<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- --- ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1998
OR
- --- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission file number 1-10899
---------------------------------------------------
Kimco Realty Corporation
- --------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 13-2744380
- ------------------------------- --------------------------------------
(State of incorporation) (I.R.S. Employer Identification No.)
3333 New Hyde Park Road, New Hyde Park, NY 11042-0020
- --------------------------------------------------------------------------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (516)869-9000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
Common Stock, par value $.01 per share New York Stock Exchange
- -------------------------------------- ------------------------
Depositary Shares, each representing
one-tenth of a share of 7-3/4% Class A
Cumulative Redeemable Preferred Stock,
par value $1.00 per share. New York Stock Exchange
- -------------------------- ------------------------
Depositary Shares, each representing
one-tenth of a share of 8-1/2% Class B
Cumulative Redeemable Preferred Stock,
par value $1.00 per share. New York Stock Exchange
- -------------------------- ------------------------
Depositary Shares, each representing
one-tenth of a share of 8-3/8% Class C
Cumulative Redeemable Preferred Stock,
par value $1.00 per share. New York Stock Exchange
- -------------------------- ------------------------
Depositary Shares, each representing
one-tenth of a share of 7-1/2% Class D
Cumulative Convertible Preferred Stock,
par value $1.00 per share. New York Stock Exchange
- -------------------------- ------------------------
Securities registered pursuant to Section 12(g) of the Act:
None
- --------------------------------------------------------------------
(Title of class)
Indicate by check mark whether the registrant (i) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (ii) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
---
The aggregate market value of the voting stock held by nonaffiliates of
the registrant was approximately $2.0 billion based upon the closing price on
the New York Stock Exchange for such stock on March 1, 1999.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
60,168,783 shares as of March 1, 1999.
Page 1 of 69
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates certain information by reference to the Registrant's
definitive proxy statement to be filed with respect to the Annual Meeting of
Stockholders expected to be held on May 20, 1999.
Index to Exhibits begins on page 37.
2
<PAGE>
TABLE OF CONTENTS
Form
10-K
Report
Item No. Page
- -------- ------
PART I
1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . 15
3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . 16
4. Submission of Matters to a Vote of Security Holders . . . . 16
Executive Officers of the Registrant . . . . . . . . . . . . 25
PART II
5. Market for the Registrant's Common Equity
and Related Shareholder Matters . . . . . . . . . . . . . 27
6. Selected Financial Data . . . . . . . . . . . . . . . . . . 28
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . 30
7A. Quantitative and Qualitative Disclosures About Market Risk. . 34
8. Financial Statements and Supplementary Data . . . . . . . . 34
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . 34
PART III
10. Directors and Executive Officers of the Registrant . . . . . 35
11. Executive Compensation . . . . . . . . . . . . . . . . . . . 35
12. Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . . . 35
13. Certain Relationships and Related Transactions . . . . . . . 35
PART IV
14. Exhibits, Financial Statements, Schedules and Reports on
Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . 36
3
<PAGE>
PART I
FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K, together with other statements and
information publicly disseminated by Kimco Realty Corporation (the "Company"or
"Kimco") contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995 and include this statement for purposes of complying with
these safe harbor provisions. Forward-looking statements, which are based on
certain assumptions and describe our future plans, strategies and
expectations, are generally identifiable by use of the words "believe,"
"expect," "intend," "anticipate," "estimate," "project" or similar
expressions. You should not rely on forward-looking statements since they
involve known and unknown risks, uncertainties and other factors which are, in
some cases, beyond the Company's control and which could materially affect
actual results, performances or achievements. Factors which may cause actual
results to differ materially from current expectations include, but are not
limited to,(i) general economic and local real estate conditions, (ii)
financing risks, such as the inability to obtain equity or debt financing on
favorable terms, (iii) changes in governmental laws and regulations, (iv) the
level and volatility of interest rates (v) the availability of suitable
acquisition opportunities and (vi) increases in operating costs. Accordingly,
there is no assurance that the Company's expectations will be realized.
Item 1. Business
General Kimco Realty Corporation is one of the nation's largest owners and
operators of neighborhood and community shopping centers. As of March 1, 1999,
the Company's portfolio was comprised of 440 property interests including 368
neighborhood and community shopping center properties, two regional malls, 60
retail store leases, three parcels of undeveloped land, one distribution
center, one stand-alone retail warehouse and five projects under development
comprising a total of approximately 57.2 million square feet of leasable space
located in 40 states. The Company believes its portfolio of neighborhood and
community shopping center properties is the largest (measured by gross
leasable area, "GLA") currently held by any publicly-traded real estate
investment trust ("REIT"). The Company is a self-administered REIT and manages
its properties through present management, which has owned and operated
neighborhood and community shopping centers for more than 30 years. The
Company has not engaged, nor does it expect to retain, any REIT advisors in
connection with the operation of its properties.
The Company's executive offices are located at 3333 New Hyde Park Road, New
Hyde Park, New York 11042-0020 and its telephone number is (516)869-9000.
Unless the context indicates otherwise, the term the "Company" as used herein
is intended to include subsidiaries of the Company.
History The Company began operations through its predecessor, The Kimco
Corporation, which was organized in 1966 upon the contribution of several
shopping center properties owned by its principal stockholders. In 1973, these
principals formed the Company as a Delaware corporation, and in 1985, the
operations of The Kimco Corporation were merged into the Company. The Company
completed its initial public stock offering (the "IPO") in November 1991, and
reorganized as a Maryland corporation during 1994.
The Company's growth through its first fifteen years resulted primarily from
the ground-up development and construction of its shopping centers. By 1981,
the Company had assembled a portfolio of 77 properties that provided an
established source of income and positioned the Company for an expansion of
its asset base. At that time, the Company revised its strategy to focus on the
acquisition of existing shopping centers because it believed that better
opportunities existed to create value through the redevelopment and
re-tenanting of existing shopping centers. Furthermore, the Company's
management believed that existing properties with below market-rate leases
were available in the market at attractive prices. As a result of this
strategy, the Company has developed only two of the 291 neighborhood and
community shopping centers added to the portfolio since 1981, as compared with
68 of the 77 properties owned prior to that time.
4
<PAGE>
During 1998, the Company, through a merger transaction, completed the
acquisition of The Price REIT, Inc., a Maryland corporation (the "Price REIT")
(see Recent Developments - Price REIT Merger). Prior to the merger, Price REIT
was a self-administered and self-managed equity REIT that was primarily
focused on the acquisition, development, management and redevelopment of large
retail community shopping center properties concentrated in the western part
of the United States. With the completion of the Price REIT merger, the
Company expanded its presence in certain western states including California,
Arizona and Washington. In addition, Price REIT had strong ground-up
development capabilities. These development capabilities, coupled with the
Company's own construction management expertise, provides the Company, on a
selective basis, the ability to pursue ground-up development opportunities.
Investment and Operating Strategy The Company's investment objective has been
to increase cash flow, current income and, consequently, the value of its
existing portfolio of properties, and to seek continued growth through (i) the
strategic re-tenanting, renovation and expansion of its existing centers, (ii)
the selective acquisition of established income-producing real estate
properties and properties requiring significant re-tenanting and
redevelopment, primarily in neighborhood and community shopping centers and
(iii)the selective acquisition of land parcels for the development of
neighborhood and community shopping centers in geographic regions in which the
Company presently operates. The Company intends to consider investments in
other real estate sectors and in geographic markets where it does not
presently operate should suitable opportunities arise.
The Company's neighborhood and community shopping center properties are
designed to attract local area customers and typically are anchored by a
supermarket, discount department store or drugstore tenant offering day-to-day
necessities rather than high-priced luxury items. The Company may either
purchase or lease income-producing properties in the future, and may also
participate with other entities in property ownership through partnerships,
joint ventures or similar types of co-ownership. Equity investments may be
subject to existing mortgage financing and other indebtedness or such
financing or indebtedness may be incurred in connection with acquiring such
investments. Any such financing or indebtedness will have priority over the
Company's equity interest in such property. The Company may make loans to
joint ventures in which it may or may not participate in the future.
While the Company has historically held its properties for long-term
investment, and accordingly has placed strong emphasis on its ongoing program
of regular maintenance, periodic renovation and capital improvement, it is
possible that properties in the portfolio may be sold, in whole or in part, as
circumstances warrant, subject to REIT qualification rules.
The Company emphasizes equity real estate investments, but may, at its
discretion, invest in mortgages, other real estate interests and other
investments. The mortgages in which the Company may invest may be either first
mortgages, junior mortgages or other mortgage-related securities.
The Company may legally invest in the securities of other issuers, for the
purpose, among others, of exercising control over such entities, subject to
the gross income and asset tests necessary for REIT qualification. The Company
may, on a selective basis, acquire all or substantially all securities or
assets of other REITs or similar entities where such investments would be
consistent with the Company's investment policies. In any event, the Company
does not intend that its investments in securities will require it to register
as an "investment company" under the Investment Company Act of 1940. The
Company seeks to reduce its operating and leasing risks through
diversification achieved by the geographic distribution of its properties and
a large tenant base. At December 31, 1998, the Company's single largest
neighborhood and community shopping center accounted for only 1.5% of the
Company's annualized base rental revenues and only 1.0% of the Company's total
shopping center GLA. At December 31, 1998, the Company's five largest tenants
include Kmart Corporation, The Home Depot, Kohls, Toys/Kids R' Us and TJX
Companies, which represent approximately 13.7%, 3.0%, 2.5%, 1.8% and 1.5%,
respectively, of the Company's annualized base rental revenues.
The Company intends to maintain a conservative debt capitalization with a
ratio of debt to total market capitalization of approximately 50% or less. As
of December 31, 1998, the Company had a debt to total market capitalization
ratio of approximately 32%.
5
<PAGE>
The Company has authority to offer shares of capital stock or other senior
securities in exchange for property and to repurchase or otherwise reacquire
its common stock or any other securities and may engage in such activities in
the future. At all times, the Company intends to make investments in such a
manner as to be consistent with the requirements of the Internal Revenue Code
of 1986, as amended (the "Code"), to qualify as a REIT unless, because of
circumstances or changes in the Code (or in Treasury Regulations), the Board
of Directors determines that it is no longer in the best interests of the
Company to qualify as a REIT.
The Company's policies with respect to the aforementioned activities may be
reviewed and modified from time to time by the Company's Board of Directors
without the vote of the Company's stockholders.
Competition As one of the original participants in the growth of the shopping
center industry and one of the nation's largest owners and operators of
neighborhood and community shopping centers, the Company has established close
relationships with a large number of major national and regional retailers and
maintains a broad network of industry contacts. Management is associated with
and/or actively participates in many shopping center and REIT industry
organizations. Notwithstanding these relationships, there are numerous
commercial developers, real estate companies, financial institutions and other
investors that compete with the Company in seeking properties for acquisition
and tenants who will lease space in these properties.
Capital Resources Since the completion of the Company's IPO in 1991, the
Company has utilized the public debt and equity markets as its principal
source of capital. Since the IPO, the Company has completed additional
offerings of its public unsecured debt and equity, raising in the aggregate
over $1.9 billion for the purposes of repaying indebtedness, acquiring
interests in neighborhood and community shopping centers and for expanding and
improving properties in the portfolio.
During August 1998, the Company established a $215 million, unsecured
revolving credit facility, which is scheduled to expire in August 2001. This
credit facility, which replaced both the Company's $100 million unsecured
revolving credit facility and $150 million interim credit facility, has made
available funds to both finance the purchase of properties and meet any
short-term working capital requirements. As of December 31, 1998 there were no
borrowings outstanding under the Company's unsecured revolving credit
facility.
The Company has also implemented a $200 million medium-term notes program (the
"MTN program") pursuant to which it may from time to time offer for sale its
senior unsecured debt for any general corporate purposes, including (i)
funding specific liquidity requirements in its business, including property
acquisitions, development and redevelopment costs, and (ii) managing the
Company's debt maturities. (See Note 7 of the Notes to Consolidated Financial
Statements included in this annual report on Form 10-K.)
In addition to the public debt and equity markets as capital sources, the
Company may, from time to time, obtain mortgage financing on selected
properties. As of December 31, 1998, the Company had over 300 unencumbered
property interests in its portfolio.
Additionally, on August 31, 1998, the Company filed a shelf registration on
Form S-3 for up to $750 million of debt securities, preferred stock,
depositary shares, common stock and common stock warrants. As of March 1,
1999, the Company had approximately $493.2 million available for issuance
under this shelf registration statement.
It is management's intention that the Company continually have access to the
capital resources necessary to expand and develop its business. Accordingly,
the Company may seek to obtain funds through additional equity offerings,
unsecured debt financings and/or mortgage financings in a manner consistent
with its intention to operate with a conservative debt capitalization policy.
The Company anticipates that cash flows from operations will continue to
provide adequate capital to fund its operating and administrative expenses,
regular debt service obligations and all dividend payments in accordance with
REIT requirements in both the short-term and long-term. In addition, the
Company anticipates that cash on hand, borrowings under its revolving credit
facility, issuance of equity and public debt, as well as other debt and equity
alternatives, will provide the necessary capital required by the Company.
6
<PAGE>
Inflation and Other Business Issues Many of the Company's leases contain
provisions designed to mitigate the adverse impact of inflation. Such
provisions include clauses enabling the Company to receive payment of
additional rent calculated as a percentage of tenants' gross sales above
predetermined thresholds ("Percentage Rents"), which generally increase as
prices rise, and/or escalation clauses, which generally increase rental rates
during the terms of the leases. Such escalation clauses include increases in
the consumer price index or similar inflation indices. In addition, many of
the Company's leases are for terms of less than 10 years, which permits the
Company to seek to increase rents upon renewal to market rates. Most of the
Company's leases require the tenant to pay an allocable share of operating
expenses, including common area maintenance costs, real estate taxes and
insurance, thereby reducing the Company's exposure to increases in costs and
operating expenses resulting from inflation. The Company periodically
evaluates its exposure to short-term interest rates and will, from time to
time, enter into interest rate protection agreements which mitigate, but do
not eliminate, the effect of changes in interest rates on its floating-rate
debt.
As an owner of real estate, the Company is subject to risks arising in
connection with the underlying real estate, including, among other factors,
defaults or nonrenewal of tenant leases, the financial condition and stability
of tenants, retailing trends, environmental matters and changes in real estate
and zoning laws. The success of the Company also depends upon trends in the
economy, including, but not limited to, interest rates, the availability of
financing and capital on satisfactory terms, income tax laws, governmental
regulations and legislation and population trends.
Operating Practices Nearly all operating functions, including leasing, legal,
construction, data processing, maintenance, finance and accounting, are
administered by the Company from its executive offices in New Hyde Park, New
York. The Company believes it is critical to have a management presence in its
principal areas of operation; accordingly, the Company also maintains regional
offices in Boca Raton, Orlando and Tampa, Florida; Philadelphia, Pennsylvania;
Dayton and Cleveland, Ohio; Chicago, Illinois; Charlotte, North Carolina;
Phoenix, Arizona and Los Angeles, California. A total of 199 persons are
employed at the Company's executive and regional offices.
The Company's regional offices are generally staffed by a manager and the
support personnel necessary to both function as local representatives for
leasing and promotional purposes and to complement the corporate office
efforts to ensure that property inspection and maintenance objectives are
achieved. The regional offices are important in reducing the time necessary to
respond to the needs of the Company's tenants. Leasing and maintenance
personnel from the corporate office also conduct regular inspections of each
shopping center.
The Company also employs a total of 59 persons at several of its larger
properties in order to more effectively administer its maintenance and
security responsibilities.
Management Information Systems Virtually all operating activities are
supported by a sophisticated computer software system designed to provide
management with operating data necessary to make informed business decisions
on a timely basis. These proprietary systems are continually expanded and
enhanced by the Company and reflect a commitment to quality management and
tenant relations. The Company has integrated an advanced mid-range computer
with personal computer technology, creating a management information system
that facilitates the development of property cash flow budgets, forecasts and
related management information.
Qualification as a REIT The Company has elected, commencing with its taxable
year which began January 1, 1992, to qualify as a REIT under Sections 856
through 860 of the Code. If, as the Company believes, it is organized and
operates in such a manner so as to qualify and remain qualified as a REIT
under the Code, the Company generally will not be subject to Federal income
tax, provided that distributions to its stockholders equal at least the amount
of its REIT taxable income as defined under the Code.
Recent Developments
Price REIT Merger --
On January 13, 1998, the Company, REIT Sub, Inc., a Maryland corporation and a
wholly owned subsidiary of the Company ("Merger Sub") and Price REIT, signed a
definitive Agreement and Plan of Merger dated January 13, 1998, as amended
March 5, 1998 and May 14, 1998 (the "Merger Agreement"). On June 19, 1998,
upon approval by the shareholders of the Company and Price REIT, Price REIT
was merged into Merger Sub, whereupon the separate existence of Price REIT
ceased (the "Merger").
7
<PAGE>
In connection with the Merger, the Company acquired interests in 43
properties, located in 17 states, consisting of 39 retail community centers,
one stand-alone retail warehouse, one project under development and two
undeveloped land parcels, containing approximately 8.0 million square feet of
GLA. The overall occupancy rate of the retail community centers was
approximately 98%.
For financial reporting purposes, the Merger was accounted for under the
purchase method of accounting. Under the terms of the Merger Agreement each
share of Price REIT common stock was exchanged for one share of Kimco common
stock and .36 shares of depositary shares (the "Class D Depositary Shares"),
each Class D Depositary Share representing a one-tenth fractional interest in
a new issue of Kimco 7.5% Class D Cumulative Convertible Preferred Stock, par
value $1.00 per share (the "Class D Preferred Stock"). On June 19, 1998, the
Company issued 11,921,992 shares of its common stock and 429,159 shares of
Class D Preferred Stock (represented by 4,291,590 Class D Depositary Shares)
in connection with the Merger. The total Merger consideration was
approximately $960 million, including the assumption of approximately $310
million of debt. Management has allocated the purchase price based on the fair
value of assets and liabilities assumed. Such allocations are based on
preliminary estimates, and are subject to revision.
Additionally, in connection with the Merger, on May 18,1998, the Company
entered into a purchase agreement with Price REIT and LB I Group Inc., an
affiliate of Lehman Brothers Inc. ("LB I"), under which LB I agreed to
purchase $65 million Class A Floating Rate Cumulative Preferred Stock of Price
REIT ("Price REIT Preferred Stock"). In connection with the purchase
agreement, Price REIT issued 65,000 shares of Price REIT Preferred Stock to LB
I (with a total liquidation preference and purchase price of $65 million). As
part of the Merger, the Company assumed Price REIT's obligations under the
purchase agreement and, as part of the Merger consideration, the Price REIT
Preferred Stock was exchanged for 650,000 depositary shares (the "Class E
Depositary Shares"), each representing a one-tenth fractional interest in
65,000 shares of a new issue of Kimco Floating Rate Class E Cumulative
Redeemable Preferred Stock, par value $1.00 per share (the "Class E Preferred
Stock").
Dividends on the Class D Depositary Shares are cumulative and payable
quarterly in arrears at the rate per depositary share equal to the greater of
(i) 7.5% per annum based on a $25 per share initial value, or $1.875 per
share, or (ii) the cash dividends on the shares of the Company's common stock
into which a Class D Depositary Share is convertible plus $.0275 per quarter.
The Class D Depositary Shares are convertible at any time into the Company's
common stock at a conversion price of $40.25 per share of common stock or a
conversion rate of 0.62112 for each Class D Depositary Share. The Class D
Depositary Shares may be redeemed in whole, or from time to time, in part, on
any date on or after June 19, 2001 at the option of the Company if, for any 20
trading days within any period of 30 consecutive trading days, including the
last trading day of such period, the average closing price per share of the
Company's common stock exceeds 120% of the conversion price or $48.30 per
share.
The dividend rate on the Class E Preferred Stock was equal to LIBOR plus 2%
per annum, adjusted quarterly, and had an initial dividend rate of 7.68% per
annum. The Class E Preferred Stock was redeemable at the option of the Company
for 150 days after its issuance at a price equal to the liquidation preference
of $1,000 per share plus accrued and unpaid dividends. The Company exercised
its option in November 1998 to redeem all of the Class E Preferred Stock for
$65.065 million, representing the liquidation preference of $65 million and
approximately $65,000 of accrued dividends. (See Note 3 of the Notes to
Consolidated Financial Statements included in this annual report on Form
10-K.)
Shopping Center Acquisitions -
In January 1998, the Company acquired seven properties, in separate
transactions, consisting of: (i) Village on the Park I and II, adjoining
shopping centers located in Aurora, Colorado, which are anchored by TJ Maxx
and contain approximately 146,000 square feet of GLA; (ii) Phar-Mor Plaza,
located in Englewood, Colorado, which is anchored by Phar-Mor and contains
approximately 80,000 square feet of GLA; (iii) Heritage West Shopping Center,
located in Lakewood, Colorado, which is anchored by Safeway Stores and
contains approximately 83,000 square feet of GLA; (iv) Quincy Place Shopping
Center, located in Aurora, Colorado, which is anchored by Blockbuster and
contains approximately 44,000 square feet of GLA; (v) Spring Creek Shopping
Center, located in Colorado Springs, Colorado, which is anchored by Cub Foods
and contains approximately 108,000 square feet of GLA; (vi) East Bank Shopping
Center, located in Aurora, Colorado, which is anchored by Albertson's and
contains approximately 111,000 square feet of GLA; and (vii) West 38th Street
Shopping Center, a single tenant property, located in Denver, Colorado,
occupied by Payless Drugs comprising approximately 18,000 square feet of GLA.
These properties were acquired for an aggregate purchase price of
approximately $43.9 million, including the
8
<PAGE>
assumption of approximately $1.4 million and $2.8 million of mortgage debt
encumbering Phar-Mor Plaza and Quincy Place Shopping Center, respectively.
In February 1998, the Company acquired The Shoppes at West Melbourne, located
in West Melbourne, Florida, for a purchase price of approximately $11.0
million. The shopping center contains approximately 148,000 square feet of GLA
and is anchored by Service Merchandise.
In March 1998, the Company acquired three properties, in separate
transactions, consisting of (i) Marshalls Plaza, (ii) South Plains Plaza and
(iii) Poca Fiesta Shopping Center. Marshalls Plaza, located in Cranston, Rhode
Island, is anchored by Marshalls and contains approximately 130,000 square
feet of GLA. South Plains Plaza, located in Lubbock, Texas, is anchored by
PetsMart and OfficeMax and contains approximately 108,000 square feet of GLA.
Poca Fiesta Shopping Center, located in Mesa, Arizona, is anchored by Ross
Stores, and contains approximately 136,000 square feet of GLA. These
properties were acquired for an aggregate purchase price of approximately
$33.5 million, including the assumption of approximately $6.6 million and
$10.0 million of mortgage debt encumbering South Plains Plaza and Poca Fiesta
Shopping Center, respectively.
In April 1998, the Company acquired Wellington Park Shopping Center for a
purchase price of approximately $10.9 million. Wellington Park Shopping
Center, located in Cary, North Carolina, is anchored by Lowes Food and
contains approximately 103,000 square feet of GLA.
In May 1998, the Company acquired three properties, Bayshore Gardens Shopping
Center, Lafayette Marketplace and the Phar-Mor building, in separate
transactions, for an aggregate purchase price of approximately $37.1 million,
which included the issuance of partnership units valued at approximately $5.0
million in connection with the Bayshore Gardens acquisition. Bayshore Gardens
Shopping Center, located in Bradenton, Florida, is anchored by Publix and TJ
Maxx, and contains approximately 163,000 square feet of GLA. Lafayette
Marketplace, located in Lafayette, Indiana, is anchored by Michaels and
Staples, and contains approximately 190,000 square feet of GLA. The Phar-Mor
building, located in Greenville, South Carolina, is a 60,000 square foot
building adjacent to a property previously acquired by the Company in December
1997 and is occupied by Phar-Mor.
In July 1998, the Company acquired, in separate transactions, three
neighborhood and community shopping centers comprising approximately 381,000
square feet of GLA in three states, for an aggregate purchase price of
approximately $35.3 million. The properties acquired include (i) Shoppes at
Rivergate, (ii)Center of the Hills and (iii) Juan Tabo Plaza. Shoppes at
Rivergate, located in Goodlettsville, Tennessee, is anchored by Uptons
Department Store and Stein Mart and contains approximately 171,000 square feet
of GLA. Center of the Hills, located in Austin, Texas, is anchored by H.E.B.
Grocery and contains approximately 153,000 square feet of GLA. Juan Tabo
Plaza, located in Albuquerque, New Mexico, is anchored by Walgreens and
contains approximately 57,000 square feet of GLA.
In September, 1998, the Company acquired Northwest Square located in Columbus,
Ohio for approximately $15.1 million. This shopping center is anchored by
Borders Books and contains approximately 113,000 square feet of GLA.
In October 1998, the Company acquired 3 shopping centers, in separate
transactions, for approximately $51.0 million, including the assumption of
approximately $28.4 million of mortgage debt in connection with two of the
acquisitions. The properties acquired include (i) Oak Park Commons located in
Plainfield, New Jersey; (ii) Trolley Station, located in Memphis, Tennessee
and (iii) Vista Ridge Plaza, located in Lewisville, Texas. Oak Park Commons is
anchored by A&P Supermarkets and Sears Hardware, and contains approximately
137,000 square feet of GLA. Trolley Station is anchored by Toys R' Us and
OfficeMax, and contains approximately 167,000 square feet of GLA. Vista Ridge
Plaza is anchored by Drug Emporium and contains approximately 94,000 square
feet of GLA.
During November, 1998, the Company acquired Westgate Plaza and North Point
Shopping Center, in separate transactions, for an aggregate purchase price of
approximately $33.0 million, $22.1 million of which was financed with mortgage
debt on one of the properties. Westgate Plaza, located in Amarillo, Texas, is
anchored by Kmart and Builders Square, and contains approximately 238,000
square feet of GLA. North Point Shopping Center, located in Joplin, Missouri,
is anchored by Hobby Lobby, and contains approximately 147,000 square feet of
GLA.
9
<PAGE>
During December, 1998, the Company acquired three properties, in separate
transactions, for an aggregate purchase price of approximately $32.2 million.
Santee Town Center Promenade, located in Santee, California is anchored by
Office Depot and Ross Stores, and contains approximately 97,000 square feet of
GLA. Village Commons Shopping Center, located in Tallahassee, Florida, is
anchored by Stein Mart and Ben Franklin and contains approximately 106,000
square feet of GLA. The Piers Shopping Center located in Port Richey, Florida,
is anchored by Staples and Circuit City and contains approximately 103,000
square feet of GLA.
Venture Stores, Inc. Properties Acquisition -
In August 1997, certain subsidiaries of the Company acquired certain real
estate assets from Venture Stores, Inc. ("Venture") consisting of interests in
49 fee and leasehold properties totaling approximately 5.9 million square feet
of leasable area located in seven states. The aggregate price was
approximately $130 million, consisting of $70.5 million in cash and the
assumption of approximately $59.5 million of existing mortgage debt on certain
of these properties. Simultaneously with this transaction, the Company entered
into a long-term unitary net lease with Venture covering all premises occupied
by Venture on these properties. As a result of this transaction, Venture was
the primary or sole tenant at 60 of the Company's locations as of December 31,
1997.
In January 1998, Venture filed for protection under Chapter 11 of the United
States Bankruptcy Code. On April 27, 1998, Venture announced it would
discontinue its retail operations and that it had reached an agreement to sell
its leasehold position at 89 locations to the Company, including 56 properties
pursuant to two unitary leases already in place with the Company, 30
properties pursuant to a master lease with Metropolitan Life Insurance Company
("Metropolitan Life") and three properties leased by Venture from others. The
purchase price for the leasehold positions was $95.0 million, less certain
closing adjustments, but is subject to upward adjustment based on the
Company's success in re-tenanting the properties over a two-year period. On
July 17, 1998, the Company purchased the leasehold positions with an initial
cash payment to Venture of approximately $50 million. Simultaneous with this
transaction, the Company leased 46 of these locations to Kmart Corporation. As
a result of these additional leases to Kmart Corporation, Kmart Corporation
accounted for approximately 13.7% of the Company's annualized base rental
revenues as of December 31, 1998.
The Company also reached an agreement with Metropolitan Life to purchase the
30 fee and leasehold positions which were leased by Metropolitan Life to
Venture, for an aggregate purchase price of $167.5 million. This transaction
was completed on July 1, 1998.
During August 1998, the Company acquired from Venture five additional
leasehold positions, including two leases already in place with the Company,
for an aggregate purchase price of approximately $2.2 million. Simultaneous
with this transaction, the Company leased these five locations, along with
five other former Venture locations, to a national retailer.
As of December 31, 1998, the Company has leased substantially all of the
vacant space at 76 locations and sold 2 of the locations acquired in the above
transactions (See Recent Developments - Property Dispositions). The Company is
currently negotiating with other major retailers concerning the re-tenanting
of the remaining locations.
The Company, as a regular part of its business operations, will continue to
actively seek properties for acquisition, which have below market-rate leases
or other cash flow growth potential.
Property Developments and Redevelopments -
The Company has an ongoing program to reformat and re-tenant its properties to
maintain or enhance its competitive position in the marketplace. During 1998,
the Company substantially completed the redevelopment and re-tenanting of
various shopping centers, most notably, its properties in Richboro,
Pennsylvania; Mesa, Arizona; Upper Arlington, Ohio; Orlando, Florida and
Charleston, South Carolina. The Company expended approximately $40 million in
connection with its major redevelopment and re-tenanting projects during 1998.
The Company is currently involved in redeveloping several other shopping
centers, including its properties in Salem, New Hampshire; North Miami,
Florida and Manhasset, New York. The Company anticipates its capital
commitment toward these and other redevelopment projects will be approximately
$30 million during 1999.
10
<PAGE>
As of December 31, 1998, the Company was in progress on three ground-up
development projects located in Bridgewater, New Jersey, Houston, Texas and
Cedar Hill, Texas. These projects were substantially pre-leased prior to the
commencement of construction. During 1998, the Company expended approximately
$28.6 million in connection with the purchase of land and construction costs
related to these projects. The Company anticipates its capital commitment
toward these and other development projects including projects scheduled to
begin in early 1999 in Chandler, Arizona and San Antonio, Texas, will be
approximately $120 million during 1999.
Each development and redevelopment project represents an opportunity for the
Company to capitalize on its leasing, site planning, design and construction
expertise. These projects, which are currently proceeding on schedule and in
line with the Company's budgeted costs, are expected to contribute to growth
in the Company's funds from operations in the future.
Property Dispositions -
During January 1998, the Company disposed of a property in Pinellas Park,
Florida. Proceeds from the disposition totaling approximately $2.3 million,
together with an additional $7.1 million cash investment, were used to acquire
an exchange shopping center property located in Cranston, Rhode Island during
March 1998.
During December 1998, the Company disposed of a vacant distribution center and
adjacent facility located in O'Fallon, Missouri, which were acquired as part
of the Venture transactions, for $10 million, which amount approximated their
net book value.
Kimco Select Investments -
Kimco Select Investments, a New York general partnership ("Kimco Select"), was
formed in 1997 to provide the Company, through its 90% ownership interest, the
opportunity to make investments outside of its core neighborhood and community
shopping center business. Although potential investments may be largely
retail-focused, Kimco Select may invest in other asset categories. Kimco
Select will focus on investments where the intrinsic value in the underlying
assets may provide potentially superior returns relative to the inherent risk.
These investments may be in the form of direct ownership of real estate,
mortgage loans, public and private debt and equity securities that Kimco
Select believes are undervalued, unoccupied properties, properties leased to
weak or bankrupt tenants and other assets.
Kimco Select is managed by David M. Samber, formerly President and Chief
Operating Officer of the Company, who owns the remaining 10% ownership
interest in Kimco Select. The Company has made an initial commitment of $35
million towards investments by Kimco Select and may increase its commitment as
management deems appropriate.
During January 1998, Kimco Select, through a partnership investment, acquired
fee interests in three properties from a retailer in the Chicago, IL market
comprising approximately 516,000 square feet of GLA for an aggregate purchase
price of approximately $23.7 million. These properties include approximately
70,000 square feet of showroom space and adjoining warehouses of approximately
100,000 square feet at each location. Simultaneous with this transaction, the
Company leased, to a national furniture retailer, the showroom portion of each
property under individual long-term leases. The Company is currently planning
the redevelopment of the warehouse portion of each property.
During 1998, Kimco Select, through a partnership investment, acquired a
leasehold position and expended approximately $2.4 million to construct a
50,000 square foot ambulatory care facility, which is anchored by Wellness
Place, a regional health care provider, and contains complementary retail
space. This property is located in Trexlertown, Pennsylvania.
During 1997, Kimco Select through a partnership investment, acquired an
interest in a multi-story building in Eastwick, PA. This 39,000 square foot
property, and a 53,000 square foot property in Upper Darby, PA previously
acquired, have been redeveloped as ambulatory care facilities, which are
anchored by Mercy Health Corporation, a leading regional health care system
and contain complementary retail space. During 1998, Kimco Select obtained
mortgage financing of $9.0 million on these properties. This fixed-rate
non-recourse mortgage bears interest at 7% per annum and matures in 2008.
Through December 31, 1998, acquisition and redevelopment costs related to
these two properties totaled approximately $13 million.
11
<PAGE>
Kimco Select has also acquired (i) various first mortgage loan participations,
(ii) certain public bonds and (iii) joint venture interests in two entities
which own 3 office buildings in Miami, FL. The aggregate acquisition costs
related to these investments was approximately $4.3 million.
Other Transactions -
During 1998, the Company invested approximately $19.0 million in a partnership
which acquired and leased-back 11 automotive dealerships. The Company has a
50% interest in this partnership.
In December 1998, the Company invested approximately $3.6 million in a
partnership which acquired a shopping center property in Bronx, New York for
approximately $34 million, including mortgage debt of approximately $27
million. The Company has a 50% interest in this partnership.
In addition, the Company acquired a first mortgage on a shopping center in
Manhasset, New York for approximately $21 million and has entered into a
contract to acquire fee title to this property.
Financings -
Unsecured Debt. During 1998, the Company issued an aggregate principal amount
of $290 million of unsecured notes under its MTN program. These unsecured
notes are comprised of (i) $100 million seven-year fixed-rate notes bearing
interest at 6.73% per annum and maturing in June 2005, (ii) $30 million
eight-year fixed-rate notes bearing interest at 6.93% per annum and maturing
in July 2006, (iii) $60 million two-year floating-rate notes bearing interest
at Libor plus .15% per annum and maturing in August 2000 and (iv) $100 million
ten-year Remarketed Reset notes bearing interest initially at LIBOR plus .30%
and maturing in August 2008. The Company has entered into interest rate swap
agreements which have effectively fixed the interest rate on the $60 million
floating-rate notes and $100 million Remarketed Reset notes at 5.91% per annum
and 5.92% per annum, respectively. The net proceeds from these issuances were
used to repay indebtedness and for the acquisition of neighborhood and
community shopping centers. (See Note 7 of the Notes to Consolidated Financial
Statements included in this annual report on Form 10-K.)
Mortgage Financing. During November 1998, the Company obtained mortgage
financing aggregating approximately $272.3 million on 20 of its properties.
The mortgages are non-recourse, non-cross collateralized ten-year first
mortgages, which bear interest at an average fixed rate of 6.585%. These
properties were financed in anticipation of the commencement of the New
Investment Vehicle (See Recent Developments-New Investment Vehicle). The net
proceeds from these mortgages were used primarily for the acquisition of
neighborhood and community shopping centers.
Credit Facility. On August 21, 1998, the Company established a $215 million
unsecured revolving credit facility (the "Credit Facility") with a group of
banks. The Credit Facility is scheduled to expire in August 2001. Under the
terms of the Credit Facility, funds may be borrowed for general corporate
purposes, including (i) funding property acquisitions and (ii) development and
redevelopment costs. Interest on borrowings under the Credit Facility accrues
at a spread (currently .50%) to LIBOR, which fluctuates in accordance with
change in the Company's senior debt ratings. This Credit Facility replaced the
Company's (i) $100 million unsecured revolving credit facility and (ii) $150
million interim credit facility.
Equity. During 1998, the Company completed 16 public stock offerings issuing
an aggregate 7.6 million shares of common stock at prices ranging from
$36.0625 to $39.6875 per share. The net proceeds from these sales of common
stock, totaling approximately $278.3 million (after related transaction costs
of approximately $11.5 million), have been used primarily for the acquisition
of neighborhood and community shopping centers and the redemption of the Class
E Preferred Stock issued in connection with the Merger. (See Notes 2 and 3 of
the Notes to Consolidated Financial Statements included in this annual report
on Form 10-K.)
12
<PAGE>
New Investment Vehicle
In view of recent market conditions, the Company has decided to explore the
creation of a new entity that would invest in real estate that it believes
would be more appropriately financed through greater leverage than the Company
traditionally uses. These properties would include, but not be limited to,
fully developed properties with strong, stable cash flows from credit-worthy
retailers with long-term leases that have limited near-term potential for
growth through redevelopment or re-tenanting. The Company has preliminarily
established from our existing portfolio an initial portfolio of properties
with an estimated net equity value of approximately $110 million for this
entity. The Company has reached an agreement in principle with an
institutional investor to participate in this new investment vehicle. The
investors' initial capital commitment will equal the equity value of the
initial portfolio to be contributed by the Company. The agreement in principle
is subject to completion and final approval by the Company and the investor.
KC Holdings, Inc.
To facilitate the Company's November 1991 IPO, forty-six shopping center
properties and certain other assets, together with indebtedness related
thereto, were transferred to subsidiaries of KC Holdings, Inc. ("KC Holdings")
a newly formed corporation that is owned by the stockholders of the Company
prior to the IPO. The Company, although having no ownership interest in KC
Holdings or its subsidiary companies, was granted ten-year, fixed-price
options to reacquire the real estate assets owned by KC Holdings'
subsidiaries, subject to any liabilities outstanding with respect to such
assets at the time of an option exercise. As of December 31, 1998, KC
Holdings' subsidiaries had conveyed fourteen shopping center properties back
to the Company and had disposed of ten additional centers in transactions with
third parties. The members of the Company's Board of Directors who are not
also shareholders of KC Holdings unanimously approved the purchase of each of
the fourteen shopping centers that have been reacquired by the Company from KC
Holdings. (See Notes 10 and 14 of the Notes to Consolidated Financial
Statements included in this annual report on Form 10-K.) The Company manages
18 of KC Holdings' 22 shopping center properties pursuant to a management
agreement. KC Holdings' other four shopping center properties are managed by
unaffiliated joint venture partners.
Acquisition Option -
The Company holds 10-year acquisition options which expire in November 2001 to
reacquire interests in the 22 shopping center properties owned by KC Holdings'
subsidiaries. The option exercise prices are fixed and payable in shares of
the Company's common stock or, in the event payment in the form of common
stock could jeopardize the Company's status as a REIT, an equivalent value in
cash. If the Company exercises its options to acquire all the remaining
shopping center properties, the maximum aggregate amount payable to KC
Holdings would be approximately $11.1 million, or approximately 280,000 shares
of the Company's common stock (assuming shares valued at the closing price on
the NYSE of $39.69 per share as of December 31, 1998). The Company would
acquire the properties subject to any existing mortgage indebtedness and other
liabilities on the properties. The acquisition options enable the Company to
obtain any appreciation in the value of these properties over the option
exercise prices, while eliminating the Company's interim exposure to leverage
and operating risks.
The option exercise prices for the shopping center properties are generally
equal to 10% of KC Holdings' share of the mortgage debt which was outstanding
on the properties at the date of the IPO. If, however, the market value of the
Company's common stock at the time an option is exercised is less than $13.33
per share (the IPO price), then the option exercise price will decline
proportionately (subject to maximum reduction of 50%).
The 22 shopping center properties subject to the acquisition options are held
in 8 subsidiaries of KC Holdings. Thirteen of these properties are subject to
a single lease and/or a single cross-collateralized mortgage and are therefore
held by a single subsidiary. Four of the properties, which are owned in two
separate joint ventures and managed by unaffiliated joint venture partners,
are held by two additional subsidiaries, and the remaining five shopping
center properties are each held by separate subsidiaries. The Company may
exercise its acquisition options separately with respect to each subsidiary.
The acquisition options may be exercised by either (i) a majority of the
Company's directors who are not also stockholders of KC Holdings, provided
that the pro forma annualized net cash flows of the properties to be acquired
exceed the dividend yield on the shares issued to exercise each option, or
(ii) a majority of the Company's stockholders who are not also stockholders of
KC Holdings.
13
<PAGE>
KC Holdings' subsidiaries may sell any of the properties subject to the
acquisition options to any third party unaffiliated with KC Holdings or its
stockholders, provided that KC Holdings provides the Company with a 30-day
right of first refusal notice with regard to such sale. KC Holdings may cause
such a selling subsidiary to distribute any sale proceeds to KC Holdings or
its stockholders, provided that the option exercise price with respect to such
subsidiary is reduced by the amount that is distributed, and further provided
that no amount may be distributed so as to cause the option exercise price for
any subsidiary to be reduced to less than $1.
Each of KC Holdings' subsidiaries may pay dividends to KC Holdings to the
extent of net operating cash flow. In addition, any KC Holdings subsidiary may
make distributions to KC Holdings in excess of net operating cash flow,
provided that the option exercise price with respect to such subsidiary is
reduced by the amount of such distribution, and further provided that no
amount may be distributed so as to cause the option exercise price for any
subsidiary to be reduced to less than $1. KC Holdings may increase the
indebtedness in its subsidiaries for the purpose of improving, maintaining,
refinancing or operating the related shopping center properties. Such
indebtedness may include borrowings from the stockholders of KC Holdings.
In the event of a complete casualty or a condemnation of a property held by
any of KC Holdings' subsidiaries, the acquisition option will terminate with
respect to such property and the option shall continue to be effective with
respect to any other properties held by such subsidiary.
Each of KC Holdings' subsidiaries has agreed with the Company that it will
engage in no activities other than in connection with the ownership,
maintenance and improvement of the properties that it owns and only to the
extent that the Company could engage in such activities without receiving or
earning non-qualifying income (in excess of certain limits) under the REIT
provisions of the Code or without otherwise impairing the Company's status as
a REIT. In addition, KC Holdings has covenanted not to engage in any other
real estate activity. The Company has agreed not to make loans to KC Holdings
or its subsidiaries.
Subsequent Events
Property Acquisitions / Disposition -
During January and February 1999, the Company acquired five neighborhood and
community shopping center properties comprising approximately .7 million
square feet of GLA for approximately $79.0 million, including the assumption
of $8.5 million of mortgage debt encumbering one of the properties. These
properties are primarily anchored by supermarket or discount department store
tenants, including Kmart Corporation, Kroger and TJ Maxx.
The Company disposed of a property in Morrisville, PA during February 1999.
Cash proceeds from the disposition totaling $1.6 million approximated the
property's net book value.
Financings -
During February 1999, the Company issued $130 million 6-7/8% fixed-rate Senior
Notes due 2009. Interest on the notes is payable semi-annually in arrears. The
notes were sold at 99.85% of par value. Net proceeds from this issuance,
totaling approximately $128.9 million, after related transaction costs of
approximately $.9 million, were used, in part, to repay $100 floating-rate
senior notes that matured during February 1999 and for general corporate
purposes.
Exchange Listings
The Company's common stock, Class A Depositary Shares, Class B Depositary
Shares, Class C Depositary Shares and Class D Depositary Shares are traded on
the NYSE under the trading symbols "KIM", "KIMprA", "KIMprB", "KIMprC" and
"KIMprD" respectively.
14
<PAGE>
Item 2. Properties
Real Estate Portfolio As of January 1, 1999 the Company's real estate
portfolio was comprised of approximately 56.7 million square feet of GLA in
365 neighborhood and community shopping center properties, two regional malls,
61 retail store leases, three parcels of undeveloped land, one distribution
center, one stand-alone retail warehouse and three projects under development,
located in 40 states. Neighborhood and community shopping centers comprise the
primary focus of the Company's current portfolio, representing approximately
98% of the Company's total shopping center GLA. As of January 1, 1999,
approximately 91% of the Company's neighborhood and community shopping center
space was leased, and the average annualized base rent per leased square foot
of the neighborhood and community shopping center portfolio was $7.97.
The Company's neighborhood and community shopping center properties, generally
owned and operated through subsidiaries or joint ventures, had an average size
of approximately 135,000 square feet as of January 1, 1999. The Company
retains its shopping centers for long-term investment and consequently pursues
a program of regular physical maintenance together with major renovations and
refurbishing to preserve and increase the value of its properties. These
projects usually include renovating existing facades, installing uniform
signage, resurfacing parking lots and enhancing parking lot lighting. During
1998, the Company capitalized approximately $6.1 million in connection with
these property improvements.
The Company's neighborhood and community shopping centers are usually
"anchored" by a national or regional discount department store, supermarket or
drugstore. As one of the original participants in the growth of the shopping
center industry and one of the nation's largest owners and operators of
shopping centers, the Company has established close relationships with a large
number of major national and regional retailers. National and regional
companies that are tenants in the Company's shopping center properties include
Kmart Corporation, Kohl's, The Home Depot, WalMart, TJX Companies, Toys/Kids
R' Us, Shopko, Ames, A & P and Costco.
A substantial portion of the Company's income consists of rent received under
long-term leases. Most of the leases provide for the payment of fixed base
rentals monthly in advance and for the payment by tenants of an allocable
share of the real estate taxes, insurance, utilities and common area
maintenance expenses incurred in operating the shopping centers. Although a
majority of the leases require the Company to make roof and structural repairs
as needed, a number of tenant leases place that responsibility on the tenant,
and the Company's standard small store lease provides for roof repairs to be
reimbursed by the tenant as part of common area maintenance. The Company's
management places a strong emphasis on sound construction and safety at its
properties.
Approximately 1,600 of the Company's 4,100 leases also contain provisions
requiring the payment of additional rent calculated as a percentage of
tenants' gross sales above predetermined thresholds. Percentage Rents
accounted for approximately 2% of the Company's revenues from rental property
for the year ended December 31, 1998.
Minimum base rental revenues and operating expense reimbursements accounted
for approximately 98% of the Company's total revenues from rental property for
the year ended December 31, 1998. The Company's management believes that the
average base rent per square foot for many of the Company's existing leases is
generally lower than the prevailing market-rate base rents in the geographic
regions where the Company operates, reflecting the potential for future
growth.
15
<PAGE>
The Company has been able to capitalize on the below market-rate leases in its
existing shopping center portfolio to obtain increases in rental revenues
through the renewal of leases or strategic re-tenanting of space. From January
1, 1998 to December 31, 1998, excluding the effect of (i) 1998 acquisitions
and (ii) the acquisition of Price REIT, the Company increased the average base
rent per leased square foot on its portfolio of neighborhood and community
shopping centers from $6.31 to $7.00, an increase of $.69 per square foot,
which was attributable to (i) general leasing activity within the existing
portfolio and (ii) the re-leasing of the Venture locations in connection with
the acquisition of 94 leasehold positions (See Recent Developments Venture
Stores, Inc. Properties Acquisitions). The effect of 1998 acquisitions,
including the acquisition of Price REIT which had an average rent per square
foot of $10.19 at the time of the acquisition, increased the overall rent per
leased square foot of the shopping center portfolio by $.97, thus bringing the
average rent per leased square foot to $7.97 as of December 31, 1998. The
average annual base rent per leased square foot for new leases executed in
1998 was $9.30.
The Company seeks to reduce its operating and leasing risks through geographic
and tenant diversity. No single neighborhood and community shopping center
accounted for more than 1.0% of the Company's total shopping center GLA or
more than 1.5% of total annualized base rental revenues as of December 31,
1998. The Company's five largest tenants include Kmart Corporation, The Home
Depot, Kohl's, Toys/Kids R' Us and TJX Companies, which represent
approximately 13.7%, 3.0%, 2.5%, 1.8% and 1.5%, respectively, of the
annualized base rental revenues at December 31, 1998. The Company maintains an
active leasing and capital improvement program that, combined with the high
quality of the locations, has made, in management's opinion, the Company's
properties attractive to tenants.
The Company's management believes its experience in the real estate industry
and its relationships with numerous national and regional tenants gives it an
advantage in an industry where ownership is fragmented among a large number of
property owners.
Retail Store Leases In addition to our neighborhood and community shopping
centers, as of January 1, 1999, we had interests in retail store leases
totaling approximately 5.5 million square feet of anchor stores in 61
neighborhood and community shopping centers located in 24 states. As of
January 1, 1999, approximately 93% of the space in these anchor stores had
been sublet to retailers that lease the stores under net lease agreements
providing for average annualized base rental payments to us of $4.14 per
square foot. Our average annualized base rental payments under our retail
store leases to the land owners of such subleased stores is approximately
$2.75 per square foot. The average remaining primary term of our retail store
leases (and similarly the remaining primary terms of our sublease agreements
with the tenants currently leasing such space) is approximately 4 years,
excluding options to renew the leases for terms which generally range from 5
to 25 years.
Ground-Leased Properties The Company has 54 shopping center properties that
are subject to long-term ground leases where a third party owns and has leased
the underlying land to the Company (or an affiliated joint venture) to
construct and/or operate a shopping center. The Company or the joint venture
pays rent for the use of the land and generally is responsible for all costs
and expenses associated with the building and improvements. At the end of
these long-term leases, unless extended, the land together with all
improvements revert to the land owner.
Undeveloped Land The Company owns certain unimproved land tracts that it
intends to develop as new shopping centers (See Recent Developments - Property
Developments and Redevelopments) and owns parcels of land adjacent to certain
of its existing shopping centers that are held for possible expansion. At
times, should circumstances warrant, the Company may develop or dispose of
these parcels.
The table on pages 17 to 24 sets forth more specific information with respect
to each of the Company's shopping center properties as of December 31, 1998.
Item 3. Legal Proceedings
The Company is not presently involved in any litigation nor to its knowledge
is any litigation threatened against the Company or its subsidiaries that, in
management's opinion, would result in any material adverse effect on the
Company's ownership, management or operation of its properties, or which is
not covered by the Company's liability insurance.
Item 4. Submission of Matters to a Vote of Security Holders
None.
16
<PAGE>
PROPERTY CHART
<TABLE>
<CAPTION>
YEAR OWNERSHIP
DEVELOPED INTEREST/ LAND AREA
OR ACQUIRED (EXPIRATION)(2) (ACRES)
----------- --------------- -------
<S> <C> <C> <C>
ARIZONA
GLENDALE 1998 FEE 40.50
GLENDALE 1998 FEE/JOINT VENTURE 16.52
MESA 1998 FEE 19.83
NORTH PHOENIX 1998 FEE 17.00
PHOENIX (3) 1996 FEE 13.40
PHOENIX 1998 FEE 26.60
PHOENIX 1997 FEE 17.50
TEMPE (5) 1998 FEE/JOINT VENTURE 20.00
TEMPE 1998 FEE/JOINT VENTURE 21.10
CALIFORNIA
ALHAMBRA 1998 FEE 18.40
LA MIRADA 1998 FEE 31.20
ANAHEIM 1995 FEE 1.04
SANTA ANA 1998 FEE 12.00
CORONA 1998 FEE 58.27
CARMICHAEL 1998 FEE 18.50
CHULA VISTA 1998 FEE 31.30
SANTEE 1998 FEE 11.01
OXNARD 1998 FEE 14.40
COLORADO
AURORA 1998 FEE 13.81
AURORA 1998 FEE 9.92
AURORA 1998 FEE 13.90
ENGLEWOOD 1998 FEE 6.48
DENVER 1998 FEE 1.45
COLORADO SPRINGS 1998 FEE 10.74
LAKEWOOD 1998 FEE 7.55
CONNECTICUT
FARMINGTON 1998 FEE 16.90
HAMDEN 1997 FEE/JOINT VENTURE 7.42
NORTH HAVEN 1998 FEE 31.70
WATERBURY 1993 FEE 13.10
DELAWARE
ELSMERE 1979 GROUND LEASE(2076) 17.14
FLORIDA
MELBOURNE 1968 GROUND LEASE(2071) 11.53
MELBOURNE 1994 FEE 13.84
WEST MELBOURNE 1998 FEE 13.23
CORAL SPRINGS 1994 FEE 5.90
CORAL SPRINGS 1997 FEE 9.80
LAUDERDALE LAKES 1968 FEE/JOINT VENTURE 10.04
LAUDERHILL 1978 FEE 15.50
MARGATE 1993 FEE 34.07
PLANTATION 1974 FEE/JOINT VENTURE 4.59
POMPANO BEACH 1968 FEE/JOINT VENTURE 6.55
HOMESTEAD 1972 FEE/JOINT VENTURE 21.00
MIAMI 1968 FEE 8.23
MIAMI 1998 FEE/JOINT VENTURE 13.98
MIAMI (3) 1985 FEE 15.92
MIAMI 1986 FEE 7.78
SOUTH MIAMI 1995 FEE 5.44
TAMPA 1997 FEE 16.34
LEESBURG 1969 GROUND LEASE(2017) 1.25
MOUNT DORA 1997 FEE 12.44
BRADENTON 1968 FEE/JOINT VENTURE 6.20
BRADENTON 1998 FEE 19.63
<CAPTION>
LEASABLE PERCENT MAJOR LEASE
AREA LEASED (LEASE EXPIRATION/
(SQ. FT) (1) OPTION EXPIRATION)
-------- --- ------------------
<S> <C> <C> <C>
ARIZONA
GLENDALE 337,107 100% COSTCO(2011/2046), HOMEBASE(2008/2028), LEVITZ FURNITURE(2012/2032)
GLENDALE 124,325 100% SEARS(2001/2016), MICHAELS(2003/2018), FABRI CENTER(2002/2017)
MESA 135,692 97% ROSS STORES(2000/2005), HARKINS THEATRE(2005/2025), OUR HOME(2005/2015)
NORTH PHOENIX 228,769 100% BURLINGTON COAT FACTORY(2013/2023), COMPUTER CITY(2004/2019), MICHAELS(2007/2022)
PHOENIX (3) 190,575 67% HOME DEPOT(1999/2020), AUTOZONE(2003/2008)
PHOENIX 334,597 97% COSTCO(2006/2041), HOMEBASE(2009/2029)
PHOENIX 124,052 96% SAFEWAY(2009/2039), WALGREENS(2029)
TEMPE (5) -- --
TEMPE 384,812 100% HOMEBASE(2010/2025), SPORTS AUTHORITY(2009/2024)
CALIFORNIA
ALHAMBRA 200,634 77% COSTCO(2006/2041), FABRI CENTER(2004/2019)
LA MIRADA 288,471 97% TOYS R US(2012/2032), LA FITNESS INTERNATIONAL(2012/2022)
ANAHEIM 15,396 100%
SANTA ANA 134,400 100% HOME DEPOT(2015/2035)
CORONA 486,958 98% COSTCO(2007/2042), HOME DEPOT(2010/2030), LEVITZ FURNITURE(2009/2029)
CARMICHAEL 214,914 94% HOME DEPOT(2003/2023), SPORTS AUTHORITY(2009/2024)
CHULA VISTA 371,023 100% COSTCO(2006/2041), HOMEBASE(2008/2028), LEVITZ FURNITURE(2010/2030)
SANTEE 97,451 94% OFFICE DEPOT(2006/2021), ROSS STORES(2004/2024), MICHAELS(2003/2018)
OXNARD 171,581 100% TARGET(2003/2013), FOOD 4 LESS(2003/2008)
COLORADO
AURORA 145,466 91% TJ MAXX(2002/2012), GRANTREE FURNITURE(2003), CLASSIC TREASURES(2000/2004)
AURORA 44,170 95% BLOCKBUSTER(2003)
AURORA 111,085 91% COOMERS(2001/2006), CROWN LIQOUR(2005/2010)
ENGLEWOOD 80,330 100% PHAR MOR(2004/2019), OLD COUNTRY BUFFET(2009/2019)
DENVER 18,405 100% PAYLESS DRUGS(2002/2017)
COLORADO SPRINGS 107,798 96% CUB FOODS(2004/2034)
LAKEWOOD 83,304 99% SAFEWAY STORES(2002/2032)
CONNECTICUT
FARMINGTON 184,981 99% SPORTS AUTHORITY(2018/2063), LINENS & THINGS(2016/2036), BORDERS BOOKS(2018/2063)
HAMDEN 341,502 100% BRADLEES(2004/2014), STEINBACH(2002/2012), BOB'S(2016/2036)
NORTH HAVEN 331,919 100% HOME DEPOT(2009/2029), COSTCO(2006/2041)
WATERBURY 136,153 100% BRADLEES(2002/2007), STOP & SHOP(2013/2043)
DELAWARE
ELSMERE 111,600 100% SCHOTTENSTEIN(2008/2038)
FLORIDA
MELBOURNE 168,797 58% FABRI CENTER(2006/2016), WALGREENS(2045)
MELBOURNE 131,851 76% WINN DIXIE(2002/2027), ECKERD(2002/2022)
WEST MELBOURNE 148,003 96% SERVICE MERCHANDISE(2005/2035), KROGER(2004/2034), MARSHALLS(2000/2010)
CORAL SPRINGS 46,497 100% LINENS N THINGS(2012/2027), PIER 1 IMPORTS(2001/2011)
CORAL SPRINGS 83,500 98% TJ MAXX(2001/2016), BLOCKBUSTER(2006/2026)
LAUDERDALE LAKES 112,476 99% THRIFT SHOPS(2002/2012), FAMILY DOLLAR(2002/2017)
LAUDERHILL 179,726 91% BABIES R US(2004/2014), PARTY CITY(2007/2017)
MARGATE 256,030 95% PUBLIX(2008/2028), OFFICE DEPOT(2000/2020)
PLANTATION 60,414 100% WHOLE FOODS(2009/2019)
POMPANO BEACH 63,838 100%
HOMESTEAD 160,819 93% PUBLIX(2014/2034), OFFICEMAX(2013/2028), ECKERD(2002/2012)
MIAMI 104,968 100% KMART(2009/2029), WALGREENS(1999)
MIAMI 74,973 98% BABIES R US(2006/2021)
MIAMI (3) 83,275 100% PUBLIX(2019/2039), WALGREENS(2058)
MIAMI 81,780 100% PUBLIX(2009/2029), WALGREENS(2018)
SOUTH MIAMI 60,804 93% KIDS R US(2016/2021), PARTY CITY(2007/2017)
TAMPA 109,408 100% STAPLES(2003/2018), ROSS STORES(2002/2022)
LEESBURG 13,468 89% DISCOUNT AUTO PARTS(1999/2004)
MOUNT DORA 118,150 100% KMART(2013/2058), PET SUPERMARKET(2003/2013)
BRADENTON 24,700 96% DISCOUNT VIDEO(2002/2007)
BRADENTON 162,997 96% PUBLIX(2012/2032), TJ MAXX(2003/2018), FABRI CENTER(2009/2024)
</TABLE>
17
<PAGE>
PROPERTY CHART
<TABLE>
<CAPTION>
YEAR OWNERSHIP
DEVELOPED INTEREST/ LAND AREA
OR ACQUIRED (EXPIRATION)(2) (ACRES)
----------- --------------- -------
<S> <C> <C> <C>
OCALA 1997 FEE 27.17
STUART 1994 FEE 20.67
EAST ORLANDO 1971 FEE 11.63
LAKE BARTON 1968 FEE 4.79
ORLANDO 1968 FEE/JOINT VENTURE 10.00
ORLANDO 1968 GROUND LEASE(2047)/JOINT VENTURE 7.75
ORLANDO 1994 FEE 28.00
ORLANDO 1996 FEE 11.70
ALAMONTE SPRINGS 1995 FEE 5.58
KISSIMMEE 1996 FEE 18.42
BOCA RATON 1967 FEE 9.85
RIVIERA BEACH 1968 GROUND LEASE(2066)/JOINT VENTURE 5.06
WEST PALM BEACH 1967 FEE/JOINT VENTURE 7.57
WEST PALM BEACH 1995 FEE 7.93
NEW PORT RICHEY 1972 FEE 0.99
LARGO 1968 FEE 11.98
LARGO 1992 FEE 29.44
LARGO 1993 FEE 6.62
ST. PETERSBURG 1968 GROUND LEASE(2084)/JOINT VENTURE 9.01
WINTER HAVEN 1973 FEE/JOINT VENTURE 13.90
PALATKA 1970 FEE 8.90
SARASOTA 1970 FEE 10.00
SARASOTA 1989 FEE 11.98
FERN PARK 1968 FEE 12.00
ORLANDO 1998 FEE/JOINT VENTURE 19.40
SANFORD 1989 FEE 40.90
FT. PIERCE 1970 FEE/JOINT VENTURE 14.83
TALLAHASSEE 1998 FEE 12.79
PORT RICHEY 1998 FEE 15.20
MIAMI 1998 FEE/JOINT VENTURE 4.02
MIAMI 1998 FEE/JOINT VENTURE 0.26
GEORGIA
SAVANNAH 1993 FEE 22.22
MACON 1969 FEE 12.30
SAVANNAH 1995 FEE 9.50
FOREST PARK 1969 FEE 14.21
ATLANTA 1988 FEE 19.48
GAINESVILLE 1970 FEE/JOINT VENTURE 12.60
AUGUSTA 1995 FEE 11.32
IOWA
WATERLOO 1996 FEE 8.97
DAVENPORT 1997 GROUND LEASE(2028) 9.10
DUBUQUE 1997 GROUND LEASE(2019) 8.39
CLIVE 1996 FEE 8.80
DES MOINES 1996 FEE 9.56
ILLINOIS
CHAMPAIGN 1998 FEE 9.04
ADDISON 1998 FEE 16.37
ARLINGTON HEIGHTS 1998 FEE 19.20
BRIDGEVIEW 1998 FEE 6.81
CALUMET CITY 1997 FEE 16.98
CHICAGO 1997 GROUND LEASE(2020) 13.42
CHICAGO 1997 GROUND LEASE(2040) 17.48
CHICAGO 1997 FEE 6.04
CHICAGO 1998 FEE 6.41
CHICAGO 1998 FEE 9.47
COUNTRYSIDE 1997 GROUND LEASE(2053) 27.67
CRESTWOOD 1997 GROUND LEASE(2051) 36.75
FOREST PARK 1997 GROUND LEASE(2021) 9.29
MATTESON 1997 FEE 17.01
<CAPTION>
LEASABLE PERCENT MAJOR LEASE
AREA LEASED (LEASE EXPIRATION/
(SQ. FT) (1) OPTION EXPIRATION)
-------- --- ------------------
<S> <C> <C> <C>
OCALA 254,937 97% KMART(2001/2021), SERVICE MERCHANDISE(2007/2032)
STUART 170,291 100% SERVICE MERCHANDISE(2010/2070), MARSHALLS(2005/2020)
EAST ORLANDO 124,798 100% SPORTS AUTHORITY(2000/2020), OFFICE DEPOT(2005/2025)
LAKE BARTON 2,800 100%
ORLANDO 114,434 100% BALLYS HEALTH(2008/2018), HSN REALTY(2000/2009)
ORLANDO 103,480 100% DORIN DISTRIBUTORS(2002/2007)
ORLANDO 230,704 93% COSTCO(2006/2026), SPORTS AUTHORITY(2011/2031)
ORLANDO 117,644 86% ROSS STORES(2003/2028), BIG LOTS(2004/2009), OFFICE MAX(2014/2034)
ALAMONTE SPRINGS 94,193 100% ROOMS TO GO(2001), THOMASVILLE HOME(2001/2006)
KISSIMMEE 130,983 97% KASH N KARRY(2006/2036), OFFICEMAX(2012/2027), FABRI CENTER(2001/2016)
BOCA RATON 73,549 98% WINN DIXIE(2008/2033)
RIVIERA BEACH 46,390 98% GULFSTREAM GOODWILL(2005/2008), FURNITURE KINGDOM(2009/2014), BOATHOUSE DISCOUNT(2002/2007)
WEST PALM BEACH 74,326 99% WINN DIXIE(2010/2030)
WEST PALM BEACH 80,845 99% BABIES R US(2006/2021)
NEW PORT RICHEY 9,000 --
LARGO 149,472 98% WALMART(2007/2027), ECKERD(1999/2004)
LARGO 215,916 96% PUBLIX(2009/2029), OFFICE DEPOT(1999/2019)
LARGO 56,630 90%
ST. PETERSBURG 119,179 76% KASH N KARRY(2017/2037), TJ MAXX(2001/2011)
WINTER HAVEN 88,400 60% BIG LOTS(2000/2010), FABRI CENTER(2006/2016)
PALATKA 72,216 87% SAVE A LOT(2003/2013), BIG LOTS(1999/2009)
SARASOTA 103,085 100% TJ MAXX(2001/2016), OFFICEMAX(2009/2024), FRANKS NURSERY(2012/2032)
SARASOTA 109,930 92% WINN DIXIE(1999)
FERN PARK 131,894 99% BED BATH AND BEYOND(2002/2012), BOOKS-A-MILLION(2006/2016), OFFICEMAX(2008/2023)
ORLANDO 271,095 98% UPTONS(2009/2029), GENERAL CINEMA(2005/2025), ROSS STORES(2001/2021)
SANFORD 301,801 94% WALMART(2005/2035), ROSS STORES(2005/2025), PUBLIX(2005/2025)
FT. PIERCE 210,460 89% KMART(2001/2016), WINN DIXIE(2002/2027), FABRI CENTER(2000/2010)
TALLAHASSEE 105,901 98% STEINMART(2003/2008), BEN FRANKLIN(2007/2022)
PORT RICHEY 103,294 100% CIRCUIT CITY(2011/2021), STAPLES(2006/2011)
MIAMI 233,039 74%
MIAMI 138,380 76%
GEORGIA
SAVANNAH 187,071 97% PHAR-MOR(1999/2004), TJ MAXX(2005/2015), MARSHALLS(2007/2022)
MACON 127,260 78% HEILIG-MEYERS(2007/2017)
SAVANNAH 88,480 100% MEDIA PLAY(2006/2021), PIGGLY WIGGLY(1999/2004), REVCO(2000)
FOREST PARK 100,452 91%
ATLANTA 165,314 100% GEORGIA SHOW(2005)
GAINESVILLE 142,288 99% CONSOLIDATED STORES(2002), OFFICE DEPOT(2004/2020)
AUGUSTA 119,930 94% PHAR-MOR(1999/2007), TJ MAXX(2004/2014), GOLDS GYM(2004/2009)
IOWA
WATERLOO 96,000 100% KMART(2021/2051)
DAVENPORT 91,035 100% KMART(2024/2028)
DUBUQUE 82,979 100% SHOPKO(2018/2019)
CLIVE 90,000 100% KMART(2021/2051)
DES MOINES 111,847 100% HOME DEPOT(2019/2064)
ILLINOIS
CHAMPAIGN 102,615 100% K'S MERCHANDISE MART(2014/2034)
ADDISON 115,710 100% KMART(2024/2054)
ARLINGTON HEIGHTS 81,370 100% KMART(2024/2054)
BRIDGEVIEW 88,069 --
CALUMET CITY 197,386 95% KMART(2024/2054), MARSHALLS(2003/2008), BEST BUY(2012/2032)
CHICAGO 109,441 100% KMART(2020)
CHICAGO 104,264 100% GOLDBLATT'S(2005/2025)
CHICAGO 87,563 100% KMART(2024/2054)
CHICAGO 83,380 100% KMART(2024/2054)
CHICAGO 117,450 98% KMART(2024/2054)
COUNTRYSIDE 117,456 100% KMART(2024/2053)
CRESTWOOD 79,903 100% KMART(2024/2051)
FOREST PARK 98,371 100% KMART(2021)
MATTESON 165,623 98% KMART(2024/2054), MARSHALLS(2005/2010)
</TABLE>
18
<PAGE>
PROPERTY CHART
<TABLE>
<CAPTION>
YEAR OWNERSHIP
DEVELOPED INTEREST/ LAND AREA
OR ACQUIRED (EXPIRATION)(2) (ACRES)
----------- --------------- -------
<S> <C> <C> <C>
MELROSE PARK 1998 FEE 6.75
MT.PROSPECT 1997 FEE 16.80
NILES 1997 GROUND LEASE(2022) 10.18
NORRIDGE 1997 GROUND LEASE(2042) 11.69
OAK LAWN 1997 FEE 15.43
ORLAND PARK 1998 FEE 18.83
ORLAND PARK (3) 1998 FEE/JOINT VENTURE 7.76
SCHAUMBURG (3) 1998 FEE/JOINT VENTURE 7.30
SCHAUMBURG 1997 GROUND LEASE(2015) 10.91
SKOKIE (3) 1997 GROUND LEASE(2003) 10.66
STREAMWOOD 1998 FEE 5.61
DOWNERS GROVE 1997 FEE 12.04
DOWNERS GROVE 1998 FEE/JOINT VENTURE 7.19
NAPERVILLE 1997 FEE 9.00
OAKBROOK TERRACE 1997 FEE 16.90
WOODRIDGE 1998 FEE 13.10
ADDISON 1968 GROUND LEASE(2066) 7.99
CARBONDALE 1997 GROUND LEASE(2052) 8.05
BRADLEY 1996 FEE 5.35
AURORA 1998 FEE 17.89
ELGIN 1972 FEE 18.69
ELGIN 1998 FEE 9.00
GENEVA 1996 FEE 8.18
MUNDELIEN 1998 FEE 7.62
WAUKEGAN 1998 FEE 6.82
OTTAWA 1970 FEE 9.00
ALTON 1998 FEE 21.22
CRYSTAL LAKE 1998 FEE 6.13
BLOOMINGTON 1972 FEE 16.09
PEORIA 1997 GROUND LEASE(2031) 20.45
SPRINGFIELD 1998 GROUND LEASE(2028) 6.66
MOLINE 1998 GROUND LEASE(2003) 9.25
ROCKFORD 1998 GROUND LEASE(2030) 9.00
BELLEVILLE 1998 GROUND LEASE(2057) 20.34
FAIRVIEW HEIGHTS 1998 GROUND LEASE(2050) 19.05
CRESTHILL 1997 GROUND LEASE(2039) 9.03
INDIANA
GRIFFITH 1997 GROUND LEASE(2054) 10.57
MERRILLVILLE 1997 GROUND LEASE(2015) 12.67
E. WASHINGTON 1997 FEE 9.56
EAGLEDALE 1967 FEE 11.92
FELBRAM 1970 FEE 4.13
GREENWOOD 1970 FEE 25.68
INDIANAPOLIS 1998 FEE/JOINT VENTURE 17.42
INDIANAPOLIS 1986 FEE 20.60
MISHAWAKA 1998 FEE 7.47
SOUTH BEND 1998 FEE 1.82
LAFAYETTE 1971 FEE 12.37
LAFAYETTE 1997 FEE 24.34
LAFAYETTE 1998 FEE 43.16
EVANSVILLE 1986 FEE 14.20
EVANSVILLE 1986 FEE 11.50
KANSAS
OVERLAND PARK 1998 FEE 14.48
ROELAND PARK 1997 GROUND LEASE(2024) 12.70
WICHITA 1998 FEE 13.50
WICHITA 1996 FEE 6.50
KANSAS CITY 1998 FEE 19.63
WICHITA 1996 FEE 8.06
<CAPTION>
LEASABLE PERCENT MAJOR LEASE
AREA LEASED (LEASE EXPIRATION/
(SQ. FT) (1) OPTION EXPIRATION)
-------- --- ------------------
<S> <C> <C> <C>
MELROSE PARK 88,218 --
MT.PROSPECT 165,603 87% KMART(2024/2054), PAYLESS(2000/2005)
NILES 101,775 100% KMART(2022), PAYLESS(1999/2009)
NORRIDGE 116,914 100% KMART(2024/2042)
OAK LAWN 164,040 87% KMART(2024/2054), CHUCK E CHEESE(2002/2007)
ORLAND PARK 116,011 4%
ORLAND PARK (3) 166,000 49% HEILIG-MEYERS(2008/2018)
SCHAUMBURG (3) 167,690 51% HEILIG-MEYERS(2008/2018)
SCHAUMBURG 104,910 100% KMART(2015)
SKOKIE (3) 108,423 2%
STREAMWOOD 81,000 --
DOWNERS GROVE 141,906 100% TJ MAXX(2009/2024), BEST BUY(2015/2030)
DOWNERS GROVE 182,624 48% HEILIG-MEYERS(2008/2018)
NAPERVILLE 102,615 100% KMART(2024/2054)
OAKBROOK TERRACE 169,034 100% KMART(2024/2054), LINENS N THINGS(2006)
WOODRIDGE 149,411 98% GENERAL CINEMA(2006/2021), MICHIGAN SPORT(2001/2011), MONTGOMERY WARD(2004/2009)
ADDISON 93,289 100% SCHOTTENSTEIN STORES(2001/2016)
CARBONDALE 80,535 100% K'S MERCHANDISE MART(2012/2052)
BRADLEY 80,535 100% CARSON PIERRIE SCOTT(2014/2034)
AURORA 90,189 100% KMART(2024/2054)
ELGIN 183,439 99% MENARD(2001/2006), EAGLE FOOD(2000)
ELGIN 102,585 100% KMART(2024/2054)
GENEVA 104,000 100% KMART(2024/2054)
MUNDELIEN 90,630 100% KMART(2024/2054)
WAUKEGAN 90,555 100% MEGA MARTS(2009/2029)
OTTAWA 60,000 100% SCHOTTENSTEIN STORES(2001/2011)
ALTON 124,466 100% GRANDPAS(2003/2023)
CRYSTAL LAKE 81,365 72% HOBBY LOBBY(2009/2019)
BLOOMINGTON 175,530 100% SCHNUCK MARKETS(2004/2024), TOYS R US(2015/2045), BARNES & NOBLE(2005/2015)
PEORIA 158,407 83% KMART(2024/2031)
SPRINGFIELD 115,526 100% KMART(2024/2028)
MOLINE 105,977 100% SHOPKO(2003)
ROCKFORD 102,971 100% SHOPKO(2018/2030)
BELLEVILLE 81,730 100% KMART(2024/2054)
FAIRVIEW HEIGHTS 163,911 100% KMART(2024/2050), OFFICEMAX(2015/2025)
CRESTHILL 90,313 --
INDIANA
GRIFFITH 114,860 100% KMART(2024/2054)
MERRILLVILLE 101,887 100% KMART(2015)
E. WASHINGTON 89,042 --
EAGLEDALE 75,000 95% DAVIS WHOLESALE(2003/2012)
FELBRAM 27,400 91% SAVE A LOT(2001/2016), BLOCKBUSTER(2004/2009)
GREENWOOD 157,160 100% BABIES R US(2006/2021), TJ MAXX(2004/2010)
INDIANAPOLIS 166,104 55% KROGER(2000/2020), CVS(2004/2024)
INDIANAPOLIS 178,610 89% TARGET(2009/2029), FABRI CENTER(1999)
MISHAWAKA 82,100 100% K'S MERCHANDISE MART(2013/2023)
SOUTH BEND 81,668 --
LAFAYETTE 90,500 100% MENARD(TJX)(2001/2006)
LAFAYETTE 176,940 98% TARGET(2000/2024), FABRI CENTER(2010/2011)
LAFAYETTE 190,377 84% PETSMART(2012/2032), STAPLES(2011/2026), MICHAELS(2006/2026)
EVANSVILLE 193,472 96% SHOPKO(2018/2038), OFFICEMAX(2012/2027), MICHAELS(2004/2019)
EVANSVILLE 149,182 90% SHOPKO(2018/2038), BUEHLER FOODS(2003/2013)
KANSAS
OVERLAND PARK 168,953 100% HOME DEPOT(2005/2050)
ROELAND PARK 127,401 100% KMART(2024), PRICE CHOPPER(2004/2009)
WICHITA 133,800 100% BEST BUY(2010/2025), TJ MAXX(2004/2019), MICHAELS(2005/2025)
WICHITA 97,992 100% SHOPKO(2018/2038)
KANSAS CITY 164,332 100% K MART(2024/2054), PRICE CHOPPER(2002/2017)
WICHITA 96,319 100% SHOPKO(2018/2038)
</TABLE>
19
<PAGE>
PROPERTY CHART
<TABLE>
<CAPTION>
YEAR OWNERSHIP
DEVELOPED INTEREST/ LAND AREA
OR ACQUIRED (EXPIRATION)(2) (ACRES)
----------- --------------- -------
<S> <C> <C> <C>
KENTUCKY
BELLEVUE 1976 FEE 6.04
PADUCAH 1998 GROUND LEASE(2039) 1.96
LEXINGTON 1993 FEE 35.82
LOUISIANA
LAFAYETTE 1997 FEE 21.94
BATON ROUGE 1997 FEE 18.58
BATON ROUGE 1983 FEE/JOINT VENTURE 7.00
MARYLAND
WHITE MARSH 1998 FEE 25.30
LAUREL 1964 FEE 18.00
LAUREL 1972 FEE 8.06
HAGERSTOWN 1973 FEE 10.48
MASSACHUSETTS
GREAT BARRINGTON 1994 FEE 14.14
LEOMINSTER 1975 FEE 57.00
MICHIGAN
WALKER 1993 FEE 41.78
MUSKEGON 1985 FEE 12.20
CLARKSTON 1996 FEE 20.00
CLAWSON 1993 FEE 13.47
FARMINGTON 1993 FEE 2.78
GRAND HAVEN 1976 FEE 7.55
LIVONIA 1968 FEE 4.53
TAYLOR 1993 FEE 13.00
MINNESOTA
MINNETONKA 1998 FEE 12.10
MISSOURI
SPRINGFIELD 1998 GROUND LEASE(2087) 18.50
SPRINGFIELD 1994 FEE 41.50
ST. JOSEPH 1998 FEE 10.22
CAPE GIRARDEAU 1997 GROUND LEASE(2060) 6.99
ST. LOUIS 1972 FEE 13.11
KANSAS CITY 1997 FEE 15.64
INDEPENDENCE 1998 FEE 21.03
KANSAS CITY 1997 FEE 17.84
JOPLIN 1998 FEE 9.45
ST.PETERS 1997 FEE 14.77
BRIDGETON 1997 GROUND LEASE(2040) 27.29
CREVE COEUR 1998 FEE 12.23
ELLISVILLE 1970 FEE 18.37
HAZELWOOD 1970 FEE 15.00
JENNINGS 1971 FEE 8.20
KIRKWOOD 1998 GROUND LEASE(2069) 19.75
LEMAY 1974 FEE 3.09
MANCHESTER 1998 FEE 9.55
ST.LOUIS 1997 GROUND LEASE(2025) 19.66
ST.LOUIS 1997 GROUND LEASE(2035) 37.71
ST.LOUIS 1997 GROUND LEASE(2040) 16.33
ST.LOUIS 1997 FEE 17.51
ST.LOUIS 1998 FEE 17.54
ST. CHARLES (5) 1998 FEE 36.87
JOPLIN 1998 FEE 12.51
NEW HAMPSHIRE
SALEM (3) 1994 FEE 39.80
<CAPTION>
LEASABLE PERCENT MAJOR LEASE
AREA LEASED (LEASE EXPIRATION/
(SQ. FT) (1) OPTION EXPIRATION)
-------- --- ------------------
<S> <C> <C> <C>
KENTUCKY
BELLEVUE 53,695 100% KROGER(2005/2035)
PADUCAH 85,229 100% SHOPKO(2018/2038)
LEXINGTON 258,644 99% BEST BUY(2009/2024), BED BATH & BEYOND(2013/2038), TOYS R US(2013/2038)
LOUISIANA
LAFAYETTE 150,936 99% STEIN MART(2005/2020), T.J. MAXX(2003/2018), OFFICEMAX(2012/2027)
BATON ROUGE 262,256 90% STEIN MART(2006/2016), US OFFICE PRODUCTS(2002/2007), MARSHALLS(2001/2016)
BATON ROUGE 190,000 100% MERCANTILE STORES(2011/2031)
MARYLAND
WHITE MARSH 209,831 100% COSTCO(2011/2046), SPORTS AUTHORITY(2011/2021), PETSMART(2010/2030)
LAUREL 73,542 90% FOOD A RAMA(1999/2009), FACTORY CARD OUTLET(2005/2015), OLD COUNTRY BUFFET(2009/2019)
LAUREL 81,550 100% AMES(2007/2017)
HAGERSTOWN 115,718 98% AMES(2007/2017)
MASSACHUSETTS
GREAT BARRINGTON 134,817 94% KMART(2001/2016), PRICE CHOPPER(2016/2036)
LEOMINSTER 595,760 93% SEARS(2003/2033), JC PENNEY(2009/2034), BRADLEES(2009/2024)
MICHIGAN
WALKER 284,143 98% KMART(2016/2051), KOHLS(2017/2037), OFFICEMAX(2013/2033)
MUSKEGON 72,235 89% PLUMB(2002/2022), FABRI CENTER(2002/2012)
CLARKSTON 156,864 99% A&P(2015/2045), FRANKS NURSERY(2011/2031)
CLAWSON 177,797 100% A&P(2006/2016), FRANKS NURSERY(2016), STAPLES(2011/2026)
FARMINGTON 97,038 100% A&P(2001), DAMMAN HARDWARE(2002)
GRAND HAVEN 87,430 96% FAMILY FARE(2006/2026), QUALITY MATTRESS(2008)
LIVONIA 44,185 97% DAMMAN HARDWARE(2004/2014)
TAYLOR 121,364 100% KOHLS(2011/2031), DRUG EMPORIUM(2000/2020)
MINNESOTA
MINNETONKA 120,220 98% TOYS R US(2016/2031), GOLFSMITH(2008/2018), OFFICE MAX(2001/2011)
MISSOURI
SPRINGFIELD 163,530 94% KMART(2024/2054), OFFICE DEPOT(2000/2010)
SPRINGFIELD 271,552 93% BEST BUY(2011/2026), JC PENNEY(2005/2015), TJ MAXX(2006/2021)
ST. JOSEPH 90,630 --
CAPE GIRARDEAU 80,803 100% SHOPKO(2018/2038)
ST. LOUIS 163,821 81% K MART(1999/2019), WALGREENS(2006)
KANSAS CITY 147,989 100% KMART(2024/2054), PRICE CHOPPER(2001/2006)
INDEPENDENCE 159,847 83% KMART(2024/2054)
KANSAS CITY 161,538 100% HOME DEPOT(2005/2050)
JOPLIN 80,524 100% SHOPKO(2018/2038)
ST.PETERS 167,087 97% KMART(2024/2054), OFFICE DEPOT(2004/2009)
BRIDGETON 101,592 100% KOHLS(2010/2020)
CREVE COEUR 113,781 82% KOHLS(2018/2038)
ELLISVILLE 118,080 100% SHOP N SAVE(2005/2015)
HAZELWOOD 149,230 88% KMART(2000/2020), WALGREENS(2006)
JENNINGS 155,095 18% WALGREENS(2056)
KIRKWOOD 167,562 97% KMART(2024/2054), HANCOCK FABRICS(2007/2017)
LEMAY 73,281 100% SHOP N SAVE(2003/2008), ODD LOTS(1999), DOLLAR GENERAL(2003/2008)
MANCHESTER 89,305 100% KOHLS(2018/2038)
ST.LOUIS 162,901 93% KMART(2023/2024)
ST.LOUIS 164,191 98% KMART(2024/2035), OFFICE DEPOT(1999/2009)
ST.LOUIS 116,222 100% KMART(2024/2040)
ST.LOUIS 165,809 80% KMART(2024/2054)
ST.LOUIS 157,913 22% OFFICE DEPOT(1999/2009)
ST. CHARLES (5) -- --
JOPLIN 147,142 96% HASTINGS BOOKS(2004/2014), HOBBY LOBBY(2008/2013), OFFICEMAX(2010/2025)
NEW HAMPSHIRE
SALEM (3) 332,951 93% BRADLEES(2003/2013), SHAWS SUPERMARKET(2008/2038), BOB'S(2011/2021)
</TABLE>
20
<PAGE>
PROPERTY CHART
<TABLE>
<CAPTION>
YEAR OWNERSHIP
DEVELOPED INTEREST/ LAND AREA
OR ACQUIRED (EXPIRATION)(2) (ACRES)
----------- --------------- -------
<S> <C> <C> <C>
NEW JERSEY
RIDGEWOOD 1994 FEE 2.71
CINNAMINSON 1996 FEE 13.67
CHERRY HILL 1985 FEE/JOINT VENTURE 18.58
CHERRY HILL 1996 GROUND LEASE(2035) 15.20
WESTMONT 1994 FEE 17.39
NORTH BRUNSWICK 1994 FEE 38.12
PISCATAWAY 1998 FEE 9.60
BRIDGEWATER (4) 1998 FEE 74.74
PLAINFIELD 1998 FEE 16.23
FRANKLIN 1998 FEE 14.90
NEW MEXICO
ALBUQUERQUE 1998 FEE 4.70
ALBUQUERQUE 1998 FEE 26.00
ALBUQUERQUE 1998 FEE 4.77
NEW YORK
POUGHKEEPSIE 1972 FEE 20.03
HENRIETTA 1988 FEE 14.90
IRONDEQUOIT 1988 FEE 12.80
WEST GATES 1993 FEE 8.55
CARLE PLACE 1993 FEE 8.34
PLAINVIEW 1969 FEE 6.98
SYOSSET 1967 FEE 2.49
STATEN ISLAND 1989 FEE 16.70
STATEN ISLAND 1997 FEE 7.00
NANUET 1984 FEE 6.00
BRIDGEHAMPTON 1973 FEE 30.20
CENTEREACH 1993 FEE/JOINT VENTURE 40.68
COMMACK 1998 GROUND LEASE(2085)/JOINT VENTURE 35.70
COPIAGUE 1998 FEE 15.40
HAMPTON BAYS 1989 FEE 8.17
BRONX 1998 FEE/JOINT VENTURE 11.00
YONKERS 1995 FEE 4.13
NORTH CAROLINA
DURHAM 1996 FEE 13.24
WINSTON-SALEM 1969 FEE 13.15
GASTONIA 1989 FEE 24.85
GREENSBORO 1998 FEE 4.40
CHARLOTTE 1968 FEE 13.50
CHARLOTTE 1993 FEE 13.96
CHARLOTTE 1986 GROUND LEASE(2048) 14.33
CARY 1998 FEE 10.90
RALEIGH 1993 FEE 35.94
OHIO
LIMA 1986 FEE 18.13
SPRINGFIELD 1988 FEE 14.32
CLEVELAND 1975 GROUND LEASE(2035) 9.42
COLUMBUS 1998 FEE 12.13
COLUMBUS 1988 FEE 12.40
COLUMBUS 1988 FEE 13.70
COLUMBUS 1988 FEE 17.90
COLUMBUS 1988 FEE 12.40
UPPER ARLINGTON 1969 FEE 13.28
WESTERVILLE 1988/1993 FEE 25.40
WHITEHALL COLUMBUS 1967 FEE 13.80
BEAVERCREEK (3) 1986 FEE 18.19
CAMBRIDGE 1973 FEE 13.08
CINCINATTI 1988 FEE 11.60
<CAPTION>
LEASABLE PERCENT MAJOR LEASE
AREA LEASED (LEASE EXPIRATION/
(SQ. FT) (1) OPTION EXPIRATION)
-------- --- ------------------
<S> <C> <C> <C>
NEW JERSEY
RIDGEWOOD 24,280 100% WHOLE FOODS(2013/2024)
CINNAMINSON 121,084 78% AMES(2019/2034)
CHERRY HILL 121,673 75% GIANT FOOD(2016/2036)
CHERRY HILL 129,809 100% KOHLS(2016/2035), SEARS(2003/2013)
WESTMONT 195,824 68% A&P(2017/2081), SUPER FITNESS(2009)
NORTH BRUNSWICK 409,879 100% WALMART(2018/2058), BURLINGTON COAT FACTORY(2008/2013)
PISCATAWAY 97,348 96% FOODARAMA(2014/2024)
BRIDGEWATER (4) -- --
PLAINFIELD 136,939 100% A&P(2018/2058), SEARS HARDWARE(2008/2018)
FRANKLIN 138,364 100% GIANT(2010/2020), LIFESTYLES FITNESS(2006/2016)
NEW MEXICO
ALBUQUERQUE 37,735 100% SEARS(2006/2021)
ALBUQUERQUE 180,512 99% MOVIES WEST(2011/2021), ROSS STORES(2001/2021)
ALBUQUERQUE 59,723 95% PAGE ONE(2003/2013), WALGREENS(2027)
NEW YORK
POUGHKEEPSIE 180,064 86% EDWARDS(2002/2012)
HENRIETTA 123,000 15% STAPLES(2010/2022)
IRONDEQUOIT 105,000 --
WEST GATES 185,153 39% TOPS(2004/2024)
CARLE PLACE 132,318 91% HARROWS(2000), STAPLES(2010/2025), JUST FOR FEET(2011/2026)
PLAINVIEW 88,206 91% WALDBAUMS(2017/2037)
SYOSSET 32,124 16%
STATEN ISLAND 210,990 100% K MART(2001/2011), PATHMARK(2001/2021)
STATEN ISLAND 98,247 96% WALDBAUMS(2001/2031), CVS(2000/2015)
NANUET 70,829 77% RKO CENTURY THEATRES(2000/2010)
BRIDGEHAMPTON 287,632 99% KING KULLEN(2015/2035), TJ MAXX(2007/2017)
CENTEREACH 371,028 90% WALMART(2015/2044), KING KULLEN(2003/2034), MODELL'S SPORTING GOODS(2009/2019)
COMMACK 265,409 100% KING KULLEN(2017/2047), SPORTS AUTHORITY(2017/2037), TOYS R US(2023/2043)
COPIAGUE 163,999 100% HOME DEPOT(2011/2056), BALLY TOTAL FITNESS(2008/2019)
HAMPTON BAYS 70,990 100% STERNS(2005/2025), GENOVESE(2001/2016)
BRONX 225,821 96% A&P(2011), NATIONAL AMUSEMENTS(2011)
YONKERS 43,560 100% BIG V SUPERMARKET(2008/2028)
NORTH CAROLINA
DURHAM 116,169 82% TJ MAXX(2003/2013)
WINSTON-SALEM 137,929 74% KROGER(2016/2041), SPORTSMAN'S SUPPLY(2008)
GASTONIA 235,607 96% SERVICE MERCHANDISE(2003), TOYS R US(2015/2045), WINN DIXIE(2002)
GREENSBORO 41,387 100% STAPLES(2011/2031)
CHARLOTTE 110,300 94% MEDIA PLAY(2004/2019), TJX(2001/2016)
CHARLOTTE 135,269 100% BI-LO(2009/2029), MICHAELS(2003/2013), PARTY CITY(2004/2014)
CHARLOTTE 227,883 95% TOYS R US(2012/2042), DRUG EMPORIUM(2005/2015), OFFICEMAX(2009/2024)
CARY 102,787 100% LOWES FOOD(2017/2037), ECKERD(2007/2017)
RALEIGH 374,395 98% BEST BUY(2005/2020), PHAR-MOR(2010/2025), MARSHALLS(2004/2014)
OHIO
LIMA 194,130 99% RAYS SUPERMARKET(2011/2026), THE PHARM(2004/2024)
SPRINGFIELD 131,628 100% KMART(2010/2029), KROGER(2001/2007)
CLEVELAND 82,411 75% ALDIS(2003/2023)
COLUMBUS 113,184 95% BORDERS BOOKS(2018/2038), ZANY BRAINY(2007/2017)
COLUMBUS 191,089 100% KOHLS(2011/2031), KIDS R US(2015/2040)
COLUMBUS 140,993 100% KOHLS(2011/2031), STAPLES(2000/2010)
COLUMBUS 129,008 100% KOHLS(2011/2031)
COLUMBUS 135,650 100% KOHLS(2011/2031), CIRCUIT CITY(2019/2039)
UPPER ARLINGTON 153,733 89% TJ MAXX(2001/2006)
WESTERVILLE 242,124 100% KOHLS(2016/2036), OFFICEMAX(2002/2012)
WHITEHALL COLUMBUS 112,813 15%
BEAVERCREEK (3) 127,318 71% KROGER(2018/2048)
CAMBRIDGE 95,955 99% QUALITY STORES(TJX)(2000/2018), KROGER(1999/2014)
CINCINATTI 139,985 67% CIRCUIT CITY(2008/2031), BIG LOTS(2004/2009), OFFICE DEPOT(2004/2024)
</TABLE>
21
<PAGE>
PROPERTY CHART
<TABLE>
<CAPTION>
YEAR OWNERSHIP
DEVELOPED INTEREST/ LAND AREA
OR ACQUIRED (EXPIRATION)(2) (ACRES)
----------- --------------- -------
<S> <C> <C> <C>
CINCINNATI 1988 FEE 29.20
SHARONVILLE 1977 GROUND LEASE(2076)/JOINT VENTURE 14.99
MENTOR 1987 FEE 20.59
MENTOR 1988 FEE 25.00
WICKLIFFE 1995 FEE 10.00
ELYRIA 1988 FEE 8.30
BRUNSWICK 1975 FEE 20.00
CENTERVILLE 1988 FEE 15.20
DAYTON 1969 GROUND LEASE(2043) 22.82
DAYTON 1984 FEE 32.01
DAYTON 1988 FEE 16.86
KETTERING 1988 FEE 11.21
SPRINGBORO PIKE 1985 FEE 12.96
CANTON 1993 FEE 7.88
CANTON 1972 FEE 19.60
MASSILLON 1988 GROUND LEASE(2001) 13.09
AKRON 1975 FEE 6.91
BARBERTON 1972 FEE 9.97
OKLAHOMA
OKLAHOMA CITY 1997 FEE 9.64
MIDWEST CITY 1998 FEE 9.70
OKLAHOMA CITY 1998 FEE 19.80
OKLAHOMA CITY (6) 1997 GROUND LEASE(2019) 7.36
TULSA 1996 FEE 8.79
PENNSYLVANIA
GETTYSBURG 1986 FEE 2.25
DUQUESNE 1993 FEE 8.77
PENN HILLS 1986 GROUND LEASE(2027) 31.06
WEST MIFFLIN 1974 FEE 24.62
WEST MIFFLIN 1986 FEE 8.33
FEASTERVILLE 1996 FEE 4.60
MORRISVILLE (6) 1996 FEE 14.38
RICHBORO (3) 1986 FEE 14.47
WARRINGTON 1996 FEE 8.28
EXTON 1996 FEE 9.78
UPPER ALLEN 1986 FEE 6.00
HARRISBURG 1972 FEE/JOINT VENTURE 17.00
MIDDLETOWN 1973 FEE 21.86
MIDDLETOWN 1986 FEE 4.66
HAVERTOWN 1996 FEE 9.01
SPRINGFIELD 1983 FEE 19.66
UPPER DARBY 1996 FEE/JOINT VENTURE 16.34
ERIE 1968 FEE 0.57
WHITEHALL 1996 GROUND LEASE(2081) 6.00
CENTER SQUARE 1996 FEE 17.72
E STROUDSBURG 1973 FEE 15.33
EAGLEVILLE 1973 FEE 15.20
LANDSDALE 1996 GROUND LEASE(2037) 1.39
NORRISTOWN 1984 FEE 12.52
PHILADELPHIA 1997 FEE 3.40
PHILADELPHIA 1983 FEE/JOINT VENTURE 8.12
PHILADELPHIA 1995 FEE/JOINT VENTURE 22.55
PHILADELPHIA 1996 FEE 6.30
PHILADELPHIA 1996 GROUND LEASE(2035) 6.82
TREXLERTOWN 1998 GROUND LEASE(2048)/JOINT VENTURE 1.18
NEW KENSINGTON 1986 FEE 12.53
YORK 1986 FEE 8.00
YORK 1986 FEE 13.65
YORK 1986 FEE 3.32
<CAPTION>
LEASABLE PERCENT MAJOR LEASE
AREA LEASED (LEASE EXPIRATION/
(SQ. FT) (1) OPTION EXPIRATION)
-------- --- ------------------
<S> <C> <C> <C>
CINCINNATI 321,537 100% HECHINGERS(2013/2033), SERVICE MERCHANDISE(2002/2012), TOYS R US(2016/2046)
SHARONVILLE 130,715 100% KMART(2004/2054), KROGER(2003/2028)
MENTOR 103,911 100% AMES(2020/2045)
MENTOR 271,914 98% RINI SUPERMARKET(2019/2029),BURLINGTON COAT FACTORY(2014),FABRI CENTER(2009/2019)
WICKLIFFE 128,180 100% GABRIEL BROS(2008/2023), CONSOLIDATED STORES(2000)
ELYRIA 103,400 100% KMART(2010/2029)
BRUNSWICK 168,523 96% KMART(2000/2050), RINI SUPERMARKET(2001/2031)
CENTERVILLE 115,378 65% WACCAMAW(2006/2021), LASER QUEST(2007/2017)
DAYTON 163,131 54% BEST BUY(2004/2024), FABRI CENTER(2002/2012)
DAYTON 215,891 87% VICTORIA'S SECRET(2004/2019), FABRI CENTER(2006/2016), KROGER (2012/2038)
DAYTON 141,616 90% SCHOTTENSTEIN STORES(2010/2020), CIRCUIT CITY(2018/2038)
KETTERING 123,148 94% SCHOTTENSTEIN STORES(2010/2015)
SPRINGBORO PIKE 99,147 100% OFFICEMAX(2002/2022), HANCOCK FABRICS(2007/2017)
CANTON 63,712 72% CINEMARK(1999)
CANTON 161,569 80% TJ MAXX(2007/2017)
MASSILLON 102,632 100% AMES(2001)
AKRON 56,975 78% GIANT EAGLE(1999/2024), DOLLAR GENERAL(2002)
BARBERTON 119,975 100% GIANT EAGLE(2007/2012)
OKLAHOMA
OKLAHOMA CITY 96,481 100% KMART(2024/2054)
MIDWEST CITY 99,118 98% KMART(2024/2054)
OKLAHOMA CITY 233,797 93% HOME DEPOT(2014/2044), BEST BUY(2007/2022)
OKLAHOMA CITY (6) 73,600 --
TULSA 96,100 100% KMART(2021/2051)
PENNSYLVANIA
GETTYSBURG 30,706 100% GIANT FOOD(2000/2010)
DUQUESNE 69,733 100%
PENN HILLS 110,517 100% AMES(2017/2026)
WEST MIFFLIN 194,393 97% AMES(2004/2034), GIANT EAGLE(2014/2039)
WEST MIFFLIN 84,279 100% AMES(2007/2032)
FEASTERVILLE 86,575 100% VALUE CITY(2011/2026)
MORRISVILLE (6) 117,524 2%
RICHBORO (3) 109,721 100% SUPER FRESH(2018/2058)
WARRINGTON 82,338 --
EXTON 85,184 100% KOHLS(2016/2036)
UPPER ALLEN 59,470 97% GIANT FOOD(2010/2030)
HARRISBURG 175,917 100% AMES(2002/2032), MEDIA PLAY(2011/2026), SUPERPETZ(2002/2022)
MIDDLETOWN 140,481 57% ELECTRONIC INSTITUTE(1999)
MIDDLETOWN 35,747 81% US POSTAL SERVICE(2016/2026), FAMILY DOLLAR(2003/2008)
HAVERTOWN 80,938 100% KOHLS(2016/2036)
SPRINGFIELD 218,907 98% VALUE CITY(2013/2043), STAPLES(2008), JO ANN FABRICS(2006/2016)
UPPER DARBY 52,657 63% MERCY HEALTH(2012/2022)
ERIE 2,196 --
WHITEHALL 84,524 100% KOHLS(2016/2036)
CENTER SQUARE 116,055 100% KOHLS(2016/2036), SEARS(2002/2007)
E STROUDSBURG 168,218 100% KMART(2002/2022), WEIS MARKETS(2002/2012)
EAGLEVILLE 165,385 99% K MART(2004/2019), GENUARDI SUPERMARKET(2011/2025)
LANDSDALE 71,760 100% KOHLS(2012)
NORRISTOWN 134,860 100% GIANT FOOD(2017/2037), STAPLES(2008/2023), FABRI CENTER(2002/2012)
PHILADELPHIA 38,753 90% MERCY HEALTH(2012/2022)
PHILADELPHIA 214,970 100% JC PENNEY(2012/2037), TOYS R US(2002/2052)
PHILADELPHIA 274,330 96% PET FOOD GIANT(2006/2016), PEP BOYS(2004/2014)
PHILADELPHIA 82,345 100% KOHLS(2016/2036)
PHILADELPHIA 133,309 100% KMART(2010/2035)
TREXLERTOWN 50,000 63% WELLNESS PLACE(2008/2023)
NEW KENSINGTON 106,624 100% GIANT EAGLE(2006/2026)
YORK 61,979 100% SUPERPETZ(2004/2009), DISCOVERY ZONE(2005/2015)
YORK 53,011 100% GIANT FOOD(2006/2026)
YORK 35,500 100% GIANT FOOD(2002/2017), RITE AID(2002/2012)
</TABLE>
22
<PAGE>
7 PROPERTY CHART
<TABLE>
<CAPTION>
YEAR OWNERSHIP
DEVELOPED INTEREST/ LAND AREA
OR ACQUIRED (EXPIRATION)(2) (ACRES)
----------- --------------- -------
<S> <C> <C> <C>
RHODE ISLAND
CRANSTON 1998 FEE 11.02
SOUTH CAROLINA
AIKEN 1989 FEE 16.63
CHARLESTON 1978 FEE 17.60
NORTH CHARLESTON 1997 FEE 21.07
CHARLESTON 1995 FEE 17.15
FLORENCE 1997 FEE 21.00
GREENVILLE 1997 FEE 20.35
TENNESSEE
NASHVILLE 1998 FEE 10.20
CHATTANOOGA 1973 GROUND LEASE(2073) 7.63
GOODLETTSVILLE 1998 FEE 16.93
MEMPHIS 1998 FEE 14.71
MADISON 1978 GROUND LEASE(2039) 14.49
TEXAS
PLANO 1996 FEE 9.03
DALLAS 1969 FEE/JOINT VENTURE 75.00
DALLAS 1998 FEE 6.80
DUNCANVILLE 1996 FEE 6.80
GARLAND 1998 FEE 6.30
GARLAND 1996 FEE 2.89
GARLAND 1996 FEE 8.83
MESQUITE 1974 FEE 9.03
MESQUITE 1998 FEE 15.00
RICHARDSON 1998 FEE 11.70
LEWISVILLE 1998 FEE 11.20
LEWISVILLE 1998 FEE 3.80
BAYTOWN 1996 FEE 8.68
HOUSTON 1973 FEE 4.25
HOUSTON 1998 FEE 40.00
HOUSTON (4) 1998 FEE/JOINT VENTURE 46.50
HOUSTON 1997 FEE 8.04
HOUSTON 1996 FEE 8.75
HOUSTON 1997 FEE 8.17
WEST OAKS 1996 FEE 8.18
LUBBOCK 1998 FEE 9.58
CORSICANA 1997 FEE 10.25
AUSTIN 1998 FEE 15.10
AMARILLO 1997 FEE 9.30
ARLINGTON 1997 GROUND LEASE(2043) 8.00
ARLINGTON 1996 FEE 8.04
FT. WORTH 1996 FEE 12.59
NORTH RICHLAND HILLS(5) 1997 FEE 9.17
LEWISVILLE 1998 FEE 3.80
CEDAR HILL (4) 1998 FEE 23.25
AUSTIN 1998 FEE 18.20
UTAH
OGDEN 1967 FEE 11.36
VIRGINIA
FAIRFAX 1998 FEE 37.00
RICHMOND 1995 FEE 11.47
MANASSAS 1997 FEE 13.50
WOODBRIDGE 1973 GROUND LEASE(2072)/JOINT VENTURE 19.63
WOODBRIDGE 1998 FEE 54.00
WASHINGTON
BELLINGHAM 1998 FEE 20.00
<CAPTION>
LEASABLE PERCENT MAJOR LEASE
AREA LEASED (LEASE EXPIRATION/
(SQ. FT) (1) OPTION EXPIRATION)
-------- --- ------------------
<S> <C> <C> <C>
RHODE ISLAND
CRANSTON 129,907 100.0% BOB'S(2003/2028), MARSHALLS(2001/2021)
SOUTH CAROLINA
AIKEN 132,345 69% WALMART(2002/2032)
CHARLESTON 166,855 84% STEIN MART(2001/2016)
NORTH CHARLESTON 204,662 96% PHAR-MOR(2000/2010), TJ MAXX(2003/2008)
CHARLESTON 186,096 93% TJ MAXX (1999/2004), OFFICE DEPOT(2001/2016), BARNES & NOBLE(2014/2029)
FLORENCE 113,922 100% HAMRICK'S(2001/2011), STAPLES(2010/2035), ATHLETE'S FOOT(2007/2017)
GREENVILLE 148,612 100% PHAR-MOR(2005/2020), BABIES R US(2002/2022)
TENNESSEE
NASHVILLE 109,012 100% MARSHALLS(2000/2005), OFFICEMAX(2004/2019), OLD COUNTRY BUFFET(2006/2017)
CHATTANOOGA 44,288 66%
GOODLETTSVILLE 171,236 99% UPTONS DEPARTMENT STORE(2006/2016), STEIN MART(2003/2013), FACTORY CARD(2008/2018)
MEMPHIS 167,283 98% TOYS R US(2017/2042), OFFICEMAX(2008/2028), JUST FOR FEET(2015/2025)
MADISON 182,256 100% OLD TIME POTTERY(2001/2006), HOLLYWOOD ENTERTAINMENT(2008/2014)
TEXAS
PLANO 97,260 100% HOME DEPOT(2024/2054)
DALLAS 566,826 54% MONTGOMERY WARD(2000/2015)
DALLAS 83,867 90% ROSS STORES(2007/2017), OFFICEMAX(2009/2024)
DUNCANVILLE 96,500 100% KMART(2021/2051)
GARLAND 62,000 100% OFFICE DEPOT(2001/2021), DRUG EMPORIUM(2006), BLOCKBUSTER(2001/2021)
GARLAND 41,364 100% KROGER(2000/2025)
GARLAND 103,600 100% KMART(2021/2051)
MESQUITE 79,550 100% KROGER(2012/2037)
MESQUITE 209,580 100% BEST BUY(2009/2024), SEARS(2001/2026), PETSMART(2007/2027)
RICHARDSON 115,579 100% OFFICEMAX(2011/2026), BALLY TOTAL FITNESS(2009/2019)
LEWISVILLE 74,890 98% BALLY'S(2007/2022), TALBOT'S(2007/2017)
LEWISVILLE 124,104 100% HOMEPLACE(2012/2027), BABIES R US(2009/2027)
BAYTOWN 103,800 54% HOBBY LOBBY(2008/2018)
HOUSTON 45,494 100% KROGER(2002/2012)
HOUSTON 426,097 100% KMART (2012/2032), BED BATH & BEYOND(2009/2019)
HOUSTON (4) 3,500 100%
HOUSTON 113,831 90% HEB GROCERY(2007/2027), PALAIS ROYAL(2007/2022), CATO(2004/2009)
HOUSTON 106,000 100% KMART(2021/2051)
HOUSTON 106,295 100% HOME DEPOT(2024/2054)
WEST OAKS 96,500 100% KMART(2021/2051)
LUBBOCK 108,326 100% PETSMART(2015/2040), OFFICEMAX(2009/2029), BARNES & NOBLE(2010/2025)
CORSICANA 350,000 --
AUSTIN 153,325 96% HEB GROCERY(2006/2026)
AMARILLO 342,859 96% BUILDERS SQUARE(2019/2064), KMART(2024/2054), CIRCUIT CITY(2010/2035)
ARLINGTON 96,127 100% HOBBY LOBBY(2008/2018)
ARLINGTON 97,000 100% KMART(2021/2051)
FT. WORTH 106,000 100% KMART(2021/2051)
NORTH RICHLAND HILLS(5) -- --
LEWISVILLE 93,668 100% DRUG EMPORIUM(2013/2028), DESIGNER SHOE(2008/2028)
CEDAR HILL (4) -- --
AUSTIN 192,010 99% CIRCUIT CITY(2017/2037), BABIES R US(2012/2027)
UTAH
OGDEN 121,449 99% KMART(2002)
VIRGINIA
FAIRFAX 323,262 100% HOME DEPOT(2013/2033), COSTCO(2011/2046), SPORTS AUTHORITY(2003/2013)
RICHMOND 121,550 100% BURLINGTON COAT FACTORY(2006/2035)
MANASSAS 117,525 87% SUPERFRESH(2006/2026)
WOODBRIDGE 186,142 66% AMES(2000/2020), ALDI'S(2023)
WOODBRIDGE 481,740 97% LOWE'S(2012/2032), SHOPPERS FOOD WAREHOUSE(2009/2044), BEST BUY(2010/2025)
WASHINGTON
BELLINGHAM 174,547 100% FEDERATED(2012/2022), TJ MAXX(2001/2011)
</TABLE>
23
<PAGE>
PROPERTY CHART
<TABLE>
<CAPTION>
YEAR OWNERSHIP
DEVELOPED INTEREST/ LAND AREA
OR ACQUIRED (EXPIRATION)(2) (ACRES)
----------- --------------- -------
<S> <C> <C> <C>
WISC0NSIN
RACINE 1988 FEE 14.20
WEST VIRGINIA
MARTINSBURG 1986 FEE 6.04
CHARLES TOWN 1985 FEE 22.00
--------
TOTAL 375 PROPERTY INTERESTS 5,506.57
========
ACQUISITIONS SUBSEQUENT TO DECEMBER 31,1998
ARIZONA
CHANDLER (4) 1999 FEE 16.50
CALIFORNIA
TEMECULA 1999 FEE 40.00
SAN RAMON 1999 FEE 5.30
ILLINOIS
DOWNERS GROVE 1999 FEE 24.76
TEXAS
HOUSTON 1999 FEE 5.59
SAN ANTONIO (4) 1999 FEE 170.00
WEST VIRGINIA
SOUTH CHARLESTON 1999 FEE 14.75
DISPOSITIONS SUBSEQUENT TO DECEMBER 31, 1998
OKLAHOMA
OKLAHOMA CITY 1997 GROUND LEASE(2019) (7.36) (73,600)
PENNSYLVANIA
MORRISVILLE 1996 FEE (14.38) (117,524)
5,761.73 51,804,112
-------- -------------
RETAIL STORE LEASES (7) 1995/97 LEASEHOLD 5,419,977
-------------
GRAND TOTAL 440 PROPERTY INTERESTS 57,224,089
-------------
<CAPTION>
LEASABLE
AREA
(SQ. FT)
--------
<S> <C> <C> <C>
WISC0NSIN
RACINE 158,930 82% PIGGLY WIGGLY(1999/2010), CONSOLIDATED STORES(2000/2005),
HEILIG-MEYERS(2007/2017)
WEST VIRGINIA
MARTINSBURG 43,212 100% GIANT FOOD(2010/2030), CVS(2003/2009)
CHARLES TOWN 201,208 98% WALMART(2017/2047), STAPLES(2008/2018)
---------- ----
TOTAL 375 PROPERTY INT 51,195,757 90%
========== ====
ACQUISITIONS SUBSEQUENT TO DECEMBER 31, 1998
ARIZONA
CHANDLER (4) -- --
CALIFORNIA
TEMECULA 339,966 98% K MART(2017/2032), FOOD 4 LESS(2010/2030), TJ MAXX(2000/2010)
SAN RAMON 42,066 100% SUPER CROWN BOOKS(2004/2014)
ILLINOIS
DOWNERS GROVE 144,670 92% DOMINICK'S(2004/2019), WALGREENS(2007/2022)
TEXAS
HOUSTON 84,188 100% OFFICE DEPOT(2002/2012), METROPOLITAN FURNITURE(2013/2023),
JUST FOR FEET(2013/2023)
SAN ANTONIO (4) --
WEST VIRGINIA
SOUTH CHARLESTON 188,589 98% KROGER(2008/2038), TJ MAXX(2006/2022)
DISPOSITIONS SUBSEQUENT TO DECEMBER 31, 1998
OKLAHOMA
OKLAHOMA CITY (73,600)
PENNSYLVANIA
MORRISVILLE (117,524)
51,804,112
-----------
RETAIL STORE LEASES(7) 5,419,977 93% VARIOUS
----------
GRAND TOTAL 440
PROPERTY INTERESTS 57,224,089
=========-
</TABLE>
(1) PERCENT LEASED INFORMATION AS OF DECEMBER 31, 1998 OR DATE OF ACQUISITION
IF ACQUIRED SUBSEQUENT TO DECEMBER 31, 1998.
(2) THE TERM "JOINT VENTURE" INDICATES THAT THE COMPANY OWNS THE PROPERTY IN
CONJUNCTION WITH ONE OR MORE JOINT VENTURE PARTNERS. THE DATE INDICATED IS
THE EXPIRATION DATE OF ANY GROUND LEASE AFTER GIVING AFFECT TO ALL RENEWAL
PERIODS.
(3) DENOTES REDEVELOPMENT PROJECT
(4) DENOTES GROUND-UP DEVELOPMENT PROJECT
(5) DENOTES UNDEVELOPED LAND
(6) SOLD OR TERMINATED SUBSEQUENT TO DECEMBER 31, 1998
(7) THE COMPANY HOLDS INTEREST IN VARIOUS RETAIL STORE LEASES RELATED TO THE
ANCHOR STORE PREMISES IN NEIGHBORHOOD AND COMMUNITY SHOPPING CENTERS.
24
<PAGE>
Executive Officers of the Registrant
The following table sets forth information with respect to the ten executive
officers of the Company as of March 1, 1999.
Name Age Position Since
Milton Cooper 70 Chairman of the Board of 1991
Directors and Chief
Executive Officer
Michael J. Flynn 63 Vice Chairman of the 1996
Board of Directors and
President and Chief 1997
Operating Officer
Joseph K. Kornwasser 51 Director and 1998
Senior Executive
Vice President
Glenn G. Cohen 35 Treasurer 1997
Joseph V. Denis 47 Vice President - 1993
Construction
Jerald Friedman 54 Executive Vice President 1998
Bruce M. Kauderer 52 Vice President - Legal 1995
General Counsel and 1997
Secretary
Lawrence Kronenberg 42 Vice President 1998
Michael V. Pappagallo 40 Vice President - 1997
Chief Financial Officer
Alex Weiss 41 Vice President - 1988
Management Information
Systems
Michael J. Flynn has been President and Chief Operating Officer since January 2,
1997, Vice Chairman of the Board of Directors since January 2, 1996 and a
Director of the Company since December 1, 1991. Mr. Flynn was Chairman of the
Board and President of Slattery Associates, Inc. for more than five years prior
to joining the Company.
Joseph K. Kornwasser has been a Director and Senior Executive Vice President
of the Company since June 1998. Mr. Kornwasser was President, Chief Executive
Officer and a director of Price REIT from August 1993 to June 1998. From 1984
until 1994, Mr. Kornwasser was Managing General Partner of Kornwasser and
Friedman Shopping Center Properties, a commercial real estate development
company.
Glenn G. Cohen has been Treasurer of the Company since June 1997. Mr. Cohen
served as Director of Accounting and Taxation of the Company from June 1995 to
June 1997. Prior to joining the Company in June 1995, Mr. Cohen served as Chief
Operating Officer and Chief Financial Officer for U.S. Balloon Manufacturing
Co., Inc. from August 1993 to June 1995.
Joseph V. Denis has been a Vice President of the Company since October 1993.
Mr. Denis was President and Chief Operating Officer of Konover Construction
Company, and previously held various positions with such company as a project
and construction manager, for more than five years prior to joining the
Company in June 1993.
Jerald Friedman has been Executive Vice President of the Company since June
1998. Mr. Friedman was Senior Executive Vice President and Chief Operating
Officer of Price REIT from January 1, 1997 to June 1998. From 1994 through
1996, Mr. Friedman was the Chairman and Chief Executive Officer of K & F
Development Company, an affiliate of Price REIT. From 1984 until 1994, Mr.
Friedman was a General Partner of Kornwasser and Friedman Shopping Center
Properties, a commercial real estate development company.
25
<PAGE>
Bruce M. Kauderer has been a Vice President of the Company since June 1995 and
since December 15, 1997, General Counsel and Secretary of the Company. Mr.
Kauderer was a founder of and partner with Kauderer & Pack P.C. from 1992 to
June 1995 and a Partner with Fink Weinberger, P.C. for more than five years
prior to 1992.
Lawrence Kronenberg has been a Vice President of the Company since June 1998.
Mr. Kronenberg had served as Executive Vice President, Finance of Price REIT
from January 1,1997 to June 1998. From 1993 through 1996, Mr. Kronenberg
served as Executive Vice President and Chief Financial Officer of K & F
Development Company, an affiliate of Price REIT.
Michael V. Pappagallo has been a Vice President and Chief Financial Officer of
the Company since May 27, 1997. Mr. Pappagallo was Chief Financial Officer of
GE Capital's Commercial Real Estate Financial and Services business from
September 1994 to May 1997 and held various other positions within GE Capital
for more than five years prior to joining the Company.
The executive officers of the Company serve in their respective capacities for
approximate one-year terms and are subject to re-election by the Board of
Directors, generally at the time of the Annual Meeting of the Board of
Directors following the Annual Meeting of Stockholders.
26
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related Shareholder
Matters
Market Information The following table sets forth the common stock offerings
completed by the Company during the three year period ended December 31, 1998.
The Company's common stock was sold for cash at the following offering prices
per share.
Offering Date Offering Price(s)
February 1996 $26.50
September 1997 $35.50
April 1998 (4 Offerings) $36.0625, $36.025, $36.25
and $36.625, respectively
May 1998 $38.4375
July 1998 (3 Offerings) $38.2575, $38.56 and
$39.4375, respectively
September 1998 $38.75
November 1998 (4 offerings) $39.00, $39.00, $39.6875
and $39.6875, respectively
December 1998 (3 offerings) $38.25 for each offering
The table below sets forth, for the quarterly periods indicated, the high and
low sales prices per share reported on the NYSE Composite Tape for the
Company's common stock. The Company's common stock is traded under the trading
symbol "KIM ".
Stock Price
Period High Low
1997:
First Quarter $34.63 $31.75
Second Quarter $33.38 $30.25
Third Quarter $36.19 $31.75
Fourth Quarter $35.50 $30.50
1998:
First Quarter $35.94 $33.44
Second Quarter $41.00 $34.88
Third Quarter $41.63 $34.75
Fourth Quarter $40.25 $33.75
Holders The approximate number of holders of record of the Company's common
stock, par value $.01 per share, was 1,552 as of March 1, 1999.
Dividends Since the IPO, the Company has paid regular quarterly dividends to
its stockholders.
Quarterly dividends at the rate of $.43 per share were declared and paid on
December 2, 1996 and January 15, 1997, March 17, 1997 and April 15, 1997, June
16, 1997 and July 15, 1997 and September 15, 1997 and October 15, 1997,
respectively. Quarterly dividends at the increased rate of $.48 per share were
declared and paid on December 1, 1997 and January 15, 1998 and March 16, 1998
and April 15, 1998, respectively. On May 21, 1998 and June 22, 1998 the
Company declared a dividend of $.42 per share and $.06 per share,
respectively. These dividends were paid on July 2, 1998 and July 15, 1998,
respectively. The dividends for this quarter were paid in two installments in
order to provide Kimco shareholders the full $.48 per share dividend as well
as provide the Price REIT shareholders a pro-rated dividend for the period
following the effective date of the Merger. The Company declared and paid a
dividend of $.48 per share on September 15, 1998 and October 15, 1998,
respectively. In addition, the Company declared and paid a special $.05 per
share dividend on October 29, 1998 and December 1, 1998, respectively. Also on
October 29, 1998, the Company declared its dividend payable during the first
quarter of 1999 at the increased rate of $.57 per share payable January 15,
1999 to shareholders of record January 4, 1999. This $.57 per share dividend,
if annualized, would equal $2.28 per share or an annual yield of approximately
5.9% based on the closing price of $38.75 of the Company's common stock on the
NYSE as of March 1, 1999.
27
<PAGE>
The Company has determined that 100% of the dividends paid during 1998 and
1997 totaling $1.97 and $1.72 per share, respectively, represented ordinary
dividend income to its stockholders.
While the Company intends to continue paying regular quarterly dividends,
future dividend declarations will be at the discretion of the Board of
Directors and will depend on the actual cash flow of the Company, its
financial condition, capital requirements, the annual distribution
requirements under the REIT provisions of the Code and such other factors as
the Board of Directors deems relevant. The actual cash flow available to pay
dividends will be affected by a number of factors, including the revenues
received from rental properties, the operating expenses of the Company, the
interest expense on its borrowings, the ability of lessees to meet their
obligations to the Company and any unanticipated capital expenditures.
In addition to its common stock offerings, the Company has capitalized the
growth in its business through the issuance of unsecured fixed and
floating-rate medium-term notes, underwritten bonds, mortgage debt,
convertible preferred stock and perpetual preferred stock. Borrowings under
the Company's revolving credit facility have also been an interim source of
funds to both finance the purchase of properties and meet any short-term
working capital requirements. The various instruments governing the Company's
issuance of its unsecured public debt, bank debt, mortgage debt and preferred
stock impose certain restrictions on the Company with regard to dividends,
voting, liquidation and other preferential rights available to the holders of
such instruments. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Notes 7 and 12 of the Notes to
Consolidated Financial Statements included in this annual report on Form 10-K.
The Company does not believe that the preferential rights available to the
holders of its Class A, Class B, Class C and Class D Preferred Stock, the
financial covenants contained in its public bond Indenture, as amended, or its
revolving credit agreement will have any adverse impact on the Company's
ability to pay dividends in the normal course to its common stockholders or to
distribute amounts necessary to maintain its qualification as a REIT.
The Company maintains a dividend reinvestment program pursuant to which common
and preferred stockholders may elect to automatically reinvest their dividends
to purchase shares of the Company's common stock. The Company may, from time
to time, either (i) repurchase shares of its common stock in the open market,
or (ii) issue new shares of its common stock, for the purpose of fulfilling
its obligations under this dividend reinvestment program.
Item 6. Selected Financial Data
The following table sets forth selected, historical consolidated financial
data for the Company and should be read in conjunction with the Consolidated
Financial Statements of the Company and Notes thereto included in this annual
report on Form 10-K.
The Company believes that the book value of its real estate assets, which
reflects the historical costs of such real estate assets less accumulated
depreciation, is not indicative of the current market value of its properties.
Historical operating results are not necessarily indicative of future
operating performance.
28
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Operating Data:
Revenues from rental property (1) $ 338,798 $ 198,929 $ 168,144 $ 143,132 $ 125,272
Depreciation and amortization $ 51,348 $ 30,053 $ 27,067 $ 26,188 $ 23,478
Income before extraordinary items $ 127,166(3) $ 85,836(3) $ 73,827(3) $ 51,922 $ 41,071
Income per common share, before extraordinary
items:
Basic $ 2.05(3) $ 1.80(3) $ 1.61(3) $ 1.33 $ 1.17
Diluted $ 2.02(3) $ 1.78(3) $ 1.59(3) $ 1.32 $ 1.16
Interest expense $ 64,912 $ 31,745 $ 27,019 $ 25,585 $ 20,483
Weighted average number of shares of common stock
outstanding:
Basic 50,071 37,388 35,906 33,388 30,072
Diluted 50,641 37,850 36,219 33,633 30,264
Cash dividends per common share $ 1.97 $ 1.72 $ 1.56 $ 1.44 $ 1.33
December 31,
------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Balance Sheet Data:
Real estate, before accumulated depreciation $3,023,902(4) $1,404,196(4) $1,072,056(4) $932,390(4) $796,611
Total assets $3,051,178 $1,343,890 $1,023,033 $884,242 $736,709
Total debt $1,289,561 $531,614 $364,655 $389,223 $372,999
Other data:
Year ended December 31,
------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Funds from Operations (2):
Net Income $122,266 $85,836 $73,827 $51,922 $40,247
Depreciation and amortization 51,348 30,053 27,067 26,188 23,478
(Gain) loss on sales of properties and early
repayment of mortgage debt 3,999 (244) (802) (370) 824
Preferred stock dividends (24,654) (18,438) (16,134) (7,631) (5,812
Other 788 976 1,148 2,019 901
---------- ---------- --------- --------- ---------
Funds from Operations $153,747 $98,183 $85,106 $72,128 $59,638
========== ========== ========= ========= =========
Cash flow provided by operations $158,706 $125,108 $101,892 $74,233 $62,933
Cash flow used for investing activities ($630,229) ($280,823) ($144,027) ($127,261) ($142,183
Cash flow provided by financing activities $484,465 $149,269 $63,395 $58,248 $37,047
</TABLE>
(1) Does not include revenues from rental property relating to unconsolidated
joint ventures or revenues relating to the investment in retail store leases.
(2) Most industry analysts and equity REITs, including the Company, generally
consider funds from operations ("FFO") to be an appropriate supplemental
measure of the performance of an equity REIT. In March 1995, the National
Association of Real Estate Investment Trusts ("NAREIT") modified the
definition of FFO, among other things, to eliminate adding back amortization
of deferred financing costs and depreciation of non-real estate items to net
income when computing FFO. The Company adopted this new method as of January
1, 1996. FFO is defined as net income applicable to common shares before
depreciation and amortization, extraordinary items, gains or losses on sales
of real estate, plus FFO of unconsolidated joint ventures determined on a
consistent basis. FFO does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and
therefore should not be considered an alternative for net income as a measure
of results of operations, or for cash flows from operations calculated in
accordance with generally accepted accounting principles as a measure of
liquidity. In addition, the comparability of the Company's FFO with the FFO
reported by other REITs may be affected by the differences that may exist
regarding certain accounting policies relating to expenditures for repairs and
other recurring items.
(3) Includes $.9 million or $0.02 per share in 1998, $.2 million or $0.01 per
share in 1997 and $.8 million or $0.02 per share in 1996 relating to
non-recurring gains from the disposition of shopping center properties in each
year.
(4) Does not include the Company's investment in retail store leases.
29
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion should be read in conjunction with the Consolidated
Financial Statements and Notes thereto included in this annual report on Form
10-K. Historical results and percentage relationships set forth in the
Consolidated Statements of Income contained in the Consolidated Financial
Statements, including trends which might appear, should not be taken as
indicative of future operations.
Results of Operations
Comparison 1998 to 1997
Revenues from rental property increased approximately $139.9 million, or 70.3%
to $338.8 million for the year ended December 31, 1998, as compared with
$198.9 million for the year ended December 31, 1997. This increase resulted
primarily from the combined effect of (i) the acquisition of 62 shopping
center properties and 3 retail properties during 1998 providing revenues from
rental property of $35.5 million,(ii) the full year impact related to the 63
property interests acquired in 1997 providing incremental revenues of $42.1
million, (iii) the acquisition of the Price REIT as of June 19, 1998 (the
"Price REIT Acquisition") providing revenues of $52.9 million and (iv) new
leasing, re-tenanting and completion of certain property redevelopments within
the portfolio providing improved rental rates.
Rental property expenses, including depreciation and amortization, increased
approximately $92.3 million, or 80.1%, to $207.5 million for the year ended
December 31, 1998, as compared with $115.2 million for the preceding calendar
year. The rental property expense components of rent, real estate taxes and
depreciation and amortization increased $7.7 million, $19.1 million and $21.3
million, respectively, for the year ended December 31, 1998 as compared to the
preceding year. These rental property expense increases are primarily due to
the 62 shopping center properties and 3 retail properties acquired during
1998, the Price REIT Acquisition and the incremental costs related to the 63
property interests acquired during 1997. Interest expense increased
approximately $33.2 million between the respective periods reflecting higher
average outstanding borrowings during calendar year 1998 resulting from (i)
the issuance of an aggregate $290 million unsecured medium-term notes during
1998, (ii) the assumption of approximately $49.2 million of mortgage debt in
connection with the acquisition of certain property interests during 1998, as
compared to the preceding year, (iii) the aggregate of $281.3 million of
mortgage financing obtained in 1998 in connection with 22 property interests
and (iv) the assumption of approximately $250 million of unsecured debt and
$60 million of mortgage debt in connection with the Price REIT Acquisition.
These increased borrowings were offset, in part, by the July 1998 repayment of
$50 million medium-term notes which matured and the repayment of approximately
$79.2 million of mortgage debt during 1998.
The Company has interests in various retail store leases relating to the
anchor store premises in neighborhood and community shopping centers. These
premises have been substantially sublet to retailers which lease the stores
pursuant to net lease agreements. Income from the investment in retail store
leases during the years ended December 31, 1998 and 1997 was $3.7 million and
$3.6 million, respectively.
General and administrative expenses increased approximately $6.9 million to
$18.6 million for the year ended December 31, 1998, as compared to $11.7
million for the preceding calendar year. The increase during 1998 is due
primarily to an increase in senior management and staff levels and other
personnel costs in connection with the growth of the Company, including
approximately $3.0 million attributable to the Price REIT Acquisition.
During 1998, the Company disposed of a property in Pinellas Park, FL. Cash
proceeds from the disposition totaling $2.3 million, together with an
additional $7.1 million cash investment, were used to acquire an exchange
shopping center property located in Cranston, RI.
Additionally, during December 1998, the Company disposed of a vacant
distribution center and adjacent facility located in O'Fallon, Missouri, which
were acquired as part of the Venture transactions, for $10 million, which
amount approximated their net book value.
During 1998, the Company prepaid certain mortgage loans resulting in
extraordinary charges of approximately $4.9 million, or on a per-basic share
and diluted share basis, $.10 and $.09, respectively, representing the
premiums paid and other costs written-off in connection with the early
satisfaction of these mortgage loans.
30
<PAGE>
Net income for the year ended December 31, 1998 of approximately $122.3
million represented a substantial improvement of approximately $36.5 million,
as compared with net income of approximately $85.8 million for the preceding
calendar year. After adjusting for the gains on the sale of shopping center
properties during both periods and the extraordinary loss during 1998, net
income for 1998 increased by $40.7 million, or $.24 per basic share, compared
to 1997. This substantially improved performance was primarily attributable to
the Company's strong property acquisition program, the Price REIT Acquisition
and internal growth from redevelopments, re-tenanting of the Venture portfolio
and increased leasing activity which strengthened operating profitability.
Results of Operations
Comparison of 1997 to 1996
Revenues from rental property increased approximately $30.8 million, or 18.3%
to $198.9 million for the year ended December 31, 1997, as compared with
$168.1 million for the year ended December 31, 1996. This increase resulted
primarily from the combined effect of (i) the acquisition of 63 property
interests during 1997 providing revenues from rental property of $20.1
million, (ii) the full year impact related to the 39 property interests
acquired in 1996 and (iii) new leasing and re-tenanting within the portfolio
at improved rental rates providing an increase in the overall occupancy level
from 87% at December 31, 1996 to 90% at December 31, 1997.
Rental property expenses, including depreciation and amortization, increased
approximately $18.2 million, or 18.8%, to $115.2 million for the year ended
December 31, 1997, as compared with $97.0 million for the preceding calendar
year. Rent, real estate taxes and depreciation and amortization charges
contributed significantly to this net increase in rental property expenses
(increasing $3.5 million, $6.5 million and $3.0 million, respectively, for the
year ended December 31, 1997 as compared to the preceding year) primarily due
to the 63 property interests acquired during 1997 and the 39 property
interests acquired during 1996. Interest expense increased approximately $4.7
million between the respective periods reflecting higher average outstanding
borrowings during calendar year 1997 resulting from (i) the issuance of an
aggregate $100 million unsecured medium-term notes during 1997 and (ii) the
assumption of approximately $73.2 million of mortgage debt in connection with
the acquisition of certain property interests during 1997, as compared to the
preceding year.
The Company has interests in various retail store leases relating to the
anchor store premises in neighborhood and community shopping centers. These
premises have been substantially sublet to retailers which lease the stores
pursuant to net lease agreements. Income from the investment in retail store
leases during the years ended December 31, 1997 and 1996 was $3.6 million in
each year.
General and administrative expenses increased approximately $1.3 million to
$11.6 million for the year ended December 31, 1997, as compared to $10.3
million for the preceding calendar year. This increase is primarily
attributable to increased senior management and staff levels during 1997 and
1996.
During 1997, the Company disposed of a property in Troy, OH. Cash proceeds
from the disposition totaling $1.6 million, together with an additional $8.3
million cash investment, were used to acquire an exchange shopping center
property located in Ocala, FL.
Net income for the year ended December 31, 1997 of approximately $85.8 million
represented an improvement of approximately $12.0 million, as compared with
net income of approximately $73.8 million for the preceding calendar year.
After adjusting for the gains on the sale of shopping center properties during
both periods, net income for 1997 increased by $12.6 million, or $.20 per
basic share, compared to 1996. This substantially improved performance was
primarily attributable to property acquisitions and redevelopments and
increased leasing activity which strengthened operating profitability.
Liquidity and Capital Resources Since the completion of the Company's IPO in
1991, the Company has utilized the public debt and equity markets as its
principal source of capital. Since the IPO, the Company has completed
additional offerings of its public unsecured debt and equity, raising in the
aggregate over $1.9 billion for the purposes of repaying indebtedness,
acquiring interests in neighborhood and community shopping centers and for
expanding and improving properties in the portfolio.
31
<PAGE>
During August 1998, the Company established a $215 million, unsecured
revolving credit facility, which is scheduled to expire in August 2001. This
credit facility, which replaced both the Company's $100 million unsecured
revolving credit facility and $150 million interim credit facility, has made
available funds to both finance the purchase of properties and meet any
short-term working capital requirements. As of December 31, 1998 there were no
borrowings outstanding under the Company's revolving credit facility.
The Company has also implemented a $200 million MTN program pursuant to which
it may from time to time offer for sale its senior unsecured debt for any
general corporate purposes, including (i) funding specific liquidity
requirements in its business, including property acquisitions, development and
redevelopment costs and (ii) managing the Company's debt maturities. (See Note
7 of the Notes to Consolidated Financial Statements included in this annual
report on Form 10-K.)
In addition to the public equity and debt markets as capital sources, the
Company may, from time to time, obtain mortgage financing on selected
properties. As of December 31, 1998, the Company had over 300 unencumbered
property interests in its portfolio.
During 1998, the Company filed a shelf registration on Form S-3 for up to $750
million of debt securities, preferred stock, depositary shares, common stock
and common stock warrants. As of March 1, 1999, the Company had approximately
$493.2 million available for issuance under this shelf registration statement.
In connection with its intention to continue to qualify as a REIT for Federal
income tax purposes, the Company expects to continue paying regular dividends
to its stockholders. These dividends will be paid from operating cash flows
which are expected to increase due to property acquisitions and growth in
rental revenues in the existing portfolio and from other sources. Since cash
used to pay dividends reduces amounts available for capital investment, the
Company generally intends to maintain a conservative dividend payout ratio,
reserving such amounts as it considers necessary for the expansion and
renovation of shopping centers in its portfolio, debt reduction, the
acquisition of interests in new properties as suitable opportunities arise,
and such other factors as the Board of Directors considers appropriate.
Cash dividends paid increased to $113.9 million in 1998, compared to $82.6
million in 1997 and $69.8 million in 1996. The Company's dividend payout
ratio, based on funds from operations on a per-basic common share basis, for
1998, 1997 and 1996 was approximately 64.2%, 65.4% and 65.8%, respectively.
Although the Company receives substantially all of its rental payments on a
monthly basis, it generally intends to continue paying dividends quarterly.
Amounts accumulated in advance of each quarterly distribution will be invested
by the Company in short-term money market or other suitable instruments.
The Company anticipates its capital commitment toward ground-up development
and redevelopment projects during 1999 will be approximately $150 million. It
is management's intention that the Company continually have access to the
capital resources necessary to expand and develop its business. Accordingly,
the Company may seek to obtain funds through additional equity offerings,
unsecured debt financings and/or mortgage financings in a manner consistent
with its intention to operate with a conservative debt capitalization policy.
The Company anticipates that cash flows from operations will continue to
provide adequate capital to fund its operating and administrative expenses,
regular debt service obligations and all dividend payments in accordance with
REIT requirements in both the short-term and long-term. In addition, the
Company anticipates that cash on hand, borrowings under its revolving credit
facility, issuance of equity and public debt, as well as other debt and equity
alternatives, will provide the necessary capital required by the Company. Cash
flows from operations as reported in the Consolidated Statements of Cash Flows
increased to $158.7 million for 1998 from $125.1 million for 1997 and $101.9
million for 1996.
32
<PAGE>
Effects of Inflation Many of the Company's leases contain provisions designed
to mitigate the adverse impact of inflation. Such provisions include clauses
enabling the Company to receive Percentage Rents, which generally increase as
prices rise, and/or escalation clauses, which generally increase rental rates
during the terms of the leases. Such escalation clauses include increases in
the consumer price index or similar inflation indices. In addition, many of
the Company's leases are for terms of less than 10 years, which permits the
Company to seek to increase rents upon renewal to market rates. Most of the
Company's leases require the tenant to pay an allocable share of operating
expenses, including common area maintenance costs, real estate taxes and
insurance, thereby reducing the Company's exposure to increases in costs and
operating expenses resulting from inflation. The Company periodically
evaluates its exposure to short-term interest rates and will, from time to
time, enter into interest rate protection agreements which mitigate, but do
not eliminate, the effect of changes in interest rates on its floating-rate
debt.
Year 2000 Issue
Like most corporations, the Company depends upon its business and technical
information systems in operating its business. Many computer systems process
dates using two digits to identify the year, and some systems are unable to
properly process dates beginning with the year 2000. This problem is commonly
referred to as the "Year 2000" issue.
The Company has completed the assessment phase of its systems as to Year 2000
compliance and functionality. The Company has substantially completed the
identification and review of computer hardware and software suppliers and is
currently verifying the Year 2000 compliance of third-party suppliers, vendors
and service providers that the Company has deemed important to the ongoing
operations of the business. The Company has substantially completed the
modification of its software applications and is in the final phase of
testing. The Company anticipates our systems, including hardware and software,
will be Year 2000 compliant by the end of the second quarter of 1999.
The total costs to date related to the Year 2000 issue have been immaterial to
our operations. These costs have been expensed as incurred and consist
primarily of internal staff costs and other related expenses. We do not
believe that the remaining costs expected to be incurred in addressing the
Year 2000 issue will have a material adverse effect on our financial
conditions or results of operation.
Based upon the substantial progress made to date, the Company does not
anticipate delays in finalizing internal Year 2000 compliance issues. However,
the Company cannot guarantee that our third party vendors, partners or others
will be Year 2000 compliant. If the Company or such third party vendors,
partners and others encounter problems in addressing the Year 2000 issue, our
ability to operate our properties and to bill and collect our revenues in a
timely manner could be materially adversely affected. The Company is currently
addressing the development of a contingency plan in the event that our systems
or the systems of third party vendors, partners or others fail to resolve the
Year 2000 issue.
New Accounting Pronouncements
During 1998, the Company adopted the provisions of Financial Accounting
Standards No. 130 - "Reporting Comprehensive Income" ("SFAS 130") which
established standards for reporting and displaying comprehensive income and
its components and the provisions of Financial Accounting Standards No. 131 -
"Disclosures about Segments of an Enterprise and Related Information"("SFAS
131") which established standards for reporting information about operating
segments. The provisions of SFAS 130 and SFAS 131 had no impact on the
consolidated financial statements of the Company.
In 1998, the Financial Accounting Standards Board issued Financial Accounting
Standards No. 133 - "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"), which is effective for years beginning after June
15, 1999. The management of the Company believes that the implementation of
SFAS 133 will not have a material impact on the Company's consolidated
financial statements.
In addition, during 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position 98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5")
and Statement of Position 98-1 "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"), each of which is
effective for fiscal years beginning after December 15, 1998. SOP 98-5
requires that certain costs incurred in connection with start-up activities be
expensed. SOP 98-1 provides guidance on whether the costs of computer software
developed or obtained for internal use should be capitalized or expensed. The
management of the Company believes that, when adopted, SOP 98-5 and SOP 98-1
will not have a material impact on the Company's consolidated financial
statements.
33
<PAGE>
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
As of December 31, 1998, the Company had approximately $279.1 million of
floating-rate debt outstanding. The interest rate risk on $260 million of such
debt has been mitigated through the use of interest rate swap agreements (the
"Swaps") with major financial institutions. The Company is exposed to credit
risk in the event of non-performance by the counter-parties to the Swaps. The
Company believes it mitigates its credit risk by entering into these Swaps
with major financial institutions.
The Company believes the interest rate risk represented by the remaining $19.1
million of floating-rate debt is not material in relation to the total debt
outstanding of the Company or its market capitalization.
The Company has not, and does not plan to, enter into any derivative financial
instruments for trading or speculative purposes. As of December 31, 1998, the
Company had no other material exposure to market risk.
Item 8. Financial Statements and Supplementary Data
The response to this Item 8 is included as a separate section of this annual
report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
34
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
Incorporated herein by reference to the Company's definitive proxy statement
to be filed with respect to its Annual Meeting of Stockholders expected to be
held on May 20, 1999.
Information with respect to the Executive Officers of the Registrant follows
Part I, Item 4 of this annual report on Form 10-K.
Item 11. Executive Compensation
Incorporated herein by reference to the Company's definitive proxy statement
to be filed with respect to its Annual Meeting of Stockholders expected to be
held on May 20, 1999.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Incorporated herein by reference to the Company's definitive proxy statement
to be filed with respect to its Annual Meeting of Stockholders expected to be
held on May 20, 1999.
Item 13. Certain Relationships and Related Transactions
Incorporated herein by reference to the Company's definitive proxy statement
to be filed with respect to its Annual Meeting of Stockholders expected to be
held on May 20, 1999.
35
<PAGE>
PART IV
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
(a) 1. Financial Statements - Form 10-K
The following consolidated financial information Report
is included as a separate section of this annual Page
report on Form 10-K. --------
Report of Independent Accountants 42
Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 1998 and 1997 43
Consolidated Statements of Income for the years
ended December 31, 1998, 1997 and 1996 44
Consolidated Statements of Stockholders' Equity
for the years ended December 31, 1998, 1997 and 1996 45
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997 and 1996 46
Notes to Consolidated Financial Statements 47
2. Financial Statement Schedules -
Schedule II - Valuation and Qualifying Accounts 64
Schedule III - Real Estate and Accumulated Depreciation 65
All other schedules are omitted since the required information
is not present or is not present in amounts sufficient to
require submission of the schedule.
3. Exhibits
The exhibits listed on the accompanying Index to
Exhibits are filed as part of this report. 37
(b) Reports on Form 8-K
A current report on Form 8-K was filed on November 10, 1998 to disclose (i) the
Remarketing Agreement, dated as of August 11, 1998 between the Company and a
Financial institution; (ii) the Company's new $215 million unsecured credit
facility, (iii) the Underwriting and Terms Agreement dated July 9, 1998 between
the Company and an underwriter and (iv) the Underwriting and Terms Agreement
dated November 4, 1998 between the Company and an underwriter.
A current report on Form 8-K was filed on November 17, 1998 to disclose (i)
the Underwriting and Terms Agreement dated November 12, 1998 between the
Company and an underwriter and (ii) the Underwriting and Terms Agreement dated
November 12, 1998 between the Company and an underwriter.
A current report on Form 8-K was filed on December 4, 1998 to disclose certain
historical financial information for certain properties acquired during
September and October 1998 and pro forma financial information for (i) all
shopping centers acquired during the ten months ended October 1998 and (ii)
the Merger.
36
<PAGE>
INDEX TO EXHIBITS
Form 10-K
Exhibits Page
2.1 -- Form of Plan of Reorganization of Kimco Realty Corporation
[Incorporated by reference to Exhibit 2.1 to the
Company's Registration Statement on Form S-11
No. 33-42588].
2.2 -- Agreement and Plan of Merger, dated as of January 13, 1998,
among Kimco Realty Corporation, REIT Sub, Inc. and
The Price REIT, Inc. (the "Merger Agreement").
[Incorporated by reference to Exhibit 99.2 to the
Company's Current Report on Form 8-K filed January 21, 1998].
2.3 -- First Amendment to the Merger Agreement, dated as
of March 5, 1998, among Kimco Realty Corporation,
REIT Sub, Inc. and The Price REIT, Inc.
[Incorporated by reference to the Company's Exhibit
99.1 of the Company's Current Report on Form 8-K
filed January 21, 1998.]
2.4 -- Second Amendment to the Merger Agreement, dated
as of May 14, 1998, among Kimco Realty Corporation,
REIT Sub, Inc. and The Price REIT, Inc.
[Incorporated by reference to the Company's and The
Price REIT, Inc.'s Joint Proxy Statement/Prospectus
on Form S-4 No. 333-52667].
3.1 -- Articles of Amendment and Restatement of the
Company, dated August 4, 1994 [Incorporated by
reference to Exhibit 3.1 to the Company's Annual
Report on Form 10-K for the year ended December 31,
1994].
3.2 -- By-laws of the Company, as amended dated August 4, 1994.
3.3 -- Articles Supplementary relating to the 8 1/2%
Class B Cumulative Redeemable Preferred Stock, par
value $1.00 per share, of the Company, dated July
25, 1995. Incorporated by reference to Exhibit 3.3
to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995 (file #1-10899) (the
"1995 Form 10-K")].
3.4 -- Articles Supplementary relating to the 8 3/8%
Class C Cumulative Redeemable Preferred Stock, par
value $1.00 per share, of the Company, dated April
9, 1996 [Incorporated by reference to Exhibit 3.4
to the Company's Annual Report on Form 10-K for the
year ended December 31, 1996].
3.5 -- Articles Supplementary relating to the 7 1/2%
Class D Cumulative Convertible Preferred Stock, par
value $1.00 per share, of the Company, dated May
14, 1998 [Incorporated by reference to the
Company's and The Price REIT, Inc.'s Joint
Proxy/Prospectus on Form S-4 No. 333-52667].
4.1 -- Agreement of the Company pursuant to Item 601(b)(4)(iii)(A)
of Regulation S-K [Incorporated by reference to
Exhibit 4.1 to Amendment No. 3 to the Company's
Registration Statement on Form S-11 No. 33-42588].
4.2 -- Certificate of Designations [Incorporated by reference to
Exhibit 4(d) to Amendment No. 1 to the Registration
Statement on Form S-3 dated September 10, 1993 (the
"Registration Statement", Commission File No. 33-67552)].
37
<PAGE>
INDEX TO EXHIBITS (continued)
Form 10-K
Page
Exhibits
4.3 -- Indenture dated September 1, 1993 between Kimco
Realty Corporation and IBJ Schroder Bank and Trust
Company [Incorporated by reference to Exhibit 4(a)
to the Registration Statement].
4.4 -- First Supplemental Indenture, dated as of August 4, 1994.
[Incorporated by reference to Exhibit 4.6 to the 1995
Form 10-K.]
4.5 -- Second Supplemental Indenture, dated as of April
7, 1995 [Incorporated by reference to Exhibit 4(a)
to the Company's Current Report on Form 8-K dated
April 7, 1995 (the "April 1995 8-K")].
4.6 -- Form of Medium-Term Note (Fixed Rate) [Incorporated by reference
to Exhibit 4(b) to the April 1995 8-K].
4.7 -- Form of Medium-Term Note (Floating Rate)
[Incorporated by reference to Exhibit 4(c) to the
April 1995 8-K].
4.8 -- Form of Remarketed Reset Note [Incorporated by
reference to Exhibit 4(j) to the Company's Current
Report on Form 8-K dated March 26, 1999].
10.1 -- Form of Acquisition Option Agreement between the Company
and the subsidiary named therein [Incorporated by
reference to Exhibit 10.1 to Amendment No. 3 to the
Company's Registration Statement on Form S-11
No. 33-42588].
10.2 -- Management Agreement between the Company and
KC Holdings, Inc. [Incorporated by reference to
Exhibit 10.2 to the Company's Registration Statement
on Form S-11 No. 33-47915].
10.3 -- Amended and Restated Stock Option Plan
[Incorporated by reference to Exhibit 10.3 to the
1995 Form 10-K.]
*10.4 -- Employment Agreement between Kimco Realty
Corporation and Michael J. Flynn, dated
November 1, 1998.
10.5 -- Restricted Equity Agreement, Non-Qualified
and Incentive Stock Option Agreement, and
Price Condition Non-Qualified and Incentive
Stock Option Agreement between Kimco Realty
Corporation and Michael J. Flynn, each dated
November 1, 1995 [Incorporated by reference to
Exhibit 10.5 to the 1995 Form 10-K].
10.6 -- Employment Agreement between Kimco Realty Corporation and
Michael V. Pappagallo, dated April 30, 1997 [Incor-
porated by Reference to Exhibit 10.7 to the Company's
Annual Report on Form 10-K for the year ended December
31, 1997].
10.7 -- Employment Agreement between Kimco Realty Corporation and
Joseph K. Kornwasser, dated January 13, 1998
[Incorporated by Reference to Exhibit 10.9 to the
Company's and the Price REIT, Inc.'s Joint Proxy
Statement/Prospectus on Form S-4 No. 333-52667].
38
<PAGE>
INDEX TO EXHIBITS (continued)
Form 10-K
Page
10.8 -- Employment Agreement between Kimco Realty Corporation and
Jerald Friedman, dated January 13, 1998
[Incorporated by Reference to Exhibit 10.10 to the
Company's and the Price REIT, Inc.'s Joint Proxy
Statement/Prospectus on Form S-4 No. 333-52667].
10.9 -- Credit Agreement among Kimco Realty Corporation, The
Several Banks, financial institutions
and other entities from Time to Time Parties Hereto,
Chase Manhattan Bank and The First National
Bank of Chicago, as Co-Managers and Chase
Manhattan Bank, as Administrative Agent,
dated as of August 11, 1998. [Incorporated by
reference to Exhibit 4(b) to the Company's
Current Report of Form 8-K filed November 10, 1998].
10.10 -- Amended and Restated Stock Option Plan
[Incorporated by reference to the Company's and The
Price REIT, Inc.'s Joint Proxy/Prospectus on Form
S-4 No. 333-52667].
*12.1 -- Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends. 77
*12.2 -- Computation of Ratio of Funds from Operations to Combined
Fixed Charges and Preferred Stock Dividends. 78
*21.1 -- Subsidiaries of the Company 79
*23.1 -- Consent of PricewaterhouseCoopers LLP 87
- --------------------------------------------------------
* Filed herewith.
39
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
KIMCO REALTY CORPORATION
(Registrant)
By: /s/ Milton Cooper
----------------------------
Milton Cooper
Chief Executive Officer
Dated: March 26, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Martin S. Kimmel Chairman (Emeritus) of March 26, 1999
--------------------------- the Board of Directors
Martin S. Kimmel
/s/ Milton Cooper Chairman of the Board March 26, 1999
--------------------------- of Directors and Chief
Milton Cooper Executive Officer
/s/ Michael J. Flynn Vice Chairman of the March 26, 1999
--------------------------- Board of Directors,
Michael J. Flynn President and
Chief Operating Officer
/s/ Joseph K. Kornwasser Director and Senior March 26, 1999
----------------------------
Joseph K. Kornwasser Executive Vice President
/s/ Richard G. Dooley Director March 26, 1999
---------------------------
Richard G. Dooley
/s/ Joe Grills Director March 26, 1999
---------------------------
Joe Grills
/s/ Frank Lourenso Director March 26, 1999
---------------------------
Frank Lourenso
/s/ Michael V. Pappagallo Chief Financial Officer March 26, 1999
---------------------------
Michael V. Pappagallo
/s/ Glenn G. Cohen Treasurer March 26, 1999
---------------------------
Glenn G. Cohen
/s/ Ruth Mitteldorf Director of Accounting March 26, 1999
--------------------------- and Taxation
Ruth Mitteldorf
40
<PAGE>
ANNUAL REPORT ON FORM 10-K
ITEM 8, ITEM 14 (a) (1) and (2)
INDEX TO FINANCIAL STATEMENTS
AND
FINANCIAL STATEMENT SCHEDULES
-------
FORM 10-K
Page No.
KIMCO REALTY CORPORATION AND SUBSIDIARIES
Report of Independent Accountants 42
Consolidated Financial Statements and Financial Statement Schedules:
Consolidated Balance Sheets as of December 31, 1998 and 1997 43
Consolidated Statements of Income for the years ended
December 31, 1998, 1997 and 1996 44
Consolidated Statements of Stockholders' Equity
for the years ended December 31, 1998, 1997 and 1996 45
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997 and 1996 46
Notes to Consolidated Financial Statements 47
Financial Statement Schedules:
II. Valuation and Qualifying Accounts 64
III. Real Estate and Accumulated Depreciation 65
41
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Kimco Realty Corporation:
In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of Kimco Realty Corporation and Subsidiaries at December 31, 1998
and 1997, and the consolidated results of their operations and their cash
flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles. In addition, in
our opinion, the financial statement schedules listed in the accompanying
index present fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements. These financial statements and financial statement schedules
are the responsibility of the Company's management; our responsibility is
to express an opinion on these financial statements and financial statement
schedules based on our audits. We conducted our audits of these statements
in accordance with generally accepted auditing standards which require that
we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
/S/ PRICEWATERHOUSECOOPERS LLP
New York, New York
February 26, 1999
42
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
-----------------
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
-------------------- ---------------------
<S> <C> <C>
ASSETS:
Real Estate
Rental property
Land $ 528,549,456 $ 212,019,596
Buildings and improvements 2,494,004,820 1,190,828,854
-------------------- ---------------------
3,022,554,276 1,402,848,450
Less, accumulated depreciation and
amortization 255,949,923 207,408,091
-------------------- ---------------------
2,766,604,353 1,195,440,359
Undeveloped land 1,347,709 1,347,709
-------------------- ---------------------
Real estate, net 2,767,952,062 1,196,788,068
Investment in retail store leases 15,171,978 15,938,041
Investments and advances in real estate
joint ventures 64,263,252 9,794,142
Cash and cash equivalents 43,920,544 30,978,178
Accounts and notes receivable 31,820,940 16,203,454
Deferred charges and prepaid expenses 34,030,574 21,260,041
Other assets 94,019,071 52,928,200
-------------------- ---------------------
$ 3,051,178,421 $ 1,343,890,124
==================== =====================
LIABILITIES & STOCKHOLDERS' EQUITY:
Notes payable $ 855,250,000 $ 410,250,000
Mortgages payable 434,310,884 121,363,908
Accounts payable and accrued expenses 66,179,347 34,288,409
Dividends payable 39,444,195 22,545,806
Other liabilities 58,019,873 7,590,856
-------------------- ---------------------
1,453,204,299 596,038,979
-------------------- ---------------------
Minority interests in partnerships 12,955,270 4,531,934
-------------------- ---------------------
Commitments and contingencies
Stockholders' equity
Preferred Stock, $1.00 par value, authorized
3,470,000 and 5,000,000 shares, respectively
Class A Preferred Stock, $1.00 par value,
authorized 345,000 shares
Issued and outstanding 300,000 shares 300,000 300,000
Aggregate liquidation preference $75,000,000
Class B Preferred Stock, $1.00 par value,
authorized 230,000 shares
Issued and outstanding 200,000 shares 200,000 200,000
Aggregate liquidation preference $50,000,000
Class C Preferred Stock, $1.00 par value,
authorized 460,000 shares
Issued and outstanding 400,000 shares 400,000 400,000
Aggregate liquidation preference $100,000,000
Class D Convertible Preferred Stock, $1.00 par value,
authorized 700,000 shares
Issued and outstanding 429,159 shares
Aggregate liquidation preference $107,289,750 429,159 -
Common stock, $.01 par value, authorized 100,000,000
shares
Issued and outstanding 60,133,704 and 40,394,805
shares, respectively 601,337 403,948
Paid-in capital 1,707,271,637 857,658,054
Cumulative distributions in excess of net income (124,183,281) (115,642,791)
-------------------- ---------------------
1,585,018,852 743,319,211
-------------------- ---------------------
$ 3,051,178,421 $ 1,343,890,124
==================== =====================
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
43
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
----------------
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------
1998 1997 1996
------------------ ------------------- -------------------
<S> <C> <C> <C>
Revenues from rental property $ 338,797,629 $ 198,929,403 $ 168,144,419
------------------ ------------------- -------------------
Rental property expenses:
Rent 12,568,259 4,873,200 1,417,263
Real estate taxes 45,472,470 26,345,685 19,815,808
Interest 64,911,743 31,744,762 27,019,283
Operating and maintenance 33,246,001 22,194,628 21,659,620
Depreciation and amortization 51,347,612 30,052,714 27,066,709
------------------ ------------------- -------------------
207,546,085 115,210,989 96,978,683
------------------ ------------------- -------------------
Income from rental property 131,251,544 83,718,414 71,165,736
Income from investment in retail store leases 3,702,854 3,571,946 3,631,845
------------------ ------------------- -------------------
134,954,398 87,290,360 74,797,581
Management fee income 3,645,674 3,276,152 3,447,577
General and administrative expenses (18,582,817) (11,651,341) (10,333,924)
Equity in income (losses) of real estate joint
ventures, net 3,106,214 1,116,988 820,083
Minority interests in income of partnerships, net (1,275,360) (463,522) (470,441)
Other income, net 4,416,973 6,023,813 4,764,062
------------------ ------------------- -------------------
Income before gain on sale of shopping
center property and extraordinary items 126,265,082 85,592,450 73,024,938
Gain on sale of shopping center 901,249 243,995 801,955
------------------ ------------------- -------------------
Income before extraordinary items 127,166,331 85,836,445 73,826,893
Extraordinary items (4,900,361) - -
------------------ ------------------- -------------------
Net income $ 122,265,970 $ 85,836,445 $ 73,826,893
================== =================== ===================
Net income applicable to common shares $ 97,612,123 $ 67,398,745 $ 57,692,418
================== =================== ===================
Per common share
Income before extraordinary items
Basic $2.05 $1.80 $1.61
====== ====== =====
Diluted $2.02 $1.78 $1.59
====== ====== =====
Net Income
Basic $1.95 $1.80 $1.61
====== ====== =====
Diluted $1.93 $1.78 $1.59
====== ====== =====
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
44
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1998, 1997 and 1996
------------------------------
<TABLE>
<CAPTION>
Preferred Stock Common Stock
---------------------------------- ----------------------------
Issued Amount Issued Amount
------------------ -------------- -------------- ------------
<S> <C> <C> <C> <C>
Balance, December 31, 1995 500,000 $ 500,000 33,731,348 $ 337,313
Net income
Dividends ($1.60 per common share; $1.9375, $2.125
and $1.59943 per Class A, Class B and Class C
Depositary Share, respectively)
Issuance of preferred stock 400,000 400,000
Issuance of common stock 2,320,125 23,201
Exercise of common stock options 163,582 1,637
------------------ -------------- -------------- ------------
Balance, December 31, 1996 900,000 900,000 36,215,055 362,151
Net income
Dividends ($1.77 per common share; $1.9375, $2.125
and $2.0938 per Class A, Class B and Class C
Depositary Share, respectively)
Issuance of common stock 4,000,000 40,000
Exercise of common stock options 179,750 1,797
------------------ -------------- -------------- ------------
Balance, December 31, 1997 900,000 900,000 40,394,805 403,948
Net income
Dividends ($2.06 per common share; $1.9375,
$2.125, $2.0938, $1.0729 and $2.9609 per Class
A, Class B, Class C, Class D and Class E
Depositary Share, respectively)
Issuance of preferred stock 494,159 494,159
Issuance of common stock 19,588,133 195,881
Exercise of common stock options 150,766 1,508
Redemption of preferred stock (65,000) (65,000)
------------------ -------------- -------------- ------------
Balance, December 31, 1998 1,329,159 $ 1,329,159 60,133,704 $ 601,337
================== ============== ============== ============
</TABLE>
<TABLE>
<CAPTION>
Cumulative
Distributions Total
Paid-in in Excess Stockholders'
Capital of Net Income Equity
----------------- ------------------ ------------------
<S> <C> <C> <C>
Balance, December 31, 1995 $ 562,311,822 $ (114,665,183) $ 448,483,952
Net income 73,826,893 73,826,893
Dividends ($1.60 per common share; $1.9375, $2.125
and $1.59943 per Class A, Class B and Class C
Depositary Share, respectively) (74,254,848) (74,254,848)
Issuance of preferred stock 96,037,337 96,437,337
Issuance of common stock 58,087,001 58,110,202
Exercise of common stock options 3,165,796 3,167,433
----------------- ------------------ ------------------
Balance, December 31, 1996 719,601,956 (115,093,138) 605,770,969
Net income 85,836,445 85,836,445
Dividends ($1.77 per common share; $1.9375, $2.125
and $2.0938 per Class A, Class B and Class C
Depositary Share, respectively) (86,386,098) (86,386,098)
Issuance of common stock 134,293,408 134,333,408
Exercise of common stock options 3,762,690 3,764,487
----------------- ------------------ ------------------
Balance, December 31, 1997 857,658,054 (115,642,791) 743,319,211
Net income 122,265,970 122,265,970
Dividends ($2.06 per common share; $1.9375,
$2.125, $2.0938, $1.0729 and $2.9609 per Class
A, Class B, Class C, Class D and Class E
Depositary Share, respectively) (130,806,460) (130,806,460)
Issuance of preferred stock 171,795,591 172,289,750
Issuance of common stock 739,590,562 739,786,443
Exercise of common stock options 3,162,430 3,163,938
Redemption of preferred stock (64,935,000) (65,000,000)
----------------- ------------------ ------------------
Balance, December 31, 1998 $ 1,707,271,637 $ (124,183,281) $ 1,585,018,852
================= ================== ==================
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
45
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1998 1997
-------------------- -------------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 122,265,970 $ 85,836,445
Adjustments for noncash items -
Depreciation and amortization 51,347,612 30,052,714
Extraordinary items 4,900,361 -
Gain on sale of shopping center (901,249) (243,995)
Minority interests in income of partnerships, net 1,275,360 463,522
Equity in income of real estate joint ventures, net (3,106,214) (1,116,988)
Change in accounts and notes receivable (11,422,086) (2,217,316)
Change in accounts payable and accrued expenses (6,607,964) 12,304,523
Change in other operating assets and liabilities 954,079 28,736
-------------------- -------------------
Net cash flow provided by operations 158,705,869 125,107,641
-------------------- -------------------
Cash flow from investing activities:
Acquisition of and improvements to real estate (583,979,056) (261,225,536)
Acquisition of real estate through joint venture investment (23,313,994) (4,625,068)
Investment in marketable securities (7,088,793) (11,138,247)
Advances to affiliated companies - (14,036,000)
Investment in mortgage loans receivable (27,698,415) -
Repayment of mortgage loans receivable 1,456,200 -
Construction advances to real estate joint ventures (1,904,464) -
Reimbursement of advances to real estate joint ventures - 8,651,653
Proceeds from sale of shopping center 12,300,000 1,550,000
-------------------- -------------------
Net cash flow used for investing activities (630,228,522) (280,823,198)
-------------------- -------------------
Cash flow from financing activities:
Principal payments on debt, excluding
normal amortization of rental property debt (84,056,229) (4,650,000)
Principal payments on rental property debt, net (4,402,896) (1,618,255)
Proceeds from mortgage financing 281,275,000 -
Mortgage financing origination costs (7,323,495) -
Proceeds from issuance of medium-term notes 290,000,000 100,000,000
Repayment of medium term notes (50,000,000) -
Borrowings under revolving credit facilities 220,000,000 -
Repayment of borrowings under revolving credit facilities (265,000,000) -
Dividends paid (113,908,071) (82,561,111)
Proceeds from issuance of stock 282,880,710 138,097,895
Redemption of preferred stock (65,000,000) -
-------------------- -------------------
Net cash flow provided by financing activities 484,465,019 149,268,529
-------------------- -------------------
Increase(decrease) in cash and cash equivalents 12,942,366 (6,447,028)
Cash and cash equivalents, beginning of year 30,978,178 37,425,206
-------------------- -------------------
Cash and cash equivalents, end of year $ 43,920,544 $ 30,978,178
==================== ===================
Supplemental schedule of noncash investing/financing activity:
Acquisition of real estate interests by issuance of common stock
and/or assumption of debt $ 1,005,712,554 $ 73,227,224
==================== ===================
Declaration of dividends paid in succeeding year $ 39,444,195 $ 22,545,806
==================== ===================
</TABLE>
<TABLE>
<CAPTION>
Year Ended
December 31,
------------------
1996
------------------
<S> <C>
Cash flow from operating activities:
Net income $ 73,826,893
Adjustments for noncash items -
Depreciation and amortization 27,066,709
Extraordinary items -
Gain on sale of shopping center (801,955)
Minority interests in income of partnerships, net 470,441
Equity in income of real estate joint ventures, net (820,083)
Change in accounts and notes receivable 2,626,760
Change in accounts payable and accrued expenses 2,730,442
Change in other operating assets and liabilities (3,207,396)
------------------
Net cash flow provided by operations 101,891,811
------------------
Cash flow from investing activities:
Acquisition of and improvements to real estate (140,916,684)
Acquisition of real estate through joint venture investment -
Investment in marketable securities (4,935,008)
Advances to affiliated companies -
Investment in mortgage loans receivable -
Repayment of mortgage loans receivable -
Construction advances to real estate joint ventures -
Reimbursement of advances to real estate joint ventures -
Proceeds from sale of shopping center 1,825,000
------------------
Net cash flow used for investing activities (144,026,692)
------------------
Cash flow from financing activities:
Principal payments on debt, excluding
normal amortization of rental property debt (8,299,980)
Principal payments on rental property debt, net (1,267,816)
Proceeds from mortgage financing -
Mortgage financing origination costs -
Proceeds from issuance of medium-term notes -
Repayment of medium term notes -
Borrowings under revolving credit facilities -
Repayment of borrowings under revolving credit facilities (15,000,000)
Dividends paid (69,751,755)
Proceeds from issuance of stock 157,714,972
Redemption of preferred stock -
------------------
Net cash flow provided by financing activities 63,395,421
------------------
Increase(decrease) in cash and cash equivalents 21,260,540
Cash and cash equivalents, beginning of year 16,164,666
------------------
Cash and cash equivalents, end of year $ 37,425,206
==================
Supplemental schedule of noncash investing/financing activity:
Acquisition of real estate interests by issuance of common stock
and/or assumption of debt $ -
==================
Declaration of dividends paid in succeeding year $ 18,720,819
==================
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
46
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Business
Kimco Realty Corporation (the "Company" or "Kimco"), its
subsidiaries, affiliates and related real estate joint ventures
are engaged principally in the operation of neighborhood and
community shopping centers which are anchored generally by
discount department stores, supermarkets or drugstores.
Additionally, the Company provides management services for
shopping centers owned by affiliated entities and various real
estate joint ventures.
The Company seeks to reduce its operating and leasing risks through
diversification achieved by the geographic distribution of its
properties, avoiding dependence on any single property, and a
large tenant base. At December 31, 1998, the Company's single
largest neighborhood and community shopping center accounted for
only 1.5% of the Company's annualized base rental revenues and
only 1.0% of the Company's total shopping center gross leasable
area ("GLA"). At December 31, 1998, the Company's five largest
tenants include Kmart Corporation, The Home Depot, Kohl's,
Toys/Kids R' Us and TJX Companies, which represented
approximately 13.7%, 3.0%, 2.5%, 1.8% and 1.5%, respectively, of
the Company's annualized base rental revenues.
Principles of Consolidation and Estimates
The accompanying Consolidated Financial Statements include the
accounts of the Company, its subsidiaries, all of which are
wholly-owned, and all majority-owned partnerships. All
significant intercompany balances and transactions have been
eliminated in consolidation.
Generally accepted accounting principles require the Company's
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities and the reported amounts of
revenues and expenses during a reporting period. Actual results
may differ from such estimates. The most significant assumptions
and estimates relate to depreciable lives, valuation of real
estate and the recoverability of trade accounts receivable.
Real Estate
Realestate assets are stated at cost, less accumulated depreciation
and amortization. If there is an event or a change in
circumstances that indicates that the basis of the Company's
property may not be recoverable, the Company will assess any
impairment in value by making a comparison of (i) the current and
projected operating cash flows (undiscounted and without interest
charges) of the property over its remaining useful life and (ii)
the net carrying amount of the property. If the current and
projected operating cash flows (undiscounted and without interest
charges) are less than the carrying value of its property, the
carrying value would be written down to an amount to reflect the
fair value of the property.
Depreciation and amortization are provided on the straight-line
method over the estimated useful lives of the assets, as follows:
Buildings 15 to 39 years
Fixtures and leasehold improvements Terms of leases or useful
lives, whichever is shorter
47
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Expenditures for maintenance and repairs are charged to operations as
incurred. Significant renovations are capitalized.
Investments in Real Estate Joint Ventures
Investments in real estate joint ventures are accounted for on the
equity method.
Deferred Leasing and Financing Costs
Costs incurred in obtaining tenant leases and long-term financing,
included in deferred charges and prepaid expenses in the
accompanying Consolidated Balance Sheets, are amortized over the
terms of the related leases or debt agreements, as applicable.
Revenue Recognition
Minimum revenues from rental property are recognized on a
straight-line basis over the terms of the related leases.
Income Taxes
The Company and its subsidiaries file a consolidated Federal income
tax return. The Company has made an election to qualify, and
believes it is operating so as to qualify, as a Real Estate
Investment Trust (a "REIT") for Federal income tax purposes.
Accordingly, the Company generally will not be subject to Federal
income tax, provided that distributions to its stockholders equal
at least the amount of its REIT taxable income as defined under
the Code.
Per Share Data
In 1997 the Financial Accounting Standards Board issued Financial
Accounting Standards No. 128 "Earnings Per Share". Statement 128
replaced the presentation of primary and fully diluted earnings
per share ("EPS") pursuant to Accounting Principles Board Opinion
No. 15 with the presentation of basic and diluted EPS. Basic EPS
excludes dilution and is computed by dividing net income
available to common shareholders by the weighted average number
of common shares outstanding for the period. Diluted EPS reflects
the potential dilution that could occur if securities or other
contracts to issue common shares were exercised or converted into
common shares and then shared in the earnings of the Company.
The following table sets forth the reconciliation between basic and
diluted weighted average number of shares outstanding for each
period:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ---------- ----------
<S> <C> <C> <C>
Basic EPS - weighted average number of common shares
outstanding 50,071,425 37,387,984 35,906,029
Effect of dilutive securities -
Stock options 569,113 462,076 312,993
=========== ========== ==========
Diluted EPS - weighted average number of common shares 50,640,538 37,850,060 36,219,022
=========== ========== ==========
</TABLE>
48
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The effect of the conversion of the Class D Preferred Stock (as
defined in Note 3) would have an anti-dilutive effect upon the
calculation of net income per common share. Accordingly, the
impact of such conversion has not been included in the
determination of diluted net income per common share.
New Accounting Pronouncements
During 1998, the Company adopted the provisions of Financial
Accounting Standards No. 130 - "Reporting Comprehensive Income"
("SFAS 130") which established standards for reporting and
displaying comprehensive income and its components and the
provisions of Financial Accounting Standards No. 131 -
"Disclosures about Segments of an Enterprise and Related
Information"("SFAS 131") which established standards for
reporting information about operating segments. The provisions of
SFAS 130 and SFAS 131 had no impact on the accompanying
Consolidated Financial Statements.
In 1998 the Financial Accounting Standards Board issued Financial
Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), which is
effective for years beginning after June 15, 1999. The management
of the Company believes that the implementation of SFAS 133 will
not have a material impact on the Company's consolidated
financial statements.
In addition, during 1998, the Accounting Standards Executive
Committee of the American Institute of Certified Public
Accountants issued Statement of Position 98-5, "Reporting on the
Costs of Start-Up Activities" ("SOP 98-5"), and Statement of
Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"), each of
which is effective for fiscal years beginning after December 15,
1998. SOP 98-5 requires that certain costs incurred in connection
with start-up activities be expensed. SOP 98-1 provides guidance
on whether the costs of computer software developed or obtained
for internal use should be capitalized or expensed. The
management of the Company believes that, when adopted, SOP 98-5
and SOP 98-1 will not have a material impact on the Company's
consolidated financial statements.
2. Property Acquisitions:
Shopping Centers-
During the years 1998, 1997 and 1996 certain subsidiaries of the
Company acquired real estate interests, in separate transactions,
in various shopping center properties at aggregate costs of
approximately $303 million, $146 million and $39 million,
respectively.
Venture Stores, Inc. Properties Transactions-
During January 1996, certain subsidiaries of the Company entered into
two sale-leaseback transactions with Venture Stores, Inc.
("Venture") pursuant to which it acquired fee title to 16 retail
properties located in Texas, Iowa, Oklahoma, Illinois and Kansas
for a purchase price of $40 million. Simultaneously, the Company
executed two long-term unitary net leases with Venture covering
the 16 locations. During July 1997, the Company consented to the
modification of these two unitary net lease agreements whereby
the Company entered into two unitary net lease
49
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
agreements with another retailer on 9 of the locations and a new
unitary lease with Venture on the remaining 7 locations.
In August 1997, certain subsidiaries of the Company acquired certain
real estate assets from Venture consisting of interests in 49 fee
and leasehold properties totaling approximately 5.9 million
square feet of leasable area located in seven states. The
aggregate price was approximately $130 million, consisting of
$70.5 million in cash and the assumption of approximately $59.5
million of existing mortgage debt on certain of these properties.
Simultaneously with this transaction, the Company entered into a
long-term unitary net lease with Venture covering all premises
occupied by Venture on these properties. As a result of this
transaction, Venture was the primary or sole tenant at 60 of the
Company's locations as of December 31, 1997.
In January 1998, Venture filed for protection under Chapter 11 of
the United States Bankruptcy Code. On April 27, 1998, Venture
announced it would discontinue its retail operations and that it
had reached an agreement to sell its leasehold position at 89
locations to the Company, including 56 properties pursuant to two
unitary leases already in place with the Company, 30 properties
pursuant to a master lease with Metropolitan Life Insurance
Company ("Metropolitan Life") and three properties leased by
Venture from others. The purchase price for the leasehold
positions was $95.0 million, less certain closing adjustments,
but is subject to upward adjustment based on the Company's
success in re-tenanting the properties over a two-year period. On
July 17, 1998, the Company purchased the leasehold positions with
an initial cash payment to Venture of approximately $50 million.
Simultaneous with this transaction, the Company leased 46 of
these locations to Kmart Corporation.
The Company also reached an agreement with Metropolitan Life to
purchase the 30 fee and leasehold positions which were leased by
Metropolitan Life to Venture, for an aggregate purchase price of
$167.5 million. This transaction was completed on July 1, 1998.
During August 1998, the Company acquired from Venture five additional
leasehold positions, including two leases already in place with
the Company, for an aggregate purchase price of approximately
$2.2 million. Simultaneous with this transaction, the Company
leased these five locations, along with five other former Venture
locations, to another national retailer.
As of December 31, 1998, the Company has leased substantially all of
the vacant space at 76 locations and sold 2 of the locations
acquired in the above transactions (See Recent Developments -
Property Dispositions). The Company is currently negotiating with
other major retailers concerning the re-tenanting of the
remaining locations.
Retail Property Acquisitions-
During January 1998, the Company, through a partnership interest,
acquired fee interest in three properties from a retailer in the
Chicago, IL market comprising approximately 516,000 square feet
of GLA for a aggregate purchase price of approximately $23.7
million. These properties include approximately 70,000 square
feet of showroom space and adjoining warehouses of approximately
100,000 square feet at each location. Simultaneous with this
transaction, the Company leased, to a national furniture
retailer, the showroom portion of each property under individual
long-term leases. The Company is currently planning the
redevelopment of the warehouse portion of each property.
50
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
During August 1996, certain subsidiaries of the Company acquired
interests in 16 retail properties, including 2 properties to
which the Company and its affiliates already held fee title, for
$21.8 million in cash. These property interests were acquired
from a retailer which had elected to discontinue operation of its
discount department store division.
These acquisitions have been funded principally through the
application of proceeds from the Company's public unsecured debt
and equity offerings and proceeds from mortgage financings. (See
Notes 7, 8 and 12.)
Other Acquisitions-
During December 1998, the Company acquired a first mortgage on a
shopping center in Manhasset, New York for approximately $21
million and has entered into a contract to acquire fee title to
this property.
3. Price REIT Merger:
On January 13, 1998, the Company, REIT Sub, Inc., a Maryland
corporation and a wholly owned subsidiary of the Company ("Merger
Sub") and The Price REIT, Inc., a Maryland corporation, ("Price
REIT"), signed a definitive Agreement and Plan of Merger dated
January 13, 1998, as amended March 5, 1998 and May 14, 1998, (the
"Merger Agreement"). On June 19, 1998, upon approval by the
shareholders of the Company and the shareholders of Price REIT,
Price REIT was merged into Merger Sub, whereupon the separate
existence of Price REIT ceased (the "Merger"). For financial
reporting purposes, the Merger was accounted for using the
purchase method of accounting.
Prior to the Merger, Price REIT was a self-administered and
self-managed equity REIT that was primarily focused on the
acquisition, development, management and redevelopment of large
community shopping center properties concentrated in the western
part of the United States . In connection with the Merger, the
Company acquired interests in 43 properties, consisting of 39
retail community centers, one stand-alone retail warehouse, one
project under development and two undeveloped land parcels,
located in 17 states containing approximately 8.0 million square
feet of GLA. The overall occupancy rate of the retail community
centers was 98%.
In connection with the Merger, holders of Price REIT common stock
received one share of Kimco common stock and 0.36 shares of Kimco
Class D Depositary Shares (the "Class D Depositary Shares"), each
Class D Depositary Share representing a one-tenth fractional
interest in a new issue of Kimco 7.5% Cumulative Convertible
Preferred Stock, par value $1.00 per share (the "Class D
Preferred Stock"), for each share of Price REIT common stock. On
June 19, 1998, the Company issued 11,921,992 shares of its common
stock and 429,159 shares of Class D Preferred Stock (represented
by 4,291,590 Class D Depositary Shares) in connection with the
Merger. Additionally, in connection with the Merger, the Company
issued 65,000 shares of a new issue of Kimco Class E Floating
Rate Cumulative Preferred Stock, par value $1.00 per share ((the
"Class E Preferred Stock"), represented by 650,000 Class E
Depositary Shares, (the "Class E Depositary Shares")), each Class
E Depositary Share representing a one-tenth fractional interest
in the Class E Preferred Stock. The Class E Preferred Stock was
redeemable at the option of the Company for 150 days after its
issuance at a price equal to the liquidation preference of $1,000
per share plus accrued and unpaid
51
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
dividends. The Company exercised its option in November 1998 to
redeem all of the Class E Preferred Stock for $65.065 million
representing the liquidation preference of $65 million and
approximately $65,000 of accrued dividends (See Note 12).
The total Merger consideration was approximately $960 million,
including the assumption of approximately $310 million of debt.
Management has allocated the purchase price based on the fair
value of assets and liabilities assumed. Such allocations are
based on preliminary estimates, and are subject to revision.
4. Investment in Retail Store Leases:
The Company has interests in various retail store leases relating to
the anchor store premises in neighborhood and community shopping
centers. These premises have been substantially sublet to
retailers which lease the stores pursuant to net lease
agreements. Income from the investment in these retail store
leases during the years ended December 31, 1998 and 1997 was
approximately $3.7 million and $3.6 million, respectively. These
amounts represent sublease revenues during the years ended
December 31, 1998 and 1997 of approximately $20.2 million and
$20.9 million, respectively, less related expenses of $14.9
million and $15.2 million, respectively, and an amount, which in
management's estimate, reasonably provides for the recovery of
the investment over a period representing the expected remaining
term of the retail store leases. The Company's future minimum
revenues under the terms of all noncancellable tenant subleases
and future minimum obligations through the remaining terms of its
retail store leases, assuming no new or renegotiated leases are
executed for such premises, for future years are as follows (in
millions of dollars): 1999, $18.3 and $13.7; 2000, $17.1 and
$12.5; 2001, $13.9 and $10.1; 2002, $10.3 and $7.3; 2003, $7.0
and $4.5 and thereafter, $8.7 and $1.7, respectively.
5. Investments and Advances in Real Estate Joint Ventures:
The Company and its subsidiaries have investments in and advances to
various real estate joint ventures. These joint ventures are
engaged primarily in the operation of shopping centers which are
either owned or held under long-term operating leases.
During 1998, in connection with the Merger, the Company acquired two
additional joint venture interests. The Company also invested
approximately $19.0 million in a partnership which has acquired
and leased-back 11 automotive dealerships and invested
approximately $3.6 million in a partnership which acquired a
shopping center for approximately $34 million, including mortgage
debt of approximately $27 million. The Company has a 50% interest
in each of these partnerships.
52
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Summarized financial information for the recurring operations of
these real estate joint ventures is as follows (in millions of
dollars):
December 31,
--------------------------
1998 1997
----------- ----------
Assets:
Real estate, net $168.2 $58.3
Other assets 20.3 7.8
----------- ----------
$188.5 $66.1
=========== ==========
Liabilities and Partners'
Capital/(Deficit):
Mortgages payable $104.3 $63.5
Other liabilities 24.7 19.7
Partners' Capital/(Deficit) 59.5 (17.1)
----------- ----------
$188.5 $66.1
=========== ==========
Year Ended December 31,
-----------------------------
1998 1997 1996
------- ------ --------
Revenues from rental property $26.8 $14.8 $11.2
Operating expenses (9.7) (3.6) (2.9)
Mortgage interest (6.2) (3.1) (2.5)
Depreciation and amortization (2.9) (2.2) (2.2)
Other, net .1 (1.8) (1.3)
------ ----- -----
Net income $8.1 $4.1 $2.3
====== ====== ====
Other liabilities in the accompanying Consolidated Balance Sheets
include accounts with certain real estate joint ventures totaling
approximately $5.0 million and $5.1 million at December 31, 1998
and 1997, respectively. The Company and its subsidiaries have
varying equity interests in these real estate joint ventures
which may differ from their proportionate share of net income or
loss recognized in accordance with generally accepted accounting
principles.
6. Cash and Cash Equivalents:
Cashand cash equivalents (demand deposits in banks, commercial paper
and certificates of deposit with original maturities of three
months or less) includes tenants' security deposits, escrowed
funds and other restricted deposits approximating $.1 million and
$10.1 million at December 31, 1998 and 1997, respectively.
Cashand cash equivalent balances may, at a limited number of banks
and financial institutions, exceed insurable amounts. The Company
believes it mitigates its risks by investing in or through major
financial institutions. Recoverability of investments is
dependent upon the performance of the issuers.
53
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
7. Notes Payable:
The Company has implemented a $200 million unsecured medium-term
notes ("MTN") program pursuant to which it may, from time to
time, offer for sale its senior unsecured debt for any general
corporate purposes, including (i) funding specific liquidity
requirements in its business, including property acquisition,
development and redevelopment costs, and (ii) managing the
Company's debt maturities.
During June and July 1998, the Company issued an aggregate $130
million of fixed-rate unsecured medium-term notes under its MTN
program (the "June and July MTNS"). The June and July MTNs mature
in June 2005 and July 2006, respectively, and bear interest at
6.73% and 6.93% per annum, respectively. Interest on these notes
is payable semi-annual in arrears.
As of December 31, 1998, a total principal amount of $290.25
million, including the June and July MTNs, in fixed-rate senior
unsecured MTNs had been issued under the MTN program primarily
for the acquisition of neighborhood and community shopping
centers and the expansion and improvement of properties in the
Company's portfolio. These fixed-rate notes had maturities
ranging from seven to twelve years at the time of issuance and
bear interest at rates ranging from 6.70% to 7.91%. Interest on
these fixed-rate senior unsecured notes is payable semi-annually
in arrears.
During August 1998, the Company issued $60 million of floating-rate
MTNs which mature in August 2000 and bear interest at LIBOR plus
.15% per annum. The interest rate resets quarterly and is payable
quarterly in arrears. Concurrent with the issuance of these
MTN's, the Company entered into an interest rate swap agreement
for the term of these MTNs, which effectively fixed the interest
rate at 5.91% per annum. The proceeds from this MTN issuance were
used to prepay certain mortgage loans with a principal amount of
approximately $57 million bearing interest at 10.54% per annum
plus prepayment premiums of approximately $4.9 million
(See Note 9).
Additionally during August 1998, the Company issued $100 million of
remarketed reset notes under its MTN program. The remarketed
reset notes mature in August 2008 and bear interest initially at
a floating rate of LIBOR plus .30% per annum. After an initial
period of one year, the interest rate spread applicable to each
subsequent period will be determined pursuant to a remarketing
agreement between the Company and a financial institution. The
interest rate resets quarterly and is payable quarterly in
arrears. Concurrent with this issuance, the Company entered into
an interest rate swap agreement which effectively fixed the
interest rate at 5.92% per annum during the initial one-year
period. The proceeds from the MTN issuance were used, in part, to
repay $50 million MTNs that matured in July 1998.
In connection with the Price REIT Merger, the Company assumed $205
million of fixed-rate unsecured senior notes consisting of: (i)
$50 million which mature in June 2004 and bear interest at
7.125%, (ii) $55 million which mature November 2006 and bear
interest at 7.5% and (iii) $100 million which mature November
2000 and bear interest at 7.25% (collectively, "the Price REIT
Notes"). Interest is payable on the Price REIT Notes
semi-annually in arrears.
54
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
As of December 31, 1998, the Company had outstanding $100 million in
floating rate senior notes due 1999 bearing interest at LIBOR
plus .50%. Interest on these floating-rate, senior unsecured
notes resets quarterly and is payable quarterly in arrears.
During 1998, the Company entered into an interest rate swap
agreement which effectively fixed the interest rate at 6.165% per
annum for the remaining term of these notes (See Note 18).
As of December 31, 1998, the Company had $100 million in 6.5%
fixed-rate unsecured Senior Notes due 2003. Interest on these
senior unsecured notes is paid semi-annually in arrears.
The scheduled maturities of all unsecured senior notes payable as of
December 31, 1998, are approximately as follows (in millions of
dollars): 1999, $100.0; 2000, $160.0; 2003, $100.0 and
thereafter, $495.25.
In accordance with the terms of the Indenture, as amended, pursuant
to which the Company's senior, unsecured notes have been issued,
the Company is (a) subject to maintaining certain maximum
leverage ratios on both unsecured senior corporate and secured
debt, minimum debt service coverage ratios and minimum equity
levels, and (b) restricted from paying dividends in amounts that
exceed by more than $26 million the funds from operations, as
defined, generated through the end of the calendar quarter most
recently completed prior to the declaration of such dividend;
however, this dividend limitation does not apply to any
distributions necessary to maintain the Company's qualification
as a REIT providing the Company is in compliance with its total
leverage limitations.
The Company maintains a $215 million, unsecured revolving credit
agreement with a group of banks. Borrowings under this facility
are available for general corporate purposes, including the
funding of property acquisitions, development and redevelopment
costs. Interest on borrowings accrues at a spread (currently
.50%) to LIBOR or money-market rates, as applicable, which
fluctuates in accordance with changes in the Company's senior
debt ratings. A fee approximating .20% per annum is payable on
that portion of the facility which remains unused. Pursuant to
the terms of the agreement, the Company, among other things, is
(a) subject to maintaining certain maximum leverage ratios on
both unsecured senior corporate and secured debt, a minimum debt
service coverage ratio and minimum unencumbered asset and equity
levels, and (b) restricted from paying dividends in amounts that
exceed 90% of funds from operations, as defined, plus 10% of the
Company's stockholders' equity determined in accordance with
generally accepted accounting principles. There were no
borrowings outstanding under this facility at December 31, 1998.
This revolving credit facility is scheduled to expire in August
2001.
8. Mortgages Payable:
During 1998, the Company obtained mortgage financing aggregating
approximately $272.3 million on 20 of its properties. These
mortgages are non-recourse, non-cross collateralized, ten-year
fixed-rate first mortgages, bearing interest at a weighted
average rate of 6.585% per annum over the term of the loans. The
proceeds from the mortgages were used primarily for the
acquisition of neighborhood and community shopping centers.
In addition, the Company, through an affiliated entity, obtained
mortgage financing of approximately $9 million on two other
properties. These ten-year fixed-rate mortgages bear interest at
7% per annum for the term of the loans.
55
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Mortgages payable, collateralized by certain shopping center
properties and related tenants' leases, are generally due in
monthly installments of principal and/or interest which mature at
various dates through 2023. Interest rates range from
approximately 6.57% to 10.5% (weighted average interest rate of
7.27% as of December 31, 1998). The scheduled maturities of all
mortgages payable as of December 31, 1998, are approximately as
follows (in millions of dollars): 1999, $28.8; 2000, $16.5; 2001,
$4.8; 2002, $8.0; 2003, $6.0 and thereafter, $370.2.
Three of the Company's properties are encumbered by approximately
$13.5 million in floating-rate, tax-exempt mortgage bond
financing. The rates on the bonds are reset annually, at which
time bondholders have the right to require the Company to
repurchase the bonds. The Company has engaged a remarketing agent
for the purpose of offering for resale those bonds that are
tendered to the Company. All bonds tendered for redemption in the
past have been remarketed and the Company has arrangements,
including letters of credit, with banks to both collateralize the
principal amount and accrued interest on such bonds and to fund
any repurchase obligations.
9. Extraordinary Items:
During 1998, the Company prepaid certain mortgage loans resulting in
extraordinary charges of approximately $4.9 million, or, on a
per-basic share and diluted share basis, $.10 and $.09,
respectively, representing the premiums paid and other costs
written-off in connection with the early satisfaction of these
mortgage loans.
10. KC Holdings, Inc.:
To facilitate the Company's November 1991 initial public stock
offering(the "IPO"), forty-six shopping center properties and
certain other assets, together with indebtedness related thereto,
were transferred to subsidiaries of KC Holdings, Inc. ("KC
Holdings"), a newly-formed corporation that is owned by the
stockholders of the Company prior to the IPO. The Company
continues to manage eighteen of these shopping center properties
and was granted ten-year, fixed-price options to reacquire the
real estate assets owned by KC Holdings' subsidiaries, subject to
any liabilities outstanding with respect to such assets at the
time of an option exercise. As of December 31, 1998, KC Holdings'
subsidiaries had conveyed 14 shopping centers back to the Company
and had disposed of ten additional centers in transactions with
third parties. The members of the Company's Board of Directors
who are not also shareholders of KC Holdings unanimously approved
the purchase of each of the 14 shopping centers that have been
reacquired by the Company from KC Holdings.
Selected financial information for the twenty-two property interests
owned by KC Holdings' subsidiaries as of and for the year ended
December 31, 1998, is as follows: Real estate, net of accumulated
depreciation and amortization, $54.7 million; Notes and mortgages
payable, $58.8 million; Revenues from rental property, $11.7
million; Income from rental operations, $.3 million, after
depreciation and amortization deductions of $2.1 million; Income
adjustment for real estate joint ventures, net, $.6 million.
56
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
11. Fair Value Disclosure of Financial Instruments:
All financial instruments of the Company are reflected in the
accompanying Consolidated Balance Sheets at amounts which, in
management's estimation based upon an interpretation of available
market information and valuation methodologies (including
discounted cash flow analyses with regard to fixed rate debt)
considered appropriate, reasonably approximate their fair values.
Such fair value estimates are not necessarily indicative of the
amounts that would be realized upon disposition of the Company's
financial instruments.
12. Preferred and Common Stock Issuances:
During April and May 1998, the Company completed the sale of an
aggregate 3,039,507 shares of common stock in five separate
transactions consisting of (i) a primary public stock offering of
460,000 shares of common stock priced at $36.0625 per share, and
(ii) four direct placements of 415,945 shares, 546,075 shares,
837,000 shares and 780,487 shares of common stock priced at
$36.0625, $36.625, $36.25 and $38.4375 per share, respectively.
The shares of common stock sold in the direct placements were
deposited in separate unit investment trusts. The net proceeds
from these offerings totaled approximately $106.0 million, after
related transaction costs of approximately $5.9 million.
During July 1998, the Company completed the sale of an aggregate
1,315,498 shares of common stock in three separate transactions
consisting of (i) a primary public stock offering of 510,000
shares of common stock priced at $39.4375 per share and (ii) two
direct placements of 375,000 and 430,498 shares of common stock
priced at $38.2575 and $38.56 per share, respectively. The net
proceeds from these offerings totaled approximately $49.9
million, after related transaction costs of approximately $1.2
million.
During September 1998, the Company completed the sale of an aggregate
750,000 shares of common stock priced at $38.75 per share in a
primary public stock offering. In addition, during October 1998,
the Company sold an additional 112,500 shares of common stock
pursuant to an election by the underwriter to exercise, in full,
their over-allotment option. The net proceeds from these sales of
common stock totaled approximately $31.6 million, after related
transaction costs of approximately $1.8 million.
During November 1998, the Company completed the sale of an aggregate
1,395,000 shares of common stock in four separate transactions
consisting of primary public stock offerings of 650,000 shares,
170,000 shares, 475,000 shares and 100,000 shares of common stock
priced at $39.6875, $39.6875, $39.00 and $39.00 per share,
respectively. The net proceeds from these sales of common stock
totaled approximately $52.4 million after related transaction
costs of approximately $2.5 million.
During December 1998, the Company completed the sale of an aggregate
1,005,800 shares of common stock in three direct placements. The
transactions were each priced at $38.25 per share and provided
net proceeds to the Company of approximately $38.4 million, after
related transaction costs of approximately $.1 million.
On September 30, 1997, the Company completed a primary public stock
offering of 4,000,000 shares of common stock at $35.50 per share.
The net proceeds from this sale of common stock totaled
approximately $134.5 million, after related transaction costs of
approximately $7.5 million.
57
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
The net proceeds from these common stock offerings have been used for
general corporate purposes, including the acquisition of
neighborhood and community shopping centers, the expansion and
improvement of certain properties in the Company's portfolio, and
the redemption of the Class E Preferred Stock issued in
connection with the Merger.
During June 1998, in connection with the Merger, the Company issued
4,291,590 Class D Depositary Shares (each such depositary share
representing a one-tenth fractional interest in the Class D
Preferred Stock) and 650,000 Class E Depositary Shares (each
depositary share representing a one-tenth fractional interest in
the Class E Preferred Stock). During November 1998, the Company
exercised its option to redeem all of the Class E Preferred
Stock (represented by the Class E Depositary Shares). (See Note
3.)
Dividends on the Class D Depositary Shares are cumulative and payable
at the rate per depositary share equal to the greater of (i) 7.5%
per annum based upon a $25 per share initial value or $1.875 per
share or (ii) the cash dividend on the shares of the Company's
common stock into which a Class D Depositary Share is convertible
plus $0.0275 per quarter. The Class D Depositary Shares are
convertible into the Company's common stock at a conversion price
of $40.25 per share of common stock at any time by the holder and
may be redeemed by the Company at the conversion price in shares
of the Company's common stock at any time after June 19, 2001 if,
for any 20 trading days within any period of 30 consecutive
trading days, including the last day of such period, the average
closing price per share of the Company's common stock exceeds
120% of the conversion price or $48.30 per share, subject to
certain adjustments.
The dividend rate on the Class E Preferred Stock (represented by the
Class E Depositary Shares) was equal to LIBOR plus 2% per annum,
adjusted quarterly, and had an initial dividend rate of 7.68% per
annum.
The Class D Preferred Stock (represented by the Class D Depositary
Shares outstanding) ranks pari passu with the Company's 7-3/4%
Class A Cumulative Redeemable Preferred Stock, 8-1/2% Class B
Cumulative Redeemable Preferred Stock and the 8-3/8% Class C
Cumulative Redeemable Preferred Stock as to voting rights,
priority for receiving dividends and liquidation preferences as
set forth below.
At December 31, 1998, the Company has outstanding 3,000,000
Depositary Shares (the "Class A Depositary Shares"), each such
Class A Depositary Share representing a one-tenth fractional
interest of a share of the Company's 7-3/4% Class A Cumulative
Redeemable Preferred Stock, par value $1.00 per share(the "Class
A Preferred Stock"), 2,000,000 Depositary Shares (the "Class B
Depositary Shares"), each such Class B Depositary Share
representing a one-tenth fractional interest of a share of the
Company's 8-1/2% Class B Cumulative Redeemable Preferred Stock,
par value $1.00 per share (the "Class B Preferred Stock"),
4,000,000 Depositary Shares ("the Class C Depositary Shares"),
each such Class C Depositary Share representing a one-tenth
fractional interest of a share of the Company's 8-3/8% Class C
Cumulative Redeemable Preferred Stock, par value $1.00 per share
(the "Class C Preferred Stock").
58
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Dividends on the Class A Depositary Shares are cumulative and payable
quarterly in arrears at the rate of 7-3/4% per annum based on the
$25 per share initial offering price, or $1.9375 per depositary
share. The Class A Depositary Shares are redeemable, in whole or
in part, for cash on or after September 23, 1998 at the option of
the Company, at a redemption price of $25 per depositary share,
plus any accrued and unpaid dividends thereon. The Class A
Depositary Shares are not convertible or exchangeable for any
other property or securities of the Company. The Class A
Preferred Stock (represented by the Class A Depositary Shares
outstanding) ranks pari passu with the Company's Class B
Preferred Stock, Class C Preferred Stock and Class D Preferred
Stock as to voting rights, priority for receiving dividends and
liquidation preferences as set forth below.
Dividends on the Class B Depositary Shares are cumulative and payable
quarterly in arrears at the rate of 8-1/2% per annum based on the
$25 per share initial offering price, or $2.125 per depositary
share. The Class B Depositary Shares are redeemable, in whole or
in part, for cash on or after July 15, 2000 at the option of the
Company at a redemption price of $25 per depositary share, plus
any accrued and unpaid dividends thereon. The redemption price of
the Class B Preferred Stock may be paid solely from the sale
proceeds of other capital stock of the Company, which may include
other classes or series of preferred stock. The Class B
Depositary Shares are not convertible or exchangeable for any
other property or securities of the Company. The Class B
Preferred Stock (represented by the Class B Depositary Shares
outstanding) ranks pari passu with the Company's Class A
Preferred Stock, Class C Preferred Stock and Class D Preferred
Stock as to voting rights, priority for receiving dividends and
liquidation preferences as set forth below.
Dividends on the Class C Depositary Shares are cumulative and payable
quarterly in arrears at the rate of 8-3/8% per annum based on the
$25 per share initial offering price, or $2.0938 per depositary
share. The Class C Depositary Shares are redeemable, in whole or
in part, for cash on or after April 15, 2001 at the option of the
Company at a redemption price of $25 per depositary share, plus
any accrued and unpaid dividends thereon. The redemption price of
the Class C Preferred Stock may be paid solely from the sale
proceeds of other capital stock of the Company, which may include
other classes or series of preferred stock. The Class C
Depositary Shares are not convertible or exchangeable for any
other property or securities of the Company. The Class C
Preferred Stock (represented by the Class C Depositary Shares
outstanding) ranks pari passu with the Company's Class A
Preferred Stock, Class B Preferred Stock and Class D Preferred
Stock as to voting rights, priority for receiving dividends and
liquidation preferences as set forth below.
Voting Rights - As to any matter on which the Class A Preferred
Stock, Class B Preferred Stock, Class C Preferred Stock and Class
D Preferred Stock (collectively, the "Preferred Stock") may vote,
including any action by written consent, each share of Preferred
Stock shall be entitled to 10 votes, each of which 10 votes may
be directed separately by the holder thereof. With respect to
each share of Preferred Stock, the holder thereof may designate
up to 10 proxies, with each such proxy having the right to vote a
whole number of votes (totaling 10 votes per share of Preferred
Stock). As a result, each Class A, each Class B, each Class C and
each Class D Depositary Share is entitled to one vote.
59
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Liquidation Rights - In the event of any liquidation, dissolution or
winding up of the affairs of the Company, the Preferred Stock
holders are entitled to be paid, out of the assets of the Company
legally available for distribution to its stockholders, a
liquidation preference of $250.00 per share ($25 per Class A,
Class B, Class C and Class D Depositary Share, respectively),
plus an amount equal to any accrued and unpaid dividends to the
date of payment, before any distribution of assets is made to
holders of the Company's common stock or any other capital stock
that ranks junior to the Preferred Stock as to liquidation
rights.
13. Dispositions of Real Estate:
During January 1998, the Company disposed of a property in Pinellas
Park, Florida. Proceeds from the disposition totaling
approximately $2.3 million, together with an additional $7.1
million cash investment, were used to acquire an exchange
shopping center property located in Cranston, Rhode Island.
During December 1998, the Company disposed of a vacant distribution
center and adjacent facility located in O'Fallon, Missouri, which
were acquired as part of the Venture transactions, for $10
million, which amount approximated their net book value.
14. Transactions with Related Parties:
The Company provides management services for shopping centers owned
principally by affiliated entities and various real estate joint
ventures in which certain stockholders of the Company have
economic interests.
Such services are performed pursuant to management agreements which
provide for fees based upon a percentage of gross revenues from
the properties and other direct costs incurred in connection with
management of the centers. The Consolidated Statements of Income
include management fee income from KC Holdings of approximately
$.6 million during each of the three years ending December 31,
1998, 1997, and 1996.
Reference is made to Notes 5 and 10 for additional information
regarding transactions with related parties.
15. Commitments and Contingencies:
The Company and its subsidiaries are engaged in the operation of
shopping centers which are either owned or held under long-term
leases which expire at various dates through 2076. The Company
and its subsidiaries, in turn, lease premises in these centers to
tenants pursuant to lease agreements which provide for terms
ranging generally from 5 to 25 years and for annual minimum
rentals plus incremental rents based on operating expense levels
and tenants' sales volumes. Annual minimum rentals plus
incremental rents based on operating expense levels comprised
approximately 98%, 98% and 97% of total revenues from rental
property for the years ended December 31, 1998, 1997 and 1996,
respectively.
The future minimum revenues from rental property under the terms of
all noncancellable tenant leases, assuming no new or renegotiated
leases are executed for such premises, for future years are
approximately as follows (in millions of dollars): 1999, $337.1;
2000, $319.2; 2001, $297.3; 2002, $276.1; 2003, $253.5 and
thereafter, $2,321.6.
60
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Minimum rental payments under the terms of all noncancellable
operating leases pertaining to its shopping center portfolio for
future years are approximately as follows (in millions of
dollars): 1999, $13.5; 2000, $12.9; 2001, $11.6; 2002, $10.7;
2003, $9.6 and thereafter $169.1.
16. Incentive Plans:
The Company maintains a stock option plan (the "Plan") pursuant to
which a maximum 6,000,000 shares of the Company's common stock
may be issued for qualified and non-qualified options. Options
granted under the Plan generally vest ratably over a three-year
term, expire ten years from the date of grant and are exercisable
at the market price on the date of grant, unless otherwise
determined by the Board in its sole discretion. In addition, the
Plan provides for the granting of certain options to each of the
Company's non-employee directors (the "Independent Directors")
and permits such Independent Directors to elect to receive
deferred stock awards in lieu of directors' fees.
Information with respect to stock options under the Plan for the
years ended December 31, 1998, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
Weighted Average
----------------
Exercise Price
--------------
Shares Per Share
--------- ---------
<S> <C> <C>
Options outstanding, December 31, 1995 1,452,228 $21.44
Exercised (163,582) $19.36
Granted 315,500 $28.32
---------
Options outstanding, December 31, 1996 1,604,146 $23.01
Exercised (179,750) $20.94
Granted 470,700 $31.72
---------
Options outstanding, December 31, 1997 1,895,096 $25.37
Exercised (150,766) $20.99
Granted 1,023,500 $37.32
---------
Options outstanding, December 31, 1998 2,767,830 $30.03
=========
Options exercisable -
December 31, 1996 954,175 $20.84
======= ======
December 31, 1997 1,126,093 $22.39
========= ======
December 31, 1998 1,326,224 $24.13
========= ======
</TABLE>
The exercise prices for options outstanding as of December 31, 1998
range from $13.33 to $39.94 per share. The weighted average
remaining contractual life for options outstanding as of December
31, 1998 was approximately 7.8 years. Options to purchase
2,316,420, 329,673 and 800,373 shares of the Company's common
stock were available for issuance under the Plan at December 31,
1998, 1997 and 1996 respectively.
The Company has elected to adopt the disclosure-only provisions of
Statement of Financial Accounting Standards No. 123 "Accounting
for Stock-Based Compensation". Accordingly, no compensation cost
has been recognized with regard to options granted under the Plan
in the accompanying Consolidated Statements of Income. If
stock-based compensation costs had been recognized based on the
estimated fair values at the dates of grant for options awarded
during 1998, 1997 and 1996 net income and net income per common
share for these calendar years would have been reduced by
approximately $1.4 million or $.03 per basic share, $.7 million,
or $.02 per basic share and $.4 million, or $.01 per basic share,
respectively.
61
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
These pro forma adjustments to net income and net income per basic
common share assume fair values of each option grant estimated
using the Black-Scholes option pricing formula. The more
significant assumptions underlying the determination of such fair
values for options grantedduring 1998, 1997 and 1996 include: (i)
weighted average risk-free interest rates of 5.07%, 6.18% and
6.24%, respectively; (ii) weighted average expected option lives
of 5.6 years, 8.2 years and 7.25 years, respectively; (iii) an
expected volatility of 15.76%, 15.65% and 15.79%, respectively,
and (iv) an expected dividend yield of 6.40%, 6.44% and 6.82%,
respectively. The per share weighted average fair value at the
dates of grant for options awarded during 1998, 1997 and 1996 was
$2.86, $3.02 and $2.50, respectively.
The Company maintains a 401(k) retirement plan covering substantially
all officers and employees which permits participants to defer up
to a maximum 10% of their eligible compensation. This deferred
compensation, together with Company matching contributions which
generally equal employee deferrals up to a maximum of 5%, is
fully vested and funded as of December 31, 1998. Company
contributions to the plan totaled less than $.3 million for each
of the years ended December 31, 1998, 1997 and 1996.
17. Supplemental Financial Information:
The following represents the results of operations, expressed in
thousands except per share amounts, for each quarter during years
1998 and 1997.
<TABLE>
<CAPTION>
1998 (Unaudited)
--------------------------------------------------------------------
Mar. 31 June 30 Sept. 30 Dec. 31
------- ------- -------- -------
<S> <C> <C> <C> <C>
Revenues from rental property $63,112 $69,341 $98,085 $108,260
Income before extraordinary items $25,484 $27,530 $36,107 $38,046
Net income $25,484 $27,530 $31,255 $37,997
Per common Share:
Income before extraordinary items:
Basic $.52 $.51 $.50 $.53
Diluted $.51 $.50 $.49 $.52
Net income:
Basic $.52 $.51 $.41 $.53
Diluted $.51 $.50 $.41 $.52
<CAPTION>
1997 (Unaudited)
------------------------------------------------------------------
Mar. 31 June 30 Sept. 30 Dec. 31
------- ------- -------- -------
<S> <C> <C> <C> <C>
Revenues from rental property $45,195 $45,276 $50,823 $57,635
Net income $20,604 $21,045 $20,641 $23,546
Net income, per common share:
Basic $.44 $.45 $.44 $.47
Diluted $.44 $.45 $.43 $.46
</TABLE>
62
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
Interest paid during years 1998, 1997 and 1996 approximated $60.7
million, $29.9 million and $26.9 million, respectively.
Accounts and notes receivable in the accompanying Consolidated
Balance Sheets are net of estimated unrecoverable amounts of
approximately $3.2 million and $1.8 million, respectively, at
December 31, 1998 and 1997.
18. Subsequent Events:
Property Acquisitions / Dispositions
In January and February 1999, the Company acquired five neighborhood
and community shopping center properties comprising approximately
.7 million square feet of GLA in four states for an aggregate
price of approximately $79.0 million, including the assumption of
$8.5 million of mortgage debt encumbering one of the properties.
During February 1999, the Company disposed of a property in
Morrisville, Pennsylvania. Cash proceeds from the disposition
totaling $1.6 million approximated its net book value.
Financings
During February 1999, the Company issued $130 million of 6-7/8%
fixed-rate Senior Notes due 2009. Interest on the notes is
payable semi-annually in arrears. The notes were sold at 99.85%
of par value. Net proceeds from the issuance totaling
approximately $128.9 million, after related transaction costs of
approximately $.9 million, were used, in part, to repay $100
million floating-rate senior notes that matured during February
1999 and for general corporate purposes.
19. Pro Forma Financial Information (Unaudited):
As discussed in Notes 2, 3 and 13, the Company and certain of its
subsidiaries acquired and disposed of interests in shopping
center properties during 1998. The pro forma financial
information set forth below is based upon the Company's
historical Consolidated Statements of Income for the years ended
December 31, 1998 and 1997, adjusted to give effect to these
transactions as of January 1, 1997.
The pro forma financial information is presented for informational
purposes only and may not be indicative of what actual results of
operations would have been had the transactions occurred on
January 1, 1997, nor does it purport to represent the results of
operations for future periods. (Amounts presented in millions of
dollars, except per share figures.)
Years ended December 31, 1998 1997
---- ----
Revenues from rental property $410.0 $349.4
Income before extraordinary items $149.1 $139.8
Net income $144.2 $139.8
Per common Share:
Income before extraordinary items:
Basic $2.13 $2.20
Diluted $2.11 $2.18
Net income:
Basic $2.04 $2.20
Diluted $2.02 $2.18
63
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
For Years Ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
Balance at Charged to
Beginning of Charged to valuation Balance at end
Period expenses accounts Deductions of period
----------------- --------------- ------------------ ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1998
Allowance for
uncollectable accounts $1,800,000 $2,050,000 $ 1,300,000 $ 2,000,000 $ 3,150,000
=============== ============= ============== =========== =============
Year Ended December 31, 1997
Allowance for
uncollectable accounts $1,350,000 $910,000 $ -- $ 460,000 $ 1,800,000
=============== ============= ============== =========== ============
Year Ended December 31, 1996
Allowance for
uncollectable accounts $1,350,000 $955,000 $ -- $ 955,000 $ 1,350,000
=============== ============= ============== ============ ============
</TABLE>
64
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDARIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1998
SCHEDULE III
<TABLE>
<CAPTION>
INITIAL COST TOTAL COST
BUILDING AND SUBSEQUENT BUILDINGS AND
PROPERTIES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS
---------- ---- ------------ -------------- ---- ------------
<S> <C> <C> <C> <C> <C>
BOCA RATON $573,875 $2,295,501 $867,261 $573,875 $3,162,762
WHITEHALL 432,652 770,159 183,153 432,652 953,312
OGDEN 213,818 855,275 465,600 213,818 1,320,875
ORLANDO 923,956 3,646,904 1,828,967 1,172,119 5,227,708
PLAINVIEW 263,693 584,031 9,470,272 263,693 10,054,303
POMPANO BEACH 97,169 874,442 1,215,842 97,169 2,090,284
LIVONIA 178,785 925,818 630,242 178,785 1,556,060
LAUDERDALE LAKES 342,420 2,416,645 2,137,057 342,420 4,553,702
FERN PARK 225,000 902,000 2,351,777 225,000 3,253,777
ADDISON 0 753,343 1,100,049 0 1,853,392
LARGO 293,686 792,119 1,239,676 293,686 2,031,795
WINSTON-SALEM 540,667 719,655 3,706,733 540,667 4,426,388
MELBOURNE 0 1,754,000 2,272,584 0 4,026,584
ST. PETERSBURG 0 917,360 681,718 0 1,599,078
GROVE GATE 365,893 1,049,172 1,048,494 365,893 2,097,666
UPPER ARLINGTON 504,256 2,198,476 6,672,770 1,255,544 8,119,958
SHILOH SPRING RD. 0 1,735,836 2,290,519 0 4,026,355
FELBRAM 72,971 302,579 401,599 72,971 704,178
LEESBURG 0 171,636 97,728 0 269,364
FOREST PARK 141,200 564,800 64,990 141,200 629,790
LARGO EAST BAY 2,832,296 11,329,185 779,937 2,832,296 12,109,122
LEXINGTON 1,675,031 6,848,209 4,849,819 1,675,031 11,698,028
CLAWSON 1,624,771 6,578,142 2,119,979 1,624,771 8,698,121
CHARLOTTE 919,251 3,570,981 906,378 919,251 4,477,359
LAFAYETTE 230,402 1,305,943 65,497 230,402 1,371,440
FARMINGTON 1,098,426 4,525,723 1,259,066 1,098,426 5,784,789
WEST MIFFLIN 475,815 1,903,231 646,514 475,815 2,549,745
BRADENTON 125,000 299,253 323,963 125,000 623,216
GREENWOOD 423,371 1,883,421 1,243,942 423,371 3,127,363
GRAVOIS 1,032,416 4,455,514 872,488 1,032,416 5,328,002
JENNINGS 257,782 1,031,128 1,233,616 257,782 2,264,744
DALLAS 1,299,632 5,168,727 5,373,565 1,299,632 10,542,292
TUTTLE BEE SARASOTA 254,961 828,465 1,607,783 254,961 2,436,248
LAUREL 349,562 1,398,250 668,130 349,562 2,066,380
LAUREL 274,580 1,100,968 - 274,580 1,100,968
EAST ORLANDO 491,676 1,440,000 2,526,528 1,007,882 3,450,322
OTTAWA 137,775 784,269 303,414 137,775 1,087,683
BLOOMINGTON 805,521 2,222,353 2,579,854 805,521 4,802,207
RALEIGH 5,208,885 20,885,792 1,631,675 5,208,885 22,517,467
CANTON HILLS 500,980 2,020,274 1,038,157 500,980 3,058,431
SAVANNAH 2,052,270 8,232,978 327,564 2,052,270 8,560,542
MACON 262,700 1,487,860 1,481,094 349,326 2,882,328
CANTON 792,985 1,459,031 4,509,866 792,985 5,968,897
CHARLOTTE 1,783,400 7,139,131 15,209 1,783,400 7,154,340
PALATKA 130,844 556,658 897,013 130,844 1,453,671
EAST STROUDSBURG 1,050,000 2,372,628 671,982 1,050,000 3,044,610
POUGHKEEPSIE 876,548 4,695,659 1,227,104 876,548 5,922,763
BARBERTON 505,590 1,948,135 119,615 505,590 2,067,750
HAGERSTOWN 541,389 2,165,555 967,899 541,389 3,133,454
ELGIN 842,555 2,108,674 1,368,285 842,555 3,476,959
GRAND HAVEN 356,800 1,532,689 1,190,674 356,800 2,723,363
HOUSTON 275,000 507,588 191,639 275,000 699,227
WICKLIFFE 610,991 2,471,965 1,353,159 610,991 3,825,124
LEOMINSTER 3,732,508 6,754,092 29,319,716 4,933,640 34,872,676
LAUDERHILL 1,002,733 2,602,415 9,135,669 1,774,443 10,966,374
CAMBRIDGE 0 1,848,195 809,892 473,060 2,185,027
OLMSTED 167,337 2,815,856 930,580 167,337 3,746,436
LEMAY 125,879 503,510 159,725 125,879 663,235
AKRON WATERLOO 437,277 1,912,222 209,678 437,277 2,121,900
BRUNSWICK 771,765 6,058,560 289,996 771,765 6,348,556
WEST MIFFLIN HILLS 654,366 3,199,729 6,864,887 654,366 10,064,616
CHARLESTON 770,000 3,132,092 4,110,219 770,000 7,242,311
MESQUITE 520,340 2,081,356 528,652 520,340 2,610,008
BELLEVUE 405,217 1,743,573 101,153 405,217 1,844,726
ELSMERE 0 3,185,642 - 0 3,185,642
MADISON 0 4,133,904 2,296,477 0 6,430,381
SPRINGFIELD 919,998 4,981,589 2,493,557 919,998 7,475,146
CHERRY HILL 2,417,583 6,364,094 920,457 2,417,583 7,284,551
NANUET 798,932 2,361,900 1,473,214 798,932 3,835,114
OAKCREEK 1,245,870 4,339,637 3,970,635 1,245,870 8,310,272
NORRISTOWN 686,134 2,664,535 3,199,738 774,084 5,776,323
SPRINGBORO PIKE 1,854,527 2,572,518 2,493,276 1,854,527 5,065,794
LIMA 770,121 3,080,479 561,651 770,121 3,642,130
CHARLES TOWN 602,000 3,725,871 11,060,667 602,000 14,786,538
MUSKEGON 391,500 958,500 742,640 391,500 1,701,140
NORTH MIAMI 732,914 4,080,460 6,730,334 732,914 10,810,794
NEW KENSINGTON 521,945 2,548,322 725,212 521,945 3,273,534
PENN HILLS 0 1,737,289 - 0 1,737,289
BEAVERCREEK 635,228 3,024,722 2,495,349 635,228 5,520,071
<CAPTION>
TOTAL TOTAL COST, DATE OF
ACCUMULATED NET OF ACCUMULATED CONSTRUCTION(C)
PROPERTIES TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A)
---------- ----- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
BOCA RATON $3,736,637 $524,324 $3,212,313 $0 1992(A)
WHITEHALL 1,385,964 721,571 664,393 0 1967(C)
OGDEN 1,534,693 729,293 805,400 0 1967(C)
ORLANDO 6,399,827 549,479 5,850,348 0 1995(A)
PLAINVIEW 10,317,996 1,648,265 8,669,731 0 1969(C)
POMPANO BEACH 2,187,453 1,012,476 1,174,977 0 1968(C)
LIVONIA 1,734,845 413,201 1,321,644 0 1968(C)
LAUDERDALE LAKES 4,896,122 2,902,912 1,993,210 0 1968(C)
FERN PARK 3,478,777 1,021,217 2,457,560 0 1968(C)
ADDISON 1,853,392 922,995 930,397 0 1968(C)
LARGO 2,325,481 1,356,804 968,677 0 1968(C)
WINSTON-SALEM 4,967,055 1,090,999 3,876,056 0 1969(C)
MELBOURNE 4,026,584 1,561,828 2,464,756 0 1968(C)
ST. PETERSBURG 1,599,078 586,422 1,012,656 0 1968(C)
GROVE GATE 2,463,559 1,102,222 1,361,337 0 1968(C)
UPPER ARLINGTON 9,375,502 3,604,914 5,770,588 0 1969(C)
SHILOH SPRING RD. 4,026,355 2,402,928 1,623,427 0 1969(C)
FELBRAM 777,149 422,238 354,911 0 1970(C)
LEESBURG 269,364 188,212 81,152 0 1969(C)
FOREST PARK 770,990 409,622 361,368 0 1969(C)
LARGO EAST BAY 14,941,418 2,170,309 12,771,109 0 1992(A)
LEXINGTON 13,373,059 1,326,058 12,047,001 0 1993(A)
CLAWSON 10,322,892 958,962 9,363,930 0 1993(A)
CHARLOTTE 5,396,610 395,225 5,001,385 0 1995(A)
LAFAYETTE 1,601,842 845,683 756,159 0 1971(C)
FARMINGTON 6,883,215 660,684 6,222,531 0 1993(A)
WEST MIFFLIN 3,025,560 259,919 2,765,641 0 1993(A)
BRADENTON 748,216 315,462 432,754 0 1968(C)
GREENWOOD 3,550,734 1,295,979 2,254,755 0 1970(C)
GRAVOIS 6,360,418 3,093,463 3,266,955 0 1972(C)
JENNINGS 2,522,526 215,500 2,307,026 0 1971(C)
DALLAS 11,841,924 8,092,560 3,749,364 0 1969(C)
TUTTLE BEE SARASOTA 2,691,209 1,175,101 1,516,108 0 1970(C)
LAUREL 2,415,942 277,286 2,138,656 0 1995(A)
LAUREL 1,375,548 696,756 678,792 0 1972(C)
EAST ORLANDO 4,458,204 1,368,689 3,089,515 0 1971(C)
OTTAWA 1,225,458 896,848 328,610 0 1970(C)
BLOOMINGTON 5,607,728 1,469,381 4,138,347 0 1972(C)
RALEIGH 27,726,352 2,534,757 25,191,595 0 1993(A)
CANTON HILLS 3,559,411 284,778 3,274,633 0 1993(A)
SAVANNAH 10,612,812 1,161,503 9,451,309 0 1993(A)
MACON 3,231,654 1,199,305 2,032,349 0 1969(C)
CANTON 6,761,882 2,266,925 4,494,957 0 1972(C)
CHARLOTTE 8,937,740 976,317 7,961,423 0 1993(A)
PALATKA 1,584,515 713,623 870,892 0 1970(C)
EAST STROUDSBURG 4,094,610 1,583,494 2,511,116 0 1973(C)
POUGHKEEPSIE 6,799,311 3,115,895 3,683,416 0 1972(C)
BARBERTON 2,573,340 1,310,903 1,262,437 0 1972(C)
HAGERSTOWN 3,674,843 1,487,124 2,187,719 0 1973(C)
ELGIN 4,319,514 1,390,732 2,928,782 0 1972(C)
GRAND HAVEN 3,080,163 1,050,581 2,029,582 0 1976(C)
HOUSTON 974,227 545,978 428,249 0 1973(C)
WICKLIFFE 4,436,115 259,333 4,176,782 0 1995(A)
LEOMINSTER 39,806,316 9,776,598 30,029,718 0 1975(A)
LAUDERHILL 12,740,817 0 12,740,817 0 1974(C)
CAMBRIDGE 2,658,087 1,251,987 1,406,100 0 1973(C)
OLMSTED 3,913,773 2,497,307 1,416,466 0 1973(C)
LEMAY 789,114 374,877 414,237 0 1974(C)
AKRON WATERLOO 2,559,177 1,400,147 1,159,030 0 1975(C)
BRUNSWICK 7,120,321 4,211,211 2,909,110 0 1975(C)
WEST MIFFLIN HILLS 10,718,982 3,718,331 7,000,651 0 1973(C)
CHARLESTON 8,012,311 1,375,015 6,637,296 0 1978(C)
MESQUITE 3,130,348 218,973 2,911,375 0 1995(A)
BELLEVUE 2,249,943 1,333,232 916,711 0 1976(A)
ELSMERE 3,185,642 2,013,324 1,172,318 0 1979(C)
MADISON 6,430,381 3,221,945 3,208,436 0 1978(C)
SPRINGFIELD 8,395,144 4,021,619 4,373,525 3,425,000 1983(A)
CHERRY HILL 9,702,134 2,801,007 6,901,127 4,755,000 1985(C)
NANUET 4,634,046 1,417,325 3,216,721 0 1984(A)
OAKCREEK 9,556,142 2,820,041 6,736,101 4,920,000 1984(A)
NORRISTOWN 6,550,407 2,545,149 4,005,258 0 1984(A)
SPRINGBORO PIKE 6,920,321 2,053,539 4,866,782 0 1985(C)
LIMA 4,412,251 334,533 4,077,718 0 1995(A)
CHARLES TOWN 15,388,538 3,414,981 11,973,557 0 1985(A)
MUSKEGON 2,092,640 935,640 1,157,000 0 1985(A)
NORTH MIAMI 11,543,708 3,294,593 8,249,115 0 1985(A)
NEW KENSINGTON 3,795,479 2,003,958 1,791,521 0 1986(A)
PENN HILLS 1,737,289 1,108,553 628,736 0 1986(A)
BEAVERCREEK 6,155,299 2,411,890 3,743,409 0 1986(A)
</TABLE>
65
<PAGE>
<TABLE>
<CAPTION>
INITIAL COST TOTAL COST
BUILDING AND SUBSEQUENT BUILDINGS AND
PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS
---------- ---- ----------- -------------- ---- ------------
<S> <C> <C> <C> <C> <C>
HAMPTON BAYS 1,495,105 5,979,320 41,919 1,495,105 6,021,239
BRIDGEHAMPTON 1,811,752 3,107,232 21,778,249 1,811,752 24,885,481
EASTERN BLVD. 412,016 1,876,962 169,942 412,016 2,046,904
E. PROSPECT ST. 604,826 2,755,314 265,370 604,826 3,020,684
W. MARKET ST. 188,562 1,158,307 - 188,562 1,158,307
MIDDLETOWN 207,283 1,174,603 447,331 207,283 1,621,934
UPPER ALLEN 445,743 1,782,972 165,450 445,743 1,948,422
GETTYSBURG 74,626 671,630 101,519 74,626 773,149
MARTINSBURG 242,634 1,273,828 628,937 242,634 1,902,765
SOUTH EAST SARASOTA 1,283,400 5,133,544 1,133,522 1,440,264 6,110,202
AIKEN 980,808 3,923,234 43,200 980,808 3,966,434
TYVOLA RD. 0 4,736,345 1,494,281 0 6,230,626
RACINE 1,403,082 5,612,330 1,171,905 1,403,082 6,784,235
WEST MIFFLIN 1,468,341 0 - 1,468,341 0
INDIANAPOLIS 447,600 3,607,193 1,898,487 447,600 5,505,680
RICHBORO 788,761 3,155,044 9,871,704 976,439 12,839,070
MILLER ROAD 1,138,082 4,552,327 1,425,775 1,138,082 5,978,102
SANFORD 3,406,565 13,648,041 1,377,997 3,406,565 15,026,038
CARLE PLACE 1,183,290 4,903,642 10,409,825 1,314,540 15,182,217
PLAZA EAST 1,236,149 4,944,597 2,071,416 1,236,149 7,016,013
PLAZA WEST 808,435 3,210,187 575,057 808,435 3,785,244
MENTOR 503,981 2,455,926 390,515 503,981 2,846,441
MORSE RD. 835,386 2,097,600 2,587,666 835,386 4,685,266
HAMILTON RD. 856,178 2,195,520 3,404,322 856,178 5,599,842
OLENTANGY RIVER RD. 764,517 1,833,600 2,197,502 764,517 4,031,102
SALEM AVE. 665,314 347,818 5,043,518 665,314 5,391,336
KETTERING 1,190,496 4,761,984 635,571 1,190,496 5,397,555
W. BROAD ST. 982,464 3,929,856 2,968,565 982,464 6,898,421
ELYRIA 781,728 3,126,912 52,741 781,728 3,179,653
RIDGE ROAD 1,285,213 4,712,358 516,953 1,285,213 5,229,311
SPRINGFIELD 842,976 3,371,904 168,204 842,976 3,540,108
MENTOR ERIE CMNS. 2,234,474 9,648,000 3,896,201 2,234,474 13,544,201
SPRINGDALE 3,205,653 14,619,732 4,661,221 3,205,653 19,280,953
WESTERVILLE 1,050,431 4,201,616 7,386,243 1,050,431 11,587,859
IRONDEQUOIT 1,234,250 8,190,181 - 1,234,250 8,190,181
WEST GATES 1,784,718 9,721,970 92,117 1,784,718 9,814,087
HENRIETTA 1,075,358 6,635,486 37,146 1,075,358 6,672,632
JONESBORO RD. &I-285 468,118 1,872,473 53,114 468,118 1,925,587
HAYDEN PLAZA NORTH 2,015,726 4,126,509 - 2,015,726 4,126,509
ALHAMBRA, COSTCO 4,995,639 19,982,557 - 4,995,639 19,982,557
CORDATA CENTER 4,971,910 19,898,194 - 4,971,910 19,898,194
MADISON PLAZA 5,758,998 23,045,565 - 5,758,998 23,045,565
CHULA VISTA, COSTCO 6,321,931 25,342,024 - 6,321,931 25,342,024
COPIAGUE, HOME DEPOT 3,888,574 15,614,297 - 3,888,574 15,614,297
CORONA HILLS, COSTCO 12,838,907 51,355,628 - 12,838,907 51,355,628
FAIRFAX, COSTCO 9,417,281 37,685,925 - 9,417,281 37,685,925
WEST FARM SHOPPING CENTER 5,166,190 20,819,671 - 5,166,190 20,819,671
GLENDALE, COSTCO 7,546,028 30,345,319 - 7,546,028 30,345,319
WENDOVER RIDGE 1,330,398 5,329,161 - 1,330,398 5,329,161
LA MIRADA THEATRE CENTER 8,639,473 34,597,403 - 8,639,473 34,597,403
RIDGEDALE FESTIVAL CENTER 2,992,609 11,976,725 - 2,992,609 11,976,725
METRO SQUARE 4,006,994 16,056,181 - 4,006,994 16,056,181
N. HAVEN, HOME DEPOT 7,291,995 29,186,370 - 7,291,995 29,186,370
CENNTENIAL PLAZA 4,575,336 18,327,650 - 4,575,336 18,327,650
TARGET PLAZA 2,555,741 10,217,921 - 2,555,741 10,217,921
PHOENIX, COSTCO 5,253,547 21,014,187 - 5,253,547 21,014,187
PISCATAWAY TOWN CENTER 3,765,878 15,087,330 - 3,765,878 15,087,330
SANTA ANA, HOME DEPOT 4,385,539 17,542,156 - 4,385,539 17,542,156
WHITE MARSH, COSTCO 3,334,491 13,337,966 - 3,334,491 13,337,966
WICHITA WEST GATE CENTER 2,688,432 10,767,765 - 2,688,432 10,767,765
SMOKETOWN 12,547,302 50,880,531 - 12,547,302 50,880,531
WOODGROVE FESTIVAL 4,929,633 20,372,625 - 4,929,633 20,372,625
ARBORETUM, CROSSING 6,598,084 26,437,313 - 6,598,084 26,437,313
CITY PLACE, DALLAS TX 2,092,425 8,474,500 - 2,092,425 8,474,500
BROADMOOR VILLAGE 1,235,311 4,947,069 - 1,235,311 4,947,069
CENTER AT BAYBROOK 6,555,737 26,222,950 - 6,555,737 26,222,950
SHOP AT VISTA RIDGE 3,257,199 13,029,416 - 3,257,199 13,029,416
VISTA RIDGE PLAZA 2,926,495 11,716,483 - 2,926,495 11,716,483
MESQUITE TOWN CENTER 3,544,652 14,230,819 - 3,544,652 14,230,819
RICHARDSON PLAZA 2,333,541 9,373,422 - 2,333,541 9,373,422
BRIDEWATER NJ 30,601,991 6,276,285 - 30,601,991 6,276,285
RENAISSANCE CENTER 9,104,379 36,540,873 - 9,104,379 36,540,873
KING KULLEN PLAZA 5,968,082 23,243,404 - 5,968,082 23,243,404
MARKET PLACE AT RIVERGATE 2,301,239 9,259,517 - 2,301,239 9,259,517
SYCAMORE PLAZA 1,382,500 5,532,900 - 1,382,500 5,532,900
PLAZA PASEO DEL-NORTE 4,480,702 17,968,171 - 4,480,702 17,968,171
FRANKLIN TOWNE CENTER 4,787,144 19,170,180 - 4,787,144 19,170,180
RIVERGATE, TN 3,038,561 12,157,408 - 3,038,561 12,157,408
CENTER OF THE HILLS, TX 2,923,585 11,706,145 - 2,923,585 11,706,145
VISTA RIDGE PHASE II 2,276,575 9,106,300 - 2,276,575 9,106,300
JUAN TABO, ALBUQUERQUE 1,141,200 4,566,817 - 1,141,200 4,566,817
TROLLEY STATION 3,303,682 13,218,740 - 3,303,682 13,218,740
OAK PARK COMMONS 4,705,024 18,889,681 - 4,705,024 18,889,681
NORTH WEST SQUARE 3,015,796 12,078,732 - 3,015,796 12,078,732
ST. CHARLES-UNDEVELOPED LAND, MO 2,040,517 0 - 2,040,517 0
<CAPTION>
TOTAL TOTAL COST, DATE OF
ACCUMULATED NET OF ACCUMULATED CONSTRUCTION(C)
PROPERTIES TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A)
---------- ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
HAMPTON BAYS 7,516,344 1,747,882 5,768,462 0 1989(A)
BRIDGEHAMPTON 26,697,233 5,505,819 21,191,414 0 1972(C)
EASTERN BLVD. 2,458,920 1,256,131 1,202,789 0 1987(A)
E. PROSPECT ST. 3,625,510 1,876,647 1,748,863 0 1986(A)
W. MARKET ST. 1,346,869 767,106 579,763 0 1986(A)
MIDDLETOWN 1,829,217 785,704 1,043,513 0 1986(A)
UPPER ALLEN 2,394,165 1,232,313 1,161,852 0 1986(A)
GETTYSBURG 847,775 511,168 336,607 0 1986(A)
MARTINSBURG 2,145,399 1,121,994 1,023,405 0 1986(A)
SOUTH EAST SARASOTA 7,550,466 1,553,870 5,996,596 0 1989(A)
AIKEN 4,947,242 1,170,910 3,776,332 0 1989(A)
TYVOLA RD. 6,230,626 3,023,676 3,206,950 0 1986(A)
RACINE 8,187,317 1,870,017 6,317,300 0 1988(A)
WEST MIFFLIN 1,468,341 0 1,468,341 0 1986(A)
INDIANAPOLIS 5,953,280 2,545,993 3,407,287 0 1986(A)
RICHBORO 13,815,509 2,958,322 10,857,187 0 1986(A)
MILLER ROAD 7,116,184 3,137,528 3,978,656 0 1986(A)
SANFORD 18,432,603 4,162,958 14,269,645 0 1989(A)
CARLE PLACE 16,496,757 563,546 15,933,211 0 1993(A)
PLAZA EAST 8,252,162 399,204 7,852,958 0 1995(A)
PLAZA WEST 4,593,679 186,597 4,407,082 0 1995(A)
MENTOR 3,350,422 1,029,258 2,321,164 0 1987(A)
MORSE RD. 5,520,652 1,309,102 4,211,550 0 1988(A)
HAMILTON RD. 6,456,020 1,478,879 4,977,141 0 1988(A)
OLENTANGY RIVER RD. 4,795,619 1,375,471 3,420,148 0 1988(A)
SALEM AVE. 6,056,650 1,183,395 4,873,255 3,596,557 1988(A)
KETTERING 6,588,051 1,592,028 4,996,023 3,407,265 1988(A)
W. BROAD ST. 7,880,885 1,655,134 6,225,751 3,785,850 1988(A)
ELYRIA 3,961,381 1,014,445 2,946,936 0 1988(A)
RIDGE ROAD 6,514,524 1,025,898 5,488,626 0 1992(A)
SPRINGFIELD 4,383,084 1,110,539 3,272,545 3,975,142 1988(A)
MENTOR ERIE CMNS. 15,778,675 2,826,092 12,952,583 4,164,435 1988(A)
SPRINGDALE 22,486,606 3,680,284 18,806,322 0 1992(A)
WESTERVILLE 12,638,290 1,994,429 10,643,861 0 1988(A)
IRONDEQUOIT 9,424,431 1,436,250 7,988,181 0 1993(A)
WEST GATES 11,598,805 1,264,300 10,334,505 0 1993(A)
HENRIETTA 7,747,990 1,136,257 6,611,733 0 1993(A)
JONESBORO RD. &I-285 2,393,705 549,661 1,844,044 0 1988(A)
HAYDEN PLAZA NORTH 6,142,235 42,003 6,100,232 0 1998(A)
ALHAMBRA, COSTCO 24,978,196 269,890 24,708,306 0 1998(A)
CORDATA CENTER 24,870,104 268,608 24,601,496 15,036,657 1998(A)
MADISON PLAZA 28,804,563 311,130 28,493,433 0 1998(A)
CHULA VISTA, COSTCO 31,663,955 341,544 31,322,411 0 1998(A)
COPIAGUE, HOME DEPOT 19,502,871 210,081 19,292,790 13,413,098 1998(A)
CORONA HILLS, COSTCO 64,194,535 693,644 63,500,891 0 1998(A)
FAIRFAX, COSTCO 47,103,206 508,770 46,594,436 31,959,140 1998(A)
WEST FARM SHOPPING CENTER 25,985,861 279,104 25,706,757 14,403,144 1998(A)
GLENDALE, COSTCO 37,891,347 407,676 37,483,671 24,728,057 1998(A)
WENDOVER RIDGE 6,659,559 71,875 6,587,684 4,046,409 1998(A)
LA MIRADA THEATRE CENTER 43,236,876 466,749 42,770,127 0 1998(A)
RIDGEDALE FESTIVAL CENTER 14,969,334 161,676 14,807,658 9,150,000 1998(A)
METRO SQUARE 20,063,175 216,478 19,846,697 0 1998(A)
N. HAVEN, HOME DEPOT 36,478,365 393,951 36,084,414 0 1998(A)
CENNTENIAL PLAZA 22,902,986 247,184 22,655,802 11,195,536 1998(A)
TARGET PLAZA 12,773,662 138,075 12,635,587 7,850,000 1998(A)
PHOENIX, COSTCO 26,267,734 283,824 25,983,910 0 1998(A)
PISCATAWAY TOWN CENTER 18,853,208 203,451 18,649,757 11,018,424 1998(A)
SANTA ANA, HOME DEPOT 21,927,695 236,929 21,690,766 0 1998(A)
WHITE MARSH, COSTCO 16,672,457 180,147 16,492,310 0 1998(A)
WICHITA WEST GATE CENTER 13,456,197 145,242 13,310,955 7,850,000 1998(A)
SMOKETOWN 63,427,833 677,871 62,749,962 40,963,579 1998(A)
WOODGROVE FESTIVAL 25,302,258 266,324 25,035,934 0 1998(A)
ARBORETUM, CROSSING 33,035,397 346,345 32,689,052 19,932,313 1998(A)
CITY PLACE, DALLAS TX 10,566,925 113,319 10,453,606 5,750,000 1998(A)
BROADMOOR VILLAGE 6,182,380 66,463 6,115,917 3,396,986 1998(A)
CENTER AT BAYBROOK 32,778,687 354,174 32,424,513 0 1998(A)
SHOP AT VISTA RIDGE 16,286,615 175,971 16,110,644 7,000,000 1998(A)
VISTA RIDGE PLAZA 14,642,978 158,207 14,484,771 6,000,000 1998(A)
MESQUITE TOWN CENTER 17,775,471 191,500 17,583,971 0 1998(A)
RICHARDSON PLAZA 11,706,963 126,070 11,580,893 6,793,971 1998(A)
BRIDEWATER NJ 36,878,276 0 36,878,276 0 1998(A)
RENAISSANCE CENTER 45,645,252 404,384 45,240,868 0 1998(A)
KING KULLEN PLAZA 29,211,486 323,077 28,888,409 0 1998(A)
MARKET PLACE AT RIVERGATE 11,560,756 121,873 11,438,883 0 1998(A)
SYCAMORE PLAZA 6,915,400 74,690 6,840,710 1,848,249 1998(A)
PLAZA PASEO DEL-NORTE 22,448,873 242,071 22,206,802 7,950,008 1998(A)
FRANKLIN TOWNE CENTER 23,957,324 258,627 23,698,697 12,762,265 1998(A)
RIVERGATE, TN 15,195,969 129,853 15,066,116 0 1998(A)
CENTER OF THE HILLS, TX 14,629,730 125,157 14,504,573 0 1998(A)
VISTA RIDGE PHASE II 11,382,875 38,883 11,343,992 6,000,000 1998(A)
JUAN TABO, ALBUQUERQUE 5,708,017 48,769 5,659,248 0 1998(A)
TROLLEY STATION 16,522,422 84,711 16,437,711 11,691,202 1998(A)
OAK PARK COMMONS 23,594,705 120,642 23,474,063 19,237,500 1998(A)
NORTH WEST SQUARE 15,094,528 77,328 15,017,200 0 1998(A)
ST. CHARLES-UNDEVELOPED LAND, MO 2,040,517 0 2,040,517 0 1998(A)
</TABLE>
66
<PAGE>
<TABLE>
<CAPTION>
INITIAL COST TOTAL COST
BUILDING AND SUBSEQUENT BUILDINGS AND
PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS
---------- ---- ----------- -------------- ---- -------------
<S> <C> <C> <C> <C> <C>
STATEN ISLAND 2,280,000 9,027,951 3,994,089 2,280,000 13,022,040
GASTONIA 2,467,696 9,870,785 364,222 2,467,696 10,235,007
MARGATE 2,948,530 11,754,120 1,184,077 2,948,530 12,938,197
CENTEREACH 1,182,650 4,735,779 16,410,087 1,417,098 20,911,418
WALKER 3,682,478 14,730,060 1,336,811 3,682,478 16,066,871
TAYLOR 1,451,397 5,806,263 59,406 1,451,397 5,865,669
WATERBURY 2,253,078 9,017,012 59,581 2,253,078 9,076,593
GREAT BARRINGTON 642,170 2,547,830 6,902,051 1,427,963 8,664,088
KISSIMMEE 1,328,536 5,296,652 1,515,262 1,328,536 6,811,914
WESTMONT 601,655 2,404,604 7,624,551 601,655 10,029,155
RIDGEWOOD 450,000 2,106,566 28,802 450,000 2,135,368
MELBOURNE 715,844 2,878,374 317,408 715,844 3,195,782
NORTH BRUNSWICK 3,204,978 12,819,912 12,506,129 3,204,978 25,326,041
SAND LAKE 3,092,706 12,370,824 723,708 3,092,706 13,094,532
STUART 2,109,677 8,415,323 291,562 2,109,677 8,706,885
ROCKINGHAM 2,660,915 10,643,660 7,923,134 2,660,915 18,566,794
CORAL SPRINGS 710,000 2,842,907 3,128,997 710,000 5,971,904
SPRINGFIELD 2,745,595 10,985,778 3,277,294 2,904,022 14,104,645
CHARLESTON 1,744,430 6,986,094 2,229,760 1,744,430 9,215,854
SAVANNAH 652,255 2,616,522 34,536 652,255 2,651,058
WEST PALM BEACH 550,896 2,298,964 339,979 550,896 2,638,943
SOUTH MIAMI 1,280,440 5,133,825 1,963,737 1,280,440 7,097,562
AUGUSTA 1,482,564 5,928,122 17,855 1,482,564 5,945,977
ALTAMONTE SPRINGS 770,893 3,083,574 - 770,893 3,083,574
KENT 2,261,530 0 - 2,261,530 0
ORLANDO 560,800 2,268,112 1,736,041 580,030 3,984,923
DURHAM 1,882,800 7,551,576 414,253 1,882,800 7,965,829
GARLAND 210,286 845,845 - 210,286 845,845
MARLTON PIKE 0 4,318,534 - 0 4,318,534
CAMDEN 0 1,000,570 79,366 0 1,079,936
CINNAMINSON 657,140 2,628,559 241,085 657,140 2,869,644
FLORENCE 1,465,661 6,011,013 - 1,465,661 6,011,013
PHOENIX 2,450,341 9,802,046 - 2,450,341 9,802,046
MORRISVILLE 627,864 2,511,457 (240,683) 627,864 2,270,774
CENTER SQUARE 731,888 2,927,551 - 731,888 2,927,551
PHILADELPHIA 731,888 2,927,551 - 731,888 2,927,551
FEASTERVILLE 520,521 2,082,083 29,197 520,521 2,111,280
WARRINGTON 268,194 1,072,774 116,629 268,194 1,189,403
WHITEHALL 0 5,195,577 9,231 0 5,204,808
HARRIS COUNTY 1,843,000 7,372,420 275,774 2,003,260 7,487,934
HAVERTOWN 731,888 2,927,551 - 731,888 2,927,551
EXTON 731,888 2,927,551 - 731,888 2,927,551
GALLERY, PHILADELPHIA PA 0 0 258,931 0 258,931
EASTWICK 889,001 2,762,888 2,386,166 889,001 5,149,054
UPPER DARBY 231,821 927,286 3,049,951 285,828 3,923,230
TAMPA 2,820,000 11,283,189 673,624 2,820,000 11,956,813
OCALA 1,980,000 7,927,484 443,713 1,980,000 8,371,197
BATON ROUGE 3,125,527 12,503,083 403,823 3,125,527 12,906,906
WHITE LAKE 2,300,050 9,249,607 1,085,937 2,300,050 10,335,544
THE SHOPS AT WEST MELBOURNE 2,200,000 8,829,541 - 2,200,000 8,829,541
LAFAYETTE 2,115,000 8,508,218 355,572 2,115,000 8,863,790
LAFAYETTE 812,810 3,252,269 707,178 812,810 3,959,447
MANASSAS 1,788,750 7,162,661 25,357 1,788,750 7,188,018
CORAL SPRINGS 1,649,000 6,626,301 15,385 1,649,000 6,641,686
STATEN ISLAND 2,940,000 11,811,964 32,904 2,940,000 11,844,868
GREENVILLE 2,209,812 8,850,864 - 2,209,812 8,850,864
MT. DORA 1,011,000 4,062,890 - 1,011,000 4,062,890
SOUTH PLAINES PLAZA, TX 1,890,000 7,577,145 - 1,890,000 7,577,145
KIMCO MESA 679, INC. AZ 2,915,000 11,686,291 - 2,915,000 11,686,291
DENVER WEST 38TH STREET 161,167 646,983 - 161,167 646,983
VILLAGE ON THE PARK 2,194,463 8,885,987 - 2,194,463 8,885,987
ENGLEWOOD PHAR MOR 805,837 3,232,650 - 805,837 3,232,650
HERITAGE WEST 1,526,576 6,124,074 - 1,526,576 6,124,074
AURORA QUINCY 1,148,317 4,608,249 - 1,148,317 4,608,249
SPRING CREEK COLORADO 1,423,260 5,718,813 - 1,423,260 5,718,813
AURORA EAST BANK 1,500,568 6,180,103 - 1,500,568 6,180,103
MARSHALL PLAZA, CRANSTON RI 1,886,600 7,575,302 - 1,886,600 7,575,302
N. CHARLESTON 2,965,748 11,895,294 18,105 2,965,748 11,913,399
KIMCO CARY 696, INC. 2,180,000 8,756,865 - 2,180,000 8,756,865
KIMCO LAFAYETTE MARKET PLACE 3,788,000 15,162,095 - 3,788,000 15,162,095
BAYSHORE GARDENS, BRADENTON FL 2,901,000 11,738,955 - 2,901,000 11,738,955
SANTEE TOWN CENTER 2,252,812 9,012,256 - 2,252,812 9,012,256
NORTH POINT SHOPPING CENTER 1,935,380 7,800,746 - 1,935,380 7,800,746
CEDAR HILL CROSSING 4,091,048 0 - 4,091,048 0
VILLAGE COMMONS SHOPPING CENTER 2,192,331 8,774,158 - 2,192,331 8,774,158
THE PIERS SHOPPING CENTER 1,990,000 7,964,165 - 1,990,000 7,964,165
MOLINE SHOPPING CENTER. IL 0 1,301,194 - 0 1,301,194
PADUCAH MALL, KY 0 1,047,281 - 0 1,047,281
PLAZA AT ROCKFORD, IL 0 83,158 - 0 83,158
SPRINGFIELD, MACARTHUR 0 131,091 - 0 131,091
RICHMOND 670,500 2,751,375 - 670,500 2,751,375
YONKERS 871,977 3,487,909 - 871,977 3,487,909
ALTON, BELTLINE HWY 329,532 1,987,981 - 329,532 1,987,981
KRIKWOOD 0 9,704,005 - 0 9,704,005
ST. LOUIS, CHRISTY BLVD. 809,087 4,430,514 - 809,087 4,430,514
<CAPTION>
TOTAL TOTAL COST, DATE OF
ACCUMULATED NET OF ACCUMULATED CONSTRUCTION(C)
PROPERTIES TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A)
---------- ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
STATEN ISLAND 15,302,040 3,197,108 12,104,932 4,801,996 1989(A)
GASTONIA 12,702,703 2,235,299 10,467,404 0 1989(A)
MARGATE 15,886,727 1,664,562 14,222,165 0 1993(A)
CENTEREACH 22,328,516 1,955,029 20,373,487 0 1993(A)
WALKER 19,749,349 1,921,548 17,827,801 0 1993(A)
TAYLOR 7,317,066 769,258 6,547,808 0 1993(A)
WATERBURY 11,329,671 1,200,883 10,128,788 5,506,288 1993(A)
GREAT BARRINGTON 10,092,051 373,437 9,718,614 0 1994(A)
KISSIMMEE 8,140,450 417,446 7,723,004 0 1996(A)
WESTMONT 10,630,810 474,370 10,156,440 0 1994(A)
RIDGEWOOD 2,585,368 271,080 2,314,288 0 1993(A)
MELBOURNE 3,911,626 359,457 3,552,169 0 1994(A)
NORTH BRUNSWICK 28,531,019 1,759,892 26,771,127 0 1994(A)
SAND LAKE 16,187,238 1,518,846 14,668,392 0 1994(A)
STUART 10,816,562 967,236 9,849,326 0 1994(A)
ROCKINGHAM 21,227,709 1,407,003 19,820,706 0 1994(A)
CORAL SPRINGS 6,681,904 371,935 6,309,969 0 1994(A)
SPRINGFIELD 17,008,667 1,167,148 15,841,519 0 1994(A)
CHARLESTON 10,960,284 608,320 10,351,964 0 1995(A)
SAVANNAH 3,303,313 223,600 3,079,713 0 1995(A)
WEST PALM BEACH 3,189,839 172,424 3,017,415 0 1995(A)
SOUTH MIAMI 8,378,002 524,598 7,853,404 0 1995(A)
AUGUSTA 7,428,541 463,655 6,964,886 0 1995(A)
ALTAMONTE SPRINGS 3,854,467 237,198 3,617,269 0 1995(A)
KENT 2,261,530 0 2,261,530 0 1995(A)
ORLANDO 4,564,953 156,538 4,408,415 0 1996(A)
DURHAM 9,848,629 532,865 9,315,764 0 1996(A)
GARLAND 1,056,131 57,564 998,567 0 1996(A)
MARLTON PIKE 4,318,534 258,374 4,060,160 0 1996(A)
CAMDEN 1,079,936 0 1,079,936 0 1996(A)
CINNAMINSON 3,526,784 11,159 3,515,625 0 1996(A)
FLORENCE 7,476,674 195,235 7,281,439 0 1997(A)
PHOENIX 12,252,387 293,202 11,959,185 8,024,229 1997(A)
MORRISVILLE 2,898,638 0 2,898,638 0 1996(A)
CENTER SQUARE 3,659,439 175,153 3,484,286 0 1996(A)
PHILADELPHIA 3,659,439 175,153 3,484,286 0 1996(A)
FEASTERVILLE 2,631,801 106,774 2,525,027 0 1996(A)
WARRINGTON 1,457,597 0 1,457,597 0 1996(A)
WHITEHALL 5,204,808 310,847 4,893,961 0 1996(A)
HARRIS COUNTY 9,491,194 283,986 9,207,208 0 1997(A)
HAVERTOWN 3,659,439 175,153 3,484,286 0 1996(A)
EXTON 3,659,439 175,153 3,484,286 0 1996(A)
GALLERY, PHILADELPHIA PA 258,931 538 258,393 0 1996(A)
EASTWICK 6,038,055 175,515 6,038,055 5,040,000 1997(A)
UPPER DARBY 4,209,058 140,145 4,209,058 3,960,000 1996(A)
TAMPA 14,776,813 516,910 14,259,903 0 1997(A)
OCALA 10,351,197 321,646 10,029,551 0 1997(A)
BATON ROUGE 16,032,433 481,208 15,551,225 0 1997(A)
WHITE LAKE 12,635,594 578,589 12,057,005 0 1996(A)
THE SHOPS AT WEST MELBOURNE 11,029,541 188,075 10,841,466 0 1998(A)
LAFAYETTE 10,978,790 256,457 10,722,333 0 1997(A)
LAFAYETTE 4,772,257 163,795 4,608,462 0 1997(A)
MANASSAS 8,976,768 206,486 8,770,282 0 1997(A)
CORAL SPRINGS 8,290,686 183,611 8,107,075 0 1997(A)
STATEN ISLAND 14,784,868 302,868 14,482,000 5,500,881 1997(A)
GREENVILLE 11,060,676 212,526 10,848,150 0 1997(A)
MT. DORA 5,073,890 112,892 4,960,998 0 1997(A)
SOUTH PLAINES PLAZA, TX 9,467,145 145,413 9,321,732 6,453,600 1998(A)
KIMCO MESA 679, INC. AZ 14,601,291 224,424 14,376,867 9,859,797 1998(A)
DENVER WEST 38TH STREET 808,150 15,189 792,961 0 1998(A)
VILLAGE ON THE PARK 11,080,450 94,090 10,986,360 0 1998(A)
ENGLEWOOD PHAR MOR 4,038,487 34,547 4,003,940 1,386,104 1998(A)
HERITAGE WEST 7,650,650 65,420 7,585,230 0 1998(A)
AURORA QUINCY 5,756,566 49,248 5,707,318 2,766,910 1998(A)
SPRING CREEK COLORADO 7,142,073 134,190 7,007,883 0 1998(A)
AURORA EAST BANK 7,680,671 141,355 7,539,316 0 1998(A)
MARSHALL PLAZA, CRANSTON RI 9,461,902 161,569 9,300,333 0 1998(A)
N. CHARLESTON 14,879,147 152,672 14,726,475 0 1997(A)
KIMCO CARY 696, INC. 10,936,865 149,221 10,787,644 0 1998(A)
KIMCO LAFAYETTE MARKET PLACE 18,950,095 226,636 18,723,459 0 1998(A)
BAYSHORE GARDENS, BRADENTON FL 14,639,955 174,758 14,465,197 0 1998(A)
SANTEE TOWN CENTER 11,265,068 0 11,265,068 0 1998(A)
NORTH POINT SHOPPING CENTER 9,736,126 16,566 9,719,560 0 1998(A)
CEDAR HILL CROSSING 4,091,048 0 4,091,048 0 1998(A)
VILLAGE COMMONS SHOPPING CENTER 10,966,489 0 10,966,489 0 1998(A)
THE PIERS SHOPPING CENTER 9,954,165 0 9,954,165 0 1998(A)
MOLINE SHOPPING CENTER. IL 1,301,194 10,488 1,290,706 0 1998(A)
PADUCAH MALL, KY 1,047,281 9,719 1,037,562 0 1998(A)
PLAZA AT ROCKFORD, IL 83,158 711 82,447 0 1998(A)
SPRINGFIELD, MACARTHUR 131,091 1,069 130,022 0 1998(A)
RICHMOND 3,421,875 69,749 3,352,126 0 1995(A)
YONKERS 4,359,886 315,159 4,044,727 0 1998(A)
ALTON, BELTLINE HWY 2,317,513 390,452 1,927,061 0 1998(A)
KRIKWOOD 9,704,005 103,257 9,600,748 0 1998(A)
ST. LOUIS, CHRISTY BLVD. 5,239,601 43,782 5,195,819 0 1998(A)
</TABLE>
67
<PAGE>
<TABLE>
<CAPTION>
INITIAL COST TOTAL COST
BUILDING AND SUBSEQUENT BUILDINGS AND
PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS
---------- ---- ----------- -------------- ---- -------------
<S> <C> <C> <C> <C> <C>
OVERLAND PARK, MELCALF 1,183,911 6,335,308 1,995 1,185,906 6,335,308
INDEPENDENCE, NOLAND DR. 1,728,367 8,951,101 2,933 1,731,300 8,951,101
KANSAS CITY, STATE AVE. 1,692,301 8,763,689 2,872 1,695,173 8,763,689
BELLEVILLE, WESTFIELD PLAZA 0 5,372,253 - 0 5,372,253
ORLAND PARK, S. HARLEM 476,972 2,764,775 - 476,972 2,764,775
TULSA 500,950 2,002,508 - 500,950 2,002,508
WATERLOO 500,525 2,002,101 - 500,525 2,002,101
CLIVE 500,525 2,002,101 - 500,525 2,002,101
DES MOINES 500,525 2,559,019 - 500,525 2,559,019
E. WICHITA 500,414 6,449,627 - 500,414 6,449,627
W. WICHITA 500,414 6,394,959 - 500,414 6,394,959
PLANO 500,414 2,830,835 - 500,414 2,830,835
WEST OAKS 500,422 2,001,687 - 500,422 2,001,687
ARLINGTON 500,414 2,001,656 - 500,414 2,001,656
DUNCANVILLE 500,414 2,001,656 - 500,414 2,001,656
GARLAND 500,414 2,001,656 - 500,414 2,001,656
HOUSTON 500,422 2,001,687 - 500,422 2,001,687
GENEVA 500,422 12,917,712 - 500,422 12,917,712
BAYTOWN 500,422 2,431,651 - 500,422 2,431,651
FT. WORTH 500,414 2,426,533 - 500,414 2,426,533
BRADLEY 500,422 2,001,687 - 500,422 2,001,687
N. RICHLAND HILLS 1,000,000 0 65,837 1,065,837 0
CORSICANA 989,061 3,990,595 - 989,061 3,990,595
OVERLAND 0 4,928,677 120,104 0 5,048,781
CREVE COEUR, WOODCREST/OLIVE 1,044,598 5,475,623 1,773 1,046,371 5,475,623
ST. LOUIS 0 5,756,736 156,042 0 5,912,778
PEORIA 0 5,081,290 - 0 5,081,290
KANSAS CITY 574,777 2,971,191 - 574,777 2,971,191
ST. LOUIS 0 2,766,644 - 0 2,766,644
OAK LAWN 1,530,111 8,776,631 - 1,530,111 8,776,631
CALUMET CITY 1,479,217 8,815,760 - 1,479,217 8,815,760
OAKBROOK TERRACE 1,610,958 9,155,177 - 1,610,958 9,155,177
MATTERSON 950,515 6,292,319 - 950,515 6,292,319
MT. PROSPECT 1,017,345 6,572,176 - 1,017,345 6,572,176
ST. PETERS 1,182,194 7,423,459 - 1,182,194 7,423,459
CHICAGO, S. PULASKI RD. 1,611,612 8,252,282 2,707 1,614,319 8,252,282
KANSAS CITY 775,025 5,046,021 - 775,025 5,046,021
ROELAND PARK 0 5,120,323 - 0 5,120,323
MAPLEWOOD 604,803 4,619,578 - 604,803 4,619,578
NORRIDGE 0 2,918,315 - 0 2,918,315
COUNTRYSIDE 0 4,770,671 - 0 4,770,671
DUBUQUE 0 2,152,476 - 0 2,152,476
CARBONDALE 0 500,000 - 0 500,000
MERRILLVILLE 0 1,965,694 45,601 0 2,011,295
CRYSTAL CITY, MI 0 234,378 - 0 234,378
GRIFFITH 0 2,495,820 (19,188) 0 2,476,632
DOWNER GROVE 811,778 4,322,956 - 811,778 4,322,956
CHICAGO 0 3,716,745 - 0 3,716,745
SKOKIE 0 2,276,360 - 0 2,276,360
SCHAUMBURG 0 2,576,673 - 0 2,576,673
CHICAGO 0 2,687,046 - 0 2,687,046
MIDWEST CITY 1,435,506 7,370,459 2,424 1,437,930 7,370,459
DAVENPORT 0 0 - 0 0
TULSA 0 0 131,399 0 131,399
ELGIN, AIRPORT RD. 2,728,647 12,624,998 - 2,728,647 12,624,998
FOREST PARK 0 2,335,884 - 0 2,335,884
NAPERVILLE 669,483 4,464,998 - 669,483 4,464,998
INDIANAPOLIS 0 0 - 0 0
NILES 0 2,217,231 134,809 0 2,352,040
ARLINGTON 0 2,285,377 - 0 2,285,377
JOLIET 0 0 - 0 0
SPRINGFIELD,GLENSTONE AVE. 0 608,793 - 0 608,793
CHAMPAIGN, NEIL ST. 230,519 1,285,460 - 230,519 1,285,460
SOUTH SHIELDS, OKLAHOMA 0 457,015 - 0 457,015
MANCHESTER, ANDERSON DR 1,417,725 6,709,421 2,220 1,419,945 6,709,421
CAPE GIRARDEAU 0 2,242,469 - 0 2,242,469
MUNDELIEN, S. LAKE 1,127,720 5,826,129 1,914 1,129,634 5,826,129
BRIDGETON 0 2,196,834 - 0 2,196,834
EDMOND 477,036 3,591,493 - 477,036 3,591,493
HOUSTON 406,513 1,939,253 - 406,513 1,939,253
CORPUS CHRISTI, TX 0 944,562 - 0 944,562
AMARILLO 4,666,000 28,644,596 - 4,666,000 28,644,596
ST. JOSEPH, N. BELT HWY 203,596 1,129,889 - 203,596 1,129,889
FAIRVIEW HTS, BELLVILLE RD. 0 11,866,880 - 0 11,866,880
SOUTH BEND, S. HIGH ST. 183,463 1,070,401 - 183,463 1,070,401
SHAWNEE, KANSAS 0 405,770 - 0 405,770
ELSTON 1,010,375 5,692,211 - 1,010,375 5,692,211
WAUKEGAN, BELVIDERE 203,427 1,161,847 345 203,772 1,161,847
S. CICERO 0 1,541,560 149,203 0 1,690,763
MELROSE 198,177 1,214,926 - 198,177 1,214,926
JOPLIN, N. RANGELINE 1,021,661 4,793,886 - 1,021,661 4,793,886
AURORA, N. LAKE 2,059,908 9,531,721 - 2,059,908 9,531,721
CRYSTAL LAKE, NW HWY 179,964 1,025,811 305 180,269 1,025,811
KRC PETERSON AVE 2,215,960 10,253,981 - 2,215,960 10,253,981
KRC BRIDGEVIEW 0 0 - 0 0
<CAPTION>
TOTAL TOTAL COST, DATE OF
ACCUMULATED NET OF ACCUMULATED CONSTRUCTION(C)
PROPERTIES TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A)
---------- ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
OVERLAND PARK, MELCALF 7,521,214 61,738 7,459,476 0 1998(A)
INDEPENDENCE, NOLAND DR. 10,682,401 93,527 10,588,874 0 1998(A)
KANSAS CITY, STATE AVE. 10,458,862 91,576 10,367,286 0 1998(A)
BELLEVILLE, WESTFIELD PLAZA 5,372,253 57,373 5,314,880 0 1998(A)
ORLAND PARK, S. HARLEM 3,241,747 25,810 3,215,937 0 1998(A)
TULSA 2,503,458 149,870 2,353,588 0 1996(A)
WATERLOO 2,502,626 149,730 2,352,896 0 1996(A)
CLIVE 2,502,626 149,730 2,352,896 0 1996(A)
DES MOINES 3,059,544 154,203 2,905,341 0 1996(A)
E. WICHITA 6,950,041 194,085 6,755,956 5,175,000 1996(A)
W. WICHITA 6,895,373 193,218 6,702,155 5,100,000 1996(A)
PLANO 3,331,249 157,818 3,173,431 0 1996(A)
WEST OAKS 2,502,109 149,695 2,352,414 0 1996(A)
ARLINGTON 2,502,070 149,695 2,352,375 0 1996(A)
DUNCANVILLE 2,502,070 149,695 2,352,375 0 1996(A)
GARLAND 2,502,070 149,695 2,352,375 0 1996(A)
HOUSTON 2,502,109 149,695 2,352,414 0 1996(A)
GENEVA 13,418,134 257,634 13,160,500 0 1996(A)
BAYTOWN 2,932,073 153,266 2,778,807 0 1996(A)
FT. WORTH 2,926,947 149,695 2,777,252 0 1996(A)
BRADLEY 2,502,109 153,849 2,348,260 0 1996(A)
N. RICHLAND HILLS 1,065,837 0 1,065,837 0 1997(A)
CORSICANA 4,979,656 218,804 4,760,852 0 1997(A)
OVERLAND 5,048,781 168,501 4,880,280 0 1997(A)
CREVE COEUR, WOODCREST/OLIVE 6,521,994 56,526 6,465,468 0 1998(A)
ST. LOUIS 5,912,778 196,812 5,715,966 0 1997(A)
PEORIA 5,081,290 117,601 4,963,689 0 1997(A)
KANSAS CITY 3,545,968 85,187 3,460,781 0 1997(A)
ST. LOUIS 2,766,644 82,033 2,684,611 0 1997(A)
OAK LAWN 10,306,742 204,729 10,102,013 0 1997(A)
CALUMET CITY 10,294,977 196,468 10,098,509 0 1997(A)
OAKBROOK TERRACE 10,766,135 216,056 10,550,079 0 1997(A)
MATTERSON 7,242,834 121,619 7,121,215 0 1997(A)
MT. PROSPECT 7,589,521 131,044 7,458,477 0 1997(A)
ST. PETERS 8,605,653 186,220 8,419,433 0 1997(A)
CHICAGO, S. PULASKI RD. 9,866,601 82,447 9,784,154 0 1998(A)
KANSAS CITY 5,821,046 124,091 5,696,955 0 1997(A)
ROELAND PARK 5,120,323 156,304 4,964,019 0 1997(A)
MAPLEWOOD 5,224,381 103,467 5,120,914 0 1997(A)
NORRIDGE 2,918,315 87,537 2,830,778 0 1997(A)
COUNTRYSIDE 4,770,671 108,525 4,662,146 0 1997(A)
DUBUQUE 2,152,476 60,655 2,091,821 0 1997(A)
CARBONDALE 500,000 0 500,000 0 1997(A)
MERRILLVILLE 2,011,295 67,203 1,944,092 0 1997(A)
CRYSTAL CITY, MI 234,378 1,703 232,675 0 1997(A)
GRIFFITH 2,476,632 63,995 2,412,637 0 1997(A)
DOWNER GROVE 5,134,734 114,349 5,020,385 0 1997(A)
CHICAGO 3,716,745 94,289 3,622,456 0 1997(A)
SKOKIE 2,276,360 70,780 2,205,580 0 1997(A)
SCHAUMBURG 2,576,673 76,786 2,499,887 0 1997(A)
CHICAGO 2,687,046 76,603 2,610,443 0 1997(A)
MIDWEST CITY 8,808,389 92,762 8,715,627 0 1998(A)
DAVENPORT 0 0 0 0 1997(A)
TULSA 131,399 1,215 130,184 0 1997(A)
ELGIN, AIRPORT RD. 15,353,645 133,399 15,220,246 0 1998(A)
FOREST PARK 2,335,884 74,157 2,261,727 0 1997(A)
NAPERVILLE 5,134,481 83,656 5,050,825 0 1997(A)
INDIANAPOLIS 0 0 0 0 1997(A)
NILES 2,352,040 75,803 2,276,237 0 1997(A)
ARLINGTON 2,285,377 67,026 2,218,351 0 1997(A)
JOLIET 0 0 0 0 1997(A)
SPRINGFIELD,GLENSTONE AVE. 608,793 6,592 602,201 0 1998(A)
CHAMPAIGN, NEIL ST. 1,515,979 12,474 1,503,505 0 1998(A)
SOUTH SHIELDS, OKLAHOMA 457,015 3,696 453,319 0 1997(A)
MANCHESTER, ANDERSON DR 8,129,366 70,108 8,059,258 6,300,000 1998(A)
CAPE GIRARDEAU 2,242,469 60,036 2,182,433 0 1997(A)
MUNDELIEN, S. LAKE 6,955,763 61,024 6,894,739 0 1998(A)
BRIDGETON 2,196,834 70,442 2,126,392 0 1997(A)
EDMOND 4,068,529 81,698 3,986,831 0 1997(A)
HOUSTON 2,345,766 58,284 2,287,482 0 1997(A)
CORPUS CHRISTI, TX 944,562 9,890 934,672 0 1997(A)
AMARILLO 33,310,596 193,192 33,117,404 22,080,292 1997(A)
ST. JOSEPH, N. BELT HWY 1,333,485 11,017 1,322,468 0 1998(A)
FAIRVIEW HTS, BELLVILLE RD. 11,866,880 126,425 11,740,455 0 1998(A)
SOUTH BEND, S. HIGH ST. 1,253,864 9,928 1,243,936 0 1998(A)
SHAWNEE, KANSAS 405,770 2,946 402,824 0 1997(A)
ELSTON 6,702,586 60,490 6,642,096 0 1997(A)
WAUKEGAN, BELVIDERE 1,365,619 11,008 1,354,611 0 1998(A)
S. CICERO 1,690,763 52,703 1,638,060 0 1997(A)
MELROSE 1,413,103 10,724 1,402,379 0 1998(A)
JOPLIN, N. RANGELINE 5,815,547 50,350 5,765,197 4,350,000 1998(A)
AURORA, N. LAKE 11,591,629 100,709 11,490,920 0 1998(A)
CRYSTAL LAKE, NW HWY 1,206,080 9,738 1,196,342 0 1998(A)
KRC PETERSON AVE 12,469,941 108,342 12,361,599 0 1998(A)
KRC BRIDGEVIEW 0 0 0 0 1998(A)
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
BUILDING AND SUBSEQUENT BUILDINGS AND
PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS
---------- ---- ----------- -------------- ---- ------------
<S> <C> <C> <C> <C> <C>
KRC MISHAWAKA 895 378,088 1,999,079 642 378,730 1,999,079
KRC ARLINGTON HEIGHT 1,983,517 9,178,272 - 1,983,517 9,178,272
KRC STREAMWOOD 181,962 1,057,740 - 181,962 1,057,740
ADDISON, IL 2,837,548 13,128,480 - 2,837,548 13,128,480
KIMCO SELECT 4,368,834 28,758,476 3,479,844 5,489,656 31,117,498
BALANCE OF PORTFOLIO 2,951,539 4,147,593 19,992,299 3,367,822 19,723,608
-------------------------------------------------------------------------------------
$522,250,000 $2,133,160,032 $368,491,953 $529,897,164 $2,494,004,820
=====================================================================================
<CAPTION>
TOTAL TOTAL COST, DATE OF
ACCUMULATED NET OF ACCUMULATED CONSTRUCTION(C)
PROPERTIES TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A)
---------- ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
KRC MISHAWAKA 895 2,377,809 20,460 2,357,349 0 1998(A)
KRC ARLINGTON HEIGHT 11,161,789 96,974 11,064,815 0 1998(A)
KRC STREAMWOOD 1,239,702 9,847 1,229,855 0 1998(A)
ADDISON, IL 15,966,028 138,720 15,827,308 0 1998(A)
KIMCO SELECT 36,607,154 587,947 35,703,547 6,000,000 VARIOUS
BALANCE OF PORTFOLIO 23,091,430 11,668,821 11,422,609 0 VARIOUS
-------------------------------------------------------------
$3,023,901,985 $255,949,923 $2,767,952,062 $434,310,884
=============================================================
</TABLE>
Depreciation and amortization of the Company's investment in buildings and
improvements reflected in the statements of income is calculated over the
estimated useful lives of the assets as follows:
Buildings.................... 15 to 39 years
Improvements................. Terms of leases or useful lives,
whichever is shorter
The aggregate cost for Federal income tax purposes was approximately $2,730
million at December 31, 1998.
The changes in total real estate assets for the years ended December 31, 1998,
1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
--------------------------------------------------------
<S> <C> <C> <C>
Balance, beginning of period ...................... $ 1,404,196,159 $ 1,072,055,986 $ 932,390,261
Acquisitions .................................... 1,573,163,394 276,119,791 100,808,213
Improvements .................................... 58,298,913 61,144,440 40,108,471
Sales ........................................... (11,756,482) (5,124,058) (1,250,959)
--------------------------------------------------------
Balance, end of period ............................ $ 3,023,901,985 $ 1,404,196,159 $ 1,072,055,986
========================================================
</TABLE>
The changes in accumulated depreciation for the years ended December 31, 1998,
1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
--------------------------------------------------------
<S> <C> <C> <C>
Balance, beginning of period ...................... $ 207,408,091 $ 180,552,647 $ 156,131,718
Depreciation for year ........................... 48,934,560 28,371,587 24,963,191
Sales ........................................... (392,728) (1,516,143) (542,262)
--------------------------------------------------------
Balance, end of period ............................ $ 255,949,923 $ 207,408,091 $ 180,552,647
========================================================
</TABLE>
69
<PAGE>
Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated November 1, 1998, is made by and between
Kimco Realty Corporation (the "Company"), a Maryland corporation and Michael J.
Flynn (the "Executive").
RECITALS:
A. Executive has been employed by the Company as its Vice
Chairman and President pursuant to an Employment Agreement dated November 1,
1995 which expires October 31, 1998 (the "Prior Agreement").
B. It is the desire of the Company and the Executive to
continue their relationship on the terms set forth below.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements set forth below the parties hereto agree as
follows:
1. Certain Definitions.
(a) "Base Salary" is defined in Section 5(a).
(b) "Benefits" is defined in Section 5(d).
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Bonus" is defined in Section 5(b).
(e) "Cause": For purposes of this Agreement, the Company
shall have "Cause" to terminate the Executive's
employment hereunder upon (i) a finding by the Board that
he has materially harmed the Company through a material
act of dishonesty in the performance of his duties
hereunder, (ii) his conviction of a felony, or (iii) his
failure to perform his material duties under this
Agreement (other than a failure due to disability) after
written notice specifying the failure and a reasonable
opportunity to cure (it being understood that if his
failure to perform is not of a type requiring a single
action to cure fully, that he may commence the cure
promptly after such written notice and thereafter
diligently prosecute such cure to completion).
(f) "Disability" shall mean the absence of the Executive from
the Executive's duties to the Company on a full-time
basis for a total of 16 weeks during any 12 month period
as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by
a physician selected by the Company and acceptable to the
Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld
unreasonably).
(g) "Effective Date" shall mean November 1, 1998.
<PAGE>
(h) "Good Reason": The Executive shall have Good Reason to
terminate his employment in the event of any material
adverse change in his job titles, duties,
responsibilities, perquisites granted hereunder, or
authority without his consent.
(i) "Prior Agreement" is defined in the Preamble hereto.
(j) "Term of Employment" is defined in Section 2.
2. Employment. The Company shall continue to employ the Executive and
the Executive shall continue to be employed by the Company, for the five year
period commencing on the Effective Date (such period, subject to earlier
termination pursuant to Section 6, the "Term of Employment"), in the position
set forth in Section 3 and upon the other terms and conditions herein provided.
The Term of Employment shall automatically be extended for successive one year
periods until either party hereto gives notice of non-renewal to the other
(pursuant to Section 13), no later than three months prior to the then
applicable end of the Term of Employment. Notwithstanding the foregoing the
Executive shall have the right to terminate the Term of Employment effective on
or after the third anniversary of the Effective Date by giving notice thereof to
the Company pursuant to Section 13.
3. Position. During the Term of Employment, the Executive shall serve
as the Vice-Chairman and President of the Company.
4. Place of Performance. In connection with his employment during the
Term of Employment, the Executive shall be based at the Company's principal
executive offices currently located in New Hyde Park, New York.
5. Compensation and Related Matters.
(a) Base Salary. During the Term of Employment the Executive
shall receive a base salary ("Base Salary") at a rate of $650,000 per
annum, payable monthly or more frequently in accordance with the
Company's practice as applied to other senior executives.
(b) Bonus. As additional compensation for services rendered
during the Term of Employment the Executive shall be eligible to
receive a bonus ("Bonus") in cash at such times and in such amounts, if
any, as the Board in its sole discretion shall determine.
(c) Equity Compensation. Executive shall be eligible to
receive grants of common stock of the Company, or options with respect
thereto, in such amounts, if any, and under such conditions as the
Board, in its sole discretion, shall determine.
(d) Benefits. During the Term of Employment, the Executive
shall be entitled to participate in or receive benefits under any
employee benefit plan or other arrangement made available by the
Company to any of its senior employees (collectively "Benefits"),
subject to and on a basis consistent with the terms, conditions and
overall administration of such plan or arrangement, provided, however,
that the Executive shall
2
<PAGE>
be entitled to four weeks of paid vacation per annum during the Term of
Employment, exclusive of Company holidays and that the Executive shall
be entitled to take sick or personal days off in accordance with the
Company's practice as applied to other senior executives. The Company
shall also provide Executive with use of an automobile selected by
Executive and shall pay fuel, oil and other vehicle necessities and
maintenance and repairs cost and expenses for or to the automobile and
shall provide a driver for the Executive's use of the automobile on
Company business.
(e) Expenses. The Company shall promptly reimburse the
Executive for all reasonable travel and other business expenses
incurred by the Executive in the performance of his duties to the
Company hereunder.
(f) No Waiver. The Executive shall also be entitled to such
other benefits or terms of employment as are provided by law.
6. Termination. The Executive's employment hereunder may be terminated
by the Company or the Executive, as applicable, without any breach of this
Agreement only under the following circumstances:
(a) Death. The Executive's employment hereunder shall
terminate upon his death.
(b) Disability. If the Company determines in good faith that
the Disability of the Executive has occurred during the Term of
Employment, the Company may give the Executive written notice in
accordance with Section 13(b) of its intention to terminate the
Executive's employment. In such event, the Executive's employment with
the Company shall terminate effective on the 30th day after receipt of
such notice by the Executive, provided that within the 30 days after
such receipt, the Executive shall not have returned to full-time
performance of his duties. The Executive shall continue to receive his
Base Salary and Benefits until the date of termination.
This subsection 6(b) shall not limit the entitlement of the
Executive, his estate or beneficiaries to any disability or other
benefits then available to the Executive under any disability insurance
or other benefit plan or policy which is maintained by the Company for
the Executive's benefit.
(c) Cause. The Company may terminate the Executive's
employment hereunder for Cause.
(d) Good Reason. The Executive may terminate his employment
for Good Reason.
(e) Without Cause. The Company may terminate the Executive's
employment hereunder without Cause upon 30 days notice.
3
<PAGE>
(f) Notice of Termination. Any termination of the Executive's
employment hereunder by the Company or the Executive (other than by
reason of the Executive's death) shall be communicated by a notice of
termination to the other parties hereto. For purposes of this
Agreement, a "notice of termination" shall mean a written notice which
(i) indicates the specific termination provision in the Agreement
relied upon, (ii) sets forth in reasonable detail any facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision indicated and (iii)
specifies the effective date of the termination.
7. Benefits upon Certain Terminations of Employment.
(a) Termination upon Death or Disability.
(i) If the Executive's employment shall terminate by
reason of his death (pursuant to Section 6(a)) payment of
one-half his Base Salary shall continue for the lesser of one
year or the otherwise applicable termination of the Term of
Employment to such payee as the Executive shall have
designated on the signature page hereof. (Such payee may
subsequently be changed by the Executive by written notice to
the Company).
(ii) If the Executive's employment shall terminate by
reason of his death or Disability, any options with respect to
the common stock of the Company then held by Executive which
are not yet exercisable shall thereupon become exercisable and
shall remain exercisable until expiration in accordance with
the terms of such option.
(b) Termination without Cause or for Good Reason: If the
Executive's employment shall terminate without Cause (pursuant to
Section 6(e)) or for Good Reason (pursuant to Section 6(d)),
(i) the Company shall continue to pay the Executive
his Base Salary and to make all necessary payments for and
provide all Benefits to the Executive under this Agreement
pursuant to Section 5(d) until the date of his termination,
(ii) the Company shall pay the Executive a severance
benefit equal to the greater of (A) the remaining Base Salary
payments to which the Executive would be entitled for the
remainder of the Term of Employment if such termination of
employment had not occurred (and without regard to the
Executive's right described in the last sentence of Section 2)
or (B) one year's payment of Base Salary, and
(iii) any options with respect to the common stock of
the Company then held by Executive which are not yet
exercisable shall thereupon become exercisable and shall
remain exercisable until expiration in accordance with the
terms of such option.
4
<PAGE>
(c) Survival. The expiration or termination of the Term of
Employment shall not impair the rights or obligations of any party
hereto which shall have accrued hereunder prior to such expiration.
(d) Mitigation of Damages. In the event of any termination of
the Executive's employment by the Company, the Executive shall not be
required to seek other employment to mitigate damages and any income
earned by the Executive from other employment or self-employment shall
be not be offset against any obligations of the Company to the
Executive hereunder.
8. Consultancy. Upon termination of the Term of Employment pursuant to
the notices described in the second or third sentences of Section 2, Executive
and the Company shall thereupon enter into a consulting agreement which shall
provide for compensation of $250,000 per annum, a term of three years and other
customary terms and conditions.
9. Disputes.
(a) Any dispute or controversy arising under, out of, in
connection with or in relation to this Agreement shall, at the election
and upon written demand of any party to this Agreement, be finally
determined and settled by arbitration in New York, New York in
accordance with the rules and procedures of the American Arbitration
Association, and judgment upon the award may be entered in any court
having jurisdiction thereof.
(b) The prevailing party in any such proceeding shall be
entitled to collect from the other party, all legal fees and expenses
reasonably incurred in connection therewith.
10. Binding on Successors. This Agreement shall be binding upon and
inure to the benefit of the Company, the Executive and their respective
successors, assigns, personnel and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as applicable.
11. Governing Law. This Agreement is being made and executed in and is
intended to be performed in the State of New York, and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of New York.
12. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Notices. Any notice, request, claim, demand, document and other
communication hereunder to any party shall be effective upon receipt (or refusal
of receipt) and shall be in writing and delivered personally or sent by telex,
telecopy, or certified or registered mail, postage prepaid, as follows:
5
<PAGE>
(a) If to the Company, addressed to its principal offices to
the attention of the Chairman, at:
3333 New Hyde Park Rd.
New Hyde Park, NY 11042
(b) If to the Executive, to him at the address set forth below
under his signature;
or at any other address as any party shall have specified by notice in writing
to the other parties.
14. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
15. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
employment of the Executive by the Company and may not be contradicted by
evidence of any prior or contemporaneous agreement. The parties further intend
that this Agreement shall constitute the complete and exclusive statement of its
terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding to vary the terms of this
Agreement.
16. Amendments; Waivers. This Agreement may not be modified, amended,
or terminated except by an instrument in writing, signed by the Executive and a
disinterested director of the Company. By an instrument in writing similarly
executed, the Executive or the Company may waive compliance by the other party
with any provision of this Agreement that such other party was or is obligated
to comply with or perform, provided, however, that such waiver shall not operate
as a waiver of, or estoppel with respect to, any other or subsequent failure. No
failure to exercise and no delay in exercising any right, remedy, or power
hereunder preclude any other or further exercise of any other right, remedy, or
power provided herein or by law or in equity.
17. No Effect on Other Contractual Rights. Notwithstanding Section 6,
the provisions of this Agreement, and any other payment provided for hereunder,
shall not reduce any amounts otherwise payable to the Executive under any other
agreement between the Executive and the Company, or in any way diminish the
Executive's rights under any employee benefit plan, program or arrangement of
the Company to which he may be entitled as an employee of the Company.
18. No Inconsistent Actions; Cooperation.
(a) The parties hereto shall not voluntarily undertake or fail
to undertake any action or course of action inconsistent with the
provisions or essential intent of this Agreement. Furthermore, it is
the intent of the parties hereto to act in a fair and reasonable manner
with respect to the interpretation and application of the provisions of
this Agreement.
6
<PAGE>
(b) Each of the parties hereto shall cooperate and take such
actions, and execute such other documents as may be reasonably
requested by the other in order to carry out the provisions and
purposes of this Agreement.
19. No Alienation of Benefits. To the extent permitted by law the
benefits provided by this Agreement shall not be subject to garnishment,
attachment or any other legal process by the creditors of the Executive, his
beneficiary or his estate.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
EXECUTIVE
/s/ Michael J. Flynn
-----------------------------
Michael J. Flynn
215 Old Church Road
Greenwich, CT 06830
KIMCO REALTY CORPORATION,
a Maryland corporation
By: /s/ Milton Cooper
-------------------------
Executive's payee pursuant to Section 7(a):
Name: Anne J. Flynn
Address: 215 Old Church Road
Greenwich, CT 06830
7
<PAGE>
Kimco Realty Corporation and Subsidiaries
Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends
For the Year Ended December 31, 1998
Income before extraordinary items $ 127,166,331
Add:
Interest on indebtedness 63,547,946
Amortization of debt related expenses 1,680,197
Portion of rents representative of the
interest factor 6,655,956
-------------
199,050,430
Adjustment for equity share in partnerships (1,830,854)
-------------
Income before extraordinary items, as adjusted $ 197,219,576
=============
Combined fixed charges and preferred stock dividends-
Interest on indebtedness 64,723,874
Preferred stock dividends 24,653,847
Amortization of debt related expenses 1,564,883
Portion of rents representative of the
interest factor 6,655,956
-------------
Combined fixed charges and preferred stock dividends 97,598,560
=============
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends 2.0
=============
<PAGE>
Kimco Realty Corporation and Subsidiaries
Computation of Ratio of Funds from Operations
to Combined Fixed Charges and Preferred Stock Dividends
For the Year Ended December 31, 1998
<TABLE>
<S> <C>
Funds from Operations, Available to Common Stockholders $ 153,746,542
Add:
Interest on indebtedness 63,547,946
Preferred stock dividends 24,653,847
Portion of rents representative of the
interest factor 6,655,956
-------------
248,604,291
Adjustment for equity share in partnerships (2,618,549)
-------------
Funds from Operations, as adjusted $ 245,985,742
=============
Combined fixed charges and preferred stock dividends-
Interest on indebtedness $ 64,723,874
Preferred stock dividends 24,653,847
Portion of rents representative of the
interest factor 6,655,956
-------------
Combined fixed charges and preferred stock dividends $ 96,033,677
=============
Ratio of Funds from Operations to Combined Fixed Charges
and Preferred Stock Dividends 2.6
=============
</TABLE>
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
13-2744380
DECEMBER 31, 1998
ENTITY NAME FEI
----------------------------------------------------------------------
1 KIMCO REALTY CORP. 13-2744380
2 44 PLAZA, INC. 13-2683791
3 AUK REALTY CORP. 11-2612680
4 BRENDA PROPERTIES, INC. 11-2727694
5 EAST END OPERATING CORP. 11-2498666
6 FOX HILL II, INC. 11-2671016
7 FOX HILL POUGHKEEPSIE, INC. 11-2727165
8 GC ACQUISITION CORP. 11-2928815
9 HARVEST OF NASHVILLE, INC. 11-2464767
10 HARVEST OF TEXAS, INC. 11-2330375
11 HARVEST PROPERTIES CORPORATION 11-2330376
12 KCH ACQUISITION, INC. 11-3238575
13 KIMCADE, INC. 34-1831497
14 KIMCAL CORPORATION 13-2587851
15 KIMCO 118 O/P, INC. 65-0471143
16 KIMCO 120 O/P, INC. 65-0471149
17 KIMCO 413B, INC. 34-1740528
18 KIMCO 420, INC. 34-1710200
19 KIMCO 632, INC. 58-2201467
20 KIMCO ACADIANA 670, INC. 72-1397863
21 KIMCO ALTAMONTE SPRINGS 636, INC. 65-0642321
22 KIMCO ANAHEIM, INC 93-1222235
23 KIMCO AUGUSTA 635, INC. 58-2214762
24 KIMCO AUSTIN 589, INC. 74-2891865
25 KIMCO AUTOVENTURE, INC. 52-2077426
26 KIMCO BATON ROUGE 666, INC. 62-2698758
27 KIMCO BLACKWOOD 644, INC. 23-3469041
28 KIMCO BOULDER 688, INC. 84-1444967
29 KIMCO BRADENTON 698, INC. 65-0807463
30 KIMCO BT CORP. 11-2465201
31 KIMCO BUCKS 651, INC. 23-2862081
32 KIMCO BUSTLETON 612, INC. 13-3867963
33 KIMCO CAMBRIDGE 242, INC. 31-1497725
34 KIMCO CANTON 182, INC. 34-1744056
35 KIMCO CARROLLWOOD 664,INC. 65-0737809
36 KIMCO CARY 696, INC. 62-1741256
37 KIMCO CASA PALOMA 592, INC. PENDING
38 KIMCO CEDAR HILL CROSSING 712, INC. 74-2903202
39 KIMCO CENTEREACH 605, INC. 11-3182994
40 KIMCO CHARLESTON 631, INC. 57-1030009
41 KIMCO CHARLOTTE 192, INC. 56-1831137
42 KIMCO CRYSTAL CITY 850, INC. 43-1807954
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
13-2744380
DECEMBER 31, 1998
ENTITY NAME FEI
----------------------------------------------------------------------
43 KIMCO CINNAMINSON 645, INC. 22-3469045
44 KIMCO CLAWSON 143, INC. 38-3115543
45 KIMCO COLFAX 681, INC. 84-1444973
46 KIMCO COLUMBUS, INC. 13-6206133
47 KIMCO CONCOURSE, INC. 13-4043060
48 KIMCO CONSTRUCTION CORP. PENDING
49 KIMCO CORAL SPRINGS 623, INC. 65-0535840
50 KIMCO COTTMAN 294, INC. 23-2862072
51 KIMCO CRANSTON 691, INC. 06-1508094
52 KIMCO CROSS CREEK 607, INC. 38-3141736
53 KIMCO DAYTON, INC. PENDING
54 KIMCO DECATUR 797, INC. PENDING
55 KIMCO DELAWARE INC F/N/A Kimco Corporation 13-6115192
56 KIMCO DENVER 680, INC. 84-1444974
57 KIMCO DE SOTO 593, INC. PENDING
58 KIMCO DEV. OF WOOSTER, INC 11-2959598
59 KIMCO DEV. OF GASTONIA, INC. 11-2962621
60 KIMCO DEV. OF HAMPTON BAYS, INC. 11-2983330
61 KIMCO DEV. OF WATERLOO AKRON, INC. 11-2981359
62 KIMCO DEVELOPMENT OF BRADDOCK HILLS, INC. 11-2776505
63 KIMCO DEVELOPMENT OF GREENWOOD O/P, INC. 11-2981360
64 KIMCO DEVELOPMENT OF AIKEN, INC. 11-2978740
65 KIMCO DEVELOPMENT OF GIANTS, INC. 11-2792369
66 KIMCO DEVELOPMENT OF MUSKEGON, INC. 11-2757467
67 KIMCO DEVELOPMENT OF N. KENSINGTON, INC. 11-2776507
68 KIMCO DEVELOPMENT OF 31 SOUTH, INC. 11-2845541
69 KIMCO DEVELOPMENT OF KETTERING, INC. 11-2670996
70 KIMCO DEVELOPMENT OF MCINTOSH SARASOTA, INC. 11-2981378
71 KIMCO DEVELOPMENT OF MENTOR, INC. 11-3009184
72 KIMCO DEVELOPMENT OF SEMINOLE SANFORD, INC. 11-2847353
73 KIMCO DEVELOPMENT OF SPRINGBOR0 PIKE, INC. 11-2733483
74 KIMCO DEVELOPMENT OF TROY, INC. 11-2845542
75 KIMCO DEVELOPMENT OF TYVOLA, INC., 11-2805703
76 KIMCO DEVELOPMENT OF WOOSTER, INC. 11-2959598
77 KIMCO DOWNERS PARK 764, INC. 36-4274020
78 KIMCO DUBUQUE 847, INC. 39-1908742
79 KIMCO DURHAM 639, INC. 56-1968284
80 KIMCO EAGLEDALE, INC. 13-2587857
81 KIMCO EAST BANK 689, INC. 84-1444975
82 KIMCO ENFIELD 611, INC. 06-1386487
83 KIMCO ENGLEWOOD 683, INC. 84-1444966
84 KIMCO FARMINGTON 146, INC. 38-3115548
85 KIMCO FLORENCE 646, INC. 58-2346490
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
13-2744380
DECEMBER 31,1998
ENTITY NAME FEI
----------------------------------------------------------------------
86 KIMCO FORUM 717, INC. PENDING
87 KIMCO FT. PIERCE 147, INC. 59-3272388
88 KIMCO GALLERY 660, INC. 23-2862071
89 KIMCO GARLAND 642, INC. 75-2650811
90 KIMCO GATES 149, INC. 13-3717461
91 KIMCO GREAT BARRINGTON 609, INC. 04-3239597
92 KIMCO GREEN ORCHARD 606, INC. 38-3141738
93 KIMCO GREENRIDGE 674, INC. 13-3974423
94 KIMCO GREENVILLE 676, INC 58-2361775
95 KIMCO HAYDEN PLAZA 640, INC. 86-0821811
96 KIMCO HAZLEWOOD, INC F/N/A Kimco of Missouri 13-2736629
97 KIMCO HOLMDELL 708, INC. 11-3470053
98 KIMCO JOPLIN 707, INC. 43-1837798
99 KIMCO JUAN TABO PLAZA 591, INC. 85-0455949
100 KIMCO KENT 637, INC. 13-3850824
101 KIMCO KISSIMMEE 613, INC. 65-0655663
102 KIMCO KML, INC. 23-2862080
103 KIMCO L.G. 709, INC. 11-3470054
104 KIMCO LAUREL, INC. 13-2731273
105 KIMCO LAFAYETTE 671, INC. 35-2001919
106 KIMCO LAFAYETTE MRKT PL 697, INC. 35-2056381
107 KIMCO LAKEWOOD 684, INC. 84-1445058
108 KIMCO LARGO 139, INC 65-0406401
109 KIMCO LARGO 196, INC. 65-0419586
110 KIMCO LEXINGTON 140, INC. 11-2845537
111 KIMCO LIVONIA, INC. 13-2587856
112 KIMCO LUBBOCK 687, INC. 75-2755893
113 KIMCO MANAGEMENT OF MARYLAND 52-1844127
114 KIMCO MANAGEMENT OF NEW JERSEY, INC. 11-3046314
115 KIMCO MANASSAS 672, INC. 54-1868158
116 KIMCO MAPLEWOOD 673, INC. 65-0785689
117 KIMCO MELBOURNE 616, INC. 65-0471154
118 KIMCO MERRILLVILLE 849, INC. 39-1908741
119 KIMCO MESA 679, INC. 86-0916546
120 KIMCO MIAMISBURG 714, INC. PENDING
121 KIMCO MISSOURI DEVELOPMENT CORP. 43-1837799
122 KIMCO MORRISVILLE 648, INC 23-2862079
123 KIMCO MOUNTAINSIDE PHOENIX 647, INC. 86-0892535
124 KIMOD MT. DORA 677, INC. 65-0797960
125 KIMCO N.W. SQUARE 597, INC. 34-1877388
126 KIMCO NO. BRUNSWICK 617, INC. 11-3204466
127 KIMCO NORTH RIVERS 692,INC. 57-1062095
128 KIMCO OCALA 665, INC. 58-2317767
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
13-2744380
DECEMBER 31, 1998
ENTITY NAME FEI
----------------------------------------------------------------------
129 KIMCO OF SYOSSET, INC. 13-2660758
130 KIMCO OF CHERRY HILL, INC. 11-2641098
131 KIMCO OF GEORGIA, INC, 13-2697308
132 KIMCO OF HERMITAGE, INC. 11-2513375
133 KIMCO OF HICKORY HOLLOW, INC. 11-2464914
134 KIMCO OF HUNTINGTON, INC. 11-2516647
135 KIMCO OF ILLINOIS, INC. 13-2731271
136 KIMCO OF MILLERODE, INC. PENDING
137 KIMCO OF NANUET, INC. 11-2669924
138 KIMCO OF NEW ENGLAND, INC. 13-2731276
139 KIMCO OF NEW YORK, INC. 11-2845540
140 KIMCO OF NORTH CAROLINA, INC. 13-2660757
141 KIMCO OF NORTH MIAMI, INC. PENDING
142 KIMCO OF OAKVIEW, INC. 11-2727695
143 KIMCO OF OHIO, INC. 13-2587859
144 KIMCO OF PENNSYLVANIA, INC. 13-2731277
145 KIMCO OF RACINE, INC. 11-2928818
146 KIMCO OF SPRINGFIELD, INC. 11-2612681
147 KIMCO OF STUART 619, INC. 11-3205441
148 KIMCO OF TAMPA, INC. 11-2513372
149 KIMCO OF TENNESSEE, INC. 62-0813485
150 KIMCO OPPORTUNITY, INC. 11-3353009
151 KIMCO O.P., INC. PENDING
152 KIMCO ORLANDO 638, INC. 65-0667618
153 KIMCO PALMER PARK 654, INC. 23-2862077
154 KIMCO PEPPERTREE, INC. 65-0433600
155 KIMCO PHILMED, INC. 52-2016394
156 KIMCO PIERS 716, INC. 59-3551948
157 KIMCO PROPERTIES, INC. 13-2731270
158 KIMCO PROPS. NASHVILLE 11-2464762
159 KIMCO PT. WASHINGTON 675, INC. 11-3416853
160 KIMCO PURCHASING AGENCY CORPORATION 11-2966000
161 KIMCO QUINCY PLACE 685, INC. 84-1444963
162 KIMCO RALEIGH 177, INC. 56-1828155
163 KIMCO RALPH'S CORNER 659, INC. 23-2862075
164 KIMCO RICHMOND 800, INC. 52-1925248
165 KIMCO RIDGEWOOD 615, INC. 11-3183902
166 KIMCO RIVERGATE 588, INC. 62-1756376
167 KIMC0 RIVERWALK 595, INC. 55-0764132
168 KIMCO SACRAMENTO 788, INC. 68-0424487
169 KIMCO SAN RAMON 759, INC. 91-1949100
170 KIMCO SAND LAKE 618, INC. 65-0471136
171 KIMCO SANTEE 705, INC. 68-0424489
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
13-2744380
DECEMBER 31, 1998
ENTITY NAME FEI
----------------------------------------------------------------------
172 KIMCO SARASOTA 378, INC. 65-0531169
173 KIMCO SAVANNAH 185, INC. 58-2055982
174 KIMCO SELECT TREXLER 663, INC. 23-2919887
175 KIMCO SHARONVILLE 276, INC. PENDING
176 KIMCO SHARPSTOWN 719, INC. PENDING
177 KIMCO SOUTHDALE 757, INC. 74-2846276
178 KIMCO SOUTH MIAMI 634,INC. 65-0559378
179 KIMCO SOUTH PARKER 682, INC. 84-1444970
180 KIMCO SOUTHINGTON 610, INC. 11-3193467
181 KIMCO SPRING CREEK 686, INC. 84-1444969
182 KIMCO SPRINGFIELD 625, INC. 43-1698931
183 KIMCO TALLAHASSEE 715, INC. 59-3551945
184 KIMCO TEMECULA 762, INC. 91-1949098
185 KIMCO TOWSON 621, INC. 22-3333299
186 KIMCO TROLLEY STATION 594, INC. 62-1759509
187 KIMCO UTAH, INC. 13-2659226
188 KIMCO VALLEY HI 687, INC. 84-1444972
189 KIMCO W MELBOURNE 668, INC. 58-2374863
190 KIMCO WARRINGTON 652, INC. 23-2862076
191 KIMCO WATERBURY 608, INC, 06-1382854
192 KIMCO WEST PALM BEACH 633, INC. 65-0642317
193 KIMCO WESTERVILLE 178, INC 34-1744144
194 KIMCO WESTMONT 614, INC. 38-3141736
195 KIMCO WHITE LAKE 667, INC. 38-3316919
196 KIMCO WM148, INC. 23-2725735
197 KIMCO WOODFOREST 655, INC. 75-2713979
198 KIMCO YONKERS 801, INC. 13-3851642
199 KIMCOAST OF WARREN, INC. 13-2683717
200 KIMZAY WINSTON - SALEM, INC. 13-2663113
201 KIMSWORTH OF ALABAMA, INC. 51-0368373
202 KIMSWORTH OF ARIZONA, INC. 51-0368375
203 KIMSWORTH OF ARKANSAS, INC. 51-0368374
204 KIMSWORTH OF COLORADO, INC. 51-0368377
205 KIMSWORTH OF FLORIDA, INC. 51-0368378
206 KIMSWORTH OF GEORGIA, INC. 51-0368380
207 KIMSWORTH OF ILLINOIS, INC. 51-0368382
208 KIMSWORTH OF INDIANA, INC. 51-0368383
209 KIMSWORTH OF IOWA, INC. 51-0368381
210 KIMSWQRTH OF KANSAS, INC. 51-0368385
211 KIMSWORTH OF LOUISIANNA, INC. 51-0368386
212 KIMSWORTH OF MARYLAND, INC. 51-0368387
213 KIMSWORTH OF MICHIGAN, INC. 51-0368389
214 KIMSWORTH OF MINNESOTA, INC. 51-0368389
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
13-2744380
DECEMBER 31, 1998
ENTITY NAME FEI
----------------------------------------------------------------------
215 KIMSWORTH OF MISSISSIPPI, INC. 51-0368392
216 KIMSWORTH OF MISSOURI, INC. 51-0368391
217 KIMSWORTH OF MONTANA, INC. 51-0368393
218 KIMSWORTH OF NEBRASKA, INC. 51-0368394
219 KIMSWORTH OF NEW JERSEY, INC. 51-0368398
220 KIMSWORTH OF NEW MEXICO, INC. 51-0368399
221 KIMSWORTH OF OHIO, INC. 51-0368400
222 KIMSWORTH OF PENNSYLVANIA, INC. 51-0368401
223 KIMSWORTH PLAZO 768, INC. 74-2826813
224 KIMSWORTH OF S. CAROLINA, INC. 51-0368402
225 KIMSWORTH OF TEXAS, INC. 51-0368403
226 KIMSWORTH OF VIRGINIA, INC. 51-0368405
227 KIMSWORTH, INC. 51-0368319
228 KIMVEN CORPORATION 75-2630665
229 KIMZADD, INC. 11-3050459
230 KIMZAY BENTON HARBOR, INC. 11-2964477
231 KIMZAY BLOOMINGTON, INC. 13-2663111
232 KIMZAY CHARLOTTE, INC. 13-2603692
233 KIMZAY CORPORATION 13-2587863
234 KIMZAY FLORIDA, INC. 13-2587853
235 KIMZAY GEORGIA, INC. 13-2603693
236 KIMZAY GREENWOOD, INC. 13-2663112
237 KIMZAY ILLINOIS, INC. 13-2587858
238 KIMZAY MISSOURI CORPORATION 13-2636710
239 KIMZFERN, INC. 11-3035885
240 KIMZGATE, INC. 11-3035881
241 KIMZLAR, INC. 11-3050459
242 KIMZWOOD, INC. 11-3035886
243 KIR AMARILLO 879, INC. PENDING
244 KIR ARBORETUM CROSSING 564, INC. PENDING
245 KIR BELLINGHAM 542, INC. PENDING
246 KIR CITYPLACE MARKET 565, INC. PENDING
247 KIR COPIAGUE 545, INC. PENDING
248 KIR EAST WICHITA 814, INC. PENDING
249 KIR FAIRFAX 547, INC. PENDING
250 KIR GARLAND 566, INC. PENDING
251 KIR GLENDALE 549, INC. PENDING
252 KIR GREENSBORO 550, INC. 56-2108630
253 KIR JORLIN 889, INC. PENDING
254 KIR LEWISVILLE 568, INC. PENDING
255 KIR MANCHESTER 872, INC. PENDING
256 KIR MINNETONKA 552, INC. PENDING
257 KIR OAK PARK 596, INC. 22-3614608
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
13-2744380
DECEMBER 31, 1998
ENTITY NAME FEI
----------------------------------------------------------------------
258 KIR OXNARD 556, INC. PENDING
259 KIR RICHARDSON 572, INC. PENDING
260 KIR SMOKETOWN STATION 562, INC. PENDING
261 KIR WEST WICHITA 815, INC. PENDING
262 KIR WESTGATE MARKET 561, INC. PENDING
263 KRC ACQUISITION CORP. 11-2993846
264 KRC ACQUISITION CORP. 11-2993846
265 KRC ALTON 802, INC. 37-1377797
266 KRC AMARILLO 879, INC. 75-2725430
267 KRC ARLINGTON 866, INC. 75-2725443
268 KRC ADDISON 898, INC. 36-4270002
269 KRC ARLINGTON HEIGHTS 896, INC. PENDING
270 KRC AURORA 890, INC. PENDING
271 KRC BELLEVILLE, INC. PENDING
272 KRC BRIDGETON 875, INC. 43-1792428
273 KRC BRIDGEVIEW 894, INC. PENDING
274 KRC CARBONDALE 848, INC. 36-4181898
275 KRC CHAMPAIGN 870, INC. PENDING
276 KRC CHRISTY 804, INC. 36-4251467
277 KRC CORPUS CHRISTI 878, INC. 75-2725431
278 KRC CRESTHILL 868, INC. 36-4181908
279 KRC CRESTWOOD 887, INC. 36-4181906
280 KRC CREVE COEUR 830, INC. 36-4251476
281 KRC CRYSTAL LAKE 891, INC. PENDING
282 KRC ELGIN 860, INC. PENDING
283 KRC FAIRVIEW HEIGHTS 881, INC. PENDING
284 KRC FOREST PARK 862, INC. 36-4181902
285 KRC INDEPENDENCE 806, INC. 36-4251469
286 KRC IRVING 867, INC. PENDING
287 KRC JOPLIN 889, INC. 36-4251490
288 KRC KIRKWOOD 803, INC. 36-4251464
289 KRC LEMAY 834, INC. 43-1792427
290 KRC MACARTHUR BLVD 799, INC. PENDING
291 KRC MANCHESTER 872, INC. 36-4251488
292 KRC MELROSE PARK 888, INC. PENDING
293 KRC MIDWEST CITY 857, INC. 73-1543453
294 KRC MISHAWAKA 895, INC. 35-2056382
295 KRC MOLINE 794, INC. PEN5ING
296 KRC MUNDELIEN 874, INC. PENDING
297 KRC N. KOSTNER 853, INC. 36-4181900
298 KRC N. ROCKWELL 882, INC. 73-1526425
299 KRC NILES 865, INC. 36-4191909
300 KRC NORRIDGE 845, INC. 36-4181905
<PAGE>
KIMCO REALTY CORPORATION AND SUBSIDIARIES
13-2744380
DECEMBER 31, 1998
ENTITY NAME FEI
----------------------------------------------------------------------
301 KRC O'FALLON DC 861, INC. 36-4251480
302 KRC ORLAND PARK 809, INC. PENDING
303 KRC OVERLAND PARK 805, INC 48-1202710
304 KRC PADUCAH 795, INC. PENDING
305 KRC PETERSON AVE 893, INC. PENDING
306 KRC PULASKI 841, INC. PENDING
307 KRC ROCKFORD 796, INC. PENDING
308 KRC S. SHIELDS 871, INC. 73-1526423
309 KRC SCHAUMBERG 855, INC. 36-4181901
310 KRC SHAWNEE 884, INC. 75-2725442
311 KRC SOUTHBEND 883, INC. PENDING
312 KRC SPRINGFIELD 869, INC. 43-1839496
313 KRC ST. CHARLES 798, INC. 36-4251491
314 KPC ST. JOSEPH 880, INC. 36-4251489
315 KRC TULSA 859, INC. 73-1526424
316 KRC WAUKEGAN 886, INC. PENDING
317 KRCV CORP 74-2846276
318 LAUREL 173, INC. 52-1948299
319 MANETTO HILLS ASSOCIATES, INC. 13-2604645
320 MILMAR REALTY CORP. 13-2671681
321 MOHEGAN CONSTRUCTION CORP. 13-2720238
322 MOHEGAN DEVELOPMENT CORP. 13-2720119
323 NORBER CORP. 11-2691272
324 PASSIVE INVESTORS, INC. 11-2723241
325 PERMELYNN CORPORATION 13-2660042
326 PERMELYNN OF BRIDGEHAMPTON, INC. 13-2690180
327 PERMELYNN OF GEORGIA, INC 13-2731264
328 PERMELYNN OF WESTCHESTER, INC. 13-2702562
329 REDEL CONSTRUCTION CORP. 13-3793428
330 RICH HILL, INC. 13-2731275
331 ROCKINGHAM 620, INC. 02-0471000
332 SAINT ANDREWS SHOPPING CENTER CORP OF CHARLESTON 11-2464767
333 SANNDREL OF HARRISBURG, INC. 13-2684422
334 SANNDREL OF PENNSYLVANIA, INC. 13-2700618
335 SANNDREL OF VIRGINIA, INC. 13-2700298
336 SANNDREL, INC. 13-2670120
337 THE PRICE R.E.I.T. INC, 11-3437944
338 VADBORN REALTY CORP. 11-2535543
339 WOODS0 CORP 11-2964256
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statements of Kimco Realty Corporation and Subsidiaries on Forms S-3
(File Nos. 333-61303 and 33-60050) and Form S-8 (File Nos. 333-61323
and 33-80729), of our report dated February 26, 1999, on our audits
of the consolidated financial statements and financial statement
schedules of Kimco Realty Corporation and Subsidiaries, as of
December 31, 1998 and 1997, and for each of the three years in the
period ended December 31, 1998, which report is included in this
Annual Report of Form 10-K.
/S/ PRICEWATERHOUSECOOPERS LLP
New York, New York
March 29, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 43,920,544
<SECURITIES> 26,005,350
<RECEIVABLES> 34,970,940
<ALLOWANCES> 3,150,000
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,023,901,985
<DEPRECIATION> 255,949,923
<TOTAL-ASSETS> 3,051,178,421
<CURRENT-LIABILITIES> 0
<BONDS> 1,289,560,884
0
1,329,159
<COMMON> 601,337
<OTHER-SE> 1,583,088,356
<TOTAL-LIABILITY-AND-EQUITY> 3,051,178,421
<SALES> 338,797,629
<TOTAL-REVENUES> 338,797,629
<CGS> 91,286,730
<TOTAL-COSTS> 91,286,730
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 64,911,743
<INCOME-PRETAX> 127,166,331
<INCOME-TAX> 0
<INCOME-CONTINUING> 127,166,331
<DISCONTINUED> 0
<EXTRAORDINARY> 4,900,361
<CHANGES> 0
<NET-INCOME> 122,265,970
<EPS-PRIMARY> 1.95
<EPS-DILUTED> 1.93
<FN>
Financial Data Schedule information has been extracted from the
Registrant's Condensed Consolidated Balance Sheet (non-classified) as
of December 31, 1998 and the Condensed Consolidated Statement of
Income for the year then ended.
</FN>
</TABLE>
