<PAGE>
Here's why
you should vote
/X/for
the Kramont
merger
<PAGE>
Letter to Shareholders
To Fellow Kranzco Shareholders:
With this brochure you received a proxy statement asking you to vote on the
merger of Kranzco Realty Trust and CV Reit into a new shopping center REIT to be
called Kramont Realty Trust. The management and Board of Trustees of your
company are enthusiastic about the potential long-term benefits to shareholders
from combining the two companies and we urge you to vote "for."
The potential major benefits of the merger to Kranzco shareholders include:
X Increase Critical Mass--In the REIT industry, management believes that
size matters, and Kramont will own 84 properties and manage six
properties in 16 states with more than 12 million square feet of
leasable space and an asset base having a value in excess of $800
million -- significantly larger than the current Kranzco asset base.
X Provides Management Depth And Succession--Louis P. Meshon, Sr., an
experienced, successful real estate executive will serve as Kramont's
President and Chief Executive Officer and Norman M. Kranzdorf,
President and Chief Executive Officer of Kranzco, will be Kramont's
Chairman, facilitating a smooth corporate transition and providing
seamless management succession. A strong, skillful management team has
been created by bringing together seasoned executives who have served
CV Reit and Kranzco with distinction.
X Strengthens Operating Capabilities--Kramont will have a highly
experienced in-house leasing capability to help maximize profit
potential, and a corporate structure management believes should make
Kramont more attractive to sellers of shopping centers.
X Maintains Attractive Cash Distributions--It is anticipated that the
Board of Trustees of Kramont will maintain the 32.5 cents per share
quarterly distribution rate currently paid to Kranzco common
shareholders and that the distribution rates for preferred shares will
also be equal to those currently paid to holders of Kranzco preferred
shares.
X Enhances Liquidity And Financial Resources--A stronger financial
foundation, total assets of over $800 million and more than 18 million
common shares outstanding should generate greater access to capital
markets and increased investor interest.
We encourage you to read the joint proxy statement/prospectus and this
booklet provided and vote in favor of the merger proposal. If you do not vote,
it is comparable to voting "against" the combination of companies, so your vote
is important. As the founder of Kranzco and a fellow shareholder, I ask you to
join me in creating a new and exciting real estate investment trust. If you have
any questions, please call Robert Dennis or me at 1-800-783-9290.
Sincerely,
/s/ Norman M. Kranzdorf
Norman M. Kranzdorf
President and Chief Executive Officer
1
<PAGE>
Critical Mass
Why Bigger Is Better
The addition of CV Reit's 22 owned and six managed properties with 3
million square feet of leasable space to Kranzco's 62 properties with
approximately 9 million square feet of leasable space, will strengthen our
position in markets currently served as well as gain entry to new markets.
The merger will produce additional tenant diversification and additional
strong anchor stores which is expected to lower default risk and increase
tenant quality and stability.
As a result of the merger, Kramont is expected to generate nearly 70
percent of its estimated 2000 net operating income from markets in the
Northeast, where the economy remains vibrant and growing.
One measurable, positive result of the economies of scale is expected to
be an estimated $1.25 million annualized administrative cost savings once
operations have been fully integrated.
[MAP OF THE EASTERN PORTION OF THE UNITED STATES APPEARS
HERE DEPICTING THE LOCATION OF KRAMONT'S SHOPPING
CENTERS, FREE STANDING PROPERTIES AND HEADQUARTERS]
2
<PAGE>
Management Continuity
A Key To Sustained Growth
Kramont management is comprised of seasoned real estate executives who have
operated effectively in all economic environments for decades. They include:
Chairman of the Board Norman M. Kranzdorf
Founder, President and Chief Executive Officer of Kranzco with more than 40
years of shopping center management and development experience.
President and Chief Executive Officer Louis P. Meshon, Sr.
President and Chief Executive Officer of CV Reit, and Founder of Montgomery
Development Co. in 1974, which was acquired by CV Reit in 1997, has more
than 30 years of retail real estate experience and is a recognized
authority on commercial properties.
Executive Vice President-Administration George Demuth
Kranzco's Director of Leasing, entered the shopping center industry 18
years ago.
Senior Vice President Acquisitions Charlie T. Morroney
Senior Vice President in charge of property acquisitions and disposition at
Montgomery CV Realty L.P., CV Reit's operating partnership, has 35 years of
experience in all phases of commercial real estate.
Senior Vice President of Leasing John R. Comp
Senior Vice President of Leasing for Montgomery, has over 30 years of
commercial real estate experience.
Senior Vice President of Operations & Development James N. Seip
Vice President of Construction and Operations for Montgomery, has nearly 30
years of real estate industry experience, specializing in project
development and construction.
3
<PAGE>
The Board
Each of the seven individuals nominated to be members of the Board of
Trustees are experienced in the real estate industry and the special
responsibilities of public companies. In addition to Messrs. Meshon, Sr., and
Kranzdorf, the nominees are:
Bernard J. Korman
Chairman of the Philadelphia Health Care Trust, a non-profit organization
and Chairman of NutraMax Products, Inc., a publicly-traded consumer health
care products company. He serves as a director of The Pep Boys, Inc., auto
supplies; The New America High Income Fund, Inc., financial services; Omega
Healthcare Investors, Inc., a health care REIT; and Omega Worldwide, Inc.,
a real estate company.
H. Irwin Levy
Chairman of the Board of CV Reit; Chairman, Chief Executive Officer and
majority stockholder of Hilcoast Development Corp., principally engaged in
the ownership and management of recreation facilities at active adult
condominium communities in southern Florida. He is also a director of nStor
Technologies, Inc., a manufacturer of information storage and storage area
network solutions.
Milton Schneider
Chief Executive Officer of The Glenville Group, engaged in the development,
ownership and management of commercial and residential properties; chairman
of Togar Property Company, an apartment development firm; vice chairman of
Parkland Management Company, a financial services company; and vice
chairman of Horvitz Newspapers, Inc.
E. Donald Shapiro
The Joseph Solomon Distinguished Professor of Law at New York Law School.
He serves as Director of Loral Space and Communications, satellite
communications; GHI, non-profit health care provider; Vasomedical, Inc.,
medical products; United Industrial Corporation, defense industry; and
Frequency Electronics, space and communication components.
Alan L. Shulman
Private investor; former chairman of CV Reit; former general partner of
Unitel Associates Ltd., which owned and operated Holiday Inn motels in
Florida. He is a director of Eagle Homes, a publicly-traded real estate
development company.
Corporate Headquarters
Kramont will be headquartered at the Plymouth Meeting, PA, offices of
Montgomery CV Realty L.P., a few miles from Kranzco's current offices.
4
<PAGE>
Operating Capabilities
Broader, Stronger, More Effective
Kramont has the potential for attractive growth through internal property
development and the acquisition of undervalued properties managed by a team of
real estate professionals with a strong track record for taking advantage of
such opportunities.
CV Reit's occupancy rate of approximately 97 percent attests to the
effectiveness of its in-house leasing department which should benefit the
Kranzco portfolio which has an occupancy rate of approximately 91 percent. This
capability will diminish the need--and expense--of independent real estate
brokers, improve the efficiency of property management and further strengthen
tenant relationships.
Kramont will be structured as an Umbrella Partnership REIT (UPREIT), which
will offer attractive tax advantages to sellers of property, enhancing the
company's acquisition program.
5
<PAGE>
Cash Distributions
Continue Attractive Yield
Kramont intends to maintain the attractive distribution rate paid to
Kranzco common shareholders of 32.5 cents per share per quarter, equal to $1.30
per share on an annual basis. Preferred shareholders will also continue to
receive distributions at the same rate currently paid by Kranzco.
Greater Liquidity And Resources Offer Greater Growth Potential
Increased liquidity, greater financial resources, balance sheet
flexibility, cash flow stability and a larger market capitalization will provide
Kramont with the abilities to:
More aggressively renovate, expand and reposition existing
properties.
Attract and retain quality managers with enhanced potential for
professional advancement.
More easily obtain future financing for accelerated growth.
Increase the appeal of Kramont's shares to the investment community.
6
<PAGE>
Kranzco
128 Fayette Street
Conshohocken, PA 19428-0805
610-941-9292 o www.ktt.com o [email protected]
