filings.toolsItem 2. PROPERTIES
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Item 2. PROPERTIES
General
As of December 31, 2007, we owned or had a majority ownership interest in community and neighborhood shopping centers and mixed-used properties which are operated as 82 predominantly retail real estate projects comprising approximately 18.2 million square feet. These properties are located primarily in densely populated and affluent communities in strategic metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, as well as California. No single property accounted for over 10% of our 2007 total revenue. We believe that our properties are adequately covered by commercial general liability, fire, flood, earthquake, terrorism and business interruption insurance provided by reputable companies, with commercially reasonable exclusions, deductibles and limits.
We operate our business on an asset management model, where asset management teams are responsible for a portfolio of assets. We manage our portfolio as two operating regions: the East and West. Property management teams consist of asset managers, leasing agents, development staff and financial personnel each of whom has responsibility for a distinct portfolio.
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Tenant Diversification
As of December 31, 2007, we had approximately 2,400 leases, with tenants ranging from sole proprietors to major national retailers. No one tenant or affiliated group of tenants accounted for more than 2.5% of our annualized base rent as of December 31, 2007. As a result of our tenant diversification, we believe our exposure to any recent and future bankruptcy filing in the retail sector has not been and will not be significant.
Geographic Diversification
Our 82 real estate projects are located in 12 states and the District of Columbia. The following table shows, by region and state within the region, the number of projects, the gross leasable area of commercial space and the percentage of total portfolio gross leasable area of commercial space in each state as of December 31, 2007.
| Region and State | Number of Projects | Gross Leasable Area | Percentage of Gross Leasable Area | ||||
| (In square feet) | |||||||
| East region | |||||||
| Maryland | 17 | 3,809,000 | 20.9 | % | |||
| Virginia | 15 | 3,607,000 | 19.8 | % | |||
| Pennsylvania(1) | 11 | 2,394,000 | 13.2 | % | |||
| Massachusetts | 7 | 1,651,000 | 9.1 | % | |||
| New Jersey | 4 | 1,384,000 | 7.6 | % | |||
| New York | 5 | 1,110,000 | 6.1 | % | |||
| Illinois | 4 | 757,000 | 4.2 | % | |||
| Connecticut | 2 | 315,000 | 1.7 | % | |||
| Michigan | 1 | 217,000 | 1.2 | % | |||
| District of Columbia | 2 | 168,000 | 0.9 | % | |||
| North Carolina | 1 | 156,000 | 0.8 | % | |||
| Total East region | 69 | 15,568,000 | 85.5 | % | |||
| West region | |||||||
| California | 12 | 2,450,000 | 13.5 | % | |||
| Texas | 1 | 177,000 | 1.0 | % | |||
| Total West region | 13 | 2,627,000 | 14.5 | % | |||
| Total all regions | 82 | 18,195,000 | 100.0 | % | |||
| (1) | Additionally, we own two participating mortgages totaling approximately $28.3 million secured by multiple buildings in Manayunk, Pennsylvania. |
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Leases, Lease Terms and Lease Expirations
Our leases are classified as operating leases and typically are structured to require the monthly payment of minimum rents in advance, subject to periodic increases during the term of the lease, percentage rents based on the level of sales achieved by tenants, and reimbursement of a majority of on-site operating expenses and real estate taxes. These features in our leases reduce our exposure to higher costs and allow us to participate in improved tenant sales.
Commercial property leases generally range from 3 to 10 years; however, certain leases, primarily with anchor tenants, may be longer. Many of our leases contain tenant options that enable the tenant to extend the term of the lease at expiration at pre-established rental rates that often include fixed rent increases, consumer price index adjustments or other market rate adjustments from the prior base rent. Leases on residential units are generally for a period of one year or less and, in 2007, represented approximately 3.3% of total rental revenues.
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The following table sets forth the schedule of lease expirations for our commercial leases in place as of December 31, 2007 for each of the 10 years beginning with 2008 and after 2017 in the aggregate, in both cases, assuming that none of the tenants exercise future renewal options. Annualized base rents reflect in-place contractual rents as of December 31, 2007.
| Year of Lease Expiration | Leased Square Footage Expiring | Percentage of Leased Square Footage Expiring | Annualized Base Rent Represented by Expiring Leases | Percentage of Annualized Base Rent Represented by Expiring Leases | |||||||
| 2008 | 1,273,000 | 7 | % | $ | 21,948,000 | 6 | % | ||||
| 2009 | 2,050,000 | 12 | % | 39,036,000 | 11 | % | |||||
| 2010 | 1,623,000 | 9 | % | 33,002,000 | 9 | % | |||||
| 2011 | 1,788,000 | 10 | % | 43,408,000 | 12 | % | |||||
| 2012 | 1,995,000 | 12 | % | 43,926,000 | 12 | % | |||||
| 2013 | 1,532,000 | 9 | % | 30,912,000 | 9 | % | |||||
| 2014 | 1,148,000 | 7 | % | 26,387,000 | 8 | % | |||||
| 2015 | 809,000 | 5 | % | 17,209,000 | 5 | % | |||||
| 2016 | 822,000 | 5 | % | 20,448,000 | 6 | % | |||||
| 2017 | 1,027,000 | 6 | % | 23,194,000 | 7 | % | |||||
| Thereafter | 3,221,000 | 18 | % | 53,580,000 | 15 | % | |||||
| Total | 17,288,000 | 100 | % | $ | 353,050,000 | 100 | % | ||||
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Retail and Residential Properties
The following table sets forth information concerning all real estate projects in which we owned an equity interest, had a leasehold interest, or controlled and are consolidated as of December 31, 2007. Except as otherwise noted, we are the sole owner of our retail real estate projects. Principal tenants are the largest tenants in the project based on square feet leased or are tenants important to a project’s success due to their ability to attract retail customers.
| EAST REGION | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Percentage Leased(2) | Principal Tenant(s) | |||||
| Andorra Philadelphia, PA 19128 | 1953 | 1988 | 267,000 | 99% | Acme Markets Kohl’s Staples L.A. Fitness | |||||
| Assembly Square/Sturtevant Street Somerville, MA 02145 | 2005 | 2005-2007 | 554,000 | 100% | Bed, Bath & Beyond Christmas Tree Shops Kmart Staples TJ Maxx A.C. Moore Sports Authority | |||||
| Bala Cynwyd Bala Cynwyd, PA 19004 | 1955 | 1993 | 280,000 | 100% | Acme Markets Lord & Taylor L.A. Fitness | |||||
| Barracks Road Charlottesville, VA 22905 | 1958 | 1985 | 488,000 | 100% | Bed, Bath & Beyond Harris Teeter Kroger Barnes & Noble Old Navy | |||||
| Bethesda Row Bethesda, MD 20814(7) | 1945-1991 2001 | 1993-2006 | 477,000 | 92% | Barnes & Noble Giant Food Landmark Theater | |||||
| Brick Plaza Brick Township, NJ 08723(6) | 1958 | 1989 | 409,000 | 100% | A&P Supermarket Barnes & Noble AMC Loews Sports Authority | |||||
| Bristol Bristol, CT 06010 | 1959 | 1995 | 273,000 | 98% | Stop & Shop TJ Maxx | |||||
| Chelsea Commons Chelsea, MA 02150 | 1962-1969 | 2006-2007 | 196,000 | 91% | Sav-A-Lot Home Depot | |||||
| Congressional Plaza Rockville, MD 20852(4) | 1965 | 1965 | 338,000 | 91% | Buy Buy Baby Whole Foods Container Store | |||||
| Congressional Plaza Residential Rockville, MD 20852(4) | 2003 | 1965 | 146 units | 90% | ||||||
| Courthouse Center Rockville, MD 20852(5) | 1970 | 1997 | 37,000 | 81% | ||||||
| Crossroads Highland Park, IL 60035 | 1959 | 1993 | 173,000 | 89% | Golfsmith Guitar Center | |||||
| Dedham Dedham, MA 02026 | 1959 | 1993 | 242,000 | 91% | Star Market | |||||
| Eastgate Chapel Hill, NC 27514 | 1963 | 1986 | 156,000 | 97% | Stein Mart | |||||
| Ellisburg Circle Cherry Hill, NJ 08034 | 1959 | 1992 | 268,000 | 99% | Genuardi’s Stein Mart | |||||
| Falls Plaza/Falls Plaza—East Falls Church, VA 22046 | 1960-1962 | 1967-1972 | 144,000 | 99% | Giant Food CVS Staples |
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Retail and Residential Properties—continued
| EAST REGION | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Percentage Leased(2) | Principal Tenant(s) | |||||
| Feasterville Feasterville, PA 19047 | 1958 | 1980 | 111,000 | 100% | Genuardi’s OfficeMax | |||||
| Federal Plaza Rockville, MD 20852 | 1970 | 1989 | 248,000 | 99% | Micro Center Ross Dress For Less TJ Maxx | |||||
| Finley Square Downers Grove, IL 60515 | 1974 | 1995 | 315,000 | 98% | Bed, Bath & Beyond Petsmart | |||||
| Flourtown Flourtown, PA 19031 | 1957 | 1980 | 180,000 | 89% | Genuardi’s | |||||
| Forest Hills Forest Hills, NY | 1937-1987 | 1997 | 46,000 | 100% | Midway Theatre | |||||
| Friendship Center Washington, D.C 20015 | 1998 | 2001 | 119,000 | 100% | Maggiano’s Borders Books Linens ‘n Things | |||||
| Fresh Meadows Queens, NY 11365 | 1949 | 1997 | 403,000 | 95% | AMC Loews Filene’s Basement Kohl’s Associated Food Stores | |||||
| Gaithersburg Square Gaithersburg, MD 20878 | 1966 | 1993 | 209,000 | 99% | Bed, Bath & Beyond Borders Books Ross Dress For Less | |||||
| Garden Market Western Springs, IL 60558 | 1958 | 1994 | 140,000 | 96% | Dominick’s Walgreens | |||||
| Governor Plaza Glen Burnie, MD 21961 | 1963 | 1985 | 269,000 | 100% | Office Depot Bally’s Total Fitness Aldi | |||||
| Gratiot Plaza Roseville, MI 48066 | 1964 | 1973 | 217,000 | 100% | Bed, Bath & Beyond Best Buy Kroger DSW | |||||
| Greenwich Avenue Greenwich Avenue, CT | 1993 | 1995 | 42,000 | 100% | Saks Fifth Avenue | |||||
| Hauppauge Hauppauge, NY 11788 | 1963 | 1998 | 133,000 | 99% | Shop Rite A.C. Moore | |||||
| Huntington Huntington, NY 11746 | 1962 | 1988/2007 | 279,000 | 100% | Barnes & Noble Bed, Bath & Beyond Buy Buy Baby Toys R Us | |||||
| Idylwood Plaza Falls Church, VA 22030 | 1991 | 1994 | 73,000 | 100% | Whole Foods | |||||
| Lancaster Lancaster, PA 17601(3) | 1958 | 1980 | 107,000 | 99% | Giant Food Michaels | |||||
| Langhorne Square Levittown, PA 19056 | 1966 | 1985 | 216,000 | 100% | Marshalls Redner’s Warehouse Market | |||||
| Laurel Centre Laurel, MD 20707 | 1956 | 1986 | 386,000 | 99% | Giant Food Marshalls | |||||
| Lawrence Park Broomall, PA 19008 | 1972 | 1980 | 353,000 | 100% | Acme Markets TJ Maxx CHI Home Goods | |||||
| Leesburg Plaza Leesburg, VA 20176(5) | 1967 | 1998 | 236,000 | 99% | Giant Food Pier 1 Imports Office Depot Petsmart |
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Retail and Residential Properties—continued
| EAST REGION | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Percentage Leased(2) | Principal Tenant(s) | |||||
| Linden Square Wellesley, MA 02481 | 1960 | 2006/2007 | 156,000 | 93% | Roche Brothers Supermarket CVS Fitness Club for Women Wellesley Volkswagen, Buick | |||||
| Loehmann’s Plaza Fairfax, VA 22042 | 1971 | 1983 | 268,000 | 96% | Bally’s Total Fitness Loehmann’s Dress Shop | |||||
| Melville Mall Huntington, NY 11747(9) | 1974 | 2006 | 248,000 | 100% | Waldbaum’s Marshalls Kohl’s | |||||
| Mercer Mall Lawrenceville, NJ 08648(3) | 1975 | 2003 | 501,000 | 100% | Raymour & Flanigan Bed, Bath & Beyond DSW TJ Maxx Shop Rite | |||||
| Mid-Pike Plaza Rockville, MD 20852 | 1963 | 1982/2007 | 309,000 | 100% | Bally’s Total Fitness Linens ‘n Things Toys R Us A.C. Moore Filene’s Basement | |||||
| Mount Vernon/South Valley/7770 Richmond Hwy Alexandria, VA 22306(5)(6) | 1966-1974 | 2003-2006 | 566,000 | 97% | Shoppers Food Warehouse Bed, Bath & Beyond Michaels Home Depot TJ Maxx Gold’s Gym | |||||
| Northeast Philadelphia, PA 19114 | 1959 | 1983 | 285,000 | 93% | Burlington Coat Factory Marshalls | |||||
| North Dartmouth North Dartmouth, MA 02747 | 2004 | 2006 | 183,000 | 100% | Stop & Shop Lowe’s Home Center | |||||
| North Lake Commons Lake Zurich, IL 60047 | 1989 | 1994 | 129,000 | 93% | Dominick’s | |||||
| The Shoppes at Nottingham Square Baltimore, MD 21236 | 2005-2006 | 2007 | 186,000 | 100% | Lowes’ Home Center | |||||
| Old Keene Mill Springfield, VA 22152 | 1968 | 1976 | 92,000 | 100% | Whole Foods | |||||
| Pan Am Fairfax, VA 22031 | 1979 | 1993 | 227,000 | 100% | Michaels Micro Center Safeway | |||||
| Pentagon Row Arlington, VA 22202(6) | 2001-2002 | 1998 | 296,000 | 100% | Harris Teeter Bed, Bath & Beyond Cost Plus World Market Bally’s Total Fitness DSW | |||||
| Perring Plaza Baltimore, MD 21134 | 1963 | 1985 | 402,000 | 99% | Burlington Coat Factory Home Depot Shoppers Food Warehouse Jo-Ann Stores | |||||
| Pike 7 Plaza Vienna, VA 22180(5) | 1968 | 1997 | 164,000 | 100% | DSW Staples TJ Maxx | |||||
| Queen Anne Plaza Norwell, MA 02061 | 1967 | 1994 | 149,000 | 100% | TJ Maxx Hannaford |
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Retail and Residential Properties—continued
| EAST REGION | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Percentage Leased(2) | Principal Tenant(s) | |||||
| Quince Orchard Gaithersburg, MD 20877(6) | 1975 | 1993 | 253,000 | 98% | Circuit City Magruders Staples | |||||
| Rockville Town Square Rockville, MD 20852 | 2006-2007 | 2006-2007 | 182,000 | 100% | CVS Gold’s Gym | |||||
| Rollingwood Apartments Silver Spring, MD 20910 9 three-story buildings | 1960 | 1971 | 282 units | 96% | ||||||
| Sam’s Park & Shop Washington, DC 20008 | 1930 | 1995 | 49,000 | 90% | Petco | |||||
| Saugus Plaza Saugus, MA 01906 | 1976 | 1996 | 171,000 | 94% | Kmart Super Stop & Shop | |||||
| Village at Shirlington Arlington, VA 22206(11) | 1940 | 1995 | 245,000 | 99% | AMC Loews Carlyle Grand Café Harris Teeter | |||||
| Shoppers’ World Charlottesville, VA 23230 | 1975-2001 | 2007 | 170,000 | 96% | Whole Foods Staples | |||||
| Tower Shopping Center Springfield, VA 22150 | 1960 | 1998 | 112,000 | 71% | Talbots | |||||
| Town Center of New Britain New Britain, PA 18901 | 1969 | 2006 | 124,000 | 88% | Giant Food Rite Aid | |||||
| Troy Parsippany-Troy, NJ 07054 | 1966 | 1980 | 207,000 | 88% | Pathmark A.C. Moore | |||||
| Tysons Station Falls Church, VA 22043 | 1954 | 1978 | 49,000 | 100% | Trader Joes | |||||
| THE AVENUE at White Marsh Baltimore, MD 21236(5) | 1997 | 2007 | 298,000 | 98% | AMC Loews Old Navy Barnes & Noble A.C. Moore | |||||
| White Marsh Plaza Baltimore, MD 21236 | 1987 | 2007 | 80,000 | 98% | Giant Food | |||||
| White Marsh Other Baltimore, MD 21236 | 1985 | 2007 | 52,000 | 100% | ||||||
| Wildwood Bethesda, MD 20814 | 1958 | 1969 | 85,000 | 98% | CVS Balducci’s | |||||
| Willow Grove Willow Grove, PA 19090 | 1953 | 1984 | 215,000 | 99% | Barnes & Noble Marshalls Toys R Us | |||||
| Shops at Willow Lawn Richmond, VA 23230 | 1957 | 1983 | 476,000 | 91% | Kroger Old Navy Ross Staples | |||||
| Wynnewood Wynnewood, PA 19096 | 1948 | 1996 | 255,000 | 96% | Bed, Bath & Beyond Borders Books Genuardi’s Old Navy | |||||
| Total East Region—Retail | 15,568,000 | 97% | ||||||||
| Total East Region—Residential | 428 units | 94% |
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Retail and Residential Properties—continued
| WEST REGION | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Percentage Leased(2) | Principal Tenant(s) | |||||
| 150 Post Street San Francisco, CA 94108 | 1965 | 1997 | 102,000 | 96% | Brooks Brothers H & M | |||||
| Colorado Blvd Pasadena, CA(6) | 1922 | 1996-1998 | 69,000 | 100% | Pottery Barn Banana Republic | |||||
| Crow Canyon Commons San Ramon, CA(3) | 1980-2006 | 2005-2007 | 242,000 | 91% | Albertson’s Loehmann’s Rite Aid | |||||
| Escondido Promenade Escondido, CA 92029(8) | 1987 | 1996 | 222,000 | 98% | Toys R Us TJ Maxx Cost Plus | |||||
| Fifth Avenue San Diego, CA | 1888-1995 | 1996-1997 | 51,000 | 83% | Urban Outfitters | |||||
| Hermosa Avenue Hermosa Beach, CA | 1922 | 1997 | 22,000 | 100% | ||||||
| Hollywood Blvd Hollywood, CA(10) | 1921-1991 | 1999 | 150,000 | 85% | DSW L.A. Fitness | |||||
| Houston Street San Antonio, TX | 1890-1935 | 1998 | 177,000 | 73% | Hotel Valencia | |||||
| Kings Court Los Gatos, CA 95032(5)(6) | 1960 | 1998 | 79,000 | 100% | Lunardi’s Supermarket Longs Drug Store | |||||
| Old Town Center Los Gatos, CA 95030 | 1962, 1998 | 1997 | 95,000 | 96% | Borders Books Gap Kids Banana Republic | |||||
| Santana Row – Retail San Jose, CA 95128 | 2002 | 1997 | 562,000 | 100% | Crate & Barrel Borders Books Container Store Best Buy CineArts Theatre | |||||
| Santana Row – Residential San Jose, CA 95128 | 2003-2006 | 1997 | 295 units | 96% | ||||||
| Third Street Promenade Santa Monica, CA | 1888-2000 | 1996-2000 | 211,000 | 98% | Abercrombie & Fitch J. Crew Old Navy Banana Republic | |||||
| Westgate Shopping Center San Jose, CA | 1960-1966 | 2004 | 645,000 | 99% | Safeway Target Burlington Coat Factory Barnes & Noble Ross | |||||
| Total West Region—Retail | 2,627,000 | 95% | ||||||||
| Total West Region—Residential | 295 units | 96% | ||||||||
| Total All Regions—Retail | 18,195,000 | 97% | ||||||||
| Total All Regions—Residential | 723 units | 95% | ||||||||
| (1) | Represents the physical square footage of the commercial portion of the property, which may differ from the gross leasable square footage used to express percentage leased. Some of our properties include office space which is included in this square footage but is not material in total. |
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| (2) | Retail percentage leased is expressed as a percentage of rentable commercial square feet occupied or subject to a lease under which rent is currently payable and includes square feet covered by leases for stores not yet opened. Residential percentage leased is expressed as a percentage of units occupied or subject to a lease. |
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| (3) | We have a leasehold interest in this property. |
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| (4) | We own a 64.1% membership interest in this property. |
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| (5) | We own this property in a “downREIT” structure. |
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| (6) | All or a portion of this property is subject to a long-term ground lease. |
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| (7) | This property contains nine buildings; six are subject to a leasehold interest, one is subject to a ground lease and two are owned 100% by us. |
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| (8) | We own the controlling interest in this center. |
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| (9) | On October 16, 2006, the Trust acquired control of Melville Mall through a 20 year master lease and 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 $25.8 million first mortgage. Because the Trust controls this property and retains substantially all of the economic benefit and risk associated with it, we consolidate this property and its operations. |
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| (10) | We own a 90% general partnership interest in these buildings. |
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| (11) | A portion of this property is subject to a capital lease obligation. |
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