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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, 2002
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OR
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
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Commission file number 1-10899
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Kimco Realty Corporation
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(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
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(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:
Name of each exchange on
Title of each class which registered
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Common Stock, par value $.01 per share. New York Stock Exchange
- --------------------------------------- ------------------------
Depositary Shares, each representing one-
tenth of a share of 7-3/4% Class A
Cumulative Redeemable Preferred Stock,
par value $1.00 per share. New York Stock Exchange
- -------------------------- ------------------------
Depositary Shares, each representing one-
tenth of a share of 8-1/2% Class B
Cumulative Redeemable Preferred Stock,
par value $1.00 per share. New York Stock Exchange
- -------------------------- ------------------------
Depositary Shares, each representing one-
tenth of a share of 8-3/8% Class C
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
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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 X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. X
----
Indicate by check mark whether the Registrant is an accelerated filer
(as defined in rule 12b-2 of the Act.) Yes X No
---- ----
The aggregate market value of the voting stock held by
non-affiliates of the Registrant was approximately $2.8 billion based upon the
closing price on the New York Stock Exchange for such stock on January 31, 2003.
(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.
104,651,866 shares as of January 31, 2003.
1
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 15, 2003.
Index to Exhibits begins on page 48.
2
TABLE OF CONTENTS
Form
10-K
Report
Item No. Page
- -------- -----------
PART I
1. Business ................................................................. 4
2. Properties ............................................................... 17
3. Legal Proceedings ........................................................ 19
4. Submission of Matters to a Vote of Security Holders ...................... 19
Executive Officers of the Registrant ..................................... 29
PART II
5. Market for the Registrant's Common Equity
and Related Shareholder Matters .......................................... 31
6. Selected Financial Data .................................................. 32
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations .................................................... 34
7A. Quantitative and Qualitative Disclosures About Market Risk ............... 45
8. Financial Statements and Supplementary Data .............................. 45
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure ..................................................... 45
PART III
10. Directors and Executive Officers of the Registrant ....................... 46
11. Executive Compensation ................................................... 46
12. Security Ownership of Certain Beneficial Owners and Management ........... 46
13. Certain Relationships and Related Transactions ........................... 46
14. Controls and Procedures .................................................. 46
PART IV
15. Exhibits, Financial Statements, Schedules and Reports on Form 8-K ........ 47
3
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
include 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 (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 December 21, 2001, the Company effected a three-for-two split (the "Stock
Split") of the Company's common stock in the form of a stock dividend paid to
stockholders of record on December 10, 2001. 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 35 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 7, 2003, the Company's portfolio
was comprised of 607 property interests including 538 neighborhood and community
shopping center properties, two regional malls, 41 retail store leases, 22
ground-up development projects and four parcels of undeveloped land totaling
approximately 90 million square feet of leasable space located in 41 states,
Canada and Mexico. 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 6 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 gross leasable area ("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.
Our Web site is located at http://www.Kimcorealty.com. On our 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").
4
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, provides 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 believes that these properties are
appropriate for financing with greater leverage than the Company traditionally
uses. 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, 2002, 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 6 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 - Kimco
Developers, Inc. ("KDI")), (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.
During October 2001, the Company continued its geographical expansion by forming
the RioCan Venture with RioCan Real Estate Investment Trust ("RioCan", Canada's
largest publicly traded REIT measured by GLA) in which the Company has a
non-controlling 50% interest, to acquire retail properties and development
projects in Canada. The Company has committed a total equity investment of up to
$250.0 million Canadian dollars ("CAD") and accounts for this investment under
the equity method of accounting (see Recent Developments - Operating Real Estate
Joint Venture Investments and Note 6 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, including KROP.
5
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 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 the future.
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, 2002, 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, 2002, the Company's five largest tenants,
include Kmart Corporation (see Recent Developments - Kmart Bankruptcy), The Home
Depot, Kohl's, TJX Companies and Wal-Mart, which represent approximately 4.5%,
2.8%, 2.7%, 2.5% and 1.9%, 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 retail 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 retail property solutions
business which specializes in real estate advisory 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 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.
6
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, 2002, the
Company's level of debt to total market capitalization was 31%. 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.
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 $2.7
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 a $250.0 million, unsecured revolving credit facility, which is
scheduled to expire in August 2003. This credit facility has made available
funds to both finance the purchase of properties and meet any short-term working
capital requirements. As of December 31, 2002, there was $40.0 million
outstanding under this unsecured revolving credit facility. The Company intends
to renew this revolving credit facility prior to the maturity date.
The Company also has a $200.0 million medium-term notes program (the "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, 2002, $98.0 million was available
for issuance under the MTN program. (See Note 10 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. As of December 31, 2002, the Company had over 380 unencumbered
property interests in its portfolio representing over 89% of the Company's net
operating income.
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 seek to obtain funds through additional equity offerings, unsecured
debt financings and/or mortgage financings and other capital alternatives in a
manner consistent with its intention to operate with a conservative debt
capitalization policy.
During May 2001, the Company filed a shelf registration on Form S-3 for up to
$750.0 million of debt securities, preferred stock, depositary shares, common
stock and common stock warrants. As of January 31, 2003, the Company had
approximately $288.7 million available for issuance under this shelf
registration statement.
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 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 facility, 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 operations was $278.9
million for the year ended December 31, 2002, as compared to $287.4 million for
the year ended December 31, 2001.
7
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 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 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 the tenant 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.
Risk Factors Set forth below are the material risks associated with the purchase
and ownership of the securities of the Company. 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, (i)defaults of major
tenants due to bankruptcy, insolvency and/or general downturn in their business
which could reduce the Company's cash flow, (ii) major tenants not renewing
their leases as they expire or renew at lower rental rates which could reduce
the Company's cash flow, (iii) changes in retailing trends which could reduce
the need for shopping centers, (iv) potential liability for future or unknown
environmental issues, (v) changes in real estate and zoning laws and competition
from other real estate owners which could make it difficult to lease or develop
properties, and (vi) the inability to acquire capital, either in the form of
debt or equity, on satisfactory terms to fund the Company's cash requirements.
The success of the Company also depends upon trends in the economy, including,
but not limited to, interest rates, income tax laws, governmental regulations
and legislation and population trends. Additionally, the Company is subject to
complex regulations related to its status as a REIT and would be adversely
affected if it failed to maintain its qualification as a REIT.
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. 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 Hartford, Connecticut; Margate, Orlando and Tampa, Florida; Albany,
New York; Philadelphia, Pennsylvania; Dallas, Texas; Dayton and Cleveland, Ohio;
Lisle and Chicago, Illinois; Charlotte and Cary, North Carolina; Phoenix,
Arizona; Jonesboro, Georgia; Woodbridge, Virginia; Los Angeles, San Francisco
and Sacramento, California and Baltimore, Maryland. A total of 324 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 efforts
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 51 persons at several of its larger
properties in order to more effectively administer its maintenance and security
responsibilities.
Management Information Systems Virtually all operating activities are supported
by a sophisticated computer software system designed to provide management with
operating data necessary to make informed business decisions on a timely basis.
These systems are continually expanded and enhanced by the Company and reflect a
commitment to quality management and tenant relations. The Company has
integrated an advanced mid-range computer with personal computer technology,
creating a management information system that facilitates the development of
property cash flow budgets, forecasts and related management information.
8
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 2002
include, but are not limited to, (i) the ground-up development of shopping
center properties and subsequent sale thereof upon completion (see Recent
Developments - Kimco Developers, Inc. ("KDI")) and (ii) real estate advisory and
disposition services provided in connection with asset designation rights and
assistance with inventory and furniture liquidations in connection with
going-out-of-business sales by certain bankrupt retailers. As such, the Company
was subject to federal and state income taxes on the income from these
activities.
Recent Developments
Kmart Bankruptcy -
On January 22, 2002, Kmart Corporation ("Kmart") filed for protection under
Chapter 11 of the U.S. Bankruptcy Code. As of the filing date, Kmart occupied 69
locations (excluding the KIR portfolio which included six Kmart locations),
representing 12.6% of the Company's annualized base rental revenues and 13.3% of
the Company's total shopping center GLA as of the filing date. During 2002,
Kmart rejected its leases at 31 locations, representing approximately $30.8
million of annualized base rental revenues and approximately 3.2 million square
feet of GLA. As of December 31, 2002, Kmart represented 4.5% of annualized base
rents and 6.9% of leased GLA.
During December 2002, the Company disposed of, in separate transactions, seven
former Kmart sites, comprised of approximately 1.0 million square feet of GLA,
for an aggregate sales price of approximately $40.8 million.
The Company has currently leased or is under agreement to lease 11 of the
rejected locations, has terminated four ground lease locations and has received
offers to purchase three of these sites. The Company is reviewing the offers
received and is actively marketing the remaining six locations to prospective
tenants, however, no assurances can be provided that these locations will be
leased in the near term or at comparable rents previously paid by Kmart.
The Company had previously encumbered seven of these rejected locations with
individual non-recourse mortgage loans totaling approximately $70.8 million.
Annualized interest expense on these loans was approximately $5.6 million.
During July 2002, the Company suspended debt service payments on these loans and
was actively negotiating with the respective lenders. During December 2002, the
Company reached agreement with certain lenders in connection with four of these
locations. The Company paid approximately $24.2 million in full satisfaction of
the loans encumbering these properties which aggregated $46.5 million. As a
result of these transactions, the Company recognized a gain on early
extinguishment of debt of approximately $22.3 million. Also, during December
2002, the Company re-tenanted one location and brought the mortgage loan
encumbering this property current.
Additionally, during February 2003, the Company reached agreement with the
lender in connection with the two remaining encumbered locations. The Company
paid approximately $8.3 million in full satisfaction of these loans which
aggregated approximately $14.7 million. As a result of this transaction, the
Company will recognize a gain on early extinguishment of debt of approximately
$6.2 million during the first quarter of 2003.
On January 14, 2003, Kmart announced it would be closing an additional 326
locations of which nine of these locations (excluding the KIR portfolio which
includes three additional locations and Kimsouth (as defined below) which
includes two additional locations) are leased from the Company. The annualized
base rental revenues from these nine locations are approximately $4.3 million.
The Company had previously encumbered one of these properties with an individual
non-recourse mortgage loan. The annualized interest expense for the one
encumbered property is approximately $0.8 million. As of the date of this filing
of this annual report on Form 10-K, the Company has not been notified directly
by Kmart as to the timing of these store closings or whether the leases will be
assigned or rejected. Until such time as the leases are rejected in accordance
with the bankruptcy proceedings, Kmart remains obligated for payments of rent
and operating expenses at these locations and all other remaining locations.
9
Effective May 1, 2003, the Company has agreed to a five-year rent reduction at
six Kmart locations, consisting of approximately 0.6 million square feet of GLA.
The average rent was reduced from $8.01 per square foot to $5.57 per square
foot, or approximately $1.5 million of annualized base rent.
The Company generally will have the right to file claims in connection with
rejected leases for lost rent equal to three years of rental obligations as well
as other amounts related to obligations under the leases. Actual amounts to be
received in satisfaction of these claims will be subject to Kmart's final plan
of reorganization and the availability of funds to pay creditors such as the
Company.
Operating Properties -
Acquisitions -
During the year ended December 31, 2002, the Company acquired 13 wholly owned
operating properties located in seven states and Mexico, comprising
approximately 1.8 million square feet of GLA for an aggregate purchase price of
approximately $258.7 million including the issuance of approximately 2.4 million
downREIT units valued at $80.0 million in connection with the acquisition of one
of the properties and the assumption of approximately $3.5 million in mortgage
debt encumbering one of the properties. Details of these transactions are as
follows:
During April 2002, the Company acquired three operating properties located in
Columbia, MD, comprising approximately 0.2 million square feet of GLA, for an
aggregate purchase price of approximately $15.4 million.
During May 2002, the Company acquired a property located in Springfield, MO for
an aggregate purchase price of approximately $4.3 million including the
assumption of approximately $3.5 million in mortgage debt.
During July 2002, the Company acquired a property located in East Windsor, NJ
comprising approximately 0.2 million square feet of GLA, for an aggregate
purchase price of approximately $26.5 million. During November 2002, the Company
sold this property for a purchase price, which approximated net book value. The
Company retained a minor interest in the property, which allows for the
participation of Net Cash Flows, as defined. Effective with the sale, the
Company entered into a property management agreement with the purchaser to
provide services relating to the management, leasing, operation, supervision and
maintenance of the property.
During October 2002, the Company acquired an interest in a shopping center
property, comprising approximately 0.6 million square feet of GLA, located in
Daly City, CA. The property was valued at a purchase price of approximately
$80.0 million and was acquired by issuing approximately 2.4 million downREIT
units which are convertible at a ratio of 1:1 into the Company's common stock
(see Note 16 of the Notes to Consolidated Financial Statements included in this
annual report on Form 10-K).
During October 2002, the Company, in separate transactions, purchased two
properties located in Monterrey, Mexico comprising approximately 0.3 million
square feet of GLA for an aggregate purchase price of approximately $368.5
million pesos ("MXN")(USD $35.7 million). One of these sites consists of a
portion under development of approximately 0.1 million square feet of GLA with
total development costs budgeted at approximately MXN $29.3 million (USD $5.8
million). The scheduled completion of this project is during the fourth quarter
of 2003. The Company has entered into several foreign currency hedge
transactions to reduce its exposure to fluctuations in foreign currency exchange
rates.
During December 2002, the Company acquired four operating properties, in
separate transactions, comprising approximately 0.6 million square feet of GLA
located in three states for an aggregate purchase price of approximately $96.3
million.
10
Dispositions -
During 2002, the Company, (i) disposed of, in separate transactions, 12
operating properties for an aggregate sales price of approximately $74.5
million, including the assignment/repayment of approximately $22.6 million of
mortgage debt encumbering three of the properties and (ii) terminated five
leasehold positions in locations where a tenant in bankruptcy had rejected its
lease. These transactions resulted in net gains of approximately $12.8 million.
Details of these transactions are as follows:
During April 2002, the Company disposed of an operating property located in
Massapequa, NY for a sales price of approximately $4.1 million, including the
assignment of approximately $2.7 million of mortgage debt. Cash proceeds from
this disposition were used to acquire an exchange shopping center property
located in Springfield, MO during May 2002.
During July 2002, the Company disposed of an operating property located in
Columbus, OH for a sales price of approximately $1.4 million.
During September 2002, the Company disposed of an operating property located in
Corsicana, TX for a sales price of approximately $11.5 million including the
assignment of approximately $8.4 million of mortgage debt.
During October 2002, the Company, in separate transactions, disposed of two
operating properties for an aggregate sales price of approximately $6.3 million.
Cash proceeds from one of these dispositions was used to acquire an exchange
shopping center property in December 2002.
During November 2002, the Company disposed of an operating property located in
Chicago, IL. Net proceeds from this sale of approximately $8.0 million were
accepted by a lender in full satisfaction of an outstanding mortgage loan of
approximately $11.5 million. The Company recognized a gain on early
extinguishment of debt of approximately $3.2 million.
During December 2002, the Company, in separate transactions, disposed of six
operating properties for an aggregate sales price of approximately $39.7
million. Proceeds from two of these sales will be used to purchase exchange
shopping center properties.
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 2002,
the Company substantially completed the redevelopment and re-tenanting of
various operating properties. The Company expended approximately $44.4 million
in connection with these major redevelopments and re-tenanting projects during
2002. 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
$30.0 million to $50.0 million during 2003.
Kimco Developers, Inc. ("KDI") -
Effective January 1, 2001, the Company elected taxable REIT subsidiary status
for its wholly-owned subsidiary, KDI. KDI is primarily engaged in the ground-up
development of neighborhood and community shopping centers and the subsequent
sale thereof upon completion. As of December 31, 2002, KDI had in progress 19
ground-up development projects located in eight states. These projects had
substantial pre-leasing prior to the commencement of construction. During 2002,
KDI expended approximately $148.6 million in connection with the purchase of
land and construction costs related to these projects. These projects are
currently proceeding on schedule and in line with the Company's budgeted costs.
The Company anticipates its capital commitment toward these and other
development projects will be approximately $160.0 million to $200.0 million
during 2003. The proceeds from the sales of the completed ground-up development
projects during 2003 and proceeds from construction loans are expected to be
sufficient to fund these anticipated capital requirements.
KDI Acquisitions -
During the year ended December 31, 2002, KDI acquired five land parcels, in
separate transactions, for the ground-up development of shopping centers and
subsequent sales thereof upon completion for an aggregate purchase price of
approximately $21.3 million, as follows:
During January 2002, KDI acquired two land parcels, in separate transactions,
for an aggregate purchase price of approximately $6.2 million.
11
During April 2002, KDI acquired a land parcel located in Beaumont, TX for an
aggregate purchase price of approximately $2.2 million.
During May 2002, KDI acquired a land parcel located in Panama City, FL for an
aggregate purchase price of approximately $2.0 million.
During December 2002, KDI acquired a land parcel located in Woodlands, TX for an
aggregate purchase price of approximately $10.9 million.
The estimated project costs for these newly acquired parcels is approximately
$131.2 million with completion dates ranging from March 2003 to June 2005.
During 2002, the Company obtained individual construction loans on eight
ground-up development properties. Total loan commitments aggregate $119.8
million of which approximately $38.9 million has been funded as of December 31,
2002. These loans have maturities ranging from 18 to 36 months and bear interest
at rates averaging 4.38% at December 31, 2002.
KDI Dispositions -
During the year ended December 31, 2002, KDI sold four of its recently completed
projects and eight out-parcels for approximately $128.7 million, including the
assignment of approximately $17.7 million in mortgage debt encumbering one of
the properties. These sales resulted in pre-tax gains of approximately $15.9
million. Details are as follows:
During January 2002, KDI disposed of, in separate transactions, Mallwoods
Center, a completed ground-up development project located in Miamisburg, OH and
an out-parcel located in Hillsborough, NJ for an aggregate sales price of
approximately $12.6 million.
During August 2002, KDI disposed of Wakefield Crossing, a completed ground-up
development project located in Raleigh, NC, for a sales price of approximately
$10.7 million.
During September 2002, KDI disposed of Cedar Hill Crossing, a completed
ground-up development project located in Cedar Hills, TX, for a sales price of
approximately $23.7 million including the assignment of approximately $17.7
million of mortgage debt. Effective with the sale, the Company entered into a
property management agreement with the purchaser of this property. In addition
to a property management fee, the Company is entitled to certain fees which are
based on Net Cash Flows and Capital Transactions, as defined.
During December 2002, KDI disposed of an out-parcel located in Henderson, NV for
approximately $1.3 million. The property was owned through a joint venture in
which KDI has a 50% interest.
During 2002, KDI disposed of two out-parcels, located in Chandler, AZ for an
aggregate sales price of approximately $1.6 million.
During 2002, KDI disposed of, in separate transactions, Phase I and four
out-parcels of Forum at Olympia, a ground-up development project located in San
Antonio, TX, for an aggregate sales price of approximately $78.8 million.
Operating Real Estate Joint Venture Investments -
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. As of December 31, 2002, KIR
has 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. The Company has a 43.3% non-controlling limited partnership
interest in KIR and accounts for its investment under the equity method of
accounting.
During 2002, the limited partners in KIR contributed $55.0 million towards their
respective capital commitments, including $23.8 million by the Company. As of
December 31, 2002, KIR had unfunded capital commitments of $129.0 million,
including $55.9 million from the Company.
12
During 2002, KIR purchased five shopping center properties, in separate
transactions, aggregating approximately 1.8 million square feet of GLA for
approximately $213.5 million, including the assumption of approximately $63.1
million of mortgage debt encumbering two of the properties.
During July 2002, KIR disposed of a shopping center property in Aurora, IL for
an aggregate sales price of approximately $2.4 million, which represented the
approximate book value of the property.
As of December 31, 2002, the KIR portfolio was comprised of 68 shopping center
properties aggregating approximately 14.0 million square feet of GLA located in
21 states.
During 2002, KIR obtained individual non-recourse, non-cross collateralized
fixed-rate ten year mortgages aggregating approximately $170.3 million on seven
of its previously unencumbered properties with rates ranging from 5.95% to 7.38%
per annum. The net proceeds were used to finance the acquisition of various
shopping center properties.
KIR maintains a secured revolving credit facility with a syndicate of banks,
which is scheduled to expire in November 2003. This facility is collateralized
by the unfunded subscriptions of certain partners, including those of the
Company. The facility has an aggregate availability of up to $100.0 million
based upon the amount of unfunded subscription commitments of certain partners.
During January 2003, the aggregate availability under the credit facility was
reduced to $90.0 million. Under the terms of the facility, funds may be borrowed
for general corporate purposes including the acquisition of institutional
quality properties. Borrowings under the facility accrue interest at LIBOR plus
0.80%. As of December 31, 2002, there was $15.0 million outstanding under this
facility.
RioCan 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. During 2002, the RioCan venture acquired 24 shopping center
properties and four development properties, in separate transactions, comprising
approximately 5.7 million square feet of GLA for an aggregate purchase price of
approximately CAD $683.7 million (approximately USD $435.8 million) including
the assumption of approximately CAD $321.5 million (approximately USD $203.1
million) in mortgage debt encumbering 13 of the properties. The Company has
committed a total equity investment of up to CAD $250.0 million for the
acquisition of retail properties and development projects. Capital contributions
will only be required as suitable opportunities arise and are agreed to by the
Company and RioCan. As of December 31, 2002, the RioCan Venture was comprised of
28 operating properties and four development properties, consisting of
approximately 6.7 million square feet of GLA.
Kimco / G.E. Joint 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. The Company accounts for its
investment in KROP under the equity method of accounting.
During 2002, GECRE and the Company contributed approximately $39.0 million and
$9.8 million, respectively, towards their capital commitments. 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 4.25% and have
maturities of less than one year. As of December 31, 2002, KROP had outstanding
short-term interim financing to GECRE and the Company totaling $17.3 million
each.
During 2002, KROP purchased 16 shopping centers aggregating 1.6 million square
feet of GLA for approximately $177.8 million, including the assumption of
approximately $29.5 million of mortgage debt encumbering three of the
properties.
During October 2002, KROP disposed of a shopping center in Columbia, MD for an
aggregate sales price of approximately $2.9 million, which resulted in a gain of
approximately $0.7 million.
13
During 2002, KROP obtained a cross-collateralized mortgage with a five-year term
aggregating $73.0 million on eight properties with an interest rate of LIBOR
plus 1.8%. Upon the sale of one of the collateralized properties during 2002,
$1.9 million was repaid. In order to mitigate the risks of interest rate
fluctuations associated with this variable rate obligation, KROP entered into an
interest rate cap agreement for the notional value of this mortgage.
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 of shopping centers which are either owned or held under long-term
operating leases.
During 2002, the Company acquired seven former Service Merchandise locations, in
separate transactions, through a venture in which the Company has a 42.5%
non-controlling interest. These properties were purchased for an aggregate
purchase price of approximately $20.9 million. In November 2002, the joint
venture obtained mortgages on two of these locations for approximately $7.0
million. The venture has signed leases for six of these locations and is
actively negotiating with other retailers to lease the remaining location.
During July 2002, the Company acquired a property located in Kalamazoo, MI,
through a joint venture in which the Company has a 50% non-controlling interest.
The property was purchased for an aggregate purchase price of approximately $6.0
million.
During December 2002, the Company acquired an out-parcel of an existing property
located in Tampa, FL, through a joint venture in which the Company has a 50%
interest. The property was purchased for an aggregate purchase price of
approximately $4.9 million.
Other Real Estate Investments -
Montgomery Ward Asset Designation Rights -
During March 2001, the Company, through a taxable REIT subsidiary, formed a
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 leasehold positions and are scheduled to expire in December
2004 for the fee owned locations. During the marketing period, the Ward Venture
will be responsible for all carrying costs associated with the properties until
the property is designated to a user.
For the year ended December 31, 2002, the Ward Venture has completed
transactions on 32 properties and the Company has recognized pre-tax profits of
approximately $11.3 million. As of December 31, 2002, there were 12 properties
which continue to be marketed.
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 the Financial Accounting
Standards Board's ("FASB") issue of statement of Financial Accounting Standard
("SFAS") No. 13 (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.
During 2002, four of these properties were sold whereby the proceeds from the
sales were used to reduce the mortgage debt by approximately $9.6 million. As of
December 31, 2002, the remaining 26 properties were encumbered by third party
non-recourse debt of approximately $86.0 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 general obligation for principal or interest payments
on the debt, which is collateralized by a first mortgage lien on the properties
and a collateral assignment of the lease. Accordingly, this obligation has been
offset against the related net rental receivable under the lease.
14
Kmart Venture -
During July 2002, the Company, through a taxable REIT subsidiary, formed a
venture (the "Kmart Venture") in which the Company has a 60% controlling
participation for purposes of acquiring asset designation rights for 54 former
Kmart locations. The total commitment to Kmart by the Kmart Venture, prior to
the profit sharing arrangement commencing, is approximately $43.0 million. As of
December 31, 2002, the Kmart Venture has completed transactions on 35 properties
and has funded the total commitment of approximately $43.0 million to Kmart.
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 17.4 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. During December
2002, Kimsouth sold its joint venture interest in one property to its joint
venture partner for net proceeds of approximately $4.6 million and disposed of a
single property for net proceeds of approximately $2.9 million.
Preferred Equity Capital -
During 2002, the Company established a preferred equity program, which provides
capital to developers and owners of shopping centers. During 2002, the Company
provided, in separate transactions, an aggregate of approximately $25.6 million
in investment capital to developers and owners of nine shopping centers.
Mortgages and Other Financing Receivables -
During August 2001, the Company, through a joint venture in which the Company
had a 50% interest, provided $27.5 million of debtor-in-possession financing
(the "Ames Loan") to Ames Department Stores, Inc. ("Ames"), a retailer in
bankruptcy. This loan which was collateralized by all of Ames' real estate
interests, bore interest at prime plus 6.0%, and was scheduled to mature in
August 2003.
During September 2002, the Ames Loan was restructured as a two-year $100 million
secured revolving loan of which the Company has a 40.0% interest. This revolving
loan is collateralized by all of Ames' real estate interests. The loan bears
interest at 8.5% per annum and provides for contingent interest upon the
successful disposition of the Ames properties. The outstanding balance on the
revolving loan at December 31, 2002 was approximately $4.1 million.
During March 2002, the Company provided a $15.0 million three-year loan to
Gottchalks, Inc., at an interest rate of 12.0% per annum collateralized by
three properties. The Company receives interest and principal payments on a
monthly basis. As of December 31, 2002, the outstanding loan balance was
approximately $14.3 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. As of December 31, 2002, the outstanding loan balance was approximately
$49.8 million.
During May 2002, the Company provided a $15.0 million three-year loan to Frank's
Nursery & Crafts, Inc. ("Frank's"), at an interest rate of 10.25% per annum
collateralized by 40 real estate interests. Interest is payable quarterly in
arrears. An additional $7.5 million revolving loan at an interest rate of 10.25%
per annum was also established. As of December 31, 2002, there were no
borrowings outstanding on the additional revolving loan. 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.
Financing Transactions -
Unsecured Debt -
During July 2002, the Company issued an aggregate $102.0 million of unsecured
debt under its medium-term notes ("MTN") program. These issuances consisted of
(i) an $85.0 million floating-rate MTN which matures in August 2004 and bears
interest at LIBOR plus 0.50% per annum and (ii) a $17.0 million fixed-rate MTN
which matures in July 2012 and bears interest at 5.98% per annum. The proceeds
from these MTN issuances were used toward the repayment of a $110.0 million
floating-rate MTN which matured in August 2002. In addition, the Company entered
into an interest rate swap agreement on the $85.0 million floating-rate MTN
which effectively fixed the interest rate at 2.3725% per annum until November
2003.
15
During November 2002, the Company issued $35 million of 4.961% fixed-rate Senior
Notes due 2007 (the "2007 Notes"). Interest on the 2007 Notes is payable
semi-annually in arrears. Net proceeds from the issuance totaling approximately
$34.9 million, after related transaction costs of approximately $0.1 million,
were primarily used to repay outstanding borrowings on the Company's unsecured
credit facilities.
Additionally, during November 2002, the Company issued $200 million of 6.0%
fixed-rate Senior Notes due 2012 (the "2012 Notes"). Interest on the 2012 Notes
is payable semi-annually in arrears. The 2012 Notes were sold at 99.79% of par
value. Net proceeds from the issuance totaling approximately $198.3 million,
after related transaction costs of approximately $1.3 million, were primarily
used to repay outstanding borrowings on the Company's unsecured credit
facilities.
Construction Loans -
During 2002, the Company obtained construction financing on eight ground-up
development projects for an aggregate loan amount of up to $119.8 million, of
which approximately $38.9 million has been funded as of December 31, 2002. These
loans have maturities ranging from 18 to 36 months and a weighted average
interest rate of 4.38% at December 31, 2002.
Early Extinguishment of Non-Recourse Mortgages -
As part of the Company's strategy to reduce its exposure to Kmart Corporation,
the Company had previously encumbered seven Kmart sites with individual
non-recourse mortgages aggregating approximately $70.8 million. As a result of
the Kmart bankruptcy filing in January 2002 and the subsequent rejection of
leases including leases at these encumbered sites, the Company, during July
2002, had suspended debt service payments on these loans and began active
negotiations with the respective lenders.
During December 2002, the Company reached agreement with certain lenders in
connection with four of these locations. The Company paid approximately $24.2
million in full satisfaction of these loans which aggregated $46.5 million. The
Company recognized a gain on the early extinguishment of debt of approximately
$22.3 million.
Additionally, during December 2002, the Company re-tenanted one location and has
brought the mortgage loan encumbering this property current.
During February 2003, the Company reached agreement with the lender in
connection with the two remaining encumbered locations. The Company paid
approximately $8.3 million in full satisfaction of these loans which aggregated
approximately $14.7 million. The Company will recognize a gain on early
extinguishment of debt of approximately $6.2 million in the first quarter of
2003.
Credit Facilities -
The Company maintains a $250.0 million unsecured revolving credit facility (the
"Credit Facility") with a group of banks. The Credit Facility is scheduled to
mature in August 2003. The Company intends to renew this facility prior to
maturity. Under the terms of the Credit Facility, funds may be borrowed for
general corporate purposes, including (i) funding property acquisitions, (ii)
funding development and redevelopment costs and (iii) funding any short-term
working capital requirements. Interest on borrowings under the Credit Facility
accrues at a spread (currently 0.65%) to LIBOR, which fluctuates in accordance
with changes in the Company's senior debt ratings. The Company's senior debt
ratings are currently A-/stable from Standard & Poors and Baa1/stable from
Moody's Investor Services. As part of the Credit Facility, the Company has a
competitive bid option where the Company may auction up to $100.0 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 0.65%. As of December 31, 2002, there was $40.0 million outstanding
under the Credit Facility.
During July 2002, the Company further enhanced its liquidity position by
establishing an additional $150.0 million unsecured revolving credit facility.
During December 2002, the Company repaid the outstanding balance and terminated
this facility.
16
Equity -
During November 2001, the Company announced the redemption of all outstanding
depositary shares of the Company's 7-1/2% Class D Cumulative Convertible
Preferred Stock (the "Class D Preferred Stock") in exchange for shares of the
Company's common stock. The Board of Directors set January 3, 2002 as the
mandatory redemption date on which all outstanding depositary shares of Class D
Preferred Stock were redeemed. Holders of the Class D Preferred Stock on the
redemption date received 0.93168 shares of the Company's common stock, as
adjusted for the Company's three-for-two common stock split, for each depositary
share redeemed. During 2001, 3,258,642 depositary shares of the Class D
Preferred Stock were voluntarily converted to common stock by the holders. On
January 3, 2002, the remaining 923,900 depositary shares of the Class D
Preferred Stock were redeemed for common stock by the Company and a final
dividend payment of 43.4680 cents per Class D Depositary share was paid on
January 15, 2002.
During 2002, the Company issued approximately 0.4 million shares of common stock
in connection with the exercise of common stock options by employees and through
the Company's dividend reinvestment plan.
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 2.4 million downREIT units (the "Units") which are convertible
at a ratio of 1:1 into the Company's common stock. The downREIT unit holder has
the right to convert the Units at anytime 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 $33.57 per share the unit holder would be entitled to additional
shares, however, the maximum number of additional shares is limited to 251,966
based upon a floor common stock price of $30.36. The Company has the option to
settle the conversion in cash. Dividends on the Units are paid quarterly at the
rate of the Company's common stock dividend multiplied by 1.1057.
Hedging Activities -
During 2002, the Company entered into two interest rate swap agreements on its
(i) $100.0 million remarketed reset notes, which fixed the interest rate at
3.03% from November 17, 2002 through August 17, 2003, and (ii) $85.0 million
floating-rate notes, which fixed the interest rate at 2.3725% from November 2,
2002 through November 2, 2003.
Additionally, during 2002, the Company entered into various foreign currency
forward contracts and a cross currency swap aggregating approximately CAD $210.7
million and MXN $383.7 million in connection with the Company's Canadian and
Mexican real estate investments and investment in stock of RioCan. (See Note 15
of the Notes to Consolidated Financial Statements included in this annual report
on Form 10-K.)
Exchange Listings
The Company's common stock, Class A Depositary Shares, Class B Depositary Shares
and Class C Depositary Shares are traded on the NYSE under the trading symbols
"KIM", "KIMprA", "KIMprB", and "KIMprC", respectively. Trading of the Class D
Depositary Shares ceased on January 3, 2002 in connection with the Company's
mandatory redemption of such shares.
Item 2. Properties
Real Estate Portfolio As of January 1, 2003, the Company's real estate portfolio
was comprised of interests in approximately 86.5 million square feet of GLA in
530 neighborhood and community shopping center properties, two regional malls,
41 retail store leases, four parcels of undeveloped land and 22 projects under
development, located in 41 states, Canada and Mexico. The Company's portfolio
includes a 43.3% interest in 68 shopping center properties comprising
approximately 14.0 million square feet of GLA relating to KIR, a 50% interest in
28 shopping center properties comprising approximately 6.7 million square feet
of GLA relating to the RioCan Venture and a 20% interest in 15 shopping center
properties comprising approximately 1.5 million square feet of GLA relating to
KROP. Neighborhood and community shopping centers comprise the primary focus of
the Company's current portfolio, representing approximately 98% of the Company's
total shopping center GLA. As of January 1, 2003, approximately 87.8% of the
Company's neighborhood and community shopping center space (excluding the KIR
and KROP portfolios) was leased, and the average annualized base rent per leased
square foot of the neighborhood and community shopping center portfolio
(excluding the KIR and KROP portfolios) was $8.31. As of January 1, 2003, the
KIR and KROP portfolios were 97.7% and 97.4% leased, respectively, with an
average annualized base rent per leased square foot of $11.64 and $12.78,
respectively.
17
The Company's neighborhood and community shopping center properties, generally
owned and operated through subsidiaries or joint ventures, had an average size
of approximately 149,000 square feet as of January 1, 2003. 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 2002, the Company capitalized approximately $7.0 million in
connection with these property improvements and expensed to operations
approximately $15.4 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
Kmart Corporation, The Home Depot, Kohl's, TJX Companies, Wal-Mart, Best Buy,
Toys R' Us, Royal Ahold, Office Max and Petsmart.
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 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 1,879 of the Company's 6,375 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, 2002.
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, 2002. 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, 2002 to December 31, 2002, the Company increased the
average base rent per leased square foot in its portfolio of neighborhood and
community shopping centers (excluding the KIR and KROP portfolios) from $8.08 to
$8.31, an increase of $0.23. This increase primarily consists of a $0.26
increase relating to acquisitions and dispositions and a $0.13 increase relating
to new leases signed partially offset by a decrease of $0.16 relating primarily
to the impact of the Kmart bankruptcy filing and subsequent lease rejections.
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, 2002. The
Company's five largest tenants, include Kmart Corporation (see Recent
Developments - Kmart Bankruptcy), The Home Depot, Kohl's, TJX Companies and
Wal-Mart, which represent approximately 4.5%, 2.8%, 2.7%, 2.5% and 1.9%,
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.
18
Retail Store Leases In addition to neighborhood and community shopping centers,
as of January 1, 2003, the Company had interests in retail store leases totaling
approximately 3.8 million square feet of anchor stores in 41 neighborhood and
community shopping centers located in 22 states. As of January 1, 2003,
approximately 88.0% 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 $3.99 per square foot. The average annualized
base rental payments under the Company's retail store leases to the land owners
of such subleased stores is approximately $2.64 per square foot. The average
remaining primary term of the retail store leases (and, similarly, the remaining
primary terms of the sublease agreements with the tenants currently leasing such
space) is approximately 5 years, excluding options to renew the leases for terms
which generally range from 5 to 25 years. The Company's investment in retail
store leases are 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 land owner.
Ground-Up Development Properties As of January 1, 2003, the Company, through its
wholly-owned taxable REIT subsidiary, KDI, has currently in progress 19
ground-up development projects located in eight states which are held for sale
upon completion. These projects had substantial pre-leasing prior to the
commencement of construction. As of January 1, 2003, the average annual base
rent per leased square foot for the KDI portfolio was $12.68 and the average
annual base rent per leased square foot for new leases executed in 2002 was
$13.76.
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 20 to 28 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.
19
YEAR OWNERSHIP LAND LEASABLE PERCENT
DEVELOPED INTEREST/ AREA AREA LEASED
LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1)
- ---------------------------------------------------------------------------------------------------
ALABAMA
FAIRFIELD 2000 FEE 8.7 86,566 100.0
HOOVER 2000 FEE 11.5 115,347 100.0
MOBILE (9) 2002 JOINT VENTURE 52.6 525,505 71.6
ARIZONA
CHANDLER (4) 2002 JOINT VENTURE 8.4 71,000 96.0
FOUNTAIN HILLS (4) 2001 JOINT VENTURE 24.5 56,000 55.0
GILBERT (4) 2001 JOINT VENTURE 16.7 39,000 29.0
GLENDALE (7) 1998 FEE 40.5 333,388 100.0
GLENDALE 1998 JOINT VENTURE 48.2 111,825 97.0
MESA 1998 FEE 19.8 146,492 92.1
NORTH PHOENIX 1998 FEE 17.0 230,164 100.0
PEORIA (4) 2000 JOINT VENTURE 69.8 259,000 18.0
PHOENIX 1998 FEE 13.4 143,646 97.6
PHOENIX 1998 FEE 26.6 333,382 68.8
PHOENIX 1997 FEE 17.5 131,621 82.0
TEMPE 1998 JOINT VENTURE 21.1 236,015 48.2
TEMPE (5) 1998 JOINT VENTURE 20.0 - -
CALIFORNIA
ALHAMBRA 1998 FEE 18.4 200,634 77.3
ANAHEIM 1995 FEE 1.0 15,396 100.0
CARMICHAEL 1998 FEE 18.5 212,811 98.8
CHULA VISTA 1998 FEE 31.3 371,222 39.1
CORONA 1998 FEE 47.6 486,958 100.0
COVINA (7) 2000 GROUND LEASE (2024) 25.4 263,699 100.0
DALY CITY 2002 FEE 25.6 485,318 79.7
LA MIRADA 1998 FEE 31.2 288,471 84.4
MONTEBELLO (7) 2000 FEE 20.4 250,439 100.0
OXNARD (7) 1998 FEE 14.4 171,580 100.0
SAN DIEGO (7) 2000 FEE 11.2 117,410 100.0
SAN RAMON (7) 1999 FEE 5.3 42,066 100.0
SANTA ANA 1998 FEE 12.0 134,400 100.0
SANTEE 1998 FEE 10.4 103,903 96.0
SANTEE (4) 2002 JOINT VENTURE 44.0 272,000 -
STOCKTON 1999 FEE 14.6 152,919 31.2
TEMECULA (7) 1999 FEE 40.0 341,612 89.6
TORRANCE (7) 2000 FEE 26.7 266,917 97.0
COLORADO
AURORA 1998 FEE 13.8 145,754 99.4
AURORA 1998 FEE 9.9 44,174 95.1
AURORA 1998 FEE 13.9 152,981 98.6
COLORADO SPRINGS 1998 FEE 10.7 107,310 92.1
DENVER 1998 FEE 1.5 18,405 100.0
ENGLEWOOD 1998 FEE 6.5 80,330 100.0
FT. COLLINS 2000 FEE 11.8 117,862 89.8
LAKEWOOD 1998 FEE 7.6 82,581 93.5
CONNECTICUT
BRANFORD (7) 2000 FEE 19.1 191,496 96.2
ENFIELD (7) 2000 FEE 16.2 162,459 98.8
FARMINGTON 1998 FEE 16.9 184,572 100.0
HAMDEN 1967 JOINT VENTURE 31.7 341,502 95.1
NORTH HAVEN 1998 FEE 31.7 331,919 100.0
WATERBURY 1993 FEE 13.1 137,943 100.0
DELAWARE
ELSMERE 1979 GROUND LEASE (2076) 17.1 114,530 100.0
DOVER (5) 1999 JOINT VENTURE 89.0 - -
FLORIDA
ALTAMONTE SPRINGS 1998 JOINT VENTURE 19.4 271,095 66.9
ALTAMONTE SPRINGS 1995 FEE 5.6 94,193 100.0
BOCA RATON 1967 FEE 9.9 73,549 95.5
BOYNTON BEACH (7) 1999 FEE 18.0 197,362 99.0
BRADENTON 1968 JOINT VENTURE 6.2 30,938 96.8
BRADENTON 1998 FEE 19.6 162,997 90.4
BRANDON (7) 2001 FEE 29.7 143,785 100.0
CORAL SPRINGS 1994 FEE 5.9 55,597 100.0
CORAL SPRINGS 1997 FEE 9.8 86,342 98.7
EAST ORLANDO 1971 GROUND LEASE (2068) 11.6 131,981 82.5
FT. PIERCE 1970 JOINT VENTURE 14.8 210,460 99.0
HOLLYWOOD (9) 2002 JOINT VENTURE 13.5 135,056 95.3
HOLLYWOOD 2002 JOINT VENTURE 5.0 50,000 100.0
HOMESTEAD 1972 GROUND LEASE (2018)
/JOINT VENTURE 21.0 208,794 99.5
JACKSONVILLE 1999 FEE 18.6 203,536 100.0
JACKSONVILLE (9) 1987 JOINT VENTURE 7.2 72,136 98.5
JACKSONVILLE 2002 JOINT VENTURE 5.1 51,000 100.0
JENSEN BEACH 1994 FEE 20.7 173,356 97.4
JENSEN BEACH (9) 2002 JOINT VENTURE 19.8 197,731 95.0
KEY LARGO (7) 2000 FEE 21.5 207,361 97.6
KISSIMMEE 1996 FEE 18.4 130,983 98.0
LAKELAND 2001 FEE 22.9 229,383 95.3
LARGO 1968 FEE 12.0 149,472 100.0
LARGO 1992 FEE 29.4 215,916 95.7
LARGO 1993 FEE 6.6 59,730 64.3
LAUDERDALE LAKES 1968 JOINT VENTURE 10.0 115,341 98.2
LAUDERHILL 1978 FEE 17.8 181,476 91.7
LEESBURG 1969 GROUND LEASE (2017) 1.3 13,468 88.9
MARGATE 1993 FEE 34.1 260,896 94.1
MELBOURNE 1968 GROUND LEASE (2071) 11.5 168,737 97.5
MAJOR LEASES
-------------------------------------------------------------
LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION
- ----------------------------------------------------------------------------------------------
ALABAMA
FAIRFIELD TELETECH CUSTOM 2009 2029
HOOVER WAL-MART 2025 2095
MOBILE (9) WAL-MART 2006 2036
ARIZONA
CHANDLER (4) BASHAS 2022 2042
FOUNTAIN HILLS (4) WALGREENS 2078
GILBERT (4) PETER PIPER PIZZA 2013 2023
GLENDALE (7) COSTCO 2011 2046
GLENDALE SEARS 2006 2016
MESA ROSS STORES 2005
NORTH PHOENIX BURLINGTON COAT FACTORY 2013 2023
PEORIA (4) ROSS STORES 2013 2033
PHOENIX HOME DEPOT 2020 2050
PHOENIX COSTCO 2006 2041
PHOENIX SAFEWAY 2009 2039
TEMPE PETSMART 2011 2031
TEMPE (5)
CALIFORNIA
ALHAMBRA COSTCO 2027 2057
ANAHEIM
CARMICHAEL HOME DEPOT 2008 2022
CHULA VISTA COSTCO 2006 2041
CORONA COSTCO 2007 2042
COVINA (7) HOME DEPOT 2004 2034
DALY CITY BURLINGTON COAT FACTORY 2012 2022
LA MIRADA TOYS "R" US 2012 2032
MONTEBELLO (7) SEARS 2012 2062
OXNARD (7) TARGET 2008 2013
SAN DIEGO (7) LUCKY STORES 2012
SAN RAMON (7) PETCO 2012 2012
SANTA ANA HOME DEPOT 2015 2035
SANTEE OFFICE DEPOT 2006 2021
SANTEE (4)
STOCKTON OFFICE DEPOT 2005 2015
TEMECULA (7) FOOD 4 LESS 2010 2030
TORRANCE (7) LINENS N THINGS 2010 2020
COLORADO
AURORA TJ MAXX 2007 2012
AURORA
AURORA ALBERTSONS 2007 2043
COLORADO SPRINGS ALBERTSONS 2004 2034
DENVER SAV-A-LOT 2012 2027
ENGLEWOOD HOBBY LOBBY 2013 2023
FT. COLLINS KOHLS 2020 2070
LAKEWOOD SAFEWAY 2007 2032
CONNECTICUT
BRANFORD (7) KOHLS 2007 2022
ENFIELD (7) KOHLS 2021 2041
FARMINGTON SPORTS AUTHORITY 2018 2063
HAMDEN WAL-MART 2019 2039
NORTH HAVEN HOME DEPOT 2009 2029
WATERBURY STOP & SHOP 2013 2043
DELAWARE
ELSMERE VALUE CITY 2008 2038
DOVER (5)
FLORIDA
ALTAMONTE SPRINGS DSW SHOE WAREHOUSE 2012 2032
ALTAMONTE SPRINGS THOMASVILLE HOME 2011 2021
BOCA RATON WINN DIXIE 2008 2033
BOYNTON BEACH (7) ALBERTSONS 2015 2040
BRADENTON GRAND CHINA 2009 2014
BRADENTON PUBLIX 2012 2032
BRANDON (7) BED BATH & BEYOND 2005 2015
CORAL SPRINGS LINENS N THINGS 2012 2027
CORAL SPRINGS TJ MAXX 2007 2017
EAST ORLANDO SPORTS AUTHORITY 2010 2020
FT. PIERCE KMART 2006 2016
HOLLYWOOD (9) WINN-DIXIE 2011 2036
HOLLYWOOD TJ MAXX 2010
HOMESTEAD PUBLIX 2014 2034
JACKSONVILLE BURLINGTON COAT FACTORY 2008 2018
JACKSONVILLE (9) FOOD LION 2012 2042
JACKSONVILLE TJ MAXX 2010
JENSEN BEACH MARSHALLS 2005 2020
JENSEN BEACH (9) HOME DEPOT 2005 2030
KEY LARGO (7) KMART 2014 2064
KISSIMMEE KASH N KARRY 2006 2036
LAKELAND STEIN MART 2006 2026
LARGO WAL-MART 2007 2027
LARGO PUBLIX 2009 2029
LARGO
LAUDERDALE LAKES SAVE- A- LOT 2007 2017
LAUDERHILL WORLD JEWELRY CENTER 2014 2024
LEESBURG
MARGATE PUBLIX 2008 2028
MELBOURNE SUBMITTORDER CO 2010 2022
MAJOR LEASES
----------------------------------------------------------------------------------------------------
LEASE OPTION LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION
- -----------------------------------------------------------------------------------------------------------------------------------
ALABAMA
FAIRFIELD
HOOVER
MOBILE (9) KROGER 2006 SAAD'S HEALTH CARE 2004
ARIZONA
CHANDLER (4)
FOUNTAIN HILLS (4)
GILBERT (4)
GLENDALE (7) LEVITZ 2012 2032
GLENDALE MICHAELS 2008 2018 FACTORY 2U STORES 2005 2015
MESA HARKINS THEATRE 2005 2025 OUR HOME 2005 2015
NORTH PHOENIX ULTIMATE ELECTRONICS 2015 2030 MICHAELS 2007 2022
PEORIA (4) MICHAELS 2012 2032
PHOENIX JOANN FABRICS 2010 2025 AUTO ZONE 2008 2013
PHOENIX RODEO 2005 PETSMART 2003
PHOENIX PIANO WAREHOUSE 2006 2011
TEMPE STAPLES 2005 2025 GUITAR CENTER 2007 2017
TEMPE (5)
CALIFORNIA
ALHAMBRA COSTCO 2027 2057 JOANN FABRICS 2004 2019
ANAHEIM
CARMICHAEL SPORTS AUTHORITY 2009 2024 LONGS DRUG 2013 2033
CHULA VISTA
CORONA HOME DEPOT 2010 2029 LEVITZ 2009 2029
COVINA (7) STAPLES 2006 2011 PETSMART 2008 2028
DALY CITY SAFEWAY 2004 2024 WALGREENS 2007
LA MIRADA LA FITNESS 2012 2022 US POST OFFICE 2010 2020
MONTEBELLO (7) AMC THEATRES 2012 2032 TOYS "R" US 2018 2043
OXNARD (7) FOOD 4 LESS 2008 24 HOUR FITNESS 2010 2030
SAN DIEGO (7) SPORTMART 2013
SAN RAMON (7)
SANTA ANA
SANTEE ROSS STORES 2004 2024 MICHAELS 2008 2018
SANTEE (4)
STOCKTON COSTCO 2008 2033
TEMECULA (7) TJ MAXX 2006 2011 KMART 2017 2032
TORRANCE (7) MARSHALLS 2004 2019 HL TORRANCE 2011 2021
COLORADO
AURORA
AURORA
AURORA COOMER CRAFTS 2006 CROWN LIQUORS 2005 2010
COLORADO SPRINGS EL PASO COUNTY 2005
DENVER
ENGLEWOOD OLD COUNTRY BUFFET 2009 2019
FT. COLLINS
LAKEWOOD
CONNECTICUT
BRANFORD (7) SUPER FOODMART 2016 2038
ENFIELD (7) WALDBAUMS 2014 2034
FARMINGTON LINENS N THINGS 2016 2036 BORDERS BOOKS 2018 2063
HAMDEN BON-TON 2012 BOB'S STORES 2016 2036
NORTH HAVEN BJ'S 2006 2041 XPECT DISCOUNT 2008 2013
WATERBURY RAYMOUR & FLANIGAN 2017 2037
DELAWARE
ELSMERE
DOVER (5)
FLORIDA
ALTAMONTE SPRINGS MICHAELS 2005 2015 CLASSIC LEATHER 2009 2014
ALTAMONTE SPRINGS PEARL ARTS N CRAFTS 2008 2018 ORIENTAL MARKET 2012 2022
BOCA RATON
BOYNTON BEACH (7)
BRADENTON
BRADENTON TJ MAXX 2009 2019 JOANN FABRICS 2009 2024
BRANDON (7) ROSS DRESS FOR LESS 2005 2025 THOMASVILLE 2010 2020
CORAL SPRINGS
CORAL SPRINGS RAG SHOP 2006 2026 BLOCKBUSTER 2006 2016
EAST ORLANDO OFFICE DEPOT 2005 2025
FT. PIERCE WINN DIXIE 2005 2027
HOLLYWOOD (9) DOLLAR MART PLUS 2, INC. 2007 2011
HOLLYWOOD MICHAELS 2010
HOMESTEAD
MARSHALLS 2011 2026 OFFICEMAX 2013 2028
JACKSONVILLE OFFICEMAX 2012 2032 TJ MAXX 2007 2017
JACKSONVILLE (9)
JACKSONVILLE MICHAELS 2012
JENSEN BEACH
JENSEN BEACH (9) PETSMART 2009 2029
KEY LARGO (7) PUBLIX 2009 2029
KISSIMMEE OFFICEMAX 2012 2027 JOANN FABRICS 2006 2016
LAKELAND AMC THEATRES 2007 2017 ROSS STORES 2007 2012
LARGO BARGAIN BOOKS 2003
LARGO AMC THEATRES 2011 2036 OFFICE DEPOT 2004 2019
LARGO
LAUDERDALE LAKES THINK THRIFT 2007 2017
LAUDERHILL BABIES R US 2004 2014 BOARDMANS 2005 2010
LEESBURG
MARGATE OFFICE DEPOT 2005 2020 SAM ASH MUSIC 2006 2011
MELBOURNE JOANN FABRICS 2006 2016 WALGREENS 2045
20
YEAR OWNERSHIP LAND LEASABLE PERCENT
DEVELOPED INTEREST/ AREA AREA LEASED
LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1)
- ---------------------------------------------------------------------------------------------------
MELBOURNE 1994 FEE 13.8 131,851 74.8
MELBOURNE 1998 FEE 13.2 148,660 94.0
MELBOURNE (9) 1987 JOINT VENTURE 11.9 118,828 87.3
MIAMI 1968 FEE 8.2 104,968 100.0
MIAMI 1962 JOINT VENTURE 14.0 166,578 96.0
MIAMI 1986 FEE 7.8 83,380 100.0
MIAMI 1995 FEE 5.4 63,604 100.0
MIAMI 1985 FEE 15.9 108,795 100.0
MOUNT DORA 1997 FEE 12.4 118,150 100.0
OAKLAND PARK (9) 2002 JOINT VENTURE 13.2 132,226 89.3
OCALA 1997 FEE 27.2 254,459 91.4
ORLANDO (7) 2000 FEE 18.0 179,065 97.4
ORLANDO 1968 JOINT VENTURE 10.0 114,434 100.0
ORLANDO 1968 FEE 12.0 131,646 97.5
ORLANDO 1968 GROUND LEASE (2047)
/JOINT VENTURE 7.8 110,788 100.0
ORLANDO 1994 FEE 28.0 236,486 97.4
ORLANDO 1996 FEE 11.7 127,806 100.0
PALATKA 1970 FEE 8.9 82,730 85.7
PANAMA CITY (4) 2002 JOINT VENTURE 8.0 52,000 74.1
PENSACOLA (9) 2002 JOINT VENTURE 18.2 181,910 82.5
PLANTATION 1974 JOINT VENTURE 4.6 60,414 100.0
POMPANO BEACH 1968 JOINT VENTURE 6.6 66,838 100.0
PORT RICHEY (7) 1998 FEE 14.3 103,294 93.3
RIVIERA BEACH 1968 JOINT VENTURE 5.1 46,390 78.7
SANFORD 1989 FEE 40.9 155,753 98.5
SARASOTA 1970 FEE 10.0 102,485 100.0
SARASOTA 1989 FEE 12.0 128,177 88.3
ST. PETERSBURG 1968 GROUND LEASE (2084)
/JOINT VENTURE 9.0 118,979 89.9
TALLAHASSEE 1998 FEE 12.8 105,535 95.4
TALLAHASSEE (4) 2000 GROUND LEASE(2085)
/JOINT VENTURE 34.0 211,000 -
TAMPA (7) 2001 FEE 73.0 324,846 98.2
TAMPA 1997 FEE 16.3 127,837 100.0
TAMPA (4) 2001 JOINT VENTURE 30.9 79,000 -
WEST PALM BEACH (9) 2002 JOINT VENTURE 12.0 119,570 81.2
WEST PALM BEACH 1995 FEE 7.9 80,845 95.4
WEST PALM BEACH 1967 JOINT VENTURE 7.6 77,286 98.8
WINTER HAVEN 1973 JOINT VENTURE 13.9 92,428 88.9
GEORGIA
ATLANTA 1988 FEE 19.5 165,314 100.0
AUGUSTA 1995 FEE 11.3 119,930 70.8
AUGUSTA (7) 2001 FEE 24.0 533,039 99.3
GAINSVILLE 1993 JOINT VENTURE 12.6 142,468 100.0
MACON 1969 FEE 12.3 127,260 54.9
MARIETTA (9) 2002 JOINT VENTURE 15.2 151,820 93.1
SAVANNAH 1993 FEE 22.2 187,076 92.2
SAVANNAH 1995 GROUND LEASE (2045) 9.5 88,325 98.2
SNELLVILLE (7) 2001 FEE 35.6 311,164 100.0
SMYRNA (9) 2002 JOINT VENTURE 7.8 77,961 99.7
ILLINOIS
ADDISON 1968 GROUND LEASE (2066) 8.0 93,289 22.0
ADDISON 1998 FEE 16.4 115,130 -
ALTON 1986 FEE 21.2 159,824 82.1
ARLINGTON HEIGHTS 1998 FEE 7.0 80,040 -
AURORA 1998 FEE 17.9 91,182 -
BATAVIA (7) 2002 FEE 31.7 272,416 100.0
BELLEVILLE 1987 GROUND LEASE (2066) 20.3 81,490 100.0
BLOOMINGTON 1972 FEE 16.1 188,250 100.0
BRADLEY 1996 FEE 5.4 80,535 100.0
BRIDGEVIEW (6) 1998 FEE 6.8 88,069 -
CALUMET CITY 1997 FEE 17.0 197,383 33.9
CARBONDALE 1997 GROUND LEASE (2052) 8.1 80,535 100.0
CHAMPAIGN 1999 FEE 9.0 102,615 100.0
CHAMPAIGN(7) 2001 FEE 9.3 111,720 100.0
CHICAGO 1997 FEE 13.4 109,441 100.0
CHICAGO 1997 GROUND LEASE (2040) 17.5 104,264 100.0
CHICAGO 1997 FEE 6.0 86,894 100.0
CHICAGO 1988 FEE 6.4 80,842 -
COUNTRYSIDE 1997 GROUND LEASE (2053) 27.7 121,894 2.9
CRESTWOOD 1997 GROUND LEASE (2051) 36.8 79,903 100.0
CRYSTAL LAKE 1998 FEE 6.1 80,390 100.0
DOWNERS GROVE 1998 GROUND LEASE (2041) 7.2 192,639 100.0
DOWNERS GROVE 1999 FEE 24.8 144,670 100.0
DOWNERS GROVE 1997 FEE 12.0 141,906 100.0
ELGIN 1972 FEE 18.7 186,432 92.5
ELGIN 1998 FEE 9.0 100,342 -
FAIRVIEW HEIGHTS 1986 GROUND LEASE (2050) 19.1 192,073 96.6
FOREST PARK 1997 GROUND LEASE (2021) 9.3 98,371 100.0
GENEVA 1996 FEE 8.2 104,688 100.0
MATTESON 1997 FEE 17.0 136,885 91.3
MT. PROSPECT 1997 FEE 16.8 192,789 84.0
MUNDELIEN 1991 FEE 7.6 85,018 100.0
NAPERVILLE 1997 FEE 9.0 101,827 100.0
NORRIDGE 1997 GROUND LEASE (2042) 11.7 116,914 100.0
OAKLAWN 1997 FEE 15.4 165,337 100.0
OAKBROOK TERRACE 1997 FEE 15.6 165,100 100.0
ORLAND PARK 1998 FEE 7.8 166,000 100.0
ORLAND PARK 1980 FEE 18.8 131,546 100.0
OTTAWA 1970 FEE 9.0 60,000 100.0
MAJOR LEASES
-------------------------------------------------------------
LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION
- --------------------------------------------------------------------------------------------
MELBOURNE TEGGE FURNISHINGS 2005 2007
MELBOURNE KROGER 2004 2034
MELBOURNE (9) PUBLIX 2007
MIAMI KMART 2009 2029
MIAMI BABIES R US 2006 2021
MIAMI PUBLIX 2009 2029
MIAMI KIDS R US 2016 2021
MIAMI PUBLIX 2019 2039
MOUNT DORA KMART 2013 2063
OAKLAND PARK (9) WINN DIXIE 2012 2037
OCALA KMART 2006 2021
ORLANDO (7) KMART 2014 2064
ORLANDO BALLY TOTAL FITNESS 2008 2018
ORLANDO BED BATH & BEYOND 2007 2022
ORLANDO OFFICE FURNITURE 2008
ORLANDO OLD TIME POTTER 2010 2020
ORLANDO ROSS STORES 2008 2028
PALATKA SAV-A-LOT 2003 2013
PANAMA CITY (4) ROSS DRESS FOR LESS 2014 2034
PENSACOLA (9) WINN DIXIE 2012 2037
PLANTATION BREAD OF LIFE 2009 2019
POMPANO BEACH RAMP 48 2003 2009
PORT RICHEY (7) CIRCUIT CITY 2011 2031
RIVIERA BEACH GOODWILL INDUSTRIES 2005 2008
SANFORD ROSS STORES 2012 2032
SARASOTA TJ MAXX 2007 2017
SARASOTA KASH N KARRY 2020 2040
ST. PETERSBURG KASH N KARRY 2017 2037
TALLAHASSEE STEIN MART 2003 2008
TALLAHASSEE (4) BED BATH & BEYOND 2017 2032
TAMPA (7) BEST BUY 2016 2031
TAMPA STAPLES 2008 2018
TAMPA (4)
WEST PALM BEACH (9) WINN DIXIE 2017 2042
WEST PALM BEACH BABIES R US 2006 2021
WEST PALM BEACH WINN DIXIE 2010 2030
WINTER HAVEN BIG LOTS 2005 2010
GEORGIA
ATLANTA SCOTT ANTIQUES 2005
AUGUSTA TJ MAXX 2004 2014
AUGUSTA (7) SPORTS AUTHORITY 2012 2027
GAINSVILLE FARMERS FURNITURE 2008 2013
MACON FREDS STORES 2004 2014
MARIETTA (9) GREAT ATLANTIC & PACIFIC 2004 2024
SAVANNAH BED BATH & BEYOND 2013 2028
SAVANNAH MEDIA PLAY 2006 2021
SNELLVILLE (7) KOHLS 2022 2062
SMYRNA (9) INGLES GROCERY 2012
ILLINOIS
ADDISON
ADDISON
ALTON VALUE CITY 2008 2023
ARLINGTON HEIGHTS
AURORA
BATAVIA (7) KOHLS 2019 2049
BELLEVILLE KMART 2024 2054
BLOOMINGTON SCHNUCK MARKETS 2004 2024
BRADLEY CARSON PIRIE SCOTT 2014 2034
BRIDGEVIEW (6)
CALUMET CITY MARSHALLS 2008
CARBONDALE K'S MERCHANDISE 2012 2052
CHAMPAIGN K'S MERCHANDISE 2014 2034
CHAMPAIGN(7) BEST BUY 2016 2031
CHICAGO
CHICAGO GOLDBLATT'S 2005 2025
CHICAGO
CHICAGO
COUNTRYSIDE
CRESTWOOD KMART 2024 2051
CRYSTAL LAKE HOBBY LOBBY 2009 2019
DOWNERS GROVE RHODES FURNITURE 2008 2018
DOWNERS GROVE DOMINICK'S 2004 2019
DOWNERS GROVE TJ MAXX 2009 2024
ELGIN ELGIN MALL 2013 2023
ELGIN
FAIRVIEW HEIGHTS OFFICEMAX 2015 2025
FOREST PARK KMART 2021
GENEVA GANDER MOUNTAIN CO. 2013 2028
MATTESON MARSHALLS 2005 2010
MT. PROSPECT HOBBY LOBBY 2016 2026
MUNDELIEN BURLINGTON COAT FACTORY 2018 2033
NAPERVILLE BURLINGTON COAT FACTORY 2018 2033
NORRIDGE KMART 2024 2042
OAKLAWN KMART 2024 2054
OAKBROOK TERRACE LINENS N THINGS 2017 2032
ORLAND PARK RHODES FURNITURE 2008 2018
ORLAND PARK VALUE CITY 2015 2030
OTTAWA VALUE CITY 2006 2011
MAJOR LEASES
----------------------------------------------------------------------------------------------------
LEASE OPTION LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION
- ----------------------------------------------------------------------------------------------------------------------------------
MELBOURNE GOODWILL INDUSTRIES 2004 2010 SAVE-A-LOT 2013 2023
MELBOURNE BED BATH & BEYOND 2013 2028
MELBOURNE (9) WALGREENS 2027
MIAMI FLEMING COMPANIES 2003 2008 WALGREENS 2009
MIAMI FIRESTONE 2003 2009
MIAMI WALGREENS 2018
MIAMI PARTY CITY 2007 2017
MIAMI WALGREENS 2058
MOUNT DORA
OAKLAND PARK (9) U.S. POST OFFICE 2006 2006
OCALA SUPERX DRUGS 2006 2021
ORLANDO (7) PUBLIX 2012 2037
ORLANDO JOANN FABRICS 2006 2011 PARTY CITY 2005 2015
ORLANDO BOOKS-A-MILLION 2006 2016 OFFICEMAX 2008 2023
ORLANDO HOUSE OF HOPE 2003
ORLANDO SPORTS AUTHORITY 2011 2031 SAND LAKE 7 THEATRE 2007 2012
ORLANDO BIG LOTS 2004 2009 WORLD GYM 2010 2020
PALATKA BIG LOTS 2007 2017
PANAMA CITY (4) BED BATH & BEYOND 2013 2028
PENSACOLA (9) GULF POWER COMPANY 2005 BEALLS OUTLET 2006 2016
PLANTATION WHOLE FOODS 2009 2019
POMPANO BEACH
PORT RICHEY (7) STAPLES 2006 2011 MICHAELS 2006
RIVIERA BEACH
SANFORD OFFICE DEPOT 2009 2019 ECKERD 2005 2025
SARASOTA OFFICEMAX 2009 2024 FRANKS NURSERY 2012 2032
SARASOTA ANTHONY'S LADIES WEAR 2007 2017 PET SUPERMARKET 2008 2013
ST. PETERSBURG TJ MAXX 2007 2012 BARGAIN BOOKS 2003
TALLAHASSEE
TALLAHASSEE (4) MARSHALLS 2011 2021 MICHAELS 2011 2031
TAMPA (7) JOANN FABRICS 2016 2031 BED BATH & BEYOND 2015 2030
TAMPA ROSS STORES 2007 2022
TAMPA (4)
WEST PALM BEACH (9) WALGREENS 2018 2058
WEST PALM BEACH
WEST PALM BEACH
WINTER HAVEN
GEORGIA
ATLANTA
AUGUSTA ROSS STORES 2013 2033
AUGUSTA (7) MANSOUR'S 2020 2040 BED BATH & BEYOND 2013 2028
GAINSVILLE BIG LOTS 2012 OFFICE DEPOT 2004 2020
MACON ODD LOTS 2003
MARIETTA (9) WORLD'S GYM 2004
SAVANNAH TJ MAXX 2005 2015 MARSHALLS 2007 2022
SAVANNAH STAPLES 2015 2030
SNELLVILLE (7) BELK'S 2015 2035 LINENS N THINGS 2015 2030
SMYRNA (9)
ILLINOIS
ADDISON
ADDISON
ALTON
ARLINGTON HEIGHTS
AURORA
BATAVIA (7) HOBBY LOBBY 2009 2019 LINENS N THINGS 2014 2029
BELLEVILLE
BLOOMINGTON TOYS "R" US 2015 2045 BARNES & NOBLE 2005 2015
BRADLEY
BRIDGEVIEW (6)
CALUMET CITY BEST BUY 2012 2032
CARBONDALE
CHAMPAIGN
CHAMPAIGN(7) DICK'S SPORTING GOODS 2016 2031 MICHAELS 2010 2025
CHICAGO
CHICAGO JB GRUBART 2005 2013 FASHION ISLAND 2003 2013
CHICAGO
CHICAGO
COUNTRYSIDE
CRESTWOOD
CRYSTAL LAKE DINO REX II, LLC 2012 2022
DOWNERS GROVE HOME DEPOT 2022 2062
DOWNERS GROVE WALGREENS 2022
DOWNERS GROVE BEST BUY 2016 2031 BEST BUY 2012 2032
ELGIN ELGIN FARMERS PRODUCTS 2010 2030
ELGIN
FAIRVIEW HEIGHTS WALGREENS 2010 2029
FOREST PARK
GENEVA
MATTESON SPORTSMART 2014 2029 LINEN N THINGS 2014 2029
MT. PROSPECT KOHLS 2024 2054
MUNDELIEN
NAPERVILLE
NORRIDGE
OAKLAWN CHUCK E CHEESE 2007
OAKBROOK TERRACE
ORLAND PARK
ORLAND PARK
OTTAWA
21
YEAR OWNERSHIP LAND LEASABLE PERCENT
DEVELOPED INTEREST/ AREA AREA LEASED
LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1)
- --------------------------------------------------------------------------------------------------
PEORIA 1997 GROUND LEASE (2031) 20.5 156,067 100.0
ROCKFORD (6) 1998 GROUND LEASE (2030) 10.3 102,971 -
SCHAUMBURG 1998 FEE 7.3 167,690 100.0
SKOKIE 1997 FEE 5.8 58,455 100.0
SPRINGFIELD 1986 GROUND LEASE (2028) 11.6 115,526 100.0
STREAMWOOD 1999 FEE 5.6 81,000 100.0
WAUKEGAN 1998 FEE 6.8 90,555 100.0
WOODRIDGE 1998 FEE 13.1 163,573 94.7
INDIANA
EVANSVILLE 1986 FEE 14.2 193,472 85.3
EVANSVILLE 1986 FEE 11.5 149,182 26.3
FELBRAM 1970 FEE 4.1 27,400 100.0
GREENWOOD 1970 FEE 25.7 168,577 100.0
GRIFFITH 1997 GROUND LEASE (2054) 10.6 114,684 100.0
INDIANAPOLIS 1963 JOINT VENTURE 17.4 165,220 92.8
INDIANAPOLIS 1986 FEE 20.6 185,589 94.3
INDIANAPOLIS 1997 FEE 9.6 96,476 -
LAFAYETTE 1971 FEE 12.4 90,500 100.0
LAFAYETTE 1997 FEE 24.3 183,440 47.2
LAFAYETTE 1998 FEE 43.2 214,876 95.7
MISHAWAKA 1998 FEE 7.5 82,100 100.0
SOUTH BEND 1999 FEE 1.8 81,668 100.0
IOWA
CLIVE 1996 FEE 8.8 90,000 100.0
CLIVE (8) 2002 JOINT VENTURE 23.0 109,434 91.0
DES MOINES 1999 FEE 23.0 156,506 77.1
SE DES MOINES 1996 FEE 9.6 111,847 100.0
DUBUQUE 1997 GROUND LEASE (2019) 6.5 82,979 100.0
DAVENPORT 1997 GROUND LEASE (2028) 9.1 91,035 100.0
WATERLOO 1996 FEE 9.0 96,000 100.0
KANSAS
OVERLAND PARK 1980 FEE 14.5 162,982 100.0
WICHITA (7) 1998 FEE 13.5 133,771 97.3
E. WICHITA (7) 1996 FEE 6.5 96,011 100.0
W. WICHITA (7) 1996 FEE 8.1 96,319 100.0
KENTUCKY
BELLEVUE 1976 FEE 6.0 53,695 100.0
LEXINGTON 1993 FEE 35.8 258,713 100.0
HINKLEVILLE 1998 GROUND LEASE (2039) 2.0 85,229 100.0
LOUISIANA
NEW ORLEANS 1983 JOINT VENTURE 7.0 190,000 100.0
BATON ROUGE 1997 FEE 18.6 350,006 89.0
HOUMA 1999 FEE 10.1 98,586 94.4
LAFAYETTE 1997 FEE 21.9 226,933 98.1
MAINE
BANGOR 2001 FEE 8.6 86,422 100.0
MARYLAND
COLUMBIA (8) 2002 JOINT VENTURE 7.6 73,299 100.0
COLUMBIA (8) 2002 JOINT VENTURE 5.9 58,902 100.0
COLUMBIA (8) 2002 JOINT VENTURE 15.5 86,456 100.0
COLUMBIA (8) 2002 JOINT VENTURE 16.3 100,505 100.0
COLUMBIA (8) 2002 JOINT VENTURE 12.2 86,032 95.6
COLUMBIA (8) 2002 JOINT VENTURE 12.3 108,567 98.9
COLUMBIA 2002 FEE 7.3 52,291 100.0
COLUMBIA 2002 FEE 2.5 23,835 94.1
COLUMBIA (8) 2002 JOINT VENTURE 7.0 88,452 99.0
COLUMBIA 2002 FEE 6.1 58,224 100.0
COLUMBIA (8) 2002 JOINT VENTURE 15.2 101,707 100.0
COLUMBIA 2002 JOINT VENTURE 5.0 50,000 100.0
GAITHERSBURG 1989 FEE 9.0 87,061 100.0
GLEN BURNIE 1997 GROUND LEASE (2034) 6.0 60,173 100.0
HAGERSTOWN 1973 FEE 10.5 117,718 91.3
LANDOVER 1993 FEE 23.3 232,903 100.0
LAUREL 1964 FEE 8.1 75,924 100.0
LAUREL 1972 FEE 10.0 81,550 100.0
WHITE MARSH 1998 FEE 25.3 209,831 100.0
MASSACHUSETTS
FOXBOROUGH (7) 2000 FEE 11.9 118,844 98.3
GREAT BARRINGTON 1994 FEE 14.1 134,817 95.9
LEOMINSTER 1975 FEE 57.0 662,804 98.1
SHREWSBURY 1955 FEE 10.8 108,418 100.0
MICHIGAN
CLARKSTON 1996 FEE 20.0 168,102 95.7
CLAWSON 1993 FEE 13.5 179,572 100.0
FARMINGTON 1993 FEE 2.8 97,038 94.6
FLINT 1989 FEE 46.6 248,347 84.7
KALAMAZOO 2002 JOINT VENTURE 37.0 369,607 63.8
LIVONIA 1968 FEE 4.5 44,185 90.9
MUSKEGON 1985 FEE 12.2 79,215 100.0
TAYLOR 1993 FEE 13.0 141,549 100.0
WALKER 1993 FEE 41.8 338,928 100.0
MINNESOTA
MAPLE GROVE (7) 2001 FEE 63.0 466,401 100.0
MINNETONKA (7) 1998 FEE 12.1 120,220 99.0
MAPLEWOOD (8) 2002 JOINT VENTURE 8.2 96,376 95.9
MISSISSIPPI
JACKSON 2002 JOINT VENTURE 5.0 50,000 100.0
MAJOR LEASES
-------------------------------------------------------------
LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION
- ----------------------------------------------------------------------------------------------
PEORIA MARSHALLS 2009 2024
ROCKFORD (6)
SCHAUMBURG RHODES FURNITURE 2008 2018
SKOKIE MARSHALLS 2010 2025
SPRINGFIELD
STREAMWOOD VALUE CITY 2015 2030
WAUKEGAN MEGA MARTS 2009 2029
WOODRIDGE HOLLYWOOD STARDUST 2012 2022
INDIANA
EVANSVILLE BURLINGTON COAT FACTORY 2007 2027
EVANSVILLE BUEHLER FOODS 2003 2013
FELBRAM SAVE- A- LOT 2006 2016
GREENWOOD BABY SUPERSTORE 2006 2021
GRIFFITH KMART 2024 2054
INDIANAPOLIS AJ WRIGHT 2012 2027
INDIANAPOLIS TARGET 2009 2029
INDIANAPOLIS
LAFAYETTE MENARD 2006
LAFAYETTE PAYLESS SUPERMARKET 2004 2014
LAFAYETTE FAMOUS FOOTWEAR 2011 2026
MISHAWAKA K'S MERCHANDISE 2013 2023
SOUTH BEND MENARD 2010 2030
IOWA
CLIVE KMART 2021 2051
CLIVE (8) BABIES R US 2015 2040
DES MOINES BEST BUY 2008 2023
SE DES MOINES HOME DEPOT 2020 2065
DUBUQUE SHOPKO 2018 2038
DAVENPORT KMART 2024 2028
WATERLOO
KANSAS
OVERLAND PARK HOME DEPOT 2005 2050
WICHITA (7) BEST BUY 2010 2025
E. WICHITA (7) DICK'S SPORTING GOODS 2018 2033
W. WICHITA (7) SHOPKO 2018 2038
KENTUCKY
BELLEVUE KROGER 2005 2035
LEXINGTON BEST BUY 2009 2024
HINKLEVILLE K'S MERCHANDISE 2014 2039
LOUISIANA
NEW ORLEANS DILLARDS 2011 2031
BATON ROUGE BURLINGTON COAT FACTORY 2004 2024
HOUMA OLD NAVY 2009 2014
LAFAYETTE STEIN MART 2005 2020
MAINE
BANGOR BURLINGTON COAT FACTORY 2007 2032
MARYLAND
COLUMBIA (8) OLD NAVY 2008 2013
COLUMBIA (8) PARTY PARTY PARTY 2007 2012
COLUMBIA (8) GIANT FOOD 2009 2019
COLUMBIA (8) GIANT FOOD 2012 2022
COLUMBIA (8) SAFEWAY 2006
COLUMBIA (8) SAFEWAY 2018 2043
COLUMBIA GIANT FOOD 2007
COLUMBIA
COLUMBIA (8) SAFEWAY 2018 2048
COLUMBIA METRO FOOD MARKET 2018 2043
COLUMBIA (8) GIANT FOOD 2017 2027
COLUMBIA TJ MAXX 2011
GAITHERSBURG GREAT BEGINNING 2011 2021
GLEN BURNIE ROOMSTORE 2003
HAGERSTOWN TJ MAXX 2007 2017
LANDOVER RAYTHEON 2003 2015
LAUREL VILLAGE THRIFT 2004 2009
LAUREL TJ MAXX 2007 2017
WHITE MARSH COSTCO 2013 2048
MASSACHUSETTS
FOXBOROUGH (7) STOP & SHOP 2012 2022
GREAT BARRINGTON KMART 2006 2016
LEOMINSTER SEARS 2013 2033
SHREWSBURY BOB'S STORES 2018 2033
MICHIGAN
CLARKSTON FARMER JACKS 2015 2045
CLAWSON FARMER JACKS 2006 2016
FARMINGTON DAMMAN HARDWARE 2015 2030
FLINT KESSEL FOOD MARKETS 2014 2034
KALAMAZOO FRANK'S NURSERY 2007 2012
LIVONIA CENTURY 21 2005 2010
MUSKEGON PLUMB'S FOOD 2007 2022
TAYLOR KOHLS 2022 2042
WALKER RUBLOFF DEVELOPMENT 2016 2051
MINNESOTA
MAPLE GROVE (7) BYLERLY'S 2020 2035
MINNETONKA (7) TOYS "R" US 2016 2031
MAPLEWOOD (8) BEST BUY 2014 2029
MISSISSIPPI
JACKSON TJ MAXX 2014
-----------------------------------------------------------------------------------------------------
LEASE OPTION LEASE OPTION
LOCATION N TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION
- --------------------------------------------------------------------------------------------------------------------------------
PEORIA
ROCKFORD (6)
SCHAUMBURG
SKOKIE OLD NAVY 2010 2015
SPRINGFIELD
STREAMWOOD
WAUKEGAN
WOODRIDGE KOHLS 2010 2030
INDIANA
EVANSVILLE OFFICEMAX 2012 2027 MICHAELS 2004 2019
EVANSVILLE
FELBRAM
GREENWOOD TJ MAXX 2004 2010 TOYS "R" US 2011 2056
GRIFFITH
INDIANAPOLIS KROGER 2026 2066 CVS 2021 2031
INDIANAPOLIS DOLLAR TREE 2004 2014
INDIANAPOLIS
LAFAYETTE
LAFAYETTE JOANN FABRICS 2010 2020
LAFAYETTE PETSMART 2012 2032 STAPLES 2011 2026
MISHAWAKA
SOUTH BEND
IOWA
CLIVE
CLIVE (8) JOANN FABRICS 2013 2023 DAVID'S BRIDAL 2011 2021
DES MOINES OFFICEMAX 2008 2018 JOANN FABRICS 2007 2017
SE DES MOINES
DUBUQUE
DAVENPORT
WATERLOO
KANSAS
OVERLAND PARK
WICHITA (7) TJ MAXX 2004 2019 MICHAELS 2005 2025
E. WICHITA (7) GORDMANS 2012 2032
W. WICHITA (7)
KENTUCKY
BELLEVUE
LEXINGTON BED BATH & BEYOND 2013 2038 TOYS "R" US 2013 2038
HINKLEVILLE
LOUISIANA
NEW ORLEANS
BATON ROUGE STEIN MART 2006 2016 THE RUG GALLERY 2004 2009
HOUMA OFFICEMAX 2013 2028 MICHAELS 2009 2019
LAFAYETTE LINENS N THINGS 2009 2024 TJ MAXX 2003 2018
MAINE
BANGOR
MARYLAND
COLUMBIA (8)
COLUMBIA (8)
COLUMBIA (8)
COLUMBIA (8)
COLUMBIA (8)
COLUMBIA (8)
COLUMBIA
COLUMBIA
COLUMBIA (8)
COLUMBIA
COLUMBIA (8)
COLUMBIA MICHAELS 2013
GAITHERSBURG FURNITURE 4 LESS 2005 2010
GLEN BURNIE
HAGERSTOWN SUPERSHOE 2006 2016 ADVANCE AUTO 2006 2011
LANDOVER
LAUREL DOLLAR TREE 2010 2015 OLD COUNTRY BUFFET 2009 2019
LAUREL
WHITE MARSH SPORTS AUTHORITY 2011 2021 PETSMART 2010 2030
MASSACHUSETTS
FOXBOROUGH (7) OCEAN STATE JOB 2007 2022
GREAT BARRINGTON PRICE CHOPPER 2016 2036
LEOMINSTER FILENE'S 2022 2052 JC PENNEY 2009 2034
SHREWSBURY BED BATH & BEYOND 2012 2032 STAPLES 2006 2021
MICHIGAN
CLARKSTON FRANKS NURSERY 2011 2031 CVS 2005 2020
CLAWSON FRANKS NURSERY 2016 STAPLES 2011 2026
FARMINGTON
FLINT RITE AID 2003 2011 RAINBOW SHOPS 2006 2016
KALAMAZOO MARSHALLS 2010 2020 OFFICE MAX 2014 2034
LIVONIA
MUSKEGON JOANN FABRICS 2005 2012
TAYLOR BABIES R US 2017 2043
WALKER KOHLS 2017 2037 OFFICEMAX 2013 2033
MINNESOTA
MAPLE GROVE (7) BEST BUY 2015 2030 JOANN FABRICS 2010 2030
MINNETONKA (7) GOLFSMITH 2008 2018 OFFICEMAX 2006 2011
MAPLEWOOD (8) FRANKS NURSERY 2011 2031
MISSISSIPPI
JACKSON MICHAELS 2014
22
YEAR OWNERSHIP LAND LEASABLE PERCENT
DEVELOPED INTEREST/ AREA AREA LEASED
LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1)
- ---------------------------------------------------------------------------------------------------
MISSOURI
BRIDGETON 1997 GROUND LEASE (2040) 27.3 101,592 100.0
CAPE GIRARDEAU 1997 GROUND LEASE (2060) 7.0 80,803 -
CREVE COEUR 1998 FEE 12.2 113,781 81.6
ELLISVILLE 1970 FEE 18.4 118,080 100.0
HAZELWOOD (3) 1970 FEE 16.8 149,230 17.2
INDEPENDENCE 1985 FEE 21.0 184,870 100.0
JOPLIN 1998 FEE 12.6 155,416 100.0
JOPLIN (7) 1998 FEE 9.5 80,524 100.0
KANSAS CITY 1997 FEE 17.8 150,381 82.3
KIRKWOOD 1980 GROUND LEASE (2069) 19.8 204,864 100.0
LEMAY 1974 GROUND LEASE (2073) 3.1 73,281 100.0
MANCHESTER (7) 1998 FEE 9.6 89,305 100.0
SPRINGFIELD 1994 FEE 41.5 277,560 98.3
SPRINGFIELD 1986 GROUND LEASE (2087) 18.5 202,926 100.0
SPRINGFIELD (3) 2002 FEE 8.5 84,916 100.0
ST. CHARLES (5) 1998 FEE 36.9 8,000 100.0
ST. CHARLES 1999 GROUND LEASE (2039) 8.4 84,460 100.0
ST. LOUIS (3) 1972 FEE 13.1 130,096 75.0
ST. LOUIS 1986 FEE 17.5 176,333 89.6
ST. LOUIS 1997 GROUND LEASE (2025) 19.7 193,875 96.7
ST. LOUIS 1997 GROUND LEASE (2035) 37.7 174,967 83.0
ST. LOUIS 1997 GROUND LEASE (2040) 16.3 128,765 100.0
ST. PETERS 1997 FEE 14.8 176,719 23.0
NEVADA
HENDERSON (4) 1999 JOINT VENTURE 32.1 215,000 33.6
LAS VEGAS (6) (9) 2002 JOINT VENTURE 23.4 234,459 87.9
LAS VEGAS (7) 2000 FEE 22.9 234,496 51.4
LAS VEGAS 2002 FEE 15.3 156,576 100.0
NEW HAMPSHIRE
SALEM 1994 FEE 39.8 344,076 100.0
NEW JERSEY
BRIDGEWATER (7) 2001 FEE 15.8 506,545 100.0
CHERRY HILL 1985 JOINT VENTURE 18.6 124,750 85.9
CHERRY HILL 1996 GROUND LEASE (2035) 15.2 129,809 95.5
CINNAMINSON 1996 FEE 13.7 121,852 100.0
DELRAN (7) 2000 FEE 16.1 161,128 94.8
EAST WINDSOR 2002 FEE 34.8 249,029 97.5
FRANKLIN 1998 FEE 14.9 138,364 88.3
HILLSBOROUGH(4) 2001 FEE 14.5 315,000 -
HOLMDEL 2002 FEE 29.7 296,784 89.6
LINDEN 2002 1.3 13,340 100.0
NORTH BRUNSWICK 1994 FEE 38.1 409,879 100.0
PISCATAWAY 1998 FEE 9.6 97,348 95.3
PLAINFIELD (7) 1998 FEE 16.2 136,939 97.9
RIDGEWOOD 1994 FEE 2.7 24,280 100.0
WESTMONT 1994 FEE 17.4 192,380 100.0
NEW MEXICO
ALBUQUERQUE 1998 FEE 4.7 37,735 87.5
ALBUQUERQUE 1998 FEE 26.0 183,912 93.3
ALBUQUERQUE 1974 FEE 4.8 59,722 92.1
NEW YORK
BRIDGEHAMPTON 1973 FEE 30.2 287,587 99.5
BRONX 1990 JOINT VENTURE 20.8 208,149 95.2
BROOKLYN (7) 2000 FEE 8.1 80,708 100.0
BUFFALO, AMHERST 1988 JOINT VENTURE 7.5 101,066 100.0
BUFFALO 1988 JOINT VENTURE 9.2 141,077 89.6
BUFFALO 1988 JOINT VENTURE 12.0 153,125 20.1
CARLE PLACE 1993 FEE 8.3 131,452 98.4
CENTEREACH 1993 JOINT VENTURE 40.7 380,128 93.1
COMMACK 1998 GROUND LEASE(2085)
/JOINT VENTURE 35.7 265,409 100.0
COPIAGUE (7) 1998 FEE 15.4 163,999 100.0
FREEPORT (7) 2000 FEE 9.6 173,031 100.0
GLEN COVE (7) 2000 FEE 2.7 49,346 100.0
HAMPTON BAYS 1989 FEE 8.2 70,990 100.0
HEMPSTEAD (7) 2000 FEE 1.4 13,905 100.0
HENRIETTA 1988 FEE 14.9 129,238 100.0
IRONDEQUOIT 1988 FEE 12.8 17,995 100.0
LATHAM (7) 1999 FEE 60.3 616,130 100.0
MANHASSET (3) 1999 FEE 9.6 273,943 63.1
MERRICK (7) 2000 FEE 10.8 107,871 100.0
MIDDLETOWN (7) 2000 FEE 10.1 80,000 100.0
MUNSEY PARK (7) 2000 FEE 6.0 72,748 100.0
NANUET 1984 FEE 6.0 70,632 95.8
PLAINVIEW 1969 GROUND LEASE (2070) 7.0 88,222 100.0
POUGHKEEPSIE 1972 FEE 20.0 167,668 96.5
WEST GATES 1993 FEE 18.6 185,153 36.0
STATEN ISLAND (7) 2000 FEE 14.4 177,118 96.4
STATEN ISLAND 1989 FEE 16.7 210,875 100.0
STATEN ISLAND 1997 GROUND LEASE (2072) 7.0 101,337 100.0
SYOSSET 1967 FEE 2.5 32,124 100.0
YONKERS (7) 2000 GROUND LEASE(2047) 6.3 56,361 97.2
YONKERS 1995 FEE 4.4 43,560 100.0
NORTH CAROLINA
APEX (9) 2002 JOINT VENTURE 6.7 67,402 87.8
BRUNSWICK (9) (5) 2002 JOINT VENTURE 568.0 - -
CARY (7) 2001 FEE 38.6 315,797 100.0
CARY 1996 FEE 8.6 86,015 100.0
CARY 1998 FEE 10.9 102,787 95.7
MAJOR LEASES
--------------------------------------------------------------
LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION
- -----------------------------------------------------------------------------------------------
MISSOURI
BRIDGETON KOHLS 2010 2020
CAPE GIRARDEAU
CREVE COEUR KOHLS 2018 2038
ELLISVILLE SHOP N SAVE 2005 2015
HAZELWOOD (3) WALGREENS 2006
INDEPENDENCE KMART 2024 2054
JOPLIN GOODY'S FAMILY CLOTHING 2010 2015
JOPLIN (7) SHOPKO 2018 2038
KANSAS CITY HOME DEPOT 2005 2050
KIRKWOOD HEMISPHERES 2012 2022
LEMAY SHOP N SAVE 2003 2008
MANCHESTER (7) KOHLS 2018 2038
SPRINGFIELD BEST BUY 2011 2026
SPRINGFIELD OFFICE DEPOT 2005 2010
SPRINGFIELD (3) BED BATH & BEYOND 2013 2028
ST. CHARLES (5)
ST. CHARLES KOHLS 2019 2039
ST. LOUIS (3) SHOP N SAVE 2017 2082
ST. LOUIS BURLINGTON COAT FACTORY 2004 2024
ST. LOUIS WEEKENDS ONLY 2004 2009
ST. LOUIS KMART 2024 2035
ST. LOUIS KMART 2024 2040
ST. PETERS OFFICE DEPOT 2004 2009
NEVADA
HENDERSON (4) SEARS 2022 2062
LAS VEGAS (6) (9) FACTORY 2 U STORES 2004 2009
LAS VEGAS (7) ALBERTSONS 2009 2019
LAS VEGAS BEST BUY 2013 2028
NEW HAMPSHIRE
SALEM KOHLS 2008 2013
NEW JERSEY
BRIDGEWATER (7) BED BATH & BEYOND 2010 2030
CHERRY HILL SUPER G 2016 2036
CHERRY HILL KOHLS 2016 2036
CINNAMINSON ODD JOB 2009 2014
DELRAN (7) EICKHOFF SUPERMARKETS 2006 2016
EAST WINDSOR GENUARDI'S 2026 2056
FRANKLIN EDWARDS 2010 2020
HILLSBOROUGH(4) LOWES 2023 2063
HOLMDEL A&P 2013 2043
LINDEN STAUSS DISCOUNT AUTO 2023 2033
NORTH BRUNSWICK WAL-MART 2018 2058
PISCATAWAY SHOP RITE 2014 2024
PLAINFIELD (7) A&P 2018 2058
RIDGEWOOD FRESH FIELDS 2015 2030
WESTMONT SUPER FRESH 2017 2081
NEW MEXICO
ALBUQUERQUE SEARS HARDWARE 2006 2021
ALBUQUERQUE MOVIES WEST 2011 2021
ALBUQUERQUE PAGE ONE 2003 2013
NEW YORK
BRIDGEHAMPTON KMART 2019 2039
BRONX NATIONAL AMUSEMENTS 2011 2036
BROOKLYN (7) HOME DEPOT 2022 2052
BUFFALO, AMHERST TOPS SUPERMARKET 2013 2033
BUFFALO TOPS SUPERMARKET 2012 2037
BUFFALO ECKERD 2003 2018
CARLE PLACE HARROWS 2004
CENTEREACH WAL-MART 2015 2044
COMMACK KING KULLEN 2017 2047
COPIAGUE (7) HOME DEPOT 2011 2056
FREEPORT (7) STOP & SHOP 2025
GLEN COVE (7) STAPLES 2014 2029
HAMPTON BAYS MACY'S EAST, INC. 2005 2025
HEMPSTEAD (7) WALGREENS 2059
HENRIETTA JEFFERESON ROAD 2015 2025
IRONDEQUOIT STAPLES 2010 2027
LATHAM (7) SAMS CLUB 2013 2043
MANHASSET (3) FILENE'S 2006 2011
MERRICK (7) WALDBAUMS 2013 2041
MIDDLETOWN (7) BEST BUY 2016 2031
MUNSEY PARK (7) BED BATH & BEYOND 2007 2022
NANUET GMF ASSOCIATES 2012 2022
PLAINVIEW FAIRWAY STORES 2017 2037
POUGHKEEPSIE STOP & SHOP 2020 2049
WEST GATES TOPS SUPERMARKET 2004 2024
STATEN ISLAND (7) TJ MAXX 2005 2025
STATEN ISLAND KMART 2006 2011
STATEN ISLAND WALDBAUMS 2006 2031
SYOSSET NY SPORTS 2016 2021
YONKERS (7) STAPLES 2014 2029
YONKERS SHOPRITE 2008 2028
NORTH CAROLINA
APEX (9) FOOD LION 2018
BRUNSWICK (9) (5)
CARY (7) BJ'S 2020 2040
CARY BED BATH & BEYOND 2005 2014
CARY LOWES 2017 2037
MAJOR LEASES
-----------------------------------------------------------------------------------------------------
LEASE OPTION LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION
- ----------------------------------------------------------------------------------------------------------------------------------
MISSOURI
BRIDGETON
CAPE GIRARDEAU
CREVE COEUR
ELLISVILLE
HAZELWOOD (3)
INDEPENDENCE TILE SHOP 2014 2024
JOPLIN HASTINGS BOOKS 2004 2014 OFFICEMAX 2010 2025
JOPLIN (7)
KANSAS CITY
KIRKWOOD HANCOCK FABRICS 2007 2017
LEMAY ST. LOUIS SALES 2006 2011
MANCHESTER (7)
SPRINGFIELD JC PENNEY 2005 2015 TJ MAXX 2006 2021
SPRINGFIELD
SPRINGFIELD (3) MARSHALLS 2012 2027 BORDERS BOOKS 2023 2038
ST. CHARLES (5)
ST. CHARLES
ST. LOUIS (3)
ST. LOUIS ST.LOUIS CUSTOM HOT RODS 2012 OFFICE DEPOT 2005 2015
ST. LOUIS FRANKS NURSERY 2005 2015
ST. LOUIS
ST. LOUIS
ST. PETERS
NEVADA
HENDERSON (4) LEVITZ 2013 2023 INTERIOR SURRONDINGS 2008 2013
LAS VEGAS (6) (9)
LAS VEGAS (7)
LAS VEGAS BED BATH & BEYOND 2013 2028 MARSHALLS 2012 2027
NEW HAMPSHIRE
SALEM SHAWS SUPERMARKET 2008 2038 BOB'S STORES 2011 2021
NEW JERSEY
BRIDGEWATER (7) MARSHALLS 2009 2024 PETSMART 2014 2029
CHERRY HILL
CHERRY HILL SEARS HARDWARE 2003 2013
CINNAMINSON ACME MARKETS 2047
DELRAN (7)
EAST WINDSOR TJ MAXX 2011 2026 TARGET 2027 2067
FRANKLIN NY SPORTS CLUB 2006 2016
HILLSBOROUGH(4) KOHLS 2100 PATHMARK 2022 2052
HOLMDEL MARSHALLS 2004 2019 THE WIZ 2003 2018
LINDEN
NORTH BRUNSWICK BURLINGTON COAT FACTORY 2008 2013 MARSHALLS 2012 2027
PISCATAWAY
PLAINFIELD (7) SEARS HARDWARE 2008 2028 CVS 2018 2038
RIDGEWOOD
WESTMONT A & J FURNITURE OUTLET 2008 JOANN FABRICS 2010 2020
NEW MEXICO
ALBUQUERQUE
ALBUQUERQUE ROSS STORES 2006 2021 VALLEY FURNITURE 2007 2017
ALBUQUERQUE WALGREENS 2027
NEW YORK
BRIDGEHAMPTON KING KULLEN 2015 2035 TJ MAXX 2007 2017
BRONX WALDBAUMS 2011 2046 OFFICE OF HEARING 2007
BROOKLYN (7) WALGREENS 2030
BUFFALO, AMHERST
BUFFALO FASHION BUG 2005 2024
BUFFALO BIG LOTS 2004 2014
CARLE PLACE STAPLES 2010 2025 DRESS BARN 2011 2021
CENTEREACH MODELL'S 2009 2019 PARTY CITY 2007 2012
COMMACK LINENS N THINGS 2018 2038 SPORTS AUTHORITY 2017 2037
COPIAGUE (7) JACK LALANNE 2008 2018
FREEPORT (7) TOYS "R" US 2020 2040 MARSHALLS 2006 2016
GLEN COVE (7) ANNIE SEZ 2011 2026
HAMPTON BAYS GENOVESE 2006 2016
HEMPSTEAD (7)
HENRIETTA STAPLES 2010 2022
IRONDEQUOIT
LATHAM (7) WAL-MART 2013 2043 HOME DEPOT 2031 2071
MANHASSET (3)
MERRICK (7) ANNIE SEZ 2006 2021 PARTY CITY 2012 2022
MIDDLETOWN (7) LINENS N THINGS 2016 2031
MUNSEY PARK (7) FRESH FIELDS 2011 2021
NANUET
PLAINVIEW
POUGHKEEPSIE ODD LOTS 2007 2017
WEST GATES
STATEN ISLAND (7) NATIONAL LIQUIDATORS 2010 2030 MICHAELS 2006 2031
STATEN ISLAND PATHMARK 2011 2021
STATEN ISLAND
SYOSSET
YONKERS (7)
YONKERS
NORTH CAROLINA
APEX (9)
BRUNSWICK (9) (5)
CARY (7) KOHLS 2022 2101 PETSMART 2016 2036
CARY DICK'S SPORTING 2014 2029
CARY ECKERD 2007 2017
23
YEAR OWNERSHIP LAND LEASABLE PERCENT
DEVELOPED INTEREST/ AREA AREA LEASED
LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1)
- ---------------------------------------------------------------------------------------------------
CARY (9) 2002 JOINT VENTURE 18.1 181,380 77.9
CARY (9) 2002 JOINT VENTURE 14.0 139,794 93.0
CHARLOTTE 1968 FEE 13.5 110,300 95.2
CHARLOTTE 1993 FEE 14.0 139,269 99.4
CHARLOTTE 1986 GROUND LEASE(2048) 18.4 253,979 100.0
DURHAM 1996 FEE 13.2 116,186 89.2
DURHAM (9) 2002 JOINT VENTURE 13.2 131,825 98.9
DURHAM (4) 2002 JOINT VENTURE 21.3 76,000 -
DURHAM (7) 2002 FEE 39.5 408,292 100.0
GASTONIA 1989 FEE 24.9 240,957 73.7
GREENSBORO 1999 FEE 8.2 100,794 100.0
GREENSBORO (7) 1998 FEE 4.4 41,387 100.0
GREENVILLE (9) 2002 JOINT VENTURE 12.5 125,094 84.8
LENOIR (9) 2002 JOINT VENTURE 14.4 144,239 100.0
RALEIGH 1993 FEE 35.9 374,395 72.7
RALEIGH (4) 2001 JOINT VENTURE 24.4 - -
RALEIGH (4) 2001 JOINT VENTURE 8.0 - -
RALEIGH 2001 FEE 26.0 83,965 98.3
RALEIGH (9) 2002 JOINT VENTURE 11.0 110,001 82.8
RALEIGH (9) 2002 JOINT VENTURE 5.3 52,575 100.0
RALEIGH (9) 2002 JOINT VENTURE 15.2 152,273 88.0
RALEIGH (9) 2002 JOINT VENTURE 12.6 125,937 78.6
RALEIGH 1984 FEE 10.3 101,965 98.4
ROANOKE RAPIDS (9) 2002 JOINT VENTURE 4.1 41,090 100.0
WILSON (9) 2002 JOINT VENTURE 16.7 167,207 93.5
WINSTON-SALEM 1969 FEE 13.2 137,868 99.7
OHIO
AKRON 1975 FEE 6.9 76,438 100.0
AKRON 1988 FEE 24.5 138,363 100.0
AKRON 1988 FEE 12.6 149,054 -
AKRON 1988 GROUND LEASE (2012) 22.9 231,754 55.4
BARBERTON 1972 FEE 10.0 118,826 73.9
BEAVERCREEK 1986 FEE 18.2 148,210 80.6
BROOKLYN 1988 FEE 14.4 133,563 22.8
BRUNSWICK 1975 FEE 20.0 171,223 94.9
CAMBRIDGE 1997 FEE 13.1 98,533 93.5
CANTON 1993 FEE 7.9 67,589 78.9
CANTON 1972 FEE 19.6 173,069 89.4
CANTON 1988 FEE 9.2 99,267 -
CANTON 1988 GROUND LEASE (2007) 20.6 150,900 -
CENTERVILLE 1988 FEE 15.2 120,814 76.2
CINCINNATI 1988 FEE 11.6 224,758 100.0
CINCINNATI 2000 FEE 8.8 88,317 100.0
CINCINNATI (7) 2000 FEE 36.7 378,901 100.0
CINCINNATI 1988 GROUND LEASE(2054) 8.8 121,242 100.0
CINCINNATI (3) 1988 FEE 29.2 321,537 77.0
CINCINNATI 1999 FEE 16.7 89,742 100.0
CLEVELAND 1975 GROUND LEASE (2035) 9.4 69,383 74.1
COLUMBUS 1988 FEE 12.4 191,089 100.0
COLUMBUS 1988 FEE 13.7 142,743 99.2
COLUMBUS 1988 FEE 17.9 129,008 100.0
COLUMBUS 1988 FEE 12.4 135,650 100.0
COLUMBUS 1988 FEE 12.5 99,262 100.0
COLUMBUS (4) 2001 FEE 20.6 - -
COLUMBUS (7) 2002 FEE 36.5 234,702 100.0
COLUMBUS (7) 1998 FEE 12.1 113,183 100.0
DAYTON 1969 GROUND LEASE (2043) 22.8 163,131 81.6
DAYTON 1984 FEE 32.1 213,728 93.0
DAYTON 1988 FEE 16.9 141,616 100.0
MIAMISBURG 1999 FEE 0.6 12,600 100.0
DAYTON 1988 FEE 11.2 116,374 100.0
HUBER HEIGHTS (7) 1999 FEE 40.0 318,468 100.0
KENT 1988 GROUND LEASE(2013) 12.2 106,500 100.0
LIMA 1986 FEE 18.1 193,633 90.1
MENTOR 1987 FEE 20.6 103,910 58.4
MENTOR 1988 FEE 25.0 271,259 86.8
MIDDLEBURG HEIGHTS 1988 FEE 8.2 104,342 51.5
NORTH OLMSTEAD 1988 FEE 11.7 99,862 100.0
SHARONVILLE 1977 GROUND LEASE (2076)
/JOINT VENTURE 15.0 130,715 100.0
SPRINGBORO PIKE 1985 FEE 13.0 126,422 78.9
SPRINGDALE (7) 2000 FEE 22.0 243,047 89.7
SPRINGFIELD 1988 FEE 14.3 131,628 100.0
UPPER ARLINGTON 1969 FEE 13.3 160,806 91.3
WESTERVILLE 1993 FEE 25.4 242,124 87.4
WICKLIFFE 1982 FEE 10.0 128,180 100.0
WILLOUGHBY HILLS 1988 FEE 14.1 156,219 33.9
OKLAHOMA
OKLAHOMA CITY 1997 FEE 9.8 103,027 5.3
MIDWEST CITY 1998 FEE 9.7 99,433 -
NORMAN (7) 2001 FEE 31.3 262,624 100.0
OKLAHOMA CITY 1998 FEE 19.8 232,635 77.3
SOUTH TULSA 1996 FEE 8.8 100,190 4.1
PENNSLYVANIA
EXTON 1990 FEE 6.1 60,685 100.0
BLUE BELL 1996 FEE 17.7 120,211 77.7
CHIPPEWA 2000 FEE 22.4 215,206 100.0
DUQUESNE 1993 FEE 8.8 69,733 100.0
EAST NORRITON 1984 FEE 12.5 136,635 100.0
MAJOR LEASES
-------------------------------------------------------------
LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION
- --------------------------------------------------------------------------------------------
CARY (9) WELLSPRING 2013 2028
CARY (9) CARMIKE CINEMAS 2017 2027
CHARLOTTE MEDIA PLAY 2005 2020
CHARLOTTE BI-LO 2009 2029
CHARLOTTE TOYS "R" US 2012 2042
DURHAM TJ MAXX 2009 2014
DURHAM (9) KROGER 2013 2043
DURHAM (4) KROGER 2023 2053
DURHAM (7) WAL-MART 2015 2035
GASTONIA HOBBY LOBBY 2013 2023
GREENSBORO BEN FRANKLIN 2010 2020
GREENSBORO (7) STAPLES 2011 2031
GREENVILLE (9) FOOD LION 2015 2035
LENOIR (9) BI-LO 2014 2044
RALEIGH BEST BUY 2005 2020
RALEIGH (4)
RALEIGH (4)
RALEIGH KROGER 2019 2059
RALEIGH (9) LOWES 2021 2052
RALEIGH (9) BOOKS-A-MILLION 2006 2016
RALEIGH (9) FOOD LION 2014 2034
RALEIGH (9) RALEIGH ATHLETIC CLUB 2006 2030
RALEIGH HARRIS TEETER 2014 2034
ROANOKE RAPIDS (9) FOOD LION 2017 2037
WILSON (9) WINN DIXIE 2018
WINSTON-SALEM HARRIS TEETER 2016 2041
OHIO
AKRON GIANT EAGLE 2021 2041
AKRON GABRIEL BROTHER 2005 2025
AKRON
AKRON FIFTH AVENUE FLEA MARKET 2005
BARBERTON GIANT EAGLE 2027 2049
BEAVERCREEK KROGER 2018 2048
BROOKLYN ALMOST FREE 2010
BRUNSWICK KMART 2005 2050
CAMBRIDGE TRACTOR SUPPLY CO. 2010 2020
CANTON CINEMARK 2003
CANTON BURLINGTON COAT FACTORY 2018 2043
CANTON
CANTON
CENTERVILLE BED BATH & BEYOND 2017 2032
CINCINNATI LOWES 2022 2052
CINCINNATI HOBBY LOBBY 2011 2021
CINCINNATI (7) WAL-MART 2010 2040
CINCINNATI BURLINGTON COAT FACTORY 2005 2025
CINCINNATI (3) HOBBY LOBBY 2012 2022
CINCINNATI BIGGS FOODS 2008 2028
CLEVELAND
COLUMBUS KOHLS 2011 2031
COLUMBUS KOHLS 2011 2031
COLUMBUS KOHLS 2011 2031
COLUMBUS KOHLS 2011 2031
COLUMBUS SOUTHLAND EXPO 2006
COLUMBUS (4)
COLUMBUS (7) LOWES 2016 2046
COLUMBUS (7) BORDERS BOOKS 2018 2038
DAYTON BEST BUY 2004 2024
DAYTON VICTORIA'S SECRET 2004 2019
DAYTON VALUE CITY 2010 2020
MIAMISBURG
DAYTON VALUE CITY 2010 2015
HUBER HEIGHTS (7) ELDER BEERMAN 2014 2044
KENT TOPS SUPERMARKET 2026 2096
LIMA RAYS SUPERMARKET 2011 2026
MENTOR GABRIEL BROTHER 2013 2028
MENTOR GIANT EAGLE 2019 2029
MIDDLEBURG HEIGHTS GABRIEL BROTHER 2013 2028
NORTH OLMSTEAD TOPS SUPERMARKET 2026 2096
SHARONVILLE KROGER 2003 2028
SPRINGBORO PIKE RHODES FURNITURE 2013 2028
SPRINGDALE (7) WAL-MART 2015 2045
SPRINGFIELD HOBBY LOBBY 2010 2020
UPPER ARLINGTON TJ MAXX 2011 2021
WESTERVILLE KOHLS 2016 2036
WICKLIFFE GABRIEL BROTHER 2008 2023
WILLOUGHBY HILLS MARCS DRUGS 2012 2017
OKLAHOMA
OKLAHOMA CITY
MIDWEST CITY
NORMAN (7) ROSS STORES 2007 2027
OKLAHOMA CITY HOME DEPOT 2014 2044
SOUTH TULSA
PENNSLYVANIA
EXTON ACME MARKETS 2015 2045
BLUE BELL KOHLS 2016 2036
CHIPPEWA KMART 2018 2068
DUQUESNE PAT CATANS CRAFTS 2005
EAST NORRITON SHOP RITE 2017 2037
MAJOR LEASES
------------------------------------------------------------------------------------------------------
LEASE OPTION LEASE OPTION
LOCATION ON TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION
- -----------------------------------------------------------------------------------------------------------------------------------
CARY (9) GOLD'S GYM 2011 2025
CARY (9) FOOD LION 2019
CHARLOTTE TJ MAXX 2007 2017 CVS 2015 2035
CHARLOTTE PARTY CITY 2004 2014
CHARLOTTE K&G MEN'S COMPANY 2008 2018 OFFICEMAX 2009 2024
DURHAM JOANN FABRICS 2010 2020
DURHAM (9) SPA HEALTH CLUB 2009
DURHAM (4)
DURHAM (7) BEST BUY 2011 2026 LINENS N THINGS 2011 2026
GASTONIA TOYS "R" US 2015 2045 ECKERD 2005
GREENSBORO USA BABY 2008 2013
GREENSBORO (7) DAVID'S BRIDAL 2006 2026
GREENVILLE (9) PITT COUNTY HOSPITAL 2010 2025
LENOIR (9)
RALEIGH MARSHALLS 2004 2014 OFFICEMAX 2011
RALEIGH (4)
RALEIGH (4)
RALEIGH
RALEIGH (9)
RALEIGH (9)
RALEIGH (9) BIG LOTS 2006 2016 KIMBRELL'S 2003
RALEIGH (9)
RALEIGH ECKERD 2005 2015
ROANOKE RAPIDS (9)
WILSON (9)
WINSTON-SALEM DOLLAR TREE 2006 2016 SPORTSMAN'S SUPPLY
OHIO
AKRON
AKRON PAT CATANS CRAFTS 2013 ESSENCE BEAUTY MART 2008 2014
AKRON
AKRON
BARBERTON
BEAVERCREEK MOORE'S FITNESS 2007 2013 REVCO 2007 2027
BROOKLYN
BRUNSWICK GIANT EAGLE 2006 2031
CAMBRIDGE KROGER 2004 2014
CANTON DOLLAR GENERAL 2003 2012 BACKYARD ADVENTURES 2003
CANTON TJ MAXX 2007 2017 PRICELESS KIDS 2007 2012
CANTON
CANTON
CENTERVILLE ODD JOB 2007 2017 MICHAEL'S DAY SPA 2016 2026
CINCINNATI CIRCUIT CITY 2008 2031 BIG LOTS 2004 2019
CINCINNATI GOLD'S GYM 2017 2027
CINCINNATI (7) THRIFTWAY 2006 2026 DICK'S SPORTING GOODS 2016 2031
CINCINNATI TOYS "R" US 2019 2044
CINCINNATI (3) TOYS "R" US 2016 2046 OFFICE DEPOT 2004 2024
CINCINNATI
CLEVELAND
COLUMBUS TOYS "R" US 2015 2040 KROGER 2031 2071
COLUMBUS STAPLES 2010 2020
COLUMBUS GRANT/RIVERSIDE HOSP 2011
COLUMBUS CIRCUIT CITY 2019 2039
COLUMBUS
COLUMBUS (4)
COLUMBUS (7) KROGER 2017 2037
COLUMBUS (7) FRANNY'S HALLMARK 2004 2014
DAYTON BIG LOTS 2008 2018 JOANN FABRICS 2007 2012
DAYTON JOANN FABRICS 2006 2016
DAYTON CIRCUIT CITY 2018 2038 DOLLAR GENERAL 2004 2007
MIAMISBURG
DAYTON
HUBER HEIGHTS (7) KOHLS 2015 2035 MARSHALLS 2009 2024
KENT
LIMA BUCKEYE DISCOUNT 2004 2024 JOANN FABRICS 2006 2011
MENTOR
MENTOR BURLINGTON COAT FACTORY 2014 JOANN FABRICS 2009 2019
MIDDLEBURG HEIGHTS
NORTH OLMSTEAD
SHARONVILLE
SPRINGBORO PIKE OFFICEMAX 2007
SPRINGDALE (7) HH GREGG 2012 2017 OFFICEMAX 2009 2024
SPRINGFIELD
UPPER ARLINGTON PEDDLERS VILLAGE 2008 CVS 2019 2039
WESTERVILLE OFFICEMAX 2007 2022 MARC'S 2013 2023
WICKLIFFE BIG LOTS 2005 2010 DOLLAR GENERAL 2004
WILLOUGHBY HILLS
OKLAHOMA
OKLAHOMA CITY
MIDWEST CITY
NORMAN (7) BARNES & NOBLE 2012 2027 OFFICEMAX 2011 2031
OKLAHOMA CITY BEST BUY 2008 2023 GUITAR CENTER 2010 2020
SOUTH TULSA
PENNSLYVANIA
EXTON
BLUE BELL
CHIPPEWA HOME DEPOT 2018 2068
DUQUESNE RED, WHITE & BLUE 2005
EAST NORRITON STAPLES 2008 2023 JOANN FABRICS 2007 2012
24
YEAR OWNERSHIP LAND LEASABLE PERCENT
DEVELOPED INTEREST/ AREA AREA LEASED
LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1)
- ---------------------------------------------------------------------------------------------------
EAST STROUDSBURG 1973 FEE 15.3 168,506 100.0
EAGLEVILLE 1973 FEE 15.2 165,385 100.0
EASTWICK 1997 FEE 3.4 36,511 92.6
EXTON 1996 FEE 9.8 85,184 100.0
FEASTERVILLE 1996 FEE 4.6 86,575 100.0
GETTYSBURG 1986 FEE 2.3 30,706 93.8
GREENSBERG 2002 JOINT VENTURE 5.0 50,000 100.0
HARRISBURG 1972 FEE 17.0 175,917 52.4
HARRISBURG 1972 FEE 11.7 154,896 42.2
HAMBURG 2001 FEE 1.5 15,400 100.0
HAVERTOWN 1996 FEE 9.0 80,938 100.0
LANDSDALE 1996 GROUND LEASE (2037) 1.4 84,470 100.0
MONTGOMERY (7) 2002 FEE 45.0 257,565 98.8
MIDDLETOWN 1973 FEE 21.9 140,481 61.9
MIDDLETOWN 1986 FEE 4.7 38,953 83.0
NEW KENSINGTON 1986 FEE 12.5 106,624 100.0
PENN HILLS 1986 GROUND LEASE (2026) 31.1 110,517 -
PHILADELPHIA 1983 JOINT VENTURE 8.1 214,970 97.2
PHILADELPHIA 1995 JOINT VENTURE 22.6 277,533 98.7
PHILADELPHIA 1996 FEE 6.3 82,345 100.0
PHILADELPHIA 1996 GROUND LEASE (2035) 6.8 133,309 100.0
RICHBORO 1986 FEE 14.5 105,807 98.0
SCOTT TOWNSHIP 2000 GROUND LEASE (2052) 6.9 69,288 100.0
SPRINGFIELD 1983 FEE 19.7 218,907 96.9
TREXLERTOWN (6) 1998 GROUND LEASE (2048)
/J0INT VENTURE 1.2 41,680 90.8
UPPER ALLEN 1986 FEE 6.0 59,470 89.5
UPPER DARBY 1996 JOINT VENTURE 16.3 48,936 99.0
WEST MIFFLIN 1974 FEE 21.9 193,878 51.1
WEST MIFFLIN 1986 GROUND LEASE (2032) 8.3 84,279 94.0
WHITEHALL 1996 GROUND LEASE (2081) 6.0 84,524 100.0
YORK 1986 FEE 8.0 61,979 81.8
YORK 1986 FEE 13.7 59,016 95.2
YORK 1986 FEE 3.3 35,500 86.6
RHODE ISLAND
CRANSTON 1998 FEE 11.0 129,907 94.6
SOUTH CAROLINA
AIKEN 1989 FEE 3.2 11,200 33.1
CHARLESTON 1978 FEE 17.6 169,813 89.4
CHARLESTON 1995 FEE 17.2 191,140 91.8
CONWAY (9) 2002 JOINT VENTURE 5.4 54,124 100.0
FLORENCE 1997 FEE 21.0 113,922 100.0
GREENVILLE 1997 FEE 20.4 148,532 90.6
MT PLEASANT (9) 2002 JOINT VENTURE 11.6 115,632 94.3
NORTH CHARLESTON 2000 FEE 27.3 267,102 98.0
ORANGEBURG (9) 2002 JOINT VENTURE 10.7 106,617 86.5
MYRTLE BEACH (9) 2002 JOINT VENTURE 6.0 59,762 97.3
WALTERBORO (9) 2002 JOINT VENTURE 4.8 47,640 100.0
TENNESSEE
MEMPHIS 2000 FEE 8.8 87,962 100.0
CHATTANOOGA 1973 GROUND LEASE (2074) 7.6 44,288 80.3
CHATTANOOGA 2002 JOINT VENTURE 5.0 50,000 100.0
MADISON (7) 1999 FEE 21.1 189,299 97.4
MADISON 1978 GROUND LEASE (2039) 14.5 184,506 70.6
MEMPHIS (7) 2001 FEE 3.9 40,000 100.0
MEMPHIS 1991 FEE 14.7 167,243 100.0
NASHVILLE (7) 1999 FEE 9.3 99,909 97.0
NASHVILLE 1998 FEE 10.2 109,012 95.6
NASHVILLE 1986 FEE 16.9 172,135 99.1
TEXAS
AMARILLO (7) 1997 FEE 9.3 342,859 99.6
ARLINGTON (8) 2002 JOINT VENTURE 6.3 75,247 87.1
ARLINGTON 1997 FEE 8.0 96,127 100.0
AUSTIN (7) 1998 FEE 18.2 191,760 100.0
AUSTIN 1998 FEE 15.4 157,852 98.7
BAYTOWN 1996 FEE 8.7 86,240 100.0
BEAUMONT (4) 2002 FEE 11.4 46,000 -
BURLESON (4) 2000 FEE 54.6 282,000 -
DALLAS (8) 2002 JOINT VENTURE 9.6 105,195 95.2
DALLAS 2002 JOINT VENTURE 5.0 50,000 -
DALLAS (3) 1969 JOINT VENTURE 75.0 581,595 -
DALLAS (7) 1998 FEE 6.8 83,867 100.0
DUNCANVILLE 1996 FEE 6.8 96,500 -
EAST PLANO 1996 FEE 9.0 100,598 100.0
GARLAND (7) 1998 FEE 6.3 62,000 100.0
GARLAND 1996 FEE 2.9 41,364 100.0
GARLAND 1996 FEE 8.8 103,600 100.0
HOUSTON (8) 2002 FEE 8.7 95,032 98.6
HOUSTON (4) 2001 JOINT VENTURE 23.8 53,000 -
HOUSTON 1998 FEE 40.0 434,997 92.9
HOUSTON 1997 FEE 8.0 113,831 95.0
HOUSTON 1999 FEE 5.6 84,188 100.0
LEWISVILLE 1998 FEE 11.2 74,837 94.0
LEWISVILLE 1998 FEE 7.6 124,089 77.9
LEWISVILLE 1998 FEE 9.4 93,668 70.1
LUBBOCK 1998 FEE 9.6 108,326 100.0
MESQUITE 1974 FEE 9.0 79,550 100.0
MESQUITE 1998 FEE 30.0 209,579 93.5
NORTH ARLINGTON 1996 FEE 8.0 97,000 100.0
MAJOR LEASES
-------------------------------------------------------------
LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION
- --------------------------------------------------------------------------------------------
EAST STROUDSBURG KMART 2007 2022
EAGLEVILLE KMART 2004 2019
EASTWICK MERCY HOSPITAL 2012 2022
EXTON KOHLS 2016 2036
FEASTERVILLE VALUE CITY 2011 2026
GETTYSBURG GIANT FOOD 2005 2010
GREENSBERG TJ MAXX 2010
HARRISBURG MEDIA PLAY 2011 2026
HARRISBURG BIG LOTS 2015 2045
HAMBURG LEHIGH HIGH VALLEY HEALTH 2016 2026
HAVERTOWN KOHLS 2016 2036
LANDSDALE KOHLS 2012
MONTGOMERY (7) GIANT FOOD 2020 2050
MIDDLETOWN SHARP SHOPPER 2010 2015
MIDDLETOWN US POST OFFICE 2016 2026
NEW KENSINGTON GIANT EAGLE 2006 2026
PENN HILLS
PHILADELPHIA JC PENNEY 2012 2037
PHILADELPHIA PETSMART 2006 2016
PHILADELPHIA KOHLS 2016 2036
PHILADELPHIA
RICHBORO SUPER FRESH 2018 2058
SCOTT TOWNSHIP WAL-MART 2015 2052
SPRINGFIELD VALUE CITY 2013 2043
TREXLERTOWN (6) LEHIGH VALLEY HEALTH 2008 2023
UPPER ALLEN GIANT FOOD 2010 2030
UPPER DARBY MERCY HOSPITAL 2012 2022
WEST MIFFLIN GIANT EAGLE 2014 2039
WEST MIFFLIN
WHITEHALL KOHLS 2016 2036
YORK SUPERPETZ PET 2004 2009
YORK GIANT FOOD 2006 2026
YORK GIANT FOOD 2007 2017
RHODE ISLAND
CRANSTON BOB'S STORES 2008 2028
SOUTH CAROLINA
AIKEN
CHARLESTON STEIN MART 2006 2016
CHARLESTON TJ MAXX 2009 2014
CONWAY (9) FOOD LION 2017
FLORENCE HAMRICKS 2006 2011
GREENVILLE RHODES FURNITURE 2005 2020
MT PLEASANT (9) STAPLES 2012
NORTH CHARLESTON SPORTS AUTHORITY 2013 2033
ORANGEBURG (9) BI-LO 2011 2031
MYRTLE BEACH (9) FOOD LION 2014 2020
WALTERBORO (9) FOOD LION 2018 2038
TENNESSEE
MEMPHIS OLD TIME POTTER 2010 2025
CHATTANOOGA ECHOLS FURNITURE 2003
CHATTANOOGA TJ MAXX 2010
MADISON (7) SPORTS AUTHORITY 2013 2028
MADISON OLD TIME POTTER 2003 2006
MEMPHIS (7) BED BATH & BEYOND 2012 2027
MEMPHIS TOYS "R" US 2017 2042
NASHVILLE (7) BEST BUY 2014 2029
NASHVILLE MARSHALLS 2007
NASHVILLE STEIN MART 2003 2013
TEXAS
AMARILLO (7) HOME DEPOT 2019 2069
ARLINGTON (8) TJ MAXX 2005 2015
ARLINGTON HOBBY LOBBY 2008 2018
AUSTIN (7) CIRCUIT CITY 2017 2037
AUSTIN HEB GROCERY 2006 2026
BAYTOWN HOBBY LOBBY 2008 2018
BEAUMONT (4) BED BATH & BEYOND 2013 2033
BURLESON (4) KOHLS 2023
DALLAS (8) TOM THUMB 2017 2032
DALLAS
DALLAS (3)
DALLAS (7) ROSS STORES 2007 2017
DUNCANVILLE
EAST PLANO HOME DEPOT EXPO 2024 2054
GARLAND (7) MJ DESIGNS 2012 2022
GARLAND KROGER 2005 2025
GARLAND
HOUSTON (8) MARSHALLS 2008 2023
HOUSTON (4) ROSS STORES 2013 2033
HOUSTON OSHMAN SPORTING 2009 2024
HOUSTON HEB PANTRY STORE 2007 2027
HOUSTON OFFICE DEPOT 2007 2022
LEWISVILLE BALLY TOTAL FITNESS 2007 2022
LEWISVILLE BABIES R US 2009 2027
LEWISVILLE DSW SHOE WAREHOUSE 2008 2028
LUBBOCK PETSMART 2015 2040
MESQUITE KROGER 2012 2037
MESQUITE BEST BUY 2009 2024
NORTH ARLINGTON
MAJOR LEASES
-----------------------------------------------------------------------------------------------------
LEASE OPTION LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION
- ----------------------------------------------------------------------------------------------------------------------------------
EAST STROUDSBURG WEIS MARKETS 2005 2010
EAGLEVILLE SAFEWAY 2011 2025
EASTWICK
EXTON
FEASTERVILLE
GETTYSBURG
GREENSBERG MICHAELS 2010
HARRISBURG SUPERPETZ 2007 2022
HARRISBURG
HAMBURG
HAVERTOWN
LANDSDALE
MONTGOMERY (7) BED BATH & BEYOND 2016 2030 COMP USA 2014 2028
MIDDLETOWN ELECTRONICS INSTITUTE 2003 CVS 2008
MIDDLETOWN
NEW KENSINGTON
PENN HILLS
PHILADELPHIA TOYS "R" US 2007 2052
PHILADELPHIA AMC THEATERS 2003 2023 PEP BOYS 2004 2014
PHILADELPHIA
PHILADELPHIA
RICHBORO
SCOTT TOWNSHIP
SPRINGFIELD STAPLES 2008 2023 JOANN FABRICS 2006 2016
TREXLERTOWN (6)
UPPER ALLEN CVS 2008
UPPER DARBY ALLEGHENY CHILD CARE 2012 2022
WEST MIFFLIN
WEST MIFFLIN
WHITEHALL
YORK ECKERD 2004
YORK CVS 2005 2020
YORK
RHODE ISLAND
CRANSTON MARSHALLS 2011 2021
SOUTH CAROLINA
AIKEN
CHARLESTON BY THE YARD 2006 2017 GCO CARPET 2012
CHARLESTON OFFICE DEPOT 2006 2016 MARSHALLS 2006 2011
CONWAY (9)
FLORENCE STAPLES 2010 2035 ATHLETE'S FOOT 2007 2017
GREENVILLE BABIES R US 2007 2022
MT PLEASANT (9)
NORTH CHARLESTON MARSHALLS 2003 2013 TJ MAXX 2003 2008
ORANGEBURG (9)
MYRTLE BEACH (9)
WALTERBORO (9)
TENNESSEE
MEMPHIS
CHATTANOOGA
CHATTANOOGA MICHAELS 2017
MADISON (7) BEST BUY 2014 2029 GOODY'S FAMILY CLOTHING 2010 2020
MADISON
MEMPHIS (7)
MEMPHIS OFFICEMAX 2008 2028 JUST FOR FEET 2015 2025
NASHVILLE (7) OFFICEMAX 2015 2035
NASHVILLE OFFICEMAX 2004 2019 OLD COUNTRY BUFFET 2006 2016
NASHVILLE ASHLEY FURNITURE 2012 2022 BED BATH & BEYOND 2013 2028
TEXAS
AMARILLO (7) CIRCUIT CITY 2010 2035 PETSMART 2015 2035
ARLINGTON (8)
ARLINGTON
AUSTIN (7) BABIES R US 2012 2027 WORLD MARKET 2011 2026
AUSTIN DANCE SPACE 2006 2011
BAYTOWN ROSS STORES 2012 2032
BEAUMONT (4)
BURLESON (4) ROSS STORES 2013 2033 LINENS N THINGS 2013 2028
DALLAS (8)
DALLAS
DALLAS (3)
DALLAS (7) KMART 2009 2024 BIG LOTS 2012 2032
DUNCANVILLE
EAST PLANO
GARLAND (7) OFFICE DEPOT 2006 2021
GARLAND
GARLAND
HOUSTON (8)
HOUSTON (4)
HOUSTON HOBBY LOBBY 2012 2022 BED BATH & BEYOND 2009 2019
HOUSTON PALAIS ROYAL 2007 2022
HOUSTON METROPOLITAN FURNITURE 2013 2023 JUST FOR FEET 2013 2023
LEWISVILLE TALBOTS OUTLET 2007 2017
LEWISVILLE BED BATH & BEYOND 2018 2033
LEWISVILLE PETLAND 2009 2019
LUBBOCK OFFICEMAX 2009 2029 BARNES & NOBLE 2010 2025
MESQUITE
MESQUITE ASHLEY FURNITURE 2007 2017 PETSMART 2007 2027
NORTH ARLINGTON
25
YEAR OWNERSHIP LAND LEASABLE PERCENT
DEVELOPED INTEREST/ AREA AREA LEASED
LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1)
- ---------------------------------------------------------------------------------------------------
NORTH RICHLAND HILLS 1997 FEE 9.2 - -
PASADENA (7) 1999 FEE 15.1 169,203 100.0
PASADENA (7) 2001 FEE 24.6 241,172 93.7
RICHARDSON (7) 1998 FEE 11.7 115,579 100.0
SAN ANTONIO (4) 1999 FEE 6.1 69,000 -
WEST OAKS - HOUSTON 1996 FEE 8.2 96,500 100.0
HOUSTON (7) 2002 FEE 54.0 585,901 96.9
WOODLANDS (4) 2002 JOINT VENTURE 34.5 104,000 -
UTAH
OGDEN 1967 FEE 11.4 121,449 85.2
VIRGINIA
BROOKNEAL (9) 2002 JOINT VENTURE 2.8 28,161 88.8
BLACKSBURG (9) 2002 JOINT VENTURE 16.7 167,461 100.0
COLONIAL HEIGHTS 1996 FEE 6.1 60,909 100.0
DANVILLE (9) 2002 JOINT VENTURE 5.6 55,909 97.9
FAIRFAX (7) 1998 FEE 37.0 323,262 100.0
HARRISONBURG 1993 FEE 3.1 31,111 100.0
HARRISONBURG (9) 2002 JOINT VENTURE 14.0 139,956 52.2
KEYSVILLE (9) 2002 JOINT VENTURE 4.0 40,227 91.2
MANASSAS 1997 FEE 13.5 117,525 100.0
PETERSBURG (9) 2002 JOINT VENTURE 5.0 50,280 87.1
RICHMOND 1995 FEE 11.5 128,612 100.0
RICHMOND 2002 FEE 8.5 84,683 100.0
ROANOKE (9) 2002 JOINT VENTURE 30.2 301,561 66.9
WOODBRIDGE 1973 GROUND LEASE(2072)
/JOINT VENTURE 19.6 189,563 94.6
WOODBRIDGE (7) 1998 FEE 54.0 495,347 97.2
WASHINGTON
BELLINGHAM (7) 1998 FEE 20.0 188,885 97.9
FEDERAL WAY (7) 2000 FEE 17.0 200,209 97.6
MARYSVILLE (8) 2002 JOINT VENTURE 15.5 226,038 100.0
SPOKANE (8) 2002 JOINT VENTURE 13.0 129,785 97.2
WEST VIRGINIA
CHARLES TOWN 1985 FEE 22.0 208,048 100.0
SOUTH CHARLESTON 1999 FEE 14.8 188,589 87.5
MARTINSBURG 1986 FEE 6.0 43,212 100.0
WISCONSIN
RACINE 1988 FEE 14.2 157,150 92.6
CANADA
ALBERTA
SHOPPES @ SHAWNESSEY 2002 JOINT VENTURE 16.30 163,000 100.0
SHAWNESSY CENTRE 2002 JOINT VENTURE 30.64 306,368 100.0
BRENTWOOD 2002 JOINT VENTURE 31.49 314,862 98.2
SOUTH EDMONTON COMMON 2002 JOINT VENTURE 29.17 291,695 100.0
SOUTH EDMONTON
PHASE II (4) 2002 JOINT VENTURE 1.30 - -
GRANDE PRAIRIE III 2002 JOINT VENTURE 6.34 63,413 100.0
BRITISH COLUMBIA
TILLICUM 2002 JOINT VENTURE 41.18 411,781 98.0
PRINCE GEORGE 2001 JOINT VENTURE 37.27 372,725 92.6
STRAWBERRY HILL 2002 JOINT VENTURE 33.03 330,317 99.2
MISSION 2001 JOINT VENTURE 25.65 256,547 96.3
ABBOTSFORD 2002 JOINT VENTURE 19.86 198,574 100.0
CLEARBROOK 2001 JOINT VENTURE 18.83 188,252 91.6
SURREY 2001 JOINT VENTURE 17.08 170,766 97.3
LANGLEY GATE 2002 JOINT VENTURE 15.18 151,802 97.0
ONTARIO
SHOPPERS WORLD ALBION 2002 JOINT VENTURE 34.32 343,207 97.5
SHOPPERS WORLD DANFORTH 2002 JOINT VENTURE 32.38 323,769 99.2
THICKSON RIDGE 2002 JOINT VENTURE 32.25 322,464 100.0
LINCOLN FIELDS 2002 JOINT VENTURE 28.76 287,566 97.9
404 TOWN CENTRE 2002 JOINT VENTURE 24.94 249,426 100.0
BOULEVARD CENTRE I 2002 JOINT VENTURE 21.74 217,446 100.0
BOULEVARD CENTRE II 2002 JOINT VENTURE - - -
KENDALWOOD 2002 JOINT VENTURE 15.44 154,445 99.3
SUDBURY 2002 JOINT VENTURE 15.22 152,175 100.0
LEASIDE 2002 JOINT VENTURE 13.30 133,035 100.0
WALKER PLACE 2002 JOINT VENTURE 6.99 69,857 97.3
BOULEVARD III (4) 2002 JOINT VENTURE 4.86 - -
NEW MARKET (4) 2002 JOINT VENTURE 15.41 - -
DUFFERIN (4) 2002 JOINT VENTURE 9.95 - -
PRINCE EDWARD ISLAND
CHARLOTTETOWN 2002 JOINT VENTURE 39.00 390,027 98.4
QUEBEC
GREENFIELD PARK 2002 JOINT VENTURE 37.47 374,693 92.0
JACQUES CARTIER 2002 JOINT VENTURE 21.26 212,628 93.4
CHATEAUGUAY 2002 JOINT VENTURE 21.16 211,556 98.0
MEXICO
SALTILLO PLAZA 2002 FEE 17.41 174,079 99.5
NUEVO LEON 2002 FEE 12.00 120,050 95.7
-----------------------
-----------------------
TOTAL 558 PROPERTY
INTERESTS 9,590 82,671,015
-----------------------
-----------------------
MAJOR LEASES
-------------------------------------------------------------
LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION
- ---------------------------------------------------------------------------------------------
NORTH RICHLAND HILLS
PASADENA (7) PETSMART 2015 2030
PASADENA (7) BEST BUY 2012 2027
RICHARDSON (7) OFFICEMAX 2011 2026
SAN ANTONIO (4) HOBBY LOBBY 2018 2033
WEST OAKS - HOUSTON
HOUSTON (7) LOEWS THEATRES 2017 2047
WOODLANDS (4)
UTAH
OGDEN
VIRGINIA
BROOKNEAL (9) FOOD LION 2018 2038
BLACKSBURG (9) VIRGINIA TECH 2007
COLONIAL HEIGHTS BLOOM BROS 2008
DANVILLE (9) FOOD LION 2014
FAIRFAX (7) HOME DEPOT 2013 2033
HARRISONBURG STAPLES 2004 2014
HARRISONBURG (9) FARMER JACK 2007 2037
KEYSVILLE (9) FOOD LION 2018 2038
MANASSAS SUPER FRESH 2006 2026
PETERSBURG (9) FOOD LION 2011 2031
RICHMOND BURLINGTON COAT FACTORY 2006 2035
RICHMOND BLOOM BROTHERS FURNITURE 2013 2023
ROANOKE (9) HEIRONIMUS 2004 2008
WOODBRIDGE
CAMPOS FURNITURE 2003
WOODBRIDGE (7) LOWES 2012 2032
WASHINGTON
BELLINGHAM (7) BON HOME STORE 2012 2022
FEDERAL WAY (7) ASSOCIATED 2015 2045
MARYSVILLE (8) GOTTSCHALKS 2008 2018
SPOKANE (8) BED BATH & BEYOND 2011 2026
WEST VIRGINIA
CHARLES TOWN WAL-MART 2017 2047
SOUTH CHARLESTON KROGER 2008 2038
MARTINSBURG GIANT FOOD 2010 2030
WISCONSIN
RACINE PIGGLY WIGGLY 2003 2009
CANADA
ALBERTA
SHOPPES @ SHAWNESSEY ZELLERS 2011 2096
SHAWNESSY CENTRE FUTURE SHOP (BEST BUY) 2009 2024
BRENTWOOD CANADA SAFEWAY 2007 2037
SOUTH EDMONTON COMMON HOME OUTFITTERS 2016 2031
SOUTH EDMONTON
PHASE II (4)
GRANDE PRAIRIE III MICHAELS 2011 2031
BRITISH COLUMBIA
TILLICUM ZELLERS 2013 2098
PRINCE GEORGE OVERWAITEE 2018 2028
STRAWBERRY HILL HOME DEPOT 2016 2016
MISSION OVERWAITEE 2018 2028
ABBOTSFORD ZELLERS 2017 2052
CLEARBROOK SAFEWAY 2007 2037
SURREY CANADA SAFEWAY 2011 2061
LANGLEY GATE SEARS 2008 2018
ONTARIO
SHOPPERS WORLD ALBION CANADIAN TIRE 2014 2025
SHOPPERS WORLD DANFORTH ZELLERS 2009 2029
THICKSON RIDGE WINNERS (TJ MAXX) 2012 2022
LINCOLN FIELDS WAL MART 2005 2025
404 TOWN CENTRE ZELLERS 2009
BOULEVARD CENTRE I ZELLERS 2017 2046
BOULEVARD CENTRE II
KENDALWOOD PRICE CHOPPER 2013 2038
SUDBURY FAMOUS PLAYERS 2019 2039
LEASIDE CANADIAN TIRE 2006 2036
WALKER PLACE COMMISSO'S 2012 2032
BOULEVARD III (4)
NEW MARKET (4)
DUFFERIN (4)
PRINCE EDWARD ISLAND
CHARLOTTETOWN ZELLERS 2019
QUEBEC
GREENFIELD PARK WINNERS (TJ MAXX) 2005 2020
JACQUES CARTIER GUZZO CINEMA 2010 2040
CHATEAUGUAY SUPER C 2008 2028
MEXICO
SALTILLO PLAZA HEB
NUEVO LEON HEB
MAJOR LEASES
-----------------------------------------------------------------------------------------------------
LEASE OPTION LEASE OPTION
LOCATION N TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION
- -----------------------------------------------------------------------------------------------------------------------------------
NORTH RICHLAND HILLS
PASADENA (7) OFFICEMAX 2014 2029 MICHAELS 2009 2024
PASADENA (7) ROSS STORES 2012 2032 MARSHALLS 2012 2027
RICHARDSON (7) BALLY TOTAL FITNESS 2009 2019 NORTHERN STORES 2004 2014
SAN ANTONIO (4)
WEST OAKS - HOUSTON
HOUSTON (7) OSHMAN SPORTING 2017 2037 HOBBY LOBBY 2016 2026
WOODLANDS (4)
UTAH
OGDEN
VIRGINIA
BROOKNEAL (9)
BLACKSBURG (9) VTWC INC. 2008 VOLUME TWO BOOKSTORE 2005
COLONIAL HEIGHTS BOOKS-A-MILLION 2008 2015
DANVILLE (9) CVS 2004 2019
FAIRFAX (7) COSTCO 2011 2046 SPORTS AUTHORITY 2003 2013
HARRISONBURG CIRCUIT CITY 2003 2013
HARRISONBURG (9) CVS 2007 2017
KEYSVILLE (9)
MANASSAS JOANN FABRICS 2003 2013
PETERSBURG (9)
RICHMOND
RICHMOND
ROANOKE (9) MICHAEL'S 2004 2019 OFFICE MAX 2007 2012
WOODBRIDGE TJ MAXX 2006 2021
WOODBRIDGE (7) SHOPPERS FOOD 2009 2044 BORDERS BOOKS 2019 2039
WASHINGTON
BELLINGHAM (7) BED BATH & BEYOND 2012 2027 TJ MAXX 2007 2012
FEDERAL WAY (7) JOANN FABRICS 2010 2030 BARNES & NOBLE 2011 2026
MARYSVILLE (8) JC PENNEY 2011 2046 STAPLES 2014 2029
SPOKANE (8) ROSS STORE 2009 2019 RITE AID 2009 2039
WEST VIRGINIA
CHARLES TOWN STAPLES 2008 2018
SOUTH CHARLESTON TJ MAXX 2006 2021 KRISPY KREME 2006 2026
MARTINSBURG CVS 2003 2008
WISCONSIN
RACINE BIG LOTS 2005 2015 HOBO 2004 2014
CANADA
ALBERTA
SHOPPES @ SHAWNESSEY
SHAWNESSY CENTRE LINEN N THINGS 2015 2025 BUSINESS DEPOT (STAPLES) 2011 2028
BRENTWOOD SEARS WHOLE HOME 2010 2020 LINEN N THINGS 2015 2030
SOUTH EDMONTON COMMON LONDON DRUGS 2020 2057 MICHAELS 2011 2026
SOUTH EDMONTON
PHASE II (4)
GRANDE PRAIRIE III WINNERS (TJ MAXX) 2011 2026 JYSK LINEN 2012 2022
BRITISH COLUMBIA
TILLICUM SAFEWAY 2023 2053 WINNERS (TJ MAXX) 2008 2023
PRINCE GEORGE THE BAY 2013 2083 LONDON DRUGS 2017 2027
STRAWBERRY HILL CINEPLEX ODEON 2008 2018 WINNERS (TJ MAXX) 2009 2024
MISSION FAMOUS PLAYERS 2010 2030 LONDON DRUGS 2019 2046
ABBOTSFORD PETSMART 2013 2033 WINNERS (TJ MAXX) 2008 2023
CLEARBROOK STAPLES 2012 2022 LANDMARK CINEMAS 2011 2021
SURREY LONDON DRUGS 2011 2021
LANGLEY GATE PETSMART 2008 2038 WINNERS (TJ MAXX) 2007 2017
ONTARIO
SHOPPERS WORLD ALBION FORTINO'S 2010 2030
SHOPPERS WORLD DANFORTH DOMINION 2018 2028 BUSINESS DEPOT (STAPLES) 2015 2030
THICKSON RIDGE FUTURE SHOP (BEST BUY) 2006 2016 PETSMART 2012 2032
LINCOLN FIELDS LOEB (GROUND) 2004 2019 CAA OTTAWA 2007 2015
404 TOWN CENTRE A & P 2007 2027 NATIONAL GYM CLOTHING 2009 2014
BOULEVARD CENTRE I WINNERS (TJ MAXX) 2008 2023 LOEB 2008
BOULEVARD CENTRE II
KENDALWOOD VALUE VILLAGE 2008 2028 SHOPPERS DRUG MART 2011 2021
SUDBURY BUSINESS DEPOT (STAPLES) 2014 2029 CHAPTERS 2010 2030
LEASIDE FUTURE SHOP (BEST BUY) 2010 2025 PETSMART 2012 2037
WALKER PLACE
BOULEVARD III (4)
NEW MARKET (4)
DUFFERIN (4)
PRINCE EDWARD ISLAND
CHARLOTTETOWN WINNERS (TJ MAXX) 2009 WEST ROYALTY FITNESS 2010
QUEBEC
GREENFIELD PARK BUREAU EN GROS (STAPLES) 2007 2022 GUZZO CINEMA 2019 2039
JACQUES CARTIER VALUE VILLAGE 2008 2028 IGA 2007
CHATEAUGUAY HART 2005 2025
MEXICO
SALTILLO PLAZA
NUEVO LEON
26
YEAR OWNERSHIP LAND LEASABLE PERCENT
DEVELOPED INTEREST/ AREA AREA LEASED
LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1)
- ---------------------------------------------------------------------------------------------------
ACQUISITIONS SUBSEQUENT
TO DECEMBER 31, 2002
THROUGH FEBRUARY 28, 2003
ARIZONA
AVONDALE (4) 2003 JOINT VENTURE 8.3 - -
NEW HAMSPHIRE
NASHUA 2003 FEE 22.0 179,610 95.0
OHIO
MONTROSE 2003 FEE 53.4 926,600 99.4
TEXAS
HOUSTON 2003 FEE 17.1 183,024 90.4
AMARILLO (7) 2003 JOINT VENTURE 10.6 142,789 93.2
WASHINGTON
TUKWILA (7) 2003 JOINT VENTURE 46.7 467,452 97.9
DISPOSITIONS SUBSEQUENT
TO DECEMBER 31, 2002
THROUGH FEBRUARY 28, 2003
GEORGIA
SMYRNA (6) (9) 2002 JOINT VENTURE 7.8 77,961 99.7
ILLINOIS
BRIDGEVIEW (6) 1998 FEE 6.8 88,069 -
ROCKFORD (6) 1998 GROUND LEASE (2030) 10.3 102,971 -
NEVADA
LAS VEGAS (6) (9) 2002 JOINT VENTURE 23.4 234,459 87.9
MAJOR LEASES
-------------------------------------------------------------
LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION
- ----------------------------------------------------------------------------------------------
ACQUISITIONS SUBSEQUENT
TO DECEMBER 31, 2002
THROUGH FEBRUARY 28, 2003
ARIZONA
AVONDALE (4)
NEW HAMSPHIRE
NASHUA DSW SHOE WAREHOUSE 2011
OHIO
MONTROSE HOME DEPOT 2013
TEXAS
HOUSTON ROSS STORES 2013 2033
AMARILLO (7) ROSS STORES 2012
WASHINGTON
TUKWILA (7) BEST BUY 2015
DISPOSITIONS SUBSEQUENT
TO DECEMBER 31, 2002
THROUGH FEBRUARY 28, 2003
GEORGIA
SMYRNA (6) (9) INGLES GROCERY 2012
ILLINOIS
BRIDGEVIEW (6)
ROCKFORD (6)
NEVADA
LAS VEGAS (6) (9) FACTORY 2 U STORES 2004 2009
MAJOR LEASES
-------------------------------------------------------------------------------------------------
LEASE OPTION LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION TENANT NAME EXPIRATION EXPIRATION
- ---------------------------------------------------------------------------------------------------------------------------------
ACQUISITIONS SUBSEQUENT
TO DECEMBER 31, 2002
THROUGH FEBRUARY 28, 2003
ARIZONA
AVONDALE (4)
NEW HAMSPHIRE
NASHUA BED BATH & BEYOND 2007 MICHAEL'S 2007
OHIO
MONTROSE TOYS R US 2012 CHILIS 2009
TEXAS
HOUSTON OFFICE DEPOT 2012 2032 OLD NAVY 2007 2022
AMARILLO (7) BED BATH & BEYOND 2012 JOANN FABRICS 2012
WASHINGTON
TUKWILA (7) BABIES R US 2014 MARSHALLS 2011
DISPOSITIONS SUBSEQUENT
TO DECEMBER 31, 2002
THROUGH FEBRUARY 28, 2003
GEORGIA
SMYRNA (6) (9)
ILLINOIS
BRIDGEVIEW (6)
ROCKFORD (6)
NEVADA
LAS VEGAS (6) (9)
27
YEAR OWNERSHIP LAND LEASABLE PERCENT
DEVELOPED INTEREST/ AREA AREA LEASED
LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1)
- ---------------------------------------------------------------------------------------------------
PENNSLYVANIA
TREXLERTOWN (6) 1998 GROUND LEASE (2048)
/JOINT VENTURE 1.2 41,680 90.8
RETAIL STORE
LEASES (10) 1995/1997 LEASEHOLD - 3,809,000
----- ----------
GRAND TOTAL 600
PROPERTY INTERESTS 9,699 87,834,350
----- ----------
----- ----------
MAJOR LEASES
-------------------------------------------------------------
LEASE OPTION
LOCATION TENANT NAME EXPIRATION EXPIRATION
- ----------------------------------------------------------------------------------------------
TREXLERTOWN (6) LEHIGH VALLEY HEALTH 2008 2023
(1) PERCENT LEASED INFORMATION AS OF DECEMBER 31, 2002 OR DATE OF ACQUISITION
IF ACQUIRED SUBSEQUENT TO DECEMBER 31, 2002.
(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, 2002.
(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) THE COMPANY HOLDS INTERESTS IN VARIOUS RETAIL STORE LEASES RELATED TO THE
ANCHOR STORE PREMISES IN NEIGHBORHOOD AND COMMUNITY SHOPPING CENTERS.
28
Executive Officers of the Registrant
The following table sets forth information with respect to the executive
officers of the Company as of January 31, 2003.
Name Age Position Since
---- --- -------- -----
Milton Cooper 74 Chairman of the Board of 1991
Directors and Chief
Executive Officer
Michael J. Flynn 67 Vice Chairman of the 1996
Board of Directors and
President and Chief 1997
Operating Officer
David B. Henry 54 Vice Chairman of the 2001
Board of Directors and
Chief Investment Officer
Thomas A. Caputo 56 Executive Vice President 2000
Glenn G. Cohen 39 Vice President - 2000
Treasurer 1997
Raymond Edwards 40 Vice President - 2001
Retail Property Solutions
Jerald Friedman 58 President, KDI and 2000
Executive Vice President 1998
Bruce M. Kauderer 56 Vice President - Legal 1995
General Counsel and 1997
Secretary
Michael V. Pappagallo 44 Vice President - 1997
Chief Financial Officer
David M. Samber 53 Chief Executive Officer -
Kimco Select Investments 1997
and Vice President 2001
Michael J. Flynn has been President and Chief Operating Officer since January 2,
1997, Vice Chairman of the Board of Directors since January 2, 1996 and a
Director of the Company since December 1, 1991. Mr. Flynn was Chairman of the
Board and President of Slattery Associates, Inc. for more than five years prior
to joining the Company.
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.
Thomas A. Caputo has been Executive Vice President of the Company since December
2000. Mr. Caputo was a principal with H & R Retail from January 2000 to December
2000. Mr. Caputo was a principal with the RREEF Funds, a pension advisor, for
more than five years prior to January 2000.
Glenn G. Cohen has been a Vice President of the Company since May 2000 and
Treasurer of the Company since June 1997. Mr. Cohen served as Director of
Accounting and Taxation of the Company from June 1995 to June 1997. Prior to
joining the Company in June 1995, Mr. Cohen served as Chief Operating Officer
and Chief Financial Officer for U.S. Balloon Manufacturing Co., Inc. from August
1993 to June 1995.
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.
handling the marketing and disposition of real estate for retail operators
including Caldor, Bonwit Teller, Alexander's and others.
29
Jerald Friedman has been President of the Company's KDI subsidiary since April
2000 and Executive Vice President of the Company since June 1998. Mr. Friedman
was Senior Executive Vice President and Chief Operating Officer of The Price
REIT, Inc. from January 1997 to June 1998. From 1994 through 1996, Mr. Friedman
was the Chairman and Chief Executive Officer of K & F Development Company, an
affiliate of The Price REIT, Inc.
Bruce M. Kauderer has been a Vice President of the Company since June 1995 and
since December 15, 1997, General Counsel and Secretary of the Company. Mr.
Kauderer was a founder of and partner with Kauderer & Pack P.C. from 1992 to
June 1995.
Michael V. Pappagallo has been a Vice President and Chief Financial Officer of
the Company since May 27, 1997. Mr. Pappagallo was Chief Financial Officer of GE
Capital's Commercial Real Estate Financial and Services business from September
1994 to May 1997 and held various other positions within GE Capital for more
than five years prior to joining the Company.
David M. Samber has been Chief Executive Officer of Kimco Select Investments
since January 1997 and a Vice President of the Company since January 2001. Mr.
Samber was President and Chief Operating Officer of the Company from November
1991 through 1996 and held various other positions in the Company for more than
five years prior to 1991.
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.
30
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, 2002.
The Company's common stock was sold for cash at the following offering prices
per share.
Offering Date Offering Price
------------- ---------------
August 2000 $28.33
November 2001 $32.85
December 2001 $33.57
The table below sets forth, for the quarterly periods indicated, the high and
low sales prices per share reported on the NYSE Composite Tape for the Company's
common stock. The Company's common stock is traded under the trading symbol
"KIM".
Stock Price
----------------
Period High Low
------ ---- ----
2001:
First Quarter $30.08 $27.17
Second Quarter $31.57 $27.33
Third Quarter $33.30 $29.50
Fourth Quarter $34.07 $31.33
2002:
First Quarter $33.50 $29.00
Second Quarter $33.87 $31.00
Third Quarter $33.20 $25.96
Fourth Quarter $32.08 $27.77
Holders The number of holders of record of the Company's common stock, par value
$0.01 per share, was 1,273 as of January 31, 2003.
Dividends Since the IPO, the Company has paid regular quarterly dividends to its
stockholders.
Quarterly dividends at the rate of $0.48 per share were declared and paid on
December 4, 2000 and January 16, 2001, March 15, 2001 and April 16, 2001, June
15, 2001 and July 16, 2001, and September 17, 2001 and October 15, 2001,
respectively. On October 24, 2001, the Company declared its dividend payable
during the first quarter of 2002 at an increased rate of $0.52 per share payable
on January 15, 2002 to shareholders of record as of January 2, 2002. Quarterly
dividends at the rate of $0.52 per share were declared and paid on March 15,
2002 and April 15, 2002, June 17, 2002 and July 15, 2002, September 16, 2002 and
October 15, 2002, respectively. On October 28, 2002, the Company declared its
dividend payable during the first quarter of 2003 at an increased rate of $0.54
per share payable on January 15, 2003 to shareholders of record as of January 2,
2003. This $0.54 per share dividend, if annualized, would equal $2.16 per share
or an annual yield of approximately 6.9% based on the closing price of $31.40 of
the Company's common stock on the NYSE as of January 31, 2003.
The Company has determined that the $2.08 dividend per common share paid during
2002 represented 96% ordinary income and 4% capital gain to its stockholders and
the $1.92 dividend per common share paid during 2001 represented 95% ordinary
income and 5% return of capital 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 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.
31
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, 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 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 10 and 16 of the Notes to Consolidated Financial
Statements included in this annual report on Form 10-K.
The Company does not believe that the preferential rights available to the
holders of its Class A, Class B and Class C 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.
32
Year ended December 31,(3)
-----------------------------------------------------------------------
2002 2001 2000 1999 1998
----------- ----------- ----------- ----------- -----------
(in thousands, except per share information)
Operating Data:
Revenues from rental property (1) $ 450,829 $ 450,408 $ 441,336 $ 417,999 $ 329,652
Interest expense $ 86,896 $ 88,592 $ 91,870 $ 83,553 $ 64,285
Depreciation and amortization $ 74,223 $ 71,717 $ 69,052 $ 65,316 $ 50,117
Gain on sale of development properties $ 15,879 $ 13,418 $ -- $ -- $ --
Gain on sale of operating properties $ -- $ 3,040 $ 3,962 $ 1,552 $ 901
Provision for income taxes $ 12,904 $ 19,376 $ -- $ -- $ --
Income from continuing operations $ 248,570 $ 226,241 $ 193,925 $ 168,616 $ 124,112
Income per common share, from continuing
operations:
Basic $ 2.20 $ 2.09 $ 1.81 $ 1.57 $ 1.32
Diluted $ 2.19 $ 2.05 $ 1.79 $ 1.55 $ 1.31
Weighted average number of shares of common stock:
Basic 104,458 96,317 92,688 90,709 75,106
Diluted 105,969 101,163 93,653 91,466 75,961
Cash dividends declared per common share $ 2.10 $ 1.96 $ 1.81 $ 1.64 $ 1.37
December 31,
-----------------------------------------------------------------------
2002 2001 2000 1999 1998
----------- ----------- ----------- ----------- -----------
Balance Sheet Data:
Real estate, before accumulated depreciation $ 3,398,971 $ 3,201,364 $ 3,114,503 $ 2,951,050 $ 3,023,902
Total assets $ 3,756,878 $ 3,384,779 $ 3,171,348 $ 3,007,476 $ 3,051,178
Total debt $ 1,576,982 $ 1,328,079 $ 1,325,663 $ 1,249,571 $ 1,289,561
Total stockholders' equity $ 1,907,328 $ 1,890,084 $ 1,704,339 $ 1,605,435 $ 1,585,019
Other Data:
Year ended December 31, (3)
-----------------------------------------------------------------------
2002 2001 2000 1999 1998
----------- ----------- ----------- ----------- -----------
Funds from Operations (2):
Net income $ 245,668 $ 236,538 $ 205,025 $ 176,778 $ 122,266
Depreciation and amortization 76,674 74,209 71,129 67,416 51,348
Depreciation and amortization - real estate
joint ventures 17,779 12,718 8,277 5,239 788
(Gain) on disposition of operating properties (12,778) (3,040) (3,962) (1,552) (901)
(Gain) / loss on early extinguishment of debt (22,255) -- -- -- 4,900
Adjustment of property carrying values 33,030 -- -- -- --
Preferred stock dividends (18,437) (24,553) (26,328) (26,478) (24,654)
----------- ----------- ----------- ----------- -----------
Funds from operations $ 319,681 $ 295,872 $ 254,141 $ 221,403 $ 153,747
=========== =========== =========== =========== ===========
Cash flow provided by operations $ 278,931 $ 287,444 $ 250,546 $ 237,153 $ 158,706
Cash flow used for investing activities $ (396,655) $ (157,193) $ (191,626) $ (205,219) $ (630,229)
Cash flow (used for) provided by financing activities $ 59,839 $ (55,501) $ (67,899) $ (47,778) $ 484,465
(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) Most industry analysts and equity REITs, including the Company,
generally consider funds from operations ("FFO") to be an appropriate
supplemental measure of the performance of an equity REIT. FFO is
defined as net income applicable to common shares before depreciation
and amortization, extraordinary items, gains or losses on sales of
operating real estate, plus the pro-rata amount of depreciation and
amortization of unconsolidated joint ventures determined on a
consistent basis. Given the nature of the Company's business as a real
estate owner and operator, the Company believes that FFO is helpful to
investors as a measure of its operational performance because it
excludes various items included in net income that do not relate to or
are not indicative of our operating performance such as various
non-recurring items, gains and losses on sales of real estate and real
estate related depreciation and amortization, which can make periodic
and peer analyses of operating performance more difficult to compare.
FFO does not represent cash generated from operating activities in
accordance with generally accepted accounting principles and therefore
should not be considered an alternative for net income as a measure of
liquidity. In addition, the comparability of the Company's FFO with the
FFO reported by other REITs may be affected by the differences that
exist regarding certain accounting policies relating to expenditures
for repairs and other recurring items.
(3) All years have been adjusted to reflect the impact of operating
properties sold during 2002 and properties classified as held for sale
as of December 31, 2002 which are reflected in discontinued operations
in the Consolidated Statements of Income.
33
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.
Critical Accounting Policies
The Consolidated Financial Statements of the Company include the accounts of the
Company, its wholly-owned subsidiaries and all partnerships in which the Company
has a controlling interest. 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 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. In
addition, leases typically provide for reimbursement to the Company of common
area maintenance, real estate taxes and other operating expenses. Operating
expense reimbursements are recognized as earned. Rental income may also include
payments received in connection with lease termination agreements.
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.
The Company believes that its revenue recognition policy is in compliance with
generally accepted accounting principles and in accordance with the Securities
and Exchange Commission's Staff Accounting Bulletin No. 101, Revenue
Recognition.
Real Estate
Land, buildings and fixtures and leasehold improvements are recorded 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.
Depreciation and amortization are provided on the straight-line method over the
estimated useful lives of the assets, as follows:
Buildings 15 to 39 years
Fixtures and leasehold improvements 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
represent ground-up development projects which are held for sale upon
completion. These assets are carried at cost and no depreciation is recorded.
The cost of land and buildings under development include 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 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
Statement of Financial Accounting Standard No. 66, Accounting for Real Estate
Sales.
34
Long Lived Assets
On a periodic basis, management assesses whether there are any indicators that
the value of the real estate properties 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, trend 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
recognized.
Results of Operations
Comparison 2002 to 2001
Revenues from rental property increased $0.4 million or 0.1% to $450.8 million
for the year ended December 31, 2002, as compared with $450.4 million for the
year ended December 31, 2001. This net increase resulted primarily from the
combined effect of (i) the acquisition of 13 operating properties during 2002,
providing revenues of $5.1 million for the year ended December 31, 2002, (ii)
the full year impact related to the three operating properties acquired in 2001
providing incremental revenues of $2.3 million, and (iii) the completion of
certain development and redevelopment projects, tenant buyouts and new leasing
within the portfolio providing incremental revenues of approximately $20.5
million as compared to the corresponding year ended December 31, 2001, offset by
(iv) an overall decrease in shopping center portfolio occupancy to 87.8% at
December 31, 2002 as compared to 90.4% at December 31, 2001 due primarily to the
bankruptcy filing of Kmart Corporation ("Kmart") and Ames Department Stores,
Inc. ("Ames") and subsequent rejection of leases resulting in a decrease of
revenues of approximately $25.1 million as compared to the preceding year, and
(v) sales of certain shopping center properties throughout 2001 and 2002,
resulting in a decrease of revenues of approximately $2.4 million as compared to
the preceding year.
Rental property expenses, including depreciation and amortization, increased
$11.0 million or 5.9% to $196.8 million for the year ended December 31, 2002 as
compared to $185.8 million for the preceding year. The rental property expense
component of real estate taxes increased approximately $7.3 million or 13.1% for
the year ended December 31, 2002 as compared with the year ended December 31,
2001. This increase relates primarily to the payment of real estate taxes by the
Company on certain Kmart anchored locations where Kmart previously paid the real
estate taxes directly to the taxing authorities. The rental property expense
component of operating and maintenance increased approximately $1.5 million or
3.2% for the year ended December 31, 2002 as compared with the year ended
December 31, 2001. This increase is primarily due to property acquisitions
during 2002 and 2001, renovations within the portfolio and higher professional
fees relating to tenant bankruptcies.
Equity in income of real estate joint ventures, net increased $15.4 million to
$35.6 million for the year ended December 31, 2002, as compared to $20.2 million
for the year ended December 31, 2001. This increase is primarily attributable to
the equity in income from the Kimco Income REIT joint venture investment, the
RioCan joint venture investment, and the KROP joint venture investment as
described below.
During 1998, the Company formed KIR, a limited partnership established to invest
in high quality retail properties financed primarily through the use of
individual non-recourse mortgages. The Company has a 43.3% non-controlling
limited partnership interest in KIR, which the Company manages, and accounts for
its investment in KIR under the equity method of accounting. Equity in income of
KIR increased $3.1 million to $16.3 million for the year ended December 31,
2002, as compared to $13.2 million for the preceding year. This increase is
primarily due to the Company's increased capital investment in KIR totaling
$23.8 million during 2002 and $30.8 million during 2001. The additional capital
investments received by KIR from the Company and its other institutional
partners were used to purchase additional shopping center properties throughout
calendar year 2002 and 2001.
35
During October 2001, the Company formed a joint venture (the "RioCan Venture")
with RioCan Real Estate Investment Trust ("RioCan", Canada's largest publicly
traded REIT measured by gross leasable area ("GLA")), in which the Company has a
50% non-controlling interest, to acquire retail properties and development
projects in Canada. As of December 31, 2002, the RioCan Venture consisted of 28
shopping center properties and four development projects with approximately 6.7
million square feet of GLA. The Company's equity in income from the RioCan
Venture increased approximately $8.7 million to $9.1 million for the year ended
December 31, 2002, as compared to $0.4 million for the preceding year.
During October 2001, the Company formed the Kimco Retail Opportunity Fund
("KROP"), a joint venture with GE Capital Real Estate ("GECRE") which the
Company manages and has a 20% interest. The purpose of this venture is to
acquire established, high-growth potential retail properties in the United
States. As of December 31, 2002, KROP consisted of 15 shopping center properties
with approximately 1.5 million square feet of GLA. During the year ended
December 31, 2002, the Company's equity in income from KROP was approximately
$0.9 million.
Minority interests in income of partnerships, net increased $0.7 million to $2.4
million as compared to $1.7 million for the preceding year. This increase is
primarily due to the acquisition of a shopping center property acquired through
a newly formed partnership by issuing approximately 2.4 million downREIT units
valued at $80 million. The downREIT 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 on the Company's common stock multiplied by 1.1057.
Income from other real estate investments decreased $22.1 million to $16.0
million as compared to $38.1 million for the preceding year. This decrease is
primarily due to the decrease in income from the Montgomery Ward asset
designation rights transactions described below.
During March 2001, the Company, through a taxable REIT subsidiary, 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, of which 303 transactions have
been completed to date. During the year ended December 31, 2002 the Ward Venture
completed transactions of 32 properties. The pre-tax profits from the Ward
Venture decreased approximately $23.3 million to $11.3 million for the year
ended December 31, 2002 as compared to $34.6 million for the preceding year.
Mortgage financing income increased $17.1 million to $19.4 million for the year
ended December 31, 2002 as compared to $2.3 million for the year ended December
31, 2001. This increase is primarily due to increased interest income earned
related to certain real estate lending activities during the year ended December
31, 2002.
Effective January 1, 2001, the Company has 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 year ended
December 31, 2002, KDI sold four projects and eight out-parcels, in separate
transactions, for approximately $128.7 million, including the assignment of
approximately $17.7 million of mortgage debt encumbering one of the properties.
These sales resulted in pre-tax gains of approximately $15.9 million.
During the year ended December 31, 2001, KDI sold two of its recently completed
projects and five out-parcels, in separate transactions, for approximately $61.3
million, which resulted in pre-tax profits of $13.4 million.
Management and other fee income increased approximately $6.4 million to $14.2
million for the year ended December 31, 2002 as compared to $7.8 million for the
year ended December 31, 2001. This increase is primarily due to (i) a $1.1
million increase in management fees from KIR resulting from the growth of the
KIR portfolio, (ii) $2.3 million of management and acquisition fees relating to
the KROP joint venture activities during the year ended December 31, 2002 and
(iii) increased property management activity providing incremental fee income of
approximately $3.0 million.
36
Other income/(loss), net increased approximately $4.7 million to $2.5 million
for the year ended December 31, 2002 as compared to the preceding calendar year.
This increase is primarily due to pre-tax profits earned from the Company's
participation in ventures established to provide inventory liquidation services
to regional retailers in bankruptcy.
Interest expense decreased $1.7 million or 1.9% to $86.9 million for the year
ended December 31, 2002, as compared with $88.6 million for the year ended
December 31, 2001. This decrease is primarily due to reduced interest costs on
the Company's floating-rate revolving credit facilities and remarketed reset
notes which was partially offset by an increase in borrowings during the year
ended December 31, 2002, as compared to the preceding year.
General and administrative expenses increased approximately $3.2 million for the
year ended December 31, 2002, as compared to the preceding calendar year. This
increase is primarily due to higher costs related to the growth of the Company
including (i) increased senior management and staff levels, (ii) increased
system related costs and (iii) other personnel related costs.
The Company had previously encumbered seven Kmart sites with individual
non-recourse mortgages aggregating approximately $70.8 million as part of its
strategy to reduce its exposure to Kmart Corporation. As a result of the Kmart
bankruptcy filing in January of 2002 and the subsequent rejection of leases
including leases at these encumbered sites, the Company, during July 2002, had
suspended debt services payments on these loans and was actively negotiating
with the respective lenders. During December 2002, the Company reached agreement
with certain lenders in connection with four of these locations. The Company
paid approximately $24.2 million in full satisfaction of these loans which
aggregated approximately $46.5 million. The Company recognized a gain on early
extinguishment of debt of approximately $22.3 million.
During December 2002, the Company identified two operating properties, comprised
of approximately 0.2 million square feet of GLA, as "Held for Sale" in
accordance with FASB No. 144. The book value of these properties, aggregating
approximately $28.4 million, net of accumulated depreciation of approximately
$2.9 million, exceeded their estimated fair value. The Company's determination
of the fair value of these properties, aggregating approximately $7.9 million,
is based upon executed contracts of sale with third parties less estimated
selling costs. As a result, the Company recorded an adjustment of property
carrying values of $20.5 million. This adjustment is included, along with the
related property operations for the current and comparative years, in the
caption Income/(loss) from discontinued operations on the Company's Consolidated
Statements of Income.
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 the fourth quarter of 2002, that its
investment in four operating properties, comprised of an aggregate 0.4 million
square feet of GLA with an aggregate net book value of approximately $23.8
million, may not be fully recoverable. Based upon management's assessment of
current market conditions and the lack of demand for the properties, the Company
has reduced its potential holding period of these investments. As a result of
the reduction in the anticipated holding period, together with a reassessment of
the projected future operating income of the properties and the effects of
current market conditions, the Company has determined that its investment in
these assets was not fully recoverable and has recorded an adjustment of
property carrying value aggregating approximately $12.5 million.
During 2002, the Company, (i) disposed of, in separate transactions, 12
operating properties for an aggregate sales price of approximately $74.5
million, including the assignment/repayment of approximately $22.6 million of
mortgage debt encumbering three of the properties and, (ii) terminated five
leasehold positions in locations where a tenant in bankruptcy had rejected its
lease. These dispositions resulted in net gains of approximately $12.8 million
for the year ended December 31, 2002. In accordance with SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets ("FASB No. 144"),
the operations and net gain on disposition of these properties have been
included in the caption Discontinued operations on the Company's Consolidated
Statements of Income.
During 2001, the Company, in separate transactions, disposed of three operating
properties, including the sale of a property to KIR, and a portion of another
operating property comprising in the aggregate approximately 0.6 million square
feet of GLA. Cash proceeds from these dispositions aggregated approximately
$46.7 million, which resulted in a net gain of approximately $3.0 million. Cash
proceeds from the sale of the operating property in Elyria, OH totaling $5.8
million, together with an additional $7.1 million cash investment, were used to
acquire an exchange shopping center property located in Lakeland, FL during
August 2001.
37
Net income for the year ended December 31, 2002 was $245.7 million as compared
to $236.5 million for the year ended December 31, 2001, representing an increase
of $9.2 million. This increase reflects the combined effect of increased
contributions from the investments in KIR, KROP, the RioCan Venture and other
financing investments, reduced by lower income resulting from tenant
bankruptcies and subsequent rejection of leases and a decrease in profits from
the Ward Venture.
Comparison 2001 to 2000
Revenues from rental property increased $9.1 million or 2.1% to $450.4 million
for the year ended December 31, 2001, as compared with $441.3 million for the
year ended December 31, 2000. This net increase resulted primarily from the
combined effect of (i) the acquisition of three operating properties during
2001, providing revenues of $1.3 million for the year ended December 31, 2001,
(ii) the full year impact related to the 12 operating properties acquired in
2000 providing incremental revenues of $3.5 million, and (iii) the completion of
certain development and redevelopment projects and new leasing within the
portfolio providing incremental revenues of approximately $11.9 million as
compared to the corresponding year ended December 31, 2000, offset by (iv) the
commencement of new redevelopment projects and tenant buyouts causing a
temporary increase in vacancy, sales of certain shopping center properties
throughout 2001 and 2000 and an overall decrease in shopping center portfolio
occupancy to 90.1% at December 31, 2001 as compared to 92.9% at December 31,
2000 due primarily to bankruptcies of tenants and subsequent rejections of
leases resulting in a decrease of revenues of approximately $7.6 million as
compared to the preceding year.
Rental property expenses, including depreciation and amortization, increased
$9.2 million or 5.2% to $185.8 million for the year ended December 31, 2001 as
compared to $176.6 million for the preceding year. The rental property expense
components of real estate taxes and operating and maintenance increased
approximately $1.8 million and $4.4 million, respectively, for the year ended
December 31, 2001 as compared with the year ended December 31, 2000.
Depreciation and amortization increased $2.7 million for the year ended December
31, 2001 as compared to the preceding year. These increases are primarily due to
property acquisitions during 2001 and 2000, renovations within the existing
portfolio, the completion of certain redevelopment and development projects, and
increased snow removal costs during 2001.
Equity in income of real estate joint ventures, net increased $5.6 million to
$20.2 million for the year ended December 31, 2001 as compared to $14.6 million
for the year ended December 31, 2000. This increase is primarily attributable to
the KIR transaction described below.
During 1998, the Company formed KIR, a limited partnership established to invest
in high quality retail properties financed primarily through the use of
individual non-recourse mortgages. At the time of the formation, the Company
contributed 19 property interests to KIR. On April 28, 1999, KIR sold a
significant interest in the partnership to institutional investors. As a result,
the Company holds a non-controlling limited partnership interest in KIR and
accounts for its investment in KIR under the equity method of accounting. Equity
in income of KIR increased $3.7 million to $13.2 million for the year ended
December 31, 2001, as compared to $9.5 million for the preceding year. This
increase is primarily due to the Company's increased capital investment in KIR
totaling $30.8 million during 2001 and $29.6 million during 2000. The additional
capital investments received by KIR from the Company and its other institutional
partners were used to purchase additional shopping center properties throughout
calendar years 2001 and 2000.
Income from other real estate investments, increased approximately $30.4 million
to $38.1 million for the year ended December 31, 2001 as compared with $7.7
million for the year ended December 31, 2000. This increase is primarily due to
the Montgomery Ward asset designation rights transaction described below.
During March 2001, the Company, through a taxable REIT subsidiary, 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 Ward Venture has completed
transactions on 271 properties, and the Company has recognized pre-tax profits
of approximately $34.6 million for the year ended December 31, 2001.
38
Mortgage financing income increased approximately $0.8 million to $2.3 million
for the year ended December 31, 2001 as compared to $1.5 million for the year
ended December 31, 2000. This increase is primarily due to increased interest
income earned related to certain real estate lending activities during the year
ended December 31, 2001.
Effective January 1, 2001, the Company has 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 year ended
December 31, 2001, KDI sold two of its recently completed projects and five
out-parcels, in separate transactions, for approximately $61.3 million, which
resulted in pre-tax profits of $13.4 million.
Interest, dividends and other investment income increased approximately $0.9
million to $17.3 million for the year ended December 31, 2001 as compared to
$16.4 million for the year ended December 31, 2000. Interest, dividends and
other investment income is primarily comprised of interest income, dividend
income and realized gains related to the Company's investments and sales of
certain marketable equity and debt securities.
Interest expense decreased $3.3 million or 3.6% to $88.6 million for the year
ended December 31, 2001, as compared with $91.9 million for the year ended
December 31, 2000. This decrease is primarily due to reduced interest costs on
the Company's floating-rate revolving credit facility and remarketed reset notes
during the year ended December 31, 2001, as compared to the preceding year.
General and administrative expenses increased approximately $3.2 million for the
year ended December 31, 2001, as compared to the preceding calendar year. This
increase is primarily due to higher costs related to the growth of the Company
including (i) increased senior management and staff levels, (ii) increased
system related costs and (iii) other personnel related costs. In addition, the
Company issued a stock grant award to a newly appointed executive officer of the
Company valued at approximately $1.1 million during 2001.
During 2001, the Company, in separate transactions, disposed of three operating
properties, including the sale of a property to KIR, and a portion of another
operating property comprising in the aggregate approximately 0.6 million square
feet of GLA. Cash proceeds from these dispositions aggregated approximately
$46.7 million, which resulted in a net gain of approximately $3.0 million. Cash
proceeds from the sale of the operating property in Elyria, OH totaling $5.8
million, together with an additional $7.1 million cash investment, was used to
acquire an exchange shopping center property located in Lakeland, FL during
August 2001.
During 2000, the Company, in separate transactions, disposed of ten shopping
center properties. Sale prices from two of these dispositions aggregated
approximately $4.5 million, which approximated their aggregate net book value.
Sale prices from eight of these dispositions aggregated approximately $29.7
million, which resulted in net gains of approximately $4.0 million.
Net income for the year ended December 31, 2001 was $236.5 million as compared
to $205.0 million for the year ended December 31, 2000, representing an increase
of $31.5 million. This improved performance reflects the combined effect of
internal growth and property acquisitions in the core portfolio, profits from
KDI, income from the investment in KIR and profits from the Ward Venture
investment, which strengthened profitability.
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, 2002, the Company's five largest tenants, were Kmart Corporation, The Home
Depot, Kohl's, TJX Companies, and Wal-Mart, which represented approximately
4.5%, 2.8%, 2.7%, 2.5% and 1.9%, 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.
On January 22, 2002, Kmart filed for protection under Chapter 11 of the U.S.
Bankruptcy Code. As of the filing date, Kmart occupied 69 locations (excluding
the KIR portfolio which includes six Kmart locations), representing 12.6% of the
Company's annualized base rental revenues and 13.3% of the Company's total
shopping center GLA. During 2002, Kmart rejected its leases at 31 locations,
representing approximately $30.8 million of annualized base rental revenues and
approximately 3.2 million square feet of GLA. As of December 31, 2002, Kmart
represented 4.5% of annualized base rents and 6.9% of leased GLA.
39
During December 2002, the Company disposed of, in separate transactions, seven
former Kmart sites, comprised of approximately 0.7 million square feet of GLA,
for an aggregate sales price of approximately $40.8 million.
The Company has currently leased or is under agreement to lease 11 of the
rejected locations, has terminated four ground lease locations and has received
offers to purchase three of these sites. The Company is reviewing the offers
received and is actively marketing the remaining six locations to prospective
tenants, however, no assurances can be provided that these locations will be
leased in the near term or at comparable rents previously paid by Kmart.
The Company previously encumbered seven of these rejected locations with
individual non-recourse mortgage loans totaling approximately $70.8 million.
Annualized interest expense on these loans was approximately $5.6 million.
During July 2002, the Company suspended debt service payments on these loans and
was actively negotiating with the respective lenders. During December 2002, the
Company reached agreements with certain lenders in connection with four of these
locations. The Company paid approximately $24.2 million in full satisfaction of
these loans aggregating approximately $46.5 million and the Company recognized a
gain on early extinguishment of debt of approximately $22.3 million. Also,
during December 2002, the Company re-tenanted one of these sites and has brought
the mortgage loan encumbering this property current.
During February 2003, the Company reached agreement with the lender in
connection with the remaining two encumbered sites. The Company paid
approximately $8.3 million in full satisfaction of these loans which aggregated
approximately $14.7 million and the Company will recognize a gain on early
extinguishment of debt of approximately $6.2 million during the first quarter of
2003.
On January 14, 2003, Kmart announced it would be closing an additional 326
locations of which nine of these locations (excluding the KIR portfolio which
includes three additional locations and Kimsouth which includes two additional
locations) are leased from the Company. The annualized base rental revenues from
these nine locations are approximately $4.3 million. The Company had previously
encumbered one of these properties with an individual non-recourse mortgage
loan. The annualized interest expense for the one encumbered property is
approximately $0.8 million. As of the date of this filing of this annual report
on Form 10-K, the Company has not been notified directly by Kmart as to the
timing of the store closings or whether the leases will be assigned or rejected.
Until such time as the leases are rejected, in accordance with the bankruptcy
proceedings, Kmart remains obligated for payments of rent and operating expenses
at these locations and all other remaining locations.
Effective May 1, 2003, the Company has agreed to a five-year rent reduction at
six Kmart locations, representing approximately 0.6 million square feet of GLA.
The average rent was reduced from $8.01 per square foot to $5.57 per square
foot, or approximately $1.5 million of annualized base rent.
The Company generally will have the right to file claims in connection with
these rejected leases for lost rent equal to three years of rental obligations
as well as other amounts related to obligations under the leases. Actual amounts
to be received in satisfaction of these claims will be subject to Kmart's final
plan of reorganization and the availability of funds to pay creditors such as
the Company.
Liquidity and Capital Resources
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, 2002 the Company's level of debt to total market capitalization was
31%. 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 financings and other debt and equity 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 $2.7
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.
40
The Company has a $250.0 million, unsecured revolving credit facility, which is
scheduled to expire in August 2003. This credit facility has made available
funds to both finance the purchase of properties and meet any short-term working
capital requirements. As of December 31, 2002 there was $40.0 million
outstanding under this credit facility. The Company intends to renew this
facility prior to the maturity date.
During July 2002, the Company further enhanced its liquidity position by
establishing an additional $150.0 million unsecured revolving credit facility.
During December 2002, the Company paid down the outstanding balance and
terminated this facility.
The Company also has a $200.0 million 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. (See Note 10 of the Notes to
Consolidated Financial Statements included in this annual report on Form 10-K.)
As of December 31, 2002, the Company had $98.0 million available for issuance
under the MTN program.
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. As of December 31, 2002, the Company had over 380 unencumbered
property interests in its portfolio.
During May 2001, the Company filed a shelf registration statement on Form S-3
for up to $750.0 million of debt securities, preferred stock, depositary shares,
common stock and common stock warrants. As of December 31, 2002, the Company had
$288.7 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 and growth in operating
income in the existing portfolio and from other sources. 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 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 $235.6 million in 2002, compared to $209.8
million in 2001 and $189.9 million in 2000. The Company's dividend payout ratio,
based on funds from operations on a per-basic common share basis, for 2002, 2001
and 2000 was approximately 68.0%, 62.5% and 64.6%, respectively.
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.
The Company anticipates its capital commitment toward redevelopment projects
during 2003 will be approximately $30.0 million to $50.0 million. Additionally,
the Company anticipates its capital commitment toward ground-up development
during 2003 will be approximately $160.0 million to $200.0 million. The proceeds
from the sales of development properties and proceeds from construction loans in
2003 should be sufficient to fund the ground-up development capital
requirements.
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. Cash
flows from operations as reported in the Consolidated Statements of Cash Flows
was $278.9 million for 2002, $287.4 million for 2001 and $250.5 million for
2000.
41
Contractual Obligations and Other Commitments
The Company has debt obligations relating to its revolving credit facility,
MTNs, senior notes, mortgages and construction loans with maturities ranging
from one to 22 years. As of December 31, 2002, the Company's total debt had a
weighted average term to maturity of approximately five years. In addition, the
Company has non-cancelable operating leases pertaining to its shopping center
portfolio. As of December 31, 2002, the Company has certain 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 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, 2002 (in millions):
2003 2004 2005 2006 2007 Thereafter Total
-------- -------- -------- -------- -------- -------- --------
Long-Term Debt $ 147.3 $ 223.9 $ 221.3 $ 118.8 $ 206.1 $ 659.6 $1,577.0
Operating Leases
Ground Leases $ 10.9 $ 10.8 $ 10.1 $ 9.5 $ 9.0 $ 125.1 $ 175.4
Retail Store Leases $ 9.5 $ 8.5 $ 7.3 $ 5.8 $ 3.9 $ 4.2 $ 39.2
The Company has $100.0 million of unsecured senior notes and $7.3 million of
construction loans maturing in 2003. In addition, the Company's unsecured
revolving credit facility, which is scheduled to mature in August 2003, had
$40.0 million outstanding as of December 2002. The Company anticipates
satisfying these maturities with a combination of operating cash flows, its
unsecured revolving credit facility and new debt financings. The Company intends
to renew its unsecured revolving credit facility prior to the maturity date.
The Company has issued letters of credit in connection with the
collateralization of tax-exempt mortgage bonds, completion guarantees for
certain construction projects, and guaranty of payment related to the Company's
insurance program. These letters of credit aggregate approximately $14.9
million.
Additionally, the RioCan Venture, an entity in which the Company holds a 50%
non-controlling interest, has a CAD $5.0 million (approximately USD $3.2
million) letter of credit facility. This facility is jointly guaranteed by
RioCan and the Company and has approximately CAD $1.0 million (approximately USD
$0.6 million) outstanding as of December 31, 2002 relating to various
development projects.
During 2002, the Company obtained construction financing on eight ground-up
development properties for an aggregate loan amount of up to $119.8 million. As
of December 31, 2002, approximately $38.9 million was outstanding.
Unconsolidated Real Estate Joint Ventures
The Company has investments in a number of 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, and
varying 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, 2002, KIR had interests in 68 properties comprising 14.0 million
square feet of GLA. As of December 31, 2002, KIR had obtained individual
non-recourse mortgage loans on 67 of these properties aggregating approximately
$1,103.7 million. These non-recourse mortgage loans have maturities ranging from
one to 16 years and rates ranging from 5.95% to 8.52%. In addition, KIR
maintains a secured revolving credit facility with a syndicate of banks, which
is scheduled to expire in November 2003. This facility is collateralized by the
unfunded subscriptions of certain partners, including those of the Company. The
facility has an aggregate availability of up to $100.0 million based upon the
amount of unfunded subscription commitments of certain partners. During January
2003, the aggregate availability under the credit facility was reduced to $90.0
million. Under the terms of the facility, funds may be borrowed for general
corporate purposes including the acquisition of institutional quality
properties. Borrowings under the facility accrue interest at Libor plus 0.80%.
As of December 31, 2002, there was $15.0 million outstanding under this
facility. As of December 31, 2002, the Company's pro-rata share of non-recourse
mortgages and other debt obligations relating to the KIR joint venture was
approximately $484.4 million. The Company also has unfunded capital commitments
to KIR in the amount of approximately $55.9 million as of December 31, 2002.
(See Note 6 of the Notes to Consolidated Financial Statements included in this
annual report on Form 10-K.)
42
The RioCan Venture was established with RioCan Real Estate Investment Trust to
acquire properties and development projects in Canada. As of December 31, 2002,
the RioCan Venture consisted of 28 shopping center properties and four
development projects with approximately 6.7 million square feet of GLA. As of
December 31, 2002, the RioCan Venture had obtained individual, non-recourse
mortgage loans on 26 of these properties aggregating approximately CAD $519.1
million (USD $329.3 million). These non-recourse mortgage loans have maturities
ranging from one to 12 years and rates ranging from 5.82% to 10.31%. As of
December 31, 2002 the Company's pro-rata share of non-recourse mortgage loans
relating to the RioCan Venture was approximately CAD $259.6 million (USD $164.6
million). (See Note 6 of the Notes to Consolidated Financial Statements included
in this annual report on Form 10-K.)
The Kimco Retail Opportunity Fund ("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, 2002, KROP consisted of 15
shopping center properties with approximately 1.5 million square feet of GLA.
During 2002, KROP obtained a cross-collateralized mortgage with a 5-year term
aggregating $73.0 million on eight properties with an interest rate of LIBOR
plus 1.8%. During 2002, $1.9 million of this mortgage was repaid upon the sale
of one of the collateralized properties. The interest on this mortgage is
payable in monthly installments with principal due in full upon maturity.
Additionally, KROP assumed mortgage debt of approximately $29.5 million in
connection with the acquisition of three shopping centers, with fixed interest
rates ranging from 7.38% to 8.64%. Such mortgage debt is collateralized by the
individual shopping center property and is payable in monthly installments of
principal and interest. At December 31, 2002 the weighted average interest rate
for all mortgage debt outstanding was 4.65% per annum. As of December 31, 2002,
the Company's pro-rata share of non-recourse mortgage loans relating to the KROP
joint venture was approximately $20.0 million. Additionally, the Company along
with its joint venture partner have provided interim financing ("Short-term
Notes") for all acquisitions without a mortgage in place at the time of closing.
As of December 31, 2002 KROP has outstanding Short-term Notes of $17.3 million
due each the Company and GECRE. These short-term notes all have maturities of
less than one year with rates ranging from Libor plus 4.0% to 4.25%. (See Note 6
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
ownership interests ranging from 4% to 50%. As of December 31, 2002, these
unconsolidated joint ventures had individual non-recourse mortgage loans
aggregating approximately $187.9 million. The Company's pro-rata share of these
non-recourse mortgages was approximately $78.9 million. (See Note 6 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 17.4 million square feet of GLA. Total acquisition value was
approximately $280.9 million including approximately $216.2 million in mortgage
debt. On December 23, 2002, Kimsouth obtained a cross-collateralized three-year
mortgage, aggregating $21.3 million at a variable rate of Libor plus 3.0% which
replaced (i) a secured line of credit for $8.0 million and (ii) a construction
loan for $17.6 million. All mortgages, which are collateralized by the
individual shopping center properties, are due in monthly installments. The
scheduled maturities of all mortgages payable as of December 31, 2002, are
approximately as follows (in millions): 2003: $74.7; 2004: $2.9; 2005: $30.3;
2006: $3.2; 2007: $45.3 and thereafter, $28.6. At December 31, 2002, the
weighted average interest rate for all mortgage debt outstanding was 7.47% per
annum.
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 (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.
43
As of December 31, 2002, four of these properties were sold whereby the proceeds
from the sales were used to paydown the mortgage debt by approximately $9.6
million. As of December 31, 2002, the remaining 26 properties were encumbered by
third-party non-recourse debt of approximately $86.0 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 general 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.
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 August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets ("FASB No. 144"), which supercedes SFAS No. 121.
FASB No. 144 requires that long-lived assets that are to be disposed of by sale
be measured at the lower of book value or fair value less cost to sell. FASB No.
144 retains the requirements of SFAS No. 121 regarding impairment loss
recognition and measurement. In addition, it requires that one accounting model
be used for long-lived assets to be disposed of by sale and broadens the
presentation of discontinued operations to include more disposal transactions.
FASB No. 144 is effective for fiscal years beginning after December 15, 2001.
Effective January 1, 2002, the Company adopted FASB No. 144. The impact of
adoption of FASB No. 144 did not have a material adverse impact on the Company's
financial position or results of operations.
In April 2002, the FASB issued SFAS No. 145, Rescission of FASB No. 4, 44, and
64, Amendment of FASB No. 13 and Technical Corrections ("FASB No. 145"). This
statement eliminates the requirement to report gains and losses from
extinguishment of debt as extraordinary unless they meet the criteria of APB
Opinion 30. Debt extinguishments that were classified as extraordinary in prior
periods presented that do not meet the criteria of APB Opinion 30 shall be
reclassified. FASB No. 145 is effective for fiscal years beginning after May 15,
2002. During 2002, the Company elected early adoption of the provisions of FASB
No. 145. The impact of adopting this statement did not have a material adverse
impact on the Company's financial position or results of operations.
In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities ("FASB 146"). This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force ("EITF") Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring). For purpose of
this statement, an exit or disposal activity is initiated when management,
having the authority to approve the action, commits to an exit or disposal plan
or otherwise disposes of a long-lived asset (disposal group) and, if the
activity involves the termination of employees, the criteria for a plan of
termination of this statement are met. The provisions of this statement shall be
effective for exit or disposal activities initiated after December 31, 2002. The
impact of the adoption of FASB No. 146 is not expected to have a material
adverse impact on the Company's financial position or results of operations.
In November 2002, FASB issued FASB Interpretation No. 45 ("FIN 45"), Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others (an interpretation of FASB Statements No.
5, 57 and 107 and rescission of FASB Interpretation No. 34). FIN 45 clarifies
the requirements of FASB Statement No. 5, Accounting for Contingencies. It
requires that upon issuance of a guarantee, the guarantor must recognize a
liability for the fair value of the obligation it assumes under that guarantee
regardless of whether or not the guarantor receives separate identifiable
consideration (i.e., a premium). The Company has adopted the new disclosure
requirements, which are effective beginning with 2002 calendar year-end
financials. FIN 45's provisions for initial recognition and measurement are
effective on a prospective basis to guarantees issued or modified after December
31, 2002. The adoption of FIN 45 is not expected to have a material adverse
impact on the Company's financial position or results of operations.
44
In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure an amendment of FASB Statement No. 123
("FASB No. 148"). This Statement amends FASB Statement No. 123, Accounting for
Stock-Based Compensation, to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of Statement 123 to require prominent disclosures in both annual
and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results. The
transition and annual disclosure provision of FASB No. 148 shall be applied for
fiscal years ending after December 15, 2002. The new interim disclosure
provisions are effective for the first interim period beginning after December
15, 2002. Effective January 1, 2003, the Company will adopt the prospective
method provisions of FASB No. 148, which will apply the recognition provisions
of FASB No. 123 to all employee awards granted, modified or settled after
January 1, 2003. The adoption is not expected to have a material adverse impact
on the Company's results of operations.
In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities ("FIN 46"), the primary objective of which is to
provide guidance on the identification of entities for which control is achieved
through means other than voting rights ("variable interest entities" or "VIEs")
and to determine when and which business enterprise should consolidate the VIE
(the "primary beneficiary"). This new model applies when either (i) the equity
investors (if any) do not have a controlling financial interest or (ii) the
equity investment at risk is insufficient to finance that entity's activities
without additional financial support. In addition, FIN 46 requires additional
disclosures. The Company is assessing the impact of this interpretation on its
accounting for its investments in unconsolidated joint ventures (see Note 6 of
the Notes to Consolidated Financial Statements included in this annual report on
Form 10-K).
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
As of December 31, 2002, the Company had approximately $280.0 million of
floating-rate debt outstanding including $40.0 million on its unsecured
revolving credit facility. The interest rate risk on $185.0 million of such debt
has been mitigated through the use of interest rate swap agreements (the
"Swaps") with major financial institutions. The Company is exposed to credit
risk in the event of non-performance by the counter-party to the Swaps. The
Company believes it mitigates its credit risk by entering into these Swaps with
major financial institutions. The Company believes the interest rate risk
represented by the remaining $95.0 million of floating-rate debt is not material
to the Company or its overall capitalization.
As of December 31, 2002, the Company has Canadian investments totaling CAD
$204.5 million (approximately USD $130.2 million) comprised of marketable
securities and a real estate joint venture. In addition, the Company has Mexican
real estate investments of MXN $383.7 million (approximately USD $35.7 million).
The foreign currency exchange risk has been mitigated through the use of 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, and does not plan to, enter into any derivative financial
instruments for trading or speculative purposes. As of December 31, 2002, 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.
45
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 15, 2003.
Information with respect to the Executive Officers of the Registrant follows
Part I, Item 4 of this annual report on Form 10-K.
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 15, 2003.
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 15, 2003.
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 15, 2003.
Item 14. Controls and Procedures
Within the 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon that evaluation, the Company's Chief Executive Officer and Chief Financial
Officer concluded that as of the date of that evaluation the Company's
disclosure controls and procedures are effective in providing timely reporting
of material information regarding required disclosure and ensure that such
information is recorded, processed, summarized and reported within the required
time periods and included in the Company's periodic filings with the SEC.
There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect the Company's internal controls
subsequent to the date the Company carried out this evaluation.
46
PART IV
Item 15. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
-----------------------------------------------------------------
(a) 1. Financial Statements - Form 10-K
The following consolidated financial Form 10-K
information is included as a separate Report
section of this annual report on Form 10-K. Page
---------
Report of Independent Accountants 55
Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 2002 and 2001 56
Consolidated Statements of Income for the years
ended December 31, 2002, 2001 and 2000 57
Consolidated Statements of Comprehensive Income
for the years ended December 31, 2002, 2001 and 2000 58
Consolidated Statements of Stockholders' Equity
for the years ended December 31, 2002, 2001 and 2000 59
Consolidated Statements of Cash Flows for the years ended
December 31, 2002, 2001 and 2000 60
Notes to Consolidated Financial Statements 61
2. Financial Statement Schedules -
Schedule II - Valuation and Qualifying Accounts 87
Schedule III - Real Estate and Accumulated Depreciation 88
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. 48
(b) Reports on Form 8-K
A current report on Form 8-K dated October 28, 2002 was filed under
Items 5 and 7 relating to the announcement of the Company's second
quarter 2002 operating results.
A current report on Form 8-K dated November 12, 2002 was furnished
under Item 9 relating to the certifications of the Company's Chief
Executive Officer and Chief Financial Officer as required by 18 U.S.C.
ss. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.
A current report on Form 8-K dated November 15, 2002 was filed under
Item 7 to disclose the U.S. Placement Agency Agreement, dated November
15, 2002, by and among, Banc of America Securities LLC, J.P. Morgan
Securities Inc., Fleet Securities, Inc., HSBC Securities (USA) Inc.,
Wachovia Securities, Inc. and the Company in connection with the
Company's $35.0 million Senior Note offering during November 2002.
A current report on Form 8-K dated November 21, 2002 was filed under
Item 7 to disclose the Underwriting and Terms Agreements, dated
November 18, 2002, by and among, Banc One Capital Markets, Inc., J.P.
Morgan Securities Inc., Banc of America Securities LLC, and the Company
in connection with the Company's $200.0 million Senior Note offering
during November 2002.
47
INDEX TO EXHIBITS
Form 10-K
Exhibits 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.
3.3 --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")].
3.4 --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].
3.5 --Articles Supplementary relating to the 7 1/2% Class
D Cumulative Convertible Preferred Stock, par value
$1.00 per share, of the Company, dated May 14, 1998
[Incorporated by reference to the Company's and The
Price REIT, Inc.'s Joint Proxy/Prospectus on Form S-4
No. 333-52667].
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")].
48
INDEX TO EXHIBITS (continued)
Form 10-K
Exhibits Page
- -------- ----------
4.6 -- Form of Medium-Term Note (Fixed Rate).
4.7 -- Form of Medium-Term Note (Floating Rate).
4.8 -- Form of Remarketed Reset Note [Incorporated by reference
to Exhibit 4(j) to the Company's Current Report on
Form 8-K dated March 26, 1999].
10.1 -- Form of Acquisition Option Agreement between the Company
and the subsidiary named therein [Incorporated by
reference to Exhibit 10.1 to Amendment No. 3 to the
Company's Registration Statement on Form S-11
No. 33-42588].
10.2 -- 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].
10.3 -- Amended and Restated Stock Option Plan
[Incorporated by reference to Exhibit 10.3 to the
1995 Form 10-K].
10.4 -- Employment Agreement between Kimco Realty
Corporation and Michael J. Flynn, dated
November 1, 1998.
10.5 -- 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].
10.6 -- Employment Agreement between Kimco Realty Corporation and
Michael V. Pappagallo, dated January 1, 2002.
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.
10.9 -- Amended and Restated Stock Option 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 Raymond Edwards - the Company
commenced a five-year employment agreement with Mr.
Edwards pursuant to which Mr. Edwards will serve as a
Vice President of the Company. 95
49
INDEX TO EXHIBITS (continued)
Form 10-K
Page
----------
*12.1 -- Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends. 102
*12.2 -- Computation of Ratio of Funds from Operations to Combined
Fixed Charges and Preferred Stock Dividends. 103
*21.1 -- Subsidiaries of the Company 104
*23.1 -- Consent of PricewaterhouseCoopers LLP 110
- ---------------------------------------
* Filed herewith.
50
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 26, 2003
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 March 26, 2003
- --------------------------- the Board of Directors
Martin S. Kimmel
/s/ Milton Cooper
- --------------------------- Chairman of the Board March 26, 2003
Milton Cooper of Directors and Chief
Executive Officer
/s/ Michael J. Flynn Vice Chairman of the March 26, 2003
- --------------------------- Board of Directors,
Michael J. Flynn President and
Chief Operating Officer
/s/ David B. Henry Vice Chairman of the March 26, 2003
- --------------------------- Board of Directors and
David B. Henry Chief Investment Officer
/s/ Richard G. Dooley Director March 26, 2003
- ---------------------------
Richard G. Dooley
/s/ Joe Grills Director March 26, 2003
- ---------------------------
Joe Grills
/s/ Frank Lourenso Director March 26, 2003
- ---------------------------
Frank Lourenso
/s/ Michael V. Pappagallo
- --------------------------- Vice President - March 26, 2003
Michael V. Pappagallo Chief Financial Officer
/s/ Glenn G. Cohen
- --------------------------- Vice President - March 26, 2003
Glenn G. Cohen Treasurer
/s/ Paul Westbrook Director of Accounting March 26, 2003
- ---------------------------
Paul Westbrook
51
Kimco Realty Corporation
Certification
I, Milton Cooper, Chief Executive Officer, certify that:
1. I have reviewed this annual report on Form 10-K of Kimco Realty
Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: March 26, 2003
/s/ Milton Cooper
Milton Cooper
Chief Executive Officer
52
Kimco Realty Corporation
Certification
I, Michael V. Pappagallo, Chief Financial Officer, certify that:
1. I have reviewed this annual report on Form 10-K of Kimco Realty
Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: March 26, 2003
/s/ Michael V. Pappagallo
Michael V. Pappagallo
Chief Financial Officer
53
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 No.
-----------
KIMCO REALTY CORPORATION AND SUBSIDIARIES
Report of Independent Accountants 55
Consolidated Financial Statements and Financial Statement Schedules:
Consolidated Balance Sheets as of December 31, 2002 and 2001 56
Consolidated Statements of Income for the years ended
December 31, 2002, 2001 and 2000 57
Consolidated Statements of Comprehensive Income for the
years ended December 31, 2002, 2001 and 2000 58
Consolidated Statements of Stockholders' Equity
for the years ended December 31, 2002, 2001 and 2000 59
Consolidated Statements of Cash Flows for the years ended
December 31, 2002, 2001 and 2000 60
Notes to Consolidated Financial Statements 61
Financial Statement Schedules:
II. Valuation and Qualifying Accounts 87
III. Real Estate and Accumulated Depreciation 88
54
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
of Kimco Realty Corporation:
In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects, the financial position of Kimco
Realty Corporation and Subsidiaries (collectively, the "Company") at December
31, 2002 and 2001, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2002, 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
accompanying index 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
auditing standards generally accepted in the United States of America, which
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.
As discussed in Note 1 to the consolidated financial statements, effective
January 1, 2002 the Company adopted the provisions of Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets," which requires that the results of operations, including any
gain or loss on sale, relating to real estate that has been disposed of or is
classified as held for sale after initial adoption be reported in discontinued
operations for all periods presented.
/s/ PricewaterhouseCoopers LLP
New York, New York
March 18, 2003
55
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
December 31, December 31,
2002 2001
----------- -----------
Assets:
Real Estate
Rental property
Land $ 518,268 $ 540,927
Building and improvements 2,666,626 2,454,559
----------- -----------
3,184,894 2,995,486
Less, accumulated depreciation and amortization 516,558 452,878
----------- -----------
2,668,336 2,542,608
Real estate under development 212,765 204,530
Undeveloped land parcels 1,312 1,348
----------- -----------
Real estate, net 2,882,413 2,748,486
Investment and advances in real estate joint ventures 412,672 272,920
Other real estate investments 99,542 7,613
Mortgages and other financing receivables 94,024 53,611
Cash and cash equivalents 35,962 93,847
Marketable securities 66,992 82,997
Accounts and notes receivable 55,012 48,074
Deferred charges and prepaid expenses 50,149 38,031
Other assets 60,112 39,200
----------- -----------
$ 3,756,878 $ 3,384,779
=========== ===========
Liabilities & Stockholders' Equity:
Notes payable $ 1,302,250 $ 1,035,250
Mortgages payable 230,760 286,929
Construction loans payable 43,972 5,900
Accounts payable and accrued expenses 94,784 68,323
Dividends payable 59,646 57,345
Other liabilities 24,198 32,573
----------- -----------
1,755,610 1,486,320
----------- -----------
Minority interests in partnerships 93,940 8,375
----------- -----------
Commitments and contingencies
Stockholders' Equity
Preferred stock, $1.00 par value, authorized 5,000,000 shares
Class A Preferred Stock, $1.00 par value, authorized 345,000 shares
Issued and outstanding 300,000 shares 300 300
Aggregate liquidation preference $75,000
Class B Preferred Stock, $1.00 par value, authorized 230,000 shares
Issued and outstanding 200,000 shares 200 200
Aggregate liquidation preference $50,000
Class C Preferred Stock, $1.00 par value, authorized 460,000 shares
Issued and outstanding 400,000 shares 400 400
Aggregate liquidation preference $100,000
Class D Convertible Preferred Stock, $1.00 par value, authorized 700,000 shares
Issued and outstanding 0 and 92,390 shares, respectively -- 92
Aggregate liquidation preference $0 and $23,098, respectively
Common stock, $.01 par value, authorized 200,000,000 shares
Issued and outstanding 104,601,828 and 103,352,570 shares, respectively 1,046 1,034
Paid-in capital 1,984,820 1,976,442
Cumulative distributions in excess of net income (85,367) (93,131)
----------- -----------
1,901,399 1,885,337
Accumulated other comprehensive income 7,401 7,310
Notes receivable from officer stockholders (1,472) (2,563)
----------- -----------
1,907,328 1,890,084
----------- -----------
$ 3,756,878 $ 3,384,779
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
56
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Year Ended December 31,
-----------------------------------
2002 2001 2000
--------- --------- ---------
Real estate operations:
Revenues from rental property $ 450,829 $ 450,408 $ 441,336
--------- --------- ---------
Rental property expenses:
Rent 12,392 12,649 12,205
Real estate taxes 62,991 55,717 53,931
Operating and maintenance 47,214 45,759 41,373
--------- --------- ---------
122,597 114,125 107,509
--------- --------- ---------
328,232 336,283 333,827
Equity in income of real estate joint ventures, net 35,569 20,217 14,570
Minority interests in income of partnerships, net (2,430) (1,682) (2,054)
Income from other real estate investments 16,038 38,113 7,710
Mortgage financing income 19,424 2,318 1,557
Gain on sale of development properties 15,879 13,418 --
Management and other fee income 14,193 7,797 6,131
Depreciation and amortization (74,223) (71,717) (69,052)
--------- --------- ---------
Income from real estate operations 352,682 344,747 292,689
--------- --------- ---------
Other investments:
Interest, dividends and other investment income 18,557 17,286 16,432
Other income/(loss), net 2,532 (2,184) (1,803)
--------- --------- ---------
21,089 15,102 14,629
--------- --------- ---------
Interest expense (86,896) (88,592) (91,870)
General and administrative expenses (31,904) (28,680) (25,485)
Gain on early extinguishment of debt 19,033 -- --
Adjustment of property carrying values (12,530) -- --
Gain on disposition of operating properties, net -- 3,040 3,962
--------- --------- ---------
Income from continuing operations before income taxes 261,474 245,617 193,925
Provision for income taxes (12,904) (19,376) --
--------- --------- ---------
Income from continuing operations 248,570 226,241 193,925
--------- --------- ---------
Discontinued operations:
Income/(loss) from discontinued operating properties (including
adjustment of property carrying values of ($20,500) in 2002 and
gain on early extinguishment of debt of $3,222 in 2002) (15,680) 10,297 11,100
Gain on disposition of operating properties, net 12,778 -- --
--------- --------- ---------
Income/(loss) from discontinued operations (2,902) 10,297 11,100
--------- --------- ---------
Net income 245,668 236,538 205,025
Preferred stock dividends (18,437) (24,553) (26,328)
--------- --------- ---------
Net income available to common shareholders $227,231 $211,985 $178,697
========= ========= =========
Per common share:
Income from continuing operations
- Basic $2.20 $2.09 $1.81
========= ========= =========
- Diluted $2.19 $2.05 $1.79
========= ========= =========
Net Income
- Basic $2.18 $2.20 $1.93
========= ========= =========
- Diluted $2.16 $2.16 $1.91
========= ========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
57
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Year ended December 31,
-----------------------------------
2002 2001 2000
--------- --------- ---------
Net income $ 245,668 $ 236,538 $ 205,025
--------- --------- ---------
Other comprehensive income:
Change in unrealized gain/(loss) on marketable securities (4,456) 8,784 --
Change in unrealized gain/(loss) on interest rate swaps 3,264 (3,884) --
Change in unrealized gain on warrants 1,524 2,410 --
Change in unrealized gain on foreign currency
hedge agreements 195 -- --
Foreign currency translation adjustment (436) -- --
--------- --------- ---------
Other comprehensive income 91 7,310 --
--------- --------- ---------
Comprehensive income $ 245,759 $ 243,848 $ 205,025
========= ========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
58
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 2002, 2001 and 2000
(in thousands, except per share information)
Preferred Stock Common Stock
------------------------ ----------------------- Paid-in
Issued Amount Issued Amount Capital
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1999 1,329 $ 1,329 91,194 $ 913 $1,729,973
Net income
Dividends ($1.81 per common share; $1.9375, $2.125,
$2.0938, and $1.875 per Class A, Class B, Class
C, and Class D Depositary Share, respectively)
Issuance of common stock 3,234 31 86,718
Exercise of common stock options 289 3 4,933
Repurchase of Class D Preferred Stock (11) (11) (2,494)
Collection of notes receivable
---------- ---------- ---------- ---------- ----------
Balance, December 31, 2000 1,318 1,318 94,717 947 1,819,130
Net income
Dividends ($1.96 per common share; $1.9375, $2.125,
$2.0938, and $1.8409 per Class A, Class B, Class
C, and Class D Depositary Share, respectively)
Issuance of common stock 3,906 40 122,103
Exercise of common stock options 1,694 17 34,919
Collection of notes receivable
Conversion of Class D Preferred Stock to common stock (326) (326) 3,036 30 290
Accumulated other comprehensive income
---------- ---------- ---------- ---------- ----------
Balance, December 31, 2001 992 992 103,353 1,034 1,976,442
Net income
Dividends ($2.10 per common share; $1.9375, $2.125,
$2.0938, and $1.8409 per Class A, Class B, and
Class C Depositary Share, respectively)
Issuance of common stock 80 1 2,523
Exercise of common stock options 308 3 5,771
Collection of notes receivable
Conversion of Class D Preferred Stock to common stock (92) (92) 861 8 84
Accumulated other comprehensive income
---------- ---------- ---------- ---------- ----------
Balance, December 31, 2002 900 $ 900 104,602 $ 1,046 $1,984,820
========== ========== ========== ========== ==========
Cumulative Accumulated Notes
Distributions Other Receivable Total
in Excess Comprehensive from Officer Stockholders'
of Net Income Income Stockholders Equity
----------- ----------- ----------- -----------
Balance, December 31, 1999 $ (122,959) $ -- $ (3,821) $ 1,605,435
Net income 205,025 205,025
Dividends ($1.81 per common share; $1.9375, $2.125,
$2.0938, and $1.875 per Class A, Class B, Class
C, and Class D Depositary Share, respectively) (195,176) (195,176)
Issuance of common stock 86,749
Exercise of common stock options (387) 4,549
Repurchase of Class D Preferred Stock (2,505)
Collection of notes receivable 262 262
----------- ----------- ----------- -----------
Balance, December 31, 2000 (113,110) -- (3,946) 1,704,339
Net income 236,538 236,538
Dividends ($1.96 per common share; $1.9375, $2.125,
$2.0938, and $1.8409 per Class A, Class B, Class
C, and Class D Depositary Share, respectively) (216,559) (216,559)
Issuance of common stock 122,143
Exercise of common stock options (850) 34,086
Collection of notes receivable 2,233 2,233
Conversion of Class D Preferred Stock to common stock (6)
Accumulated other comprehensive income 7,310 7,310
----------- ----------- ----------- -----------
Balance, December 31, 2001 (93,131) 7,310 (2,563) 1,890,084
Net income 245,668 245,668
Dividends ($2.10 per common share; $1.9375, $2.125,
$2.0938, and $1.8409 per Class A, Class B, and
Class C Depositary Share, respectively) (237,904) (237,904)
Issuance of common stock 2,524
Exercise of common stock options (555) 5,219
Collection of notes receivable 1,646 1,646
Conversion of Class D Preferred Stock to common stock --
Accumulated other comprehensive income 91 91
----------- ----------- ----------- -----------
Balance, December 31, 2002 $ (85,367) $ 7,401 $ (1,472) $ 1,907,328
=========== =========== =========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
59
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
-----------------------------------
2002 2001 2000
--------- --------- ---------
Cash flow from operating activities:
Net income $245,668 $236,538 $205,025
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 76,674 74,209 71,129
Adjustment of property carrying values 33,031 -- --
Gain on sale of development properties (15,879) (13,418) --
Gain on sale of operating properties (12,778) (3,040) (3,962)
Gain on early extinguishment of debt (22,255) -- --
Minority interests in income of partnerships, net 2,430 1,682 2,054
Equity in income of real estate joint ventures, net (35,569) (20,217) (14,570)
Income from other real estate investments (13,222) (33,518) (2,298)
Change in accounts and notes receivable (6,938) (1,956) (12,806)
Change in accounts payable and accrued expenses 12,612 3,607 (1,176)
Change in other operating assets and liabilities 15,157 43,557 7,150
--------- --------- ---------
Net cash flow provided by operating activities 278,931 287,444 250,546
--------- --------- ---------
Cash flow from investing activities:
Acquisition of and improvements to operating real estate (240,528) (63,403) (158,515)
Acquisition of and improvements to real estate under development (113,450) (107,364) --
Investment in marketable securities (39,183) (29,070) (45,616)
Proceeds from sale of marketable securities 49,396 36,427 16,055
Redemption of minority interests in real estate partnerships -- (7,133) --
Investments in joint ventures (11,419) (1,382) --
Reimbursements of investments in joint ventures 12,800 -- --
Investments and advances to real estate joint ventures (161,649) (88,532) (30,066)
Reimbursements of advances to real estate joint ventures 16,665 24,824 2,400
Other real estate investments (69,288) -- --
Reimbursements of advances to other real estate investments 1,179 -- --
Investments and advances to affiliated companies -- (100) (6,866)
Investment in mortgage loans receivable (123,242) (36,099) --
Collection of mortgage loans receivable 89,053 5,952 2,967
Collection of note receivable 400 -- --
Investment in and advances received from designation rights 263 -- --
Proceeds from sale of operating properties 84,139 46,766 28,015
Proceeds from sale of development properties 108,209 61,921 --
--------- --------- ---------
Net cash flow used for investing activities (396,655) (157,193) (191,626)
--------- --------- ---------
Cash flow from financing activities:
Principal payments on debt, excluding
normal amortization of rental property debt (30,689) (4,587) (17,024)
Principal payments on construction loan financings (801) -- --
Principal payments on rental property debt (5,931) (5,126) (4,510)
Repayment of medium-term note (110,000) -- (60,000)
Proceeds from issuance of medium-term notes 102,000 -- 210,000
Repayment of senior notes -- -- (100,000)
Proceeds from issuance of senior notes 235,000 -- --
Repayment of borrowings under senior term loan -- -- (52,000)
Borrowings under revolving credit facilities 269,000 10,000 90,000
Repayment of borrowings under revolving credit facilities (229,000) (55,000) (45,000)
Financing origination costs -- -- (2,863)
Proceeds from mortgage financings 28,900 51,230 44,396
Proceeds from construction loan financings 38,873 -- --
Payment of unsecured obligation (11,300) -- (18,172)
Dividends paid (235,602) (209,785) (189,896)
Payment for repurchase of stock -- -- (2,505)
Proceeds from issuance of stock 9,389 157,767 79,675
--------- --------- ---------
Net cash flow provided by (used for) financing activities 59,839 (55,501) (67,899)
--------- --------- ---------
Change in cash and cash equivalents (57,885) 74,750 (8,979)
Cash and cash equivalents, beginning of year 93,847 19,097 28,076
--------- --------- ---------
Cash and cash equivalents, end of year $ 35,962 $ 93,847 $ 19,097
========= ========= =========
Interest paid during the year $ 93,066 $ 89,016 $ 89,857
========= ========= =========
Income taxes paid during the year $ 12,035 $ 24,888 $ --
========= ========= =========
Supplemental schedule of noncash investing/financing activities:
Acquisition of real estate interests by assumption of mortgage debt $ 3,477 $ 17,220 $ 30,986
========= ========= =========
Acquisition of real estate interest by issuance of convertible
downREIT units $ 80,000 $ -- $ --
========= ========= =========
Acquisition of real estate through purchase of partnership interests $ 6,638 $ -- $ --
========= ========= =========
Investment in real estate joint ventures by issuance of stock
and contribution of property $ -- $ 3,420 $ --
========= ========= =========
Disposition of real estate interests by assignment of mortgage debt $ 28,747 $ -- $ 9,124
========= ========= =========
Proceeds held in escrow from sale of real estate interests $ 5,433 $ -- $ 2,700
========= ========= =========
Notes received upon disposition of real estate interests $ -- $ 400 $ --
========= ========= =========
Notes received upon exercise of stock options $ 555 $ 850 $ 387
========= ========= =========
Declaration of dividends paid in succeeding period $ 59,646 $ 57,345 $ 50,570
========= ========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
60
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 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 and (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.
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, 2002, 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, 2002, the Company's five largest tenants include Kmart
Corporation, The Home Depot, Kohl's, TJX Companies and Wal-Mart,
which represented approximately 4.5%, 2.8%, 2.7%, 2.5% and 1.9%,
respectively, of the Company's annualized base rental revenues,
including the proportionate share of base rent of 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 and operation of retail shopping
centers. The Company does not distinguish 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.
Principles of Consolidation and Estimates
The accompanying Consolidated Financial Statements include the accounts
of the Company, its subsidiaries, all of which are wholly-owned,
and all partnerships in which the Company has a controlling
interest. All significant intercompany balances and transactions
have been eliminated in consolidation.
Generally accepted accounting principles ("GAAP") require the Company's
management 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 a reporting period. The most
significant assumptions and estimates relate to the valuation of
real estate, depreciable lives, revenue recognition and the
recoverability 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.
61
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
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 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.
Depreciation and amortization are provided on the straight-line method
over the estimated useful lives of the assets, as follows:
Buildings 15 to 39 years
Fixtures and leasehold improvements Terms of leases or useful
lives, whichever is shorter
Expenditures for maintenance and repairs are charged to operations as
incurred. Significant renovations are capitalized.
Real Estate Under Development
Real estate under development represents the ground-up development of
neighborhood and community shopping centers which are held for sale
upon completion. These properties are carried at cost and no
depreciation is recorded on these assets. The cost of land and
buildings under development include 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 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 these assets is less than the net
carrying value, the carrying value would be written down 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 equity in earnings and cash contributions
and distributions.
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. To the extent impairment has occurred, the loss shall
be measured as the excess of the carrying amount of the investment
over the fair value of the investment.
Marketable Securities
The Company classifies its existing marketable equity securities as
available-for-sale in accordance with the provisions of Statement
of Financial Accounting Standard 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 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 discounts
to maturity.
62
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
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
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. 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.
Income Taxes
The Company and its subsidiaries file a consolidated federal income tax
return. 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 Internal Revenue Code, as
amended (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 carryforwards. 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 our 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 accumulated other
comprehensive income, 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/(loss), net in the Consolidated Statements of Income.
Derivative / Financial Instruments
Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standard No. 133, Accounting for Derivative Instruments
and Hedging Activities ("FASB No. 133"), as amended. FASB No. 133
establishes accounting and reporting standards for derivative
instruments. This accounting standard requires the Company to
measure derivative instruments at fair value and to record 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. 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.
63
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
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, 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. In accordance with the
provisions of FASB No. 133, these derivative instruments were
designated and qualified as either cash flow or fair value hedges
(see Note 15).
Earnings Per Share
On October 24, 2001, the Company's Board of Directors declared a
three-for-two split (the "Stock Split") of the Company's common
stock which was effected in the form of a stock dividend paid on
December 21, 2001 to stockholders of record on December 10, 2001.
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):
2002 2001 2000
--------- --------- ---------
Computation of Basic Earnings Per Share:
Income from continuing operations applicable to common shares $ 230,133 $ 201,688 $ 167,597
Income/(1oss) from discontinued operations (2,902) 10,297 11,100
--------- --------- ---------
Net income applicable to common shares $ 227,231 $ 211,985 $ 178,697
========= ========= =========
Weighted average common shares outstanding 104,458 96,317 92,688
========= ========= =========
Basic Earnings Per Share:
Income from continuing operations $ 2.20 $ 2.09 $ 1.81
Income/(loss) from discontinued operations (.02) 0.11 0.12
--------- --------- ---------
Net income $ 2.18 $ 2.20 $ 1.93
========= ========= =========
Computation of Diluted Earnings Per Share:
Income from continuing operations applicable to common shares $ 230,133 $ 201,688 $ 167,597
Dividends on Class D Convertible Preferred Stock -- 6,115 (a)
Dividends on convertible downREIT units 1,423 -- --
--------- --------- ---------
Income from continuing operations for diluted earnings per share 231,556 207,803 167,597
Income/(loss) from discontinued operations (2,902) 10,297 11,100
--------- --------- ---------
Net income for diluted earnings per share $ 228,654 $ 218,100 $ 178,697
========= ========= =========
Weighted average common shares outstanding - Basic 104,458 96,317 92,688
Effect of dilutive securities:
Stock options 999 1,139 965
Assumed conversion of Class D Preferred stock to common stock 4 3,707 (a)
Assumed conversion of downREIT units 508 -- --
--------- --------- ---------
Shares for diluted earnings per share 105,969 101,163 93,653
========= ========= =========
Diluted Earnings Per Share:
Income from continuing operations $ 2.19 $ 2.05 $ 1.79
Income/(loss) from discontinued operations (.03) 0.11 0.12
--------- --------- ---------
Net income $ 2.16 $ 2.16 $ 1.91
========= ========= =========
(a) In 2000, the effect of the assumed conversion of the Class D
Preferred Stock had an anti-dilutive effect upon the calculation of
net income per common share. Accordingly, the impact of such
conversion has not been included in the determination of diluted
earnings per common share.
64
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company applies 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), issued in March 2000, to
account for stock-based employee compensation plans. Under this
method, compensation cost is recognized for awards of shares of
common stock or stock options to directors, officers and employees
of the Company and consolidated subsidiaries only if the quoted
market price of the stock at the grant date (or other measurement
date, if later) is greater than the amount the grantee must pay to
acquire the stock. 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:
Year Ended December 31,
---------------------------------------
2002 2001 2000
---------------------------------------
Net income, as reported $ 245,668 $ 236,538 $ 205,025
Deduct: Total stock based employee
compensation expense determined
under fair value based method
for all awards (3,153) (2,702) (2,190)
--------- --------- ---------
Pro Forma Net Income - Basic $ 242,515 $ 233,836 $ 202,835
========= ========= =========
Earnings Per Share
Basic - as reported $ 2.18 $ 2.20 $ 1.93
========= ========= =========
Basic - pro forma $ 2.15 $ 2.17 $ 1.90
========= ========= =========
Net income for diluted earnings per share $ 228,654 $ 218,100 $ 178,697
Deduct: Total stock based employee
compensation expense determined
under fair value based method
for all awards (3,153) (2,702) (2,190)
--------- --------- ---------
Pro Forma Net Income - Diluted $ 225,501 $ 215,398 $ 176,507
========= ========= =========
Earnings Per Share
Diluted - as reported $ 2.16 $ 2.16 $ 1.91
========= ========= =========
Diluted - pro forma $ 2.13 $ 2.13 $ 1.88
========= ========= =========
65
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
New Accounting Pronouncements
In August 2001, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets ("FASB No. 144"), which supercedes SFAS No. 121.
FASB No. 144 requires that long-lived assets that are to be
disposed of by sale be measured at the lower of book value or fair
value less cost to sell. FASB No. 144 retains the requirements of
SFAS No. 121 regarding impairment loss recognition and
measurement. In addition, it requires that one accounting model be
used for long-lived assets to be disposed of by sale and broadens
the presentation of discontinued operations to include more
disposal transactions. Effective January 1, 2002, the Company
adopted FASB No. 144. The adoption of FASB No. 144 did not have a
material adverse impact on the Company's financial position or
results of operations (see Note 5).
In April 2002, the FASB issued SFAS No. 145, Rescission of FASB No. 4,
44 and 64, Amendment of FASB No. 13 and Technical Corrections
("FASB No. 145"). This statement eliminates the requirement to
report gains and losses from extinguishment of debt as
extraordinary unless they meet the criteria of APB Opinion 30. Debt
extinguishments that were classified as extraordinary in prior
periods presented that do not meet the criteria of APB Opinion 30
shall be reclassified. FASB No. 145 is effective for fiscal years
beginning after May 15, 2002. During 2002, the Company elected
early adoption of the provisions of FASB No. 145. The impact of
adopting this statement did not have a material adverse impact on
the Company's financial position or results of operations.
In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities ("FASB 146"). This
statement addresses financial accounting and reporting for costs
associated with exit or disposal activities and nullifies Emerging
Issues Task Force ("EITF") Issue No. 94-3, Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit
an Activity (including Certain Costs Incurred in a Restructuring).
For purpose of this statement, an exit or disposal activity is
initiated when management, having the authority to approve the
action, commits to an exit or disposal plan or otherwise disposes
of a long-lived asset (disposal group) and, if the activity
involves the termination of employees, the criteria for a plan of
termination of this statement are met. The provisions of this
statement shall be effective for exit or disposal activities
initiated after December 31, 2002. The impact of the adoption of
FASB No. 146 is not expected to have a material adverse impact on
the Company's financial position or results of operations.
In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN
45"), Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others
(an interpretation of FASB Statements No. 5, 57 and 107 and
rescission of FASB Interpretation No. 34). FIN 45 clarifies the
requirements of FASB Statement No. 5, Accounting for Contingencies.
It requires that upon issuance of a guarantee, the guarantor must
recognize a liability for the fair value of the obligation it
assumes under the guarantee regardless of whether or not the
guarantor receives separate identifiable consideration (i.e., a
premium). The Company has adopted the new disclosure requirements,
which are effective beginning with 2002 calendar year-end
financials. FIN 45's provision for initial recognition and
measurement are effective on a prospective basis to guarantees
issued or modified after December 31, 2002. The adoption of FIN 45
is not expected to have a material adverse impact on the Company's
financial position or results of operations.
In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation - Transition and Disclosure an amendment
of FASB Statement No. 123 ("FASB No. 148"). This statement amends
FASB Statement No. 123, Accounting for Stock-Based Compensation, to
provide alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee
compensation. In addition, this statement amends the disclosure
requirements of FASB Statement No. 123 to require prominent
disclosures in both annual and interim financial statements about
the method of accounting for stock-based employee compensation and
the effect of the method used on reported results. The transition
and annual disclosure provisions of FASB No. 148 shall be applied
for fiscal years ending after December 15, 2002. The new interim
disclosure provisions are effective for the first interim period
beginning after December 15, 2002. Effective January 1, 2003, the
Company will adopt the prospective method provisions of FASB No.
148, which will apply the recognition provisions of FASB No. 123 to
all employee awards granted, modified or settled after January 1,
2003. The adoption is not expected to have a material adverse
impact on the Company's financial position or results of
operations.
66
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
In January 2003, the FASB issued Interpretation No. 46, Consolidation
of Variable Interest Entities ("FIN 46"), the primary objective of
which is to provide guidance on the identification of entities for
which control is achieved through means other than voting rights
("variable interest entities" or "VIEs") and to determine when and
which business enterprise should consolidate the VIE (the "primary
beneficiary"). This new model applies when either (i) the equity
investors (if any) do not have a controlling financial interest or
(ii) the equity investment at risk is insufficient to finance that
entity's activities without additional financial support. In
addition, FIN 46 requires additional disclosures. The Company is
assessing the impact of this interpretation on its accounting for
its investments in unconsolidated joint ventures. The Company's
exposure to losses associated with these unconsolidated joint
ventures is limited to its carrying value in these investments (see
Note 6).
Reclassifications
Certain reclassifications of prior years' amounts have been made to
conform with the current year presentation.
2. Property Acquisitions, Developments and Other Investments:
Operating Properties -
During the years 2002, 2001 and 2000 the Company acquired wholly owned
real estate interests, in separate transactions, at aggregate costs
of approximately $258.7 million, $21.1 million and $62.5 million,
respectively.
Ground-Up Development Properties -
Effective January 1, 2001, the Company elected taxable REIT subsidiary
status for its wholly owned development subsidiary, Kimco
Developers, Inc. ("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 2002, 2001 and 2000 certain subsidiaries and
affiliates of the Company expended approximately $148.6 million,
$119.4 million and $74.0 million, respectively, in connection with
the purchase of land and construction costs related to its
ground-up development projects.
Other Investments -
During October 2002, the Company purchased from various joint venture
partners, the remaining interest in a property located in
Harrisburg, PA for an aggregate purchase price of $0.5 million.
This property is now 100% owned by the Company.
During June 2001, the Company purchased from an unaffiliated partner
the remaining 20% interest in a property located in Skokie, IL for
an aggregate purchase price of approximately $0.8 million. The
property is now 100% owned by the Company.
Additionally, during June 2001, the Company purchased from an
unaffiliated partner the remaining 10% interest in a property
located in Smithtown, NY for an aggregate purchase price of
approximately $2.5 million. The property is now 100% owned by the
Company.
During December 2001, the Company purchased the remaining 10% interest
in Kimco Select Investments, a New York general partnership for an
aggregate price of approximately $1.7 million. Kimco Select
Investments was formed in 1997 to provide the Company, through its
90% ownership interest, the opportunity to make investments outside
of its core neighborhood and community shopping center business.
These property acquisitions and other investments have been funded
principally through the application of proceeds from the Company's
public unsecured debt issuances, equity offerings and proceeds from
mortgage financings (see Notes 10, 11 and 16).
67
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
3. Dispositions of Real Estate:
During 2002, the Company, (i) disposed of, in separate transactions, 12
operating properties for an aggregate sales price of approximately
$74.5 million, including the assignment/repayment of approximately
$22.6 million of mortgage debt encumbering three of the properties
and (ii) terminated five leasehold positions in locations where a
tenant in bankruptcy had rejected its lease. These transactions
resulted in net gains of approximately $12.8 million (see Note 5).
During 2002, KDI sold four of its recently completed projects and eight
out-parcels for approximately $128.7 million including the
assignment of approximately $17.7 million in mortgage debt
encumbering one of the properties. The sales resulted in pre-tax
gains of approximately $15.9 million.
During 2001, the Company, in separate transactions, disposed of three
operating properties (including the sale of a property to KIR) and
a portion of another operating property, comprising approximately
0.6 million square feet of GLA. Cash proceeds from these
dispositions aggregated approximately $46.7 million which resulted
in a net gain of approximately $3.0 million. Cash proceeds from the
disposition of the operating property in Elyria, OH, totaling $5.8
million, together with an additional $7.1 million cash investment,
was used to acquire an exchange shopping center property located in
Lakeland, FL during August 2001.
During 2001, KDI sold two of its recently completed projects and five
out-parcels for approximately $61.3 million, which resulted in
pre-tax profits of $13.4 million.
4. Adjustment of Property Carrying 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 the fourth quarter of 2002, that its
investment in four operating properties comprised of an aggregate
0.4 million square feet of GLA with an aggregate net book value of
approximately $23.8 million, may not be fully recoverable. Based
upon management's assessment of current market conditions and lack
of demand for the properties, the Company has reduced its
anticipated holding period of these investments. As a result of the
reduction in the anticipated holding period, together with a
reassessment of the potential future operating income of the
properties and the effects of current market conditions, the
Company determined that its investment in these assets was not
fully recoverable and has recorded an adjustment of property
carrying values aggregating approximately $12.5 million.
5. Discontinued Operations and Assets Held for Sale:
In August 2001, the FASB issued Statement of Financial Accounting
Standard No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets ("FASB 144"). FASB 144 established criteria
beyond that previously specified in Statement of Financial
Accounting Standard No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of
("FASB 121"), to determine when a long-lived asset is classified as
held for sale, and it provides a single accounting model for the
disposal of long-lived assets. FASB 144 was effective beginning
January 1, 2002. In accordance with FASB 144, the Company now
reports as discontinued operations assets held for sale (as defined
by FASB 144) and assets sold in the current period. All results of
these discontinued operations, are included in a separate component
of income on the Consolidated Statements of Income under
Discontinued operations. This change has resulted in certain
reclassifications of 2001 and 2000 financial statement amounts.
68
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The components of Income/(loss) from operations related to discontinued
operations for each of the three years in the period ended December
31, 2002 are shown below. These include the results of operations
through the date of each respective sale for properties sold during
2002 and a full year of operations for those assets classified as
held for sale as of December 31, 2002, (dollars in thousands):
2002 2001 2000
-------- -------- --------
Discontinued Operations:
Revenues from rental property $ 9,275 $ 18,208 $ 18,070
Rental property expenses (4,455) (4,280) (4,456)
-------- -------- --------
Income from property operations 4,820 13,928 13,614
Depreciation and amortization (2,451) (2,492) (2,078)
Interest expense (787) (840) (230)
Gain on early extinguishment of debt 3,222 -- --
Adjustment of property carrying values (20,500) -- --
Other 16 (299) (206)
-------- -------- --------
Income/(loss) from discontinued operating properties (15,680) 10,297 11,100
Gain on disposition of operating properties, net 12,778 -- --
-------- -------- --------
Income/(loss) from discontinued operations $ (2,902) $ 10,297 $ 11,100
======== ======== ========
During November 2002, the Company disposed of an operating property
located in Chicago, IL. Net proceeds from this sale of
approximately $8.0 million were accepted by a lender in full
satisfaction of an outstanding mortgage loan of approximately $11.5
million. The Company recognized a gain on early extinguishment of
debt of approximately $3.2 million.
During December 2002, the Company identified two operating properties,
comprised of approximately 0.2 million square feet of GLA, as "Held
for Sale" in accordance with FASB No. 144. The book value of these
properties, aggregating approximately $28.4 million, net of
accumulated depreciation of approximately $2.9 million, exceeded
their estimated fair value. The Company's determination of the fair
value of these properties, aggregating approximately $7.9 million,
is based upon executed contracts of sale with third parties less
estimated selling costs. As a result, the Company recorded an
adjustment of property carrying values of $20.5 million. This
adjustment is included, along with the related property operations
for the current and comparative years, in the caption Income/(loss)
from discontinued operations on the Company's Consolidated
Statements of Income.
6. 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. As of December 31, 2002, KIR has 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. The Company has a 43.3%
non-controlling limited partnership interest in KIR and accounts
for its investment under the equity method of accounting.
During 2002, the limited partners in KIR contributed $55.0 million
towards their respective capital commitments, including $23.8
million by the Company. As of December 31, 2002, KIR had unfunded
capital commitments of $129.0 million, including $55.9 million from
the Company.
69
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The Company's equity in income from KIR for the years ended December
31, 2002, 2001 and 2000 was approximately $16.3 million, $13.2
million and $9.5 million, respectively.
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, 2002, 2001 and 2000, the Company (i) earned management
fees of approximately $4.4 million, $3.3 million and $2.0 million,
respectively, (ii) received reimbursement of administrative fees of
approximately $1.0 million, $1.4 million and $1.4 million,
respectively, and (iii) earned leasing commissions of approximately
$0.8 million, $0.3 million and $0.1 million, respectively.
During 2002, KIR purchased five shopping center properties, in separate
transactions, aggregating approximately 1.8 million square feet of
GLA for approximately $213.5 million, including the assumption of
approximately $63.1 million of mortgage debt encumbering two of the
properties.
During July 2002, KIR disposed of a shopping center property in Aurora,
IL for an aggregate sales price of approximately $2.4 million,
which represented the approximate book value of the property.
As of December 31, 2002, the KIR portfolio was comprised of 68
shopping center properties aggregating approximately 14.0 million
square feet of GLA located in 21 states.
During 2002, KIR obtained individual non-recourse, non-cross
collateralized fixed-rate ten year mortgages aggregating
approximately $170.3 million on seven of its previously
unencumbered properties with rates ranging from 5.95% to 7.38% per
annum. The net proceeds were used to finance the acquisition of
various shopping center properties.
During the year ended December 31, 2001, KIR purchased 12 shopping
center properties (including one property from the Company for
$37.0 million), in separate transactions, aggregating 2.9 million
square feet of GLA for approximately $349.0 million, including the
assumption of approximately $40.2 million of mortgage debt.
During December 2001, KIR disposed of a shopping center property in
Lake Mary, FL for an aggregate sales price of approximately $2.4
million. This disposition resulted in a gain of approximately $0.5
million. Proceeds from this sale were used to acquire an exchange
shopping center property.
During 2001, KIR obtained individual non-recourse, non-cross
collateralized fixed-rate mortgages aggregating approximately
$280.0 million on 14 of its previously unencumbered properties with
terms ranging from 7 to 10 years and rates ranging from 6.76% to
7.69% per annum. The net proceeds were used to finance the
acquisition of various shopping center properties.
KIR maintains a secured revolving credit facility with a syndicate of
banks, which is scheduled to expire in November 2003. This facility
is collateralized by the unfunded subscriptions of certain
partners, including those of the Company. The facility has an
aggregate availability of up to $100.0 million based upon the
amount of unfunded subscription commitments of certain partners.
During January 2003, the aggregate availability under the credit
facility was reduced to $90.0 million. Under the terms of the
facility, funds may be borrowed for general corporate purposes,
including the acquisition of institutional quality properties.
Borrowings under the facility accrue interest at LIBOR plus 0.80%.
As of December 31, 2002, there was $15.0 million outstanding under
this facility.
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. The Company has committed a total
equity investment of up to CAD $250.0 million Canadian dollars
("CAD") for the acquisition of retail properties and development
projects. Capital contributions will only be required as suitable
opportunities arise and are agreed to by the Company and RioCan.
During 2002, the RioCan Venture acquired 24 shopping center
properties and four development properties, in separate
transactions, comprising approximately 5.7 million square feet of
GLA for an aggregate purchase price of approximately CAD $683.7
million (approximately USD $435.8 million) including the assumption
of approximately CAD $321.5 million (approximately USD $203.1
million) in mortgage debt encumbering 13 of the properties.
70
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
During October 2001, the RioCan Venture acquired a portfolio of four
shopping center properties located in British Columbia for an
aggregate purchase price of approximately CAD $170.0 million
(approximately USD $107.8 million) including the assumption of
approximately CAD $108.5 million (approximately USD $68.8 million)
in mortgage debt.
As of December 31, 2002, the RioCan Venture was comprised of 28
operating properties and four development properties consisting of
approximately 6.7 million square feet of GLA.
Kimco / G.E. Joint 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 2002, GECRE and the Company contributed approximately $39.0
million and $9.8 million, respectively, towards their capital
commitments. 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
4.25% and have maturities of less than one year. As of December 31,
2002, outstanding balances relating to short-term interim financing
is $17.3 million each for GECRE and the Company.
During 2002, KROP purchased 16 shopping centers aggregating 1.6 million
square feet of GLA for approximately $177.8 million, including the
assumption of approximately $29.5 million of mortgage debt
encumbering three of the properties.
During October 2002, KROP disposed of a shopping center in Columbia, MD
for an aggregate sales price of approximately $2.9 million, which
resulted in a gain of approximately $0.7 million.
During 2002, KROP obtained a cross-collateralized mortgage with a
five-year term aggregating $73.0 million on eight properties with
an interest rate of Libor plus 1.8%. Upon the sale of one of the
collateralized properties, $1.9 million was repaid during 2002. In
order to mitigate the risks of interest rate fluctuations
associated with this variable rate obligation, KROP entered into an
interest rate cap agreement for the notional value of this
mortgage.
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 of shopping centers which are
either owned or held under long-term operating leases.
During 2002, the Company acquired seven former Service Merchandise
locations, in separate transactions, through a venture in which the
Company has a 42.5% non-controlling interest. These properties were
purchased for an aggregate purchase price of approximately $20.9
million. In November 2002, the joint venture obtained mortgages on
two of these locations for approximately $7.0 million. The venture
has signed leases for six of these locations and is actively
negotiating with other retailers to lease the remaining location.
During July 2002, the Company acquired a property located in Kalamazoo,
MI, through a joint venture in which the Company has a 50%
non-controlling interest. The property was purchased for an
aggregate purchase price of approximately $6.0 million.
71
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
During December 2002, the Company acquired an out-parcel of an existing
property located in Tampa, Fl, through a joint venture in which the
Company has a 50% non-controlling interest. The property was
purchased for an aggregate purchase price of approximately $4.9
million.
Additionally, during 2002, the Company, in separate transactions,
disposed of two operating properties through a joint venture in
which the Company has a 50% non-controlling interest. The
properties were located in Tempe, AZ and Glendale, AZ and sold for
approximately $19.2 million and $1.7 million, respectively.
During March 2001, the Company exercised its option to acquire a 50%
non-controlling interest in a joint venture from KC Holdings, Inc.
("KC Holdings"), an entity formed in connection with the Company's
initial public stock offering in November 1991. This joint venture
consists of three shopping center properties located in Buffalo,
NY, comprising approximately 0.4 million square feet of GLA. The
joint venture was acquired for an aggregate option price of
approximately $3.5 million, paid approximately $2.7 million in cash
and $0.8 million in shares of the Company's common stock (29,638
shares valued at $27.67 per share). The members of the Company's
Board of Directors who are not also shareholders of KC Holdings,
unanimously approved the Company's purchase of this joint venture
investment.
Summarized financial information for the recurring operations of these
real estate joint ventures, is as follows (in millions):
December 31,
-------------------------
2002 2001
-------- --------
Assets:
Real estate, net $2,511.8 $1,676.4
Other assets 132.5 94.1
-------- --------
$2,644.3 $1,770.5
======== ========
Liabilities and Partners' Capital:
Notes Payable $ 49.6 $ 15.0
Mortgages payable 1,720.6 1,189.5
Other liabilities 116.6 72.6
Minority Interest 10.8 14.8
Partners' capital 746.7 478.6
-------- --------
$2,644.3 $1,770.5
======== ========
Year Ended December 31,
-----------------------------------------
2002 2001 2000
------- ------- -------
Revenues from rental property $ 314.8 $ 209.4 $ 135.0
------- ------- -------
Operating expenses (78.2) (52.9) (32.8)
Interest (108.0) (74.5) (44.8)
Depreciation and amortization (41.6) (31.0) (19.8)
Other, net (4.5) (3.0) (1.6)
------- ------- -------
(232.3) (161.4) (99.0)
------- ------- -------
Net income $ 82.5 $ 48.0 $ 36.0
======= ======= =======
Other liabilities in the accompanying Consolidated Balance Sheets
include accounts with certain real estate joint ventures totaling
approximately $5.3 million and $8.7 million at December 31, 2002
and 2001, 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.
72
7. Other Real Estate Investments:
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
leasehold positions and expire in December 2004 for the fee owned
locations. During the marketing period, the Ward Venture will be
responsible for all carrying costs associated with the properties
until the property is designated to a user. As of December 31,
2002, there were 12 properties which continue to be marketed.
During 2002, the Ward Venture completed transactions on 32 properties,
and the Company recognized pre-tax profits of approximately $11.3
million.
During 2001, the Ward Venture completed transactions on 271 properties,
and the Company recognized pre-tax profits from the Ward Venture of
approximately $34.6 million.
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 FASB No. 13
(as amended).
During 2002, four of these properties were sold whereby the proceeds
from the sales were used to paydown the mortgage debt by
approximately $9.6 million. As of December 31, 2002, the remaining
26 properties were encumbered by third-party non-recourse debt of
approximately $86.0 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 general 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.
The net investment in leveraged lease reflects the original cash
investment adjusted by remaining net rentals of approximately $94.8
million, estimated unguaranteed residual value of approximately
$65.2 million, non-recourse mortgage debt of approximately ($86.0)
million and unearned and deferred income of approximately ($70.0)
million.
Kmart Venture -
During July 2002, the Company formed the Kmart Venture in which the
Company has a 60% controlling participation for purposes of
acquiring asset designation rights for 54 former Kmart locations.
The total commitment to Kmart by the Kmart Venture, prior to the
profit sharing arrangement commencing, is approximately $43.0
million. As of December 31, 2002, the Kmart Venture has completed
transactions on 35 properties and has funded the total commitment
of approximately $43.0 million to Kmart.
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 17.4
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. During December 2002, Kimsouth sold its joint
venture interest in one property to its joint venture partner for
net proceeds of approximately $4.6 million and disposed of a single
property for net proceeds of approximately $2.9 million.
73
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Selected financial information for Kimsouth as of December 31, 2002, is
as follows: real estate, net of accumulated depreciation, $282.3
million; other assets $38.3 million; mortgages payable $185.0
million; other liabilities $3.6 million.
Preferred Equity Capital -
During 2002, the Company established a preferred equity program, which
provides capital to developers and owners of shopping centers.
During 2002, the Company provided, in separate transactions, an
aggregate of approximately $25.6 million in investment capital to
developers and owners of nine shopping centers.
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,
2002, 2001 and 2000 was approximately $0.8 million, $3.2 million
and $4.0 million, respectively. These amounts represent sublease
revenues during the years ended December 31, 2002, 2001 and 2000 of
approximately $13.9 million, $16.8 million and $19.0 million,
respectively, less related expenses of $11.7 million, $12.2 million
and $13.6 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 noncancellable 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): 2003,
$12.2 and $9.5; 2004, $10.7 and $8.5; 2005, $8.8 and $7.3; 2006,
$7.8 and $5.8; 2007, $5.2 and $3.9 and thereafter, $6.5 and $4.2,
respectively.
8. Mortgages and Other Financing Receivables:
During August 2001, the Company, through a joint venture in which the
Company had a 50% interest, provided $27.5 million of
debtor-in-possession financing (the "Ames Loan") to Ames Department
Stores, Inc. ("Ames"), a retailer in bankruptcy. This loan bore
interest at prime plus 6.0%, was collateralized by all real estate
owned by Ames and was scheduled to mature in August 2003.
During September 2002, the Ames Loan, was restructured as a two-year
$100.0 million secured revolving loan of which the Company has a
40% interest. This revolving loan is collateralized by all of Ames'
real estate interests. The loan bears interest at 8.5% per annum
and provides for contingent interest upon the successful
disposition of the Ames properties. The outstanding balance on the
revolving loan at December 31, 2002 was approximately $4.1 million.
During March 2002, the Company provided a $15.0 million three-year loan
to Gottchalks, Inc., at an interest rate of 12.0% per annum
collateralized by three properties. The Company receives principal
and interest payment on a monthly basis. As of December 31, 2002,
the outstanding loan balance was approximately $14.3 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. As of December 31, 2002, the
outstanding loan balance was approximately $49.8 million.
During May 2002, the Company provided a $15.0 million three-year loan
to Frank's Nursery & Crafts, Inc. ("Frank's"), at an interest rate
of 10.25% per annum collateralized by 40 real estate interests.
Interest is payable quarterly in arrears. An additional $7.5
million revolving loan at an interest rate of 10.25% per annum was
also established. As of December 31, 2002 there were no borrowings
outstanding on the additional revolving loan. 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.
74
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
9. 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 $0.1 million at
December 31, 2002 and 2001.
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.
10. 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, 2002, a total principal amount of $507.25 million,
in senior fixed-rate MTNs had been issued under the MTN program
primarily 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 of the
Company. These fixed-rate notes had maturities ranging from five to
twelve years at the time of issuance and bear interest at rates
ranging from 5.98% to 7.91%. Interest on these fixed-rate senior
unsecured notes is payable semi-annually in arrears.
During July 2002, the Company issued an aggregate $102.0 million of
unsecured debt under its MTN program. These issuances consisted of
(i) an $85.0 million floating-rate MTN which matures in August 2004
and bears interest at Libor plus 0.50% per annum and (ii) a $17.0
million fixed-rate MTN which matures in July 2012 and bears
interest at 5.98% per annum. The proceeds from these MTN issuances
were used toward the repayment of a $110.0 million floating-rate
MTN which matured in August 2002. In addition, the Company entered
into an interest rate swap agreement on the $85.0 million
floating-rate MTN which effectively fixed the interest rate at
2.3725% per annum until November 2003.
During November 2002, the Company issued $35.0 million of 4.961%
fixed-rate Senior Notes due 2007 (the "2007 Notes"). Interest on
the 2007 Notes is payable semi-annually in arrears. Net proceeds
from the issuance totaling approximately $34.9 million, after
related transaction costs of approximately $0.1 million, were
primarily used to repay outstanding borrowings on the Company's
unsecured credit facilities.
Also, during November 2002, the Company issued $200.0 million of 6%
fixed-rate Senior Notes due 2012 (the "2012 Notes"). Interest on
the 2012 Notes is payable semi-annually in arrears. The Notes were
sold at 99.79% of par value. Net proceeds from the issuance
totaling approximately $198.3 million, after related transaction
costs of approximately $1.3 million, were primarily used to repay
outstanding borrowings on the Company's unsecured credit
facilities.
As of December 31, 2002, the Company has a total principal amount of
$570.0 million, in fixed-rate unsecured senior notes. These
fixed-rate notes have maturities ranging from 2003 through 2009 and
bear interest at rates ranging from 4.96% to 7.50%. Interest on
these fixed-rate senior unsecured notes is payable semi-annually in
arrears.
75
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
As of December 31, 2002, the Company had outstanding $100.0 million of
remarketed reset notes, which mature in August 2008. The interest
rate spread applicable to each period is determined pursuant to a
remarketing agreement between the Company and a financial
institution. The current interest rate is LIBOR plus 1.25% per
annum, and interest is payable quarterly in arrears. During
November 2002, the Company entered into an interest rate swap
agreement which effectively fixed the interest rate at 3.03% per
annum through August 2003.
In accordance with the terms of the Indenture, as amended, pursuant to
which the 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.
During August 2000, the Company established a $250.0 million, unsecured
revolving credit facility (the "Credit Facility") with a group of
banks which is scheduled to expire in August 2003. The Company
intends to renew the Credit Facility prior to the maturity date.
This Credit Facility has made available funds for general corporate
purposes, including the funding of property acquisitions,
development and redevelopment costs. Interest on borrowings accrues
at a spread (currently 0.65%) to LIBOR or money-market rates, as
applicable, which fluctuates in accordance with changes in the
Company's senior debt ratings. The Company's senior debt ratings
are currently A-/stable from Standard & Poors and Baa1/stable from
Moody's Investor Services. As part of this Credit Facility, the
Company has a competitive bid option where the Company may auction
up to $100.0 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 0.65%.
A facility fee of 0.15% per annum is payable quarterly in arrears.
Pursuant to the terms of the agreement, the Company, among other
things, is (a) subject to maintaining certain maximum leverage
ratios on both unsecured senior corporate and secured debt, a
minimum debt service coverage ratio and minimum unencumbered asset
and equity levels, and (b) restricted from paying dividends in
amounts that exceed 90% of funds from operations, as defined. As of
December 31, 2002, there was $40.0 million outstanding under this
Credit Facility.
During July 2002, the Company further enhanced its liquidity position
by establishing an additional $150.0 million unsecured revolving
credit facility. During December 2002, the Company paid down the
outstanding balance and terminated this facility.
The scheduled maturities of all unsecured senior notes payable as of
December 31, 2002 are approximately as follows (in millions): 2003,
$140.0; 2004, $185.0; 2005, $200.25; 2006, $85.0; 2007, $195.0 and
thereafter, $497.0.
11. Mortgages Payable:
As part of the Company's strategy to reduce its exposure to Kmart
Corporation, the Company had previously encumbered seven Kmart
sites with individual non-recourse mortgages aggregating
approximately $70.8 million. As a result of the Kmart bankruptcy
filing in January 2002 and the subsequent rejection of leases
including these encumbered sites, the Company, during July 2002,
had suspended debt service payments on these loans and began active
negotiations with the respective lenders.
During December 2002, the Company reached agreement with certain
lenders in connection with four of these locations. The Company
paid approximately $24.2 million in full satisfaction of the loans
encumbering these properties which aggregated $46.5 million and the
Company recognized a gain on early extinguishment of debt of
approximately $22.3 million (see Note 5).
During December 2002, the Company re-tenanted one location and has
brought the mortgage loan encumbering this property current.
During February 2003, the Company reached agreement with the lender in
connection with the two remaining encumbered locations. The Company
paid approximately $8.3 million in full satisfaction of these loans
which aggregated approximately $14.7 million and will recognize a
gain on early extinguishment of debt of approximately $6.2 million
during the first quarter of 2003.
During 2001, the Company obtained four individual non-recourse
fixed-rate mortgage loans providing aggregate proceeds to the
Company of approximately $51.2 million. These ten-year loans mature
in 2011 and have effective interest rates ranging from 7.31% to
7.64% per annum.
76
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
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 2023. Interest rates range from approximately 6.50%
to 9.50% (weighted average interest rate of 7.82% as of December
31, 2002). The scheduled maturities of all mortgages payable as of
December 31, 2002, are approximately as follows (in millions):2003,
$0.0; 2004, $8.8; 2005, $14.6; 2006, $33.8; 2007, $11.1 and
thereafter, $162.5.
Two of the Company's properties are encumbered by approximately $11.1
million in floating-rate, tax-exempt mortgage bond financing. The
rates on the bonds are reset annually, at which time bondholders
have the right to require the Company to repurchase the bonds. The
Company has engaged a remarketing agent for the purpose of offering
for resale those bonds that are tendered to the Company. All bonds
tendered for redemption in the past have been remarketed and the
Company has 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.
12. Construction Loans Payable:
During 2002, the Company obtained construction financing on eight
ground-up development projects for an aggregate loan amount of up
to $119.8 million, of which approximately $38.9 million has been
funded as of December 31, 2002. These loans have maturities ranging
from 18 to 36 months and a weighted average interest rate of 4.38%
at December 31, 2002.
The scheduled maturities of all construction loans payable as of
December 31, 2002, are approximately as follows (in millions):
2003, $7.3; 2004, $30.2; and 2005, $6.5.
13. KC Holdings:
To facilitate the Company's November 1991 initial public stock
offering (the "IPO"), 46 shopping center properties and certain
other assets, together with indebtedness related thereto, were
transferred to subsidiaries of KC Holdings, a newly-formed
corporation that is owned by the stockholders of the Company prior
to the IPO. The Company was granted ten-year, fixed-price
acquisition options (the "Acquisition Options") to reacquire the
real estate assets owned by KC Holdings' subsidiaries, subject to
any liabilities outstanding with respect to such assets at the time
of an option exercise. During the Acquisition Options period, which
expired in November 2001, KC Holdings' subsidiaries had conveyed 29
shopping centers and a 50% interest in a joint venture consisting
of three properties back to the Company. Additionally, KC Holdings'
subsidiaries disposed of ten additional centers in transactions
with third parties. The members of the Company's Board of Directors
who are not also shareholders of KC Holdings unanimously approved
the purchase of each of these properties that have been reacquired
by the Company from KC Holdings. The Company manages three of KC
Holdings' four remaining shopping center properties pursuant to a
management agreement (See Note 17).
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 (including
discounted cash flow analyses with regard to fixed-rate debt)
considered appropriate, reasonably approximate their fair values
except those listed below for which fair values are reflected. Such
fair value estimates are not necessarily indicative of the amounts
that would be realized upon disposition of the Company's financial
instruments. The following are financial instruments for which the
Company's estimate of fair value differs from the carrying amounts
(in thousands):
December 31, 2002
Carrying Amounts Fair Value
--------------- ---------
Notes payable $1,302,250 $1,353,884
Mortgages payable $ 230,760 $ 282,361
77
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
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 currently 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 has interest-rate swap agreements on its $85.0 million
floating-rate MTN and on its $100.0 million floating-rate
remarketed reset notes, which have been designated and qualified as
cash flow hedges. The Company has determined that these swap
agreements are highly effective in offsetting future variable
interest cash flows related to the Company's debt portfolio. For
the year ended December 31, 2002, the change in the fair value of
the interest rate swaps was $3.3 million which was recorded in
Other Comprehensive Income ("OCI") a component of stockholders'
equity, with a corresponding liability reduction for the same
amount.
During 2002, the Company entered into foreign currency forward
contracts on its Canadian investment in marketable securities in
the amount of approximately CAD $31.2 million (approximately USD
$19.9 million). The Company has designated these foreign currency
forward contracts as fair value hedges. The Company expects these
forward contracts to be highly effective in limiting its exposure
to the variability in the fair value of its Canadian investments as
it relates to changes in the exchange rate. The gain or loss on the
forward contracts will be recognized currently in earnings and the
gain or loss on the Canadian investments attributable to changes in
the exchange rate will be recognized currently in earnings and
shall adjust the carrying amount of the hedged investments.
As of December 31, 2002, the Company had foreign currency forward
contracts on its Canadian investments in real estate aggregating
approximately CAD $173.3 million (approximately USD $110.3
million). In addition, the Company had foreign currency forward
contracts and a cross currency swap aggregating $383.7 million
pesos ("MXN")(approximately USD $35.7 million) on its Mexican real
estate investments. The Company has designated these foreign
currency agreements as hedges of the foreign currency exposure of
its net investment in Canadian and Mexican real estate operations.
The Company believes that these agreements are highly effective in
reducing the exposure to fluctuations in the exchange rate. The
gains and losses on these net investment hedges are recorded in OCI
with a corresponding asset or liability for the same amount.
Similarly, the foreign currency translation gains and losses on the
Canadian and Mexican investments attributable to changes in the
exchange rate will also be recorded in OCI.
During 2001, the Company acquired warrants to purchase the common stock
of a Canadian REIT. The Company has designated the warrants as a
cash flow hedge of the variability in expected future cash outflows
upon purchasing the common stock. The Company has determined the
hedged cash outflow is probable and expected to occur prior to the
expiration date of the warrants. The Company has determined that
the warrants are fully effective. For the year ended December 31,
2002, the change in fair value of the warrants was a loss of
approximately $0.1 million which was recorded in OCI with a
corresponding asset for the same amount.
The following table summarized the notional values and fair values of
the Company's derivative financial instruments as of December 31,
2002:
Fair Value
Hedge Type Notional Value Rate Maturity (in millions)
---------- -------------- ---- -------- -------------
Interest rate swap - cash flow $185.0 million 1.78% - 8/03 - ($0.6)
1.8725% 11/03
Foreign currency forwards - fair value CAD $31.2 million 1.5882 - 9/03 - 4/05 $0.1
1.5918
Warrants - cash flow 2,500,000 shares of CAD 9/06 $2.3
common stock $11.02
Foreign currency forwards - net CAD $173.3 million 1.5527 - 1/05 - 8/05 $1.3
investment 1.6194
Foreign currency forwards - net MXN $243.8 million 10.57 - 9/06 ($0.5)
investment 12.14
MXN cross currency swap MXN $139.9 million 7.227 10/07 ($0.4)
78
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
As of December 31, 2002, these derivative instruments were reported at
their fair value as other liabilities of $1.5 million and other
assets of $3.7 million. During the next 12 months, the Company
expects to reclassify to earnings as expense approximately $0.6
million of the current balance in accumulated OCI primarily related
to the fair value of the interest rate swaps.
16. Preferred Stock, Common Stock and DownREIT Unit Transactions:
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 2.4 million downREIT units
(the "Units") which are convertible at a ratio of 1:1 into the
Company's common stock. The downREIT unit holder has the right to
convert the Units anytime 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 $33.57 per share the unit holder
would be entitled to additional shares, however, the maximum number
of additional shares is limited to 251,966 based upon a floor
common stock price of $30.36. The Company has the option to settle
the conversion in cash. Dividends on the Units are paid quarterly
at the rate of the Company's common stock dividend multiplied by
1.1057. The value of the units is included in Minority interest in
partnerships on the accompanying Consolidated Balance Sheets.
During March 2001, the Company issued 29,638 shares of common stock at
$27.67 per share in connection with the exercise of its option to
acquire a 50% interest in a joint venture consisting of three
shopping center properties from KC Holdings.
During November 2001, the Company completed a primary public stock
offering of 2,250,000 shares of common stock priced at $32.85 per
share. The net proceeds from this sale of common stock, totaling
approximately $70.1 million (after related transaction costs of
$3.8 million) was used primarily to invest equity capital in a new
joint venture formed with G.E. Capital Real Estate and for
additional equity capital in KIR (see Note 6).
During December 2001, the Company completed a primary public stock
offering of 1,500,000 shares of common stock priced at $33.57 per
share. The net proceeds from this sale of common stock, totaling
approximately $47.6 million (after related transaction costs of
$2.7 million) was used for general corporate purposes, including
(i) the investment of additional equity capital in KIR (see Note 6)
and (ii) the development, redevelopment and expansion of properties
in the Company's portfolio.
Additionally, during November 2001, the Company announced the
redemption of all outstanding depositary shares of the Company's
7-1/2% Class D Cumulative Convertible Preferred Stock (the "Class D
Preferred Stock") in exchange for shares of the Company's common
stock. The Board of Directors set January 3, 2002 as the mandatory
redemption date on which all outstanding depositary shares of Class
D Preferred Stock would be redeemed. Holders of the Class D
Preferred Stock on the redemption date received 0.93168 shares of
the Company's common stock, as adjusted for the Company's
three-for-two common stock split, for each depositary share
redeemed. During 2001, 3,258,642 depositary shares of the Class D
Preferred Stock were voluntarily converted to common stock by the
holders. On January 3, 2002, the remaining 923,900 depositary
shares of the Class D Preferred Stock were redeemed for common
stock by the Company and a final dividend payment of 43.4680 cents
per class D Depositary share was paid on January 15, 2002.
At December 31, 2002, 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 7-3/4% 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 8-1/2%
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 $1.00 per share (the "Class C Preferred
Stock").
79
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Dividends on the Class A Depositary Shares are cumulative and payable
quarterly in arrears at the rate of 7-3/4% per annum based on the
$25.00 per share initial offering price, or $1.9375 per depositary
share. The Class A Depositary Shares are redeemable, in whole or in
part, for cash on or after September 23, 1998 at the option of the
Company, at a redemption price of $25 per depositary share, plus
any accrued and unpaid dividends thereon. The Class A Depositary
Shares are not convertible or exchangeable for any other property
or securities of the Company. The Class A Preferred Stock
(represented by the Class A Depositary Shares outstanding) ranks
pari passu with the Company's Class B Preferred Stock, and Class C
Preferred Stock as to voting rights, priority for receiving
dividends and liquidation preferences as set forth below.
Dividends on the Class B Depositary Shares are cumulative and payable
quarterly in arrears at the rate of 8-1/2% per annum based on the
$25.00 per share initial offering price, or $2.125 per depositary
share. The Class B Depositary Shares are redeemable, in whole or in
part, for cash on or after July 15, 2000 at the option of the
Company at a redemption price of $25.00 per depositary share, plus
any accrued and unpaid dividends thereon. The redemption price of
the Class B Preferred Stock may be paid solely from the sale
proceeds of other capital stock of the Company, which may include
other classes or series of preferred stock. The Class B Depositary
Shares are not convertible or exchangeable for any other property
or securities of the Company. The Class B Preferred Stock
(represented by the Class B Depositary Shares outstanding) ranks
pari passu with the Company's Class A Preferred Stock, and Class C
Preferred Stock as to voting rights, priority for receiving
dividends and liquidation preferences as set forth below.
Dividends on the Class C Depositary Shares are cumulative and payable
quarterly in arrears at the rate of 8-3/8% per annum based on the
$25.00 per share initial offering price, or $2.0938 per depositary
share. The Class C Depositary Shares are redeemable, in whole or in
part, for cash on or after April 15, 2001 at the option of the
Company at a redemption price of $25.00 per depositary share, plus
any accrued and unpaid dividends thereon. The redemption price of
the Class C Preferred Stock may be paid solely from the sale
proceeds of other capital stock of the Company, which may include
other classes or series of preferred stock. The Class C Depositary
Shares are not convertible or exchangeable for any other property
or securities of the Company. The Class C Preferred Stock
(represented by the Class C Depositary Shares outstanding) ranks
pari passu with the Company's Class A Preferred Stock and Class B
Preferred Stock as to voting rights, priority for receiving
dividends and liquidation preferences as set forth below.
Voting Rights - As to any matter on which the Class A Preferred Stock,
Class B Preferred Stock, and Class C Preferred Stock (collectively,
the "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 A, each
Class B, and each Class C 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 A,
Class B, and Class C Depositary Share, respectively), 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.
80
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
17. Transactions with Related Parties:
During 2002, 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 bears interest at rates ranging from Libor plus 4.0% and
4.25% and have maturities of less than one year. As of December 31,
2002, KROP had outstanding short-term interim financing to GECRE
and the Company totaling $17.3 million each. The Company earned
$0.8 million during 2002 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. The Consolidated
Statements of Income include management fee income from KC Holdings
of less than $0.4 million for each of the years ended December 31,
2002, 2001 and 2000, respectively.
In November 1991 the Company was granted Acquisition Options to
reacquire the real estate assets owned by KC Holdings'
subsidiaries. The remaining Acquisition Options expired in November
2001 with regard to the real estate assets which the Company had
not reacquired.
In March 2001, the Company exercised its option to acquire a 50%
interest in a joint venture from KC Holdings. The joint venture
consists of three shopping center properties located in Buffalo,
NY. This joint venture interest was acquired for an aggregate
option price of approximately $3.5 million, paid approximately $2.7
million in cash and $0.8 million in shares of the Company's common
stock (29,638 shares valued at $27.67 per share).
Reference is made to Notes 6, 13, and 16 for additional information
regarding transactions with related parties.
18. 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, 2002, 2001 and 2000, respectively.
The future minimum revenues from rental property under the terms of all
noncancellable tenant leases, assuming no new or renegotiated
leases are executed for such premises, for future years are
approximately as follows (in millions): 2003, $335.3; 2004, $309.7;
2005, $282.2; 2006, $250.8; 2007, $222.0 and thereafter, $1,333.3.
Minimum rental payments under the terms of all noncancellable operating
leases pertaining to its shopping center portfolio for future years
are approximately as follows (in millions): 2003, $10.9; 2004,
$10.8; 2005, $10.1; 2006, $9.5; 2007, $9.0 and thereafter, $125.1.
The Company has issued letters of credit in connection with the
collateralization of tax-exempt mortgage bonds, completion
guarantees for certain construction projects, and guaranty of
payment related to the Company's insurance program. These letters
of credit aggregate approximately $14.9 million.
Additionally, the RioCan Venture, an entity in which the Company holds
a 50% non-controlling interest, has a CAD $5.0 million
(approximately USD $3.2 million) letter of credit facility. This
facility is jointly guaranteed by RioCan and the Company and has
approximately CAD $1.0 million (approximately USD $0.6 million)
outstanding as of December 31, 2002 relating to various development
projects.
81
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
During 2002, the limited partners in KIR, an entity in which the
Company holds a 43.3% non-controlling interest, contributed $55.0
million towards their respective capital commitments, including
$23.8 million by the Company. As of December 31, 2002, KIR had
unfunded capital commitments of $129.0 million, including $55.9
million from the Company.
KIR maintains a secured revolving credit facility with a syndicate of
banks, which is scheduled to expire in November 2003. This facility
is collateralized by the unfunded subscriptions of certain
partners, including those of the Company. The facility has an
aggregate availability of up to $100.0 million based upon the
amount of unfunded subscription commitments of certain partners.
During January 2003, the aggregate availability under the credit
facility was reduced to $90.0 million. As of December 31, 2002,
there was $15.0 million outstanding under this facility.
19. Incentive Plans:
The Company maintains a stock option plan (the "Plan") pursuant to
which a maximum 13,500,000 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-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 in 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, 2002, 2001 and 2000 is as follows:
Weighted Average
Exercise Price
Shares Per Share
--------- ---------------
Options outstanding, December 31, 1999 4,869,138 $20.56
Exercised (290,106) $17.03
Granted 1,347,637 $27.09
Forfeited (387,874) $19.07
----------
Options outstanding, December 31, 2000 5,538,795 $22.44
Exercised (1,694,227) $20.62
Granted 2,119,175 $30.71
Forfeited (54,390) $25.76
----------
Options outstanding, December 31, 2001 5,909,353 $25.90
Exercised (307,831) $18.76
Granted 1,562,525 $31.27
Forfeited (61,974) $27.99
----------
Options outstanding, December 31, 2002 7,102,073 $27.37
=========
Options exercisable -
December 31, 2000 2,921,737 $20.13
========= ======
December 31, 2001 2,369,288 $21.98
========= ======
December 31, 2002 3,298,417 $24.06
========= ======
The exercise prices for options outstanding as of December 31, 2002
range from $14.17 to $33.67 per share. The weighted average
remaining contractual life for options outstanding as of December
31, 2002 was approximately 7.8 years. Options to purchase
1,731,321, 3,293,846 and 913,042 shares of the Company's common
stock were available for issuance under the Plan at December 31,
2002, 2001 and 2000, respectively.
The Company has elected to adopt the disclosure-only provisions of
Statement of Financial Accounting Standards No. 123 "Accounting for
Stock-Based Compensation". Accordingly, no compensation cost has
been recognized with regard to options granted under the Plan in
the accompanying Consolidated Statements of Income. If stock-based
compensation costs had been recognized based on the estimated fair
values at the dates of grant for options awarded, net income and
net income per diluted common share for the years ended December
31, 2002, 2001 and 2000 would have been reduced by approximately
$3.2 million or $0.03 per diluted share, $2.7 million or $0.03 per
diluted share and $2.2 million or $0.03 per diluted share,
respectively. Effective January 1, 2003, the Company will adopt the
prospective method provisions of FASB No. 148, which will apply the
recognition provisions of FASB No. 123 to all employee awards
granted, modified or settled after January 1, 2003.
82
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 2002, 2001 and 2000 include: (i)
weighted average risk-free interest rates of 3.06%, 4.85% and
5.69%, respectively; (ii) weighted average expected option lives of
4.1 years, 5.5 years, and 4.4 years, respectively; (iii) an
expected volatility of 16.12%, 15.76% and 15.82%, respectively, and
(iv) an expected dividend yield of 6.87%, 6.74% and 6.95%,
respectively. The per share weighted average fair value at the
dates of grant for options awarded during 2002, 2001 and 2000 was
$1.50, $1.98 and $2.05, respectively.
The Company maintains a 401(k) retirement plan covering substantially
all officers and employees which permits participants to defer up
to a maximum 10% 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, is fully vested and funded as of December
31, 2002. Company contributions to the plan were approximately $0.7
million, $0.7 million and $0.6 million for the years ended December
31, 2002, 2001 and 2000, respectively.
20. 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.
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, 2002, 2001 and 2000 (in thousands):
2002 2001 2000
(Estimated) (Actual) (Actual)
--------- --------- --------
GAAP net income $245,668 $236,538 $205,025
Less: GAAP net income of taxable REIT subsidiaries (23,573) (29,063) -
--------- --------- --------
GAAP net income from REIT operations (Note 1) 222,095 207,475 205,025
Net book depreciation in excess of tax depreciation 4,043 3,612 2,889
Deferred and prepaid rents (5,800) (6,647) (7,117)
Exercise of non-qualified stock options (3,000) (15,354) (2,534)
Book/tax depreciation differences from investments in real estate
joint ventures (1,929) (3,206) (2,253)
Other book/tax differences, net 18,365 12,863 (14,240)
-------- -------- ---------
Adjusted taxable income subject to 90% dividend
requirements $233,774 $198,743 $181,770
======== ======== ========
Note 1 - All adjustments to "GAAP net income from REIT operations" are
net of amounts attributable to minority interest and taxable REIT
subsidiaries.
83
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Reconciliation between Cash Dividends Paid and Dividends Paid
Deductions:
Cash dividends paid were equal to the dividends paid deduction for the
years ended December 31, 2002, 2001 and 2000, and amounted to (in
thousands) $235,602, $209,785 and $189,896, respectively.
Characterization of Distributions:
The following characterizes distributions paid for the years ended
December 31, 2002, 2001 and 2000 (in thousands):
2002 2001 2000
---- ---- ----
Preferred Dividends
Ordinary income $17,935 96% $26,253 100% $26,376 100%
Capital gain 764 4% - - - -
-------- ---- -------- ---- -------- ----
$18,699 100% $26,253 100% $26,376 100%
Common Dividends
Ordinary income $208,040 96% $174,380 95% $163,520 100%
Capital gain 8,863 4% - - - -
Return of capital - - 9,152 5% - -
-------- ---- -------- ---- -------- ----
$216,903 100% $183,532 100% $163,520 100%
Total dividends
distributed $235,602 $209,785 $189,896
======== ======== ========
Taxable REIT Subsidiaries ("TRS"):
Commencing January 1, 2001, the Company is subject to federal, state
and local income taxes on the income from it TRS activities.
Income taxes have been provided for on the asset and liability method
as required by Statement of Financial Accounting Standard 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 TRS income and provision for income taxes for the years
ended December 31, 2002 and 2001, are summarized as follows (in
thousands):
2002 2001
---- ----
Taxable income before income taxes $36,477 $48,439
------- -------
Less provision for income taxes:
Federal 10,538 15,682
State and local 2,366 3,694
Total tax provision 12,904 19,376
------- -------
TRS net income $23,573 $29,063
======= =======
There was no provision for income taxes for the year ended December 31,
2000.
Deferred tax assets of approximately $4.4 million as of December 31,
2002 and 2001 and deferred tax liabilities of approximately $1.7
million as of December 31, 2002, are included in the caption Other
assets and Other liabilities on the accompanying Consolidated
Balance Sheets at December 31, 2002 and 2001, respectively. These
deferred tax assets and liabilities relate primarily to differences
in the timing of the recognition of income/(loss) between GAAP and
tax basis of accounting of (i) real estate joint ventures, (ii)
other real estate investments and (iii) other deductible temporary
differences.
84
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
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):
2002 2001
---- ----
Federal provision at statutory tax rate (35%) $12,767 $16,954
State and local taxes, net of federal benefit 2,010 2,422
Other (1,873) -
-------- ------
$12,904 $19,376
======= =======
21. Supplemental Financial Information:
The following represents the results of operations, expressed in
thousands except per share amounts, for each quarter during years
2002 and 2001:
2002 (Unaudited)
-----------------------------------------------------------------
Mar. 31 June 30 Sept. 30 Dec. 31
------- ------- -------- -------
Revenues from rental property(1) $ 112,255 $ 112,494 $ 110,191 $ 115,891
Net income $ 60,894 $ 61,055 $ 60,756 $ 62,963
Net income per common share:
Basic $ .54 $ .54 $ .54 $ .56
Diluted $ .53 $ .54 $ .53 $ .56
2001 (Unaudited)
--------------------------------------------------------------
Mar. 31 June 30 Sept. 30 Dec. 31
------- ------- -------- -------
Revenues from rental property(1) $ 116,469 $ 113,695 $ 109,974 $110,270
Net income $ 56,053 $ 59,352 $ 59,250 $ 61,883
Net income per common share:
Basic $ .52 $ .55 $ .55 $ .58
Diluted $ .51 $ .55 $ .54 $ .56
(1) All periods have been adjusted to reflect the impact of
operating properties sold during 2002 and properties classified as
held for sale as of December 31, 2002 which are reflected in
Discounted operations in the Consolidated Statements of Income.
Accounts and notes receivable in the accompanying Consolidated Balance
Sheets are net of estimated unrecoverable amounts of approximately
$5.8 million and $4.3 million at December 31, 2002 and 2001,
respectively.
22. Pro Forma Financial Information (Unaudited):
As discussed in Notes 2 and 3, the Company and certain of its
subsidiaries acquired and disposed of interests in certain
operating properties during 2002. 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,
2002 and 2001, adjusted to give effect to these transactions as of
January 1, 2001.
85
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
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, 2001, nor does it purport to represent the results of operations
for future periods. (Amounts presented in millions, except per
share figures.)
Years ended December 31,
2002 2001
---- ----
Revenues from rental property $473.8 $478.1
Net income $235.6 $237.7
Net income per common share:
Basic $2.08 $2.21
===== =====
Diluted $2.06 $2.17
===== =====
86
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
KIMCO REALTY CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
For Years Ended December 31, 2002, 2001 and 2000
(in thousands)
Adjustments to
Balance at valuation Balance at end
Beginning of Charged to accounts of period
Period expenses Deductions
----------------- --------------- ------------------ ------------------ ----------------
Year Ended December 31, 2002
Allowance for uncollectable
accounts $4,300 $2,750 $ - ($1,300) $5,750
----------------- --------------- ------------------ ------------------ ----------------
Year Ended December 31, 2001
Allowance for uncollectable
accounts $4,000 $3,400 $ - ($3,100) $4,300
----------------- --------------- ------------------ ------------------ ----------------
Year Ended December 31, 2000
Allowance for uncollectable
accounts $3,750 $2,650 $ - ($2,400) $4,000
----------------- --------------- ------------------ ------------------ ----------------
87
SCHEDULE III
KIMCO REALTY CORPORATION AND SUBSIDARIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2002
INITIAL COST
BUILDING AND SUBSEQUENT BUILDINGS AND
PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL
- ---------- ---- ----------- -------------- ---- ------------ -----
FAIRFIELD SHOPPING CENTER $ 529,247 $ 2,137,493 $ 180,479 $ 529,247 $ 2,317,972 $ 2,847,219
HOOVER 279,106 7,735,873 -- 279,106 7,735,873 8,014,979
HAMSTRA SQUARE 1,648,206 -- 6,140,247 1,648,206 6,140,247 7,788,452
FOUR PEAKS PLAZA 3,150,780 -- 11,136,798 3,150,780 11,136,798 14,287,578
GILBERT FIESTA DEVELOPMENT 1,683,843 -- 2,699,962 1,683,843 2,699,962 4,383,805
KIMCO MESA 679, INC. AZ 2,915,000 11,686,291 758,781 2,915,000 12,445,072 15,360,072
METRO SQUARE 4,101,017 16,410,632 462,640 4,101,017 16,873,272 20,974,289
PEORIA CROSSING 7,212,588 -- 17,295,451 7,235,425 17,272,615 24,508,040
HAYDEN PLAZA NORTH 2,015,726 4,126,509 4,983,587 2,015,726 9,110,096 11,125,822
PHOENIX, COSTCO 5,324,501 21,269,943 213,315 5,324,501 21,483,258 26,807,759
PHOENIX 2,450,341 9,802,046 151,421 2,450,341 9,953,467 12,403,808
ALHAMBRA, COSTCO 4,995,639 19,982,557 -- 4,995,639 19,982,557 24,978,196
MADISON PLAZA 5,874,396 23,476,190 44,831 5,874,396 23,521,021 29,395,417
CHULA VISTA, COSTCO 6,460,743 25,863,153 1,566,737 6,460,743 27,429,890 33,890,633
CORONA HILLS, COSTCO 13,360,965 53,373,453 610,097 13,360,965 53,983,550 67,344,515
LA MIRADA THEATRE CENTER 8,816,741 35,259,965 5,800 8,816,741 35,265,765 44,082,506
THE CENTRE 3,403,724 13,625,899 18,680 3,403,724 13,644,579 17,048,303
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 9,012,256 778,545 2,252,812 9,790,801 12,043,613
WESTLAKE SHOPPING CENTER 16,174,307 64,818,562 -- 16,174,307 64,818,562 80,992,869
VILLAGE ON THE PARK 2,194,463 8,885,987 118,886 2,194,463 9,004,873 11,199,336
AURORA QUINCY 1,148,317 4,608,249 176,871 1,148,317 4,785,120 5,933,437
AURORA EAST BANK 1,500,568 6,180,103 139,219 1,500,568 6,319,322 7,819,890
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 18,800 805,837 3,251,450 4,057,287
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 79,252 1,526,576 6,203,326 7,729,902
WEST FARM SHOPPING CENTER 5,805,969 23,348,024 129,893 5,805,969 23,477,917 29,283,886
N.HAVEN, HOME DEPOT 7,704,968 30,797,640 191,857 7,704,968 30,989,497 38,694,465
WATERBURY 2,253,078 9,017,012 248,806 2,253,078 9,265,818 11,518,896
ELSMERE -- 3,185,642 -- -- 3,185,642 3,185,642
ALTAMONTE SPRINGS 770,893 3,083,574 165,495 770,893 3,249,069 4,019,962
BOCA RATON 573,875 2,295,501 1,048,565 573,875 3,344,066 3,917,941
BRADENTON 125,000 299,253 333,571 125,000 632,824 757,824
BAYSHORE GARDENS,
BRADENTON FL 2,901,000 11,738,955 336,222 2,901,000 12,075,177 14,976,177
CORAL SPRINGS 710,000 2,842,907 3,204,985 710,000 6,047,892 6,757,892
CORAL SPRINGS 1,649,000 6,626,301 134,306 1,649,000 6,760,607 8,409,607
EAST ORLANDO 491,676 1,440,000 2,809,868 1,007,882 3,733,662 4,741,544
FERN PARK 225,000 902,000 2,693,939 225,000 3,595,939 3,820,939
REGENCY PLAZA 2,410,000 9,671,160 169,799 2,410,000 9,840,959 12,250,959
KISSIMMEE 1,328,536 5,296,652 1,706,687 1,328,536 7,003,339 8,331,875
LAUDERDALE LAKES 342,420 2,416,645 2,651,211 342,420 5,067,856 5,410,276
MERCHANTS WALK 2,580,816 10,366,090 31,778 2,580,816 10,397,868 12,978,684
LARGO 293,686 792,119 1,140,646 293,686 1,932,765 2,226,451
LEESBURG -- 171,636 173,537 -- 345,173 345,173
LARGO EAST BAY 2,832,296 11,329,185 971,043 2,832,296 12,300,228 15,132,524
LAUDERHILL 1,002,733 2,602,415 10,014,388 1,774,443 11,845,093 13,619,536
MELBOURNE -- 1,754,000 2,812,962 -- 4,566,962 4,566,962
GROVE GATE 365,893 1,049,172 1,139,954 365,893 2,189,126 2,555,019
NORTH MIAMI 732,914 4,080,460 10,541,973 732,914 14,622,433 15,355,347
MILLER ROAD 1,138,082 4,552,327 1,501,207 1,138,082 6,053,534 7,191,616
MARGATE 2,948,530 11,754,120 2,378,665 2,948,530 14,132,785 17,081,315
MELBOURNE 715,844 2,878,374 604,459 715,844 3,482,833 4,198,677
MT. DORA 1,011,000 4,062,890 97,491 1,011,000 4,160,381 5,171,381
ORLANDO 923,956 3,646,904 1,815,647 1,172,119 5,214,388 6,386,507
RENAISSANCE CENTER 9,104,379 36,540,873 2,651,778 9,104,379 39,192,651 48,297,030
SAND LAKE 3,092,706 12,370,824 1,146,644 3,092,706 13,517,468 16,610,174
ORLANDO 560,800 2,268,112 2,074,004 580,030 4,322,886 4,902,916
OCALA 1,980,000 7,927,484 713,063 1,980,000 8,640,547 10,620,547
POMPANO BEACH 97,169 874,442 1,234,339 97,169 2,108,781 2,205,950
PALATKA 130,844 556,658 1,002,280 130,844 1,558,938 1,689,782
PANAMA CITY 1,962,500 -- 4,159,999 1,962,500 4,159,999 6,122,499
ST. PETERSBURG -- 917,360 765,297 -- 1,682,657 1,682,657
TUTTLE BEE SARASOTA 254,961 828,465 1,709,550 254,961 2,538,015 2,792,976
SOUTH EAST SARASOTA 1,283,400 5,133,544 3,327,957 1,440,264 8,304,637 9,744,901
SANFORD 1,832,732 9,523,261 5,164,810 1,832,732 14,688,071 16,520,803
TOTAL COST,
NET OF DATE OF
ACCUMULATED ACCUMULATED CONSTRUCTION(C)
DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A)
------------ ------------ ------------ --------------
FAIRFIELD SHOPPING CENTER $ 137,540 $ 2,709,679 $ -- 2000(A)
HOOVER 595,240 7,419,738 -- 1999(A)
HAMSTRA SQUARE -- 7,788,452 3,619,064 2002(C)
FOUR PEAKS PLAZA -- 14,287,578 5,400,560 2001(C)
GILBERT FIESTA DEVELOPMENT -- 4,383,805 1,402,976 2001(C)
KIMCO MESA 679, INC. AZ 1,452,752 13,907,320 -- 1998(A)
METRO SQUARE 1,916,879 19,057,410 -- 1998(A)
PEORIA CROSSING -- 24,508,040 8,437,275 2000(C)
HAYDEN PLAZA NORTH 658,503 10,467,319 -- 1998(A)
PHOENIX, COSTCO 2,470,598 24,337,161 -- 1998(A)
PHOENIX 1,311,927 11,091,881 7,618,446 1997(A)
ALHAMBRA, COSTCO 2,319,383 22,658,813 -- 1998(A)
MADISON PLAZA 2,713,440 26,681,977 -- 1998(A)
CHULA VISTA, COSTCO 3,071,816 30,818,818 -- 1998(A)
CORONA HILLS, COSTCO 6,169,808 61,174,707 -- 1998(A)
LA MIRADA THEATRE CENTER 4,072,393 40,010,113 -- 1998(A)
THE CENTRE 1,091,506 15,956,797 7,899,089 1999(A)
SANTA ANA, HOME DEPOT 2,109,921 20,827,700 -- 1998(A)
SANTEE TOWN CENTER 958,045 11,085,568 -- 1998(A)
WESTLAKE SHOPPING CENTER 276,555 80,716,314 -- 2002(A)
VILLAGE ON THE PARK 1,126,665 10,072,671 -- 1998(A)
AURORA QUINCY 589,410 5,344,027 2,507,950 1998(A)
AURORA EAST BANK 783,216 7,036,675 -- 1998(A)
SPRING CREEK COLORADO 721,545 6,446,772 -- 1998(A)
DENVER WEST 38TH STREET 81,542 726,608 -- 1998(A)
ENGLEWOOD PHAR MOR 407,756 3,649,531 1,196,795 1998(A)
FORT COLLINS 553,973 8,324,801 2,988,284 2000(A)
HERITAGE WEST 778,092 6,951,810 -- 1998(A)
WEST FARM SHOPPING CENTER 2,651,656 26,632,230 13,366,149 1998(A)
N.HAVEN, HOME DEPOT 3,540,807 35,153,658 -- 1998(A)
WATERBURY 2,134,860 9,384,036 -- 1993(A)
ELSMERE 2,676,286 509,356 -- 1979(C)
ALTAMONTE SPRINGS 553,644 3,466,319 -- 1995(A)
BOCA RATON 925,258 2,992,684 -- 1992(A)
BRADENTON 369,628 388,196 -- 1968(C)
BAYSHORE GARDENS, BRADENTON FL 1,399,051 13,577,126 -- 1998(A)
CORAL SPRINGS 1,000,598 5,757,294 -- 1994(A)
CORAL SPRINGS 868,359 7,541,248 -- 1997(A)
EAST ORLANDO 1,831,218 2,910,326 -- 1971(C)
FERN PARK 1,654,579 2,166,360 -- 1968(C)
REGENCY PLAZA 759,594 11,491,366 8,777,574 1999(A)
KISSIMMEE 1,138,831 7,193,044 -- 1996(A)
LAUDERDALE LAKES 3,424,959 1,985,317 -- 1968(C)
MERCHANTS WALK 354,657 12,624,027 -- 2001(A)
LARGO 1,553,211 673,239 -- 1968(C)
LEESBURG 213,597 131,576 -- 1969(C)
LARGO EAST BAY 3,705,992 11,426,532 -- 1992(A)
LAUDERHILL 5,238,982 8,380,554 -- 1974(C)
MELBOURNE 1,703,437 2,863,525 -- 1968(C)
GROVE GATE 1,486,605 1,068,414 -- 1968(C)
NORTH MIAMI 4,787,356 10,567,990 -- 1985(A)
MILLER ROAD 4,136,847 3,054,768 -- 1986(A)
MARGATE 3,029,406 14,051,909 -- 1993(A)
MELBOURNE 692,408 3,506,270 -- 1994(A)
MT. DORA 533,086 4,638,295 -- 1997(A)
ORLANDO 1,109,966 5,276,541 -- 1995(A)
RENAISSANCE CENTER 4,952,672 43,344,359 -- 1998(A)
SAND LAKE 2,887,246 13,722,928 -- 1994(A)
ORLANDO 590,055 4,312,861 -- 1996(A)
OCALA 1,198,869 9,421,677 -- 1997(A)
POMPANO BEACH 1,116,534 1,089,416 -- 1968(C)
PALATKA 657,523 1,032,259 -- 1970(C)
PANAMA CITY -- 6,122,499 117,147 2002(C)
ST. PETERSBURG 662,207 1,020,450 -- 1968(C)
TUTTLE BEE SARASOTA 1,536,392 1,256,584 -- 1970(C)
SOUTH EAST SARASOTA 2,337,884 7,407,017 -- 1989(A)
SANFORD 4,495,911 12,024,892 -- 1989(A)
88
INITIAL COST
BUILDING AND SUBSEQUENT BUILDINGS AND
PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL
- ---------- ---- ----------- -------------- ---- ------------ -----
STUART 2,109,677 8,415,323 418,577 2,109,677 8,833,900 10,943,577
SOUTH MIAMI 1,280,440 5,133,825 2,502,710 1,280,440 7,636,535 8,916,975
TALLAHASSEE -- 2,431,659 17,991,873 -- 20,423,532 20,423,532
TAMPA, FLORIDA 3,054,280 -- 5,594,009 3,054,280 5,594,009 8,648,289
TAMPA 2,820,000 11,283,189 1,311,993 2,820,000 12,595,182 15,415,182
VILLAGE COMMONS S.C 2,192,331 8,774,158 384,702 2,192,331 9,158,860 11,351,191
WEST PALM BEACH 550,896 2,298,964 488,847 550,896 2,787,811 3,338,707
THE SHOPS AT WEST MELBOURNE 2,200,000 8,829,541 1,829,222 2,200,000 10,658,763 12,858,763
JONESBORO RD. &I-285 468,118 1,872,473 53,114 468,118 1,925,587 2,393,705
AUGUSTA 1,482,564 5,928,122 1,219,534 1,482,564 7,147,656 8,630,220
MACON 262,700 1,487,860 1,562,098 349,326 2,963,332 3,312,658
SAVANNAH 2,052,270 8,232,978 584,844 2,052,270 8,817,822 10,870,092
SAVANNAH 652,255 2,616,522 273,677 652,255 2,890,199 3,542,454
CLIVE 500,525 2,002,101 -- 500,525 2,002,101 2,502,626
SOUTHDALE SHOPPING CENTER 1,720,330 6,916,294 793,477 1,720,330 7,709,770 9,430,100
DES MOINES 500,525 2,559,019 37,079 500,525 2,596,098 3,096,623
DUBUQUE -- 2,152,476 -- -- 2,152,476 2,152,476
WATERLOO 500,525 2,002,101 -- 500,525 2,002,101 2,502,626
ADDISON -- 753,343 1,164,548 -- 1,917,891 1,917,891
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 (5,250,000) 1,983,517 3,928,272 5,911,789
BLOOMINGTON 805,521 2,222,353 5,039,413 805,521 7,261,766 8,067,287
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
KRC BRIDGEVIEW -- -- 491,565 -- 491,565 491,565
CALUMET CITY 1,479,217 8,815,760 21,730 1,479,217 8,837,490 10,316,707
COUNTRYSIDE -- 4,770,671 35,625 -- 4,806,296 4,806,296
CARBONDALE -- 500,000 -- -- 500,000 500,000
CHICAGO 2,577,473 3,716,745 79,335 2,577,473 3,796,080 6,373,553
CHICAGO -- 2,687,046 48,916 -- 2,735,962 2,735,962
CHAMPAIGN, NEIL ST 230,519 1,285,460 49,327 230,519 1,334,787 1,565,306
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 1,025,811 233,766 180,269 1,259,272 1,439,541
KRC PETERSON AVE 2,215,960 10,253,981 -- 2,215,960 10,253,981 12,469,941
BUTTERFIELD SQUARE 1,601,960 6,637,926 291,220 1,601,960 6,929,146 8,531,106
DOWNERS PARK PLAZA 2,510,455 10,164,494 227,550 2,510,455 10,392,044 12,902,499
DOWNER GROVE 811,778 4,322,956 1,664,058 811,778 5,987,014 6,798,792
ELGIN 842,555 2,108,674 1,657,257 842,555 3,765,931 4,608,486
FOREST PARK -- 2,335,884 -- -- 2,335,884 2,335,884
FAIRVIEW HTS, BELLVILLE RD -- 11,866,880 694,881 -- 12,561,761 12,561,761
GENEVA 500,422 12,917,712 14,927 500,422 12,932,639 13,433,061
MATTERSON 950,515 6,292,319 161,795 950,515 6,454,114 7,404,629
MT. PROSPECT 1,017,345 6,572,176 1,217,808 1,017,345 7,789,984 8,807,329
MUNDELIEN, S. LAKE 1,127,720 5,826,129 1,914 1,129,634 5,826,129 6,955,763
NORRIDGE -- 2,918,315 -- -- 2,918,315 2,918,315
NAPERVILLE 669,483 4,464,998 -- 669,483 4,464,998 5,134,481
OTTAWA 137,775 784,269 361,788 137,775 1,146,057 1,283,832
ORLAND SQUARE 1,601,960 6,425,253 -- 1,601,960 6,425,253 8,027,213
ORLAND PARK, S. HARLEM 476,972 2,764,775 907,541 476,972 3,672,316 4,149,288
OAK LAWN 1,530,111 8,776,631 100,280 1,530,111 8,876,911 10,407,022
OAKBROOK TERRACE 1,527,188 8,679,108 105,074 1,527,188 8,784,182 10,311,370
PEORIA -- 5,081,290 1,315,822 -- 6,397,112 6,397,112
PLAZA AT ROCKFORD, IL -- 83,158 -- -- 83,158 83,158
EAST WOODFIELD SQUARE 1,601,960 6,466,646 -- 1,601,960 6,466,646 8,068,606
SPRINGFIELD, MACARTHUR -- 131,091 -- -- 131,091 131,091
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
WOODGROVE FESTIVAL 5,049,149 20,822,993 1,396,500 5,049,149 22,219,493 27,268,642
WAUKEGAN, BELVEDERE 203,427 1,161,847 37,012 203,772 1,198,514 1,402,286
PLAZA EAST 1,236,149 4,944,597 2,804,497 1,140,849 7,844,394 8,985,243
PLAZA WEST 808,435 3,210,187 624,109 808,435 3,834,296 4,642,731
FELBRAM 72,971 302,579 399,948 72,971 702,527 775,498
GREENWOOD 423,371 1,883,421 1,436,442 423,371 3,319,863 3,743,234
GRIFFITH -- 2,495,820 (19,188) -- 2,476,632 2,476,632
INDIANAPOLIS 447,600 3,607,193 2,380,643 447,600 5,987,836 6,435,436
LAFAYETTE 230,402 1,305,943 158,525 230,402 1,464,468 1,694,870
LAFAYETTE 812,810 3,252,269 982,359 812,810 4,234,628 5,047,438
KIMCO LAFAYETTE MARKET PLACE 4,184,000 16,752,165 135,374 4,184,000 16,887,538 21,071,538
KRC MISHAWAKA 895 378,088 1,999,079 642 378,730 1,999,079 2,377,809
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 6,335,308 132,624 1,185,906 6,465,937 7,651,843
TOTAL COST,
NET OF DATE OF
ACCUMULATED ACCUMULATED CONSTRUCTION(C)
DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A)
------------ ------------ ------------ --------------
STUART 1,880,582 9,062,995 -- 1994(A)
SOUTH MIAMI 1,283,328 7,633,647 -- 1995(A)
TALLAHASSEE -- 20,423,532 -- 2000(C)
TAMPA, FLORIDA -- 8,648,289 -- 2001(C)
TAMPA 1,764,737 13,650,445 -- 1997(A)
VILLAGE COMMONS S.C 915,443 10,435,748 -- 1998(A)
WEST PALM BEACH 451,554 2,887,153 -- 1995(A)
THE SHOPS AT WEST MELBOURNE 1,106,298 11,752,466 -- 1998(A)
JONESBORO RD. &I-285 793,424 1,600,281 -- 1988(A)
AUGUSTA 1,082,513 7,547,707 -- 1995(A)
MACON 1,415,848 1,896,810 -- 1969(C)
SAVANNAH 2,033,799 8,836,293 -- 1993(A)
SAVANNAH 507,218 3,035,236 -- 1995(A)
CLIVE 355,074 2,147,552 -- 1996(A)
SOUTHDALE SHOPPING CENTER 709,425 8,720,675 4,929,194 1999(A)
DES MOINES 441,906 2,654,717 -- 1996(A)
DUBUQUE 285,174 1,867,302 -- 1997(A)
WATERLOO 355,074 2,147,552 -- 1996(A)
ADDISON 1,248,303 669,588 -- 1968(C)
ALTON, BELTLINE HWY 599,952 1,777,495 -- 1998(A)
AURORA, N. LAKE 1,078,211 10,513,418 6,866,542 1998(A)
KRC ARLINGTON HEIGHT 1,038,225 4,873,564 -- 1998(A)
BLOOMINGTON 3,334,632 4,732,655 -- 1972(C)
BELLEVILLE, WESTFIELD PLAZA 608,263 4,763,990 -- 1998(A)
BRADLEY 402,591 2,099,518 -- 1996(A)
KRC BRIDGEVIEW 33,251 458,314 -- 1998(A)
CALUMET CITY 1,101,764 9,214,943 -- 1997(A)
COUNTRYSIDE 601,479 4,204,817 -- 1997(A)
CARBONDALE 51,282 448,718 -- 1997(A)
CHICAGO 482,690 5,890,862 9,372,549 1997(A)
CHICAGO 355,961 2,380,001 -- 1997(A)
CHAMPAIGN, NEIL ST 129,411 1,435,895 -- 1998(A)
ELSTON 644,307 6,058,279 -- 1997(A)
S. CICERO 226,115 1,464,648 -- 1997(A)
CRYSTAL LAKE, NW HWY 121,100 1,318,440 -- 1998(A)
KRC PETERSON AVE 1,159,922 11,310,019 7,781,750 1998(A)
BUTTERFIELD SQUARE 839,937 7,691,169 -- 1998(A)
DOWNERS PARK PLAZA 1,033,616 11,868,884 -- 1999(A)
DOWNER GROVE 654,025 6,144,767 -- 1997(A)
ELGIN 1,956,193 2,652,293 -- 1972(C)
FOREST PARK 314,228 2,021,656 -- 1997(A)
FAIRVIEW HTS, BELLVILLE RD 1,352,593 11,209,168 -- 1998(A)
GENEVA 1,590,160 11,842,901 9,626,143 1996(A)
MATTERSON 768,093 6,636,537 -- 1997(A)
MT. PROSPECT 880,389 7,926,941 -- 1997(A)
MUNDELIEN, S. LAKE 658,576 6,297,187 -- 1998(A)
NORRIDGE 386,852 2,531,463 -- 1997(A)
NAPERVILLE 541,605 4,592,876 -- 1997(A)
OTTAWA 941,763 342,069 -- 1970(C)
ORLAND SQUARE 818,661 7,208,552 -- 1998(A)
ORLAND PARK, S. HARLEM 324,185 3,825,103 -- 1998(A)
OAK LAWN 1,117,879 9,289,143 14,774,523 1997(A)
OAKBROOK TERRACE 1,108,791 9,202,579 -- 1997(A)
PEORIA 743,440 5,653,672 -- 1997(A)
PLAZA AT ROCKFORD, IL 83,158 (0) -- 1998(A)
EAST WOODFIELD SQUARE 821,314 7,247,291 -- 1998(A)
SPRINGFIELD, MACARTHUR 14,514 116,577 -- 1998(A)
SKOKIE 407,894 11,356,849 8,684,524 1997(A)
KRC STREAMWOOD 118,258 1,303,329 -- 1998(A)
WOODGROVE FESTIVAL 2,448,977 24,819,665 -- 1998(A)
WAUKEGAN, BELVEDERE 116,006 1,286,280 -- 1998(A)
PLAZA EAST 1,126,931 7,858,312 -- 1995(A)
PLAZA WEST 577,228 4,065,502 -- 1995(A)
FELBRAM 480,508 294,990 -- 1970(C)
GREENWOOD 1,762,369 1,980,865 -- 1970(C)
GRIFFITH 318,009 2,158,623 -- 1997(A)
INDIANAPOLIS 3,531,004 2,904,431 -- 1986(A)
LAFAYETTE 1,120,915 573,955 -- 1971(C)
LAFAYETTE 589,439 4,457,999 -- 1997(A)
KIMCO LAFAYETTE MARKET PLACE 1,934,378 19,137,161 -- 1998(A)
KRC MISHAWAKA 895 225,494 2,152,315 -- 1998(A)
SOUTH BEND, S. HIGH ST 117,585 1,333,136 -- 1998(A)
OVERLAND PARK, 679,962 6,971,881 -- 1998(A)
89
INITIAL COST
BUILDING AND SUBSEQUENT BUILDINGS AND
PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL
- ---------- ---- ----------- -------------- ---- ------------ -----
BELLEVUE 405,217 1,743,573 101,153 405,217 1,844,726 2,249,943
LEXINGTON 1,675,031 6,848,209 5,092,491 1,675,031 11,940,700 13,615,731
PADUCAH MALL, KY -- 1,047,281 (123,196) -- 924,085 924,085
BATON ROUGE 3,813,873 15,260,609 1,056,714 3,813,873 16,317,323 20,131,196
KIMCO HOUMA 274, LLC 1,980,000 7,945,784 98,866 1,980,000 8,044,650 10,024,650
LAFAYETTE 2,115,000 8,508,218 8,730,136 3,678,274 15,675,080 19,353,354
GREAT BARRINGTON 642,170 2,547,830 6,932,531 751,124 9,371,407 10,122,531
LEOMINSTER 3,732,508 6,754,092 38,296,034 4,933,640 43,848,994 48,782,634
SHREWSBURY SHOPPING CENTER 1,284,168 5,284,853 4,484,231 1,284,168 9,769,083 11,053,251
WILDE LAKE 1,468,038 5,869,862 -- 1,468,038 5,869,862 7,337,899
LYNX LANE 1,019,035 4,091,894 -- 1,019,035 4,091,894 5,110,929
OAKLAND MILLS 667,165 2,663,081 -- 667,165 2,663,081 3,330,246
GAITHERSBURG 244,890 6,787,534 121,951 244,890 6,909,485 7,154,375
GLEN BURNIE -- 1,000,000 -- -- 1,000,000 1,000,000
HAGERSTOWN 541,389 2,165,555 993,343 541,389 3,158,898 3,700,287
LAUREL 349,562 1,398,250 849,625 349,562 2,247,875 2,597,437
LAUREL 274,580 1,100,968 (3,820) 274,580 1,097,148 1,371,728
LARGO/LANDOVER 982,266 27,223,105 -- 982,266 27,223,105 28,205,372
WHITE MARSH, COSTCO 3,517,018 14,049,542 23,351 3,517,018 14,072,893 17,589,911
BANGOR, ME 403,833 1,622,331 93,752 403,833 1,716,083 2,119,916
CLAWSON 1,624,771 6,578,142 2,559,533 1,624,771 9,137,675 10,762,446
WHITE LAKE 2,300,050 9,249,607 1,354,424 2,300,050 10,604,031 12,904,081
FARMINGTON 1,098,426 4,525,723 1,972,156 1,098,426 6,497,879 7,596,305
FLINT 984,338 8,053,218 469,723 984,338 8,534,856 9,519,194
LIVONIA 178,785 925,818 576,365 178,785 1,502,183 1,680,968
MUSKEGON 391,500 958,500 788,805 391,500 1,747,305 2,138,805
TAYLOR 1,451,397 5,806,263 224,879 1,451,397 6,031,142 7,482,539
WALKER 3,682,478 14,730,060 1,809,480 3,682,478 16,539,540 20,222,018
BRIDGETON -- 2,196,834 -- -- 2,196,834 2,196,834
CREVE COEUR, WOODCREST/OLIVE 1,044,598 5,475,623 502,705 960,813 6,062,112 7,022,926
CRYSTAL CITY, MI -- 234,378 -- -- 234,378 234,378
CAPE GIRARDEAU -- 2,242,469 -- -- 2,242,469 2,242,469
HAZELWOOD, MO -- -- 324,258 -- 324,258 324,258
INDEPENDENCE, NOLAND DR 1,728,367 8,951,101 47,757 1,731,300 8,995,925 10,727,225
NORTH POINT SHOPPING CENTER 1,935,380 7,800,746 167,922 1,935,380 7,968,668 9,904,048
KIRKWOOD -- 9,704,005 1,045,668 -- 10,749,673 10,749,673
KANSAS CITY 574,777 2,971,191 246,276 574,777 3,217,467 3,792,244
LEMAY 125,879 503,510 187,384 125,879 690,894 816,773
GRAVOIS 1,032,416 4,455,514 10,149,529 1,032,416 14,605,043 15,637,459
SPRINGFIELD 2,745,595 10,985,778 4,102,038 2,904,022 14,929,389 17,833,411
KMART PARCEL 905,674 3,666,386 4,533,377 905,674 8,199,763 9,105,437
KRC ST. CHARLES -- 550,204 -- -- 550,204 550,204
ST. LOUIS, CHRISTY BLVD 809,087 4,430,514 892,293 809,087 5,322,807 6,131,894
OVERLAND -- 4,928,677 161,877 -- 5,090,554 5,090,554
ST. LOUIS -- 5,756,736 216,173 -- 5,972,909 5,972,909
ST. LOUIS -- 2,766,644 43,298 -- 2,809,942 2,809,942
ST. PETERS 1,182,194 7,423,459 148,752 1,182,194 7,572,211 8,754,405
SPRINGFIELD, GLENSTONE AVE -- 608,793 1,589,269 -- 2,198,062 2,198,062
ST. CHARLES-UNDERDEVELOPED
LAND, MO 431,960 -- 758,855 431,960 758,855 1,190,815
CHARLOTTE 919,251 3,570,981 1,036,008 919,251 4,606,989 5,526,240
CHARLOTTE 1,783,400 7,139,131 181,568 1,783,400 7,320,699 9,104,099
TYVOLA RD -- 4,736,345 1,853,235 -- 6,589,580 6,589,580
CROSSROADS PLAZA 767,864 3,098,881 -- 767,864 3,098,881 3,866,744
KIMCO CARY 696, INC 2,180,000 8,756,865 383,993 2,256,799 9,064,059 11,320,858
HOPE VALLEY FARMS 3,977,412 -- 8,170,330 3,977,412 8,170,330 12,147,742
DURHAM 1,882,800 7,551,576 1,130,056 1,882,800 8,681,632 10,564,432
LANDMARK STATION S.C 1,200,000 4,808,785 53,016 1,200,000 4,861,801 6,061,801
GASTONIA 2,467,696 9,870,785 864,334 2,467,696 10,735,119 13,202,815
RALEIGH 5,208,885 20,885,792 1,943,495 5,208,885 22,829,287 28,038,172
WAKEFIELD COMMONS II 6,506,450 -- 935,446 6,506,450 935,446 7,441,896
WAKEFIELD CROSSINGS 3,413,932 -- (1,784,670) 1,480,406 148,856 1,629,262
WAKEFIELD COMMONS 1,240,000 5,015,595 -- 1,240,000 5,015,595 6,255,595
SUTTON SQUARE 3,310,690 -- -- 3,310,690 13,245,510 16,556,200
WINSTON-SALEM 540,667 719,655 4,960,983 540,667 5,680,638 6,221,305
ROCKINGHAM 2,660,915 10,643,660 10,040,180 2,660,915 20,683,840 23,344,755
BRIDGEWATER NJ 3,511,411 227,498 8,867,382 3,511,411 9,094,880 12,606,291
CHERRY HILL 2,417,583 6,364,094 1,036,868 2,417,583 7,400,962 9,818,545
MARLTON PIKE -- 4,318,534 -- -- 4,318,534 4,318,534
CINNAMINSON 652,123 2,608,491 1,381,927 652,123 3,990,418 4,642,541
FRANKLIN TOWNE CENTER 4,903,113 19,608,193 41,428 4,903,113 19,649,621 24,552,734
HILLSBOROUGH 11,886,809 -- 20,143,094 11,886,809 20,143,094 32,029,903
HOLMDEL TOWNE CENTER 10,824,624 43,301,494 -- 10,824,624 43,301,494 54,126,118
STRAUSS DISCOUNT AUTO 1,225,294 91,203 -- 1,225,294 91,203 1,316,497
TOTAL COST,
NET OF DATE OF
ACCUMULATED ACCUMULATED CONSTRUCTION(C)
DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A)
------------ ------------ ------------ --------------
BELLEVUE 1,624,578 625,365 -- 1976(A)
LEXINGTON 2,621,845 10,993,886 -- 1993(A)
PADUCAH MALL, KY 143,407 780,679 -- 1998(A)
BATON ROUGE 2,059,602 18,071,593 -- 1997(A)
KIMCO HOUMA 274, LLC 646,938 9,377,712 -- 1999(A)
LAFAYETTE 1,757,926 17,595,428 -- 1997(A)
GREAT BARRINGTON 1,297,727 8,824,804 -- 1994(A)
LEOMINSTER 14,314,205 34,468,430 -- 1975(A)
SHREWSBURY SHOPPING CENTER 417,401 10,635,850 -- 2000(A)
WILDE LAKE 112,468 7,225,431 -- 2002(A)
LYNX LANE 78,111 5,032,819 -- 2002(A)
OAKLAND MILLS 51,013 3,279,233 -- 2002(A)
GAITHERSBURG 530,889 6,623,486 -- 1999(A)
GLEN BURNIE 51,282 948,718 -- 2000(A)
HAGERSTOWN 1,852,610 1,847,677 -- 1973(C)
LAUREL 542,485 2,054,952 -- 1995(A)
LAUREL 866,170 505,558 -- 1972(C)
LARGO/LANDOVER 2,094,085 26,111,286 -- 1999(A)
WHITE MARSH, COSTCO 1,617,114 15,972,797 -- 1998(A)
BANGOR, ME 42,732 2,077,184 -- 2001(A)
CLAWSON 1,839,391 8,923,055 -- 1993(A)
WHITE LAKE 1,652,576 11,251,506 -- 1996(A)
FARMINGTON 1,300,099 6,296,206 -- 1993(A)
FLINT 3,209,314 6,309,881 -- 2000(A)
LIVONIA 532,352 1,148,616 -- 1968(C)
MUSKEGON 1,269,073 869,732 -- 1985(A)
TAYLOR 1,376,586 6,105,953 -- 1993(A)
WALKER 3,567,549 16,654,469 -- 1993(A)
BRIDGETON 295,759 1,901,075 -- 1997(A)
CREVE COEUR, WOODCREST/OLIVE 663,243 6,359,682 -- 1998(A)
CRYSTAL CITY, MI 25,102 209,276 -- 1997(A)
CAPE GIRARDEAU 290,033 1,952,436 -- 1997(A)
HAZELWOOD, MO 23,083 301,175 -- 1971(C)
INDEPENDENCE, NOLAND DR 1,015,099 9,712,126 -- 1998(A)
NORTH POINT SHOPPING CENTER 820,556 9,083,491 7,195,441 1998(A)
KIRKWOOD 1,117,378 9,632,294 -- 1998(A)
KANSAS CITY 407,006 3,385,239 -- 1997(A)
LEMAY 506,025 310,748 -- 1974(C)
GRAVOIS 4,116,682 11,520,777 -- 1972(C)
SPRINGFIELD 2,665,285 15,168,126 -- 1994(A)
KMART PARCEL 52,168 9,053,269 3,250,798 2002(A)
KRC ST. CHARLES 56,431 493,772 -- 1998(A)
ST. LOUIS, CHRISTY BLVD 447,413 5,684,481 -- 1998(A)
OVERLAND 689,361 4,401,193 -- 1997(A)
ST. LOUIS 808,533 5,164,376 -- 1997(A)
ST. LOUIS 367,715 2,442,227 -- 1997(A)
ST. PETERS 953,299 7,801,106 -- 1997(A)
SPRINGFIELD, GLENSTONE AVE 126,190 2,071,872 -- 1998(A)
ST. CHARLES-UNDERDEVELOPED
LAND, MO 34,978 1,155,837 -- 1998(A)
CHARLOTTE 837,413 4,688,826 -- 1995(A)
CHARLOTTE 1,721,481 7,382,618 -- 1993(A)
TYVOLA RD 4,112,677 2,476,903 -- 1986(A)
CROSSROADS PLAZA 198,379 3,668,365 -- 2000(A)
KIMCO CARY 696, INC 1,063,115 10,257,743 -- 1998(A)
HOPE VALLEY FARMS -- 12,147,742 6,503,650 2002(C)
DURHAM 1,390,597 9,173,835 -- 1996(A)
LANDMARK STATION S.C 400,451 5,661,350 -- 1999(A)
GASTONIA 3,561,217 9,641,598 -- 1989(A)
RALEIGH 4,643,050 23,395,122 -- 1993(A)
WAKEFIELD COMMONS II -- 7,441,896 5,900,000 2001(C)
WAKEFIELD CROSSINGS -- 1,629,262 -- 2001(C)
WAKEFIELD COMMONS 214,316 6,041,279 -- 2001(C)
SUTTON SQUARE 11,164 16,545,036 --
WINSTON-SALEM 1,715,502 4,505,803 -- 1969(C)
ROCKINGHAM 3,438,784 19,905,971 -- 1994(A)
BRIDGEWATER NJ 1,491,363 11,114,928 -- 1998(C)
CHERRY HILL 3,687,947 6,130,598 4,025,000 1985(C)
MARLTON PIKE 701,301 3,617,233 -- 1996(A)
CINNAMINSON 345,931 4,296,609 -- 1996(A)
FRANKLIN TOWNE CENTER 2,267,162 22,285,572 12,217,480 1998(A)
HILLSBOROUGH -- 32,029,903 12,467,710 2001(C)
HOLMDEL TOWNE CENTER -- 54,126,118 -- 2002(A)
STRAUSS DISCOUNT AUTO -- 1,316,497 -- 2002(A)
90
INITIAL COST
BUILDING AND SUBSEQUENT BUILDINGS AND
PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL
- ---------- ---- ----------- -------------- ---- ------------ -----
NORTH BRUNSWICK 3,204,978 12,819,912 12,746,958 3,204,978 25,566,870 28,771,848
PISCATAWAY TOWN CENTER 3,851,839 15,410,851 73,029 3,851,839 15,483,880 19,335,719
RIDGEWOOD 450,000 2,106,566 982,954 450,000 3,089,520 3,539,520
WESTMONT 601,655 2,404,604 9,579,543 601,655 11,984,147 12,585,802
SYCAMORE PLAZA 1,404,443 5,613,270 56,400 1,404,443 5,669,670 7,074,113
PLAZA PASEO DEL-NORTE 4,653,197 18,633,584 288,617 4,653,197 18,922,201 23,575,398
JUAN TABO, ALBUQUERQUE 1,141,200 4,566,817 157,004 1,141,200 4,723,821 5,865,021
CANYON POINT 5,091,333 20,367,462 -- 5,091,333 20,367,462 25,458,795
BRIDGEHAMPTON 1,811,752 3,107,232 22,204,337 1,811,752 25,311,569 27,123,321
CARLE PLACE 1,183,290 4,903,642 11,185,850 1,314,540 15,958,242 17,272,782
KING KULLEN PLAZA 5,968,082 23,243,404 680,571 5,968,082 23,923,975 29,892,057
HAMPTON BAYS 1,495,105 5,979,320 113,495 1,495,105 6,092,815 7,587,920
HENRIETTA 1,075,358 6,635,486 683,250 1,075,358 7,318,736 8,394,094
IRONDEQUOIT 213,617 546,101 1,004,064 213,617 1,550,165 1,763,782
MANHASSET VENTURE LLC 4,567,003 19,165,808 2,689,567 4,567,003 21,855,375 26,422,378
NANUET 798,932 2,361,900 2,461,459 798,932 4,823,359 5,622,291
PLAINVIEW 263,693 584,031 9,620,395 263,693 10,204,426 10,468,119
POUGHKEEPSIE 876,548 4,695,659 12,524,453 876,548 17,220,112 18,096,660
SYOSSET, NY 106,655 76,197 656,299 -- 732,496 732,496
STATEN ISLAND 2,280,000 9,027,951 4,344,575 2,280,000 13,372,526 15,652,526
STATEN ISLAND 2,940,000 11,811,964 355,715 2,940,000 12,167,679 15,107,679
WEST GATES 1,784,718 9,721,970 (2,063,261) 1,784,718 7,658,709 9,443,427
YONKERS 871,977 3,487,909 -- 871,977 3,487,909 4,359,886
AKRON WATERLOO 437,277 1,912,222 4,113,885 437,277 6,026,107 6,463,384
WEST MARKET ST 560,255 3,909,430 193,675 560,255 4,103,105 4,663,360
ROMIG ROAD 855,713 5,472,635 -- 855,713 5,472,635 6,328,348
AKRON, OH -- 2,491,079 64,934 -- 2,556,013 2,556,013
BARBERTON 505,590 1,948,135 1,501,992 505,590 3,450,127 3,955,717
BRUNSWICK 771,765 6,058,560 606,553 771,765 6,665,113 7,436,878
BEAVERCREEK 635,228 3,024,722 2,772,189 635,228 5,796,911 6,432,139
MEMPHIS AVE 696,495 4,048,722 -- 696,495 4,048,722 4,745,218
CANTON HILLS 500,980 2,020,274 1,185,309 500,980 3,205,583 3,706,563
CANTON 792,985 1,459,031 4,390,486 792,985 5,849,517 6,642,502
CAMBRIDGE -- 1,848,195 885,408 473,060 2,260,543 2,733,603
MORSE RD 835,386 2,097,600 2,693,575 835,386 4,791,175 5,626,561
HAMILTON RD 856,178 2,195,520 3,747,927 856,178 5,943,447 6,799,625
OLENTANGY RIVER RD 764,517 1,833,600 2,243,843 764,517 4,077,443 4,841,960
W. BROAD ST 982,464 3,929,856 3,117,677 969,804 7,060,193 8,029,997
RIDGE ROAD 1,285,213 4,712,358 10,021,969 1,285,213 14,734,327 16,019,540
GLENWAY AVE 530,243 3,788,189 527,010 530,243 4,315,198 4,845,441
SPRINGDALE 3,205,653 14,619,732 5,358,223 3,205,653 19,977,955 23,183,608
EVERHARD RD 633,046 3,729,612 -- 633,046 3,729,612 4,362,658
SOUTH HIGH ST 602,421 2,737,004 22,343 602,421 2,759,347 3,361,768
CANTON, OH -- 2,708,276 (1,530,767) -- 1,177,613 1,177,613
GLENWAY CROSSING 699,359 3,112,047 86,996 699,359 3,199,043 3,898,402
HIGHLAND RIDGE PLAZA 1,540,000 6,178,398 141,991 1,540,000 6,320,389 7,860,389
SHILOH SPRING RD -- 1,735,836 1,927,464 -- 3,663,300 3,663,300
OAKCREEK 1,245,870 4,339,637 4,047,657 1,245,870 8,387,294 9,633,164
SALEM AVE 665,314 347,818 5,400,137 665,314 5,747,955 6,413,269
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
LIMA 695,121 3,080,479 726,190 695,121 3,806,669 4,501,790
MENTOR 503,981 2,455,926 665,167 503,981 3,121,093 3,625,074
MIDDLEBURG HEIGHTS 639,542 3,783,096 33,151 639,542 3,816,246 4,455,788
MENTOR ERIE COMMONS 2,234,474 9,648,000 4,510,609 2,234,474 14,158,609 16,393,083
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 4,800,143 -- 2,741,456 4,800,144 2,741,456 7,541,600
SPRINGBORO PIKE 1,854,527 2,572,518 2,568,712 1,854,527 5,141,230 6,995,757
SPRINGFIELD 842,976 3,371,904 1,489,623 842,976 4,861,527 5,704,503
UPPER ARLINGTON 504,256 2,198,476 8,243,706 1,255,544 9,690,894 10,946,438
WICKLIFFE 610,991 2,471,965 1,332,751 610,991 3,804,716 4,415,707
CHARDON ROAD 481,167 5,947,751 45,596 481,167 5,993,347 6,474,514
WESTERVILLE 1,050,431 4,201,616 7,630,230 1,050,431 11,831,846 12,882,277
EDMOND 477,036 3,591,493 -- 477,036 3,591,493 4,068,529
MIDWEST CITY 1,435,506 7,370,459 (3,397,576) 1,437,930 3,970,459 5,408,389
CENTENNIAL PLAZA 4,650,634 18,604,307 146,732 4,650,634 18,751,039 23,401,673
TULSA 500,950 2,002,508 11,500 500,950 2,014,008 2,514,958
TULSA -- -- 131,399 -- 131,399 131,399
CHIPPEWA 2,881,525 11,526,101 75,561 2,881,525 11,601,662 14,483,187
CARNEGIE -- 3,298,908 17,747 -- 3,316,655 3,316,655
CENTER SQUARE 731,888 2,927,551 -- 731,888 2,927,551 3,659,439
TOTAL COST,
NET OF DATE OF
ACCUMULATED ACCUMULATED CONSTRUCTION(C)
DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A)
------------ ------------ ------------ --------------
NORTH BRUNSWICK 4,370,294 24,401,553 -- 1994(A)
PISCATAWAY TOWN CENTER 1,783,545 17,552,174 -- 1998(A)
RIDGEWOOD 501,342 3,038,178 -- 1993(A)
WESTMONT 1,574,439 11,011,363 -- 1994(A)
SYCAMORE PLAZA 650,722 6,423,391 1,716,148 1998(A)
PLAZA PASEO DEL-NORTE 2,156,599 21,418,799 -- 1998(A)
JUAN TABO, ALBUQUERQUE 526,130 5,338,891 -- 1998(A)
CANYON POINT 10,144 25,448,651 -- 2002(A)
BRIDGEHAMPTON 7,928,857 19,194,464 -- 1972(C)
CARLE PLACE 2,141,159 15,131,624 -- 1993(A)
KING KULLEN PLAZA 3,284,043 26,608,014 -- 1998(A)
HAMPTON BAYS 2,515,387 5,072,533 -- 1989(A)
HENRIETTA 1,929,224 6,464,870 -- 1993(A)
IRONDEQUOIT 455,720 1,308,062 -- 1993(A)
MANHASSET VENTURE LLC 1,515,987 24,906,391 -- 1999(A)
NANUET 1,908,503 3,713,788 -- 1984(A)
PLAINVIEW 2,754,089 7,714,029 -- 1969(C)
POUGHKEEPSIE 4,528,546 13,568,114 -- 1972(C)
SYOSSET, NY 85,086 647,410 -- 1990(C)
STATEN ISLAND 4,757,144 10,895,382 -- 1989(A)
STATEN ISLAND 1,543,307 13,564,372 3,649,681 1997(A)
WEST GATES 2,359,231 7,084,196 -- 1993(A)
YONKERS 661,432 3,698,454 -- 1998(A)
AKRON WATERLOO 1,801,807 4,661,577 -- 1975(C)
WEST MARKET ST 1,766,098 2,897,262 -- 1999(A)
ROMIG ROAD 2,244,357 4,083,991 -- 1999(A)
AKRON, OH 837,214 1,718,799 -- 1999(A)
BARBERTON 1,761,982 2,193,735 -- 1972(C)
BRUNSWICK 5,363,585 2,073,294 -- 1975(C)
BEAVERCREEK 3,370,599 3,061,540 -- 1986(A)
MEMPHIS AVE 1,734,198 3,011,020 -- 1999(A)
CANTON HILLS 570,723 3,135,840 -- 1993(A)
CANTON 2,818,725 3,823,778 -- 1972(C)
CAMBRIDGE 1,589,555 1,144,048 -- 1973(C)
MORSE RD 1,907,190 3,719,371 -- 1988(A)
HAMILTON RD 2,204,184 4,595,442 -- 1988(A)
OLENTANGY RIVER RD 2,001,367 2,840,593 -- 1988(A)
W. BROAD ST 2,559,821 5,470,176 -- 1988(A)
RIDGE ROAD 1,752,931 14,266,609 -- 1992(A)
GLENWAY AVE 1,747,321 3,098,120 -- 1999(A)
SPRINGDALE 6,035,321 17,148,287 -- 1992(A)
EVERHARD RD 1,480,066 2,882,592 -- 1999(A)
SOUTH HIGH ST 1,402,759 1,959,009 -- 1999(A)
CANTON, OH 1,177,613 -- -- 1999(A)
GLENWAY CROSSING 194,849 3,703,553 -- 2000(A)
HIGHLAND RIDGE PLAZA 494,929 7,365,460 -- 1999(A)
SHILOH SPRING RD 2,330,706 1,332,594 -- 1969(C)
OAKCREEK 3,798,561 5,834,602 4,225,000 1984(A)
SALEM AVE 1,904,869 4,508,400 -- 1988(A)
KETTERING 2,270,534 4,353,485 -- 1988(A)
KENT, OH 990,640 2,044,528 -- 1999(A)
KENT -- 2,261,530 -- 1995(A)
LIMA 708,773 3,793,016 -- 1995(A)
MENTOR 1,458,286 2,166,788 -- 1987(A)
MIDDLEBURG HEIGHTS 1,538,989 2,916,799 -- 1999(A)
MENTOR ERIE COMMONS 4,460,283 11,932,800 -- 1988(A)
MALLWOODS CENTER 5,062 1,473,712 -- 1999(C)
NORTH OLMSTED 1,478,752 2,895,110 -- 1999(A)
ORANGE OHIO -- 7,541,600 -- 2001(C)
SPRINGBORO PIKE 2,895,278 4,100,479 -- 1985(C)
SPRINGFIELD 1,626,009 4,078,494 -- 1988(A)
UPPER ARLINGTON 4,724,515 6,221,923 -- 1969(C)
WICKLIFFE 654,167 3,761,539 -- 1995(A)
CHARDON ROAD 1,923,098 4,551,416 -- 1999(A)
WESTERVILLE 3,153,154 9,729,123 -- 1988(A)
EDMOND 450,056 3,618,473 -- 1997(A)
MIDWEST CITY 848,707 4,559,682 -- 1998(A)
CENTENNIAL PLAZA 2,164,970 21,236,703 9,554,818 1998(A)
TULSA 355,331 2,159,627 -- 1996(A)
TULSA 14,692 116,707 -- 1997(A)
CHIPPEWA 865,656 13,617,531 12,146,296 2000(A)
CARNEGIE 255,128 3,061,528 -- 1999(A)
CENTER SQUARE 475,415 3,184,024 -- 1996(A)
91
INITIAL COST
BUILDING AND SUBSEQUENT BUILDINGS AND
PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL
- ---------- ---- ----------- -------------- ---- ------------ -----
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 1,057,589 1,050,000 3,430,217 4,480,217
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 2,386,166 889,001 5,539,713 6,428,714
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 -- 452,888 6,665,238 7,118,126
SIMPSON FERRY 658,346 6,908,711 308,060 658,346 7,216,771 7,875,116
HAMBURG 439,232 -- 2,023,428 494,982 1,967,677 2,462,660
HAVERTOWN 731,888 2,927,551 -- 731,888 2,927,551 3,659,439
OLMSTED 167,337 2,815,856 444,283 167,337 3,260,139 3,427,476
MIDDLETOWN 207,283 1,174,603 447,331 207,283 1,621,934 1,829,217
NORRISTOWN 686,134 2,664,535 3,374,215 774,084 5,950,800 6,724,884
NEW KENSINGTON 521,945 2,548,322 676,040 521,945 3,224,362 3,746,307
PENN HILLS -- 1,737,289 -- -- 1,737,289 1,737,289
PHILADELPHIA 731,888 2,927,551 -- 731,888 2,927,551 3,659,439
GALLERY, PHILADELPHIA PA -- -- 258,931 -- 258,931 258,931
RICHBORO 788,761 3,155,044 11,321,312 976,439 14,288,678 15,265,117
SPRINGFIELD 919,998 4,981,589 1,517,181 919,998 6,498,770 7,418,768
TREXLERTOWN WELLNESS -- 2,880,597 10,213 -- 2,600,047 2,600,047
UPPER ALLEN 445,743 1,782,972 173,253 445,743 1,956,225 2,401,968
UPPER DARBY 231,821 927,286 3,304,456 285,828 4,106,486 4,392,314
WEST MIFFLIN HILLS 636,366 3,199,729 7,028,351 636,366 10,228,080 10,864,446
WEST MIFFLIN 1,468,341 -- -- 1,468,341 -- 1,468,341
WHITEHALL -- 5,195,577 9,231 -- 5,204,808 5,204,808
EASTERN BLVD 412,016 1,876,962 602,164 412,016 2,479,126 2,891,142
E. PROSPECT ST 604,826 2,755,314 309,126 604,826 3,064,440 3,669,266
W. MARKET ST 188,562 1,158,307 -- 188,562 1,158,307 1,346,869
MARSHALL PLAZA, CRANSTON RI 1,886,600 7,575,302 368,647 1,886,600 7,943,949 9,830,549
AIKEN 183,901 1,087,979 69,601 183,901 1,157,580 1,341,481
CHARLESTON 730,164 3,132,092 4,569,389 730,164 7,701,481 8,431,645
CHARLESTON 1,744,430 6,986,094 3,515,642 1,744,430 10,501,736 12,246,166
FLORENCE 1,465,661 6,011,013 85,458 1,465,661 6,096,471 7,562,132
GREENVILLE 2,209,812 8,850,864 120,303 2,209,812 8,971,167 11,180,979
NORTH CHARLESTON 744,093 2,974,990 18,815 744,093 2,993,805 3,737,898
N. CHARLESTON 2,965,748 11,895,294 400,974 2,965,748 12,296,268 15,262,016
MADISON -- 4,133,904 2,007,570 -- 6,141,474 6,141,474
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
MARKET PLACE AT RIVERGATE 2,574,635 10,339,449 491,717 2,574,635 10,831,166 13,405,801
RIVERGATE, TN 3,038,561 12,157,408 2,422,836 3,038,561 14,580,244 17,618,805
CENTER OF THE HILLS, TX 2,923,585 11,706,145 272,976 2,923,585 11,979,121 14,902,706
ARLINGTON 500,414 2,001,656 -- 500,414 2,001,656 2,502,070
ARLINGTON 3,160,203 2,285,377 -- 3,160,203 2,285,377 5,445,580
DOWLEN CENTER 2,244,581 -- 5,366,156 2,244,581 5,366,156 7,610,737
BURLESON 8,600,698 -- 17,970,997 8,600,698 17,970,997 26,571,695
BAYTOWN 500,422 2,431,651 208,430 500,422 2,640,081 3,140,503
CORPUS CHRISTI, TX -- 944,562 3,180,673 -- 4,125,235 4,125,235
DALLAS 1,299,632 5,168,727 4,652,572 1,299,632 9,821,299 11,120,931
DUNCANVILLE 500,414 2,001,656 -- 500,414 2,001,656 2,502,070
GARLAND 210,286 845,845 -- 210,286 845,845 1,056,131
GARLAND 500,414 2,001,656 -- 500,414 2,001,656 2,502,070
SPRING CYPRESS, TX 2,261,557 -- 5,725,496 2,261,557 5,725,496 7,987,053
CENTER AT BAYBROOK 6,941,017 27,727,491 30,255 6,941,017 27,757,746 34,698,763
HARRIS COUNTY 1,843,000 7,372,420 885,401 2,003,260 8,097,561 10,100,821
SHARPSTOWN COURT 1,560,010 6,245,807 25,917 1,560,010 6,271,724 7,831,734
SHOPS AT VISTA RIDGE 3,257,199 13,029,416 82,992 3,257,199 13,112,408 16,369,607
VISTA RIDGE PLAZA 2,926,495 11,716,483 1,433,373 2,926,495 13,149,856 16,076,351
VISTA RIDGE PHASE II 2,276,575 9,106,300 -- 2,276,575 9,106,300 11,382,875
SOUTH PLAINES PLAZA, TX 1,890,000 7,577,145 83,854 1,890,000 7,661,000 9,551,000
MESQUITE 520,340 2,081,356 711,892 520,340 2,793,248 3,313,588
MESQUITE TOWN CENTER 3,757,324 15,061,644 796,177 3,757,324 15,857,821 19,615,145
N. RICHLAND HILLS 1,000,000 -- 80,837 1,065,837 15,000 1,080,837
FORUM AT OLYMPIA PARKWAY 1,829,102 -- 1,239,162 1,662,390 8,230,145 9,892,535
PLANO 500,414 2,830,835 -- 500,414 2,830,835 3,331,249
WEST OAKS 500,422 2,001,687 -- 500,422 2,001,687 2,502,109
MARKET STREET AT WOODLANDS 10,920,168 -- 2,587,444 10,920,168 2,587,444 13,507,612
OGDEN 213,818 855,275 543,594 213,818 1,398,869 1,612,687
COLONIAL HEIGHTS 125,376 3,476,073 10,220 125,376 3,486,293 3,611,669
HARRISONBURG 69,885 1,938,239 -- 69,885 1,938,239 2,008,123
MANASSAS 1,788,750 7,162,661 171,273 1,788,750 7,333,934 9,122,684
RICHMOND 82,544 2,289,288 292,171 82,544 2,581,460 2,664,003
TOTAL COST,
NET OF DATE OF
ACCUMULATED ACCUMULATED CONSTRUCTION(C)
DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A)
------------ ------------ ------------ --------------
WEST MIFFLIN 541,895 2,561,567 -- 1993(A)
EAST STROUDSBURG 2,146,602 2,333,616 -- 1973(C)
EXTON 376,566 4,695,460 -- 1999(A)
EXTON 475,415 3,184,024 -- 1996(A)
EASTWICK 817,619 5,611,095 4,778,036 1997(A)
FEASTERVILLE 324,635 2,316,661 -- 1996(A)
GETTYSBURG 663,155 184,620 -- 1986(A)
HARRISBURG, PA 3,795,301 3,322,824 -- 2002(A)
SIMPSON FERRY 2,544,620 5,330,497 -- 2000(A)
HAMBURG 37,840 2,424,820 2,662,352 2000(C)
HAVERTOWN 475,415 3,184,024 -- 1996(A)
OLMSTED 2,416,814 1,010,662 -- 1973(C)
MIDDLETOWN 1,078,870 750,347 -- 1986(A)
NORRISTOWN 3,240,026 3,484,858 -- 1984(A)
NEW KENSINGTON 2,578,146 1,168,161 -- 1986(A)
PENN HILLS 1,457,762 279,527 -- 1986(A)
PHILADELPHIA 475,415 3,184,024 -- 1996(A)
GALLERY, PHILADELPHIA PA 4,846 254,085 -- 1996(A)
RICHBORO 4,549,046 10,716,070 -- 1986(A)
SPRINGFIELD 3,738,733 3,680,035 2,825,000 1983(A)
TREXLERTOWN WELLNESS 1,142,196 1,457,852 1,780,841 1997(A)
UPPER ALLEN 1,604,241 797,727 -- 1986(A)
UPPER DARBY 755,624 3,636,689 3,754,170 1996(A)
WEST MIFFLIN HILLS 4,809,697 6,054,749 -- 1973(C)
WEST MIFFLIN -- 1,468,341 -- 1986(A)
WHITEHALL 843,727 4,361,081 -- 1996(A)
EASTERN BLVD 1,671,890 1,219,252 -- 1987(A)
E. PROSPECT ST 2,496,897 1,172,369 -- 1986(A)
W. MARKET ST 1,010,953 335,916 -- 1986(A)
MARSHALL PLAZA, CRANSTON RI 949,778 8,880,771 -- 1998(A)
AIKEN 478,773 862,708 -- 1989(A)
CHARLESTON 2,228,080 6,203,565 -- 1978(C)
CHARLESTON 1,596,822 10,649,344 -- 1995(A)
FLORENCE 815,592 6,746,540 -- 1997(A)
GREENVILLE 1,126,229 10,054,749 -- 1997(A)
NORTH CHARLESTON 185,773 3,552,125 2,118,704 2000(A)
N. CHARLESTON 1,384,786 13,877,229 -- 1997(A)
MADISON 3,683,675 2,457,799 -- 1978(C)
HICKORY RIDGE COMMONS 161,353 2,987,650 -- 2000(A)
TROLLEY STATION 1,441,943 15,136,464 11,005,390 1998(A)
MARKET PLACE AT RIVERGATE 1,188,400 12,217,400 -- 1998(A)
RIVERGATE, TN 1,389,340 16,229,464 -- 1998(A)
CENTER OF THE HILLS, TX 1,338,848 13,563,858 -- 1998(A)
ARLINGTON 354,992 2,147,078 -- 1996(A)
ARLINGTON 301,476 5,144,105 -- 1997(A)
DOWLEN CENTER -- 7,610,737 123,971 2002(C)
BURLESON -- 26,571,695 -- 2000(C)
BAYTOWN 410,137 2,730,366 -- 1996(A)
CORPUS CHRISTI, TX 152,849 3,972,386 -- 1997(A)
DALLAS 8,388,021 2,732,910 -- 1969(C)
DUNCANVILLE 354,992 2,147,078 -- 1996(A)
GARLAND 144,310 911,821 -- 1996(A)
GARLAND 354,992 2,147,078 -- 1996(A)
SPRING CYPRESS, TX -- 7,987,053 -- 2001(C)
CENTER AT BAYBROOK 3,182,731 31,516,032 -- 1998(A)
HARRIS COUNTY 1,073,331 9,027,490 -- 1997(A)
SHARPSTOWN COURT 630,135 7,201,599 5,822,851 1999(A)
SHOPS AT VISTA RIDGE 1,511,969 14,857,638 18,154,041 1998(A)
VISTA RIDGE PLAZA 1,377,543 14,698,807 -- 1998(A)
VISTA RIDGE PHASE II 972,474 10,410,401 -- 1998(A)
SOUTH PLAINES PLAZA, TX 928,978 8,622,021 5,531,532 1998(A)
MESQUITE 478,666 2,834,922 -- 1995(A)
MESQUITE TOWN CENTER 1,743,476 17,871,669 -- 1998(A)
N. RICHLAND HILLS -- 1,080,837 -- 1997(A)
FORUM AT OLYMPIA PARKWAY -- 9,892,535 -- 1999(C)
PLANO 448,016 2,883,233 -- 1996(A)
WEST OAKS 354,994 2,147,115 -- 1996(A)
MARKET STREET AT WOODLANDS -- 13,507,612 -- 2002(C)
OGDEN 987,849 624,838 -- 1967(C)
COLONIAL HEIGHTS 268,469 3,343,200 -- 1999(A)
HARRISONBURG 149,095 1,859,028 -- 1999(A)
MANASSAS 964,479 8,158,205 -- 1997(A)
RICHMOND 21,965 2,642,038 -- 1999(A)
92
INITIAL COST
BUILDING AND SUBSEQUENT BUILDINGS AND
PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS TOTAL
- ---------- ---- ----------- -------------- ---- ------------ -----
RICHMOND 670,500 2,751,375 -- 670,500 2,751,375 3,421,875
RACINE 1,403,082 5,612,330 1,517,130 1,403,082 7,129,460 8,532,542
CHARLES TOWN 602,000 3,725,871 10,429,460 602,000 14,155,331 14,757,331
MARTINSBURG 242,634 1,273,828 628,937 242,634 1,902,765 2,145,399
RIVERWALK PLAZA 2,708,290 10,841,674 69,794 2,708,290 10,911,468 13,619,758
PLAZA REAL SALTILLO 11,219,522 10,247,831 -- 11,219,522 10,247,831 21,467,353
PLAZA REAL SENDERO NORTE 8,812,971 4,217,562 -- 8,812,971 4,217,562 13,030,533
BALANCE OF PORTFOLIO 205,631 4,492,127 25,474,116 3,746,182 31,386,020 35,132,201
------------ -------------- --------------
$592,655,320 $2,806,315,647 $3,398,970,967
============ ============== ==============
TOTAL COST,
NET OF DATE OF
ACCUMULATED ACCUMULATED CONSTRUCTION(C)
DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A)
------------ ------------ ------------ --------------
RICHMOND 351,939 3,069,936 -- 1995(A)
RACINE 2,721,128 5,811,414 -- 1988(A)
CHARLES TOWN 5,330,508 9,426,823 -- 1985(A)
MARTINSBURG 1,456,156 689,243 -- 1986(A)
RIVERWALK PLAZA 1,076,116 12,543,641 7,956,529 1999(A)
PLAZA REAL SALTILLO 124,616 21,342,737 -- 2002(A)
PLAZA REAL SENDERO NORTE 49,965 12,980,568 -- 2002(A)
BALANCE OF PORTFOLIO 11,603,487 23,528,715 -- VARIOUS
-------------- -------------- -------------
$ 516,558,124 $2,882,412,843 $ 274,731,971
============== ============== =============
Depreciation and amortization of the Company's investment in buildings and
improvements reflected in the statements of income is calculated over the
estimated useful lives of the assets as follows:
Buildings.................... 15 to 39 years
Improvements................. Terms of leases or useful lives, whichever is shorter
The aggregate cost for Federal income tax purposes was approximately $3.3
billion at December 31, 2002.
The changes in total real estate assets for the years ended December 31, 2002,
2001 and 2000 are as follows:
2002 2001 2000
--------------- --------------- ---------------
Balance, beginning of period .................................. $ 3,201,363,929 $ 3,111,707,470 $ 2,951,050,304
Acquisitions ................................................ 287,379,293 61,622,301 93,347,127
Improvements ................................................ 154,638,211 134,094,630 101,030,279
Transfers from (to) unconsolidated joint ventures .......... 415,492 (38,139,367) 5,567,007
Sales ....................................................... (200,957,621) (60,388,331) (39,287,247)
Assets held for sale ........................................ (10,837,674) -- --
Adjustment of property carrying values ...................... (33,030,663) -- --
Adjustment for fully depreciated assets ..................... -- (7,532,774) --
--------------- --------------- ---------------
Balance, end of period ........................................ $ 3,398,970,967 $ 3,201,363,929 $ 3,111,707,470
=============== =============== ===============
The changes in accumulated depreciation for the years ended December 31, 2002,
2001, and 2000 are as follows:
2002 2001 2000
--------------- --------------- ---------------
Balance, beginning of period .................................. $ 452,877,433 $ 391,945,913 $ 323,737,853
Charged to accumulated depreciation ........................... -- 3,445,686 4,474,484
Depreciation for year ....................................... 72,791,420 69,901,342 68,590,773
Transfers from (to) unconsolidated joint ventures ........... 3,575,220 (1,810,541) 42,580
Sales ....................................................... (9,771,567) (3,072,193) (4,899,777)
Assets held for sale ........................................ (2,914,382) -- --
Adjustment for fully depreciated assets ..................... -- (7,532,774) --
--------------- --------------- ---------------
Balance, end of period ........................................ $ 516,558,124 $ 452,877,433 $ 391,945,913
=============== =============== ===============
93