 
26,542
 
 
1,647,591
 
 
—
 
2005(A)
 
PERRY HALL
 
 
1,432,861
 
 
13,127,886
 
 
5,539,084
 
2003(A)
 
TIMONIUM SHOPPING CENTER
 
 
5,194,431
 
 
34,605,258
 
 
10,049,289
 
2003(A)
 
WALDORF BOWL
 
 
105,129
 
 
943,659
 
 
—
 
2003(A)
 
WALDORF FIRESTONE
 
 
30,012
 
 
248,736
 
 
—
 
2003(A)
 
BANGOR, ME
 
 
174,937
 
 
1,944,979
 
 
—
 
2001(A)
 
CLAWSON
 
 
2,587,522
 
 
8,355,930
 
 
—
 
1993(A)
 
WHITE LAKE
 
 
2,518,394
 
 
10,547,071
 
 
—
 
1996(A)
 
CANTON TWP PLAZA
 
 
19,293
 
 
1,070,597
 
 
—
 
2005(A)
 
CLINTON TWP PLAZA
 
 
22,230
 
 
867,564
 
 
—
 
2005(A)
 
DEARBORN HEIGHTS PLAZA
 
 
12,450
 
 
647,661
 
 
—
 
2005(A)
 
FARMINGTON
 
 
1,890,861
 
 
6,055,600
 
 
—
 
1993(A)
 
GRAND RAPIDS PLAZA
 
 
24,543
 
 
479,432
 
 
—
 
2005(A)
 
LIVONIA
 
 
696,738
 
 
1,220,167
 
 
—
 
1968(C)
 
LANSING PLAZA
 
 
11,032
 
 
640,331
 
 
—
 
2005(A)
 
MUSKEGON
 
 
1,462,753
 
 
712,282
 
 
—
 
1985(A)
 
OKEMOS PLAZA
 
 
10,032
 
 
747,867
 
 
1,263,900
 
2005(A)
 
TAYLOR
 
 
1,852,058
 
 
5,665,892
 
 
—
 
1993(A)
 
WALKER
 
 
4,862,183
 
 
15,439,836
 
 
—
 
1993(A)
 
EDEN PRAIRIE PLAZA
 
 
23,756
 
 
1,770,212
 
 
—
 
2005(A)
 
ROSEVILLE PLAZA
 
 
19,734
 
 
1,070,449
 
 
—
 
2005(A)
 
ST. PAUL PLAZA
 
 
12,469
 
 
1,311,414
 
 
—
 
2005(A)
 
BRIDGETON
 
 
464,746
 
 
1,732,088
 
 
—
 
1997(A)
 
BALLWIN PLAZA
 
 
19,629
 
 
1,159,825
 
 
—
 
2005(A)
 
CREVE COEUR, WOODCREST/OLIVE
 
 
1,141,189
 
 
5,994,936
 
 
—
 
1998(A)
 
CRYSTAL CITY, MI
 
 
43,170
 
 
191,208
 
 
—
 
1997(A)
 
INDEPENDENCE, NOLAND DR.
 
 
1,712,229
 
 
9,049,101
 
 
—
 
1998(A)
 
NORTH POINT SHOPPING CENTER
 
 
1,434,867
 
 
8,478,050
 
 
6,966,888
 
1998(A)
 
KIRKWOOD
 
 
3,426,673
 
 
16,541,384
 
 
—
 
1998(A)
 
KANSAS CITY
 
 
657,937
 
 
3,134,307
 
 
—
 
1997(A)
 
LEMAY
 
 
640,021
 
 
2,801,838
 
 
—
 
1974(C)
 
GRAVOIS
 
 
5,713,982
 
 
10,540,721
 
 
—
 
1972(C)
 
ST. CHARLES-UNDERDEVELOPED LAND, MO
 
 
93,354
 
 
1,097,461
 
 
—
 
1998(A)
 
SPRINGFIELD
 
 
3,849,046
 
 
14,573,495
 
 
—
 
1994(A)
 
KMART PARCEL
 
 
704,308
 
 
8,801,694
 
 
2,873,484
 
2002(A)
 
KRC ST. CHARLES
 
 
98,755
 
 
451,449
 
 
—
 
1998(A)
 
ST. LOUIS, CHRISTY BLVD.
 
 
870,235
 
 
5,908,559
 
 
—
 
1998(A)
 
OVERLAND
 
 
1,087,860
 
 
4,366,859
 
 
—
 
1997(A)
 
ST. LOUIS
 
 
1,274,444
 
 
4,726,209
 
 
—
 
1997(A)
 
ST. LOUIS
 
 
589,524
 
 
2,245,418
 
 
—
 
1997(A)
 
ST. PETERS
 
 
3,185,052
 
 
11,991,744
 
 
—
 
1997(A)
 
SPRINGFIELD,GLENSTONE AVE.
 
 
300,781
 
 
1,949,282
 
 
—
 
1998(A)
 
KDI-TURTLE CREEK
 
 
—
 
 
31,922,982
 
 
19,947,214
 
2004(C)
 
BURLINGTON COMMERCE PARK
 
 
—
 
 
1,093,852
 
 
—
 
2003(C)
 
CHARLOTTE
 
 
1,197,961
 
 
4,328,279
 
 
—
 
1995(A)
 
CHARLOTTE
 
 
2,328,765
 
 
7,249,124
 
 
—
 
1993(A)
 
TYVOLA RD.
 
 
5,121,794
 
 
4,932,828
 
 
—
 
1986(A)
 
CROSSROADS PLAZA
 
 
437,130
 
 
3,429,615
 
 
—
 
2000(A)
 
KIMCO CARY 696, INC.
 
 
1,768,424
 
 
9,574,434
 
 
—
 
1998(A)
 
DURHAM
 
 
2,093,315
 
 
8,547,275
 
 
—
 
1996(A)
 
LANDMARK STATION S.C.
 
 
788,657
 
 
5,484,155
 
 
—
 
1999(A)
 
GASTONIA
 
 
4,652,211
 
 
8,845,312
 
 
—
 
1989(A)
 
HILLSBOROUGH CROSSING
 
 
—
 
 
519,395
 
 
—
 
2003(A)
 
SHOPPES AT MIDWAY PLANTATION
 
 
—
 
 
13,628,689
 
 
8,174,248
 
2005(C)
 
RALEIGH
 
 
6,627,330
 
 
26,869,808
 
 
—
 
1993(A)
 
WAKEFIELD COMMONS II
 
 
—
 
 
15,351,791
 
 
12,751,413
 
2001(C)
 
WAKEFIELD CROSSINGS
 
 
—
 
 
1,152,475
 
 
—
 
2001(C)
 
EDGEWATER PLACE
 
 
—
 
 
11,276,083
 
 
8,864,033
 
2003(C)
 
WAKEFIELD COMMONS
 
 
609,065
 
 
5,696,550
 
 
—
 
2001(C)
 
WINSTON-SALEM
 
 
2,203,662
 
 
4,121,180
 
 
—
 
1969(C)
 
SORENSON PARK PLAZA
 
 
—
 
 
15,963,150
 
 
—
 
2005(C)
 
NEW LONDON CENTER
 
 
14,118
 
 
15,321,055
 
 
—
 
2005(A)
 
 
114
 
 
 
INITIAL COST
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPERTIES
 
LAND
 
BUILDING
AND
IMPROVEMENT
 
SUBSEQUENT
TO ACQUISITION
 
LAND
 
BUILDINGS AND
IMPROVEMENTS
 
TOTAL
 
 
 
 
 
 
 
 
ROCKINGHAM
 
2,660,915
 
10,643,660
 
10,048,902
 
 
2,660,915
 
 
20,692,562
 
 
23,353,477
 
BRIDGEWATER NJ
 
1,982,481
 
(3,666,959
)
3,443,995
 
 
1,982,481
 
 
5,200,423
 
 
7,182,904
 
BAYONNE BROADWAY
 
1,434,737
 
3,347,719
 
—
 
 
1,434,737
 
 
6,149,103
 
 
7,583,839
 
BRICKTOWN PLAZA
 
344,884
 
1,008,941
 
—
 
 
344,884
 
 
1,008,941
 
 
1,353,826
 
BRIDGEWATER PLAZA
 
350,705
 
1,361,524
 
—
 
 
350,705
 
 
1,361,524
 
 
1,712,229
 
CHERRY HILL
 
2,417,583
 
6,364,094
 
1,232,642
 
 
2,417,583
 
 
7,596,736
 
 
10,014,319
 
MARLTON PIKE
 
—
 
4,318,534
 
—
 
 
—
 
 
4,318,534
 
 
4,318,534
 
CINNAMINSON
 
652,123
 
2,608,491
 
2,605,115
 
 
652,123
 
 
5,213,606
 
 
5,865,729
 
DEBTFORD PLAZA
 
221,316
 
962,891
 
—
 
 
221,316
 
 
962,891
 
 
1,184,208
 
FRANKLIN TOWNE CENTER
 
4,903,113
 
19,608,193
 
147,262
 
 
4,903,113
 
 
19,755,455
 
 
24,658,568
 
HILLSBOROUGH
 
11,886,809
 
—
 
(6,880,755
)
 
5,006,054
 
 
—
 
 
5,006,054
 
HOLMDEL TOWNE CENTER
 
10,824,624
 
43,301,494
 
581,568
 
 
10,824,624
 
 
43,883,063
 
 
54,707,686
 
HOLMDEL COMMONS
 
16,537,556
 
38,759,952
 
79,200
 
 
16,537,556
 
 
42,261,097
 
 
58,798,653
 
HAZLET PLAZA
 
389,722
 
1,545,241
 
—
 
 
389,722
 
 
1,545,241
 
 
1,934,963
 
HOWELL PLAZA
 
311,384
 
1,143,159
 
—
 
 
311,384
 
 
1,143,159
 
 
1,454,543
 
KENVILLE PLAZA
 
385,907
 
1,209,864
 
—
 
 
385,907
 
 
1,209,864
 
 
1,595,771
 
STRAUSS DISCOUNT AUTO
 
1,225,294
 
91,203
 
1,528,655
 
 
1,228,794
 
 
1,616,358
 
 
2,845,153
 
NORTH BRUNSWICK
 
3,204,978
 
12,819,912
 
13,497,340
 
 
3,204,978
 
 
26,317,252
 
 
29,522,230
 
PISCATAWAY TOWN CENTER
 
3,851,839
 
15,410,851
 
151,418
 
 
3,851,839
 
 
15,562,269
 
 
19,414,108
 
RIDGEWOOD
 
450,000
 
2,106,566
 
991,591
 
 
450,000
 
 
3,098,157
 
 
3,548,157
 
SEA GIRT PLAZA
 
457,039
 
1,308,010
 
—
 
 
457,039
 
 
1,308,010
 
 
1,765,048
 
WESTMONT
 
601,655
 
2,404,604
 
9,705,226
 
 
601,655
 
 
12,109,830
 
 
12,711,485
 
WEST LONG BRANCH PLAZA
 
64,976
 
1,700,782
 
—
 
 
64,976
 
 
1,700,782
 
 
1,765,758
 
SYCAMORE PLAZA
 
1,404,443
 
5,613,270
 
226,931
 
 
1,404,443
 
 
5,840,201
 
 
7,244,644
 
PLAZA PASEO DEL-NORTE
 
4,653,197
 
18,633,584
 
373,675
 
 
4,653,197
 
 
19,007,259
 
 
23,660,456
 
JUAN TABO, ALBUQUERQUE
 
1,141,200
 
4,566,817
 
293,273
 
 
1,141,200
 
 
4,860,090
 
 
6,001,290
 
BRIDGEHAMPTON
 
1,811,752
 
3,107,232
 
22,864,662
 
 
1,811,752
 
 
25,971,894
 
 
27,783,646
 
TWO GUYS AUTO GLASS
 
105,497
 
436,714
 
—
 
 
105,497
 
 
436,714
 
 
542,211
 
GENOVESE DRUG STORE
 
564,097
 
2,268,768
 
—
 
 
564,097
 
 
2,268,768
 
 
2,832,865
 
KINGS HIGHWAY
 
2,743,819
 
6,811,268
 
12,500
 
 
2,743,819
 
 
7,602,247
 
 
10,346,066
 
HOMEPORT-RALPH AVENUE
 
4,414,464
 
11,339,857
 
12,500
 
 
4,414,464
 
 
14,399,961
 
 
18,814,426
 
BAYRIDGE
 
2,569,765
 
6,251,197
 
—
 
 
2,569,765
 
 
12,411,320
 
 
14,981,084
 
BELLMORE
 
1,272,265
 
3,183,547
 
—
 
 
1,272,265
 
 
3,565,350
 
 
4,837,615
 
STRAUSS CASTLE HILL PLAZA
 
310,864
 
725,350
 
—
 
 
310,864
 
 
1,049,460
 
 
1,360,324
 
STRAUSS UTICA AVENUE
 
347,633
 
811,144
 
—
 
 
347,633
 
 
1,173,362
 
 
1,520,995
 
KING KULLEN PLAZA
 
5,968,082
 
23,243,404
 
859,034
 
 
5,968,082
 
 
24,102,438
 
 
30,070,520
 
KDI-CENTRAL ISLIP TOWN CENTER
 
13,733,950
 
1,266,050
 
(9,911,148
)
 
5,088,852
 
 
0
 
 
5,088,852
 
ELMONT
 
3,011,653
 
7,606,066
 
12,500
 
 
3,011,653
 
 
9,791,389
 
 
12,803,042
 
ELMONT PLAZA
 
—
 
230,118
 
—
 
 
—
 
 
230,118
 
 
230,118
 
FRANKLIN SQUARE
 
1,078,535
 
2,516,581
 
—
 
 
1,078,535
 
 
5,148,300
 
 
6,226,835
 
HAMPTON BAYS
 
1,495,105
 
5,979,320
 
170,771
 
 
1,495,105
 
 
6,150,091
 
 
7,645,196
 
HENRIETTA
 
1,075,358
 
6,635,486
 
1,678,189
 
 
1,075,358
 
 
8,313,675
 
 
9,389,033
 
HICKSVILLE
 
3,542,732
 
8,266,375
 
—
 
 
3,542,732
 
 
9,346,754
 
 
12,889,486
 
STRAUSS LIBERTY AVENUE
 
305,969
 
713,927
 
—
 
 
305,969
 
 
1,033,638
 
 
1,339,607
 
DOUGLASTON SHOPPING CENTER
 
3,033,190
 
12,179,993
 
15,400
 
 
3,033,190
 
 
12,195,393
 
 
15,228,583
 
ROSLYN SAVINGS BANK
 
244,064
 
981,225
 
—
 
 
244,064
 
 
981,225
 
 
1,225,289
 
STRAUSS MERRICK BLVD
 
450,582
 
1,051,359
 
—
 
 
450,582
 
 
1,522,179
 
 
1,972,761
 
MANHASSET VENTURE LLC
 
4,567,003
 
19,165,808
 
25,498,942
 
 
4,421,939
 
 
44,809,814
 
 
49,231,753
 
MASPETH QUEENS-DUANE READE
 
1,872,005
 
4,827,940
 
—
 
 
1,872,005
 
 
5,759,126
 
 
7,631,131
 
MASSAPEQUA
 
1,880,807
 
4,388,549
 
—
 
 
1,880,807
 
 
5,330,010
 
 
7,210,817
 
STRAUSS EAST 14TH STREET
 
1,455,653
 
3,396,523
 
—
 
 
1,455,653
 
 
4,906,143
 
 
6,361,796
 
367-369 BLEEKER STREET
 
1,425,000
 
4,958,097
 
193,913
 
 
1,425,000
 
 
5,152,009
 
 
6,577,009
 
 92 PERRY STREET
 
2,106,250
 
6,318,750
 
445,451
 
 
2,106,250
 
 
6,764,201
 
 
8,870,451
 
 37 GREENWICH STREET
 
800,000
 
2,400,000
 
368,123
 
 
800,000
 
 
2,768,123
 
 
3,568,123
 
 82 CHRISTOPHER STREET
 
972,813
 
2,974,676
 
—
 
 
972,813
 
 
2,974,676
 
 
3,947,488
 
 71 SECOND STREET
 
881,250
 
2,690,981
 
—
 
 
881,250
 
 
2,690,981
 
 
3,572,231
 
AMERICAN MUFFLER SHOP
 
76,056
 
325,567
 
—
 
 
76,056
 
 
325,567
 
 
401,624
 
PLAINVIEW
 
263,693
 
584,031
 
9,689,515
 
 
263,693
 
 
10,273,546
 
 
10,537,239
 
POUGHKEEPSIE
 
876,548
 
4,695,659
 
12,592,263
 
 
876,548
 
 
17,287,922
 
 
18,164,470
 
STRAUSS JAMAICA AVENUE
 
1,109,714
 
2,589,333
 
—
 
 
1,109,714
 
 
2,669,636
 
 
3,779,350
 
SYOSSET, NY
 
106,655
 
76,197
 
1,553,113
 
 
106,655
 
 
1,522,705
 
 
1,692,360
 
STATEN ISLAND
 
2,280,000
 
9,027,951
 
5,075,207
 
 
2,280,000
 
 
14,103,158
 
 
16,383,158
 
STATEN ISLAND
 
2,940,000
 
11,811,964
 
918,416
 
 
3,148,424
 
 
12,521,956
 
 
15,670,380
 
 
PROPERTIES
 
ACCUMULATED
DEPRECIATION
 
TOTAL COST,
NET OF ACCUMULATED
DEPRECIATION
 
ENCUMBRANCES
 
DATE OF
CONSTRUCTION(C)
ACQUISITION(A)
 
 
 
 
 
 
ROCKINGHAM
 
 
5,035,451
 
 
18,318,026
 
 
—
 
1994(A)
 
BRIDGEWATER NJ
 
 
1,814,848
 
 
5,368,057
 
 
—
 
1998(C)
 
BAYONNE BROADWAY
 
 
209,146
 
 
7,374,693
 
 
—
 
2004(A)
 
BRICKTOWN PLAZA
 
 
29,050
 
 
1,324,775
 
 
—
 
2005(A)
 
BRIDGEWATER PLAZA
 
 
36,161
 
 
1,676,068
 
 
1,526,331
 
2005(A)
 
CHERRY HILL
 
 
4,394,315
 
 
5,620,004
 
 
—
 
1985(C)
 
MARLTON PIKE
 
 
1,033,496
 
 
3,285,038
 
 
—
 
1996(A)
 
CINNAMINSON
 
 
873,020
 
 
4,992,709
 
 
—
 
1996(A)
 
DEBTFORD PLAZA
 
 
20,590
 
 
1,163,618
 
 
1,429,057
 
2005(A)
 
FRANKLIN TOWNE CENTER
 
 
3,819,299
 
 
20,839,269
 
 
—
 
1998(A)
 
HILLSBOROUGH
 
 
—
 
 
5,006,054
 
 
—
 
2001(C)
 
HOLMDEL TOWNE CENTER
 
 
3,369,638
 
 
51,338,048
 
 
—
 
2002(A)
 
HOLMDEL COMMONS
 
 
2,632,834
 
 
56,165,820
 
 
—
 
2004(A)
 
HAZLET PLAZA
 
 
34,647
 
 
1,900,316
 
 
—
 
2005(A)
 
HOWELL PLAZA
 
 
32,321
 
 
1,422,222
 
 
—
 
2005(A)
 
KENVILLE PLAZA
 
 
37,170
 
 
1,558,602
 
 
—
 
2005(A)
 
STRAUSS DISCOUNT AUTO
 
 
93,737
 
 
2,751,415
 
 
—
 
2002(A)
 
NORTH BRUNSWICK
 
 
6,374,243
 
 
23,147,987
 
 
—
 
1994(A)
 
PISCATAWAY TOWN CENTER
 
 
3,009,874
 
 
16,404,234
 
 
—
 
1998(A)
 
RIDGEWOOD
 
 
741,447
 
 
2,806,710
 
 
—
 
1993(A)
 
SEA GIRT PLAZA
 
 
26,019
 
 
1,739,029
 
 
—
 
2005(A)
 
WESTMONT
 
 
2,591,445
 
 
10,120,040
 
 
—
 
1994(A)
 
WEST LONG BRANCH PLAZA
 
 
9,021
 
 
1,756,736
 
 
—
 
2005(A)
 
SYCAMORE PLAZA
 
 
1,234,602
 
 
6,010,042
 
 
—
 
1998(A)
 
PLAZA PASEO DEL-NORTE
 
 
3,675,256
 
 
19,985,200
 
 
—
 
1998(A)
 
JUAN TABO, ALBUQUERQUE
 
 
904,512
 
 
5,096,778
 
 
—
 
1998(A)
 
BRIDGEHAMPTON
 
 
9,989,661
 
 
17,793,985
 
 
—
 
1972(C)
 
TWO GUYS AUTO GLASS
 
 
30,742
 
 
511,469
 
 
—
 
2003(A)
 
GENOVESE DRUG STORE
 
 
160,145
 
 
2,672,720
 
 
—
 
2003(A)
 
KINGS HIGHWAY
 
 
349,714
 
 
9,996,352
 
 
3,188,450
 
2004(A)
 
HOMEPORT-RALPH AVENUE
 
 
497,214
 
 
18,317,212
 
 
6,731,406
 
2004(A)
 
BAYRIDGE
 
 
403,224
 
 
14,577,860
 
 
4,173,678
 
2004(A)
 
BELLMORE
 
 
146,195
 
 
4,691,420
 
 
1,112,531
 
2004(A)
 
STRAUSS CASTLE HILL PLAZA
 
 
1,904
 
 
1,358,420
 
 
—
 
2005(A)
 
STRAUSS UTICA AVENUE
 
 
2,130
 
 
1,518,866
 
 
—
 
2005(A)
 
KING KULLEN PLAZA
 
 
5,159,586
 
 
24,910,934
 
 
—
 
1998(A)
 
KDI-CENTRAL ISLIP TOWN CENTER
 
 
—
 
 
5,088,852
 
 
9,380,000
 
2004(C)
 
ELMONT
 
 
387,372
 
 
12,415,670
 
 
3,849,664
 
2004(A)
 
ELMONT PLAZA
 
 
—
 
 
230,118
 
 
—
 
2005(A)
 
FRANKLIN SQUARE
 
 
172,687
 
 
6,054,148
 
 
—
 
2004(A)
 
HAMPTON BAYS
 
 
3,100,319
 
 
4,544,877
 
 
—
 
1989(A)
 
HENRIETTA
 
 
2,660,126
 
 
6,728,906
 
 
—
 
1993(A)
 
HICKSVILLE
 
 
375,508
 
 
12,513,978
 
 
—
 
2004(A)
 
STRAUSS LIBERTY AVENUE
 
 
1,131
 
 
1,338,476
 
 
—
 
2005(A)
 
DOUGLASTON SHOPPING CENTER
 
 
860,074
 
 
14,368,509
 
 
—
 
2003(A)
 
ROSLYN SAVINGS BANK
 
 
69,269
 
 
1,156,020
 
 
—
 
2003(A)
 
STRAUSS MERRICK BLVD
 
 
2,762
 
 
1,969,999
 
 
—
 
2005(A)
 
MANHASSET VENTURE LLC
 
 
5,201,520
 
 
44,030,233
 
 
—
 
1999(A)
 
MASPETH QUEENS-DUANE READE
 
 
215,398
 
 
7,415,733
 
 
3,058,637
 
2004(A)
 
MASSAPEQUA
 
 
233,848
 
 
6,976,969
 
 
—
 
2004(A)
 
STRAUSS EAST 14TH STREET
 
 
5,369
 
 
6,356,427
 
 
—
 
2005(A)
 
367-369 BLEEKER STREET
 
 
216,969
 
 
6,360,041
 
 
4,394,837
 
2004(A)
 
 92 PERRY STREET
 
 
145,969
 
 
8,724,482
 
 
6,850,000
 
2005(A)
 
 37 GREENWICH STREET
 
 
52,639
 
 
3,515,483
 
 
2,235,000
 
2005(A)
 
 82 CHRISTOPHER STREET
 
 
5,643
 
 
3,941,845
 
 
3,120,000
 
2005(A)
 
 71 SECOND STREET
 
 
4,815
 
 
3,567,416
 
 
—
 
2005(A)
 
AMERICAN MUFFLER SHOP
 
 
22,850
 
 
378,774
 
 
—
 
2003(A)
 
PLAINVIEW
 
 
3,629,801
 
 
6,907,438
 
 
—
 
1969(C)
 
POUGHKEEPSIE
 
 
6,259,532
 
 
11,904,938
 
 
—
 
1972(C)
 
STRAUSS JAMAICA AVENUE
 
 
3,712
 
 
3,775,638
 
 
—
 
2005(A)
 
SYOSSET, NY
 
 
699,797
 
 
929,563
 
 
—
 
1990(C)
 
STATEN ISLAND
 
 
6,111,941
 
 
10,271,218
 
 
—
 
1989(A)
 
STATEN ISLAND
 
 
2,533,940
 
 
13,136,440
 
 
1,770,046
 
1997(A)
 
 
115
 
 
 
INITIAL COST
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPERTIES
 
LAND
 
BUILDING
AND
IMPROVEMENT
 
SUBSEQUENT
TO ACQUISITION
 
LAND
 
BUILDINGS AND
IMPROVEMENTS
 
TOTAL
 
 
 
 
 
 
 
 
STATEN ISLAND PLAZA
 
5,600,744
 
6,788,460
 
—
 
 
5,600,744
 
 
6,788,460
 
 
12,389,203
 
STOP N SHOP STATEN ISLAND
 
4,558,592
 
10,441,408
 
—
 
 
4,558,592
 
 
10,597,256
 
 
15,155,848
 
WEST GATES
 
1,784,718
 
9,721,970
 
(2,043,308
)
 
1,784,718
 
 
7,678,662
 
 
9,463,380
 
WHITE PLAINS
 
1,777,765
 
4,453,894
 
92,200
 
 
1,777,765
 
 
6,461,999
 
 
8,239,764
 
YONKERS
 
871,977
 
3,487,909
 
—
 
 
871,977
 
 
3,487,909
 
 
4,359,886
 
STRAUSS ROMAINE AVENUE
 
782,459
 
1,825,737
 
—
 
 
782,459
 
 
2,643,339
 
 
3,425,798
 
AKRON WATERLOO
 
437,277
 
1,912,222
 
4,113,885
 
 
437,277
 
 
6,026,107
 
 
6,463,384
 
WEST MARKET ST.
 
560,255
 
3,909,430
 
210,155
 
 
560,255
 
 
4,119,585
 
 
4,679,840
 
BARBERTON
 
505,590
 
1,948,135
 
2,462,819
 
 
505,590
 
 
4,410,954
 
 
4,916,544
 
BRUNSWICK
 
771,765
 
6,058,560
 
727,444
 
 
771,765
 
 
6,786,004
 
 
7,557,769
 
BEAVERCREEK
 
635,228
 
3,024,722
 
2,800,398
 
 
635,228
 
 
5,825,120
 
 
6,460,348
 
CANTON
 
792,985
 
1,459,031
 
4,532,876
 
 
792,985
 
 
5,991,907
 
 
6,784,892
 
CAMBRIDGE
 
—
 
1,848,195
 
899,735
 
 
473,060
 
 
2,274,870
 
 
2,747,930
 
MORSE RD.
 
835,386
 
2,097,600
 
2,755,845
 
 
835,386
 
 
4,853,445
 
 
5,688,831
 
HAMILTON RD.
 
856,178
 
2,195,520
 
3,842,586
 
 
856,178
 
 
6,038,106
 
 
6,894,284
 
OLENTANGY RIVER RD.
 
764,517
 
1,833,600
 
2,311,258
 
 
764,517
 
 
4,144,858
 
 
4,909,375
 
W. BROAD ST.
 
982,464
 
3,929,856
 
3,177,920
 
 
969,804
 
 
7,120,436
 
 
8,090,240
 
RIDGE ROAD
 
1,285,213
 
4,712,358
 
10,593,229
 
 
1,285,213
 
 
15,305,587
 
 
16,590,800
 
GLENWAY AVE
 
530,243
 
3,788,189
 
527,010
 
 
530,243
 
 
4,315,198
 
 
4,845,441
 
SPRINGDALE
 
3,205,653
 
14,619,732
 
5,259,376
 
 
3,205,653
 
 
19,879,108
 
 
23,084,761
 
SOUTH HIGH ST.
 
602,421
 
2,737,004
 
76,671
 
 
602,421
 
 
2,813,674
 
 
3,416,096
 
GLENWAY CROSSING
 
699,359
 
3,112,047
 
1,232,339
 
 
699,359
 
 
4,344,386
 
 
5,043,745
 
HIGHLAND RIDGE PLAZA
 
1,540,000
 
6,178,398
 
141,991
 
 
1,540,000
 
 
6,320,389
 
 
7,860,389
 
HIGHLAND PLAZA
 
702,074
 
667,463
 
—
 
 
702,074
 
 
667,463
 
 
1,369,537
 
MONTGOMERY PLAZA
 
530,893
 
1,302,656
 
—
 
 
530,893
 
 
1,302,656
 
 
1,833,549
 
COLUMBUS PLAZA
 
168,223
 
176,179
 
—
 
 
168,223
 
 
176,179
 
 
344,402
 
SHILOH SPRING RD.
 
—
 
1,735,836
 
2,115,145
 
 
—
 
 
3,850,981
 
 
3,850,981
 
OAKCREEK
 
1,245,870
 
4,339,637
 
4,065,115
 
 
1,245,870
 
 
8,404,752
 
 
9,650,622
 
SALEM AVE.
 
665,314
 
347,818
 
5,427,664
 
 
665,314
 
 
5,775,482
 
 
6,440,796
 
KETTERING
 
1,190,496
 
4,761,984
 
671,539
 
 
1,190,496
 
 
5,433,523
 
 
6,624,019
 
KENT, OH
 
6,254
 
3,028,914
 
—
 
 
6,254
 
 
3,028,914
 
 
3,035,168
 
KENT
 
2,261,530
 
—
 
—
 
 
2,261,530
 
 
—
 
 
2,261,530
 
MENTOR
 
503,981
 
2,455,926
 
2,086,340
 
 
503,981
 
 
4,542,266
 
 
5,046,247
 
MIDDLEBURG HEIGHTS
 
639,542
 
3,783,096
 
1,782,440
 
 
639,542
 
 
5,565,536
 
 
6,205,078
 
MENTOR ERIE COMMONS.
 
2,234,474
 
9,648,000
 
5,165,948
 
 
2,234,474
 
 
14,813,948
 
 
17,048,422
 
MALLWOODS CENTER
 
294,232
 
—
 
(496,786
)
 
294,232
 
 
1,184,543
 
 
1,478,775
 
NORTH OLMSTED
 
626,818
 
3,712,045
 
35,000
 
 
626,818
 
 
3,747,045
 
 
4,373,862
 
ORANGE OHIO
 
3,783,875
 
—
 
(1,239,648
)
 
2,221,704
 
 
322,524
 
 
2,544,228
 
SPRINGBORO PIKE
 
1,854,527
 
2,572,518
 
2,744,318
 
 
1,854,527
 
 
5,316,836
 
 
7,171,363
 
SPRINGFIELD
 
842,976
 
3,371,904
 
1,549,071
 
 
842,976
 
 
4,920,975
 
 
5,763,951
 
UPPER ARLINGTON
 
504,256
 
2,198,476
 
8,760,593
 
 
1,255,544
 
 
10,207,781
 
 
11,463,325
 
WICKLIFFE
 
610,991
 
2,471,965
 
1,405,293
 
 
610,991
 
 
3,877,258
 
 
4,488,249
 
CHARDON ROAD
 
481,167
 
5,947,751
 
2,075,598
 
 
481,167
 
 
8,023,348
 
 
8,504,516
 
WESTERVILLE
 
1,050,431
 
4,201,616
 
7,674,134
 
 
1,050,431
 
 
11,875,750
 
 
12,926,181
 
EDMOND
 
477,036
 
3,591,493
 
8,900
 
 
477,036
 
 
3,600,393
 
 
4,077,429
 
CENTENNIAL PLAZA
 
4,650,634
 
18,604,307
 
1,170,555
 
 
4,650,634
 
 
19,774,862
 
 
24,425,496
 
TULSA
 
20,038
 
80,101
 
11,500
 
 
20,038
 
 
91,601
 
 
111,639
 
ALLEGHENY
 
—
 
30,061,177
 
59,094
 
 
—
 
 
30,120,271
 
 
30,120,271
 
CHIPPEWA
 
2,881,525
 
11,526,101
 
133,289
 
 
2,881,525
 
 
11,659,390
 
 
14,540,916
 
BROOKHAVEN PLAZA
 
254,694
 
973,318
 
—
 
 
254,694
 
 
973,318
 
 
1,228,013
 
CARNEGIE
 
—
 
3,298,908
 
17,747
 
 
—
 
 
3,316,655
 
 
3,316,655
 
CENTER SQUARE
 
731,888
 
2,927,551
 
1,105,299
 
 
731,888
 
 
4,032,850
 
 
4,764,738
 
WEST MIFFLIN
 
475,815
 
1,903,231
 
724,416
 
 
475,815
 
 
2,627,647
 
 
3,103,462
 
EAST STROUDSBURG
 
1,050,000
 
2,372,628
 
1,110,654
 
 
1,050,000
 
 
3,483,282
 
 
4,533,282
 
EXTON
 
176,666
 
4,895,360
 
—
 
 
176,666
 
 
4,895,360
 
 
5,072,026
 
EXTON
 
731,888
 
2,927,551
 
—
 
 
731,888
 
 
2,927,551
 
 
3,659,439
 
EASTWICK
 
889,001
 
2,762,888
 
3,074,728
 
 
889,001
 
 
6,228,275
 
 
7,117,276
 
EXTON PLAZA
 
294,378
 
1,404,778
 
—
 
 
294,378
 
 
1,404,778
 
 
1,699,156
 
FEASTERVILLE
 
520,521
 
2,082,083
 
38,692
 
 
520,521
 
 
2,120,775
 
 
2,641,296
 
GETTYSBURG
 
74,626
 
671,630
 
101,519
 
 
74,626
 
 
773,149
 
 
847,775
 
HARRISBURG, PA
 
452,888
 
6,665,238
 
1,846,339
 
 
452,888
 
 
8,511,576
 
 
8,964,464
 
SIMPSON FERRY
 
658,346
 
6,908,711
 
341,972
 
 
658,346
 
 
7,250,683
 
 
7,909,029
 
HAMBURG
 
439,232
 
—
 
2,023,428
 
 
494,982
 
 
1,967,677
 
 
2,462,660
 
 
PROPERTIES
 
ACCUMULATED
DEPRECIATION
 
TOTAL COST,
NET OF ACCUMULATED
DEPRECIATION
 
ENCUMBRANCES
 
DATE OF
CONSTRUCTION(C)
ACQUISITION(A)
 
 
 
 
 
 
STATEN ISLAND PLAZA
 
 
63,076
 
 
12,326,127
 
 
1,531,880
 
2005(A)
 
STOP N SHOP STATEN ISLAND
 
 
22,661
 
 
15,133,187
 
 
—
 
2005(A)
 
WEST GATES
 
 
2,940,627
 
 
6,522,753
 
 
—
 
1993(A)
 
WHITE PLAINS
 
 
302,907
 
 
7,936,857
 
 
3,801,487
 
2004(A)
 
YONKERS
 
 
936,194
 
 
3,423,692
 
 
—
 
1998(A)
 
STRAUSS ROMAINE AVENUE
 
 
4,798
 
 
3,421,000
 
 
—
 
2005(A)
 
AKRON WATERLOO
 
 
2,319,373
 
 
4,144,011
 
 
—
 
1975(C)
 
WEST MARKET ST.
 
 
2,158,383
 
 
2,521,457
 
 
—
 
1999(A)
 
BARBERTON
 
 
2,166,905
 
 
2,749,639
 
 
—
 
1972(C)
 
BRUNSWICK
 
 
5,659,642
 
 
1,898,127
 
 
—
 
1975(C)
 
BEAVERCREEK
 
 
4,053,771
 
 
2,406,577
 
 
—
 
1986(A)
 
CANTON
 
 
3,524,501
 
 
3,260,391
 
 
—
 
1972(C)
 
CAMBRIDGE
 
 
1,874,437
 
 
873,492
 
 
—
 
1973(C)
 
MORSE RD.
 
 
2,374,861
 
 
3,313,970
 
 
—
 
1988(A)
 
HAMILTON RD.
 
 
2,786,221
 
 
4,108,064
 
 
—
 
1988(A)
 
OLENTANGY RIVER RD.
 
 
2,452,100
 
 
2,457,275
 
 
—
 
1988(A)
 
W. BROAD ST.
 
 
3,242,070
 
 
4,848,170
 
 
—
 
1988(A)
 
RIDGE ROAD
 
 
3,188,396
 
 
13,402,405
 
 
—
 
1992(A)
 
GLENWAY AVE
 
 
2,268,337
 
 
2,577,104
 
 
—
 
1999(A)
 
SPRINGDALE
 
 
7,826,708
 
 
15,258,053
 
 
—
 
1992(A)
 
SOUTH HIGH ST.
 
 
1,674,917
 
 
1,741,178
 
 
—
 
1999(A)
 
GLENWAY CROSSING
 
 
495,136
 
 
4,548,609
 
 
—
 
2000(A)
 
HIGHLAND RIDGE PLAZA
 
 
981,912
 
 
6,878,477
 
 
—
 
1999(A)
 
HIGHLAND PLAZA
 
 
16,045
 
 
1,353,492
 
 
—
 
2005(A)
 
MONTGOMERY PLAZA
 
 
37,625
 
 
1,795,924
 
 
—
 
2005(A)
 
COLUMBUS PLAZA
 
 
8,959
 
 
335,443
 
 
—
 
2005(A)
 
SHILOH SPRING RD.
 
 
2,471,209
 
 
1,379,772
 
 
—
 
1969(C)
 
OAKCREEK
 
 
4,579,736
 
 
5,070,885
 
 
—
 
1984(A)
 
SALEM AVE.
 
 
2,550,077
 
 
3,890,719
 
 
—
 
1988(A)
 
KETTERING
 
 
2,788,292
 
 
3,835,727
 
 
—
 
1988(A)
 
KENT, OH
 
 
1,284,897
 
 
1,750,271
 
 
—
 
1999(A)
 
KENT
 
 
—
 
 
2,261,530
 
 
—
 
1995(A)
 
MENTOR
 
 
1,896,222
 
 
3,150,025
 
 
—
 
1987(A)
 
MIDDLEBURG HEIGHTS
 
 
2,111,276
 
 
4,093,802
 
 
—
 
1999(A)
 
MENTOR ERIE COMMONS.
 
 
5,739,639
 
 
11,308,783
 
 
—
 
1988(A)
 
MALLWOODS CENTER
 
 
96,315
 
 
1,382,460
 
 
—
 
1999(C)
 
NORTH OLMSTED
 
 
1,825,834
 
 
2,548,029
 
 
—
 
1999(A)
 
ORANGE OHIO
 
 
—
 
 
2,544,228
 
 
—
 
2001(C)
 
SPRINGBORO PIKE
 
 
3,458,823
 
 
3,712,540
 
 
—
 
1985(C)
 
SPRINGFIELD
 
 
2,071,982
 
 
3,691,969
 
 
—
 
1988(A)
 
UPPER ARLINGTON
 
 
5,706,318
 
 
5,757,007
 
 
—
 
1969(C)
 
WICKLIFFE
 
 
966,368
 
 
3,521,881
 
 
—
 
1995(A)
 
CHARDON ROAD
 
 
2,460,391
 
 
6,044,125
 
 
—
 
1999(A)
 
WESTERVILLE
 
 
4,104,499
 
 
8,821,682
 
 
—
 
1988(A)
 
EDMOND
 
 
726,906
 
 
3,350,523
 
 
—
 
1997(A)
 
CENTENNIAL PLAZA
 
 
3,864,216
 
 
20,561,280
 
 
—
 
1998(A)
 
TULSA
 
 
29,191
 
 
82,448
 
 
—
 
1996(A)
 
ALLEGHENY
 
 
911,535
 
 
29,208,736
 
 
—
 
2004(A)
 
CHIPPEWA
 
 
1,771,611
 
 
12,769,304
 
 
10,687,114
 
2000(A)
 
BROOKHAVEN PLAZA
 
 
20,978
 
 
1,207,034
 
 
936,491
 
2005(A)
 
CARNEGIE
 
 
510,255
 
 
2,806,400
 
 
—
 
1999(A)
 
CENTER SQUARE
 
 
915,655
 
 
3,849,084
 
 
—
 
1996(A)
 
WEST MIFFLIN
 
 
752,421
 
 
2,351,041
 
 
—
 
1993(A)
 
EAST STROUDSBURG
 
 
2,747,536
 
 
1,785,747
 
 
—
 
1973(C)
 
EXTON
 
 
753,133
 
 
4,318,894
 
 
—
 
1999(A)
 
EXTON
 
 
700,611
 
 
2,958,828
 
 
—
 
1996(A)
 
EASTWICK
 
 
1,335,780
 
 
5,781,496
 
 
4,522,807
 
1997(A)
 
EXTON PLAZA
 
 
22,247
 
 
1,676,909
 
 
—
 
2005(A)
 
FEASTERVILLE
 
 
495,217
 
 
2,146,079
 
 
—
 
1996(A)
 
GETTYSBURG
 
 
744,101
 
 
103,674
 
 
—
 
1986(A)
 
HARRISBURG, PA
 
 
4,589,455
 
 
4,375,009
 
 
—
 
2002(A)
 
SIMPSON FERRY
 
 
3,142,079
 
 
4,766,950
 
 
—
 
2000(A)
 
HAMBURG
 
 
189,426
 
 
2,273,234
 
 
2,522,183
 
2000(C)
 
 
116
 
 
 
INITIAL COST
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPERTIES
 
LAND
 
BUILDING
AND
IMPROVEMENT
 
SUBSEQUENT
TO ACQUISITION
 
LAND
 
BUILDINGS AND
IMPROVEMENTS
 
TOTAL
 
 
 
 
 
 
 
 
HAVERTOWN
 
731,888
 
2,927,551
 
—
 
 
731,888
 
 
2,927,551
 
 
3,659,439
 
MIDDLETOWN
 
207,283
 
1,174,603
 
447,331
 
 
207,283
 
 
1,621,934
 
 
1,829,217
 
NORRISTOWN
 
686,134
 
2,664,535
 
3,396,794
 
 
774,084
 
 
5,973,379
 
 
6,747,463
 
NEW KENSINGTON
 
521,945
 
2,548,322
 
676,040
 
 
521,945
 
 
3,224,362
 
 
3,746,307
 
PHILADELPHIA
 
731,888
 
2,927,551
 
—
 
 
731,888
 
 
2,927,551
 
 
3,659,439
 
GALLERY, PHILADELPHIA PA
 
—
 
—
 
258,931
 
 
—
 
 
258,931
 
 
258,931
 
PHILADELPHIA PLAZA
 
209,197
 
1,373,843
 
—
 
 
209,197
 
 
1,373,843
 
 
1,583,040
 
STRAUSS WASHINGTON AVENUE
 
424,659
 
990,872
 
—
 
 
424,659
 
 
1,053,428
 
 
1,478,087
 
RICHBORO
 
788,761
 
3,155,044
 
11,768,724
 
 
976,439
 
 
14,736,090
 
 
15,712,529
 
SPRINGFIELD
 
919,998
 
4,981,589
 
1,736,014
 
 
919,998
 
 
6,717,603
 
 
7,637,601
 
COUNTY LINE PLAZA
 
—
 
—
 
—
 
 
—
 
 
1,917,758
 
 
1,917,758
 
UPPER DARBY
 
231,821
 
927,286
 
4,838,447
 
 
231,821
 
 
5,694,483
 
 
5,926,304
 
WEST MIFFLIN
 
1,468,341
 
—
 
—
 
 
1,468,341
 
 
—
 
 
1,468,341
 
WHITEHALL
 
—
 
5,195,577
 
9,231
 
 
—
 
 
5,204,808
 
 
5,204,808
 
E. PROSPECT ST.
 
604,826
 
2,755,314
 
317,917
 
 
604,826
 
 
3,073,231
 
 
3,678,057
 
W. MARKET ST.
 
188,562
 
1,158,307
 
—
 
 
188,562
 
 
1,158,307
 
 
1,346,869
 
MARSHALL PLAZA, CRANSTON RI
 
1,886,600
 
7,575,302
 
812,763
 
 
1,886,600
 
 
8,388,065
 
 
10,274,665
 
CHARLESTON
 
730,164
 
3,132,092
 
4,968,566
 
 
730,164
 
 
8,100,658
 
 
8,830,822
 
CHARLESTON
 
1,744,430
 
6,986,094
 
4,182,126
 
 
1,744,430
 
 
11,168,220
 
 
12,912,650
 
FLORENCE
 
1,465,661
 
6,011,013
 
124,757
 
 
1,465,661
 
 
6,135,770
 
 
7,601,431
 
GREENVILLE
 
2,209,812
 
8,850,864
 
325,455
 
 
2,209,812
 
 
9,176,319
 
 
11,386,131
 
NORTH CHARLESTON
 
744,093
 
2,974,990
 
96,365
 
 
744,093
 
 
3,071,355
 
 
3,815,448
 
N. CHARLESTON
 
2,965,748
 
11,895,294
 
841,551
 
 
2,965,748
 
 
12,736,845
 
 
15,702,593
 
MADISON
 
—
 
4,133,904
 
2,658,808
 
 
—
 
 
6,792,712
 
 
6,792,712
 
HICKORY RIDGE COMMONS
 
596,347
 
2,545,033
 
7,624
 
 
596,347
 
 
2,552,656
 
 
3,149,004
 
TROLLEY STATION
 
3,303,682
 
13,218,740
 
55,985
 
 
3,303,682
 
 
13,274,725
 
 
16,578,407
 
RIVERGATE STATION
 
7,135,070
 
19,091,078
 
427,128
 
 
7,135,070
 
 
21,033,859
 
 
28,168,929
 
MARKET PLACE AT RIVERGATE
 
2,574,635
 
10,339,449
 
723,016
 
 
2,574,635
 
 
11,062,465
 
 
13,637,100
 
RIVERGATE, TN
 
3,038,561
 
12,157,408
 
3,001,828
 
 
3,038,561
 
 
15,159,236
 
 
18,197,797
 
CENTER OF THE HILLS, TX
 
2,923,585
 
11,706,145
 
406,661
 
 
2,923,585
 
 
12,112,806
 
 
15,036,391
 
ARLINGTON
 
3,160,203
 
2,285,377
 
—
 
 
3,160,203
 
 
2,285,377
 
 
5,445,580
 
DOWLEN CENTER
 
2,244,581
 
—
 
16,348,694
 
 
3,344,581
 
 
15,248,694
 
 
18,593,276
 
BURLESON
 
9,974,390
 
810,314
 
1,556,022
 
 
4,345,145
 
 
7,995,582
 
 
12,340,727
 
BAYTOWN
 
500,422
 
2,431,651
 
437,342
 
 
500,422
 
 
2,868,993
 
 
3,369,415
 
SOUTH TOWN PLAZA
 
3,482,124
 
—
 
1,499,680
 
 
438,615
 
 
4,543,188
 
 
4,981,804
 
LAS TIENDAS PLAZA
 
8,678,107
 
—
 
—
 
 
8,678,107
 
 
3,209,885
 
 
11,887,992
 
CORPUS CHRISTI, TX
 
—
 
944,562
 
3,207,999
 
 
—
 
 
4,152,561
 
 
4,152,561
 
DALLAS
 
1,299,632
 
5,168,727
 
4,652,572
 
 
1,299,632
 
 
9,821,299
 
 
11,120,931
 
MONTGOMERY PLAZA
 
6,203,205
 
—
 
43,554,218
 
 
6,203,205
 
 
43,554,218
 
 
49,757,423
 
GARLAND
 
500,414
 
2,001,656
 
98,000
 
 
500,414
 
 
2,099,656
 
 
2,600,070
 
CENTER AT BAYBROOK
 
6,941,017
 
27,727,491
 
2,125,519
 
 
6,941,017
 
 
29,853,010
 
 
36,794,027
 
HARRIS COUNTY
 
1,843,000
 
7,372,420
 
955,382
 
 
2,003,260
 
 
8,167,542
 
 
10,170,802
 
SHARPSTOWN COURT
 
1,560,010
 
6,245,807
 
228,606
 
 
1,560,010
 
 
6,474,412
 
 
8,034,422
 
CYPRESS TOWNE CENTER
 
6,033,932
 
—
 
16,817,463
 
 
4,816,601
 
 
18,034,794
 
 
22,851,395
 
SHOPS AT VISTA RIDGE
 
3,257,199
 
13,029,416
 
75,901
 
 
3,257,199
 
 
13,105,317
 
 
16,362,516
 
VISTA RIDGE PLAZA
 
2,926,495
 
11,716,483
 
1,924,860
 
 
2,926,495
 
 
13,641,343
 
 
16,567,838
 
VISTA RIDGE PHASE II
 
2,276,575
 
9,106,300
 
28,435
 
 
2,276,575
 
 
9,134,735
 
 
11,411,310
 
SOUTH PLAINES PLAZA, TX
 
1,890,000
 
7,577,145
 
131,206
 
 
1,890,000
 
 
7,708,351
 
 
9,598,351
 
LAKE WORTH TOWNE CROSSING
 
8,000,000
 
—
 
17,061,072
 
 
4,808,545
 
 
20,252,526
 
 
25,061,072
 
MESQUITE
 
520,340
 
2,081,356
 
724,043
 
 
520,340
 
 
2,805,399
 
 
3,325,739
 
MESQUITE TOWN CENTER
 
3,757,324
 
15,061,644
 
1,510,446
 
 
3,757,324
 
 
16,572,090
 
 
20,329,414
 
NEW BRAUNSFELS
 
840,000
 
3,360,000
 
—
 
 
840,000
 
 
3,360,000
 
 
4,200,000
 
FORUM AT OLYMPIA PARKWAY-DEV
 
668,781
 
—
 
5,307,205
 
 
318,091
 
 
13,282,166
 
 
13,600,257
 
FORUM AT OLYMPIA PARKWAY
 
800,000
 
10,509,105
 
11,309,105
 
 
800,000
 
 
10,509,105
 
 
11,309,105
 
PARKER PLAZA
 
7,846,946
 
—
 
—
 
 
7,846,946
 
 
—
 
 
7,846,946
 
PLANO
 
500,414
 
2,830,835
 
—
 
 
500,414
 
 
2,830,835
 
 
3,331,249
 
WEST OAKS
 
500,422
 
2,001,687
 
26,291
 
 
500,422
 
 
2,027,978
 
 
2,528,400
 
MARKET STREET AT WOODLANDS
 
10,920,168
 
—
 
86,718,633
 
 
10,920,168
 
 
86,718,633
 
 
97,638,801
 
OGDEN
 
213,818
 
855,275
 
3,642,126
 
 
874,898
 
 
4,497,401
 
 
5,372,299
 
COLONIAL HEIGHTS
 
125,376
 
3,476,073
 
32,420
 
 
125,376
 
 
3,508,493
 
 
3,633,869
 
HARRISONBURG
 
69,885
 
1,938,239
 
—
 
 
69,885
 
 
1,938,239
 
 
2,008,123
 
MANASSAS
 
1,788,750
 
7,162,661
 
275,639
 
 
1,788,750
 
 
7,438,300
 
 
9,227,050
 
RICHMOND
 
82,544
 
2,289,288
 
280,600
 
 
82,544
 
 
2,569,889
 
 
2,652,432
 
 
PROPERTIES
 
ACCUMULATED
DEPRECIATION
 
TOTAL COST,
NET OF ACCUMULATED
DEPRECIATION
 
ENCUMBRANCES
 
DATE OF
CONSTRUCTION(C)
ACQUISITION(A)
 
 
 
 
 
 
HAVERTOWN
 
 
700,611
 
 
2,958,828
 
 
—
 
1996(A)
 
MIDDLETOWN
 
 
1,262,661
 
 
566,556
 
 
—
 
1986(A)
 
NORRISTOWN
 
 
3,527,186
 
 
3,220,277
 
 
—
 
1984(A)
 
NEW KENSINGTON
 
 
2,778,144
 
 
968,163
 
 
—
 
1986(A)
 
PHILADELPHIA
 
 
700,611
 
 
2,958,828
 
 
—
 
1996(A)
 
GALLERY, PHILADELPHIA PA
 
 
8,077
 
 
250,854
 
 
—
 
1996(A)
 
PHILADELPHIA PLAZA
 
 
32,027
 
 
1,551,013
 
 
—
 
2005(A)
 
STRAUSS WASHINGTON AVENUE
 
 
2,935
 
 
1,475,153
 
 
—
 
2005(A)
 
RICHBORO
 
 
6,304,657
 
 
9,407,872
 
 
—
 
1986(A)
 
SPRINGFIELD
 
 
4,443,613
 
 
3,193,988
 
 
—
 
1983(A)
 
COUNTY LINE PLAZA
 
 
—
 
 
1,917,758
 
 
—
 
1995(C)
 
UPPER DARBY
 
 
1,186,784
 
 
4,739,520
 
 
3,553,633
 
1996(A)
 
WEST MIFFLIN
 
 
—
 
 
1,468,341
 
 
—
 
1986(A)
 
WHITEHALL
 
 
1,243,387
 
 
3,961,421
 
 
—
 
1996(A)
 
E. PROSPECT ST.
 
 
2,873,042
 
 
805,015
 
 
—
 
1986(A)
 
W. MARKET ST.
 
 
1,158,307
 
 
188,562
 
 
—
 
1986(A)
 
MARSHALL PLAZA, CRANSTON RI
 
 
1,671,170
 
 
8,603,494
 
 
—
 
1998(A)
 
CHARLESTON
 
 
2,985,259
 
 
5,845,563
 
 
—
 
1978(C)
 
CHARLESTON
 
 
2,513,046
 
 
10,399,604
 
 
—
 
1995(A)
 
FLORENCE
 
 
1,293,999
 
 
6,307,432
 
 
—
 
1997(A)
 
GREENVILLE
 
 
1,840,188
 
 
9,545,943
 
 
—
 
1997(A)
 
NORTH CHARLESTON
 
 
426,213
 
 
3,389,235
 
 
1,893,303
 
2000(A)
 
N. CHARLESTON
 
 
2,420,045
 
 
13,282,548
 
 
—
 
1997(A)
 
MADISON
 
 
4,529,624
 
 
2,263,089
 
 
—
 
1978(C)
 
HICKORY RIDGE COMMONS
 
 
358,029
 
 
2,790,974
 
 
—
 
2000(A)
 
TROLLEY STATION
 
 
2,461,420
 
 
14,116,988
 
 
10,326,649
 
1998(A)
 
RIVERGATE STATION
 
 
1,789,475
 
 
26,379,454
 
 
16,271,491
 
2004(A)
 
MARKET PLACE AT RIVERGATE
 
 
2,059,117
 
 
11,577,984
 
 
—
 
1998(A)
 
RIVERGATE, TN
 
 
2,539,035
 
 
15,658,762
 
 
—
 
1998(A)
 
CENTER OF THE HILLS, TX
 
 
2,281,045
 
 
12,755,347
 
 
—
 
1998(A)
 
ARLINGTON
 
 
477,514
 
 
4,968,066
 
 
—
 
1997(A)
 
DOWLEN CENTER
 
 
—
 
 
18,593,276
 
 
4,784,529
 
2002(C)
 
BURLESON
 
 
—
 
 
12,340,727
 
 
—
 
2000(C)
 
BAYTOWN
 
 
615,601
 
 
2,753,813
 
 
—
 
1996(A)
 
SOUTH TOWN PLAZA
 
 
—
 
 
4,981,804
 
 
3,834,842
 
2003(C)
 
LAS TIENDAS PLAZA
 
 
—
 
 
11,887,992
 
 
—
 
2005(C)
 
CORPUS CHRISTI, TX
 
 
467,576
 
 
3,684,985
 
 
—
 
1997(A)
 
DALLAS
 
 
8,985,331
 
 
2,135,600
 
 
—
 
1969(C)
 
MONTGOMERY PLAZA
 
 
—
 
 
49,757,423
 
 
32,203,702
 
2003(C)
 
GARLAND
 
 
508,966
 
 
2,091,104
 
 
—
 
1996(A)
 
CENTER AT BAYBROOK
 
 
5,367,870
 
 
31,426,157
 
 
—
 
1998(A)
 
HARRIS COUNTY
 
 
1,699,463
 
 
8,471,338
 
 
—
 
1997(A)
 
SHARPSTOWN COURT
 
 
1,125,682
 
 
6,908,740
 
 
5,626,750
 
1999(A)
 
CYPRESS TOWNE CENTER
 
 
—
 
 
22,851,395
 
 
16,133,471
 
2003(C)
 
SHOPS AT VISTA RIDGE
 
 
2,556,053
 
 
13,806,463
 
 
17,355,211
 
1998(A)
 
VISTA RIDGE PLAZA
 
 
2,471,123
 
 
14,096,714
 
 
—
 
1998(A)
 
VISTA RIDGE PHASE II
 
 
1,675,288
 
 
9,736,022
 
 
—
 
1998(A)
 
SOUTH PLAINES PLAZA, TX
 
 
1,519,901
 
 
8,078,450
 
 
4,619,061
 
1998(A)
 
LAKE WORTH TOWNE CROSSING
 
 
—
 
 
25,061,072
 
 
22,794,004
 
2003(C)
 
MESQUITE
 
 
730,778
 
 
2,594,962
 
 
—
 
1995(A)
 
MESQUITE TOWN CENTER
 
 
3,087,612
 
 
17,241,801
 
 
—
 
1998(A)
 
NEW BRAUNSFELS
 
 
215,758
 
 
3,984,242
 
 
—
 
2003(A)
 
FORUM AT OLYMPIA PARKWAY-DEV
 
 
4,648
 
 
13,595,609
 
 
—
 
1999(C)
 
FORUM AT OLYMPIA PARKWAY
 
 
—
 
 
11,309,105
 
 
9,245,910
 
1999(C)
 
PARKER PLAZA
 
 
—
 
 
7,846,946
 
 
—
 
2005(C)
 
PLANO
 
 
665,825
 
 
2,665,424
 
 
—
 
1996(A)
 
WEST OAKS
 
 
510,434
 
 
2,017,967
 
 
—
 
1996(A)
 
MARKET STREET AT WOODLANDS
 
 
—
 
 
97,638,801
 
 
66,025,722
 
2002(C)
 
OGDEN
 
 
1,355,679
 
 
4,016,620
 
 
—
 
1967(C)
 
COLONIAL HEIGHTS
 
 
539,754
 
 
3,094,116
 
 
—
 
1999(A)
 
HARRISONBURG
 
 
298,191
 
 
1,709,933
 
 
—
 
1999(A)
 
MANASSAS
 
 
1,566,562
 
 
7,660,488
 
 
—
 
1997(A)
 
RICHMOND
 
 
230,028
 
 
2,422,404
 
 
—
 
1999(A)
 
 
117
 
 
 
INITIAL COST
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPERTIES
 
LAND
 
BUILDING
AND
IMPROVEMENT
 
SUBSEQUENT
TO ACQUISITION
 
LAND
 
BUILDINGS AND
IMPROVEMENTS
 
TOTAL
 
 
 
 
 
 
 
 
RICHMOND
 
670,500
 
2,751,375
 
—
 
 
670,500
 
 
2,751,375
 
 
3,421,875
 
VALLEY VIEW SHOPPING CENTER
 
3,440,018
 
8,054,004
 
—
 
 
3,440,018
 
 
8,787,875
 
 
12,227,893
 
MANCHESTER SHOPPING CENTER
 
2,722,461
 
6,403,866
 
(3,694
)
 
2,722,461
 
 
6,980,964
 
 
9,703,425
 
HAZEL DELL TOWNE CENTER
 
9,340,819
 
—
 
21,240,296
 
 
9,340,819
 
 
21,240,296
 
 
30,581,115
 
RACINE
 
1,403,082
 
5,612,330
 
2,059,250
 
 
1,403,082
 
 
7,671,580
 
 
9,074,662
 
CHARLES TOWN
 
602,000
 
3,725,871
 
10,528,897
 
 
602,000
 
 
14,254,768
 
 
14,856,768
 
MARTINSBURG
 
242,634
 
1,273,828
 
628,937
 
 
242,634
 
 
1,902,765
 
 
2,145,399
 
RIVERWALK PLAZA
 
2,708,290
 
10,841,674
 
122,699
 
 
2,708,290
 
 
10,964,373
 
 
13,672,663
 
BLUE RIDGE
 
12,346,900
 
71,529,796
 
12,239,934
 
 
23,457,942
 
 
72,658,688
 
 
96,116,630
 
MEXICO - PACHUCA WAL-MART
 
3,621,985
 
—
 
6,623,264
 
 
3,943,079
 
 
6,302,170
 
 
10,245,249
 
MEXICO-SAN LUIS POTOSI
 
5,787,073
 
6,860,642
 
549,935
 
 
6,270,189
 
 
6,927,461
 
 
13,197,650
 
MEXICO- SALTILLO II
 
11,150,023
 
—
 
5,450,759
 
 
11,544,176
 
 
5,056,606
 
 
16,600,782
 
BALANCE OF PORTFOLIO
 
46,502,142
 
4,492,127
 
38,065,263
 
 
50,045,556
 
 
43,604,091
 
 
93,649,647
 
 
 
 
 
 
 
 
 
 
 
 
 
—
 
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
948,558,551
 
$
3,611,846,996
 
$
4,560,405,547
 
 
 
 
 
 
 
 
 
 
 
 
 
PROPERTIES
 
ACCUMULATED
DEPRECIATION
 
TOTAL COST,
NET OF ACCUMULATED
DEPRECIATION
 
ENCUMBRANCES
 
DATE OF
CONSTRUCTION(C)
ACQUISITION(A)
 
 
 
 
 
 
RICHMOND
 
 
563,584
 
 
2,858,291
 
 
—
 
1995(A)
 
VALLEY VIEW SHOPPING CENTER
 
 
399,655
 
 
11,828,238
 
 
—
 
2004(A)
 
MANCHESTER SHOPPING CENTER
 
 
558,551
 
 
9,144,874
 
 
—
 
2004(A)
 
HAZEL DELL TOWNE CENTER
 
 
—
 
 
30,581,115
 
 
10,785,094
 
2003(C)
 
RACINE
 
 
3,423,430
 
 
5,651,232
 
 
—
 
1988(A)
 
CHARLES TOWN
 
 
6,279,004
 
 
8,577,764
 
 
—
 
1985(A)
 
MARTINSBURG
 
 
1,668,445
 
 
476,954
 
 
—
 
1986(A)
 
RIVERWALK PLAZA
 
 
1,932,612
 
 
11,740,051
 
 
7,416,681
 
1999(A)
 
BLUE RIDGE
 
 
34,763,081
 
 
61,353,549
 
 
13,149,742
 
2005(A)
 
MEXICO - PACHUCA WAL-MART
 
 
—
 
 
10,245,249
 
 
—
 
2005(C)
 
MEXICO-SAN LUIS POTOSI
 
 
331,848
 
 
12,865,802
 
 
—
 
2004(A)
 
MEXICO- SALTILLO II
 
 
—
 
 
16,600,782
 
 
—
 
2005(C)
 
BALANCE OF PORTFOLIO
 
 
16,269,237
 
 
77,380,409
 
 
—
 
VARIOUS
 
 
 
 
—
 
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
740,127,307
 
$
3,820,278,240
 
$
543,790,520
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets as follows:
 
                      Buildings                                                                                15 to 50 years
                      Fixtures, building and leasehold improvements             
                        (including certain identified intangible assets)              Terms of leases or useful lives, whichever is shorter
 
The aggregate cost for Federal income tax purposes was approximately $ 4.2 billion at December 31, 2005.
 
The changes in total real estate assets for the years ended December 31, 2005, 2004, and 2003 are as follows:
 
 
 
 
2005
 
 
2004
 
 
2003
 
 
 
 
 
 
Balance, beginning of period
 
$
4,092,222,479
 
$
4,174,664,893
 
$
3,421,159,067
 
Acquisitions
 
 
490,125,913
 
 
672,421,546
 
 
1,142,133,901
 
Improvements
 
 
410,280,045
 
 
195,580,447
 
 
182,351,801
 
Transfers from  (to) unconsolidated joint ventures
 
 
(103,573,817
)
 
(748,974,957
)
 
(237,421,088
)
Sales
 
 
(299,944,373
)
 
(193,948,762
)
 
(312,228,077
)
Assets held for sale
 
 
(28,704,700
)
 
(4,555,688
)
 
(17,315,557
)
Adjustment of property carrying values
 
 
—
 
 
(2,965,000
)
 
(4,015,554
)
 
 
 
 
 
Balance, end of period
 
$
4,560,405,547
 
$
4,092,222,479
 
$
4,174,664,493
 
 
 
 
 
 
 
The changes in accumulated depreciation for the years ended December 31, 2005, 2004, and 2003 are as follows:
 
 
 
 
2005
 
 
2004
 
 
2003
 
 
 
 
 
 
Balance, beginning of period
 
$
634,641,781
 
$
568,988,445
 
$
516,558,123
 
Depreciation for year
 
 
98,591,658
 
 
96,584,738
 
 
83,563,580
 
Transfers from (to) unconsolidated joint ventures
 
 
27,812,350
 
 
(14,133,515
)
 
(4,124,181
)
Sales
 
 
(19,903,904
)
 
(15,909,487
)
 
(24,979,281
)
Assets held for sale
 
 
(1,014,578
)
 
(888,400
)
 
(2,029,796
)
 
 
 
 
 
Balance, end of period
 
$
740,127,307
 
$
634,641,781
 
$
568,988,445
 
 
 
 
 
 
 
Reclassifications:
Certain Amounts in the Prior Period Have Been Reclassified in Order to Conform with the Current Period's Presentation.
 
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