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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
For the fiscal year ended December 31, 2003
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
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Commission file number 001-13499
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EQUITY ONE, INC.
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(Exact name of Registrant as specified in its charter)
Maryland 52-1794271
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1696 N.E. Miami Gardens Drive, North Miami Beach, FL 33179
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(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (305) 947-1664
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Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $.01 Par Value New York Stock Exchange
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(Title of each class) (Name of exchange on which registered)
None
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Securities registered pursuant to Section 12(g)
of the Act:
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.
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [X] No
As of June 30, 2003, the aggregate market value of the Common Stock held by
non-affiliates of the Registrant was $487,721,026.80 based upon the last
reported sale price of $16.40 per share on the New York Stock Exchange on such
date.
As of March 1, 2004, the number of outstanding shares of Common Stock par
value $.01 per share of the Registrant was 69,798,651.
DOCUMENTS INCORPORATED BY REFERENCE
Certain sections of the Registrant's definitive Proxy Statement for the
2004 Annual Meeting of Stockholders are incorporated by reference in Part III of
this Annual Report on Form 10-K to the extent stated herein.
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EQUITY ONE, INC.
TABLE OF CONTENTS
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Page
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Part I
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Item 1. Business....................................................... 2
Item 2. Properties..................................................... 13
Item 3. Legal Proceedings.............................................. 27
Item 4. Submission of Matters to a Vote of Security Holders............ 28
Part II
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Item 5. Market For Registrant's Common Equity, Related Stockholder
Matters and Purchase of Equity Securities.................... 28
Item 6. Selected Financial Data........................................ 29
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 32
Item 7A. Quantitative and Qualitative Disclosures About Market Risk..... 50
Item 8. Financial Statements and Supplementary Data.................... 52
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure..................................... 52
Item 9A. Controls and Procedures........................................ 52
Part III
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Item 10. Directors and Executive Officers of the Registrant............. 52
Item 11. Executive Compensation......................................... 52
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters................... 52
Item 13. Certain Relationships and Related Transactions................. 53
Item 14. Principal Accountant Fees and Services......................... 53
Part IV
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Item 15. Exhibits, Financial Statement Schedules and Reports on
Form 8-K..................................................... 53
Signatures..................................................... 57
FORWARD-LOOKING INFORMATION
Certain matters discussed in this Form 10-K and the information
incorporated by reference herein contain "forward-looking statements" for
purposes on Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended. These forward-looking
statements are based on current expectations and are not guarantees of future
performance.
All statements other than statements of historical facts are
forward-looking statements, and can be identified by the use of forward-looking
terminology such as "may," "will," "might," "would," "expect," "anticipate,"
"estimate," "would," "could," "should," "believe," "intend," "project,"
"forecast," "target," "plan," or "continue" or the negative of these words or
other variations or comparable terminology, are subject to certain risks, trends
and uncertainties that could cause actual results to differ materially from
those projected. Because these statements are subject to risks and
uncertainties, actual results may differ materially from those expressed or
implied by the forward-looking statements. We caution you not to place undue
reliance on those statements, which speak only as of the date of this report.
Among the factors that could cause actual results to differ materially are:
o general economic conditions, and the effect of these conditions on
rental rates in the markets where our shopping centers are located;
o risks that tenants will not remain in occupancy or pay rent;
o management's ability to successfully combine and integrate the
properties and operations of separate companies that we have acquired
in the past or may acquire in the future;
o interest rate levels and the availability of financing;
o potential environmental liability and other risks associated with the
ownership, development and acquisition of shopping center properties;
o greater than anticipated construction or operating costs;
o inflationary and other general economic trends;
o the effects of hurricanes and other natural disasters; and
o other risks detailed from time to time in the reports filed by us with
the Securities and Exchange Commission.
Except for ongoing obligations to disclose material information as required
by the federal securities laws, we undertake no obligation to release publicly
any revisions to any forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
PART I
ITEM 1. BUSINESS
General
We are a real estate investment trust, or REIT, that principally acquires,
renovates, develops and manages community and neighborhood shopping centers
located predominately in high growth markets in the southern United States. Our
shopping centers are primarily anchored by supermarkets or other
necessity-oriented retailers such as drug stores or discount retail stores.
Our property portfolio, as of December 31, 2003, consisted of 185
properties, comprising 123 supermarket-anchored shopping centers, 11 drug
store-anchored shopping centers, 44 other retail-anchored shopping centers, one
self-storage facility, one industrial and five retail developments, as well as
non-controlling interests in 2 unconsolidated joint ventures that own and
operate commercial properties. These properties are located in 12 states in the
southern United States and contain an aggregate of 19.9 million square feet of
gross leasable area, or GLA. Our portfolio includes shopping centers anchored by
national and regional supermarkets such as Albertsons, Food Lion, H.E.B., Kash
N' Karry, Kroger, Publix, Randall's and Winn-Dixie and other national retailers
such as Bed Bath & Beyond, Best Buy, Blockbuster, Eckerd, Home Depot Design
Expo, Kmart, Lowe's, Walgreens, and Wal-Mart.
We were established as a Maryland corporation in 1992, completed our
initial public offering in May 1998, and have elected to be taxed as a REIT
since 1995. We maintain our principal executive and management office at 1696
N.E. Miami Gardens Drive, North Miami Beach, Florida 33179 in the Shops at
Skylake.
In this annual report, unless stated otherwise or unless the content
requires otherwise, references to "we," "us" or "our" mean Equity One, Inc. and
our consolidated subsidiaries.
Recent Developments and 2003 Overview
IRT Merger
On February 12, 2003, we completed our acquisition of IRT Property Company
by statutory merger. As a result of the merger, we acquired 93 properties
comprising approximately 10 million square feet of gross leasable area. See
"Item 2. - Properties" for a description of the portfolio.
In connection with the merger, we paid aggregate cash consideration of
approximately $189.4 million, issued approximately 17.5 million shares of our
common stock valued at approximately $231.7 million and assumed approximately
$341.9 million of mortgages, unsecured indebtedness and other liabilities,
including $150 million of IRT's senior unsecured notes. Upon completion of the
merger, the investment grade ratings of the senior unsecured notes were
confirmed by Moody's and Standard & Poor's at Baa3 and BBB-, respectively.
Revolving Credit Facility. On February 7, 2003, we entered into a $340
million unsecured revolving credit facility with Wells Fargo and 14 other
lenders which has been used in part to fund a portion of the costs of the
merger, to prepay certain indebtedness and acquire additional properties. As of
December 31, 2003, we had outstanding $162.0 million under the facility.
Equity Private Placement. Contemporaneously with the completion of the IRT
merger, we completed a private placement of 6,911,000 shares of our common stock
to a limited number of existing, affiliated investors at a price of $13.50 per
share. The proceeds from the private placement were used, along with advances
under the Wells Fargo facility, to fund a portion of the costs of the merger and
to prepay certain indebtedness.
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Public Issuance of Equity. In May 2003, we completed the sale of 3.0
million shares of our common stock at a price of $16.22 per share in an
underwritten public offering. The net proceeds of $48.7 million from the
offering were used for general corporate purposes, including the repayment of
debt and ongoing development activities.
In September 2003, we completed the sale of 3.0 million shares of our
common stock at a price of $17.05 per share in an underwritten public offering.
The net proceeds of $51.2 million from the offering were used for general
corporate purposes, including the repayment of debt, ongoing development
activities and the acquisition of additional shopping centers.
Acquisitions. We intend to focus on retail properties and development
projects that generate stable cash flows and present opportunities for value
appreciation. During 2003, we acquired 12 properties for an aggregate
consideration of approximately $211.0 million encompassing approximately 1.5
million square feet of gross leasable area. These properties consisted of 10
supermarket anchored shopping centers, one outparcel, and one parcel of land
held for future development.
Dispositions. Generally, we hold our properties for investment and the
production of rental income until they no longer meet our investment criteria.
During 2003, we sold 6 properties, a property held by a joint venture and a
joint venture interest, for aggregate consideration of approximately $33.3
million encompassing approximately 335,000 square feet of gross leasable area.
Developments and Redevelopments. As of December 31, 2003, we had over 25
development and redevelopment projects underway or in the planning stage
totaling approximately $74.7 million of asset value and requiring approximately
$32.5 million to complete based on current plans and estimates. These include:
o The reconfiguration of a portion of Oakbrook Square in Palm Beach
Gardens, Florida to accommodate a new Homegoods store, a new
out-parcel and a recently opened Stein Mart store;
o The complete redevelopment of Crossroads Square (formerly known as
University Mall) in Pembroke Pines, Florida, incorporating a new
Lowe's home improvement store, a new Eckerd drug store and the
refurbishing of the remainder of the center;
o The construction of a new 46,000 square foot L.A. Fitness Sports Club
as part of a 120,000 square foot addition to our Shops at Skylake in
North Miami Beach, Florida;
o The development of a new 25,000 square foot CVS drug store-anchored
center across the street from our recently completed Plaza Alegre
shopping center development in Miami, Florida;
o The redevelopment of Salerno Village in Stuart, Florida to accommodate
a new and expanded Winn Dixie supermarket;
o The development of two supermarket-anchored shopping centers, one in
Homestead, Florida and the other in McDonough, Georgia, both on
parcels we currently own and control;
o The reconfiguration of the former Gerland space at Copperfield
shopping center in Houston, Texas into multi-tenant space;
o The reconfiguration of a portion of Ambassador Row Courtyards in
Lafayette, Louisiana; and
o The redevelopment of a portion of Gulf Gate Plaza in Naples, Florida.
All of these developments and redevelopments are scheduled for completion
between early 2004 and the end of 2005.
Business and Growth Strategies
Our business strategy has been and will continue to be to maximize
long-term shareholder value by generating sustainable cash flow growth and
increasing the long-term value of our real estate assets. To that
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end, we now own and manage a portfolio of 185 properties including 178
supermarket and necessity-oriented retailer anchored centers. In order to
achieve our objectives in the future, we intend to:
o maximize the value of our existing shopping centers by leasing and
re-leasing those properties at higher rental rates to credit worthy
tenants, by renovating and redeveloping those properties to make them
more attractive to such tenants;
o acquire and develop additional neighborhood and community shopping
centers in high growth, high density metropolitan areas that are
primarily anchored by supermarkets or other necessity-oriented
retailers;
o sell or dispose of properties that do not meet our investment
criteria, asset type or geographic focus; and
o capitalize on our substantial asset base to effectively access capital
to fund our growth.
Enhancing Portfolio Performance. We seek to maximize the value of our
existing shopping centers by leasing and re-leasing those properties at higher
rental rates to creditworthy tenants. These efforts improve the financial
performance of our shopping center portfolio. We believe that we have developed
strong, mutually beneficial relationships with credit worthy tenants,
particularly our anchor tenants, by consistently meeting or exceeding their
expectations and demands. Over the years, this strategy has allowed us to
leverage our relationship with existing tenants to lease and re-lease our
properties and therefore maintain or improve the financial performance of our
existing properties or properties we acquire. Moreover, we are in the process of
renovating or redeveloping a number of under-performing assets in order to make
them more attractive for leasing or re-leasing to creditworthy tenants.
Acquisition and Development of Shopping Centers. We intend to acquire
additional neighborhood and community shopping centers through individual
property acquisitions, development of new properties, property portfolio
purchases and acquisitions of other REITs and real estate companies, both
privately-held and publicly-traded.
We select properties for acquisition or development which have or are
suitable for supermarket or other anchor tenants that offer daily necessities
and value-oriented merchandise. The properties must be well-located, typically
in high growth, high-density metropolitan areas, and have high visibility, open
air designs, ease of entry and exit and ample parking. Although we focus
primarily on well-performing, supermarket-anchored properties with strong cash
flows, we also acquire under-performing assets, which are adaptable over time
for expansion, renovation or redevelopment. When evaluating potential
acquisitions, whether well-performing or under-performing, and development
projects, we consider factors such as:
o the location, construction quality, design and visibility of the
property;
o economic, demographic, regulatory and zoning conditions in the
property's local and regional market;
o the tenants' gross sales per square foot measured against industry
standards, and the rent payable by the tenants;
o competition from comparable retail properties in the market area and
the possibility of future competition;
o the current and projected cash flow of the property and the potential
to increase that cash flow;
o the terms of tenant leases, including the relationship between the
property's current rents and market rents and the ability to increase
rents upon lease rollover;
o the supply and demand by tenants for properties of a similar type in
the market area;
o the potential to complete a strategic renovation, expansion or
re-tenanting of the property;
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o the property's current expense structure and the potential to increase
operating margins; and
o the potential for capital appreciation of the property.
When evaluating expansion, renovation and development possibilities, we
usually do not initiate construction until we have secured commitments from
anchor tenants. In addition, when evaluating acquisitions of portfolios of
properties, REITs or other real estate businesses, we review the component
properties against the criteria described above, as well as opportunities for
synergies and cost savings on a combined basis, the degree of geographic fit
with our existing markets and the extent of non-core assets included in the
acquisition. For instance, in February of 2003, we acquired 93 properties,
representing 10 million square feet of gross leasable area, in a statutory
merger with IRT Property Company. For more information on these acquisitions,
see "Management's Discussion and Analysis of Financial Condition and Results of
Operations" below.
We currently are focused on properties located in the southern region of
the United States. In addition, in making new real estate investments, we intend
to continue to place primary emphasis on obtaining 100% equity interests in
well-located, income-producing properties with attractive yields and potential
for increases in income and capital appreciation.
Selling Certain Assets. Generally, we hold our properties for investment
and for the production of rental income. Over time, when our assets no longer
meet our investment criteria, or when sales provide the opportunity for
significant gains, we may attempt to sell or otherwise dispose of those assets.
Using our Capital to Expand Our Business. We intend to further grow and
expand our business by using cash flows from operations, by drawing on our
existing credit facilities, or if appropriate market conditions exist, by
accessing the capital markets to issue equity, debt or a combination thereof. In
addition, as we have in the past, we intend to utilize tax-advantaged structures
to acquire properties from sellers who wish to defer capital gains. Such
structures may include entering into a joint venture or other type of
co-ownership with a seller, whether in the form of a limited partnership or
limited liability company, in which we would acquire a controlling interest. We
may offer the seller an interest in the venture that is convertible or
exchangeable for shares of our common stock or otherwise allow the seller to
have an equity interest in our company.
Competitive Strengths
We believe that we distinguish ourselves from other owners and operators of
community and neighborhood shopping centers in a number of ways, including:
o Shopping Centers Anchored by Supermarkets or Necessity-Oriented
Retailers. For the year ended December 31, 2003, shopping centers
anchored by supermarkets or other necessity retailers such as drug
stores or discount retail stores accounted for over 98% of our total
annualized minimum rent. We believe that supermarkets and other
necessity-oriented retailers are more resistant to economic downturns
by the nature of their business and generate frequent consumer traffic
through our shopping centers. This traffic enhances the quality,
appeal and longevity of our shopping centers and benefits our other
tenants.
o Attractive Locations in High-Growth Areas. Our portfolio of properties
is concentrated in high-density areas that are experiencing high
population growth such as Florida, Texas, Georgia, Louisiana, North
Carolina and South Carolina. As of December 31, 2003, these states
constitute 45.9%, 15.9%, 15.1%, 9.9%, 5.8% and 2.2% of our retail
properties' gross leasable area, respectively. The strong demographics
of these and our other markets provide our properties with a growing
supply of shoppers and increased demand for the goods and services of
our tenants.
o Diverse Tenant Base. As of December 31, 2003, no single tenant
represented more than 10.0% of our annualized minimum rent and only
Publix, at 8.8%, represented more than 5.0% of such rent. As of
December 31, 2003, we had over 3,200 leases with tenants, including
national and regional supermarket chains, drug stores, discount retail
stores, other nationally or regionally known
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stores, a variety of other regional and local retailers and a number
of local service providers such as doctors, dentists, hair salons,
restaurants and others. We believe that this diversity of tenants
enables us to generate more stable cash flows over time and limits our
exposure to the financial conditions of any particular tenant.
o Seasoned Management Team. Our senior executives and managers average
more than 20 years of experience in the acquisition, management,
leasing, finance, development and construction of real estate or
retail properties. In particular, we believe that our in-depth market
knowledge and the long-term tenant relationships developed by our
senior management team provide us with a key competitive advantage.
o Property Acquisition Strengths. We believe we have certain competitive
advantages which enhance our ability to capitalize on acquisition
opportunities, including our long standing relationships with bankers,
brokers, tenants and institutional and other real estate owners in our
current target markets; our access to capital; our ability to offer
cash and tax advantaged structures to sellers; and our demonstrated
ability to conduct a rapid, efficient and effective due diligence
investigation of the property, portfolio or company.
o Strong Relationship with Tenants. We believe we have cultivated strong
relationships with supermarket and other anchor tenants, which, in
combination with our in-depth knowledge of our primary markets, have
contributed substantially to our success in identifying, acquiring and
operating our properties.
Financing Strategy
Our financing strategy is to maintain a strong and flexible financial
position by limiting our debt to a prudent level and minimizing our variable
interest rate exposure. We intend to finance future growth with the most
advantageous source of capital available to us at the time of an acquisition.
These sources may include selling common stock, preferred stock, debt
securities, depository shares or warrants through public offerings or private
placements, utilizing availability under our $340 million unsecured revolving
credit facility or incurring additional indebtedness through secured or
unsecured borrowings either at the parent level or through mortgages with
recourse limited to specific properties.
Risk Factors
You should carefully consider the risks described below. The trading price of
any of our securities could decline due to any of these risks.
We are dependent upon certain key tenants and adverse developments in the
business of these tenants could have a negative impact on our financial
condition.
We own shopping centers which are supported by "anchor" tenants which, due
to size, reputation or other factors, are particularly responsible for drawing
other tenants and shoppers to our centers. For instance, Publix is our largest
tenant and accounts for approximately 2.0 million square feet, or 10.3%, of our
gross leasable area.
At any time, an anchor tenant or other tenant may experience a downturn in
its business that may weaken its financial condition. As a result, tenants may
delay lease commencement, fail to make rental payments when due or declare
bankruptcy. We are subject to the risk that these tenants may be unable to make
their lease payments or may decline to extend a lease upon its expiration. Any
tenant bankruptcies, leasing delays or failures to make rental payments when due
could result in the termination of the tenant's lease and material losses to our
business and harm to our operating results. For example, in January 2002, Kmart
Corporation, an anchor tenant at ten of our shopping centers, filed for
bankruptcy protection and closed stores and terminated leases at four of our
centers. If Kmart elects to close some or all of the remaining six stores in our
centers and terminate the associated leases, it would adversely affect our
operating results, including funds from operations.
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In addition to the loss of rental payments, a lease termination by an
anchor tenant or a failure by that anchor tenant to occupy the premises could
result in lease terminations or reductions in rent by other tenants in the same
shopping center whose leases permit cancellation or rent reduction if an anchor
tenant's lease is terminated. Vacated anchor tenant space also tends to
adversely affect the entire shopping center because of the loss of the departed
anchor tenant's power to draw customers to the center. We cannot provide any
assurance that we will be able to quickly re-lease vacant space on favorable
terms, if at all. Any of these developments could adversely affect our financial
condition or results of operations.
Our growth may be impeded if we are not successful in identifying suitable
acquisitions that meet our investment criteria.
Our business strategy is to make future acquisitions of or investments in
additional real estate assets or other real estate companies. Integral to this
strategy will be our ability to expand in the future by identifying suitable
acquisition candidates or investment opportunities that meet our criteria and
are compatible with our growth strategy. We may not be successful in identifying
suitable real estate assets or other businesses that meet our acquisition
criteria or completing acquisitions or investments on satisfactory terms.
Failures in identifying or completing acquisitions could reduce the number of
acquisitions we are able to make and may slow our growth, which could in turn
harm our future stock price.
Future acquisitions of real estate assets or other real estate companies
may not yield the returns expected, may result in disruptions to our
business, may strain management resources and may result in stockholder
dilution.
Our acquisition strategy and our market selection process may not
ultimately be successful and may not provide positive returns on our investment.
If we acquire a business, we will be required to integrate the operations,
personnel and accounting and information systems of the acquired business and
train, retain and motivate any key personnel from the acquired business. In
addition, acquisitions may cause disruptions in our operations and divert
management's attention away from day-to-day operations, which could impair our
relationships with our current tenants and employees. The issuance of equity
securities in connection with any acquisition could be substantially dilutive to
our stockholders.
We will face increasing competition for the acquisition of real estate
assets, which may impede our ability to make future acquisitions or may
increase the cost of these acquisitions.
We compete with many other entities engaged in real estate investment
activities for acquisitions of community and neighborhood shopping centers,
including institutional pension funds, other REITs and other owner-operators of
shopping centers. These competitors may drive up the price we must pay for real
estate assets or other real estate companies we seek to acquire, or may succeed
in acquiring those companies or assets themselves. In addition, potential
acquisition targets may find competitors to be more attractive suitors because
they may have greater resources, may be willing to pay more or may have a more
compatible operating philosophy. In particular, larger REITs may enjoy
significant competitive advantages that result from, among other things, a lower
cost of capital and enhanced operating efficiencies. In addition, the number of
entities and the amount of funds competing for suitable investment properties
may increase. Such competition may reduce the number of suitable properties and
increase the bargaining position of the owners of those properties. This will
result in increased demand for these assets, and, therefore, increased prices
paid for them. If we must pay higher prices for properties, our profitability
will be reduced, and our stockholders may experience a lower return on their
investment.
Geographic concentration of our properties will make our business
vulnerable to economic downturns in Florida.
Approximately 45.9% of our gross leasable area is located in Florida. As a
result, economic and real estate conditions in Florida will significantly affect
our revenues and the value of our properties. Business layoffs or downsizing,
industry slowdowns, changing demographics and other similar factors may
adversely affect the economic climate in Florida. Any resulting oversupply or
reduced demand for retail properties in Florida would adversely affect our
operating performances and limit our ability to make distributions to
stockholders.
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We may be subjected to liability for environmental contamination which
might have a material adverse impact on our financial condition and results
of operations.
As an owner and operator of real estate and real estate-related facilities,
we may be liable for the costs of removal or remediation of hazardous or toxic
substances present at, on, under, in or released from our properties, as well as
for governmental fines and damages for injuries to persons and property. We may
be liable without regard to whether we knew of, or were responsible for, the
environmental contamination and with respect to properties previously owned by
companies we have acquired, whether the contamination occurred before or after
the acquisition. We have several properties in our portfolio that will require
or are currently undergoing varying levels of environmental remediation. We do
not currently maintain an umbrella environmental insurance policy covering all
of our properties, and, therefore, any liability, fine or damage will directly
impact our financial results.
Our investments in development and redevelopment projects may not yield
anticipated returns, which would harm our operating results and reduce the
amount of funds available for distributions to stockholders.
An important component of our growth strategy is the redevelopment of
properties within our portfolio. In addition, we intend to develop new shopping
centers at other locations and pursue other development and redevelopment
activities as opportunities arise. However, we may not be able to do so
successfully. Expansion, renovation and development projects generally require
expenditures of capital, as well as various governmental and other approvals,
which we may not be able to obtain, or may only obtain after delay and at
substantial costs.
While our policies with respect to expansion, renovation and development
activities are intended to limit some of the risks otherwise associated with
such activities, such as initiating construction only after securing commitments
from anchor tenants, we will nevertheless be subject to risks that construction
costs of a property, due to factors such as cost overruns, design changes and
timing delays arising from a lack of availability of materials and labor,
weather conditions and other factors outside of our control, may exceed original
estimates, possibly making the associated investment uneconomical. Any
substantial unanticipated delays or expenses could adversely affect the
investment returns from these redevelopment projects and harm our operating
results. In addition, occupancy rates and rents at a newly completed property
may not be sufficient to make the property profitable, or development,
construction and lease-up activities may not be completed on schedule, resulting
in decreased operating income.
We may experience difficulties and additional costs associated with renting
unleased space and space to be vacated in future years.
We plan to improve the performance of several properties by re-leasing
vacated space. However, our ability to rent unleased or vacated space in these
or other properties will be affected by many factors, including the property's
location, current market conditions and covenants found in certain leases
restricting the use of other space at a property. For instance, in some cases,
our tenant leases contain provisions giving the tenant the exclusive right to
sell particular types of merchandise or provide specific types of services
within the particular retail center, or limit the ability of other tenants to
sell that merchandise or provide those services. When re-leasing space after a
vacancy, these provisions may limit the number and types of prospective tenants
for the vacant space. The failure to lease or to re-lease on satisfactory terms
could harm our operating results.
In addition, if we are able to re-lease vacated space, there is no
assurance that rental rates will be equal to or in excess of current rental
rates. In addition, we may incur substantial costs in obtaining new tenants,
including brokerage commission fees paid by us in connection with new leases or
lease renewals, and the cost of making leasehold improvements.
We have substantial debt obligations which may reduce our operating
performance and put us at a competitive disadvantage.
We have outstanding debt and other liabilities in the aggregate amount of
approximately $810 million. Our loan facilities require scheduled principal and
balloon payments. In addition, we may incur additional
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indebtedness in the future. As a result, we are subject to the risks normally
associated with debt financing, including the risk that our cash flow will be
insufficient to meet required payments of principal and interest, the risk that
interest rates may increase on variable-rate debt and the risk that indebtedness
on our properties cannot be refinanced at maturity or that the terms of such
refinancing will not be as favorable as the terms of such indebtedness.
If our internally generated cash is adequate to repay only a portion of our
indebtedness prior to maturity, then we will be required to repay debt through
refinancing or equity offerings. If we are unable to refinance our indebtedness
on acceptable terms, or at all, we might be forced to dispose of one or more of
our properties upon disadvantageous terms, which might result in losses and
might adversely affect our cash available for distribution. If prevailing
interest rates or other factors at the time of refinancing result in higher
interest rates on refinancing, our interest expense would increase, without a
corresponding increase in our rental rates, which would adversely affect our
results of operations. Further, if one of our properties is mortgaged to secure
payment of indebtedness and we are unable to meet mortgage payments, or if we
are in default under the related mortgage or deed of trust, such property could
be transferred to the mortgagee, or the mortgagee could foreclose upon the
property, appoint a receiver and receive an assignment of rents and leases or
pursue other remedies, all with a consequent loss of income and asset value.
Foreclosure could also create taxable income without accompanying cash proceeds,
thereby hindering our ability to meet the REIT distribution requirements under
the Internal Revenue Code.
Changes in interest rates could adversely affect the market price of our
securities.
The market price of our common stock is affected by the annual distribution
rate on the shares of our common stock. Increasing market interest rates may
lead prospective purchasers of our common stock and other securities to seek
alternative investments that offer a higher annual yield which would likely
adversely affect the market price of our common stock and other securities. In
addition, we have several variable rate loans, including our $340 million
revolving credit facility with Wells Fargo. As interest rates rise, more of our
funds from operations will be required to service that debt. Finally, increases
in interest rates may have the effect of depressing the market value of retail
properties such as ours, including the value of those properties securing our
indebtedness.
Our financial covenants may restrict our operating or acquisition
activities, which may harm our financial condition and operating results.
Our unsecured revolving credit facility with Wells Fargo, our senior
unsecured notes payable and much of our existing mortgage indebtedness contain
customary covenants and conditions, including, among others, compliance with
various financial ratios and restrictions upon the incurrence of additional
indebtedness and liens on our properties. Furthermore, the terms of some of this
indebtedness will restrict our ability to consummate transactions that result in
a change of control or to otherwise issue equity or debt securities. The
existing mortgages also contain customary negative covenants such as those that
limit our ability, without the prior consent of the lender, to further mortgage
the applicable property or to discontinue insurance coverage. If we were to
breach covenants in these debt agreements, the lender could declare a default
and require us to repay the debt immediately. If we fail to make such repayment
in a timely manner, the lender may be entitled to take possession of any
property securing the loan.
Certain of our indebtedness may currently be in default as a result of
prior issuances of our common stock or prior acquisitions which may serve
as a basis for our lenders to accelerate amounts due under the related
mortgages or demand payments or fees.
Certain of the mortgages on our properties contain prohibitions on
transfers of ownership interests in the mortgagor or its parent without the
prior written consent of the lenders, which provisions may have been violated by
previous transactions completed by us, including the merger with IRT. A
violation could serve as a basis for the lenders to accelerate amounts due under
the related mortgages, demand payments or assess fees or penalties.
The outstanding amounts under the mortgages on the affected properties
covered by such restrictions on transfer totaled approximately $182.0 million as
of December 31, 2003. In the event that the holders declare defaults under the
mortgage documents, we could be required to prepay the remaining mortgages from
existing
9
resources, refinancing of such mortgages, borrowings under our other lines of
credit or other sources of financing. The repayment of these mortgages could
have an adverse impact on the operations and affect our ability to make
distributions to stockholders.
Our Chairman and Chief Executive Officer and his affiliates own
approximately 42% of our common stock and exercise significant control over
our company and may delay, defer or prevent us from taking actions that
would be beneficial to our other stockholders.
Chaim Katzman, our Chairman and Chief Executive Officer and our largest
stockholder, and his affiliates own approximately 42% of the outstanding shares
of our common stock. Accordingly, Mr. Katzman is able to exercise significant
control over the outcome of substantially all matters required to be submitted
to our stockholders for approval, including decisions relating to the election
of our board of directors and the determination of our day-to-day corporate and
management policies. In addition, Mr. Katzman is able to exercise significant
control over the outcome of any proposed merger or consolidation of our company
which, under our charter, the affirmative vote of the holders of a majority of
the outstanding shares of our common stock in such instances. Mr. Katzman's
ownership interest in our company may discourage third parties from seeking to
acquire control of our company which may adversely affect the market price of
our common stock.
Several of our controlling stockholders have pledged their shares of our
stock as collateral under bank loans, foreclosure and disposition of which
could have a negative impact on our stock price.
Several of our affiliated stockholders that beneficially own a significant
interest in our company, including Gazit-Globe (1982), Ltd. and related
entities, have pledged a substantial portion of our stock that they own to
secure loans made to them by commercial banks. In the aggregate, these
stockholders have pledged more than 25.0 million shares, representing
approximately 36% of our total outstanding shares.
If a stockholder defaults on any of its obligations under these pledge
agreements or the related loan documents, these banks may have the right to sell
the pledged shares in one or more public or private sales that could cause our
stock price to decline. Many of the occurrences that could result in a
foreclosure of the pledged shares are out of our control and are unrelated to
our operations. Some of the occurrences that may constitute such an event of
default include:
o the stockholder's failure to make a payment of principal or interest
when due;
o the occurrence of another default that would entitle any of the
stockholder's other creditors to accelerate payment of any debts and
obligations owed to them by the stockholder;
o if the bank, in its absolute discretion, deems that a change has
occurred in the condition of the stockholder to which the bank has not
given its prior written consent;
o if the stockholder ceases to pay its debts or manage its affairs or
reaches a compromise or arrangement with its creditors; and
o if, in the opinion of the bank, the value of the pledged shares shall
be reduced or is likely to be reduced (for example, the price of our
common stock declines).
In addition, because so many shares are pledged to secure loans, the
occurrence of an event of default could result in a sale of pledged shares that
would trigger a change of control of our company, even when such a change may
not be in the best interests of our stockholders.
Our organizational documents contain provisions which may discourage the
takeover of our company, may make removal of our management more difficult
and may depress our stock price.
Our organizational documents contain provisions that may have an
anti-takeover effect and inhibit a change in our management. For instance, our
charter contains ownership limits and restrictions on transferability of shares
of our capital stock in order to protect our status as a REIT. These provisions
prevent any one stockholder from owning, actually or constructively, more than
9.9% of the value or number of outstanding shares of our capital stock without
our prior consent. In addition, our charter and bylaws contain other provisions
that may have the effect of delaying, deferring or preventing a change of
control or the
10
removal of existing management and, as a result, could prevent our stockholders
from receiving a premium for their shares of common stock above the prevailing
market prices. These provisions include the ability to issue preferred stock,
advance notice requirements for stockholder proposals, the absence of cumulative
voting rights and provisions relating to the removal of incumbent directors.
Finally, Maryland law also contains several statutes that restrict mergers and
other business combinations with an interested stockholder or that may otherwise
have the effect of preventing or delaying a change of control.
We may experience adverse consequences in the event we fail to qualify as a
REIT.
Although we believe that we have operated so as to qualify as a REIT under
the Internal Revenue Code since our REIT election in 1995, no assurance can be
given that we have qualified or will remain qualified as a REIT. In addition, no
assurance can be given that legislation, new regulations, administrative
interpretations or court decisions will not significantly change the tax laws
with respect to qualification as a REIT or the federal income tax consequences
of such qualification. Qualification as a REIT involves the application of
highly technical and complex provisions of the Internal Revenue Code for which
there are only limited judicial and administrative interpretations. The
determination of various factual matters and circumstances not entirely within
our control may affect our ability to qualify as a REIT. For example, in order
to qualify as a REIT, at least 90% of our gross income in any year must be
derived from qualifying sources and we must make distributions to stockholders
aggregating annually at least 90% of our REIT taxable income, excluding net
capital gains. We intend to make distributions to our stockholders to comply
with the distribution provisions of the Internal Revenue Code. Although we
anticipate that our cash flows from operating activities will be sufficient to
enable us to pay our operating expenses and meet distribution requirements, no
assurance can be given in this regard.
If we were to fail to qualify as a REIT in any taxable year, we would be
subject to federal income tax, including any applicable alternative minimum tax,
on our taxable income at regular corporate income tax rates, and we would not be
allowed a deduction in computing our taxable income for amounts distributed to
our stockholders. Moreover, unless entitled to relief under certain statutory
provisions, we also would be ineligible for qualification as a REIT for the four
taxable years following the year during which qualification was lost. Such
disqualification would reduce our net earnings available for investment or
distribution to our stockholders due to our additional tax liability for the
years involved.
Loss of Key Personnel Could Harm Our Business.
Our ability to successfully execute our acquisition and growth strategy
depends to a significant degree upon the continued contributions of Chaim
Katzman, our Chairman of the Board and Chief Executive Officer, Doron Valero,
our President and Chief Operating Officer, and Howard Sipzner, our Executive
Vice President and Chief Financial Officer. Pursuant to our employment
agreements with Mr. Katzman, he is only required to devote so much of his
business time, attention, skill and efforts as shall be required for the
faithful performance of his duties. Moreover, there is no guarantee that Mr.
Katzman, Mr. Valero or Mr. Sipzner will remain employed with us. While we have
employment agreements with these executives, we cannot guarantee that we will be
able to retain their services. The loss of the services of Messrs. Katzman,
Valero and Sipzner could have a material adverse effect on our results of
operations.
Competition
There are numerous commercial developers, real estate companies, including
REITs such as Regency Realty Corporation, Weingarten Realty Investors and New
Plan Excel Realty Trust, and other owners of real estate in the areas in which
our properties are located that compete with us in seeking land for development,
properties for acquisition, financing and tenants. Many of such competitors have
substantially greater resources than we have. All of our existing properties are
located in developed areas that include other shopping centers and other retail
properties. The number of retail properties in a particular area could
materially adversely affect our ability to lease vacant space and maintain the
rents charged at our existing properties.
11
We believe that the principal competitive factors in attracting tenants in
our market areas are location, price, anchor tenants and maintenance of
properties. We also believe that our competitive advantages include the
favorable locations of our properties, our ability to provide a retailer with
multiple locations with anchor tenants and the practice of continuous
maintenance and renovation of our properties.
Regulations
Regulations. Retail properties are subject to various laws, ordinances and
regulations. We believe that each of our existing properties maintains all
required material operating permits and approvals.
Americans with Disabilities Act. Our properties are subject to the
Americans with Disabilities Act of 1990. Under this act, all places of public
accommodation are required to comply with federal requirements related to access
and use by disabled persons. The act has separate compliance requirements for
"public accommodations" and "commercial facilities" that generally require that
buildings and services, including restaurants and retail stores, be made
accessible and available to people with disabilities. The act's requirements
could require removal of access barriers and could result in the imposition of
injunctive relief, monetary penalties or, in some cases, an award of damages. We
believe that our properties are in substantial compliance with the requirements
under the American with Disabilities Act and have no reason to believe that
these requirements or the enforcement of these requirements will have a
materially adverse impact on our business.
Environmental Matters
Under various federal, state and local laws, ordinances and regulations, we
may be liable for the cost to remove or remediate certain hazardous or toxic
substances at our shopping centers. These laws often impose liability without
regard to whether we knew of, or were responsible for, the presence of the
hazardous or toxic substances. The cost of required remediation and our
liability for remediation could exceed the value of the property and/or our
aggregate assets. The presence of such substances, or the failure to properly
remediate such substances, may adversely affect our ability to sell or rent the
property or borrow using the property as collateral. We have several properties
that will require or are currently undergoing varying levels of environmental
remediation. In some cases, contamination has migrated or is expected to migrate
into the groundwater beneath our properties from adjacent properties, such as
service stations. In other cases, contamination has resulted from on-site uses
by current or former owners or tenants, such as gas stations or dry cleaners,
which have released pollutants such as gasoline or dry-cleaning solvents into
the soil or groundwater. We believe that, based on environmental studies
conducted to date, none of these environmental problems is likely to have a
material adverse effect on our financial condition. However, no assurances can
be given that environmental studies obtained by us reveal all environmental
liabilities, that any prior owner of land or a property owned or acquired by us
did not create any material environmental condition not known to us, or that a
material environmental condition does not otherwise exist, or may not exist in
the future.
Employees
At December 31, 2003, we had 207 full-time employees. Our employees are not
represented by any collective bargaining group, and we consider our relations
with our employees to be good.
Available Information
Our internet address is www.equityone.net. You can obtain on our website,
free of charge, a copy of our annual report on Form 10-K, our quarterly reports
on Form 10-Q, our Supplemental Information Package, our current reports on Form
8-K, and any amendments to those reports, as soon as reasonably practicable
after we electronically file such reports or amendments with the SEC. Also,
available on our website, free of charge, are copies of our Corporate Governance
Guidelines and the charters for each of the committees of our Board of Directors
- - the Audit Committee, the Corporate Governance and Nominating Committee and the
Compensation Committee. A copy of our Code of Ethics will be available, free of
charge, on our website on or before our 2004 Annual Meeting of Stockholders.
Copies are also available free of charge by contacting our Investor Relations
Department at:
12
Equity One, Inc.
1696 N.E. Miami Gardens Drive,
North Miami Beach, Florida 33179
Attn: Investor Relations Department
(305) 947-1664
You may also read and copy any materials we file with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549, or you may
obtain information by calling the SEC at 1-800-SEC-0300. The SEC maintains an
internet address at http://www.sec.gov that contains reports, proxy statements
and information statements, and other information in which you may obtain
additional information.
ITEM 2. PROPERTIES
Our portfolio consists primarily of shopping centers anchored by
supermarket and other necessity-oriented retailers and contains an aggregate of
approximately 19.9 million square feet of gross leasable area. Other than our
leasehold interests in our Green Oaks, Parkwood and Richwood shopping centers,
each of which is located in Dallas, Texas, our McAlpin Square shopping center
located in Savannah, Georgia, our Plaza Acadienne shopping center located in
Eunice, Louisiana, our Shelby Plaza shopping center located in Shelby, North
Carolina, our Park Northern shopping center located in Arizona and El Novillo
located in Florida, all of our other properties are owned in fee simple. In
addition, some of our properties are subject to mortgages as described under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Mortgage Indebtedness." The following table provides a brief
description of our properties as of December 31, 2003:
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
ALABAMA (2 properties)
Madison Centre 2003 64,837 12 $597,364 $9.57 96.3% Publix, Rite Aid
Madison
West Gate Plaza 2003 64,378 9 $454,703 $7.12 99.2% Winn Dixie, Rite Aid
Mobile
--------- -------- ---------- --------- ---------
Subtotal Alabama Properties 129,215 21 $1,052,067 $8.33 97.8%
(2 properties) --------- -------- ---------- --------- ---------
ARIZONA (2 properties)
Big Curve 2001 126,402 33 $1,161,662 $9.84 93.4% Albertsons(4), Walgreens*,
Yuma Miller's Outpost
Park Northern 2001 126,852 25 $812,155 $6.80 94.1% Safeway, Bealls, Chuck E
Phoenix Cheese, Life Skills Center
--------- -------- ---------- --------- ---------
Subtotal Arizona Properties 253,254 58 $1,973,817 $8.31 93.7%
(2 properties) --------- -------- ---------- --------- ---------
FLORIDA (71 properties)
North Florida (13 properties)
Atlantic Village 1995 100,559 25 $930,740 $9.85 94.0% Publix, Jo-Ann Fabrics
Atlantic Beach
Beauclerc Village 1998 70,429 11 $425,350 $7.23 83.5% Big Lots, Goodwill,
Jacksonville Bealls Outlet
13
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
Commonwealth 1994 81,467 16 $646,392 $8.30 95.6% Winn-Dixie/Save Rite
Jacksonville
Forest Village 2000 71,526 17 $716,838 $10.39 96.5% Publix
Tallahassee
Fort Caroline 1994 74,546 13 $470,753 $7.16 88.2% Winn-Dixie, Eckerd*
Jacksonville (Bealls Outlet)
Losco Corners 2000 8,700 7 $150,635 $17.31 100.0% Winn-Dixie(4)
Jacksonville
Mandarin Landing 1999 141,565 37 $1,248,525 $9.10 96.9% Publix, Office Depot,
Jacksonville Eckerd
Middle Beach 2003 69,277 9 $648,069 $9.35 100.0% Publix, Movie Gallery
Jacksonville
Monument Point 1997 75,128 12 $498,955 $6.64 100.0% Winn-Dixie, Eckerd
Jacksonville
Oak Hill 1995 78,492 19 $541,737 $6.90 100.0% Publix, Walgreens*
Jacksonville
Parkmore Plaza 2003 159,067 13 $714,185 $4.56 98.5% Wal-Mart* (Bealls), Big
Milton Lots
Pensacola Plaza 1986 56,098 3 $218,988 $4.27 91.4% FoodWorld
Pensacola
South Beach 2003 289,964 50 $2,545,091 $9.15 95.9% Food Lion, Kmart, Stein
Regional Mart, Bealls
Jacksonville Beach
Central Florida (9 properties)
Alafaya Commons 2003 123,133 29 $1,321,418 $11.62 92.4% Publix
Orlando
Conway Crossing 2003 76,321 18 $845,930 $11.31 98.0% Publix
Orlando
Shoppes of 2002 69,037 13 $772,624 $11.19 100.0% Publix
Eastwood
Orlando
Hunters Creek 2003 68,032 11 $686,395 $10.49 96.2% Winn-Dixie
Orlando
Kirkman Shoppes 2001 88,820 30 $1,297,346 $15.43 94.7% Eckerd
Orlando
Lake Mary 1988 342,384 87 $3,698,239 $11.19 96.5% Albertsons, Kmart, Euro
Orlando Fitness, Sun Star
Theatres
Park Promenade 1999 125,818 26 $1,158,825 $9.41 97.9% Orange County Library
Orlando Blockbuster, Goodwill
Town & Country 2003 72,043 13 $518,288 $7.19 100.0% Albertsons
Kissimmee
Unigold 2003 106,185 20 $955,644 $10.14 88.8% Winn-Dixie
Winter Park
14
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
Florida West Coast (15 properties)
Bay Pointe Plaza 2003 103,986 24 $919,362 $9.60 92.1% Publix, Eckerd* (Bealls
St. Petersburg Outlet), West Marine
Carrollwood 2003 94,203 36 $873,356 $10.86 85.4% Publix, Eckerd
Tampa
Charlotte Square 2003 96,188 27 $742,556 $7.87 98.1% Publix, Seafood Buffet,
Port Charlotte Pet Supermarket
Chelsea Place 2003 81,144 18 $888,975 $10.96 100.0% Publix, Eckerd
New Port Richey
Lake St. Charles 2001 57,015 8 $539,481 $9.67 97.9% Kash N' Karry
Tampa
Lutz Lake 2003 64,985 15 $887,635 $13.66 100.0% Publix
Lutz
Marco Town Center 2001 109,830 45 $1,611,728 $15.54 94.4% Publix
Marco Island
Mariners Crossing 2001 85,507 16 $626,750 $7.75 94.6% Kash N' Karry
Spring Hill
North River Village 2003 177,128 16 $1,280,847 $7.23 100.0% Publix, Kmart,
Ellenton Walgreens*, (Dollar
Tree), Bealls Outlet
Regency Crossing 2003 85,864 24 $815,717 $10.82 87.8% Publix
Port Richey
Ross Plaza 2001 85,359 20 $779,172 $9.46 96.5% Walgreens*, Ross Dress
Tampa for Less
Seven Hills 2003 64,590 12 $622,864 $9.64 100.0% Publix
Spring Hill
Shoppes of North 2000 84,705 22 $806,858 $9.70 98.2% Publix, Bealls Outlet
Port
North Port
Skipper Palms 2001 88,000 17 $707,464 $8.53 94.3% Winn-Dixie
Tampa
Summerlin Square 1998 109,156 28 $944,376 $10.14 85.4% Winn-Dixie, Eckerd
Fort Myers
Florida Treasure Coast (8 properties)
Bluff Square 2001 132,395 48 $1,521,014 $11.54 99.5% Publix, Walgreens
Jupiter
15
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
Cashmere Corners 2001 89,234 18 $708,840 $7.94 100.0% Albertsons
Port St. Lucie
Jonathan's Landing 2001 26,820 12 $493,645 $18.41 100.0% Albertsons(4),
Jupiter Blockbuster
New Smyrna Beach 2003 118,451 34 $1,140,471 $9.98 96.5% Publix, Walgreens*
Regional (Bealls Outlet), Bealls
New Smyrna Beach Home Outlet
Old King Commons 2003 84,759 19 $670,958 $7.92 100.0% Wal-Mart* (Scotty's,
Palm Coast Staples)
Ryanwood 2001 114,925 32 $1,075,880 $9.46 99.0% Publix, Bealls Outlet,
Vero Beach Books-A-Million
Salerno Village 2002 58,804 19 $371,637 $6.70 94.3% Winn Dixie, Eckerd
Stuart
Treasure Coast 2003 133,781 25 $1,063,966 $8.55 93.0% Winn Dixie, TJ Maxx
Vero Beach
South Florida/Atlantic Coast (26 properties)
Bird Ludlum 1994 192,282 47 $2,648,292 $14.24 96.7% Winn-Dixie, Eckerd,
Miami Blockbuster, Goodwill
Boca Village 2001 93,428 22 $1,335,900 $14.65 97.6% Publix, Eckerd
Boca Raton
Boynton Plaza 2001 99,324 29 $980,682 $10.60 93.1% Publix, Eckerd
Boynton Beach
Countryside Shops 2003 179,561 46 $2,188,362 $12.19 100.0% Publix, Eckerd, Stein
Cooper City Mart
Crossroads Square 2001 269,653 28 $1,651,886 $6.87 89.2% Lowe's, Eckerd
Pembroke Pines
El Novillo 2001 10,000 1 $150,540 $15.05 100.0% Jumbo Buffet
Miami Beach
Epsilon 2001 18,707 5 $72,243 $15.72 24.6%
West Palm Beach
Greenwood 2003 132,325 35 $1,421,215 $11.67 92.0% Publix, Bealls, World
Palm Springs Savings Bank
Lago Mar 2003 82,613 21 $939,811 $12.33 92.3% Publix
Miami
Lantana Village 1998 175,480 26 $1,134,217 $6.53 99.0% Winn-Dixie, Kmart, Rite
Lantana Aid(4) (Dollar Store)
Meadows 2002 75,524 20 $919,169 $12.33 98.7% Publix
Miami
Pine Island 1999 254,907 46 $2,341,617 $9.49 96.8% Publix, Home Depot Expo,
Davie Bealls Outlet
Pine Ridge Square 2003 117,399 35 $1,520,522 $13.05 99.2% Fresh Market, Bed Bath
Coral Springs & Beyond, Off Main
Furniture
Plaza Alegre 2003 91,611 21 $1,278,658 $14.73 94.8% Publix, Goodwill
Miami
16
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
Plaza Del Rey 1991 50,146 23 $651,201 $12.99 100.0% Navarro Pharmacy
Miami
Point Royale 1995 209,863 26 $1,286,002 $6.53 93.9% Winn-Dixie, Best Buy,
Miami Eckerd* (Linen
Supermarket)
Prosperity Center 2001 122,106 9 $1,866,235 $15.28 100.0% Office Depot, Barnes
Palm Beach Gardens & Noble, Bed Bath &
Beyond, Carmine's, TJ
Maxx
Ridge Plaza 1999 155,204 29 $1,304,784 $8.89 94.5% Publix, AMC Theatre,
Davie Kabooms, Wachovia*
(United Collection), Uncle
Funny's, Round Up
Riverside Square 2003 110,541 36 $1,353,481 $13.35 91.7% Publix, Tuesday
Coral Springs Morning
Sawgrass Promenade 2001 107,092 29 $1,070,585 $10.79 92.7% Publix, Walgreens,
Deerfield Beach Blockbuster
Sheridan Plaza 2003 455,864 66 $5,974,380 $13.48 97.2% Publix, Ross Dress For
Hollywood Less, Bed Bath &
Beyond, Office Depot,
AMC Theater, Eckerd,
Spirit of America*
Shoppes of Ibis 2002 79,420 18 $985,088 $12.40 100.0% Publix
West Palm Beach
Shops at Skylake 1997 174,199 46 $2,631,692 $15.19 99.4% Publix, Goodwill,
North Miami Blockbuster
Beach
Shoppes of 2003 126,788 37 $2,014,766 $16.06 99.0% Publix
Silverlakes
Pembroke Pines
Tamarac Town 2003 127,635 39 $1,056,525 $10.35 79.9% Publix
Square
Tamarac
West Lakes Plaza 1996 100,747 27 $1,094,703 $10.87 100.0% Winn-Dixie, Navarro
Miami Pharmacy
--------- -------- ----------- --------- ---------
Subtotal Florida Properties 8,107,839 1,781 $80,977,075 $10.45 95.5%
(71 properties) --------- -------- ----------- --------- ---------
GEORGIA (24 properties)
Atlanta Area (18 properties)
BridgeMill 2004 89,102 30 $1,257,934 $14.87 94.9% Publix
Canton
Butler Creek 2003 95,597 20 $971,052 $10.60 95.8% Kroger
Acworth
Chastain Square 2003 91,637 27 $1,322,640 $15.84 91.1% Publix
Atlanta
Commerce Crossing 2003 100,668 10 $366,624 $4.03 90.4% Ingles, Wal-Mart*
Commerce
17
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
Douglas Commons 2003 97,027 19 $945,752 $10.00 97.5% Kroger
Douglasville
Fairview Oaks 2003 77,052 13 $858,074 $11.14 100.0% Kroger
Ellenwood
Grassland Crossing 2003 90,906 14 $951,596 $11.37 92.1% Kroger
Alpharetta
Hamilton Ridge 2003 89,496 21 $1,089,628 $12.91 94.3% Kroger
Buford
Mableton Crossing 2003 86,819 18 $858,934 $10.03 98.6% Kroger
Mableton
Macland 2003 79,699 17 $657,938 $9.55 86.4% Publix
Pointe
Marietta
Market Place 2003 77,706 23 $581,596 $7.67 97.6% Peachtree Cinema
Norcross
Paulding Commons 2003 192,391 31 $1,551,961 $8.07 100.0% Kroger, Kmart
Dallas
Powers Ferry Plaza 2003 86,473 24 $752,100 $10.42 83.4% Micro Center
Marietta
Presidential 2003 396,408 40 $3,962,634 $10.00 100.0% Publix, Bed Bath &
Markets Beyond, GAP, Shoe
Snellville Carnival, Marshalls,
Carmike Cinema
Shops of Huntcrest 2003 97,040 26 $1,066,392 $12.25 89.7% Publix
Lawrenceville
Wesley Chapel 2003 170,792 25 $1,141,424 $6.73 99.3% Ingels, Wal-Mart, CVS
Crossing Pharmacy
Decatur
West Towne Square 2003 89,596 18 $453,427 $5.46 92.6% Big Lots, Eckerd*
Rome
Williamsburg @ 2003 44,928 27 $704,851 $17.27 90.8%
Dunwoody
Dunwoody
Central Georgia (4 Properties)
Daniel Village 2003 171,932 39 $1,237,491 $7.84 91.9% Bi-Lo, Eckerd*, St.
Augusta Joseph Home Health
Care
Spalding Village 2003 235,318 28 $1,098,648 $7.65 61.0% Kroger, JC Penney
Griffin
Walton Plaza 2003 43,460 8 $415,007 $9.55 100.0% Harris Teeter* (Omni
Augusta Fitness)
Watson Central 2003 227,747 27 $938,516 $4.85 85.0% Winn-Dixie, Wal-Mart*
Warner Robins (Big Lots)
18
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
South Georgia (2 properties)
Colony Square 2003 50,000 8 $322,476 $6.69 96.4% Food Lion
Fitzgerald
McAlpin Square 2003 176,807 26 $1,214,646 $7.28 94.4% Kroger, US Post Office
Savannah Big Lots, In Fashion
Menswear Outlet
--------- -------- ----------- --------- ---------
Subtotal Georgia Properties 2,958,601 539 $24,721,341 $9.10 91.8%
(24 properties) --------- -------- ----------- --------- ---------
KENTUCKY (1 property)
Scottsville Square 2003 38,450 12 $212,861 $6.87 80.6% Hancock Fabrics, Zap
Bowling Green
--------- -------- ----------- --------- ---------
Subtotal Kentucky Properties 38,450 12 $212,861 $6.87 80.6%
(1 property) --------- -------- ----------- --------- ---------
LOUISIANA (15 properties)
Ambassador Row 2003 193,978 25 $1,509,855 $7.90 98.5% Hobby Lobby*, Conn's
Lafayette Appliances, Big Lots,
Chuck E. Cheese
Bluebonnet Village 2003 90,215 22 $610,915 $8.47 80.0% Matherne's
Baton Rouge
The Boulevard 2003 68,012 15 $340,837 $8.15 61.5% Piccadilly, Harbor Freight
Lafayette Tools
Country Club Plaza 2003 64,686 11 $352,235 $5.76 94.6% Winn-Dixie, Dollar
Slidell General
The Crossing 2003 113,989 15 $631,864 $5.62 98.7% Albertsons, A-1 Home
Slidell Appliance, Piccadilly
Elmwood Oaks 2003 133,995 9 $1,192,284 $9.58 92.9% Wal-Mart* (Academy
Hanahan Sports, Dollar Tree),
Advance Auto*
(Goodwill)
Grand Marche 2003 200,585 1 $27,500 $0.14 100.0% Academy Sports, JoAnn
(land lease) Fabrics
Lafayette
Millervillage 2003 94,559 14 $290,416 $8.12 37.8% Rite Aid
Baton Rouge
Pinhook Plaza 2003 194,725 31 $442,357 $8.48 26.8% Rite Aid
Lafayette
Plaza Acadienne 2003 105,419 8 $381,104 $3.62 100.0% Super 1 Store, Fred's,
Eunice Howard Brothers*
Sherwood South 2003 77,107 10 $462,699 $6.14 97.7% Piggly Wiggly*, Burke's
Baton Rouge Outlet, Harbor Freight
Tools, Blockbuster
Siegen Village 2003 174,578 22 $1,291,372 $8.15 90.8% Office Depot, Big Lots,
Baton Rouge Dollar Tree, Stage, Party
City
Tarpon Heights 2003 56,605 10 $262,268 $4.80 96.5% Eckerd, Stage, Dollar
Galliano General
19
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
Village at 2003 144,638 12 $1,106,635 $7.65 100.0% Service Merchandise*,
Northshore (Marshalls, Dollar Tree)
Slidell Kirschman's, Bed Bath &
Beyond
Wal-Mart 2003 54,223 1 $157,500 $2.90 100.0% Wal-Mart
Mathews
--------- -------- ----------- --------- ---------
Subtotal Louisiana Properties 1,767,314 206 $9,059,841 $6.10 84.0%
(16 properties) --------- -------- ----------- --------- ---------
MISSISSIPPI (1 property)
Shipyard Plaza 2003 66,857 7 $382,536 $5.72 100.0% Rite Aid, Big Lots
Pascagoula
--------- -------- ----------- --------- ---------
Subtotal Mississippi 66,857 7 $382,536 $5.72 100.0%
Properties (1 property) --------- -------- ----------- --------- ---------
NORTH CAROLINA
(12 properties)
Centre Pointe 2003 163,642 19 $714,150 $5.71 76.4% Wal-Mart*, (Belk's,
Plaza Goody's)
Asheville
Chestnut Square 2003 39,640 7 $261,660 $6.88 96.0% Food Lion*, Eckerd*,
Brevard (Dollar General)
Galleria 2003 92,114 40 $741,955 $9.39 85.7% Harris Teeter, Eckerd
Wrightsville Beach
Parkwest Crossing 2003 85,602 18 $843,220 $10.01 98.4% Food Lion
Durham
Plaza North 2003 47,240 9 $334,277 $7.26 97.5% Bi-Lo*, CVS Pharmacy
Hendersonville
Providence Square 2003 85,930 25 $664,123 $8.22 94.1% Harris Teeter*, Eckerd
Charlotte
Riverview 2003 127,106 11 $839,571 $7.20 91.7% Kroger, Upchurch Drugs,
Shopping Center Riverview Furniture
Durham
Salisbury 2003 82,578 17 $724,326 $9.22 95.2% Food Lion, CVS Pharmacy
Marketplace
Salisbury
Shelby Plaza 2003 103,200 8 $298,046 $3.13 92.2% Big Lots, Aaron
Shelby Rents*, (Hancock
Fabrics)
Stanley Market 2003 40,400 3 $220,692 $5.46 100.0% Winn-Dixie, Family
Place Dollar
Stanley
Thomasville 2003 148,754 12 $894,987 $6.02 100.0% Ingles, Kmart, CVS
Commons Pharmacy
Thomasville
Willowdale 2003 120,984 26 $970,076 $8.74 91.7% Harris Teeter, Carmike
Shopping Center Cinemas, Eckerd*
Durham (Family Dollar)
20
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
Subtotal North Carolina
Properties --------- -------- ----------- --------- ---------
(12 properties) 1,137,190 195 $7,507,083 $7.19 91.8%
--------- -------- ----------- --------- ---------
SOUTH CAROLINA
(6 properties)
Belfair Towne 2003 125,389 29 $1,621,157 $13.87 93.2% Kroger
Village
Bluffton
Lancaster Plaza 2003 77,400 4 $102,000 $1.44 91.5% Bi-Lo
Lancaster
Lancaster 2003 29,047 2 $30,012 $6.00 17.2%
Shopping Center
Lancaster
North Village 2003 60,356 14 $496,371 $8.22 100.0% Bi-Lo, Dollar General,
Center Gold's Gym
Durham
Spring Valley 2003 75,415 17 $657,127 $9.10 95.8% Bi-Lo, Eckerd
Columbia
Woodruff 2003 68,055 10 $669,405 $10.01 98.2% Publix
Greenville
Subtotal South Carolina --------- -------- ----------- --------- ---------
Properties
(6 properties) 435,662 76 $3,576,072 $9.12 90.0%
--------- -------- ----------- --------- ---------
TENNESSEE (2 properties)
Forrest Gallery 2003 214,450 30 $1,180,928 $5.60 98.4% Kroger, Wal-Mart*
Tullahoma (Tractor Supply, Goodwill,
Hastings Music)
Smyrna Village 2003 83,334 12 $582,528 $7.98 87.6% Kroger
Smyrna
Subtotal Tennessee properties --------- -------- ----------- --------- ---------
(2 properties) 297,784 42 $1,763,456 $6.21 95.4%
--------- -------- ----------- --------- ---------
TEXAS (30 properties)
Houston (16 properties)
Barker Cypress 2001 66,945 17 $778,239 $12.44 93.5% H.E.B.
Houston
Beechcrest 2001 90,647 16 $809,503 $8.93 100.0% Randall's* (Viet Ho),
Houston Walgreens*
Benchmark Crossing 2001 58,384 5 $708,130 $12.13 100.0% Bally's Fitness
Houston
Bissonnet 2001 15,542 8 $185,003 $16.17 73.6% Kroger (4),Blockbuster
Houston
Colony Plaza 2001 26,513 15 $455,101 $18.27 94.0% Albertsons (Velocity
Sugarland Sports)
Forestwood 2002 88,760 16 $986,838 $11.34 98.0% Kroger
Houston
21
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
Grogan's Mill 2001 118,493 26 $1,320,598 $11.85 94.0% Randall's* (99(cent)Store),
The Woodlands Petco
Hedwig 2001 69,504 13 $741,612 $14.31 74.5% Ross Dress For Less
Houston
Highland Square 2001 64,171 27 $1,089,298 $17.03 99.7%
Sugarland
Market at First 2001 107,301 35 $1,656,314 $15.91 97.0% Kroger, TJ Maxx, Eckerd
Colony
Houston
Mason Park 2001 160,047 39 $1,414,132 $11.89 74.3% Kroger, Walgreens*
Katy (Eloise Collectibles),
Palais Royal, Petco
Mission Bend 2001 131,575 27 $1,104,447 $9.02 93.1% Randall's, Remarkable
Houston Furniture
Spring Shadows 2001 106,995 18 $990,456 $9.54 97.1% H.E.B.
Houston
Steeplechase 2001 105,152 26 $1,095,948 $11.02 94.6% Randall's
Jersey Village
Wal-Mart Stores, 2003 53,571 1 $175,350 $3.27 100.0% Wal-Mart* (Sutherland
Inc. Lumber)
Marble Falls
Dallas (13 properties)
Green Oaks 2001 65,091 34 $611,168 $10.87 86.4% Kroger
Arlington
Melbourne Plaza(5) 2001 47,517 18 $470,945 $11.12 89.2%
Hurst
Minyard's 2001 65,295 2 $399,648 $6.12 100.0% Minyards/Sack N Save
Garland
Parkwood 2001 81,590 18 $1,013,125 $13.20 94.0% Albertsons, Planet Pizza
Plano
Plymouth Park East 2001 56,435 10 $235,585 $4.29 97.3% Kroger
Irving
Plymouth Park 2001 444,541 58 $1,641,884 $7.18 51.5% Blockbuster, Dollar
North General, Thrift Store, Post
Irving Office, Chateau Theatre,
Levines
Plymouth Park 2001 49,102 7 $236,555 $6.44 74.8% Betcha Bingo
South
Irving
Plymouth Park West 2001 178,930 15 $577,092 $3.52 91.7% Bargain City, Dollar Store,
Irving Fashion Depot
Richwood 2001 54,871 28 $512,083 $13.38 69.7% Albertsons(4), Blockbuster
Richardson
Rosemeade Park 2001 51,234 18 $431,716 $12.90 65.3% Kroger(4), Blockbuster
Carrolton
22
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
Sterling Plaza 2001 65,765 16 $754,740 $15.80 72.6% Bank One, Irving City
Irving Library
Townsend 2001 146,953 38 $1,126,713 $8.85 86.7% Albertsons(4), Bealls,
Desoto Victory Gym, Dollar
General
Village by the 2001 44,523 10 $680,922 $16.55 92.4% Petco, Movie Trading
Park
Arlington
San Antonio (2 properties)
Blanco Village 2002 108,325 16 $1,698,811 $15.68 100.0% H.E.B.
San Antonio
Wurzbach 2001 59,771 3 $170,729 $2.86 100.0% Albertsons*
San Antonio
--------- -------- ----------- --------- ---------
Subtotal Texas Properties 2,783,543 580 $24,072,685 $10.26 84.3%
(30 properties) --------- -------- ----------- --------- ---------
VIRGINIA (2 properties)
Smyth Valley 2003 126,841 14 $741,643 $5.85 100.0% Ingles, Wal-Mart
Crossing
Marion
Waterlick Plaza 2003 98,694 24 $681,667 $8.72 79.2% Kroger, CVS Drugs
Lynchburg
Subtotal Virginia Properties --------- -------- ----------- --------- ---------
(2 properties) 225,535 38 $1,423,310 $6.94 90.9%
--------- -------- ----------- --------- ---------
Total/Weighted Average
Supermarket and
Necessity-Oriented Retailer
Anchored Centers
(168 properties) 18,201,244 3,555 $156,722,144 $9.40 91.6%
---------- -------- ------------ --------- ---------
DEVELOPMENTS AND
REDEVELOPMENTS (14)
Ambassador Row 2003 158,783 30 $1,126,788 $8.75 81.1% Marshalls, Bed Bath &
Courtyard Beyond, Hancock Fabrics
Lafayette, LA
Bandera Festival 2001 195,438 34 $1,127,572 $10.91 52.9% Bealls, Eckerd*
San Antonio, TX (Scrapbook Haven),
Blockbuster
Cashmere(5) 2001 4.0 acres -- N/A N/A --
Port St. Lucie, FL
Copperfield 2001 132,960 33 $997,733 $12.77 58.8% JoAnn Fabrics
Houston, TX
CVS Plaza(6) 2003 Dev. 4.0 acres -- N/A N/A --
Miami, FL
23
GLA Annualized Average Minimum Percent
(Sq.Ft.)at Minimum Rent Rent Per Leased Leased at
Year Dec. 31 Number of as of December Sq. Ft. at Dec. 31, Anchor Stores and
Property Acquired 2003 Tenants(1) 31, 2003(2) Dec. 31, 2003 2003 Certain Tenants(3)
------------- -------- --------- ---------- -------------- --------------- --------- --------------------------
East Bay Plaza 1993 85,426 23 $503,009 $10.00 58.9% Albertsons(4), Family
Largo Dollar, Hollywood Video
Eustis Square 1993 126,791 27 $570,412 $6.72 67.0% Save-a-Lot, Walgreens*
Eustis (Bealls Outlet)
Gulf Gate Plaza 2003 201,620 21 $839,569 $6.50 64.0% Bealls Outlet, JoAnn
Naples Fabrics, Dockside Imp.,
Miramar Outparcel Held for 2.0 acres -- N/A N/A --
Miramar, FL Sale
Oakbrook 2003 Redev. 212,074 32 $1,943,143 $13.41 68.3% Publix, Duffy's,
Palm Beach Stein Mart, Eckerd
Gardens, FL
Venice Plaza 2003 159,473 18 $538,077 $5.23 64.6% Kash N Karry, TJ Maxx
Venice
Walden Woods 2003 Redev. 74,336 13 $395,702 $6.49 82.0% Walgreens, Dollar
Plant City, FL Tree, Aaron Rents
Waterstone(7) 2004 Dev. 12.0 acres -- N/A N/A --
Homestead, FL
Westbridge(8) 2005 Dev. 13.5 acres -- -- -- --
McDonough, GA
Total Developments & --------- -------- ----------- --------- ---------
Redevelopments (14) 1,346,901 231 $8,042,005 $9.10 65.6%
--------- -------- ----------- --------- ---------
Total Retail Properties --------- -------- ------------ --------- ---------
(182 properties) 19,548,145 3,786 $164,764,149 $9.38 89.8%
--------- -------- ------------ --------- ---------
Other Properties
- ----------------
4101 South I-85 2003 188,513 10 $386,977 -- 73.7% -
Industrial property
Charlotte, NC
Mandarin 1994 52,880 534 N/A N/A 97.7% -
Mini-storage(9)
Jacksonville, FL
Southwest 2001 93,402 18 $533,890 -- 52.8% Walgreens
Walgreens**
Phoenix, AZ
Grand Total ---------- -------- ----------- --------- ---------
(185 properties) 19,882,940 4,348 $165,685,016 N/A 89.5%
---------- -------- ----------- --------- ---------
- -----------------------------
(1) Number of tenants includes both occupied and vacant units.
(2) Calculated by annualizing the tenant's monthly base rent payment at
December 31, 2003, excluding expense reimbursements, percentage rent
payments and other charges.
(3) Includes supermarket tenants and certain other tenants, as well as,
occupants that are on an adjacent or contiguous, separately owned parcel
and do not pay any rent or expense recoveries.
(4) This tenant is on adjacent or contiguous, separately owned parcel.
(5) This development property is a 4.0 acre site located adjacent to our
Cashmere retail center.
(6) This development property is a 4.0 acre site located at the northeast
corner of S.W. 147th Avenue and Coral Way. Construction has commenced on a
25,000 square foot drugstore anchored shopping center.
(7) This development property is a 12.0 acre site located 25 miles south of
Miami, FL. We expect to develop a supermarket-anchored shopping center in
2004.
(8) This development property is a 13.5 acre site located in Georgia. We expect
to develop a supermarket-anchored center in 2005.
(9) There are 534 storage spaces available at this property.
24
* Indicates a tenant that has closed its store and ceased to operate at the
property, but continues to pay rent under the terms of its lease. The
sub-tenant, if any, is shown in parentheses.
** This property was sold in February 2004.
Most of our leases provide for the monthly payment in advance of fixed
minimum rentals, the tenants' pro rata share of ad valorem taxes, insurance
(including fire and extended coverage, rent insurance and liability insurance)
and common area maintenance for the property. They may also provide for the
payment of additional rentals based on a percentage of the tenants' sales.
Utilities are generally paid directly by tenants except where common metering
exists with respect to a property. In this case, we make the payments for the
utilities and are reimbursed by the tenants on a monthly basis. Generally, our
leases prohibit the tenant from assigning or subletting its space. They also
require the tenant to use its space for the purpose designated in its lease
agreement and to operate its business on a continuous basis. Some of the lease
agreements with major tenants contain modifications of these basic provisions in
view of the financial condition, stability or desirability of those tenants.
Where a tenant is granted the right to assign its space, the lease agreement
generally provides that the original lessee will remain liable for the payment
of the lease obligations under that lease agreement.
Major Tenants
The following table sets forth as of December 31, 2003 the gross leasable
area, or "GLA" of our existing properties leased to tenants in supermarket
retail properties:
Supermarket Other Anchor Non-anchor
Anchor Tenants Tenants Tenants Total
-------------- ----------- ----------- ----------
Leased GLA (sq. ft.) 5,475,680 5,530,083 6,555,469 17,561,232
Percentage of Total Leased GLA 31.2% 31.5% 37.3% 100%
The following table sets forth as of December 31, 2003 the annual minimum
rent at expiration of our existing properties attributable to tenants in retail
properties:
Supermarket Other Anchor Non-anchor
Anchor Tenants Tenants Tenants Total
-------------- ----------- ----------- ----------
Annual Minimum Rent ("AMR") $ 36,441,509 $ 36,647,127 $ 97,193,231 $170,281,867
Percentage of Total AMR 21.4% 21.5% 57.1% 100%
The following table sets forth as of December 31, 2003 information
regarding leases with our ten largest tenants in retail properties:
Annualized Percent of Average
Minimum Aggregate Annual
Percent Rent at Annualized Minimum
Number GLA of Total December 31, Minimum Rent per
Tenant of Leases (square feet) GLA 2003 Rent Square Foot
- --------------------------- --------- ------------- ---------- --------------- ------------ --------------
Publix..................... 45 2,004,580 10.3% $ 14,465,152 8.8% $ 7.22
Kroger..................... 16 863,800 4.4% 6,641,730 4.0% 7.69
Winn-Dixie................. 17 761,143 3.9% 4,949,604 3.0% 6.50
Wal-Mart................... 11 834,994 4.3% 3,687,045 2.2% 4.42
Kmart...................... 6 524,937 2.7% 2,795,865 1.7% 5.33
Blockbuster................ 28 164,370 0.8% 2,473,635 1.5% 15.05
Eckerd..................... 27 267,696 1.4% 2,340,273 1.4% 8.74
Food Lion/Kash N Karry..... 8 297,802 1.5% 1,962,601 1.2% 6.59
Bed Bath & Beyond.......... 6 202,658 1.0% 1,930,031 1.2% 9.52
H.E. Butt Grocery.......... 3 178,608 0.9% 1,793,855 1.1% 10.04
------ ------------- ---------- --------------- ------------ --------------
Subtotal top ten tenants.... 167 6,100,588 31.2% $ 43,039,791 26.1% $ 7.06
====== ============= ========== =============== ============ ==============
25
Lease Expirations
The following tables sets forth the anticipated expirations of our tenant
leases in retail properties as of December 31, 2003 for each year from 2004
through 2013 and thereafter:
All Tenants
Percent of
Aggregate Average Annual
Annualized Annualized Minimum Rent per
Number of GLA Percent of Minimum Rent Minimum Rent Square Foot at
Year Leases (square feet) Total GLA at Expiration at Expiration Expiration
- -------------------- ------------ ------------- ------------- ----------------- ----------------- -------------------
M-T-M 139 256,499 1.3% $ 2,070,839 1.2% $ 8.07
2004 683 1,832,226 9.4% 20,380,475 12.0% 11.12
2005 692 1,934,905 9.9% 22,704,655 13.3% 11.73
2006 636 2,010,762 10.3% 23,909,760 14.0% 11.89
2007 391 1,805,775 9.2% 18,987,563 11.2% 10.51
2008 370 1,552,500 7.9% 17,767,725 10.4% 11.44
2009 87 1,113,334 5.7%