<SUBMISSION>
<ACCESSION-NUMBER>0000950116-04-003322
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>7
<PERIOD>20040930
<FILING-DATE>20041109
<DATE-OF-FILING-DATE-CHANGE>20041109
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ACADIA REALTY TRUST
<CIK>0000899629
<ASSIGNED-SIC>6798
<IRS-NUMBER>232715194
<STATE-OF-INCORPORATION>MD
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-12002
<FILM-NUMBER>041129599
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>20 SOUNDVIEW MARKETPLACE
<STREET2>PO BOX 1679
<CITY>PORT WASHINGTON
<STATE>NY
<ZIP>11050
<PHONE>5167678830
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>600 THIRD AVE
<STREET2>PO BOX 1679
<CITY>KINGSTON
<STATE>PA
<ZIP>18704
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>MARK CENTERS TRUST
<DATE-CHANGED>19930329
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>ten-q.htm
<DESCRIPTION>10-Q
<TEXT>
<html>
<head><title>
Prepared and filed by St Ives Burrups
</title>
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<body bgcolor="#FFFFFF">



<page>
<br>


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<p align="center"> <b><font size=4 face="TimesNewRoman,Bold,Times New Roman,Times,serif">UNITED
  STATES </font></b><br>
<font size="4" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>SECURITIES
      AND EXCHANGE COMMISSION</b> </font><br>
  <b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Washington,
DC 20549</font></b></p>
<hr align="center" width="150" size="2" noshade>
<p align="center"><b><font size=5 face="TimesNewRoman,Bold,Times New Roman,Times,serif">FORM
  10-Q</font></b></p>
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  <tr valign="top">
    <td width="17%">&nbsp;</td>
    <td width="3%"> <img src="tickedbox.gif"></td>
    <td> <b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934 </font></b> </td>
  </tr>
</table>
<p align="center">
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">For the quarterly period ended September 30, 2004 </font>
</p>
<p align="center"> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">OR
  </font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="17%">&nbsp;</td>
    <td width="3%"> <img src="emptybox.gif" width="12" height="12"></td>
    <td> <b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE</font></b> <b><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif">
      SECURITIES EXCHANGE ACT OF 1934 </font></b> </td>
  </tr>
</table>
<p align="center"> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">For
  the transition period from _______________ to _______________</font> </p>
<p align="center"> <i><font size=2 face="TimesNewRoman,Italic,Times New Roman,Times,serif">Commission
  File Number 1-12002 </font></i> </p>
<p align="center"> <b><font size=5 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
  REALTY TRUST </font></b> <br>
  <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(Exact name of
  registrant in its charter) </font></p>
<hr align="center" width="150" size="2" noshade>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr align="center">
    <td width="60%">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="center">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"><b>MARYLAND</b></font></td>
    <td width=40%><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"><b>23-2715194</b></font></td>
  </tr>
  <tr align="center">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(State or
      other jurisdiction of</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(I.R.S.
      Employer</font></td>
  </tr>
  <tr align="center">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">incorporation
      or organization)</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Identification
      No.)</font></td>
  </tr>
  <tr align="center">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="center">
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">1311
      MAMARONECK AVENUE, SUITE 260, WHITE PLAINS, NY</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">10605</font></b></td>
  </tr>
  <tr align="center">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(Address
      of principal executive offices)</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(Zip Code)</font></td>
  </tr>
</table>
<p align="center"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">(914)
  288-8100</font></b><br>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(Registrant&#146;s
  telephone number, including area code) </font> </p>
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">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. </font>
</p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="49%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">YES</font>
      <img src="tickedbox.gif"></td>
    <td>&nbsp;</td>
    <td width="49%"> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">NO
      </font><img src="emptybox.gif" width="12" height="12"> </td>
  </tr>
</table>
<p> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Indicate by
  check mark whether the registrant is an accelerated filer (as defined in Exchange
  Act Rule 12b-2).</font> </p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="49%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">YES</font>
      <img src="tickedbox.gif"></td>
    <td>&nbsp;</td>
    <td width="49%"> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">NO
      </font><img src="emptybox.gif" width="12" height="12"> </td>
  </tr>
</table>
<p> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">As of November
  5, 2004, there were 29,299,224 common shares of beneficial interest, par value
  $.001 per share, outstanding.</font> </p>
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    <td height="4" valign="bottom" bgcolor="#000000"></td>
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<div style="page-break-before:always"></div>
<a name="index"></a><page>
<p align="center"> <b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
  REALTY TRUST AND SUBSIDIARIES<br>
  </font></b><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">FORM
  10-Q<br>
  </font></b><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">INDEX
  </font></b> </p>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
    <td></td>
    <td> </td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Page</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><hr align="center" width="100%" size="1" noshade></td>
  </tr>
  <tr>
    <td><b><a href="#p3"><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Part
      I:</font></a></b></td>
    <td><b><a href="#p3"><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Financial
      Information</font></a></b></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><a href="#p3"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Item
      1.</font></a></td>
    <td><a href="#p3"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Financial
      Statements (unaudited)</font></a></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="6%">&nbsp;</td>
    <td><a href="#p3"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Consolidated
      Balance Sheets as of September 30, 2004 and December 31, 2003</font></a></td>
    <td width=5% align="center"><a href="#p3"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3</font></a></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><a href="#p4"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Consolidated
      Statements of Income for the three and nine months ended September 30, 2004
      and 2003</font></a></td>
    <td align="center"><a href="#p4"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4</font></a></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><a href="#p5"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Consolidated
      Statements of Cash Flows for the nine months ended September 30, 2004 and
      2003</font></a></td>
    <td align="center"><a href="#p5"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5</font></a></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><a href="#p6a">
	<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Notes
      to Consolidated Financial Statements</font></a></td>
    <td align="center"><a href="#p6a"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6</font></a></td>
  </tr>
  <tr>
    <td><a href="#p18"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Item
      2.</font></a></td>
    <td><a href="#p18"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Management&#146;s
      Discussion and Analysis of Financial Condition and Results of Operations</font></a></td>
    <td align="center"><a href="#p18"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">18</font></a></td>
  </tr>
  <tr>
    <td><a href="#p26"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Item
      3.</font></a></td>
    <td><a href="#p26"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Quantitative
      and Qualitative Disclosure of Market Risk</font></a></td>
    <td align="center"><a href="#p26"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">26</font></a></td>
  </tr>
  <tr>
    <td><a href="#p27"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Item
      4.</font></a></td>
    <td><a href="#p27"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Controls
      and Procedures</font></a></td>
    <td align="center"><a href="#p27"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">27</font></a></td>
  </tr>
  <tr>
    <td><b><a href="#p27"><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Part
      II:</font></a></b></td>
    <td><b><a href="#p27"><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Other
      Information</font></a></b></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><a href="#p27a"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Item
      6.</font></a></td>
    <td><a href="#p27a"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Exhibits</font></a></td>
    <td align="center"><a href="#p27a"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">27</font></a></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><a href="#p28"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Signatures</font></a></td>
    <td align="center"><a href="#p28"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">28</font></a></td>
  </tr>
</table>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">2</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p3"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Part I.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Information</font></b>
</p>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements </font></b>
</p>
<p align="center">
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA REALTY TRUST AND SUBSIDIARIES</font></b>
<br>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">CONSOLIDATED
  BALANCE SHEETS </font></b> <br>
  <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(in thousands,
  except per share amounts) </font> </p>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr align="center">
    <td rowspan="3"><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">&nbsp;</font></td>
    <td rowspan="3"><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">&nbsp;</font></td>
    <td><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September
      30,</font></b></td>
    <td rowspan="3"><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">&nbsp;</font></td>
    <td rowspan="3"><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">&nbsp;</font></td>
    <td><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">&nbsp;</font></td>
    <td rowspan="3"><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">&nbsp;</font></td>
  </tr>
  <tr align="center">
    <td><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">December
      31,</font></b></td>
  </tr>
  <tr align="center">
    <td><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">(unaudited)</font></b></td>
    <td><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ASSETS</font></b></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Real estate:</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Land</font></td>
    <td width="1%" align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width="10%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">54,890</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%" align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width="10%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">54,890</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Buildings
      and improvements</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">373,332</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">366,879</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Construction
      in progress</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,295</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,859</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">432,517</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">427,628</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Less: accumulated
      depreciation</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(111,103</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(101,090</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net real
      estate</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">321,414</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">326,538</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Cash and
      cash equivalents</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">13,091</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">14,663</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Cash in
      escrow</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,168</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,342</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Investments
      in and advances to unconsolidated partnerships</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">47,289</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">13,630</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Investment
      in management contracts</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,568</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Rents receivable,
      net</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">12,617</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10,394</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Notes receivable</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,760</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,586</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Prepaid
      expenses</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,464</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,127</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Deferred
      charges, net</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">13,439</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,173</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other assets</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,367</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,731</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">433,177</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">388,184</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">LIABILITIES
      AND SHAREHOLDERS&#146; EQUITY</font></b></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Mortgage
      notes payable</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">225,004</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">190,444</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Accounts
      payable and accrued expenses</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,580</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,804</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Dividends
      and distributions payable</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,871</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,619</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Due to related
      parties</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">18</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">48</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest
      rate swap payable</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,997</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,044</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other liabilities</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,506</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,806</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total liabilities</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">243,976</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">208,765</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minority
      interest in Operating Partnership</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,663</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,875</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minority
      interests in majority-owned partnerships</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,798</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,810</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total minority
      interests</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,461</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,685</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Shareholders&#146;
      equity:</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Common shares</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">29</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">27</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Additional
      paid-in capital</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">188,564</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">177,891</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Accumulated
      other comprehensive loss</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(4,174</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(5,505</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Deficit</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2,679</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2,679</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total shareholders&#146;
      equity</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">181,740</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">169,734</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">433,177</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">388,184</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
</table>
<p align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">See
  accompanying notes</font></p>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">3</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p4"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p align="center">
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
REALTY TRUST AND SUBSIDIARIES</font></b><br>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">CONSOLIDATED STATEMENTS OF INCOME </font></b>
  <br>
  <b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003<br>
  </font></b><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(unaudited)<br>
  </font><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(in thousands, except per share amounts) </font>
</p>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
<tr>
   <td><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td colspan="4" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Three months ended</font></b></td>
   <td><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td colspan="4" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Nine months ended</font></b></td>
   <td><font size="1">&nbsp;</font></td>
</tr>
<tr>
   <td><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td colspan="4" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September 30,</font></b></td>
   <td><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td colspan="4" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September 30,</font></b></td>
   <td><font size="1">&nbsp;</font></td>
</tr>
<tr>
  <td><font size="1">&nbsp;</font></td>
  <td><hr noshade size=1></td>
  <td colspan="4" align="center"><hr noshade size=1></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr noshade size=1></td>
  <td colspan="4" align="center"><hr noshade size=1></td>
  <td><font size="1">&nbsp;</font></td>
</tr>
<tr>
   <td><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
   <td><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
   <td><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
   <td><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
   <td><font size="1">&nbsp;</font></td>
</tr>
<tr>
   <td><font size="1">&nbsp;</font></td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td><font size="1">&nbsp;</font></td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td><font size="1">&nbsp;</font></td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td><font size="1">&nbsp;</font></td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td><font size="1">&nbsp;</font></td></tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Revenues</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minimum rents</font></div></td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">13,124</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">12,635</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1%><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> $</font></td>
   <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">39,304</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">37,350</font></td>
   <td width=2%>&nbsp;</td>
</tr>
<tr>
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Percentage rents</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">147</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">156</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">569</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">545</font></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Expense reimbursements</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,385</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,012</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10,188</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,625</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other property income</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">171</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">169</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">499</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">481</font></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Management fee income</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,548</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">489</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,100</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,418</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest income</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">318</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">243</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">918</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">657</font></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">14</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">210</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,218</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total revenues</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">18,707</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">16,704</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">54,788</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">51,294</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Operating Expenses</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Property operating</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,316</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,957</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,860</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10,700</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Real estate taxes</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,461</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,288</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,900</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,297</font></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">General and administrative</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,674</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,786</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,585</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,931</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation and amortization</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,928</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,788</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,905</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,277</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total operating expenses</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">13,379</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,819</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">38,250</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">36,205</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Operating income</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,328</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,885</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">16,538</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">15,089</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><div style="margin-left:3%; text-indent:-3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Equity in
    earnings of unconsolidated partnerships</font></div></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">483</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">629</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,533</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,777</font></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Gain (loss) on sale of land</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">423</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(25</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">931</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,187</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest expense</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2,958</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2,882</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(8,464</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(8,413</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minority
       interests</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(381</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(183</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,029</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,310</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net income</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,895</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,424</font></td>
   <td>&nbsp;</td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> $</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,509</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,330</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Earnings per share</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Basic earnings per share</font></div></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.10</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.09</font></td>
   <td>&nbsp;</td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> $</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.33</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.32</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Diluted earnings per share</font></div></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.10</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.09</font></td>
   <td>&nbsp;</td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> $</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.32</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.31</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
</tr>
</table>
<p align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">See
    accompanying notes</font>
</p>
<p align="center"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">4</font>
</p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p5"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p align="center"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
REALTY TRUST AND SUBSIDIARIES</font></b><br>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">CONSOLIDATED STATEMENTS OF CASH FLOWS<br>
  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003<br>
</font></b><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(in thousands)</font></p>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
<tr>
   <td><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September 30,</font></b></td>
   <td align="center"><font size="1">&nbsp;</font></td>
   <td align="center"><font size="1">&nbsp;</font></td>
   <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September 30,</font></b></td>
   <td><font size="1">&nbsp;</font></td>
</tr>
<tr>
   <td><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
   <td align="center"><font size="1">&nbsp;</font></td>
   <td align="center"><font size="1">&nbsp;</font></td>
   <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
   <td><font size="1">&nbsp;</font></td>
</tr>
<tr>
  <td><font size="1">&nbsp;</font></td>
  <td><hr noshade size=1></td>
  <td><hr noshade size=1></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr noshade size=1></td>
  <td><hr noshade size=1></td>
  <td><font size="1">&nbsp;</font></td>
</tr>
<tr>
   <td><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td colspan="4" align="center"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">(unaudited)</font></td>
   <td><font size="1">&nbsp;</font></td></tr>
<tr>
   <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">CASH FLOWS FROM OPERATING ACTIVITIES:</font></b></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net income</font></td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,509</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,330</font></td>
   <td width=2%>&nbsp;</td>
</tr>
<tr>
   <td><div style="margin-left:0%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Adjustments
         to reconcile net income to net cash provided by operating activities:</font></div></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation and amortization</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,905</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,277</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Gain on sale of land</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(931</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,187</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minority interests</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,029</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,310</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Equity in earnings of unconsolidated partnerships</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,533</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,777</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Provision for bad debts</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">597</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">209</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Changes in assets and liabilities:</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Funding of escrows, net</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(826</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(630</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Rents receivable</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(3,264</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2,149</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Prepaid expenses</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,337</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,164</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other assets</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(974</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(681</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Accounts payable and accrued expenses</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,030</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">583</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Due to related parties</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(30</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,166</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other liabilities</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(300</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(331</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net cash provided by operating activities</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">15,875</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">12,624</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
</tr>
<tr>
   <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">CASH FLOWS FROM INVESTING ACTIVITIES:</font></b></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Expenditures for real estate and improvements</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(5,053</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(6,990</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Payment of accrued expense related to redevelopment project</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2,488</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Investment in and advances to unconsolidated partnerships</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(33,353</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(5,730</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Distributions from unconsolidated partnerships</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,702</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,059</font></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Collections of notes receivable</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,904</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,232</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Payment of deferred leasing costs</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,759</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(377</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Advances of notes receivable</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(10,101</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Proceeds from sale of land</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">931</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net cash used in investing activities</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(43,729</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(11,294</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
</tr>
<tr>
   <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">CASH FLOWS FROM FINANCING ACTIVITIES:</font></b></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Principal payments on mortgages</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(41,691</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(24,584</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Proceeds received on mortgage notes</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">76,251</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">21,000</font></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Payment of deferred financing and other costs</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,605</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(233</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Dividends paid</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(13,787</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(10,919</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Distributions to minority interests in Operating Partnership</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(353</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,042</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Distributions on preferred Operating Partnership Units</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(196</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(149</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Distributions to minority interests in majority-owned partnerships</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(549</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(940</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Common Shares issued under Employee Stock Purchase Plan</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">64</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Settlement of options to purchase Common Shares</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(67</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Exercise of options to purchase Common Shares</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,215</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net cash provided by (used in) financing activities</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">26,282</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(16,867</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Decrease in cash and cash equivalents</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,572</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(15,537</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Cash and cash equivalents, beginning of period</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">14,663</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">45,168</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=1>
  </td>
  <td><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Cash and cash equivalents, end of period</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">13,091</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">29,631</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Supplemental disclosure of cash flow information:</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:0%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Cash
    paid during the period for interest, net of amounts capitalized of $236 and
    $324, respectively</font></div></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,382</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,360</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
</tr>
<tr>
   <td><div style="margin-left:0%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Supplemental
    disclosure of non-cash investing and financing activities:</font></div></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left: 3%; text-indent: -3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Acquisition
         of management contract rights through issuance of preferred Operating
    Partnership Units</font></div></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,000</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
  <td><hr noshade size=2>
  </td>
  <td><hr noshade size=2>
  </td>
  <td>&nbsp;</td>
</tr>
</table>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">5</font></p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<a name="p6"></a><page>
<p><a href="#index"><font size="2">Back to Index</font></a></p>


<p align="center"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif"><a name="p6a"></a>ACADIA
REALTY TRUST AND SUBSIDIARIES</font></b><br>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
  </font></b><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">SEPTEMBER 30, 2004<br>
  </font></b><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(in thousands, except per share amounts) </font>
</p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">1.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">THE
    COMPANY </font></b> </td>
  </tr>
</table>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Acadia Realty Trust (the &#147;Company&#148;) is a fully integrated and self-managed real estate investment trust (&#147;REIT&#148;) focused primarily on the ownership, acquisition, redevelopment and management of neighborhood and community shopping centers. </font>
</p>
</div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">All of the Company&#146;s assets are held by, and all of its operations are conducted through, Acadia Realty Limited Partnership (the &#147;Operating Partnership&#148; or &#147;OP&#148;) and its majority-owned partnerships. As of September 30, 2004, the Company controlled 99% of the Operating Partnership as the sole general partner. </font>
</p>
</div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company operates
70 properties, which it owns or has an ownership interest in, consisting of 68
neighborhood and community shopping centers and two multi-family properties,
principally located in the Northeast, Mid-Atlantic and Midwest regions of the
United States. </font>
</p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">BASIS
    OF PRESENTATION</font></b></td>
  </tr>
</table>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The consolidated financial statements include the consolidated accounts of the Company and its majority-owned partnerships, including the Operating Partnership, and have been prepared in accordance with accounting principles generally accepted in the United States (&#147;GAAP&#148;) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Non-controlling investments in partnerships are accounted for under the equity method of accounting as the Company exercises significant influence. The information furnished in the accompanying consolidated financial statements reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of the aforementioned consolidated financial statements for the interim periods. </font>
</p>
</div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Operating results for the nine months ended September 30, 2004 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2004. For further information refer to the consolidated financial statements and accompanying footnotes included in the Company&#146;s Annual Report on Form 10-K for the year ended December 31, 2003. </font>
</p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">3.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">LAND
    SALE </font></b></td>
  </tr>
</table>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In connection with
the prior year sale of a contract to purchase land in Bethel, Connecticut, to
the Target Corporation, the Company received additional sales proceeds during
the quarter and nine months ended September 30, 2004 of $423 and $931, respectively. Of these proceeds,
$212 and $466, respectively, were distributed to the Company&#146;s joint venture
partner
in
the
sale and are a component of minority interest in the accompanying consolidated
financial
statements. </font>
</p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">4.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">EARNINGS
    PER COMMON SHARE </font></b></td>
  </tr>
</table>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Basic earnings per share was determined by dividing the applicable net income to common shareholders for the period by the weighted average number of common shares of beneficial interest (&#147;Common Shares&#148;) outstanding during each period consistent with SFAS No. 128. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue Common Shares were exercised or converted into Common Shares or resulted in the issuance of Common Shares that then shared in the earnings of the Company. The following table sets forth the computation of basic and diluted earnings per share from continuing operations for the periods indicated. </font>
</p>
</div>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">6</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p7"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p align="center"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
  REALTY TRUST AND SUBSIDIARIES</font></b><br>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">NOTES
         TO CONSOLIDATED FINANCIAL STATEMENTS</font><br>
  </b> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(in thousands,
    except per share amounts)</font></p>
<table width="100%%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%" valign="top"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">4.</font></b></td>
    <td valign="top"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">EARNINGS
      PER COMMON SHARE (continued)</font></b></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
</table>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="5" align="center"><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Three
      months ended</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan=4 align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Nine
      months ended</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="5" align="center"><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September
      30,</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan=4 align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September
      30,</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td colspan="4" align="center"><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td colspan="4" align="center"><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Numerator:</font></b></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Income
      from continuing operations &#8211; basic and diluted</font></td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,895</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,424</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,509</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,330</font></td>
    <td width=2%>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Denominator:</font></b></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Weighted
      average shares &#150; basic earnings per share</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">29,254</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">27,236</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">28,692</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">26,338</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Effect of
      dilutive securities:</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Employee
      stock options</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">594</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">769</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">697</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">509</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Denominator
      for diluted earnings per share</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">29,848</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">28,005</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">29,389</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">26,847</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Basic earnings
      per share from continuing operations</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.10</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.09</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.33</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.32</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Diluted
      earnings per share from continuing operations</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.10</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.09</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.32</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.31</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The effect
    of the conversion of common units in the Operating Partnership (&#147;Common
    OP Units&#148;) is not reflected in the above table as they are exchangeable
    for Common Shares on a one-for-one basis. The income allocable to such units
    is allocated on this same basis and reflected as minority interest in the
    accompanying consolidated financial statements. As such, the assumed conversion
    of these units would have no net impact on the determination of diluted earnings
    per share. The effect of the conversion of Series A and B Preferred OP Units
    (&#147;Preferred OP Units&#148;) is not reflected in the above table as such
    conversion would be anti-dilutive. </font> </p>
</div>
<table width="100%%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%" valign="top"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">5.</font></b></td>
    <td valign="top"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">STOCK-BASED
      COMPENSATION</font></b></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">Effective
    January 1, 2002, the Company adopted the fair value method of recording stock-based
    compensation contained in SFAS No. 123, &#147;Accounting for Stock-Based Compensation&#148;.
    As such, stock based compensation awards granted after December 31, 2001 have
    been expensed over the vesting period based on the fair value at the date
    the stock-based compensation was granted. Prior to January 1, 2002, the Company
    had applied the intrinsic value method as defined in Accounting Principles
    Board Opinion No. 25, &#147;Accounting for Stock Issued to Employees&#148;
    and related Interpretations, in accounting for stock-based compensation plans.
    The Company elected the prospective method whereby compensation expense is
    recognized only for those options granted, modified or settled on or after
    January 1, 2002. </font> </p>
</div>
<div style="text-indent:3%">
  <p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The following
    table illustrates the effect on net income and earnings per share if the Company
    had applied the fair value based method of accounting for stock-based employee
    compensation for vested stock options granted prior to January 1, 2002. As
    all the options granted prior to this date were fully vested as of December
    31, 2003, there is no impact reflected on periods after December 31, 2003.
    </font> </p>
</div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td align="center" colspan=2><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Three
      months</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Nine
      months</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ended
      September 30,</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ended
      September 30,</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net income:</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">As reported</font></td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,424</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,330</font></td>
    <td width=2%>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Pro forma</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,415</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,303</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Basic earnings
      per share</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">As reported</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.09</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.32</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Pro forma</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.09</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.32</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Diluted
      earnings per share</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">As reported</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.09</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.31</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Pro forma</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.09</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.31</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
</table>
<p align="center"> <font size="2" face="TimesNewRoman,Times New Roman,Times,serif">7</font></p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p8"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p align="center"> <b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
  REALTY TRUST AND SUBSIDIARIES</font></b><br>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>
  </font></b><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> (in
    thousands, except per share amounts) </font> </p>
<table width="100%%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%" valign="top"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">6.</font></b></td>
    <td valign="top"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">COMPREHENSIVE
      INCOME</font></b></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The following
    table sets forth comprehensive income for the three months and nine months
    ended September 30, 2004 and 2003:</font></p>
</div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="5" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Three
      months ended</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="5" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Nine
      months ended</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="5" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September
      30,</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="5" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September
      30,</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="5" align="right"><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="5" align="right"><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="right"><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="right"><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="right"><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2"><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net income</font></td>
    <td width=1% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,895</font></td>
    <td width=2% bgcolor="#eeeeee">&nbsp;</td>
    <td width=1% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,424</font></td>
    <td width=2% bgcolor="#eeeeee">&nbsp;</td>
    <td width=1% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,509</font></td>
    <td width=2% bgcolor="#eeeeee">&nbsp;</td>
    <td width=1% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,330</font></td>
    <td width=2% bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other comprehensive
         income (loss) (1)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,968</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,609</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,331</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">322</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td align="right"> <hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Comprehensive
      income</font></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">927</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,033</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10,840</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,652</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td align="right"> <hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%" valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" valign="top"><hr align="left" width="100" size=1 noshade></td>
  </tr>
  <tr>
    <td colspan="2" valign="top"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">Notes:</font></td>
  </tr>
  <tr>
    <td valign="top"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">(1)</font></td>
    <td valign="top"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">Relates
      to the changes in the fair value of derivative instruments accounted for
      as cash flow hedges.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">The following
    table sets forth the change in accumulated other comprehensive loss for the
    nine months ended September 30, 2004:</font> </p>
</div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Balance
      at December 31, 2003</font></td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,505</font></td>
    <td width=2%>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Unrealized gain on valuation of swap agreements</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,331</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr>
    <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
</tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Balance
      at September 30, 2004</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,174</font></td>
    <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
</table>
<div style="text-indent:3%">
  <p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">As of September
    30, 2004, the balance in accumulated other comprehensive loss was comprised
    of net unrealized losses on the valuation of swap agreements. </font> </p>
</div>
<table width="100%%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%" valign="top"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">7.</font></b></td>
    <td valign="top"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">SHAREHOLDERS&#146;
      EQUITY AND MINORITY INTERESTS</font></b></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The following
    table summarizes the change in the shareholders&#146; equity and minority
    interests since December 31, 2003:</font></p>
</div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr align="center" valign="bottom">
    <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td colspan="2"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Shareholders&#146;<br>
    </font></b><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Equity</font></b></td>
    <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td colspan="2"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Minority
      Interest<br>
    </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">in
      Operating<br>
    </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Partnership
    (1)</font></b></td>
    <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td colspan=2><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Minority
      Interest<br>
    </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">in
      majority-<br>
      owned<br>
    </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Partnerships</font></b></td>
    <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan=2><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Balance
      at December 31, 2003</font></td>
    <td width="1%" align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width="8%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">169,734</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%" align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width="8%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,875</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%" align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width="8%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,810</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Conversion
      of 746,762 Common OP Units into</font>&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Common
      Shares by minority interests</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,396</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(6,396</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Issuance
      of Series B Preferred OP Units</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,000</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Issuance
      of Common Stock to Trustees</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">73</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Dividends
      and distributions declared of $0.48 per Common Share</font>&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">and
      Common OP Unit</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(14,107</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(233</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Cash flow
      distribution</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(84</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net income
      for the period January 1 through September 30, 2004</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,509</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">244</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">72</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other comprehensive
      income &#150; Unrealized gain on valuation of</font>&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">swap
      agreements</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,331</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">173</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Employee
      stock-based compensation</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">730</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Settlement
      of options to purchase Common Shares</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(67</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Exercise
      of options to purchase Common Shares</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,141</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Balance
      at September 30, 2004</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">181,740</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,663</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,798</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%" valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" valign="top"><hr align="left" width="100" size=1 noshade></td>
  </tr>
  <tr>
    <td colspan="2" valign="top"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">Notes:</font></td>
  </tr>
  <tr>
    <td valign="top"><font size="1" face="TimesNewRoman,Times New Roman,Times,serif">(1)</font></td>
    <td valign="top"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">Net
      income attributable to minority interest in the Operating Partnership and
      distributions do not include a distribution on Series A and Series B Preferred
      OP Units totaling $248.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">Minority
    interest in the Operating Partnership represent (i) the limited partners&#146;
    interest of 392,255 and 1,141,317 Common OP Units at September 30, 2004 and
    2003, respectively, (ii) 1,580 and 2,212 Series A Preferred OP Units at September
    30, 2004 and 2003, respectively, with a nominal value of $1,000 per unit,
    which are entitled to a preferred quarterly distribution of $22.50 per unit
    (9% annually) and (iii) 4,000 Series B Preferred OP Units at September 30,
    2004 with a nominal value of $1,000 per unit, which are entitled to a preferred
    quarterly distribution of $13.00 per unit (5.2% annually). Minority interests
    in majority-owned partnerships represent third-party interests in four partnerships
    in which the Company has a majority ownership position. </font> </p>
</div>
<p align="center"> <font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
  8</font></p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p9"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p align="center"> <b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
  REALTY TRUST AND SUBSIDIARIES</font></b><br>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>
  </font></b><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(in
    thousands, except per share amounts) </font> </p>
<table width="100%%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%" valign="top"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">7.</font></b></td>
    <td valign="top"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">SHAREHOLDERS&#146;
      EQUITY AND MINORITY INTERESTS (continued)</font></b></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">Certain limited
    partners converted 746,762 Common OP Units into Common Shares on a one-for-one
    basis during the nine months ended September 30, 2004. </font> </p>
</div>
<div style="text-indent:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In
  January 2004, the Company issued $4,000 (4,000 Series B Preferred OP Units with
  a stated value of $1,000 each) of Series B Preferred OP Units in consideration
  for the acquisition of certain management contract rights. The Series B Preferred
  OP Units are entitled to a preferred quarterly distribution of $13.00 per unit
  (5.2% annually). The Company&#146;s Board of Trustees approved a waiver on February
  24, 2004, which allows the holder to redeem 1,500 Series B Preferred OP Units
  at any time for cash. As of September 30, 2004, none of these units have been
  redeemed. </font> </div>
<div style="text-indent:3%">
  <p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In March 2004,
    1,000,000 share options were exercised by Ross Dworman, a former trustee.
    </font> </p>
</div>
<div style="text-indent:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">During
  March 2004, the Company completed a secondary public offering (&#147;Offering&#148;)
  by certain of its shareholders of 5.8 million Common Shares. Yale University
  and its affiliates (&#147;Yale&#148;) sold 4.2 million Common Shares and Mr.
  Dworman sold 1.6 million Common Shares. Following the Offering, Yale and Mr.
  Dworman beneficially owned approximately 4.6 million and 2,300 Common Shares,
  respectively. The Company did not sell any Common Shares in the Offering and
  did not receive any proceeds from the Offering. The Company did not bear any
  costs associated with the Offering. </font> </div>
<div style="text-indent:3%">
  <p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">During the
    nine months ended September 30, 2004 certain employees of the Company exercised
    94,000 share options at prices ranging from $4.89 to $6.00 per share. </font>
  </p>
</div>
<div style="text-indent:3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">During
  the third quarter 2004, former trustees of the Company exercised 15,000 share
  options at prices ranging from $5.75 to $9.11. </font> </div>
<div style="text-indent:3%">
  <p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On November
    4, 2004, the Company, Yale and Kenneth F. Bernstein, President and Chief Executive
    Officer, entered into an underwriting agreement with Citigroup Global Markets
    Inc., under which they have agreed to sell to Citigroup an aggregate of 3,000,000
    Common Shares (Note 14). </font> </p>
</div>
<table width="100%%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%" valign="top"><p><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">8.</font></b></p>
</td>
    <td valign="top"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">INVESTMENTS
           IN AND ADVANCES TO UNCONSOLIDATED PARTNERSHIPS</font></b></td>
  </tr>
</table>
<p><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Crossroads
  </font></b> </p>
<div style="text-indent:3%">
  <p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company
    owns a 49% interest in the Crossroads Joint Venture and Crossroads II Joint
    Venture (collectively &#147;Crossroads&#148;), which collectively own a 311,000
    square foot shopping center in White Plains, New York. The Company accounts
    for its investment in Crossroads using the equity method. Summary financial
    information of Crossroads and the Company&#146;s investment in and share of
    income from Crossroads follows:</font></p>
</div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September
      30,</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">December
      31 ,</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Balance
      Sheets</font></td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Assets:</font></td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Rental
      property, net</font></td>
    <td width=1% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,059</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=8% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,402</font></td>
    <td width=2%>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other
      assets</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,980</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,710</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total assets</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,039</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,112</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right"> <hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td align="right"> <hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Liabilities
      and partners&#146; deficit</font></td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Mortgage
      note payable</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">32,462</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">32,961</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other
      liabilities</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,903</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,696</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Partners&#146;
      deficit</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(25,326</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(26,545</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total liabilities
      and partners&#146; deficit</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,039</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,112</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right"> <hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td align="right"> <hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Company&#146;s
      investment in Crossroads</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,926</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,665</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right"> <hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
</table>
<p align="center"> <font size="2" face="TimesNewRoman,Times New Roman,Times,serif">9</font></p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p10"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p align="center"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
  REALTY TRUST AND SUBSIDIARIES</font></b><br>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS<br>
  </font></b><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(in
  thousands, except per share amounts)</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">8.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">INVESTMENTS
      IN AND ADVANCES TO UNCONSOLIDATED PARTNERSHIPS (continued)</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>

<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
    <td>&nbsp;</td>
    <td colspan="5" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Three
      months ended<br>
    </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September
      30,</font></b></td>
    <td align="center"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td colspan="5" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Nine
      months ended<br>
    </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September
      30,</font></b></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td align="center"><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td align="center"><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td align="center"><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td align="center"><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Statements
      of Income</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total revenue</font></td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,953</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,029</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,930</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,125</font></td>
    <td width=2%>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Operating
      and other expenses</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">677</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">616</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,867</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,817</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest
      expense</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">664</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">629</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,927</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,907</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation
      and amortization</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">152</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">140</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">454</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">424</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net income</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">460</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">644</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,682</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,977</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Company&#146;s
      share of net income</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">247</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">317</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">858</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">994</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Amortization
      of excess investment (see below)</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">98</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">98</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">294</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">294</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Income from
      Crossroads</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">149</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">219</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">564</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">700</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
</table>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The unamortized excess of the Company&#146;s investment over its share of the net equity in Crossroads at the date of acquisition was $19,580. The portion of this excess attributable to buildings and improvements is being amortized over the life of the related property. </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Acadia Strategic Opportunity Fund, LP (&#147;Fund I&#148;) </font></b>
</p>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In 2001, the Company
formed a joint venture, Fund I, with four of its institutional investors for
the purpose of acquiring real estate assets. The Company is the general partner
with a 22% interest in the joint venture and is also entitled to a profit participation
in excess of its invested capital based on certain investment return thresholds.
The Company also earns market-rate fees for asset management as well as for property
management, construction and leasing services. Decisions made by the general
partner as it relates to purchasing, financing, and disposition of properties
are subject to the unanimous disapproval of the Advisory Committee of Fund I,
which is comprised of representatives from each of the four institutional investors. </font>
</p>
</div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">As of September 30, 2004, Fund I owns or has an ownership interest in nine shopping centers and twenty-five anchor-only supermarket leases comprising 2.6 million square feet. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In March 2004,
Fund I and an unaffiliated partner purchased a first mortgage loan from a life
insurance company, secured by a 235,000 square foot shopping center in Aiken,
South Carolina called the Hitchcock Plaza. The $9,600 loan, which was in default,
was purchased for $5,500. Fund I and its partner subsequently obtained fee title
to this center in April 2004. Related to this transaction, the Company provided
a $3,150 loan bearing interest at 7% to Fund I which is included in investments
in
and
advances
to
unconsolidated partnerships in the accompanying consolidated financial statements.
In September 2004, Fund I and the same unaffiliated partner purchased the Pine
Log Plaza for $1,500. The 35,000 square foot center is located in front of and
adjacent to the Hitchcock Plaza. Related to this transaction, the Company provided
an additional $750 loan bearing interest at 7% to Fund I which is included in
investments in and
advances
to
unconsolidated
partnerships in the accompanying consolidated financial statements. </font>
</p>
</div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In May 2004, Fund
I and an unaffiliated partner, each with a 50% interest, acquired a 35,000 square
foot shopping center in Tarrytown, New York, for $5,300. Related to this acquisition,
the Company loaned $2,000 to Fund I, bearing interest at the prime rate which
is
included
in
Investments
in
and advances to unconsolidated partnerships in the accompanying consolidated
financial
statements. </font>
</p>
</div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In May 2004, Fund I acquired a 50% interest in Haygood Shopping Center and Sterling Heights Shopping Center for an aggregate investment of $3,200. These assets are part of the portfolio that the Company currently manages as a result of its January 2004 acquisition of certain management contracts. The Haygood Shopping Center is a 165,000 square foot shopping center located in Virginia Beach, Virginia. The Sterling Heights Shopping Center is a 141,000 square foot shopping center located in Sterling Heights, Michigan. </font>
</p></div>

<div align="center"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
  10</font> <p></p> </div>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p11"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p align="center"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
  REALTY TRUST AND SUBSIDIARIES</font></b><br>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS </font></b> <br>
  <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(in thousands,
  except per share amounts) </font> </p>

<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">8.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">INVESTMENTS
           IN AND ADVANCES TO UNCONSOLIDATED PARTNERSHIPS (continued) </font></b> </td>
  </tr>
</table>

<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company accounts for its investment in Fund I using the equity method. Summary financial information of Fund I and the Company&#146;s investment in and share of income from Fund I follows: </font>
</p></div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
    <td>&nbsp;</td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September
      30,</font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif"><br>
      2004</font></b></td>
    <td align="center"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">December
      31,</font></b><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif"><br>
      2003</font></b></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Balance
      Sheets</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Assets:</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Rental
      property, net</font></td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=12% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">177,609</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=12% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">173,507</font></td>
    <td width=2%>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Investments
      in unconsolidated partnerships</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,506</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other
      assets</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,705</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,763</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total assets</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">189,820</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">178,270</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Liabilities
      and partners&#146; equity</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Mortgage
      notes payable</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">114,663</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">120,609</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other
      liabilities</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">22,711</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,731</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Partners&#146;
      equity</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">52,446</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">45,930</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total liabilities
      and partners&#146; equity</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">189,820</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">178,270</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Company&#146;s
      investment in Fund I</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,562</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,965</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
    <td>&nbsp;</td>
    <td colspan="5" align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td colspan="5" align="center">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td colspan="5" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Three
      months ended</font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif"><br>
      September
      30,</font></b></td>
    <td align="center"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td colspan="5" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Nine
      months ended</font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif"><br>
      September
      30,</font></b></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td colspan="5" align="center"><hr noshade size=1></td>
    <td align="center">&nbsp;</td>
    <td colspan="5" align="center"><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Statements
      of Operations</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total revenue</font></td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,667</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,754</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">19,927</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">18,875</font></td>
    <td width=2%>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Operating
      and other expenses</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,297</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,039</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,992</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,297</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Management
      and other fees</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">552</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">562</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,587</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,607</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest
      expense</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,687</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,711</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,956</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,692</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation
      and amortization</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,172</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,126</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,471</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,922</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minority
      interest</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">44</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">36</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">131</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">118</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Equity in
      earnings of unconsolidated partnerships</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">20</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">104</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net income</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">895</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,280</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,686</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,239</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Company&#146;s
      share of net income (1)</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">336</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">410</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">971</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,077</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td colspan="2"> <hr align="left" width="100" size="1" noshade></td>
  </tr>
  <tr>
    <td colspan="2"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">Notes:</font></td>
  </tr>
  <tr>
    <td width="3%" valign="top"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">(1)</font></td>
    <td><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">The Company&#146;s
      pro-rata share of net income is before interest expense on advances to Fund
      I, management and other fees as these amounts are paid to the Company.</font></td>
  </tr>
</table>

<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Acadia Strategic Opportunity Fund II, LP (&#147;Fund II&#148;) </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On June 15, 2004,
the Company entered into a joint venture (&#147;Fund II&#148;), with six investors;
the four Fund I investors and two additional institutional investors. Fund II
has $300 million of committed capital of which the Company&#146;s share is 20%.
The terms of Fund II are substantially the same as Fund I and as such, the Company
earns a pro-rata return on
its
invested equity and receives market-rate fees for property management, construction,
leasing and internal legal services. The Company also earns asset management
fees
which
equal to 1.5% of the committed capital of $250 million for the first twelve months
and the full $300 million thereafter. </font>
</p>
</div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On September 29,
2004, Fund II and an unaffiliated joint venture party acquired a 117,355 square
foot shopping center located in Bronx, New York, for an initial purchase price
of $30,197, inclusive of closing and other related acquisition costs. In connection
with this acquisition, the
Company
has provided a bridge loan of $18,000 at 4% (Note 10). </font>
</p>
</div>

<p align="center"> <font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
  11</font> </p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p12"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p align="center"> <b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
  REALTY TRUST AND SUBSIDIARIES</font></b><br>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">NOTES
  TO CONSOLIDATED FINANCIAL STATEMENTS </font></b> <br>
  <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(in thousands,
  except per share amounts) </font> </p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">8.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">INVESTMENTS
           IN AND ADVANCES TO UNCONSOLIDATED PARTNERSHIPS (continued) </font></b></td>
  </tr>
</table>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">As of September
30, 2004, Fund II had total assets and equity of $13,472. For the three
and nine months ended September 30, 2004, Fund II had a net loss of $1,005 and
$1,130, respectively,
of
which the Company&#146;s share was $2, for each of the periods. </font>
</p>
</div>
<p><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>Retailer Controlled Property Venture</b></font></p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On January 27,
2004, the Company entered into the Retailer Controlled Property Venture (&#147RCP
Venture&#148) with Klaff Realty, L.P. (&#147Klaff&#148) and its long-time capital
partner Lubert-Adler Management, Inc. for the purpose of making investments in
surplus or underutilized properties owned by retailers. On September 2, 2004,
affiliates of Fund I and Fund II, through separately organized, newly formed
limited liability companies on a non-recourse basis, invested in the acquisition
of Mervyn&#146;s through the RCP Venture, which, as part of an investment consortium of Sun
Capital and Cerebus, acquired Mervyn&#146;s from Target Corporation. The total acquisition price was $1.175
billion, with such affiliates&#146; combined $23,200 share of the investment
divided equally between them.</font>
</p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">9.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">DERIVATIVE
      FINANCIAL INSTRUMENTS</font></b></td>
  </tr>
</table>

<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The following table summarizes the notional values and fair values of the Company&#146;s derivative financial instruments as of September 30, 2004. The notional value does not represent exposure to credit, interest rate or market risks. </font>
</p></div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Interest</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Commencement</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Maturity</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Hedge
      Type</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Notional
      Value</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Rate</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Date</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Date</font></b></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td align="center"><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Fair
      Value</font></b></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">LIBOR Swap
      (1)</font></td>
    <td width="2%">&nbsp;</td>
    <td width=1%><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,974</font></td>
    <td width=2%>&nbsp;</td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5.94</font></td>
    <td width=2%><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(3</font></td>
    <td width=2%><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6/16/07</font></td>
    <td width=2%>&nbsp;</td>
    <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(897</font></td>
    <td width=2%><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">LIBOR Swap
      (1)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,000</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6.48</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(3</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6/16/07</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(445</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest
        rate swap payable related<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to unconsolidated
      partnerships</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,342</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">LIBOR Swap</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">30,000</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.80</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(3</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4/1/05</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(402</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">LIBOR Swap</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">20,000</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.53</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(3</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10/1/06</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(668</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">LIBOR Swap</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,899</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.47</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(3</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6/1/07</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(319</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">LIBOR Swap</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">15,443</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.32</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(3</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1/1/07</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(466</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">LIBOR Swap</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,947</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.11</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(3</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1/1/07</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(306</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">LIBOR Swap
      (2)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">37,667</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.35</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4/1/05</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1/1/11</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(526</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">LIBOR Swap
      (2)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,410</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.90</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10/2/06</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10/1/11</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(144</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">LIBOR Swap
      (2)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,640</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.71</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10/2/06</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1/1/10</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(48</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">LIBOR Swap
      (2)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,434</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5.14</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6/1/07</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3/1/12</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(118</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td>&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest
      rate swap payable</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2,997</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td colspan="2"> <hr align="left" width="100" size="1" noshade></td>
  </tr>
  <tr>
    <td colspan="2"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">Notes:</font></td>
  </tr>
  <tr>
    <td width="3%" valign="top"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">(1)</font></td>
    <td><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">Relates
      to the Company&#146;s investments in Crossroads. These swaps effectively
      fix the interest rate on the Company&#146;s pro rata share of mortgage debt.
      The fair values of these instruments are reflected as components of the
      Company&#146;s investment in Crossroads in the accompanying consolidated
      financial statements.</font></td>
  </tr>
  <tr>
    <td valign="top"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">(2)</font></td>
    <td><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">Forward
      starting swap agreements.</font></td>
  </tr>
  <tr>
    <td valign="top"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">(3)</font></td>
    <td><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">These agreements
      are currently in effect.</font></td>
  </tr>
</table>

<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">10.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">MORTGAGE
      LOANS</font></b></td>
  </tr>
</table>

<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On September 28,
2004, the Company drew down $20,000 from existing lines of credit from two different
banks. The proceeds from these drawdowns were utilized to advance $18,000 to
Fund II as a bridge loan to finance Fund II&#146;s acquisition of a property
located in The Bronx, New York (Note 8). Subsequent to September 30, 2004, Fund
II&#146;s
advance was repaid upon financing of the acquisition with a bank.</font>
</p>
</div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On August 13, 2004, the Company refinanced an existing $7,936 floating rate mortgage loan with a $15,000 fixed rate mortgage loan maturing in 2014. The terms of the new mortgage loan, bearing interest at 5.6%, provide for interest-only payments for two years, and principal and interest thereafter based on a 30-year amortization with a balloon payment due at maturity of $13,064. In connection with the refinancing, the Company was required to prepay $1,587 of debt collateralized by two other properties, and pay a prepayment penalty of $95 which, together with unamortized deferred loan costs relating to this debt, were expensed during the quarter. </font>
</p></div>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">12</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font size="2"><a name="p13"></a></font><page>
<p><a href="#index"><font size="2">Back to Index</font></a></p>
<p align="center"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
  REALTY TRUST AND SUBSIDIARIES</font></b>

<br>
<font size="2"><b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS </font></b>
  <br>
    <font face="TimesNewRoman,Times New Roman,Times,serif">(in thousands, except per share amounts) </font></font>
</p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%"><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>11.</b></font></td>
    <td><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>RELATED
    PARTY TRANSACTIONS</b></font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
The Company managed one property in which a shareholder of the Company had an
ownership interest for which the Company earned a management fee of 3% of tenant
collections. Management fees earned by the Company under this contract aggregated
$15 and $142 for the three and nine months ended September 30, 2004, respectively,
and $52 and $167 for the three and nine months ended September 30, 2003, respectively.
In addition, the Company also earned leasing commissions of $74 and $157 related
to this property for the three and nine months ended September 30, 2004. In connection
with the sale of the property on July 12, 2004, the management contract was terminated
and the Company earned a $75 disposition fee. </font>
</p>
</div>
<div style="text-indent:3%">
<p><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
The Company also earns certain management and service fees in connection with
its investment in Fund I and Fund II (Note 8). Such fees earned by the Company
aggregated $1,203 and $2,214 for the three and nine months ended September 30,
2004, respectively, and $437 and $1,251 for the three and nine months ended September
30, 2003, respectively. </font>
</p>
</div>
<div style="text-indent:3%">
<p><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
The Company also earns fees in connection with its rights to provide asset management,
leasing, disposition, development and construction services for an existing portfolio
of retail properties and/or leasehold interests in which a preferred OP unit
    holder has an interest. Net fees earned by the Company in connection with
    this portfolio were $204 and
    $535 for
the three and nine months ended September 30, 2004, respectively. </font>
</p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%"><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>12.</b></font></td>
    <td><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>DIVIDENDS
    AND DISTRIBUTIONS PAYABLE </b> </font></td>
  </tr>
</table>
<div style="text-indent:3%"><p><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
On September 23, 2004, the Board of Trustees of the Company approved and declared
a cash quarterly dividend for the quarter ended September 30, 2004 of $0.16 per
Common Share and Common OP Unit. The dividend was paid on October 15, 2004 to
shareholders of record as of September 30, 2004. The Company also paid a distribution
of $22.50 per Series A Preferred OP Unit and $13.00 per Series B Preferred OP
Unit on October 15, 2004. </font>
</p>
</div>
<p align="center"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
13
</font></p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font size="2"><a name="p14"></a><page>
<p><a href="#index">Back to Index</a></p>
</font>
<p align="center"><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>ACADIA
      REALTY TRUST AND SUBSIDIARIES
</b></font><br>
<font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</b></font><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">(in
thousands, except per share amounts) </font></p>
<p align="center">&nbsp; </p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%"><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>13.</b></font></td>
    <td><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>SEGMENT
    REPORTING</b></font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
The Company has two reportable segments: retail properties and multi-family properties.
The accounting policies of the segments are the same as those described in the
summary of significant accounting policies. The Company evaluates property performance
primarily based on net operating income before depreciation, amortization and
certain nonrecurring items. The reportable segments are managed separately due
to the differing nature of the leases and property operations associated with
the retail versus residential tenants. The following tables set forth certain
segment information for the Company as of and for the three and nine months ended
September 30, 2004 and 2003 (does not include unconsolidated partnerships): </font>
</p>
</div>

<table width="100%" border=0 cellpadding=0 cellspacing=0>
<tr>
  <td>&nbsp;</td>
  <td colspan="11"><div align="center"><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>Nine
          months ended September 30, 2004</b></font></div></td>
  <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td colspan="11"><hr align="center" size=1 noshade>
  </td>
  <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td colspan="2"><div align="center"><font size="2"><b><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">Retail<br>
   </font><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">Properties</font><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">   </font></b></font></div></td>
   <td>&nbsp;</td>
   <td colspan="2"><div align="center"><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>Multi-Family<br>
Properties </b></font></div></td>
   <td>&nbsp;</td>
   <td colspan="2"><div align="center"><font size="2"><b><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">All<br>
   </font><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">Other</font><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">   </font></b></font></div></td>
   <td>&nbsp;</td>
   <td colspan="2"><div align="center"><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>Total</b></font></div></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><div align="center">
     <hr align="center" size=1 noshade>
   </div></td>
   <td><hr align="center" size=1 noshade></td>
   <td>&nbsp;</td>
   <td><div align="center">
     <hr align="center" size=1 noshade>
   </div></td>
   <td><div align="center">
     <hr align="center" size=1 noshade>
     </div></td>
   <td>&nbsp;</td>
   <td><div align="center">
     <hr align="center" size=1 noshade>
   </div></td>
   <td><hr align="center" size=1 noshade></td>
   <td>&nbsp;</td>
   <td><div align="center">
     <hr align="center" size=1 noshade>
     </div></td>
   <td><div align="center">
     <hr align="center" size=1 noshade>
     </div></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Revenues</font></td>
   <td width=1% align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">44,859</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,686</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,243</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">54,788</font></td>
   <td width=2%>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Property operating expenses and real estate taxes</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">15,548</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,212</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">18,760</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><div align="right">
     <hr noshade size=1>
   </div></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><div align="right">
     <hr noshade size=1>
   </div></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><div align="right">
     <hr noshade size=1>
   </div></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><div align="right">
     <hr noshade size=1>
   </div></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left:3%; text-indent:-3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net
         property income before depreciation, amortization</font><font size="2" face="TimesNewRoman,Times New Roman,Times,serif"> and
         certain nonrecurring items</font></div></td>
   <td align="center" valign="bottom"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right" valign="bottom"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">29,311</font></td>
   <td valign="bottom">&nbsp;</td>
   <td align="center" valign="bottom"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right" valign="bottom"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,474</font></td>
   <td valign="bottom">&nbsp;</td>
   <td align="center" valign="bottom"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right" valign="bottom"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,243</font></td>
   <td valign="bottom">&nbsp;</td>
   <td align="center" valign="bottom"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right" valign="bottom"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">36,028</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation and amortization</font></td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10,627</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,056</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">222</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,905</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest expense</font></td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,327</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,137</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,464</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Real estate at cost</font></td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">392,096</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">40,421</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">432,517</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total assets</font></td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">349,041</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">36,847</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">47,289</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">433,177</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Gross leasable
    area (multi-family &#150; 1,474 units)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,147</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,207</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,354</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><div align="right">
     <hr noshade size=2>
   </div></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><div align="right">
     <hr noshade size=2>
   </div></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><div align="right">
     <hr noshade size=2>
   </div></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><div align="right">
     <hr noshade size=2>
   </div></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Expenditures for real estate and improvements</font></td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,406</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">647</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,053</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Revenues</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total revenues for reportable segments</font></td>
   <td align="center" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">56,191</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination of intersegment management fee income</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(958</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination of intersegment asset management fee income</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(445</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><div align="right">
     <hr noshade size=1>
   </div></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total consolidated revenues</font></td>
   <td align="center" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">54,788</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr align="right" size=2 noshade></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Property operating expenses and real estate taxes</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><div style="margin-left:3%; text-indent:-3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total property
    operating expenses and real estate taxes</font><font size="2" face="TimesNewRoman,Times New Roman,Times,serif"><br>
 for
    reportable segments</font></div></td>
   <td align="center" valign="bottom" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right" valign="bottom" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">19,593</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination of intersegment management fee expenses</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(833</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><div align="right">
     <hr noshade size=1>
   </div></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total consolidated expenses</font></td>
   <td align="center" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">18,760</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr align="right" size=2 noshade></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Reconciliation to net income</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><div style="margin-left:3%; text-indent:-3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net property
    income before depreciation and</font><font size="2" face="TimesNewRoman,Times New Roman,Times,serif"> amortization</font></div></td>
   <td align="center" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">36,028</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation and amortization</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">(11,905</font></td>
   <td><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">General and administrative</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(7,585</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Equity in earnings of unconsolidated partnerships</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,533</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest expense</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(8,464</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Gain on sale of land</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">931</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minority interest</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,029</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><div align="right">
     <hr noshade size=1>
   </div></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net income</font></td>
   <td align="center" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,509</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr align="right" size=2 noshade></td>
   <td><hr align="right" size=2 noshade></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
</table><p align="center"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
14
</font></p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font size="2"><a name="p15"></a><page>
<p><a href="#index">Back to Index</a></p>
<p align="center"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA REALTY TRUST AND SUBSIDIARIES
</font></b><br>
<b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif">  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b>
  <br>
  <font size="2" face="TimesNewRoman,Times New Roman,Times,serif">(in thousands,
  except per share amounts) </font>
</p>
</font>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="3%"><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>13.&nbsp;</b></font></td>
    <td><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>SEGMENT
    REPORTING, continued</b></font></td>
  </tr>
</table>
<p>&nbsp;</p>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
    <td>&nbsp;</td>
    <td colspan="11"><div align="center"><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>Three
            months ended September 30, 2004</b></font></div>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td colspan="11"><hr align="center" size=1 noshade>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td colspan="2"><div align="center"><font size="2"><b><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">Retail<br>
        </font><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">Properties</font><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif"> </font></b></font></div>
    </td>
    <td>&nbsp;</td>
    <td colspan="2"><div align="center"><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>Multi-Family<br>
Properties </b></font></div>
    </td>
    <td>&nbsp;</td>
    <td colspan="2"><div align="center"><font size="2"><b><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">All<br>
        </font><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif">Other</font><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif"> </font></b></font></div>
    </td>
    <td>&nbsp;</td>
    <td colspan="2"><div align="center"><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>Total</b></font></div>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><div align="center">
        <hr align="center" size=1 noshade>
      </div>
    </td>
    <td><hr align="center" size=1 noshade>
    </td>
    <td>&nbsp;</td>
    <td><div align="center">
        <hr align="center" size=1 noshade>
      </div>
    </td>
    <td><div align="center">
        <hr align="center" size=1 noshade>
        </div>
    </td>
    <td>&nbsp;</td>
    <td><div align="center">
        <hr align="center" size=1 noshade>
      </div>
    </td>
    <td><hr align="center" size=1 noshade>
    </td>
    <td>&nbsp;</td>
    <td><div align="center">
        <hr align="center" size=1 noshade>
        </div>
    </td>
    <td><div align="center">
        <hr align="center" size=1 noshade>
        </div>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Revenues</font></td>
    <td width="1%" align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td width="10%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">14,980</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width="10%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,832</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width="10%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,895</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width="10%" align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">18,707</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Property
        operating expenses and real estate taxes</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,590</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,187</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,777</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><hr align="right" size=1 noshade></td>
    <td><hr noshade size=1>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=1></td>
    <td><hr noshade size=1>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><div style="margin-left: 3%; text-indent: -3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net property
        income before depreciation, amortization</font><font size="2" face="TimesNewRoman,Times New Roman,Times,serif"> and
        <br>
        certain nonrecurring items</font></div></td>
    <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,390</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">645</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,895</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,930</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation
        and amortization</font></td>
    <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,506</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">356</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">66</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,928</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest
        expense</font></td>
    <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,570</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">388</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,958</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Real estate
        at cost</font></td>
    <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">392,096</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">40,421</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">432,517</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total assets</font></td>
    <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">349,041</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">36,847</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">47,289</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">433,177</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Gross leasable
        area (multi-family &#150; 1,474 units)</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,147</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,207</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,354</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><div align="right">
      <hr noshade size=2>
    </div></td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2></td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2></td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td align="right"><hr noshade size=2></td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Expenditures
        for real estate and improvements</font></td>
    <td align="center"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,649</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">321</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,970</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
    <td><hr noshade size=2>
    </td>
    <td><hr noshade size=2>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Revenues</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total revenues
        for reportable segments</font></td>
    <td align="center" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">19,345</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination
        of intersegment management fee income</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(343</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination
        of intersegment asset management fee income</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(295</font></td>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><div align="right">
      <hr noshade size=1>
    </div></td>
    <td><hr noshade size=1>
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total consolidated
        revenues</font></td>
    <td align="center" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">18,707</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Property
        operating expenses and real estate taxes</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><div style="margin-left:3%; text-indent:-3%"><font size="2">&nbsp;<font face="TimesNewRoman,Times New Roman,Times,serif">Total
          property operating expenses and real estate taxes for</font>&nbsp;<font face="TimesNewRoman,Times New Roman,Times,serif">reportable
          segments</font></font></div></td>
    <td align="center" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,074</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination
        of intersegment management fee expense</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(297</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><div align="right">
      <hr noshade size=1>
    </div></td>
    <td><hr noshade size=1>
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total consolidated
        expenses</font></td>
    <td align="center" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,777</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Reconciliation
        to net income</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">Net
        property income before depreciation and amortization</font></td>
    <td align="center" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,930</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation
        and amortization</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(3,928</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">General
        and administrative</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2,674</font></td>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Equity
        in earnings of unconsolidated partnerships</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">483</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest
        expense</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2,958</font></td>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Gain on
        sale of land</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">423</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minority
        interest</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(381</font></td>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;    </td>
    <td><div align="right">
      <hr noshade size=1>
    </div></td>
    <td><hr noshade size=1>
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net income</font></td>
    <td align="center" bgcolor="#eeeeee"><div align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></div></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,895</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td><hr align="right" size=2 noshade>
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<p align="center"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
15
</font></p>

<hr noshade align="center" width="100%" size="2">


<div style="page-break-before:always"></div><a name="p16"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p align="center">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
REALTY TRUST AND SUBSIDIARIES
<br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b>
<br>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(in thousands, except per share amounts)</font>
</p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">13.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">SEGMENT
    REPORTING, continued</font></b></td>
  </tr>
</table>
<br>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
<tr>
  <td>&nbsp;</td>
  <td colspan="11" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Nine
    months ended September 30, 2003</font></b></td>
  <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td colspan="11"><hr noshade size=1></td>
  <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Retail</font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif"><br>
    properties</font></b></td>
   <td>&nbsp;</td>
   <td colspan=2 align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Multi-Family<br>
   </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">properties</font></b></td>
   <td>&nbsp;</td>
   <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">All<br>
   </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">other</font></b></td>
   <td>&nbsp;</td>
   <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Total</font></b></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td colspan="2"><hr noshade size=1>
   </td>
   <td>&nbsp;</td>
   <td colspan=2><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td colspan="2"><hr noshade size=1>
   </td>
   <td>&nbsp;</td>
   <td colspan="2"><hr noshade size=1>
   </td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Revenues</font></td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">42,571</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,430</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,293</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1%><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> $</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">51,294</font></td>
   <td width=2%>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Property operating expenses and real estate taxes</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">13,925</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,072</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">16,997</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left: 3%; text-indent: -3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net property
    income before depreciation, amortization</font> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">and
    <br>
    certain nonrecurring items</font></div></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">28,646</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,358</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,293</font></td>
   <td>&nbsp;</td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> $</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">34,297</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation and amortization</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10,054</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">988</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">235</font></td>
   <td>&nbsp;</td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> $</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,277</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest expense</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,264</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,149</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,413</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Real estate at cost</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">386,100</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">39,481</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">425,581</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total assets</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">355,699</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">36,792</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">12,930</font></td>
   <td>&nbsp;</td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> $</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">405,421</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Gross leasable
    area (multi-family &#8211; 1,474 units)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,152</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,207</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,359</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Expenditures for real estate and improvements</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,905</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,085</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,990</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Revenues</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total revenues for reportable segments</font></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">52,503</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination of intersegment management fee income</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(984</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination of intersegment asset management fee income</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(225</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total consolidated revenues</font></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">51,294</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Property operating expenses and real estate taxes</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><div style="margin-left: 3%; text-indent: -3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total property
    operating expenses and real estate taxes for<br>
reportable segments</font></div></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">17,849</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination of intersegment management fee expense</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(852</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total consolidated expenses</font></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">16,997</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Reconciliation to net income</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><div style="margin-left: 3%; text-indent: -3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net property
    income before depreciation, amortization</font> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">and
    <br>
certain nonrecurring items</font></div></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">34,297</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation and amortization</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(11,277</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">General and administrative</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(7,931</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Equity in earnings of unconsolidated partnerships</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,777</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest expense</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(8,413</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minority interest</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1,310</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Gain on sale of land</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,187</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net Income</font></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,330</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
</table>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">16</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<a name="p17"></a>
<page>
<p>
<a href="#index">
<font size="2">Back to Index</font></a></p>


<p align="center">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">ACADIA
REALTY TRUST AND SUBSIDIARIES<br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b>
<br>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(in thousands, except per share amounts)</font>
</p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">13.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">SEGMENT
          REPORTING, continued</font></b></td>
  </tr>
</table>


<table width="100%" border=0 cellpadding=0 cellspacing=0>
<tr>
  <td>&nbsp;</td>
  <td colspan="11" align="center">&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td colspan="11" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Three
    months ended September 30, 2003</font></b></td>
  <td>&nbsp;</td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td colspan="11"><hr noshade size=1></td>
  <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Retail</font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif"><br>
    properties</font></b></td>
   <td>&nbsp;</td>
   <td colspan=2 align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Multi-Family<br>
   </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">properties</font></b></td>
   <td>&nbsp;</td>
   <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">All<br>
   </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">other</font></b></td>
   <td>&nbsp;</td>
   <td colspan="2" align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Total</font></b></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td colspan=2><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td colspan=2><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Revenues</font></td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">14,130</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,842</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">732</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">16,704</font></td>
   <td width=2%>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Property operating expenses and real estate taxes</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4,135</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,110</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,245</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><div style="margin-left: 3%; text-indent: -3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net property
    income before depreciation, amortization</font>&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">and<br>
certain nonrecurring items</font></div></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,995</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">732</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">732</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,459</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation and amortization</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,361</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">339</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">88</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,788</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest expense</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,500</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">382</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,882</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Real estate at cost</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">386,100</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">39,481</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">425,581</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total assets</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">355,699</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">36,792</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">12,930</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">405,421</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Gross leasable area (multi-family &#8211; 1,474 units)</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,152</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,207</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,359</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Expenditures for real estate and improvements</font></td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,298</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">388</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td>&nbsp;</td>
   <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,686</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Revenues</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total revenues for reportable segments</font></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">17,102</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination of intersegment management fee income</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(323</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination of intersegment asset management fee income</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(75</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> )</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total consolidated revenues</font></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">16,704</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Property operating expenses and real estate taxes</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><div style="margin-left: 3%; text-indent: -3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total property
    operating expenses and real estate taxes for<br>
reportable segments</font></div></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,519</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Elimination of intersegment management fee expense</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(274</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total consolidated expenses</font></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5,245</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Reconciliation to net income</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net property income before depreciation and amortization</font></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11,459</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation and amortization</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(3,788</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">General and administrative</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2,786</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Equity in earnings of unconsolidated partnerships</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">629</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest expense</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2,882</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Loss on sale of land</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(25</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minority interest</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(183</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net income</font></td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,424</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
</table>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="3%"><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>14.</b></font></td>
    <td><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>Contingencies</b></font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
For the three and nine months ended September 30, 2004, the Company provided
    a reserve for $730 related to flood damage incurred at the Mark Plaza located
    in Wilkes-Barre, PA. Under the terms of the Company&#146;s insurance policy,
    a maximum deductible of approximately $730 would apply in the event the flood
    damage was the direct result of a &#147named&#148 storm. The insurance company
    currently contends that the flood damage resulted directly from Hurricane
    Ivan, a &#147named&#148 storm.</font></p>
</div>
  <table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="3%"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">15.</font></b></td>
    <td><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">SUBSEQUENT
    EVENTS </font></b></td>
  </tr>
</table>
<div style="text-indent:3%">
<p>
  <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On November 4,
  2004, the Company entered into an underwriting agreement with Citigroup Global
  Markets Inc., under which it has agreed to sell to Citigroup an aggregate
  of 3,000,000 Common Shares. The Company, Yale University and its affiliates
  (&#145;&#145;Yale&#146;&#146;) and Kenneth F. Bernstein, President and Chief
  Executive Officer of the Company, have agreed to sell 1,890,000, 1,000,000,
  and 110,000 Common Shares, respectively. Pursuant to the underwriting agreement,
  Citigroup has been granted a 30-day over-allotment option to purchase up to
  an additional 450,000 Common Shares (300,000 granted by the Company and 150,000
  by Yale). In connection with the offering, the Company and all insiders, including
  Yale, have agreed to a 90-day lockup period. </font>
</p>
</div>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif"> 	17</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p18"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>
<p><b><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Item
2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management&#146;s Discussion and Analysis of Financial Condition and Results
of Operations </font></b></p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The following discussion is based on the consolidated financial statements of the Company as of September 30, 2004 and 2003 and for the three and nine months then ended. This information should be read in conjunction with the accompanying consolidated financial statements and notes thereto. </font>
</p>
</div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">FORWARD-LOOKING STATEMENTS </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Certain statements contained in this report constitute &#147;forward-looking statements&#148; within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results performance or achievements expressed or implied by such forward-looking statements. Such factors are set forth in the Company&#146;s Form 10-K for the year ended December 31, 2003 and include, among others, the following: general economic and business conditions, which will, among other things, affect demand for rental space, the availability and creditworthiness of prospective tenants, lease rents and the availability of financing; adverse changes in the Company&#146;s real estate markets, including, among other things, competition with other companies; risks of real estate development and acquisition; governmental actions and initiatives; and environmental/safety requirements. </font>
</p>
</div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">OVERVIEW</font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company operates
70 properties, which it owns or has an ownership interest in, consisting of 68
neighborhood and community shopping centers and two multi-family properties,
principally located in the Northeast, Mid-Atlantic and Midwest regions of the
United States. The Company receives income primarily from the rental revenue
from its properties, including expense recoveries from tenants, offset by operating
and overhead expenses. The Company focuses on three primary areas in executing
its
business plan as follows: </font>
</p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%">&nbsp;</td>
    <td width="3%" valign="top">&#8212;</td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Maximizing the return on its existing portfolio through leasing and property
        redevelopment activities. The Company&#146;s redevelopment program is
        a significant and ongoing component of managing its existing portfolio
        and focuses on selecting well-located neighborhood and community shopping
        centers and creating significant value through re-tenanting and property
    redevelopment.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&#8212;</td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Pursuing
        above-average returns through a disciplined and opportunistic acquisition
        program. The primary conduits for the Company&#146;s acquisition program
        are through its existing acquisition joint ventures, Fund I and Fund
        II, as well as the Retailer Controlled Property Venture (&#147;RCP Venture&#148;)
        established to invest in surplus or underutilized properties owned or
    controlled by retailers.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&#8212;</td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Maintaining
        a strong balance sheet, which provides the Company with the financial
    flexibility to fund both property redevelopment and acquisition opportunities.</font></td>
  </tr>
</table>


<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">CRITICAL ACCOUNTING POLICIES </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Management&#146;s discussion and analysis of financial condition and results of operations is based upon the Company&#146;s consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting policies affect its significant judgments and estimates used in the preparation of its consolidated financial statements. </font>
</p>
</div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Valuation of Property Held for Use and Sale </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On a quarterly basis, the Company reviews both the carrying value of properties held for use and for sale. The Company records impairment losses and reduces the carrying value of properties when indicators of impairment are present and the expected undiscounted cash flows related to those properties are less than their carrying amounts. In cases where the Company does not expect to recover its carrying costs on properties held for use, the Company reduces its carrying cost to fair value, and for properties held for sale, the Company reduces its carrying value to the fair value less costs to sell. Management does not believe that the values of its properties within the portfolio are impaired as of September 30, 2004. </font>
</p>
</div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Bad Debts </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make payments on arrearages in billed rents, as well as the likelihood that tenants will not have the ability to make payment on unbilled rents including estimated expense recoveries and straight-line rent. As of September 30, 2004, the Company had recorded an allowance for doubtful accounts of $2.8 million. If the financial condition of the Company&#146;s tenants were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. </font>
</p>
</div>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif"> 	18</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p19"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">RESULTS OF OPERATIONS </font></b></p>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Comparison of the three months ended September 30, 2004 (&#147;2004&#148;) to the three months ended September 30, 2003 (&#147;2003&#148;) </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total revenues increased $2.0 million, or 12%, to $18.7 million for 2004 compared to $16.7 million for 2003. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minimum rents increased
$0.5 million, or 4%, to $13.1 million for 2004 compared to $12.6 million for
2003. This increase was attributable to an increase in rents from re-tenanting
activities as well as increased occupancy across the portfolio. </font>
</p>
</div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In total, expense reimbursements increased $0.4 million, or 12%, from $3.0 million in 2003 to $3.4 million in 2004. Common area maintenance (&#147;CAM&#148;) expense reimbursement increased $0.1 million as a result of increased tenant reimbursements following re-tenanting activities
across the portfolio. Real estate tax reimbursements increased $0.2 million, primarily as a result of general increases in real estate taxes as well as re-tenanting activities throughout the portfolio.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Management fee
income increased $1.0 million, or 216%, to $1.5 million in 2004 from $0.5 million
in 2003. This was the result of  asset management fees from Fund
II and an increase in management fees related to the acquisition of certain management
contract rights in 2004. </font>
</p>
</div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest income increased in 2004 by $0.1 million. This net change was a combination of additional interest income on the Company&#146;s advances and notes receivable originated in 2004 offset by lower interest earning cash deposits in 2004.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total operating expenses increased $1.6 million, or 13%, to $13.4 million for 2004, from $11.8 million for 2003. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Property operating expenses increased $1.4 million, or 46%, to $4.3 million for 2004 compared to $2.9 million for 2003. This was a result primarily of a non-recurring charge of approximately $0.7 million related to flood damage at the Mark Plaza and an increase in bad debt expense in 2004. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Real estate taxes increased $0.2 million, or 8%, from $2.3 million in 2003 to $2.5 million in 2004 due to general increases in real estate taxes experienced across the portfolio.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">General and administrative expense decreased $.1 million, or 4%, from $2.8 million in 2003 to $2.7 million in 2004. This decrease was attributable to the Company&#146;s capitalization of certain internal leasing costs in 2004 offset by additional professional fees related to Sarbanes-Oxley compliance.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In total, depreciation and amortization expense increased $0.1 million, or 4%, to $3.9 million in 2004, from $3.8 million in 2003. Depreciation expense remained unchanged from 2003 to 2004. Amortization expense increased $0.1 million in 2004, which was primarily attributable to the write off of deferred loan costs related to a loan refinancing.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest expense increased $.1 million, or 3%, to $3.0 million in 2004 from $2.9 million in 2003. Interest expense increased $0.3 million as result of higher average outstanding borrowings offset by a $.2 million decrease in interest expense resulting from a lower average interest rate on the portfolio mortgage debt in 2004.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The gain on sale of land in 2004 was related to the prior year sale of a contract to purchase land as discussed in note 3 to the consolidated financial statements appearing in Part I, Item I in this Form 10Q. </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Comparison of the nine months ended September 30, 2004 (&#147;2004&#148;) to the nine months ended September 30, 2003 (&#147;2003&#148;) </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total revenues increased $3.5 million, or 7%, to $54.8 million for 2004 compared to $51.3 million for 2003.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Minimum rents increased $2.0 million, or 5%, to $39.3 million for 2004 compared to $37.3 million for 2003. This increase was attributable to an increase in rents following the redevelopment of the Gateway Shopping Center in 2003 and an increase in rents from re-tenanting activities across the portfolio. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In total, expense
reimbursements increased $0.6 million, or 6%, from $9.6 million for 2003 to $10.2
million for 2004. Real estate tax reimbursements increased $0.5 million, primarily
as a result of the combination of tenant reimbursement of higher real estate
taxes across the portfolio and as a result of the tenants&#146; share of a real
estate tax refund received in 2003 related to the appeal of taxes paid in prior
years at Greenridge Plaza. CAM expense reimbursements remained unchanged at $4.5
million.</font>
</p>
</div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Management fee
income increased $1.7 million, or 118%, to $3.1 million in 2004 from $1.4 million
in 2003. This was the result of asset management fees from Fund
II, an increase in management fees related to the acquisition of certain management
contract rights in 2004 as well as Fund I leasing commissions
in 2004. </font>
</p>
</div>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif"> 	19</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p20"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>

<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest income increased $0.3 million from 2003 to 2004. This was primarily due to those factors addressed for the three months ended September 30, 2004.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Other income of $1.2 million in 2003 was due to a lump sum additional payment of $1.2 million received in 2003 from a tenant in connection with the re-anchoring of the Branch Plaza. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total operating expenses increased $2.0 million, or 6%, to $38.2 million for 2004, from $36.2 million for 2003.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Property operating expenses increased $1.2 million, or 11%, to $11.9 million for 2004, compared to $10.7 million for 2003. This was primarily due to the factors addressed for the three months ended September 30, 2004 offset by higher snow removal costs during 2003.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Real estate taxes increased $0.6 million, or 10%, from $6.3 million in 2003 to $6.9 million in 2004 due to a real estate tax refund received in 2003 related to the appeal of taxes paid in prior years at the Greenridge Plaza and higher real estate taxes experienced throughout the portfolio.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">General and administrative decreased $0.3 million, or 4%, to $7.6 million in 2004 from $7.9 million in 2003. This was primarily due to the factors addressed for the three months ended September 30, 2004.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation and amortization expense increased $0.6 million, or 6%, from $11.3 million in 2003 to $11.9 million in 2004. Depreciation expense increased $0.1 million. This was the result of increased depreciation expense following the Gateway redevelopment project being placed in service during the second quarter of 2003. Amortization expense increased $0.5 million in 2004 primarily as a result of the amortization of investment in management contracts in 2004.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Interest expense remained unchanged from 2003 to 2004. Interest expense increased as a result of a combination of a $0.2 million increase resulting from higher average outstanding borrowings in 2004 and a $0.1 million decrease in capitalized interest in 2004. These increases were offset by a $0.3 million decrease related to a lower average interest rate on the portfolio debt in 2004.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The gain on sale of land in 2004 and 2003 was related to the sale of a contract to purchase land.</font></p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Funds from Operations </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company considers funds from operations (&#147;FFO&#148;) as defined by the National Association of Real Estate Investment Trusts (&#147;NAREIT&#148;) to be an appropriate supplemental disclosure of operating performance for an equity REIT due to its widespread acceptance and use within the REIT and analyst communities. FFO is presented to assist investors in analyzing the performance of the Company. It is helpful as it excludes various items included in net income that are not indicative of the operating performance, such as gains (or losses) from sales of property and depreciation and amortization. However, the Company&#146;s method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. FFO does not represent cash generated from operations as defined by GAAP and is not indicative of cash available to fund all cash needs, including distributions. It should not be considered as an alternative to net income for the purpose of evaluating the Company&#146;s performance or to cash flows as a measure of liquidity. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Consistent with the NAREIT definition, the Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciated property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. The reconciliation of net income to FFO for the three and nine months ended September 30, 2004 and 2003 is as follows (amounts in thousands): </font>
</p></div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
    <td rowspan="2">&nbsp;</td>
    <td rowspan="2">&nbsp;</td>
    <td colspan=4 rowspan="2" align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Three
      months ended<br>
      </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">September
      30,</font></b></td>
    <td rowspan="2"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td rowspan="2"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td colspan=4 rowspan="2" align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Nine
      months ended</font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif"><br>
      September 30,</font></b></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td colspan="5"><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td colspan="5"><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
    <td><hr noshade size=1></td>
    <td><hr noshade size=1></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net
      income</font></td>
    <td width=1% align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,895</font></td>
    <td width=2% bgcolor="#eeeeee">&nbsp;</td>
    <td width=1% align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2,424</font></td>
    <td width=2% bgcolor="#eeeeee">&nbsp;</td>
    <td width=1% bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">
      $</font></td>
    <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">9,509</font></td>
    <td width=2% bgcolor="#eeeeee">&nbsp;</td>
    <td width=1% bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">
      $</font></td>
    <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8,330</font></td>
    <td width="2%" bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Depreciation
      of real estate and amortization of leasing costs:</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;Wholly-owned
      and consolidated partnerships</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,588</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3,571</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10,672</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10,541</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee">&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Unconsolidated
      partnerships</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">586</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">547</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,707</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1,557</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr>
    <td><div style="margin-left: 3%; text-indent: -3%">&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Income
        attributable to Minority interest in Operating</font><br>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Partnership
      (1)</font></div></td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">57</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">117</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">244</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">758</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=1> </td>
    <td><hr noshade size=1> </td>
    <td>&nbsp;</td>
    <td><hr noshade size=1> </td>
    <td><hr noshade size=1> </td>
    <td>&nbsp;</td>
    <td><hr noshade size=1> </td>
    <td><hr noshade size=1> </td>
    <td>&nbsp;</td>
    <td><hr noshade size=1> </td>
    <td><hr noshade size=1> </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Funds
      from operations</font></td>
    <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7,126</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6,659</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">
      $</font></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">22,132</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">
      $</font></td>
    <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">21,186</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
    <td><hr noshade size=2></td>
    <td><hr noshade size=2></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Cash flows
      provided by (used in):</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;Operating
      activities</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">15,875</font></td>
    <td>&nbsp;</td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">12,624</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp;</td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp;</td>
    <td><hr noshade size=2> </td>
    <td><hr noshade size=2> </td>
    <td>&nbsp;</td>
    <td><hr noshade size=2> </td>
    <td><hr noshade size=2> </td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#ffffff">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;Investing
      activities</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(43,729</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(11,294</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp;</td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp;</td>
    <td><hr noshade size=2> </td>
    <td><hr noshade size=2> </td>
    <td>&nbsp;</td>
    <td><hr noshade size=2> </td>
    <td><hr noshade size=2> </td>
    <td>&nbsp;</td>
  </tr>
  <tr bgcolor="#eeeeee">
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;Financing
      activities</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">26,282</font></td>
    <td>&nbsp;</td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
    <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(16,867</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp;</td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp;</td>
    <td><hr noshade size=2> </td>
    <td><hr noshade size=2> </td>
    <td>&nbsp;</td>
    <td><hr noshade size=2> </td>
    <td><hr noshade size=2> </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="13"><hr align="left" width="100" size="1" noshade></td>
  </tr>
  <tr>
    <td><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">Notes:</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td colspan="13"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Does
      not include distributions paid to Series A and B Preferred OP Unitholders.</font></td>
  </tr>
</table>
<p align="center"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">20</font></p>
<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p21"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">LIQUIDITY AND CAPITAL RESOURCES </font></b>
</p>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">USES OF LIQUIDITY </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company&#146;s principal uses of its liquidity are expected to be for distributions to its shareholders and OP unitholders, debt service and loan repayments, and property investment which includes the funding of its joint venture commitments, acquisition, redevelopment, expansion and re-tenanting activities. </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Distributions </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In order to qualify as a REIT for Federal income tax purposes, the Company must, among other requirements, currently distribute at least 90% of its taxable income to its shareholders. On September 23, 2004, the Board of Trustees of the Company approved and declared a cash quarterly dividend for the quarter ended September 30, 2004 of $0.16 per Common Share and Common OP Unit. The dividend was paid on October 15, 2004 to shareholders of record as of September 30, 2004. The Company also paid a distribution of $22.50 per Series A Preferred OP Unit and $13.00 per Series B Preferred OP Unit on October 15, 2004. </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Acadia Strategic Opportunity Fund, LP (&#147;Fund I&#148;) </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In September of 2001, the Company committed $20.0 million to a newly formed joint venture formed with four of its institutional shareholders, who committed $70.0 million, for the purpose of acquiring a total of approximately $300.0 million of community and neighborhood shopping centers on a leveraged basis. Since the formation of Fund I, the Company has used it as the primary vehicle for the acquisition of assets. To date, Fund I has invested approximately $67.5 million of the total committed equity. Of the remaining unfunded equity commitment, Fund I anticipates investing approximately $14.1 million in the redevelopment and re-tenanting of currently owned assets and the balance of approximately $8.4 million in the RCP Venture as discussed below.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company is the manager and general partner of Fund I with a 22% interest. In addition to a pro-rata return on its invested equity, the Company is entitled to a profit participation based upon certain investment return thresholds. Cash flow is to be distributed pro-rata to the partners (including the Company) until they have received a 9% cumulative return (&#147;Preferred Return&#148;) on, and a return of all capital contributions. Thereafter, remaining cash flow is to be distributed 80% to the partners (including the Company) and 20% to the Company. The Company also earns a fee for asset management services equal to 1.5% of the total equity commitments, as well as market-rate fees for property management, leasing and construction services. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On March 11, 2004, Fund I, in conjunction with the Company&#146;s long-time investment partner, Hendon Properties (&#147;Hendon&#148;), purchased a $9.6 million first mortgage loan from New York Life Insurance Company for $5.5 million. The loan, which was secured by a 235,000 square foot shopping center in Aiken, South Carolina, was in default at acquisition. Fund I and Hendon acquired the loan with the intention of pursuing ownership of the property securing the debt. Fund I provided 90% of the equity capital and Hendon provided the remaining 10% of the equity capital used to acquire the loan. Hendon is entitled to receive profit participation in excess of its proportionate equity interest. The property is currently anchored by a Kroger supermarket and was
only 56% occupied at acquisition due to the vacancy of a former Kmart store. Subsequent to the acquisition of the loan, Fund I and Hendon obtained fee title to this property and currently plan to redevelop and re-anchor the center. The Company loaned $3.2 million to Fund I in connection with the purchase of the first mortgage loan. The note matures March 9, 2006, and bears interest at 7%. In addition to its loan to Fund I, the Company invested $0.9 million, primarily its pro-rata share of equity as a partner in Fund I. In September 2004, Fund I and the same unaffiliated partner purchased the Pine Log Plaza for $1.5 million.
The 35,000 square foot center is located in front of and adjacent to the Hitchcock Plaza. Related to this
transaction, the Company provided an additional $0.75 million loan to Fund I with a March 2006 maturity and
interest at 7% for the first year and 6% for the second year.</font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In May 2004, Fund I acquired a 50% interest in Haygood Shopping Center and Sterling Heights Shopping Center for an aggregate investment of $3.2 million. These assets are part of the portfolio that the Company currently manages as a result of its January 2004 acquisition of certain management contracts. The Haygood Shopping Center is a 165,000 square foot shopping center located in Virginia Beach, Virginia. The Sterling Heights Shopping Center is a 141,000 square foot shopping center located in Sterling Heights, Michigan. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In May 2004, Fund I and an unaffiliated partner, each with a 50% interest, acquired a 35,000 square foot shopping center in Tarrytown, New York, for $5.3 million. Related to this acquisition, the Company loaned $2.0 million to Fund I which bears interest at the prime rate and matures May 2005. In September 2004, Fund I and the same unaffiliated partner purchased the Pine Log Plaza for $1.5 million. The 35,000 square foot center is located in front of and adjacent to the Hitchcock Plaza. Related to this transaction, the Company provided an additional $0.75 million loan to Fund I with a March 2006 maturity and interest at 7% for the first year and 6% for the second year.</font></p>
</div>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">21</font>
</p>

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<div style="page-break-before:always"></div><a name="p22"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Acadia Strategic Opportunity Fund II, LLC (&#147;Fund II&#148;) </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On June 15, 2004, the Company closed its second discretionary acquisition fund, Acadia Strategic Opportunity Fund II, LLC (&#147;Fund II), which includes all of the investors from Fund I as well as two new institutional investors. With $300 million of committed discretionary capital, Fund II expects to be able to acquire up to $900 million of real estate assets on a leveraged basis. The Company is the managing member with a 20% interest in the joint venture. The terms and structure of Fund II are substantially the same as Fund I with the exceptions that the Preferred Return is 8% and the asset management fee is calculated on committed equity of $250 million for the first twelve months and then on the total committed equity of $300 million thereafter. Along with its current investment in the RCP Venture (see below), an additional investment strategy of Fund II is the acquisition of urban/infill redevelopment projects. To date, Fund II has invested in the two following urban/infill projects: </font>
</p></div>
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Fordham Road. </font>
</p>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On September 29, 2004, in conjunction with an investment partner, P/A Associates, Fund II purchased 400 East Fordham Road in the Bronx, NY for $30.2 million, inclusive of closing and other related acquisition costs. The Company had provided a bridge loan of $18.0 million to Fund II in connection with this acquisition. Subsequent to the acquisition, Fund II repaid this loan from the Company with $18.0 of proceeds from a new loan from a bank. The property, a multi-level retail and commercial building, is located at the intersection of East Fordham Road and Webster Avenue, near Fordham University, one of the strongest retail areas in The Bronx and the third largest retail corridor in New York City, with over 650,000 people in a two-mile radius and retail sales in excess of $500 million. Sears is the major tenant of the property, retailing on four levels. The redevelopment of the property is scheduled to commence in 2007 following the expiration of the Sears lease, which was originally signed in 1964. The strength of the retail market is evidenced by rents exceeding $75 per square foot with many retailers utilizing multi-level formats. As part of the redevelopment, there is the potential for additional expansion of up to 85,000 square feet of space. The total cost of the redevelopment project, including the acquisition cost of $30 million, is estimated to be between $35 and $40 million, depending on the ultimate scope of the project. </font>
</p></div>
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Pelham Manor </font>
</p>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On October 1, 2004, Fund II acquired a second urban/infill property in conjunction with P/A Associates. Fund II entered into a 95-year ground lease to redevelop a 16-acre site in Pelham Manor, Westchester County, New York. The property is in an upper middle-income, infill neighborhood located approximately 10 miles from Manhattan with over 400,000 people in a three-mile radius. The redevelopment contemplates the demolition of existing warehouse buildings, which will be replaced by a multi-anchor community retail center. We anticipate the redevelopment to cost between $30 and $33 million, with construction anticipated to commence within the next 12 to 24 months. In the interim, the property will continue to be operated as a warehouse facility. Prior to commencement of the redevelopment process, the ground rent payment is projected to equal the warehouse rents collected. </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">RCP Venture </font></b>
</p>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On January 27, 2004, the Company entered into the Retailer Controlled Property Venture (&#147;RCP Venture&#148;) with Klaff Realty, L.P. (&#147;Klaff&#148;) and its long-time capital partner Lubert-Adler Management, Inc. for the purpose of making investments in surplus or underutilized properties owned by retailers. The initial size of the RCP Venture is expected to be approximately $300 million in equity based on anticipated investments of approximately $1 billion.
Each participant in the RCP Venture has the right to opt out of any potential investment. The Company, primarily through Funds I and II, anticipates investing 20% of the equity of the RCP Venture. It is currently anticipated that approximately $20 million and $40 million will be invested by Funds I and II, respectively. Cash flow is to be distributed to the partners until they have received a 10% cumulative return and a full return of all contributions. Thereafter, remaining cash flow is to be distributed 20% to Klaff (&#147;Klaff&#146;s Promote&#148;) and 80% to the partners (including Klaff). Profits earned on up to $20.0 million of the Company&#146;s contributed capital are not subject to Klaff&#146;s Promote. The Company will also earn market-rate fees for property management, leasing and construction services on behalf of the RCP Venture. </font>
</p></div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company also acquired Klaff&#146;s rights to provide asset management, leasing, disposition, development and construction services for an existing portfolio of retail properties and/or leasehold interests comprised of approximately 10 million square feet of retail space located throughout the United States (the &#147;Klaff Properties&#148;). The acquisition involves only Klaff&#146;s rights associated with operating the Klaff Properties and does not include equity interests in assets owned by Klaff. The Operating Partnership issued $4.0 million of Series B Preferred OP Units to Klaff in consideration of this acquisition. </font>
</p></div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On September 2,
2004 affiliates of Funds I and Fund II, through separately organized, newly formed
limited liability companies on a non-recourse basis, invested in the acquisition
of Mervyn&#146;s through the RCP Venture, which as part of an investment consortium of Sun Capital and Cerberus, acquired Mervyn&#146;s from Target Corporation. The total acquisition price was $1.175 billion with such affiliates combined $23.2 million share of the investment divided equally between them. Mervyn&#146;s is a 257-store discount retailer with a very strong West Coast concentration, where the majority of the stores are well-located in high-barrier to entry markets, which we believe gives a recapitalized and refocused operator the opportunity to create a productive retail platform. </font>
</p>
</div>
<p align="center"> <font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
  22</font> </p>

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<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Property Redevelopment and Expansion </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company&#146;s
redevelopment program focuses on selecting well-located neighborhood and community
shopping centers and creating significant value through re-tenanting and property
redevelopment. During the nine months ended September 30, 2004, the Company completed
one
redevelopment
and had one ongoing redevelopment project as follows: </font>
</p>
</div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">New Loudon Center &#150; During 2003, the Company installed The Bon Ton Department Store, replacing the majority of space formerly occupied by a former Ames department store. The Company leased the balance of the former Ames space to Marshall&#146;s, an existing tenant at the center, which opened in its expanded 37,000 square foot store during 2004. The Company also installed a new 49,000 square foot Raymour and Flanigan furniture store at this center which opened during April of 2004. This project is now complete and is currently 100% occupied. </font>
</p></div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Town Line Plaza &#150; This project, located in Rocky Hill, Connecticut, was added to the Company&#146;s redevelopment pipeline in December of 2003. The Company is re-anchoring the center with a new Super Stop &amp; Shop supermarket, replacing a former GU Markets supermarket. The existing building is being demolished and will be replaced with a 66,000 square foot Super Stop &amp; Shop. The new supermarket anchor is paying gross rent at a 33% increase over that of the former tenant with no interruption in rent payments. Costs to date for this project totaled $1.7 million. All remaining redevelopment costs associated with this project, which is anticipated to be completed during the first quarter of 2005, are to be paid by Stop &amp; Shop. </font>
</p></div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Additionally, for the year ending December 31, 2004, the Company currently estimates that capital outlays of approximately $2.0 million to $2.5 million will be required for tenant improvements, related renovations and other property improvements. </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Share Repurchase </font></b>
</p>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company has an existing share repurchase program that authorizes management, at its discretion, to repurchase up to $20.0 million of the Company&#146;s outstanding Common Shares. Through November 5, 2004, the Company had repurchased 2.1 million Common Shares at a total cost of $11.7 million of which 1.3 million of these Common Shares have been subsequently reissued.
The program may be discontinued or extended at any time and there is no assurance that the Company will purchase the full amount authorized. There were no repurchases of securities during the nine months ended September 30, 2004.</font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">SOURCES OF LIQUIDITY </font></b>
</p>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company intends on using Funds I and II as the primary vehicles for future acquisitions, including investments in the RCP Venture. Sources of capital for funding the Company&#146;s joint venture commitments, other property acquisitions, redevelopment, expansion and re-tenanting, as well as future repurchases of Common Shares are expected to be obtained primarily from cash on hand, additional debt financings, issuance of public equity or debt instruments and possible sales of existing properties. </font>
</p></div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On November 4, 2004, the Company entered into an underwriting agreement with Citigroup Global Markets Inc., under which it has agreed to sell to Citigroup an aggregate of 3,000,000 Common Shares. The Company, Yale University and its affiliates (&#145;&#145;Yale&#146;&#146;) and Kenneth F. Bernstein, President and Chief Executive Officer of the Company, have agreed to sell 1,890,000, 1,000,000, and 110,000 Common Shares, respectively. Pursuant to the underwriting agreement, Citigroup has been granted a 30-day over-allotment option to purchase up to an additional 450,000 Common Shares (300,000 granted by the Company and 150,000 by Yale).
In connection with the offering, the Company and all insiders, including Yale, have agreed to a 90-day lockup period. The net proceeds to the Company will be approximately $28.4 million, which the Company intends to use to fund
future acquisitions, ongoing redevelopment projects and for general business purposes. Pending this application of the net proceeds, the Company intends to prepay outstanding indebtedness on one or more of its floating rate credit facilities.</font>
</p></div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">As of September 30, 2004, the Company had a total of approximately $20.3 million of additional borrowing capacity with four lenders. The Company also had cash and cash equivalents on hand of $13.1 million at September 30, 2004 as well as eleven properties that are currently unencumbered and therefore available as potential collateral for future borrowings. The Company anticipates that cash flow from operating activities will continue to provide adequate capital for all debt service payments, recurring capital expenditures and REIT distribution requirements.</font>
</p>
</div>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">23</font>
</p>

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<div style="page-break-before:always"></div><a name="p24"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Financing and Debt </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">At September 30,
2004, mortgage notes payable aggregated $225.0 million and were collateralized
by 20 properties and related tenant leases. Interest rates on the Company&#146;s
outstanding mortgage indebtedness ranged from 2.7% to 8.1% with maturities that
ranged from October 2005 to September 2014. Taking into consideration $86.3 million
of notional principal under variable to fixed-rate swap agreements currently
in effect, $170.5 million of the portfolio, or 76%, was fixed at a 6.5% weighted
average interest rate and $54.5 million, or 24% was floating at a 3.1% weighted
average interest rate. There is no debt maturing in 2004 and $8.7 million is
scheduled to mature in 2005 at a current weighted average interest rate of 3.3%.
The Company currently anticipates refinancing this indebtedness or selecting
other alternatives based on market conditions at that time. </font>
</p>
</div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The following summarizes the financing and refinancing transactions during the quarter ended September 30, 2004: </font>
</p></div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">On September 28, 2004, the Company drew down $20 million from existing lines of credit from two different banks. The proceeds from these drawdowns were utilized to advance $18 million to Fund II as a bridge loan to finance Fund II&#146;s
acquisition of a property located in the Bronx, New York. Subsequent to September
30, 2004, Fund II&#146;s advance was repaid upon financing of the acquisition with a bank.</font>
</p>
</div>
<div style="text-indent:3%"><p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Effective August
13, 2004, the Company refinanced an existing $7.9 million floating rate mortgage
loan with a $15 million fixed rate mortgage loan maturing in 2014. The terms
of the new mortgage loan, bearing interest at 5.6%, provide for interest-only
payments for two years, and principal and interest thereafter based on a 30-year
amortization with a balloon payment due at maturity of $13.1 million. In connection
with the refinancing, the Company was required to prepay $1.6 million of debt
collateralized by two other properties, and pay a prepayment penalty of $0.1
million which, together with unamortized deferred loan costs relating to this
debt, were expensed during the quarter. This transaction resulted in the Company&#146;s net liquidity increasing by $5.4 million. </font>
</p>
</div>
<div style="text-indent:3%">
  <p> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The following
    table summarizes the Company&#146;s mortgage indebtedness as of September
    30, 2004 and December 31, 2003: </font></p></div>

<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="center"><b><font size="1" face="Times New Roman, Times, serif">September
      30,</font></b><br><b><font size="1" face="Times New Roman, Times, serif">2004</font></b></td>
    <td align="center"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></b><b><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></b></td>
    <td align="center"><b><font size="1" face="Times New Roman, Times, serif">&nbsp;December
      31,<br>
</font></b><b><font size="1" face="Times New Roman, Times, serif">2003</font></b></td>
    <td align="center"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size="1" face="Times New Roman, Times, serif">Interest
      Rate<br>
    </font></b><b><font size="1" face="Times New Roman, Times, serif">at
    September 30, 2004</font></b></td>
    <td align="center"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></b><b><font size="1" face="Times New Roman, Times, serif">Maturity</font></b></td>
    <td align="center"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size="1" face="Times New Roman, Times, serif">Properties<br>
    </font></b><b><font size="1" face="Times New Roman, Times, serif">Encumbered</font></b></td>
    <td align="center"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
    <td align="center"><b><font size="1" face="Times New Roman, Times, serif">Payment<br>
</font></b><b><font size="1" face="Times New Roman, Times, serif">Terms</font></b></td>
    <td align="center"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><hr size="1" noshade> </td>
    <td><hr size="1" noshade> </td>
    <td><font face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><hr size="1" noshade> </td>
    <td><hr size="1" noshade> </td>
    <td><font face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><hr size="1" noshade></td>
    <td><font face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><hr size="1" noshade></td>
    <td><font face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><hr size="1" noshade></td>
    <td><font face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><hr size="1" noshade></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size="1" face="Times New Roman, Times, serif">Mortgage notes payable
      &#150; variable-rate</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">Sun
      America Life Insurance Company</font></td>
    <td width="1%" align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">$</font></td>
    <td width="9%" align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">8,994</font></td>
    <td width="2%" align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td width="1%" align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">$</font></td>
    <td width="9%" align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">9,191</font></td>
    <td width="2%" align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td width="14%" align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">3.33
      % (LIBOR + 1.73%</font></td>
    <td width="2%" align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td width="7%" align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">10/01/05</font></td>
    <td width="2%" align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td width="8%" align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(1</font></td>
    <td width="2%" align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td width="8%" align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(14</font></td>
    <td width="2%" align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1" face="Times New Roman, Times, serif">Washington Mutual
      Bank, FA</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">24,629</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">20,083</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">3.54
      % (LIBOR + 1.85%</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">01/01/07</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(2</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(14</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">Washington
      Mutual Bank, FA</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">6,000</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1">&#8212;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">3.37
      % (LIBOR + 1.50%</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">11/22/07</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(3</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(15</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1" face="Times New Roman, Times, serif">Fleet National Bank</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">7,029</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1">&#8212;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">3.31
      % (LIBOR + 1.50%</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">03/01/08</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(4</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(16</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">Fleet
      National Bank</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">8,504</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">8,598</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">3.05
      % (LIBOR + 1.40%</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">12/01/08</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(5</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(14</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1" face="Times New Roman, Times, serif">Washington Mutual
      Bank, FA</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">30,092</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">50,686</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">3.19
      % (LIBOR + 1.50%</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">04/01/11</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(6</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(14</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">Fleet
      National Bank</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">44,485</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">23,130</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">2.70
      % (LIBOR + 1.05%</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">06/29/12</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(7</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(17</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1" face="Times New Roman, Times, serif">Fleet National Bank</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">11,092</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">8,992</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">2.70
      % (LIBOR + 1.05%</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">06/29/12</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(8</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(14</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1">&nbsp;</font></td>
    <td><hr size="1" noshade></td>
    <td align="right"><hr size="1" noshade></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><hr size="1" noshade></td>
    <td align="right"><hr size="1" noshade></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Total
      variable-rate debt</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">140,825</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">120,680</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1">&nbsp;</font></td>
    <td><hr size="1" noshade></td>
    <td align="right"><hr size="1" noshade></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><hr size="1" noshade></td>
    <td align="right"><hr size="1" noshade></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1" face="Times New Roman, Times, serif">Mortgage notes payable
      &#150; fixed-rate</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">Sun
      America Life Insurance Company</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">13,270</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">13,425</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">6.46%</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">07/01/07</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(9</font></td>
    <td width="2%" align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(14</font></td>
    <td width="2%" align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1" face="Times New Roman, Times, serif">Lehman Brothers</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">23,803</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">24,113</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">8.13%</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">11/01/10</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(10</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(14</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">Bank
      of America, N.A.</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">16,106</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">16,226</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">7.55%</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">01/01/11</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(11</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(14</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1" face="Times New Roman, Times, serif">RBS Greenwich Capital</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">16,000</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">16,000</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">5.19%</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">06/01/13</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(12</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right"><font size="1" face="Times New Roman, Times, serif">(18</font></td>
    <td align="left"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">RBS
      Greenwich Capital</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">15,000</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1">&#8212;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">5.64%</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">09/06/14</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(13</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">(19</font></td>
    <td align="left" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">)</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1">&nbsp;</font></td>
    <td><hr size="1" noshade></td>
    <td align="right"><hr size="1" noshade></td>
    <td><font size="1">&nbsp;</font></td>
    <td><hr size="1" noshade></td>
    <td align="right"><hr size="1" noshade></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;Total
      fixed-rate debt</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">84,179</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">69,764</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1">&nbsp;</font></td>
    <td><hr size="1" noshade></td>
    <td align="right"><hr size="1" noshade></td>
    <td><font size="1">&nbsp;</font></td>
    <td><hr size="1" noshade></td>
    <td align="right"><hr size="1" noshade></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">$</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">225,004</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">$</font></td>
    <td align="right" bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">190,444</font></td>
    <td bgcolor="#eeeeee"><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td><hr size="2" noshade></td>
    <td align="right"><hr size="2" noshade></td>
    <td>&nbsp;</td>
    <td><hr size="2" noshade></td>
    <td align="right"><hr size="2" noshade></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td colspan="2"><hr align="left" width="100" size="1" noshade></td>

  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">Notes:</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td width="3%"><font size="1" face="Times New Roman, Times, serif">(1)</font></td>
    <td width="25%"><font size="1" face="Times New Roman, Times, serif">Village
      Apartments</font></td>
    <td width="3%"><font size="1" face="Times New Roman, Times, serif">(7)</font></td>
    <td width="25%"><font size="1" face="Times New Roman, Times, serif">Branch
      Shopping Center</font></td>
    <td width="3%"><font size="1" face="Times New Roman, Times, serif">(14)</font></td>
    <td width="41%"><font size="1" face="Times New Roman, Times, serif"> Monthly
      principal and interest.</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Abington Towne Centre</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">(2)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Walnut Hill Plaza</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Methuen Shopping Center</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">(15)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif"> Interest only monthly.</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Bloomfield Town Square</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Gateway Shopping Center</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Town Line Plaza</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">(16)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif"> Interest only monthly
      until fully drawn; monthly principal</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">(3)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Elmwood Park Shopping
      Center; </font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">and interest thereafter.</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">$6,000 is outstanding
      under this</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">(8)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Smithtown Shopping
      Center</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">$20,000 revolving
      facility.</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">(17)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif"> Annual principal
      and monthly interest.</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">(9)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Merrillville Plaza</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">(4)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Marketplace of Absecon;
      $7,029 is </font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">(18)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif"> Interest only monthly
      until 5/05; monthly principal and interest</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">outstanding under
      this $7,400</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">(10)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Crescent Plaza</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">thereafter.</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">revolving facility.</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">East End Centre</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">(19)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif"> Interest only monthly
      until 9/06; monthly principal and interest thereafter.</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">(5)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Soundview Marketplace</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">(11)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">GHT Apartments / Colony
      Apartments</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">(6)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Ledgewood Mall</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">(12)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">239 Greenwich Avenue</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">Bradford Towne Centre</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
  <tr>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">(13)</font></td>
    <td><font size="1" face="Times New Roman, Times, serif">New Loudon Center</font></td>
    <td><font size="1">&nbsp;</font></td>
    <td><font size="1">&nbsp;</font></td>
  </tr>
</table>
  <p align="center"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">24</font> </p>
  <hr noshade align="center" width="100%" size="2">



<div style="page-break-before:always"></div><a name="p25"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">At September 30, 2004, maturities on the Company&#146;s mortgage notes ranged from October 2005 to September 2014. In addition, the Company has non-cancelable ground leases at three of its shopping centers. The Company also leases space for its White Plains corporate office for a term expiring in 2010. The following table summarizes the Company&#146;s debt maturities, excluding scheduled monthly amortization payments, and obligations under non-cancelable operating leases as of September 30, 2004: </font>
</p></div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
<tr align="center" valign="bottom">
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td><font size="1">&nbsp;</font></td>
   <td colspan="13"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Payments due by period</font></b></td>
   <td rowspan="4"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
</tr>
<tr>
  <td>&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td colspan="14" align="right" valign="bottom">        <hr noshade size=1>          </td>
  </tr>
<tr align="center" valign="bottom">
   <td align="left"><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Contractual obligation</font></b></td>
   <td>&nbsp;</td>
   <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Total</font></b></td>
   <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>Less
         than<br>
</b></font><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>1
year</b></font></td>
   <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">1 to 3<br>
   </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">years</font></b></td>
   <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">3 to 5<br>
   </font></b><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">years</font></b></td>
   <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">More
    than</font></b><font size="1" face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b><br>
5 years </b></font></td>
  </tr>
<tr>
  <td><hr noshade size=1></td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td colspan="2" align="right" valign="bottom"><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td colspan="2" align="right" valign="bottom"><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td colspan="2" align="right" valign="bottom"><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td colspan="2" align="right" valign="bottom"><hr noshade size=1>
  </td>
  <td>&nbsp;</td>
  <td colspan="2" align="right" valign="bottom"><hr noshade size=1>
  </td>
  </tr>
<tr>
  <td>&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td colspan="13" align="center" valign="bottom"><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif"><b>(amounts
    in millions)</b></font></td>
  <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Future debt maturities</font></td>
   <td width=2% align="right" valign="bottom" bgcolor="#eeeeee">&nbsp;</td>
   <td width=1% align="right" valign="bottom" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width="10%" align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">188.0</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
   <td width=1% align="right" valign="bottom" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width="10%" align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
   <td width=1% align="right" valign="bottom" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width="10%" align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8.7</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
   <td width=1% align="right" valign="bottom" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width="10%" align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">56.5</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
   <td width=1% align="right" valign="bottom" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width="10%" align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">122.8</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Operating lease obligations</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">22.4</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.3</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2.0</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2.0</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">18.1</font></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td colspan="2"><hr noshade size=1>
   </td>
   <td align="right">&nbsp;   </td>
   <td colspan="2"><hr noshade size=1>
   </td>
   <td align="right">&nbsp;   </td>
   <td colspan="2"><hr noshade size=1>
   </td>
   <td align="right">&nbsp;   </td>
   <td colspan="2"><hr noshade size=1>
   </td>
   <td align="right">&nbsp;   </td>
   <td colspan="2"><hr noshade size=1>
   </td>
   <td align="right">&nbsp;   </td>
</tr>
<tr>
   <td bgcolor="#eeeeee">&nbsp;&nbsp;&nbsp;<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Total</font></td>
   <td align="center" bgcolor="#eeeeee">&nbsp;</td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">210.4</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.3</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">10.7</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">58.5</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="center" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">140.9</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td colspan="2"><hr noshade size=2>
   </td>
   <td>&nbsp;</td>
   <td colspan="2"><hr noshade size=2>
   </td>
   <td>&nbsp;</td>
   <td colspan="2"><hr noshade size=2>
   </td>
   <td>&nbsp;</td>
   <td colspan="2"><hr noshade size=2>
   </td>
   <td>&nbsp;</td>
   <td colspan="2"><hr noshade size=2>
   </td>
   <td>&nbsp;</td>
</tr>
</table>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">OFF BALANCE SHEET ARRANGEMENTS </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company has three off balance sheet joint ventures for the purpose of investing in operating properties as follows: </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company owns a 49% interest in two partnerships which own the Crossroads Shopping Center (&#147;Crossroads&#148;). The Company accounts for its investment in Crossroads using the equity method of accounting as it has a non-controlling investment in Crossroads, but exercises significant influence. As such, the Company&#146;s financial statements reflect its share of income from, but not the assets and liabilities of, Crossroads. The Company&#146;s pro rata share of Crossroads mortgage debt as of September 30, 2004 was $15.9 million. Interest on the debt, which matures in October 2007, has been effectively fixed at 7.2% through variable to fixed-rate swap agreements. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Reference is made to the discussion of Funds I and II under &#147;Uses of Liquidity&#148; in this Item 2 for additional detail related to the Company&#146;s investment in and commitments to Funds I and II. The Company owns a 22% interest in Fund I for which it also uses the equity method of accounting. The Company&#146;s pro rata share of Fund I fixed-rate mortgage debt as of September 30, 2004 was $21.8 million at a weighted average interest rate of 6.4%. The Company&#146;s pro rata share of Fund I variable-rate mortgage debt as of September 30, 2004 was $2.5 million at an interest rate of 4.2%. Maturities on these loans range from May 2005 to January 2023. The Company owns a 20% interest in Fund II for which it also uses the equity method of accounting. Fund II had no mortgage indebtedness as of September 30, 2004. </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">HISTORICAL CASH FLOW</font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The following discussion of historical cash flow compares the Company&#146;s cash flow for the nine months ended September 30, 2004 (&#147;2004&#148;) with the Company&#146;s cash flow for the nine months ended September 30, 2003 (&#147;2003&#148;). </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Cash and cash equivalents
were $13.1 million and $29.6 million at September 30, 2004 and 2003, respectively.
The decrease of $16.5 million was a result of the following increases and decreases
in cash flows: </font>
</p>
</div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
<tr>
   <td rowspan="4">&nbsp;</td>
   <td>&nbsp;</td>
   <td colspan=7 align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Nine months ended September 30,</font></b></td>
   <td rowspan="4"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
</tr>
<tr>
  <td colspan="8"><hr noshade size=1>
  </td>
  </tr>
<tr>
   <td>&nbsp;</td>
   <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2004</font></b></td>
   <td rowspan="2"><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">2003</font></b></td>
   <td rowspan="2"><font size="1">&nbsp;</font></td>
   <td><font size="1">&nbsp;</font></td>
   <td align="center"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Change</font></b></td>
  </tr>
<tr>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
  </tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net cash provided by operating activities</font></td>
   <td width=1% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">15.9</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">12.6</font></td>
   <td width=2%>&nbsp;</td>
   <td width=1% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3.3</font></td>
   <td width=2%>&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net cash used in investing activities</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(43.7</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(11.3</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(32.4</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
</tr>
<tr bgcolor="#eeeeee">
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Net cash provided by (used in) financing activities</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">26.3</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(16.9</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">)</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">43.2</font></td>
   <td>&nbsp;</td>
</tr>
</table>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The variance in
net cash provided by operating activities resulted from an increase of $2.4
million in operating income before non-cash expenses in 2004, which was primarily
due to an increase in rents following the redevelopment of the Gateway Shopping
Center,
re-tenanting activities and increased occupancy across the portfolio as well as an increase in management fee income. In addition, a net increase in
cash provided by changes in operating assets and liabilities of $0.9 million resulted primarily from an increase in accounts payable and accrued expenses.</font>
</p>
</div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The variance in
net cash used in investing activities was primarily the result of additional
investments in and advances to unconsolidated partnerships of $27.6 million in
2004 as well as $10.1
million
of
notes
issued
in
2004. These increases were partially
offset
by
a
$2.5
million earn-out
payment in 2003 related to a redevelopement project and a $1.9 million decrease in expenditures for real estate
acquisitions, development and tenant installations during 2004.</font>
</p>
</div>
<div style="text-indent:3%">
<p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The increase
    in net cash provided by (used in) financing activities resulted primarily
    from $8.2 million of cash provided by the exercise
    of stock options in 2004 and $55.3 million of cash provided by additional
    borrowings in 2004. These increases were offset by $17.1 million of additional
     cash used for the repayment of debt in
    2004 and $2.2 million of additional cash paid for dividends and distributions
    on Common OP units in 2004.</font>
</p>
</div>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">25</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p26"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>


<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">INFLATION </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company&#146;s long-term leases contain provisions designed to mitigate the adverse impact of inflation on the Company&#146;s net income. Such provisions include clauses enabling the Company to receive percentage rents based on tenants&#146; gross sales, which generally increase as prices rise, and/or, in certain cases, escalation clauses, which generally increase rental rates during the terms of the leases. Such escalation clauses are often related to increases in the consumer price index or similar inflation indexes. In addition, many of the Company&#146;s leases are for terms of less than ten years, which permits the Company to seek to increase rents upon re-rental at market rates if rents are below the then existing market rates. Most of the Company&#146;s leases require the tenants to pay their share of operating expenses, including CAM, real estate taxes, insurance and utilities, thereby reducing the Company&#146;s exposure to increases in costs and operating expenses resulting from inflation. </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Item 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Quantitative
and Qualitative Disclosures about Market Risk </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Company&#146;s primary market risk exposure is to changes in interest rates related to the Company&#146;s mortgage debt. See the discussion under Item 2. for certain quantitative details related to the Company&#146;s mortgage debt. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Currently, the Company manages its exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap agreements. The Company is a party to current and forward-starting interest rate swap transactions to hedge the Company&#146;s exposure to changes in LIBOR with respect to $86.3 and $62.2 million of notional principal, respectively. The Company also has two interest rate swaps hedging the Company&#146;s exposure to changes in interest rates with respect to $15.9 million of LIBOR based variable-rate debt related to its investment in Crossroads. </font>
</p>
<p></div>
<div style="text-indent:3%">
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The following table sets forth information as of September 30, 2004 concerning the Company&#146;s long-term debt obligations, including principal cash flows by scheduled maturity and weighted average interest rates of maturing amounts (amounts in millions): </font>
<p></p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Consolidated mortgage debt: </font>
</p></div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
   <td rowspan="3" align="left" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Year</font></b></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td align="center" valign="bottom"><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="2" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="2" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Weighted</font></b></td>
   <td rowspan="3">&nbsp;</td>
</tr>
<tr>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Scheduled</font></b></td>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">average</font></b></td>
  </tr>
<tr>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Amortization</font></b></td>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Maturities</font></b></td>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Total</font></b></td>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">interest rate</font></b></td>
  </tr>
<tr>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2004</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
   <td width=1% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.8</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
   <td width=1% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
   <td width=1% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.8</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
   <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">n/a</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2005</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3.0</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8.7</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11.7</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3.3</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2006</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3.5</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3.5</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">n/a</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2007</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.4</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">41.5</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">45.9</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.4</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2008</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5.0</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">15.0</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">20.0</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3.2</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Thereafter</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">20.3</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">122.8</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">143.1</font></td>
   <td>&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.9</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">37.0</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">188.0</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">225.0</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
</table>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Mortgage debt in unconsolidated partnerships (at Company&#146;s pro rata share):</font>
</p></div>
<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr>
   <td rowspan="2">&nbsp;</td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td align="center" valign="bottom"><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="2" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="2" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td rowspan="3" align="center" valign="bottom"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Weighted</font></b></td>
   <td rowspan="3">&nbsp;</td>
</tr>
<tr>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Scheduled</font></b></td>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">average</font></b></td>
  </tr>
<tr>
   <td><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Year</font></b></td>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">amortization</font></b></td>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Maturities</font></b></td>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Total</font></b></td>
   <td align="center" valign="bottom"><b><font size=1 face="TimesNewRoman,Bold,Times New Roman,Times,serif">interest rate</font></b></td>
  </tr>
<tr>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td><hr noshade size=1></td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2004</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
   <td width=1% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.1</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
   <td width=1% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
   <td width=1% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">0.1</font></td>
   <td width=2% align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td width=10% align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">n/a</font></td>
   <td width=2% bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2005</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1.3</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1.2</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2.5</font></td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.5</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2006</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1.4</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&#151;</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1.4</font></td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">n/a</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2007</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1.3</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">16.0</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">17.3</font></td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6.9</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
</tr>
<tr>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2008</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1.0</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">6.7</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7.7</font></td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.7</font></td>
   <td bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
</tr>
<tr>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Thereafter</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3.7</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7.4</font></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">11.1</font></td>
   <td align="right">&nbsp;</td>
   <td align="right"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">7.1</font></td>
   <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">%</font></td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=1></td>
   <td align="right"><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=1></td>
   <td align="right"><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=1></td>
   <td align="right"><hr noshade size=1></td>
   <td>&nbsp;</td>
   <td align="right">&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">8.8</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">31.3</font></td>
   <td bgcolor="#eeeeee">&nbsp;</td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">$</font></td>
   <td align="right" bgcolor="#eeeeee"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">40.1</font></td>
   <td align="right" bgcolor="#eeeeee">&nbsp;</td>
    <td align="right" bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td><hr noshade size=2></td>
   <td><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td align="right"><hr noshade size=2></td>
   <td align="right"><hr noshade size=2></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
</table>
<div style="text-indent:3%">
<p>
  <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Of the Company&#146;s total outstanding debt, $8.7 million will become due at maturity in 2005. As the Company intends on refinancing some or all of such debt at the then-existing market interest rates which may be greater than the current interest rate, the Company&#146;s interest expense would increase by approximately $0.1 million annually if the interest rate on the refinanced debt increased by 100 basis points. Furthermore, interest expense on the Company&#146;s
  variable debt as of September 30, 2004 would increase by $0.5 million annually
  for a 100 basis point increase in interest rates. The Company may seek additional
  variable-rate financing if and when pricing and other commercial and financial
  terms warrant. As such, the Company would consider hedging against the interest
  rate risk related to such additional variable-rate debt through interest rate
  swaps and protection agreements, or other means. </font>
</p></div>
<p align="center"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
26
</font></p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div><a name="p27"></a><page><p><a href="#index"><font size="2">Back to Index</font></a></p>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Item 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Controls
and Procedures </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(a) </font><i><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Evaluation of Disclosure Controls and Procedures.</font></i><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> The Company&#146;s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company&#146;s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d 15(e) under the Securities Exchange Act of 1934, as amended as of the end of the period covered by this report. Based on such evaluation, the Company&#146;s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company&#146;s disclosure controls and procedures are effective. </font>
</p></div>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(b) </font><i><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Internal Control over Financial Reporting.</font></i><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"> There have not been any changes in the Company&#146;s internal control over financial reporting during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company&#146;s internal control over financial reporting. </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Part II.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Information </font></b>
</p>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Legal Proceedings </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">There have been no material legal proceedings beyond those previously disclosed in the Company&#146;s filed Annual Report on Form 10 K for the year ended December 31, 2003. </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Item 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in Securities </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">None </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Item 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defaults Upon Senior Securities </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">None </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Item 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Submission of Matters to a Vote of Security Holders </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">None </font>
</p></div>
<p>
<b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Item 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Information </font></b>
</p>
<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">None </font>
</p></div>
<p> <b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif"><a name="p27a"></a>Item
  6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits and Reports on Form 8-K </font></b> </p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(a)</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Exhibits </font></td>
  </tr>
</table>
<br>

<table width="100%" align="center" border=0 cellspacing=0 cellpadding=0>
<tr align="left" valign="top">
   <td width="3%"><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td width="8%"><font size=1 face="Times New Roman, Times, serif">Exhibit No.</font></td>
   <td width="3%"><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td width="89%"><font size=1 face="Times New Roman, Times, serif">Description</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">3.1</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Declaration of Trust of the Company, as amended (1)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">3.2</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Fourth Amendment to Declaration of Trust (4)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">3.3</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">By-Laws of the Company (5)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">4.1</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Voting Trust Agreement between the Company and Yale University dated February 27, 2002 (14)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.1</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">1999 Share Option Plan (8) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.2</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">2003 Share Option Plan (16) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.3</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Form of Share Award Agreement (17) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.4</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Form of Registration Rights Agreement and Lock-Up Agreement (18)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.5</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Registration Rights and Lock-Up Agreement (RD Capital Transaction) (11)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.6</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Registration Rights and Lock-Up Agreement (Pacesetter Transaction) (11)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.7</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Contribution and Share Purchase Agreement dated as of April 15, 1998 among Mark Centers Trust, Mark Centers Limited Partnership, the Contributing Owners and Contributing Entities named therein, RD Properties, L.P. VI, RD Properties, L.P. VIA and RD Properties, L.P. VIB (9)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.8</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Agreement of Contribution among Acadia Realty Limited Partnership, Acadia Realty Trust and Klaff Realty, LP and Klaff Realty, Limited (18)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.9</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Employment agreement between the Company and Kenneth F. Bernstein (6) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.10</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Employment agreement between the Company and Ross Dworman (6) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.11</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Amendment to employment agreement between the Company and Kenneth F. Bernstein (18) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.12</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">First Amendment to Employment Agreement between the Company and Kenneth Bernstein dated as of January 1, 2001 (12) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.13</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">First Amendment to Employment Agreement between the Company and Ross Dworman dated as of January 1, 2001 (12) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.14</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Letter of employment offer between the Company and Michael Nelsen, Sr. Vice President and Chief Financial Officer dated February 19, 2003 (15) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.15</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Severance Agreement between the Company and Joel Braun, Sr. Vice President, dated April 6, 2001 (13) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.16</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Severance Agreement between the Company and Joseph Hogan, Sr. Vice President, dated April 6, 2001 (13) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.17</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Severance Agreement between the Company and Joseph Napolitano, Sr. Vice President dated April 6, 2001 (18) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.18</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Severance Agreement between the Company and Robert Masters, Sr. Vice President and General Counsel dated January 2001 (18) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.19</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Severance Agreement between the Company and Michael Nelsen, Sr. Vice President and Chief Financial Officer dated February 19, 2003 (15) (20)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.20</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Secured Promissory Note between RD Absecon Associates, L.P. and Fleet Bank, N.A. dated February 8, 2000 (7)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.21</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Promissory Note between 239 Greenwich Associates, L.P. and Greenwich Capital Financial Products, Inc. dated May 30, 2003 (18)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.22</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Open-End Mortgage, Assignment of Leases and Rents, and Security Agreement between 239 Greenwich Associates, L.P. and Greenwich Capital Financial Products, Inc. dated May 30, 2003 (18)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.23</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Promissory Note between Merrillville Realty, L.P. and Sun America Life Insurance Company dated July 7, 1999 (7)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.24</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Secured Promissory Note between Acadia Town Line, LLC and Fleet Bank, N.A. dated March 21, 1999 (7)</font></td>
</tr>
</table>
<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">27</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font size="2"><a name="p29"></a><page>
<p><a href="#index">Back to Index</a></p>


</font>
<table width="100%" align="center" border=0 cellspacing=0 cellpadding=0>
<tr align="left" valign="top">
   <td width="3%"><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td width="8%"><font size=1 face="Times New Roman, Times, serif">10.25</font></td>
   <td width="3%"><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td width="89%"><font size=1 face="Times New Roman, Times, serif">Promissory Note between RD Village Associates Limited Partnership and Sun America Life Insurance Company Dated September 21, 1999 (7)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.26</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Amended and Restated Mortgage Note between Port Bay Associates, LLC and Fleet Bank, N.A. dated July 19, 2000 (3)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.27</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Mortgage and Security Agreement between Port Bay Associates, LLC and Fleet Bank, N.A. dated July 19, 2000 (10)</font></td>
  </tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.28</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Mortgage Note between Port Bay Associates, LLC and Fleet Bank, N.A. dated December 1, 2003 (18)</font></td>
  </tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.29</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Mortgage and Security Agreement, and Assignment of Leases and Rents between Port Bay Associates, LLC and Fleet Bank, N.A. dated December 1, 2003 (18)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.30</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Note Modification Agreement between Port Bay Associates, LLC and Fleet Bank, N.A. dated December 1, 2003 (18)</font></td>
  </tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.31</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Amended and Restated Promissory Note between Acadia Realty L.P. and Metropolitan Life Insurance Company for $25.2 million dated October 13, 2000 (10)</font></td>
  </tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.32</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Amended and Restated Mortgage, Security Agreement and Fixture Filing between Acadia Realty L.P. and Metropolitan Life Insurance Company dated October 13, 2000 (10)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.33</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Term Loan Agreement between Acadia Realty L.P. and The Dime Savings Bank of New York, dated March 30, 2000 (10)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.34</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Mortgage Agreement between Acadia Realty L.P. and The Dime Savings Bank of New York, dated March 30, 2000 (10)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.35</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Promissory Note between RD Whitegate Associates, L.P. and Bank of America, N.A. dated December 22, 2000 (10)</font></td>
  </tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.36</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Promissory Note between RD Columbia Associates, L.P. and Bank of America, N.A. dated December 22, 2000 (10)</font></td>
  </tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.37</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Term Loan Agreement dated as of December 28, 2001, among Fleet National Bank and RD Branch Associates, L.P., et al (13)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.38</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Term Loan Agreement dated as of December 21, 2001, among RD Woonsocket Associates Limited Partnership, et al. and The Dime Savings Bank of New York, FSB (13)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.39</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Option Extension of Term Loan as of December 19, 2003 between RD Woonsocket Associates Limited Partnership, et al. and Washington Mutual Bank, FA (18)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.40</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Revolving Loan Promissory Note dated as of November 22, 2002, among RD Elmwood Associates, L.P. and Washington Mutual Bank, FA (15)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.41</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Revolving Loan Agreement dated as of November 22, 2002, among RD Elmwood Associates, L.P. and Washington Mutual Bank, FA (15)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.42</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Mortgage Agreement dated
       as of November 22, 2002, among RD Elmwood Associates, L.P. and Washington
       Mutual Bank, FA (15)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">10.43</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Note Modification Agreement between RD Elmwood Associates, L.P. and Washington Mutual Bank, FA dated December 19, 2003 (18)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">31.1</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Certification of Chief
       Executive Officer pursuant to rule 13a&#150;14(a)/15d-14(a) of the Securities
       Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002 (19)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">31.2</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Certification of Chief
       Financial Officer pursuant to rule 13a&#150;14(a)/15d-14(a) of the Securities
       Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002 (19)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">32.1</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (19)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">32.2</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (19)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">99.1</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Amended and Restated Agreement of Limited Partnership of the Operating Partnership (11)</font></td>
  </tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">99.2</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">First and Second Amendments to the Amended and Restated Agreement of Limited Partnership of the Operating Partnership (11)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">99.3</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Third Amendment to Amended and Restated Agreement of Limited Partnership of the Operating Partnership (18)</font></td>
  </tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">99.4</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Fourth Amendment to Amended and Restated Agreement of Limited Partnership of the Operating Partnership (18)</font></td>
  </tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">99.5</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Certificate of Designation of Series A Preferred Operating Partnership Units of Limited Partnership Interest of Acadia Realty Limited Partnership (2)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">99.6</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Certificate of Designation of Series B Preferred Operating Partnership Units of Limited Partnership Interest of Acadia Realty Limited Partnership (18)</font></td>
</tr>
</table>

<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">28</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font size="2"><a name="p29"></a><page>
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</font>

<table width="100%" align="center" border=0 cellspacing=0 cellpadding=0>
<tr>
   <td><font size=1 face="Times New Roman, Times, serif">Notes:</font></td>
   <td>&nbsp;</td>
   <td>&nbsp;</td>
</tr>
<tr align="left" valign="top">
   <td width="3%"><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td width="8%"><font size=1 face="Times New Roman, Times, serif">(1)</font></td>
   <td width="3%"><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td width="89%"><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Annual Report
    on Form 10-K filed for the fiscal Year ended December 31, 1994</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(2)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to Company&#146;s Quarterly Report
    on Form 10-Q filed for the quarter ended June 30, 1997</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(3)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to Company&#146;s Quarterly Report
    on Form 10-Q filed for the quarter ended June 30, 1998</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(4)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to Company&#146;s Quarterly Report
    on Form 10-Q filed for the quarter ended September 30, 1998</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(5)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Registration
    Statement on Form S-11 (File No.33-60008)</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(6)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Annual Report
    on Form10-K filed for the fiscal year ended December 31, 1998</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(7)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Annual Report
    on Form10-K filed for the fiscal year ended December 31, 1999</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(8)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Registration
    Statement on Form S-8 filed September 28, 1999</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(9)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Form 8-K
    filed on April 20, 1998</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(10)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Form 10-K
    filed for the fiscal year ended December 31, 2000</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(11)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Registration
    Statement on Form S-3 filed on March 3, 2000</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(12)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to Company&#146;s Quarterly Report
    on Form 10-Q filed for the quarter ended June 30, 2001</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(13)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Annual Report
    on Form 10-K filed for the fiscal year ended December 31, 2001</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(14)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to Yale University&#146;s Schedule
    13D filed on September 25, 2002</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(15)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Annual Report
       on Form 10-K filed for the fiscal year ended December 31, 2002</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(16)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference to the copy thereof filed as an Exhibit to the Company&#146;s Definitive Proxy Statement on Schedule 14A filed April 29, 2003.</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(17)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Current
    Report on Form 8-K filed on July 2, 2003</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(18)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Incorporated by reference
       to the copy thereof filed as an Exhibit to the Company&#146;s Annual Report
    on Form 10-K filed for the fiscal year ended December 31, 2003</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(19)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Filed herewith.</font></td>
</tr>
<tr align="left" valign="top">
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">(20)</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">&nbsp;</font></td>
   <td><font size=1 face="Times New Roman, Times, serif">Management contract or compensatory plan or arrangement.</font></td>
</tr>
</table>


<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;
  </tr>
  <tr>
    <td width="3%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(b)</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Reports
        on Form
8-K </font>
  </tr>
</table>

<div style="text-indent:3%">
<p>
<font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The following Form 8-Ks were filed, or furnished as noted in the applicable Form 8-K, during the quarter ended September 30, 2004: </font>
</p></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%" align="left" valign="top"><font size="1">&nbsp;</font></td>
    <td width="3%" align="left" valign="top"><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">1)</font><font size="1">&nbsp;</font></td>
    <td><font size="1"><font face="TimesNewRoman,Times New Roman,Times,serif">Form
          8-K filed July 21, 2004 (earliest event July 21, 2004), reporting in
          Item 5, a press release announcing the Company entered into a joint
    venture agreement with six institutional investors. </font></font> </td>
  </tr>
  <tr>
    <td align="left" valign="top"><font size="1">&nbsp;</font></td>
    <td align="left" valign="top"><font size="1" face="TimesNewRoman,Times New Roman,Times,serif">2)</font></td>
    <td><font size=1 face="TimesNewRoman,Times New Roman,Times,serif">Form 8-K
        filed July 26, 2004 (earliest event July 26, 2004), reporting in Item
        12, a press release announcing the consolidated financial results for
        the quarter ended June 30, 2004 as made available as an exhibit to the
    filing.</font></td>
  </tr>
  <tr>
    <td align="left" valign="top"><font size="1">&nbsp;</font></td>
    <td align="left" valign="top"><font size="1" face="TimesNewRoman,Times New Roman,Times,serif">3)</font></td>
    <td><font size="1" face="TimesNewRoman,Times New Roman,Times,serif">Form
        8-K filed July 29, 2004 (earliest event July 29, 2004), reporting in
        Item 7, certain supplemental information concerning the ownership, operations
        and portfolio of the Registrant as of June 30, 2004 as made available
    as an exhibit to the filing.</font></td>
  </tr>
  <tr>
    <td align="left" valign="top"><font size="1">&nbsp;</font></td>
    <td align="left" valign="top"><font size="1" face="TimesNewRoman,Times New Roman,Times,serif">4)</font></td>
    <td><font size="1" face="TimesNewRoman,Times New Roman,Times,serif">Form
        8-K filed September 2, 2004 (earliest event September 2, 2004), reporting
        in Item 8.01, an initial investment of $23.2 million into an affiliate
        of Lubert-Adler/Klaff, which is part of the investment consortium, along
        with Sun Capital Partners, Inc. and Cerberus Capital Management, L.P.,
    that acquired Mervyn&#146;s. </font></td>
  </tr>
  <tr>
    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>


<p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">29</font>
</p>

<hr noshade align="center" width="100%" size="2">

<div style="page-break-before:always"></div>
<font size="2"><a name="p30"></a><page>
<p><a href="#index">Back to Index</a></p>
<p align="center">
  <b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif">SIGNATURES </font></b>
</p>
</font>
<p><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has fully caused this report to be signed on its behalf by the undersigned
thereunto duly authorized. </font>
</p>
<p align="center"><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif">
<b>ACADIA REALTY TRUST </b>
</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr align="left" valign="top">
    <td><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">November
    8, 2004</font></td>
    <td><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">/s/
      Kenneth F. Bernstein</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td valign="top"><hr noshade align="center" width="100%" size="1"></td>
  </tr>
  <tr align="left" valign="top">
    <td width="57%">&nbsp;</td>
    <td width="43%" valign="top"><font size="2"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">Kenneth
            F. Bernstein</font><i><br>
      </i>&nbsp;<font face="TimesNewRoman,Times New Roman,Times,serif">President
      and Chief Executive Officer</font><font face="TimesNewRoman,Italic,Times New Roman,Times,serif">
      <br>
      </font><font size="2" face="TimesNewRoman,Times New Roman,Times,serif"> (Principal
    Executive Officer)</font></font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">November
    8, 2004</font></td>
    <td><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">/s/ Michael
      Nelsen</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td><hr noshade align="center" width="100%" size="1"></td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">&nbsp; </font></td>
    <td><font size="2"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">Michael
            Nelsen</font><i><font face="TimesNewRoman,Italic,Times New Roman,Times,serif"><br>
      </font></i><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">Senior
      Vice President and Chief Financial Officer</font><font face="TimesNewRoman,Italic,Times New Roman,Times,serif"><br>
      </font><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">(Principal
    Financial and Accounting Officer)</font></font></td>
  </tr>
</table>
<p align="center"><font size="2">&nbsp;&nbsp;</font><font size="2" face="TimesNewRoman,Times New Roman,Times,serif"> </font><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">30</font></p>
<hr noshade align="center" width="100%" size="2">
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<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>ex31-1.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<html>
<head><title>
Prepared and filed by St Ives Burrups
</title>
</head>
<body bgcolor="#FFFFFF">
<page>
<font size="2"><a name="p29"></a>
<p>&nbsp;</p>
<p align="right"><b><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif">Exhibit
31.1</font></b></p>
<p align="center"><b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif">CERTIFICATION</font></b></p>
</font>
<p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">I,&nbsp;&nbsp; Kenneth
F. Bernstein, certify that:</font></p>

<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%" valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1.</font></td>
    <td colspan="2" valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">I have
    reviewed this quarterly report on Form 10-Q of Acadia Realty Trust;</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td width="3%" valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2.</font></td>
    <td colspan="2" valign="top"><font size="2">Based on my knowledge, this report does not contain any
        untrue statement of a material fact or omit to state a material fact
        necessary to make the statements made, in light of the circumstances
        under which such statements were made, not misleading with respect to
    the period covered by this report;</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3.</font></td>
    <td colspan="2" valign="top"><font size="2">Based on my knowledge, the financial statements, and other
        financial information included in this report, fairly present in all
        material respects the financial condition, results of operations and
        cash flows of the registrant as of, and for, the periods presented in
    this report;</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.</font></td>
    <td colspan="2" valign="top"><font size="2">The registrant&#146;s other certifying officer and I are responsible
        for establishing and maintaining disclosure controls and procedures (as
        defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant
    and we have:</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(a)</font></td>
    <td valign="top"><font size="2">designed such disclosure controls and procedures,
        or caused such disclosure controls and procedures to be designed under
        our supervision, to ensure that material information relating to the
        registrant, including its consolidated subsidiaries, is made known to
        us by others within those entities, particularly during the period in
    which this report is being prepared;</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(b)</font></td>
    <td valign="top"><font size="2">evaluated the effectiveness of the registrant&#146;s
        disclosure controls and procedures and presented in this report our conclusions
        about the effectiveness of the disclosure controls and procedures, as
        of the end of the period covered by this report based on such evaluation;
    and</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(c)</font></td>
    <td valign="top"><font size="2">disclosed in this report any change in the
        registrant&#146;s internal control over financial reporting that occurred
        during the registrant&#146;s most recent fiscal quarter that has materially
        affected, or is reasonably likely to materially affect, the registrant&#146;s
    internal control over financial reporting; and</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5.</font><font size="2">&nbsp;</font></td>
    <td colspan="2" valign="top"><font size="2">The registrant&#146;s other certifying
        officer and I have disclosed, based on our most recent evaluation of
        internal control over financial reporting, to the registrant&#146;s auditors
        and the audit committee of registrant&#146;s board of directors (or persons
    performing the equivalent function):</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(a)</font></td>
    <td valign="top"><font size="2">all significant deficiencies and material
        weaknesses in the design or operation of internal controls over financial
        reporting which are reasonably likely to adversely affect the registrant&#146;s
        ability to record, process, summarize and report financial information;
    and</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(b)</font></td>
    <td valign="top"><font size="2">any fraud, whether or not material, that
        involves management or other employees who have a significant role in
        the registrant&#146;s internal controls over
financial reporting.</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td>&nbsp;</td>
    <td width="43%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">/s/<b>&nbsp;</b>Kenneth
      F. Bernstein</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr width="100%" size="1" noshade></td>
  </tr>
  <tr>
    <td valign="bottom"><font size="2">&nbsp;</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Kenneth
      F. Bernstein</font><font size="2"><br>
      <font face="TimesNewRoman,Times New Roman,Times,serif">President and Chief
    Executive Officer</font></font></td>
  </tr>
  <tr>
    <td valign="bottom"><font size="2">&nbsp;</font></td>
    <td><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">November
    8, 2004</font></td>
  </tr>
</table>
<p align="center"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">31</font></p>
<hr noshade align="center" width="100%" size="2">

</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>5
<FILENAME>ex31-2.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
<html>
<head><title>
Prepared and filed by St Ives Burrups
</title>
</head>
<body bgcolor="#FFFFFF">
<page>
<font size="2"><a name="p30"></a>
<p>&nbsp;</p>
<p align="right"><b><font size="2" face="TimesNewRoman,Bold,Times New Roman,Times,serif">Exhibit
31.2</font></b></p>
<p align="center"><b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif"> CERTIFICATION</font></b>
</p>
</font>
<p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">I,&nbsp;&nbsp;Michael
  Nelsen, certify that:</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%" valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">1.</font></td>
    <td colspan="2"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">I
    have reviewed this quarterly report on Form 10-Q of Acadia Realty Trust;</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">2.</font></td>
    <td colspan="2"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Based
        on my knowledge, this report does not contain any untrue statement of
        a material fact or omit to state a material fact necessary to make the
        statements made, in light of the circumstances under which such statements
        were made, not misleading with respect to the period covered by this
    report;</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">3.</font></td>
    <td colspan="2"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Based
        on my knowledge, the financial statements, and other financial information
        included in this report, fairly present in all material respects the
        financial condition, results of operations and cash flows of the registrant
        as of,
and for, the periods presented in this report;</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">4.</font></td>
    <td colspan="2"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The
        registrant&#146;s other certifying officer and I are responsible for establishing
        and maintaining disclosure controls and procedures (as defined in Exchange
    Act Rules 13a-15(e) and 15d-15(e) for the registrant and we have: </font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(a)</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">designed
        such disclosure controls and procedures, or caused such disclosure controls
        and procedures to be designed under our supervision, to ensure that material
        information relating to the registrant, including its consolidated subsidiaries,
        is made known to us by others within those entities, particularly during
    the period in which this report is being prepared;</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(b)</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">evaluated
        the effectiveness of the registrant&#146;s disclosure controls and procedures
        and presented in this report our conclusions about the effectiveness
        of the disclosure controls and procedures, as of the end of the period
        covered
by this report based on such evaluation; and</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(c)</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">disclosed
        in this report any change in the registrant&#146;s internal control over financial
        reporting that occurred during the registrant&#146;s most recent fiscal quarter
        that has materially affected, or is reasonably likely to materially affect,
    the registrant&#146;s internal control over financial reporting; and</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">5.</font></td>
    <td colspan="2" valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The
        registrant&#146;s other certifying officer and I have disclosed, based on
        our most recent evaluation of internal control over financial reporting,
        to the registrant&#146;s auditors and the audit committee of registrant&#146;s
        board
of directors (or persons performing the equivalent function):</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(a)</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">all significant
        deficiencies and material weaknesses in the design or operation of internal
        controls over financial reporting which are reasonably likely to adversely
        affect the registrant&#146;s ability to record, process, summarize and report
    financial information; and</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(b)</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">any fraud,
        whether or not material, that involves management or other employees
        who have a significant role in the registrant&#146;s internal controls over
    financial reporting.</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td align="left" valign="top">&nbsp;</td>
    <td width="43%"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">/s/&nbsp;
      Michael Nelsen</font></td>
  </tr>
  <tr>
    <td align="left" valign="top">&nbsp;</td>
    <td><hr width="100%" size="1" noshade></td>
  </tr>
  <tr>
    <td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
    <td><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Michael
      Nelsen</font><font size="2"><br>
      <font face="TimesNewRoman,Times New Roman,Times,serif">Senior Vice President
    and Chief Financial Officer</font></font></td>
  </tr>
  <tr>
    <td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
    <td><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">November
    8, 2004</font></td>
  </tr>
</table>
<font size="2">
<p align="center"><font face="TimesNewRoman,Times New Roman,Times,serif">32</font>
</p>
</font>
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<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>6
<FILENAME>ex32-1.htm
<DESCRIPTION>EXHIBIT 32.1
<TEXT>
<html>
<head><title>
Prepared and filed by St Ives Burrups
</title>
</head>
<body bgcolor="#FFFFFF">
<page>

    <p align="left"><font size="2"><a name="p31"></a></font></p>
<p align="right"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Exhibit
  32.1</font></b></p>



    <p align="center"><font size="2"><b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif">CERTIFICATION
        PURSUANT TO</font></b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif">18 U.S.C.
          SECTION 1350, <br>
      AS ADOPTED PURSUANT TO</font></b><br>
      <b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif">SECTION
      906 OF THE SARBANES-OXLEY ACT OF 2002</font></b></font></p>


<div style="text-indent:3%">
<p align="left"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In
      connection with the Quarterly Report of Acadia Realty Trust (the &#147;Company&#148;)
      on Form 10-Q for the quarter ended September 30, 2004, as filed with the
      Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I,
      Kenneth F. Bernstein,
    President and Chief Executive Officer of the Company, certify, pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002, that:</font></font></p></div>
<table width="100%" cellpadding="0" cellspacing="0">
<tr>
   <td width="3%" height="16" valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1)</font></td>
   <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</font></td>
</tr>
<tr>
  <td valign="top">&nbsp;</td>
  <td valign="top">&nbsp;</td>
</tr>
<tr>
   <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2)</font></td>
   <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font>   </td>
</tr>
</table>
<div style="text-indent:3%">
<p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">A signed original
    of this written statement required by Section 906 has been provided to the
    Company and will be retained by the Company and furnished to the Securities
and Exchange Commission or its staff upon request.</font></p></div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td width="43%" valign="top"><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">/s/
      </font><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Kenneth
      F. Bernstein</font></td>
  </tr>
  <tr>
    <td align="left">&nbsp;</td>
    <td valign="top"><hr size="1" noshade>
    </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Kenneth
      F. Bernstein</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">President
    and Chief Executive Officer</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">November
    8, 2004</font></td>
  </tr>
</table>
<p align="center"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">33</font></p>

<hr noshade align="center" width="100%" size="2">





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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>7
<FILENAME>ex32-2.htm
<DESCRIPTION>EXHIBIT 32.2
<TEXT>
<html>
<head><title>
Prepared and filed by St Ives Burrups
</title>
</head>
<body bgcolor="#FFFFFF">
<page>
<p align="left"><font size="2"><a name="p32"></a></font></p>
<p align="left">&nbsp;</p>
<b><p align="right"><b><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">Exhibit
  32.2</font></b></p>
</b><p align="center"><font size="2"><br>
  <b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif">CERTIFICATION
  PURSUANT TO</font></b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  <b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif">18 U.S.C.
        SECTION 1350,<br>
  AS ADOPTED PURSUANT TO</font></b><br>
  <b><font face="TimesNewRoman,Bold,Times New Roman,Times,serif">SECTION
  906 OF THE SARBANES-OXLEY ACT OF 2002</font></b></font></p>
  <div style="text-indent:3%">
<p align="left"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">In
    connection with the Quarterly Report of Acadia Realty Trust (the &#147;Company&#148;)
    on Form 10-Q for the quarter ended September 30, 2004, as filed with the
    Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I,
    Michael Nelsen, Sr. Vice President and Chief Financial Officer of the Company,
    certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:</font></p></div>
<table width="100%" cellpadding="0" cellspacing="0">
  <tr>
    <td width="3%" valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(1)</font></td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The
        Report fully complies with the requirements of Section 13(a) or 15(d)
      of the Securities Exchange Act of 1934; and</font></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">(2)</font></td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">The
        information contained in the Report fairly presents, in all material
      respects, the financial condition and results of operations of the Company.</font></td>
  </tr>
</table>
<div style="text-indent:3%">
  <p><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">A signed original
      of this written statement required by Section 906 has been provided to
      the Company and will be retained by the Company and furnished to the Securities
      and Exchange Commission or its staff upon request.</font></p>
</div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td width="43%" valign="top"><font size=2 face="TimesNewRoman,Bold,Times New Roman,Times,serif">/s/
      </font><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Michael
       Nelsen</font></td>
  </tr>
  <tr>
    <td align="left">&nbsp;</td>
    <td valign="top"><hr size="1" noshade>
    </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
      <td valign="top"><font size="2" face="TimesNewRoman,Times New Roman,Times,serif">Michael
             Nelsen</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">Senior
        Vice President and Chief Financial Officer</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td valign="top"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">November
    8, 2004</font></td>
  </tr>
</table>

  <p align="center">
<font size="2" face="TimesNewRoman,Times New Roman,Times,serif">34</font>
</p>
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</SUBMISSION>
