<SUBMISSION>
<ACCESSION-NUMBER>0000950116-05-002643
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>7
<PERIOD>20050630
<FILING-DATE>20050804
<DATE-OF-FILING-DATE-CHANGE>20050804
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>CEDAR SHOPPING CENTERS INC
<CIK>0000761648
<ASSIGNED-SIC>6798
<IRS-NUMBER>421241468
<STATE-OF-INCORPORATION>MD
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-31817
<FILM-NUMBER>051000280
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>44 SOUTH BAYLES AVENUE
<CITY>PORT WASHINGTON
<STATE>NY
<ZIP>11050
<PHONE>5167676492
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>44 SOUTH BAYLES AVENUE
<CITY>PORT WASHINGTON
<STATE>NY
<ZIP>11050
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>CEDAR INCOME FUND LTD /MD/
<DATE-CHANGED>20001128
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>UNI INVEST USA LTD
<DATE-CHANGED>20000407
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>CEDAR INCOME FUND LTD
<DATE-CHANGED>19920703
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>p408130_10q.htm
<DESCRIPTION>QUARTERLY REPORT
<TEXT>
<html>
<head><title>
Prepared and filed by St Ives Financial
</title>
</head>
<body bgcolor="#FFFFFF">
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<page>
<a name="pcover"></a>
<p><a href="#contents"><font size="2">Click Here for Index</font></a></p>
<p align="center"><font size="2" face="serif"><b>UNITED STATES<br>SECURITIES AND EXCHANGE COMMISSION<br>WASHINGTON, D.C. 20549</b></font></p>
<p align="center"><b><font face="serif" size="5">FORM 10-Q</font></b></p>  <table width="100%" border="0" align="center" cellpadding="0" cellspacing="0">
<tr valign="top">
  <td width="20%" align="center">&nbsp;</td>
<td width="3%" align="left"><font size="2" face="serif"><img src="tickedbox.gif" title="checked box"></font></td>
<td align="center"><font size="2" face="serif"><b>QUARTERLY REPORT PURSUANT
        TO SECTION 13 OR 15(d) OF<br>
    THE SECURITIES EXCHANGE ACT OF 1934</b></font></td>
<td width="20%" align="center">&nbsp;</td>
</tr>
<tr valign="top">
  <td width="20%">&nbsp;</td>
<td width="3%" align="left">&nbsp;</td>
<td>&nbsp;</td>
<td width="20%">&nbsp;</td>
</tr>
<tr valign="top">
  <td width="20%" align="left">&nbsp;</td>
<td width="3%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="center"><font size="2" face="serif"><b>FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005 </b></font></td>
<td width="20%" align="center">&nbsp;</td>
</tr>
<tr valign="top">
  <td width="20%">&nbsp;</td>
<td width="3%" align="left">&nbsp;</td>
<td>&nbsp;</td>
<td width="20%">&nbsp;</td>
</tr>
<tr valign="top">
  <td width="20%" align="left">&nbsp;</td>
<td width="3%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="center"><font size="2" face="serif"><b>OR</b></font></td>
<td width="20%" align="center">&nbsp;</td>
</tr>
<tr valign="top">
  <td width="20%">&nbsp;</td>
<td width="3%" align="left">&nbsp;</td>
<td>&nbsp;</td>
<td width="20%">&nbsp;</td>
</tr>
<tr valign="top">
  <td width="20%" align="center">&nbsp;</td>
<td width="3%" align="left"><font size="2" face="serif"><b><img src="emptybox.gif"></b></font></td>
<td align="center"><font size="2" face="serif"><b>TRANSITION REPORT PURSUANT
        TO SECTION 13 OR 15(d) OF<br>
    THE SECURITIES EXCHANGE ACT OF 1934</b></font></td>
<td width="20%" align="center">&nbsp;</td>
</tr>
</table>
<p align="center"><font size="2" face="serif"><b>COMMISSION FILE NUMBER: 0-14510</b></font></p>  <table width="100%" border="0" align="center" cellpadding="0" cellspacing="0">
<tr valign="top">
  <td width="25%" align="center">&nbsp;</td>
<td align="center"><font size="2" face="serif"><b>CEDAR SHOPPING CENTERS, INC.</b></font></td>
<td width="25%" align="center">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="center">&nbsp;</td>
  <td align="center"><hr size="1" noshade>
    </td>
  <td align="center">&nbsp;</td>
</tr>
<tr valign="top">
  <td width="25%" align="center">&nbsp;</td>
<td align="center"><font size="2" face="serif"><b>(Exact name of registrant as specified in its charter)</b></font></td>
<td width="25%" align="center">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="center">&nbsp;</td>
  <td align="center">&nbsp;</td>
  <td align="center">&nbsp;</td>
</tr>
</table>
<table width="100%" border="0" align="center" cellpadding="0" cellspacing="0">
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td width="20%" align="left">&nbsp;</td>
  <td width="29%" align="center"><font size="2" face="serif"><b>Maryland</b></font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="29%" align="center"><font size="2" face="serif"><b>42-1241468</b></font></td>
<td width="20%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td width="20%" align="left">&nbsp;</td>
  <td width="29%" align="center"><hr size="1" noshade>
    </td>
  <td width="2%" align="left">&nbsp;</td>
  <td width="29%" align="center"><hr size="1" noshade>
    </td>
  <td width="20%" align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td width="20%" align="left">&nbsp;</td>
  <td width="29%" align="center"><font size="2" face="serif"><b>(State or other jurisdiction
        of<br>
      incorporation or organization)</b></font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="29%" align="center"><font size="2" face="serif"><b>(I.R.S. Employer<br>
  Identification
      No.)</b></font></td>
<td width="20%" align="left">&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td width="20%" align="left">&nbsp;</td>
  <td align="center"><font size="1" face="serif">&nbsp;</font></td>
<td width="20%" align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td width="20%" align="left">&nbsp;</td>
  <td align="center"><font size="2" face="serif"><b>44 South Bayles Avenue, Port Washington, New York 11050-3765</b></font></td>
<td align="left" width="20%">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="center"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td width="20%" align="left">&nbsp;</td>
  <td align="center"><font size="2" face="serif"><b>(Address of principal executive offices)     (Zip Code)</b></font></td>
<td width="20%" align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td width="20%" align="left">&nbsp;</td>
  <td align="center"><font size="2" face="serif">&nbsp;</font></td>
<td width="20%" align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td width="20%" align="left">&nbsp;</td>
  <td align="center"><font size="2" face="serif"><b>(516) 767-6492</b></font></td>
<td width="20%" align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="center"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td width="20%" align="left">&nbsp;</td>
  <td align="center"><font size="2" face="serif"><b>(Registrant&#146;s telephone number, including area code)</b></font></td>
<td width="20%" align="left">&nbsp;</td>
</tr>
</table>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif"><b>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.</b></font></p>
  <p align="left"><font size="2" face="serif"><b>Yes <img src="tickedbox.gif" title="checked box"> No <img src="emptybox.gif"></b></font></p>
  <p align="left"><font size="2" face="serif"><b>Indicate by check mark whether
        the registrant is an accelerated filer (as defined in Rule 12b-2 of the
        Exchange Act).</b></font></p>
  <p align="left"><font size="2" face="serif"><b>Yes <img src="tickedbox.gif" title="checked box"> No <img src="emptybox.gif"></b></font></p>
  <p align="left"><font size="2" face="serif"><b>Indicate the number of shares
        outstanding of each of the issuer&#146;s classes of common stock, as
        of the latest practicable date: At August 4, 2005, there were 22,347,981
        shares of Common Stock, $0.06 par value, outstanding.</b></font></p>
</div>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="contents"></a>
<p align="center"><font size="2" face="serif"><b>CEDAR SHOPPING CENTERS, INC.</b></font></p>
<p align="center"><font size="2" face="serif"><b>INDEX</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td colspan="3" align="left"><a href="#p3"><font size="2" face="serif">Forward-Looking Statements</font></a></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p3"><font size="2" face="serif">3</font></a></td>
</tr>
<tr valign="top">
<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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<td colspan="3" align="left"><font size="2" face="serif">Part I.  Financial Information</font></td>
<td align="left"><font size="2">&nbsp;</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;</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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 9%; text-indent: -3%"><font size="2" face="serif">Item
    1.</font></div></td>
<td align="left" width="2%"><font size="2">&nbsp;</font></td>
<td width="77%" align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Financial
    Statements</font></div></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="4%" align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top">
<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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><a href="#p4"><font size="2" face="serif">Consolidated
    Balance Sheets &#150; June 30, 2005 (unaudited) and December 31, 2004</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p4"><font size="2" face="serif">4</font></a></td>
</tr>
<tr valign="top">
<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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><a href="#p5"><font size="2" face="serif">Consolidated
      Statements of Income (unaudited) &#150; Three months and six months ended
    June 30, 2005 and 2004</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p5"><font size="2" face="serif">5</font></a></td>
</tr>
<tr valign="top">
<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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><a href="#p6"><font size="2" face="serif">Consolidated
      Statement of Shareholders&#146; Equity (unaudited) &#150; Six months ended
    June 30, 2005</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p6"><font size="2" face="serif">6</font></a></td>
</tr>
<tr valign="top">
<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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><a href="#p7"><font size="2" face="serif">Consolidated
      Statements of Cash Flows (unaudited) &#150; Six months ended June 30, 2005
    and 2004</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p7"><font size="2" face="serif">7</font></a></td>
</tr>
<tr valign="top">
<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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><a href="#p8"><font size="2" face="serif">Notes
    to Consolidated Financial Statements (unaudited) &#150; June 30, 2005</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p8"><font size="2" face="serif">8-14</font></a></td>
</tr>
<tr valign="top">
<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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 9%; text-indent: -3%"><a href="#p15"><font size="2" face="serif">Item
    2.</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><a href="#p15"><font size="2" face="serif">Management&#146;s
    Discussion and Analysis of Financial Condition And Results of Operations</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p15"><font size="2" face="serif">15-22</font></a></td>
</tr>
<tr valign="top">
<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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 9%; text-indent: -3%"><a href="#p23a"><font size="2" face="serif">Item
    3.</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><a href="#p23a"><font size="2" face="serif">Quantitative
    and Qualitative Disclosures About Market Risk</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p23a"><font size="2" face="serif">23</font></a></td>
</tr>
<tr valign="top">
<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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 9%; text-indent: -3%"><a href="#p23b"><font size="2" face="serif">Item
    4.</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><a href="#p23b"><font size="2" face="serif">Controls
    and Procedures</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p23b"><font size="2" face="serif">23</font></a></td>
</tr>
<tr valign="top">
<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">&nbsp;</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;</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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td colspan="3" align="left"><font size="2" face="serif">Part II. Other Information</font></td>
<td align="left"><font size="2">&nbsp;</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;</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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 9%; text-indent: -3%"><a href="#p24a"><font size="2" face="serif">Item
    4.</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><a href="#p24a"><font size="2" face="serif">Submission
    of Matters to a Vote of Security Holders</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p24a"><font size="2" face="serif">24 </font></a></td>
</tr>
<tr valign="top">
<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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 9%; text-indent: -3%"><a href="#p24b"><font size="2" face="serif">Item
    6.</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><a href="#p24b"><font size="2" face="serif">Exhibits</font></a></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p24b"><font size="2" face="serif">24</font></a></td>
</tr>
<tr valign="top">
<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">&nbsp;</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;</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">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td colspan="3" align="left"><a href="#p25"><font size="2" face="serif">Signatures</font></a></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><a href="#p25"><font size="2" face="serif">25</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"><font size="2" face="serif"><b>Forward-Looking Statements</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">Statements made or incorporated
      by reference in this Form 10-Q include certain &#147;forward-looking statements&#148;.
      Forward-looking statements include, without limitation, statements containing
      the words &quot;anticipates&quot;, &quot;believes&quot;, &quot;expects&quot;, &quot;intends&quot;, &quot;future&quot;,
      and words of similar import which express the Company&#146;s belief, expectations
      or intentions regarding future performance or future events or trends.
      While forward-looking statements reflect good faith beliefs, they are not
      guarantees of future performance and involve known and unknown risks, uncertainties
      and other factors, which may cause actual results, performance or achievements
      to differ materially from anticipated future results, performance or achievements
      expressed or implied by such forward-looking statements as a result of
      factors outside of the Company&#146;s control. Certain factors that might
      cause such a difference include, but are not limited to, the following:
      real estate investment considerations, such as the effect of economic and
      other conditions in general and in the Company&#146;s market areas in particular;
      the financial viability of the Company&#146;s tenants; the continuing availability
      of shopping center acquisitions, and development and redevelopment opportunities,
      on favorable terms; the availability of equity and debt capital in the
      public and private markets; changes in interest rates; the fact that returns
      from development, redevelopment and acquisition activities may not be at
      expected levels; the Company&#146;s potential inability to realize the
      level of proceeds from property sales as initially expected; inherent risks
      in ongoing development and redevelopment projects including, but not limited
      to, cost overruns resulting from weather delays, changes in the nature
      and scope of development and redevelopment efforts, and market factors
      involved in the pricing of material and labor; the need to renew leases
      or re-let space upon the expiration of current leases; and the financial
      flexibility to refinance debt obligations when due.</font></p>
</div>
<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>
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<p align="center"><font size="2" face="serif"><b>CEDAR SHOPPING CENTERS, INC.<br>Consolidated Balance Sheets</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>June 30,<br>
  2005<br>(unaudited)</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>December 31,<br>
  2004</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Assets</font></div></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Real
    estate:</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 9%;  text-indent: -3%"><font size="2" face="serif">Land</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 117,784,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 97,617,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 9%;  text-indent: -3%"><font size="2" face="serif">Buildings
    and improvements</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">523,431,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">423,735,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">641,215,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">521,352,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 9%;  text-indent: -3%"><font size="2" face="serif">Less
    accumulated depreciation</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(23,287,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(16,027,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Real
    estate, net</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">617,928,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">505,325,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Cash
    and cash equivalents</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">7,105,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">8,457,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Cash
    at joint ventures and restricted cash</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">6,469,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">7,105,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Rents
    and other receivables, net</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">7,299,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">4,483,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Other
    assets</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">5,159,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">2,379,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Deferred
    charges, net</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">11,097,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">9,411,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Total
    assets</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 655,057,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 537,160,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Liabilities
    and shareholders&#146; equity</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Mortgage
    loans payable</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 245,117,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 180,430,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Secured
    revolving credit facility</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">43,400,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">68,200,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Accounts
    payable, accrued expenses, and other</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">8,629,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">9,012,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Unamortized
    intangible lease liabilities</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">23,941,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">25,227,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Total
    liabilities</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">321,087,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">282,869,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Minority
    interests</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">11,929,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">11,995,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Limited
    partners&#146; interest in Operating Partnership</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">21,899,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">6,542,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Shareholders&#146; equity:</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Preferred
      stock ($.01 par value, $25.00 per share liquidation value, 5,000,000 shares
    authorized, 3,550,000 and 2,350,000 shares issued and outstanding)</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">88,750,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">58,750,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Common
      stock ($.06 par value, 50,000,000 shares authorized, 22,341,000 and 19,351,000
    shares issued and outstanding)</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">1,340,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">1,161,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Treasury
    stock (366,000 and 339,000 shares, at cost)</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(4,292,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(3,919,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Additional
    paid-in capital</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">256,234,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">215,271,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Cumulative
    distributions in excess of net income</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(41,700,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(35,139,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Accumulated
    other comprehensive income (loss)</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(78,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(165,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Unamortized
    deferred compensation plans</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(112,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(205,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Total
    shareholders&#146; equity</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">300,142,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">235,754,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Total
    liabilities and shareholders&#146; equity</font></div></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
  <td align="right" valign="bottom"><font size="2" face="serif"> 655,057,000</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
  <td align="right" valign="bottom"><font size="2" face="serif"> 537,160,000</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
</table>
<p align="center"><font size="2" face="serif">See accompanying notes to consolidated financial statements.</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"><font size="2" face="serif"><b>CEDAR SHOPPING CENTERS, INC.<br>
  Consolidated Statements of Income<br>
(unaudited)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td colspan="6" align="center" valign="bottom"><font size="1" face="serif"><b>Three months ended June 30,</b></font><font size="1" face="serif">&nbsp;</font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="6" align="center" valign="bottom"><font size="1" face="serif"><b>Six months ended June 30,</b></font><font size="1" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td colspan="6" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="6" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2004</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2004</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Revenues:</font></div></td>
<td align="left" width="2%">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Rents</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 13,685,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 9,939,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 26,534,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 18,748,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Expense
    recoveries</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">3,218,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">2,575,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">6,891,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">4,935,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Other</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">144,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">126,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">144,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">229,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Total
    revenues</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">17,047,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">12,640,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">33,569,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">23,912,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Expenses:</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Operating,
    maintenance and management</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">2,545,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">2,657,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">6,572,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">5,397,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Real
    estate and other property-related taxes</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">1,915,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">1,244,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">3,390,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">2,344,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">General
    and administrative</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">1,197,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">985,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">2,166,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">1,627,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Depreciation
    and amortization</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">4,188,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">2,592,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">7,931,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">5,067,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Total
    expenses</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">9,845,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">7,478,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">20,059,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">14,435,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Operating
    income</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">7,202,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">5,162,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">13,510,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">9,477,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Non-operating
    income and expense:</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Interest
    expense</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(3,144,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(2,575,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(6,281,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(5,099,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Amortization
    of deferred financing costs</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(230,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(242,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(436,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(489,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Interest
    income</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">27,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">27,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">32,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">30,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Total
    non-operating income and expense</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(3,347,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(2,790,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(6,685,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(5,558,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Income
    before minority and limited partners&#146; interests</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">3,855,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">2,372,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">6,825,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">3,919,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Minority
    interests</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(353,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(416,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(643,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(584,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Limited
    partners&#146; interest</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(82,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(53,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(114,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(89,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Net
    income</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">3,420,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">1,903,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">6,068,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">3,246,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Preferred
    distribution requirements</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(1,954,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">&#151;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(3,248,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">&#151;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Net
    income applicable to common shareholders</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 1,466,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 1,903,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 2,820,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 3,246,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Per
    common share (basic and diluted)</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.07</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.12</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.14</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.20</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Dividends
    to common shareholders</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 5,027,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 3,703,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 9,381,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 6,335,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Per
    common share</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.225</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.225</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.450</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.385</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Average
    number of common shares outstanding</font></div></td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom"><font size="2" face="serif">22,175,000</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom"><font size="2" face="serif">16,456,000</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom"><font size="2" face="serif">20,763,000</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom"><font size="2" face="serif">16,456,000</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
</table>
<p align="center"><font size="2" face="serif">See accompanying notes to consolidated
financial statements.</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"><b><font face="serif" size="2">CEDAR SHOPPING CENTERS, INC.<br>
  Condolidated Statement of Shareholders&#146; Equity<br>
  Six months ended June 30, 2005<br>
(unaudited)</font></b></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td colspan="5" align="center" valign="bottom"><font size="1" face="serif"><b>Preferred stock</b></font></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td colspan="5" align="center" valign="bottom"><font size="1" face="serif"><b>Common
    stock</b>&nbsp;</font><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif"><b>Treasury<br>
  stock,<br>
  at cost</b></font></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif"><b>Additional<br>
paid-in<br>
capital</b></font></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif"><b>Cumulative<br>
distributions<br>
in excess of<br>
net income</b></font></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif"><b>Accumulated<br>
other<br>
comprehensive<br>
income<br>
(loss)</b></font></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif"><b>Unamortized<br>
deferred<br>
compensation<br>
plans</b></font></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif"><b>Total<br>
shareholders&#146;<br>
equity</b></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td colspan="5" align="center" valign="bottom">
  <hr size="1" noshade>
  </td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td colspan="5" align="center" valign="bottom"><hr size="1" noshade></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Shares</b></font></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>$25.00<br>
Liquidation<br>
value</b></font></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Shares</b></font></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>$0.06<br>
  Par value</b></font></td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="center" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left" valign="bottom"><div style="margin-left: 3%; text-indent: -3%"><font size="1" face="serif">Balance,
    December 31, 2004</font></div></td>
<td align="left" width="1%">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="5%" align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">2,350,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td width="5%" align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">58,750,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="4%" align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">19,351,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td width="4%" align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">1,161,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td width="5%" align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">(3,919,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td width="6%" align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">215,271,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td width="6%" align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">(35,139,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td width="7%" align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">(165,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td width="6%" align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">(205,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td width="6%" align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">235,754,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left" valign="bottom"><div style="margin-left: 3%; text-indent: -3%"><font size="1" face="serif">Net
    income</font></div></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">6,068,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">6,068,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left" valign="bottom"><div style="margin-left: 3%; text-indent: -3%"><font size="1" face="serif">Unrealized
    gain on change in fair value of cash flow hedges</font></div></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">87,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">87,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left" valign="bottom"><div style="margin-left: 3%; text-indent: -3%"><font size="1" face="serif">Deferred
    compensation plans, net</font></div></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">(373,000</font></font></td>
<td align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">373,000</font></font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">93,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">93,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left" valign="bottom"><div style="margin-left: 3%; text-indent: -3%"><font size="1" face="serif">Net
    proceeds from preferred stock offering</font></div></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">1,200,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">30,000,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">(131,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">29,869,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left" valign="bottom"><div style="margin-left: 3%; text-indent: -3%"><font size="1" face="serif">Net
    proceeds from common stock offering</font></div></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">2,990,000</font></font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">179,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">40,151,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">40,330,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left" valign="bottom"><div style="margin-left: 3%; text-indent: -3%"><font size="1" face="serif">Preferred
    distribution requirements</font></div></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">(3,248,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">(3,248,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left" valign="bottom"><div style="margin-left: 3%; text-indent: -3%"><font size="1" face="serif">Dividends
    to common shareholders</font></div></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">(9,381,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">(9,381,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left" valign="bottom"><div style="margin-left: 3%; text-indent: -3%"><font size="1" face="serif">Reallocation
    adjustment of limited partners&#146; interest</font></div></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">570,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">570,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left" valign="bottom"><div style="margin-left: 3%; text-indent: -3%"><font size="1" face="serif">Balance,
    June 30, 2005</font></div></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">3,550,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">88,750,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">22,341,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">1,340,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">(4,292,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">256,234,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">(41,700,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">(78,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">(112,000</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">$</font></font></td>
<td align="right" valign="bottom"><font size="2" face="serif"> <font face="serif" size="1">300,142,000</font></font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom" bgcolor="#ffffff"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
</table>
<p align="center"><font face="serif" size="2">See accompanying notes to consolidated
financial statements.</font></p>
<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="p7"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><b><font face="serif" size="2">CEDAR SHOPPING CENTERS, INC.<br>
  Consolidated Statements of Cash Flows<br>
(unaudited)</font></b></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td colspan="5" align="center" valign="bottom"><font size="1" face="serif"><b>Six months ended June 30,</b></font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td colspan="5" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2005</b></font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2004</b></font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Cash
    flow from operating activities:</font></div></td>
<td align="left" width="2%"><font size="2">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="1%" align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left" valign="bottom"><font size="2">&nbsp;</font></td> </tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Net
    income</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 6,068,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 3,246,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Adjustments
    to reconcile net income to net cash provided by operating activities:</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 9%;  text-indent: -3%"><font size="2" face="serif">Non-cash
    provisions:</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 12%;  text-indent: -3%"><font size="2" face="serif">Minority
    interests</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">271,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">179,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 12%;  text-indent: -3%"><font size="2" face="serif">Limited
    partners&#146; interest</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">114,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">89,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 12%;  text-indent: -3%"><font size="2" face="serif">Straight-line
    rents</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(934,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(645,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 12%;  text-indent: -3%"><font size="2" face="serif">Depreciation
    and amortization</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">8,367,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">5,556,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 12%;  text-indent: -3%"><font size="2" face="serif">Amortization
    of intangible lease liabilities</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(1,844,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(976,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 12%;  text-indent: -3%"><font size="2" face="serif">Other</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">93,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(87,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 9%;  text-indent: -3%"><font size="2" face="serif">Increases/decreases
    in operating assets and liabilities:</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 12%;  text-indent: -3%"><font size="2" face="serif">Joint
    venture cash</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(157,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">142,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 12%;  text-indent: -3%"><font size="2" face="serif">Rents
    and other receivables</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(1,882,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">461,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 12%;  text-indent: -3%"><font size="2" face="serif">Other
    assets</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(1,143,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(374,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 12%;  text-indent: -3%"><font size="2" face="serif">Accounts
    payable and accrued expenses</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(597,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(38,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Net
    cash provided by operating activities</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">8,356,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">7,553,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Cash
    flow from investing activities:</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Expenditures
    for real estate and improvements</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(94,128,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(53,042,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Other</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">889,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(713,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Net
    cash (used in) investing activities</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(93,239,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(53,755,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Cash
    flow from financing activities:</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Line
    of credit, net</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(24,800,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">58,000,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Proceeds
    from public offerings</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">70,521,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">&#151;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Proceeds
    from mortgage financings</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">53,363,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">723,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Mortgage
    repayments</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(1,197,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(6,650,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Distributions
    to minority interest partners</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(337,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(475,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Distributions
    to limited partners</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(204,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(172,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Preferred
    distribution requirements</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(3,273,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">&#151;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Distributions
    to common shareholders</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(9,381,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(6,335,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Deferred
    financing costs</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(1,161,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(1,482,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Net
    cash provided by financing activities</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">83,531,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">43,609,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Net
    (decrease) in cash and cash equivalents</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(1,352,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(2,593,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Cash
    and cash equivalents at beginning of period</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">8,457,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">6,154,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Cash
    and cash equivalents at end of period</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 7,105,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 3,561,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Supplemental
    disclosure of cash activities:</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Interest
    paid (including capitalized interest of $1,249,000 and $638,000)</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 7,371,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 5,522,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Supplemental
    disclosure of non-cash investing and financing activities:</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Purchase
    accounting adjustments</font></div></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 1,887,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 5,354,000</font></td>
<td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Assumption
        of mortgage loans payable</font></div>
  </td>
  <td align="left"><font size="2">&nbsp;</font></td>
  <td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
  <td align="right" valign="bottom"><font size="2" face="serif"> 11,003,000</font></td>
  <td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
  <td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
  <td align="right" valign="bottom"><font size="2" face="serif"> 9,993,000</font></td>
  <td align="left" valign="bottom"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
</table>
<p align="center"><font face="serif" size="2">See accompanying notes to consolidated
financial statements.</font></p>
<p align="center"><font face="serif" size="2">7</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p8"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>Notes to Consolidated Financial Statements<br>June 30, 2005<br>(unaudited)</b></font></p>
<p align="left"><font size="2" face="serif"><b>Note 1.  Organization</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">Cedar Shopping Centers, Inc. (the &quot;Company&quot;)
      was organized in 1984 and elected to be taxed as a real estate investment
      trust (&quot;REIT&quot;) in 1986. The Company has focused on the ownership,
      operation and redevelopment of community shopping and convenience centers
      located in the Northeast, primarily in Pennsylvania. At June 30, 2005,
      the Company owned 58 properties, aggregating approximately 5.7 million
      square feet of gross leasable area (&#147;GLA&#148;).</font></p>
  <p align="left"><font size="2" face="serif">Cedar Shopping Centers Partnership,
      L.P. (the &quot;Operating Partnership&quot;) is the entity through which
      the Company conducts substantially all of its business and owns (either
      directly or through subsidiaries) substantially all of its assets. At June
      30, 2005, the Company owned a 93.2% economic interest in, and is the sole
      general partner of, the Operating Partnership. The limited partners&#146; interest
      in the Operating Partnership is adjusted at the end of each reporting period
      to an amount equal to the limited partners&#146; ownership percentage of
      the Operating Partnership&#146;s net equity. Such ownership percentage
      was 6.8% at June 30, 2005. The 1,639,000 Operating Partnership Units (&#147;OP
      Units&#148;) held by limited partners at June 30, 2005 are economically
      equivalent to shares of the Company&#146;s common stock and are convertible
      into shares of the Company&#146;s common stock at the option of the holders
      on a one-to-one basis.</font></p>
  <p align="left"><font size="2" face="serif">As used herein, the &quot;Company&quot; refers
      to Cedar Shopping Centers, Inc. and its subsidiaries on a consolidated
      basis, including the Operating Partnership, or, where the context so requires,
      Cedar Shopping Centers, Inc. only.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b>Note 2.  Basis of Presentation and Consolidation Policy</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The Company&#146;s management has
      prepared the accompanying interim unaudited financial statements pursuant
      to the rules and regulations of the Securities and Exchange Commission
      (&#147;SEC&#148;). Certain information and footnote disclosures normally
      included in financial statements prepared in accordance with accounting
      principles generally accepted in the United States (&quot;GAAP&quot;) may
      have been condensed or omitted pursuant to such rules and regulations.
      The unaudited financial statements as of June 30, 2005 and for the three
      and six months ended June 30, 2005 and 2004 include, in the opinion of
      management, all adjustments, consisting of normal recurring adjustments,
      necessary to present fairly the financial information set forth therein.
      The 2004 financial statements have been reclassified to conform to the
      2005 presentation. The results of operations for the three and six months
      ended June 30, 2005 are not necessarily indicative of the results that
      may be expected for the year ending December 31, 2005. The financial statements
      should be read in conjunction with the Company&#146;s audited financial
      statements and the notes thereto included in the Company&#146;s Form 10-K
      for the year ended December 31, 2004.</font></p>
</div>
<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="p9"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>Notes to Consolidated Financial Statements<br>June 30, 2005<br>(unaudited)</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The consolidated financial statements
      include the accounts and operations of the Company, the Operating Partnership,
      its subsidiaries, and joint venture partnerships in which it participates.
      With respect to its joint ventures, the Company has general partnership
      interests ranging from 20% to 50% and, since the Company (1) is the sole
      general partner and exercises substantial operating control over these
      entities, and (2) has determined, pursuant to The Financial Accounting
      Standards Board (&#147;FASB&#148;) Interpretation No. 46, &#147;Consolidation
      of Variable Interest Entities&#148;, that they are not variable-interest
      entities, such partnerships are included in the consolidated financial
      statements.</font></p>
  <p align="left"><font size="2" face="serif">The accompanying financial statements
      are prepared on the accrual basis in accordance with GAAP, which requires
      management to make estimates and assumptions that affect the disclosure
      of contingent assets and liabilities, the reported amounts of assets and
      liabilities at the date of the financial statements, and the reported amounts
      of revenue and expenses during the periods covered by the financial statements.
      Actual results could differ from these estimates.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b>Note 3.  Stock-Based Compensation</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The Company&#146;s 2004 Stock Incentive
      Plan provides for the granting of incentive stock options, stock appreciation
      rights, restricted shares, performance units and performance shares. The
      maximum number of shares of the Company&#146;s common stock that may be
      issued pursuant to this plan is 850,000, and the maximum number of shares
      that may be subject to grants to any single participant is 250,000. Commencing
      in 2004, as part of annual director compensation, the Company&#146;s Board
      of Directors determined to grant $20,000 of restricted shares annually
      to each of its five independent directors, which shares vest on the third
      anniversary of the grant date. In addition, the Board determined to grant
      in 2004 $50,000 of restricted shares to each of three independent directors
      as consideration for past services rendered, which shares would vest 20%
      on the first anniversary of the grant date, and 40% each on the second
      and third anniversaries of the grant date. Shares issued relating to these
      grants were transferred to a Rabbi Trust for the benefit of the Directors,
      have been classified as treasury stock and deferred compensation plans
      in the Company&#146;s consolidated balance sheet, and are accounted for
      pursuant to Emerging Issues Task Force (&#147;EITF&#148;) No. 97-14, &#147;Accounting
      for Deferred Compensation Arrangements Where Amounts Earned Are Held in
      a Rabbi Trust and Invested&#148;. Amortization of amounts deferred is being
      charged to operations over the vesting periods. Shares held by the Rabbi
      Trust are included in outstanding shares for earnings per share (&#147;EPS&#148;)
      computations.</font></p>
  <p align="left"><font size="2" face="serif">In connection with the Red Lion
      acquisition, the Operating Partnership issued warrants to purchase 83,333
      OP Units to a minority interests partner in the property. Such warrants
      have an exercise price of $13.50 per unit, subject to anti-dilution adjustments,
      are fully vested, and expire in 2012.</font></p>
  <p align="left"><font size="2" face="serif">During 2001, pursuant to the 1998
      Stock Option Plan (the &#147;Option Plan&#148;), the Company granted to
      directors options to purchase an aggregate of 16,665 shares of common stock
      at $10.50 per share, the market value of the Company&#146;s common stock
      on the date of the grant. The options are fully exercisable and expire
      in 2011. In connection with the adoption of the 2004 Stock Incentive Plan,
      the Company agreed that it would not issue any more options under the Option
      Plan.</font></p>
</div>
<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="p10"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>Notes to Consolidated Financial Statements<br>June 30, 2005<br>(unaudited)</b></font></p>
<p align="left"><font size="2" face="serif"><b>Note 4.  Earnings Per Share</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">In accordance with FASB&#146;s
      Statement of Financial Accounting Standards (&#147;SFAS&#148;) No. 128, &#147;Earnings
      Per Share&#148;, basic EPS is computed by dividing net income applicable
      to common shareholders by the average number of common shares outstanding
      for the period. Fully diluted EPS reflects the potential dilution that
      could occur if securities or other contracts to issue common stock were
      exercised or converted into common stock. For the three and six months
      ended June 30, 2005 and 2004, fully diluted EPS was not different than
      basic EPS.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b>Note  5.  Cash in Joint Ventures and Restricted Cash</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">Joint venture partnership agreements
      require, among other things, that the Company maintain separate cash accounts
      for the operation of the joint ventures, and distributions to the general
      and limited (joint venture) partners are strictly controlled. Cash at joint
      ventures amounted to $1,350,000 and $1,193,000 at June 30, 2005 and December
      31, 2004, respectively.</font></p>
  <p align="left"><font size="2" face="serif">The terms of several of the Company&#146;s
      mortgage loans payable require it to deposit certain replacement and other
      reserves with its lenders. This restricted cash is generally available
      for property-level requirements for which the reserve was established.
      This cash is not, however, available to fund other property-level or Company-level
      obligations. Restricted cash amounted to $5,119,000 and $5,912,000 at June
      30, 2005 and December 31, 2004, respectively.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b>Note 6.  Income Taxes</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The Company has elected since 1986
      to be taxed as a REIT under the Internal Revenue Code of 1986, as amended.
      As a REIT, the Company will generally not be subject to federal income
      taxation on its taxable income that is distributed to its shareholders.
      To maintain its status as a REIT, the Company must satisfy certain tests,
      including a requirement that at least 90% of its taxable income be distributed
      to its shareholders.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b>Note 7.  Acquisition Activity</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">On March 2, 2005, the Company acquired
      the Kenley Village and St. James Square shopping centers, both located
      in Hagerstown, MD. These community shopping centers contain approximately
      52,000 and 40,000 square feet of GLA, respectively, and both are anchored
      by Food Lion supermarkets. Kenley Village was built in 1988 and St. James
      Square was built in 2000. The combined purchase price for both properties,
      including closing costs, was approximately $8.3 million.</font></p>
</div>
<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="p11"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>Notes to Consolidated Financial Statements<br>June 30, 2005<br>(unaudited)</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">During the second quarter of 2005,
      the Company acquired 25 primarily drug store-anchored convenience centers
      located in Ohio, Pennsylvania, New York and Connecticut for an aggregate
      consideration, including closing costs, of approximately $89.3 million.
      The total consideration consisted of (1) approximately $37.5 million of
      new 10-year first mortgage financings at a weighted average fixed interest
      rate of approximately 5.2%, (2) the assumption of approximately $11.0 million
      of existing financing at a weighted average fixed interest rate of 7.4%,
      (3) approximately $16.0 million in newly-issued OP Units, and (4) approximately
      $24.8 million funded from the Company&#146;s secured revolving credit facility.</font></p>
  <p align="left"><font size="2" face="serif">The following table summarizes,
      on an unaudited pro forma basis, the combined results of operations of
      the Company for the three and six months ended June 30, 2005 and 2004 as
      though (1) the transactions described above, and (2) all 2004 property
      acquisitions, were completed as of January 1, 2004. This unaudited pro
      forma information does not purport to represent what the actual results
      of operations of the Company would have been had all the above occurred
      as of January 1, 2004, nor does it purport to predict the results of operations
      of future periods.</font></p>
</div>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="center">&nbsp;</td>
<td colspan="5" align="center" valign="bottom"><font size="1" face="serif"><b>Three months ended June 30,</b></font><font size="1" face="serif">&nbsp;</font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="5" align="center" valign="bottom"><font size="1" face="serif"><b>Six months ended June 30,</b></font><font size="1" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="center">&nbsp;</td>
  <td colspan="5" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="5" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="center">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2004</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2004</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="center">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Revenues</font></div></td>
<td align="left" width="2%">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 18,466,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 17,377,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 37,346,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 33,387,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Net
    income applicable to common shareholders</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 1,532,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 2,238,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 3,354,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 3,916,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Per
    common share (basic and diluted)</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.07</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.14</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.16</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.24</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Average
    number of common shares outstanding</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">22,175,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">16,456,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">20,762,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">16,456,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
</table>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">On May 11, 2005, the Company announced
      that it had entered into an agreement to purchase a portfolio of four redevelopment
      properties located in Pennsylvania and Michigan, containing approximately
      430,000 sq. ft. of GLA. The combined purchase price for the properties
      is expected to be approximately $24.0 million, excluding closing costs,
      which the Company expects to finance by (1) assuming a first mortgage loan
      of approximately $4.8 million bearing interest at 8.3% and maturing in
      2009, and (2) funding the approximately $19.2 million balance from its
      secured revolving credit facility.</font></p>
  <p align="left"><font size="2" face="serif">On June 24, 2005, an agreement
      to acquire eight shopping center properties having a total of approximately
      575,000 square feet of GLA (the &#147;RVG Properties&#148;) became non-cancelable.
      Six of the properties are located in Virginia (with approximately 455,000
      of GLA) and two are located in Pennsylvania (with approximately 120,000
      of GLA). The combined purchase price for the properties is expected to
      be approximately $94.8 million, excluding closing costs, which the Company
      expects to finance by (1) assuming approximately $58.6 million of existing
      first mortgage loans bearing interest at an average rate of 6.0% per annum
      and maturing principally in 2013 and 2014, and (2) funding the approximately
      $36.2 million balance from its secured revolving credit facility.</font></p>
</div>
<p align="center"><font size="2" face="serif">11</font></p>
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<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>Notes to Consolidated Financial Statements<br>June 30, 2005<br>(unaudited)</b></font></p>
<p align="left"><font size="2" face="serif"><b>Note 8.  Secured Revolving Credit Facility</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The Company has a $140&nbsp;million
      secured revolving credit facility with Bank of America (as agent) and several
      other banks, pursuant to which the Company has pledged certain of its shopping
      center properties as collateral for borrowings thereunder. The facility
      is expandable to $200 million, subject to certain conditions, and will
      expire in January 2007, subject to a one-year extension option. Borrowings
      under the facility aggregated $43.4 million at June 30, 2005, and bore
      interest at an average rate of 4.8% per annum. Based on covenants and collateral
      in place, the Company was permitted to draw up to $140.0 million, and $96.6
      million remained available as of that date. The Company plans to add additional
      properties, when available, to the collateral pool with the intent of making
      the full facility available. Borrowings under the facility presently incur
      interest at a rate of LIBOR plus 150 basis points (&#147;bps&#148;), subject
      to increases to a maximum of 205 bps depending upon the Company&#146;s
      leverage ratio, as defined. The facility also requires an unused portion
      fee of 15 or 20 bps, depending on the level of outstanding borrowings,
      and limits dividends to 95% of funds from operations, as defined. The Company
      has paid facility and arrangement fees to the banks, plus legal and other
      on-going closing costs as properties are added to the collateral pool,
      aggregating approximately $2.4 million through June 30, 2005.</font></p>
  <p align="left"><font size="2" face="serif">The credit facility is used to
      fund acquisitions, development/redevelopment activities, capital expenditures,
      mortgage repayments, dividend distributions, working capital and other
      general corporate purposes. The facility is subject to customary financial
      covenants, including limits on leverage and other financial statement ratios.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b>Note 9.  Intangible Lease Assets/Liabilities</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">SFAS No. 141, &#147;Business Combinations&#148;,
      and SFAS No. 142, &#147;Goodwill and Other Intangibles&#148;, require that
      management allocate the fair value of real estate acquired to land, building
      and building improvements. In addition, the fair value of in-place leases,
      consisting primarily of below-market rents, is allocated to intangible
      lease liabilities.</font></p>
  <p align="left"><font size="2" face="serif">The fair value of the tangible
      assets of an acquired property is determined by valuing the property as
      if it were vacant, and the &#147;as-if-vacant&#148; value is then allocated
      to land, building and building improvements based on management&#146;s
      determination of the relative fair values of these assets. Management determines
      the as-if-vacant value of a property using methods similar to those used
      by independent appraisers. Factors considered by management in performing
      these analyses include an estimate of carrying costs during the expected
      lease-up periods considering current market conditions and costs to execute
      similar leases. In estimating carrying costs, management includes real
      estate taxes, insurance and other operating expenses, and estimates of
      lost rental revenue during the expected lease-up periods based on its evaluation
      of current market demand. Management also estimates costs to execute similar
      leases, including leasing commissions, tenant improvements, legal and other
      related costs.</font></p>
</div>
<p align="center"><font size="2" face="serif">12</font></p>
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<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>Notes to Consolidated Financial Statements<br>June 30, 2005<br>(unaudited)</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The value of in-place leases is
      measured by the excess of (i)&nbsp;the purchase price paid for a property
      after adjusting existing in-place leases to market rental rates, over (ii)&nbsp;the
      estimated fair value of the property as if vacant. Above-market and below-market
      in-place lease values are recorded based on the present value (using an
      interest rate which reflects the risks associated with the leases acquired)
      of the difference between the contractual amounts to be received and&nbsp;management&#146;s
      estimate of market lease rates, measured over the non-cancelable terms.
      This aggregate value is allocated among above-market and below-market leases,
      tenant relationships, and other intangibles based on management&#146;s
      evaluation of the specific characteristics of each lease.</font></p>
  <p align="left"><font size="2" face="serif">The value of other intangibles
      is amortized to expense, and the above-market and below-market lease values
      are amortized to rental income over the remaining non-cancelable terms
      of the respective leases. If a lease were to be terminated prior to its
      stated expiration, all unamortized amounts relating to that lease would
      be immediately recognized in operations.</font></p>
  <p align="left"><font size="2" face="serif">With respect to the Company&#146;s
      2005 acquisitions concluded during the three months ended March 31, 2005,
      the fair value of in-place leases and other intangibles has been allocated,
      on a preliminary basis, to the applicable intangible asset and liability
      accounts. With respect to acquisitions concluded during the three months
      ended June 30, 2005, no values have yet been assigned to the leases and,
      accordingly, the purchase price allocation is preliminary and subject to
      change. Unamortized intangible lease liabilities of $23,941,000 and $25,227,000
      at June 30, 2005 and December 31, 2004, respectively, relate primarily
      to below-market leases.</font></p>
  <p align="left"><font size="2" face="serif">For the three months ended June
      30, 2005 and 2004, respectively, revenues include $937,000 and $551,000
      relating to the amortization of intangible lease liabilities and, correspondingly,
      depreciation and amortization expense includes $1,128,000 and $609,000
      applicable to amounts allocated to intangible lease assets.For the six
      months ended June 30, 2005 and 2004, respectively, revenues include $1,844,000
      and $976,000 relating to the amortization of intangible lease liabilities
      and, correspondingly, depreciation and amortization expense includes $2,198,000
      and $1,048,000 applicable to amounts allocated to intangible lease assets.</font></p>
</div>
<p align="center"><font face="serif" size="2">13</font></p>
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<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>Notes to Consolidated Financial Statements<br>June 30, 2005<br>(unaudited)</b></font></p>
<p align="left"><font size="2" face="serif"><b>Note 10.  Derivative Financial Instruments</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">During the three months ended June
      30, 2005, an unrealized loss resulting from a change in the fair value
      of derivatives totaled $285,000, of which $273,000 was charged to accumulated
      other comprehensive income (loss) and $12,000 was charged to limited partners&#146; interest.
      During the three months ended June 30, 2004, the Company recognized a net
      unrealized gain of $743,000 relating to the change in fair value of its
      derivative financial instruments. Of that amount, an $801,000 gain was
      recorded in accumulated other comprehensive income (loss), a $22,000 gain
      was credited to limited partners&#146; interest, and an $80,000 charge
      for the ineffective portion thereof was reflected in earnings (included
      in amortization expense).</font></p>
  <p align="left"><font size="2" face="serif">During the six months ended June
      30, 2005, an unrealized gain resulting from a change in the fair value
      of derivatives totaled $83,000; that amount consisted of an $87,000 gain
      credited to accumulated other comprehensive income (loss) and a $4,000
      loss charged to limited partners&#146; interest. During the six months
      ended June 30, 2004, the Company recognized a net unrealized gain of $87,000
      relating to the change in fair value of its derivative financial instruments;
      that amount consisted of a $435,000 gain recorded in accumulated other
      comprehensive income (loss), a $12,000 gain credited to limited partners&#146; interest,
      and a $360,000 charge for the ineffective portion thereof reflected in
      earnings (included in amortization expense).</font></p>
</div>
<p align="left"><font size="2" face="serif"><b>Note 11.  Subsequent Events</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">On July 11, 2005, the Company announced
      that it had entered into a contract to acquire the multi-anchored Trexler
      Mall in Trexlertown, Pennsylvania, containing approximately 340,000 sq.
      ft. of GLA. The acquisition, which involves an operating lease plus a purchase option of $2.5 million, will include (1) cash of $5.5 million, excluding closing costs, which will be funded from the Company's secured revolving credit facility, and (2) the assumption of a $23.0 million first mortgage loan bearing interest at 5.4% per annum and maturing in 2014.</font></p>
  <p align="left"><font size="2" face="serif">On July 13, 2005, an agreement
      to acquire The Shops at Suffolk Downs, located in Revere, MA, became non-cancelable.
      The property is a newly-developed shopping center which, upon completing
      construction, will have approximately 123,000 sq. ft. of GLA. The purchase
      price for the property is expected to be approximately $18.7 million, excluding
      closing costs, and will be funded from the Company&#146;s secured revolving
      credit facility.</font></p>
  <p align="left"><font size="2" face="serif">On July 22, 2005, an agreement
      to acquire the Oakland Mills Shopping Center, located in Columbia, MD,
      became non-cancelable. The property is a community shopping center and
      contains approximately 58,000 sq. ft. of GLA. The purchase price for the
      property is expected to be approximately $8.0 million, excluding closing
      costs, and will be funded from the Company&#146;s secured revolving credit
      facility.</font></p>
  <p align="left"><font size="2" face="serif">On August 1, 2005, the Company&#146;s
      Board of Directors approved a dividend of $0.225 per share with respect
      to its common stock as well as an equal distribution per unit on its outstanding
      OP Units. At the same time, the Board approved a dividend of $0.554688
      per share with respect to the Company&#146;s 8-7/8% Series A Cumulative
      Redeemable Preferred Stock. The distributions will be paid on August 22,
      2005 to shareholders of record on August 12, 2005.</font></p>
</div>
<p align="center"><font size="2" face="serif">14</font></p>
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<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left" width="6%"><font size="2" face="serif"><b>Item 2.</b></font></td>
<td align="left"><font size="2" face="serif"><b>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</b></font></td>
</tr>
</table>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The following discussion should
      be read in conjunction with the Company&#146;s consolidated financial statements
      and related notes thereto included elsewhere in this report.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b>Executive Summary</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The Company is a fully integrated,
      self-administered and self-managed real estate company. At June 30, 2005,
      the Company had a portfolio of 58 properties totaling approximately 5.7
      million square feet of GLA, including 52 wholly-owned properties comprising
      approximately 5.0&nbsp;million square feet and six properties owned through
      joint ventures comprising approximately 700,000 square feet. The portfolio,
      excluding five properties currently under development and/or redevelopment,
      was approximately 95% leased as of that date.</font></p>
  <p align="left"><font size="2" face="serif">The Company, organized as a Maryland
      corporation, has established an umbrella partnership structure through
      the contribution of substantially all of its assets to the Operating Partnership.
      At June 30, 2005, the Company owned 93.2% of the Operating Partnership
      and is its sole general partner; in addition, the Company conducts substantially
      all of its business through the Operating Partnership. OP Units held by
      limited partners are economically equivalent to the Company&#146;s common
      stock and are convertible into the Company&#146;s common stock at the option
      of the holders on a one-to-one basis.</font></p>
  <p align="left"><font size="2" face="serif">The Company derives substantially
      all of its revenues from rents and operating expense reimbursements received
      pursuant to long-term leases. The Company&#146;s operating results therefore
      depend on the ability of its tenants to make the payments required by the
      terms of their leases. The Company focuses its investment activities on
      community shopping and convenience centers, anchored principally by regional
      supermarket and drug store chains. The Company believes, because of the
      need of consumers to purchase food and other staple goods and services
      generally available at its properties, that the nature of its investments
      provide for relatively stable revenue flows even during difficult economic
      times.</font></p>
  <p align="left"><font size="2" face="serif">The Company continues to seek opportunistic
      acquisition opportunities of (1) stabilized properties, and (2) properties
      suited for development and/or redevelopment activities where it can utilize
      its experience in shopping center renovation, expansion, re-leasing and
      re-merchandising to achieve long-term cash flow growth and favorable investment
      returns. The Company generally expects to limit its investment opportunities
      to markets in which it presently operates, if they are consistent with
      its focus, can be effectively controlled and managed by it, have the potential
      for favorable investment returns, and could be expected to contribute to
      increased shareholder value.</font></p>
</div>
<p align="center"><font face="serif" size="2">15</font></p>
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<p align="left"><font size="2" face="serif"><b>Summary of Critical Accounting Policies</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The preparation of the consolidated
      financial statements in conformity with GAAP requires the Company to make
      estimates and judgments that affect the reported amounts of assets and
      liabilities, revenues and expenses, and related disclosures of contingent
      assets and liabilities. On an ongoing basis, management evaluates its estimates,
      including those related to revenue recognition and the allowance for doubtful
      accounts receivable, real estate investments and purchase price allocations
      related thereto, asset impairment, and derivatives used to hedge interest-rate
      risks. These accounting policies are further described in the notes to
      the consolidated financial statements. Management&#146;s estimates are
      based on information that is currently available and on various other assumptions
      management believes to be reasonable under the circumstances. Actual results
      could differ from those estimates and those estimates could be different
      under varying assumptions or conditions.</font></p>
  <p align="left"><font size="2" face="serif">The Company has identified the
      following critical accounting policies, the application of which requires
      significant judgments and estimates:</font></p>
</div>
<p align="left"><font size="2" face="serif"><b><i>Revenue Recognition</i></b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">Rental income with scheduled rent
      increases is recognized using the straight-line method over the respective
      terms of the leases. The aggregate excess of rental revenue recognized
      on a straight-line basis over base rents under applicable lease provisions
      is included in rents and other receivables on the consolidated balance
      sheet. Leases generally contain provisions under which the tenants reimburse
      the Company for a portion of property operating expenses and real estate
      taxes incurred. In addition, certain operating leases contain contingent
      rent provisions under which tenants are required to pay a percentage of
      their sales in excess of a specified amount as additional rent. The Company
      defers recognition of contingent rental income until those specified targets
      are met.</font></p>
  <p align="left"><font size="2" face="serif">The Company must make estimates
      as to the collectibility of its accounts receivable related to base rent,
      straight-line rent, expense reimbursements and other revenues. Management
      analyzes accounts receivable and historical bad debts, tenant creditworthiness,
      current economic trends, and changes in tenants&#146; payment patterns
      when evaluating the adequacy of the allowance for doubtful accounts receivable.
      These estimates have a direct impact on net income, because a higher bad
      debt allowance would result in lower net income.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b><i>Real Estate Investments</i></b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">Real estate investments are carried
      at cost less accumulated depreciation. The provision for depreciation is
      calculated using the straight-line method based on the estimated useful
      lives of the assets. Expenditures for maintenance, repairs and betterments
      that do not materially prolong the normal useful life of an asset are charged
      to operations as incurred. Expenditures for betterments that substantially
      extend the useful lives of the properties are capitalized.</font></p>
  <p align="left"><font size="2" face="serif">The Company is required to make
      subjective estimates as to the useful lives of its properties for purposes
      of determining the amount of depreciation to reflect on an annual basis.
      These assessments have a direct impact on net income. A shorter estimate
      of the useful life of an investment would have the effect of increasing
      depreciation expense and lowering net income, whereas a longer estimate
      of the useful life of the investment would have the effect of reducing
      depreciation expense and increasing net income.</font></p>
</div>
<p align="center"><font size="2" face="serif">16</font></p>
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<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The Company applies Statement of
      Accounting Standards (&#147;SFAS&#148;) No. 141, &#147;Business Combinations&#148;,
      and SFAS No. 142, &#147;Goodwill and Other Intangibles&#148;, in valuing
      real estate acquisitions. In connection therewith, the fair value of real
      estate acquired is allocated to land, building and building improvements.
      The fair value of in-place leases, consisting primarily of below-market
      rents is allocated to intangible lease liabilities.</font></p>
  <p align="left"><font size="2" face="serif">The fair value of the tangible
      assets of an acquired property is determined by valuing the property as
      if it were vacant, and the &#147;as-if-vacant&#148; value is then allocated
      to land, building and building improvements based on management&#146;s
      determination of the relative fair values of these assets. Management determines
      the as-if-vacant value of a property using methods similar to those used
      by independent appraisers. Factors considered by management in performing
      these analyses include an estimate of carrying costs during the expected
      lease-up periods considering current market conditions and costs to execute
      similar leases. In estimating carrying costs, management includes real
      estate taxes, insurance and other operating expenses, and estimates of
      lost rental revenue during the expected lease-up periods based on its evaluation
      of current market demand. Management also estimates costs to execute similar
      leases, including leasing commissions, tenant improvements, legal and other
      related costs.</font></p>
  <p align="left"><font size="2" face="serif">The value of in-place leases is
      measured by the excess of (i)&nbsp;the purchase price paid for a property
      after adjusting existing in-place leases to market rental rates, over (ii)&nbsp;the
      estimated fair value of the property as if vacant. Above-market and below-market
      in-place lease values are recorded based on the present value (using an
      interest rate which reflects the risks associated with the leases acquired)
      of the difference between the contractual amounts to be received and&nbsp;management&#146;s
      estimate of market lease rates, measured over the non-cancelable terms.
      This aggregate value is allocated among above-market and below-market leases,
      tenant relationships, and other intangibles based on management&#146;s
      evaluation of the specific characteristics of each lease.</font></p>
  <p align="left"><font size="2" face="serif">The value of other intangibles
      is amortized to expense, and the above-market and below-market lease values
      are amortized to rental income over the remaining non-cancelable terms
      of the respective leases. If a lease were to be terminated prior to its
      stated expiration, all unamortized amounts relating to that lease would
      be immediately recognized in operations.</font></p>
  <p align="left"><font size="2" face="serif">The Company applies SFAS No.&nbsp;144, &quot;Accounting
      for the Impairment or Disposal of Long-Lived Assets&quot;, to recognize
      and measure impairment of long-lived assets. Management reviews each real
      estate investment for impairment whenever events or circumstances indicate
      that the carrying value of a real estate investment may not be recoverable.
      The review of recoverability is based on an estimate of the future cash
      flows that are expected to result from the real estate investment&#146;s
      use and eventual disposition. These cash flows consider factors such as
      expected future operating income, trends and prospects, as well as the
      effects of leasing demand, competition and other factors. If an impairment
      event exists due to the inability to recover the carrying value of a real
      estate investment, an impairment loss is recorded to the extent that the
      carrying value exceeds estimated fair market value.&nbsp;&nbsp;&nbsp;Real
      estate investments held for sale are carried at the lower of carrying amount
      or estimated fair value, less cost to sell. Depreciation and amortization
      are suspended during the period held for sale. &nbsp;Management is required
      to make subjective assessments as to whether there are impairments in the
      value of its real estate properties. These assessments have a direct impact
      on net income, because an impairment loss is recognized in the period that
      the assessment is made.</font></p>
</div>
<p align="center"><font size="2" face="serif">17</font></p>
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<p align="left"><font size="2" face="serif"><b>Results of Operations</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif"><b>Acquisitions</b>. Differences
      in results of operations between the second quarters and first six months
      of 2005 and 2004, respectively, were driven largely by acquisition activity.
      During the period January 1, 2004 through June 30, 2005, the Company acquired
      36 shopping centers aggregating approximately 2.3 million square feet of
      GLA for a total cost of approximately $258 million. Income before minority
      interests, limited partners&#146; interest and preferred distribution requirements
      increased from $2.4 million in the second quarter of 2004 to $3.9 million
      in the second quarter of 2005. Income before minority interests, limited
      partners&#146; interest and preferred distribution requirements increased
      from $3.9 million in the first six months of 2004 to $6.8 million in the
      first six months of 2005.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b><u>Comparison of the quarter ended June 30, 2005 to the quarter ended June 30, 2004</u></b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="center">&nbsp;</td>
<td colspan="5" align="center" valign="bottom"><font size="1" face="serif"><b>Three months ended June 30,</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font><font size="1" face="serif"><b>Increase<br>
  (decrease)</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font><font size="1" face="serif"><b>Percentage<br>
  change</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font><font size="1" face="serif"><b>Acquisitions</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font><font size="1" face="serif"><b>Properties<br>
held in<br>
both years</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="center">&nbsp;</td>
  <td colspan="5" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="center">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2004</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="center">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Rents
    and expense recoveries</font></div></td>
<td align="left" width="2%">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 16,903,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 12,514,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 4,389,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="right" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">35</font></td>
<td width="2%" align="left" valign="bottom"><font size="2" face="serif">%</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 4,926,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> (537,000</font></td>
<td width="2%" align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Property
    expenses</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">4,460,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">3,901,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">559,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">14</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">%</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">1,494,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">(935,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Depreciation
    and amortization</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">4,188,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">2,592,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">1,596,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">62</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">%</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">1,476,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">120,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">General
    and administrative</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">1,197,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">985,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">212,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">22</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">%</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="center" valign="bottom"><font size="2" face="serif">n/a</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="center" valign="bottom"><font size="2" face="serif">n/a</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Non-operating
    income and expense (1)</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">3,347,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">2,790,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">557,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">20</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">%</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="center" valign="bottom"><font size="2" face="serif">n/a</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="center" valign="bottom"><font size="2" face="serif">n/a</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top" bgcolor="#ffffff">
<td width="3%" align="left"><font size="2" face="serif">(1)</font></td>
<td align="left"><font size="2" face="serif">Non-operating income and expense consists principally of interest expense and amortization of deferred financing costs.</font></td>
</tr>
</table>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif"><b>Properties held in both years</b>.
      The Company held 25 properties throughout the second quarters of both 2005
      and 2004. Overall rents and expense recoveries decreased as a result of
      (1) the timing of percentage rent collections ($178,000), (2) a decrease
      in tenant reimbursements as a result of an overall decrease in property
      expenses ($281,000), and (3) a decrease in the amortization of intangible
      lease liabilities ($65,000). These decreases were offset in part by an
      increase in rents resulting from lease commencements at the development
      properties ($191,000). Property expenses decreased primarily as a result
      of decreases in (1) bad debt expense ($538,000), (2) professional and other
      fees ($121,000), and (3) various repairs and maintenance work ($295,000).</font></p>
  <p align="left"><font size="2" face="serif"><b>Non-operating income and expense.</b> Interest
      expense increased as a result of a higher level of borrowing generally
      used to finance acquisition properties, and higher short-term interest
      rates.</font></p>
  <p align="left"><font size="2" face="serif"><b>General and administrative expenses.</b> General
      and administrative expenses increased primarily as a result of the Company&#146;s
      growth throughout 2004 and continuing into 2005.</font></p>
</div>
<p align="center"><font size="2" face="serif">18</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p19"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="left"><font size="2" face="serif"><b><u>Comparison of the six months ended June 30, 2005 to the six months ended June 30, 2004</u></b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td colspan="5" align="center" valign="bottom"><font size="1" face="serif"><b>Six months ended June 30,</b></font><font size="1" face="serif">&nbsp;</font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font><font size="1" face="serif"><b>Increase<br>
  (decrease)</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font><font size="1" face="serif"><b>Percentage<br>
  change</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font><font size="1" face="serif"><b>Acquisitions</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="3" align="center" valign="bottom"><font size="1" face="serif"><b>Properties<br>
  held
    in<br>
    both years</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td colspan="5" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2004</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Rents
    and expense recoveries</font></div></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 33,425,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 23,683,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 9,742,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="right" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">41</font></td>
<td width="2%" align="left" valign="bottom"><font size="2" face="serif">%</font></td>
<td width="1%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 9,696,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 46,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Property
    expenses</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">9,962,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">7,741,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">2,221,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">29</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">%</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">3,060,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">(839,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Depreciation
    and amortization</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">7,931,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">5,067,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">2,864,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">57</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">%</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">2,578,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">286,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">General
    and administrative</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">2,166,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">1,627,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">539,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">33</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">%</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="center" valign="bottom"><font size="2" face="serif">n/a</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="center" valign="bottom"><font size="2" face="serif">n/a</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Non-operating
    income and expense (1)</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">6,685,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">5,558,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">1,127,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">20</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">%</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="center" valign="bottom"><font size="2" face="serif">n/a</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="center" valign="bottom"><font size="2" face="serif">n/a</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top" bgcolor="#ffffff">
<td width="3%" align="left"><font size="2" face="serif">(1)</font></td>
<td align="left"><font size="2" face="serif">Non-operating income and expense consists principally of interest expense and amortization of deferred financing costs.</font></td>
</tr>
</table>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif"><b>Properties held in both years</b>.
      The Company held 22 properties throughout the first half of both 2005 and
      2004. Overall rents and expense recoveries increased as a result of new
      lease commencements at the development properties ($310,000). This increase
      was partially offset by (1) the timing of collection of percentage rents
      ($129,000) and (2) a decrease in the amortization of intangible lease liabilities
      ($138,000). Property expenses decreased primarily as a result of decreases
      in (1) professional and other fees ($138,000), (2) various repairs and
      maintenance work ($332,000), and (3) bad debt expense ($320,000).</font></p>
  <p align="left"><font size="2" face="serif"><b>Non-operating income and expense.</b> Interest
      expense increased as a result of a higher level of borrowing generally
      used to finance acquisition properties, and higher short-term interest
      rates.</font></p>
  <p align="left"><font size="2" face="serif"><b>General and administrative expenses.</b> General
      and administrative expenses increased primarily as a result of the Company&#146;s
      growth throughout 2004 and continuing into 2005.</font></p>
</div>
  <p align="left"><font size="2" face="serif"><b>Liquidity and Capital Resources</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The Company funds operating expenses
      and other short-term liquidity requirements, including debt service, tenant
      improvements, leasing commissions, and preferred and common dividend distributions,
      primarily from operating cash flows; if needed, the Company may also use
      its secured revolving credit facility for these purposes. The Company expects
      to fund long-term liquidity requirements for property acquisitions, development
      and/or redevelopment costs, capital improvements, and maturing debt initially
      with the secured revolving credit facility and property-specific construction
      financing, and ultimately through a combination of issuing and/or assuming
      additional mortgage debt, the sale of equity securities, and the issuance
      of additional OP Units.</font></p>
</div>
<p align="center"><font size="2" face="serif">19</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p20"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The Company has a $140&nbsp;million
      syndicated secured revolving credit facility with Bank of America (as agent)
      and several other banks, pursuant to which the Company has pledged certain
      of its shopping center properties as collateral for borrowings thereunder;
      the facility is expandable to $200 million, subject to certain conditions.
      As of June 30, 2005, based on covenants and collateral in place, the Company
      was permitted to draw up to $140.0 million, of which approximately $96.6
      million remained available as of that date. The Company plans to add additional
      properties, when available, to the collateral pool with the intent of making
      the full facility available. Borrowings under the facility presently bear
      interest at a rate of LIBOR plus 150 bps, an average rate of 4.8% as of
      June 30, 2005, and are subject to increases to a maximum of 205 bps depending
      upon the Company&#146;s leverage ratio, as defined. The credit facility
      may be used to fund acquisitions, development and redevelopment activities,
      capital expenditures, mortgage repayments, dividend distributions, working
      capital and other general corporate purposes. The facility is subject to
      customary financial covenants, including limits on leverage and other financial
      statement ratios.</font></p>
  <p align="left"><font size="2" face="serif">At June 30, 2005, the Company&#146;s
      financial liquidity was provided by $7.1 million in cash and cash equivalents
      and by the $96.6 million availability under the secured revolving credit
      facility. Debt includes mortgage loans payable at June 30, 2005 consisting
      of fixed-rate notes totaling $210.3 million and floating rate debt totaling
      $78.2 million, with a combined weighted average interest rate of 5.9%,
      and maturing at various dates through 2020. In April 2005, the Company
      concluded the sales of 1,200,000 shares of its 8-7/8% Series A Cumulative
      Redeemable Preferred Stock at a price of $26.00 per share and 2,990,000
      shares of its common stock (including 390,000 shares representing the exercise
      by the underwriters of their over-allotment option) at a price of $13.80
      per share. The net proceeds of the offerings, after underwriting fees and
      offering costs, amounted to approximately $70.5 million, substantially
      all of which were used to repay amounts outstanding under the Company&#146;s
      secured revolving credit facility.</font></p>
  <p align="left"><font size="2" face="serif">Portions of the Company&#146;s
      assets are owned through joint venture partnership arrangements which require,
      among other things, that the Company maintain separate cash accounts for
      the operations of the respective properties. In addition, the terms of
      certain of the Company&#146;s mortgage agreements require it to deposit
      replacement and other reserves with its lenders. These joint venture and
      reserve accounts are separately classified on the Company&#146;s balance
      sheet as restricted cash, and are available for the specific purpose for
      which they were established; they are not available to fund other Company
      obligations.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b><i>Contractual obligations and commercial commitments</i></b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The following table sets forth
      the Company&#146;s significant debt repayment and operating lease obligations
      at June 30, 2005 (in thousands):</font></p>
</div>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td colspan="20" align="center" valign="bottom"><font size="1" face="serif"><b>Maturity Date</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td colspan="20" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2006</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2007</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2008</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2009</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Thereafter</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Total</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Mortgage
    loans payable</font></div></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 1,610</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 3,805</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 13,812</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 63,408</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 2,718</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 159,764</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif"> 245,117</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Secured
    revolving credit facility</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">&#151;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">&#151;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">43,400</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">&#151;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">&#151;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">&#151;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">43,400</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Operating
    lease obligations</font></div></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">172</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">349</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">354</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">360</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">366</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">7,959</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="8%" align="right" valign="bottom"><font size="2" face="serif">9,560</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Total</font></div>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
  <td align="right" valign="bottom"><font size="2" face="serif"> 1,782</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
  <td align="right" valign="bottom"><font size="2" face="serif"> 4,154</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
  <td align="right" valign="bottom"><font size="2" face="serif"> 57,566</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
  <td align="right" valign="bottom"><font size="2" face="serif"> 63,768</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
  <td align="right" valign="bottom"><font size="2" face="serif"> 3,084</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
  <td align="right" valign="bottom"><font size="2" face="serif"> 167,723</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
  <td align="right" valign="bottom"><font size="2" face="serif"> 298,077</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</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>
<a name="p21"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">In addition, as of June 30, 2005,
      the Company plans to spend approximately $40 million, principally by June
      2006, in connection with its development and redevelopment activities.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b>Net Cash Flows</b></font></p>
<p align="left"><font size="2" face="serif"><b><i>Operating Activities</i></b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">Net cash flows provided by operating
      activities amounted to $8.4 million during the first six months of 2005
      compared to $7.6 million during the first six months of 2004. Such increase
      in operating cash flows is primarily due to the Company&#146;s property
      acquisition program.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b><i>Investing Activities</i></b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">Net cash flows used in investing
      activities increased to $93.2 million during the first six months of 2005
      from $53.8 million during the first six months of 2004. Cash flows used
      in investing activities are the result of an active acquisition program
      during both periods. The Company acquired 27 shopping and convenience centers
      during the first six months of 2005 and acquired six shopping centers during
      the first six months of 2004.</font></p>
</div>
<p align="left"><font size="2" face="serif"><b><i>Financing Activities</i></b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">Net cash flows provided by financing
      activities increased to $83.5 million during the first six months of 2005
      as compared to $43.6 million during the first six months of 2004. During
      the first six months of 2005, the net amount included $70.5 million in
      net proceeds from public offerings and $53.4 million in proceeds from mortgage
      financings, offset by net repayments of $24.8 million under the Company&#146;s
      secured revolving credit facility, $12.9 million in distributions to common
      and preferred shareholders and OP Unit holders, and $2.7 million in other
      uses. During the first six months of 2004, the net amount included $58.0
      million in net borrowings under the Company&#146;s secured revolving credit
      facility, offset by $6.7 million in mortgage repayments, net, $6.5 million
      in distributions to common shareholders and OP Unit holders, and $1.2 million
      in other net sources and uses.</font></p>
</div>
<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="p22"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="left"><font size="2" face="serif"><b>Funds From Operations</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">Funds From Operations (&#147;FFO&#148;)
      is a widely-recognized measure of REIT performance. The Company computes
      FFO in accordance with the &quot;White Paper&quot; on FFO published by
      the National Association of Real Estate Investment Trusts (&quot;NAREIT&quot;),
      which defines FFO as net income applicable to common shareholders (determined
      in accordance with GAAP), excluding gains or losses from debt restructurings
      and sales of properties, plus depreciation and amortization, and after
      adjustments for unconsolidated partnerships and joint ventures. Adjustments
      for unconsolidated partnerships and joint ventures are computed to reflect
      FFO on the same basis. In computing FFO, the Company does not add back
      to net income applicable to common shareholders the amortization of costs
      incurred in connection with its financing or hedging activities, or depreciation
      of non-real estate assets, but does add back to net income applicable to
      common shareholders those items that are defined as &#147;extraordinary&#148; under
      GAAP. FFO does not represent cash generated from operating activities in
      accordance with GAAP and should not be considered as an alternative to
      net income applicable to common shareholders (determined in accordance
      with GAAP) as an indication of the Company&#146;s financial performance
      or to cash flow from operating activities (determined in accordance with
      GAAP) as a measure of liquidity. Since the NAREIT White Paper only provides
      guidelines for computing FFO, the computation of FFO may vary from one
      company to another. FFO is not necessarily indicative of cash available
      to fund ongoing cash needs. The following table sets forth the Company&#146;s
      calculations of FFO for the three and six months ended June 30, 2005 and
      2004:</font></p>
</div>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td colspan="5" align="center" valign="bottom"><font size="1" face="serif"><b>Three months ended June 30,</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="5" align="center" valign="bottom"><font size="1" face="serif"><b>Six months ended June 30,</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td colspan="5" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="5" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2004</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2005</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>2004</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><hr size="1" noshade>
    </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Net
    income applicable to common shareholders</font></div></td>
<td align="left" width="2%">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 1,466,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 1,903,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 2,820,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
<td width="1%" align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 3,246,000</font></td>
<td width="2%" align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Add
    (deduct):</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Depreciation
    and amortization</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">4,171,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">2,506,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">7,901,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">4,698,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Limited
    partners&#146; interest</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">82,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">53,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">114,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">89,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Minority
    interests</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">353,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">416,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">643,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">584,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Minority
    interests&#146; share of FFO</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(588,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(625,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(1,124,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">(995,000</font></td>
<td align="left" valign="bottom"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade></td>
  <td align="right" valign="bottom"><hr size="1" noshade></td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Funds
    from operations</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 5,484,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 4,253,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 10,354,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 7,622,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">FFO
    per common share (assuming conversion of OP Units)</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.23</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.25</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.48</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">$</font></td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif"> 0.45</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Average
    number of common shares:</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Shares
    used in determination of earnings per share</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">22,175,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">16,456,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">20,763,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">16,456,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Additional
    shares assuming conversion of OP Units</font></div></td>
<td align="left">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">1,230,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">454,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">842,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td width="10%" align="right" valign="bottom"><font size="2" face="serif">447,000</font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">Shares
    used in determination of FFO per share</font></div></td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom"><font size="2" face="serif">23,405,000</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom"><font size="2" face="serif">16,910,000</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom"><font size="2" face="serif">21,605,000</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="right" valign="bottom"><font size="2" face="serif">16,903,000</font></td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
  <td align="left" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="right" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left" valign="bottom">&nbsp;</td>
</tr>
</table>
<p align="left"><font size="2" face="serif"><b>Inflation</b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">Low to moderate levels of inflation
      during the past several years have favorably impacted the Company&#146;s
      operations by stabilizing operating expenses. At the same time, low inflation
      has had the indirect effect of reducing the Company&#146;s ability to increase
      tenant rents. However, the Company&#146;s properties have tenants whose
      leases include expense reimbursements and other provisions to minimize
      the effect of inflation.</font></p>
</div>
<p align="center"><font face="serif" size="2">22</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p23"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<a name="p23a"></a>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left" width="6%"><font size="2" face="serif"><b>Item 3.</b></font></td>
<td align="left"><font size="2" face="serif"><b>Quantitative and Qualitative Disclosures About Market Risk</b></font></td>
</tr>
</table>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The primary market risk facing
      the Company is interest rate risk on its mortgage loans payable and secured
      revolving credit facility. The Company will, when advantageous, hedge its
      interest rate risk using derivative financial instruments. The Company
      is not subject to foreign currency risk. The Company&#146;s interest rate
      risk management objectives are to limit the impact of interest rate changes
      on operations and cash flows, and to lower its overall borrowing costs.
      To achieve these objectives, the Company may borrow at fixed rates and
      may enter into derivative financial instruments such as interest rate swaps,
      caps and/or treasury locks in order to mitigate its interest rate risk
      on a related variable-rate financial instrument. At June 30, 2005, the
      Company had swap agreements in place applicable to approximately $14.9
      million of variable rate mortgages. The Company does not enter into derivative
      or interest rate transactions for speculative purposes.</font></p>
  <p align="left"><font size="2" face="serif">The Company is exposed to interest
      rate changes primarily through (i) the secured floating-rate revolving
      credit facility used to maintain liquidity, fund capital expenditures and
      expand its real estate investment portfolio, and (ii) floating rate acquisition
      and construction financing. At June 30, 2005, long-term debt consisted
      of fixed- and variable-rate mortgage loans payable, and the variable-rate
      secured revolving credit facility. The average interest rate on the $210.3
      million of fixed rate indebtedness outstanding was 6.2%, with maturities
      at various dates through 2020. The average interest rate on the Company&#146;s
      $78.2 million of variable-rate debt was 5.0%, with maturities at various
      dates through 2008. At June 30, 2005, the Company&#146;s pro rata share
      of variable rate debt amounted to $75.7 million. Based upon this amount,
      if interest rates either increase or decrease by 1%, the Company&#146;s
      net income would decrease or increase respectively by approximately $757,000
      per annum.</font></p>
</div>
<a name="p23b"></a>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left" width="6%"><font size="2" face="serif"><b>Item 4.</b></font></td>
<td align="left"><font size="2" face="serif"><b>Controls and Procedures</b></font></td>
</tr>
</table>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The Company maintains disclosure
      controls and procedures and internal controls designed to ensure that information
      required to be disclosed in its filings under the Securities Exchange Act
      of 1934 is reported within the time periods specified in the SEC&#146;s
      rules and forms. In this regard, the Company has formed a Disclosure Committee
      currently comprised of several of the Company&#146;s executive officers
      as well as certain other employees with knowledge of information that may
      be considered in the SEC reporting process. The Committee has responsibility
      for the development and assessment of the financial and non-financial information
      to be included in the reports filed with the SEC, and assists the Company&#146;s
      Chief Executive Officer and Chief Financial Officer in connection with
      their certifications contained in the Company&#146;s SEC filings. The Committee
      meets regularly and reports to the Audit Committee on a quarterly or more
      frequent basis. The Company&#146;s principal executive and financial officers
      have evaluated its disclosure controls and procedures as of June 30, 2005,
      and have determined that such disclosure controls and procedures are effective.</font></p>
  <p align="left"><font size="2" face="serif">During the three months ended June
      30, 2005, there have been no changes in the internal controls over financial
      reporting or in other factors that have materially affected, or are reasonably
      likely to materially affect, these internal controls over financial reporting.</font></p>
</div>
<p align="center"><font size="2" face="serif">23</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p24"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<a name="p24a"></a>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td align="left" width="6%"><font size="2" face="serif"><b>Part II</b></font></td>
<td align="left"><font size="2" face="serif"><b>Other Information</b></font></td>
</tr>
<tr valign="top">
<td width="6%">&nbsp;</td>
<td>&nbsp;</td> </tr>
<tr valign="top">
<td width="6%" align="left"><font size="2" face="serif"><b>Item 4.</b></font></td>
<td align="left"><font size="2" face="serif"><b>Submission of Matters to a Vote of Security Holders</b></font></td>
</tr>
</table>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The Company held its annual meeting
      of stockholders on May 20, 2005, at which the following matters were voted
      upon:</font></p>
</div>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">1.</font></td>
<td>
<font size="2" face="serif">The election of seven directors.</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">2.</font></td>
<td>
<font size="2" face="serif">The approval of the appointment of Ernst &amp; Young LLP as the Company&#146;s independent registered public accounting firm for the fiscal year ending December 31, 2005.</font></td>
</tr>
</table>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">The results of the vote were as
      follows:</font></p>
</div>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top" bgcolor="#FFFFFF">
<td align="left" width="2%">&nbsp;</td>
<td width="47%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="11%" align="center" valign="bottom"><font size="2" face="serif">For</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="9%" align="center" valign="bottom"><font size="2" face="serif">Withheld/<br>
Against</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="7%" align="center" valign="bottom"><font size="2" face="serif">Abstain</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="right">&nbsp;</td>
<td width="9%" align="center" valign="bottom"><font size="2" face="serif">Broker<br>Non-Votes</font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">1. Directors:</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</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>
<td align="right">&nbsp;</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="#ffffff">
<td align="left">&nbsp;</td>
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">James
    J. Burns</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">21,202,455</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">170,472</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>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left">&nbsp;</td>
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">J.A.M.H
    der Kinderen</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">21,091,278</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">281,649</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>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left">&nbsp;</td>
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Richard
    Homburg</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">21,115,435</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">257,492</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>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left">&nbsp;</td>
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Everett
    B. Miller, III</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">21,202,172</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">170,755</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>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left">&nbsp;</td>
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Leo
    S. Ullman</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">21,177,598</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">195,329</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>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left">&nbsp;</td>
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Brenda
    J. Walker</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">21,177,798</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">195,129</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>
</tr>
<tr valign="top" bgcolor="#ffffff">
<td align="left">&nbsp;</td>
<td align="left"><div style="margin-left: 6%;  text-indent: -3%"><font size="2" face="serif">Roger
    M. Widmann</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">21,201,605</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">171,322</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>
</tr>
<tr valign="top">
<td align="left">&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">&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>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left">&nbsp;</td>
<td align="left"><div style="margin-left: 3%; text-indent: -3%"><font size="2" face="serif">2.
    Independent registered public accounting firm</font></div></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">21,250,313</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">112,864</font></td>
<td align="left">&nbsp;</td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">9,750</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>
</tr>
</table>
<a name="p24b"></a>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left" width="9%"><font size="2" face="serif"><b>Item 6.</b></font></td>
<td align="left"><font size="2" face="serif"><b>Exhibits</b></font></td>
</tr>
<tr valign="top">
<td width="9%">&nbsp;</td>
<td>&nbsp;</td> </tr>
<tr valign="top">
<td width="9%" align="left"><font size="2" face="serif">Exhibit 31</font></td>
<td align="left"><font size="2" face="serif">Section 302 Certifications</font></td>
</tr>
<tr valign="top">
<td width="9%" align="left"><font size="2" face="serif">Exhibit 32</font></td>
<td align="left"><font size="2" face="serif">Section 906 Certifications</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">24</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p25"></a>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="center"><font size="2" face="serif"><b><u>SIGNATURES</u></b></font></p>
<div style="text-indent: 3%">
  <p align="left"><font size="2" face="serif">Pursuant to the requirements of
      Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
      has duly caused this report to be signed on its behalf by the undersigned
      thereunto duly authorized.</font></p>
</div>
<table width="100%" border="0" align="center" cellpadding="0" cellspacing="0">
<tr valign="top"> <td width="50%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">CEDAR SHOPPING CENTERS, INC.</font></td> </tr>
<tr valign="top"> <td width="50%" 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"> <td width="50%" 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">
<td align="left" width="50%"><font size="2" face="serif"><u>/s/ LEO S. ULLMAN</u></font></td>
<td align="left"><u><font size="2" face="serif">/s/ THOMAS J. O&#146;KEEFFE</font></u></td>
</tr>
<tr valign="top">
<td width="50%" align="left"><font size="2" face="serif">Leo S. Ullman</font></td>
<td align="left"><font size="2" face="serif">Thomas J. O&#146;Keeffe</font></td>
</tr>
<tr valign="top">
<td width="50%" align="left"><font size="2" face="serif">Chairman of the Board, Chief</font></td>
<td align="left"><font size="2" face="serif">Chief Financial Officer</font></td>
</tr>
<tr valign="top">
<td width="50%" align="left"><font size="2" face="serif">Executive Officer and President</font></td>
<td align="left"><font size="2" face="serif">(Principal financial officer)</font></td>
</tr>
<tr valign="top">
<td width="50%" align="left"><font size="2" face="serif">(Principal executive officer)</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">August 4, 2005</font></p>
<p align="center"><font face="serif" size="2">25</font></p>
<hr noshade align="center" width="100%" size="2">
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<DOCUMENT>
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<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<html>
<head><title>
Prepared and filed by St Ives Financial
</title>
</head>
<body bgcolor="#FFFFFF">
<div style="page-break-before:always"></div>
<page>
<p><a href="#contents"><font size="2">Back to Index</font></a></p>
<p align="right"><font size="2" face="serif">Exhibit 31.1</font></p>
<p align="center"><font size="2" face="serif"><u>CERTIFICATION</u></font></p>
<p align="left"><font size="2" face="serif">I, Leo S. Ullman, Chief Executive Officer of Cedar Shopping Centers, Inc. (the &quot;Company&quot;), certify that:</font></p>
<p align="left"><font size="2" face="serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I have reviewed this Quarterly Report on Form 10-Q of the Company;</font></p>
<p align="left"><font size="2" face="serif">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</font></p>
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<p align="left"><font size="2" face="serif">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant&#146;s auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting  which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</font></p>
<p align="left"><font size="2" face="serif">Date: August 4, 2005</font></p>
<p align="left"><font size="2" face="serif"><u>/s/ LEO S. ULLMAN<br></u>Leo S. Ullman, Chief Executive Officer</font></p>
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<TYPE>EX-31.2
<SEQUENCE>5
<FILENAME>p408130ex31_2.htm
<DESCRIPTION>EXHIBIT 31.2
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<p align="right"><font size="2" face="serif">Exhibit 31.2</font></p>
<p align="center"><font size="2" face="serif"><u>CERTIFICATION</u></font></p>
<p align="left"><font size="2" face="serif">I, Thomas J. O&#146;Keeffe, Chief Financial Officer of Cedar Shopping Centers, Inc. (the &quot;Company&quot;), certify that:</font></p>
<p align="left"><font size="2" face="serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I have reviewed this Quarterly Report on Form 10-Q of the Company;</font></p>
<p align="left"><font size="2" face="serif">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</font></p>
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<p align="left"><font size="2" face="serif">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant&#146;s auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting  which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</font></p>
<p align="left"><font size="2" face="serif">Date: August 4, 2005</font></p>
<p align="left"><font size="2" face="serif"><u>/s/ THOMAS J. O&#146;KEEFFE<br></u>Thomas J. O&#146;Keeffe, Chief Financial Officer</font></p>
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<TYPE>EX-32.1
<SEQUENCE>6
<FILENAME>p408130ex32_1.htm
<DESCRIPTION>EXHIBIT 32.1
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<p align="right"><font size="2" face="serif">Exhibit 32.1</font></p>
<p align="center"><font size="2" face="serif"><u>CERTIFICATION</u></font></p>
<p align="left"><font size="2" face="serif">I, Leo S. Ullman, Chief Executive Officer of Cedar Shopping Centers, Inc. (the &quot;Company&quot;), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, do hereby certify as follows:</font></p>
<p align="left"><font size="2" face="serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2005 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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The information contained in such Form 10-Q 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">IN WITNESS WHEREOF, I have executed this Certification this 4<sup>th</sup> day of August, 2005.</font></p>
<p align="left"><font size="2" face="serif"><u>/s/ LEO S. ULLMAN<br></u>Leo S. Ullman, Chief Executive Officer</font></p>
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<TYPE>EX-32.2
<SEQUENCE>7
<FILENAME>p408130ex32_2.htm
<DESCRIPTION>EXHIBIT 32.2
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<p align="right"><font size="2" face="serif">Exhibit 32.2</font></p>
<p align="center"><font size="2" face="serif"><u>CERTIFICATION</u></font></p>
<p align="left"><font size="2" face="serif">I, Thomas J. O&#146;Keeffe, Chief Financial Officer of Cedar Shopping Centers, Inc. (the &quot;Company&quot;), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, do hereby certify as follows:</font></p>
<p align="left"><font size="2" face="serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2005 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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The information contained in such Form 10-Q 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">IN WITNESS WHEREOF, I have executed this Certification this 4<sup>th</sup> day of August, 2005.</font></p>
<p align="left"><font size="2" face="serif"><u>/s/ THOMAS J. O&#146;KEEFFE</u><br>Thomas J. O&#146;Keeffe, Chief Financial Officer</font></p>
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