<SUBMISSION>
<ACCESSION-NUMBER>0000950116-05-003473
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>7
<PERIOD>20050930
<FILING-DATE>20051109
<DATE-OF-FILING-DATE-CHANGE>20051109
<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>051189027
</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>b409679_10q.htm
<DESCRIPTION>10-Q
<TEXT>
<html>
<head><title>
Prepared and filed by St Ives Financial
</title>
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 <p align="center"><font size="4" face="serif"><b>UNITED STATES<br>
</b></font><font size="4" face="serif"><b>SECURITIES AND EXCHANGE COMMISSION<br>
</b></font><b><font face="serif" size="2">Washington, DC 20549</font></b></p>
<p align="center"><font size="5" face="serif"><b>FORM 10-Q</b></font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%"><img src="tickedbox.gif" width="12" height="12"></td>
    <td><font size="2" face="serif"><b>QUARTERLY
            REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934</b></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" align="center"><font size="2" face="serif"><b>For the quarterly
    period ended September 30, 2005</b></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" align="center"><font size="2" face="serif"><b>OR</b></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="center">&nbsp;</td>
  </tr>
  <tr>
    <td><img src="emptybox.gif" width="12" height="12"></td>
    <td align="left"><font size="2" face="serif"><b>TRANSITION
            REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934</b></font></td>
  </tr>
</table>
<p>
<p align="center"><b><font face="serif" size="2">For the transition period from _______ to _______ </font></b></p>
<p align="center"><font face="serif" size="2">Commission File Number<b><i> </i>1-12002</b></font></p>
<p align="center"><font size="4" face="serif"><b><font size="5">ACADIA REALTY TRUST</font><br>
</b></font><font face="serif" size="2">(Exact name of registrant in its charter)</font></p>
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<tr align="center" valign="top">
<td><font size="2" face="serif"><b>MARYLAND</b></font></td>
<td width="50%"><font size="2" face="serif"><b>23-2715194</b></font></td>
</tr>
<tr align="center" valign="top">
<td><font size="1"><b><font face="serif">(State or other jurisdiction of</font><br>
    <font face="serif">incorporation or organization)</font></b></font></td>
<td><font size="1"><b><font face="serif">(I.R.S. Employer</font><br>
    <font face="serif">Identification No.)</font></b></font></td>
</tr>
<tr align="center" valign="top">
<td><font size="2">&nbsp;</font></td>
<td><font size="2">&nbsp;</font></td>
</tr>
<tr align="center" valign="top">
<td><font size="2" face="serif"><b>1311 MAMARONECK AVENUE, SUITE 260, WHITE PLAINS, NY</b></font></td>
<td><font size="2" face="serif"><b>10605</b></font></td>
</tr>
<tr align="center" valign="top">
<td><b><font size="1" face="serif">(Address of principal executive offices)</font></b></td>
<td><b><font size="1" face="serif">(Zip Code)</font></b></td>
</tr>
</table>
<p align="center"><b><font face="serif" size="2">(914) 288-8100<br>
</font></b><font size="2" face="serif">(Registrant&#8217;s telephone number,
including area code)<b>&nbsp;</b></font></p>
<p align="left"><font face="serif" size="2">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>
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<td align="center"><font size="2" face="serif"><b>YES <img src="tickedbox.gif" width="12" height="12"></b></font><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>NO <img src="emptybox.gif" width="12" height="12"></b></font></td>
</tr>
</table>
<p align="left"><font face="serif" size="2">Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).</font></p>  <table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="center"><font size="2" face="serif"><b>YES <img src="tickedbox.gif" width="12" height="12"></b></font><font size="2" face="serif"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NO <img src="emptybox.gif" width="12" height="12"></b></font></td>
</tr>
</table>
<p align="left"><font face="serif" size="2">As of November 8, 2005, there were 31,541,175 common shares of beneficial interest, par value $.001 per share, outstanding.</font><br>
</p>
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<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><font size="2" face="serif"><b>ACADIA REALTY TRUST AND SUBSIDIARIES</b></font></p>
<p align="center"><font size="2" face="serif"><b>FORM 10-Q</b></font></p>
<p align="center"><font size="2" face="serif"><b><a name="contents"></a>INDEX</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"></td>
<td align="left" width="2%">&nbsp;</td>
<td width="83%" align="center"></td>
<td width="2%" align="left">&nbsp;</td>
<td width="4%" align="center"><font size="2" face="serif"><b>Page</b></font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>Part I:</b></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif"><b>Financial Information</b></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Item 1.</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">Financial Statements (unaudited)</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"><a href="#p3"><font size="2" face="serif">Consolidated Balance Sheets as of September 30, 2005 and December 31, 2004</font></a></td>
<td align="left">&nbsp;</td>
<td align="right"><a href="#p3"><font size="2" face="serif">3</font></a></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"><a href="#p4"><font size="2" face="serif">Consolidated Statements of Income for the three and nine months ended September 30, 2005 and 2004</font></a></td>
<td align="left">&nbsp;</td>
<td align="right"><a href="#p4"><font size="2" face="serif">4</font></a></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"><a href="#p5"><font size="2" face="serif">Consolidated Statements of Cash Flows for the nine months ended September 30, 2005 and 2004</font></a></td>
<td align="left">&nbsp;</td>
<td align="right"><a href="#p5"><font size="2" face="serif">5</font></a></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"><a href="#p6"><font size="2" face="serif">Notes to Consolidated Financial Statements</font></a></td>
<td align="left">&nbsp;</td>
<td align="right"><a href="#p6"><font size="2" face="serif">6</font></a></td>
</tr>
<tr valign="top">
<td align="left"><a href="#p18"><font size="2" face="serif">Item 2.</font></a></td>
<td align="left">&nbsp;</td>
<td align="left"><a href="#p18"><font size="2" face="serif">Management&#8217;s
    Discussion and Analysis of Financial Condition and Results of Operations</font></a></td>
<td align="left">&nbsp;</td>
<td align="right"><a href="#p18"><font size="2" face="serif">18</font></a></td>
</tr>
<tr valign="top">
<td align="left"><a href="#p28"><font size="2" face="serif">Item 3.</font></a></td>
<td align="left">&nbsp;</td>
<td align="left"><a href="#p28"><font size="2" face="serif">Quantitative and Qualitative Disclosure of Market Risk</font></a></td>
<td align="left">&nbsp;</td>
<td align="right"><a href="#p28"><font size="2" face="serif">28</font></a></td>
</tr>
<tr valign="top">
<td align="left"><a href="#p28a"><font size="2" face="serif">Item 4.</font></a></td>
<td align="left">&nbsp;</td>
<td align="left"><a href="#p28a"><font size="2" face="serif">Controls and Procedures</font></a></td>
<td align="left">&nbsp;</td>
<td align="right"><a href="#p28a"><font size="2" face="serif">28</font></a></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>Part II:</b></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif"><b>Other Information</b></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><a href="#p29"><font size="2" face="serif">Item 6.</font></a></td>
<td align="left">&nbsp;</td>
<td align="left"><a href="#p29"><font size="2" face="serif">Exhibits</font></a></td>
<td align="left">&nbsp;</td>
<td align="right"><a href="#p29"><font size="2" face="serif">29</font></a></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"><a href="#p31"><font size="2" face="serif">Signatures</font></a></td>
<td align="left">&nbsp;</td>
<td align="right"><a href="#p31"><font size="2" face="serif">31</font></a></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">2</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p3"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="left"><b><font face="serif" size="2">Part I.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Information</font></b></p>
<p align="left"><b><font face="serif" size="2">Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements</font></b></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">CONSOLIDATED BALANCE SHEETS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>September 30,</b></font><font size="1"><br>
  <font face="serif"><b>2005</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>December 31,</b></font><font size="1"><br>
  <font face="serif"><b>2004</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>(unaudited)</b></font></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 align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>ASSETS</b></font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Real estate:</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Land</font></td>
<td width="2%" align="right" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="9%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">57,965</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="9%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">52,472</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Buildings and improvements</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">375,775</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">356,908</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Construction in progress</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,120</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,594</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"></td>
</tr><tr valign="top">
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">434,860</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">414,974</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Less: accumulated depreciation</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(114,993</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(105,278</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr> <tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net real estate</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">319,867</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">309,696</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Cash and cash equivalents</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">8,157</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">13,499</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Cash in escrow</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,503</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,467</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Restricted cash</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">510</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">612</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Investments in and advances to unconsolidated
    partnerships</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">45,201</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">27,684</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"> Investment in management
    contracts, net of accumulated amortization of&nbsp; $1,503
    and $578, respectively</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">3,613</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">3,422</font></td>
<td align="left"></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Preferred equity investment</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">19,500</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Rents receivable, net</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">11,609</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">10,485</font></td>
<td align="left"></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Notes receivable</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">14,922</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">10,087</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Prepaid expenses</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">4,866</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">2,994</font></td>
<td align="left"></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Deferred charges, net</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">15,919</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">12,624</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Acquired lease intangibles</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">4,444</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Other assets</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">13,217</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">4,809</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Assets of discontinued operations</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">5,268</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">466,328</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">405,647</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="2" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="2" noshade></td>
  <td align="center"><hr size="2" noshade></td>
  <td align="center"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>LIABILITIES AND SHAREHOLDERS&#8217; EQUITY</b></font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Mortgage notes payable</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">206,798</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">153,361</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Accounts payable and accrued expenses</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">6,473</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">7,627</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Dividends and distributions payable</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,676</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,597</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Derivative Instruments</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">374</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">2,136</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Share of distributions in excess
    of share of income and investment in unconsolidated partnerships</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">10,080</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,304</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other liabilities</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5,336</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">3,096</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Liabilities of discontinued operations</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">51</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"></td>
</tr><tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total liabilities</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">234,737</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">181,172</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Minority interest in Operating Partnership</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,274</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,743</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Minority interests in majority-owned
    partnerships</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">1,510</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">1,808</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total minority interests</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">10,784</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,551</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Shareholders&#8217; equity:</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Common shares</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">31</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">31</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Additional paid-in capital</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">224,180</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">222,715</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Accumulated other comprehensive
    income</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(762</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(3,180</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Deficit</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(2,642</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(2,642</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total shareholders&#8217; equity</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">220,807</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">216,924</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"><hr size="1" noshade></td>
  <td align="center"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">466,328</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">405,647</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr> <tr valign="top">
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="2" noshade>
</td>
  <td align="center"></td>
  <td align="center"><hr size="2" noshade></td>
  <td align="center"><hr size="2" noshade></td>
  <td align="center"></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">See accompanying notes</font></p>
<p align="center"><font face="serif" size="2">3</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p4"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">CONSOLIDATED STATEMENTS OF INCOME<br>
</font></b><b><font face="serif" size="2">FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004<br>
</font></b><font face="serif" size="2">(unaudited, in thousands, except per share amounts)</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr align="center" valign="top">
<td><font size="1" face="serif">&nbsp;</font></td>
<td colspan="5"><font size="1" face="serif"><b>   Three months ended</b></font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td colspan="5"><font size="1" face="serif"><b>    Nine months ended</b></font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr align="center" valign="top">
<td><font size="1" face="serif">&nbsp;</font></td>
<td colspan="5"><font size="1" face="serif"><b>September 30,</b></font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td colspan="5"><font size="1" face="serif"><b>September 30,</b></font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr align="center" valign="top">
<td><font size="1" face="serif"> &nbsp;</font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2005</b></font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2004</b></font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2005</b></font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2004</b></font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left"><font size="2" face="serif">Revenues</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif"> &nbsp;&nbsp;&nbsp; Minimum rents</font></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif"> $</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">13,311</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif"> $</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">12,633</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif"> $</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">39,231</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">37,806</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp; Percentage rents</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">144</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">147</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">440</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">567</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;&nbsp;&nbsp; Expense reimbursements</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,113</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,256</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">10,139</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,686</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp; Other property
    income</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">234</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">171</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">697</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">494</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;   Management
    fee income, net of sub-management fees of $0, $433, <br>
    &nbsp;&nbsp;&nbsp; $303 and $1,168, respectively</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,898</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,548</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,733</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,100</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"> &nbsp;&nbsp;&nbsp; Interest income</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1,045</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">318</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">2,463</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">918</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;&nbsp;&nbsp; Other</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">14</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">210</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;&nbsp;&nbsp; Total revenues</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">20,745</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">18,087</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">60,703</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">52,781</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left"><font size="2" face="serif">Operating Expenses</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;&nbsp;&nbsp; Property operating</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,285 </font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,104</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">10,151</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">11,118</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp; Real estate taxes</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">2,363</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">2,327</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">6,804</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">6,448</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;&nbsp;&nbsp; General and administrative</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,499</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,674</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">10,274</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,585</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp; Depreciation
    and amortization</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">4,437</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3,762</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">12,349</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">11,407</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;&nbsp;&nbsp; Total operating
    expenses</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">13,584</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">12,867</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">39,578</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">36,558</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Operating income</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,161</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,220</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">21,125</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,223</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"> Equity in earnings of unconsolidated
    partnerships</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">4,911</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">483</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">5,795</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,533</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Interest expense</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(3,084 </font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(2,644 </font></td>
<td align="left"><font size="2" face="serif">) </font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(8,113 </font></td>
<td align="left"><font size="2" face="serif">) </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(7,507</font></td>
<td align="left"><font size="2" face="serif">) </font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Gain on sale of land</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">423</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">931</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Minority interest</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(76 </font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(385 </font></td>
<td align="left"><font size="2" face="serif">) </font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(490 </font></td>
<td align="left"><font size="2" face="serif">) </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(1,046 </font></td>
<td align="left"><font size="2" face="serif">) </font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif"> Income from continuing
    operations before income taxes</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">8,912</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,097</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">18,317</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">10,134</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Income taxes</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(1,618</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(1,618</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income from continuing operations</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,294</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,097</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,699</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">10,134</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left"><font size="2" face="serif">Discontinued operations:</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif"> Operating income
    (loss) from discontinued operations</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(20</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(206</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">124</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(642</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Impairment of real estate</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(770</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Loss on sale of real estate</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(50</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(50</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Minority interest</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">4</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">12</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">17</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Loss from discontinued operations</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(69</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(202</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(684</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(625</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net income</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif"> $</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,225</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif"> $</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,895</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif"> $</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,015</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,509</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left"><font size="2" face="serif">Basic earnings per share</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income from continuing operations</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.23</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.11</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.52</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.35</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Loss from discontinued operations</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.01</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.02</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(0.02</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td>&nbsp;</td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td>&nbsp;</td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td>&nbsp;</td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td>&nbsp;</td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td>&nbsp;</td>
</tr> <tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Basic earnings per Common Share</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.23</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.10</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.50</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.33</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td>&nbsp;</td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td>&nbsp;</td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td>&nbsp;</td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td>&nbsp;</td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td>&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Diluted earnings per share</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income from continuing operations</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.22</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.11</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.52</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.34</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Loss from discontinued operations</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.01</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.02</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(0.02</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td>&nbsp;</td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td>&nbsp;</td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td>&nbsp;</td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td>&nbsp;</td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td>&nbsp;</td>
</tr> <tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Diluted earnings per Common Share</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.22</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.10</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.50</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.32</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr> <tr valign="top">
<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 face="serif" size="2">See accompanying notes</font></p>
<p align="center"><font face="serif" size="2">4</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p5"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
CONSOLIDATED STATEMENTS OF CASH FLOWS<br>
</font></b><b><font face="serif" size="2">FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004<br>
</font></b><font face="serif" size="2">(in thousands)</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr align="center" valign="top">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1" face="serif"><b>September
          30,</b></font><font size="1"><br>
    <font face="serif"><b>2005</b></font></font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1" face="serif"><b>September
          30,</b></font><font size="1"><br>
    <font face="serif"><b>2004</b></font></font></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr valign="top">
<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 align="center" valign="top">
  <td height="14"><font size="1">&nbsp;</font></td>
  <td colspan="5"><font size="1">&nbsp;</font><font size="1" face="serif"><b>(unaudited)</b></font><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>CASH FLOWS FROM OPERATING ACTIVITIES:</b></font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net income</font></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,015</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,509</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Adjustments to reconcile net income
    to net cash provided by operating activities:</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Depreciation and amortization</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">12,391</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">11,905</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Gain on sale of land</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(931</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Impairment of real estate</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">770</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Minority interests</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">478</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">1,029</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Loss on sale of property</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">50</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Equity in earnings of unconsolidated
    partnerships</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(5,795</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(1,533</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Distributions of operating income
    from unconsolidated partnerships</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">733</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,702</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Amortization of derivative settlement
    included in interest expense</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">330</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Provision for bad debts</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">276</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">597</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Amortization of FAS 141 above-market
    rent</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">95</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Amortization of FAS 141 installation
    costs</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">48</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Changes in assets and liabilities:</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Restricted cash</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">102</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">333</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Funding of escrows, net</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(36</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(826</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Rents receivable</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(1,041</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(3,264</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Prepaid expenses</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(1,837</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(1,337</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Other assets</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(7,316</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(974</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Accounts payable and accrued expenses</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(519</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">2,030</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income taxes payable</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,618</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Due to/from related parties</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(30</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Other liabilities</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">613</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(300</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net cash provided by operating activities</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,975</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">17,910</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>CASH FLOWS FROM INVESTING ACTIVITIES:</b></font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Expenditures for real estate and
    improvements</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(24,382</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(5,053</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Investment in and advances to unconsolidated
    partnerships</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(12,161</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(33,353</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Return of capital from unconsolidated
    partnerships</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">482</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Collection of notes receivable</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1,000</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3,904</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Payment of deferred leasing costs</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(839</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(1,759</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Advances of notes receivable</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(6,875</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(10,101</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Preferred equity investment</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(20,000</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Distribution from preferred equity
    investment</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">500</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Proceeds from sale of land</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">931</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Proceeds from the sale of property</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3,931</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net cash used in investing activities</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(58,344</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(45,431</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>CASH FLOWS FROM FINANCING ACTIVITIES:</b></font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Principal payments on mortgages</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(23,562</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(41,691</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Proceeds received on mortgage notes</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">77,000</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">76,251</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Payment of deferred financing and
    other costs</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(858</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(1,605</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Dividends paid</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(16,381</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(13,787</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Distributions to minority interests
    in Operating Partnership</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(268</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(353</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Distributions on preferred Operating
    Partnership Units</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(268</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(196</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Distributions to minority interests
    in majority-owned partnerships</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(56</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(549</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Common Shares issued under Employee
    Stock Purchase Plan</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">76</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">64</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Settlement of options to purchase
    Common Shares</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(67</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Exercise of options to purchase
    Common Shares</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">344</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">8,215</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net cash provided by financing activities</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">36,027</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">26,282</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Decrease in cash and cash equivalents</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(5,342</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(1,239</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Cash and cash equivalents, beginning
    of period</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">13,499</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">14,159</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Cash and cash equivalents, end of
    period</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">8,157</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">12,920</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left"><font size="2" face="serif">Supplemental disclosure of cash
    flow information:</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Cash paid during the period for
    interest, net of amounts capitalized of $226 and $236, respectively</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,893</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">8,362</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<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>&nbsp;</td>


</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Supplemental disclosure of non-cash
    investing and financing activities:</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Acquisition
      of management contract rights through issuance of Common and Preferred
    Operating Partnership Units</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,000</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,000</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Acquisition of property through
    issuance of Preferred Operating Partnership Units</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">200</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr> <tr valign="top">
<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 face="serif" size="2">See accompanying notes</font></p>
<p align="center"><font face="serif" size="2">5</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p6"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><font face="serif" size="2"><b>ACADIA REALTY TRUST AND SUBSIDIARIES<br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
SEPTEMBER 30, 2005</b></font><br>
<font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<p align="left"><font face="serif" size="2">&nbsp;<b>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THE COMPANY</b></font></p>
<p align="left"><font face="serif" size="2">Acadia Realty Trust (the &#8220;Company&#8221;) is a fully integrated and self-managed real estate investment trust (&#8220;REIT&#8221;) focused primarily on the ownership, acquisition, redevelopment and management of neighborhood and community shopping centers.</font></p>
<p align="left"><font face="serif" size="2">All of the Company&#8217;s assets are held by, and all of its operations are conducted through, Acadia Realty Limited Partnership (the &#8220;Operating Partnership&#8221; or &#8220;OP&#8221;) and its majority-owned partnerships. As of September 30, 2005, the Company controlled 98% of the Operating Partnership as the sole general partner.</font></p>
<p align="left"><font face="serif" size="2">The Company operates 71 properties, which it owns or has an ownership interest in, consisting of 69 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>
<p align="left"><b><font face="serif" size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BASIS OF PRESENTATION</font></b></p>
<p align="left"><font face="serif" size="2">The consolidated financial statements include the consolidated accounts of the Company and its majority-owned subsidiaries, including the Operating Partnership, and have been prepared in accordance with accounting principles generally accepted in the United States (&#8220;GAAP&#8221;) 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>
<p align="left"><font face="serif" size="2">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, 2005 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2005. For further information refer to the consolidated financial statements and accompanying footnotes included in the Company&#8217;s Annual Report on Form 10-K for the year ended December 31, 2004.</font></p>
<p align="left"><font face="serif" size="2">Certain reclassifications have been made to the 2004 financial statements to conform to the 2005 presentation. </font></p>
<p align="left"><font face="serif" size="2">In 2005, the Emerging Issues Task Force (&#8220;EITF&#8221;) reached a consensus that the general partners in a limited partnership should determine whether they control a limited partnership based on the application of the framework as discussed in EITF 04-5- Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights (&#8220;EITF 04-5&#8221;). Under EITF 04-5, the general partners in a limited partnership are presumed to control that limited partnership regardless of the extent of the general partners' ownership interest in the limited partnership.The assessment of whether the rights of the limited partners should overcome
the presumption of control by the general partners is a matter of judgment that depends on facts and circumstances. If the limited partners have either (a) the substantive ability to dissolve (liquidate) the limited partnership or otherwise remove the general partners without cause or (b) substantive participating rights, the general partners do not control the limited partnership. EITF 04-5 was effective immediately for new partnerships formed and existing limited partnerships for which the partnership agreements are modified on or after June 29, 2005, and, for all other partnerships, EITF 04-5 would be effective no later than the beginning of the first reporting period in fiscal years beginning after December 15, 2005.  The provisions of EITF 04-5 may be initially applied through either
one of two methods: (1) similar to a cumulative effect of a change in accounting principle or (2) retrospective application.  The Company is currently assessing the impact of EITF 04-5 as it relates to the method of accounting utilized for its investments in Funds I and II (note 7), which are currently accounted for under the equity method of accounting. There would be no impact on net income or shareholders&#8217; equity for any of the reported periods in the accompanying consolidated financial statements if the Company were to consolidate these investments. If the Company was required to consolidate these investments, total assets, total liabilities and minority interest as of September 30, 2005 and December 31, 2004 would be as follows:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>September 30,</b></font><font size="1"><br><font face="serif"><b>2005</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>December 31 ,</b></font><font size="1"><br><font face="serif"><b>2004</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><hr size="1" noshade>
</td>
<td align="left">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total assets</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="9%" align="right"><font size="2" face="serif">790,393</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="9%" align="right"><font size="2" face="serif">624,832</font></td>
<td width="2%" align="left">&nbsp;</td>
</tr> <tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><hr size="2" noshade>
</td>
<td align="left">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total liabilities</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">457,775</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">344,330</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><hr size="2" noshade>
</td>
<td align="left">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr> <tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Minority interest</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">111,811</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">63,578</font></td>
<td align="left">&nbsp;</td>
</tr> <tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><hr size="2" noshade>
</td>
<td align="left">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
</table>
<p align="left"><b><font face="serif" size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EARNINGS PER COMMON SHARE</font></b></p>
<p align="left"><font face="serif" size="2">Basic earnings per share was determined by dividing net income for the period by the weighted average number of common shares of beneficial interest (&#8220;Common Shares&#8221;) outstanding during each period consistent with Statement of Financial Accounting Standards (&#8220;SFAS&#8221;) No. 128 &#8220;Earnings Per Share&#8221;. 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>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="5" align="center"><font size="1" face="serif"><b>Three months ended</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="5" align="center"><font size="1" face="serif"><b>Nine months ended</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="5" align="center"><font size="1" face="serif"><b>September 30,</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="5" align="center"><font size="1" face="serif"><b>September 30,</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr align="center" valign="top">
<td align="left"><font size="2" face="serif"><b>Numerator:</b></font></td>
<td><font size="1">&nbsp;</font></td>
<td colspan="2"><font size="1" face="serif"><b>2005</b></font></td>
<td><font size="1">&nbsp;</font></td>
<td colspan="2"><font size="1" face="serif"><b>2004</b></font></td>
<td><font size="1">&nbsp;</font></td>
<td colspan="2"><font size="1" face="serif"><b>2005</b></font></td>
<td><font size="1">&nbsp;</font></td>
<td colspan="2"><font size="1" face="serif"><b>2004</b></font></td>
<td><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td><font size="1">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td colspan="2"><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>
<td colspan="2"><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 valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income from continuing operations &#150; earnings
    per share</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,294</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,097</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,699</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">10,134</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Effect of dilutive securities:</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Preferred OP Unit distributions</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">74</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Numerator for diluted earnings per
    share</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">7,368</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3,097</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">16,699</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">10,134</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>Denominator:</b></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Weighted average shares &#150; basic
    earnings per share</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">32,009</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">29,459</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">31,925</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">28,896</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Effect of dilutive securities:</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Employee stock options</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">267</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">495</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">262</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">610</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Convertible Preferred OP Units</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">430</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
</tr><tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Denominator for diluted earnings
    per share</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">32,706</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">29,954</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">32,187</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">29,506</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif"> Basic earnings
    per share from continuing operations</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.23</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.11</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.52</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.35</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif"> Diluted earnings
    per share from continuing operations</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.22</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.11</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.52</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.34</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr> <tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<p align="center"><font face="serif" size="2">6</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<p align="left"><b><font face="serif" size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EARNINGS PER COMMON SHARE (continued)</font></b></p>
<p align="left"><font face="serif" size="2">The effect of the conversion of common units in the Operating Partnership (&#8220;Common OP Units&#8221;) 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 (&#8220;Preferred OP Units&#8221;) which would result in 429,879 additional Common Shares for each of the nine months ended September 30, 2005 and 2004, respectively, and 522,679 Common Shares for the
three months ended September 30, 2004, is not reflected in the above table as such conversions would be anti-dilutive.</font></p>
<p align="left"><font face="serif" size="2">&nbsp;<b>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COMPREHENSIVE INCOME</b></font></p>
<p align="left"><font face="serif" size="2">The following table sets forth comprehensive income for the three and nine months ended September 30, 2005 and 2004:</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="4" align="center"><font size="1" face="serif"><b>Three months ended
      <br>
    September 30,</b></font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="4" align="center"><font size="1" face="serif"><b>Nine months ended</b></font><font size="1"><br><font face="serif"><b>September
    30,</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="center"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>2004</b></font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>2005</b></font></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" face="serif"><b>2004</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="right"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade>
</td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net income</font></td>
<td width="2%" align="right" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,225</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,895</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,015</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,509</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other comprehensive income (loss) <sup>1</sup></font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1,795</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(1,968</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right"></td>
<td align="right"><font size="2" face="serif">2,418</font></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="right"><font size="2" face="serif">1,331</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="right"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade>
</td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr><tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Comprehensive income</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,020</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">927</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">18,433</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">10,840</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr> <tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="right"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade>
</td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<br>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td colspan="2" align="left"><hr align="left" width="150" size="1" noshade></td>
  </tr>
<tr valign="top">
<td colspan="2" align="left"><font size="1" face="serif">Notes:&nbsp;</font></td>
</tr>
<tr valign="top">
<td width="3%" align="left"><font size="1" face="serif">1</font></td>
<td align="left"><font size="1" face="serif">Relates to the changes in the fair
    value of derivative instruments accounted for as cash flow hedges and the
    amortization of terminated swap agreements.</font></td>
</tr>
</table>
<p align="left"><font face="serif" size="2">The following table sets forth the change in accumulated other comprehensive loss for the nine months ended September 30, 2005:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Balance at December 31, 2004</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">(3,180</font></td>
<td width="2%" align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Amortization of swap value</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">330</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Unrealized loss on valuation of
    swap agreements</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">2,088</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Balance at September 30, 2005</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(762</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr> <tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<p align="left"><font face="serif" size="2">As of September 30, 2005 the balance in accumulated other comprehensive loss was comprised of unrealized losses on the valuation of current swap agreements and the unamortized portion of terminated swap agreements.</font></p>
<p align="left"><b><font face="serif" size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SHAREHOLDERS&#8217; EQUITY AND MINORITY INTERESTS</font></b></p>
<p align="left"><font face="serif" size="2">The following table summarizes the change in the shareholders&#8217; equity and minority interests since December 31, 2004:</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr valign="bottom">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Shareholders&#8217;</b></font><font size="1"><br>
  <font face="serif"><b>Equity</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Minority Interest</b></font><font size="1"><br>
  <font face="serif"><b>in
        Operating</b></font><br>
<font face="serif"><b>Partnership (1)</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Minority Interest</b></font><font size="1"><br>
  <font face="serif"><b>in
        majority-</b></font><br>
<font face="serif"><b>owned</b></font><br>
<font face="serif"><b>Partnerships</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="center"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Balance at December 31, 2004</font></td>
<td width="2%" align="right" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">216,924</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,743</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,808</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Issuance of Common OP Units</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">4,200</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Exercise of options</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">344</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Dividends and distributions declared
    of $0.05175 per Common Share&nbsp;and Common OP Unit</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(16,429</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(312</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net income for the period January
    1 through September 30, 2005</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,015</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">316</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(92</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Distributions paid</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(56</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Purchase of minority interest</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(150</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Conversion of Series A Preferred
    OP Units</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">697</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(697</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Other comprehensive income &#150; Unrealized
    gain on valuation of&nbsp;swap agreements</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,088</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">24</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other comprehensive income &#150; Amortization
    of swap value</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">330</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Employee stock-based compensation</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">838</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Balance at September 30, 2005</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">220,807</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,274</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,510</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr> <tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"></td>
</tr>
</table>
<br>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td colspan="2" align="left"><hr align="left" width="150" size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td colspan="2" align="left"><font size="1" face="serif">Notes:</font></td>
<td width="2%" align="left"><font size="1">&nbsp;</font></td> </tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(1)</font></td>
<td align="left"><font size="1" face="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 $254.</font></td>
<td align="left"><font size="1"> &nbsp;</font></td>
</tr>
</table>
<p align="left"><font face="serif" size="2">Minority interest in the Operating Partnership represents (i) the limited partners&#8217; interest of 653,360 and 392,255 Common OP Units at September 30, 2005 and December 31, 2004, respectively, (ii) 884 and 1,580 Series A Preferred OP Units at September 30, 2005 and December 31, 2004, respectively, with a nominal value of $1,000 per unit, which are entitled to a preferred quarterly distribution of the greater of (a) $22.50 per unit (9% annually) per Series A Preferred OP Unit or (b) the quarterly distribution attributable to a Series A Preferred OP Unit if such unit were converted into a Common OP Unit, and (iii) 4,000 Series B Preferred OP Units at September 30, 2005 and December 31, 2004 with a nominal value of $1,000 per unit, which are
entitled to a preferred quarterly distribution of the greater of (a) $13.00 (5.2% annually) per unit or (b) the quarterly distribution attributable to a Series B Preferred OP Unit if such unit were converted into a Common OP Unit. Minority interests in majority-owned partnerships represent third-party interests in four partnerships in which the Company has a majority ownership position.</font></p>
<p align="left"><font face="serif" size="2">During July 2005, certain holders of 696 Series A Preferred OP Units converted these into Common OP Units and ultimately into Common Shares.</font></p>
<p align="left"><font face="serif" size="2">During July 2005, the Company issued to a third party 11,105 Restricted Common OP Units valued at $18.01 per unit in connection with the purchase of 4343 Amboy Road. The holder of the Common OP Units is restricted from selling these for six months. </font></p>
<p align="center"><font face="serif" size="2">&nbsp;7</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<p align="left"><b><font face="serif" size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SHAREHOLDERS&#8217; EQUITY AND MINORITY INTERESTS (Continued)</font></b></p>
<p align="left"><font face="serif" size="2">In February 2005, the Company issued $4,000 (250,000 Restricted Common OP Units valued at $16.00 each) of Restricted Common OP Units to Klaff in consideration for the 25% balance of certain management contract rights as well as the rights to 25% of certain potential future revenue streams . This follows the acquisition of 75% of the management contract rights and 75% of certain potential future revenue streams from Klaff in January 2004.&nbsp; The Restricted Common OP Units are convertible into the Company&#8217;s Common Shares on a one-for-one basis after a five-year lock-up period. $1,116 of the purchase price was allocated to investment in management contracts in the consolidated balance sheet and is being amortized over the estimated
remaining life of the contracts. The remainder of the purchase price has been allocated to deferred charges in the consolidated balance sheet and will be allocated to future revenue streams as identified.</font></p>
<p align="left"><font face="serif" size="2">During the nine months ended September
    30, 2005, certain employees and trustees of the Company exercised 46,000
    share
options at prices ranging from $5.00 to $9.11.</font></p>
<p align="left"><b><font face="serif" size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PROPERTY ACQUISITIONS AND DISPOSITIONS</font></b></p>
<p align="left"><font face="serif" size="2">During July 2005, the Company sold the Berlin Shopping Center for $4,000. An impairment loss of $770 was recognized for  the nine months ended September 30, 2005,  to reduce the carrying value of this asset to fair value less costs to sell.</font></p>
<p align="left"><font face="serif" size="2">During July of 2005, the Company purchased 4343 Amboy Road located on Staten Island, New York for $16,600 in cash and $200 in Common OP Units. The property, a 60,000 square foot neighborhood shopping center, is anchored by a Waldbaum&#8217;s supermarket and a Duane Reade drug store, and is subject to a 23-year ground lease. </font></p>
<p align="left"><b><font face="serif" size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED PARTNERSHIPS</font></b></p>
<p align="left"><b><font face="serif" size="2">Crossroads</font></b></p>
<p align="left"><font face="serif" size="2">The Company owns a 49% interest in
    the Crossroads Joint Venture, LLC and Crossroads II, LLC (collectively &#8220;Crossroads&#8221;),
    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&#8217;s
    investment in and share of income from Crossroads follows:</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>September 30,</b></font><font size="1"><br><font face="serif"><b>2005</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>December 31,</b></font><font size="1"><br><font face="serif"><b>2004</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Balance Sheets</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Assets:</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Rental property, net</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">6,568</font></td>
<td width="2%" align="left"></td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">6,939</font></td>
<td width="2%" align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other assets</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5,790</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">6,129</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total assets</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">12,358</font></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">13,068</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Liabilities and partners&#8217; deficit</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Mortgage note payable</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">64,000</font></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">64,000</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other liabilities</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">2,474</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">2,481</font></td>
<td align="left"></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Partners&#8217; deficit</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(54,116</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(53,413</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total liabilities and partners&#8217; deficit</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">12,358</font></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">13,068</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Company&#8217;s investment in Crossroads</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(10,080</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(9,304</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr> <tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"></td>
</tr>
</table>
<br><br>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr align="center" valign="top">
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td colspan="4"><font size="1" face="serif"><b>           Three months ended</b></font><font size="1"><br><font face="serif"><b>                September 30,</b></font></font></td>
<td><font size="1">&nbsp;</font></td>
<td colspan="5"><font size="1" face="serif"><b>     Nine  months ended</b></font><font size="1"><br><font face="serif"><b>        September 30,</b></font></font></td>
<td><font size="1">&nbsp;</font></td>
</tr>
<tr align="center" valign="top">
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2005</b></font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1" face="serif"><b> 2004</b></font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2005</b></font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2004</b></font></td>
<td><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Statements of Income </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td> </tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total revenue </font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif"> $</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,165</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif"> $</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,953</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">6,556</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,930</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Operating and other expenses </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">609</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">677</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1,936</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1,867</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Interest expense </font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">888</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">664</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,764</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,927</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Depreciation and amortization </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">205</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">152</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">509</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">454</font></td>
<td align="left">&nbsp;</td>
</tr> <tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net income </font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif"> $</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">463</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif"> $</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">460</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,347</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,682</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr> <tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Company&#8217;s share of net income </font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"> $</font></td>
<td align="right"><font size="2" face="serif">227</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"> $</font></td>
<td align="right"><font size="2" face="serif">247</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">733</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">858</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Amortization of excess investment
    (see below) </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">98 </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">98 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">294</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">294</font></td>
<td align="left">&nbsp;</td>
</tr> <tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Income from Crossroads </font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"> $</font></td>
<td align="right"><font size="2" face="serif">129</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"> $</font></td>
<td align="right"><font size="2" face="serif">149</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">439</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">564</font></td>
<td align="left">&nbsp;</td>
</tr> <tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
</tr>
</table>
<p align="left"><font face="serif" size="2">The excess of the Company&#8217;s investment over its share of the net equity in Crossroads at the date of acquisition was $19,580. The unamortized excess, including the portion attributable to buildings and improvements which is being amortized over the life of the related property, is included in the Company&#8217;s investment in Crossroads.</font></p>
<p align="center"><font face="serif" size="2">8</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<p align="left"><b><font face="serif" size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED PARTNERSHIPS (continued)</font></b></p>
<p align="left"><b><font face="serif" size="2">Acadia Strategic Opportunity Fund, LP (&#8220;Fund I&#8221;)</font></b></p>
<p align="left"><font face="serif" size="2">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 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>
<p align="left"><font face="serif" size="2">As of September 30, 2005, Fund I owns or has an ownership interest in ten shopping centers and twenty-five anchor-only supermarket leases comprising 2.7 million square feet.</font></p>
<p align="left"><font face="serif" size="2">The Company accounts for its investment in Fund I using the equity method. Summary financial information of Fund I and the Company&#8217;s investment in and share of income from Fund I follows:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>September 30,</b></font><font size="1"><br><font face="serif"><b>2005</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>December 31,</b></font><font size="1"><br><font face="serif"><b>2004</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade>
</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Balance Sheets</font></td>
<td width="1%" align="right">&nbsp;</td>
<td width="1%" align="left"></td>
<td width="8%" align="right"></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"></td>
<td width="8%" align="right"></td>
<td width="2%" align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Assets:</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Rental property, net</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">191,421</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">187,046</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other assets</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">22,535</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">13,077</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade>
</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total assets</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">213,956</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">200,123</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade>
</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Liabilities and partners&#8217; equity</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Mortgage notes payable</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">114,277</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">120,188</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other liabilities</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">21,975</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">24,060</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Partners&#8217; equity</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">77,704</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">55,875</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade>
</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total liabilities and partners&#8217; equity</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">213,956</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">200,123</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade>
</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Company&#8217;s investment in Fund
    I</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">16,789</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">12,115</font></td>
<td align="left">&nbsp;</td>
</tr> <tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade>
</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<br>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr align="center" valign="top">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td colspan="4"><font size="1" face="serif"><b>Three months ended</b></font><font size="1"><br>
    <font face="serif"><b>September 30,</b></font></font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td colspan="4"><font size="1" face="serif"><b> Nine months ended</b></font><font size="1"><br>
    <font face="serif"><b> September 30,</b></font></font></td>
  <td><font size="1">&nbsp;</font></td>
</tr>
<tr align="center" valign="top">
  <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>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
</tr>
<tr align="center" valign="top">
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2005</b></font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1" face="serif"><b> 2004</b></font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2005</b></font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2004</b></font></td>
<td><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td>&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Statements of Operations </font></td>
<td align="left"><font size="2"> &nbsp;</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total revenue </font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">8,754</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">6,668</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">22,930</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">19,928</font></td>
<td width="2%" align="right">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Operating and other expenses </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">935</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,294</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3,685</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3,992</font></td>
<td align="right">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Management and other fees </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">585</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">555</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1,687</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1,587</font></td>
<td align="right">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Interest expense </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,634</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,687</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">4,922</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">4,956</font></td>
<td align="right">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Depreciation and amortization </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,292</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,172</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">6,827</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">6,472</font></td>
<td align="right">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Minority interest</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">73</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">44</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">215</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">131</font></td>
<td align="right">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Equity in earnings (loss) of unconsolidated
    partnerships</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">68</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">20</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(9</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">104</font></td>
<td align="right">&nbsp;</td>
</tr> <tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td>&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Net income </font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">3,167</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">896</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">5,603</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">2,686</font></td>
<td align="right">&nbsp;</td>
</tr> <tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td>&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Company&#8217;s share of net income
    (1)</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">857</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">560</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">1,709</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">1,195</font></td>
<td align="right">&nbsp;</td>
</tr> <tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td>&nbsp;</td>
</tr>
</table>
<br>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td colspan="3" align="left"><hr align="left" width="150" size="1" noshade></td>
  </tr>
<tr valign="top">
<td colspan="2" align="left"><font size="1" face="serif">Notes:</font></td>
<td width="2%" align="left"><font size="1"> &nbsp;</font></td> </tr>
<tr valign="top">
<td width="3%" align="left"><font size="1" face="serif">(1)</font></td>
<td align="left"><font size="1" face="serif">The Company&#8217;s pro-rata share
    of net income is before Management and other fees as these amounts are paid
    to the Company.</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">9</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<p align="left"><b><font face="serif" size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED PARTNERSHIPS (continued)</font></b></p>
<p align="left"><b><font face="serif" size="2">Acadia Strategic Opportunity Fund II, LLC (&#8220;Fund II&#8221;)</font></b></p>
<p align="left"><font face="serif" size="2">In June of 2004, the Company formed a joint venture (&#8220;Fund II&#8221;), with the investors from Fund I as well as two additional institutional investors for the purpose of acquiring real estate assets.&nbsp; The total committed capital for Fund II is $300,000, of which the Company&#8217;s share is $60,000.&nbsp; The Company is the sole managing member with a 20% interest in the joint venture and is also entitled to profit participation in excess of its invested capital based on certain investment return thresholds.&nbsp; The Company also earns market-rate fees for asset management as well as for property management, construction, legal and leasing services.&nbsp; Decisions made by the managing member, as they relate to purchasing, financing
and disposition of properties, are subject to the unanimous disapproval of the Advisory Committee, which is comprised of representatives from each of the six institutional investors.</font></p>
<p align="left"><font face="serif" size="2">On September 29, 2004, in conjunction with an investment partner, P/A Associates, LLC (&#8220;P/A&#8221;), Fund II purchased 400 East Fordham Road in the Bronx, NY for $30,197, inclusive of closing and other related acquisition costs.&nbsp; The Company had provided a bridge loan of $18,000 to Fund II in connection with this acquisition.&nbsp; Subsequent to the acquisition, Fund II repaid this loan from the Company with $18,000 of proceeds from a new loan from a bank which bears interest at LIBOR plus 175 basis points and matures November 2007.  On February 25, 2005, Fund II, in conjunction with P/A, purchased a parcel of land adjacent to 400 E. Fordham Road for $867, inclusive of closing and related acquisition costs. </font></p>
<p align="left"><font face="serif" size="2">On October 1, 2004, Fund II initiated its second project in conjunction with P/A.&nbsp; Fund II entered into a 95-year ground lease to redevelop a 16-acre site in Pelham Manor, Westchester County, New York.</font></p>
<p align="left"><font face="serif" size="2">On April 6, 2005, in conjunction with P/A, Fund II purchased a 140,000 square foot building located in the Washington Heights section of Manhattan, NY.&nbsp; The building was acquired for a purchase price of $25,000.&nbsp; Fund II plans to redevelop the site to include retail, commercial and residential components totaling over 300,000 square feet.   In September 2005, Fund II obtained a mortgage loan of $19,000 secured by this property which requires monthly payments of interest only at a fixed interest rate of 5.256% and matures September 2007.</font></p>
<p align="left"><font face="serif" size="2">During July 2005, Fund II, in conjunction with its partners in the Retailer Controlled Property Venture, invested $1,000 for a 50% interest in a leasehold for a Levitz Store located in Rockville, Maryland.</font></p>
<p align="left"><font face="serif" size="2">On August 5, 2005, Fund II in partnership with P/A, purchased 260 East 161<sup>st</sup> Street in the Bronx, NY for $49,374, inclusive of closing and other related acquisition costs.  Concurrent with the closing, Fund II and P/A obtained a short term loan of $12,066 which bears interest at LIBOR plus 150 basis points and matures December 2005.</font></p>
<p align="left"><font face="serif" size="2">During the third quarter of 2005, Fund II drew down a total of $34,400 under an existing subscription credit facility, which bears interest at LIBOR plus 75 basis points.  The line proceeds were utilized for the acquisition of 260 East 161<sup>st</sup> Street.</font></p>
<p align="left"><font face="serif" size="2">The Company accounts for its investment in Fund II using the equity method. Summary financial information of Fund II and the Company&#8217;s investment in and share of income from Fund II follows:&nbsp;</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>September 30,</b></font><font size="1"><br><font face="serif"><b>2005</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>December 31,</b></font><font size="1"><br><font face="serif"><b>2004</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade>
</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Balance Sheets</font></td>
<td width="2%" align="right"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2">&nbsp;</font></td>
<td width="9%" align="right"><font size="2">&nbsp;</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2">&nbsp;</font></td>
<td width="9%" align="right"><font size="2">&nbsp;</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Assets:</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Rental property, net</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">101,113</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">29,058</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other assets</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">35,478</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">4,879</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="right"><font size="2">&nbsp;</font></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade>
</td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total assets</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">136,591</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">33,937</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="right"><font size="2">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade>
</td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Liabilities and partners&#8217; equity</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Mortgage notes payable</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">83,466</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">18,000</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other liabilities</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3,320</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">910</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Partners&#8217; equity</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">49,805</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">15,027</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="right"><font size="2">&nbsp;</font></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade>
</td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total liabilities and partners&#8217; equity</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">136,591</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">33,937</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="right"><font size="2">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade>
</td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Company&#8217;s investment in Fund
    II</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">9,693</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">2,760</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr> <tr valign="top">
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="right"><font size="2">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade>
</td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"><font size="2">&nbsp;</font></td>
</tr>
</table>
<br>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr align="center" valign="top">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td colspan="4"><font size="1" face="serif"><b>Three months ended</b></font><font size="1"><br>
    <font face="serif"><b>September 30,</b></font></font><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td colspan="4"><font size="1" face="serif"><b> Nine months ended</b></font><font size="1"><br>
    <font face="serif"><b> September 30,</b></font></font><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr align="center" valign="top">
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2005</b></font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1" face="serif"><b> 2004</b></font></td>
<td><font size="1">&nbsp;</font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2005</b></font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif">&nbsp;</font></td>
<td><font size="1" face="serif"><b>2004</b></font></td>
<td><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Statements of Operations </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total revenue </font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">2,696</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">&#151;</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">4,479</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">&#151;</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Operating and other expenses </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,197</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3,455</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Management and other fees </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,262</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3,198</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Interest expense </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">687</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1,128</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Depreciation and amortization </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">645</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1,265</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Minority interest</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">16</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(56</font></td>
<td align="left"><font size="2" face="serif">)&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr> <tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Net loss </font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(1,111</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(4,511</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr> <tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Company&#8217;s share of net loss
    (1)</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">27</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(251</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr> <tr valign="top">
<td></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
<td><hr noshade size="2"></td>
<td><hr noshade size="2"></td>
<td></td>
</tr>
</table>
<br>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td colspan="2" align="left"><hr align="left" width="150" size="1" noshade></td>
  </tr>
<tr valign="top">
<td colspan="2" align="left"><font size="1" face="serif">Notes:</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td width="3%" align="left"><font size="1" face="serif">(1)</font></td>
<td align="left"><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1" face="serif">The Company&#8217;s pro-rata share
    of net income is before Management and other fees as these amounts are paid
    to the Company.</font><font size="1">&nbsp;</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">10</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<p align="left"><b><font face="serif" size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED PARTNERSHIPS (continued)</font></b></p>
<p align="left"><b><font face="serif" size="2">Acadia Strategic Opportunity Fund II, LLC (&#8220;Fund II&#8221;</font></b></p>
<p align="left"><b><font face="serif" size="2">Retailer Controlled Property Venture</font></b></p>
<p align="left"><font face="serif" size="2">On January 27, 2004, the Company entered into the Retailer Controlled Property Venture (&#8220;RCP Venture&#8221;) with Klaff Realty, L.P. (&#8220;Klaff&#8221;) and Klaff&#8217;s 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&#8217;s through the RCP Venture, which, as part of an investment consortium of Sun Capital Partners, Inc. and Cerberus</font><font face="serif" size="2"> Capital Management L.P.</font><font face="serif" size="2">, acquired Mervyn&#8217;s from Target Corporation. The total acquisition price was $1.175 billion, with such affiliates&#8217; combined $23,520 share of the investment divided equally between them. The Company&#8217;s
 share of the acquisition totaled $4,965. During the nine months ended September 30, 2005, Funds I and II contributed an additional total of $1,040 into the Mervyn&#8217;s investment, of which the Company&#8217;s share was $220. During the nine months ended September 30, 2005, the Company recognized $3,898 of income from the Mervyn&#8217;s investment representing its share of net income from this investment.</font></p>
<p align="left"><b><font face="serif" size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DERIVATIVE FINANCIAL INSTRUMENTS</font></b></p>
<p align="left"><font face="serif" size="2">The following table summarizes the notional values and fair values of the Company&#8217;s derivative financial instruments as of September 30, 2005. The notional value does not represent exposure to credit, interest rate or market risks.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="bottom">
<td align="left"><font size="1" face="serif"><b>Hedge Type</b></font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Notional Value</b></font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Interest</b></font><font size="1"><br><font face="serif"><b>Rate</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Forward Start</b></font><font size="1"><br><font face="serif"><b>Date</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Interest</b></font><font size="1"><br><font face="serif"><b>Maturity</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Fair Value</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><hr size="1" noshade>
</td>
<td align="right">&nbsp;</td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="right">&nbsp;</td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="center"></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">LIBOR Swap</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">11,767</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="8%" align="right"><font size="2" face="serif">4.11</font></td>
<td width="2%" align="left"><font size="2" face="serif">%</font></td>
<td width="1%" align="right">&nbsp;</td>
<td width="8%" align="right"><font size="2" face="serif">n/a</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"></td>
<td width="8%" align="right"><font size="2" face="serif">1/1/07</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">45</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">LIBOR Swap</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">15,211</font></td>
<td align="right">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4.32</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">n/a</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">1/1/07</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">19</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">LIBOR Swap</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">37,111</font></td>
<td align="right">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4.35</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">n/a</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1/1/11</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">286</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="right">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Interest rate swap receivable (2)</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="right">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">350</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="right">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">LIBOR Swap</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">20,000</font></td>
<td align="right">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4.53</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">n/a</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">10/1/06</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(33</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">LIBOR Swap</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">8,765</font></td>
<td align="right">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4.47</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">n/a</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">6/1/07</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(5</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">LIBOR Swap (1)</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">11,410</font></td>
<td align="right">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4.90</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">10/2/06</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">10/1/11</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(143</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">LIBOR Swap (1)</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">8,434</font></td>
<td align="right">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">5.14</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">6/1/07</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">3/1/12</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(172</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">LIBOR Swap (1)</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">4,640</font></td>
<td align="right">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4.71</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">10/2/06</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1/1/10</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(21</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="right">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;Interest rate swap payable</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="right">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(374</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="right">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<br>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td colspan="2" align="left"><hr align="left" width="150" size="1" noshade></td>
  </tr>
<tr valign="top">
<td colspan="2" align="left"><font size="1" face="serif">Notes:</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td width="3%" align="left"><font size="1" face="serif">(1)</font></td>
<td align="left"><font size="1" face="serif">Forward starting swap agreements</font><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(2)</font></td>
<td align="left"><font size="1" face="serif">Included in Other Assets in the
    Consolidated Balance Sheets</font><font size="1">&nbsp;</font></td>
</tr>
</table>
<p align="left"><b><font face="serif" size="2">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MORTGAGE LOANS</font></b></p>
<p align="left"><font face="serif" size="2">On February 25, 2005, the Company drew down $20,000 under an existing revolving facility, which bears interest at LIBOR plus 150 basis points.&nbsp; The proceeds from this drawdown were utilized for the Preferred Equity investment (Note 14).</font></p>
<p align="left"><font face="serif" size="2">During April 2005, the Company borrowed $7,400 under an existing secured revolving facility.</font></p>
<p align="left"><font face="serif" size="2">On May 26, 2005, the Company closed on a $65,000 cross-collateralized revolving facility which is collateralized by five of the Company&#8217;s properties. The facility bears interest at LIBOR plus 130 basis points and matures June 1, 2010. At closing, the lender advanced $12,000, of which $7,400 was used to refinance an existing facility with the same lender. As of September 30, 2005, an additional $20,000 was drawn on this line resulting in $32,000 outstanding under this facility.</font></p>
<p align="left"><font face="serif" size="2">On August 31, 2005, the Company closed on a $17,600 loan, which bears interest at a fixed rate of 4.98%.  This loan, which matures September 2015, requires the payment of interest only until October 2010, and thereafter interest and principal based on 30 year amortization. The proceeds from this loan were in part used to pay down $15,000 on an existing line.</font></p>
<p align="left"><b><font face="serif" size="2">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RELATED PARTY TRANSACTIONS</font></b></p>
<p align="left"><font face="serif" size="2">In February 2005, the Company issued $4,000 of Restricted Common OP Units to Klaff for the balance of certain management contract rights as well as the rights to certain potential future revenue streams (Note 5).</font></p>
<p align="left"><font face="serif" size="2">In March 2005, the Company completed a $20,000 Preferred Equity Investment with Levitz SL, of which Klaff, a common and preferred OP unit holder, is the managing member.</font></p>
<p align="left"><font face="serif" size="2">The Company earns certain management and service fees in connection with its investment in Fund I and Fund II (Note 7). Such fees earned by the Company aggregated $5,073 and $2,214 for the nine months ended September 30, 2005 and 2004, respectively, and $1,794 and $1,203 for the three  months ended September 30, 2005 and 2004, respectively.</font></p>
<p align="center"><font face="serif" size="2">11</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<p align="left"><b><font face="serif" size="2">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RELATED PARTY TRANSACTIONS (continued)</font></b></p>
<p align="left"><font face="serif" size="2">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 Klaff has an interest. Net fees earned by the Company in connection with this portfolio were $2,444 and $535 for the nine months ended September 30, 2005 and 2004, respectively, and $888 and $204 for the three months ended September 30, 2005 and 2004, respectively. These amounts are net of the payment of sub-management fees to Klaff of $303 and $1,168 for the nine months ended September 30, 2005 and 2004, respectively, and $0 and $433 for the three months ended September 30, 2005 and 2004, respectively.</font></p>
<p align="left"><font face="serif" size="2">The Company managed one property in which a major shareholder of the Company had an ownership interest and earned a management fee of  3% of tenant collections.&nbsp; Management fees earned by the Company under this contract aggregated $142 for the nine months ended September 30, 2004.&nbsp; In addition, the Company earned leasing commission of $157 related to this property for the nine months ended September 30, 2004.&nbsp; 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>
<p align="left"><font face="serif" size="2">Lee Wielansky, the Lead Trustee of the Company, was paid a consulting fee of $25 for both the three months ended September 30, 2005 and 2004 and $75 for both the nine months ended September 30, 2005 and 2004.</font></p>
<p align="left"><b><font face="serif" size="2">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SEGMENT REPORTING</font></b></p>
<p align="left"><font face="serif" size="2">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 as discussed in the Company&#8217;s Annual Report on Form 10-K. 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 for continuing operations as of and for the three and nine months ended September 30, 2005
and 2004 (does not include unconsolidated partnerships):</font></p>

<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr valign="bottom">
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="right"><font size="1"> &nbsp;</font></td>
  <td colspan="11" align="center"><font size="1">&nbsp;<b><u><font face="serif">Nine
    months ended September 30, 2005</font></u></b></font></td>
  <td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="bottom">
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="right"><font size="1"> &nbsp;</font></td>
  <td colspan="2" align="center"><font size="1">&nbsp;</font></td>
  <td align="center"><font size="1">&nbsp;</font></td>
  <td colspan="2" align="center"><font size="1">&nbsp;</font></td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td colspan="2" align="center"><font size="1">&nbsp;</font></td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td colspan="2" align="center"><font size="1">&nbsp;</font></td>
  <td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="bottom">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Retail</b></font><font size="1"><br><font face="serif"><b>Properties</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Multi-Family</b></font><font size="1"><br><font face="serif"><b>Properties</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>All</b></font><font size="1"><br><font face="serif"><b>Other</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Total</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade>
</td>
  <td align="center">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td colspan="2" align="center"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Revenues</font></td>
<td width="2%" align="right" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">44,841</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,671</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">10,191</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">60,703</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Property operating expenses and
    real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">13,872</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">3,083</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">16,955</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Other expenses</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,277</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">288</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,709</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">10,274</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income before depreciation, amortization
    and certain nonrecurring items</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">28,692</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,300</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,482</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">33,474</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Depreciation and amortization</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,998</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,093</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,258</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">12,349</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Interest expense</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,121</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">992</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">8,113</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Real estate at cost</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">393,473</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">41,387</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">434,860</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total assets</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">380,650</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">37,148</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">48,530</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">466,328</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Gross leasable area (multi-family &#150; 1,474
    units)</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,710</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,207</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,917</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Expenditures for real estate and
    improvements</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">24,382</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">24,382</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td height="22" align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Revenues</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total revenues for reportable segments</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">63,334</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Elimination of intersegment management
    fee income</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(1,145</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Elimination of intersegment asset
    management fee income</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(832</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Elimination of intersegment service
    fees and interest income</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(654</font></td>
<td align="left"><font size="2" face="serif">) </font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total consolidated revenues</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">60,703</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Property operating expenses and
    real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total property operating expenses
    and real estate taxes for reportable segments</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">18,174</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left"><font size="2" face="serif">Elimination of intersegment management
    fee expenses</font></td>
  <td align="right">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="right"><font size="2" face="serif">(964</font></td>
  <td align="left"><font size="2" face="serif">)</font></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  </tr>
<tr valign="top">
  <td align="left"><font size="2">Elimination of intersegment interest expense</font></td>
  <td align="right"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="right"><font size="2">(255</font></td>
  <td align="left"><font size="2">)</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="right"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="right"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total consolidated expenses</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,955</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Reconciliation to net income</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income before depreciation and amortization</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">33,474</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Depreciation and amortization</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(12,349</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Equity in earnings of unconsolidated
    partnerships</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,795</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Interest expense</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(8,113</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Loss from discontinued operations</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(684</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Provision for Income Taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif"> (1,618</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Minority interest in continuing
    operations</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(490</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net income</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,015</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<p align="center"><font face="serif" size="2">12</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
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<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<p align="left"><b><font face="serif" size="2">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SEGMENT REPORTING (continued)</font></b></p>

<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr align="center" valign="bottom">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td colspan="11"><b><u><font face="serif" size="1">Three months ended September
    30, 2005</font></u></b></td>
  <td><font size="1">&nbsp;</font></td>
</tr>
<tr align="center" valign="bottom">
  <td><font size="1">&nbsp;</font></td>
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  <td><font size="1">&nbsp;</font></td>
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  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
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  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
</tr>
<tr align="center" valign="bottom">
  <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" face="serif"><b>Retail</b></font><font size="1"><br>
    <font face="serif"><b>Properties</b></font></font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1" face="serif"><b>Multi-Family</b></font><font size="1"><br>
    <font face="serif"><b>Properties</b></font></font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1" face="serif"><b>All</b></font><font size="1"><br>
    <font face="serif"><b>Other</b></font></font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1" face="serif"><b>Total</b></font></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr align="center" valign="bottom">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="1" noshade></td>
  <td><hr size="1" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="1" noshade></td>
  <td><hr size="1" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="1" noshade></td>
  <td><hr size="1" noshade></td>
  <td><font size="1">&nbsp;</font></td>
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  <td><hr size="1" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Revenues</font></td>
<td width="2%" align="right" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">14,902</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,905</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,938</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">20,745</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Property operating expenses and
    real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">4,463</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">1,185</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5,648</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Other expenses</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,077</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">21</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,401</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,499</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr align="center" valign="bottom">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="1" noshade></td>
  <td><hr size="1" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="1" noshade></td>
  <td><hr size="1" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="1" noshade></td>
  <td><hr size="1" noshade></td>
  <td><font size="1">&nbsp;</font></td>
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  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income before depreciation, amortization
    and certain nonrecurring items</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,362</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">699</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,537</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">11,598</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr align="center" valign="bottom">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Depreciation and amortization</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,392</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">370</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">675</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,437</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr align="center" valign="bottom">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Interest expense</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,710</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">374</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,084</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr align="center" valign="bottom">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Real estate at cost</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">393,473</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">41,387</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">434,860</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr align="center" valign="bottom">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total assets</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">380,650</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">37,148</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">48,530</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">466,328</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr align="center" valign="bottom">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Gross leasable area (multi-family &#150; 1,474
    units)</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,710</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,207</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,917</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr align="center" valign="bottom">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Expenditures for real estate and
    improvements</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,388</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">327</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,715</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr align="center" valign="bottom">
  <td><font size="1">&nbsp;</font></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  <td><hr size="2" noshade></td>
  <td><hr size="2" noshade></td>
  <td><font size="1">&nbsp;</font></td>
  </tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Revenues</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total revenues for reportable segments</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">21,643</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Elimination of intersegment management
    fee income</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(385</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Elimination of intersegment asset
    management fee income</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(307</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Elimination of intersegment service
    fees and interest income</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(206</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total consolidated revenues</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">20,745</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Property operating expenses and
    real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;Total property operating expenses
    and real estate taxes for&nbsp;reportable segments</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">6,047</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Elimination of intersegment management
    fee expense</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(312</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left"><font size="2">Elimination of intersegment interest expense</font></td>
  <td align="right"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="right"><font size="2">(87</font></td>
  <td align="left"><font size="2">)</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="right"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="right"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total consolidated expenses</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,648</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Reconciliation to net income</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income before depreciation and amortization</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">11,598</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Depreciation and amortization</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(4,437</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Equity in earnings of unconsolidated
    partnerships</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,911</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Interest expense</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(3,084</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Loss from discontinued operations</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(69</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Provision for Income Taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(1,618</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Minority interest in continuing
    operations</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(76</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net income</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,225</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<p align="center"><font face="serif" size="2">13</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<p align="left"><b><font face="serif" size="2">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SEGMENT REPORTING (continued)</font></b></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr valign="top">
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="right"><font size="1">&nbsp;</font></td>
  <td colspan="11" align="center" valign="bottom"><b><u><font face="serif" size="1">Nine months
    ended September 30, 2004</font></u></b></td>
  <td align="center" valign="bottom"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="right"><font size="1">&nbsp;</font></td>
  <td colspan="2" align="center" valign="bottom"><font size="1">&nbsp;</font></td>
  <td align="center" valign="bottom"><font size="1">&nbsp;</font></td>
  <td colspan="2" align="center" valign="bottom"><font size="1">&nbsp;</font></td>
  <td align="center" valign="bottom"><font size="1">&nbsp;</font></td>
  <td colspan="2" align="center" valign="bottom"><font size="1">&nbsp;</font></td>
  <td align="center" valign="bottom"><font size="1"> &nbsp;</font></td>
  <td colspan="2" align="center" valign="bottom"><font size="1">&nbsp;</font></td>
  <td align="center" valign="bottom"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Retail</b></font><font size="1"><br><font face="serif"><b>Properties</b></font></font></td>
<td align="center" valign="bottom"><font size="1" face="serif"> &nbsp;</font></td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Multi-Family</b></font><font size="1"><br><font face="serif"><b>Properties</b></font></font></td>
<td align="center" valign="bottom"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>All</b></font><font size="1"><br><font face="serif"><b>Other</b></font></font></td>
<td align="center" valign="bottom"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Total</b></font></td>
<td align="center" valign="bottom"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="center" valign="bottom">
  <hr size="1" noshade></td>
<td align="center" valign="bottom"><hr size="1" noshade>
</td>
<td align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
<td align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
<td align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
<td align="center" valign="bottom"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Revenues</font></td>
<td width="2%" align="right" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">43,055</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,686</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,040</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">52,781</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Property operating expenses and
    real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">14,354</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">3,212</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">17,566</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Other expenses</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,179</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">420</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,986</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,585</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income before depreciation, amortization
    and certain nonrecurring items</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">25,522</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,054</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">54</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">27,630</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Depreciation and amortization</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,697</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,056</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">654</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">11,407</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Interest expense</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">6,371</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,136</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">7,507</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Real estate at cost</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">371,707</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">40,421</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">412,128</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total assets</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">354,036</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">36,847</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">21,750</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">412,633</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Gross leasable area (multi-family &#150; 1,474
    units)</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,652</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,207</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,859</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Expenditures for real estate and
    improvements</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,406</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">647</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,053</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Revenues</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total revenues for reportable segments</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">54,184</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Elimination of intersegment management
    fee income</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(958</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Elimination of intersegment asset
    management fee income</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(445</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total consolidated revenues</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">52,781</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Property operating expenses and
    real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total property operating expenses
    and real estate taxes for&nbsp;reportable segments</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">18,399</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Elimination of intersegment management
    fee expense</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(833</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total consolidated expenses</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">17,566</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Reconciliation to net income</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income before depreciation and amortization</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">27,630</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Depreciation and amortization</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(11,407</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Equity in earnings of unconsolidated
    partnerships</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,533</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Interest expense</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(7,507</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Gain on sale of land</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">931</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Loss from discontinued operations</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(625</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Minority interest in continuing
    operations</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(1,046</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net income</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">9,509</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<p align="center"><font face="serif" size="2">14</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td><b><font size="2" face="serif">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b><font size="2" face="serif"><b>SEGMENT
      REPORTING (continued)</b></font></td>
</tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr valign="top">
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="right"><font size="1">&nbsp;</font></td>
  <td colspan="12" align="center"><b><u><font face="serif" size="1">Three months
    ended September 30, 2004</font></u></b></td>
  </tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="9" align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="bottom">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Retail</b></font><font size="1"><br>
  <font face="serif"><b>Properties</b></font></font></td>
<td align="left"><font size="1" face="serif"> &nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Multi-Family</b></font><font size="1"><br>
  <font face="serif"><b>Properties</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>All</b></font><font size="1"><br>
  <font face="serif"><b>Other</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Total</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><hr size="1" noshade>
</td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Revenues</font></td>
<td width="2%" align="right" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">14,367</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,832</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,888</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">18,087</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Property operating expenses and
    real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5,244</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">1,187</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">6,431</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Other expenses</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">306</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">34</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,334</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,674</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income before depreciation, amortization
    and certain nonrecurring items</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">8,817</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">611</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(446</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">8,982</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Depreciation and amortization</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,194</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">356</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">212</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3,762</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Interest expense</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,257</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">387</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,644</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Real estate at cost</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">371,707</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">40,421</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">412,128</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total assets</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">354,036</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">36,847</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">21,750</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">412,633</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Gross leasable area (multi-family &#150; 1,474
    units)</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,652</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,207</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,859</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Expenditures for real estate and
    improvements</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,649</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">321</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1,970</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Revenues</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total revenues for reportable segments</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">18,725</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Elimination of intersegment management
    fee income</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(343</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Elimination of intersegment asset
    management fee income</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(295</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total consolidated revenues</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">18,087</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Property operating expenses and
    real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;Total property operating expenses
    and real estate taxes for&nbsp;reportable segments</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">6,728</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Elimination of intersegment management
    fee expense</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(297</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total consolidated expenses</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">6,431</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Reconciliation to net income</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Income before depreciation and amortization</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">8,982</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Depreciation and amortization</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(3,762</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Equity in earnings of unconsolidated
    partnerships</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">483</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Interest expense</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(2,644</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Gain on sale of land</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">423</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Loss from discontinued operations</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(202</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Minority interest in continuing
    operations</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(385</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net income</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,895</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<p align="center"><font face="serif" size="2">15</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<p align="left"><b><font face="serif" size="2">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DISCONTINUED OPERATIONS</font></b></p>
<p align="left"><font face="serif" size="2">The combined results of operations and assets and liabilities of either sold properties or property held for sale are reported separately as discontinued operations for and as of the three and nine months ended September 30, 2005 and 2004. These are related to the Berlin Shopping Center, which was sold on July 7, 2005 and the East End Centre, which was sold on November 22, 2004. </font></p>
<p align="left"><font face="serif" size="2">The combined results of operations and assets and liabilities of the properties classified as discontinued operations are summarized as follows:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>December 31,</b></font><font size="1"><br><font face="serif"><b>2004</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>ASSETS</b></font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net real estate</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4,827</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Rents receivable, net</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">406</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Prepaid expenses</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">35</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other assets</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,268</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>LIABILITIES AND SURPLUS</b></font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Accounts payable and accrued expenses</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">13</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other liabilities</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">38</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total liabilities</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">51</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Surplus</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,217</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total liabilities and surplus</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,268</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<br>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="4" align="center"><font size="1" face="serif"><b>For the three months ended</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="4" align="center"><font size="1" face="serif"><b>Nine months ended</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="4" align="center"><font size="1" face="serif"><b>September 30,</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="4" align="center"><font size="1" face="serif"><b>September 30,</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>2005</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>2004</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>2005</b></font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>2004</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td><font size="1">&nbsp;</font></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>
<td><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total revenues </font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">12</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">620</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">594</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">2,007</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Total expenses</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">32</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">826</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">470</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,649</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(20</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(206</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">124</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(642</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Impairment of real estate</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(770</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Loss on sale of property</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(50</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(50</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Minority interest</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">12</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">17</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="1"></td>
  <td align="right"><hr noshade size="1"></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Loss from discontinued operations</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(69</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(202</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(684</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(625</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
  <td align="right"><hr noshade size="2"></td>
  <td align="right"><hr noshade size="2"></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<p align="left"><b><font face="serif" size="2">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;STOCK-BASED COMPENSATION</font></b></p>
<p align="left"><font face="serif" size="2">The Company has adopted the fair value method of recording stock-based compensation contained in SFAS No. 123, &#8220;Accounting for Stock-Based Compensation&#8221;. 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.</font></p>
<p align="left"><font face="serif" size="2">On January 3, 2005 (the &#8220;Grant Date&#8221;), the Company issued 50,342 options (net of subsequent forfeitures) to officers and employees. The options, which have an exercise price of $16.35, are for ten-year terms and vest one third as of the Grant Date and one third on each of the next two anniversaries thereof. The Company has determined a value of $2.57 per option using the binomial method for valuing such options. In prior periods, the Company utilized the Black-Scholes method for valuing options granted and believes that the binomial method more accurately reflects the value of the options. This change had no material effect on the value of the unvested options or the Company&#8217;s consolidated financial statements. Accordingly,
compensation expense of $11 and $75 has been recognized in the accompanying consolidated financial statements related to these options for the three and nine months ended September 30, 2005.</font></p>
<p align="left"><font face="serif" size="2">On the Grant Date, the Company also issued a total of 109,826 restricted Common Shares (&#8220;Restricted Shares&#8221;) to executive officers (&#8220;Officers&#8221;) and 23,872 Restricted Shares (net of subsequent forfeitures) to certain employees (&#8220;Employees&#8221;) of the Company.&nbsp; In general, the Restricted Shares carry all the rights of Common Shares including voting and dividend rights, but may not be transferred, assigned or pledged until the Recipients have a vested non-forfeitable right to such shares. Vesting with respect to the Restricted Shares issued to Officers, which is subject to the Recipients&#8217; continued employment with the Company through the applicable vesting dates, is ratably over four years commencing on
the first anniversary of the Grant Date and each of the next three anniversaries thereafter. In addition, vesting on 50% of these Restricted Shares is also subject to certain total shareholder returns on the Company&#8217;s Common Shares. Vesting with respect to the Restricted Shares issued to Employees, which is subject to the Recipients&#8217; continued employment with the Company through the applicable vesting dates, is ratably over five years commencing on the Grant Date and each of the next four anniversaries thereafter. In addition, vesting on 25% of these Restricted Shares is also subject to certain total shareholder returns on the Company&#8217;s Common Shares.</font></p>
<p align="left"><font face="serif" size="2">The total value of the above restricted share awards on the date of grant was $2,179 which will be recognized in compensation expense over the vesting period. Compensation expense of $131 and $475 has been recognized in the accompanying consolidated financial statements related to these Restricted Shares for the three and nine months ended September 30, 2005, respectively.</font></p>
<p align="center"><font face="serif" size="2">16</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST AND SUBSIDIARIES<br>
</font></b><b><font face="serif" size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
</font></b><font face="serif" size="2">(in thousands, except per share amounts)</font></p>
<p align="left"><b><font face="serif" size="2">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PREFERRED EQUITY INVESTMENT</font></b></p>
<p align="left"><font face="serif" size="2">In March of 2005, the Company invested
    $20,000 in a preferred equity position (&#8220;Preferred Equity&#8221;) with
    Levitz SL, L.L.C. (&#8220;Levitz SL&#8221;), the owner of 2.5 million square
    feet of fee and leasehold interests in 30 locations (the &#8220;Properties&#8221;),
    the majority of which are currently leased to Levitz Furniture Stores. Klaff
    Realty L.P. (&#8220;Klaff&#8221;) is a managing member of Levitz SL. The
    Preferred Equity receives a return of 10%, plus a minimum return of capital
    of $2,000 per annum. At the end of 12 months, the rate of return will be
    reset to the six-month LIBOR plus 644 basis points. The Preferred Equity
    is redeemable at the option of Levitz SL at any time, although if redeemed
    during the first 12 months, the redemption price is equal to the outstanding
    amount of the Preferred Equity, plus the return calculated for the remainder
    of the 12-month period. In October 2005, Levitz Furniture filed for bankruptcy
    under Chapter 11. The Company has a preferred equity investment of $19,500
     at September 30, 2005. This investment was not made based on Levitz
    remaining
    as a tenant, but rather based on the underlying value of the real estate,
    which management believes is sufficient to recover our equity investment
    and the return attributable thereto. Accordingly, no reserve is required
    at September 30, 2005.  </font></p>
<p align="left"><b><font face="serif" size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CONTINGENCIES</font></b></p>
<p align="left"><font face="serif" size="2">During the nine months ended September 30, 2005, the Company reduced a previously recorded reserve by $480 related to the settlement of its insurance claim in connection with the flood damage incurred at Mark Plaza located in Wilkes-Barre, PA.&nbsp; The Company had previously provided a reserve of $730 as of December 31, 2004 related to the flood damage.&nbsp;</font></p>
<p align="center"><font face="serif" size="2">17</font></p>
<hr noshade align="center" width="100%" size="2">
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<page>
<a name="p18"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="left"><b><font face="serif" size="2">Item 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations</font></b></p>
<p align="left"><font face="serif" size="2">The following discussion is based on our consolidated financial statements as of September 30, 2005 and 2004 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>
<p align="left"><b><font face="serif" size="2">FORWARD-LOOKING STATEMENTS</font></b></p>
<p align="left"><font face="serif" size="2">Certain statements contained in this report constitute &#8220;forward-looking statements&#8221; 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 our actual results, performance or achievements 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 our Form 10-K for the year ended December 31, 2004 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 our 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>
<p align="left"><b><font face="serif" size="2">OVERVIEW</font></b></p>
<p align="left"><font face="serif" size="2">We operate 71 properties, which we own or have an ownership interest in, consisting of 69 neighborhood and community shopping centers and two multi-family properties, principally located in the Northeast, Mid-Atlantic and Midwest regions of the United States. We receive income primarily from the rental revenue from our properties, including expense recoveries from tenants, offset by operating and overhead expenses. We focus on three primary areas in executing our business plan as follows:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%" align="right">&nbsp;</td>
<td width="3%" align="right"><font size="2" face="serif">&#151;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">We focus on maximizing the return
    on our existing portfolio through leasing and property redevelopment activities.
    Our redevelopment program is a significant and ongoing component of managing
    our existing portfolio and it focuses on selecting well-located neighborhood
    and community shopping centers and creating significant value through re-tenanting
    and property redevelopment.</font></td>
</tr>
<tr valign="top">
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">We pursue above-average returns
    through a disciplined and opportunistic acquisition program. The primary
    conduits for our current acquisition program are through our existing acquisition
    joint venture, Acadia Strategic Opportunity Fund II, LLC (&#8220;Fund II&#8221;),
    as well as the Retailer Controlled Property Venture (&#8220;RCP Venture&#8221;)
    established to invest in surplus or underutilized properties owned or controlled
    by retailers and the New York Urban/Infill Redevelopment initiative which
    focuses on investing in redevelopment projects in urban, dense areas where
    retail tenant demand has effectively surpassed the supply of available sites.</font></td>
</tr>
<tr valign="top">
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">We focus on maintaining a strong
    balance sheet, which provides us with the financial flexibility to fund both
    property redevelopment and acquisition opportunities.</font></td>
</tr>
</table>
<p align="left"><b><font face="serif" size="2">CRITICAL ACCOUNTING POLICIES</font></b></p>
<p align="left"><font face="serif" size="2">Management&#8217;s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with Generally Accepted Accounting Principles (&#8220;GAAP&#8221;). The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Management 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 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. We believe the following critical accounting policies affect the significant judgments and estimates used by us in the preparation of our consolidated financial statements.</font></p>
<p align="left"><b><font face="serif" size="2">Valuation of Property Held for Use and Sale</font></b></p>
<p align="left"><font face="serif" size="2">On a quarterly basis, we review both properties held for use and for sale for indicators of impairment. We record impairment losses and reduce 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 we do not expect to recover our carrying costs on properties held for use, we reduce our carrying cost to fair value, and for properties held for sale, we reduce our carrying value to the fair value less costs to sell. For  the nine months ended September 30, 2005, an impairment loss of $0.8 million was recognized to reduce the carrying value of the Berlin Shopping Center , which was sold during July 2005, to
fair value less costs to sell. Management does not believe that the value of any other properties in our portfolio was impaired as of September 30, 2005.</font></p>
<p align="left"><b><font face="serif" size="2">Bad Debts</font></b></p>
<p align="left"><font face="serif" size="2">We maintain 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, 2005, we have recorded an allowance for doubtful accounts of $2.8 million. If the financial condition of our tenants were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.</font></p>
<p align="center"><font face="serif" size="2">18</font></p>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="left"><b><font face="serif" size="2">RESULTS OF OPERATIONS</font></b></p>
<p align="left"><b><font face="serif" size="2">Comparison of the three months ended September 30, 2005 (&#8220;2005&#8221;) to the three months ended September 30, 2004 (&#8220;2004&#8221;)</font></b></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1"> &nbsp;</font></td>
<td colspan="5" align="center"><font size="1" face="serif"><b>Change</b></font><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="5" align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>2004</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>$</b></font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>%</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif"> &nbsp;</font></td>
<td align="right"><font size="1"> &nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade>
</td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Revenues:</font></td>
<td width="2%" align="right"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Minimum rents</font></td>
<td width="2%" align="right"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">13.3</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">12.6</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">0.7</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"></td>
<td width="8%" align="right"><font size="2" face="serif">6</font></td>
<td width="2%" align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Percentage rents</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.1</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.1</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Expense reimbursements</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3.1</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3.3</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.2</font></td>
<td align="left"><font size="2" face="serif">)&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">(6</font></td>
<td align="left"><font size="2" face="serif">)%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other property income</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.2</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.2</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td height="18" align="left"><font size="2" face="serif">Management fee income</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">2.9</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1.6</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1.3</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">81</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Interest income</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1.1</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.3</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.8</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">266</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif"> &nbsp;</font></td>
  <td align="right"><font size="1"> &nbsp;</font></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="left"><hr size="1" noshade>
  </td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="left"><hr size="1" noshade>
  </td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="left"><hr size="1" noshade>
  </td>
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td align="left">
    <hr size="1" noshade></td>
  <td align="left"><hr size="1" noshade>
  </td>
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total revenues</font></td>
<td align="right"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">20.7</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">18.1</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">2.6</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">14</font></td>
<td align="left"><font size="2" face="serif">%</font></td>

<tr valign="top">
  <td align="left"><font size="1" face="serif"> &nbsp;</font></td>
  <td align="right"><font size="1"> &nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr></table>

<p align="left"><font face="serif" size="2">The increase in minimum rents was attributable to additional rents following the purchase of Amboy Road shopping center in July 2005, re-tenanting activities as well as increased occupancy across the portfolio.</font></p>
<p align="left"><font face="serif" size="2">Real estate tax reimbursements decreased
    $0.1 million and common area maintenance (&#8220;CAM&#8221;) expense reimbursements
    decreased $0.1 million in 2005. </font></p>
<p align="left"><font face="serif" size="2">Management fee income increased as a result of additional asset management and construction management fees from Fund II, and an increase in management fees related to the acquisition of certain management contract rights in January 2004 and February 2005.</font></p>
<p align="left"><font face="serif" size="2">The increase in interest income was attributable to our preferred equity investment in Levitz in 2005 and additional interest income on our notes receivable originated in 2005.&nbsp;</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1"> &nbsp;</font></td>
<td colspan="5" align="center"><font size="1" face="serif"><b>Change</b></font><font size="1">&nbsp;</font><font size="1">&nbsp;</font><font size="1">&nbsp;</font></td>
<td width="1%" align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="5" align="left">
  <hr size="1" noshade></td>
<td width="1%" align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>2004</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>$</b></font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>%</b></font></td>
<td width="1%" align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif"> &nbsp;</font></td>
<td align="right"><font size="1"> &nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade>
</td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="5" align="left"><hr size="1" noshade></td>
<td width="1%" align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Operating Expenses:</font></td>
<td width="2%" align="right"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="right"><font size="2">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Property operating</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">3.3</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">4.1</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(0.8</font></td>
<td align="left"><font size="2" face="serif">)&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(20</font></td>
<td width="1%" align="left"><font size="2" face="serif">)%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">2.4</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">2.3</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.1</font></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4</font></td>
<td width="1%" align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">General and administrative</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3.5</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">2.7</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.8</font></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">30</font></td>
<td width="1%" align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Depreciation and amortization</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">4.4</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3.8</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.6</font></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">16</font></td>
<td width="1%" align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total operating expenses</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">13.6</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">12.9</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.7</font></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">5</font></td>
<td width="1%" align="left"><font size="2" face="serif">%</font></td>
</tr>

  <td align="left"><font size="1" face="serif"> &nbsp;</font></td>
  <td align="right"><font size="1"> &nbsp;</font></td>
  <td align="left">
    <hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="left">
    <hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="left">
    <hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td align="left">
    <hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr></table>

<p align="left"><font face="serif" size="2">The decrease in property operating expenses was primarily a result of a non-recurring charge of approximately $0.7 million related to flood damage at the Mark Plaza in 2004 and lower bad debt expense in 2005.</font></p>
<p align="left"><font face="serif" size="2">The increase in real estate taxes was due to general increases in real estate taxes experienced across the portfolio.</font></p>
<p align="left"><font face="serif" size="2">The increase in general and administrative expense was attributable to increased compensation expense and other overhead expenses following the expansion of our infrastructure related to increased investment activity in Fund assets and asset management services.</font></p>
<p align="left"><font face="serif" size="2">Depreciation expense increased $0.1
    million in 2005.&nbsp; This was principally a result of increased depreciation
    expense following the purchase of Amboy shopping center in July 2005 and
    the redevelopment of Bartow Avenue being placed in service in the second
    quarter of 2005. Amortization expense increased $0.5 which was primarily
    attributable to the write off of certain Klaff management contracts following
    the disposition of these assets.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="2%" align="right"><font size="1">&nbsp;</font></td>
<td width="1%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="1">&nbsp;</font></td>
<td width="1%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="1"> &nbsp;</font></td>
<td align="center"><font size="1">&nbsp;&nbsp;&nbsp;</font></td>

<td colspan="4" align="center"><font size="1" face="serif"><b>Change</b></font><font size="1">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="2%" align="right"><font size="1">&nbsp;</font></td>
<td width="1%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="1">&nbsp;</font></td>
<td width="1%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="1"> &nbsp;</font></td>
<td align="left"><font size="1"> &nbsp;</font> </td>

<td colspan="4" align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="2%" align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>2005</b></font></td>
<td width="2%" align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>2004</b></font></td>
<td width="2%" align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>$</b></font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>%</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif"> &nbsp;</font></td>
<td width="2%" align="right"><font size="1"> &nbsp;</font></td>
<td width="1%" align="left"><hr size="1" noshade></td>
<td width="8%" align="left"><hr size="1" noshade>
</td>
<td width="2%" align="left"><font size="1">&nbsp;</font></td>
<td width="1%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><hr size="1" noshade></td>
<td width="2%" align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr><tr valign="top">
<td align="left"><font size="2" face="serif">Other:</font></td>
<td width="2%" align="right"><font size="1">&nbsp;</font></td>
<td width="1%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="8%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="2%" align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Equity in earnings of unconsolidated
    partnerships</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">4.9</font></td>
<td width="2%" align="left"></td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">0.5</font></td>
<td width="2%" align="left"></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">4.4</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">880</font></td>
<td align="left"><font size="2" face="serif">%&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Interest expense</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="right"><font size="2" face="serif">(3.1</font></td>
<td width="2%" align="left"><font size="2" face="serif">)</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="right"><font size="2" face="serif">(2.6</font></td>
<td width="2%" align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.5</font></td>
<td align="left"><font size="2" face="serif">)&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">(19</font></td>
<td align="left"><font size="2" face="serif">)%</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Gain on sale</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="right"><font size="2" face="serif">&#151;</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="right"><font size="2" face="serif">0.4</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.4</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">(100</font></td>
<td align="left"><font size="2" face="serif">)%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Minority interest</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="right"><font size="2" face="serif">(0.1</font></td>
<td width="2%" align="left"><font size="2" face="serif">)</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="right"><font size="2" face="serif">(0.4</font></td>
<td width="2%" align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.3</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">75</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Income Taxes</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="right"><font size="2" face="serif">(1.6</font></td>
<td width="2%" align="left"><font size="2" face="serif">)</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="right"><font size="2" face="serif">&#151;</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(1.6</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">(100</font></td>
<td align="left"><font size="2" face="serif">)%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Loss from discontinued operations</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="right"><font size="2" face="serif">(0.1</font></td>
<td width="2%" align="left"><font size="2" face="serif">)</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="right"><font size="2" face="serif">(0.2</font></td>
<td width="2%" align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.1</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">50</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr></table>
<p align="left"><font face="serif" size="2">Equity in earnings of unconsolidated partnerships increased as a result of our share of gain, through its investments funds, from the sale of certain Mervyn&#8217;s locations and our share of bankruptcy proceeds received from Penn Traffic through Fund I. </font></p>
<p align="left"><font face="serif" size="2">Interest expense increased to $3.1 million in 2005.  This increase was primarily attributable to higher average interest rates on the portfolio mortgage debt in 2005. </font></p>
<p align="left"><font face="serif" size="2">The gain on sale of land in 2004 was related to a prior year sale of a contract to purchase land to the Target Corporation.  We received additional sales proceeds of $0.4 million which were being held in escrow pending the completion of certain site work by the buyer.  Of these proceeds, $0.2 million were distributed to our joint venture partner in the sale and are a component of minority interest in the accompanying financial statements.</font></p>
<p align="center"><font face="serif" size="2">19</font></p>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p><p align="left"><font face="serif" size="2">Income taxes in 2005 relate to our share of income taxes on the gain, through its investment funds, from the sale of certain Mervyn&#8217;s locations during the quarter.</font></p>
<p align="left"><font face="serif" size="2">Loss from discontinued operations represents activity related to properties sold during 2004 and 2005. </font></p>
<p align="left"><b><font face="serif" size="2">Comparison of the nine months ended September 30, 2005 (&#8220;2005&#8221;) to the nine months ended September 30, 2004 (&#8220;2004&#8221;)</font></b></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="53%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="6" align="center"><font size="1" face="serif"><b>Change</b></font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="5" align="center"><hr size="1" noshade></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1"> &nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>2004</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>$</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>%</b></font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif"> &nbsp;</font></td>
<td align="center"><font size="1"> &nbsp;</font></td>
<td colspan="2" align="center"><hr size="1" noshade></td>
<td align="center"><font size="1"> &nbsp;</font></td>
<td colspan="2" align="center"><hr size="1" noshade></td>
<td align="center"><font size="1"> &nbsp;</font></td>
<td colspan="5" align="center"><hr size="1" noshade></td>
<td align="center"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Revenues:</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="8%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Minimum rents</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">39.2</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">37.8</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">1.4</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">4</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Percentage rents</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.4</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.6</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.2</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">(33</font></td>
<td align="left"><font size="2" face="serif">)%</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Expense reimbursements</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">10.1</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">9.7</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.4</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">4</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other property income</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.7</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.5</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.2</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">40</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Management fee income</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">7.8</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3.1</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">4.7</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">152</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Interest income</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">2.5</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.9</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1.6</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">178</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Other</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.2</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.2</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">(100</font></td>
<td align="left"><font size="2" face="serif">)%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total revenues</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">60.7</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">52.8</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">7.9</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">15</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>

  <td align="left"><font size="1" face="serif"> &nbsp;</font></td>
  <td align="right"><font size="1"> &nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr></table>
<p align="left"><font face="serif" size="2">The increase in minimum rents was attributable to additional rents following the purchase of Amboy Road shopping center in July 2005, re-tenanting activities as well as increased occupancy across the portfolio.</font></p>
<p align="left"><font face="serif" size="2">Real estate tax reimbursements increased $0.3 million, primarily as a result of general increases in real estate taxes as well as re-tenanting activities throughout the portfolio.  CAM expense reimbursements increased $0.1 million as a result of increased tenant reimbursements of higher snow removal costs in 2005.  </font></p>
<p align="left"><font face="serif" size="2">Management fee income increased as a result of additional leasing fees from Fund I in 2005, asset management fees from Fund II, which was formed in June 2004, and an increase in management fees related to the acquisition of certain management contract rights in January 2004 and February 2005.</font></p>
<p align="left"><font face="serif" size="2">The increase in interest income was a combination of additional interest income on our advances and notes receivable originated in 2004 and 2005 and additional interest income earned following our preferred equity investment in Levitz in 2005.&nbsp;</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><div align="center"><font size="1">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1">&nbsp;</font></div></td>
<td colspan="6" align="center"><div align="center"><font size="1" face="serif"><b>Change</b></font></div></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><div align="center"><font size="1">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1">&nbsp;</font></div></td>
<td colspan="5" align="left"><div align="center">
  <hr size="1" noshade></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><div align="center"><font size="1">&nbsp;</font></div></td>
<td colspan="2" align="right"><div align="center"><font size="1" face="serif"><b>2005</b></font></div></td>
<td align="left"><div align="center"><font size="1">&nbsp;</font></div></td>
<td colspan="2" align="right"><div align="center"><font size="1" face="serif"><b>2004</b></font></div></td>
<td align="left"><div align="center"><font size="1">&nbsp;</font></div></td>
<td colspan="2" align="center"><div align="center"><font size="1" face="serif"><b>$</b></font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td colspan="3" align="center"><div align="center"><font size="1" face="serif"><b>%</b>&nbsp;</font></div></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><div align="center"><font size="1">&nbsp;</font></div></td>
<td colspan="2" align="left"><div align="center"><hr size="1" noshade>
</div></td>
<td align="left"><div align="center"><font size="1">&nbsp;</font></div></td>
<td colspan="2" align="left"><div align="center"><hr size="1" noshade>
</div></td>
<td align="left"><div align="center"><font size="1">&nbsp;</font></div></td>
<td colspan="5" align="left"><div align="center"><hr size="1" noshade>
</div>
</td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Operating Expenses:</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="1%" align="left"><div align="center"><font size="2" face="serif">&nbsp;</font></div></td>
<td width="8%" align="left"><div align="center"><font size="2" face="serif">&nbsp;</font></div></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><div align="center"><font size="2" face="serif">&nbsp;</font></div></td>
<td width="8%" align="left"><div align="center"><font size="2" face="serif">&nbsp;</font></div></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><div align="center"><font size="2" face="serif">&nbsp;</font></div></td>
<td width="8%" align="left"><div align="center"><font size="2" face="serif">&nbsp;</font></div></td>
<td width="2%" align="left"><div align="center"><font size="2" face="serif">&nbsp;</font></div></td>
<td width="1%" align="right">&nbsp;</td>
<td width="8%" align="left"><div align="center"><font size="2" face="serif">&nbsp;</font></div></td>
<td width="1%" align="left"><div align="center"><font size="2" face="serif">&nbsp;</font></div></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Property operating</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">10.2</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">11.1</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(0.9</font></td>
<td align="left"><font size="2" face="serif">)&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(8</font></td>
<td align="left"><font size="2" face="serif">)%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">6.8</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">6.4</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.4</font></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">6</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">General and administrative</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">10.3</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">7.6</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">2.7</font></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">36</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Depreciation and amortization</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">12.3</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">11.4</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.9</font></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">8</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total operating expenses</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">39.6</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">36.5</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">3.1</font></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">8</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>

  <td align="left"><font size="1" face="serif"> &nbsp;</font></td>
  <td align="right"><font size="1"> &nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="left"><hr size="2" noshade>
  </td>
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr></table>
<p align="left"><font face="serif" size="2">The decrease in property operating expenses was primarily a result of the recovery of $0.5 million in 2005 related to the settlement of our insurance claim in connection with the flood damage incurred at Mark Plaza.  A non-recurring charge of approximately $0.7 million related to this flood damage was recorded in 2004.  This decrease was partially offset by higher snow removal costs during 2005. </font></p>
<p align="left"><font face="serif" size="2">Real estate taxes increased as a result of general increases in real estate taxes experienced across the portfolio.</font></p>
<p align="left"><font face="serif" size="2">The increase in general and administrative expense was attributable to increased compensation expense and other overhead expenses following the expansion of our infrastructure related to increased investment activity in Fund assets and asset management services.</font></p>
<p align="left"><font face="serif" size="2">Depreciation expense increased $0.3 million in 2005.&nbsp; This was principally a result of increased depreciation expense related to capitalized tenant installation costs in 2004 and 2005.  Amortization expense increased $0.6 which was primarily attributable to the write off of certain Klaff management contracts following the disposition of these assets. </font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><div align="center"><font size="1">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td colspan="5" align="center"><div align="center"><font size="1" face="serif"><b>Change</b></font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><div align="center"><font size="1">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td colspan="5" align="left"><div align="center"><hr size="1" noshade></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right"><div align="center"><font size="1">&nbsp;</font></div></td>
<td colspan="2" align="right"><div align="center"><font size="1" face="serif"><b>2005</b></font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td colspan="2" align="right"><div align="center"><font size="1" face="serif"><b>2004</b></font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td colspan="2" align="center"><div align="center"><font size="1" face="serif"><b>$</b></font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td colspan="2" align="center"><div align="center"><font size="1" face="serif"><b>%</b></font></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif"> &nbsp;</font></td>
<td align="right"><div align="center"><font size="1"> &nbsp;</font></div></td>
<td colspan="2" align="left"><div align="center">
  <hr size="1" noshade></div></td>
<td align="left"><div align="center"><font size="1" face="serif"> &nbsp;</font></div></td>
<td colspan="2" align="left"><div align="center">
  <hr size="1" noshade></div></td>
<td align="left"><div align="center"><font size="1" face="serif"> &nbsp;</font></div></td>
<td colspan="5" align="left"><div align="center">
  <hr size="1" noshade></div></td>
<td align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Other:</font></td>
<td width="2%" align="right"><div align="center"><font size="1">&nbsp;</font></div></td>
<td width="1%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td width="8%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td width="2%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td width="1%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td width="8%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td width="2%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td width="1%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td width="8%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td width="2%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td width="1%" align="right"><div align="center"><font size="1">&nbsp;</font></div></td>
<td width="8%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
<td width="1%" align="left"><div align="center"><font size="1" face="serif">&nbsp;</font></div></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Equity in earnings of unconsolidated
    partnerships</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">5.8</font></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">1.5</font></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">4.3</font></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">287</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Interest expense</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(8.1</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(7.5</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.6</font></td>
<td align="left"><font size="2" face="serif">)&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(8</font></td>
<td align="left"><font size="2" face="serif">)%</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Gain on sale</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.9</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.9</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(100</font></td>
<td align="left"><font size="2" face="serif">)%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Minority interest</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.5</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(1.0</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">0.5</font></td>
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">50</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Income taxes</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(1.6</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(1.6</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(100</font></td>
<td align="left"><font size="2" face="serif">)%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Loss from discontinued operations</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.7</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.6</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(0.1</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(17</font></td>
<td align="left"><font size="2" face="serif">)%</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">20</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
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<p align="left"><font face="serif" size="2">Equity in earnings of unconsolidated partnerships increased as a result of our share of gain, through its investments funds, from the sale of certain Mervyn&#8217;s locations and the Company&#8217;s share of bankruptcy proceeds received from Penn Traffic through Fund I.</font></p>
<p align="left"><font face="serif" size="2">The increase in interest expense was attributable to higher average interest rates on the portfolio mortgage debt in 2005 of $0.8 million offset by a $0.2 million decrease resulting from lower average outstanding borrowings in 2005.</font></p>
<p align="left"><font face="serif" size="2">The gain on sale of land in 2004 was related to a prior year sale of a contract to purchase land to the Target Corporation.  We received additional sales proceeds of $0.9 million which were being held in escrow pending the completion of certain site work by the buyer.  Of these proceeds, $0.5 million were distributed to our joint venture partner in the sale and are a component of minority interest in the accompanying financial statements.</font></p>
<p align="left"><font face="serif" size="2">Income taxes in 2005 relate to our share of the income taxes on the gain, through its investment funds, from the sale of certain Mervyn&#8217;s locations during the quarter.</font></p>
<p align="left"><font face="serif" size="2">Loss from discontinued operations represents activity related to properties sold during 2004 and 2005. Included in 2005 is an impairment charge of $0.8 million related to the Berlin Shopping Center which was sold in July 2005. </font></p>
<p align="left"><b><font face="serif" size="2">Funds from Operations</font></b></p>
<p align="left"><font face="serif" size="2">We consider funds from operations (&#8220;FFO&#8221;) as defined by the National Association of Real Estate Investment Trusts (&#8220;NAREIT&#8221;) 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 our performance. 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, our 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 our performance or to cash flows as a measure of liquidity.</font></p>
<p align="left"><font face="serif" size="2">Consistent with the NAREIT definition, we define 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, 2005 and 2004 is as follows (amounts in thousands):</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="4" align="center"><font size="1" face="serif"><b>Three months ended</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="5" align="center"><font size="1" face="serif"><b>Nine months ended</b></font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="4" align="center"><font size="1" face="serif"><b>September 30,</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="5" align="center"><font size="1" face="serif"><b>September 30,</b></font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>2005</b></font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>2004</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>2005</b></font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>2004</b></font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td><font size="1">&nbsp;</font></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr noshade size="1"></td>
<td><hr noshade size="1"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Net income </font></td>
<td align="left" width="2%">&nbsp;</td>
<td width="1%" align="right"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">7,225</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif"> $</font></td>
<td width="8%" align="right"><font size="2" face="serif">2,895</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif"> $</font></td>
<td width="8%" align="right"><font size="2" face="serif">16,015</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif"> $</font></td>
<td width="8%" align="right"><font size="2" face="serif">9,509</font></td>
<td width="2%" align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Depreciation of real estate and
    amortization of leasing costs:</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp; Wholly-owned and consolidated
    partnerships</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,497</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">3,588</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">10,514</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">10,672</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp; Unconsolidated
    partnerships </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,115</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">586</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">2,343</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">1,707</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"> Income attributable to Minority
    interest in Operating Partnership (1) </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">149</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">57</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">336</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">244</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Gain on sale of properties, net
    of income taxes</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">(2,113</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">(2,113</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td><font size="1">&nbsp;</font></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="1" noshade></td>
<td><hr noshade size="1"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="1" noshade></td>
<td><hr noshade size="1"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="1" noshade></td>
<td><hr noshade size="1"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="1" noshade></td>
<td><hr noshade size="1"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
</tr> <tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Funds from operations </font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">9,873</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">7,126</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">27,095</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">22,132</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td><font size="1">&nbsp;</font></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="2" noshade></td>
<td><hr noshade size="2"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="2" noshade></td>
<td><hr noshade size="2"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="2" noshade></td>
<td><hr noshade size="2"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="2" noshade></td>
<td><hr noshade size="2"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
</tr> <tr valign="top">
<td align="left"><font size="2" face="serif">Cash flows provided by (used in): </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Operating activities </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">16,975</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">17,910</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr> <tr valign="top">
<td><font size="1">&nbsp;</font></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%">&nbsp;</td>
<td>&nbsp;</td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%">&nbsp;</td>
<td>&nbsp;</td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="2" noshade></td>
<td><hr noshade size="2"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="2" noshade></td>
<td><hr noshade size="2"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Investing activities </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(58,344</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(45,431</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr> <tr valign="top">
<td><font size="1">&nbsp;</font></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%">&nbsp;</td>
<td>&nbsp;</td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%">&nbsp;</td>
<td>&nbsp;</td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="2" noshade></td>
<td><hr noshade size="2"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="2" noshade></td>
<td><hr noshade size="2"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Financing activities </font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">36,027</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">26,282</font></td>
<td align="left"></td>
</tr> <tr valign="top">
<td><font size="1">&nbsp;</font></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%">&nbsp;</td>
<td>&nbsp;</td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%">&nbsp;</td>
<td>&nbsp;</td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="2" noshade></td>
<td><hr noshade size="2"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
<td width="1%"><hr size="2" noshade></td>
<td><hr noshade size="2"></td>
<td width="2%"><font size="1">&nbsp;</font></td>
</tr>
</table>
<br>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td colspan="2" align="left"><hr align="left" width="150" size="1" noshade></td>
</tr>
<tr valign="top">
<td colspan="2" align="left"><font size="1" face="serif">Notes:</font><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td width="3%" align="left"><font size="1" face="serif">(1)</font></td>
<td align="left"><font size="1" face="serif">Does not include distributions paid
    to Series A and B Preferred OP unitholders.</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">21</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="left"><b><font face="serif" size="2">LIQUIDITY AND CAPITAL RESOURCES</font></b></p>
<p align="left"><b><font face="serif" size="2">USES OF LIQUIDITY</font></b></p>
<p align="left"><font face="serif" size="2">Our principal uses of liquidity are expected to be for distributions to our shareholders and OP unitholders, debt service and loan repayments, and property investment which include the funding of our joint venture commitments, acquisition, redevelopment, expansion and re-tenanting activities.</font></p>
<p align="left"><b><font face="serif" size="2">Distributions</font></b></p>
<p align="left"><font face="serif" size="2">In order to qualify as a REIT for Federal income tax purposes, we must currently distribute at least 90% of our taxable income to our shareholders. During September 2005, our Board of Trustees approved and declared a quarterly cash dividend of $0.1725 per Common Share and Common OP Unit for the second quarter of 2005 which was paid July 15, 2005. Preferred Series A and B OP Unit holders also received this quarterly distribution based on the number of Common OP Units they would receive in a hypothetical conversion of their Preferred OP Units.</font></p>
<p align="left"><b><font face="serif" size="2">Acadia Strategic Opportunity Fund, LP (&#8220;Fund I&#8221;)</font></b></p>
<p align="left"><font face="serif" size="2">In September 2001, we committed $20.0 million to a newly formed joint venture with four of our 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. As of September 30, 2005, we have contributed $19.2 million to Fund I.</font></p>
<p align="left"><font face="serif" size="2">We are the manager and general partner of Fund I with a 22% interest. In addition to a pro-rata return on our invested equity, we are entitled to a profit participation based upon certain investment return thresholds. Cash flow is to be distributed pro-rata to the partners (including us) until they have received a 9% cumulative return on, and a return of all capital contributions. Thereafter, remaining cash flow is to be distributed 80% to the partners (including us) and 20% to us. We also earn 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>
<p align="left"><font face="serif" size="2">As of September 30, 2005, Fund I has purchased a total of 35 properties totaling 2.7 million square feet. The following table summarizes Fund I&#8217;s acquisitions through this date:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="bottom">
<td align="left"><font size="1" face="serif"><b>Shopping Center</b></font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>Notes</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>Location</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>Year acquired</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>GLA</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Purchase price</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1" face="serif"><b>Estimated future</b></font><font size="1"><br><font face="serif"><b>redevelopment</b></font><br>
<font face="serif"><b>costs</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="bottom">
<td align="left"><hr size="1" noshade>
</td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="bottom">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="5" align="center"><font size="1" face="serif"><b>(millions)</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b><u>New York Region</u></b></font></td>
<td width="1%" align="right">&nbsp;</td>
<td width="5%" align="center"></td>
<td width="2%" align="left">&nbsp;</td>
<td width="12%" align="center"></td>
<td width="2%" align="left">&nbsp;</td>
<td width="5%" align="center"></td>
<td width="2%" align="left">&nbsp;</td>
<td width="8%" align="right"></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"></td>
<td width="5%" align="right"></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="8%" align="right"></td>
<td width="2%" align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><i><u>New York</u></i></font></td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Tarrytown Shopping Center</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">Westchester</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2004</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">35,877</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">5.3</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif"> &#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>Mid-Atlantic Region</b></font></td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><i><u>Delawar</u>e</i></font></td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Brandywine Town Center</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">Wilmington</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2003</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">629,345</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">86.3</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Market Square&nbsp; Shopping Center</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">Wilmington</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2003</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">102,762</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><i><u>South Carolina</u></i></font></td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Hitchcock Plaza</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">3</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">Aiken</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2004</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">234,338</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5.5</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">$8.7</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Pine Log Plaza</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">4</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">Aiken</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2004</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">35,064</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">1.5</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><i><u>Virginia</u></i></font></td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Haygood Shopping Center</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">5</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">Virginia Beach</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2004</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">158,229</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5.4</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">$3.4</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>Midwest Region</b></font></td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><i><u>Ohio</u></i></font></td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Amherst Marketplace</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">6</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">Cleveland</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2002</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">79,937</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">26.7</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Granville Centre</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">6</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">Columbus</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2002</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">131,543</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Sheffield Crossing</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">6</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">Cleveland</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2002</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">112,534</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><i><u>Michigan</u></i></font></td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Sterling Heights Shopping Center</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">7</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">Detroit</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2004</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">154,597</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">3.3</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">$1.2</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif"><b>Various Regions</b></font></td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Kroger/Safeway Portfolio</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">8</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">Various</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2003</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,018,100</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">48.9</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade>
</td>
<td align="left">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total</font></td>
<td align="right">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,692,326</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">182.9</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">$13.3</font></td>
<td align="left">&nbsp;</td>
</tr> <tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade>
</td>
<td align="left">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left">
  <hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
</table>
<p align="center"><font face="serif" size="2">22</font></p>
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<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td colspan="3" align="left"><hr align="left" width="150" size="1" noshade></td>
  </tr>
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<td colspan="3" align="left"><font size="1" face="serif">Notes:</font></td>
</tr>
<tr valign="top">
<td width="3%" align="left"><font size="1" face="serif">1)</font></td>
<td width="2%" align="left"><font size="1">&nbsp;</font></td>
<td width="91%" align="left"><font size="1" face="serif">Fund I and an unaffiliated partner,
    each with a 50% interest, acquired this center. Related to this acquisition,
    we loaned $2.0 million to Fund I which bears interest at the prime rate and
    continues until the property is stabilized.</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">2)</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">This represents the combined purchase
    price for Brandywine Towne Center and Market Square Shopping Center. Fund
    I assumed $38.1 million of fixed rate debt on the two properties as well
    as obtained a new $30.0 million fixed-rate loan in conjunction with the acquisition.
    Brandywine Town Center is a two phase open-air value retail center. The first
    phase is approximately 450,000 square feet and 100% occupied. The second
    phase (&#8220;Phase II&#8221;) consists of approximately 450,000 square feet
    of existing space, of which approximately 350,000 square feet is occupied.
    The balance of Phase II is currently not occupied. Fund I will also pay additional
    amounts in conjunction with the lease-up of the current vacant space in Phase
    II (the &#8220;Earn-out&#8221;). To date, Fund I has incurred costs of $30.3
    million for Earn-out space. The additional investment for Earn-out space
    is projected to be between $15.0 million and $20.0 million. To the extent
    Fund I places additional mortgage debt upon the lease-up of Phase II, the
    required equity contribution for the Earn-out would be less. The Earn-out
    is structured such that Fund I has no time requirement or payment obligation
    for any portion of currently vacant space which it is unable to lease.</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">3)</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Fund I provided 90% of the equity
    capital and Hendon Properties (&#8220;Hendon&#8221;), an unaffiliated partner,
    provided the remaining 10% of the equity capital used to acquire the former
    loan on this property. Subsequent to the acquisition of the loan, Fund I
    and Hendon obtained fee title to this property. Hendon is entitled to receive
    profit participation in excess of its proportionate equity interest. We loaned
    $3.2 million to the property owning entity in connection with the purchase
    of the loan. Our note matures March 9, 2006, and bears interest at 7% for
    the first year and 6% for the second year.</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">4)</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">This property, which is situated
    adjacent to the Hitchcock Plaza, was also purchased in conjunction with Hendon.
    Related to this transaction, we 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></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">5)</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Fund I acquired a 50% interest in
    the Haygood Shopping Center for $2.2 million cash and the assumption of $3.2
    million in variable-rate mortgage debt.</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">6)</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">This represents the combined purchase
    price for Amherst Marketplace, Granville Centre and Sheffield Crossing. Fund
    I paid $14.1 million in cash and assumed $12.6 million of fixed-rate debt
    on two of the properties at a blended rate of 8.1%.</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">7)</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Fund I acquired a 50% interest in
    the Sterling Heights Shopping Center for $1.0 million cash and the assumption
    of $2.3 million in variable-rate mortgage debt.</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">8)</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Fund I and AmCap Incorporated (&#8220;AmCap&#8221;),
    an unaffiliated partner, acquired this portfolio for $14.4 million in cash
    and the assumption of an aggregate of $34.5 million of existing fixed-rate
    mortgage debt at a blended rate of 6.57%. The portfolio, which aggregates
    approximately 1.0 million square feet, consists of 25 anchor-only leases
    with Kroger (12 leases) and Safeway supermarkets (13 leases).</font></td>
</tr>
</table>
<p align="left"><b><font face="serif" size="2">Acadia Strategic Opportunity Fund II, LLC (&#8220;Fund II&#8221;)</font></b></p>
<p align="left"><font face="serif" size="2">On June 15, 2004, we closed our second acquisition fund, Fund II, which includes all of the investors from Fund I as well as two additional 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. We are 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 through June 15, 2005 and then on the total committed equity of $300 million thereafter. As of September 30, 2005, we have contributed $13.4 million to Fund
II.</font></p>
<p align="left"><font face="serif" size="2">To date, Fund II has invested in the RCP Venture and the New York Urban/Infill Redevelopment initiative as discussed below.</font></p>
<p align="left"><u><font face="serif" size="2">New York Urban/Infill Redevelopment Initiative</font></u></p>
<p align="left"><font face="serif" size="2">During 2004, Fund II, together with an unaffiliated partner, P/A Associates, LLC (&#8220;P/A&#8221;), formed Acadia-P/A Holding Company, LLC (&#8220;Acadia-P/A&#8221;) for the purpose of acquiring, constructing, developing, owning, operating, leasing and managing certain retail real estate properties in the New York City metropolitan area.&nbsp; P/A has agreed to invest 10% of required capital up to a maximum of $2.0 million and Fund II, the managing member, has agreed to invest the balance to acquire assets in which Acadia P/A agrees to invest.</font></p>
<p align="left"><font face="serif" size="2">Operating cash flow is generally to be distributed pro-rata to Fund II and P/A until they have received a 10% cumulative return and then 60% to Fund II and 40% to P/A. Distributions of net refinancing and net sales proceeds, as defined, follow the distribution of operating cash flow except that unpaid original capital is returned before the 60%/40% split between Fund II and P/A. Upon the liquidation of the last property investment of&nbsp;Acadia-P/A, to the extent that Fund II has not received an 18% internal rate of return (&#8220;IRR&#8221;) on all of its capital contributions, P/A is obligated to return a portion of its previous distributions, as defined, until Fund II has received an 18% IRR.</font></p>
<p align="center"><font face="serif" size="2">23</font></p>
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<p align="left"><u><font face="serif" size="2">2005 New York Urban/Infill Redevelopment Investments</font></u></p>
<p align="left"><u><font face="serif" size="2">161<sup>st</sup> Street </font></u><font face="serif" size="2">-
    On August 5<sup>th</sup> 2005, Acadia-P/A purchased 244-268 161<sup>st</sup> Street
    located in the Bronx for $49.3 million, inclusive of closing costs. In connection
    with the transaction, Acadia-P/A assumed a first mortgage loan with Bank
    of America for $12.1 million. The loan carries variable-rate interest at
    LIBOR plus 1.5% with monthly payments of interest only. The loan matures
    December 31, 2005. The ultimate redevelopment plan for the property, a 100%
    occupied, 10-story office building, is to reconfigure the property so that
    approximately 50% of the income from the building will eventually be derived
    from retail tenants.</font></p>
<p align="left"><u><font face="serif" size="2">4650 Broadway</font></u><font face="serif" size="2"> -
    On April 6, 2005, Acadia-P/A acquired 4650 Broadway located in the Washington
    Heights/Inwood section of Manhattan. The property, a 140,000 square foot
    building, which is currently occupied by the City of New York and a commercial
    parking garage, was acquired for a purchase price of $25 million. We plan
    to redevelop the site to include retail, commercial and residential components
    totaling over 300,000 square feet. The retail and commercial (including office, &#8216;Community
    Use&#8217; and parking) portion comprise approximately 50% of the project
    and the residential component comprises the other 50%. Redevelopment of the
    project is anticipated to commence in the next 12 to 24 months with completion
    expected 18 months thereafter. Expected costs to complete the retail and
    commercial component of the project are estimated at $40 million before any
    potential sale of the residential air rights. In lieu of directly developing
    the mid-rise residential portion of the project, the rights to this component
    may be sold while retaining ownership of the other portions of the project.</font></p>
<p align="left"><font face="serif" size="2">On February 25, 2005, Acadia-P/A acquired land adjacent to the 400 East Fordham Road property for $0.9 million (See &#8220;2004 New York Urban/Infill Redevelopment Acquisitions &#150; 400 East Fordham Road&#8221; below).</font></p>
<p align="left"><u><font face="serif" size="2">2004 New York Urban/Infill Redevelopment Investments</font></u></p>
<p align="left"><u><font face="serif" size="2">400 East Fordham Road</font></u><font face="serif" size="2"> -
    Acadia-P/A acquired this property located in the Bronx, NY for $30.2 million.
    Sears is the major tenant of the property, retailing on four levels. Currently,
    there are also medical office tenants on the top two floors above Sears.
    The redevelopment of the property is scheduled to commence in 2007 following
    the expiration of the Sears lease, which was originally signed in 1964. However,
    depending on current negotiations with both Sears and other potential anchors,
    the timeframe of the redevelopment may be accelerated. 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, is estimated to be between $65 and $70 million, depending on the ultimate
    scope of the project.</font></p>
<p align="left"><u><font face="serif" size="2">Pelham Manor </font></u><font face="serif" size="2">-
    Acadia-P/A entered into a 95-year ground lease to redevelop this 16-acre
    site located in Westchester County, New York. The redevelopment contemplates
    the demolition of the existing industrial and warehouse buildings, and replacing
    them with 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 an industrial and warehouse facility. Prior to commencement
    of the redevelopment process, the ground rent payment is projected to equal
    the warehouse rents collected.</font></p>
<p align="left"><u><font face="serif" size="2">RCP Venture with Klaff Realty, L.P. (&#8220;Klaff&#8221;)</font></u></p>
<p align="left"><font face="serif" size="2">During 2004, we entered into the Retailer Controlled Property Venture (the &#8220;RCP Venture&#8221;) with Klaff and Klaff&#8217;s long time capital partner Lubert-Adler Management, Inc. (&#8220;Lubert-Adler&#8221;) 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. We and our current acquisition funds, Funds I and II, anticipate investing 20% of the equity of the RCP Venture. 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 (&#8220;Klaff&#8217;s Promote&#8221;) and 80% to the partners (including Klaff). We also anticipate earning market-rate fees for property management, leasing and construction services on behalf of the RCP Venture.</font></p>
<p align="left"><font face="serif" size="2">In September 2004, we made our first RCP Venture investment with our participation in the acquisition of Mervyn&#8217;s.&nbsp; 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&#8217;s through the RCP Venture, which, as part of an investment consortium of Sun Capital and Cerberus, acquired Mervyn&#8217;s from Target Corporation. The total acquisition price was approximately $1.2 billion subject to debt of approximately $800.0 million. Affiliates of Funds I and II invested equity aggregating $23.5 million on a non-recourse basis which was divided equally between them, of which $4.9 million was our share of the equity investment.
Mervyn&#8217;s is a 257-store discount retailer with a very strong West Coast concentration.</font></p>
<p align="left"><font face="serif" size="2">In July 2005, Fund II acquired for $1.0 million, a 50% equity interest from its partner in the RCP Venture in the entity which has a leasehold interest in a former Levitz Furniture store located in Rockville, Maryland.</font></p>
<p align="left"><b><font face="serif" size="2">Other Investments</font></b></p>
<p align="left"><font face="serif" size="2">In March of 2005, we invested $20 million in a preferred equity position (&#8220;Preferred Equity&#8221;) with Levitz SL, L.L.C. (&#8220;Levitz SL&#8221;), the owner of 2.5 million square feet of fee and leasehold interests in 30 locations (the &#8220;Properties&#8221;), the majority of which are currently leased to Levitz Furniture Stores. Klaff is a managing member of Levitz SL. The Preferred Equity receives a return of 10%, plus a minimum return of capital of $2 million per annum. At the end of 12 months, the rate of return will be reset to the six-month LIBOR plus 644 basis points. The Preferred Equity is redeemable at the option of Levitz SL at any time, although if redeemed during the first 12 months, the redemption price is equal to the
outstanding amount of the Preferred Equity, plus the return calculated for the remainder of the 12-month period.</font></p>
<p align="left"><font face="serif" size="2">During July of 2005, we purchased 4343 Amboy Road (&#8220;Amboy Road&#8221;) located on Staten Island, New York for $16.6 million in cash and $0.2 million in Common OP Units. The property, a 60,000 square foot neighborhood shopping center, is anchored by a Waldbaum&#8217;s supermarket and a Duane Reade drug store.  The property is subject to a 23-year ground lease. </font></p>
<p align="center"><font face="serif" size="2">24</font></p>
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<p align="left"><font face="serif" size="2">In January 2004, we acquired 75% of Klaff&#8217;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 &#8220;Klaff Properties&#8221;) as well the rights to 75% of certain future revenue streams. The acquisition includes only Klaff&#8217;s rights associated with operating the Klaff Properties and does not include equity interests in assets owned by Klaff or Lubert-Adler. The Operating Partnership issued $4 million of Series B Preferred OP Units to Klaff in consideration of this acquisition.</font></p>
<p align="left"><font face="serif" size="2">Effective February 15, 2005, we acquired the balance of Klaff&#8217;s rights to provide the above services and certain potential future revenue streams. The consideration for this acquisition was $4 million in the form of 250,000 restricted Common OP Units, valued at $16 per unit, which are convertible into our Common Shares on a one-for-one basis after a five year lock-up period. As part of this transaction we also assumed all operational and redevelopment responsibility for the Klaff Properties a year earlier than was contemplated in the January 2004 transaction.</font></p>
<p align="left"><b><font face="serif" size="2">Share Repurchase</font></b></p>
<p align="left"><font face="serif" size="2">The repurchase of our Common Shares has historically been an additional use of liquidity. We have an existing share repurchase program that authorizes management, at its discretion, to repurchase up to $20.0 million of our outstanding Common Shares. Through November 9, 2005, we had repurchased 2.1 million Common Shares at a total cost of $11.7 million of which 1.5 million of these Common Shares have been subsequently reissued.&nbsp; The program may be discontinued or extended at any time and there is no assurance that we will purchase the full amount authorized. There were no Common Shares repurchased by us during the quarter ended September 30, 2005.</font></p>
<p align="left"><b><font face="serif" size="2">SOURCES OF LIQUIDITY</font></b></p>
<p align="left"><font face="serif" size="2">We intend on using Fund II as the primary vehicle for our future acquisitions, including investments in the RCP Venture and New York Urban/Infill Redevelopment initiative. Sources of capital for funding our 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 issuance of public equity or debt instruments, cash on hand, additional debt financings and future sales of existing properties. As of September 30, 2005, we had a total of approximately $54.0 million of additional capacity under existing debt facilities, cash and cash equivalents on hand of $8.2 million, and 9 properties that are unencumbered and available
as potential collateral for future borrowings. We anticipate that cash flow from operating activities will continue to provide adequate capital for all of our debt service payments, recurring capital expenditures and REIT distribution requirements.</font></p>
<p align="left"><b><font face="serif" size="2">Financing and Debt</font></b></p>
<p align="left"><font face="serif" size="2">At September 30, 2005, mortgage notes payable aggregated $206.8 million and were collateralized by 20 properties and related tenant leases. Interest rates on our outstanding mortgage indebtedness ranged from 5.0% to 7.6% with maturities that ranged from July 2007 to September 2015. Taking into consideration $92.9 million of notional principal under variable to fixed-rate swap agreements currently in effect, $170.3 million of the portfolio, or 82%, was fixed at a 5.8% weighted average interest rate and $36.5 million, or 18% was floating at a 5.4% weighted average interest rate. There is no debt maturing in 2005 and 2006. In 2007, $17.5 million is scheduled to mature at a weighted average interest rate of 5.9%. As we do not anticipate having
sufficient cash on hand to repay such indebtedness, we will need to refinance this indebtedness or select other alternatives based on market conditions at that time.</font></p>
<p align="left"><font face="serif" size="2">On August 31, 2005, we closed on a $17.6 million loan, which bears interest at a fixed rate of 4.98%.  This loan, which matures September 2015, requires the payment of  interest only until October 2010, and thereafter interest and principal based on 30 year amortization. The proceeds from this loan were in part used to pay down $15.0 million on an existing line.</font></p>
<p align="left"><font face="serif" size="2">On May 26, 2005, we closed on a $65.0 million cross-collateralized revolving facility which is collateralized by five of our properties. The facility bears interest at LIBOR plus 130 basis points and matures June 1, 2010. At closing, the lender advanced $12.0 million, of which $7.4 million was used to refinance an existing facility with the same lender. As of September 30, 2005, an additional $20.0 million was drawn on this line resulting in $32.0 million outstanding under this facility.</font></p>
<p align="left"><font face="serif" size="2">During April 2005, we borrowed $7.4 million under an existing revolving facility which was repaid in May 2005 as discussed above.</font></p>
<p align="center"><font face="serif" size="2">25</font></p>
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<p align="left"><font face="serif" size="2">The following table summarizes our mortgage indebtedness as of September 30, 2005 and December 31, 2004 (amounts in thousands):</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="bottom">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>September 30,</b></font><font size="1"><br><font face="serif"><b>2005</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>December 31,</b></font><font size="1"><br><font face="serif"><b>2004</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Interest Rate</b></font><font size="1"><br><font face="serif"><b>at
    September 30, 2005</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Maturity</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Properties</b></font><font size="1"><br><font face="serif"><b>Encumbered</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Payment</b></font><font size="1"><br><font face="serif"><b>Terms</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
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<td align="left"><font size="2" face="serif">Mortgage notes payable &#150; variable-rate</font></td>
<td align="left" width="2%">&nbsp;</td>
<td width="1%" align="left"></td>
<td width="8%" align="right"></td>
<td width="-1%" align="left"></td>
<td width="1%" align="left"></td>
<td width="8%" align="right"></td>
<td width="-1%" align="left"></td>
<td width="1%" align="left"></td>
<td width="14%" align="right"></td>
<td width="0%" align="left"></td>
<td width="1%" align="left"></td>
<td width="8%" align="right"></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"></td>
<td width="8%" align="right"></td>
<td width="-1%" align="left"></td>
<td width="1%" align="left"></td>
<td width="8%" align="right"></td>
<td width="-2%" align="left"></td>
</tr>
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<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Washington Mutual Bank, FA</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5,000</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5.47% (LIBOR + 1.50%)</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">11/22/07</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(1</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(12</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Bank of America/Bank of China</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">32,000</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5.27% (LIBOR + 1.30%)</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">06/01/10</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(2</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(12</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Bank of America</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">8,380</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">8,473</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5.37% (LIBOR + 1.40%)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">12/01/08</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(3</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(15</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Washington Mutual Bank, FA</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">29,323</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">29,900</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5.47% (LIBOR + 1.50%)</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">04/01/11</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(4</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(15</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Bank of America</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">44,485</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">44,485</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5.37% (LIBOR + 1.40%)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">06/29/12</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(5</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(13</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Bank of America</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">10,134</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">10,252</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5.37% (LIBOR + 1.40%)</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">06/29/12</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(6</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(15</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Interest rate swaps</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(92,854</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(86,156</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total variable-rate debt</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">36,468</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">6,954</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Mortgage notes payable &#150; fixed-rate</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Sun America Life Insurance Company</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">12,999</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">13,189</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">6.46</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">%</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">07/01/07</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(7</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(15</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Bank of America, N.A.</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">15,928</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">16,062</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">7.55</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">01/01/11</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(8</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(15</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">RBS Greenwich Capital</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">15,949</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">16,000</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5.19</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">%</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">06/01/13</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(9</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(15</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">RBS Greenwich Capital</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">15,000</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">15,000</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5.64</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">09/06/14</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(10</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">(14</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">RBS Greenwich Capital</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">17,600</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4.98</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">%</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">09/06/15</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(11</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">&nbsp;</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">(16</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Interest rate swaps</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">92,854</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">86,156</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5.76</font></td>
<td align="left"><font size="2" face="serif"> %&nbsp;</font></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">Various&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total fixed-rate debt</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">170,330</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">146,407</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">206,798</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">153,361</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"></td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
</tr>
</table>
<br>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
<tr valign="top">
  <td colspan="3" align="left"><hr align="left" width="150" size="1" noshade>
</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td colspan="3" align="left"><font size="1" face="serif">Notes:</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td width="3%" align="left"><font size="1" face="serif">(1)</font></td>
<td width="2%" align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Elmwood Park Shopping Center;</font></td>
<td width="2%" align="left"><font size="1">&nbsp;</font></td>
<td width="3%" align="right"><font size="1" face="serif">(6)</font></td>
<td width="2%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td width="44%" align="left"><font size="1" face="serif">Smithtown Shopping Center;
    there is additional capacity of $970 on this facility</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">$5,000 is outstanding under this
    $20,000 revolving facility</font></td>
<td align="left"><font size="1"> &nbsp;</font></td>
<td align="right"><font size="1" face="serif">(7)</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Merrillville Plaza</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(2)</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Bloomfield Town Square</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1" face="serif">(8)</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">GHT Apartments / Colony Apartments</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Walnut Hill Plaza</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1" face="serif">(9)</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">239 Greenwich Avenue</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Hobson West Plaza</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1" face="serif">(10)</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">New Loudon Center</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Marketplace of Absecon</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1" face="serif">(11)</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Crescent Plaza</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Village Apartments; There is an
    additional $33,000 available under this facility</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1" face="serif">(12)</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Interest only monthly</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(3)</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Soundview Marketplace; there is
    additional capacity of $5,000 on this facility</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1" face="serif">(13)</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Annual principal and monthly interest</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(4)</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Ledgewood Mall</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1" face="serif">(14)</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Interest only monthly until 9/06;
    monthly principal and interest thereafter</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Bradford Towne Center</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1" face="serif">(15)</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Monthly principal and interest</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(5)</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Branch Shopping Center</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1" face="serif">(16)</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Interest only monthly until 10/10;
    monthly principal and interest thereafter</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Abington Towne Centre</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Methuen Shopping Center</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Gateway Shopping Center</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">Town Line Plaza</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
</table>
<p align="left"><b><font face="serif" size="2">Asset Sales</font></b></p>
<p align="left"><font face="serif" size="2">During July 2005, we sold the Berlin Shopping Center for $4.0 million. The proceeds were reinvested into the acquisition of Amboy Road (see &#8220;Uses of Liquidity &#150; Other Investments&#8221;) </font></p>
<p align="left"><b><font face="serif" size="2">CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS</font></b></p>
<p align="left"><font face="serif" size="2">At September 30, 2005, maturities on our mortgage notes ranged from July 2007 to September 2015. In addition, we have non-cancelable ground leases at three of our shopping centers. We also lease space for our White Plains corporate office for a term expiring in 2010. The following table summarizes our debt maturities and obligations under non-cancelable operating leases of September 30, 2005:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="14" align="center"><font size="1" face="serif"><b>Payments due by
    period</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td colspan="14" align="center"><hr size="1" noshade>
</td>
  <td align="left">&nbsp;</td>
  </tr>
<tr valign="top">
<td align="center"><font size="1" face="serif"><b>(amounts in millions)</b></font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="14" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="bottom">
<td align="left"><font size="1" face="serif"><b>Contractual obligation</b></font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Total</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Less than</b></font><font size="1"><br><font face="serif"><b>1
    year</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>1 to 3</b></font><font size="1"><br><font face="serif"><b>years</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>3 to 5</b></font><font size="1"><br><font face="serif"><b>years</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>More than</b></font><font size="1"><br><font face="serif"><b>5
    years</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><hr size="1" noshade></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Future debt maturities</font></td>
<td width="2%" align="right" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">206.8</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.4</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">23.6</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">17.6</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">165.2</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Operating lease obligations</font></td>
<td align="right">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">22.3</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">0.3</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">2.3</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">2.5</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">17.2</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="right">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Total</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">229.1</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.7</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">25.9</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">20.1</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">182.4</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<p align="center"><font face="serif" size="2">26</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="left"><b><font face="serif" size="2">OFF BALANCE SHEET ARRANGEMENTS</font></b></p>
<p align="left"><font face="serif" size="2">We have investments in three joint ventures for the purpose of investing in operating properties as follows:</font></p>
<p align="left"><font face="serif" size="2">We own a 49% interest in two partnerships which own the Crossroads Shopping Center (&#8220;Crossroads&#8221;). We account for our investment in Crossroads using the equity method of accounting as we have a non-controlling investment in Crossroads, but exercise significant influence. As such, our financial statements reflect our share of income from, but not the assets and liabilities of, Crossroads. Our pro rata share of Crossroads mortgage debt as of September 30, 2005 was $31.4 million. This fixed-rate debt bears interest at 5.4% and matures in December 2014.</font></p>
<p align="left"><font face="serif" size="2">Reference is made to the discussion
    of Funds I and II under &#8220;Uses of Liquidity&#8221; in this Item 2 for
    additional detail related to our investment in and commitments to Funds I
    and II. We own a 22% interest in Fund I and 20% in Fund II for which we also
    use the equity method of accounting. Our pro rata share of Funds I and II
    fixed-rate mortgage debt as of September 30, 2005 was $24.5 million at a
    weighted average interest rate of 6.2%. Our pro rata share of Fund I and
    II variable-rate mortgage debt as of September 30, 2005 was $15.3 million
    at a weighted average interest rate of 4.8%. Maturities on these loans range
    from December 2005 to January 2023.</font></p>
<p align="left"><b><font face="serif" size="2">HISTORICAL CASH FLOW</font></b></p>
<p align="left"><font face="serif" size="2">The following discussion of historical cash flow compares our cash flow for the nine months ended September 30, 2005 (&#8220;2005&#8221;) with our cash flow for the nine months ended September 30, 2004 (&#8220;2004&#8221;).</font></p>
<p align="left"><font face="serif" size="2">Cash and cash equivalents were $8.2 million and $13.1 million at September 30, 2005 and 2004, respectively. The decrease of $4.9 million was a result of the following increases and decreases in cash flows:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="8" align="center"><font size="1" face="serif"><b>Nine months ended
    September 30,</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="8" align="left"><hr size="1" noshade>
</td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>2004</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Change</b></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1">&nbsp;</font></td>
<td align="right"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net cash provided by operating activities</font></td>
<td width="2%" align="right" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">17.0</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">17.9</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">(.9</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Net cash used in investing activities</font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(58.3</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(45.4</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">(12.9</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Net cash provided by financing activities</font></td>
<td align="right" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">36.0</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">26.3</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">9.7</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
</table>
<p align="left"><font face="serif" size="2">The variance in net cash provided by operating activities resulted primarily from an increase of $3.1 million in operating income before non-cash expenses in 2005, which was primarily due to (i) an increase in management and service fee income from Fund II, (ii) additional fee income from the acquisition of certain management contracts offset by (iii) additional general and administrative expenses as a result of expanding our infrastructure to support this increased level of activity.&nbsp; In addition, a net decrease in cash provided by operating assets and liabilities of $4.0 million resulted primarily from an increase in receivables related to third party construction cost reimbursements and a decrease in accounts payable and accrued expenses
offset by a decrease in rents receivable.  </font></p>
<p align="left"><font face="serif" size="2">The increase in net cash used in investing activities resulted primarily from a $19.5 million Preferred Equity investment in 2005 and an $18.4 million increase in expenditures for real estate acquisitions, development and tenant installations during 2005.  These decreases were offset by $21.2 of additional investments in and advances to unconsolidated partnerships in 2004 and $3.9 million of proceeds received from the sale of a property in 2005.  </font></p>
<p align="left"><font face="serif" size="2">The increase in net cash provided by financing activities resulted primarily from $18.9 million of additional cash used in the net repayment of debt in 2004 offset by $7.9 million of cash provided by the exercise of stock options in 2004 and $2.6 million of additional cash paid for dividends and distributions on Common OP Units in 2005. </font></p>
<p align="left"><b><font face="serif" size="2">INFLATION</font></b></p>
<p align="left"><font face="serif" size="2">Our long-term leases contain provisions designed to mitigate the adverse impact of inflation on our net income. Such provisions include clauses enabling us to receive percentage rents based on tenants&#8217; 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 our leases are for terms of less than ten years, which permits us to seek to increase rents upon re-rental at market rates if current rents are below the then existing market rates. Most of our leases require the tenants to pay their share of
operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation.</font></p>
<p align="center"><font face="serif" size="2">27</font></p>
<hr noshade align="center" width="100%" size="2">
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<page>
<a name="p28"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="left"><b><font face="serif" size="2">Item 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Quantitative and Qualitative Disclosures about Market Risk</font></b></p>
<p align="left"><font face="serif" size="2">Our primary market risk exposure is to changes in interest rates related to our mortgage debt. See the discussion under Item 2. for certain quantitative details related to our mortgage debt.</font></p>
<p align="left"><font face="serif" size="2">Currently, we manage our exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap agreements. We are a party to current and forward-starting interest rate swap transactions to hedge our exposure to changes in LIBOR with respect to $92.9 million and $24.5 million of notional principal, respectively.</font></p>
<p align="left"><font face="serif" size="2">The following table sets forth information as of September 30, 2005 concerning our 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 align="left"><font face="serif" size="2">Consolidated mortgage debt:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="bottom">
<td align="left"><font size="1" face="serif"><b>Year</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Scheduled</b></font><font size="1"><br><font face="serif"><b>Amortization</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Maturities</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Total</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Weighted</b></font><font size="1"><br><font face="serif"><b>average</b></font><br>
<font face="serif"><b>interest rate</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="bottom">
<td align="left"><hr size="1" noshade>
</td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left">
  <hr size="1" noshade></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">2005</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.4</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">0.4</font></td>
<td width="2%" align="left" bgcolor="#eeeeee">&nbsp;</td>
<td width="1%" align="left" bgcolor="#eeeeee"></td>
<td width="8%" align="right" bgcolor="#eeeeee"><font size="2" face="serif">n/a</font></td>
<td width="2%" align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">2006</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">2.2</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">2.2</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">n/a</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">2007</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">3.9</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">17.5</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">21.4</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5.9</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">2008</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">4.4</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">8.0</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">12.4</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5.1</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">2009</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5.2</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5.2</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">n/a</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">Thereafter</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">13.8</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">151.4</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">165.2</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5.4</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">29.9</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">176.9</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">206.8</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
</tr>
</table>
<p align="left"><font face="serif" size="2">Mortgage debt in unconsolidated partnerships (at our pro rata share):</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="bottom">
<td align="left"><font size="1" face="serif"><b>Year</b></font></td>
<td align="center">&nbsp;</td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Scheduled</b></font><font size="1"><br>
    <font face="serif"><b>amortization</b></font></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Maturities</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Total</b></font></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="center"><font size="1" face="serif"><b>Weighted</b></font><font size="1"><br>
  <font face="serif"><b>average</b></font><br>
  <font face="serif"><b>interest rate</b></font></font></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="bottom">
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="left"><font size="1">&nbsp;</font></td>
<td colspan="2" align="left"><hr size="1" noshade></td>
<td align="center"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">2005</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">0.1</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">2.3</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">2.4</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"></td>
<td width="8%" align="right"><font size="2" face="serif">4.2</font></td>
<td width="2%" align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">2006</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1.0</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">&#151;</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1.0</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">n/a</font></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">2007</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">1.0</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">8.4</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">9.4</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">5.4</font></td>
<td align="left"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">2008</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">1.4</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">13.6</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">15.0</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">4.7</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">2009</font></td>
<td align="left"></td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">1.5</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">1.5</font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="right"><font size="2" face="serif">n/a</font></td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">Thereafter</font></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5.1</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">36.8</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">41.9</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">5.7</font></td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">%</font></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="1" noshade></td>
<td align="left"><hr size="1" noshade></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="left"></td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">10.1</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">61.1</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"><font size="2" face="serif">$</font></td>
<td align="right" bgcolor="#eeeeee"><font size="2" face="serif">71.2</font></td>
<td align="left" bgcolor="#eeeeee">&nbsp;</td>
<td align="left" bgcolor="#eeeeee"></td>
<td align="right" bgcolor="#eeeeee"></td>
<td align="left" bgcolor="#eeeeee"></td>
</tr>
<tr valign="top">
  <td align="left"></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left"></td>
  <td align="right"></td>
  <td align="left"></td>
</tr>
</table>
<p align="left"><font face="serif" size="2">Of our total outstanding debt, $17.5 million will become due in 2007. As we intend on refinancing some or all of such debt at the then-existing market interest rates which may be greater than the current interest rate, our interest expense would increase by approximately $0.2 million annually if the interest rate on the refinanced debt increased by 100 basis points. Interest expense on our variable debt as of September 30, 2005 would increase by $0.4 million for a 100 basis point increase in LIBOR on our $36.5 million of floating rate debt after taking into account the effect of interest rate swaps which hedge such debt. We may seek additional variable-rate financing if and when pricing and other commercial and financial terms warrant. As such,
we 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>
<p align="left"><b><font face="serif" size="2"><a name="p28a"></a>Item 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Controls and Procedures</font></b></p>
<p align="left"><font face="serif" size="2">(a)<i> Evaluation of Disclosure Controls and Procedures.</i> Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our 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, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.</font></p>
<p align="left"><font face="serif" size="2">(b)<i> Internal Control over Financial Reporting.</i> There have not been any changes in our 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, our internal control over financial reporting.</font></p>
<p align="left"><b><font face="serif" size="2">Part II.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Information</font></b></p>
<p align="left"><b><font face="serif" size="2">Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Legal Proceedings</font></b></p>
<p align="left"><font face="serif" size="2">There have been no material legal proceedings beyond those previously disclosed in our filed Annual Report on Form 10-K for the year ended December 31, 2004.</font></p>
<p align="left"><b><font face="serif" size="2">Item 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unregistered Sales of Equity Securities and Use of Proceeds</font></b></p>
<p align="left"><font face="serif" size="2">None</font></p>
<p align="left"><font face="serif" size="2">&nbsp;<b>Item 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defaults upon Senior Securities</b></font></p>
<p align="left"><font face="serif" size="2">None</font></p>
<p align="center"><font face="serif" size="2">28</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p29"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="left"><b><font face="serif" size="2">Item 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Submission of Matters to a Vote of Security Holders</font></b></p>
<p align="left"><font face="serif" size="2">None</font></p>
<p align="left"><b><font face="serif" size="2">Item 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Information</font></b></p>
<p align="left"><font face="serif" size="2">None</font></p>
<p align="left"><b><font face="serif" size="2">Item 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits</font></b></p>
<table border="0" cellpadding="0" cellspacing="0">
<tr valign="top">
<td width="10%" align="left"><font size="2" face="serif"><b>Exhibit No.</b></font></td>
<td colspan="4" align="left"><font size="2" face="serif"><b>Description</b></font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">3.1</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Declaration of Trust
    of the Company, as amended (1)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">3.2</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Fourth Amendment to
    Declaration of Trust (4)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">3.3</font></td>
<td colspan="4" align="left"><font size="2" face="serif">By-Laws of the Company
    (5)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">3.4</font></td>
<td colspan="4" align="left"><font size="2" face="serif">First Amendment to By-Laws
    of the Company (19)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">4.1</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Voting Trust Agreement
    between the Company and Yale University dated February 27, 2002 (14)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.1</font></td>
<td colspan="4" align="left"><font size="2" face="serif">1999 Share Option Plan
    (8) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.2</font></td>
<td colspan="4" align="left"><font size="2" face="serif">2003 Share Option Plan
    (16) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.3</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Form of Share Award
    Agreement (17) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.4</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Form of Registration
    Rights Agreement and Lock-Up Agreement (18)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.5</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Registration Rights
    and Lock-Up Agreement (RD Capital Transaction) (11)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.6</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Registration Rights
    and Lock-Up Agreement (Pacesetter Transaction) (11)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.7</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.8</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.9</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Employment agreement
    between the Company and Kenneth F. Bernstein (6) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.11</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Amendment to employment
    agreement between the Company and Kenneth F. Bernstein (18) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.12</font></td>
<td colspan="4" align="left"><font size="2" face="serif">First Amendment to Employment
    Agreement between the Company and Kenneth Bernstein dated as of January 1,
    2001 (12) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.14</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Letter of employment
    offer between the Company and Michael Nelsen, Sr. Vice President and Chief
    Financial Officer dated February 19, 2003 (15) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.15</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Severance Agreement
    between the Company and Joel Braun, Sr. Vice President, dated April 6, 2001
    (13) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.16</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Severance Agreement
    between the Company and Joseph Hogan, Sr. Vice President, dated April 6,
    2001 (13) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.17</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Severance Agreement
    between the Company and Joseph Napolitano, Sr. Vice President dated April
    6, 2001 (18) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.18</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Severance Agreement
    between the Company and Robert Masters, Sr. Vice President and General Counsel
    dated January 2001 (18) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.19</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Severance Agreement
    between the Company and Michael Nelsen, Sr. Vice President and Chief Financial
    Officer dated February 19, 2003 (15) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.20</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Secured Promissory Note
    between RD Absecon Associates, L.P. and Fleet Bank, N.A. dated February 8,
    2000 (7)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.21</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Promissory Note between
    239 Greenwich Associates, L.P. and Greenwich Capital Financial Products,
    Inc. dated May 30, 2003 (18)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.22</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.23</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Promissory Note between
    Merrillville Realty, L.P. and Sun America Life Insurance Company dated July
    7, 1999 (7)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.24</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Secured Promissory Note
    between Acadia Town Line, LLC and Fleet Bank, N.A. dated March 21, 1999 (7)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.25</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Promissory Note between
    RD Village Associates Limited Partnership and Sun America Life Insurance
    Company Dated September 21, 1999 (7)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.26</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.27</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Mortgage and Security
    Agreement between Port Bay Associates, LLC and Fleet Bank, N.A. dated July
    19, 2000 (10)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.28</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Mortgage Note between
    Port Bay Associates, LLC and Fleet Bank, N.A. dated December 1, 2003 (18)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.29</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.30</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Note Modification Agreement
    between Port Bay Associates, LLC and Fleet Bank, N.A. dated December 1, 2003
    (18)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.31</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.32</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.33</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.34</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.35</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Promissory Note between
    RD Whitegate Associates, L.P. and Bank of America, N.A. dated December 22,
    2000 (10)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.36</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Promissory Note between
    RD Columbia Associates, L.P. and Bank of America, N.A. dated December 22,
    2000 (10)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.37</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.38</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.39</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.40</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.41</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.42</font></td>
<td colspan="4" align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">10.43</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Note Modification Agreement
    between RD Elmwood Associates, L.P. and Washington Mutual Bank, FA dated
    December 19, 2003 (18)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.44</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Prospectus Supplement
    Regarding Options Issued under the Acadia Realty Trust 1999 Share Incentive
    Plan and 2003 Share Incentive Plan (19) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.45</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Acadia Realty Trust
    1999 Share Incentive Plan and 2003 Share Incentive Plan Deferral and Distribution
    Election Form (19) (21)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.46</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Amended, Restated And
    Consolidated Promissory Note between Acadia New Loudon, LLC and Greenwich
    Capital Financial Products, Inc. dated August 13, 2004 (19)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.47</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Amended, Restated And
    Consolidated Mortgage, Assignment Of Leases And Rents And Security Agreement
    between Acadia New Loudon, LLC and Greenwich Capital Financial Products,
    Inc. dated August 13, 2004 (19)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.48</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Amended and Restated
    Term Loan Agreement between Fleet National Bank and Heathcote Associates,
    L.P., Acadia Town Line, LLC, RD Branch Associates, L.P., RD Abington Associates
    Limited Partnership, And RD Methuen Associates Limited Partnership dated
    September 30, 2004 (19)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.49</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Mortgage Modification
    Agreement between Fleet National Bank and Acadia Town Line, LLC dated September
    30, 2004 (19)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.49a</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Mortgage Modification
    Agreement between Fleet National Bank and Heathcote Associates, L.P. dated
    September 30, 2004 (19)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.49b</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Mortgage Modification
    Agreement between Fleet National Bank and RD Branch Associates dated September
    30, 2004 (19)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.49c</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Mortgage Modification
    Agreement between Fleet National Bank and RD Methuen Associates dated September
    30, 2004 (19)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.49d</font></td>
<td colspan="4" align="left"><font size="2" face="serif">Mortgage Modification
    Agreement between Fleet National Bank and RD Abington Associates Limited
    Partnership dated September 30, 2004 (19)</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">29</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p30"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="10%" align="left"><font size="2" face="serif">10.50</font></td>
<td align="left"><font size="2" face="serif">Contribution Agreement between Levitz
    SL, L.L.C. and Acadia Levitz, LLC dated March 8, 2005 (20)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.51</font></td>
<td align="left"><font size="2" face="serif">Agreement of Contribution among
    Acadia Realty Limited Partnership, Acadia Realty Trust, Klaff Realty, LP
    and Klaff Realty, Limited dated February 15, 2005 (20)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">10.51a</font></td>
<td align="left"><font size="2" face="serif">Registration Rights and Lock-up
    Agreement among Acadia Realty Limited Partnership, Acadia Realty Trust and
    Klaff Realty, LP dated February 15, 2005 (20)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">31.1</font></td>
<td align="left"><font size="2" face="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 (22)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">31.2</font></td>
<td align="left"><font size="2" face="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 (22)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">32.1</font></td>
<td align="left"><font size="2" face="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 (22)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">32.2</font></td>
<td align="left"><font size="2" face="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 (22)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">99.1</font></td>
<td align="left"><font size="2" face="serif">Amended and Restated Agreement of
    Limited Partnership of the Operating Partnership (11)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">99.2</font></td>
<td align="left"><font size="2" face="serif">First and Second Amendments to the
    Amended and Restated Agreement of Limited Partnership of the Operating Partnership
    (11)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">99.3</font></td>
<td align="left"><font size="2" face="serif">Third Amendment to Amended and Restated
    Agreement of Limited Partnership of the Operating Partnership (18)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">99.4</font></td>
<td align="left"><font size="2" face="serif">Fourth Amendment to Amended and
    Restated Agreement of Limited Partnership of the Operating Partnership (18)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">99.5</font></td>
<td align="left"><font size="2" face="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 valign="top">
<td align="left"><font size="2" face="serif">99.6</font></td>
<td align="left"><font size="2" face="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>
<br><br>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td colspan="2" align="left"><hr align="left" width="150" size="1" noshade>
</td>
  </tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">Notes:</font></td>
<td align="left"><font size="1">&nbsp;</font></td>
</tr>
<tr valign="top">
<td width="10%" align="left"><font size="1" face="serif">(1)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Annual Report on
    Form 10-K filed for the fiscal Year ended December 31, 1994</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(2)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to Company&#8217;s Quarterly Report on Form
    10-Q filed for the quarter ended September 30, 1997</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(3)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to Company&#8217;s Quarterly Report on Form
    10-Q filed for the quarter ended September 30, 1998</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(4)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to Company&#8217;s Quarterly Report on Form
    10-Q filed for the quarter ended September 30, 1998</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(5)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Registration Statement
    on Form S-11 (File No.33-60008)</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(6)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Annual Report on
    Form10-K filed for the fiscal year ended December 31, 1998</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(7)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Annual Report on
    Form10-K filed for the fiscal year ended December 31, 1999</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(8)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Registration Statement
    on Form S-8 filed September 28, 1999</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(9)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Form 8-K filed on
    April 20, 1998</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(10)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Form 10-K filed for
    the fiscal year ended December 31, 2000</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(11)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Registration Statement
    on Form S-3 filed on March 3, 2000</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(12)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to Company&#8217;s Quarterly Report on Form
    10-Q filed for the quarter ended September 30, 2001</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(13)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Annual Report on
    Form 10-K filed for the fiscal year ended December 31, 2001</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(14)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to Yale University&#8217;s Schedule 13D
    filed on September 25, 2002</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(15)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Annual Report on
    Form 10-K filed for the fiscal year ended December 31, 2002</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(16)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Definitive Proxy
    Statement on Schedule 14A filed April 29, 2003.</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(17)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Current Report on
    Form 8-K filed on July 2, 2003</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(18)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Annual Report on
    Form 10-K filed for the fiscal year ended December 31, 2003</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(19)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Annual Report on
    Form 10-K filed for the fiscal year ended December 31, 2004</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(20)</font></td>
<td align="left"><font size="1" face="serif">Incorporated by reference to the
    copy thereof filed as an Exhibit to the Company&#8217;s Annual Report on
    Form 10-K filed for the fiscal year ended December 31, 2004</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(21)</font></td>
<td align="left"><font size="1" face="serif">Management contract or compensatory
    plan or arrangement.</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">(22)</font></td>
<td align="left"><font size="1" face="serif">Filed herewith</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">30</font></p>
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<div style="page-break-before:always"></div>
<page>
<a name="p31"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">SIGNATURES</font></b></p>
<p align="left"><font face="serif" size="2">Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</font></p>
<p align="center"><b><font face="serif" size="2">ACADIA REALTY TRUST</font></b></p>  <table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left" width="45%"><font size="2" face="serif">November 9, 2005</font></td>
<td align="right" width="3%"><font size="2" face="serif">/s/&nbsp; </font></td>
<td align="left"><font size="2" face="serif"><u>Kenneth F. Bernstein</u></font></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">Kenneth F. Bernstein</font></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">President and Chief Executive Officer</font><br>
  <font size="2" face="serif">(Principal Executive Officer)</font></td>
</tr>
<tr valign="top">
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td> </tr>
<tr valign="top">
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td> </tr>
<tr valign="top">
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td> </tr>
<tr valign="top">
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td> </tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">November 9, 2005</font></td>
<td align="right"><font size="2" face="serif">/s/&nbsp; </font></td>
<td align="left"><font size="2" face="serif"><u>Michael Nelsen</u></font></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">Michael Nelsen</font></td>
</tr>
<tr valign="top">
<td align="left"></td>
<td align="left"></td>
<td align="left"><font size="2" face="serif">Senior Vice President and Chief
    Financial Officer</font><br>
  <font size="2" face="serif">(Principal Financial Officer)</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">31</font></p>
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<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>b409679ex31-1.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
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Prepared and filed by St Ives Financial
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<p align="right"><b><font size="2" face="serif">EXHIBIT 31.1</font></b></p>
<p align="center"><font size="2" face="serif">CERTIFICATION</font></p>
<p align="left"><font size="2" face="serif">I, Kenneth F. Bernstein, certify that:</font></p>
<p align="left"><font size="2" face="serif">1. I have reviewed this quarterly report on Form 10-Q of Acadia Realty Trust;</font></p>
<p align="left"><font size="2" face="serif">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></p>
<p align="left"><font size="2" face="serif">3. 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></p>
<p align="left"><font size="2" face="serif">4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</font></p>
<p align="left"><font size="2" face="serif">(a) 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></p>
<p align="left"><font size="2" face="serif">(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</font></p>
<p align="left"><font size="2" face="serif">(c) evaluated the effectiveness of the registrant'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></p>
<p align="left"><font size="2" face="serif">(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and</font></p>
<p align="left"><font size="2" face="serif">5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):</font></p>
<p align="left"><font size="2" face="serif">(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</font></p>
<p align="left"><font size="2" face="serif">(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</font></p>
<p align="left"><font size="2" face="serif">/s/ <u>Kenneth F. Bernstein</u><br>
Kenneth F. Bernstein<br>
President and Chief Executive Officer<br>
November 9, 2005</font></p>
<p align="center">&nbsp;</p>
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<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>5
<FILENAME>b409679ex31-2.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
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Prepared and filed by St Ives Financial
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<p align="right"><b><font size="2" face="serif">EXHIBIT 31.2</font></b></p>
<p align="center"><font size="2" face="serif">CERTIFICATION</font></p>
<p align="left"><font size="2" face="serif">I, Michael Nelsen, certify that:</font></p>
<p align="left"><font size="2" face="serif">1. I have reviewed this quarterly report on Form 10-Q of Acadia Realty Trust;</font></p>
<p align="left"><font size="2" face="serif">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></p>
<p align="left"><font size="2" face="serif">3. 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></p>
<p align="left"><font size="2" face="serif">4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</font></p>
<p align="left"><font size="2" face="serif">(a) 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></p>
<p align="left"><font size="2" face="serif">(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,  to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</font></p>
<p align="left"><font size="2" face="serif">(c) evaluated the effectiveness of the registrant'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></p>
<p align="left"><font size="2" face="serif">(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and</font></p>
<p align="left"><font size="2" face="serif">5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):</font></p>
<p align="left"><font size="2" face="serif">(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</font></p>
<p align="left"><font size="2" face="serif">(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</font></p>
<p align="left"><font size="2" face="serif">/s/<u> Michael Nelsen</u><br>
Michael Nelsen<br>
Senior Vice President and<br>
Chief Financial Officer<br>
November 9, 2005</font></p>
<p align="center">&nbsp;</p>
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<TYPE>EX-32
<SEQUENCE>6
<FILENAME>b409679ex32-1.htm
<DESCRIPTION>EXHIBIT 32.1
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Prepared and filed by St Ives Financial
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<p>&nbsp;</p>
<p align="right"><b><font size="2" face="serif">EXHIBIT 32.1</font></b></p>
<p align="center"><font size="2" face="serif">CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO<br>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></p>
<p align="left"><font size="2" face="serif">In connection with the Quarterly Report of Acadia Realty Trust (the &quot;Company&quot;) on Form 10-Q for the quarter ended September 30, 2005, as filed with the Securities and Exchange Commission on the date hereof (the &quot;Report&quot;), I, Kenneth F. Bernstein, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:</font></p>
<p align="left"><font size="2" face="serif">(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</font></p>
<p align="left"><font size="2" face="serif">(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p>
<p align="left"><font size="2" face="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>
<p align="left"><font size="2" face="serif">/s/ <u>Kenneth F. Bernstein</u><br>
Kenneth F. Bernstein<br>
President and Chief Executive Officer<br>
November 9, 2005</font></p>
<p align="left">&nbsp;</p>
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<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>7
<FILENAME>b409679ex32-2.htm
<DESCRIPTION>EXHIBIT 32.2
<TEXT>
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Prepared and filed by St Ives Financial
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<p align="right"><b><font size="2" face="serif">EXHIBIT 32.2</font></b></p>
<p align="center"><font size="2" face="serif">CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO<br>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></p>
<p align="left"><font size="2" face="serif">In connection with the Annual Report of Acadia Realty Trust (the &quot;Company&quot;) on Form 10-Q for the quarter ended September 30, 2005, as filed with the Securities and Exchange Commission on the date hereof (the &quot;Report&quot;), I, Michael Nelsen, Sr. Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:</font></p>
<p align="left"><font size="2" face="serif">(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</font></p>
<p align="left"><font size="2" face="serif">(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p>
<p align="left"><font size="2" face="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>
<p align="left"><font size="2" face="serif">/s/ <u>Michael Nelsen</u><br>
Michael Nelsen<br>
Senior Vice President and<br>
Chief Financial Officer<br>
November 9, 2005</font></p>
<p align="center">&nbsp;</p>
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