Note 4 - Discontinued operations and land dispositions

In March 2012, the Company determined to sell Kingston Plaza, located in Kingston, New York, and subsequently sold the property in April 2012. As such, the property has been treated as a “discontinued operation” for all periods presented.

The Company conducts a continuing review of the values for all remaining properties “held for sale/conveyance” and, based on final sales prices and sales contracts entered into, the Company recorded $1.1 million net reversals of impairment charges for the nine months ended September 30, 2012. At September 30, 2012, the Company had 17 properties that were held for sale/conveyance.

As of September 30, 2012, the Company is in the process of conveying four of its properties (Roosevelt II, Gahanna Discount Drug Mart Plaza, Westlake Discount Drug Mart Plaza and McCormick Place) to their respective lenders (mortgage loans payable and accrued interest aggregated $23.3 million at that date). In connection with these conveyances, each applicable subsidiary borrower has stopped paying monthly mortgage payments and is currently in default on these non-recourse mortgages.

On October 12, 2012, the Company concluded definitive agreements with Homburg Invest Inc. (“HII”) relating to the previously disclosed application of the buy/sell provisions of the joint venture agreements for each of the nine properties owned by the joint venture. Pursuant to the agreements, the Company acquired HII’s 80% ownership in Meadows Marketplace, located in Hershey, Pennsylvania, and Fieldstone Marketplace, located in New Bedford, Massachusetts, for approximately $27.3 million, including the assumption of related in-place mortgage financing of $21.8 million, giving the Company a 100% ownership interest in these two properties. In addition, the Company sold to HII its 20% ownership interest in the remaining seven joint venture properties for approximately $23.6 million, including the assumption of related in-place mortgage financing of $14.5 million. The Company’s property management agreements for the sold properties terminated upon the closing of the sale.

The following is a summary of the components of income (loss) from discontinued operations:



	Three months ended September 30,		Nine months ended September 30,
	2012	2011	2012	2011
Revenues:
Rents	$ 4,409,000	$ 6,466,000	$ 13,907,000	$ 20,808,000
Expense recoveries	1,059,000	1,654,000	3,557,000	5,139,000
Other	30,000	10,000	89,000	369,000
Total revenues	5,498,000	8,130,000	17,553,000	26,316,000
Expenses:
Operating, maintenance and management	1,524,000	2,041,000	5,303,000	7,191,000
Real estate and other property-related taxes	973,000	1,334,000	2,979,000	4,129,000
Depreciation and amortization	-	1,652,000	21,000	5,256,000
Interest expense	1,776,000	2,476,000	5,622,000	6,885,000
Total expenses	4,273,000	7,503,000	13,925,000	23,461,000
Income from discontinued operations before
impairments	1,225,000	627,000	3,628,000	2,855,000
Impairment (charges)/reversals,net	-	(64,671,000)	1,138,000	(87,287,000)
Income (loss) from discontinued operations	$ 1,225,000	$ (64,044,000)	$ 4,766,000	$ (84,432,000)

Gain on sales of discontinued operations	$ -	$ -	$ 750,000	$ 502,000

During the nine months ended September 30, 2012, the Company completed the following transactions related to properties “held for sale/conveyance”:


	Percent		Date	Sales	Gain on
Property	Owned	Location	Sold	Price	Sale
Discontinued operations:
Hilliard Discount Drug Mart Plaza	100%	Hilliard, OH	2/7/2012	$ 1,434,000	$ -
First Merit Bank at Akron	100%	Akron, OH	2/23/2012	633,000	-
Grove City Discount Drug Mart Plaza	100%	Grove City, OH	3/12/2012	1,925,000	-
CVS at Naugatuck	50%	Naugatuck, CT	3/20/2012	3,350,000	457,000
CVS at Bradford	100%	Bradford, PA	3/30/2012	967,000	-
CVS at Celina	100%	Celina, OH	3/30/2012	1,449,000	-
CVS at Erie	100%	Erie, PA	3/30/2012	1,278,000	-
CVS at Portage Trail	100%	Akron, OH	3/30/2012	1,061,000	-
Rite Aid at Massillon	100%	Massillon, OH	3/30/2012	1,492,000	-
Kingston Plaza	100%	Kingston, NY	4/12/2012	1,182,000	293,000
Stadium Plaza	100%	East Lansing, MI	5/3/2012	5,400,000	-
				$ 20,171,000	$ 750,000
Continuing operations:
Blue Mountain Commons (land parcel)	100%	Harrisburg. PA	6/19/2012	$ 102,000	$ 79,000
Oregon Pike (land parcel)	100%	Lancaster, PA	6/28/2012	1,100,000	-
Trindle Springs (land parcel)	100%	Mechanicsburg, PA	7/20/2012	800,000	-
Aston (land parcel)	100%	Aston, PA	7/27/2012	1,365,000	402,000
				$ 3,367,000	$ 481,000