filings.toolsItem 2. PROPERTIES
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Item 2. PROPERTIES
General
As of December 31, 2008, we owned or had a majority ownership interest in community and neighborhood shopping centers and mixed-used properties which are operated as 84 predominantly retail real estate projects comprising approximately 18.1 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
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United States, as well as California. No single property accounted for over 10% of our 2008 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.
Tenant Diversification
As of December 31, 2008, we had approximately 2,450 leases, with tenants ranging from sole proprietors to major national retailers. No one tenant or affiliated group of tenants accounted for more than 2.6% of our annualized base rent as of December 31, 2008. As a result of our tenant diversification, we believe our exposure to any one recent or future bankruptcy filing in the retail sector has not been and will not be significant, however, multiple filings by a number of retailers could have a significant impact.
Geographic Diversification
Our 84 real estate projects are located in 13 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, 2008.
| Region and State | Number of Projects | Gross Leasable Area | Percentage of Gross Leasable Area | ||||
| (In square feet) | |||||||
| Maryland | 17 | 3,708,000 | 20.5 | % | |||
| Virginia | 15 | 3,602,000 | 19.9 | % | |||
| California | 12 | 2,453,000 | 13.6 | % | |||
| Pennsylvania(1) | 11 | 2,405,000 | 13.3 | % | |||
| New Jersey | 4 | 1,385,000 | 7.6 | % | |||
| Massachusetts | 7 | 1,378,000 | 7.6 | % | |||
| New York | 5 | 1,109,000 | 6.1 | % | |||
| Illinois | 4 | 757,000 | 4.2 | % | |||
| Connecticut (1) | 2 | 308,000 | 1.7 | % | |||
| Florida | 2 | 308,000 | 1.7 | % | |||
| Michigan | 1 | 217,000 | 1.2 | % | |||
| District of Columbia | 2 | 168,000 | 0.9 | % | |||
| Texas | 1 | 168,000 | 0.9 | % | |||
| North Carolina | 1 | 153,000 | 0.8 | % | |||
| Total all regions | 84 | 18,119,000 | 100.0 | % | |||
| (1) | Additionally, we own two participating mortgages totaling approximately $28.3 million secured by multiple buildings in Manayunk, Pennsylvania, and one $5.5 million loan secured by a property in Norwalk, Connecticut. |
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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 generally 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
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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 2008, represented approximately 3.7% of total rental income.
The following table sets forth the schedule of lease expirations for our commercial leases in place as of December 31, 2008 for each of the 10 years beginning with 2009 and after 2018 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, 2008.
| 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 | |||||||
| 2009 | 1,128,000 | 7 | % | 25,533,000 | 7 | % | |||||
| 2010 | 1,587,000 | 9 | % | 34,589,000 | 9 | % | |||||
| 2011 | 1,972,000 | 12 | % | 46,300,000 | 13 | % | |||||
| 2012 | 2,109,000 | 12 | % | 46,894,000 | 13 | % | |||||
| 2013 | 2,070,000 | 12 | % | 47,803,000 | 13 | % | |||||
| 2014 | 1,862,000 | 11 | % | 38,065,000 | 10 | % | |||||
| 2015 | 914,000 | 5 | % | 19,900,000 | 5 | % | |||||
| 2016 | 800,000 | 5 | % | 19,691,000 | 5 | % | |||||
| 2017 | 1,056,000 | 6 | % | 24,066,000 | 7 | % | |||||
| 2018 | 941,000 | 6 | % | 17,840,000 | 5 | % | |||||
| Thereafter | 2,565,000 | 15 | % | 49,213,000 | 13 | % | |||||
| Total | 17,004,000 | 100 | % | $ | 369,894,000 | 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, 2008. 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.
| Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Rent Per Square Foot | Percentage Leased(2) | Principal Tenant(s) | |||||||
| California | ||||||||||||
| 150 Post Street San Francisco, CA 94108 | 1965 | 1997 | 102,000 | $39.72 | 98% | Brooks Brothers H & M | ||||||
| Colorado Blvd Pasadena, CA(6) | 1922 | 1996-1998 | 68,000 | $36.63 | 99% | Pottery Barn Banana Republic | ||||||
| Crow Canyon Commons San Ramon, CA(3) | 1980-2006 | 2005-2007 | 242,000 | $19.40 | 92% | Save Mart Loehmann’s Rite Aid | ||||||
| Escondido Promenade Escondido, CA 92029(8) | 1987 | 1996 | 222,000 | $23.09 | 95% | Toys R Us TJ Maxx Cost Plus World Market | ||||||
| Fifth Avenue San Diego, CA | 1888-1995 | 1996-1997 | 51,000 | $26.64 | 100% | Urban Outfitters | ||||||
| Hermosa Avenue Hermosa Beach, CA | 1922 | 1997 | 22,000 | $32.49 | 100% | |||||||
| Hollywood Blvd Hollywood, CA(10) | 1921-1991 | 1999 | 153,000 | $21.30 | 85% | DSW L.A. Fitness | ||||||
| Kings Court Los Gatos, CA 95032(5)(6) | 1960 | 1998 | 79,000 | $25.83 | 99% | Lunardi’s Supermarket Longs Drug Store | ||||||
| Old Town Center Los Gatos, CA 95030 | 1962, 1998 | 1997 | 95,000 | $30.65 | 95% | Borders Books Gap Kids Banana Republic | ||||||
| Santana Row—Retail San Jose, CA 95128 | 2002 | 1997 | 563,000 | $44.07 | 98% | Crate & Barrel Borders Books Container Store Best Buy CineArts Theatre | ||||||
| Santana Row—Residential San Jose, CA 95128 | 2003-2006 | 1997 | 295 units | N/A | 93% | |||||||
| Third Street Promenade Santa Monica, CA | 1888-2000 | 1996-2000 | 211,000 | $58.70 | 99% | Abercrombie & Fitch J. Crew Old Navy Banana Republic | ||||||
| Westgate San Jose, CA | 1960-1966 | 2004 | 645,000 | $13.31 | 96% | Safeway Target Burlington Coat Factory Barnes & Noble Ross | ||||||
| Connecticut | ||||||||||||
| Bristol Bristol, CT 06010 | 1959 | 1995 | 272,000 | $12.06 | 86% | Stop & Shop TJ Maxx | ||||||
| Greenwich Avenue Greenwich Avenue, CT | 1993 | 1995 | 36,000 | $53.00 | 100% | Saks Fifth Avenue | ||||||
| District of Columbia | ||||||||||||
| Friendship Center Washington, D.C 20015 | 1998 | 2001 | 119,000 | $33.15 | 66% | Maggiano’s Borders Books | ||||||
| Sam’s Park & Shop Washington, DC 20008 | 1930 | 1995 | 49,000 | $35.90 | 94% | Petco |
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Retail and Residential Properties—continued
| Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Rent Per Square Foot | Percentage Leased(2) | Principal Tenant(s) | |||||||
| Florida | ||||||||||||
| Courtyard Shops Wellington, FL 33414 | 1990, 1998 | 2008 | 130,000 | $18.48 | 92% | Publix | ||||||
| Del Mar Village Boca Raton, FL 33433 | 1982, 1994 & 2007 | 2008 | 178,000 | $18.41 | 89% | Winn Dixie CVS | ||||||
| Illinois | ||||||||||||
| Crossroads Highland Park, IL 60035 | 1959 | 1993 | 173,000 | $19.24 | 71% | Golfsmith Guitar Center | ||||||
| Finley Square Downers Grove, IL 60515 | 1974 | 1995 | 315,000 | $10.05 | 98% | Bed, Bath & Beyond Petsmart Buy Buy Baby | ||||||
| Garden Market Western Springs, IL 60558 | 1958 | 1994 | 140,000 | $12.64 | 100% | Dominick’s Walgreens | ||||||
| North Lake Commons Lake Zurich, IL 60047 | 1989 | 1994 | 129,000 | $13.59 | 92% | Dominick’s | ||||||
| Maryland | ||||||||||||
| Bethesda Row Bethesda, MD 20814(7) | 1945-1991 2001 | 1993-2006 2008 | 521,000 | $41.13 | 95% | Barnes & Noble Giant Food Landmark Theater | ||||||
| Bethesda Row Residential Bethesda, MD 20814(7) | 2008 | 1993 | 180 units | N/A | 94% | |||||||
| Congressional Plaza Rockville, MD 20852(4) | 1965 | 1965 | 334,000 | $29.78 | 95% | Buy Buy Baby Whole Foods Container Store | ||||||
| Congressional Plaza Residential Rockville, MD 20852(4) | 2003 | 1965 | 146 units | N/A | 97% | |||||||
| Courthouse Center Rockville, MD 20852 | 1970 | 1997 | 37,000 | $19.12 | 77% | |||||||
| Federal Plaza Rockville, MD 20852 | 1970 | 1989 | 248,000 | $29.15 | 96% | Micro Center Ross Dress For Less TJ Maxx | ||||||
| Gaithersburg Square Gaithersburg, MD 20878 | 1966 | 1993 | 209,000 | $22.35 | 93% | Bed, Bath & Beyond Borders Books Ross Dress For Less | ||||||
| Governor Plaza Glen Burnie, MD 21961 | 1963 | 1985 | 269,000 | $15.10 | 100% | Office Depot Bally Total Fitness Aldi | ||||||
| Laurel Centre Laurel, MD 20707 | 1956 | 1986 | 386,000 | $17.54 | 99% | Giant Food Marshalls | ||||||
| Mid-Pike Plaza Rockville, MD 20852 | 1963 | 1982/2007 | 308,000 | $22.50 | 100% | Bally Total Fitness Toys R Us A.C. Moore Filene’s Basement | ||||||
| Perring Plaza Baltimore, MD 21134 | 1963 | 1985 | 402,000 | $12.07 | 98% | Burlington Coat Factory Home Depot Shoppers Food Warehouse Jo-Ann Stores | ||||||
| Quince Orchard Gaithersburg, MD 20877(6) | 1975 | 1993 | 248,000 | $20.05 | 85% | Magruders Staples | ||||||
| Rockville Town Square Rockville, MD 20852 | 2006-2007 | 2006-2007 | 182,000 | $32.09 | 99% | CVS Gold’s Gym |
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Retail and Residential Properties—continued
| Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Rent Per Square Foot | Percentage Leased(2) | Principal Tenant(s) | |||||||
| Rollingwood Apartments Silver Spring, MD 20910 9 three-story buildings | 1960 | 1971 | 282 units | N/A | 96% | |||||||
| THE AVENUE at White Marsh Baltimore, MD 21236(12) | 1997 | 2007 | 298,000 | $20.48 | 100% | AMC Loews Old Navy Barnes & Noble A.C. Moore | ||||||
| The Shoppes at Nottingham Square Baltimore, MD 21236 | 2005-2006 | 2007 | 52,000 | $36.26 | 100% | |||||||
| White Marsh Other Baltimore, MD 21236 | 1985 | 2007 | 49,000 | $21.84 | 100% | |||||||
| White Marsh Plaza Baltimore, MD 21236 | 1987 | 2007 | 80,000 | $18.97 | 98% | Giant Food | ||||||
| Wildwood Bethesda, MD 20814 | 1958 | 1969 | 85,000 | $69.19 | 100% | CVS Balducci’s | ||||||
| Massachusetts | ||||||||||||
| Assembly Square Somerville, MA 02145 | 2005 | 2005-2008 | 332,000 | $16.25 | 100% | Bed, Bath & Beyond Christmas Tree Shops Kmart Staples TJ Maxx A.C. Moore Sports Authority | ||||||
| Chelsea Commons Chelsea, MA 02150 | 1962-1969 | 2006-2008 | 222,000 | $10.16 | 91% | Sav-A-Lot Home Depot | ||||||
| Dedham Dedham, MA 02026 | 1959 | 1993 | 242,000 | $14.69 | 89% | Star Market | ||||||
| Linden Square Wellesley, MA 02481 | 1960 | 2006 | 214,000 | $41.34 | 83% | Roche Brothers Supermarket CVS Fitness Club for Women Wellesley Volkswagen, Buick | ||||||
| North Dartmouth North Dartmouth, MA 02747 | 2004 | 2006 | 48,000 | $13.80 | 100% | Stop & Shop | ||||||
| Queen Anne Plaza Norwell, MA 02061 | 1967 | 1994 | 149,000 | $15.03 | 100% | TJ Maxx Hannaford | ||||||
| Saugus Plaza Saugus, MA 01906 | 1976 | 1996 | 171,000 | $10.53 | 94% | Kmart Super Stop & Shop | ||||||
| Michigan | ||||||||||||
| Gratiot Plaza Roseville, MI 48066 | 1964 | 1973 | 217,000 | $11.28 | 99% | Bed, Bath & Beyond Best Buy Kroger DSW | ||||||
| North Carolina | ||||||||||||
| Eastgate Chapel Hill, NC 27514 | 1963 | 1986 | 153,000 | $19.59 | 97% | Stein Mart | ||||||
| New Jersey | ||||||||||||
| Brick Plaza Brick Township, NJ 08723(6) | 1958 | 1989 | 409,000 | $15.11 | 100% | A&P Supermarket Barnes & Noble AMC Loews Sports Authority |
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Retail and Residential Properties—continued
| Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Rent Per Square Foot | Percentage Leased(2) | Principal Tenant(s) | |||||||
| Ellisburg Circle Cherry Hill, NJ 08034 | 1959 | 1992 | 268,000 | $14.51 | 99% | Genuardi’s Buy Buy Baby Stein Mart | ||||||
| Mercer Mall Lawrenceville, NJ 08648(3) | 1975 | 2003 | 501,000 | $19.80 | 99% | Raymour & Flanigan Bed, Bath & Beyond DSW TJ Maxx Shop Rite | ||||||
| Troy Parsippany-Troy, NJ 07054 | 1966 | 1980 | 207,000 | $17.13 | 86% | Pathmark | ||||||
| New York | ||||||||||||
| Forest Hills Forest Hills, NY | 1937-1987 | 1997 | 46,000 | $24.49 | 100% | Midway Theatre | ||||||
| Fresh Meadows Queens, NY 11365 | 1949 | 1997 | 403,000 | $24.41 | 99% | AMC Loews Filene’s Basement Kohl’s Island of Gold | ||||||
| Hauppauge Hauppauge, NY 11788 | 1963 | 1998 | 133,000 | $24.05 | 98% | Shop Rite A.C. Moore | ||||||
| Huntington Huntington, NY 11746 | 1962 | 1988/2007 | 279,000 | $19.06 | 100% | Barnes & Noble Bed, Bath & Beyond Buy Buy Baby Toys R Us | ||||||
| Melville Mall Huntington, NY 11747(9) | 1974 | 2006 | 248,000 | $16.45 | 100% | Waldbaum’s Marshalls Kohl’s | ||||||
| Pennsylvania | ||||||||||||
| Andorra Philadelphia, PA 19128 | 1953 | 1988 | 267,000 | $13.58 | 94% | Acme Markets Kohl’s Staples L.A. Fitness | ||||||
| Bala Cynwyd Bala Cynwyd, PA 19004 | 1955 | 1993 | 280,000 | $17.01 | 100% | Acme Markets Lord & Taylor L.A. Fitness | ||||||
| Feasterville Feasterville, PA 19047 | 1958 | 1980 | 111,000 | $13.71 | 89% | Genuardi’s OfficeMax | ||||||
| Flourtown Flourtown, PA 19031 | 1957 | 1980 | 191,000 | $20.69 | 87% | Genuardi’s | ||||||
| Lancaster Lancaster, PA 17601(3) | 1958 | 1980 | 107,000 | $15.24 | 94% | Giant Food Michaels | ||||||
| Langhorne Square Levittown, PA 19056 | 1966 | 1985 | 216,000 | $14.14 | 97% | Marshalls Redner’s Warehouse Market | ||||||
| Lawrence Park Broomall, PA 19008 | 1972 | 1980 | 353,000 | $17.83 | 100% | Acme Markets TJ Maxx CHI Home Goods | ||||||
| Northeast Philadelphia, PA 19114 | 1959 | 1983 | 285,000 | $10.62 | 92% | Burlington Coat Factory Marshalls | ||||||
| Town Center of New Britain New Britain, PA 18901 | 1969 | 2006 | 124,000 | $9.86 | 87% | Giant Food Rite Aid | ||||||
| Willow Grove Willow Grove, PA 19090 | 1953 | 1984 | 216,000 | $19.21 | 99% | Barnes & Noble Marshalls Toys R Us | ||||||
| Wynnewood Wynnewood, PA 19096 | 1948 | 1996 | 255,000 | $23.88 | 97% | Bed, Bath & Beyond Borders Books Genuardi’s Old Navy |
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Retail and Residential Properties—continued
| Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Rent Per Square Foot | Percentage Leased(2) | Principal Tenant(s) | |||||||
| Texas | ||||||||||||
| Houston Street San Antonio, TX | 1890-1935 | 1998 | 168,000 | $19.68 | 76% | Hotel Valencia | ||||||
| Virginia | ||||||||||||
| Barracks Road Charlottesville, VA 22905 | 1958 | 1985 | 488,000 | $20.17 | 94% | Bed, Bath & Beyond Harris Teeter Kroger Barnes & Noble Old Navy | ||||||
| Falls Plaza/Falls Plaza—East Falls Church, VA 22046 | 1960-1962 | 1967-1972 | 143,000 | $26.74 | 99% | Giant Food CVS Staples | ||||||
| Idylwood Plaza Falls Church, VA 22030 | 1991 | 1994 | 73,000 | $42.80 | 100% | Whole Foods | ||||||
| Leesburg Plaza Leesburg, VA 20176(5) | 1967 | 1998 | 236,000 | $21.33 | 99% | Giant Food Pier 1 Imports Office Depot Petsmart | ||||||
| Loehmann’s Plaza Fairfax, VA 22042 | 1971 | 1983 | 268,000 | $25.96 | 97% | Bally Total Fitness Giant Food Loehmann’s Dress Shop | ||||||
| Mount Vernon/South Valley/ 7770 Richmond Hwy Alexandria, VA 22306(5)(6) | 1966-1974 | 2003-2006 | 565,000 | $15.07 | 95% | Shoppers Food Warehouse Bed, Bath & Beyond Michaels Home Depot TJ Maxx Gold’s Gym | ||||||
| Old Keene Mill Springfield, VA 22152 | 1968 | 1976 | 92,000 | $27.31 | 99% | Whole Foods | ||||||
| Pan Am Fairfax, VA 22031 | 1979 | 1993 | 227,000 | $17.76 | 100% | Michaels Micro Center Safeway | ||||||
| Pentagon Row Arlington, VA 22202(6) | 2001-2002 | 1998 | 296,000 | $33.44 | 99% | Harris Teeter Bed, Bath & Beyond Cost Plus World Market Bally Total Fitness DSW | ||||||
| Pike 7 Plaza Vienna, VA 22180(5) | 1968 | 1997 | 164,000 | $31.13 | 100% | DSW Staples TJ Maxx | ||||||
| Shoppers’ World Charlottesville, VA 23230 | 1975-2001 | 2007 | 169,000 | $11.43 | 97% | Whole Foods Staples | ||||||
| Shops at Willow Lawn Richmond, VA 23230 | 1957 | 1983 | 476,000 | $16.09 | 87% | Kroger Old Navy Ross Staples | ||||||
| Tower Shopping Center Springfield, VA 22150 | 1960 | 1998 | 112,000 | $25.43 | 69% | Talbots | ||||||
| Tyson’s Station Falls Church, VA 22043 | 1954 | 1978 | 49,000 | $37.89 | 98% | Trader Joes | ||||||
| Village at Shirlington Arlington, VA 22206(11) | 1940 | 1995 | 244,000 | $30.59 | 98% | AMC Loews Carlyle Grand Café Harris Teeter | ||||||
| Total All Regions—Retail | 18,119,000 | 95% | ||||||||||
| Total All Regions—Residential | 903 units | 95% | ||||||||||
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| (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 owned pursuant to a ground lease. |
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| (7) | This property contains nine buildings; six are owned 100% by us, one is subject to a leasehold interest, and two are subject to a ground lease. |
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| (8) | We own the controlling interest in this center. |
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| (9) | The Trust controls 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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| (12) | 50% of the ownership of this property is in a “downREIT” partnership, of which a wholly owned subsidiary of the Trust is the sole general partner, with third party partners holding operating partnership units. |
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