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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 1999
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 ______
Commission File No. 1-12494
CBL & ASSOCIATES PROPERTIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 62-1545718
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
6148 Lee Highway, Suite 300
Chattanooga, Tennessee 37421
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (423) 855-0001
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange
Title of Each Class on which Registered
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Common Stock, $.01 par New York Stock Exchange
value per share
9% Series A Cumulative New York Stock Exchange
Redeemable Preferred
Stock, par value $.01 per share,
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all Reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant was approximately $531,789,880 based on the closing price on the
New York Stock Exchange for such stock on March 21, 2000.
As of March 21, 2000, there were 24,806,525 shares of the Registrant's
Common Stock outstanding and 2,875,000 shares of 9% Series A Cumulative
Redeemable Preferred Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates certain information by reference to the Registrant's
definitive proxy statement filed on March 24, 2000 in respect to the Annual
Meeting of Stockholders to be held on May 3, 2000.
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FORM 10-K
TABLE OF CONTENTS
Item No. Page
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PART I
Item 1 Business....................................................... 3
Item 2 Properties..................................................... 15
Item 3 Legal Proceedings.............................................. 37
Item 4 Submission of Matters to a Vote of Security Holders............ 37
PART II
Item 5 Market for Registrant's Common Equity and Related
Shareholder Matters............................................ 37
Item 6 Selected Financial Data........................................ 39
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 40
Item 7A Quantitative and Qualitative Disclosures about Market Risk..... 53
Item 8 Financial Statements and Supplementary Data.................... 53
Item 9 Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure............................ 53
PART III
Item 10 Directors and Executive Officers of the Registrant............. 53
Item 11 Executive Compensation......................................... 53
Item 12 Security Ownership of Certain Beneficial Owners
and Management................................................. 53
Item 13 Certain Relationships and Related Transactions................. 53
PART IV
Item 14 Exhibits, Financial Statement Schedules and
Reports on Form 8-K............................................ 54
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Cautionary Statement Relevant to Forward-Looking Information or the Purpose of
the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of
1995
This Annual Report on Form 10-K contains forward-looking statements, such as
information relating to the Company's growth strategy, projects under
construction, liquidity and capital resources, compliance with environmental
laws and regulations, and the year 2000 compliance of the Company's computer
systems. Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially, including, but not limited to,
those set forth below. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances occurring after the date hereof or
to reflect the occurrence of unanticipated events.
PART I
ITEM 1. BUSINESS.
Formation of the Company
CBL & Associates Properties, Inc. (the "Company") is a self-managed,
self-administered, fully-integrated real estate company which is engaged in the
ownership, operation, marketing, management, leasing, expansion, development,
redevelopment, acquisition and financing of regional malls and community and
neighborhood centers. The Company was incorporated on July 13, 1993 under the
laws of the State of Delaware to acquire an interest in substantially all of the
real estate properties owned by CBL & Associates, Inc. and its affiliates
("CBL") and to provide a public vehicle for the expansion of CBL's shopping
center business.
The Company conducts substantially all of its business through CBL & Associates
Limited Partnership, a Delaware Limited Partnership (the "Operating
Partnership"), in which the Company owns an indirect 67.7% interest and of which
the Company's wholly-owned subsidiary is the sole general partner. To comply
with certain technical requirements of the Internal Revenue Code of 1986, as
amended (the "Code") applicable to Real Estate Investment Trusts' ("REIT's"),
the Company's property management and development activities, sales of
peripheral land and maintenance and security operations are carried out through
CBL & Associates Management, Inc. (the "Management Company").
On November 3, 1993, the Company completed the initial public offering (the
"Offering") of 15,400,000 shares of its common stock, par value $.01 per share
(the "Common Stock"). Simultaneously with the completion of the Offering, CBL
transferred to the Operating Partnership substantially all of CBL's interests in
its real estate properties and its management and development operations in
exchange for an interest in the Operating Partnership. CBL also acquired an
additional interest in the Operating Partnership for a cash payment. Each of the
partnership interests in the Operating Partnership may, at the election of its
respective holder, be exchanged for shares of Common Stock of the Company,
subject to certain limitations imposed by the Code.
The Offering and the application of proceeds therefrom, including the Operating
Partnership's acquisition of certain property interests, and the contribution by
CBL of property interests to the Operating Partnership, are referred to herein
as the "Formation."
In September 1995, the Company completed a follow-on offering of 4,163,500
shares of its Common Stock at $20.625 per share. CBL purchased 150,000 of these
shares.
In January 1997, the Company completed a follow-on offering of 3,000,000 shares
of its Common Stock at $26.125 per share. CBL purchased 55,000 of these shares.
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In June 1998, the Company completed a public offering of 2,875,000 shares of 9%
Series A Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock")
at a price to the public of $25.00 per share. The net proceeds of $70 million
were used to repay variable rate indebtedness incurred in the Company's
development and acquisition programs.
In October 1999 the Company acquired a tract of land in Muskegon, Michigan
for the development of a regional mall thereon. As a part of the acquisition, a
third party contributed a portion of the land to the Operating Partnership
receiving in return a limited partner interest in the Operating Partnership with
a value of $1,927,000 on the date of contribution.
After giving effect to the above transactions at December 31, 1999, CBL
(including interest held by former executive) holds a 25.6% limited partner
interest in the Operating Partnership, the Company holds a 67.7% general and
limited partner interest in the Operating Partnership and third parties hold a
6.7% limited partner interest. In addition, CBL holds approximately 1.8 million
of the outstanding shares of Common Stock for a total ownership share of 30.6%.
General
The Company owns interests in a portfolio of properties, which as of December
31, 1999 consisted of 30 enclosed regional malls (the "Malls"), 15 associated
centers (the "Associated Centers"), each of which is part of a regional shopping
mall complex, and 82 independent community and neighborhood shopping centers
(the "Community Centers"). Except for eleven Malls, three Associated Centers and
three Community Centers which were acquired from third parties, each of these
properties were developed by CBL or the Company.
Additionally, as of December 31, 1999 the Company owned one regional Mall, one
Associated Center and three neighborhood shopping centers currently under
construction (the "Construction Properties"). The Company also owned as of
December 31, 1999 options to acquire certain shopping center development sites
(the "Development Properties").
The Company also owned, as of December 31, 1999, mortgages (the "Mortgages") on
community and neighborhood shopping centers owned by non-CBL affiliates. The
Mortgages were granted in connection with sales by CBL of certain properties
previously developed by CBL. The Company also owns an interest in a three-story
office building in Chattanooga, Tennessee, a portion of which serves as the
Company's headquarters (the "Office Building"). The Malls, Associated Centers,
Community Centers, Construction Properties, Development Properties, Mortgages
and Office Building are collectively referred to herein as the "Properties" and
individually as a "Property".
As of December 31, 1999 the Company had also entered into standby purchase
agreements with third-party developers for the construction, development and
potential ownership of two community centers in Texas (the "Co-Development
Projects"). The developers have utilized these standby purchase agreements as
additional security for their lenders to fund the construction of the
Co-Development Projects. The standby purchase agreements for each of the
Co-Development Projects require the Company to purchase the related
Co-Development Project upon such Co-Development Project meeting certain
completion requirements and rental levels. In return for its commitment to
purchase a Co-Development Project pursuant to a standby purchase agreement, the
Company receives a fee as well as a participation interest in each
Co-Development Project. The outstanding amount of standby purchase agreements at
December 31, 1999 is $60.7 million.
The Company and the Operating Partnership generally own a 100% interest in the
Properties. With two exceptions, where the Company and the Operating Partnership
own less than a 100% interest in a Property, the Operating Partnership is the
sole general partner, managing general partner or managing member of the
property partnership or limited liability company which owns such Property (each
a "Property Partnership"). For one Mall and its Associated Center, affiliates of
the Operating Partnership are non-managing general partners in the two Property
Partnerships owning those Properties.
For a full description of the Properties, see Item 2 -- "Properties."
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The Company's executive offices are located at 6148 Lee Highway, Suite 300,
Chattanooga, Tennessee 37421-6511. The telephone number at this address is (423)
855-0001.
Management and Operation of Properties
Management Company
The Company is self-managed and self-administered. To comply with certain
technical requirements of the Code, the Company's property management and
development activities, sales of peripheral land and maintenance and security
operations are carried out through the Management Company.
The Operating Partnership holds 100% of the preferred stock and 5% of the
common stock of the Management Company. The remaining 95% of the common stock is
held by Charles Lebovitz, his family and his associates. Substantially all of
CBL's asset management, property management and leasing and development
operations, including CBL's executive, property, financial, legal and
administrative personnel, were transferred to the Management Company as part of
the Formation. The Management Company manages all of the Properties (except for
Governor's Square and Governor's Plaza in Clarksville, Tennessee -- see below)
under a management agreement that may be terminated at any time by the Operating
Partnership upon 30 days written notice. In addition, the Management Company
manages certain properties owned by CBL that were not transferred to the Company
in the Formation as well as certain shopping centers owned by non-CBL
affiliates. Through its ownership of the Management Company's preferred stock,
the Operating Partnership enjoys substantially all of the economic benefits of
the Management Company's business. Requirements set forth in the Management
Company's Amended and Restated Certificate of Incorporation, state that a
majority of the Management Company's board of directors are required to be
independent of CBL. From November 1993 to the current date, the board of
directors of the Management Company has consisted of the same individuals as the
Company's board of directors, including the four independent directors.
On-Site Management
The on-site property management functions at the Malls include leasing,
management, data processing, rent collection, project bookkeeping, budgeting,
marketing, and promotion. Each Mall, for itself and its Associated Centers, has
an on-site property manager who oversees the on-site staff and an on-site
marketing director who oversees the marketing program for that Mall. District
managers, most of whom are located at the Company's headquarters, oversee the
leasing and operations at a majority of the Community Centers. The on-site Mall
managers are experienced managers with training in mall management.
Virtually all operating activities of the Company are supported by a
computer software system which is designed to provide management with operating
data necessary to make informed business decisions on a timely basis. The
Company has a program of on-going upgrades to hardware and software that support
the accounting and management information system. Subsequent to the year end the
Company also completed an upgrade and revision to the Company's web site used to
publish integrated information on the world wide web. These systems were
developed to more efficiently assist management in efforts to martket the
properties, maintain management quality, enhance investor relations and
communications and enhance tenant relations while minimizing operating expenses.
Retail sales analysis, leasing information, budget controls, accounts
receivable/payable, operating expense variance reports and income analysis are
continually available to management. Through these systems management also has
available information that facilitates the development and monitoring of budgets
and other relevant information. See Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations - Year 2000.
Management pursues periodic preventative property maintenance programs,
which encompass paving, roofing, HVAC and general improvements to the
Properties' common areas. The on-site property managers oversee all such work in
accordance with approved budgets with the coordination of, and reporting to
home office management.
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Governor's Square
Governor's Square and Governor's Plaza are the only Properties in the
Company's portfolio in which the Company is not the sole general partner or
managing general partner. Governor's Square is owned by a Property Partnership,
the managing general partner of which is a non-CBL affiliate which owns a 47.5%
interest in the Mall. The Company is a non-managing general partner of
Governor's Plaza. Although the managing general partner of this partnership
controls the timing of distributions of cash flow, the Company's approval is
required for certain major decisions, including permanent financing, refinancing
and sale of all or substantially all of the partnership's assets. Property
management services, including accounting, auditing, maintenance, promotional
programs, leasing, collection and insurance, are performed by a property manager
affiliated with the non-CBL managing general partner for which such property
manager receives a fee.
Employees
The Company, through the Management Company, currently employs
approximately 376 full time and 143 part time persons. None of these employees
is currently represented by any union. The Company does not have any employees
other than its statutory officers.
Environmental Matters
Under various federal, state and local laws, ordinances and regulations, a
current or previous owner or operator of real estate may be liable for the costs
of removal or remediation of petroleum, certain hazardous or toxic substances
on, under or in such real estate. Such laws typically impose such liability
without regard to whether the owner or operator knew of, or was responsible for,
the presence of such substances. The costs of remediation or removal of such
substances may be substantial, and the presence of such substances, or the
failure to promptly remediate such substances, may adversely affect the owner's
or operator's ability to sell such real estate or to borrow using such real
estate as collateral. Persons who arrange for the disposal or treatment of
hazardous or toxic substances may also be liable for the costs of removal or
remediation of such substances at the disposal or treatment facility, regardless
of whether such facility is owned or operated by such person. Certain laws also
impose requirements on conditions and activities that may affect the environment
or the impact of the environment on human health. Failure to comply with such
requirements could result in the imposition of monetary penalties (in addition
to the costs to achieve compliance) and potential liabilities to third parties.
Among other things, certain laws require abatement or removal of friable and
certain non-friable asbestos-containing materials ("ACMs") in the event of
demolition or certain renovations or remodeling. Certain laws regarding ACMs
require building owners and lessees, among other things, to notify and train
certain employees working in areas known or presumed to contain ACMs. Certain
laws also impose liability for release of ACMs into the air and third parties
may seek recovery from owners or operators of real properties for personal
injury or property damage associated with ACMs. In connection with its ownership
and operation of the Properties, the Company, the Operating Partnership or the
relevant Property Partnership, as the case may be, may be potentially liable for
such costs or claims.
All of the Properties (excluding properties upon which the Company holds an
option to purchase but does not yet own) have been subject to Phase I
environmental assessments or updates of existing Phase I environmental
assessments by independent environmental consultants. Such assessments generally
consisted of a visual inspection of the Properties, review of federal and state
environmental databases and certain information regarding historic uses of the
Property and adjacent areas and the preparation and issuance of written reports.
Some of the Properties contain, or contained, underground storage tanks ("UST"s)
used for storing petroleum products or wastes typically associated with
automobile service or other operations conducted at the Properties. Parkway
Place was acquired in December 1998 and all of the existing building will be
demolished over time as the mall is redeveloped. Approximately 350 square feet
of ground in the vicinity of a former auto service center has been identified as
being contaminated with Total Petroleum Hydrocarbons and is scheduled to be
remediated during the demolition process. Certain Properties contain, or
contained, dry-cleaning establishments utilizing solvents. Where believed to be
warranted, samples of building materials or subsurface investigations were, or,
with respect to one
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Property, will be undertaken. At certain Properties, where warranted by the
conditions, the Company has developed and implemented an operations and
maintenance program that establishes operating procedures with respect to ACMs.
The costs associated with the development and implementation for such programs
were not material.
Although there can be no assurances that such environmental liability does
not exist, other than Parkway Place in Huntsville, Alabama, none of the
environmental assessments have identified and the Company is not aware of any
environmental liability with respect to the properties in which the Company or
the Operating Partnership has or had an interest (whether as an owner or
operator) that the Company believes would have a material adverse effect on the
Company's financial condition, results of operations or cash flows.
Nevertheless, it is possible that the environmental assessments available to the
Company do not reveal all potential environmental liabilities, that subsequent
investigations will identify material contamination, that adverse environmental
conditions have arisen subsequent to the performance of the environmental
assessments, or that there are material environmental liabilities of which
management is unaware. Moreover, no assurances can be given that (i) future
laws, ordinances or regulations will not impose any material environmental
liability or (ii) the current environmental condition of the Properties has not
been or will not be affected by tenants and occupants of the Properties, by the
condition of properties in the vicinity of the Properties or by third parties
unrelated to the Company, the Operating Partnership or the relevant Property
Partnership. The existence of any such environmental liability could have an
adverse effect on the Company's results of operations, cash flow and the funds
available to the Company to pay dividends.
The Company has not recorded in its financial statements any material
liability in connection with environmental matters.
General Risks of the Company's Business
General Factors Affecting Investments in Shopping Center Properties and
Effect of Economic and Real Estate Conditions
A shopping center's revenues and value may be adversely affected by a
number of factors, including: the national and regional economic climates; local
real estate conditions (such as an oversupply of retail space); perceptions by
retailers or shoppers of the safety, convenience and attractiveness of the
shopping center; and the willingness and ability of the shopping center's owner
to provide capable management and maintenance services. In addition, other
factors may adversely affect a shopping center's value without affecting its
current revenues, including: changes in governmental regulations, zoning or tax
laws; potential environmental or other legal liabilities; availability of
financing; and changes in interest rate levels. There are numerous shopping
facilities that compete with the Properties in attracting retailers to lease
space. In addition, retailers at the Properties face continued competition from
discount shopping centers, outlet malls, wholesale clubs, direct mail,
telemarketing, television shopping networks and shopping via the Internet.
Competition could adversely affect the Operating Partnership's revenues and
funds available for distribution to partners, which in turn will affect the
Company's revenues and funds available for distribution to stockholders.
Geographic Concentration
The Properties are located principally in the southeastern United States in
Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South
Carolina, Tennessee and Virginia. Twenty Malls, fourteen Associated Centers,
sixty-four Community Centers and the Office Building are located in these
states. The Company's results of operations and funds available for distribution
to stockholders therefore will be subject generally to economic conditions in
the southeastern United States. As of December 31, 1999, the Properties located
in the southeastern United States accounted for 62.9% of the Company's total
assets, and provided 66.5% of the Company's total revenues for the year ended
December 31, 1999.
Third Party Interests In Certain Properties
The Operating Partnership owns partial interests in seven Malls, five
Associated Centers, one Community Center, the Office Building and one Mall under
development. The Operating Partnership or an affiliate of the Company is the
managing general
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partner of the Property Partnerships that own such Properties, except for the
Governor's Square Mall and its Associated Center, Governor's Plaza, in which
affiliates of the Operating Partnership are non-managing general partners.
Where the Operating Partnership serves as managing general partner of
Property Partnerships, it may have certain fiduciary responsibilities to the
other partners in those partnerships. In certain cases, the approval or consent
of the other partners is required before the Operating Partnership may sell,
finance, expand or make other significant changes in the operations of such
Properties. To the extent such approvals or consents are required, the Operating
Partnership may experience difficulty in, or may be prevented from implementing
its plans with respect to expansion, development, financing or other similar
transactions with respect to such Properties.
With respect to Governor's Square and Governor's Plaza, the Operating
Partnership does not have day-to-day operational control or control over certain
major decisions, including the timing and amount of distributions and decisions
relating to sales, expansions and financings, which could result in decisions by
the managing general partner that do not fully reflect the interests of the
Company, including decisions relating to the standards that the Company is
required to satisfy in order to maintain its status as a real estate investment
trust for tax purposes.
Dependence on Significant Properties
Hamilton Place in Chattanooga, Tennessee and Burnsville Center in
Minneapolis (Burnsville), Minnesota accounted for approximately 5.4% and 5.2%,
respectively, of total revenues of the Company for the period ended December 31,
1999. The Company's financial position and results of operations will therefore
be disproportionately affected by the results experienced at these Properties.
Dependence on Key Tenants
As of December 31, 1999, The Limited Inc. Stores (including Intimate
Brands, Inc.) maintained 130 stores in Company properties and in the year ended
December 31, 1999 accounted for approximately 7.6% of total revenues of the
Company. As of December 31, 1999, the Venator Group, Inc. (Champs Sports,
Footlocker, Kinney Shoes, etc.) had 90 stores and in the year ended December 31,
1999, accounted for 2.1% of the total revenues of the Company. As of December
31, 1999, Food Lion served as an anchor tenant in 37 of the Community Centers
and for the year then ended accounted for approximately 2.7% of total revenues
of the Company. Food Lion is a publicly traded North Carolina- based operator of
supermarkets. The loss or bankruptcy of any of these or other key tenants could
negatively affect the Company's financial position and results of operations.
The Company's Strategy for Growth
Management believes that per share growth in the Company's Funds from
Operations, as defined below, is one of the key factors in enhancing shareholder
value. Management also believes that Funds from Operations is a widely used
measure of the operating performance of REITs, and its consistent determination
provides a relevant basis for comparison among REITs. It is the objective of the
Company's management to achieve growth in Funds from Operations through the
aggressive management of the Company's existing Properties, the expansion and
renovation of existing Properties, the development of new properties, and select
acquisitions. Funds from Operations can also be affected by external factors,
such as inflation, fluctuations in interest rates or changes in general economic
conditions, which are beyond the control of the Company's management.
"Funds from Operations" is defined by the Company as net income (loss)
before property depreciation, other non-cash items, gains or losses on sales of
real estate assets and gains or losses on investments in marketable securities.
The National Association of Real Estate Investment Trusts ("NAREIT") has amended
the definition of Funds from Operations so that the write-off of development
costs will no longer be added back in the calculation (to be effective beginning
January 2000). The Company will comply with the amended definition. The cost of
interest rate caps and finance costs on the Company's lines of credit are
amortized and included in interest expense and, therefore, reduces Funds from
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Operations. Funds from Operations also includes the Company's share of Funds
from Operations in unconsolidated properties and excludes minority interests'
share of Funds from Operations in consolidated properties. The Company excludes
outparcel sales from its Funds from Operations calculation, even though the
NAREIT definition allows their inclusion. Funds from Operations does not
represent cash flow from operations as defined by generally accepted accounting
principals ("GAAP") and is not necessarily indicative of cash available from
operations to fund all cash flow needs and should not be considered an
alternative to net income (loss) for purposes of evaluating the Company's
operating performance or to cash flows as a measure of liquidity.
The Company classifies its regional malls into two categories - stabilized
malls ("Stabilized Malls") which have completed their initial lease-up and new
malls ("New Malls") which are in their initial lease-up phase or are being
redeveloped. At year end the New Mall category was comprised of Springdale Mall
in Mobile, Alabama which was acquired in September 1997 and which is being
redeveloped and retenanted; Bonita Lakes Mall in Meridian, Mississippi which
opened in October 1997; Parkway Place Mall in Huntsville, Alabama which was
acquired in December, 1998 and which is being redeveloped and Arbor Place in
Atlanta (Douglasville), Georgia, which opened in October 1999.
Specifically, the Company has implemented its objective of growing its
Funds from Operations and will continue to do so by:
- - Maximizing the cash flow from its existing portfolio of Malls, Associated
Centers and Community Centers, and other retail complexes through
aggressive leasing, management, and marketing, including:
- an active leasing strategy which seeks to increase occupancy. At
December 31, 1999, the occupancy at the Stabilized Malls, New
Malls, Associated Centers, and Community Centers was 94.5%, 88.0%,
93.2%, and 97.7%, respectively, as compared to occupancies of
93.7%, 92.7%, 90.7%, and 97.0%, respectively, at December 31,
1998;
- expanded merchandising, marketing and promotional activities, with
the goal of enhancing tenant sales and thereby increasing
percentage rents. Mall store sales per square foot for the year
ended December 31, 1999 were 5.0% higher at the Stabilized Malls
than for the year ended December 31, 1998;
- increased base rents as tenant leases expire, renegotiation of
leases and negotiation of terminations of leases of under
performing retailers. At December 31, 1999 average base rents
per square foot at the Malls, Associated Centers, and Community
Centers was $20.68, $9.78, and $8.32, respectively, as compared
to average base rents per square foot of $19.82, $9.68, and
$8.22, respectively, at December 31, 1998;
- control of operating costs. Occupancy costs as a percentage of
sales at the Stabilized Malls remained relatively stable at 11.5%
(excluding acquisition malls from year of acquisition)for the year
ended December 31, 1999 as compared to 11.1% for the year ended
December 31, 1998.
- - Expanding and renovating existing properties to maintain their competitive
position.
- Most of the Malls were designed to allow for expansion and growth
through the addition of new department stores or other large
retail stores as anchors ("Anchors"). Twenty-four of the thirty
Malls have undergone expansion or renovation since their opening,
and all of the non-acquired Malls have been either built or
renovated in the last 10 years. Two of the Malls had available
Anchor pads at December 31, 1999. Twenty existing Anchors at
eleven Malls have expansion potential at their existing stores.
During 1999, the Company renovated College Square in Morristown,
Tennessee, Governor's Square in Clarksville,
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Tennessee and Rivergate Mall in Nashville, Tennessee and expanded
Lakeshore Mall in Sebring, Florida adding Sears as the fifth
department store.
- In the Community Center and Associated Center portfolios, the
Company renovated six Community Centers, began expansion of one
Community center and renovated two Associated Center in 1999. In
2000, the Company plans to renovate at least four Community
Centers.
- - Developing new retail properties with profitable returns on capital,
leading to growth in the future.
- During 1999, the Company began the expansion of Asheville Mall
in Asheville, North Carolina and plans to renovate it in 2000.
- In 1999, the Company opened one Mall, one Associated Center, three
Community Centers and one expansion center. Summary information
concerning these properties is set forth below.
Summary Information Concerning Properties
Opened During the Year Ended December 31, 1999
Anchor Non-
Name of Center/ Total GLA Anchor Percentage Opening
Location GLA(1) (2) GLA Leased(3) Date Anchors
- ----------------------------- ---------- -------- -------- ---------- ------------ --------------------
Malls
- -----
Arbor Place Mall............ 1,035,000 655,000 380,000 88% Oct-1999 Dillard's, Parisian(6),
Atlanta (Douglasville), GA Sears(6), Bed Bath &
Body, Border's
Books, Old Navy,
Upton's(4)
Mall Expansion
- --------------
Lakeshore Mall.............. 92,000 92,000 0 100% Jul-1999 Sears (6)
(Sears Addition)
Sebring, FL
Associated Centers
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The Landing at Arbor Place.. 163,000 102,000 61,000 69% July-1999 Toys' "R" Us(6),
Atlanta (Douglasville), GA Circuit City(6),
Michael's
Community Centers
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Fiddlers Run(5)............. 203,000 166,000 37,000 99% Apr-1999 Belk, JCPenney,
Morganton, NC Goody's, Food Lion
Sand Lake Corners........... 558,000 496,000 62,000 97% Jul-1999 Lowe's (6), Bealls,
Orlando, FL Wal*Mart(6)
Regal Cinema(7)............. 83,000 83,000 0 100% Nov-1999 Regal Cinema
Jacksonville, FL
---------- -------- --------
Total Properties Opened.... 2,134,000 1,594,000 540,000
========== ======== ========
( 1) Gross Leasable Area ("GLA") includes total square footage of Anchors
(whether owned or leased by the Anchor) and Mall stores or shops.
( 2) Includes total square footage of Anchors (whether owned or leased by the
Anchor)
( 3) Percentage leased and committed for Malls does not include Anchor GLA.
For the Community Centers, Associated Centers and power centers, percentage
leased and committed includes non-Anchor GLA and leased Anchor GLA.
( 4) Store is vacant but they continue to meet their financial obligation.
Subsequent to December 31, 1999, Dekor, Inc. assumed the lease and will
open for business in late 2000 or early 2001.
( 5) Sold by the Company in February 2000.
( 6) Owned by Anchor.
( 7) Sold by the Company in July 1999.
-10-
- The Company currently has one Mall, one Mall expansion, one
Associated Center, one Community Center expansion and
three Community Centers under construction. These
properties will add approximately 2,200,000 square feet to
the Company's portfolio at opening and are all scheduled to
open during 1999.
Summary Information Concerning Construction Properties
As of March 18, 2000
Ownership
by Company Percentage
Anchor Non- and Pre-Leased
Name of Center/ Total GLA Anchor Operating and Projected
Location GLA(1) (2) GLA Partnership Committed(3) Opening Anchors
- ------------------------ -------- -------- -------- ----------- ------------- ------------ -------------
Malls
- -----
The Lakes Mall.......... 610,000 398,000 212,000 90% 23% Aug-2001 Sears(4),
Muskegon, MI Younkers(4),
JCPenney(4)
Expansions
- ----------
Asheville Mall......... 171,000 84,000 87,000 100% 60% Nov-2000 Dillard's(4)
Asheville, NC Belk's(4)
Sand Lake Corners....... 38,000 24,000 14,000 100% 71% May-2000 Staples
Orlando, FL
Sutton Plaza(5)......... 28,000 28,000 0 100% N/A Feb-2000 A & P Food
Mt. Olive, NJ Market
Associated Centers
- ------------------
Gunbarrel Pointe........ 282,000 257,000 25,000 100% 91% Oct-2000 Target(4),
Chattanooga, TN Goody's,
Kohl's
Community Centers
- -----------------
Chesterfield Crossing(6) 435,000 394,000 41,000 100% 73% Aug-2000 Home Depot(4),
Richmond, VA Wal*Mart(4)
Coastal Way............. 233,000 199,000 34,000 100% 55% Aug-2000 Belk, Sears(4)
Spring Hill, FL
Creekwood Crossing...... 381,000 324,000 57,000 100% 75% Apr-2001 Lowe's (4),
Bradenton, FL Kmart, Bealls
-------- -------- --------
Total Construction
Properties............. 2,183,000 1,710,000 473,000
======== ========= ========
( 1)Includes total square footage of Anchors (whether owned or leased by
the Anchor).
( 2)Includes total square footage of Anchors (whether owned or leased by the
Anchor).
( 3)Percentage leased and committed for Malls does not include Anchor GLA.
For the Community Centers, Associated Centers and power centers,
percentage leased and committed includes non-Anchor GLA and leased Anchor
GLA.
( 4)Owned by Tenant.
( 5)The Company opened the expansion in February, 2000.
( 6)Wal*Mart opened in February 2000 and Home Depot will open in May 2000.
-11-
- In addition to the Construction Properties as of March 18, 2000,
the Company was pursuing the development of a number of sites
which the Company believes are viable for future development as
malls and community and neighborhood shopping centers. Regional
mall development sites were being pursued in Georgia, Mississippi
and South Carolina and a redevelopment of Parkway Place in
Huntsville, Alabama and Community shopping center sites were being
pursued in Georgia, Florida, Massachusetts, Pennsylvania and
Virginia.
- In general, the Company seeks out development opportunities in
middle-market trade areas that it believes are under-serviced by
existing retail facilities, have demonstrated improving demographic
trends or otherwise afford an opportunity for effective market
penetration and competitive presence.
- - Acquiring existing retail properties where cash flow can be enhanced by
improved management, leasing, redevelopment and expansion.
- Management believes that an opportunity for growth exists through
the acquisition of shopping centers that meet the Company's
investment criteria and targeted returns. In general, the Company
seeks to acquire well-located shopping centers in middle-market
geographic areas consistent with management's experience where
management believes significant value can be created through its
development, leasing and management expertise.
- In July 1999, the Company acquired York Galleria in York,
Pennsylvania. The purchase price was funded from a mortgage loan in
the amount of $51.1 million and in part from $30 million in
proceeds from the Company's dispositions of two department stores
and two free-standing community centers.
Risks Associated with the Company's Growth Strategy
In connection with the implementation of this growth strategy, the Company
and the Operating Partnership will incur various risks including the risk that
development or expansion opportunities explored by the Company and the Operating
Partnership may be abandoned; the risk that construction costs of a project may
exceed original estimates, possibly making the project not profitable; the risk
that the Company and the Operating Partnership may not be able to refinance
construction loans which are generally with full recourse to the Company and the
Operating Partnership; the risk that occupancy rates and rents at a completed
project will not meet projections, and will therefore be insufficient to make
the project profitable; and the need for anchor, mortgage lender and property
partner approvals for certain expansion activities. In the event of an
unsuccessful development project, the Company's and the Operating Partnership's
loss could exceed its investment in the project.
The Company has in the past elected not to proceed with certain development
projects and anticipates that it will do so again from time to time in the
future. If the Company elects not to proceed with a development opportunity, the
development costs associated therewith ordinarily will be charged against income
for the then-current period. Any such charge could have a material adverse
effect on the Company's results of operations for the period in which the charge
is taken.
-12-
Competition
There are numerous shopping facilities that compete with the Properties in
attracting retailers to lease space. The Malls are generally located in
middle-markets. Management believes that the Malls have strong competitive
positions because they generally are the only or largest enclosed malls within
their respective trade areas. In addition, retailers at the Properties face
continued competition from discount shopping centers, outlet malls, wholesale
clubs, direct mail, telemarketing, television shopping networks and shopping via
the Internet. Competition could adversely affect the Operating Partnership's
revenues and funds available for distributions to partners, which in turn will
affect the Company's revenues and funds available for distribution to
stockholders.
Seasonality
The Company's business is somewhat seasonal in nature with tenant sales
achieving the highest levels during the fourth quarter because of the holiday
season. The Malls earn most of their "temporary" rents (rents from short- term
tenants) during the holiday period. Thus, occupancy levels and revenue
production are generally the highest in the fourth quarter of each year. Results
of operations realized in any one quarter may not be indicative of the results
likely to be experienced over the course of the entire year.
Qualification as a Real Estate Investment Trust
The Company has elected to be taxed as real estate investment trust under
the Code, commencing with its taxable year ended December 31, 1993, and will
seek to maintain such status. As a qualified real estate investment trust, the
Company generally will not be subject to Federal income tax to the extent it
distributes at least 95% of its current year real estate investment trust
taxable income to its shareholders. Beginning on January 1, 2001 (the Company's
first taxable year beginning after December 31, 2000), this percentage is
reduced to 90%. If the Company fails to qualify as a real estate investment
trust in any taxable year, the Company will be subject to Federal income tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates.
Insurance
The Operating Partnership carries comprehensive liability, fire, extended
coverage and rental loss insurance covering all the Properties, with policy
specifications and insured limits customarily carried for similar properties.
Management believes that the Properties are adequately insured in accordance
with industry standards.
ITEM 2. PROPERTIES.
Malls
Each of the Malls is an enclosed regional shopping complex. Each Mall
generally has at least three Anchors which own or lease their stores and
numerous non-anchor stores with GLA less than 30,000 square feet ("Mall
Stores"), most of which are national or regional retailers, located along
enclosed malls connecting the Anchors. At most of the Malls, additional
freestanding restaurants and retail stores are located on the periphery of the
Mall complex. These freestanding stores are, in most cases, owned by their
occupants. Thirteen of the Mall complexes include one or more Associated
Centers.
The total GLA of the 30 Malls is approximately 22.4 million square feet or
an average GLA of approximately 748,000 square feet per Mall. Mall Store GLA is
7,932,000 square feet including leased free-standing buildings at December 31,
1999. The Company wholly owns all but seven of its Malls and manages all but one
of them.
-13-
In the years ended December 31, 1997, 1998 and 1999, Mall revenues
represented approximately 72.9%, 74.9% and 76.9%, respectively, of total
revenues from the Company's Properties.
Occupancy of mall stores in the Stabilized Malls ("Stabilized Mall Stores")
increased from 93.6% at December 31, 1998, to 94.5% at December 31, 1999.
In the years ended December 31, 1997, 1998 and 1999, average Stabilized
Mall Store sales per square foot were approximately $263, $272 and $285,
respectively (computed using a monthly weighted average). Average Stabilized
Mall Store sales per square foot increased by 5.0% for the year ended December
31, 1999 as compared to the year ended December 31, 1998.
Average base rent per square foot at the Mall Stores increased from $19.82
at December 31, 1998 to $20.68 at December 31, 1999.
Occupancy costs as a percentage of sales for tenants in the Stabilized
Malls (excluding acquisition malls from the year of acquisition) were 11.2%,
11.1% and 11.5% for the years ended December 31, 1997, 1998, and 1999,
respectively.
The Malls are generally located in middle-markets. Management believes that
the Malls have strong competitive positions because they generally are the only,
or the dominant enclosed malls within their respective trade areas. Trade areas
have been identified by management based upon a number of sources of
information, including the location of other malls, publicly available
population information, customer surveys, surveys of customer automobile license
plates, as well as ZIP codes and third-party market studies.
The two largest revenue-producing Malls are Hamilton Place and Burnsville
Center. Hamilton Place is located on a 187-acre site in Chattanooga, Tennessee
and represented, as of December 31, 1999, 3.4% of the Properties' total GLA,
3.6% of total Mall Store GLA and 5.4% of total revenues from the Company's
Properties. Burnsville Center is located in the Suburbs of Minneapolis,
Minnesota in Burnsville and represented, as of December 31, 1999, 3.1% of the
Properties' total GLA, 3.9% of total Mall Store GLA and 5.2% of total revenues
from the Company's Properties.
Twenty-four of the thirty Malls have undergone an expansion or remodeling
since their opening, and all but four of the Malls have either been built,
renovated or expanded in the last 10 years one of which, Parkway Place in
Huntsville, Alabama is scheduled for demolition and redevelopment. In 1999, the
Company renovated Governor's Square in Clarksville, Tennessee, College Square in
Morristown, Tennessee and Rivergate Mall in Nashville, Tennessee. The Company
expanded Lakeshore Mall in Sebring, Florida, adding Sears as the fifth
department store. The Company is expanding Asheville Mall in Asheville, North
Carolina and plans on renovating it in 2000. Three of the Malls have available
Anchor pads providing expansion potential totaling approximately 405,700
buildable square feet at December 31, 1999. Twenty existing Anchors at eleven
Malls have aggregate expansion potential at their existing stores of
approximately 473,000 buildable square feet.
The land underlying the Malls is owned in fee simple in all cases, except
for Walnut Square, WestGate Mall, St. Clair Square, Bonita Lakes Mall, Meridian
Mall and Stroud Mall which are each subject to long-term ground leases for all
or a portion of the land underlying these Malls.
The table on the following page sets forth certain information for each of
the Malls as of December 31, 1999.
-14-
Mall
Year Ownership by Total Store Percentage Fee
Most Company and Mall Sales per Mall Store Simple or
Year of Recent Operating Total Store Square GLA Anchor Ground
Name of Mall/Location Opening Expansion Partnership GLA(1) GLA(2) Foot(3) Leased(4) Anchors Vacancies Lease
- --------------------- ------- --------- ------------ --------- --------- --------- --------- ------------------ --------- -------
New Malls
Arbor Place.......(5) 1999 N/A 100% 1,035,320 380,000 N/A 88% Dillard's, Parisian, Upton's Fee
Atlanta Sears, Upton's(9)
(Douglasville),GA
Bonita Lakes Mall.(5) 1997 N/A 100% 641,047 192,620 $253 100% Goody's, Dillard's, None Ground
Meridian, MS JCPenney, Sears, Lease(6)
McRae's
Parkway City Mall.(5) 1957/ 1957 50% 414,540 187,825 207 92% McRae's, Parisian None Fee
Huntsville, AL 1998
Springdale Mall...... 1960/ 1998 100% 954,237 354,301 215 72% Dillard's, None Fee
Mobile, AL 1997 --------- -------- ---- Burlington Coat,
McRae's, Goody's
Total New Malls....... 3,045,144 1,114,746 88%
========= ========= ====
Stabilized Malls
Asheville Mall....... 1972/ 1994 100% 816,755 253,420 $321 100% Dillard's, Montgomery None Fee
Asheville, NC 1998 Ward, JCPenney, Sears,
Belk
Burnsville Center.... 1977/ N/A 100% 1,069,887 408,844 301 97% Mervyn's, Dayton's, None Fee
Burnsville, MN 1998 JCPenney, Sears
College Square....(5) 1988 1993 100% 459,473 156,604 228 95% JCPenney, Sears, None Fee
Morristown, TN Wal*MArt, Goody's,
CoolSprings Proffitt's
Galleria.......(5) 1991 1994 100% 1,129,764 374,749 337 98% Proffitt's, Dillard's, None Fee
Nashville, TN Sears, JCPenney,
Parisian
Foothills Mall....(5) 1983/ 1997 95% 476,768 180,072 194 95% Sears, JCPenney, None Fee
Maryville, TN 1996 Goody's, Proffitt's I,
Proffitt's II
Frontier Mall.....(5) 1981 1997 100% 523,004 205,717 210 94% Dillard's I, JCPenney, None Fee
Cheyenne, WY Dillard's II, Sears
Georgia Square....(5) 1981 N/A 100% 677,906 256,352 247 93% Belk, JCPenney, None Fee
Athens, GA Rich's, Sears
Governor's Square.(5) 1986 1999 48% 690,437 269,966 269 94% JCPenney, Parks-Belk, None Fee
Clarksville, TN Sears, Dillard's,
Goody's
Hamilton Place....(5) 1987 1998 90% 1,166,060 375,128 362 97% Dillard's, Parisian, None Fee
Chattanooga, TN Proffitt's I, Sears,
Proffitt's II,
JCPenney
Hickory Hollow Mall.. 1978/ 1991 100% 1,125,946 455,757 266 88% JCPenney, Sears, None Fee
Nashville, TN 1998 Proffitt's,Dillard's,
Janesville Mall...... 1973/ 1998 100% 609,364 161,535 305 78% JCPenney, Kohl's, None Fee
Janesville, WS 1998 Boston Store, Sears
Lakeshore Mall....(5) 1992 1999 100% 500,890 153,062 208 86% Kmart, Belk-Lindsey, None Fee
Sebring, FL Sears, JCPenney,
Beall's (10)
Madison Square....(5) 1984 1985 50% 934,161 301,326 313 96% Dillard's, JCPenney, None Fee
Huntsville, AL McRae's, Parisian,
Sears
Meridian Mall........ 1969/ 1987 100% 794,461 463,292 314 98% JCPenney, Mervyn's, None(15) Fee/
Lansing, MI 1998 Dayton Hudson, Ground
Jacobson's(15) Lease(8)
Oak Hollow Mall...(5) 1995 N/A 75% 802,239 251,411 227 94% Goody's, Sears, None Fee
High Point, NC JCPenney Belk-Beck,
Dillard's
-15-
Mall
Year Ownership by Total Store Percentage Fee
Most Company and Mall Sales per Mall Store Simple or
Year of Recent Operating Total Store Square GLA Anchor Ground
Name of Mall/Location Opening Expansion Partnership GLA(1) GLA(2) Foot(3) Leased(4) Anchors Vacancies Lease
- --------------------- ------- --------- ------------ --------- --------- --------- --------- ------------------ --------- -------
College Square....(5) 1988 1993 100% 459,473 156,604 228 95% JCPenney, Sears, None Fee
Morristown, TN Proffitt's, Wal*Mart
Pemberton Square..(5) 1985 1999 100% 351,920 133,685 167 84% JCPenney, McRae's, None Fee
Vicksburg, MS Dillard's, Goody's
Plaza del Sol Mall(5) 1979 1996 51% 261,507 105,326 177 100% Beall Bros(10), None Fee
Del Rio, TX Kmart, JCPenney
Post Oak Mall.....(5) 1982 1985 100% 776,823 318,166 248 94% Beall Bros.(10), Sears None Fee
College Station, TX Foley's, Dillard's I,
JCPenney, Dillard's II
Rivergate Mall....... 1971/ 1998 100% 1,073,970 390,324 306 92% Sears, Dillard's, None Fee
Nashville, TN 1998 JCPenney, Proffitt's
St. Clair Square..... 1974/ 1993 100% 1,044,502 315,559 355 100% Famous Barr, Sears, None Fee/
Fairview Heights, IL 1996 JCPenney, Dillard's Ground
Lease(11)
Stroud Mall.......... 1977/ 1994 100% 427,194 177,011 313 98% JCPenney, Sears, None Ground
Stroudsburg, PA 1998 The Bon-Ton Lease(12)
Turtle Creek Mall.(5) 1994 1995 100% 846,234 223,140 302 100% JCPenney, Sears, None Fee
Hattiesburg, MS McRae's I, Goody's,
McRae's II, Dillard's
Twin Peaks Mall...(5) 1985 1997 100% 556,153 242,683 244 88% JCPenney, Dillard's I, None Fee
Longmont, CO Dillard's II, Sears
Walnut Square.....(5) 1980 1992 100% 450,385 171,192 214 99% Belk, JCPenney, Sears None Ground
Dalton, GA R=Proffitt's, Goody's Lease(13)
WestGate Mall........ 1975/ 1996 100% 1,100,513 320,600 290 96% Belk-Hudson, JCPenney, Upton's Fee/
Spartanburg, SC 1995 Dillard's, Sears, Ground
Upton's(14),Proffitt's Lease(7)
York Galleria........ 1998/ N/A 100% 766,972 229,755 279 93% Boscov's, JCPenney, None Fee
York, PA 1999 Sears, The Bon-Ton
---------- ------- --- --
Total Stabilized Malls.. .................... 19,433,287 6,894,674 $285 94%
========== ========= ==== ==
-16-
( 1) Includes the total square footage of the Anchors (whether owned or
leased by the Anchor) and Mall Stores. Does not include future expansion
areas.
( 2) Does not include Anchors.
( 3) Totals represent weighted averages.
( 4) Includes tenants paying rent for executed leases as of December 31, 1999.
( 5) Developed by the Company.
( 6) Company is the lessee under a ground lease for 82 acres which extends
through June 30, 2035. The average annual base rent is $37.656 increasing
by 6% per year.
( 7) The Company is the lessee under several ground leases for approximately
53% of the underlying land. The leases extend through October 31, 2084,
including six ten-year renewal options. Rental amount is $130,000 per year.
In addition to base rent, the landlord receives 20% of the percentage rents
collected. The Company has a right of first refusal to purchase the fee.
( 8) The Company is the lessee under several ground leases in effect through
March 2067 with extension options. Fixed rent is $18,700 per year and 3% to
4% of all rents.
( 9) Upton's is vacant as of December 31, 1999, but continues to meet their
financial obligations. As of the date of this report Dekor has assumed the
lease obligation and will open in late 2000 or early 2001.
(10) Beall Bros. operating in Texas is unrelated to Beall's operating in
Florida.
(11) The Company is the lessee under a ground lease for 20 acres which extends
through January 31, 2073, including 14 five-year renewal options and one
four-year renewal option. Rental amount is $40,000 per year. In addition to
base rent, the landlord receives .25% of Dillard's sales in excess of
$16,200,000.
(12) The Company is the lessee under a ground lease which extends through July
2089. The current rental amount is $50,000 with an additional $100,000 paid
every 10 years.
(13) The Company is the lessee under several ground leases which extend through
March 14, 2078, including six ten-year renewal options and one eight-year
renewal option. Rental amount is $149,450 per year. In addition to base
rent, the landlord receives 20% of the percentage rents collected. The
Company has a right of first refusal to purchase the fee.
(14) Upton's is vacant but continues to meet their financial obligation.
(15) There is a vacant former Service Merchandise which the Company purchased
and leased to Jacobson's and which will open in late 2000.
Anchors. Anchors are a critical factor in a Mall's success because the
public's identification with a property typically focuses on its Anchors. Mall
Anchors generally are department stores whose merchandise appeals to a broad
range of shoppers. Although the Malls derive a smaller percentage of their
operating income from Anchor stores than from Mall Stores, strong Anchors play
an important part in generating customer traffic and making the Malls desirable
locations for Mall Store tenants.
Anchors either own their stores together with the land under them,
sometimes with adjacent parking areas, or enter into long-term leases with
respect to their stores at rental rates that are significantly lower than the
rents charged to tenants of Mall Stores. Anchors account for approximately 7.5%
of the total revenues from the Company's Properties. Each Anchor which owns its
own store has entered into a reciprocal easement agreement with the Company
covering, among other things, operating covenants, reciprocal easements,
property operations, initial construction and future expansions.
During 1999, the Company sold three leased department stores at Pemberton
Square in Vicksburg, Mississippi, Hamilton Place Mall in Chattanooga, Tennessee
and Asheville Mall in Ashville, North Carolina.
The Malls have a total of 133 Anchors. Upton's at Arbor Place in
Atlanta(Douglasville), Georgia and WestGate Mall in Spartanburg, South Carolina
are vacant. The following table indicates all Mall Anchors and sets forth the
aggregate number of squareFeet owned or leased by Anchors in the Malls as of
December 31, 1999.
-17-
Mall Anchor Summary Information
As of December 31, 1999
GLA GLA Total
Number Owned Leased Occupied
of Anchor by by by
Name Store Anchor Anchor Anchor(1)
- --------------------------- ---------- ------------ ------------ ----------
JCPenney.................... 27 1,015,865 1,586,868 2,602,733
Sears....................... 25 1,806,455 1,166,093 2,972,548
Dillard's................... 21 2,598,259 285,204 2,883,463
Sak's
Proffitt's.............. 10 1,203,750 0 1,203,750
McRae's................. 7 511,359 243,000 754,359
Parisian................ 5 351,756 209,541 561,297
---------- ------------ ------------ ----------
Subtotal............ 22 2,066,865 452,541 2,519,406
Belk
Belk.................... 4 0 426,991 426,991
Belk-Lindsey............ 1 0 61,029 61,029
Belk-Hudson............. 1 0 156,648 156,648
Parks-Belk.............. 1 0 122,367 122,367
---------- ------------ ------------ ----------
Subtotal............ 7 0 767,035 767,035
The May Company
Foley's................. 1 103,888 0 103,888
Famous Barr............. 1 0 236,489 236,489
---------- ------------ ------------ ----------
Subtotal............ 2 103,888 236,489 340,377
Goody's..................... 9 0 292,749 292,749
Montgomery Ward............. 1 0 92,484 92,484
Dayton-Hudson............... 2 323,326 0 323,326
The Bon Ton ................ 2 131,915 87,024 218,939
Wal*Mart.................... 1 0 112,541 112,541
Kmart....................... 2 0 173,940 173,940
Mervyn's.................... 2 124,919 74,889 199,808
Boscov's.................... 1 150,000 0 150,000
Burlington Coat............. 1 0 153,345 153,345
Rich's...................... 1 115,623 0 115,623
Boston Store................ 1 0 96,000 96,000
Kohl's...................... 1 0 88,691 88,691
Upton's..................... 2 0 149,993 149,993
Beall Bros. (Texas)......... 2 0 61,916 61,916
Beall's (Florida)........... 1 0 45,844 45,844
---------- ------------ ------------ ----------
Total............... 133 8,437,115 5,923,646 14,360,761
========== ============ ============ ==========
(1) Includes all square footage owned by or leased to such Anchor including
tire, battery and automotive facilities and storage square footage.
Mall Stores. The Malls have approximately 4,465 Mall Stores. National or
regional chains (excluding individually franchised stores) lease approximately
84% of the occupied Mall Store GLA. Although Mall Stores occupy only 35.3% of
total Mall GLA, the Malls derived approximately 86.9% of their revenue from Mall
Stores for the year ended December 31, 1999.
Among the companies with the largest representation among Mall Stores are:
The Limited, Inc./Intimate Brands, Inc. stores (The Limited, Limited Too,
Express, Lerner New York, Lane Bryant, Structure, Victoria Secret, and Bath and
Body Works) and Venator Group, Inc. (Footlocker, Lady Footlocker, Kinney Shoes
and Champs Sports Stores). As of December 31, 1999, The Limited, Inc.'s and
Intimate Brands, Inc.'s 130 stores accounted for 8.5% of total mall leased GLA
and 7.6% of total revenues from the Company's Properties. As of December 31,
1999 Venator Group, Inc. accounted for 2.6% of total mall leased GLA and 2.1% of
total revenues. No single Mall Store retailer accounted for more than 8.5% of
-18-
total leased GLA and no single Mall Store retailer accounted for more than 7.6%
of total revenues from the Company's Properties.
The following table sets forth certain information for executed renewal
leases with current tenants or leases of previously occupied space with new
tenants at the Malls during the year ended December 31, 1999.
Prior Lease New Lease Increase Increase
Total Base and Initial Year per New Lease per
Number Square Percentage Rent Base Rent Square Average Square
of Leases Feet per Square Foot per Square Foot Foot Base Rent Foot
------------ ------------ ---------------- --------------- ------------ ----------- ------------
341 737,809 $21.56 $24.23 $2.67 $24.91 $3.35
The following table sets forth the total Mall Store GLA, the total square
footage of leased Mall Store GLA, the percentage of Mall Store GLA leased, the
average base rent per square foot of Mall Store GLA and average Mall Store sales
per square foot as of the end of each of the past five years.
Stabilized Mall Store Summary Information
Total Percentage Average Average Mall
Total Mall Store of Mall Store Base Rent Store Sales
At Mall Store Leased GLA per Square per Square
December 31, GLA GLA Leased(1) Foot(2) Foot(3)
- --------------------- ------------ ----------- ------------- ----------- -------------
1995................ 3,003,334 2,697,969 89.8% $18.28 $237
1996................ 3,452,997 3,073,190 89.0 19.03 240
1997................ 3,503,490 3,214,176 91.7 18.98 263
1998................. 7,166,498 6,707,283 93.6 19.82 273
1999................. 7,429,503 6,956,451 93.6 20.68 285
(1) Mall Store occupancy includes tenants with executed leases who are paying
rent.
(2) Average base rent per square foot is based on Mall Store GLA occupied as of
the last day of the indicated period for the preceding twelve-month period.
(3) Calculated for the preceding twelve-month period.
Lease Expirations. The following table shows the scheduled lease
expirations for the Malls (assuming that none of the tenants exercise renewal
options) for the year ending December 31, 2000 and for the next nine years for
the Mall Stores.
Mall Lease Expiration
Percentage of Total
Approximate Represented by
Mall Store Expiring Leases
Number of Annualized Base GLA of Base Rent ------------------------------
Year Ending Leases Rent of Expiring Expiring Per Square Annualized Leased Mall
December 31, Expiring Leaes(1) Leases Foot Base Rent Store GLA
- --------------------- -------------- ---------------- ------------- ----------- ----------- ------------
2000................ 395 13,390,575 771,830 $ 20.03 9.5% 11.2%
2001................ 282 11,025,136 520,190 21.19 7.7 7.4
2002................ 304 14,035,435 649,549 21.61 9.8 9.3
2003................ 277 13,663,114 718,930 19.00 9.5 10.2
2004................ 314 16,233,476 701,897 23.13 11.3 10.0
2005................ 278 17,646,670 815,759 21.63 12.3 11.6
2006................ 172 9,377,742 429,598 21.83 6.6 6.1
2007................ 162 12,159,290 575,606 21.12 8.5 8.2
2008................ 177 12,045,150 558,537 21.57 8.4 8.0
2009................ 183 11,588,122 469,144 24.70 8.1 6.7
-19-
(1) Total annualized base rent for all leases executed as of December 31, 1999
includes rent for space that is leased but not yet occupied but excludes
(i) percentage rents, (ii) additional payments by tenants for common area
maintenance, real estate taxes and other expense reimbursements and (iii)
contractual rent escalations and cost of living increases due after
December 31, 1999.
Cost of Occupancy. Management believes that in order to maximize the
Company's Funds from Operations, tenants in Mall Stores must be able to operate
profitably. A major factor contributing to tenant profitability is the tenant's
cost of occupancy.
The following table summarizes for Stabilized Mall Store tenants the
occupancy costs under their leases as a percentage of total Mall Store sales for
the last three years.
FOR THE YEAR ENDED
DECEMBER 31, (1)
--------------------------
1997 1998 1999
------ -------- --------
Mall Store sales $666.5 $1,105.5 $1,426.3
(in millions)(2) ====== ======== ========
Minimum rents 7.7% 7.7% 7.8%
Percentage rents 0.4 0.3 0.4
Expense recoveries (3) 3.1 3.1 3.3
------ -------- --------
Mall tenant occupancy costs 11.2% 11.1% 11.5%
====== ======== ========
(1) Excludes Malls not owned or open for full reporting period.
(2) Consistent with industry practice, sales are based on reports by retailers
(excluding theaters) leasing Mall Store GLA and occupying space for the
reporting period. Represents 100% of sales for these Malls. In certain
cases, the Company and the Operating Partnership will own less than 100%
interest in these Malls.
(3) Represents real estate tax and common area maintenance charges.
At December 31, 1999, the Company had investments in four malls in joint
ventures with third parties, all of which are reflected using the equity method
of accounting. Condensed combined results of operations for the four
unconsolidated affiliates are presented in the following table (in thousands).
Company's Share
Total for the Year for the Year
Ended Ended
December 31, December 31,
------------------- -------------------
1999 1998 1999 1998
------- -------- -------- --------
Revenues $26,859 $21,863 $13,227 $10,752
Depreciation & Amortization 3,253 2,836 1,619 1,390
Interest Expense 8,756 7,935 4,303 3,899
Other Operating Expenses 8,399 6,745 4,042 3,337
------- -------- -------- --------
Net Income 6,451 4,347 3,263 2,126
======= ======== ======== ========
Associated Centers
The fiftteen Associated Centers are each part of a Mall complex and
generally have one or two Anchor tenants and various smaller tenants. Anchor
tenants in these centers include such retailers as Books-A-Million, Target, Toys
"R" Us, TJ Maxx, and Goody's, which are category dominant retailers that benefit
from the regional draw of the Malls. The Associated Centers also increase the
draw to the total Mall complex.
-20-
Total leasable GLA of the fifteen Associated Centers is approximately 2.3
million square feet, including Anchors, or an average of approximately 150,000
square feet per center. As of December 31, 1999, 93.2% of total leasable GLA at
the Associated Centers was occupied.
In the years ended December 31, 1997, 1998, and 1999, revenues from the
Associated Centers represented approximately 3.8%, 3.9% and 3.7%, respectively,
of total revenues from the Company's Properties.
In the years ended December 31, 1997, 1998 and 1999, average tenant sales
per square foot at the Associated Centers were approximately $189, $172 and
$184, respectively.
Average base rent per square foot at the Associated Centers increased from
$9.68 at December 31, 1998 to $9.78 at December 31, 1999.
Each of the Associated Centers was developed by the Company, except for
WestGate Crossing, Village at Rivergate and Courtyard at Hickory Hollow which
were acquired in August 1997, July 1998 and July 1998, respectively. All of the
land underlying the Associated Centers is owned in fee simple except for
Bonita Crossing.
Lease Expirations. The following table shows for the Associated Centers
(assuming that none of the tenants exercise renewal options) the scheduled lease
expirations for the year ending December 31, 2000 and for the next nine years.
ASSOCIATED CENTER LEASE EXPIRATION
Percentage of Total
Approximate Base Represented by
Mall Store Rent Expiring Leases
Number of Annualized Base GLA of per --------------------------
Leases Rent of Expiring Expiring Square Annualized Leased Mall
December 31, Expiring Leases(1) Leases Foot Base Rent Store GLA
- -------------- --------- ---------------- ------------- ---------- ------------ -----------
2000........... 23 $ 714,782 59,167 $12.08 7.77% 7.31%
2001........... 17 635,901 66,556 9.55 6.91 8.22
2002........... 18 776,354 58,714 13.22 8.44 7.25
2003........... 17 953,153 100,760 9.46 10.36 12.45
2004........... 17 1,002,859 121,592 8.25 10.90 15.02
2005........... 7 807,104 94,083 8.58 8.77 11.62
2006........... 4 275,091 21,386 12.86 2.99 2.64
2007........... 4 536,315 41,396 12.96 5.83 5.11
2008........... 2 224,500 14,000 16.04 2.44 1.73
2009........... 9 1,140,881 75,347 15.14 12.40 9.31
(1) Total annualized base rent for all leases executed as of December 31, 1999
includes 12 months of rent for space that is newly leased but not yet
occupied and base rent on ground leases with no square footage but excludes
(i) percentage rents, (ii) additional payments by tenants for common area
maintenance, real estate taxes and other expense reimbursements and (iii)
contractual rent escalations and cost of living increases due after
December 31, 1999.
-21-
The following table sets forth certain information for executed renewal
leases with current tenants or leases of previously occupied space with new
tenants at the Associated Centers during the year ended December 31, 1999.
Prior Lease New Lease Increase Increase
Total Base and Initial Year per New Lease per
Number Square Percentage Rent Base Rent Square Average Square
of Leases Feet per Square Foot per Square Foot Foot Base Rent Foot
- ----------- ------------ ---------------- --------------- ------------ ----------- ------------
31 94,171 $10.35 $11.10 $0.75 $11.28 $0.93
The following table sets forth certain information for each of the
Associated Centers as of December 31, 1999.
Ownership
Year of by Company
Name of Opening/Most and Total Percentage
Associated Recent Operating Total Leasable GLA
Center/Location Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors
- ---------------------- -------------- --------------- --------- ------------ -------------- --------------------
Bonita Crossing......(10) 1997/1999 100% 122,150 122,150 100% Books-A-Million,
Meridian, MS TJ Maxx, Office Max
CoolSprings Crossing..... 1992 100% 353,369 53,286 100% Target(7),
Nashville, TN Service Merchandise,
Toys "R" Us,
Uptons(7),
Carmike Cinemas,
Lifeway Books
Courtyard at Hickory
Hollow ................. 1979(9) 100% 77,460 77,460 100% Carmike Cinemas,
Nashville, TN Just For Feet
Foothills Plaza.......... 1983/1986 100% 191,216(4) 71,216 51% Eckerd(6),
Maryville, TN Carmike Cinemas
Frontier Square.......... 1985 100% 161,615 16,615 100% Buttrey Food & Drug,
Cheyenne, WY Target
Georgia Square Plaza..... 1984 100% 15,393 15,393 100% Carmike Cinema
Athens, GA
Governor's Square Plaza.. 1985(5) 49% 180,018 57,820 100% Office Max, Premier
Clarksville, TN Medical Group, Target
Hamilton Corner.......... 1990 90% 88,298 88,298 99% Michael's, Goody's,
Chattanooga, TN Fresh Market
Hamilton Crossing........ 1987/1994 92% 185,370 92,257 98% Service Merchandise(7),
Chattanooga, TN Toys "R" Us, TJ
Maxx, Lifeway Books
The Landing.............. 1999 100% 163,164 85,507 93% Toys "R" Us, Circuit
Atlanta(Douglasville),GA City, Michael's
Madison Plaza............ 1984 75% 153,085 98,690 98% Food World, TJ Maxx,
Huntsville, AL Service Merchandise
Pemberton Plaza.......... 1986 100% 77,998 26,947 96% Kroger
Vicksburg, MS
The Terrace.............. 1997 92% 155,987 116,715 100% Barnes & Noble,
Chattanooga, TN Home
Place, Old Navy,
Staples, Circuit City
Village at Rivergate..... 1981(9) 100% 166,366 166,366 100% Target, Just For Feet
Nashville, TN
WestGate Crossing........ 1985/1999(8) 100% 151,489 151,489 85% Goody's, Toys "R" Us
Spartanburg, SC
Total Associated --------- --------- --------
Centers............ 2,122,977 1,240,207 93%
========= ========= ========
-22-
(1) Includes the total square footage of the Anchors (whether owned or leased
by the Anchor) and shops. Does not include future expansion areas.
(2) Includes leasable Anchors.
(3) Includes tenants with executed leases at December 31, 1999. Calculation
includes leased Anchors.
(4) Carmike Cinemas is subject to a ground lease (40,000 square feet of GLA).
Total GLA includes, but total Total leasable GLA and percentatge lease
exclude a furniture store of 80,000 square feet owned by others.
(5) Originally opened in 1985, and was acquired by the Company in June 1997.
(6) Eckerd has closed its store but is continuing to meet its financial
obligations under its lease and is subleased to Dollar General.
(7) Owned by tenant.
(8) Originally opened in 1985, and was acquired by the Company in August 1997.
(9) Acquired by the Company in July 1998.
(10)The land is ground leased through June 2015 with options to extend through
June 2035. The annual rent is $14,355 increasing by 6% each year.
Community and Power Centers
In addition to Mall development, the Company's development activities focus
on Community Centers, and power centers. Community Centers pose fewer
development risks than Malls because they have shorter development timetables
and lower up-front costs. Community Centers also afford the Company the
opportunity to meet the needs of retailers for whom a "convenience" type of
location is more appropriate and the needs of customers whose trade areas cannot
support a regional mall. Power centers are larger than other Community Centers,
with several large anchor stores which draw shoppers from a wider geographic
area.
The Company's Community Center developments in the 1980's were generally
anchored by supermarkets, and, in certain cases, by drug stores. Management's
current focus has expanded to include the development of larger centers,
anchored by mass merchandisers and department stores, while continuing the
development of smaller centers anchored by supermarkets and drug stores.
Recently completed Community Centers include centers in Morganton, North
Carolina and Orlando, Florida. Anchors at these new centers include, JCPenney,
Belk, Goody's, Wal*Mart and Lowe's. During 1999 the Company sold a free-standing
center, Northpark Center in Richmond, Virginia and Regal Cinema in Jacksonville,
Florida, a free-standing center under development. Subsequent to December 31,
1999, the Company sold University Crossing in Pueblo, Colorado in exchange for a
purchase money mortgage. and sold the recently completed Fiddler's Run in
Morganton, North Carolina in a like-kind exchange of properties under section
1031 of the Code.
Community Centers, other than power centers, range in size from 25,000
square feet to in excess of 286,000 square feet. Anchors in Community Centers
generally lease their store space and occupy 60-85% of a center's GLA. The
number of stores in a Community Center ranges from one to sixteen with an
average of seven stores per center.
The Company's two power centers, which were completed and opened in 1997
and 1998, average 786,000 square feet and have an average of nine major anchor
stores and additional small shop space ranging from 38,000 square feet to
136,000 square feet. The projects include expansion areas for additional major
retailers. These power centers are included in the Community Center
classification in this report.
Total GLA of the 82 Community Centers is approximately 9.2 million square
feet, or an average of approximately 113,000 square feet per center. Excluding
power centers the average is 90,000 square feet per center. As of December 31,
1999, 97.7% of total leasable GLA at the Community Centers was leased.
In the years ended December 31, 1997, 1998 and 1999, revenues from the
Community Centers represented approximately 21.2%, 19.6% and 17.8%,
respectively, of total revenues from the Company's Properties.
Occupancy at the Community Centers increased from 97.0% at December 31,
1998 to 97.7% at December 31, 1999.
Average base rent per square foot at the Community Centers increased from
$8.22 at December 31, 1998, to $8.32 at December 31, 1999.
-23-
As of December 31, 1999, Food Lion, a major regional supermarket operator
with headquarters in North Carolina served as an anchor tenant in 37 of the
Company's Community Centers. For the year ended December 31, 1999, Food Lion
accounted for approximately 2.7% of the revenues generated by the Company's
Properties.
With the exception of Suburban Plaza, Sutton Plaza and Lions Head Village,
which were acquired by the Company in March 1995, January 1997 and July 1998,
respectively, each of the Community Centers was developed by the Company.
The following table summarizes the percentage of total leasable GLA leased,
average base rent per square foot (excluding percentage rent) and tenant sales
per square foot at the Community Centers for each of the last five years.
Community Center Summary Information
Average
Percentage Base Rent Tenant
Year Ended GLA Per Square Sales Per
December 31, Leased(1) Foot(2) Square Foot(3)
- ---------------------------------- ----------- ---------- --------------
1995.............................. 96.8% 6.66 202
1996.............................. 97.2% 6.94 210
1997.............................. 97.6% 7.42 221
1998.............................. 97.0% 8.22 220
1999.............................. 97.7% 8.32 214
(1) Percentage leased includes tenants who have executed leases and are paying
rent as of the specified date.
(2) Average base rent per square foot is based on GLA occupied as of the last
day of the indicated period.
(3) Consistent with industry practice, sales are based on reports by retailers
(excluding theaters) leasing GLA and occupying space for the 12 months
ending on the last day of the indicated period.
Lease Expirations. The following table shows the scheduled lease expirations for
the Community Centers (assuming that none of the tenants exercise renewal
options) for the year ending December 31, 2000, and for the next nine years.
Community Center Lease Expiration
Percentage of
Total Represented
Annualized Approximate by Expiring Leases
Number of Base Rent GLA of Base Rent -----------------------
Year Ended Leases of Expiring Expiring Per Annualized Leased
December 31, Expiring Leases(1) Leases Square Foot Base Rent GLA
- --------------------- ----------- ---------- ----------- ----------- ----------- ----------
2000................. 89 $1,887,866 241,504 $ 7.82 3.85% 4.12%
2001................. 94 2,257,523 299,128 7.55 4.60 5.10
2002................. 136 3,922,398 471,722 8.32 7.99 8.04
2003................. 93 3,588,222 528,119 6.79 7.31 9.00
2004................. 109 3,774,040 387,656 9.74 7.69 6.61
2005................. 32 2,215,174 270,561 8.19 4.51 4.61
2006................. 16 1,643,250 255,550 6.43 3.35 4.36
2007................. 15 1,446,140 172,893 8.36 2.95 2.95
2008................. 20 2,512,073 250,418 10.03 5.12 4.27
2009................. 23 3,946,525 424,981 9.29 8.04 7.25
(1) Total annualized base rent for all leases executed as of December 31, 1999
includes 12 months of rent for space that is newly leased but not yet
occupied and base rent on ground leases with no square footage but excludes
(i) percentage rents, (ii) additional payments by tenants for common area
maintenance, real estate taxes and other expense reimbursements and (iii)
contractual rent escalations and cost of living increases for periods after
December 31, 1999.
-24-
The following table sets forth certain information for executed renewal
leases with current tenants or leases of previously occupied space with new
tenants at the Community Centers during the year ended December 31, 1999.
Prior Lease New Lease
Total Base and Initial Year Increase New Lease Increase
Number Square Percentage Rent Base Rent per Square Average per Square
of Leases Feet per Square Foot per Square Foot Foot Base Rent Foot
- ------------ ------------ --------------- --------------- ------------ ------------ -----------
197 460,978 $8.44 $9.03 $1.59 $9.39 $0.95
The following table sets forth certain information for each of the
Company's Community Centers at December 31, 1999.
-25-
Ownership
Year of by Company Square
Opening/ and Total Percentage Feet Fee or Number
Name of Most Recent Operating Total Leasable GLA of Anchor Ground of
Community Center Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores
- -------------------- ------------- ------------ ------- --------- ----------- ----------------- ----------- --------- -------
Anderson Plaza 1983/1994 100% 46,258 46,258 100% Food Lion, Eckerd None Fee 3
Greenwood, SC
Bartow Village 1990 100% 40,520 40,520 100% Food Lion, Family None Fee 4
Bartow, FL Dollar
Beach Crossing 1984 100% 45,790 45,790 88% Food Lion(4), CVS None Fee 6
Myrtle Beach, SC
Bennington Place 1994 100% 42,712 42,712 100% Food Lion None Fee 3
Roanoke, VA
BJ's Plaza 1991 100% 104,233 104,233 100% BJ's Wholesale Club None Ground 1
Portland, ME Lease(5)
Briarcliff Square 1989 100% 41,778 41,778 93% Food Lion None Fee 10
Oak Ridge, TN
Buena Vista Plaza 1989/1997 100% 151,320 17,500 100% Wal*Mart, Winn Dixie None Fee 7
Columbus, GA
Bulloch Plaza 1986 100% 34,400 34,400 100% Food Lion None Fee 3
Statesboro, GA
Capital Crossing 1995 100% 83,700 83,700 100% Hannaford Bros., Staples None Fee 2
Raleigh, NC
Cedar Bluff Crossing 1987/1996 100% 53,050 53,050 100% Food Lion None Fee 12
Knoxville, TN
Cedar Plaza 1988 100% 95,000 50,000 100% Quality Stores, None Fee 5
Cedar Springs, MI
Centerview Plaza 1986/1994 100% 43,720 43,720 100% Food Lion, Eckerd None Fee 6
China Grove, NC
Chester Square 1997 100% 10,000 10,000 88% Hannaford Brothers None Fee 3
Richmond, VA
Chestnut Hills 1982 100% 68,364 68,364 96% JCPenney None Fee 10
Murray, KY
-26-
Ownership
Year of by Company Square
Opening/ and Total Percentage Feet Fee or Number
Name of Most Recent Operating Total Leasable GLA of Anchor Ground of
Community Center Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores
- -------------------- ------------- ------------ ------- --------- ----------- ----------------- ----------- --------- -------
Colleton Square 1986 100% 31,000 31,000 96% Food Lion(4) None Fee 5
Walterboro, SC
Collins Park Commons 1989 100% 37,400 37,400 100% Food Lion(7) 29,000 Ground 4
Plant City, FL Lease(6)
Conway Plaza 1985 100% 33,000 33,000 100% Food Lion(7) 21,000 Ground 6
Conway, SC Lease(8)
Cosby Station 1994/1995 100% 77,811 77,811 100% Publix None Fee 9
Douglasville, GA
Courtlandt Towne 1997/1998 100% 763,260 630,017 92% Marshalls, Wal*Mart, None Fee 28
Center Home Depot, Home
Cortlandt, NY Place, A & P Food
Store, Seaman Furniture,
Barnes & Noble,
Office Max, PetsMart
County Park Plaza 1982 100% 60,750 60,750 100% Bi-Lo None Fee 3
Scottsboro, AL
Devonshire Place 1996 100% 104,414 104,414 100% Hannaford Bros., Kinetix, None Ground 4
Cary, NC Borders Books Lease(10)
Dorchester Crossing 1985/1997 100% 45,278 45,278 100% Food Lion None Fee 6
Charleston, SC
East Ridge Crossing 1988 100% 54,000 54,000 100% Food Lion None Fee 13
Chattanooga, TN
East Towne Crossing 1989/1990 100% 158,751 70,011 100% Home Depot, Regal None Fee 8
Knoxville, TN Cinemas, Food Lion
58 Crossing 1988 100% 49,984 49,984 100% Food Lion, CVS None Fee 9
Chattanooga, TN
Fiddler's Run(22) 1999 100% 203,000 203,000 99% Belk, JCPenney, None Fee 20
Morganton, NC Goody's, Food Lion
Garden City Plaza 1984/1991 100% 188,446 76,246 96% Sears, JCPenney None Fee 15
Garden City, KS
-27-
Ownership
Year of by Company Square
Opening/ and Total Percentage Feet Fee or Number
Name of Most Recent Operating Total Leasable GLA of Anchor Ground of
Community Center Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores
- -------------------- ------------- ------------ ------- --------- ----------- ----------------- ----------- --------- -------
Genesis Square 1990/1996 100% 35,344 35,344 100% Food Lion None Fee 4
Crossville, TN
Girvin Plaza 1990 100% 85,564 40,997 100% Winn Dixie None Fee 8
Jacksonville, FL
Greenport Towne Centre 1994 100% 191,622 75,525 100% Wal*Mart, None Fee 3
Hudson, NY Price-Chopper
Hampton Plaza 1990 100% 44,624 44,624 100% Food Lion(4) None Fee 8
Tampa, FL
Henderson Square 1995 100% 268,327 164,329 100% JCPenney, Belk,
Henderson, NC Leggett's, Goody's, None Fee 14
Wal*Mart
Hollins Plantation Plaza 1985 100% 45,920 45,920 100% Food Lion, CVS None Fee 5
Roanoke, VA
Home Depot 1995 100% 134,920 134,920 100% Home Depot None Fee 1
Portland, ME
Jasper Square 1986/1990 100% 95,950 50,550 100% Lowe's, Goody's None Fee 7
Jasper, AL
Jean Ribaut 1977/1993 100% 223,497 223,497 97% Belk, Kmart, Bi-Lo None Fee 17
Beaufort, SC
Karns Corner 1987/1996 100% 35,000 35,000 100% Food Lion None Fee 4
Knoxville, TN
Keystone Crossing 1989 100% 40,400 40,400 100% Food Lion None Fee 5
Tampa, FL
Kingston Overlook 1996/1997 100% 119,350 119,350 100% Baby Superstore, None Fee/ 3
Knoxville, TN Home Place, Ground
Michael's Lease(11)
Lady's Island 1983/1993 100% 60,687 60,687 100% Winn Dixie, Eckerd None Fee 9
Beaufort, SC
LaGrange Commons 1996 100% 59,799 59,799 93% A & P Food Store None Fee 6
LaGrange, NY
Lakeshore Station 1994 100% 8,000 8,000 100% None Fee 5
Gainesville, GA
-28-
Ownership
Year of by Company Square
Opening/ and Total Percentage Feet Fee or Number
Name of Most Recent Operating Total Leasable GLA of Anchor Ground of
Community Center Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores
- -------------------- ------------- ------------ ------- --------- ----------- ----------------- ----------- --------- -------
Lions Head Village 1980(21) 100% 93,290 93,290 86% Steinmart None Fee 15
Nashville, TN
Longview Crossing 1988 100% 29,800 29,800 96% Food Lion None Ground 3
Hickory, NC Lease(12)
Lunenburg Crossing 1994 100% 198,115 25,515 92% Wal*Mart, Shop'n Save None Fee 7
Lunenburg, MA
Massard Crossing 1997 100% 290,717 88,410 100% Wal*Mart, TJ Maxx None Fee 14
Ft. Smith, AR Goody's
North Creek Plaza 1983 100% 28,500 28,500 100% Food Lion None Fee 2
Greenwood, SC
North Haven Crossing 1993 100% 104,612 104,612 100% Sports Authority, Office None Fee 6
North Haven, CT Max, Barnes & Noble
Northridge Plaza 1984/1988 100% 129,570