Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

| --- | --- |

(a)(1) Financial Statements

Our consolidated financial statements and notes thereto, together with Management’s Report on Internal Control over Financial Reporting and Report of Independent Registered Public Accounting Firm are included as a separate section of this Annual Report on Form 10-K commencing on page F-1.

(2) Financial Statement Schedules

Our financial statement schedules are included in a separate section of this Annual Report on Form 10-K commencing on page F-35.

(3) Exhibits

A list of exhibits to this Annual Report on Form 10-K is set forth on the Exhibit Index immediately preceding such exhibits and is incorporated herein by reference.

(b) See Exhibit Index

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized this 25 day of February, 2008.


Federal Realty Investment Trust

By:		/s/ DONALD C. WOOD
		Donald C. Wood Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated. Each person whose signature appears below hereby constitutes and appoints each of Donald C. Wood and Dawn M. Becker as his or her attorney-in-fact and agent, with full power of substitution and resubstitution for him or her in any and all capacities, to sign any or all amendments to this Report and to file same, with exhibits thereto and other documents in connection therewith, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorney-in-fact and agent or his or her substitutes may do or cause to be done by virtue hereof.


Signature	Title	Date

/s/ DONALD C. WOOD Donald C. Wood	Chief Executive Officer, Trustee (Principal Executive Officer)	February 25, 2008

/s/ JOSEPH M. SQUERI Joseph M. Squeri	Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	February 25, 2008

/s/ JOSEPH S. VASSALLUZZO Joseph S. Vassalluzzo	Non-Executive Chairman	February 26, 2008

/s/ JON E. BORTZ Jon Bortz	Trustee	February 25, 2008

/s/ DAVID W. FAEDER David W. Faeder	Trustee	February 25, 2008

/s/ KRISTIN GAMBLE Kristin Gamble	Trustee	February 26, 2008

/s/ GAIL P. STEINEL Gail P. Steinel	Trustee	February 25, 2008

/s/ WARREN M. THOMPSON Warren M. Thompson	Trustee	February 25, 2008

Item 8 and Item 15(a)(1) and (2)

Index to Consolidated Financial Statements and Schedules


Consolidated Financial Statements		Page No.
Management Assessment Report on Internal Control over Financial Reporting		F-2
Report of Independent Registered Public Accounting Firm		F-3
Report of Independent Registered Public Accounting Firm		F-4
Consolidated Balance Sheets		F-5
Consolidated Statements of Operations		F-6
Consolidated Statement of Shareholders’ Equity		F-7
Consolidated Statements of Cash Flows		F-8
Notes to Consolidated Financial Statements		F-9-F-34

Financial Statement Schedules
Schedule III—Summary of Real Estate and Accumulated Depreciation		F-35-F-41
Schedule IV—Mortgage Loans on Real Estate		F-42-F-43

All other schedules have been omitted either because the information is not applicable, not material, or is disclosed in our consolidated financial statements and related notes.

F-1

Management Assessment Report on Internal Control over Financial Reporting

The management of Federal Realty is responsible for establishing and maintaining adequate internal control over financial reporting. Establishing and maintaining internal control over financial reporting is a process designed by, or under the supervision of, our President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, as appropriate, and effected by our employees, including management and our Board of Trustees, 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. This process includes policies and procedures that:

	•		pertain to the maintenance of records that accurately and fairly reflect the transactions and dispositions of our assets in reasonable detail;

	•		provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are made only in accordance with the authorization procedures we have established; and

	•		provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of any of our assets in circumstances that could have a material adverse effect on our financial statements.

Management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our internal control over financial reporting will prevent all errors and fraud. In designing and evaluating our control system, management recognized that any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Further, the design of a control system must reflect the fact that there are resource constraints, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, that may affect our operation have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management’s override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Management conducted an assessment of the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2007. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework. Based on this assessment, management concluded that our internal control over financial reporting is effective, based on those criteria, as of December 31, 2007.

F-2

Report of Independent Registered Public Accounting Firm

Trustees and Shareholders of Federal Realty Investment Trust

We have audited Federal Realty Investment Trust (a Maryland real estate investment trust) and subsidiaries’ (the Trust) internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Federal Realty Investment Trust’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Assessment Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on Federal Realty Investment Trust’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Federal Realty Investment Trust and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by COSO_._

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Federal Realty Investment Trust and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007 and our report dated February 25, 2008 expressed an unqualified opinion.

/s/ GRANT THORNTON LLP

McLean, Virginia

February 25, 2008

F-3

Report of Independent Registered Public Accounting Firm

Trustees and Shareholders of Federal Realty Investment Trust

We have audited the accompanying consolidated balance sheets of Federal Realty Investment Trust (a Maryland real estate investment trust) and subsidiaries (the Trust) as of December 31, 2007 and 2006, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007. Our audits of the basic financial statements included the financial statement schedules listed in the index appearing under Item 15(a) (1) and (2). These financial statements and financial statement schedules are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Trust as of December 31, 2007 and 2006, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

As discussed in Note 1 to the Notes to Consolidated Financial Statements, the Trust adopted SFAS No. 123R “Share-Based Payment”, effective January 1, 2006.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Trust’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated February 25, 2008 expressed an unqualified opinion.

/s/ GRANT THORNTON LLP

McLean, Virginia

February 25, 2008

F-4

Federal Realty Investment Trust

CONSOLIDATED BALANCE SHEETS


	December 31,
	2007			2006
	(In thousands)
ASSETS
Real estate, at cost
Operating	$	3,304,922		$	2,931,391
Construction-in-progress		147,925			99,774
Assets held for sale (discontinued operations)		—			173,093

		3,452,847			3,204,258
Less accumulated depreciation and amortization		(756,703	)		(740,507	)

Net real estate		2,696,144			2,463,751
Cash and cash equivalents		50,691			11,495
Accounts and notes receivable		61,108			47,493
Mortgage notes receivable		40,638			40,756
Investment in real estate partnership		29,646			10,322
Prepaid expenses and other assets		103,620			106,172
Debt issuance costs, net of accumulated amortization of $4,815 and $4,986, respectively		7,450			8,617

TOTAL ASSETS	$	2,989,297		$	2,688,606

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages payable	$	373,975		$	311,037
Capital lease obligations		76,109			95,116
Notes payable		210,820			109,024
Senior notes and debentures		977,556			1,127,508
Capital lease obligations of assets held for sale		—			54,245
Accounts payable and accrued expenses		99,360			97,727
Dividends payable		36,142			31,809
Security deposits payable		10,703			10,126
Other liabilities and deferred credits		58,182			45,745

Total liabilities		1,842,847			1,882,337
Minority interests		31,818			22,191
Commitments and contingencies (Note 9)
Shareholders’ equity
Preferred stock, authorized 15,000,000 shares, $.01 par:
5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 399,896 and 0 shares issued and outstanding, respectively		9,997			—
Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 60,133,270 and 56,805,816 issued, respectively		601			568
Additional paid-in capital		1,541,020			1,281,217
Accumulated dividends in excess of net income		(407,376	)		(467,369	)
Treasury shares at cost, 1,487,605 and 1,485,279 shares, respectively		(28,807	)		(28,807	)
Notes receivable from issuance of common shares		(803	)		(1,531	)

Total shareholders’ equity		1,114,632			784,078

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,989,297		$	2,688,606

The accompanying notes are an integral part of these consolidated statements.

F-5

Federal Realty Investment Trust

CONSOLIDATED STATEMENTS OF OPERATIONS


	Year Ended December 31,
	2007			2006			2005
	(In thousands, except per share data)
REVENUE
Rental income	$	468,498		$	414,979		$	375,927
Other property income		12,834			7,461			9,511
Mortgage interest income		4,560			5,095			5,370

Total revenue		485,892			427,535			390,808

EXPENSES
Rental		100,389			84,763			82,055
Real estate taxes		47,234			41,198			36,449
General and administrative		25,575			21,340			19,909
Depreciation and amortization		101,675			92,793			84,521

Total operating expenses		274,873			240,094			222,934

OPERATING INCOME		211,019			187,441			167,874
Other interest income		921			2,042			1,731
Interest expense		(111,365	)		(95,234	)		(81,617	)
Income from real estate partnership		1,395			656			493

INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTERESTS		101,970			94,905			88,481
Minority interests		(5,590	)		(4,353	)		(5,234	)

INCOME FROM CONTINUING OPERATIONS		96,380			90,552			83,247
DISCONTINUED OPERATIONS
Discontinued operations—income		4,389			4,204			617
Discontinued operations—gain on sale of real estate		94,768			16,515			30,748

Results from discontinued operations		99,157			20,719			31,365

INCOME BEFORE GAIN ON SALE OF REAL ESTATE		195,537			111,271			114,612
Gain on sale of real estate		—			7,441			—

NET INCOME		195,537			118,712			114,612
Dividends on preferred stock		(442	)		(10,423	)		(11,475	)
Preferred stock redemption costs		—			(4,775	)		—

NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS	$	195,095		$	103,514		$	103,137

EARNINGS PER COMMON SHARE, BASIC
Continuing operations	$	1.71		$	1.41		$	1.36
Discontinued operations		1.77			0.39			0.60
Gain on sale of real estate		—			0.14			—

	$	3.48		$	1.94		$	1.96

Weighted average number of common shares, basic		56,108			53,469			52,533

EARNINGS PER COMMON SHARE, DILUTED
Continuing operations	$	1.70		$	1.40		$	1.35
Discontinued operations		1.75			0.38			0.59
Gain on sale of real estate		—			0.14			—

	$	3.45		$	1.92		$	1.94

Weighted average number of common shares, diluted		56,543			53,962			53,050

The accompanying notes are an integral part of these consolidated statements.

F-6

Federal Realty Investment Trust

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY


	Preferred Stock					Common Shares			Additional Paid-in Capital			Accumulated Dividends In Excess of Net Income			Treasury Shares					Deferred Compensation On Restricted Shares			Notes Receivable From the Issuance of Common Shares			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
	Shares		Amount			Shares	Amount				Shares		Amount
	(In thousands, except share data)
BALANCE AT DECEMBER 31, 2004	5,400		$	135,000		53,616,827	$	536	$	1,108,213		$	(416,026	)	(1,480,202	)	$	(28,786	)	$	(8,641	)	$	(2,083	)	$	2,321		$	790,534
Comprehensive income:
Net income	—			—		—		—		—			114,612		—			—			—			—			—			114,612
Change due to recognizing gain on securities	—			—		—		—		—			—		—			—			—			—			60			60
Change in valuation on interest rate swaps	—			—		—		—		—			—		—			—			—			—			297			297

Total comprehensive income																														114,969
Dividends declared to common shareholders	—			—		—		—		—			(124,928	)	—			—			—			—			—			(124,928	)
Dividends declared to preferred shareholders	—			—		—		—		—			(11,475	)	—			—			—			—			—			(11,475	)
Exercise of stock options	—			—		409,920		4		10,947			—		—			—			—			—			—			10,951
Shares issued under dividend reinvestment plan	—			—		62,579		1		3,424			—		—			—			—			—			—			3,425
Grants of restricted common shares	—			—		78,591		1		4,061			—		—			—			(3,494	)		—			—			568
Vesting of restricted common shares	—			—		—		—		—			—		—			—			2,431			—			—			2,431
Deferred sock compensation associated with variable accounting (APB No. 25)	—			—		—		—		893			—		—			—			—			—			—			893
Conversion and redemption of OP units						203,140		2		(12,806	)		—		—			—			—			—			—			(12,804	)
Unvested shares forfeited	—			—		—		—		—			—		(158	)		(8	)		—			—			—			(8	)
Loans paid	—			—		—		—		—			—		—			—			—			291			—			291

BALANCE AT DECEMBER 31, 2005	5,400		$	135,000		54,371,057	$	544	$	1,114,732		$	(437,817	)	(1,480,360	)	$	(28,794	)	$	(9,704	)	$	(1,792	)	$	2,678		$	774,847
Comprehensive income:
Net income	—			—		—		—		—			118,712		—			—			—			—			—			118,712
Change in valuation on interest rate swaps	—			—		—		—		—			—		—			—			—			—			(1,493	)		(1,493	)

Total comprehensive income																														117,219
Change due to termination of hedge relationship	—			—		—		—		—			—		—			—			—			—			(1,185	)		(1,185	)
Dividends declared to common shareholders	—			—		—		—		—			(133,066	)	—			—			—			—			—			(133,066	)
Dividends declared to preferred shareholders	—			—		—		—		—			(10,423	)	—			—			—			—			—			(10,423	)
Common shares issued	—			—		2,002,670		20		149,077			—		—			—			—			—			—			149,097
Exercise of stock options	—			—		266,579		2		8,843			—		—			—			—			—			—			8,845
Shares issued under dividend reinvestment plan	—			—		44,077		—		3,101			—		—			—			—			—			—			3,101
Share-based compensation expense (SFAS No.123 (R))	—			—		84,217		1		6,490			—		—			—			—			—			—			6,491
Cumulative effect of change in accounting principle	—			—		—		—		(6,416	)		—		—			—			9,704			—			—			3,288
Conversion and redemption of OP units	—			—		37,216		1		615			—		—			—			—			—			—			616
Preferred shares redeemed	(5,400	)		(135,000	)	—		—		4,775			(4,775	)	—			—			—			—			—			(135,000	)
Unvested shares forfeited	—			—		—		—		—			—		(4,919	)		(13	)		—			—			—			(13	)
Loans paid	—			—		—		—		—			—		—			—			—			261			—			261

BALANCE AT DECEMBER 31, 2006	—		$	—		56,805,816	$	568	$	1,281,217		$	(467,369	)	(1,485,279	)	$	(28,807	)	$	—		$	(1,531	)	$	—		$	784,078
Net income	—			—		—		—		—			195,537		—			—			—			—			—			195,537
Dividends declared to common shareholders	—			—		—		—		—			(135,102	)	—			—			—			—			—			(135,102	)
Dividends declared to preferred shareholders	—			—		—		—		—			(442	)	—			—			—			—			—			(442	)
Common shares issued	—			—		2,884,099		29		240,162			—		—			—			—			—			—			240,191
Exercise of stock options	—			—		106,117		1		5,066			—		—			—			—			—			—			5,067
Shares issued under dividend reinvestment plan	—			—		32,615		—		2,821			—		—			—			—			—			—			2,821
Share-based compensation expense (SFAS No.123 (R))	—			—		127,867		1		8,039			—		—			—			—			—			—			8,040
Conversion and redemption of OP units	—			—		176,756		2		3,715			—		—			—			—			—			—			3,717
Preferred shares issued	399,896			9,997		—		—		—			—		—			—			—			—			—			9,997
Unvested shares forfeited	—			—		—		—		—			—		(2,326	)		—			—			—			—			—
Loans paid	—			—		—		—		—			—		—			—			—			728			—			728

BALANCE AT DECEMBER 31, 2007	399,896		$	9,997		60,133,270	$	601	$	1,541,020		$	(407,376	)	(1,487,605	)	$	(28,807	)	$	—		$	(803	)	$	—		$	1,114,632

The accompanying notes are an integral part of these consolidated statements.

F-7

Federal Realty Investment Trust

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Year Ended December 31,
	2007			2006			2005
	(In thousands)
OPERATING ACTIVITIES
Net income	$	195,537		$	118,712		$	114,612
Adjustment to reconcile net income to net cash provided by operating activities
Depreciation and amortization, including discontinued operations		105,966			97,879			91,503
Gain on sale of real estate		(94,768	)		(23,956	)		(30,748	)
Equity in income from real estate partnership		(1,395	)		(656	)		(493	)
Minority interests		5,590			4,353			5,234
Other, net		(2,267	)		2,328			4,302
Changes in assets and liabilities net of effects of acquisitions and dispositions:
Decrease in accounts receivable		(6,743	)		(3,786	)		(3,274	)
Decrease (increase) in prepaid expenses and other assets		3,002			(11,792	)		(3,667	)
Increase in accounts payable, and accrued expenses		266			2,846			752
Increase (decrease) in security deposits and other liabilities		9,021			726			(3,280	)

Net cash provided by operating activities		214,209			186,654			174,941

INVESTING ACTIVITIES
Acquisition of real estate		(69,487	)		(266,984	)		(96,920	)
Capital expenditures—development and redevelopment		(111,600	)		(95,718	)		(149,494	)
Capital expenditures—other		(25,755	)		(23,961	)		(20,163	)
Proceeds from sale of real estate		83,979			82,345			113,141
Investment in real estate partnership		(20,427	)		(4,960	)		(13	)
Distribution from real estate partnership in excess of earnings		967			631			—
Leasing costs		(9,756	)		(8,628	)		(8,628	)
Repayment (issuance) of mortgage and other notes receivable, net		640			(154	)		9,347

Net cash used in investing activities		(151,439	)		(317,429	)		(152,730	)

FINANCING ACTIVITIES
Net (repayment) borrowings under revolving credit facility, net of costs		(98,000	)		41,209			500
Issuance of note payable, net of costs		199,525			149,979			—
Issuance of senior notes		—			509,887			124,013
Repayment of senior notes		(150,000	)		(40,500	)		(40,000	)
Repayment of mortgages, capital leases and notes payable		(7,603	)		(405,552	)		(4,555	)
Redemption of Series B preferred shares		—			(135,000	)		—
Issuance of common shares		170,855			161,292			14,111
Dividends paid to common and preferred shareholders		(131,443	)		(142,947	)		(133,377	)
Distributions to minority interests		(6,908	)		(4,737	)		(4,739	)

Net cash (used in) provided by financing activities		(23,574	)		133,631			(44,047	)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		39,196			2,856			(21,836	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		11,495			8,639			30,475

CASH AND CASH EQUIVALENTS, END OF YEAR	$	50,691		$	11,495		$	8,639

The accompanying notes are an integral part of these consolidated statements.

F-8

Federal Realty Investment Trust

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007, 2006 and 2005

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business and Organization

Federal Realty Investment Trust (the “Trust”) is an equity real estate investment trust specializing in the ownership, management, development and redevelopment of retail and mixed-use properties. Our properties are located primarily in densely populated and affluent communities in strategic metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, as well as in California.

We operate in a manner intended to enable us to qualify as a real estate investment trust (or REIT) for federal income tax purposes. A REIT that distributes at least 90% of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, federal income taxes on our REIT taxable income have been and are generally expected to be immaterial. We are obligated to pay state taxes, generally consisting of franchise or gross receipts taxes in certain states. Such state taxes also have not been material.

We have elected to treat certain of our subsidiaries as taxable REIT subsidiaries, which we refer to as a TRS. In general, a TRS may engage in any real estate business and certain non-real estate businesses, subject to certain limitations under the Internal Revenue Code of 1986, as amended (the “Code”). A TRS is subject to federal and state income taxes. The sales of condominiums at Santana Row, which occurred between August 2005 and August 2006, and the sales of Bath Shopping Center, Key Road Plaza and Riverside Plaza in 2007 were conducted through a TRS. Other than these sales, our TRS activities have not been material.

Principles of Consolidation and Estimates

Our consolidated financial statements include the accounts of the Trust, its corporate subsidiaries, and all entities in which the Trust has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity. The equity interests of other investors are reflected as minority interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures, which we do not control or manage, using the equity method of accounting.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates.

Reclassifications

Certain prior year amounts in the 2007 consolidated financial statements have been reclassified to conform to current period presentation.

In June 2006, we sold Greenlawn Plaza to our unconsolidated real estate partnership resulting in a gain of $7.4 million. In our 2006 Form 10-K, the operations of the property prior to June 2006 and the gain on sale of real estate were included in discontinued operations. However, due to our continuing involvement in the property, Greenlawn Plaza does not qualify for discontinued operations classification under SFAS No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Accordingly, we have reclassified the results of

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operations through the date of sale to continuing operations and reclassified the gain on sale from “discontinued operations—gain on sale of real estate” to “gain on sale of real estate.” This reclassification did not impact net income.

Revenue Recognition and Accounts Receivable

Our leases with tenants are classified as operating leases. Substantially all such leases contain fixed escalations which occur at specified times during the term of the lease. Base rents are recognized on a straight-line basis from when the tenant controls the space through the term of the related lease, net of valuation adjustments, based on management’s assessment of credit, collection and other business risk. Percentage rents, which represent additional rents based upon the level of sales achieved by certain tenants, are recognized at the end of the lease year or earlier if we have determined the required sales level is achieved and the percentage rents are collectible. Real estate tax and other cost reimbursements are recognized on an accrual basis over the periods in which the related expenditures are incurred. We make estimates of the collectibility of our accounts receivable related to minimum rents, straight-line rents, expense reimbursements and other revenue or income. In some cases, primarily relating to straight-line rents, the collection of these amounts extends beyond one year. Our experience relative to unbilled straight-line rents is that a certain portion of the amounts otherwise recognizable as revenue is never billed to or collected from tenants due to early lease terminations, lease modifications, bankruptcies and other factors. Accordingly, the extended collection period for straight-line rents along with our evaluation of tenant credit risk may result in the nonrecognition of a portion of straight-line rental income until the collection of such income is reasonably assured. If our evaluation of tenant credit risk changes indicating more straight-line revenue is reasonably collectible than previously estimated and realized, the additional straight-line rental income is recognized as revenue. If our evaluation of tenant credit risk changes indicating a portion of realized straight-line rental income is no longer collectible, a reserve and bad debt expense is recorded. At December 31, 2007 and 2006, accounts receivable include approximately $32.0 million and $24.8 million, respectively, related to straight-line rents. At December 31, 2007 and 2006, our allowance for doubtful accounts was $7.0 million and $6.2 million, respectively.

Real Estate

Land, buildings and improvements are recorded at cost. Depreciation is computed using the straight-line method. Estimated useful lives range generally from 35 years to a maximum of 50 years on buildings and major improvements. Minor improvements, furniture and equipment are capitalized and depreciated over useful lives ranging from 3 to 15 years. Maintenance and repairs that do not improve or extend the useful lives of the related assets are charged to operations as incurred. Tenant improvements are capitalized and depreciated over the life of the related lease or their estimated useful life, whichever is shorter. If a tenant vacates its space prior to contractual termination of its lease, the undepreciated balance of any tenant improvements are written off if they are replaced. In 2007, 2006 and 2005, depreciation expense was $93.4 million, $85.7 million and $77.9 million, respectively, which includes depreciation expense for assets under capital lease obligations.

In accordance with Statement of Financial Accounting Standard (“SFAS”) No. 66, “Accounting for Sales of Real Estate,” sales are recognized at closing only when sufficient down payments have been obtained, possession and other attributes of ownership have been transferred to the buyer and we have no significant continuing involvement. The application of SFAS No. 66 can be complex and requires us to make assumptions. We believe the criteria of SFAS No. 66 was met for all real estate sold during 2007, 2006 and 2005.

In accordance with SFAS No. 141, “Business Combinations,” our methodology of allocating the cost of acquisitions to assets acquired and liabilities assumed is based on estimated fair values, replacement cost and appraised values. When we acquire operating real estate properties, the purchase price is allocated to land and buildings, intangibles such as in-place leases and to current assets and liabilities acquired, if any. The value allocated to in-place leases is amortized over the related lease term and reflected as rental income in the statement of operations. If a tenant vacates its space prior to contractual termination of its lease, the unamortized balance of any in-place lease value is written off to rental income.

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We are the lessee of certain land and buildings. We classify our leases of land and building as operating or capital leases in accordance with the provisions of SFAS No. 13, “Accounting for Leases.”

In accordance with SFAS No. 67, “Accounting for Costs and Initial Rental Operations of Real Estate Projects,” we capitalize certain costs related to the development and redevelopment of real estate including pre-construction costs, real estate taxes, insurance, construction costs and salaries and related costs of personnel directly involved. Additionally, in accordance with SFAS No. 34, “Capitalization of Interest Costs,” we capitalize interest costs related to development and redevelopment activities. Capitalization of these costs begin when the activities and related expenditures commence and cease when the project is substantially complete and ready for its intended use at which time the project is placed-in service and depreciation commences.

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” we review for impairment on a property by property basis. Impairment is recognized on properties held for use when the expected undiscounted cash flows for a property are less than its carrying amount at which time the property is written-down to fair value. Properties held for sale are recorded at the lower of the carrying amount or the expected sales price less costs to sell. SFAS No. 144 also requires the sale or disposal of a “component of an entity” to be treated as discontinued operations. The properties sold by us typically meet the definition of a component of an entity and as such the revenues and expenses associated with sold properties are reclassified to discontinued operations for all periods presented.

Cash and Cash Equivalents

We define cash and cash equivalents as cash on hand, demand deposits with financial institutions and short term liquid investments with an initial maturity under three months. Cash balances in individual banks may exceed insurable amounts.

Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist primarily of lease costs, prepaid property taxes and acquired above market leases. Capitalized lease costs are direct costs incurred which were essential to originate a lease and would not have been incurred had the leasing transaction not taken place and include third party commissions and salaries and related costs of personnel directly related to time spent obtaining a lease. Capitalized lease costs are amortized over the life of the related lease. If a tenant vacates its space prior to the contractual termination of its lease, the unamortized balance of any lease costs are written off. Other assets also include the premiums paid for split dollar life insurance covering several officers and former officers which were approximately $4.6 million at December 31, 2007 and 2006.

Debt Issuance Costs

Costs related to the issuance of debt instruments are capitalized and are amortized as interest expense over the estimated life of the related issue using the straight-line method which approximates the effective interest method.

Derivative Instruments

We enter into interest rate swaps and treasury rate locks that qualify as cash flow hedges under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk of interest rates rising prior to the issuance of debt. We do not purchase derivatives for speculation. Our cash flow hedges are recorded at fair value. The effective portion of changes in fair value of our cash flow hedges is recorded in other comprehensive income and reclassified to earnings when the hedged item affects earnings. The ineffective portion of changes in fair value of our cash flow hedges is recognized in earnings in the period affected. We

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assess effectiveness of our cash flow hedges both at inception and on an ongoing basis. Hedge ineffectiveness did not have a significant impact on earnings in 2007, 2006 and 2005, and we do not anticipate it will have a significant effect in the future.

In January 2004, we entered into an interest rate swap to fix the LIBOR portion of our $150 million term loan issued in October 2003. This swap fixed the LIBOR portion at 2.401% through October 2006. The full notional amount of this swap qualified as a cash flow hedge until we repaid the $150 million term loan on July 17, 2006. We did not redesignate this swap and the related $1.2 million included in accumulated other comprehensive income was recognized into earnings.

In August 2002, in anticipation of a $150 million senior unsecured note offering, we entered into a treasury lock that fixed the five year treasury rate at 3.472% through August 19, 2002. On August 16, 2002, we priced the senior unsecured notes with a scheduled closing date of August 21, 2002 and closed on the associated rate lock. Five-year treasury rates declined between the pricing period and the settlement of the rate lock and therefore, we paid $1.5 million to settle the rate lock. As a result of the August 19, 2002 fire at Santana Row, we did not proceed with the note offering at that time. However, we consummated a $150 million, 6.125% Senior Unsecured Note offering in November 2002, and thus, the hedge loss was amortized into interest expense over the life of these notes through maturity on November 15, 2007.

We also purchased an interest rate swap that terminated March 2006, with a notional amount of $40.5 million upon issuance of our 6.99% Medium Term Notes, which reduced the effective interest rate from 6.99% to 6.894%.

Acquisition, Development and Construction Loan Arrangements

We have made certain mortgage loans that, because of their nature, qualify as loan receivables. At the time the loans were made, we did not intend for the arrangement to be anything other than a financing and did not contemplate a real estate investment. Using guidance set forth in the Third Notice to Practitioners issued by the AICPA in February 1986 entitled “ADC Arrangements” (“the Third Notice”), we evaluate each investment to determine whether the loan arrangement qualifies under the Third Notice as a loan, joint venture or real estate investment and the appropriate accounting thereon. Such determination affects our balance sheet classification of these investments and the recognition of interest income derived therefrom. Generally, we receive additional interest on these loans, however we never receive in excess of 50% of the residual profit in the project (as defined in the Third Notice) and because the borrower has either a substantial investment in the project or has guaranteed all or a portion of our loan (or a combination thereof) the loans qualify for loan accounting. The amounts under ADC arrangements are presented as mortgage notes receivable at December 31, 2007 and 2006.

Share Based Compensation

Prior to January 1, 2006, we accounted for stock based compensation under the recognition and measurement provisions of Accounting Principle Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees,” and related interpretations, as permitted by SFAS No. 123, “Accounting for Stock-Based Compensation.” Under APB No. 25, no stock based compensation costs were recognized in the Statement of Operations for stock options as our options granted had an exercise price equal to the market value of our common shares on the date of grant. Effective January 1, 2006, we adopted the fair value recognition provisions of SFAS No. 123(R), “Share-Based Payment,” using the modified-prospective-transition method. Under this transition method, compensation cost recognized beginning January 1, 2006 includes: (a) compensation costs for all share-based payments granted prior to, but not vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123(R). Prior to January 1, 2006, we used the Black-Scholes model to value stock options and we continue to use this model to value stock options issued subsequent to January 1, 2006.

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On January 1, 2006, we recorded the cumulative effect of adopting SFAS No. 123(R). This cumulative effect resulted in decreasing accrued liabilities by $3.3 million and increasing shareholders’ equity by $3.3 million. These balance sheet changes related to deferred compensation on unvested shares. Under SFAS No. 123(R), deferred compensation is no longer recorded at the time unvested shares are issued. Share-based compensation expense is now recorded over the requisite service period with an offsetting credit to equity (generally additional paid-in capital).

If we had not adopted SFAS No. 123(R), our net income for 2006 would have excluded share-based compensation related to options of $1.3 million and included variable stock compensation related to our performance shares of $1.5 million. Under SFAS No. 123(R), the compensation associated with our unvested performance shares is now fixed at their grant-date fair value. Accordingly, if we had not adopted SFAS No. 123(R), our income from continuing operations, net income, basic earnings per share and dilutive earnings per share for 2006 would not have been materially different. While there are certain differences between SFAS No. 123 and 123(R), we believe the pro forma disclosures under SFAS No. 123 presented below approximate the effect of SFAS No. 123(R) for the year ended December 31, 2005.

The following table illustrates the effect on net income and earnings per share if we had applied the fair value recognition provisions of SFAS No. 123 to our stock based compensation, prior to January 1, 2006.


	2005
	(In thousands, except per share data)
Net income available for common shareholders, as reported	$	103,137
Stock-based employee compensation cost included in net income		3,992
Stock-based employee compensation cost under the fair value method for all awards		(3,802	)

Net income available for common shareholders, pro forma	$	103,327

Earnings Per Share:
Basic, as reported	$	1.96
Basic, pro forma	$	1.97
Diluted, as reported	$	1.94
Diluted, pro forma	$	1.95

Redemption of Preferred Stock

On November 27, 2006, we redeemed our $135 million 8.5% Series B Cumulative Redeemable Preferred Shares at their face value. The original issuance costs of $4.8 million were charged to shareholders’ equity when the shares were issued. On July 31, 2003, the Emerging Issues Task Force provided clarification on the treatment of the difference between the redemption value and the carrying value, adjusting for issuance costs, for GAAP financial reporting. As a result, our Consolidated Statement of Operations for the year ended December 31, 2006 reflects a charge of $4.8 million in “Preferred stock redemption costs” as a reduction of net income in computing net income available for common shareholders.

Variable Interest Entities

In January 2003, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 46 (revised December 2003) (“FIN 46-R”), “Consolidation of Variable Interest Entities.” FIN 46-R clarifies the application of Accounting Research Bulletin 51, Consolidated Financial Statements, for certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties or in which equity investors do not have the characteristics of a controlling financial interest (“variable interest entities”). Variable interest entities within the scope of FIN 46-R are required to be consolidated by their primary beneficiary. The primary beneficiary of a variable interest entity is determined to

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be the party that absorbs a majority of the entity’s expected losses, receives a majority of its expected returns, or both. We have evaluated the applicability of FIN 46-R to our investments in certain restaurant joint ventures and our real estate partnership with affiliates of Clarion Lion Properties Fund and determined that these joint ventures do not meet the requirements of a variable interest entity and, therefore, consolidation of these ventures is not required. These investments are accounted for using the equity method. We have also evaluated the applicability of FIN 46-R to our mortgage loans receivable and determined that they are not variable interest entities.

Our investment balance in these restaurant joint ventures was approximately $7.9 million and $8.6 million at December 31, 2007 and 2006, respectively. Our equity in earnings from these restaurant joint ventures was $2.2 million, $1.5 million and $1.3 million in 2007, 2006 and 2005, respectively. Our investment balances and earnings from mortgage notes receivable and our real estate partnership are presented in our consolidated balance sheets and consolidated statements of operations.

From December 29, 2005 to June 5, 2006, a third party intermediary was the legal owner of Crow Canyon Commons, but we controlled the property and retained all of the economic benefit and risk associated with the property. Accordingly, we consolidated the property and its operations beginning December 29, 2005.

On October 16, 2006, we acquired the leasehold interest in Melville Mall under a 20 year master lease. Additionally, we loaned the owner of Melville Mall $34.2 million secured by a second mortgage on the property. We have an option to purchase the shopping center on or after October 16, 2021 for a price of $5.0 million plus the assumption of the first mortgage and repayment of the second mortgage. We have determined that this property is held in a variable interest entity for which we are the primary beneficiary. Accordingly, beginning October 16, 2006, we consolidated this property and its operations.

From May 30, 2007 to October 11, 2007, a third party intermediary was the legal owner of Shoppers’ World, but we controlled the property and retained all of the economic benefit and risk associated with the property. Accordingly, we consolidated the property and its operations beginning May 30, 2007.

Consolidated Statements of Cash Flows – Supplemental Disclosures

The following table provides additional information related to the Consolidated Statements of Cash Flows:


	2007			2006			2005
	(In thousands)
SUPPLEMENTAL DISCLOSURES:
Total interest costs incurred	$	125,259		$	106,877		$	94,257
Interest capitalized		(7,865	)		(4,069	)		(5,691	)
Interest expense related to discontinued operations		(6,029	)		(7,574	)		(6,949	)

Interest expense	$	111,365		$	95,234		$	81,617

Cash paid for interest, net of amounts capitalized	$	117,554		$	91,612		$	84,242

Cash paid for income taxes	$	1,126		$	5,098	(1)	$	82

NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Mortgage loans assumed with acquisitions	$	79,987		$	44,297		$	22,258
Common shares issued with acquisitions	$	77,957		$	—		$	—
Extinguishment of capital lease obligations	$	76,449		$	—		$	—
DownREIT operating partnership units issued with acquisitions	$	16,358		$	—		$	—
Preferred shares issued with acquisitions	$	9,997		$	—		$	—

(1)	Cash paid for income taxes for 2006 includes $4.1 million related to the sales of condominiums at Santana Row which were conducted through a TRS.

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Accounting for Income Taxes

In July 2006, the FASB issued FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes” which is an interpretation of FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 was issued to reduce the diversity in practice associated with certain aspects of recognition, disclosure and measurement related to accounting for uncertain income tax positions. We adopted FIN 48 effective January 1, 2007. The adoption of FIN 48 did not have a material impact on our financial position, results of operations, or cash flows. We recognize penalties and interest accrued related to unrecognized tax benefits as income tax expense. With few exceptions, we are no longer subject to U.S. federal, state, and local tax examinations by tax authorities for years before 2003. As of December 31, 2007, we had no material unrecognized tax benefits.

New Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157 “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies to accounting pronouncements that require or permit fair value measurements, except for share-based payments under SFAS No. 123(R). We are required to adopt the recognition and disclosure provisions of SFAS No. 157 for financial assets and financial liabilities and for nonfinancial assets and nonfinancial liabilities that are re-measured at least annually effective January 1, 2008; we are required to adopt the provisions of SFAS No. 157 for all other nonfinancial assets and nonfinancial liabilities effective January 1, 2009. We do not believe the adoption of SFAS No. 157 will have a material impact on our financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115” (“SFAS No. 159”). This standard permits entities to choose to measure many financial instruments and certain other items at fair value and is effective for the first fiscal year beginning after November 15, 2007. We do not intend to make this fair value election and, therefore, we do not expect SFAS No. 159 to have an impact on our financial position, results of operations, or cash flows.

On December 4, 2007, the FASB issued Statement No. 141 (R), Business Combinations (“SFAS No. 141 (R)”) and Statement No. 160 “Accounting and Reporting of Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (“SFAS No. 160”). The new standards significantly change the accounting and reporting of business combination transactions and minority interests in the consolidated financial statements; these changes include expensing all acquisition related transaction costs, recognizing contingent consideration arrangements at their acquisition date fair values with subsequent changes generally reflected in earnings, recognizing 100% of the fair values of assets acquired and liabilities assumed in acquisitions of less than 100% controlling interest and recognizing a non-controlling interest as equity in the consolidated financial statements. We are required to adopt SFAS No. 141 (R) for business combination transactions for which the acquisition date is on or after January 1, 2009 and SFAS No. 160 on January 1, 2009. We are currently evaluating the impact SFAS No. 141 (R) and SFAS No. 160 will have on our financial position, results of operations, and cash flows.

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NOTE 2. REAL ESTATE

A summary of our real estate investments and related encumbrances is as follows:


	Cost		Accumulated Depreciation and Amortization			Encumbrances
	(In thousands)
December 31, 2007
Retail and mixed-use properties	$	3,224,196	$	(717,257	)	$	373,975
Retail properties under capital leases		201,544		(30,957	)		76,109
Residential		27,107		(8,489	)		—

	$	3,452,847	$	(756,703	)	$	450,084

December 31, 2006
Retail and mixed-use properties	$	2,885,451	$	(630,600	)	$	311,037
Retail properties under capital leases		291,944		(101,951	)		149,361
Residential		26,863		(7,956	)		—

	$	3,204,258	$	(740,507	)	$	460,398

Retail and mixed-use properties includes the residential portion of Santana Row. The residential property investments are comprised of our investments in Rollingwood Apartments and Crest Apartments at Congressional Plaza.

A summary of our significant acquisitions in 2007 and 2006 is as follows:


Date	Property	City, State	Gross Leasable Area	Purchase Price (1)
			(In square feet)	(In millions)
Year ended December 31, 2007
February 28	Crow Canyon Crest	San Ramon, CA	17,000	$	10.9	(1)
March 8	The White Marsh Portfolio: (2)	White Marsh, MD			189.4	(3)
	THE AVENUE at White Marsh		296,000
	The Shoppes at Nottingham Square		186,000
	White Marsh Plaza		79,000
	White Marsh Other		53,000
May 30	Shoppers’ World	Charlottesville, VA	169,000		27.2	(4)
October 26	Mid-Pike Plaza	Rockville, MD	—		45.2	(5)
October 26	Huntington Shopping Center	Huntington, NY	—		37.7	(5)

		Total	800,000	$	310.4


Year ended December 31, 2006
January 20	4900 Hampden Lane	Bethesda, MD	35,000	$	12.0
January 27	7770 Richmond Hwy	Alexandria, VA	60,000		9.9
June 29	Town Center of New Britain	New Britain, PA	126,000		12.8
August 24	Key Road Plaza	Keene, NH	76,000		14.5
August 24	Riverside Plaza	Keene, NH	218,000		24.0
August 24	Bath Shopping Center	Bath, ME	101,000		22.8
August 24	Linden Square	Wellesley, MA	261,000		99.6
August 24	North Dartmouth	North Dartmouth, MA	183,000		27.5
August 25	Chelsea Commons	Chelsea, MA	180,000		20.1
Various after September 13	Rockville Town Square	Rockville, MD	152,000		5.9	(6)
October 16	Melville Mall	Huntington, NY	248,000		60.0	(7)

		Total	1,640,000	$	309.1

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(1)	Approximately $0.4 million and $1.8 million of the net assets acquired were allocated to other assets for “above market leases” and liabilities for “below market leases,” respectively.

(2)

The White Marsh Portfolio was purchased using $11.5 million of cash plus a combination of common stock and convertible preferred stock, downREIT operating partnership units, and the assumption of mortgage loans through a merger with Nottingham Properties, Inc. The acquisition also included ground leases covering 50,000 square feet of office space and a hotel which are not included in gross leasable area.

(3)	Approximately $3.6 million and $9.3 million of the net assets acquired were allocated to other assets for “above market leases” and liabilities for “below market leases,” respectively.

(4)	Approximately $0.8 million and $2.1 million of the net assets acquired were allocated to other assets for “above market leases” and liabilities for “below market leases,” respectively.

(5)

On October 26, 2007, we completed an exchange transaction whereby we sold our leasehold interests in six New Jersey properties and acquired the fee interests in Mid-Pike Plaza and Huntington Shopping Center. Prior to the transaction, we held leasehold interests in all eight properties. The transaction was completed as a 1031 tax-deferred exchange and involved a cash payment of $17.2 million. All eight properties were previously encumbered by capital lease obligations which were extinguished as part of the transaction.

(6)	We acquired an additional 30,000 square feet of gross leasable area in 2007.

(7)	The Trust controls and consolidates Melville Mall at its approximate fair value of $60.0 million. We gained control of Melville Mall through a 20-year master lease and $34.1 million secondary financing to the owner. The master lease includes a purchase option in 2021 for $5.0 million plus the assumption of the owner’s first mortgage that has a balance of $25.1 million at December 31, 2007.

On November 16, 2007, we purchased the 10% minority interest in three properties located at our Fifth Avenue, Hermosa Avenue and Third Street Promenade projects for $5.7 million. We now own 100% of these properties.

A summary of our significant dispositions in 2007 and 2006 is as follows:


Sale Date	Property	Location	Year Acquired or Built	Gross Leasable Area	Sales Price		Gain
				(In square feet)	(In millions)
Year ended December 31, 2007
April 5	Bath Shopping Center	Bath, ME	2006	101,000	$	21.8	$	0.6	(1)
June 20	Key Road Plaza	Keene, NH	2006	76,000		15.3		0.4	(2)
June 20	Riverside Plaza	Keene, NH	2006	218,000		25.9		0.5	(3)
October 11	Forest Hills Shopping Center	Forest Hills, NY	1997	39,500		33.2		19.1	(4)
October 26	New Jersey Leasehold Interests:					65.7		79.6	(5)
	Allwood Shopping Center	Clifton, NJ	1988	50,000
	Blue Star Shopping Center	Watchung, NJ	1988	410,000
	Brunswick Shopping Center	North Brunswick, NJ	1988	303,000
	Clifton Shopping Center	Clifton, NJ	1988	80,000
	Hamilton Shopping Center	Hamilton, NJ	1988	190,000
	Rutgers Shopping Center	Franklin, NJ	1988	267,000

		Total		1,734,500	$	161.9	$	100.2


Year ended December 31, 2006
January-August	Santana Row Condominiums (89 units)(6)	San Jose, CA	2002	N/A	$	64.1	$	16.5	(7)
June 5	Greenlawn Plaza	Huntington, NY	2000	102,000		20.4		7.4	(8)

		Total		102,000	$	84.5	$	23.9

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(1)	Gain of $0.6 million is net of $0.3 million in taxes.

(2)	Gain of $0.4 million is net of $0.1 million in taxes.

(3)	Gain of $0.5 million is net of $0.1 million in taxes.

(4)	We sold two of three retail buildings located in Forest Hills, NY.

(5)

On October 26, 2007, we completed an exchange transaction whereby we sold our leasehold interests in six New Jersey properties and acquired the fee interests in Mid-Pike Plaza and Huntington Shopping Center. The transaction was completed as a 1031 tax-deferred exchange and involved a cash payment of $17.2 million. All eight properties were previously encumbered by capital lease obligations which were extinguished as part of the transaction.

(6)	As of August 25, 2006, we had sold all of the 219 condominium units we planned to sell at Santana Row.

(7)	Gain of $16.5 million is net of $2.4 million in taxes.

(8)	This property was contributed to our real estate partnership in which we own a 30% interest. Accordingly, we recognized a partial gain of $7.4 million on this sale related to the 70% equity interest contributed.

NOTE 3. MORTGAGE NOTES RECEIVABLE

At December 31, 2007 and 2006, we had mortgage notes receivable with an aggregate carrying amount of $40.6 million and $40.8 million, respectively, which are net of a valuation allowance of $4.6 million and $5.0 million, respectively. These mortgage notes are due over various terms from August 2016 to May 2021. At December 31, 2007 and 2006, our mortgages had a weighted average interest rate of 10.0%. Interest income is accrued as earned. Under the terms of certain of these mortgages, we receive additional interest based upon the gross income of the secured properties and, upon sale of the properties, we will share in the appreciation of the properties.

On August 4, 2006, we amended the $17.7 million second mortgage note receivable which is secured by a hotel in San Jose, California. The amended note decreased the interest rate from 14% to 9% per annum, requires monthly payments of principal and interest based on a 15-year amortization schedule and matures on August 20, 2016.

NOTE 4. REAL ESTATE PARTNERSHIP

We have a joint venture arrangement (“the Partnership”) with affiliates of a discretionary fund created and advised by ING Clarion Partners. We own 30% of the equity in the Partnership, and Clarion owns 70%. We are the manager of the Partnership and its properties, earning fees for acquisitions, management, leasing, and financing. We also have the opportunity to receive performance-based earnings through our Partnership interest. As of December 31, 2007, we have made total contributions of $34.8 million and received total distributions of $4.4 million. We account for our interest in the Partnership using the equity method.

The following are the summarized operating results and the financial position of the Partnership:


	Year Ended December 31,
	2007		2006		2005
	(In thousands)
OPERATING RESULTS
Revenue	$	17,566	$	10,523	$	8,384
Expenses
Other operating expenses		4,478		2,828		2,178
Depreciation and amortization		4,471		2,767		2,099
Interest expense		4,478		3,506		2,464

Total expenses		13,427		9,101		6,741

Net income	$	4,139	$	1,422	$	1,643

Our share of net income from real estate partnership	$	1,395	$	656	$	493

F-18


	December 31,
	2007		2006
	(In thousands)
BALANCE SHEETS
Real estate, net	$	191,747	$	123,478
Cash		1,453		2,116
Other assets		7,173		4,064

Total assets	$	200,373	$	129,658

Mortgages payable	$	81,540	$	77,425
Other liabilities		8,691		6,716
Partners’ capital		110,142		45,517

Total liabilities and partners’ capital	$	200,373	$	129,658

Our share of unconsolidated debt	$	24,462	$	23,228

Our investment in real estate partnership	$	29,646	$	10,322

For mortgages payable totaling $36.7 million that are secured by three properties owned by subsidiaries of the Partnership, we were the guarantor for the obligations of the joint venture which are commonly referred to as “non-recourse carve-outs.” The guarantees do not have a finite term; however, once the lenders have been repaid in accordance with the loan documents, the only likely basis for a claim on the guarantee is for loss to the lender as a result of potential future environmental liability at the properties to which the loans relate. We were not guaranteeing repayment of the debt itself. The Partnership would indemnify us for any loss we were to incur under these guarantees. As of November 2007, we are no longer the guarantor on the loans.

The following table provides a summary of acquisitions made by our unconsolidated real estate partnership in 2007 and 2006:


Date	Property	City, State	Gross Leasable Area	Purchase Price
			(In square feet)	(In millions)
Year ended December 31, 2007
February 15	Free State Shopping Center	Bowie, MD	278,000	$	64.1
February 20	Lake Barcroft Shopping Center(1)	Falls Church, VA	9,000		6.0

		Total	287,000	$	70.1

Year ended December 31, 2006
June 5	Greenlawn Plaza(2)	Huntington, NY	102,000	$	20.4
June 8	Barcroft Plaza	Falls Church, VA	90,000		25.1

		Total	192,000	$	45.5

(1)	The property acquired is adjacent to and operated as part of Barcroft Plaza which is also owned by the Partnership.

(2)	This property was acquired from the Trust.

On April 10, 2007, our unconsolidated real estate partnership entered into a mortgage note for approximately $4.2 million. The mortgage note is secured by the Lake Barcroft property, which was acquired in February 2007, and by Barcroft Plaza. The Lake Barcroft property is adjacent to and operated as part of Barcroft Plaza. The note matures on July 1, 2016, bears interest at 5.71% per annum and requires monthly payments of interest only.

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NOTE 5. ACQUIRED IN-PLACE LEASES

Acquired above market leases are included in prepaid expenses and other assets and had a balance of $17.6 million and $16.0 million at December 31, 2007 and 2006, respectively, and accumulated amortization of $4.7 million and $2.6 million at December 31, 2007 and 2006, respectively. Acquired below market leases are included in other liabilities and deferred credits and had a balance of $46.0 million and $41.4 million at December 31, 2007 and 2006, respectively, and accumulated amortization of $13.3 million and $8.2 million at December 31, 2007 and 2006, respectively. The value allocated to in-place leases is amortized over the related lease term and reflected as additional rental income for below market leases or a reduction of rental income for above market leases in the statement of operations. Rental income included net amortization from acquired in-place leases of $2.9 million, $2.5 million and $1.6 million in 2007, 2006 and 2005, respectively. The remaining weighted-average amortization period as of December 31, 2007, is 9.8 years and 13.4 years for above market leases and below market leases, respectively.

The amortization for acquired in-place leases during the next five years and thereafter, assuming no early lease terminations, is as follows:


	Above Market Leases		Below Market Leases
	(In thousands)
Year ending December 31,
2008	$	2,061	$	4,526
2009		1,725		3,329
2010		1,446		2,799
2011		1,211		2,512
2012		920		2,268
Thereafter		5,552		17,325

	$	12,915	$	32,759

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NOTE 6. DEBT

The following is a summary of our total debt outstanding as of December 31, 2007 and 2006:


	Principal Balance as of December 31,						Stated Interest Rate as of December 31, 2007		Maturity Date
Description of Debt	2007			2006
	(Dollars in thousands)
Mortgage loans
Leesburg Plaza	$	9,631		$	9,760		6.510	%	October 1, 2008
164 E. Houston Street		46			98		7.500	%	October 6, 2008
White Marsh Other		1,149			—		6.060	%	December 31, 2008
Mercer Mall		4,441			4,512		8.375	%	April 1, 2009
Federal Plaza		33,675			34,192		6.750	%	June 1, 2011
Tysons Station		6,217			6,366		7.400	%	September 1, 2011
White Marsh Plaza		10,350			—		6.040	%	April 1, 2013
Crow Canyon		21,588			21,945		5.400	%	August 11, 2013
Melville Mall		25,095			25,702		5.250	%	September 1, 2014
THE AVENUE at White Marsh		61,035			—		5.460	%	January 1, 2015
Barracks Road		41,988			42,614		7.950	%	November 1, 2015
Hauppauge		15,828			16,065		7.950	%	November 1, 2015
Lawrence Park		29,761			30,205		7.950	%	November 1, 2015
Wildwood		26,159			26,550		7.950	%	November 1, 2015
Wynnewood		30,330			30,782		7.950	%	November 1, 2015
Brick Plaza		31,128			31,631		7.415	%	November 1, 2015
Shoppers’ World		5,980			—		5.910	%	January 31, 2021
Mount Vernon		11,962			12,268		5.660	%	April 15, 2028
Bath		—			9,999		—		July 1, 2028
Chelsea		8,240			8,384		5.360	%	January 15, 2031

Subtotal		374,603			311,073
Net unamortized discount		(628	)		(36	)

Total mortgage loans		373,975			311,037

Notes payable
Term note		200,000			—		LIBOR+0.575	%	November 6, 2008
Revolving credit facility		—			98,000		LIBOR+0.425	%	July 27, 2010
Perring Plaza renovation		1,420			1,624		10.000	%	January 31, 2013
Escondido (Municipal bonds)		9,400			9,400		3.474	%	October 1, 2016

Total notes payable		210,820			109,024

Senior notes and debentures
6.125% notes		—			150,000		—		November 15, 2007
8.75% notes		175,000			175,000		8.750	%	December 1, 2009
4.50% notes		75,000			75,000		4.500	%	February 15, 2011
6.00% notes		175,000			175,000		6.000	%	July 15, 2012
5.40% notes		135,000			135,000		5.400	%	December 1, 2013
5.65% notes		125,000			125,000		5.650	%	June 1, 2016
6.20% notes		200,000			200,000		6.200	%	January 15, 2017
7.48% debentures		50,000			50,000		7.480	%	August 15, 2026
6.82% medium term notes		40,000			40,000		6.820	%	August 1, 2027

Subtotal		975,000			1,125,000
Net unamortized premium		2,556			2,508

Total senior notes and debentures		977,556			1,127,508

Capital lease obligations		76,109			95,116		Various		Various through 2106
Capital lease obligations of assets held for sale		—			54,245		Various		January 1, 2016

Total debt and capital lease obligations	$	1,638,460		$	1,696,930

F-21

In connection with the acquisition of the White Marsh portfolio and Shoppers’ World, we assumed five mortgage notes as follows:


Property	Fair Value (1)		Maturity Date	Stated Annual Interest Rate
	(In millions )
THE AVENUE at White Marsh	$	61.9	January 1, 2015	5.46	%
White Marsh Plaza	$	6.4	April 1, 2013	5.96	%
White Marsh Plaza	$	4.5	April 1, 2013	6.18	%
White Marsh Other	$	1.2	December 31, 2008	6.06	%
Shoppers’ World	$	6.0	January 31, 2021	5.91	%

(1)	The aggregate face amount of the mortgage notes is $79.7 million. However, in accordance with GAAP, these mortgage notes were recorded at their fair value of $80.0 million.

With the exception of one of the mortgage notes on White Marsh Plaza, all of the mortgage notes assumed require monthly payments of principal and interest. The $4.5 million mortgage note on White Marsh Plaza is interest only through the maturity date.

On October 26, 2007, we acquired the fee interest in Mid-Pike Plaza and Huntington Shopping Center and sold our leasehold interest in six properties, Allwood, Blue Star, Brunswick, Clifton, Hamilton and Rutgers Shopping Centers. Prior to the transaction, we had capital lease obligations totaling $76.4 million on all eight properties. The capital lease obligations were extinguished as part of the transaction. The capital lease obligations for the six properties sold are included in “capital lease obligations of assets held for sale” on the balance sheet.

On November 9, 2007, we entered into a $200 million unsecured term loan bearing interest at LIBOR plus 57.5 basis points. The loan matures on November 6, 2008, subject to a one-year extension at our option and is prepayable without penalty. The spread over LIBOR is subject to adjustment based on our credit rating. The loan had a weighted average interest rate of 5.3% for 2007.

On November 15, 2007, we repaid our 6.125% senior notes with a principal amount of $150.0 million. These notes were repaid with funds borrowed on our $200 million unsecured term loan.

The maximum amount of borrowings outstanding under our $300 million revolving credit facility during 2007, 2006 and 2005 was $244.0 million, $297.0 million and $159.7 million, respectively. The weighted average amount of borrowings outstanding was $154.3 million, $106.0 million and $105.1 million for 2007, 2006 and 2005, respectively. Our revolving credit facility had a weighted average interest rate, before amortization of debt fees, of 5.6%, 5.6% and 3.7% for 2007, 2006 and 2005, respectively. In addition, we are required to pay an annual facility fee of $0.5 million. The loan matures on July 27, 2010, subject to a one-year extension at our option.

Our credit facility and certain notes require us to comply with various financial covenants, including the maintenance of minimum shareholder’s equity and debt coverage ratios and a maximum ratio of debt to net worth. As of December 31, 2007, we were in compliance with all loan covenants.

F-22

Scheduled principal payments on mortgage loans, notes payable, senior notes and debentures as of December 31, 2007 are as follows:


	Mortgage Loans		Notes Payable			Senior Notes and Debentures		Total Principal
	(In thousands)
Year ending December 31,
2008	$	16,858	$	200,226	(1)	$	—	$	217,084
2009		11,232		250			175,000		186,482
2010		7,344		275	(2)		—		7,619
2011		44,645		304			75,000		119,949
2012		7,460		336			175,000		182,796
Thereafter(3)		287,064		9,429			550,000		846,493

	$	374,603	$	210,820		$	975,000	$	1,560,423	(4)

(1)	Includes $200 million outstanding on our term note which is subject to a one-year extension at our option.

(2)	Our $300 million four-year revolving credit facility is subject to a one-year extension at our option. As of December 31, 2007, there is $0 drawn under this credit facility.

(3)	Includes the Mount Vernon projected mortgage loan balance of $10.0 million as of April 15, 2013 that may be required to be paid on or after April 15, 2013. Amount also includes $50 million of unsecured debt that may be called by the holders beginning August 15, 2008.

(4)	The total debt maturities differs from the total reported on the consolidated balance sheet due to the unamortized discount or premium on certain senior notes, debentures and mortgage payables.

Future minimum lease payments and their present value for property under capital leases as of December 31, 2007, are as follows:


	(In thousands)
Year Ending December 31,
2008	$	6,939
2009		6,905
2010		6,905
2011		6,905
2012		6,914
Thereafter		233,956

		268,524
Less amount representing interest		(192,415	)

Present value	$	76,109

Certain of our capital lease obligations required payments based on the performance of the related properties in addition to the minimum payment amounts set forth above. The additional performance based payments were $4.1 million, $5.6 million and $4.6 million in 2007, 2006 and 2005, respectively and is included in “discontinued operations–income.” All capital leases with performance based payments were extinguished in October 2007.

NOTE 7. FAIR VALUE OF FINANCIAL INSTRUMENTS

Except as disclosed below, the carrying amount of our financial instruments approximates their fair value. The fair value of our mortgages payable, notes payable, and senior notes and debentures is sensitive to fluctuations in interest rates. Quoted market prices were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis is generally used to estimate the fair value of our mortgages and

F-23

notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the carrying amount and fair value of our mortgages payable, notes payable and senior notes and debentures is as follows:


	December 31, 2007				December 31, 2006
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In thousands)
Mortgages and notes payable	$	584,795	$	603,200	$	420,061	$	449,130
Senior notes	$	977,556	$	979,562	$	1,127,508	$	1,146,767

NOTE 8. COMMITMENTS AND CONTINGENCIES

We are currently a party to various legal proceedings. Other than as described below, we do not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on our financial position or overall trends in results of operations; however, litigation is subject to inherent uncertainties. Also under our leases, tenants are typically obligated to indemnify us from and against all liabilities, costs and expenses imposed upon or asserted against us (1) as owner of the properties due to certain matters relating to the operation of the properties by the tenant, and (2) where appropriate, due to certain matters relating to the ownership of the properties prior to their acquisition by us.

We are involved in a litigation matter relating to a shopping center in New Jersey where a former tenant has alleged that we and our management agent acted improperly by failing to disclose a condemnation action at the property that was pending when the lease was signed. A trial as to liability only has been concluded and post-trial briefs have been filed, but no decision has been rendered. One of the plaintiffs in the matter has filed for bankruptcy protection and as a result, the judge in our case has stayed further proceedings in the case. If we are found liable once the stay has been lifted, a trial will be held to determine the amount of damages. Based on the information available to us, we believe there is a reasonable possibility that we will be found liable. If a verdict is rendered against us, we may seek indemnification from the third party management company that negotiated the lease on our behalf. We cannot assess with any certainty at this time the potential damages for which we would be liable if a verdict is rendered against us or the potential amounts we might recover against the third party management company; however, if a verdict is rendered against us, there may be a material adverse impact on our net income in the period in which it becomes both probable that we will have to pay the damages and such damages can be reasonably estimated. In any event, management does not believe it will have a material impact on our financial position.

We also have one litigation matter filed against us in May 2003 which alleges that a one page document entitled “Final Proposal,” which included language that it was subject to approval of formal documentation, constituted a ground lease of a parcel of property located adjacent to our Santana Row property and gave the plaintiff the option to require that we acquire the property at a price determined in accordance with a formula included in the “Final Proposal.” A trial as to liability only was held in June 2006 and a jury rendered a verdict against us. A trial on the issue of damages has been set for April 2008. The complaint did not specify the amount of damages claimed. We have now received reports from our experts and the plaintiff’s experts which show potential damages ranging from $600,000 to $24 million. We cannot make a reasonable estimate of potential damages until discovery is completed on the damages issue and the court rules on various legal issues impacting the calculation of damages. We intend to appeal the jury verdict; however, no appeal of the judgment can be taken until the trial on damages has been completed. If we are not successful in overturning the jury verdict, we will be liable for damages. Depending on the amount of damages awarded, it is possible there could be a material adverse impact on our net income in the period in which it becomes both probable that we will have to pay the damages and such damages can be reasonably estimated. In any event, management does not believe it will have a material impact on our financial position.

F-24

We reserve for estimated losses, if any, associated with warranties given to a buyer at the time real estate is sold or other potential liabilities relating to that sale, taking any insurance policies into account. These warranties may extend up to ten years and require significant judgment. Any increases to our estimated warranty losses would usually result in a decrease in net income.

Warranty reserves for condominium units sold at Santana Row were established to cover potential costs for materials, labor and other items associated with warranty-type claims that may arise within the ten-year statutorily mandated latent construction defect warranty period. Our warranty and latent construction defect reserves are calculated based upon historical industry experience and current known factors. Variables used in the calculation of the warranty reserves, as well as the adequacy of the reserves based on the number of condominium units still under warranty, are reviewed on a periodic basis.

During the third and fourth quarters of 2007, we became aware of certain facts and circumstances that caused us to reassess our initial reserve for damages related to defective work done by third party contractors while upgrades were made to the units being prepared for sale. Based on current estimates, we believe the range of possible incremental cost is between $5.1 million and $9.3 million, net of taxes of $1.9 million and $2.6 million, respectively, before insurance recoveries. The full extent of damages and required repairs on any particular unit cannot be determined until we have evaluated whether there was defective work in the unit and determined the extent of damages (if any) caused by the defective work. We are still in the process of evaluating units for potential damage arising from the defective work and, to date, have completed the repairs caused by the defective work in only a limited number of units. The extent of the damages encountered in those units, and the resulting costs to repair, varied considerably. Accordingly, our current estimates are based on limited and varying actual costs. We are continuing our evaluation of this matter, and in 2007, we increased our reserves by $5.1 million, net of taxes of $1.9 million, to the low end of our estimated range of potential obligation related to these particular damages. This range excludes any amounts we may recover from insurance or the contractors responsible for the defective work. In the event that our evaluation allows us to develop a better estimate of these damages, we will adjust our estimate accordingly. This increase reduces our gain on sale of condominium units that were sold during 2005 and 2006. The increase in the reserve is included in “Discontinued operations—gain on sale of real estate”. The reserve is included in accounts payable and accrued expenses. Although we consider the reserve to be adequate, there can be no assurance that the reserve will prove to be adequate over time to cover losses due to the difference between the assumptions used to estimate the reserve and actual losses.

We are self-insured for general liability costs up to predetermined retained amounts per claim, and we believe that we maintain adequate accruals to cover our retained liability. We currently do not maintain third party stop-loss insurance policies to cover liability costs in excess of predetermined retained amounts. Our accrual for self-insurance liability is determined by management and is based on claims filed and an estimate of claims incurred but not yet reported. Management considers a number of factors, including third-party actuary valuations and future increases in costs of claims, when making these determinations. If our liability costs exceed these accruals, it will reduce our net income.

At December 31, 2007 and 2006, our reserves for warranties and general liability costs were $16.0 million and $10.4 million, respectively. Any potential losses which exceed our estimates would result in a decrease in our net income. During 2007 and 2006, we made payments from these reserves of $2.4 million and $1.0 million, respectively.

At December 31, 2007, we had letters of credit outstanding of approximately $10.6 million. The majority of these letters of credit are collateral for existing indebtedness and other obligations of the Trust.

Under the terms of the Congressional Plaza partnership agreement, from and after January 1, 1986, an unaffiliated third party has the right to require us and the two other minority partners to purchase between one-half to all of its 29.47% interest in Congressional Plaza at the interest’s then-current fair market value. Based on management’s current estimate of fair market value as of December 31, 2007, our estimated maximum liability upon exercise of the put option would range from approximately $46 million to $51 million.

F-25

Street Retail San Antonio LP, a wholly owned subsidiary of the Trust, entered into a Development Agreement (the “Agreement”) in 2000 with the City of San Antonio, Texas (the “City”) related to the redevelopment of land and buildings that we own along Houston Street. Under the Agreement, we are required to issue an annual letter of credit, commencing on October 1, 2002 and ending on September 30, 2014, that covers our designated portion of the debt service should the incremental tax revenue generated in the Zone not cover the debt service. We posted a letter of credit with the City on September 25, 2002 for $0.8 million, and the letter of credit remains outstanding. As of December 31, 2007, we have funded approximately $1.3 million related to this obligation. In anticipation of further shortfalls of incremental tax revenues to the City, we have accrued approximately $0.3 million as of December 31, 2007 to cover additional payments we may be obligated to make as part of the project costs.

Under the terms of various other partnership agreements for entities, the partners have the right to exchange their operating units for cash or the same number of our common shares, at our option. As of December 31, 2007, a total of 380,938 operating units are outstanding.

We have three leases in which the lessor has a put option, which would require us to purchase the properties during the remaining lease term. If the lessor were to exercise this option in 2008, the purchase price would be approximately $44.0 million.

A master lease for Mercer Mall includes a fixed purchase price option for $55 million in 2023. If we fail to exercise our purchase option, the owner of Mercer Mall has a put option which would require us to purchase Mercer Mall for $60 million in 2025.

A master lease for Melville Mall includes a fixed purchase price option in 2021 for $5 million and the assumption of the owner’s debt which is $25.1 million at December 31, 2007. If we fail to exercise our purchase option, the owner of Melville Mall has a put option which would require us to purchase Melville Mall in 2023 for $5 million and the assumption of the owner’s debt.

As of December 31, 2007 in connection with renovation and development projects, the Trust has contractual obligations of approximately $55.1 million.

We are obligated under ground lease agreements on several shopping centers requiring minimum annual payments as follows, as of December 31, 2007:


	(In thousands)
Year Ending December 31,
2008	$	4,796
2009		4,750
2010		4,759
2011		4,798
2012		4,723
Thereafter		265,715

	$	289,541

NOTE 9. SHAREHOLDERS’ EQUITY

On March 8, 2007, as part of the consideration to acquire the White Marsh portfolio, we issued (i) 884,066 common shares at $88.18 per share, par value $0.01 per share, (ii) 399,896 shares of 5.417% Series 1 Cumulative Convertible Preferred Shares (“Series 1 Preferred Shares”) at the liquidation preference of $25 per share, par value $0.01 per share, and (iii) 185,504 downREIT operating partnership units at $88.18 per share. The Series 1 Preferred Shares will accrue dividends at a rate of 5.417% per year and are convertible at any time by the holders to our common

F-26

shares at a conversion rate of $104.69 per share. The Series 1 Preferred Shares are also convertible under certain circumstances at our election. The holders of the Series 1 Preferred Shares have no voting rights.

On December 27, 2007, we issued 2.0 million common shares at $81.21 per share, for cash proceeds of approximately $162.4 million before other expenses of the offering. The proceeds were used on an interim basis to repay our revolving credit facility.

We have a Dividend Reinvestment Plan, whereby shareholders may use their dividends and optional cash payments to purchase shares. In 2007, 2006 and 2005, 32,615 shares, 44,077 shares and 62,579 shares, respectively, were issued under the Plan.

NOTE 10. DIVIDENDS

A summary of dividends declared and paid per share is as follows:


	Year Ended December 31,
	2007				2006						2005
	Declared		Paid		Declared			Paid			Declared			Paid
Common shares	$	2.370	$	2.335	$	2.460	(1)	$	2.440	(1)	$	2.370	(1)	$	2.320	(1)
5.417% Series 1 Cumulative Convertible Preferred (2)	$	1.106	$	0.767	$	—		$	—		$	—		$	—
8.5% Series B Cumulative Redeemable Preferred (3)	$	—	$	—	$	1.753		$	2.284		$	2.125		$	2.125

(1)	Includes a special dividend declared and paid of $0.20 resulting from the sales of condominiums at Santana Row.

(2)	On March 8, 2007, as part of the consideration to acquire the White Marsh portfolio, we issued 399,896 shares of 5.417% Series 1 Cumulative Convertible Preferred shares. The Series 1 Preferred are paid dividends on a quarterly basis at a rate of 5.417% per year.

(3)	On November 27, 2006, the Trust redeemed all 5,400,000 outstanding shares of its Series B Cumulative Redeemable Preferred Shares. Dividends on the Series B Preferred Shares ceased to accrue on November 27, 2006.

A summary of the income tax status of dividends per share paid is as follows:


	Year Ended December 31,
	2007		2006		2005
Common shares
Ordinary dividend	$	2.174	$	1.813	$	1.601
Ordinary dividend eligible for 15% rate		0.044		0.066		0.093
Return of capital		—		0.561		—
Capital gain		0.117		—		0.626

	$	2.335	$	2.440	$	2.320

5.417% Series 1 Cumulative Convertible Preferred
Ordinary dividend	$	0.714	$	—	$	—
Ordinary dividend eligible for 15% rate		0.015		—		—
Capital gain		0.038		—		—

	$	0.767	$	—	$	—

8.5% Series B Cumulative Redeemable Preferred
Ordinary dividend	$	—	$	2.284	$	1.551
Capital gain		—		—		0.574

	$	—	$	2.284	$	2.125

F-27

On October 31, 2007, the Trustees declared a quarterly cash dividend of $0.61 per common share, payable January 15, 2008 to common shareholders of record on January 2, 2008.

NOTE 11. OPERATING LEASES

Our 82 predominantly retail shopping center and mixed use properties at December 31, 2007 are located in 12 states and the District of Columbia. There are approximately 2,400 leases with tenants providing a wide range of retail products and services. These tenants range from sole proprietorships to national retailers; no one tenant or corporate group of tenants accounts for more than 2.5% of annualized base rent.

Our leases with commercial property and residential tenants are classified as operating leases. Commercial property leases generally range from three to ten years (certain leases with anchor tenants may be longer), and in addition to minimum rents, usually provide for percentage rents based on the tenant’s level of sales achieved and cost recoveries for the tenant’s share of certain operating costs. Leases on apartments are generally for a period of one year or less.

Minimum future commercial property rentals from noncancelable operating leases, before any reserve for uncollectible amounts and assuming no early lease terminations, at our operating properties as of December 31, 2007 are as follows:


	(In thousands)
Year Ending December 31,
2008	$	352,272
2009		329,477
2010		298,288
2011		260,944
2012		222,404
Thereafter		1,353,704

	$	2,817,089

NOTE 12. COMPONENTS OF RENTAL INCOME AND EXPENSE

The principal components of rental income are as follows:


	Year Ended December 31,
	2007		2006		2005
	(In thousands)
Minimum rents
Retail and commercial	$	347,938	$	311,631	$	285,764
Residential		15,312		12,805		7,407
Cost reimbursement		91,482		77,659		71,599
Percentage rent		7,884		6,921		5,879
Other		5,882		5,963		5,278

	$	468,498	$	414,979	$	375,927

Minimum rents include $8.2 million, $5.7 million and $7.9 million for 2007, 2006 and 2005, respectively, to recognize minimum rents on a straight-line basis. Straight-line rental income in 2005 includes the impact of changes in estimates of the collectibility of certain long-term receivables which increased straight-line rental income by $1.2 million. In addition, minimum rents include $2.9 million, $2.5 million and $1.6 million for 2007, 2006 and 2005, respectively, to recognize income from the amortization of in-place leases in accordance with SFAS No. 141.

F-28

The principal components of rental expense are as follows:


	Year Ended December 31,
	2007		2006		2005
	(In thousands)
Repairs and maintenance	$	35,416	$	28,378	$	25,811
Utilities		16,837		14,814		13,821
Management fees and costs		13,127		12,479		11,384
Payroll properties		7,448		6,904		7,242
Insurance		6,891		5,493		5,763
Ground rent		6,002		6,041		5,278
Marketing		4,539		3,953		4,118
Other operating		10,129		6,701		8,638

	$	100,389	$	84,763	$	82,055

NOTE 13. DISCONTINUED OPERATIONS

Results of properties sold constitute discontinued operations and as such, the operations of these properties are classified as discontinued operations for all periods presented. A summary of the financial information for the discontinued operations is as follows:


	Year Ended December 31,
	2007		2006		2005
	(In thousands)
Revenue from discontinued operations	$	21,221	$	24,331	$	25,117
Income from discontinued operations	$	4,389	$	4,204	$	617

NOTE 14. SHARE-BASED COMPENSATION PLANS

A summary of share-based compensation expense included in net income is as follows:


	Year Ended December 31,
	2007			2006			2005
	(In thousands)
Share-based compensation incurred
Grants of common shares	$	6,867		$	5,156		$	3,992
Grants of options		1,173			1,334			—

		8,040			6,490			3,992
Capitalized share-based compensation		(805	)		(620	)		—

Share-based compensation expensed	$	7,235		$	5,870		$	3,992

As of December 31, 2007, we have grants outstanding under two share-based compensation plans. In May 2007, our shareholders approved an amendment to the 2001 Long Term Incentive Plan (“the 2001 Plan”), originally established in May 2001, which increased the authorization to grant share options, common shares and other share-based awards from 1,750,000 shares of common stock to 3,250,000 shares of common stock. Our 1993 Long Term Incentive Plan (‘the 1993 Plan”) authorized the grant of share options, common shares and other share-based awards for up to 5,500,000 shares of common stock. The 1993 Plan expired in May 2003.

Option awards under the 2001 Plan and the 1993 Plan are required to have an exercise price at least equal to the closing trading price of our common shares on the date of grant. Options and share awards under these plans

F-29

generally vest over 3 to 5 years and option awards typically have a 10-year contractual term. We pay dividends on unvested shares. Certain options and share awards provide for accelerated vesting if there is a change in control. Additionally, the vesting on certain option and share awards can accelerate in part or in full upon retirement based on the age of the retiree or upon termination without cause.

As a result of the exercise of options, we had notes outstanding from our officers and employees for $0.8 million and $1.5 million at December 31, 2007 and 2006, respectively. These notes bear interest at LIBOR plus a market-rate spread with the rate adjusted annually on the anniversary date. These notes are collateralized by the shares with recourse to the borrower and have five-year terms. Option awards made in 2001 and later do not provide for employees to be able to exercise their options with a loan from the Trust.

The fair value of each option award is estimated on the date of grant using the Black-Scholes model. Expected volatilities, term, dividend yields, employee exercises and employee terminations are primarily based on historical data. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The fair value of each share award is determined based on the closing trading price of our common shares on the grant date.

The following table provides a summary of the weighted-average assumption used to value options:


	Year Ended December 31,
	2007		2006		2005
Volatility	20.0	%	18.7	%	18.0	%
Expected dividend yield	3.4	%	4.9	%	3.8	%
Expected term (in years)	4.1		3.8		5.0
Risk free interest rate	4.7	%	4.6	%	4.1	%

The following table provides a summary of option activity for 2007:


	Shares Under Option		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
					(In years)	(In thousands)
Outstanding at December 31, 2006	909,081		$	46.36
Granted	69,404			89.84
Exercised	(106,117	)		47.75
Forfeited or expired	(21,740	)		69.98

Outstanding at December 31, 2007	850,628		$	49.13	5.8	$	28,654

Exercisable at December 31, 2007	499,572		$	33.30	4.1	$	24,412

The weighted-average grant-date fair value of options granted during 2007, 2006 and 2005 was $14.48 per share, $7.97 per share and $7.01 per share, respectively. The total cash received from options exercised during 2007, 2006 and 2005 was $5.1 million, $8.8 million and $10.9 million, respectively. The total intrinsic value of options exercised during the year ended December 31, 2007 and 2006 was $4.1 million and $10.9 million, respectively.

F-30

The following table provides a summary of share activity for 2007:


	Shares		Weighted-Average Grant-Date Fair Value
Unvested at December 31, 2006	203,694		$	49.43
Granted	127,867			91.13
Vested	(130,829	)		47.46
Forfeited	(2,326	)		83.91

Unvested at December 31, 2007	198,406		$	77.21

The weighted-average grant-date fair value of stock awarded in 2007, 2006 and 2005 was $91.13, $68.18 and $51.35, respectively. The total vesting-date fair value of shares vested during the year ended December 31, 2007 and 2006 was $10.7 million and $7.0 million, respectively.

As of December 31, 2007, there was $12.4 million of total unrecognized compensation cost related to unvested share-based compensation arrangements (i.e. options and unvested shares) granted under our plans. This cost is expected to be recognized over the next 4.9 years with a weighted-average period of 1.4 years.

Effective December 31, 2007, Larry Finger, our former Chief Financial Officer, was no longer employed by the Trust. Under his existing severance agreement, his departure was treated as a termination without cause. As a result, we recognized approximately $0.6 million related to the accelerated vesting of unvested shares and options and $0.4 million related to a cash payment to Mr. Finger. These amounts are included in general and administrative expenses in the consolidated statement of income.

On February 10, 2008, common shares and options were awarded under various incentive compensation plans as

follows:


Award	Vesting Term	Beneficiary
91,896 Restricted shares	3 to 6 years	Officers and key employees
202,117 Options	3 to 6 years	Officers and key employees
4,115 Shares	Immediate	Trustees

NOTE 15. SAVINGS AND RETIREMENT PLANS

We have a savings and retirement plan in accordance with the provisions of Section 401(k) of the Internal Revenue Code. Generally, employees can elect, at their discretion, to contribute a portion of their compensation up to a maximum of $15,500, $15,000 and $14,000 for 2007, 2006 and 2005, respectively. Under the plan, we contribute 50% of each employee’s first 5% of contributions. In addition, we may make discretionary contributions within the limits of deductibility set forth by the Code. Our employees are immediately eligible to become plan participants. Effective as of January 1, 2005 employees are eligible to receive matching contributions immediately on their participation, however, these matching payments will not vest until their first anniversary of employment. Our expense for the years ended December 31, 2007, 2006 and 2005 was approximately $365,000, $342,000 and $333,000, respectively.

A non-qualified deferred compensation plan for our officers and certain other employees was established in 1994. The plan allows the participants to defer income until the earlier of age 65 or termination of employment. As of December 31, 2007, we are liable to participants for approximately $6.2 million under this plan. Although this is an unfunded plan, we have purchased certain investments to match this obligation. Our obligation under this plan and the related investments are both included in the accompanying financial statements.

F-31

NOTE 16. EARNINGS PER SHARE

We calculate basic and diluted earnings per share in accordance with SFAS No. 128, “Earnings Per Share.” Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income available for common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares and then shared in our earnings. In 2007, 2006 and 2005, operating partnership units and Series 1 Preferred Shares were excluded from diluted EPS as the conversion of these units would have resulted in an anti-dilutive effect.

The following table sets forth the reconciliation between basic and diluted EPS:


	Year Ended December 31,
	2007			2006			2005
	(In thousands, except per share data)
NUMERATOR
Income from continuing operations	$	96,380		$	90,552		$	83,247
Preferred stock dividends		(442	)		(10,423	)		(11,475	)
Preferred stock redemption costs		—			(4,775	)		—

Income from continuing operations available for common shareholders		95,938			75,354			71,772
Discontinued operations – income		4,389			4,204			617
Discontinued operations – gain on sale of real estate		94,768			16,515			30,748
Gain on sale of real estate		—			7,441			—

Net income available for common shareholders, basic and dilutive	$	195,095		$	103,514		$	103,137

DENOMINATOR
Weighted average common shares outstanding—basic		56,108			53,469			52,533
Effect of dilutive securities:
Stock options		365			389			517
Unvested stock		70			104			—

Weighted average common shares outstanding—dilutive		56,543			53,962			53,050

EARNINGS PER COMMON SHARE, BASIC
Continuing operations	$	1.71		$	1.41		$	1.36
Discontinued operations		1.77			0.39			0.60
Gain on sale of real estate		—			0.14			—

	$	3.48		$	1.94		$	1.96

EARNINGS PER COMMON SHARE, DILUTED
Continuing operations	$	1.70		$	1.40		$	1.35
Discontinued operations		1.75			0.38			0.59
Gain on sale of real estate		—			0.14			—

	$	3.45		$	1.92		$	1.94

F-32

NOTE 17. SEGMENT INFORMATION

We operate our portfolio of properties in two geographic operating regions: East and West, which constitute our segments under Statement of Financial Accounting Standard No. 131, “Disclosures about Segments of an Enterprise and Related Information.”

A summary of our operations by geographic region is presented below:


	Year Ended December 31, 2007
	East			West			Other			Total
	(In thousands)
Rental income	$	363,698		$	104,800		$	—		$	468,498
Other property income		9,156			3,678			—			12,834
Mortgage interest income		3,003			1,557			—			4,560
Rental expenses		(70,510	)		(29,879	)		—			(100,389	)
Real estate taxes		(37,643	)		(9,591	)		—			(47,234	)

Property operating income		267,704			70,565			—			338,269
General and administrative expense		—			—			(25,575	)		(25,575	)
Depreciation and amortization		(70,348	)		(30,285	)		(1,042	)		(101,675	)
Other interest income		754			167			—			921
Interest expense		—			—			(111,365	)		(111,365	)
Income from real estate partnership		—			—			1,395			1,395

Income from continuing operations before minority interests	$	198,110		$	40,447		$	(136,587	)	$	101,970
Minority interests		—			—			(5,590	)		(5,590	)
Discontinued operations—income		—			—			4,389			4,389
Discontinued operations—gain on sale of real estate		—			—			94,768			94,768

Net income	$	198,110		$	40,447		$	(43,020	)	$	195,537

Total assets	$	1,988,181		$	887,112		$	114,004		$	2,989,297


	Year Ended December 31, 2006
	East			West			Other			Total
	(In thousands)
Rental income	$	318,176		$	96,803		$	—		$	414,979
Other property income		4,589			2,872			—			7,461
Mortgage interest income		3,163			1,932			—			5,095
Rental expenses		(56,797	)		(27,966	)		—			(84,763	)
Real estate taxes		(32,163	)		(9,035	)		—			(41,198	)

Property operating income		236,968			64,606			—			301,574
General and administrative expense		—			—			(21,340	)		(21,340	)
Depreciation and amortization		(61,602	)		(29,433	)		(1,758	)		(92,793	)
Other interest income		1,649			393			—			2,042
Interest expense		—			—			(95,234	)		(95,234	)
Income from real estate partnership		—			—			656			656

Income from continuing operations before minority interests	$	177,015		$	35,566		$	(117,676	)	$	94,905
Minority interests		—			—			(4,353	)		(4,353	)
Discontinued operations—income		—			—			4,204			4,204
Discontinued operations—gain on sale of real estate		—			—			16,515			16,515
Gain on sale of real estate		—			—			7,441			7,441

Net income	$	177,015		$	35,566		$	(93,869	)	$	118,712

Total assets	$	1,745,273		$	881,676		$	61,657		$	2,688,606

F-33


	Year Ended December 31, 2005
	East			West			Other			Total
	(In thousands)
Rental income	$	292,688		$	83,239		$	—		$	375,927
Other property income		4,153			5,358			—			9,511
Mortgage interest income		2,817			2,553			—			5,370
Rental expenses		(55,619	)		(26,436	)		—			(82,055	)
Real estate taxes		(29,687	)		(6,762	)		—			(36,449	)

Property operating income		214,352			57,952			—			272,304
General and administrative expense		—			—			(19,909	)		(19,909	)
Depreciation and amortization		(58,000	)		(25,067	)		(1,454	)		(84,521	)
Other interest income		1,674			57			—			1,731
Interest expense		—			—			(81,617	)		(81,617	)
Income from real estate partnership		—			—			493			493

Income from continuing operations before minority interests	$	158,026		$	32,942		$	(102,487	)	$	88,481
Minority interests		—			—			(5,234	)		(5,234	)
Discontinued operations—income		—			—			617			617
Gain on sale of real estate		—			—			30,748			30,748

Net income	$	158,026		$	32,942		$	(76,356	)	$	114,612

NOTE 18. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial data is as follows:


	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(In thousands, except per share data)
2007
Revenue (1)	$	115,263	$	118,954	$	124,281	$	127,394
Net income	$	23,136	$	26,718	$	23,515	$	122,168
Net income available for common shareholders	$	23,100	$	26,583	$	23,379	$	122,033
Earnings per common share—basic	$	0.42	$	0.47	$	0.42	$	2.16
Earnings per common share—diluted	$	0.41	$	0.47	$	0.41	$	2.14

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(In thousands, except per share data)
2006
Revenue (1)	$	103,373	$	103,778	$	107,426	$	112,958
Net income	$	31,031	$	38,256	$	24,984	$	24,441
Net income available for common shareholders	$	28,162	$	35,387	$	22,115	$	17,850
Earnings per common share—basic	$	0.53	$	0.67	$	0.42	$	0.32
Earnings per common share—diluted	$	0.53	$	0.66	$	0.41	$	0.32

(1)	As required by SFAS No. 144, revenue has been reduced to reflect the results of discontinued operations. Revenue from discontinued operations, by quarter, is summarized as follows:


	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(In thousands)
2007 revenue from discontinued operations	$	7,737	$	6,092	$	5,708	$	1,684
2006 revenue from discontinued operations	$	5,579	$	5,288	$	5,915	$	7,549

F-34

FEDERAL REALTY INVESTMENT TRUST

SCHEDULE III

SUMMARY OF REAL ESTATE AND ACCUMULATED

DEPRECIATION

December 31, 2007

(Dollars in thousands)


COLUMN A		COLUMN B		COLUMN C				COLUMN D		COLUMN E						COLUMN F		COLUMN G	COLUMN H	COLUMN I
Descriptions		Encumbrance		Initial cost to company				Cost Capitalized Subsequent to Acquisition		Gross amount at which carried at close of period						Accumulated Depreciation and Amortization		Date of Construction	Date Acquired	Life on which depreciation in latest income statements is computed
		Land		Building and Improvements			Land		Building and Improvements		Total
150 POST STREET (San Francisco)	CA	$	—	$	11,685	$	9,181	$	16,350	$	11,685	$	25,531	$	37,216	$	7,678	1908	10/23/97	35 years
7770 RICHMOND HIGHWAY (Virginia)	VA		—		1,025		9,018		2		1,004		9,041		10,045		517	1974	01/27/06	35 years
ANDORRA (Pennsylvania)	PA		—		2,432		12,346		8,219		2,432		20,565		22,997		11,551	1953	01/12/88	35 years
ASSEMBLY SQUARE (Massachusetts)	MA		—		38,319		34,196		50,379		39,069		83,825		122,894		5,274	2005	2005-2007	35 years
THE AVENUE AT WHITE MARSH (Maryland)	MD		61,094		20,682		72,432		206		20,682		72,638		93,320		2,165	1997	03/08/07	35 years
BALA CYNWYD (Pennsylvania)	PA		—		3,565		14,466		8,520		3,566		22,985		26,551		9,306	1955	09/22/93	35 years
BARRACKS ROAD (Virginia)	VA		41,988		4,363		16,459		23,010		4,363		39,469		43,832		26,960	1958	12/31/85	35 years
BETHESDA ROW (Maryland)	MD		12,576		17,448		24,944		109,500		15,749		136,143		151,892		23,588	1945-2007	12/31/93 & 01/20/06	35-50 years
BRICK PLAZA (New Jersey)	NJ		31,128		—		24,715		31,285		3,788		52,212		56,000		30,043	1958	12/28/89	35 years
BRISTOL (Connecticut)	CT		—		3,856		15,959		4,701		3,856		20,660		24,516		7,779	1959	09/22/95	35 years
CHELSEA COMMONS (Massachusetts)	MA		7,833		5,232		15,396		13		5,137		15,504		20,641		575	1962/1969	08/25/06 & 01/30/07	35 years
CONGRESSIONAL PLAZA (Maryland)	MD		—		2,793		7,424		57,986		1,020		67,183		68,203		32,670	1965/2003	04/01/65	35 years
COURTHOUSE CENTER (Maryland)	MD		—		1,750		1,869		730		1,750		2,599		4,349		938	1975	12/17/97	35 years
CROSSROADS (Illinois)	IL		—		4,635		11,611		6,673		4,635		18,284		22,919		8,805	1959	07/19/93	35 years
CROW CANYON COMMONS (California)	CA		21,588		8,638		54,575		1,259		8,638		55,834		64,472		3,106	Late 1970’s/2006	12/29/05 & 02/28/07	35 years
DEDHAM PLAZA (Massachusetts)	MA		—		12,287		12,918		5,110		12,287		18,028		30,315		8,212	1959	12/31/93	35 years
EASTGATE (North Carolina)	NC		—		1,608		5,775		15,376		1,608		21,151		22,759		9,769	1963	12/18/86	35 years
ELLISBURG CIRCLE (New Jersey)	NJ		—		4,028		11,309		11,912		4,013		23,236		27,249		12,313	1959	10/16/92	35 years

F-35

FEDERAL REALTY INVESTMENT TRUST

SCHEDULE III

SUMMARY OF REAL ESTATE AND ACCUMULATED

DEPRECIATION—CONTINUED

December 31, 2007

(Dollars in thousands)


COLUMN A		COLUMN B	COLUMN C			COLUMN D		COLUMN E			COLUMN F	COLUMN G	COLUMN H	COLUMN I
Descriptions		Encumbrance	Initial cost to company			Cost Capitalized Subsequent to Acquisition		Gross amount at which carried at close of period			Accumulated Depreciation and Amortization	Date of Construction	Date Acquired	Life on which depreciation in latest income statements is computed
		Land	Building and Improvements		Land		Building and Improvements	Total
ESCONDIDO PROMENADE (California)	CA	—	11,505	12,147		4,354		11,505	16,501	28,006	4,744	1987	12/31/96	35 years
FALLS PLAZA (Virginia)	VA	—	1,798	1,270		8,522		1,819	9,771	11,590	5,765	1960/1962	09/30/67 & 10/05/72	25 years
FEASTERVILLE (Pennsylvania)	PA	—	1,431	1,600		8,733		1,452	10,312	11,764	6,865	1958	07/23/80	20 years
FEDERAL PLAZA (Maryland)	MD	33,675	10,216	17,895		34,002		10,216	51,897	62,113	26,233	1970	06/29/89	35 years
FIFTH AVENUE (California) (4)	CA	—	3,844	1,352		7,742		3,874	9,064	12,938	2,833	1888-1995	1996-1997	35 years
FINLEY SQUARE (Illinois)	IL	—	9,252	9,544		10,420		9,252	19,964	29,216	9,621	1974	04/27/95	35 years
FLOURTOWN (Pennsylvania)	PA	—	1,345	3,943		7,749		1,495	11,542	13,037	6,236	1957	04/25/80	35 years
FOREST HILLS (New York) (1)	NY	—	2,885	2,885		2,309		3,010	5,069	8,079	1,628	1937-1987	12/16/97	35 years
FRESH MEADOWS (New York)	NY	—	24,625	25,255		18,240		24,627	43,493	68,120	15,428	1946-1949	12/05/97	35 years
FRIENDSHIP CTR (District of Columbia)	DC	—	12,696	20,803		(170	)	12,696	20,633	33,329	3,748	1998	09/21/01	35 years
GAITHERSBURG SQUARE (Maryland)	MD	—	7,701	5,271		10,877		5,973	17,876	23,849	10,726	1966	04/22/93	35 years
GARDEN MARKET (Illinois)	IL	—	2,677	4,829		4,009		2,677	8,838	11,515	3,661	1958	07/28/94	35 years
GOVERNOR PLAZA (Maryland)	MD	—	2,068	4,905		14,034		2,068	18,939	21,007	10,676	1963	10/01/85	35 years
GRATIOT PLAZA (Michigan)	MI	—	525	1,601		16,007		525	17,608	18,133	9,205	1964	03/29/73	25 3/4 years
GREENWICH AVENUE (Connecticut) (2)	CT	—	8,064	6,866		1,068		8,064	7,934	15,998	2,793	1900-1993	1995	35 years
HAUPPAUGE (New York)	NY	15,828	8,791	15,262		3,458		8,791	18,720	27,511	5,117	1963	08/06/98	35 years
HOUSTON STREET (Texas) (9)	TX	46	14,680	1,976		45,712		14,778	47,590	62,368	12,797	var	1998-1999	35 years
HUNTINGTON (New York)	NY	—	—	16,008		21,747		11,713	26,042	37,755	5,524	1962	12/12/88 & 10/26/07	35 years

F-36

FEDERAL REALTY INVESTMENT TRUST

SCHEDULE III

SUMMARY OF REAL ESTATE AND ACCUMULATED

DEPRECIATION—CONTINUED

December 31, 2007

(Dollars in thousands)


COLUMN A		COLUMN B	COLUMN C			COLUMN D		COLUMN E				COLUMN F	COLUMN G	COLUMN H	COLUMN I
Descriptions		Encumbrance	Initial cost to company			Cost Capitalized Subsequent to Acquisition		Gross amount at which carried at close of period				Accumulated Depreciation and Amortization	Date of Construction	Date Acquired	Life on which depreciation in latest income statements is computed
		Land	Building and Improvements		Land		Building and Improvements		Total
IDYLWOOD PLAZA (Virginia)	VA	—	4,308	10,026		1,205		4,308		11,231	15,539	4,426	1991	04/15/94	35 years
KINGS COURT (California)	CA	—	—	10,714		809		—		11,523	11,523	4,299	1960	08/24/98	26 years
LANCASTER (Pennsylvania)	PA	4,907	—	2,103		8,769		—		10,872	10,872	5,622	1958	04/24/80	22 years
LANGHORNE SQUARE (Pennsylvania)	PA	—	720	2,974		14,982		720		17,956	18,676	9,056	1966	01/31/85	35 years
LAUREL (Maryland)	MD	—	7,458	22,525		17,391		7,576		39,798	47,374	24,859	1956	08/15/86	35 years
LAWRENCE PARK (Pennsylvania)	PA	29,761	5,723	7,160		16,170		5,734		23,319	29,053	18,732	1972	07/23/80	22 years
LEESBURG PLAZA (Virginia)	VA	9,631	8,184	10,722		14,950		8,184		25,672	33,856	4,535	1967	09/15/98	35 years
LINDEN SQUARE (Massachusetts)	MA	—	79,382	19,247		33,169		79,370		52,428	131,798	496	1960-2007	08/24/06	35 years
LOEHMANN’S PLAZA (Virginia)	VA	—	1,237	15,096		14,397		1,248		29,482	30,730	17,019	1971	07/21/83	35 years
MELVILLE MALL (New York)	NY	24,573	35,622	32,882		6		35,622		32,888	68,510	1,174	1974	10/16/06	35 years
MERCER MALL (New Jersey)	NJ	56,827	4,488	70,076		29,481		5,032		99,013	104,045	14,122	1975	10/14/03	25-35 years
MID PIKE PLAZA (Maryland)	MD	—	—	10,335		33,468		7,517		36,286	43,803	3,854	1963	05/18/82 & 10/26/07	50 years
MOUNT VERNON PLAZA (Virginia)	VA	11,962	—	19,401		24,380		—		43,781	43,781	4,964	1972	03/31/03	35 years
TOWN CENTER OF NEW BRITAIN (Pennsylvania)	PA	—	1,282	12,285		384		1,262		12,689	13,951	559	1969	06/29/06	35 years
NORTH DARTMOUTH (Massachusetts)	MA	—	27,214	—		—		27,214		—	27,214	—	2004	08/24/06	—
NORTHEAST (Pennsylvania)	PA	—	1,152	10,596		9,943		1,153		20,538	21,691	13,417	1959	08/30/83	35 years
NORTH LAKE COMMONS (Illinois)	IL	—	2,782	8,604		2,021		2,628		10,779	13,407	4,278	1989	04/27/94	35 years
OLD KEENE MILL (Virginia)	VA	—	638	998		4,071		638		5,069	5,707	4,360	1968	06/15/76	33 1/3 years
OLD TOWN CENTER (California)	CA	—	3,420	2,765		27,472		3,420		30,237	33,657	11,074	1962, 1997-1998	10/22/97	35 years

F-37

FEDERAL REALTY INVESTMENT TRUST

SCHEDULE III

SUMMARY OF REAL ESTATE AND ACCUMULATED

DEPRECIATION—CONTINUED

December 31, 2007

(Dollars in thousands)


COLUMN A		COLUMN B	COLUMN C			COLUMN D		COLUMN E				COLUMN F	COLUMN G	COLUMN H	COLUMN I
Descriptions		Encumbrance	Initial cost to company			Cost Capitalized Subsequent to Acquisition		Gross amount at which carried at close of period				Accumulated Depreciation and Amortization	Date of Construction	Date Acquired	Life on which depreciation in latest income statements is computed
		Land	Building and Improvements		Land		Building and Improvements		Total
OTHER (California) (5)	CA	—	19,496	25,752		15,172		14,930		45,490	60,420	8,869	var	1996-1999	35 years
PAN AM SHOPPING CENTER (Virginia)	VA	—	8,694	12,929		6,222		8,695		19,150	27,845	8,813	1979	02/05/93	35 years
PENTAGON ROW (Virginia)	VA	—	—	2,955		84,942		—		87,897	87,897	19,404	1999-2002	1998	35 years
PERRING PLAZA (Maryland)	MD	—	2,800	6,461		17,157		2,800		23,618	26,418	14,850	1963	10/01/85	35 years
PIKE 7 (Virginia)	VA	—	9,709	22,799		2,139		9,709		24,938	34,647	8,260	1968	03/31/97	35 years
QUEEN ANNE PLAZA (Massachusetts)	MA	—	3,319	8,457		3,256		3,319		11,713	15,032	5,702	1967	12/23/94	35 years
QUINCE ORCHARD PLAZA (Maryland)	MD	—	3,197	7,949		9,112		2,928		17,330	20,258	9,737	1975	04/22/93	35 years
ROCKVILLE TOWN SQUARE (Maryland)	MD	—	—	8,092		19,341		—		27,433	27,433	491	2005-2007	2006-2007	50 years
ROLLINGWOOD APTS. (Maryland)	MD	—	552	2,246		4,268		572		6,494	7,066	6,183	1960	01/15/71	25 years
SAM’S PARK & SHOP (District of Columbia)	DC	—	4,840	6,319		1,067		4,840		7,386	12,226	2,897	1930	12/01/95	35 years
SANTANA ROW (California)	CA	—	41,969	1,161		428,085		49,725		421,490	471,215	46,863	1999-2006	03/05/97	40-50 years
SAUGUS (Massachusetts)	MA	—	4,383	8,291		936		4,383		9,227	13,610	3,243	1976	10/01/96	35 years
SHIRLINGTON (Virginia)	VA	6,240	9,761	14,808		21,307		5,798		40,078	45,876	9,138	1940	12/21/95	35 years
SHOPPERS’ WORLD (Virginia)	VA	5,926	10,211	18,863		15		10,211		18,878	29,089	376	1975-2001	05/30/07	35 years
THE SHOPPES AT NOTTINGHAM SQUARE (Maryland)	MD	—	2,928	12,849		7		2,928		12,856	15,784	370	2005-2006	03/08/07	35 years
SOUTH VALLEY SHOPPING CENTER (Virginia)	VA	—	9,043	5,082		8,877		9,143		13,859	23,002	1,741	1966	03/21/03	35 years
THIRD STREET PROMENADE (California) (9)	CA	—	22,645	12,709		42,160		24,668		52,846	77,514	17,039	1888-2000	1996-2000	35 years

F-38

FEDERAL REALTY INVESTMENT TRUST

SCHEDULE III

SUMMARY OF REAL ESTATE AND ACCUMULATED

DEPRECIATION—CONTINUED

December 31, 2007

(Dollars in thousands)


COLUMN A		COLUMN B		COLUMN C				COLUMN D		COLUMN E						COLUMN F		COLUMN G	COLUMN H	COLUMN I
Descriptions		Encumbrance		Initial cost to company				Cost Capitalized Subsequent to Acquisition		Gross amount at which carried at close of period						Accumulated Depreciation and Amortization		Date of Construction	Date Acquired	Life on which depreciation in latest income statements is computed
		Land		Building and Improvements			Land		Building and Improvements		Total
TOWER (Virginia)	VA		—		7,170		10,518		2,068		7,129		12,627		19,756		3,863	1953-1960	08/24/98	35 years
TROY (New Jersey)	NJ		—		3,126		5,193		14,195		4,028		18,486		22,514		14,217	1966	07/23/80	22 years
TYSONS STATION (Virginia)	VA		6,217		388		453		2,658		475		3,024		3,499		2,850	1954	01/17/78	17 years
WESTGATE MALL (California)	CA		—		6,319		107,284		2,158		6,319		109,442		115,761		10,213	1960-1966	03/31/04	35 years
WHITE MARSH PLAZA (Maryland)	MD		10,643		3,478		21,413		6		3,478		21,419		24,897		657	1987	03/08/07	35 years
WHITE MARSH OTHER (Maryland)	MD		1,152		61,913		1,843		1		61,913		1,844		63,757		60	1985	03/08/07	35 years
WILDWOOD (Maryland)	MD		26,159		9,111		1,061		7,478		9,111		8,539		17,650		7,052	1958	05/05/69	33 1/3 years
WILLOW GROVE (Pennsylvania)	PA		—		1,499		6,643		18,677		1,499		25,320		26,819		16,744	1953	11/20/84	35 years
WILLOW LAWN (Virginia)	VA		—		3,192		7,723		64,209		7,790		67,334		75,124		34,239	1957	12/05/83	35 years
WYNNEWOOD (Pennsylvania)	PA		30,330		8,055		13,759		14,239		8,055		27,998		36,053		11,137	1948	10/29/96	35 years

TOTALS		$	450,084	$	709,857	$	1,130,126	$	1,612,864	$	735,889	$	2,716,958	$	3,452,847	$	756,703

F-39

FEDERAL REALTY INVESTMENT TRUST

SCHEDULE III

SUMMARY OF REAL ESTATE AND ACCUMULATED

DEPRECIATION—CONTINUED

Three Years Ended December 31, 2007

Reconciliation of Total Cost

(In thousands)


Balance, December 31, 2004	$	2,666,276
Additions during period
Acquisitions		119,194
Improvements		157,104
Deduction during period—disposition and retirements of property		(113,253	)

Balance, December 31, 2005	$	2,829,321
Additions during period
Acquisitions		317,287
Improvements		112,930
Deduction during period—disposition and retirements of property		(55,280	)

Balance, December 31, 2006	$	3,204,258
Additions during period
Acquisitions		313,934
Improvements		140,613
Deduction during period—disposition and retirements of property		(205,958	)

Balance, December 31, 2007	$	3,452,847

(A)	For Federal tax purposes, the aggregate cost basis is approximately $2.9 billion as of December 31, 2007.

F-40

FEDERAL REALTY INVESTMENT TRUST

SCHEDULE III

SUMMARY OF REAL ESTATE AND ACCUMULATED

DEPRECIATION—CONTINUED

Three Years Ended December 31, 2007

Reconciliation of Accumulated

Depreciation and Amortization

(In thousands)


Balance, December 31, 2004	$	595,338
Additions during period—depreciation and amortization expense		83,656
Deductions during period—disposition and retirements of property		(15,244	)

Balance, December 31, 2005	$	663,750
Additions during period—depreciation and amortization expense		89,564
Deductions during period—disposition and retirements of property		(12,807	)

Balance, December 31, 2006	$	740,507
Additions during period—depreciation and amortization expense		96,454
Deductions during period—disposition and retirements of property		(80,258	)

Balance, December 31, 2007	$	756,703

F-41

FEDERAL REALTY INVESTMENT TRUST

SCHEDULE IV

MORTGAGE LOANS ON REAL ESTATE

Year Ended December 31, 2007

(Dollars in thousands)


Column A	Column B	Column C	Column D	Column E	Column F		Column G
Description of Lien	Interest Rate	Maturity Date	Periodic Payment Terms	Prior Liens	Face Amount of Mortgages		Carrying Amount of Mortgages (1)
Mortgage on Hotel in San Jose, CA	9%	August 2016	Principal and interest; balloon payment due at maturity (2)	—	$	16,940	$	12,326

Mortgage on retail buildings in Philadelphia, PA	Greater of prime plus 2% or 10% plus participation	May 2021	Interest only monthly; balloon payment due at maturity	—		19,062		19,062	(3)

Mortgage on retail buildings in Philadelphia, PA	10% plus participation	May 2021	Interest only; balloon payment due at maturity	—		9,250		9,250

					$	45,252	$	40,638

(1)	For Federal tax purposes, the aggregate tax basis is approximately $45.3 million as of December 31, 2007.

(2)	This note was amended on August 4, 2006. The amended note decreased the interest from 14% to 9% per annum, and requires monthly payments of principal and interest based on 15-year amortization schedule.

(3)	This mortgage is available for up to $25.0 million.

F-42

FEDERAL REALTY INVESTMENT TRUST

SCHEDULE IV

MORTGAGE LOANS ON REAL ESTATE—CONTINUED

Three Years Ended December 31, 2007

Reconciliation of Carrying Amount

(In thousands)


Balance, December 31, 2004	$	42,909
Additions during period:
Issuance of loans		4,974
Deductions during period:
Collection and satisfaction of loans		(6,871	)
Allowance for collectibility		(481	)

Balance, December 31, 2005	$	40,531
Additions during period:
Issuance of loans		4,321
Deductions during period:
Collection and satisfaction of loans		(4,055	)
Allowance for collectibility		(280	)
Amortization of discount		239

Balance, December 31, 2006	$	40,756
Additions during period:
Issuance of loans		8
Deductions during period:
Collection and satisfaction of loans		(556	)
Amortization of discount		430

Balance, December 31, 2007	$	40,638

F-43

EXHIBIT INDEX


Exhibit No.		Description
3.1		Declaration of Trust of Federal Realty Investment Trust dated May 5, 1999 as amended by the Articles of Amendment of Declaration of Trust of Federal Realty Investment Trust dated May 6, 2004, as corrected by the Certificate of Correction of Articles of Amendment of Declaration of Trust of Federal Realty Investment Trust dated June 17, 2004 (previously filed as Exhibit 3.1 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (File No. 1-07533) (the “2005 2Q Form 10-Q”) and incorporated herein by reference)

3.2		Amended and Restated Bylaws of Federal Realty Investment Trust dated February 12, 2003, as amended October 29, 2003, May 5, 2004 and February 17, 2006 (previously filed as Exhibit 3.2 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 1-07533) (the “2005 Form 10-K”) and incorporated herein by reference)

4.1		Specimen Common Share certificate (previously filed as Exhibit 4(i) to the Trust’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-07533) (the “1999 Form 10-K”) and incorporated herein by reference)

4.2		Articles Supplementary relating to the 5.417% Series 1 Cumulative Convertible Preferred Shares of Beneficial Interest (previously filed as Exhibit 4.1 to the Trust’s Current Report on Form 8-K filed on March 13, 2007, (File No. 1-07533) and incorporated herein by reference)

4.3		Amended and Restated Rights Agreement, dated March 11, 1999, between the Trust and American Stock Transfer & Trust Company (previously filed as Exhibit 1 to the Trust’s Registration Statement on Form 8-A/A filed on March 11, 1999 (File No. 1-07533) and incorporated herein by reference)

4.4		First Amendment to Amended and Restated Rights Agreement, dated as of November 2003, between the Trust and American Stock Transfer & Trust Company (previously filed as Exhibit 4.5 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 1-07533) and incorporated herein by reference)

4.5		Indenture dated December 13, 1993 related to the Trust’s 7.48% Debentures due August 15, 2026; and 6.82% Medium Term Notes due August 1, 2027; (previously filed as Exhibit 4(a) to the Trust’s Registration Statement on Form S-3 (File No. 33-51029), and amended on Form S-3 (File No. 33-63687), filed on December 13, 1993 and incorporated herein by reference)

4.6		Indenture dated September 1, 1998 related to the Trust’s 8.75% Notes due December 1, 2009; 6 1/8% Notes due November 15, 2007; 4.50% Notes due 2011; 5.65% Notes due 2016; 6.00% Notes due 2012; 6.20% Notes due 2017; and 5.40% Notes due 2013 (previously filed as Exhibit 4(a) to the Trust’s Registration Statement on Form S-3 (File No. 333-63619) filed on September 17, 1998 and incorporated herein by reference)

4.7		Pursuant to Regulation S-K Item 601(b)(4)(iii), the Trust by this filing agrees, upon request, to furnish to the Securities and Exchange Commission a copy of other instruments defining the rights of holders of long-term debt of the Trust

10.1		Amended and Restated 1993 Long-Term Incentive Plan, as amended on October 6, 1997 and further amended on May 6, 1998 (previously filed as Exhibit 10.26 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-07533) and incorporated herein by reference)

10.2		Fiscal Agency Agreement dated as of October 28, 1993 between the Trust and Citibank, N.A. (previously filed as an exhibit to the Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1993 (File No. 1-07533) and incorporated herein by reference)

EXHIBIT INDEX


Exhibit No.		Description
10.3		Form of Severance Agreement between the Trust and Certain of its Officers dated December 31, 1994 (previously filed as a portion of Exhibit 10 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 1-07533) and incorporated herein by reference)

10.4		* Severance Agreement between the Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (File No. 1-07533) (the “1999 1Q Form 10-Q”) and incorporated herein by reference)

10.5		* Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the 1999 1Q Form 10-Q and incorporated herein by reference)

10.6		* Amendment to Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.12 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 1-07533) (the “2004 Form 10-K”) and incorporated herein by reference)

10.7		* Split Dollar Life Insurance Agreement dated August 12, 1998 between the Trust and Donald C. Wood (previously filed as a portion of Exhibit 10 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-07533) and incorporated herein by reference)

10.8		* Severance Agreement between the Trust and Jeffrey S. Berkes dated March 1, 2000 (previously filed as a portion of Exhibit 10 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 1-07533) and incorporated herein by reference)

10.9		* Amendment to Severance Agreement between Federal Realty Investment Trust and Jeffrey S. Berkes dated February 16, 2005 (previously filed as Exhibit 10.17 to the 2004 Form 10-K and incorporated herein by reference)

10.10		* Severance Agreement dated March 1, 2002 between the Trust and Larry E. Finger (previously filed as a portion of Exhibit 10 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File No. 1-07533) and incorporated herein by reference)

10.11		* Amendment to Severance Agreement between Federal Realty Investment Trust and Larry E. Finger dated February 16, 2005 (previously filed as Exhibit 10.19 to the 2004 Form 10-K and incorporated herein by reference)

10.12		* Amendment to Stock Option Agreement dated August 15, 2002 between the Trust and Dawn M. Becker (previously filed as a portion of Exhibit 10 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 (File No. 1-075330 and incorporated herein by reference)

10.13		2001 Long-Term Incentive Plan (previously filed as Exhibit 99.1 to the Trust’s S-8 Registration Number 333-60364 filed on May 7, 2001 and incorporated herein by reference)

10.14		* Health Coverage Continuation Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.26 to the 2004 Form 10-K and incorporated herein by reference)

10.15		* Severance Agreement between the Trust and Dawn M. Becker dated April 19, 2000 (previously filed as Exhibit 10.26 to the Trust’s 2005 2Q Form 10-Q and incorporated herein by reference)

EXHIBIT INDEX


Exhibit No.		Description
10.16		* Amendment to Severance Agreement between the Trust and Dawn M. Becker dated February 16, 2005 (previously filed as Exhibit 10.27 to the 2004 Form 10-K and incorporated herein by reference)

10.17		Form of Restricted Share Award Agreement for awards made under the Trust’s 2003 Long-Term Incentive Award Program for shares issued out of 2001 Long-Term Incentive Plan (previously filed as Exhibit 10.28 to the 2004 Form 10-K and incorporated herein by reference)

10.18		Form of Restricted Share Award Agreement for awards made under the Trust’s Annual Incentive Bonus Program for shares issued out of 2001 Long-Term Incentive Plan (previously filed as Exhibit 10.29 to the 2004 Form 10-K and incorporated herein by reference)

10.19		Form of Option Award Agreement for options awarded under 2001 Long-Term Incentive Plan (previously filed as Exhibit 10.30 to the 2004 Form 10-K and incorporated herein by reference)

10.20		Form of Option Award Agreement for awards made under the Trust’s 2003 Long-Term Incentive Award Program for shares issued out of the 2001 Long-Term Incentive Plan (previously filed as Exhibit 10.32 to the 2005 Form 10-K and incorporated herein by reference)

10.21		Credit Agreement dated as of July 28, 2006, by and between the Trust, Wachovia Capital Markets LLC, Wachovia Bank, National Association and various other financial institutions (previously filed as Exhibit 10.1) to the Trust’s Current Report on Form 8-K (File No. 1-07533), filed on July 31, 2006 and incorporated herein by reference)

10.22		Amended and Restated 2001 Long-Term Incentive Plan (previously filed as Exhibit 10.34 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 (File No. 1-07533) and incorporated herein by reference)

10.23		Restricted Share Award Agreement between the Trust and Joseph M. Squeri dated October 1, 2007 (filed herewith)

10.24		Severance Agreement between the Trust and Joseph M. Squeri dated October 1, 2007 (filed herewith)

10.25		Credit Agreement dated as of November 9, 2007, by and between the Trust, Wachovia Capital Markets LLC, Wachovia Bank, National Association and various other financial institutions (filed herewith)

10.26		Consulting Agreement between the Trust and Larry E. Finger dated January 1, 2008 (filed herewith)

21.1		Subsidiaries of Federal Realty Investment Trust (filed herewith)

23.1		Consent of Grant Thornton LLP (filed herewith)

24.1		Power of Attorney (included on signature page)

31.1		Rule 13a-14(a) Certification of Chief Executive Officer (filed herewith)

31.2		Rule 13a-14(a) Certification of Chief Financial Officer (filed herewith)

32.1		Section 1350 Certification of Chief Executive Officer (filed herewith)

32.2		Section 1350 Certification of Chief Financial Officer (filed herewith)

*	Management contract or compensatory plan to be filed under Item 15(b) of Form 10-K.

Previous: Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES