<PAGE>
FILE NO. 33-53311
RULE 424(b)(5)
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED JUNE 10, 1994
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY 23, 1994)
3,000,000 SHARES
NEW PLAN REALTY TRUST
LOGO NEW PLAN REALTY TRUST
COMMON SHARES
----------------
New Plan Realty Trust ("New Plan" or the "Trust"), originally organized in
1962, is an equity real estate investment trust which makes equity investments
in income-producing real estate, principally consisting of shopping centers.
The Trust is one of the largest publicly traded real estate investment trusts
in the United States based on the aggregate market value of its outstanding
common shares of beneficial interest (the "Common Shares"), and is self-
administered and self-managed.
All of the Common Shares offered hereby are being sold by the Trust. The
Common Shares are listed on the New York Stock Exchange (symbol: NPR). On June
9, 1994, the last reported sales price of the Common Shares on the New York
Stock Exchange was $22.75.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) TRUST(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Common Share.............................. $ $ $
- --------------------------------------------------------------------------------
Total(3)...................................... $ $ $
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) The Trust has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting estimated expenses of $325,000 payable by the Trust.
(3) The Trust has granted the several Underwriters an option to purchase up to
an additional 450,000 Common Shares to cover over-allotments. If all such
Common Shares are purchased, the total Price to Public, Underwriting
Discount and Proceeds to Trust will be $ , $ and $ , respectively.
See "Underwriting."
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
----------------
The Common Shares are offered by the several Underwriters, subject to prior
sale, when, as and if delivered to and accepted by them, subject to approval of
certain legal matters by counsel for the Underwriters. The Underwriters reserve
the right to withdraw, cancel or modify such offer and to reject orders in
whole or in part. It is expected that delivery of the Common Shares offered
hereby will be made in New York, New York on or about June , 1994.
----------------
MERRILL LYNCH & CO.
KIDDER, PEABODY & CO.
INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
----------------
The date of this Prospectus Supplement is June , 1994.
<PAGE>
[CHARTS TO BE INSERTED BY THE TRUST]
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON SHARES
AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-
COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
<PAGE>
Unless otherwise indicated, the information contained in this Prospectus
Supplement assumes that the Underwriters' over-allotment option is not
exercised.
THE TRUST
New Plan, one of the largest publicly traded real estate investment trusts in
the United States based on the aggregate market value of its outstanding Common
Shares, is a self-administered and self-managed equity real estate investment
trust which primarily owns shopping centers. The Trust's present equity
investments consist principally of 92 shopping centers, with approximately
11,813,000 gross rentable square feet, five factory outlet centers with
approximately 1,529,000 gross rentable square feet (including expansions under
construction of approximately 310,000 gross rentable square feet) and 15 garden
apartment complexes containing 2,862 apartment units. These properties are
located in 18 states. See "Business." The Trust has also recently entered into
contracts to purchase one shopping center with approximately 84,200 gross
rentable square feet and four garden apartment complexes containing 914
apartment units for an aggregate purchase price of approximately $24.7 million.
See "Recent Developments." Since the organization of the corporate predecessor
of the Trust in 1962, the Trust and its predecessor have been directed by
members of the Newman family, who own and control 3,085,901 Common Shares, or
approximately 6.2% of the currently outstanding Common Shares, and are the
Trust's largest group of non-institutional shareholders. See "Controlling
Shareholders." The Newman family has been active in real estate ownership and
management since 1926.
The Trust has paid regular and uninterrupted cash distributions on its Common
Shares since it commenced operations as a real estate investment trust in 1972.
These distributions, which are paid quarterly, have increased from $0.19 per
Common Share in fiscal 1973 to $1.275 per Common Share in fiscal 1993. Since
inception, each distribution has either been equal to or greater than the
distribution preceding it, and the distributions have been increased in each of
the last 60 consecutive quarters. The Trust intends to continue to declare
quarterly distributions on its Common Shares.
The Trust's primary investment strategy is to identify and purchase well-
located income-producing shopping centers and garden apartment complexes at a
discount to replacement cost. The Trust also purchases selected factory outlet
centers. The Trust seeks to achieve income growth through a program of
expansion, renovation, leasing, re-leasing and improving the tenant mix. The
Trust minimizes development risks by generally purchasing existing income-
producing properties.
The Trust generally has acquired properties for cash. It is management's
belief that its ability to purchase available properties for cash enhances its
negotiating position in obtaining attractive purchase prices. During the fiscal
year ended July 31, 1993, New Plan acquired six shopping centers and one
factory outlet center aggregating approximately 1,198,000 gross rentable square
feet and one garden apartment complex containing 220 apartment units for an
aggregate purchase price of approximately $78.2 million. Since August 1, 1993,
the Trust has acquired 15 shopping centers and three factory outlet centers
aggregating approximately 3,023,000 gross rentable square feet and three garden
apartment complexes containing 834 apartment units for an aggregate purchase
price of approximately $185 million. In a few instances properties have been
acquired subject to existing non-recourse long-term mortgages. Long-term debt
of the Trust at April 30, 1994 consisted of approximately $28.1 million of
mortgage loans. As of May 31, 1994, the Trust had also used approximately $40
million of its $65 million line of credit with The Bank of New York and Fleet
Bank, N.A. (the "Line of Credit") to purchase properties. The Trust intends to
repay the outstanding borrowings under the Line of Credit with the net proceeds
of this offering. See "Use of Proceeds."
The Trust has a highly diversified shopping center tenant base. Kmart, the
Trust's largest tenant, currently accounts for approximately 6% of revenues. No
other single tenant or chain of tenants currently accounts for more than 2% of
the Trust's revenues. Many of the shopping centers include supermarket and drug
store tenants which historically have been less susceptible to economic
downturns. See "Business."
S-3
<PAGE>
The Trust, a Massachusetts business trust, maintains its executive offices at
1120 Avenue of the Americas, New York, New York 10036, and its telephone number
is (212) 869-3000. The Trust employs approximately 260 individuals, including
executive, administrative and field personnel. Trust personnel lease, manage
and maintain or supervise the maintenance of all of the Trust's properties.
RECENT DEVELOPMENTS
The Trust has recently entered into contracts to purchase one shopping center
with approximately 84,200 gross rentable square feet and four garden apartment
complexes containing 914 apartment units for an aggregate purchase price of
approximately $24.7 million. The purchase of the four garden apartment
complexes will increase the number of apartment units in the Trust's portfolio
to 3,776. The Trust is presently conducting its due diligence review with
respect to these properties and there can be no assurance that these properties
will be purchased.
The shopping center that New Plan has contracted to acquire is Brandywine
Plaza located in DeLand, Florida. Brandywine Plaza consists of approximately
84,000 gross rentable square feet on approximately 12 acres, has space for 21
tenants and is currently 86% occupied. Brandywine Plaza's major tenants include
Winn-Dixie and Eckerd Drugs.
The four garden apartment complexes that New Plan has contracted to acquire
are Sedgefield Apartments, in Florence, South Carolina, the Trust's first
property in that state, and Paddock Place, The Pines and Cedar Village, all of
which are located in Clarksville, Tennessee. Sedgefield Apartments contains 280
apartment units and was built in 1972 and was expanded in 1974 and 1979.
Paddock Place contains 240 apartment units and was built in 1989. The Pines
contains 224 apartment units and was built in 1986. Cedar Village contains 170
apartment units and was built in 1982. All of the garden apartment complexes
under contract have landscaped grounds and a swimming pool and Sedgefield
Apartments also has three tennis courts.
In May, 1994, the Trust acquired four shopping centers containing an
aggregate of approximately 639,000 gross rentable square feet for an aggregate
purchase price of approximately $25.8 million. The four shopping centers are
Western Village and Brentwood Plaza, located in Cincinnati, Ohio; Hamilton
Plaza, located in Hamilton, New Jersey; and Albany Plaza, located in Albany,
Georgia.
Western Village consists of approximately 139,000 gross rentable square feet
on approximately 13 acres, has space for 15 tenants and is currently 100%
occupied. Western Village's major tenants include Furrows Hardware and T.J.
Maxx.
Brentwood Plaza consists of approximately 237,000 gross rentable square feet
on approximately 20 acres, has space for 34 tenants and is currently 93%
occupied. Brentwood Plaza's major tenants include TJX, IGA Supermarket and
Hader Home Improvement Center.
Hamilton Plaza consists of approximately 149,000 gross rentable square feet
on approximately 18 acres, has space for eight tenants and is currently 97%
occupied. Hamilton Plaza's major tenants include Kmart and Acme Supermarket.
Albany Plaza consists of approximately 114,000 gross rentable square feet on
approximately seven acres, has space for 11 tenants and is currently 99%
occupied. Albany Plaza's major tenants include Food Lion Supermarket, Big Lots
and Eckerd Drugs.
The Trust is presently discussing with The Bank of New York and Fleet Bank,
N.A. an increase in the Line of Credit from $65 million to $100 million on the
same terms and conditions as the existing Line of Credit.
In the nine-month period ended April 30, 1994, net income totaled $38,143,000
(or $.78 per Common Share) on revenues of $73,053,000. Set forth below is
certain selected financial data of the Trust which should
S-4
<PAGE>
be read in conjunction with the financial statements of the Trust and related
notes thereto incorporated herein by reference.
<TABLE>
<CAPTION>
NINE MONTHS ENDED APRIL 30,
---------------------------
1993 1994
------------- -------------
(UNAUDITED)
(IN THOUSANDS EXCEPT
PER SHARE DATA)
<S> <C> <C>
Income Statement Data:
Revenues......................................... $ 56,196 $ 73,053
Net income....................................... 32,295 38,143
Net income per Common Share...................... .67 .78
Other Data:
Funds from operations(1)......................... $ 36,844 $ 45,393
Balance Sheet Data:
Total assets..................................... $ 533,113 $ 565,184
Shareholders' equity............................. 501,522 501,303
</TABLE>
- --------
(1) Net income plus depreciation and amortization of properties, adjusted for
gains and losses from the sale of assets. Industry analysts generally
consider funds from operations to be an appropriate measure of the
performance of an equity REIT. Funds from operations does not represent
cash generated from operating activities in accordance with generally
accepted accounting principles and should not be considered as an
alternative to net income as an indicator of the Trust's operating
performance or as an alternative to cash flow as a measure of liquidity.
USE OF PROCEEDS
The net proceeds to the Trust from the sale of the Common Shares offered
hereby are estimated at approximately $64.4 million (approximately $74.2
million if the Underwriters' over-allotment option is exercised in full),
assuming an offering price of $22.75 per share (the closing price of the Common
Shares on the New York Stock Exchange on June 9, 1994). Approximately $40
million of the net proceeds will be used to repay borrowings outstanding under
the Line of Credit. The borrowings outstanding under the Line of Credit
presently bear interest at a weighted average rate of 4.83% and are due and
payable on December 29, 1994. The balance of the net proceeds will be used to
make future property acquisitions, to finance property expansions and
renovations underway and planned, and for general trust purposes. Pending such
uses, the net proceeds may be invested in short-term income producing
investments such as investments in commercial paper, government securities or
money market funds that invest in government securities.
S-5
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Trust as of April
30, 1994 and as adjusted to give effect to this offering and the anticipated
use of the proceeds thereof as described under "Use of Proceeds."
<TABLE>
<CAPTION>
HISTORICAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Notes payable(1)..................................... $ 25,000 --
======== ========
Long-term debt:
Mortgage notes payable(2)............................. 28,140 $ 28,140
-------- --------
Shareholders' equity:
Common Shares of Beneficial Interest, without par
value, unlimited Common Shares authorized; 49,422,890
Common Shares outstanding;
52,422,890 Common Shares outstanding, as adjusted(3). 541,464 605,908
-------- --------
Total shareholders' equity.............................. 501,303 565,747
-------- --------
Total capitalization.................................... $529,443 $593,887
======== ========
</TABLE>
- --------
(1) As of May 31, 1994, short-term notes payable under the Line of Credit were
approximately $40,000,000. The "As Adjusted" column above reflects
repayment of these notes from the proceeds of this offering.
(2) Includes current portion of long-term debt. The rates of interest on
outstanding mortgage indebtedness range from 6.53% to 10.75%; the weighted
average interest rate of the mortgages was 8.9% at April 30, 1994.
(3) Does not include 356,000 Common Shares reserved for issuance under the
Trust's 1985 Incentive Stock Option Plan, 1,000,000 Common Shares reserved
for issuance under the Trust's 1991 Stock Option Plan, 1,300,000 Common
Shares reserved for issuance under the Trust's March 1991 Stock Option
Plan, and 6,300 Common Shares reserved for issuance under the Trust's Non-
Incentive Stock Option Plan.
S-6
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth selected financial data for the Trust and
should be read in conjunction with the financial statements of the Trust and
related notes thereto incorporated herein by reference.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
-----------------------------------------------------------------------------------------
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues
Rental income.......... $ 17,289 $ 19,662 $ 21,879 $ 26,164 $ 28,463 $ 33,763 $ 38,041 $ 41,395 $ 47,595 $ 65,308
Interest and dividends. 4,815 6,564 9,523 9,235 8,857 9,778 16,082 15,988 17,097 11,001
Other revenues......... 108 75 881 460 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
22,212 26,301 32,283 35,859 37,320 43,541 54,123 57,383 64,692 76,309
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Operating expenses
Property operating
costs................. 6,868 7,538 8,411 9,772 9,871 11,547 14,916 14,133 16,163 22,440
Interest on mortgages &
notes(1).............. 4,281 4,104 5,673 5,713 2,035 1,933 1,901 1,935 1,527 1,386
Depreciation and
amortization.......... 1,511 1,725 2,057 2,406 2,569 3,164 3,563 4,205 5,051 7,574
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
12,660 13,367 16,141 17,891 14,475 16,644 20,380 20,273 22,741 31,400
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Operating income........ 9,552 12,934 16,142 17,968 22,845 26,897 33,743 37,110 41,951 44,909
Other income............ 263 -- 701 1,454 2,223 2,153 3,262 4,789 10,064 940
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
9,815 12,934 16,843 19,422 25,068 29,050 37,005 41,899 52,015 45,849
Other deductions(1)..... 1,054 1,153 1,225 1,456 1,618 1,939 1,958 2,021 2,569 2,620
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net income.............. $ 8,761 $ 11,781 $ 15,618 $ 17,966 $ 23,450 $ 27,111 $ 35,047 $ 39,878 $ 49,446 $ 43,229
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Net income per Common
Share(2)............... .62 .70 .78 .80 .88 .95 1.01 1.05 1.08 .89
OTHER DATA:
Funds from
operations(1)(3)....... $ 10,010 $ 13,506 $ 16,974 $ 20,413 $ 23,796 $ 28,123 $ 35,347 $ 39,294 $ 44,433 $ 49,863
Distributions paid...... 8,111 11,003 14,747 18,257 23,780 28,148 36,557 43,640 55,173 61,963
Distributions paid per
Common Share(2)........ .57 .65 .73 .81 .89 .97 1.05 1.13 1.21 1.275
Weighted average number
of Common Shares
outstanding(2)......... 14,170 16,890 20,033 22,585 26,734 28,620 34,844 38,138 45,971 48,838
<CAPTION>
JULY 31,
-----------------------------------------------------------------------------------------
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Real estate (at cost)... $ 52,331 $ 58,208 $ 82,042 $ 92,867 $107,310 $137,081 $168,601 $180,361 $301,136 $388,228
Total assets............ 108,149 111,153 190,740 189,280 187,319 301,282 307,678 461,913 530,827 534,248
Long-term debt(4)....... 46,988 44,317 96,273 26,714 22,748 22,971 22,938 18,868 17,831 23,321
Shareholders' equity.... 57,163 63,103 90,884 159,368 161,866 274,199 279,490 437,206 506,339 500,571
</TABLE>
- --------
(1) Certain amounts prior to 1993 have been reclassified to conform to the 1993
presentation.
(2) Adjusted to give effect to the 3-for-2 share split on April 1, 1986.
(3) Net income plus depreciation and amortization of properties, adjusted for
gains and losses from the sale of assets and a non-cash accounting charge
of $1,495,000 in 1987. Industry analysts generally consider funds from
operations to be an appropriate measure of the performance of an equity
REIT. Funds from operations does not represent cash generated from
operating activities in accordance with generally accepted accounting
principles and should not be considered as an alternative to net income as
an indicator of the Trust's operating performance or as an alternative to
cash flow as a measure of liquidity.
(4) Includes current installments on mortgage notes and bonds payable.
S-7
<PAGE>
PRICE RANGE OF THE COMMON SHARES AND DISTRIBUTIONS
The Common Shares are listed on the New York Stock Exchange under the symbol
NPR. The following table sets forth for the periods indicated, the high and low
sale prices of the Common Shares as reported by the New York Stock Exchange
and, prior to June 12, 1986, by the American Stock Exchange, and the cash
distributions paid in such periods (the Common Share prices and distributions
have been adjusted to give effect to a 2-for-1 split on February 1, 1983, and a
3-for-2 split on April 1, 1986).
<TABLE>
<CAPTION>
CASH DISTRIBUTIONS PAID
FISCAL YEAR ENDED JULY 31, HIGH LOW PER COMMON SHARE
-------------------------- ------ ------ ------------------------
<S> <C> <C> <C> <C>
1980...................... $ 3.85 $ 2.51 $ .30
1981...................... 4.14 3.65 .34
1982...................... 5.33 3.46 .39
1983...................... 9.50 4.96 .51
1984...................... 8.50 7.25 .57
1985...................... 11.92 7.50 .65
1986...................... 14.50 10.00 .73
1987...................... 18.38 13.00 .81
1988...................... 17.63 10.75 .89
1989...................... 17.88 14.38 .97
1990...................... 19.13 14.88 1.05
1991...................... 21.25 13.75 1.13
1992...................... 25.00 19.63 1.21
1993...................... 26.38 21.50 1.275
1994
1st Quarter............. 26.38 21.50 .325
2nd Quarter............. 25.75 21.25 .3275
3rd Quarter............. 24.25 20.88 .33
4th Quarter (through
June 9, 1994).......... 23.50 21.50 .3325
</TABLE>
The last reported sale price of the Common Shares on the New York Stock
Exchange on June 9, 1994 was $22.75. The number of shareholders of record at
June 8, 1994 was 11,511. The First National Bank of Boston is registrar and
transfer agent for the Common Shares.
Since its organization in 1972, the Trust has made regular and uninterrupted
distributions and such distributions have never been omitted or reduced.
Distributions have been increased in each of the last 60 consecutive quarters.
The Trust intends to continue to declare quarterly distributions on its
Common Shares. However, no assurances can be made as to the amounts of future
distributions since such distributions are subject to the Trust's cash flow
from operations, earnings, financial condition, capital requirements and such
other factors as the Board of Trustees deems relevant. A principal factor in
the determination of the amounts of distributions is the requirement of the
Internal Revenue Code of 1986, as amended, that a real estate investment trust
must distribute at least 95% of its taxable income.
S-8
<PAGE>
HISTORICAL TOTAL RETURNS
Set forth below are the cumulative and average annual rates of pre-tax total
return (increase or decrease in market value of the Common Shares over the
previous year plus distributions paid) which would have been realized by an
investor who purchased Common Shares on the open market at the beginning of the
periods indicated and sold such Common Shares on the open market at the end of
the periods indicated. Past performance is not necessarily indicative of the
results that can be expected in the future from an investment in the Trust's
Common Shares.
<TABLE>
<CAPTION>
AVERAGE
CUMULATIVE ANNUAL RATE
TOTAL OF TOTAL
PERIOD RETURN RETURN
------ ---------- -----------
<S> <C> <C>
Eighteen years ended July 31, 1993(1)................. 4,732% 25%
Ten years ended July 31, 1993(1)...................... 407% 18%
Five years ended July 31, 1993(1)..................... 108% 16%
One year ended July 31, 1993.......................... 11% 11%
From August 1, 1993 through June 9, 1994(2)........... 3% --
</TABLE>
- --------
(1) Includes the annual reinvestment of distributions.
(2) Assumes the payment of the $.3325 distribution per share declared on May
26, 1994, which is payable on July 6, 1994 to shareholders of record on
June 15, 1994.
DISTRIBUTION REINVESTMENT AND SHARE PURCHASE PLAN
The Trust has a Distribution Reinvestment and Share Purchase Plan which
allows shareholders to acquire additional Common Shares by automatically
reinvesting distributions. Common Shares are acquired pursuant to the Plan at a
price equal to 95% of the market price of such Common Shares on the dividend
payment date, without payment of any brokerage commission or service charge.
The Plan also allows shareholders to purchase additional Common Shares at 100%
of the average of the high and low sales price of such Common Shares on the
dividend payment date in January, April, July and October of each year, by
making optional cash payments, without payment of any brokerage commission or
service charge. Shareholders who do not participate in the Plan continue to
receive cash distributions, as declared. At present, approximately 62% of the
Trust's eligible shareholders participate in the Plan. William Newman, the
Chairman of the Board and Chief Executive Officer of the Trust, is the largest
individual participant in the Plan.
BUSINESS
The Trust presently owns or has leasehold interests in 92 shopping centers
containing an aggregate of approximately 11,813,000 gross rentable square feet.
Substantially all of the shopping centers are community and neighborhood
centers. The centers frequently include supermarket chains and drug stores as
major tenants and in some instances the centers include discount department
stores. Twenty-one of the shopping centers are located in New York, 15 in Ohio,
13 in Georgia, eight in Pennsylvania, six each in Kentucky and Virginia, five
in North Carolina, four each in Indiana and Tennessee, three each in New Jersey
and West Virginia, two in Delaware and one each in Maryland and Michigan. The
Trust also owns five factory outlet centers aggregating approximately 1,529,000
gross rentable square feet (including expansions under construction of
approximately 310,000 gross rentable square feet). Two of the centers are
located in Missouri and one center is located in each of California, Florida
and Virginia. The Trust also owns 15 garden apartment complexes with an
aggregate of 2,862 apartment units. Four of the apartment complexes are located
in Kentucky, three in Alabama, two each in Delaware, New York and Tennessee,
and one each in Florida and Ohio. Approximately 70% of the apartment units have
two or more bedrooms. The Trust believes that all of its properties are
adequately covered by insurance.
Kmart, the Trust's largest tenant, currently accounts for approximately 6% of
revenues. No other single tenant or chain of tenants currently accounts for
more than 2% of the Trust's revenues. For a complete listing of the Trust's
properties, see the "Schedule of Properties" below.
S-9
<PAGE>
The Trust intends to continue to invest in well-located income-producing
real estate, with a primary emphasis on shopping centers and garden apartment
complexes. The Trust may also continue to invest in selected factory outlet
centers. An important part of the Trust's investment strategy is to enhance
the cash flow potential of its properties through a program of expansion,
renovation, leasing, re-leasing and improving the tenant mix. The recent
economic recession and tight real estate credit conditions have led to
financial difficulties for leveraged property owners and their lenders
creating an additional source of acquisitions for the Trust. Management
expects the number of properties available for purchase from these sources to
continue.
The Trust often seeks properties located in small cities. Currently, none of
the Trust's shopping centers are enclosed malls. Many of the centers feature
supermarket and drug store tenants and some of the centers include discount
department stores. Supermarkets and drug stores historically have been less
susceptible to economic downturns. The Trust attempts to acquire each shopping
center and apartment complex at a discount to replacement cost. Properties
purchased substantially below replacement cost generally have low rent which
may allow for significant increases. By primarily purchasing completed income-
producing properties rather than building them, the Trust has avoided
development risks.
Recently, the Trust has purchased newer and more modern shopping centers at
below replacement cost. The average size of the supermarkets in these centers
exceeds 40,000 square feet, representing current food store designs. The Trust
believes that such newer, high-quality centers will continue to be available
below replacement cost.
The Trust generally seeks to acquire properties in those states in which it
already owns property or in an adjacent state to allow for efficient
management. The Trust also attempts to acquire shopping centers which provide
opportunities for expansion or would benefit from renovation. See "Renovations
and Expansions."
A substantial portion of the Trust's shopping center income consists of
rents received under long-term leases. Most of these shopping center leases
provide for payment by tenants of an annual minimum rent and additional rent
calculated generally as a percentage of gross sales in excess of a specified
amount ("percentage rent"), and many leases also have cost of living
escalation clauses. Upon renewal of a shopping center lease, the annual
minimum rent of a tenant is generally increased to an amount which approaches
or exceeds the sum of the former annual minimum rent plus the most recent
annual percentage rent received from the tenant. The Trust's apartments are
generally rented on a one-year basis.
The Trust's shopping center leases usually provide that the Trust, as
landlord, must repair and maintain building exteriors (including roofs and
canopies and external utilities) and common areas, including parking lots.
Most of the shopping center leases also contain provisions for pro rata
contribution by tenants to the cost of maintaining common areas and payment of
real estate taxes. New leases generally provide for full pro rata recovery of
these costs from tenants.
In order to protect and enhance its investments, the Trust incurs
unreimbursed costs for renovation of its properties. The Trust also seeks to
commit tenants to make improvements to their premises, including sign
installation and store modernization. The management of the Trust believes
that because such renovations and improvements enhance the appearance of the
shopping centers, customer traffic may increase. To the extent that additional
customer traffic results in higher sales, percentage rents received by the
Trust with respect to that shopping center may increase. As a result, the
Trust is in a better position to receive higher minimum rents upon the
expiration of leases from existing tenants or new leases.
In addition to the real estate properties described above, the Trust holds
three purchase money first mortgages at per annum interest rates of 9.375%,
9.875% and 10%, a second mortgage at a per annum
S-10
<PAGE>
interest rate of 10.5%, a leasehold mortgage at a per annum interest rate of
12% and a note receivable at a per annum interest rate of 11.5%. The mortgages
and note receivable, all of which are presently current, totalled $22,918,000
at April 30, 1994. The mortgages are collateralized by shopping centers located
in New York and Pennsylvania. These shopping centers contain an aggregate of
approximately 536,000 gross rentable square feet. The Trust also owns 55 acres
of vacant land in Jackson Township, New Jersey, an approximately 51,000 square
foot office building in Princeton, New Jersey and minor interests in several
publicly traded real estate entities, consisting of convertible debentures and
shares of beneficial interest.
Under various Federal, state and local laws, ordinances and regulations, an
owner of real estate or interests therein may be liable for the costs of
removal or remediation of certain hazardous substances on or in such property.
Such enactments often impose such liability without regard to whether the owner
knew of, or was responsible for, the presence of such hazardous substances. The
cost of any required remediation and the owner's liability therefor as to any
property is generally not limited under such enactments and could exceed the
value of the property and/or the aggregate assets of the owner. The presence of
such substances, or the failure to properly remediate such substances, may also
adversely affect the owner's ability to sell or rent such property or to borrow
using such property as collateral.
The Trust's management is not aware of any environmental liability that it
believes could have a material adverse effect on the Trust's financial
condition or results of operations. In addition, since 1989, the Trust has
typically conducted Phase I environmental audits (which generally involve
inspection without soil sampling or ground water analysis) in connection with
property acquisitions and none of these audits has revealed the existence of
any environmental conditions that the Trust's management believes could have a
material adverse effect on the Trust's financial condition or results of
operations. No assurance, however, can be given that these audits reveal all
environmental liabilities, that environmental liabilities may not have
developed since such audits were conducted or that no material adverse
environmental condition exists that is not known to the Trust.
The success of the Trust depends, among other factors, upon the trends of the
economy, including interest rates, construction costs, income tax laws and
increases or decreases in operating expenses, governmental regulations and
legislation, including environmental requirements, real estate fluctuations,
retailing trends, population trends, zoning laws, the financial condition and
stability of tenants, the availability of financing and capital on satisfactory
terms and the ability of the Trust to compete with others for tenants and keep
its properties leased at profitable levels. The Trust competes for properties
with an indeterminate number of investors, including domestic and foreign
corporations and financial institutions, and an increasing number of real
estate investment trusts, life insurance companies, pension funds and trust
funds. The Trust regularly reviews its portfolio and from time to time
considers the sale of certain of its properties.
RENOVATIONS AND EXPANSIONS
The Trust is continuously engaged in a major program of renovation or
expansion of its existing properties. Renovations and expansions are currently
underway or are planned at several of the Trust's properties, the estimated
short term aggregate cost of which is approximately $28,100,000. These
renovations and expansions consist primarily of a $8.9 million expansion
underway at the Branson, Missouri factory outlet center, a $7.3 million
expansion underway at the Barstow, California factory outlet center, a $4.9
million expansion underway at the Osage Beach, Missouri factory outlet center,
a $3.6 million renovation and expansion underway at the Moundsville Plaza
Shopping Center in Moundsville, West Virginia, a $1.1 million expansion planned
at the St. Augustine, Florida factory outlet center and a $750,000 renovation
planned at the Northland Plaza Shopping Center in Watertown, New York.
S-11
<PAGE>
SCHEDULE OF PROPERTIES
The Trust owns or has a leasehold interest in 92 shopping centers and five
factory outlet centers containing an aggregate of approximately 13,342,000
gross rentable square feet (including expansions under construction of
approximately 310,000 gross rentable square feet), at an average cost of
approximately $37.13 per rentable square foot (excluding expansions) against
which the average debt was approximately $1.95 per rentable square foot at
April 30, 1994. Average annual rental per square foot was approximately $6.51
at July 31, 1993. The Trust owns 15 garden apartment complexes consisting of
2,862 rental apartment units at an average cost of approximately $21,725 per
apartment unit against which the average debt was approximately $961 per
apartment unit at April 30, 1994. Average monthly rental per apartment unit was
approximately $478 at April 30, 1994. The following schedule sets forth certain
information concerning the Trust's properties, properties under contract and
mortgages held.
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94
- -------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
SHOPPING AND FACTORY OUTLET CENTERS:
Rockland Plaza 256,000 sq. ft. Shopping Fee 37 94 $14.53 None Marshall's
Nanuet, NY Center on 28 acres Barnes & Noble
Tower Records
Rock Bottom
Modell's
Northland Shopping Plaza 123,000 sq. ft. Shopping Fee 11 91 5.23 None Ames
Watertown, NY Center on 23 acres Kinney Drugs
Oswego Plaza 131,000 sq. ft. Shopping Fee 15 86 4.24 None J.C. Penney
Oswego, NY Center on 20 acres P&C Foods
Radio Shack
University Mall 78,000 sq. ft. Shopping Fee 7 89 5.66 None Ames
Canton, NY Center on 25 acres
Montgomery Ward 84,000 sq. ft. Department Fee 1 100 1.79 None Montgomery Ward
Rome, NY Store on 7 acres
Mohawk Acres 108,000 sq. ft. Shopping Fee 22 92 8.96 None McCrory
Rome, NY Center on 13 acres Rite Aid
SoFro Fabrics
Westgate Plaza 72,000 sq. ft. Shopping Fee 4 100 5.53 None Ames
Oneonta, NY Center on 11 acres Grand Union
Rite Aid
Westgate Manor Plaza 66,000 sq. ft. Shopping Fee 11 82 7.13 None Victory Markets
Rome, NY Center on 15 acres McCrory
Rite Aid
D&F Plaza 192,000 sq. ft. Shopping Fee 22 69 5.61 None J.C. Penney
Dunkirk, NY Center on 30 acres Quality Markets
South Plaza 144,000 sq. ft. Shopping Fee 15 98 4.55 None Ames
Norwich, NY Center on 36 acres Victory Markets
Fay's Drug
River Road and 123,000 sq. ft. Shopping Fee 2 100 .87 None U.S. Post Office
Cavanaugh Road Center on 21 acres R. Alexander
Marcy, NY
Cortlandville 100,000 sq. ft. Shopping Fee 3 100 3.51 None Ames
Cortland, NY Center on 13 acres Victory Market
Kinney Drugs
Church Street 45,000 sq. ft. Shopping Fee 2 100 3.35 None Victory Markets
Gloversville, NY Center on 4 acres
</TABLE>
S-12
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94
- -------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
East Washington & 54,000 sq. ft. Shopping Fee 1 100 $ 2.20 None Tops Markets
Grand Central Aves. Center on 5 acres
Elmira, NY
Cayuga Mall 207,000 sq. ft. Shopping Fee 14 88 5.08 None TJX
Ithaca, NY Center on 22 acres P&C Market
Fay's Drug
McKinley Plaza 93,000 sq. ft. Shopping Fee 12 100 10.36 None T.J. Maxx
Hamburg, NY Center on 20 acres Kids-R-Us
Linens N Things
JoAnn Fabrics
Kmart Plaza 116,000 sq. ft. Shopping Fee 4 100 (1) None Kmart
Dewitt, NY Center on 11 acres Office Max
Pyramid Mall 233,000 sq. ft. Shopping Fee 9 88 (1) None Kmart
Geneva, NY Center on 37 acres Tops
Shoppes at 238,000 sq. ft. Shopping Fee 12 78 (1) None Kmart
Seneca Mall Center on 30 acres Price Chopper
Liverpool, NY Fay's Drug
JoAnn Fabrics
Transit Road Plaza 138,000 sq. ft. Shopping Fee 4 100 (1) None Kmart
Lockport, NY Center on 15 acres Quality Markets
Price Chopper Plaza 78,000 sq. ft. Shopping Fee 4 100 (1) None Price Chopper
Rome, NY Center on 6 acres Fay's Drug
St. Augustine 307,000 sq. ft. Shopping Fee 94 100 14.96 $113,946 WestPoint Pepperell
Outlet Center Center on 32 acres Levis
St. Augustine, FL Mikasa
Brandywine Plaza 84,000 sq. ft. Shopping Fee(2) (2) (2) (1) None Winn-Dixie
DeLand, FL Center on 12 acres Eckerd Drugs
Columbus Center 270,000 sq. ft. Shopping Fee 15 78 3.28 None Hills
Columbus, IN Center on 24 acres Big Blue
Big Lots
Jasper Manor 194,000 sq. ft. Shopping Fee 9 89 5.73 None Kmart
Jasper, IN Center on 26 acres J.C. Penney
Goody's
Holiday Foods
Town Fair Shopping 114,000 sq. ft. Shopping Fee 6 100 5.11 None Kmart
Center Center on 15 acres Goody's
Princeton, IN
Wabash Crossing 167,000 sq. ft. Shopping Fee 10 100 (1) None Kmart
Wabash, IN Center on 18 acres Clark's Food
Walgreen's
U.S. Route 13 and 110,000 sq. ft. Shopping Fee 1 99 .30 None Wicomico
Clyde Avenue Center on 16 acres Shoppers Bazaar
Salisbury, MD
Washtenau Fountain Plaza 136,000 sq. ft. Shopping Fee 8 93 10.20 None Builder's Square
Ypsilanti, MI Center on 12 acres Dunham's
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94
- -------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Osage Factory Outlet 399,000 sq. ft. Shopping Fee 95 99 $14.76 None Polo
Village Center on 147 acres(3) Lenox China
Osage Beach, MO Ann Klein
Nike
Van Heusen
Branson Factory Outlet 315,000 sq. ft. Shopping Fee 51 100 (1) None Van Heusen
Branson, MO Center on 39 acres(4) London Fog
Bass
Middletown Plaza 123,000 sq. ft. Shopping Fee 20 63 11.20 None ShopRite
Middletown, NJ Center on 19 acres Thrift Drug
Laurel Square 243,000 sq. ft. Shopping Fee 27 99 8.49 None Kmart
Bricktown, NJ Center on 35 acres Pathmark
Hamilton Plaza 149,000 sq. ft. Shopping Fee 7 97 (1) None Kmart
Hamilton, NJ Center on 18 acres Acme Supermarket
Fayetteville Road 107,000 sq. ft. Shopping Fee 1 4 1.16 None Hardee's
Lumberton, NC Center on 17 acres
U.S. 301 South 105,000 sq. ft. Shopping Fee 1 100 1.22 None Goodwin-Tew, Inc.
Wilson, NC Center on 17 acres
Route 7 and 4,000 sq. ft. Shopping Fee 1 100 8.90 None Pizza Hut
Greenville Road Center on 1 acre
Greenville, NC
U.S. Route 70 80,000 sq. ft. Shopping Fee 1 100 1.55 None Goldsboro
Goldsboro, NC Center on 10 acres Flea Market
Neuse Boulevard 99,000 sq. ft. Shopping Fee 1 100 .61 None Flea City
New Bern, NC Center on 19 acres Superstores
Silver Bridge Plaza 146,000 sq. ft. Shopping Fee 14 77 4.54 None Quality Stores
Gallipolis, OH Center on 20 acres Kroger
Rite Aid
Belpre Plaza 89,000 sq. ft. Shopping Leasehold 9 50 3.40 None Kroger
Belpre, OH Center on 8 acres Nelson's Drugs
Parkway Plaza 141,000 sq. ft. Shopping Fee 17 74 3.19 None The Pharm
Maumee, OH Center on 12 acres Value City
Southwood Plaza 83,000 sq. ft. Shopping Fee 9 65 2.91 None Big Lots
Bowling Green, OH Center on 44 acres Rite Aid
Fairfield Mall 74,000 sq. ft. Shopping Fee 8 96 6.09 None Kroger
Fairfield, OH Center on 9 acres Don-A-Lee
Central Avenue 157,000 sq. ft. Shopping Fee 5 100 3.26 None Woolworth
Market Place Center on 18 acres Kroger
Toledo, OH Jo-Ann Fabrics
Harbor Plaza 52,000 sq. ft. Shopping Fee 8 83 6.79 None Super Duper
Ashtabula, OH Center on 7 acres Rite Aid
Millersburg 17,000 sq. ft. Shopping Fee 3 86 8.02 None Rite Aid
Millersburg, OH Center on 3 acres
Genoa 17,000 sq. ft. Shopping Fee 5 100 7.84 $600,375 Rite Aid
Genoa, OH Center on 2 acres
The Marketplace 170,000 sq. ft. Shopping Fee 13 91 4.28 None Quality Stores
Piqua, OH Center on 18 acres Pic n' Save
Revco Drugs
</TABLE>
S-14
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94
- -------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
South Towne 309,000 sq. ft. Shopping Fee 33 96 $ 6.46 None Kmart
Center Center on 29 acres Burlington Coat
Dayton, OH Factory
New Boston SC 234,000 sq. ft. Shopping Fee 16 99 6.51 $9,309,000 Wal-mart
New Boston, OH Center on 22 acres Festival Food
Goody's
Sears
Brentwood Plaza 237,000 sq. ft. Shopping Fee 29 93 (1) None TJX
Cincinnati, OH Center on 20 acres IGA Supermarkets
Western Village 139,000 sq. ft. Shopping Fee 15 100 (1) None Furrows
Cincinnati, OH Center on 13 acres T.J. Maxx
Heritage Square 232,000 sq. ft. Shopping Fee 20 100 (1) None Bag 'N Save
Dover, OH Center on 29 acres Stambaugh
Odd Lots
Revco Drugs
Roosevelt Mall 250,000 sq. ft. Shopping Part Fee and 57 86 21.77 None Hermans
Philadelphia, PA Center on 36 acres Part Leasehold Rite Aid
Sizes Unlimited
Sam Goody
John Wanamaker Dept. 313,000 sq. ft. Fee 1 100 1.29 None John Wanamaker's
Store Department Store
Philadelphia, PA with parking on
Roosevelt Mall site
Roosevelt Mall Annex 36,000 sq. ft. Shopping Fee 8 58 25.07 None Roy Rogers
Philadelphia, PA Center on Roosevelt Fayva Shoes
Mall site Lenscrafters
Route 94 South 87,000 sq. ft. Shopping Fee 2 99 2.59 None Hardee's
and Clover Lane Center on 12 acres
Hanover, PA
Route 422 83,000 sq. ft. Shopping Fee 1 100 1.11 None Pharmhouse
Annville, PA Center on 15 acres
Cross Roads Plaza 105,000 sq. ft. Shopping Fee 12 95 3.76 None Quality Stores
Mt. Pleasant, PA Center on 14 acres Revco Drugs
Big Lots
Northland Center 94,000 sq. ft. Shopping Part Fee and 17 96 10.38 None Giant Food
State College, PA Center on 15 acres Part Leasehold CVS Drugs
Stone Mill Plaza 95,000 sq. ft. Shopping Fee 21 97 (1) None Giant Food
Lancaster, PA Center on 21 acres Rite Aid
Kings Giant 159,000 sq. ft. Shopping Leasehold 16 96 3.34 None Food Lion
Shopping Center Center on 18 acres Furniture City
Kingsport, TN
Georgetown Square 104,000 sq. ft. Shopping Fee 21 83 (1) None Kroger
Murfreesboro, TN Center on 12 acres Super X Drugs
Congress Crossing 172,000 sq. ft. Shopping Fee 15 95 6.44 None Kmart
Athens, TN Center on 39 acres Red Foods
Greeneville Commons 223,000 sq. ft. Shopping Fee 20 96 6.30 None Kmart
Greeneville, TN Center on 26 acres Belk's
Goody's
J.C. Penney
</TABLE>
S-15
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94
- -------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Main Street 119,000 sq. ft. Shopping Fee 2 69 $ 1.76 None Pizza Hut
and Moseby Road Center on 10 acres
Harrisonburg, VA
Jefferson Davis 87,000 sq. ft. Shopping Fee 1 100 3.14 None Pharmhouse
Boulevard Center on 8 acres
Spotslvania, VA
U.S. Routes 1 and 301 82,000 sq. ft. Shopping Fee 0 0 N/A None N/A
Colonial Heights, VA Center on 10 acres
Hanover Square 130,000 sq. ft. Shopping Fee 23 95 8.94 None UKrop's
Mechanicsville, VA Center on 14 acres Toy Works
Ridgeview Centre 177,000 sq. ft. Shopping Fee 16 97 6.21 $4,613,386 Kmart
Wise, VA Center on 30 acres Piggly Wiggly
Victorian Square 271,000 sq. ft. Shopping Fee 30 98 (1) None Kmart
Midlothian, VA Center on 34 acres Lowes
Farm Fresh
Fort Chiswell Factory 176,000 sq. ft. Shopping Fee 29 58 (1) None Polo
Outlet Center on 55 acres London Fog
Max Meadows, VA
Grand Central Plaza 75,000 sq. ft. Shopping Leasehold 7 100 5.09 None Sun T.V.
Parkersburg, WV Center on 7 acres Watsons
Moundsville Plaza 143,000 sq. ft. Shopping Fee 15 84 3.81 None Kroger
Moundsville, WV Center on 29 acres Dollar Bargain
Hook-Super X
Kmart Plaza 102,000 sq. ft. Shopping Fee 11 99 3.95 None Kmart
Vienna, WV Center on 14 acres
New Louisa Plaza 111,000 sq. ft. Shopping Fee 12 92 3.05 None Wetterau
Louisa, KY Center on 20 acres Rite Aid
Family Dollar
J* Town Center 188,000 sq. ft. Shopping Fee 24 96 4.98 None Target Stores
Jeffersontown, KY Center on 17 acres Wetterau
Jackson Village 145,000 sq. ft. Shopping Fee 8 62 3.23 None Wal-mart
Jackson, KY Center on 48 acres Winn-Dixie
Rite Aid
Chinoe Village 100,000 sq. ft. Shopping Fee 19 55 4.76 None Winn-Dixie
Lexington, KY Center with office space
on 10 acres
Piccadilly Square 96,000 sq. ft. Shopping Fee 13 96 3.60 None Big Lots
Louisville, KY Center on 13 acres Winn-Dixie
Taylor Drug
Eastgate Shopping 145,000 sq. ft. Shopping Fee 25 95 (1) None Kroger
Center Center on 18 acres
Middletown, KY
Rodney Village 216,000 sq. ft. Shopping Fee 20 66 4.66 None Foodliner
Shopping Center Center on 15 acres Thrift Drug
Dover, DE McCrory
Doverama at Rodney 30,000 sq. ft. Shopping 75% Owned 1 100 1.22 None Brunswick
Village Center on 1 acre
Dover, DE
Southgate Plaza 60,000 sq. ft. Shopping Fee 6 85 2.98 None Eckerd Drugs
Albany, GA Center on 5 acres
Eastgate Plaza 44,000 sq. ft. Shopping Fee 7 100 4.20 None Winn-Dixie
Americus, GA Center on 4 acres Eckerd Drugs
Family Dollar
</TABLE>
S-16
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94
- -------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Perlis Plaza 166,000 sq. ft. Shopping Fee 26 88 $ 4.76 None Belk's
Americus, GA Center on 20 acres Piggly Wiggly
Rite Aid
Rogers Plaza 50,000 sq. ft. Shopping Fee 4 59 2.87 None Piggly Wiggly
Ashburn, GA Center on 5 acres Rite Aid
Cordele Square 131,000 sq. ft. Shopping Fee 12 87 3.43 None Belk's
Cordele, GA Center on 11 acres Piggly Wiggly
Goody's
Mr. B's 14,000 sq. ft. Shopping Fee 7 74 3.14 None Southern Sunrise
Cordele, GA Center on 1 acre
Southgate Plaza 39,000 sq. ft. Shopping Fee 3 54 2.91 None B.C. Moore
Cordele, GA Center on 3 acres
Westgate 191,000 sq. ft. Shopping Fee 21 80 3.93 None Piggly Wiggly
Dublin, GA Center on 35 acres Sears
Tift-Town 61,000 sq. ft. Shopping Fee 10 58 2.99 None Family Dollar
Tifton, GA Center on 4 acres Revco Drugs
Westgate 16,000 sq. ft. Shopping Fee 5 100 5.68 None Nationwise Auto
Tifton, GA Center on 2 acres Volume Shoe
Habersham Village 147,000 sq. ft. Shopping Fee 13 94 5.42 None Kmart
Cornelia, GA Center on 18 acres Winn Dixie
Victory Square 165,000 sq. ft Shopping Fee 20 97 6.28 None Scotty's
Savannah, GA Center on 35 acres Food Lion
Albany Plaza 114,000 sq. ft. Shopping Fee 11 99 (1) None Food Lion
Albany, GA Center on 7 acres Big Lot
Turners
Eckerd Drugs
Barstow Factory Outlet 332,000 sq. ft. Shopping Fee 56 100 (1) $10,718,855 Polo
Barstow, CA Center on 49 acres (5) Coach
Brooks Brothers
GARDEN APARTMENTS:
Devonshire Place 284 Unit Garden Apartments Fee 281 99 N/A None N/A
Birmingham, AL on 16 acres
Breckenridge 120 Unit Garden Apartments Fee 119 99 N/A None N/A
Birmingham, AL on 7 acres
Courts at Wildwood 220 Unit Garden Apartments Fee 218 99 N/A 2,750,000 N/A
Birmingham, AL on 7 acres
Rodney 207 Unit Garden Apartments Fee 204 99 N/A None N/A
Dover, DE on 11 acres
Mayfair 96 Unit Garden Apartments Fee 93 97 N/A None N/A
Dover, DE on 7 acres
Lake Park 227 Unit Garden Apartments Fee 222 98 N/A None N/A
Lake Park, FL on 10 acres
Poplar Level Terrace 88 Unit Garden Apartments Fee 86 98 N/A None N/A
Louisville, KY on 3 acres
Jamestown 125 Unit Garden Apartments Fee 122 98 N/A None N/A
Lexington, KY on 8 acres
</TABLE>
S-17
<PAGE>
<TABLE>
<CAPTION>
AVERAGE OUTSTANDING
NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL
TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS
PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94
- -------- ----------- -------- --------- ------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
LaFontenay 248 Unit Garden Apartments Fee 239 96 N/A None N/A
Louisville, KY on 17 acres
Charlestown at 244 Unit Garden Apartments Fee 227 93 N/A None N/A
Douglas Hill on 17 acres
Louisville, KY
Meadow East 100 Unit Garden Apartments Fee 97 97 N/A None N/A
Potsdam, NY on 15 acres
Mohawk Garden 209 Unit Garden Apartments Fee 202 97 N/A None N/A
Rome, NY on 12 acres
Chesterfield 104 Unit Garden Apartments Fee 103 99 N/A None N/A
Maumee, OH on 9 acres
Sedgefield 280 Unit Garden Apartments Fee(2) (2) (2) N/A None N/A
Florence, SC on 19 acres
Ashford Place 268 Unit Garden Apartments Fee 265 99 N/A None N/A
Clarksville, TN on 16 acres
Paddock Place 240 Unit Garden Apartments Fee(2) (2) (2) N/A None N/A
Clarskville, TN on 11 acres
The Pines 224 Unit Garden Apartments Fee(2) (2) (2) N/A None N/A
Clarksville, TN on 11 acres
Cedar Village 170 Unit Garden Apartments Fee(2) (2) (2) N/A None N/A
Clarksville, TN on 11 acres
Hickory Lake 322 Unit Garden Apartments Fee 313 97 N/A None N/A
Nashville, TN 26 acres
MISCELLANEOUS:
Institute for Defense 51,000 sq. ft. Leasehold Subject to 1 100 $ 6.95 None Institute for
Analyses Building Office Building and Operating Sublease Defense Analyses
Princeton, NJ Computer Complex on 8 acres
Jackson 55 acres of Land Fee N/A N/A N/A None N/A
Township, NJ
MORTGAGE RECEIVABLES:
1 North Central 15,000 sq. ft. $500,000
Avenue Shopping Center Second Mortgage
Hartsdale, NY on 1 acre
Newdon Plaza 105,000 sq. ft. $10,350,000
New City, NY Shopping Center First Mortgage
on 10 acres
Whitestown Plaza 83,000 sq. ft. $4,610,000
Whitesboro, NY Shopping Center First Mortgage
on 11 acres
Laurel Mall 333,000 sq. ft. $6,200,000
Connellsville, PA Shopping Center First Mortgage
on 57 acres
</TABLE>
- --------
(1)Property purchased after July 31, 1993 or presently under contract to
purchase.
(2)Under contract to purchase. Certain information has not yet been verified by
the Trust and is therefore not provided.
(3)Includes 54,000 sq. ft. of expansion under construction.
(4)Includes 126,000 sq. ft. of expansion under construction.
(5)Includes 130,000 sq. ft. of expansion under construction.
S-18
<PAGE>
MANAGEMENT
THE TRUST
The Trustees and executive officers of the Trust and their principal
occupations are as follows:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATIONS AND AFFILIATIONS
---- --- --------------------------------------
<S> <C> <C>
William Newman ......... 67 Chairman of the Board and Chief Executive Officer
Chairman of the Board of the Trust since its organization in 1972,
of Trustees and Chief President of the Trust from 1972 to 1988 and
Executive Officer President of the Trust's corporate predecessor
from 1962 to 1972; formerly Chairman of National
Association of Real Estate Investment Trusts; ac-
tive in real estate for more than 40 years.
Arnold Laubich.......... 64 President and Chief Operating Officer and Trustee
President, Chief of the Trust since August 1, 1988; President of
Operating Officer and Dover Management Corp. (which managed the Trust's
Trustee properties) from 1972 to 1988; Senior Vice Presi-
dent of the Trust's predecessor from 1962 to
1972.
Norman Gold............. 63 Partner in the law firm of Altheimer & Gray; ac-
Trustee tive in the practice of law for 39 years; Trustee
of the Trust since its organization in 1972;
Trustee of Banyan Short Term Income Trust, Banyan
Hotel Investment Fund and Banyan Strategic Land
Trust.
Melvin Newman........... 52 Private Investor; Vice President and General Coun-
Trustee sel of the Trust from 1972 to 1982; Trustee of
the Trust since 1983.
Raymond H. Bottorf...... 51 President of U.S. Alpha, Inc., a wholly-owned sub-
Trustee sidiary of Algemeen Burgerlijk Pensionefonds
("ABP"); Trustee of the Trust since 1991.
James M. Steuterman..... 37 Property acquisition officer for the Trust since
Senior Vice President-- 1984; elected Vice President in 1988, and Senior
Acquisitions and Vice President and Trustee in 1990.
Trustee
Dean Bernstein.......... 36 Vice President and Trustee since 1992; Assistant
Vice President and Vice President from 1991 to 1992; previously a
Trustee Vice President in the Real Estate Group at Chemi-
cal Bank for three years.
William Kirshenbaum..... 58 Vice President of the Trust since 1981; Treasurer
Vice President, since 1983.
Treasurer
Leonard N. Cancell...... 61 Senior Vice President of the Trust since August 1,
Senior Vice President-- 1988; Senior Vice President of Dover Management
Operations from 1972 to 1988; employee of the Trust's prede-
cessor from 1964 to 1972.
Irwin E. Kwartler....... 67 Vice President of the Trust since 1982; previous-
Vice President ly, National Sales Manager, Kimball Division of
Litton Industries.
Michael I. Brown........ 51 Chief Financial Officer since 1991; Controller of
Chief Financial Officer the Trust since 1987.
and Controller
Steven F. Siegel........ 34 General Counsel and Secretary of the Trust since
General Counsel and October 1991; formerly an associate in the law
Secretary firm of Miro, Miro & Weiner for six years.
Joseph Bosco............ 45 Vice President of the Trust since 1993; employee
Vice President-- of the Trust since 1983.
Apartment Operations
</TABLE>
S-19
<PAGE>
CONTROLLING SHAREHOLDERS
Upon the consummation of this offering, ABP will own 5,000,000 Common Shares,
or approximately 9.5% of the outstanding Common Shares, MNOPF Trustees Limited
(formerly Merchant Navy Officers Pension Fund Trustees Limited) ("MNOPF") will
own 4,509,954 Common Shares, or 8.6% of the outstanding Common Shares, and the
Newman family as a group, including William Newman, Chairman of the Board of
Trustees and Chief Executive Officer of the Trust, Melvin Newman, a Trustee of
the Trust, and the estate of Joseph Newman, a former Trustee of the Trust, will
own and control an aggregate of 3,085,901 Common Shares, or approximately 5.9%
of the outstanding Common Shares.
William Newman and Melvin Newman may be deemed to be controlling persons of
the Trust by virtue of their ownership of Common Shares. Under a shareholders'
agreement among William Newman, Melvin Newman and the estate of Joseph Newman
(the successor in interest to Joseph Newman), each party to the agreement holds
a first refusal right to purchase Common Shares in the event of a proposed
transfer of Common Shares by any party to someone other than an immediate
family member. In addition, William Newman and Melvin Newman each have the
right to vote 50% of the Common Shares owned by the estate of Joseph Newman.
They have also agreed to vote such Common Shares and their own respective
Common Shares for the re-election of each other as Trustees. Common Shares
transferred among immediate family members will remain subject to the
agreement.
In connection with their purchase of Common Shares, MNOPF and ABP
(collectively sometimes called the "Funds") have each entered into separate
agreements with the Trust. ABP has agreed that for the period ending December
24, 2001, it will vote its Common Shares in favor of management's nominees to
the Board of Trustees. The ABP agreement also requires that a specified degree
of continuity exist in the Trust's management. The Trust has agreed to include
among management's nominees to the Board of Trustees up to two persons
designated by MNOPF in the event that MNOPF owns at least 20% of the Common
Shares, and one person designed by ABP so long as ABP owns at least 9.9% of the
Common Shares. Mr. Bottorf has been so designated by ABP.
The agreements between the Trust and the Funds additionally provide that for
the periods ending December 24, 2001 in the case of MNOPF and ending January
10, 2006 in the case of ABP, the Funds will not acquire Common Shares or other
voting securities or convertible securities of the Trust which would bring
their respective holdings in excess of 25% of the outstanding Common Shares for
MNOPF and in excess of 15% of such Common Shares for ABP, provided that a
degree of continuity exists in the Trust's management. MNOPF's agreement for
continuity requires that at least one of William Newman, Melvin Newman and
Arnold Laubich is a Trustee and key executive officer of the Trust. ABP's
agreement for continuity requires that a majority of the Trust's Board of
Trustees consist of "Continuing Trustees" (who are defined as Trustees who
either were Trustees on January 10, 1991 or whose nomination at any time
thereafter is approved by a majority of Continuing Trustees) and that a
majority of the Trust's executive officers consist of officers who have been
executive officers for at least two years or who are elected to their office by
a majority of Continuing Trustees. ABP has also agreed that except under
certain specified circumstances it will not sell or transfer any of its Common
Shares without the Trust's consent for the period ending January 10, 2001.
In the event the Trust issues additional Common Shares for cash at a time
when MNOPF owns at least 20% of the Common Shares and ABP owns at least 9.9% of
the Common Shares, each Fund has the right to maintain its respective
percentage of ownership in the Trust by purchasing from the Trust additional
Common Shares of the Trust at the same price as was paid by such purchaser,
less an amount equal to underwriter's commissions, if any.
In addition to the issued Common Shares owned by the Newman family, William
Newman, Chief Executive Officer, and Arnold Laubich, President, each hold
options to acquire 650,000 and 655,000 Common Shares, respectively. Such
options represent or include the grant of options for 650,000 Common
S-20
<PAGE>
Shares each on March 12, 1991 at an exercise price of $18 7/8 per Common Share,
which was the closing sale price of the Common Shares on the New York Stock
Exchange on that date. The options vest and are exercisable 30% during the
third year and 10% in each succeeding year.
Accordingly, management is in the position of controlling the affairs of the
Trust for an indefinite period by virtue of the combined shareholdings of the
Funds and the Newman family, and the agreements among the Trust, the Funds and
the Newmans.
TAXATION
The Trust believes that it has operated, and the Trust intends to continue to
operate, in such manner as to qualify as a real estate investment trust under
the Internal Revenue Code of 1986, as amended (the "Code"), but no assurance
can be given that it will at all times so qualify. In the opinion of Altheimer
& Gray, tax counsel to the Trust, the Trust was organized in conformity with
the requirements for qualification as a "real estate investment trust" under
the Code, and the Trust since its organization has met and continues to meet
all requirements of the Code requisite to such qualification. In rendering its
opinion, Altheimer & Gray has relied, as to factual determinations and
conclusions necessary to its opinion, on representations of the Trust.
The provisions of the Code pertaining to real estate investment trusts are
highly technical and complex. The following is a brief and very general summary
of certain provisions which currently govern the federal income tax treatment
of the Trust and its shareholders. For the particular provisions which govern
the federal income tax treatment of the Trust and its shareholders, reference
is made to Sections 856 through 860 of the Code and the Income Tax Regulations
promulgated thereunder. The following summary is qualified in its entirety by
such reference.
Under the Code, if certain requirements are met in a taxable year, a real
estate investment trust will generally not be subject to federal income tax
with respect to income which it distributes to its shareholders. If the Trust
fails to qualify during any taxable year as a real estate investment trust,
unless certain relief provisions are available, it will be subject to tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates, which could have a material adverse effect upon its
shareholders.
In any year in which the Trust qualifies to be taxed as a real estate
investment trust, distributions made to its shareholders out of current or
accumulated earnings or profits will be treated as dividends except that
distributions of net capital gains designated by the Trust as capital gain
dividends will be taxed as long-term capital gains to the shareholders. To the
extent that distributions exceed current or accumulated earnings and profits,
they will constitute a return of capital, rather than dividend or capital gain
income, and will be applied in reducing the basis for the shareholders' Common
Shares, or if in excess of such basis, will be taxed in the same manner as gain
from the sale of those Common Shares.
Investors are urged to consult their own tax advisors with respect to the tax
consequences arising under federal law and the laws of any state, municipality
or other taxing jurisdiction. Foreign investors should consult their own tax
advisors concerning the tax consequences of an investment in the Trust
including the possibility of United States income tax withholding on Trust
distributions.
UNDERWRITING
Subject to the terms and conditions contained in the terms agreement and
related underwriting agreement (collectively, the "Underwriting Agreement"),
the Trust has agreed to sell to each of the Underwriters named below, and each
of the Underwriters for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Kidder Peabody & Co. Incorporated, PaineWebber Incorporated and
Prudential Securities
S-21
<PAGE>
Incorporated are acting as representatives (the "Representatives") has
severally agreed to purchase, the respective number of Common Shares set forth
below opposite their respective names. The Underwriting Agreement provides that
the obligations of the Underwriters are subject to certain conditions
precedent, and that the Underwriters will be obligated to purchase all of the
Common Shares if any are purchased.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER COMMON SHARES
----------- -------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................
Kidder, Peabody & Co. Incorporated...........................
PaineWebber Incorporated.....................................
Prudential Securities Incorporated...........................
---------
Total.................................................. 3,000,000
=========
</TABLE>
The Representatives have advised the Trust that the Underwriters propose
initially to offer the Common Shares to the public at the public offering price
set forth on the cover page of this Prospectus Supplement, and to certain
dealers at such price less a concession not in excess of $ per share. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $ per share on sales to certain other dealers. After the initial public
offering, the public offering price, concession and discounts may be changed.
The Trust has granted an option to the Underwriters, exercisable during the
30-day period after the date of this Prospectus Supplement, to purchase up to
an aggregate of 450,000 additional Common Shares at the price to the public set
forth on the cover page of this Prospectus Supplement, less the underwriting
discount. The Underwriters may exercise this option only to cover over-
allotments, if any. To the extent that the Underwriters exercise this option,
each Underwriter will be obligated, subject to certain conditions, to purchase
the number of additional Common Shares proportionate to such Underwriter's
initial amount reflected in the foregoing table.
The Trust has agreed to indemnify the Underwriters against certain civil
liabilities, including certain liabilities under the Securities Act of 1933, as
amended, or to contribute to payments the Underwriters may be required to make
in respect thereof.
S-22
<PAGE>
[MAP TO BE INSERTED BY TRUST]
<PAGE>
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NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPO-
RATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN CONNEC-
TION WITH THE OFFERING MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE TRUST OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT OR IN THE
PROSPECTUS OR IN THE AFFAIRS OF THE TRUST SINCE THE DATE HEREOF. THIS PROSPEC-
TUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION
BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO
DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
The Trust................................................................. S-3
Recent Developments....................................................... S-4
Use of Proceeds........................................................... S-5
Capitalization............................................................ S-6
Selected Financial Data................................................... S-7
Price Range of the Common Shares and Distributions........................ S-8
Business.................................................................. S-9
Management................................................................ S-19
Taxation.................................................................. S-21
Underwriting.............................................................. S-21
PROSPECTUS
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Trust................................................................. 3
Ratios of Earnings to Fixed Charges....................................... 4
Use of Proceeds........................................................... 4
Description of Debt Securities............................................ 4
Description of Preferred Shares........................................... 19
Description of Depositary Shares.......................................... 24
Description of Common Shares.............................................. 28
Description of Warrants................................................... 29
Certain Federal Income Tax Considerations to the Trust of its REIT
Election................................................................. 30
Plan of Distribution...................................................... 34
ERISA Matters............................................................. 35
Legal Opinions............................................................ 35
Experts................................................................... 35
</TABLE>
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3,000,000 SHARES
NEW PLAN REALTY TRUST
COMMON SHARES
---------------
PROSPECTUS SUPPLEMENT
---------------
MERRILL LYNCH & CO.
KIDDER, PEABODY & CO.
INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
JUNE , 1994
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<PAGE>
GRAPHICS APPENDIX LIST
PAGE WHERE
GRAPHIC
APPEARS DESCRIPTION OF GRAPHIC OR CROSS REFERENCE
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IFC-1 Four separate color charts showing: (i) Distributions Per Share
(adjusted to give effect to the 3-for-2 share split on April 1,
1986) for fiscal years 1984-93, ranging from $0.57 per share in
fiscal 1984 to $1.275 per share in fiscal 1993, and showing
expected Distributions Per Share in fiscal 1994 of $1.33 based upon
the current rate; (ii) Funds From Operations (net income plus
depreciation and amortization, excluding gains from the sales of
properties and sale of investment securities) ("FFO") and FFO Per
Share for fiscal years 1984-93 and for the nine-month periods ended
April 30, 1993 and 1994, ranging from $10,272,000 FFO and $0.73 FFO
Per Share in fiscal 1984 to $49,863,000 FFO and $1.02 FFO Per Share
in fiscal 1993, and from $36,844,000 FFO and $.76 FFO Per Share for
the nine-months ended April 30, 1993 to $45,393,000 and $0.92 FFO
Per Share for the nine-months ended April 30, 1994; (iii) New Plan
Distributions vs. Consumer Price Index for fiscal years 1976-93;
ranging from 0.00% in fiscal 1976 to 571.05% in fiscal 1993; and
(iv) Shopping Center Square Footage (including square footage of
factory outlet centers, shopping centers securing mortgages and
properties under contract) from fiscal years 1983-94, ranging from
$2,067 in fiscal 1983 to 14,014 in fiscal 1994 (year-to-date).
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IBC-1 Six-color map of the Eastern half of the United States plus
California displaying New Plan Realty Trust's Portfolio of
Properties as of 5/31/94, indicating Headquarters, Regional
Offices, Shopping Centers, Apartment Complexes and Miscellaneous.
Three-color pie chart showing that the Trust's portfolio is
comprised of 83% Shopping Centers, 13% Apartments and 4% Mortgages
and Other.
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