Exhibit 99.2

DDR MACQUARIE FUND LLC
CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended June 30, 2007, 2006 and 2005
with Report of Independent Auditors

DDR Macquarie Fund LLC
Consolidated Financial Statements
Table of Contents
For the Years Ended June 30, 2007, 2006 and 2005

Contents

Report of Independent Auditors	1
Consolidated Balance Sheets	2
Consolidated Statements of Income and Comprehensive Income	3
Consolidated Statements of Members’ Capital	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	6-25

Report of Independent Auditors

To DDR MDT Holdings I Trust, DDR MDT Holdings III Trust, JDN Realty Corporation, Macquarie DDR Management LLC and Macquarie DDR U.S. Trust Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income and comprehensive income, members’ capital and cash flows present fairly, in all material respects, the financial position of DDR Macquarie Fund LLC (the “Company”) at June 30, 2007 and 2006, and the results of its operations and its cash flows for the years ended June 30, 2007, 2006 and 2005, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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.

/s/ PricewaterhouseCoopers LLP
Cleveland, Ohio

August 24, 2007

DDR Macquarie Fund LLC
Consolidated Balance Sheets
June 30, 2007 and 2006

	June 30,
	2007			2006
Assets
Real estate rental property:
Land	$	467,499,989		$	467,144,140
Buildings		1,254,346,986			1,238,964,798
Construction in progress		521,499			20,096
Tenant improvements		24,041,151			20,536,832
		1,746,409,625			1,726,665,866
Less accumulated depreciation		(105,139,454	)		(70,295,538	)
Real estate, net		1,641,270,171			1,656,370,328
Cash and cash equivalents		8,513,866			8,928,173
Accounts receivable, net of allowance for doubtful accounts of $1,307,679 in 2007 and $873,450 in 2006		26,818,017			21,435,046
Accounts receivable, master leases		4,081,547			6,802,536
Prepaid expenses		2,172,488			64,715
Deferred financing costs, net of accumulated amortization of $5,670,167 in 2007 and $5,015,181 in 2006		6,485,648			6,590,871
Deferred lease costs, net of accumulated amortization of $1,198,027 in 2007 and $522,413 in 2006		4,124,221			2,709,623
Intangible assets, net of accumulated amortization of $4,671,469 in 2007 and $3,667,220 in 2006		12,299,793			13,633,309
Deposits		766,458			609,179
Other assets		9,563,875			5,532,012
Total assets	$	1,716,096,084		$	1,722,675,792
Liabilities and Members’ Capital
Mortgage notes payable	$	846,953,870		$	944,570,872
Line of credit		203,500,000			81,425,000
Accrued interest		3,052,827			3,643,581
Accrued real estate taxes		13,087,265			14,799,714
Accounts payable and other accrued liabilities		3,152,497			5,125,060
Tenant security deposits		1,107,808			1,003,594
Total liabilities		1,070,854,267			1,050,567,821
Minority interest		62,854			62,521
Members’ capital		636,483,149			669,037,549
Accumulated other comprehensive income		8,695,814			3,007,901
Total members’ capital		645,178,963			672,045,450
Total liabilities and members’ capital	$	1,716,096,084		$	1,722,675,792

The accompanying notes are an integral part of these consolidated financial statements.

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DDR Macquarie Fund LLC
Consolidated Statements of Income and Comprehensive Income
For the Years Ended June 30, 2007, 2006 and 2005

	Year Ended			Year Ended			Year Ended
	June 30, 2007			June 30, 2006			June 30, 2005
Revenues from operations:
Minimum rent	$	143,321,595		$	141,191,093		$	119,140,668
Overage rent		252,741			334,707			281,809
Recoveries from tenants		48,545,805			49,077,172			36,789,045
Lease termination fees		1,331,254			91,282			1,342,601
Ancillary and other property income		459,940			403,743			293,447
Total revenues		193,911,335			191,097,997			157,847,570
Rental operation expenses:
Depreciation and amortization		37,106,889			36,013,569			29,262,972
Real estate taxes		30,144,500			32,590,838			23,903,985
Operating and maintenance		20,950,400			18,061,770			14,614,884
Management fees		7,713,056			7,342,137			6,013,066
General and administrative		1,837,561			929,486			1,358,834
Total expenses		97,752,406			94,937,800			75,153,741
Operating income		96,158,929			96,160,197			82,693,829
Other income (expense):
Interest income		317,360			332,299			245,402
Interest		(57,990,646	)		(46,426,877	)		(40,993,530	)
		(57,673,286	)		(46,094,578	)		(40,748,128	)
Income before minority interest		38,485,643			50,065,619			41,945,701
Minority interest		(2,776	)		(2,860	)		(1,085	)
Net income		38,482,867			50,062,759			41,944,616
Other comprehensive income (loss) — effective portion of interest rate contracts		5,687,913			2,972,712			(249,444	)
Comprehensive income	$	44,170,780		$	53,035,471		$	41,695,172

The accompanying notes are an integral part of these consolidated financial statements.

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DDR Macquarie Fund LLC
Consolidated Statements of Members’ Capital
For the Years Ended June 30, 2007, 2006 and 2005

				Macquarie			DDR			Macquarie			Accumulated
	JDN			DDR			MDT			DDR			Other
	Realty			Management			Holdings			U.S. Trust			Comprehensive
	Corporation			LLC			I and III Trust			Inc.			Income			Total
Balance at June 30, 2004	$	—		$	1,312,972		$	70,939,497		$	532,579,258		$	284,633		$	605,116,360
Capital contributions		—			—			18,079,017			106,603,859			—			124,682,876
Distributions		—			(5,900,221	)		(9,486,222	)		(63,925,422	)		—			(79,311,865	)
Net income		—			7,009,493			4,483,072			30,452,051			—			41,944,616
Other comprehensive loss		—			—			—			—			(249,444	)		(249,444	)
Balance at June 30, 2005	$	—		$	2,422,244		$	84,015,364		$	605,709,746		$	35,189		$	692,182,543
Capital contributions		50,000			—			1,519,990			9,257,529			—			10,827,519
Distributions		(1,364	)		(8,314,828	)		(10,288,232	)		(65,395,659	)		—			(84,000,083	)
Net income		984			8,047,712			5,702,411			36,311,652			—			50,062,759
Other comprehensive income		—			—			—			—			2,972,712			2,972,712
Balance at June 30, 2006	$	49,620		$	2,155,128		$	80,949,533		$	585,883,268		$	3,007,901		$	672,045,450
Distributions		(1,382	)		(8,535,184	)		(8,511,433	)		(53,989,268	)		—			(71,037,267	)
Net income		337			8,540,071			4,143,076			25,799,383			—			38,482,867
Other comprehensive income														5,687,913
Transfer of ownership interest		(48,575	)		—			48,575			—			—			—
Balance at June 30, 2007	$	—		$	2,160,015		$	76,629,751		$	557,693,383		$	8,695,814		$	645,178,963

The accompanying notes are an integral part of these consolidated financial statements.

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DDR Macquarie Fund LLC
Consolidated Statements of Cash Flows
For the Years Ended June 30, 2007, 2006 and 2005

	Year Ended			Year Ended			Year Ended
	June 30,			June 30,			June 30,
	2007			2006			2005
Cash flow from operating activities:
Net income	$	38,482,867		$	50,062,759		$	41,944,616
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization		37,106,889			36,013,569			29,262,972
Amortization of deferred financing costs		3,443,019			2,768,281			2,708,998
Changes in operating assets and liabilities:
Accounts receivable		(5,382,971	)		(7,564,602	)		(710,368	)
Prepaid expenses		(2,107,773	)		738,439			(320,415	)
Deposits		(157,279	)		(137,344	)		566,549
Other assets		1,656,050			(2,524,111	)		187,469
Accrued interest		(590,754	)		809,225			1,297,805
Accrued real estate taxes		(1,712,449	)		4,066,314			248,770
Accounts payable and other accrued liabilities		(1,606,411	)		(680,468	)		2,383,017
Tenant security deposits		104,214			68,955			117,473
Minority interest		333			158			62,363
Total adjustments		30,752,868			33,558,416			35,804,633
Net cash provided by operating activities		69,235,735			83,621,175			77,749,249
Cash flow from investing activities:
Real estate developed or acquired, net of liabilities assumed		(17,240,559	)		(19,077,594	)		(446,291,993	)
Payment of deferred lease costs		(2,113,056	)		(1,737,586	)		(1,201,136	)
Net cash used in investing activities		(19,353,615	)		(20,815,180	)		(447,493,129	)
Cash flow from financing activities:
Proceeds from mortgage notes payable		—			—			462,800,000
Repayment of mortgage notes payable		(97,630,212	)		(2,508,334	)		(149,110,348	)
Proceeds from line of credit, net		122,075,000			2,780,851			16,529,046
(Payments made on) proceeds from coupon swap		(366,152	)		1,190,295			917,292
Payment of deferred financing costs		(3,337,796	)		(122,368	)		(4,488,989	)
Capital contributions from Members		—			10,827,519			124,682,876
Distributions to Members		(71,037,267	)		(84,000,083	)		(79,311,865	)
Net cash (used in) provided by financing activities		(50,296,427	)		(71,832,120	)		372,018,012
Net change in cash and cash equivalents		(414,307	)		(9,026,125	)		2,274,132
Cash and cash equivalents at beginning of period		8,928,173			17,954,298			15,680,166
Cash and cash equivalents at end of period	$	8,513,866		$	8,928,173		$	17,954,298

The accompanying notes are an integral part of these consolidated financial statements.

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

1. Organization of Company

Background

DDR Macquarie Fund LLC (the “Company”) was formed in the state of Delaware on September 3, 2003 to acquire, develop, own, lease, sell and finance various shopping centers (“the Properties”) located throughout the United States. The Company first acquired Properties on November 21, 2003.

As of June 30, 2007, the Company’s members include Macquarie DDR U.S. Trust Inc. (“US REIT”), DDR MDT Holdings I Trust (“DDR Trust I”), DDR MDT Holdings III Trust (“DDR Trust III”) and Macquarie DDR Management LLC (“US Manager”). During the year ended June 30, 2007 the membership interest held by JDN Realty Corporation (“JDN”) was transferred to DDR Trust I. The US REIT, DDR Trust I, DDR Trust III, JDN and US Manager are collectively referred to as the “Members” and each, individually, a “Member.” Developers Diversified Realty Corporation (“DDR”) wholly owns DDR Trust I, DDR Trust III and JDN Realty Corporation which are collectively known as DDR or DDR Party. The membership interests as of June 30, 2007, 2006 and 2005 are as follows:

	Membership			Membership			Membership
	interests as of			interests as of			interests as of
	June 30, 2007			June 30, 2006			June 30, 2005
US REIT		87.736	%		87.736	%		87.769	%
DDR Trust I and DDR Trust III		12.259	%		12.253	%		12.226	%
US Manager		0.005	%		0.005	%		0.005	%
JDN		0.000	%		0.006	%		0.000	%
		100.000	%		100.000	%		100.000	%

The US Manager is responsible for all asset management functions and has the authority to make certain decisions on behalf of the Company. The Company has engaged DDR to act as the Property Manager.

Nature of Business

The tenant base includes primarily national retail chains and local retailers. Consequently, the Company’s credit risk is concentrated in the retail industry.

Adverse changes in general or local economic conditions could result in the inability of some tenants to meet their lease obligations and could adversely affect the Company’s ability to attract and retain tenants.

Revenues derived from the Company’s largest tenant aggregated 6.5%, 6.0% and 5.3% of total revenues for the years ended June 30, 2007, 2006 and 2005, respectively. The Company believes the tenant portfolio is diversified in terms of location of its shopping centers and its tenant profile.

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

Properties

The Company has entered into the following property acquisitions including acquisitions of additional land and buildings at existing properties as noted below. Operating results for the Properties are included for the period subsequent to the date of the respective acquisitions. DDR and/or its affiliates received proceeds of $1,318,158,466 for the properties and additional land and buildings purchased from DDR and/or its affiliates.

			Properties Acquired
	Number of		from DDR or
Date Acquired	Properties Acquired		Affiliates of DDR		Purchase Price
November 21, 2003		11		11	$	738,031,505
May 14, 2004		12		8		546,203,597
December 15 and 22, 2004		3		3		95,853,869
January 14, 2005		2		2		64,274,549
February 24, 2005		2		2		49,391,648
March 9, 2005		5		5		170,845,035
April 1, 2005		3		3		63,981,146
June 22, 2005(A)		N/A		N/A		2,215,056
March 23, 2006(B)		N/A		N/A		14,600,865
April 26, 2006(C)		N/A		N/A		406,775
July 5, 2006(D)		N/A		N/A		9,506,452

A)	As discussed in Note 6, the Company purchased a building located at the Woodfield Village Green property. The building is located on land that was being leased to a joint venture in which DDR has an ownership interest.
B)	As discussed in Note 6, the Company purchased buildings on the Township Marketplace property located on land that was leased to DDR. In addition, the Company purchased land and a building developed by DDR at the Riverchase Promenade property.
C)	As discussed in Note 7, the Company purchased land at the Township Marketplace property that was previously leased from an unrelated party.
D)	As discussed in Note 6, the Company purchased buildings on the Riverdale Village (Inner Ring) property and the McDonough Marketplace property located on land that was leased to DDR.

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

The Properties owned as of June 30, 2007 are summarized as follows:

			(Unaudited)
			Total Owned
Property	Location	Date Acquired	GLA
Belden Park Crossings	Canton, OH	November 21, 2003		478,106
Carillon Place	Naples, FL	November 21, 2003		267,808
Fairfax Towne Center	Fairfax, VA	November 21, 2003		253,392
Independence Commons	Independence, MO	November 21, 2003		386,066
Midway Market Place	St. Paul, MN	November 21, 2003		324,354
Perimeter Pointe	Atlanta, GA	November 21, 2003		343,155
Riverdale Village (Outer Ring)	Minneapolis, MN	November 21, 2003		364,967
Shoppers World	Framingham, MA	November 21, 2003		769,276
The Plazas at Great Northern	North Olmstead, OH	November 21, 2003		624,587
Towne Center Prado	Marietta, GA	November 21, 2003		316,786
Woodfield Village Green	Schaumburg, IL	November 21, 2003		508,815
Batavia Properties	Rochester, NY	May 14, 2004		182,417
Cheektowaga Properties	Buffalo, NY	May 14, 2004		911,452
Clarence Properties	Buffalo, NY	May 14, 2004		885,111
Erie Marketplace	Erie, PA	May 14, 2004		107,537
Fayetteville Properties	Fayetteville, AR	May 14, 2004		313,141
Merriam Town Center	Kansas City, KS	May 14, 2004		351,244
New Hartford Consumer Square	Utica, NY	May 14, 2004		514,717
River Hills Shopping Center	Asheville, NC	May 14, 2004		190,970
Riverdale Village (Inner Ring)	Minneapolis, MN	May 14, 2004		186,900
The Marketplace	Nashville, TN	May 14, 2004		167,795
Towne Center	Nashville, TN	May 14, 2004		108,023
Township Marketplace	Monaca, PA	May 14, 2004		298,589
Harbison Court	Columbia, SC	December 15, 2004		236,707
Lakepointe Crossing	Lewisville, TX	December 15, 2004		311,039
Riverchase Promenade	Birmingham, AL	December 22, 2004		120,108
MacArthur Marketplace	Irving, TX	January 14, 2005		146,941
Pioneer Hills	Aurora, CO	January 14, 2005		127,215
Cool Springs Pointe	Brentwood, TN	February 24, 2005		201,414
Shoppers World of Brookfield	Brookfield, WI	February 24, 2005		182,722
Brown Deer Center	Brown Deer, WI	March 9, 2005		266,716
Brown Deer Market	Brown Deer, WI	March 9, 2005		143,372
Connecticut Commons	Plainville, CT	March 9, 2005		463,394
Lake Brandon Plaza	Brandon, FL	March 9, 2005		148,267
Lake Brandon Village	Brandon, FL	March 9, 2005		113,986
Grandville Marketplace	Grandville, MI	April 1, 2005		201,726
McDonough Marketplace	McDonough, GA	April 1, 2005		53,158
Parker Pavilions	Parker, CO	April 1, 2005		89,631
				11,661,604

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

Significant Terms

The Company’s profits and losses are allocated to the Members (i) first, to the US Manager until the cumulative amount of items of income or loss is equal to the aggregate amount of the base amount and performance amount distributions, as defined in the Amended and Restated Limited Liability Company Agreement (the “Agreement”), paid to US Manager for the current and all prior periods, (ii) second, profit and loss is allocated to the Members in an amount equal to the net disposition proceeds, as defined in the Agreement, beginning with a) the US Manager in an amount equal to its percentage interest in the Company, b) to each DDR Party in an amount equal to their percentage interest, c) to the US Manager in an amount equal to the sum of all previously accrued but unpaid base amounts and d) to the US REIT in an amount equal to the US REIT’s percentage interest.

The Company’s cash flows are distributed to the Members (i) first, for each fiscal quarter, the Company shall make distributions of net operating cash, as defined by the Agreement, to the US Manager in proportion to its percentage interest in the Company, (ii) second, to each DDR Party in proportion to its percentage interest in the Company, (iii) third, the Company shall make distributions of net operating cash to the US Manager (to the extent there is net operating cash remaining after the distributions noted above) for each fiscal quarter of the base amount, together with all previously accrued but unpaid base amounts, (iv) fourth, for each half year, the Company shall make distributions of the performance amount to the US Manager (v) fifth, for each fiscal quarter, the Company shall make distributions to the US REIT equal to its percentage interest from the net operating cash remaining after regular, base amount and performance amounts have been distributed. Upon receipt of the performance amount, the US Manager is required to purchase shares in the US REIT in accordance with the subscription agreement for the performance shares.

The Company’s net disposition proceeds from capital transactions, as defined by the Agreement, are distributed to the Members (i) first, to the US Manager in an amount equal to the product of the sale proceeds multiplied by US Manager’s percentage interest at time of the sale, (ii) second, to each DDR Party in an amount equal to the sale proceeds multiplied by such DDR Party’s percentage interest at time of sale, (iii) third, to the US Manager in an amount equal to the sum of all previously accrued but unpaid base amounts (iv) fourth, to the US REIT the remaining balance after distributions to the previous parties.

After November 21, 2008, DDR Party may elect to have the Company redeem their membership interests, in whole or in part for cash equal to the fair market value of the properties (“Redemption Option”). However, upon this election, the US REIT which is the controlling parent of the Company has the option to purchase the interest of DDR Party directly for cash or its stock that is convertible into units of Macquarie DDR Trust (“MDT”), a shareholder in the US REIT such that the Company will not be required to pay the DRR entity cash. As the US REIT has an unconditional right to satisfy the Redemption Option with either its shares or cash paid by an affiliate of the US REIT, the Company has recorded the DDR Party’s interests within its permanent equity.

If the Company desires to sell any property after DDR has sold its 50% interest in the US Manager and DDR Party meets certain ownership requirements as set forth in the Agreement, DDR Party has the option to purchase a property at the purchase price determined by the Company before it is offered for sale to a third party. If DDR Party does not elect to purchase the property, the Company may offer to sell the property to a third party based on specified terms in the Agreement.

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

2. Summary of Significant Accounting Principles

Basis of Presentation

For the year ended June 30. 2005, the Company qualified as a significant subsidiary to DDR and, as a result, audited financial statements are presented for that period. As of June 30, 2007 and June 30, 2006 and for the years ended June 30, 2007 and June 30, 2006, the Company does not meet the criteria of a significant subsidiary to DDR. However, as the books and records for the Company are maintained by DDR and an audit is required for other purposes, audited financial statements for those periods are also being presented.

Minority Equity Interests

The Company owns a 99.962% controlling ownership interest in the DDR MDT SW Holdings Trust, which owns the Shoppers World property. The minority shareholders’ equity interest in the real estate investment trust aggregated $62,854 and $62,521 at June 30, 2007 and 2006, respectively.

Principles of Consolidation

Other than the Shoppers World property, the Properties are owned by wholly owned subsidiaries of the Company. All significant intercompany balances and transactions have been eliminated in consolidation.

Real Estate

In connection with the acquisition of the Properties, the total purchase cost was allocated to the tangible and intangible assets acquired based upon their estimated fair market values pursuant to the provisions of SFAS 141, Business Combinations.

The value of the tangible assets, consisting of land, buildings and tenant improvements, are determined as if vacant. Intangible assets, including the value of in-place leases, lease origination costs and tenant relationships are recorded at their relative fair value (see further discussion below). The amount allocated to land, buildings and tenant improvements upon the initial acquisition of all Properties aggregated $465,326,292, $1,238,434,517 and $9,267,517, respectively.

Acquisitions of real estate are stated at cost less accumulated depreciation. In the Company’s opinion, the recorded amount of the real estate assets is not in excess of the Properties’ estimated gross undiscounted future cash flows. This assessment was made on the basis of the Company’s continued ownership and use of such Properties as well as considering the current and future expected occupancy levels.

Depreciation is provided on a straight-line basis over the estimated useful lives of the tangible assets as follows:

Buildings	40 years
Tenant Improvements	Useful lives, which approximate lease terms, where applicable

Depreciation expense was $35,074,915, $33,643,331 and $27,382,493 for years ended June 30, 2007, 2006 and 2005, respectively. Expenditures for maintenance and repairs are charged to operations as incurred. Renovations, which improve or extend the life of the asset, are capitalized.

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

Impairment of Long-Lived Assets

The Company follows the provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” The determination of undiscounted cash flows requires significant estimates made by management and considers the expected course of action at the balance sheet date. Subsequent changes in estimated undiscounted cash flows arising from changes in anticipated actions could affect the determination of whether an impairment exists. The Company reviews its long-lived assets used in operations for impairment when there is an event or change in circumstances that indicates an impairment in value. An asset is considered impaired when the undiscounted future cash flows are not sufficient to recover the asset’s carrying value. If such impairment is present, an impairment loss is recognized based on the excess of the carrying amount of the asset over its fair value.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company maintains cash deposits with a major financial institution which from time to time may exceed federally insured limits. The Company periodically assesses the financial condition of the institution and believes that the risk of loss is minimal.

Deferred Financing Costs

Costs incurred in obtaining long-term financing are capitalized and amortized into interest expense over the terms of the related debt agreements on the straight-line basis, which approximates the effective yield method. Amortization expense for the years ended June 30, 2007, 2006 and 2005 was $3,443,019, $2,768,281 and $2,708,998, respectively.

Deferred Lease Costs

Deferred lease costs represent direct costs paid to enter into tenant leases and are amortized over the related lease term. Amortization expense for the years ended June 30, 2007, 2006 and 2005 was $698,458, $423,359 and $130,776, respectively.

Intangible Assets

The Company allocated the purchase prices of the Properties to tangible and identified intangible assets acquired based on fair market values. The Company determined that the in-place leases acquired approximated fair market value, therefore there was no separate allocation in the purchase prices for above-market or below-market leases.

The total amount of intangible assets allocated to in-place lease values and tenant relationship values is based upon management’s evaluation of the specific characteristics of each lease and the Company’s overall relationship with anchor tenants. Factors considered in the allocation of these values include the nature of the existing relationship with the tenant, the expectation of lease renewals, the estimated carrying costs of the property during a hypothetical expected lease-up period, current market conditions and costs to execute similar leases, among other factors. Estimated carrying costs include real estate taxes, insurance, other property operating costs and estimates of lost rentals at market rates during the hypothetical expected lease-up periods, based upon management’s assessment of specific market conditions.

The value of in-place leases including origination costs is amortized to expense over the estimated weighted average remaining initial term of the lease portfolio. The value of tenant relationship intangibles is amortized to expense over the estimated initial and renewal terms of the lease portfolio; however, no amortization period for intangible assets will exceed the remaining depreciable life of the building.

The amount allocated to lease origination, in-place leases and tenant relationships in the initial

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

purchase price allocations of all Properties was $1,995,308, $2,892,549 and $13,002,767, respectively. The amortization period of each intangible asset ranges from 2 to 10 years for lease origination, 2 to 7 years for in-place leases and 11 to 28 years for tenant relationships. Amortization expense for years ended June 30, 2007, 2006 and 2005 was $1,333,516, $1,946,879 and $1,749,703, respectively.

The estimated amortization expense associated with the Company’s finite lived intangible assets for the five succeeding fiscal years is approximately as follows:

2008	$	963,000
2009		881,000
2010		827,000
2011		807,000
2012		634,000
	$	4,112,000

Supplemental Disclosure of Non-Cash Investing and Financing Information

Non-cash investing and financing activities are summarized as follows:

	Year Ended		Year Ended		Year Ended
	June 30, 2007		June 30, 2006		June 30, 2005
The effective portion of the changes in fair market value of interest rate swaps	$	5,687,913	$	2,972,712	$	35,189
Write off of deferred financing costs		2,788,033		—		—
Write off of intangible assets		329,267		392,560		197,535
Write off of tenant improvements		230,999		101,959		27,257
Write off of deferred lease costs		22,844		39,273		—
Acceptance of assets for settlement of accounts receivable		—		477,769		—
Net liabilities assumed with property acquisitions		—		—		7,995,832

The foregoing transactions did not provide or use cash, and accordingly, they are not reflected in the consolidated statements of cash flows.

Revenue Recognition

Minimum rents from tenants are recognized using the straight-line method over the lease term. Percentage and overage rents are recognized after the reported tenant’s sales have exceeded the applicable sales breakpoint. Revenues associated with tenant reimbursements are recognized in the period in which the expenses are incurred based upon provisions of the individual tenant leases. Lease termination fees are generally recognized upon termination of a tenant’s lease and vacating the space with no further rights.

Receipts from Made-Up Rental Shortfalls

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

The Company has master lease agreements for certain vacant spaces in its shopping centers (Note 6). The lessee is required to pay rent, plus payments for common area maintenance, insurance and real estate taxes in accordance with the master lease until the earlier of the expiration of the lease or the rental of the spaces by a third party. In accordance with EITF 85-27 Recognition of Receipts from Made-Up Rental Shortfalls, the Company records all receipts from the lessee under the arrangements as an adjustment to the basis of the property. As third party leases are signed and rent commences on the master leased spaces, the master lessee is released from future obligations pertaining to the space and all related receivable balances are reallocated to purchase price. All amounts received from third party tenants under leases for former master lease space are recognized as income.

Income Taxes

No provision has been made in the accompanying consolidated financial statements for any federal income taxes since each item of income, gain, loss, deduction or credit is reportable by the Members in their respective income tax returns.

Interest

Interest paid during the years ended June 30, 2007, 2006 and 2005 aggregated $53,349,882, $47,921,560 and $34,164,545, respectively, including interest received and paid on the interest rate swaps discussed in Notes 6 and 8.

Use of Estimates in Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

New Accounting Standards to Be Implemented

Fair Value Measurements - SFAS 157

     In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. This statement clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing the asset or liability. SFAS No. 157 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value. SFAS No. 157 also provides for certain disclosure requirements, including, but not limited to, the valuation techniques used to measure fair value and a discussion of changes in valuation techniques, if any, during the period. This statement is effective in fiscal years beginning after November 15, 2007, except for nonfinancial assets and nonfinancial liabilities that are not recognized or disclosed at fair value on a recurring basis, for which the effective date is fiscal years beginning after November 15, 2008. The Partnership is currently evaluating the impact that this Statement will have on its financial statements.

The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115 - SFAS 159

      In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”), which gives entities the option to measure eligible financial assets, financial liabilities and firm commitments at fair value on an instrument-by-instrument basis that are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a firm commitment. Subsequent changes (i.e., unrealized gains and losses) in fair value must be recorded in earnings. Additionally, SFAS No. 159 allows for a one-time election for existing positions upon adoption, with the transition adjustment recorded to beginning retained earnings. This statement is effective for fiscal years beginning after November 15, 2007. The Partnership is currently assessing the potential impact that the adoption of SFAS No. 159 will have on its financial position and results of operations.

Business Combinations - FAS 141(R)

     In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141 (R)”). The objective of this statement is to improve the relevance, representative faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To accomplish that, this statement establishes principles and requirements for how the acquirer: (i) recognizes and measures in its financial statements, the identifiable assets acquired, the liabilities assumed, and any non-controlling interest to the acquiree, (ii) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and (iii) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The Partnership is currently assessing the impact the adoption of SFAS No. 141 (R) would have on the Partnership’s financial position and results of operations.

Noncontrolling Interests in Consolidated Financials Statements - an Amendment of ARB No. 51 - FAS 160

In December 2007, the FASB issued SFAS No. 160, “Non-Controlling Interest in Consolidated Financial Statements in Amendment of ARB No 51.” A non-controlling interest, sometimes called minority interest, is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. The objective of this statement is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require: (i) the ownership interest in subsidiaries held by other parties other than the parent be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity, (ii) the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of operations, (iii) changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently and requires that they be accounted for similarly, as equity transactions, (iv) when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary be initially measured at fair value, the gain or loss on the deconsolidation of the subsidiary is measured using fail value of any non-controlling equity investments rather than the carrying amount of that retained investment and (v) entities provide sufficient disclosures that clearly identify and distinguish between the interest of the parent and the interest of the non-controlling owners. This statement is effective for fiscal years, and interim reporting periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The Company is currently assessing the impact the adoption of SFAS No. 160 would have on the Company’s financial position and results of operations.

3. Accounts Receivable

Accounts receivable are principally due from tenants and are expected to be collected within one year, except for the receivables associated with the recognition of straight-line rental income. Included in accounts receivable is $9,267,575, and $7,467,454 net of a $851,312, and $721,991 allowance, at June 30, 2007 and 2006, respectively, associated with the recognition of straight-line rental income which will be collected over the terms of the related tenant leases. The allowance for doubtful accounts disclosed in the consolidated balance sheets excludes that portion associated with straight-line rental receivables.

4. Mortgage Notes Payable

The Company obtained fourteen mortgage notes payable from Metropolitan Life Insurance Company and MetLife Bank, N.A. totaling $290,500,000 for funding of the initial acquisition of certain properties in November 2003. The mortgage notes payable are cross-collateralized and

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

cross-defaulted by the following properties: Woodfield Village Green, Carillon Place, Fairfax Towne Center, Shoppers World, Perimeter Pointe, Independence Commons and Towne Center Prado. The mortgage notes payable carry a fixed interest rate of 4.225% with a maturity date of December 1, 2008 and require monthly payments of interest only with the principal due at maturity. Interest paid on these mortgages for the years ended June 30, 2007, 2006 and 2005 was $12,273,625 during each fiscal year.

A $215,000,000 mortgage was obtained from German American Capital Corporation for funding the purchase of certain properties that were acquired in May 2004. The mortgage is collateralized and secured by the following properties: Batavia Properties, Cheektowaga Properties, River Hills Shopping Center, Riverdale Village (Inner Ring), certain Clarence Properties, Fayetteville Properties, Towne Center, Township Marketplace, The Marketplace and Erie Marketplace (the “Ten Properties”).

The $215,000,000 mortgage is comprised of a fixed component and a floating rate component. The fixed component consists of three notes payable totaling $165,250,000 at a rate of 4.18%, maturing in June 2009. The floating component consists of a note for $49,750,000 at a variable rate of LIBOR plus 25 basis points through August 31, 2004 and 84 basis points from September 1, 2004 through maturity. The floating rate component initially matures on June 1, 2007 and contains two one-year extension options to June 1, 2009. During the year ended June 30, 2007, $42,090,000 of the floating rate component was repaid as part of the line of credit refinance (Note 5) and the maturity of the remaining balance of $7,660,000 was extended to June 1, 2008. The floating rate was 6.215%, 6.09% and 4.09% at June 30, 2007, 2006, and 2005, respectively. Both components of the mortgage require monthly payments of interest only. The mortgage is cross-collateralized by all Ten Properties. The Ten Properties are required to comply with certain operating restrictions and financial covenants. The Company was in compliance with these covenants at June 30, 2007. Interest paid on the mortgage for the years ended June 30, 2007, 2006 and 2005 was $9,885,542, $9,568,381 and $8,511,655, respectively.

On May 14, 2004, the Company also assumed separate mortgage notes payable collateralized by certain properties within the Clarence Properties shopping center and the New Hartford Consumer Square property. The Company assumed mortgages of $5,400,000 from Jackson National Life Insurance Company, $4,000,000 from Keyport Life Insurance Company and $40,000,000 from Equitable Life Insurance Company, with borrowings outstanding of $5,112,122, $3,778,722 and $39,146,853, respectively. As of June 30, 2007, the balances of these mortgages were $4,618,685, $2,752,085 and $33,308,908, respectively, excluding fair value adjustments reducing the balances by $216,706. As of June 30, 2006, the balances of these mortgages were $4,790,609, $3,106,898 and $35,316,537, respectively, excluding fair value adjustments reducing the balances by $257,780. The mortgages carry fixed interest rates of 7.07%, 6.25% and 5.75% and mature on March 1, 2022, August 1, 2013 and November 1, 2018, respectively. Interest paid on these mortgage notes was $333,196, $184,132 and $1,978,339, respectively, for the year ended June 30, 2007 and $344,898, $205,575 and $2,090,262, respectively, for the year ended June 30, 2006, and $355,804, $225,722 and $2,195,944, respectively, for the year ended June 30, 2005.

On November 9, 2004, the Company entered into a $30,000,000 loan with German American Capital Corporation, which was collateralized by the Merriam Town Center property. The loan

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

requires monthly payments of interest only with principal due at maturity. Interest was calculated at a rate of LIBOR plus 25 basis points through March 14, 2005 and LIBOR plus 110 basis points from March 15, 2005 through maturity. The loan matured on November 9, 2006 and contained three one-year extension options to November 9, 2009. During the year ended June 30, 2007, the loan was extended until November 9, 2007 and then repaid as part of the line of credit refinance (Note 5). The interest rate on the mortgage was 6.35% at June 30, 2006. Interest paid on the loan was $1,801,298, $1,615,781 and $591,521 for the years ended June 30, 2007, 2006 and 2005, respectively.

As part of the December 22, 2004 property purchase, the Company assumed an $8,200,000 mortgage note payable from Lehman Brothers Bank, FSB on the Riverchase Promenade property with a borrowing outstanding of $7,995,832. As of June 30, 2007 and 2006, the balance of the mortgage was $7,693,165 and $7,819,011, respectively, excluding fair value adjustments of $267,733 and $295,597, respectively. The mortgage carries a fixed interest rate of 5.5%, and matures on January 11, 2013. Interest paid on the note was $432,859, $439,669 and $208,130 for the years ended June 30, 2007, 2006 and 2005, respectively.

In conjunction with the January 14, 2005 property purchase, an $85,000,000 loan was obtained from UBS Real Estate Investments Inc. The loan is cross-collateralized and cross-defaulted by the Harbison Court, Lakepointe Crossing, Pioneer Hills and MacArthur Marketplace properties. The loan calls for monthly payments of interest only at 4.91%, with principal due at maturity on January 11, 2012. Interest paid on the note for the years ended June 30, 2007, 2006 and 2005 was $4,173,500, $4,173,500 and $1,646,214, respectively.

On February 17, 2005, the Company obtained seven mortgage notes payable totaling $50,000,000 from Metropolitan Life Insurance Company. The mortgage notes payable are cross-collateralized and cross-defaulted by the following properties: Woodfield Village Green, Carillon Place, Fairfax Towne Center, Shoppers World, Perimeter Pointe, Independence Commons and Towne Center Prado. The notes are also cross-defaulted with the $290,500,000 mortgage notes payable as discussed above. The mortgage notes payable carry an interest rate of LIBOR plus 130 basis points and require monthly payments of interest only with the principal due at maturity on December 1, 2008. At June 30, 2007 and 2006, the interest rate on the mortgages was 6.62% and 6.41%, respectively. Interest paid on these mortgages for the years ended June 30, 2007, 2006 and 2005 was $3,354,958, $2,743,778 and $594,667 respectively.

As part of the March 9, 2005 property purchase, an $183,700,000 loan was obtained from UBS Real Estate Investments Inc. The loan is cross-collateralized and cross-defaulted by Shoppers World of Brookfield, Cool Springs Pointe, Lake Brandon Plaza, Lake Brandon Village, Connecticut Commons, Brown Deer Center, Brown Deer Market, and Riverdale Village (Outer Ring). The loan is comprised of a $157,250,000 note with a fixed interest rate of 4.822% and a $26,450,000 note with a floating rate of LIBOR plus 85 basis points. Both notes require monthly payments of interest only with principal due on the maturity date of April 5, 2010. As part of the line of credit refinance during the year ended June 30, 2007 (Note 5), Cool springs Pointe was removed from the loan and $22,880,000 of the floating rate note was paid off leaving a remaining balance on the floating rate note of $3,570,000. At June 30, 2007 and 2006, the floating rate was 6.17% and 5.98%, respectively. Interest paid on the loan for the years ended

-15-

DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

June 30, 2007, 2006 and 2005 was $9,749,151, $8,286,444 and $2,076,205, respectively.

On April 1, 2005, the Company obtained a $39,300,000 loan from UBS Real Estate Investments Inc. The loan is cross-collateralized and cross-defaulted by Grandville Marketplace, McDonough Marketplace and Parker Pavilions. The loan requires monthly payments of interest only at a rate of 5.098% with the principal due on the maturity date of April 5, 2010. Interest paid on the loan for the years ended June 30, 2007, 2006 and 2005 was $2,003,514, $2,003,514 and $356,180, respectively.

As of June 30, 2007, the scheduled principal payments of the mortgage notes payable for the next five fiscal years, and thereafter, are as follows:

2008	$	10,480,142
2009		508,742,157
2010		203,293,450
2011		3,365,771
2012		3,568,708
Thereafter		117,503,642
	$	846,953,870

5. Line of Credit

In conjunction with the initial acquisition of properties in November 2003, the Company obtained an available line of credit with JPMorgan Chase Bank, NA with a maturity date of November 30, 2007 and maximum borrowings of $125,000,000 with an optional one-year extension period. Borrowings on the line could be increased to $200,000,000 with the provision of additional collateral. The line of credit was collateralized by the following properties: The Plazas at Great Northern, Belden Park Crossings and Midway Market Place. The line of credit required monthly payments of interest only at a rate of LIBOR plus 137.5 basis points through April 19, 2005 and LIBOR plus 100 basis points from April 20, 2005 to maturity. The principal balance is due at maturity. Interest rates at June 30, 2006 and 2005 ranged from 6.17% to 6.35% and 4.14% to 4.26%, respectively, depending on the date of borrowing. Interest paid on the line of credit for the years ended June 30, 2007, 2006 and 2005 was $5,680,226, $4,243,709 and $2,253,215, respectively.

During the year ended June 30, 2007, the line of credit with JPMorgan Chase Bank, NA was refinanced through a line of credit established with Commonwealth Bank of Australia. No further borrowings on the line of credit with JPMorgan Chase Bank, NA are available. As part of the refinance, the $30,000,000 loan with German American Capital Corporation was repaid and portions of the $215,000,000 mortgage with German American Capital Corporation and the $183,7000,000 loan with UBS Real Estate Investments Inc. were repaid. The line of credit is collateralized by the following properties: The Plazas at Great Northern, Belden Park Crossings, Midway Market Place, Merriam Town Center, Riverdale Village (Inner Ring), Township Marketplace and Cool Springs Pointe. The line of credit with Commonwealth Bank of Australia matures on April 13, 2010 and has a maximum balance of $266,000,000. The properties that serve as collateral for the line of credit are required to comply with certain operating

-16-

DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

restrictions and financial covenants. The Company is in compliance with these operating restrictions and financial covenants. The line of credit requires monthly interest only payments at a rate of LIBOR plus 40 basis when the loan to value ratio is less than 60% and LIBOR plus 50 basis when the loan to value ratio is greater than or equal to 60%. The interest rate at June 30, 2007 was 5.72%. Interest paid on the line of credit with Commonwealth Bank of Australia for the year ended June 30, 2007 was $1,894,035.

6. Transactions with Related Parties

Receipts from Made-Up Rental Shortfalls

As discussed under Note 2, in connection with the acquisition of the Properties, the Company entered into master lease agreements with DDR or affiliates of DDR for certain vacant spaces in the shopping centers purchased from DDR or its affiliates. Under the master lease agreements, DDR or its affiliates are required to pay rent, plus common area maintenance, insurance and real estate taxes until the earlier of the expiration of the master leases or the rental of the spaces by a third party. The master lease arrangements with DDR and its affiliates are for a period of three years from the date the respective properties were acquired by the Company, except for a certain unit in the Midway Marketplace property, which has a five year term expiring in September 2009. As of June 30, 2007 and 2006, approximately 25,000 and 93,000 square feet, respectively, remained unleased under the master leases with DDR and its affiliates. Estimated remaining payments under the master leases with DDR and its affiliates for the space not yet leased, through their expiration, aggregated $345,911 and $2,162,906 at June 30, 2007 and 2006, respectively, and are classified in accounts receivable, master leases in the consolidated balance sheets.

In addition to the master leases, certain occupied units at the Harbison Court property were expanded by DDR. In accordance with the purchase agreement for the Harbison Court property, DDR paid rent based on the difference between the rent paid by the tenants prior to the expansion and the rent tenants are paying after completion of the expansion (the “Shortfall Rent”). DDR was also responsible for the costs associated with the expansion of these units. In October 2005, rent was increased for the final unit subject to Shortfall Rent. During the year ended June 30, 2006, DDR paid $40,108 for Shortfall Rent.

Ground Leases

On May 14, 2004, the Company entered into ground leases with DDR for land at Township Marketplace, Riverdale Village (Inner Ring), and The Marketplace. Additionally, on April 1, 2005, the Company entered into ground leases with DDR at Grandville Marketplace and McDonough Marketplace. The ground leases have a term of ninety-nine years and call for annual ground rent payments of $1 due from DDR plus the payment of real estate taxes and common area maintenance as set forth in the leases. DDR is required to make commercially reasonable efforts to develop and sublease the land. Once the land is developed, the Company has an option to purchase the developed land, including subleases, at the developed land’s appraised value, provided that certain debt obtained by the Company is outstanding. If this debt is not outstanding, the Company is obligated to purchase the developed land, subject to the

-17-

DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

availability of capital and certain other requirements. In addition, if the Company sells the property that a ground lease is a part of, the Company is required to purchase the developed land on the date the property is sold. As discussed in Note 1, on March 23, 2006, the Company purchased the developed land and subleases located at Township Marketplace. In addition, on July 5, 2006, the Company purchased the developed land and subleases at McDonough Marketplace and the developed land and subleases under one of the ground leases at the Riverdale Village (Inner Ring) property. During the years ended June 30, 2007, June 30, 2006 and June 30, 2005, the Company recorded $48,080, $114,865 and $230,474, respectively, in income under these ground leases. As of June 30, 2007 and 2006, $70,807 and $59,599, respectively, is due to the Company under the leases and is included in accounts receivable, net in the consolidated balance sheets.

On March 9, 2005, the Company entered into a ground lease with DDR for land located at the Shoppers World of Brookfield property. The ground lease has a term of ninety-nine years and calls for annual ground rent payments of $1 due from DDR plus the payment of real estate taxes and common area maintenance as set forth in the lease. DDR owns the property adjacent to the ground lease. DDR is required to use commercially reasonable efforts to develop the land under the ground lease. In addition, if DDR is able to have the land under the ground lease subdivided into a separate parcel of land, DDR shall purchase the land from the Company for $1, subject to certain conditions as set forth in the ground lease. During the years ended June 30, 2007 and 2006, $6,686 and $581, respectively, was recorded as income under this ground lease. As of June 30, 2007 and 2006, $9,144 and $2,550, respectively, is due to the Company under the lease and is included in accounts receivable, net in the consolidated balance sheets.

The Woodfield Village Green property was leasing land to an entity in which DDR has an ownership interest. The lease called for annual rental payments of $350,000 plus payments for common area maintenance, insurance and real estate taxes in accordance with the lease, which expired in February 2014. As discussed in Note 1, on June 22, 2005, the Company purchased the building located on the ground lease and the leases of the tenants who occupy the building. During year ended June 30, 2005, the Company recorded $684,688 in income related to the ground lease. As of June 30, 2006, $2,514 was due to the related entity under the lease and is included in accounts receivable in the consolidated balance sheets.

Insurance

In accordance with the management agreement, insurance coverage is provided through DDR’s insurance policies, which provide liability and property coverage. The Company remits to DDR and its affiliates insurance premiums to provide for non refundable escrow accounts for certain first dollar coverages and premiums associated with DDR’s insurance policies. In fiscal year 2007, these premium payments aggregated $8,808,284 including non-refundable escrows of $1,856,925. In fiscal year 2005, these premium payments aggregated $2,531,010 including non refundable escrows of $2,003,581. During the year ended June 30, 2006, no payments for insurance were remitted to DDR. As of June 30, 2006, $2,092,090 of premiums including non refundable escrows of $1,619,742 were due to DDR and were included within accounts payable and other accrued liabilities in the consolidated balance sheets.

-18-

DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

Fees Earned by Related Parties

Management fees earned by DDR are determined pursuant to provisions set forth in the management and operating agreements. The management fees earned by DDR are determined at an amount equal to 4% of gross rental receipts and are charged to operations as incurred. Management fees earned by DDR aggregated $7,734,952, $7,361,463 and $6,015,829 for the years ended June 30, 2007, 2006 and 2005, respectively. As of June 30, 2007, $638,488 of management fees are due to DDR and are included within accounts payable and other accrued liabilities in the consolidated balance sheets. No management fees were payable to DDR as of June 30, 2006.

DDR employees perform certain maintenance services at the Properties. During the years ended June 30, 2007, 2006 and 2005, the Company paid DDR $805,510, $756,591 and $518,759, respectively, for these maintenance services. As of June 30, 2007 and 2006, $60,275 and $68,750, respectively, was accrued for maintenance services and is included within accounts payable and other accrued liabilities in the consolidated balance sheets.

DDR has the ability to earn leasing commissions for the rental of space to tenants in accordance with the management agreement. Lease commissions are calculated based on whether the lease is a new lease or renewal of an existing lease, the rental income earned over the life of the lease and the square footage the tenant will occupy under the lease. Lease commissions are capitalized and amortized over the life of the lease. During the years ended June 30, 2007, 2006 and 2005, the Company paid $1,570,453, $1,453,894 and $906,791, respectively, in lease commissions to DDR. As of June 30, 2007 and 2006, $4,064 and $79,147, in lease commissions were due to DDR and are included in accounts receivable, net in the consolidated balance sheets.

DDR has the ability to earn construction management fees which are determined in accordance with the management and operating agreement. Except for the redevelopment or expansion of a property, construction management fees are calculated based on 5% of the cost of tenant improvements and other capital improvements, plus reimbursement of out of pocket costs and third party expenses. The construction management fee for a redevelopment or an expansion is determined by the Company and DDR in connection with the approval of development expenditures. The construction management fee is payable as costs for the work conducted are due and is subject to adjustment once the final costs for the work are determined. The Company records the construction management fees to buildings and tenant improvements as appropriate and depreciates the fee along with the related third party costs. During the years ended June 30, 2007, 2006 and 2005, $381,722, $275,715 and $332,129, respectively, in construction management fees were paid to DDR. As of June 30, 2006, $19,188 in construction management fees are due to DDR and are included in accounts receivable, net in the consolidated balance sheets. No construction management fees were due as of June 30, 2007.

DDR has the ability to earn fees for performing legal services on behalf of the Company. During the years ended June 30, 2007 and 2006, the Company paid $89,388 and $31,256, respectively, in conjunction with the performance of these legal services. No legal fees were paid during the year ended June 30, 2005.

-19-

DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

DDR employees perform certain tax preparation services on behalf of the Company. During the years ended June 30, 2007, 2006 and 2005, the Company paid $35,575, $29,550 and $20,000, respectively, in conjunction with these services. As of June 30, 2007 and 2006 accrued tax preparation fees payable to DDR aggregated $53,363 in each year and are included within accounts payable and other accrued liabilities in the consolidated balance sheets.

In conjunction with the line of credit refinance (Note 5) during the year ended June 30, 2007, the Company paid $1,330,000 in debt placement fees of which $532,000 was paid to DDR and $798,000 was paid to Macquarie Bank Limited (“MBL”). MBL owns 50% of the US Manager.

Interest Rate Swaps

As discussed in Note 8, the Company has entered into three interest rate swap agreements with MBL. The three interest rate swaps have notional amounts of $9.1 million, $20 million and $50 million. During the year ended June 30, 2007 and 2006, net interest of $394,493 and $72,107 respectively was received under these swap agreements. For the year ended June 30, 2005, interest of $520,086 was paid. As of June 30, 2007 and 2006, a receivable of $46,575 and $40,472 was recorded under these swap agreements and is included in accounts receivable, net in the consolidated balance sheets.

Coupon Swap

As discussed in Note 9, the Company entered into a coupon swap with MBL with a notional amount of $157.25 million. During the years ended June 30, 2007, 2006 and 2005, the Company has received $366,152 and $1,190,295 and $917,292, respectively, for the swap.

Property Purchases and Sales

The Company has options to purchase land adjacent to the MacArthur Marketplace property and land adjacent to the Grandville Marketplace property upon the development and lease of the land by DDR. The options call for the purchase of this land at its appraised value.

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

Other Related Party Receivables and Payables

In addition to the related party balances discussed above, as of June 30, 2007 and 2006 the Company has the following net related party receivables which are included within accounts receivable, net in the consolidated balance sheets.

	Other receivables as of June		Other receivables as of June
	30, 2007		30, 2006
DDR	$	55,605	$	102,175
US REIT		35,250		—
US Manager		—		280,773
Total	$	90,855	$	382,948

Summary of Related Party Receivables and Payables

The following is a summary of related party receivables and payables as of June 30, 2007, and 2006:

	Receivable
	(payable) due from
	(to) DDR and			Receivable due from		Receivable due from		Receivable due from
Related party receivables (payables) as of June 30, 2007	affiliates of DDR			US REIT		US Manager		MBL
Accounts receivable, master leases	$	345,911		$	—	$	—	$	—
Accounts receivable, net		131,492			35,250		—		46,575
Accrued interest		—			—		—		—
Accounts payable and other accrued liabilities		(752,126	)		—		—		—
	Receivable
	(payable) due from
	(to) DDR and			Receivable due from		Receivable due from		Receivable due from
Related party receivables (payables) as of June 30, 2006	affiliates of DDR			US REIT		US Manager		MBL
Accounts receivable, master leases	$	2,162,906		$	—	$	—	$	—
Accounts receivable, net		63,475			—		280,773		40,472
Accrued interest		—			—		—		—
Accounts payable and other accrued liabilities		(2,214,203	)		—		—		—

Related Party Interest Received and Paid

In addition to the swap agreements, the Company received and paid interest to the following related parties during the years ended June 30, 2006 and 2005. DDR MV LLC (“MV LLC”) is owned by the US Manager and members related to DDR and MDT. No interest was paid during the year ended June 30, 2007.

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

	Interest paid			Interest (paid)
	during the			received during the
	year ended June 30, 2006			year ended June 30, 2005
MV LLC	$	(3,690	)	$	—
US Manager		—			(4,637	)
MDT		—			(156	)
MBL		—			118
US REIT		—			376
DDR		—			1,083
Total	$	(3,690	)	$	(3,216	)

7. Commitments

Shopping center space is leased to tenants pursuant to agreements which provide for terms ranging from one to thirty years; and, in some cases, for annual rentals, which are subject to upward adjustments based on operating expense levels, sales volume, or contractual increases, as defined in the lease agreements.

The scheduled future minimum revenues from rental property under the terms of all non-cancelable tenant leases, assuming no new or renegotiated leases or option extensions for such premises, for the subsequent five fiscal years ending June 30, and thereafter, are as follows:

2008	$	134,626,843
2009		126,388,384
2010		115,005,250
2011		99,573,537
2012		83,770,802
Thereafter		336,271,982
	$	895,636,798

The Company leased land from unrelated parties under triple net leases. As discussed in Note 1, the Company purchased the land under one of the leases in April 2006. The Company has the right of first refusal under the remaining lease to purchase all or of any portion the land under the lease or the landlord’s rights under the ground lease for the same consideration and terms offered to a third party.

Future minimum rental expense, for the subsequent five fiscal years ending June 30, and thereafter, is as follows:

2008	$	42,417
2009		42,417
2010		42,417
2011		42,417
2012		42,417
Thereafter		1,228,915
	$	1,441,000

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005
8. Interest Rate Swaps and Hedging

Accounting Policy for Derivative and Hedging Activities

All derivatives are recognized in the consolidated balance sheets at their fair value. On the date that the Company enters into a derivative, it designates certain derivatives as a hedge against the variability of cash flows that are to be paid in connection with a recognized liability or forecasted transaction. Subsequent changes in the fair value of a derivative designated as a cash flow hedge that is determined to be highly effective are recorded in other comprehensive income in the consolidated statements of income and comprehensive income, until earnings are affected by the variability of cash flows of the hedged transaction. Any hedge ineffectiveness is reported in current earnings in the consolidated statements of income and comprehensive income.

The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. The Company formally assesses (both at the hedge’s inception and on an ongoing basis) whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in the cash flows of the hedged items and whether those derivatives may be expected to remain highly effective in future periods. Should it be determined that a derivative is not (or has ceased to be) highly effective as a hedge, the Company will discontinue hedge accounting on a prospective basis. The Company does not utilize these instruments for trading or speculative purposes.

Risk Management

The Company entered into interest rate swaps to mitigate fluctuations in earnings that are caused by interest rate volatility. The Company has not designated certain derivatives as a qualifying hedge pursuant to SFAS 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS149, Amendment of Statement 133 on Derivatives and Hedging Activities. The Company is recording changes in fair value for these derivatives in earnings as a component of interest expense. The Company does not utilize these arrangements for trading or speculative purposes. The principal risk to the Company through its interest rate hedging strategy is the potential inability of the financial institution from which the interest rate swap was purchased to cover all of their obligations. To mitigate this exposure, the Company entered into its interest rate swaps from major financial institutions.

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

Cash Flow Hedges

The Company has entered into the following interest rate swaps:

Converts Variable

Effectiveness for

Effectiveness for

Effectiveness for

Notional Amount

Term

Rate Debt into a

the Year Ended

the Year Ended

the Year Ended

Date Executed

Effective Date

Mautirty Date

($ in millions)

(years)

Fixed Rate of

June 30, 2007

June 30, 2006

June 30, 2005

November 2003

December 2003

November 2008

$

9.10

5

3.5380

%

(A)

(A)

(A)

April 2004

April 2004

June 2009

20.00

5

3.9600

%

(A)

(A)

Effective

December 2004

November 2008

November 2010

50.00

2

5.1050

%

(A)

(A)

(A)

March 2005

March 2010

March 2012

157.25

2

5.2500

%

Effective

(A)

(A)

November 2005

June 2009

June 2014

75.00

5

5.2225

%

Effective

Effective

Not applicable

January 2006

June 2009

June 2014

75.00

5

4.9000

%

Effective

Effective

Not applicable

May 2006

December 2008

December 2018

70.00

10

5.7865

%

Effective

Effective

Not applicable

September 2006

December 2008

December 2018

100.00

10

5.4710

%

Effective

Not Applicable

Not Applicable

December 2006

December 2008

December 2018

80.00

10

5.0850

%

Effective

Not Applicable

Not Applicable

^A) The Company did not elect to designate and assess the ongoing effectiveness of these derivative instruments. Accordingly, these derivative instruments are measured at fair value and gains or losses are recognized currently in earnings.

For the years ended June 30, 2007, 2006 and 2005, other comprehensive income of $5,687,913, $2,972,712 and other comprehensive loss of $249,444, respectively, was recorded for the effective portion of the changes in fair value of the interest rate swaps. For the years ended June 30, 2007, 2006 and 2005, a loss of $1,656,050, income of $5,121,294 and a loss of $2,784,652 respectively, was recorded to earnings as a component of interest expense for the swaps that were not designated as hedges pursuant to SFAS 133, as amended by SFAS 149. During the year ended June 30, 2007, the Company designated the $157.25 million swap as effective. In the fiscal year ended June 30, 2006, it was determined that the $20 million swap ceased to be highly effective as a hedge; therefore, the Company discontinued hedge accounting and changes in fair value of the swap were recorded through earnings.

As of June 30, 2007 and 2006, the aggregate fair value of the Company’s interest rate swaps was an asset of $9,563,875 and $5,532,012, respectively. The aggregate fair value of the interest rate swaps as of June 30, 2007 and 2006 is included in other assets in the consolidated balance sheets. For the year ended June 30, 2007, $18,841 of ineffectiveness was recorded in the consolidated statements of income and comprehensive income for the effective swaps. For the years ended June 30, 2007, 2006 and 2005, as the critical terms for the effective swaps discussed above and the hedged cash flows are the same, no ineffectiveness was recorded in the consolidated

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DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

statements of income and comprehensive income. All components of the effective interest rate swaps were included in the assessment of hedge effectiveness. As the Company will not make or receive any payments over the next twelve months for the swaps that are highly effective hedges at June 30, 2007, the Company expects that no amounts recorded to other comprehensive income (loss) will be reclassified to earnings within the next twelve months. The fair value of the interest rate swaps is based upon the estimated amounts the Company would receive or pay to terminate the contract at the reporting date and is determined using interest rate market pricing models.

In accordance with the agreement for the $157.25 million interest rate swap, the Company is required to maintain collateral for the swap is which calculated based on the fair market value of the swap. As of June 30, 2007 and 2006, the Company had a letter of credit outstanding of $2,000,000 in connection with the swap.

9. Coupon Swap

The Company entered into an interest rate swap with MBL effective April 2005 for a period of seven years, which is being accounted for as a financing transaction. The Company pays fixed interest rates of 1.800%, 4.800% and 5.595% over various periods during the term of the swap where MBL pays a fixed interest rate of 5.300% throughout the life of the swap based on a notional amount of $157,250,000. MBL will receive net interest of $523,883 over the term of the swap. The net interest is being recorded to interest expense over the life of swap using the effective interest method. During the year ended June 30, 2007, the Company paid $366,152 for the swap and accrued $125,343 in interest. During the year ended June 30, 2006, the Company has received $1,190,295 in cash for the swap and has accrued $93,476 in interest. During the year ended June 30, 2005 the Company has received $917,292 in cash for the swap. The coupon swap is included in accounts payable and other accrued liabilities in the consolidated balance sheets.

10. Fair Value of Financial Instruments

Considerable judgment is necessary to estimate fair value of financial instruments. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of such financial instruments. The following methods and assumptions were used by the Company in estimating its fair value disclosures of financial instruments:

Cash and cash equivalents, accounts receivable, accounts payable:

The carrying amounts reported in the consolidated balance sheets for these financial instruments approximated fair value because of the short maturity of these instruments. The carrying amount of straight-line rents receivable does not differ materially from their fair value.

Debt:

As of June 30, 2007 and 2006, the fair value of the Company’s fixed rate mortgages was $785,672,843 and $754,140,377, respectively, based on the Company’s estimated interest rate

-25-

DDR Macquarie Fund LLC
Notes to Consolidated Financial Statements
For the Years Ended June 30, 2007, 2006 and 2005

spread over the applicable treasury rate with a similar remaining maturity and applying a discounted cash flow analysis. As of June 30, 2007 and 2006, the carrying value of the fixed rate mortgages was $764,469,672 and $788,370,872, respectively. The fair market value of variable rate debt approximates the carrying value due to the frequent reset of the variable interest rates.

11. Subsequent Events

On August 15, 2007 the Company purchased three properties located in Florida from DDR for a purchase price of $26,913,409. DDR received proceeds of $26,643,707 from the purchase.

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